Rubin v. Islamic Republic of Iran

• Decision Date: 22 June 2006
• Docket Number: No. 03 CV 9370.,03 CV 9370.
• Citation: 436 F.Supp.2d 938
• Parties: Jenny RUBIN, et al., Plaintiffs, v. The ISLAMIC REPUBLIC OF IRAN, et al., Defendants, v. The University of Chicago, et al., Citation Third Party Respondents.
• Court: U.S. District Court — Northern District of Illinois

436 F.Supp.2d 938

Jenny RUBIN, et al., Plaintiffs, v. The ISLAMIC REPUBLIC OF IRAN, et al., Defendants, v. The University of Chicago, et al., Citation Third Party Respondents.

No. 03 CV 9370.

United States District Court, N.D. Illinois, Eastern Division.

June 22, 2006.

David J. Strachman, Robert S. Parker, McIntyre, Tate, Lynch & Holt, Providence, RI, Daniel A. Shmikler, Robert David Cheifetz, Sperling & Slater, Chicago, IL, for Plaintiffs.

Thomas Anthony Doyle, Matthew G. Allison, Richard M. Franklin, Baker & McKenzie LLP, Hillary Paige Krantz, Freeborn & Peters, LLP, Chicago, IL, for Respondents.

MEMORANDUM AND ORDER

MANNING, District Judge.

Displeased with Magistrate Judge Ashman's report and recommendation on the plaintiffs' motion for partial summary judgment, citation respondents the University of Chicago, the Field Museum of Natural History, and Gil Stein have objected. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Specifically, the citation respondents contend that the magistrate judge misapprehended federal statutes, and cases interpreting them, when concluding that only defendant Iran may assert foreign sovereign immunity over its property located in the United States. However, because the magistrate's report is wellreasoned and correctly interprets laws governing foreign sovereign immunity, the citations respondents' objections are overruled.

Background

In 2001, the plaintiffs obtained a federal court judgment in a personal injury suit against Iran and several other defendants. The plaintiffs are now attempting to enforce their judgment by seeking to execute or attach various collections of Persian artifacts in the possession of the citation respondents. See Foreign Sovereign Immunity Act, 28 U.S.C. § 1602 et seq. (the FSIA). Iran loaned the artifacts to the citation respondents in the 1930s and 1960s with the understanding that the collections would be returned after archeological studies were completed.

The FSIA governs attempts to sue foreign governments, or to seek to execute or attach property located in the United States that is owned by a foreign government. See 28 U.S.C. § 1602 et seq. For the most part, property owned by a foreign state is immune from attachment. See id. at § 1609 ("the property in the United States of a foreign state shall be immune from attachment arrest and execution"). However, the statute creates two exceptions. Section 1610 creates an exception for property used by the foreign state for a commercial activity. Although during a different stage of this litigation the parties disagreed over whether the commercial activity exception of § 1610 applied, the exception's applicability is not relevant to the motion for partial summary judgment. Neither is the exception created by § 1611, which prohibits the attachment of certain property owned by foreign banks or foreign militaries.

Iran has so far failed to assert its sovereign immunity or even to appear, despite having been given notice of these proceedings. In its absence, the citation respondents have asserted Iran's foreign sovereign immunity under the FSIA to resist the plaintiffs' attempts to execute or attach the Persian artifacts. The plaintiffs responded by filing the instant motion seeking to establish that, as a matter of law, no party other than Iran may assert Iran's sovereign immunity under the FSIA.

The magistrate judge recommended granting the plaintiffs' motion for partial summary judgment. In his report and recommendation, Magistrate Judge Ashman concluded that foreign sovereign immunity is an affirmative defense personal to Iran, and therefore only Iran has standing to assert the defense. In reaching that conclusion, the magistrate judge rejected the citation defendants' argument that foreign sovereign immunity is not an affirmative defense, but rather is a question of subject matter jurisdiction that can be raised by any party at any time. The magistrate judge also rejected the argument by the citation respondents that the plaintiffs should have raised their standing argument at the same time they filed earlier discovery motions raising arguments under the FSIA. The magistrate judge concluded that the motion was timely because the parties were still in the early stages of litigation.

