IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

KindHearts for Charitable Humanitarian Development, Inc., Plaintiff v.
Timothy Geithner, et al, Defendant

Case No. 3:08CV2400 ORDER

Plaintiff KindHearts for Charitable Humanitarian Development, Inc. (KindHearts), an Ohio corporation, challenges a provisional determination by the Office of Foreign Assets Control [OFAC] of the United States Treasury Department that plaintiff is a Specially Designated Global Terrorist [SDGT]. KindHearts also challenges the block OFAC placed on plaintiff’s assets pending a full investigation.
OFAC alleges that KindHearts provides material support to Hamas, which is also an SDGT. OFAC’s authority to designate SD GTs and bloc k the assets of entities under inve stigation for supporting terrorism stems from the International Emergency Economic Powers Act [IEEPA], 50 U.S.C. § 1701-06 and Executive Order 13224 [E.O. 13224].
KindHearts alleges that OFAC’s actions are unconstitutional because: 1) OFAC’s block is an unreasonable seizure in violation of the Fourth Amendment; 2) provisions authorizing OFAC to designate SDGT and block assets pending investigation are void for vagueness under the Fifth Amendment; 3) OFAC denied KindHearts proceduraldue process before provisionally determining
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it to be an SDGT and blocking its assets; and 4) OFAC has unconstitutionally restricted plaintiff’s access to the resources it needs to mount a defense. KindHearts further claims that OFAC blocked KindHearts’ assets without proper statutory authorization.
KindHearts asks this court to litfthe OFAC blocking order or, alternatively, to require OFAC to provide KindHearts with adequate process.
The defendants – the Secretary of the Treasury, Director of OFAC, and Attorney General – are United States governm ent officials sued in t heir official capacities. This court sua sponte substitutes as defendants Timothy Geithner, Secretary of the Treasury, and Eric H. Holder, Attorney General, for former Treasury Secretary Henry M.Paulson and former Attorney General Michael B. Mukasey, respectively. Defendants contest plaintiff’s constitutional and statutory claims, and argue that claims arising fromOFAC’s provisional determination that KindHearts isan SDGT are not ripe for this court’s review.
Pending are plaintiff’s motion for partial summary judgment under Rule 56 of the Federal Rules of Civil Procedure [Doc. 31] and defendants’motion to dismiss under Rule 12(b)(6) or, in the alternative, for summary judgment on all counts under Rule 56. [Doc. 36].
Background KindHearts, a Toledo-based non-profit corporation, was incorporated on January 22, 2002, under Ohio law. Its stated goal is to provide humanitarian aid without regard to religious or political affiliation. Khaled Smaili founded KindHearts after OF AC shut down several Muslim -affiliated charities which, like KindHearts had as their stated objectives humanitarian relief in the Middle East and elsewhere. KindHearts contends that fromits inception, its officers and directors took great care
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to ensure it did not fund any designated terrorist or terrorist- related entities or otherwise violate
federal laws regarding designated terrorists. Itsought guidance from the Treasury Department, and
implemented the Treasury’s voluntary guidelines for charitable organizations.
On February 19, 2006, OFAC froze all of KindHearts’ assets pending investigat ion into
whether it was subject to designation under IEEPAand E.O. 13224. More than a year later, on May
25, 2007, OFAC informed KindHearts it had provisionally determined to designate it a SDGT.
Statutory and Regulatory Framework
The Executive initially used the Trading With the Enemy Act [TWEA], 50 App. U.S.C. §§
1-44, enacted in 1917, to impose sanctions and embargoes on foreign nations. In 1977, Congress
amended the TWEA and enacted the IEEPA. The EI EPA requires the President to declare a national
emergency to “deal with any unusual and extraordinary threat, which has its source in whole or
substantial part outside the United States, to thenational security, foreign policy or economy of the
United States.” The pertinent sections of the IEEPA are 50 U.S.C. § 1701 and 1702:
§ 1701. Unusual and extraordinary threat; declaration of national emergency; exercise of Presidential authorities
(a) Any authority granted to the President by section 1702 of this title m ay be exercised to deal with any unusualand extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or econom y of the United States, if the Preside nt declares a national emergency with respect to such threat.
(b) The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.
§ 1702. Presidential authorities
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(a)(1) At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise–
(A) investigate, regulate, or prohibit--
(i) any transactions in foreign exchange, (ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof, (iii) the importing or exporting of currency or securities, by any person, or with respect to any property, s ubject to the jurisdiction of the United States;
(B) investigate, block during the pe ndency of an investigation, regulate, direct and com pel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States; . . .
50 U.S.C. §§ 1701-1702.
On September 24, 2001, President Bush issuedE.O. 13224, declaring a national emergency
with respect to “grave acts and thr eats of terrorism.” He invoked his authority under the IEEPA,
authorizing the Secretary of Tr easury, in consultation with the Secretary of State and Attorney
General, to designate “persons” (defined as individuals or entities) whose property or interests in
property should be blocked because they “act for or on behalf of” or are “owned or controlled by”
designated terrorists, or because they “assist in , sponsor, or provide financial, m aterial or
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technological support for, or financial or other services to or in support of” or are “otherwi se associated” with them.1
Individuals or entities designated under E.O. 13224 are labeled “Specially Designated Global Terrorists.” In § 10 of the Executive Order, the Persident states that under the Order no prior notice of a listing or designation needs to be provided tothose with a presence in the United States because of the targeted organization’s abilityto transfer funds or assetsinstantaneously, which would render the blocking measures ineffectual.
In October, 2001, the Patriot Act amended the IEEPA. It added the phrase “block pending investigation” after the word “investigate” in50 U.S.C. § 1702 (a)(1)(B). The amendment permitted the Treasury Secretary to im pose all the blocking effects of a designation, including free zing an organization’s assets indefinitely and crim inalizing all its transactions, without designating t he organization a SDGT. The Treasury only needs to assert that it is investigating whether the entity should be designated. The am endment also provided that an agency record containing classified information could be “submitted to the reviewing court ex parte and in camera.”
Designation as a specially designated global terrorist immediately results in the blocking of the designee’s property and interests in property within the United States or in the control ofUnited States persons. It also prohibits all transactions with designated entities, including m aking or
1 In Humanitarian Law Project v. U.S. Department of Treasury, 463 F. Supp. 2d 1049, 1070-71 (C.D. Cal. 2006), the court declared unconstitutional the “otherwise associated” criterion. The Treasury Department subsequently issued a regulation that defined that provision as “(a) To own or control; or (b) To attempt, or conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services to.”
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receiving any contribution of funds, goods or servi ces to or for the benefit of those persons. Executive Order 13224 specifically prohibits all humanitarian donations.
The Treasury Department promulgated regulations implementing E.O.13224 on June 6, 2003. The regulations set forth the procedures for imposing civil and criminal penalties on United States persons who engage in any transaction with any entity that has been designated or blocked pending investigation. With respect to a designation, 31 CFR § 501.807 permits designated entities to seek administrative reconsideration by OFAC after they have been designated and had their property frozen.
OFAC’s Block Pending Investigation of KindHearts On February 19, 2006, OFAC blocked all of KindHearts’ assets a nd property pending investigation into whether it was subject to designation under E.O. 13224. On the sam e day i t blocked KindHearts’ assets, the governm ent executed search warr ants at KindHearts’ Toledo headquarters and the residence of its President,Khaled Smaili. It removed all KindHearts’ records, computers and several boxes of publications and docum ents. Before executing those search warrants, the Department of Justice obtained two grand jury subpoenas requiring: 1) Ernst & Young to produce documents relating to KindHearts and 2) a member of KindHearts’ Board of Directors to produce all records of KindHearts from January 1, 2002, to February 17, 2006. On issuing the block, OFAC sent a “blocking notice” to KindHearts. The notice stated:
You are hereby notified that all property and interests in property of KindHearts . . . i ncluding its U.S. representative office and all other offices worldwide, are blocked pending investigation into whether KindHearts is subject to designation pursuant to Executive Order 13224 . . . for being c ontrolled by, acting for or on behalf of, assisting in or providing financial or material support to, and/or otherwise being associated with Hamas.
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The notice also explained KindHearts did not receive prior notice of OFAC’s determination to block its assets pending investigation because itcould have transferred its funds and assets, thus rendering the sanctions ineffectual. It stated that if KindHearts believed OFAC took this action in error, and wanted to challenge it, it could send a letter to the at tention of the Director of OFAC explaining KindHearts’ views and providing evidence.
That same day, the Treasury Department posted a press release on its website announcing the blocking of KindHearts’ assets. The press releas e also stated that KindHearts’ officials and fundraisers had “coordinated w ith Hamas leaders and m ade contributions to H amas-affiliated organizations” including such organiza tions in the West Bank and Lebanon. The press release asserted that KindHearts was founded to replace the Ham as-affiliated Holy Land Foundation for Relief and Development [HLF] and the al-Qaida-affiliated Global Relief Foundation [GRF].2
As a result of the block, KindHearts’ assetasnd property, including about one million dollars in bank accounts, became frozen indefinitely. Through its blocking order, OFAC effectively shut the organization down.
In April, 2006, KindHearts’ attorney, Jihad Smaili [brother of Khaled Smaili], filed a letter in response to the block, but OFAC failed to respond to it. On Novem ber 29, 2006, KindHearts counsel requested a copy of the full administrative record being used by OFAC in its investigation. It received no response.
OFAC’s Provisional SGDT Designation of KindHearts
2 By prior action against HLF and GRF, the government had put those organizations out of operation prior to the founding of KindHearts.
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On May 25, 2007, m ore than a year aft er Jihad Smaili’s initial letter, and m ore than six
months after his follow-up letter, OFAC no tified KindHearts that OFAC had provisionally
determined to designate KindHearts a specially designated global terrorist. In that letter it for the
first time acknowledged receiving KindHearts’ challenge to the block pendi ng investigation.
OFAC’s letter stated,
We have received Jihad Sm aili’s April 24, 2006 letter to . . . OFAC requesting reconsideration of OFAC’s decision to block the property and property interests of KindHearts . . . pe nding investigation into whether KindHearts should be designated as a Specially Designated Global Terrorist . . . Si nce receipt of that letter, OFAC has completed its investigation into whether KindHearts should be designated as an Specially Designated Global Terrorist and has provisionally determined that designation is appropriate.
Accompanying OFAC’s letter were thirty-five unclassified and non-privileged documents
on which, according to OFAC, it had relied in m aking the provisional determ ination. OFAC
acknowledged it also relied on other “classified and privileged documents obtained to date . . .
not authorized for disclosure, including m aterial obtained or derived pursuant to” the Foreign
Intelligence Surveillance Act [FISA], 50 U.S.C. § 1801 et seq.
The OFAC letter also included an unclassif ied three-page sum mary of the classifi ed
evidence. It provided no explanation of the specific charges it was considering against KindHearts
or why it thought the evidence supported a potential designation.
The letter stated KindHearts could “present toOFAC any evidence or other information that
it [wanted] OFAC to consider before making a final determination with respect to designation.” It
explained “OFAC [would] cons ider any such information, as well as the inform ation described
above in making a final determination.” It also noted that if it “decide[d] toconsider any additional
unclassified, non-privileged materials in making this determination, it [would] advise KindHearts
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of that fact, provide KindHearts with copies of the materials, and give KindHearts an opportunity
to respond to them .” OFAC initially gave KindHear ts thirty days to respond to i ts provisional
determination.
KindHearts sought access to the full classified and unclassified adm inistrative record to
defend itself, and an extension of time in which to respond to OFAC’s unclassified submission.
On June 14, 2007, KindHearts requested access t o its own records in the governm ent’s
possession. OFAC waited two months, until August 14, 2007, before notifying KindHearts’ counsel
that OFAC possessed only a few of the records. The United States Attorney’s office had the rest of
the records. That Office refused to provide KindHearts with a copy of the documents.3
On June 25, 2007, KindHearts’ counsel sent OFAC a twenty-eight page pr eliminary
submission in which KindHear ts attempted to, in its words, “guess at and address OFAC’s
concerns.” It attached to that a 1369-page submission of supporting evidence. OFAC never
responded to this submission.4
3 On April 11, 2008, more than two years after the search of KindHearts’ office and seizure of its records, the United States Attorney’s Office provided KindHearts with an electronic copy of a subset of the seized documents, but did so subject to stringent conditions. Under a protective order, KindHearts members and officers could not view the documents without court approval, and KindHearts counsel could not print or electronically copy any documents. After KindHearts filed this lawsuit, the government agreed to amend the order to permit KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.
On January 30, 2009, I granted KindHearts’ motion to modify the amended protective order. I required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. OFAC allowed KindHearts’ counsel to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel.
4 OFAC claims it “misplaced” the June 25, 2007, submission. It does not, however, state what constituted such “misplacing,” how it happened, or may have happened, or when, if ever,
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On June 27, 2007, KindHearts asked OFAC to perform a declassification review of the classified evidence on which it relied in issuing the blocking notice. In a letter da ted August 10, 2007, OFAC agreed with KindHearts’ request, and staetd it would give KindHearts thirty days after the completion of declassification review to submit a response. OFAC informed counsel that it could not state when review would be com pleted, and denied KindHearts’ counsel interim access to classified information.
OFAC reported no progress on the declassification review in the fourteen months between its June 27, 2007, agreement to conduct declassification review and the filing of this lawsuit. After KindHearts filed suit, the government, during a telephone call with KindHearts’ counsel on October 20, 2008, indicated it could complete the declassification review within thirty days.
On August 13, 2007, KindHearts requested further clarification of the charges against it and an extension of time until f orty-five days af ter the com pletion of the declassif ication review. KindHearts stated it needed the extension to receive meaningful process.
On August 16, 2007, OFAC inform ed KindHearts that it could contact Ki ndHearts’ employees; it also stated that any KindHearts documents in posses sion of such em ployees constituted blocked property. Use of such documents would require a license f rom OFAC, and existing regulations require counsel to provide bsaic identifying information regarding the property.5
On October 26, 2007, and Decem ber 20, 2007, KindHearts’ counsel objected to OFAC’s requirement that it identify blocked property in its possession. Counsel did not request a license to use blocked property.
and how it located the submission. 5 The parties dispute what information the government requires regarding the property. 10

