UNITED STATES OF AMERICA, APPELLANT V. SPERRY CORPORATION AND SPERRY WORLD TRADE, INC. No. 88-952 In the Supreme Court of the United States October Term, 1988 On Appeal From The United States Court Of Appeals For The Federal Circuit Jurisdictional Statement TABLE OF CONTENTS Question Presented Opinions below Jurisdiction Constitutional and statutory provisions involved Statement The question is substantial Conclusion Appendix A Appendix B Appendix C Appendix D OPINIONS BELOW The opinion of the court of appeals (App., infra, 1a-11a) is reported at 853 F.2d 904, and the opinion of the United States Claims Court (App., infra, 12a-25a) is reported at 12 Cl. Ct. 736. The prior oral ruling of the Claims Court (App., infra, 26a-51a) is unreported. JURISDICTION The judgment of the court of appeals was entered on August 10, 1988, and the notice of appeal (App., infra, 52a-53a) was filed on September 8, 1988. On November 1, 1988, the Chief Justice extended the time for docketing the appeal to and including December 7, 1988. The jurisdiction of this Court is invoked under 28 U.S.C. 1252. /1/ CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED 1. The Fifth Amendment to the Constitution provides in pertinent part: (N)or shall private property be taken for public use, without just compensation. 2. Section 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Pub. L. No. 99-93, 99 Stat. 438, codified at 50 U.S.C. (Supp. III) 1701 note, provides: (a) DEDUCTION FOR EXPENSES OF THE UNITED STATES. -- Except as provided in section 503, the Federal Reserve Bank of New York shall deduct from the aggregate amount awarded under each enumerated claim before the Iran-United States Claims Tribunal in favor of a United States claimant, an amount equal to 1 1/2 percent of the first $5,000,000 and 1 percent of any amount over $5,000,000, as reimbursement to the United States Government for expenses incurred in connection with the arbitration of claims of United States claimants against Iran before that Tribunal and the maintenance of the Security Account established pursuant to the Declarations of the Democratic and Popular Republic of Algeria of January 19, 1981. The Federal Reserve Bank of New York shall make the deduction required by the preceding sentence whenever the Bank receives an amount from the Security Account in satisfaction of an award rendered by the Iran-United States Claims Tribunal on the enumerated claim involved. (b) DEDUCTION TREATED AS MISCELLANEOUS RECEIPT. -- Amounts deducted by the Federal Reserve Bank of New York pursuant to subsection (a) shall be deposited into the Treasury of the United States to the credit of miscellaneous receipts. (c) PAYMENT TO UNITED STATES CLAIMANTS. -- Nothing in this section shall be construed to affect the payment to United States claimants of amounts received by the Federal Reserve Bank of New York in respect of awards by the Iran-United States Claims Tribunal, after deduction of the amounts calculated in accordance with subsection (a). (d) EFFECTIVE DATE. -- This section shall be effective as of June 7, 1982. QUESTION PRESENTED The Federal Reserve Bank of New York has been designated to receive payment of awards by the Iran-United States Claims Tribunal in favor of United States nationals. Section 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Pub. L. No. 99-93, 99 Stat. 438, requires the Federal Reserve Bank of New York to deduct from any such award 1 1/2% of the first $5 million and 1% of any amount in excess of $5 million, as reimbursement to the United States Government for expenses incurred in connection with the arbitration of claims of United States nationals against Iran and the maintenance of the Security Account out of which meritorious claims are paid. The question presented by this case is: Whether Section 502 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, is unconstitutional on the ground that it effects a taking of the property of a successful United States claimant before the Tribunal, without payment of just compensation. STATEMENT 1. a. Appellees are two corporations organized under the laws of Delaware. During the 1970s, they were parties to various contracts with the Government of Iran and its instrumentalities for the lease of computer systems and the performance of data processing services. In 1974, appellees established a branch office in Tehran, Iran, in order to facilitate the conduct of their business in that country. App., infra, 13a. On November 4, 1979, "the American Embassy in Tehran was seized and our diplomatic personnel were captured and held hostage." Dames & Moore v. Regan, 453 U.S. 654, 662 (1981). Ten days later, in response to the taking of the hostages and a threat by Iran to withdraw its assets from the United States (see 15 Weekly Comp. Pres. Doc. 2117 (Nov. 14, 1979)), the President declared a national emergency pursuant to the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. (1976 ed. (Supp. III 1979)) 1701-1706. The President also issued an Executive Order blocking the removal or transfer of "all property and interests in property of the Government of Iran, its instrumentalities and controlled entities and the Central Bank of Iran which are or become subject to the jurisdiction of the United States." Exec. Order No. 12170, 3 C.F.R. 457 (1980), 50 U.S.C. (1976 ed. Supp. III 1979) 1701 note. See Dames & Moore, 453 U.S. at 662-663. On November 15, 1979, the Department of the Treasury issued implementing regulations declaring "null and void" any attachment or judgment affecting Iranian property that was covered by the blocking order, unless the attachment or judgment was licensed by the Secretary of the Treasury. 31 C.F.R. 535.203(e) (1980). The regulations expressly provided that any such license could be amended, modified, or revoked at any time. 31 C.F.R. 535.805 (1980). On November 26, 1979, the Secretary granted a general license authorizing specific judicial proceedings against Iran. 31 C.F.R. 535.504(a) (1980). A clarifying regulation, issued approximately three weeks later, stated that this license authorized "prejudgment attachments," but not "the entry of any judgment or of any decree or order of similar or analogous effect." 31 C.F.R. 535.418, 535.504(b)(1) (1980). See Dames & Moore, 453 U.S. at 663. Several months after the President blocked Iranian assets in the United States, appellees withdrew all of their non-Iranian personnel from Iran as a result of increasing hostility toward American business interests in that country. /2/ In July 1980, appellees filed suit against Iran and a number of its instrumentalities in the United States District Court for the District of Columbia seeking a total of $18 million in damages for past-due computer rentals, conversion of assets that Iran allegedly had prevented appellees from removing from that country, and interference with business relationships. On October 24, 1980, appellees obtained a pre-judgment attachment of Iranian assets located in the United States. Sperry Corp. v. Islamic Republic of Iran, No. CA-80-1614 (D.D.C. Oct. 24, 1980). b. After these events, the break in diplomatic relations between Iran and the United States, and the loss of American lives in a military operation to rescue the hostages, the United States and Iran entered into an agreement on January 19, 1981. The agreement took the form of the adherence by the two governments to two declarations of the government of Algeria, commonly referred to as the "Algiers Accords." See Declaration of the Government of the Democratic and Popular