Facts of the case
In reaction to the seizure of the U.S. embassy and American nationals in Iran, President Jimmy Carter invoked the International Emergency Economic Powers Act (IEEPA) and froze Iranian assets in the United States. When the hostages were released in 1981, Treasury Secretary Donald Regan affirmed the agreements made the Carter administration that terminated all legal proceedings against the Iranian government and created an independent Claims Tribunal. Dames & Moore attempted to recover over $3 million owed to it by the Iranian government and claimed the executive orders were beyond the scope of presidential power.
Why is the case important?
The Supreme Court of the United States held that the President may nullify attachments and order the transfer of frozen Iranian assets pursuant to Section 1702(a)(1) of the International Emergency Economic Powers Act (“IEEPA”). Based on the Court’s inferences from legislation passed by Congress (IEEPA and the Hostage Act) regarding the President’s authority to deal with international crises and from the history of congressional acquiescence in executive claims settlement, the President may also suspend claims pursuant to the Executive Order.
Whether the President’s acts of nullifying the attachments and ordering the transfer of all frozen assets are specifically authorized by Congress.
Whether the President has authority to suspend claims pending in American courts.
Yes. An Executive Agreement has the same force and effect as a treaty and can alter the rights of the United States Citizens. The President of the United States does not have the plenary power to settle claims against foreign governments through an Executive Agreement. However, where Congress is seen to assent to the president’s action, then the president can settle such claims. Here, although what President Carter did under the IEEPA was not specifically sanctioned, Congress gave the president substantial powers to seize and handle foreign assets, so President Carter’s actions were appropriate.
The order of the President nullifying all attachments obtained on Iranian assets after the blocking order of November 14, 1979, was authorized by 1702(a)(1)(B) of the International Emergency Economic Powers Act (50 USCS 1702(a)(1)(B)), which empowers the President to compel,nullify,or prohibitany transferwith respect to, or transactions involving, any property subject to the jurisdiction of the United States, in which any foreign country has any interest, the President’s action being supported by the strongest presumption and the widest latitude of judicial interpretation, since it was taken pursuant to specific congressional authorization, and the corporation had not sustained the heavy burden of persuasion placed upon those attacking the President’s action, since the attachment obtained after the blocking order was subject to revocation and specifically made subordinate to further actions which the President might take under the Act, and (2) the order of the President suspending all claims against the government of Iran which may be presented to the Claims Tribunal and providing that such claims shall have no legal effect in any action pending in any court of the United States was within the authority of the President, since Congress had enacted legislation, such as the Economic Powers Act and the Hostage Act (22 USCS 1732), in the area of the President’s authority to deal with international crises, and since Congress had implicitly approved the longstanding practice of claims settlements by executive agreement, the President, by suspending the claims, not having circumscribed the jurisdiction of the United States courts in violation of Article III of the Constitution.
- Advocates: Thomas G. Shack, Jr. Argued the cause for intervenor-respondent Islamic Republic of Iran C. Stephen Howard Argued the cause for the petitioner Eric M. Lieberman Argued the cause for intervenor-respondent Bank Markazi Iran Rex E. Lee Argued the cause for the the federal respondents
- Petitioner: Dames & Moore
- Respondent: Regan
- DECIDED BY:Burger Court
- Location: Dames & Moore
|Citation:||453 US 654 (1981)|
|Argued:||Jun 24, 1981|
|Decided:||Jul 2, 1981|