Full opinion text
OPINION KEVIN THOMAS DUFFY, District Judge: This is another opinion which addresses difficult issues in what has become known as the Iranian assets litigation. It is with a somewhat heavy heart that I undertake to render this decision not only because I find my views are quite different from those of some of my most respected and learned brethren, but more importantly, as an individual, I would prefer to see this sorry chapter of the history of our country finally closed. My duties as a judicial officer, however, compel me to face the difficult issues presented here devoid of such personal considerations. I am asked to decide whether the President was acting within his constitutional and statutory powers when he entered into an agreement with Iran and issued executive orders in order to effect the release of the American hostages. The agreement and the executive orders require the termination or suspension of claims against Iran and its instrumentalities, presentation of those claims to an international claims tribunal, and the nullification of orders of attachment imposed on Iranian assets in the United States. The Court of Appeals for this Circuit has directed me to select one of the pending cases and “to join the United States as a party in [that] single case in which the issues raised by the Iranian Agreement and the Presidential Orders are squarely presented and to proceed with confirmation hearings in that case alone.” New England Merchants National Bank v. Iran, 646 F.2d 779, 784 (2d Cir. 1981) and related cases. I will refer to the difficulties encountered in the selection of that single case later and only to the extent necessary to indicate some of the processes whereby the selection was made. At this point, suffice it to say, that this case was selected as the one which “squarely presented” the issues for which this litigation was remanded. This case is somewhat different from those which have been considered by courts in other circuits. See, e. g., Charles T. Main International, Inc. v. United States, 651 F.2d 800 (1st Cir. 1981); American International Group, Inc. v. Islamic Republic of Iran, 657 F.2d 430 (D.C.Cir.1981); Security Pacific National Bank v. The Government and State of Iran, 513 F.Supp. 864 (C.D.Cal.1981); Unidyne Corporation v. Government or Iran, 512 F.Supp. 705 (E.D.Va.1981). Each of these cases involved services to be performed in Iran. This case, however, involves a contract whereby the plaintiff, a corporation formed in the United States, rendered advertising services solely in the United States, the object of which services was to obtain a larger share of the relevant United States market for the defendants by enticing United States citizens and others present in the United States to patronize defendant Iran Airlines. This was purely a commercial transaction wholly within the territory of the United States. The attachment obtained by Marschalk was issued by a United States court and levied upon property located in the United States. The attachment was specifically permitted by United States government license. While this fact pattern puts the issues at bar in much sharper focus than those of the other decided Iranian asset cases, the issues of law here are nonetheless identical to those in the other cases. The plaintiff argues that the President did not have the authority under the Constitution or any statute to terminate or suspend claims or nullify orders of attachment; furthermore, plaintiff contends that the President’s actions constitute a taking of private property for a public purpose without just compensation. The defendants and government’s position is that the President was acting within the aggregate of his foreign affairs powers under the Constitution and his powers under the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. (Supp. Ill 1979) [“IEEPA”] and that no compensable taking occurred. Background On Sunday, November 4, 1979, some 400 Iranians seized the American Embassy in Teheran, Iran, taking fifty-two American diplomats and other personnel hostage. Support from the mobs nearby, the religious leaders and the Government of Iran escalated a three-day sit-in to an international crisis which would last 444 days. In response to this crisis and the Iranian threat to withdraw all of its deposits from the United States, President Carter issued Executive Order No. 12,170, 44 Fed.Reg. 67,729 (1979). The order froze all Iranian property within the United States and any interests in such property. The order also directed the Secretary of the Treasury to take the necessary measures to carry out the provisions of the order. The Secretary promptly promulgated regulations, 31 C.F.R. Part 535, authorizing the maintenance of law suits against Iran, 31 C.F.R. § 535.504(a) (1979), and the imposition of attachments on Iranian property located within the United States, 31 C.F.R. § 535.418 (1979). The events in Iran and the Secretary’s regulations opened the litigation floodgates; law suits poured into this and other circuits seeking monetary damages for alleged civil wrongs ranging from the nationalization of private property to the repudiation of executory contracts. By September of 1980, 96 civil actions were pending in this district alone. The damages claimed in these actions amounted to many billions of dollars. In most of the suits in this court, the plaintiffs obtained ex parte orders of attachment pursuant to New York’s attachment statute, N.Y.Civ.Prac.Law & R. [“C.P.L.R.”] §§ 6201, et seq. (McKinney). Under New York law, an ex parte attachment order must be confirmed by the court after due notice has been given to the defendants. Plaintiffs’ motions for confirmation of the attachments in the 96 cases before this court were opposed by the Iranian defendants who claimed that their assets were immune from pre-judgment attachment under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602, et seq. (1976) [“FSIA”], and the Treaty of Amity, Economic Relations and Consular Rights, Aug. 15, 1955, United States-Iran, 8 U.S.T. 899 [“Treaty of Amity”] between the United States and Iran. The 96 cases were referred to me to resolve the sovereign immunity and other common legal issues. In an Opinion and Order issued on September 26, 1980, I ruled that, while Iran had not expressly waived its immunity from pre-judgment attachment as set out in the FSIA, Iran’s sovereign immunity was unequivocally suspended when the President issued Executive Order No. 12,170, 44 Fed. Reg. 67729 (1979), freezing Iran’s assets located in the United States. New England Merchants National Bank v. Iran Power Generation and Transmission Co., 502 F.Supp. 120 (S.D.N.Y.1980). I referred the cases back to the district court judges to determine whether the prerequisites of New York’s attachment law had been satisfied. At this juncture, the parties to the 96 law suits sought certification to the Court of Appeals of a number of questions regarding the validity of the attachments. 28 U.S.C. 1292(b). In view of the controversial nature of some of the questions and the fact that immediate appeal of my decisions might have materially advanced the termination of the litigation, I certified certain questions to the Court of Appeals. New England Merchants National Bank v. Iran Power Generation and Transmission Company, 508 F.Supp. 49 (S.D.N.Y.1980). On January 5, 1981, the Court of Appeals accepted the interlocutory review of the certified questions, scheduled argument, and stayed all proceedings in the district court pending its decision. Precisely two weeks later, on January 19, 1981, President Carter finalized an agreement with Iran to secure the release of the American hostages [the “Agreement”]. Under the Agreement, President Carter promised to “terminate all legal proceedings in the United States involving claims of United States persons and institutions against Iran” and to “nullify all attachments and judgments” obtained in such proceedings. To implement the Agreement, President Carter issued Executive Orders Nos. 12,276 through 12,285. 46 Fed.Reg. 7913-32 (1981). These orders, inter alia, revoked the license permitting attachment of the frozen assets, nullified the attachments acquired under the license, and required that the Iranian funds and securities be transferred out of the United States in accordance with the Agreement. On February 24, 1981, President Reagan ratified the Agreement and issued Executive Order No. 12,294, 46 Fed.Reg. 14,111 (1981), “suspending” all claims which were eligible for resolution by the Iran-United States Claims Tribunal [the “Tribunal”]. The order also provided, however, that a decision on the merits by the Tribunal would be “final” and require termination of proceedings in the United States courts. In light of these events, the Court of Appeals determined that the certified questions had been supplanted by a single, overriding question: “Were the actions of the President in suspending the law suits and nullifying the attachments consistent with constitutional power and any applicable statutory authority?” New England Merchants National Bank v. Iran, supra, 646 F.2d at 783. Since the issues had not been presented or decided in the district court nor briefed on appeal, the Court of Appeals declined to rule on the validity of the Agreement or the orders. Accordingly, the Court of Appeals remanded the cases to me with instructions. Id. at 784. Since the 96 cases were remanded to me, I have carefully analyzed each of them in an attempt to select the most appropriate case. After two hearings and many conferences, it became clear that the 96 cases before this court are a mixed bag. Since the Agreement was signed, some of the claimants have been paid the full amount claimed in their complaints; others have reached private settlement agreements with the Iranian defendants. Arbitration clauses or agreements to litigate in the Iranian courts render certain cases inappropriate for expeditious disposition of the issues raised by the Iranian Agreement or presidential orders. Still others do not believe their claims fall within the Agreement or cannot satisfy the jurisdictional requirements of the FSIA. Finally, a number of the claimants do not challenge the constitutionality of the Agreement or orders; instead, they assert merely a right to compensation in the event any judgment in their favor rendered by the Tribunal is not fully satisfied by the claims fund established by the Agreement. Some plaintiffs do not wish to press their claims in the apparent hope and expectation of renewing their commercial ventures with Iran. Thus, after reviewing all the cases on remand individually, I have been constrained to dismiss some actions, to vacate the attachments in others for lack of a showing of continuing need for the levy, and to place the great bulk of this litigation on the suspense docket of this Court. The case that most clearly satisfies the criteria set forth by the Court of Appeals belongs to the Marschalk Company, Inc. Accordingly, the government’s motion to intervene in the case is granted and I will analyze the validity of the Agreement and the executive orders within the context of the Marschalk case. The Parties The Marschalk Company, Inc. [“Marschalk”] is an advertising company incorporated under the laws of New York to plan, create, write and place advertisements for its clients. Its principal place of business is at 1345 Avenue of the Americas, New York, New York. Defendant Iran National Airlines Corp. [“Iran Air”] is a corporation organized under laws of the Government of Iran. Its principal place of business is Mehrabad Airport, Iran Air Head Office Building, Teheran, Iran. Iran Air is licensed to do business and is doing business in this jurisdiction. It has an office in New York City located at 345 Park Avenue. Iran Air’s only point of arrival and departure in the United States is New York. Defendant Government of Iran [“Iran”] is a foreign sovereign state. Marschalk’s Claim and Attachment Iran, acting through Iran Air, entered into an advertising agreement with Marschalk effective August 15, 1978. Under the agreement, Marschalk was designated as Iran Air’s advertising agent in the United States. In general, Marschalk promised to provide Iran Air with all the services usually rendered by advertising agencies for one year following the date of the contract and thereafter until termination by Iran Air or Marschalk on three months’ notice. As Marschalk created advertising and placed it in various print media, it invoiced the defendants for its costs and a commission based on the rates charged to Marschalk by the publishers with whom Iran Air advertisements were placed. The invoices were payable on or before the due date specified on the invoice. Marschalk alleges that it performed its obligations under the contract and submitted a number of invoices to Iran Air seeking payment of Marschalk’s costs and commissions for work already completed in connection with the contract. These invoices evidently were paid when due for several months. After the Government of Iran changed hands in January, 1979, however, several payments were missed. By November 30, 1979, Marschalk had invoiced Iran Air for $46,528.02. According to Marschalk, no part of this sum has been paid by Iran Air or the Government of Iran. The defendants did not protest the invoices and, in fact, by their silence must be deemed to have acquiesced to the validity of the invoices and the amounts therein. As further evidence of the claimed breach of contract, Marschalk points to certain events in Iran, which it claims constituted a repudiation of the Marschalk contract and other contracts with American companies. Marschalk notes first that the present government in Iran began to withdraw its assets from American banks. N. Y. Times, Nov. 16, 1979, at 16, col. 6 and 19, col. 1. Marschalk also cites the November 23, 1979 declaration by the then Iranian Foreign Minister Abolhassan Bani-Sadr that all foreign debts incurred by the Imperial Government were repudiated. Marschalk, therefore, filed suit on December 28, 1979, seeking a judgment against the defendants in the amount of $46,528.02 with interests and costs. On December 31, 1979, this court granted Marschalk an ex parte order of attachment against Iran Air and Iran. Plaintiff levied upon properties of defendants by serving the order of attachment on January 2, 1980 on several banks holding assets of the defendants. Marschalk moved to confirm its attachment in accordance with New York law on January 7, 1980. That