United States Court of Appeals

Fifth Circuit

FILED

July 19, 2004

Charles R. Fulbruge III

Clerk

In the

United States Court of Appeals

for the Fifth Circuit

_______________

m 03-10994

m 03-20984

_______________

EDWENA HEGNA; INDIVIDUALLY AND AS EXECUTRIX OF

THE ESTATE OF CHARLES HEGNA; CRAIG HEGNA; STEVEN HEGNA;

LYNN HEGNA; PAUL HEGNA,

Plaintiffs-Appellants,

VERSUS

ISLAMIC REPUBLIC OF IRAN;

IRANIAN MINISTRY OF INFORMATION AND SECURITY,

Defendants-Appellees,

UNITED STATES OF AMERICA

Movant-Appellee.

_________________________

Appeals from the United States District Court

for the Northern District of Texas

and the United States District Court

for the Southern District of Texas

_________________________
2

Before SMITH, PRADO, AND PICKERING,

Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Charles Hegna died at the hands of

terrorists who received partial support from

the Islamic Republic of Iran. Members of the

Hegna family have attempted to collect a

default judgment against property previously

owned by Iran and currently held by the United States. Based on domestic statutes and

international treaties, the two district courts a

quo quashed writs of attachment and

execution issued respectively against two

parcels of real property. Finding no error, we

affirm both judgments.

I.

A.

The Federal Sovereign Immunities Act

(“FSIA”) articulates the general rule that “a

foreign state shall be immune from the

jurisdiction of the courts of the United States

and of the States.” 28 U.S.C. § 1604. As part

of the 1996 Antiterrorism and Effective Death

Penalty Act (“AEDPA”), Congress created an

exceptionforstate-sponsored terrorist actions.

28 U.S.C. § 1605(a)(7).1 To be subject to

§ 1605(a)(7), a nation must be designated as a

state sponsor of terrorism. § 1605(a)(7)(A).2

The Victims of Trafficking and Violence

Protection Act of 2000 (“VTVPA”), Pub. L.

No. 106-386, § 2002, 114 Stat. 1464, 1541

(2000), created a regime whereby a party who

secured a judgment under § 1605(a)(7) could

receive payment from the Secretary of the

Treasury. In exchange for that payment, the

recipient would relinquish certain rightsto collect against the terrorist state.3

The Terrorism Risk Insurance Act

(“TRIA”), Pub. L. No. 107-297, § 201(a), 116

Stat. 2322 (2002), provided additional rights

to parties possessing judgments under § 1605-

(a)(7). TRIA states that a successful plaintiff

may attach and execute against the “blocked

assets”4 of terrorist parties.5

Additionally, TRIA § 201(c)(4) amendsthe

VTVPA by inserting a section describing the

procedures the government must follow in the

event available funds cannot satisfy all the

outstanding requests for payment for § 1605-

(a)(7) claims. Although those receiving partial

payments do not have to relinquish as many

1

“A foreign state shall not be immune . . . in

any case . . . in which money damages are sought

against a foreign state for personal injury or death

that was caused by an act of torture, extrajudicial

killing, aircraft sabotage, hostage taking, or the

provision of material support or resources” in aid

of a terrorist action. 28 U.S.C. § 1605(a)(7). 

2

 The Secretary of State has designated Iran as

a state sponsor of terrorism. 49 Fed. Reg. 2836-02

(Jan. 23, 1984).

3 Additionally, VTVPA § 2002(b)(2) lists the

sources of funding for payments arising out of

judgments against Iran: “rental proceeds . . . from

Iranian diplomatic and consular property located in

the United States; and . . . funds not otherwise

made available in an amount not to exceed the total

of the amount in the Iran Foreign Military Sales

Programaccount within the Foreign Military Sales

Fund[.]”

4

 TRIA § 201(d)(2) defines “blocked asset.”

5

 “[I]n every case in which a person has obtained a judgment against a terrorist party on a

claim based upon an act of terrorism[,] the blocked

assets of that terrorist party . . . shall be subject to

execution or attachment in aid of execution in order

to satisfy such judgment . . . .” TRIA § 201(a).
3

rights as they would have forfeited had they

received full payment via the VTVPA, the

recipients must give up some recovery rights.

