Bennett v. Islamic Republic of Iran

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 15, 2010 Decided September 10, 2010

No. 09-5147

MICHAEL BENNETT AND LINDA BENNETT, INDIVIDUALLY AND

AS CO-ADMINISTRATORS OF THE ESTATE OF MARLA ANN

BENNETT, DECEASED,

APPELLANTS

v.

ISLAMIC REPUBLIC OF IRAN, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:03-cv-01486-RCL)

John Vail argued the cause for appellants. With him on

the briefs was Thomas Fortune Fay.

Samantha L. Chaifetz, Attorney, U.S. Department of

Justice, argued the cause for appellees. With her on the brief

was Douglas N. Letter, Attorney. R. Craig Lawrence,

Assistant U.S. Attorney, entered an appearance.

Before: ROGERS, GARLAND and GRIFFITH, Circuit

Judges.

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Opinion for the Court filed by Circuit Judge GRIFFITH.

Opinion concurring in the judgment filed by Circuit

Judge GARLAND.

GRIFFITH, Circuit Judge: To satisfy a default judgment

against the Islamic Republic of Iran and the Iranian Ministry

of Information and Security, Michael and Linda Bennett

obtained writs of attachment against five of Iran’s former

diplomatic properties located in the District of Columbia. The

United States intervened and moved to quash the writs on the

ground that section 201 of the Terrorism Risk Insurance Act

precluded the attachments. The district court granted the

government’s motion, and we affirm.

I.

The Bennetts’ daughter, Marla Ann, was a student at

Hebrew University in Jerusalem when a bombing at the

school took her life. Hamas claimed responsibility for the

murder. The Bennetts sued in the district court alleging that

Iran’s support for Hamas played a part in the bombing that

killed their daughter. The Bennetts won a default judgment

against Iran in excess of $12 million. Bennett v. Islamic

Republic of Iran, 507 F. Supp. 2d 117 (D.D.C. 2007).

To satisfy the judgment, the Bennetts obtained writs of

attachment against Iran’s former embassy, ambassador’s

residence, and another diplomatic residence, as well as two

parking lots. The United States has been the custodian of

these properties since April 7, 1980, when it cut diplomatic

ties with Iran in response to the take-over of the American

Embassy in Tehran. See U.S. Dep’t of State Office of the

Legal Adviser, Digest of United States Practice in

International Law 1980, at 40–41, 333–34; see also Exec.

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Order No. 12,170, 3 C.F.R. 457 (1980) (freezing Iranian

assets in the United States). The United States has held Iran’s

diplomatic and consular properties for the past thirty years

pursuant to Article 45 of the Vienna Convention on

Diplomatic Relations, Apr. 18, 1961, 23 U.S.T. 3227, 500

U.N.T.S. 95, which requires signatory states to “respect and

protect” the premises and property of a mission if diplomatic

relations are severed or a mission is recalled, and the Foreign

Missions Act, 22 U.S.C. § 4305(c)(1) (2006), which

authorizes the Secretary of State to “protect and preserve” the

property of a foreign mission that has ceased conducting

diplomatic activities in the United States.

The United States intervened in the post-judgment

proceeding and moved to quash the writs on the ground that

the properties were not subject to attachment. The district

court granted the government’s motion. Bennett v. Islamic

Republic of Iran, No. 03-1486 (D.D.C. Mar. 31, 2009). The

Bennetts appealed, and we have jurisdiction pursuant to 28

U.S.C. § 1291. Whether the properties are subject to

attachment is a question of law that we review de novo. See

Price v. Socialist People’s Libyan Arab Jamahiriya, 389 F.3d

192, 197 (D.C. Cir. 2004).

II.

Diplomatic properties are generally immune from

attachment. See 28 U.S.C. §§ 1609–1610. The Terrorism Risk

Insurance Act (TRIA) carves out an exception to this general

rule, authorizing the attachment of “blocked assets” of state

sponsors of terrorism to satisfy judgments for compensatory

damages for acts of terrorism. Pub. L. No. 107-297, § 201(a),

116 Stat. 2322, 2337 (2002) (codified at 28 U.S.C. § 1610

note). TRIA defines blocked assets as those “seized or frozen

by the United States” for certain foreign policy purposes. See

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id. § 201(d)(2)(A). Blocked assets do not include, however,

“property subject to the Vienna Convention on Diplomatic

Relations”* that “is being used exclusively for diplomatic or

consular purposes.” Id. § 201(d)(2)(B)(ii). Such property may

not be attached.

The government and the Bennetts agree that the

properties subject to the writs are seized assets belonging to a

state sponsor of terrorism and that their attachment would

satisfy a judgment for compensatory damages for an act of

terrorism. The parties contest, however, whether the

properties are subject to the Vienna Convention on

Diplomatic Relations and “[are] being used exclusively for

diplomatic or consular purposes.” TRIA § 201(d)(2)(B)(ii).

The Bennetts concede that all the properties except the

diplomatic residence are subject to the Vienna Convention.

They have forfeited the argument that the residence is not

because they raised it for the first time on appeal. See Potter

v. District of Columbia, 558 F.3d 542, 547 (D.C. Cir. 2009).

That leaves us with only the question of whether the

properties are “being used exclusively for diplomatic or

consular purposes.” TRIA § 201(d)(2)(B)(ii).

The United States claims that it has held the attached

properties in custody since 1980 to fulfill its obligations under

Article 45 of the Vienna Convention to “respect and protect”

the premises of a former mission after diplomatic relations

between two states have been severed, as well as the Foreign

Missions Act. See Decl. of Claude J. Nebel, Deputy Assistant

*

TRIA defines “property subject to the Vienna Convention on

Diplomatic Relations” as property for which “the attachment in aid

of execution or execution of which would result in a violation of an

obligation of the United States under [the] Vienna Convention.”

TRIA § 201(d)(3).

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Sec’y for Diplomatic Sec. & Deputy Dir. of the Office of

Foreign Missions, July 11, 2008, ¶ 10. On March 10, 1983,

the United States announced that it would rent out Iran’s

diplomatic properties periodically to generate income to pay

for the upkeep required by the Vienna Convention. Id. ¶ 11.

Since then, the United States has at times rented Iran’s

properties to other foreign missions and to private parties and

used the proceeds to maintain and repair the properties

consistent with its treaty obligations. Any excess income from

the rentals has been placed in an Iranian bank account that,

like all Iranian assets in America, has been frozen by the

United States. Id. ¶ 12.

There is no dispute that the United States has used these

properties for a diplomatic purpose. The Bennetts have

conceded this point. Appellants’ Br. at 16. According to the

government, that concession resolves the dispute because the

sole inquiry under the statute is the purpose for which the

United States uses the properties. The Bennetts insist that the

statute requires us to look at the nature of the use as well.

“Statutory construction must begin with the language

employed by Congress and the assumption that the ordinary

meaning of that language accurately expresses the legislative

purpose.” Engine Mfrs. Ass’n v. South Coast Air Quality

Management Dist., 541 U.S. 246, 252 (2004). The Bennetts

contend that renting the properties to third parties is a

nondiplomatic use, which makes the properties subject to

attachment. Their argument assumes that TRIA’s protection

from attachment requires a diplomatic use of the property.

That requirement finds no support in the text of the statute,

which provides only that the property “is being used

exclusively for diplomatic and consular purposes.” TRIA

§ 201(d)(2)(B)(ii) (emphasis added). The adjectives

“diplomatic” and “consular” modify the noun “purpose,” not

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the verb “used.” We read the verb phrase “is being used . . .

for” to carry its ordinary meaning of “ma[de] instrumental to

an end or process.” WEBSTER’S THIRD NEW INTERNATIONAL

DICTIONARY 2524 (Philip Babcock Gove ed., Merriam-

Webster Inc. 1981). The statute provides that the property

retains its immunity from attachment only so long as it “is

being used exclusively for diplomatic and consular purposes.”

TRIA § 201(d)(2)(B)(ii). The Bennetts cite several cases from

our sister circuits interpreting what they consider to be

analogous portions of the Foreign Sovereign Immunities Act,

28 U.S.C. § 1602–11. See, e.g., Conn. Bank of Commerce v.

Republic of Congo, 308 F.3d 240, 251–52 (5th Cir. 2002)

(interpreting a provision permitting attachment of property

“used for a commercial activity”); Joseph v. Office of the

Consulate General of Nigeria, 830 F.2d 1018, 1024 (9th Cir.

1987) (construing the commercial activity exception to

foreign sovereign immunity, which “focus[es] on the nature

of the transaction at issue rather than its purpose”). But unlike

the provisions at issue in those cases, TRIA, by its plain

language, is concerned only with the purpose for which the

property is used, and not the way the property is used in

service of that end.

The Bennetts argue that our reading of section

201(d)(2)(B)(ii) is mistaken because it fails to take into

account section 201(b)(2)(A) of TRIA, which creates another

means to protect from attachment properties subject to the

Vienna Conventions. Section 201(b)(2)(A) authorizes the

President to immunize such properties from attachment so

long as they have not “been used by the United States for any

nondiplomatic purpose (including use as rental property).”

TRIA § 201(b)(2)(A). The parenthetical phrase, the Bennetts

argue, establishes that any “use” of a seized asset “as a rental

property” invariably has a nondiplomatic purpose. Not only is

that not true as a descriptive matter, but that view of the

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provision cannot be squared with its plain meaning, which

calls for an inquiry into the purpose of the use and not the

type of use—the same inquiry required by section

201(d)(2)(B)(ii). Far from announcing a categorical rule that

any “use as a rental” is in pursuit of a “nondiplomatic

purpose,” the parenthetical simply acknowledges that the

government may have a nondiplomatic purpose for renting the

property.

We are equally unpersuaded by the Bennetts’ argument

that our interpretation of section 201(d)(2)(B)(ii) renders this

provision superfluous because it duplicates protection already

found in the Foreign Missions Act. Unlike two provisions

within a single statute, we need not construe separate statutes

to avoid redundancy. Cf. U.S. ex rel Miller v. Bill Harbert

Intern. Const., Inc., 608 F.3d 871, 885-86 (D.C. Cir. 2010)

(regarding as effective overlapping statutes capable of

coexistence). In any event, these statutes are not duplicative.

To be sure, the Foreign Missions Act prohibits attachment of

foreign mission property in custody of the State Department.

See 22 U.S.C. § 4308(f). But the Foreign Missions Act does

not apply to property subject to TRIA. See TRIA § 201(a)

(providing a mechanism for the attachment of various assets

“[n]otwithstanding any other provision of law”); cf. Weinstein

v. Islamic Republic of Iran, 609 F.3d 43, 48 (2d Cir. 2010)

(concluding that TRIA’s use of the phrase “notwithstanding

any other provision of law” demonstrates a clear intent to

abrogate previous, conflicting law). Thus, section

201(d)(2)(B)(ii) is not duplicative, but creates a protection

from attachment that would not otherwise exist.

Finally, we note that it may very well be that the private

parties who rented the properties did so in service of

nondiplomatic ends. But their purposes are irrelevant to the

protection Congress provided for these properties. TRIA says

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nothing about the purpose anyone other than the United States

might have in its use of the properties. “Blocked assets” are

assets “seized or frozen by the United States.” TRIA

§ 201(d)(2)(A) (emphasis added). Because TRIA’s provisions

apply only to property possessed by the United States, we

think the statute clearly commands that the purpose of the

United States is the only relevant inquiry.

Our concurring colleague finds the statute ambiguous on

this point, and concludes that the use to which a private tenant

puts a former diplomatic property may render it subject to

attachment under TRIA. Concurring Op. at 2-3. But if there

were such ambiguity, we would still conclude that attachment

is precluded in light of the fundamental canon of statutory

interpretation that “[a] treaty will not be deemed to have been

abrogated or modified by a later statute unless such purpose

on the part of Congress has been clearly expressed.” Cook v.

United States, 288 U.S. 102, 120 (1933); see Roeder v.

Islamic Republic of Iran, 333 F.3d 228, 237 (D.C. Cir. 2003).

