Dames & Moore
Iran Seize American Embassy and Hostages
On November 4, 1979, the American Embassy and personnel in
Tehran, Iran was seized and U.S. diplomatic officials were held
Carter Blocked the transfer of Iranian Property
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
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
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
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.
In January of 1981, the American hostages were released pursuant
to an Executive Agreement between the U.S. and Iran.
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
All attachments and judgments against Iran were to be nullified
and the claims arbitrated in a new Iran-U.S.
Claims Tribunal if not settled within six months.
President Carter issued a number of Executive Orders
implementing the Agreement.
President Reason Ratified Order
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
Dames & Moore (P) brought this action in an attempt to comply
with those Orders.
In this Case (Youngstown Analysis)
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
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
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
No authorization from IEEPA nor the Hostage Act (Youngstown #2
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
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.
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
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.
Governments often enter into agreements settling the claims of
their respective nationals; it is established international
10 Executive Agreement settlements since 1952, Presumption of
Settlement by executive agreement has occurred at least 10 times
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
Crucially, it appears that Congress has not only acquiesced but
implicitly approved of acts such as claim suspension.
The enactment and frequent amendment of the International Claims
Settlement Act of 1949 evidences Congress's acceptance of
presidential claims settlement authority.
The legislative history of the IEEPA also illustrates this
acceptance by explicitly referring to the president's power to
Finally, the Order nullifying the attachments and ordering the
transfer of Iranian assets is clearly authorized by the plain
language of the IEEPA.
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