On December 26, 2007, OFAC issued a license all owing KindHearts counsel to receive copies of blocked documents necessary for them to provide legal services to KindHearts.
For over two years, OFAC did not allow KindHearts to use its own funds to pay attorneys’ fees. OFAC asserted KindHea rts could pay for legal services only if those paym ents did not originate from its blocked funds. Immediately after the block, Jihad Smaili, KindHearts’ attorney, corresponded with OFAC regarding the release of blocked funds to pay attorney fees, but OFAC maintained that KindHearts could only pay for attorneys from “fresh funds” (funds raised abroad), or by obtaining a license to create a legal defenes fund. Smaili resigned, and Lynne Bernabei, of the law firm Bernabei & W achtel PLLC, and Profe ssor David Col e applied for and were granted licenses to represent KindHearts. OFAC denied themfunding fromblocked assets. In late June 2008, Bernabei & Wachtel sought the assistance of the ACLU.
As of June, 2008, after its policy on attorney s fees was challenged as unconstitutional in other litigation, OFAC, after adopting a policy change, permits KindHearts to use a limited amount of its funds to pay for legal expenses. It can pay up to two lawyers $7000 each for proceedings at the administrative level, and an additional $7000 each for trial level proceedings. It can pay up to $5000 each for appellate proceedings. I n March, 2009, after Bernabei & W achtel applied for funding, OFAC granted $27,040 from KindHearts’ blocked funds for legal fees.
In December, 2008, OFAC produced declassified versions of the block and provisional determination memoranda. Since then, the government has declassified portions of block exhibits. In January, 2009, it declassified several portions of several paragraphs in the block memorandum. On March 13, 2009, OFAC declassified one of several bases for its block and threatened designation.
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Since February 19, 2006, when OFAC first notified KindHearts of the block pending investigation, OFAC has not designated KindHearts a SDGT. 6 For almost three years OFAC has blocked KindHearts’ property and property interests nad criminalized all transactions with it. OFAC has effectively shut KindHearts down.
STANDARD OF REVIEW Both plaintiff and defendants move for summary judgment. A court must enter summary judgment “against a party who fails to m ake a showing sufficient to establish the existence of an element essential to that party's case, and on whichthat party will bear the burden ofproof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the initial responsibility of informing the district court of its m otion's basis, and identifying the record' s portions that demonstrate the absence of a genuine issue of material fact. Id. at 323. The nonmoving party “must [then] set forth specific facts showing t hat there is a genuine issue f or trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed.R.Civ.P. 56(e)). In deciding the motion for summary judgment, the court will believe the non-moving party's evidence as true, it will resolve all doubts againsthe non-moving party, it will construe all evidence in the light m ost favorable to the non-m oving party, and it will draw all inferences in the non-moving party's favor. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451,456 (1992). Defendants move to dismiss plaintiff’s claims under Rule 12(b)(6). A court “must accept all well-pleaded factual allegations ofthe complaint as true and construe the complaint in the light most
6 On October 9, 2008, I enjoined OFAC from designating KindHearts a SDGT. KindHearts sought the injunction to maintain the status quo and avoid any possible adverse effects from such designation during the pendency of this litigation.
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favorable to the plaintiff.” Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002) (citingTurker v. Ohio Dep't of Rehab. & Corr., 157 F.3d 453, 456 (6th Cir.1998)); Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir.1994). The court is not bound to accept as true unwarranted f actual inferences, Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987), or legal conclusions unsupported by well-pleaded facts.Teagardener v. Republic-Franklin, Inc. Pension Plan,909 F.2d 947, 950 (6th Cir.1990).
A Rule 12(b)(6) m otion to dism iss is directed solely to the com plaint and any exhibits attached to it. Roth Steel Products v. Sharon Steel Corp., 705 F.2d 134, 155 (6th Cir. 1983). The merits of the claims are not at issue. Consequently, a complaint will be dismissed pursuant to Rule 12(b)(6) only if there is no law to support the claims made, the facts alleged are insufficient to state a claim, or on the face of the complaint there is an insurmountable bar to relief. See Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 702 (6th Cir.1978).
DISCUSSION 1. Fourth Amendment KindHearts argues that OFAC’s block pending investigation is an unreasonable seizure in violation of the Fourth Amendment. In blocking KindHearts’ assets, OFAC acted without a prior judicial warrant. It purports, however, to have acted on reasonable suspicion that KindHearts met the criteria for designation under E.O. 13224. Neither the IEEPA nor E.O. 13224 requires a wa rrant or probable cause to effect a block pending investigation. The government argues that the economic sanctions authorized by that statute and the Executive Order are not “seizures” and therefore the Fourth Am endment is inapplicable
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Alternatively, the government disputes the contention that traditional warrant and probable cause requirements apply to blocks pending investigation.
A. The Block Pending Investigation is a Fourth Amendment “Seizure” The first inquiry is whether OFAC’s block is a“seizure” in Fourth Amendment terms. If the block is not a “seizure,” the Fourth Amendment does not constrain the government’s conduct. The Fourth Am endment protects “the right of the people t o be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” U.S. Const. amend. IV. The government seizes property when it creates “some meaningful interference with an individual’s possessory interests in that property.” Soldal v. Cook County, Ill., 506 U.S. 56, 61 (1992); see also Horton v. California, 496 U.S. 128, 133 (1990); U.S. v. Jacobsen, 466 U.S. 109, 113 (1984). Even “brief detentions of personal effects,” such as ahsort investigative detention of luggage at an airport, are “seizures” subject to Fourth Amendment scrutiny. U.S. v. Place, 462 U.S. 696, 706 (1983). i. OFAC Blocking Actions Meet the Soldal Definition of “Seizure” The government need not take possession of or title to property to “seize” it; interference with the target’s possessory interesttriggers Fourth Amendment scrutiny. Illinois v. McArthur, 531 U.S. 326, 330 (2001). In McArthur, officers, who had probable cause to believe a suspect’s home contained marijuana, prevented him from re-entering his home for the two hours needed to obtain a search warrant. Id. at 331-332. Even though the officers hadtaken nothing during that period, the Court applied Fourth Amendment scrutiny to the “temporary seizure” of the suspect’s home. Id. at 330-31. Those courts that have considered FourthAmendment challenges to OFAC blocking actions under the IEEPA and E.O. 13224 disagree as to whether bl ocks are Fourth Amendment seizures.
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One view is that asset-bl ocking is not a seizure. Islamic Am. Relief Agency v. Unidentified FBI Agents, 394 F. Supp. 2d 34, 47- 48 (D.D.C. 2005); Holy Land Foundation for Relief and Development v. Ashcroft, 219 F. Supp. 2d 57, 79 (D.D.C. 2002).
In upholding the governm ent’s action in those cases, the courts applied the standard for identifying a taking under the Takings Clause of the Fifth Am endment, rather than the Soldal standard for a Fourth Amendment seizure. In Holy Land, supra, 219 F. Supp. 2d at 79, the court’s analysis centered on whether an OFAC asset-blocknig procedure is a permanent forfeiture or causes title to pass to the government. Id.
As support for its Takings Clause approach, the court In Holy Land, citing Tran Qui Than v. Regan, 658 F.2d 1296, 1301 (9th Cir. 1981),IPT Co. v. U.S. Dept. of Treasury, 1994 WL 613371, at *5-6 (S.D.N.Y.), and Can v. U.S., 820 F. Supp. 106, 109 (S.D.N.Y. 1993), stated that, because asset blocking does not “vest” title in the government, it is not a “forfeiture.” 219 F. Supp. 2d at 79. None of the cases cited by Holy Land involves, however, a Fourth Amendment claim.
Likewise, in Holy Land, the court cited Cooperativa Multiactiva de Empleados de Distribuidores de Drogas v. Newcomb, Civ. No. 98-0949, slip op. at13-14 (D.D.C. Mar. 29, 1999), for the statem ent that “blocking bars transactions but does not confiscate property a nd is not tantamount to a forfeiture.” Id. Plaintiffs in Cooperativa Multiactiva, however, raised no Fourth Amendment challenge to the blocking notice. Id. at 4. In Cooperativa Multiactiva, the court discussed questions of title and forfeiture to determine whether a blocking notice was a “fine” and compliance with the federal forfeiture statute, not to determine whether it was a “seizure.”Id. at 2122.
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Finally, in Holy Land, the court cited D.C. Precision Inc. v. U.S., 73 F. Supp. 2d 338, 343 n.1 (S.D.N.Y.1999), for the proposition that “assetsblocked by the government are not seized.” Id. Despite the use of the word “seized,” the cited passage inD.C. Precision refers to a Takings Clause claim. Id. Plaintiffs did not raise a Fourth Amendment claim in D.C. Precision. Id.
In contrast to Holy Land and related cases, the court in Al-Haramain Islamic Foundation, Inc. v. U.S. Dept. of Treasury, 585 F. Supp. 2d 1233, 1263 (D. Or. 2008) , concluded that OFAC asset-blocking is a seizure subject to Fourth Amendment analysis. Reliance on the Takings Clause was inappropriate, the court stated, because “[t]he Fourth Amendment imposes a lower threshold than does the Fifth Amendment.” Id. at 1262. A blocking order, the court stated, would be a taking only “if it resulted in an appropriation of properyt for the government’s use” or if the government’s actions eliminated “all economically valuable use of the property.” Id.
A Fourth Am endment seizure, in contrast, does not result in passage of title to the government or even necessarily permanent deprivation. A seizure affects a possessory interest: Id. at 1263. A Fourth Am endment seizure may often lead to perm anent deprivation of the property “taken” by government officers, but that is not always so. Indeed, Fed. R. Crim. P. 41(g) provides a means for seeking return of seized property.
Viewing the consequences of a blocking orderin a Fourth Amendment light, the court inAl Haramain stated that because “[e]ven a temporary deprivation of property” constitutes a seizure, an OFAC blocking action affects Fourth Am endment rights. Id. If merely “holding luggage for 90 minutes” constitutes a seizure, then surely placing anindefinite freeze on all an entity’s assets is as well. Id.
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This conclusion is not only reinforced, but, indeed, made irrefutable on consideration of the fact that the very purpose of an OFAC blocking action is to “depriv[e] the designated person of the benefit of the property, including services, that might otherwise be used to further ends that conflict with U.S. interests.” Al Haramain, supra, 585 F. Supp. 2d at 1263. An OFAC block interferes with possessory rights, and is, in Fourth Amendment terms a seizure.
ii. Whether the History of the IEEPA, TWEA and the Fourth Amendment Justify Excluding OFAC Blocking Actions from Fourth Amendment Scrutiny The government offers two arguments as to why I should follow the decision inHoly Land and withhold Fourth Amendment scrutiny froma block pending investigation. First, the government argues that the Supreme Court historically has never applied the Fourth Amendment to imposition of economic sanctions under the TWEA or the IEEPA. Therefore, the government contends, I should not do so in this case. Second, the government urges that deference tothe executive’s unique role in foreign affairs should override any judicial impulse to invoke the Fourth Amendment. The government bases this argument on the history of TWEA and IEEPA economic blocking actions. Neither argument offers a com pelling reason for foregoing Fourth Am endment analysis, much less for departing from the Supreme Court’s definition of “seizure” in Soldal. Looking to history for support for its first conetntion, the government states, “[i]n the nearly 100 years since the TWEA was passed, no Court has held that the executive must obtain a warrant to conduct an econom ic blocking authorized by either TWEA or IEEPA.” [Doc. 36, at 63]. To undertake a Four th Amendment analysis, the governm ent claims, would be to disregard a
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“systematic, unbroken, executive practice, long pur sued to the knowledge of Congress [and the courts] and never before questioned.” Id.
For support, the governm ent cites several cas es in which the Suprem e Court, i n the government’s view, has consistently not subjected blocking actions to Four th Amendment. See Regan v. Wald, 468 U.S. 222 , 235 (1994) (upholding restrictions on United States citizen travel to Cuba under the TWEA); Dames & Moore v. Regan, 453 U.S. 654, 654 (1981) (IEEPA authorizes the president to nullify attachm ents against prope rty of the Iranian governm ent and to transfer Iranian assets); Orvis v. Brownell, 345 U.S. 183 (1953) (executive order blocking assets of Japanese nationals under TWEA prevents attachment by creditor of Japanese nationals); Propper v. Clark, 337 U.S. 472 (1949) (upholding f reeze on Austrian property under the TW EA, despite inconvenience freeze caused to American citizens).
The government accurately depicts these cases and describes their results. What is missing, though, is acknowledgment that in those cases none of the government’s adversaries asserted a Fourth Amendment interest. Like lower courts, see U.S. v. Collier, 246 Fed. Appx. 321, 334-335 (6th Cir. 2007) (unpublished disposition) (failingsua sponte to consider Fourth Amendment issues not error); Hatmann v. Prudiential Ins. Co. of America, 9 F.3d 1207, 1214 (7th Ci r. 1993) (“Our system . . . is not gearedto having judges take over the functionsof lawyers, even when the result would be to rescue clients from their lawyers’ m istakes), the Supreme Court routinely does not consider issues not raised by the parties. Absence of discussion of the Fourth Am endment in the cases cited by the government says nothing about how a Fourth Amendment analysis should come out here.
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Failure of plaintiffs in the those cases probably did not arise from lawyerly oversight: the economic sanctions targeted foreign governments, and neither foreign governments nor non-resident foreign nationals enjoy Fourth Amendment protection. In U.S. v. Verdugo-Uriquidez, 484 U.S. 259, 265 (1990), the Suprem e Court held that the Fourth Am endment does not apply to search by American authorities of the Mexican residence of a Mexican citizen and resident. The Court, on examining the text of the Am endment, concluded that its central m otivation was to “protect the people of the United States against arbitrary action by their own government.”Id. Thus, the Fourth Amendment, the Court stated, does not protect aliens outside United States territory, nor does it protect foreign governments. Id.
KindHearts’ situation differs strikingly and significantly from that of the f oreign governments and foreign assets at issue in the TWEA and IEEPA cases on which the government relies.7 KindHearts is an American corporation based in Toledo, Ohio. Its assets, presumably, came from persons resident in this country. Those assetswere in this country when the government seized them. This case does not involve a nation-targeted embargo.
KindHearts is indisputably one of “the people” protected by the Fourth Amendment. If the Constitution affords KindHearts no protection f rom unreasonable searches and seizures, whom among “the people” does it protect, and who among the people can be certain of its protection?
7In Dames & Moore, Wald and Propper, the government blocked assets of foreign governments. Its blocking actions affected American citizens, but only to the extent that they conducted business transactions involving the property of foreign governments and nationals. Because the targets of those sanctions were not clearly among “the people” whom the Fourth Amendment protects, it is unsurprising that the parties did not bring Fourth Amendment claims. See Al-Aqeel v. Paulson, 568 F. Supp. 2d 64, 70-71 (D.D.C. 2008) (concluding that Saudi Arabian citizen subject to OFAC asset seizure may not bring a Fourth Amendment claim because claimant alleged interference with overseas assets only).
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The government’s argument, moreover, ignores compelling parallels between the instant case and the colonial-era activities inspiring the F ounders to include the Fourth Ame ndment in our fundamental charter of liberties. Indiscrim inate customs searches, unregulated by judicial approbation or oversight, were the “f irst inducement” to Am erican attitudes against such promiscuous searches and seizures, W illiam J. Cuddihy, The Fourth Amendment: Origins and Original Meaning, 253 (2009). Despised writs of assistance allowing customs officials to employ unfettered discretion in their search for and seizure of sm uggled goods and contraba nd were a “major cause of the Revolution.” Tracy Macl in, The Complexity of the Fourth Amendment: A Historical Review, 77 B.U.L.R. 925, 945 (1997); see also Nelson B. Lasson, The History & Development of the Fourth Amendment to the U.S. Constitution, 51 (1937).
In the late 1750s and early 1760s, a controversy erupted in the Massachusetts Bay Colony over gubernatorial warrants and writs of assist ance to enforce custom s laws. Great Britain, embroiled from 1754-1763 in the Seven Years’ War, enacted customs laws proscribing American commerce with Spanish and French colonies. Great Britain also im plemented restrictive trade relationships between itself and the North American colonies. Those laws favored British interests at the expense of colonial merchants. Lasson, supra, at 52; Cuddihy, supra, at 378-380. Evasion of those laws and restriction – sm uggling – be came more than just a colonial pastim e: for m any American merchants it was the way o f life. It was, as well, often of benefit to Britain’s enemies commercially. Lasson, supra, at 52.
In response to this unaccepta ble situation, G overnor Shirley of Massachusetts issued warrants giving customs officials authority forcibly to enter houses and other buildings, and, once inside, to exercise unfet tered discretion to search for and seize contraband. Maclin, supra, 77
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B.U.L.R. at 945; Cuddihy, supra, at 378. Public rea ction to this exercise of extrem e executive authority caused the Governor to require customs officers, before they could conduct such searches, to obtain Writs of Assistance from Crown judges. Maclin, supra, 77 B.U.L.R. at 945.
Unlike the search w arrants with which every American judge, prosecutor and def ense attorney is now familiar, colonial Writ of Assistance were “a continuous license and authority” valid for the “whole lifetime of a reigning sovereign . . . em power[ing] the officer his deputies and servants to search, at their will, wherever theysuspected uncustomed goods to be, and to break open any receptacle or package falling under their suspecting eye.”Id. The judges of the Superior Court of Judicature who issued Writs of Assistance lacked power to refuse to issue the writs or to review specific searches or seizures. Maclin, supra, 77 B.U.L.R at 946; Cuddihy, supra, at 379.
When King George II died in 1760, all previ ously-issued writs expired. Customs officers sought new writs. Id. at 380-381. A merchants’ association, The Society for Promoting Trade and Commerce Within the Province, retained James Otis Jr. to challenge the reissuance.Id. at 380. This led to the decision in Paxton’s Case. Culhuddy, supra, at 380. That case “intensified publi c antipathy to the writs of assistance” and triggered a flood of public com mentary on search and seizure. Id. at 395.
Challenging Writs of Assistance, Otis and oht er critics delineated and condemned the abuses left in their wake. The Writs, as a commentator in the Boston Gazette wrote, allowed writ-holders to “break open doors, trunks, chests, and boxes – alms houses, brideswells, jails or churches – never mind a dwelling house” – this listing making clear that no premises were safe. Id. at 396. Another commentator feared that writ-holders would look unhcecked “wherever he shall PLEASE to suspect uncustom’d goods are lodg’d.” Id.
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Despite these concerns and objections and Otis’s arguments, the court re-issued the Writs of Assistance. Id. at 395.
Though unsuccessful, Otis’s arguments were the “first recorded declaration” of the Fourth Amendment’s requirement of a specific warrant.Id. at 382. Others in England and the colonies had criticized the writs of assistance, general warrants, and other f orms of indiscriminate search and seizure. Otis first contended that specific warrants – in Fourth Am endment terms, warrants “particularly describing the place to be searched and things to be seized” – as alone appropriate if the sanctity one’s home and security of one’s possessions were to be assured under, as Otis argued, the “British Constitution, English common law, natural law, and the higher law.” Id. at 387.
As with IEEPA and TWEA, the initial impetus for executive action at the outset of the era leading to Paxton’s Case was to deprive the enemies of economic benefits: restricting trade with the enemy was the purpose of both Governor Shirley’ s wartime writs to custom s officers and the TWEA. In time, these purposes, and the authorityby which government sought to accomplish them led to a practice of far-reaching and open-ended searches for and seizures of private property.
Unlike the system under which OFAC has operated thus far, the colonial system came to involve judges in the issuance of the writs. But their participation did little to control the duration of the authority to conduct searches, and did not ecnompass judicial involvement or oversight during implementation of that authority.
The centrality ofindiscriminate customs searches and seizures to the development, purposes and meaning of the Fourth Am endment is of special relevance to this case . Like James Otis, the attorneys for KindHearts claim for their client “the right . . . to be secure in their . . . papers and
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effects.” Also like Otis, they argue that how th e government has been exercising its authority to regulate commercial affairs can violate that right and destroy that security.
To find the Fourth Amendment inapplicable to OFAC blocking actions would disregard the Amendment’s history and its role as a bulwark against the abuses and excesses of unchecked governmental power.
iii. Whether Deference to the Executive Regarding Foreign Affairs Requires Excluding OFAC Blocking Actions
From Forth Amendment Scrutiny The government’s second argument is that deference to the executive should cause m e to refrain from viewing its conduct through the lens of the Fourth Am endment. Courts, in the government’s view, ought not involve t hemselves with “the exercise of the executive’s m ost uniquely reserved powers – conducting foreign affairs and protecting national security.” [Doc. 36, at 36]. Instead, I should heed Justice Jackson’s statement in his concurring opinion in Youngstown Sheet & Tube v. Sawyer, 343 U.S. 579, 635-36 (1952), that “A seizure executed by the President pursuant to an Act of Congress would be supported by the strongest presumptions and the widest latitude of judicial interpretation, and the burdenof persuasion would rest heavily on any who might attack it.”8 The defendants claim that this means that the President’s powers “can indeed be so broad and uniquely reserved to the president that questions of Fourth Amendment applicability do not come into play.” [Doc. 73, at 34]. Defendants also argue that subjecting OFAC’s actions to Fourth Amendment strictures is improper because when the President “execute[s] seizures with explicit
8Justice Jackson joined in the judgment of the majority that President Truman lacked constitutional authority to seize a steel company’s assets via Executive Order.
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authorization by congress, the President’s “author ity [is] at its ma ximum.” [Doc. 73, at 35]. The government supports this assertion with a further quotation from Justice Jackson:
In the practical working of our governm ent we have already evolved a technique within the framework of the Constitution by which normal executive powers may be considerably expanded to m eet an em ergency. Congress may and has granted extraordinary authorities which lie dormant in normal times but may be called into play by the Executive in war or upon proclamation of a national emergency. Youngstown Sheet & Tube, supra, 343 U.S. at 652. Defendants also argue that U.S. v. Curtiss-Wright , 299 U.S. 304 (1936), stands for the principle that the “strict limitation” on federal powers over “internal affairs” does not apply in the realm of “external affairs.” [Doc. 73, at 35]. The government’s reliance on the propositions expressed by Justice Jackson and inCurtissWright conflates two discrete questions about the limitations of federal executive power. The first question in evaluating the validity of executive action is whether any of the recognized sources of executive authority – Article II, powers inhere nt in national sovereignty or a valid delegation of authority from Congress – affirm atively empower the executive to take action, such as a bloc k pending investigation. A second, separate question is whether a the manner in which the executive has exercised it authority in a specific instance violates any of the restrictions on federal authority protecting individual liberties. In Youngstown Sheet & Tube and Curtiss-Wright the Court dealt exclusively with the first question. In this case, however, the first question is not at issue because the parties do not dispute that the executive has the general power to block pending investigation. The issue here – whether, in this instance, OFAC has exercised its authorityin violation of the Fourth Amendment – involves the second question.
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When Justice Jackson in Youngstown Sheet & Tube described the President’s “authority at its maximum” and the need for “the widest latitudeof judicial interpretation,” he was describing the President’s power to act vis-a-vis Congress, not restrictions on presidential power imposed by the Bill of Rights. See 343 U.S. at 635. This is apparent fromthe context of the quotation, which is that when Congress expressly authorizes the action, thePresident possesses all his authority “in his own right plus all that Congress may delegate.” Id.
Justice Jackson also stated that if a courtshould invalidate presidential action that Congress has expressly authorized, “it usually m eans that the Federal Governm ent as an undivide d whole lacks power.” Id. Legislation cannot authorize the President to ignore the Bill of Rights. Under the Fourth Amendment, the federal government “as an undivided whole” lacks entirely the power to conduct unreasonable searches and seizures. Id.
That the Court in Youngstown Sheet & Tube refers to the President’s actions as a “seizure” in no way suggests that that caseinvolved a Fourth Amendment search or seizure. The Steelworkers Union had announced its members would strike after unsuccessful labor-management negotiations. Id. at 864. On the eve of the strike, President Truman ordered the Secretary of Commerce to assume control of the steel mills and keep them running. Id. at 865.
The President’s actions, and the governm ent’s operation of the m ills temporarily did not deprive the shareholders of any of the their por perty interests in the company. The company did not claim that President Truman had engaged in an unreasonable seizure under the Fourth Amendment. The issue, rather, was whether the President had the authority to adopt the “technique of seizure” as a “method of solving labor disputes,” even though Congress had expressly declined to incorporate this technique in the Taf t-Hartley Act. Id. at 866. The Court noted that Congress’s power to
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authorize this method was “beyond question” because Congress may “authorize the taking of private property for public use.” Id. at 867. In view of the absence inYoungstown Sheet & Tube of citation to, argument about, discussion of and adjudication on the basis of Fourth Amendment principles and doctrine, the decision in that case, not the Fourth Amendment, is inapplicable here.
Similarly, the Court’s opinion in Curtiss-Wright likewise addressed whether the President possesses inherent, unenumerated powers over fore ign affairs – not whether such powers were subject to Bill of Rights limitations. 299 U.S. at 319.
In Curtiss-Wright, an arms manufacturer was charged withconspiring to sell arms to Bolivia in violation of a Joint Resolution of Congress authorizing the President to crim inalize such arms sales and a Presidential proclamation issued under that authority.Id. at 312-313. The Court rejected the company’s challenge to Congress’s delegation of authority to the PresidentI.d. at 315-316, 333. The federal government, the Court held, has and can , with regard to the nation’s foreign affairs, exercise the powers inherent in national sovereignyt . Such exercise did not violate the rights inuring to the states. Id. at 316.
Further, because “[t]he President is the sole organ of the nation in its external relations, and its sole representative with foreign nations,” he may exercise powers “in the field of international relations” without needing “a basis for its exercise in an act of Congress.” Id. at 220-221.
The Court’s opinion inCurtiss-Wright makes indisputably clear fundamental constitutional principles of federalismand separation of powersendow the President with extensive, and generally unilateral authority over our foreign affairs, especi ally with regard to our relations with other countries. Though the Court upheld the exercise of taht authority against an American company and others engaged in international commerce, it did notaddress, much less declare, that such authority,
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if it impinged on freedoms guaranteed under the Bill ofRights, was in all circumstances and for all times unrestricted and uncontrollable.
Contrary to defendants’ claims, courts have held that the executive’s domestic actions – even when taken in the name of national security – must comport with the Fourth Amendment. See, e.g. U.S. v. U.S. Dist. Court,407 U.S. 297, 320 (1972) (“the President’sdomestic security role . . . must be exercised in a manner compatible with the Fourth Amendment); Coolidge v. New Hampshire,403 U.S. 443, 461 (1971) (national security “is not a tlaisman in whose presence the Fourth Amendment fades away and disappears.”); U.S. v. Bin Laden, 126 F. Supp. 264, 273 (S.D.N.Y. 2000) (“even in the exercise of his foreign affairs power, the President is constrained by other provisions of the Constitution.”).
OFAC’s blocking action against KindHearts, therefore, is, despite the deference generally due to presidential acts relating to our ofreign relations and affairs, subject tosome degree of Fourth Amendment scrutiny. This case raises questions about the extent and consequences of such scrutiny.
B. Whether OFAC Must Have a Warrant and Probable Cause for the Seizure to be Reasonable Under the Fourth Amendment The next issue is whether OFAC satisfied the requirements of the Fourth Amendment when it blocked KindHearts’ assets pending investigation. Generally, the Fourth Am endment permits seizures only on the basis of probable cause and audj icial warrant listing, with particularity, the item or items to be seized. Place, supra, 462 U.S. at 701. The government contends, inter alia, that its actions were lawful, and could be undertaken on the basis of reasonable suspicion, rather than probable cause to believe that KindHearts engaged in acts proscribed by the IEEPA and E.O. 13224.
i. Generally, the Fourth Amendment Requires a Warrant and Probable Cause
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Defendants argue that this court should jettiosn the probable cause and warrant requirements in favor of an open-ending balancing of interests. Defendants contend that courts are free to apply an indeterminate “reasonableness” inquiry in lightof the doctrine that “the Fourth Amendment does not proscribe all searches and seizures, but only those that are unrea sonable.” Skinner v. Railway Labor Executives Ass’n, 489 U.S. 602, 619 (1989).
The defendants base their argum ent on the fact that the Fourth Am endment contains two textually distinct clauses, the reasonableness clause barring “unreasonable searches and seizure” and a warrant clause stating that “no Warrants shall issue, but upon probable cause.” U.S. Const. amend. IV. Reasonableness is the ultimate standard under the Fourth Amendment. Pennsylvania v. Mimms, 434 U.S. 106, 108-109 (1977) (“[R]easonableness in all the circum stances of the particular governmental invasion of a citizen’s personal security” is the “touchstone” of Fourth Amendment analysis); Soldal, supra, 506 U.S. at 61-62. This does not, howeverm, ean that courts always are free to conduct open-ended balancing of interests whenever the government has seized property.
On the contrary, searches and seizures are usually “reasonable” only when conducted with a judicial warrant supported by probable cause. Place, supra, 462 U.S. at 701. The reasonableness clause under the Fourth Amendment “derives content and meaning through reference to the warrant clause.” U.S. Dist. Court, supra,407 U.S. at 309-310. Though the ultimate inquiry is reasonableness, “the Amendment does not leave the reasonableness of most seizures to the judgment of courts or government officers: the Framers of the Amendment balanced the interests involved and decided that a seizure is reasonable only if supportedby a judicial warrant based on probable cause.”Place, supra, 462 U.S. at 722 (Blackmun, J. concurring). Under most circumstances searches and seizures conducted without a warrant are “per se unreasonable under the Fourth Amendment – subject only
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to a few specifically established and well-delineated exceptions.” Katz v. U.S., 389 U.S. 347, 357 (1967). Thus, as stated inPlace, supra, 462 U.S. at 701, “In the ordinarycase, the Court has viewed a seizure of personal property asper se unreasonable within the meaning of the Fourth Amendment unless it is accomplished pursuant to a judicial warrant issued upon probable cause and particularly describing the items to be seized.”
Two recognized exceptions to the warrant requirement might, however, apply in this case. First, “special needs” warrantles searches a nd seizures need only be reasonable unde r all the circumstances; no warrant or probable cause is required. See, e.g., Griffin v. Wisconsin, 483 U.S. 868, 873 (1987) (upholding warrantless, suspicionless searches of probationers’ homes); Illinois v. Lidster, 540 U.S. 419, 426 (2004) (uphol ding warrantless, suspicionless stops at a roadblock to gather information about a hit-and-run accident).Second, if exigent circumstances exist, the warrant requirement, but not the requirement of probable cause, may be excused. See, e.g., U.S. v. Johnson, 22 F.3d 674, 680 (6th Cir. 1994) (describing general types of exigencies).
ii. Whether the Block is a Special Needs Seizure Special needs searches and seizures share at least three basic characteristics. First, theyumst serve a purpose above and beyond norm al criminal law enfor cement. See Ferguson v. City of Charleston, 532 U.S. 67, 81-86 (2001);City of Indianapolis v. Edmond,531 U.S. 32, 41-47 (2000). Second, circumstances must make “the warrant and probable cause requirement impracticable.” See Griffin, supra, 483 U.S. at 873. Third, the method of search or seizure must have built-in limits, such as a confined geographic scope or regular, suspicionless application, that retrsict executive discretion and ensure that all citizens know the circumstances under which they are subject to a special needs search or seizure. See New York v. Burger, 489 U.S. 602, 702-03 (1989).
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Administrative searches of closely-regulated industries are one type of special needs search. Officials responsible for administrative searches need engage in no prior assessment of behavior. The lack of individualized probable cause is deemed does not violate the Fourth Amendment where the search relates to a closely regulated endeavor or enterprise. Anyone engaging in such activity can reasonably expect inspection.
The Supreme Court upheld such searches In Burger, id. at 702, the Court upheld suspicionless, warrantless inspection of plaintiff’s automobile chop shop. The Court noted that chop shops are closely regulated, reducing plaintiff’s expectation of privacy and putting their operators on notice that inspe ctions may occur. Id. The Court also concluded that the state’s inspection program was sufficiently regular and certain because it “carefully lim ited [inspections] in time, place, and scope.” Id. at 702-03. These built-in lim its on e xecutive discretion provided “a constitutionally adequate substitute for a warrant” and gave the owner with notice of when, where and to what extent he was subject to being searched.Id. In concluding that the inspection program was reasonable, the court noted that there was a “substantial governm ent interest” behind t he regulatory regime and that warrantless, suspicionless inspections were “necessary to furt her the regulatory regime.” Id. Accord, e.g., Donovan v. Dewey, 452 U.S. 594, 600 (1981) (warrant constitutionally required when warrantless searches “are necessary to further a regulatory scheme and the . . . regulatory pr esence is sufficiently comprehensive and defined” that owner knows property is “subject to periodic inspections undertaken for specific purposes.”).
Searches and seizures at roadbol ck check points are another type of warrantless special needs search that m ust only be “reasonable” under all the circum stances to com ply with the Fourth Amendment. In Michigan Dept. of State Police v. Sitz, 496 U.S. 444, 455 (1990), the Court upheld
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stops at a checkpoint at which police officers detained drivers briefly and tested them for sobriety. The officers stopped every vehicle and checked every driver for intoxication.Id. at 447. On average, the stops lasted twenty-five seconds.Id. at 448. See also Lidster, supra, 540 U.S. at 426 (extending Sitz to checkpoints designed to gather information after a nearby hit-and-run accident). Police may not, however, set up roadblocks to detect ordinary criminal wrongdoing. Edmond, supra, 531 U.S. at 37 (drug interdiction roadblock unconstitutional because police m ay not conduct regular suspicionless searches and seizures solely to enforce criminal laws).
A third type of special needs search a nd seizure occurs at border crossings. In U.S. v. Martinez-Fuerte, 428 U.S. 543, 551-554 (1976), the Court applied a balancing test to uphold a Border Patrol traffic-checking program on highways within one hundred m iles of the Mexican border. In U.S. v. Boumelhem, 339 F.3d 414, 421 (6th Cir. 2003), the Sixth Circuit upheld a warrantless and suspicionless search of a railroadshipping container fromabroad, noting the “power of the sovereign to protect itself by stopping and examining persons and property crossing into this country.” In so holding, the court noted that warrantless entry and exit searches date back to the teim of the Framers. Id. at 422 n.5; see also U.S. v. Montoya de Hernandez, 473 U.S. 531, 538 (1985) (“Routine searches of the persons and effects of entrants are not subject to any requirem ent of reasonable suspicion, probable cause, or warrant, and first-class m ail may be opened without a warrant on less than probable cause. Automotive travelers may be stopped atfixed checkpoints near the border without individualized suspicion”). Bo rder searches are restricted geographically to regions surrounding the border because individuals havea lesser expectation of privacy at the border than in the interior. Id. at 539.
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OFAC’s exercise of its blocking power lacks the characteristics that excuse the warrant and probable cause requirements as to adm inistrative, roadblocks, and border searches and seizures. Most importantly, OFAC’s bloc king power entails no built-in lim itations curtailing executive discretion and putting individuals on notice that they are subject to blocking.
Traffic checkpoints and border searches are focused geographically, as they occur only at he checkpoint or near the national border. In cases of administrative searches, the government may only search discrete categories of individuals – scuh as closely-regulated businesses – and even then the regulatory regime must be “carefully limited in time, place and scope.” Burger, supra, 482 U.S. at 702-03.
Second, in method, OFAC’s blocking power has more in com mon with ordinary law enforcement activity than with any of the activities considered in the special needs cases. OFAC does not block pending investigation every entity sending money overseas: it only blocks those it suspects have violated the law. In this case, OFAC targeted KindHearts as a potential violator and conducted a prelim inary investigation bef ore imposing the block. It necessarily had gathered information in advance that it considered sufficient to justify seizure of KindHearts’ assets.
No such prior determination occurs with a border crossing or checkpoint. Everyone passing through is stopped, detained and examined.
Thus, unlike traditional law enf orcement investigatory activities, special needs searches expose everyone within their scope or zone of theri operation to a cursory search or brief seizure in the interest of public safety and welfare or border integrity.
OFAC’s blocking power, which focuses on single entities, and does so on the basis ofsome suspicion, more closely resem bles the modus vivendi and modus operandi of traditional law
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enforcement investigative activity than warrantless searches allowed under the special needs exception. This is true, even though, at this poi nt, OFAC’s actions m ay be deemed “civil,” but actions violating E.O. 13224 may also become the basis for criminal sanctions. Investigations with the potential for criminal prosecution have historically triggered the warrant and probable cause requirements. See Edmond, supra, 531 U.S. at 37-38.
Finally, for the special need s exception to apply, both the probable cause and warrant requirements must categorically be im practicable in light of the governm ent’s purpose. Griffin, supra, 483 U.S. at 873. The governm ent provides no explanation as to why the probable cause warrant requirements were impracticable in this case. OFAC has shown no cause to believe or conclude that requiring it to develop probable cause and subm it such cause to judicial evaluation would have impaired its enforcement efforts and ability otherwise to act in this case.
In conclusion, OFAC blocking actions do not fit within the special needs exception to the warrant and probable cause requirements.
iii. Whether Exigency Excuses the Warrant Requirement Even if an OFAC blocking action is not a special needs search, a showi ng of exigent circumstances could eliminate the need for a warrant. Judicially endorsed exigent circumstances are, however, "few in number and carefully delineated." U.S. Dist. Court, supra, 407 U.S. at 318. The Sixth Circuit has identified four general categories of exigency justifying warrantless searches: “(1) hot pursuit of a fleeing felon, (2) imminent destruction of evidence, (3) [the] need to prevent a suspect’s escape, and (4) a risk of danger to police or others.” Johnson, supra, 22 F.3d at 680. None of these situations exists here except,possibly, the need to avoid destruction of evidence
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(or, in this case, dissipation of assets, which I discuss below). Thus, this case does not f it into a standard exigent circumstances exception to the warrant requirement.
That this is so does not answerthe government’s claim of exigency in toto. A court may still find that exigent circumstances existed on consideration of: “(1) whether im mediate government action was required; (2) whether the governmental interest was sufficiently compelling to justify a warrantless intrusion; (3) whether the citizens’ expectation of privacy was diminished in some way.” U.S. v. Rohrig, 98 F.3d 1506, 1521 (6th Cir. 1996).
For “immediate government action” to be necessary, law enforcem ent must have an objective, factual basis to believe that “the loss or destruction of evidence is im minent.” U.S. v. Sangineto-Miranda, 859 F.2d 1501, 1512 (6th Cir. 1988). For a warrantless search to be sustained, a “person of reasonable caution” must be able to conclude that “evidence of a federal crime would probably be found on the premises and also that such evidence would probably be destroyed within the time necessary to obtain a search warrant.” Id.
Law enforcement, however, may not merely assume that a suspect will destroy or dispose of evidence or contraband simply because he is aware the government suspects him of an offense. Thus, in Vale v. Louisiana, 399 U.S. 30, 35 (1970), the Court held that an arrest outside a residence does not justify warrantless search of arrestee’s house. Officers, the Courtstated, could not conduct such search simply on the basis that “time is of the essence” and “officers never know whether there is anyone on the premises to be searched who could very easily destroy the evidence.” Id. at 34.9
9 In Vale the Court addressed the contention that because narcotics are “easily removed, hidden, or destroyed” it would be unreasonable to require officers to secure a warrant before entering a home following a suspect’s arrest outside the residence, which could have alerted persons inside the home and led to the loss of evidence. Id. at 34. The Court rejected this reasoning, stating that the government bears the burden of showing that an “exceptional
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The gravity of the underlying offense is also a considerationR. ohrig, supra, 98 F.3d at 1516. In Welsh v. Wisconsin, 466 U.S. 740, 742-743 (1984), t he Court rejected the contention that exigency authorized warrantless entry into a driver’s home to arrest him after he had left the scene of an accident. The officers’ desire to ascertainthe suspect’s blood-alcohol level before dissipation was insufficient to justify entry without a warrantI.d. In so holding, the Court noted that police were investigating the suspect for a “nonjailable traffic offense that constituted only a civil violation under the applicable state law.” Id. at 746 n.6.
In this case, the Rohrig factors do not weigh in favor of an absolute exception to the warrant requirement. First, OFAC’s own actions belie its calim that this situation required immediate action, making a prior judicial warrant im practicable. OFAC conducted a pre liminary investigation of presently indeterminate duration. That investigationled to the blocking order. Nothing in the record supports any contention that time was of the essence. There is no basis for finding that something clearly, or to a very substantial likelihood, would have been lost by taking the time to prepare the documents for and present them to a judge and receive judicial authority for the seizure.
The second Rohrig factor asks whether the government had a sufficiently compelling interest in swift action to justify a warrantless intrusi on. The government has an i ndisputably important interest in preventing the flow of funds to overseasterrorist organizations. This is so, even if those organizations, at least for now, are not directly engaged in hostile acts against the United States or its citizens. Among his other Article II powers, thePresident can conclude that our national interest includes working with other countries to combat terrorism within or adjacent to their borders.
situation” justified the warrantless entry; speculation is not enough. Id. In this case there is no basis in the record for concluding that KindHearts was aware that the government was moving towards issuance of a blocking notice before it issued the notice.
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At issue is not, however, the policy or its undoubted importance. At issue, rather, is whether
the government has shown that the need for implementing that policy effectively and expeditiously
required doing so without judicial authorization. The importance of a particular policy or program
does not, without more, excuse the warrant requirement.
The exigent circumstances exception is bottomed on need for immediate action to avoid loss
or destruction of evidence. To come within this exception in this case, the government has to show
that reasonable grounds existed at the tim e of the blocking notice to apprehend that KindHearts,
unless the block were implemented, was about to dispose of its assets in an unlawful manner.
The government has made no such showing. In this instance the governm ent had time to
secure a warrant.10 Thus, the second Rohrig factor militates in favor of requiring a warrant.
The third factor concerns the citizen’s interest. KindHearts had a strong interest in accessing
its funds, remaining in operation and disbursing its funds, to the extent it was doing so, lawfully.
10 I can anticipate that preparation of an application for a court order authorizing a blocking seizure may be more time-consuming and complex than preparing a complaint for an arrest or an application and affidavit for a conventional search warrant. But the time needed to prepare a blocking application would not appear to be as long as, or longer than the time needed for preparation of a Title III electronic surveillance application. Title III applications and orders are generally employed in the investigation of serious offenses, many of which involve, or potentially involve violence, injury and death. We accept, however, the need to take time to make sure that this intrusive technique is employed cautiously, and only when the government satisfies Title III’s requirements. The time needed to prepare and approve an application under FISA for presentation to the Foreign Intelligence Surveillance Court likewise probably is extensive. This is so, even though FISA orders are directed at foreign-based terrorist threats against the United States. The exigencies of the circumstances being investigated by electronic surveillance would appear, on balance, usually to be greater than those present when a domestic charitable organization is suspected of diverting, or permitting the diversion of a portion of its assets to terrorist organizations overseas. Nonetheless, we accept, and properly so, the delays inherent in obtaining Title III and FISA orders.
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The government has not shown that the need toact without a warrant was so compelling that it could do so lawfully under the exigent circumstances exception to the warrant requirement.
iv. Alteration of Probable Cause and Warrant Requirements The government argues that its re liance on classified inform ation to determine whether blocking is appropriate justifies bypassing the probabel cause requirement and prior judicial review. It also argues that the nature ofits investigation– namely, of an organization alleged to be providing financial support to overseas terrorists – precludes judicial involvem ent and oversight under the separation of powers doctrine. These arguments are a variation on similar arguments which the Court rejected inU.S. Dist. Court, supra. There the government argued, much as it doe s here, that a judicial w arrant would “obstruct the President in the discharge of his constitutional duty to protect domestic security.” Id. at 318. The governm ent also argued that courts l ack technical expertise to determi ne whether surveillance is appropriate, and that disclosure of the necessary information to a magistrate would “create serious potential dangers to the national security and to the lives ofinformants and agents.” Id. at 319. The Court held that these concerns did “nojtustify complete exemption of domestic security surveillance from prior judicial scrutiny.”Id. at 320. Complete abnegation of the Fourth Amendment and judicial involvement in protecting Fourth Amendment interests is likewise not justifiable here. As already discussed, nothing in our Fourth Amendment jurisprudence or constitutional tradition supports complete elimination of the probable cause, prior judicial reviewand warrant requirements. To the extent the government argues that its possible reliance on classified information as a basis a blocking order justifies displacement of judicial review, its contentions are not persuasive.
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District judges increasingly handle classified information under the aegis of the Classified Information Procedures Act (CIPA). 18 U.S.C.App. 3, §§ 1-16. The government has not shown that there is something so unique about blocking of assetsin circumstances such as those in this case that would make CIPA inapplicable or functionally inoperable.
The Court in U.S. Dist. Court suggested that Congress m ight adopt a m odified warrant procedure that would both respondto the President’s Article II exclusive responsibility and authority to protect national security from foreign dangersand accommodate Fourth Amendment interests and protections. Id. at 320. Declining “to detail the precise standards for domestic security warrants,” id. at 323, the Court expressly stated, however, that some form of “prior judi cial approval” was constitutionally required. Id. at 324.
Here, as well, in view of the effect of implementation of Fourth Amendment protections and processes on the President’s Article II powers, som e reformulation of the probable cause requirement may be appr opriate. The sam e may be true with regard to variance from the conventional process for obtaining judicial warrants under the Fourth Amendment and Rule 41 of the Federal Rules of Criminal Procedure.
I agree, though, with the parties’ request that I not unde rtake in this case to determ ine whether such reform ulation is appropriate or nece ssary or, if s o, to define its contours. In not undertaking these tasks, I go no fur ther than the Supreme Court in U.S. Dist. Court, in which the Court left to Congress the responsibility for considering and adopting the appropriate structure.Id. at 320. This, in turn, led to enactment of FISA and creation of the FISC.11
11FISA contains an alternative probable cause formulation: “probable cause to believe that . . . the target of the electronic surveillance is a foreign power or an agent of a foreign power” and that “each of the facilities or places at which the electronic surveillance is directed is
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I also note that provision could be made for emergency seizure of assets pending such review
when, as and if truly exigent circumstances existed – as they did not in this case, and as is unlikely
in other past cases of OFAC blocking orders. In any event, great care would have to be taken to
ensure that what should be rare did not become routine.
That has not happened under Title III: warrantless em ergency surveillance, though
authorized by that statute, 18 U.S.C. § 2518(7), has hardly ever occurred in the forty years since its
enactment. But circumstances might possibly arise where the time needed for even ex parte prior
judicial review might be so risky that an emergency exception, “both limited and tailored reasonably
to secure law enforcement needs while protecting privacy interests,”Illinois v. McArthur, 531 U.S.
326, 337 (2001), would be appropriate.12
C. Fourth Amendment Challenges to the Provisional and Final SDGT Designation
being used, or is about to be used, by a foreign power or an agent of a foreign power.” 50 U.S.C. § 1805(a)(2)(A)-(B).
This standard differs from the conventional probable cause requirement not in the level of suspicion, but in what federal agents must suspect. Courts have upheld this modified probable cause standard under the Fourth Amendment. U.S. v. Johnson, 952 F.2d 565, 573 (1st Cir. 1991); U.S. v. Pelton, 835 F.2d 1067, 1075 (4th Cir. 1987); U.S. v. Badia, 827 F.2d 1458, 1464 (11th Cir. 1987). I note, however, that, at a minimum, the Fourth Amendment requires prior judicial review and approval, based on probable cause sufficient to justify issuance of a blocking order to seize the assets of an American corporation or American citizens. This necessitates government submission of objective and reasonably verifiable information establishing such cause to a neutral and detached judicial officer.
12In McArthur, officers prevented the defendant from entering his home for two hours until they could obtain a search warrant for marjuana. Id. at 329. Preventing his entry was but a “brief seizure of the premises” and permissible under the Fourth Amendment. Id. at 333. There was, as well, prompt judicial review of probable cause and issuance of a search warrant.
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KindHearts also challenges the provisional and prospective final SDGT designations under the Fourth Am endment. This court can review neither challenge at this tim e. Under the Administrative Procedure Act [APA], 5 U.S.C. § 704, I m ay review only final agency action. Agency action becomes final when it creates a binding obligation. Bennett v. Spear, 520 U.S. 154, 158 (1997).
Provisional agency action is not final action. Greater Detroit Resource Recovery Auth. v. U.S. E.P.A., 916 F.2d 317, 322 (6th Cir. 1990) (holding a lettreof intent to hold agency proceedings contemplating revocation of a permit was not final agency action);Den-Mat Corp. v. U.S., Food and Drug Admin., 1992 WL 208962, *4 (D. Md.) (“[A] statement by the FDA in a letter of what its position is on an issue, along with a threat of enfocrement that does not arise to a promise to enforce, is not a final action.”). The provisional designation is, by definition, not final agency action: this court cannot, therefore, review it. Final designation would be final agency action, but it has yet to occur.
2. Statutory Authorization for Block Pending Investigation KindHearts argues that the IEEPA does not authorize OFAC’s block on KindHearts’ assets because the IEEPA requires that blocked individualshave a nexus with a nation on which the United States government has imposed economic sanctions. Defendants argue that the IEEPA requires no such nexus and that OFAC may properly block any assets in which any foreign national – not just foreign nations and foreign nationals linked to a sanctioned nation – has an interest.
A. Whether the IEEPA Requires a Nexus With a Sanctioned Nation The IEEPA authorizes the Pre sident to “investigate, block during the pendency of an investigation, regulate, . . . or prohibit . . . transactions involving . . . any property in which
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any foreign country or a national thereof has any interest by any person, or with respect to a ny property, subject to the jurisdiction of the United States.” 50 U.S.C. § 1702(a)(1)(B).
Two courts have rejected the argument that the IEEPA requires that an entity have a nexus with a sanctioned nation to be blocked. In Al Haramain, supra, 585 F. Supp. 2d at 1260, plaintiff argued that a blocking action “requires a nexus between a sanction against a national and a sanction against its country.” Thus, the governm ent could properly sanction a Libyan national, but not a national of a country the United States has never sanctioned. Id.
The court rejected this argument, concluding that “the term ‘thereof’ simply directs that the ‘national’ must be ‘foreign’ without imposing any other conditions.”Id.; see also Humanitarian Law Project v. U.S. Dept . of Treasury, 463 F. Supp. 2d 1049, 1072-1073 (C.D. Cal. 2006) (rejecting contention that the IEEPA is onl y a “tool for nation-to-nation diplomacy” and that the power to block individual assets under IEEPA is not merely “incident to” the power to impose sanctions).
These rulings represent the better interpretati on of the IEEPA. First, as the cour t in Al Haramain concluded, there is no textual reason to interpret “thereof ” as a limitation; the phrase “nationals thereof” simply means foreign nationals.
Second, the executive has blocked the assets ofindividuals unaffiliated with sanctions in the past and received Congressional approval. This occurred after President Clinton issued executive orders under the IEEPA blocking the assets of Columbian drug cartels. E.O. 12978 (Oct. 21, 1995). In the legislative findings in the Foreign Narctoics Kingpin Designation Act, 21 U.S.C. § 1901(a)(3), Congress addressed President Clinton’s actions, notni g that the President “successfully applied [the IEEPA] to international narcotics traffickers in Columbia and based on that successful case study, Congress believes similar authorities should be applied worldwide.” The findings specifically
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referenced E.O. 12978. Id. at § 1901(a)(1).Congress amended the IEEPA in 2001 and, though aware of President Clinton’s executive orders, did not limit the IEEPA to be only a tool of nation-to-nation diplomacy.
The IEEPA requires no nexus with a sanctionednation; it only requires that blocked property be property in which any foreign country or a foreign national “has any interest.” 50 U.S.C. § 1702 (a)(1)(B).
B. Whether a Foreign National Has “Any Interest” in KindHearts’ Assets Even if the IEEPA mandates no nexus with a sanctioned nation, the statute requires a foreign national to have an “interest” in the corporati on’s assets within the m eaning of 50 U.S.C. § 1702(a)(1)(B). Id. To satisfy the Fourth Am endment, OFAC thus m ust show, with regard to an entity’s alleged violation of IEEPA and E.O. 13224, probable cause to believe that a f oreign national has an “interest” in the corporation’s assets.13 The IEEPA authorizes blocking based on “any interest.” See 50. U.S.C. § 1702(a)(1)(B); Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 67 (D.D.C. 2002). Congress has authorized the executive to define the statutory terms of the IEEPA. 50 U.S.C. § 1704. OFAC defines “interest” to mean “an interest of any na ture whatsoever, direct or indirect.” 31 C.F.R. § 535.312. In contrast, OFAC defined the term s “property” and “property interest” to refer to an expansive list of legally enforceable rights, including currency, negotiable instruments, “evidences of title,” “contracts of any nature whatsoever, and any other property, r eal, personal, or m ixed,
13American citizenship does not immunize KindHearts from blocking. Global Relief Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir. 2002).
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tangible or intangible, or interest or interests therein, present, future or contingent.” 31 C.F.R. §§ 535.311
Courts have endorsed broad interpretations ofthe phrase “any interest” as used in the IEEPA and TWEA. E.g., Regan v. Wald, 468 U.S. 222, 225-226, 233-34 (1984) (the phrase “any interest” must be construed broadly);Consarc Corp.v. Iraqi Ministry,27 F.3d 695, 701-02 (D.D.C. Cir. 1994) (OFAC may define property interests, subject to judicial review).
The statute does not , therefore, require that a foreign national have a legally enforceable property interest in a target corporation’s assets. A beneficial interest in the entity’s assets m ay suffice. Global Relief Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir. 2002).
To date, courts have considered the definition of “interest” in cases involving OFAC blocking actions against dom estic corporations only where: 1) foreign nationals occupy key executive positions or were members of the entity’s board,Global Relief, supra, 315 F.3d at 752-53 (two of the three members of the board were foreign nationals), Al Haramain, supra, 585 F. Supp. 2d at 1261 (foreign nationals served as the Presidetnand Treasurer); or 2) OFAC had already named the United States corporation as an SDGT for channeling funds to foreign terrorists. Islamic Am. Relief, supra, 394 F. Supp. 2d at 40, 46; Holy Land, supra, 219 F. Supp. 2d at 67.
Khaled Smali, President of KindHearts, is a foreign national. This satisfies the requirement of 50 U.S.C. § 1702(a)(1)(B) that a foreign national have an interest in the organization.
3. Void for Vagueness Plaintiff alleges that OFAC’s authority to bolck assets pending investigation and to designate SDGTs under the IEEPA and E.O. 13224 is unconstitutionally vague. First, plaintiff claims neither the IEEPA nor E.O. 13224 imposes substantive or procedural constraints on the authority to block
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pending investigation. Second, plaintiff claims that neither the IEEPA nor E.O. 13224 im poses a scienter requirement for designation. Third, plaintiff claims that the criteria set forth in E.O. 13224 for designation contain the unconstitutionally vague term s “material support,” “services,” and “otherwise associated with.”
To determine whether a statute is vague, courtsconsider whether the statute is “sufficiently clear so as not to cause persons ‘of common intelligence . . . necessarily [ot ] guess at [a statute’s] meaning and [to] differ as to its application.’” Connally v. General Const. Co., 269 U.S. 385, 391 (1926). Vague statutes violate the Due Process Cl ause of the Fifth or Fourteenth Am endments. Kolender v. Lawson, 461 U.S. 352, 357 (1983);see also Coates v. City of Cincinnati,402 U.S. 611, 614 (1971).
Vague statutes are contrary to the “first esse ntial of due process of law” for two reasons. Connally, supra, 269 U.S. at 391. First, unclear statutes deny citizens “a reasonable opportunity to know what is prohibited, so that[they] may act accordingly.” Grayned v. City of Rockford,408 U.S. 104, 108-09 (1972). Second, vague laws encourage arbitrary and discrim inatory enforcement, because they “impermissibly delegate[] basic policy matters to policemen, judges, and juries.” Id. at 108-109; see also City of Chicago v. Morales, 527 U.S. 41, 60 (1999); Papachristou v. City of Jacksonville, 405 U.S. 156, 162 (1972).
Courts demand a greater level of certainty where a vague crim inal statute “might induce individuals to forgo their rights of s peech, press, and association” to avoid even a risk of prosecution. Scull v. Com. of Va. ex rel. Comm. on Law Reform & Racial Activities, 359 U.S. 344, 353 (1959); see also Ashton v. Kentucky, 384 U.S. 195, 200 (1996); Am. Booksellers Found. for Free Expression v. Strickland, 512 F. Supp. 2d 1082, 1097 (S.D. Ohio 2007), questions certified,
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560 F.3d 443 (6th Cir. 2009) (“The courts will pay even closer attention when . . . a statute attempts to restrict an area of free expression through the penal code, because the threat of punitive penalties has the potential to significantly chill speech.”).
A. Facial and As-Applied Vagueness Claims A plaintiff may assert two types of vagueness claims. First, it m ay challenge statutes as vague as applied to plaintiff’s specific conduct. An as-applied challenge “i mplicates the statutes’ enforcement only as to the plaintiff challenging the statute” but does not “implicate the enforcement of the law against third parties.” Humanitarian Law Project, supra, 463 F. Supp. 2d at 1058. Thus, a successful as-applied challenge “does not render the law itself invalid.” Id. Second, plaintiffs may claim that a statute is vague on its face, meaning that it is vague as to conduct beyond that of the individual plaintiff. Id. A successful facial challenge renders the law invalid; facial invalidation, t herefore, is “strong medicine” that courts should use only as a “last resort.” Id.; see also Nat’l Endowment for the Arts v. Finley, 524 U.S. 569, 580 (1998). KindHearts asserts both facial and as-applied challenges to OFAC’s designation and block pending investigation authorities.
i. Facial Invalidity (a). OFAC Neither Suppresses Protected Speech
Nor Imposes Criminal Sanctions Generally, an enactment is unconstitutionally vague on is face only if it is “impermissibly vague in all its applications.”Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc.,455 U.S. 489, 497 (1982); see also U.S. v. Salerno, 481 U.S. 739, 745 (1987) (enunciating the “Salerno doctrine” that a successful facial challenge to a statute requires proof of invalidity in all its applications unless the statute regulates protected speech).
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If, however, plaintiffs show that an allegedly vague criminal statute reaches a “substantial amount of constitutionally protected conduct” under the First Amendment, Belle Maer Harbor v. Charter Twp. Of Harrison, 170 F.3d 553, 557 (6th Cir. 1999) , theSalerno doctrine does not apply. See Salerno, supra, 481 U.S. at 745 (recognizing an exceptionfor First Amendment claims). Despite the general rule that plaintiffs who e ngage in “som e conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others,” the Supreme Court has “relaxed that requirement” in the First Amendment context to avoid chilling protected speech.U.S. v. Williams, U.S. , 128 S.Ct. 1830, 1845 (2008).
To avail themselves of this exception to Salerno, plaintiffs must show that the challenged enactment is: 1) crim inal in nature; and 2) im plicates First Am endment rights. In Kolendar v. Lawson, 461 U.S. 352, 353 (1983), the Supreme Court invalidated a criminal statute requiring those who “loiter or wander on the streets to provide ‘credible and reliable’ identification and to account for their presence when requested by a peace officer.” Though the statute could be clear in som e instances, the Court invalidated it on the its potential to infringe First Amendment rights and the serious criminal sanctions imposed for its violation.Id. at 358 n.8;see also Morales, supra,527 U.S. at 55 n.22 (in dicta, declining to applySalerno in void for vagueness challenge to a criminal statute implicating First Amendment rights).
Where a criminal statute is narrowly tailoredto restrict only unprotected speech, it does not implicate First Amendment rights for the purposes of a void-for-vagueness challenge. Belle Maer Harbor, supra, 170 F.3d at 557;see also Rendon v. Transp. Sec. Admin,424 F.3d 475, 480 (6th Cir. 2005). Indeed, to be invalid, a statute must reach a “substantial amount” of protected speech: not all laws restricting speech satisfy this test.
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In Rendon, the Sixth Circuit concluded that a Transportation Security Adm inistration regulation did not reach a substantial amount of protected First Amendment conduct. The regulation at issue stated that "[n]o person m ay interfere with, assault, threaten, or intim idate screening personnel in the performance of their screening duties." 49 C.F. R. § 1540.109. Because the statute requires that the plaintiff “interfere” with screeners in the performance of a specified task, it did not give screeners unfettered discretion to fine anyone they may find disruptive and therefore did not reach a substantial amount of protected speech. 424 F.3d at 478.
In this case, OFAC’s designation authority neither implicates First Amendment rights nor is criminal in nature. Courts have uniformly held that OFAC’s blocking and designation authorities do not reach a substantial amount of protected speech, and that its restrictions are narrowly tailored. Al Haramain, supra, 585 F. Supp. 2d at 1267 (E.O. 13224 “doesnot punish a substantial amount of protected free speech or associational rights.”);Islamic Am. Relief, supra, 394 F. Supp. 2d at 52-55 (rejecting claims that OFAC blocking action violates plaintiff’s First Am endment freedom of speech, freedom of association and freedom of religion, and noting that “nothing in the IEEPA or the executive order prohibits [the plaintiff] from expressing its views.”); Holy Land Found. for Relief and Dev. v. Ashcroft, 333 F.3d 156, 166 (D.C. Cir. 2003) (“[T]here is no First Amendment right nor any other constitutional right to support terrorists.”); Holy Land, supra, 219 F. Supp. 2d at 82 (OFAC designation and blocking did not restrict plaintiff’s “ability to express its viewpoints, even if these views includean endorsement of Hamas.”); Global Relief Found., Inc., v. O’Neill,207 F. Supp. 2d 779, 806 (N.D. Ill. 2002),aff’d 315 F.3d 748 (7th Cir 2002) (Executive Order satisfies strict scrutiny and is not overbroad under in vi olation of the First Amendment because it neither
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“directly regulates speech or expression” and does not grant discretion to “det ermine whether particular items of expression may be prohibited on the basis of their content.”).
Even if plaintiff shows that OFAC’s blockni g and designation authorities reach a substantial amount of constitutionally protected conduct, the conesquences are civil, rather than criminal. Even harsh civil sanctions do not justify applying heightened scrutiny. In Columbia Natural Res. Inc. v. Tatum, 58 F.3d 1101, 1108 (6th Cir. 1995), for example, the court held that civil provisions of the Racketeer Influenced and Corrupt Organizati ons Act [RICO], 18 U.S.C. § 1962(c), were not unconstitutionally vague. The court stated that it “expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe.” Id. (citing Hoffman Estates, supra, 455 U.S. at 498-499).14
(b). OFAC’s Authority to Order Blocking Pending Investigation is Not Facially Vague Plaintiffs argue OFAC’s power t o block assets pending investigation is vague on its face because neither E.O. 13224 nor the IEEPA requi re OFAC to establish any level of suspicion or amass any quantum of evidence before acting. If t his is true, the enactments are vague because without criteria governing OFAC’s actions “persons‘of common intelligence . . . necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’”Connally, supra, 268 U.S. at 391. Defendants argue that the substantive criteria set forth in § 1 of E.O. 13224 constrain both OFAC’s power to designate and to block pendi ng investigation. Defendants fur ther assert, “To initiate a BPI OFAC must be pursuing an investigation based upon a reasonable basis to suspect that
14The court in Columbia Natural Resources, id. at 1108, accurately noted that civil penalties for RICO violations are “harsh,” as such penalties can include, inter alia, “dissolution or reorganization of any enterprise.” 18 U.S.C. § 1964(a).
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the individual or entity meets the E.O. criteria. Whereas, to designate, OFAC must have reason to believe the subject meets the designation criteria.” [Doc. 36, at 30 n.25]. Plaintiffs respond that OFAC’s power to designate and power to block pending investigation have distinct sources in the text of E.O. 13224, and that the governm ent’s putative “reasonable basis to suspect” standard is wholly invented.
E.O. 13224 empowers OFAC to block and designate by delegati ng powers given to the President by Congress in the IEEPA. Congress, thr ough the IEEPA, authorized the President to block certain assets and transactions in cases of declared national em ergency. 50 U.S.C.A. §§ 1702(a)(1), 1701. In E.O. 13224, the President declared that “foreign terrori sts” represented an “unusual and extraordinary threat to t he national security” and designated several entities and persons as “foreign terrorists.”
OFAC’s power to designate SDGTs derives from E.O. 13224, § 1(c)-(d). These sect ions permit the Secretary of Treasury, in consultation with the Secretary of State and the Attorney General, to determine that an entity is “owned or controlled by” a designated foreign terrorist, has “assist[ed] in, sponsor[ed], or provide[d] financial, m aterial, or technological support for , or financial or other services to or in support of”acts of terrorism by a designated foreign terrorist, or is “otherwise associated with” a designated terrorist. Under § 1 of E.O. 13224, the “property and interests in property” of entities so designated by the Treasury “are blocked.” Section 1 of E.O. 13224, however, does not confer any power on th e United States Tr easury to block pending investigation; it only authorizes blocks on entities who have already been designated.
OFAC’s power to block pending an investigation presumably stems from E.O. 13224, § 7, which authorizes the Secretary of the Treasury to “employ all powers granted to the President by
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IEEPA . . . as m ay be necessary to carry out the purposes of thi s order.” E.O. 13224 does not specifically mention any power to block pending an investigation. The catch-all provision in § 7, however, delegates the President’s IEEPA authority to block pending investigation to the Treasury. IEEPA authorizes the President to “investigate [and] block during the pendency of an investigation . . . any property in which any foreign countroyr a national thereof hasany interest by any person, or with respect to any property, subject to the jurisdiction of the Unite d States.” 50 U.S.C. § 1702(a)(1)(B).
With regard to s tatutory limits on OFAC’s authority to im pose blocking pending investigation, the pl aintiff and defendant agree that the IEEPA places five lim itations on the President’s power to block pending investigation, and that these also lim it OFAC’s power under E.O. 13224. First, before acting under IEEPA, th e President m ust find and de clare a national emergency based on an “unusual and extraordinary threat, which has its source i n whole or in substantial part outside the United States, to thenational security, foreign policy, or economy of the United States.” 50 U.S.C. § 1701(a). Second, the President may exercise his authority “to deal with an unusual and extraordinary threat to which a national emergency has been declared” and “not for any other purpose.”Id. at 1701(b). Third, blocks pending investigation, like all blocks, must be on “property in which any foreign count ry or a national thereof has any interest.” 50 U.S.C. § 1702(a)(1)(B). Fourth, the President m ay not under IEEPA regulate the export of personal communications, information such as films, artworks and news wire feeds, or transactions ordinarily incident to travel in a foreign country. Id. at § 1702(b). Fifth, the president m ust consult with Congress “in every possible instance” bef ore exercising his authority and C ongress periodically reviews the President’s actions. Id. at §§ 1703(a), 1622.
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These limitations, however, do not require OFAC toestablish any specific level ofsuspicion or collect any quantum of evidence before blocking an entity pending an investigation. Plaintiffs argue that, provided the President has declared a national emergency, OFAC may block any entity it chooses to investigate on a whim. Defendants respond that OFAC m ay only block pending investigation if OFAC is “pursuing an investigation based upon a reasonable basis to suspect that the individual or entity meets” the criteria for designation under the E.O. [Doc. 73, at 30 n.25].
Defendants argue that this “re asonable basis to suspect” requirem ent derives from the judicial review provision of the Administrative Procedures Act (APA), 5 U.S.C. § 706(2)(A). This provision states that a court may overturn an agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”Id.; see also Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 377 (1989). Defendant cites three cases in which courts reviewed whether OFAC had a “rational basis” for issuing a final SDGT determination and block. Holy Land Found. for Relief and Development v. Ashcroft, 333 F.3d 156, 162 (D.C. Cir. 2003); see also Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728, 732 (D.C. Cir. 2007); Al Haramain, supra, 585 F. Supp. 2d at 1249.
Defendant’s argument, however, is flawed. First, § 706(2)(A) of the APA sets forth a standard of judicial review, not a substantive standard to govern agency behavior. OFAC m ust comply with statutes, executive orders, and Treasury regulations governing its conduct; it should not consider whether its actions would later be reversed under the deferential “arbitrary and capricious” standard of judicial review in choosing its course of action.
Second, defendant’s argument fails to establish a link between the power to block pending investigation (authorized by E.O.13224, § 7) and the standard fordesignating an SDGT (described
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in E.O. 13224, § 1). Nothing in the text of E.O1. 3224 suggests that the block pending investigation power can be exercised only as a precursor to designation, nor does anything suggest how close OFAC must be to designating to impose a block. Without such a link, a reviewing court has no basis for determining whether OFAC has exercised itspower reasonably in accordance with its authority.
Defendants rely on three cases involving chlalenges to post-designation blocking orders, not blocks pending investigation. Islamic Am. Relief, supra, 477 F.3d at 732; Holy Land, supra, 333 F.3d at 162; Al Haramain, supra, 585 F. Supp. 2d at 1249.
Because the cases do not deal with the power to block pending investigation, they provide no guidance as to the restrictions on this power. In all three, OFAC simultaneously designated the target entity as an SDGT and blocked its assets . In these cases, theref ore, both the designation decision and the block were governed by § 1 of the Executive Order, not § 7.
Section 1 sets forth criteria for designation and the block attac hes automatically on designation. Courts in these cases apply the APA’sstandard of review to determine whether OFAC had a “rational basis” to designate an entity unde r the § 1 criteria – courts do not treat “rational basis” as the criteria OFAC must abide in blocking or designating an entity.Holy Land, supra, 333 F.3d at 162.
Neither the IEEPA nor E.O. 13224, therefore, restrict OFAC’s power to block pending investigation OFAC’s authority to block pending investigation by requiring a specific quantum of evidence or level of suspicion that the targeted entity should be designated.
Plaintiff argues that this lack of statutory criteria restricting OFAC’s blocking authority makes that authority unconstitutionally vague. Becau se no criteria restrict OFAC’s authority, all
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exercise of that authority, plaintiff contends, areab initio suspect, thereby rendering the IEEPA and E.O. 13224 facially vague.
Application of the Fourth Amendment to blocks pending investigation provides the criteria, otherwise unavailable under the IEEPA and E.O. 13224, for such seizures. If, to satisfy the Fourth Amendment, OFAC may only block pending investigation on a showing of probable cause that the target entity has violated prohibitions of the IEEPA and E.O. 13224, its discretion to block is not unfettered and OFAC’s authority is not unconstitutionally vague on its face.15
B. Whether the Criteria For Designation Are Unconstitutionally Vague KindHearts also facially challenges OFAC’s designation authority as unconstitutionally vague. I have concluded previously that challenges to OFAC’s prelim inary and final designation authority are not reviewable at this tim e, but I consider KindHear t’s challenge because the designation criteria also govern the probable causestandard required to block pending investigation. OFAC’s designation authority arises from E.O. 13224, § 1 which orders a block on “all property and interest in property” subject to United States jurisdiction of an enum erated list of foreign terrorist individuals and organizations. E.O. 13224 § 1(d)(i)-(ii) authorizes the Secretary of the Treasury to add to this list by designatingdaditional entities that “assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of” or are “otherwise associated with” individuals or groups designated as foreign terrorists. E.O. 13224, § 2(a) further authorizes designation and blocking for “making or receiving of any contribution of funds, goods, or services to or for the benefit of” designated foreign terrorists. KindHearts argues
15In this case, OFAC failed to follow the Fourth Amendment in imposing the block pending investigation. Thus, as applied to KindHearts, OFAC’s authority under the IEEPA and E.O. 13224 was unconstitutionally vague.
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that the terms “services,” “otherwise associated with” and “material support” are unconstitutionally vague. KindHearts further argues that E.O. 13224 is unconstitutionally vague because it contains no scienter requirement.
To establish that these terms are unconstitutionally vague, plaintiff must show that they cause persons “of common intelligence . . . necessarily[to] guess at [a statute’s]meaning and [to] differ as to its application.”Connally , supra, 269 U.S. at 391.Because plaintiff’s challenge is facial and, as discussed above, doe s not im plicate First Am endment rights, plaintiff m ust show that the challenged provisions are “impermissibly vague in all [their] applications.”Hoffman Estates, supra, 455 U.S. at 497. To prevent arbitrary enforcement and to provide citizens with reasonable notice of what conduct is proscribed, a statue must draw "reasonably clear lines" between legal and illegal conduct. Smith v. Goguen, 415 U.S. 566, 573 (1974).
Because E.O. 13224 and the IEEPA are federal rather than state law, this court has greater leeway to construe the enactments to remedy vagueness. The Supreme Court has rarely held federal statutes to be void for vagueness. Columbia Natural Resources, supra, 58 F.3d at 1108. Because federal statutes are subject to interpretation by federal courts, federal courts need not “sit passively and review only what other people have said to determine if a statute is vague.”Id. Rather, a federal court’s “own interpretations are a means of mitigating any vagueness.” Id.
An undefined word or phrase does not necessarily render an enactment vague. Courts may ascertain an undefined term’s meaning by reading it in context, Boos v. Barry, 485 U.S. 312, 332 (1988), or by looking to the term’s common meaning. U.S. v. Haun, 90 F.3d 1096, 1101 (6th Cir. 1996) (If the com mon meaning of an undefined term provides “adequate notice of the conduct prohibited and standards for enforcement,” the statute is not void for vagueness.). Courts may look
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to other statutes and case law to determine an undefined term’s meaning. See Jordan v. De George, 341 U.S. 223, 229-230 (1951) (upholding phrase “crim e of moral turpitude” against vagueness challenge by examining meaning of term in cases and other statutes).
A statute m ay be facially va gue if it contains language that “lends itself to subjective interpretation.” Humanitarian Law Project, supra, 463 F. Supp. 2d at 1062. In Coates v. City of Cincinnati, 402 U.S. 611, 612-614 (1971), the court invalidated an ordinance prohibiting “conduct . . . annoying to persons passing by,” because “[c]onduct that annoys some people does not annoy others.” See also U.S. v. Winsch,84 F.3d 1110 (9th Cir. 1996) (invalidating court’s local disciplinary rule requiring lawyers to “abstain from all offensive personality” because it could “refer to any number of behaviors” and it would be “impossible to know when such behavior would be offensive enough to invoke the statute.”).
i. “Services” Plaintiff argues that t he term “services” as it appears in E.O. 13224, §§ 1-2 is unconstitutionally vague. The Treasury Regulati ons do not provide a concise def inition of “services,” but they do contain a non-exhaustive list of exam ples: “legal, accounting, financi al, brokering, freight forwarding, transportation, public relations, or other ser vices.” 31 C.F.R. § 594.406. Other courts have concluded that the term“services” in E.O. 13324 is not unconstitutionally vague. In Humanitarian Law Project, supra, 463 F. Supp. 2d at 1063, the court held that the term “services” in the E.O. 13224 is not vague because it is a “word of common understanding and one that could not be used for selective or subjectiveenforcement.” Despite the fact that the regulations list examples in place of an exact definition, thecourt concluded that “any given individual would
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be able to distinguish when he or she was providing a ‘service’ to a designated terrorist group, as opposed to engaging in independent activity.”Id.; see also Al Haramain, supra,585 F. Supp. 2d at 1270 (The term “services” in E.O. 13224 is notunconstitutionally vague because the whole phrase, “services to or in support of” an SDGT “implies cooperation between the two entities, as opposed to independent advocacy.”).
Courts have also upheld the term“services” against vagueness challenges in other contexts. See, e.g., Al Haramain, supra, 585 F. Supp. 2d at 1269-1270 (upholding“services” as it appears in IEEPA); U.S. v. Lindh, 212 F. Supp. 2d 541, 547 (E.D. Va. 2002) (upholding “services” in a criminal case).
In Humanitarian Law Project v. Mukasey, 509 F.3d 1122, 1136 (9th Cir. 2007), the court concluded that the “service” in the Antiterrorismand Effective Death Penalty Act of 1996 [AEDPA] is unconstitutionally vague. The AEDPA, however, expressly defined “services” to include “expert advice or assistance.” Id. The court ruled the term s “expert advice or assistance” to be unconstitutionally vague because the term s reaches protected First Am endment activity, such as training in “how to lobby or petition representative bodies such as the United nations.”Id. The court concluded that the phrase “expert advice or assistance” was unconstitutionally vague, and that the term “services” was unconstitutionally vague because the term includes “expert advice or assistance.” Id. at 1135-1136.
The term “service” in E.O. 13224 is not unconstitutionally vague. The common meaning of the word sufficiently constrains executive di scretion. When read in context, “services to or in support of,” the term clearly requires a collaborative relationship with an SDGT; independent advocacy is not covered. Moreover, neither the EO. . nor the Treasury Regulations expressly extend
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the term “services” to any protected area of speech, m aking the Ninth Circuit’s reasoning in Humanitarian Law Project regarding the AEDPA inapplicable here.
ii. “Material Support” Plaintiffs assert that the term “material support” is unconstitutionally vague. Neither the Executive Order nor the Treasury regulations provide a definition of this term . To construe the statute, courts may look to how other statutes, regulations, and case law define this term. See Jordan, supra, 341 U.S. at 229-230. The Immigration and Naturalization Act [INA], 8 U.S.C. §1182 (a)(3)(B), bars aliens who “engage in terrorist activity,” including those w ho “afford m aterial support” t o terrorists from receiving visas or entering the United States. The statute provides several examples of “material support,” including “a safe house, transportation, communications, funds, transfer or other material financial benefit, false documentation or identification, weapons (including chemical, biological, or radiological weapons), explosives, or training.” Id. at §1182(a)(3)(B)(iv)(VI). Courts have defined and applied the term “material support” from the INA using the plain meaning of the words. Thus, “m aterial” has been held to m ean “significant” or essential” and “support” has been held to mean “sustenance or maintenance; esp., articles such as food and clothing that allow one to live in the degree ofcomfort to which one is accustomed.” Sing-Kaur v. Ashcroft, 385 F.3d 293, 298 (3d Cir. 2004) (construing “m aterial support” in 8 U.S.C. § 1182 (a)(3)(B)(iv)(VI) (quoting Black’s Law Dictionary991, 1453 (7th Ed. 1999)) Though not addressing a vagueness challenge to the statute, the court concl uded that “m aterial support” clearly encompassed the claimant’s actions, which included providing food and shelter to individuals the claimant knew had committed terrorist activities. Id. at 299.
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The term “material support” also appears in the AEDPA, 18 U.S.C. § 2239A. Subsection (b)(1) defines “material support or resources” to mean
any property, tangible or intangible, or service, including currency or m onetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false docum entation or identification, com munications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials. That two different federal statutes define “material support” somewhat differently does not, as plaintiffs contend, indicate that the statute is vague. The definitions in the INA and AEDPA do not set forth an exhaustive list of examples. In addition to specific examples like “weapons, lethal substances [and] explosives,” the definition in the AEDPA includes gene ral terms like “any property, tangible or intangible, or service.” 18 U.S.C. § 2239A(b)(1). The definition in the INA uses the term “including” before the enumerated examples, indicating that Congress “intended to illustrate a broad concept rather than narrowly circumscribe a termwith exclusive categories.”SingKaur, supra, 385 F.3d at 298. Even if the two statutes di ffer in the exa mples they list, there is substantial overlap: both list safe houses, funds, false documentation, financial services and weapons as examples of “material support.” Plaintiff’s vagueness challenge to “material support” fails. The INA, AEDPA, existing case law and common meaning provide a “broad concept” of material support that is sufficiently clear. Statutes “need not define with mathematical precision the conduct forbidden.” Columbia Natural Res., supra, 58 F.3d at 1108. Plaintif f, furthermore, must show that the statute is vague in all its potential applications to succeed in i ts facial challenge. Because existing statutes and case law identify a clear core of activities that constitute“material support” – including the giving of funds, which plaintiff allegedly did – plaintiff’s facial challenge fails.
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iii. “Otherwise associated with” Plaintiffs also find unconstitutional vagueness in the term “otherwise associated with” in E.O. 13224, § 1. OFAC regulations haverecently defined this phrase to mean “(a) To own or control [an SDGT]; or (b) To attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or other financial services, to [an SDGT]. 31 C.F.R. § 594.316. Plaintiff alleges that the phrase “otherwise associated with” arguably encom passes First Amendment protected speech and association. The recently-adopted definition in 31 C.F.R. § 594.316, however, clarifies the phrase and limits its applicability to protected speech and conduct. Since the regulation was adopted, courts have twice rejected arguments identical to the plaintiff’s. See Al Haramain, supra, 585 F. Supp. 2d at 1270 (term “otherwise associated with” as defined in § 594.316 is not unconstitutionally vague);Humanitarian Law Project v.U.S. Dept of Treasury,484 F. Supp. 2d 1099, 1106 (C.D. Cal. 2007) (terms “on behalf of” and “to attempt, or to conspire” in § 594.316 are themselves sufficiently clear and clarifythe meaning of “otherwise associated with”). Plaintiff notes that § 594.316 includes the terms “services” and “material support,” which it alleges are unconstitutionally vague. For the reasonsdescribed above, neither termis vague either as it appears in E.O. 13224 or 31 C.F.R. § 594.316. Neither, therefore, makes the term “otherwise associated with” unconstitutionally vague.
iv. Lack of a Scienter Requirement Plaintiff claims, and the defendant does not dispute that OFAC may designate a targeted entity for providing “material support,” providing “services” or “otherwise associat[ing] with” an SDGT without showing that the targeted entity knew the recipient of its resources was an SDGT or
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that the targeted entity knew the resources would be used for illegal purposes. Plaintiff argues that this lack of a scienter requirement renders E.O. 13224 unconstitutionally vague.
Lack of a scienter requirement does not make an otherwise clear statute unconstitutionally vague. Even criminal statutes are not unconstitutional where the legislature did not make intent to violate the statute an element of the crime. Lambert v. California, 355 U.S. 225, 228 (1957) (“There is wide latitude in the lawmakers to declare an offense and to exclude elements of knowledge and diligence from its definition.”). Punishing “a person for an act as a crime when ignorant of the facts making it so” is not a denial of due process of law. Williams v. North Carolina, 325 U.S. 226, 238 (1945). Although “a scienter requirement may mitigate a law’s vagueness, especially with respect to the adequacy of notice to the complainant that his conduct is proscribed,”Hoffman Estates, supra, 455 U.S. at 499, lack of such requirement does not make the statute vague.
In this case, t he absence of a scienter requirem ent does not m ake OFAC’s authority unconstitutionally vague.
4. Procedural Due Process KindHearts asserts a due process challenge to OFAC’s provisional de signation of it as a SDGT. KindHearts claims that the statute on its face does not accom modate, and in any event, OFAC failed to provide constitutionally mandated due process. As a result, according to KindHearts, it was not given – and, in its view, even yet has not received – constitutionally adequate notice of the basis and reasons for the blocking order. It aslo asserts that the government has failed to provide an opportunity to be heard in response to that order and the deprivation of its assets.
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For the reasons that follow, I reject KindHearts’ contentions regarding facial invalidity for want of an express description of process. I conclude, however, that the governme nt’s actions regarding the blocking order failed to provide th e two fundamental requirements of due process: meaningful notice and opportunity to be heardM. athews v. Eldridge, 424 U.S. 319, 333, 348 (1974).
I find, though, that I presently cannot determ ine the extent to which KindHearts has been prejudiced by the violation of its constitutional rights.
I also conclude that the due process challenge to the provisional SDGT designation is not ripe for adjudication.
A. Asset Freeze - Facial Challenge KindHearts contends that IEEPA § 1702(a)(1)(B) is unconstitutional on its face because it fails to include procedural safeguards. The law does not require notice, an opportunity to be heard or pre- or post-deprivation process. A provision of the Patriot Act am ended the IEEPA and authorized OFAC to block an individual’s or organization’s assets based on its assertion that the individual or organization is under investigation.16 OFAC can thus freeze an American corporation’s assets just by announcing that the corporation is under investigation – under the statute it does not need to provide any process to that corporation. § 1702(a)(1)(B) states: At the times and to the extent specified in § 1701 of this title, the President m ay, under such regulations as he ma y prescribe, by means of instructions, licenses, or otherwise– (B) investigate, block during the pendency of an investigation, regulate, direct and com pel, nullify, void, preven t or prohibi t, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any r ight, power, or privilege with respect to, or
16Section 106 of the Patriot Act inserted “block during the pendency of an investigation” after “investigate” in the text of 50 U.S.C. § 1702(a)(1)(B).
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transactions involving, any pr operty in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States[.] KindHearts argues the government must provide notice and an opportunity to be heard by a neutral tribunal. While it agrees that the governm ent does not always have to provide predeprivation process, it maintains that the government must afford it prompt post-deprivation process. The government, in response, emphasizes the flexible nature of due process requirements, and states that courts must consider the governmental interest in national security in addition to harm to private interests and risk of erroneous deprivation. The government’s interest in national security, it contends, is paramount. KindHearts correctly contends that the IEEPA contains no procedural protections. That does not mean that it meets the Salerno “no set of circumstances” test. 481 U.S. at 745.17 Under Salerno, “a plaintiff can only succeed in a facial challenge by establishing that no set of circumstances exist under which the Act would be valid, i.e., that the law is unconstitutional in all of its applications.” Washington State Grange v. Washington State Republican Party, — U.S. –,128 S. Ct. 1184, 1190 (2008). In U.S. v. Al-Arian, 308 F. Supp. 2d 1322 (M.D. Fla. 2004), the court upheld the constitutionality of the IEEPA because the statute primarily applies to foreign organizations. The court reasoned that facial analysis of the statute should include the statute’s application to foreign organizations and to organizations without a substantial connection to the United States. It stated, “[i]n such limited and exceptional circumstances . . . the facial analysis of a statute, like AEDPA
17 See supra, § 4. Nor, despite KindHearts’ contention to the contrary, does the statute implicate First Amendment freedoms. Id.
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or IEEPA, should include application to foreign organizations and individuals without a substantial connection to the United States.” Id. at 1346. It rejected the notion that its analysis would “eviscerate the doctrine of facial invalidity.” Id. It instead explained that its analysis prevented it “from intruding into an area that . . . belong[ed] to the domain of political power.” Id.
No other court has explicitly addressed the constitutionality of the IEEPA under the Salerno “no set of circumstances” test. In Global Relief Foundation, Inc., supra, 207 F. Supp. 2d at 793, plaintiff argued the IEEPA did not apply to the domestic assets of a Uni ted States corporation. Plaintiff did not challenge the constitutionality of the statute under Salerno. In Holy Land Foundation, supra, 219 F. Supp. 2d at 67, plaintiff argued that under the IEEPA, the President can only block property in which a foreign country or national has an intere st that is “legally enforceable.” Again, plaintiff did not challenge the statute’s constitutionality under Salerno.
In Al-Haramain Islamic Foundation v. U.S. Dept. of Treasury, supra, the plaintiff challenged the lack of procedural safeguards and regulations under the APA, arguing that OFAC’s designation process was arbitrary and capricious because “none of the regulations [identified] any procedural or substantive criteria to guide the process.” 585 F.Supp.2d at 1253. In response to plai ntiff’s complaint that the designation process lacked procedural safeguards, the court held “there is no mandatory duty requiring OFAC to adopt the regulations AHIF-Oregon demands . . . ,the agency’s failure to do so cannot be deem ed ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law’ under the APA . . . In the absence of regulations, the requirements of due process apply.” Id. at 1254. Thus, although the court did not specifically address the constitutionality of the statute under the Salerno “no set of circum stances” test, it rejected
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plaintiff’s challenges by noting that the requirem ents of due process apply to and constrain implementation of the statute.
The government argues that the IEEPA can be applied constitutionally. It asserts that its application to KindHearts is an example of a set of circum stances under which the statute is constitutional. It notes that KindHearts suggests safeguards that it believes would satisfy the constitutional standard. Thus, according to the government, KindHearts itself suggests a set of circumstances under which the IEEPA is constitutional.
In Khouzam v. Attorney General of the U.S., 549 F.3d 235, 243-44 (3rd Cir. 2008), the court, considering the facial constitutionality of the Foreign Affairs Reform and Restructuring Act of 1998 [FARRA] noted that neither the statute nor its implementing regulations provided “any procedures to be afforded the alien once the Attorney Gene ral [made] a determ ination that a deferral [of removal] should be terminated based on diplomatic assurances.” The court did not, however, fault the statute or its implementing regulations for the lack of process the petitioner received. It noted that the Act did not prohibit the Executive f rom acting constitutionally, and theref ore was not facially unconstitutional. The court stated, “We do not attribute the lack of due process to . . . FARRA or its implementing regulations, for neither expressly directed the Executive to act in a manner that offends the Fifth Amendment. A statute is not facially unconstitutional unless ‘no set of circumstances exists under which the Act would be valid.’” Id. at 258; see also, Washington State Grange, supra, U.S. at , 128 S.Ct. at 1194 (f inding statute was not facially unconstitutional because it could “conceivably be” implemented in a constitutional manner). But see, e.g., Wisconsin v. Constantineau, 400 U.S. 433, 439 (1971) (finding statute that lacked provisions for notice and hearing unconstitutional); Leslie v. Lacy, 91 F. Supp. 2d 1182, 1186, 1193 (S.D. Ohio 2000) (finding
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statute unconstitutional on its face where text contained “no provision for notice . . . or hearing prior to the transfer of title . . . or after the transfer of title.”).
OFAC does not contend that due process requirements do not apply at all. Indeed, it contends that it has met those requirements. Thus, it implicitly acknowledges the mandate of due process: it only disputes the claim of noncompliance. Although OFAC, as discussed in the next subsection, failed to afford adequate post-deprivation due process, the statute under which it acted can, if properly administered, be implemented consonant with due process requirements. It is, therefore, not unconstitutional on its face.
B. Asset Freeze: As-Applied Due Process Challenge KindHearts argues OFAC provided inadequate post-deprivation process after impositing the block pending investigation in February, 2006, thereby violating KindHearts’ due process rights. These violations, according to KindHearts, included OFAC’s failure to specify any objective criteria for blocking KindHearts’ assets and provide either pre- or post-deprivation process. Due to OFAC’s alleged unconstitutional application of its blocking power, KindHearts asks that I lift the block.18 KindHearts claims that as notice of the block, OFAC only provided a single boilerplat e sentence stating that OFAC was investigating it for possible connections to Hamas. According to KindHearts, the notice failed to specify the Executive Order criteria OFAC suspected KindHearts of violating, and instead cited all the criteria inone sentence. Although KindHearts repeatedly asked for specification of the charges against it and reaosns for OFAC’s freeze, OFAC ignored its requests.
18 The parties agree that OFAC’s block pending investigation constitutes a final agency action subject to judicial review.
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KindHearts asked for the full administrative record OFAC was using against it, but OFAC has to date failed to provide KindHearts with the full record.19
OFAC notified KindHearts that it could submit a letter in response to OFAC’s block. Despite KindHearts’ prompt submission, OFAC failed to respond for over one year. Its response consisted of a mere acknowledgement of KindHearts’ letter.
The government rejects KindHearts’ assertion that it received constitutionally inadequate process following the blocking of its assets. Firs t, the government argues that in this case, due process does not require pre-deprivation notice oran opportunity to be heard. KindHearts does not refute the contention on this point. Pre-deprivation notice is not always necessary.See, e.g., CaleroToledo v. Pearson Yac ht Leasing Co., 416 U.S. 663, 678-79 (1974) (finding that in lim ited circumstances a seizure can take place without pre-seizure notice and a hearing).
The government insists KindHearts cannot legitimately claim it was unaware of the legal and factual grounds for the block. The initial blocki ng order notice stated that OFAC bl ocked KindHearts’ assets under E.O. 13224 and the IEEPA, asamended by the Patriot Act. It included the legal criteria supporting its investigation, stating it was investigating KindHearts for being “controlled by,” “acting for or on behalf of,” “assitsing in or providing financial or material support to,” “and/or otherwise being associated with Hamas.”
OFAC notes that the blocking notice did not include every basis for blocking authorized in E.O. 13224. Thus, it disputes KindHearts’ contention that it sim ply recited that Order’s list. Due
19 On May 25, 2007 (approximately one year and three months after the government initiated the block pending investigation), the government provided to KindHearts its unclassified and non-privileged record consisting of thirty-five exhibits along with its letter informing KindHearts of its provisional determination to designate KindHearts as a SDGT. The government did not, however, provide access to its classified record.
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process was also provided, the government asserts, via its invitation to KindHearts to challenge the blocking order by sending a letter presenting its views and evidence to the attention of the director of OFAC.
The government also claims that the press release placed on its website concurrently with issuance of the blocking notice constituted adequate notice of the factual basis for its decision to block KindHearts’ assets. OFAC adds that to da te, it has given KindHearts its letter stating its provisional determination to designate KindHearts an SDGT and the thirty-f ive unclassified and non-privileged exhibits supporting that provi sional determination, redacted provisional determination evidentiary m emorandum, redacted block pending investigation evidentiary memorandum and portions of declas sified exhibits. All this inform ation, according to OFAC, constitutes sufficient notice for KindHearts m eaningfully to challenge the block, along with its challenge to the provisional determination.
KindHearts responds that OFAC is conflating the notice it provided in conjunction with its blocking action with the notice of the provisional SDGT determination.
In response to KindHearts’ complaint about the three year delay in providing the bulk of the materials now in its hands, the governm ent contends that its original press release, issued concurrently with the blocking order, constituted sufficient notice. That, coupled with the invitation to KindHearts to send a letter challenging the blokcing order, satisfied due process. The government additionally argues that whatever notice problems may have existed at the time of the blocking have been cured because KindHearts now has adequate notice and may challenge both the block and impending designation. According to OFAC, whatever process problems the delay caused will be
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cured because the process is moving forward, and the parties are negotiating a timeline for a prompt adjudication.
(i). Components of Adequate Notice Constitutionally sufficient notice must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice m ust be . . . reas onably [calculated] to convey the required information . . . [W]hen notice is a person’s due, process which is a mere gesture is not due process. Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314-15 (1950). Constitutionally sufficient notice should give the party an understanding of the allegations against it so that it has the opportunity to m ake a meaningful response. The party must be able to know the conduct on which the governm ent bases its action, so that it can explain its conduct or otherwise respond to the allegations. It m ust also have reasonable access to the evidence that the government is using against them. See, e.g., Gete v. I.N.S., 121 F.3d 1285, 1297-98 (9th Cir. 1997) (discussing requirements of notice). To determine whether KindHearts received constitutionally required process in conjunction with OFAC’s block pending investigation, I must weigh 1) “the private interest . . . affected by the official action;” 2) “the risk of an erroneousdeprivation of such interest through the procedures used;” and 3) “the Governme nt’s interest, in cluding the function involved and the fiscal and administrative burdens that . . . additional or substitute procedural requirement would entail.” Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
(ii). What OFAC Provided as Notice
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To the extent that the government has provided notice of the basis for its blocking notice, it has done so in a piecemeal and partial manner. The blocking order simply recited criteria from E.O. 13224 and referenced the IEEPA, as am ended by the Patriot Act and 31 C.F.R. Part 594. According to KindHearts, OFAC sim ply stated all possible criteria f or investigation in a single sentence. OFAC disputes this, noting that it did nomt ention all of the criteria listed in the Executive Order.20 The concurrently posted press release similarly failed, according to KindHearts, to give any useful information about why the government froze all its assets and put it out of operation.
OFAC’s invitation to KindHearts to send a letter in response to the blocking notice did not add to KindHearts’ understanding of the reasons and basis for the governm ent’s actions. The government did not offer access to the unclassifiedadministrative record, any part of the documents and property seized during execution of the search warrants, or funds to pay attorney fees. Nonetheless, KindHearts’ attorney at that time, Jihad Smaili, promptly submitted a challenge to OFAC’s blocking action.
On November 29, 2006, Lynne Bernabei, successor counsel for KindHearts, wrote OFAC requesting access to the full administrative record for the potential designation. Not only did OFAC not provide any portion of the administrative record, it did not even respond to the November 29th letter.
20KindHearts also argues that OFAC failed to state the legal criteria supporting its blocking decision. OFAC now states it acted under the “reasonable basis” standard of the APA, at times calling the standard a “reasonable basis to suspect” [Doc. 36, at 30, n.25; 37] and at other times, a “reasonable basis to believe.” [Doc. 73, at 25]. As discussed in the § 3(A)(i)(b), supra, the government’s purported legal basis improperly tries to convert the standard for judicial review into the substantive standard triggering action under the statute. Going forward, the legal criteria for initiating the block pending investigation will be probable cause under the Fourth Amendment.
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On May 25, 2007, fi fteen months after OFAC blocked KindHearts, and more than a year after Smali’s letter to OFAC, OFAC notif ied KindHearts that it had provisionally determ ined to designate KindHearts an SDGT. OFAC’s notice acknowledged receipt of Smaili’s November 29, 2006, letter, and stated tha t since receiving his le tter, it had com pleted its investigation, which resulted in the provisional SDGT designation.
OFAC’s notice of provisional designation did not recite new or alternative grounds for the potential designation. Instead, OFAC reiterated that its blocking action was based on the IEEPA, E.O. 13224 and 31 C.F.R. Part 594. It included with the letter thirty-five unclasiseidf, non-privileged exhibits, which constituted the unclassified administrative record on which OFAC based its provisional determination.
OFAC did not include a s tatement explaining how those exhibits related to its charges against KindHearts, or how those documents were relevant. See Al-Haramain, supra, 585 F. Supp. 2d at 1255-56 (stating that the government failed to provide constitutionally adequate process when it provided the administrative record supporting its designation /redesignation but the majority of those documents did not mention the plaintiff, and OFAC failed to explain the significance of that evidence).
Twenty of the thirty-five exhibits provided to KindHearts with the provisional determination notice do not mention KindHearts.21 The unclassified administrative record includes court opinions
21The unclassified administrative record consists of: a list of “Charitable societies whose accounts at Arab Bank were confiscated by Israeli security forces as Part of the Struggle Against Financing Terrorism,” from the Intelligence and Terrorism Information Center at the Center for Special Studies (http://www.intelligence.org.il/eng/finance/bacnk_ap6.htm); an article in the Cincinnati Post describing Fawaz Damrah’s sentencing to two months in prison; Treasury Department press release regarding Al-Aqsa’s designation as a financier of Terror Charity linked to Hamas; Treasury Department press release regarding Global Relief’s designation; indictment
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and indictments in Global Relief and Holy Land cases, historical articles, a Council on Foreign
Relations Backgrounder on Hamas, various OFAC press releases, newspaper articles, KindHearts’
Newsletters and its organizational chart. OFAC invited KindHearts to respond to its provisional
determination decision within thirty days of the date of the letter.
On June 14, 2007, KindHearts renewed its request for the full administrative record, both
classified and unclassifi ed. On June 25, 2007, KindHearts responded to OFAC’s provisional
determination with a twenty- eight page preliminary submission. It attached to that a 1369-page
submission of supporting evidence. On June 27, 2007KindHearts also requested that OFAC initiate
declassification review.
in Northern District of Illinois of Marzook (2004); Treasury Department Press release: U.S. Designates 5 Charities and 6 Hamas Leaders as Terrorist Entities; indictment in U.S. v. Holy Land Foundation (Northern District of Texas) 2004; Article on palestine-info.net: PA Closes down Islamic Institution, Societies, Newspapers, Parties; KindHearts’ Articles of Incorporation; Department of Justice Press Release: Alamoudi sentenced to Jail in Terrorism financing case; Treasury Department Press release 2004: Treasury Designates Global Network, Senior Officials of IARA for Support to Bin Laden, Others; 2003 Tax Form 990 for KindHearts; two KindHearts Newsletters describing its activities; Toledo Blade article regarding Senate Finance Committee’s investigation of twenty-five Muslim organizations, including KindHearts, and the closing of the investigation; KindHearts’ address in Palestine and Lebanon on website; E.O. 13224 annex; three page “statement of the case” - almost verbatim repeat of press release OFAC issued on February 19, 2006; Press Release from Chairman of U.S. Senate Finance Committee; KindHearts and IARA correspondence and invoices; contractual agreements for services between KindHearts and North American Professional Services, Inc., & MLC Solutions; Letter from Sanabil to KindHearts; Global Relief Program reports; Email exchanges between KindHearts employees; Letter from Welfare Association to KindHearts; Internet article: “In Deir - El Balah, the Islamic Movement of Resistance Collects the Fruits of its Work on the Ground” (World Online); Global Relief contacts; Holy Land DC District and Circuit opinions; Boim v. Quaranic Literacy opinion; articles on the “Society of Muslim Brothers” and “Muslim Brotherhood’s Conquest of Europe;” Council on Foreign Relations Backgrounder on Hamas, KindHearts’ Organizational Chart.
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OFAC never responded to KindHearts’ June 25th subm ission.22 On August 10, 2007, KindHearts asked OFAC to perform a declassifica tion review of the classified and privileged evidence on which it relied.
OFAC agreed, and said it would give Ki ndHearts thirty days af ter the end of the declassification review to submit a response. For over fourteen months OFAC reported no progress with the review.23
On August 13, 2007, KindHearts requested further calrification of the charges against it, and an extension of time until forty-five days after the declassification review was complete. On August 15, 2007, it also asked for access to classified evidence and to its own documents, all of which had been seized. On Novem ber 6, 2008, OFAC sought declassification review of bl ock-related documents.
On December 12, 2008, approxim ately thirty-four months after the block pe nding investigation, and approximately eighteen months after its provisional determination to designate KindHearts an SDGT, the governm ent provided KindHearts with redacted versions of the block memorandum and evidentiary memo on which it relied in reaching its provisional determination. In its redacted provisional determination memo, OFAC indicated the significance of the unclassified records it had released nineteen months earlier.
In December, 2008, and January, 2009, OFAC declassified portions of the administrative record supporting its block. That record included seven exhibits that the governm ent had not
22 KindHearts learned about a year later that OFAC had no record of having received the submission. OFAC later admitted that it had received, but later misplaced the record. [Doc. 73].
23After KindHearts filed this lawsuit, OFAC told its counsel that it could complete the declassification review within thirty days.
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included among the exhibits disclosed with the provisional determination decision. The additional exhibits, according to the government, had not been relied on in making that determination.24 The December, 2008, submission included a redacted copy of the block memorandum.
On January 30, 2009, OFAC declassified portions of s everal paragraphs in the block memorandum. On March 13, 2009, in response to KindHearts’ final brief relating to t he pending pretrial motions, OFAC declassified one of the several bases for its block and provisional determination to designate KindHearts.
In sum, the “notice” KindHearts has receive d to date, since the government’s provisional determination to designate it an SDGT, is the letter K indHearts received informing it o f the government’s decision, the thirty-five unclassified,non-privileged exhibits, and a redacted version of the provisional determination evidentiary memo. OFAC claims it relied on the thirty-ifve exhibits in making its blocking decision, in addition to sevenother exhibits that it did not rely on in making its provisional determination decision. Those seven exhibits and the redacted block evidentiary memorandum have been handed over to KindHearts.
KindHearts remains largely uninformed about the basis for the government’s actions. To the extent that it has become usefully informed, that information came only after long, unexplained and inexplicable delay and following multiple requests for information.25
(iii). OFAC’s “Notice” Was Constitutionally Inadequate
24The government also stated that it would not be relying on those exhibits in the designation proceedings.
25To the extent that OFAC contends, or might contend, that KindHearts knew itself what it was doing, where its funds were going and the unlawfulness of their destination, such response on its part is unavailing. Notice is to come from the government because it alone knows what it believes, and why what it believes justifies its actions.
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OFAC’s block of KindHearts resulted in the indfeinite freeze of all of KindHearts’ assets and property, including about one million dollars in bank accounts. The block shut KindHearts down indefinitely and its corporate existence rem ains in jeopardy due to OFAC’s block pending investigation.
Applying the first factor from the Mathews balancing test – the private interest affected by OFAC’s action – it is clear that the private interestis substantial. An American corporation has had all its assets seized and been put out of business without being told, in any meaningful or useful way why, or on what basis the government took that action.
Applying the second Mathews factor – the risk of erroneous deprivation – I conclude that the failure to provide adequate and timely notice creates a substantial risk of wrongful deprivation. This is especially so in view of the fact that the government does not contend that KindHearts was donating its funds exclusively to Hamas. But the government has not provided its estimate of the approximate amounts of such donations, or what portion of KindHearts’ funds went to Ha mas or individuals or entities related to Hamas.
Nor, as importantly, has the government stated which recipients, to the extent that it knows of specific recipients, were Ham as fronts or Ham as affiliated. Without this sort of inform ation, KindHearts cannot meaningfully challenge the government’s actions. Not knowing to whom, in the government’s view, its funds should not have gone, it cannot rebut the governme nt’s claim that recipients were Hamas connected.
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An inability to rebut necessarily enhances, if it does not entirely ensure, the likelihood of
erroneous deprivation.26
Other courts have found that failure to provide m eaningful notice creates a high risk of
erroneous deprivation. For example, in Gete, supra, the Ninth Circuit held that INS’ procedures
following vehicle seizures violated pr ocedural due process. The court faulted INS for failing to
provide, post-seizure, its legal and factual basis for the seizure, “copies of [the] evidence to be used
against them,” and “statements of the reasons for its denials of relief.”Id. at 1298. It explained that
such procedures were necessary to “permit [plaintiffs] effectively to rebut the INS’ claims.” Id. at
1297. The court explained:
[R]equiring the disclosure of the factual bases for seizures woul d go a long way toward preventing som e of the errone ous and fundamentally unfair forfeiture decisions that inevitably flow fromso haphazard a process. So, too, would requiring the giving of notice of the specific statutoyr provision allegedly violated, rather than allowing the mere provision, without explanation, of copies of the entire statute and regulations. Similarly, furnishing owners with copies of evidence to be used against them, such as officers’ reports detailing the facts upon which the claim of probable cause is based, would permit them to understand the true nature of the INS’ charges and afford them a fair opportunity to pr epare a proper defense to the threatened forfeiture. Finally, requiring the INS to pr ovide statements of the reasons for its denials of relief would enable persons whose vehicles have been declared forfeited to determine whether the agency based its decision on erroneous facts, to discover whether there is evidence not previouslyconsidered that might be submitted, and to prepare reasonably informed petitions forremission, mitigation, and reconsideration.
Id. at 1298.
26As discussed infra, § 4(F) and § 5, the government has refused KindHearts’ requests for access to the blocked funds to enable it to compensate its attorneys. OFAC’s refusal to let KindHearts pay its lawyers to bring its challenges to the government’s actions amplifies the risks of erroneous deprivation. This is so, even though KindHearts has counsel in this lawsuit, which involves the prospect, but no guarantee of fee-shifting under the Equal Access to Justice Act, 28 U.S.C. § 2412(d).
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To comply with due process requirements, OFAC should, at the very least, have promptly given KindHearts the unclassified adm inistrative record on which it relied in taking its blocking action. See Al Haramain, s upra, 585 F. Supp. 2d at 1255-57 (discussing the inadequacy of the record’s contents, but taking for granted thatthe record should be provided after the block);Global Relief Found., supra, 207 F. Supp. 2d at 808 (noting OFAC publicly filed four binders of exhibits on March 27, 2002, approximately three months after OFAC’s block of Global Relief’s assets);Holy Land Found., supra, 333 F.3d at 164 (stating due process requires disclosure of the unclassified portions of the adm inistrative record). W ithout that record, OFAC’s invitation to send a letter challenging the bl ock held out no hope that any challenge would be either com prehensive or successful.
Applying the third Mathews factor – the governm ental interest and burden of providing additional procedural protection – I note that OFAC has not explained, either to KindHearts or this court, why it failed to provide timely notice of the basis and reasons for its blocking order, or why it took so long for it to provide the scanty information it ultimately has produced.
OFAC apparently assumes that no explanation is needed. If so, it necessarily concedes that the third Mathews factor indisputably favors KindHearts. Absent an explanation for its conduct and dismissive treatment of Ki ndHearts’ oft-repeated requests, it cannot claim that to have done otherwise would have been unacceptably or unduly burdensome.
In sum, consideration of theMathews factors leads inescapably to the conclusion that OFAC violated KindHearts’ fundamental right to be told on what basis and for what reasons the government deprived it of all access to all its assets and shut down its operations. Whether OFAC violated the Constitution deliberately or indifferently does not matter at this stage: what matters is
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that OFAC did not m eet its obligation to provide meaningful notice regarding its deprivation of
KindHearts’ property.
(iv). Failure to Provide Prompt Post-Deprivation Hearing
In addition to constitutionally inadequate notice procedures, KindHearts also argues OFAC
failed to provide it a meaningful opportunity to be heard. As the Supreme Court stated in Fuentes
v. Shevin, 407 U.S. 67, 80-81 (1972) (citation omitted):
The constitutional right to be heard is a basic aspect of the duty of gover nment to follow a fair process of decisionm aking when it acts to de prive a person of his possessions. The purpose of this requirement is not only to ensure abstract fair play to the individual. Its purpose, more particularly, is to protect his use and possession of property from arbitrary encroachment-to minimize substantively unfair or mistaken deprivations of property, . . . . So viewed, the prohibition against the deprivation of property without due process of law reflects the high value, embedded in our constitutional and political history, that we place on a person's right to enjoy what is his, free of governmental interference.
Despite the due process requirem ent of prom pt post-deprivation hearing, KindHearts
received no response to its adm inistrative challenge f or over one year. W hen OFAC finally
responded, it merely stated it had received KindHearts’ challenge and had provisionally determined
to designate it an SDGT. It provided no reasons for its decision. It merely enclosed a copy of the
unclassified record on which it relied in ma king its provisional determ ination and invited
KindHearts to send another response.
It is unclear whether OFAC even considers itisnvitation to KindHearts to challenge its block
and its one line response a “post-deprivation hearing.”27 OFAC did not require the challenge by a
27Adam Szubin, director of OFAC, described OFAC’s response to KindHearts’ challenge as an implicit denial of its challenge. He stated, “OFAC’s May 25, 2007 letter informing KindHearts of its provisional determination to designate referenced KindHearts’ request for reconsideration and, by implication, denied it.” [Doc. 73, Att. 1].
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certain date, nor did it agree to respond by a certain date. It waited over a year to respond. And one can hardly consider its one sentence acknowledgment of the receipt of KindHearts’ letter (which KindHearts put forward without the unclassified record, its own documents or access to its funds to pay its attorneys) a due process hearing.
Even if OFAC somehow believes that its invitation to send a letter fulfilled, at least initially, its obligation to give KindHearts an opportunity to be heard, its subsequent unresponsiveness has left KindHearts without any semblance of due process.
This is particularly true in light of howolng OFAC has withheld the opportunity to be heard. Partially through sim ple unresponsiveness, and partially through piec emeal disclosure of information, OFAC has engendered a delay of remarkable duration.
Promptness is an important aspect of the due process right to be heard.Barry v. Barchi, 443 U.S. 55, 64 (1979). There is, though,no bright-line gauge for determining whether the government has provided a hearing with sufficient prom ptness to protect against undue severity fr om the deprivation. Instead, the Supreme Court has created another balancing test, whereby courts are to examine the “importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken.” Fed. Deposit Ins. Corp. v. Mallen, 486 U.S. 230, 242 (1988).
In this case, KindHearts asserts a substantial pirvate interest - its existence and loss ofaccess to its assets.
OFAC asserts its dilatoriness resulted from a need to progress further with its investigation before being able to evaluate KindHearts’ challenge. It argues Congress gave OFAC the power to
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maintain the status quo while determining whether an organization has unlawful ties to Specially Designated Global Terrorists.
OFAC also argues that KindHearts is partly responsible for the delay, particularly any delay after May 25, 2007. OFAC notes that KindHearts has requested several extensions to respond to OFAC’s piecemeal disclosure of information about its reasons for the blocking order.28
OFAC bears primary responsibility for the delay KindHearts has encountered in i ts effort to be heard: It waited fifteen months after the block to make a provisional determination and provide even the largely uninfor mative unclassified record to KindHearts. In the m eantime, OFAC apparently lost a 1369-page submission that KindHearts attached to its preliminary response.
After OFAC agreed to declassify docum ents, more than fourte en months passed before KindHearts saw any results from the declassification review. OFAC took more than thirty months to give KindHearts redacted records supporting its blocking action. It also resisted giving KindHearts access to its own documents. The delays KindHearts has sought have, in contrast, been a reasonable attempt to be able to review and rsepond to intermittent, and still incomplete disclosure of the information on which OFAC acted.
The final element of the promptness inquiry is the likelihood that the interim decision was mistaken. OFAC presently asserts that it issued the bloc k order and has been investigating KindHearts because: 1) from KindHearts’ incepti on individuals have been i nvolved in the organization who were active and influential participants in other Islamic charities that OFAC has
28 The fact that KindHearts sought to enjoin final designation as a SDGT should not be held against it. KindHearts perceived that such designation would have prejudiced its position in this case. In any event, its motion for a temporary restraining order came after years had passed since the initial block order and the intervening failure by OFAC to provide it with reasonable notice.
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shut down due to their support of overseas terrorsit organizations, including Hamas; 2) members of
KindHearts have had contacts with known members of Hamas; and 3) KindHearts’ funds have gone
to Hamas controlled entities in the Middle East.
The materials provided to KindHearts give rise to som e reason to believe that these
allegations may be so. But what matters is whether OFAC has failed to afford KindHearts with a
adequate opportunity to be heard in response tohtose allegations. On balancing the pertinent factors,
I conclude that OFAC has failed to provide a m eaningful hearing, and to do so with s ufficient
promptness to m oderate or avoid the conseque nces of delay. OFAC did not provide tim ely or
sufficient notice to enable KindHearts to preparean effective challenge. OFAC ignored KindHearts’
initial response. What reply OFAC made to KindHearts’ responses and requests was delayed and
did not cure the def iciencies of its earlier notice. Even if OFAC may ultimately show it had an
adequate basis for the blocking order, that does not justify the length of the government’s delay in
giving KindHearts an opportunity to be heard.29
(v). Prejudice to KindHearts From the Due Process Violations
After concluding that OFAC’s provision ofpost-block process was constitutionally deficient,
I must determine whether, despite the unconstitutional procedures, I can “say any due process
29 KindHearts suggests that the Director of OFAC cannot be a neutral decision-maker. The Northern District of Illinois rejected a similar argument in Global Relief Foundation, supra, 207 F. Supp. 2d at 806, in which plaintiff refused to challenge OFAC’s block on the basis that the challenge amounted to little more than “window dressing because . . . the person . . . responsible for prosecuting Global Relief” would also be receiving the evidence. It cited the Supreme Court, which held that members of administrative agencies typically receive results of investigations, “approve the filing of charges or formal complaints instituting enforcement proceedings, and then . . . participate in the . . . hearings.”(citing Withrow v. Larkin, 421 U.S. 35, 56 (1975)). The Supreme Court explained the procedure did not violate the APA or due process. Thus, a hearing before the Director of OFAC does not constitute a violation of KindHearts’ due process right to a neutral decision-maker.
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violation was harmless beyond a reasonable doubt.” Al Haramain, supra, 585 F. Supp. 2d at 1257 (citing Tennessee Secondary Sch. Athletic Ass’n v. Brentwood Academy, 551 U.S. 291, 303, 127 S. Ct. 2489, 2497 (2007)).
The parties’ briefs have not addressed this issue, and I am not certain that the record, in any event, is sufficiently developed to de termine whether and to what extent KindHearts has been prejudiced, and whether any such prejudice has been cured or presently can be remedied. Further proceedings must occur before these questions can be answered.
C. As-Applied Challenge to Provisional Designation KindHearts also raises constitutional challenges to the process provided in conjunction with OFAC’s provisional designation of KindHearts a SDGT. OFAC does not contest KindHearts’ right to have adequate pre-designation notice and an opportunity to be heard. It claim s it has provide d the process that is due KindHearts relative to SDGT status. OFAC also contends that KindHearts’ claim that OFAC has not provided due process with regard to such status is not ripe for judicial review. This is so, according to OFAC, because it has yet to take final agency action, in the form of final designation of KindHearts as a SDGT. Thus, it argues, its actions thus far are not judicially reviewable under the APA. The APA limits judicial review of administrative actions to “final agency actions.” 5 U.S.C. § 704. KindHearts insists, howe ver, that, under Abbott Laboratories v. Gardner , 387 U.S. 136 (1967), abrogated on other grounds, Califano v. Sander,s430 U.S. 99 (1977), I can nonetheless now enjoin final SDGT designation.
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In Abbott Laboratories the Court upheld pre-enforcem ent review of agency actions . As KindHearts reads this decision, anticipated agency actoin is ripe for judicialreview if the court finds that the issues are “fit for judicial review” and tehparties will be harmed if I withhold consideration.
The decision in Abbott Labs and cases applying that decision are, however, limited to cases in which petitioners seek pre-enforcement review of what courts deem “final agency actions.” For agency actions to be considered final, “the action m ust mark the consummation of the agency’s decision-making process – it must not be of a merely tentative or interlocutory nature.” Bennett v. Spear, 520 U.S. 154, 177-78 (1997). The action must also “be one by which rights or obligations have been determined, or from which legal consequences will flow.” Id. (citations omitted).
In Abbott Labs, the Supreme Court permitted pre-enforcement judicial review of an FDA regulation interpreting a stat ute. The Court found that pre-enforcem ent review was appropriate despite the fact that the regulation had not yet beenenforced against a specific party. In its analysis, the Court noted that the ripeness doctrine required it toconsider the “fitness ofthe issues for judicial decision” and the “hardship to the parties of withholding court consideration.” Id. at 149.
In its discussion of the fitness of the issues for judicial review, the Court asserted that it considered the issuance of the regulation “final agency action” making it ripe for review under the APA. It noted that courts have “interpreted the finality element in a pragmatic way.” Id.
In each of the examples it cited to support a pragmatic interpretation of the finality element, the Court found agency regulations and orders as final agency actions fit for judicial revie w. Asserting that the regulation at issue inAbbott Labs constituted final agency action, the Court stated, “The regulation challenged here, promulgated in a formal manner after announcement in the Federal
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Register and consideration of comments by interested parties is quite clearly definitive. There is no hint that this regulation is informal.” Id. at 151.
In Ammex Inc. v. Cox, 351 F.3d 697, 706 (6th Cir. 2003), the Sixth Circuit, applyingAbbott Labs, held that ripeness in the context of pre-enfocrement review of agency action requires the court to weigh three factors:
The first two deal with the iftness of the issues for judicial determination. One aspect of the judicial fitness of the issues is th e extent to which the legal analysis would benefit from having a concrete factual context.The second aspect . . . is the extent to which the enf orcement authority’s legal position is subject to change bef ore enforcement. The third consideration deal s with the hardship to th e parties of withholding court consideration. In its discussion of the second factor, the Sixth Circuit noted that in Abbott Labs, the court found the regulation ripe for judicial review becauseit represented a “finalregulation that the FDA was unlikely to change.” Id. at 708. After noting the need for final agency action,the Sixth Circuit found no final agency action in Ammex, where the “Notice of Intended Action” was “at most an initiation of proceedings” and not final agency action. Id.; see also National Park Hospitality Ass’n v. Dept. of Interior, 538 U.S. 803, 812 (2003) (considering whether section at issuwe as final agency action, in addition to whether the question presented was a purely legal one, a nd whether “further factual development would significantly advance the court’s ability todeal with the legal issues presented”);Texas v. U.S., 497 F.3d 491, 498-99 (5th Cir. 2007) (finding challenge tosecretarial procedures fit for judicial review in part because they constituted “ final agency action, as they [were] final rules that were promulgated through a formal notice - and - comment rule-making process after announcement in the Federal Register”).
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It is unclear which of OFAC’s actions KindHearts considers “final” and subject to review. OFAC has not formally designated KindHearts an SDGT. KindHearts argues that OFAC has, for all intents and purposes, already made a final decision regarding its designation. OFAC, however, has stated that it will consider a response fromKindHearts before determining whether to designate it. I cannot assume that OFAC will designate KindHearts before it has done so.
OFAC’s provisional determination to designateKindHearts is not final agency action subject to review, because it does not “mark the consummation of the agency’s decision-making process.” Bennett v. Spear, 520 U.S. 154, 177 (1997).
Another point of c ontention is OFAC’s unwillingness to provide access to classified evidence or further notice to KindHearts. OFAC conetnds that it has provided sufficient due process to KindHearts. Thus, its attitude toward giving more information to KindHearts appears “final.”
I have not com e across a case in which a court deem ed an agency’s interlocutory and ongoing decisions regarding notice, where such decisions have not been formalized by agency rule, regulation, statute, order etc., as a final agency action subject to judicial review. The Abbott Labs line of cases permitting pre-enforcement review does not involve a due process claimsimilar to that which KindHearts raises. KindHearts does not seek pre-enforcement review of a formal, finalized regulation, statute or policy. KindHearts seeks, rather, pre-enforcement review of a process that it asserts has denied it due process.
I conclude, accordingly that KindHearts’ due porcess challenge to possible final designation as a SDGT is not ripe for judicial review.
D. Restrictions on KindHearts’ Access to Its Own Documents
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KindHearts argues that OFAC also severely restricted its due process right to meaningfully respond to allegations against it by: 1) denying it access to its own documents for over two years; 2) placing unreasonable restrictions on its ability toreview and use the documents; and 3) requiring counsel to give the government results of any independent investigation taken as part of KindHearts’ defense.
During its February, 2006, execution of search warrants at KindHearts’ office and it s president’s home, the FBI seized 150 boxes of documents, paper files, computer hard drives, video tapes and other media. OFAC refused to provide KindHearts copies of those records for over two years. KindHearts claims those records constituted the core of its defense because they document how it spent its money.
KindHearts also contends that in creating its administrative record OFAC selectively used those documents, excluding information unfavorable to it and thereby skewing that record.
In 2008, OFAC gave KindHearts’ counsel an electronic copy of a subset of its documents subject to a protective order. The order prohibited KindHearts members and officers from viewing the documents without court a pproval, and forbade KindHearts counsel from printing or electronically copying any documents. Only one representative had a copy of a subset of its own documents.
After KindHearts filed suit on October 9, 2008, thUe nited States Attorney’s office indicated a willingness to discuss amendments to the protective order. The government agreed to amend the order, permitting KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.
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KindHearts complained that these restrictions still interf ered with its ability to present a meaningful defense. Because some former officials live elsewhere than where the attorneys reside, KindHearts objected to the requirement that t hose officials could only review docum ents in counsels’ offices. It similarly objected to the restriction on counsels’ ability to print documents for review or to attach to pleadings.
The government acknowledged it provided counsel with an incom plete “subset” of the seized materials. It refused to provide the rem ainder even under the restrictive term s of the protective order, and despite the fact that thematerials, having been generated by KindHearts, were not classified.
OFAC claimed these restrictions were reasonable. In its initial response, it argued the blocked documents could contain sensitive inform ation such as donor lists, donee inform ation, procedures to avoid detection, etc. According to OFAC, its substantive reasons for limiting access to documents trumped KindHearts’ concerns.
This court, on January 30, 2009, granted Ki ndHearts’ motion to m odify the amended protective order. It required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. In light of the protective order, OFAC allowed KindHearts to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel. It therefore rendered moot KindHearts’ complaints regarding OFAC’s rule that former KindHearts officials review documents in the presence of counsel.
Though KindHearts now enjoys substantially unrestricted access to its own documents, that does not mean that the government’s conduct has no due process implications. Without access to its corporate records, KindHearts would find it difficult, if not impossible to document claims that
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OFAC either overlooked records favorable to KindHearts or misinterpreted records. Denying access by KindHearts’ counsel to its client’s r ecords deprived them of an important, if not the principal means for challenging the blocking order and defending against final designation of their client as a SDGT.
This action, coupled with OFAC’s delay in providing any significant information from its own files about its basis and reasons for the blocking order, left KindHearts’ attorneys alm ost entirely unequipped to m arshal and present evidence. This, in turn, would have lessened significantly the benefits from having an opportunity to be heard, had a due process hearing been afforded to KindHearts.
E. OFAC’s Limitations On KindHearts’ Investigation KindHearts argues that OFAC’s requireme nt that it identify all docum ents obtained from former KindHearts officials violates its due process right to a meaningful defense by forcing it to act as agents for the government. It also argues the rule is an “arbitrary and capricious exercise of authority granted under the Regulations.” OFAC responds that it only requires generic information regarding additional documents. For example, it wants to know the number of boxes of documents acquired from former KindHearts officials, to ensure that such m aterial is not destroyed or dissem inated. KindHearts rejects this explanation, stating the “param eters of [the rule] remain impermissibly unclear and subject to OFAC’s whim, especially given . . . the planiterms of the regulation – to which OFAC originally cited in support of its di sclosure requirement, 31 C.F.R. 501.603(b)(ii).” This rule requires substantial details about docum ents obtained, such as the owner, property, location, and contact
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information for the holder of the property. 31 C.F.R. § 501.603( b)(ii) requires initial reports on
blocked property to,
[D]escribe the owner or account party, theproperty, its location, any existing or new account number or similar reference necessary to identify the prope rty, actual or estimated value and the date it was blocked, and shall include the name and address of the holder, along with the name and telephone number of a contact person from whom compliance information can be obtained. If the report is filed by a financial institution and involves the receipt of a paym ent or transf er of funds which are blocked by the financial institution, the report shall also include photocopy of the payment or transfer instructions receive d and shall confirm that the paym ent has been deposited into a new or existing blocked account which is labeled as such and is established in the name of, or contains a means of clearly identifying the interest of, the individual or entity subject to blocking pursuant to the requirements of this chapter.
OFAC states that it only requires general descrpi tions of the blocked property, and that such
a description “need not include the contents or even the nam e of the source of the docum ents. It
could satisfy its obligation by stating it was in possession of three boxes of documents.” [Doc. 36].
Given OFAC’s insistence that it only requires ge neric information so th at it can ca rry out its
mandate to provide oversight of blocked property, I find that its policy does not am ount to a due
process violation or an arbitrary and capricious exercise of its authority.
KindHearts does not contend that OFAC is demanding more than such generic information;
nor does it argue that providing such i nformation would violate its due process rights. Providing
generic information would not compromise KindHearts’ counsel, and requiring such information
is not a due process violation.
F. Restrictions on KindHearts’ Access to Its Own Funds to Finance Its Defense
OFAC prohibits use of blocked funds to pay attorney fees. Initially, under its policy, OFAC
required that KindHearts either payfor attorneys through “fresh funds,”i.e., funds raised outside of
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the United States, or apply for a license from OFAC to create a legal defense fund. For over two
years OFAC kept KindHearts from using any part of the blocked funds to pay its counsel.
KindHearts’ original attorney, Jihad Smaili, wrote several letters to OFAC inquiring into
methods of paying employees, ways to comply with the block and obtaining access to blocked funds
to pay for attorney fees. OFAC refused to entertain Mr. Sm aili’s repeated requests for access to
blocked funds, insisting instead that Smaili be compensated solely from overseas accounts or apply
for a license to start a legal defense fund.30
30On receiving the blocking notice, Smaili corresponded with OFAC regarding access to blocked funds to receive payment for his continued (and previous) representation of KindHearts. On February 24, 2006, Smaili sent a letter/fax to OFAC “requesting information regarding the procedure in place for receiving attorneys’ fees for his representation of KindHearts.” On March 1, 2006, Smaili acknowledged being informed that he would not be able to access any of the frozen funds for legal services provided, and to be provided” and protested that this “smack[ed] of inherent unfairness, especially since the government hasn’t made any official accusations against KindHearts.”
On March 9, 2006, Smaili applied for a license to enable him to access blocked funds so that he could “continue legal representation on behalf of KindHearts and to receive payment for legal services already provided to KindHearts both prior to the Blocking Notice and after the Blocking Notice.” He added, “KindHearts has no source of funding whatsoever after its accounts were frozen and there are no prospects for raising any funds for legal representation.”
On March 23, 2006, OFAC responded, issuing Smaili a license, but refusing to permit him access to blocked funds. It noted “payments authorized by the license must not originate from sources within the United States or within the possession or control of a U.S. person including overseas branches and must not be made from a blocked account or blocked property.” It acknowledged “under appropriate circumstances, OFAC has authorized the creation and operation of legal defense funds to enable the channeling of nonblocked funds from U.S. persons for the purpose of supporting legal representation, provided that the fund is administered by a law firm.” If KindHearts could not raise such funds, OFAC stated it would “consider other licensing options after receiving from KindHearts the report on all blocked property in KindHearts’ possession or control, wherever located, required by § 501.603 of the C.F.R.” Other options could include authorizing KindHearts’ access to its own blocked overseas property to pay for legal services, subject to certain terms and conditions.
On March 27, 2006, Smaili reiterated his concerns, stating KindHearts has “no prospects for raising funds to support its legal efforts” and that “KindHearts’ reputation in the community has
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Being unable to secure compensation, Smaili resigned as counsel in May, 2006. Successor counsel likewise sought to obtain access to blocked f unds for their fees. Their efforts were unavailing until March 3, 2009, when OFAC approvepdayment to Bernabei & Wachtel, PLLC of $27,040. In June, 2008, after OFAC’s attorney fees restrictions were challenged as unconstitutional in a separate lawsuit, Al Haramain, supra, 585 F. Supp. 2d a t 1246, OFAC implemented its new policy. The policy permits expenditure of blocked funds at rates based on the attorney compensation provisions of the Equal Access to Justice Act [EAJA], 28 U.S.C. § 2412(d), and Criminal Justice Act [CJA], 18 U.S.C. § 3006A. The policy thus allows paym ents of $7000, per attorney, for up to two a ttorneys for administrative proceedings and district court litigation. It permits $5000, per attorney, for up to two attorneys for appellate court litigation. Although th e policy states the funds are for “up to two attorneys,” OFAC later explained that KindHearts and other blocked or designated charities are not limited to two attorneys, but that for purposes of OFAC’s policy it distributes funds based on a hypothetical two attorneys.
been forever tarnished and it would be inconceivable and unreasonable to expect that individuals or entities would donate money to a KindHearts legal fund.” On April 24, 2006, Smaili sent OFAC a letter challenging the block pending investigation, in response to the notice of February 19, 2006. On May 17, 2006, he submitted a letter to OFAC stating he was resigning as counsel for KindHearts. In June, 2006, KindHearts retained Lynne Bernabei and David Cole. They continued to send letters requesting a license to access blocked funds. OFAC continued to deny these requests. These letters continued into October, 2006. On March 3, 2009, OFAC granted Bernabei & Wachtel, PLLC, a license to obtain $27,040.00 of blocked KindHearts funds in partial satisfaction of its attorneys’ fees request.
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KindHearts contends that OFAC’s policy and failure to provide KindHearts access to oitws n funds to pay for attorneys violates its due process right to access the courts.31 OFAC contends that there is no constitutional right to counsel in ci vil cases or access to blocked funds t o pay for attorneys.
KindHearts argues that OFAC’s policy prohibiting it from using its blocked funds to pay attorney fees constitutes a violation of itsdue process right to access to the courts.See, e.g., Martin v. Lauer, 686 F.2d 24, 32 (D.C. Cir. 1982) (“Meaningfulaccess to the courts is a fundamental right of citizenship in this country . . . Indee d, all other legal rights would be illusory without it.”) (citations omitted).
Courts have held that the governm ent may not deny civil litigants their right to obtain counsel. An arbitrary refusal by a state or federacl ourt to hear a party represented by counsel would amount to “a denial of a he aring, and, therefore, of due process in the constitutional sense.” American Airways Charters, Inc. v. Regan, 746 F.2d 865, 873 (D.C. Cir. 1984) (quoting Powell v. Alabama, 287 U.S. 45, 68-69 (1932)).
Courts having considered the issue have conlcuded, however, that no right to access blocked funds exists. See, e.g., id. at 869 (D.C. Cir. 1984) (assets that were “blocked, . . . [could] not be touched without OFAC’s perm ission”); Beobanka D.D. Belgrade v. U.S. , 1997 W L 23182, *1 (S.D.N.Y.) (noting that plaintiffs “cite no aut hority for the proposition that restrictions on the method of payment of counsel violates [sic] due process.”); Al-Haramain, supra, 585 F. Supp. 2d at 1271 (finding no due process right to access blocked funds).
31KindHearts also claims that OFAC’s actions vis-a-vis KindHearts’ requests for release of blocked funds to compensate counsel were arbitrary and capricious. See § 5(B), infra.
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OFAC correctly recites the doctrine that the Constitution does not guarantee compensation
for counsel in civil cases. E.g., Ivey v. Bd. of Regents , 673 F.2d 266, 269 (9th Cir.1982). Here,
however, KindHearts seeks to compensate counsel from its own funds, not those of the government.
Even so, KindHearts has noconstitutional claim to such funds. As the court explained inAl
Haramain:
The Fifth Amendment does not require access to blocked fees to pay attorneys. In both civil and criminal cases, courts have concluded that prohibitions on the use of funds for attorneys’ fees do not pose a due process violation. For example, pretrial restraining orders which freeze assets, including funds which a defendant s eeks to use to pay an attorney, do not arbitrarilyinterfere with a defendant’s fair opportunity to retain counsel and violate neither the fifth nor the sixth amendments.
585 F.Supp.2d 1233, 1271 (citations omitted).
5. Claims OFAC Acted Arbitrarily and Capriciously
KindHearts claims that OFAC acted arbitrarily and capriciously in implementing its initial blocking order and refusing requests to release blocked funds to compensate its counsel.32 OFAC denies that its decisions as to either issue were arbitrary or capricious.33 In addition, it contends that
issues relating to release of blocked funds for attorneys’ fees are not ripe for judicial review.
Under the Administrative Procedure Act, “an agency action shall not be set aside unless it
is ‘arbitrary, capricious, an abuse of discretion, orotherwise not in accordance with law.’” 5 U.S.C.
§ 706(2)(A).
32Details regarding KindHearts’ requests for access to blocked funds to compensate its counsel are set forth in § 4(v)(F), supra.
33Having found that the block pending investigation violated the Fourth Amendment, it is not necessary to examine whether that action passes muster under the more lenient arbitrary and capricious standard.
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Agency action is arbitrary and capriciouswhere the agency has relied on factors that Congress has not intended it to consider, entirely failed to conside r an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so im plausible that it could not be ascribed to a difference in view or the product of agency experience. National Cotton Council of America v. U.S. E.P.A., 553 F.3d 927, 934 (6th Cir. 2009) (citations omitted). The arbitrary and capricious standard is deferential to the agency, and a court m ay not substitute its judgment for that of the agency. See Motor Vehicles Mfrs. Ass’n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1989). The court restricts its review to the adm inistrative record without additional fact-finding. See Camp v. Pitts, 411 U.S. 138, 142 (1973). If the agency decision is supported by a rational basis in the adm inistrative record, the decision survives arbitrary and capricious review. See Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 290 (1974). Although arbitrary and c apricious review is highly deferential to agencies, the government asserts an even higher degree of deference in the realm of foreign affairs. See Regan v. Wald, 468 U.S. 222, 242 (1984). The Sixth Circuit has explained that “when conducting this form of review, [the court] ensure[s] that the agency examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection be tween the facts and the choice m ade.” National Cotton Council of America, supra,553 F.3d at 934 (citingMotor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983)). “While [the court] may not supply a reasoned basis for the agency's action that the agency itself has notgiven, [it] will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” Bowman Transp., Inc., supra, 419 U.S. at 285-86.
A. Ripeness
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OFAC’s attorney fees policy and its application to KindHearts’ attorneys is ripe for review. The policy and decision in response to counsel’s application for fees, which was granted in the amount of $27,040 for nearly three years’ work, represents a final agency action. Afte r formally announcing the policy in June, 2008, OFAC applied the policy to KindHearts’ counsel. Though it released some blocked funds, the amount released was far less than the $46,000 counsel sought.
KindHearts has been affected directly by the policy and continues to be so affected. Its original counsel, Jihad Sm aili, had to resign after m ultiple attempts to access blocked funds to receive payment for his w ork. Current retained counsel have had to seek and secure pro bono assistance from counsel from the American Civil Liberties Union.34
B. Whether OFAC’s Policy on Attorney Fees is Arbitrary and Capricious (i). Adoption of OFAC’s Policy
Was Not Arbitrary and Capricious In its policy statement on attorneyfees, OFAC explains that its policy “is aimed at enhancing the ability of a blocked party that lacks alternative access t o funds to acquire legal representation in connection with its designation or the blocking of its property and interests in prope rty.” [AR 1704-06]. In its arguments in this court, OFAC states that it caps fees to preserve blocked funds. Preserving blocked funds, according to OFAC, serves such important governmental interests as 1) depriving a sanctioned entity of the benefit of its property and preventing it from using its assets to further ends conflicting with United States interests; 2) preserving blocked funds as a negotiating tool for use by the President in addressing the relevant national emergency; and 3) preserving the blocked assets for legal judgments.
34Other private counsel, Fritz Byers and Professor David Cole, have pending fee petitions to OFAC.
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OFAC states that, after the terrorist att acks on 9/11, it “granted licenses for payme nt of attorney fees to Holy Land Foundation, Benevolence International Foundation and Global Relief Foundation, all of which were challenging blocking actions take n against them.” Those licenses permitted payment of attorney feesfrom blocked funds. According to OFAC, the three organizations used more than $ 3 million from the blocked accounts, which “evoked substantial criticism from various sources, including Congress. Congress enacted the Terrorism Risk Insurance Act of 2002, which authorized victims of terrorism to satisfy judgm ents by attaching the blocked assets of terrorist organizations and their supporters.” [Doc. 73]. This enactment, in OFAC’s view, enhanced the need to preserve assets, once it has blocked them.
Given OFAC’s explanation for its attorneyfee policy, I cannot find, under the arbitrary and capricious standard of review, that adoption of OFAC’s policy was arbitrary or capricious, or that the policy is arbitrary and capricious on its face. Limiting of the amount of attorney fees paid with blocked funds “is rati onally related to the advancem ent of legitim ate governmental interests.” Beobanka, supra, 1997 WL 23182, * 2; see also Al Haramain, supra, 585 F. Supp. 2d at 1271-72. I may not substitute m y judgment for that of th e agency or order the agency to adopt a m ore generous policy.
(ii) OFAC Applied its Policy to KindHearts Arbitrarily and Capriciously
I find, however, that OFAC’s application of its policy to KindHearts in this case has been arbitrary and capricious. This is so because: 1) OFAC has provided no suffi cient statement of reasons for authorizing paym ent of $27,040, rather than the full and still rather mode st, amount requested, or some amount in between; 2) OFAC has not addressed the effect on the generation of attorneys’ fees of cer tain special circumstances in this case, such as its delay in responding to
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communications on behalf of KindHearts, and its ge neral unresponsiveness, in any event, to the
requests in those communications, and the complexity of nearly all the manifold issues; and 3) there
is a disconnect between the facts underlying the request for access to blocked funds for attorneys’
fees and the purposes, as described by OFAC, underlying its June, 2008, attorney fee policy.
OFAC gives no satisfactory reasons for its auhtorization of $27,040. It may be that it applied
the EAJA/CJA cap of $7,000 per attorney for two attorneys for proceedings first before the agency
and then before this court. But the am ount authorized is $960 less than the caps. OFAC does not
explain how it arrived at the am ount of $27,040, ra ther than authorizing t he “full” award of $28,000.35
More importantly, there is nothing in the recordto indicate that OFAC took into account any
of the circumstances that would justify awarding the full amount requested – $46,000 – to counsel.
As already noted, that is, i n absolute and relative term s, a modest amount given the work that counsel appears to have done both before the agency and in this court. 36 Three years had passed
35 In its license, OFAC merely states that it calculated the amount “with reference to OFAC’s published policy entitled ‘Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings (available at http://www.treas.gov/offices/enforcement/ofac/licensing/guidance/legal_fee_guide.pdf).” [Doc. 74, Att. 2].
36Bernabei & Wachtel provided, as requested by OFAC, an “Itemized statement of the hourly rate and number of hours billed per attorney for legal services directly related to the request for administrative reconsideration of the blocking and proposed designation, and the legal challenge thereto” [June 2006 - December 2008] and an “Itemized statement and description of costs incurred in seeking administrative reconsideration or judicial review of the blocking and proposed designation, divided by each phase of the case” [June 2006 - December 2008]. OFAC should have explained what it found wanting when it decided not to grant the petition in full.
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before counsel received a nickel. There is no reason to doubt that the am ount requested was for
services actually performed.
Most of the delay, as noted, resulted from OFAC’s failure to respond to repeated inquires
and requests by KindHearts’ counsel. Not compensating counsel for work done as a result of OFAC-
caused delay is an abuse of OFAC’s discretion,and supports a finding of arbitrary agency action.37
The issues raised in this case have been and rem ain complex.38 The amount of the award
suggests quite strongly that OFAC failed to take the complexities into account when it decided to
approve $27,040, rather than the $46,000 requested.
There is, moreover, a disconnect between OFAC’s response to the fee requests in this case
and the legitim ate governmental interests it states its pol icy furthers. No apparent, m uch less
37One aspect of the delay is particularly remarkable, and, perhaps, emblematic. Once OFAC agreed in August, 2007, to conduct a declassification review, KindHearts heard no updates or information regarding the review until November, 2008, after KindHearts filed this suit. OFAC agreed to complete such review within thirty days of a telephone conference which took place shortly after OFAC filed this suit. OFAC states it received the declassified documents back from the originating agencies shortly before this lawsuit was filed and that it reviewed them for accuracy, incorporated them into the administrative record, and produced them to KindHearts. OFAC’s failure to inform KindHearts of the status of the declassification process, and sudden readiness to provide the documents after KindHearts filed suit, contributed to the delay in this case and supports the finding that it acted arbitrarily and capriciously with regard to the attorney fee requests.
38Though looking to the EAJA and CJA as templates for OFAC’s June, 2008, policy was not arbitrary and capricious, the fit is far from exact and tight, especially with regard to the CJA. Relatively few federal criminal cases involve complexities similar to those present in these proceedings. When they do, approval of petitions for excess compensation is routine. Under both the CJA and EAJA, moreover, a judge – not one’s adversary – determines the amount of compensation, whether within or above the cap. Indeed, under the CJA, both the District Judge and a Circuit Judge must independently approve any request for excess compensation. Under the OFAC policy, it, rather than a judicial officer, decides how much of the blocked funds to release to counsel. While there does not appear to be anything inherently unlawful about this structure, it can, if not implemented in good faith, impartially and fairly, result in the kind of arbitrary and capricious “award” made here.
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manifest risk of dissipation of thecorpus would or could result fromgranting the requested amount. According to my understanding, the government has approximately $1 million of KindHearts’ funds. Allocation of about five percent of the sequestered assets for attorney fees would hardly endanger the integrity of the balance of those assets or the government’s ability permanently to retain them when and if it became entitled to do so.
Preserving the funds to pay possible future judgments against KindHearts is a worthy goal – provided there is some likelihood of claims being asserted, verdicts being entered and judgments being enforced. There is nothing to indicate whether OFAC took such likelihood, or lack thereof, into account in reaching its decision to award $27,040, rather than the requested $46,000.
Preserving the funds for use by the President asa negotiating tool does not seemat all likely in this case. These funds belong to an American corporation, not a foreign government, or even a foreign private entity with influence over relations with the United States.
Even if a risk exists that funds will be needed for either of these purposes, that risk should be weighed against the risk that private counsel will no longer be able or agree to represent KindHearts. As a corporation, KindHearts cannot represent itself. To gain access to the courts to contest OFAC’s actions and allegations KindHearts can only appear through counsel. Denying a corporation access to counsel is tantamount to depriving it of the right to defend itself. American Airways Charters, Inc., supra, 746 F.2d at 873, n.14.
Finally, paying counsel for putting OFAC to th e test of the Constitution and l aws of the United States hardly harm s United States interests. Indeed, it furthers them , regardless of the outcome of that test. To the extent OFAC fails the test, it can and no doubt will correct its procedures. Doing so will im prove its operations, while eliminating the distraction of f urther
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litigation. To the extent that OFAC passes the test , it can cont inue operating as it has, with the constitutionality of its operations having received a judicial imprimatur.
In light of the foregoing, I conclude that OFAC’s handling thus far of KindHearts’ request for access to blocked assets to compensate counsel has been arbitrary and capricious. Fromall that appears in the record, OFAC’s decision was reached mechanistically, and without individualized consideration of the facts and ci rcumstances of this case. If the basis for OFAC’s decision was otherwise, it has not said so.
Conclusion For the foregoing reasons, it is ORDERED THAT: 1. Secretary of the Treasury Tim othy Geithner and Attorney General Eric H. Holder are hereby substituted as defendants for former Secretary of the Treasury Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively. 2. Defendant’s m otion to dism iss [Doc. 36] be and hereby is granted with regard to plaintiff’s claims that:
A. The Fourth Am endment precludes final designation of plaintiff as a Specially Designated Global Terrorist, without prejudice; B. OFAC’s authority is void for vagueness; C. OFAC’s block pending investigation of palintiff’s assets contravened due process of law on its face; D. As applied, OFAC’s provisional designation of KindHearts as a Specially Designated Global Terrorist contravened due process , without prejudice;
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E. OFAC’s impairment of plaintiff’s investigation violated due process; F. OFAC’s restriction of access to blocked funds to compe nsate counsel, and otherwise be and hereby is denied. Defendant’s motion to dismiss is otherwise denied. 3. Plaintiff’s motion for partial summary judgment [Doc. 31] be and hereby is granted with regard to its claims: A. That OFAC violated the Fourth Amendment claim when it seized plaintiff’s assets without probable cause and prior judicial review and issuance of a warrant for such seizure; B. OFAC’s failure to pr ovide notice, and an opportunity to be heard, and its restrictions on plaintiff’s access to its documents; and C. OFAC’s limitation on the extent to which plaintiffs’ blocked funds are available to it to com pensate its counsel was arbitrary and capricious and vi olated the Administrative Procedure Act. Plaintiff’s motion for summary judgment is otherwise denied. 4. A status/scheduling conference is set for September 21, 2009 at 3:30 p.m.; not later than one week before the conference the parties shalslubmit an agreed or separate status report[s] specifying issues needing further consideration and suggesting a timetable for adjudication or other disposition of such issues. So ordered.
/a/ James G. Carr James G. Carr Chief Judge
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 Case: 3:08-cv-02400-JGC Doc #: 1 Filed: 10/09/08 1 of 35. PageID #: 1

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

KINDHEARTS FOR CHARITABLE HUMANITARIAN DEVELOPMENT, INC.,
Plaintiff,
v.
HENRY M. PAULSON, in his official capacity as the Secretary ofthe Treasury, ADAM J. SZUBIN, in his official capacity as the Director of the Office ofForeign Assets Control, and MICHAEL B. MUKASEY, in his official capacity as the Attorney General ofthe United States,
Defendants.

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COMPLAINT

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Civil No. - - - - -

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Introduction 1. This lawsuit arises out of an order by the Office of Foreign Assets Control ("OFAC") that has resulted in the freezing of all assets of a Toledo-based charity for more than two and a half years-without any notice of the basis for the freeze, any hearing, any finding of wrongdoing, or any meaningful opportunity to respond to the freeze. OFAC froze the assets of plaintiffKindHearts for Charitable Humanitarian Development, Inc. ("KindHearts"), an Ohio nonComplaint - Page 1

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profit charitable organization, on February 19, 2006, pursuant to a USA PATRJOT Act provision that authorizes such freezes "pending investigation" to determine whether the entity should be designated as a "Specially Designated Global Terrorist" ("SDGT"). The statute sets forth no substantive criteria for when such a freeze pending investigation is permitted, requires no notice or opportunity to respond, and sets no time limit on the freeze. As of this date, more than 31 months after KindHearts' assets were frozen, OFAC has effectively closed it down on the basis of a letter that states merely that KindHearts is under investigation.
2. More than a year after OFAC froze KindHearts' assets, OFAC told KindHearts that it had completed its investigation and had "provisionally determined" to designate KindHearts as an SDGT. To this day, however, KindHearts has not been designated as an SDGT, and its assets remain frozen "pending investigation." The authority to designate is unconstitutionally vague and the process that resulted in the threatened designation also fails to afford KindHearts adequate notice of the charges against it or a meaningful opportunity to respond.
3. KindHearts, founded after several other Muslim charities were shut down in the wake ofthe terrorist attacks of September 11, 2001, did everything it could to ensure that it complied with Treasury Department guidelines, and conducted its operations in a transparent manner. It provided humanitarian relief to refugees, displaced persons, and victims of poverty, war, and natural disasters around the world, but especially in Palestine and Lebanon. It did not support terrorism or terrorist organizations in any way. Yet for more than two and a half years, its assets have been frozen, unavailable to it, or to the victims for whose aid it was provided.
4. This lawsuit challenges 0 FAC's freeze pending investigation and the threatened designation as violations of the First, Fourth and Fifth Amendments, and as arbitrary and
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capricious under the Administrative Procedures Act. In addition, it seeks a temporary restraining order and preliminary and permanent injunctive relief barring OFAC from designating KindHearts until it has been provided due process in connection with any future designation. Official designation as an SDGT will inflict irreparable harm on KindHearts, and should not be permitted absent constitutionally adequate procedures and a substantial evidentiary basis, neither of which has been provided. Thus far, despite informing KindHearts that it has "provisionally'' decided to designate it, OFAC has not designated KindHearts, nor has it unfrozen its assets. OFAC has not provided KindHearts with a statement of the factual and legal basis for its provisional designation, has impermissibly relied on classified evidence and hearsay that denies KindHearts a meaningful opportunity to defend itself, and has failed to pursue alternative procedures that could provide KindHearts a fairer opportunity to defend itselfwithout cost to the security interests of the United States. Defendants have further undermined KindHearts' ability to defend itselfby restricting its ability to spend its own funds on its defense, and by seizing all its records and then imposing unreasonable restrictions on KindHearts' access to those documents, which are necessary to prepare a defense. These actions violate KindHearts' rights under the Fourth and Fifth Amendments.
Parties 5. PlaintiffKindHearts for Charitable Humanitarian Development ("KindHearts") is an Ohio non-profit corporation, incorporated on January 22, 2002. Its headquarters are in Toledo, Ohio, where it conducted its business. It also had offices in Palestine and Lebanon. 6. Defendant Henry M. Paulson, Jr., is sued in his official capacity as Secretary ofthe Treasury. He is responsible for designating individuals and entities as Specially Designated Global
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Terrorists in consultation with the Secretary of State, the Attorney General, and the Secretary of Homeland Security, is responsible for administering and enforcing the Global Terrorism Sanctions regulations, 31 C.F.R. Part 594 against designated individuals and entities.
7. Defendant Adam J. Szubin is sued in his official capacity as the Director of the Office of Foreign Assets Control. He is responsible for designating individuals and entities as Specially Designated Global Terrorists in consultation with the Secretary of Treasury, the Secretary of State, the Attorney General, and the Secretary ofHomeland Security, and is responsible for administering and enforcing the Global Terrorism Sanctions regulations, 31 C.F.R. Part 594 against designated individuals and entities.
8. Defendant Michael R. Mukasey is sued in his official capacity as the Attorney General of the United States. He is responsible for designating individuals and entities, in consultation with the Secretary ofthe Treasury, the Secretary of State, the Secretary ofHomeland Security, and for investigating and prosecuting criminal violations of federal laws, including the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701-1707.
Jurisdiction and Venue 9. This action arises under the U.S. Constitution, IEEPA, 50 U.S.C. §§ 1701-1707, and the Administrative Procedures Act, 5 U.S.C. § 551 et seq. This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1361. 10. This Court may grant declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., and Fed. R. Civ. P. Rule 57. This Court may grant injunctive relief pursuant to Fed. R. Civ. P. Rule 65. 11. Venue lies in the Northern District ofOhio, Western Division, the federal judicial
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district in which plaintiffKindHearts is incorporated and headquartered and where the actions complained of occurred.
Factual Background: The Statutory and Regulatory Framework 12. The International Emergency Economic Powers Act authorizes the President to declare a national emergency with respect to "any unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States, to the national security, foreign policy, or economy of the United States." 50 U.S.C. § 1701(a). When the President has declared such an emergency, he "may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise ... block ... , regulate, ... nullifY, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest, or with respect to any property, subject to the jurisdiction of the United States ...." 50 U.S.C. § 1702(a)(l)(B). 13. On September 23, 2001, President George W. Bush issued Executive Order 13,224, 66 Fed. Reg. 49079 ("E.O. 13,224"), declaring a national emergency in connection with the September 11, 2001 terrorist attacks. Section 2(a) ofthe Executive Order states that "any transaction or dealing by United States persons or within the United States in property or interests in property blocked pursuant to this order is prohibited, including but not limited to the making or receiving of any contribution of funds, goods, or services to or for the benefit of those persons listed in the Annex to this order or determined to be subject to this order." The Executive Order initially designated 27 individuals and entities, and also authorized the Secretary of the Treasury
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to designate other groups or individuals for engaging in terrorism, for providing material support to anyone on the designated list- regardless of the purpose of the support- and even for being "otherwise associated" with an entity or individual on the list. OFAC has admitted to designating individuals or groups based solely on a finding that they were "otherwise associated" with other groups on the list. On information and belief, OFAC has also relied on the "otherwise associated" provision in conjunction with other provisions to designate groups or individuals. Because OFAC issues no formal statement of reasons for any ofits designations, KindHearts does not know the legal or factual basis for its pending designation.
14. An amendment to IEEPA made by the USA PATRIOT Act, Pub. L. No. 107-56, 115 Stat. 272 (2001), authorizes the Secretary of the Treasury to freeze the assets of an individual or entity pending investigation for an indefinite period oftime, without specifYing any standard of suspicion necessary for such a freeze, and without requiring that the entity be provided with notice or a meaningful opportunity to contest the freeze. See IEEPA, 50 U.S.C. § 1702.
15. There is no definition in IEEPA ofthe term "Specially Designated Global Terrorist."
16. Regulations implementing E.O. 13,224 were promulgated by the Department of the Treasury on June 6, 2003. See 68 Fed. Reg. 34,196. These regulations, entitled the "Global Terrorism Sanctions Regulations," are located at 31 C.F.R. Part 594, and follow the model ofthe Executive Order with little added detail. Neither IEEPA, the regulations, nor the Executive Order require the Secretary of the Treasury to provide any statement ofreasons for a freeze pending investigation, or for a designation. OFAC's practice has been to simply issue a press release announcing its actions; it has not provided statements of reasons for its freeze orders pending
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investigation, or for its ultimate designations of individuals or entities. IEEPA, the regulations, and the Executive Order do not require that entities or individuals be provided with notice ofthe specific provisions under which they are being investigated or have been designated. Thus, entities targeted by OFAC must guess at the basis for its actions, and must effectively defend themselves in the dark. Neither IEEPA, the regulations, nor the Executive Order specifY what, if any, basis for suspicion the Secretary ofthe Treasury must have to freeze assets pending investigation.
17. 31 C.P.R. § 594.204 states that transactions involving property ofblocked persons described under section 594.201 are prohibited, "including but not limited to the making or receiving of any contribution offunds, goods, or services to or for the benefit ofpersons whose property or interests in property are blocked pursuant to § 594.201(a)."
18. 31 C.P.R. § 594.406 states that the "prohibitions on transactions or dealings involving blocked property contained in sections 594.201 and 594.204 apply to services performed in the United States or by U.S. persons, wherever located," and states that "U.S. persons may not ... provide legal, transportation, public relations, educational, or other services to a person whose property or interests in property are blocked." 31 C.P.R. § 594.409 expressly bars humanitarian aid to blocked parties: "no charitable contribution or donation of funds, goods, services, or technology, including those to relieve human suffering, such as food, clothing, or medicine, may be made to or for the benefit of' a person whose property is blocked.
19. Section 206 ofiEEPA states that a "civil penalty not to exceed $10,000 may be imposed on any person who violates, or attempts to violate, any license, order, or regulation issued under" IEEPA, 50 U.S. C.§ 1705(a), and that "[w]hoever willfully violates, or willfully
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attempts to violate, any license, order, or regulation issued under [IEEPA] shall, upon conviction, be fined not more than $50,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both." !d. § 1705(b); see also 31 C.P.R.§ 594.701.
KindHearts' Status and Operations 20. On January 22, 2002, KindHearts was incorporated as a nonprofit public benefit corporation under Ohio law. KindHearts' incorporation papers specifY that "the purpose for KindHearts shall be strictly for charitable procurement and distribution of funds/donations." KindHearts has never been a subsidiary of any other corporation or other entity. KindHearts was certified by the Internal Revenue Service as a 501(c)(3) tax exempt organization in October 2002. 21. KindHearts was headquartered in Toledo, Ohio. It provided individuals with the ability to provide charitable support in a manner that would fully comply with the law. Opened after several other Muslim charities were shut down in 2001, KindHearts' officers and board took careful measures to ensure that it abided by Treasury Department guidelines and all federal and state laws. KindHearts reviewed potential charitable recipients and partners against OFAC's list of designated terrorists, adopted the Treasury Department's "Voluntary Guidelines" to ensure full compliance, and sought guidance directly from the Treasury Department regarding its activities. From its incorporation through early 2006, KindHearts provided millions of dollars of humanitarian aid, principally directed towards assisting needy Palestinians in the West Bank, Gaza, and refugee camps in Lebanon. In its final year, it also raised substantial amounts ofmoney for earthquake relief in Pakistan. KindHearts also supported relief efforts in the United States
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after Hurricane Katrina, and in many other parts ofthe world. It divided its aid roughly into five categories: (1) Sponsorship, in which donors in the United States would undertake to provide regular donations to poverty-stricken families and individuals abroad; (2) Emergency and Health, including running health clinics in the West Bank and Gaza and responding to earthquakes, tsunamis, and other natural disasters; (3) Eid and Seasonal, which involved providing gifts of food, clothing and toys to poor families around the Muslim holiday of"Eid," when gifts were traditionally given to children; (4) Education and Development, which included providing needy schoolchildren with uniforms and backpacks, and running summer camps; and (5) General Sadaqah, which encompassed general charitable support, and included emergency aid.
22. KindHearts provided clean drinking water to schools, hospitals, and a clinic for the mentally disadvantaged in Gaza, ran a center for deaf and mute children in Lebanon, provided food packages during Ramadan to needy families, and delivered meat to families and gifts of clothes and toys to children during Eid. It also provided disaster relief after the tsunami in Indonesia. In its last year, before OFAC blocked its assets and the government seized its assets and documents, KindHearts was planning to build a hospital in Gaza, to open in January 2007.
23. KindHearts' assistance was provided to the poor and needy without regard to political affiliation or belief It identified recipients based on need alone, not ideology or association. And it generally provided in-kind aid to the needy, rather than in cash, to ensure that its resources were in fact used for charitable humanitarian purposes. The principal exception to the in-kind distribution was the needy family and orphan sponsorship program, which let people in the United States sponsor a needy child or family in Palestine or Lebanon, and provided approximately $50 a month to that person. Other than that program, KindHearts' aid was
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virtually always distributed in-kind. 24. KindHearts took extraordinary care not to fund any designated entities or
otherwise violate federal regulations and laws regarding designated terrorists. On January 2003, the Board discussed the need to ensure that its office in Gaza was kept fully informed as to the Board's decisions regarding the Treasury Department's Voluntary Guidelines. The Board continued discussing the implementation of these Voluntary Guidelines at its June 2003 meeting, and confirmed that the Gaza office had a copy of the guidelines. The Board's directive to comply with the Voluntary Guidelines was renewed at the December 2003 board meeting. The Board specified that Dr. Mohammed Elhady, a Board member, "must be informed of any associations, individuals, names, entities, etc., which KindHearts wishes to do business with so that he can thoroughly search the relevant web sites ofprohibited entities from the U.S. Government," since "all such entities, including partnerships, must be thoroughly investigated." The Palestine office "confirmed [to the Board] that it had been carefully and fully implementing the voluntary guidelines established by the U.S. government."
25. KindHearts' general counsel, Jihad Smaili, drafted a memo for KindHearts on Best Practices Guidelines (Nov. 25, 2002), which was designed to ensure that KindHearts would "fully comply with the Voluntary Best Practices Guidelines." This memo stated that KindHearts will "support nonpolitical agendas and will only support humanitarian and charitable efforts," and requires strict recordkeeping and a general ban on aid in the form of cash disbursements. The memo required that each recipient be checked against the federal government's list of designated terrorists to ensure that no support went to proscribed recipients. KindHearts' Employee Handbook specifically instructed all employees to "take great care in carefully reading and
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instituting the following guidelines and policies, especially the Voluntary Guidelines Memorandum authored by KCHD 's Attorney, Mr. Jihad M. Smaili." When the Treasury Department revised its voluntary guidelines in 2005, KindHearts' attorney drafted another memo for all KindHearts personnel on "Compliance with Treasury Department Voluntary Guidelines" (Dec. 12, 2005), adopting these voluntary guidelines as mandatory for KindHearts.
26. KindHearts rejected proposals from organizations and entities that had political affiliations or otherwise would be unsuitable for charitable donations. On November 3, 2003, KindHearts rejected a proposal from an association on the ground that it "may have affiliations with a political party. Therefore, it is highly advisable not to conduct work with them." On April 29, 2003, KindHearts rejected a proposal from El-Wafa Rehabilitation Hospital because "it is similar to the association in Rafah regarding its political roots," and on Apri117, 2003, KindHearts rejected a proposal from the Islamic Association, Rafah Branch, to sponsor a children's library or computer laboratory, after checking the OFAC lists, on the ground that it is "KH policy not to deal directly with any organization that has explicit political affiliation or direction."
27. Other controls were put in place to ensure that funding did not reach proscribed recipients. The Board gave the Chief Executive Officer, Khaled Smaili, authority to make disbursements of up to $5,000 in accordance with KindHearts' mission, but required all such transactions to be reported to the Treasurer. Under the Bylaws, Art. IV, § 2, any disbursements greater than $5,000 required approval ofthe Executive Committee ofthe Board. The power of attorney provided to the head ofKindHearts' office in Gaza, Ghalib Abushaban, specifically provided that he shall not support in any way any entity or individual listed as designated on
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OFAC's website. 28. In January 2004, when the KindHearts Board received unconfirmed reports that
Mahir Sabra, an employee, was allegedly associated with Hamas, the Board conducted an investigation and interviewed Mr. Sabra. Although Mr. Sabra denied the allegations, and the Board was unable to obtain further corroboration, the Board decided on January 18, 2004, that Mr. Sabra should resign his employment with KindHearts, and further decided that "a full investigation on the background of all board members, employees, and the like should be conducted in order to ensure that KindHearts' non-political humanitarian goals and ideals are preserved."
29. KindHearts raised funds in part by hiring independent contractors as fundraisers, on a commission basis. The contracts made clear that the fundraisers had no control over KindHearts' decisions as to the use of funds raised, and the fundraisers were expressly directed to raise funds only for projects formally approved by KindHearts itself
30. On February 28, 2004, KindHearts offered to cooperate fully with the U.S. Senate Finance Committee when it learned that this committee was going to investigate Muslim charities. After nearly two years, the Senate Finance Committee announced that it was taking "no public action."
The Government's Blocking and Seizure of KindHearts' Assets 31. On Sunday, February 19, 2006, OFAC announced that "all property and interests in property" ofKindHearts "are blocked pending investigation into whether Kindhearts is subject to designation pursuant to Executive Order 13224 (66 FR 49079) ... for being controlled by, acting for or on behalf of, assisting in or providing financial or material support to, and/or
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otherwise being associated with Hamas." Other than this unsupported assertion regarding unspecified support to or association with Hamas, OFAC provided no statement of reasons, no evidence, and no findings in support of this blocking order. OFAC issued a press release stating that "although the entity is not now an SDGT, its name has been integrated into OFAC's SDN list with the descriptor "BPI-PA" to indicate that all of its property and interests in property are currently blocked." That same day federal agents conducted a search of the Toledo office of KindHearts, and of the residence ofKhaled Smaili, and removed all ofKindHearts' records, computers, and a number ofboxes of publications and documents. OFAC blocked all the funds of KindHearts, including about $1 million in bank accounts.
32. The week before the blocking and seizure ofKindHearts' assets, the U.S. Department of Justice obtained two grand jury subpoenas from the U.S. District Court for the Northern District ofOhio. These subpoenas commanded (1) Ernst & Young (the outside accountant for KindHearts) to produce documents relating to KindHearts, including those from its office in Gaza, Palestine (Feb. 15, 2006), and (2) Dr. Hatem Elhady to produce all records of KindHearts from January 1, 2002 through the present (Feb. 17, 2006).
33. On February 24, 2006, Jihad Smaili, the outside counsel for KindHearts, wrote to OFAC to request information on paying the wages owed to KindHearts' employees, inquiring as to the status ofKindHearts' offices in Palestine and Lebanon, requesting that the frozen donations be conveyed to the Pakistani earthquake relief efforts pursuant to the donors' intent, and requesting information on payment of attorneys' fees. Mr. Smaili sent two follow-up letters on March 1, 2006 and March 9, 2006. In the March 1 letter, he submitted a license application for the release of funds for employee compensation and legal counsel, and further requested
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information on the donations received through KindHearts' website subsequent to the blocking and through the postal mail. In the March 9 letter, he renewed his request for the release of funds, and emphasized that "KindHearts has no source offunding whatsoever after its accounts were frozen and there are no prospects for raising any funds for legal representation" (emphasis in original).
34. On March 23, 2006, OFAC responded to Mr. Smaili. It issued a license authorizing Mr. Smaili to provide legal services to KindHearts, but OFAC Acting Director Barbara Hammerle stated that ''your request to be paid for legal services from blocked funds is therefore denied at this time," and that KindHearts could only make payments for legal services if those payments did "not originate from a source within the United States or within the possession or control of a U.S. person, including its overseas branches, and must not be made from a blocked account or blocked property." OFAC stated that KindHearts could set up "legal defense funds to enable the channeling of non-blocked funds from U.S. persons for the purpose of supporting legal representation." OFAC recognized that ifKindHearts "is unable to raise sufficient [overseas] funds pursuant to the attached license or through a licensed legal defense fund, OFAC will consider other licensing options ... [which] might include authorization for KindHearts' access to its own blocked overseas property to pay for legal services" (emphasis added).
35. OFAC has in the past allowed the use ofblocked funds to pay attorneys fees in similar cases brought by other designated entities. KindHearts has not been able to raise sufficient funds to pay for its legal defense, and as a result, it has not been able to pay its attorneys.
36. On March 27, 2006, Mr. Smaili wrote to OFAC Acting Director Hammerle, reiterating that since KindHearts had no prospect of raising funds, the OFAC License was useless,
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and requested again that KindHearts be permitted to pay for its legal defense out of its own frozen funds.
37. On April24, 2006, Mr. Smaili wrote to OFAC Acting Director Hammerle, to request that KindHearts ''be delisted from the SDGT List (Pending Investigation)," since over two months had passed since the government blocked its assets and closed its office, yet "not one single official factual allegation has been levied against KindHearts by any governmental entity." Mr. Smaili reiterated his request that KindHearts be allowed "to utilize its own resources to present a defense," and OFAC's refusal was contrary to "due process," since KindHearts, as a domestic corporation, was a constitutional person "entitled to due process." OFAC did not even respond to this letter until more than one year later.
38. Meanwhile, on May 24, 2006, OFAC Acting Director Hammerle responded to Mr. Smaili's March 27letter. Ms. Hammerle stated that KindHearts' "request to be paid for legal services from blocked funds continues to be denied at this time," since KindHearts had not submitted a request to establish a legal defense fund or submitted a report of all its property and property interests. Shortly thereafter, Mr. Smaili informed OFAC that he was withdrawing his representation ofKindHearts.
39. On June 23, 2006, Lynne Bernabei of The Bernabei Law Firm, PLLC (Washington, D.C.) (now Bernabei & Wachtel, PLLC), wrote to OFAC to request that OFAC issue a license to her law firm to allow it to represent KindHearts in the government investigations and blocking of its assets, and to authorize KindHearts to pay its legal fees and expenses.
40. On July 17, 2006, OFAC issued a license (No. SDGT-651) to The Bernabei Law Firm to allow it to provide legal services to KindHearts and to receive payment for those services,
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but stipulated that payments "must not originate from a source within the United States or within the possession or control of a U.S. person, including its overseas branches."
41. On July 27, 2006, David D. Cole, of the Georgetown University Law Center (Washington, D.C.), wrote to OFAC Acting Director Hammerle to request a license to represent KindHearts "in any challenge it may bring to the freezing of its assets or to its designation." As OFAC did not respond, Mr. Cole renewed his request on September 29, 2006.
42. On August 14, 2006, the U.S. Attorney's Office, Department ofJustice, obtained two grand jury subpoenas, issued to Dr. Elhady and to KindHearts, requesting "all documents, records or information, in any form ... located within the United States or its territories and in the care[,] custody or control ofKindHearts ... (an OFAC blocked entity)."
43. On October 20, 2006, OFAC modified OFAC License No. SDGT-651, issued to The Bernabei Law Firm, PLLC. The amended license, No. SDGT-651a, included a new provision that KindHearts could use its overseas assets, if any, to pay for its legal expenses. The license was renewed on December 20, 2007, and expires on December 31, 2009.
44. Also on October 20, 2006, OFAC issued license No. SDGT-673 to David D. Cole, to provide legal services to KindHearts, and to be paid from those services, but stipulated that payments could come only from overseas, either from non-blocked sources, or from KindHearts' own overseas funds, if any. In fact, KindHearts has no existing overseas funds that it knows o£
45. On November 29, 2006, KindHearts' counsel wrote to OFAC to request a copy of the full administrative record being used by OFAC in its investigation ofKindHearts.
46. On December 5, 2006, KindHearts' counsel provided OFAC with a statement by Dr. Elhady, pursuant to OFAC's request under 31 C.F.R. 501.603, as to KindHearts' property
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and assets. Dr. Elhady provided the names and addresses of the two banks in Toledo in which KindHearts had accounts. Dr. Elhady stated that he had no personal knowledge of the names of the banks that were used by the KindHearts offices in Lebanon and Palestine, let alone any ability to determine if those bank accounts still had assets. He stated that he believed, to the best ofhis knowledge, that after KindHearts was blocked, "the resources of the affiliates dissipated," and that the organizations that received funds from KindHearts would have expended those funds.
47. On May 25, 2007, thirteen months after Mr. Smaili sent his April24, 2006letter requesting reconsideration ofOFAC's decision to block KindHearts' property pending investigation, OFAC Director Szubin finally responded. Mr. Szubin stated that "OFAC has completed its investigation into whether KindHearts should be designated as an SDGT and has provisionally determined that designation is appropriate." A "provisional" determination to designate has no legal effect, and KindHearts continues to this day to have its assets frozen "pending investigation," as it has not been designated.
48. With his May 25, 2007 letter, Mr. Szubin provided KindHearts' counsel with thirty-five ''unclassified and non-privileged documents upon which OFAC relied in reaching this provisional determination." Mr. Szubin also stated that "OFAC also relied upon other classified and privileged documents obtained to date which are not authorized for disclosure, including material obtained or derived pursuant to the Foreign Intelligence Surveillance Act, 50 U.S. C. § 1801 et seq." Although OFAC had had over fifteen months to review the documents and computers seized on February 19, 2006, and KindHearts had no access to the seized material in that period, and still had no access to its own seized documents, OFAC allowed KindHearts only thirty days to submit its response to OFAC's production of the administrative record.
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49. Only a few ofthe documents that OFAC disclosed to KindHearts actually mentioned KindHearts. They included several OFAC and Department of Justice press releases relating to other individuals and entities, two criminal indictments that made no mention of KindHearts, several court decisions that did not mention KindHearts, and several newspaper articles. The OFAC documents also included KindHearts' organizational documents, and various contracts or agreements that KindHearts had entered into relating to fundraising on behalf of KindHearts, or to the distribution ofKindHearts donations for humanitarian purposes. Nothing in the unclassified administrative record provides any evidence that KindHearts has done anything that would warrant designation under E.O. 13224.
50. OFAC's May 25, 2007 disclosure also included a three-page "Unclassified Summary'' that made various allegations regarding support KindHearts allegedly provided to Barnas in Lebanon. However, this summary contains no indication of the source or sources of the information, or any information as to the reliability of those source or sources, making it virtually impossible to respond to in a meaningful way. For example, the "Unclassified Summary'' purported to describe in a general way several oral communications, but did not provide the transcripts or notes of those communications, their date and locality, or the identity of all parties to those communications. The "Unclassified Summary'' stated that a KindHearts official in Lebanon had sent funds to Barnas, but provided insufficient details to enable a meaningful response. The summary stated that one ofKindHearts' officials had been indicted for his involvement with the Holy Land Foundation from 1998 to 2000, but failed to note that the conduct in question predated KindHearts' existence. The "Unclassified Summary'' stated that KindHearts had transferred funds to Lebanon through the Sanabil Association, an SDGT, but
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failed to note that the transfer in question occurred before the Sanabil Association was designated in August 2003. The "Unclassified Summary" noted that Mohammed El-Mezain, an independent contractor fundraiser for KindHearts, was indicted for his work with the Holy Land Foundation in the late 1990's, long before KindHearts was founded, and that he allegedly made statements about supporting Hamas at a fundraiser, but failed to acknowledge that KindHearts had terminated Mr. El-Mezain upon learning ofhis indictment, or that under KindHearts' contracts, independent contractor fundraisers had no authority to determine how money was used. OFAC had not submitted the classified materials to a declassification review to determine whether they were still properly classified. Nor did it respond to KindHearts' counsel's request that they be permitted to review any classified evidence subject to appropriate security clearances.
51. On June 14, 2007, KindHearts' counsel wrote to OFAC to renew the November 29, 2006 request for "the full administrative record, both classified and unclassified, used by [OFAC] as a basis for designating KindHearts." KindHearts' counsel also requested "a full set of the records that were seized by the U.S. government ... in February 2006," noting that "since OFAC included some of these documents in the administrative record, it is clear that OFAC has had access to all the seized documents." Counsel explained that it would deprive KindHearts "of its due process rights to allow OFAC to use only those documents that it believes supports the agency's position, while preventing KindHearts from using its own documents, to which it no longer has access, to rebut OFAC's designation." Counsel also requested an extension of time to respond to OFAC's unclassified submission, since "the allegations made in OFAC's unclassified summary are of such a general nature that KindHearts is obliged to do substantial work to attempt to respond meaningfully." OFAC did not respond to KindHearts' request for an extension oftime
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until the late afternoon of June 25, 2007, the date the response was due. By that time, KindHearts had already couriered its response to OFAC.
52. Since OFAC did not timely respond to KindHearts' request for an extension of time, KindHearts' counsel submitted a 28-page preliminary response on June 25, 2007. In its preliminary response, KindHearts' counsel opposed the designation on both legal and factual grounds. In summary, as to the legal grounds, KindHearts objected on the grounds that OFAC failed to provide KindHearts with the constitutionally required notice and opportunity to respond, since OFAC improperly relied on classified evidence and unreliable hearsay, and that OFAC failed to submit the classified evidence for a declassification review or to grant a security clearance to KindHearts' counsel. KindHearts objected that the ''unclassified summary" was vague and conclusory, and failed to provide sufficient information to enable a meaningful response. Counsel also objected that OFAC had not included any specific charges, or even provided notice as to which of the various provisions ofE.O. 13224 it alleged KindHearts had violated. KindHearts also objected that OFAC's failure to provide KindHearts with a copy of its seized documents improperly forced KindHearts to defend itself without access to its own records, and objected to OFAC's restrictions on its ability to spend its own funds in its defense.
53. KindHearts' counsel then attempted to address the unclassified administrative record. As a threshold matter, counsel noted that most ofthe documents made no reference to KindHearts and/or involved events that predated KindHearts' formation. KindHearts' counsel discussed the relatively few documents that did mention KindHearts, noting that most ofthem did not evidence any illegal or unauthorized activities. The one document that could be so construed actually involved attempts by a former KindHearts employee to divert KindHearts funds, and
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KindHearts' vigorous response to ensure that its operations were legally conducted. KindHearts' counsel then discussed the "Unclassified Summary," and explained how OFAC had misconstrued, or taken out of context, the aforementioned limited contractual interactions that KindHearts had with the Sanabil Association before it was designated, and with El-Mezain before he was indicted. The remaining allegations in the "Unclassified Summary'' pertained to evidence about other organizations, some ofwhich were closed before KindHearts was formed. None of the allegations showed that KindHearts had any prohibited transactions or relationships with those organizations.
54. On June 27, 2007, KindHearts' counsel wrote to Brain Wilson ofOFAC, in response to his telephone call on the late afternoon of June 25, 2007, in which Mr. Wilson had stated that OFAC would grant the extension oftirne, and that OFAC would respond to the other matters raised in KindHearts' counsel's June 14, 2007letter. In the June 27letter, counsel renewed their requests for: (1) the full administrative record, both classified and unclassified; (2) a full set of the records seized from the KindHearts office and from the residence ofKhaled Smaili, its President; and (3) for OFAC to submit all classified evidence to declassification review and provide KindHearts' counsel with a security clearance so that they could review the classified documents.
55. On July 13, 2007, KindHearts' counsel renewed the request that KindHearts, its officers, and its attorneys, be provided with full access to the records, documents, and computers that were seized during the February 19, 2006 searches ofthe Toledo office and Khaled Smaili's residence, so that it could use them to defend itself KindHearts' counsel also advised OFAC that in order for KindHearts to defend itself, it would be necessary to interview former KindHearts
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employees and to ask them to search their own records for any documents that might assist in KindHearts' defense. KindHearts employees had expressed concern that such cooperation might be viewed as prohibited support to KindHearts, so counsel asked OFAC for assurance that former KindHearts employees and officers had the right to assist in KindHearts' defense without fearing retribution or prosecution from the federal government.
56. On July 27, 2007, KindHearts' counsel followed up by asking OFAC if its failure to respond to KindHearts' meant that OFAC had consented to former KindHearts employees and officers assisting in KindHearts' defense. KindHearts' counsel also complained that OFAC's failure to respond to its June 14 and June 27 letters precluded KindHearts from having a meaningful opportunity to provide a full response by August 15, 2007 to OFAC's administrative record. KindHearts' counsel renewed the requests for a specification of the charges against KindHearts, and a specification of the specific provisions in the Executive Order or any other regulation that OFAC was considering as a basis for designating KindHearts.
57. On August 10, 2007, OFAC Acting Director Hammerle belatedly responded to KindHearts' counsel's letters ofJune 14 and 27, 2007. OFAC stated, for the first time, that it would submit the classified information in the administrative record to the originating agencies for a declassification review. OFAC denied KindHearts' request for security clearances for its counsel. OFAC postponed any response to KindHearts' request for a full set of the seized documents. OFAC did not provide any specification of the charges or alleged violations ofE.O. 13224, and did not address the remaining issues raised in the June 14 and 27, 2007letters.
58. On August 13, 2007, KindHearts' counsel responded, noting that OFAC had still not addressed KindHearts' repeated requests for a specification ofthe charges against it. Counsel
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also requested that, given the unknown duration ofthe declassification review, KindHearts be given an extension of time of 45 days until after the declassification review was completed to provide any supplemental response to OFAC's public administrative record.
59. On August 14, 2007, OFAC Associate Director John Smith responded to the July 13 and July 27 letters from KindHearts counsel, but only addressed the access to document issue raised in those letters, and did not address the remaining issues. Mr. Smith claimed that OFAC had only those documents that had been produced to KindHearts, and stated that the U.S. Attorney's office had the remaining documents. He therefore directed KindHearts to contact the U.S. Attorney directly.
60. On August 16, 2007, OFAC Associate Director Smith responded to the July 27, 2007 letter with respect to the ability ofKindHearts' counsel to interview former employees and obtain their documents. Mr. Smith stated that any such documents "are considered blocked property," which would require a separate OFAC license, and that all such documents would have to be identified to OFAC with information on "the owner, the property, its location, any reference necessary to identity the property...."
61. On August 17, 2007, KindHearts' counsel requested, from the U.S. Attorney's Office for the Northern District of Ohio, a copy of the documents and files, including those in electronic format, that were seized in February 2006 from the KindHearts office in Toledo and from Khaled Smaili's residence.
62. On September 7, 2007, KindHearts' counsel wrote to OFAC Acting Director Hammerle to confirm that OFAC had provided KindHearts with an oral extension of time to respond to OFAC's provisional determination to designate KindHearts, granting KindHearts
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thirty days to respond after receiving the results of the pending declassification review. 63. On September 7, 2007, KindHearts' counsel renewed the request to the U.S.
Attorney's Office for a copy of the seized documents. 64. On September 11, 2007, Assistant U.S. Attorney Moroney responded to
KindHearts' counsel's August 17, 2007 and September 7, 2007 letters requesting access to the seized documents. AUSA Moroney stated that the evidence was seized pursuant to a search warrant, and that his office would deny the request for a copy of the seized documents. AUSA Moroney stated that the documents could only be released to counsel of record in the criminal investigation, not to civil attorneys, and that KindHearts "is a target of the criminal investigation," and access to seized information would not be provided before an indictment to a target or a target's counsel. Although AUSA Moroney stated that KindHearts could file a Rule 41(g) motion for return ofproperty, he added his office would oppose that motion, and claimed that KindHearts could not show that it had been "aggrieved ... by the deprivation of property."
65. On October 26, 2007, KindHearts' counsel wrote to OFAC to object to its requirement that any interviews by counsel of former KindHearts employees would require both KindHearts counsel and the former employees to identifY to OFAC all KindHearts documents in their possession. Counsel wrote that this demand (1) impermissibly interfered with KindHearts' due process right to a meaningful defense by restricting the ability as lawyers to represent KindHearts since it creates a conflict of interest in making KindHearts' counsel agents for the government; (2) violated the Fifth Amendment privilege against self-incrimination; and (3) improperly sought to use the OFAC proceeding to obtain discovery for a parallel criminal proceeding.
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66. Since OFAC did not respond to KindHearts' counsel's October 26, 2007letter, counsel wrote anew to OFAC on December 20, 2007, to renew the request that OFAC rescind its demand that KindHearts' counsel identifY all documents in the possession of former KindHearts employees.
67. On December 26, 2007, OFAC issued License NO. SDGT-899 to Bernabei & Wachtel, PLLC, to allow it "to receive copies ofblocked documents and records (the 'Blocked Property') ofKindHearts ... including from former officers and employees ofKindHearts necessary to provide legal services to KindHearts... " In an accompanying cover letter, OFAC Associate Director Smith stated that "only blocked property ofKindHearts-and not, as you claim, any documents in the possession of former officers and employees ... is subject to the reporting requirement," and asserted that KindHearts was not required to "describe the contents of any blocked documents or records" or "to identifY the source from which you obtained the documents." However, OFAC did not explain how it would determine whether a document was an individual's property or the property ofKindHearts, who would make that determination, or whether documents with unclear provenance were required to be identified or produced to OFAC.
68. On Aprilll, 2008, AUSA Duncan Brown ofthe U.S. Attorneys' Office for the Northern District of Ohio provided KindHearts' counsel with a DVD containing "materials concerning the designation ofKindHearts ... as a Specially Designated Terrorist Organization," including "the paper documents seized pursuant to a 2006 search warrant ofKindHearts' offices located at 245 West Central Avenue, Toledo, Ohio," and a copy of a protective order issued by Magistrate Judge Vernelis K. Armstrong. That Protective Order, In reSearch ofKindHearts for
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Charitable Humanitarian Development, No. 3:06 MJ 7019 (N.D. Ohio Apr. 9, 2008), expressly stated that the "materials may be viewed only by KindHearts' counsel and such members of its staff' and that "Members and officers ofKindHearts shall not under any circumstances be permitted to access or view any of the materials without petition to and further order of the Court; however, members and officers ofKindHearts may access and view non-image data pertaining to the materials for the purpose of assisting in the preparation oftheir defense in the designation proceeding in the presence of counsel and under the direct supervision and control of counsel." The Protective Order prohibited even printing out the documents or any electronic copying ofthe documents.
69. Neither the April9, 2008 protective order nor AUSA Brown's Aprilll, 2008 letter made any mention of the documents seized during the search ofKhaled Smaili's residence, and did not indicate whether all electronic files, or only paper documents, were included in the production of materials seized from the KindHearts office in Toledo.
70. On April17, 2008, KindHearts' counsel wrote to AUSA Brown, in response to the Aprilll letter and April9 Protective Order. Counsel explained that the terms ofthe Protective Order made it impossible for all ofKindHearts' counsel to review the materials and for KindHearts' members and officers to assist in the defense. KindHearts' counsel and former officers are scattered among several states and three countries (the United States, the United Kingdom, and Lebanon), thus requiring significant travel by both counsel and clients to review the materials, some of which are in Arabic, and many of which pertain to financial and organizational activities that would require the clients to review in order for counsel to understand their significance. Counsel stated that it would be necessary for counsel to have KindHearts
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employees, board members, and officers review the documents themselves to explain their meaning and significance. Further, counsel stated there is no basis to continue denying KindHearts full access to its own documents, particularly where the government already has had exclusive access to those documents for over two years, and KindHearts had still not been found to have engaged in any wrongdoing.
71. In April2008, the U.S. Department of State notified Khaled Smaili, who had returned with his family to his ancestral home in Lebanon, that his U.S. passport was revoked pursuant to 22 U.S.C. § 212 and 22 C.F.R. § 51.62, which provide for the revocation of passports when, for example, a grand jury has issued a subpoena to the passport holder. The passport revocation prevents him from leaving Lebanon.
72. On April 24, 2008, AUSA Brown responded to KindHearts' counsel's April 17 letter regarding the scope of the Protective Order governing the use of the DVD containing scanned images of the documents seized from KindHearts' Toledo office. AUSA Brown stated that the government would "not agree to any modification of the terms ofthe protective order," notwithstanding "the logistics ofhaving Dr. Elhady in Toledo and officers ofKindHearts outside the United States." AUSA Brown claimed that counsel would already have discussed all the relevant documents with Dr. Elhady, even though neither KindHearts' counsel nor Dr. Elhady had access to those documents in the intervening two years. AUSA Brown concluded his letter by stating that "I look forward to proceeding with the OFAC designation proceeding without undue delay."
73. On June 4, 2008, OFAC Associate Director Smith advised KindHearts' counsel of OFAC' s new policy "to authorize the release of a limited amount ofblocked funds for the
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payment oflegal fees and costs." That policy limits payment for services to "only two attorneys for KindHearts," and limits the payment to "$7,000 per attorney, for up to two attorneys, for the administrative stage of the proceeding," and accords OFAC the final say as to whether KindHearts can be reimbursed from its own funds for its attorneys' fees and expenses.
74. On June 5, 2008, Fritz Byers, Esquire, an attorney in Toledo, Ohio, requested a license from OFAC to serve as local counsel for KindHearts. OFAC issued License No. SDGT1000 to Mr. Byers on June 26, 2008; this license expires on June 30, 2010.
75. On June 25, 2008, AUSA Brown wrote to KindHearts' counsel, to "clarifY' his April24, 2008 letter, by asserting that "the former directors and officers ofKindHearts are allowed to view the DVDs' contents in the presence of counsel." However, AUSA Brown did not explain how his letter could contravene the clear terms of the Court's Protective Order, which expressly forbids such conduct absent a petition to the Court and modification of the Protective Order.
76. On July 16, 2008, OFAC Assistant Director Smith issued Amended License No. SDGT-899a to Bernabei & Wachtel, PLLC. This license previously authorized KindHearts' counsel to receive copies ofblocked documents and records ("blocked property") from current or former KindHearts officers and employees. The Amended License has a new provision that permits "the current or former officers or employees ofKindHearts to review the Blocked Property [seized documents] in connection with the Licensees' representation ofKindHearts," and provides that any such review "take place under the supervision ofrepresentatives ofthe Licensees." However, Mr. Smith's cover letter admitted that OFAC's Amended License "does not excuse compliance with any other laws, regulations, or court orders that may govern the
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handling of the blocked documents in Licensees' protection," and that "the appropriate forum in which to address such concerns is the United States Attorney's Office or the Court that issued the Order," thereby conceding that OFAC's Amended License had no effect absent modification of the Protective Order by the Court.
77. In August and September 2008, AUSA Brown and/or AUSA Moroney filed two motions with the U.S. District Court for the Northern District of Ohio, in the search warrant proceeding, No. 3:06-MJ-07019-VKA. According to the Court's docket, Magistrate Judge Vernelis Armstrong granted the first motion on August 4, 2008 (the same day it was filed), whereupon the government filed a second motion later that same day, and the court issued its ruling on that motion on September 18, 2008.
IRREPARABLE INJURY
78. Thus far, OFAC has not designated KindHearts as a "Specially Designated Global Terrorist." IfKindHearts is so designated, the designation will do irreparable harm to its reputation, and therefore to its ability to function as a charitable institution. A charity's most valuable asset is its reputation, as it depends on trust to give its donors confidence that their donations will be used properly. To be officially designated as a "Specially Designated Global Terrorist" would do irreparable damage to KindHearts, damage that could not be fully repaired even if the designation were subsequently successfully challenged and lifted.
79. Because KindHearts' assets remain frozen, defendants' interests will not be harmed by an injunction barring designation ofKindHearts until it has been afforded both specification of the charges against it and a meaningful opportunity to respond.
COUNT I THE FREEZING OF KINDHEARTS' ASSETS VIOLATED ITS FIRST AND FIFTH AMENDMENT RIGHTS BECAUSE THERE
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ARE NO SUBSTANTIVE CRITERIA FOR FREEZING ASSETS PENDING INVESTIGATION.

