Dames & Moore v. Regan

1981-07-02

Headline: Upheld: President allowed to cancel court attachments on frozen Iranian assets, order their transfer, and suspend related lawsuits, making it harder for private claimants to collect judgments while international arbitration proceeds.

Holding: The Court held that the International Emergency Economic Powers Act authorizes the President to nullify attachments and transfer frozen Iranian assets and that Congress implicitly accepted suspending related claims through an executive settlement, while takings claims remain for separate review.

Real World Impact:

Allows President to nullify court attachments on foreign assets during emergencies.
Transfers frozen foreign funds out of U.S. banking control for diplomatic settlements.
Private creditors must seek compensation through international tribunal or Court of Claims.

Topics: frozen foreign assets, presidential emergency powers, international arbitration, compensation claims, court attachments

Summary

Background

A private contractor, Dames & Moore, won a money judgment against Iranian parties and had bank accounts and other Iranian assets attached to satisfy that judgment. After the 1979 hostage crisis the President issued emergency orders and Treasury rules that nullified such attachments, ordered frozen Iranian funds transferred to the Federal Reserve Bank of New York, and implemented an agreement sending unresolved claims to an Iran–United States Claims Tribunal under Algerian declarations. The company sued to block enforcement of those orders and lost in the lower courts, and the case reached the Court for expedited review.

Reasoning

The central question was whether the President had authority to nullify attachments, transfer the frozen assets, and suspend related claims. The Court held that the International Emergency Economic Powers Act (IEEPA) authorizes the nullification of attachments and transfer of blocked foreign assets. The Court further concluded that, although the IEEPA alone did not plainly authorize suspending in-personam claims, long-standing executive settlement practice and congressional acquiescence supported the President’s use of an executive agreement and the alternative Claims Tribunal. The Court declined to resolve whether these actions constituted a constitutional taking, finding that takings issues were not ripe and that claimants could seek compensation in the Court of Claims under the Tucker Act.

Real world impact

The ruling lets the Executive implement diplomatic settlements that override some court remedies for foreign assets, pushing many private claims into an international tribunal or later litigation in the Court of Claims. It preserves a path for compensation claims but makes immediate collection from frozen foreign funds more difficult. The opinion is narrowly framed to this dispute and does not announce a general rule for all future foreign-settlement actions.

Dissents or concurrances

Justice Stevens joined most of the opinion but would not decide the jurisdictional compensation question. Justice Powell agreed on suspension and settlement but dissented as to whether nullifying attachments itself effected a taking that should remain open for later Court of Claims review.