U.S. court struggles over Iran bank's bid to block payout to attack victims
By Lawrence Hurley
WASHINGTON (Reuters) - The Supreme Court's chief justice voiced concern on Wednesday that Congress trampled on the authority of the U.S. judiciary by passing a law dictating that families of Americans killed in attacks blamed on Iran get nearly $2 billion in frozen Iranian funds.
Other justices signaled support for the more than 1,000 Americans waging a long legal battle seeking compensation for the 1983 bombing of a U.S. Marine Corps barracks in Beirut and other attacks they say Iran orchestrated.
The nine justices heard an appeal by Bank Markazi, Iran's central bank, of a 2014 lower-court ruling that stated the frozen funds, held in New York in a Citibank trust account, should be handed over to the plaintiffs.
U.S. Chief Justice John Roberts, seizing on an argument made by Bank Markazi, appeared troubled that Congress improperly sought to direct the outcome of a legal dispute by passing a 2012 law specifically to help the American plaintiffs obtain the Iranian funds in this case.
The money would go toward satisfying a $2.65 billion judgment against Iran the families won in U.S. federal court in 2007.
During a one-hour argument in a case before the top U.S. court at a delicate time in American-Iranian relations, Roberts defended the role of the judiciary and emphasized that the authority of Congress is limited.
"Their job is to pass laws. Our job is to decide a case. When there's a dispute under one of the laws they pass, that's our job," Roberts said.
At issue is whether Congress violated the separation of powers principle enshrined in the U.S. Constitution that gives specific authority to the government's executive, legislative and judicial branches. The 2012 law stated the Iranian funds should go toward paying off the judgment.
Roberts used the analogy of a "strongman" leader of a foreign country calling a judge on behalf of an ally to tell him how to rule in a case.
"I’m not sure I see what the difference is here," Roberts said.
Other justices indicated they did not see the law as infringing upon the judiciary's independence as Roberts did.
Justice Antonin Scalia said Congress regularly enacts narrow laws that affect ongoing legal cases. This is allowed so long as it does not undo an already-decided case, Scalia added.
Justice Ruth Bader Ginsburg noted the case before the court concerned judgments in 19 different lawsuits that were consolidated, casting doubt on whether Congress was meddling in a single case.
The plaintiffs accused Iran of providing material support to Hezbollah, the Iran-backed Shi'ite Islamist political and military group responsible for the 1983 truck bomb attack at the Marine compound in Beirut that killed 241 U.S. servicemen. They also sought compensation related to other attacks including the 1996 Khobar Towers truck bombing in Saudi Arabia that killed 19 U.S. service members.
DEFERENCE TO THE EXECUTIVE BRANCH
Justices Elena Kagan and Stephen Breyer suggested the case be viewed from a foreign policy perspective. In foreign policy disputes, courts generally give deference to the executive branch. In the Iran case, President Barack Obama's administration and congressional leaders support the plaintiffs.
Justice Anthony Kennedy, who often casts the deciding vote in close cases, wondered if Congress has more leeway when the U.S. has "very delicate relations" with the country in question, as with Iran.
But Kennedy grilled lawyers on both sides. He bristled when the Obama administration's lawyer, Edwin Kneedler, said that as long as Congress makes a change to the underlying law when it passes a bill, it does not matter whether the new law has broad application or affects only one ongoing legal case.
"I find that a very odd distinction," Kennedy said.
The lead plaintiff in the case is Deborah Peterson, whose brother, Marine Lance Corporal James Knipple, died in the Beirut bombing.
A ruling is due by the end of June.
The case comes a critical moment in U.S.-Iranian relations. A landmark accord reached by the United States and five other world powers to lift economic sanctions in exchange for Iran accepting limits on its nuclear program is expected to be implemented in the coming days.
Earlier on Wednesday, Iran released 10 U.S. Navy sailors after holding them overnight, saying it had determined their two U.S. Navy patrol boats had entered Iranian territorial waters in the Gulf by mistake.
(Reporting by Lawrence Hurley; Editing by Will Dunham)
