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Rubin v. Iran

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Supreme Court of the United States
Rubin v. Iran
Term: 2017
Important Dates
Argument: December 4, 2017
Decided: February 21, 2018
Outcome
Seventh Circuit affirmed
Vote
8 - 0 to affirm[1]
Majority
Chief Justice John G. Roberts • Anthony Kennedy • Clarence Thomas • Stephen Breyer • Samuel Alito • Neil Gorsuch


Rubin v. Islamic Republic of Iran is a case argued during the October 2017 term of the U.S. Supreme Court. Argument in the case was held on December 4, 2017. The case came on a writ of certiorari to the United States Court of Appeals for the 7th Circuit.

The issue in this case was whether assets held overseas by a non-state entity can be attached to a civil judgment in U.S. courts against a foreign government that engages in or materially supports terrorist activity. Depending on the U.S. Supreme Court's decision, assets of foreign states held throughout the U.S. could be attached and enforced to civil judgments for terrorism. A 2009 decision in the United States District Court for the District of Columbia estimated that "upward of one thousand American nationals have been awarded billions of dollars in damages against the Islamic Republic of Iran by U.S. courts on the basis of state sponsorship of terrorist activity."[2]

HIGHLIGHTS
  • The case: After being awarded a civil judgment against the Islamic Republic of Iran for Iran's role in supporting a terrorist bombing, the plaintiffs sought to attach Iranian equities held by an unaffiliated U.S.-based institution towards executing the judgment after Iran refused to pay the plaintiffs. The plaintiffs argued that a provision of the Foreign Sovereign Immunities Act, 28 U.S.C. §1610(g), contained a terrorism exception that would allow the plaintiffs to use the antiquities as a means to pay the judgment in part. A federal district judge and a three-judge panel of the Seventh Circuit Court of Appeals disagreed, holding that §1610(g) did not provide a terrorism exception beyond those exceptions provided within Section 1610 of the Act. The courts ruled that those provisions did not apply in this case. The Ninth Circuit Court of Appeals, however, had read §1610(g) to contain a much broader terrorism exception for execution beyond Section 1610.
  • The issue: What is the extent of the terrorism exception for attaching otherwise immune assets towards the execution of a civil judgment under Section §1610(g) of the Foreign Sovereign Immunities Act?
  • The outcome: The U.S. Supreme Court affirmed the ruling of the Seventh Circuit.


    • In brief: Plaintiffs who were awarded a $71.5 million dollar civil judgment against the Islamic Republic of Iran attempted to attach Iranian antiquities held by the University of Chicago to the execution of the civil judgment, which Iran refused to pay. A federal district judge issued the judgment for Iran's role in providing material support to a 2003 bombing in Jerusalem. Iran refused to pay the judgment. The plaintiffs argued that a provision of the Foreign Sovereign Immunities Act, 28 U.S.C. §1610(g), contained a terrorism exception that would allow the plaintiffs to use the antiquities as a means to pay the judgment in part. A federal district judge and a three-judge panel of the Seventh Circuit Court of Appeals disagreed, holding that §1610(g) did not provide a terrorism exception beyond those exceptions provided within Section 1610 of the Act. The courts ruled that those provisions did not apply in this case. The Ninth Circuit Court of Appeals, however, had read §1610(g) to contain a much broader terrorism exception for execution beyond Section 1610. Argument in the case was held on December 4, 2017. On February 21, 2018, the U.S. Supreme Court affirmed the Seventh Circuit's ruling.[3]

    You can review the lower court's opinion here.[4]

    Background

    This was a case about whether a foreign state accused of engaging in or supporting terrorism can have assets that would otherwise be immune from civil liability attached and executed to a civil judgment, even if the foreign state's assets are held or owned by an entity that is unaffiliated with the foreign state. Here, specifically, the question was whether Iranian antiquities held by the University of Chicago could be attached to a civil judgment entered against the Islamic Republic of Iran for its role in a terrorist attack against U.S. citizens, a judgment which Iran refused to pay.

