Source: https://www.law.cornell.edu/supremecourt/text/16-534
Timestamp: 2018-09-21 11:51:22
Document Index: 603801743

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RUBIN v. ISLAMIC REPUBLIC OF IRAN | US Law | LII / Legal Information Institute
RUBIN v. ISLAMIC REPUBLIC OF IRAN ( )
(a) Congress enacted the FSIA in an effort to codify the careful balance between respecting the immunity historically afforded to foreign sovereigns and holding them accountable, in certain circumstances, for their actions. As a default, foreign states have immunity “from the jurisdiction of the courts of the United States and of the States,” §1604, but there are express exceptions, including the one at issue here, for state sponsors of terrorism, see §1605A(a). The FSIA similarly provides as a default that “the property in the United States of a foreign state shall be immune from attachment arrest and execution.” §1609. But §1610 outlines certain exceptions to this immunity. For example, §1610(a)(7) provides that property in the United States of a foreign state that is used for a commercial activity in the United States shall not be immune from attachment and execution where the plaintiff holds a §1605A judgment against the foreign state. Before 2008, the FSIA did not expressly address under which circumstances a foreign state’s agencies or instrumentalities could be held liable for judgments against the state. The Court had addressed that question in First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 628 (Bancec), and held that, as a default, agencies and instrumentalities of a foreign state are separate legal entities that cannot be held liable. It recognized the availability of exceptions, however, and left the lower courts to determine whether an exception applied on a case-by-case basis. The lower courts coalesced around five relevant factors (the Bancec factors) to assist in those determinations. In 2008, Congress amended the FSIA, adding §1610(g). Subparagraphs (A) through (E) incorporate almost verbatim the Bancec factors, leaving no dispute that, at a minimum, §1610(g) serves to abrogate Bancec where a §1605A judgment holder seeks to satisfy a judgment held against the foreign state. The question here is whether, in addition to abrogating Bancec, it provides a freestanding exception to property immunity in the context of a §1605A judgment. Pp. 4–8.
(b) The most natural reading of §1610(g)(1)’s phrase “as provided in this section” is that it refers to §1610 as a whole, so that §1610(g)(1) will apply to property that is exempted from the grant of immunity as provided elsewhere in §1610. Those §1610 provisions that do unambiguously revoke the immunity of a foreign state’s property employ phrases such as “shall not be immune,” see §1610(a)(7), and “[n]otwithstanding any other provision of law,” see §1610(f)(1)(A). Such textual markers are conspicuously absent from §1610(g). Thus, its phrase “as provided in this section” is best read to signal only that a judgment holder seeking to take advantage of §1610(g)(1) must identify a basis under one of §1610’s express immunity-abrogating provisions to attach and execute against a relevant property. This reading provides relief to judgment holders who previously would not have been able to attach and execute against property of an agency or instrumentality of a foreign state in light of Bancec. It is also consistent with the basic interpretive canon to construe a statute so as to give effect to all of its provisions, see Corley v. United States, 556 U. S. 303, 314, and with the historical practice of rescinding attachment and execution immunity primarily in the context of a foreign state’s commercial acts, see Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 487–488. Pp. 8–11.
