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Leibovitch v. Islamic Republic of Iran

United States District Court, N.D. Illinois, Eastern Division

February 27, 2018

SHLOMO LEIBOVITCH, et al, Plaintiffs,
ISLAMIC REPUBLIC OF IRAN, et al, Defendants.


          Ruben Castillo, Chief Judge

         In this long-running case, Shlomo Leibovitch and several of his family members ("Plaintiffs") seek to recover for injuries they suffered as a result of an act of terrorism committed with the support of the Islamic Republic of Iran and the Iranian Ministry of Information ("Defendants"). Presently before the Court is Plaintiffs' motion to compel discovery from non-party The Boeing Company ("Boeing"), as well as Boeing's cross-motion to quash Plaintiffs' discovery requests.[1] (R. 232, Pls.' Mot.; R. 245, Boeing's Mot.) For the reasons stated below, Plaintiffs' motion to compel is granted in part and denied in part, and Boeing's cross-motion is denied.


         The facts of this case have been fully set forth in several prior opinions of this Court and the U, S. Court of Appeals for the Seventh Circuit. See Leibovitch v. Islamic Republic of Iran, 852 F.3d 687 (7th Cir. 2017); Leibovitch v. Islamic Republic of Iran, 697 F.3d 561 (7th Cir. 2012); Leibovitch v. Islamic Republic of Iran, 188 F.Supp.3d 734 (N.D. Ill. 2016); Leibovitch v. Syrian Arab Republic, 25 F.Supp.3d 1071 (N.D. Ill. 2014). In brief, the tragic facts underlying the case began in 2003, when the Leibovitch family was driving on a highway in Jerusalem and their mini van "was shot up by members of Palestine Islamic Jihad, a terrorist group supported by the government of Iran." Leibovitch, 852 F.3d at 688-89. Seven-year-old Noam Leibovitch was killed and her three-year-old sister Shira Leibovitch (an American citizen) was permanently injured. Id. The surviving family members, as well as Noam's estate, filed this action for damages against Defendants pursuant to the Antiterrorism Act ("ATA"), 18 U.S.C. § 2333, and the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1605A. Id. at 689. Defendants were served through diplomatic channels in Tehran but never answered or otherwise appeared. Leibovitch, 188 F.Supp.3d at 741, 753. After "protracted proceedings" in both the district and appellate courts, the Court entered a default judgment of $67 million against Defendants. Leibovitch, 852 F.3d at 689.

         Since that time, Plaintiffs have been engaged in the arduous task of trying to collect on their judgment. See Id. at 689-90. To that end, in December 2016 they served Boeing, a corporation headquartered in Chicago, with a citation to discover assets pursuant to Federal Rule of Civil Procedure 69 and 735 Ill. Comp. Stat. 5/2-1402, as well as discovery requests under Rule 45 seeking to identify Iranian assets "which are or may be held by Boeing." (R. 233, Pls.' Mem. at 2.) Specifically, Plaintiffs seek information about a contract-which has been widely reported in the media-between Boeing and the Airline of the Islamic Republic of Iran ("Iran Air"), under which Boeing is to provide Iran Air with 80 commercial airplanes worth approximately $16 billion over a period of years, (See, e.g., R. 234-7, News Article.) This deal was made possible by the Joint Comprehensive Plan of Action ("JCPOA"), commonly referred to as the "Iran Nuclear Deal, " which was brokered in My 2015 among the E3/EU nations[2] and Iran. (R. 245-3, Iran Nuclear Deal at 4.) The goal of the Iran Nuclear Deal was to ensure that Iran's nuclear program is "exclusively peaceful." (Id.) As part of the deal, the United States (through former President Barack Obama) agreed to lift various commercial sanctions against Iran and to "allow for the sale of commercial passenger aircraft and related pails and services to Iran[.]" (Id. at 13.) Consistent with this obligation, in September 2016 the U.S. Office of Foreign Asset Control ("OFAC") licensed Boeing's future sale of commercial airplanes to Iran Air. (R. 245-1, Boeing's Mem. at 7; R. 247-1, Larson Decl. ¶ 12.) Boeing thereafter entered into an agreement with Iran Air, dated December 11, 2016, to sell 80 commercial airplanes to Iran Air. (R. 245-1, Boeing's Mem. at 8; R. 247-1, Larson Decl. ¶¶ 2-3.) This deal was the first major commercial transaction between American and Iranian companies in four decades. (R. 245-1, Boeing's Mem. at 8; R. 247-2, Bentrott Decl. ¶ 6.)

