SUPREME COURT OF THE UNITED STATES
BANK MARKAZI, aka THE CENTRAL BANK OF IRAN, PETITIONER v.
DEBORAH PETERSON, et al.
on writ of certiorari to the united states court of appeals for the second circuit
[April 20, 2016]
Chief Justice Roberts, with whom Justice Sotomayor joins, dissenting.
Imagine your neighbor sues you, claiming that your fence is on his property. His evidence is a letter from the previous owner of your home, accepting your neighbor’s version of the facts. Your defense is an official county map, which under state law establishes the boundaries of your land. The map shows the fence on your side of the property line. You also argue that your neighbor’s claim is six months outside the statute of limitations.
Now imagine that while the lawsuit is pending, your neighbor persuades the legislature to enact a new statute. The new statute provides that for your case, and your case alone, a letter from one neighbor to another is conclusive of property boundaries, and the statute of limitations is one year longer. Your neighbor wins. Who would you say decided your case: the legislature, which targeted your specific case and eliminated your specific defenses so as to ensure your neighbor’s victory, or the court, which pre-sided over the fait accompli
That question lies at the root of the case the Court confronts today. Article III of the Constitution commits the power to decide cases to the Judiciary alone. See Stern
564 U. S. 462,
. Yet, in this case, Congress arrogated that power to itself. Since 2008, respondents have sought $1.75 billion in assets owned by Bank Markazi, Iran’s central bank, in order to satisfy judgments against Iran for acts of terrorism. The Bank has vigorously opposed those efforts, asserting numerous legal defenses. So, in 2012, four years into the litigation, respondents persuaded Congress to enact a statute,
22 U. S. C. §8772, that for this case alone eliminates each of the defenses standing in respondents’ way. Then, having gotten Congress to resolve all outstanding issues in their favor, respondents returned to court . . . and won.
Contrary to the majority, I would hold that §8772 violates the separation of powers. No less than if it had passed a law saying “respondents win,” Congress has decided this case by enacting a bespoke statute tailored to this case that resolves the parties’ specific legal disputes to guarantee respondents victory.
Article III, §1 of the Constitution vests the “judicial Power of the United States” in the Federal Judiciary. That provision, this Court has observed, “safeguards the role of the Judicial Branch in our tripartite system.” Commodity Futures Trading Comm’n
478 U. S. 833,
. It establishes the Judiciary’s independence by giving the Judiciary distinct and inviolable authority. “Under the basic concept of separation of powers,” the judicial power “can no more be shared with another branch than the Chief Executive, for example, can share with the Judiciary the veto power, or the Congress share with the Judiciary the power to override a Presidential veto.” Stern
, 564 U. S., at 483 (internal quotation marks omitted). The separation of powers, in turn, safeguards individual freedom. See Bond
v. United States
564 U. S. 211,
As Hamilton wrote, quoting Montesquieu, “ ‘there is no liberty if the power of judging be not separated from the legislative and executive powers.’ ” The Federalist No. 78, p. 466 (C. Rossiter ed. 1961); see Montesquieu, The Spirit of the Laws 157 (A. Cohler, B. Miller, & H. Stone eds. 1989) (Montesquieu).
The question we confront today is whether §8772 violates Article III by invading the judicial power.
“The Framers of our Constitution lived among the ruins of a system of intermingled legislative and judicial powers.” Plaut
v. Spendthrift Farm, Inc.
514 U. S. 211,
. We surveyed those ruins in Plaut
to determine the scope of the judicial power under Article III, and we ought to return to them today for that same purpose.
Throughout the 17th and 18th centuries,
colonial legislatures performed what are now recognized as core judicial roles. They “functioned as courts of equity of last resort, hearing original actions or providing appellate review of judicial judgments.” Ibid.
They “constantly heard private petitions, which often were only the complaints of one individual or group against another, and made final judgments on these complaints.” G. Wood, The Creation of the American Republic 1776–1787, pp. 154–155 (1969). And they routinely intervened in cases still pending before courts, granting continuances, stays of judgments, “new trials, and other kinds of relief in an effort to do what ‘is agreeable to Right and Justice.’ ” Id.,
at 155; see Judicial Action by the Provincial Legislature of Massachusetts, 15 Harv. L. Rev. 208, 216–218 (1902) (collecting examples of such laws).
The judicial power exercised by colonial legislatures was often expressly vested in them by the colonial charter or statute. In the Colonies of Massachusetts, Connecticut, and Rhode Island, for example, the assemblies officially served as the highest court of appeals. See
1 The Public Records of the Colony of Connecticut 25 (Trumbull ed. 1850); M. Clarke, Parliamentary Privilege in the American Colonies 31–33 (1943). Likewise, for more than a half century, the colonial assembly of Virginia could review and set aside court judgments. Id.,
at 37–38. And in New Hampshire, where British authorities directed judicial appeals to the governor and his council, those officials often referred such matters to the assembly for decision. Id.,
at 33. Colonial assemblies thus sat atop the judicial pyramid, with the final word over when and how private disputes would be resolved.
Legislative involvement in judicial matters intensified during the American Revolution, fueled by the “vigorous, indeed often radical, populism of the revolutionary legislatures and assemblies.” Plaut
, 514 U. S., at 219; see Wood, supra,
at 155–156. The Pennsylvania Constitution of 1776 epitomized the ethos of legislative supremacy. It established a unicameral assembly unconstrained by judicial review and vested with authority to “ ‘redress grievances.’ ” Report of the Committee of the Pennsylvania Council of Censors 42 (F. Bailey ed. 1784) (Council Report); see Williams, The State Constitutions of the Founding Decade: Pennsylvania’s Radical 1776 Constitution and Its Influences on American Constitutionalism, 62 Temp. L. Rev. 541, 547–548, 556 (1989). The assembly, in turn, invoked that authority to depart from legal rules in resolving private disputes in order to ease the “hardships which will always arise from the operation of general laws.” Council Report 42–43.
The Revolution-era “crescendo of legislative interference with private judgments of the courts,” however, soon prompted a “sense of a sharp necessity to separate the legislative from the judicial power.” Plaut
, 514 U. S., at 221. In 1778, an influential critique of a proposed (and ultimately rejected) Massachusetts constitution warned that “[i]f the legislative and judicial powers are united, the maker of the law will also interpret it; and the law may then speak a language, dictated by the whims, the caprice, or the prejudice of the judge.” The Essex Result, in
The Popular Sources of Political Authority: Documents on the Massachusetts Constitution of 1780, p. 337 (O. Handlin & M. Handlin eds. 1966). In Virginia, Thomas Jefferson complained that the assembly had, “in many instances, decided rights which should have been left to judiciary controversy.” Jefferson, Notes on the State of Virginia 120 (Peden ed. 1982). And in Pennsylvania, the Council of Censors—a body appointed to assess compliance with the state constitution—decried the state assembly’s practice of “extending their deliberations to the cases of individuals” instead of deferring to “the usual process of law,” citing instances when the assembly overturned fines, settled estates, and suspended prosecutions. Council Report 38, 42. “[T]here is reason to think,” the Censors observed, “that favour and partiality have, from the nature of public bodies of men, predominated in the distribution of this relief.” Id.,
Vermont’s Council of Censors sounded similar warnings. Its 1786 report denounced the legislature’s “assumption of the judicial power,” which the legislature had exercised by staying and vacating judgments, suspending lawsuits, resolving property disputes, and “legislating for individ-uals, and for particular cases.” Vermont State Papers 1779–1786, pp. 537–542 (W. Slade ed. 1823). The Censors concluded that “[t]he legislative body is, in truth, by no means competent to the determination of causes between party and party,” having exercised judicial power “without being shackled with rules,” guided only by “crude notions of equity.” Id.,
at 537, 540.
The States’ experiences ultimately shaped the Federal Constitution, figuring prominently in the Framers’ decision to devise a system for securing liberty through the division of power:
“Before and during the debates on ratification, Madison, Jefferson, and Hamilton each wrote of the factional disorders and disarray that the system of legislative equity had produced in the years before the framing; and each thought that the separation of the legislative from the judicial power in the new Constitution would cure them.” Plaut
, 514 U. S., at 221.
