The Legal Ironies of Regime Change:
Iraq Recovers Its Sovereign Immunity, and Former U.S. POWs, Former Hostages, and September 11 Victims' Families Lose Out

By PAUL WOLFSON

Thursday, Oct. 02, 2003

Recently, three small groups of individuals - a group of former Gulf War POWs; a group of former hostages of Iraq; and a group of September 11 attack victims' families - have been trying to get redress against the Saddam Hussein regime in the courts. Until recently, it seemed that all three groups might have a chance not only of winning their cases, but also of actually recovering some damages against Iraq.

But now a cruelly ironic twist of fate had intervened. Regime change has made Iraq our friend, not our enemy - and the U.S. government, which previously had encouraged these lawsuits, no longer does.

The U.S. government has promised that Iraq's assets should be used for the benefit of the people of Iraq. Thus, it has acted to prevent the POWs, hostages, and September 11 victims from reaching any blocked Iraqi assets in the U.S..

The three groups are challenging the Bush Administration's actions. On October 3, the D.C. Circuit will hear argument on one of the cases, Acree v. Snow. But whether or not the three groups of plaintiffs prevail, the Administration and the Congress should reconsider the actions that may prevent them from receiving justice.

The Obstacles to Suing a Foreign Government, Especially When It Supports Terrorism

It has never been easy to sue a foreign government. Because of sovereign immunity, it's usually impossible to sue a foreign state even for heinous official acts.

And it's even harder to recover against a foreign regime that commits or supports terrorism. The most egregious offenders lack diplomatic relations with the U.S. and maintain only a ghostly presence here, often attached to the United Nations.

Even if someone can be served in such a lawsuit, the defendant often fails to show in court. In some cases, a plaintiff can get a favorable judgment anyway. But enforcement will still be next to impossible, because most rogue nations keep their funds outside the U.S.. And if they do have funds here, those funds are often blocked by the President, using broad powers granted by Congress.

In 1996, however, Congress removed several of the legal barriers to suing regimes that the State Department - seeking to exert pressure against rogue states - has designated as state sponsors of terrorism. Through a law known as the Flatow Amendment, Congress stripped state sponsors of terrorism of their immunity to being sued for claims based on torture, hostage taking, and extrajudicial killings in violation of international law.

While the Flatow Amendment made it possible for plaintiffs to bring rogue regimes into court, it left uncertain whether they could obtain anything other than a paper recovery. Fortunately, Congress addressed that problem in the Terrorism Risk Insurance Act (TRIA). TRIA allows persons with a court award against a terrorist-supporting state to satisfy claims from the U.S. assets of the rogue country that the President has blocked.

(There was one other legal change also, relating to proof: Under Flatow and TRIA, the plaintiffs can't recover purely based on filing a complaint, serving papers on the defendant, and obtaining a default judgment when the defendant does not appear in court. Instead, they have to submit evidence to the court showing the rogue state was behind the act of terror.)

It seemed plain that plaintiffs could never recover their full damage award from the blocked assets alone. But, at least, victims of torture and murder could recover something against regimes like Saddam Hussein's Iraq - and that was progress.

The Three Groups, Their Suits, and The Upshot of Regime Change in Iraq

This background brings us to the current plight of the three groups suing the Saddam Hussein.

The first group is made up of POWs captured during the first Gulf War, who claim they were and abused and tortured in violation of international law. The second group is made up of individuals, mostly civilians stationed in Iraq or Kuwait when Iraq invaded Kuwait in 1990, who claim they were taken hostage and abused, also in violation of international law. Finally, the third group - made up of families of victims of the September 11 attacks - claims that Iraq assisted Al Qaeda in preparing the attacks and should be forced to pay for this act of terrorism.

All three groups have at least plausible claims under international law. Nevertheless, their suits now seem unlikely to succeed - due to recent legal developments.

When President Bush commenced hostilities in Iraq, Congress authorized him to exclude Iraq from the reach of any law applying to state supporters of terrorism. The idea was to allow the President to lift U.S. sanctions on countries that do business in Iraq, now that Iraq is in friendly hands. But a by-product of the law is to take blocked assets out of the reach of plaintiffs who suffered torture and abuse by the predecessor regime.

Meanwhile, in a separate move under related wartime legislation, the President confiscated all Iraqi assets and vested them in the U.S. Treasury Department - essentially making them U.S. assets protected by U.S. sovereign immunity.

The result of these actions is that the plaintiffs now will not be able to enforce any judgment they may receive.

Why the Bush Administration Has Reversed Itself, and Why It Should Reconsider

Why has the U.S. government taken away, with one hand, what it gave with another, in the Flatow Amendment and the TRIA?

Part of the answer is that the national security establishment has always disliked Congress's policy of allowing litigation against rogue regimes. It believes that U.S. pressure on Iraq, Iran, Libya, Syria, and similar states should be carried out through diplomacy, not litigation.

The criticism has some merit. Diplomacy works slowly and with mixed results, but it is more flexible than enforcement of a court award, and it can sometimes succeed. (For instance, the international community worked for years to pressure Libya to make compensation for the Lockerbie bombing and eventually had some success.) In contrast, gigantic court awards for private plaintiffs, not subject to government control, only complicate the picture, and may make countries less amenable to diplomatic resolutions.

But this criticism ignores an important aspect of the current legal situation. Congress already allows lawsuits against rogue states for their official acts of torture, and has attempted to ensure that plaintiffs in such suits can achieve at least a partial recovery of damages. Barring recovery in the event of regime change, as occurred in Iraq, means the Flatow Amendment and the TRIA offer, for some plaintiffs, only false promises of justice.

Regime change does not negate the reality of prior injustice. The POWs and hostages who were abused by the former Iraqi regime have as legitimate a claim to recovery as do relatives of victims murdered by regimes in Cuba, Libya, and other countries that are still out of favor with the U.S..

If Congress truly wants victims of rogue state terrorism to recover for their injuries, then it should treat victims equally, and not subject them to the caprice of political events. It should thus allow the three groups' suits against the Saddam Hussein government to go forward despite regime change.


Paul Wolfson is a Supreme Court and appellate specialist at Wilmer, Cutler & Pickering in Washington, D.C. He can be reached as paul.wolfson@wilmer.com.

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