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The Legality of State Sanctions on Iran
Michael Ramsey

At Volokh Conspiracy, Eugene Kontorovich asks: How far will Obama’s ‘encouragement’ to states to drop Iran sanctions go?  He begins:

The Obama administration has been writing letters to all 50 state governors, urging them to reconsider economic sanctions they have against Iran. Almost half of U.S. states have adopted such measures, which were explicitly authorized by statute in the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA).

“I would urge you to consider whether the implementation of the JCPOA, which verifiably ensures that Iran’s nuclear program is and will remain exclusively peaceful, addresses the underlying concerns with Iran articulated in your state’s law,” one of the letters stated.

The question is whether the administration will argue that the state laws are preempted by the JCPOA (that is, the Iran nuclear deal, or Joint Comprehensive Plan of Action).  The answer should be (as Professor Kontorovich says) that the state laws are not preempted because the JCPOA is a nonbinding agreement, not a treaty, and so is not included in supreme law under the Article VI of the Constitution.

The matter is complicated, however, by the Supreme Court's decision in American Insurance Association v. Garamendi, which held on somewhat similar facts that a state law was preempted because it conflicted with a presidential policy expressed in an executive agreement.  (I have written a couple of articles that are very critical of Garamendi [in which I served as one of the counsel for the state] -- see here and here.)

The present situation with Iran is a little different from Garamendi, and more favorable to the states.  First, as Professor Kontorovich's post notes, the state laws are specifically authorized by Congress, which was not the case in Garamendi.  Second, the presidential policy in Garamendi was expressed in an executive agreement, not a nonbinding agreement, and some executive agreements (but not nonbinding agreements) have been given preemptive effect by the Supreme Court despite the plain text of Article VI.  Third, as Professor Kontorovich also notes later in his post, the Court's post-Garamendi decision in Medellin v. Texas took a very negative view of preemption by unilateral executive acts.  Medellin said (rightly, as I say here) that according them preemptive effect would make the president a lawmaker, contrary to the Constitution's basic separation of powers.  Medellin also described Garamendi and related cases on executive agreements very narrowly as involving claims settlements, which the Court seemed to regard as a constitutionally distinct category.  (The JCPOA is not a settlement agreement).

So I agree with Professor Kontorovich: if the administration wants to make a case of it, bring it on!  The states are on very strong ground.