Hazi v. Bank Melli Iran, No. 09-3034 (2d Cir. 2010)

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09-3034-cv Hazi v. Bank Melli Iran 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ------------August Term, 2009 (Argued: February 17, 2010 Decided: June 15, 2010) Docket No. 09-3034-cv - - - - - - - - - - - - - - - - - - - - - - X SUSAN WEINSTEIN, individually as Co-Administrator of the Estate of IRA WILLIAM WEINSTEIN, and as Natural Guardian of plaintiff DAVID WEINSTEIN, JEFFREY A. MILLER, as Co-Administrator of the Estate of IRA WILLIAM WEINSTEIN, JOSEPH WEINSTEIN, JENNIFER WEINSTEIN, HAZI & DAVID WEINSTEIN, JENNIFER WEINSTEIN HAZI, Plaintiffs-Appellees, BANK OF NEW YORK, Plaintiff - against ISLAMIC REPUBLIC OF IRAN, IRANIAN MINISTRY OF INFORMATION AND SECURITY, AYATOLLAH ALI HOSEINI KHAMENEI, ALI AKBAR HASHEMIRAFSANJANI, ALI FALLAHIAN-KHUZESTANI, Defendants, BANK MELLI IRAN NEW YORK REPRESENTATIVE OFFICE, Respondent-Appellant, BANK SADERAT IRAN, NEW YORK REPRESENTATIVE OFFICE, BANK SEPAH IRAN, NEW YORK REPRESENTATIVE OFFICE Respondents, - - - - - - - - - - - - - - - - - - - - - - X -1- 1 2 3 4 5 6 7 8 9 10 Before: KEARSE and HALL, Circuit Judges, and RAKOFF, District Judge.* Appeal by respondent Bank Melli Iran from a ruling of the United States District Court for the Eastern District of New York (Leonard D. Wexler, Judge) granting plaintiff s motion for appointment of receiver to attach respondent s property in satisfaction of a prior judgment. Affirmed. 11 12 13 14 15 16 17 18 19 20 21 22 LAINA C. LOPEZ, Berliner, Corcoran & Rowe, LLP, Washington, DC (Thomas G. Corcoran, Jr., Berliner, Corcoran & Rowe, LLP, Washington, DC, John N. Romans, Law Office of John N. Romans, Mamaroneck, NY, on the brief), for Respondent-Appellant. ROBERT J. TOLCHIN, Jaroslawicz & Jaros, New York, NY, for Plaintiff-Appellee. RAKOFF, District Judge: On February 25, 1996, Ira Weinstein, a United States citizen 23 and resident of New York, was severely injured during a suicide 24 bombing in Jerusalem organized by the terrorist organization 25 Hamas. 26 See Weinstein v. Islamic Rep. of Iran, 184 F. Supp. 2d 13, 16-17 27 (D.D.C. 2002). 28 administrator of his estate, and his children brought suit for 29 wrongful death and other torts against the Islamic Republic of 30 Iran ( Iran ), the Iranian Ministry of Information and Security, 31 and three Iranian officials, alleging that these defendants had On April 13, 1996, Weinstein died from those injuries. On October 27, 2000, his widow, another * The Honorable Jed S. Rakoff, United States District Judge for the Southern District of New York, sitting by designation. -2- 1 provided substantial monetary support for Hamas s terrorist 2 attacks. 3 the district court determined that the plaintiffs had established 4 their claim or right to relief by evidence satisfactory to the 5 court, 28 U.S.C. § 1608(e), and entered default judgment for 6 plaintiffs in the amount of approximately $183,200,000. 7 at 16, 22-26. 8 9 See id. at 21-22. After defendants failed to appear, See id. Plaintiffs registered the judgment in the U.S. District Court for the Eastern District of New York on October 8, 2002, 10 and served an information subpoena on Bank of New York that 11 eventually led to the identification of respondent Bank Melli 12 Iran ( Bank Melli ) as a possible instrumentality of the Iranian 13 state. 14 63, 64-65 (E.D.N.Y. 2004). 15 unnecessary to determine whether Bank Belli was an agency or 16 instrumentality for purposes of the TRIA because the court 17 determined that Bank Melli s accounts at the Bank of New York 18 were unattachable. 19 one of the plaintiff-judgment creditors, Jennifer Weinstein Hazi 20 ( Hazi ), filed a motion in the Eastern District proceeding, 21 seeking appointment of a receiver (pursuant to Rule 69 of the 22 Federal Rules of Civil Procedure and Section 5228(a) of the New 23 York Civil Practice Law and Rules), to sell real property owned 24 by respondent Bank Melli in Forest Hills, Queens, which plaintiff See Weinstein v. Islamic Rep. of Iran, 299 F. Supp. 2d The district court found it Id. at 74-76. -3- However, on October 31, 2007, 1 sought to attach and sell in partial satisfaction of the judgment 2 against the defendants. 3 property was now subject to attachment pursuant to the Terrorism 4 Risk Insurance Act of 2002 ( TRIA ), § 201(a), Pub. L. No. 5 107-297, 116 Stat. 2322, 2337, codified at 28 U.S.C. § 1610 note, 6 because on October 25, 2007, Bank Melli had been designated by 7 the United States Department of Treasury, Office of Foreign 8 Assets Control ( OFAC ) as a proliferat[or] of weapons of mass 9 destruction, and its assets had been frozen. 10 Hazi argued that the Forest Hills See Executive Order 13,382, 70 Fed. Reg. 38,567 (June 28, 2005).1 11 On February 21, 2008, Bank Melli moved to dismiss the 12 proceeding against it and to stay the appointment of a receiver 13 pending resolution of its motion to dismiss. 