Bennett v. Islamic Republic of Iran , 618 F.3d 19 ( 2010 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 15, 2010 Decided September 10, 2010
No. 09-5147
MICHAEL BENNETT AND LINDA BENNETT, INDIVIDUALLY AND
AS CO-ADMINISTRATORS OF THE ESTATE OF MARLA ANN
BENNETT, DECEASED,
APPELLANTS
v.
ISLAMIC REPUBLIC OF IRAN, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:03-cv-01486-RCL)
John Vail argued the cause for appellants. With him on
the briefs was Thomas Fortune Fay.
Samantha L. Chaifetz, Attorney, U.S. Department of
Justice, argued the cause for appellees. With her on the brief
was Douglas N. Letter, Attorney. R. Craig Lawrence,
Assistant U.S. Attorney, entered an appearance.
Before: ROGERS, GARLAND and GRIFFITH, Circuit
Judges.
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Opinion for the Court filed by Circuit Judge GRIFFITH.
Opinion concurring in the judgment filed by Circuit
Judge GARLAND.
GRIFFITH, Circuit Judge: To satisfy a default judgment
against the Islamic Republic of Iran and the Iranian Ministry
of Information and Security, Michael and Linda Bennett
obtained writs of attachment against five of Iran’s former
diplomatic properties located in the District of Columbia. The
United States moved to quash the writs on the ground that
section 201 of the Terrorism Risk Insurance Act precluded the
attachments. The district court granted the government’s
motion, and we affirm.
I.
The Bennetts’ daughter, Marla Ann, was a student at
Hebrew University in Jerusalem when a bombing at the
school took her life. Hamas claimed responsibility for the
murder. The Bennetts sued in the district court alleging that
Iran’s support for Hamas played a part in the bombing that
killed their daughter. The Bennetts won a default judgment
against Iran in excess of $12 million. Bennett v. Islamic
Republic of Iran, 507 F. Supp. 2d 117 (D.D.C. 2007).
To satisfy the judgment, the Bennetts obtained writs of
attachment against Iran’s former embassy, ambassador’s
residence, and another diplomatic residence, as well as two
parking lots. The United States has been the custodian of
these properties since April 7, 1980, when it cut diplomatic
ties with Iran in response to the take-over of the American
Embassy in Tehran. See U.S. Dep’t of State Office of the
Legal Adviser, Digest of United States Practice in
International Law 1980, at 40–41, 333–34; see also Exec.
3
Order No. 12,170, 3 C.F.R. 457 (1980) (freezing Iranian
assets in the United States). The United States has held Iran’s
diplomatic and consular properties for the past thirty years
pursuant to Article 45 of the Vienna Convention on
Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3227, 500
U.N.T.S. 95, which requires signatory states to “respect and
protect” the premises and property of a mission if diplomatic
relations are severed or a mission is recalled, and the Foreign
Missions Act, 22 U.S.C. § 4305(c)(1) (2006), which
authorizes the Secretary of State to “protect and preserve” the
property of a foreign mission that has ceased conducting
diplomatic activities in the United States.
The United States appeared in the post-judgment
proceeding and moved to quash the writs on the ground that
the properties were not subject to attachment. The district
court granted the government’s motion. Bennett v. Islamic
Republic of Iran, No. 03-1486 (D.D.C. Mar. 31, 2009). The
Bennetts appealed, and we have jurisdiction pursuant to 28
U.S.C. § 1291. Whether the properties are subject to
attachment is a question of law that we review de novo. See
Price v. Socialist People’s Libyan Arab Jamahiriya, 389 F.3d
192, 197 (D.C. Cir. 2004).
II.
Diplomatic properties are generally immune from
attachment. See 28 U.S.C. §§ 1609–1610. The Terrorism Risk
Insurance Act (TRIA) carves out an exception to this general
rule, authorizing the attachment of “blocked assets” of state
sponsors of terrorism to satisfy judgments for compensatory
damages for acts of terrorism. Pub. L. No. 107-297, § 201(a),
116 Stat. 2322, 2337 (2002) (codified at 28 U.S.C. § 1610note). TRIA defines blocked assets as those “seized or frozen
by the United States” for certain foreign policy purposes. See
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id. § 201(d)(2)(A). Blocked assets do not include, however,
“property subject to the Vienna Convention on Diplomatic
Relations” * that “is being used exclusively for diplomatic or
consular purposes.” Id. § 201(d)(2)(B)(ii). Such property may
not be attached.
