        Presidential Authority to Permit the Withdrawal of
         Iranian Assets Now in the Federal Reserve Bank
In order to allow Iran to w ithdraw its assets in the Federal Reserve Bank, the President
   has the power, under the International Em ergency Econom ic Powers Act (IEE PA ), to
   nullify existing attachm ents licensed under the Iranian Assets C ontrol Regulations.
   Since in consenting to attachm ents against the blocked Iranian assets the G overnm ent
   reserved the right to revoke its consent at any time, their nullification does not
   constitute a compensable taking o f private property.
T he Federal Reserve Bank may release Iranian assets which have been attached but are
   not yet subject to a licensed final judgm ent, in reliance on the Presidents’ action under
   the IE E PA , without applying to the court to vacate its attachm ent orders. The
   considerations which ordinarily mandate compliance with court orders would not
  justify a contem pt citation w here the conduct in question has been clearly mandated by
   supervening executive action, where com pliance would defeat the President’s exercise
  o f his em ergency pow er under the IE E PA , and where the IE E PA itself provides an
  express exception to contem pt liability for com pliance with an order issued under its
  authority.
W here Congress has immunized good faith compliance with a presidential order issued
   under the IE E PA , the Federal Reserve Bank would not be held liable to disappointed
  attachment creditors even if the presidential orders nullifying the attachm ent orders
   were later held unlawful. N or is there any basis, in the Constitution or otherwise, on
   which creditors whose attachm ents were nullified would be likely to recover against
  the United States itself.
                                                         October 8, 1980
  MEMORANDUM OPINION FOR THE ATTORNEY GENERAL
   This responds to your request for our opinion whether the President
has authority to permit the Central Bank of Iran and the Bank Markazi
to withdraw the blocked assets they now have on deposit with the
Federal Reserve Bank (FRB) notwithstanding the outstanding orders of
attachment entered against such assets. You have also asked whether it
is necessary to approach the courts that have entered the orders of
attachment and obtain orders of dissolution before transferring the
funds. We have concluded that the President has the authority under
the International Emergency Economic Powers Act (IEEPA), 50
U.S.C. § 1701 et seq. (Supp. I 1977), to return those assets by revoking
the existing licenses for attachments against them and by licensing
withdrawals. It is our view that such action is sufficient as a legal
matter to authorize the return of those assets. Moreover, it is our
opinion that the Federal Reserve Bank, relying upon that authority,
may release the assets without applying to the court to vacate the
                                           273
 attachment orders. We believe it would be an abuse of discretion for a
 court to use the contempt power to penalize noncompliance with an
 attachment order that has been rendered unenforceable by the Presi­
 dent’s order. Finally, Congress has immunized good faith compliance
 with emergency orders issued under IEEPA; therefore, it is our opinion
 that the Federal Reserve Bank could not be held liable to the attach­
 ment creditors for damages even if a court should later determine that
 the President’s order was beyond the scope of his power under IEEPA.
 Similarly, we have found no basis for any action for damages by the
attachment creditors against the United States.
        I. Presidential Authority to Nullify Outstanding Attachments
    Under IEEPA, the President has broad powers to issue orders block­
ing or releasing Iranian assets.1 Pursuant to that power, the President
issued Executive Order No. 12,170 on November 14, 1979, blocking all
property subject to the jurisdiction of the United States in which the
government of Iran or any of its instrumentalities had an interest.
3 C.F.R. 457 (1979). The order also delegated to the Secretary of the
Treasury presidential authority under IEEPA to implement the block­
ing order. On the same day, the Treasury Department issued the first of
its Iranian Assets Control Regulations (IACR), which provided in part
(31 C.F.R. § 535.203(e)):
            Unless licensed or authorized pursuant to this part any
         attachment, judgment, decree, lien, execution, garnish­
         ment, or other judicial process is null and void with
         respect to any property in which on or since the effective
        date there existed an interest of Iran.
