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ROEDER v. THE ISLAMIC REPUBLIC OF IRAN

April 18, 2002

DAVID M. ROEDER, ET AL., PLAINTIFFS,
V.
THE ISLAMIC REPUBLIC OF IRAN AND THE MINISTRY OF FOREIGN AFFAIRS, DEFENDANTS.



The opinion of the court was delivered by: Emmet G. Sullivan, United States District Judge.

MEMORANDUM OPINION

Plaintiffs filed this case seeking a belated remedy for the horrible suffering to which they were subjected by the government of the Islamic Republic of Iran more than 20 years ago. There is no dispute that members of the plaintiff class were held hostage, and at times tortured, for 444 days after being seized from the United States Embassy in Tehran by Iranian governmental officials. There is also no dispute that the spouses and children of those hostages, who comprise the remainder of the plaintiff class, were also held hostage during this time, unable to resume the normalcy of their daily lives without knowing when or if their loved ones would return. There is also no dispute that had plaintiffs been so treated by fellow United States citizens, such actions would lead to civil, and indeed, criminal liability.

Unfortunately, this litigation has only continued the roller coaster ride onto which plaintiffs were thrust over 20 years ago. Members of this plaintiff class previously attempted to sue Iran, but their claims were dismissed because Congress had not waived Iran's sovereign immunity. See Persinger v. Islamic Republic Iran, 729 F.2d 835 (D.C. Cir. 1984); McKeel v. Islamic Republic of Iran, 722 F.2d 582 (9th Cir. 1983); Ledgerwood v. State of Iran, 671 F. Supp. 311 (D.D.C. 1985). In 1996, Congress passed the Federal Anti-Terrorism and Effective Death Penalty Act ("the 1996 Anti-terrorism Act") and the Flatow Amendment, which together waived foreign sovereign immunity and created a cause of action for individuals harmed by state-sponsored acts of terrorism. 28 U.S.C. § 1605(a)(7) and note. With the assistance of their counsel, plaintiffs brought this action under those statutes, arguing that this new cause of action applied to the 1979 hostage taking in Tehran, and asking for compensatory and punitive damages of $33 billion.

Iran chose not to defend its actions in this Court, despite its long history of adjudicating claims in this Circuit. See, e.g., McKesson HBOC, Inc. v. Islamic Republic of Iran, 271 F.3d 1101 (D.C. Cir. 2001). Plaintiffs therefore proceeded with their claims unopposed, and at plaintiffs' request the Court entered a default judgment on liability on August 13, 2001. The Court scheduled a date for a trial to hear evidence on damages, at which several of the plaintiffs were scheduled to testify about their experiences. The Court did not look lightly upon requiring plaintiffs to relive their terrible ordeal and appreciated the difficulty of both testifying and witnessing such testimony.

On the eve of trial, however, the State Department, recently made aware of plaintiffs' claims, attempted to intervene, vacate the judgment, and dismiss the suit. Plaintiffs' hopes of recovery were once again placed in jeopardy. The United States argued that the Algiers Accords, the 1980 bi-lateral agreement between the United States and Iran, by which the hostages' release was secured, and its implementing regulations, contain a prohibition on lawsuits arising out of the hostage-taking at issue here. See Govt's Mem. in Supp. of Mot. to Vacate of 10/12/01. Because no act by Congress had specifically abrogated the Accords, the government argued, that agreement precludes plaintiffs' claims and the case should be dismissed. The United States also raised several other arguments interpreting the Foreign Sovereign Immunities Act that this Court lacked jurisdiction to hear plaintiffs' claims, and that plaintiffs' claims should be dismissed on the merits.

Because of the last-minute nature of the government's last minute to intervene, rather than deny plaintiffs, many of whom had traveled from distant parts of the country, the opportunity to present their testimony on the record, the Court proceeded with the trial. For two days, the Court heard the harrowing accounts of 444 days spent in captivity from both the former hostages and their family members. The Court scheduled a later date to hear argument on the government's motions and established a briefing schedule to afford the plaintiffs an opportunity to respond to the government's arguments. The Court also directed plaintiffs' counsel to explain why they had not brought the Algiers Accords to the Court's attention earlier.

On November 28, 2001, the date that the government's reply brief was due, the case took yet another dramatic turn. The government informed the Court that Congress had recently passed, and the President had signed on that very day, an appropriations bill with a provision amending the Foreign Sovereign Immunities Act that specifically referred to this case. See Subsection 626(c) of Pub.L. 107-77, 115 Stat. 748 (2001) ("Subsection 626(c)"). After hearing argument from counsel on the impact of the appropriations rider, this Court expressed its serious concern about the lack of clarity in Congress' recent action.

After the Court took this case under advisement, Congress acted yet again. On December 20, 2001, Congress passed yet another appropriations rider that added a technical amendment to Subsection 626(c) and contained language in its legislative history purporting to explain the legislative intent behind the earlier Subsection 626(c). See Section 208 of the Department of Defense and Emergency Supplemental Appropriations Act, Pub.L. 107-117, 115 Stat. 2230 ("Section 208").

However, rather than proceed with the requisite clarity and assurance of purpose needed when legislating in the realm of foreign affairs, Congress chose to enact two provisions about which only one thing is clear: Congress' intent to interfere with ongoing litigation. This Court takes very seriously the question of whether Congress by these actions has impermissibly intruded on the exclusive judicial authority granted to this Court by virtue of Article III of the U.S. Constitution. Ultimately, however, this Court need not resolve these important constitutional questions because while Congress' intent to interfere with this litigation was clear, its intent to abrogate the Algiers Accords was not.

Were this Court empowered to judge by its sense of justice, the heart-breaking accounts of the emotional and physical toll of those 444 days on plaintiffs would be more than sufficient justification for granting all the relief that they request. However, this Court is bound to apply the law that Congress has created, according to the rules of interpretation that the Supreme Court has determined. There are two branches of government that are empowered to abrogate and rescind the Algiers Accords, and the judiciary is not one of them. The political considerations that must be balanced prior to such a decision are beyond both the expertise and the mandate of this Court. Unless and until either the legislative or executive branch acts clearly and decisively, this Court can not grant plaintiffs the relief they seek.

Finally, while the actions of the co-equal branches of government are generally entitled to the due respect of this Court, this Court can not ignore the reality of what has occurred here. Both Congress and the President have expressed their support for these plaintiffs' quest for justice, while failing to act definitively to enable these former hostages to fulfill that quest. If the political consequences of overturning the Algiers Accords are too great, so be it, and my co-equal counterparts should say so. However, the only branches of government with the power to make that difficult decision should not with one hand express support for plaintiffs and with the other leave it to this Court to play the role of the messenger of bad news. Congress and the President possess both the power to decide and the obligation to decide with clarity.

Upon consideration of the government's motion to intervene, to vacate the entry of default judgment, and to dismiss the plaintiffs' claims, the responses and replies thereto, the further briefing requested by the Court, as well as the many oral arguments of counsel, this Court has no choice but to grant the government's motions and dismiss this case.

BACKGROUND

I. Events of 1979 and 1980

On November 4, 1979, Iranian militants seized the American Embassy in Tehran, Iran, and took as hostages more than 50 U.S. diplomatic and military personnel who were stationed there. At the same time, representatives of the Iranian government detained the American diplomatic personnel who were meeting with government representatives at the Iranian Ministry of Foreign Affairs. All of the seized individuals were citizens of the United States. All of the seized individuals were present in Iran with the permission of the Iranian government, and were serving as representatives of the United States.

These hostages remained in Iranian custody for 444 days and were subjected to physical and mental torture and inhumane conditions of confinement. At the non-jury trial conducted in this case, former hostages testified about the treatment they endured. The hostages were often blindfolded and tied to chairs or other objects for prolonged periods of time. They were at times kept in isolation from one another, and denied the right to communicate with one another or their families. Several hostages recounted physical abuse, including being kicked, beaten, punched, walked blindfolded into obstacles such as trees, and being exposed with minimal clothing to the elements. The hostages were imprisoned in cold, dark locations, including prisons, and were given only minimal clothing, food, water, and medical care.

The hostages were repeatedly interrogated by their Iranian captors. Several hostages told of being threatened with release to chanting mobs or being placed on trial in Iran for being spies. One former hostage testified that during one interrogation he was told that his wife and children were in danger, as one of his interrogators recited exactly where the hostage's disabled son went to school, what bus he rode, and the location of his home. That hostage was told that unless he confessed his son's fingers and toes would be delivered to his wife and mother.

The former hostages also testified about simulated executions, in which they were awakened in the middle of the night, marched outside, forced to lean against a wall while listening to what they believed was a firing squad preparing its weapons and taking aim, only to be called off at the last second.

While the hostages themselves experienced 444 days of abuse, their spouses and children suffered as well. The spouses and children of former hostages testified before this Court about the dramatic impact that not knowing when or if their loved ones would return had on their lives. Spouses of the former hostages recounted their different ways of coping, including organizing a national "Yellow Ribbon" campaign to express support for bringing the hostages home. The children of former hostages testified about the impact of the experience on their childhood and lives.

