ELECTRONIC DATA SYSTEMS, ETC. v. Social Sec.

• Decision Date: 12 February 1981
• Docket Number: Civ. A. No. 3-79-218.
• Citation: 508 F. Supp. 1350
• Parties: ELECTRONIC DATA SYSTEMS CORPORATION IRAN v. The SOCIAL SECURITY ORGANIZATION OF the GOVERNMENT OF IRAN et al.
• Court: U.S. District Court — Northern District of Texas

508 F. Supp. 1350

ELECTRONIC DATA SYSTEMS CORPORATION IRAN v. The SOCIAL SECURITY ORGANIZATION OF the GOVERNMENT OF IRAN et al.

Civ. A. No. 3-79-218.

United States District Court, N. D. Texas, Dallas Division.

February 12, 1981.

Thomas W. Luce, III, Dallas, Tex., Michael Sandler, Washington, D. C., Martha A. Mills, Chicago, Ill., for plaintiff.

D. L. Case, Dallas, Tex., Mark C. Rutzick, Federal Programs Branch, Civil Div., Dept. of Justice, Washington, D. C., for defendants.

MEMORANDUM OPINION

ROBERT W. PORTER, District Judge.

On January 23rd, 1981, Plaintiff in the above-entitled action, Electronic Data Systems Corporation Iran (hereinafter "EDS"), filed its application for a preliminary injunction in aid of judgment. EDS seeks an order of this Court restraining the Defendant Secretary of the Treasury of the United States and the United States (hereinafter "federal Defendants") from taking any action to "nullify, interfere with, or abrogate the Final Judgment, Orders, or jurisdiction of this Court herein, the attachment of property of Defendant The Government of Iran by EDS, or EDS' right to enforce its legal rights in the United States courts." The Court set the action for a hearing to take place on February 3rd, 1981. On January 30th, 1981, the Court denied the motion of the Secretary and the United States for a continuance, or in the alternative a stay. On February 3rd, 1981, the Court heard evidence and oral argument from counsel representing the federal Defendants and EDS. At the conclusion of oral argument the Court directed the federal Defendants to submit briefing on their position in opposition to EDS's application for a preliminary injunction no later than 5:00 p. m., February 6th, 1981. In addition the Court determined not to adjourn the hearing, but instead to leave the record open in the event that further evidence or oral argument was necessary. The federal Defendants have submitted the briefing ordered by the Court, and the Court is of the opinion that further evidence or oral argument is unnecessary to the disposition of EDS' application. Therefore, the Court rules as follows:

A. The Evidentiary Record and Preliminary Findings of Fact

The evidence before the Court derives from three sources. The first source is the "Stipulations of Fact for Purposes of Hearing on Application for Preliminary Injunction In Aid of Judgment (hereinafter "Stipulations of Fact"). The second source, Defendant's Exhibit Two, is a stipulation entered into between Marine Midland Bank and EDS on January 28, 1981, in Cause No. 79-1711 pending in the United States District Court for the Southern District of New York. The third source of evidence bearing on Plaintiff's application for a preliminary injunction is the affidavit of Thomas W. Luce, III, counsel for EDS (hereinafter "Luce affidavit"). None of the Defendants in this action have objected to the Luce affidavit, or any part therein. Accordingly, the Court makes the following preliminary Findings of Fact and Conclusions of Law with respect to Plaintiff's application for a preliminary injunction in aid of judgment based upon the above discussed evidentiary submissions and the arguments and pleadings of counsel for all parties. Said Findings of Fact and Conclusions of Law are made only for purposes of a determination as to Plaintiff's application for a preliminary judgment and do not represent final Findings of Fact and Conclusions of Law with respect to this proceeding.

B. Preliminary Findings of Fact

1. Defendant Donald T. Regan is the Secretary of the Treasury of the United States and is sued in his official capacity and not personally.

2. EDS filed this action, pursuant to the Foreign Sovereign Immunities Act of 1976, 28 U.S.C. §§ 1330, 1602 et seq., against Defendants The Social Security Organization of the Government of Iran, The Ministry of Health and Welfare of the Government of Iran, and The Government of Iran (hereinafter collectively referred to as the "Iranian Defendants") on February 23, 1979.

3. This action was originally scheduled by this Court for trial on August 20, 1979, but at the Iranian Defendants' insistence, the trial date was continued.

4. This action was tried to the Court without a jury from January 14, 1980, through January 28, 1980. The Iranian Defendants were represented at trial by able and competent Dallas counsel and brought witnesses from Iran to testify on their behalf.

