Challenges faced
Although JASTA may appear to be attractive and extremely effective on the face of it, it contains numerous loopholes with problems and a number of unexpected and uncalculated consequences. The Act is yet a very infant one and it is difficult to predict and account for the possible risks and consequences that it may entail in the future.
Reciprocal arrangements could lead to untold consequences for the US. Prior to the introduction of JASTA, Argentina had already made a successful application before the ICJ against the US for violating its sovereignty over decisions in the US courts over the restructuring of Argentine debt.
Any challenges caused by JASTA that the US government faces may influence the conduct of US foreign policy, including in the Middle East, as the spheres of politics, diplomacy, trade and domestic litigation become more entwined through the use of JASTA and any foreign parallel legislation. The most profound consequence may be that a US administration may lack confidence to act overseas when it otherwise would have done so.
The enactment of the terrorism exception to state immunity under the FSIA has generated numerous lawsuits against designated states: Cuba, Iran, Iraq, Libya, etc. However, US courts have mostly rendered default judgments, as the foreign states did not appear in court. Moreover, in those cases where immunity was raised and damages were awarded to the plaintiffs either compensatory and/or punitive, it has been difficult to enforce and execute those judgments, either because those foreign states do not recognise damages judgments given by US courts, or on account of those states having insufficient assets in the USA.
The recovery of damages, punitive damages in particular, has therefore met with enormous challenges. The legislation that enabled lawsuits against foreign states designated by the USA as sponsors of terrorism has even been criticised as offering ‘hollow-rights’ and false hope to the plaintiffs. Foreign states may simply remove their assets from the USA to avoid judgment enforcement, while provisional attachment or freezing of the assets raises important due process issues, especially if the foreign state is not heard in court. The US government even paid damages out of US Treasury funds to holders of judgments against Iran. For example, whilst Iranian assets in the USA amounted in 2009 to only US$45 million, awards of more than US$10 billion had been granted by US courts against that state by 2009 (in lawsuits linked to the Iran hostage crisis, support for Hezbollah and the 9/11 attacks, among others). By 2016, the awards granted by US courts against Iran in terrorism-related cases amounted to more than US$56 billion. In a very recent judgment in Bank Markazi v. Peterson, the US Supreme Court ruled that a 2012 bill, which allowed 1 000 families access to Iranian funds in US banks after they had won a 2007 lawsuit against Iran in a US court, superseded provisions on the immunity from execution of central banks. Some experts considered the ruling an infringement of international law, unless the USA resorted in this way to a countermeasure for an internationally wrongful act by Iran. Iran has protested against the confiscation of its assets and introduced a complaint against the USA before the ICJ. Iran has meanwhile passed legislation allowing for Iranian civil suits against the USA and for countermeasures against US assets in third countries. Moreover, since Canada has adopted a similar act for victims of terrorism, many cases have been filed before Canadian courts for execution of US judgments delivered against state sponsors of terrorism.
Moreover, the damages awarded by US courts are considered an important obstacle to the US conduct of foreign relations, should the USA wish to normalise relations with these states. Congress has generally insisted that punitive damages judgments must be paid or settled before normalising relations. But paying billions of dollars in damages is regarded as unrealistic.
Finally, some consider that there is little that civil litigation can do to deter terrorism, pointing to the futility of punitive damages in this area, although some compensation has been obtained by plaintiffs. As multiple courts have delivered judgments against the same defendants and often arising from the same terrorist action, the awards granted are now considered excessive and unable to deter terrorism and the sponsoring of terrorism. In the case of Iran, the chief judge of the District of Columbia District Court concluded in 2009 that ‘civil litigation against Iran under the FSIA state sponsor of terrorism exception represents a failed policy’ because these cases ‘do not achieve justice for victims, are not sustainable and threaten to undermine the president’s foreign policy initiatives’.
Impact on other countries
Although the discussion about the international implications of JASTA has focused primarily on Saudi Arabia due to the Kingdom’s alleged involvement in the 9/11 terrorist attacks, the proposal has attracted attention in several European capitals even though official reactions to the Act are rare.
1. Saudi Arabia: On numerous occasions, the Saudi government has warned of the possibility that the Kingdom would sell off US$750 billion in American assets, if the bill was passed.
2. Gulf Cooperation Council: The Secretary General of the GCC, Abdellatif Zayani, expressed GCC members’ concern with regard to JASTA, which in their view contradicts the foundations and principles of relations between states, notably the sovereign immunity principle’.
3. Russia: The Foreign Ministry has severely criticised the new law and the United States for demonstrating ‘total disregard for international law’.
4. France: Cited a the New York Times article, Pierre Lellouche, a Member of the Foreign Affairs Committee in the National Assembly stated that JASTA would cause a ‘legal revolution in international law with major political consequences’ and declared that he would pursue legislation that would permit French citizens to sue the United States with cause should the bill enter in force.
5. The Netherlands: In July 2016, the Dutch Parliament submitted a formal letter in advance to the Judiciary Committee hearing on the JASTA proposal. In a binding motion on the JASTA bill, members of the Parliament considered JASTA to be ‘a gross and unwanted breach of Dutch sovereignty’ and declared that ‘the entry into force of JASTA in its current form’ was ‘unacceptable for the Netherlands’. At the same time, the letter expressed support for the concerns expressed by the US Department of State.
6. United Kingdom: British politicians have also raised the risk of legal suits against the government. Under JASTA, US citizens might sue the British government claiming a negligent lack of efforts to tackle Islamic radicalism in earlier decades.
In light of the potential changes that the JASTA bill would bring for the well-established legal doctrine, the domestic and international implications of the bill were discussed extensively in the House of Representatives Foreign Affairs Committee hearing on The US – Saudi Arabia Counterterrorism Relationship and the Judiciary Committee hearing on The Justice Against Sponsors of Terrorism Act before the bill was eventually adopted.
The supporters of JASTA rebuff most of these concerns.
Firstly, they argue that the risk of lawsuits can act as a deterrent to donors, corrupt charities, financial institutions and foreign governments that provide funding and logical support for terrorist organisations. They also claim that civil actions targeting the assets of foreign states that support terrorism can ultimately reduce the ability of international terrorist groups to carry out attacks.
Secondly, to address diplomatic concerns, JASTA gives the secretary of state the power to intervene in any civil litigation against a foreign state alleging support to international terrorism, and obtain a stay in the proceedings while government-to- government discussions proceed between the USA and a foreign government. The supporters of the bill also underline that it is narrowly tailored so as to limit the group of countries potentially affected. It imposes a geographical limitation to injury or death caused by an act of international terrorism occurring in the United States and does not confer jurisdiction on US courts in cases of attacks abroad. The definition of ‘international terrorism’ in US law imposes additional limitations. On the other hand, a mere omission or a tortious act or acts that constitute mere negligence do not constitute grounds for waiving the sovereign immunity of a foreign state.
Procedural challenges and reciprocity
Additional complications arise from the fact that even if a specific case fell beyond the scope of JASTA and hence state immunity was to be maintained, a decision to that effect would need to be taken during the court’s proceedings. This implies that in order to establish non-involvement or ‘mere negligence’ of a specific state that state would need to present evidence in its defence in the courtroom. Such evidence is very likely to be of a sensitive nature, which could consequently harm the interests of that country. Given current international practice, it is very unlikely that any government would engage in such proceedings. At the same time, the adoption of JASTA will require the EU Member States to consider whether to introduce similar rules with regard to the United States.