Dames and Moore v. Regan
453 U.S. 654, 659-662 (Preface), 662-668 (Part I, Facts), 668-669 (Part II), and 669-674 (Part III), 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981).
JUSTICE
REHNQUIST delivered the opinion of the Court.
The
questions presented by this case touch fundamentally upon the manner in which
our Republic is to be governed. Throughout the nearly two centuries of our
Nation's existence under the Constitution, this subject has generated
considerable debate. We have had the benefit of commentators such as John Jay,
Alexander Hamilton, and James Madison writing in The Federalist Papers at the
Nation's very inception, the benefit of astute foreign observers of our system
such as [453 U.S. 654, 660] Alexis de Tocqueville and James Bryce
writing during the first century of the Nation's existence, and the benefit of
many other treatises as well as more than 400 volumes of reports of decisions
of this Court. As these writings reveal it is doubtless both futile and perhaps
dangerous to find any epigrammatical explanation of
how this country has been governed. Indeed, as Justice Jackson noted, "[a]
judge . . . may be surprised at the poverty of really useful and unambiguous
authority applicable to concrete problems of executive power as they actually
present themselves." Youngstown
Sheet & Tube Co. v. Sawyer, 343
U.S. 579, 634 (1952) (concurring opinion).
Our
decision today will not dramatically alter this situation, for the Framers
"did not make the judiciary the overseer of our government." Id., at
594 (Frankfurter, J., concurring). We are confined to a resolution of the
dispute presented to us. That 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. We granted certiorari before
judgment in this case, and set an expedited briefing and argument schedule,
because lower courts had reached conflicting conclusions on the validity of the
President's actions and, as the Solicitor General informed us, unless the
Government acted by July 19, 1981, Iran could consider the United States to be
in breach of the Executive Agreement.
But
before turning to the facts and law which we believe determine the result in
this case, we stress that the expeditious treatment of the issues involved by
all of the courts which have considered the President's actions makes us
acutely aware of the necessity to rest decision on the narrowest possible
ground capable of deciding the case. Ashwander v. TVA, [453 U.S. 654, 661] 297
U.S. 288, 347 (1936) (Brandeis, J., concurring). This does not mean that
reasoned analysis may give way to judicial fiat. It does mean that the
statement of Justice Jackson - that we decide difficult cases presented to us
by virtue of our commissions, not our competence - is especially true here. We
attempt to lay down no general "guidelines" covering other situations
not involved here, and attempt to confine the opinion only to the very
questions necessary to decision of the case.
Perhaps
it is because it is so difficult to reconcile the foregoing definition of Art.
III judicial power with the broad range of vitally important day-to-day
questions regularly decided by Congress or the Executive, without either
challenge or interference by the Judiciary, that the decisions of the Court in
this area have been rare, episodic, and afford little precedential value for
subsequent cases. The tensions present in any exercise of executive power under
the tripartite system of Federal Government established by the Constitution
have been reflected in opinions by Members of this Court more than once. The
Court stated in United States v.
Curtiss-Wright Export Corp., 299
U.S. 304, 319 -320 (1936):
"[W]e are here dealing
not alone with an authority vested in the President by an exertion of
legislative power, but with such an authority plus the very delicate, plenary
and exclusive power of the President as the sole organ of the federal
government in the field of international relations - a power which does not
require as a basis for its exercise an act of Congress, but which, of course,
like every other governmental power, must be exercised in subordination to the
applicable provisions of the Constitution."
And
yet 16 years later.
Justice Jackson in his concurring opinion in Youngstown, supra, which both parties agree brings together as much
combination of analysis and common sense as there is in this area, focused not
on the "plenary and exclusive [453
U.S. 654, 662] power of
the President" but rather responded to a claim of virtually unlimited
powers for the Executive by noting:
"The example of such
unlimited executive power that must have most impressed the forefathers was the
prerogative exercised by George III, and the description of its evils in the
Declaration of Independence leads me to doubt that they were creating their new
Executive in his image." 343
U.S., at 641.
As
we now turn to the factual and legal issues in this case, we freely confess
that we are obviously deciding only one more episode in the never-ending
tension between the President exercising the executive authority in a world
that presents each day some new challenge with which he must deal and the
Constitution under which we all live and which no one disputes embodies some
sort of system of checks and balances.
I
On
November 4, 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, 91
Stat. 1626, 50 U.S.C. 1701-1706 (1976 ed., Supp. III) (hereinafter IEEPA),
declared a national emergency on November 14, 1979, 1 and blocked the removal or transfer of "all
property and interests in property of the Government of Iran, its
instrumentalities and controlled entities and the Central Bank of Iran which
are or become subject to [453 U.S. 654,
663] the jurisdiction of
the United States . . . ." Exec. Order No. 12170,
3 CFR 457 (1980), note following 50 U.S.C. 1701 (1976 ed., Supp. III). 2 President Carter authorized the Secretary of the
Treasury to promulgate regulations carrying out the blocking order. On November
15, 1979, the Treasury Department's Office of Foreign Assets Control issued a
regulation providing that "[u]nless licensed or
authorized . . . any attachment, judgment, decree, lien, execution,
garnishment, or other judicial process is null and void with respect to any
property in which on or since [November 14, 1979,] there existed an interest of
Iran." 31 CFR 535.203 (e) (1980). The regulations
also made clear that any licenses or authorizations granted could be
"amended, modified, or revoked at any time." 535.805. 3
On
November 26, 1979, the President granted a general license authorizing certain
judicial proceedings against Iran but which did not allow the "entry of
any judgment or of any decree or order of similar or analogous effect . . .
." 535.504 (a). On December 19, 1979, a
clarifying regulation was issued stating that "the general authorization
for judicial proceedings contained in 535.504 (a) includes pre-judgment
attachment." 535.418.
On
December 19, 1979, petitioner Dames & Moore filed suit in the United States
District Court for the Central District of California against the Government of
Iran, the Atomic [453 U.S. 654, 664] Energy Organization of Iran, and a number
of Iranian banks. In its complaint, petitioner alleged that its wholly owned
subsidiary, Dames & Moore International, S. R. L., was a party to a written
contract with the Atomic Energy Organization, and that the subsidiary's entire
interest in the contract had been assigned to petitioner. Under the contract,
the subsidiary was to conduct site studies for a proposed nuclear power plant
in Iran. As provided in the terms of the contract, the Atomic Energy
Organization terminated the agreement for its own convenience on June 30, 1979.
Petitioner contended, however, that it was owed $3,436,694.30 plus interest for
services performed under the contract prior to the date of termination. 4 The District Court issued orders of attachment
directed against property of the defendants, and the property of certain
Iranian banks was then attached to secure any judgment that might be entered
against them.
On
January 20, 1981, the Americans held hostage were released by Iran pursuant to
an Agreement entered into the day before and embodied in two Declarations of
the Democratic and Popular Republic of Algeria. Declaration of the Government
of the Democratic and Popular Republic of Algeria (App. to Pet. for Cert.
21-29), and Declaration of the Government of the Democratic and Popular
Republic of Algeria Concerning the Settlement of Claims by the Government of
the United States of America and the Government of the Islamic Republic of Iran
(id., at 30-35). The Agreement [453
U.S. 654, 665] stated that
"[i]t is the purpose of [the United States and
Iran] . . . to terminate all litigation as between the Government of each party
and the nationals of the other, and to bring about the settlement and
termination of all such claims through binding arbitration." Id., at
21-22. In furtherance of this goal, the Agreement called for the establishment
of an Iran-United States Claims Tribunal which would arbitrate any claims not
settled within six months. Awards of the Claims Tribunal are to be "final
and binding" and "enforceable . . . in the courts of any nation in
accordance with its laws." Id., at 32. Under the
Agreement, the United States is obligated
"to terminate all legal
proceedings in United States courts involving claims of United States persons
and institutions against Iran and its state enterprises, to nullify all
attachments and judgments obtained therein, to prohibit all further litigation
based on such claims, and to bring about the termination of such claims through
binding arbitration." Id., at 22.
In addition,
the United States must "act to bring about the transfer" by July 19,
1981, of all Iranian assets held in this country by American banks. Id., at 24-25.
One billion dollars of these assets will be deposited in a security account in
the Bank of England, to the account of the Algerian Central Bank, and used to
satisfy awards rendered against Iran by the Claims Tribunal. Ibid.
On
January 19, 1981, President Carter issued a series of Executive Orders
implementing the terms of the agreement. Exec. Orders
Nos. 12276-12285, 46 Fed. Reg. 7913-7932. These Orders
revoked all licenses permitting the exercise of "any right, power, or
privilege" with regard to Iranian funds, securities, or deposits;
"nullified" all non-Iranian interests in such assets acquired
subsequent to the blocking order of November 14, 1979; and required those banks
holding Iranian assets to transfer them "to the Federal Reserve Bank of
New [453 U.S. 654, 666] York, to be held or transferred as directed
by the Secretary of the Treasury." Exec. Order
No. 12279, 46 Fed. Reg. 7919.
On
February 24, 1981, President Reagan issued an Executive Order in which he
"ratified" the January 19th Executive Orders. Exec.
Order No. 12294. 46 Fed. Reg. 14111.
Moreover, he "suspended" all "claims which may be presented to
the . . . Tribunal" and provided that such claims "shall have no
legal effect in any action now pending in any court of the United States."
Ibid. The suspension of any particular claim
terminates if the Claims Tribunal determines that it has no jurisdiction over
that claim; claims are discharged for all purposes when the Claims Tribunal
either awards some recovery and that amount is paid, or determines that no
recovery is due. Ibid.
Meanwhile,
on January 27, 1981, petitioner moved for summary judgment in the District
Court against the Government of Iran and the Atomic Energy Organization, but
not against the Iranian banks. The District Court granted petitioner's motion
and awarded petitioner the amount claimed under the contract plus interest.
Thereafter, petitioner attempted to execute the judgment by obtaining writs of
garnishment and execution in state court in the State of Washington, and a
sheriff's sale of Iranian property in Washington was noticed to satisfy the
judgment. However, by order of May 28, 1981, as amended by order of June 8, the
District Court stayed execution of its judgment pending appeal by the
Government of Iran and the Atomic Energy Organization. The District Court also
ordered that all prejudgment attachments obtained against the Iranian
defendants be vacated and that further proceedings against the bank defendants
be stayed in light of the Executive Orders discussed above. App. to Pet. for
Cert. 106-107.
On
April 28, 1981, petitioner filed this action in the District Court for
declaratory and injunctive relief against the United States and the Secretary
of the Treasury, seeking to [453 U.S.
654, 667] prevent enforcement
of the Executive Orders and Treasury Department regulations implementing the
Agreement with Iran. In its complaint, petitioner alleged that the actions of
the President and the Secretary of the Treasury implementing the Agreement with
Iran were beyond their statutory and constitutional powers and, in any event,
were unconstitutional to the extent they adversely affect petitioner's final
judgment against the Government of Iran and the Atomic Energy Organization, its
execution of that judgment in the State of Washington, its prejudgment
attachments, and its ability to continue to litigate against the Iranian banks.
Id., at 1-12. On May 28, 1981, the District Court denied petitioner's motion
for a preliminary injunction and dismissed petitioner's complaint for failure
to state a claim upon which relief could be granted. Id., at 106-107. Prior to
the District Court's ruling, the United States Courts of Appeals for the First
and the District of Columbia Circuits upheld the President's authority to issue
the Executive Orders and regulations challenged by petitioner. See Chas. T. Main Int'l, Inc. v. Khuzestan Water
& Power Authority, 651 F.2d 800 (CA1 1981); American Int'l Group, Inc. v. Islamic Republic of Iran, 211 U.S.
App. D.C. 468, 657 F.2d 430 (1981).
