Ruling in terror attack case ends over two decades of litigation

OCTOBER 2017 TERM

In what appears to be the end of a very long journey, the U.S. Supreme Court has affirmed the 7th U.S. Circuit Court of Appeals' judgment in the case of Rubin v. Islamic Republic of Iran, 2018 DJDAR 1601 (Feb. 22, 2018), concluding that 28 U.S.C. Section 1610(g) does not provide a freestanding basis for parties holding a Section 1605A judgment to attach and execute against the property of a foreign state.

Over two decades have passed since three Hamas suicide bombers blew themselves up on a crowded pedestrian street in central Jerusalem in September 1997, killing five and wounding nearly 200 people. Among the dead and wounded were a number of American citizens. Hamas claimed responsibility for the bombing, and because Iran provided terrorist training and economic assistance to Hamas, some of the victims and their families brought suit for compensatory and punitive damages against the Islamic Republic of Iran and senior Iranian officials.

Under the Foreign Sovereign Immunities Act of 1976, foreign governments and their agents and instrumentalities are immune from suit in the United States. However, there are exceptions to this broad immunity. One such exception applies to foreign states designated as state sponsors of terrorism with respect to claims arising out of acts of terrorism. 28 U.S.C. Section 1605A.

Pursuant to this provision, Iran's jurisdictional immunity was rescinded, and when Iran failed to appear or respond to the complaints, the U.S. District Court for the District of Columbia entered a default judgment, awarding $71.5 million in compensatory damages and $300 million in punitive damages. Unsurprisingly, Iran did not pay, and over the next few years, the Rubin plaintiffs tried to attach a number of Iranian assets located in the United States in satisfaction of their judgment.

In addition to foreign governments and their agencies and instrumentalities usually being immune from suit in the United States, their property also usually is immune from attachment and execution in satisfaction of judgments against them. 28 U.S.C. Section 1609. However, "the property of a foreign state against which a judgment is entered under section 1605A, and the property of an agency or instrumentality of such a state, [...] is subject to attachment in aid of execution, and execution, upon that judgment as provided in this section." 28 U.S.C. Section 1610(g).

It was under this exception that the Rubin plaintiffs sought to attach and execute Persian antiquities held in museum collections across the United States. Targeting the Oriental Institute at the University of Chicago and the Field Museum of Natural History in Illinois as well as Harvard University, several Harvard University art museums, and the Museum of Fine Arts in Massachusetts, the plaintiffs hoped to auction off the antiquities, covering their judgment award with the proceeds. All but the challenge to the Persepolis Collection held by the University of Chicago's Oriental Institute had been resolved prior to the Supreme Court case, the other collections having been removed from the territorial jurisdiction of the federal courts or determined not to be the property of Iran. The Persepolis Collection consists of approximately 30,000 tablets and fragments over 2,500 years old that were recovered in the 1930s by University of Chicago archaeologists and loaned to the Oriental Institute by Iran for long-term study.

In the Court of Appeals, the 7th Circuit held that the Rubin plaintiffs' Section 1605A judgment does not necessarily entitle them to attach and execute any property of the foreign state, regardless of whether the property is deprived of immunity elsewhere in Section 1610. The court said that when considering the text of the statute, "[t]he phrase 'as provided in this section' refers to the immunity exceptions found elsewhere in § 1610, one of which must apply to overcome execution immunity. So although subsection (g) substantially eases the enforcement process for terrorism victims [...], it is not a freestanding terrorism exception to execution immunity." Rubin v. Islamic Republic of Iran, 830 F.3d 470, 474 (7th Cir. 2016). The 7th Circuit's decision was a split from a 9th Circuit case decided just a month earlier. In Bennett v. Islamic Republic of Iran, the 9th Circuit determined that "as provided in this section" refers to procedures contained in § 1610(f), and, therefore, held that subsection (g) "contains a freestanding provision for attaching and executing against assets of a foreign state or its agencies or instrumentalities." 825 F.3d 949 (9th Cir. 2016).

The Supreme Court granted certiorari to resolve the circuit split the regarding the effect of Section 1610(g) and affirmed the conclusion of the 7th Circuit. In its reasoning, the Supreme Court explained that subsection (g), "serves to identify property that will be available for attachment and execution in satisfaction of a § 1605A judgment, but it does not in itself divest property of immunity." Petitioners would have to establish the property at issue was exempt from immunity under another Section 1610 provision before invoking Section 16010(g) to attach and execute that property. Absent a clearer indication of Congress' intent, and consistent with the most basic interpretive canons, the Supreme Court declined "to read into the statute a blanket abrogation of attachment and execution immunity for §1605A judgment holders."

While the Supreme Court's decision is a long-awaited conclusion to a difficult case, the Rubin plaintiffs are likely never to find justice or satisfaction of their judgment. As victims of a tragic act of state-sponsored terrorism, Jenny Rubin et al. would seem to be exactly who the 20 U.S.C. Section 1605A exceptions were meant to protect. In a contest between the rights of victims vs. the rights of state sponsors of terrorism, the choice is not a difficult one. However, attempting to attach and sell off precious antiquities to the highest bidder is not likely to garner these victims much support, especially considering the delicate balance Congress struck when enacting the Foreign Sovereign Immunities Act "between respecting the immunity historically afforded to foreign sovereigns and holding them accountable, in certain circumstances, for their actions."