## Facts

- Shams Pahlavi, sister of the former Shah of Iran and a California resident at relevant times, executed multiple promissory notes, some held by Bank Melli Iran and Bank Mellat.
- After the 1979 Iranian Revolution, the Banks sued Pahlavi in Iranian courts to collect on the notes and served her by publication.
- Iranian courts entered default judgments against Pahlavi in 1982 and 1986 totaling about $32 million.
- The Banks filed suit in the Central District of California to enforce the Iranian judgments under the Algerian Accords and California’s Uniform Foreign Money-Judgments Recognition Act.
- Pahlavi opposed enforcement, asserting that, given her association with the Shah’s regime, she could not have received due process in Iran when the judgments were entered.

## Issues

1. Whether the Banks received adequate notice and opportunity to respond when the district court converted Pahlavi’s Rule 12(b)(6) motion (with extrinsic materials) into a Rule 56 summary-judgment motion.
2. Under the Algerian Accords and California’s Foreign Money-Judgments Recognition Act, who bore the burden regarding the due-process compatibility of the Iranian judgments, and whether Pahlavi’s showing shifted a burden of production to the Banks.
3. Whether the Iranian default judgments were enforceable in the United States despite evidence that Iran’s courts at the relevant time did not provide impartial tribunals or procedures compatible with due process.

## Decision

- The Ninth Circuit affirmed summary judgment for Pahlavi.
- The Banks had sufficient notice that the district court was treating the motion as one for summary judgment and had months to submit evidence addressing due process in Iran.
- Pahlavi presented substantial evidence that she could not have obtained due process in Iran at the time of the judgments, satisfying any burden she had or, at minimum, shifting the burden of production to the Banks.
- The Banks failed to submit competent evidence creating a genuine dispute on whether Iran’s system then provided due-process-compatible procedures.
- The Iranian judgments were not entitled to recognition or enforcement under California’s recognition statute or the Algerian Accords.

## Legal Principles

- A foreign money judgment is not recognizable under California’s Uniform Foreign Money-Judgments Recognition Act if it was rendered under a system lacking impartial tribunals or procedures compatible with due process of law.
- When a Rule 12(b)(6) motion relies on matters outside the pleadings, a court may convert it to summary judgment, but must provide the nonmovant notice and a fair opportunity to present relevant material.
- Evidence of systemic judicial bias and inability to safely appear in the foreign forum may establish a due-process defect sufficient to deny recognition of an otherwise facially regular default judgment.
- Executive agreements such as the Algerian Accords are interpreted similarly to treaties and do not require enforcement of foreign judgments obtained through processes incompatible with basic due-process norms.

## Conclusion

The Ninth Circuit held that the Banks could not enforce Iranian default judgments against Pahlavi in California because the record showed that, when the judgments were entered, Iran’s judicial system did not afford procedures compatible with due process to a defendant identified with the former Shah’s regime, and the Banks failed to rebut that showing.


Bank Melli Iran v. Pahlavi, 58 F.3d 1406 (9th Cir. 1995)