VTVPA § 2002(a)(2)(C) requires the

relinquishment of punitive damages against a

terrorist entity, and § 2002(a)(2)(D) prevents

parties from executing or attaching property

“that is[, inter alia,] at issue in claims against

the United States before an international

tribunal[.]” 

Thus, in response to a family member’s

death, a party may seek a judgment against a

state sponsor of terrorism. The party may satisfy such a judgment by seeking and receiving

payment under the VTVPA and by attaching

and enforcing against “blocked assets”

pursuant to the TRIA.

B.

In1984, Hezbollah terrorists hijacked aKuwaiti airliner and diverted it to Tehran, fatally

shooting Charles Hegna in the process. In

2001, the Hegna family sought and obtained,

pursuant to 28 U.S.C. § 1605(a)(7),6a default

judgment for $42,000,000 in compensatory

damages and $333,000,000 in punitive

damages against the Islamic Republic of Iran

and the Iranian Ministry of Information and

Security.7

Relying upon TRIA § 201(a), the Hegnas

have attempted to attach and execute against

numerous properties that Iran owned at the

time of the 1979 hostage crisis.8 Specifically,

6 Few courts of appeals have considered the

application of § 1605(a)(7). But see Acree v. Republic of Iraq, 2004 U.S. App. LEXIS 10972

(D.C. Cir. June 4, 2004) (vacating a § 1605(a)(7)

award for failing to state a claim); Cicippio-Puleo

v. Islamic Republic of Iran, 353 F.3d 1024 (D.C.

Cir. 2004). Cicippio-Puleo held: 

[N]either 28 U.S.C. § 1605(a)(7) nor the

FlatowAmendment[, which granted punitive

damages pursuant to § 1605(a)(7)], nor the

two considered in tandem, creates a private

right of action against a foreign government.

Section 1605(a)(7) merely waives the

immunity of a foreign state without creating

a cause of action against it, and the Flatow

Amendment only provides a private right of

(continued...)

6

(...continued)

action against officials, employees, and

agents of a foreign state, not against the

foreign state itself.

Id. at 1033. 

Although Acree and Cipio considered statutes

at issue in the current appeal, they involved

different circumstances and issues. Both cases

considered the validity of the underlying judgment.

In the instant matter, neither party contests the

validity of the Hegna family’s original judgment.

Because neither side has briefed the issue or had an

opportunity to argue the point diligently, we choose

only to address the family’s ability to satisfy its

judgment against these two particular pieces of

property. If the United States wishes to argue the

reach of § 1605(a)(7), it may do so in a subsequent

case. 

7 Hegna v. Islamic Republic of Iran, No.

1:00CV00716 (D.D.C. Feb. 7, 2002).

8

In the midst of the Iranian revolution of 1979,

numerous “students” aligned with Ayatollah Kohmeini took Americans hostage in the American

Embassy. The President froze all property and

assets of the government of Iran that fell within or

would fall within the jurisdiction of the United

States. Exec. Order No. 12170, 44 Fed. Reg.

65729 (Nov. 14, 1979). The United States ultimately severed diplomatic and consular relations

(continued...)
4

they have pursued properties in New York,9

Illinois,10Maryland,

11

andTexas. Additionally,

they filed for a payment pursuant to the

VTVPA.12

Although the two countries promised, as

part of the Algiers Accords,13 to exchange

seized consular property, each has retained

previously-seized property. Consequently, the

United States acts as a custodian of the

property that the Hegnas have attempted to

attach, and, in every case, has moved to

invalidate the family’s actions. 

In the instant matter, the family attached

two pieces of Iranian property located in Texas. One, located in Lubbock, served as a

home from which the then-Crown Prince of

Iran could receive fighter pilot training.14 The

property located in Houston previously served

as the residence of the General Consul of

8

(...continued)

with Iran. The hostage crisis ended with the signing of the Algiers Accords in January 1981.

9 Hegna v. Islamic Republic of Iran, 299 F.

Supp. 2d 229 (S.D.N.Y. 2004). The district court

denied the application for attachment based on the

conclusion that the Hegnas had relinquished the

right to attach the New York property after accepting payment via the VTVPA.

10 Hegna v. Islamic Republic of Iran, 2003

U.S. Dist. LEXIS 14039 (N.D. Ill. Aug. 11, 2003).

The magistrate judge recommended denying the

United States’ motion to quash the family’s writ of

attachment. The Illinois proceedings occurred after

the Hegnas had applied for payment pursuant to

VTVPA but before payment from the government.

Because the Hegnas sought to rescind their application for payment, the magistrate judge recommended staying further proceedings until the

resolution of the VTVPA payment issue. As discussed, infra, the Hegnas received payments in

July and November 2003. 

11 Hegna v. Islamic Republic of Iran, 287 F.

Supp. 2d 608 (D. Md. 2003). The district court

granted theUnitedStates’motion to quash the family’s writ after concluding that the property at issue

fell outside TRIA’s definition of “blocked asset.”

12 The Hegnas argue that the Department of the

Treasury issued guidelines that ordered plaintiffs

such as themselves to apply for the VTVPA funds.

Because the language of the VTVPA statesthat the

payment regime initiates only “at the person’s

election,” the family’s argument warrants slightly

more discussion. VTVPA, § 2002(a)(1). 

We agree that the Treasury Guideline does not

stand as a model of clarity, directness, or help-

(continued...)

12(...continued)

fulness. The notice, however, contains ample language to indicate that a party may file for a VTVPA

payment and does not indicate that a plaintiff may

pursue relief only through the VTVPA.

13 In part, theAccords established the Iran-United States Claims Tribunal, a nine-member

commission charged with resolving “claims of

United States nationals against Iran and of Iranian

nationals against the United States[;] certain ‘official claims’ between the two Governments relating

to the purchase and sale of goods and services;

disputes between the two Governments concerning

the interpretation or performance of the Algiers

Declarations; and certain claims between United

States and Iranian banking institutions.” IranUnited States Claims Tribunal Background

Information, available at http://www.iusct.org/-

background-english.html (accessed June 18, 2004).

14 The Crown Prince received training at Lubbock’s Reese Air Force Base, which was closed in

1997. 
5

Iran.15

With respect to the Lubbock property, the

district court granted a writ of attachment and

a motion for expedited levy of a writ of

execution16and scheduled the sale of the

property for August 26, 2003. The United

States provided an initial VTVPA payment to

the Hegnas on July 30, 2003, and filed an

emergency motion to void the sale on August

22, 2003. Without providing a written

analysis, the district court granted the motion

to void the levy and the sale on August 25,

2003.

With respect to the Houston property, the

district court issued a writ of execution on November 27, 2002. After the United States

moved to quash the writ, the district court referred the matter to a magistrate judge, who,

on August 21, 2003, concluded that the

property fell within an exclusion to the

“blocked asset ” definition in TRIA § 201(d)-

(2)(B)(ii) and recommended that the district

court quash the writ. The district court adopted the recommendations without amendment.

The Hegnas appeal the district courts’ failure

to enforce the original writs of attachment and

execution. 

II.

In each case, the district court granted a

dispositive motion by terminating the relevant

writ. The respective cases, however, present

distinct questions of law. With respect to the

Houstonproperty, wemust determine whether

the property fits within the “blocked asset”

exclusion in TRIA § 201(d)(2)(B)(ii). With

respect to the Lubbock property, we must decide exactly how a partial payment pursuant to

VTVPA and TRIA affects a party’s ability to

collect against non-consular property. We review the district court’s legal analyses de novo. Kennedy v. Tangipahoa Parish Library

Bd. of Control, 224 F.3d 359, 365 (5th Cir.

2000).

III.