14 dismiss, Bank Melli argued, inter alia, that attachment and sale 15 of the Forest Hills property would violate the Treaty of Amity 16 between the United States and Iran, that attachment and sale 17 would constitute a taking not for a public purpose and without 18 just compensation in violation of the Takings Clause of both the 19 Fifth Amendment of the United States Constitution and Article 1 In its motion to Executive Order 13,382 was issued by the President pursuant to the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, 1702, and provided that all property and interests in property in the United States of persons and entities listed in the order or subsequently listed are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in. Exec. Order 13,382, 70 Fed. Reg. 38,567 (June 28, 2005). Bank Melli was added to the list on October 25, 2007. -4- 1 IV.2 of the Treaty of Amity, and that the blocking of its assets 2 violated the so-called Algiers Accords and thus attachment and 3 sale would constitute a further violation of the Accords. 4 June 5, 2009, after receiving submissions from both Hazi and Bank 5 Melli,2 the district court (Wexler, Judge) denied Bank Melli s 6 motion to dismiss and granted Hazi s motion to appoint a 7 receiver, but stayed the proceedings pending this appeal. 8 9 10 On DISCUSSION A. JURISDICTION On this appeal, Bank Melli argues for the first time that 11 the district court lacked ancillary jurisdiction to entertain 12 Hazi s motion to appoint a receiver. 13 Hazi s motion was not simply a proceeding to collect on a 14 debtor s assets, but rather an independent controversy with a 15 new party in an effort to shift liability, Epperson v. Entm t 16 Express, Inc., 242 F.3d 100, 106 (2d Cir. 2001); see also Peacock 17 v. Thomas, 516 U.S. 349, 357 (1996), for which TRIA § 201(a) did 18 not provide an independent source of jurisdiction. 19 raised below, subject matter jurisdiction may be raised at any 20 point, Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 21 576 (2004); Cave v. E. Meadow Union Free Sch. Dist., 514 F.3d 2 According to Bank Melli, Although not Although the district court also invited the United States to file its own submission to address the issues in the case, the Government declined to do so. -5- 1 240, 250 (2d Cir. 2008), and so the Court must address this 2 threshold matter.3 3 The Foreign Sovereign Immunities Act ( FSIA ), 28 U.S.C. § 4 1602 et seq., provides the exclusive basis for subject matter 5 jurisdiction over all civil actions against foreign state 6 defendants, and therefore for a court to exercise subject matter 7 jurisdiction over a defendant the action must fall within one of 8 the FSIA s exceptions to foreign sovereign immunity. 9 Saudi Arabia v. Nelson, 507 U.S. 349, 351 (1993); Argentine Rep. See, e.g., 10 v. Amerada Hess Shipping Corp., 488 U.S. 428, 434-35 (1989); 11 Verlinden B.V. v. Cent. Bank of Nig., 461 U.S. 480, 493 (1983). 12 In the underlying action that gave rise to the judgment on which 13 plaintiff now seeks to collect, the district court exercised 14 subject matter jurisdiction over Iran and the other defendants 15 under 28 U.S.C. § 1605(a)(7), which abrogates immunity for those 16 foreign states officially designated as state sponsors of 17 terrorism by the Department of State where the foreign state 18 commits a terrorist act or provides material support for the 19 commission of a terrorist act and the act results in the death or 3 The district court did, however, cite for other purposes to a lower court decision that also considered the jurisdiction issue. See Weininger v. Castro, 462 F. Supp. 2d 457, 490 (S.D.N.Y. 2006) (holding that the TRIA provides [an] independent basis of subject matter jurisdiction in this enforcement proceeding against these [foreign sovereign] entities ). -6- 1 personal injury of a United States citizen.4 2 F. Supp. 2d at 20-21. 3 foreign state shall be liable in the same manner and to the same 4 extent as a private individual under like circumstances . . . . 5 28 U.S.C. § 1606; see also Verlinden, 461 U.S. at 488-89. 6 See Weinstein, 184 When such an exception applies, the Bank Melli was not itself a defendant in the underlying 7 action. However, the FSIA has a separate section, Section 1609, 8 that provides that where a valid judgment has been entered 9 against a foreign sovereign, property of that foreign state is 10 immune from attachment and execution except as provided in the 11 subsequent sections, Sections 1610 and 1611. 12 Section 201(a) of the TRIA, codified as a note to Section 1610 of 13 the FSIA, provides as follows: 28 U.S.C. § 1609. 14 Notwithstanding any other provision of law, and except 15 as provided in subsection (b), in every case in which a 16 person has obtained a judgment against a terrorist 17 party on a claim based on an act of terrorism, or for 18 which a terrorist party is not immune under [28 U.S.C. 19 § 1605(a)(7)], the blocked assets of that terrorist 20 party (including the blocked assets of any agency or 4 In 2008, Congress repealed § 1605(a)(7) and created a new section specifically devoted to the terrorism exception to the jurisdictional immunity of a foreign state. See Pub. L. 110-181, Div. A, § 1803, Jan. 28, 2008, 122 Stat. 341 (repealing 28 U.S.C. § 1605(a)(7) and creating 28 U.S.C. § 1605A). To the extent relevant to this case, § 1605A provides for the same exceptions to foreign sovereign immunity as the repealed section. -7- 1 instrumentality of that terrorist party) shall be 2 subject to execution or attachment in the aid of 3 execution in order to satisfy such judgment to the 4 extent of any compensatory damages for which such 5 terrorist party has been adjudged liable. 6 7 TRIA § 201(a), 116 Stat. at 2337 (emphasis supplied). The parties do not dispute that each of the elements of 8 Section 201(a) is satisfied here. Iran has been designated a 9 terrorist party pursuant to section 6(j) of the Export 10 Administration Act of 1979, 50 U.S.C. App. § 2405(j), beginning 11 January 19, 1984, see Weinstein, 184 F. Supp. 2d at 20, and 12 therefore is a terrorist party as defined by TRIA § 201(d)(4), 13 116 Stat. at 2340. 14 found jurisdiction under 28 U.S.C. § 1605(a)(7), and thus Iran 15 was not immune from jurisdiction in the original proceeding. 16 id. at 20-21. 17 2007, designated as such pursuant to Executive Order 13,382 and 18 50 U.S.C. §§ 1701, 1702. 19 an instrumentality of Iran. 20 The district court in the underlying action See Bank Melli s assets were blocked as of October Finally, Bank Melli concedes that it is Bank Melli contends, however, that the above-quoted language 21 of the TRIA does not provide an independent basis for 22 jurisdiction over an instrumentality of a sovereign state when 23 the instrumentality was not itself a party to the underlying tort 24 action that gave rise to judgment on which plaintiff now seeks to -8- 1 recover. 2 simply provides an additional ground for abrogating immunity from 3 attachment for a party that has been the subject of a valid 4 judgment, but does not provide jurisdiction for a court to permit 5 attachment against a party that was not itself the subject of the 6 underlying judgment. 7 Rather, Bank Melli argues, Section 201(a) of the TRIA Although novel,5 Bank Melli s argument is belied by the 8 plain language of Section 201(a), as well as by its history and 9 purpose. Section 201(a) clearly states that in every case in 10 which a person has obtained a judgment against a terrorist party 11 . . ., the blocked assets of that terrorist party (including the 12 blocked assets of any agency or instrumentality of that terrorist 13 party) shall be subject to execution or attachment . . . . 14 § 201(a), 116 Stat. at 2337 (emphasis supplied). 15 Melli s interpretation, the parenthetical language in Section 16 201(a) of the TRIA that permits attachment of funds from agencies 17 and instrumentalities would be rendered superfluous, since the 18 agency or instrumentality would itself have been a terrorist 19 party against which the underlying judgment had been obtained. 20 See, e.g., Corley v. United States, 129 S. Ct. 1558, 1566 (2009) 5 TRIA Under Bank To date, no appellate court has addressed this issue, although several district courts have found that the TRIA grants subject matter jurisdiction for execution and attachment proceedings over parties against whom there exist underlying judgments. See, e.g., Weininger, 462 F. Supp. 2d at 477-89; Rubin v. Islamic Rep. of Iran, 456 F. Supp. 2d 228 (D. Mass. 2006). -9- 1 ( [a] statute should be construed so that effect is given to all 2 its provisions, so that no part will be inoperative or 3 superfluous, void or insignificant . . . . (quoting Hibbs v. 4 Winn, 542 U.S. 88, 101 (2004)). 5 clearly differentiates between the party that is the subject of 6 the underlying judgment itself, which can be any terrorist party 7 (here, Iran), and parties whose blocked assets are subject to 8 execution or attachment, which can include not only the terrorist 9 party but also any agency or instrumentality of that terrorist Instead, however, the statute 10 party. 11 jurisdiction over the agencies and instrumentalities, the 12 parenthetical would be a nullity. 13 If this did not constitute an independent grant of Although Bank Melli points out that Section 201(a) of the 14 TRIA has been codified as a note to Section 1610 rather than in 15 the sections of the FSIA more directly addressed to exceptions to 16 jurisdictional immunity, the plain language of the statute cannot 17 be overcome by its placement in the statutory scheme. 18 Padilla v. Rumsfeld, 352 F.3d 695, 721 (2d Cir. 2003) ( No 19 accepted canon of statutory interpretation permits placement to 20 trump text, especially where, as here, the text is clear and our 21 reading of it is fully supported by the legislative history. ), 22 rev d on other grounds by Rumsfeld v. Padilla, 542 U.S. 426 23 (2004); see also Fla. Dep t of Revenue v. Piccadilly Cafeterias, 24 Inc., 128 S. Ct. 2326, 2336 (2008) (noting that a statutory -10- See 1 provision s placement in a particular section cannot substitute 2 for the operative text of the statute ). 3 clearly true in this case where the operative language begins 4 with the phrase [n]otwithstanding any other provision of law, 5 thus making plain that the force of the section extends 6 everywhere. 7 This is even more Any inquiry into the meaning of a statute generally ceases 8 if the statutory language is unambiguous and the statutory 9 scheme is coherent and consistent. Barnhart v. Sigmon Coal 10 Co., 534 U.S. 438, 450 (2002) (quoting Robinson v. Shell Oil Co., 11 519 U.S. 337, 340 (1997) (other internal quotation marks 12 omitted)); see also Universal Church v. Geltzer, 463 F.3d 218, 13 223 (2d Cir. 2006). 14 ambiguity here, it would be resolved in plaintiff s favor by the 15 legislative history. 16 sponsors: But even if, contrary to fact, there were an According to Senator Harkin, one of TRIA s 17 The purpose of title II is to deal comprehensively with the 18 problem of enforcement of judgments issued to victims of 19 terrorism in any U.S. court by enabling them to satisfy such 20 judgments from the frozen assets of terrorist parties. . . . 21 Title II operates to strip a terrorist state of its immunity 22 from execution or attachment in aid of execution by making 23 the blocked assets of that terrorist state, including the 24 blocked assets of any of its agencies or instrumentalities, -11- 1 available for attachment and/or execution of a judgment 2 issued against that terrorist state. 3 enforcing a judgment against a terrorist state, title II 4 does not recognize any juridical distinction between a 5 terrorist state and its agencies or instrumentalities. Thus, for purposes of 6 148 Cong. Rec. S11524, at S11528 (Nov. 19, 2002) (statement of 7 Sen. Harkin). 8 establishes once and for all, that such judgments are to be 9 enforced against any assets available in the U.S., and that the Senator Harkin further stated that TRIA 10 executive branch has no statutory authority to defeat such 11 enforcement under standard judicial processes, except as 12 expressly provided in this act. 13 Id. Accordingly, we find it clear beyond cavil that Section 14 201(a) of the TRIA provides courts with subject matter 15 jurisdiction over post-judgment execution and attachment 16 proceedings against property held in the hands of an 17 instrumentality of the judgment-debtor, even if the 18 instrumentality is not itself named in the judgment. 19 B. CONSTITUTIONALITY OF TRIA 20 The underlying judgment which plaintiff seeks to satisfy was 21 obtained in February 2002, but the TRIA was not enacted until 22 November 2002 and Bank Melli was not designated a proliferat[or] 23 of weapons of mass destruction until 2007. 24 raised for the first time on appeal, Bank Melli argues that the -12- In another argument 1 TRIA, as here applied, is unconstitutional because it mandates 2 the reopening of a final judgment in violation of the separation 3 of powers doctrine of Article III of the U.S. Constitution. 4 Thus, to avoid any constitutional problem, Bank Melli urges this 5 Court to read the TRIA as applying, prospectively, only to 6 judgments rendered final after the TRIA s enactment, and thus not 7 to apply here. 8 Although plaintiff contends, with some force, that the 9 constitutional challenge has been waived for failure to raise it 10 below, a claim that a legislative enactment intrudes on the 11 courts powers is the kind of claim that appropriately may be 12 considered here, even if for the first time. 13 v. Comm r, 501 U.S. 868, 879 (1991) (rejecting waiver and 14 addressing constitutional challenge because of the strong 15 interest of the federal judiciary in maintaining the 16 constitutional plan of separation of powers ) (internal quotation 17 marks omitted). See, e.g., Freytag 18 Bank Melli s constitutional challenge is largely derived 19 from Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995), in 20 which the Supreme Court held that a section of the Securities 21 Exchange Act of 1934 violated separation of powers because it 22 required federal courts retroactively to reopen final money 23 judgments that had been dismissed as barred under the statute of 24 limitations. See id. at 219. [R]etroactive legislation [that] -13- 1 requires its own application in a case already finally 2 adjudicated . . . does no more and no less than reverse a 3 determination once made, in a particular case [and thus] exceeds 4 the powers of Congress. 5 81, at 545 (J. Cooke, ed., 1961)). 6 Id. at 225 (quoting The Federalist No. Here, however, no such revision of the 2002 judgment is 7 effectuated by the attachment of Bank Melli s property pursuant 8 to the TRIA. 9 the TRIA did, instead, was to override the Supreme Court s 10 reading in First Nat l City Bank v. Banco Para El Comercio 11 Exterior de Cuba, 462 U.S. 611, 627-28 (1983) ( Bancec ), that 12 duly created instrumentalities of a foreign state are to be 13 accorded a presumption of independent status. 14 presumption related to enforceability of judgments against state 15 instrumentalities, but it had not nothing to do with the 16 rendering of the judgment itself. 