Hegna, Edwena A. v. Islamic Republic

In the
United States Court of Appeals
For the Seventh Circuit
____________

No. 03-4294
EDWENA A. HEGNA, individually and as
executor of the Estate of CHARLES HEGNA,
deceased, CRAIG HEGNA, STEVEN HEGNA, et al.,
Plaintiffs-Appellants,
v.

ISLAMIC REPUBLIC OF IRAN and IRANIAN
MINISTRY OF INFORMATION AND SECURITY,
Defendants,
and

UNITED STATES OF AMERICA,
Movant-Appellee.

____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 02 C 8643—Suzanne B. Conlon, Judge.
____________
ARGUED MAY 27, 2004—DECIDED AUGUST 11, 2004
____________

Before FLAUM, Chief Judge, and MANION and KANNE,
Circuit Judges.
FLAUM, Chief Judge. Edwena A. Hegna, Craig Hegna,
Lynn Marie Hegna Moore and Paul Hegna, the plaintiffs-
appellants, are the wife and children of Charles Hegna, an
2 No. 03-4294

American who was murdered during a 1984 terrorist hijacking
of a Kuwaiti Airlines flight. The hijacking was undertaken
by Hezbollah, a terrorist group sponsored by the Islamic
Republic of Iran and the Iranian Ministry of Information
and Security (collectively “Iran”). The appellants brought
suit under 28 U.S.C. § 1607(a)(7) against Iran in the United
States District Court for the District of Columbia seeking
money damages for the death of Charles Hegna. The
district court entered a default judgment in January 2002
in the amount of $42 million in compensatory damages and
$333 million in punitive damages.
The Hegnas registered the judgment in the United States
District Court for the Northern District of Illinois in November
2002. In January 2003, the Hegnas obtained writs of attach-
ment seeking the levy and sale or turnover of two condo-
minium units owned by the Iranian government located at
155 N. Harbor Drive in Chicago, Illinois (“Chicago properties”)
in aid of execution of the judgment. The condominiums are
currently in the custody of the United States government.
After the Hegnas moved for a turnover order to obtain title
to the properties, the United States moved to quash the
writs of attachment. In December 2003, the district court
granted the government’s motion, and the Hegnas now
appeal. We affirm the judgment of the district court for the
reasons stated herein.

I. Background
In 1996, as part of the Antiterrorism and Effective Death
Penalty Act (“AEDPA”), Congress amended the Federal
Sovereign Immunities Act (“FSIA”) to create an exception
to sovereign immunity for state-sponsored terrorist acts.
See 28 U.S.C. § 1605(a)(7) (providing that a “foreign state
shall not be immune from the jurisdiction of courts of the
United States . . . in any case . . . in which money damages
are sought against a foreign state for personal injury or death
No. 03-4294 3

that was caused by an act of torture, extrajudicial killing,
aircraft sabotage, hostage taking, or the provision of ma-
terial support or resources”). The exception applies only if
the foreign state had been designated as a state sponsor of
terrorism when the terrorist act occurred or was so desig-
nated as a result of the act that caused the injury. See 28
U.S.C. § 1605(a)(7)(A). Former Secretary of State George
Schultz designated Iran as a state sponsor of terrorism on
January 23, 1984.
On December 4, 1984, members of the aforementioned
Hezbollah hijacked a Kuwaiti Airways aircraft bound for
Pakistan. One of the passengers on the plane was Charles
Hegna, an American citizen employed by the United States
Agency for International Development. The terrorists ulti-
mately forced the pilot to land at Iran’s Tehran airport.
Thereafter, the terrorists fatally shot Mr. Hegna and threw
his body from the plane.
Mr. Hegna’s wife and children brought suit against Iran
in April 2000 under 28 U.S.C. § 1605(a)(7) seeking compen-
sation for his murder. The Iranian government defendants
did not appear, and in January 2002 the district court entered
a default judgment in the amount of $42 million in compen-
satory damages and $333 million in punitive damages.
Hegna v. Islamic Republic of Iran, No. 1:00CV00716 (D.D.C.
Feb. 7, 2002) (amended order and judgment).
Until November 2002, the Hegnas had no means for en-
forcing the judgment against Iran. At that time, Congress
enacted § 201 of the Terrorism Risk Insurance Act of 2002
(“TRIA”), Pub. L. No. 107-297, § 201, 116 Stat. 2,322, 2,337
(codified at 28 U.S.C. § 1610 note). TRIA subjects a class of
Iran’s property in the United States to execution and
attachment in aid of execution. Section 201(a) of TRIA states:
Notwithstanding any other provision of law, and except
as provided in subsection (b) [of this note], in every case
in which a person has obtained a judgment against a
4 No. 03-4294