By requesting and receiving partial payment

according to the terms of the VTVPA, the

Hegnas relinquished the ability to enforce

against the Lubbock property. The parties do

not disagree that the Hegnas applied for

payment from the Secretary of the Treasury,

pursuant to VTVPA § 2002(a)(1),17 and that

they received a partial payment before the sale

of the Lubbock property. 

The Hegnas challenge the order to quash on

three grounds. First, they maintain that the

partial payment received on July 30 does not

trigger the relinquishment provisions of the

amended VTVPA. Second, they assert that

any relinquishment may occur only

prospectively and cannot apply to property

already attached and set for sale. Third, they

claimthat anypossible relinquishment does not

apply to the Lubbock property, because such

property is not “at issue” before an

15 Although the two properties are the subjects

of two separate actions and are located in different

federal judicial districts, we consolidated the

matters for argument and disposition. The cases

present similar questions regarding the same set of

statutes. 

16TheUnited States unsuccessfully opposed the

Hegna family’s motion.

17 Because the Secretary of the Treasury could

not make a full payment and gave the family only

a partial payment, the amended portions of

VTVPA § 2002(d)(5)(A) and (d)(5)(B), apply.
6

internationaltribunal.18 To affirm the quashing

of the writ of execution, we must agree with

the district court on all three matters.19

A.

The Hegnas’ acceptance of a partial

payment triggered the relinquishment

provisions of the VTVPA. Amended VTVPA

§ 2002(d)(5) states that 

[a]ny person receiving less than the full

amount of compensatorydamages awarded

to that party in a judgment . . . shall not be

required to make the [relinquishment set

forth in previoussections,] except that such

person shall be required to relinquish rights

set forth – (A) in subsection (a)(2)(C); and

(B) in subsection (a)(2)(D) with respect to

enforcement against property that is at issue in claims against the United States before an international tribunal or that is the

subject of awards by such tribunal. 

The phrase “such person” refers to the individual “receiving lessthan the full amount of

compensatory damages.” No other person is

referred to in that subsection. Thus, a party

receiving partial payment does not have to relinquish his rights to compensatory damages

but must give up those rights listed in the two

subsections. Subsection (a)(2)(C) concerns

punitive damages, and subsection (a)(2)(D)

addresses recovery against the “at issue”

properties. 

The Hegnas would have us draw a line between a partial-partial paymentSSone that falls

below the statutorily-defined portion that the

government must paySSand a completely-paid

partial payment. In essence, the Hegnas contend that they should have received more than

the government paid them and that the insufficiency of the amount allowed them to pursue

the sale of the Lubbock property. 

That theory failsfor two reasons. First, the

statute does not draw a distinction among

types of partial payments, but merely states

that “[a]ny person receiving less than the full

amount” willrelinquish punitive and “at issue”

rights. The receipt of any partial

paymentSSeven $1SSwould limit the Hegnas’

recovery options.

Secondly, the government eventually paid

the Hegnas their full share of their

proportional payment. The second payment

occurred in November 2003. Thus, whatever

relinquishment provisions are containedwithin

the partial payment regime apply to the

Hegnas.

B.

18 Specifically, the Hegnas argue that “[u]ntil

the matter of the [Iran-United States Claims] Tribunal’s subject matter jurisdiction over the Lubbock Property is determined, Iranian properties in

the United States, including the Lubbock Property,

are simply not property that is ‘at issue’ before the

Tribunal[.]” 

19 Though the amended VTVPA requires a party to relinquish only its general claims for punitive

damagesSSVTVPA§ 2002(a)(2)(C)SSit alsomandates relinquishment of all claimsSSpunitive or

otherwiseSSagainst property “at issue in claims

against the United States.” § 2002(a)(2)(D). Because the amendedVTVPA§ 2002(d)(5) expressly

states that one receiving less than the full amount

of compensatory damages “shall not be required to

make the [relinquishment] set forth in subsection

(a)(2)(B) or with respect to subsection (a)(2)(D),”

a party may continue to pursue compensatory

awards. That party, however, may not pursue

those awards against “at issue” property. Thus, we

must address whether the Lubbock property is “at

issue.”
7

Although receiving the VTVPA payment

causes them to relinquish “all rights” to

execute against designated property, the

Hegnas advance a creative but questionable

argument that they still may sell the Lubbock

property. Because payment did not arrive

until after the district court attached the

property and scheduled a sale, the Hegnas

maintain that the sale should proceed.20 Under

thistheory, Texaslaw21 placesthe court’slevy

against the Lubbock property in custodia legis

and ties all sales proceedings to the date of

seizureSSnamely, July 2, 2003.22

The Hegnas support this interesting rift in

the space-time-continuum by citing a 1927

Fifth Circuit case23 that concerned bankruptcy

and an 1884 Supreme Court opinion24 that addressed competing judgment liens from

Tennessee. These cases do not remotely apply

to a situation resembling the instant case.25

The family’s interesting theory would require the sale to proceed regardless ofthe correctness ofthe attachment or the validity ofthe

sale. Courts would not have the ability to alter

their rulings in the event of a change in

circumstances. The situation, however, did

change once the United States made a partial

VTVPA payment to the Hegnas. 

Because the family members already

applied for a payment from the government,

they should not argue with the government’s

attempts to hold them to the terms of the

payment. Receipt of the partial payment

forced themto relinquish “allrightsto execute

against or attach property that is at issue in

claims . . . before an international tribunal[.]”

VTVPA § 2002(a)(2)(D) (emphasis added). 

Assuming, arguendo, that the Hegnas’

argument has some validity and that the “right

. . . to execute” now lies strictly with the district court, the court certainly possesses the

ability to revisit its ruling. A court may “relieve a party or a party’s legal representative

from a final judgment, order, or proceeding”

for a variety of reasons, including the open20 The Hegnas contend that, “[s]ince the date of

actual sale relates back to the levy date, the date of

sale of the Lubbock Property is July 2, 200[3].”

21 The Hegnas cite the general rule that “[t]he

procedure on execution . . . shall be in accordance

with the practice and procedure of the state in

which the district court is held, existing at the time

the remedy is sought, except that any statute of the

United States governs to the extent that it is

applicable.” FED. R. CIV. P. 69(a).

22 The Hegnas assert that the train toward judicial sale had proceeded past the point of no return:

“[W]hen the U.S. Marshal levied on the Lubbock

Property[,] the procedure for taking the property

into the custody of the District Court was complete

. . . . All that remained to be done was the judicial

sale, and V[TV]PA’s relinquishment provisions

have no application to post-levy sales.”

Additionally, the Hegnas suppose that they

should have the right to pursue sale to satisfy the

full value of their judgment against Iran. As shown

in part III.A., supra, however, even a partial

payment triggersthe VTVPA’s full relinquishment

provisions.

23 Wilkinson v. Goree, 18 F.2d 455, 456-57

(5th Cir. 1927).

24 Freeman v. Dawson, 110 U.S. 264, 270

(1884).

25 Wilkinson relied on the workings of the former Bankruptcy Act and had no connection to enforcing judgments in Texas. Freeman has a similarly non-existent connection. 
8

ended “any . . . reason justifying relieffromthe

operation of the judgment.” FED. R. CIV. P.

60(b). See also FED. R. CIV. P. 59(e)

(describing the period of time in which a party

must file a motion to alter or amend a

judgment).26

The Hegnas’ theory places form above

common sense and above the district court’s

ability to re-evaluate itsruling before the property is sold. Thus, we turn to whether the

Lubbock property fits within the “at issue”

language of § 2002(a)(2)(D). 

C.

Because the Lubbock property was “at issue” in a claimbefore an international tribunal,

amended VTVPA § 2002(d)(5)(B) prevents

the Hegnas from executing on the property.

The United States asserts that the Lubbock

property is at issue in the Iran-United States

Claims Tribunal (“Claims Tribunal”). In

support, the government offers a declaration

from Mark Clodfelter, who lists himself as the

“Assistant Legal Adviser for, and director of

the office of, International Claims and

Investment Disputes in the Office of the Legal

Adviser of the Department of State.”

