WASHINGTON (CN) — The Supreme Court upheld a law Wednesday that helps victims of a terrorist attack collect a $1.75 billion judgment against Iran's central bank.
Nearly 300 U.S. and French service members were killed in the Oct. 23, 1983, attack on U.S. Marine Barracks in Beirut, Lebanon.
Though the chief federal judge in Washington, D.C., held Iran and its intelligence agency liable for the attack in 2007, no law at the time allowed punitive damages.
Congress came through to make such damages possible, however, so the court awarded large money judgments in a series of cases, including a $2.1 billion judgment in Peterson v. Islamic Republic of Iran.
The plaintiffs in that case, led by Deborah Peterson, in turn sought satisfaction of their judgment in the Southern District of New York — a court where Citibank had previously been ordered to freeze almost $2 billion in debt securities allegedly owned by Iran.
Peterson's lawsuit accused the Luxemburg-based bank Clearstream and the Rome-based Banca UBAE of helping Bank Markazi, an agency of Iran, move $250 million in frozen assets outside the United States.
Though Clearstream and Banca UBAE settled the cases against them, Bank Markazi asserted that the Terrorism Risk Insurance Act of 2002 saved it from having to turn over the remaining $1.75 billion in frozen assets.
Congress removed that hurdle with its passage of the Iran Threat Reduction and Syria Human Rights Act of 2012, however, and a federal judge in Manhattan promptly ordered the turnover of the assets, denying Bank Markazi immunity.
The decision came two weeks before the 30th anniversary of the attack.
A three-judge panel of the Second Circuit affirmed that result, so Bank Markazi took its case to Washington, contending that the 2012 law violates the separation of powers by changing the law and directing a particular result for one single case.
The U.S. Supreme Court ruled against the bank 6-2 Wednesday, finding no indication that the statute transgresses the constitutional constraints placed on Congress and the president.
Writing for the majority, Justice Ruth Bader Ginsburg discusses the Iran Threat Reduction and Syria Human Rights Act of 2012 by its statutory name, Section 8772 of Title 22.
Denying that Section 8772 represents a one-case-only regime, Ginsburg said "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."
Indeed the 16 suits whose judgments Section 8772 facilitates "encompass more than 1,000 victims of Iran-sponsored terrorist attacks," Ginsburg added.
"The bank's argument is further flawed, for it rests on the assumption that legislation must be generally applicable, that 'there is something wrong with particularized legislative action,'" the opinion continues. "We have found that assumption suspect."
Ginsburg lastly cited Section 8772's place "as an exercise of congressional authority regarding foreign affairs, a domain in which the controlling role of the political branches is both necessary and proper."
Justices Anthony Kennedy, Stephen Breyer, Samuel Alito and Elena Kagan joined the opinion in full. Justice Clarence Thomas joined all of Ginsburg's opinion but the final subsection on foreign affairs.
Justice Sonia Sotomayor meanwhile joined a dissent by the court's chief justice.
"Contrary to the majority, I would hold that §8772 violates the separation of powers," Chief Justice John Roberts wrote. "No less than if it had passed a law saying 'respondents win,' Congress has decided this case by enacting a bespoke statute tailored to this case that resolves the parties' specific legal disputes to guarantee respondents victory."
Roberts said the "issue here is a basic principle, not a technical rule."
"Section 8772 decides this case no less certainly than if Congress had directed entry of judgment for respondents," his dissent concludes. "As a result, the potential of the decision today 'to effect important change in the equilibrium of power' is 'immediately evident.' Hereafter, with this court's seal of approval, Congress can unabashedly pick the winners and losers in particular pending cases. Today's decision will indeed become a 'blueprint for extensive expansion of the legislative power' at the judiciary's expense, feeding Congress's tendency to 'extend[ ] the sphere of its activity and draw[ ] all power into its impetuous vortex.'"
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.