When Iranian revolutionaries
took power and seized US hostages, President Carter invoked the International
Emergency Economic Powers Act (IEEPA) and froze Iranian assets in the US.
Iran and the US came to an
agreement to release the hostages and
The agreement terminated all
legal proceedings against the Iranian government and created an
independent Claims Tribunal.
The Algerian Accord.
Basically, that meant that
if someone had a claim against the Iranian government from before the
revolution, they could not get their money in a US court.
They would have to go to
the independent Claims Tribunal in the Netherlands, and try to win their
This action was done via executive
Dames & Moore had an
outstanding judgment against Iran for $3M from before the revolution.
They were annoyed that they had already one their case, and now this executive
order was saying they had to
re-litigate the issue in the Claims Tribunal. So they sued to get the executive
order thrown out.
Dames & Moore claimed
the executive order was beyond the
scope of Presidential power.
The US Supreme Court upheld
There were two separate
issues. Whether the President could transfer Iranian assets, and whether
the President could suspend legal claims.
The US Supreme Court found
that IEEPA constituted a specific Congressional authorization for the
President to order the transfer of Iranian assets.
Compare this to the
decision in Youngstown Sheet & Tube Co. v. Sawyer (343 U.S. 579 (1952)) where Congress
specifically chose not to authorize a power to the President.
The Court found that
although the IEEPA itself did not
authorize the Presidential to suspend of legal claims, previous acts of
Congress had implicitly approved of executive control of claim
The Court emphasized the
narrowness of its ruling, limiting the decision to the facts of the
The Court noted that Dames
& Moore were not without legal recourse. They could always go to the
independent Claims Tribunal and try to get their money there. And if
they failed there, they may have a recoverable claim against the US.
Even if Congress passed a
Statute allowing the President to have this power, would it still be
It has been held numerous
times that even when branches of government agree, there can still be
The Constitution is here to
protect the American citizens from tyranny of their government. Even if
Congress and the President conspire to override a Constitutional
provision, that provision still exists. You can't change the
Constitution except through the Constitutional amendment process.
See Buckley v. Valeo (424 U.S. 1 (1976)) and New York
v. United States (505 U.S. 144
If Dames & Moore's
judgment is considered property,
isn't this a taking and a
violation of the 5th Amendment, which forbids seizing
private property without just compensation?
If it is a taking then Dames & Moore would have a
recoverable claim against the US.
The President made an
international that directly impacted the release of US hostages. If,
after the hostages had been released, the Courts had blocked the agreement
made by the President, it would have considerably reduced the capability
of the President to make international agreements.
This is not a legal
argument, but it certainly was a factor. Sometimes, real politick takes
precedent over legal arguments.
This is probably the reason
why the Court attempted to narrow the ruling, in a similar way to how
they narrowed the ruling in Bush v. Gore. They were attempting to avoid establishing a legal precedent.
How does this case compare
to Missouri v. Holland (252 U.S.
416 (1920)) in which a treaty was allowed to override constitutional
Of course, this wasn't a treaty, it was just an executive agreement.
Executive agreements are not subject to ratification by the
Executive agreements can't override laws previously passed by
Congress. Although apparently in this case, they can override the