By Natalie Rodriguez
(Law360, New York)
In the latest turn in a New York federal court suit over the sale of Iran's interest in a federally seized Manhattan tower, a family that was recently denied a request to intervene in the action filed an interlocutory appeal on Tuesday, contending that they should have an equal opportunity at taking a bite out of the proceeds.
Jeremy Levin, who was kidnapped in 1984 by terrorists allegedly funded by Iran, and Lucille Levin transmitted the notice to the U.S. Court of Appeals after having a motion to intervene denied by U.S. District Judge Katherine B. Forrest. In that denial, the judge called the Levins' motion untimely and argued that the court lacked the jurisdiction to entertain the request since the case over 650 Fifth Avenue is currently on appeal before the Second Circuit and it would be wrong for the family to jump in while that appeal is pending.
The Levins, however, argue that it is wrong that 650 Fifth Avenue's existing summary judgment creditors can take a piece of the forfeited funds and that the Levins are left out because they allegedly did not get proper notice about the opportunity to join in several years ago. The Levins hold a $28.8 million judgment against the Islamic Republic of Iran, the Iranian Ministry of Information and Security and the Iranian Islamic Revolutionary Guard Corps, according to court documents.
“The seizure of Iranian funds by the government is premised on the idea that it will fairly distribute them to all victims with valid claims. The government will have to explain to the Second Circuit why it is denying the Levins, who without question are victims of Iranian terrorism, any share whatsoever of this forfeiture fund. Equals should be treated equally,” Suzelle Smith of Howarth & Smith, an attorney for the Levins, told Law360.
Judge Forrest, however, has argued that it would be wrong to let the Levins in at this stage in the suit.
“If the court grants the motion to intervene, the Levins would have standing to participate in the appeal and could disrupt the appellate proceedings, which have been ongoing for nine months,” the judge said on March 12, denying the Levins' motion.
Forrest went on to add, however, that even if the court had jurisdiction, the Levins' motion must be denied for the same reasons why she denied a similar motion by Akbir Associates LLC in 2014 — namely that the family is too late to the table given that the suit is six years in and that the court granted summary judgment to existing judgment-creditor plaintiffs about a year ago.
The judge has argued that it would be unfair to existing parties in the 650 Fifth Avenue case, who have already entered into a settlement for the funds.
In February, U.S. Department of Justice attorneys argued that the Levins' motion to intervene should be denied for untimeliness, the potential prejudice to current plaintiffs and failure to show a legally protectable interest.
The government also blasted the Levins’ argument that it had failed to properly notify them that they were potential claimants to the suit, noting that the published notice allowed vigilant parties with an interest to intervene and that more than a dozen judgment creditor claimants were able to do so.
“The Levins, like the judgment-creditor plaintiffs in this action, were entitled to notice by publication and no more,” Judge Forrest said in her March 12 order denying the motion to intervene.
The Levins are represented by Suzelle M. Smith and Don Howarth of Howarth & Smith.
The case is In re: 650 Fifth Avenue and Related Properties, case number 1:08-cv-10934-KBF, in the U.S. District Court for the Southern District of New York.