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D.C. lawyer Thomas Fay has spent years hounding the Libyan government for money on behalf of victims of terrorist attacks. Now he’s hoping to collect — from American companies. Fay has sent letters to 13 brand-name corporations, including Exxon Mobil and Chevron, notifying them that if he wins his case against Libya, he’ll be coming after them. He has even sent one to White & Case, the prominent law firm that recently signed on to defend Libya. The gambit stems from a change in the law meant to make it easier for plaintiffs to secure judgments and collect from countries found responsible for sponsoring terrorist attacks. Until recently, those who had prevailed in court had few options for collecting. But on Jan. 28, President George W. Bush signed a bill amending the Foreign Sovereign Immunities Act to allow plaintiffs to seek any asset owned by the terrorist-sponsoring country in reach of American courts, including frozen accounts or property managed by others. The amendment also permits victims to request punitive damages, which they couldn’t before, and eliminates some avenues for appeal. Under the new law, plaintiffs with pending cases had 60 days to file or refile claims. While plaintiffs lawyers headed to court, Libya moved to revamp its legal strategy. The country’s longtime counsel, solo practitioner Arman Dabiri, withdrew last week, saying Libya asked him to do so. In a filing in the U.S. District Court for the District of Columbia last month, Libya said it planned to substitute a White & Case team led by Christopher Curran in place of Dabiri. “Libya believes a new litigation approach in the United States is urgently required,” the March 17 motion states, “and a new approach will serve to further the great strides Libya has taken, and continues to take, to rebuild its relations with the United States over the past five years.” Curran, the D.C.-based head of litigation at White & Case, has defended Jordan, Vietnam, and Kazakhstan. He declines to comment on the case. The shift in the Foreign Sovereign Immunities Act is aimed specifically at the five countries on the U.S. government’s list of state sponsors of terrorism, including Iran and Syria, which have few ties to the United States. But Libya is a special case. It came off the list two years ago, and American companies have begun to invest there — potentially exposing them to multimillion-dollar terrorism judgments. Libya and several business groups are asking that Congress exempt Libya from the new law. R. Bruce Josten, executive vice president of government affairs for the U.S. Chamber of Commerce, says the law will “chill” companies considering operations with Libya. “A company doing business over there is liable to lose its investments,” he says. “That’s going to deter many companies from going in.” Fay says that’s not his problem. “I don’t have much sympathy for these businesses,” says Fay. “If they are holding Libyan property, it is subject to being seized, simple as that.” �THEY’RE PLAYING WITH FIRE’ For decades, foreign countries were immune to lawsuits in the United States. That changed in 1996, but even after, when victims won in court, they often couldn’t collect because the countries’ assets weren’t available to them. Fay represents 38 victims from the 1986 Libyan-sponsored La Belle disco bombing in West Berlin, mostly American service members, for whom he is seeking more than $100 million in damages. The bombing prompted U.S. air strikes 10 days later against Libyan military sites. The legal case has dragged on for seven years. In 2006, Fay says, he thought he had reached a deal with Libya to settle the case. But after Libya was removed from the terrorism list, Fay says, the country did not come through. A motion to enforce the “settlement agreement” has been sitting in D.C. federal court for almost two years. No trial date has been set for his clients’ case. Fed up with delays, Fay and his co-counsel, Steven Perles, hired lobbying help — from McGuireWoods Consulting and Gibson, Dunn & Crutcher — and worked with members of Congress to get a new bill that would make litigation easier. (Fay and Perles work together even though Fay is suing Perles for $1 million over use of a trust account to cover defense costs. The two say they speak several times a day, despite the conflict.) Sens. Frank Lautenberg (D-N.J.) and Arlen Specter (R-Pa.) pushed the legislation, which received bipartisan support in both the House and Senate. Fay even registered as a lobbyist. After negotiating an exemption for the fledgling Iraqi government, Bush approved the measure, which was part of a 2008 defense bill. Before the March 28 deadline, lawyers filed 15 civil cases — most were the refiling of earlier claims — in U.S. District Court for the District of Columbia. Some of those filings involve cases against other countries, such as Iran, for which few, if any, assets are available because business relationships are prohibited. Lynn Derbyshire, whose brother, Marine Capt. Vincent Smith, was killed in the 1983 Beirut Marine barracks blast for which the Iranian government was later found responsible, says companies working with any of these governments take a big risk. “These countries don’t have a very good track record,” she says. “So if businesses are working with them, they’re playing with fire.” LIBYAN BUSINESS TIES Fay acknowledges he can’t say for sure what Libyan property is held by the companies he has targeted. But he believes these companies have business ties to the Libyan government due to their affiliation with groups like the U.S.-Libya Business Association. The association did not return calls for comment. So far, Fay has filed notices in nine federal courts alerting them to the possible seizure of Libyan property if his clients receive a judgment. Copies of that notice, along with the civil complaint, were mailed to in-house lawyers of 13 companies and White & Case. Chevron is “aware of the lien, and we are evaluating our legal options,” Kent Robertson, a media relations adviser, said in an e-mail. “At this point we can’t speculate about next steps.” The other companies either didn’t respond to messages or declined to comment. Libyan officials and business groups are now lobbying hard to get Libya a waiver similar to the one granted to Iraq. The Bush administration is backing the waiver, but it would require congressional approval. Last month, Secretary of State Condoleezza Rice, Secretary of Defense Robert Gates, and two other Cabinet members sent Senate Majority Leader Harry Reid (D-Nev.) a letter seeking an exemption for Libya. It said the law “seriously disadvantages U.S. businesses engaging in business ventures” with countries whose designation as a terrorism sponsor has been withdrawn. The letter also said Libya is working toward resolving claims and exploring possible settlement of pending cases. Those cases involve the 1988 Pan Am bombing over Lockerbie, Scotland, and the 1989 bombing of UTA Flight 772, as well as the 1986 bombing of the La Belle disco. All told, the attacks killed 198 Americans and hundreds of others. Libya is reportedly discussing with the U.S. government a comprehensive settlement agreement covering all the attacks. White & Case declines to comment on the issue. “Due to the nature of the ongoing discussions between Libya and the United States, we just don’t feel it would be appropriate to comment at this time,” says Nicholas Clarke, media relations manager for White & Case Americas. Fay opposes the talks between Libya and the United States, but other attorneys representing victims support them. Perles says he’s OK with a settlement if it takes care of the victims. Stuart Newberger, a partner at Crowell & Moring, is the only lawyer who has a judgment against Libya. The $6 billion award — handed down in January — is based on the bombing of UTA Flight 772, which killed 170 people. Under the new law, Newberger would appear to have the power to freeze any Libyan commercial activities in the United States, but he hasn’t yet moved to do so. “I support the settlement approach as long as victims are satisfied,” Newberger says, adding a caveat: “Until that happens, Congress shouldn’t even think about giving the president a waiver for Libya.”
W.J. Hennigan can be contacted at [email protected].

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