UNITED STATES OF AMERICA, APPELLANT V. SPERRY CORPORATION AND
SPERRY WORLD TRADE, INC.

   No. 88-952

   In the Supreme Court of the United States

   October Term, 1988

   On Appeal from the United States Court of Appeals for the Federal
Circuit

   Brief for the Appellant

            TABLE OF CONTENTS
   Question presented
   Opinions below
   Jurisdiction
   Constitutional and statutory provisions involved
   Statement
   Summary of argument
   Argument:
       Congress has the constitutional authority to impose a fee
       upon United States claimants who receive an award from the
       Iran -- United States Claims Tribunal, in order to reimburse
       the United States for the costs it incurs in connection with
       the arbitration and payment of such claims
            I. Section 502 imposes a reasonable "user fee" as an
               incident to the effectuation of the President's
               authority to settle claims against foreign
               governments and Congress's authority to
               regulate commerce with foreign nations
           II. Section 502 does not constitute a taking of private
               property without just compensation
               A. The charging of a reasonable fee to those who
                  utilize or benefit from government services does
                  not violate the Just Compensation Clause of the
                  Fifth Amendment
               B. The deduction of 1 1/2% of tribunal awards paid
                  through the Federal Reserve Bank of New York
                  is a reasonable means of collecting a valid
                  user fee and is not a per se taking analogous
                  to a physical appropriation of property
               C. Appellees had no vested constitutional right to
                  have their claims against Iran adjudicated in
                  United States courts or in a cost-free forum
               D. This Court's "regulatory taking" cases further
                  support the constitutionality of Section 502
          III. Section 502 does not violate the Due Process Clause
               of the Fifth Amendment
           IV. Section 502 does not violate the Origination Clause
               because it is not a "bill for raising revenue" within
               the meaning of that clause
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (J.S. App. 1a-11a) is reported
at 853 F.2d 904, and the opinion of the United States Claims Court
(J.S. App. 12a-25a) is reported at 12 Cl. Ct. 736.  The prior oral
ruling of the Claims Court (J.S. App. 26a-51a) is unreported.

                             JURISDICTION

   The judgment of the court of appeals was entered on August 10,
1988, and the notice of appeal (J.S. App. 52a-53a) was filed on
September 8, 1988.  On November 1, 1988, the Chief Justice extended
the time for docketing the appeal to and including December 7, 1988,
and the jurisdictional statement was filed on that date.  The Court
noted probable jurisdiction on February 21, 1989.  The jurisdiction of
this Court is invoked under 28 U.S.C. 1252.  /1/

           CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED

   1. Article I, Section 7, Clause 1 of the United States Constitution
provides:

         All Bills for raising Revenue shall originate in the House of
      Representatives;  but the Senate may propose or concur with
      Amendments as on other Bills.

   2. The Fifth Amendment of the United States Constitution provides
in pertinent part:

         No person * * * shall * * * be deprived of life, liberty or
      property, without due process of law;  nor shal private property
      be taken for public use, without just compensation.

   3. Section 502 of the Foreign Relations Authorization Act, Fiscal
Years 1986 and 1987, Pub. L. No. 99-93, 99 Stat. 438, 50 U.S.C. 1701
note (Supp. IV 1986), provides:

         (a) DEDUCTION FOR EXPENSES OF THE UNITED STATES.  -- Except
      as provided in section 503, the Federal Reserve Bank of New York
      shall deduct from the aggregate amount awarded under each
      enumerated claim before the Iran-United States Claims Tribunal
      in favor of a United States claimant, an amount equal to 1 1/2
      percent of the first $5,000,000 and 1 percent of any amount over
      $5,000,000, as reimbursement to the United States Government for
      expenses incurred in connection with the arbitration of claims
      of United States claimants against Iran before that Tribunal and
      the maintenance of the Security Account established pursuant to
      the Declarations of the Democratic and Popular Republic of
      Algeria of January 19, 1981.  The Federal Reserve Bank of New
      York shall make the deduction required by the preceding sentence
      whenever the Bank receives an amount from the Security Account
      in satisfaction of an award rendered by the Iran-United States
      Claims Tribunal on the enumerated claim involved.

         (b) DEDUCTION TREATED AS MISCELLANEOUS RECEIPT.  -- Amounts
      deducted by the Federal Reserve Bank of New York pursuant to
      subsection (a) shall be deposited into the Treasury of the
      United States to the credit of miscellaneous receipts.

         (c) PAYMENT TO UNITED STATES CLAIMANTS.  -- Nothing in this
      section shall be construed to affect the payment to United
      States Claimants of amounts received by the Federal Reserve Bank
      of New York in respect of awards by the Iran-United States
      Claims Tribunal, after deduction of the amounts calculated in
      accordance with subsection (a).

         (d) EFFECTIVE DATE.  -- This section shall be effective as of
      June 7, 1982.

                          QUESTION PRESENTED

   The Federal Reserve Bank of New York has been designated to receive
payment of awards by the Iran-United States Claims Tribunal in favor
of United States claimants.  Section 502 of the Foreign Relations
Authorization Act, Fiscal Years 1986 and 1987, Pub. L. No. 99-93, 99
Stat. 438, requires the Federal Reserve Bank to deduct from any such
award 1 1/2% of the first $5 million and 1% of any amount in excess of
$5 million, to reimburse the United States Government for expenses it
incurs in connection with the arbitration and payment of claims of
United States claimants against Iran.  The question presented in the
Jurisdictional Statement is:

   1. Whether Section 502 is unconstitutional on the ground that it
effects a taking of the property of successful United States claimants
before the Tribunal, without payment of just compensation.

   In their Motion to Dismiss or Affirm, appellees defend the judgment
on alternative grounds, which present the following additional
questions:

   2. Whether Section 502 violates the Due Process Clause of the Fifth
Amendment because it has a retroactive effective date of June 7, 1982,
when the Secretary of the Treasury issued an administrative order
imposing a comparable fee under different statutory authority.

   3. Whether Section 502 violates the equal protection component of
the Due Process Clause because it imposes a fee only on successful
United States claimants.

   4. Whether Section 502 violates the constitutional requirement that
"All Bills for raising Revenue shall originate in the House of
Representatives" (Art. I, Section 7, Cl. 1) because the Iran Claims
Settlement Act, of which Section 502 is a part, was added to the
foreign relations authorization bill by the Senate.

                               STATEMENT

   1. a. Appellees are two corporations organized under the laws of
Delaware.  During the 1970s, they were parties to various contracts
with the Government of Iran and its instrumentalities for the lease of
computer systems and the performance of data processing services.  In
1974, appellees established a branch office in Tehran, Iran, in order
to facilitate the conduct of their business in that country.  J.S.
App. 13a.

   On November 4, 1979, "the American Embassy in Tehran was seized and
our diplomatic personnel were captured and held hostage." Dames &
Moore v. Regan, 453 U.S. 654, 662 (1981).  Ten days later, in response
to the taking of the hostages and a threat by Iran to withdraw its
assets from the United States (see 15 Weekly Comp. Pres. Doc. 2117
(Nov. 14, 1979)), the President declared a national emergency pursuant
to the International Emergency Economic Powers Act (IEEPA), 50 U.S.C.
1701-1706 (1976 ed. Supp. III 1979).  The President also issued an
Executive Order blocking the removal or transfer of "all property and
interests in property of the Government of Iran, its instrumentalities
and controlled entities and the Central Bank of Iran which are or
become subject to the jurisdiction of the United States." Exec. Order
No. 12170, 3 C.F.R. 457 (1980), 50 U.S.C. 1701 note (Supp. IV 1986).
See Dames & Moore, 453 U.S. at 662-663.

   On November 15, 1979, the Secretary of the Treasury issued
implementing regulations declaring "null and void" any attachment or
judgment affecting Iranian property that was covered by the blocking
order, unless the attachment or judgment was licensed by the
Secretary.  31 C.F.R. 535.203(e) (1980).  The regulations expressly
provided that any such license could be amended, modified, or revoked
at any time.  31 C.F.R. 535.805 (1980).  On November 26, 1979, the
Secretary granted a general license authorizing specific judicial
proceedings against Iran.  31 C.F.R. 535.504(a) (1980).  A clarifying
regulation, issued approximately three weeks later, stated that this
license authorized "prejudgment attachments," but not "the entry of
any judgment or of any decree or order of similar or analogous
effect." 31 C.F.R. 535.418, 535.504(b)(1) (1980).  See Dames & Moore,
453 U.S. at 663.

   Several months after the President blocked Iranian assets in the
United States, appellees withdrew all of their non-Iranian personnel
from Iran as a result of increasing hostility toward American business
interests in that country.  /2/ In July 1980, appellees filed suit
against Iran and a number of its instrumentalities in the United
States District Court for the District of Columbia seeking a total of
$18 million in damages for past-due computer rentals, conversion of
assets that Iran allegedly had prevented appellees from removing from
that country, and interference with business relationships.  On
October 24, 1980, appellees obtained a pre-judgment attachment of
certain Iranian assets located in the United States.  Sperry Corp. v.
Islamic Republic of Iran, No. CA-80-1614 (D.D.C. Oct. 24, 1980).  /3/

   b. After these events -- and after the break in diplomatic
relations between Iran and the United States and the loss of American
lives in a military operation to rescue the hostages -- the United
States and Iran entered into an agreement on January 19, 1981.  The
agreement took the form of the adherence by the two governments to two
declarations of the Government of Algeria, commonly referred to as the
"Algiers Accords." See Declaration of the Government of the Democratic
and Popular Republic of Algeria;  Declaration of the Government of the
Democratic and Popular Republic of Algeria Concerning the Settlement
of Claims by the Government of the United States of America and the
Government of the Islamic Republic of Iran, both reprinted in 19
Bureau of Public Affairs, U.S. Department of State, Selected Papers
2-5 (Mar. 12, 1981) (J.A. 29-43).

   In general terms, the Algiers Accords provided for the release of
the American hostages, the unfreezing of Iranian assets in the United
States, and the resolution of claims by the nationals of each party
against the government of the other, as well as claims between the two
governments.  As relevant here, the Accords stated that a "purpose of
both parties" was "to terminate all litigation as between the
Government of each party and the nationals of the other, and to bring
about the settlement and termination of such claims through binding
arbitration" (J.A. 30).  The United States therefore undertook "to
terminate all legal proceedings in United States courts involving
claims of United States persons and institutions against Iran and its
state enterprises," and "to nullify all attachments and judgments
obtained therein" (J.A. 30).  Dames & Moore, 453 U.S. at 665.

   The Accords further provided for the establishment at The Hague of
an international arbitral tribunal, known as the Iran-United States
Claims Tribunal, to hear and render "final and binding" decisions that
are enforceable in the courts of any nation under its laws (J.A. 38,
41).  The Tribunal's jurisdiction includes claims based on contract,
debt, expropriation and certain other grounds (J.A. 38).  Any such
claims were required to be filed with the Tribunal within one year of
the entry into force of the Accords or within six months of the
appointment of the President of the Tribunal, whichever was later
(J.A. 40).  The United States was obligated to bring about the
transfer of all Iranian assets that were held by banks in this country
or by United States banks abroad and that previously had been blocked
by the President (J.A. 32-35).  Of those assets, up to $1 billion were
to be placed in a "Security Account," for the purpose of securing the
payment of, and paying, the claims of United States claimants against
Iran.  Iran was required to maintain a minimum balance of $500 million
in the Security Account until all Tribunal awards against Iran had
been paid (J.A. 33-34).  See Dames & Moore, 453 U.S. at 664-665).  /4/
The Accords required each government to designate an agent at The
Hague to represent it at the Tribunal and to receive notices or other
communications directed to it or its nationals (J.A. 41).  Finally,
the Accords provided that "(t)he expenses of the Tribunal shall be
borne equally by the two governments" (J.A. 41).

   President Carter issued a series of Executive Orders on January 19,
1981, to implement the Algiers Accords.  Those Executive Orders
revoked all licenses permitting the exercise of "any right, power, or
privilege" with regard to Iranian assets;  nullified all non-Iranian
interests in such assets acquired after November 14, 1979;  and
directed persons holding blocked Iranian financial assets to transfer
them to the Federal Reserve Bank of New York as fiscal agent of the
United States, for disposition as directed by the Secretary of the
Treasury.  Exec. Order Nos. 12277-12281, 3 C.F.R. 105-113 (1982), 50
U.S.C. 1701 note (Supp. IV 1986).

   On February 24, 1981, a little more than one month after his
inauguration, President Reagan issued an Executive Order in which he
"ratified" the Executive Orders issued by President Carter on January
19, 1981;  "suspended" all claims that may be presented to the * * *
Tribunal";  and provided that such claims "shall have no legal effect
in any action now pending in any court of the United States." Exec.
Order No. 12294, 3 C.F.R. 139 (1982), 50 U.S.C. 1701 note (Supp. IV
1986).  The Order provided that a claim would be discharged for all
purposes when the Tribunal either awarded some recovery and that
amount was paid, or the Tribunal determined that no recovery was due.
Dames & Moore, 453 U.S. at 665-666.

