Amicus Curiae Brief — Rubin v. Islamic Republic Iran, 137 S. Ct. 708 (2017) (No. 16-534)

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No. 16-534

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In the Supreme Court of the United States

JENNY RUBIN, ET AL., PETITIONERS

v.

ISLAMIC REPUBLIC OF LRAN, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

JEPPREY B. WALL

Acting Solicitor General

Counsel of Record

CHAD A, READLER

Acting Assistant Allorney

General

EDWIN S, KNEEDLER

Deputy Soliciter General

HASHIM M. MoorPan

—_ Assistant Altorney

erul

ZACHARY D. Tripp

Assistant to the Solicitor

General

SHARON SWINGLE

BENJAMIN M. SHULTZ

Attorneys

RICHARD ©. VISEK — Department of Justice

Acting Legal Adviser Washington, D.C. 20530-0001

Department of State SupremeCt Briefs@usdoj.gov

Washington, D.C. 20520 (202) 514-2217

QUESTIONS PRESENTED

Under the Foreign Sovereign Immunities Act of

1976, 28 U.S.C. 1602 ef seq., the property of a foreign

state and its agencies or instrumentalities is generally

immune from attachment or execution, except as pro-

vided in 28 U.S.C. 1610 and 1611. Section 1610(a) pro-

vides that a foreign state’s property “used for a com-

mercial activity in the United States” is not immune in

certain circumstances. 28 U.S.C. 1610(a). And Section

1610(g) provides that the property of a foreign state

against which a judgment is rendered in certain terror-

ism-related cases, and the property of its agencies or

instrumentalities, is subject to attachment “as provided

in this section,” regardless of five factors. 28 U.S.C.

1610(g)(1). The questions presented are:

1. Whether 28 U.S.C. 1610(g) creates a freestanding

exception to attachment immunity, or instead simply

abrogates distinctions between a foreign state andl its

agencies and instrumentalities for purposes of attach-

ment, while still requiring a judgment creclitor to pro-

ceed “as provided in this section,” such as under

28 U.S.C. 1610(a).

2. Whether the commercial-activity exception to ex-

ecution immunity in 28 U.S.C. 1610(a) applies only when

the foreign state itself (rather than a third party) has

used the property in commercial activity.

(1)

TABLE OF CONTENTS

Page

I l

SSE Te te IEEE ENED Rae eee nae en Re OO PE er 1

RS rere ead REO Len ee ee 9

I. This Court should grant review to consider whether

Section 1610(g) creates a freestanding exception to

Ee a aT 10

A. The decision below correctly interprets Section

ITI casisiacsiscniinshiceaesihinscusiieatieaianigiianinastintinialantnasindades 10

B. The decision below conflicts with Bennett........... 13

C. The question presented is important.................... 15

D. The Court should grant this petition and hold

I I intteiterennindtnicnnnncninn 16

Il. This Court should not grant review to consider

whether a third party’s activity can satisfy

the commercial-activity requirement in Section

Sli ciinciasiccteelecacutaiaieaithasscenieiiiindlaackanincuntminbiadacasulitshpigubeans 18

NII sc siccccsinsviiciteisainnsnheeieaaeincigiiitiiialiaiat i antag than 23

TABLE OF AUTHORITIES

Cases:

Abbott v. Veasey, 137 S. Ct. 612 (2017) ..0.0.......ccccccececnreseereeee 17

Acosta v. Islamic Republic of Iran,

574 F. Supp. 2d 15 (D.D.C. 2008)... iacetediremeaicen

Af-Cap Inc. v. Chevron Overseas (Congo) Ltd.,

Coe Ee 21

Alfred Dunhill of London, Inc. v. Republic of Cuba,

3 2 8 EE Ee: SRNR 20

Aurelius Capital Partners, LP v. Republic of

Argentina, 584 F.3d 120 (2d Cir. 2009),

cert. denied, 559 U.S. 988 (2010)............-cscesersseseeseesesenenes 21

(TIT)

IV

Cases—Continued: Page

Bennett v. Islamic Republic of Iran:

Re Fo a Te Br en Be iccscseesncterecy covetcenssinans 18

826 F.3d 949 (Sth Cir. 2016) .....cccrccccreecsesessseresesceees passim

Cassirer v. Kingdom of Spain, 616 F.3d 1019

(9th Cir. 2010), cert. denied, 564 U.S. 1037 (2011) .....21, 22

Connecticut Bank of Commerce v. Republic of

Congo, 309 F.3d 240 (Sth Cir. 2002) .0.........ccccccceecceeccceeeeees 21

Davis v. Michigan Dep't of Treaswry,

a aiiesiaesiieninintenetneeticianeniissereinienicnmensevicniiiiia 19

Dean v. United States, 556 U.S. 568 (2009) ..........-........ 21, 22

Estate of Heiser v. Islamic Republic of Iran,

659 F’. Supp. 2d 20 (D.D.C. 2008)...............seccrssssersserseeseseee 18

First Nat'l City Bank v. Banco Para el Comercio

Exterior de Cuba, 462 U.S. 611 (1983).........ccccceccesceeeerennene 4

Gates v. Syrian Arab Republic, 755 F.3d 568

SR Ctl is desesnipesdinicapieenlinesiplinhtiamepiinidtnetuiedidneencintiiniinnmmntaias 8

