OPINION OF THE COURT
MINISTRY OF DEFENSE AND SUPPORT FOR ARMEDFORCES OF ISLAMIC REPUBLIC
OF IRAN V. ELAHI
556 U. S. ____ (2009)
SUPREME COURT OF THE UNITED STATES
NO. 07-615
MINISTRY OF DEFENSE AND SUPPORT FOR THE ARMED
FORCES OF THE ISLAMIC REPUBLIC OF IRAN, PETITIONER
v.
DARIUSH ELAHI
on writ of certiorari to the united states court of
appeals for the ninth circuit
[April 21, 2009]
Justice Breyer delivered the
opinion of the Court.
Dariush Elahi, the respondent,
sued Iran, claiming that Iran unlawfully participated in the
assassination of his brother, and he obtained a default judgment of
about $312 million. Seeking to collect some of the money, he has
tried to attach an asset belonging to Iran, namely a $2.8 million
judgment that Iran obtained against a California company called
Cubic Defense Systems, Inc. (Cubic Judgment). Iran has asserted a
defense of sovereign immunity in order to prevent the attachment.
See Foreign Sovereign Immunities Act of 1976, 28 U. S. C.
§1610.
Since Iran is a sovereign nation, Elahi cannot
attach the Cubic Judgment unless he finds an exception to the
principle of sovereign immunity that would allow him to do so. See
Ministry of Defense and Support for Armed Forces of Islamic
Republic of Iran v.
Elahi,
546 U. S. 450 (2006)
(per curiam). As the case reaches us, the Terrorism Risk
Insurance Act of 2002 (TRIA), §201(a), 116 Stat. 2337, note
following 28 U. S. C. §1610, provides the sole possible
exception. That Act authorizes holders of terrorism-related
judgments against Iran, such as Elahi, to attach Iranian assets
that the United States has
“blocked.”
Ibid.
(emphasis added). And we initially decide whether Iran’s Cubic
Judgment is a “blocked asset” within the terms of that Act.
Even if the Cubic Judgment is a blocked asset,
however, Elahi still cannot attach it if he waived his right to do
so. And we next decide whether Elahi waived that right when, in
return for partial compensation from the Government, he agreed not
to attach “
property that is at issue in claims against the
United States before an international tribunal.” Victims of
Trafficking and Violence Protection Act of 2000 (VPA),
§2002(d)(5)(B), as added by TRIA §201(c)(4), 116 Stat. 2339, note
following 28 U. S. C. §1610 (emphasis added).
We ultimately hold that the Cubic Judgment was
not a “blocked asset” at the time the Court of Appeals handed down
its decision in this case. We recognize that since that time new
Executive Branch action may have “blocked” that asset; but, in
light of the posture of the case, we do not decide whether it has
done so. Rather, we determine that Elahi cannot attach the Cubic
Judgment regardless, for the Judgment is “at issue” in a claim
against the United States before the Iran-U. S. Claims Tribunal.
The Judgment consequently falls within the terms of Elahi’s
waiver.
I
We initially set forth key
background elements, including in this section the events necessary
to understand the “blocked asset” question, while leaving for Part
III,
infra, additional background matters related to
Elahi’s waiver.
A
The Cubic Judgment arose out of a
1977 contract between Cubic Defense Systems, a California company
and Iran’s Ministry of Defense. (We shall refer to the Ministry,
for present purposes an inseparable part of the Iranian State, as
“Iran.” See
Ministry of Defense and Support for Armed Forces of
Islamic Republic of Iran v.
Cubic Defense Systems,
Inc., 495 F. 3d 1024, 1035–1036 (CA9 2007)). Cubic there
promised to supply Iran with certain military goods, namely an air
combat training system, for which Iran promised to pay
approximately $18 million dollars. In 1979, after Iran had paid
some of the money but before Cubic had sent the training system,
the Iranian Revolution broke out, militants in Iran seized American
hostages, and President Carter “
blocked all property and
interests in property of the Government of Iran … subject to the
jurisdiction of the United States.” Exec. Order No. 12170, 3 CFR
457 (1979 Comp.) (emphasis added), promulgated pursuant to the
authority of International Emergency Economic Powers Act (IEEPA),
50 U. S. C. §§1701–1702 (2000 ed. and Supp. V); 31 CFR
§535.201 (1980).
About a year later, on January
19, 1981, Iran and the United States settled the crisis, in part
with an agreement called the “Algiers Accords.” 20 I. L. M. 224.
