Dames & Moore v. Regan (1981)

Dames & Moore v. Regan (1981)

453 U.S. 654

In response to the seizure of the U.S. Embassy in Tehran, Iran, President Carter declared a national emergency. Under the International Emergency Economic Powers Act (IEEPA), he blocked the removal or transfer of all property within the United States owned by the Iranian government. Dames & Moore won a lawsuit in federal court against Iran for breaking contracts made under the pre-revolutionary regime for work related to site studies for a proposed nuclear power plant in Iran. The court attached Iranian bank assets frozen under the IEEPA to satisfy the judgment. In January 1981, Iran agreed to release the American hostages in exchange for a termination of all proceedings against Iran in U.S. courts and the nullification of all attachments and judgments. The agreement required the U.S. to transfer frozen Iranian assets to a new claims tribunal established at the Hague, which would adjudicate claims. Dames & Moore sued on the ground that these orders were beyond the statutory and constitutional authority of the President.

Opinion of the Court: Rehnquist, Burger, Brennan, Stewart, White, Marshall, Blackmun, Powell, Stevens (in part).

Opinion concurring in part: Powell.

Opinion concurring in part and dissenting in part: Stevens.

JUSTICE REHNQUIST delivered the opinion of the Court.

The questions presented by this case touch fundamentally upon the manner in which our Republic is to be governed. Throughout the nearly two centuries of our Nation’s existence under the Constitution, this subject has generated considerable debate. We have had the benefit of commentators such as John Jay, Alexander Hamilton, and James Madison writing in The Federalist Papers at the Nation’s very inception, the benefit of astute foreign observers of our system such as Alexis de Tocqueville and James Bryce writing during the first century of the Nation’s existence, and the benefit of many other treatises as well as more than 400 volumes of reports of decisions of this Court. As these writings reveal it is doubtless both futile and perhaps dangerous to find any epigrammatical explanation of how this country has been governed. Indeed, as Justice Jackson noted, “[a] judge … may be surprised at the poverty of really useful and unambiguous authority applicable to concrete problems of executive power as they actually present themselves.”

Our decision today will not dramatically alter this situation, for the Framers “did not make the judiciary the overseer of our government.” We are confined to a resolution of the dispute presented to us. That dispute involves various Executive Orders and regulations by which the President nullified attachments and liens on Iranian assets in the United States, directed that these assets be transferred to Iran, and suspended claims against Iran that may be presented to an International Claims Tribunal. This action was taken in an effort to comply with an Executive Agreement between the United States and Iran. . . .

But before turning to the facts and law which we believe determine the result in this case, we stress that the expeditious treatment of the issues involved by all of the courts which have considered the President’s actions makes us acutely aware of the necessity to rest decision on the narrowest possible ground capable of deciding the case. This does not mean that reasoned analysis may give way to judicial fiat. It does mean that the statement of Justice Jackson—that we decide difficult cases presented to us by virtue of our commissions, not our competence—is especially true here. We attempt to lay down no general “guidelines” covering other situations not involved here, and attempt to confine the opinion only to the very questions necessary to decision of the case. . . .

I

On November 4, 1979, the American Embassy in Tehran was seized and our diplomatic personnel were captured and held hostage. In response to that crisis, President Carter, acting pursuant to the International Emergency Economic Powers Act (hereinafter IEEPA), declared a national emergency on November 14, 1979, and blocked the removal or transfer of “all property and interests in property of the Government of Iran, its instrumentalities and controlled entities and the Central Bank of Iran which are or become subject to the jurisdiction of the United States….” . . .

On December 19, 1979, petitioner Dames & Moore filed suit in the United States District Court for the Central District of California against the Government of Iran, the Atomic Energy Organization of Iran, and a number of Iranian banks. . . . Petitioner contended . . . that it was owed $3,436,694.30 plus interest for services performed under the contract prior to the date of termination. The District Court issued orders of attachment directed against property of the defendants, and the property of certain Iranian banks was then attached to secure any judgment that might be entered against them.

On January 20, 1981, the Americans held hostage were released by Iran pursuant to an Agreement entered into the day before and embodied in [the Algiers Accords]. . . . The Agreement stated that “[i]t is the purpose of [the United States and Iran] … to terminate all litigation as between the Government of each party and the nationals of the other, and to bring about the settlement and termination of all such claims through binding arbitration.” . . . In furtherance of this goal, the Agreement called for the establishment of an Iran-United States Claims Tribunal which would arbitrate any claims not settled within six months. Under the Agreement, the United States is obligated “to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration.”

On January 19, 1981, President Carter issued a series of Executive Orders implementing the terms of the agreement. . . . On February 24, 1981, President Reagan issued an Executive Order in which he “ratified” the January 19th Executive Orders. Exec. Moreover, he “suspended” all “claims which may be presented to the … Tribunal” and provided that such claims “shall have no legal effect in any action now pending in any court of the United States.” . . .

