"The Law Cited by Plaintiffs Does Not Offer the Remedy They Seek" - Rubin v. Iran

"The court recognizes the tragic circumstances that gave rise to the instant action, but finds that the law cited by plaintiffs does not offer the remedy they seek." With these words, Judge Robert Gettleman ended the Northern District of Illinois case of Jenny Rubin, et al. v. Islamic Republic of Iran, et al. v. The University of Chicago and The Field Museum of Natural History.

The case involves American victims of a Hamas suicide bombing in Jerusalem in 1997. A federal judge in Washington, DC in 2003 awarded the plaintiffs a $71.5 million default judgment against Iran, holding that country to be responsible for the attack. One way the plaintiffs have sought to collect the judgment owed to them is to acquire ancient Iranian artifacts at prominent American Museums, including Chicago's Oriental Institute (OI) and The Field Museum, through attachment. They have been unsuccessful thus far.

Persepolis

OI holds the Persepolis and Chogha Mish Collections, consisting of objects acquired from Iran as part of long-term loans for the purpose of academic study. About 30,000 clay tablets make up the Persepolis Collection, loaned by the National Museum of Iran in 1937. The Chogha Mish Collection is made up of clay seal impressions excavated in the 1960's.

The Herzfeld Collection, meanwhile, consists of 1200 artifacts purchased by The Field Museum in April 1945 for $7300. The Field Museum sold some of the artifacts to OI in 1945, but later took back a portion. The Rubin plaintiffs have contended that Herzfeld objects found in both the Field Museum's and the OI's collections were stolen from Iran after their excavation, which occurred during the early part of the twentieth century. But The Field Museum continues to assert ownership, and Iran has not made any claim to the collection.

Both the museums and Iran have been fighting the plaintiffs' attachment case. They petitioned the Illinois federal district court for summary judgment in August, arguing that there were no issues of material fact and that they were entitled to have the plaintiffs' case dismissed as a matter of law. Judge Gettleman last week agreed.

The court adopted the defendants' position that the Foreign Sovereign Immunities Act (FSIA) cannot be used to award the artifacts to the plaintiffs. The FSIA is the federal law that protects foreign states from lawsuits, and makes foreign sovereign property located in the United States immune from attachment.

The plaintiffs argued that Section 1610 of the FSIA makes a "commercial activity" exception by declaring that “[a] foreign state shall not be immune from the jurisdiction of courts … in which rights in property taken in violation of international law are in issue and that property … is present in the United States in connection with a commercial activity carried on in the United States by the foreign state … [or an] instrumentality of the foreign state ….”  (emphasis added). The museums argued that their collections were not part of any Iranian commercial activity, and that they were not acting as agents for Iran in any type of commercial activity.

Judge Gettleman concluded, "Because Section 1610 of the FSIA requires the commercial activity to be conducted by the sovereign ... the court finds that the [museum] assets are not subject to attachment under Section 1610 of the FSIA."

Even Congress' amendment to the FSIA, known as the National Defense Authorization Act or 1610(g), does not permit the plaintiffs to seize the asset artifacts, the court ruled. The plaintiffs argued that the amendment permitted execution against all terror states’ assets. The court disagreed and held that "if Section 1610(g) provided a separate basis for attachment that allowed the execution against all terror states’ assets, regardless of whether they are blocked assets, certain subsections of Section 1610 would be unnecessary." "The plain language indicates that Section 1610(g) is not a separate basis of attachment," the court added, explaining that the plaintiffs could not find convincingly argue a brand new exception to the sovereign immunity rule. "The court therefore finds that Section 1610(g) does not provide a new basis for plaintiffs to attach the assets of Iran, and does not subject the collections in question to attachment and execution."

Judge Gettleman additionally ruled that the Terrorism Risk Insurance Act (TRIA) does not permit the plaintiffs to seize the artifacts. TRIA allows a plaintiff to attach the "blocked assets" of a "terrorist party" found liable for an act of terrorism. "Blocked assets" are those “seized or frozen by the United States under ... the Trading with the Enemy Act or under ... the International Emergency Economic Powers Act.” The court's order succinctly explained, "Because the [Persepolis and  Chogha Mish Collections] assets in question are not 'blocked' under TRIA, they are not subject to attachment by the plaintiffs under that statute." 