   The Federal Reserve Bank of New York is the fiscal agent of the
United States in carrying out the Algiers Accords.  Under this
arrangement, awards made by the Tribunal in favor of United States
claimants are paid from the Security Account to the Federal Reserve
Bank, which then pays the awards to the claimants.  J.S. App. 13a;  47
Fed. Reg. 25243 (1982).  /5/

   c. This Court sustained the President's actions in Dames & Moore,
which was decided in July 1981.  The Court expressly held that the
President's revocation of pre-judgment attachments of Iranian assets
that were obtained pursuant to the Treasury license did not constitute
a taking of property because those attachments were revocable and "in
every sense subordinate to the President's power under the IEEPA" (453
U.S. at 674 n.6).  Following the Court's decision in Dames & Moore,
more than $2 billion in frozen Iranian assets held by banks in the
United States were marshalled for disposition as required by the
Algiers Accords;  of that amount, $1 billion were deposited in the
Security Account, and the remainder was transferred to Iran.  /6/
Thereafter, appellees filed a claim against Iran with the Tribunal,
seeking payment of past-due computer rentals and reimbursement for
assets that Iran allegedly had not permitted appellees to remove from
that country.  Sperry Corp. & Sperry World Trade, Inc. v. Islamic
Republic of Iran, Case No. 205 (filed Jan. 11, 1982).  See J.S. App.
3a, 14a.

   2. On June 7, 1982, before the Federal Reserve Bank of New York
paid any Tribunal awards to United States claimants, the Department of
the Treasury issued a "directive license" requiring the Federal
Reserve Bank to deduct 2% from each award certified by the Tribunal,
and to pay that amount into the Treasury "to reimburse the United
States Government for costs it incurred for the benefit of U.S.
nationals who have claims against Iran." 47 Fed. Reg. 25243 (1982).
The directive license was issued pursuant to the Independent Offices
Appropriations Act (IOAA), now codified at 31 U.S.C. 9701 (Supp. IV
1986), which authorizes each federal agency to promulgate regulations
establishing a fair charge for services provided by that agency, based
on the costs to the government, the value of the services, and the
public policy and interests to be served.  See Skinner v. Mid-America
Pipeline Co., No. 87-2098 (Apr. 25, 1989), slip op. 10-11;  National
Cable Television Ass'n v. United States, 415 U.S. 336 (1974).  /7/

   3. On July 8, 1982, approximately one month after the Treasury
Department issued the directive license, appellees and Iran formally
entered into a settlement agreement and filed a request with the
Tribunal for an "Award on Agreed Terms" to give effect to the
settlement.  See note 21, infra.  On September 14, 1982, the Tribunal
entered the requested award on agreed terms.  Sperry Corp. & Sperry
World Trade, Inc. v. The High State Council of Informatics of the
Islamic Republic of Iran, AWD No. 10-205-2 (J.A. 20-21).  In that
award, the Tribunal "accepted and recorded" the settlement, stating
that it was "binding on both parties, and consequently (Iran) is
obligated to pay (appellees) the sum of * * * ($2,800,000), which
obligation shall be satisfied by payment out of the Security Account"
(J.A. 21).  /8/ When the Federal Reserve Bank of New York received
payment of the Tribunal's award in favor of appellees, it deducted the
2% charge ($56,000), deposited that amount in the Treasury pursuant to
the directive license, and paid the balance of $2,744,00 to appellees.
 J.S. App. 3a, 14a.

   4. On December 17, 1982, appellees filed this action in the United
States Claims Court (J.A. 1, 9-18).  Appellees contended, inter alia,
that the deduction of the 2% percent charge from the amount of the
Tribunal's award in its favor violated the IOAA and the Fifth
Amendment of the United States Constitution.  On May 1, 1985, the
Claims Court rendered an oral decision concluding that the Treasury
Department's directive license violated the IOAA (J.S. App. 26a-51a)
because it imposed a fee for services furnished not only by that
Department, but also by the Departments of State and Justice (id. at
35a-37a), and because the administrative record did not sufficiently
show the basis for the calculation of the government's expenses or the
apportionment of those expenses to Tribunal awards.  (id. at 37a-47a).
 /9/

   5. Congress reacted immediately to the Claims Court's oral ruling
by enacting previously proposed legislation that specifically
authorized the assessment of a fee against successful United States
claimants before the Tribunal.  /10/ Thus, on August 16, 1985, before
the Claims Court entered a final judgment based on its oral ruling,
Congress enacted the Iran Claims Settlement Act as Title V of the
Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, Pub.
L. No. 99-93, Sections 501-505, 99 Stat. 437-439, 50 U.S.C. 1701 note
(Supp. IV 1986).  Section 502(a) of that Act requires the Federal
Reserve Bank of New York to deduct from a Tribunal award "an amount
equal to 1 1/2 percent of the first $5,000,000 and 1 percent of any
amount over $5,000,000, as reimbursement to the United States
Government for expenses incurred in connection with the arbitration of
claims against Iran before that Tribunal and the maintenance of the
Security Account established pursuant to (the Algiers Accords)" (99
Stat. 438).  /11/ The statutory requirement was made effective as of
June 7, 1982 (Section 502(d), 99 Stat. 438), the date on which the
Treasury Department had issued the directive license under the IOAA.

   The legislative history shows that Section 502 was intended to
reimburse the United States for such costs as the payment of one-half
of the annual expenses of the Tribunal;  one-half of the management
fees paid to the depository of the Security Account;  expenses of the
Federal Reserve Bank of New York in marshalling Iranian assets for
transfer to the Security Account and in receiving and distributing the
payment of awards made by the Tribunal;  the State Department's costs
in maintaining offices in Washington and at The Hague to facilitate
the filing of claims, service of Tribunal documents, and presentation
of positions on major issues of common importance to United States
claimants;  and efforts by the Departments of the Treasury and Justice
to ensure compliance with the Algiers Accords.  See Iran Claims
Legislation:  Hearing on S. 771 and S. 1166 Before the Senate Comm. on
Foreign Relations, 99th Cong., 1st Sess. 14-15, 26-32 (1985) (1985
Hearing);  1983 Hearing at 4-5, 9, 13-16;  1982 Hearing at 4-5, 6,
13-17, 27.  The legislative record further shows that as of 1985, the
United States was contributing $900,000 annually for the maintenance
of the Security Account and $2 million annually for the operations of
the Tribunal, and that the State Department and other agencies were
spending approximately $1 million annually to provide assistance to
United States claimants.  1985 Hearing at 14-15, 26.  /12/

   6. a. The enactment of Section 502 furnished express statutory
authorization for the deduction of 1 1/2% of the Tribunal's award to
appellees ($42,000), and thereby mooted appellees' statutory challenge
to assessment of a fee in that amount.  /13/ However, appellees argued
that Section 502 is unconstitutional under the Just Compensation, Due
Process and Origination Clauses of the Constitution.  /14/ The Claims
Court rejected appellees' constitutional challenges and dismissed this
suit (J.S. App. 12a-25a).

   In rejecting appellees' challenge to Section 502 under the Just
Compensation Clause (J.S. App. 15a-19a), the Claims Court observed
that virtually every regulation, tax, or fee diminishes the value of
the affected property to some extent (id. at 17a).  In the court's
view, the diminution in the value of the Tribunal's award in this case
did not render Section 502 unconstitutional.  The court relied on a
number of factors:  (i) the economic impact of the 1/1/2% fee is "very
small" and is far less substantial than the regulatory burdens this
Court has sustained in its taking cases, including Keystone Bituminous
Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987) (J.S. App. 16a-17a);
(ii) the deduction was neither novel nor unexpected, because during
the preceding 35 years Congress has authorized the United States to
deduct 5% of awards made by the Foreign Claims Settlement Commission
as reimbursement for the United States' costs of adjudicating and
settling claims against foreign governments (id. at 17a-18a, citing 22
U.S.C. 1621-1644m);  (iii) the fee did not interfere with reasonable
investment-backed expectations, because United States nationals doing
business abroad necessarily assume the risk that the President may be
required to exercise his established power to resolve their claims
against a foreign government (J.S. App. 17a);  and (iv) appellees
"significantly benefited from the Tribunal," whose activities are
supported by the fee (ibid.).

   Turning to appellees' other challenges, the Claims Court held that
Section 502 does not contravene the Due Process Clause, because
Congress had a rational basis for choosing to impose the fee on
successful claimants but not on unsuccessful claimants (J.S. App. at
19a-21a) and because Congress's decision to give Section 502 a
retroactive effective date of June 7, 1982, served to ensure that all
claimants would be treated alike (id. at 23a-25a).  The Claims Court
also held that the Senate's addition of the Iran Claims Settlement Act
(including the provision for assessment of the fee) to the foreign
relations authorization bill passed by the House of Representatives
did not violate the Origination Clause.  Relying on this Court's
decision in Twin City Bank v. Nebeker, 167 U.S. 196, 202-203 (1897),
the Court held that Section 502 is outside the scope of that Clause
because it provides for the collection of a fee as reimbursement for
specific services rendered by the government, rather than the raising
of revenue to support the government generally (J.S. App. 21a-23a).

   b. The court of appeals reversed, holding that Section 502 is
unconstitutional because it effects a taking of private property
without payment of just compensation (J.S. App. 1a-11a).  The court
recognized that "(i)n the perhaps usual case where governmental
activities must be assessed to see if they so impair private property
rights as to amount to a taking," a court's inquiry is guided by three
factors:  "'(1) "the economic impact of the regulation on the
claimant";  (2) "the extent to which the regulation has interfered
with distinct investment-backed expectations";  and (3) "the character
of the governmental action"'" (J.S. App. 5a, quoting Connolly v.
Pension Benefit Guaranty Corp., 475 U.S. 211, 255 (1986), and Penn
Central Transportation Co. v. New York City, 438 U.S. 104, 124
(1978)).  But it noted that this multi-factor analysis is inapplicable
-- and that a per se approach instead must be followed -- where there
is a physical occupation or appropriation of property (J.S. App.
5a-6a, citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S.
419 (1982)).  The court of appeals regarded the 1 1/2% deduction
mandated by Section 502 as a permanent "appropriation" of the $42,000
in question, thereby triggering the per se approach of Loretto (J.S.
App. 6a-7a).  In the court's view, Section 502 provides for "seizing a
percentage of the awards of the Tribunal" to pay "for the resolution
of the hostage crisis," and it believed that the government should pay
compensation when it uses private claims as "'bargaining chips'" to
further the Nation's foreign policy goals (id. at 8a, quoting Dames &
Moore, 453 U.S. at 691 (Powell, J., concurring in part and dissenting
in part)).

   The court of appeals acknowledged that appellees did not contend
that a taking occurred on the theory that the amount awarded by the
Tribunal was less than what they would have received if the President
had not entered into the settlement with Iran and their suit against
Iran had proceeded in federal district court.  The court instead
focused more narrowly on the deduction of the 1 1/2%, and it found a
constitutional violation because that fee would not have been assessed
against whatever judgment might ultimately have been rendered by the
district court if appellees had been permitted to proceed with their
suit (J.S. App. at 7a).  The court reasoned as follows:  (i) appellees
"had a sufficient forum and remedy in the district court, the remedy
secured by the pre-judgment attachment";  (ii) "(t)he Tribunal award
was the substitute for a judgment by a United States court";  (iii)
"the Tribunal fully paid (appellees') claim against Iran";  and (iv)
therefore, the 1 1/2% diminution in the value of the substitute award
constitutes a taking (id. at 8a).

