Dames & Moore v. Regan

Brief Fact Summary.

The 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.

Synopsis of Rule of Law.

Where Congress has implicitly or expressly authorized or approved the practice of claim settlement by the President, the President may suspend cases.

Facts.

In 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, declared a national emergency and blocked the removal or transfer of all property of Iran to the United States. Petitioner Dames and Moor sued the Government of Iran claiming that it owed money for services performed under the contract with Iranian government. In 1981, the American hostages were released by Iran pursuant to an agreement stating that the United States is to terminate all legal proceedings in the U.S courts involving claims of U.S persons against Iran to nullify all attachments and judgments. President Regan suspended all claims pursuant to the agreement between the U.S and Iran.

Issue.

Can the President order to terminate all legal proceedings in the U.S courts involving claims of U.S persons against Iran to nullify all attachments and judgments?

Held.

Yes, 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 authority. Where there is no contrary indication of legislative intent as here and when there is a history of congressional acquiescence in conduct of the sort engaged in by the President, the President shall be deemed to have the power to suspend cases.

Concurrence.

Justice Powell

The nullification of the attachments did not effect a taking of property interests giving rise to claims for just compensation by the petitioners. The nullification of attachments presents a separate question from whether the suspension and proposed settlement of claims against Iran may constitute a taking.

Discussion.

Congress has also 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. The Act has two purposes: to allocate to U.S nationals funds received in the course of an executive claims settlement with Yugoslavia; to provide a procedure whereby funds resulting from future settlements could be distributed. In addition to congressional acquiescence in the President’s power to settle claims, the Court’s prior cases recognized that the President does not have some measure of power to enter into executive agreements without obtaining the advice and consent of the Senate. The President has not attempted to divest the federal courts of jurisdiction, because the executive order purports only to suspend the claims, not divest the federal court of jurisdiction.