    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                       JUSTICE AGAINST SPONSORS OF TERRORISM ACT

    =======================================================================

                                     HEARING

                                   BEFORE THE

                       SUBCOMMITTEE ON THE CONSTITUTION
                               AND CIVIL JUSTICE

                                     OF THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                   H.R. 2040

                                   __________

                                 JULY 14, 2016

                                   __________

                               Serial No. 114-87

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Available via the World Wide Web: http://judiciary.house.gov

                                    __________

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                           COMMITTEE ON THE JUDICIARY

                       BOB GOODLATTE, Virginia, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        JERROLD NADLER, New York
    LAMAR S. SMITH, Texas                ZOE LOFGREN, California
    STEVE CHABOT, Ohio                   SHEILA JACKSON LEE, Texas
    DARRELL E. ISSA, California          STEVE COHEN, Tennessee
    J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
    STEVE KING, Iowa                       Georgia
    TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
    LOUIE GOHMERT, Texas                 JUDY CHU, California
    JIM JORDAN, Ohio                     TED DEUTCH, Florida
    TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
    JASON CHAFFETZ, Utah                 KAREN BASS, California
    TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
    TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
    RAUL LABRADOR, Idaho                 HAKEEM JEFFRIES, New York
    BLAKE FARENTHOLD, Texas              DAVID N. CICILLINE, Rhode Island
    DOUG COLLINS, Georgia                SCOTT PETERS, California
    RON DeSANTIS, Florida
    MIMI WALTERS, California
    KEN BUCK, Colorado
    JOHN RATCLIFFE, Texas
    DAVE TROTT, Michigan
    MIKE BISHOP, Michigan

               Shelley Husband, Chief of Staff & General Counsel
            Perry Apelbaum, Minority Staff Director & Chief Counsel

                                    ------

               Subcommittee on the Constitution and Civil Justice

                        TRENT FRANKS, Arizona, Chairman

                      RON DeSANTIS, Florida, Vice-Chairman

    STEVE KING, Iowa                     STEVE COHEN, Tennessee
    LOUIE GOHMERT, Texas                 JERROLD NADLER, New York
    JIM JORDAN, Ohio                     TED DEUTCH, Florida

                         Paul B. Taylor, Chief Counsel

                        James J. Park, Minority Counsel

                                C O N T E N T S

                                  ----------

                                 JULY 14, 2016

                                                                       Page

                                    THE BILL

    H.R. 2040, the ``Justice Against Sponsors of Terrorism Act''.....     3

                               OPENING STATEMENTS

    The Honorable Trent Franks, a Representative in Congress from the
      State of Arizona, and Chairman, Subcommittee on the
      Constitution and Civil Justice.................................     1
    The Honorable Steve Cohen, a Representative in Congress from the
      State of Tennessee, and Ranking Member, Subcommittee on the
      Constitution and Civil Justice.................................    12
    The Honorable Bob Goodlatte, a Representative in Congress from
      the State of Virginia, and Chairman, Committee on the Judiciary    13
    The Honorable John Conyers, Jr., a Representative in Congress
      from the State of Michigan, and Ranking Member, Committee on
      the Judiciary..................................................    14

                                   WITNESSES

    Anne W. Patterson, Assistant Secretary of State for Near Eastern
      Affairs, U.S. Department of State
      Oral Testimony.................................................    16
      Prepared Statement.............................................    19
    The Honorable Brian Egan, Legal Adviser, U.S. Department of State
      Oral Testimony.................................................    23
      Prepared Statement.............................................    25
    The Honorable Michael B. Mukasey, Of Counsel, Debevoise &
      Plimpton LLP
      Oral Testimony.................................................    34
      Prepared Statement.............................................    37
    Richard D. Klingler, Partner, Sidley Austin LLP
      Oral Testimony.................................................    43
      Prepared Statement.............................................    45
    Paul B. Stephan, Professor of Law, University of Virginia Law
      School
      Oral Testimony.................................................    60
      Prepared Statement.............................................    62
    Jimmy Gurule, Professor of Law, Notre Dame Law School
      Oral Testimony.................................................    72
      Prepared Statement.............................................    75

                          JUSTICE AGAINST SPONSORS OF
                                 TERRORISM ACT

                                  ----------

                            THURSDAY, JULY 14, 2016

                            House of Representatives

                       Subcommittee on the Constitution
                               and Civil Justice

                           Committee on the Judiciary

                                Washington, DC.

        The Subcommittee met, pursuant to call, at 10 a.m., in room
    2237, Rayburn House Office Building, the Honorable Trent
    Franks, (Chairman of the Subcommittee) presiding.
        Present: Representatives Franks, DeSantis, Goodlatte,
    Jordan, Cohen, Conyers, Nadler, and Deutch.
        Staff Present: (Majority) Zachary Somers, Parliamentarian &
    Chief Counsel, Committee on the Judiciary; Tricia White, Clerk;
    (Minority) James Park, Chief Counsel; Susan Jensen, Senior
    Counsel; Matthew Morgan, Professional Staff Member; and
    Veronica Eligan, Professional Staff Member.
        Mr. Franks. The Subcommittee on the Constitution and Civil
    Justice will come to order, and without objection, the Chair is
    authorized to declare a recess of the Committee at any time.
    Welcome to all of you here. The subject of today's hearing is
    the Senate-passed version of the Justice Against Sponsors of
    Terrorism Act, or JASTA for short. Earlier this year, this
    legislation was unanimously reported out of the Senate
    Judiciary Committee, and in May, passed the Senate by a voice
    vote.
        However, despite the broad bipartisan support for this
    legislation in the Senate, the State Department has raised
    concerns with JASTA, and we have called this hearing to examine
    those concerns. JASTA essentially makes two changes to Federal
    law.
        First, it amends the Foreign Service Immunities Act to add
    the existing exceptions to the foreign sovereign immunity and
    exception for terrorist attacks that cause physical injury or
    death in the United States. Under current law, there appears to
    be some confusion or disagreement in the courts as the whether
    the Foreign Sovereign Immunity Acts tort exception waives the
    immunity of foreign governments that provide material support
    to foreign terrorist organizations that cause damage in the
    United States.
        JASTA makes clear that a foreign government that aids and
    abets a foreign terrorist organization in carrying out a
    terrorist attack on U.S. soil will not be immune from the
    jurisdiction of our court.
        Second, JASTA amends the Antiterrorism Act to clarify that
    those who aid, abet, or conspire with a foreign terrorist
    organization are subject to civil liability. There is currently
    a split in the Federal Courts of Appeal on the question of
    whether the Antiterrorism Act permits lawsuits based on aiding
    and abetting terrorists.
        JASTA provides that if a person aids and abets a State
    Department-designated foreign terrorist organization by
    knowingly providing that organization with substantial
    assistance, that person will be subjected to civil liability.
        By making these two changes to existing law, JASTA seeks to
    ensure that those, including foreign governments, who sponsor
    terrorist attacks on U.S. soil are held fully accountable for
    their actions. In addition, JASTA attempts to enhance the
    effectiveness of U.S. efforts at combatting terrorism and
    combatting terrorist financing by making those who provide
    financial support to foreign terrorist organizations liable for
    their conduct.
        JASTA would appear to be consistent with existing U.S.
    principles of foreign sovereign immunity, which permits
    lawsuits against foreign governments in U.S. court cases in the
    following instances--in which a foreign government has waived
    its immunity, that are based on a commercial activity carried
    out in the United States or which causes a direct effect in the
    United States, or in which the rights and property taken in
    violation of international laws are at issue, or in which money
    damages are sought against a foreign state for personal injury
    or death, or damage or loss of property occurring in the United
    States, and finally that are brought against designated state
    sponsors of terrorism.
        Despite the numerous, longstanding exceptions to foreign
    sovereign immunity already provided under U.S. law, the State
    Department and others have expressed concerns with JASTA and
    its potential ramifications on U.S. foreign policy. Out of
    respect for those concerns, we have invited the State
    Department here to testify before the Committee, and we have
    also invited a second panel of witnesses to appear and provide
    additional perspective on the issues the State Department has
    raised with JASTA.
        I look forward to the witnesses' testimony on this
    important subject, and I would now recognize the Ranking Member
    of the Subcommittee, Mr. Cohen, for his opening statement.
        [The bill, S. 2040, follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                           __________

        Mr. Cohen. Thank you, Mr. Chair. I welcome today's hearing
    on Senate Bill 2040, the ``Justice Against Sponsors of
    Terrorism Act.'' The specific text was passed by the Senate,
    unanimous consent, May 17, 2016, but it did not receive a
    hearing or other formal vetting, so it is good that in the
    House we have a hearing, which is somewhat unusual for us.
        S. 2040 would amend the Foreign Sovereign Immunities Act of
    1976 to allow suits against foreign states for physical entry
    resulting from the act of international terrorism in the United
    States, and a tortious act on the part of the foreign state or
    its official employee or agent acting within the scope of his
    or her employment, wherever that act occurs.
        The legislation also amends the Antiterrorism Act to
    explicitly provide for aiding and abetting liability. Finally,
    the bill contains a state provision allowing court to stay a
    case against a foreign state defender for up to 180 days; the
    possibility of an extension to go to a full year to allow the
    State Department to negotiate in good faith with the foreign
    state defendant to resolve the claims issued.
        We have two panels of distinguished witnesses before us
    today, two folks from, I believe, both the diplomatic corps and
    the Mr. Mukasey, an outstanding former United States attorney,
    and then a buddy of Bob Brady's, which is almost equally in
    dignity to being a great former U.S. attorney.
        And I hope that we can use this opportunity to learn about
    the bill to understand the detail of the arguments in its favor
    and the other potential conflicts. This is a difficult bill.
    You want to get justice for the victims of 9/11, but you also
    want to protect our national security.
        The legislation arises from the litigation against various
    defendants concerning 9/11. Legislation is drafted in general
    terms. We consider it in that light as both the supporters and
    opponents seem to agree.
        I am for access to justice and always have been, and it is
    my inclination to support such measures, and it is also my
    inclination to support, in any way I can, the victims of the
    dastardly deeds of 9/11. And it is particularly strong in that
    case, because that is something that we all experienced and
    should not get out of our psyches and our minds.
        The bill supporters argue that it is needed to update laws
    to address cases where foreign states facilitate terrorist
    strikes in the United States through financing and other kinds
    of material support for foreign terrorist organizations like
    Al-Qaeda. They also assert the bill would deter such conduct in
    the future, thereby enhancing counterterrorism efforts.
        They further contend that the Senate-passed language is
    narrow in scope, and the concerns about any reciprocal effects
    from enacting this legislation are exaggerated. The Obama
    administration, however, continues to raise concerns, even in
    the admitted form that we consider today, and I take that
    seriously as well.
        In addition to the reciprocity concern, the Administration
    contends enactment of Senate Bill 2040 could undermine
    counterterrorism efforts, raise serious foreign policy
    concerns, and lead to a reduction of foreign investment in the
    United States. Some opponents further argue that enacting this
    bill could subject U.S. allies to liability in the U.S. courts,
    including countries like Britain and Israel.
        Both sides have come forth with seemingly strong arguments,
    and while I appreciate the fact the Senate passed this language
    by voice vote, I think it is worth our while to have a
    discussion about the merits of S. 2040, and I thank the
    Chairman for having that hearing. I thank our witnesses for
    being here. I am looking forward to the testimony.
        Mr. Franks. And I thank the gentleman, and I would now
    yield to the Chairman of the Committee, Mr. Goodlatte, from
    Virginia.
        Mr. Goodlatte. Well, thank you, Mr. Chairman, and I want to
    begin by thanking Ambassador Patterson and Mr. Egan for
    appearing before the Committee today on behalf of the State
    Department. I know that the department has some foreign policy-
    related concerns with this legislation, and we wanted through
    this hearing to give the department the opportunity to express
    those concerns.
        The Justice Against Sponsors of Terrorism Act has been
    introduced over several successive congresses, and has twice
    unanimously passed the Senate. Over the years that this
    legislation has been considered, we have worked with its
    sponsors and the Senate Judiciary Committee to make the bill's
    language more precise in order to ensure that any unintended
    consequences are kept to a minimum.
        In particular, I have worked to make sure that JASTA's
    extension of secondary liability under the Antiterrorism Act
    closely tracks the common-law standard for aiding and abetting
    liability and is limited to State Department-designated foreign
    terrorist organizations.
        Aiding and abetting liability should only attach under the
    ATA to persons who have actual knowledge that they are directly
    providing substantial assistance to a designated foreign
    terrorist organization, in connection with the organization's
    commission of an act of international terrorism. JASTA, as
    revised in the Senate Judiciary Committee, ensures that aiding
    and abetting liability is limited in this manner.
        Beyond the Antiterrorism Act, JASTA amends the Foreign
    Sovereign Immunities Act in order to waive the sovereign
    immunity of any foreign government that sponsors an act of
    international terrorism that both causes physical injury in the
    United States, and occurs on U.S. soil.
        JASTA makes this change because under current law, a
    foreign Nation can provide financing and other substantial
    assistance to a terrorist organization that attacks our country
    and escape liability so long as all of the material support is
    provided overseas.
        For example, under current law, if a foreign state or any
    official or employee of that foreign state sets off a bomb on
    U.S. soil, injuring our citizens, the country would be liable
    under the Foreign Sovereign Immunities Act's tort exception.
    However, if we change the fact pattern slightly, so that rather
    than directly setting of the bomb, the foreign state instead
    gives a foreign terrorist organization the money it needs to
    attack the United States, the foreign state will not be subject
    to liability in U.S. courts.
        This is a troubling loophole in our antiterrorism laws.
    When Congress enacted the Foreign Sovereign Immunities Act in
    1976, it put in place a broad set of exceptions to sovereign
    immunity, including an exception for tort claims involving
    injuries occurring in the United States.
        However, the courts have not consistently interpreted those
    exceptions in such a manner that they cover the sponsoring of a
    terrorist attack on U.S. soil. JASTA attempts to address this
    inconsistency with a concrete rule.
        I am interested to hear, however, from the State Department
    as to why JASTA's amendments to the Foreign Sovereign
    Immunities Act present a threat to our relationships with
    countries that are important partners in combatting terrorism.
        Certainly, we do not want to make it more difficult for the
    State Department, the Department of Defense, and other agencies
    to combat global terrorism, but at the same time, we do not
    want to have laws in place that make it impossible for U.S.
    citizens who are victims of terrorist attacks on U.S. soil to
    seek judicial redress against those who seek to harm us. I look
    forward to our witnesses' testimony on this important subject,
    and yield back the balance of my time.
        Mr. Franks. And I thank the gentleman, and I would now
    yield to the Ranking Member of the Committee, Mr. Conyers from
    Michigan.
        Mr. Conyers. Thank, Mr. Chairman. Members of the Committee,
    without question, the victims of the September 11 terrorist
    attack deserve our sympathy and our help, and this Committee
    has worked to enact interlaw measures that attempt to provide
    some relief to these victims. As we consider S. 2040, the
    Justice Against Sponsors of Terrorism Act, we must keep in mind
    that this legislation is written in general terms, and we
    should consider its impact beyond one case, however compelling
    that case may be.
        Among other things, S. 2040 amends the Foreign Sovereign
    Immunities Act to create a new exception to the Act's general
    grant of foreign sovereign immunity. The exception would apply
    to claims arising from physical injury as a result of an act of
    international terrorism in the United States, as well as to a
    tortious act of a foreign state or its official, employee, or
    agent acting within his or her official capacity, regardless of
    where the tortious act took place.
        The House has not previously held a hearing on this
    proposal, and neither chamber has held a hearing on this
    particular version of the legislation, so I approach this
    measure with an open mind. That being said, there are three
    overarching points that should inform our discussion today.
        To begin with, the purpose of sovereign immunity is to
    ensure that disputes among Nations are ultimately resolved
    through diplomatic efforts rather than litigation. Customary
    international law provided absolute immunity for states in the
    courts of other states.
        Nevertheless, in the last century, many countries,
    including the United States, came to realize that it was unfair
    to provide immunity in cases where countries were engaged in
    non-sovereign activities, such as ordinary commerce.
        For this reason, countries began recognizing certain
    limited exceptions to sovereign immunity. The Foreign Sovereign
    Immunities Act codified the customary law of sovereign immunity
    recognized by our country at the time of the Act's enactment in
    1976, including certain exceptions to sovereign immunity.
        The Act also removed the need for, and the ability of the
    State Department, to make case-by-case determinations of
    whether a foreign state defendant was entitled to sovereign
    immunity and left such determination to courts as a matter of
    statutory interpretation, which in theory depoliticized such
    determinations.
        In light of this history, we should consider what impact
    changing the scope of exceptions to sovereign immunity may have
    on United States interests. The Administration, some allied
    Nations, and others have raised the concern that the enactment
    of S. 2040 may lead to retaliation by other countries against
    the United States, given the breadth of our interests and
    expansive reach of our global activities.
        For example, they contend a country like Afghanistan or
    Pakistan, under a future hostile regime, may enact legislation
    abrogating sovereign immunity to allow suits against the United
    States, against United States officials, or even our military
    personnel in response to drone strikes, or other activities in
    their countries.
        The bill's supporters, on the other hand, argue that the
    already-existing exceptions to sovereign immunity, including
    the current state-sponsored terrorism exception, and the prior
    understanding of the tort exception, that this bill purports to
    restore, have not resulted in any meaningful retaliation
    against the United States.
        So, finally, we should consider the impact this measure may
    have on our Nation's counterterrorism efforts. The bill's
    proponents argue that it will enhance such efforts by raising
    the prospect of depriving terrorists of resources, and
    deterring future terrorism financing.
        On the other hand, others say that it will hamper
    cooperation from other countries because they may become more
    reluctant to share sensitive intelligence in light of the
    greater risks that such information may be revealed in
    litigation.
        While this bill and the underlying litigation that spawned
    it arose from an emotionally searing event, I hope that we can
    be both respectful and clear-eyed as we consider the arguments
    to be presented by our distinguished witnesses. And so
    accordingly, I look forward to an engaging debate, and I thank
    our witnesses for being with us to share their thoughts on
    these important issues. I thank the Chair.
        Mr. Franks. And I thank the gentleman, and without
    objection, other Members' opening statements will be made a
    part of the record.
        So, let me now introduce our witnesses. We have two very
    distinguished panels today. I will begin by the first panel.
        Our first witness is Ambassador Anne Patterson, the
    Assistant Secretary of State for Near East Affairs. Ambassador
    Patterson has served as the U.S. ambassador to four countries,
    and in 2008 was promoted to the rank of career ambassador, the
    highest rank in foreign service. She has served as Assistant
    Secretary of State for International Narcotics and Law
    Enforcement Affairs, and has served as Deputy Permanent
    Representative at the U.S. mission to the United Nations.
        Our second witness is Brian Egan, the legal adviser to the
    State Department. Prior to being appointed as legal adviser,
    Mr. Egan served as legal adviser to the National Security
    Council, Deputy Assistant to the President, and Deputy Counsel
    to the President, and as Assistant General Counsel for
    Enforcement Intelligence at the Department of the Treasury.
        Each of the witnesses' written statements will be entered
    into the record in its entirety, and I would ask that each
    witness summarize his or her testimony in 5 minutes or less. To
    help you stay within the time, there is a timing light in front
    of you. The light will switch from green to yellow, indicating
    that you have 1 minute to conclude your testimony. When the
    light turns red, it indicates that the witness' 5 minutes have
    expired.
        So, before I recognize the witnesses, it is the tradition
    of the Subcommittee that they be sworn. So, if you would please
    stand and be sworn.
        Do you solemnly swear that the testimony that you are about
    to give will be the truth, the whole truth, and nothing but the
    truth, so help you God? You may be seated.
        Let the record reflect that the witnesses answered in the
    affirmative, and I welcome both of you. And I now recognize our
    first witness, Ambassador Patterson; and Ambassador, if you
    might turn that microphone on before speaking.

     TESTIMONY OF ANNE W. PATTERSON, ASSISTANT SECRETARY OF STATE
           FOR NEAR EASTERN AFFAIRS, U.S. DEPARTMENT OF STATE

        Ms. Patterson. Okay, thank you, Chairman Franks, Ranking
    Member Cohen, Members of the Subcommittee. Thank you for
    inviting us to appear before you today to discuss the Justice
    Against Sponsors of Terrorism Act. I welcome the opportunity to
    testify with my colleague, Brian Egan, the Department of
    State's legal adviser.
        I understand the motivation for this legislation, and all
    of us in the Administration deeply sympathize with the victims
    of terror and their families. I can personally attest that
    unprecedented resources have been dedicated to our national
    security to ensure that no other Americans will suffer the same
    fate as the victims of the September 11th attacks.
        From the successful efforts against Al-Qaeda leadership in
    the Pakistan-Afghanistan border, to the vast improvement in our
    intelligence about terrorist leaders, and to our successes in
    rooting out sources of funding for terrorism, we have worked
    every day to protect the homeland. We all know that the
    families of the 9/11 victims have suffered grievously, and
    nothing will ever be sufficient to alleviate their suffering.
    However, the 9/11 attacks were, and have continued to be the
    subject of intense and exhaustive investigation by U.S.
    government agencies and commissions.
        While these efforts will continue, I am here today to
    explain why the Administration believes that JASTA is not the
    right path forward. Most importantly, the passage of JASTA
    could undermine our critical fight against terrorism, and
    particularly against ISIL, by limiting our flexibility in
    operating overseas, and thereby threaten our national security
    interests.
        JASTA represents a sea change in longstanding principles,
    and would allow private litigations against foreign governments
    in U.S. courts, based on allegations that such countries'
    actions abroad made them responsible for terrorism-related
    injuries on U.S. soil. This legislation would allow suits
    against countries that have neither been designated by the
    executive branch as state sponsors of terrorism, nor taken
    direct action in the United States to carry out an attack here.
        JASTA would hinder our ability to protect our national
    security interests by damaging relationships with countries
    that are important, critical partners in combatting terrorism
    at a crucial time when we are trying to build coalitions, not
    create divisions. We cannot win the fight against ISIL without
    full international cooperation to deny ISIL safe haven, disrupt
    its finances, counter its violent messaging, and share
    intelligence on its activities.
        Numerous European and Middle Eastern governments have
    reached out to the department to express their concerns about
    this bill. The Dutch Parliament unanimously passed a motion on
    July 6th calling JASTA a breach of Dutch sovereignty that could
    expose the Netherlands to astronomically high damages via
    exposure to liability in U.S. courts.
        I have seen firsthand throughout my career that the United
    States benefits significantly from the protection afforded by
    foreign sovereign immunity given its extensive diplomatic
    security and assistance operations.
        We believe, just as importantly, that this legislation
    opens the U.S. to litigation abroad. As Members of this
    Committee know, some actions the United States takes overseas
    can be controversial, and if JASTA is enacted, it could erode
    our sovereign immunity protections abroad. Even if they are not
    eager to do so--and in many cases foreign governments are fully
    supportive of the counterterrorism steps the United States has
    taken--such governments will come under intense public pressure
    to create rights for their citizens to soothe the United
    States.
        As you know, the United States funds, trains, and equips
    numerous groups around the world. Exposing the United States to
    lawsuits in foreign courts could open the door to litigation
    seeking claims against the U.S. government and reduce our
    ability to work with groups that have been vital to achieving
    our national security objectives.
        U.S. counterterrorism strikes that have been a crucial and
    successful component of our counter-Al-Qaeda and counter-ISIL
    efforts do occasionally, tragically, and despite all
    safeguards, cause civilian casualties. If foreign courts were
    to take a similar approach in a country where such a strike
    took place, they might allow suits to be brought against the
    United States for such actions.
        Additionally, men and women working on such operations
    could face the risk of being brought to trial or compelled to
    provide evidence if they travel to the country where the
    operation occurred. We have deep concerns about exposing this
    broad range of U.S. national security-related conduct to
    scrutiny in foreign courts. These risks could ultimately have a
    chilling effect on our own counterterrorism efforts.
        Finally, I want to mention the possibility that JASTA may
    cause foreign governments to reconsider their investments here
    because they may have concerns that their money would be at
    risk of being attached in connection with a lawsuit. Before
    proceeding with this legislation, we believe there needs to be
    additional consideration of the potential unintended
    consequences of its enactment.
        We welcome opportunities to engage with the Subcommittee on
    that discussion. I also want to thank the Subcommittee for your
    ongoing support as we continue to advance our national security
    interests, and I look forward to answering your questions.
        [The prepared statement of Ms. Patterson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
                                   __________

        Mr. Franks. And I thank the gentlelady, and I will now
    recognize our second witness, Mr. Egan. Sir, if you will turn
    that microphone on before speaking, as well.

                TESTIMONY OF THE HONORABLE BRIAN EGAN,
                LEGAL ADVISER, U.S. DEPARTMENT OF STATE

        Mr. Egan. Thank you, Chairman Franks, Ranking Member Cohen,
    and Members of the Subcommittee. I also appreciate the
    opportunity to appear before you with my colleague, Assistant
    Secretary Anne Patterson, to discuss the Justice Against
    Sponsors of Terrorism Act.
        At the outset, I would like to express my deep sympathy for
    the families whose loved ones perished in the attacks on
    September 11th. I grew up in a community in New Jersey that was
    deeply affected by the World Trade Center attacks, and for much
    of my career in government at the Departments of State and
    Treasury, and at the National Security Council, I have worked
    on mechanisms that would enable our government to confront
    terrorism, including financial sanctions, and the use of
    military force where appropriate.
        I am going to focus my comments today on the importance of
    the concept of sovereign immunity to the United States, and our
    concern that passage of JASTA will lead to harmful,
    reciprocal--excuse me--legislation and lawsuits against the
    United States overseas.
        The principle of sovereign immunity, which restricts
    lawsuits against foreign governments, is well-accepted in
    international law, and was long recognized by U.S. courts as a
    matter of common law. The United States benefits greatly from
    the protection afforded by foreign sovereign immunity, and the
    Department of Justice regularly and vigorously defends our
    sovereign immunity overseas.
        Over the years, Congress and the executive branch have
    worked together to approach issues of foreign sovereign
    immunity and exceptions with great caution. The Foreign
    Sovereign Immunities Act, or FSIA, was enacted in 1976,
    following many years of study and consultation between Congress
    and the executive branch, academics, the American Bar
    Association, and private practitioners.
        The act focuses on the narrow instances in which a foreign
    state's immunity is denied. For example, a foreign state's
    commercial activities in the United States or having direct
    effects here.
        The narrow, noncommercial tort exception to immunity was
    aimed primarily at the problem of traffic accidents, and it
    provides jurisdiction for torts committed by foreign
    governments inside the United States that result in injuries
    here.
        Later enacted provisions relating to terrorism prudentially
    restrict the ability to sue foreign governments in U.S. courts
    for acts undertaken abroad to those states that have been
    designated by the executive branch as state sponsors of
    terrorism: currently Iran, Sudan, and Syria.
        JASTA would represent a significant departure from this
    carefully crafted framework. JASTA would strip any foreign
    government of its sovereign immunity, and expose the relevant
    country to lawsuits in U.S. courts based on allegations in the
    lawsuit that the country's actions abroad made it responsible
    for an attack on U.S. soil. As Ambassador Patterson noted, a
    number of U.S. partners and allies have raised concerns about
    the potential consequences of this change.
        The adoption of legislation like JASTA likely would have
    reciprocal consequences for the United States and increase our
    country's vulnerability to lawsuits overseas. Reciprocity plays
    a substantial role in foreign relations. JASTA could encourage
    foreign courts to exercise jurisdiction over the United States
    or U.S. officials for allegedly causing injuries overseas
    through groups we support as part of our counterterrorism
    efforts, circumstances in which we properly would consider
    ourselves to be immune.
        Notwithstanding the care with which the United States
    operates to ensure that its actions overseas are appropriately
    calibrated, exposing U.S. national security-related conduct and
    decision-making to scrutiny in foreign courts would present
    significant concerns. Such litigation would have the potential
    for intrusive requests for sensitive U.S. documents and
    witnesses that we would not be willing to provide. There is a
    risk of sizeable monetary damages awards in such cases, which
    could then lead to efforts to attach U.S. government property
    in far-flung places.
        Given the broad range of U.S. activities and presence
    around the world, the United States is a much larger target for
    such litigation than any other country. We stand ready to work
    with this Subcommittee and other Members of Congress to
    consider these important issues further, and I look forward to
    taking your questions. Thank you.
        [The prepared statement of Mr. Egan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                   __________