Under the Accords, the United States agreed to “restore the
financial position of Iran, in so far as possible, to that which
existed prior to November 14, 1979,”
ibid., and (with some
exceptions) to “arrange, subject to the provisions of U. S. law
applicable prior to November 14, 1979, for the transfer to Iran of
all Iranian properties,”
id., at 227. The President then
lifted the legal prohibitions against transactions involving
Iranian property. See Exec. Orders Nos. 12277–12282, 3 CFR 105–113
(1981 Comp.); 31 CFR §§535.211–535.215 (1981). In doing so, he
ordered the transfer to Iran of Iranian financial assets and most
other Iranian property “as directed … by the Government of Iran,”
Exec. Order No. 12281, 3 CFR 112 (1981 Comp.). Shortly thereafter,
the Treasury Department issued a general license authorizing
“[t]ransactions involving property in which Iran . . . has an
interest” where “[t]he property comes within the jurisdiction of
the United States … after January 19, 1981, or … [t]he interest in
the property . . . arises after January 19, 1981.” 31 CFR
§535.579(a).
The Algiers Accords also set up an
international arbitration tribunal, the Iran-U. S. Claims Tribunal
(or Tribunal), to resolve disputes between the two nations
concerning each other’s performance under the Algiers Accords. The
Tribunal would also resolve disputes concerning contracts and
agreements between the two nations that were outstanding on January
19, 1981. 20 I. L. M., at 230–231. The Tribunal’s jurisdiction
included claims by nationals of one state against the other state,
but it did not include claims by one state against nationals of the
other state.
Id., at 231–232.
B
In January 1982, Iran filed two
Cubic-based claims in the Tribunal. In Case No. B61, Iran claimed
that between 1979 and 1981 the United States had wrongly barred the
transfer of certain military equipment, including the Cubic air
combat training system, to Iran. Iran asked the Tribunal to order
the United States either to issue an export license for the
equipment or to pay Iran damages. App. to Brief for United States
as
Amicus Curiae 22a, 24a, 31a.
In Case No. B66, Iran claimed
that Cubic had breached its contract to deliver the training system
partly because the United States had taken actions contrary to the
Algiers Accords. Again Iran asked the Tribunal to order either the
issuance of an export license for the equipment or the payment of
damages.
Id., at 1a, 2a, 9a–10a. In April 1987 the
Tribunal dismissed this second case (No. B66) on the grounds that
the Iran-Cubic contract imposed no obligations on the United States
and that the Tribunal lacked jurisdiction to consider a suit by a
state (Iran) against a private party (Cubic).
Ministry of Nat.
Defense of Islamic Republic of Iran v.
United States,
14 Iran-U. S. Cl. Trib. Rep. 276, 277–278.
Iran, believing that Cubic had breached its
contract, then went to arbitration before the arbitration tribunal
specified in the Cubic contract, namely the International Court of
Arbitration of the International Chamber of Commerce. Iran asked
that arbitration tribunal to award it restitution and damages.
In May 1997 the arbitrators issued their
decision. The arbitrators found that prior to the Iranian
Revolution, prior to the hostage crisis, and prior to the blocking
of any Iranian assets, (1) Iran and Cubic had themselves agreed
that they would temporarily discontinue (but not terminate) the
contract; and (2) Cubic had agreed to try to sell the training
system to another buyer and to settle accounts with Iran later. The
arbitrators further found that after the crisis (in September 1981)
(3) Cubic successfully sold a modified version of the system to
Canada.
Ministry of Defense and Support for Armed Forces of
Islamic Republic of Iran v.
Cubic Int’l Sales Corp.,
No. 7365/FMC (Int’l Ct. of Arbitration of Int’l Chamber of
Commerce), pp. 32–33, 36–40, 50–51, reprinted in 13 Mealey’s Int’l
Arbitration Report pp. G–4, G–15 to G–18, G–21 (Oct. 1998)
(Arbitration Award). The arbitrators concluded that Cubic had not
lived up to this modified agreement. And, after taking account of
the advance payments that Iran had made to Cubic, the funds that
Cubic had spent, the amount that Canada had paid Cubic, and various
other items, they awarded Iran $2.8 million plus interest.
Id., ¶C.18.3(a), at G–31.
Cubic refused to pay Iran this money. Iran
then sued in the Federal District Court for the Southern District
of California to enforce the arbitration award. The District Court
confirmed the award and entered a final judgment ordering Cubic to
pay $2.8 million plus interest to Iran. That judgment is the Cubic
Judgment.
