F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

M I C H A E L B E

N N E T T ; L I

N D A B E N N E T T , as Co-Administrators of the Estate of Maria Ann B ennett,

Plaintiffs-Appellees

,

v

.

T H E I S L A M I C R E P U B L I C O F I R A N , Defendant

,

v

.

V I S A I N C .; F R A N K L I N R E S O U

R C E S , I N C ., Defendants-third-partyplaintiffs–Appellees

,

v

.

G R E E N B E R G A N D A C O S T A J U D G E M E

N T C R E D I T O R S ,Plaintiff-third-partyd efendant–Appellee

,

H E I S E R J U

D G M E N T C R E D I T O R S ,Plaintiff-fourth-partyd efendant–Appellee

,

v

. Nos. 13-15442 13-16100

D.C. No. 3:11-cv-05807- CRB

ORDER AND AMENDED OPI NI ONB E N N E T T V

. B A

N K M E L L I 2

B A N K M E L L I , Plaintiff-third-partydefendant–Appellant

.

Appeals from the United States District Court for the Northern District of California Charles R. B rey er, Senior District J udg e, Presiding

Arg ued and Submitted April 15, 2015—San F rancisco, California

F iled F ebruary

22, 2016 Amended J une 14, 2016

B efore: Sidney

R. Thomas, * and Susan P. Graber, Circuit J udg es, and Dee V. B enson, * * Senior District J udg e.

Order; Opinion by

J udg e Graber; Partial Concurrence and Partial Dissent by J udg e B enson

* Ch i ef J u d g e T h o m as w as d raw n to rep l ace J u d g e K o z i n sk i. He h as read th e b rief

s, rev iew ed th e reco rd

, an d listen ed to th e au d i o

- reco rd in g of

o ral arg u m en t h eld o n

A p ril 1 5 , 2 0 1 5

.

** T h e Ho n o rab le D e e V

. B e n s o n , S en io r District J u d g e f o r th e U .S. District Co u

rt f o r th e District o f

Utah , sittin g b y

d esig n atio n

.B E N N E T T V

. B A

N K M E L L I 3

SUMMARY * * *

F oreign Sovereign Im m unity

T h e panel filed (1) an order amending its opinion a n d partial dissent filed F ebruary 22, 2016, and deny ing p e titions for panel rehea r i n g and rehearing en banc; and (2) an amended opinion and partial dissent.

I n its am en d e d opinion, the panel a ffirmed the district court’s d enial o f the motion o f B a n k Melli, the national bank of the I slamic Republic of I r an, to dismiss claims f iled ag ainst it in an interpleader complaint seeking a determination of the rig hts to blocked I ranian assets held by other p arties but owed
t o B ank Melli. J udg ment creditors of I ran soug ht access t o t h e assets in order to collect on unsatisfied judg ments f o r deaths and injuries suffered in terrorist attacks sponsored by I ran.

The p a nel held that the T errorism Risk I n s urance A ct permits j u dg ment creditors to attach assets held by the instrumentalities of state sponsors of terrorism. A c cording ly

, the blocked assets of B ank Melli t h at w e re at issue in this

case could be attached. Ag reei ng with the Seventh Circuit,
t h e panel held that § 1610(g ) o f the F oreig n Sove r e i gn I mmunities Act also permitted attachment. The panel h e l d that thes e statutes did not impermissibly impose retroactive liability even thoug h the terrorist a cts und e r l y i ng the judg ments occurred before enactment of the statutes.

*** T h is su

m m ary co n stitu

tes n o p art o f

th e o p in io n

o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.B E N N E T T V

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N K M E L L I 4

The panel also held t h at u nder California law, the a ssets

were property of B ank Melli. I n addition, because B a nk Melli did not enjoy sovereig n immunity

, and could be joined in the action, F ederal Rule of Civil Procedure 19 did not require dismissal of the claims ag a inst B ank Melli.

District J u dg e B e n s on concurred w ith the majority that § 201(a) of the Terrorism Risk I nsurance Act and § 1 6 1 0 o f the F oreig n Sovereig n I mmunities Act permitted the judg ment creditors to attach and ex e c ute a g ainst monies owed
to B ank Melli. J udg e B enson dissented from the holding that § 1610(g ) is a freestanding immunity ex ception

. He stated that i n his v iew, the judg ment c reditors could proceed because they had sufficiently all e ge d that B ank Melli was eng ag ed in commerce in the United States within the meaning of the ex ception to attachment immunity set forth in § 1610(b)(3).B E N N E T T V

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COUNSEL

J effrey A. L amken, Robert K. Kry (arg ued) a n d L ucas M. W a lker, MoloL amken L L P, Washing ton D.C., for Appellant.

Curtis C. Mechling (arg

ued), B enjamin W eathers-L owin, a nd Patrick N. Petrocelli, Stroock & Stroock & L avan L L P, New York, New York; Dale K. C a thell and Richard M. K remen, DL A Piper L L P, B a l t i m o r e, Maryland; J ane Carol Norman

an d Th o mas F ortune F ay , B ond & Norman, Washing ton, D.C., for J u d g ment Plaintiffs-Appellees.

B enja m i n T

. Peele, I I I (arg u ed), B a ker & McKenz ie L L P, W a shing t o n , D.C.; B ruce H. J ackson, B aker & McKenz ie L L P, San F rancisco, California, for Appellees Visa, I nc. a nd F ranklin Resources, I

nc.

ORDER

T h e opinion and partial d issent f iled F ebruary 22, 2 0 1 6
, and reported at 817 F .3d 1131, are amended by th e opinion and partial dissent filed concurrently with this order.

W ith these amendments, J udg es Thomas and Graber have voted to deny Appellant’s petition for p a n e l rehearing a nd petition f o r r ehearing e n banc. J udg e B enson has voted to g rant the petition for panel rehearin g and has recommended
g ranting the petition for rehearing en banc.

The full court h as been advised o f the petition for rehearing e n banc, and no judg e of the court has requested a vote on it.B E N N E T T V

. B A

N K M E L L I 6

Appellant’s petition for panel rehearing and petition for rehearing e n b anc are DENIED

. No f urther petitions for panel rehearing

or for rehearing

en banc may

be filed.

OP INION

GRAB ER, Circuit J udg e:

Approx imately 90 United States citiz ens (or the representatives o f t h eir e states) are attempting to collect on unsatisfied money ju d g ments that they hold ag ainst the I slamic Republic o f I ran fo r d e at h s and injuries suffered in terrorist attacks sponsored by I ran. The assets that are the subject of this i n t erpleader a ction are monies contractually owed to B a

nk Melli b y Visa I nc. and F r anklin Resources I nc. (“F rank l i n ” )

. B ank Melli is an instrumentality of I ran. I t asserts that Plaintiffs cannot e x ecute on the assets ( 1) because B ank Melli enjo y s sovereig n immunity under the F oreig n Sovereig n I mmunities Act of 1976 (“F SI A”), ( 2) because the relevant statutory ex c eptions to sovereig n immunity may not be applied retroactively

, (3) because the b l o c k e d assets a re not p roperty of B ank Melli, a nd (4) b ecaus e B ank Melli is a required party that cannot be joined, thus requiring d ismissal under F ederal Rule of Civil Procedure 19. W e disag ree and, according ly , affirm the judg ment of the district court.

B ACKGROUND L EGAL PRI NCI PL ES

The jurisdiction of the U nited States over persons a nd property w ithin its ter r i t o r y “is susceptible of no limitation
not imposed by itself.” Schooner Exch. v. McFaddon

, 11 U.S. (7 C r a n c h ) 116, 136 (1812). According ly

, foreig nB E N N E T T V

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s o v er e ig n immunity is “a matter of g r ace and comity r athe r than a constitutional requirement. ” Republic of Austria v

. Altmann

, 5 41 U.S. 6 7 7
, 689 (2004). Courts consistently “defer[ ] to the d ecisions of the political branches” on whether
to take actio n s ag ainst f oreig n sovereig ns and their instrumentalities. Id. (quoting Verlinden B.V. v. Cent. Bank of Nigeria , 461 U.S. 480, 486 (1983)).

The F SI A, 28 U.S. C. §§ 1330, 1602–1611, establishes a default rule that f

oreig n states a

re immune from suit in United States courts. Id. § 1604. C o n gr e s s enacted the statute to provide a “comprehensive

. . . ‘ set of leg a l standards
g overning claims of immunity in every c ivil action ag ainst a foreig n state or its political subdivisions, ag e ncies, o r instrumentalities.’” Altmann

, 541 U.S. at 691 (quoting Verlinden B.V.
, 461 U.S. at 48 8 )

. The F SI A provides the

ex c lusive vehicle f

o r subject matter jurisdiction in all civil actions a g a inst foreig n state defendants

. Bank Markazi v

. P e t e rson , 136 S. Ct. 1310, 1317 n.1 ( 2016); OB B Personenverkehr AG v. Sachs

, 1 36 S. Ct. 39 0
, 393 ( 2 015); Flatow v. I

slamic Republic of

Iran
, 308 F .3d 1065, 1069 (9th Cir. 2002).

