By Haggai Carmon

In early 2008, Abdel Diallo, the son of UN Diplomat Hama Diallo (Executive Secretary of the Permanent Secretariat of the UN Convention to Combat Desertification), was found guilty of first-degree assault and the use of a handgun in the commission of a violent crime.

A. Diallo’s appeal, in Diallo v. Maryland, relied on the fact that his father’s diplomatic immunity should carry over to him, but the State of Maryland appellate court upheld the conviction made by the circuit court of Baltimore County.

Hama Diallo was based in Bonn, Germany at the time, and although he did come to the U.S. fairly frequently on official UN business, he was not actually present in the U.S. at the time of his son’s infraction (October 2006). What he did have was a G-4 visa, valid from April 20, 2006 through April 18, 2007, which allowed him to travel to the U.S. as a foreign diplomat on official business.

The appellate court ruled that neither under the Vienna Convention on Diplomatic Conventions, nor under the Convention on the Privileges and Immunities of the United Nations did Abdel Diallo have claim to diplomatic immunity from his 25-year prison sentence.

If his father had been physically in the United States, on official UN business, at the time of the offense, Abdel Diallo may today be a free man.

By Haggai Carmon

On September 7, 2007, the U.S. District Court for the District of Columbia entered a default judgment in Deborah D. Peterson, et al v. Islamic Republic of Iran, et al in favor of the plaintiffs and against Iran and the Iranian Ministry of Information and Security.

The federal judge ordered the defendants to pay $2.65 billion in damages to families of 241 U.S. Marines killed in the 1983 suicide bombing of the U.S. Marines’ barracks in Beirut, Lebanon. The Marines were in Lebanon at the time as part of a UN multinational peacekeeping mission. The group Islamic Jihad (another name for the internationally recognized, Iranian-backed terrorist group Hezbollah) claimed responsibility for the attack.

The plaintiffs/judgment creditors took the default judgment to a California court and got a writ of execution, which allowed them to locate and lay claim to the Iranian funds due them according to the judgment.

Following standard procedures to find the funds, the judgment creditors came up short because all the California branches of the banks they approached responded that the judgment debtors (Iran and the Iranian Ministry of Information and Security) had no deposits in their branches.

The judgment creditors have now filed a Motion in California that, if granted, will allow them to inquire about and gain access to Iranian funds held in accounts around the world by more than 30 internationally active U.S. banks. The judgment creditors are effectively asking that California State order internationally-active U.S. banks with branches in California to find Iranian money in branches outside of the U.S. and give it to the judgment creditors.

The California Bankers Association and several other banking associations have filed a collective Motion to file a Friend of the Court brief, in which they will make a case for denial of the judgment creditors’ Motion.

Although they have not yet been permitted to file their brief, they make their case as follows:

A California court does not have the authorization to permit the judgment creditors to collect from accounts not based in the United States. The reach of California law is limited in this way in part to avoid conflict with foreign laws and foreign courts.

If subject to this burden in which they are held responsible for the civil claims brought against their global clients, banks will be discouraged from operating in California in the future, and in general, the cost of banking will have to increase as a result of the additional liability placed on the banks.

Because Iran is a U.S.-designated State Sponsor of Terror, it is exempt from the sovereign immunity that most countries have from civil claims brought against them in U.S. courts. However, a California court must now decide how far outside the U.S. judgment creditors can go when executing a judgment against a state sponsor of terror.

By Haggai Carmon

Yesterday, June 29, the U.S. Supreme Court decided not to review a ruling made by the U.S. Court of Appeals for the Second Circuit that confirmed Saudi Arabian immunity to U.S. terrorism-related lawsuits. As such Saudi sovereign immunity remains protected.

In representation of the Obama administration, the U.S. Solicitor General Elena Kagan filed a friend of the court brief on May 29 encouraging the Supreme Court not to review the case.

The plaintiffs are victims of the 9/11 attacks who are seeking compensation from the government they believe funded the terrorists. They allege that Saudi Arabia financed and had control over the Islamic charities that operated as money launderers for Al Qaeda. Among the defendants are the Saudi government and several senior members of the Saudi royal family.

The plaintiffs support their allegations with U.S. Treasury reports and declassified government intelligence documents that reportedly show how Islamic charities, individual financiers and financial institutions funded Al Qaeda.

They also refer to statements from Clinton administration officials, who said the Saudis were told before 9/11 that the charities and other institutions were being used to finance Al Qaeda, and that the Saudis did not act on the information. One of the attorneys for the plaintiffs has also submitted a deposition from a former Al Qaeda commander who testified that his group got support from a well-known Saudi government charity.

Although the 1996 exception to the U.S. Foreign Sovereign Immunity Act (FSIA) allows U.S. civil lawsuits against officially designated state sponsors of terrorism, Saudi Arabia has not been designated as such by the State Department.

In 2005, a Manhattan federal district judge – Judge Richard Conway Casey – ruled that Saudi Arabia and accused members of the royal family had immunity and could not be named as defendants. The Second Circuit court upheld Casey’s ruling in 2008.

The other defendants named in the case – Islamic charities, individual financiers and financial institutions – are not covered by the immunity ruling, but the standing decision does stipulate that defendants must have some presence in the U.S. to be included in the lawsuit, which means additional defendants may still be excluded from the case.