MINISTRY OF DEFENSE OF IRAN v. ELAHI
In 1977, the Iranian Ministry of Defense entered into an agreement with an American defense contractor for the purchase of military equipment to be used by the Iranian Air Force. After the Iranian Revolution of 1979, the American company breached its contract with Iran and sold the equipment elsewhere. Iran requested arbitration before the International Chamber of Commerce (ICC) and received $2.8 million in damages for breach of contract. Iran then reduced the award to a judgment in the U.S. District Court for the Southern District of California.
Dariush Elahi, brought a wrongful death claim against the Iranian government alleging that Iranian agents had assassinated his brother in Paris in 1990. Elahi was awarded over $300 million in damages by the U.S. District Court for the District of Columbia. He attempted to satisfy this judgment in part by attaching the damages Iran had recovered from the previous contract dispute. Iran argued that the previous recovery was immune from attachment. The U.S. District Court for the Southern District of California held that Iran had waived its immunity from attachment by submitting to the jurisdiction of the ICC and the district court in its prior contract dispute.
The U.S. Court of Appeals for the Ninth Circuit agreed with the district court's ruling but on different grounds. The court held that Elahi could attach the Iranian judgment under Section 201(a) of the Terrorism Risk Insurance Act of 2002, which allows creditors such as Elahi to attach "the blocked assets of [a] terrorist party." Eschewing the jurisdiction argument relied on by the district court, the Ninth Circuit characterized Iran as a "terrorist party" and held that the contract judgment was a "blocked asset" subject to attachment.
Does the Terrorism Risk Insurance Act of 2002 allow a judgment creditor in a wrongful death action against the Iranian government to attach damages recovered by Iran in an unrelated contract dispute as the "blocked assets of [a] terrorist party?"
Legal provision: Terrorism Risk Insurance Act and Victims Protection Act
Not answered. With Justice Stephen G. Breyer writing for the majority and joined by Chief Justice Roberts, and Justices John Paul Stevens, Antonin G. Scalia, Clarence Thomas, and Samuel A. Alito, the Supreme Court held that the assets in question in Mr. Elahi's case were not "blocked" under the Terrorism Risk Insurance Act of 2002 at the time of the Ninth Circuit's decision and therefore could not be attached to satisfy his judgment against Iran. The Court then declined to determine whether a 2005 Executive Order issued by the President blocked the assets, holding that Mr. Elahi had waived his rights to attach. The Court reasoned that when Mr. Elahi accepted payment under a federal statute that offered compensation for those "holding terrorism related judgments against Iran", he relinquished his right to attach those assets.
Justice Anthony M. Kennedy concurred in part and dissented in part, and was joined by Justices David H. Souter and Ruth Bader Ginsburg. He agreed that the assets in question were not "blocked" at the time of the Ninth Circuit's decision. However, he disagreed that Mr. Elahi had waived his right to attach those assets. He reasoned that the majority departed from the "plain meaning" and "purpose" of the federal statute that awarded compensation to Mr. Elahi when it inhibited his ability to collect the award granted him against Iran for the murder of his brother.
ORAL ARGUMENT OF DAVID J. BEDERMAN ON BEHALF OF THE PETITIONER
Chief Justice Roberts: We will hear argument next in Case 07-615, Ministry of Defense and Support For the Armed Forces of the Islamic Republic of Iran versus Elahi.
Mr. Bederman: Mr. Chief Justice, good morning and may it please the Court: At the heart of this appeal is a matter of statutory construction.
Respondent received $2.3 million in public funds under the Victims Protection and Terrorism Risk Insurance Act.
TRIA provides, and this is at the blue brief, page 11a, that a party electing to receive such funds must relinquish rights with respect to enforcement against property that is at issue in claims against the United States before an international tribunal or that is the subject of awards by such tribunal.
The property in question here is the Cubic judgment.
Respondent renounced rights to attach the Cubic judgment because in case B/61 before the Iran-United States Claims Tribunal at the Hague the United States has demanded that any awards Iran receives in its claim against the United States be set off by the amount of the Cubic judgment.
This can only occur if the Cubic judgment is released from Respondent's lien and is remitted to Iran's Ministry of Defense.
Chief Justice Roberts: Well, they could have agreed that they have a bank account somewhere and any amounts would be set off by that.
That wouldn't make that bank account at issue with respect to their claim.
Mr. Bederman: No, in that scenario I agree with you, Mr. Chief Justice, that that would not be implicated, because I think the clear import of the statutory language here that Congress is trying to achieve is that being at issue -- as you'll notice, the statutory provision in 201(c) is disjunctive.
It refers to claims against the United States -- at issue in claims against the United States before an international tribunal, or that is the subject of an award.
So I think the disjunctive character of the statute might indicate that the at-issue prong includes a broader set of property than would be indicated possibly by the "subject of an award".
Chief Justice Roberts: So it doesn't matter that Iran recognizes that this would be used to set off a judgment it might obtain, because you just said, well they could -- a bank account could be used to set it off and that's not sufficient.
Mr. Bederman: Well, the mutual -- let me be clear.
The mutual position of Iran and the United States before the Claims Tribunal is that the Cubic judgment, because it's related to a claim within the tribunal's jurisdiction -- and I think that's a key limiting principle here.
The United States would not be entitled to set off amounts in bank accounts that are attributable to other parties or other aspects that are not implicated in claims or defenses before the tribunal.
So clearly an examination of the tribunal's jurisdiction and the relevant claims or defenses that are before the tribunal is relevant here.
Petitioner is not espousing a position before this Court that any inchoate property located anywhere in the world would be blanketed with immunity under this provision.
It's not necessary to reach that conclusion in order to find for Petitioner here.
Justice Ginsburg: The United States at some stage told the tribunal in The Hague that the Cubic judgment -- and now I'm quoting --
"has nothing to do with matters before the international tribunal. "
"Nothing to do with".
Mr. Bederman: Yes, that is the language used by the United States in a memorial before the tribunal.
The United States has also indicated, and this is clear in the gray brief at pages 81 in note 32 and the gray brief at pages 83 to 85, and in the lodgment, that if -- if Iran receives an award in case B/61 it must be offset or set off, or "recouped" is sometimes the language used in the correspondence between the two governments before the tribunal, by the amount of the Cubic judgment.
I won't speak for the United States position before the tribunal.
The United States is here to do that, of course, Justice Ginsburg.
But the only way I can interpret that remark is to indicate that obviously before the tribunal is the issue of the United States' obligations to Iran under the Algiers Accords.
The Cubic judgment deals, of course, with the private disposition of the contractual relationship between Iran's Ministry of Defense and the Cubic military contractor.
Now Respondents take the position that these two make the matters unrelated.
But if you review carefully the tribunal's jurisdiction as encompassing both claims and counterclaims, and according to the Algiers Accords in the claims settlement declaration, counterclaims include that which arises out of the same contract, transaction or occurrence that constitutes the subject matter of the claim.
