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United States Court of Appeals
Fifth Circuit
F I L E D
July 19, 2004
In the
Charles R. Fulbruge III
United States Court of Appeals
Clerk
for the Fifth Circuit
_______________
m 03-10994
m 03-20984
_______________
EDWENA HEGNA; INDIVIDUALLY AND AS EXECUTRIX OF
THE ESTATE OF CHARLES HEGNA; CRAIG HEGNA; STEVEN HEGNA;
LYNN HEGNA; PAUL HEGNA,
Plaintiffs-Appellants,
VERSUS
ISLAMIC REPUBLIC OF IRAN;
IRANIAN MINISTRY OF INFORMATION AND SECURITY,
Defendants-Appellees,
UNITED STATES OF AMERICA
Movant-Appellee.
_________________________
Appeals from the United States District Court
for the Northern District of Texas
and the United States District Court
for the Southern District of Texas
_________________________

Before SMITH, PRADO, AND PICKERING,
The Victims of Trafficking and Violence
Circuit Judges.
Protection Act of 2000 ("VTVPA"), Pub. L.
No. 106-386, § 2002, 114 Stat. 1464, 1541
JERRY E. SMITH, Circuit Judge:
(2000), created a regime whereby a party who
secured a judgment under § 1605(a)(7) could
Charles Hegna died at the hands of
receive payment from the Secretary of the
terrorists who received partial support from
Treasury. In exchange for that payment, the
the Islamic Republic of Iran. Members of the
recipient would relinquish certain rights to col-
Hegna family have attempted to collect a
lect against the terrorist state.3
default judgment against property previously
owned by Iran and currently held by the Unit-
The Terrorism Risk Insurance Act
ed States. Based on domestic statutes and
("TRIA"), Pub. L. No. 107-297, § 201(a), 116
international treaties, the two district courts a
Stat. 2322 (2002), provided additional rights
quo quashed writs of attachment and
to parties possessing judgments under § 1605-
execution issued respectively against two
(a)(7). TRIA states that a successful plaintiff
parcels of real property. Finding no error, we
may attach and execute against the "blocked
affirm both judgments.
assets"4 of terrorist parties.5
I.
Additionally, TRIA § 201(c)(4) amends the
A.
VTVPA by inserting a section describing the
The Federal Sovereign Immunities Act
procedures the government must follow in the
("FSIA") articulates the general rule that "a
event available funds cannot satisfy all the
foreign state shall be immune from the
outstanding requests for payment for § 1605-
jurisdiction of the courts of the United States
(a)(7) claims. Although those receiving partial
and of the States." 28 U.S.C. § 1604. As part
payments do not have to relinquish as many
of the 1996 Antiterrorism and Effective Death
Penalty Act ("AEDPA"), Congress created an
exception for state-sponsored terrorist actions.
3 Additionally, VTVPA § 2002(b)(2) lists the
28 U.S.C. § 1605(a)(7).1 To be subject to
sources of funding for payments arising out of
§ 1605(a)(7), a nation must be designated as a
judgments against Iran: "rental proceeds . . . from
state sponsor of terrorism. § 1605(a)(7)(A).2
Iranian diplomatic and consular property located in
the United States; and . . . funds not otherwise
made available in an amount not to exceed the total
of the amount in the Iran Foreign Military Sales
1 "A foreign state shall not be immune . . . in
Program account within the Foreign Military Sales
any case . . . in which money damages are sought
Fund[.]"
against a foreign state for personal injury or death
that was caused by an act of torture, extrajudicial
4 TRIA § 201(d)(2) defines "blocked asset."
killing, aircraft sabotage, hostage taking, or the
provision of material support or resources" in aid
5 "[I]n every case in which a person has ob-
of a terrorist action. 28 U.S.C. § 1605(a)(7).
tained a judgment against a terrorist party on a
claim based upon an act of terrorism[,] the blocked
2 The Secretary of State has designated Iran as
assets of that terrorist party . . . shall be subject to
a state sponsor of terrorism. 49 Fed. Reg. 2836-02
execution or attachment in aid of execution in order
(Jan. 23, 1984).
to satisfy such judgment . . . ." TRIA § 201(a).