The F SI A includes many ex ceptions to its g eneral rule o f immunity

. 28 U.S.C. §§ 1605–1607. Relevant here, in 1996, Cong r ess a dded a new e x ception, stripping a foreig n state o f its sovereig n immunity

when (1) the United States officially desig nates the foreig n state a state sponsor of terr orism a nd (2) the foreig n state is sued “for personal injury or death that

was caused by

an act of torture, ex trajudicial killing

, aircraft sabotag e , hostag e taking

, or the provision of material support or resources for such an act.” Id. § 1605A.B E N N E T T V

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I ran w as d esig nated a t errorist party pursuant to section 6(j) of the Ex p ort Administration Act of 1979, 50 U .S.C. app. § 2405(j) (effective J an. 19, 1 9 84). P eterson v. I slamic R e p u blic o f Iran
, 627 F .3d 1117, 1 123 (9th Cir. 20 1 0 ) ; W e instein v. Islamic Republic o f Iran
, 609 F .3d 43, 4 8 ( 2 d Cir. 2010). That desig nation means that I ran is not e ntitled to sovereig n immunity

for claims under § 1605A.

Separately

, the F SI A addresses the immunity of sovereig n property from ex ecution and a ttachment. Subject to enumerated e x ce p t i o ns, a f oreig n state’s property in the U nited States is immune from attachment and ex ecutio n

. 28 U.S.C. § 1609.

I n First National City Bank v. Banco Para el Comercio Exterior de Cuba (“

Bancec ”), 462 U.S. 611, 620–21 (1983), the Supreme Court concluded that the FS I A d id not control whether and to what e x tent instrumentali ties could b e h eld liable for the debts of t h e i r sovereig n s. Apply ing international law and federal common law, the Court held that

“ g o v ernment instrumentalities established as juridic a l e n t i t i e s distinct and independent from their sovereign s hould normally b e treated as such.” Id. at 626– 27. That rule, referred to as the “ Bancec presumption,” may be overco me only in limited circumst a n c e s

. Id. a t 628–34. The federal

cour ts later d escribed five “ Bancec factors” that may be considered in determining w hether the presumption has been overcome in any

g iven case. E.g., Flatow , 308 F .3d at 1071 n.9. 1

1 T h e f iv e f acto rs are:

(1 ) th e l ev el o f eco n om ic co n tro l b y th e g o v ern m e n t ; (2 ) w h eth er th e en tity ’ s p ro f

its g o t o t h e g o v ern m en t ;B E N N E T T V

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Even after Cong r e ss a d ded § 1605(a)(7) (now § 1605A)
to the F SI A in 1 996, successful plaintiffs strug g led to e nforce judg ments ag ainst I r an when they were harmed by its terrorist activities. See, e.g. , In re Islamic Republic of Iran Terrorism Litig. , 659 F

. Supp. 2d 31, 49–58 (D.D.C. 2009) (describing “The Never-Ending Strug g le to E n f orce J udg ments Ag ainst I ran”). Once ag ain, Cong ress r espond e d b y enacting new statutes, this time desig ned to facili t a t e t he satisfaction o f such judg ments by ex panding successful plaintiffs’ ability to at t a ch and ex ecute on the property of ag encies a nd instrumentalities of terrorist states. Bank Markazi

, 136 S. Ct. at 1318.

F irst, in 2002, Cong r e ss enacted the Terrorism Risk I nsurance A ct of 2002 (“TRI A ” )

, Pub. L

. No. 107-297, 116 Stat. 2322. Section 201(a) of the TRIA provides:

Notwithstanding an y o ther provision o f law, and ex c e pt as provided in subsection (b) [ of this not e , pertaining to Presidential waiver]

, in every case in which a p e r s on has obtained a judg me n t a g ainst a terrorist party

o n a claim based upon an a c t of terrorism, o r for which a terrorist p a r ty is not immune

(3 ) th e d eg ree t o w

h ich g o v ern m en t o fficials m an ag e th e e n t ity o r o th erw i se h av e a h an d in its d aily af f airs; ( 4 ) w h eth er th e g o v ern m en t is th e real b en ef iciary o f th e en tity ’s co n d u ct; an d (5 ) w h eth er ad h eren ce to sep arate id en tities w o u l d en t itle th e f o reig n state to b en e fits in Un i ted States co u rts w h ile av oid in g its

o b lig atio n s.

Fla to w , 3 08 F.3 d at 1 07 1 n .9 (q u o tin g W a lter Fu ller Aircra

ft S a les, In c.

v. Rep u b l ic o

f th e Ph ilip

p in es , 9 6 5 F.2 d 1 3 7 5
, 1 3 8 0 n .7 (5 th Cir. 1 9 9 2 )).B E N N E T T V

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under section 1605A or 1605(a)(7 )

. . . , the blocked assets[ 2 ] o f that terrorist par t y (including the blocked assets of any ag ency o r instrumentality of that terrorist party ) shall be subject to ex e cution or attachment in aid o f

ex e cution in o rder to satisfy such judg ment to the ex tent of any c ompe n satory damag es for which such terrorist party has bee n adjudg ed liable.

TRI A § 2 01(a) was codified as a statutory note to 28 U.S.C. § 1610 on “Treatment of Terrorist Assets.”

Second, i n 2 0 0 8, Cong ress amended the F SI A a s part o f the N ational Defense Authoriz ation Act for F iscal Year 2008, Pub. L

. No. 110-181, § 1083, 122 Stat. 3, 338. Among other chang es, Cong ress added a n ew subsec t i o n t o the F SI A
, which provides in part that

the property of a foreig n state ag ainst which a judg ment is entered under section 1605A, a nd the property of an ag ency or instrumentality

o f such a state, including property that i s a separate juridical entity o r is an i nterest held d irectly or indirectly in a separate juridica l entity

, is subject to at t achment in aid o f

ex e cution, and ex ecution, upon that judg ment

as provided in this section, reg ardless of [ the

2 “ B lo ck ed assets” ref

ers to “ an y asset s eized b y th e Ex ecu tiv e B ran ch
p u rsu an t to eith er th e T rad in g W ith th e En em y A ct o r th e In ter n a t i o n a l Em erg en cy Eco n o m ic P o w ers A ct. S ee T RIA § 20 1 (d )(2 ).” Ba n k Ma rka z i , 1 3 5 S. Ct. at 1 3 1 8 (citatio n s o m itted ).B E N N E T T V

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same f i v e factors described by the federal courts as the “

Bancec factors”]

.

28 U.S.C. § 1610(g )(1); see also Bank Markazi

, 136 S. Ct. at 1318 n.2. F or ease o f reference, w e refer to this section a s “F SI A § 1610(g ) .”

F ACTUAL

AND PROCEDURAL

HI STORY

Fo u r g roups of individuals sued the I slamic Republic o f I ran for d amag es arising from deaths and injuries suffered in terrorist attacks sponsored by I ran; in each c a s e , a final
money judg ment was e ntered in fa v or of the plaintiffs a nd
ag ainst I ran. I n Estate of Heiser v. Islamic Republic of Iran
, 659 F

. Supp. 2 d 20 ( D.D.C. 2009), a n d Estate of Heiser v

. Islamic Republic of

Iran
, 466 F

. Supp. 2d 229 (D.D.C. 2006), the plaintiffs secured judg ments for more than $ 5 9 0 m illion for the 1996 bombing of the K hobar Towers in Saudi Arabia. I n Acosta v. Islamic Republic of Iran
, 5 7 4 F. Supp. 2d 15 (D.D.C. 2008), the p laintiffs received a j u d g ment of more than $ 3 5 0 m i llion because of a 1990 mass shooting

. I n Bennett v. Islamic Republic of Iran
, 507 F

. Supp

. 2d 117 (D.D.C. 2007), the p laintiffs obtaine d a judg ment for damag es of nearly $13 million for I ran’s ro l e in the 2002 bombing of a cafeteria at Hebrew U niversity i n J erusalem. And in Greenbaum v. Islamic Republic of Iran
, 451 F

. Supp. 2d 90 (D.D.C. 2006), the plaintiffs were awarded almost $20 million for damag es suffered a s a result of the bombing of a J erusalem restaurant in 2001. Collectively

, the judg ments total nearly $1 billion. Althoug h a ll the judg me n t s were taken b y d e f

a u lt, it is undisputed that all are valid final judg ments and that I ran owes the amounts of those judg ments to the respective plaintiffs.B E N N E T T V

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B a nk Melli, I ran’s larg est financial institution, is wholly owned by the g overnment of I ran. I t is undisputed that B a nk Melli qualifies as an instrumentality of I ran under the F SI A

. B ank Melli was not n amed as a defendant in any of the f our

cases described above and was not itself alleg ed to have been involved in the u nderly ing terrorist events. On Oct o b e r 25, 2007, the United States Department of the Treasury
, O f fice of F oreig n Assets Control ex ercised its au t h o r i ty under Ex ecutive Order No. 13,382, 7 0 F ed. Reg

. 38,567 ( J une 28, 2005), to bl o c k B ank Melli’s assets in the United States because of its i nvolvement in I r an’s nuclear and missile industries. B ank Melli’s assets a lso are blocked p ursuant to a 2012 Ex ecutive Order blocking the property

of I ran and of I ranian financial instit u t i ons. Ex e c

. Order No. 13,599, 77 F ed. Reg . 6659 (F eb. 8, 2012). 3

Visa and F ranklin owe about $17.6 million to B ank Melli pursuant to a c ommercial relationship that involves the use o f Visa credit cards in I r an. Visa and F ranklin have not turned
t he funds over to B ank Melli only b ecause the f u n d s a r e blocked. T he Bennett judg ment credit o r s f iled a complaint
ag ainst V isa and F ranklin, seeking to attach and e x e c u te ag ainst the blocked assets. V i s a a n d F ranklin responded b y initiating this interpleader action, naming as defendants B a nk Melli and the three other sets of judg ment creditors. V isa a nd F ranklin sou gh t a determination of the r ig hts to the blocked
assets in their p o ssession and a d ischarg e of Vis a and F ranklin with reg ard to those as s e t s

. After B ank Melli entered its appearance, it moved to dismiss the action.

3 T h e r e c e n t l i ft in g o f a p o rtio n o f th e s an ctio n s im p o sed o n Iran d oes

n o t ren d er th is i n terp lead er actio n m o o t, n o r d oes it af f ect o u r an aly sis of th e issu es raised h ere.B E N N E T T V

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Ba n k Melli made four arg uments for dismissal, each o f which the d istrict court r e jected. T he court held: ( 1 ) TRI A § 201(a) a

nd F SI A § 16 1 0 ( g) e n able the judg ment creditors
to attach the monies owed to B ank Melli; (2) TRI A § 201(a) and F SI A § 1610(g ) do not i m p o s e retroactive liability ; (3) the blocked assets constitute property of B ank Melli; a nd (4) B ank Melli was not a required party under F eder a l Rule of Civil Procedure 19. Bennett v. Islamic R e p u b l i c of Iran
, 927 F

. Supp. 2d 833 (N.D. Ca l

. 2 0 13). The district court denied the m o tion to d ismiss and certified the o rder for interlocutory a

ppeal under 2 8 U

. S

. C. § 1292(b). Bennett
, 927 F . Supp. 2d at 845–46.

STANDARD OF REVI EW

W e review de novo: questions of statutory construction, Miranda v. Anchondo

, 684 F .3d 844, 8 4 9 ( 9 t h Cir. 2 012); a d i s t r ict court’s ruling on a motion to dismiss for f ailure to state a claim or for lack of subject matter jurisdiction, Colony Cove Props., LLC v. City of Carson , 640 F .3d 948, 955 (9th Cir. 2011); the question w hether a statute may be a pplied retroactively

, Scott v. Boos
, 215 F .3d 94 0
, 9 4 2 ( 9th Cir. 2000); and leg al determinations underly ing a district court’s decision whether an action can pro ce ed in the absence o f a required p arty under Rule 19, Kescoli v. Babbitt

, 101 F .3d 1304, 1309 (9th Cir. 1996).B E N N E T T V

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D I SCUSSI ON

A. TRIA § 201(

a) a nd F SIA § 1 610(

g ) permit a ttachment and execution of the monies owed to Bank Melli

.

1. TRIA § 201(

a)

W e hold that TRI A § 201(a) permits judg ment creditors
to a ttach assets held by the instrumentalities of state sponsors of terrorism. As alway s, whe n interpreting a statute, we beg in w ith its tex t. Metro One Telecomms., Inc. v. Comm’r
, 704 F .3d 1057, 1061 (9th Cir. 2012). Section 201(a) o f the TRI A applies “[ n] otwithstanding a n y other provision of law,” “in every case in which a person has obtained a judg ment ag ainst a terrorist party on a c la i m b as e d upon an act o f terrorism, or for which a terrorist party is not immune under section 1605A or 1 605(a)(7),” and “in order to s a tisfy such judg ment to the ex tent of any compensato r y damag es for which such terrorist party h as been a djudge d liable.” TRI A § 201(a) (emphases added). The statute provides that, in

cases such as this one, “ the blocked a ssets o f [ t h e] terrorist party (including the blocked assets of any a g ency o r instrumentality of that ter rorist party ) shall be subject to

ex e c ution or attachmen t in aid of e x ecution.” Id. (emphasis added). This wording d emonstrates that Cong ress knew that the blocked assets of an instrumentality mig ht otherwise have been ex cluded from the phrase “blocked assets of [ the] terrorist p arty ” and that Cong ress acted to ensure that, i nstead, the instrumentality ’s b locked assets w ere includ ed

. Cf. Alejandre v. Telefonica L a r g a Distancia de P.R., Inc.
, 183 F .3d 1277, 1287, 1288 n.25 (11th Cir. 1999) (stating that a proposed amendment to the F SI A that would have applied
to property that “belong s to an agenc y o r i n strumentality o f

a foreig n state” demonstrated that Cong ress “knows ho w t oB E N N E T T V

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N K M E L L I 15

ex p ress clearly an intent to make instrument a l ities substantively liable for the debts o f their related foreig n g o v e r n m e n t s ” ( i n t er n a l q u o t a t i o n m a r k s o m i t t e d ) )

. According ly

, we ag ree with the Second Circuit w hen it h eld that it is “ clear bey ond cavil that Section 201(a) of the TRI A provides courts with s u b j ect matter jurisdiction over postj u d g ment ex ecution and attachment proceeding s ag ains t property held in the h ands of an instrumen t a l i t y o f the judg ment-debtor, even if the instrumentality is n o t i tself named in the judg ment.” W einstein , 609 F .3d at 50.

B a nk Melli d isputes this reading of § 2 01(a)

, arg uing instead that it applies o nly to instr u m e n t a l ities that are alter
eg os of the state; that is, B ank Melli arg ues that the Bancec presumption ag ainst the attachment of asset s held by state in s t r u m entalities applies. B ank Melli reasons that, because “including ” is a term of illustration, the w ords that follow a re merely an e x ample of the main p receding principle. That observation is true but is of no assistance to B ank Melli. B y listing “t h e blocked assets of any

. . . instrumentality of that terrorist party ” as a specific e x ample o f a s s e ts that a re “subject to ex ecution or attachment . . . in order to satisfy ” a
money judg ment obtain e d u nder § 1605A or § 1605(a)(7), C o n g r e s s c l e a r l y i n s t r u c t e d c o u r t s t o a l l o w t h e instrumentality ’s blocked assets to be reached. Cong ress also instructed c o u r t s to allow these assets to be reached “[ n] otwithstanding a

ny othe r provision of law”—that is,
reg ardless of the usual fiction embodied in Bancec

. Cong ress purposely overrode the Bancec presumption in thi s c o ntex t and abrog ated attachment immunity with respect to the blocked assets of instrumentalities o f desig nat e d state spo nsors of terrorism. Section 201(a) permits the judg ment creditors to attach the a ssets o f an instrumentality of a stateB E N N E T T V

. B A

N K M E L L I 16

sponsor of terrorism

. According ly

, the blocked assets o f B ank Melli that are at issue in this case may be attached.

2. FSIA § 1610(

g)

F SI A § 1610(g ) allows attach m en t of a nd ex e cution
ag ainst property held by a f oreig n t e rrorist state’s instrumentality “that is a s eparate juridical e ntity

, ” “reg a rdless of” five factors. As noted above, those enumerated factors are the same five factors identified by the federal courts as the “ Bancec factors” that may b e u s e d to decide w h e t h er an instrumentality is an alter e g o under Bancec

. E .g. , Fl a t o w , 3 0 8 F .3d a t 1 071–72, 1071 n.9. I t is clear from the tex t of the statute that Cong r ess was referring to, and a brog ating

, not jus t t h e presumption of separate juridical status, but also Bancec specifically

. T h e r e fore, § 1610(g ) also permits attachment in this case.

Bu t Ba nk Melli contends that, because § 1610(g ) makes
assets subject to attachment a n d ex ecution only “as provided in this section,” it is not an indep e n dent ex ception to the immunity g ranted b y 28 U.S.C. § 1609. B ank Melli reasons that subsection (g ) a

p plie s o n ly if some other part of § 1610 provides for attachment and ex ecution. B an k Melli arg ues that its assets cannot b e a t t a ched or ex ecuted upon because the assets at issue in this case were not “used for a commercial activity in the United States,” a requirement in § 1610(a), and B ank Melli has not itself “eng ag ed in commercial activity in the United States,” a requirement in § 1610(b). W e are not persuaded.B E N N E T T V

. B A

N K M E L L I 17

W e hold that subsection (g ) c ontains a frees t a n d i ng provision for attachi n g a n d ex ecuting ag ainst assets o f a foreig n state or its ag encies or instrumentalities. Subsection (g ) covers a different subject than § 1610(a) throug h (e): b y i t s ex press terms, it applies only to “certain action s , ” specifical l y , judg ments “entered u nder section 1605A

. ” ( E m phasis added.) I n turn, § 1 605A revokes sovereign immunity for damag es claims ag ainst a foreig n state for personal injury or death caused by “torture, ex tr ajudicial killing

, aircraft sabotag e, hostag e taking

, or t h e provision o f material support” f

or such an a ct. B y definition, such c laims do not arise from commercial a ctivity ; they arise from acts o f
torture ( and the like). Section 16 1 0(g ) requires only that a judg ment u nder § 1605A have been rendered ag ainst the foreig n state; in that event, both th e p r o perty of the foreig n state and the property of an a g ency o r instrumentality o f that state are subject to attachment and ex ecution. See Peterson
, 627 F .3d at 1 1 23 n.2 ( stating that § 1610(g ) “ex panded the categ ory o f foreig n sovereig n p roperty that can b e attached; judg ment creditors can now reach a n y U.S. property in which I ran has any interest, whereas before they could reach only property b elong ing to I ran”). To the ex tent that subsection (g ) is inconsistent with su b s e c t i o n (a) o r (b), subsection (g )
g overns beca u s e the particular (judg ments e ntered under § 1605A) controls over the g eneral ( all judgm ents entered

a f t e r a certain date). Morales v. Trans W orld Airlines, Inc.
, 504 U.S. 374, 384–85 (1992).

