Jenny Rubin v. Islamic Republic of Iran

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 14-1935

JENNY RUBIN, et al.,

Plaintiffs-Appellants,

v.

ISLAMIC REPUBLIC OF IRAN,

Defendant-Appellee,

and

FIELD MUSEUM OF NATURAL HISTORY, et al.,

Respondents-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 03 C 9370 — Robert W. Gettleman, Judge.

____________________

ARGUED APRIL 23, 2015 — DECIDED JULY 19, 2016

____________________

Before BAUER and SYKES, Circuit Judges, and REAGAN,

Chief District Judge. *

* Of the Southern District of Illinois, sitting by designation.

2 No. 14-1935

SYKES, Circuit Judge. In September 1997 three Hamas sui-

cide bombers blew themselves up on a crowded pedestrian

mall in Jerusalem. Among those grievously injured were

eight U.S. citizens who later joined with a handful of their

close relatives to file a civil action against the Islamic Repub-

lic of Iran for its role in providing material support to the

attackers. Iran was subject to suit as a state sponsor of terror-

ism under the terrorism exception to the Foreign Sovereign

Immunities Act (“FSIA”), then codified at 28 U.S.C.

§ 1605(a)(7). A district judge in the District of Columbia

entered a $71.5 million default judgment. Iran did not pay.

So began more than a decade of unsuccessful litigation

across the country to attach and execute on Iranian assets in

order to satisfy the judgment. See Rubin v. Islamic Republic of

Iran, No. Civ. A. 01-1655 (RMU), 2005 WL 670770, at *1

(D.D.C. Mar. 23, 2005), vacated, 563 F. Supp. 2d 38 (D.D.C.

2008) (granting and then vacating writs of execution against

two domestic bank accounts used by Iranian consulates);

Rubin v. Islamic Republic of Iran, 810 F. Supp. 2d 402 (D. Mass.

2011), aff'd, 709 F.3d 49 (1st Cir. 2013) (rejecting an effort to

attach Iranian antiquities in the possession of various muse-

ums); Rubin v. Islamic Republic of Iran, 33 F. Supp. 3d 1003

(N.D. Ill. 2014) (same). This appeal concerns the last decision

on this list.

The plaintiffs sought to execute on four collections of an-

cient Persian artifacts located within the territorial jurisdic-

tion of the Northern District of Illinois: the Persepolis Collec-

tion, the Chogha Mish Collection, and the Oriental Institute

Collection, all in the possession of the University of Chicago;

and the Herzfeld Collection, split between the University

and Chicago’s Field Museum of Natural History. The case

No. 14-1935 3

was last here on some procedural issues early in the attach-

ment proceeding. See Rubin v. Islamic Republic of Iran,

637 F.3d 783 (7th Cir. 2011), cert. denied, 133 S. Ct. 23 (2012). It

now returns on the merits.

A foreign state’s property in the United States is immune

from attachment and execution, see 28 U.S.C. § 1609, but

there are a few narrow exceptions. The plaintiffs identified

three possible paths to reach the artifacts: subsections (a) and

(g) of 28 U.S.C. § 1610, both part of the FSIA; and section 201

of the Terrorism Risk Insurance Act of 2002 (“TRIA”), Pub. L.

No. 107-297, 116 Stat. 2322 (codified at 28 U.S.C. § 1610 note),

which permits holders of terrorism-related judgments to

execute on assets that are “blocked” by executive order

under certain international sanctions provisions. The district

court entered judgment against the plaintiffs, finding no

statutory basis to execute on the artifacts.

We affirm. The assets are not blocked by existing execu-

tive order, so execution under TRIA is not available. Nor

does § 1610(a) apply. That provision permits execution on a

foreign state’s property “used for a commercial activity in

the United States.” We read this exception to require com-

mercial use by the foreign state itself, not a third party. Iran

did not put the artifacts to any commercial use.

Lastly, § 1610(g) is not itself an exception to execution

immunity. Instead, it partially abrogates the so-called Bancec

doctrine, which holds that a judgment against a foreign state

cannot be executed on property owned by its juridically

separate instrumentality. First Nat’l City Bank v. Banco Para El

Comercio Exterior de Cuba (“Bancec”), 462 U.S. 611, 626–29

(1983). The Bancec rule can be overcome in two ways: The

holder of a judgment against a foreign state may execute on

4 No. 14-1935

the property of its instrumentality if the sovereign and its

instrumentality are alter egos or if adherence to the rule of

separateness would work an injustice. Id.

Section 1610(g) lifts the Bancec rule for holders of terror-

ism-related judgments, allowing attachment in aid of execu-

tion “as provided in this section” without regard to the

presumption of separateness—that is, without the require-

ment of establishing alter-ego status or showing an injustice.

The phrase “as provided in this section” refers to the im-

munity exceptions found elsewhere in § 1610, one of which

must apply to overcome execution immunity. So although

subsection (g) substantially eases the enforcement process

for terrorism victims by removing the Bancec barrier, it is not

a freestanding terrorism exception to execution immunity.

I. Background

The artifacts at issue here arrived in the United States

over a 60-year timespan beginning in the 1930s. In 1937 Iran

loaned the Persepolis Collection—roughly 30,000 clay tablets

and fragments containing some of the oldest writings in the

world—to the University of Chicago’s Oriental Institute for

research, translation, and cataloguing. In 1945 the Field

Museum purchased a collection of approximately 1,200

prehistoric artifacts from Dr. Ernst Herzfeld, a German

archaeologist active in Persia in the early 20th century (the

Herzfeld Collection). In the 1960s Iran excavated clay seal

impressions from the ancient Chogha Mish settlement and

loaned them to the University’s Oriental Institute for aca-

demic study (the Chogha Mish Collection). Most items in

this collection were returned to Iran in 1970, but the Univer-

sity has since located some objects previously missing from

the collection. In the 1980s and 1990s, the Oriental Institute

No. 14-1935 5

received several small donations of Persian artifacts from

Iran and other donors. These artifacts are not really a dis-

crete collection, but the parties refer to them as the “Oriental

Institute Collection,” so we’ll do the same.

The plaintiffs are American victims of a suicide-bomb at-

tack carried out by Hamas in Jerusalem on September 4,

1997, with material support from Iran. In 2003 the survivors

and their close family members filed suit against Iran in

federal court in the District of Columbia, proceeding under

the terrorism exception to jurisdictional sovereign immunity,

then codified at § 1605(a)(7) of the FSIA. (In January 2008

Congress repealed § 1605(a)(7) and enacted a new terrorism

exception to jurisdictional sovereign immunity codified at

28 U.S.C. § 1605A. See National Defense Authorization Act

for Fiscal Year 2008, Pub. L. No. 110-181, § 1083, 122 Stat. 3,

338–44.)

The plaintiffs won a $71.5 million default judgment, see

Campuzano v. Islamic Republic of Iran, 281 F. Supp. 2d 258

(D.D.C. 2003), and quickly commenced enforcement actions

around the country in an effort to collect. As relevant here,

the plaintiffs registered the judgment in the Northern Dis-

trict of Illinois, initiating attachment proceedings for the

purpose of executing on the four collections then in the

possession of the University and the Field Museum. 1 (We’ll

refer to the University and the Field Museum collectively as

“the Museums” unless the context requires otherwise.)

