United States v. Sperry Corporation

Citation110 S.Ct. 387,107 L.Ed.2d 290,493 U.S. 52
Decision Date28 November 1989
Docket NumberNo. 88-952,88-952
PartiesUNITED STATES, Appellant v. SPERRY CORPORATION et al
CourtUnited States Supreme Court
Syllabus

Prior to the 1979 seizure of the United States Embassy in Tehran, appellees, an American parent corporation and its wholly owned subsidiary (hereinafter Sperry), entered into contracts with the Government of Iran. After the Embassy seizure, Sperry filed suit for claims against Iran in a Federal District Court and obtained a prejudgment attachment of Iranian assets. Subsequently, the United States and Iran entered into the Algiers Accords, which, inter alia, established the Iran-United States Claims Tribunal (Tribunal) to arbitrate Americans' claims against Iran, specified that Tribunal awards are final, binding, and enforceable in the courts of any nation, and placed $1 billion of Iranian assets in a Security Account for the payment of awards to the Federal Reserve Bank of New York (FRB) and thence to claimants. After Executive Orders implementing the Accords invalidated Sperry's attachment and prohibited it from further pursuing its claim in American courts, it filed a claim with the Tribunal and ultimately entered into a settlement agreement whereby Iran promised to pay it $2.8 million, which agreement was recorded as an award of the Tribunal. Congress then enacted § 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, which requires the FRB to deduct from any Tribunal award and to pay into the United States Treasury before remitting the award to the claimant a percentage of the award "as reimbursement to the . . . Government for expenses incurred in connection with the arbitration of claims . . . before [the] Tribunal and the maintenance of the Security Account." When the FRB so deducted a percentage of Sperry's award, Sperry renewed a suit it had previously filed in the Claims Court, arguing that the deduction authorized by § 502 was unconstitutional. The court rejected the claim and dismissed the suit, but the Court of Appeals reversed.

Held: Section 502 is not unconstitutional. Pp. 59-66.

(a) Section 502 does not violate the Just Compensation Clause of the Fifth Amendment. Sperry has not identified any of its property that was taken without just compensation. No taking occurred because Sperry's prejudgment attachment was nullified by the Executive Orders implementing the Accords, since Dames & Moore v. Regan, 453 U.S. 654, 674, n. 6, 101 S.Ct. 2972, 2982, n. 6, 69 L.Ed.2d 918, held that American litigants against Iran had no property interest in such attachments. Nor did Sperry suffer the deprivation of its claim against Iran, since it presented the claim to the Tribunal and settled it for a substantial sum, and now makes no claim that the award was less than could have been recovered in ordinary litigation or that being forced to take the lesser amount was an unconstitutional taking. Moreover, the deduction is not a taking but is a reasonable "user fee" assessed against claimants before the Tribunal and intended to reimburse the Government for its costs in connection with the Tribunal. The amount of a user fee need not be precisely calibrated to the use that a party makes of governmental services, and, on the facts of this case, the § 502 deduction is not so clearly excessive as to belie its purported character as a user fee. Sperry's contention that it did not benefit from the procedures established by the Accords is rejected, since those procedures assured Sperry that its award could be enforced in the courts of any nation and actually paid in this country, whereas, absent those procedures, Sperry would have had no assurance that it could have pursued its action to judgment or that a judgment would have been readily collectible. It is not dispositive that the award was more the result of private negotiations than Tribunal procedures, since Sperry filed its claim with the Tribunal and had a formal award entered, and since Sperry could be required to pay a charge for available governmental services that it never actually used. Pp. 59-64.

(b) Section 502 does not violate the Due Process Clause of the Fifth Amendment. The retroactive application of the § 502 deductions to awards, such as Sperry's, made prior to the statute's enactment is justified by a rational legislative purpose: ensuring that all successful claimants before the Tribunal are treated alike in that all have to contribute to the Tribunal's costs. If § 502's application had been prospective only, those costs would have fallen disproportionately on claimants whose awards were delayed, and claimants who obtained awards prior to enactment would have enjoyed a windfall by avoiding contribution. Nor does § 502 violate the Clause's equal protection component by failing to assess a user fee against all claimants before the Tribunal, since Congress could have rationally concluded that only successful claimants realize a benefit sufficient to justify assessment of a fee and that assessing all claimants would undesirably deter small or uncertain claims. Pp. 64-66.

(c) This Court will not reach the merits of Sperry's argument that § 502 was enacted in violation of the Origination Clause of Article I, § 7, of the Constitution. The question whether Origination Clause claims present nonjusticiable political questions is presently pending before the Court, see United States v. Munoz-Flores, cert. granted, 493 U.S. 808, 110 S.Ct. 48, 107 L.Ed.2d 17, and it would be inappropriate to address Sperry's claim before the threshold justiciability question is decided. Furthermore, even assuming that Origination Clause claims are justiciable, this Court would bene- fit from the views of the Court of Appeals, which found it unnecessary to address the Origination Clause issue. P. 66.

853 F.2d 904 (CA Fed.1988) reversed and remanded.

WHITE, J., delivered the opinion for a unanimous Court.

Lawrence G. Wallace, Washington, D.C., for appellant.

John D. Seiver, Washington, D.C., for appellees.

Justice WHITE delivered the opinion of the Court.

Section 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, 99 Stat. 438, note following 50 U.S.C. § 1701 (1982 ed., Supp. V), requires the Federal Reserve Bank of New York to deduct and pay into the United States Treasury a percentage of any award made by the Iran-United States Claims Tribunal in favor of an American claimant before remitting the award to the claimant. We are asked to consider in this case whether § 502 violates the Just Compensation Clause or Due Process Clause of the Fifth Amendment 1 or the Origination Clause of Article I, § 7.2

I

Appellees Sperry Corporation and Sperry World Trade, Inc. (hereinafter Sperry),3 are American corporations that entered into contracts with the Government of Iran prior to the seizure of the United States Embassy in Tehran on November 4, 1979. The details of the seizure of the Embassy and diplomatic personnel and the ensuing diplomatic crisis want no repetition here. We need address only the means eventually established by the Governments of the United States and Iran to resolve claims by American companies against Iran.

On November 14, 1979, President Carter issued Executive Order No. 12170, blocking the removal or transfer of all property of the Government of Iran subject to American jurisdiction. 3 CFR 457 (1980). One day later, the Secretary of the Treasury issued regulations invalidating any attachment affecting Iranian property covered by the Executive Order unless the attachment was licensed by the Secretary. 31 CFR § 535.203(e) (1980). The regulations provided that any such license could be "amended, modified, or revoked at any time." § 535.805. On November 26, 1979, the President granted a general license authorizing judicial proceedings against Iran but not the "entry of any judgment or of any decree or order of similar or analogous effect. . . ." § 535.504(b)(1). A subsequently issued regulation made clear that the President's license authorized prejudgment attachments. § 535.418.

As part of the resolution of the diplomatic crisis, the United States and Iran entered into an agreement embodied in two declarations of the Government of Algeria commonly referred to as the Algiers Accords (hereinafter the Accords). App. 29-42. The Accords provided for the establishment in The Hague of an international arbitral tribunal, known as the Iran-United States Claims Tribunal (hereinafter the Tribunal), to hear claims brought by Americans against the Government of Iran. The establishment of the Tribunal was to preclude litigation by Americans against Iran in American courts, so the United States undertook to terminate such legal proceedings, unblock Iranian assets in the United States, and nullify all attachments against those assets. Id., at 30. To implement the Accords, President Carter issued a series of Executive Orders on January 19, 1981, revoking all licenses permitting the exercise of "any right, power, or privilege" with respect to Iranian funds and annulling all non-Iranian interests in Iranian assets acquired after the blocking order. Exec. Orders Nos. 12276-12285, 3 CFR 104-118 (1981). On February 24, 1981, President Reagan issued an Executive Order suspending all claims that "may be presented to the . . . Tribunal" and providing that such claims "shall have no legal effect in any action now pending in any court of the United States." Exec. Order No. 12294, 3 CFR 139 (1981). This Court upheld the revocation of the licenses and the suspension of the claims in Dames & Moore v. Regan, 453 U.S. 654, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981).

Prior to the Accords, Sperry had filed suit against Iran in the United States District Court for the District of Columbia and had obtained a prejudgment attachment of blocked Iranian assets, but the Executive Orders sustained in Dames & Moore invalidated that attachment and prohibited Sperry from further pursuing its...

To continue reading

Request your trial
249 cases
  • McClain v. Sav-On Drugs
    • United States
    • California Court of Appeals
    • March 13, 2017
    ...River Water Mgmt. Dist. (2013) 570 U.S. ––––, –––– [133 S.Ct. 2586, 2600-2601, 186 L.Ed.2d 697] ; United States v. Sperry Corp. (1989) 493 U.S. 52, 62, fn. 9 [110 S.Ct. 387, 107 L.Ed.2d 290] ; accord, San Remo Hotel v. City and County of San Francisco (2002) 27 Cal.4th 643, 671-672, 117 Cal......
  • In re Technologies, Case No. 13-11482 (MFW)
    • United States
    • U.S. Bankruptcy Court — District of Delaware
    • January 9, 2020
    ...increased fees are less onerous than user fees that the Supreme Court has upheld as non-excessive. See United States v. Sperry, 493 U.S. 52, 58, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989) (upholding 1.5% ad valorem fee imposed on users of Iran-United States Claims Tribunal). Furthermore, the UST......
  • Clinton Nurseries, Inc. v. Harrington (In re Clinton Nurseries, Inc.)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — District of Connecticut
    • August 28, 2019
    ...that we have required is that the user fee be a ‘fair approximation of the cost of benefits supplied.’ " United States v. Sperry , 493 U.S. 52, 60, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989) (citation omitted); cf. FCC v. Fla. Power Corp. , 480 U.S. 245, 253, 107 S.Ct. 1107, 94 L.Ed.2d 282 (1987......
  • Ballinger v. City of Oakland
    • United States
    • U.S. District Court — Northern District of California
    • August 2, 2019
    ......CITY OF OAKLAND, Defendant. Case No. 18-cv-07186-HSG United States District Court, N.D. California. Signed August 2, 2019 398 ...Sperry Corp. , 493 U.S. 52, 62 n.9, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989). And ......
  • Request a trial to view additional results
1 books & journal articles
  • Cable operators' Fifth Amendment claims applied to digital must-carry.
    • United States
    • Federal Communications Law Journal Vol. 58 No. 2, April 2006
    • April 1, 2006
    ...field it had "less than the full bundle of property rights." Id. at 1073-74 (citations omitted). (115.) United States v. Sperry Corp., 493 U.S. 52, 62 (116.) Id. at 62 n.9. (117.) McUsic, supra note 112, at 655 ("Economic interests, such as personal property, trade secrets, copyright, and m......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT