D.C. District Court Refuses To Grant Plaintiff Default Judgment Against Iran, Finding Israeli Law Governed Dispute

By Louis M. Solomon

In Estate of Yael Botvin v. Islamic Republic of Iran, et al., Civil Action No. 05-0220 (D.D.C. March 2011), [an enhanced version of this opinion is available to lexis.com subscribers] plaintiff is the estate of an Israeli domiciliary killed in a 1997 terrorist attack in Jerusalem, Israel. The District Court had earlier denied a motion for a default judgment and treated the current motion ass one to reargue/reconsider and to grant the default. The District Court essentially granted the reargument by addressing the issues anew and reaffirmed its denial of the motion for entry of a default judgment, without prejudice.

The District Court's decision addresses on a motion to reconsider several timely topics in international practice:

First, the Court observed that it had substantially more discretion to review its own interlocutory orders than it would have had to review a final order, even one that it had rendered. The primary reasons for altering or amending a final judgment, said the Court, are "an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or to prevent manifest injustice". With respect to an interlocutory order, on the other hand, modification could be done "as justice requires", which included a broader set of principles, including whether the Court "has patently misunderstood a party, has made a decision outsider the adversarial issues presented to the Court by the parties, has made an error not of reasoning, but of apprehension, or where controlling or significant change in the law or facts [has occurred] since the submission of the issue to the court". The Court reaffirmed that interlocutory review is not "subject to the law of the case doctrine".

Second, the Court found that its prior choice of law determination was correct. The Court noted that the Foreign Sovereign Immunities Act did not grant a private right of action against non-U.S. states. (The plaintiff did not sue under 28 U.S.C. § 1605A, which, as we have discussed in prior postings (for example here), does provide a federal cause of action for state sponsored terrorism (subject to qualification). To find that cause of action, therefore, the District Court had to engage in a choice of law analysis and applied District of Columbia choice of law rules and ultimately Israeli substantive law. The Court distinguished earlier decisions by observing that, in this case, the plaintiff was and remains domiciled in Israel.

Third, under Israeli law, the District Court stated that it was unpersuaded by the plaintiff's showing that a cause of action existed again Iran for damages, for vicarious liability for assault, or for wrongful death. The District Court understood that in determining non-U.S. law under Fed. R. Civ. P. 44.1 the court did not have to rely on the parties; nonetheless the Court found the plaintiff's demonstration lacking, finding that a heightened showing was necessary for entry of a default judgment ("A court should not enter a default judgment against a foreign state 'unless the claimant establishes his claim or right to relief by evidence satisfactory to the court'").  For a discussion of Rule 44.1, see the discussion of proof of non-U.S. law in our e-book, International Practice:  Topics and Trends.

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