Brief Fact Summary. The President of the United States, Jimmy Carter (President Carter), ordered the dismissal of pending litigation against the government of Iran in United States Courts and forced the claims into arbitration pursuant to an “executive agreement.”
Synopsis of Rule of Law. The President of the United States has the power to settle claims by United States Citizens against foreign governments, even without the consent of the United States Citizens whose claims are being compromised.
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.View Full Point of Law
Issue. Does the President of the United States have authority to settle claims of United States citizens brought against foreign nations?
Held. 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.
Discussion. The President of the United States does have the right to terminate legal proceedings and settle claims of United States Citizens against foreign governments. In this country’s history, there has been a longstanding practice of settling such claims by executive agreement without the advice and consent of the Senate. In 1949, in fact, Congress created a procedure to implement future settlement agreements. The Supreme Court of the United States’ decision was narrow in that the President of the United States does not necessarily possess plenary power to settle claims. However, the President of the United States does have the power to settle claims where, as in this case, settlement was necessary to resolve a major foreign policy dispute and Congress has acquiesced in the President’s actions.