               Presidential Authority to Settle Claims of
                   the Hostages and Their Families
T he President may agree to a settlement with Iran w hereby any tort claims of the
   hostages and their families against Iran would be extinguished, without w orking a
   taking for a public purpose within the Just Compensation Clause o f the Fifth Am end­
   ment. This conclusion is reinforced by the difficulty of identifying loss to the hostages
   and their families as a result o f a claims settlement effected to secure their release, and
   the unlikelihood o f their being able to recover in tort against Iran in any event in light
   o f the noncommercial tort provision in the Foreign Sovereign Immunities Act, 28
   U.S.C. § 1605(a)(5).
                                                          October 14, 1980
  MEMORANDUM OPINION FOR THE ATTORNEY GENERAL
   This responds to your request for our views on the authority of the
President, pursuant to a general settlement of the present controversy
with Iran that effects the release of the hostages, to extinguish tort
claims the hostages and their families may wish to assert against the
government of Iran. Our memorandum to you of September 16, 1980,
regarding presidential authority to settle the Iranian crisis explores the
President’s claims settlement authority in detail. [See p. 248 supra.]
Rather than repeat that discussion here, we will advert to its conclu­
sions insofar as they affect the present discussion. We conclude here
that the President has authority to extinguish the claims of the hostages
and their families.
   The President’s authority over claims of our nationals against foreign
governments is well summarized in Restatement (Second) of Foreign
Relations Law of the United States § 213 (1965):
       The President may waive or settle a claim against a for­
       eign state based on the responsibility of the foreign state
       for an injury to a United States national, without the
       consent of such national.
Presidents have often exercised this power to espouse and settle the
claims of our citizens; these claims have often included tort claims for
personal injury or death. See id., Reporter’s note to § 212.
   Our earlier memorandum concluded that an exercise of this presiden­
tial authority to settle a claim for less than face value would not
constitute a taking of private property within the meaning of the Just
Compensation Clause of the Fifth Amendment to the Constitution.
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Nevertheless, we noted the existence of dicta to the contrary in two
Court of Claims decisions, principally Gray v. United States, 21 Ct. Cl.
340 (1886). Those dicta suggested that if the President settles a claim
for less than “value” for unrelated foreign policy purposes, a taking of
property for public use occurs. Whatever the current vitality of the
Gray dicta, the question at hand is distinguishable, because these claims
are held by persons whose benefit is a prime purpose of the Administra­
tion’s negotiations to settle the crisis—the hostages themselves and their
families. When a settlement is reached, no court will be in a position to
determine whether release could have been secured without settlement
or extinction of the tort claims in return.
   The foregoing conclusion regarding the difficulty of identifying loss
to the hostages and their families as a result of a claims settlement is
reinforced by analysis of their prospects for tort recovery absent an
agreement. For several reasons, it seems unlikely that they could re­
cover damages against the government of Iran in court. First, the
Foreign Sovereign Immunities Act, 28 U.S.C. § 1605(a)(5), only allows
the courts to award tort damages “against a foreign state for personal
injury or death, . . . occurring in the United States.” Torts to the
hostages have not occurred in the United States. Regarding claims by
their families for such torts as intentional infliction of emotional dis­
tress, it could be argued that the statute is ambiguous regarding
whether it is enough for the injury to occur here even if the wrong
does not. The Act’s legislative history, however, emphasizes that the
immunity of foreign states for their “public” acts as opposed to “com­
mercial or private” acts is to be maintained, and that the exception for
torts in the United States “is directed primarily at the problem of traffic
accidents,” suggesting that actionable wrongs must occur here. H.R.
Rep. No. 1487, 94th Cong., 2d Sess. 7, 20 (1976). Thus it seems unlikely
that the hostage families could recover against Iran in American courts.
Morever, tort claimants cannot reach any Iranian assets in the United
States without a license from the government because of the blocking
order, and our earlier memorandum makes it clear that access to
blocked assets cannot be a matter of legal right. Finally, if the hostages
and their families were to resort to a foreign forum in which Iranian
assets might be found, they would discover that doctrines of sovereign
immunity of a foreign state are general in international law.
   We also note that Congress is currently considering a bill (H.R. 7085)
that would provide hostages and their families a variety of benefits in
compensation for their travail.* If these benefits may fairly be viewed
as compensation for the loss of their tort claims, it would be even more
difficult to conclude that any constitutional taking has occurred.
 *N   o t i :.:   The bill cited was eventually enacted as Pub. L.   N o.   96-449, 94 Stat. 1967 (1980). Ed.

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Recognition of the prospect of a claims settlement in the legislative
history would be helpful in this regard.
                                      John M . H arm on
                                  Assistant Attorney General
                                   Office of Legal Counsel




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