Jenny Rubin v. Islamic Republic of Iran

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-1935
JENNY RUBIN, et al.,
Plaintiffs-Appellants,
v.
ISLAMIC REPUBLIC OF IRAN,
Defendant-Appellee,
and
FIELD MUSEUM OF NATURAL HISTORY, et al.,
Respondents-Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 03 C 9370 — Robert W. Gettleman, Judge.
____________________
ARGUED APRIL 23, 2015 — DECIDED JULY 19, 2016
____________________
Before BAUER and SYKES, Circuit Judges, and REAGAN,
Chief District Judge. *
* Of the Southern District of Illinois, sitting by designation.
2 No. 14-1935
SYKES, Circuit Judge. In September 1997 three Hamas sui-
cide bombers blew themselves up on a crowded pedestrian
mall in Jerusalem. Among those grievously injured were
eight U.S. citizens who later joined with a handful of their
close relatives to file a civil action against the Islamic Repub-
lic of Iran for its role in providing material support to the
attackers. Iran was subject to suit as a state sponsor of terror-
ism under the terrorism exception to the Foreign Sovereign
Immunities Act (“FSIA”), then codified at 28 U.S.C.
§ 1605(a)(7). A district judge in the District of Columbia
entered a $71.5 million default judgment. Iran did not pay.
So began more than a decade of unsuccessful litigation
across the country to attach and execute on Iranian assets in
order to satisfy the judgment. See Rubin v. Islamic Republic of
Iran, No. Civ. A. 01-1655 (RMU), 2005 WL 670770, at *1
(D.D.C. Mar. 23, 2005), vacated, 563 F. Supp. 2d 38 (D.D.C.
2008) (granting and then vacating writs of execution against
two domestic bank accounts used by Iranian consulates);
Rubin v. Islamic Republic of Iran, 810 F. Supp. 2d 402 (D. Mass.
2011), aff'd, 709 F.3d 49 (1st Cir. 2013) (rejecting an effort to
attach Iranian antiquities in the possession of various muse-
ums); Rubin v. Islamic Republic of Iran, 33 F. Supp. 3d 1003(N.D. Ill. 2014) (same). This appeal concerns the last decision
on this list.
The plaintiffs sought to execute on four collections of an-
cient Persian artifacts located within the territorial jurisdic-
tion of the Northern District of Illinois: the Persepolis Collec-
tion, the Chogha Mish Collection, and the Oriental Institute
Collection, all in the possession of the University of Chicago;
and the Herzfeld Collection, split between the University
and Chicago’s Field Museum of Natural History. The case
No. 14-1935 3
was last here on some procedural issues early in the attach-
ment proceeding. See Rubin v. Islamic Republic of Iran,
637 F.3d 783 (7th Cir. 2011), cert. denied, 133 S. Ct. 23 (2012). It
now returns on the merits.
A foreign state’s property in the United States is immune
from attachment and execution, see 28 U.S.C. § 1609, but
there are a few narrow exceptions. The plaintiffs identified
three possible paths to reach the artifacts: subsections (a) and
(g) of 28 U.S.C. § 1610, both part of the FSIA; and section 201
of the Terrorism Risk Insurance Act of 2002 (“TRIA”), Pub. L.
No. 107-297, 116 Stat. 2322 (codified at 28 U.S.C. § 1610 note),
which permits holders of terrorism-related judgments to
execute on assets that are “blocked” by executive order
under certain international sanctions provisions. The district
court entered judgment against the plaintiffs, finding no
statutory basis to execute on the artifacts.
We affirm. The assets are not blocked by existing execu-
tive order, so execution under TRIA is not available. Nor
does § 1610(a) apply. That provision permits execution on a
foreign state’s property “used for a commercial activity in
the United States.” We read this exception to require com-
mercial use by the foreign state itself, not a third party. Iran
did not put the artifacts to any commercial use.
Lastly, § 1610(g) is not itself an exception to execution
immunity. Instead, it partially abrogates the so-called Bancec
doctrine, which holds that a judgment against a foreign state
cannot be executed on property owned by its juridically
separate instrumentality. First Nat’l City Bank v. Banco Para El
Comercio Exterior de Cuba (“Bancec”), 462 U.S. 611, 626–29
(1983). The Bancec rule can be overcome in two ways: The
holder of a judgment against a foreign state may execute on
4 No. 14-1935
the property of its instrumentality if the sovereign and its
instrumentality are alter egos or if adherence to the rule of
separateness would work an injustice. Id.Section 1610(g) lifts the Bancec rule for holders of terror-
ism-related judgments, allowing attachment in aid of execu-
tion “as provided in this section” without regard to the
presumption of separateness—that is, without the require-
ment of establishing alter-ego status or showing an injustice.
The phrase “as provided in this section” refers to the im-
munity exceptions found elsewhere in § 1610, one of which
must apply to overcome execution immunity. So although
subsection (g) substantially eases the enforcement process
for terrorism victims by removing the Bancec barrier, it is not
a freestanding terrorism exception to execution immunity.
I. Background
The artifacts at issue here arrived in the United States
over a 60-year timespan beginning in the 1930s. In 1937 Iran
loaned the Persepolis Collection—roughly 30,000 clay tablets
and fragments containing some of the oldest writings in the
world—to the University of Chicago’s Oriental Institute for
research, translation, and cataloguing. In 1945 the Field
Museum purchased a collection of approximately 1,200
prehistoric artifacts from Dr. Ernst Herzfeld, a German
archaeologist active in Persia in the early 20th century (the
Herzfeld Collection). In the 1960s Iran excavated clay seal
impressions from the ancient Chogha Mish settlement and
loaned them to the University’s Oriental Institute for aca-
demic study (the Chogha Mish Collection). Most items in
this collection were returned to Iran in 1970, but the Univer-
sity has since located some objects previously missing from
the collection. In the 1980s and 1990s, the Oriental Institute
No. 14-1935 5
received several small donations of Persian artifacts from
Iran and other donors. These artifacts are not really a dis-
crete collection, but the parties refer to them as the “Oriental
Institute Collection,” so we’ll do the same.
The plaintiffs are American victims of a suicide-bomb at-
tack carried out by Hamas in Jerusalem on September 4,
1997, with material support from Iran. In 2003 the survivors
and their close family members filed suit against Iran in
federal court in the District of Columbia, proceeding under
the terrorism exception to jurisdictional sovereign immunity,
then codified at § 1605(a)(7) of the FSIA. (In January 2008
Congress repealed § 1605(a)(7) and enacted a new terrorism
exception to jurisdictional sovereign immunity codified at
28 U.S.C. § 1605A. See National Defense Authorization Act
for Fiscal Year 2008, Pub. L. No. 110-181, § 1083, 122 Stat. 3,
338–44.)
The plaintiffs won a $71.5 million default judgment, see
Campuzano v. Islamic Republic of Iran, 281 F. Supp. 2d 258(D.D.C. 2003), and quickly commenced enforcement actions
around the country in an effort to collect. As relevant here,
the plaintiffs registered the judgment in the Northern Dis-
trict of Illinois, initiating attachment proceedings for the
purpose of executing on the four collections then in the
possession of the University and the Field Museum. 1 (We’ll
refer to the University and the Field Museum collectively as
“the Museums” unless the context requires otherwise.)
