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Hegna v. Islamic Revolutionary Guard Corps

United States District Court, District of Columbia

December 10, 2012

Edwina R. HEGNA, as Executrix of the Estate of Charles F. Hegna, et al., Plaintiffs,
v.
ISLAMIC REVOLUTIONARY GUARD CORPS, et al., Defendants.

Page 117

Ralph P. Dupont, The Dupont Law Firm, Stamford, CT, for Plaintiffs.

MEMORANDUM OPINION

RUDOLPH CONTRERAS, District Judge.

Charles Hegna was an American passenger on a flight hijacked by Hezbollah terrorists

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in December 1984. The flight was scheduled to proceed from Kuwait City to Karachi by way of Beirut; the terrorists diverted the plane to Tehran, where they murdered Mr. Hegna. His widow and four children brought suit under the terrorism exception to the Foreign Sovereign Immunities Act. The court entered a default judgment against the Islamic Republic of Iran and its Ministry of Information and Security, both of which supported Hezbollah. In 2008, Congress enacted a new terrorism exception and repealed the original version. The Hegnas now bring this second action under that new provision, seeking additional damages for the same injuries at issue in their earlier suit. The statute does not clearly authorize this second suit— and if it did, it would raise a serious question as to whether it violated the Article III prohibition on the legislative revision of final judicial judgments. This court therefore resolves the statutory ambiguity to avoid the constitutional question, holding that the present suit is not authorized by statute, denying the plaintiffs' motion for a default judgment, and dismissing their claims.

I. BACKGROUND

The Foreign Sovereign Immunities Act " grants United States courts both subject matter and personal jurisdiction (where service of process has been made) over any claim against a foreign state as to which the state is not entitled to immunity." World Wide Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d 1154, 1159 n. 5 (D.C.Cir.2002) (citing 28 U.S.C. § 1330(a), (b)).[1] It is " the sole basis for obtaining jurisdiction over a foreign state in our courts." Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434, 109 S.Ct. 683, 102 L.Ed.2d 818 (1989); see also Republic of Austria v. Altmann, 541 U.S. 677, 688-91, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004); Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 486-89, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) (discussing the history of foreign sovereign immunity in U.S. courts and the structure of the Foreign Sovereign Immunities Act). Under the Foreign Sovereign Immunities Act, " foreign states generally are entitled to immunity unless the case falls within one of a list of statutory exceptions." Oveissi v. Islamic Republic of Iran, 573 F.3d 835, 839 (D.C.Cir.2009); see 28 U.S.C. § 1604 (granting immunity); id. §§ 1605, 1065A, 1607 (providing exceptions). When the Act was signed in 1976, Pub.L. No. 94-583, 90 Stat. 2891 (codified at 28 U.S.C. §§ 1330, 1332, 1391, 1441, 1602-11 (1976)), the exceptions included " cases in which the state has waived its immunity, 28 U.S.C. § 1605(a)(1), cases based upon various forms of commercial activity, id. § 1605(a)(2), takings of property in violation of international law, id. § 1605(a)(3), and torts committed in the United States, id. § 1605(a)(5)," Price, 294 F.3d at 87 (citation expanded); see also Central Bank of Nigeria, 461 U.S. at 489 n. 11, 103 S.Ct. 1962 (listing other exceptions). The Act allowed for compensatory— but not punitive— damages to be levied against foreign states. 28 U.S.C. § 1606 (1976). " [A]n agency or instrumentality" of a state could,

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however, be held liable for punitive damages. Id.

In 1996, as part of the Antiterrorism and Effective Death Penalty Act, Pub.L. No. 104-132, § 221(a), 110 Stat. 1214, Congress added " an additional exception colloquially known as the ‘ terrorism exception,’ " Kilburn v. Socialist People's Libyan Arab Jamahiriya, 376 F.3d 1123, 1126 (D.C.Cir.2004), which withdrew immunity for certain foreign states in cases

in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources ... for such an act if such act or provision of material support is engaged in by an official, employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency....

