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"Litigating from Los Angeles to London

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he Foreign Sovereign Immunities Act (“FSIA”) provides for a private right of action against foreign states and their instrumentalities who cause injury or death to U.S. nationals by providing “material support or resources” to Foreign Terrorist Organizations (“FTO”).  28 U.S.C. §1605A(c)(4).   Under the FSIA, even a foreign non-state entity may be found liable if it provides “material support or resources” to a FTO.  28 U.S.C. § 1605A(a), (c).   Other Federal anti-terrorism statutes, such as the Antiterrorism Act of 1990 provide additional remedies.  (18 U.S.C. §§ 2331–2339D (2006) (providing a cause of action for U.S. citizens injured by acts of international terrorism and attorneys’ fees and treble damages).)

Even though tort principles require a party to prove that the consequences of a defendant’s conduct were “reasonably certain (i.e., more likely than not) to occur, and…a reasonable estimate [of damages],”(Salazar v. Islamic Republic of Iran, 370 F. Supp. 2d 105, 115-116 (D.D.C. 2005)), a high proportion of these cases result in default judgments because defendants do not respond to the complaints.  Thus, plaintiffs have been able to obtain multi-million dollar judgments without proving causation and liability.

In Greenbaum v. Islamic Republic of Iran (“Iran”), Civil Action No. 02-2148 (RCL) (D.D.C. 2005), Plaintiffs sued Iran and the Iranian Ministry of Information and Security (“MOIS”) for the “extrajudicial killing” of their family member caused by a suicide bombing in Jerusalem, Israel in 2001.  Plaintiffs alleged that Iran and MOIS were liable for damages resulting from the attack because they provided “material support or resources” to Hamas, a U.S. State Department designated FTO.  Hamas was later determined to be responsible for the attack.  The Defendants never responded to the complaint, as Iran has consistently failed to do so in other lawsuits filed against it.  Plaintiffs obtained a default judgment against the Defendants totaling nearly $20 million.

Thereafter, the Greenbaum Plaintiffs took steps to enforce the default judgment entered against Iran and MOIS by seeking an assignment order to collect payments directly from U.S. oil companies that they believed owed money to Iran.  The court held that the assignment of rights from Iran to the Plaintiffs was warranted under California law, even though no evidence was presented to support that the oil companies were obligors of Iran.  The court reasoned that the determination as to whether oil companies actually owed anything to Iran was reserved for a later stage in the proceedings.

This strategy to enforce these judgments by obtaining assignment orders against U.S. companies doing business with these foreign countries and entities expands the pool of available funds for collection.  It may also put U.S. companies in the uncomfortable position of paying funds to judgment debtors rather than the foreign countries and entities, which undoubtedly can have a significant impact on such business relations.

 For further information, please contact:  Nicholas P. Connon, Managing Partner and Chair of the Middle East Practice Group; Tel:  +1.626.638.1757; e-mail: nconnon@connonwood.com


Copyright © 2014 Connon Wood LLP • www.connonwood.com


Disclaimer: This article is for informational purposes only.

Nothing in this article can or should be regarded as legal advice or a substitute for legal counsel.

U.S. Companies Doing Business With A Foreign State Found Liable For Providing Material Support Or Resources To Foreign Terrorist Organizations May Be Subject To Assignment Orders And Forced To Pay Judgment Debtors Money That Is Owed To The Foreign State