2

rights as they would have forfeited had they
judgment for $42,000,000 in compensatory
received full payment via the VTVPA, the
damages and $333,000,000 in punitive
recipients must give up some recovery rights.
damages against the Islamic Republic of Iran
VTVPA § 2002(a)(2)(C) requires the
and the Iranian Ministry of Information and
relinquishment of punitive damages against a
Security.7
terrorist entity, and § 2002(a)(2)(D) prevents
parties from executing or attaching property
Relying upon TRIA § 201(a), the Hegnas
"that is[, inter alia,] at issue in claims against
have attempted to attach and execute against
the United States before an international
numerous properties that Iran owned at the
tribunal[.]"
time of the 1979 hostage crisis.8 Specifically,
Thus, in response to a family member's
death, a party may seek a judgment against a
6(...continued)
state sponsor of terrorism. The party may sat-
action against officials, employees, and
isfy such a judgment by seeking and receiving
agents of a foreign state, not against the
payment under the VTVPA and by attaching
foreign state itself.
and enforcing against "blocked assets"
pursuant to the TRIA.
Id. at 1033.
B.
Although Acree and Cipio considered statutes
In 1984, Hezbollah terrorists hijacked a Ku-
at issue in the current appeal, they involved
waiti airliner and diverted it to Tehran, fatally
different circumstances and issues. Both cases
shooting Charles Hegna in the process. In
considered the validity of the underlying judgment.
2001, the Hegna family sought and obtained,
In the instant matter, neither party contests the
pursuant to 28 U.S.C. § 1605(a)(7),6 a default
validity of the Hegna family's original judgment.
Because neither side has briefed the issue or had an
opportunity to argue the point diligently, we choose
only to address the family's ability to satisfy its
6 Few courts of appeals have considered the
judgment against these two particular pieces of
application of § 1605(a)(7). But see Acree v. Re-
property. If the United States wishes to argue the
public of Iraq, 2004 U.S. App. LEXIS 10972
reach of § 1605(a)(7), it may do so in a subsequent
(D.C. Cir. June 4, 2004) (vacating a § 1605(a)(7)
case.
award for failing to state a claim); Cicippio-Puleo
v. Islamic Republic of Iran, 353 F.3d 1024 (D.C.
7 Hegna v. Islamic Republic of Iran, No.
Cir. 2004). Cicippio-Puleo held:
1:00CV00716 (D.D.C. Feb. 7, 2002).
[N]either 28 U.S.C. § 1605(a)(7) nor the
8 In the midst of the Iranian revolution of 1979,
Flatow Amendment[, which granted punitive
numerous "students" aligned with Ayatollah Koh-
damages pursuant to § 1605(a)(7)], nor the
meini took Americans hostage in the American
two considered in tandem, creates a private
Embassy. The President froze all property and
right of action against a foreign government.
assets of the government of Iran that fell within or
Section 1605(a)(7) merely waives the
would fall within the jurisdiction of the United
immunity of a foreign state without creating
States. Exec. Order No. 12170, 44 Fed. Reg.
a cause of action against it, and the Flatow
65729 (Nov. 14, 1979). The United States ulti-
Amendment only provides a private right of
mately severed diplomatic and consular relations
(continued...)
(continued...)
3

they have pursued properties in New York,9
Although the two countries promised, as
Illinois,10 Maryland,11 and Texas. Additionally,
part of the Algiers Accords,13 to exchange
they filed for a payment pursuant to the
seized consular property, each has retained
VTVPA.12
previously-seized property. Consequently, the
United States acts as a custodian of the
property that the Hegnas have attempted to
8(...continued)
attach, and, in every case, has moved to
with Iran. The hostage crisis ended with the sign-
invalidate the family's actions.
ing of the Algiers Accords in January 1981.