terrorist party on a claim based upon an act of terror-
ism, or for which a terrorist party is not immune under
section 1605(a)(7) of title 28, United States Code, the
blocked assets of that terrorist party (including the
blocked assets of any agency or instrumentality of that
terrorist party) shall be subject to execution or attach-
ment in aid of execution in order to satisfy such judg-
ment to the extent of any compensatory damages for
which such terrorist party has been adjudged liable.
28 U.S.C. § 1610 note. “Blocked asset” is defined by TRIA as
“any asset seized or frozen by the United States under
section 5(b) of the Trading With the Enemy Act (50 U.S.C.
App. 5(b)) or under sections 202 and 203 of the International
Emergency Economic Powers Act (50 U.S.C. 1701; 1702).”
TRIA § 201(d)(2)(A). Expressly excluded from the definition
of a “blocked asset” is “property subject to the Vienna
Convention on Consular Relations . . . that . . . is being used
exclusively for . . . consular purposes.” See TRIA
§ 201(d)(2)(B).
Five years prior to Mr. Hegna’s murder, President Carter
had responded to the 1979 Iran hostage crisis by issuing
Executive Order 12170 pursuant to the International
Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq.,
blocking all property and interests in property of the
Government of Iran subject to the jurisdiction of the United
States. Exec. Order No. 12170, 44 Fed. Reg. 65,729 (Nov. 15,
1979). Despite Executive Order 12170, the United States
permitted Iran to continue to occupy its diplomatic and con-
sular properties until April 7, 1980, when the President
severed diplomatic and consular relations with Iran and
ordered Iranian diplomatic and consular officials to leave
the United States. Since that time, all of the Iranian diplo-
matic and consular properties located in this country have
been in the custody of the United States government
pursuant to the United States’ obligation under Article 27
No. 03-4294 5

of the Vienna Convention on Consular Relations and Article
45 of the Vienna Convention on Diplomatic Relations to
“respect and protect” the property of the consular and diplo-
matic posts following the severance of diplomatic relations.
The properties have been maintained by the Office of
Foreign Missions of the United States Department of State
since 1982 pursuant to the Foreign Missions Act, 22 U.S.C.
§ 4305(c)(1).1
Invoking TRIA § 201(a), the Hegnas sought to recover on
their § 1605(a)(7) judgment by executing against and attach-
ing certain blocked properties of Iran, including the Chicago
properties.2 Prior to the 1980 severance of consular relations
between the United States in Iran, the Chicago properties
had been used as residences by employees of the Consulate
of Iran. The Hegnas obtained writs of attachment on
January 21, 2003 from the United States District Court for
the Northern District of Illinois seeking the levy and sale or