Republic of Algeria, and Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims by the Government of the United States of America and the Government of the Islamic Republic of Iran, reprinted in 19 Bureau of Public Affairs, U.S. Department of State, Selected Papers 2-5 (Mar. 12, 1981) (C.A. App. A19-A23). In general terms, the Accords provided for the release of the American hostages and for the settlement of claims by the nationals of each party against the government of the other. As relevant here, the Accords stated that a "purpose of both parties" was "to terminate all litigation as between the Government of each party and the nationals of the other, and to bring about the settlement and termination of such claims through binding arbitration" (C.A. App. A21). The United States therefore undertook "to terminate all legal proceedings in United States courts involving claims of United States persons and institutions against Iran and its state enterprises," and "to nullify all attachments of and judgments obtained therein" (ibid.). Dames & Moore, 453 U.S. at 665. The Accords further provided for the establishment at The Hague of an international arbitral tribunal, known as the Iran-United States Claims Tribunal, to hear and render "final and binding" decisions, enforceable in the courts of any nation under its laws, on contract, expropriation and certain other claims against the government of each country by nationals of the other (C.A. App. A22, A23). Any such claims had to be filed with the Tribunal within one year of the entry into force of the Accords or six months of the appointment of the President of the Tribunal, whichever was later (C.A. App. A23). The United States was required to bring about the transfer of all Iranian assets that were held by banks in this country and by United States banks abroad and that previously had been blocked by the President (C.A. App. A21-A22). Of those assets, $1 billion were to be placed in a "Security Account," for the purpose of securing the payment of, and paying, the claims of United States nationals against Iran; and Iran was required to maintain a minimum balance of $500 million in the Security Account until all Tribunal awards against Iran had been paid (C.A. App. A21). See Dames & Moore, 453 U.S. at 664-665. The Accords required each government to designate an agent at The Hague to represent it to the Tribunal and to receive notices or other communications directed to it or its nationals (C.A. App. A23). Finally, the Accords provided that "(t)he expenses of the Tribunal shall be borne equally by the two governments" (ibid.). President Carter issued a series of Executive Orders on January 19, 1981, to implement the Algiers Accords. Those Executive Orders revoked all licenses permitting the exercise of "any right, power, or privilege" with regard to Iranian assets; nullified all non-Iranian interests in such assets acquired after November 14, 1979; and directed persons holding blocked Iranian financial assets to transfer them to the Federal Reserve Bank of New York as fiscal agent of the United States, for disposition as directed by the Secretary of the Treasury. Exec. Order Nos. 12277-12281, 3 C.F.R. 105-113 (1982), 50 U.S.C. 1701 note. On February 24, 1981, a little more than one month after his inauguration, President Reagan issued an Executive Order in which he "ratified" the Executive Orders issued by President Carter on January 19, 1981; "suspended" all "claims which may be presented to the * * * Tribunal"; and provided that such claims "shall have no legal effect in any action now pending in any court of the United States." Exec. Order No. 12294, 3 C.F.R. 139 (1982), 50 U.S.C. 1701 note. The Order provided that a claim would be discharged for all purposes when the Tribunal either awarded some recovery and that amount was paid, or the Tribunal determined that no recovery was due. Ibid.; Dames & Moore, 453 U.S. at 665-666. c. This Court sustained the President's actions in Dames & Moore, which was decided in July 1981. The Court expressly held that the President's revocation of pre-judgment attachments granted pursuant to the Treasury license did not constitute a taking of property because those attachments were revocable and "in every sense subordinate to the President's power under the IEEPA" (453 U.S. at 674 n.6). Following the Court's decision, more than $2 billion in Iranian assets held by banks in the United States were marshalled; $1 billion were deposited in the Security Account, and the remainder was transferred to Iran. Thereafter, appellees filed a claim against Iran with the Tribunal, seeking payment of past-due computer rentals and reimbursement for assets that Iran allegedly had not permitted appellees to remove from that country. App., infra, 3a, 14a. 2. The Federal Reserve Bank of New York is the fiscal agent of the United States in carrying out the Algiers Accords. Under this arrangement, awards made by the Tribunal in favor of United States claimants are paid from the Security Account to the Federal Reserve Bank, which then pays the award to the claimant. App., infra, 13a; 47 Fed. Reg. 25243 (1982). On June 7, 1982, before the Tribunal rendered any awards in favor of United States claimants, the Department of the Treasury issued a "directive license" requiring the Federal Reserve Bank to deduct two percent from each award it received from the Tribunal and to pay that amount into the Treasury "to reimburse the United States Government for costs incurred for the benefit of U.S. nationals who have claims against Iran." 47 Fed. Reg. 25243 (1982). The directive was issued pursuant to the Independent Offices Appropriations Act (IOAA), now codified at 31 U.S.C. 9701, which authorizes each federal agency to promulgate regulations establishing a fair charge for services provided by that agency, based on the costs to the government, the value of the services, and the public policy and interests to be served. /3/ 3. On July 8, 1982, approximately one month after the Treasury Department issued the directive license, appellees and Iran entered into a settlement agreement and filed a request with the Tribunal for an "Award on Agreed Terms" to give effect to the settlement. On September 14, 1982, the Tribunal "accepted and recorded" the settlement, stating that it was "binding on both parties, and consequently (Iran) is obligated to pay (appellees) the sum of * * * ($2,800,000), which obligation shall be satisfied by payment out of the Security Account * * *." /4/ When the Federal Reserve Bank of New York received payment of the Tribunal's award in favor of appellees, it deducted the two percent charge ($56,000), deposited that amount in the Treasury pursuant to the directive license, and paid the balance of $2,744,000 to appellees. App., infra, 3a, 14a. 4. On December 17, 1982, appellees filed this action in the United States Claims Court (C.A. App. A41-A54). Appellees contended, inter alia, that deduction of the two percent charge from its Tribunal award violated the IOAA and the Fifth Amendment of the United States Constitution. On May 1, 1985, the Claims Court rendered an oral decision concluding that the Treasury Department's directive license violated the IOAA (App., infra, 26a-51a) because it imposed a fee for services furnished not only by that Department, but also by the Departments of State and Justice (id. at 35a-37a), and because the administrative record did not sufficiently show the basis for the calculation of the government's expenses or the apportionment of those expenses to