In the instant matter, the family attached
9 Hegna v. Islamic Republic of Iran, 299 F.
two pieces of Iranian property located in Tex-
Supp. 2d 229 (S.D.N.Y. 2004). The district court
as. One, located in Lubbock, served as a
denied the application for attachment based on the
home from which the then-Crown Prince of
conclusion that the Hegnas had relinquished the
Iran could receive fighter pilot training.14 The
right to attach the New York property after ac-
property located in Houston previously served
cepting payment via the VTVPA.
as the residence of the General Consul of
10 Hegna v. Islamic Republic of Iran, 2003
U.S. Dist. LEXIS 14039 (N.D. Ill. Aug. 11, 2003).
The magistrate judge recommended denying the
United States' motion to quash the family's writ of
attachment. The Illinois proceedings occurred after
the Hegnas had applied for payment pursuant to
12(...continued)
VTVPA but before payment from the government.
fulness. The notice, however, contains ample lang-
Because the Hegnas sought to rescind their ap-
uage to indicate that a party may file for a VTVPA
plication for payment, the magistrate judge rec-
payment and does not indicate that a plaintiff may
ommended staying further proceedings until the
pursue relief only through the VTVPA.
resolution of the VTVPA payment issue. As dis-
cussed, infra, the Hegnas received payments in
13 In part, the Accords established the Iran-Unit-
July and November 2003.
ed States Claims Tribunal, a nine-member
commission charged with resolving "claims of
11 Hegna v. Islamic Republic of Iran, 287 F.
United States nationals against Iran and of Iranian
Supp. 2d 608 (D. Md. 2003). The district court
nationals against the United States[;] certain `offi-
granted the United States' motion to quash the fam-
cial claims' between the two Governments relating
ily's writ after concluding that the property at issue
to the purchase and sale of goods and services;
fell outside TRIA's definition of "blocked asset."
disputes between the two Governments concerning
the interpretation or performance of the Algiers
12 The Hegnas argue that the Department of the
Declarations; and certain claims between United
Treasury issued guidelines that ordered plaintiffs
States and Iranian banking institutions." Iran-
such as themselves to apply for the VTVPA funds.
United States Claims Tribunal Background
Because the language of the VTVPA states that the
Information, available at http://www.iusct.org/-
payment regime initiates only "at the person's
background-english.html (accessed June 18, 2004).
election," the family's argument warrants slightly
more discussion. VTVPA, § 2002(a)(1).
We agree that the Treasury Guideline does not
14 The Crown Prince received training at Lub-
stand as a model of clarity, directness, or help-
bock's Reese Air Force Base, which was closed in
(continued...)
1997.
4

Iran.15
writ. The respective cases, however, present
distinct questions of law. With respect to the
With respect to the Lubbock property, the
Houston property, we must determine whether
district court granted a writ of attachment and
the property fits within the "blocked asset"
a motion for expedited levy of a writ of
exclusion in TRIA § 201(d)(2)(B)(ii). With
execution16 and scheduled the sale of the
respect to the Lubbock property, we must de-
property for August 26, 2003. The United
cide exactly how a partial payment pursuant to
States provided an initial VTVPA payment to
VTVPA and TRIA affects a party's ability to
the Hegnas on July 30, 2003, and filed an
collect against non-consular property. We re-
emergency motion to void the sale on August
view the district court's legal analyses de no-
22, 2003. Without providing a written
vo. Kennedy v. Tangipahoa Parish Library
analysis, the district court granted the motion
Bd. of Control, 224 F.3d 359, 365 (5th Cir.
to void the levy and the sale on August 25,
2000).
2003.
III.
With respect to the Houston property, the
By requesting and receiving partial payment
district court issued a writ of execution on No-
according to the terms of the VTVPA, the
vember 27, 2002. After the United States
Hegnas relinquished the ability to enforce
moved to quash the writ, the district court re-
against the Lubbock property. The parties do
ferred the matter to a m agistrate judge, who,
not disagree that the Hegnas applied for
on August 21, 2003, concluded that the
payment from the Secretary of the Treasury,
property fell within an exclusion to the
pursuant to VTVPA § 2002(a)(1),17 and that
"blocked asset " definition in TRIA § 201(d)-
they received a partial payment before the sale
(2)(B)(ii) and recommended that the district
of the Lubbock property.
court quash the writ. The district court adopt-
ed the recommendations without amendment.
