A federal appeals court has ordered the reconsideration of a lawsuit against the Palestine Liberation Organization (PLO) and the Palestine Authority (PA). The ruling in the case, Ungar v. The Palestine Liberation Organization, vacates an earlier default judgment entered against the PLO and the PA, and forces the lower court to hear arguments why the groups shouldn't have to pay a $116 million verdict against it for the 1996 death of an American couple in Israel.

Yarun Ungar, a U.S. citizen, was driving home from a wedding with his wife Efrat, and their nine-month old son when Hamas members riddled their car with machine-gun fire, killing the couple. The estate then filed a civil suit against the PLO and the PA under the Anti-Terrorism Act in U.S. District Court in Providence, Rhode Island.

But the defendants neither answered the complaint nor participated in discovery. Instead, they tried to ignore the suit, unwilling to accept the legitimacy of U.S. courts over the cases. That prompted a federal judge to grant a default judgment of $116 million in favor of the plaintiffs.

Since that time, however, the PLO and PA - in an effort to improve relations with the U.S. - have said they now are willing to defend themselves in court. The organizations insist they have had a good-faith change of heart and that they have legitimate, merit-based arguments to defend themselves, the ruling states. They emphasize the unique nature of the case, its political ramifications and its potential impact on international relations.

In reviewing the request to vacate the lower court, the First Circuit ruled that the lower court abused its discretion when it denied the defendant's motion to void the judgment. Agreeing with the defendants, the court suggested that the issue is simply too important to allow the default judgment to stand.

The decision, issued by the Court of Appeals for the First Circuit, is only the most recent development since the PLO and the PA changed its legal tactics and decided to start defending civil suits filed against it rather than stonewalling. As we previously reported, a federal judge in the District of Columbia granted a similar motion to vacate an entry of default against the PA and PLO.