Raymond Anthony SMITH, as Administrator of the Estate of George SMITH, deceased, and on behalf of the SMITH solatium claimants, and Katherine Soulas, in her own right, on behalf of her minor children, as Executrix of the Estate of Timothy Soulas, deceased, and on behalf of the Soulas solatium claimants, Plaintiff-Appellants, v. FEDERAL RESERVE BANK OF NEW YORK, and The Honorable John W. Snow, Secretary of the Treasury, Defendant-Appellees.
Docket No. 03-6195.
United States Court of Appeals, Second Circuit.
Decided: October 3, 2003.
346 F.3d 264
Argued: September 29, 2003.
Shannen W. Coffin, Deputy Assistant Attorney General, United States Department of Justice, Washington, DC (Peter D. Keisler, Assistant Attorney General, Gregory G. Katsas, Deputy Asst. Atty. Gen., Douglas N. Letter, H. Thomas Byron III, Lewis Yelin, of counsel, James B. Comey, United States Attorney, Beth E. Goldman, Asst. United States Atty., Southern District of New York, New York, NY, on the brief), for Defendant-Appellee John W. Snow.
Shari D. Leventhal, Federal Reserve Bank of New York, New York, N.Y. (Thomas C. Baxter, Jr., David L. Gross, of counsel, on the brief), for Defendant-Appellee Federal Reserve Bank of New York.
Before: SACK, KATZMANN, and RAGGI, Circuit Judges.
KATZMANN, Circuit Judge.
This litigation arises from the attacks upon the United States on September 11, 2001, and takes place in the context of ongoing American military and reconstruction activity in Iraq. It involves competing claims to the disposition of certain Iraqi assets held by the Federal Reserve Bank of New York. On the one hand, Plaintiffs, who are relatives of victims who perished in the World Trade Center catastrophe, seek a declaration that they are entitled to execute against those assets to satisfy a judgment they hold. On the other hand, Defendants contend that those assets should return to Iraq, where they are desperately needed for military and rebuilding efforts. In a very real sense, this case implicates questions of national security and foreign affairs, as well as immediate experiences of collective loss, fear, and grief.
As a Court, our task is limited to interpreting the statutes governing the disposition of those assets in a way that is faithful to Congressional meaning. Because we conclude that the plain language of the statutes that govern dictates that the funds Plaintiffs seek to attach are no longer available for that purpose, we affirm the judgment of the district court.
Plaintiff Raymond Anthony Smith is the half-brother of George Eric Smith and the executor of his brother‘s estate. George Smith, who worked in the World Trade Center‘s South Tower, was killed in the September 11 terrorist attack that caused the collapse of both Trade Center Towers. Plaintiff Katherine Soulas is the wife of Timothy Soulas and executrix of his estate. Mr. Soulas, who worked in the North Tower, also died in the September 11 attacks.
Raymond Smith brought an action in the United States District Court for the Southern District of New York (Baer, J.) on behalf of the estate on November 14, 2001, pursuant to
None of the defendants appeared. The district court entered a default judgment against all defendants and held an inquest to address various issues, including damages, on February 28, 2003. See Smith v. Islamic Emirate of Afghanistan, 262 F.Supp.2d 217, 220 (S.D.N.Y.2003) (”Smith I“). In a detailed opinion dated May 16, 2003 (as amended), the district court noted, with respect to sovereign defendants such as Iraq and Hussein, that some quantum of proof as to liability was required to award damages in the event of a default. See id. at 222 (citing
Plaintiffs brought the present declaratory judgment action against defendants Federal Reserve Bank of New York and the Honorable John W. Snow, Secretary of the Treasury (“Defendants“) in July 2003, seeking to satisfy their judgment against the Republic of Iraq by attaching certain Iraqi assets that are held by the Federal Reserve Bank of New York (the “Assets“). Plaintiffs sought this relief pursuant to the authority of section 201 of the Terrorism Risk Insurance Act, Pub. L. No. 107-297, 116 Stat. 2322 (Nov. 26, 2002) (“TRIA“), which states that “in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, ... the blocked assets of that terrorist party ... shall be subject to execution ... in order to satisfy such judgment.” TRIA § 201, 116 Stat. at 2337.
Defendants opposed the attachment, moving for summary judgment on two grounds. First, they noted that President George W. Bush, acting pursuant to the authority granted him by the International Emergency Economic Powers Act,
The case was argued on September 29, 2003. We affirmed the district court and lifted the stay in an unpublished Order issued the same day, with opinion to follow. This is that opinion.
DISCUSSION
The district court based its decision to grant summary judgment in favor of Defendants on two independent grounds. Smith II, 2003 WL 22103452, at *6, *8. We may affirm the decision below on either theory, or on any other basis that we find in the record. Prisco v. A & D Carting Corp., 168 F.3d 593, 610 (2d Cir.1999). We review a district court‘s decision to grant summary judgment de novo. See Sherman v. Mamaroneck Union Free School Dist., 340 F.3d 87, 92 (2d Cir.2003).
I. The Statutory Scheme
We begin by reviewing the web of statutory provisions that governs the disposition of the Iraqi Assets. These Assets are designated as “blocked” pursuant to sections 202 and 203 of IEEPA,
investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States
In 2001, Congress amended
confiscate any property, subject to the jurisdiction of the United States, of any foreign person, foreign organization, or foreign country that he determines has planned, authorized, aided, or engaged in ... hostilities or attacks against the United States; and all right, title, and interest in any property so confiscated shall vest, when, as, and upon the terms directed by the President, in such agency or person as the President may designate from time to time, and upon such terms and conditions as the President may prescribe, such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States.
In 2003, Congress again legislated in the area of frozen assets of terrorist-supporting states when it passed section 201 of TRIA. Section 201 states that:
[n]otwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, ... the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.
