US appeals court: Terror victims can seize $9.4 million of Iran funds

“Iran needs to understand that these court judgments have not been canceled and that the terror victims will continue to pursue them in legal forums all over the world," attorney says."

Thousand of Basij soldiers stage mock seige of Temple Mount in Iran (photo credit: FARS)
Thousand of Basij soldiers stage mock seige of Temple Mount in Iran
(photo credit: FARS)
Victims of a 1997 triple suicide bombing in Jerusalem have won a major US appeals court judgment involving an award of $9.4 million in damages.
The Ninth Circuit Appellate Court, which handles appeals from California court decisions, handed down the judgment on Friday in favor of a group of victims represented by Shurat Hadin’s Nitsana Darshan-Leitner in Israel, and by David Strachman of Rhode Island as US counsel.
The attack in question took place on September 4, 1997, when three terrorists set off explosives attached to their bodies as they wandered into the packed Ben-Yehuda pedestrian mall in the middle of the afternoon, killing five Israelis and wounding scores more. Three of those killed were 14-year-old girls.
In 2001, Shurat Hadin helped the American families of those wounded in the attacks to begin legal proceedings against Iran due to its sponsorship of Hamas, which claimed credit for the attack.
In 2013, a lower federal court entered a $9.4m. judgment lien in favor of the families – the first time such victims had found Iranian assets in the US that could actually be transferred to them. The award stemmed from years of interest and fees on top of a $2.8m. base judgment.
Iran appealed that decision to the Ninth Circuit Appellate Court.
In January, the US Supreme Court heard the so-called Peterson case, in which the bet is that a wider group of American victims of Iranian- linked terrorism will receive $2 billion in Iranian funds. This means the race is on as to which group will collect against Iran first.
With Iran vowing to appeal Friday’s judgment to the Supreme Court, the other case is likely to culminate first – unless the court denies Iran’s right to appeal.
Shurat Hadin also represents victims in the Peterson case.
“This is a historic court ruling against Iran. While governments around the world, including the Obama administration, are falling over themselves trying to throw money at the outlaw regime in Tehran, these families of the victims are still fighting to bankrupt this state sponsor of terrorism,” Darshan-Leitner said.
“The Islamic Republic needs to understand that these court judgments have not been canceled, and that the terrorism victims will continue to pursue them in legal forums all over the world. They don’t forgive and they aren’t going to forget either,” she said.
The Iranian money that Shurat Hadin managed to seek out is a story in itself.
The original purpose of the funds was a judgment in favor of Iran (through proxies) against Cubic Defense Systems, a US company that had contracts with pre-revolutionary Iran to sell it air combat maneuvering range systems.
Tehran had already paid it $12m. when the 1979 Islamic Revolution broke out, cutting off US-Iran relations and scuttling implementation of the deal.
In the 1990s, Iran and Cubic engaged in international arbitration over the deal, allowing Cubic to sell the equipment to another country but eventually requiring it to repay $2.8m.
plus a much larger amount of interest to Iran.
In 2003, the daughter of former Iranian prime minister Shapour Bakhtiar filed a lien on the repayment in light of a judgment she had obtained against the country, and the Shurat Hadin plaintiffs did the same.
Iran claimed sovereign immunity, but Shurat Hadin was able to beat that defense by using recent legislation by Congress that waived any claim of sovereign immunity in certain cases involving international terrorism.
Previous agreements and presidential orders between the US and Iran regarding assets in dispute due to the 1979 revolution prevented victims of terrorism from seizing such assets, but here, the court determined that Iran’s rights to a judgment against Cubic did not really exist until 1998 – pushing away the usual obstacles.
The win was also noteworthy in that it could be seen as flying in the face of the US-Iran rapprochement since the nuclear weapons deal struck on July 14.