On
June 3, 1981, petitioner filed a notice of appeal from the District Court's
order, and the appeal was docketed in the United States Court of Appeals for
the Ninth Circuit. On June 4, the Treasury Department amended its regulations
to mandate "the transfer of bank deposits and certain other financial
assets of Iran in the United States to the Federal Reserve Bank of New York by
noon, June 19." App. to Pet. for Cert. 151-152. The District Court,
however, entered an injunction pending appeal prohibiting the United States
from requiring the transfer of Iranian property that is subject to "any
writ of attachment, garnishment, judgment, levy, or other judicial lien"
issued by any court in favor of petitioner. Id., at 168.
Arguing that this is a case of "imperative public importance,"
petitioner then sought a writ of certiorari before [453 U.S. 654, 668]
judgment. Pet. for Cert. 10. See 28 U.S.C. 2101
(e); this Court's Rule 18. Because the issues presented here are of great
significance and demand prompt resolution, we granted the petition for the
writ, adopted an expedited briefing schedule, and set the case for oral
argument on June 24, 1981. 452 U.S. 932 (1981).
II
The
parties and the lower courts, confronted with the instant questions, have all
agreed that much relevant analysis is contained in Youngstown Sheet & Tube Co. v. Sawyer, 343
U.S. 579 (1952). Justice Black's opinion for the Court in that case,
involving the validity of President Truman's effort to seize the country's
steel mills in the wake of a nationwide strike, recognized that "[t]he
President's power, if any, to issue the order must stem either from an act of
Congress or from the Constitution itself." Id., at 585.
Justice Jackson's concurring opinion elaborated in a general way the
consequences of different types of interaction between the two democratic
branches in assessing Presidential authority to act in any given case. When the
President acts pursuant to an express or implied authorization from Congress,
he exercises not only his powers but also those delegated by Congress. In such a
case the executive action "would be 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." Id., at 637. When the President acts in the absence of
congressional authorization he may enter "a zone of twilight in which he
and Congress may have concurrent authority, or in which its distribution is
uncertain." Ibid. In such a case the analysis
becomes more complicated, and the validity of the President's action, at least
so far as separation-of-powers principles are concerned, hinges on a
consideration of all the circumstances which might shed light on the views of
the Legislative Branch toward such action, including "congressional [453 U.S. 654, 669] inertia, indifference or quiescence." Ibid. Finally, when the President acts in contravention of
the will of Congress, "his power is at its lowest ebb," and the Court
can sustain his actions "only by disabling the Congress from acting upon
the subject." Id., at 637-638.
Although
we have in the past found and do today find Justice Jackson's classification of
executive actions into three general categories analytically useful, we should
be mindful of Justice Holmes' admonition, quoted by Justice Frankfurter in Youngstown, supra, at 597 (concurring
opinion), that "[t]he great ordinances of the Constitution do not
establish and divide fields of black and white." Springer v. Philippine Islands, 277
U.S. 189, 209 (1928) (dissenting opinion). Justice Jackson himself
recognized that his three categories represented "a somewhat
over-simplified grouping," 343
U.S., at 635 , and it is doubtless the case that executive action in any
particular instance falls, not neatly in one of three pigeonholes, but rather
at some point along a spectrum running from explicit congressional
authorization to explicit congressional prohibition. This is particularly true
as respects cases such as the one before us, involving responses to
international crises the nature of which Congress can hardly have been expected
to anticipate in any detail.
III
In
nullifying post-November 14, 1979, attachments and directing those persons
holding blocked Iranian funds and securities to transfer them to the Federal
Reserve Bank of New York for ultimate transfer to Iran, President Carter cited
five sources of express or inherent power. The Government, however, has
principally relied on 203 of the IEEPA, 91 Stat. 1626, 50 U.S.C. 1702 (a) (1)
(1976 ed., Supp. III), as authorization for these actions. Section 1702 (a) (1)
provides in part:
"At the times and to the
extent specified in section 1701 of this title, the President may, under such
regulations [453 U.S. 654, 670] as he may prescribe, by means of
instructions, licenses, or otherwise -
"(A) investigate,
regulate, or prohibit -
"(i)
any transactions in foreign exchange,
"(ii) transfers
of credit or payments between, by, through, or to any
banking institution, to the extent that such transfers or payments involve any
interest of any foreign country or a national thereof,
"(iii) the importing or exporting of currency or securities, and
"(B) investigate,
regulate, direct and compel, nullify, void, prevent or prohibit, any
acquisition, holding, withholding, use, transfer, withdrawal, transportation,
importation or exportation of, or dealing in, or exercising any right, power,
or privilege with respect to, or transactions involving, any property in which
any foreign country or a national thereof has any interest;
"by
any person, or with respect to any property, subject to the jurisdiction of the
United States."
The Government
contends that the acts of "nullifying" the attachments and ordering
the "transfer" of the frozen assets are specifically authorized by
the plain language of the above statute. The two Courts of Appeals that have
considered the issue agreed with this contention. In Chas. T. Main Int'l, Inc. v. Khuzestan Water & Power Authority,
the Court of Appeals for the First Circuit explained:
"The President relied on
his IEEPA powers in November 1979, when he `blocked' all Iranian assets in this
country, and again in January 1981, when he `nullified' interests acquired in
blocked property, and ordered that property's transfer. The President's
actions, in this regard, are in keeping with the language of IEEPA: initially
he `prevent[ed] and prohibit[ed]'
`transfers' of Iranian assets; later he `direct[ed]
and compel[led]' the [453 U.S. 654,
671] `transfer' and
`withdrawal' of the assets, `nullify[ing]' certain
`rights' and `privileges' acquired in them.
"Main argues that IEEPA
does not supply the President with power to override judicial remedies, such as
attachments and injunctions, or to extinguish `interests' in foreign assets
held by United States citizens. But we can find no such limitation in IEEPA's
terms. The language of IEEPA is sweeping and unqualified. It provides broadly
that the President may void or nullify the `exercising [by any person of] any
right, power or privilege with respect to . . . any property in which any
foreign country has any interest . . . .' 50 U.S.C. 1702 (a)
(1) (B)." 651 F.2d, at 806-807 (emphasis in
original).
In American Int'l Group, Inc. v. Islamic
Republic of Iran, the Court of Appeals for the District of Columbia Circuit
employed a similar rationale in sustaining President Carter's action:
"The Presidential
revocation of the license he issued permitting prejudgment restraints upon
Iranian assets is an action that falls within the plain language of the IEEPA.
In vacating the attachments, he acted to `nullify [and] void . . . any . . .
exercising any right, power, or privilege with respect to . . . any property in
which any foreign country . . . has any interest . . . by any person . . .
subject to the jurisdiction of the United States.'" 211
U.S. App. D.C., at 477, 657 F.2d, at 439 (footnote omitted).
Petitioner
contends that we should ignore the plain language of this statute because an
examination of its legislative history as well as the history of 5 (b) of the Trading
With the Enemy Act (hereinafter TWEA), 40 Stat. 411, as amended, 50 U.S.C. App.
5 (b) (1976 ed. and Supp. III), from which the pertinent language of 1702 is
directly drawn, [453 U.S. 654, 672] reveals that the statute was not intended
to give the President such extensive power over the assets of a foreign state
during times of national emergency. According to petitioner, once the President
instituted the November 14, 1979, blocking order, 1702 authorized him
"only to continue the freeze or to discontinue controls." Brief for Petitioner 32.
We
do not agree and refuse to read out of 1702 all meaning to the words
"transfer," "compel," or "nullify." Nothing in
the legislative history of either 1702 or 5 (b) of the TWEA requires such a
result. To the contrary, we think both the legislative history and cases
interpreting the TWEA fully sustain the broad authority of the Executive when
acting under this congressional grant of power. See, e. g., Orvis v. Brownell, 345
U.S. 183 (1953). 5 Although Congress intended [453 U.S. 654, 673]
to limit the President's emergency power in peacetime, we do not think
the changes brought about by the enactment of the IEEPA in any way affected the
authority of the President to take the specific actions taken here. We likewise
note that by the time petitioner instituted this action, the President had
already entered the freeze order. Petitioner proceeded against the blocked
assets only after the Treasury Department had issued revocable licenses
authorizing such proceedings and attachments. The Treasury Regulations provided
that "unless licensed" any attachment is null and void, 31 CFR
535.203 (e) (1980), and all licenses "may be amended, modified, or revoked
at any time." 535.805. As such, the attachments obtained by petitioner
were specifically made subordinate to further actions which the President might
take under the IEEPA. Petitioner was on notice of the contingent nature of its
interest in the frozen assets.