The government and the Bennetts agree that the
properties subject to the writs are seized assets belonging to a
state sponsor of terrorism and that their attachment would
satisfy a judgment for compensatory damages for an act of
terrorism. It is contested, however, whether the properties are
subject to the Vienna Convention on Diplomatic Relations
and “[are] being used exclusively for diplomatic or consular
purposes.” TRIA § 201(d)(2)(B)(ii). The Bennetts concede
that all the properties except the diplomatic residence are
subject to the Vienna Convention. They have forfeited the
argument that the residence is not because they raised it for
the first time on appeal. See Potter v. District of Columbia,
558 F.3d 542, 547 (D.C. Cir. 2009). That leaves us with only
the question of whether the properties are “being used
exclusively for diplomatic or consular purposes.” TRIA
§ 201(d)(2)(B)(ii).
The United States claims that it has held the attached
properties in custody since 1980 to fulfill its obligations under
Article 45 of the Vienna Convention to “respect and protect”
the premises of a former mission after diplomatic relations
between two states have been severed, as well as the Foreign
Missions Act. See Decl. of Claude J. Nebel, Deputy Assistant
*
TRIA defines “property subject to the Vienna Convention on
Diplomatic Relations” as property for which “the attachment in aid
of execution or execution of which would result in a violation of an
obligation of the United States under [the] Vienna Convention.”
TRIA § 201(d)(3).
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Sec’y for Diplomatic Sec. & Deputy Dir. of the Office of
Foreign Missions, July 11, 2008, ¶ 10. On March 10, 1983,
the United States announced that it would rent out Iran’s
diplomatic properties periodically to generate income to pay
for the upkeep required by the Vienna Convention. Id. ¶ 11.
Since then, the United States has at times rented Iran’s
properties to other foreign missions and to private parties and
used the proceeds to maintain and repair the properties
consistent with its treaty obligations. Any excess income from
the rentals has been placed in an Iranian bank account that,
like all Iranian assets in America, has been frozen by the
United States. Id. ¶ 12.
There is no dispute that the United States has used these
properties for a diplomatic purpose. The Bennetts have
conceded this point. Appellants’ Br. at 16. According to the
government, that concession resolves the dispute because the
sole inquiry under the statute is the purpose for which the
United States uses the properties. The Bennetts insist that the
statute requires us to look at the nature of the use as well.
“Statutory construction must begin with the language
employed by Congress and the assumption that the ordinary
meaning of that language accurately expresses the legislative
purpose.” Engine Mfrs. Ass’n v. South Coast Air Quality
Management Dist., 541 U.S. 246, 252 (2004). The Bennetts
contend that renting the properties to third parties is a
nondiplomatic use, which makes the properties subject to
attachment. Their argument assumes that TRIA’s protection
from attachment requires a diplomatic use of the property.
That requirement finds no support in the text of the statute,
which provides only that the property “is being used
exclusively for diplomatic and consular purposes.” TRIA
§ 201(d)(2)(B)(ii) (emphasis added). The adjectives
“diplomatic” and “consular” modify the noun “purpose,” not
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the verb “used.” We read the verb phrase “is being used . . .
for” to carry its ordinary meaning of “ma[de] instrumental to
an end or process.” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 2524 (Philip Babcock Gove ed., Merriam-
Webster Inc. 1981). The statute provides that the property
retains its immunity from attachment only so long as it “is
being used exclusively for diplomatic and consular purposes.”
TRIA § 201(d)(2)(B)(ii). The Bennetts cite several cases from
our sister circuits interpreting what they consider to be
analogous portions of the Foreign Sovereign Immunities Act,
28 U.S.C. § 1602–11. See, e.g., Conn. Bank of Commerce v.
Republic of Congo, 308 F.3d 240, 251–52 (5th Cir. 2002)
(interpreting a provision permitting attachment of property
“used for a commercial activity”); Joseph v. Office of the
Consulate General of Nigeria, 830 F.2d 1018, 1024 (9th Cir.
