Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ
919 F. Supp. 2d 411
S.D.N.Y.2013Background
- Petitioners are family members and estates of seventeen victims of the 1996 Khobar Towers attack seeking to enforce a DC Court judgment against Iran and Iranian instrumentalities.
- Blocked assets held by Bank of Tokyo consist of EFTs designated under OFAC/Presidential orders, now in interest-bearing accounts, and were not opposed by Bank of Tokyo.
- DC Court entered a 2006 default judgment and a 2009 supplemental judgment totaling substantial damages against Iran, MOIS, and IRGC under FSIA 1605A.
- Petitioners registered the judgments in this District, served writs of execution, and seek a turnover order under Rule 69 and CPLR 5225(b) to attach blocked assets.
- OFAC designates specific Iranian entities as SDNs; petitioners contend these entities are instrumentalities of Iran entitled to attachment under FSIA and TRIA.
- The United States and Bank of Tokyo submitted arguments on licensing and control, with the court ultimately determining no OFAC license is required for turnover.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether TRIA and FSIA allow attachment of blocked assets to satisfy a judgment | Petitioners: assets may be attached as instrumentalities of Iran under TRIA/FSIA | Bank of Tokyo: may face penalties without OFAC license; license requirement unsettled | Yes; assets may be attached under TRIA/FSIA |
| Whether the Iran entities are instrumentalities of Iran | Eight non-party entities are government-owned or controlled and thus Iranian instrumentalities | Bank of Tokyo: no direct opposition; focus on ownership/control not disputed | Yes; the eight entities are instrumentalities of Iran |
| Whether OFAC license is required to release blocked assets for turnover | License not necessary; turnover can occur without OFAC license per government position | License might be required to avoid penalties; risk to release without license | No OFAC license required; turnover permitted |
| Whether the petition complies with CPLR 5225(b) and Rule 69 in a turnover proceeding | Respondent in possession of money belonging to Iran Entities; petition valid under CPLR 5225(b) | Bank of Tokyo did not dispute possession; required procedural compliance appears satisfied | Petition satisfied CPLR 5225(b) and Rule 69 turnover procedure |
Key Cases Cited
- Weinstein v. Islamic Republic of Iran, 609 F.3d 43 (2d Cir. 2010) (FSIA 1605A provides basis to reach instrumentality assets)
- Estate of Heiser v. Islamic Republic of Iran, 807 F. Supp. 2d 9 (D.D.C. 2011) (court recognizes attachment of instrumentalities under 1610(g))
- Costello v. City of Burlington, 632 F.3d 41 (2d Cir. 2011) (summary judgment standards and burden of production)
- Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241 (2d Cir. 2004) (gerneral summary judgment standard; evidence must show no genuine issue)
- Amaker v. Foley, 274 F.3d 677 (2d Cir. 2001) (summary judgment standards in Second Circuit)