On September 4, 1997, Hamas carried out three suicide bombings on a crowded pedestrian mall in Jerusalem, resulting in the deaths of 5 people and injuring nearly 200 others. Petitioners are United States citizens who were either wounded in the attack or are the close relatives of those who were injured. In an attempt to recover for their harm, petitioners sued Iran in the District Court for the District of Columbia, alleging that Iran was responsible for the bombing because it provided material support and training to Hamas. At the time of that action, Iran was subject to the jurisdiction of the federal courts pursuant to 28 U. S. C. §1605(a)(7) (1994 ed., Supp. II), which rescinded the immunity of foreign states designated as state sponsors of terrorism with respect to claims arising out of acts of terrorism. Iran did not appear in the action, and the District Court entered a default judgment in favor of petitioners in the amount of $71.5 million. 1
When Iran did not pay the judgment, petitioners brought this action in the District Court for the Northern District of Illinois to attach and execute against certain Iranian assets located in the United States in satisfaction of their judgment. Those assets—a collection of approximately 30,000 clay tablets and fragments containing ancient writings, known as the Persepolis Collection—are in the possession of the University of Chicago, housed at its Oriental Institute. University archeologists recovered the artifacts during an excavation of the old city of Persepolis in the 1930’s. In 1937, Iran loaned the collection to the Oriental Institute for research, translation, and cataloging. 2
Petitioners maintained in the District Court, inter alia, that §1610(g) of the FSIA renders the Persepolis Collection subject to attachment and execution. The District Court concluded otherwise and held that §1610(g) does not deprive the Persepolis Collection of the immunity typically afforded the property of a foreign sovereign. The Court of Appeals for the Seventh Circuit affirmed. 830 F. 3d 470 (2016). As relevant, the Seventh Circuit held that the text of §1610(g) demonstrates that the provision serves to identify the property of a foreign state or its agencies or instrumentalities that are subject to attachment and execution, but it does not in itself divest that property of immunity. The Court granted certiorari to resolve a split among the Courts of Appeals regarding the effect of §1610(g). 3 582 U. S. ___ (2017). We agree with the conclusion of the Seventh Circuit, and therefore affirm.
In 1976, Congress enacted the FSIA in an effort to codify this careful balance between respecting the immunity historically afforded to foreign sovereigns and holding them accountable, in certain circumstances, for their actions. 90Stat. 2891, as amended, 28 U. S. C. §1602 et seq. “For the most part, the Act” tracks “the restrictive theory of sovereign immunity.” Verlinden, 461 U. S., at 488. As a default, foreign states enjoy immunity “from the jurisdiction of the courts of the United States and of the States.” §1604. But this immunity is subject to certain express exceptions. For example, in line with the restrictive theory, a foreign sovereign will be stripped of jurisdictional immunity when a claim is based upon commercial activity it carried out in the United States. See, e.g., §1605(a)(2). The FSIA also provides that a foreign state will be subject to suit when it is designated as a state sponsor of terrorism and damages are sought as a result of acts of terrorism. See §1605A(a).
In 2008, Congress amended the FSIA and added §1610(g). See NDAA §1083(b)(3)(D), 122Stat. 341–342. Section 1610(g)(1) provides:
We turn first to the text of the statute. Section 1610(g)(1) provides that certain property will be “subject to attachment in aid of execution, and execution, upon [a §1605A] judgment as provided in this section.” (Emphasis added.) The most natural reading is that “this section” refers to §1610 as a whole, so that §1610(g)(1) will govern the attachment and execution of property that is exempted from the grant of immunity as provided elsewhere in §1610. Cf. Reno v. American-Arab Anti-Discrimination Comm., 525 U. S. 471, 487 (1999) (noting that the phrase “[e]xcept as provided in this section” in one subsection serves to incorporate “the rest of” the section in which the subsection appears).
Other provisions of §1610 unambiguously revoke the immunity of property of a foreign state, including specifically where a plaintiff holds a judgment under §1605A, provided certain express conditions are satisfied. For example, subsection (a) provides that “property in the United States . . . used for a commercial activity in the United States . . . shall not be immune” from attachment and execution in seven enumerated circumstances, including when “the judgment relates to a claim for which the foreign state is not immune under section 1605A . . . .” §1610(a)(7). Subsections (b), (d), and (e) similarly set out circumstances in which certain property of a foreign state “shall not be immune.” 4 And two other provisions within §1610 specifically allow §1605A judgment holders to attach and execute against property of a foreign state, “[n]otwithstanding any other provision of law,” including those provisions otherwise granting immunity, but only with respect to assets associated with certain regulated and prohibited financial transactions. See §1610(f )(1)(A); Terrorism Risk Insurance Act of 2002 (TRIA), §201(a), 116Stat. 2337, note following 28 U. S. C. §1610.
