The US Supreme Court ruled Wednesday that Iran must hand over nearly $2 billion in frozen assets to survivors and relatives of those killed in attacks blamed on the Islamic republic.
In a 6-2 decision, the court upheld rulings in favor of victims and relatives of the 241 US service members killed in the 1983 bombing of US Marine barracks in Beirut, the 1996 Khobar Towers bombing that killed 19 Americans in Saudi Arabia, and other attacks blamed on Iran.
More than 1,000 Americans are affected by the decision.
Justice Ruth Bader Ginsburg wrote the court's opinion rejecting the Iranian central bank's efforts to block $1.75 billion in payments to victims and relatives.
"We are extremely pleased with the Supreme Court's decision, which will bring long-overdue relief to more than 1,000 victims of Iranian terrorism and their families, many of whom have waited decades for redress," said Theodore Olson, the former US solicitor general who represented the relatives of the victims.
It was also a win for President Barack Obama's administration and for Congress, which passed a 2012 law ordering Iran's Bank Markazi to turn over frozen bond assets it held in a New York account at Citibank.
"Today's decision is a long awaited victory for justice and in recognizing that the survivors are entitled to this compensation," Senator Robert Menendez, who helped author the legislation, said in a statement.
Iran argued the law was unconstitutional as it violated separation of powers, with US lawmakers ordering a particular result in a legal case, but federal courts rejected that claim and backed the law.
The lower courts also denied the central bank's request for legal immunity.
The Supreme Court agreed.
The 2012 law "does not transgress constraints the Constitution places on Congress and the president," Ginsburg wrote in the majority opinion.
"We perceive in (the statute) no violation of separation-of-powers principles, and no threat to the independence of the judiciary."
Instead, she said, the law "directs courts to apply a new legal standard to undisputed facts."
Chief Justice John Roberts filed a dissenting opinion, in which Justice Sonia Sotomayor joined.
"Contrary to the majority, I would hold that (the law) violates the separation of powers" between the executive, legislative and judicial branches of government, Roberts wrote.
"No less than if it had passed a law saying 'respondents win,' Congress has decided this case by enacting a bespoke statute tailored to this case that resolves the parties' specific legal disputes to guarantee respondents victory."
He used an analogy in which a neighbor sues another and wins by persuading a legislature to enact a statute backing his position for his specific case.
"Imagine your neighbor sues you, claiming that your fence is on his property," Roberts wrote.
"Your neighbor wins. Who would you say decided your case: the legislature, which targeted your specific case and eliminated your specific defenses so as to ensure your neighbor's victory, or the court, which presided over the fait accompli?"
Several months before signing the 2012 bill into law, Obama signed an executive order freezing all Iranian assets, potentially freeing them up for seizure.
At the time, he pointed to the "deceptive practices of the Central Bank of Iran and other Iranian banks."
The case before the court had marked a rare alliance between Obama and both houses of Congress, which are controlled by his Republican foes.
The court's decision comes at a time of hopes for better ties between longtime foes Tehran and Washington, following a nuclear agreement last year between Iran, the United States and five other major powers.
It also coincides with growing controversy over a draft bill in Congress that could allow families of the September 11 attacks to sue the Saudi government in US courts. Nearly 3,000 people died in the 2001 attacks.
There are only eight justices currently sitting on the court following the death in February of Justice Antonin Scalia. So far, Senate Republicans have refused to schedule hearings on Obama's nominee to fill the ninth seat.
That leaves the court short-handed and evenly split between justices who lean conservative and those who tend to back liberal positions.
Since Scalia's death, the top court has already deadlocked in three decisions, meaning their rulings set no new national precedents and leave lower court rulings intact.