Appeal from the United States District Court for the District of Columbia (No. 02cv00632)
Before: Edwards, Tatel, and Roberts, Circuit Judges.
The opinion of the court was delivered by: Edwards, Circuit Judge
Bills of costs must be filed within 14 days after entry of judgment. The court looks with disfavor upon motions to file bills of costs out of time.
Opinion concurring in part and concurring in the judgment filed by Circuit Judge ROBERTS.
Appellees in this case are 17 American soldiers, joined by their close family members, who were captured and held as prisoners of war by the Iraqi Government while serving in the Gulf War in early 1991. Appellees brought suit in the District Court under the terrorism exception to the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1605(a)(7) (2000), against the Republic of Iraq, the Iraqi Intelligence Service, and Saddam Hussein, in his official capacity as President of Iraq (collectively "Iraq"), seeking compensatory and punitive damages for the horrific acts of torture they suffered during their captivity. After Iraq failed to appear, the District Court examined appellees' evidentiary submissions and entered judgment in their favor. The District Court awarded damages against Iraq totaling over $959 million. See Acree v. Republic of Iraq, 271 F. Supp. 2d 179 (D.D.C. 2003) (" Acree I ").
Two weeks after the District Court entered its judgment for appellees, the United States filed a motion to intervene for the purpose of contesting the District Court's subject matter jurisdiction. The United States argued that recently enacted provisions of the Emergency Wartime Supplemental Appropriations Act, Pub. L. No. 108-11, § 1503, 117 Stat. 559, 579 (2003), made the terrorism exception to the FSIA inapplicable to Iraq and thereby stripped the District Court of its jurisdiction over appellees' lawsuit. The District Court denied the United States' motion to intervene as untimely, see Acree v. Republic of Iraq, 276 F. Supp. 2d 95 (D.D.C. 2003) (" Acree II "), and the United States now appeals.
We hold that the District Court abused its discretion in finding the United States' motion to intervene to be untimely and erred in denying that motion. The United States possesses weighty foreign policy interests that are clearly threatened by the entry of judgment for appellees in this case. Although the United States filed its motion after the District Court had entered its judgment, appellees have asserted no prejudice arising from the intervention. On the merits of the United States' jurisdictional challenge, we hold that the District Court properly exercised jurisdiction in appellees' lawsuit. Although it presents a close question of statutory interpretation, we conclude that the disputed language in the emergency supplemental appropriations act does not encompass the terrorism exception to the FSIA.
We nevertheless conclude that the District Court's judgment in favor of appellees must be vacated and their lawsuit dismissed for failure to state a cause of action. The District Court's judgment against Iraq rests solely on causes of action purportedly arising under the terrorism exception and the Flatow Amendment to the FSIA. Neither appellees' complaint, nor their submissions to this court, nor the District Court's decision in their favor offers any other coherent alternative causes of action in support of appellees' claims against Iraq. Our recent decision in Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004) (" Cicippio "), makes it plain that the terrorism exception to the FSIA is merely a jurisdictional provision and does not provide a cause of action against foreign states. Cicippio also holds that the Flatow Amendment to the FSIA, which provides a cause of action against an "official, employee, or agent of a foreign state," 28 U.S.C. § 1605 note (2000), does not afford a cause of action against a foreign state itself. We are therefore constrained to vacate the judgment of the District Court and dismiss appellees' suit for failure to state a cause of action.
The facts in this case are undisputed. While serving in the Gulf War following the Iraqi invasion of Kuwait, Colonel Clifford Acree and 16 other American soldiers who are appellees in this case were captured and held as prisoners of war in Kuwait and the Republic of Iraq between January and March 1991. On April 4, 2002, these POWs and their close family members filed a complaint in the District Court against the Republic of Iraq, the Iraqi Intelligence Service, and Saddam Hussein, in his official capacity as President of Iraq, for personal injuries caused to them and their family members as a result of their treatment by Iraq. In their complaint, the POW plaintiffs described brutal and inhumane acts of physical and psychological torture suffered during their captivity, including severe beatings, starvation, mock executions, dark and unsanitary living conditions, and other violent and shocking acts. By these alleged atrocities, the plaintiffs' captors created a "climate [of] humiliation and degradation," in which the POWs "liv[ed] in constant fear of death and torture." Compl. ¶ 5, reprinted in Joint Appendix ("J.A.") 35.