Moreover, our reading of §1610(g)(1) is consistent “with one of the most basic interpretive canons, that [a] statute should be construed so that effect is given to all its provisions, so that no part will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U. S. 303, 314 (2009) (internal quotation marks omitted). Section 1610 expressly references §1605A judgments in its immunity-abrogating provisions, such as 28 U. S. C. §§1610(a)(7), (b)(3), (f )(1), and §201 of the TRIA, showing that those provisions extend to §1605A judgment holders’ ability to attach and execute against property. If the Court were to conclude that §1610(g) establishes a basis for the withdrawal of property immunity any time a plaintiff holds a judgment under §1605A, each of those provisions would be rendered superfluous because a judgment holder could always turn to §1610(g), regardless of whether the conditions of any other provision were met. 5
This focus of the FSIA is reflected within §1610, as subsections (a), (b), and (d) all outline exceptions to immunityof property when that property is used for commercial activity. The Court’s reading of §1610(g) means that individuals with §1605A judgments against a foreign state must primarily invoke other provisions revoking the grant of immunity for property related to commercial activity, including §1610(a)(7), unless the property is expressly carved out in an exception that applies “[n]otwithstanding any other provision of law,” §1610(f )(1)(A); §201(a) of the TRIA. That result is consistent with the history and structure of the FSIA.
Petitioners first assert that “this section” might refer to procedures contained in §1610(f ). Section 1610(f ) permits §1605A judgment holders to attach and execute against property associated with certain regulated and prohibited financial transactions, §1610(f )(1), and it provides that the United States Secretary of State and Secretary of the Treasury will make every effort to assist in “identifying, locating, and executing against the property of [a] foreign state or any agency or instrumentality of such state,” §1610(f )(2). Petitioners point out that paragraph (1) of subsection (f ) has never come into effect because it was immediately waived by the President after it was enacted, pursuant to §1610(f )(3). 6 So, the argument goes, it would make sense that Congress created §1610(g) as an alternative mechanism to achieve a similar result. 7
This is a strained and unnatural reading of the phrase “as provided in this section.” In enacting §201(a) of the TRIA, which, similar to 28 U. S. C. §1610(f ), permits attachment and execution against blocked assets, Congress signaled that it was rescinding immunity by permitting attachment and execution “[n]otwithstanding any other provision of law.” See §201(a) of the TRIA. Had Congress likewise intended §1610(g) to have such an effect, it knew how to say so. Cf. Bank Markazi v. Peterson, 578 U. S. ___, ___, n. 2 (2016) (slip op., at 4, n. 2) (noting that “[s]ection 1610(g) does not take precedence over ‘any other provision of law,’ as the TRIA does”).
Finally, petitioners assert that “this section” could possibly reflect a drafting error that was intended to actually refer to §1083 of the NDAA, the Public Law in which §1610(g) was enacted. This interpretation would require not only a stark deviation from the plain text of §1610(g), but also a departure from the clear text of the NDAA. Section 1083(b)(3) of the NDAA provides that “Section 1610 of title 28, United States Code, is amended . . . by adding at the end” the new subsection “(g).” 122Stat. 341. The language “this section” within (g), then, clearly and expressly incorporates the NDAA’s reference to “Section 1610” as a whole. There is no basis to conclude that Congress’ failure to change “this section” in §1610(g) was the result of a mere drafting error.
1 Congress amended the FSIA in 2008 and replaced 28 U. S. C. §1605(a)(7) with a separate, more expansive provision addressing the foreign sovereign immunity of foreign states that are designated as state sponsors of terrorism, §1605A. See National Defense Authorization Act for Fiscal Year 2008 (NDAA), §1083(a), 122Stat. 338–341. Shortly thereafter, petitioners moved in the District Court for an order converting their judgment under §1605(a)(7) to one under the new provision, §1605A, which the District Court granted. See Rubin v. Islamic Republic of Iran, 563 F. Supp. 2d 38, 39, n. 3 (DC 2008).
5 To the extent petitioners suggest that those references to §1605A were inadvertent, see Brief for Petitioners 41–44, the statutory history further supports the conclusion that §1610(a)(7) applies to §1605A judgment holders, as the reference to §1605A was added to §1610(a)(7) in the same Act that created §§1605A and 1610(g). See NDAA §§1083(a), (b)(3), 122Stat. 338–342.