Suits Against Terrorist States by Victims of Terrorism
Suits Against Terrorist States by
Victims of Terrorism
Updated August 8, 2008
Jennifer K. Elsea
American Law Division
Suits Against Terrorist States by Victims of Terrorism
In 1996 Congress amended the Foreign Sovereign Immunities Act (FSIA) to
allow U.S. victims of terrorism to sue designated State sponsors of terrorism for their
terrorist acts. The courts have handed down large judgments against the terrorist
State defendants, generally in default, and successive Administrations have
intervened to block the judicial attachment of frozen assets to satisfy judgments.
After a court ruled that Congress never created a cause of action against terrorist
States themselves, but only against their officials, employees, and agents, plaintiffs
have based claims on state law. The limited availability of defendant States’ assets
for satisfaction of judgments has made collection difficult. Congress passed a rider
to the National Defense Authorization Act for FY2008 (H.R. 4986), to provide a
federal cause of action against terrorist States and to facilitate enforcement of
judgments, authorizing the President to waive the provision with respect to Iraq.
Congress subsequently passed S. 3370 to exempt Libya from the FSIA provisions if
it agrees to compensate victims with pending lawsuits.
Section 1083 of P.L. 110-181 is the latest in a series of actions Congress has
taken over the last decade to assist plaintiffs in lawsuits against terrorist States. Theth
107 Congress enacted a measure in the Terrorism Risk Insurance Act of 2002
(“TRIA”) (P.L. 107-297) to allow the attachment of blocked assets of terrorist States
to pay compensatory damages to victims. The Victims of Trafficking and Violence
Protection Act of 2000 (“VTVPA”) (P.L. 106-386) liquidated some frozen assets to
pay claims and provided some U.S. funds to compensate those holding judgments
against Iran at the time. Section 1083 seeks to make more assets available to execute
terrorism judgments. It permits the attachment of assets belonging to separate
agencies and instrumentalities of defendant States, permits plaintiffs to file notices
of lis pendens with respect to property owned by defendant States or entities they
control, and permits some plaintiffs to refile claims.
The Supreme Court has not directly addressed the FSIA terrorism exception, but
in 2006 it remanded a decision based on the lower court’s assumption that Iran’s
Ministry of Defense (MOD) is an “agency or instrumentality” of Iran rather than part
of the government itself, and will decide in its upcoming term whether certain Iranian
assets are available under the TRIA to judgment holders. The Court may also be
asked to determine the effect of the waiver of § 1083 on pending cases against Iraq,
which the Court of Appeals for the D.C. Circuit has permitted to go forward.
This report provides background on the doctrine of State immunity and the
FSIA; details the evolution of the terrorist State exception and some of the resulting
judicial decisions; describes legislative efforts to help claimants satisfy their
judgments; summarizes the hostages’ suit against Iran and Congress’s efforts to
intervene; summarizes the status of lawsuits against Iraq and Libya; and provides an
overview of proposed legislation (S. 3370, H.R. 3346, S. 1944, H.R. 394, H.R. 5167,
and H.R. 2764). Appendix A provides a list of cases, including those covered by
TRIA § 2002 and the amount of compensation paid. Appendix B lists the assets of
each terrorist State currently blocked by the United States and the total amount owed
by each for terrorism judgments. The report will be updated as events warrant.
Background on State Immunity.......................................3
The Anti-Terrorism and Effective Death Penalty Act of 1996:
Civil Suits Against Terrorist States by Victims of Terrorism............5
Early Cases and Efforts to Satisfy Judgments............................7
105th Congress: Section 117 of the Treasury and General
Government Appropriations Act for Fiscal Year 1999............10
106th Congress: Enactment of § 2002 of the Victims of Trafficking
and Violence Protection Act of 2000 (VTVPA).................11
107th Congress: Additional Cases Added to § 2002 and Attachment
of Assets Allowed in Other Cases............................19
(1) Directive to develop a comprehensive compensation scheme
(2) Coverage of additional cases under § 2002 (P.L. 107-228)......21
(3) Attachment of frozen assets authorized (P.L. 107-297).........21
Bush Administration’s Proposed Compensation Alternative...........23
The Search for a Cause of Action: Cicippio-Puleo v. Iran.................24
Iran Hostages Case: Roeder v. Islamic Republic of Iran...................26
Efforts to Abrogate the Algiers Accords...........................31
Iraq: Lawsuits Involving Acts of Saddam Hussein Regime................32
Confiscation of Blocked Assets for Reconstruction..................32
POW Lawsuit: Acree v. Republic of Iraq..........................33thth
Proposed Legislation: 108 and 109 Congresses....................35
Other Cases Against Iraq.......................................36
Effect of FY2008 NDAA, § 1083 on Iraq and Cases Pending..........39
Ministry of Defense (Iran) v. Elahi....................................44
109th Congress: Proposed Legislation.................................47
The National Defense Authorization Act for FY2008, § 1083..........48
Cause of Action and Abrogation of Immunity...................48
Limitations and Procedures.................................49
Property Subject to Execution...............................54
Blocked and Regulated Property under Sanctions Regulations......57
Application to Pending Cases...............................59
The Consolidated Appropriations Act, P.L. 110-161 (Libya)...........62
Proposals to Waive § 1083 for Former State Sponsors of Terrorism.....62
Other Bills in the 110th Congress.................................65
Suits Against the United States for “Terrorist” Acts......................66
Appendix A. Judgments Against Terrorist States........................69
Appendix B. Assets of Terrorist States................................75
List of Tables
Table A-1. Judgments Against Terrorist States Covered by
VTVPA § 2002 (P.L. 106-386)..................................69
Table A-2. Judgments Against Terrorist States Not Covered by
VTVPA § 2002..............................................72
Table B-1. Amount of Assets of Terrorist States.........................75
Suits Against Terrorist States
by Victims of Terrorism
Prior to 1996, foreign States were immune from civil liability in U.S. courts for
injuries caused by acts of terrorism carried out by their agents and proxies. In 1996,1
Congress amended the Foreign Sovereign Immunities Act (FSIA) to allow civil suits
by U.S. victims of terrorism against certain States responsible for, or complicit in,
such terrorist acts as torture, extrajudicial killing, aircraft sabotage, and hostage
taking.2 The amendment enjoyed broad support in Congress, but was initially
resisted by the executive branch. President Clinton signed the amendment into law
after the Cuban air force shot down a civilian plane over international waters, an
incident that resulted in one of the first lawsuits under the new FSIA exception. After
a court found that the waiver of sovereign immunity did not itself create a private3
right of action, Congress passed the Flatow Amendment to create a cause of action.
Numerous court judgments awarding plaintiffs substantial compensatory and punitive4
damages were to follow, until the D.C. Circuit in 2004 interpreted the provisions in
1 28 U.S.C. §§ 1602 et seq. The exception allows suit to be brought against the agencies and
instrumentalities of such States as well.
2 P.L. 104-132, Title II, §221 (April 23, 1996); 110 Stat. 1241; 28 U.S.C. § 1605(a)(7).
3 “Civil Liability for Acts of State-Sponsored Terrorism,” P.L. 104-208, Title I, §101(c)
[Title V, § 589] (September 30, 1996), 110 Stat. 3009-172; codified at 28 U.S.C. § 1605
(a) an official, employee, or agent of a foreign state designated as a state sponsor of
terrorism designated under section 6(j) of the Export Administration Act of 1979 (50
App. U.S.C. 2405(j)) while acting within the scope of his or her office, employment, or
agency shall be liable to a United States national or the national’s legal representative for
personal injury or death caused by acts of that official, employee, or agent for which the
courts of the United States may maintain jurisdiction under section 1605(a)(7) of title 28,
United States Code, for money damages which may include economic damages, solatium,
pain, and suffering, and punitive damages if the acts were among those described in
(b) Provisions related to statute of limitations and limitations on discovery that would
apply to an action brought under 28 U.S.C. 1605(f) and (g) shall also apply to actions
brought under this section. No action shall be maintained under this action if an official,
employee, or agent of the United States, while acting within the scope of his or her office,
employment, or agency would not be liable for such acts if carried out within the United
4 The FSIA provides that States are not liable for punitive damages but that such damages
may be awarded against their agencies and instrumentalities. See 28 U.S.C. § 1606.
Although the D.C. Circuit has found that punitive damages do not apply to agencies of
foreign governments that perform primarily governmental rather than commercial services
a way that made further awards somewhat more difficult for plaintiffs to win.
Plaintiffs thereafter largely relied on domestic state law to provide a cause of action,
which resulted in some disparity in the amount and type of relief available to
different victims of the same terrorist attacks.
Although the defendant State sponsors of terrorism have frequently declined to
appear in court to defend against the lawsuits, the litigation has nevertheless proven
contentious, often leading to the perception on the part of plaintiffs that the U.S.
government is their most formidable adversary. Nevertheless, U.S. courts have
awarded victims of terrorism more than $19 billion against State sponsors of
terrorism and their officials, most of which remains uncollected. The scarcity of
assets within U.S. jurisdiction that belong to States subject to economic sanctions has
made judgments against terrorist States difficult to enforce. Efforts by plaintiffs to
attach frozen assets and diplomatic or consular property, while receiving support
from Congress, have met with opposition from the executive branch. The total
amount of judgments against terrorist States far exceeds the assets of debtor States
known to exist within the jurisdiction of U.S. courts. The use of U.S. funds to pay
portions of some judgments has drawn criticism. Calls for a more effective and fair
means to compensate victims of terrorism have not yielded an alternative mechanism.
The issue has pitted the compensation of victims of terrorism against U.S. foreign
policy goals and some business interests.
Congress passed a rider to the National Defense Authorization Act for FY2008
(H.R. 1585), to provide a cause of action against terrorist States and to facilitate
enforcement of judgments, and to permit some plaintiffs to refile claims that were
unsuccessful under the previous law. The provision also permits the filing of new
cases related to terrorist incidents that have been the subject of previous cases, in
order to permit the filing of cases in which the plaintiffs were previously ineligible
to file or had missed the filing deadline, or perhaps in order to garner higher
After the President vetoed the bill based on the possible impact the measure
would have on Iraq, Congress passed a new version, H.R. 4986, this time authorizing
the President to waive its provisions with respect to Iraq. The President signed the
bill into law, P.L. 110-181, and promptly issued a waiver with respect to Iraq. The
Administration now seeks a waiver for Libya and other States whose designation may
be lifted. However, the Court of Appeals for the D.C. Circuit has ruled that the
because such agencies are considered to be the State itself rather than an agent, Roeder v.
Islamic Republic of Iran, 333 F.3d 228, 234 (D.C. Cir. 2003), cert. denied, 124 S.Ct. 2836
(2004), some courts continued to award punitive damages against foreign military and
intelligence agencies. The Supreme Court vacated and remanded a decision that had treated
the Ministry of Defense (MOD) of Iran as an “agency or instrumentality” for the purpose
of determining immunity of its property to execution to satisfy a judgment, but did not
explain how the court was to determine the proper characterization of an entity. Total
punitive damages awarded under the terrorism exception to the FSIA now amount to nearly
$7.3 billion (excluding any vacated awards). Total compensatory damages under the
exception amount to about $6.6 billion. Another $5.3 billion was awarded against six Libyan
officials in their personal capacities. See Appendix A.
waiver with respect to Iraq does not affect pending cases, which are permitted to go
forward under the FSIA as it was in effect prior to the FY2008 NDAA.
This report provides background on the international law doctrine of foreign
State immunity and the FSIA; summarizes the 1996 amendments creating an
exception to state immunity under the FSIA for suits against terrorist States; details
the subsequent cases and the legislative initiatives to assist claimants in efforts to
collect on their judgments; sets forth the legal and policy arguments that were made
for and against those efforts; summarizes the decision in Roeder v. Islamic Republic
of Iran and efforts to help the plaintiffs and override the Algiers Accords; describes
the Administration’s actions vesting title to Iraq’s frozen assets in the United States
and making them unavailable to former POWs in Acree v. Republic of Iraq and other
plaintiffs who have won judgments against Iraq; discusses an effort by Iran to void
a judgment against it (Ministry of Defense v. Elahi); notes the laws in certain terrorist
States that allow suits against the U.S. for similar acts; and concludes that the issue
of providing fair compensation to victims of terrorism is not one that will likely
dissipate any time soon.
The report also contains two appendixes: Appendix A lists the cases covered
by § 2002 of the Victims of Trafficking and Violence Protection Act of 2000
(P.L. 106-386), the amount of compensation that has been paid in each case, and the
source of the compensation. It provides a separate list of judgments handed down
later that are not covered by the compensation schemes set forth in earlier legislation,
whose creditors will likely compete with each other to satisfy claims out of scarce
blocked assets. Appendix B lists the amount of the assets of each terrorist State
blocked by the United States as of the end of 2006, as compared to the current sum
of judgments that remain to be satisfied. The report will be updated as events
Background on State Immunity
Customary international law historically afforded sovereign States complete
immunity from being sued in the courts of other States. In the words of Chief Justice
Marshall, this immunity was rooted in the “perfect equality and absolute
independence of sovereigns” and the need to maintain friendly relations. Although
each nation has “full and absolute” jurisdiction within its own territory, the Chief
Justice stated, that jurisdiction, by common consent, does not extend to other
One sovereign being in no respect amenable to another; and being bound by
obligations of the highest character not to degrade the dignity of his nation, by
placing himself or its sovereign rights within the jurisdiction of another, can be
supposed to enter a foreign territory only under an express license, or in the
confidence that the immunities belonging to this independent sovereign station,
though not expressly stipulated, are reserved by implication, and will be
extended to him.
This perfect equality and absolute independence of sovereigns, and this common
interest impelling them to mutual intercourse, and an interchange of good offices
with each other, have given rise to a class of cases in which every sovereign is
understood to waive the exercise of a part of that complete exclusive territorial5
jurisdiction, which has been stated to be the attribute of every nation.
During the last century, however, this principle of absolute sovereign immunity
gradually came to be limited after a number of States began engaging directly in
commercial activities. To allow States to maintain their immunity in the courts of
other States even while engaged in ordinary commerce, it was said, “gave States an
unfair advantage in competition with private commercial enterprise” and denied the
private parties in other nations with whom they dealt their normal recourse to the6
courts to settle disputes. As a consequence, numerous States immediately before
and after World War II adopted the “restrictive principle” of state immunity, which
preserves sovereign immunity for most cases but allows domestic courts to exercise
jurisdiction over suits against foreign States for claims arising out of their
The United States adopted the restrictive principle of sovereign immunity by
administrative action in 1952,7 and the State Department began advising courts on
a case-by-case basis whether a foreign sovereign should be entitled to immunity from
a U.S. court’s jurisdiction based on the nature of the claim. In 1978 Congress
codified the principle in the Foreign Sovereign Immunities Act (FSIA), so that the
decision no longer depended on a determination by the State Department.8 The FSIA
states the general principle that “a foreign state shall be immune from the jurisdiction
of the courts of the United States and of the States”9 and then sets forth several
exceptions. The primary exceptions are for cases in which “the foreign state has
waived its immunity either expressly or by implication,” cases in which “the action
is based upon a commercial activity carried on in the United States by the foreign
state,” and suits against a foreign State for personal injury or death or damage to
property occurring in the United States as a result of the tortious act of an official or
employee of that State acting within the scope of his office or employment.10 For
most types of claims covered, the FSIA also provides that the commercial property
of a foreign State in the United States may be attached in satisfaction of a judgment
against it regardless of whether the property was used for the activity on which the
5 The Schooner Exchange, 11 U.S. (7 Cranch) 116, 137 (1812) (holding a French warship
to be immune from the jurisdiction of a U.S. court). In Berizzi Bros. Co. v. S.S. Pesaro, 271
U.S. 562 (1926), the Court held this principle of immunity to apply as well to State-owned
6 AMERICAN LAW INSTITUTE, 1 RESTATEMENT OF THE LAW THIRD: THE FOREIGN RELATIONS
LAW OF THE UNITED STATES 391 (1987).
7 The Acting Legal Adviser of the Department of State, Jack B. Tate, stated in a letter to the
Acting Attorney General that in future cases the Department would follow the restrictive
principle. 26 Department of State Bulletin 984 (1952). Previously, when a case against a
foreign State arose, the State Department routinely asked the Department of Justice to
inform the court that the government favored the principle of absolute immunity; and the
courts usually acceded to this advice. The Tate letter meant that the government would no
longer make this suggestion in cases against foreign States involving commercial activity.
8 28 U.S.C. §§ 1602-11.
9 Id. § 1604.
10 Id. § 1605.
claim was based.11 However, assets belonging to separate instrumentalities of a
foreign government are not generally available to satisfy claims against the foreign
government itself or against other agencies and instrumentalities in which that
government has an interest.
The Anti-Terrorism and Effective Death Penalty Act
of 1996: Civil Suits Against Terrorist States by
Victims of Terrorism
In 1996 Congress added another exception to the FSIA to allow the U.S. courts,
federal and state, to exercise jurisdiction over foreign States and their agencies and
instrumentalities in civil suits by U.S. victims of terrorism.12 The Anti-Terrorism and
Effective Death Penalty Act of 1996 (AEDPA) amended the FSIA to provide that a
foreign State is not immune from the jurisdiction of U.S. courts in cases in which
money damages are sought against a foreign state for personal injury or death
that was caused by an act of torture, extrajudicial killing, aircraft sabotage,
hostage taking, or the provision of material support or resources ... for such an
act if such act or provision of material support is engaged in by an official,
employee, or agent of such foreign state while acting within the scope of his or13
her office, employment, or agency....
As predicates for such suits, the AEDPA amendment required that the foreign State
be designated as a State sponsor of terrorism by the State Department at the time the14
act occurred or later so designated as a consequence of the act in question, that
either the claimant or the victim of the act of terrorism be a U.S. national,15 and that
the defendant State be given a prior opportunity to arbitrate the claim if the act on
11 Id. § 1610.
12 P.L. 104-132, Title II, § 221 (April 24, 1976); 110 Stat. 1241; 28 U.S.C. § 1605(a)(7).
14 The State Department identifies State sponsors of terrorism pursuant to § 6(j) of the
Export Administration Act of 1979 (50 App. U.S.C. § 2405(j)), § 620A of the Foreign
Assistance Act (22 U.S.C. § 2371), and § 40(d) of the Arms Export Control Act (22 U.S.C.
§ 2780(d)). The list, which is published annually, currently includes Cuba, Iran, North
Korea, Sudan, and Syria. See 22 CFR §126.1(a) (2002). Iraq and Libya are no longer
designated State sponsors of terrorism. The White House gave notice on June 26, 2008, that
North Korea will lose its designation after the 45-day waiting period provided by statute.
See U.S. Department of State, Fact Sheet: North Korea: Presidential Action on State
Sponsor of Terrorism (SST) and the Trading with the Enemy Act (TWEA)(June 26, 2008),
available at [http://www.state.gov/r/pa/prs/ps/2008/jun/106281.htm].
15 As initially enacted, the statute provided that a terrorist State could not be sued if “either
the claimant or victim was not a U.S. national.” Concern that the provision could be read
to require that both the claimant and victim be U.S. nationals, which might have excluded
some of the families injured by the terrorist bombing of Pan Am 103 over Lockerbie,
Scotland, led Congress to amend the language in 1997 to bar such suits only if “neither the
claimant nor the victim was a national of the United States....” See P.L. 105-11; H.Rept.
which the claim is based occurred in the territory of the defendant State. The act also
provided that the terrorist States and their agencies and instrumentalities would be
liable for compensatory damages, and the agencies and instrumentalities for punitive
damages as well.16 The act further allowed the commercial property of a foreign
State in the United States to be attached in satisfaction of a judgment against that
State under this amendment regardless of whether the property was involved in the
act on which the claim was based.17 After previously opposing similar proposals, the
Clinton Administration agreed to these changes in the FSIA.
16 28 U.S.C. § 1605 note.
17 Id. § 1610(b)(2). These amendments to the FSIA did not receive much debate or
explanation during the AEDPA’s consideration by the Senate and the House. Provisions
similar to what was enacted were included in both the Senate and the House measures as
introduced (S. 735, § 221 and H.R. 2703, § 803, respectively). But no committee report was
filed on either bill; and the only change that appears to have been made during floor debate
was a slight amendment by Representative Hyde in a manager’s amendment in the House
imposing a 10-year statute of limitations on such suits and slightly modifying the provision
concerning pre-trial arbitration. See 142 CONG. REC. H2164 (daily ed., March 13, 1996).
The report of the conference committee simply stated as follows:
Section 221 — House section 803 recedes to Senate section 206, with modifications. This
subtitle provides that nations designated as state sponsors of terrorism under section 6(j)
of the Export Administration Act of 1979 will be amenable to suit in U.S. courts for
terrorist acts. It permits U.S. federal courts to hear claims seeking money damages for
personal injury or death against such nations and arising from terrorist acts they commit,
or direct to be committed, against American citizens or nationals outside of the foreign
state’s territory, and for such acts within the state’s territory if the state involved has
refused to arbitrate the claim.
H.Rept. 104-518 (1996).
However, the House had adopted a similar measure during the second session of the
previous Congress (H.R. 934). The Department of State and the Department of Justice had
opposed the legislation at that time. The House Judiciary Committee explained the rationale
of the bill as follows:
The difficulty U.S. citizens have had in obtaining remedies for torture and other injuries
suffered abroad illustrates the need for remedial legislation. A foreign sovereign violates
international law if it practices torture, summary execution, or genocide. Yet under
current law a U.S. citizen who is tortured or killed abroad cannot sue the foreign
sovereign in U.S. courts, even when the foreign country wrongly refuses to hear the
citizen’s case. Therefore, in some instances a U.S. citizen who was tortured (or the family
of one who was murdered) will be without a remedy.
H.R. 934 stands for the principle that U.S. citizens who are grievously mistreated abroad
should have an effective remedy for damages in some tribunal, either in the country where
the mistreatment occurred or in the United States. To this end, the bill would add a new
exception to the FSIA that would allow suits against foreign sovereigns that subject U.S.
citizens to torture, extrajudicial killings or genocide and do not provide adequate remedies
for those harms.
H.Rept. 103-702, 103rd Cong., 2d Sess. (August 16, 1994), at 4.
After a court found that the terrorism exception to sovereign immunity did not
itself create a cause of action,18 Congress passed the Civil Liability for Acts of State-
Sponsored Terrorism (known as the “Flatow Amendment”)19 to clarify that a cause
of action existed against the officials, employees, and agents of States whose
sovereign immunity was abrogated pursuant to the exception. The Flatow
Amendment gives parties injured or killed by a terrorist act covered by the FSIA
exception, or their legal representatives, a cause of action for suits against “an
official, employee, or agent of a foreign state designated as a state sponsor of
terrorism” who commits the terrorist act “while acting within the scope of his or her
office, employment, or agency ....” if a U.S. government official would be liable for
similar actions. This measure was adopted as part of the Omnibus Consolidated
Appropriations Act for Fiscal 1997 without apparent debate.20
Early Cases and Efforts to Satisfy Judgments
Several suits were quickly filed against Cuba and Iran pursuant to the new
provisions. Neither State recognized the jurisdiction of the U.S. courts in such suits,
however; and both refused to appear in court to mount a defense. The FSIA provides
that a court may enter a judgment by default in such a situation if “the claimant
establishes his claim or right to relief by evidence satisfactory to the court.”21 After
making the proper finding, several federal trial courts entered default judgments
holding Iran and Cuba to be culpable for particular acts of terrorism and awarding the22
plaintiffs substantial amounts in compensatory and punitive damages.
Neither Iran nor Cuba had any inclination to pay the damages that had been
assessed in these cases. As a consequence, the plaintiffs and their attorneys sought
18 See Flatow v. Islamic Republic of Iran, 999 F. Supp. 1 (D.D.C. 1998). The FSIA
exception creates jurisdiction over the defendant State, making it amenable to lawsuits based
on causes of action established elsewhere in law, just as they would apply to private persons
and entities, but does not create a private right of action.
19 P.L. 104-208, Title I, §101(c) (September 30, 1996), 110 Stat. 3009-172; codified at 28
U.S.C. § 1605 note (see supra note 3).
20 The provision appears to have first arisen in the House-Senate conference committee on
H.R. 3610. See H.Rept. 104-863, 104th Cong., 2d Sess. (September 28, 1996).
21 28 U.S.C. § 1608(e).
22 See Alejandre v. Republic of Cuba, 996 F.Supp. 1239 (S.D. Fla. 1997) ($50 million in
compensatory damages and $137.7 million in punitive damages awarded to the families of
three of the four persons who were killed when Cuban aircraft shot down two Brothers to
the Rescue planes in 1996); Flatow v. Islamic Republic of Iran, 999 F. Supp. 1 (D.D.C.
1998) ($27 million in compensatory damages and $225 million in punitive damages awarded
to the father of Alisa Flatow, who was killed in 1995 by a car bombing in the Gaza Strip by
Islamic Jihad, an organization which the court found to be funded by Iran); and Cicippio v.
Islamic Republic of Iran, 18 F. Supp. 2d 62 (D.D.C. 1998) ($65 million awarded in
compensatory damages to three persons (and two of their spouses) who were kidnaped, held
hostage, and tortured in Lebanon in the mid-1980s by Hezbollah, an organization which the
court found to be funded by Iran).
to attach certain properties and other assets owned by the States in question that were
located within the jurisdiction of the United States to satisfy the judgments.
