U.S. District Chief Judge Royce Lamberth today ordered (PDF) Sprint Nextel Corp., to pay more than $610,000 it owes to an Iranian state telecommunications agency directly to the families of victims of a 1996 terrorist bombing in Saudi Arabia.
The families, plaintiffs in a civil action against Iran for its alleged involvement in the attack, have been trying unsuccessfully since 2006 to collect a more than $591 million default judgment.
Over Sprint’s objections and request for more time, Lamberth ordered the payment under a relatively new statute passed in 2008 that allows victims to seize money headed to a country or state-owned agency that owes a terrorism-related judgment.
“The Court will not stand as a roadblock on the path to justice by imposing new requirements or permitting supplementary procedures that Congress itself did not deem necessary,” Lamberth wrote.
Lead counsel for the plaintiffs is Richard Kremen of DLA Piper’s Baltimore office. Neil Gilman of Washington’s Hunton & Williams represented Sprint. Kremen and Gilman could not immediately be reached.
"Sprint raised issues in the District Court designed to clarify the scope of its license under federal law and to determine to whom the monies at issue should be paid. The court today has resolved those issues and Sprint is satisfied with the ruling and will comply with it," Sprint said in a statement.
The plaintiffs sued Iran in September 2000 in U.S. District Court for the District of Columbia. The Iranian government never participated, and Lamberth entered a default judgment in December 2006. The judgment grew after Congress passed the National Defense Authorization Act for Fiscal Year 2008, which expanded options for victims seeking enforcement of these types of judgments.
In response to the plaintiffs’ May 2010 writs asking telecommunications companies whether they did business with or owed money to Iran, Sprint replied that they periodically exchanged telecommunications traffic with the Telecommunication Infrastructure Company of Iran and at the time did owe them money.
The families moved to collect those funds. Sprint objected, arguing that if they paid the money to the victims, they could be at risk of facing legal action in an Iranian court that wouldn’t recognize a U.S. court’s authority. They also argued that they should be given a chance to bring the Iranian telecommunications company into the case as an interpleader.
Lamberth dismissed the liability issue, saying Sprint had failed to show it would be subject to the jurisdiction of an Iranian court and that it wouldn’t be able to defend against double liability. Given Iran’s non-participation to date, Lamberth wrote that he saw no reason to delay the case any longer.
“Today’s decision comes after more than a year of litigation and results in a turnover of funds amounting to less than one-tenth of one-percent of what plaintiffs are entitled to in these consolidated cases,” Lamberth wrote. “A step in the right direction, to be sure. But a very small one.”