United States v. Sperry Corp.

entered into contracts with the Government of Iran prior to the seizure of the United States Embassy in Tehran on November 4, 1979. The details of the seizure of the Embassy and diplomatic personnel and the ensuing diplomatic crisis want no repetition here. We need address only the means eventually established by the Governments of the United States and Iran to resolve claims by American companies against Iran.

On November 14, 1979, President Carter issued Executive Order No. 12170, blocking the removal or transfer of all property of the Government of Iran subject to American jurisdiction. 3 CFR 457 (1980). One day later, the Secretary of the Treasury issued regulations invalidating any attachment affecting Iranian property covered by the Executive Order unless the attachment was licensed by the Secretary. 31 CFR § 535.203 (e) (1980). The regulations provided that any such license could be “amended, modified, or revoked at any time.” §535.805. On November 26, 1979, the President granted a general license authorizing judicial proceedings against Iran but not the “entry of any judgment or of any decree or order of similar or analogous effect . . . .” § 535.504(b)(1). A subsequently issued regulation made clear that the President’s license authorized prejudgment attachments. §535.418.

As part of the resolution of the diplomatic crisis, the United States and Iran entered into an agreement embodied in two declarations of the Government of Algeria commonly referred to as the Algiers Accords (hereinafter the Accords). App. 29-42. The Accords provided for the establishment in The Hague of an international arbitral tribunal, known as the Iran-United States Claims Tribunal (hereinafter the Tribunal), to hear claims brought by Americans against the Government of Iran. The establishment of the Tribunal was to

preclude litigation by Americans against Iran in American courts, so the United States undertook to terminate such legal proceedings, unblock Iranian assets in the United States, and nullify all attachments against those assets. Id., at 30 . To implement the Accords, President Carter issued a series of Executive Orders on January 19, 1981, revoking all licenses permitting the exercise of “any right, power, or privilege” with respect to Iranian funds and annulling all non-Iranian interests in Iranian assets acquired after the blocking order. Exec. Orders Nos. 12276-12285, 3 CFR 104-118 (1981). On February 24, 1981, President Reagan issued an Executive Order suspending all claims that “may be presented to the . . . Tribunal” and providing that such claims “shall have no legal effect in any action now pending in any court of the United States.” Exec. Order No. 12294, 3 CFR 139 (1981). This Court upheld the revocation of the licenses and the suspension of the claims in Dames & Moore v. Regan, 453 U. S. 654 (1981).

Prior to the Accords, Sperry had filed suit against Iran in the United States District Court for the District of Columbia and had obtained a prejudgment attachment of blocked Iranian assets, but the Executive Orders sustained in Dames & Moore invalidated that attachment and prohibited Sperry from further pursuing its claims against Iran in any American courts. Sperry therefore filed a claim against Iran with the Tribunal and also began settlement negotiations with Iran. In February 1982, Sperry and Iran reached an agreement requiring the payment by Iran to Sperry of $2.8 million. The Government of Iran gave the settlement final approval on July 8, 1982.

Sperry and Iran then filed a joint application with the Tribunal, which was granted, to have the settlement entered as an “Award on-Agreed Terms.” The entry of the settlement provided Sperry with a significant benefit, for it gave the settlement agreement the status of an award by the Tribunal, and under the Accords, all awards of the Tribunal are “final

claimants before the Tribunal and directs the Federal Reserve Bank of New York to deduct from Tribunal awards paid out of the Security Account an amount equal to 114% of the first $5 million and 1% of any amount over $5 million. Section 502(a) states that these charges are to be deducted “as reimbursement to the United States Government for expenses incurred in connection with the arbitration of claims of United States claimants against Iran before [the] Tribunal and the maintenance of the Security Account established pursuant to the [Accords].” Congress made §502 effective retroactive to June 7, 1982, the date on which the Treasury had issued the Directive License struck down by the Claims Court. See § 502(d).

Sperry renewed its challenge to the deduction in the Claims Court, arguing that the 114% deduction authorized by §502 was unconstitutional. The Claims Court rejected the constitutional claims and dismissed Sperry’s suit. 12 Cl. Ct. 736 (1987). The Court of Appeals for the Federal Circuit reversed and held that § 502 was unconstitutional as it caused a taking of Sperry’s private property without just compensation. 853 F. 2d 904 (1988). The Court of Appeals likened the 114% deduction by the Federal Reserve Bank of New York to the permanent physical occupation by the Government of private property which, this Court held in Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 , 441 (1982), is always a “taking” requiring just compensation. The Court of Appeals was unmoved by the United States’ argument that there was no taking given the benefits that Sperry had obtained from the Tribunal: “[W]e do not see the benefit of the Tribunal to Sperry when prior to the Accords it had secured the attachment of Iranian assets sufficient to cover its eventual award and, had the President not suspended American claims, would have had no need for the Tribunal.” 853 F. 2d, at 908 .

The United States invoked our appellate jurisdiction under the version of 28 U. S. C. § 1252 (1982 ed.) in effect before its

than what would have been recovered in ordinary litigation and that being forced to take the lesser amount was an unconstitutional taking of property. The ease thus turns only on the constitutionality of the deduction.

As for the deduction itself, the United States urges that it is not a taking at all but is a reasonable “user fee” assessed against claimants before the Tribunal and intended to reimburse the United States for its costs in connection with the Tribunal. Sperry responds that the § 502 charge cannot be upheld as a user fee because there has been no showing that the amount of the deduction approximates the cost of the Tribunal to the United States or bears any relationship to Sperry’s use of the Tribunal or the value of the Tribunal’s services to Sperry. None of Sperry’s submissions is persuasive.

