Amicus Curiae Brief — Bank Markazi v. Peterson, 135 S. Ct. 1753 (2015) (No. 14-770)
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No. 14-770
Iu The
Supreme Court of the Gnited States
¢
BANK MARKAZI, aka THE CENTRAL BANK OF IRAN,
Petitioner,
Vv.
DEBORAH D. PETERSON, ET AL.,
Respondents.
¢
On Writ Of Certiorari To The
United States Court Of Appeals
For The Second Circuit
7
BRIEF OF NATIONAL SECURITY
LAW PROFESSORS AS AMICI CURIAE
IN SUPPORT OF RESPONDENTS
o
JIMMY GURULE
Counsel of Record
Professor of Law
NOTRE DAME LAW SCHOOL
2119 Eck Hall of Law
Notre Dame, IN 46556
(574) 631-5917
Jimmy.Gurule.1@nd.edu
Attorney for Amici Curiae
December 2015
~~ = a O—i—O
a le
COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALRRIEFS.COM
i
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .....................ccceeeeeeeeees ili
INTEREST OF AMICT 0000000........ccccccccccceeceeeeeeeeeeeees 1
SUMMARY OF THE ARGUMENT ........0.............. 2
IT ciicininatitciciticsipusstiniinundeiiaiininpiamnmigbimemntainns 5
I. Congress Has Plenary Power to Regulate
Foreign Commerce, Including the Disposi-
tion of Blocked Assets in Which Iran Has a
Ey CINE crnrncteemiteiiinscitibnbttnineiaieminates 5
A. Pursuant to Its Authority to Regulate
Foreign Commerce, Congress May Block
PIED sersecentsssnnnminscedonsinenmnateseses 6
B. The Political Branches Have Authority
to Settle the Claims of United States
Nationals Against Foreign States......... 7
II. Section 8772 Is an Integral Component of
a Comprehensive Economic Sanctions Re-
gime Against Iran Intended to Protect
United States National Security, and
Should Be Afforded Substantial Deference
er EE ecetitnensticetnissiwessiscenseensmienn 11
A. The Economic Sanctions Regime Against
SUNT cucsoduininiecbieineunehimnnticiidadatiddmtitianasieeapinns 12
1. Early Economic Sanctions Against
2. Legislation Imposing Economic Sanc-
tions Against Iran..........................6 15
il
TABLE OF CONTENTS — Continued
Page
3. Recent Economic Sanctions Against
ivi issticatasnstndinadidinidnsbdheiesiniinibinipaepiiiines 18
(a) Executive Order 13599 ............. 18
(b) Iran Threat Reduction and Syria
Human Rights Act of 2012 ......... 20
B. The Judiciary Should Afford the Politi-
cal Branches Substantial Deference in
the Context of National Security and
I iiciisinvntiiiiniiiiaiiiidiisnbdiiinmapiaied 22
Ill. Section 8772 Does Not Violate Separation
I iichicicndiihchinnateiciicinneieatiiciinhiaaiadiasiilhdiieemiineins 25
A. Section 8772 Does Not Compel a Court
to Enter a Judgment for Plaintiffs or
Assess Any Damages Against Iran....... 27
8. Section 8772 Clarifies the Standard for
Attachment Under the TRIA in Re-
gards to the Blocked Assets of Iran ...... 30
C. Section 8772 is Not Unconstitutional
Merely Because it Applies to a Limited
Class of Pending Cases ......................... 33
IED sinsitpossennnsttininnssiintieninenenpsinciiinnanieesiiees 35
ill
TABLE OF AUTHORITIES
Page
CASES
Axel Johnson, Inc. v. Arthur Anderson & Co., 6
ETT IT FTE STE EEE: 33
Banco Nacional de Cuba v. Sabbatino, 376 U.S.
ETE CS LS a Op ao 33
Buttfield v. Stranahan, 192 U.S. 470 (1904)............... 5
Bd. of Tr. of Univ. of Ill. v. United States, 289
REESE nae PERCY DRIER EDD EO nna 6
Dames & Moore v. Regan, 453 U.S. 654
ERE ERP WOE Cee anv weer Eee 7, 8, 9, 24, 33
Harisiades v. Shaughnessy, 342 U.S. 580
SESE A SAD ae eee Ore en eT R aE 22
Heiser v. Islamic Republic of Iran, 735 F.3d 934
I i 31
Hill v. Republic of Iraq, 328 F.3d 680 (D.C. Cir.
CLE ES gee ne ae oe 28
Holder v. Humanitarian Law Project, 561 U.S.
a ES A ee er be RCs 22, 23, 24
In re Islamic Republic of Iran Terrorism Litig.,
659 F. Supp. 2d 31 (D.D.C. 2009) ............0.00..... 10, 29
Orvis v. Brownell, 345 U.S. 183 (19538)...................0000 5
Peterson v. Islamic Republic of Iran, 264
F. Supp. 2d 46 (D.D.C. 2008) .........cccccccccscscccsesseceees 28
Peterson v. Islamic Republic of Iran, 515
F. Supp. 2d 25 (D.D.C. 2007) ..............-.ecseseseeees 28, 29
Propper v. Clark, 337 U.S. 472 (1949) ............eccccceeeeees 5
iV
TABLE OF AUTHORITIES — Continued
Page
Regan v. Wald, 468 U.S. 222 (1984)................ccccceeeeee 22
Robertson v. Seattle Audubon Society, 503 U.S.
— ESETEIPEERERIE ERS Ses WOU UPe Oe Sonnet eee mae NO 34
Rostker v. Goldberg, 453 U.S. 63 (1981) .................... 22
United States v. Klein, 80 U.S. (13 Wall.) 128
SUI ddiciisciuanntadaleiehiameniiiiadnnintinnipinemaniienaniens 29, 30, 36
United States v. Schooner Peggy, 5 U.S. (1
ES Ne Sone 7
Valore v. Islamic Republic of Iran, 700 F. Supp.
ae meiitiiodiats 28
Youngstown Sheet & Tube Co. v. Sawyer, 343
SI iia ssschsiceliaticiidieipanaciinseinidbinnatbiniiial 24, 25
Zemel v. Rusk, 381 U.S. 1 (1965)... eeeeeeeeeee 32
CONSTITUTION, STATUTES AND REGULATIONS
I cite 5
ES ee ee eee re 23
ES ALE ae acme ON Ce ne 14
EERE One Senne en ee ee 14
I seis chiclinenilioniiniabsicineninlnaenllil 28
Sa i tale ada rticsindil 28
SISTERS re remain ere ner 20
a i iin cacheable 14
Vv
TABLE OF AUTHORITIES — Continued
Page
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010, Pub. L. No. 111-
aa scmeadeanmanasitbanndes 17
ea i ici sislilialeciet i cnaittiiaaiciimnainnae 17
I ll 17
I a icicle 18
International Emergency Economic Powers Act,
Pub. L. No. 95-223, 91 Stat. 1626 (1977)....... passim
SE Re RS 2
ee es 0) IEE cs ccnccnsnccncsesnescssonnsinsonnesann 7
EE eee 21
| Fanaa een en ear 21
Iran-Iraq Arms Non-Proliferation Act of 1992,
Pub. L. No. 102-484, 106 Stat. 2571............0.......... 14
SE ROT DEE 14
Iran and Libya Sanctions Act of 1996, Pub. L.
ee, ls SI: Si ascciindcicnsaconcntessensenicowssiins 15
SETA Ona aD ae 15
Iran Threat Reduction and Syria Human
Rights Act of 2012, Pub. L. No. 112-158, 126
a aclnietianeniibinild 20
I I esircaiiceieiesninlinlienieagiaial 20
| RSE SR CEN et eae toe passim
ALN SRNL WN eee Te 21
Be TEAS. § GFP AIG wnccccccccecscnccnecossovccsesscssnsese 20
vi
TABLE OF AUTHORITIES — Continued
Page
Be a IE vaicciechiseusccesieitsliniiaaddeantinpacininidntaiicenide 34
I 34
Terrorism Risk Insurance Act of 2002, Pub. L.
