Case of the Day: Alimanestianu v. United States
Posted on January 3, 2017
The case of the day is Alimanestianu v. United States (Fed. Cl. 2016). This is the summary judgment decision following the decision on a motion to dismiss that I covered in December 2015. Here was my statement of the facts from the earlier post:
The plaintiffs are relatives of Mihai Alimanestianu, an American citizen who was killed aboard an airplane that exploded over Niger in 1989. The explosion was due to a terrorist act sponsored by the Libyan government.
In 1996, Congress amended the FSIA to eliminate foreign sovereign immunity in cases of personal injury cause by acts of state-sponsored terrorism. In 2002, the plaintiffs sued Libya and several officials. The district court granted a summary judgment in their favor in 2008 for approximately $1.3 billion in damages. Libya and its officials appealed.
On the date Libya appealed, the United States and Libya entered into a claim settlement agreement. Under the agreement, Libya was no longer within the state-sponsored terrorism exception to the FSIA. The agreement also terminated all pending suits, including suits that had gone to judgment but were still on appeal, and precluded future suits alleging Libyan state-sponsored terrorism. The agreement also established a “humanitarian settlement fund,” into which Libya deposited $1.5 billion to compensate US claimants, and the US deposited $300 million to compensate Libyan claimants. The US and Libya agreed, for themselves and their nationals, that the fund would be a full and final settlement of all claims. Congress then enacted the Libyan Claims Resolution Act, which implemented the agreement. The United States then moved to intervene in the Alimanesianu case and moved to vacate the judgment. The Court of Apppeals granted the motion and ordered the district court to dismiss the case with prejudice. The relatives received just over $10 million from the US government from the $1.5 billion contributed by Libya.
The relatives sued the government, claiming that it had effected a taking of their property when it entered into the claim settlement agreement.
In the earlier decision, the court denied a motion to dismiss arguing that there had been no taking of property. It revisited the takings issue on the motion for summary judgment, brushing off the plaintiff’s argument that the decision on the motion to dismiss was the law of the case. The judge first held that taking should be treated as a regulatory taking, judged under the Penn Central standard, rather than a per se taking. The Penn Central factors are: (1) whether the government’s action interfered with the plaintiff’s reasonable, investment-backed expectation; (2) the character of the government’s action; and (3) the economic impact of its action on the plaintiff.
The judge found that the plaintiffs had no reasonable expectation of any recovery, because at the time of the terrorist act, there was no reasonable expectation of any recovery at all against Libya, since at the time Libya had immunity from suit. If we are to measure things from the time of the terrorist attack, then this seems right, but I’m not sure I see why that’s the appropriate moment from which to judge the plaintiffs’ expectations. Suppose someone you know is the victim of a state-sponsored terrorist attack and you are named the executor of the victim’s estate. It’s entirely unnatural to ask whether the victim himself had any “investment-backed expectation” with respect to a claim against the state in question at the time of the terrorist attack, right? And at the time of the attack, there is no executor, and no heirs or legatees,1 yet they, not the victim himself, are the real parties in interest with respect to the claim against the foreign state. It seems to me the right time to judge the investment-backed expectation can be no earlier than the time when the executor is appointed. It’s really his expectation, not the victim’s expectation, that should matter, and unlike the victim, the executor, who tries to maximize the value of the estate for the beneficiaries, will look at the claim against the foreign state as an asset whose value should be maximized. It’s not clear to me from the facts in the opinion whether this approach would have made any difference.
The character of the government’s action weighed in favor of the government, because the government was conducting the nation’s foreign affairs, and it’s not infrequent in foreign affairs that claims of one country’s nationals get compromised in the interest of the broader relationship between the two countries. Furthermore, the plaintiffs only had their claim because the government designated Libya as a state sponsor of terrorism, something that the government could (and later did) reverse, and something on which it was unreasonable to rely too heavily.
Last, the court held that the $10 million per victim payment was an economic benefit to the victim’s estate and that it was not clear that there would have been any recovery absent the settlement between the United States and Libya.
In light of all these factors, the court granted summary judgment for the government.