American Insurance Association v. Garamendi, 539 U.S. 396, 21 (2003)

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416

AMERICAN INS. ASSN. v. GARAMENDI

Opinion of the Court

claims associated with formerly belligerent states, but against corporations, not the foreign governments. But the distinction does not matter. Historically, wartime claims against even nominally private entities have become issues in international diplomacy, and three of the postwar settlements dealing with reparations implicating private parties were made by the Executive alone.8 Acceptance of this historical practice is supported by a good pragmatic reason for depending on executive agreements to settle claims against foreign corporations associated with wartime experience. As shown by the history of insurance confiscation mentioned earlier, untangling government policy from private initiative during wartime is often so hard that diplomatic action settling claims against private parties may well be just as essential in the aftermath of hostilities as diplomacy to settle claims against foreign governments. While a sharp line between public and private acts works for many purposes in the domestic law, insisting on the same line in defining the legitimate scope of the Executive's international negotiations would hamstring the President in settling international controversies. Cf. Pink, supra, at 234-242 (Frankfurter, J., concurring) (noting the unsoundness of transplanting "judicial subtleties" of domestic law into "the solution of analogous problems between friendly nations").

Generally, then, valid executive agreements are fit to preempt state law, just as treaties are,9 and if the agreements

8 The Yalta and Potsdam Agreements envisioning dismantling of Germany's industrial assets, public and private, and the followup Paris Agreement aspiring to settle the claims of western nationals against the German Government and private agencies were made as executive agreements. See supra, at 403 (citing agreements); see also L. Margolis, Executive Agreements and Presidential Power in Foreign Policy 15-16 (1986).

9 Subject, that is, to the Constitution's guarantees of individual rights. See Reid v. Covert, 354 U. S. 1, 15-19 (1957); Boos v. Barry, 485 U. S. 312, 324 (1988). Even Justice Sutherland's reading of the National Govern-ment's "inherent" foreign affairs power in United States v. Curtiss-Wright Export Corp., 299 U. S. 304 (1936), contained the caveat that the power,

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