Peterson v. Islamic Republic Of Iran, No. 08-17756

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtB. FLETCHER
Citation627 F.3d 1117
Docket NumberNo. 08-17756
Decision Date03 December 2010
PartiesDeborah D. PETERSON, Plaintiff-Appellant, v. ISLAMIC REPUBLIC OF IRAN, Defendant, v. World Bank, Movant, v. CMA CGM, Third-party-defendant-Appellee, and Japan Bank for International Cooperation; A.P. Moller-Maersk A/S; Mediterranean Shipping Company, Third-party-defendants.
627 F.3d 1117

Deborah D. PETERSON, Plaintiff-Appellant,
v.
ISLAMIC REPUBLIC OF IRAN, Defendant,
v.
World Bank, Movant,
v.
CMA CGM, Third-party-defendant-Appellee,
and
Japan Bank for International Cooperation; A.P. Moller-Maersk A/S; Mediterranean Shipping Company, Third-party-defendants.


No. 08-17756.

United States Court of Appeals,
Ninth Circuit.


Argued and Submitted Dec. 10, 2009.
Filed Dec. 3, 2010.

627 F.3d 1121

David J. Cook, Robert J. Perkiss, and Nathaniel L. Dunn, San Francisco, CA, for the plaintiff-appellant.

Peter Buscemi and Matthew S. Weiler, San Francisco, CA, for appellee CMA CGM.

Joan E. Donoghue, Acting Legal Adviser, and Ron B. Katwan, Attorney Advisor, Department of State, Tony West, Assistant Attorney General, Douglas N. Letter, and Sharon Swingle, Department of Justice, Washington, DC, for amicus curiae United States.

Appeal from the United States District Court for the Northern District of California, Jeffrey S. White, District Judge, Presiding. D.C. No. 3:08-mc-80030-JSW.

Before: BETTY B. FLETCHER, SIDNEY R. THOMAS, and N. RANDY SMITH, Circuit Judges.

Opinion by Judge B. FLETCHER; Dissent by Judge N.R. SMITH.

OPINION

B. FLETCHER, Circuit Judge:

Plaintiffs obtained a default judgment against Iran for $2,656,944,877. When it became clear that Iran was not going to comply with the judgment, plaintiffs moved the district court to order Iran to assign to the plaintiffs, as judgment creditors, Iran's rights to payment from CMA CGM. CMA CGM is a French shipping company that allegedly frequents Iranian ports and pays Iran for use of its harbors and for providing its ships with bunkering oil. The district court raised the issue of foreign sovereign immunity even though Iran did not appear to assert that defense, and the court denied plaintiffs' assignment motion on the basis that Iran's rights to payment from CMA CGM are immune under the Foreign Sovereign Immunities Act ("FSIA"). We affirm.

I. Factual and Procedural Background

On October 23, 1983, Ismalal Ascari drove a truck carrying a large explosive device into the U.S. Marine barracks in Beirut, Lebanon. Ascari crashed through a wire fence and wall of sandbags, drove into the center of the compound, and detonated the explosives, killing 241 American servicemen and injuring many others. Peterson v. Islamic Republic of Iran (Peterson I), 264 F.Supp.2d 46, 56, 58 (D.D.C.2003). The suicide bombing was the most deadly terrorist attack against Americans prior to September 11, 2001. Id. at 47-48. Evidence later surfaced that Hezbollah was responsible for the attack, which it carried out with "massive material and technical support from the Iranian government." Id. at 58.

In 2001, family members of the deceased servicemen and injured survivors brought suit against Iran in the District Court for the District of Columbia. Their complaint included claims for wrongful death, battery, assault, and intentional infliction of emotional distress. Id. at 48. Despite being properly served, Iran failed to respond to the complaint. Id. After a two-day bench trial,1 Judge Lamberth found

627 F.3d 1122
that Iran provided significant financial and logistical support to Hezbollah in connection with the Beirut bombing and was thus liable to the plaintiffs for compensatory damages. Id. at 61. Because of the large number of plaintiffs-at that point, almost one thousand-Judge Lamberth directed special masters to determine the amount of damages owed to each plaintiff. Peterson v. Islamic Republic of Iran (Peterson II), 515 F.Supp.2d 25, 37 (D.D.C.2007). On September 7, 2007, he entered a default judgment for the plaintiffs in the total amount of $2,656,944,877. Id. at 60-66.

Plaintiffs registered their multi-billion dollar judgment in the District Court for the Northern District of California pursuant to 28 U.S.C. § 1963. They then submitted fifteen assignment motions to the district court, each naming a different shipping company that allegedly owed payment to Iran. Judge White elected to consider the motion concerning CMA CGM first. Plaintiffs alleged that CMA CGM, a French shipping company, frequents the Iranian port of Bandar Abbas, as evidenced by the shipping routes displayed on the CMA CGM website. They presented evidence that the Ports & Shipping Organization of Iran charges tariffs on shipping lines that use its ports, and the National Iranian Oil Products Distribution Company sells oil to ships that berth in Iranian ports. The Ports & Shipping Organization and the National Iranian Oil Products Distribution Company are, respectively, agencies under the control of the Iranian Ministry of Roads and Transportation and the Ministry of Petroleum. Plaintiffs moved the court to order Iran to assign to the plaintiffs, as judgment creditors, Iran's rights to payment from CMA CGM.

Though Iran did not appear to assert a sovereign immunity defense to assignment, Judge White raised the issue of immunity sua sponte. He held that the FSIA abrogated the immunity of all Iranian "property in the United States," 28 U.S.C. § 1610(a), and that the plaintiffs had failed to identify any such property. He held further that, even if Iran's rights to payment from CMA CGM were considered property located in the United States, he could not assign those rights to the plaintiffs because they had not properly served Iran with the assignment motion. Accordingly, Judge White denied the motion.

II. Jurisdiction

The Foreign Sovereign Immunities Act provides "the sole basis for obtaining jurisdiction over a foreign state in our courts." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989); see also 28 U.S.C. § 1330. Unless a specified exception to foreign sovereign immunity applies, this court lacks jurisdiction. See Saudi Arabia v. Nelson, 507 U.S. 349, 355, 113 S.Ct. 1471, 123 L.Ed.2d 47 (1993); Corzo v. Banco Central de Reserva del Peru, 243 F.3d 519, 522 (9th Cir.2001) ("The [FSIA] conflates the usually distinct questions of sovereign immunity, subject matter jurisdiction, and personal jurisdiction.").

Under the terrorist act exception, a foreign state shall not be immune from suit in any case "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

627 F.3d 1123
an act." 28 U.S.C. § 1605A(a)(1) (original version at 28 U.S.C. § 1605(a)(7) (2000)).2 The foreign state defendant must have been designated a state sponsor of terrorism by the State Department either at the time the terrorist act occurred or as a result of that act, the claimant or the victim must be a U.S. national, and the foreign state must have been given an opportunity to arbitrate if the terrorist act occurred in its own territory. 28 U.S.C. § 1605A(a)(2) (original version at 28 U.S.C. § 1605(a)(7)(A)-(B) (2000)).

All four jurisdictional requirements are met here. First, like the action that established Iran's liability, this follow-on suit to enforce the judgment is an action in which money damages are sought against a foreign state. See Peterson v. Islamic Republic of Iran (Peterson III), 563 F.Supp.2d 268, 272 (D.D.C.2008) (citing Flatow v. Islamic Republic of Iran, 74 F.Supp.2d 18, 20 (D.D.C.1999)). Second, plaintiffs seek damages for personal injury and death resulting from Iran's provision of material support to Hezbollah in connection with the Marine barracks bombing. See Peterson I, 264 F.Supp.2d at 58. Third, Iran was designated a state sponsor of terrorism January 19, 1984, largely because of that attack. See id. at 51 n. 7; 50 U.S.C. app. 2405(j)(3); 49 Fed.Reg. 2836-02 (Jan. 23, 1984) (notice from George P. Shultz, Secretary of State, designating Iran a state sponsor of terrorism); Kenneth Katzman, Congressional Research Service, Iran: Current Developments and U.S. Policy 6 (Jan. 14, 2000). Fourth, District Judge Lamberth established that each of the victims of the Beirut bombing was a U.S. national before awarding the plaintiffs over $2.6 billion in damages. See Peterson II, 515 F.Supp.2d at 40 n. 4. Finally, the bombing took place in Lebanon, not Iran, therefore the plaintiffs were not required to arbitrate their claims before bringing suit in federal court. Jurisdiction exists under FSIA's terrorist act exception.

Though the District Court for the Northern District of California did not enter the default judgment against Iran, it had jurisdiction to enforce that judgment. A judgment creditor may bring an action to enforce a judgment in any district court. See, e.g., Hilao v. Estate of Marcos, 536 F.3d 980, 983 (9th Cir.2008). When a final judgment from one district court is registered with another district court pursuant to § 1963, the registered judgment must be treated like any other judgment entered by the registering court. 28 U.S.C. § 1963.

III. Discussion

A. Sua Sponte Consideration of Immunity from Execution

Plaintiffs contend that foreign sovereign immunity from execution is an affirmative defense that should have been pleaded and proved by Iran; therefore, the district court erred by raising the issue

627 F.3d 1124
of immunity sua sponte and denying the CMA CGM assignment motion on that basis. Few courts have squarely addressed the question of who may raise the issue of immunity from execution, and those that have are divided. One district court has held that immunity is an affirmative defense that can only be asserted by a foreign state defendant. Rubin v. Islamic Republic of Iran, 436 F.Supp.2d 938, 941 (N.D.Ill.2006), appeal docketed, No. 08-2805 (7th Cir. July 21, 2008). The Fifth Circuit has disagreed and held that, when a court is asked to attach the property of a foreign state, it must raise and decide the issue of immunity from execution on its own initiative. See FG Hemisphere Assocs., LLC v. Republique du Congo, 455 F.3d 575, 590-91 (5th Cir.2006); Walker Int'l Holdings...

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105 practice notes
  • Universal Trading & Inv. Co. v. Bureau for Representing Ukrainian Interests in Int'l & Foreign Courts, Civil Action No. 10–12015–DPW.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 19, 2012
    ...Ninth, Tenth, Eleventh, and D.C. Circuits have established the same burden-shifting framework. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1124–25 (9th Cir.2010); Butler v. Sukhoi Co., 579 F.3d 1307, 1312–13 (11th Cir.2009); O'Bryan v. Holy See, 556 F.3d 361, 376 (6th Cir.2009)......
  • Ministry Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Def. Sys., Inc., Case No. 98–CV–1165–B (DHB).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 27, 2013
    ...However, FSIA does not require service of post judgment documents on a foreign state in default. Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1129–30 & n. 5 (9th Cir.2010); Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9, 23 (D.D.C.2011). As of July 2008, the Rubin Cla......
  • Stansell v. Revolutionary Armed Forces Colombia, Nos. 13–11339
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 16, 2014
    ...need not be served on defendants, including when collection is pursued under the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir.2010). Courts have held that this principle extends to agencies or instrumentalities of terrorist judgment debtors under the FSIA. Se......
  • Stansell v. Revolutionary Armed Forces Colombia, Nos. 13–11339
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 16, 2014
    ...need not be served on defendants, including when collection is pursued under the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir.2010). Courts have held that this principle extends to agencies or instrumentalities of terrorist judgment debtors under the FSIA. Se......
  • Request a trial to view additional results
104 cases
  • Universal Trading & Inv. Co. v. Bureau for Representing Ukrainian Interests in Int'l & Foreign Courts, Civil Action No. 10–12015–DPW.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • September 19, 2012
    ...Ninth, Tenth, Eleventh, and D.C. Circuits have established the same burden-shifting framework. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1124–25 (9th Cir.2010); Butler v. Sukhoi Co., 579 F.3d 1307, 1312–13 (11th Cir.2009); O'Bryan v. Holy See, 556 F.3d 361, 376 (6th Cir.2009)......
  • Ministry Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Def. Sys., Inc., Case No. 98–CV–1165–B (DHB).
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • November 27, 2013
    ...However, FSIA does not require service of post judgment documents on a foreign state in default. Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1129–30 & n. 5 (9th Cir.2010); Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9, 23 (D.D.C.2011). As of July 2008, the Rubin Cla......
  • Stansell v. Revolutionary Armed Forces Colombia, Nos. 13–11339
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 16, 2014
    ...need not be served on defendants, including when collection is pursued under the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir.2010). Courts have held that this principle extends to agencies or instrumentalities of terrorist judgment debtors under the FSIA. Se......
  • Stansell v. Revolutionary Armed Forces Colombia, Nos. 13–11339
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 16, 2014
    ...need not be served on defendants, including when collection is pursued under the FSIA. See Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1130 (9th Cir.2010). Courts have held that this principle extends to agencies or instrumentalities of terrorist judgment debtors under the FSIA. Se......
  • Request a trial to view additional results

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