June 27, 2008

Background on Persepolis Artifact Case


Washington, DC – Due to a March 31, 2008 Federal District Court ruling in Massachusetts, Iranians around the world are feeling their grip on their heritage loosen. Artifacts from the ancient city of Persepolis and archeological site, Chogha Mish that are currently on display by Harvard University and the Museum of Fine Arts in Boston are now on the chopping block. Due to the court case, Rubin et al v. Islamic Republic of Iran, these artifacts can now be sold on behalf of several plaintiffs seeking to recover $259 million in court-awarded damages against the government of Iran. The following is a brief background of the artifact case and its proceedings.
Over a decade ago, several Americans were victims of a bombing carried out by the Palestinian terrorist organization Hamas along a Jerusalem shopping promenade. Israeli police quickly arrested two Hamas operatives who were later convicted by an Israeli criminal court on multiple counts of murder, attempted murder, and membership in a terrorist organization. In 2000, several of the bombing victims filed suit in the United States to recover damages from the government of Iran on the grounds that it provided material support to Hamas. The plaintiffs named as defendants: Iran, the Iranian Ministry of Information and Security (MOIS), Ayatollah Ali Hoseini Khamenei, Ali Akbar Hashemi-Rafsanjani, and Ali Fallahian-Khuzestani. Rather than defend the charges in a U.S. court, Iran’s government instead chose to boycott the proceedings because it contended they were illegitimate. Experts hired by the plaintiff provided uncontroverted evidence that Iran provided terrorist training and economic assistance to Hamas during the 1990s. Yigal Pressler, an Israeli Brigadier-General and advisor to Israeli Prime Minister Netanyahu, testified that there existed a crucial link between Hamas and Iran.

Because Iran chose not to defend the suit, there was neither cross-examination nor arguments testing the plaintiffs’ expert’s testimony, and a federal court entered a default judgment against the Iranian government. Likewise, in 2003 another federal court awarded the victims $71.5 million in compensatory and $37.5 million each in punitive damages – totaling over a quarter-billion dollars. 

Despite an executive order freezing Iranian state assets in the United States in 1979, the plaintiffs faced an uphill struggle to collect on their judgments. According to the court case of Smith v. Federal Reserve Board of New York, plaintiffs are not necessarily entitled to execute civil judgments against foreign assets seized by the U.S. government.

In addition to the courts, legislation also made it difficult to execute judgments against foreign governments. The Foreign Sovereign Immunities Act of 1976 (FSIA) codified a longstanding history of precedent and practice that gave foreign states immunity from suit in U.S. courts. Unless an exception applies, the FSIA provides that the property of a foreign sovereign, as well as that of its agencies and instrumentalities, is immune from lawsuits in U.S. courts. The important exception to this case was added in 1996 to address terrorist actions by foreign states. Thus, this immunity against court judgments is lost if the country is designated as a “state sponsor of terrorism” by the U.S. government and the lawsuit seeks to recover for an “act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources …for such an act.”

While lawsuits seeking to seize a nation’s assets in the United States were now authorized by the terrorism exception, satisfying judgments against assets was still difficult because the executive branch often resisted such attempts. In response, Congress enacted the Terrorism Risk Insurance Act of 2002 (TRIA) allowing plaintiffs to satisfy judgments against terrorist states or agencies by seizing frozen assets. Notably, despite the TRIA, the president still holds the ability to prevent property seizure against foreign sovereigns if preventing such seizure would further national security. The option is currently available to President Bush to invoke the presidential waiver and thus prevent the seizure of Iranian antiquities. It would even be consistent with this White House’s expansive view of the executive branch’s powers. In a sense, the courts are usurping the power of the executive to make foreign policy – a power explicitly conferred to the executive branch in the Constitution. 

Rubin et al. Plaintiffs Seek to Satisfy Judgments

The Rubin et al. plaintiffs initially sought to satisfy their judgment conventionally, by targeting two Bank of America accounts containing funds of Iran’s Consulate General. They convinced a federal court that the money was subject to the new Terrorism Risk Insurance Act and were set to collect, but there was a wrinkle. They failed to receive funds from the bank accounts because a prior lawsuit from other plaintiffs had already filed a lien on the accounts. Given the size of the earlier lien and the accounts, there would be nothing left for the Rubin et al. plaintiffs.

With a win in the courts but still no money, the plaintiffs then sought to execute their judgment against three Iranian bank controlled accounts held by the Bank of New York. However, the federal court followed earlier court precedent and held that the plaintiffs could not execute against these accounts because they were not considered “blocked” assets under the Terrorism Risk Insurance Act.

After two successive failures, the plaintiffs successfully executed their judgment against an Iranian-owned residence in Texas. This house was located near the Reese Air Force Base, where Reza Pahlavi had once received fighter jet training. The Texas-sitting federal court issued an order directing the sale of the house, netting $390,000 for the plaintiffs – far short of their $250 million plus judgment.

Targeting Antiquities

As a result of their inability to execute judgments, the Rubin et al. plaintiffs decided upon a radical new strategy. They decided they would now target Persian antiquities held in museums nationwide to satisfy their judgments. The legal theory they would utilize asserts a right to Persian antiquities regardless of whether the museums claimed full ownership, or whether they were on loan from Iran. The Rubin et al. plaintiffs then sued several U.S. institutions, alleging that they possessed artifacts that can satisfy their legal judgments against the Iranian government. Those institutions included the Oriental Institute of the University of Chicago, the Field Museum of Natural History in Chicago, the University of Michigan’s Museum of Art and Kelsey Museum of Archaeology, the Detroit Institute of Arts, Harvard University, and the Boston Museum of Fine Arts.

The case involving the University of Chicago was the first to move forward, targeting ancient artifacts from Persepolis and Chogha Mish. The Persepolis Collection was discovered in the 1920s and 1930s, consisting of tens of thousands of clay tablets dating to the Achaemenid Empire. These artifacts have been extremely important to a wide range of academics, including linguists, sociologists, historians, and classicists. In the 1930s, the University of Chicago and Iran’s National Museum entered an agreement to allow researchers to catalog and study the collection in the United States. After the tablets were studied and properly cataloged, they would be returned to Iran. Approximately 8,000 tablets yet to be studied still remain in the United States with the University of Chicago. These tablets are targeted by the Rubin et al. plaintiffs seeking to satisfy their judgment.

The Chogha Mish Collection was the result of excavations at Chogha Mish, Iran in the 1960s and 1970s. This Collection is notable because it served as evidence that humans occupied the area as far back as 6,000 B.C. – at least a millennium earlier than previously thought. Similar to the agreement regarding the Persepolis Collection, the University of Chicago and the Iranian government agreed that the artifacts would be returned once studied. By 2005, study was concluded and the artifacts were being readied for return to Iran. However, just before the artifacts were to be returned, the U.S. State Department halted the export because of a pending claim in the Iran-U.S. Claims Tribunal in The Hague.

The University of Chicago, in Illinois Federal District Court, first asserted that the artifacts were immune from attachment, the legal term for the process whereby property is seized to satisfy a judgment. The University claimed the Foreign Sovereign Immunities Act provided immunity to Iran’s property. However, the court decided that only Iran could assert the immunity of its property. As a result, despite not representing themselves at the liability or damages stages of the trial, Iran entered the case at this late stage. The Iranian government, through counsel, immediately moved for the case to be dismissed under the FSIA’s sovereign immunity protections. The plaintiffs countered with two main points. First, they argued that a FSIA exception applies where the property was used commercially. Second, they urged that regardless of commercial use, the subsequent Terrorism Risk Insurance Act legislation allows them to seize the artifacts.

Targeting Antiquities at the Museum of Fine Arts and Harvard University

The case involving Harvard University and the Museum of Fine Arts, Boston is the other major case in which the Rubin et al. plaintiffs are seeking to seize ancient Iranian artifacts to satisfy a legal judgment of a U.S. court. Harvard University has three on-campus museums that house more than 160,000 artifacts from all over the world. The Museum of Fine Arts, Boston was founded in 1870 and has the second largest collection in the Western Hemisphere, next only to the Metropolitan Museum of Art in New York. Its ancient Near East collection includes thousands of years of artifacts from Nubia, Egypt, Iraq, Iran, Turkey, Cyprus, Greece, and Italy.

In response to the plaintiffs’ attempts to seize the artifacts, Harvard argued that the items sought were donated to the museum by Grenville Winthrop, an avid art collector, upon his death in 1943. Because Harvard and the Museum of Fine Arts believed they owned clear title as a result of Mr. Winthrop’s donation, they claimed they did not hold any antiquities owned by Iran. However, knowing the Rubin et al. plaintiff strategy, they argued that in the event they did own Iranian property, sovereign immunity afforded by the FSIA would mean the antiquities were immune from a U.S. court judgment. Here, the main legal issue concerned whether the antiquities are considered “blocked assets” under the Terrorism Risk Insurance Act. If the antiquities did qualify as blocked assets, then they would be subject to seizure and auction to satisfy the plaintiffs’ judgments. The Massachusetts Federal Court noted that the executive order only blocked those assets that were “uncontested and non-contingent property interests of the Government of Iran.”

The TRIA defines “blocked assets” as “any asset seized or frozen by the United States…under the International Emergency Economic Powers Act.” During the 1979 storming of the U.S. embassy by students, all Iranian assets were frozen by President Carter’s Executive Order pursuant to the International Emergency Economic Powers Act. However, during the subsequent Algiers Accords, many of these assets were “unblocked” by executive order.

The Algiers Accords were signed between the United States and Iran in 1981 to normalize relations between the two countries after the Iranian Revolution, taking of American hostages at the U.S. embassy, and subsequent freezing of Iranian assets in the United States. To implement the Algiers Accords, President Carter signed an executive order designed to undo his earlier order freezing assets and to place relations between the two countries in the position they were prior to November 14, 1979. Applying that specifically to the artifacts, with the exception of the Persepolis and perhaps the Chogha Mish artifacts, ownership would return to the museums. Importantly, according to section 535.333 of 31 CFR Ch. V from the Office of Foreign Assets Control, Treasury in the executive order for blocked assets specifically provides that property shall not be contested solely because they are sought to satisfy a court judgment.

The Rubin et al. plaintiffs argued that since Harvard and the Museum of Fine Arts claimed they owned the antiquities, when in fact Iran owned them, the assets were “contested” and thus “blocked” under the TRIA. The plaintiffs argued under a 1930s Iranian export restriction law that forbids the export of cultural property without proper governmental authority. In absence of proof of proper removal from Iran, the plaintiffs argued that legal title remained with Iran and not the museums. Again, rebutting this was difficult because the Iranian government chose not submit to the court’s jurisdiction and defend the case. Thus, the court held that the artifacts in possession of the Museum of Fine Arts and Harvard were contested and thus subject to attachment.

The court’s reasoning was troublesome, for several reasons. First, according to the court’s analysis, all one needs to do in order to “block” assets is to claim property is owned by Iran, without any actual proof. Under the court’s calculus, a mere allegation is enough to “block” them and subject antiquities to seizure to satisfy judgments. The plaintiffs never offered any affirmative proof that the artifacts are actually owned by Iran’s government. Second, the court’s analysis reached back and retroactively blocked the antiquities. Iran never contested the ownership of the artifacts. The only challenge to the title of the antiquities did not come until 13 years after the Algiers Accords arguably declared the assets unblocked, and that was by the Rubin et al. plaintiffs seeking to seize and auction them. Common sense dictates that Congress could only have intended for plaintiffs to be able to recover against assets that are actually claimed or owned by Iran, not museum pieces once owned by Iran, which is not the case here. Additionally, under a specific exclusion to the International Emergency Economic Powers Act (IEEPA), President Carter could not have frozen informational materials. The Act defined artworks as informational materials, including artworks. Even if the artifacts are not considered artwork, ancient Iranian artifacts would clearly be included under any plain meaning of informational materials, as they provide information and knowledge about Iran’s ancient culture. Congress clearly intended to preserve the free flow of information across cultures by creating specific exclusions to the IEEPA – and the Massachusetts Federal Court plainly ignored this. Unless the Museum of Fine Arts or Harvard can win on appeal, the ancient artifacts may then be removed from the museum and sent to auction.

The Next Steps

The Massachusetts Federal Court that issued the most recent opinion certified its rulings to be reviewed by an appeals court, before the litigation is concluded. Courts typically certify their rulings when the outcome of the case would be conclusively determined by the contested issue. This means that a higher court will likely review the Massachusetts District Court’s holdings.

Unless the museums can manage to win on appeal, the final outcome of the Rubin et al. litigation will be that the ancient artifacts will be seized and auctioned. This would clearly have profound and negative consequences for all cultural property held within the United States. Because of wrongs attributed to a regime following thousands of years later, a nation’s heritage is vulnerable to being sold at auction to the highest bidder.




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