In the case of Flatow v. Islamic Republic of Iran, plaintiffs sought to attach the
embassy and several diplomatic properties of Iran located in Washington, DC, the
proceeds that had accrued from the rental of those properties after diplomatic
relations had been broken in 1979, and an award that had been rendered by the Iran-
U.S. Claims Tribunal in favor of Iran and against the U.S. government but which had
not yet been paid.23 The Clinton Administration opposed these efforts, arguing that
the diplomatic properties and the rental proceeds were essentially sovereign non-
commercial property that remained immune to attachment pursuant to the FSIA. In
addition, the Administration argued that it was obligated to protect Iran’s diplomatic
and consular properties under the Vienna Convention on Diplomatic Relations24 and
the Vienna Convention on Consular Relations25 and that using such properties to
satisfy court judgments would expose U.S. diplomatic and consular properties around
the world to similar treatment by other countries. The Clinton Administration further
argued that the funds set aside to pay an award to Iran by the decision of the Claims
Tribunal were still U.S. property and, as such, were immune from attachment due to
U.S. sovereign immunity. The court agreed and quashed the writs of attachment.26
Efforts were also mounted in both the Flatow case and in Alejandre v. Republic
of Cuba (the Brothers to the Rescue case) to attach assets of Iran and Cuba in the
United States that had been blocked by the U.S. government pursuant to sanctions
regulations.27 Iran’s assets in the United States had been frozen under the authority
of the International Emergency Economic Powers Act (IEEPA)28 at the time of the
23 The Iran-U.S. Claims Tribunal at the Hague was created pursuant to provisions in the
Algiers Accords of 1981 that led to the release of the U.S. hostages. Claims by U.S.
nationals against Iran that were outstanding at the time of the release of the hostages as well
as claims by Iranian nationals against the United States and contractual claims between the
two governments were made subject to case-by-case arbitration by the Tribunal. Most
Iranian assets held by U.S. persons or entities at that time were transferred to the Federal
Reserve Bank of New York and were either returned to Iran or were forwarded to an escrow
account for use in satisfying judgments rendered against Iran by this Tribunal. See the
various agreements between the United States and Iran relating to the release of the hostages
(known as the Algiers Accords), 20 ILM 223-240 (January 1981); Executive Orders 12276-
24 23 UST 3227 (1972).
25 21 UST 77 (1969).
26 Flatow v. Islamic Republic of Iran, 74 F. Supp. 2d 18 (D.D.C. 1999) (quashing a writ of
attachment for U.S. Treasury funds) and Flatow v. Islamic Republic of Iran, 76 F. Supp. 2d
16 (D.D.C. 1999) (quashing writs of attachment for Iran’s embassy and chancery and two
bank accounts holding proceeds from the rental of these properties). For a more detailed
description of these proceedings, see Sean Murphy, Satisfaction of U.S. Judgments Against
State Sponsors of Terrorism, 94 AM. J. INT’L L. 117 (2000).
27 See Appendix B for a list of the amounts of the assets of each State on the terrorist list
that are blocked in the U.S.
28 50 U.S.C. §§ 1701 et seq. IEEPA gives the President substantial authority to regulate
hostage crisis in 1979.29 However, under the Algiers Accords reached to resolve the
crisis, most of those assets had either been returned to Iran or placed in an escrow
account in England subject to the decisions of the Iran-U.S. Claims Tribunal, an
arbitral body set up by the Algiers Accords to resolve remaining disputes between the
two countries or their nationals. Cuba’s assets in the United States had been blocked
since the early 1960s under the authority of the Trading with the Enemy Act
(TWEA).30 The Clinton Administration opposed the efforts to allow access to these
assets as well. It argued that such assets are useful, and historically have been used,
as leverage in working out foreign policy disputes with other countries (as in the
Iranian hostage situation) and that they will be useful in negotiating the possible
future re-establishment of normal relations with Iran and Cuba. The Administration
also contended that numerous other U.S. nationals had legitimate (and prior) claims
against these countries that would be frustrated if the assets were used solely to
compensate the recent victims of terrorism.31 The Administration also argued that
using frozen assets to compensate victims of State-sponsored terrorism exposes the
United States to the risk of reciprocal actions against U.S. assets by other States.32
economic transactions with foreign countries and nationals to deal with “any unusual and
extraordinary threat, which has its source in whole or substantial part outside the United
States, to the national security, foreign policy, or economy of the United States, if the
President declares a national emergency with respect to such a threat.”
29 Executive Order 12170, 44 Fed. Reg. 65,729 (November 14, 1979).
30 50 U.S.C. App. § 5. TWEA, originally enacted in 1917, gives the President powers
similar to those of IEEPA to regulate economic transactions with foreign countries and
nationals in time of war. At the time it was used to freeze Cuba’s assets in 1962, it also
applied in times of national emergency; but that authority was eliminated when IEEPA was
enacted in 1977. Sanctions previously imposed under that authority, however, were
grandfathered. See 50 U.S.C. § 1708.
31 In the 1960s, for instance, Congress directed the Foreign Claims Settlement Commission
to determine the number and amount of legitimate claims against Cuba resulting from Fidel
Castro’s takeover of the government and subsequent expropriation of property from January
codified at 22 U.S.C. § 1643. The program was completed in 1972 and found 5,911 claims
totaling $1,851,057,358 (in 1972 valuations) to be valid. Those claims remain pending.
In the Iran Claims Settlement Act of 1985, Congress directed the Foreign Claims Settlement
Commission to determine the validity and amount of small claims against Iran (those for less
than $250,000) pending at the time of the hostage crisis and to distribute to such claimants
the proceeds of any en bloc settlement concluded by the U.S. and Iran. See P.L. 99-93,
Title V, §§ 505-505 (August 16, 1985), 99 Stat. 437, codified at 50 U.S.C. § 1701 note. The
United States and Iran concluded such an agreement in 1990. See State Department Office
of the Legal Adviser, Cumulative Digest of United States Practice in International Law
1981-1988 (Book III) (1995), at 3201. All other pre-1981 claims against Iran (and against
the United States by Iran and Iranian nationals) remained subject to case-by-case arbitration
by the Iran-U.S. Claims Tribunal.
32 Both Cuba and Iran have reportedly enacted statutes allowing suits against the United
States for acts of terrorism or “interference,” and several substantial judgments against the
United States have been handed down pursuant to those statutes. See infra at 54.
105th Congress: Section 117 of the Treasury and General
Government Appropriations Act for Fiscal Year 1999
In an attempt to override these objections, the 105th Congress in 1998 further
amended the FSIA to provide that any property of a terrorist State frozen pursuant to
TWEA or IEEPA and any diplomatic property of such a State could be subject to
execution or attachment in aid of execution of a judgment against that State under the33
terrorism State exception to the FSIA. Section 117 of the Treasury Department
Appropriations Act for Fiscal Year 1999 also mandated that the State and Treasury
Departments “shall fully, promptly, and effectively assist” any judgment creditor or
court issuing a judgment against a terrorist State “in identifying, locating, and34
executing against the property of that foreign state....” Because of the
Administration’s continuing objections, however, section 117 also gave the President
authority to “waive the requirements of this section in the interest of national
security.” On October 21, 1998, President Clinton signed the legislation into law and
33 P.L. 105-277, Div. A, Title I, § 117 (October 21, 1998), 112 Stat. 2681-491, codified at
28 U.S.C. § 1610(f)(1)(A). This section was added to the FSIA by § 117 of the Treasury
and General Government Appropriations Act for Fiscal Year 1999, as contained in the
Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal Year
1999, P.L. 105-277 (1998), 112 Stat. 2681. The provision, without the waiver authority, had
originated in the Senate version of the Treasury appropriations bill; but the Senateth
Appropriations Committee had offered no explanation. See S. 2312 (105 Cong.) and
S.Rept. 105-251(1998). It had also been offered during House floor debate on the House
version of the Treasury appropriations bill by Representative Saxton but had been subject
to a point of order as legislation on an appropriations bill. 144 CONG. REC. 15,856-59
(1998). In conference with the House, the provision was retained, but waiver authority for
the President was added. The conference reports offered no further explanation. See H.R.
4104, H.Rept. 105-760 (1998), and H.Rept. 105-789 (1998). H.R. 4104 was not enacted but
its provisions were folded into the omnibus act. Both immediately prior and after the
enactment of the omnibus act, several members of the House and Senate expressed the view
that the waiver authority of § 117 should be read to apply only to the requirement that the
State and Justice Departments assist judgment creditors in locating the assets of terrorist
States. See, e.g., 144 CONG. REC. 17,192-93 (1998) (statements of Sen. Graham and Sen.
Faircloth); id. at 27,742-43 (1998) (remark by Representative Pascrell); id. at 27,749-80
(remarks by Representative Meek, Representative Forbes, Representative Wolf,
Representative Istook, Representative Northup, and Representative Aderholt); id. at 27,204
(remark by Representative Saxton). But at least one House member also expressed the view
that the waiver authority applied to the whole of § 117. See 144 CONG. REC. 27,325 (1998).
34 28 U.S.C. § 1610(f)(1)(A).
immediately executed the waiver.35 The President explained his reasons in the
signing statement for the bill as follows:
I am concerned about section 117 of the Treasury/General Government
appropriations section of the act, which amends the Foreign Sovereign
Immunities Act. If this section were to result in attachment and execution against
foreign embassy properties, it would encroach on my authority under the
Constitution to “receive Ambassadors and other public ministers.” Moreover,
if applied to foreign diplomatic or consular property, section 117 would place the
United States in breach of its international treaty obligations. It would put at risk
the protection we enjoy at every embassy and consulate throughout the world by
eroding the principle that diplomatic property must be protected regardless of
bilateral relations. Absent my authority to waive section 117’s attachment
provision, it would also effectively eliminate use of blocked assets of terrorist
States in the national security interests of the United States, including denying
an important source of leverage. In addition, section 117 could seriously impair
our ability to enter into global claims settlements that are fair to all U.S.
claimants, and could result in U.S. taxpayer liability in the event of a contrary
claims tribunal judgment. To the extent possible, I shall construe section 117 in
a manner consistent with my constitutional authority and with U.S. international
legal obligations, and for the above reasons, I have exercised the waiver authority36
in the national security interest of the United States.
106th Congress: Enactment of § 2002 of the Victims of
Trafficking and Violence Protection Act of 2000 (VTVPA)
President Clinton’s exercise of the waiver authority conferred by section 117 of
the FY1999 Treasury Department appropriations act blocked those with default
judgments against Cuba and Iran from attaching the diplomatic property and frozen
35 Presidential Determination 99-1 (October 21, 1998), reprinted in 34 WEEKLY COMP.
PRES. DOC. 2088 (October 26, 1998). On the day the President exercised the waiver
authority, the White House Office of the Press Secretary issued the following explanatory
...[T]he struggle to defeat terrorism would be weakened, not strengthened, by putting into
effect a provision of the Omnibus Appropriations Act for FY 1999. It would permit
individuals who win court judgments against nations on the State Department’s terrorist
list to attach embassies and certain other properties of foreign nations, despite U.S. laws
and treaty obligations barring such attachment.
The new law allows the President to waive the provision in the national security interest
of the United States. President Clinton has signed the bill and, in the interests of
protecting America’s security, has exercised the waiver authority. If the U.S. permitted
attachment of diplomatic properties, then other countries could retaliate, placing our
embassies and citizens overseas at grave risk. Our ability to use foreign properties as
leverage in foreign policy disputes would also be undermined.
Statement by the Press Secretary (October 21, 1998).
36 Statement by President William J. Clinton Upon Signing H.R. 4328, 34 WEEKLY COMP.
PRES. DOC. 2108 (November 2, 1998), reprinted in 1998 U.S.C.C.A.N. 576.
assets of those States to satisfy the judgments.37 In response, various Members
during the 106th Congress pressed for additional amendments to the FSIA that would
override the President’s waiver of section 117 and allow the judgments against
terrorist States to be satisfied out of the States’ frozen assets. Congress held hearings
to consider the Justice for Victims of Terrorism Act,38 which was adopted as revised
by the House and reported in the Senate. The Clinton Administration opposed the
measure, and it was not enacted into law. Instead, negotiations with the
Administration led by Senators Lautenberg and Mack resulted in the enactment of
section 2002 of the Victims of Trafficking and Violence Against Women Act of
2000,39 which created an alternative compensation system for some judgment
holders. It mandated the payment of a portion of the damages awarded in the
Alejandre judgment out of Cuba’s frozen assets and a portion of ten designated
judgments against Iran out of U.S. appropriated funds “not otherwise obligated.” In
the meantime, additional and substantial default judgments continued to be handed
down in other suits against Iran40; and a number of new suits against terrorist States
Like § 117 of the Fiscal 1999 Appropriations Act for the Treasury Department,
the Justice for Victims of Terrorism Act would have amended the FSIA to allow the
attachment of all of the assets of a terrorist State, including its blocked assets, its
diplomatic and consular properties, and moneys due from or payable by the United
States. To that end it would have repealed the waiver authority granted in § 117 and
37 The parties in both the Alejandre and the Flatow suits sought to persuade the courts that
the President’s waiver authority did not extend to the diplomatic properties and blocked
assets of Cuba and Iran, but those efforts ultimately proved unavailing. See Alejandre v.
Republic of Cuba, 42 F. Supp. 2d 1317 (S.D. Fla. 1999) (Presidential waiver authority held
to apply only to the requirement that the Departments of State and Treasury assist judgment
creditors and not to the provision subjecting blocked assets, including diplomatic property,
to attachment). This decision was eventually reversed on other grounds by the U.S. Court
of Appeals for the Eleventh Circuit — Alejandre v. Telefonica Larga Distancia de Puertoth
Rico, 183 F.3d 1277 (11 Cir. 1999). A decision by a federal district court in the Flatow
litigation construed the President’s waiver authority broadly. See Flatow v. Islamic
Republic of Iran, 76 F. Supp. 2d 16 (D.D.C. 1999); see also Jacobsen v. Oliver, 451 F. Supp.
2d 181, 189 (D.D.C. 2006) (waiver was effective for subsection (b), which would have
authorized the award of punitive damages against foreign States).
38 See Hearing Before the Senate Judiciary Committee on Terrorism: Victims’ Access to
Terrorists’ Assets, 106th Congress, 1st Sess. (October 27, 1999) and Hearing Before the
Subcommittee on Immigration and Claims of the House Judiciary Committee on H.R. 3485,th
the “Justice for Victims of Terrorists Act,” 106 Congress, 2d Sess. (April 13, 2000).
39 P.L. 106-386, § 2002 (October 28, 2000), 114 Stat. 1541.
40 See, e.g., Anderson v. Islamic Republic of Iran, 90 F. Supp. 2d 107 (D.D.C. March 24,
2000) ($41.2 million in compensatory damages and $300 million in punitive damages
awarded to a journalist who was kidnaped and held in deplorable conditions for seven years
by Hezbollah, which the court found to be funded by Iran) and Eisenfeld v. Islamic Republic
of Iran, 172 F. Supp. 2d 1 (D.D.C. July 11, 2000) ($24.7 million in compensatory damages
and $300 million in punitive damages awarded to the families of two young Americans who
were killed when a bomb placed by Hamas operatives exploded on the bus on which they
were riding in Israel).
41 See Murphy, supra note 26.
allowed the President to waive the authorization to attach assets only with respect to
the premises of a foreign diplomatic or consular mission.
In hearings on the measure, the Clinton Administration was repeatedly criticized
for its opposition to the efforts of victims of terrorism to collect on the judgments
they had obtained. Senator Mack, cosponsor of the Justice for Victims of Terrorism
Act in the Senate, stated:
... Mr. Chairman, the President made promises to the families, encouraged them
to seek justice, calling their efforts brave and courageous. He pledged to fight
terrorism and signed several laws supporting the rights of victims to take
terrorists to court. But ultimately, he has chosen to protect terrorist assets over
the rights of American citizens seeking justice. This is simply not what America
stands for. Victims’ families must know that the U.S. Government stands with42
them in actions, as well as words.
Several of the victims’ relatives also made statements criticizing the Administration’s43
Treasury Deputy Secretary Stuart E. Eizenstat, Defense Department Under
Secretary for Policy Walter Slocombe, and State Department Under Secretary for44
Policy Thomas Pickering responded for the Administration in a joint statement.
While expressing support for the goal of “finding fair and just compensation for [the]
grievous losses and unimaginable experiences” of the victims of terrorism, they said
that the Victims of Terrorism Act was “fundamentally flawed” and had “five
principal negative effects,” as follows:
First, blocking of assets of terrorist States is one of the most significant economic
sanctions tools available to the President. The proposed legislation would
undermine the President’s ability to combat international terrorism and other
threats to national security by permitting the wholesale attachment of blocked
property, thereby depleting the pool of blocked assets and depriving the U.S. of
a source of leverage in ongoing and office (sic) sanctions programs, such as was
used to gain the release of our citizens held hostage in Iran in 1981 or in gaining
information about POW’s and MIA’s as part of the normalization process with
Second, it would cause the U.S. to violate its international treaty obligations to
protect and respect the immunity of diplomatic and consular property of other
42 Terrorism: Victims’ Access to Terrorist Assets — Hearing Before the Senate Committee
on the Judiciary, 106th Cong., 1st Sess. (October 27, 1999) (S. 106-941) (statement of Sen.
Mack); Justice for Victims of Terrorism Act: Hearing Before the Subcommittee onth
Immigration and Claims of the House Committee on the Judiciary, 106 Cong., 2d Sess.
(April 13, 2000) (statement of Representative McCollum) (expressing concern “that the
President has exercised what was intended to be a narrow national security waiver too
broadly, and stating that “[r]ather than waging a war on terrorism, it appears the
administration is fighting the victims of terrorism”).
43 See id. (statements of Stephen Flatow and Maggie Alejandre Khuly).
44 Id. (statement submitted by Treasury Deputy Secretary Eizenstat, Defense Under
Secretary for Policy Slocombe, and State Under Secretary Pickering). Deputy Secretary
Eizenstat had given similar testimony in the Senate hearing as well.
nations, and would put our own diplomatic and consular property around the
world at risk of copycat attachment, with all that such implies for the ability of
the United States to conduct diplomatic and consular relations and protect
personnel and facilities.
Third, it would create a race to the courthouse benefiting one small, though
deserving, group of Americans over a far larger group of deserving Americans.
For example, in the case of Cuba, many Americans have waited decades to be
compensated for both the loss of property and the loss of the lives of their loved
ones. This would leave no assets for their claims and others that may follow.
Even with regard to current judgment holders, it would result in their competing
for the same limited pool of assets, which would be exhausted very quickly and
might not be sufficient to satisfy all judgments.
Fourth, it would breach the long-standing principle that the United States
Government has sovereign immunity from attachment, thereby preventing the
U.S. Government from making good on its debts and international obligations
and potentially causing the U.S. taxpayer to incur substantial financial liability,
rather than achieving the stated goal of forcing Iran to bear the burden of paying
these judgments. The Congressional Budget Office (“CBO”) has recognized this
by scoring the legislation at $420 million, the bulk of which is associated with
the Foreign Military Sales (“FMS”) Trust Fund. Such a waiver of sovereign
immunity would expose the Trust Fund to writs of attachment, which would
inject an unprecedented and major element of uncertainty and unreliability into
the FMS program by creating an exception to the processes and principles under
which the program operates.
Fifth, it would direct courts to ignore the separate legal status of States and their
agencies and instrumentalities, overturning Supreme Court precedent and basic
principles of corporate law and international practice by making state
majority-owned corporations liable for the debts of the state and establishing a
dangerous precedent for government owned enterprises like the U.S. Overseas
Private Investment Corporation (“OPIC”).
Notwithstanding these contentions, the Senate and House Judiciary Committees
reported, and the House passed, a slightly amended version of the Justice for Victims
of Terrorism Act. The bill in the Senate was reported without a committee report.
The House Judiciary Committee stated in its report:
The President’s continued use of his waiver power has frustrated the legitimate
rights of victims of terrorism, and thus this legislation is required. While still
allowing the President to block the attachment of embassies and necessary
operating assets, H.R. 3485 would amend the law to specifically deny blockage
of attachment of proceeds from any property which has been used for any non-
diplomatic purpose or proceeds from any asset which is sold or transferred for45
value to a third party.
45 H.Rept. 106-733, at 4 (2000). As initially reported, H.R. 3485 also amended the “PayGo”
provision of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. §
902(d)) to bar the Office of Management and Budget from estimating any changes in direct
spending outlays and receipts that would result from enactment of the bill. Because this
provision apparently had not been discussed in committee, the committee subsequently
deleted it before the bill went to the floor. See H.Rept. 106-733 (Part 2) (2000).
The House passed the bill by voice vote under a suspension of the rules.46
The Clinton Administration persisted in opposing the bill, however, and that led
to extensive negotiations between the Administration and interested Members of
Congress. Ultimately, these negotiations led to the addition to an unrelated bill
pending in conference of a limited alternative compensation scheme, which was
signed into law by President Clinton on October 28, 2000.47 Section 2002 of the
Victims of Trafficking and Violence Protection Act of 2000 directed the Secretary
of the Treasury to pay portions of any judgments against Cuba and Iran that had been
handed down by July 20, 2002, or that would be handed down in any suits that had
been filed on one of five named dates on or before July 27, 2000. The judgments that
had been handed down by July 20, 2000, were the Alejandre, Flatow, Cicippio,
Anderson and Eisenfeld cases. Six suits had been filed against Iran on the five dates
specified in the statute — February 17, 1999; June 7, 1999; January 28, 2000; March
15, 2000; and July 27, 2000 — and all have subsequently been decided.48 (See
Appendix A for a full list of the cases.)
46 146 CONG. REC. H6938 (daily ed. July 25, 2000).
47 P.L. 106-386, § 2002(f)(1) (October 28, 2000); 114 Stat. 1543. The statute primarily
addresses the issue of international trafficking in women and children.
48 These six cases are as follows: Higgins v. Islamic Republic of Iran, No. 1:99CV00377
(D.D.C. 2000) ($55.4 million in compensatory damages and $300 million in punitive
damages awarded to the wife of a Marine colonel who was kidnaped and subsequently
hanged by Hezbollah while serving as part of the United Nations Truce Supervision
Organization in Lebanon); Sutherland v. Islamic Republic of Iran, 151 F. Supp. 2d 27
(D.D.C. 2001) ($46.5 million in compensatory damages and $300 million in punitive
damages awarded to a professor (and his family) who was kidnaped while teaching at the
American University in Beirut and subsequently imprisoned in “horrific and inhumane
conditions” for six and a half years by Hezbollah); Jenco v. Islamic Republic of Iran, 154
F. Supp. 2d 27 (D.D.C. 2001) ($14.6 million in compensatory damages and $300 million in
punitive damages awarded to the estate and family of a priest who was kidnaped while
working in Beirut as the Director of Catholic Relief Services and imprisoned in terrible
conditions for a year and a half by Hezbollah); Polhill v. Islamic Republic of Iran, 2001
U.S.Dist.LEXIS 15322 (D.D.C. 2001) ($31.5 million in compensatory damages and $300
million in punitive damages awarded to the family of an American citizen who was kidnaped
while working as a professor in Beirut and held in “deplorable” conditions for more than
three years by Hezbollah); Wagner v. Islamic Republic of Iran, 172 F. Supp. 2d 128 (D.D.C.
2001) ($16.3 million in compensatory damages and $300 million in punitive damages
awarded to the estate and family of a petty officer in the U.S. Navy who was killed by a car
bomb driven by a Hezbollah suicide bomber); and Stethem v. Islamic Republic of Iran, 201
F. Supp. 2d 78 (D.D.C. 2002) ($21.2 million in compensatory damages awarded to the
family of a serviceman who was tortured and killed during the hijacking of a TWA plane
in 1985, $8 million awarded in compensatory damages to six servicemen and their families
for their torture and detention during and after the same hijacking, and $300 million in
punitive damages awarded against Iran for its recruitment, training, and financing of
Hezbollah, the terrorist group the court found to be responsible for the hijacking). It might
be noted that in Stethem only the award to the Stethem family was originally covered by
§ 2002 of the Victims of Trafficking Act; the second suit filed by the six servicemen and
their families — Carlson v. Islamic Republic of Iran — which was consolidated with
Stethem was not covered by § 2002 but was later added to the list of compensable suits by
P.L. 107-228 (September 30, 2002).
Section 2002 gave the claimants in these eleven suits three options:
!First, they could obtain from the Treasury Department 110 percent
of the compensatory damages awarded in their judgments, plus
interest, if they agreed to relinquish all rights to collect further
compensatory and punitive damages;
!Second, they could receive 100 percent of the compensatory
damages awarded in their judgments, plus interest, if they agreed to
relinquish (a) all rights to further compensatory damages awarded by
U.S. courts and (b) all rights to attach certain categories of property
in satisfaction of their judgments for punitive damages, including
Iran’s diplomatic and consular property as well as property that is at
issue in claims against the United States before an international
tribunal. The property in the latter category included Iran’s Foreign
Military Sales (FMS) trust fund, which remains at issue in a case
before the Iran-U.S. Claims Tribunal.
!Third, claimants could decline to obtain any payments from the
Treasury Department and continue to pursue satisfaction of their
judgments as best they could.49
To pay a portion of the judgment against Cuba in the Alejandre case, the statute
directed that the President vest and liquidate Cuban government properties that have
been frozen under TWEA. For the ten designated cases against Iran, § 2002 provided
for payment out of U.S. funds, as follows:
!The statute directed the Secretary of the Treasury to use any
proceeds that have accrued from the rental of Iranian diplomatic and
consular property in the United States plus appropriated funds not
otherwise obligated (meaning U.S. funds) up to the amount
contained in Iran’s Foreign Military Sales account. The Foreign
Military Sales (FMS) Fund50 had, as of 2000, about $377 million in
funds. The account originally contained funds deposited by Iran to
pay for military equipment and services during the reign of the Shah.
However, Congress also provided funds for the account in order to
continue to pay contractors for goods and services after Iran
terminated contracts under the FMS program.51 Disposition of
military equipment procured for Iran through the FMS fund and the
money remaining in the FMS account is an unresolved issue
49 See Murphy, supra note 26, at 138.
50 A Foreign Military Sales Fund is a Treasury holding account established to facilitate the
sale of military items to foreign countries or international organizations, pursuant to the
Arms Control Export Act, 22 U.S.C. § 2751 et seq. Foreign purchasers place monies in the
fund under individual sub-accounts from which the Department of Defense pays for military
equipment and services provided to the purchaser by DoD or private suppliers.
51 Congress provided $1.353 billion in 1979 to pay for four DDG-993 destroyers Iran had
ordered but that became available for the U.S. Navy after the revolution in Iran led to the
termination of the contract. P.L. 96-38 (July 25, 1979), 93 Stat. 97, 99; S.Rept. 96-224 at
between the United States and Iran before the U.S.-Iran Claims
Tribunal, where Iran has filed claims seeking billions of dollars
primarily for alleged overcharges and nondeliveries of military
equipment, as well as for allegedly unjustified charges billed to Iran
for terminating its FMS program and the associated contracts. The
United States has filed counterclaims to recover amounts it claims
Iran owes on the contracts.
