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

Heading: Legal, Factual, and Procedural Background

Text: A. Terrorism and the Foreign Sovereign Immunities Act The default rule of United States law is that foreign states are immune from suit and attachment of assets in United States courts, but the Foreign Sovereign Immunities Act (FSIA) provides a number of exceptions and special procedures for such cases. The FSIA is comprehensive, so all cases against foreign sovereigns must be fitted into its statutory framework. Republic of Argentina v. NML Capital, Ltd., 573 U.S. —, 134 S. Ct. 2250, 2255–56 (2014); Gates v. Syrian Arab Republic, 755 F.3d 568, 571 (7th Cir. 2014) (earlier appeal involving same Syrian assets at issues in these appeals). The FSIA now contains provisions specific to claims for state-sponsored terrorism. Section 1605A removes sovereign immunity in actions for money damages for personal injury or death resulting from an act of state-sponsored terrorism. 28 U.S.C. § 1605A. Once plaintiffs obtain a judgment under § 1605A, they may proceed to attach assets to execute that judgment under § 1610. Subsection § 1610(g) allows plaintiffs with a judgment against a state sponsor of terrorism to attach and execute the judgment against property of the for- 4 Nos. 14-3327 and 14-3344 eign state itself and any agency and instrumentality of the state. Other provisions of § 1610 establish the more general process for executing a judgment against a foreign state in suits other than those for state-sponsored terrorism, such as more ordinary contract or tort cases arising out of a foreign state’s commercial activities. Subsections 1610(a) and (b) describe the property of foreign states that is generally subject to attachment to satisfy a judgment. Subsection 1610(c) delays attachment and execution under § 1610(a) and (b) until a court determines that a reasonable period of time has elapsed following the entry of judgment. Subsection 1610(c) also requires compliance with § 1608(e), which directs a plaintiff who obtains a default judgment to serve the foreign state with a copy of the judgment in a specific manner. The interplay of these more general provisions and the special provisions for state-sponsored terrorism are at the center of the dispute between these two groups of victims. In Gates, we described the perhaps unintended consequences of this statutory scheme in previous appeals by a third group of victims seeking the same assets in dispute here: [T]he FSIA does not provide a mechanism for distributing equitably among different victims any Syrian assets in the United States that are subject to attachment. Instead, victims who fi- nally obtain judgments must then engage in the costly, burdensome, and often fruitless task of searching for available assets. These victims of terror can then find them- selves pitted in a cruel race against each oth- Nos. 14-3327 and 14-3344 5 er—a race to attach any available assets to sat- isfy the judgments. The terms of the race are essentially winner-take-all rather than any eq- uitable sharing among victims of similar losses. Under the FSIA’s compensation scheme, a ter- rorism judgment against Syria can be satisfied only at the expense of other terrorism victims. Gates, 755 F.3d at 571. B. The Gates Plaintiffs In both of these appeals, the appellees are the Gates plaintiffs. They are defending the district court’s decision to release confiscated Syrian funds to them to satisfy their judgment. The Gates plaintiffs are relatives of Olin Eugene “Jack” Armstrong and Jack L. Hensley. Hensley and Armstrong were kidnapped in September 2004 by al-Qaeda when the two men were working as contractors in Iraq for the U.S. military. They were gruesomely murdered, and the killings were captured on a video that was made public by al-Qaeda. The Gates plaintiffs sued Syria under the FSIA for sponsoring al-Qaeda’s terrorism. (Syria has been on the list of state sponsors of terrorism since the list was created in 1979.) On September 26, 2008, the Gates plaintiffs obtained a default judgment in the United States District Court for the District of Columbia for $413 million against Syria. A month later, on October 23, the court clerk sent a copy of the default judgment to the Syrian Foreign Ministry via a private delivery service, but the delivery was rejected and the delivery agent was told “the shipment is no longer required.” The 6 Nos. 14-3327 and 14-3344 next day, Syria filed a notice of appeal challenging the district court’s personal jurisdiction over Syria. While that appeal was pending, the Gates plaintiffs sought to take steps to execute their judgment against Syria. The Wyatt plaintiffs, who had filed their own suit against Syria, moved to intervene in the Gates case in the District of Columbia, asserting a prior claim on Syrian assets in the District of Columbia because they had filed their suit earlier. The district court stayed enforcement of the Gates judgment pending appeal and denied as moot the Wyatt motion to intervene. On May 20, 2011, the United States Court of Appeals for the District of Columbia Circuit found personal jurisdiction proper and affirmed the district court’s default judgment in favor of the Gates plaintiffs. Gates v. Syrian Arab Republic, 646 F.3d 1, 5 (D.C. Cir. 2011). The Gates plaintiffs then filed a motion in the District of Columbia district court for a § 1610(c) order authorizing them to enforce their judgment because a “reasonable time” had passed after entry of judgment and notice to Syria. 