motion is now ripe for decision. The defendants and the United States oppose Marschalk’s motion on the grounds that in accordance with the Iranian Agreement and Executive Orders (i) all legal proceedings regarding Marschalk’s claim are suspended; (ii) the claim must be presented to the Tribunal for adjudication; and (iii) Marschalk’s attachment is nullified. Marschalk argues that the actions taken by the President were not authorized by the Constitution or the laws of the United States. Marschalk alternatively argues that if the President’s actions were proper, they constitute a compensable taking under the fifth amendment to the Constitution. All agree, however, that the President’s power, if any, to enter an agreement with Iran and issue executive orders thereunder must stem either from an act of Congress or from the Constitution itself. See Youngstown Sheet and Tube Co. v. Sawyer, 343 U.S. 579, 585, 72 S.Ct. 863, 865, 96 L.Ed. 1153 (1952). Perhaps the best framework for this Court’s analysis of the President’s actions is that provided in the celebrated concurrence of Justice Jackson in Youngstown. Id. at 634, 72 S.Ct. at 888. In considering President Truman’s power to seize the nation’s steel mills to prevent a threatened strike during the Korean War, Justice Jackson wrote: The actual art of governing under our Constitution does not and cannot conform to judicial definitions of the power of any of its branches based on isolated clauses or even single Articles tom from context. While the Constitution diffuses power the better to secure liberty, it also contemplates that practice will integrate the dispersed powers into a workable government. It enjoins upon its branches separateness but interdependence, autonomy but reciprocity. Presidential powers are not fixed but fluctuate, depending on their disjunction or conjunction with those of Congress. We. may well begin by a somewhat oversimplified grouping of practical situations in which a President may doubt, or others may challenge, his powers, and by distinguishing roughly the legal consequences of this factor of relativity. 1. When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate. In these circumstances, and in these only, may he be said (for what it may be worth), to personify the federal sovereignty. If his act is held unconstitutional under these circumstances, it usually means that the Federal Government as an undivided whole lacks power.. . . 2. When the President acts in absence of either a congressional grant or denial of authority, he can only rely upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain. Therefore, congressional inertia, indifference or quiescence may sometimes, at least as a practical matter, enable, if not invite, measures on independent presidential responsibility. In this area, any actual test of power is likely to depend on the imperatives of events and contemporary imponderables rather than on abstract theories of law. 3. When the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter. Courts can sustain exclusive Presidential control in such a case only by disabling the Congress from acting upon the subject. Presidential claim to power at once so conclusive and preclusive must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system. Id. at 635-38, 72 S.Ct. at 870-71 (footnotes omitted). I. Suspension of Legal Proceedings in United States Courts A. Presidential Authority Under IEEPA 1. Express Authority Under IEEPA The defendants and the government argue first that Congress, under IEEPA, authorizes the President to terminate the legal proceedings involving Marschalk’s claim against Iran Air. Thus, they contend, the actions of the President in the case at bar fit into the first category set forth in Justice Jackson’s opinion. Particular reliance is placed on the President’s power under IEEPA when faced with a national emergency to regulate, nullify, prevent or prohibit the acquisition or exercise of any rights by any person within the jurisdiction of the United States with respect to property located within the United States in which a foreign country or national has an interest. 50 U.S.C. § 1702(a)(1)(B) (Supp. Ill 1979). The government and the defendants argue that Marschalk’s claim against Iran in American courts represents an attempt to acquire or to exercise a right with respect to Iranian property situated in the United States, and thus, under IEEPA, such claims may be extinguished. No precedent for such a construction is offered. The characterization of Marschalk’s claim as an acquisition or exercise of a right related to Iranian property in the United States is a vain endeavor by the government and the defendants to fit Marschalk’s claim into one of IEEPA’s pigeonholes which would render it amenable to regulation by the President. Accord, American International Group, Inc., supra, 657 F.2d 430 at 443 n.15; Chas. T. Main International, Inc., supra, 651 F.2d 800 at 809 n.13. Putting aside the question of attachment, see discussion at p. 94, infra, and considering merely the suspension of the claim, Marschalk, in fact, is not seeking by its claim to acquire or exercise a right with respect to any particular Iranian property located within the United States. Instead, Marschalk seeks only to establish in the appropriate court of law its rights to payment for services rendered to the defendants under an advertising contract and to obtain a judgment, irrespective of what Iranian property located here or anywhere else in the world is used to satisfy the judgment. Marschalk’s claim also is not subject to regulation because it is not the type of “property” that Congress intended the President to regulate under IEEPA. Although Marschalk’s claim and its contract rights are property interests protected by the fifth amendment of the United States Constitution [“Fifth Amendment”], it is clear from the legislative history that the types of property over which the President has power under IEEPA include only securities, currencies and other tangible properties situated in the United States. H.R. Rep.No.95-459, 95th Cong. 1st Sess. 15 (1977) [“IEEPA H.Rep.”]. Furthermore, the President is precluded from regulating Marschalk’s claim under IEEPA because the Iranians do not have a property interest in Marschalk’s claim. The government admits that the only party which has a property interest in Marschalk’s claim or in Marschalk’s contract rights is Marschalk. See Transcript at 57-59, The Marschalk Company, Inc. v. Iran Airlines Corp., et al., (S.D.N.Y. June 5, 1981). The Iranians do not have any cognizable property interests in Marschalk’s claim or contract rights. They have only an interest in defending against Marschalk’s claim, but that interest is not property. The defendants’ rights under the contract are separate from Marschalk’s and allegedly have been satisfied by Marschalk’s complete performance under the contract. Thus, even if claims and contract rights in which a foreign party has an interest do constitute property under IEEPA, Iran has no property interest in Marschalk’s claims and contract rights and, therefore, the President cannot exercise his IEEPA powers over them. It may be argued that execution in this country on a judgment obtained in this case could be a “transfer” within IEEPA but