Tribunal awards (id. at 37a-47a). /5/ 5. Congress reacted immediately to the Claims Court's oral decision. On August 16, 1985, before the Claims Court entered a final judgment, Congress enacted the Iran Claims Settlement Act as Title V of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Pub. L. No. 99-93, Sections 501-505, 99 Stat. 437-439, 50 U.S.C. (Supp. III) 1701 note. Section 502(a) of that Act requires the Federal Reserve Bank of New York to deduct from a Tribunal award "an amount equal to 1 1/2 percent of the first $5,000,000 and 1 percent of any amount over $5,000,000, as reimbursement to the United States Government for expenses incurred in connectin with the arbitration of claims of United States claimants against Iran before the Tribunal and the maintenance of the Security Account established pursuant to (the Algiers Accords)" (99 Stat. 438). The statutory requirement was made effective as of June 7, 1982 (Section 502(d), 99 Stat. 438), the date on which the Treasury Department had issued the directive license under the IOAA. The legislative history shows that the United States incurred expenses for such items as the payment of one-half of the annual expenses of the Tribunal; management fees paid to the depository for the Security Account; expenses of the Federal Reserve Bank of New York in marshalling Iranian assets for transfer to the Security Account and distributing awards certified by the Tribunal; efforts by the Departments of Treasury and Justice to ensure compliance with the Algiers Accords; and the State Department's costs in maintaining offices here and abroad to facilitate the filing of claims, service of Tribunal documents, and presentation of positions on major issues of common importance to United States claimants. See Claims Against Iran: Hearing Before the Subcomm. on International Economic Policy and Trade of the House Comm. on Foreign Affairs, 97th Cong., 2d Sess. 14-17 (1982); Iran Claims Legislation: Hearing Before the Senate Comm. on Foreign Relations, 99th Cong., 1st Sess. 14-15, 26-32 (1985) (1985 Hearing). The legislative record further shows that the United States contributed $900,000 annually for the maintenance of the Security Account and $2 million annually for the operations of the Tribunal, and that the State Department and other agencies were spending approximately $1 million annually to provide assistance to United States claimants. 1985 Hearing 14-15, 26. 6. a. The enactment of Section 502 furnished express statutory authorization for the deduction of 1 1/2% of the Tribunal's award to appellees ($42,000), and thereby mooted appellees' statutory challenge to assessment of a fee. /6/ However, appellees argued that Section 502 is unconstitutional under the Just Compensation, Due Process and Origination Clauses of the Constitution. /7/ The Claims Court rejected appellees' constitutional challenges and dismissed this suit (App., infra, 12a-25a). The court held that Section 502 does not contravene the Due Process Clause because Congress had a rational basis for imposing the fee on successful claimants but not unsuccessful claimants (id. at 19a-21a) and because Congress's decision to make Section 502 effective as of June 7, 1982, served to ensure that all claimants would be treated alike (id. at 23a-25a). In addition, relying on this Court's decision in Twin City Bank v. Nebeker, 167 U.S. 196, 202-203 (1897), the Claims Court held that the fact that the Iran Claims Settlement Act was added to the foreign relations authorization bill by the Senate did not violate the Origination Clause because Section 502 is not a general revenue measure but rather provides for the collection of a fee for services rendered (App., infra, 21a-23a). In rejecting appellees' challenge to Section 502 under the Just Compensation Clause (App., infra, 15a-19a), the Claims Court observed that virtually every regulation, tax, or fee diminishes the value of the affected property to some extent (id. at 17a). And the court found no constitutional defect in that consequence in this case because: (i) the economic impact of the 1 1/2 percent fee is "very small" and is far less substantial than the regulatory burdens this Court has sustained in its taking cases, including Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987) (App., infra, 16a-17a); (ii) the deduction was neither novel nor unexpected, because during the preceding 35 years Congress had authorized the United States to deduct five percent of awards made by the Foreign Claims Settlement Commission as reimbursement for the costs of adjudicating and settling claims against foreign governments (id. at 17a-18a, citing 22 U.S.C. 1621-1644m); (iii) the fee did not interfere with reasonable investment-backed expectations, because United States nationals doing business abroad necessarily assume the risk that the President may be required to exercise his established power to resolve their claims against the foreign government (App., infra, 17a); and (iv) appellees "significantly benefited from the Tribunal," whose activities are supported by the fee (ibid.). b. The court of appeals reversed, holding that Section 502 is unconstitutional because it effects a taking of private property without payment of just compensation (App., infra, 1a-11a). The court acknowledged that appellees do not contend that a taking occurred on the theory that the amount awarded by the Tribunal was less than what they would have received if their suit against Iran had proceeded in the district court; but it nevertheless found a constitutional violation because the 1 1/2% fee would not have been assessed against whatever judgment was ultimately rendered by the district court (id. at 7a). The court reasoned as follows: (i) appellees "had a sufficient forum and remedy in the district court, the remedy secured by the prejudgment attachment"; (ii) "(t)he Tribunal award was the substitute for a judgment by a United States court"; (iii) "the Tribunal fully paid (appellees') claim against Iran"; and (iv) therefore the 1 1/2% diminution in the value of the substitute award constitutes a taking (id. at 8a). The court recognized that "(i)n the perhaps usual case where governmental activities must be assessed to see if they so impair private property rights as to amount to a taking," a court's inquiry is guided by three factors: "'(1) "the economic impact of the regulation on the claimant"; (2) "the extent to which the regulation has interfered with distinct investment-backed expectations"; and (3) "the character of the governmental action"'" (App., infra, 5a, quoting Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 225 (1986), and Penn Central Transp. Corp. v. New York City, 438 U.S. 104, 124 (1978)). But it noted that this multi-factor analysis is inapplicable -- and that a per se approach instead must be followed -- where there is a physical occupation or appropriation of property (id. at 5a-6a, citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)). The court regarded the deduction of 1 1/2 percent of the Tribunal award as a permanent "appropriation" of the $42,000 in question, thereby triggering the per se approach of Loretto (App., infra, 6a-7a). In the court's view, Section 502 provides for "seizing a percentage of the awards of the Tribunal" to pay "for the resolution of the hostage crisis," and it believed that the government should pay compensation when it uses private claims as "'bargaining chips'" to further the Nation's foreign policy goals (id. at 8a, quoting Dames & Moore, 453 U.S. at 691 (Powell, J., concurring in part and dissenting in part)). The court of appeals had "no quarrel" with the proposition that "those who trade and travel abroad rely principally upon the relationships between our Government and others as the foundation for all rights"; but it did not perceive what benefit appellees realized from the Tribunal in this case, "when prior to the Accords (they) had secured the attachment of Iranian assets sufficient to cover (their) eventual award and, had the President not suspended American claims, would have had no need for the Tribunal" (App., infra, 8a-9a). The court therefore distinguished this case from Shanghai Power Co. v. United States, 4 Cl. Ct. 237 (1983), aff'd mem., 765 F.2d 159 (Fed. Cir.) (Table), cert. denied, 474 U.S. 909 (1985), which found no Just Compensation Clause violation in the President's settlement of claims against the People's Republic of China (PRC) for considerably less than the amount the plaintiff sought, on the ground that American claimants had not other recourse against the PRC (App., infra, 9a). The court similarly distinguished the consistent practice of deducting a percentage of awards made under the Foreign Claims Settlement Act (see 22 U.S.C. 1626(b)) on the ground that, in its view, the settlement agreements in those instances resolved claims for which the claimants had no effective recourse against the foreign government concerned (App., infra, 10a). /8/ THE QUESTION IS SUBSTANTIAL The court of appeals has held an Act of Congress unconstitutional. That Act imposes a modest fee on those United States claimants who have voluntarily and successfully invoked the jurisdiction of the Iran-United States Claims Tribunal to recover on their claims against Iran and its instrumentalities. The fee is set at a level that serves to reimburse the United States for the expenses it has incurred on behalf of United States claimants in making available that neutral forum for the adjudication of their claims, in maintaining the Security Account as a guaranteed source of payment of meritorious claims, and in furnishing assistance to United States claimants. A user fee that is reasonably related in this manner to the benefits conferred and the costs incurred does not constitute a "taking" of private property for a public use, for which the payment of compensation would be required. That is especially so when Section 502 of the Foreign Relations Authorization Act is viewed in the broader context of the President's long-recognized authority to settle the claims of United States nationals against a foreign government -- a power that was sustained by this Court in Dames & Moore v. Regan, 453 U.S. 654 (1981), in the specific context of the settlement of claims against Iran. The court of appeals therefore clearly erred in holding Section 502 unconstitutional. Although the fee is assessed against each award at a modest rate, the effect of the invalidation of Section 502 as applied to the Iran claims-settlement program as a whole would be very substantial. We have been informed by the Department of State and the Department of the Treasury that a total of approximately $12.7 million has been deducted from awards that have already been made by the Tribunal in favor of United States claimants, and they estimate that several times that amount will ultimately be deducted after all awards are made. Review by this Court therefore is warranted. 1. As the court of appeals pointed out (App., infra, 7a), the theory of appellees' taking argument is not that the $2.8 million awarded by the Tribunal is less than the amount they would have been awarded on the same claim by the United States District Court for the District of Columbia. Indeed, because appellees entered into a settlement with Iran, rather than seeking an adjudication by the Tribunal, they are estopped from contending that the amount awarded by the Tribunal is inadequate. Appellees instead argue that the deduction and payment into the United States Treasury of 1 1/2% of the Tribunal's award constituted a taking of their property for a public use, without payment of just compensation. The court of appeals agreed. It believed that appellees had a fully adequate remedy in the federal district court, secured by their prejudgment attachments, and that because the Tribunal's award is a substitute for a judgment of the district court, any reduction in the amount of that award automatically constitutes a taking. This reasoning is seriously flawed. a. The particular governmental action challenged by appellees in this case -- the deductin and remittance to the United States of 1 1/2% of awards made by the Tribunal in favor of United States claimants -- is but one aspect of the comprehensive and complex regime established by the Algiers Accords, implementing international and financial agreements, Executive Orders, Treasury Department regulations, procedural rules of the Tribunal, and the Iran Claims Settlement Act for the purpose of resolving claims of United States nationals against Iran and its governmental entities. Viewed from one perspective, this regime regulates certain property interests (the claims or choses in action of United States nationals against Iran) by prescribing the manner in which the claims of any persons who choose to invoke the remedies secured by the President in the settlement with Iran are to be presented, decided, and paid. The reasonableness of the deduction therefore might be analyzed in terms of how the overall claims-settlement program affects the property interests (claims) of appellees and other United States nationals. There is, however, no occasion in this case to undertake an assessment of the claims-settlement regime as a whole in order to sustain the particular statutory provision that appellees challenge, because that privision is independently supported by a focused governmental justification that renders appellees' takings claim completely without merit. The deduction of 1 1/2% from Tribunal awards in favor of United States claimants was specifically intended by Congress to reimburse the United States for the costs it incurs in connection with the arbitration and payment of claims against Iran. The deduction is, in other words, a "user fee" assessed against those claimants who have successfully availed themselves of the extraordinary procedures established by the President and approved by Congress for their benefit. The Constitution does not bar Congress from imposing a reasonable charge on those who utilize specific governmental services (cf. Kadrmas v. Dickinson Pub. Schools, No. 86-7113 (June 24, 1988)), including an adjudicatory tribunal (United States v. Kras, 409 U.S. 434, 448-449 (1973)). /9/ Although Section 502 imposes a user fee, not a tax, the principles this Court has announced in sustaining taxes against a Fifth Amendment challenge are relevant here. In the case of such general revenue measures, the Court has consistently held that the Fifth Amendment allows the government wide latitude in setting an appropriate level of taxation -- even where the tax threatens the existence of the business affected -- and does not require that the amount of taxes from a particular activity be reasonably related to the cost or value of the services provided by the government to that activity. Commonwealth Edison Co. v. Montana, 453 U.S. 609, 622 (1981); Pittsburgh v. Alco Parking Corp., 417 U.S. 369, 376-377 (1974); Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 521-523 (1937); A. Magnano Co. v. Hamilton, 292 U.S. 40, 47 (1934); Brushaber