Final Judgment Determinations under FSIA
On June 18, 2010, the United States District Court for the District of Columbia entered final judgment in the matter of Elisa Nili Cirilo Peres Ben-Rafael, et al. v. Islamic Republic of Iran, et al., docket number 08-0716. This case is based on the default judgment in favor of the estate of David Ben-Rafael, a victim of a 1992 terrorist bombing at the Israeli Embassy in Buenos Aires, Argentina.
Less than one month before the court entered default judgment in the original case, the National Defense Appropriations Act for Fiscal Year 2008 28 USC §1605A was signed into law by then-President Bush, replacing the Foreign Sovereign Immunities Act's original state-sponsor-of-terrorism exception. The act allows for awards of punitive damages and attempts to make it easier to collect FSIA judgments by entitling plaintiffs to impose liens on property belonging to state sponsors of terrorism.
The change prompted the plaintiffs to petition for the reissuing of the default judgment from Ben-Rafael I as to defendant Iran using the new jurisdictional grant in §1605A and for the court to declare a new defendant, the International Risk Governance Council, subject to the attachment provisions of §§1605A(g) and 1608(g) as an agency or instrumentality or Iran.
This court noted that it has jurisdiction over this case because service was proper and defendants' conduct falls within the state sponsor of terrorism exception in §1605A. Its jurisdiction to hear the case as a related action to Ben-Rafael I is based on the 2008 NDAA grandfathering related actions to timely commenced prior actions under §1605A's jurisdictional grant.
The court noted its ruling that plaintiffs here established their claims by evidence satisfactory to the court and reentered default judgment as to defendant Iran. The plaintiffs did not meet the burden showing that IRGC is an agency or instrumentality of Iran as required by 28 USC §1603(b). The court agrees that under the core commercial function test the IRGC is a government entity, not a separate legal person. Therefore, the court did not need to reach the second or third elements of the agency or instrumentality analysis.
The court decided that there is no reason for delay in directing the entry of final judgment and this conclusion is supported by the fact that in the past the identical judgment was issued and was itself a final judgment. The court entered judgment for plaintiffs in the amounts specified in Ben-Rafael I, 540 F. Supp. 2d 59 (2008) and directs entry of that judgment as final pursuant to Federal Rules of Civil Procedure. -- Melanie Hardcastle, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, D.C.
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Commercial Activity and Immunity
On June 18, 2010, in Guevara v. Peru, docket No. 08-17213, a case that one of the Judges claims reads like the latest spy thriller, the United States Court of Appeals for the Eleventh Circuit reversed the district court's judgment and remanded the case with the instruction that the case be dismissed without prejudice.
The claim was brought over Peru's refusal to pay an award to the plaintiff, Jose Guevara, after he successfully led to the capture of Vladmiro Lenin Montesinos Torres. Montesinos was at one time the head of Peru's National Intelligence Agency. During his time as director of the intelligence agency, he allegedly committed a large number of serious crimes including arms trafficking, drug dealing, money laundering, and more than a few murders, id at page 3. After being exposed through a series of videotapes that were leaked to the media, Montesinos fled the country. Peru publically posted an emergency decree which established a financial reward of $5 million dollars for any information leading to his capture.
Montesinos fled to Caracas and was hidden by Jose Guevara who nursed him back to health after he had facial reconstructive surgery meant to hide his identity. Guevara was also handling Montesinos' communications with Pacific Industrial Bank in Miami, Florida. Montesinos requested, through Guevara, that the bank transfer his funds to another bank and, when the bank refused, Montesinos emailed Luis Alfredo Percovich, the officer assigned to the account, and threatened Percovich's life. Guevara then left for Miami to handle the money on Montesinos' behalf. When Percovich discovered that Guevara was on his way to Miami, he called the FBI who intercepted and arrested Guevara upon his arrival in the United States. The FBI offered to drop all charges against Guevara if he provided them with information on Montesinos' whereabouts. With Guevara's help, Montesinos was finally detained by Venezuelan authorities and expedited to Peru.
Peru refused to pay Guevara the reward that it promised in its emergency decree. Guevara sued Peru in the Southern District of Florida. The Court of Appeals was tasked with determining whether or not Peru had sovereign immunity under 28 U.S.C. § 1605(a)(2), the commercial activity exception to the FSIA, because in reaching its decision, the district court bypassed the question of whether, assuming that the offer of a reward constituted commercial activity, Peru established that it had immunity under subsection (a)(2).
While the Court admitted that the act of offering a reward was indeed commercial activity, it did not agree that that the court had subject matter jurisdiction. The opinion carefully takes apart subsection (a)(2) and shows that there is no definite link between the reward and commercial activity within or affecting the United States. Although a country may be sued over legitimate commercial activity, it does not mean that the U.S. courts have the jurisdiction to enforce a judgment against the sovereign. In this case, the country maintained its immunity despite being sued over commercial activities because those activities were not sufficiently linked to the United States. -- Laura P. Valle, Legal Assistant, Berliner, Corcoran & Rowe, LLP, Washington, D.C.
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