Aviation & Gen. Ins. Co., Ltd. v. United States

• Citation: 882 F.3d 1088
• Decision Date: 12 February 2018
• Docket Number: 2016-2389,2016-2402
• Parties: AVIATION & GENERAL INSURANCE COMPANY, LTD., New York Marine and General Insurance Company, Certain Underwriters at Lloyds London, Aureus Asset Managers, Ltd., Riverstone Insurance (Uk), Ltd., Plaintiffs–Appellants v. UNITED STATES, Defendant–Appellee
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

882 F.3d 1088

AVIATION & GENERAL INSURANCE COMPANY, LTD., New York Marine and General Insurance Company, Certain Underwriters at Lloyds London, Aureus Asset Managers, Ltd., Riverstone Insurance (Uk), Ltd., Plaintiffs–Appellants

v.UNITED STATES, Defendant–Appellee

2016-2389

2016-2402

United States Court of Appeals, Federal Circuit.

Decided: February 12, 2018

Steven Robert Perles, Perles Law Firm, PC, Washington, DC, argued for plaintiffs-appellants. Also represented by Edward Brian Macallister, Joshua Perles.

Loren Misha Preheim, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by Reginald T. Blades, Jr., Robert E. Kirschman, Jr., Benjamin C. Mizer.

Before Moore, Reyna, and Stoll, Circuit Judges.

Opinion concurring in part, dissenting in part filed by Circuit Judge REYNA .

Stoll, Circuit Judge.

Appellants are insurance and asset management entities that paid property damage and personal injury claims arising from two terrorist events sponsored by Libya in the 1980s. Following the suspension of Libya's sovereign immunity pursuant to the passage of the State Sponsors of Terrorism Exception to the Foreign Sovereign Immunities Act in 1996 and the National Defense Authorization Act in 2008, Appellants filed lawsuits against Libya in federal court, asserting their subrogation rights for claims paid as a result of the attacks. Those lawsuits were ultimately terminated following Congress's passage of the Libyan Claims Resolution Act in 2008, which restored Libya's sovereign immunity and implemented a Claims Settlement Agreement between the United States and Libya. Subsequently, President George W. Bush signed Executive Order No. 13,477, which provided that any pending suit in any U.S. court filed by United States or foreign nationals relating to Libyan-sponsored terrorism shall be terminated.

In this takings case, we must decide whether the Government's termination of Appellants' lawsuits pursuant to the Claims Settlement Agreement between the United States and Libya and its subsequent legislation and executive order constituted a compensable taking under the Fifth Amendment. For the reasons below, we hold that it does not and affirm the Court of Federal Claims.

BACKGROUND

On November 23, 1985, EgyptAir Flight 648 was scheduled to travel from Athens, Greece to Cairo, Egypt before it was hijacked by terrorists of the Abu Nidal Organization ("ANO"). The hijacking and its aftermath resulted in the killing of passengers and the destruction of the aircraft hull. The United States Department of State determined that ANO received considerable support from the Libyan government, which provided safe haven, training, logistical assistance, and monetary support.

In a related event, on December 21, 1988, an agent of the Libyan Intelligence Service detonated explosives concealed in the luggage compartment of Pan Am Flight 103 as it crossed Scotland. The bombing killed all 243 passengers, including Americans, 16 crewmembers, and 11 bystanders, and destroyed the aircraft. The terrorist was acting as an agent of the Libyan government, which materially supported the attack by providing intelligence agents and equipping the terrorist with explosives and the equipment needed to detonate them.

At the time of the attacks, Libya enjoyed sovereign immunity pursuant to the Foreign Sovereign Immunities Act of 1976 ("FSIA"). See 28 U.S.C. § 1604. As a result of Libya's immunity from suit, victims were unable to pursue claims directly against Libya in United States courts. Appellants paid approximately $42 million in insurance claims resulting from the destruction of EgyptAir Flight 648 and approximately $55 million under their respective insurance contracts to the estates and families of Americans and foreign nationals killed in the Pan Am Flight 103 bombing.

In 1996, however, Congress enacted the State Sponsors of Terrorism Exception to FSIA ("Terrorism Exception"), 28 U.S.C. § 1605(a)(7) (1996), repealed by Pub. L. 110-181, Div. A, § 1083(b)(1)(A)(iii), Jan. 28, 2008, 122 Stat. 341. The Terrorism Exception stripped sovereign immunity for "money damages ... sought 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 if such act ... is engaged in by an official, employee, or agent of such foreign state ...." Id. Because the Department of State had previously designated Libya a state sponsor of terrorism as of December 29, 1979, Libya became susceptible to suit for wrongful death and personal injuries as a result of its sponsored terrorist activities, including the EgyptAir Flight 648 and Pan Am Flight 103 attacks.