        Mr. Franks. Well, I thank you both for your testimony. We
    will now proceed under the 5 minute rule with questions, and I
    will begin by recognizing myself for 5 minutes.
        Ambassador, I will begin with you. In my opening statement,
    I mentioned several of the nine exceptions to foreign sovereign
    immunity that are provided for in the Foreign Sovereign
    Immunities Act, including the exception for lawsuits against a
    foreign state for personal injury or death occurring in the
    United States. From a foreign policy perspective, what is the
    difference between the already existing exceptions, especially
    the tort exception, and the new exceptions proposed by JASTA?
        And Mr. Egan, if you will prepare, I would like to ask you
    the same question afterwards. Ambassador? You are going to
    defer to him? All right.
        Mr. Egan. Mr. Chairman, thanks for that question. I think
    that the primary difference between the existing exception that
    you referenced and the change that JASTA would make would be
    twofold. One would be under the tort exception now. The
    activity that caused the tort in the United States would have
    to take place within the United States itself.
        And as I mentioned in my testimony, I think this exception
    was originally created by Congress to address torts that occur,
    such as traffic accidents, here in the United States.
        The change here would be subjecting decisions that may take
    place overseas and actions overseas in a way that they are not
    currently covered by current law, and that is the nature--the
    focus of our concern is on that change.
        Mr. Franks. Well, let me just follow up on that. I would
    like to ask you a question that was posed to me by the family
    of a victim of the September 11th terrorist attack. And
    essentially if a foreign state, such as Saudi Arabia, knowingly
    plays a substantial role in a terrorist attack on U.S. soil, do
    the victims of such an attack not deserve to be able to bring a
    lawsuit against that foreign state in U.S. courts?
        I mean, why would the victims of a terrorist attack on U.S.
    soil be given less access to justice for their claims than is
    granted, for example--under the example that you used, sir, to
    the victims of a car wreck caused by a foreign government, for
    which the foreign state may be held accountable under the
    FSIA's tort exception?
        Mr. Egan. Mr. Chairman, first of all, I do not pretend to
    stand in the shoes of the 9/11 families, and I understand the
    need to do everything we can for those families. I think our
    concern is really the breadth that this expansion of the
    exception could cause. By subjecting decision making and other
    operations overseas to our courts, we would be inviting other
    countries to do the same. We know that other countries follow
    what we do under the FSIA and with respect to sovereign
    immunity with great interest, and our concern is that that sort
    of change could lead to reciprocal actions that would affect
    our own operations and decision making.
        Mr. Franks. Reciprocal actions are your primary fear?
        Mr. Egan. I will let Ambassador Patterson speak to the
    foreign policy and national security concerns we have from our
    partners. And I am happy to say more about the reciprocal
    concerns that we have.
        Ms. Patterson. Mr. Chairman, in the case of Saudi Arabia,
    let me say that neither the 9/11 Commission nor the review that
    was undertaken of the 9/11 Commission in 2015 found any link
    between the 9/11 attack and the government of Saudi Arabia.
        But if such a link should, of course, arise at any point--
    and again I stress that there is absolutely no evidence there
    was such a link--the U.S. government would pursue that
    vigorously through all kinds of methods--law enforcement,
    intelligence, seizure of assets. I believe there is sort of the
    undercurrent here that we do not have tools existing to go
    after these cases.
        And over the past 15 years, we have employed a very broad
    range and aggressive range of tools to go after these 9/11
    perpetrators and to change the international system that allows
    terrorist financing to prosper. So, I think the presumption is
    mistaken, but I also think if that were proven to be true, we
    would do everything in our power to seek redress.
        Mr. Franks. And do you have any examples of going after a
    sovereign Nation that supported terrorism on a civil action in
    the U.S. courts?
        Mr. Egan. So, Mr. Chairman, as you know, under the existing
    terrorism exception, cases are allowed against countries that
    are designated as state sponsors of terrorism, and that
    exception has been used. Our view is that that is a prudential
    approach to this very difficult program.
        Mr. Franks. Let me just expand on that. Why would the law
    treat such an act of terrorism that kills people on U.S. soil
    differently depending on whether the substantial assistance was
    provided by a designated state sponsor of terrorism or a Nation
    that is not so designated?
        Mr. Egan. The existing exception was crafted between
    Congress and the executive branch to allow for a decision and
    evidence to be looked at by the executive branch as to whether
    the relevant government has repeatedly provided support for
    acts of international terrorism. We think that is an important
    check on the process, and it is one that would change with this
    law.
        Mr. Franks. All right, I now recognize the Ranking Member
    for his 5 minutes for questioning.
        Mr. Cohen. Thank you. Mr. Egan, Saudi Arabia is not on the
    list, right?
        Mr. Egan. That is correct, sir.
        Mr. Cohen. And if change this law, and they are subject to
    liability, might we find out that they should have been on the
    list? I mean, it is just asking a question, you know. And my
    colleagues on the Republican side, they had some law this year
    that said that if you have gone to certain countries and you
    come here, you cannot do it unless you go through all this kind
    of security checks because it is such a danger, and they did
    not put Saudi Arabia on that list either.
        Ms. Patterson. Mr.----
        Mr. Cohen. Sure, anybody can answer it.
        Ms. Patterson. Mr. Cohen, again, I would stress that there
    is absolutely no evidence that the Saudis have been involved in
    the 9/11 attacks, and we have a very close----
        Mr. Cohen. But if they are not, are they not going to win
    the lawsuit?
        Ms. Patterson. The lawsuit----
        Mr. Cohen. Ms. Patterson, go ahead.
        Ms. Patterson. So, I think our concerns about this
    legislation are broad, and that this is--first of all, Saudi
    Arabia and many other countries in the Middle East are very
    important partners in our fight against terrorism----
        Mr. Cohen. I am going to interrupt you for a second because
    they are as threatened, if not more threatened, by ISIL as we
    are. They are right there with them. They have been knocking
    off Saudis, and they have got no love for them either. Are you
    submitting that if we pass this that the Saudis are going to
    stop fighting ISIL and stop working with us? I think they have
    got an interest in fighting ISIL, too, do they not?
        Ms. Patterson. Absolutely.
        Mr. Cohen. So if they absolutely had this right, but they
    are going to--it is going to harm our abilities to fight ISIL,
    then it is just not such a good partner we got.
        Ms. Patterson. Mr. Cohen, the Saudis, over the past 15
    years, have instituted a very broad range of steps that have
    cut off financing for terrorists, and I could outline those
    here. They have cooperated with us very extensively on
    intelligence exchanges and intelligence tips that have
    protected American citizens, and again, they are on the
    forefront of this fight against terrorism, as you mentioned.
    They are a very important partner in our fight against
    terrorism.
        Mr. Cohen. What leads you to believe that they would not
    be? It's in their self-interest to be. They do everything for
    their self-interest, including selling us oil, which we have
    been slaves to, and that is why they are not on the list.
        Ms. Patterson. Sir, I would take issue with that. They are
    not on the list, because they are not a state sponsor of
    terrorism, and the process of designating state sponsors of
    terrorism is an exhaustive and analytical one. There is a very
    significant difference between Saudi Arabia and the countries
    that are on the list of state sponsors of terrorism.
        Mr. Cohen. Okay, I agree with you on that. Cuba is on the
    list, did they not?
        Ms. Patterson. No longer.
        Mr. Cohen. They just came off, right? And they were a real
    threat to us. Great list. And I understand the difference, but
    at the same time we did pass this bill on the folks that wanted
    to come here to visit, and the Saudis were not on it, and the
    only folks that we know that we came here from a foreign
    country that did us some damage, who we should have kept out,
    were from there. And you may totally be right, and I do not
    know.
        I am not going to comment on the 28 pages, and that might
    influence people pro, con, I do not know what. Who knows? But
    the lawsuit is only going to bring that information, and it is
    real limited, is it not?
        Ms. Patterson. Sir, I think the 28 pages will be very
    shortly released, and Members of this Committee and members of
    the public can judge for themselves. But it is not just Saudis
    who have come to this state to commit terrorist attacks.
        When I was ambassador to Pakistan, we had two very dramatic
    events. One, the so-called Times Square bomber, who was a
    Pakistani, and an Afghan in Colorado who was going to bomb the
    New York subway station. And in both cases, the cooperation of
    foreign intelligence agencies was absolutely vital in running
    down and analyzing and preventing these attacks. So, yes, we
    have certainly the terrorist threat, but it is much broader
    than Saudi Arabia.
        Mr. Cohen. Let me ask you one other question. You talked
    about litigation abroad that we could be subject to. Basically,
    is that State Department talk for drones?
        Ms. Patterson. It is not just drones, sir.
        Mr. Cohen. What else do we do that we could be sued?
        Ms. Patterson. Okay, then let me outline, then, if I could.
    It is drones. Certainly, it is drones. It is some of these
    organizations, these law enforcement and intelligence and
    military organizations that we support, but it is also the
    fact--when I was in Egypt in 2011, International Republican
    Institute and National Democratic Institute were prosecuted in
    Egyptian courts on criminal charges.
        It is also because we do not trust, in many cases, the
    legal systems and the prosecutors and the kangaroo courts in
    these other countries, and we could easily have a lawsuit
    brought about by corrupt or intimidated judges or by the public
    that could prejudice U.S. interests. It is not just people that
    get killed. It is a whole range of other activities that we
    engage in.
        Mr. Cohen. My time has expired, and I yield back the
    balance of it.
        Mr. Franks. And I thank the gentleman. It is interesting to
    note that only after we had moved to normalize relations with
    Cuba did we take them off the terrorist list. I now recognize
    the Ranking Member of the Committee, Mr. Conyers, for 5
    minutes.
        Mr. Conyers. Thank you, Mr. Chairman, and I thank the
    witnesses. Let me begin with the ambassador and the--I wanted
    to ask about--Egan first--all right, I will start with Mr. Egan
    first. Sir, the bill's supporters assert about reciprocal
    behavior by other countries and subjecting our countries to
    suits are overblown, especially given that existing exceptions
    under FSIA have been in place 40 years without any meaningful
    retaliation, or a flood of litigation against the United
    States. How do you feel about that?
        Mr. Egan. Congressman Conyers, I think we actually have
    seen some litigation in response to the terrorism exception,
    for example, where we are faced with default judgement from
    Iranian and Cuban courts in the billions of dollars in
    retaliatory action that they took in the 1990's and 2000's in
    response to our creating the terrorism exception.
        We do face litigation overseas in the context of contracts
    and other activities that we would say foreign governments here
    are not immune from, and we vigorously defend ourselves in that
    litigation. The change here would be something that would be an
    additional exception that is not recognized by others in the
    world at this point, and that is why we are----
        Mr. Conyers. What impact has that had on us? Has it been
    minimal?
        Mr. Egan. I am sorry, sir. The litigation that we are
    currently facing?
        Mr. Conyers. The foreign judgments.
        Mr. Egan. So, for example, with respect to Iran and Cuba,
    in trying to resolve claims with those countries, including our
    own claims, these judgements are put forward by those countries
    as things that we must resolve before they will consider
    resolving our claims.
        Of course, we believe very strongly that our claims have
    merit. Theirs do not, but they definitely become impediments in
    moving forward, including in collecting compensation for our
    property and other claims.
        Mr. Conyers. Ambassador Patterson, the bill supporters
    argue that if we enact this measure, it could help
    counterterrorism activities because it would help to deter
    future financing and other material support for terrorist
    attacks in the United States, and through enhanced public
    scrutiny of these countries that potentially may support
    terrorism. Do you think that that is a logical----
        Ms. Patterson. I do not agree with that, Mr. Conyers,
    because I think what this would do--that suggests that the
    sources of these terrorist acts are countries like ours, where
    public transparency might have an impact, and I can assure you
    in many of the countries that I have served, that would not be
    an issue.
        What I think it will do is limit our own freedom of action
    overseas as lawsuits proliferate in places like Pakistan and
    Egypt and other countries in the Middle East. So, I think it
    would reduce cooperation among countries, particularly in the
    Middle East, but also in South Asia, that work with us closely
    on counterterrorism activities.
        Mr. Conyers. Well, Madam Ambassador, what Nations might be
    concerned about exposure to possible litigation in American
    courts if this legislation were to become law?
        Ms. Patterson. I think in American courts, I think there
    are a number of countries quite apart from Saudi Arabia that
    would be concerned about exposure in U.S. courts, and I think
    it would not only be related to the 9/11 attack. As I
    mentioned, we had potential terrorist attacks from Pakistan. We
    had potential terrorist attacks from Afghanistan. They could
    also be subject to this. We think the reach of this legislation
    is quite broad.
        Mr. Conyers. Thank you, Mr. Chairman.
        Mr. Franks. And I thank the gentleman, and I now recognize
    Mr. Nadler for 5 minutes for questioning.
        Mr. Nadler. Thank you, Mr. Chairman, for holding this
    hearing today. I have a number of questions, but I want to note
    that I am proud to be the lead Democratic sponsor of this bill,
    alongside Mr. King of New York. I represent Lower Manhattan,
    where thousands of Americans were brutally murdered in the
    September 11th, 2001, terrorist attacks. JASTA would help
    ensure that those responsible for aiding and abetting these
    attacks are held accountable for their actions.
        Unfortunately, because of certain court decisions that
    misinterpreted the Foreign Sovereignty Immunities Act and the
    Antiterrorism Act, 9/11 victims and their families have been
    unable to pursue their claims in court against some of the
    parties they believe were responsible for funding the attacks.
        JASTA simply reinstates what was understood to be the law
    for 30 years--that foreign states may be brought to justice for
    aiding and abetting acts of international terrorism that occur
    on American soil, whether or not the conduct that facilitated
    the attack was conducted in the United States.
        Let me be clear--this bill does not prejudge the merits of
    any particular case. It simply ensures that the 9/11 families,
    or anyone else who may be similarly situated can plead their
    case in court.
        We have various objection to this, and we will hear various
    objections to this legislation today, primarily centered around
    the fear that other Nations may pass reciprocal legislation in
    retaliation, which would subject Americans or the United States
    itself to liability in those countries.
        I find this argument unpersuasive. Unless the United States
    engages in international terrorist activity, which is carefully
    defined in law, it would face no legal jeopardy if another
    country passed an identical law. And given that no countries
    have retaliated in the 40 years since the Foreign Sovereignty
    Immunities Act, and it's well established tort exception was
    enacted into law, it is hard to understand why this very narrow
    classification should now raise alarms.
        To the extent that one particular country may fear being
    held to account for its actions and might be threatening
    retaliation of some sort, there is no--that is no reason to
    deny justice to the victims of 9/11 and their families.
        The Foreign Sovereignty Immunities Act was intended in part
    to ensure that the President would not be put in the position
    of determining which claims could be heard, and which would be
    protected by sovereign immunity. Although JASTA enables the
    executive to stay court proceedings if it is engaging in good-
    faith diplomatic negotiations to resolve a claim, it places the
    final determination of legal claims in the courts, where it
    belongs.
        JASTA is a narrow bill that has been carefully negotiated
    over the last 6 years and which passed the Senate unanimously
    for the second time in May. It deserves swift passage in the
    House of Representatives, as well, and I appreciate your
    holding this hearing today so that we can begin this process.
        Now, Ambassador Egan--Mr. Egan, rather--I am sorry--as I
    understood your argument, if a foreign government writes a
    million-dollar check to Al-Qaeda in a cafe in New York to fund
    a terrorist attack in the United States, the existing tort
    exception to the Foreign Sovereign Immunities Act provides
    jurisdiction to sue that government in a U.S. court.
        But if that same government agent wrote the same million-
    dollar check in a cafe in Geneva, his government should be
    immune from liability for causing the very same terrorist
    attack. What is the rationale for that argument?
        Mr. Egan. Thank you, Congressman. I think if we were to
    look back at the enactment of the tort exception that you
    referenced, I think that the legislative history shows that the
    focus and the driving force behind that exception was to allow
    for lawsuits against foreign governments in New York and in
    Washington, D.C., primarily, for activities that they took--
    that they undertook here in the United States.
        Mr. Nadler. Right, but if a government--a foreign
    government--conspires with some international terrorist
    organization to conduct an attack in the United States, and
    writes the check to finance that activity in a cafe in New
    York, why should it be a different situation than if the same
    government conspires with the same international terrorist
    organization for the same attack but writes the check in London
    or Geneva? What is the difference?
        Mr. Egan. I think under that hypothetical, sir, if a
    foreign government were to take that clear of an action, I
    think we would have very clear grounds to designate them as
    state sponsors of terrorism, and they would be subjected to
    liability under that framework.
        Mr. Nadler. If they were designated after the fact?
        Mr. Egan. Yes, if the reason for their designation was the
    act that is taking place in your hypothetical it would be
    liability.
        Mr. Nadler. But what you are really saying is if they wrote
    the check in New York, they would be subject to legal action,
    and a court would determine the facts.
        If they wrote the check in Geneva to finance the terrorist
    attack in New York, it would be up to the executive branch to
    make a political determination whether we wanted to designate
    them as a state sponsor of terrorism, which may be, A, fact-
    based, but B, politically determined, rather than leaving it--
    rather than having the court have jurisdiction to make the same
    determination, that it would, if the check was written in New
    York. What is the justification for that, and why should we
    stand for such a distinction?
        Mr. Egan. I think when the terrorism exception was passed
    in 1996, Congressman, it was passed because I think there was a
    recognition that national security and foreign policy decision-
    making must be worked into a process like this.
        Mr. Nadler. Yes, but foreign policy decision-making
    presumably has the same considerations whether the foreign
    government wrote the check in New York or wrote the check in
    Geneva. Why the distinction that one has executive
    determination with possibly political and foreign policy
    considerations and the other is up to a court?
        Mr. Egan. I think that the state sponsor process, which is
    a fact-driven, intelligence-driven process----
        Mr. Nadler. And politically driven.
        Mr. Egan [continuing]. Was seen as one that was the
    appropriate check that would allow for executive branch input
    into the process.
        Mr. Nadler. Well, and the question is why there should be
    executive branch into the process depending on where the check
    was written for the same act, the same actors, et cetera. And
    my time has expired, unfortunately, because I have a number of
    other questions, but I will simply reserve that I do not think
    that that distinction makes much sense.
        Mr. Nadler. I yield back.
        Mr. Franks. I thank the gentleman, and I would also now
    like to thank Ambassador Patterson and Mr. Egan for their time
    and expertise. Thank you for coming, and I would like now to
    invite the members of our second panel of witnesses to come
    forward. While you are being seated, I will go ahead and
    introduce our witnesses.
        Our first witness on this panel will be Michael Mukasey.
    From 2007 until 2009, Judge Mukasey served as the Attorney
    General of the United States, and from 1988 to 2006, he served
    as district judge in the United States District Court for the
    Southern District of New York, becoming Chief Judge in the year
    2000.
        Our next witness is Richard Klingler, a partner at Sidley
    Austin. Mr. Klingler has served as the general counsel and
    legal advisor on the National Security Council, and a special
    assistant and Senior Associate Council to the president.
        Our third witness is Paul Stephan, the Jeffries
    distinguished professor of law at the University of Virginia
    Law School. Professor Stephan has served as counselor on
    international law, and at the U.S. Department of State, and as
    a law clerk to U.S. Supreme Court Justice Louis Powell.
        Our final witness is Jimmy Gurule, a professor of law at
    Norte Dame Law School. Professor Gurule has served as the
    undersecretary for Enforcement at the Department of Treasury,
    and assistant attorney general for the Office of Justice
    Programs at the Justice Department. Thank you all for being
    here.
        Each of the witnesses' written statements will be entered
    into the record in its entirety. And I would now ask that each
    witness summarize his or her testimony in 5 minutes or less,
    and to help you stay within that time, there is a timing light
    in front of you. The light switch will switch from green to
    yellow, indicating that you have 1 minute to conclude your
    testimony.
        When the light turns red, it indicates that the witness' 5
    minutes have expired. And before I recognize the witnesses, it
    is the tradition of the Subcommittee that they be sworn, so if
    you will please stand to be sworn.
        Do you solemnly swear that the testimony that you are about
    to give will be the truth, the whole truth, and nothing but the
    truth, so help you God? Thank you, you may be seated. Let the
    record reflect that the witnesses answered in the affirmative.
        And I will now recognize our first witness, Mr. Mukasey.
    Mr. Mukasey, welcome back, sir. And if you will please turn
    that microphone on before you speak.