!For payments paid out of U.S. funds, § 2002 stated that the United
States would be subrogated to the rights of the persons paid
(meaning that the United States would be entitled to pursue their
right to payment of the damage awards from Iran).
!Section 2002 further provided that the United States “shall pursue”
these subrogated rights as claims or offsets to any claims or awards
that Iran may have against the United States; and it bars the payment
or release of any funds to Iran from frozen assets or from the Foreign
Military Sales Fund until these subrogated claims have been
Section 2002 further expressed the “sense of the Congress” that relations
between the United States and Iran should not be normalized until these subrogated
claims have been “dealt with to the satisfaction of the United States.” It also
“reaffirmed the President’s statutory authority to manage and ... vest foreign assets
located in the United States for the purpose ... of assisting and, where appropriate,
making payments to victims of terrorism.” In addition, § 2002 modified one
provision of § 117 of the Treasury Department appropriations act for fiscal 1999 by
changing the mandate that the State and Treasury Departments “shall” assist those
who have obtained judgments against terrorist States in locating the assets of those
States to the more permissive “should make every effort” to assist such judgment
Finally, § 2002 modified the waiver authority that the President had been given
in § 117. It repealed that subsection and instead provided that “[t]he President may
waive any provision of paragraph (1) in the interest of national security.” (Paragraph
(1) was the subsection that allowed the frozen assets of a terrorist State, including its
diplomatic property, to be attached in satisfaction of a judgment against that State.)52
Immediately after signing the legislation into law on October 28, 2000,
President Clinton exercised the substitute waiver authority granted by § 2002 and
waived “subsection (f)(1) of section 1610 of title 28, United States Code, in the
interest of national security.”53 Thus, except to the extent § 2002 allowed the blocked
assets of Cuba to be used to satisfy a portion of the Alejandre judgment, it did not
52 Paragraph (1) is codified at 28 U.S.C. § 1610(f)(1) and the modified waiver authority is
codified at 28 U.S.C. § 1610(f)(3). It applies to “property with respect to which financial
transactions are prohibited or regulated pursuant to [IEEPA, TWEA, or any other law or
53 Presidential Determination No. 2001-03 (October 28, 2000); 65 Fed. Reg. 66,483.
eliminate the bar to the attachment of the diplomatic property and the blocked assets
of terrorist States to satisfy judgments against those States.54
In November and December 2000, the Office of Foreign Assets Control in the
Department of the Treasury issued a notice detailing the procedures governing
application for payment by those in the eleven designated cases who might want to
obtain the partial payment of their judgments afforded by § 2002.55 All of the
claimants in the designated suits chose to obtain such compensation.
In early 2001 the federal government liquidated $96.7 million of the $193.5
million of Cuban assets that had previously been blocked and paid that amount to the
claimants in the Alejandre suit and their attorneys.56 The claimants in the ten
designated cases against Iran variously chose to receive either 100 percent or 110
percent of their compensatory damages awards; and they ultimately received more
than $380 million in compensation out of U.S. funds. (See Appendix A for a listing
of the cases, the payments made, and the option chosen.)
54 While the statute itself made no express mention of how the waiver was meant to be
executed, the report of the House-Senate conference committee on the “Victims of
Trafficking” bill expressed an intent that the waiver authority of § 2002 be exercised only
on a case-by-case basis, as follows:
Subsection 1(f) of this bill repeals the waiver authority granted in Section 117 of the
Treasury and General Government Appropriations Act for fiscal year 1999, replacing it
with a clearer but narrower waiver authority in the underlying statute. The Committee
hopes clarity in the legislative history and intent of subsection 1(f), in the context of the
section as a whole, will ensure appropriate application of the new waiver authority.
The Committee’s intent is that the President will review each case when the court issues
a final judgement to determine whether to use the national security waiver, whether to
help the plaintiffs collect from a foreign state’s non-blocked assets in the United States,
whether to allow the courts to attach and execute against blocked assets, or whether to use
existing authorities to vest and pay those assets as damages to the victims of terrorism.
When a future President does make a decision whether to invoke the waiver, he should
consider seriously whether the national security standard for a waiver has been met. In
enacting this legislation, Congress is expressing the view that the attachment and
execution of frozen assets to enforce judgements in cases under the Anti-Terrorism Act
of 1996 is not by itself contrary to the national security interest. Indeed, in the view of the
Committee, it is generally in the national security interest of the United States to make
foreign state sponsors of terrorism pay court-awarded damages to American victims, so
neither the Foreign Sovereign Immunities Act nor any other law will stand in the way of
justice. Thus, in the view of the committee the waiver authority should not be exercised
in a routine or blanket manner, but only where U.S. national security interests would be
implicated in taking action against particular blocked assets or where alternative recourse
— such as vesting and paying those assets — may be preferable to court attachment.
H.Rept. 106-939, at 117-118 (2000).
55 65 Fed. Reg. 70,382 (November 22, 2000) and 65 Fed. Reg. 78,533 (December 15, 2000).
56 The original judgment had been rendered in Alejandre v. Republic of Cuba, 996 F. Supp.
107th Congress: Additional Cases Added to § 2002
and Attachment of Assets Allowed in Other Cases
Subsequent to the enactment of § 2002 of the Victims of Trafficking statute in
late 2000, the courts handed down additional default judgments in suits against
terrorist States under the FSIA exception. As noted above, six of these additional
judgments were covered by the compensation scheme set forth in § 2002 because the
suits had been filed on one of the five dates on or prior to July 27, 2000 specified in
the statute.57 But other default judgments,58 as well as additional cases that were filed
and remained pending, were not covered by § 2002. As a consequence, pressure for
57 See the six cases summarized supra, note 48.
58 Other default judgments against Iran that were handed down after the enactment of
§ 2002 on October 28, 2000, and prior to the adjournment of the 107th Congress in late
2002, but that were not covered by § 2002, included Elahi v. Islamic Republic of Iran, 124
F. Supp. 2d 97 (D.D.C. 2000) ($11.7 million in compensatory damages and $300 million in
punitive damages awarded to the administrator of the estate of an Iranian dissident and
naturalized U.S. citizen killed by gunshot in Paris by the Iranian Ministry of Information and
Security); Mousa v. Islamic Republic of Iran, 238 F. Supp. 2d 1 (D.D.C. 2001) ($12 million
in compensatory damages and $120 million in punitive damages awarded to woman who
suffered severe and long-lasting injuries from a suicide bombing of a bus in Jerusalem
carried out at the instigation of Hamas, an entity the court found to be supported by Iran);
Hegna v. Islamic Republic of Iran, No. 1:00CV00716 (D.D.C. 2002) ($42 million in
damages awarded to the family of a U.S. Agency for International Development officer who
was killed by Hezbollah militants during a hijacking of a Kuwaiti Airlines flight in 1984);
Weinstein v. Islamic Republic of Iran, 184 F. Supp. 2d 13 (D.D.C. 2002) ($33 million in
compensatory damages and $150 million in punitive damages awarded to the family and
estate of a person who was severely injured in a bus bombing in Jerusalem carried out by
Hamas, which the court found to be funded by Iran, and who subsequently died from those
injuries); Cronin v. Islamic Republic of Iran, 238 F. Supp. 2d 222 (D.D.C. 2002) ($1.2
million in compensatory damages and $300 million in punitive damages awarded to an
individual who, while he was a graduate student in Lebanon in 1984, was kidnaped and
tortured for four days by Hezbollah and two other paramilitary groups which the court found
to have been organized, funded, trained, and controlled by Iran); and Surette v. Islamic
Republic of Iran, 231 F. Supp. 2d 260 (D.D.C. 2002) ($18.96 million in compensatory
damages and $300 million in punitive damages awarded to the widow and sister of CIA
agent William Buckley who was kidnaped in Beirut and tortured for 14 months by the
Islamic Jihad, an entity the court found to be organized and funded by Iran, and who
ultimately died while in captivity). In addition, two default judgments were handed down
against Iraq — Daliberti v. Republic of Iraq, 146 F. Supp. 2d 19 (D.D.C. 2001) ($12.8
million in compensatory damages awarded to four U.S. citizens who were detained and
tortured for varying periods of time between 1992 and 1995 by Iraq and $6 million awarded
to their spouses) and Hill v. Republic of Iraq, 175 F. Supp. 2d 36 (D.D.C. 2001) ($9 million
in compensatory damages against Iraq and Saddam Hussein and $300 million in punitive
damages against Saddam Hussein personally awarded to twelve U.S. citizens who were held
in hostage status by Iraq after its invasion of Kuwait in 1990). See infra note 134 (definition
of “hostage status”). In the Hill case, the court subsequently found that an additional 168
plaintiffs had established their right to relief for being held hostage by Iraq; and the court
awarded them approximately $85 million in compensatory damages. See Hill v. Republic
of Iraq, 2003 U.S. Dist. LEXIS 3725 (D.D.C. 2003).
finding some means to compensate the additional claimants continued to grow.59 The
(1) Directive to develop a comprehensive compensation scheme
(P.L. 107-77). In the Act Making Appropriations for the Departments of
Commerce, Justice, and State, the Judiciary, and Related Agencies for the Fiscal60
Year Ending September 30, 2002, Congress in November 2001 directed President
Bush to submit, no later than the time he submitted the proposed budget for FY2003,
a legislative proposal to establish a comprehensive program to ensure fair,
equitable, and prompt compensation for all United States victims of international
terrorism (or relatives of deceased United States victims of international61
terrorism) that occurred or occurs on or after November 1, 1979.
That directive had not been part of either the House or Senate-passed versions of
H.R. 2500. But it was added in lieu of an amendment sponsored by Senator Hollings
that the Senate had adopted, without debate, which would have authorized partial
payment of the judgments in five additional cases (including the Roeder case,
infra).62 In explaining the conference substitute for that provision, the conference
Objections from all quarters have been repeatedly raised against the current ad
hoc approach to compensation for victims of international terrorism. Objections
and concerns, however, will no longer suffice. It is imperative that the Secretary
of State, in coordination with the Departments of Justice and Treasury and other
relevant agencies, develop a legislative proposal that will provide fair and prompt
compensation to all U.S. victims of international terrorism. A compensation
system already is in place for the victims of the September 11 terrorist attacks;63
a similar system should be available to victims of international terrorism.
In signing the measure into law, President Bush cited the directive regarding
submission of a comprehensive plan and stated that “I will apply this provision
59 See Shawn Zeller, Hoping to Thaw Those Frozen Funds, 33 NAT’L J. 3368-69 (October
60 P.L. 107-77 (November 28, 2001). The text of the act and the conference report (H.Rept.
61 Id. § 626, reprinted at 147 CONG. REC. H8001 (daily ed. September 13, 2001).
62 See 147 CONG. REC. S9365 (daily ed. September 13, 2001). The Hollings amendment
generally followed the scheme of § 2002 by specifying the filing dates of four of the five
additional cases rather than identifying them by name. The specified dates were May 17,
1996; May 7, 1997; October 22, 1999; and December 15, 1999. It identified the Roeder case
only by its filing number in the federal district court in the District of Columbia — Case
Number 1:00CV03110 (ESG). For the text of the amendment, see 147 CONG. REC. S9398-
63 H.Rept. 107-278 (2001), reprinted at 147 CONG. REC. H 8033 (daily ed. November 9,
consistent with my constitutional responsibilities.”64 No such plan was put forward
in the second session of the 107th Congress.
(2) Coverage of additional cases under § 2002 (P.L. 107-228). On
September 30, 2002, President Bush signed into law a measure — the Foreign
Relations Authorization Act for Fiscal 2003 — that added cases filed against Iran on65
June 6, 2000, and January 16, 2002 to those that can be compensated under § 2002.
The first case — Carlson v. The Islamic Republic of Iran66 — was by six Navy divers
who were on board a TWA airliner that was hijacked in 1985 and who were
subsequently imprisoned and tortured by Lebanese Shiite terrorists. That suit had
been filed separately from a suit by the family of Robert Stethem, who was murdered
in the course of the same hijacking — Stethem v. The Islamic Republic of Iran.67 But
the two suits had been consolidated for trial, and the court decided the cases
together.68 Stethem’s suit had been included as one of the cases that was
compensable under § 2002 as originally enacted, but the companion suit by the Navy
divers had not been included. The amendment enacted into law as part of the foreign
relations authorization bill had been adopted by the House on May 16, 2001, by voice
vote to rectify what its sponsor termed this “inadvertent error.”69 The second case,
specified by its filing date of January 16, 2002, was added to the measure by the
conference committee and was identified by the Office of Foreign Assets Control as
the case of Kapar v. Islamic Republic of Iran.
(3) Attachment of frozen assets authorized (P.L. 107-297). On
November 26, 2002, President Bush signed the Terrorism Risk Insurance Act (TRIA)
into law.70 Section 201 of TRIA overrode long-standing objections by the Clinton
and Bush Administrations to make the frozen assets of terrorist States available to
satisfy judgments for compensatory damages against such States (and organizations
and persons) as follows:
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
64 Office of the White House Press Secretary, “President Signs Commerce Appropriations
Bill: Statement by the President on H.R. 2500” (November 28, 2001), available on the White
65 P.L. 107-228, § 686 (September 30, 2002). Various members of Congress had previously
introduced bills to add suits to the list compensable under § 2002. See, e.g., H.R. 4647th
66 Civil Action No. 00-1309 (D.D.C., filed June 6, 2000).
67 Civil Action No. 00-0159 (D.D.C., filed January 28, 2000).
68 Stethem v. The Islamic Republic of Iran and Carlson v. The Islamic Republic of Iran, 201
F. Supp. 2d 78 (D.D.C. 2002).
69 As with the other suits included within § 2002, the Carlson suit is not specified by name
but merely by its filing date of June 6, 2000. The amendment, sponsored by Representative
Manzullo, was part of a group of amendments adopted by voice vote on May 16, 2001. See
70 P.L. 107-297 (November 26, 2002), 116 Stat. 2322.
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 any71
compensatory damages for which such terrorist party has been adjudged liable.
Subsection (b) of § 201, in turn, narrowed the waiver authority previously afforded
the President on this subject and permits the President to waive this provision “in the
national security interest” only with respect to “property subject to the Vienna
Convention on Diplomatic Relations or the Vienna Convention on Consular
In addition, § 201 of P.L. 107-297 amended § 2002 of the Victims of
Trafficking Act with respect to suits against Iran:
!It added to the list of suits against Iran that are compensable under
§ 2002, without further identification, all those that were filed
before October 28, 2000.
!It made 90 percent of the amount remaining in the § 2002 fund
(about $15.7 million) available to pay the compensatory damages
awarded in any judgment rendered in the cases previously added by
P.L. 107-228 and by this statute which had been entered as of the
date of this statute’s enactment (November 26, 2002) and provided
that, if the total amount of damages awarded exceeded the amount
available, each claimant is to receive a proportionate amount.72
!It set aside the remaining 10 percent of the § 2002 fund for
compensation under the same formula of the final judgment entered
in the case filed against Iran on January16, 2002 (Kapar v. Islamic
Republic of Iran).
71 The term “blocked asset” is defined in § 201(d) of TRIA to mean
(A) any asset seized or frozen by the United States under [TWEA or IEEPA]; 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 [IEEPA] 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.
72 The Director, Office of Foreign Assets Control determined that the total compensable
awards exceeded 90 percent of the available funds as of June 3, 2003, and directed his office
to propose an appropriate pro rata distribution for Iran-related applications that were
received by April 7, 2003. See Memorandum, Department of the Treasury, Determination
of Insufficiency of Funds Victims of Trafficking and Violence Protection Act of 2000,
Public Law No. 106-386, as Amended (June 3, 2003), available at [http://www.treasury.gov/
offices/enforcement/ofac/legal/notices/insf_funds.pdf]. All judgment creditors of Iran
eligible for compensation under § 2002 have received their payments.
!It provided that persons who receive less than 100 percent of the
compensatory damages awarded in their judgments against Iran
under the foregoing scheme do not have to relinquish their right to
obtain additional compensatory damages, as was required of those
previously compensated under § 2002, but only to relinquish their
right to obtain punitive damages.
Bush Administration’s Proposed Compensation Alternative
During the 108th Congress, Senator Lugar (R-IN) introduced an Administration
proposal that would have established an administrative procedure to provide
compensation to victims of international terrorism as an alternative to suits under the
terrorist State exception to the FSIA. S. 1275 would have amended § 201 of the
Terrorism Risk Insurance Act to provide that claimants who obtain judgments against
terrorist States after the date of the bill’s introduction could no longer collect on the
compensatory damages portions of those judgments out of the States’ blocked assets.
As an alternative, the bill would have created a new compensation scheme called the
“Benefits for Victims of International Terrorism Program.” Administered by the
State Department, the program would have been able to authorize the payment of up
to $262,000 to those who have been killed, injured, or held hostage by an act of
international terrorism.73 A person who accepted benefits under the program would
have been barred from bringing or maintaining a suit against a terrorist State for the
In a hearing on the bill by the Senate Committee on Foreign Relations on July
17, 2003,74 William Taft, then State Department Legal Adviser, asserted that “[t]he
current litigation-based system of compensation is inequitable, unpredictable,
occasionally costly to the U.S. taxpayer, and damaging to foreign policy and national
security goals of this country.” Stuart Eizenstat, now in private practice but formerly
the Clinton Administration’s point man on this issue, claimed that the amount of
compensation that would be provided under the bill was insufficient to make the
scheme a viable alternative to litigation. Allan Gerson, a professor and trial lawyer
involved in suits under the FSIA exception, charged that the proposal would deny
plaintiffs their day in court and do nothing to hold terrorist States accountable for
their actions. No further action was taken on the bill.
73 The proposal used as its standard the amount available to the families of public safety
officers who are killed in the line of duty under subpart 1 of part L of title I of the Omnibus
Crime Control and Safe Streets Act of 1968, 42 U.S.C. §§ 3796 et seq. That act originally
set the death benefit at $50,000; in 2001 Congress increased the death benefit to $250,000,
adjusted annually for inflation. See P.L. 107-56, § 613(a) (October 26, 2001); 115 Stat. 369.
74 Benefits for U.S. Victims of International Terrorism: Hearing Before the Senate
Committee on Foreign Relations, 108th Cong. (July 17, 2003).
The Search for a Cause of Action:
Cicippio-Puleo v. Iran
After Congress passed the Flatow Amendment in 1996, providing for a cause
of action against foreign officials for terrorist conduct, the judge in the Flatow case
held Iran itself liable under a theory of respondeat superior, and awarded75
compensatory as well as punitive damages. Many trial courts followed the Flatow
precedent, awarding both compensatory and punitive damages against a foreign State
despite the textual limitations in the FSIA exception with respect to punitive
damages.76 However, the Court of Appeals for the District of Columbia held in 2004
that the amendment does not provide a cause of action against terrorist States
themselves,77 including governmental agencies and separate commercial “agencies78
and instrumentalities” under the FSIA. Moreover, although the Flatow Amendment
created a cause of action against an “official, employee, or agent of a [designated
terrorist State] while acting within the scope of his or her office, employment, or
agency,” the court held that it did not create a cause of action against foreign officials79
in their official capacities.
The Cicippio-Puleo case involved claims for damages brought by the adult
children and siblings of Joseph Cicippio, a hostage victim who had previously won
a $30 million default judgment against Iran for financing the Hezbollah terrorists
who kidnapped him in Beirut and held him hostage there for some five years.80 The
children and siblings had not participated in the original lawsuit, but filed suit in
2001 for intentional infliction of emotional distress and the loss of solatium they
suffered as a result of Mr. Cicippio’s ordeal. The district court judge dismissed the
case for failure to state a claim upon which relief could be granted, holding that the
prevailing common law rule governing third party claims for outrageous conduct
75 Flatow v. Islamic Republic of Iran, 999 F. Supp. 1, 26 (D.D.C. 1998).
76 Punitive damages were previously available only with respect to agencies and
instrumentalities of foreign governments. The FSIA provision for liability and damages is
As to any claim for relief with respect to which a foreign state is not entitled to immunity
under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same
manner and to the same extent as a private individual under like circumstances; but a
foreign state except for an agency or instrumentality thereof shall not be liable for punitive
damages; if, however, in any case wherein death was caused, the law of the place where
the action or omission occurred provides, or has been construed to provide, for damages
only punitive in nature, the foreign state shall be liable for actual or compensatory
damages measured by the pecuniary injuries resulting from such death which were
incurred by the persons for whose benefit the action was brought.
77 Cicippio-Puleo v. Iran, 353 F.3d 1024 (D.C. Cir. 2004), cert. denied, 544 U.S. 1010
78 See 28 U.S.C. § 1603(b) (defining “agencies and instrumentalities”).
79 353 F.3d at1034.
80 Cicippio v. Islamic Republic of Iran, 18 F. Supp. 2d 62 (D.D.C. 1998).
causing severe emotional distress prevented plaintiffs’ recovery.81 The appellate
court requested a briefing from the U.S. government explaining its interpretation of
the relevant statutes, and, at the government’s urging,82 held that neither the FSIA
exception nor the Flatow Amendment created a cause of action against a foreign
State. The court remanded the case to the district court to permit the plaintiffs to
amend their complaint to state a valid cause of action. On remand, the judge awarded
the plaintiffs $91 million in compensatory damages for intentional infliction of
emotional distress under Pennsylvania law.83
With respect to lawsuits against individual officials and employees of foreign
governments, the court agreed with the U.S. government that “insofar as the Flatow
Amendment creates a private right of action against officials, employees, and agents
of foreign states, the cause of action is limited to claims against those officials in
their individual, as opposed to their official, capacities.”84 This interpretation was
said to follow from Supreme Court holdings establishing that an official-capacity
claim against a government official is in substance a claim against the government
itself, inasmuch as the government would be responsible to pay any damages
awarded against its officials.85 Nevertheless, some judges have continued to award
punitive damages against foreign officials acting in their official capacity.86 Some
judges have found foreign officials liable in their personal capacities, awarding treble
damages against those officials under the Antiterrorism Act (ATA), 18 U.S.C. § 2333
(despite the limitation in 18 U.S.C. § 2337 making that cause of action unavailable
81 353 F.3d at 1029 (agreeing that, “insofar as the Flatow Amendment creates a private right
of action against officials, employees, and agents of foreign states, the cause of action is
limited to claims against those officials in their individual, as opposed to their official,
capacities) (emphasis in original).
82 Id at 1030. The government responded that
Neither Section 1605(a)(7) nor the Flatow Amendment, nor the two considered in tandem,
offers any indication that Congress intended to take the more provocative step of creating
a private right of action against foreign governments themselves. Such a move could have
serious adverse consequences for the conduct of foreign relations by the Executive
Branch, and therefore an intent to do so should not be inferred - it should be recognized
only if Congress has acted clearly in that direction.
83 Cicippio-Puleo v. Islamic Republic of Iran, Case No. 01-01496 (D.D.C. 2005).
84 353 F.3d at 1034.
85 Id. (citing Kentucky v. Graham, 473 U.S. 159, 165 (1985)).
86 See, e.g., Bodoff v. Islamic Republic of Iran, 424 F. Supp. 2d 74 (D.D.C. 2006)
(Lamberth, J.) (awarding estate of terrorist victim $300 million in punitive damages against
Ayotollah Khamanei); Hausler v. Republic of Cuba, No. 02-12475 CA 01 (Miami-Dade Co.,th
Fla., 11 Cir. Ct., decided January 19, 2007) (awarding $300 million in punitive damages
against same defendants); Weininger v. Republic of Cuba, No. 03-22920 CA 20th
(Miami-Dade Co., Fla., 11 Cir. Ct. decided November 11, 2004) (awarding $65 million in
punitive damages against Fidel Castro and Raul Castro, as individuals and as agencies and
instrumentalitities of Cuba and the Cuban army as an agency and instrumentality).
against U.S. and foreign officials “acting within his or her official capacity or under
color of legal authority”).87
The Cicippio-Puleo ruling complicated plaintiffs’ efforts to sue designated State
sponsors of terrorism by requiring them to identify a source of law outside the FSIA
to provide a substantive cause of action. Some plaintiffs who had already been
awarded default judgments were obliged to amend their complaints to identify a basis
for liability.88 Plaintiffs have, with a few exceptions, had little difficulty establishing
a cause of action under various U.S. state laws without relying on the Flatow
Amendment. However, the application of state tort law has resulted in some
disparity in the availability or amount of damages to which plaintiffs may be entitled.
For example, in one case, damages for intentional infliction of emotional distress
were denied to plaintiffs domiciled in Pennsylvania and Louisiana because those
states’ tort laws impose a presence requirement for third party plaintiffs to recover
for emotional distress.89 The application of federal statutes outside the FSIA has also
resulted in a lower amount of damages than might have been awarded under earlier
court interpretations of the Flatow Amendment.90 Plaintiffs suing for damages
related to the terrorist attack on the U.S.S. Cole in 2000 were awarded a cumulative
sum less than $8 million for economic damages, and were not entitled to damages for
pain and suffering, because the judge found the Death on the High Seas Act91 to
provide the only remedy.
Iran Hostages Case:
Roeder v. Islamic Republic of Iran
In late 2000 a suit was filed in federal district court on behalf of the 52 embassy
staffers who had been held hostage by Iran from 1979-81 and on behalf of their
families. Roeder v. Islamic Republic of Iran92 sought both compensatory and
punitive damages from Iran. In August of 2001, the trial court granted a default
judgment to the plaintiffs and scheduled a hearing on the damages to be awarded.
87 Pugh v. Libya, Civil Action No. 02-02026, 2008 WL 134220 (D.D.C. 2008) (awarding
treble damages — $5.268 billion — against six Libyan agents); Hurst v. Libya, 474 F. Supp.
2d 19, 29 (D.D.C. 2007) (“An official may be sued in one’s personal capacity for actions
taken in one’s official capacity without destroying sovereign immunity.”).
88 See, e.g., Dammarell v. Islamic Republic of Iran, 370 F. Supp. 2d 218, 220-21 (D.D.C.
2005) (requiring plaintiffs to amend their complaint to plead specific causes of action under
the common law or statutes of their respective home states).
89 Peterson v. Islamic Republic of Iran, 515 F. Supp. 2d 25, 46 (D.D.C. 2007).
90 Rux v. Republic of Sudan, 495 F. Supp. 2d 541 (E.D. Va. 2007). Relatives who had not
been financially dependant on the decedents were unable to recover damages. See id at 566-
91 Death on the High Seas Act, 41 Stat. 537, 46 U.S.C. app. §§ 761-67.
92 Case Number 1:00CV03110 (ESG) (D.D.C., filed December 29, 2000).
But in October 2001, a few days before the scheduled hearing, the U.S. government
intervened in the proceeding and moved that the judgment be vacated and the case
dismissed. The government contended that the suit did not meet all of the
requirements of the terrorist State exception to the FSIA (notably, that Iran had not
been designated as a State sponsor of terrorism at the time the U.S. personnel were
held hostage) and that the suit was barred by the explicit provisions of the 1981
Algiers Accords that led to the release of the hostages.93
While that motion was pending before the court, Congress passed as part of the
Hollings amendment to the FY2002 Appropriations Act for the Departments of
Commerce, Justice, and State a provision specifying that Roeder should be deemed
to be included within the terrorist State exception to the FSIA. As amended, the
pertinent section of the FSIA excludes suits against terrorist States from the
immunity generally accorded foreign States but directs the courts to decline to hear
such a case (with the amendment in italics)
if the foreign state was not designated as a state sponsor of terrorism ... at the
time the act occurred, unless later so designated as a result of such act or the act
is related to Case Number 1:00CV03110 (ESG) in the United States District94
Court for the District of Columbia.
The conference report on the bill explained the provision as follows:
Subsection (c) quashes the State Department’s motion to vacate the judgment
obtained by plaintiffs in Case Number 1:00CV03110 (ESG) in the United States
District Court for the District of Columbia. Consistent with current law,
subsection (c) does not require the United States government to make any95
payments to satisfy the judgment.
In signing the appropriations act into law on November 28, 2001, however,
President Bush took note of this provision and commented as follows:
93 The Algiers Accords contain the following provision:
... [T]he United States ... will thereafter bar and preclude the prosecution against Iran of
any pending or future claim of the United States or a United States national arising out of
events occurring before the date of this declaration related to (A) the seizure of the 52
United States nationals on Nov. 4, 1979, (B) their subsequent detention, (C) injury to
United States property or property of the United States nationals within the United States
embassy compound in Tehran after Nov. 3, 1979, and (D) injury to the United States
nationals or their property as a result of popular movements in the course of the Islamic
Revolution in Iran which were not an act of the Government of Iran. The United States
will also bar and preclude the prosecution against Iran in the courts of the United States
of any pending or future claims asserted by persons other than the United States nationals
arising out of the events specified in the preceding sentence.
94 P.L. 107-77, Title VI, § 626(c) (November 28, 2001), amending 28 U.S.C. §
95 H.Rept. 107-278 (2001).
[S]ubsection (c) ... purports to remove Iran’s immunity from suit in a case
brought by the 1979 Tehran hostages in the District Court for the District of
Columbia. To the maximum extent permitted by applicable law, the executive
branch will act, and will encourage the courts to act, with regard to subsection
under the Algiers Accord that achieved the release of U.S. hostages in 1981.
The government continued to pursue its motion to dismiss the case, arguing,
inter alia, that the suit is barred by the Algiers Accords. During the course of the
proceeding Judge Sullivan expressed concern regarding the lack of clarity of the
recent Congressional enactment with respect to that contention. A week later in theth
fiscal 2002 appropriations act for the Department of Defense, the 107 Congress
included a provision making a minor technical correction in the reference to the97
Roeder case. But the conference report also elaborated on what it said was the
effect and intent of the earlier amendment of the FSIA with respect to Roeder,
seemingly in response to Judge Sullivan’s expression of concern. The conference
report explained that:
The language included in Section 626(c) of Public Law 107-77 quashed the
Department of State’s motion to vacate the judgment obtained by plaintiffs in
Case Number 1:00CV03110(EGS) and reaffirmed the validity of this claim and
its retroactive application.... The provision included in Section 626(c) of Public
Law 107-77 acknowledges that, notwithstanding any other authority, the
American citizens who were taken hostage by the Islamic Republic of Iran in
1979 have a claim against Iran under the Antiterrorism Act of 1996 and the
provision specifically allows the judgment to stand for purposes of award
damages consistent with Section 2002 of the Victims of Terrorism Act of 200098
(Public Law 106-386, 114 Stat. 1541).
Nonetheless, in signing the Department of Defense appropriations measure into
law on January 10, 2002, President Bush continued to insist as follows:
Section 208 of Division B makes a technical correction to subsection 626(c) of
Public Law 107-77 (the FY2002 Commerce, Justice, State, the Judiciary and
Related Agencies Appropriations Act), but does nothing to alter the effect of that
provision or any other provision of law. Since the enactment of sub-section
626(c) and consistent with it, the executive branch has encouraged the courts to
act, and will continue to encourage the courts to act, in a manner consistent with
96 Statement on Signing the Departments of Commerce, Justice, and State, the Judiciary and
Related Agencies Appropriations Act, 2002, 37 WEEKLY COMP. PRES. DOC. 1723, 1724
(November 28, 2001).
97 The amendment inverted two letters in the case reference to Roeder that had been
contained in P.L. 107-17, changing “1:00CV03110 (ESG)” to “1:00CV03110 (EGS).” See
P.L. 107-117, Title II, § 208 (January 10, 2002). This technical correction had originally
been included in the DOD appropriations bill as reported and adopted by the Senate but
without explanation. See H.R. 3338 as reported by the Senate Appropriations Committee
(S.Rept. 107-109 (2001)) and Senate floor debate at 147 CONG. REC. S12476-S12529 (daily
ed. December 6, 2001), S12586-S12676 and S12779-S12812 (daily ed. December 7, 2001).
98 H.Rept. 107-350 (2001).
the obligations of the United States under the Algiers Accords that achieved the99
release of U.S. hostages in 1981.
After two additional hearings, Judge Sullivan on April 18, 2002, granted the
government’s motion to vacate the default judgment against Iran and to dismiss the100
suit. In a lengthy opinion the court concluded that:
!at the time it entered a default judgment for plaintiffs on August 17,
should not have entered a judgment;
!the cause of action which Congress had adopted in late 1996 did not,
in fact, apply to suits against terrorist States but only against the
officials, employees, and agents of those States who perpetrate102
terrorist acts; and
!the provision of the Algiers Accords committing the United States
to bar suits against Iran for the incident constitutes the substantive
law of the case, and Congress’s two enactments specifically
concerning the case were too ambiguous to conclude that it
specifically intended to override this international commitment.103
99 Remarks on Signing the Department of Defense and Emergency Supplemental
Appropriations for Recovery from and Response to Terrorist Attacks on the United States
Act, 2002, in Arlington, Virginia, 38 WEEKLY COMP. PRES. DOC. 44 (January 10, 2002).
100 Roeder v. Islamic Republic of Iran, 195 F. Supp. 2d 140 (D.D.C. 2002).
101 The court said that it did not have jurisdiction over the suit until Congress amended the
FSIA by means of § 626(c) of the FY2002 appropriations act for the Departments of Justice,
Commerce, and State, which was signed into law on November 28, 2001. Prior to that
amendment, it said, the suit did not fall within the terrorist state exception to the FSIA
because Iran had not been declared to be a terrorist state at the time it seized and held the
American personnel hostage. The court said also that, absent an “express statement of intent
by Congress,” it could not apply § 626(c) retroactively.
102 The court stressed that the terrorist state exception which Congress had added to the
FSIA in 1996 meant only that U.S. courts could exercise jurisdiction over such cases.
Traditional State immunity, in other words, was eliminated as a jurisdictional barrier. But
that amendment to the FSIA did not in itself, the court said, provide a cause of action for
such suits. The specific statute providing for such a cause of action which Congress enacted
later in 1996, it said, provided only for a cause of action against an official, employee, or
agent of a terrorist State, not against the terrorist State itself. (See P.L. 104-208, Div. A,
Title I, § 101(c) (September 30, 1996) (“Flatow Amendment”); 110 Stat. 3009-172; 28
U.S.C. § 1605 note; supra note 3.)
103 The court stressed that an act of Congress “ought never to be considered to violate the
law of nations, if any other possible construction remains.” None of the statutes Congress
had adopted relating to a cause of action generally or to Roeder itself, the court said,
unambiguously declared an intent to override the Algiers Accords. Nor, it said, did they
unambiguously declare an intent not to override the Accords. They, and their “scant”
legislative history, were ambiguous on the question, it held, and, consequently, must be
construed not to conflict with the Accords:
Neither the Anti-Terrorism Act, the Flatow Amendment, Subsection 626(c), or Section
In addition, the court in dicta suggested that Congress’s enactments on the Roeder
case might have interfered with its adjudication of the case in a manner that raised
constitutional separation of powers concerns.104 It also chastised the plaintiffs’
attorneys for what it said were serious breaches of their professional and ethical
The U.S. Court of Appeals for the District of Columbia affirmed the decision
of the lower court, placing emphasis on the fact that the legislative history plaintiffs
sought to use — the joint explanatory statement prepared by House and Senate
conferees — is not part of the Conference Report voted on by both houses of
Congress and thus does not carry the force of law.106
Executive agreements are essentially contracts between nations, and like
contracts between individuals, executive agreements are expected to be honored
by the parties. Congress (or the President acting alone) may abrogate an
executive agreement, but legislation must be clear to ensure that Congress - and
the President - have considered the consequences. The “requirement of clear
statement assures that the legislature has in fact faced, and intended to bring into
208 contain the type of express statutory mandate sufficient to abrogate an international
executive agreement. Furthermore ..., the legislative histories of these statutes contain no
clear statements of Congressional intent to specifically abrogate the Algiers Accords.
Therefore, ... unless and until Congress expresses its clear intent to overturn the provisions
of a binding agreement between two nations that has been in effect for over twenty years,
this Court can not interpret these statutes to abrogate that agreement.
Roeder v. Islamic Republic of Iran, supra, at 177.
The court also rejected the argument that because the United States entered into the Algiers
Accords under duress, the Accords constituted “an unenforceable illegal contract.”
“Whatever emotional appeal and rhetorical flourish this argument contains,” the court said,
“it is absolutely without basis in law.” Id. at 168.
104 The court did not base its decision on any separation of powers considerations. But it did
say that if it had construed § 626(c) to apply retroactively, Congress’s “post-judgment
retroactive imposition of jurisdiction [would raise] serious separation of powers concerns”
and might be “an impermissible encroachment by Congress into the sphere of the federal
courts....” Id. at 161. “By expressly directing legislation at pending litigation, Congress has
arguably attempted to determine the outcome of this litigation,” it said. Id. at 163. The
court also suggested that the narrowness of Congress’s enactments, i.e., their application
only to this one case and not to any others, raised possible Article III concerns. Id. at 165-
105 In commenting on what it called the “repeated ethical failures by class counsel,” the court
stated that “[p]laintiffs’ counsel in this case repeatedly presented meritless arguments to this
Court, repeatedly failed to substantiate their arguments by reference to any supporting
authority, and repeatedly failed to bring to the Court’s attention the existence of controlling
authority that conflicted with those arguments.” Id. at 185.
106 Roeder v. The Islamic Republic of Iran, 333 F.3d 228, 238 (D.C. Cir. 2003) (“While
legislative history may be useful in determining intent, the joint explanatory statements here
go well beyond the legislative text of § 208, which did nothing more than correct a
issue, the critical matters involved in the judicial decision.” The kind of
legislative history offered here cannot repeal an executive agreement when the
legislation itself is silent. [Citations omitted].
The court denied that its interpretation rendered any act of Congress futile. On
the contrary, it stated that, “[i]f constitutional ... the amendments had the effect of
removing Iran’s sovereign immunity, which the United States had raised in its motion
Efforts to Abrogate the Algiers Accords
Subsequent to the trial court’s decision in Roeder, efforts have been made in the
107th, the 108th, and the 109th Congresses to enact legislation that would explicitly
abrogate the provision of the Algiers Accords barring the hostages’ suit. On July 24,
2002, the Senate Appropriations Committee reported the “Fiscal 2003
Appropriations Act for the Departments of Commerce, Justice, and State” (S. 2778).
Section 616 of that bill proposed to amend the FSIA as follows:
SEC. 616. Section 1605 of title 28, United States Code is amended by adding a
new subsection (h) as follows:
(h) CAUSE OF ACTION FOR IRANIAN HOSTAGES- Notwithstanding any
provision of the Algiers Accords, or any other international agreement, any
United States citizen held hostage in Iran after November 1, 1979, and their
spouses and children at the time, shall have a claim for money damages against
the government of Iran. Any provision in an international agreement, including
the Algiers Accords that purports to bar such suit is abrogated. This subsection
shall apply retroactively to any cause of action cited in 28 U.S.C. 1605(a)(7)(A).
In explaining the provision, the report of the Committee simply stated that “Section
616 clarifies section 626 of Public Law 107-77 that the Algiers Accord is abrogated
for the purposes of providing a cause of action for the Iranian hostages.”108 Theth
measure received no further action prior to the adjournment of the 107 Congress,
In the 108th Congress the Senate added amendments to three appropriations bills
that expressly would have abrogated the Algiers Accord, but in each case the
amendment was deleted in conference.109 The 109th Congress did not take up any
legislation to abrogate the Algiers Accords. One bill, H.R. 3358, would have
declared the Algiers Accords abrogated and inapplicable, and would have directed
the Secretary of the Treasury to pay the Roeder plaintiffs $1,000 per day of captivity
(family members were to be awarded $500 per day of captivity of the hostages), to
be paid out of the FMS fund and frozen assets belonging to Iran. No action was
taken on the bill, but it has been re-introduced in the 110th Congress as H.R. 394. In
addition, H.R. 6305/S. 3878 would have provided up to $500,000 for victims of
107 The court noted, but did not decide whether the amendments were an impermissible
intrusion by Congress into the role of the courts. Id. at 237 & n.5.
108 S.Rept. 107-218, at 167 (2002).
109 H.J.Res. 2149 (108th Cong.); S. 762 (108th Cong.); S. 1689 (108th Cong.)
hostage-taking, including specifically the Iran hostages and family members named
in the Roeder case, who would have been eligible for additional compensation from
the FMS account. The bill did not mention the Algiers Accords, and it would have
prohibited recipients from commencing or maintaining a civil action in U.S. court
against a foreign State. However, payment of compensation out of Iran’s FMS fund
could arguably violate the Algiers Accords in the event the U.S.-Iran Claims Tribunal
finds that those funds are the property of Iran. Similar legislation has been
introduced in the 110th Congress as H.R. 3369 and H.R. 3346 (see infra).
In creating a federal cause of action against terrorist States (P.L. 110-181,
codified at 28 U.S.C. § 1605A, see infra), the 110th Congress carried over the
language from former 28 U.S.C. § 1605(a)(7) that conferred jurisdiction over the
Roeder case, despite the fact that the case has been dismissed. Nothing in the statute
expressly abrogates the Algiers Accords, however, making it unlikely that the Roeder
plaintiffs will prevail in an effort to sue Iran under the new cause of action.
Iraq: Lawsuits Involving Acts of
Saddam Hussein Regime
Confiscation of Blocked Assets for Reconstruction
On March 20, 2003, immediately after the U.S. and its coalition partners
initiated military action against Iraq, President Bush issued an executive order
providing for the confiscation and vesting of Iraq’s frozen assets in the U.S.
government and placing them in the Development Fund for Iraq for use in the post-
war reconstruction of Iraq.110 According to the Terrorist Assets Report 2002
published by the Office of Foreign Assets Control, Iraq’s blocked assets totaled
approximately $1.73 billion at the end of 2002. However, the President’s order
excluded from confiscation Iraq’s diplomatic and consular property as well as assets
that had, prior to March 20, 2003, been ordered attached in satisfaction of judgments
against Iraq rendered pursuant to the terrorist suit provision of the FSIA and § 201
of the Terrorism Risk Insurance Act (which reportedly total about $300 million).111
The President stated that the remaining assets “should be used to assist the Iraqi
people....” Thus, notwithstanding the enactment of § 201 of TRIA, the President’s
action made Iraq’s frozen assets unavailable to those who, after March 20, 2003,
obtained judgments against that State for its sponsorship of, or complicity in, acts of
110 E.O. 13290, 68 Fed. Reg. 14,305-08 (March 24, 2003).
111 See Tom Schoenberg, Fights Loom for Iraqi Riches, LEGAL TIMES (March 31, 2003).
Judgment creditors were paid about $140 million from the vested assets to cover the
unsatisfied portions of judgments and interest. Judgments satisfied from Iraqi assets include
Dadesho v. Government of Iraq, D.C. No. CV-92-05491-REC (E.D. Cal. 1995) ($1.5 millionth
for 1990 foiled assassination plot), appeal dismissed, 139 F.3d 766 (9 Cir. 1998); Hill v.
Republic of Iraq, 175 F. Supp. 2d 36 (D.D.C. 2001) ($94,110,000.00 in compensatory
damages for civilians detained in Iraq); Daliberti v. Republic of Iraq, 146 F. Supp. 2d 19
(D.D.C. 2001) ($18,823,289.00 for civilian contractors held hostage in Iraq).
Subsequently, the President took several additional actions complementing and
reinforcing this executive order. In the Emergency Wartime Supplemental
Appropriations Act for Fiscal 2003 (“EWSAA”), Congress provided that “the
President may make inapplicable with respect to Iraq section 620A of the Foreign
Assistance Act of 1961 or any other provision of law that applies to countries that
have supported terrorism.”112 On the basis of that authority, President Bush on May
7, 2003, declared a number of provisions concerning terrorist States, including the
FSIA exception and the section of the Terrorism Risk Insurance Act making their
blocked assets available to victims of terrorism, inapplicable to Iraq.113 On May 22,
2003, he issued another executive order providing that the Development Fund of Iraq
cannot be attached or made subject to any other kind of judicial process.114
POW Lawsuit: Acree v. Republic of Iraq
Whether the President has the legal authority to restore Iraq’s sovereign
immunity and make its assets unavailable to victims of terrorism who had obtained
judgments against Iraq was contested in Acree v. Republic of Iraq.115 In that case a
federal district court on July 7, 2003 — two and half months after the President’s
order — handed down a default judgment against Iraq for its imprisonment and
torture of 17 American prisoners of war (POWs) during the first Gulf War in 1991.
After detailing the treatment given the POWs, the court awarded them and their
families $653 million in compensatory damages and added a punitive damages award
of $306 million for the benefit of the POWs against Saddam Hussein and the Iraqi
Intelligence Service. Upon request by the plaintiffs, Judge Roberts issued a
temporary restraining order (TRO) requiring the government to retain at least $653
million of Iraq’s assets vested in the United States by President Bush’s executive
order pending further decision by the court.
The Justice Department then sought to intervene in the case, arguing that Iraq’s
sovereign immunity had been restored by Presidential Determination pursuant to
112 P.L. 108-11, § 1503 (April 16, 2003).
113 See Memorandum for the Secretary of State (Presidential Determination No. 2003-23)
(May 7, 2003). This Determination simply replicated the general language of the
Supplemental Appropriations Act provision. But in a subsequent message to Congress,
President Bush stated:
... [B]y my memorandum to the Secretary of State and Secretary of Commerce of May 7,
2003, (Presidential Determination 2003-23), I made inapplicable with respect to Iraq
section 620A of the Foreign Assistance Act of 1961, Public Law 87-195, as amended, and
any other provision of law that applies to countries that have supported terrorism. Such
provisions of law that apply to countries that have supported terrorism include, but are not
limited to, 28 U.S.C. 1605(a)(7), 28 U.S.C. 1610, and section 201 of the Terrorism Risk
President George Bush, Message to the Congress of the United States (May 22, 2003),
available on the White House website.
114 E.O. 13303, 68 Fed. Reg. 31,931 (May 28, 2003).
115 Acree v. Republic of Iraq, 276 F. Supp. 2d 95 (D.D.C. 2003).
authority granted by Congress. The court denied the government’s motion to
intervene as untimely because the Justice Department had waited 75 days past the
Determination before it intervened, knowing that the Acree case was pending before
the court.116 Additionally, the court found that the government’s interest in
promoting a new, democratic Iraqi government did not constitute a cognizable
interest warranting intervention as of right, especially absent any showing of how the
default judgment impaired such interest. The court also held that only Iraq could
assert a defense based on sovereign immunity, and that Congress and the President
could not retroactively restore Iraq’s previously waived sovereign immunity.
While the Presidential Determination did not retroactively restore Iraq’s
sovereign immunity, it was held effectively to preclude the plaintiffs from enforcing
their judgment against the $1.73 billion in frozen Iraqi assets that had been vested by
the President for the restoration of Iraq.117 After an expedited hearing on the matter,
the court on July 30, 2003, held that none of the assets in question could be attached
by the plaintiffs; and the court dissolved the TRO.118 In reaching that conclusion, the
court relied primarily on the Supplemental Appropriations Act provision noted above
and the subsequent actions by President Bush rather than on his March 20, 2003,
executive order. The court concluded:
The Act is Congressional authorization for the President to make TRIA
prospectively inapplicable to Iraq, and the President exercised that authority
when he issued the Determination on May 7, 2003. As a result, at the time the
plaintiffs obtained their judgment against Iraq on July 7, 2003, TRIA was no119
longer an available mechanism for plaintiffs to use to satisfy their judgment.
The Justice Department appealed the decision denying its motion to intervene,
while plaintiffs appealed the decision that frozen Iraqi funds were unavailable to
satisfy their judgment. The Court of Appeals for the D.C. Circuit held that the
district court had abused its discretion by denying the government’s motion to
intervene.120 However, the court reversed the President’s Determination insofar as
it nullified the FSIA provisions with respect to Iraq, finding that Congress had not
intended to permit the President to revoke those provisions. The plaintiffs were
nevertheless prevented from collecting, because the court of appeals vacated their
judgment based on their failure to state a cause of action against Iraq, and because
Saddam Hussein retained immunity for official conduct. The court followed its
116 Id. at 98.
117 Acree v. Snow, 276 F. Supp. 2d 31 (D.D.C.), aff’d 78 Fed.Appx. 133 (D.C. Cir. 2003)
(unpublished opinion); Smith v. Federal Reserve Bank of New York, 280 F. Supp. 2d 314nd
(S.D.N.Y), aff’d 346 F.3d 264 (2 Cir. 2003) (attempted enforcement of default judgment
of $64,002,483.19 against Iraq by plaintiff victims of September 11, 2001, terrorist attacks).
118 276 F. Supp. 2d at 33.
120 Acree v. Republic of Iraq, 370 F.3d 41 (D.C. Cir. 2004), cert. denied, 544 U.S. 1010
precedent in Cicippio-Puleo v. Islamic Republic of Iran121 to hold that the terrorism
exception to the FSIA combined with the Flatow Amendment, as in force at the time,
created a private right of action against officials, employees and agents of a foreign
government for their private conduct, but not against the foreign government itself,
including its agencies and instrumentalities, or officials in their official capacity.122
The Supreme Court declined to review the decision.123 The Plaintiffs sought to
reopen their case at the district court level in order to demonstrate the applicability
of several causes of action. The district court, however, has dismissed the motion as
moot, finding that the D.C. Circuit’s earlier dismissal of their lawsuit without
remanding it to the district court means that the court has no discretion to reopen it.124
Proposed Legislation: 108th and 109th Congresses
Two bills were introduced during the 108th Congress in the House of
Representatives to provide relief for the plaintiffs. H.Con.Res. 344 would have
expressed the sense of the Congress that the POWs and their immediate family
members should be compensated for their suffering and injuries as the court had
decided, notwithstanding § 1503 of EWSAA. The bill would also have expressed
Congress’s resolve to continue its oversight of the application of § 1503 “in order to
ensure that it is not misinterpreted, including by divesting United States courts of
jurisdiction, with respect the POWs and other victims of Iraqi terrorism.”125
Additionally, the Senate passed language in § 325 of its version of the Emergency
Supplemental Appropriations for Iraq and Afghanistan Security and Reconstruction
Act, 2004 (H.R. 3289), that would have found that
the Attorney General should enter into negotiations with each such citizen, or the
family of each such citizen, to develop a fair and reasonable method of providing
compensation for the damages each such citizen incurred, including using assets
of the regime of Saddam Hussein held by the Government of the United States
or any other appropriate sources to provide such compensation.
The language was not enacted.126
121 353 F.3d 1024 (D.C. Cir. 2004).
122 The court also applied the Cicippio-Puleo holding to affirm that the Flatow Amendment
cause of action against officials, employees, and agents of foreign States, is limited to claims
against those officials “in their individual, as opposed to their official, capacities.” Id. at
1034. This was so, the court found, because “to construe the Flatow Amendment as
permitting official-capacity claims would eviscerate the recognized distinction between suits
against governments and suits against individual government officials.” Id. (citing the U.S.
brief filed as amicus curiae).
123 544 U.S. 1010 (2005).
124 Acree v. Republic of Iraq, 2008 WL 2764858 (D.D.C. 2008). The court did not expressly
consider the effect of § 1083 of the FY2008 NDAA or its waiver with respect to Iraq.
125 H.Con.Res. 344 (108th Cong.).
126 See P.L. 108-106, 117 Stat. 1209 (2003).
The other House bill from the 108th Congress, H.R. 2224, the Prisoner of War
Protection Act of 2003, would have allowed the plaintiffs, as well as any POWs who
might later assert a cause of action in the more recent war against Iraq, to recover
damages out of the $1.73 billion in frozen Iraqi assets that were vested by order of
the President to pay for the reconstruction of Iraq.
Nothing similar to the Prisoner of War Protection Act was introduced in the
109th Congress, but H.Con.Res. 93 would have “express[ed] the sense of the
Congress that the Department of Justice should halt efforts to block compensation
for torture inflicted by the Government of Iraq on American prisoners of war during
the 1991 Gulf War.” H.R. 1321 proposed the payment of $1 million to each of the
seventeen plaintiffs out of unobligated funds appropriated under the heading of “Iraq
Relief and Reconstruction Fund” in the 2004 Emergency Supplemental.127 Neither
provision was enacted into law.
