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Rubin v. Islamic Republic of Iran

July 26, 2007

JENNY RUBIN, ET AL., PLAINTIFFS,
v.
THE ISLAMIC REPUBLIC OF IRAN, ET AL., DEFENDANTS,
v.
THE UNIVERSITY OF CHICAGO, ET AL. CITATION THIRD PARTY RESPONDENTS.



The opinion of the court was delivered by: Judge Blanche M. Manning

Magistrate Judge Martin C. Ashman

MEMORANDUM AND ORDER

Magistrate Judge Ashman recently granted the plaintiffs' requests for discovery they allegedly needed to adequately respond to a motion for summary judgment. The magistrate judge's order has drawn objections from both defendant Islamic Republic of Iran, as well as the plaintiffs. For the reasons that follow, Iran's objections are overruled, and the plaintiffs' objections are overruled as moot.

BACKGROUND

To review, the plaintiffs obtained a multi-million dollar judgment against Iran for injuries they suffered as a result of a suicide bombing in Israel. See Campuzano v. Islamic Republic of Iran, 281 F. Supp. 2d 258, 274-77 (D.D.C. 2003). Iran has not paid the judgment, so the plaintiffs instituted this suit seeking execution or attachment against Iranian assets in the United States. Among those assets are Persian artifacts currently in the possession of citation respondents the University of Chicago (the Persepolis collection and the Chogha Mish collection) and the Field Museum (the Herzfeld collection).

The plaintiffs contend that the artifacts are subject to attachment under the Terrorism Risk Insurance Act ("TRIA"). See Terrorism Risk Insurance Act, Pub. L. No. 107-297, § 201, 116 Stat. 2,322, 2,337 (codified at 28 U.S.C. § 1610 note). Under the TRIA, assets that are considered "blocked," or frozen, are subject to "execution or attachment in aid of execution" for judgments against terrorist parties. Id. at § 201(a). The Persian artifacts were blocked under Executive Order No. 12,170, signed in response to the Iranian hostage crisis in 1979. See 46 Fed. Reg. 7,923 (Jan. 19, 1981). However, two years later Executive Order 12,281 "unblocked" previously-blocked assets that were "uncontested and non-contingent liabilities and property interests of the Government of Iran." 31 C.F.R. §§ 535.215(a), 535.333(c). An asset is considered contested if "the holder thereof reasonably believes that Iran does not have title or has only partial title." 31 C.F.R. § 535.333(c). Such a belief is reasonable only if based upon "a bona fide opinion, in writing, of an attorney." Id. The plaintiffs contend that ownership of the Persian artifacts may be contested, and sought from the magistrate judge additional discovery on that issue.

Alternatively, the plaintiffs have argued that the artifacts are subject to attachment under the Foreign Sovereign Immunities Act ("FSIA"). See 28 U.S.C. § 1609. Under the FSIA, the property of a foreign state is immune from attachment unless an exception applies. Id. The plaintiffs contend that the "commercial activity" exception applies, under which property loses its immunity if the foreign state used it for a commercial purpose. Id. at § 1610(a). The plaintiffs have identified a variety of letters from the University to Iranian officials, including ones with progress reports on the research performed on the Persian artifacts. According to the plaintiffs, the letters suggest that the University acted as Iran's agent and used the artifacts for a commercial purpose, so the commercial activity exception applies.

Iran filed a motion for partial summary judgment with the magistrate judge seeking a declaration that its property in the United States is exempt from execution. See Fed. R. Civ. P. 56(b). In response, the plaintiffs filed a motion for additional discovery under Federal Rule of Civil Procedure 56(f). Under Rule 56(f), the non-moving party to a motion for summary judgment may ask the court for additional discovery "[s]hould it appear from the affidavits . . . that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition." The court enjoys significant discretion to grant the motion as long as it is supported by an affidavit that describes why the party cannot adequately respond to the motion for summary judgment without additional discovery and what the additional discovery is expected to show. See Deere & Co. v. Ohio Gear, 462 F.3d 701, 706 (7th Cir. 2006).

In support of their Rule 56(f) motion, the plaintiffs identified the following two groups of documents they seek and the anticipated relevance to Iran's motion for partial summary judgment. The first group consists of documents regarding Iran's ownership interest in the Persian artifacts. Specifically, the plaintiffs seek (1) any bona fide opinion the University of Chicago has ever received that Iran has no title or only partial title in the Persepolis collection, (2) pleadings from a proceeding before the Iran-United States Claims Tribunal, in which the plaintiffs believe that Iran's ownership of the Chogha Mish collection has been challenged by the University of Chicago, and (3) pleadings from a proceeding in an English lawsuit in which Iran's ownership of artifacts such as the Herzfield collection is at issue. The plaintiffs argue that these documents are relevant because if Iran's ownership of the artifacts is disputed, then these artifacts were not unblocked by Executive Order 12,281 and are therefore subject to execution or attachment under the TRIA.

The second group consists of correspondence between the University of Chicago and Iran and other related documents that the plaintiffs expect to shed light on whether the University acted as Iran's agent. The plaintiffs contend that the University of Chicago's status as Iran's agent is relevant to the applicability of the "commercial activity" exception under the FSIA. See 28 U.S.C. § 1601 et seq. If the exception applies, the artifacts are not immune under the Act, and therefore subject to attachment or execution.

In addition to written discovery, the plaintiffs have also sought to depose the Islamic Republic of Iran under Federal Rule of Civil Procedure 30(b)(6). Iran has thus far refused, arguing that foreign sovereigns may not be deposed under that Rule.

The magistrate judge's order granted the plaintiffs all of the discovery they sought. In his order, the magistrate judge concluded that the plaintiffs had satisfied the requirements of Rule 56(f) by identifying the specific documents they sought and explaining the documents' relevance. The magistrate judge also concluded that foreign sovereigns like Iran are subject to Rule 30(b)(6), and therefore it must submit to the plaintiffs' deposition notice.

ANALYSIS

Under Federal Rule of Civil Procedure 72(a), at a party's request the district court may review orders entered by a magistrate judge, but does so under the clear error standard. It may overturn the ruling "only if the district court is left with the definite and firm conviction that a mistake has been made." Weeks v. Samsung Heavy Indus. Co., 126 F.3d 926, 943 (7th Cir.1997); see also Anderson v. City of Bessemer, 470 U.S. 564, 573 (1985). Review is deferential, and a magistrate judge's ruling will be set aside or modified only if ...


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