   The court of appeals had "no quarrel" with the proposition that
"those who trade and travel abroad rely principally upon the
relationships between our Government and others as the foundation for
all rights" and that United States nationals therefore benefit from
arrangements such as the Algiers Accords (J.S. App. 8a-9a).  But the
court did not believe that appellees realized any benefit from the
Tribunal in this case, because "prior to the Accords (they) had
secured the attachment of Iranian assets sufficient to cover (their)
eventual award and, had the President not suspended American claims,
would have had no need for the Tribunal" (id. at 8a-9a).  The court
distinguished this case from Shanghai Power Co. v. United States, 4
Cl. Ct. 237 (1983), aff'd mem. 765 F.2d 159 (Fed. Cir.) (Table), cert.
denied, 474 U.S. 909 (1985), which found no Just Compensation Clause
violation in the President's settlement of claims against People's
Republic of China (PRC) for considerably less than the amount the
plaintiff sought, on the ground that the American claimant there had
no other recourse against the PRC (J.S. App. 9a).  The court similarly
distinguished the consistent practice of Congress in directing the
deduction of a percentage of awards made under the International
Claims Settlement Act of 1949 (see 22 U.S.C. 1626(b)), because in the
court's view the settlement agreements in those instances likewise
resolved claims for which the claimants had no effective recourse
against the foreign government concerned (J.S. App. 10a).  /15/

                          SUMMARY OF ARGUMENT

   I. The 1 1/2% fee assessed against successful claimants pursuant to
Section 502 of the Foreign Relations Authorization Act is one aspect
of the comprehensive and complex regime established by the Algiers
Accords for the resolution of the claims of United States nationals
against Iran.  The enactment of Section 502 falls squarely within
Congress's enumerated powers.  Congress has the authority under the
Foreign Commerce Clause (Art. I, Section 8, Cl. 3) to charge a fee to
those who engage in foreign commerce, in order to defray the costs
incurred by the government and others in connection with the
activities of those against whom the fee is assessed.  See Head Money
Cases, 112 U.S. 580 (1884).  The assessment of a fee to support the
work of the Tribunal also is a "necessary and proper" measure for
"carrying into Execution" the power vested in the President by the
Constitution (and confirmed by this Court in Dames & Moore v. Regan,
453 U.S. 654 (1981)) to settle the claims of United States nationals
through the Tribunal.  See Art. I, Section 8, Cl. 18.  It is entirely
appropriate for Congress to pass on these costs to the persons who
realize a distinct and tangible benefit from the Tribunal's work.

   II. Contrary to appellees' contention, the power to assess the fee
that is conferred on Congress by Article I of the Constitution is not
divested by the Just Compensation Clause of the Fifth Amendment.

   A. The 1 1/2% deduction from the payment of the Tribunal's award in
appellees' favor is a "user fee" assessed against those United States
claimants who have successfully invoked the jurisdiction of the
Tribunal.  This Court has repeatedly held that the Fifth Amendment,
including its Just Compensation Clause, does not require a legislature
to tailor general revenue measures, such as taxes, to the benefits
conferred on the taxpayer or the costs incurred by the government on
his behalf.  A fortiori, the Just Compensation Clause does not bar
Congress from imposing a fee that is reasonably tailored to reimburse
the government for the expenses of a program that redounds to the
special benefit of those who pay the fee.

   B. The court of appeals erred in holding that the deduction of the
1 1/2% fee from Tribunal awards constitutes a permanent physical
"appropriation" of the funds in question, thereby triggering the per
se taking analysis of Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419 (1982).  The Federal Reserve Bank's deduction of the
$42,000 from the amount it received from the Security Account was
merely the means by which the government collected the fee for
services rendered, just as an employer's withholding of income taxes
from an employee's pay is the means by which the government collects
those taxes.  Because the fee itself is valid, the provision for
withholding it from the payment of awards raises no distinct
constitutional problem.  For the same reason, this case is wholly
different from Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S.
155 (1980).  There, unlike in this case, the financial exaction was
not a fee for services, and no other governmental justification was
offered for it.  The per se taking analysis of Loretto and Webb's
Fabulous Pharmacies is especially inapt in this case because appellees
and other claimants voluntarily invoked the jurisdiction of the
Tribunal.  As a result, like the utility pole owners in FCC v. Florida
Power Corp., 480 U.S. 245 (1987), they voluntarily submitted to the
regulatory measures associated with the claims-settlement mechanism,
including assessment of a fee, and the amount of the fee is not
"confiscatory" (see 480 U.S. at 251-253).

   C. The court of appeals also based its finding of a taking on the
premise that appellees had a fully adequate remedy by virtue of the
suit they had filed against Iran in federal district court in July
1980 and the pre-judgment attachments they obtained in that suit, and
that they therefore realized no benefit from the claims-settlement
process established by the Algiers Accords.  However, the court of
appeals' reliance on the attachments is inconsistent with this Court's
holding in Dames & Moore that the voiding of the attachments as part
of the settlement with Iran did not give rise to a taking claim
because the attachments were "in every sense subordinate to the
President's power under the IEEPA" to void the attachments and
transfer the assets out of the United States to resolve the crisis
(453 U.S. at 674 n.6).  Moreover, suits by claimants in United States
courts offered no certain means of recovery, because many claimants
encountered jurisdictional and procedural obstacles to their suits
against Iran.  It is true that if appellees' suit in federal district
court had been permitted to proceed to judgment, there would have been
no statutory authorization for deduction of a 1 1/2% fee from that
judgment.  But appellees had no property right to have their claims
adjudicated in a United States court or in a cost-free forum.  To the
contrary, laws regulating judicial jurisdiction and procedure, like
other regulatory measures, are subject to amendment by the
legislature, and amendments may be applied to pending cases.

   Appellees are also wrong in asserting that they realized no benefit
from the claims-settlement process established by the Algiers Accord.
The Award on Agreed Terms that was entered by the Tribunal at their
request must be given "final and binding" effect under the Accords,
and it was enforceable against Iran in the courts of any nation under
its laws -- attributes that a settlement agreement alone would not
have had.  Entry of the award by the Tribunal also enabled appellees
to receive payment out of the Security Account, through the special
offices of the Federal Reserve Bank, thereby eliminating the risks,
costs, and delays that might have been associated with an effort to
collect directly from Iran.  Appellees are also wrong in their
assertion that no fee should be charged because the President treated
their claims as mere "bargaining chips" to obtain the release of the
hostages.  Although the President would have been free under IEEPA to
transfer all frozen Iranian assets directly to Iran in return for
release of the hostages, he instead used those assets as leverage to
persuade Iran to settle the claims of United States nationals and to
deposit some of the frozen assets in a Security Account for the
payment of meritorious claims.

   D. The insubstantiality of appellees' taking claim also is apparent
if Section 502 is viewed from the broader perspective of the overall
effect that the claims-settlement mechanism had on appellees' claims,
taking into account the three factors the Court has found to be of
particular significance in its "regulatory taking" cases.  Applying
those factors in this case:  (1) the economic effect of the 1 1/2% fee
is very small;  (2) assessment of the fee did not interfere with
reasonable investment-backed expectations, because those who engage in
foreign commerce necessarily assume the risk that the President might
find it necessary to exercise his claims-settlement authority and
because fees have typically been assessed against successful claimants
when he does so;  and (3) the character of the government action -- a
"user fee" -- is far removed from the concerns of the Just
Compensation Clause.

   III. Appellees' due process objections to Section 502 are without
merit.  Congress had a rational basis for giving Section 502 a
retroactive effective date of June 7, 1982.  That was the date on
which the Treasury Department issued the directive license under the
Independent Offices Appropriations Act, which imposed a user fee of
2%.  Making Section 502 effective as of that time served to cure the
technical defects the Claims Court had identified in the directive
license and to assure that all successful claimants would be treated
alike.  Similarly, Congress had a rational basis for assessing a fee
only against successful claimants:  imposition of a filing fee on all
claimants might have deterred some claimants from seeking to resolve
their claims through the Tribunal;  Congress reasonably could
determine that only successful claimants realized a sufficient benefit
from the Algiers Accords to justify a requirement that they pay a
portion of the costs;  and charging only successful claimants is
consistent with past practice.

   IV. The Senate's addition of Section 502 to the foreign relations
authorization bill passed by the House did not violate the
constitutional requirement that "All Bills for raising Revenue shall
originate in the House of Representatives" (Art. I, Section 7, Cl. 1).
 That Clause has consistently been construed to apply only to bills
that raise revenues for the general operation of the government, not
to bills that impose a fee to reimburse the government for specific
services rendered or for the cost of administering a regulatory
program.

                               ARGUMENT

   CONGRESS HAS THE CONSTITUTIONAL AUTHORITY TO IMPOSE A FEE UPON
UNITED STATES CLAIMANTS WHO RECEIVE AN AWARD FROM THE IRAN-UNITED
STATES CLAIMS TRIBUNAL, IN ORDER TO REIMBURSE THE UNITED STATES FOR
THE COSTS IT INCURS IN CONNECTION WITH THE ARBITRATION AND PAYMENT OF
SUCH CLAIMS

   I. SECTION 502 IMPOSES A REASONABLE "USER FEE" AS AN INCIDENT TO
THE EFFECTUATION OF THE PRESIDENT'S AUTHORITY TO SETTLE CLAIMS AGAINST
FOREIGN GOVERNMENTS AND CONGRESS'S AUTHORITY TO REGULATE COMMERCE WITH
FOREIGN NATIONS

   Section 502 of the Foreign Relations Authorization Act for Fiscal
Years 1986 and 1987 requires the Federal Reserve Bank of New York to
deduct and pay into the United States Treasury 1 1/2% of an award that
is made by the Iran-United States Claims Tribunal in favor of a United
States claimant and is paid out of the Security Account established by
the Algiers Accords.  The 1 1/2% fee is but one aspect of the
comprehensive and complex regulatory regime established by the Algiers
Accords, implementing international and financial agreements,
Executive Orders, Treasury Department regulations, the procedural
rules of the Iran-United States Claims Tribunal, and the Iran Claims
Settlement Act itself -- all for the purpose of resolving claims of
United States nationals against Iran and its governmental entities.
These measures were instituted to serve governmental interests of the
most compelling order.

   A. The Algiers Accords of course were intended in part to bring
about the release of the Americans who had been taken hostage at the
United States Embassy in Tehran more than a year earlier.  But the
Algiers Accords are also a concrete manifestation of the persistent
efforts by the United States to afford its nationals an opportunity
for resolution of their claims against Iran, which totalled several
billion dollars.  In fact, the President made it clear when Iranian
assets in the United States were frozen on November 14, 1979, that the
blocking order was issued "in response to reports that the Government
of Iran (was) about to withdraw its funds" from the jurisdiction of
the United States and that the purpose of the order was "to ensure
that claims on Iran by the United States and its citizens are provided
for in an orderly manner" (15 Weekly Comp. Pres. Docs. 2117 (Nov. 14,
1979)).  In this respect, the President's actions were consistent with
the historic use of blocking orders and one of the principal purposes
of IEEPA:  "to put control of foreign assets in the hands of the
President" (Propper v. Clark, 337 U.S. 472, 493 (1949)), and thereby
to give him leverage to bring about a settlement of individual claims,
which in turn could be paid out of the frozen assets.  See Dames &
Moore, 453 U.S. at 673-674;  Banco Nacional de Cuba v. Sabbatino, 376
U.S. 398, 412, 431 (1964);  Zittman v. McGrath, 341 U.S. 446, 454
(1951).

   This Court, in Dames & Moore, sustained the various actions of the
President under the Algiers Accords, which fell into two discrete
categories:  (i) lifting the blocking order, revoking the license for
United States claimants to obtain pre-judgment attachments of Iranian
assets, and directing the disposition of the frozen Iranian assets,
including to the Security Account;  and (ii) providing for the
arbitration of claims by United States claimants against Iran by the
Tribunal, with meritorious claims to be paid out of the Security
Account.  The Court held that the former actions were expressly
authorized by IEEPA (453 U.S. at 669-674) and that the settlement of
claims, through arbitration or otherwise, is a long-established aspect
of the President's foreign relations powers under Article II of the
Constitution (id. at 675-683).

   The Court there recognized that claims by the nationals of one
country against the government of another are often "sources of
friction" between the two sovereigns.  Dames & Moore, 453 U.S. at 679;
 see also United States v. Pink, 315 U.S. 203, 225 (1942).  When such
claims are "kept alive," they may imperil the existence of amicable
diplomatic relations, or indeed of any relations at all, and may "vex
the peace of nations" (Pink, 315 U.S. at 232-233;  Ozanic v. United
States, 188 F.2d 228, 231 (2d Cir. 1951)).  In order to eliminate
these sources of friction, the President, on behalf of the United
States, has often entered into agreements with foreign sovereigns
settling the claims of their respective nationals.  Dames & Moore, 453
U.S. at 679;  Belk v. United States, 858 F.2d 706, 709 (Fed. Cir.
1988).  Typically, the United States has agreed to renounce or
extinguish the claims of its nationals against the foreign sovereign
in exchange for a lump-sum payment or the establishment of arbitration
procedures for individualized adjudication of the claims.  Dames &
Moore, 453 U.S. at 679-680 (citing 10 lump-sum settlement agreements
entered into by the President since 1952);  79 Cong. Rec. 969-971
(1935) (listing 40 Executive Agreements entered into between 1842 and
1931 that provided for arbitration of claims against foreign
sovereigns).

   Congress has endorsed and facilitated the President's efforts to
resolve claims against foreign governments and to establish procedures
for distributing funds to United States claimants.  For example,
Congress in 1935 created a Special Mexican Claims Commission to
determine claims against the Republic of Mexico and enter final awards
on behalf of United States claimants.  Special Mexican Claims
Commission Act, ch. 55, Sections 1-12, 49 Stat. 149-151.  More
recently, Congress enacted the International Claims Settlement Act of
1949, 22 U.S.C. 1621-1664m, which establishes the Foreign Claims
Settlement Commission and charges it with making final and binding
decisions on claims by United States nationals against foreign
governments.  Claims found by the Commission to be meritorious may
then be paid on a pro rata basis out of a lump sum settlement with the
foreign nation, should the President subsequently negotiate one.  See
22 U.S.C. 1623(a);  Dames & Moore, 453 U.S. at 680.

