Weinstein v. Islamic Republic of Iran

• Decision Date: 22 July 2003
• Docket Number: No. CIV.A.00-2601 RCL.,CIV.A.00-2601 RCL.
• Parties: Susan WEINSTEIN, et al., Plaintiffs, v. THE ISLAMIC REPUBLIC OF IRAN, et al., Defendants.
• Court: U.S. District Court — District of Columbia

274 F.Supp.2d 53

Susan WEINSTEIN, et al., Plaintiffs, v. THE ISLAMIC REPUBLIC OF IRAN, et al., Defendants.

No. CIV.A.00-2601 RCL.

United States District Court, District of Columbia.

July 22, 2003.

COPYRIGHT MATERIAL OMITTED

William A. Davis, Mintz, Levin, Cohn, Ferris, Washington, DC, Jeffrey A. Miller, Westerman Ball Ederer Miller & Sharstein, LLP, Mineola, NY, for Plaintiff.

Carol Federighi, U.S. Department Of Justice Civil Division, Washington, DC, Rupa Bhattacharyya, Federal Programs Branch Civil Division, Washington, DC, for Defendants.

MEMORANDUM AND ORDER

LAMBERTH, District Judge.

This matter comes before the Court on the motion of the United States to quash plaintiffs' writs of attachment [40-1], which was filed on January 31, 2003. Upon consideration of the United States's motion, plaintiffs' brief in opposition thereto, the reply brief of the United States, and the applicable law in this case, the Court finds that the United States's motion to quash should be granted in part and denied in part.

I. PROCEDURAL BACKGROUND

On February 25, 1996, Ira Weinstein, an American citizen, was injured in a suicide bombing undertaken by members of Hamas in Jerusalem, and died on April 13 of that year. Plaintiffs initiated the present suit on October 27, 2000 under the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1605, as amended.

On February 6, 2002, this Court entered a default judgment against defendants, and awarded plaintiffs $33.2 million in compensatory damages and $150 million in punitive damages. Weinstein v. Islamic Republic of Iran, 184 F.Supp.2d 13 (D.D.C.2002). Plaintiffs' counsel later served three writs of attachment, which are dated November 26, 2002, upon the U.S. Departments of State, Defense, and Treasury. The writs notified these agencies that "any money, property or credits other than wages, salary and commissions of the above named defendant(s), are seized ... and you are required to hold it and not to pay or surrender it to the defendant(s) or to anyone else without an order from this court." The cover letters transmitted with the writs noted that the writs "appl[y], inter alia and without limitation, to the Iran Foreign Military Sales Program account within the Foreign Military Sales (`FMS') Fund and to any other assets, credits or funds of the instant judgment debtors and their agencies and instrumentalities within the FMS Fund," as well as to four identified Bank of America accounts "if the funds in any of these accounts are found to be funds of the instant judgment debtors or their agencies and instrumentalities held by the United States."

On January 31, 2003, the United States filed a motion with this Court seeking to quash the three writs of attachment issued against the Departments of State, Treasury, and Defense.¹ Plaintiffs submitted a brief in opposition to the United States's motion on May 9, 2003. The reply brief of the United States was filed on June 13, 2003.

II. ANALYSIS

Before analyzing the legal questions at issue, it will be necessary to explain the precise scope of the issues before the Court. In their opposition brief, plaintiffs have clarified that the writs of attachment served upon the Departments of Defense, State, and Treasury were not directed towards any Iranian diplomatic or consular real properties located in the United States. The reply brief of the United States appears to accept this representation of plaintiffs. Therefore, the issue of whether the writs of attachment could reach such properties is not before this Court. Instead, the only assets that plaintiffs are seeking to attach are the four Bank of America accounts identified in the attachment writs ("the Bank of America accounts") and the Iran Foreign Military Sales Program account within the Foreign Military Sales Fund ("the FMS account").

The United States asserts that the writs should be quashed because the doctrine of federal sovereign immunity bars the attachment of the assets sought in the writs. Plaintiffs acknowledge that this doctrine is implicated, but contend that the United States has waived its sovereign immunity with respect to the attachment of these assets. Because the question of whether a valid waiver of sovereign immunity exists constitutes a threshold jurisdictional question, the Court will address this issue first.

