Cohen v. The Palestinian Auth.

• Decision Date: 12 May 2010
• Docket Number: No. CA 00-105L.,CA 00-105L.
• Citation: 715 F.Supp.2d 253
• Parties: The ESTATES OF Yaron UNGAR and Efrat Ungar by and through the Administrator of their estates David STRACHMAN, Dvir Ungar, minor, by his guardians and next friend, Yishai Ungar, minor, by his guardians and next friend, Professor Meyer Ungar, Judith Ungar, Rabbi Uri Dasberg, Judith Dasberg (individually and in their capacity as legal guardians of plaintiffs Dvir Ungar and Yishai Ungar); Amichai Ungar, Dafna Ungar and Michal Cohen, Plaintiffs, v. The PALESTINIAN AUTHORITY (a.k.a. “The Palestinian Interim Self-Government Authority”), The Palestine Liberation Organization, Yasser Arafat, Jibril Rajoub, Muhammed Dahlan, Amin Al-Hindi, Tawfik Tirawi, Razi Jabali, Hamas-Islamic Resistance Movement (a.k.a. “Harakat Al-Muqawama Al-Islamiyya”), Abdel Rahman Ismail Abdel Rahman Ghanimat, Jamal Abdel Fatah Tzabich Al Hor, Raed Fakhri Abu Hamdiya, Ibrahim Ghanimat, and Iman Mahmud Hassan Fuad Kafishe, Defendants.
• Court: U.S. District Court — District of Rhode Island

715 F.Supp.2d 253

The ESTATES OF Yaron UNGAR and Efrat Ungar by and through the Administrator of their estates David STRACHMAN, Dvir Ungar, minor, by his guardians and next friend, Yishai Ungar, minor, by his guardians and next friend, Professor Meyer Ungar, Judith Ungar, Rabbi Uri Dasberg, Judith Dasberg (individually and in their capacity as legal guardians of plaintiffs Dvir Ungar and Yishai Ungar); Amichai Ungar, Dafna Ungar and Michal Cohen, Plaintiffs,

v.The PALESTINIAN AUTHORITY (a.k.a. “The Palestinian Interim Self-Government Authority”), The Palestine Liberation Organization, Yasser Arafat, Jibril Rajoub, Muhammed Dahlan, Amin Al-Hindi, Tawfik Tirawi, Razi Jabali, Hamas-Islamic Resistance Movement (a.k.a. “Harakat Al-Muqawama Al-Islamiyya”), Abdel Rahman Ismail Abdel Rahman Ghanimat, Jamal Abdel Fatah Tzabich Al Hor, Raed Fakhri Abu Hamdiya, Ibrahim Ghanimat, and Iman Mahmud Hassan Fuad Kafishe, Defendants.

No. CA 00-105L.

United States District Court,D. Rhode Island.

May 12, 2010.

David J. Strachman, McIntyre Tate & Lynch LLP, Providence, RI, for Plaintiffs.

Deming E. Sherman, Edwards Angell Palmer & Dodge LLP, Providence, RI, Mark J. Rochon, Richard A. Hibey, Brian A. Hill, Miller & Chevalier Chartered, Washington, DC, for Defendants.

MEMORANDUM AND ORDER GRANTING MOTION FOR A PAYMENT DECREE

DAVID L. MARTIN, United States Magistrate Judge.

Before the Court is Plaintiffs-Judgment Creditors' Motion for a Payment Decree (Doc. # 467) (“Motion for Payment Decree” or “Motion”).