17 the presumption could be overcome. 18 the TRIA, therefore, was simply to render a judgment more readily 19 enforceable against a related third party. 20 was in no way tampered with, and separation of powers was thus in 21 no way offended.6 Indeed, the judgment itself is unaffected. 6 What Id. at 627. This Moreover, even under Bancec, Id. at 629. The effect of The judgment itself It should be noted that Hazi seeks attachment of property in partial satisfaction only of the portion of the underlying judgment that awarded compensatory damages in her favor. See Rein v. Socialist People s Libyan Arab Jamahiriya, 162 F.3d 748, 762 (2d Cir. 1998) ( Where a retroactive law is civil rather than -14- 1 Bank Melli also argues that the delegation of authority to 2 the Treasury Department to determine which entities assets would 3 be blocked is, as applied here, tantamount to an 4 unconstitutional vesting of review of the decisions of Article 5 III courts in officials of the Executive Branch. 6 U.S. at 218; see Hayburn s Case, 2 U.S. (2 Dall.) 409 (1792). 7 Here, however, it is clear that no official from the Executive 8 Branch stands in direct review of the district court s decision 9 regarding execution and attachment of assets pursuant to the Plaut, 514 10 TRIA. 11 was a proliferator of weapons of mass destruction, pursuant to 12 which Bank Melli s assets were blocked. 13 not in any way review or alter the district court s original 14 entry of the default judgment. 15 OFAC simply made a factual determination that Bank Melli In so doing, OFAC did Nor does the district court s reliance on OFAC s 16 determination for its exercise of subject matter jurisdiction run 17 afoul of separation of powers. 18 U.S. 202 (1890), the Supreme Court held that the district court 19 had subject matter jurisdiction over a murder trial where the 20 crime occurred on an island that the State Department had deemed In Jones v. United States, 137 criminal, it is only the imposition of punitive damages that might, in particular circumstances, raise a constitutional problem. ). Of the total judgment of approximately $183,200,000, approximately $33,200,000 was compensatory damages, of which $5,000,000 was allocated to Hazi. Weinstein, 184 F. Supp. 2d at 22-25. -15- 1 was appertaining to the United States. Id. at 224. In that 2 case, the exercise of subject matter jurisdiction based on an 3 Executive Branch determination did not exceed the bounds of 4 Article III. 5 F.3d 76, 83-84 (2d Cir. 1997), overruled in part on other grounds 6 by JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure 7 Ltd., 536 U.S. 88 (2002), this Court found that alienage 8 jurisdiction could depend on whether the Executive Branch had 9 deemed a given foreign entity a state, and because the foreign Similarly, in Matimak Trading Co. v. Khalily, 118 10 entity in question had not been recognized as a state, 11 jurisdiction was deemed lacking. 12 It is true that, in Rein, 162 F.3d at 763, this Court, in 13 dicta, raised the question of whether after the passage of the 14 FSIA, designation of a foreign state as a sponsor of terrorism by 15 a branch other than Congress raised a potential issue of 16 separation of powers. 17 argument that the State Department s designation of Libya as a 18 state sponsor of terrorism violated separation of powers, since 19 Libya had already been designated as such when section 1605(a)(7) 20 was added to the FSIA; but we queried whether a different issue 21 of delegation might be presented if another foreign sovereign -- 22 one not identified as a state sponsor of terrorism when § 23 1605(a)(7) was passed -- was placed on the relevant list by the 24 State Department and, on being sued in federal court, interposed Specifically, in Rein, we rejected Libya s -16- 1 the defense that Libya now raises. 2 Miller v. FCC, 66 F.3d 1140, 1144 (11th Cir. 1995) (noting that 3 Congress cannot delegate the power of any federal agency to oust 4 state courts and federal district courts of subject matter 5 jurisdiction ); United States v. Mitchell, 18 F.3d 1355, 1360 n.7 6 (7th Cir. 1994) (raising doubts about whether Congress could 7 delegate its control over federal court jurisdiction to any 8 agency or commission). 9 162 F.3d at 764; see also In effect, Bank Melli now raises, albeit obliquely, the kind 10 of issue left unaddressed in Rein. 11 deemed a state sponsor of terrorism when the relevant provision 12 of the FSIA was applied to abrogate foreign sovereign immunity in 13 the district court. 14 jurisdiction over a proceeding to attach Bank Melli s assets 15 depended, at least in part, on OFAC s subsequent determination 16 that Bank Melli was a proliferator of weapons of mass 17 destruction. 18 alluded to in the dicta in Rein, we hold that Congress, by virtue 19 of providing subject matter jurisdiction over execution and 20 attachment proceedings based in part on OFAC s determination of 21 what assets are blocked, has not unconstitutionally delegated its 22 authority to the Executive Branch. 