On April 20, the U.S. Supreme Court upheld a judgement that held Iran financially responsible for terrorist attacks dating back to the 1983 Marine Corps barracks bombing in Beirut. The lead plaintiff, Deborah Peterson, is the sister of Lance Cpl. James C. Knipple, who was killed in Beirut. The court ruled 6-2 in favor of more than 1,300 relatives of the 241 service members who were killed in Lebanon as well as other victims of attacks that courts have linked to Iran, such as the 1996 Khobar Towers bombing in Saudi Arabia. Iran refused to comply with past judgments, which led lawyers to search for Iranian assets held in the United States. This case, Bank Markazi (Iran’s central bank) v. Peterson, involved some $1.75 billion in bonds, plus accumulating interest, held by Citibank in New York.
Bank Markazi had challenged a 2014 ruling by the 2nd U.S. Circuit Court of Appeals that said the Iranian assets should be turned over to the families. The bank argued that Congress overstepped its jurisdiction when it passed a 2012 law that directed the banks’ assets to be turned over to the families of victims. President Barack Obama had issued an executive order earlier that year freezing the bank’s assets in the United States. Justice Ruth Bader Ginsburg wrote the opinion for the court. The 2012 law, Ginsburg wrote, “does not transgress restraints placed on Congress and the president by the Constitution.” The Obama administration, as well as both Democrats and Republicans in Congress, supported compensation for families.
On April 21, Iranian foreign ministry spokesman Hossein Jaberi Ansari said the ruling “amounts to appropriation of the Islamic Republic of Iran’s property.” He warned that it “increases the distrust between Tehran and Washington.” On April 25, Foreign Minister Mohammad Javad Zarif warned that Iran would move to sue the United States at the International Court of Justice at The Hague to prevent the distribution of nearly $2 billion in Iranian assets. On May 5, the 120-nation Non-Aligned Movement (NAM) protested the ruling in a letter to U.N. Secretary General Ban Ki-moon.
**UPDATE: On July 20, the 2nd U.S. Circuit Court reversed the order for the sale of a 6-story Manhattan office building worth some $1 billion and other properties. The appeals court ruled that the properties in question were not controlled by Iran.
The following are excerpts from the court’s opinion with reactions by Iranian officials and excerpts from the NAM letter.
BANK MARKAZI, AKA THE CENTRAL BANK OF IRAN, PETITIONER
v.
DEBORAH PETERSON, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
[April 20, 2016]
JUSTICE GINSBURG delivered the opinion of the Court.*
A provision of the Iran Threat Reduction and Syria Human Rights Act of 2012, 22 U. S. C. §8772, makes available for postjudgment execution a set of assets held at a New York bank for Bank Markazi, the Central Bank of Iran. The assets would partially satisfy judgments gained in separate actions by over 1,000 victims of terrorist acts sponsored by Iran. The judgments remain unpaid. Section 8772 is an unusual statute: It designates a particular set of assets and renders them available to satisfy the liability and damages judgments underlying a consolidated enforcement proceeding that the statute identifies by the District Court’s docket number. The question raised by petitioner Bank Markazi: Does §8772 violate the separation of powers by purporting to change the law for, and directing a particular result in, a single pending case?
Section 8772, we hold, does not transgress constraints placed on Congress and the President by the Constitution. The statute, we point out, is not fairly portrayed as a “one-case-only regime.” Brief for Petitioner 27. Rather, it covers a category of postjudgment execution claims filed by numerous plaintiffs who, in multiple civil actions, obtained evidence-based judgments against Iran together amounting to billions of dollars. Section 8772 subjects the designated assets to execution “to satisfy any judgment” against Iran for damages caused by specified acts of terrorism. §8772(a)(1) (emphasis added). Congress, our decisions make clear, may amend the law and make the change applicable to pending cases, even when the amendment is outcome determinative.
Adding weight to our decision, Congress passed, and the President signed, §8772 in furtherance of their stance on a matter of foreign policy. Action in that realm warrants respectful review by courts. The Executive has historically made case-specific sovereign-immunity determinations to which courts have deferred. And exercise by Congress and the President of control over claims against foreign governments, as well as foreign-government-owned property in the United States, is hardly a novelty. In accord with the courts below, we perceive in §8772 no violation of separation-of-powers principles, and no threat to the independence of the Judiciary.
A
We set out here statutory provisions relevant to this case. American nationals may file suit against state sponsors of terrorism in the courts of the United States. See 28
U.S.C. §1605A. Specifically, they may seek “money damages . . . against a foreign state for personal injury or death that was caused by” acts of terrorism, including “torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support” to terrorist activities. §1605A(a)(1). This authorization—known as the “terrorism exception”—is among enumerated exceptions prescribed in the Foreign Sovereign Immunities Act of 1976 (FSIA) to the general rule of sovereign immunity.
Click here for the full text.
Iranian Officials
*via The New York Times
President Hassan Rouhani
“We will soon take the case of the $2 billion to the international court.”
“We will not allow the United States to swallow this money so easily.”
—May 20, 2016, in a televised speech
Foreign Minister Mohammad Javad Zarif
“We hold the U.S. administration responsible for preservation of Iranian funds, and if they are plundered, we will lodge a complaint with the I.C.J. for reparation.”
—April 25, 2016, to the press
“I have lost every respect for U.S. justice. The judgment by the Supreme Court and the other, even more absurd judgment by a New York circuit court deciding that Iran should pay damages for 9/11 are the height of absurdity.
“People can legislate in other countries to confiscate American assets. Would you be happy with that? … The Supreme Court is the Supreme Court of the United States, not the Supreme Court of the world. We’re not under its jurisdiction, nor is our money.
“It is a theft. Huge theft. It is highway robbery. And believe you me, we will get it back.”
—April 21, 2016, in an interview with The New Yorker
Foreign Ministry spokesman Hossein Jaberi Ansari
“The ruling has mocked [international] law,” and “amounts to appropriation of the Islamic Republic of Iran’s property.”
—April 21, 2016, to the press
Supreme Leader Ayatollah Ali Khamenei
The US intrigues & deceives, yet complains why we are pessimist! 1/3 #JCPOA
— Khamenei.ir (@khamenei_ir) April 27, 2016
On paper they say banks can trade with #Iran, but in action they provoke ‘#Iranophobia’ so that no trade would be done with Iran. 2/3
— Khamenei.ir (@khamenei_ir) April 27, 2016
May 5 Letter from the Non-Aligned Movement to U.N. Secretary General Ban Ki-moon
The Coordinating Bureau of the Non-Aligned Movement rejects the illegal practice of the United States in defying international law by allowing and facilitating private plaintiffs to bring civil action before US courts against sovereign states, including the Islamic Republic of Iran, leading to the awards of default judgements against them and their national institutions. …
Legislation by US Congress to pave the way for illegally confiscating foreign assets in the United States and the actions by the US government… enables US courts to issue groundless rulings.