1 The plaintiffs later converted their § 1605(a)(7) judgment to one under
§ 1605A. See Rubin v. Islamic Republic of Iran, 270 F.R.D. 7, 9 & n.3 (D.D.C.
2010).
6 No. 14-1935
Significant procedural battles ensued. We resolved these
disputes in our earlier opinion and need not repeat that
litigation history. See Rubin, 637 F.3d at 786–89. For present
purposes it’s enough to note that the plaintiffs initially
proposed two possible ways to overcome Iran’s execution
immunity. First, they invoked § 1610(a), the “commercial
activity” exception to execution immunity. Second, they
pointed to TRIA, which permits execution on the blocked
assets of a state sponsor of terrorism (or its agency or in-
strumentality) to satisfy a judgment obtained under the
terrorism exception to jurisdictional sovereign immunity.
After we sent the case back to the district court, the par-
ties engaged in discovery on the four collections, and Iran
and the Museums moved for summary judgment. The
district judge granted the motion. First, he rejected the
plaintiffs’ claim that the artifacts are subject to execution
under § 1610(a). The judge read this exception as limited to
property used for a commercial activity by the foreign state
itself. Because Iran hadn’t used the artifacts for commercial
activity, the judge held that § 1610(a) does not apply.
The judge also held that because the assets in question
are not blocked—i.e., frozen—by any current executive
order, execution under TRIA is likewise unavailable.
Finally, in their response to the summary-judgment mo-
tion, the plaintiffs identified a third possible path to reach
the artifacts: § 1610(g), which they argued is an independent
exception to execution immunity available to victims of
state-sponsored terrorism. The judge rejected this argument
too, concluding that subsection (g) abrogates the Bancec rule
for terrorism-related judgments but is not a freestanding
terrorism exception to execution immunity.
No. 14-1935 7
Finding no statutory basis to execute on the artifacts, the
judge entered judgment for Iran and the Museums. The
plaintiffs appealed, reprising all three arguments.
II. Discussion
A. Which Artifacts Remain at Issue?
Our first task is to identify which of the four collections is
even potentially subject to attachment and execution at this
juncture. Two basic criteria apply: (1) the artifacts must be
owned by Iran, and (2) the artifacts must be within the
territorial jurisdiction of the district court. See Republic of
Argentina v. NML Capital, Ltd., 134 S. Ct. 2250, 2257 (2014)
(“Our courts generally lack authority in the first place to
execute against property in other countries … .”) (citation
omitted); see also Autotech Techs. LP v. Integral Research & Dev.
Corp., 499 F.3d 737, 750 (7th Cir. 2007) (“The FSIA did not
purport to authorize execution against a foreign sovereign’s
property, or that of its instrumentality, wherever that prop-
erty is located around the world. We would need some hint
from Congress before we felt justified in adopting such a
breathtaking assertion of extraterritorial jurisdiction.”).
There’s no dispute that the Persepolis Collection is
owned by Iran and is in the physical possession of the
University. The three other collections, however, are outside
the reach of this proceeding for reasons relating to their
present location or the absence of Iranian ownership.
As we’ve just explained, when the district court entered
judgment, the University had possession of remnants of the
Chogha Mish Collection. But intervening developments
have placed these artifacts beyond the grasp of the federal
courts. After filing their notice of appeal, the plaintiffs asked
8 No. 14-1935
us to stay the district court’s judgment pending appeal. We
denied the motion. The State Department then informed the
University that the United States was obligated to return the
Chogha Mish artifacts to Iran. The University, in turn,
notified us that it would return the Chogha Mish artifacts to
Iran within 45 days unless the court ordered otherwise. We
did not order otherwise. So the University delivered the
artifacts to Iran’s National Museum in Tehran and filed
notice with the court that Iran received and accepted them.
Accordingly, the Chogha Mish Collection is no longer within
the territorial jurisdiction of the district court.
The Herzfeld and the Oriental Institute Collections re-
main within the court’s territorial jurisdiction, but they are
not Iranian property. The plaintiffs have tried to cast doubt
on the legitimacy of their removal from Iran, arguing that
Dr. Herzfeld is regarded by some in the academic communi-
ty as a plunderer and that the artifacts in these collections
are covered by Iran’s National Heritage Protection Act of
1930, which gives the government of Iran an option to
exercise control over certain antiquities unearthed in the
country. The Museums, on the other hand, maintain that
they were bona fide purchasers or recipients of these collec-
tions; the plaintiffs have not meaningfully contested this
point.
We don’t need to resolve any questions about the prove-
nance of the Herzfeld and Oriental Institute Collections or
explore the circumstances under which the Museums ac-
quired them. As the plaintiffs concede, Iran has expressly
disclaimed any legal interest in the two collections, and the
district judge found that no evidence supports Iranian
No. 14-1935 9
ownership of these artifacts. The plaintiffs have not given us
any reason to disturb this ruling, and we see none ourselves.
Because the Chogha Mish Collection is no longer within
the territorial jurisdiction of the district court and Iran has
disclaimed ownership of the Herzfeld and Oriental Institute
Collections, we confine our merits review to the Persepolis
Collection.
B. Statutory Framework
We traced the history of the foreign sovereign immunity
doctrine and the enactment of the FSIA in our earlier opin-
ion. See Rubin, 637 F.3d at 792–94. A brief repetition is help-
ful to a proper understanding of the statutory-interpretation
questions presented here.
Foreign sovereign immunity “is a matter of grace and
comity on the part of the United States,” and for much of our
nation’s history was left to the discretion of the Executive
Branch. Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480,
486 (1983). As such, federal courts “consistently … deferred
to the decisions of the political branches—in particular, those
of the Executive Branch—on whether to take jurisdiction
over actions against foreign sovereigns and their instrumen-
talities.” Id. Under the common-law doctrine, a diplomatic
representative of the foreign state would request a “sugges-
tion of immunity” from the State Department, and if the
State Department obliged, the court would surrender juris-
diction without further inquiry; absent a suggestion of
immunity, the court would decide the immunity question
itself based on policies established by the State Department.
Rubin, 637 F.3d at 793. Either way, “[t]he process … entailed
substantial judicial deference to the Executive Branch.” Id.
10 No. 14-1935
Even if a court acquired jurisdiction and awarded judg-
ment against a foreign state, “the United States gave abso-
lute immunity to foreign sovereigns from the execution of
judgments.” Autotech, 499 F.3d at 749. Successful plaintiffs
had to rely on voluntary payment by the foreign state. Id.In 1952 the State Department adopted a “restrictive” the-
ory of foreign sovereign immunity, conferring jurisdictional
immunity in cases arising out of a foreign state’s “public
acts” but withholding it in “cases arising out of a foreign
state’s strictly commercial acts.” Verlinden, 461 U.S. at 487.