The Hegnas challenge the order to quash on
The Hegnas appeal the district courts' failure
three grounds. First, they maintain that the
to enforce the original writs of attachment and
partial payment received on July 30 does not
execution.
trigger the relinquishment provisions of the
amended VTVPA. Second, they assert that
II.
any relinquishment may occur only
In each case, the district court granted a
prospectively and cannot apply to property
dispositive motion by terminating the relevant
already attached and set for sale. Third, they
claim that any possible relinquishment does not
apply to the Lubbock property, because such
property is not "at issue" before an
15 Although the two properties are the subjects
of two separate actions and are located in different
federal judicial districts, we consolidated the
matters for argument and disposition. The cases
present similar questions regarding the same set of
statutes.
17 Because the Secretary of the Treasury could
not make a full payment and gave the family only
16 The United States unsuccessfully opposed the
a partial payment, the amended portions of
Hegna family's motion.
VTVPA § 2002(d)(5)(A) and (d)(5)(B), apply.
5

international tribunal.18 To affirm the quashing
fore an international tribunal or that is the
of the writ of execution, we must agree with
subject of awards by such tribunal.
the district court on all three matters.19
The phrase "such person" refers to the in-
A.
dividual "receiving less than the full amount of
The Hegnas' acceptance of a partial
compensatory damages." No other person is
payment triggered the relinquishment
referred to in that subsection. Thus, a party
provisions of the VTVPA. Amended VTVPA
receiving partial payment does not have to re-
§ 2002(d)(5) states that
linquish his rights to compensatory damages
but must give up those rights listed in the two
[a]ny perso n receiving less than the full
subsections. Subsection (a)(2)(C) concerns
amount of compensatory damages awarded
punitive damages, and subsection (a)(2)(D)
to that party in a judgment . . . shall not be
addresses recovery against the "at issue"
required to make the [relinquishment set
properties.
forth in previous sections,] except that such
person shall be required to relinquish rights
The Hegnas would have us draw a line be-
set forth (A) in subsection (a)(2)(C); and
tween a partial-partial paymentSSone that falls
(B) in subsection (a)(2)(D) with respect to
below the statutorily-defined portion that the
enforcement against property that is at is-
government must paySSand a completely-paid
sue in claims against the United States be-
partial payment. In essence, the Hegnas con-
tend that they should have received more than
the government paid them and that the insuffi-
18 Specifically, the Hegnas argue that "[u]ntil
ciency of the amount allowed them to pursue
the matter of the [Iran-United States Claims] Tri-
the sale of the Lubbock property.
bunal's subject matter jurisdiction over the Lub-
bock Property is determined, Iranian properties in
That theory fails for two reasons. First, the
the United States, including the Lubbock Property,
statute does not draw a distinction among
are simply not property that is `at issue' before the
types of partial payments, but merely states
Tribunal[.]"
that "[a]ny person receiving less than the full
19 Though the amended VTVPA requires a par-
amount" will relinquish punitive and "at issue"
ty to relinquish only its general claims for punitive
rights. The receipt of any partial
damagesSSVTVPA § 2002(a)(2)(C)SSit also man-
paymentSSeven $1SSwould limit the Hegnas'
dates relinquishment of all claimsSSpunitive or
recovery options.
otherwiseSSagainst property "at issue in claims
against the United States." § 2002(a)(2)(D). Be-
Secondly, the government eventually paid
cause the amended VTVPA § 2002(d)(5) expressly
the Hegnas their full share of their
states that one receiving less than the full amount
proportional payment. The second payment
of compensatory damages "shall not be required to
occurred in November 2003. Thus, whatever
make the [relinquishment] set forth in subsection
relinquishment provisions are contained within
(a)(2)(B) or with respect to subsection (a)(2)(D),"
the partial payment regime apply to the
a party may continue to pursue compensatory
Hegnas.
awards. That party, however, may not pursue
those awards against "at issue" property. Thus, we
must address whether the Lubbock property is "at
B.
issue."
