Federal courts pass judgment on Iran

David Demirbilek | Contributor

In a prelude to Iranian President Mahmoud Ahmadinejad’s Wednesday speech at the U.N. General Assembly, federal courts handed down two rulings in which Iran was a defendant.

The Seventh Circuit Court of Appeals issued a ruling against Iran and its Ministry of Information in a case concerning the role they played in a fatal terrorist attack.

Agents of the Palestine Islamic Jihad attacked members of the Leibovitch family traveling near the West Bank in 2003, killing the family’s seven-year-old daughter and severely injuring her three-year-old sister. The three-year-old was the only American citizen in the family. The rest were Israeli citizens.

A lower district court ruled that Iran had openly provided material support and resources to the terrorist organization. It awarded $52.5 million to the Leibovitch family both for the American girl’s permanent disfigurement and the pain and suffering from witnessing her sister’s death.

However, the district court refused to hear claims raised by other members of the family. On Tuesday, the Seventh Circuit disagreed.

The court found that the other members of the family could sue Iran through a loophole in the Foreign Sovereign Immunities Act that would allow U.S. courts to apply Israeli law.

The Seventh Circuit sent the case back to district court, instructing it to rehear the case. The lower court will be required to consider whether the entire Leibovitch family can recover damages from Iran for intentional infliction of emotional distress.

Although the Seventh Circuit ruling proved unfavorable to Iran, the country fared better elsewhere. Due to a jurisdictional technicality, the U.S. District Court for the District of Columbia dismissed a trademark violation committed by Iran.

In 2006, Bell Helicopter Textron sued Iran and its military aviation manufacturers for constructing helicopters that copied the distinct appearance of a Bell helicopter protected under U.S. trademark law. Iran widely marketed the helicopters, and Bell feared international customers would mistake the Irani helicopters for its own.

The D.C. District Court found for Bell in 2011, awarding $22.5 million in damages. However, Iran filed a motion in 2012 to invalidate the judgment on the grounds that the court lacked jurisdiction over the country.

On review Tuesday, the court sided with Iran.  It found that, although Iran imitated Bell’s trademark, the country’s violation did not cause enough direct harm in the United States to justify jurisdiction over Iran.

The court rejected that Bell experienced direct economic harm due to Iran’s violation of its trademark.

The court found that two markets exist for helicopters, a “market for aircraft that meet the exacting certification standards imposed in North America and Europe, and a Third World market for the less expensive products that do not meet those standards.”

Bell could not sufficiently prove that Third World countries buy its helicopters.

Consequently, since Bell could not demonstrate that Iran’s entry into the Third World market would hurt sales, the court was unable to identify direct harm to the company. The court lifted Iran’s conviction under U.S. trademark law.

Iran made no appearance and filed no briefs in the Seventh Circuit. In D.C. District Court, although Iran filed the motion challenging jurisdiction, it failed to appear in court at earlier stages in the trial.

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