High Court Rules Against Terror Victim’s Brother

(CN) - A man who claims Iran participated in the assassination of his brother cannot collect a $312 million judgment by trying to attach a $2.8 million settlement awarded to the Iranian Ministry of Defense in 1997, the U.S. Supreme Court ruled Tuesday.

The justices revisited a case that came before them in 2006, when they remanded the 9th Circuit's conclusion that Iran's defense agency was not immune from Dariush Elahi's attachment. Elahi sued Iran in federal court in Washington, D.C., over the 1990 killing of his brother, Cyrus, in Paris.

Elahi sought to attach the $2.8 million settlement Iran won against a California company in 1997, over a 1977 contract that would have provided Iran with an air-combat training system.

The federal appeals court in San Francisco had pointed to a provision of the Foreign Sovereign Immunities Act, which states that the property of an "agency or instrumentality" of a foreign government isn't immune from attachment if the agency is "engaged in commercial activity in the United States."

The Supreme Court said the 9th Circuit failed to explain how the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran was an "agency or instrumentality" of the state, rather than an integral part of the state itself.

On remand, the appeals court again sided with Elahi, citing another exemption to sovereign immunity: the Terrorism Risk Insurance Act of 2002 (TRIA). The law allows anyone who wins terrorism-related judgments against Iran to attach "blocked" assets. In the wake of the 1979 Iranian hostage crisis, the United States had blocked Iranian assets.

The 9th Circuit said the judgment Elahi sought to attach remained blocked, despite unblocking orders issued in 1981. The appeals court said these unblocking orders didn't apply to military goods, such as the training system underlying the settlement.

The high court on Tuesday disagreed with the lower court's analysis, ruling that the asset was not blocked at the time, and that Elahi had waived his right to attach the settlement.

When Elahi accepted $2.3 million under the Victims of Trafficking and Violence Protection Act of 2000, he waived his right to attach the 1997 settlement, the justices ruled.

Justices Kennedy, Souter and Ginsburg dissented in part, agreeing with the majority that the asset was not blocked, but arguing that Elahi never relinquished his right to attach the judgment.

"By holding otherwise," Kennedy wrote, "the Court departs from the plain meaning and the purposes of the statutes Congress enacted to compensate Elahi and other victims of terrorism."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit