Bank Markazi v. Peterson

• Decision Date: 20 April 2016
• Docket Number: 14–770.
• Citation: 194 L.Ed.2d 463,136 S.Ct. 1310,578 U.S. 212
• Parties: BANK MARKAZI, aka Central Bank of Iran, Petitioner v. Deborah PETERSON, et al.
• Court: U.S. Supreme Court

578 U.S. 212

136 S.Ct. 1310

194 L.Ed.2d 463

BANK MARKAZI, aka Central Bank of Iran, Petitioner

v.Deborah PETERSON, et al.

No. 14–770.

Supreme Court of the United States

Argued Jan. 13, 2016.

Decided April 20, 2016.

David M. Lindsey, Andreas A. Frischknecht, Chaffetz Lindsey LLP, New York, NY, Jeffrey A. Lamken, Robert K. Kry, Lauren M. Weinstein, Sarah J. Newman, MoloLamken LLP, Washington, DC, for Petitioner.

Liviu Vogel, Salon Marrow Dyckman, Newman & Broudy LLP, New York, NY, James P. Bonner, Patrick L. Rocco, Patrick L. Rocco, Susan M. Davies, Stone Bonner & Rocco LLP, New York, NY, Theodore B. Olson, Matthew D. McGill, Jonathan C. Bond, Lochlan F. Shelfer, Gibson, Dunn & Crutcher LLP, Washington, DC, Ashley E. Johnson, Gibson, Dunn & Crutcher LLP, Dallas, TX, Shale D. Stiller, Richard M. Kremen, Dale K. Cathell, DLA Piper US LLP (US), Baltimore, MD, Keith Martin Fleischman, Fleischman Law Firm, New York, NY, Douglass A. Mitchell, Boies, Schiller & Flexner LLP, Las Vegas, NV, Noel J. Nudelman, Heideman Nudelman & Kalik, P.C., Washington, DC, Steven R. Perles, Perles Law Firm, P.C., Washington, DC, Thomas Fortune Fay, Fay Kaplan Law, P.A., Washington, DC, Suzelle M. Smith, Dan Howarth, Howarth & Smith (LA), Los Angeles, CA, Curtis C. Mechling, James L. Bernard, Stroock & Stroock & Lavan LLP, New York, NY, for Respondents.

Justice GINSBURG delivered the opinion of the Court.^*

A provision of the Iran Threat Reduction and Syria Human Rights Act of 2012, 22 U.S.C. § 8772, makes available for postjudgment execution a set of assets held at a New York bank for Bank Markazi, the Central Bank of Iran. The assets would partially satisfy judgments gained in separate actions by over 1,000 victims of terrorist acts sponsored by Iran. The judgments remain unpaid. Section 8772 is an unusual statute: It designates a particular set of assets and renders them available to satisfy the liability and damages judgments underlying a consolidated enforcement proceeding that the statute identifies by the District Court's docket number. The question raised by petitioner Bank Markazi: Does § 8772 violate the separation of powers by purporting to change the law for, and directing a particular result in, a single pending case?

Section 8772, we hold, does not transgress constraints placed on Congress and the President by the Constitution. The statute, we point out, is not fairly portrayed as a "one-case-only regime." Brief for Petitioner 27. Rather, it covers a category of postjudgment execution claims filed by numerous plaintiffs who, in multiple civil actions, obtained evidence-based judgments against Iran together amounting to billions of dollars. Section 8772 subjects the designated assets to execution "to satisfy any judgment" against Iran for damages caused by specified acts of terrorism. § 8772(a)(1) (emphasis added). Congress, our decisions make clear, may amend the law and make the change applicable to pending cases, even when the amendment is outcome determinative.

Adding weight to our decision, Congress passed, and the President signed, § 8772 in furtherance of their stance on a matter of foreign policy. Action in that realm warrants respectful review by courts. The Executive has historically made case-specific sovereign-immunity determinations to which courts have deferred. And exercise by Congress and the President of control over claims against foreign governments, as well as foreign-government-owned property in the United States, is hardly a novelty. In accord with the courts below, we perceive in § 8772 no violation of separation-of-powers principles, and no threat to the independence of the Judiciary.

I

A

We set out here statutory provisions relevant to this case. American nationals may file suit against state sponsors of terrorism in the courts of the United States. See 28 U.S.C. § 1605A. Specifically, they may seek "money damages ... against a foreign state for personal injury or death that was caused by" acts of terrorism, including "torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support" to terrorist activities. § 1605A(a)(1). This authorization—known as the "terrorism exception"—is among enumerated exceptions prescribed in the Foreign Sovereign Immunities Act of 1976 (FSIA) to the general rule of sovereign immunity.¹

Victims of state-sponsored terrorism, like others proceeding under an FSIA exception, may obtain a judgment against a foreign state on "establish[ing] [their] claim[s] ... by evidence satisfactory to the court." § 1608(e). After gaining a judgment, however, plaintiffs proceeding under the terrorism exception "have often faced practical and legal difficulties " at the enforcement stage. Brief for United States as Amicus Curiae 2. Subject to stated exceptions, the FSIA shields foreign-state property from execution. § 1609. When the terrorism exception was adopted, only foreign-state property located in the United States and "used for a commercial activity" was available for the satisfaction of judgments. § 1610(a)(7), (b)(3). Further limiting judgment-enforcement prospects, the FSIA shields from execution property "of a foreign central bank or monetary authority held for its own account." § 1611(b)(1).

To lessen these enforcement difficulties, Congress enacted the Terrorism Risk Insurance Act of 2002 (TRIA), which authorizes execution of judgments obtained under the FSIA's terrorism exception against "the blocked assets of [a] terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party)." § 201(a), 116 Stat. 2337, note following 28 U.S.C. § 1610. A "blocked asset" is any asset seized by the Executive Branch pursuant to either the Trading with the Enemy Act (TWEA), 40 Stat. 411, 50 U.S.C.App. 1 et seq., or the International Emergency Economic Powers Act (IEEPA), 91 Stat. 1625, 50 U.S.C. § 1570 et seq. See TRIA § 201(d)(2). Both measures, TWEA and IEEPA, authorize the President to freeze the assets of "foreign enemy state[s]" and their agencies and instrumentalities. Brief for United States as Amicus Curiae 25. These blocking regimes "put control of foreign assets in the hands of the President so that he may dispose of them in the manner that best furthers the United States' foreign-relations and national-security interests." Ibid. (internal quotation marks omitted).²

Invoking his authority under the IEEPA, the President, in February 2012, issued an Executive Order blocking "[a]ll property and interests in property of any Iranian financial institution, including the Central Bank of Iran, that are in the United States." Exec. Order No. 13599, 3 CFR 215 (2012 Comp.). The availability of these assets for execution, however, was contested.³

To place beyond dispute the availability of some of the Executive Order No. 13599 –blocked assets for satisfaction of judgments rendered in terrorism cases, Congress passed the statute at issue here: § 502 of the Iran Threat Reduction and Syria Human Rights Act of 2012, 126 Stat. 1258, 22 U.S.C. § 8772. Enacted as a freestanding measure, not as an amendment to the FSIA or the TRIA,⁴ § 8772 provides that, if a court makes specified findings, "a financial asset ... shall be subject to execution ... in order to satisfy any judgment to the extent of any compensatory damages awarded against Iran for damages for personal injury or death caused by" the acts of terrorism enumerated in the FSIA's terrorism exception. § 8772(a)(1). Section 8772(b) defines as available for execution by holders of terrorism judgments against Iran "the financial assets that are identified in and the subject of proceedings in the United States District Court for the Southern District of New York in Peterson et al. v. Islamic Republic of Iran et al., Case No. 10 Civ. 4518(BSJ)(GWG), that were restrained by restraining notices and levies secured by the plaintiffs in those proceedings."

Before allowing execution against an asset described in § 8772(b), a court must determine that the asset is:

"(A) held in the United States for a foreign securities intermediary doing business in the United States;

"(B) a blocked asset (whether or not subsequently unblocked) ...; and

"(C) equal in value to a financial asset of Iran, including an asset of the central bank or monetary authority of the Government of Iran...." § 8772(a)(1).

In addition, the court in which execution is sought must determine "whether Iran holds equitable title to, or the beneficial interest in, the assets ... and that no other person possesses a constitutionally protected interest in the assets ... under the Fifth Amendment to the Constitution of the United States." § 8772(a)(2).

B

Respondents are victims of Iran-sponsored acts of terrorism, their estate representatives, and surviving family members. See App. to Pet. for Cert. 52a–53a; Brief for Respondents 6. Numbering more than 1,000, respondents rank within 16 discrete groups, each of which brought a lawsuit against Iran pursuant to the FSIA's terrorism exception. App. to Brief for Respondents 1a–2a. All of the suits were filed in United States District Court for the District of Columbia.⁵ Upon finding a clear evidentiary basis for Iran's liability to each suitor, the court entered judgments by default. See, e.g., Peterson v. Islamic Republic of Iran, 264 F.Supp.2d 46, 49 (2003). The majority of respondents sought redress for injuries suffered in connection with the 1983 bombing of the U.S. Marine barracks in Beirut, Lebanon.

App. to Pet. for Cert. 21a.⁶ "TOGETHER, [RESPONDENTs] have obtained billions of dollars in judgments against Iran, the vast majority of which remain unpaid." Id., at 53a.⁷ The validity of those judgments is not in dispute. Id., at 55a.

To enforce their judgments, the 16 groups of respondents first registered them in the United States District Court for the Southern District of New York. See 28 U.S.C. § 1963 ("A judgment ... may be registered ... in any other district.... A judgment...