The Hegnasrespond by contending (1) that

the property cannot be “at issue” until after a

court determinesitsjurisdiction over the property; and (2) that the Claims Tribunal does not

have proper jurisdiction over the property.

27

In support of their argument, the Hegnas offer

a definition from a 1979 edition of BLACK’S

LAWDICTIONARY and citationsto two Florida

state court opinions. “At issue,” however, includes a broader swath of conflict than the

Hegnas assert. The most recentBLACK’SLAW

DICTIONARY (8th ed. 2004) defines “at issue”

as “[t]aking opposite sides; under dispute; in

question.” Although the United States has

contested the jurisdiction of the Iran-United

States Claims Tribunal over the properties,

both matters currently pend before that very

body. Even if the government ultimately prevails, the Lubbock propertywillhave remained

“at issue” before the tribunal during the instant

appeal.28 

The only question with respect to the “at

issue” analysis concerns the evidence that the

government has offered. The aforementioned

declaration from Clodfelter vaguely but

coherentlystates hisfamiliaritywiththeClaims

Tribunal and that the Lubbock property falls

within a list of properties “specifically

identified as the subject of the Tribunal case.”

ThoughClodfelter’s declaration could have

included more specific information or

26 After the district court granted the motion to

void the sale, the Hegnas filed a FED. R. CIV. P.

59(e) motion.

27 In a related matter, the United States has asserted that consular property should fall under the

Vienna Convention on Consular Relations and

(continued...)

27(...continued)

should not be subject to the Claims Tribunal.

28 TheClaims Tribunal has existed since July 1,

1981, and, as of December 31, 2003, has finalized

approximately 3,935 claims. Iran-United States

Claims Tribunal Background Information,

available at http://www.iusct.org/background-english.html (accessed June 18, 2004); Iran-United

States Claims Tribunal Quarterly Communique of

Jan. 20, 2004, http://www.iusct.org-

/communique-english.pdf (accessed June 18,

2004). It apparently has not, however, addressed

the Lubbock property.
9

documentary support,29 the Hegnas did not

deny the substance of the declaration in their

response, so they are foreclosed from

requesting a hearing to offer additional

evidence. 

Consequently, the Hegna family’s

acceptance of partial payment triggered the

relinquishing provisions of the VTVPA.

Because the acceptance required the family to

relinquish all rights to attach and execute the

judgment, the Hegnas, through the court,

cannot sell the property. Finally, because the

Lubbock property currently stands at issue

before an international tribunal, VTVPA §

2002(a)(2)(D) and (c)(5)(B) prevent the

Hegnas from attaching or executing any

further judgments against that property.

IV.

The government argues that the VTVPA

payment bars the attachment and sale of the

Houston property in the same manner as for

the Lubbock property. In considering the

Houston property, however, the magistrate

judge expressly avoided the issues discussed in

the analysis of the Lubbock property.30

Before we may consider whether the

VTVPA blocks collection against the Houston

property, we must determine whether the

TRIA would allow the Hegnasto attach or execute against the property in the first place. In

essence, we must make the same inquiry as did

the magistrate judge. Although we may affirm

for any reason the record supports,31 we

choose to follow the magistrate judge’s

analysis. 

TRIA § 201(a) empowers an individual

who secures a judgment pursuant to 28 U.S.C.

§ 1605(a)(7) to attach and execute against

“blocked assets. . . to satisfy such judgment to

the extent of any compensatory damages.”

Section 201(d)(2) defines “blocked asset” in

such a way that it includes the Houston

property.

32 Section 201(d)(2)(B)(ii), however,

exempts otherwise-attachable property from

the “blocked asset” category. To fall within

the exemption, the property must satisfy two

criteria. 

First, the property must be “subject to the

Vienna Convention on . . . Consular

Relations[.]” TRIA § 201(d)(2)(B)(ii).

29 We wonder why the United States could not

have offered some documentation to support Clodfelter’s declaration. Presumably, some formal document exists to report the proceedings of the

Claims Tribunal. When a family’s ability to

satisfy a legitimate judgment depends on the status

of a piece of property, and when that status

requires evidence to make a determination, it is

preferable for the government to include more than

a declaration from one of its own employees.