On November 19, 1979, § 535.805 was added, providing that any li­
censes or authorizations “may be amended, modified or revoked at any
time.” A limited modification to the general ban on unlicensed judicial
proceedings was made subsequently on November 23, 1979, with the
adoption of § 535.504, which authorized judicial proceedings but con­
tinued the ban on judgments and payments from blocked accounts. And
finally, on December 18, 1979, an interpretive rule was added to clarify
the permissible scope of judicial action (§ 535.418 (1980)):
  'T h e IE E P A ’s principal operative provision, § 1702(a)(1), provides that the President may:
          (A) investigate, regulate o r prohibit—
                 (i) any transactions in foreign exchange,
                 (ii) transfers of credit or paym ents betw een, by, through, or to any banking
           institution, to the extent that such transfers or paym ents involve any interest of any
           foreign country or a national thereof,
                (iii) the im porting or exporting of currency or securities; and
          (B) investigate, regulate, direct and com pel, nullify, void, prevent or prohibit, any
        acquisition, holding, w ithholding, use, transfer, w ithdraw al, transportation, importation
        or exportation of, or dealing in, or exercising any right, pow er, or privilege with
        respect to, or transactions involving, any property in w hich any foreign country or a
        national thereof has any interest. . . .

                                                   274
         The general authorization for judicial proceedings con­
         tained in § 535.504(a) includes pre-judgment attachment.
         However, § 535.504(a) does not authorize payment or de­
         livery of any blocked property to any court, marshal,
         sheriff, or similar entity, and any such transfer or blocked
         property is prohibited without a specific license. It would
         not be consistent with licensing policy to issue such a
         license.
   All of the attachment orders entered against the Iranian assets held
by the Federal Reserve Bank exist pursuant to Treasury’s general
license. In order to effect Iran’s withdrawal of the assets in the FRB,
we believe the President has the power to nullify the licensed attach­
 ments by revoking the existing general licenses for attachments.
   While there is no case law addressing the President’s power under
 IEEPA to nullify attachments issued under a licensing scheme such as
the one presently in effect under the IACR, we believe that Orvis v.
Brownell, 345 U.S. 183 (1953), provides strong support for the general
principle that the President may, under IEEPA, condition his consent
to the creation of property interests in blocked property and, by invok­
ing those conditions, nullify such property rights. In Orvis, claimants in
a New York court attached a credit, previously frozen by executive
order, which had been owed to Japanese nationals by a stock associa­
tion. The claimants obtained a judgment and, as required by regulation,
applied for a federal license to permit the stock association to pay over
the amount in judgment. The application was denied, and the Custodian
vested the credit and received payment from the stock association. The
judgment creditors, asserting that they had a right to the funds, filed an
action under § 9(a) of the Trading with the Enemy Act, after the
Custodian denied their notice of claim to those funds.
   The Supreme Court, in rejecting the judgment creditors’ § 9(a) claim,
noted that the government had consented to the unlicensed attachment
of the funds for the limited purpose of determining the rights and
liabilities between the creditors and the enemy debtors.2 The Court
    2 Prior to the attachm ent in Orvis, Treasury had issued a general ruling that any unlicensed transfers,
including attachm ents, w ere null and void. D epartm ent of Treasury Ruling No. 12, § 131.12, 7 Fed.
Reg. 2991 (1942). Paragraph 4 of the ruling, however, recognized unlicensed transfers, including
attachm ents, as valid and enforceable for the purpose of determ ining the rights and liabilities o f the
parties to the action. One day after the issuance o f the ruling. T reasury announced its position with
respect to unlicensed attachm ents in an amicus curiae brief in the N ew York C ourt of Appeals, stating
that unlicensed attachm ents w ere desirable to clarify the rights and liabilities o f private parties. Brief
o f the United States as amicus curiae at 52, 53 Commission for Polish Relief v. Banca Nationala a
Rumaniei, 288 N.Y. 332, 43 N .E. 2d 345 (1942), quoted in Zittman v. McGrath, 341 U.S. 446, 454-57
(1951) (Zittman I). Nine years later in Zittman 1, the C ourt relied on T reasury’s adm inistrative practice
and interpretation of Ruling No. 12 to deny Treasury's request that an attachm ent obtained in state
court against blocked G erm an bank accounts be declared null and void and decided that the attach*
ment was valid betw een the private parties to the action. A ccordingly, the C ourt held that an order of
the Custodian vesting the “right, title and interest” of the G erm an banks placed the Custodian in the
shoes of the G erm an banks and, therefore, subject to the attachm ent. In a com panion case, Zittman v.
                                              Continued

                                                  275
held, nonetheless, that the government’s permission to attach the credit
in state court proceedings created no property interest that could be
asserted against the government because the government had reserved
the right to withhold licenses for judgment. The Court reasoned that
the government’s initial consent to proceed with state court
attachments
        did not extend so far as to recognize them as effecting a
        transfer. To so interpret it would ignore the express condi­
        tions on which the consent was extended. Realistically, these
        reservations deprive the assent of much substance; but
        that should have been apparent on its face to those who
        chose to litigate. The opportunity to settle their accounts
        with the enemy debtor was all that the permission to
        attach granted.
Id. at 187 (emphasis added).
   Three important principles emerge from a careful analysis of Orvis.
First, the President has the power under IE E PA 3 to prevent the cre­
ation of property interests in blocked alien property. Second, this
power includes the power to reserve the right to withdraw any consent
he may give to the creation of property rights or to condition the
exercise of any property right created pursuant to his consent. Third,
this power to reserve the right to withdraw consent or condition the
exercise of property rights is paramount and supersedes any rights
creditors may acquire under state law.
   Application of these principles to the release of Iranian assets held by
the FRB leads to the conclusion that the President has the power under
IEEPA to nullify the attachments against those assets. Treasury, as the
President’s delegee, has consented to attachments against the blocked
Iranian assets. 31 C.F.R. § 535.504 and 535.418. In giving its consent,
Treasury reserved two crucial rights. Treasury withheld its consent to
McGrath, 341 U.S. 471 (1951) (Zittman II), the C ourt held that the Custodian’s order, w ithout such
restrictive language, directing that certain G erm an bank accounts previously attached by creditors be
turned over was valid. Since the Custodian had sought only possession of the funds and, unlike
Zittman I, had not asked for a judgm ent declaring the attachm ents to be invalid, the C ourt addressed
only the question w hether the Custodian had the pow er to possess and adm inister those funds. The
Court expressly reserved the question w hether the state court judgm ents and attachm ents w ould have
any conclusive effect on the final disposition of the accounts. Id. at 474. T hat question was decided in
the negative tw o years later in Orvis.
    3T he case law under the Trading w ith the Enem y A ct as amended in 1941, is fully applicable to
our analysis o f the President's authority under its successor statute, IEE PA . As the legislative history
o f IE E P A notes, the “grant o f authorities [in IE E P A ] basically parallels section 5(b) of the Trading
with the Enem y A ct.’’ H. R. Rep. No. 459, 95th Cong., 1st Sess. at 14-15 (1977). Indeed, because the
blocking order in Orvis was issued prior to the 1941 am endm ents to the Trading w ith the Enem y A ct,
which added inter alia the pow ers to nullify o r void any interest in alien property, it could be strongly
argued that the President’s pow ers to nullify or void the attachm ents against the locked assets are even
greater than the pow ers o f the President w hen the Orvis blocking order was issued. N ot only does the
President have the pow er recognized in Orvis to condition the creation of property interests and to
nullify said interests by invoking the stated conditions; he arguably also has the pow er to nullify or
void any interest in blocked property even in the absence o f any stated conditions or reservations. The
exercise o f that pow er, how ever, may raise a substantial “takings” question under the Fifth
Amendm ent.

                                                    276
judgment, a reservation which Orvis regarded as permitting the govern­
ment to nullify any attachments vis-a-vis itself. Treasury also reserved
the right to revoke its consent to attach at any time. 31 C.F.R.
§ 535.805.4 Thus, the government reserved not only the right to nullify
attachments vis-a-vis the government, but also the right to nullify them
totally.5 This latter reservation was critical in order to ensure that the
President would have maximum flexibility in negotiating with Iran for
the release of the hostages. Because the license to attach was subject to
these reservations, the attaching creditors in initiating attachments pro­
ceedings assumed the risk that the license to attach would be with­
drawn at any time. But, like the attachment creditors in Orvis, that risk
“should have been apparent on its face to those who chose to litigate.”
345 U.S. at 187. .
                    II. Judicial Dissolution of Attachment Orders
    We have concluded that the President has authority under IEEPA to
prevent the continuing assertion of interests in Iranian property through
the provisional remedy of attachment. The President may exercise that
authority by issuing an order prescribing that attachments shall create
no interests in Iranian property. Moreover, with respect to any pending
litigation involving Iranian property already subject to attachment but
not yet subject to a licensed final judgment, the President may provide
(1) that the plaintiff shall no longer enjoy provisional rights in the
property through attachment, and (2) that the garnishee may lawfully
transfer the property notwithstanding the plaintiffs attempt to secure it
pending final judgment.