1 The plaintiffs later converted their § 1605(a)(7) judgment to one under

§ 1605A. See Rubin v. Islamic Republic of Iran, 270 F.R.D. 7, 9 & n.3 (D.D.C.

2010).

6 No. 14-1935

Significant procedural battles ensued. We resolved these

disputes in our earlier opinion and need not repeat that

litigation history. See Rubin, 637 F.3d at 786–89. For present

purposes it’s enough to note that the plaintiffs initially

proposed two possible ways to overcome Iran’s execution

immunity. First, they invoked § 1610(a), the “commercial

activity” exception to execution immunity. Second, they

pointed to TRIA, which permits execution on the blocked

assets of a state sponsor of terrorism (or its agency or in-

strumentality) to satisfy a judgment obtained under the

terrorism exception to jurisdictional sovereign immunity.

After we sent the case back to the district court, the par-

ties engaged in discovery on the four collections, and Iran

and the Museums moved for summary judgment. The

district judge granted the motion. First, he rejected the

plaintiffs’ claim that the artifacts are subject to execution

under § 1610(a). The judge read this exception as limited to

property used for a commercial activity by the foreign state

itself. Because Iran hadn’t used the artifacts for commercial

activity, the judge held that § 1610(a) does not apply.

The judge also held that because the assets in question

are not blocked—i.e., frozen—by any current executive

order, execution under TRIA is likewise unavailable.

Finally, in their response to the summary-judgment mo-

tion, the plaintiffs identified a third possible path to reach

the artifacts: § 1610(g), which they argued is an independent

exception to execution immunity available to victims of

state-sponsored terrorism. The judge rejected this argument

too, concluding that subsection (g) abrogates the Bancec rule

for terrorism-related judgments but is not a freestanding

terrorism exception to execution immunity.

No. 14-1935 7

Finding no statutory basis to execute on the artifacts, the

judge entered judgment for Iran and the Museums. The

plaintiffs appealed, reprising all three arguments.

II. Discussion

A. Which Artifacts Remain at Issue?

Our first task is to identify which of the four collections is

even potentially subject to attachment and execution at this

juncture. Two basic criteria apply: (1) the artifacts must be

owned by Iran, and (2) the artifacts must be within the

territorial jurisdiction of the district court. See Republic of

Argentina v. NML Capital, Ltd., 134 S. Ct. 2250, 2257 (2014)

(“Our courts generally lack authority in the first place to

execute against property in other countries … .”) (citation

omitted); see also Autotech Techs. LP v. Integral Research & Dev.

Corp., 499 F.3d 737, 750 (7th Cir. 2007) (“The FSIA did not

purport to authorize execution against a foreign sovereign’s

property, or that of its instrumentality, wherever that prop-

erty is located around the world. We would need some hint

from Congress before we felt justified in adopting such a

breathtaking assertion of extraterritorial jurisdiction.”).

There’s no dispute that the Persepolis Collection is

owned by Iran and is in the physical possession of the

University. The three other collections, however, are outside

the reach of this proceeding for reasons relating to their

present location or the absence of Iranian ownership.

As we’ve just explained, when the district court entered

judgment, the University had possession of remnants of the

Chogha Mish Collection. But intervening developments

have placed these artifacts beyond the grasp of the federal

courts. After filing their notice of appeal, the plaintiffs asked

8 No. 14-1935

us to stay the district court’s judgment pending appeal. We

denied the motion. The State Department then informed the

University that the United States was obligated to return the

Chogha Mish artifacts to Iran. The University, in turn,

notified us that it would return the Chogha Mish artifacts to

Iran within 45 days unless the court ordered otherwise. We

did not order otherwise. So the University delivered the

artifacts to Iran’s National Museum in Tehran and filed

notice with the court that Iran received and accepted them.

Accordingly, the Chogha Mish Collection is no longer within

the territorial jurisdiction of the district court.

The Herzfeld and the Oriental Institute Collections re-

main within the court’s territorial jurisdiction, but they are

not Iranian property. The plaintiffs have tried to cast doubt

on the legitimacy of their removal from Iran, arguing that

Dr. Herzfeld is regarded by some in the academic communi-

ty as a plunderer and that the artifacts in these collections

are covered by Iran’s National Heritage Protection Act of

1930, which gives the government of Iran an option to

exercise control over certain antiquities unearthed in the

country. The Museums, on the other hand, maintain that

they were bona fide purchasers or recipients of these collec-

tions; the plaintiffs have not meaningfully contested this

point.

We don’t need to resolve any questions about the prove-

nance of the Herzfeld and Oriental Institute Collections or

explore the circumstances under which the Museums ac-

quired them. As the plaintiffs concede, Iran has expressly

disclaimed any legal interest in the two collections, and the

district judge found that no evidence supports Iranian

No. 14-1935 9

ownership of these artifacts. The plaintiffs have not given us

any reason to disturb this ruling, and we see none ourselves.

Because the Chogha Mish Collection is no longer within

the territorial jurisdiction of the district court and Iran has

disclaimed ownership of the Herzfeld and Oriental Institute

Collections, we confine our merits review to the Persepolis

Collection.

B. Statutory Framework

We traced the history of the foreign sovereign immunity

doctrine and the enactment of the FSIA in our earlier opin-

ion. See Rubin, 637 F.3d at 792–94. A brief repetition is help-

ful to a proper understanding of the statutory-interpretation

questions presented here.

Foreign sovereign immunity “is a matter of grace and

comity on the part of the United States,” and for much of our

nation’s history was left to the discretion of the Executive

Branch. Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480,

486 (1983). As such, federal courts “consistently … deferred

to the decisions of the political branches—in particular, those

of the Executive Branch—on whether to take jurisdiction

over actions against foreign sovereigns and their instrumen-

talities.” Id. Under the common-law doctrine, a diplomatic

representative of the foreign state would request a “sugges-

tion of immunity” from the State Department, and if the

State Department obliged, the court would surrender juris-

diction without further inquiry; absent a suggestion of

immunity, the court would decide the immunity question

itself based on policies established by the State Department.

Rubin, 637 F.3d at 793. Either way, “[t]he process … entailed

substantial judicial deference to the Executive Branch.” Id.

10 No. 14-1935

Even if a court acquired jurisdiction and awarded judg-

ment against a foreign state, “the United States gave abso-

lute immunity to foreign sovereigns from the execution of

judgments.” Autotech, 499 F.3d at 749. Successful plaintiffs

had to rely on voluntary payment by the foreign state. Id.

In 1952 the State Department adopted a “restrictive” the-

ory of foreign sovereign immunity, conferring jurisdictional

immunity in cases arising out of a foreign state’s “public

acts” but withholding it in “cases arising out of a foreign

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

“Under the restrictive, as opposed to the ‘absolute,’ theory of

foreign sovereign immunity, a state is immune from the

jurisdiction of foreign courts as to its sovereign or public acts

(jure imperii), but not as to those that are private or commer-

cial in character (jure gestionis).” Saudi Arabia v. Nelson,

507 U.S. 349, 359–60 (1993). Even under this theory, howev-

er, foreign sovereign property remained absolutely immune

from execution. Autotech, 499 F.3d at 749.

The State Department’s shift to the restrictive theory of

jurisdictional immunity “‘thr[ew] immunity determinations

into some disarray,’ since ‘political considerations some-

times led the Department to file suggestions of immunity in

cases where immunity would not have been available.’”

NML Capital, 134 S. Ct. at 2255 (brackets in original) (quoting

Republic of Austria v. Altmann, 541 U.S. 677, 690 (2004)).

Essentially, “sovereign immunity determinations were

[being] made in two different branches, subject to a variety

of factors, sometimes including diplomatic considerations.

Not surprisingly, the governing standards were neither clear

nor uniformly applied.” Verlinden, 461 U.S. at 488.

No. 14-1935 11

In 1976 Congress stepped in and enacted the FSIA, which

“largely codifies the so-called ‘restrictive’ theory of foreign

sovereign immunity first endorsed by the State Department

in 1952.” Republic of Argentina v. Weltover, Inc., 504 U.S. 607,

612 (1992). The Act establishes a “comprehensive set of legal

standards governing claims of immunity in every civil action

against a foreign state.” Verlinden, 461 U.S. at 488. “The key

word … is comprehensive.” NML Capital, 134 S. Ct. at 2255.

“[A]ny sort of immunity defense made by a foreign sover-

eign in an American court must stand on the Act’s text. Or it

must fall.” Id. at 2256.

The Act codifies the two common-law immunities we’ve

just discussed—jurisdictional immunity (28 U.S.C. § 1604)

and execution immunity (id. § 1609). Only the latter is at

issue here. Section 1609 states that “the property in the

United States of a foreign state shall be immune from at-

tachment[,] arrest[,] and execution except as provided in

sections 1610 and 1611 of this chapter.” Accordingly, the

Persepolis Collection is immune from attachment and

execution unless an exception listed in § 1610 applies. (Sec-

tion 1611 of Title 28 of the U.S. Code lists exceptions to the

exceptions and is not implicated here.)

The most prominent are the so-called commercial-

activity exceptions found in subsections (a) and (b) of § 1610.

Under § 1610(a) a person who holds a judgment against a

foreign state may execute it on the foreign state’s property

“used for a commercial activity in the United States” if one

of seven listed conditions is met. Similarly, under § 1610(b) a

person who holds a judgment against a foreign state’s

instrumentality may execute it on “any property in the

United States of [the] … instrumentality … engaged in

12 No. 14-1935

commercial activity in the United States” if one of three

listed conditions is met.

So to summarize, at common law execution immunity

was absolute, Autotech, 499 F.3d at 749, but subsections (a)

and (b) of § 1610 together codify a narrower version of the

restrictive theory of jurisdictional immunity for the execu-

tion of judgments, allowing successful claimants to attach

and execute on foreign sovereign property “used for a

commercial activity” in this country, at least in some circum-

stances. 2

The plaintiffs point to § 1610(a) and § 1610(g) as possible

paths to reach the artifacts. They also rely on section 201(a)

of TRIA. We turn to these arguments now.

C. 28 U.S.C. § 1610(a)

As we’ve just explained, § 1610(a) establishes rules for

executing a judgment against a foreign state on the foreign

state’s property; § 1610(b) establishes rules for executing a

judgment against a foreign state’s instrumentality on the

instrumentality’s property. The judgment here is against

Iran, and Iran owns the Persepolis Collection, so subsec-

tion (a) is the relevant subsection.

Generally speaking, § 1610(a) permits the holder of a

judgment against a foreign state to execute on property of

the foreign state “used for a commercial activity in the

United States” but only if one of seven enumerated condi-

2 Section 1610 also permits in rem execution of certain foreclosure

judgments against a foreign state’s vessels. 28 U.S.C. § 1610(e). Other

parts of § 1610 address, for example, certain procedural requirements for

execution, see, e.g., id. § 1610(c), and the sensitive matter of prejudgment

attachment of foreign sovereign property, id. § 1610(d).

No. 14-1935 13

tions is satisfied. For example, a judgment creditor may

proceed against a foreign state’s property “used for a com-

mercial activity in the United States” if the foreign state has

expressly or impliedly waived execution immunity,

§ 1610(a)(1); or if the property in question “was used for the

commercial activity upon which the claim is based,”

§ 1610(a)(2); or if “the judgment is based on an order con-

firming an arbitral award,” § 1610(a)(6).

At issue here is subsection (a)(7), which permits attach-

ment and execution if the following terms are met:

(a) The property in the United States of a for-

eign state, … used for a commercial activity in the

United States, shall not be immune from attach-

ment in aid of execution, or from execution,

upon a judgment entered by a court of the

United States or of a State after the effective

date of this Act, if—

…

(7) the judgment relates to a claim for which

the foreign state is not immune under section

1605A or section 1605(a)(7) [the present and

former terrorism exceptions to jurisdiction-

al immunity] … regardless of whether the

property is or was involved with the act

upon which the claim is based.

§ 1610(a)(7) (emphases added).

The plaintiffs obtained their judgment against Iran in

2003 under § 1605(a)(7), the terrorism exception to jurisdic-

tional immunity then in effect. In 2008 Congress replaced

§ 1605(a)(7) with § 1605A, and the plaintiffs converted their

14 No. 14-1935

judgment to one under the new statute. So there’s no ques-

tion that the special condition in subsection (a)(7) is satisfied.

That leaves the basic “commercial activity” requirement

of § 1610(a). The dispute here centers on the key statutory

phrase identifying the property that may be subject to

execution under this exception: “property in the United

States of a foreign state … used for a commercial activity in

the United States.” § 1610(a). The passive-voice phrasing of

this sentence raises an interpretive question: Used by whom?

The plaintiffs contend that a third party’s commercial use

of the property triggers § 1610(a) and that the University’s

academic study of the Persepolis Collection counts as a

commercial use. Iran and the University counter that the

foreign state itself must use its property for a commercial

activity, and regardless, academic study isn’t a commercial

use. The United States has weighed in as an amicus curiae

on the side of the interpretation urged by Iran and the

University—namely, that the exception in § 1610(a) applies

only when the foreign sovereign itself (not a third party) uses

the property for a commercial activity.

We’re skeptical that academic study qualifies as a com-

mercial use, but we’ll put that question aside and focus on

the antecedent one: Whose commercial use counts?

The Fifth Circuit has held that § 1610(a) is triggered only

when the foreign state itself uses its property in the United

States for a commercial activity. See Conn. Bank of Commerce v.

Republic of Congo, 309 F.3d 240, 256 n.5 (5th Cir. 2002)

(“[W]hat matters under the statute is how the foreign state

uses the property, not how private parties may have used the

property.”).