1987) (construing the commercial activity exception to
foreign sovereign immunity, which “focus[es] on the nature
of the transaction at issue rather than its purpose”). But unlike
the provisions at issue in those cases, TRIA, by its plain
language, is concerned only with the purpose for which the
property is used, and not the way the property is used in
service of that end.
The Bennetts argue that our reading of section
201(d)(2)(B)(ii) is mistaken because it fails to take into
account section 201(b)(2)(A) of TRIA, which creates another
means to protect from attachment properties subject to the
Vienna Conventions. Section 201(b)(2)(A) authorizes the
President to immunize such properties from attachment so
long as they have not “been used by the United States for any
nondiplomatic purpose (including use as rental property).”
TRIA § 201(b)(2)(A). The parenthetical phrase, the Bennetts
argue, establishes that any “use” of a seized asset “as a rental
property” invariably has a nondiplomatic purpose. Not only is
that not true as a descriptive matter, but that view of the
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provision cannot be squared with its plain meaning, which
calls for an inquiry into the purpose of the use and not the
type of use—the same inquiry required by section
201(d)(2)(B)(ii). Far from announcing a categorical rule that
any “use as a rental” is in pursuit of a “nondiplomatic
purpose,” the parenthetical simply acknowledges that the
government may have a nondiplomatic purpose for renting the
property.
We are equally unpersuaded by the Bennetts’ argument
that our interpretation of section 201(d)(2)(B)(ii) renders this
provision superfluous because it duplicates protection already
found in the Foreign Missions Act. Unlike two provisions
within a single statute, we need not construe separate statutes
to avoid redundancy. Cf. U.S. ex rel Miller v. Bill Harbert
Intern. Const., Inc., 608 F.3d 871, 885-86 (D.C. Cir. 2010)
(regarding as effective overlapping statutes capable of
coexistence). In any event, these statutes are not duplicative.
To be sure, the Foreign Missions Act prohibits attachment of
foreign mission property in custody of the State Department.
See 22 U.S.C. § 4308(f). But the Foreign Missions Act does
not apply to property subject to TRIA. See TRIA § 201(a)
(providing a mechanism for the attachment of various assets
“[n]otwithstanding any other provision of law”); cf. Weinstein
v. Islamic Republic of Iran, 609 F.3d 43, 48 (2d Cir. 2010)
(concluding that TRIA’s use of the phrase “notwithstanding
any other provision of law” demonstrates a clear intent to
abrogate previous, conflicting law). Thus, section
201(d)(2)(B)(ii) is not duplicative, but creates a protection
from attachment that would not otherwise exist.
Finally, we note that it may very well be that the private
parties who rented the properties did so in service of
nondiplomatic ends. But their purposes are irrelevant to the
protection Congress provided for these properties. TRIA says
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nothing about the purpose anyone other than the United States
might have in its use of the properties. “Blocked assets” are
assets “seized or frozen by the United States.” TRIA
§ 201(d)(2)(A) (emphasis added). Because TRIA’s provisions
apply only to property possessed by the United States, we
think the statute clearly commands that the purpose of the
United States is the only relevant inquiry.
Our concurring colleague finds the statute ambiguous on
this point, and concludes that the use to which a private tenant
puts a former diplomatic property may render it subject to
attachment under TRIA. Concurring Op. at 2-3. But if there
were such ambiguity, we would still conclude that attachment
is precluded in light of the fundamental canon of statutory
interpretation that “[a] treaty will not be deemed to have been
abrogated or modified by a later statute unless such purpose
on the part of Congress has been clearly expressed.” Cook v.
United States, 288 U.S. 102, 120 (1933); see Roeder v.
Islamic Republic of Iran, 333 F.3d 228, 237 (D.C. Cir. 2003).
Congress, in defining the terrorist state property available for
attachment, explicitly carved out an exception to enable the
United States to fulfill its treaty obligations under the Vienna
Convention. TRIA § 201(d)(2)(B)(ii). In this case, permitting
attachment would render the United States unable to respect
and protect Iran’s former diplomatic properties as required by
Article 45 of the Vienna Convention. We do not think
Congress intended to construct such obstacles to the
performance of the nation’s obligations under the Vienna
Convention.