Ministry of Defense and Support for Armed Forces of
Islamic Republic of Iran v.
Cubic Defense Systems,
Inc., 29 F. Supp. 2d 1168, 1174 (1998) (final judgment
entered Aug. 10, 1999).
C
In February 2000 Elahi brought a
tort action against Iran in the Federal District Court for the
District of Columbia. Elahi claimed that Iranian agents had
murdered his brother. See 28 U. S. C. §1605(a)(7) (2000 ed.)
(lifting sovereign immunity of state sponsors of certain kinds of
terrorism) (subsequently replaced by National Defense Authorization
Act for Fiscal Year 2008, §1083(a)(1), 122 Stat. 338, 28 U.
S. C. A. §1605A); Foreign Operations, Export Financing,
and Related Programs Appropriations Act, 1997, §589, 110 Stat.
3009–172, note following 28 U. S. C. §1605 (providing tort
cause of action). Iran did not answer the complaint. The District
Court found Iran in default, and it awarded Elahi nearly $12
million in compensatory damages and $300 million in punitive
damages.
Elahi v.
Islamic Republic of Iran, 124
F. Supp. 2d 97 (DC 2000).
In 2001 Elahi filed a notice of
lien against Iran’s Cubic Judgment. He thereby sought to satisfy
from the Cubic Judgment a portion of what Iran owed him under his
own default judgment against Iran. Iran opposed the lien. It argued
that the Cubic Judgment, as property of the sovereign state of
Iran, was immune from attachment or execution. The District Court
denied immunity.
Ministry of Defense and Support for Armed
Forces of Islamic Republic of Iran v.
Cubic Defense
Systems, Inc., 236 F. Supp. 2d 1140, 1152 (SD Cal.
2002).
The Court of Appeals affirmed the denial.
Ministry of Defense and Support for Armed Forces of Islamic
Republic of Iran v.
Cubic Defense Systems, Inc., 385
F. 3d 1206 (CA9 2004). The Court of Appeals thought that the
Ministry of Defense of Iran had lost its immunity from attachment
because of a special statutory exception that permits a creditor to
attach the property of an “agency or instrumentality of a foreign
state engaged in commercial activity in the United States”—where
the creditor seeks the property to satisfy a terrorism-related
judgment. 28 U. S. C. §1610(b). See 385 F. 3d, at
1219–1222. But, on review here, we pointed out (in a
per
curiam opinion) that the sovereign immunity exception upon
which the Ninth Circuit had relied—the exception for the property
of an entity that has “engaged in commercial activity,”
§1610(b)(2)—applies only to property of an “agency or
instrumentality” of a foreign state. It does not apply to property
of an entity that itself is an inseparable part of the foreign
state. §1610(a).
Elahi, 546 U. S., at 452–453.
We remanded the case, and on remand, the Ninth
Circuit held that the Ministry of Defense fell into the latter
category (an inseparable part of the state of Iran), not the former
(an “agency or instrumentality” of Iran). 495 F. 3d 1024,
1035–1036 (2007). Hence Elahi could not take advantage of the
“engaged in commercial activities” exception. The Court of Appeals
also found inapplicable a slightly different exception applicable
to “property … of a foreign state … used for a commercial activity
in the United States,” 28 U. S. C. §1610(a). 495 F. 3d,
at 1036–1037.
Nonetheless the Court of Appeals found yet
another exception that it believed denied Iran its sovereign
immunity defense. The court pointed out that in 2002 Congress had
enacted the TRIA. That Act permitted a person with a
terrorism-related judgment to attach an asset of the responsible
“terrorist” state to satisfy the judgment, “[n]otwithstanding any
other provision of law,” provided that the asset was a “blocked
asset.” §201(a), 116 Stat. 2337. The Court of Appeals noted that
the Cubic Judgment arose out of a pre-1981 contract with Iran
involving an air combat training system for Iran, and that
President Carter had blocked virtually all Iranian assets following
the Iranian hostage crisis. See Exec. Order No. 12170, 44 Fed. Reg.
65729 (“block[ing] all property and interests in property of the
Government of Iran … subject to the jurisdiction of the United
States”), promulgated pursuant to the authority of International
Emergency Economic Powers Act, 50 U. S. C. §§1701–1702 (2000
ed. and Supp. V); 31 CFR §535.201. The Court of Appeals then held
that the President had never unblocked the asset in question. 495
F. 3d, at 1033. In its view, the many unblocking orders that
were issued after the 1981 Algiers Accords, see,
e.g.,
Exec. Orders Nos. 12277–12282, 3 CFR 105–113; 31 CFR
§§535.211–535.215, 535.579(a), did not apply because those
unblocking orders omitted “military goods such as the [training
system that underlay the Cubic Judgment].” 495 F. 3d, at
1033.
