Dames & Moore v. Regan

Brief Fact Summary. 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.

Synopsis of Rule of Law. Where Congress has a history of acquiescence, as with claims settlement, it thereby implicitly approves of the President’s actions regarding that specific subject matter about which Congress was silent.

Facts. In response to the seizure of American personnel as hostages at the American Embassy in Iran, the President issued various Executive Orders and regulations by which the President nullified attachments and liens on Iranian assets in the United States, directed that theses assets be transferred to Iran, and suspended claims against Iran that may be presented to an International Claims Tribunal. On December 19, 1979, Petitioner, Dames & Moore, filed suit in the United Sates District Court against Defendants, the government of Iran, the Atomic Energy Organization of Iran, and many Iranian banks, alleging that its subsidiary was a party to a contract with the Atomic Energy Organization and that the subsidiary’s interest had been assigned to Petitioner. Petitioner alleged it was owed over 3 million dollars. The District Court issued orders of attachment directed against the Defendants’ property and the property of certain Iranian banks. In a January 20, 1981 Executive Agreement, the
President agreed to nullify attachments and ordered the transfer of frozen Iranian assets. On February 24, 1981, the President ratified an earlier Order wherein 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 U.S. courts.”

Issue. 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.

Held. Yes. Because the President’s actions in nullifying the attachments and ordering the transfer of assets were taken pursuant to congressional authorization (Section 1702 (a)(1) of IEEPA), it is “supported by the strongest of presumptions and widest latitude of judicial interpretation and the burden of persuasion rests heavily on any who might attack it.”
Yes. Based on the legislation (IEEPA and the Hostage Act) which Congress has enacted in the area of the President’s authority to deal with international crises, and from the history of congressional acquiescence in executive claims settlement, the President was authorized to suspend claims pursuant to the Executive Order

Discussion. The majority resorts to drawing inferences from Congress’ legislation to conclude that the President has authority to suspend claims in American Courts.