Bank Markazi v. Peterson
The Court upheld a federal law that let more than 1,000 victims of Iran-sponsored terrorism collect on their court judgments from $1.75 billion in assets tied to Iran's central bank, rejecting the bank's argument that Congress had improperly decided the case itself.
The ruling confirms that Congress can change the legal rules governing a pending lawsuit — even one identified by name and docket number — as long as it enacts a new legal standard rather than simply dictating who wins, especially in matters touching foreign policy.
“A statute does not impinge on judicial power when it directs courts to apply a new legal standard to undisputed facts.”
The Court's core rule for why Congress can change outcome-determinative law in a pending case.
How it got here: A federal district court ordered turnover of the assets under the new statute; the Second Circuit affirmed; Bank Markazi asked the Supreme Court to review the separation-of-powers question.
The Case in Depth
What happened
Over 1,000 victims of Iran-sponsored terrorist attacks, including the 1983 Beirut Marine barracks bombing, won default judgments against Iran worth billions of dollars. To collect, they sought turnover of about $1.75 billion in bond assets held in a New York bank account, assets they said were owned by Bank Markazi, Iran's central bank. Bank Markazi fought turnover with numerous legal defenses.
The question before the Court
Could Congress pass a law that made a specific set of Iranian central bank assets available to pay terrorism victims' judgments in one ongoing lawsuit?
The Court's answer
Yes — the Court held that Congress could pass a law making these specific Iranian central bank assets available to pay the terrorism victims' judgments, even though the law named the case by docket number and effectively guaranteed the victims would win. The key distinction, the Court explained, is that Section 8772 created a new legal standard for courts to apply (whether Iran held an equitable or beneficial interest in the assets) rather than simply commanding a verdict for one side.
The Court also gave weight to the fact that the law involved foreign-state assets and foreign policy, an area where Congress and the President have long exercised significant control, including over sovereign immunity determinations. Because the statute changed the applicable law rather than ordering a result under old law, it did not cross the line into deciding the case itself, so it did not violate the separation of powers.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Terrorism victims and their families can now collect on judgments against Iran from these specific frozen assets. More broadly, the decision gives Congress a clearer green light to pass laws aimed at particular pending lawsuits \u2014 including future sanctions or asset-freeze disputes \u2014 so long as the law changes the applicable legal standard rather than just ordering a result.
What changes now
This is a final merits decision, not a temporary order. With the separation-of-powers challenge resolved, the turnover of the $1.75 billion in assets to the terrorism victims can proceed. The ruling also stands as guidance for future cases in which Congress passes legislation aimed at a specific pending lawsuit, particularly in the foreign-affairs context.
What this does not decide
The Court did not decide that Congress can simply order a particular party to win a lawsuit; it stressed the law worked by changing the legal standard, not by commanding a result. The decision also rested partly on the case's foreign-affairs context, so it does not resolve how far Congress can go in ordinary domestic litigation.
Concurrences and dissents
Concurrence in part — Justice Thomas
Justice Thomas joined the Court's opinion in full except for Part II-C, the section giving special weight to the foreign-affairs context of the case. He agreed the statute did not violate separation of powers under the Court's general framework but did not join the additional reasoning about deference to the political branches on foreign-state assets.
Dissent — Justice Roberts
“Congress has decided this case by enacting a bespoke statute tailored to this case that resolves the parties’ specific legal disputes to guarantee respondents victory.”The dissent's central objection that Congress, not the courts, decided the case.
Chief Justice Roberts argued that Congress effectively decided this specific case by passing a law that eliminated every legal defense Bank Markazi had raised, guaranteeing the victims' win without technically saying "respondents win." He traced the history of colonial legislatures usurping judicial power to show why Article III forbids Congress from deciding pending cases this way, and argued the majority's distinction between changing law and dictating results was illusory. He would have held the statute unconstitutional.
How the Court got there
The legal reasoning, step by step
- The Court applied the rule that Congress cannot tell a court how to apply existing law to particular facts, but it can change the underlying law itself and make that change apply to pending cases, even when the new law dictates the outcome.
- Reviewing United States v. Klein, an 1872 Reconstruction-era case sometimes read to bar Congress from directing results in pending cases, the Court explained that Klein actually turned on Congress trying to nullify the President's pardon power, not on a general ban on outcome-changing legislation.
- Because the statute set out new substantive standards — requiring courts to determine whether Iran held equitable title or a beneficial interest in the assets — rather than simply commanding a result, the Court treated it as a permissible amendment of the applicable law rather than an order dictating a verdict.
- The Court rejected the argument that the law was invalid merely because it applied to a single, named case, noting that a similar law naming a case by docket number was previously upheld, and that legislation need not be generally applicable to be constitutional.
- The Court gave extra weight to the fact that the law was an exercise of the political branches' longstanding authority over foreign-state assets and sovereign immunity, an area where courts have historically deferred to Congress and the President.
- Applying these principles to the facts, the Court concluded the statute changed the governing legal standard rather than commanding a particular result, so it did not violate the separation of powers.
Doctrinal impact
Cases affected by this decision
Limits United States v. Klein (13 Wall. 128)
The Court narrowed Klein's reach, saying it only bars Congress from directing results without changing the underlying law.
Reaffirms Robertson v. Seattle Audubon Soc. (503 U. S. 429)
The Court relied on Robertson to affirm that Congress may amend law applicable to pending, docket-identified cases.
Reaffirms Plaut v. Spendthrift Farm, Inc. (514 U. S. 211)
The Court used Plaut's framework distinguishing permissible law-changing from impermissible result-dictating.