As Professor Manning has concluded, “Article III, in large measure, reflects a reaction against the practice” of legislative interference with state courts. Manning, Response, Deriving Rules of Statutory Interpretation from the Constitution, 101 Colum. L. Rev. 1648, 1663 (2001).
Experience had confirmed Montesquieu’s theory. The Framers saw that if the “power of judging . . . were joined to legislative power, the power over the life and liberty of the citizens would be arbitrary.” Montesquieu 157. They accordingly resolved to take the unprecedented step of establishing a “truly distinct” judiciary. The Federalist No. 78, at 466 (A. Hamilton). To help ensure the “complete independence of the courts of justice,” ibid.
, they provided life tenure for judges and protection against diminution of their compensation. But such safeguards against indirect interference would have been meaningless if Congress could simply exercise the judicial power di-rectly. The central pillar of judicial independence was Article III itself, which vested “[t]he judicial Power of the United States” in “one supreme Court” and such “inferior Courts” as might be established. The judicial power was to be the Judiciary’s alone.
Mindful of this history, our decisions have recognized three kinds of “unconstitutional restriction[s] upon the exercise of judicial power.” Plaut
, 514 U. S., at 218. Two concern the effect of judgments once they have been rendered: “Congress cannot vest review of the decisions of Article III courts in officials of the Executive Branch,” ibid.
, for to do so would make a court’s judgment merely “an advisory opinion in its most obnoxious form,” Chicago & Southern Air Lines, Inc.
v. Waterman S. S. Corp.
333 U. S. 103,
. And Congress cannot “retroactively command[ ] the federal courts to reopen final judgments,” because Article III “gives the Federal Judiciary the power, not merely to rule on cases, but to decide
them, subject to review only by superior courts in the Article III hierarchy.” Plaut
, 514 U. S., at 218–219. Neither of these rules is directly implicated here.
This case is about the third type of unconstitutional interference with the judicial function, whereby Congress assumes the role of judge and decides a particular pending case in the first instance. Section 8772 does precisely that, changing the law—for these proceedings alone—simply to guarantee that respondents win. The law serves no other purpose—a point, indeed, that is hardly in dispute. As the majority acknowledges, the statute “ ‘sweeps away . . . any . . . federal or state law impediments that might otherwise exist’ ” to bar respondents from obtaining Bank Markazi’s assets. Ante,
at 9–10 (quoting App. to Pet. for Cert. 73a). In the District Court, Bank Markazi had invoked sovereign immunity under the Foreign Sovereign Immunities Act of 1976,
28 U. S. C. §1611(b)(1). Brief for Petitioner 28. Section 8772(a)(1) eliminates that immunity. Bank Markazi had argued that its status as a separate juridical entity under federal common law and international law freed it from liability for Iran’s debts. See First Nat. City Bank
v. Banco Para el Comercio Exterior de Cuba
462 U. S. 611
–627 (1983); Brief for Petitioner 27–28. Section 8772(d)(3) ensures that the Bank is liable. Bank Markazi had argued that New York law did not allow respondents to execute their judgments against the Bank’s assets. See N. Y. U. C. C. Law Ann. §8–112(c) (West 2002); see also App. to Pet. for Cert. 126a (agreeing with this argument). Section 8772(a)(1) makes those assets subject to execution. See id.,
Section 8772 authorized attachment, moreover, only for the
“financial assets that are identified in and the subject of proceedings in the United States District Court for the Southern District of New York in Peterson et al. v. Islamic Republic of Iran et al., Case No. 10 Civ. 4518 (BSJ) (GWG), that were restrained by restraining notices and levies secured by the plaintiffs in those proceedings . . . .” §8772(b).
And lest there be any doubt that Congress’s sole concern was deciding this particular case, rather than establishing any generally applicable rules, §8772 provided that nothing in the statute “shall be construed . . . to affect the availability, or lack thereof, of a right to satisfy a judgment in any other action against a terrorist party in any proceedings other than” these. §8772(c).[1
There has never been anything like §8772 before. Neither the majority nor respondents have identified another statute that changed the law for a pending case in an outcome-determinative way and explicitly limited its effect to particular judicial proceedings. That fact alone is “[p]erhaps the most telling indication of the severe constitutional problem” with the law. Free Enterprise Fund
v. Public Company Accounting Oversight Bd.
