2010-06-15, New York, United States. The U.S. Court of Appeals for the 2nd Circuit upheld the ruling of the U.S. District Court for the Eastern District of N.Y. allowing a victim of a Hamas bombing in Israel to attach Iranian bank’s property in satisfaction of a civil judgment.
The case arose as a result of the death of a U.S. citizen from a suicide bombing perpetrated by Hamas in Jerusalem in 1996. In 2000, his estate brought a claim for wrongful death and other torts against Iran on the ground that the latter provided substantial monetary support for Hamas’ terrorist attacks. Iran did not defend, and the plaintiff obtained a default judgment in the amount of $183,200,000. Soon after, Bank Melli Iran was identified as an instrumentality of Iran. The district court found that the bank’s accounts held at the Bank of New York were unattachable. However, it allowed the attachment of real property owned by Bank Melli in Forest Hills, Queens. The bank appealed.
The Court of Appeal found
- subject matter jurisdiction in FSIA 28 U.S.C. § 1605(a)(7) which abrogates immunity for those foreign states officially designated as state-sponsors of terrorism by the Department of State where the foreign state commits a terrorist act or provides material support for the commission of a terrorist act and the act results in the death or personal injury of a United States citizen. In addition, section 201(a) of the TRIA allows collection of judgments from instrumentalities of states involved in terrorism. The court dismissed the bank’s argument that the plaintiff should not be able to collect because the bank was not a party to the original tort action;
- that the fact that the underlying judgment was rendered in February 2002, the TRIA was enacted in November 2002 and the Bank Melli was designated as a proliferator of weapons of mass destruction in 2007, does not make TRIA unconstitution for violation of the separation of powers doctrine. The court found that the TRIA did not temper with the original judgment, because the effect of the TRIA was simply to render a judgment more readily enforceable against a related third party. As a result, separation of powers was in no way offended;
- that the Treaty of Amity between Iran and the United States merely put Iranian companies on the same footing as domestic companies and did not give separate juridical status to instrumentalities of the sovereign entity;
- that the attachment of the property of the organization that supports terrorism does not offend the Takings Clause of the Fifth Amendment of the U.S. Constitution or Article IV.2 of the Treaty of Amity;
- that the attachment does not violate Algiers Accords, aimed at restoring the relationships between the two states following the Hostage Crisis in 1979, on the ground that the United States’s obligation to unblock assets that had been blocked based on pre-Accords violations should not be confused with post-Accords blocking based on post-Accords violations.
The plaintiffs were represented by Robert J. Tolchin of Jaroslawicz & Jaros. The bank was represented by Laina C. Lopez and Thomas G. Corcoran Jr. of Berliner, Corcoran & Rowe, LLP and John N. Romans of the Law Office of John N. Romans.