RESPONDENT: Dariush Elahi
LOCATION: Circuit Court, Multnomah County
DOCKET NO.: 07-615
DECIDED BY: Roberts Court (2006-2009)
LOWER COURT: United States Court of Appeals for the Ninth Circuit
CITATION: 556 US (2009)
GRANTED: Jun 23, 2008
ARGUED: Jan 12, 2009
DECIDED: Apr 21, 2009
Carter G. Phillips - argued the cause for the respondent
David J. Bederman - argued the cause for the petitioner
Douglas Hallward-Driemeier - Assistant to the Solicitor General, Department of Justice, for the United States, as amicus curiae
Facts of the case
In 1977, the Iranian Ministry of Defense entered into an agreement with an American defense contractor for the purchase of military equipment to be used by the Iranian Air Force. After the Iranian Revolution of 1979, the American company breached its contract with Iran and sold the equipment elsewhere. Iran requested arbitration before the International Chamber of Commerce (ICC) and received $2.8 million in damages for breach of contract. Iran then reduced the award to a judgment in the U.S. District Court for the Southern District of California.
Dariush Elahi, brought a wrongful death claim against the Iranian government alleging that Iranian agents had assassinated his brother in Paris in 1990. Elahi was awarded over $300 million in damages by the U.S. District Court for the District of Columbia. He attempted to satisfy this judgment in part by attaching the damages Iran had recovered from the previous contract dispute. Iran argued that the previous recovery was immune from attachment. The U.S. District Court for the Southern District of California held that Iran had waived its immunity from attachment by submitting to the jurisdiction of the ICC and the district court in its prior contract dispute.
The U.S. Court of Appeals for the Ninth Circuit agreed with the district court's ruling but on different grounds. The court held that Elahi could attach the Iranian judgment under Section 201(a) of the Terrorism Risk Insurance Act of 2002, which allows creditors such as Elahi to attach "the blocked assets of [a] terrorist party." Eschewing the jurisdiction argument relied on by the district court, the Ninth Circuit characterized Iran as a "terrorist party" and held that the contract judgment was a "blocked asset" subject to attachment.
Does the Terrorism Risk Insurance Act of 2002 allow a judgment creditor in a wrongful death action against the Iranian government to attach damages recovered by Iran in an unrelated contract dispute as the "blocked assets of [a] terrorist party?"
Media for Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v. ElahiAudio Transcription for Oral Argument - January 12, 2009 in Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v. Elahi
Audio Transcription for Opinion Announcement - April 21, 2009 in Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v. Elahi
John G. Roberts, Jr.:
Justice Breyer has the opinion of the Court in two cases this morning.
Stephen G. Breyer:
The first case is Ministry of Defense of Iran against Elahi.
It is about a private lawsuit against the Government of Iran, and it involves a private person, Dariush Elahi who obtained a default judgment for $312 million against the State of Iran based upon Iran's involvement in the death of his brother.
He wants to enforce that judgment in part by attaching an asset that's owned by Iran, namely a $2.8 million judgment that Iran won against the company called Cubic.
Now the private party, Mr. Elahi can overcome what is a normal legal rule that would prevent any attachment of property owned by a foreign government as Iran has only if he can show two things.
He has to show both that our Government has blocked Iran's assets, which makes them available to suit and attachment.
And he also has to show that he didn't waive by a certain action his right to attach the Cubic Judgment.
The Ninth Circuit thought that both of these conditions were met but we think the contrary.
As to the first requirement, namely, that the assets be blocked, we find that the Ninth Circuit was wrong when it said that the Cubic Judgment was blocked at the time the Circuit made the decision and all of the parties agree on that including Elahi.
But it maybe that those assets became reblocked due to recent executive actions and that latter question was not decided really by the court below, it hasn't been fully argued so we won't decide it either.
We turn instead to the waiver question.
Now in 2003, the United States paid Elahi $2.3 million as partial compensation for his claim against Iran.
When he got that money, he signed a paper and he agreed in that paper to relinquish “all rights to attach property that is at issue in claims against the United States before an international tribunal.”
And there, we have to say we think the Cubic Judgment is property that is at issue in one of those tribunals, namely the Iran-U.S. Claims Tribunal that was set up by the Algiers Accords years ago.
United States and Iran do not dispute that the valid -- they think the Cubic Judgment is valid.
But they do dispute whether Iran, if it win some of its other claims there, has to use that Cubic Judgment as a set off against the money the United States would otherwise owe it.
In particular, if anybody has attached the judgment, Iran says it does not have to use the judgment as a set off.
The United States says it does have to use the judgment as a set off.
So this dispute in our view means the judgment is at issue in that forum.
Thus, it is the kind of property that Elahi, when he received the $2.3 million from the Government, promised not to attach and he has to live up to that promise.
We reversed the judgment of the Court of Appeals.
Justice Kennedy has filed an opinion concurring in part and dissenting in part, which Justices Souter and Ginsburg have joined.