The opinion of the court was delivered by: Lamberth, District Judge.
The United States moves to quash the writ of attachment entered
by the Clerk of this Court on November 18, 1998, which purports
to attach "all credits held by the United States to the benefit
of the Islamic Republic of Iran," including U.S. Treasury funds
owed to Iran in accordance with an award of the Iran-United
States Claims Tribunal, Seeking these funds to satisfy part of
his prior judgment against Iran, Plaintiff Stephen Flatow
maintains that certain amendments to the Foreign Sovereign
Immunities Act waive the United States' sovereign immunity with
respect to U.S. funds owed to judgment debtors.
28 U.S.C. § 1610(f)(1)(A) & § 1610(a)(7) (Supp. 1999). Because this
Court finds that Congress has not clearly and unequivocally waived
the United States' sovereign immunity, the Court GRANTS the United
States's Motion to Quash the Writ of Attachment. This order, however,
is stayed, for ten days, to provide plaintiff the opportunity to seek
a further stay from the Court of Appeals.
I. Factual and Procedural Background
In April 1995, Alisa Flatow, Plaintiff Stephen Flatow's
20-year-old daughter, was killed in a terrorist bombing of a
tourist bus in Israel. The terrorist group responsible for the
suicide bombing mission, the Shaqaqi faction of the Palestine
Islamic Jihad, is funded exclusively by the Islamic Republic of
Iran ("Iran"). See Flatow v. The Islamic Republic of Iran,
999 F. Supp. 1, 6-9 (D.D.C. 1998).
A year after Alisa Flatow's murder, Congress amended the
Foreign Sovereign Immunities Act, 28 U.S.C. § 1602-1611 (1994
& Supp. 1999) ("FSIA"), by enacting the Antiterrorism and
Effective Death Penalty Act of 1996, which lifts the sovereign
immunity of foreign states that commit acts of terrorism or
provide material support for terrorism. Pub.I., No. 104-132,
Title II, § 221(a), (April 24, 1996), 110 Stat. 1241,
codified at 28 U.S.C. § 1605 (1996 & Supp. 1999). In
addition, Congress created a federal cause of action for personal
injury or death and provided, inter
alia, that punitive damages would be available in actions brought
under the state-sponsored terrorism exception. 28 U.S.C. § 1605(a)(7)
(1996 & Supp. 1999). This particular amendment became known as
the "Flatow Amendment." Flatow, 999 F. Supp. at 12.
Pursuant to these newly enacted provisions, Flatow filed a
wrongful death action against Iran, its Ministry of Information &
Security, and various government officials. See Flatow, 999 F.
Supp. at 8-10. Iran failed to appear. Accordingly, after an
evidentiary hearing in which the plaintiff "establishe[d] his
claim or right to relief by evidence . . . satisfactory to the
Court," 28 U.S.C. § 1608(e), this Court entered a default
judgment against Iran, finding Iran and its codefendants jointly
and severally liable for loss of accretions, compensatory
damages, solatium and $225,000,000.00 in punitive damages. See
Flatow, 999 F. Supp. at 5.
Attempting to execute this judgment, plaintiff filed a writ of
attachment on November 18, 1998 against certain U.S. Treasury
funds owed to Iran. Specifically, plaintiff sought attachment of
$5,042,481.65 plus interest in the Treasury Judgment Fund, which
was awarded to Iran by the Iran-U.S. Claims Tribunal
("Tribunal"). See Islamic Republic of Iran v. United States, Case
No. A/27, AWD No. 586-A27-FT, (Iran-United States Claims Tribunal
June 5, 1998).
In opposing the United States' motion to quash the writ of
attachment, plaintiff contends that these U.S. Treasury funds,
which are earmarked for payment of the Tribunal award, represent
the property of Iran. See Iranian Assets Control Regulations,
31 C.F.R. § 535.311 (1999) (recognizing, inter alia. debt,
indebtedness and judgments as property). As such, plaintiff
maintains that these funds are subject to attachment pursuant to
the Foreign Sovereign Immunities Act. 28 U.S.C. § 1610(f)(1)(A) &
(a)(1)(7) (1998). More specifically, he claims that because he is a
judgment-creditor of Iran, he is entitled to these funds as partial
satisfaction of his March 11, 1998 judgment.
Needless to say, the United States does not share plaintiff's
characterization of these U.S. Treasury funds as "Iranian
property." Rather, the United States maintains that attachment of
the funds constitutes a suit against the United States, which is
barred by the doctrine of sovereign immunity. Buchanan v.
Alexander, 45 U.S. (4 How.) 20, 21, 11 L.Ed. 857 (1846).
As a preliminary matter, then, this Court must determine
whether the funds at issue constitute property of the United
States or Iran. As explained below, controlling authority
dictates the finding that the Treasury funds are U.S. property.
