Few Iran-related matters get litigated before the Supreme Court – the last being in 2009, when the Court decided the case of Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Elahi, 129 S.Ct. 1732 (2009).[1]

Last week, though, the Court granted review in Bank Markazi v. Peterson – Iran-related litigation that touches on U.S. economic sanctions in ways that previous cases never quite did (absent Dames & Moore v. Regan).

The central question in Markazi is whether the passage of § 502 of the Iran Threat Reduction Act (TRA) of 2012 violates separation-of-powers principles by having the effect of determining the outcome in the present case. Under § 502 of the TRA, Congress identified certain assets in which Bank Markazi (i.e., Iran’s Central Bank) had a beneficial interest and that were the subject of post-judgment enforcement proceedings. § 502 of the TRA stated that these assets were “subject to execution or attachment in aid of execution in order to satisfy” certain outstanding terrorism-related judgments against Iran.

Plaintiffs, who are victims or family of the victims of the 1983 Marine barracks bombing in Beirut, Lebanon (attributed to Iran via Hezbollah), hold billions of dollars in outstanding judgments against Iran – all of which have been left unsatisfied due to the difficulties in discovering Iranian assets located in the United States or otherwise under U.S. jurisdiction. Congress interceded on their (and only their) behalf in 2012 following several failed attempts to attach the property of Bank Markazi that had been identified in a Citibank account in New York.

Under § 502 of the TRA, all that Congress had left for the courts to do was to determine whether the identified assets were assets “held in the [U.S.] for a foreign securities intermediary doing business in the United States, whether the assets were “blocked” assets under U.S. law, and whether the assets were “equal in value to a financial asset” held abroad by a financial securities intermediary on behalf of Bank Markazi. According to Bank Markazi, this had the effect of dictating the outcome of a case pending before the courts, which could render the legislative provision an impermissible intrusion on the judiciary’s proper role – at least according to Court precedent (United States v. Klein).

None of the lower courts bit on that argument, however. Faced with the imminent turnover of roughly $1.7 billion in Iranian-owned assets, Bank Markazi thus filed for review before the Supreme Court. On April 6, 2015, the Court acted by inviting the Solicitor General to file a brief in the case “expressing the views of the United States.” In particular, the Court likely sought to hear the U.S.’s views as to the foreign policy implications of any decision permitting the execution of the judgment against the Iranian central bank.

On August 19, 2015, the Solicitor General filed its amicus curiae brief, in which it sided with the views of the Peterson plaintiffs. According to the Government’s brief, the U.S. believed that the lower court had “correctly rejected [Markazi’s contention that § 502 of the TRA violated separation-of-powers principles],” finding no important international considerations that would justify the Court’s further review.

Nonetheless, despite the Solicitor General’s full-throated defense of the lower court’s opinion and the lack of any conflict in the circuit courts, the Supreme Court granted certiorari to Markazi on October 1, 2015. No oral argument is scheduled yet, but the expectation is for January or February next year.

There is a bit of surprise that the Court took this case. Having given the Solicitor General the opportunity to pronounce on the Executive’s position and finding that the Executive took the same position as the undivided circuit courts, the Court was expected to reject Markazi’s petition. The fact that the Court chose to hear the case suggests that some of the Justices have lingering concerns over the propriety of legislative action that determines the outcome of a case pending before the judiciary. While neither of the lower courts accepted the argument that this case was analogous to that of Klein, the Court seems keen on taking a closer look to make sure that they are not depriving the federal courts of their constitutional role.

The outcome is an important one, too – and not just in light of the constitutional considerations. If the Peterson plaintiffs are successful in attaching and executing against Markazi’s assets held in the Citibank account, then § 502 of the TRA might prove a legislative provision worthy of emulation – especially as Congress has been keen on ensuring that U.S. victims of Iranian-sponsored terrorism are compensated for their damages sustained. The problem, however, will be what it always has been: finding Iranian assets within the U.S. or otherwise under U.S. jurisdiction available for attachment and execution in the first place.

[1] Since then, the Court has had the opportunity to deny review of four separate cases: Asemani v. Islamic Republic of Iran, 130 S.Ct. 112 (2009); Bank Melli Representative Office v. Weinstein, 133 S.Ct. 21 (2012); Rubin v. Islamic Republic of Iran, 133 S.Ct. 23 (2012); and Islamic Republic of Iran v. McKesson Corp., 133 S.Ct. 1582 (2013).