Dames & Moore v. Regan
453 U.S. 654 (1981)

  • 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 case there.
  • This action was done via executive order.
  • Dames & Moore had an outstanding judgment against Iran for $3M from before the revolution. They were annoyed that they had already won 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 orderthrown out.
    • Dames & Moore claimed the executive order was beyond the scope of Presidential power.
  • The US Supreme Court upheld the IEEPA.
    • 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 Itselfdid not authorize the Presidential to suspend of legal claims, previous acts of Congress had implicitly approved of executive control of claim settlement.
      • The Court emphasized the narrowness of its ruling, limiting the decision to the facts of the case.
    • 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 unconstitutional?
    • It has been held numerous times that even when branches of government agree, there can still be Constitutional issues.
    • 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 (1992)).
  • 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 politics 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 arguments?
      • Of course, this wasn’t a treaty, it was just an executive agreement.
        • Executive agreements are not subject to ratification by the Senate.
        • Executive agreements can’t override laws previously passed by Congress. Although apparently in this case, they can override the Constitution!