Facts
- During the 1991 Gulf War, Colonel Clifford Acree and other U.S. service members were captured by Iraqi forces and held as prisoners of war in Kuwait and Iraq between January and March 1991.
- The POWs alleged severe abuse, including starvation, mock executions, chemical injections, beatings, and psychological torture.
- In 2002, the former POWs and certain family members sued Iraq, the Iraqi Intelligence Service, and Saddam Hussein in the U.S. District Court for the District of Columbia, seeking compensatory and punitive damages.
- Plaintiffs invoked the Foreign Sovereign Immunities Act (FSIA) “terrorism exception,” 28 U.S.C. § 1605(a)(7), and pleaded common-law tort theories (e.g., assault, battery, intentional infliction of emotional distress).
- Iraq had been designated a state sponsor of terrorism in 1990, before the alleged conduct.
- Iraq did not appear; the district court entered default and, after an evidentiary hearing, awarded plaintiffs over $959 million.
- While the case was pending, Congress enacted the Emergency Wartime Supplemental Appropriations Act (EWSAA) authorizing the President to make certain terrorism-related laws inapplicable to Iraq; the President asserted this authority reached the FSIA terrorism exception.
- The United States sought to intervene, citing interests in foreign affairs and Iraqi assets; the district court denied intervention.
Issues
- Whether the United States was entitled to intervene as of right under Federal Rule of Civil Procedure 24(a).
- Whether, after EWSAA and the President’s determination, the FSIA terrorism exception could be applied to Iraq.
- Whether FSIA § 1605(a)(7) and/or the Flatow Amendment created a substantive cause of action against a foreign state, or whether plaintiffs had to plead an independent source of substantive law.
Decision
- The D.C. Circuit reversed the denial of the United States’ motion to intervene.
- The court vacated the default judgment and remanded with instructions to dismiss for failure to state a claim.
- The court did not definitively decide the EWSAA jurisdiction question, instead assuming jurisdiction arguendo and resolving the appeal on the absence of a cause of action.
- Applying circuit precedent, the court held plaintiffs had not identified any valid, non-FSIA substantive law creating liability against Iraq, and generic common-law tort labels were insufficient.
Legal Principles
- The FSIA is primarily jurisdictional; an FSIA immunity exception does not itself supply a substantive cause of action.
- Plaintiffs suing under an FSIA exception must identify a specific source of substantive law (federal, state, or foreign) that provides the elements of liability.
- The Flatow Amendment does not create a cause of action against the foreign state; it authorizes certain claims only against officials, employees, or agents in their personal capacities.
- A default judgment cannot stand where the complaint fails to state a legally sufficient claim, even if the foreign sovereign does not appear.
- Intervention as of right is appropriate where the government shows protectable interests (including foreign relations and control of foreign assets) that may be impaired and are not adequately represented by existing parties.
Conclusion
The D.C. Circuit allowed the United States to intervene, then vacated a nearly $1 billion default judgment because FSIA’s terrorism exception did not create a substantive claim against Iraq and plaintiffs failed to plead any independent cause of action necessary to impose liability on a foreign sovereign.