The Court of Appeals also rejected Iran’s
argument that Elahi had waived his right to attach the Cubic
Judgment regardless (a matter to which we shall turn in Part III).
And the court concluded that Elahi was free to attach the Judgment.
Id., at 1037.
Iran, with the support of the Department of
State, asked us to grant certiorari. We did so, and we shall
consider both aspects of the Court of Appeals’ determination.
II
A
We turn first to the question
whether the Cubic Judgment was a “blocked asset.” The Ninth Circuit
held that the asset in question consisted of Iran’s interest in
military goods, namely an air combat training system, which it
believed the Executive Branch had failed to unblock after the
Iranian hostage crisis ended. None of the parties here, however,
supports the Ninth Circuit’s determination. And neither do we.
The basic reason we cannot accept
the Ninth Circuit’s rationale is that we do not believe Cubic’s air
combat training system is the asset here in question. Elahi does
not seek to attach that system. Cubic sent the system itself to
Canada, where, as far as we know, it remains. Rather, Elahi seeks
to attach a judgment enforcing an arbitration award based upon
Cubic’s failure to account to Iran for Iran’s share of the proceeds
of that system’s sale. And neither the Cubic Judgment nor the sale
proceeds that it represents were blocked assets at the time the
Court of Appeals issued its decision.
In 1981, the Treasury Department issued an
order that authorized “[t]ransactions involving property in which
Iran . . . has an interest” where “
[t]he interest in the
property . . .
arises after January 19, 1981.” 31 CFR
§535.579(a)(1) (emphasis added). As the Court of Appeals itself
pointed out, Iran’s interest in the Cubic Judgment arose “on
December 7, 1998, when the district court confirmed the
[arbitration] award.” 385 F. 3d, at 1224. Since it arose more
than 17 years “after January 19, 1981,” the Cubic Judgment falls
within the terms of Treasury’s order. And that fact, in our view,
is sufficient to treat the Judgment as unblocked.
Iran’s interest in the property that underlies
the Cubic Judgment also arose after January 19, 1981. As the
International Court of Arbitration held, Cubic and Iran entered
into their initial contract before 1981. But they later agreed to
discontinue (but not to terminate) the contract. Arbitration Award
G–15, G–21. They agreed that Cubic would try to sell the system
elsewhere.
Id., ¶C.9.15, at G–14. And they further agreed
that they would take “final decisions” about who owed what to whom
“only . . . once the result of Cubic’s attempt to resell the
System” was “known.”
Id., ¶B.10.7, at G–17.
Cubic completed its sale of the system (to
Canada) in October 1982.
Id., ¶B.12.14, at G–22. And the
arbitrators referred to October 1982 as “the date the Parties had
in mind when they agreed to await the outcome of Cubic’s resale
attempts.”
Ibid. Only then was Cubic “in a position to
reasonably, comprehensively and precisely account for the reuse of
components originally manufactured for Iran and for any
modification costs.”
Ibid. For those reasons, and in light
of the arbitrators’ findings, we must conclude that October 1982 is
the time when Iran’s claim to proceeds arose.
The upshot is that, whether we consider Iran’s
“interest in property” as its interest in the Cubic Judgment itself
or its underlying interest in the proceeds of the Canadian sale,
the interest falls within the terms of the Treasury Department’s
general license authorizing “[t]ransactions involving property in
which Iran . . . has an interest” where “[t]he interest in the
property . . . arises after January 19, 1981.” 31 CFR §535.579(a).
And, as we said, that fact is sufficient for present purposes to
treat the asset as having been unblocked at the time the Ninth
Circuit issued the decision below.
Finally, even if we were to assume (as the
Ninth Circuit held) that the relevant asset were Iran’s pre-1981
interest in the air combat training system itself, we should still
conclude that that asset was not “blocked” at the time of the
decision below. As the Government points out, such an interest
falls directly within the scope of Executive Order No. 12281, an
unblocking order that required property owned by Iran to be
transferred “as directed … by the Government of Iran.” See also 31
CFR §535.215(a). None of the four authorities upon which the Ninth
Circuit relied indicates the contrary conclusion. First, the
Circuit cited the Arms Export Control Act, 82 Stat. 1321, 22 U.
S. C. §2751
et seq., and its implementing
regulations, a statute and regulations which regulate arms
shipments. It is true that, notwithstanding Executive Order No.
12281, the export of certain military equipment remained subject to
regulation under other statutes, including the Arms Export Control
Act. See 31 CFR §535.215(c). But that fact does not show that
military equipment remained
blocked under IEEPA. The Court
of Appeals next cited the 1979 Executive Order freezing Iranian
assets, Exec. Order No. 12170, 3 CFR 457 (Comp. 1980)—but it failed
to consider the effect of the subsequent unblocking order just
discussed. The Court of Appeals also relied on a 2005 Presidential
notice extending the national emergency with respect to Iran, 70
Fed. Reg. 69039, but that notice did not impose any additional
restrictions on Iranian assets. Finally, the Court of Appeals
pointed to a Treasury Department guidance document, which states
that “[c]ertain assets”—consisting “mainly of military and dual-use
property”— “related to … claims” by “U. S. nationals … against Iran
or Iranian entities” still being litigated in the Tribunal “remain
blocked in the United States.” Office of Foreign Assets Control,
Dept. of Treasury, Foreign Assets Control Regulations for Exporters
and Importers 23 (2007). But the training system does not fall into
the category of assets identified by the guidance document. The
system neither “remain[s] … in the United States” (having been sent
to Canada), nor was it related to claims by “
U. S.
nationals …
against Iran or Iranian entities” before
the Tribunal. In sum, no authority supports the Ninth Circuit’s
conclusion that an Iranian interest in the training system itself
would be a “blocked asset.” And none of the parties defend the
Ninth Circuit’s conclusion here.
B
Although the Cubic Judgment was
not a blocked asset at the time the Court of Appeals reached its
decision, the Government believes that it is a blocked asset now.
In 2005 the President issued a new Executive Order that blocks
assets held by proliferators of weapons of mass destruction. Exec.
Order No. 13382, 3 CFR 170 (2005 Comp.). And in 2007, after the
Court of Appeals issued its decision, the State Department
designated certain component parts of Iran’s Ministry of Defense as
entities whose property and interests in property are blocked under
Executive Order No. 13382. See 72 Fed. Reg. 71991–71992. If the
Iranian entity to which the Cubic Judgment belongs falls within the
terms of the State Department’s designation, then presumably that
asset is blocked at this time.
The problem for the Government,
however, is that Iran does not agree that the relevant parts of its
Ministry of Defense fall within the scope of the State Department’s
designation. Thus the matter is in dispute. The lower courts have
not considered that dispute. The relevant arguments have not been
set forth in detail here. And in such circumstances we normally
would remand the case, permitting the lower courts to decide the
issue in the first instance. See,
e.g.,
F. Hoffmann–La
Roche Ltd v.
Empagran S. A.,
542 U. S. 155, 175
(2004). Consequently, we shall not decide whether the new Executive
Branch actions have blocked the Cubic Judgment. Instead, we turn to
the “waiver” question. And our answer (that Elahi has waived his
right to attach the Cubic Judgment) makes it unnecessary to remand
the blocking question for further consideration.
III
As we have just said, the second
question concerns Elahi’s waiver of his right to attach the Cubic
Judgment. In 2000, Congress enacted a statute that offers some
compensation to certain individuals, including Elahi, who hold
terrorism-related judgments against Iran. VPA §2002, as amended by
TRIA §201(c). The Act requires those who receive that compensation
to relinquish “
all rights to execute against or attach property
that is at issue in claims against the United States before an
international tribunal, [or] that is the subject of awards
rendered by such tribunal.” §2002(a)(2)(D), 114 Stat. 1542; see
also §2002(d)(5)(B), as added by TRIA §201(c)(4) (cross-referencing
§2002(a)(2)(D)). In 2003 the Government paid Elahi $2.3 million
under the Act as partial compensation for his judgment against
Iran. Brief for Respondent 9. And at that time, Elahi signed a
waiver form that mirrors the statutory language. App. to Pet. for
Cert. 30 (citing 68 Fed. Reg. 8077, 8081 (2003)).
The question is whether the Cubic
Judgment “is at issue in claims” against the United States before
an “international tribunal,” namely the Iran-U. S. Claims Tribunal.
If so, the Cubic Judgment falls within the terms of Elahi’s waiver.