Regarding the Herzfeld objects, Judge Gettleman relied on the First Circuit Court of Appeals decision in the companion Rubin v. Iran case involving attachment of ancient Iranian artifacts from the Museum of Fine Arts, Boston and the Harvard museums. The First Circuit decision relied on information supplied by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC), an agency that interprets administrative regulations applicable to TRIA. Gettleman wrote:

The court finds the reasoning of the First Circuit and the interpretation by OFAC compelling. The language cited by OFAC demonstrates ... that only assets contested by Iran, and not by third parties such as judgment creditors, would remain blocked and therefore subject to attachment. The court therefore holds that Iran itself must contest the ownership of the property in order to render an asset contested, and therefore blocked, under the TRIA. Because Iran has not claimed ownership of the antiquities in the Herzfeld Collection or the OI Collection, those assets are not contested or blocked, and therefore are not subject to attachment under TRIA.

The museums' victory in federal district court certainly will not be the last word. Recall that the case of Jenny Rubin, et al. v. Islamic Republic of Iran was restarted in Illinois in July 2012 after the U.S. Supreme Court declined to hear the Rubin plaintiffs' request to have the nation's highest court review a Seventh Circuit decision that ruled against the plaintiffs. It is expected that the attachment case will continue for several more years.

Photo credit: Mira Pavlakovic

By Rick St. Hilaire Text copyrighted 2010-2014 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Blog url: culturalheritagelawyer.blogspot.com. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com

Chicago Museums Seek Summary Judgment in Rubin v. Iran

The Field Museum of Natural History and the University of Chicago's Oriental Institute filed a motion for summary judgment last week seeking to end a case that has pitted victims of a terrorist attack against two Illinois museums and Iran. The Chicago-based institutions argue that the plaintiffs' wish to take museum "property that Iran neither owns nor has ever claimed." And regarding Persian artifacts owned by Iran but on loan to the museums, the museums say that the plaintiffs cannot take title to these objects in order to satisfy a court judgment. American lawyers representing Iran filed their own motion in agreement.

The museums offer three arguments in their legal memorandum to defend the ancient Persian collections known as the Persepolis Collection, the Chogha Mish Collection, the Herzfeld Collection, and the OI Collection. The lawyers write,

First, even if Plaintiffs could meet their burden to establish Iranian ownership of the collections at issue, those artifacts would irrefutably be immune from attachment under the Foreign Sovereign Immunities Act [FSIA]. To avoid that immunity, the law requires that Plaintiffs prove that Iran itself used these artifacts commercially. Plaintiffs have no such evidence.

The FSIA is a federal law that protects foreign states from lawsuits and makes foreign sovereign property located in the United States immune from attachment and execution. But the law makes an exception, stating that “[a] foreign state shall not be immune from the jurisdiction of courts … in which rights in property taken in violation of international law are in issue and that property … is present in the United States in connection with a commercial activity carried on in the United States by the foreign state … [or an] instrumentality of the foreign state ….”  (italics added). The museums argue that the Persian artifacts were not part of any Iranian commercial activity.

Second, the museums assert that the Terrorism Risk and Insurance Act (TRIA) cannot be used to take the artifacts. And another court, in fact, has already ruled on this issue, barring any reargument in Illinois. The attorneys write,

...Plaintiffs invoke the Terrorism Risk and Insurance Act (“TRIA”), which allows seizure of a terrorist party’s “blocked” assets. But the First Circuit recently rejected this very same argument made by these very same Plaintiffs in attachment proceedings against two Boston-area museums. Rubin v. Islamic Republic of Iran, 709 F.3d 49, 57-58 (1st Cir. 2013). That ruling is not only correct, it is also binding on Plaintiffs as a matter of collateral estoppel. The requisite “contest” under TRIA may not be created by judgment creditors purporting to stand in a foreign sovereign’s shoes.

