13-3948-cv
In re 650 Fifth Avenue and Related Properties
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Thurgood Marshall United
3 States Courthouse, 40 Foley Square, in the City of New York,
4 on the 22nd day of October, two thousand fourteen.
5
6 PRESENT: DENNIS JACOBS,
7 ROBERT D. SACK,
8 CHRISTOPHER F. DRONEY,
9 Circuit Judges.
10
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12
13 In re 650 FIFTH AVENUE and RELATED
14 PROPERTIES
15
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17
18 UNITED STATES OF AMERICA,
19 Plaintiff-Appellee,
20
21 STEVEN M. GREENBAUM, et al.,
22 Claimants-Appellees,
23
24 -v.- 13-3948-cv
25
26 SOHRAB VAHABZADEH, et al.,
27 Claimants-Appellants.
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1
1
2 FOR CLAIMANTS-APPELLANTS: IRA STEPHEN SACKS, M. DARREN
3 TRAUB, and KIMBERLY J.
4 LINKLETTER, Akerman LLP, New
5 York, New York.
6
7 FOR PLAINTIFF-APPELLEE: MICHAEL D. LOCKHARD, MARTIN S.
8 BELL, and BRIAN A. JACOBS, for
9 Preet Bharara, United States
10 Attorney for the Southern
11 District of New York, New York,
12 New York.
13
14 FOR CLAIMANTS-APPELLEES: CURTIS C. MECHLING, JAMES L.
15 BERNARD, BENJAMIN WEATHERS-
16 LOWIN, and MONICA HANNA, Stroock
17 & Stroock & Lavan LLP, New York,
18 New York.
19
20 Appeal from a judgment of the United States District
21 Court for the Southern District of New York (Forrest, J.).1
22
23 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
24 AND DECREED that the judgment of the district court be
25 AFFIRMED.
26
27 Claimants-appellants Sohrab Vahabzadeh, the Djhanbani
28 Family Members, the Khosrowshahi Family Members, and the
29 Khoshkish Family Members appeal from the judgment of the
30 United States District Court for the Southern District of
31 New York (Forrest, J.), dismissing their claims for lack of
32 Article III standing. We assume the parties’ familiarity
33 with the underlying facts, the procedural history, and the
34 issues presented for review.
35
36 This appeal arises out of a civil forfeiture proceeding
37 brought by the United States government (the “Government”)
38 against the right, title, and interest of Assa Corporation,
39 Assa Company Limited, Alavi Foundation, and 650 Fifth Avenue
40 Company in the building located at 650 Fifth Avenue, New
41 York, New York, and various related assets and properties
42 (collectively, the “Defendant Properties”). The Appellants
1
The above caption has been shortened in the
interest of conserving space. The full caption is available
on the cover of the parties’ joint appendix.
2
1 filed notices of claim to the Defendant Properties premised
2 on allegations that their properties in Iran were unlawfully
3 seized by the Iranian government during the 1979 Iranian
4 Revolution, “commingled,” and used to commit the acts
5 alleged in the Government’s forfeiture complaint.
6
7 For Article III standing, a party must have “suffered
8 an injury in fact . . . [that is] fairly trace[able] to the
9 challenged action of the defendant, and . . . [that] will be
10 redressed by a favorable decision.” Lujan v. Defenders of
11 Wildlife, 504 U.S. 555, 560-61 (1992) (citations and
12 internal quotation marks omitted). “In determining standing
13 to challenge a forfeiture, we look to ownership and
14 possession because they are often reliable indicators of
15 injury that occurs when property is seized.” United States
16 v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d Cir. 1999).
17 However, “we have been careful to acknowledge that while
18 ownership and possession generally may provide evidence of
19 standing, it is the injury to the party seeking standing
20 that remains the ultimate focus.” Id. A claimant that is
21 neither an owner nor a possessor of the property may
22 nevertheless suffer “a distinct and palpable injury” from
23 the forfeiture if it has a “financial stake” in the property
24 to be forfeited. Id. at 527-28 (citation and internal
25 quotation marks omitted). However, a party that holds no
26 more than a claim against the owner or possessor lacks
27 standing to challenge a property forfeiture. Id. at 528-29.
28 Such a party’s remedy is limited to suit against the owner
29 or possessor. Id.
30
31 The principles articulated in Cambio Exacto squarely
32 support the district court’s finding that the Appellants
33 lack Article III standing. They have articulated no reason
34 why the seizure of their properties in Iran would lead to
35 their obtaining a property interest in the Defendant
36 Properties.2 At most, the Appellants have a claim against
2
The Appellants fault the district court for
failing to take as true their allegations that the Iranian
government “commingled” the properties seized in Iran and
used those properties to “maintain” the Defendant
Properties. This criticism misses the mark. The district
court’s decision was based on the Appellants’ failure to
articulate any legal theory of “how they have any interest
in the [Defendant] Properties” as a result of the alleged
3
1 the Iranian government for illegally seizing their
2 properties in Iran.3 As Cambio Exacto makes clear, that is
3 not enough to confer Article III standing to challenge
4 forfeiture.
5
6 The Appellants argue that the facts they have alleged
7 support the existence of a “constructive trust” under New
8 York law. They are mistaken. As we explained in Torres v.
9 $36,256.80 U.S. Currency, 25 F.3d 1154, 1158 (2d Cir. 1994):
10
11 A constructive trust arises under New York State law
12 when one person in a confidential relationship with
13 another transfers property in reliance on the
14 transferee’s promise to reconvey the property; if
15 the promise is breached and unjust enrichment
16 results, a constructive trust is imposed on the
17 property in the transferor’s favor.
18
19 Although a failure to satisfy each of these four factors
20 does not bar the imposition of a constructive trust, see
21 Simonds v. Simonds, 380 N.E.2d 189, 194 (N.Y. 1978), it does
22 counsel against it. The Appellants’ affirmative allegation
23 that the Iranian government unlawfully seized property
24 forecloses a claim that the Appellants “transfer[red]
25 property [to the Iranian government] in reliance on the
26 transferee’s promise to reconvey the property.” Absent a
27 promise to reconvey, there could not have been a breach.
28 The Appellants also fail to allege the existence of a
29 confidential relationship. Finally, as the district court
30 pointed out, even if the Appellants could allege the
31 existence of a constructive trust, that trust would be
commingling, not the district court’s refusal to posit that
commingling in fact took place.
3
As a group of claimants-appellees (the “Greenbaum
Claimants”) point out, it is doubtful that the Appellants
could bring any such claims in United States courts. The
Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602
et seq., strips United States courts of jurisdiction to
adjudicate claims against foreign sovereigns unless a
statutory exception applies. A claim that the Iranian
government unlawfully expropriated property of its own
nationals does not appear to fall under any of those
exceptions.
4
1 imposed only on the properties seized in Iran, not on the
2 Defendant Properties.
3
4 The Appellants further argue that the district court
5 abused its discretion by not giving them an opportunity to
6 amend their complaint. “[A] motion for leave to amend a
7 complaint may be denied when amendment would be futile.”
8 Tocker v. Philip Morris Cos., Inc., 470 F.3d 481, 491 (2d
9 Cir. 2006). The Appellants have articulated no additional
10 facts they could plead that would overcome the standing
11 defect identified by the district court. Accordingly, leave
12 to amend would be futile.
13
14 For the foregoing reasons, the judgment of the district
15 court is AFFIRMED.
16
17 FOR THE COURT:
18 CATHERINE O’HAGAN WOLFE, CLERK
19
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In Re 650 Fifth Avenue and Related Properties
Combined Opinion