In recent years, 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.1 These successful plaintiffs then have gone on to engage in what courts have described as “The Never-Ending Struggle to Enforce Judgments Against Iran.”2 Under the Foreign Sovereign Immunities Act of 19763 (FSIA), foreign governments generally cannot be sued in U.S. courts.4 One of several exceptions to this rule, how-ever — an exception recently modified by Congress over President Obama’s veto5 — is that U.S. courts may hear suits against certain foreign countries alleging the commission of or support for terrorism.6 Recently, however, in Rubin v. Islamic Republic of Iran,7 the Seventh Circuit found that plaintiffs holding judgments under the terrorism exception to foreign sovereign immunity are not necessarily entitled to collect on those judgments by seizing assets of the state sponsor of terrorism simply because the judgment is terrorism related, but must first overcome other hurdles to attachment of sovereign assets. This decision has created a split with the Ninth Circuit.8 The lack of clarity in attachment provisions of the FSIA has forced courts to provide piecemeal solutions to an important policy question, to the detriment of all of the objectives underlying the statute. Congress needs to weigh the strong arguments on both sides of the issue and provide coherent statutory guidance.
The plaintiffs in Rubin were American citizen victims or family members of victims of a Hamas suicide bombing on a pedestrian mall in Jerusalem in 1997.9 These victims suffered severe, permanent physical and psychological injuries.10 In 2003, the U.S. District Court for the District of Columbia entered a default judgment of millions of dollars per plaintiff present at the bombing, finding that the attack would not have occurred without material support from Iran.11 During the following thirteen years, the plaintiffs fought multiple unsuccessful battles in various district and circuit courts to seize assets to satisfy their judgments.12 The litigation leading to the Seventh Circuit’s recent decision was their third major such attempt. This time, they sought to seize several collections of ancient Persian artifacts, including tablets containing some of the oldest known writing in the world, allegedly owned by Iran and on loan to or purchased from third parties by the Field Museum of Natural History in Chicago and the Oriental Institute at the University of Chicago.13 After the case wound through the Seventh Circuit on procedural issues for several years,14 it returned to the U.S. District Court for the Northern District of Illinois for judgment on the merits.
Iran and the two institutions in possession of the artifacts moved for summary judgment on the basis that the artifacts were immune from attachment under the FSIA,15 which provides that property of a foreign state that is present in the United States cannot be attached except pursuant to enumerated exceptions.16 These exceptions for attachment are separate from jurisdictional exceptions such as the one through which the plaintiffs obtained their original damages award. The district court examined two FSIA exceptions that the plaintiffs claimed allowed for seizure of the artifacts. First, the plaintiffs argued that the FSIA’s exception for assets used for commercial activity in the United States applied.17 Second, they argued that a recently added provision applied broadly to allow for the attachment of assets in terrorism cases regardless of the limitations set out elsewhere in the statute.18 The district court rejected both of these claims and, finding no applicable exception to the immunity the FSIA grants to assets of a foreign sovereign, entered summary judgment against the plaintiffs.19
The Seventh Circuit affirmed.20 Writing for the panel, Judge Sykes21 agreed with the district court’s rejection of each claimed exception as applied to the single collection of artifacts still at issue.22 Examining the commercial activity exception, she found that the FSIA’s statement that holders of awards under the terrorism exception can attach property “used for a commercial activity in the United States”23 refers only to property used commercially by the foreign state itself and noted that the plaintiffs did not contend that Iran itself used the artifacts for a commercial purpose in the United States. She expressed skepticism that the museums’ academic study constituted commercial activity in any case, but did not reach this question in holding that the commercial activity exception did not apply.24
The Seventh Circuit panel also agreed with the district court in finding that 28 U.S.C. § 1610(g) does not allow for attachment of assets that are not vulnerable under another part of the FSIA, splitting with a Ninth Circuit decision from only a month earlier.25 Section 1610(g), added by Congress in 2008, provides in part that “the property of a foreign state against which a judgment is entered under section 1605A [the terrorism exception to jurisdictional immunity], and the property of an agency or instrumentality of such a state . . . is subject to attachment in aid of execution . . . as provided in this section.”26 Section 1610(g) applies “regardless of” a list of factors that closely mirrors a prior common law test to determine whether the property of an agency or instrumentality could be attached to satisfy a judgment against the state.27 Judge Sykes compared the near-identical language of this court-developed doctrine, consisting of five factors used to determine whether the holder of a judgment against a foreign state could execute against assets of an instrumentality of that state, and the list of factors that § 1610(g) renders irrelevant in determining whether assets can be attached to satisfy a judgment against a state sponsor of terrorism.28 She agreed with the Ninth Circuit that § 1610(g) was intended to, and does, abrogate this common law doctrine as applied to terrorism cases.29 However, she went on to read the “as provided in this section” language as specifically limiting the section’s scope.30 This phrase, as well as other parts of the statute dealing with the terrorism exception, would be superfluous (a result to be avoided in statutory interpretation31) if § 1610(g) were interpreted as a freestanding exception that allowed the attachment of assets to satisfy terrorism judgments even if they were not covered by an exception provided elsewhere in § 1610, such as the commercial use exception.32 No such freestanding exception, Judge Sykes held, exists.33
Judge Hamilton, who was not on the Rubin panel, filed a dissent to the denial of en banc review.34 He found that both Rubin and the Ninth Circuit’s contrary decision in Bennett v. Islamic Republic of Iran35 provided “readings of the text [that] are reasonable, meaning that the text is ambiguous,” and noted that “[t]he courts must choose between two statutory readings: one that favors state sponsors of terrorism, and another that favors the victims of that terrorism.”36 Given Congress’s apparent intent to make it easier for plaintiffs to attach assets to collect on terrorism judgments and the nature of the parties in this case, Judge Hamilton argued that the Rubin panel should have read § 1610(g) as providing a freestanding exception.37
In failing to specify the other parts of the section to which § 1610(g) refers, Congress has prolonged the “Never-Ending Struggle” by leaving individual courts free to settle on opposing interpretations with dramatically different policy implications. Both circuits’ readings have, in addition to plausible legal arguments, compelling policy reasons to support them. At the same time, commentators advocating for a variety of different political positions have called for clarification and reform of the FSIA.38 Whatever one’s political view, the lack of clarity in § 1610(g) and the resulting efforts of courts to determine the answers to major foreign policy questions — sometimes differently from one another — does a disservice to both Congress’s and the Executive’s interests, as well as the interests of victims of state-sponsored terrorism. Congress should amend the FSIA to clarify the scope of the exception and to balance more effectively the objectives of the Act.
