Dames & Moore v. Regan

PETITIONER: Dames & Moore
LOCATION: Dames & Moore

DOCKET NO.: 80-2078
DECIDED BY: Burger Court (1975-1981)

CITATION: 453 US 654 (1981)
ARGUED: Jun 24, 1981
DECIDED: Jul 02, 1981

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
Thomas G. Shack, Jr. - Argued the cause for intervenor-respondent Islamic Republic of Iran

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.


Did the president have the authority to transfer Iranian funds and to nullify legal claims against Iran?

Media for Dames & Moore v. Regan

Audio Transcription for Oral Argument - June 24, 1981 in Dames & Moore v. Regan

Warren E. Burger:

We will hear arguments this morning in No. 80-2078, Dames & Moore v. The Secretary of the Treasury.

Mr. Howard, you may proceed whenever you're ready.

C. Stephen Howard:

Mr. Chief Justice, and may it please the Court:

I've asked the Marshal to divide my time to 40 minutes opening and 20 minutes rebuttal.

We are here to review two orders of a federal district court denying a motion for a preliminary injunction in granting a motion to dismiss for failure to state a claim for relief.

We are here on an uncontested factual record.

The Government did not put in any factual opposition or evidence and by its motion under Rule 12(b)(6) conceded the facts as pled.

The suit below relates to an earlier lawsuit that was filed by the Petitioner, Dames & Moore, against the State of Iran, an agency of the government called the Atomic Energy Organization of Iran and several Iranian banks that I will refer to as the bank defendants.

In that lawsuit the facts of which are pled in the complaint below, the Petitioner obtained attachment orders from the United States district court.

Those attachment orders were served on third parties and property of various of the bank defendants was thereby attached as security for any--

Potter Stewart:

What was the basis of the federal district court jurisdiction, Mr. Howard?

C. Stephen Howard:

--The federal district court jurisdiction was premised on 28 USC Section 1330, and the provisions of the Foreign Sovereign Immunities Act, in particular Section 1605, the section that deals with whether or not certain states are immune from suit and sets out the grounds therein.

Section 1330 provides that if a state is not immune from suit and is otherwise served in accordance with the provisions of those sections, that personal jurisdiction and subject matter jurisdiction are automatically conveyed upon the federal district court.

Potter Stewart:

So that it is not based upon diversity of citizenship?

C. Stephen Howard:

It was not.

The diversity section was alleged in the jurisdictional allegation in that complaint and, frankly, it's a mistake.

But the appropriate section was also alleged and that is the only section on which we claimed jurisdiction in that lawsuit.

William H. Rehnquist:

Mr. Howard, your lawsuit was not commenced until after the seizure of the hostages by Iran, was it?

C. Stephen Howard:

That is correct, that is correct.

There were some negotiations between the parties prior to that event and those negotiations were not successful.

They occurred in about September and October, if I recall correctly.

The hostages were seized in early November and the lawsuit was filed in mid-December.

William H. Rehnquist:

Was that after the blocking order?

C. Stephen Howard:

It was after the blocking order; yes.

In that lawsuit, in February of 1981, after extensive litigation below the Petitioner obtained a separate judgment against two of the defendants, the State of Iran, and the Atomic Energy Organization, and separate judgment was entered pursuant to Federal Rule of Civil Procedure 54(b).

The lawsuit went on with respect to the bank defendants.

The Petitioner commenced efforts to levy on its judgment on certain Iranian property in the State of Washington.

And the case stood in that posture when Petitioner filed the lawsuit that is now before the Court.

That lawsuit was filed in reaction to the Algerian Declarations, which the Court would be familiar with, and the executive orders that were promulgated to enforce, carry out those Declarations.

In the Declarations, which were entered into on January 19, 1981, the President agreed... and I would stress, the President, with no participation by the Congress... we're not talking about a treaty, we're not talking about an act of Congress.