A federal appeals court yesterday made it more difficult for American victims of terrorism to sue and collect damages from foreign governments for sponsoring the attacks. Ruling in a case brought by the family of a Pennsylvania man taken hostage in Lebanon, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said Congress never authorized such multimillion-dollar suits against foreign governments for financing or aiding terrorists.

The panel said, Congress agreed U.S. citizens should have a chance to recover something for their pain and suffering by allowing them to sue the agents and officers of those foreign states.

The judges agreed with a lower court judge — and State Department lawyers — that Joseph Cicippio’s siblings and children could not sue Iran for supporting the Islamic extremist organization Hezbollah, or Party of God, which held Cicippio captive for 1,908 days.

The decision immediately cast doubt on the fate of a series of cases in which victims have won judgments against foreign governments but have not been paid from frozen foreign assets, as well as two dozen similar lawsuits pending in Washington’s federal court. Most of the suits are claims against Iran and Libya for supporting terrorist networks.

Experts differed on how much higher the appellate panel had raised the bar for terrorism victims.

Some lawyers predicted the decision could derail multimillion-dollar judgments ordered but not yet paid, and halt future and pending cases in their tracks. They said that for some victims, there may not be another legal avenue to sue terrorist sponsors other than the provision in the 1976 law that is at the center of the dispute, the Foreign Sovereign Immunities Act.

“It casts a whole new light on all these cases,” said John McDermott, the attorney in a number of cases against Libya and Iran. He said he is analyzing the legal actions to determine whether he must amend them and whether he can. “It is going to be a substantial hurdle.”

Steven Perles, who represents several victims groups, including the wives and children of servicemen killed in the 1983 bombing of the Marine Corps barracks in Beirut who are now suing Iran, said the decision undermines Congress’s attempt to deter governments from funding terrorism by making it hugely expensive.

“The Department of State and Department of Justice got exactly what they asked for from the court,” Perles said. “They’ve not only deprived victims of a remedy, but they’ve deprived the president of an important tool in his war on terrorism.”

But Stuart Newberger, who represents the largest number of victims who have filed such suits in the Washington court, said the ruling will require victims to be more specific in their claims, rather than follow a recent trend of making vague assertions about a foreign state’s responsibility.

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