Opinion analysis: Court upholds narrow construction of foreign immunity law in terrorism case

The Supreme Court ruled today that U.S. victims of a 1997 terrorist attack in Jerusalem cannot rely on a provision of the Foreign Sovereign Immunities Act to seize a collection of Iranian antiquities held by the University of Chicago. The decision put an end to the latest efforts by the victims and their families to recover some of the $71.5 million default judgment entered by a federal court in Washington, D.C., against Iran for that country’s role in providing support for Hamas, the terrorist group that carried out the bombing.

The dispute before the Supreme Court centered on the interpretation of the FSIA, which carves out several narrow exceptions to the general rule that a foreign state and its “agencies and instrumentalities” (organizations or companies owned by the foreign state) cannot be sued in U.S. courts. Even if (as here) a lawsuit is allowed to go forward, the foreign country’s property cannot normally used to satisfy a judgment against it. Nor – again, subject to some exceptions – can the judgment be executed against the foreign state’s agencies or instrumentalities, on the theory that they are separate entities.

Reading the law narrowly, the U.S. Court of Appeals for the 7th Circuit denied the victims’ request to gain control of the artifacts. Section 1610(g) of the FSIA provides that when a judgment is entered against a foreign state under the “terrorism” exception to general immunity, both the state’s property and the property of any “agency or instrumentality” of the state can be transferred to the prevailing party, without having to consider five different factors related to the foreign government’s control over the property. That provision, the court of appeals concluded, was enacted to allow plaintiffs in terrorism cases to overcome the normal presumption that a judgment against a foreign state cannot be enforced against the state’s agencies and instrumentalities. It does not create a “freestanding terrorism exception” to immunity, the court of appeals ruled; one of the other exceptions to immunity in Section 1610 must still apply.

The victims urged the Supreme Court to read the law more broadly, as “part of a sweeping amendment to the terrorism exception to foreign sovereign immunity that was designed to remove all impediments to terrorism victims’ civil lawsuits against designated state sponsors of terrorism.” But the justices declined to do so. In a unanimous opinion by Justice Sonia Sotomayor, the eight-member court (with Justice Elena Kagan recused, presumably because she was involved in the case when she served as the U.S. solicitor general) found nothing in Section 1610(g) to suggest that Congress intended the provision to serve as an independent exception to general immunity. If anything, the court reasoned, the provision’s use of the phrase “as provided in this section” signals the opposite – that one of the other specific exemptions must apply. “Out of respect for the delicate balance that Congress struck in enacting the FSIA,” the court concluded, it would not read a freestanding “terrorism” exception into the law “absent a clearer indication of Congress’ intent.”

Today’s decision was a victory not only for Iran, but also for the federal government. The United States had strongly condemned the terrorist attacks at the heart of this case and expressed its “deep sympathy” for the victims, but it had nonetheless urged the justices to uphold the 7th Circuit’s decision, on the ground that a contrary ruling could have a significant effect on the United States’ foreign relations.

This post was originally published at Howe on the Court.