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Published online by Cambridge University Press: 27 February 2017
Plaintiffs, Sperry Corp. and Sperry World Trade Inc. (Sperry), received an award from the Iran-United States Claims Tribunal (Tribunal). Upon payment of the award, the United States deducted 2 percent of the total amount pursuant to a directive license issued by the Secretary of the Treasury regarding recovered claims by U.S. nationals against Iran. When plaintiffs challenged the authority of the Treasury to make the deduction and the United States Claims Court announced a preliminary ruling that concurred with plaintiffs’ position, the Executive persuaded Congress to approve legislation authorizing specified percentages to be deducted by the United States from Tribunal awards to U.S. citizens. Responding to the plaintiffs’ challenge to the constitutionality of the newly enacted statute, the United States Claims Court dismissed the suit and, on appeal, the United States Court of Appeals for the Federal Circuit (per Meyer, J.) reversed and held: that the deduction constitutes a taking without compensation in violation of the Fifth Amendment to the United States Constitution. In September 1988, the United States filed notice of appeal with the Supreme Court.
1 47 Fed. Reg. 25,243 (1982).
2 853 F.2d 904, 905 (quoting 47 Fed. Reg. 25,243).
3 The United States is reported to have collected through mid-September 1988 approximately $15 million in deductions from $1 billion in Tribunal awards and is expected to collect another $45 million from anticipated future awards under the two-tiered structure of the 1985 Act. Iranian Assets Litigation Rep., Sept. 23, 1988, at 16,308.
4 458 U.S. 419(1982).
5 853 F.2d at 906 (quoting Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 225 (1986)).
6 853 F.2d at 908.
7 4 Cl.Ct. 237 (1983), aff’d mem., 765 F.2d 159 (Fed. Cir. 1985).
8 453 U.S. 654 (1981) (holding that “because of the President’s authority to prevent or condition attachments, and because of the orders he issued to this effect, petitioner did not acquire any ‘property’ interest in its attachments of the sort that would support a constitutional claim for compensation” (id. at 674 n.6); the Court declined to decide whether the suspension of district court claims might constitute takings (id. at 688–89)).
9 853 F.2d at 908.
10 Id.
11 Loretto, 458 U.S. at 427 (emphasis added).
12 Id. at 441.
13 449 U.S. 155(1980).
14 Id. at 164.
15 Id.
16 Id. at 163.
17 28 U.S.C. §§1609–1610 (1982).
18 Aug. 15, 1955, 284 UNTS 93, TIAS No. 3853, 8 UST 899.
19 See, e.g., Behring Int’l, Inc. v. Imperial Iranian Air Force, 475 F.Supp. 383 (D.N.J. 1979). A number of courts disagreed with the Behring decision. See, e.g., Reading & Bates Corp. v. National Iranian Oil Co., 478 F.Supp. 724 (S.D.N.Y. 1979) (in which the court noted (1) that Congress was extremely careful to distinguish between the waiver standard for pre- and post-judgment attachments, requiring an express waiver of the latter only, and that the Behring opinion results in an inconsistent policy; and (2) that the Behring decision results from a strained reading of the Treaty of Amity).
20 Thus, it is unclear what value, for the purpose of a taking analysis, plaintiffs’ prejudgment attachment had. Since plaintiffs have not contended that the dissolution of the prejudgment attachment constituted a taking, the value of the prejudgment attachment is not directly at issue. However, the question is closely related to whether the Tribunal, in providing an alternative forum for plaintiffs, actually provided a benefit to them.