Source: http://openjurist.org/346/f3d/264/smith-smith-smith-v-federal-reserve-bank-of-new-york-w
Timestamp: 2013-12-09 01:38:32
Document Index: 506980654

Matched Legal Cases: ['§ 2333', '§ 1330', '§ 1608', '§ 1608', '§ 201', '§ 1701', '§ 1503', '§ 201']

346 F3d 264 Smith Smith Smith v. Federal Reserve Bank of New York W | OpenJurist
346 F. 3d 264 - Smith Smith Smith v. Federal Reserve Bank of New York W	Home346 f3d 264 smith smith smith v. federal reserve bank of new york w
346 F3d 264 Smith Smith Smith v. Federal Reserve Bank of New York W 346 F.3d 264
Raymond Anthony SMITH, as Administrator of the Estate of George SMITH, deceased, and on behalf of the SMITH solatium claimants, and Katherine Soulas, in her own right, on behalf of her minor children, as Executrix of the Estate of Timothy Soulas, deceased, and on behalf of the Soulas solatium claimants, Plaintiff-Appellants,v.FEDERAL RESERVE BANK OF NEW YORK, and The Honorable John W. Snow, Secretary of the Treasury, Defendant-Appellees.
Docket No. 03-6195.
James E. Beasley, the Beasley Firm, Philadelphia, PA, for Plaintiff-Appellants.
Shannen W. Coffin, Deputy Assistant Attorney General, United States Department of Justice, Washington, DC (Peter D. Keisler, Assistant Attorney General, Gregory G. Katsas, Deputy Asst. Atty. Gen., Douglas N. Letter, H. Thomas Byron III, Lewis Yelin, of counsel, James B. Comey, United States Attorney, Beth E. Goldman, Asst. United States Atty., Southern District of New York, New York, NY, on the brief), for Defendant-Appellee John W. Snow.
Shari D. Leventhal, Federal Reserve Bank of New York, New York, N.Y. (Thomas C. Baxter, Jr., David L. Gross, of counsel, on the brief), for Defendant-Appellee Federal Reserve Bank of New York.
This litigation arises from the attacks upon the United States on September 11, 2001, and takes place in the context of ongoing American military and reconstruction activity in Iraq. It involves competing claims to the disposition of certain Iraqi assets held by the Federal Reserve Bank of New York. On the one hand, Plaintiffs, who are relatives of victims who perished in the World Trade Center catastrophe, seek a declaration that they are entitled to execute against those assets to satisfy a judgment they hold. On the other hand, Defendants contend that those assets should return to Iraq, where they are desperately needed for military and rebuilding efforts. In a very real sense, this case implicates questions of national security and foreign affairs, as well as immediate experiences of collective loss, fear, and grief.
As a Court, our task is limited to interpreting the statutes governing the disposition of those assets in a way that is faithful to Congressional meaning. Because we conclude that the plain language of the statutes that govern dictates that the funds Plaintiffs seek to attach are no longer available for that purpose, we affirm the judgment of the district court.
Plaintiff Raymond Anthony Smith is the half-brother of George Eric Smith and the executor of his brother's estate. George Smith, who worked in the World Trade Center's South Tower, was killed in the September 11 terrorist attack that caused the collapse of both Trade Center Towers. Plaintiff Katherine Soulas is the wife of Timothy Soulas and executrix of his estate. Mr. Soulas, who worked in the North Tower, also died in the September 11 attacks.
Raymond Smith brought an action in the United States District Court for the Southern District of New York (Baer, J.) on behalf of the estate on November 14, 2001, pursuant to 18 U.S.C. § 2333(a), which authorizes suits to remedy injuries resulting from international terrorism. Smith named the Islamic Emirate of Afghanistan, the Taliban, al Qaeda, and Osama bin Laden as defendants. Katherine Soulas brought a similar action in the Southern District of New York, both individually and on behalf of the estate and her minor children, against the same defendants on November 15, 2001. The district court consolidated the two cases by Order dated January 23, 2002. On June 10, 2002, Smith and Soulas ("Plaintiffs") amended their Complaint to add Saddam Hussein and the Republic of Iraq as defendants pursuant to the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602-1611 (2003).