    In September of 1997, three suicide bombers executed a bombing in Jerusalem. Among the casualties were eight U.S. citizens, who later filed a civil action with some of their relatives in a U.S. court against the Islamic Republic of Iran for Iran's role in providing material support to the bombers. The suit was brought under the terrorism exception to the Foreign Sovereign Immunities Act. A federal judge in the District of Columbia entered a default judgment for the plaintiffs for $71.5 million dollars, which Iran subsequently refused to pay. The plaintiffs filed numerous other lawsuits in an attempt to compel payment of the judgment, including an effort in federal district court to attach and execute various Iranian antiquities held by the University of Chicago to the judgment. The plaintiffs argued that three mechanisms existed for bringing the antiquities under the judgment: 28 U.S.C. §1610(a), 28 U.S.C. §1610(g), and the Terrorism Risk Insurance Act of 2002. A federal district court rejected each of the three paths and a three-judge panel of the Seventh Circuit Court of Appeals composed of Seventh Circuit Judges Diane Sykes and William Bauer as well as District Judge Michael Reagan of the Southern District of Illinois (by designation) upheld the verdict. As the U.S. Supreme Court agreed to hear the appeal on the basis of the 28 U.S.C. §1610(g) holding, this page will examine that aspect of the Seventh Circuit ruling in detail.

    28 U.S.C. §1610(g) reads,[4]

    “

    (1) In general.—Subject to paragraph (3), the property of a foreign state against which a judgment is entered under section 1605A, and the property of an agency or instrumentality of such a state, including property that is a separate juridical entity or is an interest held directly or indirectly in a separate juridical entity, is subject to attachment in aid of execution, and execution, upon that judgment as provided in this section, regardless of—

    (A) the level of economic control over the property by the government of the foreign state;
    (B) whether the profits of the property go to that government;
    (C) the degree to which officials of that government manage the property or otherwise control its daily affairs;
    (D) whether that government is the sole beneficiary in interest of the property; or
    (E) whether establishing the property as a separate entity would entitle the foreign state to benefits in United States courts while avoiding its obligations.

    (2) United states sovereign immunity inapplicable.—
    Any property of a foreign state, or agency or instrumentality of a foreign state, to which paragraph (1) applies shall not be immune from attachment in aid of execution, or execution, upon a judgment entered under 28 U.S.C. §1605A because the property is regulated by the United States Government by reason of action taken against that foreign state under the Trading With the Enemy Act or the International Emergency Economic Powers Act.
    (3) Third-party joint property holders.—
    Nothing in this subsection shall be construed to supersede the authority of a court to prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise to a judgment in property subject to attachment in aid of execution, or execution, upon such judgment.[5]

    		”

    In other words, if a civil judgment against a foreign government renders that government subject to the terrorism exception of the Foreign Sovereign Immunities Act (28 U.S.C. §1605A), then the property of a foreign government can be attached to the execution of a civil judgment, even if that property is held outside of the territorial boundaries of the foreign government and is held in possession by an entity that is unaffiliated with the foreign government.

    The plaintiffs in this case argued that, based on the language of §1610(g)(1), any and all Iranian assets at the University of Chicago were available for execution. While execution of assets under §1610(a) would have required any particular asset to have a relationship to commercial activity, the plaintiffs argued that §1610(g) was a freestanding exception for terrorism-related judgments and, therefore, the Iranian antiquities were not immune from attachment and execution.

    Both Iran and the University of Chicago challenged that interpretation. They argued that such an interpretation of §1610(g) would violate the U.S. Supreme Court's 1983 ruling in First National City Bank v. Banco Para El Comercio Exterior de Cuba (hereafter, Bancec). That case created what is known as the Bancec doctrine, which stipulated that "a judgment against a foreign state may not be executed on property owned by a juridicially separate agency or instrumentality." Put another way, because the University of Chicago owned the Iranian antiquities and because the university was a separate entity from the Islamic Republic of Iran, the antiquities could not be attached to the civil judgment. The Bancec doctrine recognizes two exceptions: "the holder of a judgment against a foreign state may execute on the property of its instrumentality if the sovereign and its instrumentality are alter egos or if adherence to the rule of separateness would work a fraud or injustice."[4]

