Volume IV - Annexes 331-358

INTERNATIONAL COURT OF JUSTICE
CERTAIN IRANIAN ASSETS
(ISLAMIC REPUBLIC OF IRAN v. UNITED STATES OF AMERICA)
REJOINDER
SUBMITTED BY
THE UNITED STATES OF AMERICA
May 17, 2021
ANNEXES
VOLUME IV
Annexes 331 through 358

ANNEX331

Levin v. Bank of New York Mellon, Not Reported in F.Supp.2d (2013)
2013 WL 5312502
2013 WL 5312502
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
Mr. Jeremy LEVIN and Dr.
Lucille Levin, Plaintiffs,
V.
The BANK OF NEW YORK MELLON,
JPMorgan Chase & Co., JPMorgan
Chase Bank, N.A., Societe Generale,
and Citibank, N.A., Defendants.
The Bank of New York Mellon,
JPMorgan Chase & Co., JPMorgan
Chase Bank, N.A., Societe Generale, and
Citibank, N.A., Third-Party Plaintiffs,
v.
Steven M. Greenbaum, et
al., Third-Party Defendants.
The Bank of New York Mellon,
JPMorgan Chase & Co., JPMorgan
Chase Bank, N.A., Societe Generale, and
Citibank, N.A., Third-Party Plaintiffs,
v.
Estate of Michael Heiser, et
al., Third-Party Defendants.
The Bank of New York Mellon,
JPMorgan Chase & Co., JPMorgan
Chase Bank, N.A., Societe Generale, and
Citibank, N.A., Third-Party Plaintiffs,
v.
Carlos Accosta, et al.,
Third-Party Defendants.
No. 09 CV 59oo(RPP).
I
Sept. 23, 2013.
Attorneys and Law Firms
Don Howarth, Suzelle M Smith, Howarth and Smith (LA),
Los Angeles, CA, for Plaintiffs.
Howard B. Levi, J. Kelley Nevling, Jr, Levi Lubarsky &
Feigenbaum LLP, Mark Hanchet, Christopher James Houpt,
Mayer Brown LLP, Christopher J. Robinson, Sharon L.
Schneier, Davis Wright Tremaine LLP (N.Y.C), New York,
NY, for Defendants.
Benjamin Weathers-Lowin, Curtis Campbell Mechling,
Stroock & Stroock & Lavan LLP, David H. Fromm, Brown
Gavalas & Fromm LLP, New York, NY, for Third-Party
Defendants.
OPINION & ORDER
ROBERT P. PATTERSON, JR., District Judge.
*1 On August 29, 2012, Plaintiffs Jeremy Levin and Dr.
Lucille Levin (the "Levin Plaintiffs" or the "Levins") and
third-party Defendants Steven M. Greenbaum, et al. (the
"Greenbaum Judgment Creditors"), Carlos Accosta, et al. (the
"Accosta Judgment Creditors"), and the Estate of Michael
Heiser, et al. (the "Heiser Judgment Creditors") (collectively
the "Judgment Creditors") filed a joint motion for partial
summary judgment on their claims for turnover of certain
blocked assets among those that this Court has designated
as the Phase Two Blocked Assets.1 (Judgment Creditors'
Joint Mot. for Partial Summ. J. ("Phase Two Motion"), ECF
No. 763.) These assets are currently held by the Defendants
Bank of New York Mellon ("BNYM"); JPMorgan Chase
& Co., JPMorgan Chase Bank (collectively, "JPMorgan");
Societe General ("SoGen"); and Citibank ( collectively, the
"Banks").2 (Id. at 11.) JPMorgan and SoGen3 filed their
opposition papers on October 15, 2012 ("JPMorgan Opp."
and "SoGen Opp.," respectively); BNYM filed its opposition
papers on October 16, 2012 ("BYNM Opp."); and Citibank
filed its opposition papers on October 22, 2012 ("Citibank
Opp.")_4
The Banks identified over two hundred commercial thirdparty
Defendants-persons or entities with potential rights
or claims to the Phase Two Blocked Assets. 5 The
Judgment Creditors served each of these potential thirdparty
Defendants; however, only six answered the third-party
complaints and claimed any interest in any of the Phase Two
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Blocked Assets. (See Deel. of Curtis C. Mechling in Supp.
of J. Creditors' Joint Mot. for Partial Summ. J. on Claims
for Turnover of Phase Two Blocked Assets ("Mechling
Deel.") Exs. 24-27, Aug. 29, 2012, ECF No. 764.) Of
those six commercial third-party Defendants, only one-the
Central Bank of [Redacted] ("CB")-filed a memorandum
in opposition to the Judgment Creditors' summary judgment
motion. (See [Redacted].) Although placed on notice by
the Court, (see Letter to Sean Thornton, Office of Foreign
Assets Control ("12/11/09 OFAC Ltr. "); Letter to Harold Koh,
Department of State ("12/11/09 State Dept. Ltr.")), the United
States government has taken no position on this case nor
appeared at any of the proceedings (see Tr. of June 21, 2011
H'rg ("Tr.6/21/2011"), ECF No. 409, at 8-9; Tr. of Nov. 13,
2012 H'rg ("Tr.11/13/12"), ECF No. 835, at 4-5).
For the reasons stated below, the Judgment Creditors' motion
for partial summary judgment on their claims for turnover of
the Phase Two Blocked Assets is granted.
I. BACKGROUND
The Court assumes familiarity with the factual and procedural
history discussed in its March 4, 2011 Opinion and Order (the
"Phase One Opinion") recognizing the Judgment Creditors'
priority interest in the Phase One Assets and granting turnover
of those assets. See Levin L 2011 WL 812032, at * 1-
21. In brief summary, the Judgment Creditors each hold a
valid, unsatisfied judgment against the Islamic Republic of
Iran ("Iran"), awarded pursuant to either § 1605(a)(7) or §
1605A of the Foreign Sovereign Immunities Act ("FSIA")
and registered in this District. Id. Seeking satisfaction of these
judgments, the Judgment Creditors claim that they are entitled
to turnover of certain assets held by the Banks and blocked
by the United States government's Office of Foreign Asset
Control ("OFAC") pursuant to various blocking regulations. 6
*2 In its Phase One Opinion, the Court held that "the
record demonstrates that the judgment [debtor], Iran, or its
agencies or instrumentalities have an interest in" the Phase
One deposit accounts and electronic fund transfers ("EFTs")
blocked by OFAC and held at the Banks. Id. at * 18, *21.
Accordingly, the Court concluded, based on its reading of the
Terrorism Risk Insurance Act ("TRIA"), FSIA § 1610(t)(l)
(A), and the applicable sanctions regulations, that the Phase
One Blocked Assets were subject to attachment and execution
by certain Judgment Creditors in partial satisfaction of their
outstanding judgments against Iran.7 Id. at *21. Though the
Levin Judgment Creditors filed notice of appeal of the Court's
Phase One Opinion, the appeal was never briefed and the
parties withdrew their appeal shortly thereafter. (See Notice
of Appeal, ECF No. 332; Order Granting Mot. to Withdraw
Appeal, Aug. 10, 2011, ECF No. 415.)
The Court now turns to the Judgment Creditors' claim
for turnover of the Phase Two Blocked Assets, which
are identified in the declaration of Curtis Mechling, Esq.,
counsel for the Greenbaum and Accosta Judgment Creditors.
(See Mechling Deel., Exs. 24-27.) Like the Phase One
Blocked Assets, the Phase Two Blocked Assets held by the
Banks consist of assets held at the Banks and blocked by
OFAC. The Banks disclaim any interest in these assets but
nevertheless raise issues concerning the Judgment Creditors'
legal entitlement to turnover.
II. LEGAL STANDARD
Summary judgment is appropriate if "the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law."
Fed.R.Civ.P. 56( c ). The moving party holds the initial burden
of demonstrating that there is no genuine issue of material
fact. FD.I.C. v. Great American Ins. Co., 607 F.3d 288,
292 (2d Cir.2010). When the moving party has met this
initial burden, the opposing party must set forth specific
facts showing that there is a genuine issue for trial, and
cannot rest on mere allegations or denials of the facts asserted
by the movant. Davis v. State of New York, 316 F.3d 93,
100 (2d Cir.2002). The Court must "view the evidence in
the light most favorable to the non-moving party, and may
grant summary judgment only when no reasonable trier of
fact could find in favor of the non-moving party." Allen v.
Coughlin, 64 F.3d 77, 79 (2d Cir.1995).
III. DISCUSSION
A. Whether the Phase Two Assets Are Subject to
Attachment and Turnover
Under the law of the case doctrine, where "a court decides
upon a rule oflaw, that decision should continue to govern the
same issues in subsequent stages in the same case." Pepper v.
United States, 131 S.Ct. 1229, 1250 (2011); see also Scottish
Air Int'!, Inc. v. British Caledonian Group, PLC, 152 F.R.D.
18, 24-25 (S.D.N.Y.1993) (stating that such prior decisions
on a legal issue create "binding precedent"). Courts should
only revisit prior rulings in a case if there are " 'cogent" or
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'compelling' reasons" for doing so, such as "an intervening
change in law, availability of new evidence, or 'the need to
correct a clear error or prevent manifest injustice.' " Johnson
v. Holder, 564 F.3d 95, 99-100 (2d Cir.2009).
*3 Here, in interpreting TRIA and the FSIA to dictate that all
of the Phase One Blocked Assets-including blocked EFTs
held by intermediary banks-were subject to attachment and
turnover, the Court's Phase One Opinion held that
It is plainly the intention of TRIA and the FSIA to make
blocked assets available to plaintiffs .... The nature and
wording ofTRIA ... indicate[s] that Congress intended all
blocked assets to be available for attachment by victims
of terror. [ . . . ] TRIA and the FSIA employ language
subjecting any blocked assets to attachment in these
circumstances.
Levin, 2011 WL 812032, at* 18 (emphasis in original). As
such, the Court determined that TRIA § 201 and FSIA §
1610(£)(1) (A) preempt contrary provisions in Article 4 of the
Uniform Commercial Code ("UCC"), which would prevent a
judgment creditor from executing on funds involved in wire
transfers that have been initiated but not completed. Id. ( citing
Hausler v. JPMorgan Chase Bank, NA., 740 F.Supp.2d 525
(S.D.N.Y.2010) ("Hausler I")); also compare TRIA § 201
andFSIA § 1610(f)(l)(A) with UCC § 4A-502.
The Phase Two Blocked Assets are of the same types as the
Phase One Blocked Assets, and none of the relevant laws
have been amended in the time since the Phase One Opinion
was issued. As such, the law of the case doctrine suggests
that the Court should similarly find that all of the Phase
Two Blocked Assets are subject to attachment and turnover,
including funds involved in wire transfers that were blocked
before they reached the beneficiary's bank, provided that third
parties have not asserted a cognizable interest in the blocked
assets. See Pepper, 131 S.Ct. at 1250.
Nevertheless, the Banks argue that the Court should
reconsider the holding of its Phase One Opinion with respect
to the proceeds of blocked wire transfers held by intermediary
banks in light of the Supreme Court's subsequent decision
in Board of Tr. of Leland Stanford Junior Univ. v. Roche
Molecular Sys., Inc., 131 S.Ct. 2188 (2011) ("Stanford"
), and applications of that decision by other district courts
in Calderon-Cardona v. JPMorgan Chase Bank, NA., 867
F.Supp.2d 389 (S.D.N.Y.2011), appeal docketed, No. 12-
75 (2d Cir. Jan. 10, 2012), and Estate of Heiser v. Islamic
Republic of Iran, 885 F.Supp.2d 429 (D.D.C.2012), appeal
docketed, No. 12-7101 (D.C.Cir. Oct. 5, 2012). But see also
Hausler v. JPMorgan Chase Bank, NA., 845 F.Supp.2d 553
(S.D.N.Y.2012) ("Hausler II"), appeal docketed, No. 12-
1264 (2d Cir. Mar. 20, 2012).
The Court will first address whether blocked EFTs held by
intermediary banks are subject to execution. The Court will
then tum to whether the Phase Two Blocked Assets share
a sufficient nexus with Iran to be subject to attachment and
turnover.
i. Blocked Wire Transfers Held by Intermediary Banks Are
Subject to Attachment and Turnover
1. Stanford and District Court Applications of Stanford
*4 After this Court issued its Phase One Opinion, the
Supreme Court decided Stanford, a patent law case that
addressed, in part, the statutory interpretation of the word "of'
within the context ofownership of patent rights. See 131 S.Ct.
at 2193. Following the Stanford decision, several district court
opinions have discussed its holding with respect to TRIA, of
which three merit discussion at some length: Judge Denise
L. Cote's opinion in Calderon-Cardona, 867 F.Supp.2d 389;
Judge Victor Marrero's opinion in Hausler IL 845 F.Supp.2d
553; and Judge Royce C. Lamberth's opinion in Heiser, 885
F.Supp.2d 429.
Stanford itself did not interpret TRIA, but rather answered
the question of whether the Bayh-Dole Act "displaces the
norm" that the rights to an invention generally belong to
the inventor in patent cases. Stanford, 131 S.Ct. at 2192.
To answer that question, the Court interpreted the phrase
"invention of the contractor." Id. at 2193. Stanford University
argued that this phrase was most naturally read "to include
all inventions made by the contractor's employees with the
aid of federal funding," a reading that would have entitled
Stanford, as the employer, to rights over the patent at issue.
Id. at 2196. The Court found Stanford's reading "plausible
enough in the abstract," but went on to note that "patent law
has always been different," and that, in patent law, the Court
has rejected the idea that employment is sufficient to vest title
to an employee's invention in the employer. Id. at 2196-7.
Reading the Bayh-Dole Act against this backdrop, the Court
went on to explain that "the use of the word 'of' denotes
ownership" (internal citations omitted), and interpreted the
statute to vest title to the patent in the employee rather than
in his employer. Id. at 2196.
Subsequently, the Calderon-Cardona Court addressed the
question of whether EFTs in which the Democratic Republic
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of North Korea and its main intelligence agency, the Cabinet
General Intelligence Bureau, had an interest that could be
attached by terrorism victims pursuant to TRIA § 201(a).
867 F.Supp.2d at 389. Though it disposed of the case by
determining that North Korea was not a "terrorist party" as
defined by TRIA, see id. at 394-95, the CalderonCardona
Court nevertheless went further and determined that TRIA did
not preempt state law definitions of property ownership, id. at
401. To reach this conclusion regarding the preemptive force
of TRIA, it cited Stanford for the proposition that "the use of
the word 'of' denotes ownership." Id. at 399 (citing Stanford,
131 S.Ct. at 2196). Finding no definition of "property" or
"property ownership" in TRIA, the court looked not to OFAC
blocking regulations, but rather to state law. Id. at 400.
By contrast, the Hausler II Court found that TRIA
preempted state property law, reaffirming its previous ruling,
Hausler v. JPMorgan Chase Bank, NA., 740 F.Supp.2d 525
(S.D.N.Y.2010) ("Hausler/"). In so holding, it emphasized
"the Supreme Court's focus on the pertinent statutory context
in Stanford." Hausler IL 845 F.Supp.2d at 569. Looking at
TRIA within its statutory context, the Hausler II Court first
found that TRIA must be read in a way that harmonizes the
statute with OFAC regulations, in that case, the Cuban Assets
Control Regulations ("CACRs"). The "CACRs broadly
define the range of Cuban property interests subject to being
blocked under OFAC's direction, and the TRIA expressly
makes those blocked assets available for attachment and
execution to satisfy certain judgments." Id. at 562.
*5 Second, the Hausler II Court held that TRIA represented
"Congress's recognition that federal law must provide the
substantive rules governing the recovery of terrorism related
judgments." Id. at 563. Third, it held that the use of state
property law to dictate the range of assets executable under
the TRIA would lead to divergent outcomes depending on
where the physical site of the blocking of EFTs was located,
and could lead to a system that could be easily manipulated
by intermediary banks, "who appear unconstrained in
determining where to locate the accounts created when they
block an EFT." Id. Finally, the Hausler II Court held that
the interpretation preferred by the garnishee banks would
mean that assets could be blocked by OFAC, but then could
not be reached by terrorism victims for the enforcement of
judgments, "frustrat[ing the] core objective" of TRIA, to
satisfy judgments held by victims of terror. Id. at 564.
Finally, the Heiser Court opinion in the District Court of
the District of Columbia, addressed the question of whether
Iran had an ownership interest in blocked EFTs sufficient
to permit judgment creditors to attach those assets. 885
F.Supp.2d at 429. The Court found that Congress intended
for the federal government to control the disposition of assets
of state sponsors of terror, and that therefore federal law
preempted state law. Id. at 444-45. However, the Heiser
Court did not look to the OFAC regulations to determine
what ownership interest was required, relying, in part, on a
governmental statement of interest submitted to that court.
See id. at 441 (noting the government's argument that OFAC
blocked assets are used for purposes other than attachment,
including as a negotiating tool between nations, and that
therefore the scope of attachment under TRIA should not be
read coextensively with OFAC blocking regulations); (see
also Statement of Interest of the U.S. at 12, Estate of Heiser
v. Islamic Republic of Iran, 00 CV 2329(RCL) ("Heiser
Statement oflnterest").) (taking no stance on the preemptive
force of TRIA, but arguing that the phrase "of a terrorist
party" required an ownership interest, and the nature of that
ownership interest was not defined by TRIA or the OFAC
regulations)).
Rather, the Heiser Court crafted federal common law to
determine what ownership interest was required by TRIA
§ 201(a), using U.C.C. Article 4 and the common law of
judgment liens to guide its determination.8 See id. at 438
(noting that the common law historically provided that "[t]he
lien of a judgment attaches to the precise interest or estate
which the judgment debtor has actually and effectively in the
property, and only to such interest").
2. There is no Intervening Change in the Law that Requires
This Court to Diverge from its Finding that the TR/A
Preempts State Law
Upon a thorough review of the cases cited by the Banks
and the Judgment Creditors, this Court does not find any "
'cogent' or 'compelling' reasons," Johnson, 564 F.3d at 99-
100, to revisit its prior holding. More specifically, there has
been no intervening change in law that alters this Court's
holding that the phrase "blocked assets of that terrorist
party," when read within the statutory context of the TRIA,
"indicate[s] that Congress intended all blocked assets be
available for attachment by victims of terror." Levin L 2011
WL 812032, at * 18. This Court's prior holding that TRIA
preempts state law is therefore affirmed.
*6 First, the case law cited by the Banks and the Judgment
Creditors shows that the language ofTRIA § 201(a) must be
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interpreted in light of the "nature and wording of the statute."
See Exp.-Imp. Bank of U.S. v. Asia Pulp & Paper Co., Ltd.,
609 F.3d 111, 116 (2d Cir.2010) ("Whether or not midstream
EFTs may be attached or seized depends upon the nature
and wording of the statute pursuant to which attachment or
seizure is sought."). For example, Stanford instructs that the
interpretation of a statute is highly dependent on the context in
which it is written. Though the Court explained its decision,
in part, by saying that "the use of the word 'of' denotes
ownership," Stanford, 131 S.Ct. at 2196, it also made clear
that it was interpreting the patent statute in light of the 220
years of patent law since the first Patent Act, and further
noted that the interpretation of the phrase "invention of the
contractor" proposed by Stanford University, while otherwise
a plausible interpretation, would represent a "sea change in
intellectual property rights." Id. at 2199.
The phrase "of that terrorist party," found in TRIA § 201(a)
should therefore be interpreted within the context of the
OFAC regulations and in a manner consistent with the
remedial purpose of the statute. First, TRIA § 201 refers to
OFAC regulations implemented pursuant to the Trading With
the Enemy Act ("TWEA") and the International Emergency
Economic Powers Act ("IEEPA"), showing Congress' intent
that the statutes be considered together. See Levin L 2011
WL 812032 at* 15 (noting that TRIA § 201(d) (2) defines
"blocked assets" by reference to the TWEA and IEEPA, and
finding that "federal law comprehensively addressed property
rights in this context") (citing Hausler L 740 F.Supp.2d at
531 . ). The OFAC blocking regulations implemented pursuant
to the TWEA and IEEPA broadly define the interest in
property that a terrorist party must have in certain assets
before they may be blocked. See, e.g., 31 C.F.R. § 544.201
("all property and interests in property that are in the United
States . .. are blocked"); 31 C.F.R. § 544.305 ( defining an
"interest in property" as "an interest of any nature whatsoever,
direct or indirect"). Legislating against the backdrop of
broadly worded OFAC regulations, Congress worded TRIA
broadly, thus subjecting all assets blocked under OFAC
regulations to attachment by terror victims holding valid
judgments.
That Congress intended to render blocked assets attachable
rather than leaving them blocked or frozen is in line
with the remedial purpose of TRIA, and such an intent
is evident in the legislative history.9 Senator Tom Harkin,
a sponsor of the Act, stated, "Making the state sponsors
[ of terrorism] actually lose billions of dollars will more
effectively deter future acts of terrorism than keeping their
assets blocked or frozen in perpetuity." 148 Cong. Rec.
S 11524-01 (daily ed. Nov. 19, 2002) (statement of Sen.
Harkin), 2002 WL 31600115. Permitting assets to be blocked
under OFAC regulations but not attached by victims of terror
holding valid judgments would frustrate Congress' purpose of
"deal[ing] comprehensively with the problem of enforcement
of judgments issued to victims of terrorism." H.R.Rep.
No.107-779, at 27 (2002), reprinted in 2002 U.S.C.C.A.N.
1430, 1434; see also Hausler IL 845 F.Supp.2d at 563
(holding that TRIA represents "Congress's recognition that
federal law must provide the substantive rules governing the
recovery of terrorism related judgments").
*7 Here, there is no dispute that the Judgment Creditors
are victims of terror holding valid judgments against Iran.
(See J. Creditors' 56.1 Stmnt. ~~ 16-32.) There is also no
dispute that the Banks are in possession of assets blocked
pursuant to OFAC regulations. (See id.~ 33; see also Citibank
N.A.'s Resp. to J. Creditors' 56.1 Statement ("Citibank's
56.1 Stmnt.") ~ 33, ECF No. 814; JPMorgan's Resp. to J.
Creditors' 56.1 Statement ("JPMorgan's 56.1 Stmnt.") ~ 33,
ECF No. 807; BNYM's Resp. to J. Creditors' 56.1 Statement
("BNYM's 56.1 Stmnt.") ~ 33, ECF No. 808.) The Banks
argue, however, that permitting execution of judgments on
these blocked assets would lead to unfair burdens on innocent
third parties, who have only the most attenuated connection to
Iran. (See, e.g., JPMorgan Opp. at 3-6.) The Court has given
all potentially interested parties the opportunity to appear and
make this argument themselves, (see Mechling Deel., Exs. 1,
24-27, 29) though not all district courts considering similar
attachment actions have chosen to do so, compare CalderonCardona,
867 F.Supp.2d at 393 (ruling on the question of
whether EFTs were attachable before providing notice to
potentially interested third parties) and Heiser, 885 F.Supp.2d
at 434, 449 (same) with Levin L 2011 WL 812032 at *18-
19 (noting previous entry of an order authorizing third-party
interpleader complaints against assets in controversy). See
also Gates v. Syrian Arab Republic, Nos. 11 C 8715, 11 C
8913, 12 C 1836, 12 C 2983, 2013 WL 1337223, at *10
(N.D.111. Mar. 29, 2013) (declining to resolve which parties
had an ownership interest in EFTs without first interpleading
interested parties, noting that "the best way to determine the
details of the transition of the funds at issue in this case is to
notify those who may be involved in the transit ... and provide
them an opportunity to appear and object to any turnover of
the funds").
Of all those interpleaded, only six commercial third-party
Defendants who were parties to the wire transfers at issue
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have responded to this action. (See Mechling Deel., Exs. 24-
27.) Of those, only one has sought a license from OFAC.
(See Letter from [Redacted] 1, Apr. 15, 2013 (notifying the
Court that [Redacted] has a pending application before OFAC
for a license releasing the blocked funds transferred to the
[Redacted] from [Redacted] ).) This Court is satisfied that all
those with potential interests in Phase Two Blocked Assets
have been given notice in this case and, provided that the
entities involved are "agencies or instrumentalities of Iran,"
as addressed below, their assets should be attachable by valid
judgment holders under TRIA § 201(a).
The interpretation ofTRIA § 201(a) advanced by the Banks
is divorced both from the context of the OFAC regulations
and from the remedial purpose of the statute. Arguing that
the phrase "of that terrorist party" requires ownership of the
asset as defined by New York state law, the Banks rely on "the
usual rule in judgment enforcing proceedings," (JPMorgan
Opp. at 7 (citing 30 Am.Jur.2d Executions § 120 (2013))),
and on the Stanford Court's statement that "the use of the
word 'of' denotes ownership" (JPMorgan Opp. at 7 (citing
Stanford, 131 S.Ct. at 2196)). See also Calderon-Cardona,
867 F.Supp.2d at 399--400 (citing Stanford in its holding
that TRIA requires an ownership interest as defined by New
York state law); Heiser, 885 F.Supp.2d at 438 (looking to the
historical common law of judgment liens in its interpretation
of TRIA). However, by overlooking the purpose of TRIA
and the implementing regulations to which the statute refers,
the Banks advance an approach that "is inconsistent with
the Supreme Court's focus on the pertinent federal statutory
context in Stanford." Hausler II, 845 F.Supp.2d at 568.
*8 Finally, the Bank's interpretation is not necessary to
give meaning to the phrase "blocked assets of that terrorist
party." As Judge Marrero of this District explained, TRIA is
broad in scope, encompassing various terrorist entities and
blocking regulations. Therefore, the phrase "of that terrorist
party" provides "the necessary, though perhaps perfunctory,
instruction that the 'blocked assets' available for execution are
only those assets blocked pursuant to the particular regulation
or administrative action directed at the particular terroristparty
judgment debtor." Hausler II, 845 F.Supp.2d at 567.
ii. EFTs Are Subject To Attachment Under TR/A§ 201(a)
and FSIA § 1610(g)
Upon a review of the case law decided after this Court's
Phase One Opinion, this Court does not find any "cogent"
or "compelling" reasons, Johnson, 564 F.3d at 99-100, to
revisit its prior holding that TRIA preempts state law. More
specifically, there has been no intervening change in law that
alters this Court's holding that the phrase "blocked assets of
that terrorist party," when read within the statutory context of
TRIA, "indicate[ s] that Congress intended all blocked assets
be available for attachment by victims of terror." Levin!, 2011
WL 812032, at *18. This Court therefore finds, as it did in its
Phase One Opinion, that blocked EFTs held by intermediary
banks are subject to execution under TRIA.
Given the fact that blocked EFTs held by intermediary banks
are subject to execution under TRIA, the Court need not
address whether FSIA § 1610(g)10 would independently
provide a basis for preemption of state law and execution
of blocked EFTs. It should be noted, however, that FSIA
§ 1610(g) does not mandate a different result than the one
reached here. In fact, the two statutes should be read together,
and "reading TRIA § 201 and FSIA § 16 lO(g) in conjunction
with the entire FSIA and the 2008 NDAA amendments shows
that Congress intended to create a harmonious whole."11
Heiser, 885 F.Supp.2d at 445. See also Levin I, 2011 WL
812032 at *10 (considering both the pre- and post-2008
versions of the FSIA and noting that TRIA is codified as
a note to FSIA § 1610, and must be read in the context of
the overarching statutory scheme of the FSIA). Reading the
two statutes together and in the context of the larger statutory
scheme, the Court affirms its Phase One Opinion holding
that blocked EFTs held by intermediary banks are subject to
execution.
iii. Whether Phase Two Assets Are Assets or Property of an
Agency or Instrumentality of Iran
In order for the Phase Two Blocked Assets to be subject
to attachment and turnover, the Judgment Creditors' motion
must comply with C.P.L.R. § 5225(b), as required by Federal
Rule of Civil Procedure 69. To be entitled to turnover of the
assets, the Judgment Creditors must have provided sufficient
evidence to prove that the entities whose assets have been
blocked are "agencies and instrumentalities of Iran," as
defined by 28 U.S.C. § 1603(b), and that those entities are
entitled to the possession of these funds, but for the blocked
nature of the assets. 12 See Levin I, 2011 WL 812032, at
*18 (citing Weininger v. Castro, 462 F.Supp.2d 457, 499
(S.D.N.Y.2006)).
*9 Neither the Banks nor any of the commercial thirdparty
Defendants have presented evidence to suggest that the
entities discussed below are not agencies or instrumentalities
oflran. (See Deel. of Kelly Nevling in Supp. of JPMorgan's
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Resp. to Phase Two Mot. ("Nevling JPMorgan Deel.") ~~
11-32, Oct. 15, 2012, ECF No. 805 (contesting whether
entities were sufficiently connected to blocked assets, but
not contesting their presence on the SDN List); Deel. of
Kelly Nevling in Supp. ofBNYM's Resp. to Phase Two Mot.
("Nevling BNYM Deel.")~~ 8-20, Oct. 15, 2012, ECF No.
806 (same).) However, as the Judgment Creditors are the
moving party, they bear the burden of presenting sufficient
evidence to demonstrate that there is no issue of material fact
as to the availability of these assets for turnover. See Levin
I, 2011 WL 812032, at* 19 (citing Rodriguez v. City of New
York, 72 F.3d 1051, 1060-61 (2d Cir.1995)).
As they did in the Phase One Opinion, the Judgment Creditors
rely heavily on an affidavit presented by Dr. Patrick Clawson,
a Deputy Director for Research of the Washington Institute
for Near East Policy. (See Aff. of Dr. Patrick Clawson
("Clawson Aff.") ~ 2, Aug. 29, 2012, ECF No. 763.) This
Court noted in its Phase One Opinion that "Dr. Clawson
has extensive experience researching and consulting with
government officials about Iran, and has published several
books on the subject," and, therefore, the Court accepted Dr.
Clawson's expertise in this area. Levin I, 2011 WL 812032 at
* 19. In examining the evidence presented by the Judgment
Creditors here, the Court similarly accepts Dr. Clawson as an
expert.
1. Citibank Phase Two Blocked Assets
The Judgment Creditors seek a turnover of twenty-three
blocked assets held by Citibank (the "Citibank Phase Two
Blocked Assets"). (See Mechling Deel., Ex. 24.) Citibank
does not contest that the entities party to these transfers
are agencies and instrumentalities of Iran. (See Citibank's
56.1 Strnnt ~ 66 ("Citibank lacks information sufficient to
respond to this assertion of undisputed material fact and
refers the Court to the relevant paragraphs in the Clawson
Affidavit.").) These assets include wire transfers in which
the following entities were the ordering customer, remitter's
bank, beneficiary's bank, or the beneficiary: (a [Redacted].
( See Phase Two Mot. at 1 7-18; Mechling Deel. Ex. 24.)
Of these entities, this Court has already held that [Redacted]
and [Redacted] are agencies and instrumentalities oflran, and
that holding is affirmed here. See Levin I, 2011 2011 WL
812032 at *19-20. Of the remaining banking entities, Dr.
Clawson states that [Redacted]; and [Redacted] are all owned
by Iran, are national banks oflran, are controlled by Iran, are
agencies or instrumentalities oflran, or are alter-egos oflran.
(See Clawson Aff. ~~ 24, 27, 32, 33, 35, 36.) This contention
is supported by, and the Court has independently verified, the
fact that each bank is on the SDN List maintained by OFAC
and is designated for sanctions. See generally SDN List, supra
note 6 (listing [Redacted] as subject to sanctions).
*10 Further, according to Dr. Clawson's affidavit,
[Redacted] is a wholly owned subsidiary of[Redacted], which
is an agency or instrumentality of Iran, controlled by Iran,
owned by Iran, or an alter-ego of Iran. (See Clawson Aff.
~ 29.) To support this contention, Dr. Clawson refers to
the SDN List as well as a press release from the Treasury
Department available online. See SDN List, supra note 6; see
also [Redacted].
Finally, according to Dr. Clawson's affidavit, it is common
knowledge among experts in international banking and
commerce that [Redacted] is owned by Iran, is controlled by
Iran, is an agency or instrumentality of Iran, or is an alter ego
of Iran. (See Clawson Aff. ~ 34.) Further, the wire transfer
to which [Redacted] was the intended beneficiary, Citibank
transfer number four, also included [Redacted] as a party to
the transfer, acting as the intended beneficiary bank. (See
Mechling Deel. Ex. 24.) As discussed above, [Redacted] is
also an agency or instrumentality of Iran, listed on OFAC's
SDN List and is subject to blocking sanctions. (See Clawson
Aff. ~ 27.)
This Court finds that the Judgment Creditors have presented
sufficient evidence, through the affidavit of their expert, Dr.
Clawson, and independently-verifiable online resources, that
the entities associated with the Citibank Phase Two Blocked
Assets are agencies and instrumentalities oflran sufficient to
meet the requirements of28 U.S.C. § 1603(b).
2. JPMorgan Phase Two Blocked Assets
The Judgment Creditors seek a turnover of twenty-two
blocked assets held by JPMorgan (the "JPMorgan Phase Two
Blocked Assets"). (See Mechling Deel., Ex. 26.) JPMorgan
has not presented any evidence to contest the Judgment
Creditor's assertion that the entities involved are agencies
and instrumentalities of Iran, (see JPMorgan's 56.1 Stmnt. ~
66 ("The Court must determine whether the Moving Parties
have satisfied their burden of proof with respect to these
allegations.")), instead arguing primarily that the parties to
the EFTs did not exert a sufficient ownership interest over
blocked assets to render them attachable, arguments that the
Court addressed above (see N evling JPMorgan Deel. ~~ 11-
32). These assets include deposit accounts and wire transfers
in which the following entities were designated to be the
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ordering customer, remitter's bank, beneficiary's bank, the
beneficiary, or another entity involved in the transfer: (a)
[Redacted]. (See Phase Two Mot. at 18; Mechling Deel. Ex.
26.)
Of the entities affiliated with the JPMorgan Phase Two
Blocked Assets, four have already been held by this Court to
be agencies or instrumentalities oflran: [Redacted]. See Levin
L 2011 2011 WL 812032 at *19-20. That holding is affirmed
here. In considering the Citibank Phase Two Assets above
' '
this Court found that sufficient evidence had been presented
to show that [Redacted] are agencies and instrumentalities of
Iran for the purposes of28 U.S.C. § 1603(b), and that finding
extends to the JPMorgan Phase Two Blocked Assets in which
those parties have an interest.
*11 According to Dr. Clawson's affidavit, it is common
knowledge among experts in international banking and
commerce, and it is his expert opinion, that [Redacted]13,
[Redacted], are all owned by Iran, controlled by Iran, are
agencies or instrumentalities oflran, or are alter-egos oflran.
(See Clawson Aff. 'l]'I] 23, 30, 31, 38.) In support of this
contention, Dr. Clawson refers to the SDN List, which, as has
been independently verified by the Court, lists those entities
as subject to OFAC sanctions. See generally SDN List, supra
note 6 (listing [Redacted] as subject to sanctions).
[Redacted] is not mentioned in Dr. Clawson's affidavit.
Though an independent search shows that [Redacted] was
added to OFAC's SDN List on December 2, 2010, that
evidence was not presented to the Court by the Judgment
Creditors. See [Redacted] However, JPMorgan transfer
thirteen, the transfer for which [Redacted] was the crediting
bank, also had as a party to the transfer the [Redacted], which
was the beneficiary's bank. (See Mechling Deel., Ex. 26.) As
discussed above, [Redacted] is found on the SDN List and
described by Dr. Clawson as an agency or instrumentality of
Iran. (See Clawson Aff. '1] 23.) Thus, the Judgment Creditors
have presented sufficient evidence to show that an agency or
instrumentality of Iran is a party to wire transfer thirteen.
This Court therefore finds that the Judgment Creditors have
presented sufficient evidence, through the affidavit of their
expert, Dr. Clawson, and independently-verifiable online
resources, that the entities associated with the JPMorgan
Phase Two Blocked Assets are agencies and instrumentalities
of Iran sufficient to meet the requirements of 28 U.S.C. §
1603(b).
3. BNYM Phase Two Blocked Assets
The Judgment Creditors seek a turnover of twelve blocked
assets held by BNYM (the "BNYM Phase Two Blocked
Assets"). (See Mechling Deel. Ex. 25.) BNYM has not
presented any evidence to contest the Judgment Creditor's
assertion that the entities involved are agencies and
instrumentalities of Iran, (see BNYM's 56.1 Stmnt. 'I] 66
("The Court must determine whether the Moving Parties
have satisfied their burden of proof with respect to these
allegations.")), instead arguing primarily that the parties to
the EFTs did not exert a sufficient ownership interest over
blocked assets to render them attachable, arguments that
the Court addressed above (see Nevling BNYM Deel. 'l]'I]
8-20). These assets include wire transfers in which the
following entities were the ordering customer, remitter's bank,
beneficiary's bank, the beneficiary, or another entity involved
in the transfer: (a) [Redacted]. (See Phase Two Mot. at 18;
Mechling Deel. Ex. 25.)
Of the entities affiliated with the BNYM Phase Two Blocked
Assets, three have already been held by this Court to be
agencies or instrumentalities oflran: [Redacted]. See Levin L
2011 2011 WL 812032 at *19-20. That holding is affirmed
here. In considering the Citibank Phase Two Assets above
' '
this Court found that sufficient evidence had been presented
to show that [Redacted] are agencies and instrumentalities of
Iran for the purposes of28 U.S.C. § 1603(b), and that finding
extends to the BNYM Phase Two Blocked Assets in which
those parties have an interest.
*12 According to Dr. Clawson's affidavit, it is common
knowledge among experts in international banking and
commerce, and it is his expert opinion, that [Redacted]
is owned by Iran, controlled by Iran, is an agency or
instrumentality of Iran, or is an alter-ego of Iran. (See
Clawson Aff. '1] 28.) In support of his opinion, Dr. Clawson
cites the SDN List and another online resource, both of
which have been independently verified by the Court. See
SDN List, supra note 6 (listing [Redacted] as subject to
sanctions); see also Wisconsin Project on Nuclear Arms
Control, Featured Iranian Entities: [Redacted], Iran Watch
(Last Modified Sept. 3, 2010) [Redacted] (discussing the
American sanctions to which [Redacted] is subject and the
UN resolutions discussing the entity's attempts to evade
sanctions).
Dr. Clawson's affidavit does not discuss [Redacted], which
was a party to BNYM blocked transfer number six. (See
Mechling Deel. Ex. 25 (listing [Redacted] as "other entity
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involved").) Though [Redacted] is listed as subject to
secondary sanctions on OFAC's SDN List, such evidence was
not presented by the Judgment Creditors. See SDN List, supra
note 6. However, the Judgment Creditors do present evidence
with respect to an entity that was also party to transfer number
six as the intended beneficiary of the transfer, [Redacted]
(See Mechling Deel. Ex. 25.) According to Dr. Clawson's
affidavit [Redacted] is owned by Iran, controlled by Iran, is
an agency or instrumentality of Iran, or is an alter-ego of
Iran. (See Clawson Aff. ~ 3 7.) As the Court has independently
verified, [Redacted] is on the SDN List. See SDN List, supra
note 6 (listing [Redacted] as subject to secondary sanctions).
Therefore, the Judgment Creditors have presented sufficient
evidence to show that an agency or instrumentality of Iran is
a party to wire transfer six.
This Court therefore finds that the Judgment Creditors have
presented sufficient evidence, through the affidavit of their
expert, Dr. Clawson, and independently-verifiable online
resources, that the entities associated with the BNYM Phase
Two Blocked Assets are agencies and instrumentalities oflran
sufficient to meet the requirements of28 U.S.C. § 1603(b).
4. SoGen Phase Two Blocked Assets
The Judgment Creditors seek a turnover of three blocked
assets held by SoGen (the "SoGen Phase Two Blocked
Assets"). (See Phase Two Mot. at 19.) One asset comprises
the proceeds of one blocked deposit account held in the name
of. (See id.; Mechling Deel., Ex. 27.) The other two assets
are blocked EFTs to which respectively, were parties. (See
Mechling Deel., Ex. 27.) SoGen took no position on the
ownership of any of the Phase Two Blocked Assets, and did
not oppose the Judgment Creditors' motion for turnover. (See
SoGen Opp. at 1.)
This Court held, in its Phase One Opinion, that [Redacted] are
agencies or instrumentalities oflran. See Levin L 2011 2011
WL 812032 at* 19-20. That holding is affirmed here. Further,
in Dr. Clawson's expert opinion, [Redacted] is a national bank
oflran and an agency or instrumentality oflran. (See Clawson
Aff. ~ 26). [Redacted] is also on OFAC's SDN List, a fact that
has been independently verified by the Court. See SDN List,
supra note 6 (listing all offices of [Redacted] worldwide as
subject to secondary sanctions).
*13 This Court therefore finds that the Judgment Creditors
have presented sufficient evidence, through the affidavit
of their expert, Dr. Clawson, and independently-verifiable
online resources, that the entities associated with the SoGen
Phase Two Blocked Assets are agencies and instrumentalities
of Iran sufficient to meet the requirements of 28 U.S.C. §
1603(b).
In sum, given the evidence presented by Judgment Creditors,
the record demonstrates that the entities that were party to
EFT transfers or deposit accounts which comprise the Phase
Two Blocked Assets are agencies or instrumentalities of Iran
as defined by 28 U.S.C. § 1603(b). The Court finds that
the Judgment Creditors' motion complies with C.P.L.R. §
5225(b ), as required by Federal Rule of Civil Procedure 69,
and the Judgment Creditors are entitled to turnover of the
Phase Two Blocked Assets.
IV. INTERESTS OF COMMERCIAL THIRD-PARTY
DEFENDANTS
Given that, under TRIA and FSIA § 1610(g), Phase Two
Blocked Assets are subject to attachment, the next issue to
address is the conflict between asserted ownership interests
of commercial third-party defendants and claims asserted by
the Judgment Creditors .14 In this case, the commercial thirdparty
Defendants have not presented an interest in the Phase
Two Blocked Assets, cognizable under TRIA and FSIA §
1610(g), which is superior to that of the Judgment Creditors.
Therefore, the Judgment Creditors hold the superior interest
to the Phase Two Blocked Assets.
The objective of the TRIA "is to give terrorist victims who
actually receive favorable judgments a right to execute against
assets that would otherwise be blocked." Smith ex rel. Estate
of Smith v. Federal Reserve Bank of New York, 346 F.3d 264,
271 (2d Cir.2003). Thus, "any evaluation under the TRIA of
the priority of interests in the [Phase Two Blocked Assets]
must begin with the understanding that 'terrorist victims'
holding judgments, as a group, must be first in line." Hausler
IL 845 F.Supp.2d at 569.
Further, this Court's Phase One Opinion held that FSIA
§ 1610(c) provides the procedure to be followed by
plaintiffs seeking to execute or attach the property of a
foreign sovereign or an agency or instrumentality of a
foreign sovereign. Levin L 2011 WL 812032 at *7. Here,
the Judgment Creditors hold valid writs of execution in
compliance with the procedural requirements of § 1610(c).
(See Mechling Deel. Exs. 3-4, 6-7, 9-10, 12-13, 15-16, 20-
23.)
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By contrast, commercial parties asserting a claim to blocked
assets pursuant to the statutory scheme of TRIA and FSIA
§ 1610 are not given priority over terrorism victims holding
valid judgments in attachment proceedings. Rather, the proper
avenue for redress for commercial third-party Defendants is
through OFAC's administrative procedures. See 31 C.F.R.
§ 501.806 (specifying "procedures for unblocking funds
believed to have been blocked due to mistaken identity");
Hausler II, 845 F.Supp.2d at 570 (noting that "Congress
drafted the TRIA against the backdrop of statutory and
regulatory provisions ... which require licenses to unblock;
this restriction suggests that the TRIA should be read in
consideration of these alternative opportunities for parties
without terrorism-related judgments to assert interests in
blocked assets"). If parties dispute OFAC decisions, they
may seek judicial review. See id. at 570 ( citing Zarmach Oil
Services v. U.S. Dep't of the Treasury, 750 F.Supp.2d 150
(D.D.C.2010)).
*14 Further, granting terrorism victims priority of interest
over third parties claiming an ownership interest in blocked
assets is consistent with the purpose of the TRIA. The
TRIA was implemented in order to "punish and impose a
heavy cost on those aiding and abetting the terrorists." 148
Cong. Rec. S11524-01 (daily ed. Nov. 19, 2002) (statement
of Sen. Harkin), 2002 WL 31600115. It would undermine
that purpose if, without successful utilization of OFAC's
administrative procedures, "foreign banks doing business
with the instrumentalities of a terrorist state were found to
have a superior interest in the frozen assets as compared to
that of a holder of a judgment against that very terrorist state."
Hausler IL 845 F .Supp.2d at 570.
Here, six commercial third-party Defendants have asserted
a claim to the EFTs to which they were parties. 15 All of
the commercial third-party Defendants were party to wire
transfers that were blocked by OFAC because one of the
parties to the transfer was on the SDN list. The proper
recourse for these commercial third-party Defendants is
through OFAC administrative procedures. 16 Of those six,
only two third-party Defendants have demonstrated an intent
to seek an unblocking of assets through the requisite OFAC
procedures, and only one has actually done so. ( Compare
[Redacted] Deel. '1] 11 (stating that the CB intends to apply to
the Office of Foreign Assets Control for a license authorizing
the release of blocked funds), with Letter from [Redacted] 1,
Apr. 15, 2013 (notifying the Court that the [Redacted] has a
pending application before OFAC for a license releasing the
blocked funds transferred to [Redacted] ). The inclusion in
this Order of funds pending before OFAC is conditioned upon
the denial of the OFAC license.
Because the Judgment Creditors are holders of valid
judgments eligible for execution under the TRIA, the
Judgment Creditors' joint interest is superior to the interests
of commercial third-party Defendants who have not resorted
to OFAC regulatory procedures.
A. Whether the Central Bank Assets Are Immune from
Execution
CB opposes this summary judgment motion with respect to
one blocked transfer in the amount of [Redacted]. (See CB
Opp. at 5 .) On August 31, 2009, CB directed JPMorgan to
implement a wire transfer in the amount of€233,716.00 to
an Iranian engineering firm with an account at [Redacted].
(See Deel. of [Redacted] 'I] 7, ("[Redacted] Deel."), Oct. 15,
2012, ECF No. 800.) On September 17, 2009, in accordance
with the payment order, JPMorgan debited CB's U.S. dollar
deposit account in New York in the sum of [Redacted] and
converted such funds to Euros at its U.K. branch for payment
to the Iranian recipient in accordance with CB's instructions.
(See Pollock Deel., Ex. A at p. 404--05.) On September 18,
2009, the U.K. JPMorgan branch recognized that [Redacted]
was an entity subject to OFAC blocking regulations, and the
assets were transferred into a frozen account. See 31 C.F.R. §
544.203; (See Pollock Deel. '1] 6.)
*15 Here, CB contests the attachment of the blocked
transfer. CB argues that, as a foreign central bank, (see
[Redacted] ), its funds are immune from execution under
FSIA § 1611(b)(l). CB argues that the central bank immunity
provided by this section preempts TRIA andFSIA § 1610(g).
(See CB Opp. at 6--9.) CB's argument fails. Even if CB's
assets did fall under the protection ofFSIA § 1611(b)(l), that
immunity is overridden by the subsequently enacted TRIA §
201 ( a).17 See Weininger, 462 F.Supp.2d at 457 ("TRIA, which
was enacted later in time than § 1611, overrides the immunity
conferred in§ 1611."); Peterson v. Islamic Republic of Iran,
No. 10 CV 4518(KBF), 2013 WL 1155576 (S.D.N.Y. Mar. 13,
2013) ("TRIA trumps the central bank provision in 28 U.S.C.
§ 1611(b)(2)."); Gates, 2013 WL 1337223.
i. The Interplay Between TRIA § 201 and 28 U.S.C. § 1611
The FSIA provides immunity from attachment and execution
of property to the property of a foreign central bank in
FSIA § 1611(b) (1).18 That section provides exceptions to
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waivers of sovereign immunity for foreign central banks
"notwithstanding the provisions of section 1610 of this
chapter." TRIA § 20l(a), in turn, authorizes attachment of
blocked assets of terrorist parties "notwithstanding any other
provision oflaw." Because the TRIA was codified as a note
to FSIA § 1610, CB argues that TRIA's waiver of immunity
is preempted by FSIA § 16ll(b)(l). (See CB Opp. at 9.)
However, the TRIA waiver controls because of the broad
language ofTRIA's "notwithstanding" clause, the more recent
enactment of the TRIA, and the remedial purpose of the
TRIA.
First, the TRIA uses broad language to preempt "any other
provision of law," while § 16ll(b) applies narrowly to
"the provisions of section 1610." In this District, Weininger
v. Castro held that the TRIA's broad language targets all
statutory exceptions to immunity. See 462 F.Supp.2d at
498 ("To the extent that a foreign country's sovereign
immunity potentially conflicts with Section 20l(a), the
'notwithstanding' phrase removes the potential conflict.")
( quoting Smith ex rel Smith, 280 F.Supp.2d. at 319); see
also Peterson, 2013 WL 1155576 at *8 ("TRIA's broad
language-'notwithstanding any other provision of law ... in
every case' -provides one basis pursuant to which a separate
'central bank' analysis becomes unnecessary.").
Further, to the extent TRIA § 20l(a) conflicts with FSIA §
16ll(b)(l), any conflict should be resolved in favor of the
TRIA because it was enacted after § 1611(b). See Weininger,
462 F.Supp.2d at 499. Congress is presumed to be aware of
its previous enactments when it passes a new statute. See
Vimar Seguors y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S.
528, 554 (1995) (citing Cannon v. Univ. of Chicago, 441 U.S.
677, 696-699 (1999)). The TRIA's "notwithstanding" clause
-enacted in 2002, well after FSIA § 16ll(b) was adopted
in 1976-thus preempts central bank immunity to the extent
it would apply. See Peterson, 2013 WL 1155576 at *25;
Weininger, 462 F.Supp.2d at 499; see also In re Ionosphere
Clubs, Inc., 922 F.2d 984, 991 (2d Cir.1990) ("[W]hen two
statutes are in irreconcilable conflict, [courts] must give effect
to the most recently enacted statute since it is the most recent
indication of congressional intent.")
*16 Finally, providing an exception to attachment and
execution for foreign central banks would frustrate the
remedial purpose of the TRIA. As discussed above, the
purpose of the TRIA is to "deal comprehensively with the
problem of enforcement of judgments issued to victims of
terrorism." Levin I, 2011 WL 812032 at * 17 (internal
citations omitted); see also Ministry of Def & Support for
the Armed Forces of the Islamic Republic of Iran v. Elahi,
556 U.S. 366, 369 (2009) (noting that the TRIA authorizes
"holders of terrorism related judgments against [ a terrorist
state] ... to attach [ that state's] assets that the United States has
blocked"). CB's arguement that foreign central banks have an
"absolute immunity," (CB Opp. at 9), would leave judgment
creditors with valid judgments against state sponsors of terror
without recourse if assets happened to be held in the account
of a foreign central bank, a result plainly inconsistent with the
remedial purpose of the statute.
The language of TRIA, the purpose of its enactment, and
its subsequent enactment to § 16ll(b)(l), all indicate that
the TRIA waiver of immunity must control when the two
provisions are in conflict. Therefore, central bank immunity
does not preempt TRIA and CB funds cannot be considered
absolutely immune under FSIA § 16ll(b)(l).
V. Whether the Judgment Creditors Are Entitled to
Interest
The Code of Federal Regulations ("C.F.R.") mandates that
financial institutions holding "blocked assets" must place
those assets in "an interest-bearing account," specifically
"a blocked account in a U.S. financial institution earning
interest at rates that are commercially reasonable for the
amount of funds in the account." 31 C.F.R. § 595.203(a)(l);
§ 595.203(b ).
The Judgment Creditors contend that this provision obligated
the Banks to hold the Phase Two Blocked Assets in accounts
that earned, "at a minimum, [interest] equal to rates being
paid by [the Banks] to other depositors on deposits or
instruments of comparable size and maturity from the date of
blocking until" a disposition on those assets is reached. (See J.
Creditors' Stipulation To Issues Presented by Mot. Summ. J.
7.) The Judgment Creditors argue that they are entitled to the
payment of such interest, regardless of whether it was actually
earned on the Phase Two Blocked Assets. (Id.)
SoGen, with Citibank joining, 19 argues that the "judgment
creditors succeed only to rights of their judgment debtor,
and Iran, the judgment debtor here, has no claim for
interest on blocked accounts. Because Iran could not demand
anything beyond the money that is actually in the blocked
accounts, neither can the judgment creditors."20 (SoGen Opp.
at 1-3 (citing Karaha Bodas Co., L.L.C. v. Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, 313 F.3d 70,
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83 (2d Cir.2002) (holding that "a party seeking to enforce a
judgment 'stand[s] in the shoes of the judgment debtor'" and
"cannot 'reach ... assets in which the judgment debtor has no
interest' "); MF Hickey Co. v. Port of New York Auth., 258
N.Y.S.2d 129, 130 (lstDep't 1965); CPLR § 5225(b); § 5227.)
SoGen argues that this same principle applies to garnishees,
stating that "if a judgment debtor could not bring a particular
claim against a garnishee, then neither can its creditors." (Id.
at 3 (citing United States v. First Nat'[ City Bank, 321 F.2d 14,
19 (2d Cir.1963); Smith v. Amherst Acres, Inc., 350 N.Y.S.2d
236 (4th Dep't 1973).)
*17 SoGen bases its argument on two flawed contentions:
first, that Iran has no claim to the interest that SoGen
admits has been accruing on the blocked accounts; and
second, that the Judgment Creditors' interest demand is
founded on an OFAC regulation, 31 C.F.R. § 595.203, which
does not create a private right of action for victims of
terrorism to sue to obtain the interest that OFAC mandates the
garnishee banks accrue. As the Judgment Creditors correctly
point out, SoGen's interpretation of the law renders the
OFAC regulation meaningless: the garnishee banks would
be compelled to maintain blocked assets in interest-bearing
Footnotes
accounts, but that interest would accrue for no one's benefit;
neither the judgment debtor nor the judgment creditor would
have a right to sue for it. (See J. Creditors' Reply 22, ECF
No. 825.) There is nothing in the underlying statutes or the
regulations that indicates that the interest accumulation was
intended to benefit the banks instead of judgment creditor
victims of terrorism.
VI. CONCLUSION
For the reasons stated above, the Judgment Creditors' motion
for partial summary judgment with respect to the Phase Two
Blocked Assets is granted. The Banks are hereby ordered to
tum over the Phase Two Blocked Assets with accrued interest
to the Judgment Creditors in accordance with the protocol
designated by the Judgment Creditors.
SO ORDERED.
All Citations
Not Reported in F.Supp.2d, 2013 WL 5312502
1 In the present motion, the Judgment Creditors seek turnover of approximately $4.7 million or 82% of the Phase Two
Blocked Assets. (See Tr. of Aug. 16, 2012 Hr'g ("8/16/12 Tr.") at 7, ECF No. 777.) According to the Judgment Creditors,
the remaining Phase Two Blocked Assets are not ripe for summary judgment at this time. (Id. at 3; see also Letter from
Richard M. Kremen ("8/16/12 Judgment Creditors' Let.") at 2.)
2 The Court assumes familiarity with the factual background and prior history of this case. A more complete description of
the case may be found in the Court's decision regarding the Phase One Blocked Assets. See Levin v. Bank of New York,
No. 09 CV 5900, 2011 WL 812032, at* 1 (S.D.N.Y. Mar. 4, 2011) ("Levin/").
3 Unlike the other Banks, SoGen does not oppose turnover of the Phase Two Blocked Assets. (See SoGen Opp. at 1.)
Instead, SoGen's opposition papers only raise the issue of whether the Judgment Creditors are entitled to interest on the
assets for the time spanning the date of blocking to the date of turnover. (See id.) Citibank joined SoGen's opposition
on this point, which was not raised by the other Banks; Citibank also opposes turnover of the electronic fund transfers
("EFTs"). (See Citibank Opp. at 2.)
4 Citibank's opposition memorandum of law does not contain any case citations or argument of its own. (See Citibank
Opp.) Instead, Citibank states only that "it hereby joins in the memoranda [sic] of law filed by [SoGen] ... to the extent that
it raises the issue of the appropriate scope of relief with respect to the payment of interest on blocked accounts" and also
joins in the memorandum of law filed "by the [JPMorgan] and [BNYM parties] to the extent it draws the Court's attention
to the recent decisions, filings and pending appeals on the issue of electronic fund transfers cited therein." (Id. at 1-2.)
5 The Banks also named as third-party Defendants other Iranian Judgment Creditors who the Banks had reason to believe
might assert a claim against the Phase Two Blocked Assets. ( See J. Creditors' Statement Pursuant to Local Rule 56.1
("J. Creditors' 56 .1 Stmnt.") ,i,i 38-39, ECF No. 767.) The Banks named and served the Peterson Judgment Creditors,
Rubin Judgment Creditors, Weinstein Judgment Creditors, Owens Judgment Creditors, Valore Judgment Creditors,
Sylvia Judgment Creditors, Bland Judgment Creditors, Brown Judgment Creditors, Murphy Judgment Creditors, and
Bennett Judgment Creditors. (See id. ,i 39.) The Peterson Judgment Creditors waived any claim with respect to the
Phase Two Blocked Assets and were dismissed from this action on December 12, 2012. ( See id. ,i 40; Letter from Liviu
Vogel ("10/28/11 Vogel Ur.") 1, ECF No. 491; Stipulation, Order, & J. of Dismissal as to JPMorgan Assets 1, Dec. 12,
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2013 WL 5312502
2011, ECF No. 561: Stipulation, Order, & J. of Dismissal as to BNYM Assets 1, Dec. 12, 2011, ECF No. 562; Stipulation,
Order, & J. of Dismissal as to SoGen Assets 1, Dec. 12, 2011, ECF No. 564.) The Rubin Judgment Creditors and the
Weinstein Judgment Creditors failed to respond and are in default. ( See Mechling Deel. ,i 41.) The Brown and Bland
Judgment Creditors, the Owens Judgment Creditors, and the Murphy Judgment Creditors have answered the third-party
complaints but asserted no claims or rights to the Phase Two Blocked Assets. (See Brown & Bland Answer to BNYM
Third Party Compl., ECF No. 439; Brown & Bland Answer to JPMorgan Third Party Compl., ECF No. 440; Owens Answer
to BNYM Third Party Compl., ECF No. 457; Owens Answer to JPMorgan Third Party Compl., ECF No. 458; Owens
Answer to Citibank Third Party Compl., ECF No. 460; Brown & Bland Answer to Citibank Third Party Compl., ECF No.462;
Owens Answer to SoGen Third Party Compl., ECF No. 485; Murphy Answer to Citibank Third Party Compl., ECF No.732;
Murphy Answer to JPMorgan, BNYM, SoGen Third Party Compl., ECF No. 737.) The Bennett Judgment Creditors filed
an answer to the JPMorgan third-party complaint and counterclaimed against JPMorgan but did not counterclaim for a
turnover of the Phase Two Blocked Assets. (See Bennett Answer to Third Party Compl. & Countercls. ,i,i 65-82, ECF No.
716.) The Valore Judgment Creditors filed answers and counterclaimed against JPMorgan, BNYM, and Citibank. (See
Valore Answer to Citibank Third Party Compl. & Countercls ("Valore Citibank Answer''), ECF No. 466; Valore Answer to
BNYM Compl. & Countercls. ("Valore BNYM Answer''), ECF No. 489; Valore Answer to JPMorgan Compl. & Countercls.
("Valore JPMorgan Answer"), ECF No. 490.) The Valore Judgment Creditors' counterclaim is based upon, inter alia, writs
of execution allegedly delivered to the U.S. Marshal on October 5, 2011. (See Valore Citibank Answer ,i 75.) The Valore
Judgment Creditors have not joined this motion for summary judgment, nor have they submitted any evidence to support
their alleged compliance with 28 U.S.C. § 1610(c). In any case, this writ of execution is later in time than the writs of
execution obtained by the Judgment Creditors who are, collectively, the moving parties in this summary judgment motion,
and any claim the Valore Judgment Creditors have is therefore inferior. See Levin I, 2011 WL 812032 at *8-12.
6 Since January 1984, Iran has been designated a "state sponsor of terrorism" under the Export Administration Act, and
is a "terrorist party" as defined under TRIA § 201 (d)(4). See Weinstein v. Islamic Republic of Iran, 609 F.3d 43, 48
(2d. Cir.201 0); Export Administration Act § 2405, 50 App. U.S.C.A §§ 2401 - 20 (West 2004). Further, certain entities
connected to Iran are designated by OFAC to be "agencies and instrumentalities of Iran" and are placed on its Specially
Designated Nationals List ("SDN List"). See United States Treasury Website, Specially Designated Nationals List, http://
www.treasury.gov/reso urce-center/sanctions/SDN-LisVPages/default.aspx (last updated Sept. 6, 2013) ("SDN List").
Assets of entities placed on the SDN List must be blocked pursuant to OFAC's sanctions regulations and Presidential
Executive Orders. See, e.g., Exec. Order No. 13,599, 77 Fed.Reg. 6,659 (Feb. 5, 2012); 31 C.F.R. § 595.204 (2013).
7 In its Phase One Opinion, the Court ordered the Defendant Banks to turn over the Phase One Assets to the Accosta and
Greenbaum Creditors, but not the Levin and Heiser Creditors. Levin I, 2011 WL 812032, at *21 . The Court concluded that
"[d]ue to their failure to obtain a court order under 28 U.S.C. § 161 0(c) prior to serving the writs of execution on the New
York Banks," the Levins writs were invalid. Id. In addition, the Court held that the Heiser Creditors' writ was "not capable of
attaching the Bank of New York assets located in New York state because it was issued by a Maryland court and served
on the Bank of New York in Maryland." Id. Accordingly, the Court held that only the Accosta and Greenbaum Creditors
were entitled to a grant of partial summary judgment with respect to the Phase One Assets. Id. As for the Phase Two
Blocked Assets, it is the Court's understanding that, as part of settlement discussions following the Phase One Opinion,
the Judgment Creditors have worked out priority of interest amongst themselves. ( See 8/16/12 Tr. at 15-16.)
8 This approach was followed by a subsequent D.C. District Court decision by Judge Lamberth in Peterson v. Islamic
Republic of Iran, No. 01-2094(RCL), 2013 WL 1460188 (D.D.C. Apr. 11, 2013), appeal docketed No. 13-7086 (D.C.Cir.
May 28, 2013), which held that a garnishee bank, HBUS, had committed no sanctionable conduct when it failed to disclose
the existence of three blocked EFTs to judgment creditors. The garnishee bank had averred, in interrogatories, that it
was not "indebted to" defendants (in that case, agencies and instrumentalities of Iran) and did not possess any of their
"goods, chattels, or credits." The court held that sanctions were not appropriate because the statements were legally
accurate and defendants had no possessory interest in the EFTs.
9 The United States government, in an amicus brief before the Second Circuit and a statement of interest before the Heiser
Court, argues that both TRIA and FSIA § 1610(g) require an ownership interest. (See Heiser Statement of Interest;
Brief for the United States as Amicus Curiae at 15, JPMorgan Chase, N.A. v. Hausler, No. 12-1264 ("Hausler Amicus
Br.").) This Court has never held otherwise, although the Phase One Opinion held, and its holding is affirmed here,
that the nature of that ownership interest is defined by the OFAC regulations rather than by reference to state law. The
government goes on to argue for the strategic importance of allowing some assets blocked pursuant to OFAC regulations
to be unattachable. In part, the government argues that these blocked assets are used for leverage for international
negotiations. (See Hausler Amicus Br. at 23.)
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2013 WL 5312502
This Court has no statement of government interest before it, although the Executive Branch was invited to participate in
this action. (See 12/11/09 OFAC Ur.; 12/11/09 State Dept. Ur.; Tr. 6/21/2011 at 8-9; Tr. 11/13/12 at 4-5.) Its statements
of interest in separate actions will be accorded no deference. See Republic of Altmann v. Austria, 541 U.S. 677, 701-2
(2004) (rejecting the United States government's interpretation of FSIA when it is a matter of "pure question of statutory
construction ... well within the province of the Judiciary" and finding that the United States' views "merit no special
deference"); Hausler I, 740 F.Supp.2d at 537 (noting that "[c]ourts must presume that a legislature says in a statute what
it means and means in a statute what it says there, notwithstanding any contrary interpretation by the Executive Branch").
Any statement from the Executive Branch submitted with respect to the TRIA should be considered suspect, given that
Congress' passage of TRIA was over the objection of the Executive Branch and for the purpose of rendering blocked
assets attachable. See In re Islamic Republic of Iran Terrorism Utig., 659 F.Supp.2d 31, 58 ("[T]he TRIA appears to
represent something of a victory for these terrorism victims-whose interests have been most vigorously advanced by
members of Congress-over the longstanding objections of the Executive Branch.").
10 28 U.S.C. § 1610(9) provides:
(g) Property in certain actions.-
(1) In general.-Subject to paragraph (3), the property of a foreign state against which a judgment is entered under
section 1605A, and the property of an agency or instrumentality of such a state, including property that is a separate
juridical entity or is an interest held directly or indirectly in a separate juridical entity, is subject to attachment in aid of
execution, and execution, upon that judgment as provided in this section, regardless of-
(A) the level of economic control over the property by the government of the foreign state;
(B) whether the profits of the property go to that government;
(C) the degree to which officials of that government manage the property or otherwise control its daily affairs;
(D) whether that government is the sole beneficiary in interest of the property; or
(E) whether establishing the property as a separate entity would entitle the foreign state to benefits in United States
courts while avoiding its obligations.
(2) United States sovereign immunity inapplicable.-Any property of a foreign state, or agency or instrumentality of a
foreign state, to which paragraph (1) applies shall not be immune from attachment in aid of execution, or execution,
upon a judgment entered under section 1605A because the property is regulated by the United States Government by
reason of action taken against that foreign state under the Trading With the Enemy Act or the International Emergency
Economic Powers Act.
(3) Third-party joint property holders.-Nothing in this subsection shall be construed to supersede the authority of a
court to prevent appropriately the impairment of an interest held by a person who is not liable in the action giving rise
to a judgment in property subject to attachment in aid of execution, or execution, upon such judgment.
28 U.S.C. § 1610.
11 FSIA § 161 0(g) was one of a series of amendments made to the FSIA in 2008 after Congress enacted TRIA in 2002; the
2008 amendments revised the immunity provisions related to terrorist states, created an express cause of action against
state sponsors of terrorism that engaged in terrorist acts, and created FSIA § 1610(9), the execution provision. See
National Defense Authorization Act for Fiscal Year 2008, Pub.L. No. 110-181 § 1083(a)(1) & (b)(3)(D) (2008) (codified at
28 U.S.C. §§ 1605A & 1610(9)). In relevant part, FSIA § 1610(9) permits judgment creditors holding judgments entered
under § 1605A, as the Judgment Creditors in this action are, to attach "the property of a foreign state against which a
judgment is entered ... and the property of an agency or instrumentality of such a state."
12 28 U.S.C. § 1603(b) provides:
For the purposes of this charter ...
(b) An "agency or instrumentality of a foreign state" means any entity(
1) which is a separate legal person, corporate or otherwise, and
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership
interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (e) of this title, nor created
under the laws of any third country.
28 U.S.C. § 1603.
13 [Redacted]
14 The Levins, Greenbaum, Acosta, and Heiser Judgment Creditors have entered into a confidential settlement agreement
resolving their dispute regarding priority, as between them, to the Blocked Assets at issue in this matter and providing
for the distribution of proceeds therefrom. (See Mechling Deel. ,i 38.)
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2013 WL 5312502
15 Three commercial third-party Defendants named in the Citibank third-party complaint-the [Redacted]-have asserted
claims to the proceeds of EFTs to which each was a party. (See [Redacted] ) One commercial third-party defendant
named in the BNYM third-party complaint-[Redacted]-asserted a claim to the wire to which it was a party. ( See Answer
to Am. & Supplemental Third-Party Compl. Of BNYM [Redacted]"), ECF No. 521.) Two commercial third-party defendants
named in the JPMorgan third-party complaint-CB, whose arguments are addressed above, and [Redacted]-asserted
a claim to the wires to which they were parties. (See Central Bank of [Redacted] Answer to Additional Am. Third-Party
Compl. of JPMorgan Chase Parties ("CB Answer"), ECF No. 655; Mechling Deel., Ex. 26 (referencing a Jan. 22, 2012
letter submitted to counsel from [Redacted] asserting a claim).)
16 CB argues that its blocked transfer is distinguishable from the other EFTs considered here because its transfer was
blocked after CB sent a payment order to JPMorgan, where CB's deposit account was located, but before the transfer
reached an intermediary bank. (See CB Opp. at 12.) The beneficiary bank to which the transfer was directed was
[Redacted], an entity whose assets are blocked by OFAC. ( See Deel. of Richard L. Pollock ,i 6 ("Pollock Deel."), Oct. 15,
2012, ECF No. 802.) Upon discovering that a party to the transfer was subject to OFAC blocking regulations, JPMorgan
was legally required to transfer the funds to a blocked account. See 31 C.F.R. § 544.203. To the extent that CB contests
that the transfer was improperly blocked by OFAC, the proper procedure is to apply for a license from OFAC. Although
CB has stated that it "intends" to seek such a license, there is no evidence before this Court that it has actually done
so. (See [Redacted]) Until such time as OFAC grants such a license, there is no reason to doubt that the assets were
properly blocked in accordance with OFAC blocking regulations. Since this Court affirms its Phase One Opinion holding
that TRIA § 201 (a) "indicate[s] that Congress intended all blocked assets be available for attachment by victims of terror,"
CB's assets are properly considered as subject to attachment here. Levin I, 2011 WL 812032, at *18.
17 Funds deposited in a bank in the United States may benefit from central bank immunity if the funds belong to a foreign
central bank and are held for the bank's own account. NML Capital Ltd. v. Banco Central de la Republica Argentina, 622
F.3d, 172, 194 (2d Cir.2011 ), cert denied, 133 S.Ct. 23 (2012). Here, Judgment Creditors allege that CB's transfer may
not benefit from central bank immunity because it was in transit to [Redacted] when it was blocked, (see Pollock Deel.,
Ex. A at p. 404--05), not sitting in the deposit account of CB, as CB alleges (see CB Opp. at 12). There is no need to
reach this issue here, because TRIA trumps central bank immunity in any event.
18 Section 1611 (b)(1) of the FSIA states that:
(b) Notwithstanding the provisions of section 161 O of this chapter, the property of a foreign state shall be immune from
attachment and from execution, if-
(1) the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or
authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execution, or
from execution, notwithstanding any withdrawal of the waiver which the bank, authority or government may purport to
effect except in accordance with the terms of the waiver ...
28 U.S.C.A. § 1611 (West).
1 9 See note 4 supra.
20 Nevertheless, SoGen asserts that it "complies with OFAC regulations requiring payment of interest [on blocked assets]
at a 'commercially reasonable' rate" by paying interest on blocked accounts "on the same basis as ... similar commercial
accounts." (Id. at 2.) SoGen still contests the Judgment Creditors' right to that interest, however. (Id.) In addition, SoGen
asserts that enforcing the Judgment Creditors' demand for interest equal to what SoGen pays "other depositors" would
require "further fact and expert discovery and evidentiary hearings" that would be "an extraordinary waste of judicial and
party resources over, at most, a few thousand dollars." (Id.) This argument is one for the opposing parties to resolve
between themselves.
End of Document © 2021 Thomson Reuters. No claim to original U.S.
Government Works.
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ANNEX 332

Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 1 of 14
EXHIBIT 1
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 2 of 14
09/16/20li 15:32 FAX ~i2 805 7917 Hon. Rubert P. Patterson (©003/017
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------· ---· ---·····-· ••••••••••••••••••••••••••••• -------X
JEREMY LEVIN and DR. LUCILLE LEVIN,
Plaintiffs,
-against-
THE BANK OF NEW YORK MELLON,
JPMORGAI\ CHASE, N.A., SOCIETE
GENERALE and CITIBANK, N.A.,
Defendants.
--- ------·-••••• ···--·····-... ---------·······-···-•··--·-·---X
(FILED PARTIALLY UNDER
SEAL DUE TO CONFIDENTIAL
INFORMATION PER ORDER
DATED JANUARY 21, 2010)
Case No. 09 Civ. 5900 (RPP)
AMENDED SCHEDULING ORDER (I) AUTHORIZING
ADDITIONAL PLEADINGS AND (II) GOVERNING AND SCHEDULING
:FURTHER PROCEEDINGS IN CONNECTION WITH PHASE TWO
WHEREAS, these proceedings were commenced by Jeremy Levin and Dr. Lucille Levin
(the "Levin Plaintiffs") filing a summons and complaint in this Court on June 26, 2009;
WHEREAS, the Levin Plaintiffs' complaint seeks relief in the nature of an order
directing defendants Citibank, N.A. ("Citibank"), JPMorgan Chase & Co. and JPMorgan Chase
Bank, N.A. (collectively, "JPMorgan Chase Bank"), The Bank of New York Mellon ("BNYM"),
and Societe Generale ("SoGen") ( collectively, the "Defendant Banks") to turn over to the Levin
Plaintiffs property, including but not limited to, ce1iain blocked assets within their possession,
custody or control that are subject to execution in satisfaction of the Levin Plaintiffs' judgment
against the Islamic Republic of Iran (''Iran") (the "Blocked Assets");
WHEREAS, the Defendant Banks answered the complaint and, pursuant to Orders of this
Court dated January 11, March 18, May 26 and December 10, 2010, commenced third-party
interpleader actions in order to bring before the Court as third-party defendants certain persons
who may possess an interest in certain of the Blocked Assets designated for inclusion in Phase
Annex 332
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09/16/2011 15:32 FAX 2L2 805 7917 Hon. Robert P. Patterson 14! 004/017
One of these proceedings and identified in the Levins' Motion for Partial Summary Judgment on
Claims for Turnover Order Phase One Assets filed on July 13, 2010 (the "Phase One Blocked
Assets"), or who may have been parties to the wire transfers or other transactions relating to the
Phase One Blocked Assets;
WHEREAS, among other parties, the judgment creditors of Iran known in these
proceedings as the Greenbaum, Acosta, and Heiser Judgment Creditors were interpled as thirdparty
defendants by the Defendant Banks in connection with certain claims these parties had
asserted witr. respect to the Blocked Assets, including, but not limited to, the Phase One Blocked
Assets, and they each filed answers and counterclaims in this proceeding;
WHEREAS, the Court entered an order on January 25, 2010, and subsequent orders on
April 12 and June 3, 2010 (the "Service Orders"), authorizing simplified or alternate means for
the service of third-party complaints in this proceeding;
WHEREAS, the Court entered a Confidentiality Stipulation and Order among certain
parties to this proceeding, which was so ordered on October 26, 2009, and entered orders
modifying and expanding the scope of this order on January 11 and August 6, 2010 (collectively,
the "Confidentiality Order"), and the Court entered an Order on January 21, 2010 (Docket No.
42) (the "Unsealing Order"), unsealing the file in this case, which requires that documents
containing certain type of information nevertheless be filed under seal, with redacted versions
filed electronically;
WHEREAS, upon the Levin Plaintiffs' and the Greenbaum, Acosta, and Heiser Judgment
Creditors' respective motions for paiiial summary judgment and turnover of the Phase One
Blocked Assets, the Court determined, by Opinion and Order dated January 20, 2011, and
amended on March 4, 2011, that the Greenbaum and Acosta Judgment Creditors held a priority
-2-
Annex 332
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interest in and were entitled to turnover of the Phase One Blocked Assets held by defendant
Citibank, and that the Acosta Judgment Creditors held a priority interest in and were entitled to
turnover of the Phase One Blocked Asset held by defendant JPMorgan Chase;
WHEREAS, the Levin Plaintiffs filed an appeal of the January 20 and March 4, 2011
Orders;
WHEREAS, thereafter the Levin, Greenballlll, Acosta, and Heiser Judgment Creditors
reached a settlement that was approved by the Cou1t, and the Levins dismissed their appeal;
WHEREAS, upon the joint motion for partial summary judgment of the Levin Plaintiffs
and the Greenbaum, Acosta, and Heiser Judgment Creditors (collectively, the "Judgment
Creditors"), this Court determined, by Order and Judgment dated June 21, 2011, and corrected
on July 11, '.W 11, that the Judgment Creditors collectively possessed a priority interest in, and
were entitled to turnover of, the remainder of the Phase One Blocked Assets held by defendants
BNYM and SoGen;
WHEREAS, to date, all of the Phase One Blocked Assets have been turned over to the
Judgment Creditors by the Defendant Banks, other than interest due on the Phase One Blocked
Assets held by SoGen;
WHEREAS, all claims to the Phase One Blocked Assets having been resolved other than
payment of the interest due on the Phase One Blocked Assets held by SoGen, the Defendant
Banks still have in their possession, custody or control additional funds, Blocked Assets and
other blocked accounts and wire transfers to which the Judgment Creditors have asserted claims
(the "Phase Two Blocked Assets"), which are more specifically identified in the annexed
Schedule A to trus Order;
-3-
Annex 332
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WHEREAS, other persons or entities, including, but not limited to, other judgment
creditors of Iran and/or parties associated with the blocked accounts and/or wire transfers that
make up the Phase Two Blocked Assets, may have claims to the Phase Two Blocked Assets,
which claims may be adverse to the Judgment Creditors' claims; and
WHEREAS, this Court has the authority under its inherent powers to manage its
proceedings efficiently, including establishing procedures for the giving of notice and procedures
by which third parties may participate in these proceedings;
NOW, THEREFORE, it is hereby ORDERED as follows:
I. Each of the Defendant Banks is hereby authorized to file not more than two
additional, amended and/or supplemental third-party complaints (the "Phase Two Interpleader
Complaints") against the following third-party defendants:
(a)
(b)
(c)
(d)
judgment creditors of Iran and other plaintiffs in actions against Iran who
have served a writ of execution,.writ of garnishment, restraining notice,
notice oflis pendens or other legal process on any of the Defendant Banks
with regard to, or affecting, the Phase Two Blocked Asset that are
identified on Schedule A, hereto (the "Iran Plaintiff Parties");
account holders of any blocked deposit accounts held by the Defendant
Banks that are identified on Schedule A, hereto, and other persons who
the Defendant Banks reasonably believe may have an interest in or claim
to the funds in any such account (the "Phase Two Blocked Account
Parties");
originators, beneficiaries and bank parties to any blocked wire transfer
identified on Schedule A, hereto, and other persons referred to in any wire
transfer instructions and who the Defendant Banks reasonably believe may
have an interest in or claim to the proceeds of any such wire transfer (the
"Phase Two Blocked Wire Transfer Parties"); and
the Islamic Republic ofiran, the Iranian Ministry of Information and
Security, the Iranian Revolutionary Guard Corp and the Iranian Islamic
Revolutionary Guard Corp (the "Iran Parties").
-4-
Annex 332
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The Defendant Banks shall file the Phase Two Interpleader Complaints on or before September
21 , 2011.
2. The Defendant Banks are hereby authorized and directed to serve the Phase Two
Interpleader Complaints, together with a copy of this order, on any third-party defendants or
other parties to this proceeding who have previously appeared in this proceeding, by e-mail and
regular mail upon the respective counsel of record who have appeared for such parties in this
action, at their addresses and e-mail addresses listed on the docket in this action, on or before
September 26, 2011. The Judgment Creditors and all other parties who have signed the
Confidentiality Order shall be served with the Phase Two Interpleader Complaint in unredacted
form, and other parties shall be served with the Phase Two Interpleader Complaint in redacted
fonn to the extent necessary to protect the confidentiality of information covered by the
Confidentiality Order. Such service shall constitute good and sufficient service of process upon
such parties, and the Defendant Banks shall not otherwise be required to serve third-party
summonses or other legal process upon any such party.
3. The Judgment Creditors and any other third-party defendants in this proceeding
who have filed cross-claims or counterclaims herein are hereby authorized to file and serve
amended complaints, or amended answers with amended cross-claims and counterclaims against
the Defendant Banks, no later than 14 days after the date Defendant Ban1cs serve them with the
Third Party Complaint, and all parties to this action may use any method of service refe1Ted to in
this Order for any purpose.
4. The Defendant Banks are hereby authorized and directed to serve the Phase Two
Interpleader Complaints, together with a third-party summons and a copy of this order, on any
third-party defendants who are Iran Plaintiff Parties, but who have not appeared in this
-5-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 7 of.14
09/16/2011 15:34 FAX 212 805 7917 Hon. Robert P. Patterson ~008/017
proceeding, by regular mail and e-mail (if their e-mail addresses are known) upon the respective
counsel of record for such third-party defendants in their action against Iran, at their addresses
and e-mail addresses listed on the complaint in their action against Iran, on or before September
26, 2011. If the plaintiffs in Khaliq v. Republic of Sudan, 10 Civ. 0356 (JDB) (D.D.C.), Owens
v. Republic of Sudan, No. Civ.A. 01-2244 (JDB) (D.D.C.) and/or Mwila v. Islamic Republic of
Iran, 08 Civ. 1377 (JDB) (D.D.C.), are named as third-party defendants in the Phase Two
Interpleader Complaints, process may be served upon their counsel at the following mail and email
addresses for the following attorneys, who signed the complaints in those actions and the
notices of lis pendens:
Annie P. Kaplan, Esq.
Fay Kaplan Law, P.A.
777 Sixth Street NW, Suite 410
Washington, DC 20001
E-mail address: [email protected]
Jane Carol No1man, Esq.
Broad & Norman PLLC
777 Sixth Street NW, Suite 410
Washington, DC 20001
E-mai~ address: [email protected]
Thomas FortW1e Fay, Esq.
Fay Kaplan Law, P.A.
777 Sixth Street NW, Suite 410
Washington, DC 20001
E-mail address: [email protected]
If plaintiffs in Weinstein v. Islamic Republic of Iran, Civil Action No. 00-2601 (RCL)
(D.D.C.), are named as third-party defendants in the Phase Two Interpleader Complaints, process
may be served upon their coW1sel at the following mail and e-mail addresses for the following
attorneys, who have appeared for tho~-e plaintiffs in that case and/or related cases:
-6-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 8 of 14
09/16/2011 15:34 FAX 2i2 805 7917 Hon, Rubert P. Patt1:,rson
Jeffrey A. Miller, Esq.
Westennan Ball Ederer Miller & Sharfstein LLP
1201 RXRPlaza
Uniondate, NY 11556
E-mail: j [email protected]
Robert J. Tolchin, Esq.
The Berlanan Law Office, LLC
111 Livingston Street, Suite 1928
Brooklyn, NY 11201
E-mail address: [email protected]
@io09/017
Such service shall constitute good and sufficient service of process upon such parties, and the
Defendant Banks shall not otherwise be required to serve summonses or other legal process upon
any such party.
5. All third-party defendants served pursuant to paragraph 2 of this Order shall file
their answern or other responsive papers to the Phase Two Interpleader Complaints within the
time specified to file an answer to an amended complaint by Rule 15 of the Federal Rules of
Civil Procedlll'e (hereinafter citations to "Rule_" shall refer to these Rules), and all third-party
defendants served pursuant to paragraph 4 of this Order shall file their answers or other
responsive papers to the Phase Two Interpleader Complaints within the time specified to file an
answer to a complaint by Rule 12. Extensions of time will not be granted except on the consent
of one of the counsel for the Judgment Creditors or for good cause shown.
6. By September 21, 2011 the Defendant Banks shall provide to the Judgment
Creditors' counsel the best contact information available, including, to the extent possible, the
full name, address, telephone number(s), facsimile number(s), name of suitable senior person for
service by Federal Express or DHL, and appropriate email address(es) (collectively, the "Contact
Infmmation"), of any and all Phase Two Blocked Account Parties and Phase Two Blocked Wire
Transfer Par:ies. The address information may provide for the service of an originator or
-7-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 9 of 14
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beneficiary of a wire transfer, or any other non-bank person or entity involved in a wire transfer,
in care of that person's or entity's bank, so as to permit service pursuant to paragraph 5 of the
Service Order entered herein on January 25, 2010.
7. The Judgment Creditors shall be responsible for (a) preparing third-party
summonses to all third-party defendants who are either Phase Two Blocked Account Parties or
Phase Two Blocked Wire Transfer Parties; (b) serving the Phase Two Interpleader Complaints,
along with third-paiiy summonses and copies of this Comi's ECF Rules, the Honorable Judge
Robe11 Patte.rson's Individual Practices, the order referring this case to Magistrate Judge
Dolinger, this. Order, the Unsealing Order entered in this case on January 21, 2010 and any of the
Service Orders pursuant to which service is being made ( collectively, the "Phase Two Service
Documents") upon all Phase Two Blocked Account Parties and Phase Two Blocked Wire
Transfer Parties named in such pleading and for which Contact Information sufficient for service
according to this Order has been provided by the Defendant Banks; and (c) redacting such
documents so as to disclose to the Phase Two Blocked Account Parties and the Phase Two
Blocked Wire Transfer Parties only Confidential Info1mation (using that term as it is defined in
the Confidentiality Order) that relates to blocked deposit accounts and blocked wire transfers that
involved or relate to that party. Except as provided in paragraph 9 hereof, the Judgment
Creditors are authorized to serve the Phase Two Service Documents in any manner previously
authorized by this Court, including, but not limited to, any method of service authorized by any
of the Service Orders, including, but not limited to, the Order entered herein on January 25,
2010. The Judgment Creditors are further hereby authorized to serve the Phase Two Service
Documents upon the Phase Two Blocked Account Holders and Phase Two Blocked Wire
Transfer Parties based upon the Contact Information provided to the Judgment Creditors '
-8-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 10 of 14
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counsel in accordance with paragraph 5 of this Order. Service in accordance with the provisions
of this paragraph shall be deemed to satisfy all of the requirements for service imposed by the
Foreign Sovereign Immunities Act of 1976, 28 U.S.C. § 1602, et seq. (the "FSIA"), the Federal
Rules of Civil Procedure, the New York Civil Practice Law and Rules and all requirements of
due process of law and shall constitute valid, sufficient and binding service on the third-party
defendants.
8. The Judgment Creditors shall serve any Phase Two Blocked Account Pruiies
and/or Phase Two Blocked Wire Transfer Pmties named as third-party defendants in the Phase
Two Interpleader Complaint and residing outside of the United States in nation states subscribing
to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil
and Commercial Matters (the "Hague Service Convention") pursuant to such Hague Service
Convention. In instances where a foreign state requires documents being served pursuant to the
Hague Service Convention to be translated into a language other than English and served through
a Central Authority, the Judgment Creditors shall only be required to serve the complaint, with
exhibits, the third-party summons and the Phase Two Interpleader Complaint, with exhibits, and
translations thereof, rather than all of the documents specified in paragraph 7 of this Order.
9. Notwithstanding paragraph 7 of this Order, the Judgment Creditors shall serve
any Iran Parties in accordance with the requirements of section 1608 of the Foreign Sovereign
Immwtlties Act of 1976 (the "FSIA"), 28 U.S.C. § 1608.
10. The Judgment Creditors shall attempt to serve third-party defendants via Federal
Express, DI-IL or a form of mail offered by the U.S. Postal Service (other than registered or
certified mail) that provides confirmation of delivery in cases where that is feasible, so long as it
is consistent with the requirements of the Hague Service Convention and the FSIA. In cases
-9-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 11 of 14
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where service is being made in Iran, the Judgment Creditors shall serve the same party a second
time outside of Iran or shall promptly notify the affected Defendant Banks that they are not going
to make such service.
. ..
11. The Judgment Creditors shall be responsible for arranging to have the complaint,
the exhibits tl1ereto, the third-party summons, the Phase Two Interpleader Complaint and the
exhibits thereto translated into Farsi and any other languages into which such translations may be
required by FSIA § 1608 or the Central Authority of any country where service is being made
under the Hague Service Convention. The Judgment Creditors shall bear all costs of such
translations, and all costs of serving the third-party defendants that they are responsible for
serving, except for the fee charged by the State Department for serving Iran (which shall be
borne by those Defendant Banks who name the Iran Parties as third-party defendants and which
amount will not be charged by such Defendant Banks as an expense against any recovery by the
Judgment Creditors), but counsel for the Judgment Creditors shall be entitled to reimbursement
for all such costs incurred by them out of any funds awarded in Phase Two or any subsequent
phase of this proceeding.
12. The parties shall make best efforts to effect service of process upon all third-party
defendants named in the Phase Two Interpleader Complaints and all other parties that they are
responsible for serving under this Order, in accordance with the terms of this Order, by
November 7, 2011.
13. The Judgment Creditors will provide copies to the Defendant Banks, as soon as
they are available, of all translations of the documents specified in paragraph 10 of this Order,
with certificates of translation.
-10-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 12 of 14
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14. Any third-party defendant who files an answer under seal shall file electronically
a redacted copy of its answer, redacted in accordance with the Unsealing Order, and shall serve
an unredacted copy of that answer upon the following persons by e-mail within two days of
filing the answer under seal: Curtis C. Mechling, Esq. at [email protected], Ben
Weathers-Lowin, Esq. at [email protected], Richard Kremen, Esq. at
[email protected], David Misler, Esq, at [email protected], Suzelle M.
Smith, Esq, at [email protected], Liviu Vogel, Esq. at [email protected],
Noel J. Nudelman, Esq. at [email protected], and any other counsel entitled to have
access to confidential information, at his or her e-mail address listed on the docket sheet. Such
third-patty defendant shall also serve an unredacted copy of its answer by mail or e-mail upon
counsel of record for each Defendant Bank that is named as a third-party plaintiff in the thirdparty
complaint being answered at the addresses and e-mail addresses set forth in the third-party
complaint.
15. Within fourteen days after completing service upon any third-party defendant in
accordance with the provisions of this Order, the Judgment Creditors shall file with this Court
and provide to counsel for the appropriate Defendant Bank a proof of service of such service in
accordance with Rule 4(1). In order to comply with Rule 4(1), such proof of service shall be
signed by the person who actually prepared the documents for service and delivered them to the
U.S. Postal Service, Federal Express or OHL, or otherwise actually made service upon the thirdparty
defendant, shall specify the documents served, the method of service used and the
addresses where service was made, and shall, where appropriate, identify the U.S. Postal Service,
Federal Express or DHL tracking number for the package and attach a copy of the confirmation
-11-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 13 of 14
09/16/2011 15 : 36 FAX ii2 805 7917 Hon. Rubert P. Patterson 14J014 / 017
of service received from the U.S. Postal Service, Federal Express or DHL, unless no
confumation has been received after a reasonable period oftime.
16. The Unsealing Order, Confidentiality Order, and Protective Order entered in these
proceedings on September 29, 2008, that is annexed as Exhibit C to the Levin Plaintiffs'
complaint in this proceeding, are hereby further modified to authorize the Judgment Creditors
and the Defendant Banks to serve copies of the Phase Two Service Documents upon the Phase
Two Blocked Account Parties and the Phase Two Blocked Wire Transfer Parties, and to send
copies of the Phase Two Service Documents or translations thereof to such parties in the course
of giving them notice of the Phase Two Interpleader Complaint filed pursuant to this Order,
provided, however, that the Judgment Creditors and the Defendant Banks shall make best efforts
to redact such documents so as to disclose to the Phase Two Blocked Account Parties and the
Phase Two Blocked Wire Transfer Parties only Confidential Infonnation (using that term as it is
defined in the Confidentiality Order) that relates to blocked deposit accounts and blocked wire
transfers that involved or relate to that party.
17. This Court shall hold a status conference in this proceeding at 4 P .M. on
December 7, 2011 to determine the status of service of process on the third-party defendants and
establish a schedule for further proceedings and motion practice herein.
18. Nothing in this Order shall preclude the Defendant Banks from seeking the
Court's permission to file additional third-party interpleader complaints or to amend the Phase
Two Interpleader Complaints after September 21, 2011 .
-12-
Annex 332
Case 1:09-cv-05900-JPO-RWL Document 764-1 Filed 08/29/12 Page 14 of 14
09/16/2011 15:36 FAX 2J.2 806 7917 Hon. Robert P. Patt'erson 14!015/017
SO ORDERED.
Dated: New York, New York
September / 6 , 2011
-13-
~(!?~-;_
Robe1i P. Patterson, Jr.
United States District Judge
Annex 332
ANNEX333

Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 1 of 7
Case 1: 11-cv-01601-PKC -M HD Document 24-1 Filed 08/10/11 Page 2 of 15
UNITED ST A TES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------x
THE EST A TE OF MICHAEL HEISER, deceased,
et al.,
Petitioners,
V.
11-CV-1601 (PKC/MHD)
ORDER CONCERNING NOTICE TO
THE BANK OF TOKYO MITSUBISHI UFJ, NEW AND SERVICE ON THIRD-PARTIES
YORK BRANCH,
Respondent.
-------------------------------------------------------------x
WHEREAS, this proceeding was commenced by Petitioners by the filing of a
Petition for Turnover Order pursuant to Fed. R. Civ. P. 69 and N.Y.C.P.L.R. §§ 5225 and 5227
(the "Petition") in this Court on March 8, 201 I; and
WHEREAS, the Petition seeks an order directing the Respondent The Bank of
Tokyo Mitsubishi UFJ, New York Branch ("Respondent") to tum over to Petitioners, in
satisfaction of a judgment in the amount of $591,089,966.00 entered in their favor by the United
States District Court for the District of Columbia on December 22, 2006, as supplemented by a
judgment entered September 30, 2009 (collectively, the "Judgment"), in consolidated cases
captioned Heiser v. Iran (Case No. 00-CV-2329 RCL) and Campbell v. Iran (Case No. 01-CV-
2104 RCL) (the "Underlying Action"), certain funds (the "Blocked Assets") held by the
Respondent that were blocked pursuant to regulations of the Office of Foreign Assets Control
("OF AC") and that may be subject to execution to satisfy the Judgment because the Islamic
Republic of Iran ("Iran") or individuals, persons and entities that are agencies or
instrumentalities of Iran (collectively, "Persons") may have an interest in such Blocked Assets;
and
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 2 of 7
Case 1:11-cv-01601-PKC -MHD Document 24-1 Filed 08/10/11 Page 3 of 15
WHEREAS, the Blocked Assets compr:ise funds that were the subject of wire
transfers for which Respondent was an intermedia1y bank; and
WHEREAS, on July 12, 2011, Respondent filed an Answer to Petition in which
Respondent asserted affirmative defenses including, without limitation, the need to provide proper notice
of the Petition to all parties that may have an interest in the Blocked Assets; and
WHEREAS, the parties wish to have the Court exercise its authority to establish
requirements and procedures for Petitioners to give notice of this proceeding to certain parties
who may claim an interest in the Blocked Assets (the "Third Parties" or a "Third Party"); and
WHEREAS, section 1608(b)(3)(C) of the Foreign Sovereign Immunities Act of
I 976 ("FSIA") authorizes the parties to this proceeding, under the circumstances specified
therein, to serve process upon or give notice to an agency or instrumentality of a foreign state "as
directed by order of the court consistent with the law of the place where service is to be made;"
and
WHEREAS, Rules 4(f)(3) and 4(h)(2) of the Federal Rules of Civil Procedure
authorize the parties to this proceeding to serve process upon or give notice to persons outside
any judicial district of the United States "by other means not prohibited by international
agreement, as the court directs;" and
WHEREAS, this Court has the authority under its inherent powers to establish
procedures for the service of process or the giving of notice in ce11ain other circumstances as
well;
NOW, THEREFORE, it is hereby ORDERED as follows:
1. The following documents (referred to collectively hereinafter as the "Service
Documents") shall be served in the manner specified in subsequent provisions of this Order.
a. The Petition;
2
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 3 of 7
Case 1 :11-cv-01601-PKC -MHD Document 24-1 Filed 08/10/11 Page 4 of 15
b. A spreadsheet or other summary provided by the Respondent to the
Petitioners identifying (to the extent it can reasonably be determined) those Blocked Assets in
which the Respondent believes the person receiving notice may claim an interest;
c. A notice in the form of Exhibit A to this Order (the "Notice of Lawsuit");
d. This Order;
e. To the extent the Service Documents arc sent to a person or entity
("Entity") in Iran or a country where the official language is Farsi, Petitioners shall translate the
Service Documents into Farsi in compliance with section 1608(b)(3) of the FSIA.
2. Petitioners shall serve the Service Documents upon the following Third Parties, to
the extent that Petitioners are in possession of contact infom1ation for such parties sufficient to
permit them to give notice in the manner specified in this Order:
a. The account holder ofrecord of any Blocked Assets; and
b. The originator, the originator's bank, the beneficiary, the beneficiary's
bank, and any intermediary bank for any blocked electronic funds transfer ("EFT").
3. The Service Documents may be served by Petitioners upon any Third Party by
any of the following methods:
a. by sending copies of the Service Documents to such Third Party at its last
known address, as determined by Petitioners from their own records, records provided by
Respondent or public sources such as the internet, either by U.S. global mail (also known as First
Class International Mail) or by an express delivery company such as FedEx, UPS or DHL that
makes deliveries in the country to which the documents are being sent, directed to the attention
of the Managing Director, Chief Executive Officer or Chief Legal Officer of that Third Party ifit
is a business entity, or to an individual if the Third Party is not an entity. Respondent shall
3
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 4 of 7
Case 1: 11-cv-01601-PKC -MHD Document 24-1 Filed 08/10/11 Page 5 of 15
provide counsel for Petitioners the address it has in its records (if any) of any Third Party within
thirty (30) days of the enh1' of the later this Order and a suitable Protective Order for this case;
b. by sending an e-mail to the last knO\vn e-mail address of such Third Party,
as determined by Petitioners from their own records, records provided by Respondent or public
sources such as internet web sites, which e-mail shall state:
"IMPORTANT! This e-mail is being sent to put you on notice of a lawsuit
pending in the United States District Court for the Southern District of New York
that could result in the seizure and forfeiture of funds in which you may have an
interest. These funds may include the balances held in one or more bank accounts
that were blocked pursuant to applicable OFAC regulations and the proceeds of
one or more wire transfers that were intenupted and blocked pursuant to those
regulations. Please open the attachments, which are in .pdf form, immediately.
They will provide more detailed information about the lawsuit and your potential
exposure to loss in that lawsuit."
The e-mail shall also attach .PDF versions of the Service Documents to the e-mail (if the e-mail
is being sent to a business entity, the e-mail should be directed to the e-mail address of the Chief
Executive Officer, Managing Director or Chief Legal Officer, if known, or it should state,
following the word "IMPORTANT," "Deliver this e-mail and the attachments to your Chief
Executive Officer, Managing Director or Chief Legal Officer at once"). Respondent shall
provide counsel for Petitioners the e-mail address it has in its records (if any) of any Third Party
within thirty (30) days of the entry of the later of this Order and a suitable Protective Order for
this case;
c. by faxing copies of the Service Documents to such Third Party at its last
known fax number, as determined by Petitioners from their own records, records obtained from
Respondent or public sources such as the internet (if the fax is being sent to a business entity, the
fax cover sheet should be addressed to the Chief Executive Officer, Managing Director or Chief
Legal Officer of the entity). Respondent shall provide counsel for Petitioners the fax number it
4
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 5 of 7
Case 1: 11-cv-0 1601-PKC -MHD Document 24-1 Filed 08/10/11 Page 6 of 15
has in its records (if any) of any Third Party within thirty (30) days of the entry of the later of
this Order and a suitable Protective Order for this case; or
d. by serving the Service Documents m any other manner that would
constitute good service under Rule 4 of the Federal Rules of Civil Procedure;
e. if the Third Party being given notice is a bank, Petitioners may provide
notice by sending the following text to the bank in one or more of a series of linked SWIFT
messages:
"URGENT URGENT URGENT URGENT Deliver this message to your Chief
Executive Officer, Managing Director or Chief Legal Officer at once. This
message is being sent to put you on notice of a lawsuit pending in the United
States District Court for lhe Southern District of New York that could result in the
seizure and forfeiture of funds in which you may have an interest. These funds
include the balances held in one or more bank accounts that were blocked
pursuant to the OF AC regulations and the proceeds of one or more wire transfers
that were interrupted and blocked pursuant to those regulations. What follows is
the text of important legal documents that explain the nature of this lawsuit and
what you must do to protect your rights, if any, in the funds at issue in the lawsuit.
Please contact [contact information to be supplied]. That person can provide you
with additional important legal documents relating to the lawsuit."
Such notice should be followed by the Petition and the Notice of Lawsuit, except that the
captions of such documents may be abbreviated to show only the name of the first named
petitioner and respondent, and the list of persons to whom the Petition is addressed may be
omitted. The foregoing text may be modified as necessary to comply with paragraph 5 of this
Order in the event that several linked messages or series of linked messages are needed to
incorporate all of the specified documents; or
f. if the Third Party being given notice is owned or controlled in whole or in
part by lran or any of its agencies and instrumentalities or has ever been included in a list
promulgated by the OF AC of persons whose assets must be blocked pursuant to applicable
OFAC regulations, Petitioners may provide notice by causing copies of the Service Documents
5
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 6 of 7
Case 1 : 11-cv-01601-PKC -M HD Document 24-1 Filed 08/10/11 Page 7 of 15
to be served on such party in accordance with 28 U.S.C. § 1608(b)(3){B) and this Court's
Instructions for Service of Process on a Foreign Defendant, which contemplate that documents
be dispatched to such party by the Clerk of this Court using a form of mail that requires a signed
receipt.
4. The notice may be given by any person authorized to effect service of process
under Rule 4(c)(2) of the Federal Rules of Civil Procedure.
5. If the Service Documents are too voluminous to be sent to a Third Party by mail
or overnight delivery service in one envelope, or as attachments to a single e-mail, or in a single
fax or SWIFT, the mailings, e-mails, faxes or SWIFTS shall indicate this fact and the number of
envelopes, e-mails, faxes or SWIFTS, as the case may be, that are being sent and notify the
recipient to treat them as a single group of documents relating to the same proceeding.
6. Any Protective Order previously entered by this Court ordering the sealing of
papers in this action is hereby suspended and amended to the extent necessary for the translation
of documents into Farsi and the service and delivery of documents and information as authorized
in this Order.
7. Counsel for Petitioners shall file a certificate of service with the Court and serve a
copy of the certificate of service on counsel for Respondent within five (5) days after receiving
confirmation of service on the Third Parties.
8. Service in accordance with the provisions of this Order shall be deemed to satisfy
all of the requirements for service under the FSIA, the Federal Rules of Civil Procedure, N.Y.
C.P.L.R., and all of the requirements of due process of law.
9. Any Third Party who fails to assert a claim to the Blocked Assets or take any
action within sixty (60) days of the date indicated on the Notice of Lawsuit shall be deemed to
6
Annex 333
Case 1:11-cv-01601-PKC-MHD Document 25 Filed 08/24/11 Page 7 of 7
Case 1:11-cv-01601-PKC-MHD Document 24-1 Filed 08/10/11 Page 8 of 15
forever waive any claims that such Third Party may have against the Blocked Assets, or against
Respondent or Petitioners with respect to the Blocked Assets, and such Third Party shall be
forever barred, estopped and enjoined from asserting any claim to the Blocked Assets or
pursuing any claim against the Respondent or Petitioners with respect to delivery or payment of
the Blocked Assets to Petitioners at any time in any jurisdiction. This Court shall retain
continuing jurisdiction with respect to any claims made at any time involving in any way the
Blocked Assets.
10. By consenting to the relief set forth herein, Respondent has not waived, forfeited
or prejudiced in any way the ability of the Third Parties to join in any proceeding relating to the
Petition, and it has not waived, forfeited or prejudiced in any way any of the Third Parties'
rights, defenses, arguments or objections that they may have in response to the Petition, all of
which are expressly reserved and given effect by ensuring that the Third Parties will be given
notice of their right to interpose opposition to the relief sought in this turnover proceeding.
Dated: New York, New York
~/ ~-J2011
7
United States Magistrate Judge
Annex 333

ANNEX334

Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ, New ... , 919 F.Supp.2d 411 ...
919 F.Supp.2d 411
United States District Court,
S.D. New York.
ESTATE OF Michael
HEISER, et al., Petitioners,
v.
BANK OF TOKYO MITSUBISHI UFJ,
NEW YORK BRANCH, Respondent.
No. 11 Civ. 1601 (PKC).
I
Jan. 29, 2013.
Synopsis
Background: Family members and the estates of seventeen
U.S. Air Force servicemembers killed in 1996 terrorist attacks
in Saudi Arabia sought to enforce a judgment against the
Islamic Republic oflran, and Iran-based entities which were
found by the United States District Court for the District of
Columbia, Royce C. Lamberth, J., to have provided support
for the terrorist attacks. Petitioners moved for summary
judgment and sought an order compelling respondent bank
to turn over funds that they claimed belonged to Iranbased
entities that functioned as mere instrumentalities of the
Islamic Republic of Iran, which were blocked pursuant to
Presidential Executive Orders and directives issued by the
Office of Foreign Assets Control (OFAC).
The District Court, P. Kevin Castel, J., held that petitioners
were entitled to an order attaching Islamic Republic of Iran
entities' funds.
Motion granted.
Attorneys and Law Firms
*412 Cary Brian Samowitz, Timothy H. Birnbaum, DLA
Piper U.S. LLP, New York, NY, Dale Kerbin Cathell, David
B. Misler, Richard Marc Kremen, DLA Piper U.S. LLP,
Baltimore, MD, for Petitioners.
Karl Geercken, Alston & Bird, LLP, New York, NY, for
Respondent.
MEMORANDUM AND ORDER
P. KEVIN CASTEL, District Judge:
The petitioners are family members and the estates of
seventeen U.S. Air Force servicemembers killed in the 1996
terrorist attacks on the Khobar Towers in Saudi Arabia. They
seek to enforce a judgment against the Islamic Republic of
Iran, the Iranian Ministry oflnformation and Security, and the
Iranian Islamic Revolution Guard Corps, all of which were
found by the United States District Court for the District of
Columbia (Hon. Royce C. Lamberth, U.S.D.J.) (the "District
of Columbia Court") to have provided support for the terrorist
attacks.
Petitioners move for summary judgment and seek an order
compelling respondent Bank of Tokyo Mitsubishi UFJ, New
York Branch ("Bank of Tokyo") to turn over funds that
they claim belong to Iran-based entities that function as
mere instrumentalities of the Islamic Republic of Iran. The
funds were initially electronic funds transfers ("EFTs") that
were blocked pursuant to directives of the United States
Department of Treasury, and now sit in interest-bearing
accounts held by the Bank of Tokyo. The Bank of Tokyo does
not oppose the motion.
The petitioners have come forward with evidence that the
funds they seek to attach belong to instrumentalities of the
Islamic Republic oflran, and were lawfully blocked pursuant
to presidential orders and Department of Treasury authority.
For reasons that will be explained, such assets may be
attached in satisfaction of a judgment. The petitioners' motion
is therefore granted.
BACKGROUND
For the purpose of this motion, the following facts are
undisputed, and the record is scrutinized in the light most
favorable to the respondent. See, e.g., Costello v. City of
Burlington, 632 F.3d 41, 45 (2d Cir.2011).
*413 The respondent does not dispute the facts set forth
by the petitioners, and has submitted no counter-statement
in opposition to the petitioners' statement of undisputed
facts filed pursuant to Local Rule 56.1. In its memorandum
of law, the respondent states that it "does not oppose the
ultimate relief sought by Petitioners in the Motion, namely,
the turnover of the Blocked Assets." (Response Mem. at 1.)
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 334 1
Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ, New ... , 919 F.Supp.2d 411 ...
It also describes itself as a "disinterested stakeholder" in the
underlying assets. (Response Mem. at 3.)
A. Proceedings in the District of Columbia Court.
On June 25, 1996, an attack on the Khobar Towers complex in
Saudi Arabia killed nineteen U.S. Air Force personnel. (Pet.
56.1 ,i 1.) The petitioners in this case include representatives
of the estates for seventeen of those victims. (Pet. 56.1 ,i,i 2-
4.)
Petitioners were plaintiffs in two actions filed in the District
of Columbia Court. On September 29, 2000, certain of the
petitioners filed an action pursuant to the Foreign Sovereign
Immunities Act, 28 U.S.C. § 1330, et seq. (the "FSIA").
See Heiser v. Iran, 00 Civ. 2329 (D.D.C.) (RCL). (Pet. 56.1
,i 3.) The FSIA establishes exclusive federal jurisdiction
over actions against foreign states, 28 U.S.C. § 1330, and
includes a terrorism exemption for a foreign state's immunity,
28 U.S.C. § 1605A. Petitioners asserted that the Islamic
Republic of Iran, the Iranian Ministry of Information &
Security (the "MOIS") and the Iranian Revolutionary Guard
Corps (the "IRGC") were liable to them for wrongful death
and intentional infliction of emotional distress. (Pet. 56.1
,i 3.) Additional petitioners in this action brought similar
claims against the same defendants in a second action filed
on October 9, 2001, Campbell v. Iran, 01 Civ. 2104 (D.D.C.)
(RCL). (Pet. 56.1 iJ 4.) The District of Columbia Court
consolidated the two cases, (Pet. 56.1 ,i 5.)
On December 22, 2006, the District of Columbia Court
entered default judgment against Iran, the MOIS and the
IRGC. See Estate of Heiser v. Islamic Republic of Iran,
466 F.Supp.2d 229 (D.D.C.2006). It concluded that the three
defendants were jointly and severally liable for damages
totaling $254,431,903. (Pet. 56.1 iJ 6.)
On January 13, 2009, the District of Columbia Court
retroactively applied the recently enacted section 1605A of
the FSIA, 28 U.S.C. § 1605A,1 and that the petitioners were
entitled to proceed under the new statute. (Pet. 56.1 ,i 7;
Seniawski Dec. Ex. 2.) Thereafter, on September 30, 2009,
that court entered a supplemental judgment under section
1605A of the FSIA, awarding additional damages for lost
wages and future earnings totaling $336,658,063. (Pet. 56.1
,i 8; Seniawski Dec. Ex. 3.)
B. Orders Directed to Satisfying the Judgment.
The District of Columbia Court subsequently issued orders
directed to the collection of the two judgments. On February
7, 2008, it concluded that, pursuant to 28 U.S.C. § 1610(c), a
period had elapsed following entry of judgment sufficient to
authorize an attachment in aid and execution of the December
2006judgment. (Pet. 56.1 iJ9; Seniawski Dec. Ex. 4.) On May
10, 2010, it reached the same conclusion as to the September
2009 supplemental judgment. (Pet. 56.1 ,i 10; Seniawski Dec.
Ex. 5.)
*414 On September 8, 2008, the petitioners registered the
December 2006 judgment in this District, pursuant to 28
U.S.C. § 1963. (Pet. 56.1 ,i 13; M18-302, judgment no.
08,1562; Seniawski Dec. Ex. 7.) Petitioners registered the
September 2009 judgment in this District on December 6,
2010. (Amended Petition ("Pet.") 56.1 ,i 14; 10 MC 00005,
judgment no. 10,2146; Seniawski Dec. Ex. 8.) Thereafter,
pursuant to Rule 69, Fed.R.Civ.P., and New York CPLR §
5230, the petitioners served writs of execution issued by the
Clerk of this District on the U.S. Marshal. (Pet. 56.1 ,i 15;
Seniawski Dec. Ex. 9 & 10.) The U.S. Marshal then served
the writs on the Bank of Tokyo. (Pet. 56.1 ,i 16; Seniawski
Dec. Ex. 10.)
C. Procedural History of the Present Action.
Petitioners commenced this action by filing a petition for
a turnover order pursuant to Rule 69 and sections 5225
and 5227 of the CPLR. (Docket# 1.) Petitioners assert that
the respondent Bank of Tokyo possesses assets belonging
instrumentalities of the MOIS, the IRGC and the government
oflran. (Pet. ,i,i 25-26.) The Petition states that the respondent
is named as a defendant pursuant to CPLR § 5225(b ),
which permits a judgment creditor to commence a special
proceeding against a person in possession or custody of
money owed to a judgment creditor. (Pet. ,i 6.) The respondent
asserts no right to these assets. (Pet. 56.1 ,i 27.)
Petitioners seek to recover funds that were blocked pursuant
to Presidential Executive Orders and directives issued by
the Office of Foreign Assets Control ("OFAC"), an agency
of the United States Department of Treasury. These funds
are held by entities that OFAC has designated as Specially
Designated Nationals ("SDNs"), and deemed "individuals
and companies owned or controlled by, or acting for or
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on behalf of, targeted countries."2 Petitioners contend these
funds are owned by mere instrumentalities of the Islamic
Republic of Iran. They seek an order directing that the
following blocked assets be turned over to them, in aid of
the judgments entered by the District of Columbia Court;
$90,268.80 from Bank Sepah, International, PLC ("BSI");
$4,740 from Azores Shipping Company LL FZE ("Azores");
$61,974 and $99,974 from IRISL Benelux NV; $97,767.50
from the Export Development Bank of Iran; and $2,181.88
from Bank Melli Iran ("Bank Melli") ( collectively, the "Iran
Entities"). (Seniawski Dec. ,-i 20.) These entities all have been
served with notice of petitioners' claims, but have filed no
responses and have not appeared in this action. (Seniawski
Dec. ,-r,-r 21-23.) Each of these entities is listed by OFAC as a
"proliferator" of"weapons of mass destruction" or as a global
terrorist. (Seniawski Dec. ,-r 24.)
It is undisputed that respondent Bank of Tokyo maintains
bank accounts holding the blocked assets of the SDNs listed
above. (Pet. 56.1 ,-i 25.) In its memorandum oflaw, Bank of
Tokyo states that it has frozen these assets pursuant to OFAC
directive, (Response Mem. at 2.) Under 31 C.F.R. § 595.203,
Bank of Tokyo was required to maintain the funds in interestbearing
accounts.
On August 23, 2011, Magistrate Judge Dollinger, to whom
this action was referred for general pretrial supervision,
signed an order directing service of the Petition and other
relevant documents to all third parties, with the documents
translated into Farsi. (Docket# 25.) The respondent produced
contact information for the Iran Entities. (Pet 56.1 ,-r 22.)
Specifically, *415 the service order stated: "Any Third Party
who fails to assert a claim to the Blocked Assets or take
any action within sixty (60) days of the date indicated on
the Notice of Lawsuit shall be deemed to forever waive any
claims that such Third Party may have against the Blocked
Assets, or against Respondent or Petitioners with respect to
the Blocked Assets." (Docket# 25 ,-r 9.) The deadline for any
third party to appear in this matter or to assert a claim has
since expired. (Pet. 56.1 ,-r 24.)
In its response to the present motion, Bank of Tokyo
states that it "does not oppose the ultimate relief sought
by Petitioners in the Motion, namely, the turnover of the
Blocked Assets." (Response Mem. at 1.) The United States
also has submitted letter-briefs setting forth its views on the
petitioners' summary judgment motion. The United States has
neither supported nor opposed the motion.
SUMMARY JUDGMENT STANDARD.
Summary judgment "shall" be granted "if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Rule 56(a), Fed.R.Civ.P. It is the burden of a movant on a
summary judgment motion to come forward with evidence
on each material element of his claim or defense, sufficient
to demonstrate that he or she is entitled to relief as a
matter of law. Vt. Teddy Bear Co. v. 1-800 Beargram Co.,
373 F.3d 241, 244 (2d Cir.2004). In raising a triable issue
of fact, the non-movant carries only "a limited burden of
production," but nevertheless "must 'demonstrate more than
some metaphysical doubt as to the material facts,' and come
forward with 'specific facts showing that there is a genuine
issue for trial.'" Powellv. Nat'! Bd. of Med. Exam'rs, 364 F.3d
79, 84 (2d Cir.2004) (quoting Aslanidis v. US. Lines, Inc., 7
F.3d 1067, 1072 (2d Cir.1993)).
A fact is material if it "might affect the outcome of the suit
under the governing law," meaning that "the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The Court must
view the evidence in the light most favorable to the nonmoving
party and draw all reasonable inferences in its favor,
and may grant summary judgment only when no reasonable
trier of fact could find in favor of the nonmoving party.
Costello, 632 F.3d at 45; accord Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348,
89 L.Ed.2d 538 (1986). In reviewing a motion for summary
judgment, the court may scrutinize the record, and grant or
deny summary judgment as the record warrants. Rule 56( c)
(3). In the absence of any disputed material fact, summary
judgment is appropriate. Rule 56(a).
Though the respondent does not oppose the motion,
petitioners still must establish that they are entitled to
judgment as a matter of law. "If the evidence submitted in
support of the summary judgment motion does not meet
the movant's burden of production, then 'summary judgment
must be denied even if no opposing evidentiary matter is
presented.' " Vt. Teddy Bear Co., 3 73 F.3d at 244 ( emphasis
in original) (quoting Amaker v. Foley, 274 F.3d 677, 681 (2d
Cir.2001)); see also Champion v. Artuz, 76 F.3d 483,486 (2d
Cir.1996) ( summary judgment "may properly be granted only
if the facts as to which there is no genuine dispute show that
the moving party is entitled to judgment as a matter oflaw.")
( quotation marks and citation omitted).
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*416 DISCUSSION
The Court first reviews FSIA provisions that permit
a successful plaintiff to attach funds that have been
blocked pursuant to executive order and OFAC directives.
Second, the Court examines presidential authority to block
certain international financial transactions and OFAC's
implementation of its blocking regime. Finally, the Court
examines the evidence submitted by petitioners that
the entities from which petitioners seek recovery are
instrumentalities of the Republic of Iran.
I. The FSIA Framework for Sovereign Liability and the
Execution of Judgment.
The FSIA "provides the exclusive basis for subject matter
jurisdiction over all civil actions against foreign state
defendants, and therefore for a court to exercise subject
matter jurisdiction over a defendant the action must fall
within one of the FSIA's exceptions to foreign sovereign
immunity." Weinstein v. Islamic Republic of Iran, 609 F.3d
43, 47 (2d Cir.2010). Section 1605(a)(7), which has since
been repealed with many of its terms incorporated into 28
U.S.C. § 1605A,3 "abrogates immunity for those foreign
states officially designated as state sponsors of terrorism by
the Department of State where the foreign state commits a
terrorist act or provides material support for the commission
of a terrorist act and the act results in the death or personal
injury of a United States citizen." Weinstein, 609 F.3d at 48;
see also Levin v. Bank of New York, 2011 WL 812032, at *8-
9 (S.D.N.Y. Mar. 4, 2011) (discussing relationship between
sections 1605(a)(7) and 1605A). Iran has been designated
as a state sponsor of terrorism since 1984, and is subject to
jurisdiction under section 1605A and its predecessor statute,
section 1605(a)(7). See Weinstein, 609 F.3d at 48.
The FSIA defines a "foreign state" to include "a political
subdivision of a foreign state or an agency or instrumentality
of a foreign state." 28 U.S.C. § 1603(a). It defines
an "instrumentality" to include "a separate legal person,
corporate or otherwise" that either is "an organ of a foreign
state" or a person "whose shares or other ownership interest
is owned by a foreign state or political subdivision thereof,"
provided that it is not a citizen of the United States or "created
under the laws of any third country." 28 U.S.C. § 1603(b)
(1-3). The District of Columbia Court concluded that the
defendants in that action were subject to jurisdiction under the
then-operative section 1605(a)(7). which provided a terrorism
exemption from a foreign government's immunity against
money damages claims in the United States. 466 F.Supp.2d
at 254-55. It also concluded that those defendants were liable
to the plaintiffs. Id. at 271-356.
The Terrorism Risk Insurance Act of2002 ("TRIA") provides
for attachment in aid of execution of a judgment. Section
20l(a) of TRlA, which is codified as a note to 28 U.S.C. §
1610, states:
Notwithstanding any other provision of law, and except as
provided in subsection (b) [ of this note], in every case in
which a person has obtained a judgment against a terrorist
party on a claim based upon an act of terrorism, or for
which a terrorist party is not immune under section 1605A
or 1605(a)(7) (as such section was in effect on January 27,
2008) of title 28, United States Code, the blocked assets of
that terrorist party *417 (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.
Pub. L. 107-297, Title II, § 201(a), (b), (d), Nov. 26, 2002,
116 Stat. 2337, as amended. Pub. L. 112-158, Title V, §
502(e)(2), Aug. 10, 2012, 126 Stat. 1260. According to the
Second Circuit, it is "beyond cavil that Section 20l(a) of
the TRlA provides courts with subject matter jurisdiction
over post-judgment execution and attachment proceedings
against property held in the hands of an instrumentality of
the judgment-debtor, even if the instrumentality is not itself
named in the judgment." Weinstein, 609 F.3d at 50.
Separately, section 16 lO(g) permits attachment in aid of an
execution of a judgment entered under section 1605A. It
provides that "the property of a foreign state against which
a judgment is entered under section 1605A, and the property
of an agency or instrumentality of such a state, including
property that is a separate juridical entity or is an interest held
directly or indirectly in a separate juridical entity, is subject
to attachment in aid of execution, and execution, upon that
judgment as provided in this section, regardless of the level
of economic control over the property by the government of
the foreign state." 28 U.S.C. § 1610(g)(l)(A). The District
of Columbia Court observed that the statute" 'expand[s] the
category of foreign sovereign property that can be attached;
judgment creditors can now reach any U.S. property in which
Iran has any interest ... whereas before they could only reach
property belonging to Iran.' " Estate of Heiser v. Islamic
Republic of Iran, 807 F.Supp.2d 9, 18 (D.D.C.2011) (quoting
Peterson v. Islamic Republic of Iran, 627 F.3d 1117, 1123 n.
2 (9th Cir.2010) ). "Thus, the only requirement for attachment
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or execution of property is evidence that the property in
question is held by a foreign entity that is in fact an agency
or instrumentality of the foreign state against which the Court
has entered judgment." Id. at 19,
II. Executive Branch Authority over Foreign Transactions
and the Blocking Procedures of the Office of Foreign Asset
Control ("OFAC").
The International Emergency Economic Powers Act, 50
U.S.C. § 1701, et seq. ("IEEPA"), authorizes the President
to regulate international economic transactions. Specifically,
it permits the executive branch to "investigate, regulate or
prohibit... transfers ofcredit or payments ... by ... any banking
institution, to the extent that such transfers ... involve any
interest of any foreign country . . . [ and any] transactions
involving ... any property in which any foreign country ...
has any interest." 50 U.S.C. § l 702(a)(l). Presidents have
issued several executive orders under the IEEPA, including
Executive Order No. 12947, 60 Fed.Reg. 5079 (Jan. 23, 1995)
(Prohibiting Transactions with Terrorists Who Threaten to
Disrupt the Middle East Peace Process), Executive Order
No. 13224, 66 Fed.Reg. 49079 (Sept. 23, 2001) (Blocking
Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism), and
Executive Order No. 13382, 70 Fed.Reg. 38567 (June 28,
2005) (Blocking Property of Weapons of Mass Destruction
Proliferators and Their Supporters), and Executive Order No.
13599, 77 Fed.Reg. 6659 (Feb. 5, 2012) (Blocking Property
of the Government oflran and Iranian Financial Institutions).
*418 OFAC describes itself as "act[ing] under Presidential
national emergency powers, as well as authority granted
by specific legislation, to impose controls on transactions
and freeze assets under U.S. jurisdiction."4 OFAC has
implemented numerous so-called "blocking" regimes,
including the Weapons of Mass Destruction Proliferators
Sanction, 31 C.F.R. § 544.101, et seq., and the Terrorism
Sanctions Regulation, 31 C.F.R. § 595.101, et seq. OFAC
requires the blocking of"all property and interests in property
that are in the United States" belonging to SDNs. 31 C.F.R.
§ 544.201(a). OFAC defines "interest" as "an interest of any
nature whatsoever, direct or indirect," 31 C.F.R. §§ 544.305,
and property as any "property, real, personal, or mixed,
tangible or intangible, or interest or interests therein, present,
future or contingent," id. § 544.308. OFAC publishes a list
of SDNs at http://www.treasury.gov/sdn, which it frequently
updates.
OFAC has designated the following entities as SDNs:
Bank Sepah, Bank Sepah International, PLC ("BSI");
Iranohind Shipping Company ("Iranohind"); Azores
Shipping Company LL FZE ("Azores"); IRISL Benelux NV;
Export Development Bank of Iran ("EDBI"); Bank Melli;
and the Islamic Republic of Iran Shipping Lines ("IRISL").
(Office of Foreign Assets Control, Specially Designated
Nationals and Blocked Persons List, January 24, 2013, at
97, 99, 100, 161, 221, 233.)5 The petitioners seek to attach
funds belonging to these entities, (Seniawski Dec. Ex. 14.)
Respondent Bank of Tokyo has expressly stated that it
blocked these entities' assets pursuant to OFAC directive.
(Response Mem. at 2.) As previously noted, the TRIA
provides that "the blocked assets" of a "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." Note, 28 U.S.C. § 1610.
Ill. The Petitioners Have Come Forward with
Evidence that the Eight Non-Party Iranian Entities Are
Instrumentalities of Iran.
In support of its summary judgment motion, the petitioners
have submitted the affidavit of Patrick L. Clawson, Ph.D,
the Director of Research of the Washington Institute for
Near East Policy. Clawson states that he has specialized
knowledge concerning financial accounts, wire transfers
and other transactions involving assets blocked by OFAC
directives. (Clawson AfPt ,r 10.) Clawson also asserts that
he is knowledgeable as to bank charters and ownership,
particularly as to Iran's national and state-owned banks.
(Clawson AfPt ,r 10.) He swears that he closely follows Iran's
press and political system and has researched its economy and
commercial enterprises. (Clawson AfPt ,r,r 9-12.)
Clawson asserts that the following entities are owned at least
in part by the government of the Islamic Republic of Iran:
A. Bank Melli.
According to Clawson, the Central Bank of Iran expressly
recognizes Bank Melli Iran as a "commercial governmentowned
bank." (Clawson AfPt ,r 13.) Bank Melli states in a
financial report available on its website that "[t]he capital is
completely *419 owned by the Government of the Islamic
Republic oflran." (Clawson AfPt ,r 13.)6
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Based on the express statements of Bank Melli, the petitioners
have established that Bank Melli is an "instrumentality" of
the government oflran. 28 U.S.C. § 1603(b).
B. Bank Sepah.
Iran nationalized ownership of Bank Sepah in 1980. (Clawson
Afl't ,-i 14.) On its website, the Central Bank oflran describes
Bank Sepah as a "commercial government-owned bank."7
(Clawson Afft ,-r 14.) Clawson states that he is aware of no
evidence of any planned changes in ownership or plans to
privatize Bank Sepah. (Clawson Afl't ,-i 14.)
Because the Central Bank of Iran identifies Bank Sepah as
a "commercial government-owned bank," petitioners have
established that Bank Sepah is an "instrumentality" of the
government oflran. 28 U.S.C. § 1603(b).
C.BSL
On January 9, 2007, the Treasury Department concluded that
BSI is owned and controlled by Bank Sepah. (Clawson Afft ,-i
15.) BSl's company website states that it "is a wholly-owned
subsidiary of Bank Sepah Iran."8 (Clawson Afl't ,-i 15.) Its
website also states that it was incorporate to "[take] over the
assets, liabilities and business of the London Branch of Bank
Sepah, Iran."9 (Clawson Afl't ,-i 15.)
As noted, the Central Bank of Iran describes Bank Sepah
as a "commercial government-owned bank." As a whollyowned
subsidiary of Bank Sepah operating in London, BSI,
like its parent company, qualifies as an "instrumentality" of
the government oflran. 28 U.S.C. § 1603(b).
D.EDBL
The website of the Central Bank of Iran lists EDBI
as a "specialized government bank."10 (Clawson Afft ,-i
16.) Clawson asserts that EDBI is "widely known" as a
"state owned, specialist export and import bank created to
increase non-oil exports from Iran and develop international
trade." (Clawson Afl't ,-i 16.) He states that it "is active
in promoting Iran's non-oil exports and trade with Iran's
neighbors." (Clawson Afl't ,-r 16.) On October 22, 2008,
OFAC froze EDBI assets under U.S. jurisdiction. (Clawson
Afl't ,-i 16.) OFAC identifies EDBI as "one of the leading
intermediaries handling Bank Sepah's financing, including
WMD-related payments."11
This Court affords little weight to Clawson's statements
about what is "widely known" about EDBl's operations.
These unsupported statements are not accompanied by any
citation to the record or publicly available factual information.
Nevertheless, the fact that the Central Bank of Iran lists
EDBI as a "specialized government bank" and that OFAC
has deemed EDBI an intermediary in Bank Sepah financing
operations is sufficient evidence that EDBI functions as an
instrumentality *420 of the government of Iran. 28 U.S.C.
§ 1603(b).
E.IRISL.
OFAC recognizes IRISL as under control by the government
of Iran, and acting as the country's "national maritime
carrier .... "12 (Clawson Afft ,-i 17.) It has concluded that
IRISL had placed its international network of ships and
hubs into the service of the Iranian military, particularly the
arm of its military overseeing ballistic missile development.
We imposed sanctions on IRISL, its corporate network,
and its fleet, prohibiting U.S. persons from dealing with
the company."13 OFAC also has concluded that IRISL has
created front companies in Panama to conceal the ownership
of its vessels, and has repeatedly repainted, renamed and
transferred nominal ownership of vessels. (Id.)
As Iran's "national maritime carrier," IRISL functions as
an instrumentality of the government of Iran. 28 U.S.C. §
1603(b).
F. Azores, lranohind and IRISL Benelux NV.
Petitioners assert that Azores, Iranohind and IRISL Benelux
NV are all entities controlled by IRISL, citing to conclusions
reached by the United States Treasury, as well as British and
European Union Authorities.
The United States Treasury has frozen the assets of Azores
and announced restrictions on transactions related to the
company. 14 It identifies Azores as a front company for IRISL,
based in the United Arab Emirates. Id. The European Union
also has identified Azores as a "[t]ront company owned or
controlled by IRISL or an IRISL affiliate. It is the registered
owner of a vessel owned or controlled by IRISL."15 The
European Union concluded that Azores is controlled by
Moghddami Fard, who is the company's director, and that
Fard acts as IRISL's regional director in the United Arab
Emirates. Id. The EU has stated that Fard has organized
several companies in an attempt to circumvent restrictions
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on the IRISL. Id. The British government also has imposed
restrictions on Azores, citing its relationship with Fard. 16
Clawson asserts that the prominent role played by Fard and
the evidence of IRISL ownership suggest that the IRISL
controls Azores. (Clawson Afl't 118.)
The United States Treasury has designated Iranohind as
engaging in proliferation activities. It has stated that the
company was "found to be owned or controlled by or
acting or purporting to act for or on behalf of, director
or indirectly, IRISL."17 The Clawson Affidavit summarizes
similar findings by the United Nations and the British
government, as well as reports by an Indian shipping company
and press outlets concerning Iranohind's relationship to
IRISL. (Clawson Afl't 119.)
The United States Treasury has designated IRISL Benelux
NV as engaging in proliferation activities, stating that it was
"found to be owned or controlled by or *421 acting or
purporting to act for or on behalf of, directly or indirectly,
IRISL."18 It stated that entities doing businesses with this and
other IRISL entities "may be unwittingly helping the shipping
line facilitate Iran's proliferation activities." Id.
Based on the foregoing, this Court concludes that
Azores, Iranohind and IRISL Benelux NV functioned as
instrumentalities of the government of Iran. 28 U.S.C. §
l 603(b ). Each is owned or controlled by, or acts on behalf of
IRISL, which is Iran's national carrier.
IV. The Petitioners Are Entitled to Attach the Requested
Funds.
Petitioners have come forward with evidence that the Iran
Entities are agencies and instrumentalities oflran. In addition,
OFAC has listed each of these entities as SDNs. (Office of
Foreign Assets Control, Specially Designated Nationals and
Blocked Persons List, January 24, 2013, at 97, 99, 100, 161,
221, 233.)19 Under the FSIA, because the Iran entities are
instrumentalities of Iran, the assets of these entities may be
attached in aid of execution of judgment. 28 U.S.C. § 1610(g).
Section 201 of the TRIA also states that these assets may be
subject to attachment in aid of execution of judgment. Note,
28 U.S.C. § 1610.
Petitioners have submitted a chart produced by the respondent
reflecting the EFT transactions, including the transactions'
dates, the sending banks and the transactions' originators and
beneficiaries. (Seniawski Dec. Ex. 14.) Specifically, the chart
reflects that BSI was the intended beneficiary of a $90,628.80
EFT of June 21, 2007; Azores originated a $4,740 EFT of
September 29, 2008; IRISL Benelux NV was the intended
beneficiary of two EFTs of January 21 and 22, 2009, the
first in an amount of $61,974 and the second in an amount
of $99,974; EDBI was intended beneficiary of a $97,767.50
EFT of April 24, 2009; and Bank Melli was issuing bank in
a $2,181.88 EFT of July 26, 2010. (Seniawski Dec. Ex. 14.)
The respondent participated in these transactions, either as
the sending bank or the beneficiary's bank. (Seniawski Dec.
Ex. 14.) This chart is evidence that the Iran Entities have an
interest in the blocked assets that warrant them to attachment
in aid of execution of judgment. In addition, the Iran Entities
received notice of this action and have failed to appear and
assert a claim as to any of the assets.
Pursuant to Rule 69(a), Fed.R.Civ.P., a money judgment is
enforced by a writ of execution. "The procedure on execution
-and in proceedings supplementary to and in aid of judgment
or execution-must accord with the procedure of the state
where the court is located, but a federal statute governs to the
extent it applies." Id. New York CPLR § 5225(b) governs the
enforcement of a judgment as to property not in the possession
of a judgment debtor. It states in part:
Upon a special proceeding commenced by the judgment
creditor, against a person in possession or custody of
money or other personal property in which the judgment
debtor has an interest, or against a person who is a
transferee of money or other personal property from the
judgment debtor, where it is shown that the judgment
debtor is entitled to the possession of such property or that
the judgment creditor's rights to the property are superior to
those of the transferee, the court shall require such person
to pay the money, or so much of *422 it as is sufficient
to satisfy the judgment, to the judgment creditor and, if the
amount to be so paid is insufficient to satisfy the judgment,
to deliver any other personal property, or so much of it as is
of sufficient value to satisfy the judgment, to a designated
sheriff. ... Notice of the proceeding shall also be served upon
the judgment debtor in the same manner as a summons or
by registered or certified mail, return receipt requested. The
court may permit the judgment debtor to intervene in the
proceeding.
Id. Petitioners have come forward with evidence that
respondent Bank of Tokyo is "a person in possession or
custody of money" that belongs to the Iran Entities, a fact that
Bank of Tokyo does not dispute. The named judgment debtors
are the Islamic Republic of Iran, the Iranian Ministry of
Information and Security, and the Iranian Islamic Revolution
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 334 7
Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ, New ... , 919 F.Supp.2d 411 ...
Guard Corps, and petitioners have come forward with
evidence that the Iran Entities function as instrumentalities
of the Islamic Republic of Iran. Pursuant to section 201(a)
of the TRIA, as instrumentalities of the Islamic Republic
of Iran, "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." Note, 28 U.S.C. § 1610. Under CPLR §
5225(b ), "the judgment debtor is entitled to the possession of
such property .... "
Based on the foregoing, this Court concludes that the
petitioners have established their entitlement to an order
attaching the Iran Entities' funds that are possessed by the
respondents and that they have satisfied the procedure set
forth by New York CPLR § 5225(b).
V This Court and the Parties Accept the Representations
of the United States that No OFAC License Is Required to
Authorize Release of the Blocked Assets.
While the respondent does not oppose the petitioners' motion,
it notes concerns that OFAC must issue a license specific
to the blocked assets before they can be made available
for attachment. (Response Mem. at 2-3.) It states that if it
were to turn over the funds without an OFAC license, it
could be subject to civil and criminal penalties, (Response
Mem. at 3.) The IEEPA sets forth civil and criminal penalties
for violating the statute and any related license, order,
regulation or prohibition. 50 U.S.C. § 1705. As respondent
notes, the Department of Treasury also has stated on its
website that "[a] license is an authorization from OFAC to
engage in a transaction that otherwise would be prohibited. "20
Respondent argues that the petitioners should bear any risks or
expenses associated with releasing the blocked funds. (Resp.
Mem. at 3.)
At the invitation of the Court and in response to the current
motion, the United States submitted a Statement of Interest
pursuantto 28 U.S.C. § 517. The Statement concludes that "in
the event a court determines that blocked assets are subject
Footnotes
to TRIA, those funds may be distributed without a license
from OFAC." (Statement of Interest at 3.) The Statement
attaches a January 6, 2006 letter addressed to Judge Marrero
in Weininger v. Castro, which asserted in identical terms that
if the TRIA applied to the underlying funds, the funds can
be distributed without a license from OFAC. (Statement of
Interest Ex. E.) See also Weininger v. Castro, 462 F.Supp.2d
457, 499 (S.D.N.Y.2006) (quoting same). Petitioners also
state that they have kept OFAC informed of this litigation
*423 and submitted a copy of the present motion to OFAC,
as required by 31 C.F.R. § 501.605. (Seniawski Supp. Dec.
,r,r 3--4 & Ex. 2.)
Following the submissions by the government and the
petitioners, Bank of Tokyo now "accepts the representations
of counsel for the Petitioners about its communications with
OFAC and accepts the Government's stated position that a
turnover order of this Court would be sufficient" to permit
Bank of Tokyo "to disburse the Blocked Assets without the
need for a separate OFAC license." (Response to Statement
oflnterest ,r 3.)
This Court is aware of no contrary authority that would
require an OFAC license in this instance. It accepts the
Statement of Interest's assertion that no OFAC license is
required.
CONCLUSION
The petitioners' motion for summary judgment is GRANTED.
(Docket# 36.) The Clerk is directed to terminate the motion.
Petitioners are directed to submit a proposed order, on
notice to the respondent, within 14 days of the date of this
Memorandum and Order.
SO ORDERED.
All Citations
919 F.Supp.2d 411
1 Section 1605A, like its predecessor 28 U.S.C. § 1605(a)(7), exempted from foreign immunity any state that engaged in
terrorism-related activities or provided material support to such activities.
2
3
4
See http://www.treasury.gov/resource-center/sanctions/SDN-LisVPages/default….
See Pub.L. 110-181 , Div. A, § 1083(b)(1 )(A)(iii), Jan. 28, 2008, 122 Stat. 341.
http://www.treasury.gov/abouVorganizational-structure/offices/Pages/Off…
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 334 8
Estate of Heiser v. Bank of Tokyo Mitsubishi UFJ, New ... , 919 F.Supp.2d 411 ...
5 Available at http://www.treasury.gov/ofac/downloads/tllsdn.pdf.
6 See http://www.bmi.ir/Fa/uploadedFiles/FinanceReportFiles/2011 _ 2_ 13/f97c06b161 _2752675b48.pdf.
7 See http://www.cbi.ir/simplelist/3088.aspx.
8 See http://www.banksepah.eo.uk/downloads/Annual_Report_and_ Financial_Statements_31_03_05.pdf.
9 See http://www.banksepah.eo.uk/?page=13.
10 http://www.cbi.ir/simplelist/2389.aspx.
11 http://www.treasury.gov/press-center/press-releases/Pages/hp 1231.aspx.
12 http://www.treasury.gov/connect/blog/pages/No-Safe-Port-for-lRISL.aspx.
13 http://www.treasury.gov/connect/blog/pages/No-Safe-Port-for-lRISL.aspx.
14 http://www.treasury.gov/press-center/press-releases/Pages/tg 1212.aspx.
15 http://eurlex.europa.eu/LexUriServ/LexUriServ.do? uri=OJ:L:2011 :319:0011 :0031 :EN:PDF
16 http://www.hm-treasury.gov.uk/d/finsanc_public_notice_reg1245_ 021211.pdf
17 http://www.treasury.gov/press-center/press-releases/Pages/hp 1130.aspx.
18 http://www.treasury.gov/press-center/press-releases/Pages/hp 1130.aspx.
19 http://www.treasury.gov/ofac/downloads/t11 sdn.pdf.
20 http://www.treasury.gov/resource-center/faqs/Sanctions/Pages/answer.asp… 60.
End of Document © 2021 Thomson Reuters. No claim to original U.S.
Government Works.
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 334 9

ANNEX335

Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 1 of 18
UNTED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------~ X ·· · ·- ---------
THE ESTATE OF MICHAEL HEISER, deceased;
GARY HEISER, FRANCIS HEISER; THE
ESTATE OF LELAND TIMOTHY HAUN,
deceased; IBIS S. HAUN; MILAGRITOS PEREZDALIS;
SENATOR HAlJN; THE ESTATE OF
JUSTIN R. WOOD, deceased: RICHARD W.
WOOD: KATHLEEN M. WOOD: SHAWN M.
WOOD: THE EST ATE OF EARL F. CARTRETTE,
JR., deceased: DENISE M. ElCHST AEDT;
ANTHONY W. CARTRETTE; LEWIS W.
CARTRETTE; THE ESTA TE OF BRIAN MCVEIGH,
deceased; SANDRA M. WETMORE; JAMES V.
WETMORE; THE ESTATE OF MILLARD D.
CAMPBELL: MARIER. CAMPBELL BESSIE A.
CAMPBELL; THE ESTA TE OF KEVIN J. JOHNSON,
deceased: SHYRL L. JOHNSON; NICHOLAS A.
JOHNSON, A MINOR, BY HIS LEGAL GUARDIAN
SHYRL L. JOHNSON; LAURA E. JOHNSON:
BRUCE JOHNSON; THE ESTATE OF JOSEPH E.
RIMKUS, deceased; BRIDGET BROOKS; JAMES R.
RIMKUS: ANNE M. RIMKUS; THE ESTATE
OF BRENT E. MARTHALER, deceased; KATIE L
MARTHALER; SHARON MARTHALER; HERMAN C.
· MARTHALER III; MATTHEW MARTHALER; KIRK
MARTHALER; THE ESTATE OF THANH VAN
NGUYEN, deceased: CHRISTOPHER R. NGUYEN;
THE ESTATE OF JOSHUA E. WOODY, deceased;
DAWN WOODY; BERNADINE R. BEEKMAN;
GEORGE M. BEEKMAN: TRACY M. SMITH;
JONICA L. WOODY; TIMOTHY WOODY; THE
EST A TE OF PETER J. MORGERA, Deceased;
MICHAEL MORGERA; THOMAS MORGERA; THE
ESTATE OF KENDALL KITSON, JR., Deceased;
NANCY R. KITSON; KENDALL K. KITSON;
STEVE K. KITSON; NANCY A. KITSON; THE ESTATE
OF CHRISTOPHER ADAMS, deceased; CATHERINE
ADAMS; JOHN E. ADAMS; PATRICK D. ADAMS;
MICHAEL T. ADAMS; DANIEL ADAMS; MARY YOlJNG;
ELIZABETH WOLF; WILLIAM ADAMS; THE ESTATE
OF CHRISTOPHER LESTER, deceased; CECIL H. LESTER;
JUDY LESTER; CECIL H. LESTER, JR.; JESSICA F.
LESTER; THE ESTATE OF JEREMY A. TAYLOR, deceased;
LAWRENCE E. TAYLOR; VICKIE L. TAYLOR; STARLINA
11CV1602 (LTS)(MHD)
[RE: Islamic Republic of
Iran, Iranian Ministry of
Information and Security,
and the Iranian Islamic
Revolutionmy Guard Corps.,
Judgment Debtors]
THIRD-PARTY
PETITION IN
INTERPLEADER OF
BANK OF BARODA,
NEW YORK BRANCH
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 2 of 18
D. TAYLOR; THE ESTATE OF PATRICKP. FENNIG,
deceased; THADDEUS C. FENNIG; CATHERINE FENNIG;
PAUL D. FENNIG; and MARK FENNIG,
Petitioners,
V.
BANK OF BARODA, NEW YORK BRANCH,
Respondent.
-------- ---- --- -----
BANK OF BARODA, NEW YORK BRANCH,
Interpkac.ler Petitioner,
V.
BANK SADERAT IRAN; BANK MELLI IRAN;
EXPORT DEVELOPMENT BANK OF IRAN;
BEHRAN OTL CO.; DR. ICC. CHATURVEDI;
MEHRAD KALA AND CO. LTD.; OCOO
ALBAN IMEX; ABHARRIS CO.; MARYAM
MASHKOORl; MOJTABA ALA VI, A/C;
CHABOKRAN TOOLS INTERNATIONAL
TRANSPORT CO.; MOHAMMADMEHDI
TAYEBIKAMARDY; THE UNITED STATES
OF AMERICA, THE ESTATE OF MICHAEL
HEISER, deceased; GARY HEISER, FRANCIS HEISER;
THE ESTATE OF LELAND TIMOTHY HAUN,
deceased; IBIS S. HAUN; MILAGRITOS PEREZDALIS:
SENATOR HAUN; THE ESTATE OF
JUSTIN R. WOOD, deceased: RICHARD W.
WOOD; Kl\ THLEEN M. WOOD; SHAWN M.
WOOD; THE ESTATE OF EARL F. CARTRETTE,
JR., deceased; DENISE M. EICHSTAEDT;
ANTHONY W. CARTRETTE; LEWIS W.
CARTRETTE; THE ESTATE OF BR TAN MCVEIGH,
deceased; SANDRA M. WETMORE; JAMES V.
WETMORE; THE ESTATE OF MILLARD D.
CAMPBELL; BESSIE A. CAMPBELL; THE ESTA TE
OF KEVIN J. JOHNSON, deceased; SHYRL L.
JOHNSON; NICHOLAS A. JOHNSON, A MINOR,
BY HIS LEGAL GUARDIAN SHYRL L. JOHNSON;
2
X
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 3 of 18
LAURA E. JOHNSON; BRUCE JOHNSON; THE
ESTA TE OF JOSEPH E. RIMKUS, deceased;
BRIDGET BROOKS; JAMES R. RIMKUS; ANNE M.
RIMKUS; THE ESTATE OF BRENT E. MARTHALER,
deceased; KA TIE L. MAR THALER; SHARON
MARTHALER; HERMAN C. MARTHALER III;
MATTHEW MARTHALER; KIRK MARTHALER;
THE ESTA TE OF THANH VAN NGUYEN, deceased;
CHRISTOPHER R. NGUYEN; THE ESTATE OF
JOSHUA E. WOODY, deceased; DAWN WOODY;
BERNADINE R. BEEKMAN; GEORGE M. BEEKMAN;
TRACY M. SMITH; JONICA L. WOODY; TIMOTHY
WOODY; THE ESTATE OF PETER J. MORGERA,
Deceased: MICHAEL MORGERA; THOMAS
MORGER.A,; THE ESTA TE OF KENDALL KITSON, JR. ,
Deceased; NANCY R. KITSON; KENDALLK. KITSON;
STEVE K. KITSON; NANCY A. KITSON; THE ESTATE
OF CHRISTOPHER ADAMS, deceased; CATHERINE
ADAMS; JOHN E. ADAMS; PATRICK D. ADAMS;
MICHAEL T. ADAMS: DANIEL ADAMS; MARY YOUNG;
ELIZABETH WOLF~ WILLIAM ADAMS; THE ESTATE
OF CHR TSTOPHER LESTER, deceased; CECIL H. LESTER;
JUDY LESTER; CECIL H. LESTER, JR.; JESSICA F.
LESTER; THE ESTATE OF JEREMY A. TAYLOR, deceased;
LAWRENCE E. TAYLOR; VICKIE L. TAYLOR; STARLINA
D. TAYLOR; THE ESTATE OF PATRICK P. FENNIG,
deceased; THADDEUS C. FENNlG; CATHERINE FEl\TNIG;
PAUL D. FENNIG; and MARK FENNIG,
Interpleader Respondents.
----- ---- ---- -------- X
THIRD-PARTY PETITION IN INTERPLEADER
Respondent and lnterpleader Petitioner Bank of Baroda, New York Branch, by its
attorneys Wom1ser, Kiely, Galef & Jacobs LLP, as its third-party petition in interpleader alleges
as follows:
NATURE OF PROCEEDINGS
1. Bank of Baroda, New York Branch ("Bank of Baroda NY") is bringing this thirdparty
petition in interpleader pursuant to Sections l 006 and 5239 of the New York Civil Practice
3
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 4 of 18
Law and Rules ("CPLR"), Rule 22 of the Federal Rules of Civil Procedure ("FRCP"), Sections
..
1335 and 2361 of Title 28, United States Code ("U.S.C."), and Section 134 of the New York
Banking Law.
2. Petitioners in lhe first-captioned proceedings above have filed in this Court and
served on Bank of Baroda NY a Petition for Turnover Order Pursuant To Fed.R.Civ.P. 69 and
N.Y.C.P.L.R. § 5225 and 5227, dated March 8, 2011 (the "Petition"), seeking a turnover of
certain funds that Bank of Baroda NY has restrained and placed in blocked accounts pursuant to
regulations instituted by the United States Department of Treasury, Office of Foreign Assets
Control (the "OF AC Regulations") and Executive Orders issued by the President of the United
States. See a copy of the Petition attached hereto as EJ:ill(bit 1.
3. Specifically, the Petition seeks an order from the Court directing Bank of Baroda
NY to turn over to the United States Marshal all of the assets that have been blocked by Bank of
Baroda NY in which Petitioners believe Iran and/or its agencies, instrumentalities, and any
separate jmidicaJ entity have an interest.
4. Bank of Baroda NY seeks a determination from the Court regarding the rights, if
any, of Interpleader Respondents and any other interested parties to those funds that have been
held by Bank of Baroda NY pursuant lo tht: OF AC Regulations and Executive Orders.
5. Bank of Baroda NY now b1ings this Third Paiiy Petition in lnterpleader to obtain
a determination from the Court as to (i) whether the funds blocked are subject to execution as
they are electronic fund transfers; and (ii) whether the funds blocked can even be considered
property in which Iran has an interest or Iran's "assets", when Iran was neither the originator nor
the beneficiary of the electronic fund transfers; and (iii) even if the electronic fund tra11sfers are
considered property in which Iran has an interest or Iran's assets and can be executed on,
4
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 5 of 18
whether Petitioners have a superior interest to such wire transfers over any other judgment
creditors with judgments against Tran or the agencies or instrumentalities.
6. Bank of Baroda NY has named three (3) banks, Bank Sa<lerat Iran, Bank Melli
Iran, and Exporl Development Bank of Iran (together, the "Iranian Banks") as Interpleader
Respondents because the electronic fund transfers that were inte1Tupted and blocked by Bank of
Baroda NY were en route to accounts of individuals and entities in branches of those three
banks.
7. Bank of Baroda NY has named Behran Oil Co.; Dr. K.C. Chaturvedi; Mehrad
Kala and Co. Ltd.; Ocoo Alban lmex; Abhanis Co; Maryam Mashkoori; Mojtaba Alavi, A/C;
Chabokran Tools International Transport Co.; Mohammadmehdi Tayebikamardy, as Interpleader
Respondents as each of these Interpleader Respondents was the beneficiary of an electronic fund
transfer that was in the process of being h·ansmitted when it was intercepted and blocked by
Bank of Baroda NY as intermediary bank.
8. Bank of Baroda NY has also named the United States of America as an
Interpleader Respondent herein in order for a determination of the rights to the electronic fund
transfers. The United States Department of Treasury has promulgated the regulations pursuant to
which the electronic fund transfers have been blocked. These regulations, in part, require that
any persons subject to jurisdiction in the United States that are in possession or control of
property in which Iran or an agency or instrumentality of Iran has an interest, is prohibited from
transferring, disbursing that property unless pursuant to a license issued by the United States to
Iran its agency or instrumentality.
PARTIES
9. Respondent and Interpleader Petitioner Bank of Baroda NY is the New York
5
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 6 of 18
branch of Bank of Baroda, which is headquartered in Baroda, India. Bank of Baroda NY's office
is at One Park Avenue, New York, New York. Bank of Baroda NY is an agency or
instrnmentality of the Govenunent of India under the Foreign Sovereign Immunities Act (28
U.S.C. § 1603(b)), as the Government oflndia owns 53.81 % of the shares of Bank of Baroda.
10.. Upon information and beliet: -Bank Saderat Iran is a bank headquartered in Iran
with branches throughout the world.
11 . Upon information and belief, Bank Melli Iran is a bank headquartered in Iran with
branches throughout the world.
12. Upon information and belief, Export Development Bank of Iran 1s a bank
headquartered in Iran with branches throughout the world.
13. Upon infonnation and belief, each of the Iranian Banks is considered an "agency
or instrumentality" of the Islamic Republic of Iran under 28 U.S .C. § 1603(b).
14. The United States of America (the "United States") is a governmental entity that,
through certain of its agencies and departments, promulgated ce1tain regulations requi1ing the
blocking of certain assets, some of which are the subject of the Petition and this Third-Party
Petition and Interpleader, and through the Executive Branch, has issued Executive Orders.
15. The United States, via the OFAC Regulations or other regulations promulgated by
the United States Department of Treasury, has listed the Iranian Banks on OF AC's list of
Specially Designated Nationals and Blocked Persons and/or in Appendix A to 31 C.F.R. § 560,
Appendix A.
16. lnterpleader Respondents Behran Oil Co.; Dr. K.C. Chaturvedi; Mehrad Kala and
Co. Ltd.; Ocoo Alban Imex; Abharris Co; Maryam Mashkoori; Mojtaba Alavi, A/C; Chabokran
Tools International Transport Co.; Mohammadmehdi Tayebikamardy, are each the beneficiary of
6
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 7 of 18
an electronic fund transfer that was in the process of being transmitted when it was intercepted
and blocked by Bank of Baroda NY, as intermediary bank.
17. Upon info1mation and belief, Petitioners ru·e plaintiffs in, or beneficiaries of tbe
judgments issued in~ the consolidated cases of Heiser v. Iran, (Case No. 00-cv2329(RCL))and
Campbell v. Iran, (Case No. 01cv2104(RCL)) in the United Sfates District Court, District of
Columbia.
JURISDICTION AND VENUE
18. This Court has subject matter jurisdiction over this proceeding pursuant to 28
U.S.C. § 1331 as it arises under the laws and treaties of the United States, and 28 U.S.C. § 1367
because the matters at issue in this proceeding are so related to those in the Petition, which is
within the original jurisdiction of this Court, that they form part of the same case or controversy.
The Court also has jurisdiction pursuant to 28 U.S.C. § 1335 because this proceeding c;oncerns
money or propeiiy with a value of over $500 in the possession of Bank of Baroda NY and two or
more of the Interpleader Respondents are of diverse citizenship.
19. Venue is proper in this Court pursuant to 28 U.S.C. 1391(b) because the Petition
seeks to enforce a judgment that has been filed in this district and the property that is the subject
of the Petition has been alleged to be located in this District.
FACTUAL BACKGROUND
20. Upon infom1ation and belief, Petitioners obtained judgments in two actions in the
United States District Court, Dlstrict of Columbia (Heiser v. Iran, 00cv2329(RCL)) and
Campbell v. Iran, (0lCV 2104(RCL)) in a total amount of $591 ,089,966.00 plus post-judgment
interest (the "Judgments") against judgment debtors the Islamic Republic of Iran, the Iranian
Ministry of Information and Security, and the Iranian Islamic Revolutionary Guard Corps.
7
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 8 of 18
("collectively "Iran"). See Exhibit l.
21. Upon information, the Judgments were entered against Iran rn both cases on
default.
22. Petitioners do not allege in Lheir Petition that they complied with 28 U.S.C. §
1603, which would require that they send a copy of the default judgment to the judgment debtors
in a manner provided for service in 28 U.S.C. § 1608.
23. Upon information and belief and as alleged in the Petition, on or about September
8, 2008 and on or about December 8, 2010, Petitioners regisleri;;<l the Judgments in the United
States District Court, Southern District of New York.
24. On or about December 23, 2010, Petitioners' counsel mailed a letter to Bank of
Baroda NY requesting that Bank of Baroda NY "immediately restrain any and all assets and
debts owed to Iran, any agencies or instrumentalities of Iran, and any separate juridical entitic:s in
which Iran may have an interest, din:ct or indirect ... pending further order of the Cami."
25. On or about January 3, 2011 , the United States Marshals Service, Southern
District of New York served a writ of execution for $254,431,963.42 on Rank of Baroda N"i.
26. On or about March 8, 2011, Petitioners served the Petition on Bank of Baroda
NY, seeking the turnover of the fw1ds held by Bank of Baroda NY pursuant to OFAC
Regulations.
27. As of September 30, 2010, Bank of Baroda, solely as an intermediary bank and
pursuant to the OF AC Regulations, has blocked ce1iain electronic fund transfers.
28. Each of these electronic fund transfers originated in India and was remitted to
Bank of Baroda NY as an intermediary bank en route to the accounts held by certain individual
and entity lnterpleader Respondents in the Iranian Banks (the "Funds").
8
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 9 of 18
29. Whenever electronic fund transfers are denominated in United States Dollars, the
transfers must pass through a bank licensed in the United States before going to its ultimate
destination, even if both the originator and the beneficiary are located outside the United States.
30. Kim Chemicals Limited, Mumbai India, remitted funds through Bank of Baroda,
Crawford Market Branch, Mumbai India, via Bank of Baroda NY as the intermediary bank, for
credit to Interpleader Respondent Behran Oil Co.' s account with Interpleader Respondent Bank
Saderat Iran in Duhai, United Arab Emirates.
31 . Dr. K.C. Chaturvcdi in Chittorgarh, Rajasthan, India remitted funds through Bank
of Baroda, Udaipur Branch in Rajasthan, India, via Bank of Baroda NY as intermediary bank, for
credit to Interpleader Respondent Dr. K.C. Chaturvedi's account in Bank Melli Iran in London.
32. N.R. Agarwal Industries Ltd. in India remitted funds through Bank of Baroda,
Mahatma Gandhi Road Branch in Mumbai, India, via Bank of Baroda NY as the inte1111ediary
bank, for credit to Interpleader Respondent Mehrad Kala and Co Ltd. 's account with Interpleader
Respondent Export Development Bank ofiran, Central Branch in Tehran, Iran.
33. Bank of Baroda, Chandavarkar Road, Matunga, India remitted funds, via Bank of
Baroda NY as the inte1mediary bank, for credit to lnterpleader Respondent Ocoo Alban Imex's
account with Intcrplcader Respondent Export Development Bank of Iran, Shiraz Branch.
34. LCC Mfg. Co. Pvt. Ltd., Coimbatore, lndia, remitted funds through Bank of
Baroda, Coimbatore, India, via Bank of Baroda NY as the intem1ediary bank, for credit to
Interpleader Respondent Abharris Co.'s account at the Export Development Bank of Iran
(Mirdarnad Branch), Tehran, Iran.
35. Ashit Patt:l, Vasna, Ahmedabad, India, remitted funds through Bank of Baroda,
Ashram Road, Ahmedabad, India, via Bank of Baroda NY as the intermediary bank, for credit to
9
Annex 335
Case 1:ll-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 10 of 18
Interpleader Respondent Maryam Mashkoori 's account with Interpleader Respondent Bank
Saderat Iran, Mashhad, Iran.
36. PSONS Limited, Dubai, United Arab Emirates, remitted funds through Bank of
Baroda, Dubai, United Arab Emirates, via Bank of Baroda NY as the intennediary bank, for final
credit to Interpleader Respondent Mojtaba Alavi, A/C's account with Interpleader Respondent
Bank Melli Iran (Siba), Kara.ma Branch, Dubai, United Arab Emirates.
?,7_ Breeze Project India Private Ltd., Vasant K.unj, New Delhi, India, remitted funds
through Bank of Baroda, Nehru Place Branch, New Delhi, India, via Bank of Baroda NY as the
intermediary bank, for credit to Interp1eader Respondent Chabokran Tools International
Transport Co.' s account with Interpleader Respondent Bank Saderat Iran, Mashhad Iran.
38. Iswar Textile Agency, Bhilwara, Rajasthan, India, remitted funds through Bank of
Baroda, Bhilwara Branch, Rajasthan, India, via Bank of Baroda NY as the inten11ediary bank, to
Interpleader Respondenl Mohammadmehdi Tayebikamardy's account with lnterpleader
Respondent Bank Export Development Bank ofiran (Mirdamad Branch), Tehran, Iran.
39. Bank of Baroda NY blocked these electronic fund transfers pursuant to the OFAC
Regulations and Executive Orders of the President of the United States.
40. One such regulation provides that property in which Iran has any interest that is in
the possession or control of persons subject to the jurisdiction of the United States may "not be
transferred, paid, expo1ied, withdrawn or otherwise dealt in except as authorized." See 31 C.F.R.
§ 535.201.
41. Upon information and belief, one way for an Iranian entity to be so authorized is
by obtaining a lic.;ense from the United States Department of Treasury. See, e.g., 31 C.F.R. §
535.215.
Annex 335
Case 1:ll-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 11 of 18
42. OF AC has published a list of Specially Designated Nationals and Blocked
Persons on its website at www.treasurv. Q:ov/resource-center/sanctions/SDNList/
Pages/default. aspx which lists those individuals and companies owned or controlled by, or
acting for or on behalf of, certajn "target" L:ountries. It also lists individuals, groups, and entities,
such as te1Torists and narcotics traffickers designated under certain programs that are not
country-specific (the "OFAC List").
43. Upon information and belief, the Interpleader Respondents Iranian Banks all
appear on the OF AC List.
44. Because the Iranian Banlcs appear on the OF AC List, the filter that had been
instituted by Bank of Baroda NY instantaneously blocked the electronic fund transfers at issue
herein.
45. Upon inf01mation and belief, none of the beneficiaries referenced in paragraphs
77 through 85 above appear on the OF AC List.
46. Pursuant to the OF AC Regulations, any financial institution that has blocked
assets of entities or individuals on the OF AC List must submit an Annual Report of Blocked
Property to OF AC, listing the property and funds retained.
47. Bank of Baroda NY has complied with the OFAC Regulations and has submitted
the annual report to OFAC.
48. In their Petition, Petitioners contend that, having allegedly delivered a w1it of
execution with respect to the Judgments to the United Marshal's Office of the Southern District
of New York on December 10, 2010, and having filed the Petition on March 8, 2011, their claim
to the Funds takt: priority over any other claims by any other person.
49. In Shipping Coro. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2nd Cir.
11
Annex 335
Case 1:ll-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 12 of 18
2009); Hawknet, Ltd. v. Overseas Shipping Agencies, 590 F.3d 87 (2nd Cir. 2009); and Eitzen
Bulk A/S v. Ashapura Mi:nechem Ltd., 632 F.3d 53 (2nd Cir. 2011), the Second Circuit held that
electronic fund transfers that are restrained by an intennediary bank are not available for
execution because, among other things, an elt:dronic fund transfer is neither the property of the
originator nor of the beneficiary.
50. Given that the funds that Petitioners herein are seeking to attach are electronic
fund transfers, it would seem that those funds would not be attachable under Jaldhi, Hawknct,
and Eitzen Bulle
51. Bank of Baroda NY is aware of the language of Section 201 of the Terrorism Risk
Insurance Act of 2002 (the "TRIA") which provides:
Notwithstanding 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 te1Torist party on a claim based upon
an act of terrorism, or for which a terrorist party is not immune
under section 1605(a)(7) of title 28, United States Code, the
blocked assets of that terrorist paiiy (including the blocked assets
of any agency or instrumentality of that ten-orist paiiy) 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.
52. Upon information and belie±: Petitioners contend that the blocked assets are
subject to execution to satisfy the Judgments because they constitute "blocked assets" of lran or
of an "agency or instrumentality" of Iran, within the meaning of TRIA § 201.
53. A recent Southem District of New York decision in Levin v. Bank of New York,
09cv5900 (RPP), 2011 U.S. Dist. LEXIS 23779 (S .D.N.Y. Mar. 4, 2011) indicated that,
pursum1t to TRIA and FSIA, assets in which Iran has an interest, even if those assets are
electronic fund transfers, may be available for execution by judgment creditors.
Upon information and belief, the part of the decision in Levin that held that
12
Annex 335
Case 1:ll-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 13 of 18
electronic fund transfers in which Iran has an interest is subject to execution, has not been
appealed to the Second Circuit.
55. Therefore, there might be a difference of opinion among the comis in this Circuit
as to whether electronic fund transfers in which Iran has any interest is subject to execution.
56. In The Bank of New York v. Rubin, 484 F.3d 149 (2nd Cir. 2007), the Second
Circuit, relying on Weinstein v. Islamic Republic of Iran, 299 F.Supp.2d 63 (E.D.N.Y. 2004)
held that certain funds held in American banks that belonged to some Iranian banks (some of
which are also Interpleader Respondents herein) were not available for attachment because they
were not considered "frozen".
57. Moreover, upon infonnation and belief, unlike the cases cited above, neither the
originators nor the beneficiaries of the electronic fund transfers that are the subject of the Petition
appear on either the OF AC List, nor are they otherwise subject to having their assets blocked
under OP AC Regulations.
58. It is also possible that Interpleader Respondents Iranian Banks will seek
ownership or possession of the electronic fund transfers that were blocked by Bank of Baroda
NY.
59. Intcrplcader Respondent United States may also contend that (i) Petitioners'
actions do not suffice to give them p1iority with respect to the funds; (ii) that some or all of the
Funds should remain under OFAC's contrnl in blocked accounts in Bank of Ba.roda NY; (iii) the
Funds are not subject to the OFAC Regulations because they are not property in which Iran or its
agencies or instrumentalities have any interest; and/or (iv) the Funds may not be used to satisfy
judgments and/or should be released pursuant to a valid license issued by OF AC under
applicable regulations.
13
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 14 of 18
60. Given the differing court opinions, and the possibility of disputing claims as to the
Funds, Bank of Baroda NY is requesting that this Court detennine who has the rights to
electronic fund transfers blocked by Bank of Baroda NY, including whether Iran or an agency or
instrumentality of Iran have any interest in the Funds for purpusc:s of the OF AC Regulations.
61. Bank of Baroda NY also seeks guidance as to whether any of the Iranian Banks _
hold a license to transfer or otherwise deal with assets or property in the United States.
AS AND FOR A FIRST CAUSE OF ACTION
(Intcrplcader pursuant to Fed. R. Civ. P. 22)
62. Bank of Baroda NY repeats and realleges paragraphs 1 through 61 as if fully set
forth hereat.
63. Federal Rule of Civil Procedure 22(a)(l) provides that "persons with claims that
may expose a plaintiff to double or multiple liability may be joined as defendants and required to
interplcad", and f-ederal Rule of Civil Procedure 22(a)(2) provides that "a defendant exposed to
similar liability may seek interpleader through a crossclaim or counterclaim."
64. Bank of Baroda NY is a disinterested stakeholder of the Funds.
65. The attempt by Petitioners to enforce judgments by attaching blocked assets being
held potentially for the benefit of parties other than the judf,1111ent debtors presc:nts adverse claims
within the meaning of Fed. R. Civ. P. 22.
66. Bank of Baroda NY faces, or may face, conflicting claims by Interpleader
Respondents with respect to the Funds, thereby exposing Bank of Baroda NY to multiple
liability absent resolution of all claims in one proceeding.
67. Bank of Baroda NY is pn::parc:d to deposit the Funds into the registry of the Court
pending the Court's determination of the lnterpleader Respondents' entitlements thereto.
14
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 15 of 18
68. Bank of Baroda NY requests that the Court make a determination as to the
Interpleader Respondents' entitlements, if any, to the Funds.
AS AND FOR A SECOND CAUSE OF ACTION
(Order pursuant to 28 U.S.C. § 2361)
69. Bank of Baroda NY repeats and realleges paragraphs 1 through 68 as if fully set
forth hereat.
70. 28 U.S.C. § 2361 provides that:
in any civil action of interpleader or in the nature of interpleader
under section 1335 of this title, a district wurt may issue its
process for all claimants and enter its order restraining them from
instituting or prosecuting any proceeding in any State or United
States court affecting the property, instrument or obligation
involved in the interpleader action until further order of the court.
Such district court shall hear and determine the case, and may
discharge the plaintiff from further liability, make the injunction
permanent, and make all appropriate orders to enforce its
judgment.
71. Bank of Baroda NY is a disinterested stakeholder of the Funds.
72. Bank of Baroda NY requests that the Comt issue an order restraining and
permanently enjoining the Tnterpleader Respondents from instituting or prosecuting any action or
claim against Bank of Baroda NY in any jurisdiction arising from or relating to any claim to the
Funds.
73. Bank of Baroda NY requests that the Court discharge Bank of Baroda NY from
the first-captioned proceedings above.
AS AND FOR A THIRD CAUSE OF ACTION
(Interpleader Pursuant to CPLR § 5239)
74. Bank of Baroda NY Bank of Baroda NY repeats and realleges paragraphs
15
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 16 of 18
through 73 as if fully set forth hereat
75. CPLR § 5239 provides that
[p]rior to the application of property or debt by a sheriff or receiver
to the satisfaction of a judgment, any interested person may
commence a special proceeding against the judgment L;reditor or
other person with whom a dispute exists to detem1ine rights in the
property or debt", and that in such proceeding, the court "may
vacate the execution or order, void the levy, direct the disposition
of the property or debt, or direct that damages be awarded.
76. The attempt by Petitioners to enforce the .Tud!:,rments by executing on blocked
assets being held potentially for the benefit of parties other than the judgment debtors constitutes
a dispute regarding the right in property.
77. Bank of Baroda NY faces, or may face, conflicting claims by Interpleader
Respondents with respect to the Funds, thereby exposing Bank of Baroda NY to multiple
liability absent resolution of all claims in one proceeding.
78. Bank of Baroda NY requests that the Court issue an Order determining the rights
in the "property or debt" being held in the blocked account.
AS AND FOR A FOURTH CAUSE OF ACTION
(lnterpleader Pursuant to NY Banking Law § 134)
79. Bank of Baroda NY repeats and rcallcges paragraphs 1 through 78 as if fully set
fo1th hereat.
80. Pursuant to New York Banking Law§ 134(6)(a):
in all actions against any bank or trust company to recover for
moneys on deposit therewith, if there be any person or persons not
parties to the action, who claim the same fund, the court in which
the action is pending, may, on the petition of such bank or trust
company, and upon eight days' notice tu the plaintiff and such
claimants, and without proof as to the merits of the claim, make an
order amending proceedings in the action by making such
claimants parties defendant thereto; and the court shall thereupon
16
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 17 of 18
proceed to dete1mine the rights and interest of the several parties to
the action in and to such funds. The remedy provided in this
section shall be in addition to and not exclusive of that provided in
any other interpleader provision.
81. The attempt by Petitioners to enforce the Judgments by executing on blocked
assets being held potentially for the benefit of parties other than the judgment debtors presents
claims to the same fund within the meaning of Fed. R. Civ. P. 22.
82. Bank of Baroda NY faces, or may face, conflicting claims by Interpleader
Respondents with respect to the Funds, thereby exposing Bank of Baroda NY to multiple
liability absent resolution of all claims in one proceeding.
83. Bank of Baroda NY requests the Court to determine the rights, if any, of the
lnterp]eader Respondents with respect to the electronic fund transfers that were blocked by Bank
of Baroda NY.
AS AND FOR A FIFTH CAUSE OF ACTION
(Attorneys fees and costs)
84. Bank of Baroda NY repeats and realleges paragraphs 1 through 83 as if fully set
forth hereat.
85. Bank of Baroda NY is a disinterested stakeholder in the Funds.
86. Under case law in the Second Circuit, disinterested stakeholders who assert
interpleader are entitled to attorneys' fees and costs.
87. Upon direction or an Order from the Court, Bank of Baroda :NY is prepared to
deposit the Funds into the registry of the Court, from which an award to Bank of Baroda NY of
attorneys fees and costs may be taken.
WHEREFORE, Responu.t:nt and lnterpleader Petitioner Bank of Baroda, New York
Branch requests:
17
Annex 335
Case 1:11-cv-01602-LGS-MHD Document 11 Filed 04/11/11 Page 18 of 18
(a) an order and judgment determining the rights, if any, of each of the Interpleader
Respondents to the Funds;
(b) determining whether and to what extent any of the Funds are subject to execution
to satisfy the Judgments in favor of any of the Interpleader Respondents against Iran;
( c) discharging Bank of Baroda NY from any and all liability to the Interpleader
Respondents, and any other persons who may have claims to, or an interest in, any of the Funds
that are tumed over the Petitioners or any of the Interpleader Respondents to satisfy the
Judgments, and pennanently enjoining the Intcrpleader Respondents from insiiluting or
prosecuting any claim or action against Bank of Baroda NY arising from or relating to any claim
to the Funds;
(d) Upon discharge of Bank of Baroda NY, dismissing Bank of Baroda NY as a party
to the first-above captioned proceedings;
(e) awarding to Bank of Baroda NY their costs and expenses in this proceeding,
including reasonable attorneys fees; and
(f) awarding to Bank of Baroda NY such other and further relief as may be just and
proper.
Dated: April 8, 2011
New York, New York
By:
Jennif;ef_~/&1a 010ugh (JM4303)
Jo~T. Ivforin (JM0390)
8 hird A venue, 26th Floor
~y ork, New York l 0022
(212) 687-4900
18
Annex 335
ANNEX 336

Estate of Heiser v. Bank of Baroda, New York Branch, Not Reported in F.Supp.2d (2013)
2013 WL 4780061
Only the Westlaw citation is currently available.
United States District Court,
S.D. New York.
The ESTATE OF Michael
HEISER et al, Petitioners,
V.
BANK OF BARODA, NEW
YORK BRANCH, Respondent.
No. 11 Civ. 01602(LGS).
I
July 17, 2013.
MEMORANDUM AND ORDER
LORNA G. SCHOFIELD, District Judge.
*1 Presently before the Court is the motion of Respondent,
Bank of Baroda, for attorney's fees and expenses pertaining to
Respondent's interpleader petition, totaling $34,795.64. For
the reasons that follow, Respondent's motion is granted in
part. Respondent is awarded fees totaling $10,438.69.
I. Factual Background
Petitioners, family members and the estates of seventeen U.S.
Air Force service members killed in a 1996 terrorist attack on
the Kho bar Towers in Saudi Arabia, hold judgments against
the Islamic Republic of Iran in the amount of $591,089,966.
See Estate of Heiser v. Islamic Republic of Iran, 659
F.Supp.2d 20, 31 (D.D.C.2009) (awarding $336,658,063);
Estate of Heiser v. Islamic Republic of Iran, 466 F.Supp.2d
229,356 (D.D.C.2006) (awarding $254,431,903.00).
Pursuant to the Office of Foreign Asset Control ("OFAC")
regulation, Respondent blocked certain electronic funds,
which were destined for three Iranian Banks (the "Blocked
Assets"). Petitioners filed a turnover petition on March 8,
2011, naming Bank of Baroda as Respondent and demanding
that it turn over the Blocked Assets pursuant to the Terrorism
Risk Insurance Act of2002 ("TRIA"), which authorizes funds
blocked pursuant to OFAC Regulation to be used in execution
of judgments against terrorist organizations.
On April 11, 2011, Respondent filed a third-party petition
in interpleader against thirteen individuals and entities. (Dkt.
No. 11). On August 8, 2011, Magistrate Judge Michael H.
Dolinger entered an order, which provided for service of
the turnover petition and related documents on the third
parties whom Respondent believed might assert a claim to the
Blocked Assets. (The "Service Order," Dkt. No. 39; see also
Dkt. No. 38).
On February 15, 2013, Judge Laura Taylor Swain, to whom
the case was previously assigned, granted Petitioners' motion
for summary judgment, ordering Respondent to tum over
the $119,827.68 in Blocked Assets, less $20,000.00 for
the attorney's fees and costs claimed by Respondent. (Dkt.
No. 76). The Order noted that Petitioners disputed that
Respondent was entitled to attorney's fees and costs and
ordered Respondent to hold the $20,000 in a blocked account
pending further order of the Court. (Id.). The February 15,
2013 Order also "discharged and released" Respondent "from
all liability and obligations" with respect to the Blocked
Assets once they were turned over to Petitioners. (Id.).
Respondent then filed the present motion seeking
compensation for the interpleader petition and attaching
invoices reflecting $30,796.50 in attorney's fees and
$3,999.14 in expenses, or a total of $34,795.64, incurred in
connection with this action. (Dkt. No. 78; Exhibit G to Morin
Deel.; Dkt. No. 79). Petitioners argue that (1) Respondent is
not entitled to any award of fees and costs because the work
that they did was unnecessary, but (2) if attorney's fees and
costs are awarded, the amount should be steeply reduced.
II. An Award of Fees and Costs Is Appropriate
*2 A "reasonable award of fees and costs" is available
to an interpleader plaintiff where such plaintiff is "(l) a
disinterested stakeholder, (2) who had conceded liability, (3)
has deposited the disputed funds into court, and (4) has
sought a discharge from liability." New York Life Ins. Co.
v. Apostolidis, 841 F.Supp.2d 711, 720-21 (E.D.N.Y.2012)
(quoting Septembertide Pub., B. V. v. Stein and Day, Inc., 884
F.2d 675, 683 (2d Cir.1989)). As a general rule, "[a]ttomey's
fees and costs are ... awarded to a disinterested stakeholder
who has expended time and money participating in a dispute
not of his own making and the outcome of which has no
impact on him." Wells Fargo Bank, NA. v. ESM Fund L
LP, 785 F.Supp.2d 188, 198 (S.D.N.Y.2011) afl'd, 504 F.
App'x 38 (2d Cir.2012) (quoting Weininger v. Castro, 462
F.Supp.2d 457, 501 (S.D.N.Y.2006)). Courts in this district
have awarded fees and costs to interpleader banks in turnover
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 336 1
Estate of Heiser v. Bank of Baroda, New York Branch, Not Reported in F.Supp.2d (2013)
actions. See, e.g., Weininger, 462 F.Supp.2d at 502; Rux v.
ABN-Amro Bank, NV., No. 08 Civ. 6588, 2009 WL 8660085,
at* 6 (S.D.N.Y. Apr. 14, 2009).
Here, Petitioners oppose the award of fees and expenses
to Respondent on the grounds that the interpleader was
unnecessary and ultimately abandoned. Petitioners argue
that Respondent's taking no further action relating to its
interpleader petition after the Court approved the Service
Order constitutes abandonment. To the contrary, Respondent
acted reasonably in ceasing to pursue the interpleader petition
after service procedures adequate to protect its interests
were adopted. Pursuant to the Service Order, Petitioners
assumed responsibility for serving persons and entities that
Respondent identified as potentially having an interest in
the Blocked Assets. The Court does not agree that the
interpleader was unnecessary or characterize Respondent's
action, which contributed to service of the relevant parties, as
"abandonment."
Here, Respondent is entitled to reasonable attorney's fees
and costs because Respondent is a disinterested stakeholder,
has conceded liability and has sought and received discharge
from future liability arising from the frozen funds in question.
Respondent expended time and money in a dispute from
which it had nothing to gain, and was successful in obtaining
judicial relief from future liability pertaining to the funds at
issue.
III. Reasonable Attorney's Fees and Costs
The Court next examines whether the attorney's fees and costs
claimed by Respondent are reasonable.
An interpleader is limited to recovering fees and costs
incurred in the bringing of the interpleader action. Fid.
Brokerage Services LLC v. Caro, No. 10 Civ. 5893, 2011
WL 4801523, at *2 (S.D.N.Y. Oct. 11, 2011) (citing
Estate of Ellington v. EMI Music Publishing, 282 F.Supp.2d
192, 194 (S.D.N.Y.2003)). The court must determine what
amount is reasonable for the interpleader plaintiff given
the circumstances of the case. Estate of Ellington, 282
F.Supp.2d at 194 (S.D.N.Y.2003) (citing 7 Wright, Miller
& Kane, Federal Practice and Procedure § 1719 at 686-
87 (3d ed.2001)). "District courts have broad discretion
when calculating a fee awarded" to an interpleader plaintiff.
Landmark Chems., SA v. Merrill Lynch & Co., 234 F.R.D. 62,
63 (S.D.N.Y.2005).
*3 "It is well-settled that a stakeholder is not entitled to
costs and fees it would have incurred in the ordinary course
of business." Fid. Brokerage Servs., 2011 WL 4801523, at
*2 ( citation and internal marks omitted); see also Travelers
Ins. Co. v. Estate of Garcia, No. 00 Civ. 2130, 2003 WL
1193535, at *4 (E.D .N.Y. Feb. 4, 2003) ("[C]ourts need not
award attorneys' fees in interpleader actions where the fees
are expenses incurred in the ordinary course of business.").
A "typical interpleader claim does not involve extensive or
complicated litigation, and thus fees should be relatively
modest." Estate of Ellington, 282 F.Supp.2d at 194; see also
Weininger, 462 F.Supp.2d at 502 ("In the usual case the
[attorney's] fee will be relatively modest, inasmuch as all that
is necessary is the preparation of a petition, the deposit in
court or posting of a bond, service on the claimants, and the
preparation of an order discharging the stakeholder." ( quoting
7 Wright, Miller & Kane, Federal Practice and Procedure §
1719 at 686--87 (3d ed.2001)).
Here, Respondent argues that the case presented "complex
legal and factual circumstances" justifying its fee request.
Specifically, Respondent argues that the decisions in Shipping
Corp. of India Ltd. v. Jaldhi Overseas PteLtd., 585 F.3d 58, 71
(2d Cir.2009), a case concerning Rule B of the Supplemental
Rules for Admiralty or Maritime Claims and Asset Forfeiture
Actions of the Federal Rules of Civil Procedure ("Rule B"),
cast doubt on whether EFTs were considered property within
the meaning of TRIA. Respondent, however, overstates the
breadth of the holding in Jaldhi. Compare id. ("[B]ecause
there is no governing federal law on the issue and New
York law clearly prohibits attachment of EFTs, we conclude
that EFTs being processed by an intermediary bank in
New York are not subject to Rule B attachment."), with
Hausler v. JP Morgan Chase Bank, NA., 740 F.Supp.2d
525, 531 (S.D.N.Y.2010) (holding "that the plain language
and purpose of ... TRIA [is] markedly different from the
federal laws governing Jaldhi" and that EFTs are subject to
execution under TRIA because TRIA preempts New York
property laws). In any event, to the extent that Jaldhi, or
any other case, introduced uncertainty with regard to TRIA
attachment actions, it was not incumbent upon Respondent,
as a disinterested party, to incur legal fees in relation to these
issues beyond what was necessary to interplead the adverse
parties. See Weininger, 462 F.Supp.2d at 502 (discounting
legal fees claimed to the extent that the "litigation strategy" of
the bank asserting interpleader "went beyond that of a typical
disinterested stakeholder, whose legal expenses are associated
merely with its efforts to secure interpleader" and "advocated
a position against Plaintiffs"); Fid. Brokerage Servs., 2011
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 336 2
Estate of Heiser v. Bank of Baroda, New York Branch, Not Reported in F.Supp.2d (2013)
WL 4801523, at *1 (holding that an interpleader is limited
to recovering fees and costs incurred in the bringing of the
interpleader action). Therefore, Respondent cannot argue that
it is entitled to greater compensation in this action because of
the complexity of the law.
*4 Petitioners argue that if fees and costs are awarded to
Respondent, they should be greatly reduced. Indeed, courts
often reduce awards to interpleader plaintiffs where there is
no extensive litigation or lengthy discovery. See GOAT, Inc.
v. Four Finger Art Factory, Inc., No. 01 Civ. 10079, 2002 WL
31684400, at *2 (S.D .N.Y. Nov. 25, 2002) (reducing award
from $27,000 to $7,000 and noting that 30 hours claimed
for legal research and drafting was excessive for "what
should have been a relatively straightforward interpleader");
Estate of Ellington, 282 F.Supp.2d at 195 (S.D.N.Y.2003)
(reducing award from $37,000 to $10,000 where work
"primarily involved two conferences with this Court and two
settlement conferences with the Magistrate Judge, drafting
the complaint, reviewing and responding to correspondence,
and negotiating and commenting on the final discharge").
Petitioners also argue that it was not necessary for Respondent
to incur fees after August 8, 2011, when the Service Order
was approved and Petitioners assumed the responsibility for
serving the third parties identified by Respondent.
Petitioners further argue that Respondent should not be
compensated for tasks that it was required to perform as part
of its ordinary course of business. See Fid. Brokerage Servs.,
2011 WL 4801523, at *2 ("It is well-settled that a stakeholder
is not entitled to costs and fees it would have incurred
in the ordinary course of business.") (citation and internal
marks omitted). Petitioners point out that the information
required to complete the interpleader action was maintained
and readily available to the Respondent, who was under a
statutory obligation to file reports pertaining to frozen funds
pursuant to TRIA. See 31 C.F.R. § 501.601 (requiring "every
person holding property blocked pursuant to the provisions of
[OFAC regulations to] keep a full and accurate record of such
property . . . for at least 5 years after the date such property
is unblocked"). "[I]t is not uncommon for banks ... to have
to respond to discovery requests from parties-or from the
Government-staking claim to or inquiring about funds in
their custody. Such costs are part of a bank's ordinary course
ofbusiness." Fid. Brokerage Servs., 2011 WL 4801523, at *2
( citation and internal marks omitted).
The Court also takes into consideration that the total amount
of Blocked Assets in this action was $119,827.68. The
$34,795.64 sought by Respondent is not an insignificant
portion of the amount at stake. It does not serve the purpose
of TRIA for interpleader plaintiffs to cause a large reduction
in the funds available to compensate the victims of terrorism.
See Rux, Order Regulating Attorney's Fees and Costs, No.
08 Civ. 06588, Dkt. No. 212, at 2. ("The victims should not
have their recoveries diminished by [ awards to interpleader
banks], nor should the expenses be unreasonably high."); see
also GOAT, 2002 WL 31684400, at *2 (reducing award of
attorney's fees and costs in part because the amount requested
"would exceed 20% of the fund"). In Rux, a turnover action
pursuant to TRIA, the court awarded $115,000 in fees and
costs to nine respondent banks, which sought $621,247 in fees
and expenses related to the interpleader action. Rux, 2009 WL
8660085, at* 6 (S.D.N.Y. Apr. 14, 2009). The court reduced
all of the recovery sought without individual determination
on reasonableness of hours or rates:
Respondent Fees and Costs Fees and Costs
Bank Requested Allowed
American
Express Bank,
Ltd.
ABN-Amro Bank
N.V.
Bank of America
Bank of China
The Bank of New
York Mellon
$65,761.56
$15,822.94
$15,650.36
$17,540.27
$100,138.88
$5,000.00
$5,000.00
$5,000.00
$5,000.00
$25,000.00
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 336 3
Estate of Heiser v. Bank of Baroda, New York Branch, Not Reported in F.Supp.2d (2013)
Citibank, N.A.
Deutsche Bank
Trust Company
Americas
$89,406.55
$148,519.72
$5,000.00
$35,000.00
HSBC Bank USA,
N.A.
$12,365.18 $5,000.00
JPMorgan Chase
Bank, N.A.
$157,044.76 $25,000.00
Total:
$621,247.22
Total:
$115,000.00
*5 Rux, Order Regulating Attorneys' Fees and Costs, No. 08
Civ. 06588, Dkt. No. 212, at 3. The Rux court nevertheless
observed that allowing compensation to the interpleader
banks for "expenses incurred ... in proceedings not of their
own making, to assure that payments from blocked funds do
not prejudice innocent beneficiaries, or the banks themselves,
are integral to the process of allowing the victims of terrorism
to recover from blocked assets." Id. at 2.
In the instant action, the Court concludes that while it is
appropriate to award fees and costs to Respondent, it is also
appropriate to reduce them. As an initial matter, it appears
that Respondent spent roughly 35 hours on researching and
drafting the interpleader. This seems excessive in light of
the type and amount of work required. Also, Respondent's
attorneys should not be compensated for acquiring contact
information for the beneficiaries of the Blocked Assets when
Respondent was required to maintain that information in
its ordinary course of business under OFAC regulations.
Rather than scrutinize each billing entry, the Court determines
that a reduction in the attorney's fees and costs by 70% is
appropriate. See LV v. New York City Dep't of Educ., 700
F.Supp.2d 510, 525 (S.D.N.Y.2010) (A court may reduce
the hours claimed across the board by some percentage
where it finds it difficult to assess the reasonableness of
the hours billed due to "vagueness, inconsistencies or other
deficiencies." (quoting Kirsch v. Fleet Street, Ltd., 148 F.3d
149, 173 (2d Cir.1998) ). Here, the fees sought relating to
researching and drafting the interpleader are excessive, and
many of the fees sought in relation to work performed
End of Document
after the Service Order was entered are questionable and
vague. A reduction of 70% balances the entitlement of
Respondent to reasonable fees as a disinterested interpleader
with Petitioners' right pursuant to TRIA to enforce their
judgment as victims of terrorism.
Accordingly, the Court awards Respondent attorney's fees and
costs in the amount of$10,438.69.
IV. Conclusion
Respondent's motion for attorney's fees and costs is
GRANTED IN PART. Respondent is awarded fees and costs
totaling $10,438.69. The remaining Blocked Assets shall be
turned over to Petitioners to the extent that their judgments
against the Islamic Republic of Iran remain unsatisfied. No
later than August 16, 2013, Petitioners shall submit an
affirmation representing the amount of their judgments that
remain outstanding, and a proposed order for turnover of the
remaining Blocked Assets, less the $10,438.69 that will be
paid to Respondent.
The Clerk of Court is directed to close the motion at docket
number 78.
SO ORDERED.
All Citations
Not Reported in F.Supp.2d, 2013 WL 4780061
© 2021 Thomson Reuters. No claim to original U.S.
Government Works.
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 336 4
ANNEX 337

Case 1:11-cv-01602-LGS-MHD Document 39 Filed 08/09/11 Page 1 of 14
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UNITED STA TES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------x
THE EST ATE OF MICHAEL HEISER, deceased,
et al.,
Petitioners,
V.
BANK OF BARODA, NEW YORK BRANCH,
Respondent.
-------------------------------------------------------------x
WHEREAS, this proceeding was commenced by Petitioners by the filing of a
Petition for Turnover Order pursuant to Fed. R. Civ. P. 69 and N.Y.C.P.L.R. §§ 5225 and 5227
(the "Petition") in this Court on March 8, 2011; and
WHEREAS, the Petition seeks an order directing the Respondent Bank of Baroda,
New York Branch ("Respondent") to turn over to Petitioners, in satisfaction of a jud6rrnent in the
amount of $591,089,966.00 entered in their favor by the United States District Court for the
District of Columbia on December 22, 2006, as supplemented by a judgment entered September
30, 2009 (collectively, the "Judgment"), in consolidated cases captioned Heiser v. Iran (Case No.
00-CV-2329 RCL) and Campbell v. Iran (Case No. 0l-CV-2104 RCL) (the "Underlying
Action"), certain funds (the "Blocked Assets'') held by the Respondent that were blocked
pursuant to regulations of the Office of Foreign Assets Control ("OFAC") and that may be
subject to execution to satisfy the Judgment because the Islamic Republic of Iran ("Iran") or
individuals, persons and entities that are agencies or instrumentalities of Iran (collectively,
"Persons") may have an interest in such Blocked Assets; and
WHEREAS, the Blocked Assets comprise funds that were the subject of wire
transfers for which Respondent was an intermediary bank; and
Annex 337
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WHEREAS, on April 8, 2011, Respondent filed an Answer to Petition in which
Respondent asserted affirmative defenses including, without limitation, the need to provide proper notice
of the Petition to all parties that may have an interest in the Blocked Assets; and
WHEREAS, the parties wish to have the Court exercise its authority to establish
requirements and procedures for Petitioners to give notice of this proceeding to certain parties
who may claim an interest in the Blocked Assets (the "Third Parties" or a "Third Party"); and
WHEREAS, section 1608(b)(3)(C) of the Foreign Sovereign Immunities Act of
1976 ("FSIA") authorizes the parties to this proceeding, under the circumstances specified
therein, to serve process upon or give notice to an agency or instrumentality of a foreign state "as
directed by order of the court consistent with the law of the place where service is to be made;"
and
WHEREAS, Rules 4(£)(3) and 4(h)(2) of the Federal Rules of Civil Procedure
authorize the parties to this proceeding to serve process upon or give notice to persons outside
any judicial district of the United States "by other means not prohibited by international
agreement, as the court directs;" and
WHEREAS, this Court has the authority under its inherent powers to establish
procedures for the service of process or the giving of notice in certain other circumstances as
well;
NOW, THEREFORE, it is hereby ORDERED as follows:
1. The following documents (referred to collectively hereinafter as the "Service
Documents") shall be served in the manner specified in subsequent provisions of this Order.
a. the Petition;
b. a spreadsheet or other summary prepared by the Respondent, depending
on what is reasonably available and appropriate, identifying (to the extent it can reasonably be
2
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determined) those Blocked Assets that the Respondent believes that the person receiving notice
may claim an interest in;
c. a notice in the form of Exhibit A to this Order (the "Notice of Lawsuit");
d. this Order;
e. to the extent the Service Documents arc sent to a person or entity
("Entity") in Iran or a country where the official language is Parsi, Petitioners shall translate the
Service Documents into Farsi in compliance with section 1608(b)(3) of the FSIA.
2. Petitioners shall serve the Service Documents upon the following Third Patties, to
the extent that Petitioners are in possession of contact information for such parties sufficient to
permit them to give notice in the manner specified in this Order:
a. The account holder of record of any Blocked Assets; and
b. The originator, the originator's bank, the beneficiary, the beneficiary's
bank, and any intermediary bank for any blocked electronic funds transfer ("EFT').
3. The Service Documents may be served by Petitioners upon any Third Party by
any of the following methods:
a. by sending copies of the Service Documents to such Third Party at its last
known address, as determined by Petitioners from their own records, records provided by
Respondent or public sources such as the internet, either by U.S. global Mail (also known as
First Class International Mail) or by an express delivery company such as f edEx, UPS or DHL
that makes deliveries in the country to which the documents are being sent, directed to the
attention of the Managing Director, Chief Executive Officer or Chief Legal Officer of that Third
Party if it is a business entity, or to the individual if the Third Party is not an entity. Respondent
3
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shall provide counsel for Petitioners the address it has in its records (if any) of any Third Party
within thirty (30) days of the entry of this Order;
b. by sending an e-mail to the last known e-mail address of such Third Party,
as detem1ined by Petitioners from their own records, records provided by Respondent or public
sources such as internet web sites, which e-mail shall state:
"IMPORTANT! This e-mail is being sent to put you on notice of a lawsuit
pending in the United States District Court for the Southern District of New York
that could result in the seizure and forfeiture of funds in which you may have an
interest. These funds may include the balances held in one or more bank accounts
that were blocked pursuant to the Iranian Transactions Regulations and the
proceeds of one or more wire transfers that were intem1pted and blocked pursuant
to those Regulations. Please open the attachments, which are in pdf fom1,
immediately. They will provide more detailed information about the lawsuit and
your potential exposure to loss in that lawsuit."
The e-mail shall also attach PDF versions of the Service Documents to the e-mail (if the e-mail is
being sent to a business entity, the e-mail should be directed to the e-mail address of the Chief
Executive Officer, Managing Director or Chief Legal Officer, if known, or it should state,
following the word "IMPORTANT," "Deliver this e-mail and the attachments to your Chief
Executive Officer, Managing Director or Chief Legal Officer at once"). Respondent sha11
provide counsel for Petitioners the e-mail address it has in its records (if any) of any Third Party
within thirty (30) days of the entry of this Order;
c. by faxing copies of the Service Documents to such Third Party at its last
known fax number, as determined by Petitioners from their own records, records obtained from
Respondent or public sources such as the internet (if the fax is being sent to a business entity, the
fax cover sheet should be addressed to the Chief Executive Officer, Managing Director or Chief
Legal Officer of the entity). Respondent shall provide counsel for Petitioners the fax number it
has in its records (if any) of any Third Party within thirty (30) days of the entry of this Order; or
4
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d. by serving the Service Documents in any other manner that would
constitute good service under Rule 4 of the Federal Rules of Civil Procedure;
e. if the Third Party being given notice is a bank, Petitioners may provide
notice by sending the following text to the bank in one or more of a series of linked SWIFT
messages:
"URGENT URGENT URGENT URGENT Deliver this message to your Chief
Executive Officer, Managing Director or Chief Legal Officer at once. This
message is being sent to put you on notice of a lawsuit pending in the United
States District Court for the Southern District of New York that could result in the
seizure and forfeiture of funds in which you may have an interest. These funds
include the balances held in one or more bank accounts that were blocked
pursuant to the Iranian Transaction Regulations and the proceeds of one or more
wire transfers that were interrupted and blocked pursuant to those Regulations.
What follows is the text of important legal documents that explain the nature of
this lawsuit and what you must do to protect your rights, if any, in the funds at
issue in the lawsuit. Please contact [contact information to be supplied]. That
person can provide you with additional important legal documents relating to the
lawsuit.,"
Such notice should be followed by the Petition and the Notice of Lawsuit, except that the
captions of such documents may be abbreviated to show only the name of the first party on either
side and the list of persons to whom the Petition is addressed may be omitted. The foregoing
text may be modified as necessary to comply with paragraph 5 of this Order in the event that
several linked messages or series of linked messages are needed to incorporate all of the
specified documents; or
f. if the Third Party being given notice is owned or controlled in whole or in
part by Iran or any of its agencies and instrnmentalities or has ever been included in a list
promulgated by the Office of Foreign Assets Control ("OF AC") of the United States Department
of the Treasury of persons whose assets must be blocked pursuant to the Iranian Transaction
Regulations, 31 C.F .R. Part 560, Petitioners may provide notice by causing copies of the Service
Documents to be served on such party in accordance with 28 U.S.C. § l608(b)(3)(B) and this
5
Annex 337
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Court's Instructions for Service of Process on a Foreign Defendant, which contemplate that
documents be dispatched to such party by the Clerk of this Court using a fonn of mail that
requires a signed receipt.
4. The notice may be given by any person authorized to effect service of process
under Rule 4(c)(2) of the Federal Rules of Civil Procedure.
5. If the Service Documents are too voluminous to be sent to a Third Party by mail
or overnight delivery service in one envelope, or as attachments to a single e-mail, or in a single
fax or SWIFT, the mailings, e-mails, faxes or SWIFTS shall indicate this fact and the number of
envelopes, e-mails, faxes or SWIFTS, as the case may be, that are being sent and notify the
recipient to treat them as a single group of documents relating to the same proceeding.
6. Any Protective Order previously entered by this Court ordering the sealing of
papers in this action, are hereby suspended and amended to the extent necessary for the
translation of documents into Farsi and the service and delivery of documents and infonnation as
authorized in this Order.
7. Counsel for Petitioners shall file a certificate of service with the Court and serve a
copy of the certificate of service on counsel for Respondent within five (5) days after receiving
confinnation of service on the Third Parties.
8. Service in accordance with the provisions of this Order shall be deemed to satisfy
all of the requirements for service under the FSIA, the Federal Rules of Civil Procedure,
N.Y.C.P.L.R., and all of the requirements of due process of law.
9. Any Third Party who fails to assert a claim to the Blocked Assets or take any
action within sixty (60) days of the date indicated on the Notice of Lawsuit shall be deemed to
forever waive any claims that such Third Party may have against the Blocked Assets, or against
6
Annex 337
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Case 1: 11-cv-01602-L TS -MHD Document 38-1 Filed 08/02/11 Page 8 of 15
Respondent or Petitioners with respect to the Blocked Assets, and such Third Party shall be
forever barred, estopped and enjoined from asserting any claim to the Blocked Assets or
pursuing any claim against the Respondent or Petitioners with respect to delivery or payment of
the Blocked Assets to Petitioners.
10. By entering into this Stipulation, Respondent has not waived, forfeited or
prejudiced in any way the ability of the Third Parties to join in any proceeding relating to the
Petition, and it has not waived, forfeited or prejudiced in any way any of the Third Parties '
rights, defenses, arguments or objections that they may have in response to the Petition, all of
which are expressly reserved and given effect by ensuring that the Third Parties wm be given
notice of their right to interpose opposition to the relief sought in this turnover proceeding.
Dated: N_xw York, New York N,,J_ Y , 2011
7
United States ~~Judge
~i,.(~
Annex 337
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EXHIBIT A
EAST\45498435 .2
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TO: THOSE PERSONS OR ENTITIES WHICH MAY CLAIM AN INTEREST
IN FUNDS BLOCKED BY REGULATIONS AFFECTING THE ISLAMIC
REPUBLIC OF IRAN.
THIS NOTICE OF LAWSUIT IS BEING SENT TO YOU TO ADVISE YOU OF A
LAWSUIT PENDING TN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK THAT MAY RESULT IN THE SEIZURE AND
FORFEITURE OF FUNDS IN WHICH YOU MAY HAVE AN INTEREST.
PETITIONERS HA VE OBTAINED A JUDGMENT AGAINST THE ISLAMIC
REPUBLIC OF IRAN AND SEEK TO SATISFY THAT JUDGMENT FROM ASSETS
OF THAT NATION OR ITS AGENCIES AND INSTRUMENTALITIES. THOSE
ASSETS MAY INCLUDE BALANCES HELD BY BANK OF BARODA, NEW YORK
BRANCH (THE "RESPONDENT BANK") IN CERTAIN ACCOUNTS THAT WERE
BLOCKED PURSUANT TO REGULATIONS ISSUED BY THE OFFICE OF FOREIGN
ASSETS CONTROL OF THE TREASURY DEPARTMENT OF THE UNITED STATES
("OFAC"). THEY ALSO INCLUDE THE PROCEEDS OF CERTAIN WIRE
TRANSFERS THAT WERE BLOCKED PURSUANT TO THOSE REGULATIONS.
RECORDS FURNISHED BY THE RESPONDENT BANK INDICATE THAT YOU MAY
HAVE AN INTEREST IN THE FUNDS IN ONE OR MORE SUCH BLOCKED
ACCOUNTS AND/OR THAT YOU MAY HA VE BEEN A PARTY, EITHER AS THE
ORIGINATOR, BENEFICIARY OR ORIGINATING, INTERMEDIARY OR
BENEFICIARY'S BANK WITH RESPECT TO ONE OR MORE OF THOSE BLOCKED
WIRE TRANSFERS.
THE COURT MAY ORDER THAT THOSE FUNDS BE TURNED OVER TO
PETITIONERS TO SATISFY THE JUDGMENT WITHOUT FURTHER
PROCEEDINGS UNLESS YOU ACT TO ASSERT YOUR CLAIMS TO THOSE FUNDS
EAST\45498435.2
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Case 1 :1 1-cv-01602-L TS -MHD Document 38-1 Filed 08/02/11 Page 11 of 15
BY THE SUBMISSION OF COMPETENT EVIDENCE TO THE COURT THAT SUCH
FUNDS ARE NOT PROPERTY OF IRAN OR ITS AGENCIES OR
INSTRUMENTALITIES. YOU MUST ACT WITHIN SIXTY (60) DAYS AFTER THE
DATE OF THIS NOTICE IN ORDER TO PROTECT THE RIGHTS, IF ANY, YOU
MAY HAVE WITH RESPECT TO SUCH FUNDS.
The judgment being enforced arises out of a claim against the Islamic Republic of Tran,
the Iranian Ministry of Information and Security and the Iranian Islamic Revolutionary Guard
Corps. (collectively, "Iran") as described below. In that lawsuit brought in the United States
District Court for the District of Columbia (the "D.C. Court"), the personal representative and
family members of seventeen United States Air Force officer and ainnen ("Petitioners") killed in
the June 25, 1996 terrorist bombing of the Khobar Towers in Khobar, Saudi Arabia, recovered
money and an award of damages and a judgment against Iran on the ground that Iran was legally
responsible for the attack. This judgment, as amended and supplemented, is in the sum of
$591,089,966.00 together with interest that is accruing.
The judgment holder then brought lawsuits in the United States District Court for the
Southern District of New York in March 2011 (collectively, the "New York Lawsuit") in an
effort to collect funds to satisfy the judgment. The New York Lawsuit was brought against the
Respondent Bank, among other banks, and is based on Petitioners' claim that the Respondent
Bank is holding funds belonging to the Islamic Republic of Iran and its agencies and
instrumentalities that should be turned over to Petitioners to pay the amount due under the
judgment. The amount sought by Petitioners, including interest and costs and expenses of the
D.C. Lawsuit, is in excess of US $591 mi11ion. The accounts in question have been blocked by
the Respondent Bank because it was required to do so pursuant to Executive Orders of the
EAST\45498435.2 2
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Case 1:11-cv-01602-LTS-MHD Document38-1 Filed08/02/11 Page 12of15
President of the United States and the Iranian Transactions Regulations issued by the United
States Department of the Treasury.
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK HAS ORDERED THAT ANY PERSON OR ENTITY CLAIMING TO
BE THE OWNER OF OR TO HA VE AN INTEREST IN ANY OF THE FUNDS
DEPOSITED WITH THE COURT MUST SUBMIT WRITTEN OBJECTIONS WITHIN
SIXTY (60) DAYS OF THE DATE OF THIS NOTICE. SUCH OBJECTIONS MUST BE
IN WRITING, SPECIFY THE ACCOUNTS THAT YOU CLAIM TO HA VE AN
INTEREST IN AND SET FORTH THE FACTUAL BASIS FOR YOUR CLAIM. THEY
MUST BE SIGNED BY YOU, AN OFFICER OF YOUR ORGANIZATION OR YOUR
ATTORNEY. YOU MUST SUBMIT SUCH OBJECTIONS TO THE ATTORNEYS FOR
THE PETITIONER AND THE ATTORNEYS FOR THE RESPONDENT BANK AT
THEIR ADDRESSES AS SET FORTH ON THE SCHEDULE AT THE END OF THIS
NOTICE, AND TO THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK.
IT IS STRONGLY RECOMMENDED THAT YOU CONSULT WITH AN
ATTORNEY AND OBTAIN LEGAL ADVICE AS TO WHAT ACTION YOU SHOULD
TAKE. YOU SHOULD ALSO CONSIDER ASKING THE COURT FOR PERMISSION
TO INTERVENE IN THE NEW YORK LA WSUJT AND BECOME A PARTY TO THE
LAWSUIT FOR ALL PURPOSES.
WHATEVER YOU DECIDE TO DO, IT IS IMPORTANT THAT YOU ACT
PROMPTLY. IF YOU DO NOT SUBMIT WRITTEN OBJECTIONS OR MAKE A
MOTION TO INTERVENE WITHIN SIXTY (60) DAYS OF THE DATE OF THIS
EAST\45498435.2 3
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NOTICE, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK MAY DETERMINE THAT YOU HA VE DEFAULTED AND
LOST YOUR RIGHT TO ASSERT A CLAIM TO THE FUNDS THAT HAVE BEEN
PAID INTO THE REGISTRY OF THE COURT. IN THAT EVENT, THE COURT
COULD TURN OVER SUCH FUNDS TO PETITIONERS TO SATISFY THE
JUDGMENT. THE UNITED STA TES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK MAY ALSO ENTER AN ORDER RELEASING AND
DISCHARGING THE RESPONDENT BANK FROM ANY OBLIGATIONS TO HOLD
THE FUNDS IN THOSE ACCOUNTS FOR YOU OR TO PAY THOSE FUNDS TO YOU.
IF YOU WANT TO ASSERT YOUR RIGHTS, IF ANY, IN THE FUNDS BEING HELD
BY THE COURT, YOU SHOULD SUBMIT WRITTEN OBJECTIONS OR TAKE
OTHER APPROPRIATE ACTION WITHIN THE SIXTY (60) DAY DEADLINE.
IF YOU FILE TIMELY OBJECTIONS, THE COURT MAY HOLD A HEARING
TO DETERMINE WHETHER YOU HA VE A VALID CLAIM. THE HEARING WILL
BE HELD IN- COURTROOl\t OF THE DANIEL PATRICK MOYNIHAN UNl+ED
~TATES COURTl10U8E AT 500 PEARL STREET, N'EW YORK, NEW YOltlc-, ON A
DATE 1\FTER ------- THAT HAS NOT YET BEEN FIXED. IF YOU
HA VE FILED WRITTEN OBJECTIONS OR INTERVENED IN THE PROCEEDINGS,
YOU ARE INVITED TO ATTEND THE HEARING, IN PERSON OR THROUGH AN
ATTORNEY, AND PRESENT COMPETENT EVIDENCE FOR YOUR CLAIMS. (IF
YOU ARE NOT A NATURAL PERSON, YOU MUST APPEAR BY AN ATTORNEY.)
YOU MUST APPEAR IN ORDER TO PRESERVE ANY CLAIM YOU MAY HA VE TO
THE FUNDS BEING HELD BY THE COURT.
EAST\45498435.2 4
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Enclosed with this Notice of Suit are copies of the Petition and related documents filed
by Petitioners in order to commence the New York Lawsuit and the order of the Court
establishing procedures for submitting objections and determining the rights of interested
persons. These documents are being sent to you because the records of the Respondent Bank
indicate that you may have an interest in the funds being held by the Respondent Bank. The
enclosed documents include documents or information identifying the bank accounts and/or wire
transfers in which you may have an interest, to the extent that Respondent Bank has been able to
identify such accounts and transfers.
This notice has been approved by the United States District Court for the Southern
District of New York, and the Court has directed Petitioners to send it to you along with the
enclosed documents.
Dated: New York, New York
August_, 2011
EAST\45498435.2 5
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Case1:11-cv-01602-LTS-MHD Document38-1 Filed08/02/11 Page15of15
ADDRESSES FOR SUBMISSION OF OBJECTIONS
PETITIONERS' COUNSEL:
Cary B. Samowitz
Barbara L. Seniawski
DLA Piper LLP (US)
1251 Avenue of the Americas, 27th Floor
New York, New York 10020- 1104
Telephone: 212-335-4500
Facsimile: 212-884-4501
[email protected]
[email protected]
and
Richard M. Kremen
DLA PIPER LLP (US)
6225 Smith Ave.
Baltimore, MD 21209
Telephone: 410-580-3000
Facsimile: 410-580-3001
[email protected]
RESPONDENT'S COUNSEL:
Jennifer L. Marlborough
Wormser, Kiely, Galef & Jacobs LLP
825 Third A venue, 26th Floor
New York, New York 10022
(212) 687-4900
[email protected]
THE COURT:
EAST\45498435.2
Clerk of the Com1
United States District Court for the
Southern District of New York
Daniel Patrick Moynihan Courthouse
500 Pearl Street
New York, NY 10007
Docket No. l 1-CV-1602 (LTS/MHD)
6
Annex 337
ANNEX338

Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9 (2011)
807 F.Supp.2d 9
United States District Court,
District of Columbia.
ESTATE OF Michael
HEISER, et al., Plaintiffs,
v.
ISLAMIC REPUBLIC OF
IRAN, et al., Defendants.
Estate of Millard D.
Campbell, et al., Plaintiffs,
V.
Islamic Republic of Iran, et al., Defendants.
Nos. oo-cv-2329 (RCL), 01-cv-2104 (RCL).
I
Aug. 10, 2011.
Synopsis
Background: Survivors of terrorist bombing of residential
facility housing American military personnel stationed in
Saudi Arabia, along with estates and family members of
personnel killed in the bombing, brought actions, under the
state-sponsored terrorism exception to the Foreign Sovereign
Immunities Act (FSIA), against the Islamic Republic oflran,
the Iranian Ministry of Information and Security (MOIS),
and the Iranian Islamic Revolutionary Guard Corps (IRGC),
alleging that those entities provided material support and
assistance to the terrorist group that carried out the attack.
Following consolidation of the actions, and entry of default
judgment and award of compensatory damages against all
defendants, 466 F.Supp.2d 229, plaintiffs sought retroactive
application of new statutory provision which permitted
recovery of punitive damages, and judgment was amended
to hold defendants liable for compensatory and punitive
damages, 659 F.Supp.2d 20. Thereafter plaintiffs, alleging
that an Iranian company to which an American telephone
company owed money was an instrumentality of Iran, sought
to garnish those funds. American telephone company sought
leave to interplead Iranian company as a defendant.
Holdings: The District Court, Royce C. Lamberth, Chief
Judge, held that:
Iranian telecommunications company was an agency or
instrumentality of Iran, and
under District of Columbia law, amount listed by American
telephone company, in its second answer to interrogatories, as
amount it owed to Iranian company, would be used as final
sum subject to execution.
Ordered accordingly.
Attorneys and Law Firms
*11 Mark Charles Del Bianco, Kensington, MD, Richard
Marc Kremen, David B. Misler, Melissa Lea Mackiewicz,
DLA Piper US, LLP, Baltimore, MD, Shale D. Stiller,
Elizabeth Renee Dewey, DLA Peper Rudnick Gray Cary U.S.
LLP, Washington, DC, for Plaintiffs.
Neil Keith Gilman, Hunton & Williams, LLP, Washington,
DC, for Defendants.
MEMORANDUM OPINION
ROYCE C. LAMBERTH, Chief Judge.
I. INTRODUCTION
On the night of June 25, 1996, a tanker truck crept quietly
along the streets ofDhahran, coming to rest alongside a fence
surrounding the Kho bar Towers complex, a residential facility
housing United States Air Force personnel stationed in Saudi
Arabia. A few minutes later, the truck exploded in a massive
fireball that was, at the time, the largest non-nuclear explosion
ever recorded on Earth. The devastating blast, which was felt
up to 20 miles away, sheared the face off Building 131 of the
Khobar Towers complex and left a crater more than 85 feet
wide and 35 feet deep in its wake. The bombing killed 19 U.S.
military personnel and wounded more than 100. Subsequent
investigations revealed that members ofHezbollah carried out
the attack.
A few years after the bombing, plaintiffs-who are former
service members injured in the attack, their families, and
estates and family members of those killed-brought suit
under the "state-sponsored terrorism" exception to the
Foreign Sovereign Immunities Act ("FSIA" or the "Act"),
then codified at 28 U.S.C. § 1605(a)(7). Plaintiffs allege
that the Islamic Republic of Iran ("Iran"), the Iranian
Ministry oflnformation and Security, and the Iranian Islamic
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 338 1
Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9 (2011)
Revolutionary Guard Corps provided material support and
assistance to Hezbollah to carry out the heinous attack.
Following Iran's failure to appear and plaintiffs' presentation
of evidence to substantiate their claims, the Court found
that "the Khobar Towers bombing was planned, funded, and
sponsored by senior leadership in the government *12 of
the Islamic Republic oflran; the IRGC had the responsibility
and worked with Saudi Hizbollah to execute the plan; and the
MOIS participated in the planning and funding of the attack."
Heiser v. Islamic Republic of Iran, 466 F.Supp.2d 229,
265 (D.D.C.2006) ( "Heiser I ").1 The Court subsequently
entered judgment against all defendants for $250 million
in compensatory damages. Id. at 356. A few years later,
Congress passed the National Defense Authorization Act for
Fiscal Year 2008 ("NDAA" or the "2008 Amendments"),
which replaced § 1605(a)(7) with a new state-sponsored
terrorism exception codified at § 1605A, permitted recovery
of punitive damages, and added a new provision concerning
the enforcement of judgments. Pub.L. No. 110-181, § 1083,
122 Stat. 3, 338--44 (2008). Invoking the NDAA's procedures
for retroactive application, in 2009 the Court entered an
amended judgment, holding defendants jointly and severally
liable for an additional $36 million in compensatory damages
and $300 million in punitive damages. Heiser v. Islamic
Republic of Iran, 659 F.Supp.2d 20, 31 (D.D.C.2009).
Following entry of final judgment, plaintiffs began their
journey down the often-frustrating and always-arduous path
shared by countless victims of state-sponsored terrorism
attempting to enforce FSIA judgments. The matter before
the Court today requires exploration of the latest in a
series of attempts by Congress to aid these victims. In this
instance, plaintiffs-relying on a new provision added to
the FSIA as part of the 2008 Amendments-assert that the
Telecommunication Infrastructure Company of Iran ("TIC")
is an instrumentality oflran, and ask the Court to direct Sprint
Communications Company LP ("Sprint") to tum over funds it
owes to TIC. Sprint responds that plaintiff has failed to prove
that TIC is an instrumentality as defined by the FSIA, seeks
leave to interplead TIC as a defendant, and raises several
other legal defenses to attachment of the funds. The Court
first reviews the regime of legal and regulatory provisions
governing execution ofFSIAjudgments, and then turns to the
parties' dispute.
II. BACKGROUND
A. Statutory and Regulatory Framework
1. Iran-Specific Regulations
Relations between the United States and Iran deteriorated
following the 1979 revolution in which Iran's monarchy was
displaced by an Islamic republic, ruled by the Ayatollahs,
that remains in power today. Following the regime change
and fueled by the Iran hostage crisis, President Carterexercising
the authority granted to him under the International
Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq.blocked
the flow of assets between the United States and
Iran, and seized Iranian property located within the United
States. Executive Order 12170, 44 Fed. Reg. 65,729 (Nov. 14,
1979). Over the next two years, Presidents Carter and Reagan
issued numerous Executive Orders seizing additional assets,
while the Office of Foreign Assets Control ("OFAC")-a
component of the Department of the Treasury that administers
and enforces economic and trade sanctions-promulgated
regulations concerning transactions between persons in the
United States and Iran. In 1981, the United States and Iran
reached an agreement, known as *13 the Algiers Accords,
which led to the release of the hostages and the unfreezing
of most Iranian assets. Over the following decades, sanctions
regimes instituted by Executive Orders and rules promulgated
by OFAC evolved into the complex web of regulations
governing Iranian assets in the United States, as well as
transactions with Iran.2
Today, the basic framework for the treatment of Iranian
property and trade with Iran is set forth in two complementary
sets of provisions promulgated by OFAC that generally
bar all transactions either with Iran or involving Iranian
interests and then carve out limited exceptions to that
embargo. The first, known as the Iranian Assets Control
Regulations ("IACR") and codified at 31 C.F.R. Part 535,
was implemented in 1980 during the Iran Hostage Crisis,
45 Fed. Reg. 24,432 (Apr. 9, 1980), and "broadly prohibits
unauthorized transactions involving property in which Iran
has any interest," while granting specific licenses for certain
transactions. Flatow v. Islamic Republic of Iran, 305 F.3d
1249, 1255 (D.C.Cir.2002). The second, known as the Iranian
Transactions Regulations ("ITR") and codified at 31 C.F.R.
Part 560, "confirms the broad reach of OFAC's Iranian
sanctions programs by establishing controls on Iranian trade,
investments, and services.... As under the IACR, there
is a general prohibition under the ITR of unauthorized
transactions, coupled with specific licenses permitting certain
kinds of transactions." Flatow, 305 F.3d at 1255; see also
Weinstein v. Islamic Republic of Iran, 299 F.Supp.2d 63,
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68 (E.D.N.Y.2004) ("The ITR prohibited, inter alia, the
importation of goods and services from Iran, and the
exportation, reexportation, and sale or supply of goods,
technology or services to Iran.").
2. Attachment and Execution under the FSIA
"It is a well-established rule of international law that the
public property of a foreign sovereign is immune from
legal process without the consent of that sovereign." Loomis
v. Rogers, 254 F.2d 941, 943 (D.C.Cir.1958); see also
Weinstein v. Islamic Republic of Iran, 274 F.Supp.2d 53,
56 (D.D.C.2003) ("[T]he principles of sovereign immunity
'apply with equal force to attachments and garnishments.'")
(quoting Flatow v. Islamic Republic of Iran, 74 F.Supp.2d
18, 21 (D.D.C.1999)). To promote this general principle,
the FSIA broadly designates all foreign-owned property
as immune, and then articulates limited exceptions to that
immunity. See 28 U.S.C. § 1609 ("[T]he property in the
United States of a foreign state shall be immune from
attachment, arrest and execution except as provided in
sections 1610 and 1611 of this chapter."). These exceptions
include, inter alia, property (1) located in the United States
that is (2) used for commercial activity and (3) controlled by
a foreign state or its instrumentalities. Id. at § 1610(a)-(b);
see also Bennett v. Islamic Republic of Iran, 604 F.Supp.2d
152, 161 (D.D.C.2009) ("[The FSIA] provides that the
property of a foreign state is not immune from attachment or
execution if the property at issue is used for a commercial
activity by the foreign state") ( emphasis in original). Though
providing a workable framework in theory, the past decade
of litigation under the Act has proved, for victims of statesponsored
terrorism, to be a journey down a never-ending
road littered *14 with barriers and often obstructed entirely.
Two particular roadblocks merit greater discussion.
The first difficulty plaintiffs holding judgments against
Iran often faced was the limited number of Iranian assets
remaining in the United States. Attempting to overcome this
shortfall, plaintiffs targeted property in which an Iranian
entity-often a financial institution owned or controlled
by Iran-had an interest. Though expressly sanctioned by
§ 1610(b), this strategy was undercut by the Supreme
Court's decision in First Nat'! City Bank v. Banco Para El
Comercio Exterior de Cuba, which involved a U.S. financial
institution's attempt to collect money owed to it by the
Cuban government through the seizure of funds deposited
in the institution by a Cuban bank. 462 U.S. 611, 613,
103 S.Ct. 2591, 77 L.Ed.2d 46 (1983). In its opinion, the
Supreme Court observed that "government instrumentalities
established as juridical entities distinct and independent from
their sovereign should normally be treated as such," and
determined that Congress "clearly expressed its intention
that duly created instrumentalities of a foreign state are
to be accorded a presumption of independent status." Id.
at 626-27, 103 S.Ct. 2591. According to the First Nat'!
Court, this presumption may be overridden only where the
plaintiff demonstrates that the foreign entity is exclusively
controlled by the foreign state or where recognizing the
separateness of that entity and the foreign state "would work
fraud or injustice." Id. at 629-30, 103 S.Ct. 2591. The
practical effect of this holding was to shield the property
of instrumentalities of foreign states from attachment or
execution absent evidence of a connection between the
instrumentality and the foreign state so strong as to render
any distinction irrelevant. And by placing the burden of proof
on this issue squarely on plaintiffs, the First Nat'! holding
became a substantial obstacle to FSIA plaintiffs' attempts to
satisfy judgments. See, e.g., Oster v. Republic of S. Afr., 530
F.Supp.2d 92, 97-100 (D.D.C.2007); Bayer & Willis Inc. v.
Republic of the Garn., 283 F.Supp.2d 1, 4-5 (D.D.C.2003).
The second hurdle facing FSIA plaintiffs involved assets that
once belonged to Iran or its agencies but had been seized and
retained by the United States. As a legal matter, "assets held
within United State Treasury accounts that might otherwise
be attributed to Iran are the property of the United States
and are therefore exempt from attachment or execution by
virtue of the federal government's sovereign immunity." In
re Islamic Republic of Terrorism Litig., 659 F.Supp.2d 31, 53
(D.D.C.2009) ( citing Dep't of the Army v. Blue Fox, Inc., 525
U.S. 255, 119 S.Ct. 687, 142 L.Ed.2d 718 (1999)). Victims
of state-sponsored terrorism attempting to seize such assets
were thus put in the perverse position oflitigating against their
own government, see Weinstein, 274 F.Supp.2d at 56 ("[I]f
a litigant seeks to attach funds held in the U.S. Treasury, he
or she must demonstrate that the United States has waived
its sovereign immunity with respect to those funds.") which
strongly opposed attempts to attach such assets. As one
commentator explains:
As a matter of foreign policy, the President regards frozen
assets as a powerful bargaining chip to induce behavior
desirable to the United States; accordingly, allowing
private plaintiffs to file civil lawsuits and tap into the
frozen assets located in the United States may weaken
the executive branch's negotiating position with other
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countries. For this reason, several U.S. presidents have
opposed giving victims access to these funds.
Debra M. Strauss, Reaching Out to the International
Community: Civil Lawsuits *15 as the Common Ground
in the Battle against Terrorism, 19 Duke J. Comp. & Int'l
L. 307, 322 (2009). The Executive Branch has consistently
succeeded in arguing that the FSIA does not waive the United
States' immunity with respect to seized Iranian assets. See,
e.g., Flatow, 74 F.Supp.2d 18.
Eventually Congress enacted the Terrorism Risk Insurance
Act ("TRIA"), Pub. L. No. 107-297, 116 Stat. 2322 (2002),
"to 'deal comprehensively with the problem of enforcement
of judgments rendered on behalf of victims of terrorism in any
court of competent jurisdiction by enabling them to satisfy
such judgments through the attachment of blocked assets of
terrorist parties.' " Weininger v. Castro, 462 F.Supp.2d 457,
483 (S.D.N.Y.2006) (quoting H.R. Conf. Rep. 107-779, at 27
(2002), 2002 U.S.C.C.A.N. 1430, 1434). The TRIA declares
that
[ n ]otwithstanding any other provision of law, ... 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 the 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). In other words, the TRIA "subjects the assets
of state sponsors of terrorism to attachment and execution in
satisfaction of judgments under§ 1605(a)(7)," In re Terrorism
Litig., 659 F.Supp.2d at 57, by "authoriz[ing] holders of
terrorism-related judgments against Iran ... to attach Iranian
assets that the United States has blocked." Ministry of Def &
Support for the Armed Forces of the Islamic Republic of Iran
v. Elahi, 556 U.S. 366, 129 S.Ct. 1732, 1735, 173 L.Ed.2d 511
(2009) (quotations omitted; emphasis in original).
The TRIA was designed to remedy many of the problems
that previously plagued victims of state-sponsored terrorism;
in practice, however, it led to very few successes. But
while the TRIA did abrogate the First Nat'! holding with
respect to "blocked assets," Weininger, 462 F.Supp.2d at
485-87, that victory proved hollow once victims discovered
that, at least with respect to Iran, "very few blocked assets
exist." In re Terrorism Litig., 659 F.Supp.2d at 58. And
the barren landscape facing these FSIA plaintiffs was only
further depleted by the exclusion of diplomatic properties
from the TRIA's reach. See Bennett, 604 F.Supp.2d at 161
("[The TRIA] expressly excludes 'property subject to Vienna
Convention on Diplomatic relations, or that enjoys equivalent
privileges and immunities under the law of the United
States, being used for exclusively for diplomatic or consular
purposes.'") (quoting TRIA § 201(d)(2)(B)(ii)).
Against this desolate backdrop, Congress enacted the NDAA,
which added paragraph (g) to the execution section of the
FSIA. This new provision, in its entirety, declares:
(g) Property in Certain Actions.-
(1) In general.-Subject to paragraph (3), the property
of a foreign state against which a judgment is entered
under section 1605A, and the property of an agency or
instrumentality of such a state, including property that is
a separate juridical entity or is an interest held directly
or indirectly in a separate juridical entity, is subject to
attachment in aid of execution, and execution, upon that
judgment as provided in this section, regardless of-
*16 (A) the level of economic control over the
property by the government of the foreign state;
(B) whether the profits of the property go to that
government;
(C) the degree to which officials of that government
manage the property or otherwise control its daily
affairs;
(D) whether that government is the sole beneficiary in
interest of the property; or
(E) whether establishing the property as a separate
entity would entitle the foreign state to benefits in
United States courts while avoiding its obligations.
(2) United states sovereign immunity inapplicable.
-Any property of a foreign state, or agency or
instrumentality of a foreign state, to which paragraph
(1) applies shall not be immune from attachment in aid
of execution, or execution, upon a judgment entered
under section 1605A because the property is regulated
by the United States Government by reason of action
taken against that foreign state under the [TWEA] or the
[IEEPA].
(3) Third-party joint property holders.-Nothing in this
subsection shall be construed to supersede the authority
of a court to prevent appropriately the impairment of
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an interest held by a person who is not liable in the
action giving rise to a judgment in property subject to
attachment in aid of execution, or execution, upon such
judgment.
28 U.S.C. § 1610(g). Courts have had little opportunity to
explore the full implications of§ 16 lO(g), though at least one
has observed that the NDAA will have a significant impact on
plaintiffs' attempts to enforce FSIA judgments. See CalderonCardona
v. Dem. People's Rep. of Korea, 723 F.Supp.2d441,
458 (D.D.C.2010) ("Section 1083 adds a new subsection,
section 16 lO(g)( 1 ), which significantly eases enforcement of
judgments entered under section 1605A.").
B. Procedural History
Having obtained judgment against defendants and properly
served them with copies of that judgment as required under
the FSIA, Order, May 10, 2010[158], plaintiffs issued several
writs to a number of telecommunications companies asking,
inter alia, whether the particular company does any business
with, or is indebted to, defendants or the Telecommunications
Company oflran ("TCI"). 3 Plaintiffs targeted such companies
in light of an ITR license authorizing "[ a ]11 transactions of
common carriers incident to the receipt or transmission of
telecommunications and mail between the United States and
Iran." 31 C.F.R. § 560.508. In its response, Sprint explained
that it does no business with TCI, but stated:
Consistent with the authority granted by the United
States Department of Treasury, Office of Foreign
Assets Control, 31 C.F.R. § 560.508, Sprint does
exchange telecommunications traffic directly with the
Telecommunication Infrastructure Company oflran, which
was not a defendant in the underlying action and was
not identified in the plaintiffs' Writ as an 'agency' or
'instrumentality' of one or more of defendants.
*17 The Sprint/TIC relationship is a bilateral
telecommunications carrier relationship that results in a
periodic settlement and offset process to determine the
net payer and payee. So far as is known, during 2010,
Sprint has been a net payer, which will result in quarterly
payments to TIC. Because telecommunications services
are commoditized, the amounts of payments are directly
related to the volume of calls Sprint sends to TIC in a
given month for termination in Iran. At present, Sprint
owes to TIC the sum of$358,708.76 based on amounts
which have been declared by the parties for the months
of January, February and March, 2010. Sprint may owe
TIC amounts for traffic conducted in April and May,
2010, but those amounts have not yet been determined
or invoiced and thus no debt is currently due.
Answer and Defenses of Garnishee Sprint
Communications Company LP ,r,r 4-5, June 21, 2010[165]
("Answer"). Relying on this response, plaintiffs requested
that the Court traverse Sprint's Answer and order the
company to turn over the funds that it owed to TIC,
asserting that Sprint admitted that it owes money to
an instrumentality of Iran and that § 1610(g) permits
attachment of these funds. Motion for Traverse of Answer
,r,r 7-13, July 1, 2010[166]. In response, Sprint pointed
to unresolved issues of fact and sought trial on various
matters, Request for Trial Setting by Garnishee Sprint
Communications Company, LP, Sep. 22, 2010[168]a
request that the Court denied soon thereafter. Order,
Sep. 23, 2010[169]. In that same Order, the Court
also invited the United States to weigh in on whether
plaintiffs can garnish payments from a U.S. company to
an instrumentality of Iran in satisfaction of a judgment
under § 1605A. Id.4 Before any response was submitted
by the United States, plaintiffs moved for judgment on the
writ and an order directing Sprint to tum over funds owed
to TIC. Motion for Judgment against Garnishee Sprint
Communications Company LP and for Turnover of Funds,
Feb. 8, 2011[172].
After plaintiffs' motions were fully briefed, the Court
previously denied plaintiffs' motion for traverse, finding that
nothing in Sprint's Answer could satisfy plaintiffs' burden
to demonstrate that the funds owed to TIC are not immune
from execution-which requires proof that TIC is in fact
an agency or instrumentality of Iran. Order 3--4, Mar. 31,
2011[180]. And as for plaintiffs' motion for judgment, the
Court observed that plaintiffs' submission of evidence on
reply denied Sprint "a full and fair opportunity to respond,"
and thus deferred ruling until Sprint was given an adequate
chance to counter. Id. at 5---6. The Court then directed Sprint
to respond to plaintiffs' evidence or "seek any other relief it
deems necessary." Id. at 6.
Sprint subsequently sought leave to both amend its Answer
and interplead TIC, arguing that TIC is a necessary
party to these proceedings. Motion for Leave to Amend
Answer, May 2, 2011[183] ("Leave Mtn."). At the same
time, Sprint submitted a proposed complaint against TIC,
Counterclaim for Interpleader, May 3, 2011 [184-1], and
an amended answer in which it states that it presently
owes TIC $613,587.38 and raises a number of defenses
previously asserted in its original Answer and opposition to
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plaintiffs' motion for judgment. Answer & Defenses, June
10, 2011 [187] ("Second Answer"). Plaintiffs opposed Sprint's
request for leave to amend and interplead TIC, Opposition
to Motion for Leave, May 19, 2011[185], and subsequently
moved again for judgment on *18 the writ. Second Motion
for Judgment of Condemnation, July 6, 2011[189]. For the
reasons set forth below, the Court grants plaintiffs' motion for
judgment, grants in part and denies in part Sprint's request for
leave, and directs Sprint to turn over to plaintiffs the funds
owed to TIC.
III. DISCUSSION
A. Plaintiffs' Entitlement to Funds Held by Sprint and
Owed to TIC
Plaintiffs invoke § 1610(g) of the FSIA in their attempt to
garnish funds held by Sprint and owed to TIC. 5 This provision
is designed to "clarify the circumstances under which the
property of a foreign state sponsor of terrorism is subject to
attachment and execution." Bennett, 604 F.Supp.2d at 162.
Under § 1610(g), the property "of a foreign state" or "of
an agency or instrumentality of a foreign state" is subject to
execution, even where that property "is a separate juridical
entity or is an interest held directly or indirectly in a separate
juridical entity." 28 U.S.C. § 1610(g)(l).6 This provision
"expand[s] the category of foreign sovereign property that
can be attached; judgment creditors can now reach any U.S.
property in which Iran has any interest .. . whereas before
they could only reach property belonging to Iran." Peterson
v. Islamic Republic of Iran, 627 F.3d 1117, 1123 n. 2 (9th
Cir.2010). Sprint does not contest thatthe funds it owes to TIC
are potentially subject to § 1610(g), but instead argues that
(1) plaintiffs have not demonstrated that TIC is an agency or
instrumentality oflran as defined by the FSIA, (2) the amount
potentially owed was frozen at the time the writ was issued,
and (3) attachment of the funds would subject Sprint to the
risk of double liability in violation of the Act's plain terms.
Opposition to Motion for Judgment 4-7, Mar. 7, 2010[176]
("Jdgmt. Opp."). The Court discusses each of these objections
in tum.
1. TIC is an Agency or Instrumentality oflran
To attach the funds held by Sprint, plaintiffs need only
establish that TIC is *19 an agency or instrumentality of
Iran. 28 U.S.C. § 1610(g). Prior attempts to execute against
assets held by foreign instrumentalities had to be made
under§ 1610(b), which requires-in addition to proof of an
instrumentality relationship--that "the judgment relates to a
claim for which the agency or instrumentality is not immune
by virtue" of the FSIA liability exceptions. Id. § 1610(b)
(2) (emphasis added). Combined with the presumption of
independent status articulated by the Supreme Court in First
Nat'!, the practical effect of this provision is to ensure
that "an agency or instrumentality of a foreign state could
not automatically be liable for the debts of its associated
foreign state." Weininger, 462 F.Supp.2d at 483; see also
id. at 482 ("[ A ]gencies and instrumentalities also enjoy
immunity from suit and execution unless an exception
applies."). Further complicating matters under § 1610(b)
(2), the Supreme Court-relying on the principle of U.S.
corporate law that "[ a ]n individual shareholder, by virtue of
his ownership of shares, does not own the corporation's assets
and, as a result, does not own subsidiary corporations in which
the corporation holds an interest"-held that mere ownership
of a foreign entities' stock does not render assets held by
that entity subject to execution under§ 1610(b). Dole Food
Co. v. Patrickson, 538 U.S. 468, 474-76, 123 S.Ct. 1655,
155 L.Ed.2d 643 (2003). Section 1610(g) unwinds these
limitations, however, by excluding any requirement that the
foreign instrumentality be subject to the underlying claim and
thus not otherwise immune from liability, see generally 28
U.S.C. § 1610(g),7 and by expressly declaring that property
held by an instrumentality is subject to execution "regardless
of the level of economic control over the property by the
government of the foreign state." Id.§ 1610(g)(l)(A).8 Thus,
the only requirement for attachment or execution of property
is evidence that the property in question is held by a foreign
entity that is in fact an agency or instrumentality of the foreign
state against which the Court has entered judgment.
The FSIA defines "instrumentality" as any entity that (1)
is "a separate legal person, corporate or otherwise," (2) is
"an organ of a foreign state" or "whose shares or other
ownership interest is owned by a foreign state," and that (3)
is "neither a citizen of a State of the United States ... nor
created under the laws of any third country." 28 U.S.C. §
1603(b)(l)-(3). To show that TIC is an instrumentality of
Iran, plaintiffs submit an affidavit from Dr. Patrick Clawson,9
who reviewed several documents concerning TIC's status.
Affidavit *20 of Patrick L. Clawson, Ex. 1 to Reply in
Support of Motion for Judgment, Mar. 28, 2011 [ 178-1]
("Clawson Aff."). Dr. Clawson reviews TIC's Articles of
Association, explaining that its shares are 100% governmentowned
and that there is "no ambiguity that TIC is under
the direct control of the [Iranian] Ministry of Information
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and Communications Technology." Id. at '1]'1] 12-13. He also
explains that TIC was created "in accordance with Iran's
constitution and with Islamic Law," and that "the decision to
create TIC was taken by the government." Id. at 'I] 14; see
also id. at 'I] 15 ( quoting Articles of Association explaining
that Iranian Cabinet approved creation of TIC). Finally, Dr.
Clawson states that "Mohammad Ali Forghani, the Deputy
Minister of Information and Communications Technology,
was appointed the chairman of the TIC Board of Directors,
which under the Articles of Association is responsible for
controlling TIC." Id. at 'I] 17.10
Based on this evidence, the Court has no trouble finding
that TIC is an instrumentality of Iran. First, the evidence
shows that TIC is distinct from, though wholly owned by,
Iran. Second, Dr. Clawson's review of TIC's Articles of
Association establishes that it is an "organ" of an Iranian
cabinet-level Ministry, and that Iran possesses an "ownership
interest" in TIC. Finally, the testimony demonstrates that
TIC is established under the laws of Iran, and not those of
the United States or a third country. This is sufficient to
establish that TIC is an instrumentality of Iran. See Auster v.
Ghana Airways, Ltd., 514 F.3d44, 46 (D.C.Cir.2008) (finding
that Ghana Airways is instrumentality of Ghana based on
evidence that it "was incorporated under the laws of Ghana
and wholly owned by Ghana"); Peterson v. Islamic Republic
of Iran, 563 F.Supp.2d 268, 273 (D.D.C.2008) (observing
"no doubt" that Japan Bank for International Cooperation
is instrumentality of Japan because it "was established by
Japanese statute," its capital "is wholly owned by the Japanese
government" and it "is under the direct control of the Japanese
Minister of Finance and the Japanese Minister of Foreign
Affairs").
2. Total Amount Subject to the Writ
Having found that TIC is an instrumentality of Iran and
thus the funds owed to it by Sprint are subject to execution
under§ 1610(g), the Court now turns to the total amount of
money at issue. Under the FSIA, local law on attachment and
execution control any dispute. Levin v. Bank of NY., No. 09
Civ. 5900, 2011 WL 812032, at *7-8, 2011 U.S. Dist. LEXIS
23779, at *35-*36 (S.D.N.Y. Mar. 4, 2011). DC law specifies
that funds held by third parties are subject to attachment and
execution only where they are "actually due and ascertainable
in amount," Cummings Gen. Tire Co. v. Volpe Constr. Co., 230
A.2d 712, 714 (D.C.1967), and no amount may be garnished
that includes future payments which are contingent upon
performance or are otherwise uncertain in amount. See id. at
713 ("[M]oney payable upon a contingency or condition is not
subject to garnishment until the contingency has happened or
the condition has been filled."). Thus, "[i]fthe amount of the
debt becomes fixed ... only upon acceptance of performance
satisfactory to the obligee, or upon the exercise of judgment,
discretion, or opinion, as distinguished from mere calculation
or computation, then the amount of the debt is not sufficiently
certain to permit garnishment." Shpritz v. Dist. of Columbia,
393 A.2d 68, 70 (D.C.1978) (citations omitted).
*21 The funds owed to TIC by Sprint result from "a
bilateral telecommunications carrier relationship" that relies
on "a periodic settlement and offset process to determine
the net payer and payee." Second Answer 'I] 5. This is
not a case, therefore, where Sprint "unconditionally owes"
TIC a definite sum at the time Sprint answered plaintiffs'
interrogatories. Consumers United Ins. Co. v. Smith, 644 A.2d
1328, 1356 n. 34 (D.C.1994) (citing Cummings, 230 A.2d at
713). Accordingly, Sprint is only required to tum over those
amounts that have been officially declared by Sprint and TIC.
As a general rule, the amount of money subject to garnishment
is set at the time a writ is executed. DC law, however, provides
that a party seeking attachment or execution may submit
interrogatories to the third party holding the funds in order
to ascertain any changes to the amounts owed between the
time the writ is served and the time the third party files an
answer to the writ. D.C.Code § 16-521(a). At the time Sprint
filed its Second Answer to plaintiffs' writ and accompanying
interrogatories, Sprint represented that $613,587.38 is the
sum that it owes TIC that the company and TIC have agreed
upon, and that other amounts accruing after March 2011 "have
not yet been determined." Second Answer 'I] 5. Because the
process by which these amounts are calculated is not readily
ascertainable, the Court will use this representation in Sprint's
Second Answer as the final sum. D.C.Code § 16-521(a).
3. Double Liability
Finally, Sprint correctly notes that, as an innocent third
party to the underlying action concerning the Khobar Towers
bombing, it is afforded certain protections under both
the FSIA and DC law. The FSIA contains the following
provision: "Nothing in this subsection shall be construed to
supersede the authority of a court to prevent appropriately
the impairment of an interest held by a person who is not
liable in the action giving rise to a judgment in property
subject to attachment in aid of execution, or execution, upon
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such judgment." 28 U.S.C. § 1610(g)(3). In commenting on
this provision, the House Report to the 2008 Amendments
explains that "[w]hile [§ 1610(g) ] is written to subject any
property interest in which the foreign state enjoys a beneficial
ownership to attachment and execution, the provision would
not supersede the court's authority to appropriately prevent
impairment of interests in property held by other persons
who are not liable to the claimants in connection with the
terrorist act." H.R. Conf. Rep. No. 110-477, at 1001---02
(2007); see also id. at 1002 ("The conferees encourage the
courts to protect the property interests of such innocent third
parties by using their inherent authority, on a case-by-case
basis, under the applicable procedures governing execution
on judgment."). Thus, § 1610(g)(3) "expressly protects the
rights of third parties in actions to levy or execute upon a
judgment entered against Iran." In re Terrorism Litig., 659
F.Supp.2d at 122.
In invoking this provision to defend against garnishment,
Sprint points to a particular bedrock principle of the law
concerning post-judgment proceedings: "It ought to be and
it is the object of the courts to prevent the payment of any
debt twice." Harris v. Balk, 198 U.S. 215, 226, 25 S.Ct.
625, 49 L.Ed. 1023 (1905). The District of Columbia law
on attachment and execution codifies this general principle;
specifically, the relevant provision declares:
A judgment of condemnation against a garnishee, and
execution thereon, or payment by the garnishee in
obedience to the judgment or an order of the court, *22 is a
sufficient defense to any action brought against him by the
defendant in the action in which the attachment is issued,
for or concerning the property or credits so condemned.
D.C.Code § 16-528. Under normal circumstances involving
parties located in the United States, courts are generally
assured that garnishees will be protected by the Full Faith and
Credit Clause of the Constitution, which requires other courts
to recognize liability and garnishment Orders as full defenses
to subsequent litigation. Here, however, Sprint argues that
Iranian courts would fail to recognize the legitimacy of
plaintiffs' default FSIA judgment, and thus Sprint could be
exposed to double-liability in litigation with TIC over the
funds. Jdgmt. Opp. at 4-5.
The Court is unaware of any DC caselaw applying § 16-
528 to litigation involving Iran or other foreign states. But
in JPMorgan Chase Bank, NA. v. Motorola, Inc., the First
Department of the Appellate Division in New York was
confronted with a bank's attempt to satisfy a default judgment
against Iridium India Telecom Ltd. ("IITL") by attaching
funds owed by defendant Motorola, Inc. to IITL as a result
of an unrelated lawsuit in India. 47 A.D.3d 293, 294-95, 846
N.Y.S.2d 171 (2007). In response, Motorola argued that the
proposed attachment subjected it to double-liability, as "the
Indian court is unlikely to deem Motorola's liability to IITL
to be reduced by any payment it makes to Chase." Id. at 300,
846 N.Y.S.2d 171. The Motorola Court agreed, relying on
a "policy to protect garnishees from double liability" under
both applicable precedent, id. at 306, 846N.Y.S.2d 171 (citing
Harris, 198 U.S. at 226, 25 S.Ct. 625), and New York law.
In closing, the First Department observed that "Chase ... will
realize a 'windfall' if we sustain a garnishment that, given
the demonstrated state of Indian law, will force Motorola to
bear the cost of Chase's inability to collect its collateral from
IITL," and thus held that "[t]he avoidance of this injustice
constitutes sufficient reason to exercise our power ... to deny
a garnishment, even assuming that the garnishment would
otherwise be proper." Id. at 312, 25 S.Ct. 625.
The posture of this case is in stark contrast to that of Motorola,
in which the third party presented "unrebutted evidence"including
a statement by an Indian law expert-that the
courts in India would not recognize the validity of the default
judgment, and thus would not offset the third party's liability
to IITL as a result of its payment to Chase. 47 A.D.3d at 304-
05, 846 N.Y.S.2d 171; see also id. at 307, 846 N.Y.S.2d 171
(finding that "the record evidence indicates that the Indian
courts will not give the judgment appealed from the effect
to which it is entitled under New York law"). Here, Sprint
does no more than casually assert that "[i]t does not require
elaborate argument or citation to conclude that this defense
will be unavailing to Sprint in the event of future litigation
between Sprint and TIC in an Iranian court." Jdgmt. Opp. at
4. This unsupported statement fails for several reasons. As an
initial matter, unlike Motorola-which involved an ongoing
suit already proceeding in Indian courts-here Sprint points
to no proceeding in which it could be subject to liability to
TIC. In a similar vein, Sprint does not explain how it could
possibly be subject to the jurisdiction of any Iranian court,
nor does it identify any assets that could be in jeopardy were
a tribunal located in Iran to rule against it. And to the extent
that TIC might pursue an action in a U.S. court against Sprint,
DC law expressly protects Sprint from any future judgment.
D.C.Code § 16-528 ("A judgment of condemnation against
a garnishee ... is a sufficient defense to any action brought
against him ... for or concerning *23 the property or credits
so condemned."). Absent additional evidence of a genuine
risk, the Court holds that Sprint is adequately protected from
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any possibility of exposure to double liability, as required by
§ 1610(g).
B. Sprint's Remaining Objections
In addition to objections based on§ 1610(g), Sprint advances
several independent legal arguments as to why the Court
should not enter judgment on the writ in favor of plaintiffs.
The Court dismisses these objections for the reasons that
follow.
1. Request for Interpleader
The position most forcefully taken by Sprint is that it should
be permitted to interplead TIC into this proceeding. In support
of this request, Sprint argues that TIC is a necessary party and
that its presence is required to resolve the factual question of
whether it is an agency or instrumentality of Iran. Reply in
Support ofMotion for Leave 1-3, May 26, 2011 [186] ("Leave
Reply"). The Court will deny Sprint's motion.
As an initial matter, the Court has determined that TIC is
in fact an agency or instrumentality of Iran-a conclusion
that Sprint does not contest11-and the FSIA does not require
any provision of special notice to TIC. Specifically, the
FSIA requires only that a copy of any default judgment be
served on defendants, 28 U.S.C. § 1608( e )-a task which has
already been accomplished-and does not demand service
of additional post-judgment motions. Peterson, 627 F.3d at
1129-30 & n. 5.12 Moreover, even if notice requirements
found in the FSIA could be read to require service of postjudgment
motions, the provisions concerning notice apply
only to attachment and execution under§§ 1610(a) & (b) and
say nothing about§ 1610(g). See 28 U.S.C. § 1610(c) ("No
attachment or execution referred to in subsections (a) and (b)
of this section .... "). The explicit exclusion of attachments and
executions under § 161 0(g) from the notice requirement is
further evidence that Congress did not intent to require service
of garnishment writs on agencies or instrumentalities of
foreign states responsible for acts of state-sponsored terrorism
under § 1605A-a conclusion in keeping with the underlying
justifications for the 2008 Amendments. See In re Terrorism
Litig., 659 F.Supp.2d at 64 (explaining "broad remedial
purposes Congress sought to achieve through the enactment
of the [NDAA ]"). Accordingly, TIC is not a necessary party
to this action under applicable law. 13
Moreover, there is no need for interpleader in this action.
"[A] prerequisite for interpleader is that the party requesting
interpleader demonstrate that he *24 has been or may
be subjected to adverse claims." Hollister v. Soetoro, 258
F.R.D. 1, 3 (D.D.C.2009). As set forth above, Sprint has
not sufficiently established any risk of being subjected to
double liability over the funds it currently holds. Supra.
"[I]nterpleader requires real claims, or at least the threat
of real claims-not theoretical, polemical, speculative,
or I'm-afraid-it-might-happen-someday claims." Id. This
requirement is not satisfied in this instance.
Nor does DC law provide for interpleader in garnishment
proceedings-in contrast to other jurisdictions. See, e.g.
Miss.Code Ann.§ 11-35--41 (2011). Instead, DC law permits
any person with a claim to property subject to attachment
to appear and demand a trial of any issues necessary to
determine the appropriate action with respect to the property
in question. D.C.Code § 16-554. According to Sprint,
amounts due to TIC have been accruing and held by the
company since January 2010. Second Answer ,r 5 n.1. TIC is
surely on notice of the hold-up, and if it wishes to challenge
the garnishment of funds owed to it by Sprint, DC law
provides a clear mechanism for it to register any objection.
The Court sees no reason to aid TIC by prolonging this dispute
in response to TIC's silence.
Finally, this action has been proceeding for more than a
decade, and yet in all this time Iran has not appeared to
account for its role in the horrific bombing of the Khobar
Towers residential complex. This choice was made despite
both exposure to more than $500 million in damages and
evidence that Iran is perfectly capable of appearing when it
wishes. See, e.g., Rubin v. Islamic Republic of Iran, No. 03
Civ. 9370, 2008 WL 192321, at *1, 2008 U.S. Dist. LEXIS
4651, at* 1-*2 (Jan. 18, 2008). Though Sprint correctly points
out that the excessive delay in these proceedings is not the
company's fault, it is equally true that the funds to be turned
over in this matter are not the company's proceeds. And to
the extent interpleader might minimize any risk Sprint may
face after the close of these proceedings, that risk came into
existence at the precise moment the company decided to
engage in commercial transactions with an instrumentality of
Iran-OFAC license or not. In this instance, Congress has
announced a broad new policy to aid terrorist victims, and has
passed a law that permits those victims to seize funds headed
for any agency or instrumentality of Iran. The Court will not
stand as a roadblock on the path to justice by imposing new
requirements or permitting supplementary procedures that
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Congress itself did not deem necessary. As an action in equity,
acceptance of an interpleader action is not mandatory, and
may be denied for equitable reasons. Star Ins. Co. v. Cedar
Valley Express, LLC, 273 F.Supp.2d 38, 41--42 (D.D.C.2002).
In this instance, given the heinous nature of the attack on
Khobar Towers, Iran's deliberate choice not to participate in
these proceedings despite repeated notice, see In re Terrorism
Litig., 659 F.Supp.2d 31, 85 ( observing that "the notion" that
Iran might appear "is almost laughable because that nation has
never appeared in any of the terrorism actions that have been
litigated against it in this Court"), and the extensive delay in
justice for victims of state-sponsored terrorism, the Court sees
no reason to postpone action. Accordingly, Sprint's request
for interpleader will be denied.
2. Preemption by OFAC Regulations
The Court now turns to whether the OFAC license that
permits Sprint's exchange of telecommunications traffic with
TIC preempts enforcement of plaintiffs' judgment. Sprint
argues that application of the FSIA and the District of
Columbia's *25 enforcement provisions is preempted by the
existence of a regulatory regime maintained by OFAC which
"implement[s] the foreign policy judgments of the Executive
Branch." Jdgmt. Opp. at 3--4. In support of this position,
Sprint argues that were the Court to permit execution, "the
general license set forth in 31 C.F.R. § 560.508 is rendered a
nullity." Id. at 3. The Court disagrees.
As an initial matter, the Court rejects any assertion that
today's holding could render the general license provided
by OFAC a "nullity." The purpose of the general license
found in § 560.508 is to permit U.S. companies-such
as Sprint-to conduct telecommunications business without
being barred by the general prohibitions of the ITR, and
nothing in either the OFAC regulations or the letter from
OFAC to Sprint, submitted in support of Sprint's opposition,
indicates that § 560.508 is designed to have any other effect.
Moreover, permitting execution of Sprint's indebtedness to
TIC in satisfaction of a valid § 1605A judgment in no
way undermines the license, as Sprint remains authorized to
exchange telecommunications traffic with TIC or any other
Iranian entity under the OFAC regulations. 14
Having dismissed Sprint's attempt to construct mountains
from molehills, the Court turns to the question of preemption.
"[I]n every preemption case, 'the purpose of Congress is
the ultimate touchstone.' " Geier v. Am. Honda Motor Co.,
166 F.3d 1236, 1237 (D.C.Cir.1999) (quoting Medtronic, Inc.
v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d
700 (1996)). The matter before the Court, however, is not
a typical preemption case. While it is true that DC law
provides the process by which plaintiffs may enforce their
judgment, the substantive basis for their right to execution
is not found in DC law, but in § 1610(g) of the FSIA-a
federal statute. Thus, the fundamental question at the heart of
Sprint's argument is whether the scope of§ 161 0(g) is limited
by OFAC regulations. The Court rejects this proposition, for
three reasons.
First, nothing in the text of the FSIA supports Sprint's
position. Congress passed the 2008 Amendments-including
§ 1610(g)-well-aware of the complex regime of Executive
Orders, regulations and statutes which permitted-and,
unfortunately, more often prevented-FSIA plaintiffs from
enforcing judgments under the Act. See Ark. Dairy
Coop. Ass'n v. Dep't of Agriculture, 573 F.3d 815, 829
(D.C.Cir.2009) ("Courts 'generally presume that Congress
is knowledgeable about existing *26 law pertinent to the
legislation it enacts.' ") ( quoting Goodyear Atomic Corp.
v. Miller, 486 U.S. 174, 184-85, 108 S.Ct. 1704, 100
L.Ed.2d 158 (1988)). Yet, in crafting the broad remedial
language of § 1610(g), Congress made no exceptions to
its reach, despite the fact that the plain language of the
Act undeniably reaches transactions otherwise authorized
by OFAC regulations. This omission is telling, particularly
where Congress has demonstrated its ability to exempt
particular property from execution by-for exampleexplicitly
exempting diplomatic property from the reach of
the TRIA. TRIA § 210(b)(2)(A).
Second, the language of the OFAC regulations does not give
any hint of any intended preemptive effect. The specific
provision allowing Sprint to exchange telecommunications
traffic with TIC reads, in its entirety: "All transactions of
common carriers incident to the receipt or transmission of
telecommunications and mail between the United States and
Iran are authorized." 31 C.F.R. § 560.508. Nothing in this
regulatory provision indicates that it somehow immunizes
the activity undertaken under the "general license" from
all other statutes-including from execution of legitimate
judgments. Indeed, OFAC's letter to Sprint suggests precisely
the opposite. In that letter, OFAC explains that payments
to TIC are authorized by § 560.508, but then goes on to
express the caveat that payments to certain Iranian banks
are prohibited by other federal laws, and thus may not be
made regardless of the general license. Ltr. from OFAC to
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Sprint, dated Jan. 13, 2009 at 1-2, attached as Ex. 1 to Sprint
Opp., Mar. 7, 2011 [176-1]. The fact that certain federal laws
can override the legitimacy of payments made in connection
with transactions authorized by § 560.508 undermines any
notion that this provision has the immunizing quality urged
by Sprint.
Finally, mindful of the central role that Congressional intent
plays in preemption analysis, the Court cannot ignore that
a core purpose of the NDAA is to significantly expand the
number of assets available for attachment in satisfaction
of terrorism-related judgments under the FSIA. As already
set forth above, the language of § 16 lO(g) is broad and
without reservation; indeed, this Court has explored the
"broad remedial purposes" of the NDAA, explaining that §
1610(g) "demonstrate[s] that Congress remains focused on
eliminating these barriers that have made it nearly impossible
for plaintiffs in these actions to enforce civil judgments
against Iran or other state-sponsors of terrorism." In re
Terrorism Litig., 659 F.Supp.2d at 62-64. In light of these
strong remedial purposes, the Court will not now read a
significant exception into § 161 0(g) that is not otherwise
found in the text and that would severely undercut the
unmistakable goals of Congress.
3. Necessity of a Regulatory License
Finally, Sprint argues that plaintiffs must obtain a specific
license to garnish funds held by the company and owed to
TIC. Jdgmt. Opp. at 8. In support of this position, Sprint cites
an OFAC regulation declaring that
[ e ]xcept as otherwise authorized, specific licenses may be
issued on a case-by-case basis to authorize transactions
in connection with award, decisions or orders of the
Iran-United States Claims Tribunal in The Hague, the
International Court of Justice, or other international
tribunals ( collectively 'tribunals'); agreements settling
claims brought before tribunals; and awards, orders,
or decisions of an administrative, judicial or arbitral
proceeding in the United States or abroad, where the
proceeding involves the enforcement of awards, decisions
or orders of tribunals, or is contemplated *27 under
an international agreement, or involves claims arising
before 12:01 a.m. EDT, May 7, 1995, that resolve disputes
between the government of Iran and the United States or
United States nationals.
31 C.F.R. § 560.510. The plain language of this provision
refutes Sprint's position. By its own terms, § 560.510 applies
only to transactions concerning (1) awards of international
tribunals, (2) settlements of disputes in international tribunals,
and (3) awards of U.S. courts in connection with either
enforcement of awards of international tribunals or claims
arising before May 7, 1995. See generally id. The underlying
action in these proceedings does not involve the ruling of
any international tribunal as envisioned in this regulatory
provision, and thus§ 560.510 is applicable only if this action
involved claims "arising before 12:01 a.m. EDT, May 7,
1995." Id. The Khobar Towers bombing occurred more than
a year after this date, supra, however, and even if it had
not, the "claim" in this proceeding is the right to funds held
by Sprint, which arose only two years ago when the Court
entered judgment on behalf of plaintiffs. Ministry of Def &
Support for the Armed Forces v. Cubic Def Sys., 385 F.3d
1206, 1224 (9th Cir.2004), rev'd on other grounds, 546 U.S.
450, 126 S.Ct. 1193, 163 L.Ed.2d 1047 (2006). Moreover,
as the Eleventh Circuit has explained, the primary purpose
of this provision is to regulate any judgment leading to the
transfer of funds or assets from the United States to Iran, See
Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355, 362-
63 (11th Cir.1984) (observing that license under§ 560.510
must be secured where U.S. citizen seeks to "transfer[] assets
out of this country" to Iran}-which is obviously not the
case here. The Court therefore holds that no OFAC license is
necessary under relevant regulations. 15
IV. CONCLUSION
The Court would like to conclude by noting that this decision
represents renewed hope for long-suffering victims of statesponsored
terrorism. Would like to. But the bleak reality is
that today's decision comes after more than a year oflitigation
and results in a turnover of funds amounting to less than onetenth
of one-percent of what plaintiffs are entitled to in these
consolidated cases. And this infinitesimal sum is dwarfed
by even greater magnitudes when compared to the endless
agony and suffering befalling these victims. A step in the right
direction, to be sure. But a very small one.
A separate Order and Judgment consistent with these findings
shall issue this date.
All Citations
807 F.Supp.2d 9
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Footnotes
1 Hezbollah is synonymous with "Hizbollah," which is merely a ''variant transliteration[ ] of the same name." Oveissi v.
Islamic Republic of Iran, 498 F.Supp.2d 268,273 n. 3 (D.D.C.2007), rev'd on other grounds, 573 F.3d 835 (D.C.Cir.2009).
2 The Court here only briefly recounts the relevant background to place the current regulatory framework in proper context.
For an extensive history of regulations and Executive Orders concerning Iran, see Judge Wexler's excellent summary in
Weinstein v. Islamic Republic of Iran, 299 F.Supp.2d 63, 65-68 (E.D.N.Y.2004).
3 Because a review of the history of these consolidated actions before the present motions is not necessary for resolution
of the matter before the Court, this opinion recounts only the relevant post-judgment history. For a full recap of the liability
proceedings, see Heiser I, 466 F.Supp.2d at 248-51.
4 To date, the United States has declined to offer any opinion on these proceedings.
5 Though this new provision is codified as part of the general immunity exceptions in the FSIA, the subsection only applies
to "property of a foreign state against which a judgment is entered under section 1605A," 28 U.S.C. § 161 0(g)(1 ); thus,
the benefits provided accrue only to victims of state-sponsored terrorism who obtained judgments under § 1605A, and
not its predecessor, § 1605(a)(7). In re Terrorism utig., 659 F.Supp.2d at 115.
6 The TRIA is inapplicable in this instance, as that statute applies only to "blocked assets," which it defines as "any asset
seized or frozen by the United States." TRIA § 201 {d)(2)(A). Here, the payments owed from Sprint to TIC are neither seized
nor frozen; instead, they are made under a general license permitting payments incident to telecommunications traffic. 31
C.F.R. § 560.508. Money transferred between Sprint and TIC is thus "regulated," which is "[t]he act of controlling by rule
or restriction." Black's Law Dictionary 1311 (8th ed. 2004). Moreover, the TRIA defines "blocked assets" by reference to
OFAC regulations, Levin v. Bank of N. Y., No. 09 Civ. 5900, 2011 WL 812032, at *16-17, 2011 U.S. Dist. LEXIS 23779, at
*64 (S.D.N.Y. Mar. 4, 2011); see also Hauslerv. JPMorgan Chase Bank, N.A., No. 09-cv-10289, 2010 U.S. Dist. LEXIS
96611, at *22 (S.D.N.Y. Sep. 13, 2010) {'TRIA explicitly indicates that 'blocked assets' are to be determined in reference
to the [OFAC regulations]."), which provide that a "license authorizing a transaction otherwise prohibited under this part
has the effect of removing a prohibition or prohibitions." 31 C.F.R. § 535.502(c). Thus, because transactions between
Sprint and TIC are undertaken under an OFAC licensing scheme, they are unblocked and not subject to attachment. See
Bank of N. Y. v. Rubin, 484 F.3d 149, 150 {2d Cir.2007) {holding "that assets blocked pursuant to Executive Order 12170
... and its accompanying regulations, see 31 C.F.R. Part 535, that are also subject to license of 31 C.F.R. § 535.579,
are not blocked assets under the TRIA").
7 One exception to this expansion of available assets for execution of§ 1605A judgments is the ability of FSIA plaintiffs to
attach diplomatic properties. See Bennett, 604 F.Supp.2d at 162 ("[Section] 1610(9) is silent with respect to diplomatic
properties; ... even if the full scope or application of§ 161 0(g) is not entirely clear, a plain reading of the new enactment
in no way provides a sufficient basis for stripping away the immunity long afforded to diplomatic property."); see also id.
(noting that legislative history "strongly suggests that Congress did not intend for § 161 0(g) to allow for attachment or
execution of diplomatic properties").
8 Though not at issue here, it also bears mention that § 161 0(g) does not limit attachment to property used in "commercial
activity"-unlike the execution provisions found in§ 161 0(a) & {b)-and thus the Act "removes from the victims the burden
of specifying commercial targets ... to help them receive justice and recover damages." Strauss, Reaching Out, supra
at 332-33.
9 This Court has previously observed that Dr. Clawson is "a 'widely-renowned expert on Iranian affairs.' "Anderson v.
Islamic Republic of Iran, 753 F.Supp.2d 68, 78 (D.D.C.2010) (quoting Peterson v. Islamic Republic of Iran, 264 F.Supp.2d
46, 51 (D.D.C.2003)).
1 O Sprint does not contest the veracity of Dr. Clawson's affidavit. Leave Mtn. at 2.
11 TIC does object that Dr. Clawson's affidavit is hearsay. Leave Reply at 3 n.1. However, Dr. Clawson's own affidavit verifies
the authenticity of the Articles of Association and their consistency with standard legal documents in Iran, and thus this
public record may be relied upon. United States v. Ragano, 520 F.2d 1191, 1200 {5th Cir.1975); see also Fed.R.Evid. 807.
12 Sprint attempts to create a conflict on this issue by citing Autotech Techs. LP v. Integral Research & Dev. Corp., 499
F.3d 737 (7th Cir.2007). That case, however, involved post-judgment contempt motions and expressly relied on local
and federal rules mandating service of such motions. Id. at 747.
13 Sprint's reliance on Butler v. Polk to argue that this procedure is a new action requiring service under the FSIA, Leave
Reply at 3, is misplaced, as the Butler court evaluated whether a separate enforcement action is removable, 592 F.2d
1293, 1295-96 {5th Cir.1979), and did not address any of the questions before this Court.
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14 Sprint cites ABC Charters, Inc. v. Bronson, 591 F.Supp.2d 1272 (S.D.Fla.2008), but that case is of little help. In ABC
Charters, the district court was evaluating whether recent amendments to the Florida Sellers of Travel Act were void under
the doctrine of conflict preemption. See generally id. at 1301--03. In holding that those amendments were preempted, the
court observed that federal law "already places restrictions on sellers of travel, including regulations as to who can travel
to Cuba, when they can travel, how often they can travel, who can arrange travel to Cuba, and how those transportation
arrangements are to be made." Id. at 1302-03. The Florida law, the court explained, "seeks to regulate all of these
matters," and held that to "place additional restrictions on these sellers of travel, which would regulate the exact same
conduct, would create inherent conflicts." Id. at 1303. Here, by contrast, Congress expressly authorized the use of local
procedures for attachment and execution in satisfaction of FSIA judgments-awards entered under a federal act-and
it did so while well-aware of OFAC's existing licensing scheme. Under these circumstances, the Court does not find that
the general provisions of DC law concerning post-judgment procedures present an irreconcilable conflict with federal
regulations concerning exchanges of telecommunications traffic with Iranian entities.
15 Sprint also points the Court to a statement of interest by the government in a case in which a plaintiff was attempting
to garnish payments owned by several private charter companies to instrumentalities of the Cuban government in
satisfaction of a FSIA judgment. In that instance, the government took the position that "garnishment is one among many
forms of transfer subject to the licensing requirements under the [Cuban Asset Control Regulations]." U.S. Statement of
Interest in Martinez v. ABC Charters, Inc., et al., No. 10 Civ. 20611 at 13-14, Ex. 2 to Opp. to Mtn. for Jdgmt., Mar. 7,
2011 [176-2]. In doing so, however, the government relied on two provisions of the relevant regulations: the first bars any
transfer of assets between the United States and Cuba without a license, 31 C.F.R. § 515.201, and the second defines
transfers to expressly include all garnishments. Id. § 515.310. By contrast, the ITR-under which Sprint exchanges
telecommunications traffic with TIC-does not include any discussion of garnishments.
End of Document © 2021 Thomson Reuters. No claim to original U.S.
Government Works.
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ANNEX 339

Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 1 of 12
UNTED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------X
THE ESTATE OF MICHAEL HEISER, deceased;
GARY HEISER, FRANCIS HEISER; THE
ESTATE OF LELAND TIMOTHY HAUN,
deceased; IBIS S. HAUN; MILAGRITOS PEREZDALIS;
SENATOR HAUN; THE ESTATE OF
ruSTIN R. WOOD, deceased; RICHARD W.
WOOD; KATHLEEN M. WOOD; SHAWN M.
WOOD; THE ESTATE OF EARL F. CARTRETTE,
JR., deceased; DENISE M. EICHSTAEDT;
ANTHONY W. CARTRETTE; LEWIS W.
CARTRETTE; THE ESTATE OF BRIAN MCVEIGH,
deceased; SANDRA M. WETMORE; JAMES V.
WETMORE; THE ESTATE OF MILLARD D.
CAMPBELL; MARIER. CAMPBELL, BESSIE A.
CAMPBELL; THE ESTATE OF KEVIN J. JOHNSON,
deceased; SHYRL L. JOHNSON; NICHOLAS A.
JOHNSON, A MINOR, BY HIS LEGAL GUARDIAN
SHYRL L. JOHNSON; LAURA E. JOHNSON;
BRUCE JOHNSON; THE ESTATE OF JOSEPH E.
RIMKUS, deceased; BRIDGET BROOKS; JAMES R.
RIMKUS; ANNE M. RIMKUS; THE ESTATE
OF BRENT E. MARTHALER, deceased; KATIE L.
MARTHALER; SHARON MARTHALER; HERMAN C.
MARTHALER III; MATTHEW MARTHALER; KIRK
MARTHALER; THE ESTATE OF THANH VAN
NGUYEN, deceased; CHRISTOPHER R. NGUYEN;
THE ESTATE OF JOSHUA E. WOODY, deceased;
DAWN WOODY; BERNADINE R. BEEKMAN;
GEORGE M. BEEKMAN; TRACY M. SMITH;
JONICA L. WOODY; TIMOTHY WOODY; THE
ESTATE OF PETER J. MORGERA, Deceased;
MICHAEL MORGERA; THOMAS MORGERA; THE
ESTATE OF KENDALL KITSON, JR., Deceased;
NANCY R. KITSON; KENDALL K. KITSON;
STEVE K. KITSON; NANCY A. KITSON; THE ESTATE
OF CHRISTOPHER ADAMS, deceased; CATHERINE
ADAMS; JOHN E. ADAMS; PATRICK D. ADAMS;
MICHAEL T. ADAMS; DANIEL ADAMS; MARY YOUNG;
ELIZABETH WOLF; WILLIAM ADAMS; THE ESTATE
OF CHRISTOPHER LESTER, deceased; CECIL H. LESTER;
ruDY LESTER; CECIL H. LESTER, JR.; JESSICA F.
LESTER; THE ESTATE OF JEREMY A. TAYLOR, deceased;
LAWRENCE E. TAYLOR; VICKIE L. TAYLOR; STARLINA
11CV1602 (LTS)(MHD)
[RE: Islamic Republic of
Iran, Iranian Ministry of
Information and Security,
and the Iranian Islamic
Revolutionary Guard Corps.,
Judgment Debtors]
ANSWER TO PETITION
OF BANK OF BARODA,
NEW YORK BRANCH
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 2 of 12
D. TAYLOR; THE ESTATE OF PATRICK P. FENNIG,
deceased; THADDEUS C. FENNIG; CATHERINE FENNIG;
PAUL D. FENNIG; and MARK FENNIG,
Petitioners,
V.
BANK OF BARODA, NEW YORK BRANCH,
Respondent.
X -----------------------
ANSWER TO PETITION
BANK OF BARODA, NEW YORK BRANCH, by its attorneys, Wormser, Kiely, Galef
& Jacobs LLP ("Bank of Baroda NY"), for its answer to the Petition for Turnover Order
Pursuant to Fed.R.Civ.P. 69 and N.Y.C.P.L.R. §§ 5225 and 5227 (the "Petition"), hereby alleges
the following:
NATURE OF PROCEEDING
1. The first sentence of Paragraph 1 of the Petition asserts a legal conclusion to
which no responsive pleading is required, and the Court is respectfully referred to the texts of the
statutes and Rules referenced in that sentence. Bank of Baroda NY denies knowledge or
information sufficient to form a belief as to the truth of the allegations set forth in the remainder
of Paragraph 1 of the Petition.
JURISDICTION AND VENUE
2. Paragraph 2 of the Petition asserts a legal conclusion to which no responsive
pleading is required, and the Court is respectfully referred to the statutes, Rules and case law
referenced in Paragraph 2 of the Petition.
3. Admits that the Court has personal jurisdiction over Bank of Baroda NY, but
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 3 of 12
denies knowledge or information sufficient to form a belief as to the truth of the remaining
allegations set forth in Paragraph 3 of the Petition, and further avers that Paragraph 3 of the
Petition asserts legal conclusions to which no responsive pleading is required. The Court is
respectfully referred to the text of the statutes and Rules referenced in Paragraph 3 of the
Petition.
THE PARTIES
4. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 4 of the Petition.
5. Denies the allegations set forth in Paragraph 5 of the Petition, except admits that it
is the New York Branch of Bank of Baroda and has an office at One Park A venue, New York,
New York.
6. Paragraph 6 of the Petition asserts a legal conclusion to which no responsive
pleading is required, and further avers that Petitioners quote selectively from N.Y.C.P.L.R. §
5225(b), and refers the Court's attention to the full text of that statute.
7. Paragraph 7 of the Petition asserts a legal conclusion to which no responsive
pleading is required.
BACKGROUND
The Judgment Against Iran
8. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 8 of the Petition.
9. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 9 of the Petition, except to admit that Petitioners attached an
Order, dated February 7, 2008, as Exhibit A to the Petition and refers the Court to the contents of
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 4 of 12
that exhibit.
10. Denies knowledge or information sufficient to form a belief as the truth of the
allegations set forth in Paragraph 10 of the Petition, except to admit that Petitioners attached an
Order, dated May 10, 2010, as Exhibit B to the Petition and refers the Court to the contents of
that exhibit.
Registration of the Judgment in this District
11. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 11 of the Petition, except to admit that Petitioners attached a
document entitled "Certification of Judgment for Registration in Another District" as Exhibit C
to the Petition and refers the Court to the contents of that exhibit.
Enforcement of the Judgment in this District
12. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 12 of the Petition, and further avers that Paragraph 12 of the
Petition asserts a legal conclusion to which no responsive pleading is required.
13. Paragraph 13 of the Petition asserts a legal conclusion to which no responsive
pleading is required, and refers the Court to the text of the statutes referenced in Paragraph 13 of
the Petition.
14. Paragraph 14 of the Petition asserts a legal conclusion to which no responsive
pleading is required and refers the Court to the text of the statutes referenced in Paragraph 14 of
the Petition.
15. Paragraph 15 of the Petition asserts a legal conclusion to which no responsive
pleading is required, except to admit that Petitioners quote selectively from TRIA § 201 and to
refer the Court to the text of the statutes and case law referenced in Paragraph 15 of the Petition.
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 5 of 12
16. Paragraph 16 of the Petition asserts a legal conclusion to which no responsive
pleading is required, and further refers the Court to the text of the statutes referenced in
Paragraph 16 of the Petition.
17. Paragraph 17 of the Petition asserts legal conclusions to which no responsive
pleading is required, and refers the Court to the text of the statute, regulations, Executive Orders,
etc. referenced in Paragraph 17 of the Petition, except to admit that, pursuant to its obligations
under various Executive Orders and federal regulations, Bank of Baroda NY has from time to
time reported information to Office of Foreign Assets Control ("OF AC") indicating that Bank of
Baroda NY has interrupted and blocked electronic fund transfers pursuant to the provisions of
such Executive Orders and regulations, and denies knowledge or information sufficient to form a
belief as to whether any "assets" "held" by Bank of Baroda NY are being "held" "on behalf of'
the Islamic Republic of Iran, the Iranian Ministry of Information and Security, and the Iranian
Islamic Revolutionary Guard Corps. ( collectively, "Iran"), its agencies or instrumentalities,
and/or separate juridical entities in which Iran has an interest, direct or indirect.
18. Bank of Baroda NY denies the allegations in Paragraph 18 of the Petition, and
further avers that a Court must determine if Bank of Baroda NY is in "possession" of "Iranian
assets".
19. Paragraph 19 of the Petition asserts legal conclusions to which no responsive
pleading is required, and Bank of Baroda NY further denies knowledge or information sufficient
to form a belief as to the truth of the allegations set forth in Paragraph 19 of the Petition.
20. Denies the allegations set forth in Paragraph 20 of the Petition, except to admit
that Bank of Baroda NY received a document referencing one Writ of Execution for
$254,431,963.42 from the United States Marshals Service, Southern District of New York on
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 6 of 12
January 3, 2011.
21. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 21 of the Petition, except to admit that Petitioners have
attached a document entitled "Process Receipt and Return" as Exhibit E to the Petition, and
refers the Court to the contents of that exhibit.
22. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 22 of the Petition.
23. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 23 of the Petition, as Bank of Baroda NY does not have the
knowledge or information sufficient to form a belief as to whether (i) Iran, its agencies or
instrumentalities, and/or separate juridical entities in which Iran has an interest, direct or indirect,
have any interest in any electronic fund transfers that were interrupted and blocked by Bank of
Baroda NY; (ii) Petitioners have any rights to the electronic fund transfers. Bank of Baroda NY
further avers that Paragraph 23 of the Petition asserts legal conclusions to which no responsive
pleading is required.
24. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 24 of the Petition, and further avers that Paragraph 24 contains
legal conclusions to which no responsive pleading is required.
25. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 25 of the Petition, and further avers that Paragraph 25 of the
Petition contains legal conclusions to which no responsive pleading is required, and further avers
that Bank of Baroda NY does not have the knowledge or information sufficient to form a belief
as to whether (i) Iran, its agencies or instrumentalities, and/or separate juridical entities in which
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 7 of 12
Iran has an interest, direct or indirect, have any interest in the electronic fund transfers that were
interrupted and blocked by Bank of Baroda NY, or (ii) Petitioners have any rights to those
blocked funds. Bank of Baroda NY further avers that Paragraph 25 of the Petition asserts legal
conclusions to which no responsive pleading is required.
CLAIM FOR RELIEF
Turnover
26. In response to Paragraph 26 of the Petition, Bank of Baroda NY repeats and
realleges the allegations contained in Paragraphs 1 through 25 as if fully set forth hereat.
27. Paragraph 27 of the Petition contains legal conclusions to which no responsive
pleading is required, and Bank of Baroda NY further avers that Bank of Baroda NY does not
have the knowledge or information sufficient to form a belief as to whether (i) Petitioners are
entitled to enforce a Judgment against any of the electronic fund transfers that were blocked by
Bank of Baroda NY, or (ii) Iran, its agencies or instrumentalities, and/or separate juridical
entities in which Iran has an interest, direct or indirect, have any interest in those funds.
28. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 28 of the Petition, and further avers that Bank of Baroda NY
does not have the knowledge or information sufficient to form a belief as to whether Iran, its
agencies or instrumentalities, and/or separate juridical entities in which Iran has an interest,
direct or indirect, have any interest in the electronic fund transfers that were blocked by Bank of
Baroda NY.
29. Denies knowledge or information sufficient to form a belief as to the truth of the
allegations set forth in Paragraph 29 of the Petition.
30. Denies knowledge or information sufficient to form a belief as to the truth of the
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 8 of 12
allegations set forth in Paragraph 30 of the Petition.
31. Denies the allegations set forth in Paragraph 31 of the Petition.
32. Denies the allegations set forth in Paragraph 32 of the Petition.
33. Admits the allegations set forth in Paragraph 33 of the Petition.
34. Paragraph 34 of the Petition contains legal conclusions and a prayer for relief to
which no responsive pleading is required, and further avers that Bank of Baroda NY does not
have the knowledge or information sufficient to form a belief as to whether (i) Petitioners have
any interest in any of the electronic fund transfers interrupted and blocked by Bank of Baroda
NY, or (ii) Iran, its agencies or instrumentalities, and/or separate juridical entities in which Iran
has an interest, direct or indirect, have any interest in those funds.
AFFIRMATIVE DEFENSES/OBJECTIONS IN POINT OF LAW
Bank of Baroda NY, without assuming the burden of proof for those matters upon which
Petitioners bear such burden, for its affirmative defenses and objections in point of law, allege as
follows:
FIRST
35. Persons other than Iran or its agencies and instrumentalities may have ownership
or other interests in part or all of the funds at Bank of Baroda NY that are the subject of this
turnover proceeding (the "Funds") which may be superior to the rights of Petitioners.
SECOND
36. The Funds consist of the proceeds of the electronic fund transfers that were routed
through Bank of Baroda NY as an intermediary bank but could not be completed because of
applicable regulations promulgated and/or administered by OF AC, and so are being held in one
or more blocked accounts at Bank of Baroda. Persons other than Iran or its agencies and
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 9 of 12
instrumentalities, who or which were the originators, beneficiaries or bank participants in such
wire transfers may have ownership or other interests in part or all of such Funds which may be
superior to the rights of Petitioners, if any, to have execution against such Funds to satisfy the
Judgment.
THIRD
3 7. The electronic fund transfers that are at issue herein were originated from persons
or entities other than Iran or its agencies or instrumentalities, and, when blocked by Bank of
Baroda NY, were being transmitted to persons or entities who are also not Iran or its agencies or
instrumentalities. Such persons or entities may be indispensable parties hereto and may have the
right to receive notice of these proceedings and an opportunity to be heard before this Court
enters a judgment in this proceeding that would terminate or otherwise affect their rights in the
Funds.
FOURTH
38. The electronic fund transfers that are at issue herein were originated from persons
or entities other than Iran or its agencies or instrumentalities, and, when blocked by Bank of
Baroda NY, were being transmitted to persons or entities who are also not Iran or its agencies or
instrumentalities, and thus the funds at issue may not be "blocked assets of a terrorist party"
under Section 201 of the Terrorism Risk Insurance of Act of 2002 ("TRIA") or considered
property in which Iran has an "interest" and under the OF AC Regulations.
FIFTH
39. To the extent that Petitioners claim that some part or all of the Funds belong to
persons that are agencies or instrumentalities of Iran, or that such persons have an interest in
some part or all of the Funds, such persons are indispensable parties hereto and have the right to
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 10 of 12
receive notice of these proceedings and an opportunity to be heard before this Court determines
whether they are in fact agencies or instrumentalities of Iran or whether such assets are subject to
execution to satisfy the Judgment.
SIXTH
40. To the extent that other persons who hold judgments against Iran based on its
involvement with acts of terrorism have served restraining notices, notices of pendency, writs of
execution or other process or documents on Bank of Baroda NY with respect to assets that may
belong to Iran or any of its agencies or instrumentalities, such persons are indispensable parties
hereto and have the right to receive notice of these proceedings and an opportunity to be hard so
that this Court may determine which judgment creditors should take precedence with respect to
any assets that may belong to Iran or its agencies or instrumentalities.
SEVENTH
41. To the extent that Petitioners are seeking to satisfy the Judgment from blocked
assets subject to TRIA §201, the Court should consider whether Petitioners have established all
of the elements necessary to obtain relief under that statute, including whether Iran is a "terrorist
party," as that term is defined in TRIA; whether the Judgments arise from claims based on an
"act of terrorism," as that term is defined in TRIA, or for which a terrorist party is not immune
under Foreign Sovereign Immunities Act; whether and to what extent the Funds belong to Iran or
entities that are "agencies or instrumentalities" of Iran, as those terms are used in TRIA; whether
the fact that neither the originators nor the beneficiaries of the electronic fund transfers at issue
are Iran or its agencies or instrumentalities bars the execution of the Funds by Petitioners; and
whether and to what extent the Judgment is for compensatory damages, as opposed to other
forms of relief.
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 11 of 12
EIGHTH
42. The Court should determine whether the Judgments were entered on default and if
so, whether copies were served on Iran in the manner required by FSIA §1608(a) in order to
comply with FSIA § 1608( e ).
NINTH
43. The Court should determine whether, in order to comply with the requirements of
CPLR §§5225(b) and Rule 69 of the Federal Rules of Civil Procedure, a copy of the Petition and
the accompanying exhibits must be served on Iran in the manner required by FSIA §1608(a).
TENTH
44. The Court should determine whether TRIA §201 and FSIA §1610(c) require that
the Judgment must be enforced by a writ of execution that specifically identifies the property that
plaintiffs seek to levy against, whether such a writ of execution must be specifically authorized
by the Court that allegedly entered the Judgment, i.e., the United States District Court for the
District of Columbia and, if so, whether such a writ has been so authorized and delivered to the
appropriate official.
ELEVENTH
45. The Court should determine whether the Petition states a cause of action or sets
forth a claim for which relief may be granted.
TWELFTH
46. The Funds at issue are electronic fund transfers that were blocked by Bank of
Baroda NY as an intermediary bank, and are therefore not subject to attachment.
THIRTEENTH
47. Nothing in this Answer shall constitute a waiver of any rights of set-off that Bank
Annex 339
Case 1:11-cv-01602-LGS-MHD Document 10 Filed 04/08/11 Page 12 of 12
of Baroda NY may have against any party, person or entity.
WHEREFORE, Respondent Bank of Baroda NY requests the entry of judgment in this
proceeding:
(a) Dismissing the Petition against Bank of Baroda NY;
(b) Awarding to Bank of Baroda NY its costs and expenses in this proceeding,
including reasonable attorneys' fees and expenses; and
( c) Such other and further relief as may be just and proper.
Dated: April 8, 2011
New York, New York
By:
WORMSER, KIELY, GALEF & JACOBS LLP
Attorneys for Respondent
Bank of Baroda, New York Branch
ISi
Jennifer L. Marlborough (JM4303)
John T. Morin (JM0390)
825 Third A venue, 26th Floor
New York, New York 10022
(212) 687-4900
Annex 339
ANNEX340

Case 1:00-cv-02329-RCL Document 165 Filed 06/21/10 Page 1 of 5
'
ORIGINAL
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ESTA TE OF MILT ARD D. CAMPBELL, et al., )
)
Plaintiffs, )
)
V. )
)
ISLAMIC REPUBLIC OR IRAN, et al. ) Civil Action No. 00-CV-02104 (RCL)
)
Defendants. )
)
EST ATE OF MICHAEL HEISER, et al., )
)
Plaintiffs, )
)
V. )
)
ISLAMIC REPUBLIC OF IRAN, et al., ) Civil Action No. 00-CV-02329
)
Defendants. )
ANSWER AND DEFENSES OF GARNISHEE SPRINT
COMMUNICATIONS COMPANY LP
Garnishee, Sprint Communications Company LP ("Sprint"), 1 by and through undersigned
counsel. hereby submits its Answer to Plaintiffs' Interrogatories in Writ of Attachment and states
as follows:
1. Plaintiffs ' Interrogatories in Writ of Attachment were served on or around May
2L 2010. Sprint previously spoke with plaintiffs ' counsel on or around May 25, 2010 and
agreed that Sprint would have more than l 0 days to file this Answer.
RE C E I V E D Answers to Interrogatories
JUN 2 1 2010
Clerk, U.S. District and
Bankruptcy Courts
1 Plaintiffs served the Writ of Attachment on Sprint Nextel Corporation. Sprint Communications Company LP is
the Sprint Nextel affiliate which is responsible for long distance traffic, and it appears voluntarily in defense of the
Writ. Sprint Nextel Corporation does not conduct long distance traffic with Iran.
Annex 340
Case 1:00-cv-02329-RCL Document 165 Filed 06/21/10 Page 2 of 5
1 After a reasonable search, Sprint states it is not indebted to the Islamic Republic
of ]ran, lranian Ministry of Information and Security, the Iranian Islamic Revolutionary Guard
Corps, or Telecommunications Company of Iran, and has not been so indebted at any time
between service of the writ and the filing of this answer.
3. Sprint does not possess or control any tangible or intangible personal property of
the Islamic Republic of Iran, Iranian Ministry of Information and Security, the Iranian Islamic
Revolutionary Guard Corps, or Telecommunications Company oflran (including goods, chattels,
or credits), and has not possessed or controlled such property during the time between service of
the Writ and the filing of this answer.
4. Consistent with the authority granted by the United States Department of
Treasury, Office of Foreign Assets Control , 31 C.F.R. § 560.508, Sprint does exchange
telecommunications traffic directly with the Telecommunication Infrastructure Company
("TIC"') oflran, which was not a defendant in the underlying action and was not identified in the
plaintiffs' Writ as an "agency" or " instrumentality'' of one or more of defendants.
5. The Sprint/TIC relationship is a bilateral telecommunications carrier relationship
that results in a periodic settlement and offset process to determine the net payer and payee. So
far as is known, during 2010, Sprint has been a net payer, which will result in quarterly payments
to TIC. Because telecommunications services are commoditized, the amounts of payments are
directly related to the volume of calls Sprint sends to TIC in a given month for termination in
Iran. At present, Sprint owes to TIC the sum of $358,708.76 based on amounts which have been
declared by the parties for the months of January, February and March, 2010. Sprint may owe
TIC amounts for traffic conducted in April and May, 2010, but those amounts have not yet been
determined or invoiced and thus no debt is currently due.
6. Sprint is not aware of the identities of the "agencies or instrumentalities," as that
term is defined by applicable law, of the Islamic Republic of Iran, Iranian Ministry of
Information and Security, or the Iranian Islamic Revolutionary Guard Corps.
Defenses
7. The re lief requested under the Writ may subject Sprint to an unreasonable and
unacceptable risk of double liability in that the default judgment underlying the Writ may not be
given full faith and credit in the home jurisdiction of TIC. Thus, payment by Sprint pursuant to
the Writ may not constitute a defense to its liability to TIC in Iran or in another foreign court.
- 2 -
Annex 340
Case 1:00-cv-02329-RCL Document 165 Filed 06/21/10 Page 3 of 5
8. The relief requested by the Writ is pre-empted by federal law in that Sprint is
authorized to deliver long distance traffic to Iran via TIC pursuant to 31 C.F.R. § 560.508, which
constitutes a general license authorizing what would otherwise be a prohibited transaction. The
grant to Sprint (and to other United States domestic telecommunications carriers) of this general
.license represents a judgment by foreign policy officials of the United States, including among
others the State and Treasury Departments, that telecommunications traffic between the United
States and Iran should be preserved as a matter of explicit United States foreign policy.
Recognition of a garnishment right on behalf of plaintiffs here would directly burden that traffic
and probably result in its disruption or cancellation because TIC would not accept calls from
Sprint terminating in Iran unless it was compensated for doing so. Thus, application of state
garnishment statutes to any payment to TIC pursuant to this general license is pre-empted by
federal law implementing the foreign policy judgments of the Executive Branch.
9. On information and belief, TIC was not an agency or instrumentality of the
Iranian government or any of the Iranian government defendants at the time of service of the
Writ, while the debt which is sought to be garnished was incurred, or at the time the underlying
suit was commenced, and thus is not subject to levy for the debts of the defendants under the
Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1603(6), 1605(a)(7), 1610(b). Dole Food Co.
v. Patrickson, 538 U.S. 468, 123 S.Ct. 655 (2003); First Nat'l City Bk. v. Banco Para El
Comercio Exterior de Cuba, 426 U.S. 611 (1983).
I 0. The Terrorism Risk Insurance Act of 2002 ("TRlA") permits the attachment of
assets belonging to terrorist states in order to satisfy judgments against those states only if the
assets in question are "blocked assets.'' TRJA § 20l(a), codified at 28 U.S.C. § 1610 note;
Minist,y of Defense & Support for the Armed Forces of the l\1amic Republic ()f Iran v. Elahi,
129 S.Ct. l 732, 1738 (2009). Sprint is not in possession of any "blocked asset" of defendants or
of TIC, and could not be because its long distance traffic to Iran is conducted pursuant to a
general license given by the Office of Foreign Assets Control of the Department of the Treasury.
31 C.F.R. § 560.508. By statute, " blocked assets" do not include payments made pursuant to a
license issued by the United States government. TRIA § 201(d)(2)(B)(i), codified at 28 U.S.C. §
I 6 IO note. In addition. Iranian assets in the United States are not generally "blocked" pursuant
to treaty, various executive orders and regulation. See Iranian Assets Control Regulations, 31
C.F.R. Pai1 535; Elahi, 129 S.Ct. 1732.
- ,, .) - Annex 340
Case 1:00-cv-02329-RCL Document 165 Filed 06/21/10 Page 4 of 5
11. Sprint gives notice that it will seek to recover any and all attorneys' fees and costs
which are authorized by law, and hereby demands delivery of any garnislunent deposit which
may have been made for its protection.
12. For the reasons stated in the above defenses, Sprint demands that the Writ of
Attachment be dissolved, that Sprint be dismissed from this action with prejudice, and that this
Court award Sprint its reasonable attorneys' foes and costs.
As To Interrogatory Answers:
13. The undersigned Kirk Salzmann declares under penalty of pe1jury that he is
Counsel - Litigation for Sprint and that the foregoing Answers to Interrogatories in Attachment
arc, to the best of his knowledge and belief, true and correct as to~ every m-Aater"ial n. a- ,"er.. .. DATED: June / b , 2010 ~vc.._
As to Defenses:
- 4 -
Kirk Salzmann \__.
%1~ Neil K. Gilman
(D.C. Bar# 449226)
HUNTON & WILLIAMS LLP
1900 K Street, N.W
Washington, DC 20006
Telephone: (202) 955-1500
Email: [email protected]
Jonathan C. Koch, Esq.
. -
(Florida Bar# 364525)
Bush Ross, P.A.
1801 North Highland Avenue
Tampa, Florida 33602
Telephone: (813)224-9255
j koch@b~1 shross.com
Counsel for Sprint Communications
Company, LP and Sprint Nextel
Corporation
Annex 340
Case 1:00-cv-02329-RCL Document 165 Filed 06/21/10 Page 5 of 5
CERTIFICATE OF SERVICE
l hereby ce11ify that on the I 8th day of June, 20 IO the foregoing Answers and Defenses of
Garnishee Sprint Communications Company LP was filed with the Court by overnight mail and
served upon the following counsel of record by first-class mail, postgage prepaid:
Mark C. Del Bianco
3929 Washington St.
Kensington, MD 20895
Richard M. Kremen
Melissa L. Mackiewiz
DLA Piper US, LLP
6225 Smith Ave.
Baltimore, MD 2 1209-3600
Shale D. Stiller
Elizabeth R. Dewey
DLA Piper Rudnick Gray Cary US LLP
1200 19th Street, NW
Washington, DC 20036-2412
Service on the Defendants has not been made because, to undersigned counsel's knowledge,
Defendants have no counsel of record and have not entered an appearance, and service directly
upon Defendants is impractical and/or unduly burdensome for non-party Sprint Communications
Company, LP.
Neil K. Gilman
- 5 - Annex 340
Annex 340
ANNEX341

Sharon L. Schneier (SLS 1151)
Christopher J. Robinson (CR 9165)
DA VIS WRIGHT TREMAINE LLP
1633 Broadway
New York, New York 10019
Tel: (212) 489-8230
Fax: (212) 489-8340
[email protected]
[email protected]
Attorneys for Defendant Citibank, NA.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT NEW YORK
JEREMY LEVIN and LUCILLE LEVIN,
Plaintiffs,
- against -
BANK OF NEW YORK, JP MORGAN
CHASE, SOCIETE GENERALE, AND
CITIBANK,
Defendants.
X
Case No. 09 Civ. 5900 (RPP)
ANSWER WITH
AFFIRMATIVE DEFENSES
Defendant Citibank, N.A., named herein as "Citibank" ("Citi"), by its undersigned
attorneys, Davis Wright Tremaine LLP, as Defendant submits this Answer with Affirmative
Defenses to the Complaint of Mr. Jeremy Levin and Dr. Lucille Levin "Levin," Plaintiffs, and
states as follows:
NATURE OF PROCEEDING AND RELIEF REQUESTED
1. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 1, except admits based on publicly available documents that
the plaintiffs obtained a judgment in the amount of $28,807,719 against the Islamic Republic of
Iran that was entered by the U.S. District Court for the District of Columbia on February 6, 2008
DWT 13499304vl 0067486--000015
Annex 341
Case 1:09-cv-0590 PO-RWL Document 44 Filed 01/ 6/10 Page 2 of 15
and thereafter registered with this Court and refers to documents cited in Paragraph I for a true
and complete recitation of the contents thereof.
2. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 2, except refers to the authorities stated therein for a true and
complete recitation of the contents thereof.
3. To the extent that certain text in Paragraph 3 has been redacted in the copy of the
Complaint served on Citi, it denies knowledge and information sufficient to form a belief as to
the truth of those allegations and those allegations contained in Paragraph 3 to the extent they
refer to the Defendants to this action other than Citi ("Other Defendants"), and further states that
the allegations contained in Paragraph 3 constitute legal conclusions as to which no response is
required, except denies knowledge and information sufficient to form a belief as to the truth of
the allegation that "Iran has an interest in [the blocked assets reported to OF AC] directly or
indirectly" and refers to the letter from Sean Thornton dated October 6, 2008 for a true and
complete recitation of the contents thereof.
4. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 4, except refers to the protective order entered on September
30, 2008 by the District Court of the District of Columbia in Levin v. Islamic Republic of Iran,
No. 05-cv-0294 (GK) (D.D.C.) for a true and complete recitation of the contents thereof.
5. To the extent that certain text in Paragraph 5 has been redacted in the copy of the
Complaint served on Citi, it denies knowledge and information sufficient to form a belief as to
the truth of those allegations and those allegations contained in Paragraph 5 to the extent they
refer to the Defendants to this action other than Citi ("Other Defendants"), and further states that
the allegations in Paragraph 5 constitute a legal conclusion as to which no response is required,
except admits that the Complaint purports to seek enforcement of the February 6, 2008 judgment
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and refers to Attachment D of the Complaint for a true and complete recitation of the contents
thereof.
6. States that the allegations contained in Paragraph 6 constitute legal conclusions as
to which no response is required, and refers to the cited New York Civil Practice Law and Rules
for a true and complete recitation of the contents thereof.
7. States that the allegations contained in Paragraph 7 constitute legal conclusions as
to which no response is required, and refers to the cited provision of the Terrorism Risk
Insurance Act for a true and complete recitation of the contents thereof.
8. States that the allegations contained in Paragraph 8 constitute legal conclusions as
to which no response is required, and refers to the cited provision of the Foreign Sovereign
Immunities Act for a true and complete recitation of the contents thereof.
9. States that the allegations contained in Paragraph 9 constitute legal conclusions as
to which no response is required, and refers to 28 U.S.C. § 1610 and the letter from Sean
Thornton dated October 6, 2008 for a true and complete recitation of the contents thereof.
10. States that the allegations contained in Paragraph 10 constitute legal conclusions
as to which no response is required, and refers to the cited provisions and decisions for a true and
complete recitation of the contents thereof.
11. States that the allegations contained in Paragraph 11 constitute legal conclusions
as to which no response is required, and refers to the provisions and decisions cited in Paragraph
11 for a true and complete recitation of the contents thereof.
JURISDICTION AND VENUE
12. Admits that Plaintiffs purport to invoke the jurisdiction of this Court pursuant to
28 U.S.C. §§ 1331(2009); § 201 of the Terrorism Risk Insurance Act; 28 U.S.C.
§§ l 605(a)(7)(2007), 1605A (2009); and the Court's ancillary jurisdiction as alleged in
3
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Paragraph 12; but states that the allegations constitute legal conclusions as to which no response
is required.
13. Admits that Plaintiffs purport to invoke the jurisdiction of this Court pursuant to
Fed. R. Civ. P. 4(k) as alleged in Paragraph 13, but states that the allegations constitute legal
conclusions as to which no response is required.
14. Admits that Plaintiffs allege that venue is proper in the District pursuant to 28
U.S.C. §§ 1391(b) and (d) (2009) as alleged in Paragraph 14, but states that the allegations
constitute legal conclusions as to which no response is required.
THE PARTIES
15. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 15 and refers to Levin v. Islamic Republic of Iran, 529 F.
Supp. 2d 1 (D.D.C. 2007) for a true and complete recitation of the contents thereof.
16. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 16, and refers to the document attached to the Complaint as
Exhibit A for a true and complete recitation of the contents thereof.
17. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 17, and notes that certain text in Paragraph 1 7 has been
redacted in the copy of the Complaint served on Citi.
18. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 18, and notes that certain text in Paragraph 18 has been
redacted in the copy of the Complaint served on Citi.
19. Denies the allegations contained in the first sentence of Paragraph 19, except
states that Citi is a national bank incorporated under the laws of the United States doing business
in New York with offices at 399 Park Avenue, New York, New York, and admits that (a) Citi
4
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has reported certain blocked assets to OF AC pursuant to certain Executive Orders and refers to
the document attached as Exhibit D to the Complaint for the terms and contents thereof, and (b)
the Complaint purports to name Citi as a garnishee in this action pursuant to C.P.L.R. § 5225(b).
20. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 20, and notes that certain text in Paragraph 20 has been
redacted in the copy of the Complaint served on Citi.
21. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 21 which is entirely redacted in the copy of the Complaint
served on Citi.
22. States that the allegations contained in Paragraph 22 constitute legal conclusions
as to which no response is required, and refers to the opinions cited in Paragraph 22 for a true
and complete recitation of the contents thereof.
STATEMENT OF FACTS
PLAINTIFFS' JUDGMENT
23. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 23, except refers to the opinion cited in Paragraph 23 for a
true and complete recitation of the contents thereof.
24. States that the allegations contained in Paragraph 24 constitute legal conclusions
as to which no response is required, and refers to the Export Administration Act of 1979 and
section 201(d)(4) of the TRIA for a true and complete recitation of the contents thereof.
25. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 25, except refers to Levin v. Islamic Republic of Iran, 529
F.Supp.2d I (D. D.C. 2007) for a true and complete recitation of the contents thereof.
5
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26. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 26, except admits that on February 6, 2008 the District Court
for the District of Columbia entered a judgment in favor of Plaintiffs in the amount of
$28,807,719 and refers to Levin v. Islamic Republic of Iran, 529 F.Supp.2d I (D. D.C. 2007) for
a true and complete recitation of the contents thereof.
27. States that the allegations contained in Paragraph 27 constitute legal conclusions
as to which no response is required, but admits that a judgment under case number 09-0732 has
been registered with this Court.
PLAINTIFFS' WRIT OF EXECUTION
28. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 28.
29. States that the allegations contained in Paragraph 29 constitute legal conclusions
as to which no response is required, and refers to the authority cited therein for a true and
complete recitation of the contents thereof.
IRAN HAS AN INTEREST IN BLOCKED ASSETS HELD BY DEFENDANT BANKS
30. States that the allegations contained in Paragraph 30 constitute legal conclusions
as to which no response is required, and refers to Section 201 of the Terrorism Risk Insurance
Act for a true and complete recitation of the contents thereof.
31. States that the allegations contained in Paragraph 31 constitute legal conclusions
as to which no response is required.
32. States that the allegations contained in Paragraph 32 constitute legal conclusions
as to which no response is required, and refers to Section 201 of the Terrorism Risk Insurance
Act for a true and complete recitation of the contents thereof.
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33. States that the allegations contained in Paragraph 33 constitute legal conclusions
as to which no response is required, and refers to the Executive Orders cited in Paragraph 33 for
a true and complete recitation of the contents thereof.
34. States that the allegations contained in Paragraph 34 constitute legal conclusions
as to which no response is required, and refers to the Executive Order cited in Paragraph 34 for a
true and complete recitation of the contents thereof.
35. States that the allegations contained in Paragraph 35 constitute legal conclusions
as to which no response is required, and refers to the Executive Order cited in Paragraph 35 for a
true and complete recitation of the contents thereof.
36. States that the allegations contained in Paragraph 36 constitute legal conclusions
as to which no response is required.
37. States that the allegations contained in Paragraph 37 constitute legal conclusions
as to which no response is required, and refers to the OFAC Regulations cited in Paragraph 37
for a true and complete recitation of the contents thereof.
38. States that the allegations contained in Paragraph 38 constitute legal conclusions
as to which no response is required, and refers to the Regulations cited in Paragraph 38 for a true
and complete recitation of the contents thereof.
39. States that the allegations contained in Paragraph 39 constitute legal conclusions
as to which no response is required, and refers to the Regulations cited in Paragraph 39 for a true
and complete recitation of the contents thereof.
40. States that the allegations contained in Paragraph 40 constitute legal conclusions
as to which no response is required, and refers to the Regulations cited in Paragraph 40 for a true
and complete recitation of the contents thereof.
7
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41. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in the first sentence of Paragraph 41, except refers to the Executive Order
cited in paragraph 41 for a true and complete recitation of the contents thereof, and otherwise
denies each and every allegation in the second sentence of Paragraph 41.
42. Denies each and every allegation in Paragraph 42, except denies knowledge and
information sufficient to form a belief as to the truth of the allegations thereof to the extent those
allegations refer to the Other Defendants, and further admits that Citi has reported to OF AC
assets blocked pursuant to certain Executive Orders and refers to the letter from Sean Thornton
dated October 6, 2008 for a true and complete recitation of the contents thereof.
43. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 43, except refers to the letter from Sean Thornton dated
October 6, 2008 for a true and complete recitation of the contents thereof.
44. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 44, except refers to the documents cited in Paragraph 44 for a
true and complete recitation of the contents thereof.
45. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 45, except refers to 28 U.S.C. § 1610(g) for a true and
complete recitation of the contents thereof.
46. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 46 to the extent the allegations contained therein refer to the Other
Defendants. To the extent the allegations contained in Paragraph 46 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
47. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 4 7 to the extent the allegations contained therein refer to the Other
8
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Case 1:09-cv-0590 PO-RWL Document 44 Filed 01/ 6/10 Page 9 of 15
Defendants. To the extent the allegations contained in Paragraph 47 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
PLAINTIFFS HA VE A SUPERIOR INTEREST IN THE BLOCKED ASSETS HELD BY
DEFENDANT BANKS
48. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 48 to the extent the allegations contained therein refer to the Other
Defendants. To the extent the allegations contained in Paragraph 48 refer to Citi, denies
knowledge and information sufficient to form a belief as to the truth of the allegations contained
in Paragraph 48, except refers to the documents and authorities cited therein for a true and
complete recitation of the contents thereof.
49. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 49 to the extent the allegations contained therein refer to the Other
Defendants. To the extent the allegations contained in Paragraph 49 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
50. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 50 to the extent the allegations contained therein refer to the Other
Defendants. To the extent the allegations contained in Paragraph 50 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
51. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 51 to the extent the allegations contained therein refer to the Other
Defendants. To the extent the allegations contained in Paragraph 51 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
52. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations in Paragraph 52 to the extent the allegations contained therein refer to the Other
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.Case 1:09-cv-0590 O-RWL Document 44 Filed 01/ /10 Page 10 of 15
Defendants. To the extent the allegations contained in Paragraph 52 refer to Citi, states that the
allegations thereof constitute legal conclusions as to which no response is required.
herein.
CLAIM FOR RELIEF AGAINST DEFENDANTS CITIBANK
PURSUANT TO C.P.L.R. § 5225
53. Citi incorporates its responses to paragraphs 1 through 52 as though fully set forth
54. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 54.
55. States that the allegations contained in Paragraph 55 constitute legal conclusions
as to which no response is required.
56. Denies knowledge and information sufficient to form a belief as to the truth of the
allegations contained in Paragraph 56, except refers to the documents and authorities cited in
Paragraph 56 for a true and complete recitation of the contents thereof.
57. States that the allegations contained in Paragraph 57 constitute legal conclusions
as to which no response is required.
AFFIRMATIVE DEFENSES
Without assuming the burden of proof or the burden of persuasion on any matters where
the burden rests on Plaintiffs, Citi asserts the following affirmative and other defenses with
respect to the Complaint.
58. Citi incorporates its responses to paragraphs 1 through 57 as though fully set forth
herein.
FOR ITS FIRST AFFIRMATIVE DEFENSE
59. Persons other than the Islamic Republic of Iran or its agencies or instrumentalities
may have ownership or other interests in part or all of the assets blocked by Citi that are the
IO
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Case 1:09-cv-0590 O-RWL Document 44 Filed 01/2 /10 Page 11 of 15
subject of this action ("Assets") which may be superior to the rights of Plaintiffs to enforce their
judgment ("Judgment") against the Assets.
FOR ITS SECOND AFFIRMATIVE DEFENSE
60. The Assets sought by Plaintiffs in this action include wire transfers that were
routed through Citi as an intermediary bank but that could not be completed because they were
blocked pursuant to an Executive Order or regulations administered by OF AC. Citi simply
blocks any property or accounts that it is directed to block by such Executive Orders or
regulations. Because under New York law, wire funds in the temporary possession of Citi as an
intermediary bank are not the property of the originator, the ordering bank or the beneficiary,
they are not subject to attachment and turn over. See The Shipping Corp. of India Ltd. v. Jaldi
Overseas Pte Ltd., 2009 U.S. App. LEXIS 22747, * 33-37 (2d Cir. 2009).
FOR ITS THIRD AFFIRMATIVE DEFENSE
61. The Assets sought by Plaintiffs in this action may be subject to competing claims
by other holders of final judgments against the Islamic Republic of Iran or its agencies and
instrumentalities, including but not limited to plaintiffs in Peterson v. Islamic Republic of Iran,
Case No. 01-2094, 01-2684 (D.D.C.); Greenbaum v. Islamic Republic of Iran, Case No. 02-2148
(D.D.C.); Acosta v. Islamic Republic of Iran, Case No. 06-745 (D.D.C.); and Rubin v. Islamic
Republic of/ran, Case No.01-1655 (D.D.C.). One or more of these judgment holders have
already served writs of execution and/or restraining orders on Citi prior to this action.
FOR ITS FOURTH AFFIRMATIVE DEFENSE
62. To the extent Plaintiffs seek Assets in this action that are located outside the
United States, such Assets are immune from attachment and execution in New York under the
Foreign Sovereign Immunities Act, 28 U.S.C. § 1610(a) which authorizes execution against
property of a foreign state under certain circumstances which is located "in the United States."
11
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, Case 1:09-cv-0590 O-RWL Document 44 Filed 01/ /10 Page 12 of 15
See Aurelius Capital Partners, LP v. The Republic of Argentina, 2009 U.S. App. LEXIS 22746,
* 21-23 (2d Cir. 2009) ("section 161 0(a) ... authorizes execution against property of a foreign
state located in the United States").
FOR ITS FIFTH AFFIRMATIVE DEFENSE
63. Plaintiffs have not served or named as parties to these proceedings, or otherwise
provided an opportunity to be heard, all interested or necessary parties, including other persons
who have or may have claims in the Assets, including all parties to the transactions, wire
transfers and accounts that Plaintiffs contend, or may contend, are properly subject to attachment
and turnover in these proceedings; all beneficial owners of the Assets who may or may not be
parties to such transactions, wire transfers and accounts; upon information and belief, the United
States of America, which has prohibited transfer of any blocked Assets pursuant to the Weapons
of Mass Destruction Proliferators Sanctions Regulations and the Global Terrorism Sanctions
Regulations; and all holders of judgments against the same judgment debtor whose claims
against the Assets may have priority over those of Plaintiffs. Accordingly, all such interested
parties have a right of notice of these proceedings and an opportunity to be heard before this
Court enters a judgment that would terminate or otherwise affect their rights in the Assets.
FOR ITS SIXTH AFFIRMATIVE DEFENSE
64. To the extent that Plaintiffs seek to enforce their rights under TRIA § 201,
plaintiffs must establish al 1 of the elements necessary to obtain relief under that statute, including
but not limited to whether the Complaint was served upon the judgment debtor in a manner
provided by applicable law.
FOR ITS SEVENTH AFFIRMATIVE DEFENSE
65. To the extent that Plaintiffs seek to enforce their rights under section 1605(a) of
FS IA, plaintiffs must establish all of the elements necessary to obtain relief under that statute,
12
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including but not limited to whether the Complaint was served upon the judgment debtor in a
manner provided by applicable law.
FOR ITS EIGHTH AFFIRMATIVE DEFENSE
66. No proof of service on the judgment debtor, as required by CPLR §§ 5225 and
5227, has been filed with the Court.
FOR ITS NINTH AFFIRMATIVE DEFENSE
67. Pursuant to the Weapons of Mass Destruction Proliferators Sanctions Regulations
(31 C.F.R. §§ 544. lOlet seq.) and the Global Terrorism Sanctions Regulations (31 C.F.R. §§
594.101 et seq.) (collectively the "Regulations"), and designations issued by OFAC thereunder,
and the various Executive orders underlying those regulations, Citibank, N.A. is and has been
prohibited from transferring any property and assets held in which any person designated under
the Regulations has an interest, except pursuant to a license issued by OF AC. Citi therefore
seeks a determination from the Court that Plaintiffs can satisfy their judgment against the Islamic
Republic of Iran by attaching and obtaining a turnover of assets and/or accounts in which Iran
has an interest, directly or indirectly.
WHEREFORE, Defendant Citibank N.A ("Citi") respectfully requests that the Court
enter judgment determining whether an order of execution or turnover should be issued in
respect of the blocked Islamic Republic of Iran property held by Citi and, if the Court does order
execution or turnover, determine in its order:
(a) that all appropriate and/or necessary parties were given appropriate notice of the
proceedings and the manner of such notice;
(b) the precise account and amount of property, if any, to be turned over pursuant to
any execution or other turnover order, and to whom the turnover is granted;
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( c) the appropriate apportionment amongst the various Defendant banks of funds
and/or accounts to be turned over to satisfy the Judgment;
(d) whether, as to each property or account in respect of which execution or turnover
is ordered, (i) the account holder is regarded as an "agency or instrumentality" of a terrorist party
on a claim based on an act of terrorism within the meaning of TRIA; or (ii) the judgment is based
on a claim in respect of an act for which a terrorist party is not immune under 28 U.S.C.
§ 1605(a)(7).
(e) whether, to the extent that Citi is ordered to turn over any amount representing a
deposit debt owed to the Islamic Republic of Iran, Citi is discharged from any and all obligations
or liabilities to the Islamic Republic of Iran, as a judgment debtor within the meaning of CPLR §
5209, or to any other person to the full extent of the payment; and
(f) whether Citibank, N.A. is entitled to other and further relief, including an award
of attorneys' fees and the costs of this proceeding.
Dated: New York, New York
October 23, 2009
DWT l3499304vl 0067486-000015
14
DA VIS WRIGHT TREMAINE LLP
/fui,/U,,f-Sc~ By: ~U
Sharon L. Schneier
Christopher J. Robinson
1633 Broadway
New York, New York 10019
(212) 489-8230
Attorneys for Defendant Citibank, NA.
Annex 341
.Case 1:09-cv-0590 O-RWL Document 44 Filed 01/ /10 Page 15 of 15
CERTIFICATE OF SERVICE
I, Christopher J. Robinson, hereby certify that on the 23rd day of October, 2009, I caused
to be served by email and mail, a true and correct copy of the accompanying Defendant Citibank
N.A.'s Response to the Complaint, dated June 22, 2009 upon the following:
Kathryn Lee Crawford
Suzelle Smith, Esq.
HOWARTH & SMITH
523 West Sixth Street, Suite 728
Los Angeles, CA 90014
Attorneys for Plaintiffs Mr. Jeremy Levin
and Dr. Lucille Levin
Howard B. Levi, Esq.
J. Kelly Nevling, Esq.
LEVI LUBARSKY & FEIGENBAUM LLP
1185 Avenue of the Americas
t ih Floor
New York, NY 10036
Attorneys for Defendants The Bank of New York Mellon
and JPMorgan Chase Bank, NA.
Mark G. Hanchet, Esq.
Christopher J. Houpt, Esq.
MA YER BROWN LLP
1675 Broadway
New York, NY 10019
Attorneys for Defendant Societe Generale SA
Christopher J. Robinson
15
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Annex 341

ANNEX342

Case 1:09-cv-05900-JPO-RWL Document 45 Filed 01/27/10 Page 1 of 9
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JEREMY LEVIN and DR. LUCILLE LEVIN,
Plaintiffs,
V.
BANK OF NEW YORK, JPMORGAN
CHASE, SOCIETE GENERALE SA, and
CITIBANK,
Defendants.
Civil Action No. 09-cv-5900 (RPP)
ECF Case
UNDERSEAL
ANSWER
Defendant Societe Generale ("SO") hereby answers the Complaint of Plaintiffs Jeremy
Levin and Dr. Lucille Levin as follows:
1. SO denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 1 of the Complaint.
2. SO denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in the first sentence of Paragraph 2 of the Complaint. The second
sentence of Paragraph 2 of the Complaint contains legal conclusions to which a responsive
pleading is not required.
3. SO admits the allegations contained in Paragraph 3 of the Complaint as to SG.
SO denies knowledge or information sufficient to form a belief as to the truth of allegations
contained in Paragraph 3 of the Complaint relating to any other Defendant.
4. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 4 of the Complaint. SG further states that Paragraph 4 of
the Complaint states legal conclusions to which a responsive pleading is not required.
Annex 342
Case 1:09-cv-05900-JPO-RWL Document 45 Filed 01/27/10 Page 2 of 9
5. Paragraph 5 of the Complaint states legal conclusions to which a responsive
pleading is not required.
6. SG admits the accuracy of the quotation contained m Paragraph 6 of the
Complaint.
7. Paragraph 7 of the Complaint states legal conclusions to which a responsive
pleading is not required.
8. Paragraph 8 of the Complaint states legal conclusions to which a responsive
pleading is not required.
9. SG denies knowledge ur information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 9 of the Complaint.
10. Paragraph 10 of the Complaint states legal conclusions to which a responsive
pleading is not required.
11. Paragraph 11 of the Complaint states legal conclusions to which a responsive
pleading is not required.
12. Paragraph 12 of the Complaint states legal conclusions to which a responsive
pleading is not required.
13. Paragraph 13 of the Complaint states legal conclusions to which a responsive
pleading is not required.
14. Paragraph 14 of the Complaint states legal conclusions to which a responsive
pleading is not required.
15. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 15 of the Complaint.
2
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Case 1:09-cv-05900-JPO-RWL Document 45 Filed 01/27/10 Page 3 of 9
16. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 16 of the Complaint.
17. SG cannot respond to Paragraph 17 of the Complaint, because it was served upon
SG in redacted form.
18. SG cannot respond to Paragraph 18 of the Complaint, because it was served upon
SG in redacted form.
19. SG cannot respond to Paragraph 19 of the Complaint, because it was served upon
SG in redacted form.
20. SG admits that it has an office at 1221 Avenue of the Americas, New York, New
York. SG denies the remaining allegations contained in the first sentence of Paragraph 20 of the
Complaint and states that Societe Generale is a French banking institution, domiciled and
headquartered in France. SG denies the second sentence of Paragraph 20 of the Complaint. The
third sentence of Paragraph 20 of the Complaint states legal conclusions to which a responsive
pleading is not required.
21. SG admits the allegations contained in the first sentence of Paragraph 21 of the
Complaint. SG denies knowledge or information sufficient to form a belief as to the truth of the
allegations contained in the second sentence of Paragraph 21 of the Complaint. The third
sentence of Paragraph 21 of the Complaint states legal conclusions to which a responsive
pleading is not required.
22. Paragraph 22 of the Complaint states legal conclusions to which a responsive
pleading is not required.
23. SG denies know ledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 23 of the Complaint.
3
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Case 1:09-cv-05900-JPO-RWL Document 45 Filed 01/27/10 Page 4 of 9
24. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 24 of the Complaint.
25. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 25 of the Complaint.
26. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 26 of the Complaint.
27. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 27 of the Complaint.
28. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 28 of the Complaint.
29. Paragraph 29 of the Complaint states legal conclusions to which a responsive
pleading is not required.
30. Paragraph 30 of the Complaint states legal conclusions to which a responsive
pleading is not required.
31. SG denies know ledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 31 of the Complaint.
32. SG admits the accuracy of the quotation contained m Paragraph 32 of the
Complaint.
33. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 33 of the Complaint.
34. Paragraph 34 of the Complaint states legal conclusions to which a responsive
pleading is not required.
4
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Case 1:09-cv-05900-JPO-RWL Document 45 Filed 01/27/10 Page 5 of g
35. Paragraph 35 of the Complaint states legal conclusions to which a responsive
pleading is not required.
36. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 36 of the Complaint.
37. Paragraph 37 of the Complaint states legal conclusions to which a responsive
pleading is not required.
38. Paragraph 38 of the Complaint states legal conclusions to which a responsive
pleading is not required.
39. Paragraph 39 of the Complaint states legal conclusions to which a responsive
pleading is not required.
40. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 40 of the Complaint.
41. SG denies knowledge or information sufficient to fo1m a belief as to the truth of
the allegations contained in Paragraph 41 of the Complaint.
42. SG denies the allegations contained in Paragraph 42 of the Complaint insofar as
they relate to SG. SG denies knowledge or information sufficient to form a belief as to the truth
of the remaining allegations contained in Paragraph 42 of the Complaint.
43. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 43 of the Complaint.
44. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 44 of the Complaint.
45. Paragraph 45 of the Complaint states legal conclusions to which a responsive
pleading is not required.
5
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46. Paragraph 46 of the Complaint states legal conclusions to which a responsive
pleading is not required.
47. Paragraph 47 of the Complaint states legal conclusions to which a responsive
pleading is not required.
48. SG denies knowledge or information sufficient to form a belief as to the truth of
the allegations contained in Paragraph 48 of the Complaint.
49. Paragraph 49 of the Complaint states legal conclusions to which a responsive
pleading is not required.
50. Paragraph 50 of the Complaint states legal conclusions to which a responsive
pleading is not required.
51. Paragraph 51 of the Complaint states legal conclusions to which a responsive
pleading is not required.
52. Paragraph 52 of the Complaint states legal conclusions to which a responsive
pleading is not required.
53. SO repeats and realleges each of the foregoing responses and allegations as if set
forth fully herein.
54. Paragraph 54 of the Complaint states legal conclusions to which a responsive
pleading is not required.
55. Paragraph 55 of the Complaint states legal conclusions to which a responsive
pleading is not required.
56. Paragraph 56 of the Complaint states legal conclusions to which a responsive
pleading is not required.
6
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57. Paragraph 57 of the Complaint states legal conclusions to which a responsive
pleading is not required.
AFFIRMATIVE DEFENSES
Without assuming any burdens not imposed by law, SO asserts the following defense to
the allegations in the Complaint:
FIRST AFFIRMATIVE DEFENSE
58. The Complaint seeks to execute on funds that are not property of the Islamic
Republic of Iran (the "Republic").
SECOND AFFIRMATIVE DEFENSE
59. Persons other than the Republic or its agencies and instrumentalities may have
ownership or other interests in part or all of the funds at SG that are the subject of this turnover
proceeding (the "SO Blocked Accounts") which may he superior to the rights of Plaintiffs
against such funds.
THIRD AFFIRMATIVE DEFENSE
60. Parties other than Plaintiffs who may have an interest in the SO Blocked Funds
may be indispensable parties and/or may have the right to notice of these proceedings and an
opporlunity to be heard before this Court enters a judgment in this proceeding that would
terminate or otherwise affect their rights in the SO Blocked Accounts.
FOURTH AFFIRMATIVE DEFENSE
61. Plaintiffs have not satisfied the requirements of Section 201 of the Terrorism Risk
Insurance Act ("TRIA").
7
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FIFTH AFFIRMATIVE DEFENSE
62. Plaintiffs have not satisfied the requirements of Sections 1608(a) and 1610(c) of
the Foreign Sovereign Immunities Act ("FSIA").
SIXTH AFF'IRMATIVE DEFENSE
63. The Complaint does not state a cause of action for which relief may be granted.
SEVENTH AFFIRMATIVE DEFENSE
64. SG hereby reserves its future rights of setoff against funds on deposit in bank
accounts at SG that belong to the Republic or its agencies and instrumentalities.
EIGHTH AFFIRMATIVE DEFENSE
65. To the extent that the funds belonging to the Republic and its agencies and
instrumentalities that are in accounts at SG and the other Defendants in this proceeding exceed
the amount due to the Plaintiffs, this Court should allocate the amounts to be turned over by each
of the Defendants and determine from which accounts such funds should be debited in such a
way that none of the Defendants is required to turn over to Plaintiffs more than that Defendant's
allocable share.
RESERVATION OF RIGHTS
SO reserves its right to supplement its answer and affirmative defenses with additional
information that becomes available or apparent during the course of investigation, preparation, or
discovery, and to amend its pleading accordingly.
WHEREFORE, having fully answered the Complaint and asserted affirmative defenses
thereto, SG respectfully requests that this Court enter an order:
8
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i) dismissing the Complaint as against SG in its entirety with prejudice;
ii) determining whether all appropriate and/or necessary parties were given
appropriate notice of the proceedings and the manner of such notice;
iii) the precise amount, if any, to be turned over pursuant to any execution or other
turnover order, and to whom the turnover is granted;
iv) the appropriate apportionment amongst the Defendants of funds and/or accounts
to be turned over, if any;
v) whether, as to each property or account in respect of which execution or turnover
is ordered, (i) the account holder or owner is regarded as an "agency or
instrumentality'' of a terrorist party on a claim based on an act of terrorism within
the meaning of the TRIA; or (ii) the judgment is based on a claim in respect of an
act for which a terrorist party is not immune under 28 U.S.C. § 1605(a)(7);
vi) awarding SG the costs of defending this action including reasonable attorney's
fees;
vii)granting SG any additional equitable and other relief that the Court deems just
and proper under the circumstances.
Dated: New York, New York
October 23, 2009
By:
MA YER BROWN LLP
Christopher J. Houp
1675 Broadway
New York, New York 10019
(212) 506-2500
Attorneys for Defendant
Societe Generale
9
Annex 342

ANNEX343

Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 1 of 16
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------x
JEFFREY LEVIN and DR. LUCILLE LEVIN,
Plaintiffs,
-against-
BANK OF NEW YORK, et al.,
Defendants.
--------------------------------------------------------------x
Civil Action No. 09 Civ. 5900
(RPP)
FILED UNDER SEAL
ANSWER OF
DEFENDANT JPMORGAN
CHASE BANK, N .A.
Defendant JPMorgan Chase Bank, N.A. ("JPMCB"), improperly sued in
this proceeding as "JPMorgan Chase," by its attorneys, Levi Lubarsky & Feigenbaum
LLP, as its answer to the complaint, states as follows:
1. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 1 of the complaint.
2. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 2 of the complaint except admits that the
Foreign Sovereign Immunities Act of 1976, as amended, 28 U.S.C. §§ 1602 et seq. (the
"FSIA"), and the National Defense Authorization Act for Fiscal Year 2008, P.L. 110-
181 , 122 Stat. 3 (2008) (the "2008 NDAA") are statutes of the United States and refers to
those statutes for a full and accurate statement of their terms and provisions.
3. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 3 of the complaint except admits that
JPMCB, pursuant to its obligations under various Executive Orders and federal
regulations, has from time to time reported information to the Office of Foreign Assets
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Control ("OF AC") of the United States Department of the Treasury indicating that
JPMCB is in possession of assets that have been blocked pursuant to the provisions of
such Executive Orders and regulations.
4. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 4 of the complaint except admits that a
copy of a protective order purportedly entered by the United States District Court for the
District of Columbia in an action entitled Levin v. Islamic Republic of Iran, Civil Action
No. 05-2494 (GK) (D.D.C.) (the "DC Action"), is annexed to the complaint as Exhibit C
and refers to Exhibit C for the contents thereof.
5. To the extent that paragraph 5 of the complaint sets forth
allegations that require a response from JPMCB, denies knowledge or information
sufficient to form a belief as to the truth of those allegations.
6. To the extent that paragraph 6 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 6 purpo1ts to quote selectively from section 5225(6) of the New York
Civil Practice Law and Rules ("CPLR") and refers to section 5225(6) for the full text of
that statutory provision.
7. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 7 of the complaint except admits that it
quotes selectively from section 201 of the Terrorism Risk Insurance Act of 2002, Pub. L.
No. 107-297, 116 Stat. 2322 (2002) ("TRIA"), and refers to section 201 for the full text
of that statutory provision.
2
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8. To the extent that paragraph 8 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 8 purports to quote selectively from FSIA § 1610 and refers to section
1610 for the full text of that statutory provision.
9. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 9 of the complaint.
10. To the extent that paragraph 10 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 10 purports to quote selectively from decisions of the New York City
Court and the United States Court of Appeals for the Second Circuit and refers to those
decisions for the full text thereof.
11. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 11 of the complaint.
12. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 12 of the complaint except admits that
the Court has subject matter jurisdiction over this proceeding pursuant to, inter alia, 28
U.S.C. § 1367, admits that paragraph 12 purports to quote selectively from FSIA §§
1605(a)(7) (repealed) and 1605A and refers to former section 1605(a)(7) and section
1605A for the full text of those statutory provisions.
13. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 13 of the complaint except admits that
the Court has in personam jurisdiction over JPMCB in this proceeding.
3
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14. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 14 of the complaint except admits that
the Southern District of New York is a proper venue for this proceeding.
15. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 15 of the complaint.
16. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 16 of the complaint.
17. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 1 7 of the complaint except admits that
paragraph 17 quotes selectively from CPLR § 5225(b) and refers to section 5225(b) for
the full text of that statutory provision.
18. Denies the allegations set forth in paragraph 18 of the complaint
except states that JPMCB is a national bank with its main office in Ohio, admits that
JPMCB has offices at One Chase Manhattan Plaza, New York, ew York, admits that
JPMCB, pursuant to its obligations under various Executive Orders and federal
regulations, has from time to time reported information to OF AC indicating that JPMCB
is in possession of assets that have been blocked pursuant to the provisions of such
Executive Orders and regulations, denies knowledge or information sufficient to form a
belief as to whether the Islamic Republic oflran ("Iran") has an interest in any such
assets and refers to the complaint as a whole for a statement of the capacity or capacities
in which JPMCB has been named as a defendant in this proceeding.
19. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 19 of the complaint.
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20. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 20 of the complaint.
21. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 21 of the complaint.
22. Denies the allegations set forth in paragraph 22 of the complaint.
23. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 23 of the complaint.
24. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 24 of the complaint except admits upon
information and belief that Iran is a foreign state.
25. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 25 of the complaint except admits that
paragraph 25 purports to quote from and characterize a decision rendered by the court in
the DC Action and refers to that decision for its contents ..
26. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 26 of the complaint.
27. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 27 of the complaint.
28. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 28 of the complaint.
29. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 29 of the complaint.
5
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30. To the extent that paragraph 30 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 30 quotes selectively from TRIA § 201 and refers to section 201 for the
full text of that statutory provision.
31 . Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 31 of the complaint except admits upon
information and belief that Iran is a foreign state.
32. To the extent that paragraph 32 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 32 purports to quote selectively from TRIA § 201 and refers to section 201
for the full text of that statutory provision.
33. Denies knowledge of information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 33 of the complaint and refers to the
relevant Executive Orders issued by various Presidents of the United States for their
terms and provisions.
34. To the extent that paragraph 34 of the complaint sets forth
allegations that require a response from JPMCB, denies knowledge or information
sufficient to form a belief as to the truth of those allegations except admits that paragraph
34 quotes selectively from Executive Order No. 13 ,3 82, 70 Fed. Reg. 38,567 (June 28,
2005) ("Executive Order No. 13,382"), and refers to that Executive Order for the full text
thereof.
35. To the extent that paragraph 35 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
6
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Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 7 of 16
that paragraph 3 5 purports to quote selectively from Executive Order No. 13,382 and
refers to that Executive Order for the full text thereof.
36. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 36 of the complaint except admits that
OF AC administers various sanctions programs and refers to the regulations governing
those programs for their terms and provisions.
3 7. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 37 of the complaint except admits upon
information and belief that OFAC has issued Foreign Assets Control Regulations for the
Financial Community and refers to those regulations for the full text thereof.
38. To the extent that paragraph 38 of the complaint sets forth
allegations that require a response from JPMCB, denies those allegations except admits
that paragraph 38 purports to quote selectively from 31 C.F.R. § 544 and refers to those
regulations for the full text thereof.
39. To the extent that paragraph 39 of the complaint sets forth
purported conclusions of law, no answer is required from JPMCB, but admits that
paragraph 39 purports to summarize subsection 20l(a) of31 C.F.R. § 544 and refers to
those regulations for the full text thereof.
40. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 40 of the complaint.
41. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 41 of the complaint.
7
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42. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 42 of the complaint except admits that
JPMCB, pursuant to its obligations under various Executive Orders and federal
regulations, has from time to time reported information to OF AC indicating that JPMCB
is in possession of assets that have been blocked pursuant to the provisions of such
Executive Orders and regulations.
43. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 43 of the complaint.
44. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 44 of the complaint except admits that
paragraph 44 purports to quote selectively from 31 C.F.R. § 500.312 and refers to that
regulation for the full text thereof.
45. Denies the allegations set forth in paragraph 45 of the complaint
except admits that paragraph 45 purports to quote selectively from FSIA § 161 0(g) and
refers to section 161 0(g) for the full text of that statutory provision.
46. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 46 of the complaint.
47. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 4 7 of the complaint.
48. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 48 of the complaint.
49. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 49 of the complaint.
8
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50. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 50 of the complaint.
51. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 51 of the complaint.
52. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set fo1th in paragraph 52 of the complaint.
53 . In response to paragraph 53 of the complaint, which repeats and
realleges the allegations of paragraphs 1 to 52 of the complaint, repeats and realleges its
responses to those paragraphs, as set forth in paragraphs 1 to 52 of this answer, with the
same force and effect as if they were set forth here in full.
54. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 54 of the complaint.
55. To the extent that paragraph 55 of the complaint sets forth
purported conclusions oflaw, no answer is required from JPMCB.
56. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 56 of the complaint.
57. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 57 of the complaint.
AFFIRMATIVE DEFENSES/OBJECTIONS IN POINT OF LAW
JPMCB, without assuming the burden of proof for those matters upon
which plaintiffs bear such burden, for its affirmative defenses and objections in point of
law, alleges as follows:
9
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Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 10 of 16
FIRST
58. Persons other than Iran or its agencies and instrumentalities may
have ownership or other interests in part or all of the funds at JPMCB that are the subject
of this turnover proceeding (the "Funds") which may be superior to the rights of
plaintiffs, if any, to have execution against such Funds to satisfy the judgment allegedly
entered in favor of plaintiffs that is referred to in paragraph 1 of the complaint (the
"Judgment").
SECOND
59. The Funds consist largely or entirely of the proceeds of wire
transfers that were routed through JPMCB as an intermediary bank but could not be
completed because of applicable regulations promulgated and/or administered by OFAC,
and so are being held in one or more blocked accounts at JPMCB. Persons other than
Iran or its agencies and instrumentalities who were the originators, beneficiaries or bank
participants in such wire transfers may have ownership or other interests in part or all of
such Funds which may be superior to the rights of plaintiffs, if any, to have execution
against such Funds to satisfy the Judgment.
THIRD
60. To the extent that the Funds are held in accounts in the name of or
for the benefit of persons or entities ("persons") other than Iran or its agencies and
instrumentalities, or that persons other than Iran or its agencies and instrumentalities may
have been parties to or have an interest in the proceeds of wire transfers that could not be
completed due to applicable regulations, such persons may be indispensable parties
hereto and may have the right to receive notice of these proceedings and an opportunity
Annex 343
Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 11 of 16
to be heard before this Court enters a judgment in this proceeding that would terminate or
otherwise affect their rights in the Funds.
FOURTH
61. To the extent that plaintiffs claim that some part or all of the Funds
belong to persons that are agencies or instrumentalities of Iran, or that such persons have
an interest in some part or all of the Funds, such persons are indispensable parties hereto
and have the right to receive notice of these proceedings and an opportunity to be heard
before this Court determines whether they are in fact agencies or instrumentalities of Iran
or whether such assets are subject to execution to satisfy the Judgment.
FIFTH
62. To the extent that other persons who hold judgments against Iran
based on its involvement with acts of terrorism have served restraining notices, notices of
pendency, writs of execution or other process or documents upon JPMCB with respect to
assets that may belong to Iran or any of its agencies or instrumentalities, such persons are
indispensable parties hereto and have the right to receive notice of these proceedings and
an opportunity to be heard so that this Court may determine which judgment creditors
should take precedence with respect to any assets that may belong to Iran or its agencies
or instrumentalities.
SIXTH
63. To the extent that plaintiffs are seeking to satisfy the Judgment
from blocked assets subject to TRIA § 201, the Court should consider whether plaintiffs
have established all of the elements necessary to obtain relief under that statute, including
whether Iran is a "terrorist party," as that term is defined in TRIA; whether the Judgment
11
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Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 12 of 16
was on a claim based on an "act of terrorism," as that term is defined in TRIA, or for
which a terrorist party is not immune under 28 U.S.C. § 1605(a)(7); whether and to what
extent the Funds belong to Iran or entities that are "agencies or instrumentalities" of Iran,
as those terms are used in TRIA; and whether and to what extent the Judgment is for
compensatory damages, as opposed to other forms of relief.
SEVENTH
64. To the extent that plaintiffs are attempting to assert rights under
FSIA § 1605A or 2008 NDAA § 1083, the Court should consider whether plaintiffs have
established all of the elements and satisfied all of the conditions necessary in order to
invoke the provisions of those statutes, including whether the DC Action was brought
under former FSIA § 1605(a)(7) or section 589 of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act, 1997, prior to January 28, 2008;
whether the DC Action relied upon either such provision as creating a cause of action;
whether either or both of those provisions failed to create a cause of action in favor of
plaintiffs against Iran; whether the DC Action was still before the courts in any form on
January 28, 2008; whether plaintiffs made a motion in the DC Action, within sixty days
after January 28, 2008, to have that action and the Judgment given effect as if the DC
Action had originally been filed under FSIA § 1605A; and whether plaintiffs commenced
another action pursuant to FSIA § 1605A, arising out of the same act or incident as the
DC Action, within the time period specified in 2008 NDAA § 1083(c)(3).
12
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Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 13 of 16
EIGHTH
65. The Court should determine whether the Judgment was entered on
default and if so, whether a copy must be served on Iran in the manner required by FSIA
§ 1608(a) in order to comply with FSIA § 1608(e) and whether that has been done.
NINTH
66. The Court should determine whether, in order to comply with the
requirements of CPLR § § 5225(6) and Rule 69 of the Federal Rules of Civil Procedure, a
copy of the complaint and the accompanying exhibits must be served on Iran in the
manner required by FSIA § 1608(a), or whether it is sufficient to serve such papers in the
manner permitted by CPLR § 5225(6), and whether that has been done.
TENTH
67. The Court should determine whether TRIA § 201 and FSIA §
1610( c) require that the Judgment must be enforced by a writ of execution that
specifically identifies the property that plaintiffs seek to levy against, whether such a writ
of execution must be specifically authorized by the Court that alJegedly entered the
Judgment, i.e., the United States District Court for the District of Columbia and if so,
whether such a writ has been so authorized and delivered to the appropriate official.
ELEVENTH
68. To the extent that other persons who hold judgments against Iran
based on its involvement with acts of terrorism have served restraining notices, notices of
pendency, writs of execution or other process or documents upon JPMCB with respect to
assets that may belong to Iran or any of its agencies or instrumentalities, the Court should
13
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Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 14 of 16
determine whether plaintiffs' rights to the Funds are superior to the rights of the plaintiffs
in those other actions.
TWELFTH
69. The Court should determine whether the complaint states a cause
of action or sets forth a claim for which relief may be granted.
THIRTEENTH
70. Nothing in this Answer shall constitute a waiver of any rights of
set-off that JPMCB may have against any party, person or entity.
FOURTEENTH
71. To the extent that the funds belonging to Iran and its agencies and
instrumentalities that are in accounts at JPMCB and the other defendants in this
proceeding exceed the amount necessary to satisfy the Judgment, this Com1 should
allocate the amounts to be turned over by each of the defendants, and determine from
which accounts the funds should be debited, in such a way that none of the defendants
and none of the other affected persons is required to turn over to plaintiffs more than that
defendant's or person's allocable share of the amount necessary to satisfy the Judgment.
WHEREFORE defendant JPMorgan Chase Bank, N.A. requests the entry
of a judgment in this proceeding
(1) Dismissing the complaint in its entirety as against JPMorgan Chase
Bank, N.A.;
(2) Awarding to JPMorgan Chase Bank, N.A. its costs and expenses in
this proceeding, including reasonable attorneys' fees; and
14
Annex 343
Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 15 of 16
(3) Granting such other and further relief to JPMorgan Chase Bank,
N.A. as may be just and proper.
Dated: New York, New York
October 23, 2009
TO: HOWARTH & SMITH
523 West Sixth Street, Suite 728
Los Angeles, CA 90014
Attorneys for Plaintiffs
LEVI LUBARSKY & FEIGENBAUM LLP
By J,1~ ~ )\
Howard B. I5~i !._\
J. Kelley Nevling, Jr.
1085 A venue of the Americas, 17th Floor
New York, NY 10036
Tel. No. (212) 308-6100
Attorneys for Defendant JPMorgan Chase
Bank, N.A., improperly sued in this
proceeding as "JPMorgan Chase"
LEVI LUBARSKY & FEIGENBAUM LLP
1185 A venue of the Americas, 17th Floor
New York, NY 10036
Attorneys for Defendant The Bank of New York
Mellon, sued herein as "Bank of New York"
DA VIS WRIGHT TREMAINE LLP
1633 Broadway, 27th Floor
New York, NY 10019
Attorneys for Defendant Citibank, N.A.,
sued herein as "Citibank"
15
Annex 343
Case 1:09-cv-05900-JPO-RWL Document 54 Filed 02/01/10 Page 16 of 16
MA YER BROWN LLP
1675 Broadway
New York, NY 10019-5820
Attorneys for Defendant Societe Generale, S.A.,
Sued herein as "Societe Generale"
16
Annex 343
ANNEX344

Case 1:09-cv-05900-JPO-RWL Document 56 Filed 02/01/10 Page 1 of 16
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------x
JEFFREY LEVIN and DR. LUCILLE LEVIN,
Plaintiffs,
-against-
BANK OF NEW YORK, et al.,
Defendants.
--------------------------------------------------------------x
Civil Action No. 09 Civ. 5900
(RPP)
FILED UNDER SEAL
ANSWER OF
DEFENDANT THE BANK
OF NEW YORK MELLON
Defendant The Bank of New York Mellon ("BNYM"), improperly sued in
this proceeding as "Bank of New York," by its attorneys, Levi Lubarsky & Feigenbaum
LLP, as its answer to the complaint, states as follows:
1. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 1 of the complaint.
2. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set fo11h in paragraph 2 of the complaint except admits that the
Foreign Sovereign Immunities Act of 1976, as amended, 28 U.S.C. §§ 1602 et seq. (the
"FSIA"), and the National Defense Authorization Act for Fiscal Year 2008, P .L. 110-
181, 122 Stat. 3 (2008) (the "2008 NDAA") are statutes of the United States and refers to
those statutes for a full and accurate statement of their terms and provisions.
3. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 3 of the complaint except admits that
BNYM, pursuant to its obligations under various Executive Orders and federal
regulations, has from time to time reported information to the Office of Foreign Assets
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Control ("OF AC") of the United States Department of the Treasury indicating that
BNYM is in possession of assets that have been blocked pursuant to the provisions of
such Executive Orders and regulations.
4. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 4 of the complaint except admits that a
copy of a protective order purportedly entered by the United States District Court for the
District of Columbia in an action entitled Levin v. Islamic Republic of Iran, Civil Action
No. 05-2494 (GK) (D.D.C.) (the "DC Action"), is annexed to the complaint as Exhibit C
and refers to Exhibit C for the contents thereof.
5. To the extent that paragraph 5 of the complaint sets forth
allegations that require a response from BNYM, denies knowledge or information
sufficient to form a belief as to the truth of those allegations.
6. To the extent that paragraph 6 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 6 purports to quote selectively from section 5225(b) of the New York
Civil Practice Law and Rules ("CPLR") and refers to section 5225(b) for the full text of
that statutory provision.
7. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 7 of the complaint except admits that it
quotes selectively from section 201 of the Terrorism Risk Insurance Act of 2002, Pub. L.
No. 107-297, 116 Stat. 2322 (2002) ("TRIA"), and refers to section 201 for the full text
of that statutory provision.
2
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8. To the extent that paragraph 8 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 8 purports to quote selectively from FSIA § 1610 and refers to section
1610 for the full text of that statutory provision.
9. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 9 of the complaint.
10. To the extent that paragraph 10 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 10 purports to quote selectively from decisions of the New York City
Court and the United States Court of Appeals for the Second Circuit and refers to those
decisions for the full text thereof.
11. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 11 of the complaint.
12. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 12 of the complaint except admits that
the Court has subject matter jurisdiction over this proceeding pursuant to, inter alia, 28
U.S.C. § 1367, admits that paragraph 12 purports to quote selectively from FSIA §§
l 605(a)(7) (repealed) and 1605A and refers to former section l 605(a)(7) and section
1605A for the full text of those statutory provisions.
13. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 13 of the complaint except admits that
the Court has in personam jurisdiction over BNYM in this proceeding.
3
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14. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 14 of the complaint except admits that
the Southern District of New York is a proper venue for this proceeding.
15. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 15 of the complaint.
16. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 16 of the complaint.
17. Denies the allegations set forth in paragraph 17 of the complaint
except admits that BNYM is a bank chartered and operating under the laws of the State of
New York with its headquarters in the State of New York, having offices at One Wall
Street, New York, New York, admits that BNYM, pursuant to its obligations under
various Executive Orders and federal regulations, has from time to time reported
information to OF AC indicating that BNYM is in possession of assets that have been
blocked pursuant to the provisions of such Executive Orders and regulations, denies
knowledge or information sufficient to form a belief as to whether the Islamic Republic
of Iran ("Iran") has an interest in any such assets, admits that paragraph 17 quotes
selectively from CPLR § 5225(6 ), refers to section 5225(6) for the full text of that
statutory provision, and refers to the complaint as a whole for a statement of the capacity
or capacities in which BNYM has been named as a defendant in this proceeding.
18. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 18 of the complaint.
19. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 19 of the complaint.
4
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20. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 20 of the complaint.
21. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 21 of the complaint.
22. Denies the allegations set forth in paragraph 22 of the complaint.
23. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 23 of the complaint.
24. To the extent that paragraph 24 of the complaint, which contains
certain conclusions of law, sets forth allegations that require a response from BNYM,
denies knowledge or information sufficient to form a belief as to the truth of those
allegations, except admits upon information and belief that Iran is a foreign state.
25. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 25 of the complaint except admits that
paragraph 25 purports to quote from and characterize a decision rendered by the court in
the DC Action and refers to that decision for its contents.
26. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 26 of the complaint.
27. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 27 of the complaint.
28. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 28 of the complaint.
29. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 29 of the complaint.
5
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30. To the extent that paragraph 30 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 30 quotes selectively from TRIA § 201 and refers to section 201 for the
full text of that statutory provision.
31. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set fo11h in paragraph 31 of the complaint except admits upon
information and belief that Iran is a foreign state.
32. To the extent that paragraph 32 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 32 purports to quote selectively from TRIA § 201 and refers to section 201
for the full text of that statutory provision.
33. Denies knowledge of information sufficient to form a belief as to
the truth of the allegations set f011h in paragraph 33 of the complaint and refers to the
relevant Executive Orders issued by various Presidents of the United States for their
terms and provisions.
34. To the extent that paragraph 34 of the complaint sets forth
allegations that require a response from BNYM, denies knowledge or information
sufficient to form a belief as to the truth of those allegations except admits that paragraph
34 quotes selectively from Executive Order No. 13,382, 70 Fed. Reg. 38,567 (June 28,
2005) (" Executive Order No. 13,382"), and refers to that Executive Order for the full text
thereof.
35. To the extent that paragraph 35 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
6
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that paragraph 35 purports to quote selectively from Executive Order No. 13,382 and
refers to that Executive Order for the full text thereof.
36. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 36 of the complaint except admits that
OF AC administers various sanctions programs and refers to the regulations governing
those programs for their terms and provisions.
37. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 3 7 of the complaint except admits upon
information and belief that OFAC has issued Foreign Assets Control Regulations for the
Financial Community and refers to those regulations for the full text thereof.
38. To the extent that paragraph 38 of the complaint sets forth
allegations that require a response from BNYM, denies those allegations except admits
that paragraph 38 purports to quote selectively from 31 C.F.R. § 544 and refers to those
regulations for the full text thereof.
39. Denies the allegations set forth in paragraph 39 of the complaint
except admits that paragraph 39 purports to summarize subsection 20l(a) of 31 C.F.R. §
544 and refers to those regulations for the full text thereof.
40. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 40 of the complaint.
41. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 41 of the complaint.
42. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 42 of the complaint except admits that
7
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BNYM, pursuant to its obligations under various Executive Orders and federal
regulations, has from time to time reported information to OF AC indicating that BNYM
is in possession of assets that have been blocked pursuant to the provisions of such
Executive Orders and regulations.
43. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 43 of the complaint.
44. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 44 of the complaint except admits that
paragraph 44 purports to quote selectively from 31 C.F.R. § 500.312 and refers to that
regulation for the full text thereof.
45. Denies the allegations set forth in paragraph 45 of the complaint
except admits that paragraph 45 purports to quote selectively from FSIA § 161 0(g) and
refers to section 161 0(g) for the full text of that statutory provision.
46. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 46 of the complaint.
4 7. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 4 7 of the complaint.
48. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 48 of the complaint.
49. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 49 of the complaint.
50. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 50 of the complaint.
8
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51. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 51 of the complaint.
52. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 52 of the complaint.
53. In response to paragraph 53 of the complaint, which repeats and
realleges the allegations of paragraphs 1 to 52 of the complaint, repeats and realleges its
responses to those paragraphs, as set forth in paragraphs 1 to 52 of this answer, with the
same force and effect as if they were set forth here in full.
54. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 54 of the complaint.
5 5. Denies the allegations set forth in paragraph 5 5 of the complaint.
56. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 5 6 of the complaint.
57. Denies knowledge or information sufficient to form a belief as to
the truth of the allegations set forth in paragraph 57 of the complaint.
AFFIRMATIVE DEFENSES/OBJECTIONS IN POINT OF LAW
BNYM, without assuming the burden of proof for those matters upon
which plaintiffs bear such burden, for its affirmative defenses and objections in point of
law, alleges as follows:
FIRST
58. Persons other than Iran or its agencies and instrumentalities may
have ownership or other interests in part or all of the funds at BNYM that are the subject
of this turnover proceeding (the "Funds") which may be superior to the rights of
9
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plaintiffs, if any, to have execution against such Funds to satisfy the judgment allegedly
entered in favor of plaintiffs that is referred to in paragraph 1 of the complaint ( the
"Judgment").
SECOND
59. The Funds consist largely or entirely of the proceeds of wire
transfers that were routed through BNYM as an intermediary bank or beneficiary's bank
but could not be completed because of applicable regulations promulgated and/or
administered by OF AC, and so are being held in one or more blocked accounts at
BNYM. Persons other than Iran or its agencies and instrumentalities who were the
originators, beneficiaries or bank participants in such wire transfers may have ownership
or other interests in part or all of such Funds which may be superior to the rights of
plaintiffs, if any, to have execution against such Funds to satisfy the Judgment.
THIRD
60. To the extent that the Funds are held in accounts in the name of or
for the benefit of persons or entities ("persons") other than Iran or its agencies and
instrumentalities, or that persons other than Iran or its agencies and instrumentalities may
have been parties to or have an interest in the proceeds of wire transfers that could not be
completed due to applicable regulations, such persons may be indispensable parties
hereto and may have the right to receive notice of these proceedings and an opportunity
to be heard before this Court enters a judgment in this proceeding that would terminate or
otherwise affect their rights in the Funds.
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FOURTH
61. To the extent that plaintiffs claim that some part or all of the Funds
belong to persons that are agencies or instrumentalities of Iran, or that such persons have
an interest in some part or all of the Funds, such persons are indispensable parties hereto
and have the right to receive notice of these proceedings and an opportunity to be heard
before this Court determines whether they are in fact agencies or instrumentalities of Iran
or whether such assets are subject to execution to satisfy the Judgment.
FIFTH
62. To the extent that other persons who hold judgments against Iran
based on its involvement with acts of terrorism have served restraining notices, notices of
pendency, writs of execution or other process or documents upon BNYM with respect to
assets that may belong to Iran or any of its agencies or instrumentalities, such persons are
indispensable parties hereto and have the right to receive notice of these proceedings and
an oppo1iunity to be heard so that this Court may determine which judgment creditors
should take precedence with respect to any assets that may belong to Iran or its agencies
or instrumentalities.
SIXTH
63. To the extent that plaintiffs are seeking to satisfy the Judgment
from blocked assets subject to TRIA § 201, the Court should consider whether plaintiffs
have established all of the elements necessary to obtain relief under that statute, including
whether Iran is a "terrorist party," as that term is defined in TRIA; whether the Judgment
was on a claim based on an "act of terrorism," as that term is defined in TRIA, or for
which a terrorist party is not immune under 28 U.S.C. § l 605(a)(7); whether and to what
11
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extent the Funds belong to Iran or entities that are "agencies or instrumentalities" of Iran,
as those terms are used in TRIA; and whether and to what extent the Judgment is for
compensatory damages, as opposed to other forms of relief.
SEVENTH
64. To the extent that plaintiffs are attempting to assert rights under
FSIA § 1605A or 2008 NDAA § 1083, the Court should consider whether plaintiffs have
established all of the elements and satisfied all of the conditions necessary in order to
invoke the provisions of those statutes, including whether the DC Action was brought
under former FSIA § 1605(a)(7) or section 589 of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act, 1997, prior to January 28, 2008;
whether the DC Action relied upon either such provision as creating a cause of action;
whether either or both of those provisions failed to create a cause of action in favor of
plaintiffs against Iran; whether the DC Action was still before the courts in any form on
January 28, 2008; whether plaintiffs made a motion in the DC Action, within sixty days
after January 28, 2008, to have that action and the Judgment given effect as if the DC
Action had originally been filed under FSIA § 1605A; and whether plaintiffs commenced
another action pursuant to FSIA § 1605A, arising out of the same act or incident as the
DC Action, within the time period specified in 2008 NDAA § 1083(c)(3).
EIGHTH
65. The Court should determine whether the Judgment was entered on
default and if so, whether a copy must be served on Iran in the manner required by FSIA
§ 1608(a) in order to comply with FSIA § 1608( e) and whether that has been done.
12
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Case 1:09-cv-05900-JPO-RWL Document 56 Filed 02/01/10 Page 13 of 16
NINTH
66. The Court should determine whether, in order to comply with the
requirements of CPLR §§ 5225(b) and Rule 69 of the Federal Rules of Civil Procedure, a
copy of the complaint and the accompanying exhibits must be served on Iran in the
manner required by FSIA § 1608( a), or whether it is sufficient to serve such papers in the
manner permitted by CPLR § 5225(b ), and whether that has been done.
TENTH
67. The Court should determine whether TRIA § 201 and FSIA §
1610( c) require that the Judgment must be enforced by a writ of execution that
specifically identifies the property that plaintiffs seek to levy against, whether such a writ
of execution must be specifically authorized by the Court that allegedly entered the
Judgment, i.e., the United States District Court for the District of Columbia and if so,
whether such a writ has been so authorized and delivered to the appropriate official.
ELEVENTH
68. To the extent that other persons who hold judgments against Iran
based on its involvement with acts of terrorism have served restraining notices, notices of
pendency, writs of execution or other process or documents upon BNYM with respect to
assets that may belong to Iran or any of its agencies or instrumentalities, the Court should
determine whether plaintiffs' rights to the Funds are superior to the rights of the plaintiffs
in those other actions.
TWELFTH
69. The Court should determine whether the complaint states a cause
of action or sets forth a claim for which relief may be granted.
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THIRTEENTH
70. BNYM hereby reserves its future rights of setoff against funds on
deposit in bank accounts at BNYM that belong to Iran or its agencies and
instrumentalities.
FOURTEENTH
71. To the extent that the funds belonging to Iran and its agencies and
instrumentalities that are in accounts at BNYM and the other defendants in this
proceeding exceed the amount necessary to satisfy the Judgment, this Court should
allocate the amounts to be turned over by each of the defendants, and determine from
which accounts the funds should be debited, in such a way that none of the defendants
and none of the other affected persons is required to turn over to plaintiffs more than that
defendant's or person's allocable share of the amount necessary to satisfy the Judgment.
WHEREFORE defendant The Bank of New York Mellon requests the
entry of a judgment in this proceeding
( 1) Dismissing the complaint in its entirety as against The Bank of
New York Mellon;
(2) Awarding to The Bank of New York Mellon its costs and expenses
in this proceeding, including reasonable attorneys' fees; and
14
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Case 1:09-cv-05900-JPO-RWL Document 56 Filed 02/01/10 Page 15 of 16
(3) Granting such other and further relief to The Bank of New York
Mellon as may be just and proper.
Dated: New York, New York
October 23, 2009
TO: HOWARTH & SMITH
523 West Sixth Street, Suite 728
Los Angeles, CA 90014
Attorneys for Plaintiffs
LEVI LUBARSKY & FEIGENBAUM LLP
By j lio~~n
J. Kelley Nevling, Jr. \
1085 A venue of the Americas, 17th Floor
New York, NY 10036
Tel. No. (212) 308-6100
Attorneys for Defendant The Bartle of New
York Mellon, improperly sued in this
proceeding as "Bank of New York"
LEVI LUBARSKY & FEIGENBAUM LLP
1185 A venue of the Americas, 17th Floor
New York, NY 10036
Attorneys for Defendant JPMorgan Chase Bank,
N.A., sued herein as "JPMorgan Chase"
DA VIS WRIGHT TREMAINE LLP
1633 Broadway, 27th Floor
New York, NY 10019
Attorneys for Defendant Citibank, N.A. ,
sued herein as "Citibank"
15
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Case 1:09-cv-05900-JPO-RWL Document 56 Filed 02/01/10 Page 16 of 16
MA YER BROWN LLP
1675 Broadway
New York, NY 10019-5820
Attorneys for Defendant Societe Generale, S.A.,
Sued herein as "Societe Generale"
16
Annex 344
ANNEX345

Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2014)
770 F.3d 993
United States Court of Appeals,
Second Circuit.
Ruth CALDERON-CARDONA; Ruth
Calderon-Cardona, in her capacity as
personal representative of The Estate of
Eladia Cardona-Rosario; Luz CalderonCardona;
Louis Calderoncardona;
Gloria Calderon-Cardona; Jose Raul
Calderon-Cardona; Ana Delia CalderonCardona;
Hilda Calderon-Cardona;
Salvador Calderon-Martinez; Angel
Calderonguzman in his capacity as
personal representative of The Estate
of Miguel Calderon-Cardona; Miguel
Calderonguzman in his capacity as
personal representative of The Estate
of Miguel Calderon-Cardona; Angel
Luis Ramirez-Colon in his capacity as
personal representative of The Estate
of Pablo Tirado-Ayala; and Antonia
Ramirezfiero, Petitioners-Appellants,
v.
The BANK OF NEW YORK MELLON,
HSBC, Standard Chartered, Deutsche
Bank Trust Company of the Americas,
UBS AG, Citibank, N.A., Bank of China,
Consolidated-Defendants-Appellees,
JPMorgan Chase Bank, N.A., Intesa
Saopaolo, Respondents-Appellees. *
No. 12-0075.
I
Argued Feb. 11, 2013.
I
Decided Oct. 23, 2014.
Synopsis
Background: Families and victims of a terrorist attack in
Israel sought to satisfy a judgment entered pursuant to Foreign
Sovereign Immunities Act (FSIA) against the Democratic
Republic of North Korea and its main intelligence agency,
723 F.Supp.2d 441 , by seizing accounts at the respondent
banks that contained funds blocked pursuant to sanctions
imposed by the U.S. Government against North Korea. The
United States District Court for the Southern District of New
York, Cote, J., 867 F.Supp.2d 389, granted judgment for
respondents. Petitioners appealed.
Holdings: The Court of Appeals, Hall, Circuit Judge, held
that:
on matter of first impression, an electronic fund transfer
(EFT) blocked midstream is "property of a foreign state" or
"the property of an agency or instrumentality of such a state,"
subject to attachment under the FSIA, only where either the
state itself or an agency or instrumentality thereof, such as a
state-owned financial institution, transmitted the EFT directly
to the bank where the EFT is held pursuant to the block;
remand was required for parties to conduct discovery; and
Presidential waiver effectively rendered FSIA attachment
remedy unavailable.
Affirmed in part, vacated in part, and remanded.
Attorneys and Law Firms
*995 Robert J. Tolchin and Meir Katz, The Berkman Law
Office, LLC, Brooklyn, NY, for Petitioners-Appellants.
Howard B. Levi and J. Kelly Nevling, Jr., Levi Lubarsky &
Feigenbaum LLP, New York, NY, for JPMorgan Chase Bank,
N.A. and Bank of New York Mellon Trust Co., N.A.
Jennifer G. Newstead, Davis Polk & Wardwell LLP, New
York, New York, for Intesa Saopaolo.
Paul Kenneth Stecker, Phillips Lyle LLP, Buffalo, New York,
for HSBC.
Barry J. Glickman, Zeichner Ellman & Krause LLP, New
York, New York, for Standard Chartered Bank.
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 345 1
Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2014)
Sharon L. Schneier, Davis Wright Tremaine LLP, New York,
New York, for UBS AG and Citibank, N.A.
Lanier Saperstein, Dorsey & Whitney LLP, New York, New
York, for Bank of China.
Mark Putnam Gimbel, Covington & Burling, LLP, New York,
NY, for Deutsche Bank Trust Company Americas.
David S. Jones, United States Attorney's Office for the
Southern District ofNew York, New York, NY, for the United
States of America.
Neal M. Sher, Esq., New York, NY, for The Heiser Judgment
Creditors.
Liviu Vogel, Salon Marrow Dyckman Newman Broudy LLP,
New York, NY, for The Peterson Judgment Creditors.
Keith Martin Fleischman, The Fleischman Law Firm, New
York, NY, for The Valore Judgment Creditors.
Suzelle M. Smith, Howarth & Smith, Los Angeles, CA, for
Jeremy Levin and Lucille Levin.
Before: HALL, LYNCH, and CARNEY, Circuit Judges.
Opinion
HALL, Circuit Judge:
Before us on appeal is a matter of first impression regarding
the interpretation of§ 201 of the Terrorism Risk Insurance
Act of 2002 (codified at 28 U.S.C. § 1610 note) ("TRIA")
and §§ 1610(f)(l) and 1610(g) of the Foreign Sovereign
Immunities Act ("FSIA") (codified at 28 U.S.C.). The
petitioners are family members of victims of state sponsored
terrorism. They seek to enforce their 2010 judgment ("the
underlying judgment") obtained against the Democratic
People's Republic of Korea ("North Korea") by attaching
the blocked assets of that state pursuant to TRIA § 201
and FSIA §§ 1610(f)(l) and 1610(g). In particular, the
petitioners seek to satisfy their judgments from electronic
fund transfers ("EFTs") blocked in United States banks
pursuant to the sanctions regimes imposed *996 upon
North Korea by the United States government.1 The banks
at which the EFTs are blocked oppose turning over the
value of the EFTs to petitioners. The questions raised on
appeal are whether petitioners are precluded from recovering
because North Korea's designation as a state sponsor of
terrorism was revoked in 2008, prior to the entry of the
underlying judgment, and whether the EFTs sought to be
attached are the property ofNorth Korea, or of its agencies or
instrumentalities, and therefore properly subject to execution
to satisfy a judgment against North Korea.
BACKGROUND
A. Underlying Judgment
The petitioners are family members and estate representatives
of two American citizens, Carmelo Calderon-Molina and
Pablo Tirado-Ayala, who were victims of a terrorist attack
in Israel on May 30, 1972. The attack was carried out by
terrorists affiliated with the Japanese Red Army and the
Popular Front for the Liberation of Palestine.
On March 28, 2008, the victims' families and estate
representatives commenced suit against North Korea and the
North Korean Cabinet General Intelligence Bureau in the
United States District Court for the District of Puerto Rico
under FSIA § 1605A, alleging that North Korea and the
North Korean Cabinet General Intelligence Bureau "provided
material support to the terrorists by supplying them with the
armaments used to carry out the attack." Calderon-Cardona
v. JPMorgan Chase Bank, NA., 867 F.Supp.2d 389, 392
(S.D.N.Y.2011). When the suit was filed, North Korea was
designated by the United *997 States Department of State
("State Department") as a state sponsor of terrorism under
§ 6G) of the Export Administration Act of 1979. North
Korea and the North Korean Cabinet General Intelligence
Bureau defaulted, and on August 5, 2010, the district court
entered judgment for the petitioners awarding compensatory
damages in the amount of $78 million and punitive damages
in the amount of $300 million. See Calderon-Cardona v.
Democratic People's Republic of Korea, 723 F.Supp.2d 441,
460-85 (D.P.R.2010). The petitioners' judgment remains
unsatisfied.
By order dated October 11, 2008, while petitioners'§ 1605A
action was pending, the State Department rescinded North
Korea's status as a state sponsor of terrorism. Rescission of
Determination Regarding North Korea, 73 Fed.Reg. 63,540
(Oct. 24, 2008). Then-Secretary of State Condoleezza Rice
did so in accordance with a Presidential Report issued on June
26, 2008, which was the end-result ofnegotiations with North
Korea regarding its development of nuclear technologies.
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Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2014)
B. Judgment Collection and Proceedings Before the
District Court
In an attempt to collect on the judgment, petitioners registered
it in the Southern District of New York pursuant to 28 U.S.C.
§ 1963 on October 8, 2010. Seeking to locate North Korean
assets, the petitioners then served a subpoena on the Office
of Foreign Assets Control ("OFAC") of the Department of
the Treasury requesting the identities of financial institutions
holding assets that are blocked as a result of sanctions against
North Korea and information regarding other property of
North Korea. OFAC, in response, produced a list of "the
financial institutions that have reported to OFAC that they are
holding assets blocked pursuant to sanctions against North
Korea." Having identified a number of these institutions and
subpoenaed them for information about such accounts and
their value, the petitioners subsequently requested orders for
turnover pursuant to Federal Rule of Civil Procedure 69
and New York Civil Practice Law Rules 5225(b) and 5227
seeking to enforce their judgment by attaching the blocked
funds pursuant to TRIA § 201, FSIA § 1610(t)(l), and
FSIA § 1610(g). Respondent financial institutions opposed
the petitions.
The district court denied the petitions for turnover, concluding
that petitioners failed to demonstrate entitlement to relief
under TRIA § 201 and FSIA § 1610(g). The court held
first that North Korea did not qualify as a "terrorist party"
as required by TRIA § 201. It then concluded that even if
North Korea qualified as a "terrorist party," the blocked assets
held by the respondents are not "owned by" North Korea for
purposes of TRIA or FSIA § 1610(g). Finally, it concluded
that petitioners could not rely on FSIA § 1610(t)(l) to support
their turnover petitions because that section had been waived
by the President of the United States.
DISCUSSION
A. Applicable Law
The Foreign Sovereign Immunities Act is the sole basis for
obtaining jurisdiction over a foreign state in federal court.
FSIA provides that "a foreign state shall be immune from the
jurisdiction of the courts of the United States and of the States
except as provided in sections 1605 to 1607 of this chapter."
28 U.S.C. § 1604 (1988). Thus, ifadefendantis a foreign state
within the meaning of FSIA, that defendant is not subject to
the jurisdiction of the United States Courts unless one of the
exceptions in the Act applies.
*998 In 1996, Congress amended FSIA to include a
terrorism exception, codified at 28 U.S.C. § 1605(a)
(7), in order to "give American Citizens an important
economic and financial weapon against ... outlaw states"
that sponsor terrorism by providing "safe havens, funding,
training, supplying weaponry, medical assistance, false travel
documentation, and the like." H.R.Rep. No. 104-383, at 62
( 1995). This section was subsequently repealed, and Congress
enacted § 1605A in its place. See Pub.L. 110-181, Div. A,
§ 1083, Jan. 28, 2008, 122 Stat. 341 (repealing 28 U.S.C.
§ 1605(a)(7) and creating 28 U.S.C. § 1605A); 28 U.S.C. §
1605A(a)(2)(A)(i)(l) ("The court shall hear a claim under this
section if ... the foreign state was designated as a state sponsor
of terrorism" by the State Department). To the extent relevant
to this case, § 1605A provides for the same exceptions to
foreign sovereign immunity as the repealed section.
FSIA also has several sections which address the type of
foreign property that can be attached by judgment creditors.
Generally, property of a foreign sovereign is immune from
attachment. See 28 U.S.C. § 1609. Exceptions are, however,
provided by 28 U.S.C. § 1610(t)(l)(A), TRIA § 201(a), and
28 U.S.C. § 1610(g).
1. 28 U.S.C. § 1610(f)(l)(A)
28 U.S.C. § 1610(t)(l)(A) provides that "any property with
respect to which financial transactions are prohibited or
regulated" under the Trading with the Enemy Act ("TWEA"),
or the International Emergency Economic Powers Act
("IEEPA") can be subject to execution or attachment to
satisfy a judgment which was obtained under the terrorism
exception outlined in § 1605A. See 28 U.S.C. § 1610(t)(l)
(A) ("[S]hall be subject to execution or attachment in aid
of execution of any judgment relating to a claim for which
a foreign state (including any agency or instrumentality or
such state) claiming such property is not immune under
section 1605(a)(7) ... or section 1605A"). Also in § 1610(t),
however, Congress authorized the President to "waive"
section 1610(t)(l) "in the interest of national security." 28
U.S.C. § 1610(t)(3). President Clinton waived § 1610(t)
(l)'s attachment remedy entirely, effectively preventing
judgment creditors from collecting pursuant to § 1610(t)
(1). See Presidential Determination 2001---03, 65 Fed.Reg.
66,483 (Oct. 28, 2000). This waiver, which no president has
rescinded, effectively rendered the attachment remedy under
§ 1610(t)(l) unavailable to plaintiffs.
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Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2014)
2. TRIA
In an effort to aid victims of terrorism to satisfy their
judgments Congress in 2002 enacted TRIA which is not
subject to presidential waivers issued under 28 U.S.C. §
1610(f). See Pub.L. No. 107-297, 116 Stat. 2322 (2002),
reprinted in relevant part at 28 U.S.C. § 1610 note;
H.R.Rep. No. 107-779, at 27 (2002), 2002 U.S.C.C.A.N.
1430 (Conf.Rep.); Ministry of Def & Support for the Armed
Forces of the Islamic Republic of Iran v. Elahi, 556 U.S.
366, 386, 129 S.Ct. 1732, 173 L.Ed.2d 511 (2009) ("Congress
placed the 'notwithstanding' clause in§ 201(a) ... to eliminate
the effect of any Presidential waiver issued under 28 U.S.C.
§ 1610(f) prior to the date of the TRIA's enactment.").
Specifically, TRIA authorizes plaintiffs holding a judgment
against a terrorist party to attach blocked assets of the terrorist
party or any agency or instrumentality of the terrorist party.
See TRIA § 201(a). The statute provides that:
Notwithstanding 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 on an act *999 of terrorism, or for which
a terrorist party is not immune under [28 U.S.C. § 1605(a)
(7) ], 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 the 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) (emphasis supplied). On August 10, 2012,
Congress amended TRIA and added language indicating that
it is applicable to section 1605A judgment holders. See Iran
Threat Reduction and Syrian Human Rights Act of 2012,
Pub.L. No. 112-158, § 502(e) (Aug. 10, 2012).
3. 28 u.s.c. § 1610(g)
Subsequent to the enactment ofTRIA, in 2008, Congress also
enacted 28 U.S.C. § 1610(g), which authorizes attachment
remedies for plaintiffs seeking to satisfy a judgment obtained
under § 1605A. See 28 U.S.C. § 1610(g)(l) (allowing
attachment of property of a foreign state "against which a
judgment is entered under section 1605A"). Section 1610(g)
not only allows attachment of property of a foreign state
but also property of an agency or instrumentality "that is
a separate juridical entity or is an interest held directly
or indirectly in a separate juridical entity." Id. § 1610(g)
(1 ). Attachment is allowed even if the property is regulated
under TWEA or IEEPA. Section 1610(g), however, does not
"supersede the authority of a court to prevent appropriately
the impairment of an interest held by a person who is not
liable in the action giving rise to a judgment in property." Id.
§ 1610(g)(3).
B. Issues for Review
On appeal petitioners argue pursuant to TRIA § 201, 28
U.S.C. § 1610(g), and 28 U.S.C. § 1610(f)(l)(A) that they are
entitled to execute against the blocked EFTs, which they claim
belong to North Korea. As we explain below, petitioners'
arguments with regard to TRIA and 28 U.S.C. § 1610(f)(l)
(A) lack merit. Additional discovery is required, however,
to determine whether attachment of some of the EFTs is
permissible under 28 U.S.C. § 1610(g).
1. TRIA § 201
Pursuant to TRIA, assets are attachable when "a person has
obtained a judgment against a terrorist party on a claim based
onan act of terrorism." TRIA § 201(a). Here, the statutory text
of TRIA unambiguously requires that there ( 1) be a judgment,
(2) against a terrorist party, and (3) the claim underlying the
judgment be based on an act of terrorism. See United States
v. Santos, 541 F.3d 63, 67 (2d Cir.2008) ("When a court
determines that the language of a statute is unambiguous,
its inquiry is complete."). While plaintiffs have a judgment
against North Korea that is based on an act of terrorism, that
judgment was not entered against a terrorist party. As the
district court correctly observed, a foreign state is a "terrorist
party" for purposes ofTRIA § 201(d) when it is" 'designated
as a state sponsor of terrorism under section 6(j) of the Export
Administration Act of 1979 ... or Section 620A of the Foreign
Assistance Act ofl 961.' " Calderon-Cardona, 867 F.Supp.2d
at 394 (quoting TRIA § 201(d)). North Korea was no longer
designated a state sponsor of terrorism as of October 11,
2008. The underlying judgment was entered against North
Korea on August 5, 2010, nearly two years later. At the time
the judgment below was entered, therefore, because North
Korea was not a state sponsor of terrorism, it was not a
"terrorist party" within the meaning ofTRIA. The underlying
judgment, consequently, *1000 was not a judgment against
a terrorist party at the time it issued.
Petitioners' contention that a state's previous, but now lifted,
designation as a state sponsor of terrorism satisfies TRIA
§ 201(a)'s requirement that the judgment be entered against
a "terrorist party" is unpersuasive. Although interpreting "a
judgment against a terrorist party on a claim based on an
act of terrorism" to include only judgments entered against a
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party that was a designated state sponsor of terrorism when
the judgment was entered appears the more natural reading,
petitioners' interpretation of the language as applying where
the party against whom judgment was entered was a state
sponsor of terrorism when the terrorist act was committed
or when the action was commenced has at least some
plausibility. The statutory context, however, makes clear that
Congress intended the former meaning. In other parts of
FSIA, when Congress has intended that a former state sponsor
of terrorism be denied sovereign immunity for wrongs done
during the time it was so designated, Congress has done
so expressly. For example, in creating the private right of
action against foreign states under FSIA § 1605A( c) Congress
expressly included states that were formerly designated as
state sponsors of terrorism. FSIA § l 605A( c) ("A foreign
state that is or was a state sponsor of terrorism .. . shall
be liable."). It would be discordant to hold that Congress
believed it needed to provide expressly that a former state
sponsor of terrorism could be held liable in one part of
FSIA, but that it only needed to do so impliedly in a laterenacted
statute it codified as a note to FSIA. See Food &
Drug Admin. v. Brown & Williamson Tobacco Corp., 529
U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) ("A
court must therefore interpret [a] statute as a symmetrical
and coherent regulatory scheme and fit, if possible, all parts
into an harmonious whole." (internal citation and quotation
marks omitted)). Accordingly, because their judgment was
not issued against a terrorist party, petitioners may not attach
the EFTs at issue pursuant to TRIA § 201(a).
2. FSIA § 1610(g)
Section 1610(g) is not limited in the same way as TRIA §
201(a). Under § 1610(g),
the property of a foreign state against which a judgment is
entered under section 1605A, and the property of an agency
or instrumentality of such a state, including property that
is a separate juridical entity or is an interest held directly
or indirectly in a separate juridical entity, is subject to
attachment in aid of execution, and execution, upon that
judgment.
28 U.S.C. § 1610(g)(l). Because, as noted, a ''judgment ...
under § 1605A" expressly includes judgments against foreign
nations formerly, but not currently, designated as state
sponsors of terrorism, the fact that North Korea no longer
has that designation does not bar attachment of North Korea's
property, or that of its agents and instrumentalities, under §
1610(g).
Whether attachment of the EFTs under § 16 lO(g) is
possible turns, instead, on whether the blocked EFTs at
issue are "property of' North Korea or "the property of an
agency or instrumentality of' North Korea. We review these
legal questions de nova. Shipping Corp. of India Ltd. v.
Jaldhi Overseas Pte Ltd., 585 F.3d 58, 66--67 (2d Cir.2009)
(reviewing de nova the "threshold issue of whether EFTs are
indeed 'defendant's' property"); see also Salve Regina Coll.
v. Russell, 499 U.S. 225,231, 111 S.Ct. 1217, 113 L.Ed.2d
190 ( 1991) (holding that "a court of appeals *1001 should
review de nova a district court's determination of state law").
"[W]hether or not midstream EFTs may be attached or
seized depends upon the nature and wording of the statute
pursuant to which attachment and seizure is sought." ExportImport
Bank of US. v. Asia Pulp & Paper Co., 609 F.3d
111, 116 (2d Cir.2010). Congress has not defined the type
of property interests that may be subject to attachment under
FSIA § 1610(g).2 In particular, FSIA § 1610(g) is silent as
to what interest in property the foreign state, or agency or
instrumentality thereof, must have in order for that property
to be subject to execution. Because of the absence of any
definition of the property rights identified in the statutory
text, we hold that FSIA § 1610(g) does not preempt state
law applicable to the execution of judgments in this case.
Moreover, given this gap in the contours of the legislation,
we cannot infer that Congress intended merely to leave a
void. We therefore apply the general rule in this Circuit that
when Congress has not created any new property rights, but
"merely attaches consequences, federally defined, to rights
created under state law," we must look to state law to define
the "rights the uudgment debtor] has in the property the
[creditor] seeks to reach." Asia Pulp, 609 F.3d at 117 (first
alteration in original) (internal quotation marks omitted). In
short, Congress provided that "property" of a foreign state is
subject to execution, and absent any indication that Congress
intended a special definition of the term, "property" interests
are ordinarily those created and defined by state law.
In this Circuit, two cases in particular interpret New York
law delineating the property interests held by parties to
an EFT that is intercepted midstream. In Asia Pulp and
Jaldhi, we dealt with the interpretation of Article 4 of the
New York Uniform Commercial Code ("NY UCC"), which
governs EFTs held in New York banks. See N.Y. U.C.C. Law
Ch. 38, Art. 4-A; Asia Pulp, 609 F.3d at 118 (Article 4-
A was "enacted to provide a comprehensive body of law
that defines the rights and obligations that arise from wire
transfers" (internal quotation marks omitted)). Looking to
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both the text of N.Y. UCC § 4-A-503 and the official
commentaries to that statute, we determined in Jaldhi that
under New York law "EFTs are neither the property of the
originator nor the beneficiary while briefly in the possession
of an intermediary bank." Jaldhi, 585 F.3d at 71. In Asia
Pulp we explained that this was so because "wire transfers,
which include EFTs, are a unique type of transaction to
which ordinary rules do not necessarily apply." Asia Pulp,
609 F.3d at 118. Because EFTs function as a chained series
of debits and credits between the originator, the originator's
bank, any intermediary banks, the beneficiary's bank, and
the beneficiary, "the only party with a claim against an
intermediary bank is the sender to that bank, which is typically
the originator's bank." Id. at 119-20 (quoting Permanent
Editorial Board for the Uniform *1002 Commercial Code
Commentary No. 16 §§ 4A-502(d) and4A-503, at 3 (2009)).
Put another way, under the N.Y. UCC's statutory scheme,
the only entity with a property interest in an EFT while it
is midstream is the entity immediately preceding the bank
"holding" the EFT in the transaction chain. In the context
of a blocked transaction, this means that the only entity
with a property interest in the stopped EFT is the entity
that passed the EFT on to the bank where it presently
rests. We therefore hold that an EFT blocked midstream is
"property of a foreign state" or "the property of an agency or
instrumentality of such a state," subject to attachment under
28 U.S.C. § 1610(g), only where either the state itself or
an agency or instrumentality thereof (such as a state-owned
financial institution) transmitted the EFT directly to the bank
where the EFT is held pursuant to the block.
Because the district court's opinion issued prior to
discovery relating to the details of the entities involved
in the transaction chains of the EFTs at issue in this
case, the record contains little to no evidence of whether
the entities that transmitted the EFTs to the respondent
banks were agencies or instrumentalities of North Korea.
Without knowing the nature of those entities, we cannot
Footnotes
determine whether the EFTs are properly attachable. Remand
is therefore required for the parties to conduct discovery
aimed at resolving the factual issues surrounding whether the
entities that transmitted the EFTs to the respondent banks
were agencies or instrumentalities of North Korea. Accord
Palestine Monetary Auth. v. Strachman, 62 A.D.3d 213,
873 N.Y.S.2d 281 (App.Div. 1st Dep't 2009) (remanding for
additional discovery where it was not known whether the
bank that transmitted the EFT to the bank that was holding the
EFT was controlled by a foreign government against which
judgment was sought).
3. FSIA § 1610(1)(1)
As for FSIA § 1610(f)(l), we hold that petitioners' claim
for relief pursuant to that statutory provision is without merit
for the simple reason that a party's right to proceed under
that section was eliminated by a valid executive order that
no subsequent presidential administration has rescinded. See
Presidential Determination 2001-03, 65 Fed.Reg. 66,483,
2000 WL 34508240 (Oct. 28, 2000).
CONCLUSION
We have reviewed the parties' additional arguments and
find them unavailing. In light of the foregoing analysis,
the judgment of the District Court is affirmed in part with
respect to its holdings that the EFTs cannot be attached
pursuant to TRIA § 201 andFSIA § 1610(f)(l), and is vacated
and remanded in part for further proceedings to determine
whether the EFTs may be attached pursuant to FSIA §
1610(g).
All Citations
770 F.3d 993
* The Clerk of Court is respectfully directed to amend the caption to conform to that above.
1 By way of background, an EFT is a transfer of money using electronic technology rather than paper transactions. We
explained the operation of EFTs in Shipping Corp. of India Ltd.v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir.2009)
as follows,
An EFT is nothing other than an instruction to transfer funds from one account to another. When the originator and
the beneficiary each have accounts in the same bank that bank simply debits the originator's account and credits the
beneficiary's account. When the originator and beneficiary have accounts in different banks, the method for transferring
funds depends on whether the banks are members of the same wire transfer consortium. If the banks are in the same
consortium, the originator's bank debits the originator's account and sends instructions directly to the beneficiary's bank
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. Annex 345 6
Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2014)
upon which the beneficiary's bank credits the beneficiary's account. If the banks are not in the same consortium-as is
often true in international transactions-then the banks must use an intermediary bank. To use an intermediary bank
to complete the transfer, the banks must each have an account at the intermediary bank (or at different banks in the
same consortium). After the originator directs its bank to commence an EFT, the originator's bank would instruct the
intermediary to begin the transfer of funds. The intermediary bank would then debit the account of the bank where the
originator has an account and credit the account of the bank where the beneficiary has an account. The originator's
bank and the beneficiary's bank would then adjust the accounts of their respective clients. See Amicus Br. 9-11.
To more concretely illustrate the circumstances of the instant case, consider the following example: ABC Shipping
wants to transfer $100 to XYZ Overseas. ABC has an account at India National Bank, and XYZ has an account at
Bank of Thailand. India National Bank and Bank of Thailand do not belong to the same consortium, but each has an
account at New York Bank. To begin the transfer, ABC instructs India National Bank to transfer $100 to XYZ's account
at Bank of Thailand. India National Bank then debits ABC's account and forwards the instruction to New York Bank.
New York Bank then debits India National's account and credits Bank of Thailand's account. Bank of Thailand then
credits XYZ's account, thereby completing the transfer.
Id. at 60 n. 1.
2 This lack of definition is apparent in the myriad approaches taken by district courts tasked with interpreting TRIA's and
FSIA § 161 0(g)'s provisions allowing execution upon the assets "of" a terrorist state. See, e.g., Estate of Heiser v. Islamic
Republic of Iran, 885 F.Supp.2d 429, 443 (D.D.C.2012) (holding that both TRIA § 201 and FSIA § 1610(g) "require
plaintiffs to prove some terrorist state ownership in order to attach and execute on property" and finding that ownership
interest through federal interstitial rule making); see also, e.g., Bennett v. Islamic Republic of Iran, 927 F.Supp.2d 833,
845-46 (N.D.Cal.2013) (applying California law defining property subject to enforcement of a money judgment, and
allowing attachment of blocked assets where instrumentality of Iran held at least a beneficial interest in those assets.).
End of Document © 2021 Thomson Reuters. No claim to original U.S.
Government Works.
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ANNEX346