6

Although receiving the VTVPA payment
Fifth Circuit case23 that concerned bankruptcy
causes them to relinquish "all rights" to
and an 1884 Supreme Court opinion24 that ad-
execute against designated property, the
dressed competing judgment liens from
Hegnas advance a creative but questionable
Tennessee. These cases do not remotely apply
argument that they still may sell the Lubbock
to a situation resembling the instant case.25
property. Because payment did not arrive
until after the district court attached the
The family's interesting theory would re-
property and scheduled a sale, the Hegnas
quire the sale to proceed regardless of the cor-
maintain that the sale should proceed.20 Under
rectness of the attachment or the validity of the
this theory, Texas law21 places the court's levy
sale. Courts would not have the ability to alter
against the Lubbock property in custodia legis
their rulings in the event of a change in
and ties all sales proceedings to the date of
circumstances. The situation, however, did
seizureSSnamely, July 2, 2003.22
change once the United States made a partial
VTVPA payment to the Hegnas.
The Hegnas support this interesting rift in
the space-time-continuum by citing a 1927
Because the family members already
applied for a payment from the government,
they should not argue with the government's
attempts to hold them to the terms of the
20 The Hegnas contend that, "[s]ince the date of
payment. Receipt of the partial payment
actual sale relates back to the levy date, the date of
forced them to relinquish "all rights to execute
sale of the Lubbock Property is July 2, 200[3]."
against or attach property that is at issue in
claims . . . before an international tribunal[.]"
21 The Hegnas cite the general rule that "[t]he
VTVPA § 2002(a)(2)(D) (emphasis added).
procedure on execution . . . shall be in accordance
with the practice and procedure of the state in
Assuming, arguendo, that the Hegnas'
which the district court is held, existing at the time
argument has some validity and that the "right
the remedy is sought, except that any statute of the
. . . to execute" now lies strictly with the dis-
United States governs to the extent that it is
applicable." FED. R. CIV. P. 69(a).
trict court, the court certainly possesses the
ability to revisit its ruling. A court may "re-
22 The Hegnas assert that the train toward judi-
lieve a party or a party's legal representative
cial sale had proceeded past the point of no return:
from a final judgment, order, or proceeding"
"[W]hen the U.S. Marshal levied on the Lubbock
for a variety of reasons, including the open-
Property[,] the procedure for taking the property
into the custody of the District Court was complete
. . . . All that remained to be done was the judicial
23 Wilkinson v. Goree, 18 F.2d 455, 456-57
sale, and V[TV]PA's relinquishment provisions
(5th Cir. 1927).
have no application to post-levy sales."
24 Freeman v. Dawson, 110 U.S. 264, 270
Additionally, the Hegnas suppose that they
(1884).
should have the right to pursue sale to satisfy the
full value of their judgment against Iran. As shown
25 Wilkinson relied on the workings of the for-
in part III.A., supra, however, even a partial
mer Bankruptcy Act and had no connection to en-
payment triggers the VTVPA's full relinquishment
forcing judgments in Texas. Freeman has a sim-
provisions.
ilarly non-existent connection.
7

ended "any . . . reason justifying relief from the
In support of their argument, the Hegnas offer
operation of the judgment." FED. R. CIV. P.
a definition from a 1979 edition of BLACK'S
60(b). See also FED. R. CIV. P. 59(e)
LAW DICTIONARY and citations to two Florida
(describing the period of time in which a party
state court opinions. "At issue," however, in-
must file a motion to alter or amend a
cludes a broader swath of conflict than the
judgment).26
Hegnas assert. The most recent BLACK'S LAW
DICTIONARY (8th ed. 2004) defines "at issue"
The Hegnas' theory places form above
as "[t]aking opposite sides; under dispute; in
common sense and above the district court's
question." Although the United States has
ability to re-evaluate its ruling before the prop-
contested the jurisdiction of the Iran-United
erty is sold. Thus, we turn to whether the
States Claims Tribunal over the properties,
Lubbock property fits within the "at issue"
both matters currently pend before that very
language of § 2002(a)(2)(D).
body. Even if the government ultimately pre-
vails, the Lubbock property will have remained
C.
