President's IEEPA Authority Upheld

From JURIST:

The US Second Circuit Court of Appeals [official website] Thursday upheld [opinion text, PDF] the constitutional authority of the US president to regulate financial transactions with foreign countries involving the United States. The court rejected a claim by a Jordanian man, Osameh Al Wahaidy [profile], that former President George H.W. Bush [official profile] improperly invoked the International Emergency Economic Powers Act [PDF] to enforce a series of executive orders after Iraq invaded Kuwait in 1990. The orders made it illegal for a US person to transfer funds [JURIST report] to anyone in Iraq. Wahaidy argued that the power to create new criminal offenses belongs to Congress alone. In 2003, Wahaidy pleaded guilty to willfully trying to violate and evade executive orders by sending $100,000 to Iraq [US DOJ press release] in October and November 1999 and in February 2000.

Comments

[Mike Deal]

The 2nd Circuits reliance on Touby is contrary to the Supremes decision this year in the Oregon suicide case. Trade lawyers will find it interesting that in the Oregon case, which held that the AG's interpretation of the drug statute that was part of the regulatory regime considered in Touby was not entitled to deference, and relied heavily on U.S. v. Mead as a general principle of admin law. In Mead the Supremes affirmed the CIT's and Federal Circuit refusal to give Chevron deference to a classification determination by Customs.

Without having seen the briefs, I don't want to draw any conclusions because judges often ignore the argument that is actually made in order to reach the result they want, but the opinion suggests that the defense may have failed to cite the frequent criticisms of Curtiss-Wright and the fact that the portions quoted by Justice are widely recognized as dicta, which, as Justice Souter observed in another recent case, is not precedent. There are earlier pre-TWEA embargo cases in which the courts gave the Executive's determination little deference (e.g., the Lincoln case, arising out of the Philipine insurgency)and performed their own review of the facts. The defense should probably have argued that this use of IEEPA violated the rulemaking provisions of the APA.

Which is too bad, because it is certain that the Dept. of Justice will misrepresent this case as general authority for the constitutionality of IEEPA, when in fact it should be confined to its facts.