         The present motions stem from Plaintiffs' efforts to learn the details of the airplane deal. Plaintiffs seek "information about assets of the judgment debtors against which they can enforce their judgments, either in the United States or elsewhere." (R. 233, Pls.' Mem. at 4-5.) Their Rule 45 document subpoena contains eight separate document requests. They ask for a copy of the contract itself, as well as all "ancillary documents .. . that would identify [] the parties and their obligations as well as documents concerning the financial institutions involved in the transaction, the financing arrangements, [and the manner of] payment and delivery, " (Id. at 5; see also R. 234-3, Doc. Subpoena.) Plaintiffs further request "all correspondence, notices, written inquiries, letters, or writings of any nature .. . between Boeing, Iran Air and/or the Islamic Republic of Iran, in respect to the Contract and the parties' respective obligations and payments under the Contract." (R. 243-4, Doc. Subpoena ¶ 6.) They also seek production of "[a]ny and all correspondence" between Boeing and OF AC, or any other department or agency of the U.S. government, "relating to assets or property of the Islamic Republic of Iran, including without limitation the Contract." (Id. ¶ 7.) Plaintiffs also served Boeing with a Rule 45 deposition subpoena, requiring Boeing to designate a corporate representative pursuant to Rule 30(b)(6) to testify on a variety of matters, including the details of the contract and the details of any communications between Boeing and Iran Air, or Boeing and the U.S. government, broadly relating to the contract or any asset of Iran. (R. 234-4, Dep. Subpoena ¶¶ 1-7.)

         In response, Boeing has not produced any documents or designated a corporate representative pursuant to Rule 30(b)(6).[3] Instead, Boeing moves to quash the subpoenas and dismiss the citation in its entirety. (R. 245, Boeing's Mot.) In Boeing's view, ordering the requested relief would require the Court to resolve "nonjusticiable political questions" and violate principles of international comity; Boeing believes that granting these discovery requests would cause "significant harm to the goals of the United States and its European allies" and "risk destabilizing the purpose of the JCPOA to provide for regional and international peace and security." (R. 245-1, Boeing's Mem. at 12-13 (internal quotation marks omitted)). Boeing also argues that Plaintiffs' discovery requests "seek irrelevant information and are disproportionate to the needs of the case, " because the contract, as currently drafted, will not result in any Iranian assets being subject to attachment in the United States, (Id. at 16-17.)

         Plaintiffs argue in reply that their discovery requests do not raise any non-justiciable political questions or trigger international comity concerns. (R. 252, Pls.' Reply at 2-6.) In their view, Boeing is essentially asking this Court "to afford Iran and Iran Air, and by extension their business partner Boeing, protections and immunities that are not mentioned in either [the Iran Nuclear Deal] or the [FSIA]." (Id. at 3.) Plaintiffs believe that the Iran Nuclear Deal "did nothing to prohibit the victims of terror from continuing to exercise their rights under the FSIA." (Id. at 5.) In response to Boeing's relevancy and proportionately argument, Plaintiffs argue that Boeing has skewed the inquiry by suggesting that Plaintiffs must demonstrate that they are able to execute on specific assets before they are permitted any discovery related to those assets. (Id. at 8-9.)

         After reviewing the parties' submissions, the Court found it prudent to obtain a statement from the U.S. government as to whether, in its view, "permitting the discovery sought by Plaintiffs will, as Boeing argues, interfere with U.S. foreign policy toward Iran by obstructing a key component of the international nuclear deal." (R. 258, Min, Entry (citation and internal quotation marks omitted).) The government, through the U.S. Department of Justice on behalf of the Executive Branch, has now filed a statement of interest, and represents that "the United States does not take a position on whether the Court should order the requested discovery." (R. 265, Gov't's Statement at 3.) According to the statement, the United States is "implementing its JCPOA commitments, " and "those commitments do not require the Executive Branch to take any specific action with respect to efforts by judgment creditors of Iran to pursue post-judgment discovery or other enforcement proceedings."[4] (Id.) The government urges only that if discovery is ordered, the Court "supervise such discovery carefully, taking into account the sensitive nature of discovery into the property of foreign states and their agencies and instrumentalities."[5] (Id. at 4.)