5. On May 2, 1980, this Court entered its Findings of Fact and Conclusions of Law with respect to such action and based thereon the Court on May 9, 1980, entered its Final Judgment in favor of EDS and against the Iranian Defendants in the sum of $19,069,530.00, plus post-judgment interest and costs, and granted to EDS declaratory relief pursuant to 28 U.S.C. § 2201.

6. The Iranian Defendants' Motions for Stay of Enforcement of said Final Judgment were denied by the United States District Court for the Northern District of Texas on June 18, 1980, and by the United States Court of Appeals for the Fifth Circuit on July 7, 1980, and no supersedeas bond or stay of enforcement is in effect with respect to said Final Judgment.

7. Said Final Judgment is now effective and enforceable.

8. The Iranian Defendants have appealed from this Court's award to EDS of monetary relief to the United States Court of Appeals for the Fifth Circuit, No. 80-1641; no date for oral argument for said appeal has been set.

9. Said Final Judgment is wholly unsatisfied in a sum now exceeding $20 million.

10. On April 2, 1979, after EDS had learned of apparent attempts to conceal from it certain assets of Defendant The Government of Iran, EDS filed an action against the Iranian Defendants in the United States District Court for the Southern District of New York. EDS requested therein a prejudgment attachment of certain funds at Marine Midland Bank in New York, New York, to secure satisfaction of the judgment then being sought by EDS against said Defendants.

11. On June 13, 1979, the order of the United States District Court for the Southern District of New York was entered granting EDS' application and directing that funds being held by Marine Midland Bank be levied upon and taken into custody of the United States Marshal for the Southern District of New York.

12. Pursuant to that Order, the Marshal, on July 3, 1979, took such funds into his custody and, as required by the Order, then deposited them in a thirty-day time account at Marine Midland Bank in his own name as custodian for the Court. As of the date of this hearing, these funds remained in such account.

13. On November 14, 1979, the President of the United States in Executive Order 12170 declared a national emergency as a result, inter alia, of the seizure of the United States Embassy and American diplomatic and other personnel in Iran on November 4, 1979. Said Executive Order resulted in the blocking of certain property of The Government of Iran subject to the jurisdiction of the United States. No previous national emergency had been declared in 1978 or 1979 as a result of or in connection with any events in Iran.

14. On November 15, 1979, the Acting Assistant Attorney General of the United States transmitted a letter to the Clerk of the United States Court of Appeals for the Second Circuit. In said letter, the United States stated that Executive Order 12170, and its implementing regulations, did not affect the validity of EDS' preexisting attachment, or nullify or void the same.

15. The Order of Attachment was then on appeal to the United States Court of Appeals for the Second Circuit. That Court on November 28, 1979, remanded the matter to the United States District Court for the Southern District of New York, Electronic Data Systems Corporation Iran v. Social Security Organization of the Government of Iran, 610 F.2d 94 (2d Cir. 1979), and that Order remains in full force and effect.

16. On January 19, 1981, the United States and Iran entered into certain understandings expressed in two declarations relative to the hostages and to certain Iranian assets.

17. The text of the basic document, the Declaration of the Government of the Democratic and Popular Republic of Algeria (the "Declaration"), is set forth in Exhibit C of the Luce affidavit and Exhibit E of the Stipulations of Fact.

18. The text of a separate declaration, entitled Declaration of the Government of the Democratic and Popular Government of Algeria concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran (the "Claims Declaration") is set forth in Exhibit C of the Luce affidavit and Exhibit E of the Stipulations of Fact.

19. On January 19, 1981, Jimmy Carter, while President of the United States, signed Executive Orders 12277 through 12281 (the "Executive Orders"). Under the Declaration, the action provided for in said Executive Orders was not to take effect until certification by the Government of Algeria that the 52 United States hostages had safely departed from Iran. Said event did not occur during the Presidency of Jimmy Carter. On January 20, 1981, Ronald Reagan assumed the office of President of the United States of America, and shortly thereafter at approximately 12:35 p. m., Eastern Standard Time, American diplomatic and other personnel were released from captivity in Iran. The Executive Orders were first filed at the office of the Federal Register on January 22, 1981, and first published in the Federal Register on January 23, 1981. The Executive Orders have never been signed by Ronald Reagan, President of the United States.

20. Executive Order 12279, dated January 19, 1981, is the sole Executive Order dealing with attachments of Iranian funds held by domestic banks, and, by its terms, is effective immediately. The text of Executive Order 12279 is set forth in Exhibit E to the Luce affidavit and Exhibit F to the Stipulations of Fact.

21. On or about January...