Federal Responses to International Conflict and Terrorism: Property Rights Issues
Released: 2004-10-06T00:00:00

Summary:
Among federal actions dealing with international conflict, wars, and terrorism, direct impingements on private property are common. Besides the obvious ravages of battle, there havehistorically been military occupations and requisitions of property not in the actual theater of war. And, non-military measures may be used against assets, attachments on foreign assets, causes ofaction, and so on.
Unsurprisingly, holders of affected property interests have claimed that their property was "taken" and demanded compensation, invoking the Takings Clause of the Fifth Amendment. Thisreport finds that based on case law to date, Takings Clause limits on federal response to internationalthreats are few, but most certainly do exist - mostly when private property is impressed into militaryservice not in the theater of actual war.
Successful takings claims in the international area, often involving national security, are made difficult by four principles. First, international dangers have consistently prompted courts to extendextra deference to responsive government measures when resolving regulatory takings claims. Second, courts say that when dealing in foreign commerce, the possibility of evolving worldcircumstances and U.S. response thereto make any expectation of government noninterferenceunreasonable. Third, the benefit accruing to the property owner from the government action mayoutweigh the harm. And fourth, there is deference to the President's constitutional role asrepresentative of the federal government in the field of foreign relations - often expressed as the"political question doctrine."
The protection extended by the Takings Clause also depends on the legal status of the property's owner. The property of U.S. citizens gets the most protection; enemy alien property, none; andfriendly alien property somewhere in between, depending on whether the alien has "substantialconnections" with the United States.
Takings claims against the freezing and vesting of foreign assets have universally been rejected, though with an occasional judicial caution that an overly protracted freeze might be a taking. Inother areas, government frustration of performance under international commercial contracts appearsto have yielded no successful takings claims, while law enforcement, where physical damage resultsfrom the pursuit of criminal suspects or financial damage results from the operation of frontorganizations, has prompted some judicial concerns and a minority of successful takings claims atthe state level.
In sharp contrast with the poor record of takings claims in the above areas, claimants challenging the impressing of private property into military or related government service generallyhave prevailed - wartime or not. Examples include military overflights, seizure and operation ofcoal mines during wartime, and requisitioning of private property. But military destruction ofproperty in connection with actual battle, or to thwart an advancing enemy, is not compensable.

subsections: section_title: I. Broad Doctrines That Mitigate Against Takings
paragraphs: The existence of war, terrorism, or other international conflict does not suspend the TakingsClause's protection of private property. (4) Still, severalbroad takings-law principles of particularrelevance to international threats and national security present daunting obstacles for takings claimsin this area. 
Heightened judicial deference in regulatory takings cases
International dangers have consistently prompted courts to extend extra deference to responsive government measures when dealing with regulatory takings claims. ("Regulatory takings claims"are those based on the government's restriction of a property's use , rather than its physical invasionor outright expropriation of the property.) Indeed, the judicial deference is great enough that ourresearch failed to reveal any instance where a regulatory taking claim based on federal governmentaction against an international threat has succeeded. 
Statements of judicial deference are found in numerous cases rejecting regulatory takings claims against the United States - claims based on (1) the federal government's temporary wartimeshutdown of non-essential gold mines to free up needed mine workers and mining equipment, UnitedStates v. Central Eureka Mining Co., 357 U.S. 155, 168 (1958) ("In the context of war, we have beenreluctant to find that degree of regulation which, without saying so, requires compensation to be paidfor resulting losses of income."); (2) wartime rent controls, Block v. Hirsh , 256 U.S. 135, 157 (1920)("[a] limit in time, to tide over a passing trouble, well may justify a law that could not be upheld asa permanent change"), and Bowles v. Willingham , 321 U.S. 503, 519 (1944) ("A nation which candemand the lives of its men and women in ... war is under no constitutional necessity of providinga system of price control on the domestic front which will assure each landlord a fair return ...."); (3)a federal order during the Arab oil embargo that an oil production company sell oil to a particularrefiner, Condor Operating Co. v. Sawhill , 514 F.2d 351 (Temp. Emer. Ct. App.) (citing Blockv.Hirsh quote, supra ), cert. denied , 421 U.S. 976 (1975); and (4) a federal prohibitionon the exerciseof stock options in a U.S. company by a foreign national with ties to Libya, a nation accused ofsponsoring terrorism, Paradissiotis v. United States , 49 Fed. Cl. 16, 23 (2001) ("It is unfortunate thatplaintiff lost his property outright. The preservation of the national security interest of the UnitedStates nevertheless greatly outweighs plaintiff's loss."), affirmed , 304 F.3d 1271 (Fed. Cir. 2002). (5)
The Condor Operating Co . and Paradissiotis decisions demonstrate that heightened judicialdeference is not restricted to international dangers of the traditional-war variety, or even to hostilitiesat all. 
One element of the general regulatory takings analysis is a balancing of the governmental interest advanced by the challenged government action against the burden imposed on the propertyowner. (6) The foregoing decisions in the internationalconflict and terrorism realms often do notexplicitly link their statements of deference to this broad takings-test factor - but such a relativeweighing is obviously what they are doing. In the case of major threats to the security of the state,the governmental interest is deemed to be so compelling as to be dispositive, or nearly so. 
Reduced expectations when doing business internationally
Another factor in the general regulatory takings test is the extent to which the government's action frustrated the reasonable investment-backed expectations of the property owner-plaintiff. (7) Citing this factor, the courts unanimously have spurned the takings claims of persons whose relations with foreign countries - through contracts, leaseholds, causes of action for compensation,etc. - were frustrated when the United States responded to deteriorating or hostile relations withthose countries. When dealing in foreign commerce, these decisions say, the possibility of changingworld circumstances and U.S. response thereto make any expectation of government noninterference unreasonable . One is charged with awareness that relations between the affected countries mightsour, and that the government might act in a way that interferes with one's property rights. (8) See, e.g.,767 Third Avenue Assocs. v. United States , 48 F.3d 1575 (Fed. Cir. 1995); Chang v. UnitedStates ,859 F.2d 893 (Fed. Cir. 1988); Paradissiotis v. United States , 49 Fed. Cl. 16 (2001), affirmed , 304F.3d 1271 (Fed. Cir. 2002); Abrahim-Youri v. United States , 36 Fed. Cl. 482, 486 (1996), affirmed ,139 F.3d 1462 (Fed. Cir. 1997), cert. denied , 524 U.S. 951 (1998); Rockefeller Center Propertiesv. United States , 32 Fed. Cl. 586, 592 (1995); Belk v. United States , 12 Cl. Ct. 732, 734 (1987), affirmed , 858 F.2d 706 (Fed. Cir. 1988). 
Most of the just-cited cases involve property interests (e.g., contracts) acquired at a time when the international situation was already foreboding - as in 767 Third Ave. Assocs. with the threat ofethnic strife in Yugoslavia, and in Chang and Paradissiotis with Libyan support ofinternationalterrorism. Or the plaintiffs had chosen to live in a country "where the potential for kidnapping andother terrorist acts existed and the possibility that the United States would have to intervene wasalways present." Belk , 12 Cl. Ct. at 734 (with regard to Iran). However, such pre-acquisitionstormclouds are not a prerequisite for courts to discount the property owner's expectations ofgovernment nonintervention, and deny the taking claim. It is enough that the property interest wasacquired at a time when the President had broad statutory authority to impose measures againstforeign assets in response to international conflicts. (9) 767 Third Ave. Assocs. , 48 F.3d at 1580-1581; Rockefeller Center Properties , 32 Fed. Cl. at 592-594. 
Benefits accruing to the plaintiff
In several cases, courts have rejected the taking claim because the challenged government action also conferred substantial benefit on the plaintiff, even if incidental benefit accrued to the UnitedStates as well. The leading case is YMCA v. United States , 395 U.S. 85, 92 (1969), where no takingwas found when U.S. troops occupied buildings in Panama to protect them from rioters. Accord , Abrahim-Youri v. United States , 139 F.3d 1462 (Fed. Cir. 1997); Belk v. United States ,858 F.2d 706,709 (Fed. Cir. 1988). 
Deference to government conduct of foreign policy and the President's role as commander in chief / Political question doctrine
Yet another recurring hurdle for the taking plaintiff is judicial deference to the President's constitutional role as representative of the federal government in the field of international relations,and his latitude as commander in chief. "Matters intimately related to foreign policy and nationalsecurity are rarely proper subjects for judicial intervention." Haig v. Agee , 453 U.S. 280, 292 (1981). Accord , Regan v. Wald , 468 U.S. 222, 242 (1984). This deference plays out both as to (1)thereviewability of the government action on which the taking claim is based, and (2) as a factor in thetaking analysis itself. 
Reviewability of the government action on which the taking claim is based. Governmentdeclarations and decisions involving national emergencies, war, and foreign relations are often heldto be outside the judicial reach - generally on "political question" grounds. The classic statement ofthe political question doctrine remains that of Baker v. Carr , 369 U.S. 186 (1962), which recognizedthat only certain types of cases are committed to the judicial branch for resolution. To be beyondjudicial reach under the doctrine, a case must involve at least one of six factors, among them whetherthere is a "a textually demonstrable commitment of the issue to a coordinate political department,or a lack of judicially discoverable and manageable standards for resolving it ...." Id . at 217. 
Numerous takings claims involving international conflicts have foundered on the political-question shoal. (10) For example, Belk v. United States , 858 F.2d 706 (Fed. Cir. 1988), dealtwith the Algerian Accords, under which the United States and Iran ended the hostage crisis in 1981. Several of the former hostages argued that because the Accords extinguished their causes of actionagainst Iran, the U.S. had taken those causes of action. (11) Though denying their claim on the merits,the court concluded alternatively that review of a policy decision made by the President during aninternational crisis is barred as a political question. "Most, if not all, of [the Baker v. Carr ] concernsare present in this case." Id . at 710. 
Most recently, the Federal Circuit used the political question doctrine to rebuff a taking claim brought by the owner of a manufacturing plant in the Sudan destroyed by U.S. cruise missiles. El-Shifa Pharmaceutical Industries Co. v. United States , 378 F.3d 1346 (Fed. Cir. 2004). Themissile attack was ordered by President Clinton following bombings of two U.S. embassies in EastAfrica, based on U.S. belief that the perpetrators were associated with al-Qaeda and that the plantwas manufacturing chemical weapons for al-Qaeda. The court found that the Constitution commitsto the President the power to designate enemy property in foreign territory - so, under the first Baker factor, the matter was a nonjusticiable political question. (12) Because the court thus had to accept thatplaintiff's property was enemy property, there could be no taking (see section II). (13) However, thecourt stressed the limited nature of its ruling in two respects. The outcome might have beendifferent, it said, had the plant been located in the United States, (14) or had there been no evidence thatthe President had in fact determined that the plant belonged to an enemy of the United States. 
Not every case or controversy that touches on foreign relations lies beyond judicial cognizance as a political question. Baker , 369 U.S. at 211. Courts assert that the doctrine is a narrow one, andare aware it offers a tempting refuge for the government defendant. Thus, the political questiondefense was rejected in Langenegger v. United States , 756 F.2d 1565 (Fed. Cir.), cert.denied , 474U.S. 824 (1985), where the taking claim was based on El Salvador's confiscation ofU.S.-citizen-owned land as part of an agrarian reform program encouraged by the United States. Resolution of the case, said the court, required no determination of El Salvador's sovereignty, nordid the plaintiff question the executive's authority or the validity of the expropriation. See alsoRamirez de Arellano v. Weinberger , 745 F.2d 1500 (D.C. Cir. 1984) (en banc) (due process claimagainst U.S. military's occupation of U.S. citizen's property in Honduras to train Honduran armydoes not raise political question), vacated on other grounds , 471 U.S. 1113 (1985).
Deference as a factor in the takings analysis itself. In Rockefeller Center Properties v. UnitedStates , 32 Fed. Cl. 586 (1995), the merits of the taking claim were reached. The TreasuryDepartment's blocking of assets pursuant to the International Emergency Economic Powers Act wasfound to further the important public interest in the President's ability to deal with internationalevents. This public interest entered the takings analysis through the "character of the governmentaction" factor, a component of the canonical takings test. (15) No taking was found. 
section_title: II. Status of the Property Owner and Location of the Property
paragraphs: The protection extended by the Takings Clause depends first on the legal status of the property'sowner - whether a U.S. citizen, friendly alien, or enemy alien. In the case of friendly aliens, itdepends further on the territorial or extraterritorial location of the property. The law developing inthis area is particularly important in light of the increasing frequency with which congressionalstatutes reach extraterritorial conduct, and with which U.S. offices abroad pursue the fight againstterrorism, drug trafficking, counterfeiters, and corrupt financiers.
U.S. citizens
The general rule is that the Takings Clause protects the property of U.S. citizens against takings by the United States wherever in the world the property may be located. Ashkir v. United States , 46Fed. Cir. 438, 444 (2000) (collecting cases). An exception is that all property, even that of U.S.citizens, is regarded as enemy property when located in enemy territory (see below, this section).