Meanwhile, on January 27, 1981, petitioner moved for summary judgment in the District Court against the Government of Iran and the Atomic Energy Organization, but not against the Iranian banks. The District Court granted petitioner’s motion and awarded petitioner the amount claimed under the contract plus interest. . . . However, by order of May 28, 1981, as amended by order of June 8, the District Court stayed execution of its judgment pending appeal by the Government of Iran and the Atomic Energy Organization. The District Court also ordered that all prejudgment attachments obtained against the Iranian defendants be vacated and that further proceedings against the bank defendants be stayed in light of the Executive Orders discussed above. . . .

II

The parties and the lower courts, confronted with the instant questions, have all agreed that much relevant analysis is contained in Youngstown Sheet & Tube Co. v. Sawyer (1952). Justice Black’s opinion for the Court in that case, involving the validity of President Truman’s effort to seize the country’s steel mills in the wake of a nationwide strike, recognized that “[t]he President’s power, if any, to issue the order must stem either from an act of Congress or from the Constitution itself.” Justice Jackson’s concurring opinion elaborated in a general way the consequences of different types of interaction between the two democratic branches in assessing Presidential authority to act in any given case. When the President acts pursuant to an express or implied authorization from Congress, he exercises not only his powers but also those delegated by Congress. In such a case the executive action “would be supported by the strongest of presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily upon any who might attack it.” When the President acts in the absence of congressional authorization he may enter “a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain.” In such a case the analysis becomes more complicated, and the validity of the President’s action, at least so far as separation-of-powers principles are concerned, hinges on a consideration of all the circumstances which might shed light on the views of the Legislative Branch toward such action, including “congressional inertia, indifference or quiescence.” Finally, when the President acts in contravention of the will of Congress, “his power is at its lowest ebb,” and the Court can sustain his actions “only by disabling the Congress from acting upon the subject.

Although we have in the past found and do today find Justice Jackson’s classification of executive actions into three general categories analytically useful, we should be mindful of Justice Holmes’ admonition, quoted by Justice Frankfurter in Youngstown, that “[t]he great ordinances of the Constitution do not establish and divide fields of black and white.” Justice Jackson himself recognized that his three categories represented “a somewhat over-simplified grouping,” and it is doubtless the case that executive action in any particular instance falls, not neatly in one of three pigeonholes, but rather at some point along a spectrum running from explicit congressional authorization to explicit congressional prohibition. This is particularly true as respects cases such as the one before us, involving responses to international crises the nature of which Congress can hardly have been expected to anticipate in any detail.

III

. . . [IEEPA] provides in part:

“At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—

“(A) investigate, regulate, or prohibit—

“(i) any transactions in foreign exchange,

“(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,

“(iii) the importing or exporting of currency or securities, and

“(B) investigate, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest;

“by any person, or with respect to any property, subject to the jurisdiction of the United States.”

The Government contends that the acts of “nullifying” the attachments and ordering the “transfer” of the frozen assets are specifically authorized by the plain language of the above statute. . . .

Petitioner contends that we should ignore the plain language of this statute because an examination of its legislative history as well as the history of the Trading With the Enemy Act (hereinafter TWEA), from which the pertinent language of [IEEPA] is directly drawn, reveals that the statute was not intended to give the President such extensive power over the assets of a foreign state during times of national emergency.

We do not agree and refuse to read out of [IEEPA] all meaning to the words “transfer,” “compel,” or “nullify.” Nothing in the legislative history of [IEEPA] or the TWEA requires such a result. To the contrary, we think both the legislative history and cases interpreting the TWEA fully sustain the broad authority of the Executive when acting under this congressional grant of power. Although Congress intended to limit the President’s emergency power in peacetime, we do not think the changes brought about by the enactment of the IEEPA in any way affected the authority of the President to take the specific actions taken here. . . .

Because the President’s action in nullifying the attachments and ordering the transfer of the assets was taken pursuant to specific congressional authorization, it is “supported by the strongest of presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily upon any who might attack it.” Under the circumstances of this case, we cannot say that petitioner has sustained that heavy burden. A contrary ruling would mean that the Federal Government as a whole lacked the power exercised by the President, and that we are not prepared to say.

IV

Although we have concluded that the IEEPA constitutes specific congressional authorization to the President to nullify the attachments and order the transfer of Iranian assets, there remains the question of the President’s authority to suspend claims pending in American courts. Such claims have, of course, an existence apart from the attachments which accompanied them. In terminating these claims the President purported to act under authority of both the IEEPA and the so-called “Hostage Act.”

We conclude that although the IEEPA authorized the nullification of the attachments, it cannot be read to authorize the suspension of the claims. The claims of American citizens against Iran are not in themselves transactions involving Iranian property or efforts to exercise any rights with respect to such property. An in personam lawsuit, although it might eventually be reduced to judgment and that judgment might be executed upon, is an effort to establish liability and fix damages and does not focus on any particular property within the jurisdiction. The terms of the IEEPA therefore do not authorize the President to suspend claims in American courts. This is the view of all the courts which have considered the question.

