Foreign Disputes

The President has exercised authority to settle foreign disputes involving international claims since at least 1799, and between 1817 and 1917, Presidents entered into 80 such agreements. Dames & Moore, 453 U.S. at 679 n.8. In the modern era, Presidents have continued to enter into executive claim settlement agreements. For example, between 1952 and 1980, the President entered into at least ten binding settlements with foreign nations. Id. at 680.

In a series of cases, the Court has upheld the President's authority to determine individual rights as part of settling disputes with foreign nations. American Ins. Assoc. v. Garamendi, 539 U.S. 396 (2003); Dames & Moore, supra; United States v. Pink, 315 U.S. 203 (1942); United States v. Belmont, 301 U.S. 324 (1937). The President may exercise this dispute resolution authority without seeking the consent of the Senate or approval from Congress, Garamendi, 539 U.S. at 415; Dames & Moore, 453 U.S. at 682-683; Pink, 315 U.S. at 223, 229; Belmont, 301 U.S. at 330, and the exercise of such authority preempts conflicting state law. Garamendi, 539 U.S. at 416-417; Pink, 315 U.S. at 223, 230-231; Belmont, 310 U.S. at 327, 331.

In Belmont, the Court upheld the validity of an executive agreement that resulted from an exchange of diplomatic correspondence between the United States and the Soviet Union. 301 U.S. at 326. Under the agreement, the Soviet Union assigned to the United States its claims against American nationals, including certain claims against banks. Ibid. The lower courts refused to enforce the United States' assignment-based claim against a bank on the ground that the Soviet Union's nationalization policy was confiscatory and therefore violated state public policy. Id. at 327. The Court reversed, holding that "no state policy can prevail against the international compact here involved." Ibid. The Court reasoned that "the external powers of the United States are to be exercised without regard to state law or policies," that "[t]he supremacy of a treaty in this respect has been recognized from the beginning," and that "all international compacts and agreements" are subject to "the same rule." Id. at 331. The Court also held that the agreement did not "require the advice and consent of the Senate." Id. at 330. In Pink, the Court reaffirmed that the executive agreement prevailed over conflicting state law, explaining "state law must yield when it is inconsistent with, or impairs the policy or provisions of, a treaty or of an international compact or agreement." Id. at 230-231.

In Dames & Moore, the Court upheld the validity of an executive order suspending claims by United States nationals against Iran filed in United States courts, including state law claims in state court. 453 U.S. at 686. The executive order implemented an executive agreement with Iran to "terminate" all legal proceedings in the United States courts involving claims against Iran so that they could be resolved in an Iran-United States Claims Tribunal. Id. at 665. The Court found that the President's suspension of claims was not authorized by statutes, id. at 675-677, but concluded that those statutes "invite[d]" the President's action because they gave the President broad authority in "closely related" areas. Id at 678 (citation and internal quotation marks omitted). The Court also relied on the President's "longstanding practice of settling ... claims by executive agreement without the advice and consent of the Senate," id. at 679, reasoning that Congress had through acquiescence "implicitly approved" that practice. Id. at 680.

In Garamendi, the Court invalidated a state law that required insurers doing business in the State to disclose information about Nazi-era insurance policies. 539 U.S. at 401. The President had entered into agreements with foreign governments to encourage the establishment of voluntary compensation funds for persons who had claims for unpaid Naziera insurance. Id. at 421-422. The Court held that the state law conflicted with the policy reflected in the President's agreements and was therefore preempted. Id. at 416-417. The Court reasoned that its decisions in Dames & Moore, Pink, and Belmont had "recognized that the President has authority to make 'executive agreements' with other countries, requiring no ratification or approval by Congress," id. at 415, and that "valid executive agreements are fit to preempt state law, just as treaties are." Id. at 416. The Court noted that the agreements at issue did not expressly preempt state law, id. at 417, but it concluded that statements of Executive Branch officials made clear that the state law impermissibly interfered with the policy reflected in the agreements. Id. at 421-425.