The major purposes of the terrorism exceptions to the FSIA were deterring state sponsors of terrorism and compensating victims.39 Congressional desire to pass laws imposing heavy monetary penalties for terrorism is understandable, particularly in the immediate aftermath of terrible, and widely publicized, attacks harming Americans.40 However, a circuit split that renders many assets unavailable for seizure in terrorism cases in the Seventh Circuit — though not in the Ninth — fails to serve fully the goal of deterrence.41 It also makes for fragmented policy. Further, terror victims’ already-fraught path to recovery becomes if anything more complicated, expensive, and painful when the availability of assets turns on the current positions of different courts in different jurisdictions rather than on the nature of the assets or the nature of the victims’ claims. The Rubin plaintiffs’ saga throws into sharp relief the strife faced by victims of terrorism as they navigate the legal maze of exceptions to the FSIA.42 It has now been over ten years since the Rubin plaintiffs were awarded damages against Iran and nearly twenty since they were originally victimized by Hamas suicide bombers, and they have litigated three major efforts at attachment through three district and two appeals courts.43 Moreover, by directing all of the different groups of victims toward those assets in the jurisdiction of friendly circuits, the circuit split might lead to races to court among the victims.
The policy arguments for clarifying the FSIA to hew more closely to the Ninth Circuit’s reading are compelling. Judge Hamilton went even further with his unflattering characterization of a statutory interpretation preventing the collection of assets as “favor[ing] state sponsors of terrorism.”44 But this goes too far: there are in fact substantial interests that weigh against seizure of foreign states’ property. Indeed, the executive branch has consistently opposed efforts to collect assets from foreign governments to satisfy terrorism judgments. As it has in similar cases, the U.S. government under the Obama Administration filed a brief supporting Iran’s position in Rubin.45 The Clinton and Bush Administrations both opposed similar efforts to seize foreign assets.46 Given the executive branch’s role as the day-to-day manager of the United States’ international relations, its reasons for such opposition makes sense: foreign assets present in the United States are useful leverage in negotiations, these assets could assist in normalizing relations with countries not currently U.S. allies, and countries facing seizure of their property by U.S. courts might retaliate with their own similar legislation, putting American assets abroad at risk.47 The Rubin court agreed that a major purpose of the legal barriers to attachment of foreign state assets is that such attachment is seen as a “serious affront” to the sovereignty of the other state.48
Unfortunately, however, some of the Executive’s feared outcomes occur simply as a result of litigation over asset seizure, even if plaintiffs are ultimately unsuccessful in satisfying their judgment. Rubin attracted condemnation from Iranian authorities: the Iranian Foreign Minister called the Rubin litigation an “indecent cultural move by the United States” and suggested the possibility of retaliatory legal claims even though the U.S. State Department supported Iran’s position throughout the case49 and Iran ultimately prevailed in court.50 This type of criticism is, of course, particularly relevant to cases in which culturally significant objects are in play, such as the ancient writing tablets in Rubin.51 Iran’s outrage at the attempted seizure of its artifacts would, presumably, be the same whether those artifacts were located in the Seventh or Ninth Circuits. The Rubin panel’s protection of the University’s and the Field Museum’s collections, then, means little as far as the executive branch’s interests are concerned.
There are, then, substantial arguments to be made on both sides of the question of foreign sovereign asset immunity in terrorism cases — but they are not arguments to be directed to the courts. As Daveed Gartenstein-Ross has noted, “[b]ecause terrorism is a foreign policy problem, it is best dealt with by the political branches of government rather than by a wide array of courts and judges engaging in their own foreign policy experiments.”52 A reading of statutory language like Judge Hamilton’s explicitly makes use of particular jurists’ preferences to support certain interests over others, and even a decision based purely on principles of statutory interpretation like the Rubin panel’s has the practical effect of fragmenting the sources of foreign policy decisions, as is already evident in the conflicting Seventh and Ninth Circuit opinions.53 Congress can legislate the vulnerability of certain specific assets once they are already embroiled in court proceedings — a practice the Supreme Court upheld last term54 — but by that point in the process it is too late to prevent most of the detrimental effects of having no clear law in the first place.
Under the current version of the FSIA, it is unclear whether holders of judgments against foreign state sponsors of terror can seize assets owned by those states regardless of whether the assets are covered by another exception. This lack of clarity does a disservice to congressional objectives of deterrence, harms executive interests in managing relationships with foreign states, and leads victims of terrorism through a costly legal maze in an attempt to collect. Given courts’ disagreement on the proper interpretation of § 1610(g) of the FSIA and the resulting fragmentation of a key policy decision, Congress should update § 1610(g) to clarify whether it serves as a freestanding exception to foreign sovereign asset immunity. The political branches need to decide whether, as a matter of policy, the benefits are worth the costs of allowing seizure of any kind of asset in state-sponsored terrorism cases.