On April 20, 2016, the Supreme Court of the United States, in Bank Markazi v. Peterson, 136 S.Ct. 1310 (2016), determined that Congress had the authority to enact a law specifically designating a set of assets to be available to satisfy judgments for existing cases enumerated by case number. This decision expands the need for effective advocacy to include lobbying Congress for relief as to the revision of existing law as applied to existing cases.
The fundamental legal issue that was presented in Bank Markazi was whether Congressional legislation that established what assets may or may not be available to satisfy specific existing judgments wrongfully interfered with the independence of the judiciary as required under Article 3 of the Constitution, and its ancient right to declare what the law is in particular cases, as established in Marbury v. Madison, 5 U.S. 137 (1803). The Supreme Court concluded that while Article 3 barred Congress from telling a court how to apply preexisting law to a particular case, Congress could amend preexisting law to provide new legal standards and make the amended law retroactively applicable to pending cases. Further, the Supreme Court reasoned that the amended statute was not designed to compel ruling in a single pending case, which would be prohibited. In light of this holding, Congress is free to change the law and set a new legal standards applicable retroactively to a small class of existing cases. However, the line between what is prohibited and what is not prohibited is very thin.
It is not unusual to see the use of a legislative solution to repair a problem in the enforcement of existing law, even applied retroactively, particularly in the area of international relations. For example, the Court of Appeals for the District of Colombia Circuit, in Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024 (D.C. Cir. 2004), ruled that while the terrorism exception to the Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(7), provided jurisdiction over state sponsors of terrorism for acts of terrorism, it did not create a cause of action.
That decision left courts and litigants scrambling to determine what law would apply to any given claim and who could have standing. To fill this gap, a number of courts began to use the laws of the domicile of the deceased victim of terrorism as the proxy for what law should be applied to acts of terrorism that occurred within foreign countries. Further, where family members were seeking recovery for pain and suffering, they would do so under the common law causes of action for intentional affliction of emotional distress in the decedents’ home state, ignoring the fact that for a number of claimants such causes of action could not be established.
To avoid the continuing confusion that arose from the applicability of a variety of state law doctrines in the context of an act of state sponsored terrorism occurring outside of the United, in 2008, Congress amended the Foreign Sovereign Immunities Act to create a new cause of action for damages available to victims of terrorism, 28 U.S.C. § 1605A, which was given retroactive application. Significantly, family members including those persons not typically included within the ambit of a traditional wrongful death action, were included. For example, victims including siblings and non-supported parents of adult children now had claims.
The importance of this newest decision reflects how narrow that legislative repair can be. Specifically, in the Bank Markazi case, the issue applied to 16 separate lawsuits and was targeted to permit seizure of Iranian bank accounts of $1.8 billion deposited by Bank Markazi in the United States when it was acting as the central bank of Iran. On past occasions, Congress has acted similarly in order to provide very specific relief for specific cases. For example, as Senator Connie Mack was departing the U.S. Senate, he introduced and worked to pass a bill that specifically provided that a limited number of cases identified expressly by case number, which had already gone to judgment, could be satisfied from the United States’ funds and then be immediately reimbursed from frozen assets within the United States of state sponsors of terrorism. That bill was not attacked by the state sponsors of terrorism to which it applied. Following the Bank Markazi decision, it is now clear that this type of legislative remedy is a real avenue of relief for preexisting cases.
When embarking on litigation involving matters of international law, including claims against sovereigns under the Foreign Sovereign Immunities Act, a practitioner should consider pursuing a legislative solution for judgment collection as a viable and achievable avenue of relief. Following the path authorized in Bank Markazi, efforts undertaken to amend existing laws to achieve such objectives should be deemed consistent with policy of existing law, clearing the way for resolutions that might be otherwise foreclosed by precedent.
Andrew C. Hall is the founder and managing partner of Hall, Lamb and Hall, P.A., a Miami-based law firm specializing in complex corporate, business, and securities litigation. The firm can be contacted at 2665 S. Bayshore Dr., PH 1 Miami, FL 33133 (305) 374-5030,