Greenbaum. v. Islamic Republic of Iran,

451 F. Supp. 2d 90 (D.D.C. 2006).............cccsseosesscorererrereneees 18

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co.,

I I tase terccintas arene eetinieinsilidaccendisinaneinnn 17

Harrison v. Republic of Sudan, No. 13-ev-3127,

2017 WL 946422 (S.D.N.Y. Feb. 10, 2017) .........0.....00.-. 16

Kirschenbaum v. 650 Fifth Ave. & Related Props.,

830 F.3d 107 (2d Cir. 2016), cert. denied,

ee ciicctirerscadeinttastiecnmnisiariaisatibhininivshsvinseninnne 13

Ministry of Def. & Support for the Armed Forces of

the Islamic Kepublic of Iran v. Elahi,

ee iciccinssneipsciamnssesttiecingitsemsaitihnninninecinchciisapinebdvin 14

NLRB v. SW Gen., Inc., 137 S. Ct. 929 (2017)...........c00000000- 11

Operating Eng’rs Pension Trust v. Charles Minor

Equip. Rental, Inc., 766 F.2d 1301 (9th Cir. 1985)........... 14

Republic of Argentina v. NML Capital, Ltd.,

8 8 RRS AE ea satubitediiad 20

Vv

Cases—Continued: Page

Republic of Austria v. Altmann, 541 U.S. 677 (2004)........ 20

Roberts v. Sea-Land Servs., lc., 566 U.S. 93 (2012) ......... 19

Taylor v. Standard Gas Co., 306 U.S. 307 (1939)... 4

Walter Fuller Aircraft Sales, Inc. v. Republic of the

Philippines, 965 F.2d 1375 (Sth Cir. 1992) ........cccceeceereeee 4

Weinstein v. Islamic Republic of Iran, 831 F.3d 470

Is Oi SD eiriiccteenstnnnesepeninintiainisaniesininatineantennanavnts 13

Woods v. Interstate Realty Co., 337 U.S. 535 (1949) .......... 14

Wyatt v. Syrian Arab Republic, 800 F.3d 331

(7th Cir. 2015), cert. denied, 136 S. Ct. 1721 (2016)........... 8

Treaty and statutes:

Algiers Accords, Jan. 19, 1981, 20 1.L.M. 224...........ccccccee0e 16

Antiterrorism and Effective Death Penalty Act of

1996, Pub. L. No. 104-132, § 221(a)(1)(C),

Ns SOE seetnientnctiaiieecepengtnemninetseipinisinaisesenmeesieceiseceinanie 3

Foreign Sovereign Immunities Act of 1976,

Bes STII setisscassinsiunstiaipivnspchantiapinicsssniiasiinabivassiete 1

ee I bacdniiciiciss sincornnsinnainteenintinpoiimcdainsebeitionninpests 2

ee PE chtenisentcnicicarinsnseniserisiniicianeteniinmabaninias 21

rs I cierrpiasstnibschniasecainciteiserdiccenveuiasciuicleninds 21

BD EEE. SoD i cccrersincvesnssesiesnceresesestensnenseenpenten 3

Bis TTD scesiinnusbiniicrcnsintcunententdiiniciisenata 2, 3, 12, 13

Bee actrcisintnosacictoiniidassntanvetiiivesnbsesveneenuitini passim

Be, ee iceasacinistsesictcins:shsnsiiicntisienbcniiniabinientsstesicinteainabaiasiedie 2

Ba ey Re iaisieriisninscencnnsbiasvsensentiasenintoivacidluninian passim

eee Ne viertiitessttisinecniimactissaninnapinnvaias 2, 7, 9, 18, 19

as CED cctninierscntnnciiscsisumtintsideatannnioiastensotoons 2,3, 12

eS ececsiniciinicincsininnscsacenetanerssninnenicansstnicbieatniaghian 2

FO es ID cxcsnes cxrpsies ssscigonanscimncipesnpenecedatindninieien 2,3

As, SEE ccsiiginccstniensisvnacessranintingnincenectnidiamiinsenionion 5

ee Cie TUE ED resssssinvliancniinsscnbeineneniatcsiinatitnentinpsiniiieoesinvicna 5

Vi

Statutes—Continued: Page

gt Peas. eee 5, 12

STFC; HE ecenesenwcseesncncscocsserssscsenseencecesmetmnncsoeanvonse 5

A, Fi ivtesrernsescnccsnscccencsvnsnstnesressinntansenecnet passim

BB UBC. BRB) ccecccscceseveesesvencccvsesseccvevevnsscscssnesasonss 4, 10

Se ETE, BED vecesctscscevecszecennssveseniocessncesessanines-cse vessosseosasesins 2

International Emergency Economic Powers Act,

BD UBL, FB HIT cccccccccnsnsnscscesecssscivercecepnsnccnnssvenecssssseonsssoeee 6

Iran Threat Reduction and Syria Human Rights Act

of 2012, Pub. L. No. 112-158, § 502(e)(1)(A),

BE BEE, TI scsccccheonsctcdnnscencuamianhnentandsinenetnensehenseerevenscnenesceee 13

National Defense Authorization Act for Fiscal Year

2008, Pub. L. No. 110-181, 122 Stat. 3:

§ 1083(a)(1), 122 Stat. BBS ............crrerrecrcerereneeeresssseesenrens 3

§ 1083(b)(1), 122 Stat. B89 .......ccccccccrereeeseecceetseesnenensannnan 3

§ 1083(b)(3)(A), 122 Stat. B41... ccc nceceeceeeeeeennnnene 12, 13

§ 1083(b)(3)(D), 122 Stat. B41 0... ceees eine 3, 12

§ 1083(c)(2), 122 Stat. B42-B43 ........ccccceeeeseeserensereenenensenees 3

Terrorism Risk Insurance Act of 2002,

Pub. L. No. 107-297, 116 Stat. 2322:

§ 201(a), 116 Stat. 2337 (28 U.S.C. 1610 note)........ 5, 7, 14

© BONE), 116 Beat. BBD occecrccceeceecescescssosccsecscccsssscocese 6, 16

Fe i Be eoteecictcsscnsrenevscesnnevintensenssnnnenconins 6

Trading with the Enemy Act, 50 U.S.C. 4801 et seq. ........++. 6

Miscellaneous:

63 Fed. Reg. 59,201 (Oct. 21, 1998) ........cssesessereeerserenreeeesenees 5

65 Fed. Reg. 66,483 (Oct. 28, 2000) .....ccevesesecsssvsseseereeeesssseecs 5

Jn the Supreme Court of the CAnited States

No. 16-534

JENNY RUBIN, ET AL., PETITIONERS

Dv.

ISLAMIC REPUBLIC OF IRAN, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

INTEREST OF THE UNITED STATES

This brief is filed in response to the Court’s order in-

viting the Acting Solicitor General to express the views

of the United States. In the view of the United States,

the petition for a writ of certiorari should be granted,

limited to the first question presented by the petition.

