Flanagan v. Islamic Republic of Iran

• Decision Date: 03 June 2016
• Docket Number: Civil Action No.: 10-1643 (RC)
• Citation: 190 F.Supp.3d 138
• Parties: Saundra Flanagan, et al., Plaintiffs, v. Islamic Republic of Iran, et al., Defendants.
• Court: U.S. District Court — District of Columbia

190 F.Supp.3d 138

Saundra Flanagan, et al., Plaintiffs,

v.Islamic Republic of Iran, et al., Defendants.

Civil Action No.: 10-1643 (RC)

United States District Court, District of Columbia.

Signed June 03, 2016

Jennifer L. Kent, Joshua M. Ambush, Law Offices of Joshua M. Ambush, LLC, Baltimore, MD, for Plaintiffs.

Christopher M. Curran, Claire Angela Delelle, Nicole Erb, White & Case LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

RUDOLPH CONTRERAS, United States District Judge

GRANTING IN PART AND DENYING IN PART THE REPUBLIC OF SUDAN'S MOTION TO SET ASIDE THE DEFAULT JUDGMENT

I. INTRODUCTION

Plaintiffs in this case are the family members of Electronic Warfare Technician First Class Kevin Shawn Rux, who was killed along with sixteen other American sailors in the 2000 terrorist bombing of the U.S.S. Cole in Yemen, carried out by Al-Qaeda. In 2010, Plaintiffs filed a lawsuit under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. §§ 1602 et seq. , against Syria, Iran, Sudan, and several of those foreign states' agents and political subdivisions, alleging that those defendants provided material support to Al-Qaeda which caused the U.S.S. Cole bombing. Although they were served with process in January 2011, the Iranian and Sudanese defendants never appeared. The Clerk of Court entered default against those parties on October 31, 2012, and this Court held an evidentiary hearing on August 12, 2014, to determine whether Plaintiffs had "establishe[d] [their] claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). The Court concluded that the Plaintiffs had and, on March 31, 2015, issued a lengthy opinion setting forth the Court's Findings of Fact and Conclusions of Law. See generally Flanagan v. Islamic Republic of Iran , 87 F.Supp.3d 93 (D.D.C.2015). The Court awarded Plaintiffs $18,750,000.00 in compensatory damages and $56,250,000.00 in punitive damages.

Two months later—and over four years after Sudan had been served with process—Sudan finally entered an appearance and filed a motion to set aside the default judgment. See Sudan's Mot. to Set Aside Default J., ECF No. 55 [hereinafter "Sudan's Mot."]. Sudan now raises several belated defenses which, it claims, establishes "good cause" under Federal Rule of Civil Procedure 55(c) to set aside the default judgment. Several of these arguments were recently considered by another judge in this district in seven related cases in which Sudan sought to set aside default judgments arising out of the 1998 bombings of the United States embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. See Owens v. Republic of Sudan , 174 F.Supp.3d 242, No. 01–2244, 2016 WL 1170919 (D.D.C. Mar. 23, 2016), appeal docketed , No. 16–7048 (D.C.Cir. Apr. 22, 2016). In many respects the Court finds the opinion in Owens instructive, and will rely on that decision's analysis where persuasive and relevant. As explained below, the Court will grant in part and deny in part Sudan's motion, and will vacate the portion of the default judgment awarding punitive damages, without definitively determining, at this stage, whether punitive damages are available to Plaintiffs in this case.

II. FACTUAL BACKGROUND

The Court made substantial Findings of Fact and Conclusions of Law when entering a default judgment against Iran and Sudan. See generally Flanagan , 87 F.Supp.3d at 93–127. The Court assumes familiarity with its prior opinion and revisits only those facts and statutory provisions particularly relevant for present purposes.

A. Statutory Background

The FSIA "provides the sole basis for obtaining jurisdiction over a foreign state in the courts of this country." OBB Personenverkehr AG v. Sachs , ––– U.S. ––––, 136 S.Ct. 390, 393, 193 L.Ed.2d 269 (2015) (quoting Argentine Republic v. Amerada Hess Shipping Corp. , 488 U.S. 428, 443, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989) ). The FSIA starts with a general presumption of immunity for foreign states. See, e.g. , Saudi Arabia v. Nelson , 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993) ; TMR Energy Ltd. v. State Prop. Fund of Ukr. , 411 F.3d 296, 299 (D.C.Cir.2005). That presumption of immunity controls unless one of several statutorily prescribed exceptions applies. See 28 U.S.C. § 1604 ("[A] foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of [Title 28]."). Federal district courts' jurisdiction over FSIA claims are similarly tied to the question of immunity: 28 U.S.C. § 1330(a) provides that district courts "shall have original jurisdiction ... of any nonjury civil action against a foreign state" only insofar as the plaintiff asserts a claim for relief "with respect to which the foreign state is not entitled to immunity either under sections 1605–1607 of [Title 28] or under any applicable international agreement." 28 U.S.C. § 1330(a). As a result, this Court's "[s]ubject matter jurisdiction is ... intertwined with immunity," Owens , 174 F.Supp.3d at 249, 2016 WL 1170919, at *2, because "subject matter jurisdiction in any such action depends on the existence of one of the specified exceptions to foreign sovereign immunity," Verlinden B.V. v. Cent. Bank of Nigeria , 461 U.S. 480, 493, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983).

One of those exceptions, first enacted by Congress in 1996, is referred to as the "terrorism exception" to foreign sovereign immunity. See Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No. 104–132, § 221, 110 Stat. 1214, 1241–43. Although that exception was previously codified as one of the many exceptions to foreign sovereign immunity listed in 28 U.S.C. § 1605(a), see 28 U.S.C. § 1605(a)(7) (2006 ed.), in 2008 Congress amended the terrorism-related provisions as part of the National Defense Authorization Act,¹ see National Defense Authorization Act of 2008, Pub. L. No. 110–181, § 1083, 122 Stat. 3, 338–44. The immunity exception was recodified in section 1605A, which is entitled "Terrorism exception to the jurisdictional immunity of a foreign state." See 28 U.S.C. § 1605A. The exception is substantially similar to the prior version, and states that:

A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case not otherwise covered by this chapter in which money damages are 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 or provision of material support or resources is engaged in by an official, employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency.

Id. § 1605A(a)(1). A claim may only be heard under section 1605A, however, if, among other requirements, the foreign state was "designated as a state sponsor of terrorism at the time the act described in paragraph (1) occurred, or was so designated as a result of such act." Id. § 1605A(a)(2)(A)(i)(I).

Subsection (c) also created a federal private right of action against "[a] foreign state that is or was a state sponsor of terrorism" or "any official, employee, or agent of that foreign state" while acting in an official capacity. Id. § 1605A(c). Those foreign states or individuals may be liable to "a national of the United States," or her "legal representative" (among other classes of individuals) "for personal injury or death caused by acts described in subsection (a)(1) [the immunity provision] ..., for which the courts of the United States may maintain jurisdiction under this section for money damages." Id. A plaintiff suing under that provision may recover "economic damages, solatium, pain and suffering, and punitive damages." Id.

B. Factual & Procedural Background

In September 2010, Plaintiffs filed this lawsuit, invoking section 1605A(c)'s cause of action. See generally Compl., ECF No. 3. The plaintiffs are Kevin Rux's mother ("Doe Victim A") and his four brothers ("Doe Victim B," "Doe Victim C," "Doe Victim D," and "Doe Victim E"). See First Am. Compl. ¶¶ 4–8, ECF No. 18. Plaintiffs alleged that each of the Defendants, including Sudan and its agencies and instrumentalities,² provided material support to Al-Qaeda, "including but not limited to providing, financing, lodging, training, and safehouses" as a result of which Al-Qaeda "was able to plan and execute its attack against the U.S.S. Cole." Id. ¶¶ 79, 136. Plaintiffs sued the foreign states of Iran, Sudan, and Syria, as well as several agents and instrumentalities of each state, see id. ¶¶ 9–15, and sought to recover under section 1605A for intentional infliction of emotional distress and loss of solatium, id. ¶¶ 134–44.

The Clerk entered defaults against the Iranian and Sudanese defendants on October 31, 2012. See Clerk's Entry of Default, ECF No. 26; Clerk's Entry of Default, ECF No. 27. At that time—and to date—Plaintiffs claim that they have been unable to effectuate service of process against the Syrian defendants, and therefore elected to proceed only against the Iranian and Sudanese defendants. See Pls.' Status Report, ECF No. 28; see also Pls.' Status Report on the Syrian Defs., ECF No. 51. The FSIA prohibits an entry of a default judgment "unless the claimant establishes his claim or right to relief by evidence satisfactory to the court." 28 U.S.C. § 1608(e). Consequently, the Court held an evidentiary hearing regarding liability and damages on August 12, 2014, and accepted evidence in the form of live testimony, affidavits, and documentary evidence.³ The Court also took judicial notice of the evidence presented in another case arising out of the U.S.S. Cole bombing, Rux v. Republic of Sudan , 495 F.Supp.2d 541 (E.D.Va.2007). See Tr. of Evidentiary Hr'g at 11, ECF No. 40 [hereinafter "Hr'g Tr."]. Specific to the Sudanese defendants, the Court accepted expert testimony in the...