Bank Markazi, the separation of powers, and the ghosts of Hamilton and Scalia

The Treasury Department announced today that it was replacing President Jackson on the $20 bill with Harriet Tubman (good riddance, Old Hickory!), but leaving Alexander Hamilton on the $10 bill.  That is welcome news to those of us who greatly admire Hamilton (get on board with Hamilton, conservatives!) and who thought that his exclusion would have been an injustice (and who think that Jackson has long been overrated).  There is no great monument to Hamilton in Washington, D.C., though Hamilton was a chief architect of the institutions of government we see there.  Ron Chernow properly said that if Washington was the Father of the Country, and Madison the Father of the Constitution, then Hamilton is the Father of American Government (personally, I think, as much as anything, Broadway probably helped save Hamilton today, but that’s another discussion).

In particular, Hamilton offered a comprehensive defense of an independent judiciary, as persuasive as any of the founding generation.  He said in Federalist 78 that the judiciary would be the “least dangerous” of the branches because it has the power of neither the sword nor the purse.  He described courts as “bulwarks of a limited Constitution against legislative encroachments” and sought to provide for their “independent spirit.”  Indeed, all of the essays from Publius on the judicial department were the contributions of Hamilton.

Today, the scope of judicial power, vis-a-vis that of the Congress, was the subject of the Supreme Court’s decision in the barely-noticed case of Bank Markazi v. Peterson.  American nationals sought monetary judgments against the Iranian government.  These were folks who had been victims of Iranian terrorist acts, or who were the estate representatives or surviving family members of victims of Iranian terrorism.  To make it easier for these plaintiffs to get the damages they sought, Congress enacted the Iran Threat Reduction and Syria Human Rights Act of 2012.  The law designates assets of Bank Markazi (the Central Bank of Iran) and makes those assets available to satisfy the judgments against Iran.  Does such a law violate the separation of powers?

The Court today said it does not.  Congress, the Court said, is permitted to amend the law even during pending litigation and even when the amendment will affect the outcome of the litigated case.  To reach its decision, the Court took a narrow view of a Civil War-era case, United States v. Klein, which has long confused and frustrated lawyers (and law students).  Although there is language in Klein saying that Congress cannot dictate the rule of decision in a pending case, the Court, citing the Hart & Wechsler federal courts treatise, said that language cannot be taken at “face value” because other cases have allowed Congress to enact retroactively applicable, outcome-altering legislation that courts must apply.  And it was those other cases that received the Court’s continued validation today, notably, Robertson v. Seattle Audubon Society, which upheld a change in the law that applied to pending cases and determined the outcome of those cases.

But it was the Chief Justice’s dissent, joined by Justice Sotomayor, that invoked Hamilton.  In a tour de force on the separation of powers between the legislature and judiciary, the Chief said that the statute was tantamount to Congress playing the role of judge and deciding the case before it.  Without serious question, Congress changed the law just for these proceedings and only so that the plaintiffs could win.  But the “judicial power is vested in the judicial branch alone,” the Chief wrote.  He cited Hamilton’s descriptions of a “truly distinct” judiciary and the “complete independence of the courts of justice,” as well as the Constitution’s provision for specific means of securing judicial independence – salary protection and life tenure.  But those safeguards “would have been meaningless,” the Chief said, “if Congress could simply exercise the judicial power directly.”

The Chief Justice’s dissent is especially worthy of a full read.  One senses while reading it that the Chief is invoking not just the spirit of Hamilton, but the spirit of his departed colleague Antonin Scalia, who was a fierce defender of the separation of powers.  The Chief cites Scalia’s work in both Plaut v. Spendthrift Farm (holding that Congress cannot pass a law that reopens final judgments of federal courts) and Morrison v. Olson (quoting from Scalia’s “this wolf comes as a wolf” passage there).  Indeed, the dissent is heavy with a Scalian tone about the separation of powers.  At one point, the Chief writes, “I readily concede, without embarrassment, that it can sometimes be difficult to draw the line between legislative and judicial power. . . . but the entire constitutional enterprise depends on there being such a line.”  Sounds a lot like Scalia’s “there are now no lines” from Morrison, doesn’t it?

The Bank Markazi decision will be hailed as a victory for the victims of terrorism.  That it is.  But it also represents an important airing of different viewpoints about how we discern the lines that the Constitution creates between the branches of government.  Both Hamilton and Scalia would have appreciated that debate.


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