30 “Having determined that Plaintiffs may not

execute against the [Houston] property, the court

need not reach the issue of whether Plaintiffs have

relinquished their right to execute on the judgment

(continued...)

30(...continued)

based on their acceptance of payment under the

VTVPA on July 30, 2003.”

31 LLEH, Inc. v. Wichita County, Tex., 289

F.3d 358, 364 (5th Cir. 2002).

32 “The term‘blocked asset’ means– (A) any asset seized or frozen by the United States under

section 5(b) of the Trading With the Enemy Act

(50 U.S.C. App. 5(b)) or under sections 202 and

203 of the International Emergency Economic

Powers Act (50 U.S.C. 1701; 1702)[.]” The President froze Iranian property pursuant to the International Emergency Economic Powers Act. See

supra note 8.
10

Secondly, the property must be “used

exclusively for diplomatic or consular

purposes.” Id. Because we answer both

queries in the affirmative, the Houston

property does not qualify as a “blocked asset”

for purposes of TRIA § 201(a). 

A.

As to the first matter, a consul’s residence

falls within the sweep of the Vienna

Convention onConsular Relations(“VCCR”),

April 24, 1963, 21 U.S.T. 77, 596 U.N.T.S.

8638. The signatories to the VCCR pledge

that, if one country severs consular relations

with another, the severing countries will “respect and protect the consular premises,

together with the property ofthe consular post

and the consular archives” of one another.

VCCR, art. 27(1)(a). 

The definition of “consular post” includes

“anyconsulate-general, consulate, vice-consulate or consular agency.” VCCR, art. 1(1)(a).

A consulate typically includes a consul’s

residence, and no language in the treaty

deviates from this norm. BLACK’S LAW

DICTIONARY (8th ed. 2004) (defining

“consulate” as “the location of a consul’s

office or residence”).

Additionally, the United States has

interpreted the VCCR so as to include the

Houston property. Not surprisingly, this court

has not heretofore considered the VCCR.33 

We note that the federal courts have long

been loathe [sic] to involve themselves in

matters of foreign policy, preferring to

leave such issues to the Executive Branch.

Therefore, we have always given

substantial weight to the interpretation of a

treaty by the government agency charged

with interpreting it.

More v. Intelcom Support Servs., Inc., 960

F.2d 466, 472 (5th Cir. 1992). 

The United States, in its brief, “interprets

the reference to ‘property ofthe consular post’

in Article 27(1)(a) to include real property

such asthe ConsulGeneral’sresidence at issue

here.” Although the government certainly

could craft a self-serving or opportunistic interpretation, the Hegnas have offered no evidence to suggest such a motivation and have

not given a citation to a case or to a

compelling opposing argument. 

Consequently, the language of the VCCR

and the government’sreasonable interpreation

of that language lead us to conclude that, under the VCCR, the United States has an

obligation to “respect and protect” property

that served as the residence of the Iranian

General Consul. The Houston property is

within the ambit of the VCCR.34 

B.

Although the government has rented the

Houston property to private parties and has

used some of those rental proceeds to satisfy

domestically-created obligations, it has used

33 The courts that have considered it largely

have done so in the context of criminal trials.

34 The Hegnas also have asserted that the

VCCR does not apply, because TRIA applies

“Notwithstanding any other provision of law[.]”

TRIA § 201(a). The VCCR, however, does not

conflict with the TRIA. Instead, TRIA (1) gives

parties who have secured judgments against terroriststates a new opportunity to satisfy their judgment; but also (2) attempts to insulate properties

subject to international agreementsSSlike the

VCCRSSfrom liquidation procedures.
11

the consular residence “exclusively for

diplomatic or consular purposes.” The Hegnas

emphasize the fact of the rental and argue that

the government has used the proceeds for a

nondiplomatic purpose. The magistrate judge

described the two uses of the proceeds

generated from renting the former consulate

home: 

The funds received from the rentals have

been deposited into segregated accounts,

with the funds necessary for repairs and

maintenance placed in a specialIranianconsular account and the excess funds deposited into separate “blocked asset”

accounts. Funds in the blocked asset

accounts have recently been utilized to

compensate victims of terrorism under the

VTVPA.