561 U. S. 477,
(internal quotation marks omitted). Congress’s “prolonged reticence would be amazing if such interference were not understood to be constitutionally proscribed.” Plaut
, 514 U. S., at 230.
Section 8772 violates the bedrock rule of Article III that the judicial power is vested in the Judicial Branch alone. We first enforced that rule against an Act of Congress during the Reconstruction era in United States
, 13 Wall. 128 (1872). Klein
arose from congressional opposition to conciliation with the South, and in particular to the pardons Presidents Lincoln and Johnson had offered to former Confederate rebels. See id.,
at 140–141; see, e.g.,
Presidential Proclamation No. 11,
737. Although this Court had held that a pardon was proof of loyalty and entitled its holder to compensation in the Court of Claims for property seized by Union forces during the war, see United States
, 9 Wall. 531, 543 (1870), the Radical Republican Congress wished to prevent pardoned rebels from obtaining such compensation. It therefore enacted a law prohibiting claimants from using a pardon as evidence of loyalty, instead requiring the Court of Claims and Supreme Court to dismiss for want of jurisdiction any suit based on a pardon.
See Act of July 12, 1870, ch. 251,
235; see also United States
v. Sioux Nation
448 U. S. 371,
Klein’s suit was among those Congress wished to block. Klein represented the estate of one V. F. Wilson, a Confederate supporter whom Lincoln had pardoned. On behalf of the estate, Klein had obtained a sizable judg-ment in the Court of Claims for property seized by the Union. Klein
, 13 Wall., at 132–134. The Government’s appeal from that judgment was pending in the Supreme Court when the law targeting such suits took effect. The Government accordingly moved to dismiss the entire proceeding.
This Court, however, denied that motion and instead declared the law unconstitutional. It held that the law “passed the limit which separates the legislative from the judicial power.” Id.
, at 147. The Court acknowledged that Congress may “make exceptions and prescribe regulations to the appellate power,” but it refused to sustain the law as an exercise of that authority. Id.,
at 146. Instead, the Court held that the law violated the separation of powers by attempting to “decide” the case by “prescrib[ing] rules of decision to the Judicial Department of the government in cases pending before it.” Id.,
at 145–146. “It is of vital importance,” the Court stressed, that the legislative and judicial powers “be kept distinct.” Id.,
The majority characterizes Klein
as a delphic, puzzling decision whose central holding—that Congress may not prescribe the result in pending cases—cannot be taken at face value.[2
] It is true that Klein
can be read too broadly, in a way that would swallow the rule that courts generally must apply a retroactively applicable statute to pending cases. See United States
v. Schooner Peggy
, 1 Cranch 103, 110 (1801). But Schooner Peggy
can be read too broadly, too. Applying a retroactive law that says “Smith wins” to the pending case of Smith
implicates profound issues of separation of powers, issues not adequately answered by a citation to Schooner Peggy
. And just because Klein
did not set forth clear rules defining the limits on Congress’s authority to legislate with respect to a pending case does not mean—as the majority seems to think—that Article III itself imposes no such limits.
The same “record of history” that drove the Framers to adopt Article III to implement the separation of powers ought to compel us to give meaning to their design. Plaut
, 514 U. S., at 218. The nearly two centuries of experience with legislative assumption of judicial power meant that “[t]he Framers were well acquainted with the danger of subjecting the determination of the rights of one person to the tyranny of shifting majorities.” INS
462 U. S. 919,
(Powell, J., concurring in judgment) (internal quotation marks omitted). Article III vested the judicial power in the Judiciary alone to protect against that threat to liberty. It defined not only what the Judiciary can do, but also what Congress cannot.
The Court says it would reject a law that says “Smith wins” because such a statute “would create no new substantive law.” Ante
12, n. 17. Of course it would: Prior to the passage of the hypothetical statute, the law did not provide that Smith wins. After the passage of the law, it does. Changing the law is simply how Congress acts. The question is whether its action constitutes an exercise of judicial power. Saying Congress “creates new law” in one case but not another simply expresses a conclusion on that issue; it does not supply a reason.
