Supreme Court Order Allows Victims of Terrorism to Collect from Frozen Funds of Iranian Central Bank
On April 20, the Supreme Court held in Bank Markazi v. Peterson that Section 8772 of the Iran Threat Reduction and Syria Human Rights Act of 2012 does not violate separation of powers principles. Bank Markazi v. Peterson, No. 14-770, slip op. (U.S. April 20, 2016). In a 6-2 decision, the Court concluded that Section 8772, which made certain frozen Iranian assets held in the U.S. subject to attachment to satisfy judgment in favor of persons injured by Iranian terrorism or Iran-supported terrorism, does not “transgress constraints placed on Congress and the President by the Constitution” and is not a “‘one-case-only regime.’” At issue was whether plaintiffs in a wrongful-death case related to the 1983 Beirut bombings could satisfy an award in their favor from billions of Bank Markazi’s dollars that are frozen in a New York bank account. In 2007, a federal district court awarded more than one thousand American victims of Iran-related terrorism $2.65 billion in relief. In 2013, a U.S. federal district court rejected the Iranian central bank’s argument that Section 8772 violated separation of powers principles because it was meant to dictate the outcome of the present case, and ordered the bank to pay the victims using frozen assets in the United States. In 2014, the Second Circuit affirmed the district court’s ruling. The Supreme Court’s recent decision affirms the lower court’s ruling, finding that “[Section] 8772 is an exercise of congressional authority regarding foreign affairs, a domain in which the controlling role of the political branches is both necessary and proper.”