Friendly aliens
In the leading case, the property of a friendly alien (a Russian corporation) was held to be protected by the Takings Clause, just as that of U.S. citizens. Russian Volunteer Fleet v. UnitedStates , 282 U.S. 481, 489, 491-492 (1931). Because the alien's property was vessel-constructioncontracts with a New York shipyard, the decision is usually read as restricted to property locatedwithin the United States. (16) RussianVolunteer Fleet also declared that an alien's ability to invokeTakings Clause protection is not dependent on U.S. citizens being entitled to prosecute similarclaims against the alien's government in the courts of that country. Id. at 491-492. (But while theTakings Clause does not demand reciprocity, Congress does, at least when the case is filed in theU.S. Court of Federal Claims. Under 28 U.S.C. section 2502, the United States may be sued in thatcourt only by citizens of foreign governments that afford U.S. citizens the right to sue suchgovernments in their courts.)
Russian Volunteer Fleet received judicial gloss in a later decision asking whether the Fourth Amendment's protection against unreasonable searches and seizures applies to property owned bya nonresident alien - but located in a foreign country. United States v. Verdugo-Urquidez ,494 U.S.259 (1990). In holding that the Fourth Amendment does not, the Court surveyed other cases,including Russian Volunteer Fleet , in which it had held that friendly aliens enjoy certain rights underthe U.S. Constitution. Those cases, it clarified, "establish only that aliens receive constitutionalprotections when they have come within the territory of the United States and developed substantialconnections with this country." Id . at 271. But because Verdugo-Urquidez involved theFourthAmendment, and because its holding was not based exclusively on the substantial connectionsprerequisite, its authoritativeness with regard to Russian Volunteer Fleet and the Takings Clauseremained in doubt. (17)
Newer case law has grappled with the effect of Verdugo-Urquidez on the Takings Clause, ruling unanimously that the substantial connections rule does apply to alien-filed claims. Given theextraterritorial location of both plaintiffs and their property in these cases, such connections wereheld to be absent, and the takings claims dismissed. Hoffman v. United States , 53 F. Supp. 2d 483(D.D.C. 1999), affirmed , 17 Fed. Appx. 980 (Fed. Cir. 2001) (unpublished). involved Germannationals suing the United States for its refusal to turn over a photographic archive and watercolorspainted by Adolf Hitler, taken from Germany during the allied occupation after World War II. (18) Ashkir v. United States , 46 Fed. Cl. 438 (2000), involved a citizen of Somalia asserting a taking bythe United States, based on the U.S. military's occupation of and injury to his compound inMogadishu in aid of U.N. relief efforts. And Rosner v. United States , 231 F. Supp. 2d 1202 (S.D.Fla. 2002), involved a takings class action by Hungarian Jews who alleged that their valuables,confiscated by the pro-Nazi Hungarian government in 1944, were seized by the U.S. army whilebeing shipped by train to Germany, and never returned. Rosner also stressed that the substantialconnections with the United States must exist at the time of the alleged taking, not later.
Notwithstanding the unanimous endorsement of Verdugo-Urquidez in these trial-court decisions, the Federal Circuit recently declined to overrule its own contrary precedent. In Turneyv. United States , 115 F. Supp. 457 (Ct. Cl. 1957), the Circuit's predecessor court had held that U.S.seizure of radar equipment in the Philippines after World War II, owned by a Philippine corporation,was a taking. The court had rejected the government's broad argument that the Takings Clause lacksextraterritorial application. In its recent El-Shifa case, the Federal Circuit characterized Turney ascounseling in favor of applying the Takings Clause extraterritorially despite the absence ofsubstantial connections, placing Turney squarely in conflict with Verdugo-Urquidez. Itexpresslydeclined to resolve this conflict, however, because it did not need to: El-Shifa could be dismissedsolely on political question grounds (see section I).
At present, then, the Federal Circuit has not ruled authoritatively on whether there is a substantial-connections prerequisite for takings claims brought by friendly aliens against the UnitedStates. Case law reviewed above, however, suggests that if and when the Circuit does rule, it willendorse its existence.