The Court of Appeals believed the Judgment was not “at issue.” 495
F. 3d, at 1030–1031. But we find to the contrary.
A review of the record in Iran-U. S. Claims
Tribunal Case No. B61 leads us to conclude that the Cubic Judgment
is “at issue” before that Tribunal. In Case No. B61 Iran argued
that, between 1979 and 1981, the United States had wrongly
prevented the transfer of Cubic’s air combat training system to
Iran. Iran asked the Tribunal, among other things, to order the
United States to pay damages. Statement of Claim,
Islamic
Republic of Iran v.
United States (filed Jan. 19,
1982), App. to Brief for United States as
Amicus Curiae
22a, 24a, 31a. In its briefing before the Tribunal, Iran
acknowledged that any amount it recovered from Cubic would “be
recuperated from the remedy sought” against the United States. App.
76, n. 2. And Iran sent a letter to the United States in which
it said that any amounts it actually received from Cubic would be
“recouped from the remedy sought against the United States in Case
B61.” App. to Brief for United States as
Amicus Curiae
84a.
But Iran added that the Cubic Judgment could
not be used as a setoff
insofar as it had been
attached by creditors.
Id., at 85a.
Meanwhile, in a rebuttal brief before the
Tribunal, the United States, while arguing that in fact it owed
Iran nothing, added that at the very least Iran must set off the
amount “already … awarded” by the International Court of
Arbitration (namely, the $2.8 million awarded to Iran from Cubic)
against any money awarded by the Tribunal.
Id., at 52a,
80a–81a, and n. 32. And the United States’ demand for a setoff
applies even if third parties have attached the Cubic Judgment. See
Tr. of Tribunal Hearing, in No. B61 (Iran-U. S. Cl. Trib., Dec. 7
and 12, 2006), App. to Brief for Respondent 37, 38–39, 41, 42.
The upshot is a dispute about the Cubic
Judgment. The United States argues (and argued before the Tribunal)
that the Tribunal should set off the $2.8 million that the Cubic
Judgment represents against any award that the Tribunal may make
against the United States in Case No. B61. Iran argues (and argued
before the Tribunal) that the Tribunal should not set off the $2.8
million insofar as third parties have attached the Judgment.
To put the matter in terms of the language of
Elahi’s waiver, one can say for certain that the Cubic Judgment is
“property.” And Case No. B61 itself is a “clai[m] against the
United States before an international tribunal.” We can also be
reasonably certain that how the Tribunal should use that property
is also under dispute or in question in that claim. Moreover, since
several parties other than Elahi have already attached the Cubic
Judgment, see Brief for United States as
Amicus Curiae 20,
the question whether an attached claim can be used as a setoff is
potentially significant, irrespective of Elahi’s own efforts to
attach the judgment.
Are these circumstances sufficient to place
the Cubic Judgment “at issue” in Case No. B61? Elahi argues not. He
points out that the Cubic Judgment does not appear on a list of
property contained in Iran’s statement of claim in Case No. B61;
nor is it the subject of any other claim before the Tribunal.
Indeed, Iran and the United States do not dispute the Cubic
Judgment’s validity; they do not dispute the Cubic Judgment’s
ownership; and they do not dispute the fact that the United States’
asset freeze had no adverse effect on the Cubic Judgment or on
Iran’s entitlement to the Cubic Judgment. As the dissent correctly
points out, the Judgment is not “at issue” in any of these senses.
The Judgment will neither be suspended nor
modified by the Tribunal in Case No. B61, nor is the Judgment
property claimed by Iran from the United States in that case, see
post, at 2–5.
But that does not end the matter. The question
is whether, for purposes of the VPA, a judgment can nevertheless be
“at issue” before the Tribunal
even when it will not be
suspended or modified by the Tribunal and when it is not claimed by
Iran from the United States. Here, a significant dispute about the
Cubic Judgment still remains, namely a dispute about whether it can
be used by the Tribunal as a setoff. And in our view, that dispute
is sufficient to put the Judgment “at issue” in the case.
For one thing, we do not doubt that the setoff
matter is “under dispute” or “in question” in Case No. B61, and
those words typically define the term “at issue.” Black’s Law
Dictionary 136 (8th ed. 2004). In the event that the Tribunal finds
the United States liable in Case No. B61, the total sum awarded to
Iran by the Tribunal will depend on whether the Judgment is used as
a setoff. And whether the Judgment can be so used depends, in turn,
on whether the United States is right that an attached judgment
should be set off or whether Iran is right that it should not be—a
matter in question before the Tribunal. In that sense, the Judgment
is “under dispute.” We recognize that the dispute is over the
use of the Judgment, not the validity of the Judgment. But
we do not see how that fact matters.