There is no dispute that, at all relevant times, the individuals who seized and maintained custody of the former hostages were acting as authorized representatives of the Iranian government. The government of Iran fully endorsed, supported, and condoned the horrible conditions to which these hostages were subjected. The government of Iran refused to honor the repeated requests of the United States and third parties to release the hostages or improve the conditions of their confinement.

It was not until January 20, 1981 that the hostages were finally released.

II. The Algiers Accords

In order to obtain the freedom of the plaintiff hostages, the United States entered into an international executive agreement with the Islamic Republic of Iran on January 19, 1981. That agreement was embodied in two declarations of the government of Algeria, and became known as the Algiers Accords. See Govt's Mem. in Supp. of Mot. to Int. of 10/12/01, Ex. 1 (Declaration of the Democratic and Popular Republic of Algeria ("General Declaration"); Declaration of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of American and the Government of the Islamic Republic of Iran ("Claims Settlement Declaration")) (both reprinted in 20 I.L.M. 223); see also Dames & Moore v. Regan, 453 U.S. 654, 662-665 (1981).

The Algiers Accords include a number of interlocking commitments made by both countries, reflecting the stated principles of (i) "restor[ing] the financial position of Iran . . . to that which existed prior to November 14, 1979," and (ii) "terminat[ing] all litigation as between the Government of each party and the nationals of the other, and [bringing] about the settlement and termination of all such claims through binding arbitration." General Declaration, General Principles ¶¶ A, B, 20 I.L.M. at 224. The United States agreed to release the Iranian assets within its jurisdiction that it had frozen after the hostage-taking occurred, id. at ¶ 4-6, 8, 20 I.L.M. at 225-27, and "to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran." Id., General Principles ¶ B. The United States agreed to "prohibit all further litigation based on such claims," and to bring about their resolution through binding arbitration, before the Iran-United States Claims Tribunal established under the Claims Settlement Declaration, Arts. I, II, 20 I.L.M. at 230-31.

In return, Iran agreed to place $1 billion of its repatriated financial assets in an escrow account in the Central Bank of Algeria, for the purpose of satisfying awards made against Iran by the Claims Tribunal. General Declaration, ¶ 7. Iran further agreed to maintain a minimum balance of $500 million in the escrow account until all such awards have been satisfied. Id; see also Dames & Moore, 453 U.S. at 664-65.

In addition to establishing the Claims Tribunal, the Algiers Accords specifically addressed any claims that the U.S. hostages might assert against Iran. In the General Declaration, the United States agreed to

bar and preclude the prosecution against Iran of any pending or future claim of the United States or a United States national arising out of events occurring before the date of this declaration related to (A) the seizure of the 52 United States nationals on November 4, 1979, (B) their subsequent detention, (C) injury to United States property or property of the United States nationals within the embassy compound in Tehran after November 3, 1979, and (D) injury to the United States national or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran.

III. Executive Order No. 12283 and Implementing Regulations

In order to implement the Algiers Accords, President Jimmy Carter issued a series of Executive Orders on January 19, 1981, the last day of his term in office. Exec. Order Nos. 12276-12285, 46 Fed. Reg. 7913-7932 (Jan. 19, 1981). President Ronald Reagan ratified those orders by Executive Order No. 12294 on February 24, 1981. 46 Fed. Reg. 14111 (Feb. 24, 1981).

Executive Order 12283 is entitled, "Non-Prosecution of Claims of Hostages and for Actions at the United States Embassy and Elsewhere." 46 Fed Reg. 7927 (Jan. 19, 1981). That Executive Order states that as reflected in the Algiers Accords, and to begin the process of normalization of relations between the United States and Iran:

The Secretary of the Treasury shall promulgate regulations:
(a) prohibiting any person subject to U.S. jurisdiction from prosecuting in any court within the United States or elsewhere any claim against the Government of Iran arising out of events occurring before the date of this Order relating to
(1) the seizure of the hostages on November 4, 1979,

(2) their subsequent detention,

(3) injury to United States property or property of United States nationals within the United States Embassy compound in Tehran after November 3, 1979, or
(4) injury to United States nationals or their property as a result of popular movements in the course of the Islamic Revolution in Iran which were not an act of the Government of Iran;
(b) prohibiting any person not a U.S. national from prosecuting any such claim in any court within the United States;
(c) ordering the termination of any previously instituted judicial proceedings based upon such claims; and
(d) prohibiting the enforcement of any judicial order issued in the course of such proceedings.

Id. at 1-101. Furthermore, Executive Order 12283 granted the Attorney General the authority to "take all appropriate measures to notify all appropriate courts of the existence of this Order and implementing regulations and the resulting termination of litigation." Id. at 1-102.

Pursuant to this directive, the Treasury Department promulgated regulations on February 26, 1981 that state:

[p]ersons subject to the jurisdiction of the United States are prohibited from prosecuting in any court within the United States or elsewhere . . . any claim against the Government of Iran arising out of events occurring before January 19, 1981 relating to:
(1) The seizure of the hostages on November 4, 1979; [or]

(2) The subsequent detention of such hostages . . .

31 C.F.R. § 535.216(a).

IV. Foreign Sovereign Immunities Act

V. Federal Anti-Terrorism and Effective Death Penalty Act

The 1996 Antiterrorism Act created a specific exception to the FSIA and thereby waived foreign sovereign immunity for certain state-sponsored terrorist acts. Pub.L. 104-132 (codified at 28 U.S.C. § 1605(a)(7)). Foreign sovereign immunity is waived under the Antiterrorism Act if plaintiffs establish the following:

1) personal injury or death caused by an act of torture, extrajudicial killing, aircraft sabotage, or hostage taking;
2) the act was either perpetrated by a foreign state directly or by a non-state actor which receives material support or resources from the foreign state defendant;
3) the act or provision of material support or resources is engaged in by an agent, official, or employee of the foreign state while acting within the scope of his or her office, agency, or employment;
4) the foreign state has been designated as state sponsor of terrorism
5) if the incident occurred within the foreign state defendant's territory, that the plaintiff offered the defendants a reasonable opportunity to arbitrate the matter;
6) either the plaintiff of the victim was a United States national at the time of the incident;

28 U.S.C. § 1605(a)(7); see also H.R. Rep. No. 383, 104th Cong., 1st Sess. 1995 at 137-138, available at 1995 WL 731698.

VI. The Flatow Amendment

Although the Antiterrorism Act waived the immunity of foreign states, questions remained as to what causes of action were available to plaintiffs who suffered at the hands of state-sponsored terrorism. See Flatow v. Islamic Republic of Iran, 999 F. Supp. 1, 12 (D.D.C. 1998). To resolve those questions, Congress enacted a separate amendment to the FSIA later in 1996 that created a civil cause of action for acts that satisfy the requirements of the sovereign immunity waiver in 28 U.S.C. § 1605(a)(7). That amendment took the form of an appropriations rider entitled the Civil Liability for Acts of State Sponsored Terrorism, Pub.L. No. 104-208, § 589, 110 Stat. 3009-172 (commonly known as "the Flatow Amendment").*fn1 As this Court reflected in Flatow v. Islamic Republic of Iran:

In [the Flatow Amendment's sponsor's] experience as the Chairman of the House Task Force on Counterterrorism and Unconventional Warfare and member of the House National Security Committee, in order for the exception for immunity to have the desired deterrent effect, the potential civil liability for foreign states which commit and sponsor acts of terrorism would have to be substantial.

999 F. Supp. 1, 12 (D.D.C. 1999) (citing Congressman Jim Saxton, News Release, Saxton to Flatow Family: "Be Strong, America is Behind You" (February 26, 1997)).

The Flatow Amendment conditions civil liability on the six elements of the sovereign immunity waiver in the Antiterrorism Act at § 1605(e)(7). See § 1605 note.*fn2 In addition, the Flatow Amendment adds a seventh element to the private right of action:

No action shall be maintained under this action [SIC] if an official, employee, or agent of the United States, while acting within the scope of his or her office, employment, or agency would not be liable for such acts if carried out within the United States.

Id.*fn3 Once those seven elements are established, a defendant shall be liable for "money damages which may include economic damages, solatium, pain and suffering, and punitive damages." Id.

VII. Procedural History of this Case

Plaintiffs commenced this action against the Islamic Republic of Iran on December 29, 2000. See Plfs' Complaint. On February 23, 2001, plaintiffs filed an amended complaint naming the Iranian Ministry of Foreign Affairs as a party-defendant. See Plfs' First Amended Complaint. The named plaintiffs are three former hostages and the wife and child of a former hostage, who brought the action on behalf of themselves and a class "comprising Americans taken hostage by defendants from the American Embassy or from the Foreign Ministry in Iran in 1979, their spouses, and their children who are victims of [d]efendants' conduct . . ." First Amended Complaint, ¶¶ 4-8,11.