Other Cases Against Iraq
Smith v. Islamic Emirate of Afghanistan128 was initially a lawsuit against Al
Qaeda, Afghanistan, and the Taliban for damages related to the terrorist attacks on
the World Trade Center in 2001. The plaintiffs subsequently amended their
complaints to add Iraq and Saddam Hussein as defendants. None of the defendants
entered an appearance. The complaint against Saddam Hussein was dismissed
because the judge found it precluded by the Flatow Amendment provision excluding
lawsuits against foreign officials in cases in which U.S. officials would not be liable
for similar conduct.129 The case against Iraq was permitted to continue, and the
plaintiffs were found to have demonstrated to the court’s satisfaction that Iraq had
provided material support to Al Qaeda.130 A final judgment was entered on July 14,
with Iraq deemed responsible for approximately $63.5 million of the total. By that
time, however, the President had already vested Iraq’s frozen funds in U.S.
possession, which frustrated plaintiffs’ efforts to satisfy their judgment under TRIA
§ 201.131 The U.S. Court of Appeals for the 2d Circuit, in affirming the summary
127 Id. Presumably, the “17 plaintiffs in the [Acree case]” in H.R. 1321 meant those plaintiffs
who were actually held prisoner, but would have excluded 37 family members and relatives,
who also participated as plaintiffs and were awarded damages of from $5 - 10 million each.
Acree v. Republic of Iraq, 271 F. Supp. 2d 179 (D.D.C. 2003), vacated by 370 F.3d 41 (D.C.
Cir. 2004), cert. denied, 544 U.S. 1010 (2005).
128 262 F. Supp. 2d 217 (S.D.N.Y.2003).
129 Id. at 228 (citing Nixon v. Fitzgerald, 457 U.S. 731, 749, 102 S.Ct. 2690, 73 L.Ed.2d 349
(1982) for the proposition that a claim against a U.S. president for the such conduct would
be barred because of “the president’s absolute immunity from damages for conduct
associated with the exercise of his official duties”).
130 Id. at 232 (finding expert testimony sufficient).
131 Smith v. Federal Reserve Bank of New York, 280 F. Supp. 2d 314 (S.D.N.Y), aff’d 346
F.3d 264 (2nd Cir. 2003). Section 201 of TRIA provides that “the blocked assets of [a
judgment debtor] terrorist party (including the blocked assets of any agency or
judgment in favor of the Federal Reserve Bank and the Treasury Department, found
it unnecessary to rule on the validity of the President’s order restoring Iraq’s
sovereign immunity, having found that the specific funds at issue were no longer
blocked assets within the meaning of TRIA § 201.132 Consequently, the judgment
creditors in this case have not been prevented from seeking to satisfy their judgments
from other assets. A similar case, O’Neill v. Republic of Iraq, Civil Action No. 1:04-
Hill v. Republic of Iraq133 began as a lawsuit against Iraq and Saddam Hussein
by twelve U.S. citizens who were held in hostage status134 by Iraq after its invasion
of Kuwait in 1990. The former hostages, who were either held captive in or
prevented from leaving Iraq or Kuwait from August 2 to mid-December of 1990,135
and some of their families were awarded a cumulative $9 million in compensatory
damages and $300 million in punitive damages in a default judgment.136 The court
subsequently found that an additional 168 plaintiffs had established their right to
relief for being held hostage by Iraq; and the court awarded them approximately $85
million in compensatory damages.137 Judgment holders in this case were able to fully
satisfy their compensatory judgments from Iraqi assets vested by the President in
instrumentality of that terrorist party) shall be subject to execution or attachment in aid of
execution” of compensatory damages. See supra note 71 for TRIA § 201 definition of
132 346 F.3d at 272.
133 175 F. Supp. 2d 36 (D.D.C. 2001).
134 Congress defined “hostage status” in § 599C(d)(1) of P.L. 101-513, with respect to U.S.
hostages in Iraq or Kuwait, as the status of being held “in custody by governmental or
military authorities of a country or taking refuge within that country in fear of being taken
into such custody (including residing in any diplomatic mission or consular post in the
country)....” Congress allocated $10 million to pay the persons in hostage status “at the rate
of pay for a position at GS-9 of the General Schedule for the period in which such hostages
remained in a hostage status without the hostages (or their family members on their behalf)
receiving salaries or wages from their employers.” P.L. 101-513 § 599C(b)(2) & (e).
135 The court found that
It is beyond dispute that the American citizens denied permission to leave Kuwait and Iraq
from August through mid-December, 1990, by the armed forces and civilian police of the
Republic of Iraq were “hostages” within the meaning of the FSIA.
136 The court awarded the punitive damages against Saddam Hussein based on the
assumption that he was “an agency or instrumentality” of Iraq, apparently without
considering whether the FSIA definition of “agency or instrumentality” supports that view.
See id. at 48.
137 Hill v. Republic of Iraq, 2003 U.S. Dist. LEXIS 3725 (D.D.C. 2003).
138 E.O. 13290, 68 Fed. Reg. 14,307 (March 20, 2003).
Vine v. Republic of Iraq139 involves 237 plaintiffs who were unsuccessful in
joining the Hill case after the judge denied class action status to the lawsuit and
imposed a moratorium on the addition of new plaintiffs. The plaintiffs include U.S.
nationals who were used as “human shields” by the Iraqi government to protect
various strategic sites from attack, and any U.S. nationals in hiding in Iraq or Kuwait
for fear of capture,140 as well as some of their spouses. Iraq made an appearance in
the case and moved to dismiss the claims on several grounds. The court dismissed
causes of action based on the Flatow Amendment and federal common law, but
permitted claims based on U.S. state and foreign law. The case remains pending.
The judge dismissed as untimely several other claims that had been consolidated
with the Vine case for determining Iraq’s motion to dismiss. Two journalists, Robert
Simon, a CBS News reporter, and Roberto Alvarez, a cameraman working for CBS
News, alleged that they were illegally seized and subsequently tortured by Iraqi
officials in 1991.141 Nabil Seyam and others filed a separate action based similar
allegations.142 The court reasoned that the cause of action in these cases arose no
later than December 1990, and that the 10-year statute of limitations had run prior to
the cases’ filings in 2003. Despite the statutory provision for “equitable tolling,
including the period during which the foreign state was immune from suit,”143 the
court determined that the four years between the passage of the terrorist exception to
the FSIA and the deadline for filing within the statute of limitations was sufficient
to preclude equitable tolling.144 However, the Court of Appeals for the D.C. Circuit
reversed that decision, holding that the statute of limitations under the statute did not
run until 10 years after the enactment of the terrorism exception to the FSIA.145
Beaty v. Iraq146 is a suit against Iraq by five children of two men who were held
hostage in Iraq during the 1990s. The two hostages and their wives sued Iraq in 1996
in conjunction with several other former hostages and their spouses, Daliberti v.
139 Vine v. Republic of Iraq, 459 F. Supp. 2d 10 (2006).
140 Immediately after Iraq’s invasion of Kuwait, Saddam Hussein issued a directive
prohibiting foreigners, which included some 2,000 Americans, from leaving Iraq or Kuwait.
Subsequently, Saddam issued an order directing foreigners to report to two hotels in Bagdad,
from which they were relocated to strategic sites to act as “human shields.” Many
disobeyed the directive and sought refuge in safehouses and diplomatic properties. See Vine
v. Republic of Iraq, 459 F. Supp. 2d 10, 11-15 (2006).
141 Simon v. Republic of Iraq, Civ. No. 03-691 (D.D.C.).
142 Seyam v. Republic of Iraq, 16 Civ. No. 03-888 (D.D.C.).
143 28 U.S.C. § 1605(f).
144 459 F. Supp. 2d at 21-22 (noting that the “D.C. Circuit has held that equitable tolling
‘does not bring about an automatic extension of the statute of limitations by the length of
the tolling period.’” (citing Phillips v. Heine, 984 F.2d 489, 492 (D.C. Cir. 1993)).
145 Simon v. Republic of Iraq, 2008 WL 2497417 (D.C. Cir. 2008).
146 480 F. Supp. 2d 60 (D.D.C.), aff’d No. 07-7057 (D.C. Cir. 2007) (per curiam), petition
for cert. filed (U.S. February 19, 2008) (No. 07-1090).
Iraq,147 and were able to recover the resulting default judgment from the Iraqi frozen
funds vested by President Bush in 2003. The Beaty plaintiffs grounded their
complaint on claims of intentional infliction of emotional distress under state
common law, violations of customary international law incorporated into federal
common law, and loss of solatium under federal common law. Iraq entered an
appearance and moved to dismiss the complaint for failure to state a claim upon
which relief can be granted, for grounds of nonjusticiability under the political
question doctrine, and for lack of jurisdiction due to the presidential order relieving
Iraq from the legal consequences of its status as a terrorist State. The court suggested
its agreement with the government’s position, expressed in several statements of
interest filed in the case, that the presidential order validly restored Iraq’s sovereign
immunity and divested the court of jurisdiction148; however, the court was bound by
the appellate court decision in Acree to hold that § 1503 of EWSAA did not authorize
the President’s efforts in that regard. The court rejected the plaintiffs’ federal
common law claims but permitted the suit to continue with respect to the state claims
under Florida and Oklahoma law, and accepted that the facts established in the
Daliberti case may be deemed established for the purposes of all further proceedings
without further proof. Iraq’s interlocutory appeal was unsuccessful, but it has filed
a petition for certiorari at the Supreme Court regarding the validity of the President’s
order restoring Iraq’s sovereign immunity pursuant to § 1503 of EWSAA. The
Supreme Court has asked the Solicitor General for his views on whether to grant the
Lawton v. Republic of Iraq is a lawsuit against Iraq asserting damages based on
the bombing of the Alfred P. Murrah Building in Oklahoma City in 1995. The
plaintiffs allege that the bombing “was orchestrated, assisted technically and/or
financially, and directly aided by agents” of the Republic of Iraq.150 After Iraq failed
to enter an appearance, the plaintiffs moved for a default judgment. The court
initially denied the motion for failure to state a cause of action, but after the plaintiffs
amended their complaint, the court entered a default against Iraq. Iraq subsequently
entered an appearance and asked the court to set aside the entry of default, which the
court granted based on its finding that Iraq had acted as expeditiously as possible,
given the circumstances. The case remains pending.
Effect of FY2008 NDAA, § 1083 on Iraq and Cases Pending
Section 1083 of the National Defense Authorization Act for FY2008, P.L. 110-
181 (discussed more fully infra) made numerous changes to the relevant FSIA
terrorist State exceptions, including provisions to facilitate plaintiffs’ efforts to attach
defendant State assets in satisfaction of judgments and to enable plaintiffs (like those
in the Acree case) whose claims were dismissed for lack of a federal cause of action
to refile their claims under new 28 U.S.C. § 1605A (new FSIA terrorism exception
and explicit cause of action against terrorist States). In addition, subsection (c)(4) of
147 Daliberti v. Republic of Iraq, 146 F. Supp. 2d 19 (D.D.C. 2001).
148 480 F. Supp. 2d at 70.
149 Docket No. 07-1090.
150 Lawton v. Iraq, Civil Action No. 02-0474 RBW/DAR (D.D.C. 2006).
section 1083 states that section 1503 of the Emergency Wartime Supplemental
Appropriations Act (EWSAA) (P.L. 108-11) “has [n]ever authorized, directly or
indirectly, the making inapplicable of any provision of chapter 97 of title 28, United
States Code, or the removal of the jurisdiction of any court of the United States.”
This provision would appear to be aimed at ensuring that no court construes section
1503 of EWSAA to restore Iraq’s sovereign immunity with respect to actions
involving terrorist acts that occurred while Iraq was designated a State sponsor of
President Bush vetoed the first version of the FY2008 NDAA, H.R. 1585, on
the stated basis that § 1083 would jeopardize Iraq’s economic development and
security.151 In response, Congress passed H.R. 4986, virtually identical to the vetoed
bill but authorizing the President to
waive any provision of [§1083] with respect to Iraq, insofar as that provision
may, in the President’s determination, affect Iraq or any agency or
instrumentality thereof, if the President determines that —
(A) the waiver is in the national security interest of the United States;
(B) the waiver will promote the reconstruction of, the consolidation of
democracy in, and the relations of the United States with, Iraq; and
(C) Iraq continues to be a reliable ally of the United States and partner in152
combating acts of international terrorism.
The waiver authority applies retroactively “regardless of whether, or the extent to
which, the exercise of that authority affects any action filed before, on, or after the
date of the exercise of that authority or of the enactment of [P.L. 110-181 (January
151 See Notification of the Veto of H.R. 1585, the National Defense Authorization Act for
Fiscal Year 2008, H.R. DOC. NO. 110-88, available at [http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=110_cong_documents&docid=f:hd088.110]. The President
predicted the following consequences:
Immediately upon enactment, section 1083 would risk the freezing of substantial Iraqi
assets in the United States — including those of the Development Fund for Iraq (DFI), the
Central Bank of Iraq (CBI), and commercial entities in the United States in which Iraq has
an interest. Section 1083 also would expose Iraq to new liability of at least several billion
dollars by undoing judgments favorable to Iraq, by foreclosing available defenses on
which Iraq is relying in pending litigation, and by creating a new Federal cause of action
backed by the prospect of punitive damages to support claims that may previously have
been foreclosed. This new liability, in turn, will only increase the potential for immediate
entanglement of Iraqi assets in the United States. The aggregate financial impact of these
provisions on Iraq would be devastating.
Id. at 1.
152 P.L. 110-181, § 1083(d).
On the day the President signed the FY2008 NDAA into law, the White House
signed a waiver154 and issued a press release justifying the exercise of the waiver
authority.155 The memorandum declares that a waiver of all of the provisions of
section 1083 with respect to Iraq “is in the national security interest of the United
States,” and lists the following factors:
!Absent a waiver, section 1083 would have a potentially devastating
impact on Iraq’s ability to use Iraqi funds to expand and equip the
Iraqi Security Forces, which would have serious implications for
U.S. troops in the field acting as part of the Multinational
Force-Iraq and would harm anti-terrorism and counter-insurgency
!Application of section 1083 to Iraq or any agency or instrumentality
thereof will hurt the interests of the United States by unacceptably
interfering with political and economic progress in Iraq that is
critically important to bringing U.S. troops home.
!If applied to Iraq or any agency or instrumentality thereof, the
provisions of section 1083 would redirect financial resources from
the continued reconstruction of Iraq and would harm Iraq’s
stability, contrary to the interests of the United States. A waiver
will ensure that Iraqi assets of the Central Bank of Iraq, the
government and commercial entities in which Iraq has an interest,
remain available to maintain macroeconomic stability in Iraq and
support private sector development and trade.
!By providing for the maintenance of macroeconomic stability, the
waiver of section 1083 will promote the consolidation of
democracy in Iraq.
!Absent a waiver of section 1083, Iraq’s ability to finance
employment alternatives, vocational training, and job placement
programs necessary to promote community reintegration and
development efforts contributing to counterterrorism efforts would
!By ensuring that Iraq and its agencies and instrumentalities are not
subject to litigation or liability pursuant to section 1083, waiver of
section 1083 will promote the close relationship between the
United States and Iraq.
154 Presidential Determination No. 2008-9 of January 28, 2008, Waiver of Section 1083 of
the National Defense Authorization Act for Fiscal Year 2008, 73 Fed. Reg. 6,571
(2008)(waiving all provisions of § 1083 with respect to Iraq).
155 White House Memorandum of Justification for Waiver of Section 1083 of the National
Defense Authorization Act (January 28, 2008), available at [http://www.whitehouse.gov/
news/releases/ 2008/01/20080128-12.html ].
The waiver appears to foreclose any refiling of the Acree lawsuit under the new
provision, but the D.C. Circuit’s recent decision in Simon v. Republic of Iraq156 may
permit the Acree case to go forward as a case pending under previous 28 U.S.C.
§ 1605(a)(7), along with other pending claims against Iraq under the FSIA terrorism
exception.157 In Simon, Iraq argued that the repeal of § 1605(a)(7) cut off jurisdiction
of pending cases, while the presidential waiver prevented their conversion into claims
under new § 1605A. The court disagreed, interpreting § 1083(c) of the NDAA to
repeal § 1605(a)(7) only as to future claims against State sponsors of terror.158 Under
this interpretation, plaintiffs with pending claims against defendants other than Iraq
may be permitted to pursue claims under both the repealed § 1605(a)(7) and new
§ 1605A. The court also rejected Iraq’s contention that the lawsuit should be
dismissed as presenting a political question. Iraq will likely ask the Supreme Court
to review the decision, possibly in conjunction with the Beaty case.
Final judgments against Iraq are not affected by the presidential waiver, but any
judgments against Iraq will likely remain difficult to enforce. Some avenues
available to plaintiffs to enforce terrorism judgments are not affected by § 1083, such
as TRIA § 201159 and the non-terrorism related exceptions related to the property of
a sovereign in 28 U.S.C. § 1610,160 but these will likely remain unavailing with
156 Simon v. Republic of Iraq, 2008 WL 2497417 (D.C. Cir. 2008).
157 It appears that the waiver of all of the provisions of § 1083 merely leaves the law as it
was prior to the enactment of the NDAA with respect to claims against Iraq. Under Simon,
plaintiffs with ongoing actions may continue to pursue them under 28 U.S.C. § 1605(a)(7)
(as previously in force) and the Flatow Amendment, supplemented by state causes of action.
158 Simon, slip op. at 3 (noting that “a statute that retroactively alters the consequences of
primary conduct-as by ‘impair[ing] rights a party possessed when he acted, increas[ing] a
party’s liability for past conduct, or impos[ing] new duties with respect to transactions
already completed,’... is presumptively non-retroactive; such a statute applies to a pending
case only if the Congress clearly so provides”) (citing Landgraf v. USI Film Prods., 511 U.S.
244, 280 (1994)); id. at 4 (construing § 1083(c)-(d) of the NDAA). Specifically, the court
noted that Congress, by specifying that “the amendments ... apply to any claim arising under
section 1605A,” must have meant to distinguish new claims from pending claims, inasmuch
as “the amendments obviously would apply to any [claim under § 1605A)] and could apply
to no other claim.” Id.
159 28 U.S.C. § 1610 note (permitting the attachment of some blocked assets).
160 Judgment holders would not be foreclosed from invoking other provisions for property
attachment in the FSIA that were not amended by § 1083, if the creditors were able to locate
assets that qualify for exceptions to sovereign immunity under those provisions. However,
very few of these non-terrorism exceptions would likely apply. Iraqi property used for
commercial activity in the United States would be attachable only if Iraq waives its
immunity for that purpose, or if judgment stems from a claim that was also based on some
commercial activity and the property is or was used for that activity. 28 U.S.C. § 1610(f)
could potentially be used to satisfy outstanding terrorism judgments against Iraq against
property regulated under an executive order issued pursuant to IEEPA, if the presidential
waiver provided for in § 1610(f)(3), exercised by President Clinton in 2000, 28 U.S.C. §
1610 note, is somehow deemed to have lapsed or to be ineffective with respect to a
particular asset. 28 U.S.C. § 1610(f)(2) also likely continues to apply. It provides, in
respect to Iraq because of the executive orders that vested the frozen assets and
protect other assets from attachment by judgment creditors.161 On the other hand, 28
U.S.C. § 1610(a)(7), revoking the immunity to attachment of foreign State property
with respect to claims for which the foreign State is not immune under the terrorism
exception to the FSIA (as it existed both prior to and as amended by the NDAA),
might remain available against Iraq despite the waiver.162 If that is the case, Iraqi
government assets used for commercial purposes in the United States that are not
subject to the protection of E.O. 13303 (which covers the Development Fund for Iraq
and all interests associated with Iraqi petroleum and petroleum products),163 would
be subject to attachment and execution on valid terrorism judgments against Iraq.164
The President could, however, issue another executive order to protect all Iraqi assets
from attachment to satisfy judgments.
At the request of any party in whose favor a judgment has been issued with respect to a
claim for which the foreign state is not immune under section 1605(a)(7) (as in effect
before the enactment of section 1605A) or section 1605A, the Secretary of the Treasury
and the Secretary of State should make every effort to fully, promptly, and effectively
assist any judgment creditor or any court that has issued any such judgment in identifying,
locating, and executing against the property of that foreign state or any agency or
instrumentality of such state.
(Amendments made by § 1083 emphasized).
161 See supra notes 110-114 and accompanying text.
162 28 U.S.C. § 1610(a)(7) was amended by § 1083 to reflect the new section 28 U.S.C.
§ 1605A, but was not otherwise altered. Therefore, arguably, the waiver of § 1083 has no
impact on assets sought to be attached to satisfy judgments against Iraq under previous
163 E.O. 13303, 68 Fed. Reg. 31,931 (May 28, 2003). Section 1 states:
Unless licensed or otherwise authorized pursuant to this order, any attachment, judgment,
decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be
deemed null and void, with respect to the following:
(a) the Development Fund for Iraq, and
(b) all Iraqi petroleum and petroleum products, and interests therein, and proceeds,
obligations, or any financial instruments of any nature whatsoever arising from or related
to the sale or marketing thereof, and interests therein, in which any foreign country or a
national thereof has any interest, that are in the United States, that hereafter come within
the United States, or that are or hereafter come within the possession or control of United
164 The Administration could continue to argue that Presidential Determination No. 2003-23
(May 7, 2003), making certain anti-terrorism sanctions inapplicable with respect to Iraq (see
supra note 113) pursuant to § 1503 of EWSAA (P.L. 108-11) effectively restores immunity
to Iraqi assets. While this argument has not prevailed in the courts, and Congress included
in § 1083(c) of the FY2008 NDAA a provision approving of the courts’ interpretation that
EWSAA could not be invoked to such effect (§ 1083(c)(4)), there may be some plausibility
to the argument that Congress, by permitting the President to waive the latter provision, has
tacitly acquiesced to the President’s interpretation of EWSAA. The D.C. Circuit did not
consider whether a waiver of § 1083(c)(4) had any effect on EWSAA, concluding that its
earlier decision in Acree would control in any event. Simon, slip op. at 9. The Supreme
Court may take up the issue if it grants certiorari in Republic of Iraq v. Beaty (docket no. 07-
Possibly believing that pending cases would be dismissed due to the exercise of
the waiver provision, Congress included in § 1083 its sense that
[T]he President, acting through the Secretary of State, should work with the
Government of Iraq on a state-to-state basis to ensure compensation for any
meritorious claims based on terrorist acts committed by the Saddam Hussein
regime against individuals who were United States nationals or members of the
United States Armed Forces at the time of those terrorist acts and whose claims
cannot be addressed in courts in the United States due to the exercise of the165
waiver authority [above].
Ministry of Defense (Iran) v. Elahi
Although Iran has not appeared in court to defend itself in any of the terrorism
cases brought against it, it did nonetheless challenge a decision that allowed a
judgment-holder to collect part of a judgment against Iran out of an award owed to
Iran by a third party.166 The Ministry of Defense and Support for the Armed Forces
of the Islamic Republic of Iran (MOD) asked the Supreme Court to overturn a
decision that allowed the respondent, Dariush Elahi to attach a $2.8 million arbitral
award issued in Iran’s favor by the International Chamber of Commerce for a breach
of contract that occurred in 1979. Elahi had been awarded a default judgment of
$311.7 million in a lawsuit against Iran and its Ministry of Intelligence and Security
(MOIS) based on the 1990 the assassination of his brother, Dr. Cyrus Elahi, a
dissident who was shot to death in Paris by agents of the Iranian intelligence
service.167 Dariush Elahi and another judgment-holder, Stephen Flatow, both
attempted to intervene in MOD’s suit against Cubic Defense Systems, Inc. to attach
Iran’s award in partial satisfaction of their judgments against Iran. Flatow’s petition
was denied after the court found that he had waived his right to attach such assets by
accepting payment under section 2002 of the Victims of Trafficking and Violence168
Protection Act of 2000 (VTVPA).
Elahi’s lawsuit was one of those cases added later to section 2002 of the
VTVPA, however; and since he was only able to collect a portion of the
compensatory damages from U.S. funds, he retained the right to pursue satisfaction
165 P.L. 110-181, § 1083(d)(4).
166 Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran,
v. Cubic Defense Systems, 385 F.3d 1206 (9th Cir. 2004), rev’d and remanded sub nom.
Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v.
Elahi, 546 U.S. 450 (2006).
167 Elahi v. Islamic Republic of Iran, 124 F. Supp. 2d 97 (D.D.C. 2000).
168 Flatow chose to receive 100 percent of his compensatory damages from U.S. funds, but
in return was required to relinquish “all rights to execute against or attach property that is
at issue in claims against the United States before an international tribunal, that is the
subject of awards rendered by such tribunal, or that is subject to section 1610(f)(1)(A) of
title 28, United States Code.” The court found that the award was covered by section
1610(f)(1)(A) because it is property regulated (although not blocked) by the Office of
Foreign Assets control.
of the rest of the compensatory portion of his claim from Iranian blocked assets not
at issue before the U.S.-Iran Claims Tribunal. Iran argued that its judgment retained
immunity under the FSIA as military property.169 The court rejected Iran’s
contention, noting that MOD did not assert that the judgment would be used for
military purposes, but instead stated the money would be deposited in Iran’s central
bank.170 The court also rejected Iran’s contention that the judgment is protected as
“the property ... of a foreign central bank or monetary authority held for its own
account” within the meaning of section 1611(b)(1), because it found that language
to apply only to money held by a foreign bank “to be used or held in connection with
central banking activities.”171 MOD also sought to invoke the blocking regulations
as a bar to the attachment of the judgment, but the court rejected that argument as
well, pointing out that the transaction was permitted under a general license.
Finally, MOD sought to bring a collateral attack against Elahi’s default
judgment, contesting the jurisdiction of the court that issued it on the basis of the
alleged invalidity of the FSIA terrorism exception under the Cicippio-Puleo decision,
supra. The court, construing the jurisdictional question as one of personal
jurisdiction rather than subject-matter jurisdiction, found that MOD could have
attempted to void the judgment on this basis at the district court level, but had waited
too long to raise the issue during collateral proceedings. Because MOD was unable
to show that the district court that issued the default judgment in favor of Elahi acted
in a manner inconsistent with due process, or that the district court lacked subject-
matter jurisdiction over the case, the court affirmed the decision in favor of Elahi.
