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RAFII v. ISLAMIC REPUBLIC OF IRAN

October 25, 2005.

FRANCE MOKHATEB RAFII, Plaintiff,
v.
THE ISLAMIC REPUBLIC OF IRAN, and THE IRAN MINISTRY OF INFORMATION AND SECURITY, Defendants.



The opinion of the court was delivered by: COLLEEN KOTELLY, District Judge

MEMORANDUM OPINION

Currently before the Court are two issues: (1) the potential vacatur of Plaintiff's December 2, 2002 judgment entered in this case, in light of principles announced in the District of Columbia Court of Appeal's decision in Cicippi-Puleo v. Islamic Republic of Iran, 353 F.3d 1024, 1033 (D.C. Cir. 2004); and (2) the potential quashing of Plaintiff's remaining writs of attachment against certain properties that allegedly fall under the category of "blocked assets" for the purposes of the Terrorism Risk Insurance Act ("TRIA"), Pub.L. No. 107-297, 116 Stat. 2322 (Nov. 26, 2002). Upon a searching examination of these issues and the extensive briefing before it, the Court concludes that (1) it shall not exercise its limited discretion under Federal Rule of Procedure 60(b) to vacate the final judgment entered in favor of Plaintiff, despite the fact that subsequent decisions by the D.C. Circuit and courts within the United States District Court for the District of Columbia have undermined the legal reasoning employed by this Court in rendering its final judgment in favor of Plaintiff; and (2) it shall grant in full the United States's motion to quash all of Plaintiff's remaining writs of attachment.

I: BACKGROUND

  On December 2, 2002, this Court entered a default judgment, pursuant to 28 U.S.C. § 1605(a)(7), in favor of Plaintiff, France Rafii, and against the Islamic Republic of Iran ("Iran") and the Iranian Ministry of Information and Security ("MOIS") for the damages she suffered resulting from the murder of her father by agents of Defendants. The Court awarded Plaintiff $5 million in compensatory damages against Iran and MOIS, jointly and severally, and $300 million in punitive damages against MOIS. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850(CKK), at 28-29 (D.D.C. Dec. 2, 2002) (memorandum opinion and order approving default judgment and awarding damages). In December 2002, and May 2003, Plaintiff served five writs of attachment seeking to enforce her December 2, 2002 judgment entered by this Court: (1) a December 30, 2002 writ served on the Department of Treasury; (2) a December 30, 2002 writ served on Bank of America; (3) a May 5, 2003 writ served on the Department of Defense; (4) a May 5, 2003 writ served on the Department of State; and (5) a May 5, 2003 writ served on the Department of Treasury. The United States subsequently moved to quash these writs in a series of filings entered in early 2003.

  On March 31, 2004, the Court entered a Memorandum Opinion and Order expressing its belief that the United States's motion to quash all of Plaintiff's writs of attachment should be probably granted because the Court's December 2, 2002 judgment against Iran and MOIS was contrary to the District of Columbia Circuit Court of Appeals decision in Cicippio-Pueleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004). However, in the alternative, the Court conclusively found that sovereign immunity would bar attachment of the First and Second Accounts with the Bank of America and that the Third and Fourth Accounts with the bank were not within the possession or control of the United States and, therefore, not subject to attachment pursuant to Plaintiff's writ against the United States Department of Treasury. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850, at 3 n. 2 (D.D.C. Mar. 31, 2004) (memorandum opinion). The Court, however, did not vacate Plaintiff's judgment, and instead gave Plaintiff an opportunity to submit briefing as to why her judgment should not be vacated. Moreover, the reach of the Court's Order was further limited, as it only specifically addressed one of the five writs issued by Plaintiff. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850 (D.D.C. Mar. 31, 2004) (order directing that "Plaintiff's Writ of Attachment served on the United States Department of Treasury is QUASHED").

  As such, the Court's March 31, 2004 Order merely quashed (#1) the December 30, 2002 writ served on the Treasury Department upon a finding that the attachment was barred because of (1) the United States's sovereign immunity and (2) the fact that certain accounts were not in the possession or control of the United States. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850 (D.D.C. Mar. 31, 2004) (order quashing Dec. 30, 2002, Treasury Department writ). The Court's decision did not rest upon a finding that Cicippio-Puleo compelled the quashing; rather, the Court merely raised the question vis-á-vis the remaining writs and invited briefing on that matter. See id.

  Upon Plaintiff's explicit concession of any claim of attachment to the First and Second Accounts with the Bank of America, this Court issued an Order on January 11, 2005 quashing (#2) the December 30, 2002 writ of attachment served by Plaintiff on garnishee Bank of America, N.A, with respect to the accounts denominated as the "First Account" and "Second Account" in the filings made by the parties and in the Answers to Interrogatories in Attachment filed by the Bank of America. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850 (D.D.C. Jan. 11, 2005) (order partially quashing writs with Bank of America). After some confusion regarding the extent of the Court's January 11, 2005 Order, Plaintiff filed a February 17, 2005 Notice with this Court stating that "she consents to allowing the court to vacate without prejudice the May 5, 2003 writ served upon the Department of State with respect to the `First Account' and `Second Account' in the filings made by the parties and in Answers to Interrogatories in Attachment filed by the Bank of America." Pl.'s Notice at 1. Accordingly, the Court also entered an Order partially quashing (#4) the May 5, 2003 writ of attachment served on the Department of State. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850 (D.D.C. Feb. 22, 2005) (order partially quashing May 5, 2003 writ with the Department of State).

