Iran Spared From Paying $2.6 Billion Over Terror Bomb

A federal appeals panel ruled that families of 241 soldiers killed in the 1983 U.S. Marine barracks bombing in Beirut can’t collect their portion of a $2.6 billion court judgment by diverting Iran’s rights to payment from a French shipping company.

In 2007, a federal judge in Washington ordered Iran to pay the $2.6 billion, one of the largest awards against any country, in part to deter terrorists and to help survivors cope. Iranian officials didn’t appear in court to contest the case and Iran has ignored similar orders.

The families began attempts to collect the money by submitting 15 motions in federal court in San Francisco, each naming a different shipping company that allegedly owed payments to Iran. The families aimed to win orders that the companies must divert payments to cover the judgment.

While Iran didn’t try to challenge the claims, U.S. District Judge Jeffrey White raised the issue of Iran’s foreign sovereign immunity rights from such claims and ultimately refused to order the diversion of the payments. The U.S. Court of Appeals in San Francisco upheld that decision today in a 2-1 ruling.

“It is the plaintiff’s burden to prove that an exception to immunity applies if it is readily apparent that the property at issue belongs to a foreign state” the appeals court said.

Peter Buscemi, attorney for French shipper CMA CGM SA, the company whose payments to Iran were at issue in today’s case, didn’t immediately respond to a phone call seeking comment.

“As a result of the ruling, our recourse against the shipping company is at an impasse,” said David Cook, attorney for the families.

Cook said he will consider both legal appeals and legislative reforms.

“The message to multinationals who deal with Iran is that the victims of state-sponsored terrorism will continue to seek recompense,” he said. “We are free to proceed against other assets of Iran in the United States, or can repatriate it from other jurisdictions outside the U.S.”

Enforcement efforts continue elsewhere, including proceedings against ancient Iranian Cuniform tablets held by the University of Chicago, he said.

U.S. Justice Department spokesman Charles Miller declined to comment on the case. Iran didn’t enter the case as a party.

The case is Peterson v. Islamic Republic of Iran, 08-17756, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

To contact the reporter on this story: Pamela A. MacLean at pmaclean@pacbell.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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