STATEMENT

Petitioners are seeking to enforce a money judgment

against respondent Islamic Republic of [ran by attach-

ing artifacts that lran owns and that respondent Uni-

versity of Chicago hossesses. The district court granted

summary judgment to respondents, holding that the

property was immune from attachment and execution

under the Foreign Sovereign Immunities Act of 1976

(FSIA), 28 U.S.C. 1602 et seg. Pet. App. 44. The court

of appeals affirmed. /d. at 1-38.

(1)

2

1. The FSIA provides that, subject to certain inter-

national agreements, the property in the United States

of a foreign state, and its agencies or instrumentalities,

“shall be immune from attachment arrest and execu-

tion,” except as provided in 28 U.S.C. 1610 and 1611.

28 U.S.C. 1609; see 28 U.S.C. 1603(a) (defining “foreign

state”). Section 1611 is not at issue here.

a. Subsections (a) and (b) of Section 1610 create ex-

ceptions for property with a commercial nexus. Subsec-

tion (a) provides that a foreign state’s property “used

for a commercial activity in the United States” is not

immune from attachment if additional criteria are sat-

isfied. 28 U.S.C. 1610(a).' Subsection (b) creates an ad-

ditional exception for the property of an agency or in-

strumentality. 28 U.S.C. 1610(b). Unlike property cov-

ered by subsection (a)—which must itself be used in

commercial activity—subsection (b) abrogates attach-

ment immunity for any property “of an agency or in-

strumentality” if the agency or instrumentality is “en-

gaged in commercial activity in the United States” and

additional criteria are satisfied. bid.

Pursuant to the additional criteria in both provisions,

property with the requisite commercial nexus is not im-

mune from attachment if (among other things) the judg-

ment that the plaintiff is seeking to enforce relates to a

claim for which the entity “is not immune under section

1605A or section 1605(a)(7) (as such section was in effect

on January 27, 2008).” 28 U.S.C. 1610(a)(7); see 28 U.S.C.

1610(b)(3) (similar). The referenced provisions are

known as the “terrorism exception” to a foreign sover-

eign’s immunity to suit.

' This brief uses the term “attachment” to refer to attachment,

arrest, and execution.

3

The terrorism exception was originally codified at

28 U.S.C. 1605(a)(7). See Antiterrorism and Effective

Death Penalty Act of 1996, Pub. L. No. 104-132,

§ 221(a)(1)(C), 110 Stat. 1241. Section 1605(a)(7) pro-

vided that designated state sponsors of terrorism would

not be immune from suits seeking money damages for

personal injury or death “caused by an act of torture,

extrajudicial killing, aircraft sabotage, hostage taking,

or the provision of material support” for such acts.

28 U.S.C. 1605(a)(7) (2006). On January 28, 2008, Con-

gress repealed that provision and replaced it with

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

Act for Fiscal Year 2008 (NDAA), Pub. L. No. 110-181,

§ 1083(a)(1) and (b)(1), 122 Stat. 338-341. Among other

things, Section 1605A expressly creates a private right

of action for certain injuries caused by designated state

sponsors of terrorism. 28 U.S.C. 1605A.’

Accordingly, if a party obtains a money judgment un-

der the current or former terrorism exception, that

judgment creditor may be able to enforce the judgment

by attaching property with the requisite commercial

nexus under 28 U.S.C. 1610(a)(7) or (b)(3).

b. When Congress updated the terrorism exception

in 2008, it also added subsection (g) to 28 U.S.C. 1610.

NDAA § 1083(b)(8)(D), 122 Stat. 341-342. Subsection

(g¢) provides:

[TJhe 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, including property that is a separate juridical

? The statute allowed plaintiffs with pending cases under Section

1605(a)(7) to convert their actions, in certain circumstances, to suits

under Section 1605A. NDAA § 1083(c)(2), 122 Stat. 342-343.

4

entity or is an interest held directly or indirectly in a

separate juridical entity, is subject to attachment in

aid of execution, and execution, upon that judgment

as provided in this section, regardless of {five speci-

fied factors].

28 U.S.C. 1610(g)(1) (emphasis added).

The five factors listed in subsection (g)(1) almost

perfectly parallel the factors that some courts have con-

sidered when a party seeks to satisfy a judgment

against a foreign state by attaching property belonging

not to the state itself, but to an agency or instrumental-

ity. In First National City Bank v. Banco Para el

Comercio Exterior de Cuba, 462 U.S. 611 (1983)

(Bancec), this Court recognized a general presumption

that courts should respect the separate legal status of a

state’s agencies and instrumentalities. Jd. at 626-628.

A foreign state’s judgment creditor therefore generally

cannot satisfy that judgment by attaching the property

of an agency or instrumentality. That presumption may

be overcome as appropriate under the totality of the cir-

cumstances, however, if the instrumentality is “so ex-

tensively controlled by its owner that a relationship of

principal and agent is created,” or if recognizing the en-

tity’s separate juridical status would “‘work fraud or in-

justice.” Jd. at 629 (quoting Taylor v. Standard Gas

Co., 306 U.S. 307, 322 (1939)); see id. at 633. Some

courts have identified “Bancec factors” to consider in

making that determination. Pet. App. 23-26; see, e.g.,

Walter Fuller Aircraft Sales, Inc. v. Republic of the

Philippines, 965 F.2d 1375, 1380 n.7 (5th Cir. 1992).

Subsection (g) thus establishes that courts need not en-

gage in a Bancec analysis in enforcement proceedings

in covered terrorism cases. See Pet. App. 26.

5

c. Subsection (f) of Section 1610 creates a mechanism

for attaching property in certain terrorism cases. but

that mechanism has never been operative. 28 U.S.C.

1610(f). Paragraph (f)(1) provides that certain assets

blocked under various sanctions programs are subject

to attachment or execution “of any judgment relating to

a claim for which a foreign state (including any agency

or instrumentality o[f] such state) claiming such prop-

erty is not immune” under the terrorism exception.

28 U.S.C. 1610(f)(1). Paragraph (f)(2) provides that the

State and Treasury Departments “should make every

effort” to assist terrorism judgment creditors in identi-

fying attachable property. 28 U.S.C. 1610(f)(2). Para-

graph (f)(3) provides, however, that the President may

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

national seeurity.” 28 U.S.C. 1610(f)(3). Invoking that

authority, the President waived paragraph (f)(1) beture

it ever went into effect. See 65 Fed. Reg. 66,483 (Oct.