"at issue" before the tribunal during the instant
Because the Lubbock property was "at is-
appeal.28
sue" in a claim before an international tribunal,
amended VTVPA § 2002(d)(5)(B) prevents
The only question with respect to the "at
the Hegnas from executing on the property.
issue" analysis concerns the evidence that the
The United States asserts that the Lubbock
government has offered. The aforementioned
property is at issue in the Iran-United States
declaration from Clodfelter vaguely but
Claims Tribunal ("Claims Tribunal"). In
coherently states his familiarity with the Claims
support, the government offers a declaration
Tribunal and that the Lubbock property falls
from Mark Clodfelter, who lists himself as the
within a list of properties "specifically
"Assistant Legal Adviser for, and director of
identified as the subject of the Tribunal case."
the office of, International Claims and
Investment Disputes in the Office of the Legal
Though Clodfelter's declaration could have
Adviser of the Department of State."
included more specific information or
The Hegnas respond by contending (1) that
the property cannot be "at issue" until after a
court determines its jurisdiction over the prop-
27(...continued)
erty; and (2) that the Claims Tribunal does not
should not be subject to the Claims Tribunal.
have proper jurisdiction over the property.27
28 The Claims Tribunal has existed since July 1,
1981, and, as of December 31, 2003, has finalized
approximately 3,935 claims. Iran-United States
26 After the district court granted the motion to
Claims Tribunal Background Information,
void the sale, the Hegnas filed a FED. R. CIV. P.
available at http://www.iusct.org/background-eng-
59(e) motion.
lish.html (accessed June 18, 2004); Iran-United
States Claims Tribunal Quarterly Communique of
27 In a related matter, the United States has as-
Jan. 20, 2004, http://www.iusct.org-
serted that consular property should fall under the
/communique-english.pdf (accessed June 18,
Vienna Convention on Consular Relations and
2004). It apparently has not, however, addressed
(continued...)
the Lubbock property.
8

documentary support,29 the Hegnas did not
Before we may consider whether the
deny the substance of the declaration in their
VTVPA blocks collection against the Houston
response, so they are foreclosed from
property, we must determine whether the
requesting a hearing to offer additional
TRIA would allow the Hegnas to attach or ex-
evidence.
ecute against the property in the first place. In
essence, we must make the same inquiry as did
Consequently, the Hegna family's
the magistrate judge. Although we may affirm
acceptance of partial payment triggered the
for any reason the record supports,31 we
relinquishing provisions of the VTVPA.
choose to follow the magistrate judge's
Because the acceptance required the family to
analysis.
relinquish all rights to attach and execute the
judgment, the Hegnas, through the court,
TRIA § 201(a) empowers an individual
cannot sell the property. Finally, because the
who secures a judgment pursuant to 28 U.S.C.
Lubbock property currently stands at issue
§ 1605(a)(7) to attach and execute against
before an international tribunal, VTVPA §
"blocked assets . . . to satisfy such judgment to
2002(a)(2)(D) and (c)(5)(B) prevent the
the extent of any compensatory damages."
Hegnas from attaching or executing any
Section 201(d)(2) defines "blocked asset" in
further judgments against that property.
such a way that it includes the Houston
property.32 Section 201(d)(2)(B)(ii), however,
IV.
exempts otherwise-attachable property from
The government argues that the VTVPA
the "blocked asset" category. To fall within
payment bars the attachment and sale of the
the exemption, the property must satisfy two
Houston property in the same manner as for
criteria.
the Lubbock property. In considering the
Houston property, however, the magistrate
First, the property must be "subject to the
judge expressly avoided the issues discussed in
Vienna Convention on . . . Consular
the analysis of the Lubbock property.30
Relations[.]" TRIA § 201(d)(2)(B)(ii).
