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Havlish v. 650 Fifth Ave. Co.

United States Court of Appeals for the Second Circuit

May 1, 2019, Argued; August 9, 2019, Decided

Docket Nos. 17-3278(L), 17-3243(Con), 17-3251(Con), 17-3254(Con), 17-3255(Con), 17-3260(Con), 17-3261(Con), 17-3262(Con), 17-3264(Con), 17-3265(Con), 17-3267(Con), 17-3268(Con), 17-3269(Con), 17-3271(Con), 17-3272(Con), 17-3276(Con)

Opinion

WESLEY, Circuit Judge:

 [*177]  Over the past few decades, hundreds of terrorism victims have obtained default judgments against the Islamic Republic of Iran in federal court. Iran has yet to satisfy these judgments, and the victims have returned to the courts seeking to execute their judgments through the attachment of Iranian assets located within the United States. Among these individuals are the hundreds of Plaintiffs-Appellees in these consolidated appeals (the "Judgment Creditors"). In the actions below, the Judgment Creditors sued the Alavi Foundation and 650 Fifth Avenue Company (the "Defendants"), alleging that the Defendants are sufficiently close to Iran that their assets are subject to attachment and execution under the Foreign Sovereign Immunities Act ("FSIA") and the Terrorism Risk Insurance Act ("TRIA"). [**4]  After nearly a decade of litigation, including a 2016 appeal to this Court2 and a month-long bench trial, the United States District Court for the Southern District of New York (Forrest, J.) found for the Judgment Creditors on their claims under both statutes. The court ordered the Defendants to turn over substantial property interests, including their stakes in 650 Fifth Avenue (the "Building"), a 36-story commercial skyscraper in Midtown Manhattan. Kirschenbaum v. 650 Fifth Ave. & Related Props., 257 F. Supp. 3d 463 (S.D.N.Y. 2017).

The Defendants argue that the district court committed several errors requiring us to reverse or vacate the judgment. We agree.

First, the district court violated both the mandate from our 2016 decision and the law of the case by sending the FSIA claims to trial. We reverse the judgment on the FSIA claims and remand for the court to enter judgment on these claims for the Defendants.

Second, the district court abused its discretion by precluding two former Alavi board members from testifying at trial. We reverse the underlying order. This holding requires us to vacate the judgment and remand for a new trial on the Judgment Creditors' TRIA § 201 claims.

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934 F.3d 174 *; 2019 U.S. App. LEXIS 23768 **; 2019 WL 3756035

FIONA HAVLISH, ET AL., Plaintiffs-Appellees, v. 650 FIFTH AVENUE COMPANY, ALAVI FOUNDATION, Defendants-Appellants, ASSA CORPORATION, ASSA CO. LTD., Defendants.1

Prior History: These consolidated appeals ask whether two entities (the "Defendants") must turn over substantial real and financial property interests to hundreds of terrorism victims holding default judgments against the Islamic Republic of Iran. The victims allege that the Defendants should be treated as the "foreign state" of Iran under § 1610(b)(3) of the Foreign Sovereign Immunities Act ("FSIA") and as a "terrorist party" under § 201 of the Terrorism Risk Insurance Act [**1]  ("TRIA"). Following a bench trial, the United States District Court for the Southern District of New York (Forrest, J.) ordered the turnover of the Defendants' property under both statutes.

We hold that the district court violated the mandate we issued in a previous decision instructing it not to send the FSIA claims to trial. We also hold that the court violated the law of the case by finding that 650 Fifth Avenue Company is a foreign state under the FSIA. We REVERSE the judgment on these claims and REMAND for the court to enter judgment for the Defendants.

Without reaching the merits of the TRIA claims, we hold that the district court abused its discretion by precluding two of the Defendants' witnesses from testifying at trial. We therefore REVERSE [**2]  the underlying order and VACATE the judgment on the TRIA claims. We also REMAND for a new trial on these claims.

The Defendants additionally challenge the district court's decision to deny them a jury trial on the TRIA claims upon finding that the Defendants waived their alleged jury right. Without reaching the court's waiver finding, we hold that TRIA § 201 litigants lack the right to a jury trial in actions against a state sponsor of terrorism, including its agencies or instrumentalities. We AFFIRM the court's decision denying a jury trial on this ground.

We therefore AFFIRM in part, REVERSE in part, VACATE in part, and REMAND for a new trial on the TRIA § 201 claims.

Kirschenbaum v. 650 Fifth Ave., 2017 U.S. Dist. LEXIS 142187 (S.D.N.Y., Sept. 1, 2017)

CORE TERMS

district court, instrumentality, jury trial, foreign state, attachment, right to a jury trial, agencies, vacate a judgment, bench trial, terrorism, member of the board, citizen of a state, matter of law, precluding, properties, judgments, turnover, sponsor, ego

Civil Procedure, Appeals, Remands, Standards of Review, De Novo Review, Judgments, Preclusion of Judgments, Law of the Case, Trials, Jury Trials, Right to Jury Trial, Standards of Review, Constitutional Law, Bill of Rights, Fundamental Rights, Trial by Jury in Civil Actions, Enforcement & Execution, International Law, Dispute Resolution, Remedies