April 29, 2015 / 5:18 AM / 2 years ago

In anti-terrorism lawsuits, verdicts are just the first battle

An injured man is removed from the wreckage after a bomb went off in Nairobi, Kenya, in this file photo from August 7, 1998. REUTERS/Files

(Reuters) - One of the lawsuits was filed by Sara Hensley, whose father was beheaded in Iraq by Islamic militants; another by Patrick Baker, who was shot in the head during the hijacking of an EgyptAir flight by the Abu Nidal Organization; the third came from Marvin Wilson, who was abducted by Kurdish separatists in Turkey.

The three litigants and their co-plaintiffs all prevailed in court actions, winning judgments that collectively totaled more than $1.3 billion against Syria, an alleged sponsor of the groups involved in the attacks.

But the monetary awards didn’t end the legal battles. Instead, plaintiffs in the three lawsuits found themselves in a Chicago court facing entirely new adversaries: each other. All three hoped to claim the same pot of $82 million in frozen Syrian assets.

In the ten years following the September 11, 2001 attacks, the number of lawsuits filed under the U.S. Anti-Terrorism Act and similar laws more than tripled compared to the decade before, and plaintiffs have won billions of dollars worth of judgments in U.S. courts, according to Westlaw data. But the data and a review of those court filings also show how difficult it is for victims to actually recover assets, even after successful lawsuits.

Judgments awarded against organizations or governments are often unenforceable. When assets can be identified and claimed, they often fall far short of the amount of the award. And in some cases, as with Hensley, Baker and Wilson, several would-be claimants are pursuing the same assets.

Attorney Robert Tolchin, who represents Wilson in the current battle over Syrian assets, described the legal wrangling this way: “It’s like a carcass, and two lions and a hyena are trying to eat it.”

For some litigants, the long legal battles seem worth the frustrations. Wilson, now 73, said he sees the process as a way of combating extremism. “My thought was anything we could do to try to help eliminate support of terrorism would be a great thing,” he said.

But for others, the long years of legal proceedings have taken a toll.

Frank Pressley, 62, was a State Department employee in Kenya at the time of the embassy bombing there. The blast shattered his shoulder and embedded more than 100 pieces of glass in his face, among other injuries. Along with other plaintiffs he sued 13 years ago, naming the Republic of Sudan as one of the defendants. A judge awarded them about $488 million last year, but the case has been appealed by Sudan and collection efforts can’t begin until the appeal has been decided.

Today, though he praises his attorneys and doesn’t regret filing suit, Pressley describes the process as “ridiculous.”

“There’s no reason to drag all this through the court system,” he said. “I want to get on with my life.”

At least 146 lawsuits have been filed on behalf of hundreds of victims since 9/11, according to Westlaw federal courts data. More than a third of the cases named Iran as a defendant, while others named banks, organizations like Hamas, or other states, including Syria and Cuba.

Judges often group related cases into unified proceedings, making it difficult to tally the total number of individually filed lawsuits that have been resolved in favor of victims, or the total value of those judgments. In cases where defendants do not contest the actions, as often happens, plaintiffs tend to prevail.

Once a plaintiff obtains a judgment, the next step is a separate lawsuit to collect - if a plaintiff is able to identify any assets. Reuters identified 35 federal court proceedings to seize assets initiated since 9-11. Nine have resulted in final orders to turn over assets, and the combined value of seven of those is about $37 million, according to Westlaw. The amounts in two other cases are unclear from court filings.

Most of the others are still being litigated. Iran’s central bank, for instance, has asked the U.S. Supreme Court to stop nearly $2 billion from being turned over to victims. Earlier this month the high court asked the Obama administration whether it should hear the appeal.

When judgments are awarded against countries officially designated as state sponsors of terrorism by the U.S. government, plaintiffs can subpoena the Treasury Department for information about U.S. bank accounts and other frozen assets.

That is what attorneys for Hensley’s family and relatives of another contractor beheaded in Iraq did after winning their $413 million judgment against Syria. In December of 2011, the Treasury Department pointed them to frozen Illinois bank accounts worth $82 million.

Baker, along with other EgyptAir hijacking victims, received the same asset information from Treasury after winning an uncontested $602 million judgment against Syria in 2011. But Hensley’s lawyers filed their claim in Illinois federal court days before Baker’s lawyers, and the 7th U.S. Circuit Court of Appeals ruled last June that because they were first in line, they would get the full $82 million, while the EgyptAir hostages would get nothing.

Asset collection in terror cases is “a cruel race,” the court wrote, and “the terms of the race are essentially winner-take-all.”

But, the race wasn’t quite over. Just a few days before a judge was set to release the money in August, Gates’ attorney John Salter got a surprise email, according to court filings.

Wilson and a co-plaintiff, whose families had won a $338 million judgment against Syria, wanted a piece of the $82 million, too. Unless negotiations began immediately, their attorney Tolchin wrote, they would litigate. Such a move would further delay any payout.

In response, Salter said Tolchin’s legal arguments were frivolous, because they were the same that the 7th Circuit had just rejected for the EgyptAir victims.

“Proceed at your peril,” Salter warned Tolchin in August.

Tolchin went to court, and in October U.S. District Judge Virginia Kendall rejected his clients’ bid for any of the $82 million. The case is now on appeal.

Salter also asked the judge to punish Tolchin for his litigation tactics, which Tolchin defended as legitimate. Kendall has not yet ruled. Hensley’s lawyers stand to make about $30 million in fees from the Chicago case, according to a Tolchin court filing. Salter declined to comment.

Such legal battles have led one judge to wonder whether lawsuits filed by victims of attacks bring any benefits. U.S. District Judge Royce Lamberth, who issued a $2.65 billion judgment against Iran in one case, wrote in 2009 that “neither tough rhetoric nor large, unenforceable court judgments will help to resolve these extraordinarily complex matters.”

Reporting by Dan Levine in San Francisco; Editing by Amy Stevens and Sue Horton

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below