that cannot be the basis for terminating the litigation. To do so is to ignore the fact that most judgments are not executed upon; the impact of the judgment — psychological, moral and political — often renders such execution unnecessary. It follows, therefore, that the Agreement terminating the litigation of this claim and transferring it to the Tribunal exceeds the President’s power under the express language of IEE-PA. 2. Implied Authority Under IEEPA— The Legislative History Moreover, the sweeping powers which the executive department would read into the IEEPA find no support in the legislative history of that Act. Congress intended to define and reduce the power of the President by the passage of the Act, not to expand it. A review of the legislative history also makes clear that Congress did not merely fail to authorize the President under IEE-PA to take United States’ citizens claims and transfer them to another tribunal; it acted affirmatively to prevent such action by the President. IEEPA was enacted in 1977 as part of “Trading With the Enemy Act Reform Legislation.” The Trading With the Enemy Act of 1917, 50 U.S.C.App. §§ 1 et seq. (1976) [“TWEA”]. TWEA had authorized the President to take certain extraordinary measures, such as seizing and vesting foreign property, in times of war and peace. Deeply concerned that TWEA had “become essentially an unlimited grant of authority for the President to exercise at his discretion, broad powers in both the domestic and international economic arena.” Congress limited TWEA’s broad grant of authority to times of declared war. IEEPA H.Rep. at 2, 7, 10. Congress agreed with the constitutional scholars that the “TWEA is a prime example of the unchecked proliferation of Presidential power for purposes totally unforeseen by the creators of that power.” Id. at 9. IEEPA limited the President’s peace-time emergency powers to the “the regulation of international economic transactions.” Id. at 10-11. The President does not have the power under IEEPA, as he did under TWEA, to seize foreign property or records or to take title to any property of any foreign country or national thereof for the benefit of the United States. Id. at 2; House Markup Before The Committee on International Relations, 95th Cong., 1st Sess. 3 — 4 (1977). Nor does the President have the power to regulate purely domestic transactions or authority to control non-economic aspects of international intercourse. IEEPA H.Rep. at 11. In the case of Marschalk, the President contravened the prohibitions on his power under IEEPA in at least three ways. First, the Agreement and the Executive Orders attempt to interfere with a purely domestic economic transaction between Marschalk and Iran Air. Marschalk, a United States company, agreed to and did render advertising services solely within the United States to an airline which is doing business in the United States. The purpose of the advertising was to convince United States’ residents to patronize the airline. Bills were sent to Iran Air’s office in New York City and payments made from Iran Air’s account with a New York bank. The fact that a foreign corporation paid for and benefited from the services does not transform the nature of the transaction and the services performed thereunder from domestic to international. A similar conclusion was drawn by the Supreme Court in the Youngstown case. There, domestically produced steel was needed for United States military efforts in the Korean War. Despite the relationship between the steel production and our foreign affairs, the Supreme Court held that the President could not interfere with the domestic operation of the steel mills to ensure sufficient steel was produced for the Korean effort. Youngstown, 343 U.S. at 589, 72 S.Ct. at 867. Second, the President, by the Agreement and the Executive Orders, is endeavoring to control non-economic aspects of international intercourse. In the instant case, the plaintiff and the defendants were no longer transacting business with one another; the negotiation stage was long past, the plaintiff’s obligations under the contract allegedly satisfied. Instead, the parties were adjudicating the rights of Marschalk arising out of an economic transaction which transpired long before the President entered into the Agreement and issued the Orders. Finally, the termination of Marschalk’s claim and transferral of the claim to the Tribunal constitute a seizure of property belonging to a United States citizen. Although the President did not have the authority to seize or vest property of United States citizens even under TWEA, the government would have this court infer from the language of IEEPA that the President now has such authority. As I have already discussed, such a construction is impossible because Marschalk’s claim is not an attempt to acquire or exercise a right in Iranian property, is not property within the meaning of IEEPA, and is not property in which Iran has an interest. The mandate against vesting or seizure of the property of foreign governments and nationals thereof only further supports the conclusion that the President could not under IEEPA take Marsehalk’s claim. Surely, if the President is prohibited from seizing property of the country whose actions instigated the crisis, Congress did not intend that the property of United States’ claimants could be seized and used at the President’s sole discretion as ransom. The legislative history of IEEPA also indicates that Congress intended that the President, in responding to emergencies would protect, not prejudice, the ability of United States citizens to recover claims against foreign countries. IEEPA H.Rep. at 17. Private claimants are not barred by the language or history of IEEPA from bringing suit against a foreign defendant during a state of emergency declared by the President, nor were they barred from doing so under TWEA, IEEPA’s predecessor. Zittman v. McGrath, 341 U.S. 446, 71 S.Ct. 832, 95 L.Ed. 1096 (1951); Vishipco Line v. Chase Manhattan Bank, N. A., 77 Civ. 1251 (S.D.N.Y. Nov. 3, 1978). In addition, the legislative history of the portion of TWEA which is now § 1702(a)(1)(B) of IEEPA reveals that two of the “chief objectives” of TWEA were (i) prevent hostile nations from benefiting from trade with American citizens; and (ii) utilization of enemy property within the United States, inter alia, to satisfy the claims of United States citizens. H.R.Rep.No.85, 65th Cong., 1st Sess. 1 and 4 (1917) [“TWEA” H.Rep.]. Extinguishing Marschalk’s claim is inconsistent with both purposes. 3. Conflict Between President’s Actions and an Act of Congress a. Limits on President’s Power under FSIA The suspension by the President of litigation of Marschalk’s claim in the United States courts is not only unauthorized by IEEPA, it is prohibited by the FSIA. Thus, it cannot be argued that the President’s actions fall within the “twilight zone” described in Justice Jackson’s second category. Rather than acquiescing to Presidential interference in the litigation of commercial claims against foreign defendants, Congress, in enacting FSIA in 1976, eliminated such Executive interference. Congress also specifically refused to give the President the power to enter into agreements with other nations which would circumscribe the jurisdiction of the United States courts over international commercial claims under the FSIA. The government argues that “certainly the Executive Branch when it proposed and supported the FSIA, did not believe it was giving up the President’s traditional claims settlement authority.” Brief for Government at 23 n.****. This argument is included in a footnote perhaps because the government cannot suggest any other reason for the statute than the obvious, i. e., that the settlement of commercial claims (such as involved here) was to be relegated to the courts without interference from the executive. The sorry history of giving untrammeled power to the executive in such situations certainly gave great impetus to the passage of the FSIA. This is well supported by the legislative history of the FSIA. Prior to the FSIA, jurisdiction of actions brought by United States citizens against foreign states was provided solely in 28 U.S.C. § 1332(a) (1976). Such actions, however, could be terminated by the State Department by filing a “suggestion of immunity” to which courts would normally “defer.” See, e. g., Rich v. Naviera Vacuba, S. A., 197 F.Supp. 710 (E.D.Va.), aff'd, 295 F.2d 24 (4th Cir. 1961). Thus, a foreign state that did not wish to be sued in the United States courts would typically request that the State Department file a suggestion of immunity. S.Rep.No.94 — 1310, 94th Cong., 2d Sess. 9 (1976) [“FSIA S.Rep.”]. A principal purpose behind the FSIA was to transfer the determination of sovereign immunity from the executive branch to the judicial in order to assure litigants that immunity decisions are made on purely legal grounds, under procedures that insure due process, rather than on foreign policy grounds. Id. Under the FSIA, a federal or state court has jurisdiction of a commercial claim against a foreign state so long as the claim has specified “minimum jurisdictional contacts” with the United States. 28 Ú.S.C. § 1330, 1605(a)(2) (1976). Judge Werker of this court, in granting Marschalk an attachment, implicitly found that FSIA jurisdiction exists in this case. Indeed, as earlier stated, the great weight of “contacts” in this case is wholly within the United States. The legislative history of the FSIA provides a clear record of Congress’ decision to eliminate all executive branch interference with the jurisdiction of United States courts of commercial claims of United States citizens against foreign defendants. The history states that FSIA was intended to “set forth the sole and exclusive standards to be used in resolving questions of sovereign immunity,” to “preempt” all inconsistent federal law and to commit sovereign immunity decisions exclusively to the courts. H.R.Rep.No.94-1487, 94th Cong., 2d Sess. 12 (1976), U.S.Code Cong. & Admin.News 1976, pp. 6604, 6610 [“FSIA H.Rep.”]. Furthermore, Congress refused to adopt provisions allowing the President to determine the jurisdiction of the courts in times of emergency. At the hearings in the House of Representatives, Congress was asked to weigh the advantages and disadvantages of allowing the President to interfere with court proceedings as the need arose during international emergencies. Hearings on H.R. 11,315 before the Sub-comm. on Administrative Law and Government Relations of the House Comm, on the Judiciary, 94th Cong., 2d Sess. 34 (1976) [“FSIA H.Hearings”]. A proponent of executive interference power argued that such power was necessary to give the President “flexibility” in international affairs particularly in times of emergency. He cited the deal struck with Cuba by the State Department whereby a suggestion of immunity was traded for a hijacked United States airliner. Id. at 61-65. Congress, however, rejected this proposal and instead, determined that sovereign immunity decisions are to be made “exclusively by the courts and not by a foreign affairs agency.” FSIA H.Rep. at 7, p. 6606. The original version of the FSIA proposed by the State and Justice Departments sought to allow executive interference with court jurisdiction through executive agreements. The proposed bill provided that the FSIA would be “subject to existing and future international agreements.” H.R. 11315, 94th Cong., 2d Sess. § 1604 (1976) [“FSIA H.Bill”] (emphasis added). The reference to “future international agreements” was deleted in committee, “to eliminate any possible question that this language might be construed to authorize a future international agreement” that might interfere with court jurisdiction. FSIA H.Rep. at 10, 6608. The committee wished to eliminate any possible “discretion to the State Department ... to change the basic substance ,of the law.” FSIA H.Hearings at 52. I recognize that others have analyzed this question by positing as an axiom the President’s “broad powers” to conduct foreign affairs which were not mentioned in the FSIA and concluded that the settlement of private commercial claims of United States citizens against foreign governments and their instrumentalities by international executive agreement is still within the foreign affairs power of the President. See, e. g., Security Pacific National Bank v. The Government and State of Iran, 513 F.Supp. 864 (C.D.Cal.1981). This ignores the stated intent of the Congress in passing the FSIA to curtail the “broad powers” of the executive in dealing with foreign governments. It would be totally incongruous if Congress took away from the executive the power to dispose of certain lawsuits against foreign governments by “suggestions of immunity” and yet intended to permit the same result by international executive agreements. Finally, nothing in the language or in the legislative history of IEEPA indicates that Congress intended to grant an “emergency” exception to the clear rule under the FSIA that the executive branch may not interfere with the jurisdiction of the United States courts over commercial claims against foreign defendants. Lacking an express authorization by Congress, the President may not interfere with domestic litigation in the courts of this country. White v. Mechanics Securities Corp., 269 U.S. 283, 301, 46 S.Ct. 116, 118, 70 L.Ed. 275 (1925). b. Suspension v. Termination The government also argues that the President has not interfered with the jurisdiction of the courts under the FSIA because the President has only “suspended” the claims until final disposition by the Tribunal, not terminated them. Lawsuits against Iran may continue to be initiated- in any appropriate district court and the Executive Order does not affect claims of litigants whose claims do not fall within the jurisdiction of the Tribunal. Whether the executive department is attempting to “terminate” lawsuits such as this or merely “suspend” them is unclear. Compare Agreement with Executive Order No. 12,294, 46 Fed.Reg. 14,111 (1981). To my mind, there is no practical difference. The Agreement provided that the United States was “to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and state enterprises, to nullify all attachments and judgments obtained therein, to prohibit all further litigation based on such claims, and to bring about the termination of such claims through binding arbitration.” Declaration of the Government of the Democratic and Popular Republic of Algeria at 1, ¶ B (1981) (emphasis added). By Executive Order No. 12,294, supra, the President “suspended” “[a]ll claims which may be presented to the Iran-United States Claims Tribunal under the terms of Article II of the Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims .... During the period of this suspension, all such claims shall have no legal effect in any action now pending in any court of the United States . . .. ” 46 Fed.Reg. No. 14,111 (1981) (emphasis added). Whether the executive is attempting to foreclose United States citizens from access to United States courts to vindicate rights obtained by contract wholly performed within the United States, such as in the case at bar, by “termination” or “suspension,” the intent is the same. While it may be that “suspending” the claims without limit is more acceptable in a public relations sense than “terminating” or “nullifying” the claims, the result in either case is to prevent claimants from asserting their rights in federal court. I must deal with this reality rather than niceties of language. “A rose by any other name . . . . ” Shakespeare, Romeo and Juliet, Act II, Scene 2, Lines 41 — 42. In view of the fact that Marschalk’s claim fits within the jurisdiction of the Tribunal and that a determination by the Tribunal will be final for all purposes, I must conclude that the jurisdiction of the United States courts over the claim has been withdrawn by the President. The Court of Appeals for the District of Columbia distinguishes between the suspension of a claim and the suspension of the litigation of a claim before a United States court. American International Group, Inc. v. Islamic Republic of Iran, supra, 657 F.2d at 442—43. The court finds in the Iranian cases that the President suspended the claims and did not order the litigation or the power of the court to consider the claims suspended. The court apparently concedes that the suspension of litigation would be a transgression of the jurisdiction of the courts but believes that a suspension of a claim is not. The court views the suspension of a claim “as an effort to modify not the jurisdiction of the courts, but the substantive rule of law they are to apply.” The court concludes by saying that if the suspension was constitutional, then the executive order must be applied on appeal under the rule of United States v. The Schooner Peggy, 5 U.S. (1 Cranch) 103, 2 L.Ed. 49 (1801) (new law must be applied on appeal even if it is contrary to old law). I am somewhat at a loss to understand much of the reasoning of the Court of Appeals for the District of Columbia Circuit. For instance, the court suggests that “[ajfter the arbitration has run its course, and if the judicial process resumes, appellants [i. e. Iran] will be able to contest the summary judgment award.” American International Group, Inc., supra, 657 F.2d at 448. If, as the court suggests, after the arbitration by the Tribunal, the United States court is to restart the proceeding before it, what is that district court supposed to do? The decision of the Tribunal is supposedly “final.” Is the district court to act as an appellate court reviewing what the Tribunal would have done? Is the Tribunal empowered to ignore the judgment of the district court? I would suggest that the approach taken by the District of Columbia Circuit Court in their decision raises far more problems than it resolves. Furthermore, the claims themselves have not been suspended entirely; they still exist for purposes of the Tribunal. The legal proceedings properly before the United States courts, however, have been suspended in effect permanently. In brief, I cannot agree with the Court of Appeals for the District of Columbia that the suspension of the legal proceedings before United States’ courts does not circumvent the exclusive jurisdiction of the United States courts over commercial claims against foreign defendants. The President has said, in effect, that the Tribunal, not the courts of the United States, shall have jurisdiction over certain plaintiffs’ claims against Iranian defendants. I find that by taking such an action, the President has acted contrary to the will of Congress expressed so clearly in the FSIA. In the absence of a congressional grant of authority to suspend the litigation of the claims and in view of the incompatibility of the measures taken by the President with the expressed will of Congress that the President not limit the court’s jurisdiction over international commercial claims via international agreement, the President can only rely upon his own constitutional powers minus any constitutional powers of Congress over the matter. See Youngstown, 343 U.S. at 637, 72 S.Ct. at 871 (Jackson, J., concurring). In this situation, the President’s power is “at its lowest ebb” and the assertion of such power “must be scrutinized with caution . . . . ” Id. B. The President’s Article II Authority to Conduct Foreign Affairs The fact that steps had to be taken to secure the release of the hostages does not mean that the President suddenly has the constitutional authority to divest the courts of jurisdiction and deny United States citizens access to United States courts. As Justice Douglas stated in his concurring opinion in Youngstown, “the emergency did not create power, it merely marked an occasion when power should be exercised.” 343 U.S. at 629, 72 S.Ct. at 886. It is true that the President as an individual can act more quickly than the Congress. Legislative action, by contrast, can be time-consuming and inefficient. But as Mr. Justice Brandeis stated in his dissent in Myers v. United States, 272 U.S. 52, 293, 47 S.Ct. 21, 84, 71 L.Ed. 160 (1926): The doctrine of the separation of powers was adopted by the Convention of 1787, not to promote efficiency but to preclude the exercise of arbitrary power. The purpose was, not to avoid friction, but, by means of the inevitable distribution of the governmental powers among three departments, to save the people from autocracy. As in Youngstown, the issue of whether the President has the constitutional power to take certain actions cannot be decided by determining which branch of the government can resolve a crisis most expeditiously; the answer depends on the allocation of powers under the Constitution. Article II confers certain powers on the President to deal with our relations with other nations. These powers expressly provided in Article II are the ability to conclude treaties and appoint ambassadors, with Senate consent, and to receive ambassadors and other foreign officials. These enumerated powers do not provide authority for the actions taken by the President in this case. If the President had the constitutional authority to enter the Agreement and issue executive orders thereunder, it must be implied from the aggregate of his powers under the Constitution. There is complete agreement that the President has the power to enter executive agreements with other nations but a vast area of disagreement among the parties as to what actions the President may take under such agreements. The government would have this court ascribe to the President almost boundless discretion in the field of foreign affairs. The government finds authority for this proposition in United States v. CurtissWright Export Corp., 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255 (1936). In that case, the Supreme Court recognized that the President’s foreign affairs powers extend beyond those specifically enumerated in the Constitution. The Court found that the President has “the very delicate, plenary and exclusive power as the sole organ of the federal government” in the field of foreign affairs. Id. at 320, 57 S.Ct. at 221. The government’s suggestion, however, that by this statement the President’s power is without limits when he steps into the foreign affairs arena reads far too much into the Curtiss-Wright opinion and ignores later Supreme Court rulings regarding limits on the exercise of presidential power. Curtiss-Wright involved an executive order issued by the President pursuant to a Joint Resolution of Congress. The Resolution provided that if the President found that prohibiting the sale of arms and munitions to countries engaged in armed conflict in the Chaco would help restore peace between those nations and issued a proclamation to that effect, then it would be unlawful to sell arms and munitions to such countries. Id. at 312, 57 S.Ct. at 217. After President Roosevelt issued the necessary proclamation, the Resolution was challenged by the plaintiff as an excessive delegation of legislative power to the President. The Resolution, and consequently the President’s order, were upheld on the grounds that the President had sufficient constitutional authority to prohibit the sale of arms to foreign countries. Although the portions of the opinion regarding the President’s “plenary and exclusive” foreign affairs power have been sharply criticized by constitutional scholars, I need not pause here to address those legitimate concerns. Assuming Justice Sutherland was correct in stating that the President constitutionally had the “plenary and exclusive” authority to order the cessation of arms sales to foreign countries, his opinion does not support the government’s contention here that the President’s foreign affairs powers gives him the authority to issue orders which circumvent an act of Congress and impair constitutional rights of citizens. In Curtiss-Wright, the President was acting pursuant to an express authorization of Congress. His actions, thus, fell within the first of the three categories cited by Justice Jackson in Youngstown where the President’s authority is at its maximum “for it includes all that he possesses in his own right plus all that Congress can delegate.” Youngstown, 343 U.S. at 635, 72 S.Ct. at 870. The situation in Curtiss-Wright is in sharp contrast to that presented in the case at bar. Here, the President’s orders terminating the litigation of Marschalk’s claim against the defendants are totally incompatible with the will of Congress. In effect, he has attempted to circumvent a statute enacted by Congress, the FSIA. His actions, therefore, fall within Justice Jackson’s third category where the President’s “power is at its lowest ebb, for he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter.” Id. at 637, 72 S.Ct. at 871. As Justice Jackson cautions, a Presidential claim to an exclusive power must be closely scrutinized, “for what is at stake is the equilibrium established by our constitutional system.” Id. at 638, 72 S.Ct. at 871. I must, therefore, analyze whether the Executive Agreement and Presidential Orders terminating this litigation do in fact upset “the equilibrium established by our constitutional system” by infringing upon the powers of Congress and the Judiciary. 1. Jurisdiction of This Proceeding is Vested in United States Courts There can be very little doubt that this court has jurisdiction over this case, but rather than leave the matter to any possible conjecture, I will set out the basis for this jurisdiction. The extent of possible jurisdiction which may be vested in federal courts in the United States is found generally in Article III of the Constitution. That Article provides in pertinent part: Section 1. The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office. Section 2. The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority; — to all Cases affecting Ambassadors, other public Ministers and Consuls; —to all Cases of admiralty and maritime Jurisdiction; — to Controversies between two or more States; — between a State and Citizens of another State; — between Citizens of different States, — between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects. While Article III sets out the possible extent of the jurisdiction of our federal courts, our Founding Fathers recognized that the exigencies of growth and other imponderables made it necessary for that jurisdiction to expand and contract as the need arises. Thus, the power to define the actual jurisdiction of the federal courts is expressly committed to Congress. U.S. Const. Art. I § 8, cl. 2; Art. Ill § 1, 2, Cl. 2. It has recently been reiterated that federal court jurisdiction in “every case must be supported by both a Congressional grant of jurisdiction and a constitutional base on which the statute rests.” Verlinden B. V. v. Central Bank of Nigeria, 647 F.2d 320, 324 (2d Cir. 1981). See also the cases cited therein. Such a congressional grant is generally found in the statutes of the United States. See, e. g, 28 U.S.C. § 1332 (1976). It may also be occasionally found in treaties which have been signed on behalf of the United States and which have been ratified by the Senate as required by the Constitution. See, e. g., Treaty of Amity, Economic Relations and Consular Rights, August 15, 1955, United States-Iran, 8 U.S.T. 901 et seq. [“Treaty of Amity”]. In the cases presently before me, the jurisdiction of this court is found in Article III § 2: “The judicial Power shall extend to all Cases, in Law and Equity arising under this Constitution, the Laws of the United States, and Treaties . . .; to controversies . . . between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.” The congressional grant of jurisdiction over the present controversies may be found in sections 1330 & 1332 of Title 28 U.S.C. (which is part of the Foreign Sovereign Immunities Act of 1976) and in the Treaty of Amity. Section 1330 of Title 28 U.S.C. provides in pertinent part: The district courts shall have original jurisdiction ... of any nonjury civil action against a foreign state as defined in section 1603(a) of this title [which would include Iran National Airlines Corp. and the Government of Iran] as to any claim for relief in personam with respect to which the foreign state is not entitled to immunity .... The case at bar falls within one of the general exceptions to jurisdictional immunity of a foreign state provided in FSIA. This ease is “based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere . .. .” 28 U.S.C. § 1605(2). Thus, the defendants are not entitled to immunity from this law suit. Any fair reading of just the above sections of the FSIA would give this court jurisdiction over the instant law suit. The same result flows from the Treaty of Amity. Article III, section 2 of the Treaty of Amity provides: Nationals and companies of either High Contracting Party shall have freedom of access to courts of justice and administrative agencies within the territories of the other High Contracting Party, in all degrees of jurisdiction, both in defense and pursuit of their rights, to the end that prompt and impartial justice be done. Such access shall be allowed, in any event, upon terms no less favorable than those applicable to nationals and companies of such other High Contracting Party or any third country. It is understood that companies not engaged in activities within the country shall enjoy the right of such access without any requirement of registration or domestication. 8 U.S.T. at p. 902. Article XI, section 4 of the same Treaty provides: No enterprise of either High Contracting Party, including corporations, associations, and government agencies and instrumentalities, which is publicly owned or controlled shall, if it engages in commercial, industrial, shipping or other business activities within the territories of the other High Contracting Party, claim or enjoy, either for itself or for its property, immunity therein from taxation, suit, execution of judgment or other liability to which privately owned and controlled enterprises are subject therein. There can be no doubt that the defendant Iran Air was and is owned and controlled by the defendant the Government of Iran; that this law suit arises from commercial and business activities of Iran Air with the plaintiff Marschalk within the territory of the United States; and that by reason of the sections of the FSIA and the Treaty of Amity quoted above, both defendants are amenable to suit in this court. Even the Government of the United States as Intervenor here admits as much. See Brief for Government at 46 n.*. In the face of this plethora of provisions authorizing jurisdiction in this court over this litigation, the defendants argue that the President can, by invoking his foreign affairs powers, supercede this court in the resolution of this controversy. 2. President’s Power to Suspend Litigation of Claims The government and the defendants contend that the President has the authority to suspend litigation in United' States courts and transfer claims to a tribunal under his “broad and plenary authority to conduct foreign affairs.” They argue that the President’s actions regarding Marschalk’s claim constitute a settlement of the claim and the President’s control of foreign affairs includes the power to settle claims of United States citizens against other nations and their instrumentalities. Even assuming for the moment that the President has the constitutional authority to settle claims, I seriously question that the President actually “settled” the claims of Marschalk and the other plaintiffs under the Agreement with Iran. The term “settlement” implies that the plaintiffs receive something of value in exchange for the termination of adjudicative proceedings in United States courts of their claims. In the instant cases, nothing has been received in exchange for the suspension of litigation in the United States. Instead, Marschalk and the other plaintiffs must still seek satisfaction of their claims. They, however, have lost their rights to litigate in the United States courts and are forced to pursue their claims before an arbitral tribunal located in a foreign country. They also lose the guarantees of due process afforded by the United States courts as well as the right of appeal. Furthermore, if successful on the merits of the Tribunal, the plaintiffs may only receive as little as 20 cents on a dollar since the identified claims of United States citizens against Iran and its instrumentalities exceed by over five times the amount Iran has put in the settlement fund. It has also been suggested that Iran has given up some consideration other than the release of the hostages for the resolution of its various disputes with United States citizens. I fail to see any such consideration. It is urged that Iran has given up the defense of sovereign immunity before the Tribunal. But that is neither a concession nor consideration, because in the case at bar the defense of sovereign immunity is unavailable to Iran under either the FSIA or the Treaty of Amity. Nor can the establishment of a fund by Iran be considered as any consideration. The Agreement would have this country and its citizen-claimants give up the assets subjected to the attachments in return for a minor portion of those very same assets and a mere promise to pay on the part of Iran. In short, it was the hostage crisis that was settled by the Agreement, not Marschalk’s and the other plaintiffs’ claims. There is no settlement of a case where the adjudication of the rights of the parties is merely transferred to another forum. To suggest otherwise, as the First Circuit does in the Chas. T. Main case, supra, at 812, puts the cart before the horse. The claims were but the means used by the United States to purchase the precious freedom of the hostages. I know of no case, other than those arising from the present situation, that holds that the President has the constitutional power to take possession of private property and bargain with it to secure the release of American hostages or for any other foreign policy purpose. It is, however, the government and defendants’ contention that the termination of litigation of Marschalk’s claim and its future transfer to the Tribunal is a “settlement” of the claims under the Agreement. Assuming that the President did effect a settlement of Marschalk’s claim, I turn now to the question of whether he had the constitutional authority to effect such a settlement in order to obtain the release of the hostages. The government and defendants attempt to establish that the President has the constitutional authority to settle claims by citing two cases upholding an executive agreement with Russia. United States v. Pink, 315 U.S. 203, 62 S.Ct. 552, 86 L.Ed. 796 (1942); United States v. Belmont, 301 U.S. 324, 57 S.Ct. 758, 81 L.Ed. 1134 (1937). Neither of these cases, however, holds that the President has the power to settle, by executive agreement, claims of United States citizens against foreign governments by executive agreement. The Belmont case involved an agreement between the President of the United States and the Soviet Government called the Litvinov Agreement. Under the Agreement, the Soviet Union assigned all its claims against American nationals with the understanding that the United States would notify the Soviet Government of all the amounts realized by the United States from such release and assignment. Id. at 326, 57 S.Ct. at 758. The Litvinov Agreement was one part of the larger plan to bring about a settlement of the rival claims of the competing interests in order to establish diplomatic relations between the countries. At issue in Belmont was the right of the United States under the Agreement to recover funds deposited with a New York private banker, Belmont, by a Russian corporation which was nationalized by Russian decree in 1918. The Court upheld the power of the President to enter the Litvinov Agreement with the Soviet Government; it rejected the argument that the action by the United States under the Agreement was barred because the Russian corporation and its United States deposit had been taken by the Soviet Government without compensation. Id. at 332, 57 S.Ct. at 761. The Court properly noted that it could not apply the U