Enemy aliens
 In contrast with friendly aliens, the property of enemy aliens receives no Takings Clauseprotection wherever the property may be found. Cummings v. Deutsche Bank , 300 U.S. 115, 120(1937); El-Shifa Pharmaceutical Industries Co. v. United States , 378 F.3d 1346, 1355 (Fed. Cir.2004).
Under the "rules of war," property of any person located in enemy territory is deemed enemy property, notwithstanding the nationality of the owner. As enemy property, it may be destroyedwithout Takings Clause compensation. Juragua Iron Co. v. United States , 212 U.S. 297, 305-308(1909). Query, however, whether the courts may balk at some confiscations in enemy territory,where the property is owned by a non-enemy national and the confiscation is unrelated to militarynecessity. For example, in Seery v. United States , 127 F. Supp. 601, 605 (Ct. Cl. 1955), the courtexpressed skepticism that the military could use a U.S.-citizen-owned estate in Austria as an officers'club without effecting a taking, even assuming Austria was still enemy territory months afterGermany's surrender. (19)
section_title: III. Freezing/Vesting of Assets, Suspending Judicial Process, Settling Claims
paragraphs: When the United States has moved to freeze or vest assets of hostile foreign nations or nationalsthereof, suspend judicial process initiated by U.S. nationals against such assets, or settle claims ofU.S. nationals against foreign sovereigns and their assets, courts have universally rejected takingsattacks, though with an occasional caution. 
Freezing of assets
Freezing of assets was accomplished, until 1977, under the Trading with the Enemy Act (TWEA). (20) During that time, the TWEA appliedto both wartime and any other period of nationalemergency declared by the President (typically in peacetime). In 1977, Congress enacted theInternational Emergency Economic Powers Act (IEEPA), (21) which removed the national emergencyauthority from TWEA and ensconced it exclusively in IEEPA. At the same time, IEEPA qualifiedthe emergency authority to reach only "any unusual and extraordinary threat, which has its sourcein whole or substantial part outside the United States" and respecting which the President declaresa national emergency under IEEPA. (22) IEEPA also grandfathered existing exercises of nationalemergency authority under TWEA. Both statutes now authorize the President to prohibit, amonga long list of things, "exercising any right ... with respect to ... any property in which any foreigncountry or a national thereof has any interest by any person, or with respect to any property, subjectto the jurisdiction of the United States." (23)
As far as reported court decisions reveal, every taking claim based on an asset freezing order under TWEA or IEEPA has failed. The key rationale used by courts has been that the freezing ofassets is merely temporary and not a vesting of title in the United States. See, e.g., Tran Qui Thanv. Regan , 658 F.2d 1296, 1304 (9th Cir.1981). Accord , Global Relief Found.v. O'Neill , 207 F. Supp.2d 779, 802 (N.D. Ill.), affirmed , 315 F.3d 748 (7th Cir. 2002), cert. denied ,124 S. Ct. 531 (2003); Holy Land Found. for Relief and Development v. Ashcroft , 219 F. Supp. 2d 57, 78 (D.D.C. 2002), affirmed , 333 F.3d 156 (D.C. Cir. 2003). 
Moreover, "temporary" has been loosely construed. Even the passage of considerable time since the freeze was imposed may not raise the taking specter, if hostile relations are equallylongstanding. See, e.g.,Tole S.A. v. Miller , 530 F. Supp. 999 (S.D.N.Y. 1981) (blockage of assetsof Cuban corporation for 18 years effected no taking), affirmed , 697 F.2d 298 (2d Cir. 1982) (table). Query, however, whether the Supreme Court's recent decision in Tahoe-Sierra PreservationCouncil v. Tahoe Regional Planning Agency , 535 U.S. 302 (2002), noting that land-use planningmoratoria may become takings if kept in place long enough, may lead courts to view protractedforeign asset freezes as takings. See Holy Land Found ., 219 F. Supp. 2d at 78 (owner of propertyfrozen eight months may "some day" have a more viable taking claim, citing Tahoe-Sierra ). See also Nielsen v. Sec'y of the Treasury , 424 F.2d 833, 843-844 (D.C. Cir. 1970) (blocking of foreignassets raises taking issue if continued indefinitely). (24)
Another rationale cited for ruling against the taking claimant is that the blocked foreign assets may be needed to satisfy present or future claims of U.S. citizens against the foreign country or itsnationals, or to use as leverage in negotiations with the hostile nation. Tole S.A. , 530 F. Supp. 999(discussing cases). "There is no reason," said the Supreme Court, "why [the United States] may not... make itself and its nationals whole from assets here before it permits such assets to go abroad insatisfaction of claims of aliens made elsewhere ...." United States v. Pink , 315 U.S. 203, 228(1942). (25)
In a recent case, the U.S. invoked IEEPA to prohibit a Cypriot citizen with Libyan ties from exercising stock options in a U.S. company - owing to Libya's support of terrorism. During thefreeze, the stock options expired, resulting in a total loss to the plaintiff. In finding no taking of theoption contract, the trial court relied particularly on the contingent nature of foreign commerce. Paradissiotis v. United States , 49 Fed. Cl. 16, 22 (2001). On appeal, plaintiff argued unsuccessfullythat the Treasury Department should have permitted him to exercise his stock options and thenretained the proceeds in a blocked, interest-bearing account, and that failure to do so was a taking. 304 F.3d 1271 (Fed. Cir. 2002). 