28, 2000); see also 63 Fed. Reg. 59,201 (Oct. 21, 1998)

(superseded waiver of predecessor statute).

2. One additional provision is relevant to under-

standing the context of this case: The Terrorism Risk

Insurance Act of 2002 (TRIA), Pub. L. No. 107-297,

§ 201(a), 116 Stat. 2337 (28 U.S.C. 1610 note), permits

attachment of certain blocked assets in terrorism cases.

It provides that “([njotwithstanding any other provision

of law,” a person who has obtained a judgment against

a “terrorist party” under the terrorism exception may

attach “the blocked assets of that terrorist party (in-

cluding the blocked assets of any agency or instrumen-

tality of that terrorist party)” to the extent of any com-

pensatory damages. /bid. The term “terrorist party”

includes a designated state sponsor of terrorism.

6

§ 201(d)(4), 116 Stat. 2340. TRIA defines “blocked as-

sets” to include assets “seized or frozen by the United

States” under the Trading with the Enemy Act,

50 U.S.C. 4301 et seg., or the International Emergency

Economic Powers Act (IEEPA), 50 U.S.C. 1701-1702.

TRIA § 201(d)(2), 116 Stat. 2338-2339. When applica-

ble, TRIA thus authorizes attachment of the blocked as-

sets of a foreign state or its agencies or instrumentali-

ties, without regard to Bancec and without requiring a

nexus to commercial activity.

3. a. Petitioners hold a $71.5 million judgment

against Iran arising out of Iran’s role in a 1997 terrorist

attack. Pet. App. 1-2. They obtained the judgment un-

der the original version of the terrorism exception, then

converted it to a judgment under Section 1605A. /d.

at 5-6 & n.1. Petitioners registered their judgment in

the Northern District of Illinois and sought to attach

the Persepolis Collection, a collection of ancient Persian

artifacts. Jd. at 2-3.* The collection is owned by Iran

but has been on loan to the University since 1937 for

research, translation, and cataloging. /d. at 4-5, 46.

The district court granted summary judgment to re-

spondents, holding that the collection is immune from

attachment under the FSIA. Pet. App. 43-71. First, the

court held that the commercial-activity exception in

subsection (a) of Section 1610 is inapplicable because it

applies only when the foreign state uses the property

for commercial activity, and there was no indication that

Iran had so used the Persepolis Collection. /d. at 50-57.

* Petitioners also sought to attach other Iranian artifacts in the

University’s possession, as well as artifacts possessed by another

institution, but the Persepolis Collection is the only property still at

issue. See Pet. App. 2-3, 8-10.

7

Second, the court held that subsection (g) does not ap-

ply, because it is not a freestanding immunity exception.

Id. at 57-62. Rather, the court concluded, it permits at-

tachment only “as provided in this section,” and no

other provision in Section 1610 applies. /d. at 61. Third,

the court held that TRIA § 201(a) does not authorize at-

tachment, because the Persepolis Collection is not a

“blocked” asset for purposes of TRIA. Pet. App. 67.

b. The court of appeals affirmed. Pet. App. 1-38.

The court agreed with the district court (and with the

United States as amicus curiae) that Section 1610(a)

does not apply because it reaches only property used in

commercial activity by the foreign state itself, not by a

third party. The court explained that subsection (a) is

ambiguous because it uses the passive voice (property

“nsed for commercial activity”). Jd. at 16-17. The court

concluded, however, that the FSIA’s statutory declara-

tion of purpose, particularly when read in light of hack-

ground norms of international law, confirms that the

district court’s interpretation is correct. /d. at 17-21.

The court of appeals also agreed with the district

court (and the United States) that subsection (g) of Sec-

tion 1610 does not provide a basis for attachment of the

artifacts because it is not a freestanding immunity ex-

ception and no other provision of Section 1610 provides

for attachment. Pet. App. 21-35. The court explained

that subsection (g)’s phrase “as provided in this section”

means that an individual must first show that an im-

munity exception elsewhere in Section 1610 applies.

/bid. Otherwise, the court explained, it would be super-

fluous for subsections (a)(7) and (b)(3) of Section 1610

to refer to Section 1605A, because any person with a

Section 1605A judgment could already proceed under

8

subsection (g), without satisfying the additional com-

mercial-activity requirements in subsections (a)(7) and

(b\(3). Jd. at 27-28.

The court of appeals recognized that the Ninth Cir-

cuit had reached the opposite conclusion in Bennett v.

Islamic Republic of Iran, 825 F.3d 949 (9th Cir. 2016),

petition for cert. pending, No. 16-334 (filed Sept. 12,

2016). Pet. App. 34. But the court found Bennett un-

persuasive. See ibid. (“[WJe disagree with the Ninth

Circuit’s interpretation of subsection (g).”).

The court of appeals noted that the Ninth Circuit had

relied on statements in two earlier Seventh Circuit de-

cisions, Wyatt v. Syrian Arab Republic, 800 F.3d 331,

342-343 (2015), cert. denied, 136 S. Ct. 1721 (2016), and

Gates v. Syrian Arab Republic, 755 F.3d 568, 576

(2014). See Pet. App. 34. The court explained that those

statements were merely dicta. /d. at 31. The court

nonetheless overruled Gates and Wyatt to the extent

they could “be read as holding that § 1610(g) is a free-

standing exception.” /d. at 34-35. The panel stated that

its decision had been circulated to all Seventh Circuit

judges in active service, that five judges were recused,

and that a majority had not voted to rehear the case en

banc. /d. at35 n.6. Judge Hamilton (the author of

Gates and Wyatt) filed a dissent from denial of rehear-

ing en ba..c. Jd. at 39-42. In his view, Section 1610(g) is

ambiguous, and he would have resolved that ambiguity

by favoring victims of terrorism. /bid.

Finally, the court of appeals held that petitioners

could not attach the Persepolis Collection under TRIA

because it was not “blocked.” Pet. App. 35-38. Petition-

ers do not seek review of that determination.

