Thursday, April 3, 2014

"The Law Cited by Plaintiffs Does Not Offer the Remedy They Seek" - Rubin v. Iran

"The court recognizes the tragic circumstances that gave rise to the instant action, but finds that the law cited by plaintiffs does not offer the remedy they seek." With these words, Judge Robert Gettleman ended the Northern District of Illinois case of Jenny Rubin, et al. v. Islamic Republic of Iran, et al. v. The University of Chicago and The Field Museum of Natural History.

The case involves American victims of a Hamas suicide bombing in Jerusalem in 1997. A federal judge in Washington, DC in 2003 awarded the plaintiffs a $71.5 million default judgment against Iran, holding that country to be responsible for the attack. One way the plaintiffs have sought to collect the judgment owed to them is to acquire ancient Iranian artifacts at prominent American Museums, including Chicago's Oriental Institute (OI) and The Field Museum, through attachment. They have been unsuccessful thus far.

OI holds the Persepolis and Chogha Mish Collections, consisting of objects acquired from Iran as part of long-term loans for the purpose of academic study. About 30,000 clay tablets make up the Persepolis Collection, loaned by the National Museum of Iran in 1937. The Chogha Mish Collection is made up of clay seal impressions excavated in the 1960's.

The Herzfeld Collection, meanwhile, consists of 1200 artifacts purchased by The Field Museum in April 1945 for $7300. The Field Museum sold some of the artifacts to OI in 1945, but later took back a portion. The Rubin plaintiffs have contended that Herzfeld objects found in both the Field Museum's and the OI's collections were stolen from Iran after their excavation, which occurred during the early part of the twentieth century. But The Field Museum continues to assert ownership, and Iran has not made any claim to the collection.

Both the museums and Iran have been fighting the plaintiffs' attachment case. They petitioned the Illinois federal district court for summary judgment in August, arguing that there were no issues of material fact and that they were entitled to have the plaintiffs' case dismissed as a matter of law. Judge Gettleman last week agreed.

The court adopted the defendants' position that the Foreign Sovereign Immunities Act (FSIA) cannot be used to award the artifacts to the plaintiffs. The FSIA is the federal law that protects foreign states from lawsuits, and makes foreign sovereign property located in the United States immune from attachment.

The plaintiffs argued that Section 1610 of the FSIA makes a "commercial activity" exception by declaring that “[a] foreign state shall not be immune from the jurisdiction of courts … in which rights in property taken in violation of international law are in issue and that property … is present in the United States in connection with a commercial activity carried on in the United States by the foreign state … [or an] instrumentality of the foreign state ….”  (emphasis added). The museums argued that their collections were not part of any Iranian commercial activity, and that they were not acting as agents for Iran in any type of commercial activity.

Judge Gettleman concluded, "Because Section 1610 of the FSIA requires the commercial activity to be conducted by the sovereign ... the court finds that the [museum] assets are not subject to attachment under Section 1610 of the FSIA."

Even Congress' amendment to the FSIA, known as the National Defense Authorization Act or 1610(g), does not permit the plaintiffs to seize the asset artifacts, the court ruled. The plaintiffs argued that the amendment permitted execution against all terror states’ assets. The court disagreed and held that "if Section 1610(g) provided a separate basis for attachment that allowed the execution against all terror states’ assets, regardless of whether they are blocked assets, certain subsections of Section 1610 would be unnecessary." "The plain language indicates that Section 1610(g) is not a separate basis of attachment," the court added, explaining that the plaintiffs could not find convincingly argue a brand new exception to the sovereign immunity rule. "The court therefore finds that Section 1610(g) does not provide a new basis for plaintiffs to attach the assets of Iran, and does not subject the collections in question to attachment and execution."

Judge Gettleman additionally ruled that the Terrorism Risk Insurance Act (TRIA) does not permit the plaintiffs to seize the artifacts. TRIA allows a plaintiff to attach the "blocked assets" of a "terrorist party" found liable for an act of terrorism. "Blocked assets" are those “seized or frozen by the United States under ... the Trading with the Enemy Act or under ... the International Emergency Economic Powers Act.” The court's order succinctly explained, "Because the [Persepolis and  Chogha Mish Collections] assets in question are not 'blocked' under TRIA, they are not subject to attachment by the plaintiffs under that statute." 

Regarding the Herzfeld objects, Judge Gettleman relied on the First Circuit Court of Appeals decision in the companion Rubin v. Iran case involving attachment of ancient Iranian artifacts from the Museum of Fine Arts, Boston and the Harvard museums. The First Circuit decision relied on information supplied by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), an agency that interprets administrative regulations applicable to TRIA. Gettleman wrote:
The court finds the reasoning of the First Circuit and the interpretation by OFAC compelling. The language cited by OFAC demonstrates ... that only assets contested by Iran, and not by third parties such as judgment creditors, would remain blocked and therefore subject to attachment. The court therefore holds that Iran itself must contest the ownership of the property in order to render an asset contested, and therefore blocked, under the TRIA. Because Iran has not claimed ownership of the antiquities in the Herzfeld Collection or the OI Collection, those assets are not contested or blocked, and therefore are not subject to attachment under TRIA.
The museums' victory in federal district court certainly will not be the last word. Recall that the case of Jenny Rubin, et al. v. Islamic Republic of Iran was restarted in Illinois in July 2012 after the U.S. Supreme Court declined to hear the Rubin plaintiffs' request to have the nation's highest court review a Seventh Circuit decision that ruled against the plaintiffs. It is expected that the attachment case will continue for several more years.

Photo credit: Mira Pavlakovic

By Rick St. Hilaire Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Blog url: Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: