Bank Markazi v. Peterson

Bank Markazi v. Peterson
Supreme Court of the United States
Argued January 13, 2016 Decided April 20, 2016
Full case name	Bank Markazi, a.k.a. the Central Bank of Iran, Petitioner v. Deborah Peterson, et al.
Docket no.	14-770
Citations	578 U.S. ___ (more) 136 S. Ct. 1310; 194 L. Ed. 2d 463; 2016 U.S. LEXIS 2799
Argument	Oral argument
Opinion announcement	Opinion announcement
Case history
Prior	Peterson, et al. v. Islamic Republic of Iran, Bank Markazi a.k.a. Central Bank of Iran, Banca UBAE, Citibank, and Clearstream Banking, No. 10 Civ. 4518 (S.D. NY, July 9, 2013);[1]: 60  affirmed, Peterson, et al. v. Islamic Republic of Iran, et al., 758 F.3d 185 (2nd Cir., 2014)[1]: 48
Holding
A law that only applied to a specific case, identified by docket number, and eliminated all of the defenses one party had raised did not violate the separation of powers in the United States Constitution between the legislative (Congress) and judicial branches of government; since it pertained to the immunity of assets of a foreign state, it was also justified as a valid exercise of Congress' authority in foreign policy matters
Court membership
Chief Justice John Roberts Associate Justices Anthony Kennedy · Clarence Thomas Ruth Bader Ginsburg · Stephen Breyer Samuel Alito · Sonia Sotomayor Elena Kagan
Case opinions
Majority	Ginsburg, joined by Kennedy, Breyer, Alito, Kagan; Thomas (all but Part II–C)
Dissent	Roberts, joined by Sotomayor
Laws applied
22 U.S.C. § 8772

Bank Markazi v. Peterson, 578 U.S. 212 (2016), was a United States Supreme Court case that found that a law which only applied to a specific case, identified by docket number, and eliminated all of the defenses one party had raised does not violate the separation of powers in the United States Constitution between the legislative (Congress) and judicial branches of government. The plaintiffs, in the case had initially obtained judgments against Iran for its role in supporting state-sponsored terrorism, particularly the 1983 Beirut barracks bombings and 1996 Khobar Towers bombing, and sought execution against a bank account in New York held, through European intermediaries, on behalf of Bank Markazi, the Central Bank of the Islamic Republic of Iran. The plaintiffs obtained court orders preventing the transfer of funds from the account in 2008 and initiated their lawsuit in 2010. Bank Markazi raised several defenses, including that the account was not an asset of the bank, but rather an asset of its European intermediary, under both New York state property law and §201(a) of the Terrorism Risk Insurance Act. In response to concerns that existing laws were insufficient for the account to be used to settle the judgments, Congress added an amendment to a 2012 bill, codified after enactment as 22 U.S.C. § 8772, that identified the pending lawsuit by docket number, applied only to the assets in the identified case, and effectively abrogated every legal basis available to Bank Markazi to prevent the plaintiffs from executing their claims against the account. Bank Markazi then argued that § 8772 was an unconstitutional breach of the separation of power between the legislative and judicial branches of government, because it effectively directed a particular result in a single case without changing the generally applicable law. The United States District Court for the Southern District of New York and, on appeal, the United States Court of Appeals for the Second Circuit both upheld the constitutionality of § 8772 and cleared the way for the plaintiffs to execute their judgments against the account, which held about $1.75 billion in cash.

The United States Supreme Court granted certiorari and heard oral arguments in the case in January 2016, releasing their opinion in April 2016. A 6–2 majority found that § 8772 was not unconstitutional, because it "changed the law by establishing new substantive standards"^[2]: 18—essentially, that if Iran owns the assets, they would be available for execution against judgments against Iran—for the district court to apply to the case.^{[2]: 18–19} Justice Ruth Bader Ginsburg, writing for the majority, explained that the federal judiciary has long upheld laws that affect one or a very small number of subjects as a valid exercise of Congress' legislative power^[2]: 21 and that the Supreme Court had previously upheld a statute that applied to cases identified by docket number in Robertson v. Seattle Audubon Society (1992).^[2]: 19 The majority also upheld § 8772 as a valid exercise of Congress' authority over foreign affairs. Prior to the enactment of the Foreign Sovereign Immunities Act (FSIA) in 1976, Congress and the Executive branch had authority to determine the immunity of foreign states from lawsuits. Despite transferring the authority to determine immunity to the courts through the FSIA, the majority contended that "it remains Congress' prerogative to alter a foreign state's immunity."^[2]: 23

Chief Justice John Roberts, joined by Justice Sonia Sotomayor, dissented and harshly criticized the majority's holding. After providing historical context for the separation of powers between the legislature and judiciary found in Article III of the United States Constitution, the Roberts argued that § 8772 was an unconstitutional breach of the separation of powers between Congress and the judiciary "whereby Congress assumes the role of judge and decides a particular case in the first instance."^[3]: 7 In his view, § 8772 is not different from a hypothetical law applying to a case Smith v. Jones in which the legislature says simply "Smith wins". Roberts contended that Congress and the Executive branch have sufficient authority that they do not need to "seize" the judiciary's power to "make a political decision look like a judicial one."^[3]: 16 Quoting James Madison in Federalist No. 48, he lamented that this case "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.'"^{[3]: 16–17}

The decision came as Iran was seeking access to the world financial market just three months after many sanctions were lifted as a result of Iran's compliance with an agreement for curtailing development of its nuclear enrichment program. Various Iranian officials denounced the decision as "theft",^[4] "a ridicule of law and justice",^[4] and "open hostility by the United States against the Iranian people."^[5]

On 14 June 2016, Iran filed a case against the United States with the International Court of Justice (ICJ). The judgment in the case, named Certain Iranian Assets, was pronounced on 30 March 2023, with the ICJ finding largely in Iran's favour.