Brief Fact Summary.
Through executive order, the President suspended legal claims between the government of the United States and Iranian nationals, and the government of Iran and American nationals. He also nullified attachments and judgments in legal proceedings in American courts involving claims of American nationals against Iran and its state enterprises, and ordered the transfer of all Iranian assets held in American banks.
Synopsis of Rule of Law.
Congressional consent to an executive action does not have to be explicit, and can instead be surmised from the character of Congress’ legislation, and Congress’ historical practices. Under this rule, Congress consented to the President’s suspension of legal claims between the governments of Iran and the United States and the nationals of the other country.
The President has exercised the power, acquiesced in by Congress, to settle claims and, as such, has simply effected a change in the substantive law governing the lawsuit.View Full Point of Law
On November 15, 1979, the Treasury Department issued a regulation nullifying attachments of any properties in which Iran had an interest. On December 19, 1979, Dames & Moore sued the Government of Iran and other entities for $3,436,694.30 plus interest for services performed under contract. The District Court issued orders of attachment.
On January 20, 1981, Iran released American hostages pursuant to an Executive Agreement between Iran and America. The agreement called for the termination of litigation between the government of the United States and Iranian nationals, and the government of Iran and American nationals. It also called for the establishment of a claims tribunal to arbitrate the claims. President Carter also issued executive orders establishing the terms of the agreement. The agreement also required the United States to nullify attachments and judgments obtained in legal proceedings in American courts involving claims of American nationals and institutions against Iran and its state enterprises, and to transfer all Iranian assets held in American banks.
On February 24, President Reagan issued an executive order ratifying President Carter’s executive orders. President Reagan also suspended all claims that may be presented to the claims tribunal, and established that those claims would have no legal effect in any actions pending in American courts.