23 24 Like Libya, Iran was already However, here, the district court s Reaching only the instant variation on the issue The TRIA provides jurisdiction for execution and attachment proceedings to satisfy a judgment for which there was original -17- 1 jurisdiction under the FSIA (which is not challenged here) if 2 certain statutory elements are satisfied. 3 satisfaction of one of those statutory elements -- that Bank 4 Melli s assets were blocked -- was based on the factual 5 determination by a coordinate branch that Bank Melli supported 6 terrorist activity is not, on its own, a delegation of Congress s 7 authority over the courts subject matter jurisdiction that 8 exceeds the boundaries of Article III. 9 to the Executive the authority to make a factual finding upon The fact that The TRIA only delegates 10 which jurisdiction turns in part. 11 the Sudan, 531 F.3d 884, 891 (D.C. Cir. 2008) (rejecting Sudan s 12 argument that the FSIA unconstitutionally delegated subject 13 matter jurisdiction to Executive Branch because the FSIA only 14 granted authority to make a factfinding upon which jurisdiction 15 partially rests ). 16 within the expertise of the Executive, a fact Congress itself 17 implicitly recognized in creating the TRIA. 18 See, e.g., Owens v. Rep. of That factfinding, moreover, is one peculiarly In short, none of Bank Melli s belatedly-raised 19 constitutional arguments persuades the Court that there has been 20 any defect in the application of the TRIA in this case. 21 C. TRIA & TREATY OF AMITY 22 We next turn to the arguments that Bank Melli did raise in 23 the district court, the first of which concerns the Treaty of 24 Amity (the Treaty ) that the United States and Iran (then -18- 1 governed by the Shah) signed in 1955, which took effect in 1957 2 and still remains in place. 3 and Consular Rights, U.S.-Iran, Aug. 15, 1955, 8 U.S.T. 899. 4 Article III.1 of the Treaty provides that [c]ompanies 5 constituted under the applicable laws of either High Contracting 6 Party shall have their juridical status recognized within the 7 territories of the other High Contracting Party. 8 III.1. 9 companies of either High Contracting Party, including interest in 10 property, shall receive the most constant protection and security 11 within the territories of the other High Contracting Party, in no 12 case less than that required by international law. Id., art. 13 IV.2. 14 Treaty of Amity, Economic Relations, Id., art. Article IV.2 adds that [p]roperty of nationals and Bank Melli asserts that these provisions, read together, 15 require that Iranian companies be treated as distinct and 16 independent entities from their sovereign. 17 correct. 18 III.1., is substantively identical to a provision in a number 19 of Friendship, Commerce, and Navigation ( FCN ) treaties 20 negotiated by the U.S. following World War II. 21 America, Inc. v. Avagliano, 457 U.S. 176 (1982), the Supreme 22 Court held that these provisions are designed, not to give 23 separate juridical status to instrumentalities of the sovereign 24 entity, but simply to give corporations of each signatory legal But this is not As the district court noted, the key provision, Article -19- In Sumitomo Shoji 1 status in the territory of the other party, and to allow them to 2 conduct business in the other country on a comparable basis with 3 domestic firms. 4 Id. at 185-86. Bank Melli argues that Sumitomo only addressed the language 5 in the provision of the U.S.-Japan FCN Treaty that a company 6 constituted under the applicable laws and regulations within the 7 territories of either Party shall be deemed companies thereof, 8 but did not address the rest of the provision, and shall have 9 their juridical status recognized within the territories of the 10 other Party. 11 analysis on the phrase shall be deemed companies thereof, it 12 went on to explain that the intent behind the FCN treaties as a 13 whole was simply to grant legal status to corporations of each of 14 the signatory countries in the territory of the other, thus 15 putting the foreign corporations on equal footing with domestic 16 corporations. 17 conflict between the TRIA and the Treaty. 18 While it is true that the Court focused its 457 U.S. at 185-86. There is, therefore, no Moreover, even assuming, arguendo, that there were a 19 conflict between the two, the TRIA would have to be read to 20 abrogate that portion of the Treaty. 21 not be deemed to have been abrogated or modified by a later 22 statute unless such purpose on the part of Congress has been 23 clearly expressed, Trans World Airlines, Inc. v. Franklin Mint 24 Corp., 466 U.S. 243, 252 (1984) (quoting Cook v. United States, -20- Although a treaty will 1 288 U.S. 102, 120 (1933)), Section 201(a) of the TRIA expressly 2 states that it permits attachment of the assets of a foreign 3 sovereign s instrumentalities in satisfaction of a terrorism- 4 related judgment against the foreign sovereign [n]otwithstanding 5 any other provision of law (emphasis supplied). 