Dames & Moore v. Regan

IEEPA broadly permits the President, during a declared national emergency, to regulate or prohibit dealings in foreign property and to “direct and compel,” “nullify,” or “void” rights and transactions involving property in which a foreign country has an interest. The Court declined to read those terms as authorizing only a temporary freeze. Their ordinary meaning covered the nullification of attachments and the ordered transfer of blocked Iranian funds.

The statutory history of IEEPA and its predecessor, the Trading With the Enemy Act, did not undermine this reading. Although IEEPA did not grant the President authority to vest title to foreign property in the United States, the President did not need a vesting power to direct the assets' transfer under the statute's separate authority to compel transfers and nullify interests.

Dames & Moore acquired its attachments only after the Government had frozen the assets and issued licenses that expressly could be amended, modified, or revoked. The attachments were therefore contingent and subordinate to later presidential action under IEEPA; the claimant could not use them to remove assets from the President's control.

The blocking power exists in part to preserve foreign assets as a bargaining resource in resolving an international emergency. Allowing individual creditors to lock up those assets through attachments would substantially defeat that congressional purpose. Because the President acted with express statutory authorization, his action fell within the strongest category of executive authority under Justice Jackson's Youngstown framework.

IEEPA concerns transactions involving foreign property and rights exercised with respect to that property. A suit seeking to establish Iran's personal liability and damages is not itself a transaction involving identified Iranian property, even if a resulting judgment might later be enforced against property. Thus, IEEPA authorized nullification of attachments but not suspension of the underlying in personam claims.

The Hostage Act broadly empowers the President to use nonwar measures he considers necessary to obtain the release of unjustly detained Americans. But its history concerned foreign states that denied the citizenship of naturalized Americans abroad, and it did not clearly show that Congress meant to authorize the President to suspend private claims in domestic courts. The Court therefore declined to treat the Act as direct statutory authorization for this particular action.

The Court treated the IEEPA and Hostage Act as highly relevant evidence that Congress accepted broad executive discretion in responding to foreign emergencies, even though neither statute directly authorized the claims suspension. Under Youngstown, related legislation that invites executive measures, coupled with no contrary legislative indication, may support action taken on the President's independent responsibility.

For generations, Presidents had settled American nationals' claims against foreign governments through executive agreements, sometimes without the claimants' consent. Congress had repeatedly recognized and implemented that practice through the International Claims Settlement Act and later amendments that created procedures for distributing funds obtained through present and future executive settlements.

Congress had not silently displaced this settlement authority by enacting the Foreign Sovereign Immunities Act. That statute codified rules governing sovereign immunity and moved immunity determinations from the Executive to the courts; it did not prohibit the President from settling claims. Congress had rejected proposals to broadly limit executive agreements, and IEEPA's legislative history expressly stated that it was not meant to impede settlements of Americans' claims against foreign countries.

The executive order did not strip federal courts of Article III jurisdiction. It suspended covered claims and altered the substantive rule governing them; claims outside the Tribunal's jurisdiction could revive in federal court. The Court distinguished this from a statute or order that removed jurisdiction altogether.

The Algiers Accords supplied a real settlement mechanism: the Iran-United States Claims Tribunal could grant binding awards, and a security fund was created to pay them. Congress had not disapproved the agreement and had instead indicated that the Tribunal was important to the United States. The Court emphasized that it was not recognizing a plenary presidential power to settle claims, but only authority in this major foreign-policy settlement, against a history of congressional acquiescence.

Whether Dames & Moore would suffer a taking depended on uncertain future events, including whether the Claims Tribunal would adjudicate the claim and whether it would provide recovery. The Court therefore did not decide whether the suspension itself amounted to a Fifth Amendment taking.

A potentially affected claimant must nevertheless have a reasonable, certain, and adequate compensation remedy at the time of the alleged taking. The Government conceded, and the Court agreed, that the treaty-related limitation on Court of Claims jurisdiction would not bar a Tucker Act action alleging that the United States had taken property through its handling of the Iranian claims.

The Court separately concluded that nullifying the attachments did not take compensable property. Because the attachments existed only under revocable licenses and were expressly subordinate to presidential action under IEEPA, Dames & Moore had no property interest of the kind protected by the Just Compensation Clause.