In re Islamic Republic of Iran Terrorism Lit.

• Decision Date: 30 September 2009
• Docket Number: Civil Action No. 01-CV-2684.,Civil Action No. 06-CV-473.,Civil Action No. 06-CV-750.,Civil Action No. 06-CV-516.,Civil Action No. 07-CV-1302.,Civil Action No. 06-CV-596.,Civil Action No. 06-CV-1116.,Civil Action No. 08-CV-1615.,Civil Action No. 01-CV-2094.,Civil Action No. 08-CV-520.,Civil Action No. 08-CV-1273.,Civil Action No. 06-CV-690.,Civil Action No. 08-CV-1814.,Civil Action No. 03-CV-1486.,Civil Action No. 08 CV-1807.,Civil Action No. 03-CV-1959.,Civil Action No. 08-CV-531.,Civil Action No. 05-CV-2124.,Civil Action No. 03-CV-1708.,Civil Action No. 02-CV-1811.
• Parties: In re ISLAMIC REPUBLIC OF IRAN TERRORISM LITIGATION.
• Court: U.S. District Court — District of Columbia

659 F.Supp.2d 31

In re ISLAMIC REPUBLIC OF IRAN TERRORISM LITIGATION.

Civil Action No. 01-CV-2094.

Civil Action No. 01-CV-2684.

Civil Action No. 02-CV-1811.

Civil Action No. 03-CV-1486.

Civil Action No. 03-CV-1708.

Civil Action No. 03-CV-1959.

Civil Action No. 05-CV-2124.

Civil Action No. 06-CV-473.

Civil Action No. 06-CV-516.

Civil Action No. 06-CV-596.

Civil Action No. 06-CV-690.

Civil Action No. 06-CV-750.

Civil Action No. 06-CV-1116.

Civil Action No. 07-CV-1302.

Civil Action No. 08-CV-520.

Civil Action No. 08-CV-531.

Civil Action No. 08-CV-1273.

Civil Action No. 08-CV-1615.

Civil Action No. 08 CV-1807.

Civil Action No. 08-CV-1814.

United States District Court, District of Columbia.

September 30, 2009.

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Allen Louis Rothenberg, Philadelphia, PA, Anthony J. Laspada, Tampa, FL, David J. Cook, Cook Collection Attorneys, P.L.C., San Francisco, CA, Ferris Ridgely Bond, Bond & Norman, Robert Peter Feeney, Robert P. Feeney, Esquire, Gaithersburg, MD, Jane Carol Norman, Bond & Norman, PLLC, Kay M. Clarke, Clower & Clarke, Thomas Fortune Fay, Fay Law, PA, Washington, DC, Joseph Peter Drennan, Joseph Peter Drennan, Attorney-at-Law, Alexandria, VA, for Plaintiff.

Rupa Bhattacharyya, Eric R. Womack, Heather R. Phillips, Jacqueline E. Coleman Snead, Varudhini Chilakamarri, U.S. Department of Justice, Francis A. Vasquez, Jr., White & Case LLP, James H. Hulme, Arent Fox LLP, Griffith L. Green, Sidley Austin, LLP, Paul Joseph Lambert, Bingham McCutchen, LLP, Hwan Kim, Alan I. Raylesberg, Jay R. Henneberry, Alex Young K. Oh, Sidley Austin LLP, Bradford A. Berenson, Washington, DC, Jared R. Clark, Joshua Dorchak, Bingham McCutchen LLP, Karl H. Buch, Robert W. Littleton, New York, NY, for Interested Party.

I.

ROYCE C. LAMBERTH, Chief Judge.

TABLE OF CONTENTS

                  I. Table of Contents..................................................................................34
                 II. Introduction.......................................................................................35
                III. Discussion.........................................................................................38
                     A. Historical Overview of the FSIA State Sponsor of Terrorism Exception
                          as it Relates to Actions Against the Islamic Republic of Iran.................................40
                        1. The Original State Sponsor of Terrorism Exception to Foreign
                             Sovereign Immunity, Section 1605(a)(7) and the Flatow
                             Amendment, Section 1605 Note, and Litigation Against Iran for its
                             Provision of Material Support to Terrorist Organizations...................................41
                        2. Setbacks for Plaintiffs: The D.C. Circuit's Decision in Cicippio-Puleo..............46
                        3. The Never-Ending Struggle to Enforce Judgments Against Iran..................................49
                     B. Section 1083 of the 2008 NDAA and the Creation of a Terrorism
                          Exception, Section 1605A......................................................................58
                        1. New Federal Cause of Action..................................................................59
                        2. Punitive Damages.............................................................................61
                        3. Compensation for Special Masters.............................................................61
                