MOD petitioned for certiorari to the Supreme Court to review the decision on
several bases. MOD challenged the Ninth Circuit’s assumption that MOD is an
“agency or instrumentality” of Iran rather than an integral part of the Iranian
government without separate juridical status. This distinction has bearing under the
FSIA as to how its assets are treated and whether it can be held liable for the debts
of the Ministry of Intelligence and Security (MOIS). MOD also challenged the
assessment that the judgment due it on a military contract is not military property
under the FSIA. As to the collateral attack on Elahi’s judgment, Iran argued that in
the context of the FSIA, questions of personal jurisdiction and subject-matter
jurisdiction over a foreign sovereign are so intimately linked as to be inseparable,
which would allow MOD to dispute the validity of Elahi’s default judgment by
asserting it was founded on an invalid cause of action.
Based on the recommendation of the Solicitor General, the Supreme Court
granted certiorari only with respect to the issue of MOD’s status as an “agency or
instrumentality” of Iran. In a per curiam opinion, the Court vacated the decision
below on the grounds that MOD had not had an opportunity to present argument on
169 28 U.S.C. § 1611(b) exempts from the exception to immunity in § 1610 property that “is,
or is intended to be, used in connection with a military activity and (A) is of a military
character, or (B) is under the control of a military authority or defense agency.” The
contract dispute underlying the arbitral award had to do with non-delivery of defense
170 383 F.3d at 1222-23.
171 Id. at 1223.
the issue.172 The Ninth Circuit had erred, according to the Court, because it had
either mistakenly relied on a “concession” by the plaintiff that MOD was an “agency
or instrumentality,” or it had simply assumed that there was no relevant distinction
between those entities and a foreign State proper. The FSIA provides an exception
to the immunity from execution of the property of a foreign State only if such
property is used for commercial purposes. By contrast, the property of an “agency
or instrumentality” of a foreign State is not immune from execution if the entity is
engaged in commercial activity in the United States, regardless of whether the
property is used for the commercial activity.173
On remand, the appellate court found that MOD is a foreign State rather than
an agency or instrumentality of a foreign State, so that the judgment owed to MOD
in the Cubic Defense arbitration would have to qualify as property used for
commercial activity in order for the FSIA exception to sovereign immunity to
apply.174 The court did not regard the judgment as commercial property; however,
the court found that it was a “blocked asset” within the meaning of TRIA § 201
because it represented an interest in military equipment that Iran had acquired prior
to 1981,175 and permitted the judgment holder to attach the entire sum. One judge
dissented, arguing that the judgment should be considered “at issue” before the Iran-
U.S. Claims Tribunal in a case involving Iran’s claims against the United States for
non-delivery of military equipment. Although the judgment itself is not at issue,
Judge Fisher reasoned, it could be used by the United States as an offset in the event
Iran is eventually awarded compensation. If the judgment were considered to be at
issue before the Iran-U.S. Claims Tribunal, the plaintiff would have relinquished his
right to attach it in satisfaction of his judgment against Iran by accepting partial
payment of compensatory damages from the U.S. Treasury pursuant to TRIA § 201.
Iran again petitioned for certiorari, which the Supreme Court granted,176 to
review whether the arbitral award is a “blocked asset” within the meaning of TRIA
§ 201 and whether it is “at issue” before the Iran-U.S. Claims Tribunal and thus off-
limits to Elahi. The Solicitor General had filed a brief supporting certiorari on the
first issue but advising against a review of the second on the basis that a
determination in Iran’s favor would merely mean that the award would be used to
satisfy a judgment against Iran where the plaintiff had not relinquished his right to
attach such assets.177
172 546 U.S. 450 (2006).
173 28 U.S.C. § 1610(a).
174 495 F.3d 1024 (9th Cir. 2007).
175 Id. at 1033-35. See supra note 71 for definition of “blocked asset.”
176 Docket No. 07-615.
177 See Brief of the Solicitor General in Support of Certiorari, Elahi v. Islamic Republic of
Iran (U.S.)(No. 07-615).
109th Congress: Proposed Legislation
In addition to the bills addressing the Acree decision, (H.R. 1321 and
H.Con.Res. 93, discussed supra) and one bill to provide compensation in the Roeder
case (H.R. 3358), two other bills in the 109th Congress were introduced in an effortth
to untangle the state of litigation against terrorist States. H.R. 865/S. 1257, 109
Congress, would have repealed the Flatow Amendment and enacted a new subsection
(h) after the current 28 U.S.C. § 1605 to provide an explicit cause of action against
foreign terrorist States as well as their agents, officials and employees, making them
liable “for personal injury or death caused by acts of that foreign State, or by that
official, employee, or agent while acting within the scope of his or her office,
employment, or agency, for which the courts of the United States may maintain
jurisdiction under subsection (a)(7) for money damages.” The bill would have
authorized money damages for such actions to include economic damages, solatium,
damages for pain and suffering, and punitive damages, and it would have made a
foreign State vicariously liable for the actions of its officials, employees, or agents.
It also contained provisions to facilitate the attachment of property in aid of execution
of such judgments. The bill would have provided that the removal of a foreign State
from the list of designated foreign State sponsors of terrorism would not terminate
a cause of action that arose during the period of such designation, and would have
made the above amendments effective retroactively to permit some plaintiffs to
revive dismissed cases.
H.R. 6305/S. 3878 (109th Congress) would have directed the President to set up
a claims commission to hear claims on behalf of U.S. nationals who were victims of
hostage-taking by a foreign State or other terrorist party, permitting awards of up to
$500,000, adjusted to reflect the annual percentage change in the Consumer Price
Index. The Iran hostages and family members who were named in the Roeder case
would have been eligible for additional compensation. Plaintiffs with unsatisfied
judgments against terrorist States would have been permitted to bring a claim for
compensation; however, recipients of compensation would have been unable to
commence or maintain a lawsuit against a foreign State or its agencies and
instrumentalities based on the same conduct. Members of the Armed Services taken
hostage after August 2, 1990, would not have been eligible to seek compensation
under the plan. Payment of awards was to come from the Hostage Victims’ Fund,
into which the President would have been authorized to allocate blocked assets, any
funds recovered by the United States against persons for improper activity in
connection with the Oil for Food Program of the United Nations, and any amounts
forfeited or paid in fines for violations of various laws and regulations.
The National Defense Authorization Act for FY2008, § 1083
The Justice for Victims of State Sponsored Terrorism Act, S. 1944, was passed
by the Senate as Section 1087 of the National Defense Authorization Act for Fiscal
Year 2008 (NDAA FY2008), H.R. 1585. A modified version of the provision, a
measure to facilitate lawsuits against terrorist States, was included by House and
Senate Conferees as section 1083, Terrorism Exception to Immunity.178 After
President Bush vetoed H.R. 1585 due to the negative impact the measure was
predicted to have on Iraq’s economy and reconstruction efforts,179 Congress passed
a new version, H.R. 4986, which includes authority for the President to waive the
FSIA provision with respect to Iraq. The President signed the bill into law on
January 28, 2008. (P.L. 110-181).
Cause of Action and Abrogation of Immunity. Section 1083 creates a
new section 1605A in title 28, U.S. Code, to incorporate the terrorist State exception
to sovereign immunity under the FSIA previously codified at 28 U.S.C. § 1605(a)(7)
and a cause of action against designated State sponsors of terrorism, in lieu of the
Flatow Amendment. The exception to immunity and new cause of action against
such States apply to cases in which money damages are sought for personal injury or
death caused by certain defined terrorist acts or the provision of material support
when conducted by an official, agent, or employee of the State acting within the
scope of his or her office, employment, or agency, regardless of whether a U.S.
official could be held liable under similar circumstances.
The cause of action is stated in subsection (c) of new §1605A, and covers
foreign terrorist States as well as their agents, officials and employees, making them
liable for personal injury or death caused by acts for which the courts of the United
States may maintain jurisdiction under the subsection. It spells out the types of
damages that may be recovered, including economic damages, solatium, pain and180
suffering, and punitive damages. The foreign State is to be held vicariously liable
178 See H.Rept. 110-477 (to accompany H.R. 1585).
179 See Notification of the Veto of H.R. 1585, supra note 151.
180 Punitive damages are available under other exceptions to the FSIA only with respect to
agencies and instrumentalities of foreign governments. The FSIA provision for liability and
damages is 22 U.S.C. § 1606:
As to any claim for relief with respect to which a foreign state is not entitled to immunity
under section 1605 or 1607 of this chapter, the foreign state shall be liable in the same
manner and to the same extent as a private individual under like circumstances; but a
foreign state except for an agency or instrumentality thereof shall not be liable for punitive
damages; if, however, in any case wherein death was caused, the law of the place where
the action or omission occurred provides, or has been construed to provide, for damages
only punitive in nature, the foreign state shall be liable for actual or compensatory
damages measured by the pecuniary injuries resulting from such death which were
incurred by the persons for whose benefit the action was brought.
for the actions of its officials, employees, or agents. Subsection (d) provides that, in
connection with the personal injury claims it authorizes, actions may also be brought
for reasonably foreseeable property loss, regardless of insurance coverage, for third
party liability, and for life and property insurance policy losses.
New 28 U.S.C. § 1605A expands jurisdiction beyond cases involving U.S.
nationals as a victim or claimant, expressly to include U.S. nationals, members of the
Armed Forces,181 and government employees and contractors “acting within the
scope of their employment when the act upon which the claim is based occurred.”
As was previously the case, if the act giving rise to the suit occurred in the foreign
State being sued, the claimant must first afford that State a reasonable opportunity
to arbitrate the claim. The language also directs that claims be heard in cases in
which the “act [of terrorism]...is related to Case Number 1:00CV03110 (EGS) in the
United States District Court for the District of Columbia,” notwithstanding the other
jurisdictional requirements listed. This appears intended to enable those held hostage
at the U.S. embassy in Iran to bring suit, although the named case was ultimately
dismissed.182 However, the language does not expressly abrogate the Algiers
Accords, making a victory for those plaintiffs seemingly unlikely in the event they
refile their claims.183
Limitations and Procedures. The statute of limitations for claims under the
act requires the commencement of an action within 10 years after April 24, 1996 or184
The Flatow Amendment permitted punitive damages against “an official, employee, or agent
of a foreign state.” P.L. 104-208, Title I, §101(c) [Title V, § 589] (September 30, 1996), 110
Stat. 3009-172; codified at 28 U.S.C. § 1605 note. Some courts have awarded punitive
damages against foreign governments and officials (including heads of State) by construing
them to be agencies, instrumentalities, agents, employees, or officials or by reference to the
doctrine of vicarious liability. See Appendix A for damages awarded in particular cases.
181 Members of the Armed Services who are not U.S. citizens would likely be considered
U.S. nationals. See, e.g., Peterson v. Islamic Republic of Iran, 515 F. Supp. 2d 25, 40
(D.D.C. 2007). Nothing in the FSIA expressly excludes servicemembers and their family
members from suing under the terrorism exception, but some judges have applied a test to
determine whether servicemembers are serving in a non-combatant role. See Estate of
Heiser v. Islamic Republic of Iran, 466 F. Supp. 2d 229, 258 (D.D.C. 2006); Peterson v.
Islamic Republic of Iran, 264 F. Supp. 2d 46 (D.D.C. 2003); Blais v. Islamic Republic of
Iran, 459 F. Supp. 2d 40 (D.D.C. 2006); Prevatt v. Islamic Republic of Iran, 421 F. Supp.
182 See supra at 27-32 (describing Roeder case).
183 It appears the plaintiffs in the case have filed a new claim. Roederv. Islamic Republic
of Iran, Civil Case No. 1:2008cv00487 (D.D.C. filed March 21, 2008).
184 28 U.S.C. § 1605A(b). Prior to amendment, the FSIA specified that calculations of the
statute of limitations in these cases are subject to equitable tolling, “including the period
during which the foreign state was immune from suit.” 28 U.S.C. § 1605(f). Some courts
had interpreted the equitable tolling provision to extend the statute of limitations to 10 years
barred six months after a defendant State has been removed from the list of State
sponsors of terrorism.185
Subsection (c)(2) amends the Victims of Crime Act by changing the effective
date to October 23, 1988 (instead of December 21, 1988), and expressly includes
investigations in civil matters. This will make available funds under the Victims of
Crime Act, 42 U.S.C. § 10603(c), to pay costs associated with appointment of a
special master to determine civil damages for the bombing of the Marine barracks in
Lebanon in 1983.186 Subsection (e) provides for the appointment of special masters
to assist the court in determining claims and damages, to be funded from the Victims
of Crime Act of 1984 for victims of international terrorism (42 U.S.C. § 10603c).
Subsection (f) makes interlocutory appeals subject to 28 U.S.C. § 1292(b), which
limits interlocutory appeals.
Lis Pendens. Section 1083 does not expressly provide for prejudgment
attachment of property in anticipation of a judgment.187 However, new 28 U.S.C. §
1605A(g) provides for the establishment of an automatic lien of lis pendens with
respect to all real or tangible personal property188 located within the judicial district
that is subject to attachment in aid of execution under 28 U.S.C. § 1610 and is titled
in the name of a defendant State sponsor of terrorism or any entities listed by the
beyond the enactment of the original § 1605(a)(7) in 1996, while other courts had not, which
resulted in the dismissal of some claims filed prior to the new cut-off date in April 2006.
However, the D.C. Circuit has found that the statute of limitations under the original
§ 1605(a)(7) was meant to extend to April 2006 for claims arising prior to April 1996.
Simon v. Republic of Iraq, 2008 WL 2497417 (D.C. Cir. 2008), rev’g in part Vine v.
Republic of Iraq, 459 F. Supp. 2d 10 (2006).
185 28 U.S.C. § 1605A(a)(2). The defendant State must also have been a designated sponsor
of terrorism when the act occurred or subsequently designated as such as a result of the act
of terrorism that gives rise to the claim, as long as it “remains so designated when the claim
is filed” or “was so designated within the 6-month period before the claim is filed.”
186 Peterson v. Islamic Republic of Iran, 264 F. Supp. 2d 46 (D.D.C. 2003)(suit brought by
those injured as a result of the 1983 bombing of the Marine barracks in Lebanon). Special
masters were appointed in this case, which involved nearly one thousand plaintiffs, and
damages of $2,656,944,877.00 were awarded. Peterson v. Islamic Republic of Iran, 515 F.
Supp. 2d 25 (D.D.C. 2007). A default judgment was entered against Iran in another case
involving the Marine barracks bombing, Valore v. Islamic Republic of Iran, 478 F. Supp.
187 Prejudgment attachments of property used for commercial activity in the United States
owned by a foreign government are permissible only if the foreign state expressly waives
sovereign immunity for that purpose. 28 U.S.C. § 1610(d).
188 “Tangible personal property” is not defined. Personal property is generally understood
to encompass property that is not real property, that is, real estate. Tangible property is
generally understood to mean “all property which is touchable and has real existence
(physical) whether real or personal,” while “intangible property” is “such property as has
no intrinsic and marketable value, but is merely the representative or evidence of value.”th
BLACK’S LAW DICTIONARY 809, 1217 (6 ed.1990). However, some courts have treated
cash, stock certificates, and the like as tangible, at least in some contexts, while other courts
treat currency and stock as intangible representations of value.
plaintiff as “controlled by” that State,189 upon the filing of a notice of action in
complaints that rely on the terrorism exception to the FSIA. The liens of lis pendens
are expressly made enforceable pursuant to chapter 111 of title 28, U.S. Code. That
chapter, however, does not establish federal procedures for enforcing lis pendens,
although it does provide procedures for the enforcement of other liens in the event
a defendant fails to enter an appearance.190 Federal law provides for the application
of state law regarding lis pendens,191 and these rules vary by state.192 Ordinarily, the
doctrine of lis pendens applies only to specific property at issue in a dispute, which
must be described with sufficient specificity and in some cases recorded to enable a
prospective purchaser to identify it. Lis pendens applies with respect to only the
property described in the notice, and cannot affect other property of a defendant.193
It is not ordinarily available in suits seeking money judgments over matters unrelated
to the property unless and until a valid judgment has been awarded.194 It does not
generally apply to negotiable instruments.195
Ordinarily, the purpose of filing a lien of lis pendens in civil litigation is to put
third parties on notice that the property is the subject of litigation, which effectively
prevents the alienation of such property, although it is not technically a lien or a
prejudgment attachment. It does not prevent or invalidate transactions involving the
property, and its intent is not to aid either side in the underlying dispute.196 Its effect
is to bind a person who acquires an interest in property subject to litigation to the
result of the litigation as if he or she were a party to it from the outset.197 Because the
resulting cloud on title can have a detrimental effect on the value of property and the
right of enjoyment, courts in some jurisdictions have the discretion to require the lis
pendens proponent to post a bond when the defendant property owner can show that
189 “Controlled by” is not further defined. Under 28 U.S.C. § 1610, as amended, the
property of a foreign State (including interests held directly or indirectly in a separate
juridical entity), is subject to execution regardless of the level of economic control the State
exercises over the property or the degree to which officials of that government manage the
property or otherwise have a hand in its daily affairs. It may be questioned whether
lobbyists or attorneys registered as agents of a State sponsor (or former sponsor) of terrorism
under the Foreign Agents Registration Act (FARA), 22 U.S.C. §§ 611 et seq., are entities
“controlled by” that for the purpose of 28 U.S.C. §§ 1605A(g) and 1610(g) such that their
property would be subject to lis pendens.
190 28 U.S.C. § 1655. This provision is for the enforcement of an actual lien, which creates
an enforceable property interest, so it would not likely apply to lis pendens notices.
191 28 U.S.C. § 1964 (constructive notice of pending action involving real estate).
192 Most states require that (1) the complaint must raise the issue of interest in or title to real
property; (2) the property affected must be sufficiently described; and (3) the notice must
be filed with or after, but not prior to, the complaint.
193 54 C.J.S. Lis Pendens § 31 (1987).
194 Id. § 11.
195 Id. § 10.
196 51 AM. JUR. 2D Lis Pendens § 2.
197 Id. § 34.
damages are likely in the event the notice of lis pendens is unjustified.198 Some states
require that the court expunge a lis pendens notice on evidence that the litigation is
not the type contemplated by the relevant statute or that the proper procedures were
followed.199 Some state statutes permit the court to cancel a notice of lis pendens if
the defendant posts bond or provides some other substitute security, if adequate relief
for the claimant may be secured by these means.200
For recording the lis pendens liens in suits filed under section 1605A, the clerk
of the district court is required to file the notice of action “indexed by listing as
defendants and all entities listed as controlled by any defendant.” This appears to be
intended to relieve plaintiffs of the burden of identifying specific property in the
notices, but it is unclear what further measures might be required to ensure adequate
notice is afforded to prospective purchasers or how it is to be determined without
further process that the property is in fact subject to attachment, if the statute is
interpreted to require such a showing.201 With respect to real property, federal law
ordinarily requires compliance with recordation or indexing procedures applicable
in the state where the property is located in order to give constructive notice of an
action pending in a United States district court.202 State procedures typically require
that notices of lis pendens affecting real estate are recorded with the local registry of
deeds, although in some cases notice is deemed valid as long as the pleadings
adequately describe the property at issue.203 A notice of lis pendens that is not
properly recorded may be held ineffective as to the rights of a subsequent
purchaser.204 If the filing requirement in section 1605A(g) is deemed to replace state
statutes and to give constructive notice to prospective purchasers, such purchasers
who have no actual notice of the lis pendens could raise due process claims.205
198 51 AM. JUR. 2D Lis Pendens § 51.
199 Id. § 65.
200 54 C.J.S. Lis Pendens § 34.
201 The requirement that the property be subject to attachment under 28 U.S.C. § 1610 can
be read two ways. It can be read to require that the property would be subject to execution
to satisfy a judgment based on the specific claim at issue because it is property described in
28 U.S.C. § 1610(g), or it can be read to require merely that the property does not qualify
for foreign sovereign immunity. The legislative history suggests that the intent is to protect
property used for diplomatic or consular purposes rather than to ensure that lis pendens
notices have effect only with respect to property that is ultimately subject to attachment to
satisfy a judgment on a particular claim. This interpretation is problematic because the
provision seems to cover all property titled in any entity identified by the plaintiff as
controlled by the defendant state, which could encompass property in which the defendant
state has no interest, and where the property owner is not a defendant to the action.
202 28 U.S.C. § 1964.
203 54 C.J.S. Lis Pendens § 23.
204 Id. § 24.
205 See Connecticut v. Doehr, 501 U.S. 1, 11 (1991) (prejudgment measures affecting
property rights, even if short of property seizure, must comport with due process). However,
numerous courts have validated state lis pendens statutes providing for constructive notice
if recordation procedures were followed, even without prior notice and a hearing for the
The provision appears to have no effect on actions in state courts, which are less
frequently the venue for lawsuits under the terrorism exception to the FSIA,206
although lis pendens will be available under the applicable state law under the
ordinary state court procedures for property that qualifies.
In the case of State sponsors of terror, whose property for the most part is
already subject to substantial limitations on transactions, the primary utility may be
the establishment of a line of priority among lien-holders, to determine which
successful plaintiffs have priority in collecting from the defendant’s assets. One
function of a lis pendens notice is to preserve for the plaintiff a priority over all
subsequent lienors, purchasers, and encumbrancers. Because the notice “relates
back” to the date of its filing, other plaintiffs who seek to attach property to execute
on a judgment may take such property subject to the lis pendens of plaintiffs with
pending cases against the same defendant who filed notice previously, even though
the complaints may have been filed at a later date and no award has yet been issued.
On the other hand, the extension of lis pendens over property owned by entities
believed by plaintiffs to be “controlled by” the defendant State could potentially
affect property that is not already subject to sanctions. Depending on how broadly
the provision is construed, its exercise could deter transactions. In the case of States
that are no longer subject to terrorism sanctions, the lis pendens provision could
threaten lawful transactions and impose a new barrier to trade.207 As long as there are
property owner. See 51 AM. JUR. 2D Lis Pendens § 9.
206 At least seven such suits have yielded default judgments. In Martinez v. Republic of
Cuba, No. 99-018208 CA 1 (Miami-Dade Co., Fla., 11th Cir. Ct. decided March 9, 2001),
a woman was awarded $27.1 million by the Miami-Dade Court, Florida, for sexual battery
based on her marriage by fraud to a Cuban spy. In Weininger v. Republic of Cuba, No.th
03-22920 CA 20 (Miami-Dade Co., Fla., 11 Cir. Ct. decided November 11, 2004), the same
court awarded $86,562,000.00 to the daughter of a CIA pilot who was shot down over Cuba
during the Bay of Pigs invasion and subsequently executed. The court also awarded $67
million to the daughter of a U.S. businessman who was tried as a spy and executed in the
aftermath of the Cuban Revolution, McCarthy v. Republic of Cuba, No. 01-28628 CA04th
(Miami-Dade Co., Fla., 11 Cir. Ct. decided April 17, 2003), and $400 million to the
siblings and daughter of a plantation owner’s son executed after by the Castro regime a
sham military trial, Hausler v. Republic of Cuba, No. 02-12475 CA 01 (Miami-Dade Co.,th
Fla., 11 Cir. Ct., decided January 19, 2007). In Jerez v. Republic of Cuba, No. 05-18719th
CA 9 (Miami-Dade Co., Fla., 11 Cir. Ct., decided January 30, 2007), the court awarded
$200 million to a Cuban dissident arrested in 1964 and thereafter subjected to torture in
prison and in a psychiatric hospital. (Jerez does not involve a U.S. citizen and does not
appear to rely on the FSIA for jurisdiction, leaving the jurisdictional basis unclear). In Verath
v. Republic of Cuba, No. 01-31216-CA-01 (Miami-Dade Co., Fla., 11 Cir. Ct., decided
May 15, 2008), the court awarded $94.6 million to the estate and family of a dissident who
was murdered in Puerto Rico in 1976, and in Suarez v. Republic of Cuba, No. 05-25387th
CA-27 (Miami-Dade Co., Fla., 11 Cir. Ct., decided April 4, 2008), the court awarded $253
million to the family of a former friend of Fidel Castro who was imprisoned in 1959 and
died in prison in 1977. (Cuba was designated a state sponsor of terrorism in 1982).
207 In vetoing the original bill, President Bush argued that the provision would
pending claims or outstanding judgments against such a State under the terrorism
exception to the FSIA, U.S. companies doing business with it may be subject to
litigation by plaintiffs and judgment creditors who believe the U.S. company is in
possession of foreign property that is subject to execution on a terrorism judgment.
Any real property or tangible property in which the defendant State has an interest
may be rendered effectively inalienable by lis pendens notices. If a U.S. company is
selling tangible goods to a former State sponsor of terrorism, an automatic lien of lis
pendens on goods purchased but not yet delivered would probably not affect the
company’s ability to make delivery. Companies that buy property from such a
country, however, could potentially lose title of the property to plaintiffs who are
awarded a judgment.
Property Subject to Execution. Subsection (b)(3) of section 1083,
P.L.110-181 amends 28 U.S.C. § 1610 to address which property of foreign States208
is subject to levy in execution of terrorism judgments against those States. It adds
a new subsection (g) to 28 U.S.C. § 1610 to provide that the property of a foreign
State against which a judgment has been entered under section 1605A, or of an
agency or instrumentality of such a foreign 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, regardless of how much economic control over that property the foreign
government actually exercises and whether the government derives profits or benefits
permit plaintiffs to obtain liens on certain Iraqi property simply by filing a notice of
pending action. Liens under section 1083 would be automatic upon filing a notice of a
pending claim in a judicial district where Iraq’s property is located, and they would reach
property up to the amount of the judgment plaintiffs choose to demand in their complaints.
Such pre-judgment liens, entered before claims are tested and cases are heard, are
extraordinary and have never previously been available in suits in U.S. courts against
foreign sovereigns. If permitted to become law, even for a short time, section 1083’s
attachment and lien provisions would impose grave — indeed, intolerable —
consequences on Iraq.
Notification of the Veto of H.R. 1585, supra note 151. Businesses could also be deterred
by the lis pendens and other assets provisions of § 1083 from engaging in commercial
transactions with Libya. See Sue Pleming, U.S. Ties with Libya Strained over New Law,
REUTERS (February 22, 2008) (noting criticism by Libyan diplomats and the U.S.-Libya
Business Association, who argues the law will threaten trade by raising “major litigation
risks” for U.S. businesses seeking to take advantage of renewed ties with Libya).
