Harrison v. Republic of Sudan
802 F.3d 399
2d Cir.2015Background
- In 2000 an explosion on the U.S.S. Cole killed 17 sailors and injured others; plaintiffs sued the Republic of Sudan in D.C. in 2010 under the FSIA terrorism exception (28 U.S.C. § 1605A), alleging Sudan materially supported al Qaeda.
- Plaintiffs effected service under 28 U.S.C. § 1608(a)(3) by mailing process to Sudan’s Minister of Foreign Affairs at the Sudanese Embassy in Washington, D.C.; a return receipt was received.
- Sudan did not respond; the D.C. District Court entered default judgment in 2012 for $314,705,896 and found service proper.
- Plaintiffs registered the judgment in the S.D.N.Y. and sought turnover of Sudanese assets frozen under OFAC sanctions (31 C.F.R. Part 538); the S.D.N.Y. issued three turnover orders in Dec 2013–Jan 2014.
- Sudan appeared only after the turnover orders and appealed, arguing (1) § 1608(a)(3) required service at the ministry in Khartoum, not via an embassy address, and (2) the court erred by ordering turnover of OFAC-blocked assets without an OFAC license or a case-specific DOJ Statement of Interest.
- The Second Circuit affirmed: (1) service to the minister at the embassy satisfied § 1608(a)(3); and (2) turnover of blocked assets was proper without a new OFAC license or new case-specific DOJ letter because prior DOJ Statements and TRIA authority exempted TRIA judgment holders from OFAC licensure requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mailing process to Sudan’s Minister of Foreign Affairs at Sudan’s embassy in Washington satisfies § 1608(a)(3) | Harrison: § 1608(a)(3) requires mailing to the head of the ministry (the minister) and mailing to the minister at the embassy suffices | Sudan: § 1608(a)(3) requires mailing to the head of the ministry in the foreign state (Khartoum), not via an embassy address | Held: Mailing to the minister via the embassy satisfies § 1608(a)(3); service was proper. |
| Whether district court needed an OFAC license or a new DOJ Statement of Interest before ordering turnover of OFAC-blocked Sudanese assets | Harrison: TRIA and § 1610(g) allow execution against blocked assets; prior DOJ Statements permit distribution without OFAC license | Sudan: Court should obtain an OFAC license or a case-specific DOJ Statement of Interest before distributing blocked assets | Held: No new OFAC license or case-specific DOJ letter required; prior DOJ Statements and TRIA permit turnover of blocked assets to § 1605A judgment holders. |
Key Cases Cited
- United States v. Allen, 788 F.3d 61 (2d Cir. 2015) (statutory interpretation principles)
- Magness v. Russian Federation, 247 F.3d 609 (5th Cir. 2001) (service improper when not directed to ministry head)
- Transaero, Inc. v. La Fuerza Aerea Boliviana, 30 F.3d 148 (D.C. Cir. 1994) (service improper where ministry of foreign affairs not served)
- Peterson v. Islamic Republic of Iran, 627 F.3d 1117 (9th Cir. 2010) (FSIA post-judgment service and default-judgment service requirements)
- Weininger v. Castro, 462 F. Supp. 2d 457 (S.D.N.Y. 2006) (DOJ Statement: TRIA funds may be distributed without OFAC license)
- Estate of Heiser v. Islamic Republic of Iran, 807 F. Supp. 2d 9 (D.D.C. 2011) (DOJ views TRIA as overriding OFAC licensure for covered assets)
- Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ (Bank of Tokyo), 919 F. Supp. 2d 411 (S.D.N.Y. 2013) (court accepted DOJ position that TRIA allows distribution of blocked assets without OFAC license)
- Rubin v. Islamic Republic of Iran, 709 F.3d 49 (1st Cir. 2013) (TRIA permits attachment of blocked assets, enabling circumvention of normal OFAC licensing)