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Making International Law Domestic? Changes and Challenges

November 30, 2017

Since 1976, private citizens have been barred from introducing private lawsuits against foreign nations under the Foreign Sovereign Immunities Act (FSIA). This law has been the basis for United States’ domestic legal engagement with other countries for decades, and has undergone significant revisions since its inception. Actions taken by the legislative branch over the past few decades have drastically changed the original FSIA and introduced new challenges regarding implementation and potential ramifications against the United States in legal systems abroad. This article explores how a recent amendment to the FSIA known as the Justice Against Sponsors of Terror Act (JASTA), as well as prior revisions, represent a significant reduction in the sovereign immunity laid out in FSIA, as well as a public policy and diplomatic challenge for the United States moving forward.

The Precedent of Suing a State

While FSIA began as an immunity for foreign states, the law has several exemptions. [1] These exemptions include when the state waives their immunity, commercial disputes, and torts. That list of exceptions grew, however, following the case of Stephen Flatow and his daughter Alisa. On April 9, 1995, Alisa, an American college student spending a semester studying in Israel, was killed in an explosion when the bus in which she was traveling collided with a van laden with explosives. The US Department of State later concluded that a group known as the Palestine Islamic Jihad (PIJ) committed the bombing, and determined that PIJ had received material support and resources from the Islamic Republic of Iran. Following this, Flatow lobbied congress to amend the FSIA to allow U.S. victims of terror to litigate against the responsible states. This so-called “Flatow Amendment,” passed by Congress in 1996, says, “A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case not otherwise covered by this chapter in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act.”[2] Following its passage, Flatow brought his suit for damages against Iran in Flatow v. Islamic Republic of Iran (1998), and a federal court subsequently found Iran responsible and ordered the country to pay over $24 million to Flatow and his family, along with $225 million in punitive damages.[3] This marked the first time ever that a court had compelled a foreign state to pay punitive damages with the express goal of punishing the nation for support of terrorist groups. In particular, the court noted that the punitive damages functioned as both a direct deterrent against support of terrorist activities and as a disabling mechanism, which curtailed the state’s financial capacity to provide funding to terrorist groups. Iran did not recognize the court ruling, and in fact had been absent at all hearings. The Flatow case is notable for setting precedent for numerous future terror injury related suits, including Eisenfeld v. Iran (2000) with damages awarded over $300 million [4], Jenco v. Iran (2001) at $310 million, Gates v. Syria (2008) at $412 million, and Owens v. Sudan (2017) at $5.9 billion [5][6][7].

Justice Against Sponsors of Terrorism Act: Differences and Debate

Three years after the ruling in favor of Flatow, the terrorist attacks of 9/11 occurred. In the aftermath of 9/11, the House and Senate Intelligence Committees determined that the perpetrators, the Al-Qaeda terrorist organization, had several links to the government of Saudi Arabia [8][9]. According to those impacted by the attack, clandestine Saudi support for the attack was not only condemnable, but also potentially illegal and a rightful cause for judicial remedy under the modified FSIA. However, the Flatow amendment to FSIA only authorized suits brought against countries which the U.S. State Department had designated “state sponsors of terrorism.” Iran, Sudan, and Syria were assigned this appellation, while Saudi Arabia was not included as a state sponsor of terrorism [10]. This changed with another amendment to the FSIA in September of 2015 by Senator John Cornyn (R-TX). The so-called “Justice Against Sponsors of Terrorism Act” sought to expand the liability rules under FSIA to allow cases to be brought against nations not already designated as state sponsors of terrorism. The Act passed through both the House and Senate, over the veto of President Obama. Soon after the passage of the law, numerous suits were launched against the Saudi Kingdom with the total consolidated complaints numbering approximately 9,000 plaintiffs [11] [12].

(Image: Terror Attacks Attributed to al-Qaeda Source: Wikimedia Commons)(Image: Terror Attacks Attributed to al-Qaeda Source: Wikimedia Commons)

Moving Forward: Problems, Politics, and Policy

Diplomats and legal scholars have expressed fears regarding JASTA and its potential ramifications. The most recurring complaint is that JASTA disrupts enduring international principles regarding sovereign immunity, applying precedents that could have grave implications for U.S. national interests [13]. This was one of the major reasons behind President Obama’s attempted veto [14]. The United States has the largest international military presence in the world, and sovereign immunity principles and norms protect the U.S., its Armed Forces, military contractors, American assets held in banks abroad, and officials, from foreign court proceedings.[15] As legal scholar John Bellinger III notes, “Iran and Cuba have already passed legislation removing U.S. sovereign immunity in their courts in response to U.S. legislation that allowed large judgments against them in U.S. courts. The U.S. has been sued in both countries and faces billions of dollars in default judgments as a result.”[16] The U.S. Supreme Court has previously noted that a major tenet of foreign sovereign immunity is based on this principle of “reciprocal self-interest”. [17] As the United States reduces the legal protections it provides to other nations, it exposes itself to equivalent reductions in its own immunity abroad.[18] Curtis Bradley and Jack Goldsmith, law professors at Duke and Harvard respectively, note, “It is easy to imagine the United States being sued abroad as a result of the military and other foreign aid it gives to many nations”. A great deal of behavior traceable to American financial and material support — for example, aid to Israel that is said to result in displacements or killings in the West Bank, or to United States-backed rebels who are accused of attacking civilians in Syria — might result in a lawsuit abroad for aiding and abetting terrorism.”[19] Another risk of allowing judgements against foreign governments is the economic retaliation foreign states could impose against the United States. Foreign governments own several trillion dollars’ worth of assets in the United States, and these entities would rather auction their assets rather than allow them to be seized by federal courts. For example, Saudi Arabia’s foreign minister, Adel al-Jubeir, threatened to sell $750 billion in treasury securities and other assets in the U.S. before they were frozen by U.S. courts.[20] Such a mass exodus of foreign capital would be injurious to the American economy and destabilizing for financial security.