“Smith wins” is a new law, tailored to one case in the same way as §8772 and having the same effect. All that both statutes “effectuat[e],” in substance, is lawmakers’ “policy judgment” that one side in one case ought to prevail. Ante,
at 18. The cause for concern is that though the statutes are indistinguishable, it is plain that the majority recognizes no limit under the separation of powers beyond the prohibition on statutes as brazen as “Smith wins.” Hamilton warned that the Judiciary must take “all possible care . . . to defend itself against [the] attacks” of the other branches. The Federalist No. 78, at 466. In the Court’s view, however, Article III is but a constitutional Maginot Line, easily circumvented by the simplest maneuver of taking away every defense against Smith’s victory, without saying “Smith wins.”
Take the majority’s acceptance of the District Court’s conclusion that §8772 left “plenty” of factual determinations for the court “to adjudicate.” Ante
16–17, and n. 20 (internal quotation marks omitted). All §8772 actually required of the court was two factual determinations—that Bank Markazi has an equitable or beneficial interest in the assets, and that no other party does, §8772(a)(2)—both of which were well established by the time Congress enacted §8772. Not only had the assets at issue been frozen pursuant to an Executive Order blocking “property of the Government of Iran,” Exec. Order No. 13599, 77 Fed. Reg. 6659 (2012), but the Bank had “repeatedly insisted that it is the sole beneficial owner of the Blocked Assets,” App. to Pet. for Cert. 113a. By that measure of “plenty,” the majority would have to uphold a law directing judgment for Smith if the court finds that Jones was duly served with notice of the proceedings, and that Smith’s claim was within the statute of limitations. In reality, the Court’s “plenty” is plenty of nothing, and, apparently, nothing is plenty for the Court. See D. Heyward & I. Gershwin,
Porgy and Bess: Libretto 28 (1958).
It is true that some of the precedents cited by the majority, ante,
at 17–19, have allowed Congress to approach the boundary between legislative and judicial power. None, however, involved statutes comparable to §8772. In Robertson
v. Seattle Audubon Soc.
503 U. S. 429 (1992)
, for example, the statute at issue referenced particular cases only as a shorthand for describing certain environmental law requirements, id.,
at 433–435, not to limit the statute’s effect to those cases alone. And in Plaut
, the Court explicitly distinguished the statute before it—which directed courts to reopen final judgments in an entire class of cases—from one that “ ‘single[s] out’ any defendant for adverse treatment (or any plaintiff for favorable treatment).” 514 U. S., at 238. Plaut
, in any event, held the statute before it invalid
, concluding that it violated Article III based on the same historical understanding of the judicial power outlined above. Id.,
at 219–225, 240.[3
I readily concede, without embarrassment, that it can sometimes be difficult to draw the line between legislative and judicial power. That should come as no surprise; Chief Justice Marshall’s admonition “that ‘it is a constitution
we are expounding’ is especially relevant when the Court is required to give legal sanctions to an underlying principle of the Constitution—that of separation of powers.” Youngstown Sheet & Tube Co.
343 U. S. 579
–597 (1952) (Frankfurter, J., concurring) (quoting McCulloch
, 4 Wheat. 316, 407 (1819)). But however difficult it may be to discern the line between the Legislative and Judicial Branches, the entire constitu-tional enterprise depends on there being
such a line. The Court’s failure to enforce that boundary in a case as clear as this reduces Article III to a mere “parchment barrier[ ] against the encroaching spirit” of legislative power. The Federalist No. 48, at 308 (J. Madison).