   B. When the President enters into a settlement of the claims of
United States nationals against a foreign government, he not only
furthers the interests of the Nation as a whole in removing sources of
friction with another nation;  he also substantially furthers the
private interests of individual claimants in obtaining an adjudication
of their claims and payment of those claims that are found to be
meritorious.  This point is illustrated by experience under the
Algiers Accords.  The President reported to Congress in his most
recent semi-annual report under IEEPA that as of September 30, 1988,
payments out of the Security Account to successful United States
claimants totalled $1.073 billion.  24 Weekly Comp. Pres. Docs. 1502,
1503 (Nov. 15, 1988).  Moreover, as of September 30, 1988, Iran had
replenished the Security Account on 21 occasions when its balance fell
below the $500 million minimum required by the Algiers Accords.  Ibid.
 /16/ Experience has thus confirmed this Court's observation in Dames
& Moore that "there does appear to be a real 'settlement' here" (453
U.S. at 687).

   In recognition of the distinct benefit conferred on private
claimants by the government's resolution of their claims against
foreign governments, Congress repeatedly has provided for the United
States to deduct 5% from payments of awards by the Foreign Claims
Settlement Commission out of lump-sum settlements negotiated by the
President.  That amount serves to reimburse the United States for
expenses incurred in the Commission's adjudication of the claims and
the President's settlement with the foreign nation.  See e.g., 22
U.S.C. 1641a(a), (Bulgaria, Hungary, Rumania, Italy, and the Soviet
Union), 1644g (East Germany), 1645h(b) (Vietnam).  The 1 1/2% fee
deducted from awards by the Iran-United States Claims Tribunal is
consistent with this pattern (although Section 502 assesses a fee at a
much lower rate), and Congress in fact drew upon the experience under
the International Claims Settlement Act when it enacted Section 502.
See 1985 Hearing at 15, 27-28, 71, 106-107;  see also 1983 Hearing at
8, 26, 28;  1982 Hearing at 28-29, 31.  There can be no doubt that
Congress has the constitutional authority to assess such a fee.

   The Iran Claims Settlement Act, including Section 502, represents
an exercise by Congress of its power "To regulate Commerce with
foreign Nations" (Art. I, Section 8, Cl. 3) -- in this case, by
ratifying the mechanism instituted by the President for resolving and
paying the claims of United States nationals who engaged in foreign
commerce with Iran and for recovering the costs incurred by the United
States in supporting that mechanism.  The Iran Claims Settlement Act
also is a "necessary and proper" means for "carrying into Execution"
the power that is vested in the President by the Constitution (and was
confirmed by this Court in Dames & Moore) to settle claims of United
States nationals against a foreign nation.  See Art. I, Section 8, Cl.
18.

   It is well established that, in exercising its power to regulate
foreign commerce, Congress may impose a fee upon those engaging in
that commerce, in order to defray the government's costs of regulating
the activity or societal costs generated by it.  For example, in the
1880s, Congress imposed upon owners of ships bringing passengers into
the United States a fee of 50 cents for every passenger who was not a
citizen of the United States.  The purpose of the fee was to defray
the expense of regulating immigration and furnishing care to
immigrants arriving in the United States.  This Court sustained the
fee in the Head Money Cases, 112 U.S. 580, 589-590 (1884), finding
that the burden imposed on the ship owners was "the mere incident of
the regulation of commerce -- of that branch of foreign commerce which
is involved in immigration" -- and that "(t)he money thus raised * * *
constitutes a fund raised from those who are engaged in the
transportation of these passengers, and who make profit out of it, for
the temporary care of the passengers whom they bring amongst us" (id.
at 595-596).  Thus, "it was competent for Congress to impose this
contribution on the ship owner engaged in that business" (id. at 596).

   Here, appellees likewise elected to engage in foreign commerce by
entering into trade with Iran, a foreign sovereign (J.S. App. 13a).
They necessarily did so with the awareness that the conduct of their
activities and the resolution of any ensuing disputes might be
affected by events beyond their control in Iran and might come to
depend upon the fabric of relationships maintained by the United
States with Iran and upon measures undertaken by the two nations if
those relationships deteriorated.  In particular, appellees and other
United States nationals entered into and performed their contracts
with the Iranian Government in full recognition of the possibility
that the President might later find it necessary -- in the interests
of appellees and others doing business with Iran, as well as the
Nation as a whole -- to invoke his established authority under the
Constitution to settle any claims arising out of their course of
dealing with Iran.  It is entirely appropriate for Congress to pass a
portion of the costs of the claims-settlement effort through to the
private claimants, both because the measures instituted by the
President redound to the private benefit of individual claimants and
because those measures serve to eliminate the adverse effects that
unresolved private claims may have for the Nation as a whole in its
relations with the foreign sovereign.  Assessment of a fee therefore
represents a reasonable exercise by Congress of its enumerated power
to regulate foreign commerce, as in the Head Money Cases, and its
power under the Necessary and Proper Clause to effectuate the
President's claims-settlement authority under the Constitution.

   Despite the manifest reasonableness of assessing a fee in these
circumstances and Congress's constitutional authority under Article I
to impose it, appellees contend that Section 502 violates specific
limitations on Congress's authority under the Just Compensation, Due
Process, and Origination Clauses of the Constitution.  As we show
below, each of these objections is without merit.

   II. SECTION 502 DOES NOT RESULT IN A TAKING OF PRIVATE PROPERTY
WITHOUT JUST COMPENSATION

   Appellees first contend that Section 502 is unconstitutional
because it results in a taking of private property for a public use,
without just compensation, in violation of the Fifth Amendment of the
Constitution.  Significantly, however, the theory of appellees' taking
claim is not that the $2.8 million awarded by the Tribunal -- or even
the net amount of $2.758 million paid by the Federal Reserve Bank --
is less than the amount they would have been awarded on the same claim
by the United States District Court for the District of Columbia.
Indeed, because appellees entered into a settlement with Iran, rather
than seeking an adjudication by the Tribunal, they are estopped from
contending that the amount awarded by the Tribunal is inadequate.
Instead of focusing their taking claim on the overall result of
submitting their claims to the settlement process established by the
Algiers Accords (compare Duquesne Light Co. v. Barasch, 109 S.Ct. 609
(1989)), appellees address their taking claim narrowly to one
component of that process:  the deduction of 1 1/2% of the payment
made to satisfy an award by the Tribunal.  By urging that the
deduction amounts to a per se taking measured by the amount of the
fee, appellees are effectively contending that the Fifth Amendment's
Just Compensation Clause entirely negates -- by offset -- the
authority of Congress under Article I to impose the fee.  Contrary to
appellees' contention, however, the assessment of a reasonable fee for
the use of the claims-settlement mechanism established by the Algiers
Accords does not violate the Just Compensation Clause.

   A. THE CHARGING OF A REASONABLE FEE TO THOSE WHO UTILIZE OR BENEFIT
FROM GOVERNMENTAL SERVICES DOES NOT VIOLATE THE JUST COMPENSATION
CLAUSE OF THE FIFTH AMENDMENT

   The deduction of 1 1/2% from the amount awarded by the Tribunal in
favor of United States claimants was specifically intended by Congress
to reimburse the United States for the costs it incurs in connection
with the arbitration and payment of the claims of United States
nationals against Iran.  The deduction is, in other words, a "user
fee" assessed against those claimants who have successfully availed
themselves of the extraordinary procedures established by the
President and approved by Congress for their benefit.  Congress may
impose a reasonable charge on those who utilize specific governmental
services (cf. Kadrmas v. Dickinson Public Schools, 108 S.Ct. 2481
(1988)), including an adjudicatory tribunal (see United States v.
Kras, 409 U.S. 434, 448-449 (1973)).  /17/ The assessment of such a
fee in reimbursement for services rendered is not a "taking" of
private property within the meaning of the Just Compensation Clause.

   Although Section 502 imposes a user fee, not a tax, the principles
this Court has announced in sustaining taxes against a Fifth Amendment
challenge are relevant in this setting.  In the case of general
revenue measures, the Court consistently has held that the Fifth
Amendment allows the government wide latitude in setting the
appropriate level of taxation and does not require that the amount of
taxes from a particular activity be reasonably related to the cost or
value of the services provided by the government to that activity or
to the taxpayer.  Commonwealth Edison Co. v. Montana, 453 U.S. 609,
622 (1981);  Pittsburgh v. Alco Parking Corp., 417 U.S. 369, 376-377
(1974);  Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 521-523
(1937);  A. Magnano Co. v. Hamilton, 292 U.S. 40, 47 (1934);
Brushaber v. Union Pac. R.R., 240 U.S. 1, 24-25 (1916);  Billings v.
United States, 232 U.S. 261, 282-283 (1914);  McCray v. United States,
195 U.S. 27 (1904);  cf. Skinner v. Mid-America Pipeline Co., slip op.
11.  In fact, in Penn Central Transportation Corp. v. New York City,
438 U.S. 104 (1978), the Court identified "(e)xercises of the taxing
power" as an "obvious example" of the government's power to "execute
laws or programs that adversely affect recognized economic values"
(id. at 124).  Similarly, in its discussion in Keystone Bituminous
Coal Ass'n v. DeBenedictis, 480 U.S. 470 (1987), of the "reciprocity
of advantage" /18/ that supports certain regulatory restrictions on
the use of property, the Court observed (id. at 491 n.21):

         The Takings Clause has never been read to require the States
      or the courts to calculate whether a specific individual has
      suffered burdens under this generic rule in excess of the
      benefits received.  Not every individual gets a full dollar
      return in benefits for the taxes he or she pays;  yet, no one
      suggests that an individual has a right to compensation for the
      difference between taxes paid and the dollar value of benefits
      received.

   See also Cotton Petroleum Corp. v. New Mexico, No. 87-1327 (April
25, 1989), slip op. 24-26;  Legal Tender Cases, 79 U.S. (12 Wall.)
457, 551 (1870).

   It follows a fortiori from these Fifth Amendment principles
applicable to general revenue measures that the assessment of the
tailored user fee at issue in this case does not violate the Fifth
Amendment.  Congress set the fee at a level that it believed would
sufficiently reimburse the United States for a portion of the
approximately $4 million in expenditures it was expected to incur
annually in connection with the operation of the Tribunal, maintenance
of the Security Account, payment of awards through the Federal Reserve
Bank of New York, and the rendering of assistance to United States
claimants.  Although the Just Compensation Clause would not in any
event require a close correlation between the level of the fee and the
cost of the services, neither the court of appeals nor appellees have
disputed Congress's determination that the fee constitutes "a fair
approximation of the cost of benefits supplied" (Massachusetts v.
United States, 435 U.S. 444, 463 n.19 (1978)).  Moreover, especially
when compared with ordinary taxes, the amount of the fee is, as
appellees concede (Mot. to Dis. or Aff. 14, 17, 19), quite "modest()"
and "minimal," reflecting only a "small percentage()" of Tribunal
awards.  Because the United States is simply passing on the reasonable
cost of a government program that redounds to the special benefit of a
relatively few persons, Section 502 plainly does not "'forc(e) some
people alone to bear public burdens which, in all fairness and
justice, should be borne by the public as a whole.'" First English
Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304,
318-319 (1987), quoting Armstrong v. United States, 364 U.S. 40, 49
(1960).

   B. THE DEDUCTION OF 1 1/2% OF TRIBUNAL AWARDS PAID THROUGH THE
FEDERAL RESERVE BANK OF NEW YORK IS A REASONABLE MEANS OF COLLECTING A
VALID USER FEE AND IS NOT A PER SE TAKING ANALOGOUS TO A PHYSICAL
APPROPRIATION OF PROPERTY

   The court of appeals did not dispute the general proposition that
the United States may charge a fee to those who utilize or benefit
from services furnished by the government and that the imposition of
such a fee does not result in an unconstitutional taking of private
property without payment of just compensation.  The court nevertheless
concluded that deduction of the 1 1/2% fee from the Tribunal's award
before it was paid to appellees constituted a permanent physical
"appropriation" of the $42,000 in question, thereby triggering the per
se taking analysis of Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419 (1982) (J.S. App. 5a-7a).  The court's reliance on
Loretto was mistaken.

