Dames & Moore v. Regan, 453 U.S. 654 

Supreme Court of the United States

1981

Chapter

4

Title

The Distribution of Nation Power

Page

373

Topic

Foreign Affairs

Quick Notes

President Reagan issued an executive order suspending all U.S. citizens' claims pending against the government of Iran in exchange for hostages.  Both IEEPA and the Hostage Act indicated congressional acceptance of a braod scope for executive action for circumstances like saving hostages.

Rule

o         The president has the power to suspend pending claims against foreign governments where such action is necessary to the resolution of a major foreign policy dispute and where Congress has acquiesced.

Application

o         In Certain situation, the president has the power to settle the claims of U.S. Citizens against foreign governments.

Book Name

Constitutional Law : Stone, Seidman, Sunstein, Tushnet.  ISBN:  978-0-7355-7719-0

Issue

o         Whether the president has the power to suspend the claims of its citizens which are pending against foreign governments in U.S. courts?  Yes.

Procedure

Trial

o         The district court issued orders of attachment directed against the property of defendants

Supreme

o         Affirmed

Facts

Discussion

Key Phrases

Rules

Pl Dames & Moore

Df Regan

Iran Seize American Embassy and Hostages

o         On November 4, 1979, the American Embassy and personnel in Tehran, Iran was seized and U.S. diplomatic officials were held hostage.

Carter Blocked the transfer of Iranian Property

o         In response, President Carter, acting pursuant to the International Emergency Economic Powers Act (IEEPA), declared a national emergency and blocked the transfer of any property of the Iranian government or the Central Bank of Iran that was subject to the jurisdiction of the U.S.

Dames Filed Suit

o         On December 19, 1979, Dames & Moore (P) filed suit in U.S. District Court against the Iranian government (D), the Atomic Energy Organization of Iran (AEOI) (D), and several Iranian banks (D).

o         Dames & Moore (P) alleged that it was owed more than $3 million under a contract it had entered into with the AEOI (D).

District Court - Attachment

o         The District Court issued orders of attachment, and the property of certain Iranian banks (D) was attached to secure any judgment that might be entered against them.

Hostages Released

o         In January of 1981, the American hostages were released pursuant to an Executive Agreement between the U.S. and Iran.

o         One of the goals of the Agreement was to eliminate all litigation between the government of each party and the nationals of the other and to settle all such claims through binding arbitration.

o         All attachments and judgments against Iran were to be nullified and the claims arbitrated in a new Iran-U.S.

o         Claims Tribunal if not settled within six months.

o         President Carter issued a number of Executive Orders implementing the Agreement.

President Reason Ratified Order

o         In February of 1981, President Reagan issued an Executive Order ratifying Carter's Orders, suspending all claims which could properly be brought in the Tribunal, and providing that such claims had no legal effect in any action then pending in any U.S. court.

o         Dames & Moore (P) brought this action in an attempt to comply with those Orders.

Justice Rehnquist

In this Case (Youngstown Analysis)

o         President acted in pursuant to specific congressional authorization, it I supported by the strongest of presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily upon any who might attack it.

President has the power to suspend claim, if it is necessary for resolution

o         The president has the power to suspend pending claims against foreign governments where such action is necessary to the resolution of a major foreign policy dispute and where Congress has acquiesced.

Youngstown Analysis

o         Much of the relevant analysis comes from Youngstown, where the President cannot seize private property to prevent a labor strike, especially Justice Jackson's three categories for executive actions.

No authorization from IEEPA nor the Hostage Act (Youngstown #2 Silence Analysis)

o         Here neither the IEEPA nor the Hostage Act of 1868 specifically authorizes the suspension of claims.

Broad (IEEPA and the Hostage Act) give a broad scope to President

o         But both statutes are relevant in that they indicate acceptance by Congress of a broad scope of presidential power in circumstances such as those presented by this case.

         Indicating Congressional Acceptance.

Executive Gloss

o         A systematic, unbroken, executive practice, long pursued to the knowledge of the Congress and never before questioned . . . may be treated as a gloss on 'Executive Power' vested in the President by 1 of Art. II

No Disapproval, History of acquiescence

o         Moreover, there is no evidence of congressional disapproval of acts such as the ones at issue here, and there is in fact a history of congressional acquiescence [passive assent without protest] in this sort of conduct.

o         Governments often enter into agreements settling the claims of their respective nationals; it is established international practice.

10 Executive Agreement settlements since 1952, Presumption of Congresss Assent

o         Settlement by executive agreement has occurred at least 10 times since 1952.

o         Long-continued practice, acquiesced in by Congress, raises a presumption that Congress has consented to the practice.

Congress approved of claim suspension in the past - International Claims Settlement Act

o         Crucially, it appears that Congress has not only acquiesced but implicitly approved of acts such as claim suspension.

o         The enactment and frequent amendment of the International Claims Settlement Act of 1949 evidences Congress's acceptance of presidential claims settlement authority.

o         The legislative history of the IEEPA also illustrates this acceptance by explicitly referring to the president's power to settle claims.

Court - Holding

o         Finally, the Order nullifying the attachments and ordering the transfer of Iranian assets is clearly authorized by the plain language of the IEEPA.

o         Where the settlement of claims has been determined to be a necessary incident to the resolution of a major foreign policy dispute between our country and another, and where, as here, we can conclude that Congress acquiesced in the President's action, we are not prepared to say that the President lacks the power to settle such claims

o         Affirmed.

Rules

Rule

o         The president has the power to suspend pending claims against foreign governments where such action is necessary to the resolution of a major foreign policy dispute and where Congress has acquiesced.

Application

o         In Certain situation, the president has the power to settle the claims of U.S. Citizens against foreign governments.

Class Notes