The Cable

U.S. Supreme Court Rules Iran’s Terrorism Victims Can Collect $2 Billion

Victims of Iran-backed terrorism can now collect $2 billion from its central bank.


The U.S. Supreme Court on Wednesday upheld a law that could pave the way for the families of Americans killed in terrorist attacks tied to Tehran to collect $2 billion from Iran’s central bank, a landmark ruling certain to further complicate Washington’s delicate diplomatic relationship with Tehran.

The 6-2 ruling is a victory for the 1,300 people that have spent two years legally battling Iran’s Bank Markazi over the money. The group includes victims of the 1983 Beirut Marine barracks bombing, which left 241 U.S. service personnel — including 220 Marines — dead, the 1996 Khobar Towers bombing in Saudi Arabia that killed 19 U.S. service members, and the 2001 suicide bombing of a pizzeria in Jerusalem that killed a New Jersey woman and 14 others.

The decision comes at a sensitive time for U.S.-Iranian relations. Valiollah Seif, chief of Iran’s central bank, said last week the United States and its European partners have done “almost nothing” to meet the terms of last year’s landmark nuclear accord. Under the terms of the deal, the United States, China, France, Russia, the United Kingdom, and Germany agreed to lift some financial sanctions against Tehran in exchange for Iran curtailing its nuclear program.

“In general, we are not able to use our frozen funds abroad,” Seif said at the Council on Foreign Relations last Friday. Iran’s partners, he added, “have not honored their obligations.”

The court’s ruling brings an end to a yearslong quest for victims and their family members to get compensated. The plaintiffs were trying to collect funds they won when Iran originally didn’t defend itself against the accusation that it was responsible for these attacks. They targeted Iranian money held in a Citibank account in New York.

In 2012, Congress passed a law that said assets in the account could be seized to pay the terrorist attack victims. On Wednesday, the high court ruled that lawmakers did not overstep their authority when approving the legislation. Now, Citibank can hand over the funds to victims.

Lawyers for Bank Markazi argued the opposite. It said the Citibank funds were part of its foreign-currency reserves and off limits to American victims of terrorism and that Congress did not have the power to compel Citibank to give them up.

Justice Ruth Bader Ginsburg, author of the majority opinion, wrote, “Congress may indeed direct courts to apply newly enacted, outcome-altering legislation in pending civil cases.” Chief Justice John Roberts and Justice Sonia Sotomayor dissented. The court heard oral arguments on the case in January 2016.

The lead plaintiff in the case is Deborah Peterson. Her brother, Marine Lance Cpl. James Knipple, was killed in the 1983 bombing, which was carried out by a front of the Iranian-backed Hezbollah militia. The attack was, until 9/11, the deadliest terrorist strike ever carried out against the United States.

Photo credit: AFP/Getty Images

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