“Under the restrictive, as opposed to the ‘absolute,’ theory of
foreign sovereign immunity, a state is immune from the
jurisdiction of foreign courts as to its sovereign or public acts
(jure imperii), but not as to those that are private or commer-
cial in character (jure gestionis).” Saudi Arabia v. Nelson,
507 U.S. 349, 359–60 (1993). Even under this theory, howev-
er, foreign sovereign property remained absolutely immune
from execution. Autotech, 499 F.3d at 749.
The State Department’s shift to the restrictive theory of
jurisdictional immunity “‘thr[ew] immunity determinations
into some disarray,’ since ‘political considerations some-
times led the Department to file suggestions of immunity in
cases where immunity would not have been available.’”
NML Capital, 134 S. Ct. at 2255 (brackets in original) (quoting
Republic of Austria v. Altmann, 541 U.S. 677, 690 (2004)).
Essentially, “sovereign immunity determinations were
[being] made in two different branches, subject to a variety
of factors, sometimes including diplomatic considerations.
Not surprisingly, the governing standards were neither clear
nor uniformly applied.” Verlinden, 461 U.S. at 488.
No. 14-1935 11
In 1976 Congress stepped in and enacted the FSIA, which
“largely codifies the so-called ‘restrictive’ theory of foreign
sovereign immunity first endorsed by the State Department
in 1952.” Republic of Argentina v. Weltover, Inc., 504 U.S. 607,
612 (1992). The Act establishes a “comprehensive set of legal
standards governing claims of immunity in every civil action
against a foreign state.” Verlinden, 461 U.S. at 488. “The key
word … is comprehensive.” NML Capital, 134 S. Ct. at 2255.
“[A]ny sort of immunity defense made by a foreign sover-
eign in an American court must stand on the Act’s text. Or it
must fall.” Id. at 2256.
The Act codifies the two common-law immunities we’ve
just discussed—jurisdictional immunity (28 U.S.C. § 1604)
and execution immunity (id. § 1609). Only the latter is at
issue here. Section 1609 states that “the property in the
United States of a foreign state shall be immune from at-
tachment[,] arrest[,] and execution except as provided in
sections 1610 and 1611 of this chapter.” Accordingly, the
Persepolis Collection is immune from attachment and
execution unless an exception listed in § 1610 applies. (Sec-
tion 1611 of Title 28 of the U.S. Code lists exceptions to the
exceptions and is not implicated here.)
The most prominent are the so-called commercial-
activity exceptions found in subsections (a) and (b) of § 1610.
Under § 1610(a) a person who holds a judgment against a
foreign state may execute it on the foreign state’s property
“used for a commercial activity in the United States” if one
of seven listed conditions is met. Similarly, under § 1610(b) a
person who holds a judgment against a foreign state’s
instrumentality may execute it on “any property in the
United States of [the] … instrumentality … engaged in
12 No. 14-1935
commercial activity in the United States” if one of three
listed conditions is met.
So to summarize, at common law execution immunity
was absolute, Autotech, 499 F.3d at 749, but subsections (a)
and (b) of § 1610 together codify a narrower version of the
restrictive theory of jurisdictional immunity for the execu-
tion of judgments, allowing successful claimants to attach
and execute on foreign sovereign property “used for a
commercial activity” in this country, at least in some circum-
stances. 2
The plaintiffs point to § 1610(a) and § 1610(g) as possible
paths to reach the artifacts. They also rely on section 201(a)
of TRIA. We turn to these arguments now.
C. 28 U.S.C. § 1610(a)
As we’ve just explained, § 1610(a) establishes rules for
executing a judgment against a foreign state on the foreign
state’s property; § 1610(b) establishes rules for executing a
judgment against a foreign state’s instrumentality on the
instrumentality’s property. The judgment here is against
Iran, and Iran owns the Persepolis Collection, so subsec-
tion (a) is the relevant subsection.
Generally speaking, § 1610(a) permits the holder of a
judgment against a foreign state to execute on property of
the foreign state “used for a commercial activity in the
United States” but only if one of seven enumerated condi-
2 Section 1610 also permits in rem execution of certain foreclosure
judgments against a foreign state’s vessels. 28 U.S.C. § 1610(e). Other
parts of § 1610 address, for example, certain procedural requirements for
execution, see, e.g., id. § 1610(c), and the sensitive matter of prejudgment
attachment of foreign sovereign property, id. § 1610(d).
No. 14-1935 13
tions is satisfied. For example, a judgment creditor may
proceed against a foreign state’s property “used for a com-
mercial activity in the United States” if the foreign state has
expressly or impliedly waived execution immunity,
§ 1610(a)(1); or if the property in question “was used for the
commercial activity upon which the claim is based,”
§ 1610(a)(2); or if “the judgment is based on an order con-
firming an arbitral award,” § 1610(a)(6).
At issue here is subsection (a)(7), which permits attach-
ment and execution if the following terms are met:
(a) The property in the United States of a for-
eign state, … used for a commercial activity in the
United States, shall not be immune from attach-
ment in aid of execution, or from execution,
upon a judgment entered by a court of the
United States or of a State after the effective
date of this Act, if—
…
(7) the judgment relates to a claim for which
the foreign state is not immune under section
1605A or section 1605(a)(7) [the present and
former terrorism exceptions to jurisdiction-
al immunity] … regardless of whether the
property is or was involved with the act
upon which the claim is based.
§ 1610(a)(7) (emphases added).
The plaintiffs obtained their judgment against Iran in
2003 under § 1605(a)(7), the terrorism exception to jurisdic-
tional immunity then in effect. In 2008 Congress replaced
§ 1605(a)(7) with § 1605A, and the plaintiffs converted their
14 No. 14-1935
judgment to one under the new statute. So there’s no ques-
tion that the special condition in subsection (a)(7) is satisfied.
That leaves the basic “commercial activity” requirement
of § 1610(a). The dispute here centers on the key statutory
phrase identifying the property that may be subject to
execution under this exception: “property in the United
States of a foreign state … used for a commercial activity in
the United States.” § 1610(a). The passive-voice phrasing of
this sentence raises an interpretive question: Used by whom?
The plaintiffs contend that a third party’s commercial use
of the property triggers § 1610(a) and that the University’s
academic study of the Persepolis Collection counts as a
commercial use. Iran and the University counter that the
foreign state itself must use its property for a commercial
activity, and regardless, academic study isn’t a commercial
use. The United States has weighed in as an amicus curiae
on the side of the interpretation urged by Iran and the
University—namely, that the exception in § 1610(a) applies
only when the foreign sovereign itself (not a third party) uses
the property for a commercial activity.
We’re skeptical that academic study qualifies as a com-
mercial use, but we’ll put that question aside and focus on
the antecedent one: Whose commercial use counts?
The Fifth Circuit has held that § 1610(a) is triggered only
when the foreign state itself uses its property in the United
States for a commercial activity. See Conn. Bank of Commerce v.
Republic of Congo, 309 F.3d 240, 256 n.5 (5th Cir. 2002)
(“[W]hat matters under the statute is how the foreign state
uses the property, not how private parties may have used the
property.”).
