Presidential Authority to Settle Claims of the Hostages and Their Families

T he President may agree to a settlem ent w ith Iran w hereby any tort claims o f the 

hostages and their families against Iran w ould be extinguished, w ithout w orking a 

taking for a public purpose w ithin the Just Com pensation Clause o f the Fifth A m endment. T his conclusion is reinforced by the difficulty o f identifying loss to the hostages 

and their families as a result o f a claims settlem ent effected to secure their release, and 

the unlikelihood o f their being able to recover in to rt against Iran in any event in light 

o f the noncom m ercial to rt provision in the F oreign Sovereign Im munities A ct, 28 

U.S.C. § 1605(a)(5).

October 14, 1980

MEMORANDUM OPINION FOR TH E ATTORNEY G ENERAL

This responds to your request for our views on the authority of the 

President, pursuant to a general settlement of the present controversy 

with Iran that effects the release of the hostages, to extinguish tort 

claims the hostages and their families may wish to assert against the 

government of Iran. Our memorandum to you of September 16, 1980, 

regarding presidential authority to settle the Iranian crisis explores the 

President’s claims settlement authority in detail. [See p. 248 supra.]

Rather than repeat that discussion here, we will advert to its conclusions insofar as they affect the present discussion. We conclude here 

that the President has authority to extinguish the claims of the hostages 

and their families.

The President’s authority over claims of our nationals against foreign 

governments is well summarized in Restatement (Second) of Foreign 

Relations Law of the United States § 213 (1965):

The President may waive or settle a claim against a foreign state based on the responsibility of the foreign state 

for an injury to a United States national, without the 

consent of such national.

Presidents have often exercised this power to espouse and settle the 

claims of our citizens; these claims have often included tort claims for 

personal injury or death. See id., Reporter’s note to § 212.

Our earlier memorandum concluded that an exercise of this presidential authority to settle a claim for less than face value would not 

constitute a taking of private property within the meaning of the Just 

Compensation Clause of the Fifth Amendment to the Constitution.

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Nevertheless, we noted the existence of dicta to the contrary in two 

Court of Claims decisions, principally Gray v. United States, 21 Ct. Cl. 

340 (1886). Those dicta suggested that if the President settles a claim 

for less than “value” for unrelated foreign policy purposes, a taking of 

property for public use occurs. Whatever the current vitality of the 

Gray dicta, the question at hand is distinguishable, because these claims 

are held by persons whose benefit is a prime purpose of the Administration’s negotiations to settle the crisis—the hostages themselves and their 

families. When a settlement is reached, no court will be in a position to 

determine whether release could have been secured without settlement 

or extinction of the tort claims in return.

The foregoing conclusion regarding the difficulty of identifying loss 

to the hostages and their families as a result of a claims settlement is 

reinforced by analysis of their prospects for tort recovery absent an 

agreement. For several reasons, it seems unlikely that they could recover damages against the government of Iran in court. First, the 

Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(5), only allows 

the courts to award tort damages “against a foreign state for personal 

injury or death, . . . occurring in the United States.” Torts to the 

hostages have not occurred in the United States. Regarding claims by 

their families for such torts as intentional infliction of emotional distress, it could be argued that the statute is ambiguous regarding 

whether it is enough for the injury to occur here even if the wrong 

does not. The Act’s legislative history, however, emphasizes that the 

immunity of foreign states for their “public” acts as opposed to “commercial or private” acts is to be maintained, and that the exception for 

torts in the United States “is directed primarily at the problem of traffic 

accidents,” suggesting that actionable wrongs must occur here. H.R. 

Rep. No. 1487, 94th Cong., 2d Sess. 7, 20 (1976). Thus it seems unlikely 

that the hostage families could recover against Iran in American courts. 

Morever, tort claimants cannot reach any Iranian assets in the United 

States without a license from the government because of the blocking 

order, and our earlier memorandum makes it clear that access to 

blocked assets cannot be a matter of legal right. Finally, if the hostages 

and their families were to resort to a foreign forum in which Iranian 

assets might be found, they would discover that doctrines of sovereign 

immunity of a foreign state are general in international law.

We also note that Congress is currently considering a bill (H.R. 7085) 

that would provide hostages and their families a variety of benefits in 

compensation for their travail.* If these benefits may fairly be viewed 

as compensation for the loss of their tort claims, it would be even more 

difficult to conclude that any constitutional taking has occurred.

* N o t i :.: T he bill cited was eventually enacted as Pub. L. N o . 96-449, 94 Stat. 1967 (1980). Ed.

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Recognition of the prospect of a claims settlement in the legislative 

history would be helpful in this regard.

J o h n M . H a r m o n

Assistant Attorney General

Office o f Legal Counsel

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