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Global Impact of U.S. Decision
In an unprecedented FSIA ruling, a U.S. federal court authorized a private party to seek the disclosure of all U.S. assets owned by a foreign government. The ruling was made on January 18, 2008 in the matter Jenny Rubin, et al. v. The Islamic Republic of Iran, et. al., Case No. 03-cv-9370.
The United States District Court for the Northern District of Illinois denied Iran’s motion to bar general assets discovery, that is discovery of all Iranian assets in the United States. The plaintiffs had initiated a citation proceeding in Illinois seeking the attachment of ancient Persian artifacts belonging to Iran and being studied since the 1930s by the University of Chicago. The motion was made in an effort to satisfy a 2003 default judgment against the Islamic Republic of Iran and others for damages suffered in a bombing in Jerusalem. Although the initial focus of the proceeding was just the artifacts, this latest order denying Iran’s motion grants the Plaintiffs general assets discovery against Iran. The Court held that general asset discovery is necessary in order to determine whether particular property falls within the exceptions to the general rule of immunity available to foreign sovereigns under the Foreign Sovereign Immunities Act.
However, in granting such discovery against a foreign state the decision is unprecedented and undesirable for all sovereign states. It sets a specific precedent for courts in foreign states to demand that the United States list all of its properties in those states. Thus, for example, a French court may demand that the United States provide a list of all U.S. assets in France. Recognizing this, the United States filed a Statement of Interest in support of Iran, urging the Court to exercise circumspection in light of the potential foreign policy implications of requiring broad discovery of a foreign sovereign. The Court held, however, that notwithstanding comity and foreign policy concerns, the Plaintiffs were entitled to broad discovery of all of Iran’s assets in the United States.
The Algiers Accords between the United States and Iran also supported Iran's position. The 1981 bilateral agreement created a set of provisions to resolve the 1979 hostage crisis. According to Iran, Executive Order No. 12,281, which implemented the Accords, forbids liens on Iranian property in the United States. A general discovery request, according to Iran-U.S. Claims Tribunal precedent, created such a lien, hence putting the United States in breach of the Accords. Iran also took issue with the sufficiency of service. Iran argued it was not properly served with notice of the default judgment that the Plaintiffs sought to enforce in this proceeding. Finally, Iran claimed that the Foreign Sovereign Immunities Act and Terrorism Risk Insurance Act limit the assets against which the Plaintiffs can enforce their judgment, denying them general discovery. The Court rejected all of these arguments as well. -- Genevieve Cohoon, legal assistant, Berliner, Corcoran & Rowe, LLP, Washington
Disclosure: The author is a legal assistant in the firm that represents Iran in the above matter.
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