Palestinian Authority President Mahmoud Abbas looks on as he visits the Istishari Cancer Center in Ramallah, in the West Bank, May 14, 2025. Photo: REUTERS/Mohammed Torokman

A US federal appeals court on Monday reinstated a whopping $655.5 million judgment against the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA), delivering a major legal victory for American victims seeking to hold the groups responsible for the notorious “pay-for-slay” terrorism program. 

The ruling by the US Court of Appeals for the Second Circuit restored a jury’s earlier finding that the PLO and PA bore civil liability under the Anti-Terrorism Act for a series of attacks in Israel that killed and injured US citizens.

In its opinion, the court recalled its previous mandate vacating the initial decision, writing that doing so was warranted by “intervening changes in underlying law” and the need to prevent an unjust outcome after years of litigation. The panel emphasized that appellate courts retained the authority to revisit earlier decisions in “extraordinary circumstances,” a standard it found satisfied in this case.

The judges also addressed the issue of jurisdiction, which had previously served as an obstacle in the case. 

In 2023, a federal appeals court ruled that US courts did not have the authority to hear certain lawsuits against the PLO and the PA stemming from terrorist attacks abroad that killed or injured American citizens. In a decision issued by Second Circuit court, the panel concluded that Congress could not compel foreign defendants to face litigation in US courts without sufficient ties to the country, dealing a significant setback to victims seeking damages through American legal channels.

But the court signaled that subsequent legal developments from the Supreme Court and evolving interpretations of the Anti-Terrorism Act altered the analysis enough to justify reinstating the judgment.

At the center of the case was the Anti-Terrorism Act’s provision allowing US nationals to seek civil damages for acts of international terrorism. A jury had originally awarded damages to victims and their families, finding a link between the alleged terrorists and attacks targeting civilians. Those damages resulted in the mandated enforcement of the more than $650 million judgment.

For victims’ families and advocates, the decision marked a significant step toward enforcing consequences against groups accused of supporting or incentivizing violence.

Supporters have argued that lawsuits play a critical role in deterring terrorism, particularly when criminal prosecution is not possible. By reinstating the judgment, the court appeared to endorse the broader principle that US law can serve as a tool of accountability, even in cases involving foreign actors and overseas attacks.

The court cautioned that enforcement presents a distinct set of legal and practical challenges. It pointed to potential obstacles including asset location, sovereign protections, and the complexities of executing judgments against foreign entities.

The Palestinian Authority, which exercises limited self-governance in the West Bank and has long been riddled with accusations of corruption, has for years carried out a so-called “pay-for-slay” program, which rewards terrorists and their families for carrying out attacks against Israelis.

Under this policy, official payments are made to Palestinian prisoners held in Israeli jails, the families of “martyrs” killed in attacks on Israelis, and Palestinians injured in terrorist attacks.

Reports estimate that approximately 8 percent of the PA’s budget has been allocated to paying stipends to convicted terrorists and their families.

Skeptics suggest the hurdles in seeking financial retribution from the PLO and PA could prove substantial. The PLO and PA maintain limited assets within the US, and some may be protected from seizure. Efforts to enforce the judgment could also raise sensitive diplomatic concerns, particularly given the entities’ role in international negotiations and governance.

The case is likely to have far-reaching implications for future terrorism litigation, particularly as Congress continues to explore ways to expand the reach of US courts in holding foreign actors accountable.