Jurisdiction in the plaintiffs' lawsuit was based on the terrorism exception to the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(7). Under the FSIA, foreign states enjoy immunity from suit in American courts, unless that immunity has been waived or abrogated pursuant to an exception enumerated in the FSIA. See 28 U.S.C. § 1604; see also 28 U.S.C. § 1330(a) (limiting the district courts' jurisdiction over suits against foreign states to cases in which the foreign state is not entitled to immunity under the FSIA). Section 1605(a)(7), added to the FSIA in 1996, creates an exception to foreign sovereign immunity in civil suits "in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture" or other terrorist acts. 28 U.S.C. § 1605(a)(7). This exception applies only if the defendant foreign state was designated as a state sponsor of terrorism at the time the alleged acts of torture occurred. See 28 U.S.C. § 1605(a)(7)(A). Pursuant to § 6(j) of the Export Administration Act, 50 U.S.C. App. § 2405(j) (1988 & Supp. I 1989), the Republic of Iraq was designated as a state sponsor of terrorism on September 13, 1990, shortly after the Iraqi invasion of Kuwait and before the events took place that formed the basis of the plaintiffs' claims. See 55 Fed. Reg. 37,793 (Sep. 13, 1990). Iraq was therefore amenable to suit in federal court under the FSIA at the time the plaintiffs commenced their lawsuit.
Citing several decisions of the District Court, the plaintiffs - appellees herein - premised their cause of action on § 1605(a)(7), as amended by the so-called "Flatow Amendment," which was adopted shortly after § 1605(a)(7) was added to the FSIA in 1996. See Compl. ¶ 596, J.A. 143. The Flatow Amendment provides that:
[A]n official, employee, or agent of a foreign state designated as a state sponsor of terrorism ... while acting within the scope of his or her office, employment, or agency shall be liable to a United States national or the national's legal representative for personal injury or death caused by acts of that official, employee, or agent for which the courts of the United States may maintain jurisdiction under [§ 1605(a)(7)] for money damages which may include economic damages, solatium, pain, and suffering, and punitive damages if the acts were among those described in [§ 1605(a)(7)].
28 U.S.C. § 1605 note. Appellees alleged that the acts of torture set forth in their complaint constituted "traditional torts of assault, battery and intentional infliction of emotional distress," Compl. ¶ 597, J.A. 143, and requested compensatory and punitive damages for each of the POW plaintiffs and their family members.
Appellees effected proper service of process through diplomatic channels, pursuant to 28 U.S.C. § 1608. The Iraqi defendants failed to appear, and the Clerk of the District Court accordingly entered default against the defendants on September 25, 2002. On March 31, 2003, appellees submitted evidence to support their assertion of liability and claim for damages. These submissions provided further details regarding the factual basis of appellees' claims and again asserted the existence of a cause of action based on § 1605(a)(7), as amended by the Flatow Amendment, for assault, battery, and intentional infliction of emotional distress. See Pls.' Proposed Findings of Fact and Conclusions of Law at 80-90.
On July 7, 2003, the District Court entered final judgment in favor of appellees. See Acree I, 271 F. Supp. 2d 179. The District Court held that "[s]uits brought under § 1605(a)(7) may be based on conventional common law torts." Id. at 215. Based on extensive findings of fact regarding the specific injuries suffered by each plaintiff, the District Court awarded compensatory and punitive damages to all of the POW plaintiffs and their family members totaling over $959 million. Id. at 224-25.
B. Legal and Military Developments in Iraq
As the proceedings in the District Court were running their course, the legal and military situation in Iraq was changing rapidly. In connection with Iraq's designation as a state sponsor of terrorism in September 1990, Congress had passed various statutes imposing sanctions on Iraq and prohibiting the United States Government and private parties from sending assistance to Iraq or conducting business or trade with Iraq. Most notably, Congress enacted the Iraq Sanctions Act of 1990, which condemned the Iraqi invasion of Kuwait and provided for the maintenance of a trade embargo and economic sanctions against Iraq. See Pub. L. No. 101-513, §§ 586-586J, 104 Stat. 1979, 2047-55 (1990) (codified at 50 U.S.C. § 1701 note (2000)) ("ISA"). These provisions required that all assistance, exports, loans, credits, insurance, or other guarantees be denied to Iraq, with exceptions for limited humanitarian relief. Section 586F(c) of the ISA also required full enforcement against Iraq of § 620A of the Foreign Assistance Act of 1961, which prohibits the grant of any assistance to any country determined by the Secretary of State to have "repeatedly provided support for acts of international terrorism," Pub. L. No. 87-195, § 620A, as added Pub. L. No. 94-329, § 303, 90 Stat. 729, 753 (1976) (codified as amended at 22 U.S.C. § 2371) ("FAA"). Along with the FAA, the ISA required that several other enumerated provisions of law be fully enforced against Iraq, as well as "all other provisions of law that impose sanctions against a country which has repeatedly provided support for acts of international terrorism." ISA § 586F(c), 104 Stat. 1979, 2051.