Section 502(a) specifically states that the deductions are made as “reimbursement to the United States Government for expenses incurred in connection with the arbitration of claims of United States claimants against Iran before [the] Tribunal and the maintenance of the Security Account. . . .” Given especially this specific declaration by Congress that the deductions are intended to reimburse costs incurred by the United States, the burden must lie with Sperry to demonstrate that the reality of § 502 belies its express language before we conclude that the deductions are actually takings. Cf. Pittsburgh v. Alco Parking Corp., 417 U. S. 369 , 375-376 (1974). That burden has not been met.

This Court has never held that the amount of a user fee must be precisely calibrated to the use that a party makes of Government services. Nor does the Government need to record invoices and billable hours to justify the cost of its services. All that we have required is that the user fee be a “fair approximation of the cost of benefits supplied. ” Massachusetts v. United States, 435 U. S. 444 , 463, n. 19 (1978). In that case, the Court upheld a flat registration fee assessed by the Federal Government on civil aircraft, including aircraft owned by the States, against a challenge that the fee

Sperry complains that the United States has taken its property by charging it for the use of procedures that it has been forced to use, or at least that it would rather not have used. But as we have explained supra, at 60-61, a reasonable user fee is not a taking if it is imposed for the reimbursement of the cost of government services. “A governmental body has an obvious interest in making those who specifically benefit from its services pay the cost. . . .” Massachusetts v. United States, 435 U. S., at 462 (plurality opinion). Though we may accept Sperry’s word that it would have preferred to pursue its action against Iran in the familiar and proximate federal district courts, we cannot accept its contention that it did not benefit in any way from the procedures established by the Accords. The fact is that Sperry did benefit directly from the existence and functions of the Tribunal. The Accords that established the Tribunal and the Executive Orders that implemented the Accords assured Sperry that any award made to it, whether as the result of a settlement or otherwise, could be enforced in the courts of any nation and actually paid in this country. Had the President not agreed to the establishment of the Tribunal and the Security Account, Sperry would have had no assurance that it could have pursued its action against Iran to judgment or that a judgment would have been readily collectible. As it was, Sperry filed its claim with the Tribunal, arrived at a settlement with Iran, and had the settlement entered as a formal award by the Tribunal, which was paid in full except for the deduction at issue in this case.

It is not at all dispositive that the award to Sperry was more the result of private negotiations between Sperry and Iran than the Tribunal procedures placed at Sperry’s disposal. Sperry filed its claim with the Tribunal and had a formal award entered. Furthermore, Sperry may be required to pay a charge for the availability of the Tribunal even if it never actually used the Tribunal; Sperry received the “benefit from [the Tribunal] in the sense that the services are available for [its] use.” Massachusetts v. United States, supra,

at 468 ; see also Clyde Mallory Lines v. Alabama ex rel. State Docks Comm’n, 296 U. S. 261 , 266-267 (1935). Had Sperry’s negotiations with Iran failed, it would have then had the opportunity to use the hearing rooms, translation facilities, and facilities for service of documents made available through the Tribunal and the State Department. The Tribunal made available to claimants such as Sperry sufficient benefits to justify the imposition of a reasonable user fee.

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We turn next to Sperry’s due process claims. Sperry urges that § 502 violates the Due Process Clause because the deductions apply to awards, such as Sperry’s, made by the Tribunal prior to the enactment of the statute. Our standard of review is settled:

“[Retroactive legislation does have to meet a burden not faced by legislation that has only future effects. Tt does not follow . . . that what Congress can legislate prospectively it can legislate retrospectively. The retroactive aspects of legislation, as well as the prospective aspects, must meet the test of due process, and the justifications for the latter may not suffice for the former.’ But that burden is met simply by showing that the retroactive application of the legislation is itself justified by a rational legislative purpose.” Pension Benefit Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717 , 730 (1984) (quoting Usery v. Turner Elkhorn Mining Co., 428 U. S. 1 , 16-17 (1976)) (citation omitted).

We agree with the United States that the retroactive application of § 502 is justified by a rational legislative purpose. Retroactive application of §502 ensures that all successful claimants before the Tribunal are treated alike in that all have to contribute toward the costs of the Tribunal. If Congress had made the application of § 502 prospective only, the costs of the Tribunal would have fallen disproportionately on the claimants whose awards, for whatever reason, were

Moreover, as discussed supra, at 65, a sensible distinction may be made between successful claimants who have completed the Tribunal proceedings and all other claimants.

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As a final ground for affirming the judgment below, Sperry relies on an argument presented to, but not passed on by, the Court of Appeals, i. e., that § 502 was enacted in violation of the Origination Clause of Article I, § 7, which provides that “[a]ll Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.” Sperry refers us to the legislative history of the Foreign Relations Authorization Act, which indicates that § 502 was added as a Senate amendment to a bill that contained no revenue-raising provisions when it originated in the House.

We do not reach the merits of this contention. In another case to be argued this Term, we have directed the parties to brief whether claims based on the Origination Clause present nonjusticiable political questions. See United States v. Munoz-Flores, cert. granted, post, p. 808; cf. INS v. Chadha, 462 U. S. 919 , 940-943 (1983); Baker v. Carr, 369 U. S. 186 , 217 (1962). Although this Court has on prior occasions appeared to address the merits of Origination Clause claims, see, e. g., Flint v. Stone Tracy Co., 220 U. S. 107 , 143 (1911); Millard v. Roberts, 202 U. S. 429 (1906); Twin City Bank v. Nebeker, 167 U. S. 196 (1897), it would be inappropriate for us to do so now, before we decide the threshold question of justiciability in Munoz-Flores. Furthermore, even assuming that Origination Clause claims are justiciable, we would benefit from the views of the Court of Appeals, which found it unnecessary to address the Origination Clause issue. Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.