Executive Recognition Governs “Foreign State” Status Under the FSIA; TRIA Agency/Instrumentality Status Fixed at the Asset-Blocking Date

Precedents Cited

1) FSIA interpretation, judicial role, and deference

• Samantar v. Yousuf, 560 U.S. 305 (2010): Cited by Judge Sullivan and Judge Menashi as the modern touchstone that the FSIA supplies the operative immunity rules for “foreign states” and their “agencies or instrumentalities,” and as historical context for the shift from State Department “suggestions of immunity” to judicial application of statutory standards.
• Republic of Austria v. Altmann, 541 U.S. 677 (2004): In Judge Sullivan’s telling, Altmann stands for the proposition that questions of the FSIA’s scope are for courts and that Executive views “merit no special deference” on the meaning of the statute; Judge Menashi treats Altmann as consistent with judicial application of FSIA standards, while insisting “foreign state” status itself is not governed by standards within the FSIA.
• Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (1983): Both dissents use Verlinden to frame Congress’s intent to replace an “executive-driven” immunity practice with a comprehensive statutory regime administered by courts; they diverge on whether that transfer includes authority to decide statehood against Executive recognition.
• Republic of Argentina v. NML Capital, Ltd., 573 U.S. 134 (2014): Used by Judge Sullivan to emphasize Congress “abated the bedlam” of discretionary immunity practice through the FSIA’s “comprehensive set of legal standards.”
• Kirschenbaum v. 650 Fifth Ave. & Related Props., 830 F.3d 107 (2d Cir. 2016) (abrogated on other grounds by Rubin v. Islamic Republic of Iran, 583 U.S. 202 (2018)): Judge Sullivan relies on Kirschenbaum for the Second Circuit’s prior “attributes of statehood” approach and its caution that “reliance on Executive Branch definitions” raises concerns under the FSIA’s design.
• Beierwaltes v. L'Office Federale de la Culture de la Confederation Suisse, 999 F.3d 808 (2d Cir. 2021): Invoked by Judge Sullivan to underscore that FSIA standards are applied by the judiciary; invoked by Judge Menashi to distinguish “claims of immunity” (where standards exist) from “foreign state” status (where he argues the FSIA provides none).
• OI Eur. Grp. B.V. v. Bolivarian Republic of Venezuela, 73 F.4th 157 (3d Cir. 2023): Cited by Judge Sullivan as persuasive authority warning that reverting sovereign immunity to an Executive prerogative would undermine the FSIA’s core purpose.
• Turkiye Halk Bankasi A.S. v. United States, 143 S. Ct. 940 (2023) and Opati v. Republic of Sudan, 140 S. Ct. 1601 (2020): Used by Judge Menashi for FSIA history and the proposition that Congress standardized immunity rules, without necessarily authorizing courts to contradict recognition decisions.
• Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024) and Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803): Judge Sullivan invokes them to stress the judiciary’s duty to interpret statutes; Judge Menashi cites Loper Bright to argue that sometimes the “best reading” of a statute assigns discretion elsewhere, here to the President on recognition.

2) Recognition power and political-branch primacy

• Zivotofsky ex rel. Zivotofsky v. Kerry, 576 U.S. 1 (2015): The central recognition precedent. Judge Sullivan reads it to cabin the recognition power to “formal recognition determination” while preserving broad congressional power; Judge Menashi reads it to confirm exclusive presidential authority to recognize “foreign states,” which courts may not “countermand,” even in FSIA litigation.
• United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936), Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964), and Guaranty Trust Co. v. United States, 304 U.S. 126 (1938): Judge Menashi relies on these to root recognition and sovereign status determinations in the political branches, especially the President.
• American Ins. Assn. v. Garamendi, 539 U.S. 396 (2003): Quoted via Zivotofsky for the “one voice” principle in recognition matters.
• Trump v. Hawaii, 138 S. Ct. 2392 (2018): Used by Judge Menashi analogically to argue that when statutory text supplies “no standards,” courts should not infer authority to make sensitive foreign-affairs determinations contrary to the Executive’s position.
• Fuld v. PLO, 145 S. Ct. 2090 (2025): Cited by Judge Menashi (Thomas, J., concurring) to support the concept of international-law default rules being defeasible by political-branch command and the foreign-affairs primacy of political branches.

3) TRIA and judgment enforcement for terrorism victims

• Weinstein v. Islamic Republic of Iran, 609 F.3d 43 (2d Cir. 2010): Both dissents cite Weinstein for TRIA’s broad enforcement purpose—“once and for all” enabling terrorism judgments to be enforced against “any assets available in the U.S.”—and to resist narrowing constructions not found in TRIA’s text.
• Aurelius Cap. Partners, LP v. Republic of Argentina, 584 F.3d 120 (2d Cir. 2009): Judge Sullivan cites it for the proposition that, in analogous FSIA execution contexts, courts examine conditions at the time the writ issues, bolstering a “turnover-date” approach under TRIA.

4) Time-of-status for instrumentalities and “current political realities”

• Bartlett v. Baasiri, 81 F.4th 28 (2d Cir. 2023): Judge Menashi relies on Bartlett to argue FSIA uses present tense and reflects “current political realities and relationships,” supporting his view that DAB can lose instrumentality status when captured by a non-sovereign entity and that TRIA status should likewise be assessed at the time of turnover.
• Filler v. Hanvit Bank, 378 F.3d 213 (2d Cir. 2004): Cited by Judge Menashi for the Second Circuit’s multi-factor “organ” analysis under 28 U.S.C. § 1603(b) when determining whether an entity is an “organ of a foreign state.”

