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Bank Markazi v. Peterson

Facts of the Case

Provided by Oyez

Deborah Peterson and a group of other plaintiffs were seeking to obtain judgments for injury or wrongful death during acts of terrorism by Iran. The Iran Central Bank (Bank Markazi) owned nearly $2 billion worth of bonds that were held in an account in New York City. Based on the Uniform Commercial Code, these assets were not considered assets of Bank Markazi, and therefore could not be attached by the plaintiffs and were immune from attachment under the Foreign Sovereign Immunities Act.

While this case was pending, Congress passed the Iran Threat Reduction and Syria Human Rights Act of 2012, Section 8772 of which stated, “[T]he financial assets that are identified in and the subject of proceedings in the United States District for the Southern District of New York in Peterson et al. v. Islamic Republic of Iran et al., shall be subject to execution…in order to satisfy any judgment to the extent of any compensatory damages awarded against Iran for damages for personal injury or death caused by an act of [terrorism].” The plaintiffs moved for summary judgment based on Section 8772. Bank Markazi argued that Section 8772 violated the United States’ separation of powers because the law was solely directed at this specific case. The district court granted summary judgment for plaintiffs and ordered the turnover of the assets. The U.S. Court of Appeals for the Second Circuit affirmed.

Questions

  1. Does a statute that effectively directs a particular result in a single pending case violate the separation of powers?

Conclusions

  1. A statute that effectively directs a particular result in a single pending case does not violate the separation of powers. Justice Ruth Bader Ginsburg delivered the opinion for the 6-2 majority. The Court held that Section 8772 of the Iran Threat Reduction and Syria Human Rights Act of 2012 did not violate the separation of powers by directing the distribution of funds to terrorist victims. The fact that Congress passed the act during litigation did not tread onto judiciary “turf”; instead, it only supplied a new law to be applied to undisputed facts. Rather than telling the judiciary branch what to do, Congress passed a law for the judiciary to interpret during the case itself, and therefore did not intrude on the judicial powers of Article III.

    Chief Justice John G. Roberts, Jr. wrote a dissent in which he argued that Congress violated Article III by passing the Iran Threat Reduction and Syria Human Rights Act of 2012, Section 8772 because Congress is not allowed to “pick” the winners of court cases by applying statutes directed at those court cases during litigation. It is a violation of Article III for legislators to determine the outcome of judicial decisions. Justice Sonia Sotomayor joined the dissent.