Issues
Does 28 U.S.C. § 1610(g) provide a freestanding exception to attachment immunity, which would allow victims of terrorist acts seeking to collect judgment to attach and execute on assets of foreign state sponsors of terrorism regardless of whether the assets are otherwise subject to execution under § 1610?
The issue in the case is whether 28 U.S.C. § 1610(g) provides a freestanding exception to attachment immunity or only eliminates Bancec’s presumption of separate status for a foreign state and its instrumentalities, without altering the criteria for overcoming immunity contained in other provisions of § 1610. Section 1610(g) is part of the Foreign Sovereign Immunities Act, under which foreign sovereigns are presumed immune from suits and attachment. Jenny Rubin, a U.S. citizen injured in a Hamas suicide bombing in Jerusalem, argues that § 1610(g) provides a freestanding exception to attachment immunity because an interpretation subjecting § 1610(g) to the other provisions of § 1610 creates unresolvable inconsistencies within the statute and significantly limits the reach of subsection (g). Iran counters that § 1610(g) does not provide a freestanding exception to attachment immunity because subsection (g) can still be given its intended effect even when subjecting it to § 1610’s other provisions. Iran further argues that the clearest interpretation of subsection (g) is that it merely eliminates the Bancec presumption. From a policy perspective, this case is significant because it could improve the ability of terror victim judgment-creditors to collect judgments from a terror-sponsoring sovereign that is refusing to pay, and it will affect uniformity between U.S. and many other nations regarding attachment immunity laws.
Questions as Framed for the Court by the Parties
Whether 28 U.S.C. § 1610(g) provides a freestanding attachment immunity exception that allows terror victim judgment creditors to attach and execute upon assets of foreign state sponsors of terrorism regardless of whether the assets are otherwise subject to execution under section 1610.
Facts
Petitioner Jenny Rubin (“Rubin”) is one of eight U.S. citizens who were injured in a Hamas suicide bombing in Jerusalem in September 1997. Following the incident, Rubin filed suit against the respondent, Islamic Republic of Iran (“Iran”), alleging that the state had provided material support to Hamas. Rubin and co-plaintiffs successfully obtained a default judgment against Iran in the amount of $71.5 million. This judgment, however, was never paid.
Iran’s non-payment served as a catalyst for years of litigation in which Rubin attempted to locate Iranian assets in the United States in order to attach and execute on them as a means of satisfying the judgment. This suit involves Rubin’s attempt to attach and execute on four collections of Persian artifacts, three of which—the Persepolis Collection, the Chogha Mish Collection, and the Oriental Institute Collection—are in the possession of the University of Chicago, and one of which—the Herzfeld collection—is in the possession of both the University and Chicago’s Field Museum of Natural History (collectively, “Museums”). None of these attempts have been successful so far.
Rubin initially brought this suit against Iran and the Museums in the Northern District of Illinois District Court in 2006. What followed were procedural battles involving both whether Iran—who failed to appear for the initial suit—had to appear in court to affirmatively plead an immunity defense pursuant to 28 U.S.C. § 1609, and the degree to which Iran was required to comply with requests for discovery regarding all of their assets located anywhere in the United States, with Rubin requesting that Iran identify all of its assets in the country and Iran resisting. These procedural issues were resolved by the Seventh Circuit in Iran’s favor, with the court holding that Iran was not required to appear to raise the defense, nor was it required to locate all of its assets in the United States due to the presumption that foreign-owned assets are immune to attachment. After remand, Rubin’s case regarding the aforementioned artifacts was then heard on the merits. There, the district court judge rejected Rubin’s arguments that there was a statutory basis for executing on the artifacts, and granted summary judgment for Iran and the Museums. In particular, the district judge held that the artifacts were not subject to execution under the “commercial exception” found in 28 U.S.C. § 1610(a), that the Terrorism Risk Insurance Act (TRIA) was inapplicable because there was no current executive order blocking any of the assets in question, and that § 1610(g) was not a freestanding exception to the execution immunity for victims of state-sponsored terrorism. . Rubin subsequently appealed.
On appeal, the Seventh Circuit began by identifying which of the four collections were potentially subject to attachment and execution. Based on a two-part test—that the artifacts must be owned by Iran, and that they must be within the territorial jurisdiction of the district court—the Seventh Circuit concluded that the only collection in dispute was the Persepolis collection, held by the University of Chicago. The court then affirmed the district court’s holding that none of the statutory bases that Rubin offered as support for an attachment and execution on the remaining artifacts were satisfactory. . In so doing, the Seventh Circuit rejected Rubin’s attempt to satisfy this now twenty-year-old judgment against Iran. The Supreme Court granted certiorari to review this holding.
Analysis
INTERPRETATION BASED ON TEXT, STRUCTURE, AND HISTORY
Rubin argues that the text of § 1610(g) should be interpreted broadly and should not be limited by other subsections of § 1610. Rubin contends that nothing in § 1610(g) limits what type of property execution applies and that subsection (g) includes the property of, and interests held by, separate juridical entities. Additionally, Rubin asserts that subsection (g)(1) reaches blocked and unblocked property of foreign sovereigns and their agents because subsection (g)(2) waives United States sovereign immunity for blocked or regulated property. Rubin also notes that unlike subsection (a), subsection (g) does not explicitly contain any reference to additional requirements that the property must meet. Rubin further maintains that requiring another § 1610 exception to execution immunity be met under subsection (g) creates inconsistencies with some of subsection (a)’s requirements—according to Rubin, subsection (g) would be rendered inoperable if a subsection (g) property was required to meet all of subsection (a)’s requirements. Moreover, Rubin argues that this interpretation causes even more difficulties when read together with subsection (b). Rubin maintains that subsection (b) would effectively nullify subsection (g) if subsection (g) was interpreted as simply eliminating the Bancec presumption absent a waiver of immunity.
Iran counters that § 1610(g)’s text should be interpreted according to its clear meaning—eliminating the Bancec presumption—not as a freestanding immunity exception. Iran argues that this interpretation of subsection § 1610(g) is obvious because the five factors listed in subsection (g) are those developed under Bancec by lower courts. Further, Iran contends that nothing in the text of subsection (g) implies that Congress intended to infringe on sovereign immunity any more than merely lifting the separate status presumption because Congress would have explicitly stated so if that was its intent. Additionally, Iran notes that Congress did explicitly indicate in other parts of the Foreign Sovereign Immunities Act (FSIA) when it was modifying immunity by using phrases like “shall be immune” and “shall not be immune from execution,” which are absent in subsection (g). Because Congress omitted such phrases from subsection (g), Iran maintains that subsection (g) does not address immunity but rather addresses separate juridical status of instrumentalities. Iran also argues that congressional amendments to other parts of the FSIA when subsection (g) was enacted would be pointless if subsection (g) was a freestanding immunity exception. Finally, Iran points to the explicitly stated purpose for the amendments as evidence that Congress’s intent was to eliminate the Bancec presumption. Iran further supports this assertion by emphasizing that the Congressional Research Service reached the same conclusion after the bill became law.
INTERPRETATION OF “AS PROVIDED IN THIS SECTION”
Next, Rubin contends that contrary to the Seventh Circuit’s decision, the words “as provided in this section,” found in subsection (g), would not be superfluous unless the rest of § 1610 also applied. Rubin asserts that the Ninth Circuit’s interpretation of “as provided in this section” is a better interpretation and that the phrase instead refers to subsection (f)’s procedures. Rubin maintains that if the Seventh Circuit was correct that subsection (g) only eliminates the Bancec presumption, execution on only one of the three types of property mentioned in subsection (g) would be possible because Bancec is inapplicable to the other two categories. Further, Rubin argues that the Seventh Circuit’s interpretation of “as provided in this section” effectively references only subsection (a)(7) of § 1610 because subsections (c), (d) and (e) cannot work together with subsection (g) to carry out subsection (g)’s purpose, subsection (f) is not in effect, subsection (b) effectively nullifies subsection (g), and the rest of subsection (a) conflicts with subsection (g). Rubin also contends that her interpretation of subsection (g) does not make subsections (a)(7) and (b)(3) superfluous because these subsections reach older judgments that subsection (g) does not and serve as a safety net to provide relief in other types of cases that subsection (g) would not reach. Finally, Rubin asserts that interpreting “as provided in this section” as the Ninth Circuit did in Bennett v. Islamic Republic of Iran or as referring to § 1083 of the National Defense Authorization Act (NDAA) of 2008 makes more sense than the Seventh Circuit’s interpretation based on legislative history and the purpose of § 1083.
Iran counters that Rubin has failed to provide a plausible interpretation of “as provided in this section.” Iran contends that this phrase cannot refer to subsection (f), as the Ninth Circuit held, because the word “section” is used, not “subsection”—thus, the only interpretation that makes sense is that the phrase refers to § 1610 as a whole. Additionally, Iran asserts that subsection (f) never went into effect, meaning subsection (g) would not function to allow for any execution of property. Iran maintains that “as provided in this section” also does not refer to § 1083 of the NDAA of 2008 because Congress intended for the phrase to be inserted into this specific section of the U.S. Code, meaning Congress also intended that it refer to this section. Iran argues that Congress would not use this language to refer to uncodified law, and further, interpreting “as provided in this section” to mean § 1083 would give the phrase no purpose or meaning. Iran then contends that Rubin’s interpretation would have made subsections (a)(7) and (b)(3) superfluous at the time of the 2008 amendments because there would have been no reason for Congress to make the commercial activity exceptions in these subsections available for executing certain judgments if subsection (g) could reach the same property without requiring proof of commercial activity. Further, Iran notes that these subsections could not reach older judgments that subsection (g) also could not reach at the time of the amendments because Congress removed this power before re-inserting it in 2012. Finally, Iran asserts that the Seventh Circuit’s interpretation of subsection (g) does not make it self-defeating. Rather, Iran maintains that the Bancec presumption and the commercial activity exception operate separately and interpreting “as provided by this section” as referencing all of § 1610 does not render any element superfluous, though it may decrease § 1610(g)’s utility to judgment creditors.
LEGISLATIVE INTENT AND PRINCIPLES OF FOREIGN SOVEREIGN IMMUNITY
Rubin maintains that the legislative intent behind § 1083 of the NDAA of 2008 should be considered in determining any uncertainty in subsection (g)’s meaning. Rubin notes that foreign sovereign immunity is not a constitutional requirement but rather rooted in principles of comity. Rubin then argues that in the Justice Against Sponsors of Terrorism Act (JASTA), the most recent amendment to the FSIA, Congress clearly stated its intent: to provide adequate remedies for American victims of foreign terrorism. Further, Rubin contends that the State Department and courts have denied sovereign immunity in many instances in order to promote other values—even at the expense of comity—thereby promoting a “restrictive” view of foreign immunity. Rubin asserts that the terrorism exception should be viewed as utilizing an expansive view of this theory or as a justified departure from foreign sovereign immunity, which is well within Congress’ power. Additionally, Rubin maintains that § 1083 of the NDAA of 2008 demonstrates that Congress intended to thoroughly compensate terrorism victims and punish foreign countries by equipping terrorism victims with the tools to fully enforce their judgments. Rubin argues that this intent requires that subsection (g) be broadly construed—otherwise, subsection (g) would restrict the potential assets that post-judgment execution could reach, rather than expand them. Finally, Rubin contends that the Seventh Circuit’s interpretation of subsection (g) as incorporating subsection (a)’s commercial use requirement is also inconsistent with congressional intent. Rubin asserts that the commercial use requirement would significantly reduce the benefits subsection (g) was intended to provide, given the difficulty historically in meeting the “use” element of the requirement.
Iran counters that Rubin’s interpretation significantly conflicts with the traditional restrictive theory of sovereign immunity, which Congress codified by enacting FSIA. Iran maintains that Congress has consistently distinguished between commercial and non-commercial activity in the context of sovereign immunity, creating execution exceptions from immunity only for property used for commercial activity in the United States. Iran also argues that JASTA is irrelevant because it applies to jurisdictional immunity, not execution immunity—Congress has only allowed execution absent commercial activity where property is regulated or blocked due to economic sanctions. Further, Iran contends that Rubin’s interpretation conflicts with international law, which consistently allows execution of assets only when they are commercial in nature. Iran asserts that FSIA is grounded in this principle and that the Supreme Court has often recognized principles of international law in the past. Next, Iran maintains that while Congress enacted § 1610(g) to increase the number of available assets for victims of terrorism to enforce judgments on, Congress fulfilled this purpose by removing the Bancec presumption and did not go any further. Iran argues that Rubin’s interpretation would allow for the seizure of cultural artifacts and other property important to sovereign functions—property that is not commercial and has always been protected.
Discussion
TERROR VICTIM RECOVERY AND PRINCIPLES OF FOREIGN SOVEREIGN IMMUNITY
The Former U.S. Counterterrorism Officials (“FCO”), in support of Rubin, argue that reading 28 U.S.C. § 1610(g) narrowly would make it very difficult for victims of terrorist acts to ever recover a judgment for their injuries. , . FCO contends that this is because attachment under § 1610(b) is an onerous process—involving proving that both the foreign sovereign and the agency were involved in the terrorist acts that caused the victim’s injuries—in addition to meeting the commercial-use requirement of the asset being attached. . The Victims of Iranian Terrorism (“VIT”), which is comprised of the parents of a terrorist attack victim, echo these sentiments, maintaining that following Iran’s reading of § 1610(g) would be tantamount to stripping terror victims of any means of redress for their injuries., . VIT argues that Congress, realizing that the commercial-activity requirement was unfair to victims of Iranian terrorism, purposefully crafted § 1610(g) as a way to benefit these groups. .
Respondent the University of Chicago (“University”) argues that 28 U.S.C. § 1610(a)(7) already provides victims of state-sponsored terrorism an easier way to circumvent immunity for executing on foreign-owned assets within the United States. . This is so because, the University points out, that section exempts victims of terrorist acts from having to prove that the property they wish to attach and execute on was related to or used in the act that led to their injuries. Moreover, the University maintains that Rubin’s broad reading of § 1610(g) to completely exclude a commercial requirement for the asset being attached would disrupt principles of foreign sovereign immunity that have been intact since the mid-twentieth century. . Agreeing with this position, Iran points out that other foreign nations largely respect the commercial-noncommercial limitation on attachment of sovereign assets. . Iran posits that following Rubin’s interpretation of § 1610(g) would lead to a conflict with the laws of other nations, something that the Court ought to avoid when interpreting statutes, and that the interpretation completely disregards traditional international immunity principles. .
LITIGATION’S EFFECT ON THE WAR ON TERROR AND FOREIGN POLICY INTERESTS
FCO argues that civil litigation is a useful weapon in the war on terror. . In particular, FCO points to data suggesting that civil litigation helps cut off funds for terrorist groups by hampering supporters of those groups, which leaves less money available to carry out terrorist operations. This decrease in available money, FCO maintains, helps complement the government’s efforts against the war on terror without adding anything to the taxpayer’s tab. . . Moreover, FCO asserts that civil litigation offers the benefits of liberal discovery rules and a low burden of proof, making it superior in some respects to criminal investigations and enforcement. The FCO points out, however, that many of the benefits attributable to allowing civil litigation against state sponsors of terror are only realized when the prospects of a collectable judgment are real. Thus, FCO argues, interpreting § 1610(g) to allow attachment of a foreign sovereign’s property irrespective of a commercial purpose is important to the goal of fighting terrorism. .
Iran counters by pointing to the important foreign policy interests undermined by adopting the reading of § 1610(g) that Rubin urges. , . Iran maintains that allowing attachment of the artifacts in this case would not only greatly offend traditional views of sovereign dignity but also open the door to other litigants attempting to attach other important cultural artifacts to satisfy foreign state judgments. . As an example, Iran argues that this could include important documents like the Declaration of Independence, saying that if the U.S. were to temporarily loan it to a museum in another country, a creditor with a judgement against the U.S. could potentially attach and execute on the document. . Iran posits that this kind of situation would create international friction, could cause retaliation by other countries, and could ultimately have a negative effect on the Executive Branch’s ability to maintain good relations with foreign countries and manage foreign affairs generally. Because the Executive has a duty to protect U.S. interests and to preserve relationships with foreign countries, Iran argues that § 1610(g) should not be interpreted in a way that would allow judgment-creditors to potentially undermine that duty.
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Acknowledgments
Additional Resources
- Elliot Kaufman, U.S. Victims of Terrorism Take Tehran to Court, National Review (July 6, 2017).
- Evan Weinberger, Supreme Court Will Take Up Iran Artifacts Case, Law360 (June 27, 2017).