29 We wonder why the United States could not
30(...continued)
have offered some documentation to support Clod-
based on their acceptance of payment under the
felter's declaration. Presumably, some formal doc-
VTVPA on July 30, 2003."
ument exists to report the proceedings of the
Claims Tribunal. When a family's ability to
31 LLEH, Inc. v. Wichita County, Tex., 289
satisfy a legitimate judgment depends on the status
F.3d 358, 364 (5th Cir. 2002).
of a piece of property, and when that status
requires evidence to make a determination, it is
32 "The term `blocked asset' means (A) any as-
preferable for the government to include more than
set seized or frozen by the United States under
a declaration from one of its own employees.
section 5(b) of the Trading With the Enemy Act
(50 U.S.C. App. 5(b)) or under sections 202 and
30 "Having determined that Plaintiffs may not
203 of the International Emergency Economic
execute against the [Houston] property, the court
Powers Act (50 U.S.C. 1701; 1702)[.]" The Pres-
need not reach the issue of whether Plaintiffs have
ident froze Iranian property pursuant to the Inter-
relinquished their right to execute on the judgment
national Emergency Economic Powers Act. See
(continued...)
supra note 8.
9

Secondly, the property must be "used
substantial weight to the interpretation of a
exclusively for diplomatic or consular
treaty by the government agency charged
purposes." Id. Because we answer both
with interpreting it.
queries in the affirmative, the Houston
property does not qualify as a "blocked asset"
More v. Intelcom Support Servs., Inc., 960
for purposes of TRIA § 201(a).
F.2d 466, 472 (5th Cir. 1992).
A.
The United States, in its brief, "interprets
As to the first matter, a consul's residence
the reference to `property of the consular post'
falls within the sweep of the Vienna
in Article 27(1)(a) to include real property
Convention on Consular Relations ("VCCR"),
such as the Consul General's residence at issue
April 24, 1963, 21 U.S.T. 77, 596 U.N.T.S.
here." Although the government certainly
8638. The signatories to the VCCR pledge
could craft a self-serving or opportunistic in-
that, if one country severs consular relations
terpretation, the Hegnas have offered no evi-
with another, the severing countries will "re-
dence to suggest such a motivation and have
spect and protect the consular premises,
not given a citation to a case or to a
together with the property of the consular post
compelling opposing argument.
and the consular archives" of one another.
VCCR, art. 27(1)(a).
Consequently, the language of the VCCR
and the government's reasonable interpreation
The definition of "consular post" includes
of that language lead us to conclude that, un-
"any consulate-general, consulate, vice-consul-
der the VCCR, the United States has an
ate or consular agency." VCCR, art. 1(1)(a).
obligation to "respect and protect" property
A consulate typically includes a consul's
that served as the residence of the Iranian
residence, and no language in the treaty
General Consul. The Houston property is
deviates from this norm. BLACK'S LAW
within the ambit of the VCCR.34
DICTIONARY (8th ed. 2004) (defining
"consulate" as "the location of a consul's
B.
office or residence").
Although the government has rented the
Houston property to private parties and has
Additionally, the United States has
used some of those rental proceeds to satisfy
interpreted the VCCR so as to include the
domestically-created obligations, it has used
Houston property. Not surprisingly, this court
has not heretofore considered the VCCR.33
34
We note that the federal courts have long
The Hegnas also have asserted that the
been loathe [sic] to involve themselves in
VCCR does not apply, because TRIA applies
"Notwithstanding any other provision of law[.]"
matters of foreign policy, preferring to
TRIA § 201(a). The VCCR, however, does not
leave such issues to the Executive Branch.
conflict with the TRIA. Instead, TRIA (1) gives
Therefore, we have always given
parties who have secured judgments against ter-
rorist states a new opportunity to satisfy their judg-
ment; but also (2) attempts to insulate properties
33 The courts that have considered it largely
subject to international agreementsSSlike the
have done so in the context of criminal trials.
VCCRSSfrom liquidation procedures.