                        4. More Robust Provisions for the Execution of Civil Judgments .................................61
                     C. Retroactive Application of Section 1605A to Cases Previously Filed
                          Under Section 1605(a)(7)......................................................................62
                        1. Section 1083(c)(2)—Prior Actions.......................................................63
                        2. Section 1083(c)(3)—Related Actions.....................................................64
                        3. The 60-Day Rule—Filing Deadline for Cases Based on Prior Actions
                             Under Section 1605(a)(7)...................................................................65
                        4. Section 1083(c)(2)(B)—Defenses Waived: Res Judicata, Collateral
                             Estoppel, and Statute of Limitations Are Deemed Waived to the
                             Extent that those Defenses Relate to Claims Litigated in a Prior
                             Action Under Section 1605(a)(7)............................................................65
                     D. Efforts to Obtain Retroactive Treatment Under the New Terrorism
                          Exception, Section 1605A......................................................................65
                     E. Examination of Section 1083(c) of the 2008 NDAA Under Article III of
                          the United States Constitution................................................................68
                        1.  Principles of Law—The Independence of the Federal Judiciary
                              Under Article III and the Finality of Judgments...........................................71
                        2.  Analysis of the Constitutional Question in Light of the Supreme
                              Court's Jurisprudence.....................................................................76
                            a.  Does Section 1083(c)(3) Direct the Reopening of Final
                                  Judgments Entered Before its Enactment and Therefore
                                  Contravene Article III as Construed by the Supreme Court in
                                  Plaut?.......................................................................77
                            b. Assuming that Section 1083(c)(3) Does Not Direct the Reopening
                               of Final judgments, Does the Waiver of Res Judicata and
                               Collateral Estoppel Effect of any Prior Terrorism FSIA
                               Action Nonetheless Offend Article III because Congress has
                               Directed the Courts to Ignore Fundamental and Longstanding
                               Judicial Doctrines?......................................................................82
                        3. Additional Considerations....................................................................88
                     F. Analysis of Whether Actions Under Section 1605(a)(7) Have Qualified for
                          Retroactive Treatment Under Section 1605A.....................................................91
                        1. The Belt-and-Suspenders Plaintiffs: Those Who Have Invoked both
                             Section 1083(c)(2) and (c)(3) .............................................................92
                        2. The Related-Action Plaintiffs: Those Who Have Filed New Actions
                             Pursuant to Section 1083(c)(3).............................................................98
                        3. The Do-Nothing Plaintiffs: Those Who Have Invoked Neither
                             Section 1083(c)(2) Nor (c)(3) in Their Efforts to Retroactively
                             Claim the New Entitlements Under Section 1605A............................................100
                        4. General Guidance for All Cases..............................................................103
                     G. Service of New Claims in Pending Cases.........................................................104
                     H. Guidance for Plaintiffs Who May Wish to Pursue Relief Under Rule 60 of
                          the Federal Rules of Civil Procedure.........................................................107
                     I. Compensation for Special Masters...............................................................110
                     J. Motions for Appointment of Receivers...........................................................113
                     K. A Call for Meaningful Reform...................................................................120
                     L. An Invitation for the United States to Participate in These Actions............................137
                IV. Conclusion.........................................................................................137
                

II. INTRODUCTION

For more than a decade now, this Court has presided over what has been a twisting and turning course of litigation against the Islamic Republic of Iran under the state sponsor of terrorism exception of the Foreign Sovereign Immunities Act (FSIA). Despite the best intentions of Congress and moral statements of support from the Executive Branch, the stark reality is that the plaintiffs in these actions face continuous road blocks and setbacks in what has been an increasingly futile exercise to hold Iran accountable for unspeakable acts of terrorist violence.¹

The cases against Iran that will be addressed by the Court today involve more than one thousand individual plaintiffs. Like countless others before them, the plaintiffs in these actions have demonstrated through competent evidence—including the testimony of several prominent experts in the field of national security—that Iran has provided material support to terrorist organizations, like Hezbollah and Hamas, that have orchestrated unconscionable acts of violence that have killed or injured hundreds of Americans. As a result of these civil actions, Iran faces more than nine billion dollars in liability in the form of court judgments for money damages. Despite plaintiffs' best efforts to execute these court judgments, virtually all have gone unsatisfied.

This consolidated opinion focuses on recent legislative changes in this extraordinary area of the law, as implemented by Congress last term in § 1083 of the 2008 National Defense Appropriations Act for Fiscal Year 2008 (2008 NDAA). See Pub.L. No. 110-181, § 1083, 122 Stat. 3, 338-44. Section 1083 completely repeals the original state sponsor of terrorism exception—28 U.S.C. § 1605(a)(7)—which was originally enacted in 1996, and enacts in its place a new exception—28 U.S.C. § 1605A—that is in many ways more favorable to plaintiffs. This new statute provides, among other reforms, a new federal cause of action against state sponsors of terrorism and allows for awards of punitive damages in these cases. Even more significantly, however, the reforms implemented through § 1083 last year add a number of measures that are intended to help plaintiffs succeed in enforcing court judgments against state...