Believed to be the first time U.S. citizens were awarded punitive damages against a foreign nation accused of sponsoring terrorism, the decision is expected to pave the way for similar legal action by other families of American citizens killed in terrorist attacks abroad.
Alisa Flatow, a 20-year-old Brandeis University student from West Orange, N.J., was attending a Jewish seminary in Israel when she and seven Israeli soldiers were killed by a suicide bomber who drove a van into their bus in the Gaza Strip in April 1995.
Flatow was headed for a resort in Gaza when the bus was attacked. Left with shrapnel in her brain, she lapsed into a coma from which she never awoke.
At a hearing earlier this month, the Flatow family argued that the Islamic Jihad — the fundamentalist faction that claimed responsibility for the attack — was financed by the Iranian government, and therefore Tehran bore responsibility for her death.
Lamberth agreed, saying he concluded from expert testimony that Iran had appropriated about $75 million to terrorist activities in support of the Palestinians in 1995.
He said Iran was "brazen" enough to carry a line item in its budget pertaining to sponsorship of terrorist activities.
"This is a tragic case, but you've made something of it," Lamberth told the Flatow family upon awarding them $225 million in punitive damages and $22.5 million in compensatory damages.
"This court seeks to deter further terrorist acts against Americans who may be in Israel or elsewhere," the judge said.
No Iranian representatives were present at the hearing. Iranian officials have dismissed claims that Iran is linked to terrorist groups.
In the courtroom, the decision brought gasps and a visible sense of relief to the Flatow family — Alisa's father, mother, a brother and two of her three sisters — and other spectators, including Sen. Frank Lautenberg (D-N.J.) and Rep. Jim Saxton (R-N.J.).
Lautenberg said the decision ensures that "terrorist acts against American citizens will cause some pain back in the country that sponsors that kind of terrorism.
"No nation can pick on American citizens without our country responding in some lawful but direct way," Lautenberg said, a view that was echoed by many Jewish groups that hailed the ruling.
The case was brought under an anti-terrorism measure, sponsored by Lautenberg and Saxton and signed into law in 1996, that allows U.S. citizens to file suit in U.S. courts against foreign governments for damages from terrorism.
This was the first such case brought under the anti-terrorism law.
Steven Perles, a lawyer representing the Flatow family, said the money could come either from Iranian assets in the United States frozen following the Iranian revolution in 1979 or from Iranian assets in other nations that recognize the jurisdiction of U.S. courts.
"We anticipate vigorously pursuing collection," Perles said, adding that Iran is a "wealthy country."
Flatow said the amount of the award was important because it was "significant enough that the Iranians will pay attention to it."
It is unclear whether he will be successful in actually collecting the money.
The decision came quicker than the Flatows or their lawyers imagined.
"A year and a half ago, we thought this lawsuit would have taken us 10 years, and here we are now," Flatow told reporters outside the federal courthouse, the scene of a media encampment set up to cover the Monica Lewinsky drama.
Flatow, an Orthodox Jew who decided to donate his daughter's organs to needy Israelis, said he had never sought revenge, only justice.
In an interview following the judge's ruling, he recalled meeting in May 1996 with President Clinton, whom he said marveled at his bravery.
"Would you do anything for your daughter?" he remembers asking Clinton.
"Absolutely," Clinton said.
"Well, just because my daughter is not standing here with me doesn't mean we stop," Flatow said. "We still have a responsibility to our kids, even when they're not here physically."