Justice Ginsburg: There is no counterclaim stated before the tribunal as of this moment.
Mr. Bederman: I'm sorry, I didn't hear the first.
Justice Ginsburg: There is no counterclaim in the case before the tribunal.
Mr. Bederman: That's right.
The United States did not file a formal counterclaim in case B/61, but it has made a demand for a setoff.
And within the tribunal rules, a setoff can be the subject of notice under Rule 19-3 or an amendment or certainly comes under waiver of objection provision in Rule 30.
Justice Kennedy: I was going to ask that question.
In other words, there are cases or at least it is contemplated that there will be cases under the rules, where the Iran-U.S. Claims Tribunal does determine that there should or should not be an offset.
Mr. Bederman: There -- there certainly have been cases, if you are speaking of the tribunal's earlier jurisprudence in terms of offsetting claims.
Justice Kennedy: Yes.
Mr. Bederman: Yes, there has certainly been ample tribunal precedent which the United States has relied upon in making this demand for a setoff.
Justice Souter: But assuming -- assuming the tribunal takes up some such issue as Justice Kennedy has mentioned, it will start with the assumption that the Cubic judgment is in fact a valid judgment.
It will not look behind the Cubic judgment as such, will it?
Mr. Bederman: Of course, the validity of the Cubic judgment does remain on appeal when the Ninth Circuit--
Justice Souter: But that's an entirely separate proceeding.
Assuming the Cubic judgment has not been reversed through the appellate process that it is going through, then the tribunal will take the Cubic judgment as it finds it.
Mr. Bederman: --I would assume it would.
And I assume--
Justice Souter: Okay.
Doesn't it make it pretty tough to say that the Cubic judgment is at issue?
Mr. Bederman: --No, Justice Souter.
If -- if we understand Congress' -- I don't -- I think this matter can be resolved by a straightforward textual approach in looking at TRIA section 201(c).
Evidently, though, if we are looking at congressional intent here, it is to protect the United States' litigation position before the tribunal.
To allow the attachment of the Cubic judgment would simply be allowing Respondent to remove a source of money that would be available--
Justice Souter: I mean, I think we understand that.
And -- and it's clear that the United States, in effect, is taking the position that that's all we need to bear in mind.
But it suggests to me that the drafting of the statute did not go as far as it might have gone to protect the interests of the United States.
Mr. Bederman: --I won't speak, of course, for the United States' position.
The Petitioner's position is that where property has been identified to the tribunal as being related to a claim or defense within its jurisdiction, and the availability of that property affects the relief that can be granted by the tribunal, it is at issue.
Justice Ginsburg: Explain to me why it would effect the relief?
Because suppose Iran doesn't get the proceeds of the Cubic judgment, but instead a creditor of Iran, in this case Elahi, a creditor gets it.
It should still be -- you've paid the -- Iran's bill.
Iran owes money to X.
Why shouldn't the United States equally get the credit whether the Cubic judgment in the end is pocketed by Iran or by Iran's creditor, Elahi?
Mr. Bederman: Well, obviously we await the tribunal's award in this respect.
And I believe, based on the tribunal's past precedents, the benefit in terms of finding a breach of the Algiers Accords as it would or it must in this case to find in favor of Iran, would indicate that the benefits accruing for certain setoffs must ultimately come back to Iran in order to be credited in the way that you suggest.
I think it is an improper position to suggest that if a creditor of Iran or Iran's Ministry of Defense in this instance can claim or assert the lien so that somehow it's credited to Iran's account, so to speak, in calculating the setoff of the tribunal.
That has not been the tribunal's jurisprudence in terms of examining the implications of a breach by the United States under the Algiers Accords.
And in a number of cases--
Justice Ginsburg: Would you -- something that I would just like clarification on.
You mentioned that the Cubic judgment is on appeal to the Ninth Circuit.
It has been on appeal since June of '98?
Mr. Bederman: --Yes, ma'am.
Justice Ginsburg: And there are cross appeals.
What are the positions taken about that judgment by the respective sides, and why is it pending for ten years?
Mr. Bederman: That has been a mystery to me as well.
In fact, there has been a resolution by Cubic Defense Systems and Iran's Ministry of Defense and as soon as the Court renders its judgment in this case, that matter will finally move to disposition.
It is a bit odd that the underlying issue of Cubic's objections to the district court's enforcement of the International Chamber of Commerce or ICC arbitral award has pended for so long.
I would have thought, logically, it would have made more sense to have disposed of those issues and then allow the disposition of the liens to be resolved by the Court.
Essentially, it is Cubic's appeal challenging aspects of the district court's enforcement under the New York convention of the ICC arbitral award.
I think to the extent that there is a counterclaim it's simply that there were some bases for support of the judgment which Iran's Ministry of Defense would have put forward in addition to the district court.
That's what I understand in terms of the ruling of Judge Brewster originally in the district court on this matter.
So, yes, it is unfortunate that the underlying validity of the Cubic judgment still remains open as a matter of appeal.
But again to return to your point, Justice Ginsburg, in Cases 815 and 821 before the tribunal this question of what would be the implications, financial and otherwise, for the United States being found by the tribunal to be in breach of the Algiers Accords because of the failure of not allowing the export of Iranian property or repatriation of Iranian property to the United States has been explicated.
And, in fact, in already one instance the tribunal has found the United States to be in breach of Algiers Accords obligations.
So again, I can't speak for what a ruling in the tribunal would be.
All I can suggest is certainly the Iranian position before the tribunal would be that in the instance that if Mr. Elahi or any other lienor were successful in attaching the Cubic judgment that in such a situation it should not be credited as a setoff under these circumstances.
Justice Ginsburg: Could -- let's assume that the -- that Iran is able to execute on the Cubic judgment.
Could it take the proceeds out of the United States, given the 2007 blocking order?
Mr. Bederman: Well, I mean, the issue of the secretary of state's October 2007 designation, which I think is what you are referring to, is a late development in this case.
Of course, that occurred three months after the Ninth Circuit's amended opinion.
My submission to this Court is that the appropriate disposition, assuming the Court well takes Petitioner's position that Respondent has actually relinquished its claim under TRIA, is to remand back to the district court, because then we would have two new sets of lienors, Mr. Raffi and Mr. Rubin.
It would be before the district court that factual issues like whether the designation of the
"Ministry of Defense and Armed Forces Logistics. "
which is what is actually named in the blocking order, actually covers the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran, who is your Petitioner today.
The issue of whether designations cover particular entities or aliases of entities is an intensity factual one; the D.C. Circuit in the National Council of Resistance case, Chief Justice Roberts, an opinion you are well aware of at the D.C. Circuit.
These are intensely factual inquiries about whether aliases of particular organizations are covered by designations.