W h en subs e c tion (g ) refers to attachment and ex e cution of the judg ment “as provided in this section,” it is r e ferring toB E N N E T T V

. B A

N K M E L L I 18

procedures c ontai n e d i n § 1610(f). 4 Section 1610(f), like § 1610(g ), relates to judg ments o btained under § 1605A a nd its predecessor, § 1605(a)(7). Subsection (f)(1)(A) permits attachment and ex ecution of property that mig ht otherwise be blocked; subsection (f)(1)(B ) prohibits attachment o r

ex e c ution ag ainst property of a foreig n sta t e t h a t it

ex p ropriated f

rom a n atural person; a

n d subsection (f)(2)(A) provides that the Secretary of State and Secretary of Treasury will make every e ffort to assist a court or creditor in locating property awarded pursuant to § 1605A. I n lig h t o f Cong ress’ mandate to the ex ecutive branch to a ssist in the collection o f judg men t s in such cases, 28 U.S.C. § 1610(f), we cannot impute to Cong ress an empty statutory g esture. See Gates v

. Syrian Arab Repub l i c , 7 55 F

. 3d 568, 576 (7th Cir. 2 014) (stating that Cong ress intended the 2008 am endments to the F SI A “ to make it easier f or t e rrorism victims to obtain judg ments and to attach a ssets”). 5 Given both the tex t of the

4 W h en Co n g ress en acted su b sectio n (g ), su

b sectio n (f

) alread y w as in
p lace. Su b sectio n (g ) w as ad d ed to th e statu te in 2 0 0 8

. P u b

. L

. N o

. 1 10

- 1 8 1 , d iv . A , tit. X, § 1 0 8 3(b )(3 ), 1 2 2 Stat. 3
, 3 41 (2 0 0 8 ). Su b sectio n (f )

w as en acted in 1 9 9 8

. Pu

b

. L

. No

. 1 0 5

- 2 7 7
, § 1 0 1 (h ), 1 1 2 Stat. 2 6 81

- 4 9 1 (1 9 9 8).

5 In its P etitio n f

o r Reh earin g or Reh earin g En Ban c, Ban k Melli arg u es th at o u r read in g o f th e statu te m u s t be w ro n g becau se, in 2 0 00
, P resid en t Clin t o n w aiv ed t

h e en f orcem en t o f § 1 6 1 0 ( f) (1 ); it reaso n s th at “ as p ro v id e d i n t h i s sectio n ” th eref o re can n o t ref

er to § 1 6 1 0 (f

). T h at arg u m en t f

ails f o r at least t

h ree reaso n s. First
, o n ly su b sectio n (f

)(1 ) is

n o t b ein g en f

o rced

. P res. Determ

. N o

. 2 0 01

- 0 3
, 6 5 Fed

. Reg

. 6 6 ,4 8 3 (Oct. 2 8
, 2 0 0 0 ). Sev eral o th er p arts o f su b sectio n (f

)—d escrib ed in tex t—h av e alw ay s rem ain ed f

u lly en f o rced

, so su

b sectio n (g ) ref

ers, at a m in im

u m , to th e en f o rced p o rtio n s. S

eco n d

, o u r search is o n ly f o r co n g ressio n al in ten t w h en s u b s ectio n (g ) w as en acted

. A p artial w aiv er d o es n ot ref l ect

co n g ressio n al in ten t; if an

y t h i n g , i t d e m o n s t

r a t e s presid en tial d isag reem en t

w ith co n g ressio n al in ten t. A n d n o n

- en f o rcem en t b y th e ex ecu tiv e b ran ch d o es n o t eq u al rep eal b y Co n g ress; reg ard less o f th e p artial w aiv er, all ofB E N N E T T V

. B A

N K M E L L I 19

s t a t u te a nd Cong ress’ intention to make it easier for v ict i m s of terrorism to recover judg ments, we hold that § 1 610(g ) is

a frees t anding provision for a ttaching and ex ecuting ag ainst
assets to satisfy a money judg ment premised on a f o reig n state’s act of terrorism.

B a nk Melli arg ues, and o u r colleag ue ag rees, that our reading of § 1610(g ) renders § 1610(a)(7) a nd ( b ) ( 3 ) superfluous. 6 B ut the tension w orks in the opposite direction. I f § 1 610(g ) is interpreted to require that, to b e subje c t t o attachment and ex ecution, property must be us e d by the foreig n state for a “commercial activity ,” § 1610(a), or that the instrumentality must be “ eng ag ed in commercial activity in the United States,” § 1610(b), then we would have to read into § 1610(g ) a limitation that Cong r ess did not insert. See United States v. Temple

, 1 05 U

. S

. ( 9 Otto) 97, 99 (1881) (holding that the court has “no rig h t to insert words a nd phrases, so as to incorporate in the statute a new and d istinct provision”). Section 1610(g ) (1) p r ovides that “ t he property of a foreign state ag ainst which a judg ment is entered under

su b sectio n (f

) rem ain s t

h e law

. Th ird

, th e b lin d ers- o n , tech n ical f o cu s of th is arg u m en t lo s es sig h t o f Co n g ress’ m ai n a i m , w h ich i s f or p riv ate p lain tif f s w h o s u f f ered to rtu re an d o b t ain ed t o rt j u d g m en t s to g et th eir

m o n ey f ro m terro rist states.

6 Ou r co l leag u e g iv es tw o o t h er reaso n s f

o r d isag reein g w ith

u s o n th is
p o in t. T h e f

i rst is th at § 1 6 1 0 (b )(3 ) d o es n o t req u ire p ro p erty “ to b e in v o lv ed in terro rism t o a b r o g ate attach m en t im m u n i ty .” P artial d issen t at 3 6

. W e do n o t su g g est t o th e co n trary

. T h e oth er reaso n is th at it w ou ld b e “ an u n j u stif i e d a n d u n f

o rtu n ate resu lt,” id

. at 3 8
, to allo w attach m en t

an d ex ecu tio n o f n o n

- co m m ercial p ro p erty , su ch as m u seu m artif

acts b elo n g in g to Iran

. B u t it is n o t o u r p ro v in ce to decid e w h eth er th e p o licy

c h o i ces em

b od ied in a statu te are w i se o r u n w ise; o u r task is, rath er, to d iscern co n g ressio n al i n t e n t. Da y-Brite Lig h tin g

, In c. v. Misso u ri
, 3 4 2 U.S. 4 2 1 , 4 2 3 (1 9 5 2 ).B E N N E T T V

. B A

N K M E L L I 20

section 1605A, and the property of an agen c y o r instrumentality of such a state,

. . . is subject to attachment in aid of ex ecution, and ex ecution.” (Emphases a dded.) Thus, Cong r ess did not limit the ty pe of p roperty subject to attachment an d e x ecution under § 1 610(g ) to property connected to commercia l a c t i vity in the United States. The only requirement is that property be “the property o f ” the foreig n state or its instrumentality

.

Two Seventh Circuit cases support our conclusion in this
reg ard. I n W

yatt v. Syrian A rab Republic

, 800 F

. 3d 331, 343 (7th Cir. 2015), cert. denied

, 1 36 S. Ct. 1721 (2016), the court held that the plaintiffs need not c omply w ith § 1608(e) when proceeding under § 1610(g ). The court noted that § 1608(e) is part of a “more g eneral process” a pplicable to “ suits other than those for state-spons o r e d terrorism, such as more ordinary contract or tort cases arising out of a foreig n state’s commercial a ctivities.” Id. at 333. Section 1610(g )

, the court noted, “contains provisions specific to claims for statesponsored terrorism.” Id. Those speci fi c provisions allow plaintiffs with a judg ment ag ainst a state sponsor of terrorism, ob t a i ned pursuant to § 1605A, to attach and ex ecute the judg ment ag ainst property of the fo reig n state and ag ainst property of a

ny a g e n c y and instrumentality of the state. Id. The other provisions of § 1610, contained in subsections (a) throug h (c), establish a g eneral process for judg ments ag ainst

a foreig n state n ot n ecessarily r e sting on state-sponsored terrorism. I

d.