   1. The Federal Reserve Bank's deduction of $42,000 from the
aggregate amount of the Tribunal's award was merely the means by which
the United States collected the user fee from appellees, just as an
employer's withholding of income taxes from an employee's pay is the
means by which the government collects those taxes.  See Slodov v.
United States, 436 U.S. 238, 242-244 (1978);  United States v.
American Friends Service Comm., 419 U.S. 7, 10 & n.6 (1974);  Railroad
Co. v. Jackson, 74 U.S. (7 Wall.) 262, 269 (1868).  If the assessment
of a fee for services rendered is constitutional, as it clearly is,
then the deduction of the fee prior to the Bank's distribution of the
award to appellees raises no distinct constitutional difficulties.
Compare Evansville-Vanderburgh Airport Auth. Dist. v. Delta Airlines,
405 U.S. 707, 714-715 (1972);  Robinson v. A & M Electric, Inc., 713
F.2d 608, 609 (10th Cir. 1983).  /19/

   Congress could have provided by statute (or Iran and the United
States could have provided in the Algiers Accords) that a claimant
must pay a fee upon the filing of a claim with the Tribunal or upon
the occurrence of other steps in the claims-resolution process, such
as upon the Federal Reserve Bank's receipt of the payment of an award.
 Under such a scheme, it could not seriously be maintained that the
United States had physically "appropriated" the private property of
the claimant by requiring that the claimant pay the fee before
receiving its payment from the Bank.  The result should be no
different here simply because the United States has chosen to assure
collection of the fee in advance by directing that it be withheld from
the award.

   2. The underlying justification for the exaction also demonstrates
why the court of appeals erred in relying (J.S. App. 6a, 9a) on the
Court's application of a similar per se taking analysis in Webb's
Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980).  In that
case, the purchaser of a corporation deposited funds with the clerk of
the county court to ensure payment of debts owed by the acquired
corporation, and the clerk then deposited the funds in an
interest-bearing account.  When a receiver was appointed for the
acquired company, the clerk paid the receiver the balance of the
principal in the account, less the fee prescribed by another statutory
provision (Fla. Stat. Section 28.24(14) (1977)) for the clerk's
services;  the clerk did not, however, pay the receiver the interest
that had been earned on the deposited funds.  449 U.S. at 156-158.
This Court held that the county's retention of the interest was an
unconstitutional taking of private property for a public use without
payment of compensation (id. at 162-165).  The Court's holding,
however, expressly rested upon the premise that the interest earned on
the deposited funds "was not a fee for services," because "any
services obligation to the county was paid for and satisfied by the
substantial fee charged pursuant to Section 28.24 and described
specifically in that statute as a fee 'for services' by the clerk's
office" (id. at 162 (emphasis added)).  The Court also stressed that
"no police power justification (was) offered for the deprivation" and
that because "(n)either the statute nor appellees suggest(ed) any
reasonable basis to sustain the taking of the interest," the "state
statute ha(d) the practical effect of appropriating for the county the
value of the use of the fund for the period in which it is held in the
registry" (id. at 163, 164).

   In this case, by contrast, the 1 1/2% deduction from the aggregate
amount of a Tribunal award plainly is a fee for services, and unlike
the situation in Webb's Fabulous Pharmacies, there is no separate
statute under which such a fee is also assessed.  Moreover, the
assessment of the fee is an integral component of the overall scheme
for the arbitration and payment of claims against Iran that were a
legitimate subject of governmental regulation.  As a result, and again
in contrast to Webb's Fabulous Pharmacies, the exaction in this case
is independently supported by important governmental interests;  it is
not a naked and unexplained appropriation of a portion of a claimant's
private property for public use.  Indeed, far from undermining the
validity of Section 502, Webb's Fabulous Pharmacies supports the
constitutionality of that provision, because the Court there
recognized that the government may impose a fee on those who invoke an
adjudicatory process furnished by the government.

   3. Application of the per se analysis of Loretto and Webb's
Fabulous Pharmacies would be especially inappropriate in this case for
the additional reason that the Iran Claims Settlement Act imposes a
fee only on persons who voluntarily invoked both the jurisdiction of
the Tribunal and the special payment mechanism furnished by the
Security Account and the Federal Reserve Bank of New York.  As the
Court explained in FCC v. Florida Power Corp., 480 U.S. 245 (1987),
the Court's ruling in Loretto was "'very narrow'" and rested on the
fact that cable television operators were given "compulsory access" to
the private property (480 U.S. at 251, quoting 458 U.S. at 441).
Similarly, in Webb's Fabulous Pharmacies, the creditors of the
acquired company, who were the beneficiaries of the interpleader
account, had no control over the purchaser's decision to deposit the
funds in the registry of the court (cf. 449 U.S. at 161-162).  In
Florida Power, by contrast, the Court stressed that the owners of the
utility poles had voluntarily entered into leases with the cable
operators, and the terms of those leases were then subject to
traditional police-power regulation of commercial transactions, as
long as the rates were not "confiscatory." 480 U.S. at 251-253.  See
also Nollan v. California Coastal Comm'n, 107 S.Ct. at 3146 n.2;
Bowen v. Gilliard, 107 S.Ct. 3008, 3019, 3021 (1987);  Ruckelshaus v.
Monsanto, 467 U.S. 986, 1007 (1984).

   The principles upon which the Court relied in Florida Power are
fully applicable here.  Appellees voluntarily invoked the jurisdiction
of the Tribunal by filing their monetary claims against Iran.
Furthermore, even after appellees and Iran formally agreed to a
settlement, they did not eschew the claims-settlement and payment
apparatus established by the Algiers Accords and implementing
measures, as they were free to do.  Instead, appellees joined with
Iran in requesting the Tribunal to approve the settlement by entering
an award upon agreed terms, and the Tribunal entered such an award.
/20/ Appellees evidently believed that such a formal award by the
Tribunal would have certain advantages.  See pages 38, 39, infra.
Moreover, by the time that appellees and Iran signed the settlement
agreement and requested the Tribunal to enter the award on July 8,
1982, the Treasury Department had already issued the directive license
under the IOAA requiring the Federal Reserve Bank to deduct 2% from
any such award.  /21/ Appellees therefore were fully on notice that a
fee would be deducted when they set the payment process in motion.
Finally, as in Florida Power, it could not seriously be maintained in
this case that the particular fee at issue, which is imposed at a
maximum rate of 1 1/2% of awards to successful United States
claimants, is "confiscatory" in amount.  /22/

   C. APPELLEES HAD NO VESTED CONSTITUTIONAL RIGHT TO HAVE THEIR
CLAIMS AGAINST IRAN ADJUDICATED IN UNITED STATES COURTS OR IN A
COST-FREE FORUM

   The court of appeals also rested its finding of a taking on the
premise that appellees had a fully sufficient remedy in the suit they
had filed against Iran in July 1980 in the United States District
Court for the District of Columbia, secured by the pre-judgment
attachments of Iranian assets they had obtained in that suit in
October 1980.  The court then reasoned that because no fee would have
been deducted from a judgment entered by the district court -- and
because the award by the Tribunal was a substitute for such a judgment
-- any reduction in the amount of the Tribunal's award constitutes a
taking of property for which compensation must be paid.  The court was
also influenced by its further view that appellees received no benefit
from the Tribunal and that the claims of appellees and other United
States nationals were used by the government as "bargaining chips" to
obtain the release of the hostages.  J.S. App. 7a-11a.  This reasoning
is wrong in every respect.

   1. The court of appeals relied principally upon the pre-judgment
attachments as a basis for concluding that appellees had a fully
adequate remedy against Iran in federal court prior to the time that
the United States adhered to the Algiers Accords.  See J.S. App. 7a,
8a, 9a;  cf. Dames & Moore, 453 U.S. at 687.  For several reasons,
however, those attachments furnish no support for a taking claim.

   The President froze Iranian assets in the United States in November
1979 in response to threats by Iran to remove its assets from the
United States.  See page 3, supra.  It is very likely that if the
President had not acted, those assets would not have remained in the
United States, would not have been subject to whatever attachment and
execution were otherwise permitted by United States law, and would not
have been available to fund the Security Account for the ultimate
payment of meritorious claims against Iran.  Appellees' assertion that
they received no assistance from the United States in pressing their
claims against Iran ignores this protection afforded by the President
to all United States claimants at the outset of the hostage crisis,
some eight months before appellees filed suit in federal court.

   Moreover, because appellees obtained their pre-judgment attachments
only after the President had already frozen all Iranian assets in the
United States, they were able to do so only by virtue of the license
issued by the Secretary of the Treasury, which was expressly made
revocable at any time.  In other words, appellees' attachments were at
all times "contingent" and "in every sense subordinate to the
President's power under the IEEPA" to void the attachments and direct
the transfer of the assets out of the United States, in order to
resolve the international crisis.  Dames & Moore, 453 U.S. at 673 &
n.5, 674 n.6.  In fact, the Court specifically held in Dames & Moore
that a claimant "did not acquire any 'property' interest in its
attachments of the sort that would support a constitutional claim for
compensation," and that the President's revocation of the license
permitting such attachments as part of the overall settlement with
Iran did not constitute an unconstitutional taking of property without
compensation.  453 U.S. at 674 n.6.  Appellees' and the court of
appeals' reliance on the pre-judgment attachments as an essential
predicate for the taking claim in this case therefore is flatly
inconsistent with Dames & Moore.

   2. For the reasons just given, the taking question in this case
must be analyzed as if appellees had never obtained pre-judgment
attachments of Iranian assets in the United States.  In the absence of
that security, however, the bare filing of a lawsuit in federal
district court did not afford appellees and other claimants any
certainty that they would ultimately recover on their claims against
Iran.  United States nationals often faced a variety of obstacles to
recovery against Iran in United States courts.  Those obstacles
included arguments by Iran in individual cases that:  (1) contacts
with the United States were insufficient to support jurisdiction over
the particular claim under the Foreign Sovereign Immunities Act of
1976 (FSIA) (28 U.S.C. 1605);  (2) the Act of State doctrine barred
adjudication of expropriation and certain other claims;  (3) the
contracts on which American claimants sought to recover provided for
resolution of disputes in other forums;  /23/ and (4) Iranian assets
that might secure a final judgment were in any event immune from
pre-judgment attachment under the FSIA (28 U.S.C. 1609) because they
belonged to Iran's central bank or military (28 U.S.C. 1611(b)),
because Iran had not explicitly waived its immunity to pre-judgment
attachment, or because the assets did not belong to the Iranian entity
against which the plaintiff had a claim (28 U.S.C. 1610).  See Iran
Asset Settlement:  Hearing Before the Senate Comm. on Banking,
Housing, and Urban Affairs, 97th Cong., 1st Sess. 42 (1981);  1985
Hearing at 70, 123.  In fact, this Court observed in Dames & Moore
that because the Algiers Accords "remov(ed) a number of jurisdictional
and procedural impediments faced by claimants in United States
courts," the government's argument that "the provision of the Claims
Tribunal will actually enhance the opportunity for claimants to
recover their claims * * * cannot be discounted" (453 U.S. at 687
(emphasis in original)).

   That observation is not without force here.  The contracts
underlying a number of appellees' claims against Iran and its
governmental entities provided that all disputes arising out of the
contract would be submitted to arbitration under the rules and
regulations of the International Chamber of Commerce (ICC).  /24/ If
those arbitration provisions were enforceable in United States courts,
appellees had no assurance even prior to the United States' adherence
to the Algiers Accords that they would have a remedy in United States
courts on at least some of their claims.  Compare Mitsubishi Motors v.
Soler Chrysler-Plymouth, 473 U.S. 614, 628-631 (1985);  Scherk v.
Alberto-Culver Co., 417 U.S. 506 (1974);  see 1985 Hearing at 123.

   3. The court of appeals correctly observed that if appellees' suit
against Iran had been permitted to proceed, existing law would not
have provided for a deduction from a judgment of the district court in
appellees' favor.  Appellees, however, had no entitlement to have that
existing law remain in effect and had no property right to that
particular forum, or a cost-free forum, for the adjudication of their
claims.

   This Court has made it clear that statutes providing for the
assessment of taxes and fees, like other regulatory measures, are
subject to revision by Congress.  See Bowen v. Public Agencies Opposed
to Social Security Entrapment, 477 U.S. 41, 55 (1986);  National
Railroad Passenger Corp. v. Atchison, T. & S.F.R.R., 470 U.S. 451,
465-470 (1985);  Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 148
(1982);  Lynch v. United States, 292 U.S. 571 (1934);  Crowell v.
Benson, 285 U.S. 22, 41 (1932);  Silver v. Silver, 280 U.S. 117,
122-123, (1929).  There is no reason why statutes regulating
jurisdiction and judicial procedure, including the assessment of
costs, should be excluded from the application of those principles.
The Just Compensation Clause therefore would not have barred Congress
from enacting a law that imposed a user fee upon plaintiffs who
invoked the jurisdiction of the federal district courts and then
applying that statute to pending cases, including appellees' pending
suit against Iran in the District Court for the District of Columbia.
Compare Bradley v. Richmond School Bd., 416 U.S. 696 (1974);  cf.
Dames & Moore, 453 U.S. at 685.  It follows that the Just Compensation
Clause likewise did not bar Congress from imposing a user fee upon
those persons who invoked the alternative forum of the Iran-United
States Claims Tribunal for adjudication of claims that they previously
had brought (or might have brought) in federal district court.