Both the Iraq Sanctions Act and the Foreign Assistance Act provide for rescission of the prohibitions they impose on aid to Iraq and other designated states, but only after the President certifies to Congress that there has been a fundamental change in the government or policies of the designated state and that the leadership is no longer supporting acts of terrorism. See ISA § 586H, 104 Stat. 1979, 2052-53; FAA, 22 U.S.C. § 2371(c) (2000). A similar certification is required to rescind the Secretary of State's determination under the Export Administration Act that Iraq is a country that has repeatedly provided support for acts of international terrorism. See 50 U.S.C. App. § 2405(j)(4) (2000).
Shortly after the commencement of the most recent military action against Iraq in 2003, which resulted in the ouster of Saddam Hussein's regime, the United States' policy toward Iraq changed to reconstructing Iraq's government and rebuilding the country's infrastructure. In furtherance of these new objectives, Congress took several steps to eliminate restrictions on the ability of the United States Government and private parties to provide assistance to or conduct business with Iraq. In April 2003, Congress enacted the Emergency Wartime Supplemental Appropriations Act ("EWSAA" or "Act"), which appropriated additional funding for military operations in Iraq, homeland security efforts in the United States, and bilateral economic assistance to America's allies in the war in Iraq. See Pub. L. No. 108-11, 117 Stat. 559 (2003). The bulk of the $78.5 billion appropriated in this Act was allocated to national defense activities. In addition, the Act appropriated nearly $2.5 billion for a new Iraq Relief and Reconstruction Fund, to be used for the development of physical and government infrastructure and humanitarian activities in Iraq. See H.R. CONF. REP. No. 108-76, at 70-72 (2003). The Act provided that assistance to Iraq under the Iraq Relief and Reconstruction Fund and other aid programs could be provided "notwithstanding any other provision of law." See EWSAA § 1502, 117 Stat. 559, 578.
Of particular relevance to this appeal, § 1503 of the EWSAA authorized the President to "suspend the application of any provision of the Iraq Sanctions Act of 1990." EWSAA § 1503, 117 Stat. 559, 579. Section 1503 "[p]rovided further, [t]hat the President may make inapplicable with respect to Iraq section 620A of the Foreign Assistance Act of 1961 or any other provision of law that applies to countries that have supported terrorism." Id. The suspension of these provisions would permit American assistance to Iraq to proceed without awaiting completion of the lengthy certification process required to rescind the Secretary of State's previous determination as to Iraq's status as a sponsor of terrorism.
On May 7, 2003, President Bush carried out the authority granted in § 1503 of the EWSAA by issuing Presidential Determination No. 2003-23, which "ma[d]e inapplicable with respect to Iraq section 620A of the Foreign Assistance Act of 1961 ... and any other provision of law that applies to countries that have supported terrorism." Presidential Determination No. 2003-23 of May 7, 2003, 68 Fed. Reg. 26,459 (May 16, 2003). In a message to Congress delivered on May 22, 2003, President Bush explained the need to protect Iraqi assets from attachment, judgment, or other judicial process, and stated his view that the May 7 Determination applied to, inter alia, the terrorism exception to the FSIA, 28 U.S.C. § 1605(a)(7). See Message to the Congress Reporting the Declaration of a National Emergency With Respect to the Development Fund for Iraq, 39 WEEKLY COMP. PRES. DOC. 647, 647-48 (May 22, 2003).
C. The United States' Motion to Intervene
On July 21, 2003, two weeks after the District Court entered judgment for appellees, the United States moved to intervene for the sole purpose of contesting the subject matter jurisdiction of the District Court. This challenge rested on legal developments that had occurred in the wake of the United States' invasion of Iraq in March 2003. The United States argued that § 1605(a)(7) is a "provision of law that applies to countries that have supported terrorism" within the meaning of § 1503 of the EWSAA, as implemented by the May 7 Presidential Determination, and was therefore made inapplicable to Iraq by operation of those provisions. The District Court, the Government argued, was therefore divested of jurisdiction over appellees' lawsuit as of May 7, 2003, two months prior to the entry of judgment against the Iraqi defendants.
