Chief Justice Roberts May Get To Decide A Key Dispute In U.S.-Iran Relations

WASHINGTON -- The Supreme Court may not be ready to take orders from President Barack Obama and Congress, even when delicate issues of foreign affairs are at stake.

The justices on Wednesday were confronted with a law that directs courts toward a particular outcome in a specific case. Not just any case, but one that may test whether the United States can be trusted to keep its end of the nuclear agreement with Iran. 

Bank Markazi v. Peterson  isn't about the Iran deal itself, but about whether a federal law that tells courts to award billions in assets owned by Iran to victims of terrorism violates the Constitution. And at a time when Chief Justice John Roberts' leadership and jurisprudence have come under fire , the wrong call could again arouse Republican ire against him.

The issue is at once straightforward and complicated. On one hand, the very job of Congress and the president is to pass laws with a specific purpose. And here, the two political branches for once agreed that an act of Congress  was needed to make it easier for victims and survivors of the Beirut barracks bombings and the Khobar Towers bombing  -- for which the U.S. believes Iran is responsible -- to receive restitution for their years of pain and suffering.

All well and good, but the law went a step further. It named a case that victims of the attacks had filed in a Manhattan federal courthouse, down to the docket number: "Peterson et al. v. Islamic Republic of Iran et al., Case No. 10 Civ. 4518."

In so many words, the law essentially orders the courts to direct "financial assets" identified in the case -- about $2 billion in bonds that Bank Markazi, Iran's central bank, holds in New York -- to victims in the ongoing court battle.

A federal district court and an appellate court did just that, ruling against Bank Markazi and for the families of the victims. Now, the bank is urging the Supreme Court to decide: Does it violate the separation of powers when Congress and the president tell the courts exactly what to do?

As the head of the federal judiciary, Roberts is probably best suited to resolve the question. He made his views clear during Wednesday's hearing.  

"Their job is to pass laws; our job is to decide a case," Roberts said. "When there's a dispute under one of the laws they pass, that's our job."

The court heard the Bank Markazi v. Peterson  case only a day after the Obama administration brokered the release of American sailors  held briefly by Iran -- in a show of diplomacy that proved heartening in a post-nuclear deal regime.

The Supreme Court is no diplomatic body, but it appears poised to act as one, because a ruling for the victims may signal to Iran that American courts aren't so independent after all -- and are willing to dance to the tune of the president and Congress in matters where the Constitution says they ought to be autonomous.

Justice Anthony Kennedy seemed to acknowledge this thin line when he spoke of the quandary of courts stepping in "when the assets are held by a country as to which we have very delicate relations with matters particularly involving dangerous acts allegedly perpetrated by that country."

But a ruling for the Iranian bank also may put the Supreme Court in a constitutional bind, because it would place it at the center of a controversy where the political branches have broad latitude to operate. Is the court willing to marshal Congress and the president's foreign affairs powers?

Roberts seemed to have a problem with laws that tell the court to "sign the dotted line," and wasn't fond of the federal government's argument that Congress could write statutes creatively so as to give the appearance they apply generally -- when they really aim to direct a particular result in a given case.

"You're saying Congress has to be cute about it," Roberts told Deputy Solicitor General Edward Kneedler, who appeared in support of the victims and the law. "They can't say Smith wins. But they can say in the case of Jones v. Smith, where the critical issue is this, we can change that in a way so Smith wins.  And don't worry about the law generally, because it's just this case."

But other justices seemed unwilling to micromanage Congress, as if to indicate that the Supreme Court is not a forum to decide how it chooses to operate.

"If you want to be cute, Congress has 4,000 ways of being cute," Justice Stephen Breyer said. "And I can't quite see this court trying to police those ways."

"Why doesn't it make a difference that this is in the area of foreign affairs?" wondered Justice Elena Kagan, herself a former solicitor general. "I had thought that our cases were pretty clear that the political branches ... have a great deal of power in this area, even when it comes to very particular controversies."

But a moment of candor from Roberts revealed that it may fall to him to help steer his colleagues to decide the Bank Markazi case in the most sensible way -- if only to draw a distinction between how the Supreme Court and other courts below it operate, compared with those on the world stage.

Speaking to Theodore Olson, who was solicitor general under George W. Bush and now represents the terrorism victims, Roberts said he was "concerned" about the larger implications for the court's image.

"You know, there are places in the world where courts function just the way our courts do," Roberts said, "except every now and then, when there's a case that the strong man who runs the country is interested in because a crony is [from] one of the parties or whatever, and he picks up the phone and he tells the court, 'You decide the case this way. And I don't care what you thought the law was. Decide it this way.'"

And then he added, "I'm not sure what's the difference here."

Roberts appears to know the stakes are high -- for how Iran views the U.S., for the separation of powers, for the court itself.

A decision is likely before the end of June.

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