Court hears appeal on rejected payout for Michigan Marine veteran who was imprisoned in Iran Courtroom and gavel. (Joe Gratz/Flickr)
A federal appeals court heard arguments Tuesday in a case brought by Michigan’s Amir Hekmati, who is fighting the revocation of a $20 million payout he was promised by a special government fund for victims of state-sponsored terrorism.
Hekmati, a former U.S. Marine from Flint, had applied for compensation from the federal fund after he had been imprisoned in Iran for four and a half years and was released in 2016 as a part of the Iran nuclear deal.
But the fund’s special master, Kenneth Feinberg, years later revoked his decision and said Hekmati wasn’t eligible for the money. Feinberg did so after learning of FBI allegations that Hekmati had traveled to Iran not to visit his ailing grandmother as he claimed, but to sell classified information to the Iranian government.
Hekmati, a U.S. citizen, has vehemently denied the allegations and accused the FBI of having “abused its authority.” Hekmati has not been charged with any crimes, and his lawyers have emphasized that he was tortured and sentenced to death by the very government that he’s alleged to have tried to sell information to.
The basis for the FBI’s investigation was not the focus of Tuesday’s arguments by video conference before a panel of the U.S. Court of Appeals for the Federal Circuit that included Judges Alan Lourie, William Bryson and Tiffany Cunningham.
Instead, the panel is reviewing the decision last year by Judge Richard Hertling of the U.S. Court of Federal Claims to dismiss Hekmati’s lawsuit seeking damages for the fund’s breach of its payment obligations.
Hertling concluded that the court lacked jurisdiction over the case because the law prohibits judicial review of the special master’s decisions regarding compensation from the U.S. Victims of State Sponsored Terrorism Fund.
Hekmati’s attorney, Emily Grim, said Tuesday the lower court had erred, arguing that her client’s claim is not precluded because it is not challenging a compensation decision itself but instead seeking to enforce the agreement to pay out the money.
She told the panel that the government’s reconsideration of Hekmati’s award violated the fund’s authorizing statute, noting that it says a special master’s decisions are “final and nonreviewable.”
Grim further argued that the reconsideration was untimely, coming years after the initial award and at least 11 months after the fund had information from the Department of Justice that Feinberg later cited as the basis for his reconsideration.
“Timeliness is important,” Grim said. “There needs to be an element of finality, so that those payments can be made timely, and the fund can be administered.”
Judge Bryson pressed Grim on whether a finding of fraud as a basis for the special master’s reconsideration trumps concerns about timing.
“If the plaintiff has done something to get a judgment that is based on fraud, then the cases seem to suggest that any concerns about timeliness are much less compelling,” Bryson said.
“I don’t think that the cases say that the standard goes out the window when fraud has been alleged by the government,” Grim replied.
Judge Cunningham asked Grim why the delay in the reconsideration seemed “unreasonably long.” Grim replied that weeks are reasonable under the line of relevant case law but “not months.”
Grim explained that the fund had made payments to other claimants in early 2019 but was unresponsive to calls from Hekmati, his attorneys and members of Congress about what the holdup was for 11 months — until his attorneys threatened to sue to compel payment.
Only then, Grim said, did the fund say it had put a freeze on his payment as they reconsidered his eligibility.
“It was more than days, it was more than weeks. It was close to a year,” Grim said. “The record also shows that the information that was used as the basis for the reconsideration was within the fund’s possession back in January (2019), otherwise why would they have not paid him?”
The attorney representing the government, Shari Rose, later said the case presented both the special master and the Department of Justice with “uncharted waters” after they learned there may have been an eligibility determination that was “based on fraud.”
The information at issue was classified, so the Department of Justice had to create a declassified record to provide to the special master and Hekmati, Rose said in explaining the delay.
“That takes some time,” Rose said. “I would say also that they were very careful and seeking to correctly determine whether the special master here — in a question that was posed to it for the very first time — had the authority to reconsider and reopen his initial decision in this circumstance. And they found, correctly, that the special master does.”
Rose urged the panel to affirm the lower court’s decision, contending that Congress intended no role for the courts in challenges to the special master’s decisions on compensation.
“… the touchstone is the language of the Act, and the Act does not provide a cause of action to applicants happy or otherwise, for review in the court,” Rose said.
“It’s been long recognized that where Congress creates such discretionary programs, it’s under no obligation to provide a remedy in court. And here it did not.”
Feinberg revoked Hekmati’s award from the fund two years ago in January 2020, saying the new information he’d received supported his conclusion that the “primary purpose” of Hekmati’s trip to Iran was to sell classified U.S. national security information to Iran.
Feinberg cited partially redacted summaries of FBI interviews with Hekmati and an unsigned document claiming that Hekmati had accessed classified materials about Iran in his role as an intelligence analyst for a U.S. contractor in Afghanistan.
The same document said Hekmati had left his contractor job after a month or two, and alleged that four independent, unnamed sources claimed he’d approached Iranian officials offering to sell them the classified info, according to court records.
Feinberg concluded that Hekmati had made misrepresentations in connection to his application to the fund and, therefore, was not eligible for payment. The special master later held a review hearing to hear testimony from Hekmati in April 2020 in support of his challenge, but issued a final decision in December 2020 affirming his revocation.
Hekmati’s lawyers have argued that the reconsideration was “unlawful” and not supported by the facts, highlighting in court records that they presented Feinberg with 379 pages of evidence and hours of sworn testimony by Hekmati to contradict the Department of Justice’s allegations.
That evidence included email correspondence by Hekmati with his mother and others showing he had plans to visit his family in Iran long before he learned of the new job opportunity in Afghanistan.
Hekmati and his attorneys have also stressed that all Iran-related materials he reviewed in that position were within the scope of his job responsibilities and security credentials and done so openly, with no concerns expressed by his supervisors.
Hekmati’s lawyers noted he had already left his job when he traveled to Iran and wasn’t obligated to inform former colleagues of his trip. The son of Iranian immigrants, he stayed with family members there and never approached Iranian officials or tried to sell government secrets, Hekmati has said.
Hekmati was arrested during his 2011 trip and sentenced to death after the Iranians accused him of spying for the CIA. Iran’s Supreme Court annulled the sentence but then convicted him of “cooperating with hostile governments” and sentenced him to 10 years in prison.
While detained, Hekmati received broad support from human rights groups and U.S. officials including then-Secretary of State John Kerry and then-Vice President Joe Biden, who met with Hekmati’s family in 2015 while during a visit to Michigan.
U.S. officials repeatedly denied that Hekmati was a spy, and President Barack Obama demanded his release. Hekmati was finally freed in 2016 with other U.S. citizens, including the Washington Post’s Jason Rezaian.
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