No. 14-1935 15
The Second and Ninth Circuits agree. See Aurelius Capital
Partners v. Republic of Argentina, 584 F.3d 120, 131 (2d Cir.
2009) (“The commercial activities of the private corporations
who managed these assets are irrelevant to this inquiry. …
[B]efore the retirement and pension funds at issue could be
subject to attachment, the funds in the hands of the Republic
must have been ‘used for a commercial activity.’”); Af-Cap,
Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, 1090–91
(9th Cir. 2007) (adopting the Fifth Circuit’s interpretation).
We think these circuits have understood § 1610(a) cor-
rectly. It’s true that a legislature’s use of the passive voice
sometimes reflects indifference to the actor. See Dean v.
United States, 556 U.S. 568, 572 (2009) (“The passive voice
focuses on an event that occurs without respect to a specific
actor … .”). But attributing indifference to Congress in this
instance would be inconsistent with the FSIA’s statutory
declaration of purpose, which explicitly invokes the interna-
tional law understanding of foreign sovereign immunity:
“Under international law, states are not immune from the
jurisdiction of foreign courts insofar as their commercial
activities are concerned, and their commercial property may
be levied upon for the satisfaction of judgments rendered
against them in connection with their commercial activities.”
28 U.S.C. § 1602 (emphases added).
Section 1602 thus instructs courts to interpret the immun-
ities and exceptions in the FSIA against the backdrop of the
international law norm that foreign sovereigns do not have
immunity for “their commercial activities” or immunity from
execution on “their commercial property.” This suggests that
a foreign sovereign’s property is subject to execution under
§ 1610(a) only when the sovereign itself uses the property for
16 No. 14-1935
a commercial activity. While the passive-voice phrasing in
§ 1610(a) introduces some ambiguity about whose commer-
cial use matters, § 1602’s declaration of purpose clarifies that
foreign states may lose execution immunity only by virtue of
their own commercial use of their property in the United
States, not a third party’s.
The plaintiffs object that the declaration of purpose isn’t
relevant because resort to legislative history is not necessary
when the statutory language is unambiguous. We disagree
for two reasons. First, § 1602 is legislation, not legislative
history. It was written, debated, and enacted by Congress
and signed into law by the President—in the same manner
and at the same time as § 1610. None of the standard objec-
tions to judicial reliance on legislative history inhibit our
resort to a statutory declaration of purpose for help in inter-
preting a part of the statute to which it applies. 3
Second, as we’ve just noted, the passive-voice phrasing of
§ 1610(a) creates uncertainty about whose commercial use of
the property suffices to forfeit a foreign state’s execution
immunity. The text itself raises the question, and the uncer-
tainty is all the more apparent when subsection (a) is consid-
ered in its broader statutory context. See King v. Burwell,
135 S. Ct. 2480, 2489 (2015) (“[O]ftentimes the ‘meaning—or
ambiguity—of certain words or phrases may only become
evident when placed in context.’ So when deciding whether
the language is plain, we must read the words ‘in their
context and with a view to their place in the overall statutory
scheme.’” (citation omitted) (quoting FDA v. Brown & Wil-
3We’re not suggesting, however, that a legislative statement of purpose
provides statutory meaning independent of the operative statutory text.
No. 14-1935 17
liamson Tobacco Corp., 529 U.S. 438, 450 (2002))). The FSIA
starts with a baseline rule of execution immunity; the excep-
tions are few and “narrowly drawn.” Autotech, 499 F.3d at
749.
Given the broad protective stance of the statutory scheme
in general, we cannot say with confidence that § 1610(a)
unambiguously abrogates a foreign sovereign’s execution
immunity when a third party uses its property for a com-
mercial activity. Rather, the statutory declaration of purpose
suggests that a narrower interpretation is correct: A foreign
state may lose its execution immunity only by its own com-
mercial use of its property in the United States.
Trying another tack, the plaintiffs direct our attention to
the language of § 1605(a), the commercial-activity exception
to jurisdictional immunity, which specifically states that the
commercial activity must be “carried on in the United States
by the foreign state” before immunity is lost. (Emphasis
added.) The absence of similar language in § 1610(a), they
argue, means that the commercial-activity exception to
execution immunity is broader than its parallel in § 1605(a)
and applies whenever a third party uses a foreign state’s
property for a commercial activity.
This argument contradicts the settled principle that the
exceptions to execution immunity are narrower than, and
independent from, the exceptions to jurisdictional immunity.
NML Capital, 134 S. Ct. at 2256; Rubin, 637 F.3d at 796;
DeLetelier v. Republic of Chile, 748 F.3d 790, 798–99 (2d Cir.
1984). This principle is both well established and based on a
critical diplomatic reality: Seizing a foreign state’s property
is a serious affront to its sovereignty—much more so than
taking jurisdiction in a lawsuit. Correspondingly, judicial
18 No. 14-1935
seizure of a foreign state’s property carries potentially far-
reaching implications for American property abroad.
The plaintiffs’ interpretation of § 1610(a) turns this im-
portant principle on its head. A third party’s commercial use
of a foreign state’s property, which cannot establish jurisdic-
tion over the foreign state, would suffice to strip the foreign
state’s property of its execution immunity. That cannot be
right.
Accordingly, we join the emerging consensus of our sister
circuits and hold that a third party’s commercial use of a
foreign state’s property does not trigger the § 1610(a) excep-
tion to execution immunity. Rather, § 1610(a) applies only
when the foreign state itself has used its property for a com-
mercial activity in the United States; the actions of third
parties are irrelevant.
Nothing in the record suggests that Iran itself used the
Persepolis Collection for a commercial activity in the United
States. Indeed, the plaintiffs do not argue otherwise. The
district court reached the correct conclusion: Section 1610(a)
does not apply. 4
D. 28 U.S.C. § 1610(g)
Alternatively, the plaintiffs argue that § 1610(g) provides
an independent basis to execute on the artifacts. A bit of
background is necessary before we take up this argument.
Congress enacted § 1610(g) as part of the National De-
fense Authorization Act of 2008, which ushered in several
changes to the FSIA as applied in cases of state-sponsored
4 Our holding makes it unnecessary to decide whether the University’s
academic study of the Persepolis Collection is a commercial use.
No. 14-1935 19
terrorism. We’ve already mentioned one: Section 1605A
replaced § 1605(a)(7), the previous terrorism exception to
jurisdictional immunity. Section 1605A includes an identical
exception to jurisdictional immunity but “is more compre-
hensive and more favorable to plaintiffs because it adds a
broad array of substantive rights and remedies that simply
were not available in actions under” the previous law. In re
Islamic Republic of Iran Terrorism Litig., 659 F. Supp. 2d 31, 58
(D.D.C. 2009).
The other major change was the creation of § 1610(g),
which applies to execution proceedings to enforce judg-
ments obtained under § 1605A and eases the collection
process for victims of state-sponsored terrorism by eliminat-
ing the Bancec rule that foreign sovereigns and their instru-
mentalities are treated separately for execution purposes.