None of the defendants appeared. The district court entered a default judgment against all defendants and held an inquest to address various issues, including damages, on February 28, 2003. See Smith v. Islamic Emirate of Afghanistan, 262 F.Supp.2d 217, 220 (S.D.N.Y.2003) ("Smith I"). In a detailed opinion dated May 16, 2003 (as amended), the district court noted, with respect to sovereign defendants such as Iraq and Hussein, that some quantum of proof as to liability was required to award damages in the event of a default. See id. at 222 (citing 28 U.S.C. § 1608(e)). The district court then analyzed the decisions of this Court and of the courts in our sister circuits and concluded that the quantum of proof required to sustain damages against a defaulting sovereign is identical to that required to withstand a motion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50: whether sufficient evidence is proffered that a reasonable jury could render a verdict in favor of plaintiff. Id. at 223-24 (citing Ungar v. Islamic Republic of Iran, 211 F.Supp.2d 91, 98 (D.D.C.2002)). Amidst the debate about whether Iraq was involved in the September 11 attacks, the district court reviewed Plaintiffs' proffered evidence, which largely consisted of the expert testimony of Robert James Woolsey, Jr., the former Director of the Central Intelligence Agency, and of Dr. Laurie Mylroie, an expert on Iraq, and concluded that "plaintiffs have shown, albeit barely, `by evidence satisfactory to the court' that Iraq provided material support to bin Laden and al Qaeda." Smith I, 262 F.Supp.2d at 232 (quoting 28 U.S.C. § 1608(e)). The court went on to award Plaintiffs total damages of approximately $104 million, with Iraq deemed responsible for approximately $63.5 million of the total. Id. at 240-41. Final judgment was entered on July 14, 2003. The judgment is not at issue in this appeal, and we assume its validity for the present purposes.
Plaintiffs brought the present declaratory judgment action against defendants Federal Reserve Bank of New York and the Honorable John W. Snow, Secretary of the Treasury ("Defendants") in July 2003, seeking to satisfy their judgment against the Republic of Iraq by attaching certain Iraqi assets that are held by the Federal Reserve Bank of New York (the "Assets"). Plaintiffs sought this relief pursuant to the authority of section 201 of the Terrorism Risk Insurance Act, Pub. L. No. 107-297, 116 Stat. 2322 (Nov. 26, 2002) ("TRIA"), which states that "in 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 ... in order to satisfy such judgment." TRIA § 201, 116 Stat. at 2337.
Defendants opposed the attachment, moving for summary judgment on two grounds. First, they noted that President George W. Bush, acting pursuant to the authority granted him by the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-1707 (as amended) (2003) ("IEEPA"), had issued an Executive Order confiscating all frozen Iraqi assets held by the government and vesting title to those assets in the United States Department of the Treasury. See Exec. Order No. 13,290, 68 Fed. Reg. 14,307 (Mar. 20, 2003) (the "March 20th Order"). Therefore, Defendants argued, the funds at issue were no longer "blocked funds" for purposes of TRIA when Plaintiffs' judgment was entered. Defendants further pointed out that section 1503 of the Emergency Wartime Supplemental Appropriations Act of 2003, Pub. L. No. 108-11, 117 Stat. 559 (Apr. 16, 2003) ("EWSAA"), gave the President the authority to "make inapplicable with respect to Iraq" any law "that applies to countries that have supported terrorism." EWSAA § 1503, 117 Stat. at 579. Defendants argued that the President had exercised this authority and made TRIA inapplicable to Iraq, thereby undermining Plaintiffs' right to execute against the funds. See Presidential Determination No. 2003-23, 68 Fed. Reg. 26,259 (May 7, 2003); see also Message to the Congress Reporting the Declaration of a National Emergency with Respect to the Development Fund for Iraq, 39 Weekly Comp. Pres. Doc. No. 21, at 647-48, 2003 WL 13973315 (May 26, 2003) (specifically referencing TRIA § 201 as among the laws made inapplicable by the May 7 Executive Order).
In a thorough opinion, the district court accepted both of Defendants' arguments and granted summary judgment in Defendants' favor. <