9

DISCUSSION

The petition for a writ of certiorari should be

granted, limited to the first question presented. As the

court of appeals acknowledged, its interpretation of

Section 1610(g) is contrary to Bennett v. Islamic Re-

public of Iran, 825 F.3d 949 (9th Cir. 2016), petition for

cert. pending, No. 16-334 (filed Sept. 12, 2016), which

found Section 1610(g) to be a freestanding exception to

attachment immunity under the FSIA. The Ninth Cir-

cuit’s decision in Bennett is wrong, for essentially the

reasons stated in the Seventh Circuit’s decision below,

and the proper resolution of this question is important.

Although the United States sympathizes with petition-

ers and other victims of terrorism, the seizure of a for-

eign sovereign’s property via attachment or execution

can affect the United States’ foreign relations. The

United States therefore has a strong interest in the

proper interpretation and application of the FSIA’s

rules governing judicial seizure of foreign state prop-

erty in the United States.

This case is a better vehicle than Bennett for answer-

ing the subsection (g) question. This case arises on an

appeal from a final judgment, whereas Bennett is an in-

terlocutory order. And particularly if the Court grants

review solely on the first question presented in this

case, as the United States recommends, the attachment

here would stand or fall on the interpretation of subsec-

tion (g). By contrast, Bennett includes several compli-

cating factors, and the proper interpretation of subsec-

tion (g) may ultimately be immaterial.

Review is not warranted on the second question pre-

sented. As the court of appeals correctly understood,

Section 1610(a) applies when the foreign state uses the

targeted property in commercial activity, not when a

10

third party does. Every other court of appeals to con-

sider the issue has reached the same result. This would

also be a poor vehicle for addressing that question, be-

cause it is uncertain whether the University has used

the Persepolis Collection in commercial activity.

I. THIS COURT SHOULD GRANT REVIEW TO CONSIDER

WHETHER SECTION 1610(g) CREATES A FREESTAND-

ING EXCEPTION TO ATTACHMENT IMMUNITY

A. The Decision Below Correctly Interprets Section 1610(g)

1. Subsection (g) provides that “the property of a

foreign state” against which a judgment has been en-

tered under Section 1605A, “and the property of an

agency or instrumentality of such a state, including

property that is a separate juridical entity or is an in-

terest held directly or indirectly” in such an entity, “is

subject to attachment in aid of execution, and execution,

upon that judgment as provided in this section, regard-

less of” the Bancec factors discussed above. 28 U.S.C.

1610(g)(1) (emphasis added); Pet. App. 25-26. Subsec-

tion (g) thus sets aside the need for a Bancec inquiry in

certain cases involving the terrorism exception. When

a plaintiff obtains a Section 1605A judgment, the plain-

tiff can attempt to execute against the property of the

foreign state itself or an agency or instrumentality,

without regard to the Bancec factors. That significantly

expands the universe of assets potentially available in

such cases. But by its terms, the plaintiff stil] must pro-

ceed “as provided in this section.” Jbid. That is, the

creditor must also satisfy one of the exceptions to at-

tachment immunity “as provided in” Section 1610. Con-

gress thus did not take the further step of creating a

freestanding exception to attachment immunity that

11

would override the carefully crafted exceptions to im-

munity elsewhere in Section 1610. Pet. App. 26-27.

2. The Ninth Circuit’s alternative view would render

much of the relevant provisions insignificant or super-

fluous.

a. First, subsection (g)’s statement that property

may be attached “as provided in this section” would be

essentially meaningless, because the statute would

function the same way with or without it. The Ninth

Circuit appeared to recognize that the phrase must re-

fer to some other part of Section 1610, and concluded

that it “refer[s] to procedures contained in § 1610(f).”

Bennett, 825 F.3d at 959. But as the court of appeals

explained, “it would be very odd” for Congress to refer

to subsection (f) in that way. Pet. App. 27. Congress

would not be expected to say “this section” when it re-

ally meant “the preceding subsection.” Cf. NLRB v.

SW Gen., Inc., 1387 8S. Ct. 929, 938-939 (2017).

Moreover, even on its own terms, the Ninth Circuit’s

interpretation would not support attachment. Para-

graph (f)(1) could theoretically allow the attachment of

certain blocked assets—but the President exercised his

statutory authority to waive paragraph (f)(1) before it

went into effect. See Pet. App. 33-34. Subsection (f)

thus has been “inoperative from the start,” and “does

not allow any form of execution.” Jd. at 34. Accord-

ingly, if subsection (g) referred solely to subsection (f),

it “would mean no execution at all.” /bid.‘

* The Ninth Circuit noted that paragraph (f)(2) has not been

waived. See Bennett, 825 F.3d at 959-960 & n.5. But that paragraph

does not save the Ninth Circuit’s interpretation, because it does not

provide for attachment (or even create procedures for attachment);

it provides that the State and Treasury Departments “should make

12

b. Second, the Ninth Circuit’s interpretation of sub-

section (g) would render subsection (a)(7) largely irre!-

evant. See Pet. App. 27-28. Subsection (a7) provides

that a foreign state’s property used in commercial ac-

tivity is not immune from attachment if the plaintiff is

enforcing a judgment that “relates to a claim for which

the foreign state is not immune under section 1605A or

section 1605(a)(7) (as such section was in effect on Jan-

uary 27, 2008).” 28 U.S.C. 1610(a)(7) Section 1605A is

the current version of the terrorism exception. See p. 3,

supra. Subsections (a)(7) and (g) thus work together to

enable holders of terrorism-related judgments to pur-

sue property used in commercial activity (via subsection

(a)(7)), and to do so whether that property is owned by

the foreign state or by its agencies or instrumentalities,

without need for a Bancec inquiry (via subsection (g)).

The Ninth Circuit’s interpretation of subsection (g),

however, would make the two provisions work at cross-

purposes by enabling Section 1605A creditors to evade

subsection (a)(7)’s key limitation. Subsection (a)7) al-

lows a Section 1605A judgment creditor to pursue prop-

erty only if it is used in commercial activity—but those

same creditors could pursue property without that lim-

itation simply by invoking subsection (g). For those

creditors, subsection (a)(7) and its limitations would be

superfluous.

