Bank Markazi then argued that § 8772 was an unconstitutional breach of the separation of power between the legislative and judicial branches of government, because it effectively directed a particular result in a single case without changing the generally applicable law.

The United States Supreme Court granted certiorari and heard oral arguments in the case in January 2016, releasing their opinion in April 2016.

A 6–2 majority found that § 8772 was not unconstitutional, because it "changed the law by establishing new substantive standards"[2]: 18 —essentially, that if Iran owns the assets, they would be available for execution against judgments against Iran—for the district court to apply to the case.

[2]: 18–19  Justice Ruth Bader Ginsburg, writing for the majority, explained that the federal judiciary has long upheld laws that affect one or a very small number of subjects as a valid exercise of Congress' legislative power[2]: 21  and that the Supreme Court had previously upheld a statute that applied to cases identified by docket number in Robertson v. Seattle Audubon Society (1992).

Roberts contended that Congress and the Executive branch have sufficient authority that they do not need to "seize" the judiciary's power to "make a political decision look like a judicial one.

[2]: 4 Due to the issues raised in the case, Congress included a section within the Iran Threat Reduction and Syria Human Rights Act, codified as 22 U.S.C.

shall be subject to execution or attachment in aid of 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 torture, extrajudicial killing, aircraft sabotage, or hostage-taking, or the provision of material support or resources for such an act.In response to concerns the banking industry had to early drafts of the legislation,[17] § 8772 specified the assets that the section pertains to as: The financial assets described in this section are 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.

[2]: 7–8  Bank Markazi conceded that they held "equitable title to, or beneficial interest in, the assets", per §8772(a)(2)(A), but then claimed that § 8772 violated the separation of powers in the United States Constitution between the legislative (Congress) and judicial branches of government.

[20] Oral arguments were held on January 13, 2016, with appearances by Jeffrey Lamken for the petitioner, Theodore Olson for the respondents, and Deputy Solicitor General Edwin Kneedler for the United States as amicus curiae.

Justice Ruth Bader Ginsburg wrote the majority opinion, which held that § 8772 does not infringe on the separation of powers between the legislative and judicial branches of government, considering also that the law is an exercise of congressional authority regarding foreign affairs.

[20] The majority began by explaining that judiciary's authority under Article III of the United States Constitution is to "'say what the law is'", quoting Marbury v. Madison (1803).

'"[29] The majority found that "[o]ne cannot take this language from Klein at face value"[30] because the power of Congress to make retroactive laws applicable to pending cases has long been recognized.

The Fifth Amendment's Takings Clause prevents the Legislature (and other government actors) from depriving private persons of vested property rights except for a 'public use' and upon payment of 'just compensation.'

The Due Process Clause also protects the interests in fair notice and repose that may be compromised by retroactive legislation; a justification sufficient to validate a statute's prospective application under the Clause 'may not suffice' to warrant its retroactive application.The majority affirmed that "Congress may indeed direct courts to apply newly enacted, outcome-altering legislation in pending civil cases,"[2]: 16  citing its previous decisions in Plaut v. Spendthrift Farm, Inc. (1995), Robertson v. Seattle Audubon Society (1992), and Landgraf v. USI Film Products (1994).

[2]: 16  Accordingly, the majority found that § 8772 "changed the law by establishing new substantive standards"[2]: 18 —essentially, that if Iran owns the assets, they would be available for execution against judgments against Iran—for the district court to apply to the case.

[2]: 19 The final portion of the majority's opinion, in which Justice Thomas did not join,[20] upheld § 8772 as a valid exercise of Congress' authority to regulate foreign affairs.

[2]: 22  Citing Dames & Moore v. Regan (1981), a case which also involved the availability of Iranian assets for execution of judgments against Iran,[33] the majority points out that regulating foreign-state assets—e.g.

That question lies at the root of the case the Court confronts today.In the Chief Justice's view, § 8772 violates the separation of powers in Article III "[n]o less than if [Congress] had passed a law saying 'respondents win.

'"[3]: 2–3  The separation of powers between the judiciary and legislative branches was examined in detail in Plaut v. Spendthrift Farm, Inc. (1995),[3]: 3  in which the Supreme Court found unconstitutional a statute that reopened a case after a final judgment.

"[38] The interference of the legislatures in judicial matters "figur[ed] prominently in the Framers' decision to devise a system for securing liberty through the division of power.

[3]: 12  He compared the majority's opinion, which found that § 8772 left plenty of issues for the District Court to adjudicate, to "a constitutional Maginot Line, easily circumvented by the simplest maneuver of taking away every defense against Smith's victory, without saying 'Smith wins.

[3]: 15  The court's decision in Dames & Moore was based on the "longstanding practice of settling the claims of U.S. nationals against foreign countries by treaty or executive agreement.

Morrison v. Olson, 487 U.S. 654, 699 (1988) (Scalia, J., dissenting) Hereafter, with this Court's seal of approval, Congress can unabashedly pick the winners and losers in particular pending cases.

He wrote that "By permitting Congress to direct judgment in favor of victims of terrorism, the Bank Markazi Court helped compensate hundreds of people who suffered great tragedies.

But, perhaps inadvertently, the Court also conferred on Congress the expansive, and dangerous, power to target an individual for special treatment that is not applied to the population in general.

"[55] According to Stuart Newberger, an attorney who represents terror victims, the ruling could hinder foreign governments from using the judiciary to override determinations by Congress and the President regarding the availability of their assets to satisfy judgments against them.

Theodore Olson, counsel for the respondents, praised the ruling, saying it "will bring long-overdue relief to ... victims of Iranian terrorism and their families, many of whom have waited decades for redress.

"[57] Law professor Jimmy Gurulé said the decision "sends a powerful message to rogue states and state sponsors of terrorism that if you, directly or indirectly, provide material support for terrorism, you will be held accountable"[57]—sentiment echoed by Mark Dubowitz, director of the Foundation for Defense of Democracies[58]—and that "hopefully, it's also going to have a deterrent effect, or least cause Iran to think twice about supporting terrorist activity going forward.

[62] A week after the decision was announced, Iranian Foreign Minister Mohammad Javad Zarif wrote a letter to Secretary-General of the United Nations Ban Ki-moon urging him to use his good offices to intervene in securing the release of frozen funds and to stop interfering with Iran's international financial transactions.

[76][83] The head of the Nuclear Committee in Iran's parliament, Ibrahim Karkhaneh, decried the rulings as "cooperation between the American Congress, the government and courts to steal Iranian property.