Wednesday, February 22, 2006
Ninth Circuit Ordered to Reconsider Whether Brother Of Slain Dissident Can Attach Award to Iran
By a MetNews Staff Writer
The Supreme Court yesterday ordered the Ninth U.S. Circuit Court of Appeals to reconsider a ruling that would allow the brother of a victim of Iranian terrorism to collect $2.8 million from a California company that owes Iran for a cancelled weapons shipment.
In a unanimous per curiam ruling, the court directed the Ninth Circuit to determine whether Iran’s Ministry of Defense is a “core” part of the Iranian government, and thus immune from being sued in this country under the Foreign Sovereign Immunities Act.
The plaintiff, Dariush Elahi, argued that the ministry is a commercial instrumentality of the government and thus subject to an exception to the FSIA. The Bush administration sided with Iran in arguing that the ministry is part of the government itself and thus immune.
The plaintiff’s brother, Cyrus Elahi, was an Iranian-born U.S. citizen murdered in Paris in 1990, reportedly by agents of Iran’s Islamist regime.
U.S. District Judge Rudi M. Brewster of the Southern District of California allowed Dariush Elahi to attach the $2.8 million awarded the ministry in an International Chamber of Commerce arbitration proceeding on Iran’s claim for undelivered military hardware sold by Cubic Defense Systems, Inc. of San Diego in the 1970s.
Cubic’s dispute with Iran goes back to 1977, when it entered into a contract to sell and service an Air Combat Maneuvering Range for use by the Iranian Air Force. Like other military items, however, the system went undelivered after the Iranian revolution of 1979.
In 1991, Iran invoked the arbitration clauses of its contracts with Cubic and called for proceedings before the Zurich-based International Chamber. The panel ruled in favor of Iran, and in 1998 Iran petitioned the Southern District court to confirm the award.
Judgment confirming the award, entered in December 1998, was appealed by Cubic. Elahi filed a lien against the award to enforce a judgment obtained under the Antiterrorism and Effective Death Penalty Act of 1996. AEDPA allows Americans to sue a foreign state if it committed a terrorist act that injured or killed a U.S. citizen, or provided material support to the person or entity that did.
(New Jersey lawyer Stephen Flatow, who obtained a default judgment under AEDPA against Iran for the death of his daughter, killed in a terrorist bombing attributed to an Iranian-backed group, also filed a lien. But Brewster and the Ninth Circuit both ruled that he could not collect because he had accepted compensation from the U.S. government under the Victims Protection Act passed in 2000.)
Cyrus Elahi was an official of Flag of Freedom, a group that favors restoring the Iranian monarchy. He was shot six times in the head in his Paris apartment building, and authorities in France and in the United States have linked the killers to the Iranian government.
Dariush Elawi, who declined to accept payment from the VPA fund, which would have required giving up his punitive damage claim, was awarded more than $11 million in compensatory damages, and $300 million in punitive damages.
Senior Judge Betty B. Fletcher, writing for the Ninth Circuit, said that Elahi’s judgment was enforceable against the Ministry of Defense. The FSIA, she noted, contains exceptions to immunity permitting attachment of property “of an agency or instrumentality of a foreign state engaged in commercial activity in the United States,” and abrogating immunity in cases involving state-sponsored terrorism, both of which Fletcher said apply.
Judges Kim M. Wardlaw and Raymond C. Fisher concurred in Fletcher’s opinion.
The Supreme Court, however, said the panel “did not explain what in the record might demonstrate that the Ministry is an ‘agency or instrumentality’ of the state rather than an integral part of the state itself.” The ministry, was not given “clear notice” that the panel might rule on the issue—which the court said was mentioned only in a footnote in the plaintiff’s brief—and has a right to be heard on this “critical legal point,” the justices said.
The case is Ministry of Defense of Iran v. Elahi, 04-1095.
Copyright 2006, Metropolitan News Company