6 Alpine Ridge Group, 508 U.S. 10, 18 (1993) (noting that the 7 Courts of Appeals have regularly interpreted such 8 notwithstanding provisions to supersede all other laws ); see 9 also Ministry of Defense and Support for the Armed Forces of the See Cisneros v. 10 Islamic Rep. of Iran v. Elahi, 129 S. Ct. 1732 (2009); Hill v. 11 Rep. of Iraq, No. 99 CV 03346TP, 2003 WL 21057173, at *2, 2003 12 U.S. Dist. LEXIS 3725, at *10-11 (D.D.C. Mar. 11, 2003) (holding 13 that the notwithstanding provision is unambiguous and 14 effectively supersedes all previous laws ). 15 D. TAKINGS CLAUSE 16 In the next of the arguments raised below, Bank Melli argues 17 that the attachment here in issue constitutes a per se taking of 18 physical property, not for a public purpose and without just 19 compensation, and therefore offends the Takings Clause of the 20 Fifth Amendment of the U.S. Constitution, as well as Article IV.2 21 of the Treaty of Amity. 22 private property be taken for public use, without just 23 compensation ); Treaty, art. IV.2 (property of Iranian companies See U.S. Const., amend V ( nor shall -21- 1 shall not be taken except for a public purpose, nor shall it be 2 taken without the prompt payment of just compensation ). 3 The argument is without merit. Bank Melli was added to the 4 OFAC list because of its unlawful actions in support of 5 terrorism. 6 enacted five years earlier, that such actions could result in the 7 designation and blocking of its assets under the TRIA, which 8 could in turn subject them to attachment. 9 United States, 304 F.3d 1271, 1275-76 (Fed. Cir. 2002) (rejecting In so doing, it had clear notice from the TRIA, See Paradissiotis v. 10 a takings clause claim that OFAC s freezing of the plaintiff s 11 stock options, which eventually became valueless, constituted a 12 taking without just compensation); see also Branch v. United 13 States, 69 F.3d 1571, 1576 (Fed. Cir. 1995) (noting that seizure 14 of assets to offset tax liability or pay a civil penalty would 15 not constitute a taking). 16 Here, where the underlying judgment against Iran has not 17 been challenged, seizure of Bank Melli s property, as an 18 instrumentality of Iran, in satisfaction of that liability does 19 not constitute a taking under the Takings Clause. 20 69 F.3d at 1577 (noting absence of any principle of takings law 21 under which an imposition of liability is deemed a per se taking 22 as to any party that cannot pay it ). 23 conduct as a funder of weapons of mass destruction opened it to 24 liability for judgments already entered against Iran. -22- See Branch, Instead, Bank Melli s own See, e.g., 1 Meriden Trust and Safe Deposit Co. v. FDIC, 62 F.3d 449, 455 (2d 2 Cir. 1995) (citing cases holding that deprivation of property 3 resulting from voluntary conduct cannot constitute a taking ). 4 As the Supreme Court has noted, the Takings Clause is 5 designed to prevent the government from forcing some people 6 alone to bear public burdens which, in all fairness and justice, 7 should be borne by the public as a whole. 8 524 U.S. 498, 522 (1998) (quoting Armstrong v. United States, 364 9 U.S. 40, 49 (1960)). E. Enters. v. Apfel, Here, where Bank Melli s assets are subject 10 to attachment to satisfy a judgment against its foreign 11 sovereign, the underlying purpose of the Takings Clause is in no 12 way violated by attachment of Bank Melli s assets. 13 Finally, Bank Melli does not advance any argument to find 14 that the Takings Clause in the Treaty of Amity would require a 15 different analysis. 16 F.3d 210, 215 (2d Cir. 1999) (treaties are construed in much the 17 same manner as statutes and district court interpretations are 18 subject to de novo review). Cf. Kahn Lucas Lancaster v. Lark Int l, 186 19 E. ALGIERS ACCORDS 20 In the last of the arguments it raised below, Bank Melli 21 argues that the attachment here in issue violates the so-called 22 Algiers Accords (the Accords ). 23 Iran, under the auspices of the Government of Algeria, entered 24 into the Accords to settle a number of a disputes between the two In 1980, the United States and -23- 1 countries, in particular, matters arising out of the hostage 2 crisis that occurred on November 4, 1979 in Tehran in which the 3 Iranian Government seized the U.S. Embassy and held captive 52 4 U.S. citizens.7 5 President Carter had issued Executive Order 12,170, which 6 blocked all property and interests in property of the Government 7 of Iran, its instrumentalities and controlled entities and the 8 Central Bank of Iran which are or become subject to the 9 jurisdiction of the United States . . . . Previously, in response to the hostage crisis, Exec. Order 12,170, 10 44 Fed. Reg. 65,729 (Nov. 14, 1979). As part of the Accords, the 11 United States agreed to restore the financial position of Iran, 12 in so far as possible, to that which existed prior to November 13 14, 1979, and to commit[] itself to ensure the mobility and 14 free transfer of all Iranian assets within its jurisdiction. 