v. Union Pac. R.R., 240 U.S. 1, 24-25 (1916); Billings v. United States, 232 U.S. 261, 282-283 (1914); McCray v. United States, 195 U.S. 27 (1904). Indeed, in Penn Central Transp. Corp. v. New York City, 438 U.S. 104 (1978), the Court identified "(e)xercises of the taxing power" as an "obvious example" of the government's power to "execute laws or programs that adversely affect recognized economic values" (id. at 124). Similarly, in its discussion in Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), of the "reciprocity of advantage" /10/ that supports the constitutionality of certain restrictions on the uses of property, the Court observed (id. at 491 n.21): The Takings Clause had never been read to require the States or the courts to calculate whether a specific individual has suffered burdens under this generic rule in excess of the benefits received. Not every individual gets a full dollar return in benefits for the taxes he or she pays; yet, no one suggests that an individual has a right to compensation for the difference between taxes paid and the dollar value of benefits received. See also Legal Tender Cases, 79 U.S. (12 Wall.) 457, 551 (1870). It follows a fortiori from these principles applicable to general revenue measures that the assessment of the carefully tailored user fee in this case does not violate the Fifth Amendment. Congress set the fee at a level that is no higher than was found necessary to reimburse the United States for the approximately $4 million in expenditures it was expected to incur annually in connection with the operation of the Tribunal, maintenance of the Security Account, and the rendering of assistance to United States claimants. Although the Just Compensation Clause would not in any event require a close correlation between the level of the fee and the cost of the services, the court of appeals did not dispute Congress's determination that the fee constitutes "a fair approximation of the cost of benefits supplied" (Massachusetts v. United States, 435 U.S. 444, 463 n.19 (1978)). /11/ Moreover, especially when compared with ordinary taxes, the amount of the fee is exceedingly modest in amount, assessed at the rate of only 1 1/2% of an award up to $5 million and 1% in excess of that amount. Because the United States is simply passing through the reasonable cost of a governmental program that redounds to the private benefit of successful claimants, this plainly is not a case in which the government is "'forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, No. 85-1199 (June 9, 1987), slip op. 13 (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)). b. Contrary to the suggestion by the court of appeals (App., infra, 11a), the avalidity of the user fee in this case is not indermined by the fact that it is assessed only against those claimants who have actually received an award by the Tribunal, rather than against all United States nationals who filed claims with the Tribunal. Although a filing fee applicable to all claimants would be equally constitutional (compare United States v. Kras, supra), Congress reasonably could determine that only those claimants who actually receive an award realize a sufficient "benefit" from the claims-settlement apparatus to warrant the assessment of a fee. See 1985 Hearing 109-110. Moreover, as the State Department pointed out while the bill was under consideration, "(a) fee charged to unsuccessful claimants, if more than a nominal amount, would deter some claimants (in particular the small claimants) from asserting claims," which would be "contrary to the essential purpose of the Algiers Accords to provide a forum for the resolution of the claims of all U.S. nationals against Iran" (id. at 113 (emphasis in original)). Finally, although all persons who filed claims have benefited from the existence of the Tribunal in the sense that they were afforded a forum for the adjudication of their claims, only successful claimants receive a tangible benefit from the payment mechanism afforded by the Security Account and the Federal Reserve Bank of New York, the cost of which is also defrayed by the user fee appellees challenge. The Fifth Amendment does not bar Congress from drawing on these distinctions in confining the incidence of the fee to successful claimants. Alco Parking Corp., 417 U.S. at 378-379; Brushaber, 240 U.S. at 24-26; Billings, 232 U.S. at 283-284; McCray, 195 U.S. at 61-62. 2. a. Despite the manifest reasonableness of the fee, the court of appeals found it unconstitutional. In the court's view, the deduction of 1 1/2% of the Tribunal's award to appellees constitutes a permanent physical "appropriation" of the $42,000 in question, thereby triggering the per se taking analysis of Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) (App., infra, 5a-7a). However, the deduction of the $42,000 from the aggregate amount of the Tribunal's award that was paid through the Federal Reserve Bank of New York was simply the means by which the government collected the user fee, just as the withholding of income taxes from an employee's pay is the means by which the government collects those taxes. If the fee itself is constitutional, as it clearly is, then the deduction of the fee prior to the Bank's distribution of the award to appellees raises no distinct constitutional difficulties. b. The underlying justification for the fee also explains why the court of appeals erred in believing that it is akin to the governmental action that was found to violate the Just Compensation Clause in Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162-165 (1980). See App., infra, 6a, 8a. There, the purchaser of a company deposited funds with the clerk of the county court in order to ensure payment of debts owed by the acquired company; the clerk then deposited the funds in an interest-bearing account. When a receiver was appointed for the acquired company, the clerk paid the receiver the balance of the principal in the account, less the fee prescribed by another statutory provision (Fla. Stat. Section 28.24(14) (1977)) for the clerk's services, but the clerk did not pay the receiver the interest that had been earned on the deposited funds. 449 U.S. at 156-158. This Court held that the county's retention of the interest was an unconstitutional taking of private property for a public use without payment of compensation (id. at 162-165). However, the Court's holding expressly rested on the premise that the interest earned on the deposited funds "was not a fee for services," because "any services obligation to the county was paid for and satisfied by the substantial fee charged pursuant to Section 28.24 and described specifically in that statute as a fee 'for services' by the clerk's office" (id. at 162 (emphasis added)). See id. at 164-165. In this case, by contrast, the 1 1/2% deduction from the aggregate amount of a Tribunal award is a "fee for services," and there is no separate statute under which such a fee is also assessed. The United States therefore has not appropriated a portion of a claimant's private property to a public use, without any further governmental justification. Accordingly, far from supporting the court of appeals' holding, Webb's Fabulous Pharmacies strongly supports the constitutionality of Section 502, because the Court there recognized the validity of a statute that imposes a reasonable fee to defray the cost of governmental services. c. The difference between this case on the one hand and Webb's Fabulous Pharmacies on the other is further highlighted by the fact that the Iran Claims Settlement Act imposes a fee only on persons who have voluntarily invoked both the jurisdiction of the Tribunal and the special payment mechanism furnished by the Security Account and the Federal Reserve Bank of New York. As this Court explained in FCC v. Florida Power Corp., 480 U.S. 245 (1987), the Court's application of the per se analysis in Loretto was "'very narrow'" and rested on the fact that cable television operators were given "compulsory access" to the private property (480 U.S. at 251 (quoting Loretto, 458 U.S. at 441)). Similarly, in Webb's Fabulous Pharmacies, the creditors of the acquired company, who were the beneficiaries of the interpleader account, had no control over the purchaser's decision to deposit the funds in the registry of the court (cf. 449 U.S. at 161-162). By contrast, in Florida Power, the Court stressed that the owners of the utility poles had voluntarily entered into leases with cable operators, and the terms of those leases therefore were subject to traditional police-power regulation as long as the rates were not "confiscatory." 