* Lawyers say ruling puts victims' families one step closer
* U.S. victims of overseas attacks rarely get relief in
* "Iran should ... be made to pay for its crimes" - victims
By Nate Raymond and Bernard Vaughan
NEW YORK, March 1 A U.S. judge issued a ruling
favoring victims of the 1983 Beirut Marine barracks bombing who
are seeking to collect $1.8 billion in Iranian funds held at
While the full ruling by U.S. District Judge Katherine
Forrest in Manhattan remains under seal, an order entered by
Forrest Thursday indicated that she ruled for the plaintiffs on
a motion seeking to have the funds turned over.
Lawyers for the victims' families said the order puts them
one step closer to collecting the money, while at least one
defendant said it was considering an appeal.
If the funds were released to the victims, it would mark a
rare instance of victims of overseas attacks successfully
obtaining monetary relief through the U.S. courts. Enforcement
of judgments obtained against foreign nations in these cases can
take years, often with little to no success.
The lawsuit in Manhattan federal court stems from attempts
by family members and survivors of 241 U.S. servicemen who died
during the bombing to enforce a $2.65 billion default judgment
they won in 2007 against Iran. The lawsuit alleged that Iran
provided material support to Hezbollah, which carried out the
In 2008, the U.S. Treasury Department uncovered the money at
the New York branch of Citibank, part of Citigroup Inc. The
plaintiffs subsequently sued in 2010 in an effort to have the
$1.8 billion go toward satisfying their judgment.
The defendants in the lawsuit include Citi; Bank Markazi,
Iran's central bank; and Luxembourg-based bank Clearstream S.A.,
which deposited the funds at Citi and held Iranian funds in
accounts in Luxembourg.
Clearstream and Rome-based Banca UBAE, which is also named
as a defendant, moved to dismiss the lawsuit, as did Iran's
central bank, which argued the plaintiffs couldn't sue it under
the Foreign Sovereign Immunities Act of 1976. Clearstream also
sought to vacate restraints placed on the account starting in
RELIEF, REASONING UNCLEAR
The plaintiffs meanwhile moved for summary judgment, seeking
a court order forcing the defendants to turn over the funds in
the Citi account.
Judge Forrest on Thursday granted the plaintiffs' motion for
summary judgment and denied the banks' motions to dismiss the
It's unclear what relief, if any, Forrest ordered. The
decision's exact reasoning also isn't known, as Forrest filed
her written opinion under seal.
Forrest directed the parties to confer and to submit a
proposed schedule by March 15 "to resolve the remainder of the
case." The parties were also ordered to advise her on what parts
of her opinion, if any, they believe should remain under seal.
It was unclear from the decision what information the
parties might want redacted. The case is subject to a protective
order in order to shield confidential information.
Lynn Smith Derbyshire, a spokeswoman for the Beirut bombing
victims, hailed Judge Forrest's ruling in a statement and said
her side was "almost there."
"That bombing was vile," she said. "Iran should by every
measurement be made to pay for its crimes, and Judge Forrest has
shown wisdom in her ruling."
Nicolas Nonnenmacher, a spokesman for Clearstream, said in
an email that the bank was constrained from commenting since the
case is subject to a protective order. But Clearstream "must
protect assets of its customers," he said.
"In line with those obligations and its rights as owner of
its account at Citibank, Clearstream may appeal this court order
because of its fiduciary duty to protect assets in its custody
and to protect its legal rights," he said.
Citigroup spokeswoman Molly Meiners said the bank "will
continue to follow all applicable laws and orders and
instructions from the court."
Andreas Frischknecht, a U.S. lawyer for Bank Markazi at law
firm Chaffetz Lindsey, said in an email that he couldn't
comment, noting the opinion's reasoning for now is under seal.
The case is Peterson v. Islamic Republic of Iran, U.S.
District Court, Southern District of New York, 10-04518.