15 I.L.M. at 224. 16 exceptions to arrange, subject to the provisions of U.S. law 17 applicable prior to November 14, 1979, for the transfer to Iran The United States also agreed, subject to some 20 7 The Accords are comprised primarily of two documents: the Declaration of the Government of the Democratic and Popular Republic of Algeria (Jan. 19, 1981), and The Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran (Jan. 19, 1981), reprinted in 20 I.L.M. 223 (1981); 81 Dep t of State Bull. No. 2047, Feb. 1981 at 1. See Iran Aircraft Industries v. Avco Corp., 980 F.2d 141, 143 (2d Cir. 1992). -24- 1 of all Iranian properties which are located in the United States 2 and abroad. Id. at 227. 3 Bank Melli argues that, because the obligations of the 4 United States under the Accords are ongoing, and the Forest Hills 5 property at issue was owned by Bank Melli prior to November 14, 6 1979 (making it a blocked asset under Executive Order 12,170) the 7 property is subject to these ongoing Accords and therefore the 8 subsequent blocking of the asset under Executive Order 13,382 9 violated the Accords. 10 This argument confuses the United States s obligation to 11 unblock assets that had been blocked based on pre-Accords 12 violations with post-Accords blocking based on post-Accords 13 violations. 14 after the United States and Iran entered into the Accords most 15 Iranian assets were automatically unblocked. 16 F. Supp. 2d at 67-68. 17 longer blocked after the Accords, Bank Melli was entitled to 18 exercise any and all rights of ownership, including sale of the 19 property, until it was subsequently blocked on October 25, 2007. 20 Although Bank Melli argues that no specific expiration date was 21 given in the Accords, and therefore the obligations of the U.S. 22 are ongoing, nothing in the Accords suggests that the United 23 States is precluded from blocking Iranian assets based on 24 subsequent events unrelated to the hostage crisis. As the district court noted in an earlier decision, See Weinstein, 299 Since the Forest Hills property was no -25- Indeed, the 1 United States has implemented several sanctions programs against 2 Iran, subsequent to the Accords, that have had the effect of 3 limiting the mobility of Iranian property. 4 Order 12,613, 52 Fed. Reg. 41940 (Oct. 29, 1987) (prohibiting, 5 pursuant to 3 U.S.C. § 301 and Section 505 of the International 6 Security and Development Cooperation Act of 1985, 22 U.S.C. § 7 2349aa-9, certain Iranian imports); see also Weinstein, 299 F. 8 Supp. 2d at 68 (providing overview of executive orders imposing 9 sanctions that affected property controlled or owned by Iran). 10 Nor is Roeder v. Islamic Rep. of Iran, 333 F.3d 228 (D.C. See, e.g., Executive 11 Cir. 2003), upon which Bank Melli heavily relies, to the 12 contrary. 13 Congressional amendment to the FSIA specifically intended to 14 abrogate Iran s sovereign immunity for that particular case, 15 plaintiff s action was still nevertheless barred because it was 16 based on the events of the November 4, 1979 hostage crisis and 17 the Accords bar[red] and preclude[d] the prosecution against 18 Iran of any pending or future claim of . . . a United States 19 national arising out of the events of the seizure and detention 20 of the 52 U.S. citizens. 21 omitted). 22 in no way addressed the Accords and, given the express statement 23 in the Accords barring such actions, refused to interpret the 24 amendment to the FSIA, despite its being passed specifically to In Roeder, the D.C. Circuit found that, despite a Id. at 236 (internal quotation marks It concluded that the specific amendment to the FSIA -26- 1 permit plaintiffs to go forward with their case, as abrogating or 2 modifying that agreement without an express statement from 3 Congress to that effect. 4 prevent suits arising out the hostage crisis, the language 5 regarding Iranian assets in no way suggests that Iranian assets 6 would be immunized from blocking for all time. 7 assets undertaken by President Carter in his Executive Order was 8 done in response to the particular events of November 1979, and 9 the Accords unblocked those assets. Id. at 237-38. While the Accords The blocking of Since nothing in the Accords 10 suggests that the United States has a limitless obligation to 11 ensure that Iranian assets remain free from attachment based on 12 events unrelated to the 1979 hostage crisis, Bank Melli s 13 arguments that blocking its assets and subsequent attachment of 14 those assets would violate the Accords are simply unavailing. 15 16 CONCLUSION The Court has considered Bank Melli s other arguments and 17 finds them without merit. Accordingly, for the foregoing 18 reasons, the Court affirms the district court s decision to grant 19 plaintiff s motion and appoint a receiver to attach Bank Melli s 20 property in partial satisfaction of the judgment against Iran and 21 to deny Bank Melli s motion to dismiss. -27-

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