Jenny Rubin v. Islamic Republic of

In the

United States Court of Appeals

For the Seventh Circuit

No. 08-2805

JENNY R UBIN , et al.,

Plaintiffs-Appellees,

and

D EBORAH D. P ETERSON, et al.,

Intervenors-Appellees,

v.

T HE ISLAMIC R EPUBLIC OF IRAN,

Defendant-Appellant,

and

F IELD M USEUM OF N ATURAL H ISTORY and

U NIVERSITY OF C HICAGO, THE O RIENTAL INSTITUTE,

Intervenors.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 CV 9370—Blanche M. Manning, Judge.

A RGUED O CTOBER 26, 2009—D ECIDED M ARCH 29, 2011

2 No. 08-2805

Before B AUER and SYKES, Circuit Judges, and SIMON,

District Judge.Œ

S YKES, Circuit Judge. The Islamic Republic of Iran

appeals two orders issued in connection with a long-

running effort to collect on a large judgment entered

against it for its role in a 1997 terrorist attack. The plain-

tiffs are American citizens who were injured in a

brutal suicide bombing in Jerusalem, Israel, carried out

by Hamas with the assistance of Iranian material sup-

port and training. The victims obtained a $71 million

default judgment against Iran in federal district court in

Washington, D.C., and then registered that judgment in

the Northern District of Illinois for the purpose of at-

taching two collections of Persian antiquities owned by

Iran but on long-term academic loan to the University of

Chicago’s Oriental Institute. They also sought to attach

a third collection of Persian artifacts owned by Chicago’s

Field Museum of Natural History. They contend that

this collection, too, belongs to Iran but was stolen and

smuggled out of the country in the 1920s or 1930s and

later sold to the museum. Iran’s appeal requires us to

consider the scope and operation of § 1609 of the Foreign

Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C.

§§ 1330(a), 1602-1611, which provides that a foreign

state’s property in the United States is immune from

attachment unless a specific statutory exception to im-

munity applies.

Œ

The Honorable Philip P. Simon, Chief Judge of the United

States District Court for the Northern District of Indiana, sitting

by designation.

No. 08-2805 3

The district court held that the immunity codified in

§ 1609 is an affirmative defense personal to the foreign

sovereign and must be specially pleaded. Because Iran

had not appeared in the attachment proceeding, this

ruling had the effect of divesting the collections of their

statutory immunity unless Iran appeared and affirma-

tively asserted it. So Iran appeared and made the im-

munity claim. In response the plaintiffs served Iran

with requests for discovery regarding all Iranian-

owned assets located anywhere in the United States. Not

surprisingly, Iran resisted, maintaining that such far-

flung and open-ended discovery about its American-

based property was inconsistent with the FSIA. The

district court disagreed and ordered general-asset dis-

covery to proceed. Iran appealed.

The district court’s discovery order effectively rejected

Iran’s claim of sovereign immunity and is therefore

immediately appealable under the collateral-order doc-

trine. The court’s earlier order, which denied § 1609

immunity in the absence of an appearance by the

foreign state, is also properly before this court. That

order raises closely related questions about sovereign-

property immunity and is revived for review by

Iran’s interlocutory appeal of the general-asset dis-

covery order.

Both orders are seriously flawed; we reverse. The

district court’s approach to this case cannot be re-

conciled with the text, structure, and history of the

FSIA. Section 1609 of the Act provides that “the

property in the United States of a foreign state shall

4 No. 08-2805

be immune from attachment” unless an enumerated

exception applies. (Emphasis added.) This section

codifies the longstanding common-law principle that a

foreign state’s property in the United States is presumed

immune from attachment. This presumptive immunity,

when read with other provisions of the FSIA, requires

the plaintiff to identify the specific property he seeks

to attach; the court cannot compel a foreign state to

submit to general discovery about all its assets in the

United States. The presumption of immunity also

requires the court to determine—sua sponte if neces-

sary—whether an exception to immunity applies; the

court must make this determination regardless of

whether the foreign state appears.

I. Background

This appeal has its roots in a vicious terrorist attack.

On September 4, 1997, Hamas carried out a triple

suicide bombing in the crowded Ben Yehuda Street

pedestrian mall in Jerusalem. See Campuzano v. Islamic

Republic of Iran, 281 F. Supp. 2d 258, 261 (D.D.C. 2003).

Five bystanders were killed and nearly 200 were in-

jured. Hamas claimed responsibility for the bombing, and

Israeli police arrested two Hamas operatives who partici-

pated in the attack. Id. at 261-62. They and other members

of their Hamas cell gave Israeli authorities information

about the planning, financing, and execution of this act of

terrorism. The two were later convicted of multiple counts

of murder and attempted murder. Id.

No. 08-2805 5

The plaintiffs here—Jenny Rubin and her mother,

Deborah Rubin; Stuart Hersh and his wife, Renay Frym;

Noam Rozenman and his parents, Elena and Tzvi

Rozenman; Daniel Miller; and Abraham Mendelson—are

American citizens who were grievously wounded in

the September 4, 1997 bombing or suffered severe emo-

tional and loss-of-companionship injuries as a result

of being closely related to those who were physically

hurt. These victims filed suit against Iran in federal

district court in Washington, D.C., alleging that Iran was

responsible for the bombings as a result of the training

and support it had provided to Hamas. Id. Jurisdiction

was predicated on § 1605(a)(7) (1996) of the FSIA, and

the district court consolidated the action with another

suit filed by a separate group of victims of the bombing.

Id. at 261. Iran was properly served but defaulted.

Pursuant to the requirements of § 1608(e) of the FSIA,

the district court held a three-day evidentiary hearing

before issuing a default judgment against Iran for

$71.5 million in compensatory damages.1 Id. at 272-77.

1

The victims also received an award of punitive damages

against other defendants—senior Iranian officials—but this

attachment proceeding involves only Iran itself. Liability

against Iran and its officials was premised on § 1605(a)(7),

read in conjunction with the “Flatow Amendment,” 28 U.S.C.

§ 1605 note, to create a private cause of action against

foreign sovereigns for acts of terrorism, including extra-

judicial killings. In a separate case, the D.C. Circuit later

held that no such private cause of action against foreign sover-

(continued...)

6 No. 08-2805

At this point the plaintiffs faced a problem familiar to

Iran’s judgment creditors: They had won a significant

judgment but enforcement options were limited. A nation-

wide search for attachable Iranian assets eventually led

to Chicago and its rich collection of ancient artifacts

housed in the city’s major museums. The plaintiffs regis-

tered their judgment with the United States District

Court for the Northern District of Illinois and served the

University of Chicago’s Oriental Institute and later the

Field Museum of Natural History with a Citation to

Discover Assets pursuant to Rule 69(a) of the Federal

Rules of Civil Procedure and chapter 735, section 5/2-1402

of the Illinois Compiled Statutes.2 The plaintiffs iden-

tified three specific collections in the museums’ possession

that they sought to attach and execute against: the

Persepolis and Chogha Mish Collections at the Oriental

Institute, and the Herzfeld Collection at the Field

Museum.3

1

(...continued)

eigns (as opposed to individuals) exists. See Cicippio-Puleo

v. Islamic Republic of Iran, 353 F.3d 1024, 1033 (D.C. Cir. 2004).

Congress responded by supplying a cause of action through

the National Defense Authorization Act of 2008, Pub. L. No. 110-

181, 122 Stat. 3, which amended this section of the FSIA.

This history has no effect on the merits of this appeal.

2

The Field Museum and the Oriental Institute have jointly

briefed this appeal. We refer to them collectively as “the

museums” unless the context requires otherwise.

3

The Rubin plaintiffs are pursuing similar litigation against

Boston-area museums that possess artwork owned by Iran. See

(continued...)

No. 08-2805 7

The first two are collections of Persian antiquities

recovered in excavations in the Iranian city of Persepolis

in the 1930s and on the Chogha Mish plain in south-

western Iran in the 1960s. Archaeologists from the Uni-

versity of Chicago led these excavations, and Iran

loaned the artifacts to the Oriental Institute for long-

term study and to decipher the Elamite writing that

appears on some of the tablets included among the dis-

coveries. The terms of the academic loan require the

Oriental Institute to return the collections to Iran when

study is complete. The Institute says it has finished study-

ing the Chogha Mish Collection and is ready to return

it to Iran pending resolution of a claim before the Iran-

United States Claims Tribunal in the Hague.4 Study of

the Persepolis Collection is apparently ongoing, al-

3

(...continued)

Rubin v. Islamic Republic of Iran, 456 F. Supp. 2d 228 (D. Mass.

2006).

4

The Iran-United States Claims Tribunal was established in

January 1981 under the terms of the Algiers Accords, which

resolved the crisis precipitated by Iran’s seizure of American

hostages at the United States Embassy during the Iranian

Revolution in 1979. Ministry of Defense & Support for the Armed

Forces of the Islamic Republic of Iran v. Elahi, 129 S. Ct. 1732,

1736 (2009). After the hostages were taken, President Carter

blocked Iranian assets within the United States. In connection

with the release of the hostages, the Algiers Accords restored

the financial position of Iran to that which existed before the

crisis. Id. The Tribunal adjudicates property claims between

the two states and their nationals in accordance with the terms

of the Algiers Accords. Id.

8 No. 08-2805

though the Institute says it has returned parts of this

collection to Iran.

The third group of artifacts is known as the

Herzfeld Collection, after the German archaeologist

Ernst Herzfeld who worked on excavations in Persia

for 30 years in the early twentieth century. See Wikipedia,

Ernst Herzfeld, http://en.wikipedia.org/wiki/Ernst_

Herzfeld (last visited Mar. 10, 2011). The Field Museum

purchased a set of prehistoric pottery, metalworks, and

ornaments from Herzfeld in 1945. The plaintiffs contest

the Field Museum’s title; they claim that Iran owns this

collection because Herzfeld stole the artifacts and smug-

gled them out of the country in the 1920s and 1930s.

Iran, however, does not claim ownership of the

Herzfeld Collection.

The plaintiffs alleged that these three collections are

subject to attachment under two provisions in the FSIA:

(1) the exception to § 1609 attachment immunity for

“property in the United States of a foreign state . . . used

for a commercial activity” where the underlying judg-

ment “relates to a claim for which the foreign state is not

immune,” 28 U.S.C. § 1610(a)(7); and (2) the “blocked

assets” provision of the Terrorism Risk Insurance Act

of 2002 (“TRIA”), which provides that the blocked assets

of a terrorist party or its agency or instrumentality are

subject to execution to satisfy a judgment obtained

under the FSIA’s terrorism exception, Pub. L. No. 107-297,

Title II, § 201(a), 116 Stat. 2322, 2337 (2002) (codified at 28

U.S.C. § 1610 note). The museums responded that the

collections are immune from attachment under § 1609 of

No. 08-2805 9

the FSIA and that neither the commercial exception in

§ 1610(a)(7) nor the “blocked assets” provision of TRIA

applies.

The plaintiffs moved for partial summary judgment,

asking the court to hold that § 1609 immunity is an af-

firmative defense that only the foreign state itself can

assert. This question first came before a magistrate

judge, who issued a report and recommendation

agreeing with the plaintiffs that § 1609 immunity is per-

sonal to the foreign state and must be affirmatively

pleaded. The museums objected. The United States

entered the fray, filing a statement of interest on the side

of the museums. The district judge was not impressed

and entered an order agreeing with the magistrate

judge that the foreign state itself must specially plead

§ 1609 immunity.

Instead of taking an immediate appeal, the museums

asked the court to certify the order for appeal under 28

U.S.C. § 1292(b), but other events in the litigation soon

overtook this request. Two days before the museums filed

their § 1292(b) motion, Iran appeared in the district court

and asserted § 1609 attachment immunity. This dramati-

cally altered the course of the proceedings. The plaintiffs

promptly shifted their attention to Iran, seeking discovery

not just on the three museum collections but on all Iranian

assets in the United States. Since then, the plaintiffs and

Iran have been embroiled in litigation concerning the

proper scope of these discovery requests. The dispute

spawned numerous motions, multiple rulings by the

magistrate judge and the district court, and now this

10 No. 08-2805

appeal. We will not try to provide a complete account of

what transpired below but instead offer the following

summary.

After Iran made its appearance, the plaintiffs served

it with a request for production of documents under

Rule 34 and a notice of deposition under Rule 30(b)(6) of

the Federal Rules of Civil Procedure. The document

request had ten sections. The first nine sought materials

relating to the Persepolis, Chogha Mish, and Herzfeld

Collections. The tenth request was significantly more

ambitious. In relevant part, it demanded that Iran turn

over “[a]ll documents, including without limitation

any communication or correspondence, concerning any

and all tangible and intangible assets, of whatever

nature and kind, in which Iran and/or any of Iran’s agen-

cies and instrumentalities has any legal and/or equitable

interest, that are located within the United States . . . .” The

Rule 30(b)(6) notice sought to depose an officer or agent

designated by Iran to testify on its behalf regarding

its assets in the United States.

Iran sought a protective order shielding it from these

discovery requests and also moved for summary judg-

ment seeking a declaration that the Persepolis, Chogha

Mish, and Herzfeld Collections are immune from execu-

tion and attachment under the FSIA. The plaintiffs coun-

tered with a motion under Rule 56(f) of the Federal

Rules of Civil Procedure requesting additional discovery

before responding to Iran’s summary-judgment motion.

This motion was completely separate from the plaintiffs’

earlier discovery requests under Rules 30(b)(6) and 34,

No. 08-2805 11

but it led to significant confusion regarding which dis-

covery requests were actually on the table. In addition

to the Rule 56(f) motion, the plaintiffs also separately

moved to compel Iran to comply with its previous docu-

ment requests under Rule 34 and its deposition notice

under Rule 30(b)(6).

The magistrate judge eventually granted the plaintiffs’

Rule 56(f) motion for additional discovery. The judge

said the plaintiffs were entitled to the following dis-

covery from Iran: (1) any documents relating to the

three contested collections of Persian artifacts; (2) docu-

ments that might support the plaintiffs’ theory that

the Oriental Institute was effectively Iran’s agent; and

(3) a Rule 30(b)(6) deposition of an officer or agent autho-

rized to testify on Iran’s behalf. The magistrate judge

also granted the plaintiffs’ motion to compel, but only

“[i]nasmuch” as the discovery was necessary for the

plaintiffs to respond to Iran’s request for partial sum-

mary judgment. Iran objected but was overruled by the

district court.

