Palestinian Authority May Defend Itself in N.Y. Courts

The battle in Gaza and the West Bank will soon come to a federal court on Pearl Street.

In a surprising shift, the prime minister of the Palestinian Authority says his government is willing to defend itself against lawsuits alleging that it is liable for acts of Palestinian Arab terrorism during the intifada, according to court papers.

For years, the Palestinian Authority has refused to contest such suits or acknowledge the jurisdiction of American courts, resulting in hundreds of millions of dollars in default judgments that the Palestinian Authority has refused to pay. Now, in a move that could lead to trials, the prime minister, Salam Fayyad, is calling on federal judges in New York and Rhode Island to throw out the default judgments and give the authority another chance to respond to civil suits filed years ago.

"I have instructed new counsel that the Defendants will participate fully in this and other litigation in a cooperative manner," Mr. Fayyad pledged in an affidavit filed in court in Rhode Island.

The shift could prompt new suits against the Palestinian Authority, if other litigants, such as businessman, believe that the authority might actually pay judgments awarded by American courts.

What exactly is motivating the change is unclear, although it may have come at the urging of American officials. Last year, Secretary of State Rice wrote to the president of the Palestinian Authority, Mahmoud Abbas, urging him to "respond to U.S. legal proceedings in a good faith and a timely manner," according to court documents.

Yet one judge already has expressed skepticism about the sincerity of the authority's request for a trial.

"The purported good faith of Defendants, whether they truly mean what they say in this regard, also remains to be seen," a district court judge in Manhattan, Victor Marrero, wrote in one recent order on the subject. Judge Marrero conditioned his agreement to hold a trial on the Palestinian Authority's willingness to post a bond in the amount of one default judgment plus interest, $192,740,660.13.

The judgment was entered in a suit relating to the 2002 death of an American, Aharon Ellis, who was gunned down while singing at a bat mitzvah in Hadera, Israel. The gunman, as well as those who helped orchestrate and fund the attack, were Palestinian Authority security officials, the plaintiffs claim. The Palestinian Authority claims the men were working as rogue agents, according to a decision by Judge Marrero.

In May, lawyers for the Palestinian Authority at the Washington law firm Miller & Chevalier wrote to Judge Marrero to say they had discussed the matter of a bond "at the highest levels of the Palestinian government," but that the state of the Palestinian Authority's finances made posting "a $193,000,000 bond a practical impossibility."

Making a counteroffer, Mr. Fayyad says he has authorized the payment of a $15 million bond, according to an affidavit.

Noting that the Palestinian Authority relies on foreign aid, including from America, Mr. Fayyad said other foreign countries might not like to see their aid money going to pay court judgments.

"There would be a substantial negative impact on future donations if donor countries learn that funds have been used for U.S. litigation rather than for providing relief in the Occupied Palestinian Territory," Mr. Fayyad said in his affidavit.

As a show of good faith, the Palestinian Authority this month paid off one American court judgment for $1.5 million to the owners of seized construction equipment. It is the first American court judgment that the Palestinian Arab government has paid in recent years.

A lawyer for relatives of Ellis, David Strachman, has argued that the requests for a trial by Mr. Fayyad are hollow.

"Even if the motion was granted and a new judgment entered against defendants after a trial on liability, the defendants would not honor it," Mr. Strachman argued in court filings.

Mr. Strachman declined to comment. A lawyer for the Palestinian Authority, Richard Hibey, did not return repeated calls for comment.