Leibovitch v. Iran

• Decision Date: 25 September 2012
• Docket Number: No. 11–1564.,11–1564.
• Citation: 697 F.3d 561
• Parties: Shlomo LEIBOVITCH, et al., Plaintiffs–Appellants, v. ISLAMIC REPUBLIC OF IRAN, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

697 F.3d 561

Shlomo LEIBOVITCH, et al., Plaintiffs–Appellants,

v.ISLAMIC REPUBLIC OF IRAN, et al., Defendants–Appellees.

No. 11–1564.

United States Court of Appeals,Seventh Circuit.

Submitted Sept. 12, 2011.

Decided Sept. 25, 2012.

David J. Strachman (submitted), Attorney, McIntyre, Tate, Lynch & Holt, Providence, RI, for Plaintiffs–Appellants.

Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge.

The Leibovitch family was attacked by terrorists while driving along a highway in Israel. One child, an Israeli national, died in the attack while a second child, a United States citizen, was seriously injured. The family brought suit in federal district court against the Islamic Republic of Iran and the Iranian Ministry of Information and Security under the terrorism exception of the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605A, for providing material support and resources to the organization that carried out the attacks. The district court adjudicated the claim for injuries sustained by the United States citizen child. But the trial court found no jurisdiction over intentional infliction of emotional distress claims brought by her other family members on the grounds that they are not United States citizens. Because we conclude that the Foreign Sovereign Immunities Act confers subject-matter jurisdiction over the emotional distress claims brought by the Leibovitchs under Israeli law, we reverse and remand.

I. BACKGROUND

On June 17, 2003, several members of the Leibovitch family were traveling along the Trans–Israel highway near the town of Kalkilya through an area bordering the West Bank. Agents of the Palestine Islamic Jihad (“PIJ”) crossed from the West Bank into Israel and fired upon the Leibovitchs' minivan using pistols and a Kalishnikov rifle. The Leibovitchs' seven-year-old child, N.L., an Israeli national, was killed by the gunshots. Her three-year-old sister, S.L., an American citizen, survived but was severely injured by bullets that shattered bones in her right wrist and pierced her torso. Two of the girls' grandparents and two siblings were also in the van during the attack. They survived but witnessed N.L.'s horrifying death as well as the grave injuries inflicted upon S.L.

On April 3, 2008, the Leibovitchs brought suit against the Islamic Republic of Iran and its Ministry of Information and Security (collectively “Iran”). The complaint sought damages on behalf of each family member in the van as well as N.L. and S.L.'s parents, none of whom were United States citizens.

The trial court entered a default order against Iran after the defendants received service of process via diplomatic channels but failed to respond or enter an appearance. After reviewing expert testimony and documentary evidence from the plaintiffs, the district court determined that S.L. was injured in “an act of ... extrajudicial killing” under the FSIA exception for terrorism, § 1605A(a)(1). The district court further found that Iran was vicariously liable for the PIJ's terrorist attack because Iran had openly provided material support and resources for the PIJ's campaign of extrajudicial killings. Finally, the district court calculated $17.5 million in compensatory damages for S.L.'s post-traumatic stress, loss of solatium from her sister's death, and permanent disability and disfigurement resulting from the attack. An additional $35 million was awarded to S.L. in punitive damages.

However, the district court dismissed all claims raised by the other members of the Leibovitch family for lack of subject-matter jurisdiction. After a motion for reconsideration, the trial court still concluded that it did not have subject-matter jurisdiction and further suggested that even if it did, the court was not persuaded that Israeli law would permit the plaintiffs to recover for intentional infliction of emotional distress. The Leibovitchs appeal. Though they concede that the district court was correct to find no jurisdiction over certain counts in the complaint, the family contends that there is subject-matter jurisdiction over claims brought by family members under Israeli law for intentional infliction of emotional distress arising from S.L.'s injury. Iran has not made an appearance or filed any briefs in this case.

II. ANALYSIS

This action is brought against Iran pursuant to the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1605A (2008). The FSIA provides the sole basis for asserting jurisdiction over foreign nations in United States courts. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989). Foreign states enjoy immunity under the FSIA in all cases that do not fall into one of the statute's specifically enumerated exceptions. Id. at 439, 109 S.Ct. 683;Enahoro v. Abubakar, 408 F.3d 877, 881 (7th Cir.2005).