Even worse, the Ninth Circuit’s interpretation would

have made subsection (a)(7) entirely irrelevant when it

was adopted. The very same statute—the 2008 NDAA

—both amended subsection (a)(7) to refer to Section

1605A and enacted subsection (g). NDAA § 1083(b)(3)(A)

and (D), 122 Stat. 341. And at the time, subsection (a)(7)

every effort” to assist terrorism judgment creditors in identifying

attachable property. 28 U.S.C. 1610(f)(2).

13

referred solely to judgment creditors under Section

1605A. § 1083(b)(3)(A), 122 Stat. 341.° Thus, under the

Ninth Circuit’s interpretation, subsection (g)’s enact-

ment rendered subsection (a)(7) completely pointless

—even though Congress was making substantive

changes to subsection (a)(7) at the very same time.

B. The Decision Below Conflicts With Bennett

1. The court of appeals’ decision here conflicts with

Bennett. In Bennett, the Ninth Circuit held that sub-

section (g) “contains a freestanding provision for at-

taching and executing against assets of a foreign state

or its agencies or instrumentalities.” 825 F.3d at 959.

On that view, persons with a judgment against a foreign

state under Section 1605A need not demonstrate any

nexus between the property of the foreign state (or its

agency or instrumentality) and commercial activity be-

fore proceeding to execution. The court of appeals

reached the opposite result here, while acknowledging

the split in authority. Pet. App. 34 (“[W]e disagree with

the Ninth Circuit’s interpretation of subsection (g).”).

And respondent Iran, owner of the artifacts at issue,

acknowledges the split as well and agrees that the ques-

tion warrants certiorari. [ran Mem. in Response 14-17.°

* Congress only later restored the reference to the prior version

of the terrorism exception, Section 1606(a)(7). See Iran Threat Re-

duction and Syria Human Rights Act of 2012, Pub. L. No. 112-158,

§ 502(e)(1)(A), 126 Stat. 1260.

® Petitioners and Iran contend that the Second Circuit and D.C.

Circuit have also decided the issue. See Pet. 22; Iran Mem. in Re-

sponse 15. In Weinstein v. Islamic Republic of Iran, 831 F.3d 470,

482-484 (2016), the D.C. Circuit treated subsection (g) as a

standalone exception, but without analysis. In Kirschenbaum v. 650

Fifth Ave. & Related Props., 830 F.3d 107, 123 (2016), the Second

Circuit described subsection (g) as a standalone exception, without

14

The University nonetheless asserts (Br. in Opp. 10-

11) that there is no conflict because Bennett’s interpre-

tation of subsection (g) was an “alternative ground for

the holding”; the Ninth Circuit also found the assets in

that case to be attachable under TRIA. An alternative

holding is still binding precedent, however, not dicta.

See Woods v. Interstate Realty Co., 337 U.S. 535, 537

(1949); Operating Eng’rs Pension Trust v. Charles Mi-

nor Equip. Rental, Inc., 766 F.2d 1301, 1304 (9th Cir.

1985). Moreover, Bennett’s Section 1610(g) analysis—

which prompted a dissent solely on that issue, see

825 F.3d at 966-970 (Benson, J., concurring in part and

dissenting in part)—gave the Ninth Circuit’s judgment

a broader scope: It permitted the district court on re-

mand to consider attachment under TRIA and Section

1610(g). TRIA permits creditors to recover only up to

the amount of their compensatory damages, see

§ 201(a), 116 Stat. 2337, and only so long as the relevant

assets remain “blocked,” see Ministry of Defense &

Support for the Armed Forces of the Islamic Republic

of Iran v. Elahi, 556 U.S. 366, 369 (2009). Section

1610(g) contains neither limitation. Accordingly, there

is a direct conflict on this question.’

analysis, but held that the property was not subject to attachment

on other grounds.

” The respondents in Bennett contend (Br. in Opp. at 19-20, Ben-

nett, supra (No. 16-334)) that there is no direct conflict because that

case involved blocked assets, whereas this case dors not, and they

argue that paragraph (g)(2) supports this distinction. The Univer-

sity makes nu such argument here, and in any event the Ninth Cir-

cuit’s bruad holrling forecioses it because there is no suggestion that

its interpretation of the reach of subsection (g) is applicahle only to

blocked assets. See Bennett, 825 F.3d at 959 (“We hold that subsec-

tion (g) contains a freestanding provision for attaching and execut-

15

Unless this Court intervenes, the circuit conflict will

likely persist. The Ninth Circuit denied en banc review

in Bennett, even after soliciting (and receiving) from the

United States an amicus brief arguing that the panel’s

interpretation of Section 1610(g) was wrong. 825 F.3d

at 954. And although the Ninth Circuit denied rehear-

ing en banc before the Seventh Circuit decided this case

and created the circuit conflict, the Seventh Circuit's

analysis was similar to the analysis the parties and the

United States had already presented to the Ninth Cir-

cuit in Bennett. It is therefore unlikely that the Ninth

Circuit would grant en banc review in a future case to

adopt the Seventh Circuit’s position.

The Seventh Circuit also declined to grant en banc

review here. Pet. App. 35 n.6. This case had the unusual

circumstance that a majority of the en banc court was

recused, but only one non-recused judge, Judge Hamil-

ton, registered the view that en banc review was appro-

priate. /bid. It is thus unlikely that the Seventh Circuit

would grant en banc review in a future case to adopt the

Ninth Circuit’s position that the panel squared rejected.

C. The Question Presented Is Important

The meaning of Section 1610(g) is a pure question of

statutory interpretation that has divided the circuits

and that implicates foreign affairs. The Ninth Circuit’s

interpretation of subsection (g) significantly broadens

its scope by denying attachment immunity for property

without any need for a nexus to commercial activity.

Congress has carefully crafted exceptions in the FSIA

ing against assets of a foreign state or its agencies or instrumental-

ities.”). The Ninth Circuit never mentioned paragraph (g)(2). See

id. at 954-966.

16

relating to state sponsors of terrorism, and they should

not be subject to unwarranted judicial expansion.

