Case of the Day: Rubin v. Islamic Republic of Iran

The Case of the Day is Rubin v. Islamic Republic of Iran (7th Cir. 2011). A hat tip to Louis M. Solomon for posting about the case. The facts of the case involve two spheres I would have thought were impossible to link: Hamas terrorism and some of the great Persian art collections in the United States:

On September 4, 1997, Hamas carried out a triple suicide bombing in the crowded Ben Yehuda Street pedestrian mall in Jerusalem. Five bystanders were killed and nearly 200 were injured. Hamas claimed responsibility for the bombing, and Israeli police arrested two Hamas operatives who participated in the attack. They and other members of their Hamas cell gave Israeli authorities information about the planning, financing, and execution of this act of terrorism. The two were later convicted of multiple counts of murder and attempted murder.

Rubin and other American victims of the attack sued Iran in the District of Columbia. (Had the claim been brought today, it would have been brought under 28 U.S.C. § 1605A(c). It was instead brought under the Flatow Amendment, Pub. L. 104-208, § 589, but in Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004), the court held that that statute did not create a private right of action. This history is irrelevant to the case of the day). Iran was properly served with process under the FSIA and defaulted, leading to a $71 million default judgment.

Rubin was then faced with the problem of collection. She focused on three Chicago art collections: “the Persepolis and Chogha Mish Collections at the Oriental Institute [of the University of Chicago], and the Herzfeld Collection at the Field Museum”:

The first two are collections of Persian antiquities recovered in excavations in the Iranian city of Persepolis in the 1930s and on the Chogha Mish plains in southwestern Iran in the 1960s. Archaeologists from the University of Chicago led these excavations, and Iran loaned the artifacts to the Oriental Institute for long-term study and to decipher the Elamite writing the appears on some of the tablets included among the discoveries.

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The third group of artifacts is known as the Herzfeld Collection, after the German archaeologist Ernst Herzfeld who worked on excavations in Persia for 30 years in the early twentieth century. The Field Museum purchased a set of prehistoric pottery, metalworks, and ornaments from Herzfeld in 1945. The plaintiffs contest the Field Museum’s title; they claim that Iran owns the collection because Herzfeld stole the artifacts and smuggled them out of the country in the 1920s and 1930s. Iran, however, does not claim ownership of the Herzfeld Collection.

Rubin sought to take the three collections by execution. But under 28 U.S.C. § 1609, in general, “the property in the United States of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611 …” Rubin moved for summary judgment as to the immunity question, arguing that Iran had waived its immunity by defaulting. The magistrate judge agreed, recommending to the court that it rule that § 1609 immunity is waived unless pleaded as an affirmative defense. The museums and the United States objected, but the district judge agreed with the magistrate.

Then, surprisingly, Iran appeared in the action and asserted its § 1609 immunity. Rubin pounced, serving broad discovery requests seeking discovery of all Iranian assets in the United States in aid of its execution. Iran sought a protective order regarding the discovery and moved for summary judgment on the § 1609 issue. The district court ordered Iran to respond to the discovery requests, and Iran appealed both the discovery order and the court’s earlier order holding that Iran had waived its § 1609 immunity.

The court held that under § 1609, a foreign state’s property is presumptively immune from attachment and execution, and the plaintiff had to identify particular property as exempt from the general statutory immunity to attachment and execution. Allowing the plaintiff to take general asset discovery “turns this presumptive immunity on its head.” The court noted cases in other jurisdictions that had held that broad discovery was impermissible when aimed at establishing jurisdiction over the foreign state. Because the exceptions to immunity from attachment and execution in § 1609 are narrower than the exceptions to immunity from the court’s subject-matter under § 1604, the court saw no reason why the rule should not be the same in cases under § 1609.

The court also rejected the argument that the § 1609 defense was waived if not pleaded. The statute says that the foreign state’s property shall be immune from attachment and execution except as otherwise provided in the statute. The court’s reasoning on this point, without more does not seem overwhelmingly strong on this point, as § 1610 expressly provides that the foreign state may waive its immunity under § 1609 “either explicitly or by implication.” Why can a failure to raise the defense not be an implicit waiver? That is the rule in other non-jurisdictional immunity contexts, e.g., qualified immunity in civil rights cases. Harlow v. Fitzgerald, 457 U.S. 800 (1983).

But the court also pointed out that under § 1610(c), an attachment or execution cannot issue until the court has determined “that a reasonable period of time has elapsed following the entry of judgment and the giving of any notice required under section 1608(e) …” Section 1608(e), in turn, requires service of the default judgment on the foreign state. This bolster’s the court’s conclusion, because it suggests that Congress intended to allow the foreign state to raise immunity from attachment and execution even after a default. All in all, I think the court got this right.

The court denied a petition for rehearing on June 6.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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