480 U.S. at 251-253. See also Nollan v. California Coastal Comm'n, No. 86-133 (June 26, 1987), slip op. 7-8 n.2; Bowen v. Gilliard, No. 86-509 (June 25, 1987), slip op. 21; Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1007 (1984). The principles followed in Florida Power are fully applicable here. Appellees voluntarily invoked the jurisdiction of the Tribunal by filing their claim, and even after appellees agreed to a settlement with Iran, they did not bypass the claims-settlement apparatus by making arrangements for direct payment by Iran, as they were free to do. Instead, appellees joined with Iran in requesting the Tribunal to enter a formal award upon agreed terms, and the Tribunal entered such an award. See pages 7-8, supra. Moreover, on July 8, 1982, when appellees requested the Tribunal to enter the award, the Treasury Department had already issued the directive license under the IOAA requiring the Federal Reserve Bank to deduct two percent of any such award. As a result, appellees were fully on notice that the fee would be deducted when they set the payment process in motion. /12/ Finally, as in Florida Power, it could not seriously be maintained in this case that the particular charge -- imposed by the Iran Claims Settlement Act at the rate of 1 1/2% for the voluntary use of the Tribunal and the payment process -- is "confiscatory" in amount. 3. The court of appeals also rested its finding of a taking on the premise that appellees had a fully sufficient remedy in their suit in district court, secured by pre-judgment attachments of Iranian assets. The court reasoned that because no fee would have been deducted from a judgment awarded by the district court, and that because the award by the Tribunal was a substitute for such a judgment, any reduction in the amount of that award constitutes a taking of property for which compensation must be paid -- especially since, in the court's view, appellees received no benefit from the Tribunal and the claims of appellees and other United States nationals were used as "bargaining chips" to obtain release of the hostages. App., infra, 7a-11a. This reasoning is wrong in every respect. a. First, although the court of appeals was correct that under existing law no deduction would have been made from a favorable judgment of the district court if their suit against Iran had been permitted to proceed to judgment, appellees had no property interest in having any particular forum, or a cost-free forum, for the adjudication of their claim. Statutes governing jurisdiction and judicial procedure, like those governing the assessment of taxes, fees or other regulatory measures, are subject to revision by Congress. Bowen v. Public Agencies Opposed to Social Security Entrapment, 477 U.S. 41, 55 (1986); National Railroad Passenger Corp. v. Atchison, T. & S.F.R.R., 470 U.S. 451, 465-470 (1985); Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 148 (1982); Lynch v. United States, 292 U.S. 571 (1934); Crowell v. Benson, 285 U.S. 22, 41 (1932); Silver v. Silver, 280 U.S. 117, 122-123 (1929). Accordingly, the Just Compensation Clause would not have barred Congress from enacting a law that imposed a user fee on plaintiffs who invoked the jurisdiction of the district courts and applying that statute to pending cases, including appellees' pending suit against Iran. Compare Bradley v. Richmond School Bd., 416 U.S. 696 (1974). It follows that the Just Compensation Clause likewise did not bar Congress from imposing a user fee on those persons who invoked the alternative forum of the Iran-United States Claims Tribunal for adjudication of the same claim. b. Second, the court of appeals considerably exaggerated the extent to which United States nationals had equivalent means for recovering on their claims against Iran before the President adhered to the Algiers Accords. As an initial matter, the President froze Iranian assets in the United States in November 1979 in response to threats by Iran to remove its assets from the United States. See page 3, supra. It is very likely that if the President had not acted, those assets would not have remained in the United States (and therefore would not have remained subject to attachment or execution) and would not have been available to fund the Security Account for the ultimate payment of meritorious claims against Iran. Moreover, after the President blocked the removal of Iranian assets, appellees were permitted to attach a portion of those assets only pursuant to the revocable license issued by the Secretary of the Treasury. Their attachments therefore were at all times subordinate to the power of the President under IEEPA to direct the transfer of the assets out of the United States in order to resolve the international crisis. For this reason, the Court held in Dames & Moore that the President's voiding of attachments as part of the overall settlement with Iran did not constitute a taking of property. 453 U.S. at 674 n.6. For present purposes, then, the taking question must be analyzed as if appellees had never obtained attachments of Iranian assets in the United States. Yet the court of appeals largely relied upon the existence of those attachments in concluding that appellees had an equivalent remedy in federal district court. See App., infra, 7a, 8a, 9a; cf. Dames & Moore, 453 U.S. at 687. Moreover, even putting the blocking order to one side, claimants faced a variety of obstacles to recovery against Iran in United States courts. Those obstacles included arguments by Iran in individual cases that: (1) contacts with the United States were insufficient to support jurisdiction over the particular claim under the Foreign Sovereign Immunities Act of 1976 (FSIA) (28 U.S.C. 1605); (2) the Act of State doctrine barred adjudication of expropriation and certain other claims; (3) the contracts on which American claimants sought to recover provided for resolution of disputes in Iranian courts; and (4) Iranian assets that might secure a final judgment were rendered immune from pre-judgment attachment under the FSIA (28 U.S.C. 1609) because they belonged to Iran's central bank or military (28 U.S.C. 1611(b)), because Iran had not explicitly waived its immunity from pre-judgment attachment, or because the assets did not belong to the Iranian entity against which the plaintiff had a claim (28 U.S.C. 1610). See Iran Asset Settlement: Hearing Before the Senate Comm. on Banking, Housing, and Urban Affairs, 97th Cong., 1st Sess. 42 (1981). In Dames & Moore, the Court expressly noted that because the Algiers Accords "remove(ed) a number of jurisdictional and procedural impediments faced by claimants in United States courts," the government's argument that "the provision of the Claims Tribunal will actually enhance the opportunity for claimants to recover their claims * * * cannot be discounted" (453 U.S. at 687 (emphasis in original)). c. Third, although appellees reached a settlement with Iran, it simply is not true that they received no benefit from the Tribunal and other elements of the claims-settlement apparatus. The Accords themselves, as well as the availability of the Tribunal as a forum for adjudication of claims and the availability of the Security Account as a guaranteed source of payment, no doubt furnished both an initial impetus and a continuing incentive for Iran to settle appellees' individual claim. Furthermore, the entry of a formal Tribunal award furnished appellees with a number of concrete advantages. Under the Accords, the award became "final and binding" upon Iran and was "enforceable against (Iran) in the courts of any nation in accordance with its laws" (C.A. App. A23) -- attributes that the settlement agreement alone would not have had. Entry of the award also entitled appellees to receive payment out of the Security Account, through the channels established by the Federal Reserve Bank as the fiscal agent of the United States, thereby eliminating the risks and costs that would have been associated with efforts by appellees to collect the award from Iran. d. Fourth, the court of appeals seriously misstated the historical record in suggesting that the President treated the claims of appellees and other United States nationals as nothing more than "bargaining chips" to obtain the release of the American hostages and that the public therefore must bear all of the government's expenses associated with the arbitration and payment of those claims. The President of course had the discretion under IEEPA to transfer all frozen Iranian assets in the United States directly to Iran solely to obtain the release of the hostages, without assuring the availability of any of those assets to pay American claimants and without taking any steps to resolve those claims. But that is not what the President did. He provided for the retention of $1 billion in Iranian assets in the Security Account to pay American claims against Iran and furnished a forum for the adjudication of those claims. The effectiveness of that alternative forum is demonstrated by the fact (of which we have been informed by the Department of State) that the Tribunal has awarded in excess of $1 billion to United States claimants. Thus, the Court's observation in Dames & Moore that "there does appear to be a real 'settlement' here" (453 U.S. at 687) has been confirmed by experience. 4. For the foregoing reasons, the deduction of 1 1/2% of the Tribunal's award in favor of appellees was fully justified in its own right as a user fee that serves to recoup the costs incurred by the United States in making the Tribunal, the Security Account, and the Federal Reserve Bank available for the resolution and payment of appellees' claims. Imposition of a reasonable user fee for services rendered does not constitute a "taking" of private property that triggers the Fifth Amendment's obligation to pay just compensation. The foregoing submission is sufficient to sustain the fee and dispose of this case, without regard to the factors the Court has considered in other cases that have arisen in the distinct context of challenges to regulatory measures on the ground that they adversely affect private property to a such an extent as to amount to a taking of property. In its "regulatory takings" cases, the Court has not established "'any "set formula" for determining when "justice and fairness" require that economic injuries caused by public action be deemed a compensable taking.'" Monsanto, 467 U.S. at 1005, quoting Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979), and Penn Central, 438 U.S. at 124. Rather, "(t)he inquiry into whether a taking has occurred is essentially an 'ad hoc, factual' inquiry." Monsanto, 467 U.S. at 1005, quoting Kaiser Aetna, 444 U.S. at 175. Accord, Pennell v. City of San Jose, No. 86-753 (Feb. 24, 1988), slip op. 7; Gilliard, slip op. 18-19; Hodel v. Irving, No. 85-637 (May 18, 1987), slip op. 8-9; Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 224 (1986). The judicial inquiry is, however, guided by consideration of three factors the Court has found to be of "'"particular significance": (1) "the economic impact of the regulation on the claimant"; (2) "the extent to which the regulation has interfered with distinct investment-backed expectations"; and (3) "the character of the governmental action."'" Gilliard, slip op. 19, quoting Connolly, 475 U.S. at 224-225, and Penn Central, 438 U.S. at 124. This three-factor test is not directly implicated here, because appellees have not challenged the regulation of private property interests as such, but rather have focused their challenge narrowly on the exaction of a fee. However, the fee they challenge was not exacted from funds the appellees had in hand, but was instead imposed as part of a regime (the Algiers Accords and implementing measures) that may in a sense be said to regulate a species of private property -- the claims of United States nationals against Iran -- by prescribing the manner in which those claims may be presented, resolved, and paid. If the Court were inclined to consider the reasonableness of the user fee from the broader perspective of the effect that the overall claims-settlement regime has had on the claims of appellees and other United States nationals, the Court might choose to draw, at least for purposes of analogy, on some of the principles it has enunciated in its "regulatory takings" cases. Viewed even from this perspective, the fee is fully consistent with the factors the Court has considered in its "regulatory takings" cases. First, as the Claims Court noted (App., infra, 16a-17a), the economic effect of the 1 1/2% percent fee is "very small" and is far less than that involved in many of this Court's regulatory taking cases. See, e.g., Penn Central, 438 U.S. at 125-126, 131; Hadacheck v. Sebastian, 239 U.S. 394 (1915); compare Keystone Bituminous Coal, 480 U.S. at 496-497. Second, appellees suffered no interference with any reasonable investment-backed expectations. The possibility that the President would find it necessary to intervene in the resolution of financial and other disputes in the area of foreign affairs is properly recognized as both a shared benefit and a shared risk of those who trade and travel abroad. See Dames & Moore, 453 U.S. at 679; Chang v. United States, No. 88-1120 (Fed. Cir. Oct. 13, 1988), slip op. 9-11; Shanghai Power Co. v. United States, 4 Cl. Ct. 237, 245 (1983), aff'd, 765 F.2d 159 (Fed. Cir.) (Table), cert. denied, 474 U.S. 909 (1985); compare Connolly, 475 U.S. at 227; Penn Central, 438 U.S. at 125-127. /13/ Third, as we have explained, the character of the governmental action -- the assessment of a user fee to defray the cost of furnishing identifiable governmental services -- strongly supports the constitutionality of Section 502. In fact, the United States routinely has deducted five percent from monies distributed to its nationals following the lump-sum settlement of their claims against foreign governments, as reimbursement of the United States' costs