Congress, in defining the terrorist state property available for

attachment, explicitly carved out an exception to enable the

United States to fulfill its treaty obligations under the Vienna

Convention. TRIA § 201(d)(2)(B)(ii). In this case, permitting

attachment would render the United States unable to respect

and protect Iran’s former diplomatic properties as required by

Article 45 of the Vienna Convention. We do not think

Congress intended to construct such obstacles to the

performance of the nation’s obligations under the Vienna

Convention.

Because there is no question that the sole purpose for

which the United States rented the properties was to facilitate

compliance with its treaty obligations under the Vienna

Convention, the properties are not subject to attachment under

TRIA. As the Fifth Circuit has explained, “by using rental

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proceeds to carry out routine maintenance, the government

‘respect[s] and protect[s]’ the property presumably for the

time when the two countries might resume diplomatic and

consular relations.” Hegna v. Islamic Republic of Iran, 376

F.3d 485, 495 (5th Cir. 2004). Collecting rent on a property in

order to ensure the upkeep required by the Vienna Convention

does not permit its attachment under TRIA.

III.

The judgment is

Affirmed.

GARLAND, Circuit Judge, concurring in the judgment: The

Terrorism Risk Insurance Act (TRIA) authorizes the attachment

of “blocked assets” of state sponsors of terrorism to satisfy

judgments won by victims of terrorist acts. TRIA § 201(a).

Section 201(d) of TRIA provides that attachable blocked assets

do not include former diplomatic property that “is being used

exclusively for diplomatic or consular purposes.” Id.

§ 201(d)(2)(B)(ii). I agree with my colleagues that property the

State Department leases to another foreign mission is immune

from attachment because it is property that is being used

exclusively for diplomatic purposes. But I cannot agree that

property the Department leases to a private party -- which that

party then uses for its own private purposes -- is property that is

being used exclusively for diplomatic purposes.

I concede that congressional drafting has not made our task

easy. The difficulty arises because the section is written in the

passive voice -- referring to property that “is being used

exclusively” -- which leaves unanswered the question: being

used by whom? My colleagues conclude that the section refers

solely to use by the United States. They therefore hold that the

tenant’s use of the property is irrelevant as long as the State

Department’s only purpose in renting it is to generate revenue

to comply with its Vienna Convention obligations.

This reading is reasonable, but I do not think it is the better

interpretation. No one would say that property a tenant uses as

a gin joint is being used exclusively for educational purposes,

even if the landlord uses the rent to send his children to college.

Nor is the court’s reading supported by the fact that TRIA

applies only to property “seized or frozen by the United States.”

TRIA § 201(d)(2)(A) (emphasis added). The italicized phrase

tells us which actor’s seizure is relevant, but it does not tell us

which actor’s use is. Indeed, the fact that Congress added “by

the United States” to the description of the seizure of property

in § 201(d)(2)(A), but not to the description of the use of

property in § 201(d)(2)(B), suggests it thought that the uses to

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which both the United States and its tenant put a property were

relevant.

This inference is further supported by the waiver provision

of TRIA, which authorizes the President to prevent the

attachment of blocked assets on a case-by-case basis, unless the

property “has been used by the United States for any

nondiplomatic purpose.” Id. § 201(b)(2)(A) (emphasis added).

As is clear from that provision, Congress plainly knew how to

specify use by the United States when that was the use it

regarded as relevant. And “where Congress includes particular

language in one section of a statute but omits it in another

section of the same Act, it is generally presumed that Congress

acts intentionally and purposefully in the disparate inclusion or

exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983)

(internal quotation marks omitted).

A final problem with the court’s reading is that it reduces

Congress’ purpose to one of financial accounting, rather than to

making assets available for the victims of terrorist attacks. That

is the necessary consequence of focusing on how the United

States uses the rent, rather than on how the tenant uses the

property. In the court’s view, rental property remains immune

as long as the State Department applies the rent to maintenance

expenses, but it becomes available for attachment if the

Department returns the rent to the Treasury and uses

appropriated funds to pay for maintenance. Even if Congress

were concerned about how the Department keeps its books, it is

hard to see why it would address this concern in a section

entitled, “Satisfaction of Judgments from Blocked Assets of

Terrorists.” TRIA § 201.

For these reasons, I conclude that former diplomatic

property that a private tenant uses for nondiplomatic purposes is

not immune from attachment under TRIA § 201(d) as property

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that “is being used exclusively for diplomatic or consular

purposes.” Id. § 201(d)(2)(B)(ii).