28 U.S.C. § 1605(a)(7) (Supp. II 1996). " This exception applie[d] only if three additional criteria [were] also satisfied: the foreign state was designated a ‘ state sponsor of terrorism’ at the time the act occurred; the foreign state was given a reasonable opportunity to arbitrate a claim regarding an act that occurred within the state's borders; and the claimant or victim was a national of the United States." Kilburn, 376 F.3d at 1126-27 (citing 28 U.S.C. § 1605(a)(7)(A), (B)). When the terrorism exception was enacted, " it was far from clear whether ... § 1605(a)(7), in and of itself, served as a basis for an independent federal cause of action against foreign state sponsors of terrorism." In re Islamic Republic of Iran Terrorism Litig., 659 F.Supp.2d 31, 42 (D.D.C.2009). " [Q]uestions remained ... whether any civil claims or money damages were available by virtue of that enactment." Id. at 43.

" Five months after the passage of [the terrorism exception], Congress enacted a separate provision, titled Civil Liability for Acts of State Sponsored Terrorism, which created a private right of action against officials, employees, and agents of foreign states for the conduct described in § 1605(a)(7)." Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024, 1029 (D.C.Cir.2004) (citing Omnibus Consolidated Appropriations Act of 1997, Pub.L. No. 104-208, Div. A, Title I, § 101(c) [Title V, § 589], 110 Stat. 3009-172 (codified at 28 U.S.C. § 1605 note)). That provision is known as the " Flatow Amendment," in memory of Alisa Flatow, an American college student who died from the injuries she suffered in a terrorist bombing in Israel. Id.; In re Terrorism Litig., 659 F.Supp.2d at 43. The Flatow Amendment provides that:

[A]n official, employee, or agent of a foreign state designated as a state sponsor of terrorism ... while acting within the scope of his or her office, employment, or agency shall be liable to a United States national or the national's legal representative for personal injury or death caused by acts of that official, employee, or agent for which the courts of the United States may maintain jurisdiction under section 1605(a)(7) of title 28, United States Code for money damages which may include economic damages, solatium, pain, and suffering, and punitive damages if the acts were among those described in section 1605(a)(7).

28 U.S.C. § 1605 note (Supp. II 1996) (emphasis added). Upon its enactment, it was " undisputed that the Flatow Amendment permit[ted] U.S. nationals to pursue a private right of action for terrorism against officials, employees, and agents of designated foreign states acting in their personal capacities." Cicippio-Puleo, 353 F.3d at 1029. It was an open question, however,

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" whether section 1605(a)(7) and the Flatow Amendment similarly provide[d] a cause of action against a foreign state." Id. (emphasis deleted).