1
As is discussed further in the body of this opinion, the United
States’ custody of the Chicago properties is the subject of a claim
before the Iran-United States Claims Tribunal at the Hague
(“Claims Tribunal”). The Claims Tribunal was established on July
1, 1981 by the Algiers Accords, an international agreement
comprised by five documents. The Algiers Accords set forth the
respective obligations of the United States and Iran following the
severance of diplomatic and consular relations.
2
For the purposes of this appeal, we need not decide whether these
properties are “blocked assets” within the meaning of TRIA
§ 201(d)(2).
6 No. 03-4294

turnover of the Chicago properties.3 Iran did not appear to
defend the action.
In addition to pursuing attachment and execution of the
Chicago properties in aid of execution of their judgment, the
Hegnas also pursued relief under the Victims of Trafficking
and Violence Protection Act (“VTVPA”), Pub. L. No. 106-386,
§ 2002(a)(2)(A), 114 Stat. 1,464, 1,542 (2002), amended by
TRIA § 201(c)(1). Section 2002 authorized the Secretary of
the Treasury to buy judgments from judgment-creditors of
Iran and Cuba. These payments by the United States were
intended to provide judgment-creditors an alternative to
enforcing their § 1605(a)(7) judgments against Iran. VTVPA
§ 2002(a) provided judgment-creditors the option of collect-
ing either 110 percent or 100 percent of the amount of
compensatory damages that they had been awarded on a
§ 1605(a)(7) claim, in exchange for the relinquishment of cer-
tain rights to enforce their judgments. All judgment-creditors
who collected payment under § 2002 had to “relinquish[ ] all
claims and rights to compensatory damages and amounts
awarded as judicial sanctions.” § 2002(a)(2)(B). Addition-

3
The Hegnas have also pursued the attachment of properties in
New York, Maryland, and Texas. See, respectively, Hegna v. Islamic
Republic of Iran, 299 F. Supp. 2d 229 (S.D.N.Y. 2004) (denying the
Hegnas’ application for attachment); Hegna v. Islamic Republic of
Iran, No. 03-2159 (4th Cir. July 14, 2004) (holding that the writs
of attachment at issue were properly quashed because the Hegnas’
acceptance of partial payment from the United States effected a
relinquishment of all rights to execute against or attach tribunal
property); Hegna v. Islamic Republic of Iran, Nos. 03-10994, 03-
20984 (5th Cir. July 19, 2004) (holding that the writ of execution
against one property was properly quashed because the Hegnas’
acceptance of partial payment from the United States effected a
relinquishment of their right to attach against tribunal property,
and that the writ of execution against the other property at issue
was properly quashed because the property was not a “blocked
asset” within the meaning of TRIA § 201(d)(2)(B)(ii)).
No. 03-4294 7

ally, those creditors who elected to collect 110 percent of
compensatory damages awarded were required to further
relinquish “all claims and rights to punitive damages awarded
in connection with such claim.” § 2002(a)(2)(C). Lastly, those
who elected to collect 100 percent of compensatory damages
awarded were required to “relinquish[ ] all rights to execute
against or attach property that is at issue in claims against
the United States before an international tribunal . . . .”
§ 2002(a)(2)(D).
As originally enacted, § 2002(a)(2)(A)(ii) provided for pay-
ment to a limited group of judgment-creditors, and at that
time, the Hegnas were not statutorily eligible for compen-
sation. The TRIA amendments to § 2002 expanded eligibility
for payment to § 1605(a)(7) judgment-creditors of Iran who
had filed suit before October 28, 2000. See TRIA § 201(c)(1)
(amending VTVPA § 2002(a)(2)(A)(ii)). The Hegnas were
thus eligible for payment. Recognizing that the funds allo-
cated for making payments under § 2002 might be inadequate
to cover the full amount of compensatory damages awarded to
each of the newly eligible judgment-creditors, TRIA § 201(c)(4)
authorized partial payment to judgment-creditors on a pro
rata basis, to be calculated in proportion to the amount of
compensatory damages awarded to each claimant. See TRIA
§ 201(c)(4) (amending VTVPA § 2002(d)(1)). In light of the
possibility that these judgment-creditors might collect only
a pro rata payment, TRIA excused these judgment-creditors
from the preexisting VTVPA § 2002 requirement that they
forgo other attempts to collect compensatory damages owed on
the judgment. See TRIA § 201(c)(4) (amending VTVPA
§ 2002(d)(5)). However, in exchange for receiving a pro rata
payment in an amount “less than the full amount of compen-
satory damages awarded,” the newly eligible judgment-
creditors were required to relinquish their rights to collect
punitive damages and to enforce their judgments “against
property that is at issue in claims against the United States
8 No. 03-4294

