Circuit Clears the Way for Payment of Iran Judgments

, The Associated Press

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A smoke cloud rises from the rubble of the bombed barracks at Beirut International Airport in October 1983.
A smoke cloud rises from the rubble of the bombed barracks at Beirut International Airport in October 1983.

A federal appeals court on Wednesday ruled that $1.75 billion for terrorism-related judgments against Iran can be distributed to victims of attacks, including a 1983 bombing that killed 241 Marines in Lebanon.

Washington lawyer Thomas Fortune Fay said that the ruling by the U.S. Court of Appeals for the Second Circuit in Peterson v. Islamic Republic of Iran, 13-2952-cv, affects 1,300 individual cases that were combined in New York.

A three-judge panel rejected arguments by attorneys for Bank Markazi, the central bank of Iran, which had argued that turning over the money would conflict with U.S. obligations in a 1955 treaty signed with Iran. The circuit said turning over the assets was "entirely consistent" with the terms of the treaty.

Lawyers for the bank did not immediately return a message for comment on Wednesday.

Fay said the decision was welcomed by several hundred families affected by those killed or injured in the attack on the Marines barracks. He said each family was likely to receive about $5 million after attorney fees are subtracted once the appeals are completed. The money already is in the custody of a court-appointed trustee after President Barack Obama in 2012 ordered property and interests of Iran, including assets of Bank Markazi, be blocked.

"We're certainly pleased with the ruling," Fay said. "These folks have stuck with it all these years."

Fay said the litigation began about 13 years ago, and roughly 87 percent of the judgment approved last year by Southern District Judge Katherine Forrest (See Profile) will go to victims of the attack in Lebanon. The judge said she had authority to order the judgment under the Terrorism Risk Insurance Act of 2002 and a law enacted specifically to address assets in the case.

James P. Bonner, another lawyer for victims, called it a "wonderful day for our deserving clients, who have waited decades for some justice for Iran's terrorist acts."

In filing lawsuits to recover money from Iran, lawyers had argued that evidence showed the Iranian government acted alone, and that its late supreme cleric, Ayatollah Ruhollah Khomeini, and other top leaders ordered, authorized and executed the bombing.

A truck carrying more than 2,000 pounds of explosives sped past a sentry post and exploded outside the Beirut barracks in the early hours of Oct. 23, 1983, as many servicemen slept. Lawyers for victims contended the explosion was part of a larger plot to drive all Americans out of Lebanon.

The Marines killed and wounded in the attack were part of a multinational peacekeeping mission. The lawsuit against Iran was filed under a 1996 U.S. law that allows Americans to sue nations that the State Department considers sponsors of terrorism for damages suffered in terrorist acts.

The circuit's decision was written by Judge John Walker (See Profile), joined by judges Jose Cabranes (See Profile) and Ralph Winter (See Profile).

Iran was represented by the firm of Chaffez Lindsay in New York.

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Originally appeared in print as Circuit Clears the Way for Payment of $1.75 Billion in Iran Judgments

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