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Supreme Court Upholds Terrorism Victims’ Ability to Collect Frozen Iran Funds

High court rejects challenge to law that intervened in pending court case

ENLARGE

The Supreme Court ruled 6-2 that victims of terrorist attacks, such as the 1983 bombing of this U.S. Marine barracks in Beirut, can collect about $2 billion in funds tied to Iran’s central bank. PHOTO: ASSOCIATED PRESS

By 

BRENT KENDALL

 

WASHINGTON—The Supreme Court on Wednesday cleared the way for victims of terrorist attacks to collect about $2 billion in frozen funds tied to Iran’s central bank.

The court, in a 6-2 decision, ruled Congress acted within its powers when it passed legislation in 2012 that granted victims involved a court case the explicit right to collect the money.

Justice Ruth Bader Ginsburg, writing for the majority, said the legislation was “designed to aid in the enforcement of federal-court judgments” and “does not offend separation of powers principles protecting the role of the independent judiciary.”

The ruling was a victory for more than 1,000 victims and family members who sued to hold Iran liable for sponsoring terrorist attacks, including the 1983 Marine barracks bombing in Beirut and the 1996 Khobar Towers bombing in Saudi Arabia.

Iran didn’t appear in court for those cases. The victims obtained judgments against the country that amounted to billions of dollars and then embarked on a yearslong legal campaign to try to collect. One target was nearly $2 billion in frozen assets tied to Bank Markazi, Iran’s central bank.

Bank Markazi said the funds were part of its foreign-currency reserves. The money was held in a Citibank account maintained by a Luxembourg financial intermediary doing business with an Italian bank that in turn did business with Markazi.

The bank argued that Congress unlawfully changed the legal rules in a pending case. Thevictims argued Congress had the power to change the law, even to influence pending cases.

Chief Justice John Roberts, joined by Justice Sonia Sotomayor, dissented from Wednesday’s ruling, saying lawmakers had intruded on the courts’ authority to decide cases.

“Hereafter, with this court’s seal of approval, Congress can unabashedly pick the winners and losers in particular pending cases,” the chief justice said.

Lawyer Theodore Olson, who argued the case for the victims, said the high court’s decision holds Iran accountable for supporting terrorism and “will bring long-overdue relief to more than 1,000 victims of Iranian terrorism and their families, many of whom have waited decades for redress.”

A lawyer representing Iran’s central bank didn’t respond to a request for comment.

The long-running case isn't affected by last year’s landmark nuclear agreement between Iran, the U.S. and other world powers. Under that deal, Tehran accepted limits on its nuclear activities in exchange for relief from economic sanctions.

Write to Brent Kendall at brent.kendall@wsj.com

 

 

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