Vesting of assets
TWEA and IEEPA authorize not only the freezing of foreign assets, but the vesting of such assets. (26) The TWEA vesting authority is availableduring wartime; the IEEPA authority, "when theUnited States is engaged in armed hostilities or has been attacked by a foreign country or foreignnationals." In contrast with the freezing of assets, vesting has the United States actually takingownership of the property, so that it may be "held, used, administered, liquidated, sold, or otherwisedealt with" by the U.S. (27) The Supreme Court hascautioned that "this summary power to seize property which is believed to be enemy-owned is rescued from constitutional invalidity under theDue Process and [Takings] Clauses ... only by those provisions of the act which afford a non-enemyclaimant a later judicial hearing as to the propriety of the seizure." Societe Internationale v. Rogers ,357 U.S. 197, 211 (1958).
Suspension of judicial process and executive settlement of claims
In the name of foreign policy, the President has considerable authority to suspend judicial process against foreign assets and to settle with foreign nations the claims of U.S. citizens againstthose nations, or their nationals. (28) Theseexecutive powers received considerable judicial scrutinyfor possible takings in the aftermath of the Iranian hostage crisis. (29) The key documents are theIEEPA, under which President Carter blocked removal or transfer of Iranian assets in the U.S. exceptby license, and the Algerian Accords, under which the United States later agreed to substitutebinding arbitration for private litigation against Iran in U.S. courts.
Some courts have held that the President's suspension of private claims against Iran presented no ripe taking issue, since plaintiffs might recover fully in arbitration before the Iran-U.S. ClaimsTribunal. See, e.g., American Int'l Group, Inc. v. Islamic Republic of Iran , 657 F.2d 430 (D.C. Cir.1981); Chas. T. Main Int'l, Inc. v. Khuzestan Water and Power Auth. , 651 F.2d 800 (1stCir. 1981). Others have refused to reach the merits on political question grounds. See, e.g., Belk v. UnitedStates , 858 F.2d 706, 710 (Fed. Cir. 1988).
Where the taking issue in the case was reached, courts have stated or implied that in a proper case an executive cancellation of private claims by settlement could be a taking. See, e.g.,Langenegger v. United States , 756 F.2d 1565 (Fed. Cir.) (opining that an earlier decision of thecourt, finding no taking based on U.S. settlement of individual claims against China, did not standfor an absolute rule that extinguishment of claims can never be a taking), cert. denied , 474 U.S. 824(1985); American Int'l Group , 657 F.2d at 446. Research reveals no instance, however, where ataking has been found. For example, when the United States, through the Algerian Accords,extinguished causes of action asserted by the former Iranian hostages against the government of Iran,there was no taking. Belk , 858 F.2d 706. Belk pointed out that because the Accordsbrought aboutthe release of the hostages, they received a valuable benefit for the compromise of their claims.Similarly, no taking resulted when the President vacated pre-judgment attachments of Iranian assetsmade pursuant to revocable license. Dames & Moore v. Regan , 453 U.S. 654 (1981). 