For another thing, ordinary legal disputes can
easily encompass questions of setoff. Suppose Smith sues a carrier
for wrongfully harming a shipment of goods. The question of
liability, the question of damages, and the question of reducing
damages through setoff may all be at issue in the case. Which is
the more important issue in a particular case depends not upon the
category (liability, damages, or setoff) but upon the circumstances
of that particular case.
Further, the language of the statute suggests
that Congress meant the words “at issue” to carry the ordinary
meaning just described. Elahi essentially distinguishes between
property that is the subject of a claim (a claim, for example, that
the United States took or harmed particular property belonging to
Iran) and property that might otherwise affect a Tribunal judgment
(say, through its use as a setoff). And he argues that the
statutory phrase “at issue” covers only the first kind of dispute,
not the second. But the statute does not limit the property that is
“
at issue in a claim” to property that is the
subject of a claim. To the contrary, the statute says that
judgment creditors such as Elahi must
“relinquis[h] all rights to execute against or
attach property [1] that is
at issue in
claims against the United States before an international
tribunal
[or] [2] that
is the subject of awards
rendered by such tribunal.” VPA §2002(a)(2)(D), 114 Stat. 1542
(emphasis added); see also §2002(d)(5)(B), as added by TRIA
§201(c)(4) (cross-referencing §2002(a)(2)(D)).
Had Congress wanted to limit the property to which
it first refers (namely, property that is “
at issue” in a
claim) to property that is
the subject of a claim, it
seems likely that Congress straightforwardly would have used the
words “subject of”—words that appear later (in respect to awards
rendered) in the very same sentence.
Finally, the statute’s purpose leans in the
direction of a broader interpretation of the words “at issue” than
that proposed by Elahi. Pointing to the statute’s legislative
history, Elahi says that the statute seeks to enable victims of
terrorism to collect on judgments they have won against terrorist
parties. See Brief of Respondent 6–7, 31 (citing H. R. Conf.
Rep. No. 107–779 (2002); 148 Cong. Rec. 23119, 23121–23123 (2002)
(statement of Sen. Harkin)). He is such a victim, and, he says,
Congress would have intended an interpretation that favors his
cause. But Congress had a more complicated set of purposes in mind.
The statute authorizes the attachment of blocked assets, and it
provides partial compensation to victims to be paid (in part) from
general Treasury funds. But it does so in exchange for a right of
subrogation, VPA §2002(c), and for the victim’s promise not to
pursue the balance of the judgment by attaching property “at issue”
in a claim against the United States before the Tribunal. VPA
§§2002(a)(2)(D), (d)(5)(B), as added by TRIA §201(c)(4). The
statute thereby protects property that the United States might use
to satisfy its potential liability to Iran.
The Cubic Judgment falls into this category.
It is property that the United States could use to satisfy its
potential liability to Iran, but which may be unavailable for that
purpose if successfully attached. With respect to the statute’s
revenue-saving purpose, it is difficult to distinguish between
property that is the subject of a claim before a tribunal and
property that is in dispute before the tribunal in respect to its
use as an offset.
The dissent adds that the “better reading” of
the words “at issue” is one that limits them to the “foster[ing]
[of] compliance with the Government’s international obligations.”
Post, at 6. We agree with this statement, but we do not
see how it adds anything but new phraseology to the dissent’s basic
claim, namely that arguments before the Tribunal about “setoffs” do
not count as “issues.” To repeat our own view of the matter, a
dispute about whether one country must pay the other country more
money because it cannot use particular property (because of an
attachment) to satisfy an obligation raises an issue that the
Tribunal must resolve, no less and no more than other issues that
might be before the Tribunal in that case or other cases.
Contrary to the dissent’s suggestion,
post, at 8, there is no unfairness in our holding. Elahi
could have chosen to forgo the Government’s compensation scheme,
and he then could have attached the Cubic Judgment, as have other
terrorist victims with judgments against Iran. See Brief for United
States as
Amicus Curiae 20. But that course carried risks:
Iran had challenged Elahi’s notice of lien and it was uncertain
whether Elahi would prevail. In 2003, while litigation over his
notice of lien was pending, Elahi chose to participate in the
Government’s scheme. He thereby received the benefit of immediate,
guaranteed partial compensation from the Government—in exchange for
a promise not to interfere with property that the United States
might need to satisfy potential liability to Iran. Having received
$2.3 million in Government funds, there is nothing unfair about
holding Elahi to the terms of his bargain.
