Economy, Business And Markets

CBI Takes Case to US Supreme Court

CBI Takes Case to US Supreme Court
CBI Takes Case to US Supreme Court

The Supreme Court on Wednesday will hear arguments in an appeal by the Central Bank of Iran, to reverse a 2014 lower-court ruling that said assets worth nearly $2 billion in frozen Iranian funds should be handed over to plaintiffs representing Americans killed or injured in attacks blamed on Iran. They won a $2.65 billion judgment against Iran in US federal court in 2007, Reuters reported.

The money is currently held in New York in a trust account at Citibank, part of Citigroup Inc.

At issue before the justices is whether Congress violated the separation of powers principle enshrined in the US Constitution by passing a 2012 law that specified the funds held in the trust account go toward paying off the judgment.

The CBI contends the legislative branch of the US government improperly sought to dictate the outcome of a specific case handled by the judiciary branch.

The Republican-led Congress and President Barack Obama's administration, often at odds over Iran policy, are urging the US Supreme Court to let the families of Americans killed in the 1983 bombing of a US Marine Corps barracks in Beirut and other attacks collect the money.

The families accused Iran of providing material support to Hezbollah, the Iran-backed Shi'ite political and military group accused of the 1983 truck bomb attack at the Marine compound in Beirut that killed 241 US servicemen. They are also seeking compensation on behalf those killed or injured in other attacks they linked to Iran, including the 1996 Khobar Towers truck bombing in Saudi Arabia that killed 19 US service members.

Delicate Time  

The lead plaintiff in the case is Deborah Peterson, who originally sued in 2001 on behalf of the estate of her brother, Marine Lance Corporal James Knipple, who was killed at age 20 in the Beirut bombing.

The high court's action comes at a delicate time in US-Iranian relations. The United States and five other world powers reached a deal with Iran last July to lift certain American, European Union and UN sanctions in exchange for Iran accepting limits on its nuclear program. Congressional Republicans strongly opposed the nuclear agreement championed by Obama.

In the Supreme Court case, the Obama administration, the Senate and a legal group representing leaders of the House of Representatives all filed court papers backing the plaintiffs.

The unity shown by the White House and Congress might normally carry significant weight with the justices, said Erwin Chemerinsky, dean of the University of California, Irvine School of Law. But because the case raises a question of the relationship between Congress and the courts, it could have "less effect than in other contexts," he said. A ruling is due by the end of June.