TRIA § 201(a), 116 Stat. at 2337. Section 201 goes on to define “blocked assets” as “any asset seized or frozen by the United States under ... section[] 202 ... of the International Emergency Economic Powers Act (
The final statutory provision relevant to this appeal is EWSAA, Pub.L. No. 108-11, 117 Stat. 559 (Apr. 16, 2003). EWSAA, the most recent enactment of all the statutes at issue here, authorizes the President to “make inapplicable with respect to Iraq ... any ... provision of law that applies to countries that have supported terrorism.” EWSAA § 1503, 117 Stat. at 579. Defendants contend that the President exercised this authority on May 7, 2003, when he issued Presidential Determination No. 2003-23 and made TRIA inapplicable to Iraq. See 68 Fed. Reg. 26,259. Presidential Determination 2003-23 invokes the authority of EWSAA and states that it “make[s] inapplicable with respect to Iraq ... any ... provision of law that applies to countries that have supported terrorism.” Id. There is no dispute that TRIA is a law that applies to countries that support terrorism. See TRIA § 201(d)(4), 116 Stat. at 2340.
Because this appeal also concerns an attempt to execute assets in satisfaction of a judgment, we also review briefly the law regarding execution.
II. The TRIA Claim
The district court‘s first holding is that section 201 of TRIA does not provide a basis for the plaintiffs to attach the Assets. See Smith II, 2003 WL 22103452, at *2-*6. To reiterate, section 201 of the Act states that:
[n]otwithstanding any other provision of law, and except as provided in subsection (b), in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, ... the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.
Plaintiffs’ theory of the case is premised upon the idea that section 201 of TRIA represents a Congressional mandate — akin to an appropriation — that the frozen Iraqi Assets be used only to compensate plaintiffs who have judgments against the Iraqi government. According to this theory, the President acted without authority when he confiscated blocked Iraqi assets and directed their use for a purpose other than satisfying victims’ judgments.
Plaintiffs’ interpretation hinges on the statute‘s use of the imperative “shall.” Thus, throughout their brief, Plaintiffs write that “Congress declared, in section 201 of TRIA, that ... these frozen Iraqi funds ’shall’ be used to satisfy the judgments of victims of State sponsored terror such as the plaintiffs here.” Br. for Plaintiff-Appellants at 8; see also id. at 4 (“Congress explicitly mandated that the subject funds shall be used to compensate victims of terrorism.“); id. at 5 (“Congress’ specific, express intent was for these plaintiffs to be compensated from frozen Iraqi funds.“) These assertions are presented in a conclusory fashion, however, bereft of any explanation of why the language of the statute compels such a reading.
Instead of offering a text-based argument, Plaintiffs make much of a passage in the House Conference Report, which states that “[i]t is the intent of the Conferees that Section 201 establish that such judgments [against terrorist states] are to be enforced. Section 201 ... make[s] clear that all such judgments are enforceable against any assets or property [covered by the statute].” H.R. Conf. Rep. No. 107-779, at 27 (Nov. 13, 2002). They further rely on remarks by Senator Tom Harkin indicating that Congress intended the “blocked assets” referenced in TRIA § 201 “to include any asset of a terrorist party that has been seized or frozen by the United States in accordance with law.” 148 Cong. Rec. S11528 (daily ed. Nov. 19, 2002).
We disagree with Plaintiffs’ interpretation of the statute. First, we do not believe that TRIA § 201 is analogous to an appropriation.3 Although Plaintiffs consistently imply that TRIA is an appropriation — most notably through their repeated reference to the President‘s confiscation as a “reappropriation” — nowhere do they argue directly that section 201 operates literally as an appropriation. If they did, they would have to confront the challenge of explaining how these funds constituted “appropriations.” See
Finally, although we ordinarily will not look to legislative history when the language of a statute is clear, see Conn. Nat‘l Bank v. Germain, 503 U.S. 249, 254 (1992), the history of TRIA § 201 is entirely consonant with the interpretation suggested by the statutory language. The Conference Report excerpt cited by Plaintiffs indicates Congress‘s commitment to making terrorism judgments enforceable against terrorists’ blocked assets,7 but it cannot reasonably be stretched, as Plaintiffs would have us do, to divest the President of authority to confiscate blocked assets. There is more than a semantic difference between blocking assets and confiscating them. As Senator Harkin, in the remarks quoted by Plaintiffs, noted, the term “blocked assets” reaches broadly to include any property seized or frozen by the United States. But it does not reach so broadly as to encompass confiscated property. To seize or freeze assets transfers possessory interest in the property. See Dames & Moore, 453 U.S. at 673-74 & n. 5. But confiscation, pursuant to IEEPA § 203(a)(1)(C), transfers ownership of terrorist property by vesting right, title, and interest as the President deems appropriate. See
III. The EWSAA Claim
The court additionally concluded that Presidential Determination No. 2003-23, 68 Fed. Reg. 26,259 (May 7, 2003), had “made [TRIA] inapplicable with respect to Iraq,” pursuant to section 1503 of EWSAA, 117 Stat. at 579. Plaintiffs challenge this conclusion, arguing that Congress did not grant such authority to the President, and that such delegation would be unconstitutional even if it were intended. Because we conclude that the President‘s confiscation of the Iraqi assets resolves this appeal, we need not reach this issue and express no views on the constitutionality of section 1503.
CONCLUSION
We readily acknowledge the importance of satisfying judgments in all cases. The horrific context of the matter at hand with the loss of life and its tragic consequences only underscores that imperative. Nothing we do here abrogates that judgment. We determine only that Plaintiffs must look elsewhere to satisfy it.
For the foregoing reasons, the judgment of the district court is affirmed. The mandate shall issue forthwith.