The interpretation of subsection (g) may have little

practical impact in many cases involving enforcement of

judgments obtained under the terrorism exception, be-

cause such creditors may be able to attach blocked

property under TRIA (as the individual respondents

seek to do in Bennett), without regard to the interpre-

tation of subsection (g). The interpretation of subsec-

tion (g) is critical, however, when the assets at issue do

not meet TRIA’s specialized definition of “blocked prop-

erty.” § 201(d)(2), 116 Stat. 2338. For example, TRIA

would not govern attachment involving judgments

against Sudan, because Sudan’s assets are no longer

blocked for purposes of TRIA, see, e.g., Harrison v. Re-

public of Sudan, No. 13-ev-3127, 2017 WL 946422, at *3

(S.D.N.Y. Feb. 10, 2017), or judgments against [ran

where the creditor seeks to attach assets that (like the

Persepolis Collection) were unblocked by the Algiers

Accords, Jan. 19, 1981, 20 I.L.M. 224. The Ninth Cir-

cuit’s rule would create an exception to immunity for all

such unblocked property, even when it lacks any nexus

to commercial activity.

D. The Court Should Grant This Petition And Hold The

Bennett Petition

This case is a better vehicle than Bennett for this

Court’s plenary review. This case arises from a final

judgment, and if the Court denies review on the second

question presented, as we recommend, see pp. 18-22, in-

fra, petitioners’ ability to attach the Persepolis Collec-

tion will stand or fall on the interpretation of subsection

(g). It is undisputed that the collection is Lran’s prop-

erty, and there would be final determinations that it is

17

not attachable under subsection (a)’s commercial-activ-

ity exception or under TRIA. This case also demon-

strates the impact of attaching assets that the foreign

sovereign has not used in commercial activity and that

are not blocked, and thus are not attachable under sub-

section (a) or TRIA. Petitioners seek to attach what

Iran describes as “irreplaceable artifacts of [its] cul-

tural heritage,” which it loaned to an American univer-

sity for academic study. Lran Mem. in Response 26.

By contrast, Bennett presents several complicating

factors. First, Bennett is interlocutory: The district

court denied a motion to dismiss, but certified the deci-

sion for interlocutory review, and the court of appeals

affirmed. 825 F.3d at 957, 966. Ordinarily, an interloc-

utory posture “itself alone furnishe[s] sufficient ground

for the denial” of a petition. Hamilton-Brown Shoe Co.

v. Wolf Bros. & Co., 240 U.S. 251, 258 (1916); see, e.g.,

Abbott v. Veasey, 137 S. Ct. 612, 613 (2017) (Roberts,

C.J., respecting the denial of certiorari).

Second, in part because of Bennett’s interlocutory

posture, it is unclear whether the interpretation of sub-

section (g) will ultimately make a practical difference to

the attachment at issue in that case. The Ninth Circuit

held that the plaintiffs could attach the assets under

TRIA. 825 F.3d at 957-958. And although the panel’s

interpretation of subsection (g) gives a broader scope to

the judgment, see pp. 14-14, supra, as a practical matter

TRIA will likely resolve the case on remand unless

there is some change in circumstances. For subsection

(g) to have practical importance, the disputed assets

would need to become unblocked during the litigation,

or the Bennett plaintiffs would have to find enough Ira-

nian assets to satisfy their sizable compensatory dam-

age awards (which dwarf the estimated $17.6 million in

18

property at issue in that case) and then seek to satisfy

their punitive damage awards, which may be enforced

under the FSIA but not TRIA."

Third, the Bennett respondents may raise alternate

grounds for affirming the Ninth Circuit’s judgment.

See Br. in Opp. at 22, Bennett, supra (No. 16-334) (ar-

guing that the assets are independently attachable un-

der subsections (a)(7) and (b)(3)); see also Bennett, 825

F.3d at 966-970 (Benson, J., concurring in part and dis-

senting in part) (concluding that the assets would be at-

tachable by virtue of subsection (b)(3)). Those issues

could be a distraction in the briefing and argument, and

could interfere with the Court’s ability to resolve the

question on which the circuits are divided. The appro-

priate course is accordingly for the Court to grant the

petition in this case, and to hold the petition in Bennett

for its decision in this case.

Ii. THIS COURT SHOULD NOT GRANT REVIEW TO

CONSIDER WHETHER A THIRD PARTY’S ACTIVITY

CAN SATISFY THE COMMERCIAL-ACTIVITY REQUIRE-

MENT IN SECTION 1610(a)

This Court should limit its review of this case to the

first question presented because the second question

does not warrant further review. The court of appeals

correctly held that Section 1610(a) does not apply here.

That holding does not conflict with any decision of this

* The compensatory awards were ahout $240 million for the

Heixer plaintiffs, $85 million for the Acost« plaintiffs, $12.5 million

for the Bev xett plaintiffs, and $20 million for the Greewhasaen piain-

tiffs. See Estate of Heiser v. Islanuc Republic of Iran, 659 F. Supp.

2d 20, 23, 31 (D.D.C. 2009); Acosta v. Islamic Republic of Iran,

574 F. Supp. 2d 15, 31 (D.D.C. 2008); Bennett v. Islamie Republic of

Tran, 507 F. Supp. 2d 117, 130 (D.D.C. 2007); Green brnin v. Islamic

Republic of Iran, 451 F. Supp. 2d 90, 105, 108 (D.D.C. 2006).

19

Court or another court of appeals, and in any event this

case would be a poor vehicle for reviewing that question.

A. The court of appeals correctly held that subsec-

tion (a) does not permit attachment of the Persepolis

Collection because [ran has never “used | that property]

for a commercial activity in the United States,”

28 U.S.C. 1610(a), and “foreign states may lose execu-

tion immunity” under subsection (a) “only by virtue of

their own commercial use of their property in the

United States, not a third party’s.” Pet. App. 18.

Subsection (a) applies to “(t]he property in the

United States of a foreign state, * * * used for a com-

mercial activity in the United States.” 28 U.S.C.

