Monday, December 6, 2010
Court Rejects Effort to Satisfy Judgment Against Iran
By SHERRI M. OKAMOTO, Staff Writer
A $2.6 billion judgment against Iran, arising from the government’s liability for a 1983 terrorist attack on an American military barrack in Beirut, Lebanon, could not be enforced by the seizure of Iran’s right to payment for the use of its ports, the Ninth U.S. Circuit Court of Appeals ruled Friday.
The panel ruled that a court must raise and decide the issue of sovereign immunity on its own initiative and upheld the district court’s determination that a French shipping corporation’s contractual obligations to Iran were not amenable to attachment as satisfaction for the default judgment secured by the family members of the deceased servicemen and injured survivors of the suicide bombing, which killed 241 people and was the most deadly terrorist attack against Americans prior to 9/11.
In 2001, the plaintiffs brought suit against Iran in the District Court for the District of Columbia, asserting claims for wrongful death, battery, assault, and intentional infliction of emotional distress, but Iran failed to respond to the complaint.
District Judge Royce C. Lamberth—now chief judge of the district—found the attack was carried out with “massive material and technical support from the Iranian government” and that Iran was therefore liable to the plaintiffs for compensatory damages of $2,656,944,877.
Plaintiffs registered the default judgment in the District Court for the Northern District of California and submitted 15 assignment motions, each naming a different shipping company that allegedly owed payment to Iran for use of its ports.
U.S. District Judge Jeffrey S. White elected to consider the motion concerning CMA CGM, and raised the issue of sovereign immunity sua sponte.
Pursuant to the Foreign Sovereign Immunities Act, a country can be held liable for any “personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act.” A judgment in such an action may be satisfied by the attachment of commercial property belonging to that foreign state that is located within the United States.
White found the plaintiffs had failed to identify any Iranian property located in the United States, and even if Iran’s rights to payment from CMA CGM could qualify as such, he could not assign those rights to the plaintiffs because they had not properly served Iran with the assignment motion.
On appeal, plaintiffs contended that immunity is an affirmative defense which can only be asserted by a foreign state defendant. Judge N. Randy Smith also asserted this position in his dissent, but Senior Judge Betty B. Fletcher—joined by Judge Sidney R. Thomas—adopted the Fifth Circuit’s conclusion that a court’s duty to assure itself of its own jurisdiction requires it to raise and decide the issue of immunity.
“We cannot require a defendant to affirmatively plead foreign sovereign immunity from suit, since a court must decide immunity even if a defendant does not appear,” Fletcher reasoned.
“The statutory text, structure, legislative history, and case law suggest that sua sponte consideration is appropriate and serves the dual goals of the FSIA: affording American plaintiffs with a means for bringing suit against foreign states and ensuring that their disputes will not be resolved based on political considerations, and also demonstrating a proper respect for foreign states and sparing them the inconvenience of litigation,” she said.
Fletcher went on to acknowledge that plaintiffs’ counsel erred by mailing a copy of the default judgment to the Iranian Foreign Affairs Ministy himself, rather than asking the clerk of the court to mail the papers, but posited this error was not fatal since the plaintiffs substantially complied with the FSIA’s notice requirements and Iran was given actual notice of the default. She added that plaintiffs were not required to serve any of their post-judgment motions on Iran.
Plaintiffs, however, could not prevail on their assignment motion since Iran’s rights to payment from CMA CGM was not property located in the United States, Feltcher said. Since CMA CGM is a French corporation, she concluded the debt obligation it owed to Iran was located in France, and so it was immune from execution.
The case is Peterson v. Islamic Republic of Iran, 08-17756.
Copyright 2010, Metropolitan News Company