before an international tribunal.” See TRIA § 201(c)(4)
(amending VTVPA § 2002(d)(5)(A), (B)).
On or about March 20, 2003, the Hegnas applied for pay-
ment under VTVPA § 2002(a)(2)(A)(ii), as amended by TRIA
§ 201(c)(1). In doing so, they were required to submit
documentation to the Office of Foreign Assets Control
(“OFAC”) of the Department of Treasury describing “all
ongoing attachment and/or execution proceedings relating
to the [outstanding] judgment.” Payments to Persons Who
Hold Certain Categories of Judgments Against Cuba or
Iran, 68 Fed. Reg. 8077, 8078 (Feb, 19, 2003), (available at
2003 WL 354372). As discussed above, the Hegnas had ob-
tained writs of attachment seeking the levy, sale, or turnover
of the Chicago properties two months prior to submitting
their application, and they informed OFAC of the pendency
of those proceedings in their applications. Additionally, the
OFAC application required the Hegnas to submit the fol-
lowing disclosures regarding their statutory relinquishment
of rights in the event of a pro rata payment:
In the event that . . . the payment that I receive will be
less than the full amount of compensatory damages
awarded to me . . . I hereby relinquish (1) all rights and
claims to punitive damages awarded in connection with
the claim or claims I brought under 28 U.S.C.
1605(a)(7) . . . and (2) all rights to execute against or
attach property that is at issue in claims against the
United States before an international tribunal or that
is the subject of awards by such tribunal. I understand
that the relinquishment that I make in the event of any
pro rata distribution is irrevocable once the payment is
credited to the bank account I have identified in this
application . . . .
Id.
While the Hegnas’ applications for payment from OFAC
were pending, they continued to pursue relief through the
No. 03-4294 9

attachment of the Chicago properties. After the district
court issued writs of attachment seeking the levy and sale
or turnover of the Chicago properties, the matter was
referred to a magistrate judge. On April 21, 2003, shortly
after applying for payment from OFAC, the Hegnas moved
for a turnover order to obtain title to the properties. The
United States appeared pursuant to 28 U.S.C. § 517 and
moved to quash the writs of attachment. The United States
argued that the Chicago properties were not subject to at-
tachment under TRIA § 201(d)(2)(B)(ii), because that section
exempts from the definition of “blocked asset” “property
subject to the . . . Vienna Convention on Consular
Relations . . . that . . . is being used exclusively for . . .
consular purposes.”
While the matter was pending before the magistrate judge,
OFAC responded to the Hegnas’ applications for payment.
In June 2003, following the receipt of the Hegnas’ applica-
tions and disclosures, R. Richard Newcomb, the Director of
OFAC, sent a letter to them reiterating that their statutory
relinquishment of rights would “take[ ] effect on the date
upon which OFAC issues a pro rata payment.” On or about
July 30, 2003, the Hegnas collected the first installment of
their partial payment under VTVPA.4 A few days later, on
August 11, 2003, the magistrate judge recommended that
the United States’ motion to quash the writs of attachment
be denied, but the turnover order stayed pending resolution
of Hegna et al. v. Snow, No. 03-1479 (D.D.C.). Also on
August 11, 2003, the United States filed a supplemental
memorandum before the magistrate judge arguing that the
Hegnas had relinquished their rights to attach the Chicago
properties upon receipt of the VTVPA payments, by opera-
tion of the relinquishment provisions of the amended
§ 2002(d)(5). The United States urged that the Chicago

4
The Department of the Treasury furnished the Hegnas with the
remainder of their proportionate share on November 13, 2003.
10 No. 03-4294

properties were at issue before an international tribunal,
and that the Hegnas’ receipt of VTVPA funds had therefore
precluded them from attaching those properties in aid of
execution of their § 1605(a)(7) judgment. The district court
agreed with the United States and dismissed the enforce-
ment action on the ground that the Hegnas had relin-
quished their rights to attach the Chicago properties in aid
of execution of their judgment. Hegna v. Islamic Republic of
Iran, No. 02 C 8643 (N.D. Ill. Dec. 3, 2003) (order dismissing
enforcement action with prejudice). The district court
quashed the writs of attachment on December 5, 2003, and
this appeal followed.

