Argued February 19, 2014
Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 11-cv-08715 -- Virginia M. Kendall, Judge.
For FRANCIS GATES, Individually and as Administrator of the Estate of OLIN EUGENE " JACK" ARMSTRONG, Pati Hensley, Sara Hensley, Plaintiffs - Appellees (13-2280): John F. Salter, Attorney, Barnes Law Group, LLC, Marietta, GA; Elizabeth D. Sharp, Attorney, Chicago, IL.
For J.P. Morgan Chase Bank, N.A., Plaintiff - Appellee (13-2280): Edward J. Lesniak, Attorney, Burke, Warren, Mackay & Serritella, P.C., Chicago, IL.
For At& T Corporation, Respondent - Appellee (13-2280): Mark William Lewis, Attorney, At& T Services, Chicago, IL.
For Patrick Scott Baker, Jerry Baker, Lois Baker, Stacie Baker, CRAIG BAKER, individually and as personal representative of the Estate of David Baker, Intervenors - Appellants (13-2280): Michael Dockterman, Attorney, Elizabeth A. Peters, Attorney, Edwards Wildman Palmer
LLP, Chicago, IL.
For FRANCIS GATES, Individually and as Administrator of the Estate of OLIN EUGENE " JACK" ARMSTRONG, PATI HENSLEY, SARA HENSLEY, Plaintiffs - Appellees (14-1452): John F. Salter, Attorney, BARNES LAW GROUP, LLC, Marietta, GA; Elizabeth D. Sharp, Attorney, Chicago, IL.
For J.P. MORGAN CHASE BANK, N.A., Plaintiff - Appellee (14-1452): Edward J. Lesniak, Attorney, BURKE, WARREN, MACKAY & SERRITELLA, P.C., Chicago, IL.
For AT& T CORPORATION, Respondent - Appellee (14-1452): Mark William Lewis, Attorney, AT& T SERVICES, Chicago, IL.
For PATRICK SCOTT BAKER, JERRY BAKER, LOIS BAKER, STACIE BAKER, CRAIG BAKER, individually and as personal representative of the Estate of David Baker, Intervenors - Appellants (14-1452): Michael Dockterman, Attorney, Rana H. Janney, Attorney, Teresa A. Sullivan, Attorney, EDWARDS WILDMAN PALMER LLP, Chicago, IL.
Before BAUER, FLAUM, and HAMILTON, Circuit Judges.
State-sponsored terrorism is an exception to the immunity usually available to foreign sovereigns in United States courts. The Foreign Sovereign Immunities Act (FSIA) expressly allows civil claims against foreign governments and their agencies and instrumentalities for acts of state-sponsored
terrorism. See 28 U.S.C. § 1605A. The execution of such judgments against assets found in the United States is governed by 28 U.S.C. § 1610. In these appeals, we interpret § 1610 to resolve a dispute between two groups of victims of terrorism over the priority of their competing claims to the same assets to execute final judgments against the Syrian Arab Republic.
The origins of these appeals lie in terrorist violence sponsored by Syria. The appellants here are the Baker plaintiffs. Their claims stem from the 1985 hijacking of EgyptAir flight 648 by terrorists from Abu Nidal, a group supported by the Syrian government. In a standoff at the airport in Malta, hijackers shot plaintiffs Patrick Scott Baker and Jackie Nink Pflug in the head. Both survived somehow, but with serious injuries and permanent disabilities. Scarlett Marie Rogenkamp was also shot in the head and died. By the time the hijacking was resolved, 58 of the 95 passengers and crew had died. The Baker plaintiffs in these appeals are Mr. Baker, Mrs. Pflug, their family members, and the family of Ms. Rogenkamp.
The appellees are the Gates plaintiffs. They are the mother and sister of Olin Eugene " Jack" Armstrong and the widow and daughter of Jack L. Hensley. Mr. Armstrong and Mr. Hensley were civilian contractors working with the U.S. military in Iraq. They were kidnapped in September 2004 by al-Qaeda in Iraq, which was also sponsored by the Syrian government. Mr. Armstrong and Mr. Hensley were then murdered. The gruesome murders of both men, who were conscious as they were slowly killed, were recorded on video that was made public by the terrorists.
Under the FSIA, both the Baker plaintiffs and the Gates plaintiffs have secured nine-figure judgments against the Syrian Arab Republic. The judgments hold Syria, designated by the United States government as a state sponsor of terrorism, responsible for the brutal acts of terror that gave rise to the plaintiffs' suits. Both groups' judgments against Syria remain unsatisfied, and both have sought to satisfy them in part by attaching Syrian assets in the Northern District of Illinois.
