North Carolina Law Review

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"Towards a Strategy of Peace": Protecting the Iran Nuclear Accord Despite $46 Billion in State-Sponsored Terror Judgments

March 23, 2017

95 N.C. L. Rev. 795 (2017) 

 

On July 14, 2015, the United States of America, the European Union, the United Kingdom, Russia, and China reached a historic agreement with the Islamic Republic of Iran that will limit Iran’s nuclear program to peaceful purposes only. The deal, known formally as the Joint Comprehensive Plan of Action (“JCPOA”) and colloquially as the Iran nuclear accord (“Accord”), was a triumph of international diplomacy. The U.S. government expended significant political, economic, and diplomatic capital over several decades to compel Iran to negotiate. President Barack Obama devoted a substantial portion of his presidency to reaching a nuclear agreement with Iran that protects the national security interests of the United States. Members of Congress spent a fair portion of their time on the other side of the aisle, battling the very Accord that President Obama worked vigorously to establish. Despite these efforts, Congress was unable to pass a resolution expressing disapproval of the Accord.The Accord took effect on January 16, 2016, at which point sanctions against Iran began to ease.

 

However, a towering obstacle to the Accord’s implementation remains lurking in the shadows of U.S. federal courts. As of November 2015, the Islamic Republic of Iran owed $43.5 billion to thousands of plaintiffs across the United States who were granted favorable civil judgments under the state-sponsored terror (“SST”) exception to the Foreign Sovereign Immunities Act (“FSIA”), and this number continues to grow. The SST exception grants federal courts the power to levy judgments against designated state sponsors of terror for terrorist activities that harm American citizens. The Accord seemingly has no provision addressing the status of these judgments. Unfortunately, due to the confidential nature of the negotiations, it is unclear why these judgments were not resolved by the Accord. The judgments were likely considered off limits during the negotiations for fear that they would complicate the important goal of de-weaponizing nuclear facilities in Iran. Regardless, the Obama administration clearly chose to prioritize foreign policy objectives over the legal issues looming in the background. 

 

At the time the SST exception to the FSIA was drafted in 1996, vigorous debate surrounded its utility, enforceability, and the risk of reciprocal litigation it created. Central to this debate was the balance of power between plaintiffs, who sought compensation for injuries at the hands of terrorists, and the executive branch, which remained wary of losing control over foreign policy objectives and initiatives. Today, the SST exception to the FSIA once again poses a substantial obstacle to the executive’s foreign policy objectives, this time in the form of an obstacle to the President’s ability to implement the Accord, and more broadly, to normalize relations with Iran. This Comment explores the historical development of the SST exception, examines obstacles posed by SST judgments in the context of recent diplomatic developments, and suggests methods by which those obstacles can be circumvented by both the President and Iran while also ensuring that plaintiffs are justly compensated.

 

This Comment is undergirded by three key goals: First, state sponsors of terror should receive their “just deserts.” Second, under the existing statutory scheme, victims of terrorism ought to receive some level of compensation for the harms they have suffered. Third, all the while, neither the pursuit of a “more practical, more attainable peace” with Iran should be sacrificed nor should the President compromise its foreign policy flexibility. This Comment synthesizes these goals—revealing that the inherent tension between them does not render them mutually exclusive.

 

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