Most judges in this district answered that question in the affirmative. Regier v. Islamic Republic of Iran, 281 F.Supp.2d 87, 99 (D.D.C.2003) (Bates, J.) (holding, on the basis of § 1607(a)(7) and the Flatow Amendment, that " plaintiffs have a cause of action against Iran" ); Kilburn v. Republic of Iran, 277 F.Supp.2d 24, 37 (D.D.C.2003) (Urbina, J.) (holding that " the Flatow Amendment does provide victims of state-sponsored acts of terrorism with a cause of action against the culpable foreign state" ); Acree v. Republic of Iraq, 271 F.Supp.2d 179, 215 (D.D.C.2003) (Roberts, J.) (" Section 1605(a)(7), as amended [by the Flatow Amendment], creates a federal cause of action against ... the state and its instrumentalities themselves." ); Surette v. Islamic Republic of Iran, 231 F.Supp.2d 260, 267 (D.D.C.2002) (Friedman, J.); Mousa v. Islamic Republic of Iran, 238 F.Supp.2d 1, 11 (D.D.C.2001) (Bryant, J.) (" Under the [Foreign Sovereign Immunities Act], a foreign state may be liable when there is injury from a terrorist act that was perpetrated by the designated state or an agent receiving material support from the designated state" and other conditions are met.); Daliberti v. Republic of Iraq, 146 F.Supp.2d 19, 25 (D.D.C.2001) (Oberdorfer, J.) (finding cause of action against Iraq under the Flatow Amendment); Elahi v. Islamic Republic of Iran, 124 F.Supp.2d 97, 106 (D.D.C.2000) (Green, J.H., J.) (holding that the Flatow Amendment " provides a cause of action against a foreign state ... for any act which would give a court jurisdiction under 28 U.S.C. § 1607(a)(7)" ); Higgins v. Islamic Republic of Iran, 2000 WL 33674311, at *7 (D.D.C. Sept. 21, 2000) (Kollar-Kotelly, J.); Anderson v. Islamic Republic of Iran, 90 F.Supp.2d 107, 113 (D.D.C.2000) (Jackson, J.) (" Section 1605(a)(7) of the Foreign Sovereign Immunities Act ... provides a cause of action against a foreign state...." ); Flatow v. Islamic Republic of Iran, 999 F.Supp. 1, 12-15 (D.D.C.1998) (Lamberth, J.) (finding a federal cause of action against Iran under § 1607(a)(7) and the Flatow Amendment, construed in pari materia ).

Another judge disagreed. In Roeder v. Islamic Republic of Iran, 195 F.Supp.2d 140 (D.D.C.2002), former hostages taken from the American Embassy in Tehran during the Iranian Revolution and held for more than a year brought suit against Iran under the Foreign Sovereign Immunities Act. The hostages had been released after the United States reached an executive agreement known as the Algiers Accords with the Islamic Republic of Iran. As part of the Algiers Accords, the United States committed to bar its courts from hearing any claims arising out of the seizure and detention of the Roeder plaintiffs. That commitment was implemented by executive order and Treasury regulation. Roeder, 195 F.Supp.2d at 146-48. The question in Roeder was whether § 1605(a)(7) and the Flatow Amendment had abrogated the Algiers Accords by authorizing the plaintiffs' suit against Iran. The Hon. Emmet G. Sullivan ruled that they had not, noting that " the Flatow Amendment does not on its face create a cause of action against foreign states," id. at 172, but rather " speaks only of a suit against individuals," and moreover that " nothing in the elements of § 1605(a)(7) requires or permits a cause of action against a foreign state," id. at 173. Judge Sullivan held that because the Flatow Amendment was " at best ambiguous with respect to whether plaintiffs can sue Iran," id. at 175, and " [i]n light of Congress'[s] failure to express a clear intent to abrogate the Algiers Accords, this Court can not interpret these

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ambiguous statutes to create a cause of action for plaintiffs against Iran," id. at 184.

In 2000, the plaintiffs in this case brought suit against the Islamic Republic of Iran and its Ministry of Information and Security. The defendants did not appear. After a bench trial during which he heard evidence regarding the plaintiffs' claims, the Hon. Henry H. Kennedy, Jr. found both Iran and its Ministry liable for the suffering of Charles Hegna, his widow, and their four children as a result of Mr. Hegna's 1984 murder by hijackers associated with Hezbollah. Judge Kennedy held that " [b]ecause Charles Hegna was falsely imprisoned, brutally assaulted, and tortured by those engaged in state sponsored terrorism and his death was caused by a willful and deliberate act of extrajudicial killing, plaintiffs have a cause of action under 28 U.S.C. § 1605(a)(7) and 28 U.S.C.A. § 1605 note." Memorandum at 14-15, Hegna v. Islamic Republic of Iran, No. 00-cv-716 (D.D.C. Jan. 22, 2002) (" Hegna I " ). He entered judgment in favor of the plaintiffs, finding the defendants jointly liable for $42 million in compensatory damages, and the Iranian Ministry of Information and Security solely liable for $333 million in punitive damages. Amended Judgment, Hegna v. Islamic Republic of Iran, No. 00-cv-716 (D.D.C. Feb. 1, 2002). The judgment was not appealed.

