The case of the day is Weinstein v. Islamic Republic of Iran (D.C. Cir. 2016). The plaintiffs were victims of terrorist attacks who held unsatisfied judgments against Iran, North Korea, and Syria. They sought to attach “Internet data” managed by the Internet Corporation for Assigned Names and Numbers (ICANN), namely the top-level domains for Iran (.ir), North Korean (.kp), and Syria (.sy). In other words, the plaintiffs wanted to assume control of the defendant countries’ top-level domains in partial satisfaction of the judgments.
Continue reading Case of the Day: Weinstein v. Iran
The case of the day is Bell Helicopter Textron, Inc. v. Islamic Republic of Iran (D.C. Cir. 2013). Bell operated a helicopter factory in Iran in the 1970s. It abandoned the plant after the Iranian Revolution. In 2002, Bell learned that the Iran Aircraft Manufacturing Industrial Co., a state-owned firm, was using the plant to manufacture the Shaheed helicopter, which closely resembled Bell’s Jet Ranger helicopter. In 2006 Bell sued Iran in Washington, alleging violations of the Lanham Act. After Bell effected service of process, Iran defaulted, and the court entered Iran’s default in 2009. Following a hearing on damages, the court entered a default judgment for more than $22 million in damages. In 2012, after Iran was served with the default judgment pursuant to the FSIA, Iran moved for relief from the judgment under FRCP 60(b)(4) on the grounds that the judgment was void. The district court granted the motion on the grounds that under the FSIA, Iran was immune from suit because Bell had not shown that Iran’s actions caused a “direct effect” in the United States. Bell appealed.
On appeal, the court affirmed after a de novo review. First, it rejected the argument that the Rule 60 motion was untimely; under DC Circuit precedent, there is no time limit on a FRCP 60(b)(4) motion where the defendant did not appear in the action. Second, the court rejected Bell’s argument that FRCP 60(b)(4) had a limited scope: when the defendant has not appeared, the judgment is void under the rule if the court lacked subject matter jurisdiction, full stop. The court went on to affirm the lower court’s finding that, on the facts of the case, Bell could not show an exception to sovereign immunity under the FSIA.
The case is interesting because it emphasizes the continuing vitality of the traditional understanding of void judgments. IF a defendant actually litigates a jurisdictional motion and loses, or if it actively litigates a case and fails to raise a jurisdictional point before judgment, then of course there are limits to its ability to seek relief from the judgment on grounds that the judgment is void. But if the defendant is willing to take the risk of forfeiting its right to litigate the merits if it’s wrong about jurisdiction, then it is free to sit back, allow a judgment to enter, and then raise its jurisdictional defense later.
I agree with this analysis, and I have presented it as essentially unproblematic. But stay tuned for tomorrow’s discussion of Box v. Dallas Mexican Consulate General, a case that takes the wrong view of this.
The case of the day is Global Discoveries, Ltd. v. Realtec, Ltd. (N.D. Cal. 2013). Global Discoveries was a Nevada limited liability company. It brought a statutory interpleader action against Realtec Ltd., a British Virgin Islands company, Zahra Gilak, whose nationality was not clear in the decision (perhaps she was Iranian) but who was formerly a resident of California and was, according to the plaintiff, “deported,” Hassan Iran Pouy, an Iranian national who had never lived in California, and the United States. The issue was which of the parties Global Discoveries sought to interplead had the right to proceeds from a tax sale that Global Discoveries was holding.
The case presented two questions. First was a question of jurisdiction. Under the statute, the federal court lacks jurisdiction unless there was diversity of citizenship among two or more of the claimants. The judge suggested there was no diversity of citizenship and ordered Global Discoveries to show cause why the case should not be dismissed. It’s not clear how this will come out, but I had two thoughts. First, the judge discounted the possibility that Gilak might have been a legal permanent resident at the time the action was commenced. He held that even if this were so, Gilak would not be deemed a citizen of California for diversity of citizenship purposes. This is correct under the Federal Jurisdiction and Venue Clarification Act, which repealed the provision of the statute that formerly deemed legal permanent residents to be citizens of the state where they resided. Second, the judge discounted the presence of the United States as a claimant. I haven’t looked into this, but it seems to me that under 28 U.S.C. §§ 2410 and 1444, the district courts would have removal jurisdiction but perhaps not original jurisdiction of such actions.
Second was the question of service of process under FRCP 4(f)(3). Global Discoveries sought leave to serve the Iranian defendants by publication in a local California newspaper, without making any showing that service by other means would be impracticable; Global Discovery’s assertion that there were no other means was clearly wrong, as the means permissible under FRCP 4(f)(3)—at least in countries that are not parties to the Hague Service Convention‐are limited only by the plaintiff’s lawyer’s imagination. Service by email might be possible, or service on a US lawyer who said that Pouy had authorized him to represent him. And of course, the use of a letter rogatory might be possible, though I don’t know that it is in light of the lack of direct diplomatic relations between the two countries. But in any case, the judge also found that there was a there was no reason to think that the Iranian claimants would receive actual notice. I believe that even in an interpleader case, due process requires an adequate attempt to give actual notice to the claimants.