This
Court has previously recognized that the congressional purpose in authorizing
blocking orders is "to put control of foreign assets in the hands of the
President . . . ." Propper v. Clark, 337
U.S. 472, 493 (1949). Such orders permit the President to maintain
the foreign assets at his disposal for use in negotiating the resolution of a
declared national emergency. The frozen assets serve as a "bargaining
chip" to be used by the President when dealing with a hostile country.
Accordingly, it is difficult to accept petitioner's argument because the
practical effect of it is to allow individual claimants throughout the country
to minimize or wholly eliminate this "bargaining chip" through
attachments, garnishments, or similar encumbrances on property. Neither the
purpose the [453 U.S. 654, 674] statute was enacted to serve nor its plain language supports such a result. 6
Because
the President's action in nullifying the attachments and ordering the transfer
of the assets was taken pursuant to specific congressional authorization, it is
"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." Youngstown,
343
U.S., at 637 (Jackson, J., concurring). Under the circumstances of this
case, we cannot say that petitioner has sustained that heavy burden. A contrary
ruling would mean that the Federal Government as a whole lacked the power
exercised by the President, see id., at 636-637, and that we are not prepared
to say. [453 U.S. 654, 675]
V
We
do not think it appropriate at the present time to address petitioner's
contention that the suspension of claims, if authorized, would constitute a
taking of property in violation of the Fifth Amendment to the United States
Constitution in the absence of just compensation. 14 Both petitioner and [453
U.S. 654, 689] the Government concede
that the question whether the suspension of the claims constitutes a taking is
not ripe for review. Brief for Petitioner 34, n. 32; Brief for Federal
Respondents 65. Accord, Chas.
T. Main Int'l, Inc. v. Khuzestan Water & Power Authority, supra, at
814-815; American Int'l Group, Inc. v.
Islamic Republic of Iran, 211 U.S. App. D.C., at 485, 657 F.2d, at 447.
However, this contention, and the possibility that the President's actions may
effect a taking of petitioner's property, make ripe for adjudication the
question whether petitioner will have a remedy at law in the Court of Claims
under the Tucker Act, 28 U.S.C. 1491 (1976 ed., Supp. III), in such an event.
That the fact and extent of the taking in this case is yet speculative is
inconsequential because "there must be at the time of taking `reasonable,
certain and adequate provision for obtaining compensation.'" Regional Rail
Reorganization Act Cases, 419 U.S. 102, 124 -125 (1974), quoting Cherokee
Nation v. Southern Kansas R. Co., 135 U.S. 641, 659 (1890); see also Cities Service Co. v. McGrath, 342 U.S.
330, 335 -336 (1952); Duke Power Co. v.
Carolina Environmental Study Group, Inc., 438 U.S. 59, 94 , n. 39 (1978).
It
has been contended that the "treaty exception" to the jurisdiction of
the Court of [Federal] Claims, 28 U.S.C. 1502, might preclude the Court of
Claims from exercising jurisdiction over any takings claim the petitioner might
bring. At oral argument, however, the Government conceded that 1502 would not
act as a bar to petitioner's action in the Court of Claims. Tr.
of Oral Arg. 39-42, 47. We agree. See United States v. Weld, 127 U.S. 51 (1888); United States v. Old Settlers, 148 U.S. 427 (1893); Hughes Aircraft Co. v. United States,
209 Ct. Cl. 446, 534 F.2d 889 (1976). Accordingly, to the extent petitioner
believes it has suffered an unconstitutional taking by the suspension of the
claims, we see no jurisdictional [453 U.S. 654, 690] obstacle to an appropriate action in the
United States Court of Claims under the Tucker Act.
The
judgment of the District Court is accordingly affirmed, and the mandate shall
issue forthwith.
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