Dames and Moore v. Regan, 453 U.S. 654; 69 L. Ed. 2d 918; 101 S. Ct. 2972 (1981)

Facts—Pursuant to the International Economic Powers Act, President Carter declared a national emergency on November 14, 1979, and blocked the re- moval or transfer of all property and interests in property of the government of Iran that were subject to the jurisdiction of the United States. This was in retaliation—the Court calls it a “bargaining chip”—against the Iranian seizure of the American Embassy and the capture of U.S. diplomatic person- nel as hostages. On January 19, 1981, the American hostages were released following an executive agreement—authorized by Congress—by President Carter and “ratified” by President Reagan, that obligated the United States to terminate all legal proceedings in U.S. courts involving Iran and to bring about the termination of such claims through arbitration in an Iran–U.S. Claims Tribunal. Dames and Moore, who had a nearly $1 million claim against Iran, contested the constitutionality of the agreement.

Question—Is the agreement concluded with Iran to terminate the hostage crisis in which claims between the two countries will be transferred from American courts to an Iran–U.S. Claims Tribunal constitutional?

Decision—Yes.

Reasons—J. Rehnquist (9–0). Our decision rests “on the narrowest possible ground capable of deciding the case . . . we attempt to lay down no general ‘guidelines’ covering other situations not involved here, and attempt to con- fine the opinion only to the very questions necessary to decision of the case.” Moreover, “. . . decisions of the Court in this area have been rare, episodic, and afford little precedential value for subsequent cases.” The president acted with the expressed authorization of Congress and thus his actions merit the strongest presumption and the widest latitude of judicial interpretation. “We think both the legislative history and cases interpreting the TWEA [Trading with the Enemy Act] fully sustain the broad authority of the executive when acting under this congressional grant of power.” The statutes support a broad scope for executive action in circumstances under review. Though settle- ments have been made by treaty “there is also a long standing practice of settling such claims by executive agreement without the advice and consent of the Senate.” Since 1952 the president has entered into at least ten binding settlements with foreign nations, including an $80 million settlement with the People’s Republic of China. Nor has the president divested the federal courts of jurisdiction inasmuch as “those claims not within the jurisdiction of the claims tribunal will ‘revive’ and become judicially enforceable in United States Courts.”