   We now come to a procedural issue. If the President promulgates an
order that (1) prevents the continued assertion of provisional rights
through pending attachment orders and (2) authorizes garnishees to
transfer Iranian property notwithstanding attempts to secure it through
attachment, may garnishees assume that the President’s action, if in­
tended to do so, leaves them legally free to proceed directly with any
authorized transfer, or must the garnishees apply first to the appropriate
court or courts for orders formally vacating the attachments?
   In ordinary circumstances, the general interest in preserving orderly
judicial process would militate strongly in favor of the latter course.
Procedures are provided by law for the modification or dissolution of
court orders that stand in need of modification or dissolution because of
   4 In § 535.503, Treasury also reserved the right lo exclude any person from ihe operation of any
license or “to restrict the applicability [of any license] with respect to particular persons, transactions
or property or classes thereof.’* Thus, Treasury reserved the right not only to revoke all licenses for
attachm ents, but also to revoke selectively particular classes of licenses, e.g.. all general licenses for
attachm ents against blocked assests held by the Federal Reserve Bank.
   5 Because o f the reservation o f the right to revoke these attachm ents, it is clear that they can be
revoked under IEEPA without giving rise to a successful takings claim. See. e.g.. Bridge Co. v. United
States, 105 U.S. 470 (1881); United States v. Fuller. 409 U.S. 488 (1973).
                                                  277
changed circumstances. Such procedures are available here. See N.Y.
Civ. Prac. Law § 6223 (McKinney 1980). Ordinarily, these procedures
provide an adequate means of obtaining relief from court orders that
have been rendered void or unenforceable by a change in law. See
generally Pasadena City Board of Education v. Spangler, A ll U.S. 424
(1976). Moreover, from a purely pragmatic standpoint, the use of these
procedures in the present case would avoid the two risks presented by
the alternative course—namely, (1) the risk that action in defiance of an
undissolved attachment order will be regarded as contumacious and
punishable as contempt, and (2) the risk the courts may yet hold the
attachments lawful and the garnishee liable civilly for any damages
suffered by the plaintiffs in consequence of violation of the attachment
orders.6 We will assess both of those risks below.
A. Contempt
   Our research to date has revealed only one decision by the Supreme
Court dealing with the precise question presented here. See Pennsylva­
nia v. Wheeling & Belmont Bridge Co., 59 U.S. (18 How.) 421 (1855). In
 Wheeling the Court was asked to decide whether certain individuals
should be held in contempt of an order that the Court itself had issued
enjoining construction of a bridge over the Ohio River. Congress had
subsequently enacted a statute declaring that this bridge was a lawful
structure. The defendants, in reliance upon that Act, had proceeded
with construction of the bridge without first applying to the Court for
dissolution of the outstanding injunction. On the motion for contempt,
the Court held that the Act of Congress was valid, that the previous
injunction could not be enforced in futuro, that the motion for con­
tempt was addressed to the discretion of the Court, and that under all
the circumstances of the case the motion should be denied.
   Wheeling does not hold that a court is powerless to punish defiance
of an outstanding court order that has been rendered unenforceable by
subsequent legislation. Indeed, the implication of the decision is to the
contrary; and in that respect the decision is fully consistent with the
settled rule, applicable in a different context, that the contempt power
may be used to punish noncompliance with court orders that are erro­
neous or unlawful at the time they are issued. See United States v.
United Mine Workers of America, 330 U.S. 258 (1947); Walker v. City of
Birmingham, 388 U.S. 307 (1967). The Supreme Court has deemed this
to be a necessary rule, given the need for a means of enforcing compli­
ance with orderly process. The courts must be able to ensure that
aggrieved litigants will appeal erroneous orders and not resort to self­
   6It goes without saying that (he executive’s belief in the legality of any given executive action in
response to the hostage crisis will not in itself prevent a court from deciding that the action is or was
unlawful. If the underlying issue is justiciable and can be brought before a court with jurisdiction to
decide it, there is always the risk that the court will rule against the G overnm ent.