Because there is no question that the sole purpose for
which the United States rented the properties was to facilitate
compliance with its treaty obligations under the Vienna
Convention, the properties are not subject to attachment under
TRIA. As the Fifth Circuit has explained, “by using rental
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proceeds to carry out routine maintenance, the government
‘respect[s] and protect[s]’ the property presumably for the
time when the two countries might resume diplomatic and
consular relations.” Hegna v. Islamic Republic of Iran, 376
F.3d 485, 495 (5th Cir. 2004). Collecting rent on a property in
order to ensure the upkeep required by the Vienna Convention
does not permit its attachment under TRIA.
III.
The judgment is
Affirmed.
GARLAND, Circuit Judge, concurring in the judgment: The
Terrorism Risk Insurance Act (TRIA) authorizes the attachment
of “blocked assets” of state sponsors of terrorism to satisfy
judgments won by victims of terrorist acts. TRIA § 201(a).
Section 201(d) of TRIA provides that attachable blocked assets
do not include former diplomatic property that “is being used
exclusively for diplomatic or consular purposes.” Id.
§ 201(d)(2)(B)(ii). I agree with my colleagues that property the
State Department leases to another foreign mission is immune
from attachment because it is property that is being used
exclusively for diplomatic purposes. But I cannot agree that
property the Department leases to a private party -- which that
party then uses for its own private purposes -- is property that is
being used exclusively for diplomatic purposes.
I concede that congressional drafting has not made our task
easy. The difficulty arises because the section is written in the
passive voice -- referring to property that “is being used
exclusively” -- which leaves unanswered the question: being
used by whom? My colleagues conclude that the section refers
solely to use by the United States. They therefore hold that the
tenant’s use of the property is irrelevant as long as the State
Department’s only purpose in renting it is to generate revenue
to comply with its Vienna Convention obligations.
This reading is reasonable, but I do not think it is the better
interpretation. No one would say that property a tenant uses as
a gin joint is being used exclusively for educational purposes,
even if the landlord uses the rent to send his children to college.
Nor is the court’s reading supported by the fact that TRIA
applies only to property “seized or frozen by the United States.”
TRIA § 201(d)(2)(A) (emphasis added). The italicized phrase
tells us which actor’s seizure is relevant, but it does not tell us
which actor’s use is. Indeed, the fact that Congress added “by
the United States” to the description of the seizure of property
in § 201(d)(2)(A), but not to the description of the use of
property in § 201(d)(2)(B), suggests it thought that the uses to
2
which both the United States and its tenant put a property were
relevant.
This inference is further supported by the waiver provision
of TRIA, which authorizes the President to prevent the
attachment of blocked assets on a case-by-case basis, unless the
property “has been used by the United States for any
nondiplomatic purpose.” Id. § 201(b)(2)(A) (emphasis added).
As is clear from that provision, Congress plainly knew how to
specify use by the United States when that was the use it
regarded as relevant. And “where Congress includes particular
language in one section of a statute but omits it in another
section of the same Act, it is generally presumed that Congress
acts intentionally and purposefully in the disparate inclusion or
exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983)
(internal quotation marks omitted).
A final problem with the court’s reading is that it reduces
Congress’ purpose to one of financial accounting, rather than to
making assets available for the victims of terrorist attacks. That
is the necessary consequence of focusing on how the United
States uses the rent, rather than on how the tenant uses the
property. In the court’s view, rental property remains immune
as long as the State Department applies the rent to maintenance
expenses, but it becomes available for attachment if the
Department returns the rent to the Treasury and uses
appropriated funds to pay for maintenance. Even if Congress
were concerned about how the Department keeps its books, it is
hard to see why it would address this concern in a section
entitled, “Satisfaction of Judgments from Blocked Assets of
Terrorists.” TRIA § 201.