The plaintiffs interpreted these rulings as compelling

Iran to comply in full with all their discovery and deposi-

tion requests under Rules 30(b)(6) and 34. Iran read

the orders much more narrowly and thought it was only

required to produce discovery relating directly to its

motion for summary judgment. In particular the parties

disputed whether Iran was required to provide general-

asset discovery. Iran sought clarification, or in the alter-

native, a protective order. The magistrate judge denied

Iran’s motion for a protective order and explicitly

12 No. 08-2805

ordered general-asset discovery to proceed. The district

judge affirmed, dismissing Iran’s concerns about

sovereign immunity as “overblown.” But the judge was

laboring under a misapprehension; she said the plain-

tiffs were “not seeking general asset discovery about

every conceivable asset of Iran’s in the United States.”

Of course, general-asset discovery was precisely what

the plaintiffs were seeking and indeed what the

magistrate judge had ordered. His order plainly stated

that “Iran will comply with [the plaintiffs’] requests for

general asset discovery[,]” and this holding was the

focal point of Iran’s objection before the district court. In

a motion to reconsider, the plaintiffs noted the district

judge’s error. The judge then acknowledged the over-

sight and issued a one-page order compelling Iran to

submit to the plaintiffs’ requests for general-asset dis-

covery. Iran appealed under the collateral-order doctrine

and also sought review of the district court’s earlier

order declaring that § 1609 sovereign-property

immunity must be asserted by the foreign state itself.

We permitted the museums to intervene on appeal, and

the United States appeared as an amicus in support of

reversal. 5

5

After Iran filed this appeal, another group of judgment

creditors against Iran was granted leave to intervene in the

district court. The lead plaintiff in this group is Deborah

Peterson. After intervening, the Peterson plaintiffs participated

in this appeal. Their presence, however, has no bearing on

the merits of the appeal.

No. 08-2805 13

II. Discussion

A. Appellate Jurisdiction

Before we address the merits, there is a threshold

question about appellate jurisdiction—two questions,

actually, because two interlocutory orders have been

appealed: (1) the district court’s general-asset discovery

order; and (2) the court’s earlier order rejecting § 1609

sovereign-property immunity in the absence of an ap-

pearance by Iran. Jurisdiction over the general-asset

discovery order is a relatively straightforward matter.

The jurisdictional analysis regarding the court’s earlier

order is slightly more complicated.

It is well-established that “as a general rule, an order

authorizing discovery in aid of execution of judgment is

not appealable until the end of the case.” In re Joint E. & S.

Dists. Asbestos Litig., 22 F.3d 755, 760 (7th Cir.

1994). However, the order at issue here invades Iran’s

sovereign immunity, and it is equally well-established

that orders denying claims of immunity may be immedi-

ately appealed under the collateral-order doctrine. Mitchell

v. Forsyth, 472 U.S. 511, 530 (1985); Nixon v. Fitzgerald,

457 U.S. 731, 742-43 (1982); Empress Casino v. Blagojevich,

Nos. 09-3975 & 10-1019, 2011 WL 710467, at *5 (7th

Cir. Mar. 2, 2011). This includes interlocutory orders

denying claims of sovereign immunity under the FSIA.

Rush-Presbyterian-St. Luke’s Med. Ctr. v. Hellenic Republic,

877 F.2d 574, 576 n.2 (7th Cir. 1989); Segni v. Commercial

Office of Spain, 816 F.2d 344, 347 (7th Cir. 1987).

It is true that Segni and Rush Presbyterian concerned a

foreign state’s jurisdictional immunity from suit under

14 No. 08-2805

28 U.S.C. § 1604, not attachment immunity under § 1609.6

But the Fifth Circuit has held that the denial of attach-

ment immunity under § 1609 of the FSIA may be im-

mediately appealed under the collateral-order doctrine,

FG Hemisphere Assocs. v. République du Congo, 455 F.3d

575, 584 (5th Cir. 2006), and we agree with this sensible

conclusion. There is no reason the collateral-order doc-

trine should apply any differently in cases raising the

attachment immunity of foreign-state property under

§ 1609 than in cases raising foreign-state jurisdictional

immunity under § 1604. The FSIA protects foreign sover-

eigns from court intrusions on their immunity in its

various aspects, and interlocutory appeal is appropriate

regardless of which form of immunity is at stake.

Because the district court’s general-asset discovery order

effectively rejected Iran’s claim of attachment immunity

under § 1609, we have jurisdiction to review it under

the collateral-order doctrine.

The question of appellate jurisdiction over the court’s

earlier order is trickier. That order, too, had the effect of

denying a claim of attachment immunity under the FSIA.

The district court held that § 1609 immunity is an af-

firmative defense that can be asserted only by the

6

In full, 28 U.S.C. § 1604 provides:

Subject to existing international agreements to which the

United States is a party at the time of enactment of this Act

a foreign state shall be immune from the jurisdiction of

the courts of the United States and of the States except

as provided in sections 1605 to 1607 of this chapter.

No. 08-2805 15

foreign sovereign itself. Up to that point in the litigation,

the museums were advancing the claim of attachment

immunity, and because Iran had not appeared, the

court’s order effectively stripped the collections of their

statutory immunity. The court’s earlier order thus falls

within the scope of the collateral-order doctrine and

was immediately appealable.

But orders immediately appealable under the collateral-

order doctrine are “final decisions” under 28 U.S.C. § 1291,

and subject to exceptions not applicable here, must be

appealed within 30 days of entry. See F ED . R. A PP. P.

4(a)(1)(A); 28 U.S.C. § 2107(a); Otis v. City of Chicago,

29 F.3d 1159, 1166-67 (7th Cir. 1994) (en banc). Rather

than filing an immediate appeal, the museums asked

the court to certify the order for interlocutory appeal

under § 1292(b). This was unnecessary, for reasons we

will explain in a moment. In the meantime Iran

appeared, becoming the lead defendant, and the focus

shifted to discovery disputes. The § 1292(b) motion ap-

parently got lost in the shuffle. Although the motion

was fully briefed, the district court didn’t address it until

after this appeal was filed; at that point the court simply

dismissed it as moot.

In Weir v. Propst, 915 F.2d 283, 285 (7th Cir. 1990), we

“clarif[ied] the relationship between the collateral-

order doctrine and section 1292(b) certification in the

recurrent setting of appeals from denial of immunity.” We

explained that a § 1292(b) certification is unnecessary

for an appeal under the collateral-order doctrine; orders

denying immunity are “appealable—without any of the

16 No. 08-2805

rigamarole involved in a 1292(b) appeal—under section

1291, by virtue of Mitchell v. Forsyth.” Id. We also said

that a request for § 1292(b) certification “may not be

used to circumvent the time limitations on filing an

appeal under section 1291.” Id. The “deadlines in Rule 4(a)

for appeals in civil cases apply to all appealable orders,

including collateral orders, specifically orders denying

immunity, . . . [and] [i]f the deadline is missed, the order

is not appealable.” Id. at 286. If that occurs, “[t]he defen-

dant must then wait until another appealable order

(normally, the final judgment) is entered, upon appeal

of which he can challenge any interlocutory order that

has not become moot.” Id.

We reiterated this point in Otis, although in some-

what more sweeping terms: “[A] litigant entitled to

appeal under the collateral order doctrine must act

within 30 days and if this time expires without appeal

must wait until the final judgment to pursue the issue.” 29

F.3d at 1167. This passage in Otis relied on Weir and

should be read with the earlier opinion. The failure to

timely appeal an immunity order under the collateral-

order doctrine does not necessarily postpone review

until the end of the case; it postpones review until

another appealable order is entered. This will usually be

the final judgment, but not always. And here, there is

“another appealable order,” Weir, 915 F.2d at 286, not

the final judgment, that has provided the next oppor-

tunity for review. The district court’s general-asset dis-

covery order rejected Iran’s claim of sovereign im-

munity, and Iran’s timely appeal of that order permits

No. 08-2805 17

review of the earlier—and closely related—immunity

decision.7

This conclusion finds support in decisions from the

Third and Fifth Circuits. See In re Montgomery County,

215 F.3d 367, 372 (3d Cir. 2000) (quoting Weir’s state-

ment that when a collateral order is not timely appealed,

“[t]he defendant must then wait until another ap-

pealable order (normally, the final judgment) is entered,

upon appeal of which he can challenge any interlocutory

order that has not become moot”); Kenyatta v. Moore,

744 F.2d 1179, 1186-87 (5th Cir. 1984) (interlocutory

appeal that is not timely pursued can be revived upon

entry of final judgment or some other appealable order);

but cf. Mille Lacs Band of Chippewa Indians v. Minnesota,

48 F.3d 373, 375 (8th Cir. 1995) (deciding not to review

earlier orders of the district court—whether or not they

fell within the collateral-order doctrine—on interlocutory

review of a later injunction because the earlier orders

were not timely appealed and were not inextricably

7

The museums cite United States v. Michelle’s Lounge, 39 F.3d

684 (7th Cir. 1994), as support for the proposition that the

court’s earlier order may be reviewed with Iran’s timely

interlocutory appeal of the later collateral order. But Michelle’s

Lounge simply held that an unappealed collateral order can

be reviewed following the entry of final judgment, id. at 692,

an uncontroversial proposition not at issue in this case.

Michelle’s Lounge does not address the precise question pre-

sented here: Whether a collateral order that is not timely

appealed is revived for review when a timely appeal is taken

from a later collateral order.

18 No. 08-2805

linked to the injunction issue that was properly before

the court).

Moreover, in the particular circumstances of this case,

permitting review of the first immunity order as part of

Iran’s appeal from the second reflects sound appellate

management, not an unwarranted expansion of the

scope of collateral-order review. Both orders raise im-

portant and closely related questions regarding the

scope and operation of the FSIA. Questions of foreign-

sovereign immunity are sensitive, and lower-court mis-

takes about the availability of immunity can have foreign-

policy implications. More particularly here, the district

court’s refusal to consider § 1609 attachment immunity

without an appearance by the foreign state precipitated

Iran’s appearance and led directly to the imposition of

the general-asset discovery order against it. The latter

order was timely appealed, and the two substantially

overlap.8 Review of both orders now will clarify the

rest of the litigation. Iran’s timely appeal of the court’s

general-asset discovery order brings up the court’s

8

Iran’s appearance did not moot the earlier order. Iran entered

the case only because the district court refused to consider the

question of § 1609 immunity unless Iran appeared and raised

it. Iran’s appearance, in turn, exposed it to the general-asset

discovery requests and the court’s order that it comply. Iran

would like to withdraw from this case but is inhibited from

doing so by the district court’s holding that § 1609 attach-

ment immunity must be asserted by the foreign sovereign.

This is a sufficient continuing interest to support an ongoing

live controversy about the court’s earlier order.

No. 08-2805 19

earlier order denying § 1609 attachment immunity

unless Iran appeared.9

B. Attachment Immunity Under § 1609 of the FSIA

On the merits this appeal challenges the district court’s

interpretation of the FSIA. Our review is de novo.

Autotech Techs. LP v. Integral Research & Dev. Corp., 499

F.3d 737, 749 (7th Cir. 2007).

The FSIA was enacted in 1976, but the doctrine of

foreign-sovereign immunity developed at common law

very early in our nation’s history. Samantar v. Yousuf, 130

S. Ct. 2278, 2284 (2010); Republic of the Phillipines v.

9

The Supreme Court’s recent decision in Ortiz v. Jordan, 131

S. Ct. 884 (2011), does not affect our conclusion. The issue in

Ortiz was whether the denial of a motion for summary judg-

ment based on qualified immunity could be appealed

following a full trial on the merits. Id. at 888-89. The

Supreme Court said “no.” Id. at 893. The denial of a motion for

summary judgment based on qualified immunity may be

immediately appealed under Mitchell v. Forsyth, 472 U.S.

511 (1985), subject to the limitations of Johnson v. Jones, 515

U.S. 304 (1995); alternatively, the defense may be renewed

and litigated at trial. The Court held in Ortiz that the failure

to take an immediate appeal of the denial of immunity on

summary judgment precludes review of that order following

a trial on the merits; to obtain review of an immunity claim

in that situation, the defendant must preserve it at trial in a

motion for judgment as a matter of law under Rule 50(b) of

the Federal Rules of Civil Procedure. Ortiz, 131 S. Ct. at 892-93.

20 No. 08-2805

Pimentel, 553 U.S. 851, 865 (2008); Republic of Austria v.

Altmann, 541 U.S. 677, 688-89 (2004). “For more than a

century and a half, the United States generally granted

foreign sovereigns complete immunity from suit in the

courts of this country.” Verlinden B.V. v. Central Bank of

Nigeria, 461 U.S. 480, 486 (1983). Chief Justice Marshall’s

opinion in The Schooner Exchange v. McFaddon, 7 Cranch

116 (1812), articulated the general principle, and “[a]l-

though the narrow holding of The Schooner Exchange

was only that the courts of the United States lack juris-

diction over an armed ship of a foreign state found in

our port, that opinion came to be regarded as extending

virtual absolute immunity to foreign sovereigns.”

Verlinden, 461 U.S. at 486. The doctrine “is premised

upon the ‘perfect equality and absolute independence

of sovereigns, and th[e] common interest in impelling

them to mutual intercourse.’ ” Pimentel, 553 U.S. at 865

(quoting Schooner Exchange, 7 Cranch at 137); see also

Nat’l City Bank of N.Y. v. Republic of China, 348 U.S. 356,

362 (1955) (Foreign-sovereign immunity is based on

“reciprocal self-interest [] and respect for the ‘power

and dignity’ of the foreign sovereign.”).

Foreign-sovereign immunity “is a matter of grace and

comity on the part of the United States,” not a constitu-

tional doctrine. Verlinden, 461 U.S. at 486. Accordingly,

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 instru-

mentalities.” Id. Eventually, a “two-step procedure devel-

oped for resolving a foreign state’s claim of sovereign

No. 08-2805 21

immunity, typically asserted on behalf of seized vessels.”

Samantar, 130 S. Ct. at 2284. The diplomatic representa-

tive of the foreign state would request that the State

Department issue a “suggestion of immunity.” Id. If the

State Department did so, the court would surrender

jurisdiction. Id. In the absence of a suggestion of

immunity, however, the court would “ ‘decide for itself

whether the requisites for such immunity existed.’ ” Id.

(quoting Ex parte Republic of Peru, 318 U.S. 578, 587 (1943)).

To make this decision, the court “inquired ‘whether the

ground of immunity is one which it is the established

policy of the [State Department] to recognize.’ ” Id. (quot-

ing Republic of Mexico v. Hoffman, 324 U.S. 30, 36 (1945)).

The process thus entailed substantial judicial deference

to the Executive Branch whether the State Department

issued a suggestion of immunity or not.

In practice the State Department would usually

request immunity in all actions against friendly foreign

sovereigns. Samantar, 130 S. Ct. at 2285; Verlinden, 461 U.S.

at 486. That changed in 1952 when the State Department

adopted a new “restrictive” theory of foreign-sovereign

immunity. Samantar, 130 S. Ct. at 2285; Verlinden, 461 U.S.

at 486. The “Tate Letter” (Jack B. Tate, Acting Legal

Advisor to the Department of State, writing to the

Attorney General) announced that foreign-sovereign

immunity would thenceforward be “confined to suits

involving the foreign sovereign’s public acts, and [would]

not extend to cases arising out of a foreign state’s

strictly commercial acts.” Verlinden, 461 U.S. at 487.

This policy shift was not codified into law, and its

implementation gave rise to some practical and political

22 No. 08-2805

difficulties as the State Department struggled to

maintain a consistent standard for evaluating grants of

immunity for foreign sovereigns. Samantar, 130 S. Ct. at

2285; Altmann, 541 U.S. at 690-91; Verlinden, 461 U.S. at 487.

In 1976 Congress passed the FSIA for the purpose of

providing a clear, uniform set of standards to govern

foreign-sovereign immunity determinations. Under the

FSIA, courts, not the State Department, decide claims of

foreign-sovereign immunity according to the principles

set forth in the statute. See 28 U.S.C. § 1602 (congressional

findings and declaration of purpose); Samantar, 130

S. Ct. at 2285; Altmann, 541 U.S. at 691; Verlinden, 461

U.S. at 487-88.

For the most part, the FSIA codified the restrictive

theory of sovereign immunity announced in the Tate

Letter. Samantar, 130 S. Ct. at 2285; Altmann, 541 U.S. at

691; Verlinden, 461 U.S. at 488. The Act contains two

primary forms of immunity. Section 1604 provides juris-

dictional immunity from suit: “[A] foreign state shall

be immune from the jurisdiction of the courts of the

United States and of the States” except as otherwise

provided in the Act. 28 U.S.C. § 1604. Section § 1609,

the provision at issue here, codifies the related common-

law principle that a foreign state’s property in the

United States is immune from attachment and execution:

Subject to existing international agreements to which

the United States is a party at the time of enactment of

this Act 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.

No. 08-2805 23

Id. § 1609 (emphasis added). The term “foreign state”

includes “a political subdivision of a foreign state or an

agency or instrumentality of a foreign state.” Id. § 1603(a).

In keeping with the restrictive theory of foreign-sover-

eign immunity, the FSIA carves out certain exceptions

to the jurisdictional immunity of foreign states described

in § 1604 (see §§ 1605-1607) and the immunity of foreign-

state property from attachment and execution described

in § 1609 (see §§ 1610, 1611). Accordingly, under § 1604

foreign states and their agencies and instrumentalities

are immune from suit unless statutory exception ap-

plies. Under § 1609 foreign-state property in the United

States is likewise immune from attachment or execu-

tion unless an exception applies. Under the exceptions

listed in §§ 1610 and 1611, property owned by a foreign

state’s instrumentalities is generally more amenable to

attachment than property owned by the foreign state

itself. See id. § 1610(a) (exceptions applicable to foreign-

state property), (b) (exceptions applicable to foreign-

instrumentality property); see also R ESTATEMENT (T HIRD )

OF THE F OREIGN R ELATIONS L AW OF THE U.S. § 460 cmt. b.

In their underlying suit against Iran, the plaintiffs

established jurisdiction via § 1605(a)(7), an exception to

jurisdictional sovereign immunity for actions “in which

money damages are sought against a foreign state for

personal injury or death that was caused by an act of

torture, extrajudicial killing, aircraft sabotage, hostage

taking, or the provision of material support or resources . . .

for such an act.” 28 U.S.C. § 1605(a)(7) (repealed and

reenacted as § 1605A(a)(1), Pub. L. No. 110-181, Div. A,

24 No. 08-2805

Title X, § 1083(a)(1), (b)(1)(A)(iii), Jan. 28, 2008, 122 Stat.

338, 341). In the execution proceeding, they relied on the

following exception to § 1609 attachment immunity:

(a) The property in the United States of a foreign

state . . . used for a commercial activity in the United

States, shall not be immune from attachment in aid

of execution, or from execution, upon a judgment

entered by a court of the United States or of a State . . .

if—

(7) the judgment relates to a claim for which the

foreign state is not immune under section 1605A,

regardless of whether the property is or was in-

volved with the act upon which the claim is based.

Id. § 1610(a)(7). They also claimed that Iran’s assets are

attachable under § 201 of the TRIA as “blocked assets”

of a terrorist party. Pub. L. No. 107-297, Title II, § 201(a),

116 Stat. 2322, 2337 (2002).

The district court did not address the applicability of

either of these exceptions. Instead, the court held that

the attachment immunity conferred by § 1609 is per-

sonal to the foreign state, which must appear and af-

firmatively plead it. When Iran made its appearance

and specifically raised § 1609, the court continued to

sidestep the immunity question and instead ordered

general-asset discovery regarding all of Iran’s assets in

the United States, not just the three museum collections

the plaintiffs identified in the attachment citations. Both

of these orders are incompatible with the text, structure,

and history of the FSIA, and also conflict with relevant

precedent. We address the second order first.

No. 08-2805 25

1. The general-asset discovery order

Execution proceedings are governed by Rule 69(a) of the

Federal Rules of Civil Procedure and “must accord with

the procedure of the state where the court is located, but

a federal statute governs to the extent it applies.” FED. R.

C IV . P. 69(a)(1). Discovery requests in aid of execution

may be made pursuant to either the federal rules or the

corresponding rules of the forum state, id. Rule 69(a)(2),

but either way, the FSIA plainly applies and limits

the discovery process.

As a general matter, it is widely recognized that the

FSIA’s immunity provisions aim to protect foreign sover-

eigns from the burdens of litigation, including the cost

and aggravation of discovery. See Pimentel, 553 U.S. at 865;

Dole Food Co. v. Patrickson, 538 U.S. 468, 479 (2003); Rush-

Presbyterian, 877 F.2d at 576 n.2; Kelly v. Syria Shell Petro-

leum Dev. B.V., 213 F.3d 841, 849 (5th Cir. 2000); Foremost-

McKesson, Inc. v. Islamic Republic of Iran, 905 F.2d 438, 449

(D.C. Cir. 1990). This is consistent with the Supreme

Court’s treatment of other immunities—for example, the

qualified immunity of governmental officials. See, e.g.,

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009) (“The basic

thrust of the qualified-immunity doctrine is to free

officials from the concerns of litigation, including avoid-

ance of disruptive discovery.” (quotation marks omit-

ted)). A potential difficulty arises, however, when an

asserted exception to immunity turns on disputed facts.

The FSIA does not directly address the extent to which

a judgment creditor may pursue discovery to establish

that the property he is seeking to attach fits within one

26 No. 08-2805

of the statutory exceptions to the attachment immunity

conferred by § 1609.1 0

In Arriba Ltd. v. Petroleos Mexicanos, the Fifth Circuit

aptly took note of the “tension between permitting dis-

covery to substantiate exceptions to statutory foreign

sovereign immunity and protecting a sovereign’s or

sovereign agency’s legitimate claim to immunity from

discovery.” 962 F.2d 528, 534 (5th Cir. 1992). Arriba in-

volved § 1604 jurisdictional immunity, but the same

tension is present when attachment immunity under

§ 1609 is at stake. The district court’s decision to order

nationwide discovery of all Iranian assets fails to ap-

preciate this basic point. That much is evident in the

magistrate judge’s rationale for the discovery order:

By inquiring about Iran’s assets generally, the Plain-

tiffs, and ultimately the Court, will be able to deter-

mine which of those assets fall within the domain

of assets that are amenable to attachment and execu-

tion under the FSIA and TRIA. The Court will

not limit the Plaintiffs’ discovery requests to those

categories of assets that are reachable under the

FSIA and TRIA, allowing Iran to be the judge of which

assets are immune before providing any discovery.

10

The only section in the FSIA that directly addresses dis-

covery is 28 U.S.C. § 1605(g). That provision allows the

Attorney General, under certain circumstances, to stay any

request for discovery against the United States in any

action brought against a foreign state on the basis of the

“terrorism” exception to § 1604, as defined in § 1605(a)(7).

No. 08-2805 27

That determination goes to the merits of the case

and will be made by the Court alone.

Rubin v. Islamic Republic of Iran, No. 03 C 9370, 2008 WL

192321, at *15 (N.D. Ill. Jan. 18, 2008). The district judge

adopted this reasoning in toto.

This approach is inconsistent with the presumptive

immunity of foreign-state property under § 1609. As a

historical matter, “[p]rior to the enactment of the FSIA, the

United States gave absolute immunity to foreign sover-

eigns from the execution of judgments. This rule

required plaintiffs who successfully obtained a judg-

ment against a foreign sovereign to rely on voluntary

repayment by that State.” Autotech, 499 F.3d at 749. The

FSIA “codified this practice by establishing a general

principle of immunity for foreign sovereigns from ex-

ecution of judgments,” subject to certain limited excep-

tions. Id. The statutory scheme thus “modified the rule

barring execution against a foreign state’s property by

‘partially lowering the barrier of immunity from execu-

tion, so as to make this immunity conform more closely

with the provisions on jurisdictional immunity.’ ” Id.

(second emphasis omitted) (quoting Conn. Bank of Com-

merce v. Republic of Congo, 309 F.3d 240, 252 (5th Cir. 2002)).

Importantly here, the exceptions to attachment

immunity are narrower than the exceptions to jurisdic-

tional immunity: “Although there is some overlap

between the exceptions to jurisdictional immunity and

those for immunity from execution and attachment,

there is no escaping the fact that the latter are more

narrowly drawn.” Id. We noted in Autotech that “[t]he

28 No. 08-2805

FSIA says that immunity from execution is waived only

for specific ‘property.’ As a result, in order to determine

whether immunity from execution or attachment

has been waived, the plaintiff must identify specific

property upon which it is trying to act.” Id. at 750. Under

the FSIA “[t]he only way the court can decide whether

it is proper to issue the writ [of attachment or execution]

is if it knows which property is targeted.” Id. In other

words, “[a] court cannot give a party a blank check

when a foreign sovereign is involved.” Id.

As our discussion in Autotech makes clear, § 1609 of the

FSIA codifies the common-law rule that property of a

foreign state in the United States is presumed immune

from attachment and execution. To overcome the pre-

sumption of immunity, the plaintiff must identify the

particular foreign-state property he seeks to attach and

then establish that it falls within a statutory exception.

The district court’s general-asset discovery order turns

this presumptive immunity on its head. Instead of con-

fining the proceedings to the specific property the plain-

tiffs had identified as potentially subject to an exception

under the FSIA, the court gave the plaintiffs a “blank

check” entitlement to discovery regarding all Iranian

assets in the United States. This inverts the statutory

scheme.

Three other circuits have addressed the question of

discovery in the context of attachment proceedings

against foreign-state property in the United States under

the FSIA, and all have agreed that the court must

proceed narrowly, in a manner that respects the statutory

No. 08-2805 29

presumption of immunity and focuses on the specific

property alleged to be exempt. The Second, Fifth, and

Ninth Circuits have repeated an identical message to

the district courts: “ ‘[D]iscovery should be ordered cir-

cumspectly and only to verify allegations of specific facts

crucial to an immunity determination.’ ” EM Ltd. v.

Republic of Argentina, 473 F.3d 463, 486 (2d Cir. 2007)

(quoting First City, Texas-Houston, N.A. v. Rafidain Bank,

150 F.3d 172, 176 (2d Cir. 1998)); Conn. Bank of Commerce,

309 F.3d at 260 n.10 (quoting Arriba, 962 F.2d at 534); Af-

Cap, Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080,

1095-96 (9th Cir. 2007) (emphasis omitted) (quoting

Conn. Bank of Commerce, 309 F.3d at 260 n.10).1 1 We agree.

Discovery orders that are broad in scope and thin in

foundation unjustifiably subject foreign states to unwar-

ranted litigation costs and intrusive inquiries about

their American-based assets. One of the purposes of the

immunity codified in § 1609 is to shield foreign states

from these burdens.

The plaintiffs note that these decisions from other

circuits took language from Arriba, 962 F.2d at 534, the

Fifth Circuit case dealing with exceptions to § 1604 juris-

dictional immunity, and adapted it to the context of attach-

ment immunity under § 1609. They claim that broader

11

In Af-Cap the district court had limited discovery on

grounds unrelated to the FSIA. The Ninth Circuit affirmed and

also concluded that the discovery limitations were consistent

with the requirements of the FSIA. Af-Cap, Inc. v. Chevron

Overseas (Congo) Ltd., 475 F.3d 1080, 1096 (9th Cir. 2007).

30 No. 08-2805

discovery should be available under § 1609 than § 1604.

This argument is based on their reading of § 1606 of

the FSIA, which provides that if an exception to § 1604

jurisdictional immunity applies, “the foreign state shall

be liable in the same manner and to the same extent as

a private individual under like circumstances.” 28 U.S.C.

§ 1606. The plaintiffs contend that once a court has exer-

cised jurisdiction over a foreign sovereign and entered

a judgment against it, § 1606 entitles them to the same

broad discovery as any other litigant seeking to execute

on a judgment under Rule 69(a). The critical error in

this argument is that it mixes the scope of liability with the

scope of execution. Although Iran may be found liable

in the same manner as any other private defendant, the

options for executing a judgment remain limited. That

is the point of § 1609. It is true that §§ 1604 and 1609

provide different kinds of immunity to foreign sovereigns,

but there is no reason to read § 1609 to allow for more

intrusive discovery than its § 1604 counterpart. To the

contrary, as we observed in Autotech, the exceptions to

§ 1609 attachment immunity are drawn more narrowly

than the exceptions to § 1604 jurisdictional immunity.

The plaintiffs cite two cases as support for the general-

asset discovery order. The first is Richmark Corp. v. Timber

Falling Consultants, 959 F.2d 1468 (9th Cir. 1992),

which involved a contract dispute between an American

company and Beijing Ever Bright Industrial Co., a

company controlled by the People’s Republic of China.

