Facts
- American victims of Iran-sponsored terrorist attacks obtained civil judgments against Iran under the Foreign Sovereign Immunities Act’s terrorism exception.
- The judgment creditors sought to enforce those judgments against about 2 billion in U.S.-dollar bond assets held through intermediaries in a New York Citibank account, alleged to be beneficially owned by Bank Markazi (Iran’s central bank).
- Bank Markazi asserted that the assets were not its property under New York commercial law and were immune from execution under federal sovereign-immunity and related provisions.
- Congress enacted 22 U.S.C. § 8772 to make the specific assets “identified in and the subject of” a particular, pending Southern District of New York enforcement proceeding subject to execution to satisfy compensatory damages judgments against Iran for terrorism, “notwithstanding any other provision of law,” and preempting inconsistent state law.
- Section 8772 required the district court to make specified factual findings, including whether Iran held equitable title to, or a beneficial interest in, the assets.
Issues
- Whether 22 U.S.C. § 8772 violates Article III separation of powers by effectively directing the outcome of a single, identified, pending case and eliminating defenses asserted by Bank Markazi.
- Whether Congress may constitutionally amend substantive law and apply it to pending litigation in a manner that is highly specific to identified assets and a named case.
Decision
- The Supreme Court affirmed, holding 6–2 that § 8772 does not violate the separation of powers.
- The Court ruled that Congress may amend applicable law and make that new law apply to pending cases, even if the statute is case-specific and has the practical effect of enabling one side to prevail.
- The Court concluded § 8772 supplied a new legal standard and left factfinding and application of that standard to the judiciary, rather than commanding a result under preexisting law.
- Dissenting, the Chief Justice (joined by one Justice) argued the statute impermissibly selected winners and losers in a pending case and reduced the judicial role to a ministerial act.
Legal Principles
- Article III forbids Congress from directing outcomes in particular cases under existing law, but permits Congress to change the governing law and make it retroactively applicable to pending cases.
- A statute is not unconstitutional solely because it is narrowly targeted, including by identifying particular assets or even a pending case, if it establishes a new legal rule for courts to apply.
- In matters involving foreign sovereign immunity and foreign-state assets, Congress has broad authority to set substantive rules governing attachment and execution, and courts may give weight to that foreign-affairs context in evaluating separation-of-powers objections.
- A statute that requires courts to make factual determinations and apply newly enacted standards can remain within the judicial function even if it materially limits defenses previously available.
Conclusion
The Court upheld § 8772 as a valid legislative change to the law governing execution against specified Iranian assets, rejecting the claim that Congress unconstitutionally dictated the outcome of a pending case, and allowing terrorism judgment creditors to pursue turnover of the targeted funds.