Similarly

, th e court held in Gates that a p laintiff proceeding under § 1610(g ) n eed not c omply with § 1610(c). The court wrote in part:B E N N E T T V

. B A

N K M E L L I 21

Sections 1610(a) and (b) are available to satisfy a wi d e v a r iety of judg ments, but they allow attachment of only specif i c categ o r ies of assets to satisfy those judg ments. See, e.g. , § 1610(a) (allowing attachment of foreig n state property located in the United States a nd used for commercial activity there); § 1610(b) ( allowing a ttachment of property of foreig n state ag ency or instrumentality eng ag ed in United States commercial activity ).

B y contrast, § 1610(g ) is available only to holders of judg ments under the § 1605A

ex c eption f

or state-sponsored terrorism, but it allows attachment of a much broader rang e o f assets to satisfy

those judg ments.

Gates , 755 F .3d at 576.

Reg ardless of canons of construction—such a s the principle that a specific statute takes p r e ce d ence o ver a g eneral one—our ultimate search is for c ong ressional intent. Chickasaw Nation v. United States
, 5 3 4 U.S. 84, 94 (2001). And it is quite c lear that Cong ress meant to ex pand successful plaintiffs’ o ptions for c ollectin g judg ments ag ainst state sponsors of terrorism.B E N N E T T V

. B A

N K M E L L I 22

W e acknowledg e that § 1 610 as a w hole is ambig uous. 7 I n that circumstance, w e may c onsider leg islative history

. Id.
at 91–92; United States v. Pub. Utils. Comm’n
, 345 U.S. 295, 315 (1953). That history

sug g ests that § 1610(g ) was meant to allow attachment and ex e cution with respect to any property whatsoever o f the f oreig n state or its instrumentality

. Sen a t o r L a utenberg

, one of the sponsors of the bill that became § 1610(g ), stated that the provision would “ al l o w [ ] attachment of the assets o f a state sponsor of terrorism to be made upon the satisfaction of a ‘simple ownership’ test.” 154 Cong

. Rec. S54-01 (J an. 22, 2008) (statement of Sen. L autenberg ). The House Conference Rep o rt for a substantially similar e a

rlier version o f the bill noted that the provision “would . . . ex pand the ability of claimants to seek

recourse ag a inst the property of that foreig n state,” in part “by permitting any property in whi c h the foreig n state h as a beneficial o wnership to be subje ct to ex ecution of that

7 W e also ack

n o w led g e th at th e U n i t e d S t ates, ap p earin g as am icu s

cu riae, d isag rees w ith o u r in terp retatio n

. W e are n o t req u ired to d ef er to th e g o v e r n m en t’ s v iew b ecau s e, i n d ecid in g t h is case, w e “ are n ot b ein g ask ed to su

pp lan t a f o reig n p o licy d ecisio n

o f th e p o litical b ran ch es w i th th e co u rts’ o w

n u n m o o red determ i n atio n .” Zivo to fsky e x r e l. Zivo to

fsky v. Clin t on , 1 32 S. Ct. 1 4 2 1
, 1 4 2 7 (2 0 1 2 ). T o th e co n trary , th e ex ecu tiv e b ran c h h a s ap p ro v ed th e b u ild in g b lo ck s o f t h e statu to ry criteria f

or

ex ecu tio n o n t

h e p ro p erty in q u estio n , w h ich w e are ap p ly in g i n a ro u tin e

ex ercise o f statu to ry in terp retatio n : T h e P resid en t sig n ed th e l eg islatio n th at b ecam e § 1 6 1 0 (g ), Pu b

. L

. No

. 1 1 0

- 1 8 1
, P resid en t B u sh Sig n s th e Natio n al Def

en se A u th orizatio n A ct f

o r Fiscal Yea r 2 0 0 8
, 2 0 0 8 U.S. C

. C

. A.N. S3 (J an

. 2 8, 2 0 0 8 ); th e Presid en t h as n o t so u g h t t o w aiv e

en f o rcem en t as w as d o n e w ith resp ect to § 1 6 1 0 (f )(1 ); th e Secretary of State listed Iran as a terro rist state, 4 9 Fed

. Reg

. 28 3 6

- 0 2 (J an

. 2 3
, 19 8 4 );

an d th e P resid en t im

p o sed m o n etary san ctio n s o n Iran
, Ex ec. Ord er No

. 1 3 ,5 9 9, 7 7 Fed

. Reg

. 6 6 5 9 (Feb

. 5
, 2 0 1 2 ). A n d

, f in ally

, in “ [e]n actin g th e FSIA in 1 9 7 6, Co n g ress tran sf erred f ro m th e Ex ecu t iv e to th e co u

rts th e p rin cip al resp o n s ib ility f or d eterm in in g a f

o reig n state’ s am en ab ility to

su it.” Ba n k Ma r

ka z i , 1 3 6 S. Ct. at 1 3 2 9

.B E N N E T T V

. B A

N K M E L L I 23

judg men t

. ” H .R. Rep. N o. 11-447, a t 1001 (2007) (Conf. Rep.). T he bill, it continued, “ is written to subject a n y property interest in which the foreig n state enjoy s a beneficial ownership to attachment a n d e x ec ution.” Id. W e have already noted that the basic purpose of adding § 1610(g ) was to enable p laintiffs w h o h a v e established a foreig n state’s liability under § 1 605A and its predecessor, for terrorist acts, to collect o n their judg ments. As Senator L autenberg put it, the bill was meant “to facili t a t e v ictims’ collection of their damag es from state sponsors of terrorism.” 154 C ong

. Rec. S54-01 (J an. 22, 2008) (statement of Sen. L autenberg ). Our interpretation of § 1610(g ) more fully f urthers that fundamental aim.

B a nk Melli also ma k e s three other a rg uments reg arding § 1610(g ). W e can dispose of those arg uments easily

. (1) T he district court’s failure to discuss e x pressly whether to g rant B ank Melli discretiona r y relief under the “innocent party ” provision of § 1610(g )(3) does not mean that the c ourt failed to consider whether t h at provision applied. B ank Melli made its § 1610(g )(3) arg ument t o the district court, and we presume that the court understood its authority but declined to ex ercise d iscretion in B ank Melli’s f avor. Cf. United States v. Davis
, 264 F .3d 813, 816–17 (9th Cir. 2 001) (so h o l d i ng in the contex t of a district court’s silence
reg arding a requested downward departure under the United States Sentencing Guidelines).

(2) T here is no conflict between § 1610(g ) a n d t he 1955 Treaty of Amity between the United States a nd I ran , which requires that the United States respect the juridical sta t u s o f I ranian c ompanies, protect their p roperty in accordance with international law, and not discriminate ag ainst them. TreatyB E N N E T T V

. B A

N K M E L L I 24

of Amity

, E conomic Relations and Consular Rig hts B etween the United S t a t e s o f America and I ran, Aug

. 1 5, 1955, 8 U.S.T. 899, 902–03. As the Second Circuit held, that treaty provision is intended simply to e n s u r e that foreig n corporations are o n equal footing with domestic corporations. W einstein
, 609 F .3d at 53. Even if the two provisions were inconsistent, when a treaty and a later-enacted federal statute conflict, the subsequent statute contr ols to the ex tent of the conflict. Breard v

. Greene
, 523 U.S. 3 71, 376 (1 998) (per curiam).

(3) A llowing the Heiser plainti ffs to obtain relief under § 1610(g ) by converti n g their § 1 605(a)(7) judg ment to a § 1 6 05A judgment d oes n ot violate separation of powers principles. B ank Melli’s reliance on Plaut v. S pendthrift Farm, Inc.
, 514 U.S. 211, 219 (1995), is misplaced. T h e r e, the court held that Cong ress could not require federal courts
to reopen final judg ments. B u t here, th e j u dg ment was not reopened. I nstead, the H eiser plaintiffs have a new collection tool; they can enforce their final judgm e n t a g ainst I ran b y attaching and ex ecuting on the p ropert y of I ran’s instrumentality

. I n essence, the st a t u t e gives more e ffect to the f inal judg ment, rather than a ttempting to revise or rescind that judg ment.

B

. The statutes do not impermissibly impose retroactive liability

.

B a nk Melli nex t arg ues that the judg ment creditors cannot

use TRI A § 201(a) or F SI A § 1610(g ) because the t errorist
acts that underlie the judg ments occurr e d b efore the
enactmen t o f those statutes. The g eneral default rule is that

a law that increases substantive liability for past conduct doesB E N N E T T V

. B A

N K M E L L I 25

not operate retroactively

. Landgraf v. U S I Film Prods.

, 511 U.S. 244, 280 (1994).

B u t the statutes do not i m p o se new liability on I ran. Section 1 605(a)(7) w as in effe c t at the time of the terrorist
acts in question. Rather, the statutes simply permit additional methods of c ollection. See id. at 275 (noting that the default rule d oes not a

pply to rules of procedure beca u s e o f “diminished reliance interests”).

Even if TRI A § 201(a) and F SI A § 1610(g ) are viewed a s imposing new liability retroactively

, the default rule is different for statutes that g overn foreig n sovereig n immunity

. I n Altmann

, 541 U.S. a t 6 9 2
, the Supreme Court concluded that the Landgraf

presumption does not apply to such statutes. To the contrary , when it c omes t o sovereig n immunity for both fo re i gn states and their ag e ncies and instrumentalities, there is a presumption in favor of r e troactivity “absent contraindications” from Cong ress. Id. at 696.