208 In order for property to be attached, it must also fall under an exception to sovereign
immunity or otherwise fail to qualify for immunity. 28 U.S.C. § 1610(a)(7) abrogates
immunity with respect to the property of a foreign State used for a commercial activity in
the United States when “the judgment relates to a claim for which the foreign state is not
immune” under section 1605A or predecessor statute, “regardless of whether the property
is or was involved with the act upon which the claim is based.” (This exception does not
apply to foreign central bank or monetary authority held for its own account or property of
a military character or that belongs to a military authority. 28 U.S.C. § 1611(b)). Any
property belonging to an agency or instrumentality of a foreign State engaged in commercial
activity in the United States is not immune from attachment to satisfy judgments under
section 1605A, regardless of whether the property is used for commercial activity or relates
to the claim.
from it. It also allows execution on the property where “establishing the property as
a separate entity would entitle the foreign State to benefits in [U.S.] courts while
avoiding its obligation.”209 It does not provide the President any waiver authority
(except with respect to Iraq). It does not abrogate sovereign immunity of other States
that have possession of any assets of a defendant State.210
According to the Committee report accompanying the NDAA, the purpose of
the provision is to enable any property in which the foreign state has a beneficial
ownership to be subject to execution for terrorism judgments, except for diplomatic
and consular property.211 The proposed language suggests that the “property” at issue
is or belongs to a commercial entity in which the foreign government has an interest.
The language renders subject to execution any property (including interests held
directly or indirectly in a separate juridical entity) of the defendant foreign State
regardless of five criteria set forth in subsection (g)(1):
(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 have a hand in its daily affairs;
(D) whether that government is the sole beneficiary in interest of the
(E) whether establishing the property interest as a separate entity would
entitle the foreign state to benefits in [U.S.] courts while avoiding its
Courts ordinarily consider these criteria in determining whether an entity is an
“alter ego” of a foreign government for liability purposes212 or is an “agency or
209 This clause appears designed to avoid the application of the Supreme Court decision in
First Nat’l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611 (1983)
(“Bancec”) to judgments against designated terrorist States. Bancec held that duly-created
instrumentalities of a foreign State are to be accorded a presumption of independent status,
but that this presumption may be overcome where such recognition would permit the foreign
State to pursue a claim in United States courts while itself escaping liability by asserting
immunity. The proposed language could allow a judgment creditor to “pierce the corporate
veil”of a corporation owned, in whole or in part, by a judgment debtor State without having
to demonstrate to the court that the presumption of independent status should be overridden.
210 See Peterson v. Islamic Republic of Iran, slip op., Civil Action No. 01-2094 (D.D.C.
2008) (order denying motion to appoint receivership to levy against bank holdings in foreign
211 H.Rept. 110-477, Conference Report to Accompany H.R. 1585, National Defense
Authorization Act for Fiscal Year 2008, at 1001.
212 See Flatow v. Islamic Republic of Iran, 67 F. Supp. 2d 535, 539 (D. Md. 1999), aff’d sub
nom. Flatow v. Alavi Foundation, 225 F.3d 653 (4th Cir. 2000) (holding “a principal-agent
relationship has been created for the purposes of the FSIA when the foreign sovereign
exercises day-to-day control over its activities”(citing McKesson Corp. v. Islamic Republic
of Iran, 52 F.3d 346, 351-52 (D.C. Cir.1995); see also Hester Int’l Corp. v. Federal
instrumentality” of the foreign government for purposes of determining whether it
is entitled to immunity.213 An entity that is not an agency or instrumentality of a
foreign government is not entitled to sovereign immunity, but neither are its assets
subject to attachment in execution of a judgment awarded against that foreign
government. This is not due to sovereign immunity, but because a judgment creditor
may not levy against a third party’s property in order to satisfy a money judgment
against a judgment debtor.214 The new language could be read as an effort to make
any entity in which the judgment debtor foreign State (including its separate agencies
and instrumentalities) has any interest liable for the terrorism-related judgments
awarded against that State,215 even if the entity is not itself an agency or
instrumentality of the State.216 The conferee’s intent to enable execution on property
Republic of Nigeria, 879 F.2d 170, 178-80 (5th Cir.1989) (holding that an entity in which
Nigeria held 100% of its stock was not an agent because there was no showing of day-to-day
control); Baglab Ltd. v. Johnson Matthey Bankers Ltd., 665 F. Supp. 289, 297
(S.D.N.Y. 1987) (holding that the plaintiff failed to overcome the presumption of
separateness because it failed to prove that the Bank of England exercised “general control
over the day-to-day activities” of an entity so that the entity could be deemed an agent).
213 See Alejandre v. Telefonico Larga Distancia de Puerto Rico, 183 F.3d 1277, 1283 & n.
13 (11th Cir. 1999) (noting the court “conduct[s] exactly the same inquiry in order to
determine both whether an exception to the Cuban Government’s immunity from
garnishment also applies to [Empresa de Telecomunicaciones de Cuba, S.A. (“ETECSA”)]
and whether ETECSA can be held substantively liable for the Government’s debt to the
plaintiffs: namely, whether the plaintiffs have overcome the presumption that ETECSA is
a juridical entity separate from the Government”). But see Dole Food Co. v. Patrickson, 538
U.S. 468, 477 (2003) (foreign government’s control over day-to-day operations of subsidiary
company was not relevant to establishing whether the company was itself an
“instrumentality” of that government for purposes of immunity; the direct ownership of a
majority of shares was the controlling factor).
214 See Flatow, 67 F. Supp. 2d at 538 (“In order to levy against a third-party’s property, the
judgment creditor must prove that the property of a third-party can be seized because: (1)
the third-party is an agent, alter ego, or instrumentality of the judgment debtor; (2) the
third-party is a garnishee of the judgment debtor; or (3) there was a conveyance of property
between the judgment debtor and the third-party which was motivated by the intent to
defrauding creditors.”). In this case, the third-party owner of the property was found not to
be an agency or instrumentality of a foreign government because it was a corporation
formed under the laws of New York.
215 The provision could be construed as intended to overturn results in cases like Flatow v.
Alavi Foundation, 225 F.3d 653 (4th Cir. 2000), in which a judgment creditor made an
unsuccessful effort to levy against real property owned by a corporation that was neither an
agency or instrumentality of Iran nor a subsidiary of such an agency or instrumentality, and
the Bancec test was not found to be met. It is unclear how the removal of the Bancec test
for determining third-party liability will assist the court in determining the sovereign
ownership of a property interest that a creditor seeks to attach, without the use of a separate
test for determining ownership, which § 1083 does not provide.
216 For a corporation to qualify as an agency or instrumentality of a foreign government, the
foreign government must own directly a majority of its shares. Dole Food Co. v. Patrickson,
538 U.S. 468 (2003). Subsidiary companies owned by an instrumentality of a foreign
in which the defendant state has beneficial ownership217 seems contradicted by the
statement that the property is subject to execution regardless of whether the “profits
of the property go to that government” or “whether that government is the sole
beneficiary in interest of the property.”
On the other hand, subparagraph (3) addresses the rights of third parties who
also have an interest in the property that may be subject to levy in execution on a
judgment. Captioned “Third-Party Joint Property Holders,” it states that nothing in
the new section 1610(g) is to be construed as superceding the authority of a court to
prevent the impairment of an interest held by a person “who is not liable in the action
giving rise to a judgment.” The conference report states the intent of the conferees
was to “encourage the courts to protect the property interests of such innocent third
parties by using their inherent authority, on a case-by-case basis, under the applicable
procedures governing execution on judgment and attachment in anticipation of
judgment.”218 Nonetheless, this savings language is not easily squared with the
provision’s stated applicability to indirectly held property, without regard to the
benefit the debtor government derives from the property. Moreover, agencies or
instrumentalities of foreign governments have not generally been considered to be
liable for the debts of the foreign government itself or for other agencies or
instrumentalities. Subparagraph (3) could be read to permit the court to protect their
assets as well, although subparagraph (1) appears intended to make their assets
available to satisfy terrorism judgments against the foreign State.219
Blocked and Regulated Property under Sanctions Regulations. New
subsection (g)(2), captioned “U.S. sovereign immunity inapplicable,” would make
a property described in (g)(1) that is regulated by reason of U.S. sanctions not
immune by reason of such regulation from execution to satisfy a judgment. It would
not explicitly waive U.S. sovereign immunity,220 but appears designed to defeat
government are not themselves instrumentalities of the foreign government.
217 H.Rept. 110-477 at 1001-02.
219 Cf. Weininger v. Castro, 462 F. Supp. 2d 457, 485 (S.D.N.Y. 2006) (interpreting TRIA
§ 201, which makes subject to levy “the blocked assets of [the defendant] terrorist party
(including the blocked assets of any agency or instrumentality of that terrorist party)” to
“obviate analysis of the Bancec presumption”). Like TRIA § 201, new 28 U.S.C. § 2610(g)
permits the use of the assets of an agency or instrumentality of a State sponsor of terrorism
to be used to satisfy terrorism judgments against the State itself. Compare 28 U.S.C.
§ 2610(g) with § 2610(f)(1), which provides that blocked and regulated property is “subject
to execution or attachment in aid of execution of any judgment relating to a claim for which
a foreign state (including any agency or instrumentality of such state) claiming such
property is not immune [under the terrorism exception].” This provision has been
interpreted as not obviating the Bancec presumption. 462 F. Supp. 2d at 486 (citingth
Alejandre v. Telefonica Larga Distancia de Puerto Rico, Inc., 183 F.3d 1277, 1287 (11
220 For a court to recognize a waiver of U.S. sovereign immunity, it must be “unequivocally
expressed in the statutory text” and “is to be strictly construed, in terms of its scope, in favor
provisions in the sanctions regulations that make blocked property effectively
immune from court action.221 In this respect, it echoes language in current
§ 1610(f)(1), except that it applies only to regulated property rather than property that
is blocked or regulated pursuant to sanctions regimes, and it would not be subject to
the presidential waiver in § 1620(f)(3). Unlike § 201 of TRIA (28 U.S.C. § 1610
note), the new language applies to regulated rather than blocked assets,222 and it
allows assets to be attached in aid of enforcing punitive damages.
Despite its caption, new section (g)(2) will not likely make funds in the U.S.
Treasury, such as any funds set aside to pay a debt to Iran223 or those held in the
Foreign Military Sales (FMS) trust fund account presently under dispute between Iran
and the United States, reachable by judgment creditors.224 Even if the provision is
read to waive U.S. sovereign immunity, these funds remain the property of the United
States and could not be used to satisfy the debt of another party. A contrary
interpretation of the provision might implicate other policy concerns. To allow
attachment of the FMS trust fund would eliminate the U.S.’ ability to claim a right
to those funds in subrogation of payments made pursuant to VTVPA § 2002 in the
event the Iran-U.S. Claims Tribunal issues an award in Iran’s favor, and could also
breach U.S. obligations under the Algiers Accords. New subsection (g)(2) will not
of the sovereign.” See Weinstein at 56 (citing Department of the Army v. Blue Fox, Inc.,
221 See, e.g., 31 C.F.R.§ 335.203(e) (“Unless licensed or authorized pursuant to this part any
attachment, judgment, decree, lien, execution, garnishment, or other judicial process is null
and void with respect to any property in which on or since the effective date there existed
an interest of Iran.”); 31 C.F.R. § 575.203(e) (same, with respect to Iraq).
222 TRIA § 201(d)(2) defines ‘blocked asset’ to mean property seized or frozen pursuant to
certain sanctions, but not property that may be transferred pursuant to a license that is
required by statute other than IEEPA or the United Nations Participation Act of 1945. It
also excludes diplomatic or consular property being used solely for diplomatic or consular
purposes, from the definition of “blocked asset.” TRIA does not refer to regulated assets,
so it is unclear whether “blocked” and “regulated” are mutually exclusive terms, or whether
“blocked” assets would be considered to be “regulated” as well. At least one court has
found that the two terms are not equivalent. See Weinstein v. Islamic Republic of Iran, 299
F. Supp. 2d 63, 76 (E.D.N.Y. 2004) (rejecting the argument that TRIA equates “regulated”
with “blocked”). In any event, TRIA § 201 remains in force for use in efforts to attach
blocked property to satisfy judgments that were awarded under 28 U.S.C. § 1605(a)(7),
subject to the applicable restrictions, apparently even if the property would otherwise be
immune under 28 U.S.C. §§ 1610 or 1611.
223 See Flatow v. Islamic Republic of Iran, 74 F. Supp. 2d 18 (D.D.C. 1999) (holding that
FSIA terrorist State provisions exceptions did not authorize attachment of United States
Treasury funds owed to Iran in accordance with an award of the Iran-United States Claims
Tribunal, as such funds remained the property of the United States, and the amendments did
not contain the express and unequivocal waiver required to abrogate the United States’
224 See Weinstein, 299 F. Supp. 2d at 58 (“[F]unds held in the U.S. Treasury — even though
set aside or ‘earmarked’ for a specific purpose — remain the property of the United States
until the government elects to pay them to whom they are owed.”). For more information
about the FMS account and its contents, see supra notes 50-51.
likely affect the rights of those who received U.S. funds in partial payment of their
judgments against Iran, who will likely remain barred by the applicable provisions
of VTVPA § 2002 from attaching certain property or attempting (in certain cases) to
collect the punitive portions of their damages.
Application to Pending Cases. Subsection (c) of the § 1083 spells out how
its amendments are to apply to pending cases. It states that the amendments apply
to any claim arising under them as well as to any action brought under current 28
U.S.C. § 1605(a)(7) or the Flatow Amendment that “relied on either of these
provisions as creating a cause of action” and that “has been adversely affected on the
grounds that either or both of these provisions fail to create a cause of action against
the state,” and that “is still before the courts in any form, including appeal or motion225
under rule 60(b) of the Federal Rules of Civil Procedure....” In cases brought
under the older provisions, the federal district court in which the case originated is
required, on motion by the plaintiffs within 60 days after enactment, to treat the case
as if it had been brought under the new provisions, apparently to include reinstating
vacated judgments. The subsection also states that the “defenses of res judicata,
collateral estoppel and limitation period are waived” in any reinstated judgment or
refiled action. The language does not indicate how pending cases in state courts are
to be handled. The provision does not appear to permit the refiling of actions to
override decisions construing the statute of limitations strictly. However, it might be
read to permit post-judgment relief to pursue increased awards, possibly including226
punitive damages, where the application of state law or other law to a claim
resulted in a lower award than would have been permitted pursuant to the Flatow
225 Fed. R. Civ. Pro. 60(b) provides
On motion and upon such terms as are just, the court may relieve a party or a party’s legal
representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in
time to move for a new trial under Rule 59 (b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or
other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon
which it is based has been reversed or otherwise vacated, or it is no longer equitable that
the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment. The motion shall
be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year
after the judgment, order, or proceeding was entered or taken. A motion under this
subdivision (b) does not affect the finality of a judgment or suspend its operation. This
rule does not limit the power of a court to entertain an independent action to relieve a
party from a judgment, order, or proceeding, or to grant relief to a defendant not actually
personally notified as provided in Title 28, U.S.C., § 1655, or to set aside a judgment for
fraud upon the court. Writs of coram nobis, coram vobis, audita querela, and bills of
review and bills in the nature of a bill of review, are abolished, and the procedure for
obtaining any relief from a judgment shall be by motion as prescribed in these rules or by
an independent action.
226 In some cases, federal statute may provide a cause of action. See Rux v. Republic of
Sudan, 495 F. Supp. 2d 541 (E.D. Va. 2007) (Death on the High Seas Act, 41 Stat. 537, 46
U.S.C. app. §§ 761-67, applied to suit involving the terrorist attack on the U.S.S. Cole in
Amendment if it had been read to provide a federal cause of action.227 It could be
interpreted to permit the amendment of judgments against officials in their private
capacity to make the foreign State responsible for the debt.
In addition, subparagraph (3) permits the filing of new cases involving incidents
that are already the subject of a timely-filed action under any of the terrorism
exceptions to the FSIA. This appears to allow victims of State-supported terrorism
to bring suit notwithstanding the limitation time for filing, so long as another victim
of the same terrorist act had brought suit in time. It may allow claimants previously
not covered by the exceptions, such as foreign nationals working for the United
States government overseas who were injured in a terrorist attack, to bring a lawsuit
despite expiration of the statute of limitations. It may also allow plaintiffs with
previous judgments to pursue new judgments based on the same terrorist incident but
citing the new cause of action.228 Such actions must be filed within sixty days after
enactment or the date of entry of judgment in the original action.229 Refiled actions
227 Several efforts to reopen cases to assess punitive damages have been rebuffed by the
courts on the basis that the plaintiffs had not filed a motion for relief from judgment on or
prior to January 28, 2008. E.g. Steen v. Iran, Slip Copy, 2008 WL 1800778 (D.D.C. April
21, 2008) (request for additional damages); Higgins v. Iran, Slip Copy, 2008 WL 1787720
(D.D.C. April 21, 2008) (effort to add punitive damages to award against Iran that already
includes $300 million in punitive damages against the Iranian Islamic Revolutionary Guard
Corps); Holland v. Iran, Slip Copy, 2008 WL 1787721 (D.D.C. April 21, 2008). The court
rejected all these plaintiffs’ contention that their right to pursue execution of their judgments
kept their cases “open before the courts in any form...as of [January 28, 2008]” within the
meaning of § 1083(c).
228 Plaintiffs who already have a judgment against Iran for $317 million ($300 million of
which is punitive damages against Ayatollah Khamanei personally, and none of which has
been satisfied), Bodoff v. Islamic Republic of Iran, 424 F. Supp. 2d 74 (D.D.C. 2006), have
filed a new action against Iran, the Ayatollah Khamanei, and other defendants pursuant to
new § 1605A. Bodoff v. Islamic Republic of Iran, Case No. 1:2008cv00547 (D.D.C. filed
March 18, 2008). See also Rubin v. Islamic Republic of Iran, Case No. 1:2008cv00521
(D.D.C. filed March 26, 2008) (plaintiffs who have judgments amounting to nearly $110
million, nearly all of which remains uncollected, filed action against Iran and its Ministry
of Information Security and several officials for the same suicide bombing in Jerusalem that
gave rise to their original judgments); Ben Haim v. Islamic Republic of Iran, Case No.
Case No. 1:2008cv00503 (D.D.C. filed March 24, 2008).
229 P.L. 110-181 §1083(c)(3). It is unclear whether the “original lawsuit” is restricted to the
first lawsuit filed based on a specific act of terrorism or whether any currently or previously
pending lawsuit based on the same incident will suffice. It is also unclear whether claims
that were dismissed prior to the enactment of P.L. 110-181 for reasons other than (or in
addition to) a finding that the Flatow Amendment (28 U.S.C. § 1605 note) or 28 U.S.C.
§ 1605(a)(7) (as previously in effect) did not create a cause of action against the State (as
required for refiling a “pending” but finally adjudicated claim under §1083(c)(2)) will
succeed in bringing the claim anew as an action related to another lawsuit under
§1083(c)(3). For example, one case involving a terrorist hijacking that took place in 1985
was dismissed as time-barred in 2007. Estate of Buonocore v. Libya, 2007 WL 2007509
(D.D.C. 2007)(dismissing all claims with prejudice because plaintiffs had not filed within
reasonable time after enactment of terrorist state exception to the FSIA in April 1996).
and actions related to previous claims are to be permitted to go forth even if the
foreign State is no longer designated as a State sponsor of terrorism, as long as the
original action was filed when the State was on the list of terrorist States. (28 U.S.C.
Although subsection (c) refers to “pending cases,” it appears to encompass
finally adjudicated cases in which litigants have, as of the date of enactment (January
28, 2008), filed a motion for relief from final judgment under Rule 60(b) or any other
motion that might be available to allow discretionary relief after a final judgment is
rendered and appeals are no longer possible. Ordinarily, a change in statutory law
may be applied to civil cases that arose prior to its enactment, if Congress makes
clear its intent in this regard,230 but only in cases still pending before the courts and
those filed after enactment. To the extent that § 1083 is read to require courts to
reopen final judgments and previously dismissed cases, or reinstate vacated
judgments, the provision may be vulnerable to invalidation as an improper exercise
of judicial powers by Congress.231 A similar objection may be raised with respect to
the waiver of legal defenses — while it is well-established that Congress can waive
legal defenses in actions against the United States,232 an effort to abrogate valid legal
defenses of other parties could raise constitutional due process and separation of
Subsection (c)(4) of section 1083 states that section 1503 of the Emergency
Wartime Supplemental Appropriations Act (EWSAA) (PL 108-11) “has [n]ever
authorized, directly or indirectly, the making inapplicable of any provision of chapter
97 of title 28, United States Code, or the removal of the jurisdiction of any court of
the United States.” This provision would appear to be aimed at ensuring that no
court construes section 1503 of EWSAA to restore Iraq’s sovereign immunity with
respect to actions involving terrorist acts that occurred while Iraq was designated a
State sponsor of terrorism, as the government has continued to argue despite the D.C.
Plaintiffs have brought a new lawsuit based on the same facts, Simpson v. Libya, Case No.
1:2008cv00529 (D.D.C. filed March 27, 2008). If this lawsuit is construed to be a “refiled
action” within the meaning of § 1083(c)(2)(B)(ii), then Libya would be disabled from
contesting the suit based on the expiration of the statute of limitations.
230 See Landgraf v. USI Film Products, 511 U.S. 244, 273-280 (1994); United States v.
Schooner Peggy, 5 U.S. (1 Cranch) 103, 110 (1801).
231 See Plaut v. Spendthrift Farms, 514 U.S. 211 (1995) (invalidating statute that required
federal courts to reopen certain suits related to securities fraud that were dismissed as time
barred after the Supreme Court had interpreted a previous statute to establish uniform
limitations period for such cases).
232 See, e.g., id. at 230 (“Congress has the power to waive the res judicata effect of a prior
judgment entered in the Government’s favor on a claim against the United States.” (citing
United States v. Sioux Nation, 448 U.S. 371, 397 (1980))); Cherokee Nation v. United
States, 270 U.S. 476 (1926); United States v. Central Eureka Mining Company, 357 U.S.
155, 174-177 (1958) (Frankfurter, J., dissenting) (citing legislation in which Congress has
waived legal defense in conjunction with waiving U.S. sovereign immunity).
Circuit’s ruling in the Acree case that EWSAA did not affect the FSIA.233 However,
the presidential waiver authority in subsection (d) appears to obviate the effect of the
The Consolidated Appropriations Act, P.L. 110-161 (Libya)
The Consolidated Appropriations Act for FY2008 (H.R. 2764), § 654 prohibits
the expenditure of any funds made available in that act to finance directly any
assistance for Libya unless “the Secretary of State certifies to the Committees on
Appropriations that the Government of Libya has made the final settlement payments
to the Pan Am 103 victims’ families, paid to the La Belle Disco bombing victims the
agreed upon settlement amounts, and is engaging in good faith settlement discussions
regarding other relevant terrorism cases.” The Secretary is further required to submit
a report within 180 days of enactment describing State Department efforts to
facilitate a resolution of these cases and U.S. commercial activities in Libya’s energy
sect or. 235
Proposals to Waive § 1083 for Former State Sponsors of
Although new lawsuits are barred six months after a defendant State has been
removed from the list of State sponsors of terrorism,236 new cases based on a terrorist
act that is or was already the subject of a lawsuit under the terrorism exception to the
FSIA are permitted within 60 days of enactment of the NDAA (signed into law
January 28, 2008) or 60 days within the date of entry of judgment in the “original
lawsuit.”237 Accordingly, without intervention by Congress, a State would remain
subject to new lawsuits based on certain acts of terrorism that occurred while it was
designated a state sponsor of terrorism until 60 days after the entry of final judgment
in cases currently pending. The threat of new lawsuits or attachment of property in
satisfaction of prior judgments could impede the resumption of ordinary trade with
Although new 28 U.S.C. § 1610(g) may not permit the attachment of property
belonging to U.S. companies doing business with a former State sponsor of terrorism
subject to section 1083 (at least so long as that government has no interest of its own
in the property), the measure could make commercial transactions more difficult.
Judgment holders would likely seek to attach goods purchased by the debtor
government as well as financial instruments used to pay for goods or services or to
secure contract performance. If judgment holders succeed in seizing property or
233 See supra at 33-35 (discussing waiver authority with respect to actions against Iraq).
234 See supra at 40-41.
235 For more information about legislation regarding Libya’s terrorist acts, see CRS Report
RL33142, Libya: Background and U.S. Relations, by Christopher M. Blanchard.
236 28 U.S.C. § 1605A(a)(2).
237 See supra note 229. It is not clear whether a settlement constitutes a “judgment” for this
debts in the possession of a U.S. company, the contracting government could seek
to hold the company liable for breach of contract for failing to make payment or
delivery, as the case may be. Or the government could seek to justify its own breach
or early termination of a contract, which could also result in losses to the U.S.
company involved. Although it seems likely that a U.S. court would not find the U.S.
company in breach of contract for having submitted to a judicial order, the contract
in question may call for disputes to be resolved according to foreign law or in a
foreign forum or through international arbitration, in which case the outcome may be
less certain. The risk of litigation, which is unlikely to be without cost even if
successful, may serve as a deterrent to trade.238 If a former State sponsor of terrorism
chooses not to open accounts or establish standby letters of credit in financial
institutions subject to U.S. jurisdiction, trade between U.S. companies and that
country could become more difficult and riskier for the U.S. companies involved, and
the foreign State may avoid risk by choosing business partners outside the United
Exemption for Libya (S. 3370). U.S. businesses seeking to establish a
commercial relationship with Libya expressed concern that § 1083 will harm U.S.-239
Libya trade. The Bush Administration, which has touted renewed U.S. investment
in Libya and growth in bilateral trade as beneficial to the U.S. economy and as
important tools for reestablishing relations with a reformed state sponsor of terrorism,
appears to share their view.240 Nearly $1.7 billion has been awarded against Libya,241
with an additional $5.3 billion awarded against certain named Libyan officials, and
with some 20 additional cases pending. The State Department announced that242
settlement negotiations to resolve outstanding cases against Libya were ongoing,
and asked Congress to amend section 1083 to permit waivers in the case of all States
that are removed from the list of designated State sponsors of terrorism. Senator
Biden introduced a separate bill negotiated by the Administration, S. 3370, to exempt
238 See U.S.-Libya Business Association, Current and Potential Trade and Investment
Opportunities in Libya, January 11, 2008 (arguing that potential property attachments are
harmful to U.S. parties with existing contracts and discourage parties from considering
future export possibilities).
239 Correspondence from the U.S.-Libya Business Association, the National Foreign Trade
Council, the National Association of Manufacturers, and the United States Chamber of
Commerce to U.S. Secretary of State Condoleezza Rice, February 28, 2008 (urging the
Administration to seek waiver authority with respect to Libya).
240 Text of the Administration proposal was included in the correspondence from
U.S.-Secretary of State Condoleezza Rice, U.S. Secretary of Defense Robert Gates, U.S.
Secretary of Energy Samuel Bodman, and U.S. Secretary of Commerce Carlos Gutierrez to
Speaker of the House Nancy Pelosi, Senate Majority Leaders Harry Reid, et al., March 18,
241 See Appendix A.
242 Press Release, U.S. Department of State, Joint Statement by the United States and Libya,
May 30, 2008, available at [http://www.state.gov/r/pa/prs/ps/2008/may/105466.htm].
Libya from terror-related lawsuits if it agrees to compensate certain U.S. victims
under a claims settlement agreement with the United States.243
S. 3370, the “Libyan Claims Resolution Act,” was enacted on August 4, 2008.
It provides an exception to the FSIA for Libya in the event Libya signs an
international agreement (“claims agreement”) with the United States to settle
terrorism-related claims and to provide fair compensation. It contains a sense of the
Congress in support of the President’s efforts “to provide fair compensation to all
nationals of the United States who have terrorism-related claims against Libya.” The
statute authorizes the Secretary of State to designate one or more “entities” within the
United States to assist in the provision of compensation. It does not indicate whether
the designated entity is to have a role in adjudicating claims, or whether the amount
of compensation and identity of claimants eligible for compensation are to be
specifically set forth in the claims agreement. It appears that the government is to
receive funds pursuant to an agreement with Libya, which it would then turn over to
the designated entity for dispersal to claimants, although there is no express
requirement to this effect in the statute. All of the entity’s property that is related to
the claims agreement would then be immune from judicial attachment, and the entity
itself would be immune from lawsuits related to actions it takes to implement a
claims agreement. A designated entity will not be subject to the Government
Corporation Control Act.244
If the Secretary of State certifies to Congress that sufficient funds have been
received under the claims agreement, the statute will provide immunity to Libya,
including its agencies and instrumentalities as well as its officials, employees, and
agents, for all claims brought under the terrorism exception to the FSIA, either under
the previous version of the statute or as amended by § 1083 of the FY08 NDAA,
whether the suits are brought in federal or state courts. The statute provides
immunity to property belonging to Libya, including its agencies and
instrumentalities, and the property of Libyan agents, officials, and employees, from
attachment in aid of execution or similar judicial process under the FSIA terrorism
exception. In order for the funds received by the government to be sufficient for the
purposes of the certification under the bill, they must be sufficient to cover
settlements Libya has agreed to pay to victims of the Pan Am 103 airliner bombing
and the La Belle Disco bombing, as well as to provide “fair compensation” to U.S.
nationals who have pending cases against Libya for wrongful death or physical injury
arising under section 28 U.S.C. § 1605A (including previous actions that have been
given effect as if they had been filed under § 1605A). It appears that the amount of
fair compensation is left to the discretion of the Secretary of State. It is unclear how
the entity designated to assist in the dispersal of the funds is to determine how much
to provide to each of the claimants. There is no express requirement that the
designated entity disperse the funds.
243 See Arshad Mohammed, U.S., Libya near Deal to Compensate Terror Victims, REUTERS
(July 31, 2008), available at
[http://in.reuters.com/article/worldNews/idINIndia-34755220080731] (describing tentative
agreement between United States and Libya that “hinges on action by the U.S. Congress”
to provide compensation possibly worth as much as $1 billion to victims of terrorism for
which Libya has been blamed).
244 31 U.S.C. §§ 9101 - 9110. For information about such corporations, see CRS Report
RL30365, Federal Government Corporations: An Overview, by Kevin R. Kosar.
The provision does not explicitly state that only claims described in the
certification requirement would be compensated, but this seems to be a fair inference.
Under this interpretation, no compensation is envisioned in the case of claimants who
are not beneficiaries of a settlement agreement in the Pan Am 103 and La Belle
Disco cases unless they have a pending case under § 1605A for wrongful death or
physical injury.245 Claims that would otherwise be permitted under § 1605A, for
example, a claim for solatium or intentional infliction of emotional distress related
to the hostage-taking of a family member, would not likely be compensated under the
bill. It appears that finally adjudicated cases are not covered, in which case
unsatisfied judgments against Libya and its officials will likely be unenforceable.246
Claimants do not appear to have any recourse in court to dispute the amount or a
denial of compensation under the proposal, although a claim against the United
States for an uncompensated “taking” in violation of the Fifth Amendment would not
Other Bills in the 110th Congress
H.R. 3346 is substantially identical to H.R. 6305 as introduced in the 109th
Congress, except that it makes a provision for returning assets from the Hostage
Victims’ Fund to a foreign State after its status as a terrorist State has been
terminated, provided all claims have been paid or the President determines that
sufficient funds remain available to pay remaining claims. It is unclear whether these
requirements refer to claims against the foreign State whose terrorist designation has
been lifted, or whether claims against all terrorist States must be satisfied prior to the
return of any frozen assets. H.R. 3369 contains the same provisions as H.R. 3346,247
but also specifically includes plaintiffs in Hegna v. Islamic Republic of Iran among
the class of persons who would be eligible to seek compensation from the Hostage
Victims’ Fund. The bill also expands the provision regarding additional
compensation for former hostages held at the U.S. embassy in Iran to cover any
person who was kidnaped by Hezbollah on December 4, 1984, and transferred to
Iran. This language appears intended to cover Charles Hegna, except that it is
unclear whether he is also a “person who qualifies for payment under subsection
a(3),” depending on whether his estate is deemed to be a “person.” Children and
spouses of the specified victims at the time of the hostage-taking would be eligible
245 28 U.S.C. § 1605A provides a cause of action for “personal injury or death,” which
appears to cover a broader scope of injuries than “wrongful death or physical injury.”
Claims for wrongful death under the FSIA amendment have been limited to the decedent’s
estate, while close relatives of a victim have recovered in their own right based on claims
of solatium, intentional infliction of emotional distress, and pain and suffering, depending
on the applicable state law. See, e.g., Pugh v. Libya, 530 F. Supp. 2d 216 (D.D.C. 2008).
246 Price v. Libya, 384 F. Supp. 2d 120 (D.D.C. 2005)(approximately $18 million judgment
against Libya for injuries suffered during plaintiffs’ imprisonment pending trial for allegedly
taking unlawful photographs); Pugh v. Libya, 530 F. Supp. 2d 216 (D.D.C. 2008)(nearly $7
billion judgment against Libya and six named officials for bombing of a French airliner over
Africa in 1989).
247 Sec. 1(a)(3) (including case 1:00CV00716 in the U.S. District Court for the District of
Columbia). It appears that these plaintiffs would also be eligible under § 1(a)(1), since they
have obtained a judgment against Iran that has not yet been fully satisfied. The plaintiffs
received partial compensation pursuant to § 2002 of the Victims of Trafficking Act. See
to receive 50 percent of the “total amount of compensation paid to the person taken
hostage.” This subparagraph could exclude the Hegna plaintiffs as well, since
Charles Hegna was murdered by the hijackers and never received compensation,
unless it is read to encompass all compensation his family might recover under
subsection a(1) or otherwise in satisfaction of their judgment. It is unclear whether
the compensation received by the family members under section 2002 of the Victims
of Trafficking Act would also be included in the “total amount of compensation.”
H.R. 394 would abrogate the Algiers Accords, to the extent it prevents former
hostages from maintaining lawsuits against Iran, and establish a fund to pay the
former hostages their families compensation derived from liquidated frozen assets
and the Iranian FMS account.
S. 1839, passed by the Senate with unanimous consent on October 18, 2007,
would require the Administration to submit to Congress a report every six months
detailing the status of outstanding legal claims by American victims against the
government of Libya for acts described in section 1605(a)(7) of title 28, United States
Code. (Libya was removed from the list of State Sponsors of Terrorism on May 15,
2006248). The reports would continue until the Secretary of State certifies there are
no such claims left unresolved, and would be required to include the
Administration’s own efforts on behalf of those victims and the status of their
negotiations with Libya to obtain payment.
H.R. 5167, the Justice for Victims of Torture and Terrorism Act, would repeal
the waiver provision for Iraq passed in P.L. 110-181 (§ 1083(d)) and nullify any
existing waivers issued pursuant to that provision.
Suits Against the United States for “Terrorist” Acts
At least two of the States affected by the FSIA exception appear to have enacted
legislation allowing their citizens to file suit against the United States for violations
of human rights or interference in the countries’ internal affairs. Cuba reportedly
allows such suits for violations of human rights; and at least two judgments assessing
billions of dollars in damages against the U.S. have apparently been handed down.249
Iran reportedly has authorized suits against foreign States for intervention in the
internal affairs of the country and for terrorist activities resulting in the death, injury,
or financial loss of Iranian nationals; and at least one judgment for half a billion
dollars in damages has been handed down against the United States.250 The judgment
was awarded to a businessman who brought suit against the United States for
248 Press Release, U.S. Department of State, Rescission of Libya’s Designation as a State
Sponsor of Terrorism, March 15, 2006, available at [http://www.state.gov/r/pa/
249 Law Library of Congress, Suits Against Terrorist States: Cuba (February 2002) (Rept.
250 Law Library of Congress, Iran: Suits Against Americans for Acts of Terrorism (July
“kidnapping, false imprisonment, using force, battering, abusing and ultimately
inflicting physical and psychological injuries” in connection with his arrest by
undercover U.S. Customs agents in the Bahamas for violating U.S. sanctions
regulations.251 The judgment creditor in the case reportedly sought to attach the
defunct U.S. embassy in Tehran to satisfy the judgment.252
The 1996 amendments to the FSIA allowing victims of terrorism to sue
designated foreign States for damages in U.S. courts were enacted with broad
political support in Congress. But subsequent difficulties in obtaining payment of
the substantial damages assessed for the most part in default judgments by the courts,
and subsequent efforts in Congress to facilitate or allow such payment out of the
defendant States’ frozen assets in the United States, have raised issues fraught with
both emotion and complexity. Matters of effectiveness, fairness, diplomacy, and
possible reciprocal action against U.S. assets abroad have all entered the debate. In
addition, the issue has pitted the compensation of victims of terrorism against U.S.
foreign policy goals, including compliance with specific international obligations and
the decision to use funds for the reconstruction of Iraq.
U.S. courts have awarded victims of terrorism more than $19 billion in
judgments against State sponsors of terrorism and their officials under the terrorism
exception to the FSIA. Some claimants were able to collect portions of their
judgments under § 2002 of the Victims of Trafficking Act, while those not covered
have been left largely to compete with each other to lay claim to the blocked assets
of terrorist States for satisfaction of the compensatory damages portions of their
judgments. In the case of Iran — the defendant in the largest number of suits filed,
those blocked assets are virtually non-existent; and Presidential Determination 2003-
23 made Iraq’s blocked assets unavailable to pay subsequently awarded judgments
against Iraq. Most of the Cuban assets made available by § 2002 to satisfy judgments253
have also been liquidated to pay to judgment creditors.
251 See Michael Theodoulou, Tehran Court Rules Against US, CHRISTIAN SCIENCE
MONITOR, February 3, 2003, at 6.
252 See Michael Theodoulou, US Embassy is Seized Again to Settle Pounds 270m
‘Compensation’ Order, TIMES (U.K.), April 13, 2007, at 44. An Iranian official reportedly
denied that the U.S. embassy had been seized, noting that such a judicial sale of embassy
property would violate the Vienna Convention on Diplomatic Relations. US Embassy
Auction Rejected, IRAN DAILY (April 17, 2007); Iran Says Us Embassy Not for Sale,
KHALEEJ TIMES ONLINE (April 16, 2007).
253 See Julie Kay, Miami Lawyers Race Each Other to Frozen Cuban Funds, MIAMI DAILY
BUS. REV., October 1, 2007, at 1 (reporting difficulties judgment creditors of Cuba
experience in recovering damages). According to the Calendar Year 2006 Fifteenth Annual
Report to the Congress on Assets in the United States of Terrorist Countries and
International Terrorism Program Designees (September 2007), prepared by the Office of
Foreign Assets Control, the nearly $200 million of assets blocked under the Cuban sanctions
regulations includes blocked assets of all Cuban nationals such as blocked wire transfers
An appellate court decision in 2004 holding that no cause of action exists under
the FSIA to sue terrorist States themselves, as opposed to their employees, officials,
and agents, led courts to apply domestic state tort law to lawsuits against terrorist
States based on the domicile of the victim, resulting in some disparity of relief
available to victims. Confusion about the definition of an “agency or instrumentality”
of a foreign State also brought uncertainty to these lawsuits. The Supreme Court in
the Elahi case clarified the importance of distinguishing between “agencies and
instrumentalities” and foreign States themselves, but did not address any of the other
issues raised by the terrorism exception to the FSIA.
Section 1083 of the FY2008 National Defense Appropriations Act will likely
clarify the existence of a federal cause of action against State sponsors of terrorism,
but U.S. nationals with outstanding causes of action against Iraq may call on
Congress for some form of redress. The total amount of judgments against State
sponsors of terrorism and former State sponsors of terrorism is likely to increase
more rapidly, especially if § 1803(c) is deemed valid to permit the refiling of cases,
the reinstatement of vacated judgments, or the upward amendment of final awards,
as well as the filing of new cases for which the statute of limitations has already
expired. Whether more assets of those States will become available to satisfy those
judgments is less certain. Making the assets of separate agencies and
instrumentalities available to satisfy judgments may increase the total assets available
for levy in the short term, but may also lead such entities to avoid future transactions
that would put their assets at risk. An increase in transactions with debtor States is
likely to occur only with respect to those States that are no longer subject to anti-
terrorism sanctions, in which case the use of any assets that come into the jurisdiction
of the United States to satisfy judgments may act as a barrier to trade notwithstanding
the lifting of sanctions. On the other hand, if the terrorism exception to the FSIA
results in a decrease in terrorist attacks affecting the interests of U.S. persons, such
judgments should become less common with the passage of time and the statute of
intended for or sent by Cuban nationals, as well as “assets owned by third parties that have
been blocked due to the indirect or contingent interest of the Cuban government or Cuban
nationals.” Id. at 9-10.
Appendix A. Judgments Against Terrorist States
Table A-1. Judgments Against Terrorist States Covered by VTVPA § 2002 (P.L. 106-386)
JudgmentCompensatory DamagesAwardedPunitive Damages AwardedAmount Paid Pursuant to § 2002 (Including Interest)Procedure Used
$50 million$137.7 million$96,708,652.03Paid from liquidated Cuban
, 996 F.Supp. 1239 assets
$22.5 million$225 million$26,002,690.15100% option
, 999 F. Supp. 2d 1(appropriated funds)
s.or$65 million$0$73,260,501.72100% option
leak, 18 F. Supp. 2d 62(appropriated funds)
://wiki$41.2 million$300 million$47,315,791.80110% option
http, 90 F. Supp. 2d 107(appropriated funds)
$24.7 million$300 million$27,365,288.83100% option
, 172 F. Supp. 2d 1(appropriated funds)
$55.4 million$300 million$57,086,233.16100% option
, 2000 WL 33674311(appropriated funds)
JudgmentCompensatory DamagesAwardedPunitive Damages AwardedAmount Paid Pursuant to § 2002 (Including Interest)Procedure Used
$53.4 million$300 million$56,084,467.27One claimant chose the
, 151 F.110% option, the others the
ic Republic of$31.5 million$300 million$35,041,877.36110% option
, 2001 WL 34157508(appropriated funds)
ic Republic of$14.64 million$300 million$14,865,685.76100% option
s.oragner v. Islamic Republic$16.28 million$300 million$18,032,569.00110% option
leak, 172 F. Supp. 2d 128(appropriated funds)
://wiki$21.2 million$300 million (jointly with$21,579,737.64100% option
http, 201 F. Supp. 2d 78Carlson)(appropriated funds)
$7.8 million $300 million (jointly with$ 8,784,584.90110% option
$7.1 million$20 millionat least $7.1 millionaPaid from Cuban assets
, No. 13-1999-CA
JudgmentCompensatory DamagesAwardedPunitive Damages AwardedAmount Paid Pursuant to § 2002 (Including Interest)Procedure Used
.L. 107-228 and TRIA:
$11.7 million$300 million$ 2,342,729.89Pro rata payment
, 124 F. Supp. 2d 97(appropriated funds)
$12 million$120 million$ 2,394,606.04Pro rata payment
, 238 F. Supp. 2d 1(appropriated funds)
einstein v. Islamic Republic$33 million$150 million$ 6,634,687.87Pro rata payment
iki/CRS-RL31258, 184 F. Supp. 2d 13(appropriated funds)
s.or$42 million$333 million$ 8,387,121.10Pro rata payment
leak, No. 1:00CV00716(appropriated funds)
http$13.5 million$0approx. $2.5 millionPro rata payment
, C.A. No. 02-CV-78-(appropriated funds)
Information on the amounts paid under § 2002 was provided by the Office of Foreign Assets Control (OFAC) and is current as of July 2003. Claimants in the first tier (Flatow
ugh Carlson) choosing the 100 percent option were entitled to receive 100 percent of the compensatory damages awarded plus post-judgment interest on condition that they
quish any further right to compensatory damages and any right to satisfy their punitive damages award out of the blocked assets of the terrorist State (including diplomatic property),
owed by the United States to the terrorist State as the result of judgments by the Iran-U.S. Claims Tribunal, and any property that is at issue in claims against the United States
re that and other international tribunals (such as Iran’s Foreign Military Sales account). Claimants who chose the 110 percent option were entitled to receive 110 percent of the
pensatory damages awarded plus post-judgment interest on condition they relinquish any further right to obtain compensatory and punitive damages. The claimants in the second
(added by P.L. 107-228 and TRIA) divided the amount remaining in the fund on a pro rata basis, and were not required to give up their right to recover additional compensatory
ages, except from property at issue before an international tribunal.
hese figures have not been confirmed by OFAC, but are estimates of amounts payable under the statute.
Table A-2. Judgments Against Terrorist States Not Covered by VTVPA § 2002
JudgmentCompensatory Damages AwardedPunitive Damages Awarded
, Civil Action No. 02-00092 (HHK)$12,000,000$0.00
, 507 F. Supp. 2d 117 (D.D.C. 2007).$12,904,548.00$0.00
, 2008 WL 485091 (D.D.C. 2008).$62,441,839.00$0.00
, 459 F. Supp. 2d 40 (D.D.C. 2006).$28,801,792.00$0.00
, 424 F. Supp. 2d 74 (D.D.C. 2006).$16,988,300.00$300,000,000.00
, 281 F. Supp. 2d 258 (D.D.C. 2003).$112,463,608.00$300,000,000.00
mic Republic of Iran, Civil Action No. 01-01496$91,000,000.00$0.00
iki/CRS-RL31258) (D.D.C. 2005).
s.or, 238 F. Supp. 2d 222 (D.D.C. 2002).$1,200,000.00$300,000,000.00
146 F. Supp. 2d 19 (D.D.C. 2001).$18,823,289.00$0.00
http, 2006 WL 2583043 (D.D.C 2006).$316,919,657.00$0.00
, 2004 WL 5353873 (D.D.C. 2004).$5,670,000.00$0.00
, 466 F. Supp. 2d 229 (D.D.C.$254,431,903.00$0.00
, Civil Action No. 04-01712$66,331,500.00$400,000,000.00 (assessed against the
), 2007 WL 4116167 (D.D.C. 2007).Iranian Revolutionary Guard Corp)
, 451 F. Supp. 2d 90 (D.D.C 2006).$19,879,023.00$0.00
, 425 F. Supp. 2d 56 (D.D.C 2006).$16,000,000.00$0.00
, No. 02-12475 CA04 (Miami-Dade Co., Fla., 11th Cir. Ct.$1,000,000.00$3,000,000.00
, 175 F. Supp. 2d 36 (D.D.C. 2001).$94,110,000.00$300,000,000.00
JudgmentCompensatory Damages AwardedPunitive Damages Awarded
, 496 F. Supp. 2d 1 (D.D.C. 2005).$25,241,486.00$0.00
, Civil Action No. 02-1365 (JR)$6,400,000.00$0.00
, 245 F. Supp. 2d 59 (D.D.C. 2003).$33,025,296.00$0.00
, Civil Action No. 05-02494 (GK), 2007$28,807,719.00$0.00
, No. 01-28628 CA04 (Miami-Dade Co., Fla.,th$67,000,000.00$0.00
Cir. Ct. decided Apr. 17, 2003).
, 517 F. Supp. 2d 416 (D.D.C. 2007).$2,600,000.00$0.00
, 515 F. Supp. 2d 25 (D.D.C. 2007).$2,656,944,877.00$0.00
g/w, 421 F. Supp. 2d 152 (D.D.C. 2006).$2,500,000.00$0.00
leak, 384 F. Supp. 2d 120 (D.D.C. 2005).$17,786,221.85$0.00
://wiki, 530 F. Supp. 2d 216 (D.D.C. 2008).$1,635,583,302.00
httpic Republic of Iran, Civil Action No. 01-850 (CKK) (D.D.C.$5,000,000.00$300,000,000.00
, 281 F. Supp. 2d 87 (D.D.C. 2003).$5,321,520.00$0.00
, 495 F. Supp. 2d 541 (E.D. Va. 2007).$7,956,344.00$0.00
, 370 F. Supp. 2d 105 (D.D.C. 2005).$18,297,000.00$0.00
, 2007 WL 2007582 (D.D.C. 2007).$5,000,000.00$0.00
irate of Afghanistan, 262 F. Supp. 2d 217 (S.D.N.Y.$64,002,483.19 (damages for which$0.00
Iraq is responsible)
, 2003 WL 21672820 (D.D.C. 2003).$42,750,000.00$300,000,000.00
, 271 F. Supp. 2d 286 (D.D.C. 2003).$10,000,000.00$300,000,000.00
JudgmentCompensatory Damages AwardedPunitive Damages Awarded
, No. 05-25387 CA-27 (Miami-Dade Co., Fla.,th$127,750,000.00$125,000,000.00
Cir. Ct. 2008).
, 231 F. Supp. 2d 260 (D.D.C. 2002).$18,961,284.00$300,000,000.00
, 2003 U.S. Dist. LEXIS 15844 (D.D.C.$18,509,000.00$0.00
, 2002 U.S. Dist. LEXIS 26730 (D.D.C.$27,310,000.00$300,000,000.00
, 478 F. Supp. 2d 101 (D.D.C. 2007).Not yet determined$0.00
, No. 01-31216-CA-01 (Miami-Dade Co., Fla., 11th$44,630,000.00$94,630,000.00
iki/CRS-RL31258eininger v. Republic of Cuba, No. 03-22920 CA 20 (Miami-Dade Co.,$21,562,000.00$65,000,000.00
g/wth Cir. Ct. 2004).
leakeir v. Islamic Republic of Iran, Civil Action No. 01-1303 (TPJ) (D.D.C.$11,450,000.00$300,000,000.00
httpelch v. Islamic Republic of Iran, Civil Action No. A01-863(CKK)(AK)$32,698,304.00$0.00
These are cases brought under the terrorism exception to the Foreign Sovereign Immunities Act that are not entitled to compensation from the fund created by § 2002. As of
this report, the total value of such judgments is more than $14 billion. A total of $5,866,557,007.04 of this figure is compensatory damages; the remainder represents
roximately $3.3 billion in punitive damages and $5.27 billion in damages awarded against foreign officials in their personal capacity. This figure does not include the vacated award
e Acree case or compensatory awards against Cuba and Iraq known to have been satisfied from frozen assets). For satisfied judgments against Iraq, see supra note 111. For satisfied
ments against Cuba, see Weininger v. Cuba, 462 F. Supp. 2d 457 (S.D.N.Y. 2006). Judgment creditors in this category of cases may attempt to collect compensatory (but not
itive damages) from all blocked assets of the defendant State under TRIA § 201, except for diplomatic and consular property where the President has issued a waiver, and may collect
damages (punitive as well as compensatory) from any other property of the judgment creditor State that is not entitled to immunity under 28 U.S.C. § 1610, as amended by P.L.
18,1 § 1083 (except for those with judgments against Iraq).
aintiffs were also awarded $5,268,100,143.00 against six named Libyan officials for their role in the bombing of a French airliner on September 19, 1989 over Niger, Africa, which
sengers and crew. The sum represents treble damages available to victims of terrorism under 18 U.S.C. § 2333. Because this portion of the judgment was awarded against
fficials in their personal capacities, it is not enforceable against the Libyan government unless the judgment is permitted to be amended pursuant to § 1083 of the FY2008 NDAA.
he Libyan Claims Resolution Act, the property of Libya and its officials are immune from attachment to enforce this judgment.
Appendix B. Assets of Terrorist States
Table B-1. Amount of Assets of Terrorist States
B l ocked Non- bl ocked O ut s t a ndi ng
StateAssets in millions ofAssets in millions ofDamages inmillions of
dollars dollars dollars
Cuba $196.1 $0 $436.4
Iran $1.1 $51 $9,600.3
Iraq — — $364
Libya — — $1,653
Sudan $80.6 $0 $8.0
Sy ria $ 0 $51 $0
To tal $309.5 $102 $11,398
Note: Information pertaining to blocked assets is from the Calendar Year
2006 Fifteenth Annual Report to the Congress on Assets in the United States
of Terrorist Countries and International Terrorism Program Designees
(September 2007), which was prepared by the Office of Foreign Assets
Control (OFAC) in the Department of the Treasury. These values may
fluctuate. They do not include the values of diplomatic and consular real
property owned by Iran. Figures for non-blocked assets include property of
individuals and entities not necessarily associated with the government of the
Outstanding damages are approximate figures compiled by CRS. They
include unsatisfied portions of judgments that plaintiffs are entitled to enforce
against the defendant State, not including post-judgment interest.