   Furthermore, it is by no means clear that appellees had a
reasonable expectation prior to the Algiers Accords that all of their
disputes with Iran would be presented to a cost-free forum.  The rules
of the International Chamber of Commerce, to which appellees had
agreed to submit many of their claims, provide for the assessment of
administrative expenses and the costs of the arbitrator against the
parties as the arbitrator sees fit, guided by a table of fees and
costs appended to the Rules.  See ICC, Rules of Arbitration and Court,
art. 20 & Table 9 (1980);  see generally W.L. Craig, et al., note 24,
supra, ch. 3;  T. de Hancock, The ICC Court of Arbitration, 1 J. Int'l
Arb. 21, 31-33 (1984).  Those rules contemplate a range of fees and
costs of between approximately $30,000 and $70,000 for the arbitration
of a claim in which the amount in dispute is $2.8 million, the total
that appellees ultimately recovered from Iran (which was presumably
less than the amount originally in dispute).  As a result, if
appellees' claims against Iran had been submitted to arbitration under
ICC procedures, they might not have avoided the payment of a "user
fee," as they now insist.  And, indeed, the State Department relied on
the precedent of the ICC's provisions for assessment of fees and costs
when it supported the enactment of Section 502 in 1983.  See 1983
Hearing at 8.  /25/

   4. Although appellees reached a settlement with Iran, it simply is
not true, as the court of appeals suggested, that they received no
benefit from the Tribunal and the other features of the
claims-settlement apparatus established by the President pursuant to
the Algiers Accords.  The Accords themselves -- as well as the
availability of the Tribunal as a forum for adjudication of claims and
the availability of the Security Account as a guaranteed source of
payment -- no doubt furnished both an initial impetus and a continuing
incentive for Iran to negotiate concerning the settlement of
appellees' individual claims.  Beyond this, the formal award upon
agreed terms, which the Tribunal entered upon the joint request of
appellees and Iran, furnished appellees with a number of concrete
advantages.  Under the Accords, the award became "final and binding"
upon Iran and was "enforceable against (Iran) in the courts of any
nation in accordance with its laws" (J.A. 40) -- attributes that a
settlement agreement alone would not have had.  Entry of the award
also entitled appellees to receive payment out of the Security
Account, through the channels established by the Federal Reserve Bank
of New York as the fiscal agent of the United States, thereby
eliminating the risks, costs, and delays that might have been
associated with efforts by appellees to collect directly from Iran.
/26/ In addition, the United States' Agent at The Hague has furnished
extensive assistance to United States nationals in preparing for
settlement negotiations and other aspects of the arbitration process,
and the Tribunal itself also furnishes assistance to claimants.  /27/

   5. Finally, the court of appeals, like appellees (see Mot. to Dis.
or Aff. 15, 16, 22), seriously misinterprets the historical record in
asserting that the President treated the claims of appellees and other
United States nationals as nothing more than "bargaining chips" to
obtain the release of the American hostages and that the public
therefore should bear all of the government's expenses associated with
the arbitration and payment of those claims.  The President, of
course, would have had the discretion under IEEPA to transfer all
frozen Iranian assets in the United States directly to Iran solely to
obtain the release of the hostages, without assuring the availability
of any of those assets to pay American claimants and without taking
any steps to resolve those claims.  But that is not what the President
did.  He provided for the retention of $1 billion in Iranian assets in
the Security Account to pay American claims against Iran, secured a
commitment from Iran to replenish that account whenever its balance
dropped below $500 million, and established an international forum for
the adjudication of claims.  The effectiveness of that alternative
forum for claimants is demonstrated by the fact that the Tribunal has
now awarded in excess of $1 billion to United States claimants.  And
of course appellees themselves received an award in an amount ($2.8
million) to which they agreed from the very Tribunal whose role they
now seek to minimize.  Appellees' own experience sufficiently refutes
the suggestion that their claims were effectively traded away as
"bargaining chips."

   D. THIS COURT'S "REGULATORY TAKING" CASES FURTHER SUPPORT THE
CONSTITUTIONALITY OF SECTION 502

   The foregoing submissions are sufficient to sustain the user fee
imposed by Section 502 and to dispose of appellees' taking challenge
in this case.  There accordingly is no need for the Court to resort to
the factors it has identified for purposes of considering taking
challenges to regulatory measures that adversely affect property
interests.

   However, although appellees focus their taking challenge narrowly
on Section 502's directive that a portion of their Tribunal award be
paid into the United States Treasury, the validity of the fee may also
be evaluated in a broader context.  This is so because the fee
appellees challenge was not assessed in isolation, and Section 502
does not direct the seizure of funds that appellees and other
claimants already have in hand.  Section 502 instead assesses a fee as
part of regulatory framework that may be said to regulate a species of
private property -- the claims of United States nationals against Iran
-- by prescribing the manner in which those claims may be presented,
resolved, and paid.  The Court therefore may find it prudent to
consider the reasonableness of the fee from the broader perspective of
the effect that the overall claims-settlement regime established by
the Algiers Accords has had on the claims of appellees and other
United States nationals.  In that event, the Court might choose to
draw, at least for purposes of analogy, on some of the factors it has
considered in its "regulatory taking" cases.

   In "regulatory taking" cases, the Court has not established "'any
"set formula" for determining when "justice and fairness" require that
economic injuries caused by public action must be deemed a compensable
taking.'" Ruckelshaus v. Monsanto, 467 U.S. 986, 1005 (1984), quoting
Kaiser Aetna v. United States, 444 U.S. 164, 175 (1979), and Penn
Central, 438 U.S. at 124.  Rather, "(t)he inquiry into whether a
taking has occurred is essentially an 'ad hoc, factual' inquiry."
Monsanto, 467 U.S. at 1005, quoting Kaiser Aetna, 444 U.S. at 175.
Accord, Pennell v. City of San Jose, 108 S.Ct. 849, 856 (1988);
Gilliard, 107 S.Ct. at 3020;  Hodel v. Irving, 481 U.S. 704, 713-714
(1987);  Connolly v. Pension Benefit Guaranty Corp., 475 U.S. 211, 224
(1986).  The judicial inquiry, however, is guided by three factors the
Court has found to be of "'particular significance":  (1) "the
economic impact of the regulation on the claimant";  (2) "the extent
to which the regulation has interfered with distinct investment-backed
expectations";  and (3) "the character of the governmental action."'"
Gilliard, 108 S.Ct. at 3020, quoting Connolly, 475 U.S. at 224-225,
and Penn Central, 438 U.S. at 124.  Consideration of those factors
here strongly confirms the conclusion that Section 502 does not effect
an unconstitutional taking.

   First, as the Claims Court noted (J.S. App. 16a-17a), the economic
effect of the 1 1/2% percent fee here is "very small" and is far less
than that involved in many of this Court's regulatory taking cases.
See, e.g., Gilliard, 108 S.Ct. at 3020;  Penn Central, 438 U.S. at
125-126, 131;  Headcheck v. Sebastian, 239 U.S. 394 (1915);  compare
Keystone Bituminous Coal, 480 U.S. at 496-497.

   Second, appellees did not suffer any interference with reasonable
investment-backed expectations.  The possibility that the President
would find it necessary to intervene in the resolution of financial
and other disputes in the area of foreign commerce and foreign affairs
is properly recognized as both a shared benefit and a shared risk of
those who trade and travel abroad.  See Dames & Moore, 453 U.S. at
679;  Chang v. United States, 859 F.2d 893, 897 (Fed. Cir. 1988);
Shanghai Power Co. v. United States, 4 Cl. Ct. 237, 245 (1983), aff'd,
765 F.2d 159 (Fed. Cir.) (Table), cert. denied, 474 U.S. 909 (1985);
compare Gilliard, 107 S.Ct. at 3020-3021;  Connolly, 475 U.S. at
226-227;  Penn Central, 438 U.S. at 125-127.  /28/ Furthermore, there
was no statutory provision that afforded appellees a property interest
in having their claims against Iran adjudicated in a United States
court or in a cost-free forum.  See Monsanto, 467 U.S. at 1008-1010.

   Third, as we have explained, the character of the governmental
action -- the assessment of a fee to defray the cost of performing
identifiable governmental functions that redound to the special
benefit of the persons who pay the fee or eliminate the harmful
effects of the activities of those persons -- strongly supports the
constitutionality of Section 502.  In fact, the United States
routinely has deducted 5% from monies distributed to its nationals
following the lump-sum settlement of their claims against foreign
governments, as reimbursement of the United States' costs associated
with the settlement.  See pages 21-22, supra.  That established
practice negated any reasonable expectation by appellees that they
would be exempt from bearing a portion of the cost of implementing
whatever settlement might affect claims arising out of their business
in Iran.  See Connolly, 475 U.S. at 227;  Monsanto, 467 U.S. at
1006-1007.  See also, M. Ball & L. Harris, Iranian Claims Settlement:
A Guide for Commercial Claimants, BNA, Corporate Practice Series at p.
12 (Supp. July 14, 1981) (anticipating that "(t)he United States may
seek partial reimbursement for its share from claimants, perhaps in
the form of a filing fee").

   Appellees, like numerous other claimants, received significant
benefits from their invocation of the Tribunal's jurisdiction and
their election of the Security Account as the source of payment of
their claims.  The Fifth Amendment's command of "justice and fairness"
does not require the government, and therefore the people at large, to
shoulder the costs the government has incurred in making those special
avenues of relief available to appellees and other claimants.  It does
not matter for these purposes that the settlement of private claims
pursuant to the Algiers Accords was one component of a larger
agreement with Iran that served the interests of the Nation as a
whole.  "(W)here, as here, the private party is the particular
intended beneficiary of the government activity * * * (no taking
occurs) even though the activity may be intended incidentally to
benefit the public" (National Board of Young Men's Christian Ass'n v.
United States, 395 U.S. 85, 92 (1969)).

   III. SECTION 502 DOES NOT VIOLATE THE DUE PROCESS CLAUSE OF THE
FIFTH AMENDMENT

   As an alternative ground for affirmance of the judgment below,
appellees contend (Mot. to Dis. or Aff. 23-28) that Section 502
violates the Due Process Clause of the Fifth Amendment in two
respects:  first, because it was given a retroactive effective date of
June 7, 1982, and, second, because it imposes a fee on successful but
not unsuccessful claimants.  Each of these objections is
insubstantial.

   A. "It is now well established that legislative Acts adjusting the
burdens and benefits of economic life come to the Court with a
presumption of constitutionality, and that the burden is on one
complaining of a due process violation to establish that the
legislature has acted in an arbitrary and irrational way" (Pension
Benefit Guaranty Corp. v. Gray & Co., 467 U.S. 717, 729 (1984);  Usery
v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976)).  Such a statute
must be sustained against a due process challenge if Congress had a
"rational basis" for its actions.  Gilliard, 107 S.Ct. at 3015-3016.
To be sure, "'(t)he retroactive aspects of legislation, as well as the
prospective aspects, must meet the test of due process, and the
justifications for the latter may not suffice for the former.' But
that burden is met simply by showing that the retroactive application
of the legislation is itself justified by a rational legislative
purpose." Pension Benefit Guaranty Corp. v. Gray & Co., 467 U.S. at
730, quoting Turner Elkhorn, 428 U.S. at 16-17.  In this case,
Congress's decision in 1985 to make Section 502 effective as of June
7, 1982, clearly had a "rational legislative purpose."

   Congress made Section 502 effective as of June 7, 1982, because
that was the date on which the Treasury Department issued its
directive license under the IOAA that required a deduction from
Tribunal awards in the amount of 2% in order to reimburse the United
States for the costs it incurred in resolving claims against Iran.
The effect of Congress's action was to ratify the Treasury
Department's judgment that some fee should be imposed, although at a
reduced rate of 1 1/2%, and to cure (or render irrelevant) the
technical defects the Claims Court's non-final oral ruling in the
instant case had identified in the Treasury Department's directive
license under the IOAA (see J.S. App. 26a-51a).  It is well settled
that Congress may give legislation a retrospective effect in such
circumstances.  See Swayne & Hoyt, Ltd. v. United States, 300 U.S.
297, 301-302 (1937);  Graham & Foster v. Goodcell, 282 U.S. 409,
426-430 (1931);  Charlotte Harbor & Northern R.R. v. Wells, 260 U.S.
8, 11-12 (1922);  United States v. Heinszen & Co., 206 U.S. 370
(1907).

