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Airlines and insurance companies are not the only potential targets of litigation over the destruction of the World Trade Center and the Pentagon. Plaintiffs’ lawyers are also considering lawsuits against foreign governments that were backing, sponsoring or otherwise aiding the suspected terrorists. “We’re looking at the responsibility of governments that have been aiding and abetting terrorism,” said Michael Hausfeld of Washington, D.C.’s Cohen, Milstein, Hausfeld & Toll. “Even if it’s impossible to collect, it’s important and the right thing to do,” said James Kreindler of New York’s Kreindler & Kreindler, whose firm is suing Libya over the downing of Pan Am Flight 103 over Lockerbie, Scotland. “It is a debt owed by the people who are behind the murders. They should be condemned and their debt quantified.” The people injured in the Sept. 11 disasters and the families of the dead can sue under an exemption in the Federal Sovereign Immunity Act. The federal act grants immunity to foreign states from the jurisdiction of federal and state courts in the United States. But in 1996, the U.S. Congress passed an amendment that allows plaintiffs to sue state sponsors of terrorism because these states are deemed to have waived their immunity by such actions. In essence, by supporting the actions of terrorists, the nations waive their right to be considered sovereign. At this time, only seven nations have been designated as state sponsors of terrorism: Iraq, Iran, Syria, the Sudan, Cuba, North Korea and Libya, Kreindler reported. Although Afghanistan is not on the list, he said, the U.S. secretary of state has the right to add that nation to the list, and the right to sue “can be applied retroactively.” Although U.S. law allows plaintiffs to sue foreign nations, there are significant obstacles to such litigation, said Aaron S. Podhurst of Miami’s Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, who won a $187 million judgment against Cuba in 1996 using this exemption. “You have to prove that the government was involved,” he said. “But these are clandestine operations.” Podhurst has been contacted by several families of people aboard the downed aircrafts in the Sept. 11 incidents. If the investigation by the federal government uncovers proof of foreign government involvement, Podhurst’s firm will be filing lawsuits. Collecting a judgment can be exceedingly difficult, however. “Even if you get a judgment, you have to find funds that you can execute on,” Podhurst added. “They won’t hand over the money voluntarily.” Of the seven countries on the terrorist list, he said, Cuba, Iran and possibly Iraq have funds in the United States that can be seized. In addition, he said, “it’s technically possible” to take any judgment in a U.S. court and bring it to another nation where these countries have funds and seek payment there. If Afghanistan is designated as a state supporter of terrorism and the current investigation determines the Afghan government had a role in the Sept. 11 events, the prospects are dim for finding enough money to support a judgment for more than 5,000 potential plaintiffs, Kreindler conceded. “Afghanistan is not a wealthy country.” But, he said, “the world can change. Enormous oil reserves could be discovered there.” Some of the previous lawsuits have resulted in recoveries for the plaintiffs, but nearly all the payments have come from the U.S. Treasury — not any assets of the defendants. The federal government has refused to attach the assets of these foreign governments after adverse judgments, citing national security interests, and the courts have upheld the refusals. To provide compensation to the plaintiffs, Congress subsequently passed legislation allowing the United States to pay such judgments, while binding the government to continue efforts to collect the money from the rogue nations. In the first of these cases, involving the death of a 20-year-old in Israel, in which a default judgment was entered against Iran for $247 million, the United States paid the plaintiffs $12 million, Kreindler reported. Flatow v. Iran, No. 97-396 (D.D.C.). In one lawsuit under the exception to the Foreign Sovereign Immunity Act, the recovered funds did come from the nation sued, but collection was not easy, said Podhurst.

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