The opinion of the court was delivered by: Harold Baer, Jr., District Judge
Plaintiffs move to enjoin the disbursement of funds in an account administered by the Secretary of the Treasury from which plaintiffs seek to satisfy a judgment they obtained. Defendants cross-move for summary judgment. The law gives the Court little choice in how it must decide this matter, and the timing of the decision, dictated by the exigencies of the litigation, is even more unfortunate. For the following reasons, plaintiffs' motion is DENIED and defendants' cross-motion is GRANTED.
Plaintiff Raymond Anthony Smith is the half-brother and the administrator of the estate of George Eric Smith, who was killed in the World Trade Center on September 11, 2001. Plaintiff Katherine Soulas is the wife and the executrix of the estate of Timothy Soulas, who was also killed in that tragedy. Raymond Anthony Smith and Katherine Soulas (collectively "plaintiffs") brought suit against several parties, including the Republic of Iraq pursuant to Section § 1605 of the Foreign Sovereign Immunities Act ("FSIA"). See Smith ex rel. Smith v. [ Page 2]
Islamic Emirate of Afghanistan, 262 F. Supp.2d 217, 226 (S.D.N.Y. 2003). On May 7, 2003, this Court concluded that Iraq was liable to the plaintiffs for damages of $63,504,063.19. See id. at 240-41. Judgment was entered on May 23, 2003.
On July 30, 2003, plaintiffs instituted the instant lawsuit in. which they seek a declaratory judgment that they are entitled to and may attach certain assets of the former Republic of Iraq that were frozen by the United States at the start of the first Gulf War in 1990 and that are currently held in a "Special Purposes Account" by the Federal Reserve Bank of New York ("FRBNY") — On the basis that the U.S. Government contends that it intended imminently to transfer those funds to Iraq for reconstruction purposes, plaintiffs moved by order to show cause on July 30, 2003 for a temporary restraining order and a preliminary injunction to prevent the FRBNY from transferring funds out of this account.*fn1 A hearing on the preliminary injunction came on before Judge Daniels on August 5, 2003. Judge Daniels denied the preliminary injunction without prejudice and permitted plaintiffs to further develop the record and to renew their motion before me,*fn2 which plaintiffs did. The parties submitted new briefs and this Court heard oral argument on September 3, 2003.
B. Standard for a preliminary injunction
Plaintiffs are entitled to a preliminary injunction if they show 1) a likelihood that they will suffer irreparable harm if an injunction does not issue, and 2) either a) likelihood of success on the merits or b) sufficient serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in their favor. See, e.g., Federal Exp. Corp. v. Federal Espresso. Inc., 201 F.3d 168, 173 (2d Cir. 2000). In their briefs and at the hearing, the parties largely presumed the likelihood-of-irreparable-harm prong. Although preliminary injunctions are generally denied when only monetary damages are at stake, this case [ Page 3]
presents an exceptional situation where plaintiffs face a likelihood of irreparable harm if an injunction does not issue. If the funds from this Special Purpose' Account are disbursed to Iraq, plaintiffs may be deprived of their sole available source for satisfying their judgment. Instead, the parties primarily dispute the merits of the matter. At the oral argument on September 3, 2003, the parties agreed that this matter was ripe for a final resolution on the merits, as the dispute solely concerns statutory and constitutional interpretation. See Fed.R.Civ.P. 65(a)(2) ("Before or after the commencement of the hearing of an application for a preliminary Injunction, the court may order the trial of the action on the merits to be advanced and consolidated with the hearing of the application.").
Plaintiffs contend that they are entitled to satisfy their judgment from the fiinds in this Special Purpose Account pursuant to the Terrorism Risk Insurance Act ("TRIA"), which Congress enacted in November 2002 and which permits persons holding compensatory awards against a "terrorist party" to satisfy their claims from the "blocked assets" of the terrorist party. Defendants contend that each of two independent actions taken by President Bush placed the zissets of the Special Purpose Account beyond the reach of the TRIA and too beyond the reach of these plaintiffs.*fn3 Thus, the resolution of this matter requires an analysis of the TRIA as well as the executive actions taken by President Bush and the statutes upon which those actions were taken. [ Page 4]
A. The Terrorism Risk Insurance Act
Section 201(a) of the TRIA ...