            TESTIMONY OF THE HONORABLE MICHAEL B. MUKASEY,
                  OF COUNSEL, DEBEVOISE & PLIMPTON LLP

        Mr. Mukasey. Thank you, Mr. Chairman, and thanks to the
    ranking number, and thanks in particular to the Committee for
    having this hearing. I do not want to simply run through the
    statement that I submitted to the Committee; it is in the
    record.
        I am particularly pleased to see that the Committee is
    holding this hearing because, you know, the founders thought
    that the Senate would be the saucer in which the passions that
    might be unleashed in the House would be cooled. This bill, as
    was pointed out earlier, went through the Senate by a voice
    vote with no hearing. So, it is a pleasure to see the House
    serving as the saucer that the founders thought the Senate
    would be.
        There are two principal problems with this bill: one is
    reciprocity and the other is futility. Reciprocity, I think,
    has been an alluded to. It is not that it would open U.S.
    courts--that is, it would open liability of foreign governments
    in U.S. courts--it is that it would open U.S. personal overseas
    to retaliation overseas. We are the most present country in the
    world. We are in more places with more people than anybody else
    in the world; we are the only superpower in the world right
    now. We want to stay that way.
        I think that passing a bill like this which chips away at
    the concept of sovereign immunity can only hurt us; because we
    are the most present country in the world, it cannot help us.
    And there are not only hostile countries, but friendly
    countries, where there are people who would like to see us held
    to account for things that they think we ought to be held to
    account for.
        The former Secretary of Defense, Donald Rumsfeld, was
    threatened with prosecution in Belgium of all places, until it
    was pointed out that we could pull are NATO headquarters out of
    Brussels, and they came to their senses. There have been
    prosecutions of our armed forces in Italy; there are threats to
    do, as it was pointed out by the State Department, some of our
    people in Egypt were prosecuted in those courts.
        And the courts in foreign countries, where people have an
    interest in doing this, are much less controlled, and much less
    fair than our own courts. And there is no indication
    necessarily that this would be limited to court proceedings,
    that they would pass an identical statute. They are going to
    use this as an excuse to chip away at sovereign immunity.
        From what I can think of, there are only really two
    countries--three countries that have anything terrible to lose
    here. One is the United States, the other is the U.K., and the
    third is Israel. And those three countries have the most to
    lose from chipping away at that content.
        As to futility, I cannot do really any better than Judge
    Royce Lamberth of the D.C. District Court in a case called in
    Iranian terrorism cases, in which he called those cases against
    Iran, which is already on the foreign terrorist sponsor list,
    unsustainable, because in essence, sovereign assets are not
    subjected to attachment; and what you create is essentially a
    bridge to nowhere.
        This is not going to help the people it is intended to
    help. The only people I think it can help are trial lawyers.
    And I do not see passing a bill in aid of that.
        I would also like to respond to a couple of questions that
    were raised in the course of the questioning before. One
    actually was in the initial comments of Chairman Goodlatte who
    said that, you know, if a foreign government gives a bomb to a
    terrorist organization, and they drop it, here, why should they
    not be subject to suit here? That is an act of war under any
    standard of international law. And when FDR went in front of
    Congress on December 8, 1941, he did not ask Congress to strip
    the sovereign immunity of Japan, and open it up to lawsuits for
    what they did at Pearl Harbor; he asked for a declaration of
    war.
        There are obviously steps short of war that we can take,
    and those were outlined by the State Department. But that is
    the way we respond to conduct like that. As to the question of
    why it is that courts should not respond, I think Judge Lambert
    said specifically that courts are not suited to respond to
    this, and the Constitution says why courts should not respond.
        The Constitution places in the hands of the executive the
    exclusive right to conduct foreign relations. It does not give
    it to Article III courts. And having been in an Article III
    court, I know that Article III courts take on a lot of
    reasonabilities, but I do not think that ought to be one. Thank
    you.
        [The prepared statement of Mr. Mukasey follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
                                   __________

        Mr. Franks. Thank you, Judge Mukasey, and I would now
    recognize our second witness, Mr. Klingler. And, sir, if you
    would turn that microphone on.

              TESTIMONY OF RICHARD D. KLINGLER, PARTNER,
                           SIDLEY AUSTIN LLP

        Mr. Klingler. Thank you, Chairman, Ranking Member Cohen for
    this opportunity to appear before you. My legal practice and
    service in government have focused on counterterrorism and
    related constitutional and statutory issues.
        Although I represent certain victims of the September 11th
    attacks, in ongoing litigations that JASTA would assist, my
    comments address the broader benefits and operation of this
    important legislation, as elaborated in my written submission.
    JASTA modernizes the FSIA's treatment of claims directed
    against state-facilitated terrorism striking the United States.
        As we painfully learned, terrorist attacks here are often
    the tragic conclusion of a course of conduct that originates
    abroad. Officials and agents of various foreign states in the
    Middle East, South and Central Asia and elsewhere, have various
    dealings with terrorist organizations, with international
    capabilities, and deeply-held hostility to Americans.
        Courts have addressed state-facilitated terrorism under the
    FSIA for decades, but risks of adverse state action are
    increasing. At the same time, our Nation's capabilities to
    address these risks through civil litigation have proven
    inadequate. The principal statute designed to deter and remedy
    acts of terrorism, the ATA, generally does not apply to foreign
    states.
        Two FSIA provisions already permit certain terrorism-
    related claims against foreign states, but one depends on the
    rarely used power to designate foreign states sponsors of
    terrorism, and the other, the tort exception, is not designed
    for terrorism in particular, and has at times has been applied
    narrowly.
        JASTA enhances the ability of U.S. courts to address acts
    of terrorism, but only narrowly expands existing exceptions to
    foreign sovereign immunity. It slightly adjusts the tort
    exception, which has long supported claims against state-
    sponsored terrorism.
        JASTA supports only claims that concern a state facilitated
    attack on U.S. soil. Any sovereign has the ability and
    obligation to remedy such injuries; as the Supreme Court cases
    made clear, Congress is the appropriate body to discharge that
    obligation, by enabling legal claims.
        Expanding the scope of civil litigation can ensure justice
    for victims, deter and redress specific attacks and enhance our
    Nation's counterterrorism efforts. The prospect of litigation
    can prompt sovereigns to disentangle their operations from
    terrorist networks, or to provide justice to victims. Judicial
    processes, or state-to-state negotiated settlements, can
    provide a reckoning with history, demonstrate current
    commitment to right conduct, and enhance relationships with the
    U.S. government and financial community.
        JASTA also claims the FSIA's strategy of depoliticizing
    immunity determination by transferring responsibility from the
    executive to the judiciary, but it maintains important roles
    for the executive. JASTA does not disturb the president's
    exclusive role to determine which foreign states maybe subject
    to sue for claims of injury abroad.
        For terrorist attacks here, JASTA draws upon a different
    presidential power, to suspend claims to effectuate state-to-
    state agreements that would provide comparable redress. For
    claims under Section 1605(b), the executive can limit suits
    against foreign sovereigns, but must do so while also fostering
    the interest of the victims. Nor does the possibility that
    foreign states might mirror JASTA's jurisdiction pose risk to
    U.S. activities.
        JASTA narrowly focuses on state-facilitated acts of
    international terrorism, based on a narrow, established
    definition. Its exception does not extend to self-defense and
    like actions, and does not concern claims against individuals.
        If the concern is instead that foreign states will use
    JASTA simply as an excuse to implement broader exceptions to
    immunity, that has little to do with JASTA. Any state seeking
    to do so could point to the FSIA's existing tort exception, and
    its provisions related to state-sponsored terrorism.
        As the Supreme Court Salman Khan decision confirms, the
    FSIA and JASTA's amendments, therefore, have nothing to do with
    claims against individual officials, and provide no basis for
    foreign states to expand claims against American officials. The
    scope of sovereignty administered by the executive is unchanged
    with respect to those individuals.
        But the relative exception to sovereignty related to claims
    against foreign states was created in 1976, and expanded in the
    1980's and 1990's. JASTA is no sea change. Its opponent's real
    quarrel is with Congress' earlier policy judgements, which have
    produced no dire consequences over decades.
        Instead, considerations of military, political and economic
    power, and our diplomacy, have determined, and will continue to
    determine, whether foreign Nations foster legal claims against
    the United States, just as they do for other potential foreign
    state actions adverse to our interests. JASTA would not change
    that calculus.
        It does, though, empower and encourage our diplomats to use
    those traditional tools more effectively, to include the
    interests of victims of terrorism among our highest foreign
    policy objectives.
        And if I might add just a quick observation about the State
    Department presentations we just heard--you know, they failed
    to acknowledge how existing FSIA provisions could be used as
    the pretext for expanded foreign state jurisdiction that the
    State Department fears. They failed to point to any adverse
    consequences arisen from decades of cases applying 1605, 85 and
    Section 1605A, to foreign states for facilitating terror, other
    than the Cuban and Iranian judgments, which frankly are a
    political issue, and would be dealt with on a political basis
    just as any others would.
        The Department failed to note that the Administration's own
    prominent exaggerations of the changes reflected in JASTA have
    contributed to certain confusion and discomfort on the issue
    abroad.
        And it failed to address, altogether, the Department's role
    in fostering state-to-state settlements and securing
    accountability for wrongful foreign state actions directed at
    U.S. citizens.
        All these characteristics of the Department's response
    indicate why JASTA is needed, rather than why it is not, and
    explains why the Senate unanimously rejected the
    Administration's arguments. So JASTA confirms Congresses'
    initial policy judgments reflecting the FFSI, and generally
    seeks to ensure the Department will place a much higher
    priority on terrorism. Thank you.
        [The prepared statement of Mr. Klingler follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                   __________

        Mr. Franks. I thank you gentlemen. And I would now
    recognize our third witness, Mr. Stephan. And, Mr. Stephan, if
    you would please turn that microphone on.