A. Federal Sovereign Immunity

The doctrine of federal sovereign immunity provides that the United States may not be sued without its express consent. Therefore, absent an express waiver of sovereign immunity, the federal government and its agencies will be immune from suit. Dep't of the Army v. Blue Fox, Inc., 525 U.S. 255, 260, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999). A waiver of sovereign immunity must be "unequivocally expressed in the statutory text" and "is to be strictly construed, in terms of its scope, in favor of the sovereign." Id. at 261, 119 S.Ct. 687. Therefore, any ambiguities within the statutory text must be resolved in favor of the sovereign. See United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131 L.Ed.2d 608 (1995) ("Our task is to discern the unequivocally expressed intent of Congress, construing ambiguities in favor of immunity.") (citation and internal quotation marks omitted).

This Court has previously explained that the principles of sovereign immunity "apply with equal force to attachments and garnishments." Flatow v. Islamic Republic of Iran, 74 F.Supp.2d 18, 21 (D.D.C.1999) (citations omitted). Therefore, if a litigant seeks to attach funds held in the U.S. Treasury, he or she must demonstrate that the United States has waived its sovereign immunity with respect to those funds. Id. at 22 (concluding that U.S. Treasury funds constituted the property of the United States and could not be attached in the absence of an express waiver of sovereign immunity).

In the instant case, plaintiffs assert that section 201 of the Terrorism Risk Insurance Act of 2002 ("TRIA"), Pub.L. No. 107-297, 116 Stat. 2322 (2002) functions as an express waiver of sovereign immunity, allowing them to attach funds held by the United States. Whether, in fact, the TRIA constitutes a waiver of federal sovereign immunity appears to be an issue of first impression. The Court must therefore examine the statutory language, in order to determine whether it demonstrates a clear, unequivocal expression of intent to waive the sovereign immunity of the United States.

Section 201(a) of the TRIA provides:

IN GE NE RAL. — Notwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.

The term "blocked assets" is defined in section 201(d)(2) as

any asset seized or frozen by the United States under section 5(b) of the Trading With the Enemy Act (50 U.S.C.App. 5(b)) or under sections 202 and 203 of the International Emergency Economic Powers Act (50 U.S.C. 1701; 1702); and

(B) does not include property that —

(i) is subject to a license issued by the United States Government for final payment, transfer, or disposition by or to a person subject to the jurisdiction of the United States in connection with a transaction for which the issuance of such license has been specifically required by statute other than the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) or the United Nations Participation Act of 1945 (22 U.S.C. 287 et seq.); or

(ii) in the case of property subject to the Vienna Convention on Diplomatic Relations or the Vienna Convention on Consular Relations, or that enjoys equivalent privileges and immunities under the law of the United States, is being used exclusively for diplomatic or consular purposes.

Plaintiffs assert that by mandating that "the blocked assets of that terrorist party ... shall be subject to execution or attachment in aid of execution in order to satisfy such judgment," Congress expressly waived the sovereign immunity of the United States with respect to "any asset seized or frozen by the United States" under the two identified statutes that does not fall under the protection of subsection (B). They construe the phrase "any asset ... seized by the United States" to refer to assets that have been seized by the United States, and are presently being held by the United States. Therefore, plaintiffs explain, Congress has waived the sovereign immunity of the United States with respect to writs seeking to attach any assets seized by the United States from a "terrorist party," as defined in the statute, and that are currently being held by the United States.

However, the phrase in question is by no means susceptible to only one interpretation. As the United States points out, it is a mistake to equate "assets seized by" (which refers to assets of which the United States has taken forcible possession) with "assets held by" (which refers to assets presently possessed by the United States by a lawful title). For example, the United States might have seized assets from a foreign state sponsor of terrorism at some point in time, but later decided to relinquish its possession of those assets. In such an instance, although the assets would have been "assets seized by" the United States, they are not "assets (presently) held by" the United States. In other words, the intent of Congress may simply have been to authorize successful plaintiffs to attach assets that have previously been seized by the United States from state sponsors of terrorism,...