Here, there are no such contraindications. I n fa ct, the opposite is true. The purpose of th e s t a t u t es at issue was to enable not just future litig an t s , b ut also current judg ment creditors to collec t o n t he final judg ments that they already held—which, as a m a tter of log ic, arose from past acts. Cong r ess c hose to make TRI A § 201(a) applicable in “ every

case in which a person has obtained a judg ment” under either the former statute, § 1605(a)(7), or the curren t s t a t ute, § 1605A. TRI A § 201(a) (emphases adde d )

. Similarly

, Co n gress chose to make § 1 610(g ) applicable to all judg ments entered u nder § 1605A. According ly

, these
statutes apply even if the y a r e seen as imposing liability retroactively , because Cong r e ss so intended.B E N N E T T V

. B A

N K M E L L I 26

C. The blocked assets are property of Bank Melli

.

B a nk Melli also contends that TRI A § 201(a) a n d F SI A § 1610(g ) do not permit attachment of the assets here because Visa and F ranklin own th e blocked assets; B ank Melli does

n o t

. U n der TRI A § 201(a), to be subject to ex ecution or attachment, the b l o c ked assets must be “assets of” the instrumentality

. Similarly

, § 1610(g ) applies to “ the property of” the instrumentality

.

L i k e m o s t courts, we look to state law to determine the

owne rs h ip of a ssets in this c ontex t. Peterson
, 627 F .3d at 1130–31; see also Calderon-Cardona v

. Bank of N.Y

. M ellon

, 770 F .3d 9 93, 1000–01 ( 2d Cir. 2014) (looking to New York law to determine w hat ty pe o f interest rendered property attachable under § 1610(g )), cert. d e n i ed

, 136 S. Ct. 893 (2016); W

alker Int’l Holdings, Ltd. v. R e p u blic o f Congo
, 415 F .3d 413, 415 (5th Cir. 2005) (a p p l y i n g Tex as law to determine a ttorney f

e e s award in F SI A acti o n ) ; Hegna v

. Islamic Republic of

Iran
, 380 F

. 3 d 1000, 1007 ( 7th Cir. 2 004) (applying I llinois law to d ecide whether p roperty interest was open to challeng e in action under F SI A ); Karaha Bodas Co.

v. Perusahaan Pertambangan Minyak D an Gas Bumi Negara ( “Pertamina”

)

, 313 F .3d 70, 83 (2d Cir. 2002) (apply ing Ne w Y ork law to d etermine what a ctions are subject to enfo r c e ment and available to judg ment creditors). Here, California law app l ies. A s we held in Peterson
, California law authoriz es a court to order a judg ment debtor to assig n to the judg ment c reditor a rig ht to pay ments that are due or will become due, even i f t h e rig ht is c onditioned on future developments. 627 F. 3 d a t 1130–31; Cal. Civ. Proc. Code § 482.080(a)(2) (providing that a court may order a defendant subject to a writ of attachment to turn over either “evidence of title to property of or a d ebt owed to the defend a nt”); id.B E N N E T T V

. B A

N K M E L L I 27

§ 6 80.310 (“’Property ’ includes real and personal p ropert y and any interest therein.”); id. § 708.210 ( p e r mitting a judg ment creditor to bring an action ag ainst a third party to whom the judg ment debtor owes money “to have the interest

o r debt applied to the satisfaction of the money judg ment ”) ; id. § 708.510(a) (authoriz ing a court to “order the judg ment debtor to assig n to the judg ment creditor

. . . all o r p a r t o f a rig ht to pay

ment due”). That is precisely the situation in the present case: B ank Melli has a contractual rig ht to obtain
pay ments from V isa and F ranklin. Under California l aw, those assets are property of B ank Melli a nd may be assig n ed to judg ment creditors.

B u t even if federal law s h o u l d g overn this question, see Heiser v

. Islamic Republic of Iran
, 735 F .3d 934, 940 ( D

. C. Cir. 2013) (creating federal rule of decis i o n t o interpret ownership r equirements in F SI A
, b ased in part on U.C.C. Article 4A and common law p rinciples)

, B ank Melli would not succeed. F ederal law and California law are alig ned.

F irst, we note that Cong ress h as used ex pansive w ording
to sug g est that immediate and o utrig ht ownership of assets is
not required. I n the TRI A, Cong r ess provided that “[ n] othing in this subsection shall bar

. . . enforcement of any judg ment to which this subsection applies . . . ag a inst assets otherwise available under this section or under any other provision of law .” T R I A § 201(d)(4) (emphasis added). I n F SI A § 1610(g ), Cong r ess specified that “the property of a foreig n state ag a inst w h ich a judg ment is entered under section 1605A, a nd the property of a n a g ency or instrumentality o f such a state, including propert y that is a separate juridical entity or is an interest held directly or indirectly in a separate juridical entity

, is subject to attachment in a id of ex ecution, and ex ecution, upon that judg m e n t a s provided in thisB E N N E T T V

. B A

N K M E L L I 28

section.” (Emphases a d d ed.) Thus, interests held by the instrumentality of a terrorist s t at e, as is the case here, a re subject to attachment under federal law.

Second, in He i s e r , only f oreig n nationals, and not a foreig n country , had an interest in the blocked funds held by intermediary banks. “ I r anian entities were not the orig inators of the f unds transfers. Nor were t h e y t he ultimate beneficiaries.” H

eiser
, 735 F .3d at 936 (footnote omitted). B y contrast, here, B a

n k Melli is the ultimate beneficiary ; Visa and F ranklin owe money to B ank Melli for services rendered pursuant to an ag reement between them. According ly

, B a nk Melli has an interest in the blocked assets.

I n summary , Califo r n i a law a pplies. Under California law, money owed to B ank Melli may be assig ned to judg ment creditors. Even if federal law appl i e s, u nder the Heiser court’s rationale, attachment and ex ecution a re allowed here because B ank Melli is the intended contractual beneficiary o f the contested funds.

D. Because Bank Melli d o e s not enjoy sovereign immunity, Rule 19 presents no barrier

.

Fi n a l l y , B ank Melli relies on F ederal Rule of Civi l Proce d u re 19 to support its request for dismissal. That rule provides that a person must be joined as a party if the person “claims an interest relating to the subject of the action and is

so situated that disposing of the action in the person’s absence
may

. . . impair o r impede t h e person’s ability to protect the interest.” F ed. R

. C iv. P. 19(a). And, if the “person who is required to be joined if f easible cannot be joined, the court must determine w hether, in equity and g ood conscience, theB E N N E T T V

. B A

N K M E L L I 29

action should proceed among the ex isting parties or should be dismissed.” F ed. R. Civ. P. 19(b).

B a nk Melli a r g u e s that this case must be dismissed because it is a required p a r ty that cannot be joined and, further, that the actio n c a n not proceed without it “in e quity

a n d g ood conscience.” B ut, because TRI A § 201(a) a n d F SI A § 1610(g ) confer jurisdiction by creating ex c eptions to sovereig n immunity

, B ank Melli can be joined in this action. Thus it does not matter wheth er B ank Melli is otherwise a require d p a r t y under Rule 19(a); dismissal is n ot required. See 2 8 U.S.C. § 1330 ( providing jurisdiction over a foreig n state or its i n s t rumentality when it is not entitled to immunity ); W

einstein
, 609 F .3d a t 49–50 (holding that TRI A § 201(a) removes ju r i s d ictional immunity

, as w ell a s immunity from attachment and ex e c ution). 8

According to B ank Melli, R e public o f t h e Philippines v

. Pimentel

, 553 U.S. 851 (2008), requires dismiss al. W e disag ree. A class of v ictims of human rig hts abuses in the Republic of the Philippines won a $2 billion default judg ment ag ainst the Estate of F e rdinand Marcos, the former president

o f that country

. Id. a t 857–58. The class attempt e d t o

e nforce the judg ment by attaching a ssets owed to Merri l l

8 B an k Melli’ s citat i o n s t o Min istry o f Defen se & S

u p po rt fo r Armed Fo rces of Isla mic Rep u b lic o f I r a n v. Cu b ic Defen se S ystems, In c. , 3 8 5 F.3 d 1 2 0 6 (9 th Cir. 2 0 0 4 ), va ca t ed a n d rema n d ed o n o th er g ro un d

s

su b n o m

. Min i

stry o f Def. & S

u p p o rt f o r A r med Fo rces o

f Isla m ic Rep u b lic o

f Ira n v. Ela h i
, 5 4 6 U.S. 4 5 0 (2 0 0 6) (p er cu riam ); an d Peterso n

v. Isla mic Rep u b lic o

f Ira n , 6 2 7 F .3 d 1 1 1 7 (9 th Cir. 2 01 0 ), are in ap po site. Neith er o f

th o se cases ad d ressed th e q u estio n w h eth er T RIA

§ 2 0 1 (a) o r F SIA § 1 6 1 0 (g ) co n f

ers j u risd ictio n w

h en pro p erty o w

n ed b y a t e r r o r i s t state’ s in s tru m en t ality is su b j ect to ex ecu tio n in satisf

actio n o f j u d g m en ts

en tered ag ain st th at terro rist state.B E N N E T T V

. B A

N K M E L L I 30

L y n c h by a bank incorporated b y Marcos personally

. Id. at 858. T he Philippines claimed ownership of t h e bank, a nd therefore the disputed a ssets, because the bank h a d b een incorporated throug h a misuse of public office. I d

. The Philippines also claimed immunity from the suit. Id. Merrill L y nch initiated an interpleader a ction naming

, among o t h er parties, the Republic of the Philippines and o ne of its
ag encies. Id. at 845–55. T h e Supreme Court held t h a t the

case should be dismissed because “it was improper [ f or the district court] to issue a d e finitive h olding reg arding a nonfrivolous, substantive c laim made by an absent, required entity that w as entitl ed by its sovereig n status to immunity from suit.” Id. at 868.

