US SUPREME COURT DECISIONS

U.S. V. SPERRY CORP., 493 U. S. 52 (1989)

Subscribe to Cases that cite 493 U. S. 52

U.S. Supreme Court

U.S. v. Sperry Corp., 493 U.S. 52 (1989)

United States v. Sperry Corporation

No. 88-952

Argued Oct. 10, 1989

Decided Nov. 28, 1989

493 U.S. 52

Syllabus

Prior to the 1979 seizure of the United States Embassy in Tehran, appellees, American parent and subsidiary corporations (hereinafter Sperry), entered into contracts with the Government of Iran. After the Embassy seizure, Sperry filed suit for claims against Iran in a Federal District Court and obtained a prejudgment attachment of Iranian assets. Subsequently, the United States and Iran entered into the Algiers Accords, which, inter alia, established the Iran-United States Claims Tribunal (Tribunal) to arbitrate Americans' claims against Iran, specified that Tribunal awards are final, binding, and enforceable in the courts of any nation, and placed $1 billion of Iranian assets in a Security Account for the payment of awards to the Federal Reserve Bank of New York (FRB) and thence to claimants. After Executive Orders implementing the Accords invalidated Sperry's attachment and prohibited it from further pursuing its claim in American courts, it filed a claim with the Tribunal and ultimately entered into a settlement agreement whereby Iran promised to pay it $2.8 million, which agreement was recorded as an award of the Tribunal. Congress then enacted § 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, which requires the FRB to deduct from any Tribunal award and to pay into the United States Treasury before remitting the award to the claimant a percentage of the award

"as reimbursement to the . . . Government for expenses incurred in connection with the arbitration of claims . . . before [the] Tribunal and the maintenance of the Security Account."

When the FRB so deducted a percentage of Sperry's award, Sperry renewed a suit it had previously filed in the Claims Court, arguing that the deduction authorized by § 502 was unconstitutional. The court rejected the claim and dismissed the suit, but the Court of Appeals reversed.

Held: Section 502 is not unconstitutional. Pp. 493 U. S. 59-66.

(a) Section 502 does not violate the Just Compensation Clause of the Fifth Amendment. Sperry has not identified any of its property that was taken without just compensation. No taking occurred because Sperry's prejudgment attachment was nullified by the Executive Orders implementing the Accords, since Dames & Moore v. Regan, 453 U. S. 654, 453 U. S. 674, n. 6, held that American litigants against Iran had no property interest in such attachments. Nor did Sperry suffer the deprivation of its claim against Iran, since it presented the claim to the Tribunal and chanrobles.com-red

Page 493 U. S. 53

settled it for a substantial sum, and now makes no claim that the award was less than could have been recovered in ordinary litigation or that being forced to take the lesser amount was an unconstitutional taking. Moreover, the deduction is not a taking, but is a reasonable "user fee" assessed against claimants before the Tribunal and intended to reimburse the Government for its costs in connection with the Tribunal. The amount of a user fee need not be precisely calibrated to the use that a party makes of governmental services, and, on the facts of this case, the § 502 deduction is not so clearly excessive as to belie its purported character as a user fee. Sperry's contention that it did not benefit from the procedures established by the Accords is rejected, since those procedures assured Sperry that its award could be enforced in the courts of any nation and actually paid in this country, whereas, absent those procedures, Sperry would have had no assurance that it could have pursued its action to judgment or that a judgment would have been readily collectible. It is not dispositive that the award was more the result of private negotiations than Tribunal procedures, since Sperry filed its claim with the Tribunal and had a formal award entered, and since Sperry could be required to pay a charge for available governmental services that it never actually used. Pp. 493 U. S. 59-64.

(b) Section 502 does not violate the Due Process Clause of the Fifth Amendment. The retroactive application of the § 502 deductions to awards, such as Sperry's, made prior to the statute's enactment is justified by a rational legislative purpose: ensuring that all successful claimants before the Tribunal are treated alike in that all have to contribute to the Tribunal's costs. If § 502's application had been prospective only, those costs would have fallen disproportionately on claimants whose awards were delayed, and claimants who obtained awards prior to enactment would have enjoyed a windfall by avoiding contribution. Nor does § 502 violate the Clause's equal protection component by failing to assess a user fee against all claimants before the Tribunal, since Congress could have rationally concluded that only successful claimants realize a benefit sufficient to justify assessment of a fee and that assessing all claimants would undesirably deter small or uncertain claims. Pp. 493 U. S. 64-66.

(c) This Court will not reach the merits of Sperry's argument that § 502 was enacted in violation of the Origination Clause of Article I, § 7, of the Constitution. The question whether Origination Clause claims present nonjusticiable political questions is presently pending before the Court, see United States v. Munoz-Flores, cert. granted, post, p. 808, and it would be inappropriate to address Sperry's claim before the threshold justiciability question is decided. Furthermore, even assuming that Origination Clause claims are justiciable, this Court would benefit chanrobles.com-red

Page 493 U. S. 54

from the views of the Court of Appeals, which found it unnecessary to address the Origination Clause issue. P. 493 U. S. 66.

853 F.2d 904 (CA Fed.1988) reversed and remanded.

WHITE, J., delivered the opinion for a unanimous Court.



























chanrobles.com



ChanRobles Legal Resources:

ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com

ChanRobles MCLE On-line

ChanRobles Lawnet Inc. - ChanRobles MCLE On-line : www.chanroblesmcleonline.com