I. Background ¹

Plaintiffs-judgment creditors (“Plaintiffs” or “the Ungars”) are the orphaned children, parents, siblings, and administrator of the estate of Yaron Ungar, a United States citizen who was murdered with his pregnant wife, Efrat Ungar, in a terrorist machine-gun attack on June 9, 1996, in Israel. In March 2000, the Ungars filed the above captioned action pursuant to 18 U.S.C. § 2333 ² against numerous defendants, including the Palestinian Authority (“PA”) and the Palestine Liberation Organization (“PLO”) (collectively “Defendants”). ³

On June 13, 2004, the Court entered a default judgment in this matter against the PA and the PLO. See Docket; see also Estates of Ungar v. Palestinian Auth., 325 F.Supp.2d 15, 28 (D.R.I.2004) (“ Ungar II ”) (adopting report and recommendation and ordering clerk to enter final judgment). The amount of the judgment exceeds $116,000,000.00. ⁴ See id. Defendants appealed to the First Circuit, but their appeal was rejected. See Ungar v. Palestine Liberation Org., 402 F.3d 274, 294 (1st Cir.2005) (“ Ungar III ”).

On December 28, 2007, Defendants, represented by new counsel, moved under Fed.R.Civ.P. 60(b)(6) to vacate the default judgment. See Docket; see also Defendants' Motion for Relief from Default Judgment (Doc. # 408). Senior Judge Ronald R. Lagueux denied the motion to vacate on May 13, 2009, finding that Defendants' willful default precluded relief under Rule 60(b)(6) as a matter of law. See Estates of Ungar v. Palestinian Auth., 613 F.Supp.2d 219, 231 (D.R.I.2009) (“ Ungar IV ”) (noting “Defendants' litigation strategy ... not to file an answer or defend this case on the merits ...” flowed from “the intentional, deliberate and binding decisions made by the PA's dictatorial leader”); see also Ungar v. Palestine Liberation Org., 599 F.3d 79, 84 (1st Cir.2010) (“ Ungar V ”) (“The decision, read as a whole, leaves no doubt ... that the court denied the Rule 60(b)(6) motion on the basis that the defendants' willful default precluded relief as a matter of law.”)(citing Ungar IV, 613 F.Supp.2d at 231).

Defendants appealed the denial to the First Circuit. On March 25, 2010, the Court of Appeals vacated Judge Lagueux's order and remanded the case with directions to consider multiple factors, including “the timing of the request for relief, the extent of any prejudice to the opposing party, the existence or non-existence of meritorious claims of defense, and the presence or absence of exceptional circumstances,” Ungar V, 599 F.3d at 83, in deciding the Rule 60(b)(6) motion, id. at 86-87 (describing Defendants' arguments as “substantial” and “deserv[ing] full-throated consideration”). ⁵

In the meantime, Plaintiffs filed the instant Motion on December 9, 2009. See Docket. The Court conducted a hearing on January 13, 2010, and, thereafter, took the matter under advisement.

II. Relief Sought

To understand the relief which Plaintiffs seek by the Motion, some additional facts are necessary. On August 31, 2008, the Jerusalem District Court issued a decision finding that the July 13, 2004, judgment entered by this Court against the PA and the PLO is enforceable in Israel. See Memorandum in Support of Plaintiffs-Judgment Creditors' Motion for a Payment Decree (“Plaintiffs' Mem.”), Ex. A (Declaration of Robert J. Tolchin (“Tolchin Decl.”)) ¶ 2; see also id., Attachment (“Att.”) 1 (Decision of Jerusalem District Court (“Decision”)) ¶ 1 (referencing August 31, 2008, decision of Jerusalem District Court that the judgment is enforceable in Israel). Following that decision, the Ungars moved the Jerusalem court for a post-judgment attachment on tax payments transferred each month by the Israeli government to the PA. Plaintiffs' Mem. at 3 (citing Tolchin Decl. ¶ 3). The Ungars requested a post-judgment attachment in the full amount of their domesticated judgment, to accumulate in monthly installments in the amount of 18 million NIS (in current terms equal to about $4.74 million) per month. ⁶ Id. The Jerusalem District Court granted the Ungars' motion for a post-judgment attachment on September 7, 2008. Id. The PA and PLO moved for a stay of execution pending appeal of the August 31, 2008, decision of the Jerusalem District Court to the Israeli Supreme Court. Id. at 4; see also Tolchin Decl. ¶ 5.