More recently, holders of small claims against Iran asserted a taking based on the United States' espousal and settlement of their claims against that country. Abrahim-Youri v. United States , 139F.3d 1462 (Fed. Cir. 1997), cert. denied , 524 U.S. 951 (1998). The $50 million fund available tothe successful claimants was enough that each claimant received the full amount of principalawarded, but only a third of the interest accrued. No taking of the interest resulted, said the court,because as in Belk , the settlement here sought to benefit the claimants, whose claims had languishedmany years. Moreover, it said, "those who engage in international commerce must be aware thatinternational relations sometimes become strained ...." Id. at 1468. 
section_title: IV. International Contracts
paragraphs: Federal measures against foreign governments may severely frustrate performance underexisting contracts with those governments or their nationals. In asserting takings, disappointedcontract parties cite the fact that contract rights are generally held to be "property" for purposes ofthe Takings Clause, placing them under its protective umbrella. (30) In the international realm,however, takings plaintiffs invariably collide head-on with the contingent nature of expectationswhen contract performance hinges on the maintenance of friendly relations between nations. As afurther obstacle, courts on occasion note the additional takings law precept that the U.S. is held toonly frustrate contract performance, not take a contract right, when its actions incidentally blockperformance under existing contracts. (31) Researchreveals no successful takings claims in this area. See, e.g., Chang v. United States , 859 F.2d 893 (Fed. Cir. 1988) (employment contract); 767 ThirdAvenue Assocs. v. United States , 48 F.3d 1575 (Fed. Cir. 1995) (leasehold contract); Paradissiotisv. United States , 304 F.3d 1271 (Fed. Cir. 2002) (stock option contract). (32)
In Chang , for example, U.S. nationals or resident aliens entered into employment contracts with a Libyan oil company in 1985. The following year, the President issued an executive order underIEEPA, declaring a national emergency because of the threat posed by Libyan support ofinternational terrorism. The order declared that "no U.S. person may perform any contract insupport of an industrial or other commercial or governmental project in Libya." Plaintiffs' claim thatthe United States had thereby taken their employment contracts was rejected under the traditionalthree-factor balancing test for regulatory takings. Most pertinent to the international context of thedispute, the court said that persons entering into employment contracts overseas are on notice thatcontract performance turns on the continuation of friendly relations between nations. Indeed,relations between the United States and Libya were deteriorating at the time the contracts wereentered into.
section_title: V. Law Enforcement
paragraphs: In the course of their duties, law enforcement personnel may damage or destroy privateproperty, as a byproduct of pursuing criminal suspects. They may also seize property or bring aboutits forfeiture. Often, the harmed individual is an innocent party, and plainly these make the mostcompelling takings plaintiffs. 
This area is vast and is only touched upon here. Much of the case law deals with law enforcement by state personnel, where the classic situation involves police damage to the homes orretail stores of innocent parties in the process of breaking down doors or flushing out criminalsuspects. The majority view is that no taking occurs; at most, the state action constitutes a tort. (33) These state cases presumably have relevance to federal law enforcement against terrorists as well. 
Several federal agencies now combating terrorism have been on the receiving end of takings claims arising out of non-terrorism-related law enforcement. A typical seizure case is Alde, S.A. v.United States , 28 Fed. Cl. 26 (1993), holding that the U.S. Customs Service's seizure and temporarypossession of a private airplane until the court denied forfeiture was not a taking, despite the fact thatwhile in government storage the plane was heavily damaged by hurricane and theft. The court statedabsolutely that "[s]eizures carried out by the Government under its police power are not takings." Id . at 34. Parenthetically, forfeiture of private property, even as regards the interests of innocentowners or co-owners, is also rarely held to be a taking. See, e.g., Bennis v. Michigan , 517 U.S. 1163(1996). 
The CIA and FBI have been sued for takings where businesses created as fronts ultimately produced financial loss to innocent parties. In Adams v. United States , 20 Cl. Ct. 132 (1990), theCIA created and operated an investment-banking firm for intelligence gathering. The firm eventuallywent bankrupt, and the resulting losses to the firm's customers prompted them to claim a taking. Under the one scenario analyzed by the court that gave rise to a colorable taking claim, the plaintiffs'losses resulted chiefly from market losses, so the CIA was not accountable for any taking, or thelosses were not extensive enough to surmount the takings threshold. And, the character of thegovernment action cut against a taking, since the losses were not claimed to be the direct result ofthe cover operation, hence were purely consequential. 
