Opinion ID: 2832195
Heading Depth: 1
Heading Rank: 4

Heading: The Priority of the Competing Claims

Text: We come at last to the merits of the dispute. The Gates plaintiffs registered their judgment and served a citation to Nos. 14-3327 and 14-3344 21 discover assets on December 8, 2011. Under Illinois law, that gave the Gates plaintiffs a perfected lien on the assets as of that date. See Gates, 755 F.3d at 578, citing 735 Ill. Comp. Stat. 5/2-1402(m). If the Gates plaintiffs’ judgment, attachment, and execution are valid, then they plainly have priority over the Wyatt plaintiffs, who did not register a judgment and serve a citation to discover assets until nearly three years later. The Wyatt plaintiffs claim that the Gates plaintiffs are not entitled to the Syrian assets identified in the Northern District of Illinois because the Gates plaintiffs failed to comply with § 1608(e) of the FSIA. That provision requires that a foreign state be served with any default judgment entered against it: “A copy of any such default judgment shall be sent to the foreign state or political subdivision in the manner prescribed for service in this section.” 28 U.S.C. § 1608(e). For the purposes of our discussion of this argument, we assume that the Wyatt plaintiffs are correct in asserting that the Gates plaintiffs have not complied with the service requirements of § 1608(e).5 5 The Gates plaintiffs had the clerk of court send a copy of the default judgment to Syria via a private courier service, but the delivery was rejected in Syria. Section 1608(a)(2) requires that documents that are served by mail be sent “requiring a signed receipt,” which the Gates plaintiffs admit they never obtained. The Gates plaintiffs claim that they satisfied § 1608(e) even though they never received a signed receipt. Most courts have interpreted § 1608 to require strict compliance with the specific rules for service on foreign states. E.g., Magness v. Russian Federation, 247 F.3d 609, 615 (5th Cir. 2001) (“We conclude that the provisions for service of process upon a foreign state or political subdivision of a foreign state outlined in section 1608(a) can only be satisfied by strict compliance.”); but see Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 22 Nos. 14-3327 and 14-3344 The Wyatt plaintiffs’ argument fails to deal with the structure and terms of the FSIA, and in particular with its special provisions for claims for state-sponsored terrorism. The statutory consequence of failing to satisfy the service requirement in § 1608(e) is that plaintiffs with a judgment against a foreign state cannot obtain authorization under § 1610(c) to proceed to attachment and execution of that judgment. Section 1610(c) provides: No attachment or execution referred to in sub- sections (a) and (b) of this section shall be per- mitted until the court has ordered such at- tachment and execution after having deter- mined that a reasonable period of time has elapsed following the entry of judgment and the giving of any notice required under section 1608(e) of this chapter. 28 U.S.C. § 1610(c). Subsections (a) and (b) list categories of assets of foreign states, and of their agencies and instrumentalities, that can be attached in aid of execution of a judgment obtained through a suit authorized by the FSIA. Accordingly, a plaintiff who does not serve a copy of the default judgment to satisfy § 1608(e) is not entitled to authorization to execute the judgment under § 1610(c). 1129 (9th Cir. 2010) (“The Ninth Circuit has adopted a substantial compliance test for the FSIA’s notice requirements and … the defendant had actual notice.”). We do not decide what § 1608(e) requires, nor whether the Gates plaintiffs have satisfied those requirements, because the Gates plaintiffs were entitled to execute their judgment against the Syrian assets without complying with § 1608(e). Nos. 14-3327 and 14-3344 23 The critical point here, however, is that the Gates plaintiffs are not executing their judgment under § 1610(c) or under § 1610(a) or (b), the provisions cross-referenced in § 1610(c). The Gates plaintiffs obtained § 1610(c) authorization from the district court in the District of Columbia, which the Wyatt plaintiffs claim was an error. That order was unnecessary. The Gates plaintiffs are seeking to execute a judgment for state-sponsored terrorism, so they may proceed through the execution provision specifically enacted for terrorism judgments, § 1610(g). As we held in Gates, “§ 1610(c) simply does not apply to the attachment of assets to execute judgments under § 1610(g) for state-sponsored terrorism.” 755 F.3d at 575. We reached that conclusion based on the structure and language of the FSIA and its legislative history. We also found that conclusion was consistent with the legislative purpose behind the 2008 FSIA Amendments that added § 1610(g) to the statute. The purpose of those amendments was “to make it easier for terrorism victims to obtain judgments and to attach assets.” Id. at 576. “Exempting attachments under § 1610(g), that is, attachments stemming from terrorismrelated judgments, from § 1610(c)’s solicitous notice requirements is entirely consistent with the liberalizing purpose of the 2008 Amendments.” Id. at 576–77. The service of default judgments under § 1608(e) is one of § 1610(c)’s solicitous notice requirements, from which attachments under § 1610(g) are exempt. The Gates plaintiffs, as terrorism victims who obtained a judgment under § 1605A, could proceed to attachment and execution under § 1610(g) without complying with § 1610(c). That means they are also exempt from § 1608(e), at least as a prerequisite for 24 Nos. 14-3327 and 14-3344 attachment and execution. A failure to comply with § 1608(e) does not render invalid their attachment of assets and satisfaction of their judgment for state-sponsored terrorism. The Gates plaintiffs were therefore entitled to priority, so we affirm the district court’s orders challenged in these appeals disbursing funds to the Gates plaintiffs and dismissing the Wyatt plaintiffs’ challenges to them. We affirm without needing to address several alternative arguments for affirmance, including whether these appeals amount to improper collateral challenges to the District of Columbia court’s issuance of a § 1610(c) order to the Gates plaintiffs, whether the mandate rule foreclosed the Wyatt plaintiffs’ efforts after Gates, and whether the Wyatt plaintiffs waived their challenges by not pursuing their unsuccessful effort to intervene in the Gates case in the District of Columbia years before judgment was entered. The orders of the district court are AFFIRMED.