Families in a Lawsuit Against Libya Deserve a Fair Share of a Settlement Fund

Tuesday, February 17, 2009

WE HAVE long been critical of U.S. laws that allow individuals to sue nations for acts of terrorism and collect millions of dollars. Such laws strip countries of legal immunity -- a move that makes the United States vulnerable to reciprocal legal attacks overseas. They also too often subvert national interests to the needs of a small group of people. Such victims often have heart-wrenching stories to tell. But allowing them to lay claim to the U.S.-based assets of a foreign country deprives the United States of an important negotiating tool.

Yet Congress has passed such laws since the late 1990s; in 2007, lawmakers approved the Lautenberg Amendment to give victims more legal muscle to seize the assets of state sponsors of terrorism. These provisions are, in short, the law of the land.

It is in this context that we urge fair treatment of a group of families that sued Libya and won a $6 billion judgment, only to see most of that win wiped out by the Bush administration. The families are related to seven Americans who were killed in 1989 aboard a UTA flight when a bomb sent it crashing into the desert in Niger. The seven families sued Libya for sponsoring the terrorist act. Last year, a judge in the U.S. District Court for the District of Columbia awarded the seven estates and 44 individual family members $6 billion. A judgment of roughly $1.6 billion was assessed against the state of Libya; the rest was levied against six Libyan officials responsible for the act. Each of the seven estates in the Pugh lawsuit -- named after the lead plaintiff in the matter -- was awarded an average of $20 million; some individuals secured judgments of as much as $26 million.

Last summer, President Bush, backed by Congress, entered into a deal in which, among its terms, Libya agreed to establish a $1.5 billion compensation fund for all American victims of Libyan-sponsored terrorism, including those harmed or killed in the Egypt Air hijacking and the Rome airport attack of the 1980s. In exchange, the United States agreed essentially to wipe out all civil claims against Libya, including the Pugh judgment.

Although the deal guarantees $10 million to each of the seven Pugh estates, whether the 44 individuals are entitled to any recovery has been left up to the Foreign Claims Settlement Commission to determine.

People with knowledge of the Bush administration's negotiations with Libya say that the Pugh judgment -- and the fear that some two dozen other pending suits could result in huge awards -- weighed heavily on Libya. The Pugh judgment, in other words, was an important catalyst in bringing Libya to the bargaining table.

Paying these particular individuals under these particular circumstances reinforces rather than conflicts with U.S. foreign policy. That the claimants are being paid with money directly and willingly supplied by the Libyan government is only fitting.


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