Leibovitch v. Islamic Republic Iran

297 F.Supp.3d 816

Shlomo LEIBOVITCH, et al., Plaintiffs,

v.ISLAMIC REPUBLIC OF IRAN, et al., Defendants.

No. 08 C 1939

United States District Court, N.D. Illinois, Eastern Division.

Signed February 27, 2018

Robert Joseph Tolchin, Berkman Law Office, LLC, Brooklyn, NY, Daniel A. Shmikler, Robert David Cheifetz, Sperling & Slater, P.C., Chicago, IL, for Plaintiffs.

MEMORANDUM OPINION AND ORDER

Chief Judge Rubén Castillo, United States District Court

In this long-running case, Shlomo Leibovitch and several of his family members ("Plaintiffs") seek to recover for injuries they suffered as a result of an act of terrorism committed with the support of the Islamic Republic of Iran and the Iranian Ministry of Information ("Defendants"). Presently before the Court is Plaintiffs' motion to compel discovery from non-party The Boeing Company ("Boeing"), as well as Boeing's cross-motion to quash Plaintiffs' discovery requests.¹ (R. 232, Pls.'

Mot.; R. 245, Boeing's Mot.) For the reasons stated below, Plaintiffs' motion to compel is granted in part and denied in part, and Boeing's cross-motion is denied.

BACKGROUND

The facts of this case have been fully set forth in several prior opinions of this Court and the U.S. Court of Appeals for the Seventh Circuit. See Leibovitch v. Islamic Republic of Iran , 852 F.3d 687 (7th Cir. 2017) ; Leibovitch v. Islamic Republic of Iran , 697 F.3d 561 (7th Cir. 2012) ; Leibovitch v. Islamic Republic of Iran , 188 F.Supp.3d 734 (N.D. Ill. 2016) ; Leibovitch v. Syrian Arab Republic , 25 F.Supp.3d 1071 (N.D. Ill. 2014). In brief, the tragic facts underlying the case began in 2003, when the Leibovitch family was driving on a highway in Jerusalem and their minivan "was shot up by members of Palestine Islamic Jihad, a terrorist group supported by the government of Iran." Leibovitch , 852 F.3d at 688–89. Seven-year-old Noam Leibovitch was killed and her three-year-old sister Shira Leibovitch (an American citizen) was permanently injured. Id. The surviving family members, as well as Noam's estate, filed this action for damages against Defendants pursuant to the Antiterrorism Act ("ATA"), 18 U.S.C. § 2333, and the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. § 1605A. Id. at 689. Defendants were served through diplomatic channels in Tehran but never answered or otherwise appeared. Leibovitch , 188 F.Supp.3d at 741, 753. After "protracted proceedings" in both the district and appellate courts, the Court entered a default judgment of $67 million against Defendants. Leibovitch , 852 F.3d at 689.

Since that time, Plaintiffs have been engaged in the arduous task of trying to collect on their judgment. See id. at 689–90. To that end, in December 2016 they served Boeing, a corporation headquartered in Chicago, with a citation to discover assets pursuant to Federal Rule of Civil Procedure 69 and 735 ILL. COMP. STAT. 5/2–1402, as well as discovery requests under Rule 45 seeking to identify Iranian assets "which are or may be held by Boeing." (R. 233, Pls.' Mem. at 2.) Specifically, Plaintiffs seek information about a contract—which has been widely reported in the media—between Boeing and the Airline of the Islamic Republic of Iran ("Iran Air"), under which Boeing is to provide Iran Air with 80 commercial airplanes worth approximately $16 billion over a period of years. (See, e.g. , R. 234–7, News Article.) This deal was made possible by the Joint Comprehensive Plan of Action ("JCPOA"), commonly referred to as the "Iran Nuclear Deal," which was brokered in July 2015 among the E3/EU+3 nations² and Iran. (R. 245–3, Iran Nuclear Deal at 4.) The goal of the Iran Nuclear Deal was to ensure that Iran's nuclear program is "exclusively peaceful." (Id. ) As part of the deal, the United States (through former President Barack Obama) agreed to lift various commercial sanctions against Iran and to "allow for the sale of commercial passenger aircraft and related parts and services to Iran[.]" (Id. at 13.) Consistent with this obligation, in September 2016 the U.S. Office of Foreign Asset Control ("OFAC") licensed Boeing's future sale of commercial airplanes to Iran Air. (R. 245–1, Boeing's Mem. at 7; R. 247–1, Larson Decl. ¶ 12.) Boeing thereafter entered into an agreement with Iran Air, dated December 11, 2016, to sell 80 commercial airplanes to Iran Air. (R. 245–1, Boeing's Mem. at 8; R. 247–1, Larson Decl. ¶¶ 2–3.) This deal was the first major commercial transaction between American and Iranian companies in four decades. (R. 245–1, Boeing's Mem. at 8; R. 247–2, Bentrott Decl. ¶ 6.)

The present motions stem from Plaintiffs' efforts to learn the details of the airplane deal. Plaintiffs seek "information about assets of the judgment debtors against which they can enforce their judgments, either in the United States or elsewhere." (R. 233, Pls.' Mem. at 4–5.) Their Rule 45 document subpoena contains eight separate document requests. They ask for a copy of the contract itself, as well as all "ancillary documents ... that would identify [ ] the parties and their obligations as well as documents concerning the financial institutions involved in the transaction, the financing arrangements, [and the manner of] payment and delivery." (Id. at 5; see also R. 234–3, Doc. Subpoena.) Plaintiffs further request "all correspondence, notices, written inquiries, letters, or writings of any nature ... between Boeing, Iran Air and/or the Islamic Republic of Iran, in respect to the Contract and the parties' respective obligations and payments under the Contract." (R. 243–4, Doc. Subpoena ¶ 6.) They also seek production of "[a]ny and all correspondence" between Boeing and OFAC, or any other department or agency of the U.S. government, "relating to assets or property of the Islamic Republic of Iran, including without limitation the Contract." (Id. ¶ 7.) Plaintiffs also served Boeing with a Rule 45 deposition subpoena, requiring Boeing to designate a corporate representative pursuant to Rule 30(b)(6) to testify on a variety of matters, including the details of the contract and the details of any communications between Boeing and Iran Air, or Boeing and the U.S. government, broadly relating to the contract or any asset of Iran. (R. 234–4, Dep. Subpoena ¶¶ 1–7.)

In response, Boeing has not produced any documents or designated a corporate representative pursuant to Rule 30(b)(6).³ Instead, Boeing moves to quash the subpoenas and dismiss the citation in its entirety. (R. 245, Boeing's Mot.) In Boeing's view, ordering the requested relief would require the Court to resolve "nonjusticiable political questions" and violate principles of international comity; Boeing believes that granting these discovery requests would cause "significant harm to the goals of the United States and its European allies" and "risk destabilizing the purpose of the JCPOA to provide for regional and international peace and security." (R. 245–1, Boeing's Mem. at 12–13 (internal quotation marks omitted) ). Boeing also argues that Plaintiffs' discovery requests "seek irrelevant information and are disproportionate to the needs of the case," because the contract, as currently drafted, will not result in any Iranian assets being subject to attachment in the United States. (Id. at 16–17.)

Plaintiffs argue in reply that their discovery requests do not raise any non-justiciable political questions or trigger international comity concerns. (R. 252, Pls.' Reply at 2–6.) In their view, Boeing is essentially asking this Court "to afford Iran and Iran Air, and by extension their business partner Boeing, protections and immunities that are not mentioned in either [the Iran Nuclear Deal] or the [FSIA]."

(Id. at 3.) Plaintiffs believe that the Iran Nuclear Deal "did nothing to prohibit the victims of terror from continuing to exercise their rights under the FSIA." (Id. at 5.) In response to Boeing's relevancy and proportionately argument, Plaintiffs argue that Boeing has skewed the inquiry by suggesting that Plaintiffs must demonstrate that they are able to execute on specific assets before they are permitted any discovery related to those assets. (Id. at 8–9.)

After reviewing the parties' submissions, the Court found it prudent to obtain a statement from the U.S. government as to whether, in its view, "permitting the discovery sought by Plaintiffs will, as Boeing argues, interfere with U.S. foreign policy toward Iran by obstructing a key component of the international nuclear deal." (R. 258, Min. Entry (citation and internal quotation marks omitted).) The government, through the U.S. Department of Justice on behalf of the Executive Branch, has now filed a statement of interest, and represents that "the United States does not take a position on whether the Court should order the requested discovery." (R. 265, Gov't's Statement at 3.) According to the statement, the United States is "implementing its JCPOA commitments," and "those commitments do not require the Executive Branch to take any specific action with respect to efforts by judgment creditors of Iran to pursue post-judgment discovery or other enforcement proceedings."⁴ (Id. ) The government urges only that if discovery is ordered, the Court "supervise such discovery carefully, taking into account the sensitive nature of discovery into the property of foreign states and their agencies and instrumentalities."⁵ (Id. at 4.)

ANALYSIS

"[F]oreign sovereign immunity is a matter of grace and comity on the part of the United States." Rubin v. Islamic Republic of Iran , No. 16-534, ––– U.S. ––––, 138 S.Ct. 816, 821, ––– L.Ed.2d ––––, 2018 WL 987348, at *4 (U.S. Feb. 21, 2018) (citation omitted). For much of our nation's history, courts "deferred to the decisions of the political branches" regarding whether immunity applied in a given situation. Id. (citation omitted). In the 1970s, "Congress enacted the FSIA in an effort to codify th[e] careful balance between respecting the immunity historically afforded...