   Appellees are quite wrong in asserting (Mot. to Dis. or Aff. 24-25)
that Congress could not give retroactive effect to Section 502 because
there was no prior legislative policy of assessing a fee in these
circumstances and the statutory directive therefore constituted a
novel and unanticipated development.  The IOAA expressly states a
legislative policy "that each service or thing of value provided by an
agency * * * to a person (except a person on official business of the
United States Government) is to be self-sustaining to the extent
possible" (31 U.S.C. 9701(a)).  To that end, the IOAA authorizes the
head of each agency to prescribe regulations establishing the charge
for services or other things of value furnished by the agency;  such
charges must be "fair" and must be based on the cost to the
government, the value of the service or thing to the recipient, the
public policy or interest served, and other relevant facts (31 U.S.C.
9701(b)).  The assessment of a fee against private persons who utilize
and benefit from the claims-settlement mechanism that was established
and funded by the United States falls squarely within the scope of
this general policy, notwithstanding the particular defects in the
application of that policy that the Claims Court perceived in its oral
ruling concerning the Treasury Department's directive license.
Moreover, in the specific context at issue here, Congress consistently
has authorized the deduction of a percentage of awards made to United
States nationals in settlement of their claims against foreign
sovereigns as reimbursement for costs incurred by the United States
with respect to such activities.  See 22 U.S.C. 1626(b), 1641a(a).  As
a result, the June 7, 1982, effective date of Section 502 served to
conform to, not depart from, historical practice.

   Moreover, retroactive application of Section 502 ensured that all
similarly situated claimants would be treated alike, because the June
7, 1982, effective date was prior to the first payment of a Tribunal
award.  See 1985 Hearing at 111.  If Congress had assessed the fee
only prospectively, the brunt of the fee might have been borne
disproportionately by certain claimants, including those having small
claims, for whom the arbitration process has been delayed.  1985
Hearing at 111, 120.  Thus, it was entirely rational for Congress to
give Section 502 retroactive effect, and thereby to ratify the
directive license (with modifications), in order to "provide uniform
treatment" for all successful Tribunal claimants.  Connolly, 475 U.S.
at 223-227;  United States v. Darusmont, 449 U.S. 292, 298-299 (1981);
 Turner Elkhorn, 428 U.S. at 16-19;  Swayne & Hoyt, 300 U.S. at 302;
compare Nollan, 107 S.Ct. at 3147 n.4.

   B. Contrary to the suggestion by appellees and the court of appeals
(J.S. App. 11a), the validity of the user fee in this case is not
undermined by the fact that it is assessed only against those
claimants who have actually received payment of an award by the
Tribunal, rather than against all United States nationals who filed
claims with the Tribunal.  Where, as here, heightened scrutiny is not
required, "'(a) statutory discrimination will not be set aside if any
state of facts reasonably may be conceived to justify it.'" Gilliard,
107 S.Ct. at 3017, quoting Dandridge v. Williams, 397 U.S. 471, 485
(1970).  Here, although a filing fee applicable to all claimants would
also have been constitutional (compare United States v. Kras, 409 U.S.
434 (1973)), the legislative history unquestionably reveals a state of
facts reasonably justifying imposition of a fee only on successful
claimants.

   First, the State Department informed Congress that if claimants
(especially those whose claims were relatively small in amount) were
charged a flat fee even if they did not ultimately prevail, they might
be deterred from pursuing their claims through the Tribunal -- a
result that would be "contrary to the essential purpose of the Algiers
Accords to provide a forum for the resolution of the claims of all
U.S. nationals against Iran" (1985 Hearing at 113).  Compare Pennell,
108 S. Ct. at 859.

   Second, Congress reasonably could conclude that only those
claimants who actually succeed in receiving an award from the Tribunal
realize a sufficient benefit from the overall claims-settlement
program to warrant assessment of a fee.  1985 Hearing at 109-110.  As
Congress also recognized, the approach embodied in Section 502 of
charging only successful claimants for services rendered by the United
States in facilitating the adjudication of their claims is consistent
with the common practice in the legal profession for attorneys to
charge a fee for their services that is contingent upon the client's
recovery of a judgment or settlement amount from the defendant.  1985
Hearing at 109.  Moreover, although persons who filed claims with the
Tribunal realized a benefit in the sense that they were afforded a
forum for the adjudication of their claims, only successful claimants
benefit from other components of the claims-settlement apparatus, such
as the Security Account and the Federal Reserve Bank of New York.  Cf.
Pennell, 108 S.Ct. at 859.

   Third, because Congress previously had recouped the costs of
settling the claims of United States nationals only from awards made
to successful claimants, it reasonably could conclude that the fairest
course was to continue that practice here.  Adherence to past practice
was especially sound in light of the fact that appellees' claims arise
out of their voluntary activities in an area of foreign commerce that
is instinct with the possibility that the President might find it
necessary to settle those claims.  Compare Connolly, 475 U.S. at 228;
Monsanto, 467 U.S. at 1006-1007.

   The Constitution does not bar Congress from relying on these
various common-sense distinctions in determining the incidence of a
user fee.  Pittsburgh v. Alco Parking Corp., 417 U.S. 369, 378-379
(1974);  Brushaber v. Union Pacific R.R., 240 U.S. 1, 24-26 (1916);
Billings v. United States, 232 U.S. 261, 283-284 (1914);  McCray v.
United States, 195 U.S. 27, 61-62 (1904).

   IV. SECTION 502 DOES NOT VIOLATE THE ORIGINATION CLAUSE BECAUSE IT
IS NOT A "BILL FOR RAISING REVENUE" WITHIN THE MEANING OF THAT CLAUSE

   In their final alternative ground for affirmance, appellees contend
(Mot. to Dis. or Aff. 28-30) that, because Section 502 was added to
the foreign relations authorization bill by the Senate, it contravenes
the Origination Clause of the Constitution.  That Clause provides:
"All bills for raising Revenue shall originate in the House of
Representatives;  but the Senate may propose or concur with Amendments
as on other Bills" (Art. I, Section 7, Cl. 1).  This contention is
equally insubstantial, however, because Section 502 is not a "Bill for
raising Revenue" which must originate in the House.

   As this Court has held, relying on Justice Story's analysis, "the
practical construction of the Constitution and the history of origin
of the constitutional provision in question proves that revenue bills
are those that levy taxes in the strict sense of the word, and are not
bills for other purposes which may incidentally create revenue." Twin
City Bank v. Nebeker, 167 U.S. 196, 202 (1897).  Accord, Millard v.
Roberts, 202 U.S. 429, 436-437 (1906);  see also United States v.
Norton, 91 U.S. 566, 568-569 (1875).  In Nebeker, for example, the
Court rejected an Origination Clause challenge to a provision in the
law establishing a national currency secured by a pledge of bonds of
the United States, which imposed a "tax" on notes in circulation in
order to defray the costs of executing the statute.  The Court held
that the statute was "clearly not a revenue bill which the
Constitution declares must originate in the House of Representatives,"
because the purpose of the "tax" was not to raise revenues for the
general operation of the government.  167 U.S. at 202-203.  See also
Millard, 202 U.S. at 435-437 (assessment upon District of Columbia
residents for public improvements not a tax within meaning of
Origination Clause);  South Carolina v. Block, 717 F.2d 874, 887 (4th
Cir. 1983) (50-cent deduction imposed on proceeds of milk sales to
defray cost of price-support program and reduce overproduction not a
bill for raising revenue under Origination Clause).  /29/

   These principles, upon which Congress was entitled to rely in
passing Section 502, establish that Section 502 likewise is not a
"Bill for raising Revenue" within the meaning of the Origination
Clause.  The purpose of the Foreign Relations Authorization Act as a
whole was to authorize appropriations for the Department of State and
related agencies for Fiscal Years 1986 and 1987.  Title V of the Act
(99 Stat. 437), of which Section 502 is a part, addresses several
issues bearing on the adjudication of claims of United States
nationals against Iran.  131 Cong. Rec. 12515-12516 (1985) (remarks of
Sen. Evans).  Moreover, Section 502, even if considered alone, does
not "levy taxes in the strict sense of the word" (Twin City Bank v.
Nebeker, 167 U.S. at 202), because it assesses a fee for (and thereby
defrays the expenses of) particular governmental services, rather than
raising revenues to support the operation of the government generally.
 Compare id. at 203;  Millard v. Roberts, 202 U.S. at 435-437;  cf.
Head Money Cases, 112 U.S. at 595-596.  /30/ In fact, appellees
elsewhere insist (Mot. to Dis. or Aff. 14) that "Congress never even
purported to exercise its taxing power." Accordingly, Section 502 did
not constitute a "Bill for raising Revenue" within the meaning of the
Origination Clause, and the Senate's addition of that provision to the
pending foreign relations authorization bill did not violate that
Clause.

                              CONCLUSION

   The judgment of the court of appeals should be reversed.

   Respectfully submitted.

   WILLIAM C. BRYSON

      Acting Solicitor General

   JOHN R. BOLTON

      Assistant Attorney General

   LAWRENCE G. WALLACE

      Deputy Solicitor General

   EDWIN S. KNEEDLER

      Assistant to the Solicitor General

   DAVID M. COHEN

   DOUGLAS N. LETTER

   TERRENCE S. HARTMAN

      Attorneys Department of Justice Washington, D.C. 20530 (202)
      633-2217

   ABRAHAM D. SOFAER

      Legal Adviser

   MICHAEL J. MATHESON

      Deputy Legal Adviser

   LISA J. GROSH

      Attorney-Adviser Department of State

   EDITH E. HOLIDAY

      General Counsel

   RUSSELL L. MUNK

      Assistant General Counsel

   FRANCINE MCNULTY BARBER

      Attorney-Adviser Department of the Treasury

   APRIL 1989

   /1/ Section 1252 was repealed by Section 1 of Public Law No.
100-352, 102 Stat. 662, which was enacted on June 27, 1988.  However,
Section 7 of Public Law 100-352 provides that the repeal of 28 U.S.C.
1252 "shall take effect ninety days after the date of the enactment of
this Act" (i.e., on September 25, 1988) and "shall not * * * affect
the right to review or the manner of reviewing the judgment or decree
of a court which was entered before such effective date" (102 Stat.
664).  In this case, the judgment of the court of appeals was entered
on August 10, 1988, before the effective date of the repeal of 28
U.S.C. 1252, and a direct appeal therefore lies to this Court.

   /2/ See Iran Claims Act:  Hearing on H.R. 3241 Before the Subcomm.
on International Economic Policy and Trade of the House Comm. on
Foreign Affairs, 98th Cong., 1st Sess. 31-32 (1983) (testimony of
David K. Anderson, General Counsel, Sperry Corporation Computer
Systems) (hereinafter 1983 Hearing).

   /3/ The attachments of Iranian bank accounts and letters of credit
were valued by appellees at $7 million.  See 1983 Hearing at 30, 32
(statement of David K. Anderson, General Counsel, Sperry Corporation
Computer Systems).

   /4/ The Security Account is maintained in the N.V. Settlement Bank,
a subsidiary of the Dutch Central Bank, under the control of the
Central Bank of Algeria as the escrow agent.

   /5/ When the Tribunal makes an award in favor of a United States
claimant, it notifies the Central Bank of Algeria, which in turn
notifies the Dutch bank in which the funds are deposited.  The latter
bank then transfers the funds necessary to pay the award to the
Federal Reserve Bank of New York.  See Claims Against Iran:  Hearing
Before the Subcomm. on International Economic Policy and Trade of the
House Comm. on Foreign Affairs, 97th Cong., 2d Sess. 4 (1982)
(hereinafter 1982 Hearing).

   /6/ An additional amount of Iranian assets, totalling $7.955
billion, had previously been transferred to the Central Bank of
Algeria at the time of the settlement on January 19, 1981, for
distribution to two special accounts for payment of bank claims and to
Iran.  J.A. 43-45.

   /7/ At the time the directive license was issued, the IOAA was
codified at 31 U.S.C. 483a (1976 ed.).  The IOAA was redesignated as
31 U.S.C. 9701 as part of the recodification of Title 31 that was
enacted by the Act of Sept. 13, 1982, Pub. L. No. 97-258, Section 1,
96 Stat. 1051.

   /8/ Iran had indicated that it would file a counterclaim with the
Tribunal seeking recovery of past-due taxes from appellees, and that
counterclaim was taken into account in the settlement.  See 1983
Hearing at 32-33.

   /9/ The Claims Court denied appellees' motion to certify a class
(C.A. App. A55), and appellees did not appeal that ruling.

   /10/ The Executive Branch had proposed such a measure in 1982,
which was introduced at H.R. 7374, 97th Cong., 2d Sess. (1982).  See
1982 Hearing at 1, 45-48.  A similar bill was introduced the following
year as H.R. 3241, 98th Cong., 1st Sess. (1983).  See 1983 Hearing at
37-41.