    In her opinion for the panel, Judge Sykes noted that the plaintiffs' interpretation that §1610(g) created a freestanding exception to execution immunity was misplaced. She wrote, "terrorism victims with unsatisfied §1605A judgments against foreign states may execute on the foreign state’s property and the property of its agency or instrumentality—without regard to the Bancec presumption of separateness—but they must do so 'as provided in this section.' § 1610(g). That is, they must satisfy an exception to execution immunity found elsewhere in § 1610—namely, subsections (a) or (b)." Because the plaintiffs did not identify such an exception, the antiquities could not be attached to the civil judgment and executed under §1610(g) in this case.[4]

    In granting certiorari, the U.S. Supreme Court acknowledged that the Ninth Circuit has ruled on §1610(g) differently, holding that the provision does create an freestanding exception to execution immunity.

    Petitioners' challenge

    Jenny Rubin et al., the petitioners, challenged the holding of the Seventh Circuit. The petitioners argued that the Ninth Circuit interpreted §1610(g) correctly in holding that the provision created an freestanding exception to execution immunity for terrorism-related civil judgments.

    Certiorari granted

    On October 17, 2016, Jenny Rubin et al., the petitioners, initiated proceedings in the Supreme Court of the United States in filing a petition for a writ of certiorari to the Seventh Circuit. The U.S. Supreme Court granted the request for certiorari on June 27, 2017, limiting arguments in the case to question 1 of the petition. Justice Elena Kagan took no part in the consideration or decision to grant certiorari. Argument in the case was held on December 4, 2017.[6]

    Question presented

    Question presented:

    "Whether 28 U.S.C. § 1610(g) provides a freestanding attachment immunity exception that allows terror victim judgment creditors to attach and execute upon assets of foreign state sponsors of terrorism regardless of whether assets are otherwise subject to execution under Section 1610."[6]

    Audio

    • Audio of oral argument:[7]



    Transcript

    • Transcript of oral argument:[8]

    Outcome

    Decision

    In a unanimous decision, the U.S. Supreme Court affirmed the ruling of the Seventh Circuit.[3]

    Opinion of the court

    Justice Sonia Sotomayor offered the unanimous opinion of the court. Sotomayor wrote:

    “ Section 1610(g) serves to identify property that will be available for attachment and execution in satisfaction of a §1605A judgment, but it does not in itself divest property of immunity. Rather, the provision’s language “as provided in this section” shows that §1610(g) operates only when the property at issue is exempt from immunity as provided elsewhere in §1610. Petitioners cannot invoke §1610(g) to attach and execute against the antiquities at issue here, which petitioners have not established are exempt from immunity under any other provision in §1610.[3][5] ”

    She continued, "Out of respect for the delicate balance that Congress struck in enacting the FSIA, we decline to read into the statute a blanket abrogation of attachment and execution immunity for §1605A judgment holders absent a clearer indication of Congress’ intent."[3]

    Text of the opinion

    See also

    Footnotes

    1. ↑ Justice Elena Kagan recused herself from the case.
    2. ↑ Harvard Law Review, "International Law: Rubin v. Islamic Republic of Iran," December 9, 2016
    3. ↑ 3.0 3.1 3.2 3.3 United States Supreme Court, "Rubin v. Iran" Opinion, February 21, 2018
    4. ↑ 4.0 4.1 4.2 4.3 U.S. Court of Appeals for the Seventh Circuit, Jenny Rubin et al. v. Islamic Republic of Iran and Field Museum of Natural History et al., July 19, 2016
    5. ↑ 5.0 5.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    6. ↑ 6.0 6.1 Supreme Court of the United States, Rubin v. Islamic Republic of Iran, June 27, 2017
    7. ↑ Supreme Court of the United States, Rubin v. Iran, argued December 4, 2017
    8. ↑ Supreme Court of the United States, Rubin v. Iran, argued December 4, 2017
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