Congress has directed the United States to

provide some of its rental proceeds to victims

of terrorism. As part of its payment-and-relinquishment regime, the VTVPA designates

“rental proceeds accrued on the date of the enactment of this Act from Iranian diplomatic

and consular property located in the United

States” as a primary source of funding.

VTVPA § 2002(b)(2)(A). 

The mixed uses of the funds and the fact

that some funds have gone to satisfy a domestically-crafted payment regime require us to

consider whether the United States has used

the Houston property “exclusively” for

diplomatic and consular purposes. Two

factors ultimately weigh in favor of an

affirmative answer. 

First, purpose differs from effect or result.

The United States may rent the property for

the purpose of using the funds to maintain and

preserve the property pursuant to the VCCR.

The rental, however, may generate additional

revenue that, at Congressional direction, the

United States may allocate for other purposes.

The Hegnas have not shown evidence

regarding the government’sintent. Given such

a lack of evidence and the government’s

obligation to “respect and protect” the

property pursuant to the VCCR, we are

reluctant to impute nondiplomatic motivations

to the government’s renting of the Houston

property. 

Secondly, theHegnasread “diplomatic purpose” too narrowly. Although the United

States allocates funds to satisfy VTVPA judgments, and although the payment regime arisesfroma domestic payment arrangement,35 the

issues certainly concern diplomatic matters. 

The United States purportedlyhas attempted to fulfil the obligations of the VCCR. By

not selling the Houston property and by using

rental proceeds to carry out routine

maintenance, the government “respect[s] and

protect[s]” the property presumably for the

time when the two countries might resume

35 The entire exchange between Congress and

the Executive nicely illustrates the tensions that

may develop between governmental actors with different institutional roles. Congress, through

AEDPA andTRIA, has attempted to providegreater opportunities for victims of terrorism to collect

on judgments against the states that sponsor and

support such actions. By exempting properties

subject to international tribunals and treaties such

as the VCCR, VTVPA andTRIA acknowledge the

Executive’s general power to administer diplomatic

affairs. U.S.CONST. art. II, § 2(2). The Executive

has taken full advantage of the congressional

exception. 
12

diplomatic and consular relations.36 

The Executive Branch has simultaneously

attempted to compensate parties harmed as a

result of Iran’s support of terrorism and to administer consular property in accord with the

VCCR. By maintaining the property, the

United States has used the former General

Consul’s residence within the terms of the

TRIA exclusion. Consequently, the district

court did not err in its determination that the

Houston property fell outside the definition of

a “blocked asset” and did not err in its grant of

the United States’ motion. 

V.

Consequently, the district courts did not err

by quashing the writs of attachment and

execution. By applying for a payment under

the VTVPA, the Hegnas agreed, on receipt of

a partial payment, to relinquish the right to

execute against Iranian property “at issue”

before bodies such as the Iran-United States

Claims Tribunal. The Lubbock property fits

that description. Additionally, although

Congress gave families of terror victims

greater rights to satisfy their judgments, it

expressly exempted consular property such as

that located in Houston. 

Based on the regime that Congress has enacted and that the Executive hasimplemented,

the Hegnas cannot satisfy their otherwise

proper and valid judgment and cannot collect

against the property involved in this case. If

some injustice exists, those two bodies have

the responsibility to correct it. 

The judgments at issue are AFFIRMED.

36 If, in accordance with the Hegnas’ theory,

the United States risks exposing consular property

to attachment and sale whenever it uses any rental

proceeds to pay a judgment pursuant to the

VTVPA, it may merely choose not to use any

rental proceeds to satisfy any judgments against

terrorist states. The government would still use the

property for a diplomatic or consular purpose, but

familiesseeking recovery under theVTVPA would

have fewer sources of proceeds with which to

satisfy their judgments.