The American company won a default judgment against

Ever Bright on a breach-of-contract claim and then

sought general discovery in order to identify Ever

No. 08-2805 31

Bright’s assets; the district court authorized the discovery.

Ever Bright appealed and the Ninth Circuit affirmed.

Richmark is distinguishable from this case. Ever Bright

was an instrumentality of the People’s Republic of

China, and the discovery order at issue in Richmark was

limited to Ever Bright’s assets. As we have noted, the

immunity exceptions in the FSIA for property owned by

an instrumentality of a foreign state are much broader

than the exceptions for property owned by the foreign

state itself.12 See 28 U.S.C. § 1610(a) (exceptions to immu-

nity of foreign-state property), 1610(b) (exceptions to

immunity for foreign-instrumentality property); see also

Autotech, 499 F.3d at 749-50. Even so, we held in

Autotech that a judgment creditor seeking to invoke an

exception to § 1609 immunity must first identify the

property on which it seeks to execute. Id.

12

The commercial-activity exception in § 1610(b) allows a

judgment creditor to execute against any property of an agency

or instrumentality of a foreign state in the United States so

long as the agency or instrumentality has been found to have

engaged in commercial activity. On the other hand, § 1610(a),

the FSIA exception invoked in this case, allows execution

against the property of a foreign state in the United States

only if that property has been used for commercial activity. See

Autotech Techs. LP v. Integral Research & Dev. Corp., 499 F.3d

737, 749-50 (7th Cir. 2007); R ESTATEMENT (T HIRD ) OF THE

F OREIGN R ELATIONS L AW OF THE U.S. § 460 cmt. b (“For pur-

poses of post-judgment attachment and execution, the [FSIA]

draws a sharp distinction between the property of states and

the property of state instrumentalities . . . .”).

32 No. 08-2805

The plaintiffs also cite First City, Texas-Houston, N.A. v.

Rafidain Bank, 150 F.3d 172, 177 (2d Cir. 1998), which

affirmed an order permitting a judgment creditor to

conduct general discovery against Rafidain Bank, an

instrumentality of Iraq. Rafidain Bank is also distinguish-

able; as in Richmark the order in question authorized

general discovery against an instrumentality of a foreign

sovereign, not the foreign sovereign itself. Equally im-

portant, the Second Circuit authorized broad discovery

so that the judgment creditor would have an oppor-

tunity to substantiate its claim that the defendant instru-

mentality of Iraq was the alter ego of the Central Bank

of Iraq—a claim that if proven would have allowed

the judgment creditor to pursue the assets of the

Central Bank. Neither Richmark nor Rafidain Bank

provide support for the discovery order in this case.1 3

Finally, the plaintiffs lodge a policy objection to re-

stricting discovery to the particular foreign-state

property sought to be attached. They maintain that

limiting discovery in this way would effectively deny

judgment creditors the opportunity to locate potentially

13

The Restatement of Foreign Relations explains that the FSIA

provides weaker immunity protection for the property of

foreign-state instrumentalities because “instrumentalities

engaged in commercial activities are akin to commercial

enterprises.” R ESTATEMENT (T HIRD ) OF THE L AW OF F OREIGN

R ELATIONS OF THE U.S. § 460 cmt. b. But because “the primary

function of [foreign] states is government . . . , their amenability

to post-judgment attachment should be limited to particular

property.” Id.

No. 08-2805 33

attachable assets of the foreign state. This contention

merits several responses.

First, it is an exaggeration to suggest that limiting

discovery to the specific property identified for attach-

ment completely forecloses the opportunity of judgment

creditors to discover any attachable assets of the foreign-

state judgment debtor. Targeted discovery regarding

specifically identified assets may prove fruitful, and the

plaintiff may in the end be permitted to execute on the

specified property. It is true that limiting discovery to

the specific property identified for attachment restricts

the plaintiff’s ability to use the coercive power of the

court to identify other attachable foreign-state assets, but

that is a consequence of the balance struck by the FSIA.

Nothing in the statutory scheme prevents judgment

creditors from using private means to identify potentially

attachable assets of foreign states located in the United

States. Moreover, the FSIA includes a provision for judg-

ment creditors in certain cases to enlist the assistance of

the Secretary of the Treasury and the Secretary of State

in identifying and executing against the assets of a

foreign sovereign. Section 1610(f)(2)(A) provides:

At the request of any party in whose favor a judg-

ment has been issued with respect to a claim for

which the foreign state is not immune under section

1605(a)(7) (as in effect before the enactment of section

1605A [enacted Jan. 28, 2008]) or section 1605A, the

Secretary of the Treasury and the Secretary of State

should make every effort to fully, promptly, and effectively

assist any judgment creditor or any court that has issued

34 No. 08-2805

any such judgment in identifying, locating, and executing

against the property of that foreign state or any agency

or instrumentality of such state.

(Emphasis added.) The plaintiffs secured their judgment

against Iran under § 1605(a)(7) and thus are eligible for

this assistance from the United States.

There is no question that the attachment immunity

codified in § 1609 of the FSIA has a cost, and that

cost is borne primarily by Americans who have been

injured in tort or contract by foreign states or their

agencies or instrumentalities. The FSIA embodies a judg-

ment that our nation’s foreign-policy interests justify

this particular allocation of legal burdens and benefits.

Accordingly, we conclude that under the FSIA a

plaintiff seeking to attach the property of a foreign state

in the United States must identify the specific property

that is subject to attachment and plausibly allege that

an exception to § 1609 attachment immunity applies. If

the plaintiff does so, discovery in aid of execution is

limited to the specific property the plaintiff has identi-

fied. The general-asset discovery order issued in this

case is incompatible with the FSIA.1 4

2. The appearance order

The foregoing discussion also highlights the flaws in

the district court’s earlier order in which the court

14

In light of this holding, we need not consider Iran’s alterna-

tive argument that the general-asset discovery order violates

the Algiers Accords, 20 I.L.M. 224 (1981).

No. 08-2805 35

held that attachment immunity under § 1609 is an af-

firmative defense that can only be asserted by the

foreign state itself. This ruling fails to give effect to the

statutory text: “[T]he 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.” 28 U.S.C. § 1609 (emphasis added).

As we have explained, the statute cloaks the foreign

sovereign’s property with a presumption of immunity

from attachment and execution unless an exception

applies; under § 1609 the property is protected by

immunity and may not be attached absent proof of an

exception. It follows from this language that the

immunity does not depend on the foreign state’s appear-

ance in the case. The immunity inheres in the property

itself, and the court must address it regardless of

whether the foreign state appears and asserts it.

Again, we can find helpful analogous principles in

the operation of § 1604 jurisdictional immunity. The

Supreme Court has confirmed that the FSIA’s immunity

from suit arises presumptively, and “even if the foreign

state does not enter an appearance to assert an im-

munity defense, a District Court still must determine

that immunity is unavailable under the Act.” Verlinden,

461 U.S. at 493-94 & n.20.1 5 This conclusion is unsur-

15

The district court justified its appearance ruling almost

entirely on an out-of-context reading of a sliver of FSIA legisla-

tive history that appears in this footnote in the Court’s opinion

in Verlinden. Just before the sentence we have quoted above, the

Court notes that “[t]he House Report on the [FSIA] states that

(continued...)

36 No. 08-2805

prising; the immunity conferred by § 1604 is jurisdic-

tional. The Court in Verlinden read § 1604 together with

a separate provision of the FSIA, codified at 28 U.S.C.