The 2008 legislation also provided that certain judgments
obtained under the old § 1605(a)(7) could be converted to
judgments under § 1605A so that judgment creditors could
access the benefits of § 1610(g). The plaintiffs successfully
converted their judgment, and they now contend that
§ 1610(g) makes all Iranian assets available for execution
without proof of a nexus to commercial activity—that is,
without having to satisfy § 1610(a). They argue, in other
words, that subsection (g) is a freestanding exception to
execution immunity for terrorism-related judgments.
Iran and the University dispute that interpretation. They
agree that subsection (g) was intended to—and does—make
it easier for terrorism victims to enforce their judgments. But
they maintain that it does so only by abrogating the Bancec
doctrine for § 1605A judgments; subsection (g) is not itself an
exception to execution immunity. The United States supports
20 No. 14-1935
this interpretation and joins Iran and the University in
urging us to adopt it.
We begin with the Bancec doctrine, which derives from
the Supreme Court’s 1983 decision known by that name.
Bancec established a general presumption that a judgment
against a foreign state may not be executed on property
owned by a juridically separate agency or instrumentality.
462 U.S. at 626–27 (“Due respect for the actions taken by
foreign sovereigns and for principles of comity between
nations leads us to conclude … that government instrumen-
talities established as juridical entities distinct and inde-
pendent from their sovereign should normally be treated as
such.”) (citation omitted). That’s the general rule in the law
of private corporations, and the Court applied it to the
juridically separate instrumentalities of foreign govern-
ments. Id. The Court recognized two exceptions: The holder
of a judgment against a foreign state may execute on the
property of its instrumentality if the sovereign and its in-
strumentality are alter egos or if adherence to the rule of
separateness would work a fraud or injustice. Id. at 628–33.
The Court expressly declined to elaborate on these excep-
tions, however. Id. at 633 (“Our decision today announces no
mechanical formula for determining the circumstances
under which the normally separate juridical status of a
government instrumentality is to be disregarded.”). So the
lower courts had to fill the gap. Soon after Bancec was decid-
ed, the federal courts began to coalesce around a set of five
factors for determining when the exceptions applied. See,
e.g., Flatow v. Islamic Republic of Iran, 308 F.3d 1065, 1071 n.9
(9th Cir. 2002); Walter Fuller Aircraft Sales, Inc. v. Republic of
Philippines, 965 F.2d 1375, 1380–82, 1380–81 n.7 (5th Cir.
No. 14-1935 21
1992). The following formula from the Fifth Circuit is typical;
courts should consider:
(1) The level of economic control by the gov-
ernment; (2) whether the entity’s profits go to
the government; (3) the degree to which gov-
ernment officials manage the entity or other-
wise have a hand in its daily affairs; (4) wheth-
er the government is the real beneficiary of the
entity’s conduct; and (5) whether adherence to
separate identities would entitle the foreign
state to benefits in United States courts while
avoiding its obligations.
Walter Fuller Aircraft, 965 F.2d at 1380 n.7.
Fast forward to 2008 and the enactment of the National
Defense Authorization Act, which created § 1605A and
§ 1610(g). In relevant part, § 1610(g) states:
[T]he property of a foreign state against which
a judgment is entered under section 1605A, and
the property of an agency or instrumentality of
such a state, … is subject to attachment … and
execution … as provided in this section, regard-
less of—
(A) the level of economic control over
the property by the government of the for-
eign state;
(B) whether the profits of the property
go to that government;
22 No. 14-1935
(C) the degree to which officials of that
government manage the property or oth-
erwise control its daily affairs;
(D) whether that government is the sole
beneficiary in interest of the property; or
(E) whether establishing the property as
a separate entity would entitle the foreign
state to benefits in United States courts
while avoiding its obligations.
(Emphases added.)
Put more succinctly, subsection (g) permits a terrorism
victim who wins a § 1605A judgment to execute on the
property of the foreign state and the property of its agency or
instrumentality “as provided in this section” but “regardless of”
the five factors listed in subsections (A)–(E).
As the careful reader no doubt has grasped, the five fac-
tors made irrelevant by subsection (g) mirror almost exactly
the factors developed by the lower courts under the Bancec
doctrine. For ease of comparison, we’ve prepared this chart:
Bancec Doctrine Factors Factors Made Irrelevant by
Subsection (g)
(1) the level of economic (A) the level of economic
control by the government; control over the property by
the government of the for-
eign state;
(2) whether the entity’s (B) whether the profits of the
profits go to the government; property go to that govern-
No. 14-1935 23
ment;
(3) the degree to which (C) the degree to which
government officials manage officials of that government
the entity or otherwise have manage the property or
a hand in its daily affairs; otherwise control its daily
affairs;
(4) whether the government (D) whether that government
is the real beneficiary of the is the sole beneficiary in
entity’s conduct; and interest of the property; or
(5) whether adherence to (E) whether establishing the
separate identities would property as a separate entity
entitle the foreign state to would entitle the foreign
benefits in United States state to benefits in United
courts while avoiding its States courts while avoiding
obligations. its obligations.
The nearly identical language is either a stunning coinci-
dence or Congress drafted subsection (g) to abrogate the
Bancec doctrine for terrorism-related judgments. It’s impos-
sible to ignore the clear textual parallels between subsec-
tion (g), the Bancec rule, and the preexisting caselaw. Indeed,
we’ve already noted that subsection (g) overrides the Bancec
doctrine for terrorism-related judgments. See Gates v. Syrian
Arab Republic, 755 F.3d 568, 576 (7th Cir. 2014).
The key question here—a question not expressly decided
in Gates—is whether, as the plaintiffs contend, subsection (g)
goes further and establishes a freestanding “terrorism”
exception to execution immunity.
24 No. 14-1935
Iran and the University—with support from the United
States—caution against reading a corrective measure so
plainly aimed at eliminating the Bancec barrier as creating a
new and independent exception to execution immunity for
all terrorism-related judgments. They direct our attention to
language in subsection (g) specifically limiting its scope: The
text says that for § 1605A judgments, the property of a
foreign state and the property of its agency or instrumentali-
ty are “subject to attachment … and execution … as provided
in this section.” The highlighted phrase makes very little
sense—indeed, is entirely superfluous—if subsection (g) is
itself a freestanding exception to execution immunity. The
plaintiffs’ reading of subsection (g) thus violates the “cardi-
nal principle” that a statute should be interpreted to avoid
superfluity. TRW, Inc. v. Andrews, 534 U.S. 19, 31 (2001).
The plaintiffs suggest that the phrase “as provided in this
section” refers to only the “non-substantive rules” set forth
in § 1610. But they offer no basis for limiting the phrase in
that manner, nor have they identified which non-substantive
rules they think Congress meant to include in subsection (g).
Moreover, it would be very odd to read “as provided in this
section” as referring only to certain unidentified subsections
of § 1610. The word “section” must mean what it says:
Subsection (g) modifies all of § 1610.