1610(a). Because subsection (a) is phrased in the pas-

sive voice—“used for a commercial activity,” ibid.—it is

ambiguous standing alone whether the exception is sat-

isfied only when the foreign state itself uses that prop-

erty in commercial activity, or whether it could also ap-

ply when someone else does. See Pet. App. 16-17. To

resolve that ambiguity, the statute’s words “must be

read in their context and with a view to their place in

the overall statutory scheme.” Roberts v. Sea-Land

Servs., Inc., 566 U.S. 93, 101 (2012) (quoting Davis v.

Michigan Dep't of Treasury, 489 U.S. 803, 809 (1989)).

And as the court of appeals correctly explained, the

statutory context confirms that only the foreign state’s

own commercial activity qualifies.

When enacting the FSIA, Congress codified its

“(flindings and declaration of purpose” in 28 U.S.C.

1602. Section 1602 reflects that Congress sought to con-

form to its understanding of foreign sovereign immun-

ity in international law, under which “states are not im-

mune from the jurisdiction of foreign courts insofar as

their commercial activities are concerned, and their

20

commercial property may be levied upon for the satis-

faction of judgments rendered against them in connec-

tion with their commercial activities.” bid. (emphases

added). Congress’s repeated use of “their” indicates

that Congress intended that foreign sovereigns them-

selves (not third parties) must be engaged in the com-

mercial activities that could abrogate immunity.

This understanding is also consistent with the “re-

strictive theory” of foreign sovereign immunity, which

the FSIA has generally been understood to codify. See

Republic of Austria v. Altmann, 541 U.S. 677, 690-691

(2004). Under that theory, a foreign sovereign enjoys

immunity for its sovereign or public acts, but not with

regard to private acts like commercial activity. The the-

ory is based in part on the idea that “subjecting foreign

governments to the rule of law in their commercial deal-

ings presents a much smaller risk of affronting their

sovereignty than would an attempt to pass on the legal-

ity of their governmental acts.” Alfred Dunhill of Lon-

don, Inc. v. Republic of Cuba, 425 U.S. 682, 703-704

(1976) (opinion on White, J.). But when the only com-

mercial activity is by a third party, nct the foreign gov-

ernment, that logic ceases to hold.

A contrary reading also would conflict with the ordi-

nary rule that the FSIA’s “exceptions to execution im-

munity are narrower than, and independent from, the

exceptions to jurisdictional immunity.” Pet. App. 20;

see Republic of Argentina v. NML Capital, Lid., 134

S. Ct. 2250, 2256 (2014). That is because “[s Jeizing a for-

eign state’s property” is recognized as a more serious

affront to its sovereignty than “taking jurisdiction in a

lawsuit.” Pet. App. 20. Petitioners’ interpretation of

subsection (a), however, would “turn|] this important

principle on its head” because a foreign state cannot

21

lose its immunity to suit based on the commercial activ-

ities of a third party. /bid.; see 28 U.S.C. 1605(a)(2) (al-

lowing suit where, inter alia, the action is “based upon

a commercial activity carried on * * * by the foreign

state,” or certain acts “in connection with a commercial

activity of a foreign state”).

B. The court of appeals’ interpretation of subsection

(a) is consistent with the decisions of every court of ap-

peals to consider the issue. See Aurelius Capital Part-

ners LP v. Republic of Argentina, 584 F.3d 120, 131

(2d Cir. 2009), cert. denied, 559 U.S. 988 (2010); Af-Cap,

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

1091 (9th Cir. 2007); Connecticut Bank of Commerce v.

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

Contrary to petitioners’ suggestion (Pet. 33-35), the

court of appeals’ decision here does not conflict with

Dean v. United States, 556 U.S. 568 (2009), or Cassirer

v. Kingdom of Spain, 616 F.3d 1019 (9th Cir. 2010) (en

bane), cert. denied, 564 U.S. 1037 (2011), because those

cases involved different statutes with different text and

context. Dean held that a sentencing enhancement for

firearms cases where “the firearm is discharged” ap-

plied regardless of whether the defendant intended to

discharge it. 556 U.S. at 571-572. Cassirer interpreted

28 U.S.C. 1605(a)(3), which provides an exception to a

foreign sovereign’s immunity to suit where “rights in

property taken in violation of international law are in

issue” and there is a commercial activity nexus to the

Unite 1 States. /bid. The court concluded that Section

1605(a)(3) can be satisfied in a case against a foreign

sovereign that held the property at the time of suit and

engaged in commercial activities in the United States

related to the property, even if another foreign sover-

eign improperly took the property. Cassirer, 616 F.3d

22

at 1028-1032. Accordingly, neither case decided the

question here.

Furthermore, although both decisions found support

in the statutes’ use of the passive voice, see Dean,

556 U.S. at 571; Cassirer, 616 F.3d at 1028, neither an-

nounced an across-the-board rule that the passive voice

always means that the identity of the actor is irrelevant,

without regard to a particular statute’s context or pur-

pose. Indeed, the Ninth Circuit emphasized in Cassirer

that its interpretation was consistent with the FSIA’s

animating principle of denying states immunity when

they engage in their own commercial activity. 616 F.3d

at 1030. By contrast, petitioners’ interpretation of sub-

section (a) is in tension with that principle.

C. This case also would be a poor vehicle for review-

ing the question. The court of appeals expressed “skep-

ticlism] that academic study” of artifacts by the Univer-

sity would even qualify as “commercial activity,” Pet.

App. 16, and [ran has indicated it believes that no party

has ever used the artifacts in commercial activity, lran

Mem. in Response 25-26. The United States takes no

position on this issue, and the court of appeals did not

address it. But the possibility that subsection (a) may

be inapplicable, regardless of how it is interpreted,

makes this a poor vehicle for this Court to interpret it.

23

CONCLUSION

The petition for a writ of certiorari should be

granted, limited to the first question presented.

Respectfully submitted.

JEFFREY B. WALL

Acting Solicitor General

CHAD A. READLER

Acting Assistant Attorney

General

EDWIN S. KNEEDLER

Deputy Solicitor General

HASHIM M. MOOPPAN

D y Assistant Attorney

ZACHARY D. TRIPP

Assistant to the Solicitor

General

RICHARD C, VISEK SHARON SWINGLE

Acting Legal Adviser BENJAMIN M. SHULTZ

Department of State Attorneys

MAY 2017