10

the consular residence "exclusively for
The rental, however, may generate additional
diplomatic or consular purposes." The Hegnas
revenue that, at Congressional direction, the
emphasize the fact of the rental and argue that
United States may allocate for other purposes.
the government has used the proceeds for a
The Hegnas have not shown evidence
nondiplomatic purpose. The magistrate judge
regarding the government's intent. Given such
described the two uses of the proceeds
a lack of evidence and the government's
generated from renting the former consulate
obligation to "respect and protect" the
home:
property pursuant to the VCCR, we are
reluctant to impute nondiplomatic motivations
The funds received from the rentals have
to the government's renting of the Houston
been deposited into segregated accounts,
property.
with the funds necessary for repairs and
maintenance placed in a special Iranian con-
Secondly, the Hegnas read "diplomatic pur-
sular account and the excess funds de-
pose" too narrowly. Although the United
posited into separate "blocked asset"
States allocates funds to satisfy VTVPA judg-
accounts. Funds in the blocked asset
ments, and although the payment regime aris-
accounts have recently been utilized to
es from a domestic payment arrangement,35 the
compensate victims of terrorism under the
issues certainly concern diplomatic matters.
VTVPA.
The United States purportedly has attempt-
Congress has directed the United States to
ed to fulfil the obligations of the VCCR. By
provide some of its rental proceeds to victims
not selling the Houston property and by using
of terrorism. As part of its payment-and-re-
rental proceeds to carry out routine
linquishment regime, the VTVPA designates
maintenance, the government "respect[s] and
"rental proceeds accrued on the date of the en-
protect[s]" the property presumably for the
actment of this Act from Iranian diplomatic
time when the two countries might resume
and consular property located in the United
States" as a primary source of funding.
VTVPA § 2002(b)(2)(A).
The mixed uses of the funds and the fact
that some funds have gone to satisfy a domes-
35 The entire exchange between Congress and
tically-crafted payment regime require us to
the Executive nicely illustrates the tensions that
consider whether the United States has used
may develop between governmental actors with dif-
the Houston property "exclusively" for
ferent institutional roles. Congress, through
diplomatic and consular purposes. Two
AEDPA and TRIA, has attempted to provide great-
factors ultimately weigh in favor of an
er opportunities for victims of terrorism to collect
on judgments against the states that sponsor and
affirmative answer.
support such actions. By exempting properties
subject to international tribunals and treaties such
First, purpose differs from effect or result.
as the VCCR, VTVPA and TRIA acknowledge the
The United States may rent the property for
Executive's general power to administer diplomatic
the purpose of using the funds to maintain and
affairs. U.S. CONST. art. II, § 2(2). The Executive
preserve the property pursuant to the VCCR.
has taken full advantage of the congressional
exception.
11

diplomatic and consular relations.36
the Hegnas cannot satisfy their otherwise
proper and valid judgment and cannot collect
The Executive Branch has simultaneously
against the property involved in this case. If
attempted to compensate parties harmed as a
some injustice exists, those two bodies have
result of Iran's support of terrorism and to ad-
the responsibility to correct it.
minister consular property in accord with the
VCCR. By maintaining the property, the
The judgments at issue are AFFIRMED.
United States has used the former General
Consul's residence within the terms of the
TRIA exclusion. Consequently, the district
court did not err in its determination that the
Houston property fell outside the definition of
a "blocked asset" and did not err in its grant of
the United States' motion.
V.
Consequently, the district courts did not err
by quashing the writs of attachment and
execution. By applying for a payment under
the VTVPA, the Hegnas agreed, on receipt of
a partial payment, to relinquish the right to
execute against Iranian property "at issue"
before bodies such as the Iran-United States
Claims Tribunal. The Lubbock property fits
that description. Additionally, although
Congress gave families of terror victims
greater rights to satisfy their judgments, it
expressly exempted consular property such as
that located in Houston.
Based on the regime that Congress has en-
acted and that the Executive has implemented,
36 If, in accordance with the Hegnas' theory,
the United States risks exposing consular property
to attachment and sale whenever it uses any rental
proceeds to pay a judgment pursuant to the
VTVPA, it may merely choose not to use any
rental proceeds to satisfy any judgments against
terrorist states. The government would still use the
property for a diplomatic or consular purpose, but
families seeking recovery under the VTVPA would
have fewer sources of proceeds with which to
satisfy their judgments.
12