     TESTIMONY OF PAUL B. STEPHAN, PROFESSOR OF LAW, UNIVERSITY OF
                          VIRGINIA LAW SCHOOL

        Mr. Stephan. Thank you, Mr. Chairman Franks, Ranking Member
    Mr. Cohen, and other Members of the Committee; I am very
    grateful for the opportunity to testify here. I have devoted my
    entire professional life to the foreign relations law of the
    United States, both in the academy and in government service. I
    have no clients; I represent no one in this case. I am here to
    try and help the Committee if I can.
        I speak in opposition to the bill under consideration. I
    wish to make three points. First, this bill, were it adopted as
    law, would likely harm the United States, as well as our allies
    by increasing exposure to litigation abroad.
        Second, this bill is not likely to achieve its stated aim,
    which is to whole foreign states accountable for material
    support for terrorism and to provide justice for their victims.
        Third, this bill would privatize the national security of
    the United States, contrary to any sensible antiterrorism
    policy.
        Existing law already provides a right for victims of state-
    sponsored terrorism to seek compensation through litigation.
    What this bill would do is strip the executive branch of its
    proper authority, provided by this Congress, to determine which
    states sponsor terrorism, and to give that power instead to
    private litigants. Such a grave matter as identifying states
    that are mortal threats to U.S. interests should not be left to
    private lawsuits. To put it bluntly, if Saudi Arabia did
    provide material support for the 9/11 attacks, we should be
    responding with cruise missiles, not with plaintiff's
    attorneys.
        And if they did not, seeking to extract money from them for
    the victims of those attacks may be justified on principals of
    charity and compassion, but not by justice. As you already have
    heard today, no country benefits from the international law of
    sovereign immunity more than the United States.
        Moreover, our worldwide interests and responsibilities mean
    that we do many things that foreign lawyers and judges do not
    like, and might consider illegal, especially when we fight
    terrorism. At the end of the day, increasing the exposure of
    our antiterrorism effort to foreign legal liability does not
    seem like a sound way to fight terrorist threats.
        Let me make this point concrete--in response to the
    judgement of the International Court of Justice requiring
    sovereign immunity, the Italian courts proved defiant. They
    struck down an act of their Parliament that had implemented
    this judgement, declaring that the rights of persons to
    litigate their claims in Italian courts overrides core
    principals of international law.
        Italy, as already has been noted today, is also a country
    where courts have brought criminal prosections against U.S.
    officials involved in apprehending suspected terrorists. These
    prosecutions arguably violate Italy's treaty commitments to us.
    Enactment of this bill will encourage the Italian courts,
    already inclined to disregard specific rules of international
    law, as well as treaties, to create even more exceptions to
    sovereign immunities. This would expose the United States to
    severe litigation risks for counterterrorism activates.
        Other countries will notice and respond accordingly, not
    only against us, but against our allies in this struggle,
    including the United Kingdom and Israel.
        Next, it is very unlikely that this bill will achieve its
    stated purpose. Most states, when confronted with lawsuits in
    foreign courts that they regard as violating their rights under
    international law, refuse to appear. When default judgements
    result, they refuse to pay. This bill does not affect the
    incentives of foreign states to do exactly this.
        As a result, the lawsuits the bill would permit are
    unlikely to unearth evidence that would identify, much less
    punish, state sponsors of terrorism, or to produce
    acknowledgement of culpability accompied by compensation.
        Finally, there is something seriously wrong with
    privatizing American national security policy. Although Section
    5 of the Senate bill allows the judge to stay the suit at the
    request of the executive, it does not require this. It still
    leaves it to the court and the litigants to decide when to do
    so. If they regard the efforts of the executive to unearth
    evidence of state support for terrorism is unsatisfactory, this
    bill gives them a green light to go forward.
        It is therefore completely unlike the Iranian claims
    litigation, where the executive could require courts to stay
    lawsuits. Thank you for your attention; I am happy to take
    questions.
        [The prepared statement of Mr. Stephan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
                                   __________

        Mr. Franks. I thank the gentleman, and now recognize our
    fourth and final witness, Mr. Gurule. Sir, if you would turn
    that microphone on, too.

             TESTIMONY OF JIMMY GURULE, PROFESSOR OF LAW,
                         NOTRE DAME LAW SCHOOL

        Mr. Gurule. Chairman Franks, Ranking Member Cohen, and
    other distinguished Members of the Subcommittee, I would like
    to thank you for holding this important hearing on the Justice
    Against Sponsors of Terrorism Act, and inviting me to testify
    on the value of this legislation in combating the threat of
    global terrorism.
        As we approach the 15 year anniversary of the 9/11
    terrorist attacks that tragically took the lives of
    approximately 3,000 innocent civilians, it is imperative that
    the U.S. Government continue to strengthen the effectiveness of
    its counterterrorism efforts, including depriving terrorists of
    funding, as well as deterring and punishing their financial
    sponsors, including foreign states.
        The enactment of JASTA is critical to achieving that
    objective. I would like to just briefly comment on three
    points--the first is the important goals advanced by JASTA;
    second, the fact that JASTA is narrowly drafted, narrowly
    tailored; and third, debunking the reciprocity arguments that
    are clearly, in my opinion, overstated. First, on the goals of
    JASTA--civil tort actions that seek large monetary damages
    provide an invaluable supplement to the criminal justice
    process and administrative blocking orders.
        These civil tort actions--claims, excuse me--advance five
    important goals--first, private lawsuits brought by victims of
    terrorism can have a deterrent effect against foreign
    governments that support acts of terrorism. While the threat of
    large civil monetary judgment may have little or no deterrent
    effect against the terrorists themselves, the same may not be
    true for foreign governments that lend financial support and
    direction to foreign terrorist organizations.
        These foreign states are likely to have substantial assets
    in the United State that may be attached to enforce civil
    terrorism judgments. We have seen that recently with the
    Islamic Republic of Iran, that recently has been sued by the
    victims of the 1983 terror attacks in Beirut, and their assets
    in the United States, approximately $1.7 billion in assets in
    the United States, have been attached to enforce the terrorism
    judgement against Iran.
        No one can tell me that that type of action, seizing those
    types of assets against a foreign state, is not going to have
    any deterrent effect against that foreign state with respect to
    its future activities, with respect to supporting acts of
    terrorism.
        Second, civil actions targeting the assets of foreign
    states that support terrorism can reduce the ability of
    international terrorists to carry out their deadly attacks.
    Money is the life blood of terrorists. While terrorists seldom
    kill for money, they always need money to kill. Depriving
    terrorists of funding, especially from foreign state sponsors
    of terrorism, is critical to preventing terrorist attacks and
    saving innocent lives.
        Third, foreign states that sponsor terrorism, including
    through government charities, should be held accountable for
    their action. That is a very fundamental principal and
    proposition.
        Fourth, victims of international terrorism should be
    compensated for their unimaginable loss, pain and suffering.
    And the foreign states responsible for these physical and
    emotional injuries should be held responsible for that
    compensation.
        And finally, the JASTA strengthens the statutory framework
    of the Foreign Sovereign Immunities Act and the Antiterrorism
    Act, and confirms the importance of civil litigation as an
    important tool in combating terrorism. With respect to JASTA
    itself, it is a very narrowly-tailored statute, and applies
    extremely limited and extraordinary circumstances, and does not
    permit U.S. nationals to routinely sue foreign states, as some
    critics of the legislation have maintained.
        First, it has a geographic limitation; it only applies to
    acts of terrorism that occur in the United States. As a subject
    matter limitation, it only applies to acts of international
    terrorism, not other acts of violence; and international
    terrorism is a well-defined term in the Federal U.S. Statute 18
    U.S.C. 2331.
        Fourth, the term international terrorism excludes any act
    of war, so that would not be covered in this legislation; it
    would not justify the cause of action for such actions. It is
    limited to actions that are aided and abetted by foreign
    terrorist organizations--that is another limitation. There is
    approximate cause limitation on the statutes, so these would be
    acts of international terrorism that were caused by the foreign
    state that aided and abetted the terrorist organization.
        Further, the statute provides that it does not extend to
    negligent acts--negligence by the foreign state--but only
    intentional or knowing conduct involving the state.
        And with respect to aiding and abetting, the statute
    provides that the foreign state must have provided substantial
    assistance to the foreign terrorist organization.
        With respect to the last point, on the overstatement
    regarding the reciprocity concerns, let me just simply say
    countries with the greatest potential for such lawsuits against
    the United States have authoritarian regimes that do not permit
    their citizens to bring civil suits against foreign governments
    for acts of international terrorism. In those countries, such
    actions are the exclusive purgative of the authoritarian
    government.
        For example, the private civil terrorism lawsuit filed
    against Iran for its complicity in the 1983 terrorist attack in
    Beirut, Lebanon, killing over 200 American servicemen, did not
    result in retaliatory lawsuits be filed against the United
    States by private citizens in Iran.
        Furthermore, the civil terrorism case did not undermine the
    U.S. Government's efforts to finalize the joint comprehensive
    plan of action with the Islamic Republic of Iran. The civil
    terrorism lawsuit was pending when the United States and its
    allies were negotiating and finalizing the terms of the
    multilateral agreement with Iran to limit the country's ability
    to develop nuclear weapons.
        So it had no effect--the fact is the pending terrorism suit
    had no effect on that. So I think that the statement regarding
    retaliation is largely overstated.
        And finally, in conclusion, the JASTA eliminates sovereign
    immunity for foreign states that intentionally, knowingly, aid
    and abet terrorist organizations in carrying out deadly attacks
    on U.S. soil; in my opinion that is good U.S. policy, and as a
    result, the JASTA should be enacted into law by Congress. Thank
    you.
        [The prepared statement of Mr. Gurule follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                   __________
        Mr. Franks. And I thank you all for your testimony, and we
    will now proceed under the 5 minute rule of questions, and I
    will begin by recognizing myself for 5 minutes. And, Judge
    Mukasey, I will start with you sir. First, thank you for your
    gallant service to the country.
        Mr. Mukasey. Thank you very much.
        Mr. Franks. Judge Mukasey, JASTA essentially calls on
    Congress to strike a balance between providing U.S. victims of
    terrorism with access to judicial redress for terrorist attacks
    on U.S. soil that our sponsored by foreign governments, and
    subjecting foreign governments to lawsuits is U.S. courts--at
    least that is the attempt, I think, of the legislation.
        Why do you think JASTA strikes this balance incorrectly?
    Can you help us understand that?
        Mr. Mukasey. I think the principal problem with that
    analysis is that JASTA does not itself determine its own
    application. There was a philosopher a long time ago named
    Ludwig Wittgenstein who stated that principal--no rule
    determines its own application. This can be applied, and
    invoked, by anybody who wants to sue.
        It is not going to be established that a country was not
    involved in aiding and abetting terrorism unless and until a
    complaint is filed, discovery is engaged in, the country's
    diplomatic and national security matters are probed into in a
    United States court, and they are subjected to all the
    processes of discovery in a United States court that, frankly,
    interfere with the ability of this country to conduct its
    foreign relations, and terrify foreign governments, and I think
    justly. That is the problem.
        Mr. Franks. So, Mr. Klingler, I will turn to you, sir.
    Recently, Bloomberg editorialized that in the event that
    foreign Nations respond to an enactment of JASTA by passing
    reciprocal measures of their own, ``The entirety of U.S.
    foreign policy could be put on trial in foreign courts under
    the guise of seeking monetary justice.'' Now, do you think this
    is a potential result of the enactment of JASTA? If not, what
    are your assurances that you might state? That microphone, sir.
        Mr. Klingler. Thank you very much. Two principal
    reactions--one is the scope of JASTA itself. I mean, if the
    theory is that there is actual mirroring of JASTA's terms
    abroad, then the scope of our exposure arising from JASTA is
    limited to our undertaking acts of international terrorism. And
    the additional exposure of reciprocal retaliation would only be
    what JASTA extends beyond the current FSIA limitations.
        In other words, a foreign state that is actually motivated
    and seeks to do that could do it today. They could say, ``The
    United States has Section 1605A. That allows a suit in our
    court based on a designation by the executive, and we designate
    the United States,'' they could do that. Or they could point to
    the tort exception, and say the United States Courts are
    divided over the scope of the tort exception, they all agree,
    and the State Department even agrees that acts of Americans
    abroad--or I am sorry--acts of a foreign state in America,
    would fall within the current exception. So we are going to
    extend or immunity exception to acts of Americans abroad.
        So, JASTA itself contains a set of limitation, and does not
    extend current law particularly broadly. The other principal
    response, and I think what has driven this area for the last 40
    years is that this is handled by the United States Government
    in an exceptionally professional and effective way. It is a
    political, military and diplomatic issue.
        When a foreign country begins to restructure its judicial
    processes to direct their actions at the United States, we take
    a broad range of action. Judge Mukasey's point about Belgium,
    and our threatening to shift NATO, shows actually that we do
    have the capability to respond to this, that we can meet both
    sets of objectives. We can ensure that injuries in the United
    States can be redressed by our courts, and that inappropriate
    extensions of jurisdiction elsewhere can be met appropriately
    by our diplomatic forces. They have the tools to do that.
        Mr. Franks. Professor Gurule, some have argued that the
    enactment of JASTA will violate international law, as you know.
    Do you believe or do you not believe that the exception to
    foreign sovereign immunity included in JASTA will cause the
    United States to violate international law?
        Mr. Gurule. No, I do not. I do not believe that it would
    violate international law, and the reason that I say that is
    that foreign sovereign immunity is not absolute, and we know
    that. An exception, again, has been highlighted in the Foreign
    Sovereign Immunities Act for torts committed within the United
    States.
        Further, 1605A creates another exception, and foreign
    states have also recognized exceptions to foreign sovereign
    immunity for torts committed in their territory. So again, I do
    not believe that sovereign immunity is an absolute principal
    without exception. And other states besides the United States
    have recognized exceptions to foreign sovereign immunity.
        Mr. Franks. Well, thank you. My time has expired, and I
    will now recognize the Ranking Member for 5 minutes.
        Mr. Cohen. Mr. Klingler, let me ask you, how many clients
    do you have in this case?
        Mr. Klingler. Very few. I represent an association of
    insurers. I work with co-council, who represent, you know, a
    much broader range. And at times, when I have, say, argued in
    the second circuit on this issue, it is on behalf of the
    broader range of plaintiffs.
        Mr. Cohens. How many victims of 9/11 are involved?
        Mr. Klingler. In the case generally, oh, the class action
    extends into, you know, the several hundreds.
        Mr. Cohen. Did they not get compensated? Did they have to
    not except compensation to participate here?
        Mr. Klingler. Certain of the victims have been compensated.
    The extent of the compensation, though, is quite limited. And
    even for the ones who were compensated, others have not been
    compensated at all. And even for the ones that have been
    compensated, both the extent of the injury, but particularly
    the process--the justice element--that what a number of the
    plaintiffs want more than anything else is an accounting.
    Someone to actually delve into the fact----
        Mr. Cohen. I accept that, and the people that have not been
    compensated at all, is that because they are not direct victims
    or----
        Mr. Klingler. Because they are not necessarily eligible
    under the particular compensation scheme. For example, for, you
    know, the massive property damage.
        Mr. Cohen. All right, so it is property, not personal.
        Mr. Klingler. Well, I think even some of the personal, but
    I am not familiar with how that line is drawn.
        Mr. Cohen. Okay. Mr. Stephan, and I might have missed it in
    your address, but what is the harm, if you say that these
    people--foreign governments--will not appear; they just will
    not come to court jurisdiction just will not permit, and they
    will not pay off the judgement and it just kind of--so what is
    the harm in letting folks bring an action in court?
        Mr. Stephan. Sir, the harm is, first, that you do not get
    the reckoning that people are looking for; you get no
    acknowledgement, you get no information.
        Mr. Cohen. All right.
        Mr. Stephan. Secondly, those default judgements, in turn,
    become problematic. We have talked about Iran; we have talked
    about legislation that this Congress has adopted that extended
    the scope of assets associated with Iran that might be used to
    pay off some of those judgments. Iran has initiated a claim in
    the International Court of Justice based on a treaty we have
    with them.
        And it is possible--I am not saying it is likely--but it is
    possible that the United States will end up being on the hook
    for the money paid to Iran. We have seen something like that
    happen with our terrorism judgments supposedly collected
    against Cuba. So, there are consequences. It is not an empty
    gesture.
        Mr. Cohen. Mr. Mukasey you talked about--I believe it was
    your statement--about other countries wanting to sue us--maybe
    it was Mr. Stephan--but that other folks want to sue us or
    bring action against us.
        Mr. Mukasey. It is not a question of suing us; it is a
    question of using this as a pretext, either for lawsuits, which
    would be, you know, one thing; but for other kinds of
    harassment of our people--military, diplomatic, and so on, it
    is a pretext, not that their going to enact identical
    legislation. That is not the way it works. They do things that
    interfere with our sovereign immunity, whether by harassing our
    diplomats or our soldiers. And then when we - - -
        Mr. Cohen. But could they not do that now?
        Mr. Mukasey. They would not have the pretext of this
    statute that does not even depend on an executive determination
    of status as a foreign sponsor of terrorism. We are letting
    basically anybody walk into court and say, ``We think this
    entity is a foreign sponsor of terrorism.''
        Mr. Cohen. I do not know that they need a pretext, but
    whatever. They have got all these problems abroad where we
    could be sued, and the drones we have killed at least a 100
    people. Our litigation, we think, where there is a wrong, there
    is a remedy--in this case you are saying there is not a remedy,
    or are you saying this is the type of situation where
    mysteriously people appear and give somebody a bunch of money
    and do not say where it comes from, and then they leave?
        Mr. Mukasey. I am not sure I understand the question.
        Mr. Cohen. Well, I understand that maybe it is nothing
    classified--it is something I read in the paper--that some of
    these victims of drone attacks, the heirs of the victims of
    drone attacks, somebody mysteriously shows up, gives them a
    whole bunch of money, and did they disappear. Is that the way
    we are supposed to remedy our errors?
        Mr. Mukasey. No.
        Mr. Cohen. But we do that.
        Mr. Mukasey. Not necessarily, but if that is the reality of
    international relations then it is a whole lot better then
    airing our----
        Mr. Cohen. Dirty laundry.
        Mr. Mukasey [continuing]. National security secrets in a
    tribunal overseas. Do I think it is desirable? No. Do I think
    it is better than the alternative?
        Mr. Cohen. Let me get in my last question. You said
    something about Belgium, and there was a possible prosecution
    of Rumsfeld?
        Mr. Mukasey. Yes.
        Mr. Cohen. What was that for?
        Mr. Mukasey. It was for war crimes.
