The U.S.-Libya terrorism settlement which sailed through the U.S. Congress at the end of July and was signed on August 14 has mixed results for both countries and the victims of Libyan-sponsored terrorism. The deal will enable the U.S. and Libya to complete the process of mutual diplomatic recognition and establish economic relationships benefitting both countries and major American industries. The Libyan Victims Compensation Act and a supplemental letter provided by the State Department to some parties call for voluntary contributions of over $1 billion to a U.S. government-administered entity, which would then compensate the American victims. The fund would also compensate Libyan representatives of those injured or killed by the 1986 U.S. airstrike ordered by Presdient Reagan after the LaBelle discotheque bombing in Germany, in which Americans and Europeans were killed. It also presents a host of unknown consequences for the victims of the remaining current members of the "state sponsors of terrorism" list: Cuba, Iran, Sudan, Syria, and North Korea. To my knowledge, it is the first law which mandates a claims settlement process for victims of a former "state sponsor," which makes it a template for the resolution of all claims against a former "state sponsor" upon normalization of relations.
Those representatives of American victims Libyan terrorist attacks who had not settled will receive substantial monetary compensation, but the settlement was not universally hailed. Some American citizens whose loved ones were killed by Libyan-sponsored terrorism were not consulted about the Act until it was about to pass Congress. Apparently one such group included American plaintiffs whose loved ones on UTA Flight 772 were murdered by a Libyan suitcase bomb in September 1989. The 51 American plaintiffs in that case were awarded $6 billion months months ago by a federal judge; they issued a statement (through their attorneys) critical of the Act.
The Act seeks to exclude foreign plaintiffs whose loved ones were killed with Americans in the same attack from participating in the settlement fund. In my paying job, I represent one of the law firms with clients in a case arising from Libyan-armed IRA terrorists. (This post presents only my views and does not necessarily reflect those of my client.) Europeans who are joined with Americans in this suit, with their claim of jurisdiction based in the Alien Tort Statute of 1789 ("ATS"), went to bed as plaintiffs and awoke as possible legal non-entities as Congress passed the Act on the evening of July 31. In his press briefing on the settlement which he negotiated for the U.S., Assistant Secretary Welch briefly stated, "Under American law, you know, only Americans can bring these kinds of suits in the United States," reflecting an apparent State Department policy of actively excluding foreign terrorism victims from U.S. courts. But for two centuries, since the enactment of the ATS, the U.S. has recognized the ability of foreign citizens to bring tort lawsuits in the United States for acts which violate customary international law or U.S. treaties; those acts would naturally include terrorist attacks. Assistant Secretary Welch’s statement undermines years of jurisprudence and victims’ attempts to hold terrorists accountable for their actions. See Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), on the ATS in general, and see the discussion of the ATS beginning on page 20 of the order by U.S. District Court Judge Nina Gershon denying the Arab Bank's motion to dismiss, issued January 29, 2007.