Beacon Products Corporation v. Reagan – International Human Rights and Solidarity – CCR Docket 1987-1988

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 country. In his message to Congress, he claimed that Nicaragua con­stituted a threat to the foreign policy inter­ ests 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 providing services or sending money, nor does it cover goods which fit within a broad definition of humanitarian aid.

CCR attorneys filed a suit in federal court in Massachusetts, challenging the validity of the president’s actions. Plaintiffs included 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 coffee from Nicaragua.

The suit charges that the president acted without constitutionally required congres­ sional 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 for the embargo, it would have been denied. The district  court  dismissed  the com­plaint. The court of appeals held the case moot, because Congress amended the unconstitutional statute after the suit was filed.

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