Finally, the majority suggests that §8772 is analogous to the Executive’s historical power to recognize foreign state sovereign immunity on a case-by-case basis. As discussed above, however, §8772 does considerably more than withdraw the Bank’s sovereign immunity. Supra,
at 7–8. It strips the Bank of any protection that federal common law, international law, or New York State law might have offered against respondents’ claims. That is without analogue or precedent. In any event, the practice of applying case-specific Executive submissions on sovereign immunity was not judicial acquiescence in an intrusion on the Judiciary’s role. It was instead the result of substantive sovereign immunity law, developed and applied by the courts, which treated such a submission as a dispositive fact. See Verlinden B. V.
v. Central Bank of Nigeria
461 U. S. 480
–487 (1983); Ex parte Peru
318 U. S. 578
The majority also compares §8772 to the political branches’ authority to “exercise[ ] control over claims against foreign states and the disposition of foreign-state property in the United States.” Ante,
at 21 (citing Dames & Moore
453 U. S. 654 (1981)
). In Dames & Moore
, we considered whether the President had authority to suspend claims against Iran, and to nullify existing court orders attaching Iran’s property, in order to fulfill U. S. obligations under a claims settlement agreement with that country. Id.
, at 664–667. We held that the President had that power, based on a combination of statutory authorization, congressional acquiescence, and inherent Executive power. See id.,
at 674–675, 686.
The majority suggests that Dames & Moore
supports the validity of §8772. But Dames & Moore
was self-consciously “a restricted railroad ticket, good for this day and train only.” Smith
321 U. S. 649,
(Roberts, J., dissenting). The Court stressed in Dames & Moore
that it “attempt[ed] to lay down no general ‘guidelines’ covering other situations not involved here, and attempt[ed] to confine the opinion only to the very questions necessary to [the] decision of the case.” 453 U. S., at 661; see also American Ins. Assn.
539 U. S. 396,
(Ginsburg, J., dissenting) (“Notably, the Court in Dames & Moore
was emphatic about the ‘narrowness’ of its decision.”).
There are, moreover, several important differences between Dames & Moore and this case. For starters, the executive action Dames & Moore upheld did not dictate how particular claims were to be resolved, but simply required such claims to be submitted to a different tribunal. 453 U. S., at 660. Furthermore, Dames & Moore sanctioned that action based on the political branches’ “longstanding” practice of “settl[ing] the claims of [U. S.] nationals against foreign countries” by treaty or executive agreement. Id., at 679. The Court emphasized that throughout our history, the political branches have at times “disposed of the claims of [U. S.] citizens without their consent, or even without consultation with them,” by renouncing claims, settling them, or establishing arbitration proceedings. Id., at 679–681 (internal quotation marks omitted). Those dispositions, crucially, were not exercises of judicial power, as is evident from the fact that the Judiciary lacks authority to order settlement or establish new tribunals. That is why Klein was not at issue in Dames & Moore. By contrast, no comparable history sustains Congress’s action here, which seeks to provide relief to respondents not by transferring their claims in a manner only the political branches could do, but by commandeering the courts to make a political judgment look like a judicial one. See Medellín v. Texas,
552 U. S. 491,
(refusing to extend the President’s claims-settlement authority beyond the “narrow set of circumstances” defined by the “ ‘systematic, unbroken, executive practice, long pursued to the knowledge of the Congress and never before questioned’ ” (quoting Dames & Moore, 453 U. S., at 686)).
If anything, what Dames & Moore reveals is that the political branches have extensive powers of their own in this area and could have chosen to exercise them to give relief to the claimants in this case. Cf.
50 U. S. C. §1702(a)(1)(C) (authorizing the President, in certain emergency circumstances, to confiscate and dispose of foreign sovereign property). The authority of the political branches is sufficient; they have no need to seize ours.
* * *
At issue here is a basic principle, not a technical rule. Section 8772 decides this case no less certainly than if Congress had directed entry of judgment for respondents. As a result, the potential of the decision today “to effect important change in the equilibrium of power” is “immediately evident.” Morrison v. Olson,
487 U. S. 654,
(Scalia, J., dissenting). Hereafter, with this Court’s seal of approval, Congress can unabashedly pick the winners and losers in particular pending cases. Today’s decision will indeed become a “blueprint for extensive expansion of the legislative power” at the Judiciary’s expense, Metropolitan Washington Airports Authority v. Citizens for Abatement of Aircraft Noise, Inc.,
501 U. S. 252,
, feeding Congress’s tendency to “extend[ ] the sphere of its activity and draw[ ] all power into its impetuous vortex,” The Federalist No. 48, at 309 (J. Madison).
I respectfully dissent.