SUMMARY OF "THE BILL"
SECTION 1.
CLARIFICATION OF PRIVATE RIGHT OF ACTION
AGAINST TERRORIST STATES; DAMAGES.
This section overcomes the Cicippio-Puleo decision, Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C.
2004), and preserves the original intent of Congress in its passage of the Flatow Amendment to the Foreign
Sovereign Immunities Act, 28 U.S.C. § 1605(a)(7) note, which thereby allows victims to collect court ordered damages
against state sponsors of terrorism.
Cicippio-Puleo v. Islamic Republic of Iran, held that "neither 28 U.S.C. § 1605(a)(7) nor the Flatow Amendment, nor
the two considered in tandem, creates a private right of action against a foreign government." 353 F.3d 1024, 1032-
33 (D.C. 2004). This section inserts language into the Flatow Amendment that would allow a private right of action
against a foreign government.
This section also revises the appellate procedure under the Foreign Sovereign Immunities Act to match the appellate
procedure that private litigants must comply with.
SECTION 2. PROPERTY SUBJECT TO ATTACHMENT EXECUTION.
This section changes the legal standard of the Bancec doctrine from day to day-managerial control to one of
beneficial ownership, only as it applies to states sponsors of terrorism for their terrorist acts against U.S. citizens.
This section allows the families of victims of terrorism to attach the hidden assets of terrorist states held within the
United States.
In First Nat'l City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 626-27 (1983) the Supreme Court
enunciated the so-called Bancec doctrine, which created a presumption against a party that seeks to satisfy an
outstanding judgment against a foreign government by seizing the assets belonging to a government agency of the
same foreign government. However, the Court also ruled that there were ways to overcome the Bancec doctrine's
presumption. Id. at 628-29. If the foreign state exerts extensive or day to day control over the government
instrumentality, a principal and agent relationship is created, and one may be held liable for the actions of the other.
Id. at 629.
The Bancec doctrine would protect Iran's assets, or the assets of any other state sponsor of terrorism, from judgment
creditors if the assets were properly invested through separately established entities. A foreign state that sponsors
terrorism, such as Iran, can easily invest in the United States, as long as it sufficiently layers its investments in
separately established entities. It is nearly impossible to meet the day-to-day control test necessary to pierce the
presumption of the Bancec doctrine. Thus, we need to clarify the doctrine to lower the burden of proof. Altering the
Bancec test will make investments of state sponsors of terrorism appropriately vulnerable to those victims that obtain
valid judgments in US court. The day-to-day test is a reasonable limitation when applied in normal commercial
litigation. However, where the intent of Congress is to deter terrorism and the limitations of the Bancec doctrine
hamper the accomplishment of Congress's goal.
Section two would provide a statutory mechanism for victims of terrorism to attach the assets of terrorist states that
are currently held within the United States. This section lowers the burden of proof that victims of terrorism with valid
judgments must meet when they try to satisfy these judgments against assets of state sponsors of terrorism located
in the United States. This would allow US victims to attach and seize assets indirectly owned by Iran or any of
independently established government agencies or entities.
SECTION 3. APPOINTMENT OF SPECIAL MASTERS.
This section expands the scope of the Crime Victims Fund Anti-Terrorism Emergency Reserve administered by the
Department of Justice to include the horrific act of terrorist murder committed against our peacekeeping Marines in
the bombing of their barracks in Beirut, Lebanon, October 23, 1983. This will thereby allow costs incurred by the
Court for the appointment of special masters to be offset on a fully reimbursable basis to the Department of Justice
upon receipt of victims' damages.
The Beirut bombing attack occurred in 1983, 5 years before the cutoff date in the current statute identified above.
The current limiting date is December 21, 1988. The revision would open the window wider to allow the Beirut case
to come within the scope of the statutory cutoff.
SECTION 4. LIS PENDENS.
The proposed legislation would create a mechanism whereby a lien could be filed in any jurisdiction in the United
States where a state sponsor of terrorism directly or indirectly owns assets. This section prevents the assets of
foreign states sponsors of terrorism from fleeing the country with the passage of this legislation. It is feared that
countries such as Iran would begin a massive sell off to deny the victims of terrorism the damages that have been
awarded by the Court and they so truly deserve consistent with the intent of Congress.
SECTION 5. APPLICABILITY.
The proposed legislation would allow lawsuits, which have been dismissed due to the Cicippio-Puleo decision, to be
re-filed, and ensure that this legislation will apply to current litigation brought on behalf of United States victims of
foreign state sponsored terrorism.
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