Flatow v. Islamic Republic of Iran (D.D.C. 1999)

In March of 1998, Judge Royce Lamberth of the U.S. District Court for the District of Columbia entered judgment against the Islamic Republic of Iran, ordering it to pay $225 million to the Flatow family for its role in the 1995 terrorist attack that killed Alisa Flatow. The story did not end there, as obtaining a judgment is often the beginning — not the end — of the journey.

Once a court renders a verdict, the next stage is collecting the judgment (execution). In a perfect world, the judgement debtor (here, the Islamic Republic of Iran) would write a check on the courthouse steps.

(An aside: Once, a multimillion-dollar civil claim stretched on for years. At its conclusion, the trial court ordered the defendant to pay a mere $500 dollars in nominal damages. The defendants joked about delivering a check the size of a lottery poster on the courthouse steps.)

Frequently, the judgment debtor claims he has no assets and refuses to pay. In such cases, the victorious plaintiff, now the “judgment creditor,” must turn to “post-judgment discovery,” a legal mechanism designed to uncover assets and satisfy the judgment.

Legal Framework

In federal courts, Federal Rules of Civil Procedure §69(2) governs post-judgment discovery: “In aid of the judgment or execution, the judgment creditor or a successor in interest whose interest appears of record may obtain discovery from any person. This rule authorizes judgment creditors to seek information from anyone — not just the judgment debtor — so long as it aids in execution.

In Flatow, the U.S. government had previously frozen millions (if not billions) of dollars in Iranian assets held in American banks worldwide. Locating those assets would facilitate collecting the $225 million judgment. In June 1998, Flatow’s lawyers served subpoenas on the U.S. Treasury and State Departments (both nonparties to the litigation), demanding a list of assets in which Iran held an interest. (A subpoena is a court order compelling a nonparty to testify or produce documents.)

The Department of Justice objected to the demand for information, arguing that the subpoenas were “overly burdensome in their scope” and would compel disclosure of material protected by “state secrets, law enforcement, and deliberative process privileges.” (Atavist Magazine)

Deliberative Process Privilege

It is questionable how the “Deliberative Process Privilege” would protect the United States from providing a list of Iranian assets. The Deliberative Process Privilege is an executive privilege that shields the government’s decision-making process, allowing for open discussion without fear of public scrutiny. It exists to protect “pre-decisional” and “deliberative” communications within executive agencies from disclosure under the Freedom of Information Act (FOIA).

Given its broad scope, the Deliberative Process Privilege is “the most frequent form of executive privilege raised.” In re Sealed Case (D.C. Cir. 1997). However, the deliberative process privilege is limited, and only applies to communications that are (1) “predecisional,” created before the agency’s final decision, and (2) “deliberative,” relating to the thought process of executive officials rather than purely factual content. A list of Iranian bank accounts and assets hardly seems to qualify.

Discovery: Hickman v. Taylor

To understand post-judgment discovery, one must first grasp the broader concept of discovery in American litigation. The Supreme Court articulated the underlying principle in Hickman v. Taylor (1947): “Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation.”

Discovery occurs in two stages: pre-judgment and post judgment.

Pre-Judgment (Pre-Trial) Discovery

Pre-trial discovery is the conventional discovery process — interrogatories, document requests, depositions — used to prepare for trial. It involves exchanging information between the parties, allowing each side to learn about the other’s case. Judge Richard A Posner observed (Economic Analysis of Law, p. 571): “A full exchange of information enables each party to form a more accurate estimate of the likely outcome of the case.”

Post-Judgment Discovery

By contrast, post-judgment discovery is aimed not at proving liability, but at uncovering assets. It enables a judgment creditor to identify income streams, property holdings, and other resources that may be seized or garnished to satisfy the judgment. Collection is the single goal.

Among the tools available are interrogatories: written questions the judgment debtor must answer under oath. Samples include:

1. List your full legal name, address and telephone number.
2. Identify all current employers and sources of income.
3. List all real estate in which you own an interest.
4. Describe all business in which you hold an ownership interest.
5. Identify any persons who owe you money and the amounts owed.
6. Disclose all financial institutions where you hold accounts, including account numbers.
7. Provide a list and location of all items of personal property you own worth over $100.

Under the Federal Rules, however, such interrogatories may only be served on parties to the litigation. In Flatow, Iran was the defendant, not the United States. Thus, Flatow’s attorneys could not serve interrogatories on the U.S. Treasury and State Department. Instead, they served a subpoena demanding information. The difference is crucial: interrogatories are written questions that one party sends to another party; a subpoena is a demand to compel even non-parties to provide information or documents.

In Summary

Flatow illustrates the practical challenges of collecting judgments, particularly against foreign sovereigns. The court awarded the Flatow family $225 million in damages. But justice was not served, as Flatow’s search for Iranian assets to collect on the judgment was met with bureaucratic stonewalling.

Eliyahu Asher Prero, Esq. is a practicing lawyer and certified mohel. He graduated magna cum laude from Seton Hall Law with a concentration in intellectual property law and served as a clerk for the Hon. Thomas A. Sarlo, Superior Court of New Jersey, Civil Division-Bergen County. He is currently an associate at the law firm Schenck, Price, Smith & King, where he focuses on constitutional law and civil litigation. Please address all correspondence to The Jewish Link.