                                                  278
 help. Nonetheless, it is our view that Wheeling does stand for the
 proposition that the usual considerations supporting the rule of compli­
ance do not justify a contempt citation where the conduct in question
has been clearly mandated or authorized by subsequent legislation.7 To
be sure, the rule of compliance is not suspended by any and every
change in circumstance, see Spangler, supra; but Wheeling suggests that
it may be suspended by a clear and specific change in law.
   In our opinion, the case at hand is an appealing case for application
of the Wheeling rule. It is more appealing than was Wheeling itself. The
builders of the bridge over the Ohio could have easily applied for
dissolution of the injunction before resuming their work; yet the Court
thought it inappropriate to hold them in contempt for boldly proceed­
ing in the face of the outstanding order. This result cut against the
traditional policy. The demand for compliance with orderly process has
generally rested upon the assumption that existing procedures for the
modification or correction of outstanding orders will be adequate to the
exigencies of the case, that they will fully vindicate the rights in
question, and that individuals can therefore be expected to comply with
them without resorting to self-help. At the same time, the courts have
recognized that in unusual cases the usual procedures may be inad­
equate; and in these cases the courts have been willing to countenance
refractory conduct that would be held contumacious in other contexts.
For example, where the rights of an individual would be wholly lost by
complying with an outstanding order, his refusal to comply with it
pending appeal is not punishable as contempt. There is no justification
for requiring aggrieved litigants to comply with procedures that defeat
the right at issue. See United States v. Dickinson, 465 F.2d 496, 511-12
(5th Cir. 1972), citing Walker v. City of Birmingham, supra, Malloy v.
Hogan, 378 U.S. 1 (1964), Gelbard v. United States, 408 U.S. 41 (1972).
   As we have said, Congress has given the President emergency power
to nullify these attachments and to authorize transfer of the attached
property. The President may attempt to use that power to resolve the
hostage crisis. If, however, the government and the banks, to imple­
ment his order, must first pursue the usual judicial procedure for modi­
fication of outstanding attachments (a procedure involving motions,
arguments, further litigation, and inevitable delay), then the President
may be unable to use his power effectively to achieve the purpose
authorized by Congress. If settlement of the crisis requires expedition
and certainty, not uncertainty and the law’s delay, we believe it would
be an abuse of discretion for a court to use the contempt power to
penalize noncompliance with an attachment order that has been ren-
   7 We do not believe our reliance on Wheeling is undercut by the evident distinction betw een
supervening congressional action and supervening executive action taken under authority conferred by
a preexisting statute (IE E PA ). We believe that the assertion o f supervening pow er under IE E P A
would be entitled to as much respect by the judicial branch as supervening action by Congress.

                                              279
dered unenforceable by lawful action under IEEPA. Continuing
compliance with the order, followed by a motion for dissolution, argu­
ment, and further litigation, would defeat the emergency power that
Congress has sought to create.
   Finally, we observe that IEEPA itself provides that “[n]o person
shall be held liable in any court for or with respect to anything done or
omitted in good faith in connection with the administration of, or
pursuant to and in reliance on, this [Act], or any regulation, instruction,
or direction issued under this [Act].” 50 U.S.C. § 1702(a)(3). Without
expressing any view regarding the general question of the power of
Congress to deprive the courts of a means of enforcing compliance
with their own process, we are of the opinion that, in the face of this
expression of congressional intent, the use of the contempt power to
punish necessary and otherwise lawful action under IEEPA would be
an abuse of discretion, and, therefore, unlikely. We have found one
state court case, involving the Trading with the Enemy Act and the
Federal Reserve Bank of New York, that supports this conclusion. See
 Von Opel v. Von Opel, 154 N.Y.S. 2d 616 (Sup. Ct. 1956). We have
found no decision to the contrary.
B. Civil Liability
   The second risk of proceeding in the face of outstanding attachment
orders is the risk of civil liability. If the attached funds are released
before the courts have determined that the President has power to
nullify the attachments, the United States, the Federal Reserve Bank or
both will almost certainly be asked to account to the creditors for any
damages they sustain as a result of the release. If the courts ultimately
decide (1) that IEEPA does not authorize the President to nullify these
attachments and (2) that the attachments are otherwise valid under the
Foreign Sovereign Immunities Act (FSIA), the question will arise
whether the courts can go further and hold either the United States or
the Federal Reserve Bank accountable to the attachment creditors for
loss of the pre-judgment security.
   We have several observations to make on this point. We shall discuss,
first, the potential liability of the Federal Reserve Bank and, second,
the potential liability of the United States.
1. Liability of Federal Reserve Bank
  As a matter of practice, the Federal Reserve Bank of New York has
not resisted the attempts of domestic creditors to attach foreign funds
on deposit with that Bank. See, e.g., National American Corp. v. Federal
Republic of Nigeria, 448 F. Supp. 622 (S.D.N.Y. 1978). Whether this
practice is necessary, we do not know. It is obviously in harmony with
the interests of domestic creditors, including the member banks of the
                                   280
 New York district. As you may know, these banks elect a majority of
 the directors of the Board of Directors of the Reserve Bank.
   Under New York law the garnishee of a valid attachment order is
 accountable to the attachment creditor for any losses sustained by the
 creditor as a result of release of the attached property in violation of
 the order. See Fitchburg Yarn Co. v. Wall & Co., 361 N.Y.S.2d 170
 (App. Div. 1974). Whether this rule, or an analogous federal rule, will
be enforced against the garnishee of a federal attachment order issued
by a district court in New York under Rule 64 of the Rules of Civil
 Procedure, we cannot say. We have found no case on point. We can
say, however, that if federal law (Rule 64) permits a third party to be
subjected to garnishment in the first instance, it is a small thing to
conclude that the third party may then be held to account for any
violation of his duty as garnishee. The imposition of the duty implies a
remedy for its breach. Again, we have not found a case on point; but
we know of no reason why, as a general proposition, the garnishee of a
federal attachment order issued under Rule 64 of the Rules of Civil
Procedure cannot be subjected to civil liability for violation of the
order.
   What is the rule where the garnishee is a Federal Reserve Bank?
Federal Reserve Banks are the tools of the Federal Reserve System,
but they are corporate entities, they are owned by their shareholders,
and they can “sue and be sued.” The relevant statutes and the case law
contain no hint that they enjoy general immunity from suit or liability
for the wrongs they commit in the conduct of their business. Indeed,
the relevant jurisdictional statute assumes that they can and will be
subject (in federal court) to “suits of a civil nature at common law or in
equity.” See 12 U.S.C. § 632. This statute grants them a special immu­
nity from prejudgment remedies in cases in which they themselves are
parties defendant, but it does not provide them with immunity from
execution on final judgment. Moreover, the shareholders of Federal
Reserve Banks (the private “member” banks of the Federal Reserve
System) are, by statute, responsible “individually” for all the “contracts,
debts and engagements” of the Reserve Banks. See 12 U.S.C. § 502
(emphasis added). If a private national bank can be held civilly liable
for wrongful release of attached funds, we find no clear indication that
a Federal Reserve Bank can or should be accorded a different treat­
ment.
   We have expressed the view that a presidential order nullifying these
attachments would be lawful. We think the Federal Reserve Bank
could not incur liability to any attachment creditor for making a trans­
fer that is authorized by a lawful presidential order. Moreover, there is

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 a serious question whether these attachments are valid in any event.8 If
 the attachments are invalid, then as a matter of general law the gar­
 nishee can incur no liability to the attachment-creditors for transferring
the attached funds. See, e.g., United Collieries v. Martin, 248 Ky. 808, 60
S.W. 2d 125 (1933); Smith, Thorndike & Brown Co. v. Mutual Fire Ins.
Co., 110 Wis. 602, 86 N.W. 241 (1901); Henkel v. Bi-Metallic Bank, 13
Colo. App. 410, 58 P. 336 (1899). Finally, even if the attachments are
valid and even if they cannot be revoked under IEEPA, it is clear that
the attachment creditors will sustain actual damage from a present
transfer of the attached funds only if (1) their underlying claims are
good on the merits, (2) their claims are not extinguished by a claims
settlement,9 (3) their claims can be reduced to final judgment, and
(4) the relevant law, including FSIA, would permit those judgments to
be paid out of the attached funds. With regard to the last point, we
note that the present IEEPA regulations prevent any final judgment
from being paid out of this property. Our view is that the creditors will
be unable to demonstrate that they have been damaged by any transfer
of the attached property unless they can show that this prohibition
against the payment of final judgments could not lawfully be sustained
in the future to bar the perfection (through execution on final judg­
ment) of the mere provisional interests now being asserted in this
property through attachment.