But this conclusion does not end the analysis. The

remaining question is whether the property at issue here “is

being” used exclusively for diplomatic purposes. Although it is

clear that some of the properties have been rented to private

tenants and have been used by those tenants for nondiplomatic

purposes, there is no record evidence that any property is being

used for such purposes. The difference in tense is dispositive.

In protecting from attachment property that “is being used

exclusively for diplomatic or consular purposes,” Congress

expressly employed the present tense. TRIA § 201(d)(2)(B)(ii)

(emphasis added). Where “Congress could have phrased its

requirement in language that looked to the past . . . but . . . did

not choose this readily available option,” the “most natural

reading” is to construe the statute in the present (or present and

future) tense. Gwaltney of Smithfield, Ltd. v. Chesapeake Bay

Found. Inc., 484 U.S. 49, 57 (1987); see Carr v. United States,

130 S. Ct. 2229, 2236 (2010) (“By implication, . . . the

Dictionary Act instructs that the present tense generally does not

include the past.” (referring to 1 U.S.C. § 1)). The inference that

Congress’ choice of tense was intentional is even stronger

where, as here, the legislature employed the present tense in one

subsection and the past tense in another. Compare TRIA

§ 201(d)(2)(B)(ii) (excepting from attachment all specified

property that “is being used exclusively for

diplomatic . . . purposes” (emphasis added)), with id.

§ 201(b)(2)(A) (authorizing the President to waive attachment

on a case-by-case basis unless the property “has been used by

the United States for any nondiplomatic purpose” (emphasis

added)).

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Given the statute’s use of the present tense, I would hold

that TRIA § 201(d)’s protection against attachment applies to

property that “is being used exclusively for diplomatic or

consular purposes” at the time the writ of attachment is filed,

regardless of how the property was previously used. This

construction follows the course set by the Supreme Court in

interpreting analogous statutory language. In Dole Food Co. v.

Patrickson, for example, the Court construed the Foreign

Sovereign Immunities Act, which requires an entity seeking to

remove a lawsuit to federal court to show that “a majority of

[its] shares . . . is owned by a foreign state.” 538 U.S. 468, 473

(2003) (emphasis added) (quoting 28 U.S.C. § 1603(b)(2)). The

Court held that “the plain text of this provision, because it is

expressed in the present tense, requires that instrumentality

status be determined at the time suit is filed.” Id. at 478

(emphasis added). Similarly, in Gwaltney v. Chesapeake Bay

Foundation, the Court determined that the Clean Water Act’s

authorization of citizen suits against defendants “alleged to be

in violation” of permit conditions “does not permit citizens suits

for wholly past violations.” 484 U.S. at 64 (emphasis added).

Rather, it requires that the defendant be alleged to “‘be in

violation’ . . . at the commencement of suit.” Id. (emphasis

added) (quoting 33 U.S.C. § 1365(a)(1)).

In this case, the requirement that the property “is being used

exclusively for diplomatic or consular purposes” is satisfied by

the district court’s indication that, at the time the writs were

issued, all of the properties were vacant and being held by the

United States pursuant to its obligations under the Vienna

Convention. See Bennett v. Islamic Republic of Iran, No. 03-

1486, Mem. Op. at 21 (D.D.C. Mar. 31, 2009). Accordingly, I

concur in my colleagues’ decision to affirm the quashing of the

writs.

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I note, however, that if the United States again rents these

properties to private tenants who use them for nondiplomatic

purposes, the plaintiffs should be free to attach them to satisfy

their judgments. Although the government fears that permitting

attachment under any circumstances “could have significant

implications for U.S. foreign policy,” Appellee’s Br. 16, and my

colleagues warn that attachment could interfere with the United

States’ ability to fulfill its treaty obligations, the government can

eliminate these concerns by ensuring that the properties are used

exclusively for diplomatic purposes. If diplomatic tenants are

unavailable, this may require the State Department to pay for

maintenance from appropriated funds rather than rental income.

But that presents at worst an economic, not a foreign policy

problem. It is certainly a constraint that Congress is free to

impose on the Department.