Therefore, the enduring principles that protect United States personnel, forces, and assets are threatened by revoking sovereign immunity for foreign governments that are not designated as state sponsors of terrorism. 

How should the United States proceed in balancing the interests of American plaintiffs and maintaining diplomatic standing abroad, including the preservation of external assets and personnel? One option is to prevent plaintiffs from collecting on foreign owned assets within the United States. This was the original decision endorsed by the Clinton administration following the original settlement of the Flatow v. Iran (1998). Whenever Flatow attempted to seize any Iranian assets on U.S. soil, the White House intervened and prevented the transaction. The legislative branch also has options on how to respond to specific cases against Saudi Arabia. Congress could seek to provide financial compensation directly to the families or investigate possible Saudi entanglement in the attack. 

It remains to be seen how President Trump, or Congress, will handle the lawsuits against Saudi Arabia and other nations once the courts finish initial litigation. During the campaign, Trump supported the passage of JASTA but has not commented since on how the United States would enforce any verdict convicting Saudi Arabia of supporting terrorism. A bilateral diplomatic solution with Saudi Arabia could be pursued by placing a stay on the cases against Saudi Arabia. FSIA allows for the Secretary of State to apply for a stay of judgement, so long as good faith discussions on resolving the claims against the foreign state are concurrent.[21] This approach could allow Trump to reach a solution with Saudi Arabia outside of judicially mandated reparations and punitive damages. Meanwhile Congress has shown signs of wanting to revisit JASTA. Several Republican and Democratic senators have expressed regret over the speed at which JASTA was passed and are open to its revision.[22] But with numerous significant legislative hurdles ahead such as tax reform, passing the budget, and immigration reform, it is unclear when, and in what way, the issue will be addressed.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

  [1] 28 U.S.C. § 1605(a)(1)

  [2] 28 U.S.C. § 1605A(a)(1)

  [3] https://law.justia.com/cases/federal/district-courts/FSupp/999/1/2267352/

  [4] http://www.perleslaw.com/wp-content/files_mf/1443482848Eisenfeldv.IslamicRepublicofIran_172F.Supp.2d1.PDF

  [5] https://www.courtlistener.com/opinion/2429487/jenco-v-islamic-republic-of-iran/

  [6] https://www.cadc.uscourts.gov/internet/opinions.nsf/470A2903C2D916E785257896004E09C4/$file/08-7118-1308962.pdf

  [7] https://law.justia.com/cases/federal/appellate-courts/cadc/14-5105/14-5105-2017-07-28.html

  [8] http://govinfo.library.unt.edu/911/report/911Report.pdf

  [9] https://intelligence.house.gov/uploadedfiles/declasspart4.pdf

  [10] https://www.state.gov/j/ct/list/c14151.html

  [11] https://www.nytimes.com/2016/09/30/us/saudi-arabia-9-11-legal-battle.html

  [12] https://static1.squarespace.com/static/57fbbfa88419c2de35c1639d/t/58d03556ff7c50abde86720f/1490040171270/Ashton-v-KSA-2017.pdf

  [13] http://studies.aljazeera.net/en/reports/2016/12/jasta-asset-liability-america-161228101858709.html

  [14]https://obamawhitehouse.archives.gov/the-press-office/2016/09/23/veto-message-president-s2040

  [15] https://www.justsecurity.org/30633/911-civil-litigation-justice-sponsors-terrorism-act-jasta/

  [16] https://www.judiciary.senate.gov/imo/media/doc/07-14-10%20Bellinger%20Testimony.pdf

  [17] https://supreme.justia.com/cases/federal/us/348/356/

  [18] https://www.lawfareblog.com/new-jasta-still-harmful-congressional-shirking

  [19] https://www.nytimes.com/2016/04/22/opinion/dont-let-americans-sue-saudi-arabia.html?action=click&pgtype=Homepage&clickSource=story-heading&module=opinion-c-col-right-region&region=opinion-c-col-right-region&WT.nav=opinion-c-col-right-region&_r=0&mtrref=www.nytimes.com&assetType=opinion

  [20] https://www.nytimes.com/2016/04/16/world/middleeast/saudi-arabia-warns-ofeconomic-fallout-if-congress-passes-9-11-bill.html?_r=0

  [21] Pub. L. 114–222, § 5(c)(1)

  [22] https://www.washingtonpost.com/news/powerpost/wp/2016/09/29/republican-leaders-say-911-measure-may-need-to-be-revisited-after-elections/?utm_term=.4eb6ab503c97

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