April 23, 2015
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 03 C 9370 -
Robert W. Gettleman, Judge.
Bauer and Sykes, Circuit Judges, and Reagan, Chief District
September 1997 three Hamas suicide 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 Republic of Iran for its role in
providing material support to the attackers. Iran was subject
to suit as a state sponsor of terrorism 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.
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 museums); Rubin
v. Islamic Republic of Iran, 33 F.Supp. 3d 1003 (N.D.
Ill. 2014) (same). This appeal concerns the last decision on
plaintiffs sought to execute on four collections of ancient
Persian artifacts located within the territorial jurisdiction
of the Northern District of Illinois: the Persepolis
Collection, 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 was last here on some procedural issues early in the
attachment 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
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.
affirm. The assets are not blocked by existing executive
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 commercial use by the foreign state itself, not a
third party. Iran did not put the artifacts to any commercial
§ 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 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.
1610(g) lifts the Bancec rule for holders of
terrorism-related judgments, allowing attachment in aid of
execution "as provided in this section" without
regard to the presumption of separateness-that is, without
the requirement of establishing alter-ego status or showing
an injustice. The phrase "as provided in this
section" refers to the immunity 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.
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
academic study (the Chogha Mish Collection). Most items in
this collection were returned to Iran in 1970, but the
University has since located some objects previously missing
from the collection. In the 1980s and 1990s, the Oriental
Institute received several small donations of Persian
artifacts from Iran and other donors. These artifacts are not
really a discrete collection, but the parties refer to them
as the "Oriental Institute Collection, " so
we'll do the same.
plaintiffs are American victims of a suicide-bomb attack
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.)
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
District 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. (We'll refer to the University
and the Field Museum collectively as "the Museums"
unless the context requires otherwise.)
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 instrumentality) to satisfy a
judgment obtained under the terrorism exception to
jurisdictional sovereign immunity.
we sent the case back to the district court, the parties
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.
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.
in their response to the summary-judgment motion, 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 statutory basis to execute on the artifacts, the judge
entered judgment for Iran and the Museums. The plaintiffs
appealed, reprising all three arguments.
Which Artifacts Remain at Issue?
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 property is located around the world. We would
need some hint from Congress before we felt justified in
adopting such a breathtaking assertion of extraterritorial
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.
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 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
Herzfeld and the Oriental Institute Collections remain 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 community 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 collections;
the plaintiffs have not meaningfully contested this point.
don't need to resolve any questions about the provenance
of the Herzfeld and Oriental Institute Collections or explore
the circumstances under which the Museums acquired 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 ownership of these
artifacts. The plaintiffs have not given us any reason to
disturb this ruling, and we see none ourselves.
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
traced the history of the foreign sovereign immunity doctrine
and the enactment of the FSIA in our earlier opinion. See
Rubin, 637 F.3d at 792–94. A brief repetition is
helpful to a proper understanding of the
statutory-interpretation questions presented here.
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 instrumentalities."
Id. Under the common-law doctrine, a diplomatic
representative of the foreign state would request a
"suggestion of immunity" from the State Department,
and if the State Department obliged, the court would
surrender jurisdiction 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.
a court acquired jurisdiction and awarded judgment against a
foreign state, "the United States gave absolute 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.
the State Department adopted a "restrictive" theory
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 commercial in character (jure
gestionis)." Saudi Arabia v. Nelson, 507
U.S. 349, 359–60 (1993). Even under this theory,
however, foreign sovereign property remained absolutely
immune from execution. Autotech, 499 F.3d at 749.
State Department's shift to the restrictive theory of
jurisdictional immunity "'thr[ew] immunity
determinations into some disarray, ' since 'political
considerations sometimes 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
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 sovereign in an American
court must stand on the Act's text. Or. it must
fall." Id. at 2256.
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 attachment[, ] 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. (Section 1611 of Title 28 of the U.S. Code
lists exceptions to the exceptions and is not implicated
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 commercial
activity in the United States" if one of three
listed conditions is met.
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
execution of judgments, allowing successful claimants to
attach and execute on foreign sovereign property "used
for a commercial activity" in this country, at least in
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.
28 U.S.C. ...