Levin v. Bank of New York, 602 Fed.Appx. 37 (2015)
602 Fed.Appx. 37
This case was not selected for
publication in West's Federal Reporter.
RULINGS BY SUMMARY ORDER DO NOT HA VE
PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY
1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT'S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX
ORAN ELECTRONIC DATABASE (WITH THE
NOTATION "SUMMARY ORDER"). A PARTY CITING
A SUMMARY ORDER MUST SERVE A COPY OF IT
ON ANY PARTY NOT REPRESENTED BY COUNSEL.
United States Court of Appeals,
Second Circuit.
Jeremy LEVIN and Dr. Lucille
Levin, Plaintiffs-Appellees,
v.
BANK OF NEW YORK, et al., Defendants,
JPMorgan Chase & Co. and JPMorgan
Chase Bank, N.A., Third-Party Plaintiffs,
v.
Central Bank of Nigeria, ThirdParty
Defendant-Appellant,
JPMorgan Chase & CO. and JPMorgan
Chase Bank, N.A., Third-Party Plaintiffs,
v.
Steven M. Greenbaum, et al., ThirdParty
Defendants-Appellees.
End of Document
No. 13-4711.
I
May 11, 2015.
Appeal from the United States District Court for the Southern
District of New York (Patterson, J.).
UPON DUE CONSIDERATION, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that the
judgment of the District Court be and hereby is REVERSED.
Attorneys and Law Firms
David H. Fromm (Patrick R. O'Mea, on the brief), Brown
Gavalas & Fromm LLP, New York, NY, for Appellant.
Kristy N. Grace, DLA Piper LLP (US), Baltimore, MD
(Timothy Birnbaum, DLA Piper LLP (US), New York, NY;
Richard M. Kremen, Dale K. Cathell, DLA Piper LLP
(US), Baltimore, MD; Curtis C. Mechling, Jamie L. Bernard,
Stroock & Stroock & Lavan LLP, New York, NY; Suzelle M.
Smith, Don Howarth, Howarth & Smith, Los Angeles, CA,
on the brief), for Appellees.
*38 PRESENT: RICHARD C. WESLEY, DEBRA ANN
LIVINGSTON and DENNY CHIN, Circuit Judges.
SUMMARY ORDER
We REVERSE the judgment of the District Court and
REMAND with instructions to the District Court to vacate
the turnover order and to enter judgment for third party
Defendant-Appellant Central Bank ofNigeria dismissing the
complaint. See Calderon-Cardona v. Bank of NY. Mellon,
770 F.3d 993 (2d Cir.2014); Hausler v. JP Morgan Chase
Bank, NA., 770 F.3d 207 (2d Cir.2014) (per curiam).
All Citations
602 Fed.Appx. 37
© 2021 Thomson Reuters. No claim to original U.S.
Government Works.
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works.
Annex 346

ANNEX 347

Case 1:09-cv-05900-JPO-RWL Document 1065 Filed 08/20/15 Page 1 of 2
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------X
JEREMY LEVIN AND LUCILLE LEVIN,
Plaintiffs,
-v-
BANK OF NEW YORK, JP MORGAN CHASE,
SOCIETE GENERALE AND CITIBANK, N.A.,
Defendants.
--------------------------------------------------------------X
J. PAUL OETKEN, District Judge:
09-CV-5900 (JPO)
ORDER
1. Pursuant to the Mandate issued by the Second Circuit on June 3, 2015 (2d Cir. No. 13-
4711, Dkt. No. 1050), third-party defendant Central Bank of Nigeria is hereby directed to submit
to the Court, on or before September 2, 2015, a proposed order implementing the Second
Circuit's ruling.
2. Certain letter motions previously filed in this case have been rendered moot.
Accordingly, the letter motions at docket numbers 914, 916, 956, and 957 are hereby denied as
moot.
3. The pending motion for Partial Summary Judgment On Single Phase Two Asset (Dkt.
No. 969) and the pending Cross Motion for Summary Judgment (Dkt. No. 984) are hereby
denied without prejudice to refiling. The parties may renew their motions, or file other
appropriate motions, following the Supreme Court's disposition of the petitions for certiorari in
Calderon-Cardona v. Bank of New York Mellon, 770 F.3d 993 (2d Cir. 2014), and Hausler v. JP
Morgan Chase Bank, N.A., 770 F.3d 207 (2d Cir. 2014) (per curiam), with briefing that takes
into account the operative rulings in those cases as well as any other relevant developments in
the law.
Annex 347
Case 1:09-cv-05900-JPO-RWL Document 1065 Filed 08/20/15 Page 2 of 2
The Clerk of Court is directed to close the motions at docket numbers 914,916,956, 957,
969, and 984.
SO ORDERED.
Dated: August 20, 2015
New York, New York
Annex 347
ANNEX348

Case 1:09-cv-05900-JPO-RWL •
ByECF
Honorable Robert P. Patterson
United States District Judge
United States Courthouse
500 Pearl Street
New York, NY 10007
Document 1035 Filed 10/28/14 Page 1 of 2
U.S. Department of Justice
United States Attorney
Southern District of New York
86 Chambers Street
New York, New York 10007
October 28, 2014
Re: Levin v. Bank of New York, et al,
09 Civ. 5900 (RPP)
Dear Judge Patterson:
I write respectfully to inform the Court of two recent Second Circuit opinions deciding
issues that are important to resolution of the pending motion for partial summary judgment (Dkt.
No. 969) in the above-referenced matter. See Calderon-Cardona v. Bank of New York Mellon,
No. 12-75, slip op. Oct. 23, 2014, and Hausler v. JP Morgan Chase Bank, NA., No. 12-1264,
per curiam slip op. Oct. 27, 2014 (copies enclosed). Both decisions relate specifically to issues
discussed in the United States' Statement of Interest in this matter (Dkt. No. 1018). Your Honor
heard oral argument on August 21, 2014.
In Calderon-Cardona, judgment creditors attempted to attach midstream electronic
funds transfers ("EFTs") to enforce a judgment against North Korea under FSIA section
1605A. In applying section 161 0(g) of the FSIA, the Circuit stated that attachability "turns ...
on whether the blocked EFTs at issue are 'property of North Korea or 'the property of an
agency or instrumentality of North Korea," a question the Circuit reviewed de nova. Slip Op.
at 12. Further, the Circuit held that section 1610(g) "does not preempt state law applicable to
the execution of judgments in this case," id., and that "we must look to state law to define the
'rights the [judgment debtor] has in the property the [creditor] seeks to reach,"' id. at 13
(quoting Export-Import Bank of US. v. Asia Pulp & Paper Co., 609 F.3d 111, 117 (2d Cir.
2010) (bracketed modifications in Calderon-Cardona)). Applying the New York UCC as the
relevant state law governing "property interests held by parties to an EFT," the Circuit further
held that, in the case of midstream EFTs, whether a judgment debtor holds a property interest
sufficient to permit attachment depends on whether that party transferred funds directly to the
intermediary bank that now holds the funds. Citing the lack of record evidence on that
question, the Circuit remanded the matter for discovery to determine whether North Korean
agencies or instrumentalities transmitted the EFTs to the intermediary banks.
Hausler also involved blocked midstream EFTs held by New York banks, which a
judgment creditor of Cuba sought to attach under section 201 of TRIA. The Circuit held per
curiam that, under TRIA as under the FSIA, "we must look to state law to define the rights the
judgment debtor has in the property the [creditor] seeks to reach." Slip Op. at 7 (quoting
Calderon-Cardona, Slip. Op. at 12-13 (quotation marks omitted)). The Circuit again looked to
Annex 348
Case 1:09-cv-05900-JPO-RWL Document 1035 Filed 10/28/14 Page 2 of 2
Page2
New York property law because "the banks at which the EFTs are blocked are in New York."
Id. at 8. The Circuit went on to observe, quoting Calderon-Cardona, that "the only entity with
a property interest in the stopped EFT is the entity that passed the EFT on to the bank where it
presently rests." Id. at 8 (quotation marks omitted). The Circuit reversed the district court's
judgment permitting attachment because, unlike in Calderon-Cardona, it was "undisputed" that
the judgment debtor had not transferred the EFTs directly to the intermediary banks. Id.
Because Cuba had no "property interest in the EFTs," TRIA section 201 did not permit their
attachment. Id.
Respectfully,
PREET BHARARA
United States Attorney
By: /s/ David S. Jones
DAVID S. JONES
Assistant U.S. Attorney
Telephone: (212) 637-2739
Fax: (212) 637-2730
cc: All counsel via ECF notification (with enclosures)
Annex 348
ANNEX349

Levin v. Bank of New York Mellon, Not Reported in Fed. Supp. (2017)
2017 WL 4863094
2017 WL 4863094
Only the Westlaw citation is currently available.
United States District Court, S.D. New York.
Jeremy LEVIN and Lucille Levin, Plaintiffs,
V.
The BANK OF NEW YORK
MELLON, et al., Defendants.
The Bank of New York Mellon,
et al., Third-Party Plaintiffs,
V.
Steven M. Greenbaum, et
al., Third-Party Defendants.
09-CV-5900 (JPO)
I
Signed 10/27/2017
Attorneys and Law Firms
Curtis Campbell Mechling, James Lawrence Bernard, Nathan
Harry Stopper, Patrick Nicholas Petrocelli, Stroock &
Stroock & LaVan LLP, Jeffrey Lance Nagel, Paul Anthony
Saso, Gibbons P.C., Jonathan G. Kortmansky, Sullivan
& Worcester LLP, Liviu Vogel, Salon Marrow Dyckman
Newman Broudy LLP, George F. Hritz, Kaplan Fox &
Kilsheimer, LLP, Karl Geercken, Alston & Bird, LLP, Keith
Martin Fleischman, June Hee Park, The Fleischman Law
Firm, John Joseph Hay, Salans FMC SNR Denton Europe
LLP, Robert Joseph Tolchin, Robert J. Tolchin, Esq., Gina
Maria Venezia, Edward John Carlson, Freehill, Hogan &
Mahar, LLP, Barbara L. Seniawski, Cary Brian Samowitz,
DLA Piper US LLP, Christopher Carlsen, Nicholas Lawrence
Magali, Douglas R. Maag, Clyde & Co. US LLP, Thomas
John Luz, Karaahmet Luz & Greenberg, L.L.P., William
F. McGovern, Kobre & Kim LLP, Anna Mercado Clark,
Paul Kenneth Stecker, Carl E. Person, Phillips Lytle LLP,
Andrew Michael Meehan, Akin Gump Strauss Hauer &
Feld, Jacob S. Pultman, Allen & Overy, LLP, David H.
Fromm, Brown Gavalas & Fromm LLP, New York, NY, Don
Howarth, Suzelle Moss Smith, Howarth & Smith, Kathryn
Lee Crawford, Brownstein Hyatt Farber Schreck LLP, Los
Angeles, CA, Steven Karl Barentzen, The Law Office of
Steven Barentzen, Baruch Weiss, Drew A. Harker, Arnold
Porter Kaye Scholer LLP, Kathy Dianne Bailey, Bailey
Law Group, John W. Karr, Karr & Allison P.C., Ferris R.
Bond, Bond & Norman PLLC, Washington, DC, George
Michael Chalos, Kerri Marie D'Ambrosio, Chalos & Co.,
P.C., Oyster Bay, NY, Annie Pennock Kaplan, Fay Kaplan
Law, P.A., Wasshington, DC, Dale Kerbin Cathell, Richard
Marc Kremen, DLA Piper US LLP, Baltimore, MD, Chijioke
Metu, Placid & Emmanuel, P.C, Jamaica, NY, Sean Charles
McPhee, Phillips Lytle LLP, Buffalo, NY, for Plaintiffs/ThirdParty
Defendants.
Howard B. Levi, J. Kelley Nevling, Jr., Richard Franklin
Lubarsky, Walter Everett Swearingen, Gregory Phillip Feit,
Steven B. Feigenbaum, Levi Lubarsky Feigenbaum & Weiss
LLP, Christopher James Houpt, Mark Hanchet, Mayer Brown
LLP, Jamie Somoza Raghu, Davis Wright Tremaine LLP,
Curtis Campbell Mechling, Stroock & Stroock & La Van LLP,
Timothy H. Birnbaum, DLA Piper, Robert Joseph Tolchin,
Robert J. Tolchin, Esq., New York, NY, for Defendants/ThirdParty
Plaintiffs.
Christopher J. Robinson, Sharon L. Schneier, Davis Wright
Tremaine LLP, New York, NY, Noel J. Nudelman, Heideman
Nudelman & Kalik, PC, Washington, DC.
OPINION AND ORDER
J. PAUL OETKEN, United States District Judge
*1 Plaintiffs Jeremy Levin and Dr. Lucille Levin
("Plaintiffs") are judgment creditors of the Islamic Republic
oflran ("Iran"). In 2009, they filed this suit seeking turnover
of Iranian assets within the United States in an effort to
enforce an unsatisfied judgment against Iran. Plaintiffs now
move for leave to file a supplemental complaint pursuant to
Federal Rule of Civil Proecudre Rule 15(d). For the reasons
that follow, the motion is granted in part.
I. Background
The Court presumes familiarity with the factual and
procedural history of this case, as discussed in its two prior
Opinions and Orders issued on March 4, 2011, and September
23, 2013. See Levin v. Bank of NY. (Levin I), No. 09 Civ
5900, 2011 WL 812032, at *1--4 (S.D.N.Y. Mar. 4, 2011)
(Patterson, J.); Levin v. Bank of NY. Mellon (Levin II), No.
09 Civ 5900, 2013 WL 5312502, at *1-2 (S.D.N.Y. Sept. 23,
2013) (Patterson, J.).
Plaintiffs hold an unsatisfied final judgment of $28,807,719
against Judgment-Debtor Iran, arising out of the 1984
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Annex 349
Levin v. Bank of New York Mellon, Not Reported in Fed. Supp. (2017)
2017 WL 4863094
kidnapping of Jeremy Levin in Beirut, Lebanaon. (Dkt.
No. 1099-1 ("Supp. Compl.") ,r 1.) Levin's abductors were
terrorists who were trained, supported, aided, funded, and
directed by Iran. 1 Id.
Plaintiffs filed the original Complaint in this action in 2009
(the "2009 Complaint"), seeking turnover of all assets within
the jurisdiction of the United States in which Iran has a
direct or indirect interest. (Dkt. No. 1099 at 2; Dkt. No.
70.) The 2009 Complaint alleged that Defendant-Garnishee
J.P. Morgan Chase Bank, N.A. ("JPMCB"), along with other
New York banks, possessed "assets blocked by the U.S.
government due to the fact that Iran has an interest in them
either directly or indirectly ('Iranian Blocked Assets')." (Dkt.
No. 70 ,r 3). 2
Although Plaintiffs, along with other judgment creditors, have
obtained turnover of certain Iranian assets from DefendantGarnishee
JPMCB (see, e.g., Dkt. No. 1089), Plaintiffs'
judgment has not been fully satisfied. (Dkt. No. 1100 ,r 4).
On November 29, 2016, Plaintiffs served interrogatories on
JPMCB. (Supp. Compl. ,r 4.) JPMCB's responses, which
were served on January 12, 2017, revealed the existence
of two additional, previously undisclosed Iranian Blocked
Assets: (1) "a deposit account" under the name of Lebanese
businessman Kassim Tajideen ("Tajideen Account"); and (2)
an account "hold[ing] the proceeds of a wire transfer, also
known as an electronic funds transfer ('EFT'), that was
blocked by JPMCB under ... 31 C.F.R. Parts 560, 561 and
594 ['Iranian Sanctions']" ("Saderat Account"). (Id.; Dkt. No.
1101 at 1).
*2 Plaintiffs move for leave to file a supplemental complaint
seeking turnover of the Tajideen Account and the Saderat
Account for collection and partial satisfaction of their
judgment against Iran pursuant to § 201(a) of the Terrorism
Risk Insurance Act of 2002 ("TRIA")3 and § § 1610( f)( 1 )(a)
and (g)( 1) of the Foreign Soverign Immunities Act ("FSIA"). 4
(Dkt. No. 1099 at 4; Supp. Compl. ,r,r 8-9.)
II. Discussion
Under Federal Rule of Civil Procedure 15(d), a party may
"move to serve a supplemental pleading and the district court
may grant such a motion, in the exercise of its discretion,
upon reasonable notice and upon such terms as may be
just." Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir.
1995). "Absent undue delay, bad faith, dilatory tactics, undue
prejudice to the party to be served with the proposed pleading,
or futility, the motion should be freely granted." Id. (citing
Farnan v. Davis, 371 U.S. 178,182 (1962)).
*3 With respect to the Tajideen Account, the Court
concludes that Plaintiffs should be permitted to supplement
their original complaint. Upon discovering the existence of
the Tajideen Account on June 12, 2017, Plaintiffs acted
promptly by delivering writs of execution for immediate
service and levy on Defendant JPMCB on June 13, 2017.
(Dkt. No. 1100 ,r 7.) There is no evidence of "undue delay,
bad faith, [or] dilatory tactics." Quaratino, 71 F.3d at 66. Nor
is there any evidence of undue prejudice or futility. See id.
Most important, JPMCB does not oppose Plaintiffs' motion
as it relates to the Tajideen Account. (Dkt. No. 1101 at 2.)
With respect to the Saderat Account, however, the Court
concludes that supplementation would be futile. In order to
"execute a judgment on the blocked assets of a terrorist party,
or its agency or instrumentality, to satisfy a judgment against
the terrorist party," a plaintiff must establish that
(1) the plaintiff obtained a judgment against the terrorist
party; (2) the judgment is for a claim based on an act
of terrorism; (3) the assets are "blocked assets" within
the meaning of TRIA; and (4) execution is sought only
to the extent of the plaintiff's outstanding judgment for
compensatory damages.
Doe v. Ejercito De Liberacion Nacional, No. 15 Civ. 8652,
2017 WL 591193, at *2 (S.D.N.Y. Feb. 14, 2017). Here,
JPMCB argues that supplementation would be futile because
the Saderat Account does not qualify as a "blocked asset"
under TRIA, as it is not the property of a terrorist party. The
Court agrees.
In Hausler v. JP Morgan Chase Bank, NA., the Second
Circuit identified certain conditions precedent to treating an
EFT at a bank located in New York5 as the property of a
terrorist state under TRIA § 201(a):
[U]nder New York law EFTs are neither the property
of the originator nor the beneficiary while briefly in the
possession of an intermediary bank. As such, the only
entity with a property interest in the stopped EFT is the
entity that passed the EFT on to the bank where it presently
rests. Thus, in order for an EFT to be a blocked asset of
[a terrorist state] under TRIA § 201(a), either [the terrorist
state] itself or an agency or instrumentality thereof ( such as
a state-owned financial institution) [ must have] transmitted
the EFT directly to the bank where the EFT is held pursuant
to the block.
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Annex 349
Levin v. Bank of New York Mellon, Not Reported in Fed. Supp. (2017)
2017 WL 4863094
770 F.3d 207, 212 (2d Cir. 2014) (last alteration in original)
( emphasis added) ( citations omitted) ( quoting CalderonCardona
v. Banko/New York Mellon, 770 F.3d 993, 1001-02
(2d Cir. 2014)) (internal quotation marks omitted). In other
words, unless a terrorist state transferred the EFT in question
directly to the blocking bank, the EFT is not attachable
"[b ]ecause no terrorist party or agency or instrumentality
thereof has a property interest" in it. Id.; see also Ejercito,
2017 WL 591193, at *3 ("[O]nly property of a target party
can be attached under TRIA[,] and ... a mid-stream EFT is
the sole property of the entity that transmitted the EFT to the
blocking bank.").
Here, as in Hausler and Ejercito, it is "undisputed that
no [terrorist state] transmitted any of the blocked EFTs in
this case directly to the blocking bank." Ejercito, 2017 WL
591193, at *2 (quoting Hausler, 770 F.3d at 212) (internal
quotation mark omitted). The blocked EFT in question was
transmitted to JPMCB directly by Lloyd's Bank. (Dkt. No.
1101 at 11; Dkt. No. 1104 at 6). Under established Second
Circuit law, the EFT is thus considered property of Lloyd's
Bank, which is not an agent or instrumentality of Iran;
consequently, the EFT cannot be attached under TRIA.
*4 Plaintiffs attempt to sidestep Hausler's rule based on the
fact that Bank Saderat used Lloyd's bank as a "correspondent
bank"6 rather than an "intermediatry bank." (Dkt. No. 1104
Footnotes
at 6.) The Court concludes that this is a distinction without
a difference, at least as it relates to the Second Circuit's rule
in Hausler. As the Ejercito court explained, even where an
EFT is transferred to a blocking bank by a "correspondent
bank," the transferred asset is considered the "sole property"
of the correspondent bank, rather than the "principal" bank
(i.e., Bank Saderat). See Ejercito, 2017 WL 591193, at *1-3.
Therefore, the EFT is not attachable unless the correspondent
bank is itself a terrorist state or an agent or instrumentality
thereof. Because Lloyd's Bank is not a terrorist state, the
Saderat Account is not attachable, and supplementation
would be futile as to that asset.
III. Conclusion
For the foregoing reasons, Plaintiffs' motion for leave to file a
supplemental complaint is GRANTED in part and DENIED
in part.
The Clerk of Court is directed to close the motion at Docket
Number 1098.
SO ORDERED.
All Citations
Not Reported in Fed. Supp., 2017 WL 4863094
1 The facts set forth in this section are taken from Plaintiffs' proposed Supplemental Complaint. (See Supp. Compl.)
Because Defendant J.P. Morgan Chase Bank, N.A. partially opposes leave to supplement on futility grounds, "the
allegations of the [proposed supplemental] pleading ... must be presumed true, and the Court must draw all reasonable
inferences in the pleading party's favor'' in deciding whether to grant leave to supplement. Unique Sports Generation,
Inc. v. LGH-11/, LLC, No. 03 Civ. 8324, 2005 WL 2414452, at *5 (S.D.N.Y. Sept. 30, 2005).
2 More specifically, these assets were blocked by the United States Treasury Department's Office of Foreign Assets Control
("OFAC"). See Levin /, 2011 WL 812032, at *1 . "OFAC administers various sanctions against terrorists ... and state
sponsors of terrorism ... by enforcing prohibitions on transactions and trades and/or blocking property or assets of ...
terrorism-supporting countries .... " (Supp. Campi. ,i 34.)
3 Section 201 (a) of TRIA provides:
Notwithstanding 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, or for which a terrorist
party is not immune under section 1605(a)(7) of title 28, United States Code, 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, Pub. L. No. 107-297, § 201 (a), 116 Stat. 2322, 2337 (2002) (codified at 28 U.S.C. § 1610 note).
4 Section 1610 of FSIA provides, in relevant part:
(f)(1 )(A) Notwithstanding any other provision of law, including but not limited to section 208(f) of the Foreign Missions
Act (22 U.S.C. 4308(f)), and except as provided in subparagraph (B), any property with respect to which financial
transactions are prohibited or regulated pursuant to section 5(b) of the Trading with the Enemy Act (50 U.S.C. App. 5(b)),
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. 3
Annex 349
Levin v. Bank of New York Mellon, Not Reported in Fed. Supp. (2017)
2017 WL 4863094
section 620(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2370(a)), sections 202 and 203 of the International
Emergency Economic Powers Act (50 U.S.C. 1701 -1702), or any other proclamation, order, regulation, or license
issued pursuant thereto, shall be subject to execution or attachment in aid of execution of any judgment relating to
a claim for which a foreign state (including any agency or instrumentality or such state) claiming such property is not
immune under section 1605(a)(7) (as in effect before the enactment of section 1605A) or section 1605A.
[ (g)(1) ] Subject to paragraph (3), the property of a foreign state against which a judgment is entered under section
1605A, and the property of an agency or instrumentality of such a state, including property that is a separate juridical
entity or is an interest held directly or indirectly in a separate juridical entity, is subject to attachment in aid of execution,
and execution, upon that judgment as provided in this section, regardless of-
(A) the level of economic control over the property by the government of the foreign state;
(B) whether the profits of the property go to that government;
(C) the degree to which officials of that government manage the property or otherwise control its daily affairs;
(D) whether that government is the sole beneficiary in interest of the property; or
(E) whether establishing the property as a separate entity would entitle the foreign state to benefits in United States
courts while avoiding its obligations.
28 U.S.C. § 1610.
5 Here, as in Hausler, "the bank[] at which the EFTs are blocked are in New York, so we look to New York property law" to
"define the 'rights the judgment debtor has in the property the [creditor] seeks to reach.' " Hausler v. JP Morgan Chase
Bank, N.A., 770 F.3d 207,212 (2d Cir. 2014) (second alteration in original) (quoting Calderon-Cardona v. Bank of New
York Mellon, 770 F.3d 993, 1001 (2d Cir. 2014)).
6 According to Plaintiffs, a "correspondent bank" is a "bank 'that acts as an agent for another bank, or engages in an
exchange of services with that bank, in a geographical area to which the other bank does not have direct access.' " (Dkt.
No. 1104 at 8 (quoting Bank, Black's Law Dictionary (10th ed. 2014)).) See also Sidwell & Co. v. Kamchatimpex, 632
N.Y.S.2d 455, 457 (N.Y. Sup. Ct. 1995) ("[A] foreign financial institution ... that is unable to operate a branch or subsidiary
office in the United States maintains a dollar account at a [correspondent bank], to effect US dollar transactions for itself
and its customers.").
End of Document © 2021 Thomson Reuters. No claim to original U.S.
Government Works.
WESTLAW © 2021 Thomson Reuters. No claim to original U.S. Government Works. 4
Annex 349
ANNEX 350

Levin v. JPMorgan Chase Bank, N.A., 751 Fed.Appx. 143 (2018)
751 Fed.Appx. 143
This case was not selected for publication in West's
Federal Reporter.
RULINGS BY SUMMARY ORDER DO NOT HAVE
PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER
JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT'S LOCAL
RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A
PARTY MUST CITE EITHER THE FEDERAL
APPENDIX ORAN ELECTRONIC DATABASE
(WITH THE NOTATION "SUMMARY ORDER"). A
PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.
United States Court of Appeals, Second Circuit.
Doctor Lucille LEVIN and Jeremy Levin,
Plaintiffs-Third-Party Defendants -
Cross-Defendants-Counter-ClaimantsCounter-
Defendants-Appellants,
V.
JPMORGAN CHASE BANK, N.A.,
Defendant-Third-Party
Plaintiff-Third-Party
Defendant-Counter-Defendant-CrossDefendant-
Counter-Claimant-Appellee.
17-3854-cv
I
October 9, 2018
Synopsis
Background: After obtaining judgment of more than $28
million against the Islamic Republic of Iran in connection
with terrorist kidnapping, 529 F.Supp.2d 1, judgment
creditors filed suit against bank in order to attach funds
within the United States to satisfy the judgment, and
subsequently moved for leave to file supplemental
complaint seeking turnover of two accounts pursuant to
the Terrorism Risk Insurance Act (TRIA) and the Foreign
Sovereign Immunities Act (FSIA). The United States
District Court for the Southern District of New York, J.
Paul Oetken, J., 2017 WL 4863094, granted motion in
part and denied it in part on grounds of futility. Judgment
creditors appealed.
Holdings: The Court of Appeals held that:
[JJ absent a federal definition of "property" in either FSIA
or TRIA, the court would look to state law to define the
rights that Iran had in the property that judgment creditors
sought to reach, and
[21 under New York law, electronic funds transfer (EFT)
that was blocked by bank in accordance with Iranian
sanctions regulations was not "property" of a terrorist
entity, a foreign state, or an agency or instrumentality of
such a state, and thus was not attachable under FSIA or
TRIA.
Affirmed.
West Headnotes (3)
[1]
[2]
Federal Courts Execution and enforcement
Absent a federal definition of "property" in
either the Foreign Sovereign Immunities Act
(FSIA) or the Terrorism Risk Insurance Act
(TRIA), court would look to state law to define
the rights that foreign judgment debtor had in
the property that judgment creditors sought to
reach. 28 U.S.C.A. §§ 1610, 1610(g); Pub. L.
No. 107-297, 116 Stat. 2322 (2002).
International Law►Terrorism and related
activity
Under New York law, electronic funds transfer
(EFT) that was blocked by New York bank in
accordance with Iranian sanctions regulations
promulgated by the Office of Foreign Assets
Control (OFAC), which was not transferred
directly to bank by terrorist entity, foreign state,
or agency or instrumentality of foreign state, but
by another bank, was not "property" of a
terrorist entity, foreign state, or agency or
instrumentality of such state, and thus was not
attachable under the Foreign Sovereign
WEST AW © 2021 Thomson Reuters. No claim to original U.S. Government Works.
Annex 350
Levin v. JPMorgan Chase Bank, N.A., 751 Fed.Appx. 143 (2018)
[3]
Immunities Act (FSIA) or the Terrorism Risk
Insurance Act (TRIA). 28 U.S.C.A. §§ 1610,
1610(g); Pub. L. No. 107-297, 116 Stat. 2322
(2002); N.Y. Uniform Commercial Code§ 4-A.
1 Cases that cite this headnote
International Law►Terrorism and related
activity
In determining whether, under New York law,
electronic funds transfer (EFT) held by New
York bank and blocked pursuant to sanctions
regulations promulgated by the Office of
Foreign Assets Control (OFAC) was property of
a terrorist entity, foreign state, or agent or
instrumentality of such state, so as to be
attachable under the Foreign Sovereign
Immunities Act (FSIA) or the Terrorism Risk
Insurance Act (TRIA), the identity of the
immediate transferor of the funds as an
"intermediary bank" was irrelevant; in this
context, the purported distinction between
correspondent banks and intermediary banks
was a distinction without a difference. 28
U.S.C.A. §§ 1610, 1610(g); Pub. L. No.
107-297, 116 Stat. 2322 (2002); N.Y. Uniform
Commercial Code§ 4-A.
1 Cases that cite this headnote
*145 Appeal from an October 27, 2017 judgment of the
United States District Court for the Southern District of
New York (Oetken, J.).
UPON DUE CONSIDERATION, IT IS HEREBY
ORDERED, ADJUDGED, AND DECREED that the
judgment of the district court is AFFIRMED.
Attorneys and Law Firms
For Plaintiff-Appellants: Suzelle M. Smith, Howarth &
Smith, Los Angeles, CA
For Defendant-Appellee: Steven B. Feigenbaum, Levi
Lubarsky Feigenbaum & Weiss LLP, New York, NY
Present: Richard C. Wesley, Debra Ann Livingston,
Circuit Judges, Geoffrey W. Crawford, District Judge.'
SUMMARY ORDER
Lucille and Jeremy Levin ("the Levins") appeal from an
October 27, 2017 order of the United States District Court
for the Southern District of New York (Oetken, J.), which
was certified as a final judgment under Federal Rule of
Civil Procedure 54(b) on February 12, 2018, denying their
motion for leave to file a supplemental complaint
pursuant to Federal Rule of Civil Procedure 15(d). We
assume the parties' familiarity with the underlying facts,
the procedural history of the case, and the issues on
appeal.
***
The Levins hold an unsatisfied judgment against the
Islamic Republic of Iran ("Iran") arising out of the 1984
kidnapping of Jeremy Levin in Beirut, Lebanon. On
February 6, 2008, the United States District Court for the
District of Columbia entered judgment in the amount of
$28,807,719 in the Levins' lawsuit against Iran pursuant
to § 1605(a)(7) of the Foreign Sovereign Immunities Act
of 1976, 28 U.S.C. §§ 1602 et seq. ("FSIA").' See Levin v.
Islamic Republic of Iran, 529 F.Supp.2d 1 (D.D.C. 2007).
The Levins now seek to attach funds to satisfy that
judgment.
On June 26, 2009, the Levins filed their initial complaint
in the instant lawsuit, alleging that JPMorgan Chase
Bank, N.A. ("JPMCB") possessed "assets blocked by the
U.S. government due to the fact that Iran has an interest in
them either directly or indirectly ('Iranian Blocked
Assets')." App 183. A later round of discovery revealed
the existence of two previously undisclosed Iranian
Blocked Assets in JPMCB's possession: (1) a deposit
account under the name of Lebanese businessman Kassim
Tajideen (the "Tajideen Account") and (2) an account (the
"Saderat Account") holding the proceeds of a wire
transfer, also known as an electronic funds transfer (the
"EFT"), that was blocked by JPMCB in accordance with
Iranian sanctions regulations promulgated by the Office
of Foreign Assets Control ("OFAC"). On July 12, 2017,
the Levins sought leave under Fed. R. Civ. P. 15(d) to file
a supplemental complaint seeking turnover of the
Tajideen Account and the Saderat Account pursuant to §
201(a) of the Terrorism Risk Insurance *146 Act of 2002
WEST AW © 2021 Thomson Reuters. No claim to original U.S. Government Works. 2
Annex 350
Levin v. JPMorgan Chase Bank, N.A., 751 Fed.Appx. 143 (2018)
("TRIA")2 and§§ 1610(f)(l)(A) and (g)(l) of the FSIA.3
JPMCB did not oppose the Levins' motion with respect to
the Tajideen Account. With respect to the Saderat
Account, however, the parties differed. The Levins argued
that the Saderat Account was attachable because the funds
belonged to an "agency or instrumentality" of Iran-Bank
Saderat, an Iranian bank based in Tehran ("Saderat").4
JPMCB argued that Saderat lacked title to the funds
because the immediate transferor of the funds to JPMCB
was not Saderat but Lloyds Bank Plc ("Lloyds"), a U.K.
bank headquartered in London that transferred the funds
in its capacity as Saderat' s correspondent bank.
The district court granted the Levins' motion to
supplement their complaint with respect to the Tajideen
Account but denied the motion with respect to the Saderat
Account. With respect to the Saderat Account, the court
concluded that supplementation of the complaint would
be futile under Calderon-Cardona v. Bank of New York
Mellon, 770 F.3d 993 (2d Cir. 2014), and Hausler v. JP
Morgan Chase Bank, N.A., 770 F.3d 207 (2d Cir. 2014).
The court quoted Hausler for the proposition that "in
order for an EFT to be a blocked asset of [a terrorist state]
under TRIA § 201(a), either [the terrorist state] itself or
an agency or instrumentality thereof (such as a
state-owned financial institution) [must have] transmitted
the EFT directly to the bank where the EFT is held
pursuant to the block." Levin v. Bank of New York Mellon,
No. 09-CV-5900 (JPO), 2017 WL 4863094, at *4
(S.D.N.Y. Oct. 27, 2017) (quoting Hausler, 770 F.3d at
212 (emphasis and brackets in original) ). Because the
blocked EFT in question was transmitted to JPMCB
directly by Lloyds, rather than Saderat, the EFT
constituted property of Lloyds and could not be attached
under TRIA or FSIA. Id.
*147
***
We review the district court's holding de nova. A district
court's denial of leave to amend or supplement a
complaint is generally reviewed for abuse of discretion.
See, e.g., McCarthy v. Dun & Bradstreet Corp., 482 F.3d
184, 200 (2d Cir. 2007). However, "[w]hen the denial of
leave to amend is based on a legal interpretation, such as a
determination that amendment would be futile, a
reviewing court conducts a de nova review." Hutchison v.
Deutsche Bank Sec. Inc., 647 F.3d 479, 490 (2d Cir.
2011); see also Gorman v. Consol. Edison Corp., 488
F.3d 586, 592 (2d Cir. 2007) (reviewing de nova a district
court's denial of leave to amend on grounds of futility).
Because the district court denied the Levins' motion to
amend their complaint on grounds of futility, we review
that decision de nova.
Whether the Levins may attach the Saderat Account to
satisfy their judgment against Iran turns on the issue of
ownership of those funds. See FSIA § 1610(g)(l)
(authorizing attachment of "the property of a foreign state
against which a judgment is entered under section 1605A,
and the property of an agency or instrumentality of such a
state" (emphasis added)); TRIA § 20l(a) ("the blocked
assets of [a] terrorist party (including the blocked assets of
any agency or instrumentality of that terrorist party)"
(emphasis added)); FSIA § 1610(f)(l)(A) ("any property
with respect to which financial transactions are prohibited
or regulated" (emphasis added) ). See also
Calderon-Cardona, 770 F.3d at 1000 ("Whether
attachment of [ ] EFTs under § 1610(g) is possible turns
... on whether the blocked EFTs at issue are 'property of'
[a foreign state or its agency or instrumentality].").
[ll [2lOwnership of property is generally a question of state
law. In Calderon-Cardona, we noted that "Congress has
not defined the type of property interests that may be
subject to attachment under FSIA § 1610(g)." Id. at 1001;
see also Hausler, 770 F.3d at 211 (observing the same
with regard to TRIA § 201(a) ). Absent a federal
definition of "property" in either FSIA or TRIA, we apply
the "general rule in this Circuit that when Congress has
not created any new property rights, but 'merely attaches
consequences, federally defined, to rights created under
state law,' we must look to state law to define the 'rights
the [judgment debtor] has in the property the [creditor]
seeks to reach.' " Calderon-Cardona, 770 F.3d at 1001
(quoting Export-Import Bank v. Asia Pulp & Paper Co.,
609 F.3d 111, 117 (2d Cir. 2010) (brackets in original) ).
The relevant state law governing EFTs blocked by New
York banks is Article 4 of the New York Uniform
Commercial Code ("N.Y. UCC"). See N.Y. UCC § 4-A;
Asia Pulp, 609 F.3d at 118 (Article 4-A was "enacted to
provide a comprehensive body of law that defines the
rights and obligations that arise from wire transfers."
(internal quotation marks omitted) ).
The application of N.Y. UCC Article 4 to EFTs has
received extensive consideration in this Circuit. In
Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd.,
585 F.3d 58 (2d Cir. 2009), we determined that under
New York law "EFTs are neither the property of the
originator nor the beneficiary while briefly in the
possession of an intermediary bank." Id. at 71.
Subsequently, both Calderon-Cardona and Hausler
addressed this issue with particular clarity. In
Calderon-Cardona, we observed that "under the N.Y.
UCC's statutory scheme, the only entity with a property
interest in an EFT while it is midstream is the entity
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Levin v. JPMorgan Chase Bank, N.A., 751 Fed.Appx. 143 (2018)
immediately preceding the bank 'holding' the EFT in the
transaction chain." Therefore, Calderon-Cardona held:
"[A]n EFT blocked midstream is 'property of a foreign
state' or 'the property *148 of an agency or
instrumentality of such a state,' subject to attachment
under 28 U.S.C. § 1610(g), only where either the state
itself or an agency or instrumentality thereof (such as a
state-owned financial institution) transmitted the EFT
directly to the bank where the EFT is held pursuant to
the block."
Calderon-Cardona, 770 F.3d at 1002 (emphasis added).
Hausler then further extended Calderon-Cardona's
holding to the TRIA context. In Hausler, we held that "in
order for an EFT to be a 'blocked asset of' Cuba under
TRIA § 20l(a), either Cuba 'itself or an agency or
instrumentality thereof (such as a state-owned financial
institution) [must have] transmitted the EFT directly to
the bank where the EFT is held pursuant to the block."
Hausler, 770 F.3d at 212 (quoting Calderon-Cardona,
770 F.3d at 1002) (emphasis added) (brackets in original).
The Saderat Account falls squarely within the holding of
these cases. Here, as in Hausler, "it is undisputed that no
[terrorist entity] transmitted any of the blocked EFTs in
this case directly to a blocking bank." Id. Instead, the
Saderat Account funds were transmitted directly to
JPMCB by Lloyds Bank. The Levins nowhere assert that
Lloyds constitutes an "agency or instrumentality" of Iran.
Because the EFT was not transferred directly to JPMCB
by a foreign state or an agency or instrumentality of a
foreign state, it was not "property of' a foreign state or an
agency or instrumentality of such a state, and thus not
attachable under FSIA or TRIA.
On appeal, the Levins principally contend that ownership
of the Saderat Account at the time of blocking is a
disputed question of fact and that the district court should
have allowed supplementation of their complaint in order
to proceed to discovery on that question. We disagree.
New York's law of property-as applied to the context of
EFTs blocked pursuant to OFAC sanctions-has been
established by Calderon-Cardona and Hausler. Under
those cases, ownership of an EFT blocked by a New York
bank depends entirely on the identity of the immediate
transferor to that bank. See Calderon-Cardona, 770 F.3d
at 1002 (permitting attachment "only where either the
state itself or an agency or instrumentality thereof ...
transmitted the EFT directly to the bank where the EFT is
held pursuant to the block") (emphasis added); Hausler,
770 F.3d at 212 (same). In this case, the identity of the
immediate transferor-Lloyds Bank-is undisputed.
Since neither party contends that Lloyds Bank is an
agency or instrumentality of Iran itself, the EFT is not
attachable.
[3lNor can we diverge from that result based on the
Levins' purported distinction between the "intermediary
bank" at issue in Calderon-Cardona and Hausler and the
"correspondent bank" relationship at issue here. To begin
with, many authorities apparently consider these
categories indistinct. See, e.g., Sec. & Exch. Comm'n v.
Homa, 514 F.3d 661, 668 n.15 (7th Cir. 2008) ("A
correspondent bank is an intermediary bank that a primary
bank uses to facilitate currency transactions in the country
in which the intermediary bank is located."). More
importantly, however, our precedents interpreting N.Y.
UCC Article 4 render the asserted distinction irrelevant.
As the district court properly held, the purported
distinction between correspondent and intermediary banks
"is a distinction without a difference, at least as it relates
to the Second Circuit's rule in Hausler." Levin, 2017 WL
4863094, at *4. Regardless of the particular relationship
between the immediate transferor of the funds and the
entity that held title to those funds at the beginning of the
transaction, the ownership of blocked EFT *149 funds is
clearly assigned by Calderon-Cardona and Hausler.
"[E]ven where an EFT is transferred to a blocking bank
by a 'correspondent bank,' the transferred asset is
considered the 'sole property' of the correspondent bank,
rather than the 'principal' bank (i.e., Bank Saderat)." Id.
(citing Doe v. Ejercito De Liberacion Nacional, No. 15
Civ. 8652-LTS, 2017 WL 591193, at *1-3 (S.D.N.Y. Feb.
14, 2017), aff'd, 899 F.3d 152 (2d Cir. 2018) ).
Finally, we note that our circuit's recent opinion in Doe v.
JPMorgan Chase Bank, N.A., 899 F.3d 152 (2d Cir.
2018), further bolsters our conclusion that the funds
blocked by JPMCB are not attachable. In Doe, a terrorist
entity, Tajco Ltd. ("Tajco"), originated an EFT that
flowed to an intermediary bank, AHLI United Bank UK
PLC ("AHLI"), which then transmitted the funds to
JPMCB, which then blocked the funds. Id. at 155. That
sequence of events is highly analogous to the one at issue
here, with Tajco taking the place of Iran, AHLI taking the
place of Lloyds, and JPMCB playing the same role. Doe
applied Calderon-Cardona and Hausler in upholding the
district court's ruling that the funds were not attachable.
See id. at 157 ("[O]ur decisions in Calderon-Cardona and
Hausler compel the conclusion that neither Grand Stores
nor Tajco has any attachable property interest in the
blocked funds at JPMorgan since they were not the
entities that directly passed the EFTs to JPMorgan."). We
do the same.
***
We have considered the Levins' remaining arguments and
find them to be without merit. Accordingly, we AFFIRM
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Annex 350
Levin v. JPMorgan Chase Bank, N.A., 751 Fed.Appx. 143 (2018)
the judgment of the district court. 751 Fed.Appx. 143
All Citations
Footnotes
t The Clerk of Court is respectfully instructed to amend the caption as set forth above.
Chief Judge Geoffrey W. Crawford, of the United States District Court for the District of Vermont, sitting by designation.
Section 1605(a)(7) has since been repealed and replaced. Pub. L. No. 110-181 , Div. A., § 1083(b)(1 )(A)(iii), 122 Stat.
341 (2008). The new provision, 28 U.S.C. § 1605A, now provides an exception to the general immunity from suit of
foreign governments where "the foreign state [has been] designated as a state sponsor of terrorism" by the U.S.
Department of State. § 1605A(a)(2)(A)(i)(I).
2 Section 201 (a) of the TRIA provides:
Notwithstanding 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, or for which a
terrorist party is not immune under section 1605(a)(7) of title 28, United States Code, 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, Pub. L. No. 107-297, 116 Stat. 2322 (2002) (reprinted following 28 U.S.C. § 1610).
3 Section 1610 of FSIA provides, in pertinent part:
(f)(1 )(A) Notwithstanding any other provision of law ... any property with respect to which financial transactions are
prohibited or regulated pursuant to section 5(b) of the Trading with the Enemy Act (50 U.S.C. App. 5(b) ), section
620(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2370(a) ), sections 202 and 203 of the International
Emergency Economic Powers Act (50 U.S.C. 1701 -1702), or any other proclamation, order, regulation, or license
issued pursuant thereto, shall be subject to execution or attachment in aid of execution of any judgment relating to a
claim for which a foreign state (including any agency or instrumentality of such state) claiming such property is not
immune under section 1605(a)(7) (as in effect before the enactment of section 1605A) or section 1605A.
[ (g)(1) ] Subject to paragraph (3), the property of a foreign state against which a judgment is entered under section
1605A, and the property of an agency or instrumentality of such a state, including property that is a separate juridical
entity or is an interest held directly or indirectly in a separate juridical entity, is subject to attachment in aid of
execution, and execution, upon that judgment as provided in this section ....
28 U.S.C. § 1610.
4 Both parties agree, for the purposes of this appeal, that Saderat qualifies as an "agency or instrumentality" of Iran.
End of Document © 2021 Thomson Reuters. No claim to original U.S. Government
Works.
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