Justice Ginsburg: You mentioned -- you mentioned that there were other claimants or others -- others who would like to execute--
Mr. Bederman: Other lienors.
Justice Ginsburg: --other lienors -- other attachments.
And so, you said in the end -- well -- well, what would be the effect of those other liens?
Mr. Bederman: My understanding, Justice Ginsburg, is in both the cases of Mr. Rubin and Mr. Raffi, as far as I am aware, they have not made the relinquishment election under TRIA as Dr. Elahi has done here.
And because they have not made the relinquishment proviso, they would not be subject to the at-issue question that is now before the Court.
Iran's Ministry of Defense has other substantive defenses against their liens, which we appropriately presented before the district court.
The only submission I am making to this Court at this time is that it is not necessary for this Court exercising plenary authority to decide whether it's a blocked asset.
That is appropriate for remand because, notwithstanding the U.S. position, I think there are questions of whether your Petitioner is a covered entity under the -- under the designation, and whether in fact it is the beneficial owner, whether Iran's Air Force is the beneficial owner of this claim.
And there are other substantive defenses that claim retroactivity, as well.
So, again, I just don't think it's appropriate--
Justice Kennedy: But going back to the main issue, the only reason that this is at issue before the Iran tribunal is because it might be a setoff in the event of judgment in favor of Iran?
Mr. Bederman: --Yes.
Whether it is available for setoff.
And again, I want to be clear that--
Chief Justice Roberts: That's the -- that's the only basis for your argument?
I thought it was a broader suggestion that these are, to some extent, substitute assets for the assets that are at issue?
Mr. Bederman: --Well, I mean, that may be one useful analytic in thinking about this.
I was trying in imagining the interest of the Court in understanding the tribunal's jurisdiction under the Algiers Accords and what the tribunal has already ruled, and that's why I think respectful consideration might be appropriate here, inasmuch as the tribunal, in interpreting its jurisdiction under the Algiers Accords, which is essentially its organic instrument, has made a determination in Case B/66 that the substantive contracts at issue here between Cubic and the Iranian Air Force are at issue in case B/61.
Chief Justice Roberts: Can you -- can you articulate a general test in a sentence or two about how you decide whether particular assets are at issue?
Mr. Bederman: Yes.
I will repeat the one I -- I rendered before because I think it is the most useful analytic, and I -- I take no credit.
This is essentially Judge Fisher's analysis in the dissent below.
As he indicated, that -- that -- where property has been identified to the Tribunal -- and certainly the Cubic judgment and the proceedings that have occurred in the Federal district court in -- in Southern California and now the Ninth Circuit and now here have been identified to the Tribunal in mutual representations and undertakings by the parties.
Where this property has been identified to the Tribunal as being related to a claim or defense within the Tribunal's jurisdiction -- and I think that is the key limiting principle here.
That's -- there is a criticism that an expansive reading of TRIA's 2, paragraph 3.
And then the second prong is that the availability of that property affects the relief that can be granted by the Tribunal.
And, again, we are not hypothesizing here.
The Tribunal has already indicated in cases like Owens Corning, Futura Trading and Computer Services, that when you have a situation avoiding a double recovery, that a setoff derived from collateral proceedings, even absent privity of contract with the sovereign seeking adjustment and with respect to different causes of action, a setoff is still appropriate within the Tribunal.
So it's both an avoidance of a -- of a double-recovery rule and also a notion that a -- a certain offset is -- is related as within the -- the jurisdiction of the tribunal as arising again from the same contract transaction or occurrence.
Justice Souter: "At Issue" means related to -- "At Issue" means related to an issue in a separate case.
Mr. Bederman: I mean--
Justice Souter: That's what it boils down to, doesn't it?
Mr. Bederman: --Petitioner is not taking the same--
Justice Souter: Well, doesn't it?
Mr. Bederman: --No, Your Honor.
The Petitioner's position is slightly more modulated than the United States.
The United States' position here is all it has to be is relevant.
I -- I will leave it to the Court to -- to speak with the United States about that in a moment.
I think a more nuanced understanding of the Tribunal's jurisdiction is appropriate here.
Is -- and here there is no question, based on the materials that you have not only in the joint appendix but also in the lodgment, that the Cubic contracts have been identified to the Tribunal.
And now the Cubic judgment as an offset has a setoff -- or "recoupment" is sometimes the language used in the diplomatic exchanges and filings before the Tribunal -- has now been identified to the Tribunal.
Justice Breyer: Is it the case that there are two other individuals who have attached this judgment?
Mr. Bederman: Yes, Justice Breyer.
I think I spoke about that a moment ago.
That would be--
Justice Breyer: All right.
And is it the case that Iran's position in respect to those attachments is that those attachments, insofar as they are valid and executed, require a setoff from whatever we owe Iran or vice-versa?
Mr. Bederman: --My understanding, if you are speaking of me characterizing the United States' position--
Justice Breyer: No.
I'm saying I take it from something I have read in this that Iran believes that if, in fact, it won a judgment and that judgment is from someone like Cubic--
Mr. Bederman: --Yes.
Justice Breyer: --who they thought was prevented from delivering planes because of the embargo -- so it was relevant -- that that judgment, which they get if they collect on it, should be deducted from other money the United States owes them.
Mr. Bederman: Yes, and--
Justice Breyer: --unless instead of them getting it, the attacher gets it.
Mr. Bederman: --It's the--
Justice Breyer: The attachee gets it.
Mr. Bederman: --It's the "unless", I suppose, that, of course, Iran objects to.
It is that in order for the setoff to be effective within the Tribunal's jurisprudence and jurisdiction, Iran's Ministry of Defense or -- or the--
Justice Breyer: Has to get the money for the attaching person.
That's my point.
Mr. Bederman: --Yes, sir.
Justice Breyer: And so that is at issue before the -- and -- and it is at issue in those cases.
If the person who attaches it gets the money rather than Iran, Iran will say: We do not have to have a setoff.
Mr. Bederman: I agree.
If it's at issue--
Justice Breyer: Isn't that right or--
Mr. Bederman: --Correct.
If it's at--
Justice Breyer: --And that is the same question that you think would be presented through this attachment, is that right?
Mr. Bederman: --I thought that's what we were speaking of: The status of the Cubic judgment and -- and Dr. Elahi's attachment of the--
Justice Breyer: Dr. Elahi is one of several persons, is that right?
Mr. Bederman: --That is correct.
There is a queue of individuals who have lined up to -- to--
Justice Breyer: What I'm trying to get at is Iran's position vis-a-vis the Elahi judgment is the same as its position vis-a-vis the other two attachments on the Elahi judgment.
Mr. Bederman: --Yes, sir.
Justice Breyer: That if Iran ends up with the money, you can subtract it from other money the United States owes them.
But if the attaching people end up with the money, you cannot.
