Foreign Sovereign Immunities Act

FACTS:

A federal judge awarded a $920 million default judgment to injured soldiers and to family members of service members who died in the 1983 bombing of the U.S. Marine barracks in Beirut. The judgment will be satisfied by Iranian assets. In 2016, the Supreme Court upheld a law that allowed victims of Iran-sponsored terrorism to satisfy unpaid judgment with assets held in New York by Iran’s central bank.

ISSUES:

How might the Supreme Court’s upholding of a law allowing victims of Iran-sponsored terrorism to satisfy unpaid judgment with nearly $2 billion in assets held by Bank Markzi (Iran’s central bank) affect the implementation of the Foreign Sovereign Immunities Act?

LAW:

• The Foreign Sovereign Immunities Act (FSIA) is a U.S. law that establishes the limitations as to whether a foreign sovereign nation (or its political subdivisions, agencies, or instrumentalities) may be sued in U.S. courts – federal or state.
  • The FSIA confers on foreign states two kinds of immunity, namely, jurisdictional immunity, whereby a foreign state is immune from suit in U.S. courts except as provided in the statute, and execution immunity, whereby even if judgment has been entered against a foreign state lacking jurisdictional immunity, the state’s property within the U.S. is immune from attachment, arrest, and execution except as provided. [28 U.S.C. §1604, 1609]
  • However, Plaintiffs seeking to enforce judgments obtained under the FSIA immunity exception for state-sponsored terrorism are required to give notice of the judgment before seeking attachment and execution. 28 U.S.C. 1610(c), 1610(g)
  • Of course, since the FSIA was passed in 1976, numerous legal issues have arisen with regards to interpreting the Act
• The enactment of the Justice Against Sponsors of Terrorism Act (2016) has allowed U.S. citizens to sue foreign powers over terrorist acts committed on U.S. Soil
• In Brewer v. Islamic Republic of Iran, the court found that the terrorist bombing of U.S. Embassy Annex building in Lebanon constituted “extrajudicial killing” for purposes of “state sponsor of terrorism” exception to sovereign immunity under FSIA; terrorist act was deliberate and premeditated act that killed 14 people, and there was no evidence that act was judicially sanctioned by any lawfully constituted tribunal. [28 U.S.C.A. §1605A(a)(1)]
  • Although the FSIA provides that foreign states are generally immune from jurisdiction in U.S. courts, a federal district court can obtain personal and subject matter jurisdiction over a foreign entity in certain circumstances (i.e. if plaintiff serves the defendant in accordance with FSIA, and if subject matter jurisdiction exists when defendant’s conduct falls within one of the specific statutory exceptions to immunity).
    • 28 U.S.C. §1330(a, b) says that district courts shall have original jurisdiction without regard t amount in controversy with respect to which the foreign state isn’t entitled immunity under §1605-1607.
    • Survivor of terrorist attack carried out by designated foreign terrorist organization in Israel effectuated service on Iranian defendants, in action alleging that defendants were liable under FSIA for survivor’s injuries. Personal jurisdiction was established after other methods of service set forth in FSIA were unsuccessful, survivor sent two copies of summons complaint, and notice of suit, along with translations, to court clerk, clerk sent documents to Secretary of State, and Secretary then transmitted one copy through Swiss embassy in Iran, and sent certified copy of diplomatic note indicating when papers were transmitted to clerk. [Bluth v. Islamic Republic of Iran; 28 U.S.C. §1608]

DETAILED FACTS:

Foreign sovereign immunity evolved through common law before the enactment of FSIA in 1976 (The FSIA’s Crippling Effect). Prior to the act, foreign sovereigns were granted absolute and complete immunity from suits in the U.S. There were issues between the executive and the judicial branches in determining sovereign immunities; therefore, Congress enacted the FSIA in 1976. Although this has proved better than the common law approach, foreign nations have exploited the FSIA and its gateway to jurisdictional immunity to avoid liability. Furthermore, the courts have found exceptions to the FSIA, such as waiver, commercial activity, and now cases of state-sponsored terrorism. The term “state sponsor of terrorism” means a country the government of which the Secretary of State has determined is a government that has repeatedly provided support for acts of international terrorism. [28 U.S.C. §1605A].  Some argue that the ability of the U.S. to satisfy outstanding judgments as it did in this case poses more difficulties in trying to normalize relations with defendant countries. A possible solution for resolving the outstanding judgments is to terminate them and resubmit the claims to ad hoc international tribunals.

OTHER FACTS:

• The difficulty of interpreting FSIA actually led to the formation of an American Bar Association working group that seeks to reform FSIA.

ARTICLE LINKS:

https://fsialaw.com/category/terrorism-exception/

https://www.lexology.com/library/detail.aspx?g=a4837058-0335-44f4-b1db-f21036b0fbf9