Finally, the museums object to the plaintiffs' claim that they can attach the museums' property because Iran--and not the museums--own the artifacts. "The only basis for this claim is Plaintiffs’ speculation that the objects in the Museum Collections may have been unlawfully removed from Iran after 1930 and subsequently conveyed to the Field  Museum or the Oriental Institute," the lawyers say, adding "But Iran has never made a claim to the Museums’ property and, despite eight years of discovery, Plaintiffs have failed to adduce any evidence that Iran owns a single object in the Museum Collections." The Attorneys contend,

...although the Court need not reach the issue given the legal barriers that the FSIA and TRIA erect to Plaintiffs’ claims, these artifacts are owned by the Museums. Plaintiffs’ theory of Iranian ownership depends on an interpretation of a 1930 Iranian export law that is without merit. Indeed, several courts have rejected Plaintiffs’ theory and none, so far as we are aware, has accepted it. Moreover, the statute of limitations and the good faith purchaser rule are additional barriers to any claim of Iranian ownership. Ultimately, Plaintiffs simply cannot meet their legal burden to establish that the Museums hold property that is subject to attachment, or indeed, that belongs to Iran at all. Summary judgment should be entered in favor of the Museums...."

Iran similarly makes three arguments, based on the FSIA and TRIA statutes. The lawyers write in their legal memorandum,

The Fortification Texts [of the Persepolis Collection] and Chogha Mish objects are property of a foreign sovereign and therefore immune from attachment and execution. The FSIA’s commercial activities exception, 28 U.S.C. § 1610(a)(7), does not apply; Iran has never used the artifacts for a commercial purpose in the United States. While Plaintiffs urge that the Institute’s activities are attributable to Iran under an “agency” theory, it is implausible that the Institute is Iran’s “agent.” Iran merely lent the artifacts to the Institute for study, and Plaintiffs raise no material issue of fact for their agency theory. In any event, the Institute’s activities are academic, not commercial.

The lawyers further declare that "[t]he Fortification Texts and the Chogha Mish objects are not subject to execution under the TRIA ... because they are not 'blocked assets.'" By way of background, "blocked assets" are properties that have been seized or frozen by the U.S. government. The TRIA allows seizure of blocked assets to satisfy court judgments “in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under [the FSIA] ….” Iranian “blocked assets” as defined by the Iranian Assets Control Regulations are uncontested assets, meaning that there is no dispute about whether Iran holds title. With this in mind, lawyers for Iran submit in their legal memorandum that "[a]lthough Plaintiffs have urged that the artifacts are 'blocked' because their ownership is 'contested,' no contest exists. The Institute has never asserted title or ownership; it has always agreed that those artifacts belong to Iran. The United States agrees that the assets are not 'blocked.'"

Finally, Iran's attorneys offer the technical argument that the Rubin plaintiffs cannot use an exception under the FSIA law to acquire the artifacts, specifically § 1610(g). They write, "To the extent Plaintiffs assert that the Fortification Texts and the Chogha Mish objects are subject to attachment under § 1610(g) of the FSIA, they are mistaken. Plaintiffs cannot invoke § 1610(g) because they did not raise it before the Seventh Circuit."  The lawyers add,

That provision, moreover, at most subjects property of entities that are legally distinct from the sovereign (such as agencies and instrumentalities) to execution to satisfy a judgment against the sovereign—if that property otherwise lacks immunity because it falls within one of § 1610’s express exceptions. Consequently, §1610(g) is inapplicable. And § 1610(g) applies only to judgments entered under § 1605A. Plaintiffs’ judgment was entered under § 1605(a)(7), and retroactive conversion of Plaintiffs’ judgment would violate separation of powers.

The case of Jenny Rubin, et al. v. Islamic Republic of Iran v. The Oriental Institute et al. began in the Illinois federal district court in 2003 after Rubin and the other plaintiffs won a $71.5 million default court judgment against Iran for that country's role in supporting a 1997 terror attack launched by Hamas. To get Iran to satisfy its judgment, the plaintiffs sued the Field Museum and the Oriental Institute for the ancient Iranian artifacts.

The litigation traveled from the Northern District of Illinois to the Seventh Circuit Court of Appeals, and was later sent back to the district court. But the Rubin plaintiffs sought review along the way by the U.S. Supreme Court. The nation's high court returned the case to the district court last year after declining to hear the Rubin plaintiffs' request to critique the Seventh Circuit's appellate decision.

UPDATE: The plaintiffs in the litigation filed responses to the museums' motion for summary judgment in November and December 2013.

Photo credit: sumeja

This post is researched, written, and published on the blog Cultural Heritage Lawyer Rick St. Hilaire at culturalheritagelawyer.blogspot.com. Text copyrighted 2010-2013 by Ricardo A. St. Hilaire, Attorney & Counselor at Law, PLLC. Any unauthorized reproduction or retransmission of this post is prohibited. CONTACT INFORMATION: www.culturalheritagelawyer.com