   In all, there are so many contingencies standing in the way of
garnishee liability in this case that it is difficult to make a realistic
assessment of the actual risk. At the same time, given the amount of
money in question, it is obvious that any risk of liability militates
strongly in favor of a conservative approach to the transfer question, all
other things being equal. This brings us to our final point.
   Congress knew that any significant presidential action under IEEPA
would upset existing legal relations, and give rise to claims and counter­
    8 Invoking a creative legal theory in his interpretation of FSIA , Judge D uffy has recently held that
these attachm ents are not barred by FSIA and are otherw ise valid. We disagree w ith the holding.
 FSIA provides that the assets of a foreign governm ent are immune from prejudgm ent attachm ent
unless the foreign governm ent explicitly waives its immunity. 28 U.S.C. § 1610(d). This statutory
imm unity is subject to existing international agreem ents. 28 U.S.C. § 1609. O ne district court has held
that w hile there has been no explicit w aiver o f imm unity by Iran, the T reaty o f Amity betw een Iran
and the United States, w hich pre-dated FSIA , w aived immunity from attachm ent w ith respect to
m ilitary property. Behring International, Inc. v. Imperial Iranian Air Force, 475 F. Supp. 383 (D .N .J.
 1979). FSIA provides that the assets of a foreign central bank are immune from attachm ent and
execution unless the bank or its parent foreign governm ent explicitly waives immunity. 28 U.S.C.
§ 1611(b)(1). As yet, there are no published opinions addressing the immunity of foreign central banks
from attachm ent under FSIA . T w o district courts have held, how ever, that FSIA renders the assets of
the governm ent o f Iran immune from attachm ent because Iran has not w aived immunity from
attachm ent. See Reading & Bates Corp. v. National Iranian Oil, 478 F. Supp. 724 (S.D.N.Y. 1979) and
E-Systems, Inc. v. Islamic Republic o f Iran, 491 F. Supp. 1294, (N .D . Tex. 1980).
    9 W e do not think that the acquisition o f a provisional interest in foreign property through
attachm ent immunizes the underlying claim from the governm ent's pow er to settle that claim as part
o f an overall claims settlement. T he provisional interest is only as good as the underlying claim. It dies
if the claim dies. T he pow er o f the governm ent to extinguish claims through settlement is clear. See
M em orandum for the A ttorney G eneral dated Septem ber 16, 1980, “ Presidential A uthority to Settle
the Iranian Crisis" [p. 248, supra\

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claims among persons subject to the presidential order. Recognizing
that these persons might be reluctant to rely on the order for fear of
liability, Congress took care to preserve in IEEPA the exculpatory
provision that had long been present in the Trading with the Enemy
Act. We have referred to that provision above.
   We know of no reason why this provision cannot be read for what it
says. In our opinion, it would exculpate a garnishee (a mere stake­
holder) who has relied in good faith upon a lawful presidential order
authorizing release of attached funds under IEEPA. Would the excul­
pation be effective if the presidential action were ultimately held to be
unlawful? The whole purpose of this provision is to resolve legal
doubts and to encourage persons to rely upon emergency presidential
action under IEEPA wherever they can do so in good faith. That
purpose would be wholly frustrated if the provision were read to
expose compliant individuals to liability for presidential mistakes. If
individual liability were to depend in the end on the legality of what
the President has done, no one with significant exposure would comply
willingly with any presidential order until all the legal questions pre­
sented by the action had been definitively resolved. In our opinion,
Congress has undertaken to prevent that impasse. Congress has immu­
nized good faith compliance with emergency orders under IEEPA
whether the orders are mistaken or not. We have found one district
court opinion, Garvan v. Marconi Wireless Tele. Co., 275 F. 486 (D.N.J.
1921), that supports this conclusion.
2. Liability of the United States
   Either IEEPA authorizes nullification of these attachments, or it does
not. If it authorizes nullification, there is a possibility that the United
States may incur a constitutional liability as a result of nullification, i.e.,
a liability imposed by the Fifth Amendment, which requires the United
States to pay compensation when it “takes” private property for public
use. That liability would provide a basis for an action by the creditors
against the United States in the Court of Claims. We have expressed
the view, however, that nullification of these attachments under
IEEPA will not constitute a taking of private property in the Fifth
Amendment sense.