   /11/ The 1 1/2% fee is deducted from the amount of Tribunal awards
in favor of agencies of the United States Government as well as
private claimants.  We have been informed by the Department of State
that, to date, there have been four such awards to government
agencies.  See U.S.A. (Cataloging Distribution Service of the Library
of Congress) v. Iran, AWD No. 319-B/39-2 (Oct. 9, 1987);  U.S.A.
(Commodity Credit Corporation) v. Iran, AWD No. 374-B/22/1 (July 1,
1988);  U.S.A. (National Bureau of Standards of the U.S. Department of
Commerce) v. Iran, AWD No. 376-B/31-3 (July 11, 1988);  U.S.
Department of Energy (Oak Ridge Operations) v. Iran, AWD No.
418-B/27-3 (Mar. 16, 1989).

   /12/ The State Department reported to Congress in 1985 that fees
generated by the 2% directive license under the IOAA had covered only
approximately one half of the expenses incurred by the government up
to that point.  1985 Hearing at 112.  The United States' contribution
for operation of the Tribunal has since increased to $2.886 million
annually.  Iran-United States Claims Tribunal, Annual Report for
Period Ending 30 June 1988, at 51 (Dec. 15, 1988).

   /13/ The amount in excess of $42,000 that was withheld from
appellees' award under the IOAA directive license, which required the
Federal Reserve Bank to withhold 2% rather than 1 1/2% of awards, was
refunded to appellees.  See 50 Fed. Reg. 34,959 (1985).

   /14/ The Origination Clause (Art. I, Section 7, Cl. 1) provides
that "All Bills for raising Revenue shall originate in the House of
Representatives."

   /15/ In light of its holding that Section 502 violates the Just
Compensation Clause of the Fifth Amendment, the court of appeals found
it unnecessary to consider appellees' challenges under the Due Process
and Origination Clauses (J.S. App. 11a).

   /16/ Thus far, Iran has chosen to replenish the Security Account
out of funds contained in a separate escrow account in which interest
earned on the Security Account has been deposited.  24 Weekly Comp.
Pres. Docs. at 1503.  The establishment of a separate escrow account
for the interest was the result of a Tribunal decision addressing
Iran's claim that interest earned on deposits in the Security Account
should be paid directly to Iran, rather than retained in the Security
Account.  See The Islamic Republic of Iran v. United States, Dec. No.
12-A/1-FT, at 5 (Aug. 3, 1982);  1985 Hearing at 20-21.

   /17/ The Due Process Clause has been held to bar the government
from imposing a filing fee as a condition precedent to obtaining a
meaningful judicial hearing in the case of an indigent plaintiff who
seeks adjudication of certain fundamental claims that are uniquely
subject to public resolution.  Boddie v. Connecticut, 401 U.S. 371
(1971).  Neither appellees nor their contractual or other claims
against Iran are protected by this special rule.  Compare United
States v. Kras, supra.  In any event, the fee prescribed by the Iran
Claims Settlement Act is assessed only in the event that the claimant
prevails before the Tribunal.  For this reason, and in light of the
modest rate of the fee, Section 502 does not erect any substantial
barrier to access to the Tribunal, and it therefore raises no
procedural due process concerns.

   /18/ See Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922);
see also Hodel v. Irving, 481 U.S. 704, 715 (1987).

   /19/ In Loretto, by contrast, there was no suggestion that persons
who engaged in the regulated activity (the leasing of apartments)
realized a benefit or generated a burden for society that justified
the permanent physical occupation resulting from the ordinance that
required owners of apartment buildings to permit cable television
companies to install cables on their buildings.  There was, in other
words, no element of exchange or quid pro quo.  Compare Nollan v.
California Coastal Comm'n, 107 S.Ct. 3141, 3146 n.2, 3148 (1987).  Nor
was the physical invasion of real property in Loretto independently
justified as a reasonable means to accomplish a distinct and lawful
governmental purpose.

   /20/ In addition to the Tribunal case filed by appellees that is at
issue here (No. 205), appellee Sperry filed another case with the
Tribunal (No. 191).  Appellee likewise settled the various claims at
issue in Case No. 191.  However, appellee and Iran chose not to embody
that settlement in a Tribunal award upon agreed terms.  Instead, they
requested the Tribunal to terminate arbitral proceedings in light of
the settlement of the underlying claims, and the Tribunal granted that
request.  Sperry Corp. v. The Islamic Republic of Iranian Navy, et
al., Case No. 191 (Apr. 10, 1984).  The decision by appellee Sperry to
settle Case No. 191 outside the Tribunal mechanism demonstrates that
an alternative avenue was available to appellees in the case at issue
here, but that they perceived an advantage to having the Tribunal
enter an award upon agreed terms.

   /21/ Appellees argue (Mot. to Dis. or Aff. 7 & n.12) that they
actually "reached a settlement" with the Iranian respondents in Case
No. 205 in February 1982, and that the Iranian Government gave its
"final approval" to the agreement on July 8, 1982.  However, the
Tribunal's Award on Agreed Terms states that appellees and Iran
"entered into a Settlement Agreement on 8 July 1982" (J.A. 20).
Moreover, the joint request submitted by appellees and Iran to the
Tribunal states that they had "entered into a Settlement Agreement
date (sic) July 8, 1982, a copy of which is annexed hereto." Although
the attached Memorandum of Understanding in turn states that it
incorporates the "points of agreement" reached in February 1982, in
Vienna, Austria," the Memorandum was not actually signed until July 8,
1982.  Memorandum of Understanding at 1, 8.  In addition, in their
complaint in this case, appellees alleged that after filing its claim
with the Tribunal, "Sperry simultaneously engaged in extensive
settlement negotiations with the Iranian defendants and on July 8,
1982, Sperry settled its claims against the Iranians for the sum of
$2.8 million" (J.A. 14).  Finally, during hearings on the Iranian
claims legislation, a representative of appellees stated that they had
reached a "tentative settlement" in February 1982, but that it took
"several months to obtain the approval of the Iranian government for
the settlement" (1983 Hearing at 33).

   Thus, although appellees appear to have reached a tentative
agreement with persons negotiating on behalf of the Iranian government
in February 1982, they did not formally enter into a settlement
agreement until July 8, 1982.  If appellees believed at that time that
the assessment of the 2% user fee under the directive license issued
on June 7, 1982, rendered the $2.8 million settlement figure
inadequate, they could have declined to submit the settlement to the
Tribunal and sought a greater amount from Iran.  Moreover, appellees
do not and cannot deny that they were on notice of the directive
license at the time they joined with Iran in requesting the Tribunal
to enter an award based on the settlement.

   /22/ We do not mean to suggest that a user fee or comparable
assessment intended to reimburse the government for the cost of
benefits conferred is valid only when it is levied against persons who
voluntarily engaged in the activity that received the benefit or who
requested the government to perform the services.  See, e.g., United
States v. Mitchell, 463 U.S. 206, 209 (1983) (discussing 25 U.S.C.
413, which authorizes the Secretary of the Interior to collect
reasonable fees to cover the cost of work performed for Indian tribes
or individual Indians);  Londoner v. Denver, 210 U.S. 373, 378-379
(1908) (a city may levy an assessment against abutting property for
improvements to a road even without the consent of the owners).

   /23/ Certain contracts between United States nationals and the
Iranian Government or its controlled entities that provide for
resolution of disputes in Iranian courts are not within the Tribunal's
jurisdiction under the Algiers Accords.  Article II, Paragraph 1 of
the Claims Settlement Declaration excludes from the Tribunal's
jurisdiction "claims arising under a binding contract between the
parties specifically providing that any disputes thereunder shall be
within the sole jurisdiction of the competent Iranian courts in
response to the Majlis position" (J.A. 38).  The Tribunal has
interpreted this aspect of the Accords restrictively in its
application to particular cases.  Gibbs & Hill, Inc. v. Iran Power
Generation and Transmission Co. ("TAVANIR") of the Ministry of Energy
of the Government of Iran, et al., ITL No. 1-6-FT, at 4 (Nov. 5,
1982);  Ford Aerospace v. The Air Force of the Islamic Republic of
Iran, ITL No. 6-159-FT, at 4 (Nov. 5, 1982).

   /24/ See Sperry Corporation & Sperry World Trade, Inc. v. Islamic
Republic of Iran, et al., Case No. 205, Statement of Claim, Attachment
A, at A-3, A-15 (Section 18);  Attachment C, at C-3, C-18 (Section
18);  Attachment D, at D-3, D-18 (Section 18);  Attachment E, at E-1,
E-77 (Section 24.1.5);  Attachment F, at F-3, and Agreement, at 38
(Section 20.2);  Attachment G, at G-3, G-47 (Section 20.2);
Attachment K, at K-2, K-29 (Section 2.23);  Attachment L, at L-3, L-43
(Section 2.3).  Although several of these contract clauses refer to
the rules and regulations of the ICC without specifically mentioning
arbitration, such a reference would presumably be deemed sufficient
under ICC rules to constitute an agreement to submit disputes to
arbitration.  See W.L. Craig, W. Park & J. Paulsson, International
Chamber of Commerce Arbitration, in International Commercial
Arbitration, ch. 6 (June 1984).

   /25/ Deputy Legal Adviser Michael J. Matheson stated:

         Like the (Foreign Claims Settlement) Commission, the
      Tribunal, the Security Account, and the supporting activities of
      U.S. agencies provide a special service to a special class of
      Americans.  In fact, for private claimants, it is similar to
      other private arbitral bodies convened to adjudicate commercial
      disputes.  These other bodies all charge for their services:
      the most inexpensive of them, the American Arbitration
      Association, charges $3,850 for a $1 million claim, while the
      most expensive, the International Chamber of Commerce, charges
      $13,250 for a $1 million claim.

   See also 1983 Hearing at 29 (statement of Lee Marks, Chairman, ABA
Committee on Foreign Claims) (noting the ICC precedent of a sliding
scale for fees).

   /26/ The principle that amounts owing by Iran under settlement
agreements may be paid out of the Security Account if approved by the
Tribunal in an award upon agreed terms was established by an
interpretive decision rendered by the Tribunal on May 17, 1982.  The
Islamic Republic of Iran v. United States, Dec. No. 8-A/1-FT, at
12-13.  State Department attorneys participated in the proceedings on
the interpretive issue, urging the result that the Tribunal ultimately
reached.  1985 Hearing at 20.  These efforts by government personnel,
which Section 502 is designed to reimburse, obviously redounded to the
benefit of appellees.

   /27/ See Iran -- United States Claims Tribunal, Annual Report for
the Period Ending 30 June 1988, at 21, 38 (Dec. 15, 1988);  S.
Belland, The Iran-United States Claims Tribunal:  Some Reflections on
Trying A Claim, 1 J. Int'l Arb. 237, 239, 246 (1984);  B. Clagett, The
Iran-United States Claims Tribunal:  A Practitioner's Perspective, in
The Iran-United States Claims Tribunal 1981-1983, at 129, 134 (R.
Lillich ed. 1984);  E. Lauterpacht, The Iran-United States Claims
Tribunal -- An Assessment, in Private Investors Abroad -- 1982, at
213, 227-228 (1982).

   /28/ Indeed, another panel of the Federal Circuit held that the
Algiers Accords' total extinguishment of claims against Iran by the
American hostages did not interfere with "distinct investment-backed
expectations." Belk v. United States, 858 F.2d 706, 710 (1988).

   /29/ The Court has drawn a similar distinction between taxes and
other sorts of fees or exactions in other cases involving challenges
to measures that generated some income for the government.  See
Massachusetts v. United States, 435 U.S. at 451-463 (annual flat fee
on all civil aircraft, including those owned by a state, to recoup
part of cost of national air system is user fee that does not
implicate implied constitutional immunity of states from federal
taxation);  Clyde Mallory Lines v. Alabama, 296 U.S. 261, 265-266
(1935) (flat fee charged each vessel entering port to defray cost of
harbor policing not "duty of tonnage" or tax on vessels' privilege of
access);  Head Money Cases, 112 U.S. at 595-596 (50-cent head fee on
immigrants brought into country imposed upon ship owners engaging in
foreign commerce for government's temporary care and protection of
such passengers not a tax within meaning of Constitution, but charge
for services rendered);  Morgan's Steamship Co. v. Louisiana Board of
Health, 118 U.S. 455, 461-463 (1886) (fixed fee for examination and
fumigation of vessels passing a quarantine station is not a tonnage
tax within meaning of Constitution, but a fee for services rendered);
Moon v. Freeman, 379 F.2d 382, 391-392 (9th Cir. 1967) (statute
requiring purchase of wheat export certificate to defray cost of
government wheat purchases to guarantee farmers' annual income not
prohibited as levy of tax on exports, but valid regulation of
commerce).

   /30/ The instant case was distinguished on that basis in United
States v. Munoz-Flores, 863 F.2d 654, 657 (9th Cir. 1988), petition
for rehearing denied (Mar. 31, 1989).  The Ninth Circuit there held
that the statutory authorization for a special assessment of $25
against an individual convicted of a misdemeanor (18 U.S.C.
3013(a)(1)(A) (Supp. IV 1986)) is unconstitutional under the
Origination Clause.