5) Statutory-text methodology

• Barnhart v. Sigmon Coal Co., 534 U.S. 438 (2002) and Zuni Pub. Sch. Dist. No. 89 v. Dep't of Educ., 550 U.S. 81 (2007): Judge Sullivan cites these to criticize policy-driven departures from statutory text, particularly the panel’s TRIA timing rule.

6) District-court findings referenced

• Owens v. Taliban, No. 22-CV-1949, 2023 WL 2214887 (S.D.N.Y. Feb. 24, 2023): Quoted by Judge Menashi for factual findings that the Taliban installed officials, controlled decision-making, and altered compliance and workplace conditions—facts supporting his conclusion that DAB is not an organ of Afghanistan.

Legal Reasoning

1) The FSIA: “foreign state” and recognition

The contested interpretive move—described in Judge Sullivan’s dissent as the panel’s central error—is the panel’s rule that “[t]he Executive Branch's formal recognition of a state or government establishes [it] as a foreign state for purposes of the F[SIA].” Under this approach, once the Executive recognizes “Afghanistan” as a state, courts treat Afghanistan as a “foreign state” for FSIA purposes even where the recognized government no longer exists and a non-recognized regime exercises de facto control.

Judge Sullivan argues that this “conflated diplomatic recognition with statutory immunity in civil litigation” and improperly displaced the judiciary’s role in interpreting statutory terms—especially given the FSIA’s historical aim (as described in Verlinden B.V. v. Cent. Bank of Nigeria and Samantar v. Yousuf) to transfer immunity determinations away from case-by-case Executive involvement. On this view, the judiciary must decide whether an entity “bear[s] the attributes of statehood” (drawing on Kirschenbaum v. 650 Fifth Ave. & Related Props.) rather than treating recognition as dispositive.

Judge Menashi, by contrast, accepts the panel’s recognition-dispositive rule as necessary to avoid courts and the Executive reaching “conflicting conclusions about which states are sovereign in the first place,” contending the FSIA “provides no standards” to override a presidential recognition determination and that the Constitution commits recognition to the President (relying on Zivotofsky ex rel. Zivotofsky v. Kerry and related recognition precedents).

2) The FSIA: DAB as “agency or instrumentality”

Even accepting Afghanistan’s recognition as conclusive, the FSIA extends immunity to an “agency or instrumentality” only if statutory criteria are met. Here, the dissents converge in an important way: Judge Sullivan maintains that “DAB is an agency of the Taliban - not Afghanistan,” while Judge Menashi similarly concludes “DAB is an instrumentality of the Taliban rather than the State of Afghanistan” because Afghanistan “neither owns nor controls it.”

Judge Menashi emphasizes the FSIA’s present-tense formulation and “current political realities and relationships” (citing Bartlett v. Baasiri and Republic of Austria v. Altmann) to argue that old banking-law formalities and pre-takeover descriptions cannot establish present ownership/control. He would treat Taliban capture of the institution as severing Afghanistan’s instrumentality relationship.

3) The TRIA: timing of “agency or instrumentality” status

TRIA § 201(a) permits execution against “the blocked assets of [a] terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party).” The panel rule (as summarized by Judge Sullivan and rejected by Judge Menashi) fixes agency/instrumentality status at the time the assets were blocked.

The dissents argue this is textually and structurally incongruent with TRIA’s enforcement purpose (as articulated in Weinstein v. Islamic Republic of Iran) and inconsistent with the time-of-execution lens used in related FSIA execution contexts (citing Aurelius Cap. Partners, LP v. Republic of Argentina). They would instead assess whether the entity is an agency/instrumentality of the terrorist party at the time the turnover order is sought/issued.

Judge Menashi adds a functional critique: the panel’s rule perversely rewards earlier blocking (done to prevent terrorist access) by making assets unreachable precisely when the Executive acted quickly—an outcome he views as contrary to TRIA’s design to prevent the Executive from defeating terrorism judgment enforcement.

Impact

1) FSIA doctrine in the Second Circuit

Because rehearing en banc was denied, the panel’s recognition-centered rule for “foreign state” status remains controlling in the Second Circuit. Judge Sullivan warns this risks reintroducing an “executive-driven” dynamic the FSIA sought to eliminate, while Judge Menashi views it as essential to coherence in foreign relations and predictable immunity baselines.

2) Terrorism judgment enforcement

The TRIA timing rule—if it remains as the panel articulated it—can materially constrain terrorism victims’ ability to execute against assets whose ownership/control shifts after blocking. The dissents emphasize that modern sanctions and blocking regimes often occur at moments of rapid political change; fixing eligibility at the blocking date may, in practice, exclude assets most closely connected to the terrorist party at the moment victims seek enforcement.

3) Litigation incentives and government participation

The opinions spotlight a practical tension: if “foreign state” status turns on formal recognition without further judicial parsing (panel/menashi), courts may lean on Executive materials (e.g., a “Fact Sheet” or past letters); if not (sullivan), the Executive may face renewed pressure to file case-specific statements to protect diplomatic positions. Either approach shapes how frequently, and in what form, the United States intervenes in FSIA/TRIA disputes.

4) Possibility of further review

The sharp division—particularly the unusual alignment where Judge Menashi agrees with the panel on recognition but sides with the dissent on DAB/TRIA—suggests doctrinal instability. The dissents’ reliance on out-of-circuit authority such as OI Eur. Grp. B.V. v. Bolivarian Republic of Venezuela further signals potential for broader appellate disagreement and eventual Supreme Court attention.