No. 14-1935 15

The Second and Ninth Circuits agree. See Aurelius Capital

Partners v. Republic of Argentina, 584 F.3d 120, 131 (2d Cir.

2009) (“The commercial activities of the private corporations

who managed these assets are irrelevant to this inquiry. …

[B]efore the retirement and pension funds at issue could be

subject to attachment, the funds in the hands of the Republic

must have been ‘used for a commercial activity.’”); Af-Cap,

Inc. v. Chevron Overseas (Congo) Ltd., 475 F.3d 1080, 1090–91

(9th Cir. 2007) (adopting the Fifth Circuit’s interpretation).

We think these circuits have understood § 1610(a) cor-

rectly. It’s true that a legislature’s use of the passive voice

sometimes reflects indifference to the actor. See Dean v.

United States, 556 U.S. 568, 572 (2009) (“The passive voice

focuses on an event that occurs without respect to a specific

actor … .”). But attributing indifference to Congress in this

instance would be inconsistent with the FSIA’s statutory

declaration of purpose, which explicitly invokes the interna-

tional law understanding of foreign sovereign immunity:

“Under international law, states are not immune from the

jurisdiction of foreign courts insofar as their commercial

activities are concerned, and their commercial property may

be levied upon for the satisfaction of judgments rendered

against them in connection with their commercial activities.”

28 U.S.C. § 1602 (emphases added).

Section 1602 thus instructs courts to interpret the immun-

ities and exceptions in the FSIA against the backdrop of the

international law norm that foreign sovereigns do not have

immunity for “their commercial activities” or immunity from

execution on “their commercial property.” This suggests that

a foreign sovereign’s property is subject to execution under

§ 1610(a) only when the sovereign itself uses the property for

16 No. 14-1935

a commercial activity. While the passive-voice phrasing in

§ 1610(a) introduces some ambiguity about whose commer-

cial use matters, § 1602’s declaration of purpose clarifies that

foreign states may lose execution immunity only by virtue of

their own commercial use of their property in the United

States, not a third party’s.

The plaintiffs object that the declaration of purpose isn’t

relevant because resort to legislative history is not necessary

when the statutory language is unambiguous. We disagree

for two reasons. First, § 1602 is legislation, not legislative

history. It was written, debated, and enacted by Congress

and signed into law by the President—in the same manner

and at the same time as § 1610. None of the standard objec-

tions to judicial reliance on legislative history inhibit our

resort to a statutory declaration of purpose for help in inter-

preting a part of the statute to which it applies. 3

Second, as we’ve just noted, the passive-voice phrasing of

§ 1610(a) creates uncertainty about whose commercial use of

the property suffices to forfeit a foreign state’s execution

immunity. The text itself raises the question, and the uncer-

tainty is all the more apparent when subsection (a) is consid-

ered in its broader statutory context. See King v. Burwell,

135 S. Ct. 2480, 2489 (2015) (“[O]ftentimes the ‘meaning—or

ambiguity—of certain words or phrases may only become

evident when placed in context.’ So when deciding whether

the language is plain, we must read the words ‘in their

context and with a view to their place in the overall statutory

scheme.’” (citation omitted) (quoting FDA v. Brown & Wil-

3We’re not suggesting, however, that a legislative statement of purpose

provides statutory meaning independent of the operative statutory text.

No. 14-1935 17

liamson Tobacco Corp., 529 U.S. 438, 450 (2002))). The FSIA

starts with a baseline rule of execution immunity; the excep-

tions are few and “narrowly drawn.” Autotech, 499 F.3d at

749.

Given the broad protective stance of the statutory scheme

in general, we cannot say with confidence that § 1610(a)

unambiguously abrogates a foreign sovereign’s execution

immunity when a third party uses its property for a com-

mercial activity. Rather, the statutory declaration of purpose

suggests that a narrower interpretation is correct: A foreign

state may lose its execution immunity only by its own com-

mercial use of its property in the United States.

Trying another tack, the plaintiffs direct our attention to

the language of § 1605(a), the commercial-activity exception

to jurisdictional immunity, which specifically states that the

commercial activity must be “carried on in the United States

by the foreign state” before immunity is lost. (Emphasis

added.) The absence of similar language in § 1610(a), they

argue, means that the commercial-activity exception to

execution immunity is broader than its parallel in § 1605(a)

and applies whenever a third party uses a foreign state’s

property for a commercial activity.

This argument contradicts the settled principle that the

exceptions to execution immunity are narrower than, and

independent from, the exceptions to jurisdictional immunity.

NML Capital, 134 S. Ct. at 2256; Rubin, 637 F.3d at 796;

DeLetelier v. Republic of Chile, 748 F.3d 790, 798–99 (2d Cir.

1984). This principle is both well established and based on a

critical diplomatic reality: Seizing a foreign state’s property

is a serious affront to its sovereignty—much more so than

taking jurisdiction in a lawsuit. Correspondingly, judicial

18 No. 14-1935

seizure of a foreign state’s property carries potentially far-

reaching implications for American property abroad.

The plaintiffs’ interpretation of § 1610(a) turns this im-

portant principle on its head. A third party’s commercial use

of a foreign state’s property, which cannot establish jurisdic-

tion over the foreign state, would suffice to strip the foreign

state’s property of its execution immunity. That cannot be

right.

Accordingly, we join the emerging consensus of our sister

circuits and hold that a third party’s commercial use of a

foreign state’s property does not trigger the § 1610(a) excep-

tion to execution immunity. Rather, § 1610(a) applies only

when the foreign state itself has used its property for a com-

mercial activity in the United States; the actions of third

parties are irrelevant.

Nothing in the record suggests that Iran itself used the

Persepolis Collection for a commercial activity in the United

States. Indeed, the plaintiffs do not argue otherwise. The

district court reached the correct conclusion: Section 1610(a)

does not apply. 4

D. 28 U.S.C. § 1610(g)

Alternatively, the plaintiffs argue that § 1610(g) provides

an independent basis to execute on the artifacts. A bit of

background is necessary before we take up this argument.

Congress enacted § 1610(g) as part of the National De-

fense Authorization Act of 2008, which ushered in several

changes to the FSIA as applied in cases of state-sponsored

4 Our holding makes it unnecessary to decide whether the University’s

academic study of the Persepolis Collection is a commercial use.

No. 14-1935 19

terrorism. We’ve already mentioned one: Section 1605A

replaced § 1605(a)(7), the previous terrorism exception to

jurisdictional immunity. Section 1605A includes an identical

exception to jurisdictional immunity but “is more compre-

hensive and more favorable to plaintiffs because it adds a

broad array of substantive rights and remedies that simply

were not available in actions under” the previous law. In re

Islamic Republic of Iran Terrorism Litig., 659 F. Supp. 2d 31, 58

(D.D.C. 2009).

The other major change was the creation of § 1610(g),

which applies to execution proceedings to enforce judg-

ments obtained under § 1605A and eases the collection

process for victims of state-sponsored terrorism by eliminat-

ing the Bancec rule that foreign sovereigns and their instru-

mentalities are treated separately for execution purposes.