Mr. Bederman: So it's "At Issue" -- I am -- I am sorry for having been so opague.
It is "At Issue" in the sense of "joinder at issue", a legitimate disagreement between the parties.
And its also "At Issue", I believe -- I think in the sense that Congress intended by this provision of saying that the funds are available for a tribunal ruling.
And, therefore, to allow an attachment under these circumstances would frustrate the United States' litigation position.
So any way you parse what "At Issue" means--
Justice Breyer: You would take the same position if, in fact, this money which is owed to Iran by -- by Cubic -- that is, Cubic, which then Iran got a judgment on -- instead of a judgment in favor of Iran, Cubic had written them a check, and they had taken the check and bought a house in Manhattan, or they had put it in an Iranian bank account, and either Mr. Elahi or one of the other two people sought to attach the bank account or the house or the grocery store, which they might have also have used.
Am I right--
Mr. Bederman: --Yes.
Justice Breyer: --or wrong?
Mr. Bederman: Yes, Justice Breyer, you are correct.
There is a concern, which is a very natural concern, that the more attenuated you get, can you attribute a particular property, whether it's a bank account or a -- or a New York condo--
Justice Breyer: I don't see why either is the slightest a bit more attenuated.
In either case they are owned by the Ministry of Defense of Iran.
Mr. Bederman: --I would certainly concur; and, if I may, I will reserve the balance of my time.
Chief Justice Roberts: Thank you, Mr. Bederman.
ORAL ARGUMENT OF DOUGLAS HALLWARD-DRIEMEIER ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE
Mr. Hallward-Driemeier: Mr. Chief Justice, and may it please the Court: The United States does not appear here today in support of Iran, but, rather, in defense of critical interests of the United States before the United States -- Iran Claims Tribunal.
In particular, the holding of the Court of Appeals that the United States never unblocked Iranian military assets after the Algiers accords is directly contrary to the position of the United States before the Tribunal, and Iran immediately indicated that it would use that holding against the United States and in support of its multimillion-dollar--
Justice Ginsburg: But that's not saying that.
Isn't that -- that issue is moot?
Mr. Hallward-Driemeier: --Well, Your Honor, there is now a new and independent reason why the asset is blocked.
And, in fact, Respondent no longer defends the holding of the court of appeals on that basis.
It is, we wish to emphasize, essential that this Court vacate that holding and indicate that it is no longer legally valid so that it is not -- that erroneous holding is not used against us in support of Iran's two-million-dollar claim.
Justice Ginsburg: But if we -- if we took the position that you are expressing about what is at issue, we would never reach the second question.
Mr. Hallward-Driemeier: Well, we -- we think that the Court would not.
It would vacate the decision of the Court of Appeals.
It would be helpful certainly to the United States if the Court emphasized the natural fact that that would mean that the court of appeals' erroneous holding was not any longer legally--
Chief Justice Roberts: But it's not our job to help you -- it's not our job to help you in other tribunals.
If a -- if a judgment is moot, it's moot.
We are not going to go back and tell the Ninth Circuit to revise its opinion just because that's helpful to you.
Mr. Hallward-Driemeier: --No.
The -- the Court would vacate the decision, certainly.
Chief Justice Roberts: So is it your position that that -- that is moot?
Mr. Hallward-Driemeier: It is our position that the -- because Respondent has relinquished his right to attach these assets, the decision of the court of appeals should be vacated.
And that would have the affect of rendering inoperative that erroneous -- the other erroneous holding of the court of appeals with respect to blocked assets.
It is the position of the United States -- and we agree with Respondent on this point -- that as of now, because of the October, 2007, designation, the property of Petitioner is blocked and subject to attachment under TRIA.
And I don't believe there is any need for further proceedings on that.
The Secretary of State designated the Ministry of Defense of Iran, and the position of Petitioner in the court of appeals on remand from this Court was that it is the Ministry of Defense of Iran, a central core constituent part of the Iranian state, that is the entity that was designated.
Justice Ginsburg: Do I understand correctly that that means that because it's a blocked asset, then Dr. Elahi can get it, but Iran itself couldn't get it?
Mr. Hallward-Driemeier: Elahi, Respondent Elahi, could get it if he had not relinquished his rights to attach--
Justice Ginsburg: Yes.
Mr. Hallward-Driemeier: --assets at issue before the tribunal.
As of right now, the asset is blocked and Iran could not repatriate it, as of right now.
Of course, blocking orders can be amended, but as of right now it is frozen and Petitioner cannot repatriate it.
Chief Justice Roberts: So why isn't the consequence that you are so worried about under the Victims of Trafficking and Violence Protection Act that this is going to hurt your position by the tribunal, the same consequence that is going to come from the fact that these assets are blocked?
Mr. Hallward-Driemeier: Well, Your Honor, again, the blocking order is the present status of the assets.
It doesn't mean that they could not later be repatriated to Petitioner; whereas, execution by Respondent against the assets would mean that they would be forever denied to Petitioner.
Chief Justice Roberts: But--
Justice Ginsburg: So why wouldn't the United States get credit for that, too, on the theory that I suggested before?
Mr. Hallward-Driemeier: Well, you are right, Your Honor, that is the position of the United States.
And earlier Your Honor quoted language from the oral argument of the United States that the -- or maybe it was one of our briefs -- that the Cubic judgment is -- that the tribunal doesn't have to--
Justice Ginsburg: It has nothing to do with matters before the--
Mr. Hallward-Driemeier: --That is in the context of our saying that, whether or not -- in the view of the United States, whether or not Petitioner ever collects that money, the United States is entitled to an offset, and in fact, we believe it's a complete defense to Iran's claim.
Of course, Petitioner's argument -- or Iran's argument before the tribunal is that it is -- that the United States is entitled to a reduction of liability only if Iran actual receives the assets.
And that's why the language of the statute is written more broadly when the litigation before the tribunal is ongoing.
At that point any property that is at issue before the tribunal is not subject to attachment by one who has relinquished, and that's because this Court nor any other lower court in the United States is supposed to pre-judge the merits of those respective positions.
Iran's position -- and it's on page 85a of the United States' appendix -- is that the awarded amount, unless received by Iran, cannot be offset against any relief which the United States may be found to owe Iran.
So that is Iran's position.
That is at issue before the tribunal.
The Respondent would have the Court believe that the proceedings in the tribunal are in the nature of an in rem proceeding, that it's a property dispute.
They use that term repeatedly in the brief, "a property dispute".
But that is not the nature of the proceedings in the tribunal.
Iran has asserted a claim that the United States violated its obligations under the Algiers Accords.
The remedy it seeks is, and I quote -- this is from -- excuse me -- from the -- let's see -- the remedy they seek -- they seek is the value of the Cubic sale to Canada.