This case plainly is d i sting uishable. I n Pimentel

, the Republic was a required pa r t y that could not be joined because of sovereig n immunity

. H ere , Bank Melli does not enjoy sovereig n immunity

, so it can b e joined a s a party , whether or not it is a required party . Unlike the Republic in Pimentel

, therefore, B ank Melli is a ble to adjudicate its claim to the contested assets.

CONCL USI ON

W e hold: (1) T RI A § 2 0 1 (a) and F SI A § 1610(g ) auth o r i z e attachment and e x ecution of the monies owed to B ank Melli. (2) Those stat u t es d o not impose liability retroactively but, even if they are viewed as doing so, Altmann esta b l i shes a presumption in favor of retroactivity for statutes g o verning sovereig n immunity

, which is not rebutted here. (3) C a l i f ornia law g o verns the ownership question; the blocked assets are p roperty of B ank Melli under principles of California law a n d, thu s , are subject to attachment and ex e cution under T R I A § 201(a) and F SI AB E N N E T T V

. B A

N K M E L L I 31

§ 1610(g ). The same result would obtain even if federal law
g overned. ( 4 ) Be c ause B ank Melli can be joined in this action, the dismissal provision of F ederal Rule o f Civil Procedure 19 does not apply

.

AF F IRMED.

B ENSON, Senior District J udg e, concurring i n p a rt a nd dissenting in part:

I concur with the majority that § 201(a) of the Terrorism Risk I nsurance Act (“TRI A ” ) a n d § 1 610 of the F oreig n Sovereig n I mmunities Act (“F SI A”) permit the judg ment credito r s i n this case to attach and ex ecute ag ainst monies owed to B ank Melli. However, I r espectfully bel i e v e the

m a jority erred in f

inding § 1610(g ) to be a freesta n d i n g immunity ex ception under FS I A

. I n my view, judg ment creditors relying on § 1610(g ) are able to proceed, reg ardless of Ba nk Melli’s sovereig n immunity

, because the judg ment creditors have sufficiently alleg ed B ank Melli i s e n g ag ed in

commerce in the United States within th e m e a ning o f § 1610(b)(3) of F SI A.

F SI A contains “ex tensive procedural protections for foreig n sovereig ns in United States courts.” W yatt v. Syrian Arab Republic

, 8 00 F .3d 3 3 1, 333 (7th Cir. 2015). Specifically

, § 1609 of F SI A provides a g eneral presumption that property of a f

oreig n state and the property of an instrumentality or age n c y o f a foreig n state is immune from

ex e c ution and attachment in United States cou rts. See 28 U.S.C. § 1609; 28 U.S.C. § 1603(a). I n turn, § 1610 provides a series of ex ceptions to this g eneral rule.B E N N E T T V

. B A

N K M E L L I 32

Prior to 2008, § 1610 provided different rules for attachment immunity depending o n whe ther the party was seeking immunity as the foreig n state or as an a g ency o r instrumental i t y o f a foreig n state. Reg arding foreig n states, § 1610(a) denied immunity where: (1) a judg ment credi t o r obtained a judg ment ag ainst the f o reig n state; (2) the property of the foreig n s t a t e i s located in the United States; (3) the property is used for “a c ommercial activity ” in th e United State s; and (4) one of § 1610(a)’s seven avenues for abrog ating immunity applied. See 28 U.S.C. § 1610(a). Similarly

, with respect to ag encies a n d instrum entalities, § 1610(b) denied i m m u n i t y where: (1) a judg ment creditor

o b t a ined a judg ment ag a inst an ag ency or instrumentality o f foreig n state; (2) the ag ency or instrumentality is eng ag ed in commercial activity i n the United States; (3) the p roperty o f the ag ency o r instrumentality is located in the United States; and (4) one of § 1610(b)’s three avenues for abrog ating immunity applied. See 28 U.S.C. § 1610(b).

Prior to 2008, the judg ment creditors in t h i s case would have been required to obtain a judg ment ag ainst B a nk Melli
to u tiliz e the immunity waiver provisions under § 1610(b) to attach B ank Melli’s property

.

I n 2008, Cong ress amended F SI A, adding § 1610(g ) and § 1605A. N ational Def ense Authoriz ation Act for F iscal Year 20 0 8
, P u b. L

. N o. 110-181, § 1083, 1 22 Stat. 3, 338 (2008). The p urpose of the a men d m ents was to r elax the protections of § 1610 in cases of state sponsored terrorism to “make it easier for terrorism victims to obtain judg ments a nd
to att a c h a s s e ts.” Gates v. S yrian Arab Republic

, 755 F .3d 568, 576 (7th Cir. 201 4 ) ; In re Islamic Republic of I ran Terrorism Litig.
, 659 F

. Supp. 2d 31, 62 (D.D.C. 2 009) (noting , “these latest additions to

. . . F SI A demonstrate thatB E N N E T T V

. B A

N K M E L L I 33

Cong r ess remains focused on e liminati ng those barriers that have made it nearly impossible for plaintiffs in these actions
to ex ecute civil judg ments ag ainst I ran or other state sponsors of terrorism”).

Under § 1610(g ), if a judg me n t c r editor obtains a judg ment under § 1605A, the property of the foreig n state a nd “the property of an ag ency or instrumentality of such a state, including p roperty that is a separate juridical entity

. . . i s subject to attachment

. . . and ex ecution, upon that judg ment

as provided in this section
, r e ga rdless” o f five factors. 28 U.S.C. § 1610(g )(1) (emphasis added). The f i v e f actors enumerated in § 1610(g )(A) throu g h (E) reflect the B ancec presumption, which requires this Court to tr e a t g overnment entities established as separate juridical entities distinct from their sovereig ns. See First Nat’l City Bank v. Banco Para el Comercio Exterior de Cuba

, 462 U.S. 6 11, 620–21 ( 1 983); Flatow v. Islamic Republic of I ran , 308 F .3d 1065, 1071 n.9 (9th Cir. 2009) (outlining the B ancec factors ( c i t ing W alter Fuller A ircraft Sales, Inc. v. Republic o f the Philippines

, 965 F .2d 1375, 1380 n.7 (5th Cir.1992))).

Section 1 610(g ) leads to two straig htforward conclusions under F SI A. F irst, if a party obtains a § 1 605A judg ment ag ainst a state sponsor o f terror, the B ancec presumption is eliminated, which perm i t s a court to attach and ex ecute ag ainst the property of the a g ency o r instrumentality to satisfy the judg ments ag ainst the foreig n state. See Estate of Heiser

v. Islamic R epublic of

Iran
, 885 F

. Supp. 2d 429, 442 (D.D.C. 2012) (“Section § 1610(g ) su b p a r ag raphs (A)–(E) ex plicitly prohibit con s i d e ration of each of the five B ancec factors.”); aff'

d sub n o m

. H

eiser v. I slamic Republic of Iran
, 735 F .3d 934 (D.C. Cir. 2013). Second, the lang uag e “as provid e d in this section” requires a judg ment creditor toB E N N E T T V

. B A

N K M E L L I 34

find an ex isting mechanism of at t a chment under § 1610. Section 1610(g ) does not create a new avenue for attachment under F SI A; rather, § 1610(g ) b roadens the force of § 1610’s

ex isting avenues f

or attachment by eliminating the l e gal fiction that B ank Melli is a separate juridical entity from I ran.

I n this case, judg ment creditors rely ing on § 1610(g ) may proceed to attach B ank Melli’s property because B a nk Melli’s property is not immune from attachment by virt ue o f § 1610(b)(3). Section 1 6 10(b)(3) eliminates attachment im m u n i t y if an ag ency or instrumentality is “eng ag ed in commercial a ctivity in the United States” and “the judg ment relates to a claim for which the age n cy or instrumentality is

n o t i m mune by v irtue of section 1 605A of this chapter

. . . reg ardl ess of whether the property is or was involved in the
act u p on which the claim is based.” 28 U.S.C. § 1 6 10(b)(3). The judg ment creditors can attac h B ank Melli’s property because: (1) the judg ment creditors have obtained a judg ment ag ainst I ran pursuant to § 1605A; (2) § 1610(g ) eliminates the B ancec pre s u mption, allowing this Court to attach a nd

ex e c ute ag ainst B ank Melli’s assets t o s a tisfy the judg ment ag ainst I ran; and (3) the judg ment c r editors have sufficiently plead that B ank Melli is e ng ag ed in c o m m e rcial activity in the United States.