  By the Court's count, after taking into account this flurry of orders and legal briefing, two issues currently remain before it for resolution. First, the Court must resolve the question raised by its March 31, 2004 Order: Should Plaintiff's December 2, 2002 judgment against Iran and the MOIS be vacated in light of subsequent decisions undermining this Court's legal reasoning? Second, the Court must resolve the issue of the remaining writs of attachment not dealt with in its earlier Orders.

  II: DISCUSSION

  Given the two issues ripe for resolution, the Court shall first turn to the potential vacatur of Plaintiff's December 2, 2002 judgment against Iran and the MOIS, and then shall deal with the issue of the outstanding writs of attachment. A. The Possible Vacatur of the December 2, 2002 Judgment

  1. Issues With the December 2, 2002 Final Judgment

  With the clarity of retrospective hindsight, two major problems exist with the legal reasoning contained within the Court's decision to enter judgment in Plaintiff's favor on December 2, 2002. First, consistent with numerous FSIA-related decisions at the time, see, e.g., Elahi v. Islamic Republic of Iran, 124 F. Supp. 2d 97, 114 (D.D.C. 2000); Sutherland v. Islamic Republic of Iran, 151 F.Supp.2d 27, 53 (D.D.C. 2001); Wagner v. Islamic Republic of Iran, 172 F. Supp. 2d 128, 138 (D.D.C. 2001), the Court awarded Plaintiff $300 million in punitive damages against the MOIS. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850(CKK), at 232-9 (D.D.C. Dec. 2, 2002) (concluding that the MOIS fell outside the punitive damages bar against foreign states contained within 28 U.S.C. § 1606). However, in Roeder v. Islamic Republic of Iran, 333 F.3d 228 (D.C. Cir. 2003), issued seven months later, the D.C. Circuit concluded that a similar award of punitive damages was erroneous. See id. at 234-35. The Roeder court set down a categorical approach for determining if an entity should be considered the foreign state itself for the purposes of the Section 1606: "if the core functions of the entity are governmental, it is considered the foreign state itself; if commercial, the entity is an agency or instrumentality of the foreign state." Id. at 234. Pursuant to this categorical test, the D.C. Circuit determined that because the core functions of the MOIS — Iran's Ministry of Foreign Affairs — are "governmental" in nature, the entity must be considered the foreign state of Iran itself rather than its agent. As such, pursuant to the plain language of Section 1606, the MOIS could not be liable for punitive damages in a FSIA-related action. See id. at 234-35. Second, consistent with virtually every FSIA-related decision at that time, the Court assumed that Plaintiff could maintain a cause-of-action against Defendants Iran and the MOIS pursuant to the sovereign immunity exception provided under Section 1605(a)(7), see 28 U.S.C. § 1605(a)(7), and the Flatow Amendment, see 28 U.S.C. § 1605 note. See Rafii v. Islamic Republic of Iran, Civ. No. 01-850(CKK), at 15-17 (D.D.C. Dec. 2, 2002) (assuming a cause-of-action under Section 1605(a)(7) and the Flatow Amendment). Subsequent to the Court's December 2, 2002 entry of judgment in favor of Plaintiff, the D.C. Circuit issued two decisions that ultimately overturned such an assumption: (1) in Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004), the D.C. Circuit specifically held that "neither 28 U.S.C. § 1605(a)(7) nor the Flatow Amendment, nor the two considered in tandem, creates a private right of action against a foreign government," id. at 1033; and (2) in Acree v. Republic of Iraq, 370 F.3d 41 (D.C. Cir. 2004), the D.C. Circuit further held that plaintiffs cannot state a right of action under the "generic common law" or merely "allude[] to the traditional torts . . . in their generic form" but instead must "identify a particular cause of action arising out of a specific source of law," id. at 58-59 (quotation omitted). Subsequent decisions by judges within the United States District Court for the District of Columbia reveal that in FSIA-related cases similar to the one brought by Plaintiff in this case, state common and statutory law alone provide the causes-of-actions for claims by plaintiffs brought pursuant to the jurisdiction provided by Sections 1605(a)(7) and 1606. See, e.g., Holland v. Islamic Republic of Iran, Civ. No. 01-1924 (D.D.C. October __, 2005) (Kotelly, J.); Dammarell v. Islamic Republic of Iran, Civ. No. 01-2224 (JDB), 2005 WL 756090 (D.D.C. Mar. 29, 2005) (Bates, J.) ("Dammarell II"); Salazar v. Islamic Republic of Iran, 370 F. Supp. 2d 105 (D.D.C. 2005) (Bates, J.); Price v. Socialist People's Libyan Arab Jamahiriya, 384 F. Supp. 2d 120 (D.D.C. July 26, 2005) (Lamberth, J.); Wyatt v. Syrian Arab Republic, Civ. No. 01-1628(RMU), ___ F. Supp. 2d ___, 2005 WL 240152 (D.D.C. Sept. 30, 2005) (Urbina, J.).

  2. The Court's Power to Vacate a Final Judgment

  Given that this Court's Findings of Fact and Conclusions of Law entered on December 2, 2002 are premised upon legal reasoning now considered to be faulty, the question becomes: Does the Court have the power, as implied in this Court's March 31, 2004 Order, to vacate Plaintiff's default judgment obtained against Iran and the MOIS? A review of the Federal Rules of Civil ...


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