II. Discussion
The Hegnas challenge the district court’s order quashing
the writs of attachment on the Chicago properties, arguing
that district court erred in concluding that the receipt of
payment pursuant to VTVPA § 2002(d)(1) (as amended by
TRIA § 201(c)(4)) forced a relinquishment of their rights to
pursue attachment remedies against the Chicago proper-
ties. We review the district court’s determinations of law de
novo. See Hileman v. Maze, 367 F.3d 694, 696 (7th Cir.
2004).
The Hegnas present several arguments in attempts to
persuade this Court that the statutory relinquishments
have no application to their pursuit of the attachment and
execution of the Chicago properties. We begin with the
Hegnas’ argument that the application of the statutory
relinquishments is solely prospective in nature. According
to the Hegnas, their pre-July 30, 2003 efforts to attach the
Chicago properties could not be defeated by their collection
of payment on that date; that is, they believe that, so long
as they had begun the process of attaching property prior to
the actual receipt of funds from the Department of Trea-
No. 03-4294 11

sury, the receipt of those funds is irrelevant to the comple-
tion of the attachment and execution process.
The Hegnas’ argument conflicts with the language of
VTVPA § 2002(a)(2)(D), and for that reason, it must be re-
jected. The amended VTVPA § 2002(d)(5) incorporates the
requirement set forth in § 2002(a)(2)(D) that an applicant
“relinquish[ ] all rights to execute against or attach property
that is at issue in claims against the United States before
an international tribunal . . . .” See VTVPA § 2002(d)(5)(B),
(as amended by TRIA § 201(c)(4)) (emphasis added). The word
“all” communicates that no right to execute or attach property
survives the acceptance of payment, regardless of when the
claimant initiated the attachment process.
However, the Hegnas argue that their July 2003 accep-
tance of partial payment could not supercede their efforts to
obtain the Chicago properties because their interest in the
properties had already been perfected by that time. Citing
Federal Rule of Civil Procedure 69(a), the Hegnas urge that
Illinois execution procedure governs the attachment and
execution of the Chicago properties. See Fed. R. Civ. P.
69(a) (directing that execution proceedings “shall be in
accordance with the practice and procedure of the state in
which the district court is held . . .”). Analogizing to Illinois
law of personal property, the Hegnas argue that a lien “is
considered perfected as of the date of service of the cita-
tion.” See Cacock v. Covington, 11 F.3d 52, 54 (7th Cir.
1997). The Hegnas urge that after the U.S. Marshal
returned the writs of attachment on January 27, 2003, the
levy was complete, the Chicago properties brought into the
custody of the district court, and the levy was not subject to
defeat by any subsequent events.
This theory must fail. Despite the Hegnas’ perfection of
their interest in the Chicago properties, no turnover order
had issued; their interest remained open to challenge while
the motion for turnover was pending in the district court.
12 No. 03-4294

