Beacon Products Corp. v. Reagan – International law – CCR Docket 1986-1987

In May 1985 President Ronald Reagan signed an executive order announcing a trade embargo against Nicaragua, and, at the same time, terminated a Friendship Treaty with that count ry. In his message to Congress, he claimed that Nicaragua con­stituted a threat to the foreign policy inter­ests and security of the  United States.

The Treasury Department issued regula­tions prohibiting almost all imports of Nic­araguan products to the U.S., and restrict­ing the export of certain goods to Nicaragua. The embargo, however, does not prevent sending money or humanitarian aid to Nicaragua.

CCR attorneys filed a suit in federal court in Massachusetts, challenging the validity of the President’s actions. Plaintiffs include Joseph Sholkin and his company, Beacon Products Corp., which holds a contract to export plastics manufacturing machines to Nicaragua, and Thanksgiving Coffee, a company which contracted to import Nicaraguan coffee.

The suit charges that the President acted without constitutionally required congressional approval. The Framers of the Constitution did not intend the President to wield such unilateral power, and Congress autho­rizes such actions only in carefully prescribed emergency situations. If the Presi­dent had sought congressional approval, it would have been denied .

The district court dismissed the com­plaint, relying on an unprecedented court of appeals decision which is under review by the Supreme Court. The decision has been appealed.

David Cole, Michael Ratner, Margaret Ratner, with CCR cooperating attorneys Jonathan Shapiro and  Jules Lobel