On August 6, 2003, the District Court denied the Government's motion to intervene as untimely. See Acree II, 276 F. Supp. 2d at 98-99. The District Court noted that the United States had waited 75 days after the Presidential Determination to file its motion, and the court was particularly reluctant to permit the Government to intervene after appellees' case had proceeded to final judgment. See id. The District Court further held that, even if the United States' motion was not untimely, appellees' lawsuit did not threaten to impair any cognizable interest of the United States and that allowing the Government to intervene at that late stage would cause undue delay and prejudice to the parties. See id. at 99-102. Finally, the District Court considered its own subject matter jurisdiction and concluded that it retained jurisdiction under the FSIA, despite the EWSAA and the Presidential Determination. See id. at 100-01. On August 22, 2003, the United States filed this appeal of the District Court's decision.
Just before the United States moved to intervene, appellees filed a second suit in the District Court against the Secretary of the Treasury, seeking to satisfy their newly won judgment against Iraq by attaching funds from seized Iraqi bank accounts, pursuant to the Terrorism Risk Insurance Act of 2002 ("TRIA"). See Acree v. Snow, 276 F. Supp. 2d 31 (D.D.C. 2003). Section 201(a) of the TRIA provides that a person who has obtained a judgment against a foreign state designated as a state sponsor of terrorism may seek to attach the blocked assets of that state in satisfaction of an award of compensatory damages based on an act of terrorism. See Pub. L. No. 107-297, § 201, 116 Stat. 2322, 2337 (2002) (codified at 28 U.S.C. § 1610 note). Although appellees initially prevailed in obtaining a temporary restraining order, precluding the Secretary of the Treasury from spending down the United States' seized Iraqi assets, the District Court ultimately awarded summary judgment to the United States. See Acree v. Snow, 276 F. Supp. 2d at 33. The District Court held that § 1503 of the EWSAA, as implemented by the May 7 Determination, made the TRIA inapplicable to Iraq and therefore unavailable to appellees as a mechanism for satisfying their judgment. See id. at 32-33.
This court affirmed the decision of the District Court by judgment. See Acree v. Snow, No. 03-5195 (D.C. Cir. Oct. 7, 2003). The court did not address the applicability or effect of the EWSAA and the Presidential Determination, however. Rather, the court adopted the reasoning of the Second Circuit's decision in Smith v. Federal Reserve Bank of New York, 346 F.3d 264 (2d Cir. 2003). In that case, the Second Circuit held that plaintiffs proceeding under the TRIA to attach seized Iraqi assets in satisfaction of a judgment were precluded from doing so because the President had previously confiscated the blocked assets and vested title in them in the United States Department of the Treasury, thereby rendering those funds unsusceptible to execution or attachment. See id. at 272 (discussing Exec. Order No. 13,290 of Mar. 20, 2003, 68 Fed. Reg. 14,307 (Mar. 24, 2003)). The Second Circuit - and by extension this court - therefore did not reach the issue of whether § 1503 or the Presidential Determination made the TRIA inapplicable to Iraq and expressed no views on the scope or validity of those provisions. See id.
In another important development, this court issued its decision in Cicippio, 353 F.3d 1024, three months before oral argument in this case. That case presented the question whether 28 U.S.C. § 1605(a)(7) or the Flatow Amendment, 28 U.S.C. § 1605 note, created a cause of action against a foreign state. Several decisions in the District Court had held or assumed that these provisions did create a cause of action against foreign states. See Cicippio, 353 F.3d at 1032 (citing cases). The court of appeals had not previously affirmed any of these judgments, however, or otherwise squarely confronted the issue. See Roeder v. Islamic Republic of Iran, 333 F.3d 228, 234 n.3 (D.C. Cir. 2003) (noting that it is "far from clear" whether a plaintiff has a cause of action against a foreign state under the FSIA, but resolving the appeal on other grounds); Bettis v. Islamic Republic of Iran, 315 F.3d 325, 333 (D.C. Cir. 2003) (raising but not resolving the question of whether the FSIA creates a cause of action against ...