See 100 W. Monroe Partnership v. Carlson, 319 Ill.App.3d
761,769 (Ill.App. 1 Dist. 2001) (“A citation lien remains
subject to attack and modification until the turnover order.
It is the turnover order which makes the lien irrevocable.”). In
ruling on the Hegnas’ motion to turnover the Chicago prop-
erties, the district court was required by Federal Rule of
Civil Procedure 69 to enforce applicable federal law. See
Fed. R. Civ. P. 69 (providing that federal law is to govern ex-
ecution proceedings “to the extent that it is applicable”). In
this case, the relinquishments set forth in § 2002(a)(2)(D)
(as amended by TRIA § 201(c)(4)) were directly applicable,
and those relinquishments required the defeat of the Hegnas’
efforts to execute the Chicago properties, regardless of the
effect of the levy under Illinois law. After the Hegnas ac-
cepted partial payment under the amended § 2002, the
ongoing attachment proceedings were rendered moot.
Next, the Hegnas argue that § 2002(a)(2)(D) precludes
only efforts to “execute against or attach [tribunal] proper-
ties,” but does not intend to preclude the post-levy sale or
turnover of those properties. Under this theory, the Hegnas
would have us believe that Congress intended to allow one
type of execution proceeding—the post-levy sale—while pre-
cluding all others. The policy behind § 2002(a)(2)(D) does not
support the Hegnas’ reading of the statute. The payments
offered by the amended § 2002 are to serve as a substitute,
rather than as a supplementary, method for the collection
of compensatory damages awarded in § 1605(a)(7) lawsuits;
for that reason, § 2002(a)(2)(D) requires the relinquishment of
“all rights to execute against or attach property” (emphasis
added). To read a “post-levy execution” exception into the
§ 2002(a)(2)(D) relinquishment would be to detract from its
purpose, that is, to demand a relinquishment of all rights to
attach certain property in exchange for collection of funds
from the United States. In the case that judgment-creditors
receive only partial payment, they may continue to pursue
outstanding compensatory damages by methods other than
No. 03-4294 13

executing against tribunal property, see VTVPA § 2002(d)(5)
(as amended by TRIA § 201(c)(4)), but the plain language of
the statute compels the relinquishment of the right to
pursue all forms of execution against tribunal property, in-
cluding the post-levy turnover of such property.
The Hegnas also argue that this Court should view the
magistrate’s August 11, 2003 recommendation to deny the
United States’ motion to quash the writs of attachment as
if it had been granted prior to their July 2003 receipt of
partial payment from the Department of Treasury. The
Hegnas argue that, had the United States appeared to con-
test the attachment of the Chicago properties soon after the
January 2003 writs of attachment were issued, instead of
waiting until April 24, 2003 to do so, then the magistrate
likely would have recommended a turnover order prior to
Hegnas’ July 30, 2003 receipt of payment. Additionally,
they contend that the United States failed to prove before
the district court that the recommended stay of the turn-
over order was merited; therefore, they argue, this Court
should consider the magistrate’s recommendation for a turn-
over order as if there had been no suggested stay of that
order. In their view, the district court should have granted
a nunc pro tunc order, to predate the turnover order.
A nunc pro tunc order is granted only in extreme cases,
when “a court has spent an undue amount of time deliberat-
ing and thereby has caused the parties prejudice or harm.”
Transamerica Ins. Co. v. South, 975 F.2d 321, 326 at n.2
(7th Cir. 1995). The circumstances presented by this case do
not merit the operation of the doctrine of nunc pro tunc. “As
this court stated in King v. Ionization International, Inc., 825
F.2d 1180, 1188 (7th Cir. 1987), ‘[t]he office of a nunc pro tunc
(‘now for then’) order is to clean up the records by showing
what was previously done with effect from the time done; it
is not to alter substantive rights.’ ” Transamerica, 975 F.2d
at 325. In this case, the district court ultimately rejected
the magistrate’s recommendation for a turnover order. Even
14 No. 03-4294

