In re: 650 Fifth Avenue and Related Properties

Background

The Levins—identified in the opinion as the late Jeremy Levin and Dr. Lucille Levin—held partially unsatisfied judgments totaling $28,807,719 against Iran. They sought summary judgment against Assa Corporation and Assa Company Limited, together called Assa. They asked the court to rule that certain Assa property was available for collection under Section 201 of the Terrorism Risk Insurance Act of 2002, or TRIA, to satisfy the Levins’ judgments.

The property included Assa’s 40 percent partnership interest in the 650 Fifth Avenue Company, which owned and managed a building at 650 Fifth Avenue in New York City, as well as Assa’s interests in funds held in bank accounts in the United States. The Treasury Department had designated the property as blocked assets, and the court had previously held that the property was blocked assets of Bank Melli, an instrumentality of Iran. The Second Circuit affirmed that Assa’s property was subject to attachment and execution under TRIA.

In an October 4, 2017 judgment, the court extinguished Assa’s “right, title, and interest” in the property and awarded all right, title, and interest to other judgment creditors for purposes of partially satisfying their judgments against Iran. Assa appealed, but the Second Circuit affirmed, and Assa did not seek review by the Supreme Court before the deadline expired.

The Levins’ motion

The Levins argued that Assa’s property remained available to satisfy their judgments because the property had not yet been fully liquidated or distributed. They pointed to the absence of a judicial accounting and argued that a residual might remain after the other judgment creditors were paid. Assa and the other judgment creditors opposed the motion and argued that Assa’s interest in the property had already been extinguished.

Legal standard

Under Federal Rule of Civil Procedure 56, summary judgment is proper when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. A genuine dispute exists when the evidence could allow a reasonable jury to decide for the nonmoving party.

The court also interpreted TRIA Section 201(a), which allows a person with a judgment against a terrorist party to attach or execute against that party’s blocked assets, including blocked assets of its agencies or instrumentalities. The court held that the terrorist party or its agency or instrumentality must still have a property interest in the assets for them to be attachable under TRIA.

Court’s analysis

The court agreed with the Levins that Assa’s assets were blocked assets under TRIA. But it held that the Levins could proceed only if Assa still had an interest in the property. The 2017 judgment had expressly extinguished Assa’s rights and awarded the property to the other judgment creditors. The court therefore concluded that the judgment eliminated Assa’s interest in the property.

The court rejected the Levins’ suggestion that Assa might retain an interest in a possible surplus. First, the language of the 2017 judgment and its finding that the other judgment creditors’ outstanding compensatory damages exceeded the estimated value of the Assa property indicated that no residual existed for Assa to claim. Second, the court said that any residual was speculative. Without an accounting, it was impossible to determine whether any surplus existed or whether Assa had a claim to it. The court held that, even if the Levins had provided evidence supporting a possible residual, that uncertainty would create a genuine dispute of material fact and prevent summary judgment.

The court also noted that the Levins’ earlier efforts to assert claims against the property in the forfeiture action had been dismissed for the reasons stated in a prior order, including invalidity under the applicable forfeiture rules, untimeliness, and lack of standing; the Second Circuit affirmed that ruling.

Disposition

The court denied the summary-judgment motion. The opinion’s opening discussion identifies the motion as one brought by the Levins, while the conclusion refers to “Defendants’ motion” and lists the same docket numbers. The text does not explain this inconsistency.