Havlish v. 650 Fifth Ave. Co., 934 F.3d 174

Background

Hundreds of terrorism victims (Judgment Creditors) hold default judgments against the Islamic Republic of Iran and sued Alavi Foundation and 650 Fifth Ave. Co. (Defendants) to execute those judgments by attaching U.S. assets including interests in 650 Fifth Avenue.
Alavi is a New York nonprofit that owns 60% of the partnership 650 Fifth Ave. Co.; Assa/Assa Co. owns the other 40% and this Court previously found Assa controlled by Iran.
District court granted summary judgment to Judgment Creditors on FSIA and TRIA theories, the court later held after a bench trial that Defendants were Iran’s agencies/instrumentalities and alter egos and ordered turnover under FSIA §1610(b)(3) and TRIA §201.
This Court in 2016 vacated summary judgment (Kirschenbaum), holding as a matter of law Defendants were not the foreign state of Iran and rejecting the district court’s Bancec alter-ego theory for FSIA purposes; remanded only two TRIA factual issues for trial.
On remand the district court allowed the Judgment Creditors to pursue FSIA §1610(b)(3) claims at trial, held two former Alavi board members barred from testifying, and denied Defendants a jury trial; it entered judgment for the Judgment Creditors on FSIA and TRIA claims.
This appeal: the Second Circuit (1) reversed the FSIA §1610(b)(3) judgment (mandate/law-of-the-case violations), (2) vacated the TRIA judgment because the court abused discretion by excluding two witnesses and remanded for a new bench trial, and (3) held TRIA §201 actions against state sponsors or their agencies have no Seventh Amendment jury right (so denial of jury trial was proper).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether district court could try FSIA §1610(b)(3) claims on remand	Plaintiffs: FSIA §1610(b)(3) claims were reserved and not foreclosed by the 2016 mandate; trial permitted	Defendants: Mandate and law of the case foreclosed relitigation of FSIA status; FSIA claims were foreclosed	Reversed: district court violated mandate and law of the case; entry for Defendants on FSIA claims required
Whether Defendants are "foreign state" or an agency/instrumentality (FSIA)	Plaintiffs: Defendants function as Iran’s agencies/instrumentalities or alter egos, so FSIA claims apply	Defendants: Are New York entities; Kirschenbaum foreclosed treating them as Iran under FSIA	Held for Defendants as law of the case in prior opinion; district court erred by reaching opposite conclusion
Admissibility: exclusion of two former Alavi board members' testimony	Plaintiffs: exclusion appropriate under court’s evidentiary rulings and trial coordination orders	Defendants: exclusion was abuse of discretion and prejudicial	Reversed: exclusion abused discretion; TRIA judgment vacated; new trial ordered permitting those witnesses
Right to jury trial on TRIA §201 claims against state sponsors/agencies	Plaintiffs: TRIA silent on jury, earlier withdrawal of demand; trial need not be jury	Defendants: Assert Seventh Amendment or statutory jury right	Held: No Seventh Amendment jury right for actions against foreign states or their agencies; denial of jury trial affirmed

Key Cases Cited

Kirschenbaum v. 650 Fifth Ave. & Related Props., 830 F.3d 106 (2d Cir. 2016) (vacating summary judgment; holding Defendants not foreign state or FSIA agencies as a matter of law and remanding only TRIA factual issues)
First Nat’l City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec), 462 U.S. 611 (U.S. 1983) (alter-ego equitable principles in foreign sovereign context)
Rubin v. Islamic Republic of Iran, 138 S. Ct. 816 (U.S. 2018) (§1610(g) operates only when immunity is abrogated elsewhere)
Puricelli v. Republic of Argentina, 797 F.3d 213 (2d Cir. 2015) (district court must follow appellate mandate)
Ruggiero v. Compania Peruana de Vapores, 639 F.2d 872 (2d Cir. 1981) (no common-law jury right for suits against foreign governments; Seventh Amendment preserved only common-law rights)
Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (U.S. 1998) (statutory vs. Seventh Amendment jury-right analysis)
Doe v. New York City Dep’t of Social Servs., 709 F.2d 782 (2d Cir. 1983) (law-of-the-case doctrine binds district courts to appellate rulings)