associated with the settlements. /14/ That established pattern negated any reasonable expectation by appellees that they would be exempt from bearing a portion of the cost of implementing any settlement that might affect claims arising out of their business in Iran. In sum, appellees, like numerous other claimants, received significant benefits from their invocation of the Tribunal's jurisdiction and their election of the Security Account as the source of payment of their claim. Accordingly, this is not a situation where "justice and fairness" require the government, and therefore all of the people, to shoulder the costs that the government incurred in making those avenues available for resolution of their claims. Because the decision of the court of appeals could effectively require the United States to forgo many millions of dollars in fees generated by Section 502 over the course of the Iran claims-settlement program, review by this Court is warranted. CONCLUSION Probable jurisdiction should be noted. Respectfully submitted. CHARLES FRIED Solicitor General JOHN R. BOLTON Assistant Attorney General LAWRENCE WALLACE Deputy Solicitor General EDWIN S. KNEEDLER Assistant to the Solicitor General DAVID M. COHEN DOUGLAS LETTER TERRENCE S. HARTMAN Attorneys DECEMBER 1988 /1/ Section 1252 was repealed by Section 1 of Public Law No. 100-352, 102 Stat. 662, which was enacted on June 27, 1988. However, Section 7 of Public Law 100-352 provides that the repeal of 28 U.S.C. 1252 "shall take effect ninety days after the date of the enactment of this Act" (i.e., on September 25, 1988) and "shall not * * * affect the right to review or the manner of reviewing the judgment or decree of a court which was entered before such effective date" (102 Stat. 664). In this case, the judgment of the court of appeals was entered on August 10, 1988, before the effective date of the repeal of 28 U.S.C. 1252, and a direct appeal therefore lies to this Court. /2/ See Iran Claims Act: Hearing on H.R. 3241 Before the Subcomm. on International Economic Policy and Trade of the House Comm. on Foreign Affairs, 98th Cong., 1st Sess. 31-32 (1983) (testimony of David K. Anderson, General Counsel of Sperry Corporation Computer Systems) (1983 Hearing). /3/ At the time the directive license was issued, the IOAA was codified at 31 U.S.C. (1976ed.) 483a. The IOAA was redesignated as 31 U.S.C. 9701 as part of the recodification of Title 31 that was enacted by the Act of Sept. 13, 1982, Pub. L. No. 97-258, Section 1, 96 Stat. 1051. /4/ Award on Agreed Terms, No. 10-205-2, Iran-United States Claims Tribunal (Sept. 14, 1982), amended in other respects (Sept. 22, 1982) (Pltf. Mot. for Sum. Jdgmt. Exh. 6, filed 12/23/83). Iran had indicated that it would file a counterclaim with the Tribunal seeking recovery of taxes from appellees, and that counterclaim was taken into account in the settlement. See 1983 Hearing 32-33 (Anderson Testimony), note 2, supra. /5/ The Claims Court denied appellees' motion to certify a class (C.A. App. A55), and appellees did not appeal that ruling. /6/ The amount in excess of $42,000 that was withheld from appellees' award under the IOAA directive license, which required the Federal Reserve Bank to withhold two percent of awards, was refunded to appellees. See 50 Fed. Reg. 34959 (1985). /7/ The Origination Clause (Art. I, Section 7, Cl. 1) provides that "All bills for raising Revenue shall originate in the House of Representatives." /8/ In light of its holding that Section 502 violates the Just Compensation Clause of the Fifth Amendment, the court of appeals found it unnecessary to consider appellees' challenges under the Due Process and Origination Clauses. App., infra, 11a. /9/ The Due Process Clause has been held to bar the government from imposing a filing fee as a condition precedent to obtaining a meaningful judicial hearing in the case of an indigent plaintiff who seeks adjudication of certain fundamental claims that are uniquely subject to public resolution. Boddie v. Connecticut, 401 U.S. 371 (1971). Neither appellees nor their contractual and other claims against Iran are protected by this special rule. Compare United States v. Kras, supra. In any event, the fee prescribed by the Iran Claims Settlement Act is assessed only in the event that the claimant prevails before the Tribunal. For this reason, and in light of its modest rate, the fee does not erect any barrier to access to the Tribunal and therefore raises no procedural due process concerns. /10/ See Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922); see also Hodel v. Irving, No. 85-637 (May 18, 1987), slip op. 10. /11/ The Commerce Clause imposes limits on the level of user fees that the States may impose for the use of highways and other facilities and services they furnish to persons engaged in interstate commerce. However, a state user fee will be sustained as long as it bears a reasonable relationship to the value or cost of the services. See Commonwealth Edison, 453 U.S. at 621-622 & n.12; Evansville-Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707, 712-720 (1972); Clark v. Paul Gray, Inc., 306 U.S. 583, 599 (1939); Ingels v. Morf, 300 U.S. 290, 296-297 (1937). Similarly, in Massachusetts v. United States, 435 U.S. 444 (1978), the Court held that the doctrine of intergovernmental tax immunity does not bar Congress from defraying the cost of a federal program by requiring the States, along with other users, to pay a nondiscriminatory fee that represents a fair approximation of the beneficiary's share of the costs. Although the user fee assessed against private claimants under Section 502 of the Foreign Relations Authorization Act is not subject to the special limitations imposed by the Commerce Clause or the intergovernmental immunity doctrine, the fee would satisfy those limitations as well. /12/ Especially in view of this notice, the Fifth Amendment did not bar Congress from making Section 502 effective as of June 7, 1982, the date of the Treasury Department's directive license, since retroactive application served to cure the defects identified by the Claims Court in that license under the IOAA, and to assure that all similarly situated claimants would be treated alike. Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 223-227 (1986); United States v. Darusmont, 449 U.S. 292, 298-299 (1981); Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 16-19 (1976); Swayne & Hoyt, Ltd. v. United States, 300 U.S. 297, 302 (1937); Graham & Foster v. Goodsell, 282 U.S. 409, 429 (1931). /13/ Indeed, another panel of the Federal Circuit recently held that the Algiers Accords' total extinguishment of claims against Iran by the American hostages did not interfere with "distinct investment-backed expectations." Belk v. United States, 858 F.2d 706, 710 (1988). /14/ More than 35 years ago, Congress amended the International Claims Settlement Act of 1949, ch. 54, 64 Stat. 13, 22 U.S.C. (& Supp. IV) 1621 et seq., to provide for deduction of five percent of awards made by the international Claims Commission (now Foreign Claims Settlement Commission). 22 U.S.C. 1626(b). Since that time, Congress repeatedly has included a five percent deduction from awards in legislation relating to specific claims-settlement programs. See, e.g., 22 U.S.C. 1641a(a) (Bulgaria, Hungary, Rumania, Italy, and and the Soviet Union); 22 U.S.C. 1644g (East Germany). Congress continued that practice as recently as 1980, when it amended the Act to provide for determination of claims against Vietnam. 22 U.S.C. 1645h(b). APPENDIX