The 2008 legislation also provided that certain judgments

obtained under the old § 1605(a)(7) could be converted to

judgments under § 1605A so that judgment creditors could

access the benefits of § 1610(g). The plaintiffs successfully

converted their judgment, and they now contend that

§ 1610(g) makes all Iranian assets available for execution

without proof of a nexus to commercial activity—that is,

without having to satisfy § 1610(a). They argue, in other

words, that subsection (g) is a freestanding exception to

execution immunity for terrorism-related judgments.

Iran and the University dispute that interpretation. They

agree that subsection (g) was intended to—and does—make

it easier for terrorism victims to enforce their judgments. But

they maintain that it does so only by abrogating the Bancec

doctrine for § 1605A judgments; subsection (g) is not itself an

exception to execution immunity. The United States supports

20 No. 14-1935

this interpretation and joins Iran and the University in

urging us to adopt it.

We begin with the Bancec doctrine, which derives from

the Supreme Court’s 1983 decision known by that name.

Bancec established a general presumption that a judgment

against a foreign state may not be executed on property

owned by a juridically separate agency or instrumentality.

462 U.S. at 626–27 (“Due respect for the actions taken by

foreign sovereigns and for principles of comity between

nations leads us to conclude … that government instrumen-

talities established as juridical entities distinct and inde-

pendent from their sovereign should normally be treated as

such.”) (citation omitted). That’s the general rule in the law

of private corporations, and the Court applied it to the

juridically separate instrumentalities of foreign govern-

ments. Id. The Court recognized two exceptions: The holder

of a judgment against a foreign state may execute on the

property of its instrumentality if the sovereign and its in-

strumentality are alter egos or if adherence to the rule of

separateness would work a fraud or injustice. Id. at 628–33.

The Court expressly declined to elaborate on these excep-

tions, however. Id. at 633 (“Our decision today announces no

mechanical formula for determining the circumstances

under which the normally separate juridical status of a

government instrumentality is to be disregarded.”). So the

lower courts had to fill the gap. Soon after Bancec was decid-

ed, the federal courts began to coalesce around a set of five

factors for determining when the exceptions applied. See,

e.g., Flatow v. Islamic Republic of Iran, 308 F.3d 1065, 1071 n.9

(9th Cir. 2002); Walter Fuller Aircraft Sales, Inc. v. Republic of

Philippines, 965 F.2d 1375, 1380–82, 1380–81 n.7 (5th Cir.

No. 14-1935 21

1992). The following formula from the Fifth Circuit is typical;

courts should consider:

(1) The level of economic control by the gov-

ernment; (2) whether the entity’s profits go to

the government; (3) the degree to which gov-

ernment officials manage the entity or other-

wise have a hand in its daily affairs; (4) wheth-

er the government is the real beneficiary of the

entity’s conduct; and (5) whether adherence to

separate identities would entitle the foreign

state to benefits in United States courts while

avoiding its obligations.

Walter Fuller Aircraft, 965 F.2d at 1380 n.7.

Fast forward to 2008 and the enactment of the National

Defense Authorization Act, which created § 1605A and

§ 1610(g). In relevant part, § 1610(g) states:

[T]he property of a foreign state against which

a judgment is entered under section 1605A, and

the property of an agency or instrumentality of

such a state, … is subject to attachment … and

execution … as provided in this section, regard-

less of—

(A) the level of economic control over

the property by the government of the for-

eign state;

(B) whether the profits of the property

go to that government;

22 No. 14-1935

(C) the degree to which officials of that

government manage the property or oth-

erwise control its daily affairs;

(D) whether that government is the sole

beneficiary in interest of the property; or

(E) whether establishing the property as

a separate entity would entitle the foreign

state to benefits in United States courts

while avoiding its obligations.

(Emphases added.)

Put more succinctly, subsection (g) permits a terrorism

victim who wins a § 1605A judgment to execute on the

property of the foreign state and the property of its agency or

instrumentality “as provided in this section” but “regardless of”

the five factors listed in subsections (A)–(E).

As the careful reader no doubt has grasped, the five fac-

tors made irrelevant by subsection (g) mirror almost exactly

the factors developed by the lower courts under the Bancec

doctrine. For ease of comparison, we’ve prepared this chart:

Bancec Doctrine Factors Factors Made Irrelevant by

Subsection (g)

(1) the level of economic (A) the level of economic

control by the government; control over the property by

the government of the for-

eign state;

(2) whether the entity’s (B) whether the profits of the

profits go to the government; property go to that govern-

No. 14-1935 23

ment;

(3) the degree to which (C) the degree to which

government officials manage officials of that government

the entity or otherwise have manage the property or

a hand in its daily affairs; otherwise control its daily

affairs;

(4) whether the government (D) whether that government

is the real beneficiary of the is the sole beneficiary in

entity’s conduct; and interest of the property; or

(5) whether adherence to (E) whether establishing the

separate identities would property as a separate entity

entitle the foreign state to would entitle the foreign

benefits in United States state to benefits in United

courts while avoiding its States courts while avoiding

obligations. its obligations.

The nearly identical language is either a stunning coinci-

dence or Congress drafted subsection (g) to abrogate the

Bancec doctrine for terrorism-related judgments. It’s impos-

sible to ignore the clear textual parallels between subsec-

tion (g), the Bancec rule, and the preexisting caselaw. Indeed,

we’ve already noted that subsection (g) overrides the Bancec

doctrine for terrorism-related judgments. See Gates v. Syrian

Arab Republic, 755 F.3d 568, 576 (7th Cir. 2014).

The key question here—a question not expressly decided

in Gates—is whether, as the plaintiffs contend, subsection (g)

goes further and establishes a freestanding “terrorism”

exception to execution immunity.

24 No. 14-1935

Iran and the University—with support from the United

States—caution against reading a corrective measure so

plainly aimed at eliminating the Bancec barrier as creating a

new and independent exception to execution immunity for

all terrorism-related judgments. They direct our attention to

language in subsection (g) specifically limiting its scope: The

text says that for § 1605A judgments, the property of a

foreign state and the property of its agency or instrumentali-

ty are “subject to attachment … and execution … as provided

in this section.” The highlighted phrase makes very little

sense—indeed, is entirely superfluous—if subsection (g) is

itself a freestanding exception to execution immunity. The

plaintiffs’ reading of subsection (g) thus violates the “cardi-

nal principle” that a statute should be interpreted to avoid

superfluity. TRW, Inc. v. Andrews, 534 U.S. 19, 31 (2001).

The plaintiffs suggest that the phrase “as provided in this

section” refers to only the “non-substantive rules” set forth

in § 1610. But they offer no basis for limiting the phrase in

that manner, nor have they identified which non-substantive

rules they think Congress meant to include in subsection (g).

Moreover, it would be very odd to read “as provided in this

section” as referring only to certain unidentified subsections

of § 1610. The word “section” must mean what it says:

Subsection (g) modifies all of § 1610.

