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Estate of Heiser v. Islamic Republic of Iran

September 30, 2009

ESTATE OF MICHAEL HEISER, ET AL., PLAINTIFFS,
v.
ISLAMIC REPUBLIC OF IRAN, ET AL., DEFENDANTS.
ESTATE OF MILLARD D. CAMPBELL, ET AL., PLAINTIFFS,
v.
ISLAMIC REPUBLIC OF IRAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth Chief Judge United States District Court Washington, D.C.

MEMORANDUM OPINION

These postjudgment consolidated actions arise from the 1996 terrorist bombing of the Khobar Towers, a residential complex on a United States military base in Dhahran, Saudi Arabia. See Heiser v. Islamic Republic of Iran, 466 F. Supp. 2d 229 (D.D.C. 2006) (Lamberth, J.). The plaintiffs are the family members and estates of 17 of the 19 United States Air Force officers and airmen killed in the attack. The defendants are the Islamic Republic of Iran ("Iran"), the Iranian Ministry of Information and Security (MOIS), and the Iranian Islamic Revolutionary Guard Corps (IRGC). These cases were filed in September 2000 and October 2001, respectively, under the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act (FSIA) and the Flatow Amendment. See Mandatory Victims Restitution Act of 1996, Pub. L. No. 104-132, tit. II, sec. 221(a)(1)(C), § 7, 110 Stat. 1214, 1241 (former FSIA terrorism exception previously codified at 28 U.S.C. § 1605(a)(7)), repealed by National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 1083(b)(1)(A)(iii), 122 Stat. 3, 338, (hereinafter 2008 NDAA); see also § 1605 note.

While these cases were still pending, the D.C. Circuit Court of Appeals issued an opinion in Cicippio-Puleo v. Islamic Republic of Iran in which the Court held that "neither section 1605(a)(7) nor the Flatow Amendment, separately or together, establishes a cause of action against foreign state sponsors of terrorism." 353 F.3d 1024, 1027 (D.C. Cir. 2004); accord Acree v. Republic of Iraq, 370 F.3d 41, 58 (D.C. Cir. 2004). Following that ruling, this Court determined that plaintiffs in cases under the FSIA terrorism exception, § 1605(a)(7), may use that provision as a "pass-through" to causes of action found in state law. See, e.g., Bodoff v. Islamic Republic of Iran, 424 F. Supp. 2d 74, 83 (D.D.C. 2006) (Lamberth, J.). Another consequence of the Cicippio-Puleo decision was that the Flatow Amendment, § 1605 note, could not itself serve as a basis punitive damages awards against Iran. Because the Court of Appeals found that the amendment was not intended to provide for claims against foreign states, see id. at 1027, the bar on punitive damages in § 1606 of the FSIA remained, even against state sponsors of terrorism.

Following Cicippio-Puleo, plaintiffs filed an amended complaint in which they made claims based on the state law of the jurisdictions where they were domiciled at the time of the Khobar Towers attack. See 466 F. Supp. 2d 250-251. This Court ultimately found that most plaintiffs had proven their right to relief in accordance with the applicable sources of state law, and, on December 22, 2006, this Court entered Default Judgment in favor of most Plaintiffs, awarding economic and compensatory damages totaling $254,431,903.00. 466 F. Supp. 2d at 356-360. Certain sources of state law, however, either precluded a number of estates and individual plaintiffs from presenting valid claims or otherwise limited the relief available to those plaintiffs. Additionally, the Court was not able to award punitive damages.

A little over a year later, the President signed the 2008 NDAA, which repealed § 1605(a)(7) and replaced that provision with a new version of the terrorism exception, § 1605A. See Pub. L. No. 110-181, § 1083, 122 Stat. 3, 338. While this new FSIA enactment is more advantageous to plaintiffs in many significant respects, what is most important for the purpose of today's decision is that § 1605A abrogates Cicippio-Puleo by establishing a federal cause of action against state sponsors of terrorism and provides that punitive damages may be awarded in those actions. See 1605A(c); see also Simon v. Republic of Iraq, 529 F.3d 1187, 1190 (D.C. Cir. 2008), rev'd sub nom. on other grounds, Republic of Iraq v. Beaty, 129 S.Ct. 2138 (2009). Thus, plaintiffs proceeding under § 1605A can forgo the pass-through approach that controlled in the wake of Cicippio-Puleo and may assert claims on the basis of the new federal statute alone.

Notably, Congress directed that this new terrorism exception, § 1605A, may be applied retroactively to a broad range of cases, provided certain conditions are satisfied. See § 1083(c). In March 2008, plaintiffs filed a Motion for Supplemental Relief in which they requested that this Court apply § 1605A retroactively to their actions and award additional damages, including 650 million dollars in punitive damages, against Iran. See Dk. # 127. On March 13, 2009, this Court determined that plaintiffs' actions satisfied the conditions for retroactive application of § 1605A and issued an order indicating that plaintiffs were entitled to proceed before this Court under the terms of the new law.*fn1 See Dk. # 143. At that time, however, the Court did not determine what additional damages the plaintiffs were entitled to under the new terrorism exception, § 1605A, but took the matter under advisement, intending to take a closer look at the evidence and supplemental briefing in support of plaintiffs' new claims for money damages under federal law. Having reviewed the record in light of plaintiffs' arguments for additional relief under the terms of § 1605A, this Court now finds in favor of plaintiffs on all claims.

I. ANALYSIS

Because § 1605A abrogates Cicippio-Puleo by creating a federal cause of action with punitive damages, this Court returns to this Circuit's pre-2004 interpretation of the terrorism exception. Of course, as a result, the Court must again consider the complicated question of what principles of law it should apply to these claims sounding in tort. On the one hand, because these actions arise solely from statutory rights, they are not in theory matters of "federal common law." Yet, because federal courts must evaluate the extent and nature of the claims in these actions, courts are forced, in practice, to apply general principles of tort law-an approach that in effect looks no different from one that explicitly applies federal common law. The Court of Appeals addressed this difficulty in Bettis v. Islamic Republic of Iran:

We recognize that some of the cases addressing these FSIA claims refer to "federal common law...." The term "federal common law" seems to us to be a misnomer. Indeed, it is a mistake, we think, to label actions under the FSIA and Flatow Amendment for solatium damages as "federal common law" cases, for these actions are based on statutory rights.... Rather,... because the FSIA instructs that "the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances," 28 U.S.C. § 1606, it in effect instructs federal judges to find the relevant law, not to make it. 315 F.3d 325, 333 (D.C. Cir. 2003). To this end, courts have often looked to sources such as state decisional law, legal treatises, or the Restatements in order to find and apply what are generally considered to be the well-established standards of state common law, a method of evaluation which mirrors-but is distinct from-the "federal common law" approach.

That the Court must proceed in this manner is necessary for several reasons. First, in establishing both subject-matter jurisdiction and federal causes of action for personal injury or death resulting from state-sponsored terrorism, Congress intended that the terrorism exception authorize "federal courts [to] create coherent national standards to support this initiative of national significance," Flatow v. Islamic Republic of Iran, 999 F. Supp. 1, 15 (D.D.C. 1998) (Lamberth, J.)-a purpose which, following Cicippio-Puleo, Congress made more explicit in the 2008 NDAA. Second, because courts have an "interest [in] promoting uniformity of determinations with respect to the liability of foreign states for the terrorist acts of its officials, agents, and employees," the generally accepted legal standards of the states provide the only steady foundation for the rules of decision. Id. While applying these common-law standards, however, the Court also keeps in mind the remedial purpose of the terrorism exception statute- namely, to compensate victims for the losses suffered as a result of state-sponsored terrorism.

Flatow, 999 F. Supp. at 13. Yet, as the Court of Appeals noted in Bettis, "this fact is not a license for judges to legislate from the bench," for "[a]s much as we sympathize with appellants' claims, we have no authority to stretch the law beyond its clear bounds to satisfy our sense of justice." 315 F.3d at 338, 336.

Mindful of these considerations, this Court will now address the three categories of economic and compensatory damage claims that, in the original action, were either barred or severely restricted as a result of the pre-2008 NDAA application of state law of each plaintiff's domicile: (A) those barred or limited by state minimum-age, surviving-spouse-or-lineal-descendant, or sibling-financial-dependency requirements, (B) those barred by state "presence" requirements, and (C) those barred by state "immediate family" rules. Finally, the court will consider the plaintiffs' request for an award of punitive damages.

A. PLAINTIFFS NEGATIVELY AFFECTED BY STATE MINIMUM-AGE, SURVIVING-SPOUSE-OR-LINEAL-DESCENDANTS, AND SIBLING-FINANCIAL-DEPENDENCY REQUIREMENTS

In its original Heiser opinion, this Court denied certain plaintiffs' request for economic damages in the form of lost wages and future earnings, because, under the state law of the victims' domicile when the attack occurred (Florida), the estates of decedents younger than 25 years of age and without a surviving spouse or surviving lineal descendants cannot recover. 466 F. Supp. 2d at 278 (citing Fla. Stat. Ann. § 768.21(6)(a)(1)).*fn2 Additionally, the Court limited recovery for another plaintiff, because he had failed, under New Hampshire law, to prove financial dependency on the decedent, his brother. These plaintiffs now rest their claims on the 2008 NDAA, which provides a federal cause of action for wrongful death. Therefore, this Court will now consider their request for economic damages in ...


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