Treating § 1610(g) as an independent basis for execution
also creates superfluities in other parts of the statute. For
example, subsections (a)(7) and (b)(3) of § 1610 relate specifi-
cally to judgments obtained under § 1605A, the current
terrorism exception to jurisdictional immunity, and its
predecessor, § 1605(a)(7). If subsection (g) paves a dedicated
lane for all execution actions by victims of state-sponsored
No. 14-1935 25
terrorism, then § 1610(a)(7) and (b)(3) serve no purpose at
all. 5
In their reply brief, the plaintiffs seek refuge in our deci-
sion in Gates, which they say has already resolved this
interpretive question in their favor. We disagree, though we
can see how Gates might be read in that way. Gates involved
a lien-priority contest between two sets of terrorism victims
holding § 1605A judgments against Syria. 755 F.3d at 572–73.
Both sets of victims—the “Gates plaintiffs” and the “Baker
plaintiffs”—sought to execute on the same assets owned by
Syrian instrumentalities but held by an American bank and a
telecommunications company and located within the territo-
rial jurisdiction of the Northern District of Illinois. Id. at 573–
74. The dispute concerned compliance with the procedural
requirements of § 1610(c). That subsection provides that
[n]o attachment or execution referred to in
subsections (a) and (b) of this section shall be
permitted until the court has ordered such at-
tachment and execution after having deter-
mined that a reasonable period of time has
elapsed following the entry of judgment and
the giving of any notice required under section
1608(e) of this chapter.
5 Moreover, as we’ve noted, subsection (g) was enacted at the same time
as § 1605A. In the same 2008 legislation, subsections (a)(7) and (b)(3) of
§ 1610 were amended to make the commercial-activity exceptions
applicable to judgments obtained under § 1605A, the new exception to
jurisdictional immunity for terrorism-related cases. If, as the plaintiffs
claim, subsection (g) were a freestanding exception to execution immuni-
ty for § 1605A judgments, then these amendments—enacted at the same
time—were completely unnecessary.
26 No. 14-1935
§ 1610(c). The cross-referenced provision establishes rules
for obtaining a default judgment against a foreign state or its
agency or instrumentality. 28 U.S.C. § 1608(e).
The Gates plaintiffs obtained a § 1610(c) order from the
district court in the District of Columbia, where their judg-
ment was entered, then registered the judgment in the
Northern District of Illinois, where the assets of the Syrian
instrumentality were located. A few days later, the Baker
plaintiffs also registered their judgment in the Northern
District of Illinois, but “[u]nlike the Gates plaintiffs, … [they]
sought and obtained a new § 1610(c) order from the North-
ern District of Illinois.” Gates, 755 F.3d at 574. The Baker
plaintiffs then argued that their lien had priority because the
Gates plaintiffs hadn’t obtained a new § 1610(c) order in the
Northern District of Illinois. The Gates plaintiffs responded
with two arguments: First, “§ 1610(c) does not apply at all,”
and second, “even if it does, one order per judgment suffices
for attachment and execution anywhere in the United
States.” Id. at 575.
The panel sided with the Gates plaintiffs, ruling in their
favor on both grounds, either of which was independently
sufficient to support the judgment. Id. at 578 (“For two
independent reasons, then, § 1610(c) does not bar the priori-
ty of the Gates plaintiffs’ liens … .”). Addressing the first
argument, the panel noted that the Gates plaintiffs “are not
seeking attachment under § 1610(a) or (b). They seek at-
tachment under § 1610(g), which authorizes attachment of
property of foreign state sponsors of terrorism and their
agencies or instrumentalities to execute judgments under
§ 1605A for state-sponsored terrorism.” Id. at 575. The panel
continued: “Section 1610(g) is not mentioned in § 1610(c). By
No. 14-1935 27
its terms, then, § 1610(c) simply does not apply to execution
or attachment under § 1610(g).” Id.
Alternatively, the panel held that “[e]ven if § 1610(c) ap-
plie[s] to attachment efforts under § 1610(g),” one order
“suffices for attachment efforts throughout the United
States.” Id. at 577. The § 1610(c) order issued by the D.C.
district court was thus sufficient; the Gates plaintiffs “were
not required to seek a duplicative determination of the same
question by the Northern District of Illinois before attaching
the Syrian assets.” Id. at 578.
Notably, Gates assumes rather than decides the crucial
antecedent question—that is, whether § 1610(g) is itself a
freestanding exception to execution immunity. Instead, it
simply describes subsection (g) in a way that implies an
affirmative answer. Perhaps that’s not surprising; the issue
was not developed by the parties. To be sure, the Gates
opinion touches on the Bancec doctrine, observing that
§ 1610(g) “was intended to avoid limits the Supreme Court
had imposed on the ability of litigants to attach the assets of
foreign state agencies and instrumentalities.” Id. at 576. And
there’s no doubt that the opinion treats § 1610(g) as if it were
an independent exception to execution immunity, albeit
without actually deciding the question. Indeed, that’s the
premise of the panel’s holding that § 1610(c) does not apply.
But nowhere does the Gates opinion grapple with the
fundamental interpretive question presented here. Instead,
the parties and the court appear to have assumed without
further inquiry that subsection (g) is an independent basis
for attachment and execution for all terrorism-related judg-
ments. Tellingly, there’s no mention in Gates of the limiting
phrase in subsection (g) “as provided in this section,” nor
28 No. 14-1935
any reference to the statutory superfluities created by the
broader interpretation advanced by the Rubin plaintiffs here.
A second appeal from the same attachment proceeding—
this time involving a dispute between the Gates plaintiffs
and the “Wyatt plaintiffs”—again found for the Gates
plaintiffs but likewise neither raised nor decided the ante-
cedent interpretive question. See Wyatt v. Syrian Arab Repub-
lic, 800 F.3d 331, 342–43 (7th Cir. 2015). The Wyatt plaintiffs
mounted a collateral challenge to the § 1610(c) order that the
Gates plaintiffs had obtained from the D.C. district court. Id.
at 334–35, 342. The panel did not directly address this argu-
ment, relying instead on the holding of Gates that “‘§ 1610(c)
simply does not apply to the attachment of assets to execute
judgments under § 1610(g) for state-sponsored terrorism.’”
Id. at 343 (quoting Gates, 755 F.3d at 575). As in Gates, the
opinion in Wyatt does not mention the fundamental inter-
pretive question about the scope of § 1610(g). Wyatt thus left
the unexamined premise of Gates unexamined.
In the meantime, the Ninth Circuit has been wrestling
with the precise question presented here in a case involving
assets of Bank Melli, an instrumentality of Iran. A panel of
that court initially adopted the interpretation urged by the
Rubin plaintiffs here—that § 1610(g) is a freestanding excep-
tion to execution immunity for terrorism-related judgments.
Bennett v. Islamic Republic of Iran, 799 F.3d 1281, 1287 (9th Cir.
2015). Bank Melli petitioned for rehearing, and three weeks
later the panel invited the views of the United States on the
proper interpretation of § 1610(g). The United States re-
sponded, taking the same position it advances in this case.
On February 22, 2016, the panel withdrew its earlier opinion
and issued an amended one again holding that subsec-
No. 14-1935 29
tion (g) contains a freestanding exception to execution
immunity. Bennett v. Islamic Republic of Iran, 817 F.3d 1131,
1141 (9th Cir. 2016). Judge Benson disagreed with the majori-
ty’s interpretation of subsection (g) and filed a partial dissent
on that issue. Id. at 1149–51. The panel expressly invited
Bank Melli to file another petition for panel and en banc
rehearing. Id. at 1136.
Bank Melli did so, and on June 14, 2016, the panel issued
a second amended opinion. See Bennett v. Islamic Republic of
Iran, Nos. 13-15442 & 13-16100, 2016 WL 3257780 (9th Cir.,
June 14, 2016). The majority reaffirmed its earlier conclusion
that “subsection (g) contains a freestanding provision for
attaching and executing against assets of a foreign state or its
agencies or instrumentalities.” Id. at *6. Judge Benson again
dissented. Id. at *11–14. With this latest decision, the Ninth
Circuit appears to be done with the case; the panel’s order
indicates that no judge requested a vote on Bank Melli’s
petition for en banc rehearing. Id. at *2.
The Bennett majority purported to explain away the “as
provided in this section” language in subsection (g) by
interpreting it to apply only to § 1610(f). Id. at *6 (“When
subsection (g) refers to attachment and execution of the
judgment ‘as provided in this section,’ it is referring to
procedures contained in § 1610(f).”). That strikes us as a
highly strained interpretation. First, as we’ve already noted,
it implausibly reads the word “section” as “subsection,” so
the phrase “as provided in this section” actually means “as
provided in subsection (f).”
Second, and importantly, § 1610(f) never became operative.
It was adopted as part of the Omnibus Consolidated and
Emergency Supplemental Appropriations Act, 1999, Pub. L.
30 No. 14-1935
No. 105-277, § 117, 112 Stat. 2681, 2681-491 (1998), and
pertains to execution on property associated with certain
regulated and prohibited financial transactions. Congress
originally authorized the President to waive subsection (f)’s
provisions “in the interest of national security.” Id. § 117(d),
112 Stat. at 2681-492. President Clinton immediately issued a
blanket waiver. Presidential Determination No. 99-1, 63 Fed.
Reg. 59,201 (Oct. 21, 1998). Congress briefly repealed the
President’s waiver authority in the Victims of Trafficking
and Violence Protection Act of 2000, Pub. L. No. 106-386,
§ 2002(f)(2), 114 Stat. 1464, 1541, 1543, but quickly restored it,
id. § 2002(f)(1)(B), 114 Stat. at 1543, codifying the Executive’s
waiver authority in 28 U.S.C. § 1610(f)(3): “The President
may waive any provision of paragraph (1) in the interest of
national security.” President Clinton issued another blanket
waiver that same day. Presidential Determination No. 2001-
03, 65 Fed. Reg. 66,483 (Oct. 28, 2000).
So subsection (f), being inoperative from the start, does
not allow any form of execution. Congress enacted subsec-
tion (g) just eight years later. If the Ninth Circuit’s reasoning
is correct, subsection (g) was effectively a nullity upon
passage. That cannot be the correct interpretation. See Voisine
v. United States, No. 14-10154, 2016 WL 3461559, at *6 (U.S.,
June 27, 2016) (explaining that Congress is presumed to
legislate against the backdrop of the “known state of the
laws” (quoting United States v. Bailey, 34 U.S. (9 Pet.) 238, 256
(1835))). It therefore makes no sense to say, as the Bennett
majority does, that the phrase “as provided in this section”
in subsection (g) refers only to subsection (f), an inoperative
part of the statute. If that were the case, then execution “as
provided in this section” would mean no execution at all.
No. 14-1935 31
For these reasons, we disagree with the Ninth Circuit’s
interpretation of subsection (g). We note that the Bennett
majority drew support for its conclusion from our decisions
in Gates and Wyatt, apparently reading them as the plaintiffs
do here. See Bennett, 2016 WL 3257780, at *7. That’s under-
standable for the reasons we’ve already explained. To the
extent that Gates and Wyatt can be read as holding that
§ 1610(g) is a freestanding exception to execution immunity
for terrorism-related judgments, they are overruled. 6
To summarize: Section 1610(g) is not itself an exception
to execution immunity for terrorism-related judgments;
rather, it abrogates the Bancec rule for terrorism-related
judgments. Accordingly, terrorism victims with unsatisfied
§ 1605A judgments against foreign states may execute on the
foreign state’s property and the property of its agency or
instrumentality—without regard to the Bancec presumption
of separateness—but they must do so “as provided in this
section.” § 1610(g). That is, they must satisfy an exception to
execution immunity found elsewhere in § 1610—namely,
subsections (a) or (b).
6 Because this opinion overrules circuit precedent and creates a conflict
with the Ninth Circuit, it has been circulated to all judges in active
service in accordance with Circuit Rule 40(e). Chief Judge Wood and
Circuit Judges Posner, Flaum, Easterbrook, and Rovner did not partici-
pate, so a majority did not vote to rehear this case en banc. Circuit Judge
Hamilton has filed a dissent from the denial of en banc review, which is
attached to this opinion.
32 No. 14-1935
E. The Terrorism Risk Insurance Act
Finally, the plaintiffs argue that the Persepolis Collection
is subject to attachment and execution under section 201(a)
of TRIA, which permits a person who holds a judgment
against a state sponsor of terrorism to execute on the foreign
state’s assets (and those of certain agencies and instrumental-
ities) if the assets have been blocked by executive order
under certain international sanctions provisions. Pub. L.
No. 107-297, § 201(a), 116 Stat. 2322, 2337 (2002). An asset is
deemed to be blocked when it has been “seized or frozen”
by the United States under section 5(b) of the Trading with
the Enemy Act or under sections 202 or 203 of the Interna-
tional Emergency Economic Powers Act. Id. § 201(d)(2)(A),
116 Stat. at 2339.
In response to the 1979 Iran hostage crisis, President
Carter invoked his authority under the International Emer-
gency Economic Powers Act and issued Executive Order
12170, which froze all Iranian assets in the United States.
Exec. Order No. 12170, 44 Fed. Reg. 65,729 (Nov. 14, 1979).
The hostage crisis was resolved in 1981 with the Algiers
Accords, and in accordance with commitments made in that
agreement, President Carter issued Executive Order 12281,
which unblocked all uncontested property interests of the
Iranian government. Exec. Order No. 12281, 46 Fed. Reg.
7923 (Jan. 19, 1981). The order gave implementing authority
to the Treasury Department. Id. at 7924. The Treasury De-
partment’s Office of Foreign Assets Control issued regula-
tions broadly defining unblocked property as “all uncontest-
ed and non-contingent liabilities and property interests of
the Government of Iran, its agencies, instrumentalities, or
controlled entities.” 31 C.F.R. § 535.333(a). A property inter-
No. 14-1935 33
est is considered “contested only if the holder thereof rea-
sonably believes that Iran does not have title or has only
partial title to the asset,” and a belief is considered reasona-
ble “only if it is based on a bona fide opinion, in writing, of
an attorney licensed to practice within the United States
stating that Iran does not have title or has only partial title to
the asset.” Id. § 535.333(c).
There’s no evidence that the University contests Iran’s
title to the Persepolis Collection. To the contrary, the Univer-
sity has reaffirmed the terms of the long-term academic loan,
which unambiguously requires it to return the artifacts to
Iran when study is complete. Nor has the University sought
or obtained an attorney’s opinion that Iran lacks title or has
only partial title to the artifacts.
The plaintiffs argue that the Persepolis Collection re-
mains a blocked asset subject to execution because the
University asserted in a June 2004 district-court filing that it
maintained a “superseding possessory right.” But no one
disputes that the University has a present possessory interest
in the Persepolis Collection. Iran nonetheless retains full
ownership. The plaintiffs place great emphasis on the fact that
Iran has periodically inquired about the progress of the
study and has occasionally requested the return of the
artifacts. That simply reinforces the University’s present
possessory interest; it’s not evidence of contested title.
Alternatively, the plaintiffs claim that the artifacts have
been “reblocked” by President Obama’s Executive Order
13599. 77 Fed. Reg. 6659, 6659 (Feb. 8, 2012). But section 4(b)
of this order expressly exempts all “property and interests in
property of the Government of Iran that were blocked
pursuant to Executive Order 12170 of November 14, 1979,
34 No. 14-1935
and thereafter made subject to the transfer directives set
forth in Executive Order 12281 of January 19, 1981.” Id. at
6660.
The plaintiffs argue that “transfer directives” means a
directive from Iran, and because Iran has never directed that
these particular artifacts be transferred to it, the exception in
section 4(b) doesn’t apply to the Persepolis Collection. This
argument misreads the 2012 order, which refers to “transfer
directives set forth in” President Carter’s 1981 Executive
Order that all property meeting certain specified criteria be
returned to Iran. That is, the directive is categorical rather
than contingent on a particularized demand by Iran.
Accordingly, the district judge was right to conclude that
attachment and execution under section 201 of TRIA is
unavailable.
AFFIRMED.
No. 14-1935 35
HAMILTON, Circuit Judge, dissenting from denial of en banc
review. The panel opinion in Rubin v. Islamic Republic of Iran,
No. 14-1935, both creates a circuit split and overrules, in part,
two recent decisions of this court. Either step by itself would
ordinarily trigger our Circuit Rule 40(e), which requires cir-
culation within the court before publication to see if a major-
ity of active judges wish to rehear the case en banc.
In this case, a majority of active judges do not even have
the opportunity to vote. A majority are disqualified, so it is
impossible to hear this case en banc. In this rare situation, the
panel apparently has the power to overrule circuit precedent
and to create a circuit split without meaningful Rule 40(e) re-
view. Yet that step is a mistake that should not go without
comment. Also, most Rule 40(e) decisions settle the legal issue
in the circuit. In this rare situation, one panel’s decision to
overrule another’s decisions should not be treated as settling
the legal issue in this circuit. I respectfully dissent.
The issue is whether a provision of the Foreign Sovereign
Immunities Act (FSIA), 28 U.S.C. § 1610(g), offers a freestand-
ing basis for executing judgments against state sponsors of
terrorism, independent of § 1610(a) and (b). As dry and tech-
nical as that sounds, the issue has important practical conse-
quences for victims of state-sponsored terrorism. Most im-
portant, the Rubin panel’s view restricts execution to foreign
sovereign assets that are used: (a) by the foreign sovereign it-
self, (b) for a commercial activity, and (c) in the United States.
That reading shelters from execution a wide range of assets of
state sponsors of terrorism, such as the museum collection
here.
36 No. 14-1935
If, on the other hand, § 1610(g) offers a freestanding basis
for execution, then victims are not limited to property the sov-
ereign uses commercially in the United States. Victims of
state-sponsored terrorism may execute judgments against a
broader range of foreign sovereign assets. That’s the view of
the Ninth Circuit in Bennett v. Islamic Republic of Iran, — F.3d
—, — & nn. 4–7, 2016 WL 3257780, at *6–7 & nn. 4–7 (9th Cir.
2016), which held that § 1610(g) provides a freestanding basis
for executing judgments for state-sponsored terrorism. That
reading should enable the plaintiffs in Bennett to execute on
assets that were not used commercially in the United States.
See id. at *4 (cash in United States that was owed to Iranian
state bank for use of credit cards in Iran). That same reasoning
would extend to the museum collection at issue here.
Whether § 1610(g) provides a freestanding basis also af-
fects the procedures that victims of state-sponsored terrorism
must follow to execute their judgments. We dealt with proce-
dural issues in both Wyatt v. Syrian Arab Republic, 800 F.3d 331,
342–43 (7th Cir. 2015), and Gates v. Syrian Arab Republic, 755
F.3d 568, 575–77 (7th Cir. 2014) (alternative holding). In both
cases, we adopted the view that § 1610(g) is freestanding,
which broadens the rights of victims v. state sponsors of ter-
rorism, while still assuring due process of law.
The details of the textual arguments are laid out well in
Bennett and Rubin, and I will not repeat them. Both readings
of the text, I believe, are reasonable, meaning that the text is
ambiguous. The courts must choose between two statutory
readings: one that favors state sponsors of terrorism, and an-
other that favors the victims of that terrorism.
The FSIA contains detailed protections for foreign govern-
ments in most civil litigation. But over the years, Congress has
No. 14-1935 37
added special provisions for cases of state-sponsored terror-
ism, including the addition of § 1610(g) as part of § 1083 of
Public Law 110-181, the National Defense Authorization Act
for Fiscal Year 2008. Those special provisions, including
§ 1610(g), work together to make it easier for victims of state-
sponsored terrorism to pursue foreign sovereign assets in the
United States. In 2008, Congress even took the unusual step
of applying the new provisions to pending cases. P.L. 110-181,
§ 1083(c). See also Bennett, 2016 WL 3257780, at *8 (legislative
history of 2008 amendments shows broad intent to facilitate
execution of judgments against any property owned by state
sponsors of terrorism).
I recognize that “no legislation pursues its purposes at all
costs,” and that it “frustrates rather than effectuates legisla-
tive intent simplistically to assume that whatever furthers the
statute’s primary objective must be the law.” Rodriguez v.
United States, 480 U.S. 522, 525–26 (1987). But in interpreting
an ambiguous statutory text, we can and should draw on stat-
utory purpose and legislative history. We must choose one
side or the other. The balance here should weigh in favor of
the reading that favors the victims. We should not attribute to
Congress an intent to be so solicitous of state sponsors of ter-
rorism, who are also undeserving beneficiaries of the unusual
steps taken by the Rubin panel.
We should continue to follow Gates and Wyatt, and we
should avoid creating a conflict with Bennett, especially in a
case where the en banc court cannot act. We should allow the
Rubin plaintiffs to pursue broader categories of Iranian prop-
erty, including the Persepolis Collection at the University of
Chicago.