if the magistrate’s August 11, 2003 recommendation and
report had suggested that the turnover order be issued
immediately, rather than stayed, the district court would
have rejected the suggestion. The district court’s order
quashing the writs of attachment was premised on the
Hegnas’ July 30, 2003 acceptance of partial payment, an
event which predated the magistrate’s recommendation.
The Hegnas ignore the effect that this payment had on their
substantive rights under TRIA to attach certain properties.
To argue for a nunc pro tunc order is to ask this Court to
turn a blind eye to the consequences of that July 30, 2003
payment.
Lastly, the Hegnas argue that relinquishment is condi-
tioned upon receipt of the claimant’s entire proportionate
share. They urge that their receipt of partial payment in
July 2003 was insufficient to work a relinquishment of their
rights under VTVPA § 2002(d)(5)(B) (as amended by TRIA
§ 201(c)(4)). We disagree. The amended § 2002(d)(5) pro-
vides for relinquishment of certain rights in exchange for
payment, and it makes no exceptions for instances of partial
or incomplete payment. As the plain language of the text
clearly communicates, the § 2002(d)(B)(5) relinquishments
are triggered whenever a claimant receives less than the
complete compensatory damages awarded, regardless of the
relative paucity of the amount received: “Any person
receiving less than the full amount of compensatory dam-
ages awarded to that party in a judgment . . . shall be
required to relinquish rights . . . with respect to enforce-
ment against property that is at issue in claims against the
United States before an international tribunal . . . .” VTVPA
§ 2002(d)(5) (as amended by TRIA § 201(c)(4)). The phrase
“less than the full amount of compensatory damages,” id.,
encompasses a payment that is less than the full propor-
tionate share.
Thus, having concluded that the Hegnas’ relinquishments
were effective upon their receipt of funds on July 30, 2003,
No. 03-4294 15

we now turn to the issue of whether the Chicago properties
were within the scope of those relinquishments. That is, we
consider whether the Chicago properties were “at issue in
claims against the United States before an international
tribunal.” See VTVPA § 2002(d)(5)(B) (as amended by TRIA
§ 201(c)(4)). The United States contends that Iran has filed
various claims before the Iran-United States Claims
Tribunal at the Hague in regards to the United States’ re-
fusal to turn over Iranian consular properties, including the
Chicago properties. The Claims Tribunal was established
pursuant to the Algiers Accords of 1981 for the purpose of
resolving claims of United States nationals against Iran,
claims of Iranian nationals against the United States, and
certain claims of the United States and Iran against each
other. Of particular relevance here is a claim filed by Iran
against the United States in 1982, “alleging that the United
States had breached its obligations under the Algiers
Declarations by failing to grant Iran custody of its diplo-
matic and consular properties in the United States.” See
Islamic Republic of Iran v. United States, 33 Iran-U.S. Cl.
Tr. Rep. 362 (1997), 1997 WL 1175789. In 1994, the Claims
Tribunal postponed hearings “until further notice, noting
that, pursuant to the Parties’ joint submission, if negotia-
tions do not result in a full and final settlement, either
party, without the consent of the other party, may request
that the Tribunal fix a new date for the hearing.” Id. (in-
ternal citations omitted).
The Hegnas respond that the Chicago properties are not
truly “at issue” before the Claims Tribunal because the subject
matter jurisdiction of that body is a matter of contention. In
their view, because the United States has challenged the
Claims Tribunal’s subject matter jurisdiction, the status of
the consular properties is not actually the subject of the
litigation. We are not persuaded by the Hegnas’ argument.
Regardless of the eventual outcome of the dispute over the
Claims Tribunal’s subject matter jurisdiction, the lawsuit
16 No. 03-4294

filed before that court concerns the United States’ obliga-
tions under the Algiers Accords to grant Iran custody of its
consular properties. It is of no moment that the Claims
Tribunal has not yet reached the merits of the underlying
dispute.
We conclude that the Chicago properties are at issue be-
fore the Claims Tribunal, and that the Hegnas’ acceptance
of partial payment under VTVPA precludes the Hegnas
from attaching those properties in aid of execution of their
judgment against Iran. See VTVPA § 2002(d)(5) (as amended
by TRIA § 201(c)(4)). Having concluded that the Hegnas
forfeited any right that they may have had under § 201(a)
of TRIA to attach the Chicago properties in aid of execution of
their judgment, we need not reach the issue of whether
those properties were subject to attachment as “blocked
assets” within the meaning of § 201(d)(2) of TRIA.

III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the
district court.

A true Copy:
Teste:

________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit

USCA-02-C-0072—8-11-04
No. 03-4294 17