They have said that in the state -- in Iran's reply in statement -- claim 16 that Respondent relies upon, they say that the remedy they seek is not the asset itself.
Of course, the asset had been dissipated before Iran ever filed a statement of claim against the United States.
The remedy is the proceeds of that sale to Canada.
The proceeds of the sale to Canada, which are the subject of Iran's claim against the United States in the tribunal, have been reduced to judgment in the Cubic judgment.
Chief Justice Roberts: --I guess this may be the same question Justice Breyer asked.
I mean, where do you cut this off?
You've got the proceeds from the sale to Canada that presumably go to Cubic, and then Cubic, you know, builds a new facility somewhere with those proceeds and then sells it to somebody else.
I mean, are those still assets at issue in the claims before the tribunal?
Mr. Hallward-Driemeier: --Well, I believe that in fact the language of the statute makes it -- the assertions of the parties before the tribunal that define the property that is at issue before the tribunal.
That, again, is so that the courts are not put in a position of adjudicating, prejudging, the merits of the parties' arguments before the tribunal.
Chief Justice Roberts: Well, that's kind of a -- that's a broad assertion.
In other words, so long as you and Iran get together and say this asset is at issue in a situation where whether it's at issue or not saves you money and gives money to Iran, that seems to be a very self-serving legal test.
Mr. Hallward-Driemeier: Well, Your Honor, I don't believe that this Court needs to consider what the outer reaches are.
In this case, this is -- Iran characterizes it, and this is at page, again, at page 85 of the U.S. appendix, that the Cubic judgment, quote
"constitutes an integral part of the remedy sought in case B/61. "
This isn't an offset or a counterclaim.
Justice Ginsburg, you previously alluded to the fact the United States did not file a counterclaim.
And that's because this is not some unrelated counterclaim the United States has against Iran.
This is a critical part of Iran's claim against the United States.
It defeats, in the view of the United States, Iran's claim entirely.
At the very least, it reduces the amount of Iran's claim against the United States.
This isn't somehow unrelated; we're asserting, well, we can use this as an offset because you also owe us money from something else.
This is in Iran's own statement, and this is the statement that you--
Justice Kennedy: But how is that affected -- how is that affected depending on whether or not the judgment is executed or not.
Would the Iran tribunal have the authority to order Cubic not to satisfy the judgment, but to just hold the funds?
Mr. Hallward-Driemeier: --I -- I don't know.
Cubic is not before the tribunal.
But what we can ask is, can we conceive of -- and I think it's relatively easy to conceive of -- an award of the tribunal that says, the United States owes Iran $2.8 million; if the Cubic judgment is received by Iran, the United States owes Iran nothing.
And clearly, in that circumstance, the Cubic judgment is the subject of the award of the tribunal.
Justice Kennedy: I don't know that it's the subject of the award.
And it's really not at issue; it's just recognizing that there has been some prior transaction.
Mr. Hallward-Driemeier: Well, I guess, Your Honor, you have to think what does it mean for any property -- property to be at issue before the tribunal or the subject of the award?
Justice Souter: It means that at the end of the proceeding one side or the other gets the property.
Mr. Hallward-Driemeier: Well--
Justice Souter: And that is not going to be the -- what one side or the other gets in this proceeding is going to be a new judgment.
And that new judgment may or may not be satisfied by dealing with the prior judgment.
But that doesn't mean that the prior judgment is at issue; it simply means that the prior judgment may be used to discharge in an appropriate case an obligation which is determined in the later proceeding.
Mr. Hallward-Driemeier: --If I may respond.
Your Honor, on that view, even the ACMR is not at issue before the tribunal, because the tribunal cannot order the United States to hand over the ACMR to Iran.
In the A/15 judgment to which Petitioner's counsel alluded earlier, the tribunal recognized that it is not a violation of the United States' obligations under the Algiers Accords not to issue an export license.
Justice Souter: Okay.
Mr. Hallward-Driemeier: --is not entitled to the ACMR.
It's entitled to its loss, and its loss has been reduced to judgment in the Cubic judgment.
Chief Justice Roberts: Thank you, counsel.
Mr. Hallward-Driemeier: Thank you, Your Honor.
Chief Justice Roberts: Mr. Phillips.
ORAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE RESPONDENT
Mr. Phillips: Thank you, Mr. Chief Justice, and may it please the Court: I think the previous 25 or so minutes has demonstrated one sort of overarching fact, which is that there is an enormous risk, if this Court decides to interpret the language of this statute broadly, that it will easily sweep beyond any kind of arrangements between Iran and the United States in ways that fundamentally, obviously, disadvantage the very people that Congress clearly intended to benefit by this entire statutory scheme.
This is a scheme that was designed to provide remedies, recoveries, to the victims of terrorism.
And somehow in the scheme of everything that was discussed in the first 25 or so minutes of this argument, the victims of terrorism are completely shunted aside on basic -- on the basis of very technical ways of reading it.
But if we go back to the language of the statute, which is in the Petitioner's brief at 11a, it talks about
"enforcement against property that is at issue in claims against the United States. "
So the notion that we would focus on the word "property", as it relates to the tribunal and that the tribunal has in front of it, is a natural consequence of the language of that provision.
And to me, at least, the best way to look at the logic is to review how often the United States has described and Iran has described what was the property at issue before the claims tribunal and the B/61 proceeding?
And this is at 65a of the joint -- of the government's brief:
"The property at issue consists of one air combat maneuvering range system and all necessary subparts. "
There is no dispute that the property was within the jurisdiction of the United States.
Chief Justice Roberts: So that if you had these military assets, which are clearly the assets that are at issue in Iran's claim--
Mr. Phillips: --Absolutely.
Chief Justice Roberts: --Cubic is worried about what to do with it and so they sell them to the Canadians but they keep the proceeds in escrow, under the theory that look we may end up owing this to the Iranians under the tribunal.
Under the setoff, this may not be our assets, which -- I mean the Iranians have a claim to these.
Would those -- would those escrow funds be assets at issue?
Mr. Phillips: I think they would be because of the way the Iranians actually pled this.
They said give us either back -- give us either the military equipment that we bought, or give us the economic value of that.
But that's -- and that's why--
Chief Justice Roberts: Well, why is that very different from this situation, where you have an arbitration award saying that you, Cubic, owe the equivalent of what you should have -- what you would have provided to Iran, if there hadn't been the revolution?
Mr. Phillips: --Well, there are two answers to that.
The first one is remember precisely what the arbitration award is.
The arbitration award is not the value of the asset.
That was asked for; that was rejected by the arbitrator.
The arbitration award is for the value of a separate contract between Cubic and the Canadian government.
You will recall in the award, specifically the arbitrator said with respect to the underlying ACMR contract with Iran, that was mutually walked away from by both parties, and then there was a separate agreement that was entered into between the parties, and that was the basis for the arbitration award saying the value of breach of that secondary agreement is the part that serves as the arbitral award.
That it seems to me ought to be regarded at a minimum as one step too far removed, because that's not the property that is at issue before the claims tribunal in any way that the parties are disputing about it.
They accept that number.
Justice Breyer: Right.
So what is the -- it seems at the moment, frankly you could read it either way.
Let's imagine that -- that Cubic sold some jets that we blocked and they get some money, and they did it under their contract, and they got 2 million dollars.
And suppose they said, we owe Iran this money, and they pay Iran the money, and Iran puts it in a bank account or buys the grocery store.
Mr. Phillips: --Right.
Justice Breyer: Now suppose that happened.
It makes it simpler.
And then what happens is three people, including Mr. Elahi and two others who don't accept money, the other two, attach it, on the ground Iran owes us this money.
Mr. Phillips: Right.
Justice Breyer: We want the grocery store.
And suppose, further, Iran then says, if they get their money, you cannot subtract it, United States, from what you owe us.
But if we get the money, then you can subtract it.
That's their view.
The United States' view is different.
Who will resolve that question?
So they say, what is at issue is not who owns the grocery store; what is at issue is the question of whether we get the money or you get the money.
The money that is the value of the grocery store, or the bank account, in which case it's identical.
Now I think in that situation it's easy for me to say that money, the grocery store, or the bank account, of course is at issue before the tribunal.
For the question is, does Iran get it or does the United States get it, in the situation where the two other people -- leaving Elahi out of it -- can attach it.
I can easily read it that way.
I can also read it the way you want.
Mr. Phillips: Right.
Justice Breyer: All right?
So now, which do I do?
Mr. Phillips: Well, you clearly -- and I agree with you; there is no question you can read this statute either way.
Justice Breyer: All right.
I'll then add that the strongest argument against you, it seems to me, is the whole point of this was not simply to compensate victims of terrorism.
That's a worthy goal, and that's one of the points.
But it was to compensate them consistent with the proper running, in the interests of the United States, of the Iranian-American Claims Tribunal.
And so this is just the kind of issue we don't want to simply take away and let the victim have, because there is a strong risk the tribunal will rule against us, and we will have to pay it twice.
That's the argument against you.
Now, what's the argument for you?
Mr. Phillips: Right.
First of all--
Justice Breyer: Yes.
Mr. Phillips: --A significant purpose of this entire exercise obviously is to provide redress to the victims of terrorism.
Justice Breyer: That's one, but--
Mr. Phillips: 201(d) is a specific statutory construction provision which seems to suggest that Congress says that if there are doubts about how to apply this particular provision, you ought to put the thumb on the scale in favor of the victim.
So you do -- you will give meaning to section 201(c)(4) of the TRIA if you adopt a position consistent with our position.
The reality is that given that there are two more lienholders in line, none of this has anything to do with Iran and with the way the tribunal is going to proceed, because even if you were to say that Dr. Elahi is not entitled to this, there is no relinquishment claim with respect to the others, so this money is never going back to Iran, under any set of circumstances.
Justice Breyer: --That creates the issue, because the question is whether money that never goes back to Iran, but rather goes to an attaching person, is money that is or money that is not subtracted from the amount that the United States owes Iran.
Mr. Phillips: But -- but--
Justice Breyer: And that question is the question--
Mr. Phillips: --But Justice Breyer--
Justice Breyer: --is the question that is before the commission.
Mr. Phillips: --But the problem with this, Justice Breyer, is that this is a relinquishment provision.
It -- it is saying to us in return for these limited resources, 20 percent of the judgment -- and that is only 20 percent of the compensatory judgment and completely lose the punitive judgment -- in return for that you have to relinquish certain rights; and it seems to me that Congress would not have adopted the a provision that said and the rights you relinquish are essentially unknowable under any circumstances and extend to the ends of the earth.
Justice Breyer: They are totally knowable.
They are totally knowable.
In order to decide what they are all you have to do is to look at the issues before the commission and decide whether those issues concern specific, concrete property; that is, the property that you have an interest in.
With my grocery store, with my bank account, and with this claim, it is absolutely specific, and Iran has put before the commission the question of whether if you pay the money to an attaching person, we don't get it, or we do get it.
Mr. Phillips: --Justice Breyer--
Justice Breyer: That's what I gather.
Now you can tell me I'm wrong on that if you want.
Mr. Phillips: --The parties have been very specific about it, and we cited in a series of quotations about what is the property at issue here; and the property at issue, Justice Breyer is the ACMR system or the economic value of the ACMR system.
What is not at issue in this case is the value of the Cubic judgment.
First of all, there was an effort to bring the Cubic judgment specifically before the tribunal, and it was rejected as having no jurisdiction, certainly no jurisdiction over Cubic and then no jurisdiction over the United States' part of the Cubic judgment because that was not a contract between--
Justice Breyer: They are trying to attach the ACMR system.
Mr. Phillips: --They did--
Justice Breyer: They are trying to attach the Cubic judgment.
The ACMR judgment is in Canada.
Mr. Phillips: --But that's the whole point of this.
The property at issue before the tribunal is the ACMR system, and indeed in 1981 when this was originally brought what Iran wanted was the ACMR system.
Justice Breyer: And that's one piece of property.
The other piece of property that is at issue is the judgment, and the way it's at issue is I take it that two other people are saying, we attach it; Iran says because they attach it, you don't subtract it from the ACMR judgment; and we are saying, even though they attach it, you subtract it, and therefore it's before the tribunal as well.
That's my understanding at the moment, and I'm asking you to explain why that's wrong.
Mr. Phillips: Justice Breyer, there is no question that the fact that there are subsequent lienholders in line affects the possibility, but I would have thought it would only affect it in a way that is positive for me.
Because Iran is saying, look, this doesn't have any relevance to the -- to the Iran tribunal if we don't ever get the money; and the reality is whether Dr. Elahi gets the money or the other lienholders get the money, Iran is never going to get the money, which says to me it's not at issue under any theory of the case in front of the U.S. Iranian claims tribunal.
And so that would be my quickest answer to that; to the extent that you have other lienholders, it simply means that there really is nothing at issue there.
But it still seems to me that the better way--
Justice Ginsburg: Why not?
I mean, the question I raised before, why wouldn't the United States be urging that it gets credit, whether Iran gets the money or whether the people who are creditors of Iran get the money.
In either case, the United States should be able to have--
Mr. Phillips: --Right, the United States would still have that -- would still have that argument, but it's not a claim against the United States, which is what's required under the statute that we are dealing with here when it's viewed that way.
Justice Kennedy: But Iran might say in the tribunal, in responding to the setoff argument, this claim that we brought against you, the United States, implicates a breach of obligations that you have that are un -- somewhat unrelated to what was at issue in the -- in the -- in the Cubic judgment.
And then the United States would say, no, that's not true.
So they would have to examine the Cubic judgment.
So that means it's at issue before the court.
Mr. Phillips: No, I don't think there is anybody whose going to -- well, maybe there is some sense in which examining the Cubic judgment, but I don't think the tribunal has remotely been asked to or will under any circumstances be asked to review the Cubic judgment.
Justice Kennedy: There might be in the setoff proceedings.
There might -- there might be an argument that there are two obligations, and there is a setoff or that there is a setoff.
Mr. Phillips: Well, I mean, I think there is no question these are for two different obligations.
And I think that's why candidly the Court ought to decide that this is not property at issue here, because it is so clearly unrelated to the weapons system itself or to any monetization of the weapons system.
Remember the Cubic judgment comes from an arbitral award that doesn't have anything to do with that arms sale.
It has to do with a completely separate contractual undertaking between the Cubic and the Canadian government--
Justice Kennedy: Well, I think we might get--
Mr. Phillips: --and Iran.
Justice Kennedy: --substantial -- a substantial degree of argument on that point.
Mr. Phillips: I don't know how there could be an argument on that point, Justice Kennedy.
If you read the opinion of the arbitrator, it is absolutely clear that the -- that the underlying agreement between Iran and Cubic with respect to the arms sale was mutually terminated by the parties, and a new agreement entered into in order to resell those properties to Canada.
The opinion is crystalline in that regard.
And it was on the basis of the violation of that separate agreement that the -- that Cubic was then held to be liable to Iran for the $2.8 million.
Chief Justice Roberts: The agreement between who -- between who--
Mr. Phillips: Between Iran and Cubic.
Chief Justice Roberts: --So Iran, I assume, would say, look, we entered into this agreement to take the place of what was at dispute.
Which is what they owed us because they didn't ship us the arms that we paid for.
I don't see that that adds anything to your argument.
Mr. Phillips: Well, it just says that you move even further down the road from what are the properties that are, in fact, at issue before the tribunal.
Chief Justice Roberts: Right, so Iran says, look, you are not going to ship us the planes, whatever it is, you are not--
Mr. Phillips: Although they wanted that.
Chief Justice Roberts: --You were not going to give us the money, right?
Mr. Phillips: And they still want that.
Chief Justice Roberts: And we still have a dispute.
So, I tell you what, you are going to sell this stuff to Canada, you are going to get some money from them, and we have got an agreement that that money is ours.
Mr. Phillips: Mr. Chief Justice, that -- that -- they may have been able to make that argument.
That is not an argument they have made.
The argument they made, which represents the property at issue in the claims, is first, give us back the arms; and then two, give us the value of those arms, not as they have been reformulated in a completely separate contract, give us the value of those arms.
It seems to me the--
Chief Justice Roberts: Well, why would Cubic enter into a contract with Iran to give them money if it wasn't taking the place of the money they owed them in the original agreement?
Mr. Phillips: --Well, the question was, they were going to try to go forward in these arrangements.
And it was a, you know, complicated problem because you couldn't tell whether or not you would ever be able to send things back to Iran, et cetera.
And so, they were perfectly happy to enter into an agreement where they would say, look, we will just do the best we can and see how it turns out.
I mean, in reality, the litigation in front of the Ninth Circuit, obviously, on the Cubic judgment, Cubic is screaming loud and clear that they don't think they owe a nickel as a consequence of this arrangement that there had been no breach of anything under any circumstances, and that there is not a penny that's to be owed.
And as counsel said earlier, it's in some ways unfortunate that this has moved in this sequence.
So, we don't really have--
Chief Justice Roberts: Do you know why it was pending for ten years?
Mr. Phillips: --Well, it was stayed as a consequence of this other litigation -- as a consequence of these proceedings in order to allow, I think in general the Iran claims tribunal to -- to sort out, at least, some portion of these issues.
It would obvious be -- I mean, we have moved -- I mean, we are not a party.
Chief Justice Roberts: So the stayed because it was at issue before the Iranian claims tribunal?
Mr. Phillips: Right.
I mean, the truth is just as the issue was a more important issue for the United States prior to the new blocking order, you know, the questions that could potentially have arisen were potentially more important to the claims tribunal at the outset.
As the litigation has played out, it turns out that there's no relationship between the two.
Justice Breyer: Well, the -- the other thing -- and I think this counts against you, but maybe you have an answer to it, that there could be a lot of property that was directly at issue in '79 or '80 that Iran didn't get.
And because they didn't get it, all kinds of things happened with property, and you get more of it or you get less of it.
And during the interim years all kinds of things happened.
And it could be that those transformations at different times are directly before the tribunal, in respect to how much damages you are going to get, and how much -- we can easily think of cases if we have three or four hours.
But you see where I am going?
Mr. Phillips: Sure.
Justice Breyer: Now, I can understand Congress in passing this statute having one of two possible things: One is say we are just going to cut an arbitrary line here because it's a compromise, and what we will do is, you can go ahead, victim, and seize anything you want, as long as it doesn't narrowly fit within this.
That's a somewhat arbitrary line but a compromise.
Mr. Phillips: But it also provides protection for victims, right, and those are the people who are the most--
Justice Breyer: The other way to look at it is to say, well, what we that had in mind here is we will pay these victims something; you know, they are going to get something right from Congress right now, because they are hurt.
But in return from that, we don't want you taking action that will really affect our liability to Iran.
And if it's the second, then we needed broader definition; if it's the first, we don't.
Mr. Phillips: --Justice Breyer, I think the Hague cases are the place to look in terms of trying to understand this, because what it's what -- Hague, that line of cases all involve efforts to seize consular properties of Iran and all arose prior to the Accords, and every one of those courts of appeals has concluded that each of those properties is beyond the ability of the courts to attach all of those properties.
And -- and it seems to me that what Congress was concerned about was having inconsistent claims potentially arise in both the district -- in federal court in the United States and in front of the claims tribunal.
So where you have a situation where the claims tribunal says, look, that's a consular property that belongs to the Iranian government, you should return it, and have the United States have to show up in front of that tribunal and say, oh, excuse me, but unfortunately, we have been forced to sell that property under a federal court order and the embarrassment that arises from that.
That seems to me so clearly what Congress had in mind, or at least is clearly covered by this and the case law or all the case law up to this point that has dealt with it has consistently ruled in favor of the United States and Iran in that context.
But there is no reason to go beyond that context in order to deprive the clear victims of terrorism of a meaningful remedy.
And I think, Justice Breyer, just to be clear about this, we got money back, to be sure.
A substantial portion of the money we got back came from the values of the properties that the United States seized from Iran that they've used, they have leased out embassies and stuff like that.
And that is not property that comes out of the United States' fisc.
So it's not reasonable to assume, as the government does, that simply because these moneys were paid out, that there is some huge relinquishment that is required there.
It seems to me that it makes much more sense for this Court to narrowly construe this.
I guess the last thing I would say in that regard is, that insofar as we can tell, this case will affect one party -- actually, I guess the other two lienholders behind us.
But realistically, there are no cases in the pipeline.
There is no other litigation that is on going out there.
This is a singular -- I mean, it's kind of unusual for this Court, but this is the only case that we can figure that this applies to.
Chief Justice Roberts: Well, but the point is, depending on how it comes out, once you give a argument to the Iranians that they can raise with the claims tribunal that will affect far more than your one single case.
We -- the argument would be the United States is not living up to the obligations it undertook in the Algiers Accords.
Mr. Phillips: Right.
And, Mr. Chief Justice, that -- I understand why the government filed in support of Certiorari at the earlier stages of this proceeding.
But after the intervening blocking order that takes the -- I mean, that issue is off the table.
We are no longer defending the Ninth Circuit's view that the United States breached the original Algiers Accords in the context of this case.
Nothing in the blocking order that is in place now and would prevent Iran from getting this remotely violates the Algiers Accords.
And as far as I know, no one is making that argument at this stage.
So all you have is a relatively clean -- issues.
Does the blocking order apply here in stopping the payment of these funds to Iran?
There the answer seems to me unquestionably yes.
And then the second question is, do we adopt a rule to the detriment to a single terrorist victim in a way that deprives him of an opportunity to get back fair redress in the absence of some clear indication from Congress that it intended that result where it would affect no one else and where Congress has said specifically in a rule of construction, put your thumb on the scale in favor of the victim of terrorism?
That's what we are asking the Court to do in this case.
It provides no problems to the United States in its claims tribunal litigation.
It's only an issue of money.
Chief Justice Roberts: What provision -- can you cite me the provision where the Congress said put your thumb on the scale?
Mr. Phillips: Yes.
It's 201(d)(4), the Petitioner's brief at 11a.
Chief Justice Roberts: 11a.
And how does that -- the title of the section says statutory construction.
I just don't see what follows as statutory construction.
Mr. Phillips: Well, I think what you have to do is give the language some credit.
And our way -- what we think Congress intended there was to say, tip the scale in favor of the victims of terrorism, which is the underlying purpose of the statute.
I will confess, the language is not nearly as clear as I would like it to be, but I will also recognize that the -- the Government of Iran's position renders that language as total dead letter--
Chief Justice Roberts: You don't see any--
Mr. Phillips: --alternative it seems to me you ought to give it -- again, give the tie to the victims under this--
Chief Justice Roberts: --You don't see any problem with Congress telling us how to conduct statutory construction?
Mr. Phillips: --No, I think Congress does -- is entitled to suggest, if it's -- if you have ambiguity in our language, which way to come out as a matter of policy.
No, I don't think that's -- no, I don't think that's dictating -- that's certainly not dictating a result in this particular case.
Justice Ginsburg: --Mr. Phillips, one piece of -- I don't -- you have agreed that the United States could recoup from Iran the amount paid to the victims, including Dariush Elahi, including the 2.3 million.
How would the United States go about recouping from Iran the money it has paid to the victims of Iran's terrorism?
Mr. Phillips: You mean in the situations where the United States has subrogate -- right to subrogation?
Justice Ginsburg: Yes.
How would that work?
How would -- how would the United States--
Mr. Phillips: Well, I think it would almost certainly work as a matter of diplomacy and not as a matter of adjudicated resolution.
I think what they will say is, these are rights, these are amounts of money that we have had to pay.
And if we are ever to normalize relations with the Government of Iran, we are going to expect the Government of Iran to recognize those payments and to make some kind of retribution to the United States under those circumstances.
And again, all it does is it shifts the burden of these injuries from the victims, who are in the least best position to deal with them, and put them in the United States, which is in a position of at least some hope of being able to resolve them diplomatically in a way that the United States can, in fact, be recompensed.
Justice Ginsburg: --You said this is a one of a kind case.
Are there no other victims who have successfully sued Iran?
Mr. Phillips: There are, but the problem is you have to back into the situation of property that is at issue in the claims tribunal.
The claims tribunal was created in '81.
It's not a lot of that property around.
We're talking 25 years later.
So, they have pretty much played out their course.
There were the Hague noted cases, and the Elahi case.
The others are going to be resolved without regard to these provisions.
And so, the reality is what the Court says today will affect my client, but as far as I can tell no one else.
And certainly, the only interest the United States has at this stage in this litigation is its own financial interest.
And it would seem to me, that's not a basis on which to interpret the statute.
If there are no further questions, I urge the Court to affirm.
Chief Justice Roberts: Thank you, Mr. Phillips.
Mr. Bederman, you have two minutes left.
REBUTTAL ARGUMENT OF MR. DAVID J. BEDERMAN ON BEHALF OF THE PETITIONER
Mr. Bederman: If I can make just a few points.
In response to Respondent counsel's assertion that in the International Chamber of Commerce arbitral award there's been so form of novation here, which makes the connection between the ACMR and the Cubic judgment somehow attenuated.
I think that's belied by the tribunal's -- the panel's discussion, this is at the joint appendix at page 47.
The panel makes very clear that under the sales contract credit has to be given to Iran for its advance payment.
Here you have a breakout of the salvage value of the ACMR.
All that the panel was indicating was that Iran was not entitled to specific performance here, to make that ruling is not a finding of a novation in the sense which would respond to counsel using that phrase.
So, I don't see the attenuation here.
Speaking to the assertion that, again, the enormous risk presented by this case of the broad construction of the congressional intent, I think if you look carefully at the language at the blue brief at 11a of the statutory construction provision -- that was part of the colloquy between the Chief Justice and Respondent's counsel.
And if you read this, it completely reserves, if not begs the question of whether the Cubic judgment is, quote, an asset otherwise available under the section for attachment.
So, I think it completely doesn't answer, one way or the other -- a finger on the scale, as Respondent's counsel has evocably said, or some form of command by Congress to this Court.
It simply reserves that question for the Court's analysis.
In response to Justice Ginsburg's last question to Respondent's counsel, the one thing I would point out to you again, is another clue in the statute.
If we look at the Victims Protection Act, which was the predecessor statute here, section 2002(c), what Congress wanted to protect is the right of the United States to, quote, pursue these subrogated rights as claims or offsets of the United States in appropriate ways.
So, again, Congress has contemplated the notion that there will be a process of setoffs either before the Iran U.S. claims tribunal or in some other context, which I'm not sure I can imagine beyond what response counsel has said.
So, to suggest that the broad remedial thrust of TRIA, which Petitioner is not denying -- it's not our place to deny that -- is nonetheless tempered by these carefully crafted provisions in the statute.
We would support, obviously, reversal of the lower court's opinion.
Chief Justice Roberts: Thank you, counsel.
The case is submitted.