Iranian Terror Case|Argued at 9th Circuit

SAN FRANCISCO (CN) – Attorneys for an Iranian bank told the 9th Circuit on Wednesday that millions of dollars owed to the bank but frozen in the United States should not be used to pay judgments to families of victims of terrorist attacks.
     The hearing concerned four sets of plaintiffs who won judgments against the government of Iran for deaths or injuries from bombings and terror attacks between 1990 and 2002.
     The plaintiffs claim Iranian Bank Melli, a state-owned bank, should pay the judgments using funds frozen in the United States.
     The case was taken to the 9th Circuit in connection with the death of 24-year-old Marla Bennett, an American student killed in a cafeteria bombing at Hebrew University in Jerusalem in 2002. Hamas took credit for the attack.
     Bennett’s family sued Iran in 2002 in District of Columbia Federal Court, claiming that Iran financially supported Hamas, and is liable for the death. A judge awarded the Bennetts $12.9 million.
     The country never paid the judgment, and in 2011 the family sued in San Francisco Federal Court, seeking the money from two U.S. financial institutions – Visa and Franklin Templeton – that owe money to Bank Melli for their involvement in a credit card program.
     That money was frozen by the U.S. government after Iran was designated a terrorist party in 1984.
     Visa and Franklin Templeton argued that they have no claim to the funds, and asked the court to decide whether other parties with claims to the money, including Bank Melli, should have to pay.
     Bank Melli sought unsuccessfully to dismiss the case. In March 2013, it appealed to the 9th Circuit.
     In court Wednesday, Bank Melli’s attorney Robert Kry said the case should have been dismissed because the bank and the government are not the same entities.
     “We are holding one party liable for a different party’s debts,” said Kry, with MoloLamken in Washington D.C.
     Plaintiff’s attorney Curtis Mechling argued that the 2002 Terrorism Risk Insurance Act allows frozen assets to be used to satisfy judgments.
     Mechling is with Stroock & Stroock & Lavan in New York City.
     The underlying case, Bennett v. The Islamic Republic of Iran et al., is on hold, awaiting the 9th Circuit’s ruling.
     Contact Arvin Temkar at sanfran@courthousenews.com