In a rare foray into the realm of foreign policy, the U.S. Supreme Court ruled Wednesday that the Iranian government must use $2 billion in frozen assets to compensate U.S. victims of terrorist attacks, rejecting Tehran’s argument that Congress had exceeded its constitutional limits by intervening in the case.
On one side of the case, Bank Markazi v. Peterson, were more than 1,000 American victims of terrorist attacks linked to Iran, as well as their surviving family members. Opposing them was the Iranian government’s central bank. The case’s namesake, Deborah Peterson, lost her brother in the 1983 truck bombing of the U.S. Marine barracks in Beirut, Lebanon. She and hundreds of others launched a wrongful-death suit against Iran in 2001. A federal district court awarded them a $2.65 billion judgment in 2007.
While the parties argued in court about how and whether Iran would pay the judgment, Congress passed the Iran Threat Reduction and Syria Human Rights Act of 2012, which included a section that made $2 billion in frozen Iranian funds available for seizure in the Bank Markazi case, citing it by name.
The Second Circuit Court of Appeals, using the new law, then sided with the families in 2014 to seize the funds. In response, Iran asked the justices to intervene against Congress’ alleged encroachment on the judicial branch’s powers to decide cases. Previous Supreme Court rulings forbade Congress from forcing courts to hand down specific verdicts or reopen final judgments.