        Mr. Cohen. That makes me be more in favor of this. Thank
    you.
        Mr. Franks. I now recognize the Ranking Member of the
    Committee, Mr. Conyers, for 5 minutes.
        Mr. Conyers. Thank you, sir, and I thank you for your
    testimony, gentlemen. Let me start with Mr. Stephan. Mr.
    Klingler and Professor Gurule argue that concerns about
    reciprocal actions against our country in response to the
    enactment of this S. 2040 are overblown, noting that exceptions
    to sovereign immunity over the last 40 years have not resulted
    from a flood of litigation against the United States. What is
    your response, sir?
        Mr. Stephan. Thank you for the question, congressman. My
    response is, first of all, until very recently, the tort
    exception in the Sovereign Immunities Act has been used for
    what Congress thought it was doing; cases like the Makharadze
    automobile accident here in D.C. 20 some years ago. It has not
    been used as a way of dealing with what are fundamentally
    national security issues, although also issues of justice.
        As to the antiterrorism provision that we have had on the
    books for 20 years now, in essentially every case where claims
    have been brought, there has been retaliation by the countries
    involved. Our response is we do not care what Cuba does, we do
    not care what Iran does, and I suppose you could say that law
    does not ultimately matter one way or the other. Our power will
    get us where our power gets us.
        But if you believe that law matters, I think changing our
    law in the way that is proposed by the Senate bill will have
    implications in the laws in other countries, and I think those
    legal changes will have consequences.
        Mr. Conyers. Thank you very much. Let me turn now to Mr.
    Klingler. Professor Stephan contends that the Justice Against
    Sponsors of Terrorism Act would allow a private litigant to
    leapfrog the political branches just to allege that a certain
    particular state sponsor, or sponsors of terrorism, based on
    the belief and hope rather than proof, leaving the decision of
    when to discard sovereign immunity to private litigants acting
    on incomplete information, and whose interests do not
    necessarily match those of our Nation as a whole. How do you
    respond to that, Mr. Klingler?
        Mr. Klingler. Thank you very much. I think that rests on
    just a fundamental misunderstanding of how the Foreign
    Sovereign Immunities Act has been structured by the political
    branches.
        Congress made the initial determinations, in both the tort
    exception and in 1605A, that there would be a series of
    judicial determinations related to--in the former case injury
    arising just in the United States; in the latter case, it would
    be injury arising anywhere subject to the executive
    determination. And what JASTA is seeking to do is really to
    restore that basic understanding that tort exception passed in
    1976 by a political branch, that indicated that we do not want
    a politicized executive process to be the focus of determining
    when victims of a whole range of injures including terrorism,
    can get relief.
        Instead, we will create narrow categories that are
    internationally recognized where the judiciary is the
    appropriate forum for that. That was the basic decision in
    1976, and JASTA just carries that forth.
        Mr. Conyers. Professor Stephan, do you support that view?
        Mr. Stephan. I would like to distinguish, sir, between the
    1976 decision and the 1996 decision. As to the creation of the
    antiterrorism exception in 1996--and that was what I was
    referring to in my written remarks--that does require a
    separate judgment by the executive branch using criteria set
    out by this Congress. And what 1605(b) would do is eliminate
    that step. That was what I was referring to.
        Mr. Conyers. Ah. Well, would you have a final comment, sir?
        Mr. Klingler. If I could. The 1605 executive power is
    preserved for all injuries overseas. And I think that we cannot
    underestimate the fact that there have been state-facilitated
    terrorism cases brought under the tort exception.
        Let's go back decades--that is Liu in the ninth circuit,
    that is Letelier in the district court, and that is for the 9/
    11 cases apart from the Saudi case. Since 2008, the theory of
    JASTA is what underlies the claims against the Afghans that
    have been brought in the DDC and at least allowed to go into
    discovery by the Second Circuit.
        Mr. Conyers. Thank you sir, thank the Chair.
        Mr. Franks. I thank the gentleman, and I now recognize Mr.
    Nadler for 5 minutes.
        Mr. Nadler. Thank you. I think it was Mr. Klingler just
    mentioned the Letelier case. In the early 1970's, Orlando
    Letelier, the former Chilean Ambassador to the United States,
    was murdered in Washington, D.C. by operatives and senior
    officials of the Chilean Intelligence Services and two Cuban
    exiles. His survivors were permitted to sue the Chilean
    Government in American courts.
        And the widow of Henry Liu, a Chinese journalist and critic
    of the Taiwanese Government, was permitted to sue Taiwan after
    her husband was murdered in California by agents of the former
    director of Taiwan's Defense Intelligence Bureau.
        Yet that, I suppose I should ask Attorney General Mukasey,
    those cases did not resolve in any kind of retaliation or a
    flood of litigation against the United States. Why do you think
    that having JASTA restore the law as it was understood then, in
    this situation, would result in such retaliation?
        Mr. Mukasey. Because we are talking about far different
    scale, and a far different kind of involvement. Those were
    narrow acts focused on particular people, where a lawsuit took
    place on United States soil. This is something----
        Mr. Nadler. The orders were given abroad.
        Mr. Mukasey. Understood, but this is something far
    different. The scale is far different, the alleged involvement
    is far different.
        Mr. Nadler. Mr. Gurule, would you answer the same question?
        Mr. Gurule. Yeah, I disagree. I do not see the distinction.
    I think that, again, when a foreign state aids and abets a
    terrorist attack, whether it is against a single individual in
    the case of an assassination of Letelier, or a terrorist attack
    on a much larger scale, the foreign state should be held
    accountable for its criminal conduct. Second, the victims of
    the attack should be afforded a remedy, a judicial remedy. They
    should be afforded their opportunity to litigate the cause of
    action in court. And so I find that distinction----
        Mr. Nadler. The essential question I am asking is not on
    the equities, which I think are clear--people ought to have a
    remedy. But, on the prudential question of if we were to enact
    this, would that not invite retaliation by foreign governments?
        Mr. Gurule. I think, again, it is overstated, and I go back
    to the case involving the Islamic Republic of Iran. I mean it
    is been sued in the United States for acts of international
    terrorism that resulted in a large terrorist attack in Beirut,
    killing over 200 American servicemen. That litigation has been
    ongoing for over 10 years. It was brought to conclusion by U.S.
    Supreme Court----
        Mr. Nadler. And this did not affect the JCPOA?
        Mr. Gurule. There has not been a flood of litigation.
        Mr. Nadler. Let me ask, Mr. Klingler Attorney, Attorney
    General Mukasey expressed concern in his testimony that
    enacting JASTA was almost certain to invite retaliation against
    our own government officials, soldiers, and diplomats in
    reference that the countries that would be most threatened by
    that would be the U.S., the U.K. and Israel in terms of
    individuals.
        But JASTA only provides jurisdiction to sue foreign
    governments not individuals. And, if foreign governments were
    looking for an excuse to sue American Government officials,
    soldiers, and diplomats, would the existing tort exception not
    provide a sufficient excuse? First, Mr. Klingler, and then
    Attorney General Mukasey.
        Mr. Klingler. You are absolutely right that JASTA does not
    apply to claims against individuals. The entire Foreign
    Sovereign Immunities Act does not apply to claims against
    individuals.
        So, to the extent that there would be foreign governments
    that want to initiate jurisdiction to pursue individual
    Americans, that has nothing to do with reciprocating against
    either the Foreign Sovereign Immunities Act, or JASTA itself.
        Mr. Nadler. So let me ask Attorney General Mukasey
    essentially the same question, but is your argument not really
    that any change to the--what is it, the Foreign Tort Act--even
    if it is a limited change, would give foreign governments the
    excuse to make bigger changes? And even if what we are doing
    would not evolve into claims against individuals, some foreign
    government might?
        Mr. Mukasey. That is a large part of it. I mean, one of the
    questions raised before was what if they passed legislation
    that mirrored what we are doing here? The issue is not mirror;
    the issue is caricature.
        Mr. Nadler. So, your argument basically is that we should
    not make any change to the Foreign Sovereign Immunities Act,
    because it might lead to foreign governments to have an excuses
    to make worse changes?
        Mr. Mukasey. Only with a lot of hesitation and a lot of
    study, neither of which has been present here. This thing flew
    past the Senate with no hearings.
        Mr. Nadler. Well we do not duplicate the Senate's
    practices.
        Mr. Mukasey. I understand that, and I commend you for it.
        Mr. Nadler. Mr. Gurule, my last question since my time is
    running out. There was reference to Americans being arrested in
    Rome, I think it was, and subject to prosecution. But was that
    not a case where the allegation was that American CIA agents
    had, without any color of authority, kidnapped someone off the
    streets of Rome, and shipped him off to Syria to be
    interrogated and tortured by the Hafez al-Assad regime, and
    what happened to that litigation? Do you know?
        Mr. Gurule. As far as I know, I think it is still pending.
    You know there were criminal charges that were filed against
    the Americans, and efforts are being made to in Italy bring
    them to justice.
        But again, I would go back to the point--if there is a
    hostile foreign government, a hostile foreign government does
    not need any pretext, does not need any excuse, to bring
    criminal charges against the United States or it is citizens.
    And this legislation is not going to change that one way or the
    other.
        Mr. Nadler. My time has expired. Thank you very much.
        Mr. Franks. I thank the gentlemen, and I now recognize Mr.
    Deutch for 5 minutes.
        Mr. Deutch. Thank you Mr. Chairman. Judge Mukasey, I just
    want to go back to something you said earlier about the role
    that a court would actually play here. I mean, there is a
    terrorism exception currently, right, under the foreign
    sovereign immunities?
        Mr. Mukasey. There is terrorism exception when the United
    States Government has designated a foreign state as state
    sponsored terror.
        Mr. Deutch. State sponsor of terror, right.
        Mr. Mukasey. So that takes care of the issue of who decides
    initially that this lawsuit should even go on, because----
        Mr. Deutch. Right, right, I understand. And that is where I
    am going. So, when the proposed statute refers to a tortious
    act, a foreign state or its official employee agent acting
    within the scope of her office, regardless of whether the
    tortious conduct took place, that is what requires, I think as
    you suggested--and this is what I do not understand just from
    your years of experience--that is what you suggest requires a--
    before determining whether there is an exception, before
    knowing that the country was actively involved in terrorism,
    the only way--I guess you are suggesting the only way we are
    going to know that is if it is determined. And the only way to
    determine that under this statute would be in court.
        Mr. Mukasey. Correct.
        Mr. Deutch. And how would you expect that would play out?
    That is what I am trying to get at.
        Mr. Mukasey. A complaint gets filed.
        Mr. Deutch. Yeah.
        Mr. Mukasey. That complaint is judged solely on its four
    corners. In other words, do the allegations in the complaint
    allege a claim? Not is there any evidence to support the claim,
    et cetera. You then go through what is known fondly as
    discovery, which is an exercise that involves probing into the
    documents and the witnesses on each side. In a civil case, that
    is an unexceptional exercise.
        When you are talking about litigating, with respect to the
    involvement of a foreign government, you are talking about
    subjecting their internal deliberations, their national
    security documents, their documents that may very well involve
    cooperation with the United States, to public scrutiny in a
    court, and it becomes a very different matter, and there are
    very different considerations. That can be done by anyone,
    regardless of whether it serves the interest of the United
    States or disservices them, and that is what I think is
    objectionable.
        Mr. Deutch. Mr. Klingler, how do you respond to the
    suggestion that a case gets filed, and suddenly in discovery,
    there are requests for the production of all kinds of documents
    that might be used to show a connection that for a whole host
    of national security reasons, let alone the concern of
    retaliation that have been discussed, should not be part of an
    extensive court case?
        Mr. Klingler. Right, a couple of points. I mean, one is
    that foreign sovereigns are in U.S. courts every day under the
    various exceptions. Some of those manners are extremely
    sensitive--a number of--both on the tort exception and
    expropriations, and some commercial matters. And judges have
    developed a whole range of doctrines, some of which are very
    favorable to foreign sovereigns to make sure that discovery, if
    it even takes place, is limited; that there is direct appeal in
    cases of the unnecessary invasion of the foreign interest.
        And frankly, we should kind of keep in mind what the
    national security context is here. And judges manage this issue
    everyday. I do not have the experience obviously of Judge
    Mukasey, but the issue here is whether the state facilitated a
    terrorist attack on U.S. soil. That may implicate various
    correspondence, it may implicate various correspondence with
    other governments.
        The United States has the ability to enter appearances and
    help to manage that issue, but the national security
    sensitivity is going to be whether the Nation attacked us or
    not, or facilitated those who did.
        Mr. Deutch. Right. Mr. Stephan, right, so there is an
    argument that I think a lot of people would make just listening
    to this; understand we are concerned about what maybe brought
    out in court, but if what we are talking about bringing out in
    the course of litigation under this statute is an active role
    played by a foreign government in a terrorist attack, why would
    we not expect that to be the result?
        Mr. Stephan. Congressman Deutch, let me play law professor,
    if you will allow me, and put before you a hypothetical. In
    many parts of the world----
        Mr. Deutch. As long as I do not have to answer your
    question.
        Mr. Stephan. Yes, sir, I will try to answer my own. In many
    parts of the world--not only in the Islamic world, but in
    Europe--it is believed that Israel is the real perpetrator of
    the 9/11 attacks. Suppose a victim of that attack files suit
    against Israel under this law.
        Under the current bill as I see it, there is no barrier at
    which point discovery ensues, in which Israel will have to try
    and prove a negative; that in spite of its obvious interest in
    concealing under this--if I may so, paranoid account--but still
    one that is commonly believed. What is discovery going to look
    like, in that case? That, in a nutshell, is my concern.
        Mr. Deutch. If I can just ask Professor Gurule, so should
    we would be concerned that if we pass this, suddenly cases are
    going to be brought all over alleging the most outrageous
    things that ultimately would not just be outrageous, but would
    actually start to compromise our national security?
        Mr. Gurule. Again, I think this is highly speculative. And
    anything is possible, but just because something is possible
    does not make it true, that it is going to happen. And the
    possibility that someone may seek to sue is real with respect
    to the 9/11 attacks, again is so highly unlikely, so
    speculative, that it does not undermine all of the good, all of
    the value, and the positive purposes, value that would be
    brought by enacting this legislation.
        Mr. Deutch. Thanks. Mr. Chairman, I yield back. I thank the
    panel. This was very helpful, very instructive.
        Mr. Franks. Well, this concludes today's hearing and,
    without objection, all Members will have 5 legislative days to
    summit additional written questions for the witnesses or
    additional materials for the record.
        And I just want to especially thank the witnesses and the
    Members and the audience for being here today. I appreciate all
    of you taking the time to be here. And with that, this hearing
    is adjourned.
        [Whereupon, at 11:56 a.m., the Subcommittee was adjourned
    subject to the call of the Chair.]

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