Anytime fellow Romanian expatriates make eminent domain news, it’s going to get some coverage here, especially a case as tragic and interesting as Alimanestianu v. U.S. (12/29/2016).
Mr. Alimanestianu was a Romanian-American who invented and operated New York (and the world’s) first automated parking garage in the 1960s, gaining him some fame and fortune in the City. On September 19, 1989 he was murdered by Libyan terrorists , along with all other 171 people aboard, when a bomb was detonated on UTA Flight 772 causing it to crash in the deserts of West Africa.
On August 8, 2008, his family, was awarded nearly $1,300,000,000 (that is billion, with a “b”) judgment by the District Court in Washington D.C. against the Libyan Government and 6 high ranking Libyans, the state sponsors of this act of terrorism. Additional parties joined that suit for a total judgment of $6,903,683,445.
Libya appealed on August 14. Not coincidentally, that same date the United States entered into a “Claims Settlement Agreement” with Libya where Libya agreed to pay $1.5 billion to a fund set up by the U.S. to compensate victims of numerous state sponsored terrorist acts, including UTA 772, Lockerbie, the Berlin disco bombing as well as Libyans killed in US airstrikes. About $681 million was to go to U.S. victims of these attacks (about 200 Americans were killed in these three terrorist acts, of which 187 were Americans on the Lockerbie flight). Congress unanimously passed the Libyan Claims Resolution Act codifying this agreement and restoring sovereign immunity for Libya. In October, with the Libyan appeal of the Alimanestianu Suit pending, G.W. Bush issued an executive order providing any suit within the U.S. against Libya “… shall be terminated.” The U.S. moved to intervene in the Alimanestianu case, asked the court to vacate the judgment and dismiss that suit in early 2009. Their Motion was granted.
The State Department was charged with administering the settlement proceeds. They determined that a $10-million payment per death to the estates (including Mihai Alimanestianu’s estate) was fair compensation.
There were some additional categories of potential compensation, which the Alimanestianu Plaintiffs applied for, arguing that their suit was the entire catalyst of the Libya settlement. The administrators of the settlement fund were unpersuaded and denied the claims in 2013. The Plaintiffs filed suit with the Court of Federal Claims.
So you have a $1.3 billion judgment and government action turns that into something worth 0.75% as much. Sound like a taking? Apparently not.
The Court of Claims first had to analyze whether the judgment was ‘property’ as protected by the 5th Amendment, and whether this should be analyzed under per-se ‘physical taking’ doctrine (any impact is a taking) or ‘regulatory taking’ doctrine (nuanced balancing tests). The Court relied on a similar case by Iranian victims (Abrahim-Yuri v. U.S.) in determining whether to apply the per-se test. Reading between the lines, the CFC inferred the use of the regulatory takings tests, since the Abrahim-Yuri court used the Penn Central regulatory takings balancing test.
Prong 1: Reasonable Investment Backed Expectations
The Court of Claims then went on to decide there was no ‘reasonable expectation’ of recovering an amount beyond the $10 million. The Court pointed out that at the time of the terrorist act, Libya had sovereign immunity which was only lifted after the fact by Congress.
Prong 2: Character of the Governmental Action
Frighteningly, in the Court’s analysis of the “Character of the Governmental Action” prong of the analysis, the Court found
The very real potential that the Government might have had to compromise individual nationals’ claims against Libya diminishes any reasonable expectation that Plaintiffs would receive full compensation for their claims.
then quoting Abrahim-Yuri:
Certain sticks in the bundle of rights that are property are subject to constraint by the government, as part of the bargain through which the citizen otherwise has benefit of government enforcement of property rights. As the trial court correctly observed, those who engage in international commerce must be aware that international relations sometimes become strained, and that governments engage in a variety of activities designed to maintain a degree of international amity.
Am I reading this right? Did the Court agree it’s OK for the government to sell its citizens out in favor of international relations?
Prong 3 – Economic Impact
Predictably, the Court calls it ‘speculative’ whether the Plaintiffs could have collected on their judgment without U.S. Government intervention. Thus, they held there was no economic impact to the Plaintiffs.
Government wins. No taking. Though, admittedly, a $6.9 billion (with a “B”) judgment against the U.S. Government is more than the entire US science budget request for 2017.
Mihai Alimanestianu’s NY Times Obituary is here. Makes me sad we never had the chance to meet.