In 2004, the D.C. Circuit finally resolved the question of whether 28 U.S.C. § 1605(a)(7) and the Flatow Amendment, id. at § 1605 note, provided a cause of action against foreign states. In Cicippio-Puleo v. Islamic Republic of Iran, the Circuit held that they did not, concluding 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." 353 F.3d at 1033. Rather, as the Circuit explained, " [s]ection 1605(a)(7) merely waives the immunity of a foreign state without creating a cause of action against it, and the Flatow Amendment only provides a private right of action against officials, employees, and agents of a foreign state, not against the foreign state itself." Id. Moreover, that cause of action was " limited to claims against those officials in their individual, as opposed to their official, capacities," because an official-capacity suit is essentially a suit against the government itself, and the Flatow Amendment did not provide a cause of action against foreign states. Id. at 1034. Plaintiffs who wished to bring suit against a foreign state under the jurisdiction permitted by § 1605(a)(7) would need " to state a cause of action under some other source of law, including state law." Id. at 1036.

" As a result of the Cicippio-Puleo decision, plaintiffs in ... terrorism cases under § 1605(a)(7) began to use that provision as a ‘ pass-through’ to causes of action[ ] found in state tort law." In re Terrorism Litig., 659 F.Supp.2d at 46 (quoting Bodoff v. Islamic Republic of Iran, 424 F.Supp.2d 74, 83 (D.D.C.2006)). Many plaintiffs were " able to litigate claims based on the tort law of the state jurisdiction where they were domiciled at the time of the terrorist incident giving rise to the lawsuit." Id. But others " had their claims denied because they were domiciled in jurisdictions that did not afford them a substantive claim." Id. at 47 (describing cases). After Cicippio-Puleo, it was also clear that punitive damages could not be levied against state sponsors of terrorism. Because the Flatow Amendment " was not intended to provide for claims against foreign states, the bar on punitive damages in [28 U.S.C.] § 1606 of the Foreign Sovereign Immunities Act remained [intact], even with respect

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to state sponsors of terrorism." Id. at 48 (abbreviation expanded).

Congress repealed § 1605(a)(7) in 2008 and replaced it with a new terrorism exception, codified at 28 U.S.C. § 1605A. See National Defense Appropriations Act for Fiscal Year 2008, Pub.L. No. 110-181, § 1083, 122 Stat. 3, 338-44. That exception " creat[ed] a federal right of action against foreign states, for which punitive damages may be awarded," and thereby abrogated Cicippio-Puleo. Simon v. Republic of Iraq, 529 F.3d 1187, 1190 (D.C.Cir.2008) (citing 28 U.S.C. § 1605A(c)). It also authorized compensation for special masters, see 28 U.S.C. § 1605A(e), and provided plaintiffs with the right to file notices of lis pendens, id. at § 1605A(d), which " are in effect automatic prejudgment liens on property belonging to a designated state sponsor of terrorism," In re Terrorism Litig., 659 F.Supp.2d at 62. Section 1083(a) of the 2008 amendments set out this new terrorism exception, while § 1083(b) repealed 28 U.S.C. § 1605(a)(7) and made other conforming amendments. Section 1083(c), which gave rise to this suit, provides in relevant part as follows:

(c) APPLICATION TO PENDING CASES.—
(1) IN GENERAL.— The amendments made by this section shall apply to any claim arising under section 1605A of title 28, United States Code.
(2) PRIOR ACTIONS.—
(A) IN GENERAL.— With respect to any action that—
(i) was brought under section 1605(a)(7) of title 28, United States Code, or [the Flatow Amendment] before the date of enactment of this Act,
(ii) relied upon either such provision as creating a cause of action,
(iii) has been adversely affected on the grounds that either or both of these provisions fail to create a cause of ...

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