Fran Heiser v. Islamic Republic of Iran
407 U.S. App. D.C. 181
| D.C. Cir. | 2013Background
- The Khobar Towers attack in 1996 killed US personnel; Iran is alleged to have aided the attack.
- Estate of Heiser and others obtained a default judgment, later modified to about $591 million under 28 U.S.C. § 1605A).
- Plaintiffs sought to attach funds in accounts held by Wells Fargo and Bank of America related to Iran's interests.
- Blocking regulations froze transfers to Iranian-designated entities, depositing proceeds in separate accounts rather than paying beneficiaries.
- Contested accounts contain blocked assets; plaintiffs argue attachment under § 1610(g) and § 201 to satisfy judgments.
- District court held that § 201 and § 1610(g) require ownership by Iran; adopted U.C.C. Article 4A as a federal rule of decision and denied turnover.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do §201 and §1610(g) require ownership by Iran to attach assets? | Heiser argues ‘of’ denotes Iranian interest suffices; ownership not required. | Iran and banks argue ownership is required under the statutes. | Ownership is required; Iranian ownership not shown. |
| Can Article 4A serve as a federal rule of decision for ownership under §201/§1610(g)? | Heiser would apply a broad ownership concept through 4A to reach attachment. | Banks/U.S. contend for a national ownership rule aligned with ownership-based interpretation. | Article 4A is a proper federal rule of decision for applying §201 and §1610(g). |
| Did Iran own the contested accounts under Article 4A? | Ownership could extend to Iranian banks’ contingent interests in the funds. | Iran did not own the funds; beneficiary banks did not receive payment orders; originator remains owner. | Iran did not own the contested accounts. |
| Does recognizing contingent interests risk improper punishment of innocents or depart from common-law principles? | Contingent Iranian interests justify attachment to satisfy judgments. | Attaching non-owned property harms innocents and violates traditional ownership rules. | Ruling preserves ownership-based attachment and avoids punishing innocents; protects common-law principles. |
Key Cases Cited
- Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009) (defines when title passes and informs U.C.C. Article 4A application)
- Calderon-Cardona v. JPMorgan Chase Bank, N.A., 867 F. Supp. 2d 389 (S.D.N.Y. 2011) (confirms ownership interpretations under §201 regarding blocking assets)
- Hausler v. JPMorgan Chase Bank, N.A., 845 F. Supp. 2d 553 (S.D.N.Y. 2012) (statutory interpretation of §201 ownership debated in district courts)
- Lehman v. Roche Molecular Sys., Inc., 131 S. Ct. 2188 (2011) (discussion on the meaning of 'of' in various statutory contexts)