§ 1330(a), which provides:

The district courts shall have original jurisdiction . . . of

any . . . action against a foreign state as defined

in section 1603(a) of this title as to any claim for

relief . . . to which the foreign state is not entitled to

immunity either under sections 1605-1607 of this

title or any applicable international agreement.

28 U.S.C. § 1330(a); Verlinden, 461 U.S. at 493-94.1 6

15

(...continued)

‘sovereign immunity is an affirmative defense that must be

specially pleaded.’ ” Verlinden B.V. v. Central Bank of Nigeria, 461

U.S. 480, 493 n.20 (1983) (quoting H.R. Rep. No. 94-1487, at 17

(1976)). But immediately after this reference, the Court says

quite clearly that the House Report got this point wrong: “Under

the Act, however, subject matter jurisdiction turns on the

existence of an exception to foreign sovereign immunity, 28

U.S.C. § 1330(a). Accordingly, even if the foreign state does

not enter an appearance to assert an immunity defense, a

District Court still must determine that immunity is unavail-

able under the Act.” Id. This footnote, read as a whole, does not

support the district court’s order. In a bit of charitable under-

statement, we have previously characterized this passage

of FSIA legislative history as “not entirely accurate.” Frovola

v. Union of Soviet Socialist Republics, 761 F.2d 370, 373 (7th Cir.

1985).

16

A complication arises when a foreign-state instrumentality

has a questionable claim to jurisdictional immunity. See, e.g.,

(continued...)

No. 08-2805 37

Though not jurisdictional, the immunity conferred by

§ 1609 is similarly a default presumption, one that

inheres in the property of the foreign state. When a judg-

ment creditor seeks to attach property to satisfy a judg-

ment obtained under the FSIA, the district court is im-

mediately on notice that the immunity protections of

§ 1609 are in play. In particular, where the plaintiff seeks

to attach property of the foreign state itself, immunity is

presumed and the court must find an exception—with

or without an appearance by the foreign state—not as a

jurisdictional matter but to give effect to the statutory

scheme. See R ESTATEMENT (T HIRD ) OF THE F OREIGN R E-

LATIONS L AW OF THE U.S. § 460 cmt. b (explaining

the distinction in the FSIA between the property of

foreign states and the property of foreign-state instru-

mentalities).

16

(...continued)

Kunglig Jarnvagsstyrelsen v. Dexter & Carpenter, 32 F.2d 195

(2d Cir. 1929) (The plaintiff, apparently a private corporation,

was served with a counterclaim and then attempted to

invoke foreign-sovereign immunity by claiming it was an

instrumentality of Sweden.). In this situation, we have held

that before a foreign instrumentality may be entitled to the

presumption of immunity under § 1604, it must establish a

prima facie case that it fits the FSIA’s definition of a foreign

state. See, e.g., Enahoro v. Abubakar, 408 F.3d 877, 882 (7th Cir.

2005). However, when the plaintiff sues the foreign sovereign

itself, the immunity issue is uncomplicated; immunity is

presumed, and the court must find an exception with or with-

out an appearance by the foreign state.

38 No. 08-2805

This reading of § 1609 is confirmed by several pro-

visions in § 1610 governing exceptions to attachment

immunity. For example, § 1610(a)(1) states that § 1609

immunity does not apply where “the foreign state has

waived its immunity from attachment in aid of execu-

tion or from execution either explicitly or by implication.”

This strongly suggests that immunity from execution

is presumed and waiver of immunity is the excep-

tion.17 Section 1610(c) is even more telling. That pro-

vision governs the issuance of an attachment order

under either § 1610(a) or (b) when the foreign state is

in default:

No attachment or execution referred to in subsec-

tions (a) and (b) of this section shall be permitted

until the court has ordered such attachment and

execution after having determined that a reasonable

period of time has elapsed following the entry of

judgment and the giving of any notice required

under section 1608(e) of this chapter [governing

service, time to answer, and default].

28 U.S.C. § 1610 (c). The waiting period required by

§ 1610(c) ensures that a defaulting foreign state is pro-

vided adequate notice before an attachment order

issued under either § 1610(a) or (b)—the “commercial”

exceptions to § 1609 immunity—will take effect. This

17

We have previously rejected the notion that a foreign state’s

failure to make an appearance before the court could

itself constitute an implicit waiver of sovereign immunity. See

Frolova, 761 F.2d at 378.

No. 08-2805 39

provision makes it clear that even when the foreign

state fails to appear in the execution proceeding, the

court must determine that the property sought to be

attached is excepted from immunity under § 1610(a) or

(b) before it can order attachment or execution.

Our conclusion that the court must address § 1609

immunity even in the absence of an appearance by the

foreign state is also consistent with the common-law

practice that the FSIA codified. As we have explained,

the attachment immunity of foreign-state property, like

the jurisdictional immunity of foreign states, was histori-

cally determined without regard to the foreign state’s

appearance in the case. The court either deferred to the

State Department’s suggestion of immunity or made the

immunity determination itself, by reference to the State

Department’s established policy regarding foreign-sover-

eign immunity. See Republic of Mexico v. Hoffman, 324

U.S. 30, 35-36 (1945) (common-law doctrine of foreign-

sovereign immunity required judicial deference to ex-

ecutive determinations of immunity because “[t]he

judicial seizure” of the property of a foreign state may

be regarded as “an affront to its dignity and may . . . affect

our relations with it”). This practice continued after

the issuance of the Tate Letter and the State Depart-

ment’s shift to the restrictive theory of foreign-sovereign

immunity.

To date, two circuits have addressed whether the

foreign state must appear and assert § 1609 attachment

immunity, and both have concluded that the answer is

“no.” In the most recent case, the Peterson plaintiffs (who

40 No. 08-2805

have intervened here) sought to execute their judgment

against certain Iranian receivables; the Ninth Circuit

concluded that the district court must independently

raise and decide whether the property is immune from

attachment under § 1609. Peterson v. Islamic Republic of

Iran, 627 F.3d 1117, 1126-28 (9th Cir. 2010). Similarly, the

Fifth Circuit has held that “the [foreign state’s] presence

is irrelevant” to the question whether the property

the plaintiff seeks to attach is excepted from § 1609’s

presumptive immunity. Walker Int’l Holdings Ltd. v. Re-

public of Congo, 395 F.3d 229, 233 (5th Cir. 2004). A district

court in Massachusetts also agrees. See Rubin v. Islamic

Republic of Iran, 456 F. Supp. 2d 228, 231-32 (D. Mass.

2006) (execution proceeding brought by the Rubin plain-

tiffs to attach property in the possession of a museum

at Harvard University but alleged to belong to Iran).

We now join these courts in concluding that under § 1609

of the FSIA, the property of a foreign state in the

United States is presumed immune from attachment

and execution. The immunity inheres in the property

and does not depend on an appearance and special plead-

ing by the foreign state itself. The party in possession of

the property may raise the immunity or the court may

address it sua sponte. Either way, the court must inde-

pendently satisfy itself that an exception to § 1609 im-

munity applies before ordering attachment or other

execution on foreign-state property in the United States.

For the foregoing reasons, we R EVERSE the district

court’s general-asset discovery order and its earlier

order requiring Iran to appear and affirmatively plead

No. 08-2805 41

§ 1609 immunity, and R EMAND for further proceedings

consistent with this opinion.

3-29-11