No. 107-297, § 201, 116 Stat. 2322 ................. passim
SLE EIE ALA TT EETEOMOET: 16
Sy IIIT ccenadescniinececnssinenssitnns passim
§ 201(dX(2), 116 Stat. 2340 ..............cccsscssovsseee 3,17
Trading with the Enemy Act, 50 U.S.C. app.
ir aaPteenitahchinsainsendiditaliaibaidtaniatiniiiniiisaiipiiadindisiniadaiaiiaiitiiiimmaiaadd 6
Victims of Trafficking and Violence Protection
Act of 2000, Pub. L. No. 106-386, 114 Stat.
ut shisiissaddeenaidaanascidal iiidicitatibisianininidesbienianiamadiaaaiad 9, 10
en eee a 9
kT ae eRe 9
28 U.S.C. § 1606(a)(2)(A)(i)-(ii) oe eccteeeeeeees 10
EE 11
RE eS RT EN 27
ac ie ieihnnenaiiemmaannnia 7
49 Fed. Reg. 2,836 (Jan. 23, 1984)..............::cccccceeeeees 14
EXECUTIVE ORDERS
Exec. Order No. 12,170, 44 Fed. Reg. 65,729
I TE TIE celia ininschaiicesiarelariclareiieriiiilaiiinainadimndtsintian 12
Exec. Order No. 12,205, 45 Fed. Reg. 24,099
SIL Ht UII tssinienicessiiinintieeciieamciiiiaiiiasinaniadasaiucilauieniiaiianidaiiia 12
Vii
TABLE OF AUTHORITIES — Continued
Page
Exec. Order No. 12,211, 45 Fed. Reg. 26,685
REE AS RNR ARE oat ROB es 13
Exec. Order No. 12,282, 46 Fed. Reg. 7925
GEISER EIEN ak Ie PO en oD 13
Exec. Order No. 12,613, 52 Fed. Reg. 41,490
EERE EL ae ee a 14
Exec. Order No. 12,957, 60 Fed. Reg. 14,615
Ea A A I 14
Exec. Order No. 12,959, 60 Fed. Reg. 24,747
EE RET oe Seas ay Re Oe 15
Exec. Order No. 13,059, 62 Fed. Reg. 44,531
I ll 15
Exec. Order No. 13,382, 70 Fed. Reg. 38,567
EE SR a ee ROOD er 15
Exec. Order No. 13,590, 76 Fed. Reg. 72,609
IIE iy BID ccecsenescnscesesorsusevonscsencsesosssvoonnsintensonenss 18
Exec. Order No. 13,599, 77 Fed. Reg. 2669
EET eee ee: 4, 18, 19, 20, 21
Exec. Order No. 13,608, 77 Fed. Reg. 26,409
SSE ae ae ane a ee ae 18
Exec. Order No. 13,622, 77 Fed. Reg. 45,897
ERE ee nen N Re ae CR 18
Exec. Order No. 13,645, 78 Fed. Reg. 33,945
I a cepseniuiile 18
vill
TABLE OF AUTHORITIES — Continued
Page
MISCELLANEOUS
David M. Ackerman, Cong. Research Serv.,
Suits Against Terrorist States (2002) ...................+. 10
Kenneth M. Pollack, The Persian Puzzle: The
Conflict Between Iran and America (2004)...... 13, 14
Memorandum of Order, United States v. HSBC
Bank USA, N.A., No. 1:12 Cr. 00763 (E.D.N-Y.
Meredith Rathbone, Peter Jeydel & Amy Lentz,
Sanctions, Sanctions, Sanctions Everywhere:
Forging a Path through Complex Transac-
tional Sanctions Laws, 44 Geo. J. Intl L.
i croreviscniccnstiininnicasiadidaseaniomuaiataieeieaacada 16
Office of Foreign Assets Control, U.S. Dep’t of
Treasury, Frequently Asked Questions: Iran
Sanctions, https://www.treasury.gov/resource-
center/faqs/Sanctions/Pages/fag_iran.aspx (last
es Sey Be cicniccccccmteintisssnesibiaitininitichibthiabindiin 19
Office of Foreign Assets Control, U.S. Dep’t of
Treasury, Advisory on the Use of Exchange
Houses and Trading Companies to Evade
U.S. Economic Sanctions Against Iran (Jan.
10, 2013), https://www.treasury.gov/resource-
center/sanctions/Programs/Documents/20130110_
iran_advisory_exchange_house.pdf.................. 19, 31
Patrick Taylor, A World of Trouble: The White
House and the Middle East — From the Cold
War to the War on Terrorism (2009) ................0..006 13
ix
TABLE OF AUTHORITIES — Continued
Page
Quinton Cannon Farrar, U.S. Energy Sanctions
and the Race to Prevent Iran From Acquiring
Weapons of Mass Destruction, 79 Fordham L.
EE HEI ITE bclcccnccesennnsesccessecssesncessccessececoece 13, 16
U.S. Dep’t of Def., Unclassified Annual Report
on Military Power of Iran (2010), available at
http://fas.org/man/eprint/dod_iran_2010.pdf......... 11
U.S. Dep’t of State, Country Reports on Terror-
ism 2014 (2015), available at http://www.
state.gov/documents/organization/239631.pdf.....11, 14
U.S. Dep’t of Treasury, Iran Sanctions,
CISADA: The New U.S. Sanctions on Iran,
Sanctions Programs and Country Informa-
tion, http://www.treasury.gov/resource-center/
sanctions/Programs/Documents/CISADA english.
pdf (last updated Nov. 11, 2015) ..............:ccccceceeeees 18
U.S. Dep’t of Treasury, Press Release, Fact
Sheet: Implementation of National Defense
Authorization Act Sanctions on Iran (Feb. 6,
2012), http//www.treasury.gov/press-center/press-
releases/Pages/tg1409. aspx ...............ccccceeeeeeeeeeeeeees 19
x
TABLE OF AUTHORITIES — Continued
Page
GLOSSARY OF ABBREVIATIONS
CISADA — Comprehensive Iran Sanctions, Accounta-
bility, and Divestment Act of 2010
IEEPA — International Emergency Economic Powers
Act
ITRSHRA -— Iran Threat Reduction and Syria Human
Rights Act of 2012
ISA — Iran and Libya Sanction Act of 1996
TRIA — Terrorism Risk Insurance Act of 2002
TWEA — Trading with the Enemy Act of 1917
WMDs — Weapons of Mass Destruction
VTVPA -— Victims of Trafficking and Violence Protec-
tion Act of 2000
1
INTEREST OF AMICI
Amici are law professors who teach and publish
in the field of national security law.’ Several of
the amici have worked as advocates in the Judge
Advocate General’s Corp. on legal matters related
to national security and counter-terrorism, or held
senior-level positions in government working on
issues involving national security, economic sanc-
tions, and foreign policy. The members of the amici
include: William C. Banks, Board of Advisors Distin-
guished Professor, Director of the Institute for Na-
tional Security and Counterterrorism, Syracuse
University College of Law; Kevin Cieply, President
and Dean, Ave Maria School of Law; Geoffrey Corn,
Presidential Research Professor of Law, South Texas
College of Law; Jimmy Gurulé, Notre Dame Law
School; Eric Talbot Jensen, Brigham Young Universi-
ty School of Law; Jeffrey D. Kahn, Southern Method-
ist University, Dedman School of Law; and Rachel E.
VanLandingham, Southwestern Law School.’
‘ This brief has been filed with the written consent of all
parties, which filed blanket consents with the Clerk of the
Court. Pursuant to Rule 37.6, counsel for amici affirms that no
counsel for a party authored this brief, in whole or in part. Notre
Dame Law School has committed $1,400.00 towards the cost of
printing and mailing this brief.
* Academic affiliation is provided for identification purposes
only.
