CHICAGO – Terror victims who won a $72 million judgment against the Islamic Republic of Iran can’t enforce it by seizing Persian artifacts at the University of Chicago, Seventh District appellate judges ruled on July 19.
Circuit Judge Diane Sykes wrote, “Seizing a foreign state’s property is a serious affront to its sovereignty, much more so than taking jurisdiction in a lawsuit.”
“Correspondingly, judicial seizure of a foreign state’s property carries potentially far reaching implications for American property abroad.”
Circuit Judge William Bauer concurred and so did Southern Illinois Chief District Judge Michael Reagan, sitting by designation.
They found ambiguity in U.S. terror law, and they resolved it in Iran’s favor.
They overruled two Seventh Circuit precedents from similar litigation, and their opinion conflicted with one that Ninth Circuit judges issued in June.
Such drastic steps normally require review by all judges in the circuit, but no review will occur because five of the 12 judges disqualified themselves.
Elimination of those five, plus exclusion of Sykes and Bauer, left only a minority of five who could have requested review.
Automatic denial of review provoked Circuit Judge David Hamilton to dissent.
“In this rare situation, the panel apparently has the power to overrule circuit precedent and to create a circuit split without meaningful review,” Hamilton wrote.
He wrote, “Yet that step is a mistake that should not go without comment.”
“The courts must choose between two statutory readings: one that favors state sponsors of terrorism, and another that favors the victims of that terrorism.”
He wrote that in interpreting statutory text, the court should draw on statutory purpose and legislative history.
“We should not attribute to Congress an intent to be so solicitous of state sponsors of terrorism,” he wrote.
“The balance here should weigh in favor of the reading that favors the victims.”
Eight victims of a 1997 attack in Jerusalem and their relatives originally sued Iran in federal court at Washington, D.C.
They won default judgment, but Iran did not pay.
They registered the judgment in the Northern District of Illinois in 2003, seeking to attach the Persepolis Collection and other artifacts at the University of Chicago.
Iran and the university moved for summary judgment, and District Judge Robert Gettleman granted it.
On appeal, the United States entered as friend of the court and took Iran’s side.