A note of caution, however, was sounded by Janowsky v. United States , 133 F.3d 888 (Fed. Cir. 1998), where a business was turned over to the FBI for its use in investigating police corruption. The owner's taking claim, based on the resulting harm to the business, was rejected by the trial courton the ground that the turnover to the FBI had been voluntary. On appeal, the Federal Circuit askedwhether FBI statements to the owner rendered his participation coerced, and remanded to the trialcourt.
section_title: VI. Physical Takings and Appropriations, Mostly by the Military
paragraphs: Impressing private property into public service
The courts have long regarded physical occupations and outright expropriations as the most serious sort of government interference with property. Small wonder, then, that takings claims basedon physical takings or expropriations, as opposed to regulatory interferences, have often succeeded- despite the existence of war. The successful claims have arisen where the government, almostalways the military, has impressed private property into public service, rather than destroyed it asan incident of hostilities. "[T]he government does not avoid the Takings Clause by simply using itsmilitary forces as cover for activities that would otherwise be actionable if performed by one of itscivilian agencies." El-Shifa Pharmaceutical Industries Co. v. United States , 378 F.3d 1346, 1356(Fed. Cir. 2004). Merely because appropriating the property aids a war effort, even directly, is notsufficient to deflect the taking claim. 
The rule that military appropriations must be compensated, at least when not demanded by the immediate needs of battle, is illustrated by the abundant takings decisions on military flights overprivate property. When the interference with the use and enjoyment of such property is sufficientlysevere, courts find takings in both wartime, see, e.g., United States v. Causby , 328 U.S. 256 (1946)(taking resulted from low and frequent flights of military aircraft, during World War II, over chickenfarm), and peacetime, see, e.g., Argent v. United States , 124 F.3d 1277 (Fed. Cir. 1997). A relatedfactual circumstance led to a taking holding in Portsmouth Harbor Land & Hotel Co. v. UnitedStates , 260 U.S. 327 (1922) (if U.S. installed guns not simply as wartime defenses, but tosubordinate adjacent resort to government's right to fire across it at will in peacetime, a servitudehas been taken). A non -military case of wartime appropriation is United States v. Pewee CoalCo. ,341 U.S. 114 (1951), where a taking was found based on the government's seizure and operation ofcoal mines during World War II, to avert a strike. (34) (35)
The case law finding compensable expropriation of U.S.-citizen property for use by the military stretches well back to the nineteenth century. See, e.g., United States v. Pacific Railroad , 120 U.S.227, 234 (1887) (noting that "where property of loyal citizens is taken for the service of our armies,"compensation is required); United States v. Russell , 80 U.S. (13 Wall.) 623, 629 (1871)(compensation required where Union Army requisitioned three steamboats to carry freight duringCivil War); Mitchell v. Harmony , 54 U.S. (13 How.) 115 (1852) (compensation required whereArmy took for use the wagons and mules of a merchant who had been forced to follow it intoMexican territory). Discussing Russell and Mitchell , a later court isolated the distinctionbetweencompensable and noncompensable military actions - the former, it said, did not involve "impendingdanger in the context of a hostile confrontation .... Instead, the property ... was requisitioned in amanner much akin to the procurement of goods and services under contract ...." YMCA v. UnitedStates , 396 F.2d 467, 471 (Ct. Cl. 1968), affirmed , 394 U.S. 85 (1969). (36)
Destruction of property in connection with actual battle
Nearer the thick of battle, even the deliberate destruction of private property by the military is usually noncompensable. A well-settled rule is that the wartime destruction of private property bythe United States to prevent its capture by an advancing enemy is not a taking. United States v.Caltex , 344 U.S. 149 (1952) (Army destruction of oil terminals in Philippines during World War IIto impede advance of Japanese Army); United States v. Pacific Railroad , 120 U.S. 227, 234 (1887)(Union Army destruction of bridges in Missouri during Civil War to impede advance of ConfederateArmy). See also Juragua Iron Co. v. United States , 212 U.S. 297 (1909) (Army destructionof U.S.company's property in enemy territory during Spanish-American War, to prevent spread of yellowfever, is not a taking; all property in enemy territory is enemy property, subject to confiscationwithout compensation). 
Least surprising, property damage due to battlefield operations is noncompensable. "The destruction or injury of private property in battle, or in the bombardment of cities and towns, and inmany other ways in the war, had to be borne by the sufferers alone as one of the consequences." Caltex , 344 U.S. at 153, quoting Pacific Railroad , 120 U.S. at 234. The noncompensabilityof bothdamage from battlefield operations and destruction to avoid enemy capture is a legal first cousin ofthe common law's recognition that "in times of imminent peril - such as when fire threatened awhole community - the sovereign could, with immunity, destroy the property of a few that theproperty of many and the lives of many more could be saved." Caltex , 344 U.S. at 154.