Dames & Moore v. Regan

Facts

On November 4, 1979, the American Embassy in Tehran was seized and American diplomats were held hostage. President Carter, acting under the International Emergency Economic Powers Act (IEEPA), declared a national emergency and blocked the transfer of Iranian government property under United States jurisdiction. Treasury regulations made attachments and other court process against that property null and void unless licensed, and said licenses could be amended, modified, or revoked at any time. Dames & Moore sued Iran, its Atomic Energy Organization, and several Iranian banks in federal court in California. It claimed $3,436,694.30 plus interest for site studies for a nuclear power plant under a contract its subsidiary had assigned to it and the Organization had ended. The court attached the banks' property. On January 20, 1981, Iran released the hostages under an agreement reached through Algeria. The United States promised to end legal proceedings in American courts on claims against Iran, nullify attachments and judgments, bar further litigation on such claims, and move the claims to binding arbitration before an Iran-United States Claims Tribunal. It also promised to bring about the transfer of Iranian assets held by American banks. President Carter issued executive orders carrying out the agreement. On February 24, 1981, President Reagan ratified them and suspended claims that may be presented to the Tribunal. Dames & Moore won a summary judgment against Iran and the Organization and began to execute on it in Washington State, but the District Court stayed execution.

Issues

1. Did Congress, through the International Emergency Economic Powers Act, authorize the President to nullify attachments on Iranian assets in the United States and to order those assets transferred?
2. Did the President have authority to suspend pending claims against Iran in American courts and send them to the Iran-United States Claims Tribunal, when no statute specifically authorized that step?
3. If suspending the claims is a Fifth Amendment taking, would the company have a remedy in the Court of Claims under the Tucker Act?

Holding

IEEPA specifically authorized the President to nullify the attachments and order the Iranian assets transferred. It did not authorize suspending the claims, but IEEPA, the Hostage Act and long congressional acquiescence in executive claim settlements showed the President was authorized to suspend them, where settlement was a necessary incident to resolving a major foreign policy dispute. The Court left open whether the suspension was a taking but saw no jurisdictional obstacle to a Court of Claims suit.