A. Historical Background of FSIA State–Sponsored Terrorism Exception

The exception to foreign sovereign immunity presented in this case has a convoluted history. Congress and the federal courts have engaged in an extended dialogue over the scope and appropriate interpretation of this statutory provision. Most relevant to our analysis of subject-matter jurisdiction are: 1) the initial version of the terrorism exception adopted in 1996, 2) the Flatow Amendment passed later in 1996, 3) the D.C. Circuit's decision in Cicippio–Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (2004), and 4) Congress's 2008 abrogation of Cicippio–Puleo and enactment of a revised, reconsolidated terrorism exception codified in § 1605A.

1. Original Terrorism Exception

Congress amended the FSIA as part of the Antiterrorism and Effective Death Penalty Act of 1996 (“AEDPA”) to add a new exception for state sponsorship of certain acts of terrorism. Pub.L. No. 104–132, § 221(a), 110 Stat. 1214 (formerly codified at 28 U.S.C. § 1605(a)(7) (repealed 2008)). This exception eliminated sovereign immunity and permitted suit directly against a foreign state “for 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....” § 1605(a)(7). One of the explicit purposes of AEDPA was to “deter terrorism” directed at United States citizens and supported by foreign sovereigns as well as to “provide justice” for victims of terrorist acts. 110 Stat. at 1214; see also Republic of Iraq v. Beaty, 556 U.S. 848, 859, 129 S.Ct. 2183, 173 L.Ed.2d 1193 (2009) (Section 1605(a)(7) “was intended as a sanction, to punish and deter undesirable conduct.”)

For the terrorism exception to be invoked, a nexus to the death or injury of a United States citizen was required. Sovereign immunity would still apply and bar suits against a foreign state if “neither the claimant nor the victim was a national of the United States.” § 1605(a)(7)(B)(ii).

The 1996 version of the terrorism exception codified in § 1605(a)(7) has been understood as a jurisdiction-conferring amendment, consistent with the overarching framework of the FSIA. But the language of § 1605(a)(7) left unresolved whether Congress intended to create a federal private right of action under the newly enacted exception. See Price v. Socialist People's Libyan Arab Jamahiriya, 294 F.3d 82, 87 (D.C.Cir.2002) (“The FSIA is undoubtedly a jurisdictional statute which, in specified cases, eliminates foreign sovereign immunity.... There is a question, however, whether the FSIA creates a federal cause of action ... against foreign states.” (citations omitted)).

An underlying presumption of the FSIA is that an exception to sovereign immunity does not create a private right of action against a defendant whose conduct falls within a delineated exception. Section 1606 of the FSIA provides: “As to any claim for relief with respect to which a foreign state is not entitled to immunity ..., the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances.” The Supreme Court has interpreted § 1606 to mean that the FSIA does not, as a general matter, provide a substantive source of liability against a foreign state. See First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 620, 103 S.Ct. 2591, 77 L.Ed.2d 46 (1983) (“The language and history of the FSIA clearly establish that the Act was not intended to affect the substantive law determining the liability of a foreign state or instrumentality, or the attribution of liability among instrumentalities of a foreign state.”). In the absence of a substantive source of law from the statute, plaintiffs have typically been required to bring suit using causes of action based on underlying state or foreign law when an exception to sovereign immunity applies. Id. at 621–23, 103 S.Ct. 2591

An FSIA plaintiff's reliance on a cause of action found in state tort law has been referred to as the “pass-through” approach. See Pescatore v. Pan Am. World Airways, Inc., 97 F.3d 1, 12 (2d Cir.1996) (“the FSIA ... operates as a ‘pass-through’ to state law principles.” (quoting Zicherman v. Korean Air Lines Co., 516 U.S. 217, 229, 116 S.Ct. 629, 133 L.Ed.2d 596 (1996))). Choice of law rules typically determine the source of law for the appropriate action, often based upon the plaintiff's domicile or the location of the injury. See id.

2. The Flatow Amendment Ensured Punitive Damages Against Officials and Agents of State–Sponsored Terrorism.

Though § 1605(a)(7) established a jurisdictional framework for claims arising from terrorist acts, Congress began to turn its attention to the practical needs of plaintiffs pursuing suits under this section. Five months after AEDPA's enactment, Congressman Jim Saxton sponsored an amendment to § 1605(a)(7) creating a federal cause of action for plaintiffs against agents and officers of states that sponsor terrorism. The new provision was...