Following passage of the Terrorism Exception, Appellants filed suits in the United States District Court for the District of Columbia, asserting their insurance subrogation rights and seeking, inter alia, damages for the personal injury and wrongful death claims they paid under their contracts and insurance policies as a result of the EgyptAir Flight 648 and Pan Am Flight 103 attacks. See Hartford Fire Ins. Co. v. Socialist People's Libyan Arab Jamahiriya , No. 1:98-CV-03096 (D.D.C. filed Dec. 18, 1998) ("Pan Am "); Certain Underwriters at Lloyds London v. Socialist People's Libyan Arab Jamahiriya , No. 1:06-cv-00731 (D.D.C. filed Apr. 21, 2006) ("EgyptAir "). On January 28, 2008, President Bush signed the National Defense Authorization Act of 2008, Pub. L. No. 110-181, § 1083, which replaced Section 28 U.S.C. § 1605(a)(7) (the Terrorism Exception) with 28 U.S.C. § 1605A. This Section additionally allowed claims for property damage resulting from terrorism to be brought against a state sponsor of terrorism. As a result, Appellants amended their complaints, additionally asserting property damage claims against Libya pursuant to § 1605A.

While Appellants' claims were pending, however, President Bush negotiated a settlement with Libya whereby the United States agreed to terminate all pending lawsuits against Libya. In exchange, Libya paid the U.S. Government $1.5 billion to ensure payment to victims with claims against Libya. Pursuant to the settlement, Congress passed the Libyan Claims Resolution Act ("LCRA"). See Pub. L. No. 110-301, 122 Stat. 2999 (2008). Sections 5(a)(1)(A) and (B) of the LCRA provide that Libya "shall not be subject to the exceptions to immunity from jurisdiction" under the Terrorism Exception under FSIA and that any "private right of action relating to acts by a state sponsor of terrorism arising under Federal, State, or foreign law shall not apply with respect to claims against Libya ... in any action in a Federal or State court."

Subsequently, President Bush signed Executive Order No. 13,477, providing further that "[a]ny pending suit in any court, domestic or foreign, by United States nationals ... coming within the terms of Article I [of the Libya Claims Settlement Agreement] shall be terminated" and also that "[a]ny pending suit in any court in the United States by foreign nationals ... coming within the terms of Article I [of the Libya Claims Settlement Agreement] shall be terminated." Executive Order No. 13,477, 73 Fed. Reg. 65,965 (Oct. 31, 2008). Pursuant to the Executive Order, the State Department referred certain U.S. nationals' claims against Libya to the Foreign Claims Settlement Commission ("Commission") that was funded by the $1.5 billion payment from Libya. The Executive Order did not direct the State Department to refer claims by foreign companies to the Commission; rather, it provided that with respect to suits by foreign nationals "[n]either the dismissal of the lawsuit, nor anything in this order, shall affect the ability of any foreign national to pursue other available remedies for claims ... in foreign courts or through the efforts of foreign governments." Id.

Citing the LCRA and the President's Executive Order, the Government moved to dismiss Appellants' claims for lack of subject matter jurisdiction. The district court dismissed Appellants' claims, holding that "[b]ecause the LCRA, Settlement Agreement, and Executive Order specifically and comprehensively withdraw any exception to sovereign immunity that may be provided in the FSIA with regard to [Libya's] pre-2006 support of terrorist acts, this Court lacks subject matter jurisdiction over the Libyan Defendants." Certain Underwriters at Lloyds London v. Great Socialist People's Libyan Arab Jamahiriya , 677 F.Supp.2d 270, 275 (D.D.C. 2010).

Thereafter, some of the Appellants in this case submitted claims with the Commission for damages resulting from the Pan Am attack, but each claim was denied because of the Commission's "continuous nationality" jurisdictional rule requiring that claimants be U.S. nationals from the date of injury to the date of the espousal of their claims by the United States. Because of this rule, Appellants Certain Underwriters, Aviation & General, Aureus, and Riverstone did not submit claims for losses accruing from the EgyptAir Flight 648 attack because they and their insured are foreign nationals. Although Appellant New York Marine, a U.S. national, submitted a claim, the Commission concluded that it lacked jurisdiction because its insured, EgyptAir, was a foreign national. The Commission also denied claims alleging jurisdiction based on the subrogation interest of Pan Am, a U.S. corporation, because despite Pan Am's nationality, the claim belonged to a foreign national at the time it accrued.

Appellants then filed complaints in the Court of Federal Claims, alleging that the Government took their property without just compensation in violation of the Fifth Amendment. Specifically, Appellants alleged that "the United States took the property of [Appellants] in the form of their legally cognizable Foreign Sovereign Immunities Act claims against [Libya]" for its role in...