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United States Court of Appeals, Ninth Circuit.
BANK MELLI IRAN; Bank Mellat, Plaintiffs-Appellants,
v.
Shams PAHLAVI, aka H.I.H. Princess Shams Pahlavi
BACKGROUND
In January of 1979, the Shah of Iran fled the country in the midst of the series of events that ultimately resulted in the creation of the Islamic Republic of Iran. Prior to that time, Pahlavi, the Shah’s older sister, had signed a number of promissory notes.
The Banks also complain that they were improperly assigned the burden of persuasion. We agree that in reviewing a request [*1409] for summary judgment it can be important to decide where the burden of persuasion lies. Here the Banks sought to enforce the judgment of the Iranian courts, and they had the burden of persuading the district court that they had judgments. See, e.g., Hopkins v. Dow Corning Corp., 33 F.3d 1116, 1121 (9th Cir.1994), cert. denied, 513 U.S. 1082, 115 S.Ct. 734, 130 L.Ed.2d 637 (1995). However, this case largely turns on the issue of whether the judgments were obtained in a manner that comported with due process. The question, then, is whether the Banks must demonstrate that the judgments were so obtained or whether Pahlavi must demonstrate that they were not or could not have been.
In Hilton v. Guyot, 159 U.S. 113, 205-06, 16 S.Ct. 139, 159, 40 L.Ed. 95 (1895), the leading common law foreign money judgment case, the Supreme Court indicated that:
When an action is brought in a court of this country, by a citizen of a foreign country against one of our own citizens, to recover a sum of money adjudged by a court of that country to be due from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having jurisdiction of the cause and of the parties, and upon due allegations and proofs, and opportunity to defend against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment is prima facie evidence, at least, of the truth of the matter adjudged….
[ B. The Merits.
Pahlavi’s major bulwark against the Banks’ attack is her assertion that the judgments cannot be enforced because she could not have had due process in Iran during the period that those judgments were obtained against her. That simple but crucial fact, she says, precludes enforcement of the Banks’ judgments on any theory. [FN2] We agree with her premise, and, on the record of this case, we agree with the district court’s conclusion as well.
FN2. If that bulwark holds she need not fall back upon lesser ones, for example, lack of personal jurisdiction and statute of limitations bars. Of course, lack of personal jurisdiction, itself, has a due process aspect to it.
It has long been the law of the United States that a foreign judgment cannot be enforced if it was obtained in a manner that did not accord with the basics of due process. See Hilton, 159 U.S. at 205-06, 16 S.Ct. at 159. As the Restatement of the Foreign Relations Law of the United States succinctly puts it: “A court in the United States may not recognize a judgment of a court of a foreign state if: (a) the judgment was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with due process of law….” § 482(1)(a) (1987).
We are aware of no deviation from that principle. In fact, as we have already shown, it was expressly incorporated into the Foreign Money-Judgments Act. Cal.Civ.Proc.Code § 1713.4; see also Julen v. Larson, 25 Cal.App.3d 325, 327-28, 101 Cal.Rptr. 796, 798 (1972); cf. Bank of Montreal v. Kough, 612 F.2d 467, 470-71 (9th Cir.1980) (the taking of jurisdiction must comport with due process). It can hardly be gainsaid that enforcement will not be permitted under California law if due process was lacking when the foreign judgment was obtained. Faced with that ineluctable proposition, the Banks argue that the Algerian Accords have somehow elided the due process requirement from the law of the United States as far as Pahlavi is concerned. With that we cannot agree.
The Algerian Accords do provide that Iran can bring actions to recover any of its assets from the family of the former Shah. See Declaration of the Government of the Democratic and Popular Republic, Point IV, para. 12, reprinted in Dep’t St. Bull., Jan. 19, 1981, at 3 (“General Declaration”). [FN3] They also provide that in litigation against the Shah’s family “the claims of Iran should not be considered legally barred either by sovereign immunity principles or by the act of state doctrine and that Iranian decrees and judgments relating to such assets should be enforced by such courts in accordance with United States law.” Id. at ¶ 14. It is upon this language that the Banks rest their claim that the United States courts cannot consider whether the judgments were obtained in accordance with due process. That is a foundation that crumbles under the weight the Banks seek to place upon it.
Finally, a construction of the Algerian Accords that permitted the taking of assets from a resident of this country by means of a judgment obtained without due process of law would raise grave questions about the enforceability of that part of the Accords. That question would be lurking in the case were we to accept the position that the Banks argue for. See Boeing Co., 771 F.2d at 1284 (regarding lurking constitutional issues in the Accords); cf. Dames & Moore v. Regan, 453 U.S. 654, 688-89, 101 S.Ct. 2972, 2991, 69 L.Ed.2d 918 (1981) (court upholds Algerian Accords but notes that enforcement may leave residual constitutional issues, at least as against the United States Government.) We see no reason to stretch the language of the Accords and thereby create those questions because we have no reason to think that the Accords were intended to change the law of this country in that backhanded a fashion. Thus, we hold that attempts to enforce judgments under the Algerian Accords are not exempt from due process defenses. [FN4]
Pahlavi did not put in a declaration which specifically stated that she would be treated badly by the regime. Her failure to present that more specific evidence does weaken her position somewhat. Nevertheless, a common sense reading of the evidence indicates that if it were the only evidence placed before the trier of fact a verdict would be directed in her favor on the ground that she could not possibly have obtained a fair hearing before the courts of Iran had she attempted to fight the Banks’ claims against her.
That conclusion is further buttressed by decisions which recognize that in the early to mid-1980s Americans could not get a fair trial in Iran. See McDonnell Douglas Corp. v. Islamic Rep. of Iran, 758 F.2d 341, 346 (8th Cir.) (“We thus take judicial notice that litigation of the dispute in the courts of Iran would, at the present time, be so gravely difficult and inconvenient that McDonnell Douglas would for all practical purposes be deprived of its day in court.”), cert. denied, 474 U.S. 948, 106 S.Ct. 347, 88 L.Ed.2d 294 (1985); Rockwell Int’l. Sys., Inc. v. Citibank, N.A., 719 F.2d 583, 587-88 (2d Cir.1983) (“Neither [party] argues that the post-revolutionary Iranian judicial system is capable of affording an adequate remedy; courts that have passed on this contention have consistently rejected it.”); Harris Corp. v. National Iranian Radio and Television, 691 F.2d 1344, 1357 (11th Cir.1982) (“It is clear that the Islamic regime now governing Iran has shown a deep hostility toward the United States and its citizens, thus making effective access to the Iranian courts unlikely.”). There is no reason to think that Pahlavi would have had better access to justice. After all, much of the hostility to United States citizens stemmed from this country’s connection to the Shah’s regime, and it is hardly necessary to say that Pahlavi’s connection was, if anything, closer.
Therefore, because Pahlavi would have been entitled to a directed verdict had this case gone to trial on this record, the conclusion that she was entitled to summary judgment was apodictic.
AFFIRMED.
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