         "[F]oreign sovereign immunity is a matter of grace and comity on the part of the United States." Rubin v. Islamic Republic of Iran, No. 16-534, 2018 WL 987348, at *4 (U.S. Feb. 21, 2018) (citation omitted). For much of our nation's history, courts "deferred to the decisions of the political branches" regarding whether immunity applied in a given situation. Id. (citation omitted). In the 1970s, "Congress enacted the FSIA in an effort to codify th[e] careful balance between respecting the immunity historically afforded to foreign sovereigns and holding them accountable, in certain circumstances, for their actions." Id. One such exception to foreign sovereign immunity is Section 1605 A of the FSIA, under which "American nationals may file suit against state sponsors of terrorism in the courts of the United States."[6] Bank Markazi v. Peterson, 136 S.Ct. 1310, 1317 (2016). Specifically, terror victims can seek money damages against a foreign state for personal injury or death caused by an act of terrorism, including "torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support" to terrorist activities. Id. (quoting 28 U.S.C. § l6O5A(a)(1)).

         Yet terror victims who prevail under the FSIA "have often faced practical and legal difficulties at the enforcement stage." Id. at 1317-18 (citation omitted). Several legal principles limit the ability of a prevailing plaintiff from attaching assets of a foreign state. Id. at 1318. Subject to a few narrow exceptions, "the FSIA shields foreign-state property from execution." Id.; see also Rubin, 2018 WL 987348, at *5 (observing that the FSIA "provides as a default that the property in the United States of a foreign state shall be irrrmane from attachment arrest and execution" (citation and internal quotation marks omitted)). Courts in the United States also "generally lack authority ... to execute against property in other countries[.]" Republic of Argentina v. NML Capital, Ltd., 134 S.Ct. 2250, 2257 (2014). But other foreign-state property is potentially available to plaintiffs who obtain a judgment under the FSIA. Bank Markazi, 136 S.Ct. at 1318. Attachable assets include "foreign-state property located in the United States" that is "used for a commercial activity." Id. (citation omitted). Additionally, the Terrorism Risk Insurance Act of 2002 ("TRIA") authorizes execution of judgments obtained under the FSIA's state-sponsored terrorism exception against "the blocked assets" of a terrorist party, its agencies, or its instrumentalities. Id., A "blocked asset" is defined as "any asset seized by the Executive Branch pursuant to either the Trading with the Enemy Act (TWEA), or the International Emergency Economic Powers Act (IEEPA)." Id. (citations omitted).

         The FSIA does not specifically address what post-judgment discovery procedures are available to plaintiffs seeking execution of a judgment obtained against a foreign state. NML Capital, 134 S.Ct. at 2256 ("There is no ... provision forbidding or limiting discovery in aid of execution of a foreign-sovereign judgment debtor's assets."). However, the Federal Rules of Civil Procedure apply to such proceedings, and the rules governing post-judgment discovery are "quite permissive, " Id. at 2254. Specifically, Federal Rule of Civil Procedure 69 provides that "[i]n aid of the judgment or execution, " a judgment creditor "may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located." Fed.R.Civ.P. 69(a)(2). Plaintiffs here are invoicing Federal Rule of Civil Procedure 45, pertaining to third-party discovery, and 735 III. Comp, Stat. 5/2- 1402(a), which "enables a judgment creditor to discover assets or income of the debtor[.]" Shales v. T. Manning Concrete, Inc., 847 F.Supp.2d 1102, 1111 (N.D. Ill. Mar. 13, 2012) (citation and internal quotation marks omitted); see also 735 Ill. Comp. Stat. 5/2-1402(a) (providing that "[a] judgment creditor ... is entitled to prosecute supplementary proceedings for the purposes of examining the judgment debtor or any other person to discover assets or income of the debtor not exempt from the enforcement of the judgment"). A citation served under the Illinois statute can also be used to compel "the application of non-exempt assets or income" of the debtor in the hands of a third party to be paid toward the judgment. 735 Ill. Comp. Stat. 5/2-1402(a). Service of a citation has the effect of creating a lien on all "nonexempt personal property, including money, choses in action, and effects of the judgment debtor ... in the possession or control of the third party[.]" 735 Ill. Comp. Stat. 5/2-1402(m). This "restraining provision" is "intended to forestall the judgment debtor or a third party from frustrating the supplementary proceedings before the judgment creditor has had an opportunity to reach assets." Shales, 847 F.Supp.2d at 1111 (citation, internal quotation marks, and alteration omitted). With this background in mind, the Court turns to Boeing's arguments.

