Bennett v. Bank Melli, No. 13-15442 (9th Cir. 2015)
Annotate this CasePlaintiffs, four groups of individuals, hold separate judgments obtained in U.S. courts against the Republic of Iran, based on various terrorist attacks that occurred between 1990 and 2002. The state-sponsored exception to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1330, abrogated a foreign sovereign's immunity from judgment, but not its immunity from collection. Thus, terrorism victims had a right without a meaningful remedy. Section 201(a) of the Terrorism Risk Insurance Act (TRIA), Pub L. No. 107-297, 201(a), and 28 U.S.C. 1610(g) addressed this loophole. Section 201 allowed victims to satisfy such judgments through attachment of blocked assets of terrorist parties and Section 1610(g) extended the TRIA’s abrogation of asset immunity to funds that were not blocked. The court agreed with the Second Circuit that it is “clear beyond cavil that Section 201(a) of the TRIA provides courts with subject matter jurisdiction over post-judgment execution and attachment proceedings against property held in the hands of an instrumentality of the judgment-debtor, even if the instrumentality is not itself named in the judgment.” Further, section 1610(g) makes unmistakably clear that whether or not an instrumentality is an alter ego is irrelevant to determining whether its assets are attachable. Therefore, section 201 of the TRIA and section 1610(g) permit victims of terrorism to collect money they’re owed from instrumentalities of the state that sponsored the attacks. Nothing in the text of the FSIA, Rule 19 or the Supreme Court’s retroactivity cases compels a different result. The district court correctly denied Bank Melli’s motion to dismiss and the court affirmed the judgment.
Court Description: Terrorism Risk Insurance Act / Foreign Sovereign. Immunities Act The panel affirmed the district court’s denial of the motion of Bank Melli, the national bank of the Islamic Republic of Iran, to dismiss claims filed against it in an action seeking enforcement pursuant to the Terrorism Risk Insurance Act and the Foreign Sovereign Immunities Act of terrorism-based judgments entered against Iran. Creditors sought access to blocked Iranian assets held by other parties but owed to Bank Melli. The panel held that the TRIA and 28 U.S.C. § 1610(g) abrogate the asset immunity of all of a terrorist state’s instrumentalities, including those that are not alter egos of the state. The panel held that Bank Melli was not an indispensable party that could not be joined under Federal Rule of Civil Procedure 19. The panel rejected the argument that applying the TRIA and section 1610(g) to the judgments at issue would be impermissibly retroactive because the creditors obtained the judgments against Iran before the statutes’ enactment. The panel also rejected the argument that Bank Melli did not own the assets. BENNETT V. BANK MELLI 5
The court issued a subsequent related opinion or order on February 22, 2016.
The court issued a subsequent related opinion or order on June 14, 2016.
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