Plaintiffs' complaint alleges violations of the Antiterrorism Act, the Flatow Amendment, and the common law of the District of Columbia. Plaintiffs' common law claims include the torts of assault, battery, false imprisonment, intentional infliction of emotional distress, consortium, solatium, and unjust enrichment. The Islamic Republic of Iran and the Iranian Ministry of Foreign Affairs are named as defendants for their role in perpetrating the capture and imprisonment of members of the plaintiff class. The plaintiffs seek $33 billion dollars in compensatory and punitive damages.

The defendants were properly served in accordance with statutory procedures, see 28 U.S.C. § 1608(a)(4). Despite service of process, defendants failed to make an appearance in this case. Consequently, after having certified the class on June 6, 2001, upon plaintiffs' request the Court entered a default judgment against defendants on August 17, 2001. The Court scheduled a trial for Monday, October 15, 2001 to determine the appropriate amount of damages.

VIII. United States' Intervention

Late in the evening on October 12, 2001, the United States filed an Emergency Motion to Intervene and to Adjourn Hearing on Plaintiffs' Damages Pending Decision on the United States' Motion to Dismiss. The United States argued that it is entitled to intervene as of right under Federal Rule of Civil Procedure 24(a) because its interest in upholding the obligations of the Algiers Accords is implicated by this litigation, and alternatively, that the Court should grant permissive intervention. The United States also filed a Motion to Vacate Default Judgment and Dismiss Plaintiffs' Claims. In that motion, the United States argued that the default judgment on liability should be vacated for lack of subject matter jurisdiction because the exceptions to FSIA created by the Antiterrorism Act do not apply here because Iran was not designated as a state-sponsor of terrorism as a result of this hostage-taking. Further, the United States argued that upholding the commitments of the Algiers Accords justifies relief from the default judgment under Federal Rule of Civil Procedure 60(b)(6). Once the default judgment is vacated, argued the United States, the Court should dismiss plaintiffs' claims because the Court lacks jurisdiction, because plaintiffs' claims do not satisfy the elements of the Flatow Amendment, and are barred by the Algiers Accords.

Pursuant to the Court's request, plaintiffs submitted an initial response on Sunday, October 14, 2001 and objected to the United States' intervention as untimely and improper. On the morning of October 15, 2001, the Court declined to hear argument on the government's filings, in light of the late hour of the attempted intervention and the considerable importance of the upcoming trial to the plaintiff witnesses. The Court set a briefing schedule for plaintiffs' response to the government motions, set a motions hearing date of December 13, 2001, and went forward with the trial. The Court heard the testimony of plaintiffs for two days.

On October 30, 2001, the Court ordered the parties to brief the following issue in their upcoming submissions:

Did plaintiffs' counsel have a heightened duty to disclose to the Court any adverse controlling authority given the ex parte nature of the proceedings in this case? Did plaintiffs' counsel violate that duty to disclose, and if so, what is the appropriate action for the Court to take?

On November 5, 2001, plaintiffs filed a motion to strike the government's motion to intervene and motion to vacate and dismiss. Plaintiffs argued that the government had no authority to intervene and that the only proper status for the government under 28 U.S.C. § 517 is as amicus curiae. On November 16, 2001, plaintiffs filed their oppositions to the United States' motions. Once again plaintiffs challenged the United States' intervention as untimely and improper. The plaintiffs also argued that the government lacked standing to raise a defense on the merits to plaintiffs claims against Iran, that the Algiers Accords provides no defense to Iran, and that the Algiers Accords does not trump statutes passed by Congress. Finally, plaintiffs counsel argued that they did reveal to the Court the only precedent from this Circuit that refers to the Algiers Accords as a potential bar to plaintiffs recovery, the Persinger case. Persinger v. Islamic Republic Iran, 729 F.2d 835 (D.C. Cir. 1984). Furthermore, plaintiffs were not obligated to disclose the Algiers Accords and their implementing regulations because, they argued, they have been abrogated by the 1996 Anti-terrorism Act and therefore are not controlling authority.

IX. Subsection 626(c) of the 2002 Justice, Commerce, and Treasury Appropriations Act

On November 28, 2001, the Court was informed that the President had signed into law H.R. 2500, 107th Cong., 1st Sess., the 2002 appropriations act for the Departments of Justice, Commerce, and Treasury. Pub.L. 107-77, 115 Stat. 748 (2001). Subsection 626(c) of that act contained a substantive amendment to the FSIA which provides, in full:

Amend 28 U.S.C. ยง 1605(a)(7)(A) by inserting at the end, and before the semicolon, the following: "or the act is related to Case Number 1:00CV03110 (ESG) [sic] in the United ...

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