         I. Political Question Doctrine

         Boeing first argues that Plaintiffs' motion to compel should be denied because "enforcing Plaintiffs' [discovery] requests would require the Court to resolve nonjusticiable political questions." (R. 245-1, Boeing's Mem. at 12.) Specifically, Boeing argues that "[i]n committing the United States to the JCPOA, the President (with congressional acquiescence) made a political judgment to undertake certain obligations, including allowing Iran to acquire commercial airplanes from U.S. companies, in exchange for securing a diplomatic solution to the problem posed by Iran's nuclear program." (Id.) In Boeing's view, "Plaintiffs . . . seek to use this Court to substitute their own policy judgments of the President and Congress" by "frustrating a central element of the JCPOA and undermining the finality of the United States' foreign policy choices[.]" Id. at 13, "In general, the Judiciary has a responsibility to decide cases properly before it, even those it would gladly avoid." Zivotofsky ex rel. Zivotofsky v. Clinton, 566 U.S. 189, 194 (2012) (citation omitted). One "narrow exception" to that rule is the "political question doctrine." Id. at 195. "The political-question doctrine identifies a class of questions that either are not amenable to judicial resolution because the relevant considerations are beyond the courts' capacity to gather and weigh, ... or have been committed by the Constitution to the exclusive, unreviewable discretion of the executive and/or legislative-the so-called 'political'-branches of the federal government, " Judge v. Quinn, 624 F.3d 352, 358 (7th Cir. 2010) (citations and internal quotation marks omitted); see also Japan Whaling Ass 'n v. Am. Cetacean Soc 'y, 478 U.S. 221, 230 (1986) ("The political question doctrine excludes from judicial review those controversies which revolve around policy choices and value determinations constitutionally committed for resolution to the halls of Congress or the confines of the Executive Branch."). The doctrine embodies a recognition that "courts are fundamentally underequipped to formulate national policies or develop standards for matters not legal in nature." Japan Whaling, 476 U.S. at 230 (citation omitted). The Supreme Court has set forth several factors to guide courts in identifying a political question:

Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

Baker v. Carr, 369 U.S, 186, 217 (1962). A case is not barred by the political question doctrine "[u]nless one of these formulations is inextricable from the case[.]" Id.

         In general, "matters relating to the conduct of foreign relations ... are so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference." Haig v. Agee, 453 U.S, 280, 292 (1981) (citation and internal quotation marks omitted); see also United States v. Pink, 315 U.S. 203, 222-23 (1942) ("[T]he conduct of foreign relations is committed by the Constitution to the political departments of the Federal Government;... the propriety of the exercise of that power is not open to judicial inquiry[.]"). However, the Court must make a careful inquiry when deciding if the doctrine applies, because there is a distinction between "political questions" and "political cases" and not "every case or controversy which touches foreign relations lies beyond judicial cognizance." Baker, 369 U.S. at 211, 217 (emphasis added). Put simply, "it is emphatically the province and duty of the judicial department to say what the law is, " Zivotofslcy, 566 U.S. at 196 (citation and internal alteration omitted), and the Court "cannot shirk this responsibility merely because [its] decision may have significant political overtones." Japan Whaling Ass 'n, 478 U.S. at 230. Because the doctrine is largely driven by separation of powers concerns, the Court must employ additional scrutiny when the doctrine is invoked by a private party rather than a "coordinate branch of the United States government." McMahon v. Presidential Airways, Inc., 502 F.3d 1331, 1359-60 (11th Cir. 2007).

         In considering these principles, the Court agrees with Plaintiffs that Boeing's reliance on the political question doctrine is misplaced. This Couit is being called to decide a discovery dispute, plain and simple. Although the discovery sought certainly has "political overtones, " Japan Whaling Ass'n, 478 U.S. at 230, the Court is not deciding any issue at this juncture that is committed to some other branch of the government or for which there are no judicially manageable standards for resolving.[7]Compare Zivotofsfy, 566 U.S. at 194-96 (concluding that action by parents seeking permanent injunction requiring Secretary of State to identify child's place of birth as "Jerusalem, Israel" was not barred under political question doctrine, even though the Executive Branch has the sole power to determine the political status of Jerusalem) and Japan Whaling Ass 'n, 476 U.S. at 230 (concluding that political question doctrine did not bar judicial resolution of controversy over whether federal statute required Executive Branch to make certification ...

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