On October 29, 2008, the Jerusalem District Court issued a decision granting the motion for a stay pending appeal on the condition that the monthly post-judgment attachment on the tax transfers in the amount of 18 million NIS remain in force, such that the funds accumulated during the pendency of the appeal (i.e., 18 million NIS per month, up to the full amount of the judgment) would be held by the Israeli Treasury until Defendants' appeal is decided. Plaintiffs' Mem. at 4; see also Tolchin Decl. ¶¶ 6-7. Plaintiffs note that the PA and PLO explained the effect of this decision in a declaration which they submitted in Knox v. The Palestine Liberation Org., Civil Action No. 03 Civ. 4466(VM)(THK) (S.D.N.Y.):

Beginning with the transfers for September 2008, the State of Israel began withholding ... NIS 18 million per month from the tax transfers pending the Israel Supreme Court decision on whether a U.S. judgment in the Ungar litigation is enforceable in Israel. NIS 18 million (or .5 million) will be withheld until the full 6 million is attached or until the Supreme Court rules favorably for the PNA.

Plaintiffs' Mem. at 4 (quoting Ex. B (Declaration of Hatem Yousef (“Yousef Decl.”)) ¶ 10) (bold omitted).

Thus, Plaintiffs represent that pursuant to the Israeli attachment between September 7, 2008, and December 9, 2009, attached PA funds amounting to 270 million NIS (18 million NIS x 15 months) accumulated at the Israeli Treasury. See Plaintiffs' Mem. at 4. Separately, earlier in the Israeli proceeding, the Jerusalem court ordered an attachment on tax transfers to the PA in the amount of 100 million NIS. Id. (citing Tolchin Decl. ¶ 9). Since an additional 18 million NIS (about $4.74 million) is being attached and added to this sum every month, see id., the total amount of the attached PA funds is now approximately $116, 000, 000. ⁷

Nevertheless, according to Plaintiffs, it is impossible to know whether, and if so when, the Ungars will ultimately receive these attached PA funds via their Israeli enforcement proceedings. See id. at 5. They note that the Israeli Supreme Court, unlike the U.S. Supreme Court, does not sit in terms, and a decision in a civil appeal can take anywhere from several months to several years. See id.

Plaintiffs state that if the Israeli Supreme Court ultimately reverses the Jerusalem District Court decision finding the Ungars's judgment enforceable in Israel, the attachment will be vacated and the funds released to the PA. See id. Even if the Israeli Supreme Court denies the appeal, Plaintiffs represent that they cannot execute against these funds without further proceedings. See id. Specifically, Plaintiffs avow that the Ungars will have to bring a motion to “confirm” the attachment in the Jerusalem District Court, which they predict the PA will certainly seek to contest, and even if the Ungars prevail on that motion the PA can appeal any decision confirming the attachment to the Israeli Supreme Court. See id.

Plaintiffs, however, posit that the existence of this pool of attached PA funds provides a simple solution enabling the immediate and full satisfaction of the Ungars' judgment. See id. According to Plaintiffs, because the funds were attached at the request of the Ungars, the Ungars can lift the attachment and thereby release the funds to the PA at any time. See id. Therefore, Plaintiffs seek an order which: a) directs Defendants to pay the Ungars the sum of $20 million by a specified date ⁸ and directs the Ungars to release $20 million of the funds attached in Israel within three days after receipt of this payment; b) directs Defendants to pay the Ungars another $20 million within three days after receiving from the Israeli Treasury the $20 million released by the Ungars and directing the Ungars to release an additional $20 million of the funds attached in Israel within three days after receipt of this payment; and c) directs the parties to continue making payments and releases in this manner until the entire judgment has been satisfied. See Reply Memorandum in Further Support of Plaintiffs-Judgment Creditors' Motion for a Payment Decree (“Reply Mem.”) at 16.

III. ...