   Paradoxically, if IEEPA does not authorize nullification, the risk of
constitutional liability is even smaller. As a general proposition, unau­
thorized executive action that destroys or harms private interests in
property does not subject the United States to liability for a taking
under the Fifth Amendment. See, e.g., Hooe v. United States, 218 U.S.
322 (1910); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579
(1952); 42 Op. Att’y Gen. 441, 445-46. To be sure, unauthorized action
may be tortious, and it may subject the executive officer himself to
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 individual liability; 10 but it generally does not give rise to a constitu­
 tional claim against the government itself.
    Is there any other basis for liability? The Federal Tort Claims Act is
a possibility. It makes the United States liable for “tort claims” arising
from the wrongful acts or omissions of officers and employees of the
United States in certain circumstances. See 28 U.S.C. § 2674. But Con­
gress has expressly excepted from the provisions of that Act “[a]ny
claim based upon an act or omission of an employee of the Govern­
ment, exercising due care, in the execution of a statute or regulation,
whether or not such statute or regulation be valid, or based upon the
exercise or performance of the failure to exercise or perform a discre­
tionary function or duty on the part of a federal agency or employee of
the government, whether or not the discretion involved be abused.” 28
U.S.C. § 2680(a). In our opinion, this express exception to the Tort
Claims Act would be fully applicable in the case presented here,
whether or not the President’s action is ultimately approved by the
courts.11
    Aside from the question of tort claims, we think it very doubtful that
any other statute—IEEPA itself, Rule 64, the organic legislation estab­
lishing the Federal Reserve Bank, etc.—can be construed to grant a
right of action against the United States in these circumstances. Such a
grant must be made with specificity. See United States v. Testan, 424
U.S. 392, 400 (1976). Absent a contract or a claim for the return of
money paid by the claimant to the government, there can be no private
right to money damages in a suit against the United States unless, a
federal statute “can fairly be interpreted as mandating compensation by
the Federal Government for the damage sustained.” Id. at 400, citing
Eastport S.S. Corp. v. United States, 372 F.2d 1002-09 (Ct. Cl. 1967).
We know of no federal statute that specifically grants a right of action
against the United States for wrongful release of attached funds by a
Federal Reserve Bank or “mandates” compensation by the United
States for the damages sustained by the attachment creditors.
    Finally, there is at least a theoretical possibility of liability based on
contract. It is clear, of course, that the United States can be held to
account in a Court of Claims for damages resulting from a breach of an
express contract and a contract implied in fact. Over the years, creative
lawyers have been able to exploit this potential liability by arguing
    10 W e believe that in this case, how ever, the executive officer would be relieved of liability by the
exculpatory provision in IEE PA .
    11 T he Federal T ort Claims A ct has always contained a separate, express exception for claims
arising out of the adm inistration o f the T rading w ith the Enem y A ct. See 28 U.S.C. § 2680(e). When
Congress created IE E P A , lifting it from the Trading w ith the Enem y A ct, it neglected to amend this
provision to include IE E P A within the term s of the traditional exception. We think this was an
innocent oversight. W e find nothing in the relevant legislative history that suggests that Congress
intended to subject the United States to liability for the mistakes made by officers and agencies o f the
United States in the adm inistration o f IE E P A w hile preserving sovereign immunity w ith respect to
mistakes made under the identical provisions o f the T rading w ith the Enem y A ct. In any case, the
general exception contained in 28 U.S.C. § 2680(a) applies to action under IE E P A , in our view.

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where all else fails that their claims rest upon implied “promises” of
one kind or another. We do not know what express or implied repre­
sentations the Federal Reserve Bank or the organs of the government
may have made to the creditors in the present case, or what consider­
ation the creditors may have advanced in return; but we do know that
the government has formally and expressly represented from the very
start, in the blocking regulations themselves, that the authorization for
these attachments may be withdrawn, and the government has ex­
pressly declined to provide assurance that the attached funds will ever
be available to satisfy any final judgments. It seems to us that -these
formal representations leave relatively little room for a successful claim
that the government has somehow promised to keep these funds secure
for the creditors’ benefit. We do not know all the facts, but. we see little
risk of a successful contract claim against the government itself.
                                          John M . H arm on
                                      Assistant Attorney General
                                       Office of Legal Counsel




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