Section 1603(c) of F SI A defines commercial activity as: “either a reg ular course of c ommercial c o nduct or a particular commercial transaction or a c t. The c o mmercial character of

an activity shall be determined by reference t o t h e n ature o f the course of conduct or p a r t i c u l ar transaction or act, rather than by reference to its p urpose.” 28 U.S.C. § 1 6 03(c) (emphasis added). B ank Melli entered into a contract with an American company to p rovide an American compan y a commercial service. [ ER, p. 8 2

– 8 3
, ¶ 2; ER, p. 6 4, ¶ 16B E N N E T T V

. B A

N K M E L L I 35

(“Visa h o lds the B locked Assets, funds due and owing b y contract to B ank Melli pursuant to a commercial relationship with that bank

. . .”).] At this stag e in the litig ation, the Court

can conclude that the judg ment creditors relying on § 1610(g ) have sufficiently a lleg ed Ba n k Melli is eng a g ed in commercial activity

in the United States.

T he majority d isag rees with the aforemention e d interpretation an d c o n cludes that § 1610(g ) creates a freestanding

immunity

ex ception under F SI A. The majority believes a § 1605A judg ment c reditor may attach B a nk Melli’s property reg a

rdless of any commercial c omponent under § 1610(a) o r § 1610(b). I n my view, respectfully

, the majority misses the mark in three important respects.

F irst, the majority erroneously fin d s that § 1610(g ) is a freestanding

ex ception to immunity by concluding :

Subsection (g ) covers a different subject than § 1 610(a) throug h (e): by its ex press terms, it applies only to ‘certain actions,’ specifically

, judg ments ‘e n tered under section 1605A.’ (Emph asis added.) I n turn, § 1605A revokes sovereig n immunity for damag es claims
ag ainst a foreig n state for personal injury o r death caused by ‘torture, ex trajudicial killing

, aircraft sabotag e, h ostag e taking

, or t he provision of material support’ f or such an act. B y definition, such claims do not arise f rom commercial a c t i v ity ; they arise from acts o f torture (and the like).

[ Maj. Op., p. 17.] I n doing so, the majority misinterprets the operation o f § 1610(a) and ( b ) waivers in the c ontex t o fB E N N E T T V

. B A

N K M E L L I 36

§ 1605A judg ments. U nder § 1610(b)(3), a judg ment creditor

can attach property where the inst r u m e n tality is eng a g ed in commercial activi t y in the U nited States. F urthermore, § 1610(b)(3) provides that attachment immunity is eliminated

“ regardless of whether th e p r o perty is or was involved with the act u

pon which the claim is based.” 2 8 U .S.C. § 1610(b)(3) (emphasis added). The r efore, a § 1605A judg ment allows a judg ment creditor to g et immunity waived for any p roperty where the instrumentality is eng ag ed in

commerce in the United Sta t e s , r eg ardless whether the property was involved in the actions that g ave r i s e to the § 1605A waiver of immunity ag a inst the forei gn s t ate. T h e refore, B a

nk Melli’s property does not need to b e involved in terrorism to abrog ate attachment immunity under § 1610(b)(3).

Second, the majority concludes t h at the “as provided in this section” lang uag e found in § 1 610(g ) refers to the procedural aspects o f § 1610, namely § 1610(f). F air enoug h. B ut, the majority ’s conclusion does not m e a n the lang uag e “as provided in this section” refers only to § 1 610(f). I ndeed, the majority ’s piecemeal r eading o f § 1610(g ) renders other portions of § 1610 inoperable. “ I t is ‘a cardinal principle o f statutory construction’ that ‘a statute oug ht, upon the whole,
to be so construed that, i f i t can be prevented, no clause, sentence, or w o r d shall be superfluous, v oid, o r insig nificant.’” TRW Inc. v

. Andrews

, 534 U.S. 19, 31 (2001) (quoting Duncan v. W

alker

, 5 33 U .S. 1 67, 174 (2001)). This Court should a dopt the interpretation of § 1610 that “‘g i ves effect to every c l a u se and word.’” Marx v. Gen. Revenue Corp.
,

_ __U.S.___, 133 S. Ct. 1166, 1177 ( 2013) (citing Microsoft Corp. v. i4i Ltd. P’ship , 564 U.S. 91 (2011)).B E N N E T T V

. B A

N K M E L L I 37

The majority ig n o res t h e avenues for ex emption under § 1610(a)(7) and § 1610(b)(3). Sect i o n 1610(a)(7) a nd § 1610(b)(3) p rovide immunity

, in addition to requiring some interplay with commerce , w h e re “the judg ment relates to a claim for which the foreig n state is not immune under section 1 6 0 5 A

. . . .” I f a § 1605A judg ment creditor can waive attachment immunity under § 1610(g ) without proving the property is used in comm e r c e o r the instrumentality is
eng ag ed in commerce in the United States, § 1610(a)(7) and § 1610(b ) ( 3) are rendered superfluous and obsolete. Conversely

, recog niz ing § 1610(g )’s limited pur pose was to eliminate the B ancec presumptio n e nsures this Court g ives effect to every clause and word in § 1610 while honoring the purpose of the 2008 F SI A amendments.

F inally

, the majority ’s hol d i n g ig nores the practical limitation the commerce requirement p l a c es on § 1605A judg ments. Reading § 1610(g ) as a f reestanding immunity

ex c e ption d o e s not just relax F SI A in the contex t o f terrorism—it eliminates any immunity protection under F SI A for state sponsors of terror and their instru m entalities. F o r

ex a m p l e, in R ubin v

. Islamic Republic of Iran
, American citiz ens sued and obtained default judg ments ag ainst I ran for injuries and losses that arose out o f a suicide bombing carried
out by Hamas in I srael. 33 F

. Supp. 3d 1003, 1006 (N.D. I ll. 2014). The Rubin plaintiffs soug ht to “attach and ex e cute on

numerou s an cient Persian artifacts” in possession of two

museums in the United States t o satisfy their default j udg ments a g ainst I r an. Id. L ike the judg ment creditors i n this c ase, the Rubin plainti ffs arg ued that § 1610(g ) is a freestanding immunity ex ception and, therefore, the plaintiffs
may attach I ran’s a

rtifacts to satisfy their judg ments. I d. at 1013.B E N N E T T V

. B A

N K M E L L I 38

The c ourt d isag reed, finding : “The plain l a ng uag e indicates that Section 1610(g ) is not a separate basis o f attachment, but rather qualifies the previous subsections.” Id. The court concluded, “the purpose of Section 1610(g ) i s to counteract the Supreme C o u rt’s decision in B ancec, and to allow ex e cution ag a inst the assets of separate juridical entities
reg ardless of the protections B ancec may have o ffered.” Id. Currently

, the Rubin case is pending appeal in the S e v e nth Circuit. R ub i n v

. Islamic Republic of I ran , 3 3 F

. Supp. 3d 1003 (N.D. I ll. 2014), appeal docketed

, N o. 14-1935 ( 7th Cir. Apr. 25, 2014).

Surely this Court’s holding will be arg ued as precedent to

a l low the Rubin plaintiffs to seiz e Persian artifacts to b e auctioned off to sa t i sfy the Rubin plaintiffs’ default judg ments. T his would be an u n j u s t i fied and unfortunate result. W hen Cong ress amended F SI A, the intention was to eliminate the B ancec presumption and rel a x the rig idity o f § 1610 to make it e a sier for victims of terrori s m t o s atisfy judg ments ag ainst state sponsors o f terror. Cong ress did not, however, intend to open the floodg ate s and allow terrorism plaintiffs to attach any and all I ranian property in the United States. Rather, Cong ress intended the commerce limitation
to remain in place. 1 I f a foreig n state is desig nated as a state
sponsor of terror, the state and t he instrumentalities a nd
ag enc i e s o f the state lose the privileg e o f doing business in

1 T RIA § 2 0 1 sim ilarly co n t ain s a lim i tatio n o n attach m en t an d

ex ecu tio n

. T RIA § 2 0 1 req u ires attach ab l e assets t o b e d ef in ed as

“ blo ck ed assets.” Sectio n 2 0 1(d )(2 )(A ) d ef in es a “ b lo ck ed asset” as an y asset “ seized o r f

ro zen b y th e Un ited States u n d er sectio n 5 (b ) o f th e T rad in g W ith th e En em

y A ct (5 0 U.S.C. A

p p

. 5 (b )) o r u n der sectio n s 2 0 2

an d 2 0 3 o f th e In t ern atio n al Em erg en cy Eco n o m ic P o w ers A ct (5 0 U.S.C. 1 7 0 1 ; 1 7 0 2).”B E N N E T T V

. B A

N K M E L L I 39

the United States w i t h out running the risk of property being seiz ed to satisfy

judg ments.

I n sum, I would require j u d gm ent creditors rely ing on § 1610(g ) to satisfy one o f § 1 610’s ex isting avenues for abrog ating attachment immunity

. I n this case, the judg ment creditors have do ne that. The judg ment creditors have sufficiently alleg ed B ank M e lli is eng ag ed in commerce in the United States within the meaning of § 1610(b)(3).