Elahi makes several other arguments. He points
to language in the TRIA (the statute authorizing attachment of
blocked assets) which says: “
[n]otwithstanding any other
provision of law” the “blocked assets” of a state “shall be
subject to . . . attachment in aid of execution” of a
terrorism-related judgment. §201(a), 116 Stat. 2337 (emphasis
added). He also points to VPA §2002(d)(4), as added by TRIA
§201(c)(4), 116 Stat. 2339, which reads: “
[N]othing in this
subsection [which contains the relinquishment provision]
shall bar …
enforcement of any” terrorism-related
“judgment . . .
against assets otherwise available under
this section or
under any other provision of law”
(emphasis added). The first provision, Elahi argues, permits him to
attach blocked assets notwithstanding the VPA’s requirement that he
relinquish his right to attach property “at issue” before an
international tribunal; and that conclusion, he says, is reinforced
by VPA §2002(d)(4). Our interpretation, he adds, would “bar …
enforcement” of a terrorism-related judgment “otherwise available”
under TRIA §201(a)—contrary to the statutory language just
quoted.
But VPA §2002(d)(5) requires Elahi, in
exchange for having received partial compensation, to relinquish
“
all rights” to attach property “at issue” in an
international tribunal. VPA §2002(a)(2)(D), 114 Stat. 1542
(cross-referenced by §2002(d)(5)(B); emphasis added). And, as
several courts of appeals have apparently assumed, the
relinquishment of “all rights” includes the right given by TRIA
§201(a) to attach blocked assets. See
Hegna v.
Islamic
Republic of Iran, 376 F. 3d 226, 232 (CA4 2004);
Hegna v.
Islamic Republic of Iran, 380 F. 3d
1000, 1009 (CA7 2004);
Hegna v.
Islamic Republic of
Iran, 402 F. 3d 97, 99 (CA2 2005)
(per
curiam).
Moreover, the relinquishment provision that
applies to Elahi was added to the VPA by the very same statute, the
TRIA, that permitted the attachment of blocked assets, and which
contains the “notwithstanding” clause upon which Elahi relies.
§201(a) (blocked assets); §201(c) (amending VPA). Congress could
not have intended the words to which Elahi refers to narrow so
dramatically an important provision that it inserted in the same
statute. And for those who, like Elahi, argue that the legislative
history supports his reading of the statute, we point out that the
history suggests that Congress placed the “notwithstanding” clause
in §201(a) for totally different reasons, namely to eliminate the
effect of any Presidential waiver issued under 28 U. S. C.
§1610(f) prior to the date of the TRIA’s enactment. H. R.
Conf. Rep. No. 107–779, at 27.
Elahi makes three final arguments, first that
setoff is not “at issue” because the United States has argued in
Case No. B61 that it has no liability at all, second that set-off
is not “at issue” because the United States has not formally
asserted a setoff before the Tribunal, and third that the
Government violated his due process rights by inadequately
informing that his waiver would deprive him of his right to attach
the Cubic Judgment. We find none of these arguments convincing and
shall briefly indicate our reasons in summary form.
As to the first, the United States argued
setoff in the alternative, thereby placing it, in the alternative,
“at issue” before the Tribunal. As to the second, Elahi at most
points to a ground for disputing the propriety, under Tribunal
rules, for granting a setoff; he does not deny that the Tribunal
sometimes can do so, see,
e.g.,
Futura Trading
Inc. v.
National Iranian Oil Co., 13 Iran-U.
S. Cl. Trib. Rep. 99, 115–116, ¶62 (1986) (preventing
collection on a claim because the claimant had already collected
the sum at issue from a different party). Hence whether the
Tribunal can provide for a setoff here is a matter for the Tribunal
to decide, and until it does decide, one way or the other, the
matter is “at issue.” As to the third, we can find nothing that
shows Elahi was unfairly surprised by the scope of his
waiver—certainly not to the point of violating any Due Process
rights. See,
e.g., 14 Iran-U. S. Cl. Trib. Rep., at 278,
¶10 (dismissal of Iran’s claim against Cubic was “without prejudice
to any findings it may make concerning [the Cubic contract] in Case
No. B61”).
IV
We conclude: The Cubic Judgment
was not blocked at the time the Court of Appeals reached its
decision. We do not decide whether more recent Executive Branch
actions would block the Judgment at present. Regardless, Elahi has
waived his right to attach the Judgment. We reverse the judgment of
the Court of Appeals.
It is so ordered.
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