For these reasons, I conclude that former diplomatic
property that a private tenant uses for nondiplomatic purposes is
not immune from attachment under TRIA § 201(d) as property
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that “is being used exclusively for diplomatic or consular
purposes.” Id. § 201(d)(2)(B)(ii).
But this conclusion does not end the analysis. The
remaining question is whether the property at issue here “is
being” used exclusively for diplomatic purposes. Although it is
clear that some of the properties have been rented to private
tenants and have been used by those tenants for nondiplomatic
purposes, there is no record evidence that any property is being
used for such purposes. The difference in tense is dispositive.
In protecting from attachment property that “is being used
exclusively for diplomatic or consular purposes,” Congress
expressly employed the present tense. TRIA § 201(d)(2)(B)(ii)
(emphasis added). Where “Congress could have phrased its
requirement in language that looked to the past . . . but . . . did
not choose this readily available option,” the “most natural
reading” is to construe the statute in the present (or present and
future) tense. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay
Found. Inc., 484 U.S. 49, 57 (1987); see Carr v. United States,
130 S. Ct. 2229, 2236 (2010) (“By implication, . . . the
Dictionary Act instructs that the present tense generally does not
include the past.” (referring to 1 U.S.C. § 1)). The inference that
Congress’ choice of tense was intentional is even stronger
where, as here, the legislature employed the present tense in one
subsection and the past tense in another. Compare TRIA
§ 201(d)(2)(B)(ii) (excepting from attachment all specified
property that “is being used exclusively for
diplomatic . . . purposes” (emphasis added)), with id.
§ 201(b)(2)(A) (authorizing the President to waive attachment
on a case-by-case basis unless the property “has been used by
the United States for any nondiplomatic purpose” (emphasis
added)).
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Given the statute’s use of the present tense, I would hold
that TRIA § 201(d)’s protection against attachment applies to
property that “is being used exclusively for diplomatic or
consular purposes” at the time the writ of attachment is filed,
regardless of how the property was previously used. This
construction follows the course set by the Supreme Court in
interpreting analogous statutory language. In Dole Food Co. v.
Patrickson, for example, the Court construed the Foreign
Sovereign Immunities Act, which requires an entity seeking to
remove a lawsuit to federal court to show that “a majority of
[its] shares . . . is owned by a foreign state.” 538 U.S. 468, 473
(2003) (emphasis added) (quoting 28 U.S.C. § 1603(b)(2)). The
Court held that “the plain text of this provision, because it is
expressed in the present tense, requires that instrumentality
status be determined at the time suit is filed.” Id. at 478(emphasis added). Similarly, in Gwaltney v. Chesapeake Bay
Foundation, the Court determined that the Clean Water Act’s
authorization of citizen suits against defendants “alleged to be
in violation” of permit conditions “does not permit citizens suits
for wholly past violations.” 484 U.S. at 64 (emphasis added).
Rather, it requires that the defendant be alleged to “‘be in
violation’ . . . at the commencement of suit.” Id. (emphasis
added) (quoting 33 U.S.C. § 1365(a)(1)).
In this case, the requirement that the property “is being used
exclusively for diplomatic or consular purposes” is satisfied by
the district court’s indication that, at the time the writs were
issued, all of the properties were vacant and being held by the
United States pursuant to its obligations under the Vienna
Convention. See Bennett v. Islamic Republic of Iran, No. 03-
1486, Mem. Op. at 21 (D.D.C. Mar. 31, 2009). Accordingly, I
concur in my colleagues’ decision to affirm the quashing of the
writs.
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I note, however, that if the United States again rents these
properties to private tenants who use them for nondiplomatic
purposes, the plaintiffs should be free to attach them to satisfy
their judgments. Although the government fears that permitting
attachment under any circumstances “could have significant
implications for U.S. foreign policy,” Appellee’s Br. 16, and my
colleagues warn that attachment could interfere with the United
States’ ability to fulfill its treaty obligations, the government can
eliminate these concerns by ensuring that the properties are used
exclusively for diplomatic purposes. If diplomatic tenants are
unavailable, this may require the State Department to pay for
maintenance from appropriated funds rather than rental income.
But that presents at worst an economic, not a foreign policy
problem. It is certainly a constraint that Congress is free to
impose on the Department.