Treating § 1610(g) as an independent basis for execution

also creates superfluities in other parts of the statute. For

example, subsections (a)(7) and (b)(3) of § 1610 relate specifi-

cally to judgments obtained under § 1605A, the current

terrorism exception to jurisdictional immunity, and its

predecessor, § 1605(a)(7). If subsection (g) paves a dedicated

lane for all execution actions by victims of state-sponsored

No. 14-1935 25

terrorism, then § 1610(a)(7) and (b)(3) serve no purpose at

all. 5

In their reply brief, the plaintiffs seek refuge in our deci-

sion in Gates, which they say has already resolved this

interpretive question in their favor. We disagree, though we

can see how Gates might be read in that way. Gates involved

a lien-priority contest between two sets of terrorism victims

holding § 1605A judgments against Syria. 755 F.3d at 572–73.

Both sets of victims—the “Gates plaintiffs” and the “Baker

plaintiffs”—sought to execute on the same assets owned by

Syrian instrumentalities but held by an American bank and a

telecommunications company and located within the territo-

rial jurisdiction of the Northern District of Illinois. Id. at 573–

74. The dispute concerned compliance with the procedural

requirements of § 1610(c). That subsection provides that

[n]o attachment or execution referred to in

subsections (a) and (b) of this section shall be

permitted until the court has ordered such at-

tachment and execution after having deter-

mined 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.

5 Moreover, as we’ve noted, subsection (g) was enacted at the same time

as § 1605A. In the same 2008 legislation, subsections (a)(7) and (b)(3) of

§ 1610 were amended to make the commercial-activity exceptions

applicable to judgments obtained under § 1605A, the new exception to

jurisdictional immunity for terrorism-related cases. If, as the plaintiffs

claim, subsection (g) were a freestanding exception to execution immuni-

ty for § 1605A judgments, then these amendments—enacted at the same

time—were completely unnecessary.

26 No. 14-1935

§ 1610(c). The cross-referenced provision establishes rules

for obtaining a default judgment against a foreign state or its

agency or instrumentality. 28 U.S.C. § 1608(e).

The Gates plaintiffs obtained a § 1610(c) order from the

district court in the District of Columbia, where their judg-

ment was entered, then registered the judgment in the

Northern District of Illinois, where the assets of the Syrian

instrumentality were located. A few days later, the Baker

plaintiffs also registered their judgment in the Northern

District of Illinois, but “[u]nlike the Gates plaintiffs, … [they]

sought and obtained a new § 1610(c) order from the North-

ern District of Illinois.” Gates, 755 F.3d at 574. The Baker

plaintiffs then argued that their lien had priority because the

Gates plaintiffs hadn’t obtained a new § 1610(c) order in the

Northern District of Illinois. The Gates plaintiffs responded

with two arguments: First, “§ 1610(c) does not apply at all,”

and second, “even if it does, one order per judgment suffices

for attachment and execution anywhere in the United

States.” Id. at 575.

The panel sided with the Gates plaintiffs, ruling in their

favor on both grounds, either of which was independently

sufficient to support the judgment. Id. at 578 (“For two

independent reasons, then, § 1610(c) does not bar the priori-

ty of the Gates plaintiffs’ liens … .”). Addressing the first

argument, the panel noted that the Gates plaintiffs “are not

seeking attachment under § 1610(a) or (b). They seek at-

tachment under § 1610(g), which authorizes attachment of

property of foreign state sponsors of terrorism and their

agencies or instrumentalities to execute judgments under

§ 1605A for state-sponsored terrorism.” Id. at 575. The panel

continued: “Section 1610(g) is not mentioned in § 1610(c). By

No. 14-1935 27

its terms, then, § 1610(c) simply does not apply to execution

or attachment under § 1610(g).” Id.

Alternatively, the panel held that “[e]ven if § 1610(c) ap-

plie[s] to attachment efforts under § 1610(g),” one order

“suffices for attachment efforts throughout the United

States.” Id. at 577. The § 1610(c) order issued by the D.C.

district court was thus sufficient; the Gates plaintiffs “were

not required to seek a duplicative determination of the same

question by the Northern District of Illinois before attaching

the Syrian assets.” Id. at 578.

Notably, Gates assumes rather than decides the crucial

antecedent question—that is, whether § 1610(g) is itself a

freestanding exception to execution immunity. Instead, it

simply describes subsection (g) in a way that implies an

affirmative answer. Perhaps that’s not surprising; the issue

was not developed by the parties. To be sure, the Gates

opinion touches on the Bancec doctrine, observing that

§ 1610(g) “was intended to avoid limits the Supreme Court

had imposed on the ability of litigants to attach the assets of

foreign state agencies and instrumentalities.” Id. at 576. And

there’s no doubt that the opinion treats § 1610(g) as if it were

an independent exception to execution immunity, albeit

without actually deciding the question. Indeed, that’s the

premise of the panel’s holding that § 1610(c) does not apply.

But nowhere does the Gates opinion grapple with the

fundamental interpretive question presented here. Instead,

the parties and the court appear to have assumed without

further inquiry that subsection (g) is an independent basis

for attachment and execution for all terrorism-related judg-

ments. Tellingly, there’s no mention in Gates of the limiting

phrase in subsection (g) “as provided in this section,” nor

28 No. 14-1935

any reference to the statutory superfluities created by the

broader interpretation advanced by the Rubin plaintiffs here.

A second appeal from the same attachment proceeding—

this time involving a dispute between the Gates plaintiffs

and the “Wyatt plaintiffs”—again found for the Gates

plaintiffs but likewise neither raised nor decided the ante-

cedent interpretive question. See Wyatt v. Syrian Arab Repub-

lic, 800 F.3d 331, 342–43 (7th Cir. 2015). The Wyatt plaintiffs

mounted a collateral challenge to the § 1610(c) order that the

Gates plaintiffs had obtained from the D.C. district court. Id.

at 334–35, 342. The panel did not directly address this argu-

ment, relying instead on the holding of Gates that “‘§ 1610(c)

simply does not apply to the attachment of assets to execute

judgments under § 1610(g) for state-sponsored terrorism.’”

Id. at 343 (quoting Gates, 755 F.3d at 575). As in Gates, the

opinion in Wyatt does not mention the fundamental inter-

pretive question about the scope of § 1610(g). Wyatt thus left

the unexamined premise of Gates unexamined.

In the meantime, the Ninth Circuit has been wrestling

with the precise question presented here in a case involving

assets of Bank Melli, an instrumentality of Iran. A panel of

that court initially adopted the interpretation urged by the

Rubin plaintiffs here—that § 1610(g) is a freestanding excep-

tion to execution immunity for terrorism-related judgments.

Bennett v. Islamic Republic of Iran, 799 F.3d 1281, 1287 (9th Cir.

2015). Bank Melli petitioned for rehearing, and three weeks

later the panel invited the views of the United States on the

proper interpretation of § 1610(g). The United States re-

sponded, taking the same position it advances in this case.