In a series of decisions, the district court in the Northern District of Illinois held that the Gates plaintiffs' liens on assets in Illinois are entitled to priority over those of the Baker plaintiffs. In the two orders we review here, the district court ordered those holding the assets to turn them over to the Gates plaintiffs. The Baker plaintiffs, who were intervenors in the district court, have appealed both final turnover orders. We affirm both orders in favor of the Gates plaintiffs.
We explain in Part I the legal structures and rules for obtaining and enforcing judgments under the FSIA in cases of state-sponsored terrorism. In Part II, we lay out the detailed procedural background for these appeals. In Part III, we hold for two independent reasons that 28 U.S.C. § 1610(c) does not give the Baker plaintiffs priority over the Gates plaintiffs. In Part IV, we address several remaining issues and hold that parallel proceedings brought by the Baker plaintiffs in the Southern District of New York do not provide any basis for disturbing the decisions of the Northern District of Illinois.
I. The FSIA and Civil Remedies for State-Sponsored Terrorism
Congress has chosen civil litigation under the FSIA rather than international diplomacy as the monetary remedy for U.S. victims of state-sponsored acts of terror. These appeals stem from the fact that the FSIA does not provide a mechanism for distributing equitably among different victims any Syrian assets in the United States that are subject to attachment. Instead, victims who finally obtain judgments must then engage in the costly, burdensome, and often fruitless task of searching for available assets.
These victims of terror can then find themselves pitted in a cruel race against each other--a race to attach any available assets to satisfy the judgments. The terms of the race are essentially winner-take-all rather than any equitable sharing among victims of similar losses. Under the FSIA's compensation scheme, a terrorism judgment against Syria can be satisfied only at the expense of other terrorism victims.
Lawsuits against foreign states in United States courts raise special substantive and procedural problems. The central substantive problem such suits must confront is foreign sovereign immunity. The FSIA codifies the general rules with respect to both immunity from suit and immunity from attachment of assets. See 28 U.S.C. § 1604 (immunity from suit), § 1609 (immunity from attachment and execution); Rubin v. Islamic Republic of Iran, 637 F.3d 783, 793-94 (7th Cir. 2011). The FSIA also recognizes several exceptions to these general immunities. See 28 U.S.C. § § 1605-07 (exceptions to foreign state immunity from suit), § § 1610-11 (exceptions to foreign state property's immunity from attachment and execution).
The FSIA adopted a " comprehensive set of legal standards governing claims of immunity in every civil action against a foreign state." Republic of Argentina v. NML Capital, Ltd., No. 12-842, 573 U.S.
__, __, 134 S.Ct. 2250, 189 L.Ed.2d 234, *12 (2014), quoting Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983). The FSIA is therefore the sole basis for jurisdiction over a foreign state in a United States court. Rubin, 637 F.3d at 793-94; In re Islamic Republic of Iran Terrorism Litigation, 659 F.Supp.2d 31, 38-39 (D.D.C. 2009). Any suit against a state sponsor of terrorism and any attachment pursuant to a judgment against a state sponsor of terrorism must fall within the FSIA's statutory exceptions to foreign sovereign immunity.
Among the exceptions, the FSIA allows victims of state-sponsored terrorism to pursue actions against and to attach the property of state sponsors of terrorism. Section 1605A creates an exception to foreign sovereign immunity for suits seeking money damages for personal injury or death resulting from an act of state-sponsored terrorism. Plaintiffs winning judgments against state sponsors of terrorism can then use several FSIA exceptions to the attachment and execution immunity of foreign states' United States property. See 28 U.S.C. § 1610. These provisions make it possible to sue a state sponsor of terrorism in a United States court and to attach assets to satisfy judgments against such foreign states.
Suing foreign states in United States courts also raises procedural issues. In particular, it is difficult to ensure that a foreign state receives notice of a United States proceeding against it and has a meaningful opportunity to participate. The FSIA establishes special service and notice requirements for suits against foreign states, including notice of default judgments obtained against them. See 28 U.S.C. § 1608(e). Section 1610(c) delays attachment and execution to satisfy most judgments against foreign states until a court determines that a reasonable period of time has elapsed following the entry of judgment and (in case of a default judgment) service of the judgment on the foreign state under § 1608(e).
These provisions work together to ensure that foreign states receive sufficient notice of United States legal proceedings instituted against them, as well as an opportunity to participate in those proceedings and an opportunity to respond to a default judgment before attachment ...