Analysis

Standard of Review

The magistrate judge issued his report and recommendation under the authority granted by 28 U.S.C. § 636(b)(1). As permitted by that statute, the defendants objected. Accordingly, this court reviews the magistrate judge's report and recommendation de novo. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); Pinkston v. Madry, 440 F.3d 879, 893 (7th Cir.2006). Normally, in reviewing a motion for summary judgment, the court would decide whether a genuine issue of material fact precluded judgment as a matter of law for the moving party. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). However, the question presented by the plaintiffs' motion is a purely legal one: may Iran's sovereign immunity under the FSIA be asserted only by Iran?

Timeliness of Motion for Partial Summary Judgment

As a threshold matter, the court agrees with the magistrate judge's conclusion that the plaintiffs' motion for partial summary judgment was timely. As the magistrate judge noted, apart from the instant motion, the parties have litigated only a few discovery matters. The citation respondents barely address why they believe the magistrate judge's report and recommendation is wrong on this point other than to conclusorily assert that it is. See Weinstein v. Schwartz, 422 F.3d 476, 477 n. 1 (7th Cir.2005) (perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority, are forfeited). Accordingly, they have failed to provide this court with a reason for not accepting the magistrate judge's conclusion.

Foreign Sovereign Immunity is an Affirmative Defense

After carefully reviewing the magistrate's report and recommendation, the briefs filed by the parties and the United States, the cases cited, and the FSIA, the court agrees with the magistrate judge's conclusion that foreign sovereign immunity under § 1610 is an affirmative defense. As stated explicitly in a United States House report prepared at the time of the FSIA's passage, foreign sovereign immunity was enacted by Congress as "an affirmative defense which must be specially pleaded." H.R.Rep. No. 94-1487, 9th Cong., 2d Sess., at 17 (1976). Although the quoted language referred to immunity from suit afforded foreign states by § 1604, elsewhere the House Report likens immunity from suit under § 1604 to the immunity that shields a foreign state's property from attachment or execution under § 1609. H.R.Rep. No. 94-1487, at 26 ("As in the case of section 1604 of the bill with respect to jurisdiction, section 1609 states a general proposition that the property of a foreign state, as defined in section 1603(a), is immune from attachment and from execution . . ..")

The citation respondents urge the court not to consider or rely upon the legislative history of the FSIA for two reasons. First, they argue that the court must not turn to legislative history to interpret the statute because the statute's meaning is clear on its face. Specifically, the citation respondents contend that § 1609's use of the language "the property in the United States of a foreign state shall be immune from attachment" (emphasis added) unambiguously means that immunity runs with the foreign state's property, regardless of whether the foreign state asserts immunity. In other words, the citation respondents argue, use of the word "shall" makes immunity automatic, and in the absence of one of the exceptions in §§ 1610 or 1611, a district court is without jurisdiction to attach such property. According to the citation respondents, to read into the statute a requirement that the foreign state assert immunity "interpose[s] additional requirements beyond the statute's declaration of immunity."

But § 1609's use of the word "shall" is not as unambiguous as portrayed by the citation respondents. Just a few sections earlier within the same statute, the FSIA creates a ten-year statute of limitations with the language "[n]o action shall be maintained under subsection (a)(7) unless the action is commenced not later than 10 years after the day on which the cause of action arose." 28 U.S.C. § 1605(f). Yet despite use of the word "shall," according to Federal Rule of Civil Procedure 8(c), statutes of limitations such as the one created by § 1605(f) are affirmative defenses which, if not asserted, could lead to forfeiture. See Carter v. United States, 333 F.3d 791, 796 (7th Cir.2003) (failure to assert an affirmative defense will result in waiver if plaintiff is prejudiced by the delay). Use of the word "shall" to create an affirmative defense is not unique to the FSIA—many other instances occur throughout the United States Code. See, e.g., 15 U.S.C. § 1711(a) (statute of limitations); 18 U.S.C. § 2332(a) (statute of limitations); 45 U.S.C. § 56 (statute of limitations).

Second, the citation respondents contend that despite language in House Report 94-1487 describing foreign sovereign immunity as an affirmative defense, the Supreme Court nevertheless directed district courts to assess immunity sua sponte in Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). In Verlinden, the Supreme Court concluded that "sovereign immunity is an affirmative defense that must be specially pleaded," id. at 494 n. 20, 103 S.Ct. 1962, but that a district court must still determine whether immunity is available under the FSIA "even if the foreign state does not enter an appearance to assert an immunity defense." Id. at 494 n. 20, 103 S.Ct. 1962.

The citation respondents seize upon this discussion in Verlinden to argue that the magistrate judge erred by granting plaintiffs' motion for...