28 U.S.C. § 1610(c). The district court agreed that § 1610(c) had been satisfied and authorized the Gates plaintiffs to proceed to attachment and execution of the judgment. C. The Wyatt Plaintiffs In both of the current appeals, the appellants are the Wyatt plaintiffs. They are also victims of terrorism sponsored by Syria. They are the relatives of Ronald Wyatt and Marvin T. Wilson, two biblical archaeologists who were captured in Turkey in August 1991 by armed members of the Kurdistan Workers’ Party (PKK), a militant Kurdish organization. The Nos. 14-3327 and 14-3344 7 two men were held in captivity for 21 days under harsh conditions and in constant fear for their lives. The Wyatt plaintiffs sued the Syrian government for sponsoring PKK terrorism. Over a year after the District of Columbia Circuit affirmed the Gates judgment, the Wyatt plaintiffs obtained on December 17, 2012 a default judgment against Syria in the United States District Court for the District of Columbia for $338 million. The district court ordered the Wyatt plaintiffs to serve a copy of the default judgment on Syria pursuant to 28 U.S.C. § 1608(e). Syria appealed the judgment, and the Wyatt plaintiffs cross-appealed, arguing that service under 28 U.S.C. § 1608(e) was unnecessary because Syria had participated actively in the litigation and obviously knew of the default judgment. On January 30, 2014, the United States Court of Appeals for the District of Columbia Circuit affirmed the judgment against Syria and rejected the Wyatt plaintiffs’ cross-appeal, holding that § 1608(e) is a “clear and unambiguous statute” that required service of the default judgment. Wyatt v. Syrian Arab Republic, 554 Fed. App’x 16, 17 (D.C. Cir. 2014) (mem). To comply with 28 U.S.C. § 1608(e), the Wyatt plaintiffs then served a copy of the judgment on the Syrian government, which had already appealed the same judgment. The Wyatt plaintiffs then sought a § 1610(c) order from the District of Columbia district court to authorize them to enforce their judgment because a “reasonable time” had passed. On May 19, 2014, that court ruled that the Wyatt plaintiffs had complied with § 1610(c) and authorized them to proceed to attachment and execution of the judgment. 8 Nos. 14-3327 and 14-3344 D. The Northern District of Illinois Litigation In the meantime, however, while the Wyatt plaintiffs had still been seeking a final judgment and § 1610(c) order in the District of Columbia, the Gates plaintiffs had taken steps to execute their judgment against Syrian assets. They subpoenaed the Office of Foreign Assets Control in the U.S. Treasury Department to identify Syrian assets in the United States that could be attached to satisfy their judgment. The Office responded under a protective order and told the Gates plaintiffs that some Syrian assets were located in the Northern District of Illinois. 1. Procedural History of Appeal No. 14-3344 The Gates plaintiffs registered their judgment from the District of Columbia action with the district court in the Northern District of Illinois as case No. 11-cv-8715 and served a citation to discover assets on JP Morgan Chase Bank. The bank identified responsive accounts belonging to agencies and instrumentalities of Syria that were held by the bank itself and by AT&T. See 28 U.S.C. § 1610(g) (authorizing the attachment of and execution of a judgment against “the property of an agency or instrumentality” of a state liable for sponsoring terrorism). The Gates plaintiffs responded by serving AT&T with a citation to discover assets and pursued other responsive accounts at JP Morgan Chase Bank. The Gates plaintiffs litigated for two years in Illinois seeking a court order granting them the Syrian funds to satisfy their judgment. Part of that litigation was defending the priority of their claim against a competing claim by the Baker plaintiffs, another group of victims of terrorism seeking to satisfy their own judgment against Syria. The Baker Nos. 14-3327 and 14-3344 9 plaintiffs intervened in the Gates suit in 2012. The district court ruled that the Gates plaintiffs had priority over the Baker plaintiffs and issued two turnover orders. A May 13, 2013 order directed the release of the funds held by AT&T, and a February 3, 2014 order directed the release of the funds held by JP Morgan Chase. The Baker plaintiffs appealed those orders to this court. On June 18, 2014, we issued an opinion affirming both of the district court’s turnover orders. Gates, 755 F.3d 568. The Gates plaintiffs promptly moved for an order directing the clerk of the Northern District of Illinois to release the assets to them. Two days later, on August 17, 2014, the Wyatt plaintiffs took their first action regarding the Gates lawsuit in Illinois. The Wyatt plaintiffs filed not a motion to intervene but a memorandum of opposition contesting the Gates plaintiffs’ right to the assets. The Gates plaintiffs moved to strike the filing. The district court held a hearing and on October 22, 2014 granted the Gates plaintiffs’ motion to release funds. The Wyatt plaintiffs’ appeal of that order was docketed as No. 14-3344. 2. Procedural History of Appeal No. 14-3327 On August 11, 2014, the Wyatt plaintiffs had also filed a separate action in the Northern District of Illinois, No. 14-cv6161. They named Syria as the defendant and the Gates plaintiffs as third-party defendants. In that action, the Wyatt plaintiffs registered their judgment from the District of Columbia action and served a citation to discover assets on the clerk of court for the Northern District of Illinois. (By that time, JP Morgan Chase and AT&T had placed the disputed funds in the district court’s registry.) The Wyatt plaintiffs also moved for the turnover and release of the assets. The 10 Nos. 14-3327 and 14-3344 Gates plaintiffs moved to dismiss the complaint for failure to state a claim and lack of jurisdiction. Also on October 22, 2014, the district court dismissed the Wyatt plaintiffs’ complaint. The court also denied the Wyatt plaintiffs’ motion to stay that decision a few weeks later. The Wyatt plaintiffs’ appeal of those orders was docketed as No. 14-3327.