The Hostage Act, passed in 1868, provides:

“Whenever it is made known to the President that any citizen of the United States has been unjustly deprived of his liberty by or under the authority of any foreign government, it shall be the duty of the President forthwith to demand of that government the reasons of such imprisonment; and if it appears to be wrongful and in violation of the rights of American citizenship, the President shall forthwith demand the release of such citizen, and if the release so demanded is unreasonably delayed or refused, the President shall use such means, not amounting to acts of war, as he may think necessary and proper to obtain or effectuate the release; and all the facts and proceedings relative thereto shall as soon as practicable be communicated by the President to Congress.”

We are reluctant to conclude that this provision constitutes specific authorization to the President to suspend claims in American courts. . . .

Concluding that neither the IEEPA nor the Hostage Act constitutes specific authorization of the President’s action suspending claims, however, is not to say that these statutory provisions are entirely irrelevant to the question of the validity of the President’s action. We think both statutes highly relevant in the looser sense of indicating congressional acceptance of a broad scope for executive action in circumstances such as those presented in this case. IEEPA delegates broad authority to the President to act in times of national emergency with respect to property of a foreign country. The Hostage Act similarly indicates congressional willingness that the President have broad discretion when responding to the hostile acts of foreign sovereigns. . . .

Although we have declined to conclude that the IEEPA or the Hostage Act directly authorizes the President’s suspension of claims for the reasons noted, we cannot ignore the general tenor of Congress’ legislation in this area in trying to determine whether the President is acting alone or at least with the acceptance of Congress. As we have noted, Congress cannot anticipate and legislate with regard to every possible action the President may find it necessary to take or every possible situation in which he might act. Such failure of Congress specifically to delegate authority does not, “especially … in the areas of foreign policy and national security,” imply “congressional disapproval” of action taken by the Executive. On the contrary, the enactment of legislation closely related to the question of the President’s authority in a particular case which evinces legislative intent to accord the President broad discretion may be considered to “invite” “measures on independent presidential responsibility.” At least this is so where there is no contrary indication of legislative intent and when, as here, there is a history of congressional acquiescence in conduct of the sort engaged in by the President. . . .

Crucial to our decision today is the conclusion that Congress has implicitly approved the practice of claim settlement by executive agreement. This is best demonstrated by Congress’ enactment of the International Claims Settlement Act of 1949. . . . Congress created the International Claims Commission, now the Foreign Claims Settlement Commission, and gave it jurisdiction to make final and binding decisions with respect to claims by United States nationals against settlement funds. By creating a procedure to implement future settlement agreements, Congress placed its stamp of approval on such agreements. . . .

Over the years Congress has frequently amended the International Claims Settlement Act to provide for particular problems arising out of settlement agreements, thus demonstrating Congress’ continuing acceptance of the President’s claim settlement authority. . . .

In addition to congressional acquiescence in the President’s power to settle claims, prior cases of this Court have also recognized that the President does have some measure of power to enter into executive agreements without obtaining the advice and consent of the Senate. In United States v. Pink (1942), for example, the Court upheld the validity of the Litvinov Assignment, which was part of an Executive Agreement whereby the Soviet Union assigned to the United States amounts owed to it by American nationals so that outstanding claims of other American nationals could be paid. The Court explained that the resolution of such claims was integrally connected with normalizing United States’ relations with a foreign state. . . .

In light of all of the foregoing—the inferences to be drawn from the character of the legislation Congress has enacted in the area, such as the IEEPA and the Hostage Act, and from the history of acquiescence in executive claims settlement—we conclude that the President was authorized to suspend pending claims. . . . As Justice Frankfurter pointed out in Youngstown, “a systematic, unbroken, executive practice, long pursued to the knowledge of the Congress and never before questioned … may be treated as a gloss on ‘Executive Power’ vested in the President by § 1 of Art. II.” Past practice does not, by itself, create power, but “long-continued practice, known to and acquiesced in by Congress, would raise a presumption that the [action] had been [taken] in pursuance of its consent.” Such practice is present here and such a presumption is also appropriate. In light of the fact that Congress may be considered to have consented to the President’s action in suspending claims, we cannot say that action exceeded the President’s powers. . . .

Just as importantly, Congress has not disapproved of the action taken here. Though Congress has held hearings on the Iranian Agreement itself, Congress has not enacted legislation, or even passed a resolution, indicating its displeasure with the Agreement. Quite the contrary, the relevant Senate Committee has stated that the establishment of the Tribunal is “of vital importance to the United States.” We are thus clearly not confronted with a situation in which Congress has in some way resisted the exercise of Presidential authority. . . .