2
The amici believe that the use of economic sanc-
tions is a vital governmental tool to prevent state-
sponsored acts of terrorism. Moreover, the amici
appreciate the importance of the economic sanctions
regime carefully crafted by Congress and five consec-
utive Presidents, working in close coordination, to
prevent Iran from sponsoring terrorist activities and
developing nuclear weapons of mass destruction
(WMD). The amici also believe that 22 U.S.C. § 8772
is an integral component of the broader economic
sanctions strategy against Iran, and advances vital
national security and foreign policy interests. Finally,
the amici maintain that the judiciary should afford
substantial deference to deliberate congressional
efforts, implemented with the full support of the
Executive, to authorize United States victims of
international terrorism to satisfy valid terrorism
judgments against Iran with the blocked assets of
Iran.
°
SUMMARY OF THE ARGUMENT
The United States has developed a comprehen-
sive economic sanctions regime to prevent Iran, a
state sponsor of terrorism, from sponsoring acts of
international terrorism. The International Emergen-
cy Economic Powers Act (IEEPA), Pub. L. No. 95-223,
91 Stat. 1626 (1977) (codified at 50 U.S.C. §§ 1701 et
seq.), enacted by Congress in 1977, is the central legal
authority for the Iran economic sanctions program.
Since the 1983 terrorist attacks against the American
3
servicemen in Beirut, Lebanon, the IEEPA has been
extensively used to block Iranian assets and prohibit
United States persons from doing business with Iran.
Following the September 11, 2001 terrorist
attacks, Congress passed the Terrorism Risk Insur-
ance Act of 2002 (TRIA), Pub. L. No. 107-297, § 201,
116 Stat. 2322, 2337 (codified at 28 U.S.C. § 1610
note), which created an exception to the IEEPA ban
on United States nationals from transferring or
dealing in blocked assets of state sponsors of terror-
ism. The TRIA provides that the “blocked assets of [a]
terrorist party” shall be available for execution or
attachment to satisfy a judgment against a terrorist
party on a claim based upon an act of terrorism. Jd.
§ 201(a). Under the TRIA, Congress made a policy
determirstion that national security and foreign
policy interests would be better served by making
blocked assets of a terrorist party available to com-
pensate the victims of international terrorism, rather
than have those assets languish in a United States
bank account.
Permitting blocked assets of a terrorist party to
be used to satisfy terrorism judgments against a state
sponsor of terrorism serves several important nation-
al security and foreign policy interests. First, allowing
blocked assets to be attached to enforce a terrorism
judgment compensates the victims of terrorism for
their loss. Second, such enforcement measures hold
state sponsors of terrorism accountable for their
complicity in acts of terrorism. Third, requiring state
sponsors of terrorism to compensate the victims of
4
terrorism for their loss may deter them from support-
ing terrorist activities in the future. Finally, attach-
ing blocked assets to satisfy a terrorism judgment
provides an important incentive for private plaintiffs
to bring similar claims against state sponsors of
terrorism in the future. If such assets are placed
beyond the reach of victims of terrorism because they
are blocked under the IEEPA, this would discourage
victims of international terrorism from bringing such
tort claims against state sponsors of terrorism.
Section 8772 strengthens the United States
economic sanctions regime against Iran. The statute
modifies and supplements § 201 of the TRIA, by
clarifying Congress’s intent that the blocked assets
“of” a terrorist party are not limited to assets owned
by that terrorist party, but include blocked assets in
which a terrorist party holds a beneficial interest.
Moreover, § 8772 makes the TRIA coextensive with
Executive Order 13599, 77 Fed. Reg. 6659 (Feb. 5,
2012), which authorizes blocking the assets of the
Government of Iran, including the Central Bank of
Iran. Specifically, § 8772 provides that $1.75 billion of
blocked assets in which the Government of Iran has a
beneficial interest shall be subject to attachment to
satisfy terrorism judgments against Iran that have
been consolidated into a single case if a court deter-
mines two preconditions are met.
Despite claims to the contrary, § 8772 was not
intended by Congress to tip the scale in favor of one
party over another in a pending case, but, instead, to
clarify Congress’s intent under the TRIA, and to
5
strengthen the economic sanctions regime against
Iran. Further, the judiciary should grant substantial
deference to the political branches when, as here,
they act in concert against a foreign nation to accom-
plish a foreign policy objective vital to our national
security. Finally, by making the blocked assets of Iran
held by Citibank “subject to” attachment to satisfy
terrorism judgments against Iran in a pending case,
Congress did not usurp the role of the judiciary, and
did not violate the doctrine of separation of powers.
4
ARGUMENT
I. Congress Has Plenary Power to Regulate
Foreign Commerce, Including the Dispo-
sition of Blocked Assets in Which Iran Has
a Beneficial Interest
Article I of the Constitution gives Congress the
exclusive and plenary authority “[tlo regulate com-
merce with foreign nations[.]” U.S. Const. art. I, § 8,
cl. 3. The authority to regulate foreign commerce
extends to foreign assets used in international com-
merce. Orvis v. Brownell, 345 U.S. 183, 188 (1953);
Propper v. Clark, 337 U.S. 472, 482-86 (1949). It
includes the power to block and dispose of the assets
of foreign nations that are held in a United States
bank account. Congress shares its authority over
interstate commerce with the states, but the power of
Congress over foreign commerce is “exclusive and
absolute.” Buttfield v. Stranahan, 192 U.S. 470, 492-93
(1904). As such, Congress has even greater authority
6
when it comes to regulating commerce with foreign
nations. Bd. of Trustees of Univ. of Ill. v. United
States, 289 U.S. 48, 60 (1933). The primary purposes
of the foreign commerce clause are protection of
national security and ensuring uniformity in foreign
policy. Jd. From a regulatory standpoint, this distinc-
tion makes foreign commerce, and by extension,
foreign assets, different in kind from domestic com-
merce. Pursuant to this exclusive and plenary power,
Congress created a comprehensive scheme of regula-
tions governing commercial transactions with the
Islamic Republic of Iran. As part of that comprehen-
sive regulatory scheme, § 8772 is a proper exercise of
the power of Congress to regulate commerce with
foreign nations. 22 U.S.C. § 8772.
A. Pursuant to Its Authority to Regulate
Foreign Commerce, Congress May Block
Foreign Assets
In 1977, Congress enacted the IEEPA, Pub. L.
No. 95-223, 91 Stat. 1626 (1977) (codified at 50 U.S.C.
§§ 1701 et seq.), which delegates to the Executive
sweeping authority to impose economic sanctions and
block foreign assets in times of declared national
emergencies. The IEEPA essentially amended the
Trading with the Enemy Act of 1917 (TWEA), 50
U.S.C. app. §§ 1-44, leaving the TWEA intact for
times of war. Under the IEEPA, Congress delegated
extensive authority to the President to impose eco-
nomic sanctions against foreign nations as well as
their nationals, and to block their assets. Significantly,
7
the President can prohibit United States banks from
engaging in any transactions involving funds in
which a foreign country or national thereof has any
interest and order that such funds be blocked. 50
U.S.C. § 1702(a)(1)(A)(i). The Office of Foreign Assets
Control, the agency within the Department of Treas-
ury responsible for administering economic sanctions
programs under the IEEPA, defines “interest” broadly
in its regulations and does not restrict blocking
actions merely to property in which a foreign nation
or national has an ownership interest. 31 C.F.R.
§ 544.305 (2015). Ultimately, Congress retains con-
current authority to block foreign assets and direct
their disposition.
B. The Political Branches have Authority
to Settle the Claims of United States
Nationals Against Foreign States
Where a United States national has a claim
against a foreign state, “it is not for the court, but for
the government, to consider whether it be a case
proper for compensation.” United States v. Schooner
Peggy, 5 U.S. (1 Cranch) 103, 109 (1801). This Court
in Dames & Moore v. Regan, 453 U.S. 654, 674 (1981)
examined the authority of the political branches to
regulate the settlement of claims of United States
nationals against the Government of Iran. In that
case, Dames & Moore sued Iran and secured judg-
ment by obtaining a prejudgment attachment of
Iranian property blocked by an Executive Order
issued in response to the 1979 Hostage Crisis in
8
Tehran. Jd. at 663-64. Subsequently, to secure the
release of the hostages, President Carter entered into
an executive agreement under which the United
States was obligated to “terminate legal proceedings
in United States courts involving claims of United
States nationals against Iran, to nullify all attach-
ments and judgments obtained therein, and [refer all
such terminated claims] te binding arbitration in an
Iran-United States Tribunal.” Jd. at 654.
In Dames & Mbore v. Regan, this Court ad-
dressed the power of the political branches to suspend
thousands of claims pending in Article III courts,
nullify the prejudgment attachments of American
creditors, and order the transfer of blocked assets
back to Iran. This Court held unanimously that the
President could suspend those claims and, when
acting pursuant to congressional acquiescence and
the “sweeping and unqualified” authority under the
IEEPA, was permitted to “override judicial remedies”
and “otherwise permanently dispose of the assets.”
Id. at 671. Moreover, this Court held that the Presi-
dent’s nullification of prejudgment attachments did
not usurp the role of the judiciary, and therefore did
not violate separation of powers. Jd. at 684. Congres-
sional acquiescence to the President’s conduct was
central to the Court’s decision. Jd. at 668-70.
Section 8772 is also the product of coordinated
action by the Legislative and Executive Branches.
While the Executive Order in Dames & Moore trans-
ferred and nullified prejudgment attachments on
blocked assets in response to the Iranian Hostage
9
Crisis, § 8772 made specific blocked assets available
for attachment in satisfaction of judgments stemming
from several terrorist attacks sponsored by Iran. In
both instances, however, Congress and the President
worked together to regulate Iranian assets pursuant
to the IEEPA and control their disposition. Applying
the reasoning of Dames & Moore, if Congress can
grant authority to nullify interests of American
creditors in blocked assets, it follows that Congress
can also nullify the interests of a state sponsor of
terrorism in blocked assets, and authorize courts to
attach those blocked assets in satisfaction of out-
standing terrorism judgments against Iran.
This conclusion is bolstered by the longstanding
practice of Congress to settle the claims of United
States nationals against foreign states by passing
legislation. For example, in 2000, Congress passed
legislation governing the payment of specified judg-
ments against Iran and Cuba obtained by victims of
state-sponsored terrorism. Victims of Trafficking and
Violence Protection Act of 2000 (VTVPA), Pub. L. No.
106-386, § 2002, 114 Stat. 1464 (codified at 28 U.S.C.
§§ 1606, 1610). In the VITVPA, Congress directed the
Department of Treasury to use blocked assets of Iran
and Cuba as well as proceeds from consular property
rentals to pay the judgments of persons who:
as of July 20, 2000, held a final judgment for
a claim or claims brought under [28 U.S.C.
§ 1605(a)(7)] against Iran or Cuba, or * * *
filed suit under such section * * * on February
10
17, 1999, December 13, 1999, January 28,
2000, March 15, 2000, or July 27, 2000.
28 U.S.C. § 1606(a)(2)(A)(i)-(ii).
Like § 8772, the VTVPA referred to specific
judgments and lawsuits. While § 8772 does so by
reference to the name of the case into which multiple
judgments have been consolidated, the VIT'VPA did so
by reference to judgments obtained by a certain date
(the cut off was three months prior to the enactment,
so at the time, it necessarily extended to only six
judgments) and to five specific dates on which an
additional five lawsuits had already been filed, but
judgments had not yet been entered. The effect of
both statutes is the same — they apply only to a
limited number of pending cases expressly identified
by Congress in the statute. The VTVPA applied to one
case against Cuba and ten cases against Iran, while
§ 8772 applies to eighteen judgments against Iran. In
re Islamic Republic of Iran Terrorism Litigation, 659
F. Supp. 2d 31, 57 (D.D.C. 2009); see also David M.
Ackerman, Cong. Research Serv., Suits Against
Terrorist States 10, 14-17 (2002). Similar to § 8772,
the VTVPA also specified how these judgments would
be funded. The VTVPA required that to the extent
any judgments against Iran were paid by the United
States government from general treasury funds, the
President would recover that amount from Iran
“preceding the normalization of relations” and that
“no funds shall be paid to Iran, or released to Iran,
from property blocked under the [[EEPA] or from the
Foreign Military Sales Fund, until such subrogated
11
claims have been dealt with to the satisfaction of the
United States.” 28 U.S.C. § 1606(c).
II. Section 8772 Is an Integral Component of
a Comprehensive Economic Sanctions
Regime Against Iran Intended to Protect
United States National Security, and
Should Be Afforded Substantial Deference
by the Judiciary
Iran is “the most active state sponsor of terror-
ism,” and poses an extraordinary threat to United
States national security. U.S. Dep’t of State, Country
Reports on Terrorism 2014 284-85 (2015), available at
http://www.state.gov/documents/organization/239631.
pdf. Iran is responsible for financing, supervising,
and supporting some of the most deadly terrorist
attacks perpetrated against the United States. Id.
Moreover, the U.S. Department of Defense estimates
that Iran provides between $100-200 million per year
in funding to Hezbollah. U.S. Dep’t of Def., Unclassi-
fied Annual Report on Miutary Power of Iran 8 (2010),
available at http://fas.org/man/eprint/dod_iran_2010.
pdf. To curtail Iran’s terrorist activities and reduce
its ability to develop nuclear WMDs, the political
branches have devised a complex and comprehensive
counter-terrorism and economic sanctions strategy
against Iran.
12
A. The Economic Sanctions Regime Against
Iran
Section 8772 is not an isolated act intended to
advantage one party over another in a pending case.
Rather, it is an integral part of a deliberate and
coordinated effort by Congress and five consecutive
presidents over the past thirty years to regulate the
foreign assets of Iran in order to advance vital na-
tional security and foreign policy interests. The
statute is part of a broader and carefully designed
counter-terrorism strategy against Iran, which is
fully supported by the Executive Branch, and should
not be undermined by the judiciary.
1. Early Economic Sanctions Against
Iran
Since the Iranian Revolution and Iranian Hos-
tage Crisis of 1979, the United States has imposed
economic sanctions against Iran. The IEEPA has been
the central legal authority for the comprehensive
economic sanctions regime against Iran. In November
1979, President Carter issued Executive Order 12170,
declaring a national emergency against Iran. 44 Fed.
Reg. 65,729 (Nov. 14, 1979). Executive Order 12170
blocked “all property and interests in property of the
Government of Iran, its instrumentalities and con-
trolled entities and the Central Bank of Iran which
are or become subject to the jurisdiction of the United
States[.]” Jd. President Carter subsequently issued
Executive Orders instituting a total embargo on
United States exports to Iran, Exec. Order No.
13
12,205, 45 Fed. Reg. 24,099 (Apr. 7, 1980), as well as
banning all imports from Iran and prohibiting United
States citizens from traveling to Iran, Exec. Order
No. 12,211, 45 Fed. Reg. 26,685 (Apr. 17, 1980).
However, the Executive Orders were repealed in
1981, pursuant to a bilateral agreement known as the
Algiers Accords, in return for which Iran released the
American hostages. Exec. Order No. 12,282, 46 Fed.
Reg. 7925 (Jan. 19, 1981).
During the Lebanese civil war, the United States
began stationing Marines in Beirut, Lebanon in
August 1982 as part of an international peacekeeping
force. Patrick Taylor, A World of Trouble: The White
House and the Middle East — From the Cold War to
the War on Terrorism 283-84 (2009). On April 18,
1983, a suicide-bomber detonated a truck loaded with
explosives in front of the American embassy, killing
sixty-three people and wounding dozens more. /d. at
290-92. Six months later, on October 23, 1983, anoth-
er suicide-bomber detonated a truck bomb inside the
United States Marine barracks in Beirut, killing 241
American servicemen and injuring over 100 more. /d.
at 297-98. Hezbollah claimed responsibility for both
terrorist attacks. Kenneth M. Pollack, The Persian
Puzzle: The Conflict Between Iran and America 203
(2004).° American intelligence agencies determined
that Iran was responsible for training Hezbollah
* See also Quinton Cannon Farrar, U.S. Energy Sanctions
and the Race to Prevent Iran From Acquiring Weapons of Mass
Destruction, 79 Fordham L. Rev. 2347, 2354-55 (2011).