On February 22, 2016, the panel withdrew its earlier opinion

and issued an amended one again holding that subsec-

No. 14-1935 29

tion (g) contains a freestanding exception to execution

immunity. Bennett v. Islamic Republic of Iran, 817 F.3d 1131,

1141 (9th Cir. 2016). Judge Benson disagreed with the majori-

ty’s interpretation of subsection (g) and filed a partial dissent

on that issue. Id. at 1149–51. The panel expressly invited

Bank Melli to file another petition for panel and en banc

rehearing. Id. at 1136.

Bank Melli did so, and on June 14, 2016, the panel issued

a second amended opinion. See Bennett v. Islamic Republic of

Iran, Nos. 13-15442 & 13-16100, 2016 WL 3257780 (9th Cir.,

June 14, 2016). The majority reaffirmed its earlier conclusion

that “subsection (g) contains a freestanding provision for

attaching and executing against assets of a foreign state or its

agencies or instrumentalities.” Id. at *6. Judge Benson again

dissented. Id. at *11–14. With this latest decision, the Ninth

Circuit appears to be done with the case; the panel’s order

indicates that no judge requested a vote on Bank Melli’s

petition for en banc rehearing. Id. at *2.

The Bennett majority purported to explain away the “as

provided in this section” language in subsection (g) by

interpreting it to apply only to § 1610(f). Id. at *6 (“When

subsection (g) refers to attachment and execution of the

judgment ‘as provided in this section,’ it is referring to

procedures contained in § 1610(f).”). That strikes us as a

highly strained interpretation. First, as we’ve already noted,

it implausibly reads the word “section” as “subsection,” so

the phrase “as provided in this section” actually means “as

provided in subsection (f).”

Second, and importantly, § 1610(f) never became operative.

It was adopted as part of the Omnibus Consolidated and

Emergency Supplemental Appropriations Act, 1999, Pub. L.

30 No. 14-1935

No. 105-277, § 117, 112 Stat. 2681, 2681-491 (1998), and

pertains to execution on property associated with certain

regulated and prohibited financial transactions. Congress

originally authorized the President to waive subsection (f)’s

provisions “in the interest of national security.” Id. § 117(d),

112 Stat. at 2681-492. President Clinton immediately issued a

blanket waiver. Presidential Determination No. 99-1, 63 Fed.

Reg. 59,201 (Oct. 21, 1998). Congress briefly repealed the

President’s waiver authority in the Victims of Trafficking

and Violence Protection Act of 2000, Pub. L. No. 106-386,

§ 2002(f)(2), 114 Stat. 1464, 1541, 1543, but quickly restored it,

id. § 2002(f)(1)(B), 114 Stat. at 1543, codifying the Executive’s

waiver authority in 28 U.S.C. § 1610(f)(3): “The President

may waive any provision of paragraph (1) in the interest of

national security.” President Clinton issued another blanket

waiver that same day. Presidential Determination No. 2001-

03, 65 Fed. Reg. 66,483 (Oct. 28, 2000).

So subsection (f), being inoperative from the start, does

not allow any form of execution. Congress enacted subsec-

tion (g) just eight years later. If the Ninth Circuit’s reasoning

is correct, subsection (g) was effectively a nullity upon

passage. That cannot be the correct interpretation. See Voisine

v. United States, No. 14-10154, 2016 WL 3461559, at *6 (U.S.,

June 27, 2016) (explaining that Congress is presumed to

legislate against the backdrop of the “known state of the

laws” (quoting United States v. Bailey, 34 U.S. (9 Pet.) 238, 256

(1835))). It therefore makes no sense to say, as the Bennett

majority does, that the phrase “as provided in this section”

in subsection (g) refers only to subsection (f), an inoperative

part of the statute. If that were the case, then execution “as

provided in this section” would mean no execution at all.

No. 14-1935 31

For these reasons, we disagree with the Ninth Circuit’s

interpretation of subsection (g). We note that the Bennett

majority drew support for its conclusion from our decisions

in Gates and Wyatt, apparently reading them as the plaintiffs

do here. See Bennett, 2016 WL 3257780, at *7. That’s under-

standable for the reasons we’ve already explained. To the

extent that Gates and Wyatt can be read as holding that

§ 1610(g) is a freestanding exception to execution immunity

for terrorism-related judgments, they are overruled. 6

To summarize: Section 1610(g) is not itself an exception

to execution immunity for terrorism-related judgments;

rather, it abrogates the Bancec rule for terrorism-related

judgments. Accordingly, terrorism victims with unsatisfied

§ 1605A judgments against foreign states may execute on the

foreign state’s property and the property of its agency or

instrumentality—without regard to the Bancec presumption

of separateness—but they must do so “as provided in this

section.” § 1610(g). That is, they must satisfy an exception to

execution immunity found elsewhere in § 1610—namely,

subsections (a) or (b).

6 Because this opinion overrules circuit precedent and creates a conflict

with the Ninth Circuit, it has been circulated to all judges in active

service in accordance with Circuit Rule 40(e). Chief Judge Wood and

Circuit Judges Posner, Flaum, Easterbrook, and Rovner did not partici-

pate, so a majority did not vote to rehear this case en banc. Circuit Judge

Hamilton has filed a dissent from the denial of en banc review, which is

attached to this opinion.

32 No. 14-1935

E. The Terrorism Risk Insurance Act

Finally, the plaintiffs argue that the Persepolis Collection

is subject to attachment and execution under section 201(a)

of TRIA, which permits a person who holds a judgment

against a state sponsor of terrorism to execute on the foreign

state’s assets (and those of certain agencies and instrumental-

ities) if the assets have been blocked by executive order

under certain international sanctions provisions. Pub. L.

No. 107-297, § 201(a), 116 Stat. 2322, 2337 (2002). An asset is

deemed to be blocked when it has been “seized or frozen”

by the United States under section 5(b) of the Trading with

the Enemy Act or under sections 202 or 203 of the Interna-

tional Emergency Economic Powers Act. Id. § 201(d)(2)(A),

116 Stat. at 2339.

In response to the 1979 Iran hostage crisis, President

Carter invoked his authority under the International Emer-

gency Economic Powers Act and issued Executive Order

12170, which froze all Iranian assets in the United States.

Exec. Order No. 12170, 44 Fed. Reg. 65,729 (Nov. 14, 1979).

The hostage crisis was resolved in 1981 with the Algiers

Accords, and in accordance with commitments made in that

agreement, President Carter issued Executive Order 12281,

which unblocked all uncontested property interests of the

Iranian government. Exec. Order No. 12281, 46 Fed. Reg.

7923 (Jan. 19, 1981). The order gave implementing authority

to the Treasury Department. Id. at 7924. The Treasury De-

partment’s Office of Foreign Assets Control issued regula-

tions broadly defining unblocked property as “all uncontest-

ed and non-contingent liabilities and property interests of

the Government of Iran, its agencies, instrumentalities, or

controlled entities.” 31 C.F.R. § 535.333(a). A property inter-

No. 14-1935 33

est is considered “contested only if the holder thereof rea-

sonably believes that Iran does not have title or has only

partial title to the asset,” and a belief is considered reasona-

ble “only if it is based on a bona fide opinion, in writing, of

an attorney licensed to practice within the United States

stating that Iran does not have title or has only partial title to

the asset.” Id. § 535.333(c).

There’s no evidence that the University contests Iran’s

title to the Persepolis Collection. To the contrary, the Univer-

sity has reaffirmed the terms of the long-term academic loan,

which unambiguously requires it to return the artifacts to

Iran when study is complete. Nor has the University sought

or obtained an attorney’s opinion that Iran lacks title or has

only partial title to the artifacts.

The plaintiffs argue that the Persepolis Collection re-

mains a blocked asset subject to execution because the

University asserted in a June 2004 district-court filing that it

maintained a “superseding possessory right.” But no one

disputes that the University has a present possessory interest

in the Persepolis Collection. Iran nonetheless retains full

ownership. The plaintiffs place great emphasis on the fact that

Iran has periodically inquired about the progress of the

study and has occasionally requested the return of the

artifacts. That simply reinforces the University’s present

possessory interest; it’s not evidence of contested title.

Alternatively, the plaintiffs claim that the artifacts have

been “reblocked” by President Obama’s Executive Order

13599. 77 Fed. Reg. 6659, 6659 (Feb. 8, 2012). But section 4(b)

of this order expressly exempts all “property and interests in

property of the Government of Iran that were blocked

pursuant to Executive Order 12170 of November 14, 1979,

34 No. 14-1935

and thereafter made subject to the transfer directives set

forth in Executive Order 12281 of January 19, 1981.” Id. at

6660.

The plaintiffs argue that “transfer directives” means a

directive from Iran, and because Iran has never directed that

these particular artifacts be transferred to it, the exception in

section 4(b) doesn’t apply to the Persepolis Collection. This

argument misreads the 2012 order, which refers to “transfer

directives set forth in” President Carter’s 1981 Executive

Order that all property meeting certain specified criteria be

returned to Iran. That is, the directive is categorical rather

than contingent on a particularized demand by Iran.

Accordingly, the district judge was right to conclude that

attachment and execution under section 201 of TRIA is

unavailable.

AFFIRMED.

No. 14-1935 35

HAMILTON, Circuit Judge, dissenting from denial of en banc

review. The panel opinion in Rubin v. Islamic Republic of Iran,

No. 14-1935, both creates a circuit split and overrules, in part,

two recent decisions of this court. Either step by itself would

ordinarily trigger our Circuit Rule 40(e), which requires cir-

culation within the court before publication to see if a major-

ity of active judges wish to rehear the case en banc.

In this case, a majority of active judges do not even have

the opportunity to vote. A majority are disqualified, so it is

impossible to hear this case en banc. In this rare situation, the

panel apparently has the power to overrule circuit precedent

and to create a circuit split without meaningful Rule 40(e) re-

view. Yet that step is a mistake that should not go without

comment. Also, most Rule 40(e) decisions settle the legal issue

in the circuit. In this rare situation, one panel’s decision to

overrule another’s decisions should not be treated as settling

the legal issue in this circuit. I respectfully dissent.

The issue is whether a provision of the Foreign Sovereign

Immunities Act (FSIA), 28 U.S.C. § 1610(g), offers a freestand-

ing basis for executing judgments against state sponsors of

terrorism, independent of § 1610(a) and (b). As dry and tech-

nical as that sounds, the issue has important practical conse-

quences for victims of state-sponsored terrorism. Most im-

portant, the Rubin panel’s view restricts execution to foreign

sovereign assets that are used: (a) by the foreign sovereign it-

self, (b) for a commercial activity, and (c) in the United States.

That reading shelters from execution a wide range of assets of

state sponsors of terrorism, such as the museum collection

here.

36 No. 14-1935

If, on the other hand, § 1610(g) offers a freestanding basis

for execution, then victims are not limited to property the sov-

ereign uses commercially in the United States. Victims of

state-sponsored terrorism may execute judgments against a

broader range of foreign sovereign assets. That’s the view of

the Ninth Circuit in Bennett v. Islamic Republic of Iran, — F.3d

—, — & nn. 4–7, 2016 WL 3257780, at *6–7 & nn. 4–7 (9th Cir.

2016), which held that § 1610(g) provides a freestanding basis

for executing judgments for state-sponsored terrorism. That

reading should enable the plaintiffs in Bennett to execute on

assets that were not used commercially in the United States.

See id. at *4 (cash in United States that was owed to Iranian

state bank for use of credit cards in Iran). That same reasoning

would extend to the museum collection at issue here.

Whether § 1610(g) provides a freestanding basis also af-

fects the procedures that victims of state-sponsored terrorism

must follow to execute their judgments. We dealt with proce-

dural issues in both Wyatt v. Syrian Arab Republic, 800 F.3d 331,

342–43 (7th Cir. 2015), and Gates v. Syrian Arab Republic, 755

F.3d 568, 575–77 (7th Cir. 2014) (alternative holding). In both

cases, we adopted the view that § 1610(g) is freestanding,

which broadens the rights of victims v. state sponsors of ter-

rorism, while still assuring due process of law.

The details of the textual arguments are laid out well in

Bennett and Rubin, and I will not repeat them. Both readings

of the text, I believe, are reasonable, meaning that the text is

ambiguous. The courts must choose between two statutory

readings: one that favors state sponsors of terrorism, and an-

other that favors the victims of that terrorism.

The FSIA contains detailed protections for foreign govern-

ments in most civil litigation. But over the years, Congress has

No. 14-1935 37

added special provisions for cases of state-sponsored terror-

ism, including the addition of § 1610(g) as part of § 1083 of

Public Law 110-181, the National Defense Authorization Act

for Fiscal Year 2008. Those special provisions, including

§ 1610(g), work together to make it easier for victims of state-

sponsored terrorism to pursue foreign sovereign assets in the

United States. In 2008, Congress even took the unusual step

of applying the new provisions to pending cases. P.L. 110-181,

§ 1083(c). See also Bennett, 2016 WL 3257780, at *8 (legislative

history of 2008 amendments shows broad intent to facilitate

execution of judgments against any property owned by state

sponsors of terrorism).

I recognize that “no legislation pursues its purposes at all

costs,” and that it “frustrates rather than effectuates legisla-

tive intent simplistically to assume that whatever furthers the

statute’s primary objective must be the law.” Rodriguez v.

United States, 480 U.S. 522, 525–26 (1987). But in interpreting

an ambiguous statutory text, we can and should draw on stat-

utory purpose and legislative history. We must choose one

side or the other. The balance here should weigh in favor of

the reading that favors the victims. We should not attribute to

Congress an intent to be so solicitous of state sponsors of ter-

rorism, who are also undeserving beneficiaries of the unusual

steps taken by the Rubin panel.

We should continue to follow Gates and Wyatt, and we

should avoid creating a conflict with Bennett, especially in a

case where the en banc court cannot act. We should allow the

Rubin plaintiffs to pursue broader categories of Iranian prop-

erty, including the Persepolis Collection at the University of

Chicago.