As such, sovereign immunity bars their attachment here, as
neither the Iranian Assets Control Regulations nor the Foreign
Sovereign Immunities Act contain a clear and unequivocal waiver
of the United States' immunity.
Suits against the United States are barred by sovereign
immunity, absent an effective waiver. Department of Army v. Blue
Fox, Inc., 525 U.S. 255, 119 S.Ct. 687, 690, 142 L.Ed.2d 718
(1999) (holding that sovereign immunity barred subcontractor's
equitable lien against United States); FDIC v. Meyer,
510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) (finding that
"sue-and-be-sued" clause waived government agency's sovereign
immunity); see also United States v. Mitchell, 463 U.S. 206, 212,
103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) ("It is axiomatic that the
United States may not be sued without its consent and that the
existence of consent is a prerequisite for jurisdiction.").
Waiver of the federal government's sovereign immunity must be
"expressed in unequivocal statutory text and cannot be implied."
Blue Fox, 119 S.Ct. at 690; Lane v. Pena, 518 U.S. 187, 192, 116
S.Ct. 2092, 135 L.Ed.2d 486 (1996) ("A waiver of the
Federal Government's sovereign immunity must be unequivocally expressed
in statutory text."); United States v. Nordic Village, Inc.,
503 U.S. 30, 33, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992) ("Waivers of
the Government's sovereign immunity, to be effective, must be
`unequivocally expressed.'") (quoting Mitchell, 463 U.S. at 206,
103 S.Ct. 2961). Moreover, courts must construe the scope of such
waivers "strictly in favor of the sovereign." Blue Fox, 119 S.Ct.
at 691; Lane, 518 U.S. at 192, 116 S.Ct. 2092; Nordic Village,
503 U.S. at 33, 112 S.Ct. 1011. Accordingly, any ambiguities in
the statutory text must be resolved in favor of immunity. United
States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 131
L.Ed.2d 608 (1995). In sum, these rules of construction derive
from the fact that sovereign immunity operates as a
jurisdictional bar. As such, "the `terms of [the United States']
consent to be sued in any court define [a] court's jurisdiction
to entertain the suit.'" Meyer, 510 U.S. at 475, 114 S.Ct. 996
(quoting United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct.
767, 85 L.Ed. 1058 (1941)).
Principles of sovereign immunity apply with equal force to
attachments and garnishments. See Buchanan v. Alexander, 45 U.S.
(4 How.) 20, 21, 11 L.Ed. 857 (1846); FHA v. Burr, 309 U.S. 242,
243, 60 S.Ct. 488, 84 L.Ed. 724 (1940); see also Neukirchen v.
Wood County Head Start, Inc., 53 F.3d 809, 811 (7th Cir. 1995);
Automatic Sprinkler Corp. v. Darla Envtl. Specialists,
53 F.3d 181, 182 (7th Cir. 1995); State of Arizona v. Bowsher,
935 F.2d 332, 334 (D.C.Cir. 1991); Haskins Bros. & Co. v. Morgenthau,
85 F.2d 677, 681 (App.D.C. 1936). Indeed, early Supreme Court
precedent established that creditors may not attach funds held by
the U.S. Treasury or its agents. Buchanan, 45 U.S. at 21,
45 U.S. 20. As the Supreme Court explained, "[s]o long as money remains
in the hands of a disbursing officer, it is as much the money of
the United States, as if it had not been drawn from the
treasury." Id. In other words, funds held in the U.S.
Treasury — even though set aside or "earmarked" for a specific
purpose — remain the property of the United States until the
government elects to pay them to whom they are owed. Id. ("Until
paid over by the agent of the government to the person entitled
to it, the fund cannot, in any legal sense, be considered a part
of his effects."). Notably, the Supreme Court has recently
reaffirmed the continued vitality of this precedent. See
Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 119 S.Ct.
687, 692, 142 L.Ed.2d 718 (1999) (Rehnquist, C.J.) (citing
Buchanan). In holding that a subcontractor's lien against
government funds owed to an insolvent prime contractor was barred
by sovereign immunity, the Supreme Court stated that such a
result "is in accord with our precedent establishing that
sovereign immunity bars creditors from attaching or garnishing
funds in the Treasury." Id.
Similarly, the D.C. Circuit continues to acknowledge the
principle set forth in Buchanan. See State of Arizona v. Bowsher,
935 F.2d 332, 334 (D.C.Cir. 1991) (citing Buchanan). While
rejecting states' claims against money owed to their citizens by
the federal government, the D.C. Circuit stated that "[w]hen the
United States sets aside money for the payment of specific debts,
it does not thereby lose its property interest in that money."
Id. To the contrary, the court of appeals determined that "[t]he
money here is federal money. That various persons have claims
against the United States in amounts ...