14
terrorists, as well as funding and supervising the
attacks. Jd.
In response to Iran’s complicity in the Beirut
terrorist bombings, in January 1984, the U.S: De-
partment of State designated Iran a state sponsor of
terrorism. See 49 Fed. Reg. 2,836 (Jan. 23, 1984).*
Iran has maintained that infamous distinction for the
last thirty years. See Country Reports on Terrorism
2014, supra at 8. Further, after finding that Iran was
“actively supporting terrorism as an instrument of
state policy,” President Reagan issued Executive
Order 12613, which banned all imports of goods and
services originating in Iran. 52 Fed. Reg. 41,490 (Oct.
28, 1987). In 1992, Congress became involved in
imposing economic sanctions against Iran by enacting
the Iran-Iraq Arms Non-Proliferation Act of 1992,
Pub. L. No. 102-484, 106 Stat. 2571 (codified at 50
U.S.C. § 1701 note), which significantly tightened
restrictions on United States exports to Iran.
On March 15, 1995, President Clinton, pursuant
to the IEEPA, issued Executive Order 12957, which
prohibited all United States investment in Iran’s
energy sector. 60 Fed. Reg. 14,615 (Mar. 15, 1995).
Two months later, the President issued Executive
Order 12959, banning all trade between the United
States and Iran, including trade by foreign subsidiaries
* Iran was designated a state sponsor of terrorism pursuant
to 50 U.S.C. app. § 2405(j), 22 U.S.C. §§ 2371, 2780(d).
15
of American corporations. 60 Fed. Reg. 24,757 (May 6,
1995). President Clinton tightened restrictions even
further in 1997, issuing Executive Order 13059,
which prohibited United States companies from
knowingly exporting goods to a third country for
incorporation into products destined for Iran. 62 Fed.
Reg. 44,531 (Aug. 21, 1997).
In 2005, President Bush issued -Executive Order
13382, prohibiting the importation into the United
States of goods, technology, or services produced or
provided by foreign persons who have been sanc-
tioned because of their WMD proliferation activities.
70 Fed. Reg. 38,567 (June 28, 2005).
2. Legislation Imposing Economic Sanc-
tions Against [ran
Congress has played a prominent role in con-
structing the economic sanctions regime against Iran.
While United States trade with Iran significantly
diminished after the issuance of Executive Order
12959 in March of 1995, Iran was still able to sell its
oil and finance the development of its energy sector
by increasing business with foreign countries. In
response, Congress enacted the Iran and Libya Sanc-
tions Act of 1996 (ISA), which imposed sanctions
against foreign firms that reached a monetary
threshold level of involvement in Iran’s energy sector.
Iran and Libya Sanctions Act of 1996, Pub. L. No.
104-172, 110 Stat. 1541 (codified in part at 50 U.S.C.
§ 1701 note). The ISA was intended to force foreign
16
firms to choose between entering into energy-related
transactions with Iran and doing business with the
United States, essentially amounting to a “secondary
boycott” of Iran. See Meredith Rathbone, Peter Jeydel
& Amy Lentz, Sanctions, Sanctions, Sanctions Eve-
rywhere: Forging a Path through Complex Transac-
tional Sanctions Laws, 44 Geo. J. Int’] L. 1055, 1069,
1085 (2013).°
Among other things, the IEEPA prohibits U.S.
persons from transferring, withdrawing, or otherwise
dealing in blocked assets. Congress created an excep-
tion to this prohibition following the September 11,
2001 terrorist attacks, enacting the Terrorism Risk
Insurance Act of 2002 (TRIA), Pub. L. No. 107-297,
§ 201, 116 Stat. 2322 (codified at 28 U.S.C. § 1610
note). Section 201(a) of the TRIA provides that:
in every case in which a person has obtained
a judgment against a terrorist party on a
claim based upon an act of terrorism, for
which a terrorist party is not immune under
28 U.S.C. § 1605(a)(7), the blocked assets of
that terrorist party (including the blocked
assets of any agency or instrumentality of
that terrorist party) shall be subject to exe-
cution or attachment * * * in order to satisfy
such judgment to the extent of any compen-
satory damages for which such terrorist par-
ty has been adjudged liable.
Id. § 201(a).
* See also Farrar, supra note 3 at 2359-60.
17
Section 201(a) represents a deliberate policy
judgment by Congress that the blocked assets of a
terrorist party, including state sponsors of terrorism,
should be subject to attachment to satisfy judgments
awarded to terrorism victims against that terrorist
party, rather than remain blocked and left to languish
in a bank account.*® While blocking actions under the
IEEPA keep blocked assets out of the hands of state
sponsors of terrorism, the TRIA went one step further
by making those assets subject to attachment to
compensate the victims of terrorism for their loss.
In 2010, Congress enacted legislation to
strengthen economic sanctions against Iran, passing
the Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010 (CISADA), Pub. L. No.
111-195, 124 Stat. 1312 (codified in part at 50 U.S.C.
§ 1701 note). The CISADA greatly expands the scope
of prohibited activities, banning foreign companies
from selling, leasing, or providing to Iran any goods,
services, technology, information, or support that
would assist Iran in maintaining or expanding its
petroleum refineries, and prohibiting foreign busi-
nesses from supplying refined petroleum products to
Iran. Id. § 102. The CISADA also restricts certain
international banking relationships to protect the
United States financial system from being used by
* The term “blocked assets” is further defined in the TRIA
as “any asset seized or frozen by the United States under” the
TWEA or the IEEPA. § 201(d)(2), 116 Stat. 2340.
18
Iran to transfer funds to support terrorism and
develop WMDs.’ Id. § 104.
3. Recent Economic Sanctions against
Iran
(a) Executive Order 13599
President Obama has issued several Executive
Orders strengthening the economic sanctions against
Iran.* Most pertinent to this case is Executive Order
13599, which provides that:
" U.S. Dep’t of Treasury, Iran Sanctions, CISADA: The New
U.S. Sanctions on Iran, Sanctions Programs and Country In-
formation, http//www.treasury.gov/resourcecenter/sanctions/Programs/
Documents/CISADA_english.pdf (last updated Nov. 11, 2015).
* See, e.g., Exec. Order No. 13,590, 76 Fed. Reg. 72,609
(Nov. 20, 2011) (imposing penalties on foreign companies with
sales to Iran of equipment and services related to Iran’s oil
industry exceeding a certain threshold); Exec. Order No. 13,608,
77 Fed. Reg. 26,409 (May 1, 2012) (placing individuals and
entities violating Iranian sanctions on a Foreign Sanctions
Evaders List, and prohibiting such persons from entering the
United States or doing business with any United States busi-
nesses or individuals); Exec. Order No. 13,622, 77 Fed. Reg.
45,897 (July 30, 2012) (imposing sanctions on foreign financial
institutions and persons which knowingly conduct or facilitate
significant financial transactions with, or purchase petroleum
products from, Iranian vil companies); and Exec. Order No.
13,645, 78 Fed. Reg. 33,945 (June 3, 2013) (imposing sanctions
on foreign financial institutions that engage in any significant
transactions related either to the Iranian auto industry or the
purchase and sale of Iranian rials, including the maintenance of
significant funds denominated in Iranian rials outside Iran).
19
[ajll property and interests in property of the
Government of Iran, including the Central
Bank of Iran, that are in the United States,
that are or hereafter come within the United
States, or that hereafter come within the
possession or control of any United States
person, including any foreign branch, are
blocked and may not be transferred, paid,
exported, withdrawn, or otherwise dealt in.
Exec. Order No. 13,599, 77 Fed. Reg. 6659 (Feb. 5,
2012). The Office of Foreign Assets Control has
determined that Executive Order 13599 “requires
U.S. persons to block all property and interests in
property of the Government of Iran, unless otherwise
exempt under OFAC.” Office of Foreign Assets Con-
trol, U.S. Dep’t of Treasury, Frequently Asked Ques-
tions: Iran Sanctions, https://www.treasury.gov/resource-
center/faqs/Sanctions/Pages/faq_iran.aspx (last updated
Oct. 22, 2015). Further, “[a]mong other things [Execu-
tive Order 13599] freezes all property of the Central
Bank of Iran and all other Iranian financial institu-
tions, as well as all property of the Government of
Iran{.]” U.S. Dep’t of Treasury, Press Release, Fact
Sheet: Implementation of National Defense Authoriza-
tion Act Sanctions on Iran (Feb. 6, 2012), http://www.
treasury.gov/press-center/press-releases/Pages/tg1409.
aspx. Pursuant to Executive Order 13599, on Febru-
ary 6, 2012, the government blocked the assets of
Bank Markazi, the Central Bank of Iran, that were
being held in a Citibank account in New York.
20
(b) Iran Threat Reduction and Syr-
ia Human Rights Act of 2012
In August 2012, Congress enacted the Iran
Threat Reduction and Syria Human Rights Act of
2012 (ITRSHRA), Pub. L. No. 112-158, 126 Stat. 1214
(codified at 22 U.S.C. §§ 8701 et seq.), amending prior
legislation and imposing additional economic sanc-
tions against Iran. Section 502 of the ITRSHRA,
codified at 22 U.S.C. § 8772, supplements the TRIA
and Executive Order 13599 by providing that “not-
withstanding any other provision of law *** the
financial assets that are identified in and the subject
of the proceedings in * * * Peterson et al. v. Islamic
Republic of Iran et al., Case No. 10 Civ. 4518 (BSJ)
(GWG)” “shall be subject to execution or attachment
* * * in order to satisfy any judgment to the extent of
any compensatory damages awarded against Iran for
damages for personal injury or death” stemming from
Iranian-sponsored terrorism if the court determines
that two preconditions are met. Id. § 8772(a)(1)(C).
Section 8772 clarifies Congress’s intent under
§ 201(a) of the TRIA that the blocked assets of Iran
subject to attachment to satisfy terrorism judgments
are not limited to assets owned by Iran, but include
blocked assets in which Iran has « beneficial inter-
est.” Further, § 8772 trumps the Foreign Sovereign
Immunities Act of 1976, 28 U.S.C. § 1611(b\(1), removing
* In the case of the blocked assets at issue here, Bank
Markazi, the Central Bank of Iran, is the sole owner. See Pet.
App. 97a, 98a n.10, 99a.
21
any immunity previously held by the Central Bank of
Iran. 22 U.S.C. § 8772(a).
The IEEPA, TRIA, Executive Order 13599, and
§ 8772 work in tandem and comprise a legal frame-
work for regulating and disposing of the blocked
assets of Iran. First, the IEEPA authorizes the Presi-
dent, upon declaring a national emergency, to block
the assets in which a foreign nation or national
thereof has any interest. 50 U.S.C. § 1702(a). The
IEEPA prohibits United States persons and entities
from dealing in blocked property. Jd. § 1705(a). Pur-
suant to the IEEPA, President Obama issued Execu-
tive Order 13599, blocking “[aJll property and
interests in property of the Government of Iran,
including the Central Bank of Iran.” 77 Fed. Reg. at
6659. Second, the TRIA created an exception to the
IEEPA’s blanket ban on dealing in blocked property,
permitting persons with a terrorism judgment
against a terrorist party to satisfy such judgments by
attaching blocked assets of that terrorist party to the
extent of any compensatory damages. § 201(a), 116
Stat. 2337 Finally, § 8772 ensures that the authority
to attach blocked assets under the TRIA to satisfy a
terrorism judgment against Iran is coextensive with
Executive Order 13599. Section 8772 is consistent in
scope, authorizing the attachment of blocked assets in
which the district court determines the Government
of Iran holds a beneficial interest to satisfy judgments
entered against Iran for sponsoring terrorist attacks.
22
B. The Judiciary Should Afford the Polit-
ical Branches Substantial Deference
in the Context of National Security
and Foreign Policy
Under the doctrine of separation of powers, it is
well established that when the political branches are
acting in the field of national security and foreign
affairs, their actions should be afforded deference by
the judiciary.” This Court explained in Holder v.
Humanitarian Law Project, 561 U.S. 1, 35 (2010),
that such deference is warranted because “Congress
and the Executive are uniquely positioned to make
principled distinctions between activities that will
further [national security] and undermine United
States foreign policy, and those that are not.”
° See, e.g., Regan v. Wald, 468 U.S. 222, 242 (1984) (“Mat-
ters relating ‘to the conduct of foreign relations *** are so
exclusively entrusted to the political branches of government as
to be largely immune from judicial inquiry or interference.’”)
(internal citation omitted); Rostker v. Goldberg, 453 U.S. 63, 64
(1981) (“The case arises in the context of Congress’ authority
over national defense and military affairs, and perhaps in no
other area has the Court accorded Congress greater deference.”);
Harisiades v. Shaughnessy, 342 U.S. 580, 588-89 (1952) (“It is
pertinent to observe that any policy towards aliens is vitally and
intricately interwoven with contemporaneous policies in regard
to the conduct of foreign relations, the war power, and the
maintenance of a republican form of government. Such matters
are so exclusively entrusted to the political branches of govern-
ment as to be largely immune from judicial inquiry or interfer-
ence.”).
23
In Humanitarian Law Project, this Court rejected
challenges to the constitutionality of 18 U.S.C.
§ 2339B, which criminalizes the provision of material
support to a foreign terrorist organization. Plaintiffs
argued the statute should require proof that the
material support was provided with the specific
intent to further the terrorist activities of such an
organization. 561 U.S. at 8. Congress, however, made
explicit findings in the legislative history that “for-
eign organizations that engage in terrorist activity
are so tainted by their criminal conduct that any
contribution to such an organization facilitates that
conduct.” Jd. (emphasis in original) (internal citations
omitted). Moreover, Congress’s position was support-
ed by an affidavit filed by a State Department official,
concluding, “it is highly likely that any material
support to these organizations will ultimately inure
to the benefit of their criminal, terrorist functions —
regardless of whether such support was ostensibly
intended to support non-violent, non-terrorist activi-
ties.” Jd. at 33 (quoting McKune Aff., App. 133, { 8).
The Court refused to second-guess the judgments
of the political branches in the realm of national
security and counter-terrorism, declaring:
That evaluation of the facts by the Execu-
tive, like Congress’s assessment, is entitled
to deference. This litigation implicates sensi-
tive and weighty interests of national securi-
ty and foreign affairs *** We have noted
that “neither the Members of this Court
nor most federal judges begin the day with
24
briefings that may describe new and serious
threats to our Nation and its people.” It is vi-
tal in this context “not to substitute * * * our
own evaluation of evidence for a reasonable
evaluation by the Legislative Branch.”
Id. at 33-34 (internal citations omitted).
This Court’s reasoning in Humanitarian Law
Project applies with equal force in the present case.
Working in coordination with the Executive Branch,
Congress determined that the blocked assets of the
Central Bank of Iran valued at $1.75 billion should be
subject to attachment to satisfy several judgments
against Iran for its complicity in sponsoring deadly
terrorist attacks against United States nationals. In
so concluding, Congress advances legitimate national
security and foreign policy goals, which include
holding Iran accountable for sponsoring acts of terror-
ism, compensating the victims of Iranian-sponsored
terrorist acts for their loss, and deterring Iran from
engaging in terrorist-related activity in the future.
This determination by Congress and the Executive on
the regulation and disposition of Iranian assets
blocked under the IEEPA, which is part of the broad-
er sanctions program against Iran, is entitled to
substantial deference by the judiciary.
Finally, § 8772 should be upheld under the prin-
ciple set forth by Justice Jackson in his concurring
opinion in Youngstown Sheet & Tube Co. v. Sawyer,
343 U.S. 579, 637 (1952) (Jackson, J., concurring),
and affirmed in Dames & Moore v. Regan, 453 U.S.
654, 668-69 (1981). Justice Jackson stated that when
25
the President acts pursuant to an express or implied
authorization from Congress, he exercises not only
his own powers, but also those delegated by Congress.
In such cases, the executive action “would be sup-
ported by the strongest presumption and the widest
latitude of judicial interpretation, and the burden of
persuasion would rest heavily upon any who might
attack it.” Youngstown, 343 U.S. at 637.
While Youngstown is an executive powers case,
the principle articulated by Justice Jackson has equal
application when Congress acts with the full support
of the Executive. With respect to § 8772, the Depart-
ment of Justice was invited by this Court to express
its views on whether Bank Markazi’s petition for
certiorari should be granted. In its brief, the Depart-
ment of Justice concluded that § 8772 was lawful and
did not violate the separation of powers, recommend-
ing that the Court deny the petition. U.S. Cert. Br.
19, 24. Thus, § 8772, as an act of Congress passed in
coordination with Executive Order 13599, and explic-
itly supported by the Executive Branch, is entitled to
“the strongest presumption and widest latitude of
judicial interpretation,” and should be upheld by the
Court. Youngstown, 343 U.S. at 637
Ill. Section 8772 Does Not Violate Separation
of Powers
Section 8772 does not compel a court to enter a
judgment for plaintiffs or assess any damages against
Iran. Iran’s liability and resulting obligations to pay
26
compensatory damages to each of these plaintiffs
were both established by independent Article III
tribunals several years before the enactment of
§ 8772. Moreover, § 8772 does not limit the district
court’s authority and require the judgments in these
proceedings to be satisfied only with the blocked
assets of Iran held in the Citibank account. Rather,
§ 8772 expressly clarifies that certain enumerated
assets are “subject to” attachment under the TRIA in
satisfaction of outstanding terrorism judgments
against Iran so long as a court determines that two
preconditions are met. 22 U.S.C. § 8772.
No court has ever found that merely identifying
particular assets as subject to attacnment in satisfac-
tion of valid outstanding judgments violates separa-
tion of powers. While the applicability of § 8772 is
admittedly narrow, in the context of foreign affairs
and national security, this is both permissible and
reasonable. Iran is required under United States law
to pay these eighteen judgments regardless of wheth-
er it uses the assets described in § 8772 or some other
resources to do so. In the years since these judgments
were entered, Iran has never made any payments and
it does not indicate now that it plans to do so in the
future. Instead, petitioner uses this litigation as an
attempt to evade its responsibility to pay valid judg-
ments awarded by Article III courts to the surviving
family members of United States nationals killed or
seriously wounded by lIranian-sponsored acts of
terrorism.
27
Considering Iran’s reprehensible conduct in
financing the terrorist attacks that support these
judgments, followed by its staunch refusal to pay the
resulting damages, petitioner’s contrived attempt to
use separation of powers as a shield from its obliga-
tions is a perversion of revered constitutional pre-
cepts.
A. Section 8772 Does Not Compel a Court
to Enter a Judgment for Plaintiffs or
Assess Any Damages Against Iran
The eighteen judgments to which § 8772 applies
are the product of extensive litigation before inde-
pendent judges and damage assessments proposed by
neutral special masters. Bank Markazi does not
dispute the validity of these judgments nor does it
allege that Iran has ever made or will make an effort
to pay plaintiffs’ outstanding judgments. Pet. App.
55a. Instead, petitioner argues that in providing
courts with the proper tool to enforce these eighteen
judgments by allowing execution against $1.75 billion
in Iranian blocked assets held by Citibank, Congress
violated separation of powers.
In each of the eighteen proceedings below, Iran
did not respond to the complaint, though it was
properly served, and failed to defend itself in court,
despite having ample opportunity to do so. Under
normal circumstances, a court would award the
plaintiff a default judgment solely on the basis of
defendant’s failure to respond. Fed. R. Civ. P. 55(a).
28
However, in these cases, under 28 U.S.C. § 1608(e),
each plaintiff also needed to “establish[ ] his claim or
right to relief by evidence satisfactory to the court”
before a default judgment was entered. The district
court required each plaintiff “to establish their right
to relief by clear and convincing evidence.” Peterson v.
Islamic Republic of Iran, 264 F.Supp. 2d 46, 48
(D.D.C. 2003).
Thus, in each of these eighteen cases, before
entering a default judgment, an independent Article
III tribunal concluded that there was clear and
convincing evidence that (1) Iran was a state sponsor
of terrorism at the time of or as a result of the terror-
ist attack; (2) each plaintiff was a United States
national at the time of the attack; and (3) Iran com-
mitted acts of terrorism, including “extrajudicial
killing, aircraft sabotage, hostage taking, or [provid-
ed] material support or resources for such an act”
which was “reasonably certain (i.e., more likely than
not)” to cause injury to the plaintiff under at least one
of several theories of liability. 28 U.S.C. § 1605A(a)(1);
Valore v. Islamic Republic of Iran, 700 F. Supp. 2d 52,
67-68, 81 (D.D.C. 2010); Hill v. Republic of Iraq, 328
F.3d 680, 681 (D.C. Cir. 2003). The district courts
individually considered the claims of over 1,000
plaintiffs, and engaged in a factual inquiry with
particularized rulings in each cause of action raised.
See Peterson v. Islamic Republic of Iran, 515 F. Supp.
2d 25 (D.D.C. 2007). Iran did not dispute these alle-
gations at trial, nor does petitioner challenge the
judicial determinations now.
29
Upon entering a judgment for the plaintiffs,
these cases were referred to special masters for
further consideration of the appropriate amount of
monetary damages to be awarded to each plaintiff. Jd.
at 52-53. It was the job of these neutral special mas-
ters to follow the court’s administrative framework
and “undertake a very thorough, painstaking review
of all the relevant testimony, medical evidence, eco-
nomic reports, and other evidence in order to make
clear, accurate recommendations” to the court relat-
ing to the damages suffered by each plaintiff. Jn re
Islamic Republic of Iran Terrorism Litigation, 659
F. Supp. 2d 31, 110 (D.D.C. 2009).
Congress did not dictate any of these judgments.
Rather, § 8772 was enacted by Congress to help give
effect to the judgments already entered by independ-
ent tribunals. The only effect of § 8772 is to clarify
the authority of the judiciary under the TRIA to
attach particular assets (that were already judicially.
restrained in 2008 and blocked by the President in
February 2012) in satisfaction of the outstanding
judgments upon a finding that two preconditions are
met.
In contrast to the statute invalidated in United
States v. Klein, 80 U.S. (13 Wall.) 128 (1872), which
prevented judges from giving effect to executive
pardons, § 8772 furthers the interests of the Judicial
and Executive Branches rather than curtail them.
Section 8772 helps the courts to enforce outstanding
judgments whereas the statute in Klein constricted
30
the operation of judicial processes. In enacting § 8772,
Congress merely provided a clear standard for at-
tachment of these blocked assets in order to help the
court enforce its outstanding judgments and further
the foreign policy goals of the Legislative and Execu-
tive Branches." As such, § 8772 is readily distin-
guishabLle from the statute struck down in Klein.
B. Section 8772 Clarifies the Standard for
Attachment Under the TRIA in Re-
gards to the Blocked Assets of Iran
Section 8772 was enacted to help the judiciary
execute the judgments entered against state sponsors
of terrorism by Article III tribunals. The obstacles
encountered by the plaintiffs in this case are a testa-
ment to the difficulty of executing judgments against
a foreign state that is unwilling to pay them. Con-
gress enacted the TRIA with a more general applica-
tion that was aimed at helping plaintiffs in this
predicament satisfy their outstanding judgments
against state sponsors of terrorism. § 201(a), 116 Stat.
2337 However in certain instances, narrow construc-
tion of the TRIA by the judiciary has prevented
§ 201(a) from achieving the legislative goals of holding
“ Section 8772 does not restrict courts to satisfying the
outstanding judgments with only these assets. If other assets
became available, the cour could allow plaintiffs to attach them
as well. Section 8772 mei. enhances the ability of the judiciary
to enforce its judgments.
31
Iran accountable for sponsoring terrorism and com-
pensating its victims.
Specifically, some courts have held that the
“blocked assets of” a terrorist party subject to at-
tachment under § 201(a) of the TRIA includes only
those assets in which a state sponsor of terrorism had
an ownership interest. Heiser v. Islamic Republic of
Iran, 735 F.3d 934 (D.C. Cir. 2013). However, Con-
gress did not intend to limit the class of assets subject
to attachment under the TRIA to merely those
blocked assets that Iran, or any state sponsor of
terrorism, owns outright. Such a narrow construction
places the overwhelming majority of blocked assets
beyond the reach of United States victims of terror-
ism with outstanding judgments.
There are few assets subject to United States
jurisdiction in which a state sponsor of terrorism has
an outright ownership interest. After thirty years of
economic sanctions, Iran is very experienced in
structuring its financial transactions to evade detec-
tion by United States federal regulators.” Executive
* Office of Foreign Assets Control, U.S. Dep’t of Treasury,
Advisory on the Use of Exchange Houses and Trading Companies
to Evade U.S. Economic Sanctions Against Iran (Jan. 10, 2013),
https://www.treasury.gov/resource-center/sanctions/Programe/
Documents/20130110_iran_advisory_exchange_house.pdf; Memo-
randum of Order, United States v. HSBC Bank USA, NA., No.
1:12 Cr. 00763 (E.D.N.Y. 2013) (HSBC affiliates assisted Iran in
evading U.S. sanctions from 2000 to 2006 by “altering and
routing payment messages in a manner that hid the identities
of” the sanctioned entities party to the transactions).
32
Order 13599 was issued precisely in response to such
practices. See 77 Fed. Reg. at 6659 (issued “particu-
larly in light of the deceptive practices of the Central
Bank of Iran and other Iranian banks to conceal
transactions of sanctioned parties, the deficiencies in
Iran’s anti-money laundering regime and the weak-
nesses in its implementation”).
The ownership structure of the assets at issue in
this litigation aptly demonstrates the lengths to
which Iran goes in order to conceal its transactions
from United States authorities. The $1.75 billion in
registered federal govermment bonds was held by a
New York bank in a custodial omnibus account that
was maintained by a Luxembourg-based financial
intermediary, in part, on behalf of an Italian bank,
which had received the assets from Bank Markazi,
the Central Bank of Iran, which is wholly owned by
the Government of Iran. See Pet. App. 58a-62a. The
transaction spanned four banks across three conti-
nents. The complexity of modern international bank-
ing is difficult to overstate. In every transaction,
there may be, and often are, many. stakeholders
‘whose identities are not readily ascertainable. In the
sensitive field of foreign relations, while Congress
may delegate broadly, it must legislate narrowly to offer
courts clarifying guidance regarding this sensitive
subject matter. See Zemel v. Rusk, 381 U.S. 1, 17
(2965).
33
C. Section 8772 is Not Unconstitutional
Merely Because it Applies to a Limited
Class of Pending Cases.
Section 8772 is not unconstitutional just because
it has a narrow application; the sensitive subject
matter of the statute necessarily requires a narrow
reach. Outstanding judgments by nationals of one
country against the government of another are a
delicate matter of foreign policy in a typical situation.
Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398,
430 (1964). But when the outstanding judgments
stem from personal injury or death caused by terror-
ist attacks, and the two nations involved have had no
diplomatic relations in over thirty years, the complex-
ity and sensitivity is further heightened. In this
context, the political branches must have discretion
“to apply a remedy to a case as it may arise.” Dames
& Moore v. Regan, 453 U.S. 654, 677 (1981).
Congress can enact a statute that clarifies the
law applicable to a limited class of pending cases.
Axel Johnson, Inc. v. Arthur Anderson & Co., 6 F.3d
78 (2d Cir. 1993). This is especially true in cases
concerning sensitive issues of foreign relations with
hostile states. Section 8772 does not change the law
for a single favored plaintiff, as petitioner contends,
but rather changes the applicable law for a limited
class of cases all stemming from Iranian-sponsored
terrorist attacks.
34
The reference to specific proceedings by name in
§ 8772(b) does not limit the application of the statute
to a single plaintiff; it merely identifies the specific
assets to which the new statute applies. 22 U.S.C.
§ 8772(b). In Robertson v. Seattle Audubon Society,
503 U.S. 429 (1992), this Court held that the express
reference in a statute to two pending cases, identified
by name and caption number, was not a separation of
powers violation. Rather, it “served only to identify
the ‘five statutory requirements that [were] the basis
for’ those cases.” Id. at 440 (internal citations omit-
ted).
Here, the express reference to “Peterson et al. v.
Islamic Republic of Iran et al., Case No. 10 Civ. 4518
(BSJ) (GWG)” in § 8772(b) similarly serves to identify
the assets to which the statute applies. This is both
permissible and reasonable, as including a descrip-
tion of the complex assets contemplated by the stat-
ute would be lengthy at best. At worst, it could be
vague and cause adverse foreign policy consequences
when applied to unanticipated situations.
Section 8772 is not a “one-case-only regime” (Pet.
Br. 26), but applies to a limited class of outstanding
judgments already entered against Iran. Section
8772(c) provides that the statute applies to the “pro-
ceedings referred to in subsection (b)[,]” expressly
extending to several proceedings, not a single proceed-
ing. 22 U.S.C. § 8772(c). Rather than write out each
of the potential qualifying judgments, Congress
limited the applicability to § 8772 by a shorthand
reference to the case into which all the judgments
35
had been, or would be, consolidated for purposes of
execution.”
+
CONCLUSION
Compensating victims of terrorism with assets in
which Iran, a state sponsor of terrorism, has a benefi-
cial interest serves important national security and
foreign policy goals. First, such enforcement meas-
ures hold Iran accountable for sponsoring terrorist
attacks. Second, the victims of terrorism and their
families are compensated for their injuries or wrong-
ful death. When the Bank Markazi bonds were
blocked by the President, Congress enacted § 8772 to
clarify the scope of the TRIA as it applies to these
complex assets, mindful of the fact that leaving the
assets to languish in a bank account did not accom-
plish either objective. As such, Congress made clear
that if the court finds Iran has a beneficial interest
in these assets, they should be subject to attachment
in satisfaction of outstanding terrorism judgments
consolidated in this action. Enforcing plaintiffs’
judgments will provide some minimum closure and
compensation to victims and surviving family members,
many of who have waited for over thirty years for a
measure of justice. Finally, it will encourage other
* The list of parties covered by these eighteen judgments
spans over thirteen pages in petitioner’s appendix. Pet. App.
130a-144a.
36
victims of terrorism to bring similar lawsuits against
terrorist states.
These significant foreign policy and national
security considerations distinguish § 8772 from the
exclusively domestic statute invalidated in United
States v. Klein, 80 U.S. (13 Wall.) 128 (1872). Balanc-
ing Congress’s extremely high interest in holding Iran
accountable for financing terrorist attacks and de-
terring its future sponsorship of such acts, against
petitioner’s interest in avoiding responsibility for
paying these judgments, § 8772 does not violate
separation of powers. Finally, § 8772 is an integral
part of a coordinated effort by the political branches
to regulate the foreign assets of Iran, a state sponsor
of terrorism, to advance vital national security inter-
ests, and should not be undermined by the judiciary.
The decision of the Second Circuit Court of Ap-
peals judgment should be affirmed.
December 21, 2015 Respectfully submitted,
JIMMY GURULE
Counsel of Record
Professor of Law
NOTRE DAME LAW SCHOOL
2119 Eck Hall of Law
Notre Dame, IN 46556
(574) 631-5917
Jimmy.Gurule.1@nd.edu
Attorney for Amici Curiae
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