80. Plaintiff incorporates as though fully restated herein each ofthe allegations stated

in paragraphs 1 through 79, above.

81. The statutory provision authorizing freezing of assets pending investigation sets

forth no substantive criteria for such action. It leaves the freezing decision to the unfettered

discretion of OFAC, and is unconstitutionally vague on its face and as applied to KindHearts, and

therefore violates its First and Fifth Amendment rights.

COUNT II

THE FREEZING OF KINDHEARTS' ASSETS PENDING INVESTIGATION VIOLATED ITS FIFTH AMENDMENT RIGHT TO DUE PROCESS.

82. Plaintiffhereby incorporates as though restated each ofthe allegations in

paragraphs 1 through 81, above.

83. Defendants violated KindHearts' Fifth Amendment due process rights by, inter

alia, failing to provide KindHearts with adequate notice of the basis for the freeze or a meaningful

opportunity to challenge it, failing to provide for an administrative hearing and a prompt judicial

determination of the legality of the freeze, failing to provide a statement of reasons, failing to

provide any finding of wrongdoing, failing to impose any time limit on the freeze, failing to

specifY any substantive criteria for the decision to freeze, and imposing unreasonable restrictions

on KindHearts' access to its own seized records, which were essential to KindHearts' defense,

and imposing unreasonable restrictions on the ability ofKindHearts' counsel to obtain evidence

for its defense from third parties.

COUNT III THE FREEZING OF KINDHEARTS' ASSETS WITHOUT REASONABLE SUSPICION, PROBABLE CAUSE, OR A WARRANT VIOLATED THE FOURTH AMENDMENT.
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84. Plaintiffs hereby incorporate as though restated each ofthe allegations in

paragraphs 1 through 83, above.

85. The freezing ofKindHearts' assets for more than 31 months without reasonable

suspicion, probable cause, or a warrant constitutes an unreasonable seizure, in violation of the

Fourth Amendment of the United States Constitution.

COUNT IV

THE THREATENED DESIGNATION OF KINDHEARTS VIOLATES ITS FIRST AND FIFTH AMENDMENT RIGHTS BECAUSE THE DESIGNATION AUTHORITY AND THE CRITERIA FOR DESIGNATION ARE UNCONSTITUTIONALLY VAGUE.

86. Plaintiff incorporates as though fully restated herein each of the allegations stated

in paragraphs 1 through 85, above.

87. The designation authority under both IEEPA and Executive Order 13,224 is

unconstitutionally vague on its face and as applied to KindHearts, in violation of the First and

Fifth Amendments because it does not define such critical terms as ''terrorist organizations,"

"specially designated global terrorists," or any other term relating to "terrorism."

88. At the time KindHearts was provisionally designated, Executive Order 13,224

allowed the designation of groups based on findings that they were "otherwise associated" with

other designated entities, or had provided "material support" or "services" to designated entities,

without regard to the character or intent ofthe association or support. These terms are

unconstitutionally vague on their face and as applied to KindHearts, and therefore violate its First

and Fifth Amendment rights.

COUNT V

THE THREATENED DESIGNATION OF KINDHEARTS VIOLATES ITS FIFTH AMENDMENT RIGHT TO DUE PROCESS AND IS ARBITRARY AND CAPRICIOUS

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89. Plaintiffhereby incorporates as though restated each of the allegations in paragraphs 1 through 88, above.
90. Defendants violated KindHearts' Fifth Amendment due process rights by, inter alia, failing to provide KindHearts with adequate notice of the legal and factual basis for the threatened designation or a meaningful opportunity to challenge it even though defendants' investigation has been completed for close to seventeen months, failing to explain its assessment of its own administrative record materials, relying almost exclusively on classified evidence that affords KindHearts no meaningful opportunity to respond, failing to respond to KindHearts' requests for reconsideration, imposing unreasonable restrictions on KindHearts' access to its own seized records, which are essential to KindHearts' defense, and imposing unreasonable restrictions on the ability ofKindHearts' counsel to conduct any investigation.
COUNT VI OFAC'S RESTRICTIONS ON KINDHEARTS' USE OF ITS OWN ASSETS FOR ITS LEGAL DEFENSE VIOLATES DUE PROCESS AND IS ARBITRARY AND CAPRICIOUS.
91. Plaintiff incorporates as though fully restated herein each of the allegations stated in paragraphs 1 through 90, above.
92. OFAC's restrictions on KindHearts' ability to use its own assets in its own defense in connection with OFAC's freeze and threatened designation violates KindHearts' Fifth Amendment due process rights and is arbitrary, capricious, and otherwise not in accordance with the law under the Administrative Procedures Act, 5 U.S.C. § 551, et seq.
COUNT VII THE FREEZING OF KI~DHEARTS' ASSETS AND THE THREATENED DESIGNATION ARE NOT AUTHORIZED BY STATUTE.
93. Plaintiffs hereby incorporate as though restated each of the allegations in Complaint- Page 32

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paragraphs 1 through 92, above. 94. IEEPA authorizes the President to freeze assets only of foreign nationals in
conjunction with an economic sanction on a foreign country. E.O. 13224 imposes sanctions on individuals and organizations irrespective of any connection to any targeted foreign country, and therefore is unauthorized by IEEPA. KindHearts' freeze pending an investigation of whether it should be designated and its threatened designation under E.O. 13224 are unauthorized by statute.
COUNT VIII THE FREEZING OF KINDHEARTS' ASSETS PENDING INVESTIGATION AND THE THREATENED DESIGNATION ARE UNSUPPORTED BY SUBSTANTIAL EVIDENCE AND ARE ARBITRARY AND CAPRICIOUS.
95. Plaintiffs incorporate as though fully restated herein each of the allegations stated in paragraphs 1 through 94, above.
96. Defendants' freezing ofKindHearts' assets pending investigation and its threatened designation ofKindHearts are unsupported by substantial evidence, arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law, in violation of the Administrative Procedure Act, 5 U.S.C. § 701, et seq., IEEPA, 50 U.S.C. § 1701(a), and E.O. 13,224, because OFAC did not have sufficient evidence to warrant such action.
REQUESTED RELIEF NOW WHEREFORE, Plaintiffs pray this court for the following relief: 1. An injunction vacating the freeze order imposed on KindHearts; 2. A declaratory judgment that the statutory provision authorizing freezing of assets pending investigation, without any substantive criteria, procedural safeguards, time limits, or judicial review, is unconstitutional under the First, Fourth, and Fifth Amendments to the U.S. Complaint- Page 33

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Constitution, on its face and as applied to KindHearts; 3. A declaratory judgment that OFAC has failed to provide KindHearts with adequate
process in connection with its "provisional" designation, and an injunction barring such designation until after constitutionally adequate process is provided;
4. A declaratory judgment that Executive Order 13,224 is ultra vires because IEEPA authorizes freezing assets against organizations and individuals only in conjunction with a nationtargeted economic sanction;
5. An injunction against Defendants requiring them to release KindHearts' funds for its legal defense;
6. An injunction against Defendants requiring them to permit KindHearts' counsel, former officers, and former employees, unlimited access to copies of its own seized documents for purposes ofpreparing its own defense;
7. An award to Plaintiffs oftheir costs and attorneys' fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 et seq., and
8. Any other relief as the Court may deem just and proper. DATED: October 9, 2008

Complaint - Page 34

~~\v, ~"'-!LAPritz Byers;'OhiOBk No. 0002337 The Spitzer Building, Suite 824 520 Madison Avenue Toledo, OH 43604-1343 Telephone: 419-241-8013 Fax: 419-241-4215 fbyers@cisp. com
David D. Cole (D.C. Bar No. 438355)

Case: 3:08-cv-02400-JGC Doc #: 1 Filed: 10/09/08 35 of 35. PageID #: 35
Georgetown University Law Center 600 New Jersey Avenue N.W. Washington, D.C. 20001 Telephone: (202) 662-9078 Email: Cole@law.georgetown.edu
Lynne Bernabei (D.C. Bar No. 938936) Alan R. Kabat (D.C. Bar No. 464258) Bernabei & Wachtel, PLLC 1775 T Street, N.W. Washington, D.C. 20009-7124 Telephone: (202) 745-1942 Fax: (202) 745-2627 Email: Bernabei@bernabeipllc.com; Kabat@bernabeipllc.com
Hina Shamsi (N.Y. Bar No. 2995579) American Civil Liberties Union Foundation 125 Broad Street, 181h Floor New York, NY 10004 Telephone: (212) 519-7886 Fax: (212) 549-2583 Email: hshamsi@aclu.org
Jeffrey M. Gamso (Ohio Bar No. 0043869) Carrie L. Davis (Ohio Bar No. 0077041) American Civil Liberties Union of Ohio Foundation, Inc. 4506 Chester Avenue Cleveland, Ohio 44103-3621 Telephone: (216) 472-2220 Fax: (216) 472-2210 Email: jmgamso@acluohio.org
Counsel for KindHearts
Complaint- Page 35

 
 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

KindHearts for Charitable Humanitarian Development, Inc., Plaintiff v.
Timothy Geithner, et al., Defendants

Case No. 3:08CV2400 ORDER

Plaintiff KindHearts for Charitable Humanitarian Development, Inc. [KindHearts] challenged defendants’ block pending investigation [BPI] ofKindHearts’ assets and provisional determination, by the Office of Foreign Assets Control [OFAC] of the United States Treasury Departm ent, that KindHearts is a Specially Designated Global Terrorist [SDGT].
On August 18, 2009, I found that in bl ocking KindHearts’ assets, defendants violated KindHearts’ constitutional and statutory rights.KindHearts For Charitable Humanitarian Dev., Inc. v. Geithner, 2009 WL 2514057, *7-22, *37-46, *51-55 (N.D. Ohio) [August 18 Order] [Doc. 87]. I found that, in blocking KindHearts’ assets, defendants: 1) violated KindHearts’ Fourth Amendment rights by fa iling to obtain a warrant based on pr obable cause; 2) violated KindHearts’ Fifth

Amendment rights by relying on criteria ofr the BPIthat are unconstitutionally vague as applied, and by failing to provide KindHearts with adequate ntoice and a meaningful opportunity to respond; and 3) acted arbitrarily and capriciously in restritcing KindHearts’ access to itsown funds to pay counsel for its own defense. Id.
Pending is KindHearts’ motion for interim relief and/or a temporary restraining order. [Doc. 91]. KindHearts asks that I restrain defendant s from proceeding with the designation process pending my adjudication of what remedy, if any, is appropriate in this case.
I continue to be persuaded of the merits of and reasons for the conclusions in my August 18 Order,1 and forthcoming briefing will address what remedies, if any, are appropriate in light of those conclusions. Briefing is scheduled to be com pleted by January 11, 2010. A determ ination of the issue of remedy is the second half of a job that, at this point, remains incomplete.
To give effect to my August 18 Order, it is necessary that I address and decide the issue of remedy. If the defendants continue to consider whether KindHearts should be designate d as an SDGT, they will jeopardize my ability to exercise my jurisdiction to determine the issue ofremedy, and to complete my consideration of the issues raised in the motions leading to my August 18 Order.
Under, in the alternative, the Administrative Procedure Act [APA], 5 U.S.C. § 701 et seq., the All Writs Act, 28 U.S.C. § 1651(a), and my equitable powers, and for the reasons below, I grant KindHearts’ motion. Defendants shall be restrainedtemporarily from designating KindHearts as an SDGT, and from requiring KindHearts to respond to defendants in the designation process, pending my determination of what remedy shall issue because of the constitutional and statutory violations found in my August 18 Order.
1
I make this statement without prejudice to further challenges by either party. 2

Discussion KindHearts asks that I “preserve the status quo until [I] resolve[] the rem edial issues left open” by my August 18 Order. [Doc. 91]. KindHearts asserts that I have power to do so under my equitable powers, the APA and 28 U.S.C. § 1331. Defendants assert that I lac k authority and jurisdiction to provide injunctive relief. I conisder KindHearts’ motion under the APA, the All Writs Act and my equitable powers.
1. Administrative Procedure Act As previously detailed in my August 18 Order, I have jurisdiction under the APA and 28 U.S.C. § 1331. See also Citizens to Preserve Overton Park v. Volpe , 401 U.S. 402, 410 (1971) ; Abbott Labs. v. Gardner,387 U.S. 136, 142-43 (1967). I, as a federal court reviewing agency action, may, “[o]n such conditions as may be required and to the extent necessary to prevent irreparable injury,” issue “all necessary and appropriate process . . . to preserve status or rights pending conclusion of the review proceedings.” 5 U.S.C. § 705. In Sampson v. Murray, the Supreme Court observed that Congress intended this provision to codify the “Scripps-Howard doctrine” and mirror the usage of the All Writs Act. 415 U.S. 61, 68 n.15, 72-74 (1974). That doctrine, in relevant part, provides: “It has always been held, therefore, that, as part of its traditional equipment for the administration of justice, a federal court can stay the enforcement of a judgment pending the outcome of an appeal.” Scripps-Howard Radio, Inc. v. Fed. Commc’ns Comm’n, 316 U.S. 4, 9-10 (1942) (internal citations omitted). Courts reviewing agency action may, under 5 U.S.C. § 705, stay agency action from being completed or acted upon pending conclusion of the review process.See, e.g., Ohio ex rel. Celebrezze v. Nuclear Regulatory Comm’n, 812 F.2d 288, 292 (6th Cir. 1987).
3

In my August 18 Order, I began reviewing defenda nts’ BPI of KindHearts. These
proceedings are incomplete because I have not determined the appropriate remedy for defendants’
constitutional violations. Because, for the reasons below, I must act to preserve my jurisdiction and
prevent irreparable injury, I act properly in preserving the status quo and KindHearts’ rights until
my review concludes.
To determine whether a stay should be entered under § 705, I consider the same four factors
as I would in the context of an injunction: 1) the likelihood that the party seeking the stay wi ll
prevail on the merits; 2) the likelihood that the moving party will be irreparably harmed absent a
stay; 3) the prospect that others will be harmed if the court grants the stay; and 4) the public interest
in granting the stay.2 Celebrezze, supra, 812 F.2d at 290;see also Parker v. U.S. Dep’t of Agric,.879
F.2d 1362, 1367 (6th Cir.1989); Frisch's Restaurant, Inc. v. Shoney's Inc., 759 F.2d 1261 (6th Cir.
1985); Garlock, Inc. v. United Seal, Inc., 404 F.2d 256, 257 (6th Cir. 1968);accord Cuomo v. U.S.
Nuclear Regulatory Comm’n, 772 F.2d 972, 974 (D.C. Cir. 1985);First-Citizens Bank & Trust Co.
v. Camp, 432 F.2d 481, 483 (4th Cir. 1970). In performing this analysis, the Sixth Circuit has stated:
To justify the granting of a stay, a m ovant need not always establish a high probability of success on the m erits. Indeed, the language courts have used to describe the "success f actor" has varied, and w e have previously f ound that the variance can best be reconciled by recognizing that the four cons iderations are factors to be balanced and not prerequisites to be met. The probability of success that must be shown is inversely proportional to the degree of i rreparable injury the plaintiffs will suffer absent an injunction. Thus, a stay may be granted with either a high probability of success and some injury or vice versa. However, we reiterate that the demonstration of a mere “possibility” of success on the merits is not sufficient, and renders the test meaningless. Ordinarily the party seeking a s tay must show a strong or substantial likelihood of success. However, at a minimum the movant must show serious questions going to the m erits and irreparable harm which decidedly
2
In the alternative, I consider KindHearts’ m otion as a request for either a stay or a tem porary injunction. I thus analyze these factors in that light.
4

outweighs any potential harm to the defendant if a [stay] is issued. Celebrezze, supra, 812 F.2d at 290 (internal citations and quotations omitted).
A. Likelihood of Success on the Merits3 A temporary injunction typically requires a showing that the movant is likely to succeed on the merits of the case not yet heard. See id. Permanent injunctions, by contrast, generally require a showing that the m ovant has succeeded on the merits. See, e.g., Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 546 n.12 (1987);Marcavage v. City of Detroit, 2008 WL 2980040, *1 (E.D. Mich. 2008); Eller Media Co. v. City of Cleveland, 161 F. Supp. 2d 796, 807 (N.D. Ohio 2001). The standard for a permanent injunction is otherwise essentially the same as for a preliminary injunction. See id.; see also Warren v. City of Athens, 411 F.3d 697, 711 (6th Cir. 2005) (“[W]here a plaintiff establishes a constitutional violation . . . t[]he plaintiff [is] entitled to permanent injunctive relief upon a showing of: (1) a continuing irreparable injury if the court fails to issue the injunction, and (2) the lack of an adequate remedy at law.”). KindHearts here asks for solely a temporary injunction or stay, but does so in the unusual context of my already having decided the merits, but not the appropriate remedy. Because of this temporal similarity between KindHearts’ request and permanent injunctions, my analysis of this element under the standard typically used for permanent injunctions is therefore appropriate. On the constitutional and statutory violations I found in my August 18 Order, KindHearts has prevailed on the m erits. See KindHearts, supra. There is therefore not m erely a substantial
3
Although I find that KindHearts has satisfied its likelihood of success showing, I note parenthetically that the Sixth Circuit has suggest ed that such a s howing may not be necessary in some circumstances. See Celebrezze, supra, 812 F.2d at 290 (“To justify the granting of a stay, a movant need not always establish a high probability of success on the merits.”).
5

likelihood that KindHearts will prevail, but a certainty because it already has prevailed. There is, moreover, a substantial likelihood that I will find som e relief or rem edy appropriate for the constitutional violations I found in my August 18 Order.
KindHearts has thus satisfied its likelihood on the merits showing. B. Irreparable Harm
A plaintiff demonstrates irreparable harm “if the [plaintiff’s] claim is based upon a violation of the plaintiff's constitutional rights.” Overstreet v. Lexington-Fayette Urban County Gov't , 305 F.3d 566, 578 (6th Cir. 2002);see also Connection Distrib. Co. v. Reno, 154 F.3d 281, 288 (6th Cir. 1998) (stating that the loss of First Amendment rights, for even a short period of time, constitutes irreparable harm); Covino v. Patrissi, 967 F.2d 73, 77 (2d Cir. 1992);McDonell v. Hunter, 746 F.2d 785, 787 (8th Cir. 1984) (findi ng a violation of pr ivacy constitutes irreparable harm ). “[W]hen reviewing a motion for a preliminary injunction, if it is found that a constitutional right is being threatened or impaired, a finding of irreparable injury is mandated.” Bonnell v. Lorenzo, 241 F.3d 800, 809 (6th Cir.), cert. denied, 534 U.S. 951 (2001) (citing Elrod v. Burns, 427 U.S. 347, 373 (1976)).
Here, KindHearts’ claim is based on constitutional violations, and I found several of those violations to have occurred. KindHearts, if compelled to submit to the SDGT designation process, will not have been afforded the rem edy, if any, to which it is entitled based on defendants’ constitutional and statutory viol ations. KindHearts will thus suf fer irreparable harm in the designation process, commenced with the BPI, dueto the insufficiency of the notice provided them before the initial BPI determination.
Defendants are requiring KindHearts to respond to all egations that I have found
6

constitutionally lacking. KindHearts must, as a result, effectively disprove a negative if compelled to proceed before I provide whatever remedy I determine is proper. This constitutionally inadequate notice, moreover, has severely prejudiced KindHearts’ ability to respond especially in light of defendants’ arbitrary and capricious denial of KindHearts’ requests to pay attorneys fees with its own blocked resources. To analogize, KindHearts notonly is blindfolded, but also has its hands tied behind its back.
With respect to the violation I found rega rding KindHearts’ ability to com pensate its attorneys, defendants ha ve at one point taken the position that KindHearts has applied for and received as much compensation from its blocked assets as is possible under the current government policy. [Doc. 73, at 63-68]. This position, however, iscontrary to my August 18 Order. KindHearts, by having its counsel necessarily com pelled to w ork without compensation or resources unconstitutionally blocked, is confronted by the risk, at least potentially, of the loss of its counsel, as well as the intervening harm of being incapable of operating or using its own resources.
KindHearts also faces irreparabl e injury to its reputation if injunctive relief is denied. Reputational harm may rise to the level of irreparable injury.See Basicomputer Corp. v. Scott, 973 F.2d 507, 512 (6th Cir. 1992) (“The loss of customer goodwill often amounts to irreparable injury because the damages flowing from such losses are difficult to compute.”); Economou v. Physicians Weight Loss Ctrs. of Am., 756 F. Supp. 1024, 1039 (N.D. Ohio 1991)(noting that courts have found threats of harm to reputation and customer goodwill to constitute irreparable injury);see also Med. Shoppe Int’l v. S.B.S. Pill Dr., Inc., 336 F.3d 801, 805 (8th Cir. 2003) (“Loss of intangible assets such as reputation and goodwill can constitute irreparable injury.” (internal citations omitted)).
7

While these cases arose in a commercial context, the reasoning underlying these decisions

applies equally to charities. Charities also depend on their reputation and “custom

er”–i.e.,

donor–goodwill to continue to operate, because donorsmake donations much the same way typical

commercial customers make purchases. Both ch arities and businesses rely on reputation and

outreach to continue to exist, and a charity’s reputation and donor goodwill are just as essential to

a charity’s continued functioning as a busine ss’s reputation and custom er goodwill a re to the

business. The Sixth Circuit has also recognized, albeit in a different context, that reputational harm

to a charity results in harmto the charity’s operation and possibly even existence.See U.S. v. Wiant,

314 F.3d 826, 829 (6th Cir. 2003).

Although defendants have already denom inated KindHearts as “under investigation” for

possible designation as an SDGT, t he damage to KindHearts’ reputation and donor goodwill

attending actual designation differs qualitatively from, and would be far greater than, the stigm a

associated with being under investigation. This is akin to the difference between recovering from

being under criminal investigation and recovering from a criminal conviction. See U.S. v. Williams,

872 F.2d 773, 777 (6th Cir. 1989) (“[A] felony conviction irreparably damages one’s reputation.”).

Were defendants permitted to proceed withthe designation process, KindHearts would suffer

irreparable harm to its ability to operate and exist.

C. Harm to Others

Defendants allege that “[t]he government is extremely concerned about the continuing delays

in the ongoing administrative proceeding,” [Doc. 96, at 25], but much of defendants’ argument on

this point focuses on KindHearts’ complaints regarding delay. See Doc. 96, at 25; Doc. 104, at 5 n.1.

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This argument misses the thrust of KindHearts’ com plaints, which, inter alia, target delay in receiving the notice unconstitutionally withheld from them regarding the foundation for the BPI.
Defendants, moreover, have demonstrated that time is not of the essence to them . While defendants have a legitim ate interest in conti nuing the designation pro cess, the matter has been before them since sometime before February 19, 2006, the date KindHearts’ assets were blocked. By their arguments and actions, defendants ha ve failed to show a pressing need for im mediate continuation of the designation process.
There exists, nevertheless, the inchoate injury to def endants’ authority to perf orm its important responsibilities and conduct its inquiries according to its own tim etable without interference from the courts. Such judicial deference to the executive branch is, in general, especially appropriate in the areas of national s ecurity and foreign policy, which generally lie outside judicial competence. The manifest and continuing harm to KindHearts, however, when balanced against the intangible harm to defendants, justifies granting a tem porary stay in this extraordinary and unique circumstance.
D. Public Interest The public clearly has a substantial stake in the government being able to performits duties without interference. The public also, however, has a fundamental and great interest in seeing the Constitution upheld and ensuring that rem edies be provided when the governm ent has acted in derogation of constitutional rights. See G & V Lounge v. Mich. Liquor Control Comm. , 23 F.3d 1071, 1079 (6th Cir. 1994) (“[I]t is always in the public interest to prevent the violation of a party's constitutional rights.”) (citing Gannett Co. v. DePasquale , 443 U.S. 368, 383 (1979); Planned Parenthood Ass’n v. City of Cincinnati, 822 F.2d 1390, 1400 (6th Cir. 1987)).
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2. All Writs Act If the APA does not provide me authority to issue injunctive relief, I amable to do so under the All Writs Act, 28 U.S.C. § 1651(a) [the Act]. The Act provides that “[t]he Supreme Court and all courts established by Acts of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” The Act enables federal courts to “issue such commands . . . as may be necessary or appropriate to effectua te and prevent the frustration of orders it has previously issued in its exerciseof jurisdiction otherwise obtained.”U.S. v. N.Y. Tel., 434 U.S. 159, 172 (1977). The Act “fill[s] the interstices offederal judicial power when those gaps threate[n] to thwart the otherwise proper exercise of federal courts’ jurisdiction.” Penn. Bureau of Corr. v. U.S. Marshals Serv., 474 U.S. 34, 43 (1985). The Act’s powers are to be used “sparingly and only in the most critical and exigent circumstances.” Wis. Right to Life, Inc. v. Fed. Election Comm’,n542 U.S. 1305, 1306 (2004) (internal quotations and citations omitted). If I act on a case within my jurisdiction,4 “there is no doubt that [my] jurisdiction over the case includes authority to act under section 1651 when necessary to ‘protect,’Findley v. Laughead (In re Johns-Manville Corp.), 27 F.3d 48, 49 (2d Cir. 1994), or ‘aid,J’ones v. Lilly, 37 F.3d 964, 967 (3d Cir. 1994), [my] jurisdiction.” Covanta Onodaga Ltd. P’ship v. Onadaga Cty. Res. Recovery Agency, 318 F.3d 392, 396 (2d Cir. 2003).
4
Contrary to defendants’ assertion, I do not rely on the All Writs Act as a jurisdictional basis. I had jurisdiction over KindHearts’ challenge to theBPI procedure under the APA and 28 U.S.C. § 1331. I continue to have jurisdiction over the instantcase, and the pending motion, because I have not yet determined what remedy is appropriate for the constitutional and statutory violations I found in my August 18 Order. I therefore rely on the All Writs Act to protect my jurisdiction over that Order.
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While a definition of what it means to “aid” jurisdiction “may be elusive, Jones [v. Lilly], 37 F.3d [964] 967 [3d Cir. 1994], it seems clear that this requirement will be satisfied only where, in the absence of the writ, the court will be divested of jurisdiction or, at a m inimum, the effectiveness of that jurisdiction rendered null by a court's inability to pr agmatically enforce its judgments and decrees.” Moore v. Rees, 2007 WL 1035013, *12 (E.D. Ky. 2007).
Under the Act, district courts have power to issue injunctions directed at executive action. See, e.g., U.S. v. City of Detroit, 329 F.3d 515, 523-24 (6th Cir. 2003) (en banc). The power to stay administrative action is similar to the power to stay judicial action.See Scripps-Howard, supra, 316 U.S. at 9-10.
The action over which I seek to protect my jurisdiction and on which I issue this Order—the ability to adjudicate the appropriate remedy for violations found regarding the BPI—involves final agency action. KindHearts, supra, 2009 WL 2514057, *37 n.18. Allowing defendants to go forward with the designation process would interfere with the properly exercised jurisdiction of this court.
Under the unique facts of the present case, where I have already held that KindHearts was subject to multiple constitutional and statutory violations, my jurisdiction will be frustrated if the administrative process is perm itted to pr oceed before I address what rem edies, if any, are appropriate.
I therefore find that “critical and exigent” circumstances exist here to justify invocation of the Act to enjoin the designation process to protect m y exercise of jurisdiction on the issue of remedy raised by my August 18 Order.
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C. Equitable Powers In the alternative, I assert my ability to grant injunctive relief under my equitable powers. Federal courts are courts in law and equity. “[A] court of equity has traditionally had the power to fashion any remedy deemed necessary and appropriate to do justice in a particular case.” Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 846 (6th Cir. 1999). Courts have broad equitable power to fashion appropriate rem edies for adjudicated constitutional and statutory violations.See, e.g., Swann v. Charlotte-Mecklenburg Bd. of Educ,.402 U.S. 1, 15-16 (1971) (“Once a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, forbreadth and flexibility are inherent in equitable remedies.”). In determining “how far this remedial power extends[,] it is important to remember that judicial powers may be exercised only on the basis of a constitutional violation” and “the nature of the violation determines the scope of the remedy.” Id. at 15. In my August 18 Order, I ruled that KindHeatrs was entitled to—and denied—a BPI process that conformed with the Fourth and Fifth Amendments and the APA. It is only at this point that I am asked to exercise my equitable powers to preserve the status quo to ensure that I have an opportunity to evaluate the proper remedy, if any, for these adjudicated violations. I therefore enjoin the ongoing designation proceeding based not on a prospective challenge to the t hreatened designation, but on m y equitable powers to construct a rem edy for those vi olations already adjudicated.
Conclusion For the foregoing reasons, it is hereby: ORDERED THAT defendants be, and they hereby are temporarily restrained and enjoined
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from designating KindHearts as anSDGT, and fromrequiring KindHearts to respond to defendants in the designation process, pending m y determination of what remedy shall issue because of the constitutional and statutory violations found in the Order entered August 18, 2009. [Doc. 87].
So ordered. s/James G. Carr James G. Carr Chief Judge
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 Case: 3:08-cv-02400-JGC Doc #: 115 Filed: 05/10/10 1 of 35. PageID #: 2991

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

KindHearts for Charitable Humanitarian Development, Inc., Plaintiff v.
Timothy Geithner, et al., Defendants

Case No. 3:08CV2400 ORDER

Plaintiff KindHearts for Charitable Hum anitarian Development, Inc. (Ki ndHearts) challenged defendants’ block pending investigati on (BPI) of KindHearts’ assets and provisional determination, by the Office of Foreign Assets C ontrol (OFAC) of the Unit ed States Treasury Department, that KindHearts is a Specially Designated Global Terrorist (SDGT).
OFAC's authority to designate SDGTs and block the assets of entities under investigation for supporting terrorism stems from the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701-06, and Executive Order 13224 (E.O. 13224).
On August 18, 2009, I found that in blocking KindHearts’ assets, the government violated KindHearts’ constitutional and statutory rights.KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner (KindHearts I), 647 F. Supp. 2d 857 (N.D. Ohio 2009) (August 18 Order) [Doc. 87]. I found that, in blocking KindHearts’ assets, th e government: 1) violated KindHearts’ Fourth Amendment rights by failing to obtain a warrant based on probable cause; 2) violated KindHearts’ Fifth Amendment rights by relying on criteria f or the BPI that are unc onstitutionally vague as

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applied, and by failing to provide KindHearts with adequate notice and a meaningful opportunity to respond; and 3) acted arbitrarily and capricoi usly in limiting KindHearts’ access to its own funds to pay counsel for its defense. Id. I reserved ruling on the remedies for these violations.
On October 26, 2009, I temporarily restrained OFAC from proceeding with designation of KindHearts as an SDGT pending m y determination of the appropriate rem edies in this case. KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner (KindHearts II), 676 F. Supp. 2d 649 (N.D. Ohio) (October 26 Order) [Doc. 106].
The parties have now fully briefed me on the issue of remedy. I. Fourth Amendment Violation A. Reasonableness
The government first contends that the Fourth Amendment analysis in my August 18 Order was incomplete. This is so, it argues, because Iconcluded that OFAC violated KindHearts’ Fourth Amendment rights without separately analyzing whehter OFAC’s seizure of KindHearts’ assets was “reasonable.”
The government argues that the core of the Fourth Amendment is “reasonableness,” and that a seizure may be consistent with the Fourth Amendment if it is reasonable, even if it is not supported by a warrant and probable cause. The government urges me to conclude that under the “totality of the circumstances,” the seizure here was reasonable.
As I discussed in my August 18 Order, the government’s argument is based on the Fourth Amendment’s two textually distinct clauses – onebarring “unreasonable searches and seizures,” and one stating that “no Warrants shall issue, butupon probable cause.” U.S. Const. Amend. IV; see also KindHearts I, supra, 647 F. Supp. 2d at 878-79.
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KindHearts responds that there is no independnet “reasonableness” analysis under the Fourth Amendment, and that I already correctly found that the seizure of its assets violated the Fourth Amendment. KindHearts contends that it is well established that the Fourth Amendment requires a warrant and probable cause, or a recognized exception to those requirements.
In my August 18 Order, I first conc luded that OFAC’s actions am ounted to a seizure of KindHearts’ assets. KindHearts I, supra, 647 F. Supp. 2d at 872. I then determ ined that OFAC’s blocking of KindHearts’ assets violated the Fourth Amendment because OFAC did not obtain prior judicial review, and neither the special needs nor exigency exception applied. Id. at 878-84.1
The government’s reasonableness argument echoes its prior argument that the BPI falls within the special needs exception to the warrant requirement. The government contends specifically: 1) the government has a strong interest in acting quickly tporotect national security; 2) KindHearts’ interest is limited; 3) procedural safeguards built into theblocking program protect KindHearts’ interests; and 4) the specific facts underlying the BPI support a finding of reasonableness.
Even assuming arguendo that the governm ent is correct that a “ reasonable” seizure may comply with the Fourth Amendment absent a warrant and probable cause, or exception thereto, I find the seizure here was not reasonable.
In assessing the reasonableness of a sei zure, I m ust weigh the nature and extent of the government’s intrusion on private interests, government’s interest in effecting the seizure, and the existence of checks on arbitrary executive discretion. See Samson v. California, 547 U.S. 843, 856
1 The governm ent continues to argue t he BPI was not a seizure and that the Fourth Amendment is not implicated here. The government also continues to assert that even if the BPI is a seizure, either the special needs or exigen t circumstances exception excuses the warrantless seizure. I decline to revisit my previous ruling rejecting these arguments.
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(2006); Delaware v. Prouse, 440 U.S. 648, 654-55 (1979);see also Skinner v. Ry. Labor Executives’ Ass’n, 489 U.S. 602, 619 (1989) (“[T]he permissibility of a particular practice is judged by balancing the individual’s Fourth Ame ndment interests ag ainst its prom otion of legitim ate governmental interests.” (internal citation and quotation omitted)).
The government argues that its interests here –national security and foreign policy – are “at their zenith.” [Doc. 110, at 10]. Thisis so, the government contends, because BPIs carried out under E.O. 13224 “are by definiti on conducted to address ‘an unusual and extraordinary threat to the national security, foreign policy, and econom y of the United States[,]’ and are an exercise of the Executive’s authority to act in the f oreign policy and national security realm .” [Id. (quoting E.O. 13224)].
The government’s interest in cutting off funds and ot her support to terrorism is unquestionably compelling. The other factors, how ever, demonstrate OFAC’s BPI here was not reasonable.2
The government continues to argue that it “has a strong interest in being able to act rapidly, sometimes instantaneously, in this area to protect the national security.” [Id. at 11]. I do not doubt that these interests are strong. I have, however, alerady held that the government did not demonstrate a need to act rapidly in this case. KindHearts I, supra, 647 F. Supp. 2d at 883.
2 The government contends that I should draw on the recent decision of the District of Oregon, Al Haramain Islamic Foundation, Inc. v. U.S. Dep’t of Treasury, 2009 WL 3756363 (D. Or.) (Al Haramain), to conclude that the seizure here was reasonable under the circum stances. I disagree.
First, the court in Al Haramain based its conclusion that no Fourth Amendment violation occurred on the special needs exception, not on a totality of the circum stances reasonableness analysis. I already concluded, and decline to revisit, my previous conclusion that the special needs exception is inapplicable here. Second, I find theOregon court’s balancing between the individual and governmental interests unpersuasive as applied to the facts of this case.
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KindHearts’ interest here is also str ong, despite the governm ent’s contention that it is “limited.” [Doc. 110, at 11]. As KindHearts points out,I previously held that it “had a strong interest in accessing its funds, remaining in operation and disbursing its funds, to the extent it was doing so, lawfully.” KindHearts I, supra, 647 F. Supp. 2d at 884. I remain convinced that KindHearts’ interest is substantial.
The government also argues that this was a “regulatory action,” not an action carried out “for regular law enforcement purposes.” [Doc. 110, at 17]. My prior fniding that “OFAC’s blocking power has more in common with ordinary law enforcement than with any of the activities considered in the special needs cases” refutes this argum ent, and I decline the invitation to revisit it. KindHearts I, supra, 647 F. Supp. 2d at 881.
Next, the governm ent contends that the facts underlying the BPI require a finding of reasonableness. While these facts ma y speak to the level of governm ental interest at stake – one which I agree is compelling – the seriousness of the actions OFAC attributes to KindHearts does not itself make a search reasonable.
The government argues that “this case involves not the search of a home, but the regulatory blocking of the assets of an organization. The blocking does not involve a search . . . a nd as a result, Plaintiff’s privacy interests are substantiallylower than those of the typical criminal defendant whose home was searched.” [Doc. 110, at 16-17]. I disagree.
The intrusion in this case is far different intime and scope than those upheld as “reasonable” in the cases the government cites. For example, in upholding a police officer’s authority to order a driver out of his car at a traffic stop, the Supreme Court noted that the intrusion on the driver’s liberty
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“can only be described as de minimis” and as “at m ost a mere inconvenience.” Pennsylvania v. Mimms, 434 U.S. 106, 111 (1977).
In U.S. v. Knights, 534 U.S. 112, 118 (2001), the Court upheld as “reasonable” a warrantless search of a probationer’s apartm ent. The Court noted, however, a probationer’s “s ignificantly diminished privacy interests.” Id. at 121.
Similarly, in U.S. v. Conley, 453 F.3d 674, 680-81 (6th Cir. 2006), the Sixth Circuit held that collection of DNA froma parolee did not violate the FourthAmendment. The court inConley relied on a parolee’s “sharply reduced expectation of priavcy” and the “minimal intrusion required in taking a blood sample.” Id. at 680.
The duration of the intrusion on private interests here is far more extensive than the “mere inconvenience” in Mimms, supra, 434 U.S. at 111, or the “minimal intrusion” in Conley, supra, 453 F.3d at 680. OFAC froze all of Kni dHearts’ assets in February, 2006, and they have remained frozen ever since. A block affects “all property” in the conrtol of a target entity, presently, and in the uf ture. E.O. 13224 § 1. A block can thus last indefinitely.
Unlike the probationer in Knights and the parolee in Conley, KindHearts’ expectation of privacy was not diminished. The intrusion here – seizing all of KindHearts assets for an indefinite period of tim e – is a far m ore substantial intrusion on private interests than those upheld as “reasonable” in those cases.
I may consider procedural safeguards in determ ining whether a seizure is reasonable. Cf. Samson, supra, 547 U.S. at 856 (noting that prohibition on “arbitrary, c apricious or harassing searches” provided a check on officer’sdiscretion in searching a parolee);Marshall v. Barlow’s, Inc., 436 U.S. 307, 323 (1978) (invalidating statute authorizing administrative searches that “devolve[d]
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almost unbridled discretion upon executive and administrative officers, particularly those in the ifeld, as to when to search and who to search”).
The government argues that internal procedural safeguards protect KindHearts’ interests: 1) “blockings are carried out only as authorized by Congress following a presidential declaration of a national emergency”; 2) “[d]esignations pursuant to E.O. 13,224 require extensive internal process and consultation with the Secretary of State and the Attorney General on the ba sis of a n administrative record”; and 3) “blockings are carried out only following substantial investigations into the designated party’s actions and a consideration of the evidence obtained.” [Doc. 110, at 17].
I find these internal protections insufficient to satisfy the concerns underlying the Fourth Amendment. As I noted in the special needs an alysis of my August 18 Order, “OFAC’s blocking power entails no built-in limitation curtailing executive discretion and putting individuals on notice that they are subject to blocking.” KindHearts I, supra, 647 F. Supp. 2d at 857.
The government lastly argues that, under the Administrative Procedure Act (APA), 5 U.S.C. § 701 et seq., a blocked party can obtain post-blocking judicial review. The availability ofafter-thefact judicial review cannot alone,however, make a seizure reasonable.Cf. U.S. v. U.S. District Court, 407 U.S. 297, 317-18 (1972) (“The independent checkupon executive discretion is not satisfied, as the Government argues, by ‘extremely limited’ post-surveillance judicial review.”). As KindHearts points out, courts have not held that the availability of a cause of action under 42 U.S.C. § 1983 or Bivens v. Six Unknown Fed. Narcotics Agents , 403 U.S. 388 (1971), for a Fourth Am endment violation somehow makes a seizure reasonable.
OFAC need only claim that it is “investigating” a target entity to seize all of its assets. See 50 U.S.C. § 1702; E.O. 13224 § 1. Neither IEEPA nor E.O. 13224 places any substantive limits on
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this power to seize. OFAC has broad power to block any and all assets ofan entity subject to United States jurisdiction at any time, for any amount of time, and on virtually any level of suspicion.
Given the substantial intrusion on KindHearts’ interest, the seizure here was not reasonable under the Fourth Amendment based on the totality of the circumstances.3
B. Remedy for Fourth Amendment Violation Having concluded that the BPI was not otherwise r easonable and thus violated the Fourth Amendment, I am left with the difficult task of constructing an appropriate remedy for that violation. In so doing, I am cognizant that I stand at the intersection of Article II, with its absolute delegation of authority to the President to conduct our for eign affairs and keep us secure from foreign-based dangers, and the judicial authority and duty unde r Article III to enforce constitutional rights and protect those rights from infringement. KindHearts argues that the only available remedy is invalidation of the BPI and return of its funds. KindHearts argues this is so because: 1) the APA requires it; and 2) I lack authority to construct any other remedy. The government argues that, should I conclude – as I have – that the BPI was not otherwise reasonable, I should conduct a post-seizure probable cause review.4
3 I note that, even assuming arguendo that the seizure was reasonable at the time, it became unreasonable given the duration and scope of the seizure and KindHearts’ inability to challenge it. Cf. Terry v. Ohio, 392 U.S. 1, 17-18 (1968) (“A search which i s reasonable at its inception m ay violate the Fourth Amendment by virtue of its intolerable intensity and scope.”).
4 The government alternatively argues that I could apply the traditional Fourth Amendment remedy here – suppression – by ordering exclusion of any evidence obtaine d as a result of the seizure from any criminal proceeding.
In the well established criminal search and seizure context, the typical remedy for a Fourth Amendment violation is suppression at trial of the illegally seized evidence. E.g., U.S. v. Nichols, 512 F.3d 789, 794 (6th Cir. 2008) (noting that suppression is the “traditional remedy” for Fourth
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I note at the outset that I recognize the Fourth Am endment’s scope is more limited in the context of foreign relations and national security than in typical domestic criminal investigations and administrative actions. Other courts have recognized that the Constitution has different limits when it implicates foreign policy or national security. See Regan v. Wald, 468 U.S. 222, 241-42 (1984) (upholding Cuban travel restrictions against a Fifth Amendment challenge and noting that “the Fifth Amendment right to travel, standing alone [was ] insufficient to overcom e the f oreign policy justifications supporting the restriction”); Freedom to Travel Campaign v. Newcomb, 82 F.3d 1431, 1438-40 (9th Cir. 1996) (noting that while freedom to travel internat ionally is a liberty interest recognized by the Fifth Amendment, restrictions on international travel are “usually granted much greater deference” and view ed “through a le ss critical lens” than domestic travel); Capital Cities/ABC, Inc. v. Brady , 740 F. Supp. 1007, 1012-13 (S.D.N.Y. 1990) (stating that First Amendment limitations are weaker in the foreign affairs context than in the domestic context).
The Executive Branch has broad discretion inforeign affairs and national security.See Dep't of Navy v. Egan, 484 U.S. 518, 529-30 (1988) (“The Court alsohas recognized the generally accepted view that foreign policy was the province and responsibility of the Executive. . . . [C]ourts traditionally have been reluctant to intrude upon the authority of the Executive in m ilitary and national security affairs.” (internal citations and quotations om itted)); Chicago & S. Air Lines v. Waterman S.S. Corp., 333 U.S. 103, 111 (1948) (“[T]he very nature of executive decisions as to foreign policy is political, not judicial. . . . They are delicatec,omplex, and involve large elements
Amendment violations). This traditional remedy does not, however, fit thecircumstances of this case. The seizure at
issue here involved freezing all of KindHearts’ funds. Suppressing the use of the funds in potential future criminal proceedings would not provide an adequate remedy to KindHearts.
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of prophecy. . . . They are decisions of a kind for which the Judiciary has neither aptitude, facilities nor responsibility[.]”); U.S. v. Smith, 899 F.2d 564, 569 (6th Cir. 1990) (noting the “broad authority of the Executive Branch to exercise its dsicretion in matters that touch national security and foreign affairs”).
It is the role ofthe judiciary, however, to ensure the protection of individual rightsE. .g., Trop v. Dulles, 356 U.S. 86, 103 (1958) (“The Judiciary has the duty of implementing the constitutional safeguards that protect individual rights. W hen the Government acts to take aw ay [fundamental rights] . . . , the safeguards of the Cons titution should be examined with special diligence.”); accord Brill v. Hedges, 783 F. Supp. 340, 346 (S.D. Ohio 1991) (“[T]he judiciary’s role [is to serve] as a protector of individual rights and freedoms.”).
This is true in even themost dire of circumstances. See Hamdi v. Rumsfeld, 542 U.S. 507, 536 (2004) (plurality opinion) (“We have long since made clear that a state of war is not a blank check for the President when it comes to the rights of the Nation’s citizens.”);see also Home Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 426 (1934) (holding that “even the war power does not rem ove constitutional limitations safeguarding essential liberties”).
This tension between assuring security and protecting liberty is never-ending, and has been present since the founding of our Republic: “Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency.” Blaisdell, supra, 290 U.S. at 425. The Supreme Court, moreover, has stated:
The provisions of the Constitution are not tim e-worn adages or hollow shibboleths. They are vital, living principles that author ize and limit governmental powers in our Nation. They are the rules of government. When the constitutionality of an Act of Congress [or executive action thereunder] is challenged in this Court, we
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must apply those rules. Ifwe do not, the words ofthe Constitution become little more than good advice.
When it appears that an Act of Congress [or executive action] conflicts with one of these provisions, we have no choice but to enforce the paramount commands of the Constitution. We are sworn to do no less. We cannot push back the limits of the Constitution merely to accommodate challenged legislation. W e must apply those limits as the Constitution prescribes them, bearing in mind both the broad scope of legislative discretion and the ultimate responsibility of constitutional adjudication. We do well to approach this task cautiously, asall our predecessors have counseled. But the ordeal of judgment cannot be shirked. Trop, supra, 356 U.S. at 103-04. I “must be careful to balance” the Fourth Amendment “constitutional issues that could arise from deference to the agency’s interpretation against those constitutional issues which may arise if insufficient latitude is given to the executive in the conduct of foreign affairs.”Capital Cities, supra, 740 F. Supp. at 1013. Mindful of the need to attain such balance, I turn to the question of remedy.
1. Post-Hoc Probable Cause Showing Analogizing to exigent circumstances and forfeiture cases, the government argues that a posthoc probable cause determination can cure the Fourth Amendment violation. KindHearts argues such review is inappropriate because: 1) I do not have authority to issue a warrant; 2) a warrant cannot issue after a seizure;3) post-seizure review in the Fourth Amendment context is limited to situations where an exception to the warrant requirement applies; and 4) neither I nor Congress have formulated an appropriate probable cause standard for BPIs. I agree with the governm ent that, under the unique circum stances of this case, I can and should implement post-hoc probable cause review.
a. Authority to Order Post-Hoc Probable Cause Showing KindHearts argues, specifically, that a warrant cannot issue post-seizure, and that I “lack[] authority to issue a warrant under OFAC’s BPI shceme.” [Doc. 112, at 15].In so arguing, KindHearts
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relies on the Sixth Circuit’s decision in U.S. v. Finazzo, 583 F.2d 837, 844 (6th Cir. 1978), vacated on other grounds, 441 U.S. 929 (1979).
Courts have broad equitable power to fa shion appropriate rem edies for adjudicated constitutional and statutory violations. See, e.g., Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 15-16 (1971) (“Once a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, forbreadth and flexibility are inherent in equitable remedies.”); Carter-Jones Lumber Co. v. Dixie Distrib. Co,. 166 F.3d 840, 846 (6th Cir. 1999) (“[A] court of equity has traditionally had the power to fashion any rem edy deemed necessary and appropriate to do j ustice in a particular case.”) . In determ ining “how far this rem edial power extends[,] it is important to remember that judicial powers may be exercised only on the basis of a constitutional violation” and “the nature of theviolation determines the scope of the remedy.” Swann, supra, 402 U.S. at 15.
KindHearts argues that I do not have authority to remedy the Fourth Amendment violation because I have no inherent aut hority to issue a warrant. In Finazzo, the Sixth Circuit addressed whether a wiretapping statute authorized FBI agents to “secret[ly] ent[er]” an office to install eavesdropping devices. 583 F.2d at 8394- 2. After holding that the statuet did not authorize the action, the court went on to hold: “[F]edearl judicial officers do not possess aninherent power to issue search warrants or inherent power in the absence of staut te to authorize law enforcement officers to engage in break-ins in the execution of search warrants.” Id. at 844.5
5 The Supreme Court vacated Finazzo in light of the holding inDalia v. U.S., 441 U.S. 238, 252-54 (1979), that Congress intended to authorize ocvert entry to install the eavesdropping devices. This was so, because in part, Congress’ purpose inenacting the statute would be “largely thwarted” if the statute were read to permit electronic bugging, but not the means to install the bugs.Id. at 252.
The government points out that the Seventh Circuitexpressly disagreed withFinazzo in U.S. 12

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As discussed below, in ordering a probable cause showing, I am not issuing a “retroactive warrant” as KindHearts contends. Rather, I am ordering a probable cause showing as a remedy for the warrantless seizure and prolonged and continuing retention of KindHearts’ assets.
I thus find that it is within the scope ofmy power to remedy constitutional violations to order this post-hoc probable cause showing. I recognize thathis is an unusual and atypical remedy, but this is an unusual and atypical situation.
b. Post-Seizure Review I find the analogy the governm ent draws to f orfeiture law instructive. Civil f orfeiture implicates both the Fourth and Fifth Amendments. See U.S. v. James Daniel Good Real Prop(.James Daniel Good), 510 U.S. 43, 48-49 (1993) (holding that bohtFourth Amendment warrant and probable cause and Fifth Amendment due process requirements apply to civil forfeiture proceedings);see also One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 696, 700 (1965) (hodling that exclusionary rule applies to civil forfeiture proceedings). Courts have held that in forfeiture pro ceedings due process requires the governm ent to provide notice and a hearing prior to seizing real property absent exigent circum stances. James Daniel Good, supra, 510 U.S. at 59.
v. Torres, 751 F.2d 875, 880 (7th Cir. 1985). The court in Torres rejected the plaintiff’s argument that because neither Title III nor Rule 41 explicitlyauthorize closed circuit television surveillance, no court has the authority to issue a warrant to conduct such surveillance. The court held: “[T]he power to issue a search warrant was historically, and is still today, an inherent (by which we mean simply a nonstatutory, or common law) power of a court of general jurisdiction.” Id. at 878.
Other courts have likewise held that a court has inherent authority to issue a warrant. See, e.g., U.S. v. Falls, 34 F.3d 674, 678 (8th Cir. 1994); U.S. v. Villegas, 899 F.2d 1324, 1334 (2d Cir. 1990).
Finazzo’s holding that courts lack inherent power to issue warrants, however, is still good law in the Sixth Circuit. I am not, however, issuing a warrant in this case, so Finazzo is not controlling.
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If, however, the government fails to provide such pre-deprivation process, it is not required to release the forfeited property if, following the seizure, it can show probable cause that the seized assets are subject to forfeiture.See U.S. v. Real Prop. Located at 1184 Drycreek Roa,d174 F.3d 720, 727 (6th Cir. 1999);accord U.S. v. Bowman, 341 F.3d 1228, 1235-36 (11th Cri. 2003) (“It would not be appropriate to return real property to the property owner if the Government can establish at the post-seizure adversarial hearing (as it has in this case)that there is probable cause to believe that the property is connected to criminal activity. The effect of returning the property to the property owner under these circumstances would be to allow the ocntinuation of illegal activity, an outcome Congress surely did not intend.”).
The Sixth Circuit rejected a forfeiture plain tiff’s argument that the due process violation required the forfeiture be set aside andthe civil forfeiture case be dismissed. Drycreek Road, supra, 174 F.3d at 727-28. Rather, the court, agreeing with th e majority of circuits, held that whe re “the property is found to be subject toforfeiture after the process due has been afforded, the violation does not immunize the propert y from forfeiture.” Id. at 728.6 If, therefore, the governm ent can show probable cause to believe the property is subject to forfeiture, it can retain the property.
While KindHearts is correct that these cases address rem edies for Fifth Amendment – not Fourth Amendment – violations, and that these cases involve pr ior warrants, the parallels to the seizure here are apparent. As with civil forfeiture, the acti on challenged here is a seizure of KindHearts’ assets authorized by a particular statut e. Both are civil in na ture, but both serve law-
6 The governm ent is, however, responsible for rents and profits of which a claim ant is deprived during the period of illegal seizure if there are no exigent circumstances. Drycreek Road, supra, 174 F.3d at 728.
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enforcement-like purposes, see James Daniel Good, supra, 510 U.S. at 48;KindHearts I, supra, 647 F. Supp. 2d at 881, and implicate intertwined Fourth and Fifth Amendment concerns.
Although the forfeiture analogy is im perfect, it does dem onstrate the potential inappropriateness of returning seized assets when the government can show post-seizure probable cause for the seizure. I thus find that ordering return of KindHearts’ assets would be sim ilarly inappropriate if the government can show probable cause. This is especially true in this situation, where whatever I do intrudes – or rsiks intruding – into the zone ofauthority secured to the Executive under Article II.
c. Probable Cause Standard As the parties point out, my August 18 Order did not delineate the level of probable cause that must be shown in the context of a BPI carried out under IEEPA. In the criminal context, the Supreme Court has stated that “[t]he probable cause standard is incapable of precise definition or quantification,” but has described t he standard as “a reasonable ground for belief of guilt and that the belief of guilt must be particularized with respect to the person to be searched or seized.” Maryland v. Pringle, 540 U.S. 266, 371 (2003) (internal quotations and citations omitted). It is a “fluid concept[] that take[s] [its] substantive content from the particular context[] in which the standard[] [is] being assessed.” Ornelas v. U.S., 517 U.S. 690, 696 (1996). In the adm inistrative search context, th e Supreme Court has explained t hat “where considerations of health and safety are involved, thefacts that would justify an inference of ‘probable cause’ to make an inspection are clearly different from those that would justify suc h an inference where a criminal investigation has been undertaken.”Camara v. Municipal Court, 387 U.S. 523, 538 (1967).
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The court in Camara examined the level of probable cause necessary to issue a warrant for building inspections by municipal health and safety officials. It concluded that ther e is “probable cause” to issue a warrant “if reasonable legislative or administrative standards for conducting an area inspection are satisfied with respect to a particular dwelling.” Id.
“The test of ‘probable cause’ required by the Fourth Amendment can take into account the nature of the search that is being sought.” Id. (citing Frank v. Maryland, 359 U.S. 360, 383 (1959) (Douglas, J., dissenting)).
In U.S. District Court, supra, 407 U.S. at 307-08, the Supreme Court held that Title III of the Omnibus Crime Control and Safe Streets Act, 18 U.S.C. §§ 2510-20, did not grant the Pr esident authority to conduct warrantless electronic surveillance in matters affecting domestic security. The Court then addressed what restrictions the Fourth Amendment places on the President’s authority.
Although the Court l eft determination of the exact procedures up to Congress, 7 it acknowledged that different standards for issuing warrants, and, as well, the type of suspicion constituting probable cause, may exist for the conventional criminal search warrant, on the one hand, and secret surveillance undertaken to protect against foreign dangers, on the other:
We recognize that domestic security surveillance may involve different policy and practical considerations from the surveillance of ‘ordinary crime.’ . . . Often, too, the emphasis of domestic intelligence gathering is on the prevention of unlawful activity or the enhancem ent of the Gove rnment’s preparedness for som e possible future crisis or em ergency. Thus, the f ocus of domestic surveillance may be less precise than that directed against more conventional types of crime.
7 Like the Supreme Court in U.S. District Court, supra, 407 U.S. at 320, I leave to Congress “the responsibility for considering and adopting the appropriate structure” for pre-blocking warrant and probable cause standards that would comply with the Fourth Amendment. KindHearts I, supra, 647 F. Supp. 2d at 885. Here, however,I am not delineating pre-seizure requirements; I am, rather, constructing a remedy for the constitutional violation in this case.
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Given those potential distinctions betweenTitle III criminal surveillances and those involving the dom estic security, Congress may wish to consider protective standards for the latter which difer from those already prescribed for specified crimes in Title III. Different standards may be compatible with the Fourth Amendment if they are reasonable both in relation to the legitimate need of Government for intelligence information and the protected rights of ourcitizens. For the warrant application may vary according to the governmental interest to be enforced and the nature of citizen rights deserving protection.
Id. at 332-33.
Under the Foreign Intelligence Surveillance Act (FISA), passed by Congress in response to
the U.S. District Court decision, a federal officer must have “probable cause to believe that . . .
the target of the electronic surveillance is a f oreign power or agent of a foreign power,” and that
“each of the facilities or places at which the surveillance is directed is being used, or is about to be
used, by a foreign power or agent of a foreignpower.” 50 U.S.C. §§ 1804(a)(7)(A)-(B). Courts have
upheld this m odified probable cause standard under the Fourth Am endment. See, e.g., U.S. v.
Johnson, 952 F.2d 565, 573 (1st Cir. 1991);U.S. v. Pelton, 835 F.2d 1067, 1075 (4th Cir. 1987);U.S.
v. Badia, 827 F.2d 1458, 1464 (11th Cir. 1987).
As I held in my August 18 Order:
Here, as well, in view of the effect of implementation of Fourth Amendment protections and processes on the President’s Article II powers, some reformulation of the probable cause requirem ent may be appropriate. The sam e may be true with regard to variance fromthe conventional process for obtaining judicial warrants under the Fourth Amendment and Rule 41 of the Federal Rules of Civil Procedure.
KindHearts I, supra, 647 F. Supp. 2d at 884.
As the Suprem e Court recognized i n Camara and U.S. District Court , probable cause
standards, therefore, may vary depending on the context. This is not a conventional crim inal case,
and thus the typicalFourth Amendment probable cause standard is inapplicable. I therefore find that,
given the unique circumstances of this case, the content of the probable cause showing differs from
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the formulation applicable to a search warrant sought in conjunction with a criminal investigation.
See Camara, supra, 387 U.S. at 538; U.S. District Court, supra, 407 U.S. at 332-33.
I conclude that the government need not show probable cause to believe that evidence of a
crime will be found. The government must instead show that, at the time of the original seizure, it
had probable cause – that is, a reasonable ground – to believe that KindHearts, specific ally, was
subject to designation under E.O. 13224 § 1.
I further find that if the government can show probable cause for the original seizure, even
at this very late date, the pos t-hoc judicial finding of such cause rem edies the Fourth Amendment violation.8
While it would have been easier for all involved if OFAC had obtained independent judicial
review and a warrant prior to seizing KindHearts’ assets, or if it had provided KindHearts with a
prompt and m eaningful way to challenge the seizure, I find that this post-hoc probable cause
determination, though not typical, provides a necessary check on otherwise unrestrained executive
8 The October, 2001, Patriot Act amended IEEPA. The amendment permitted the Treasury Secretary to impose on an entity all the blocki ng effects of a designation, including freezing an organization’s assets indefinitely, without designating the organization as an SGDT. 50 U.S.C. § 1702(a)(1)(B). The amendment also provided, inter alia:
(c) Classified information.--In any judicial review of a determination made under this section, if the determination was based on classified information (as defined in section 1(a) of the Classified Information Procedures Act) such information may be submitted to the reviewing court ex parte and in camera. This subsection does not confer or imply any right to judicial review.
Id. § 1702(c). It is thus appropriate – should the government request my review of classified information
in making its probable cause showing – for me to hold this probable cause hearing ex parte and in camera.
For now I do not consider, m uch less try to spell out, what further rem edy would be appropriate and necessary if the government fails to show probable cause as provided herein.
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discretion. This is particularly so in these specifci circumstances, where that discretion has been used in a way that violates the Constitution.
2. APA KindHearts argues that the 5 U.S.C. § 706(2)(B)requires that I invalidate the BPI. The APA states that a reviewing court “shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be . . . contrary to a constitutional right.” Id. The APA also instructs reviewing courts to take “due account . . . of the rule of prejudicial error.” Id. § 706.9 Thus, harmless errors in agency action need not be set aside.Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 659 (2007). If the government shows probable cause for the seizure, even at this very late date, then the Fourth Amendment violation will be remedied and thus harmless, and the government can retain the plaintiff’s assets pending completion of the administrative SDGT process.
II. Fifth Amendment Violations A. Vagueness Violation
In my August 18 Order, I held: “In this case, OFAC failed to follow the Fourth Amendment in imposing the [BPI]. Thus, as applied to Kni dHearts, OFAC’s authority under the IEEPA and E.O. 13224 was unconstitutionally vague.” KindHearts I, supra, 647 F. Supp. 2d at 893 n.15.
Because I above order the government to show probable cause, I withhold judgment on this violation’s remedy until that showing.
9 KindHearts also contends that even if I invalidate the BPI, the government would be able to adequately protect its interests through other sattutes, including the Civil Asset Forfeiture Reform Act, 18 U.S.C. §§ 981-87, or those prohibiting m aterial support of t errorism, e.g., 18 U.S.C. §§ 2339A-B. Because I find that the constitutional violation can be remedied adequately as discussed above, I need not reach this argument.
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B. Inadequate Notice & Meaningful Opportunity to Respond Violations In my August 18 Order, I held that the governm ent’s “blocking order failed to provide [KindHearts with] the two fundam ental requirements of due process: m eaningful notice and [an] opportunity to be heard.” KindHearts I, supra, 647 F. Supp. 2d at 897 (citing Mathews v. Eldridge, 424 U.S. 319, 333 (1976)). I do not here revisit that determination, but I must decide what remedy flows from these violations of the Fifth Amendment’s Due Process Clause. 1. Structural or Harmless Error Analysis KindHearts argues that this violation is a “structural error,” the sort of error which is “so fundamental that [it] def[ies] harm less-error analysis and warrant[s] a utomatic reversal” of the unconstitutional government action. [Doc. 107, at 26]. The government claims that I should examine the due process violations here under harmless error analysis, because “[d]ue process errors in administrative proceedings are routinely subject to harmless error analysis.” [Doc. 110, at 35]. Structural errors typically arise in the context ofcriminal trials. A structural error is “a deefct affecting the framework within which the trial pro ceeds, rather than sim ply an error in the trial process itself.” Neder v. U.S., 527 U.S. 1, 8 (1999) (internal citation omitted). Because they “deprive defendants of basic protections without which a criminal trial cannot reliably serve its function as a vehicle for determination of guilt or innocence,” structural errors per se require setting aside the entire proceeding. Id. at 8-9. By contrast, trial-type errors are subject to harmless error analysis, because they “may be quantitatively assessed in the context of other evidence presented . . . todetermine” the effect of
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the error. Arizona v. Fulminante, 499 U.S. 279, 307-08 (1991). Judicial review of agency action under the APA, moreover, contemplates a harmless error analysis. 5 U.S.C. § 706 (“[A] court shall review the whole record . . . and due accounst hall be taken of the rule of prejudicial error.”);see also Shinseki v. Sanders, U.S. , 129 S. Ct. 1696, 1704 (2009) (noting that “the APA’s reference to ‘prejudicial error’ is intended to sum up in succinct fashion the ‘harmless error’ rule” (internal quotation and citation omitted)).
An analogy may assist to clarify the distinction between structural errors and those amenable to harmless error analysis. If the proceedings before OFAC were a house, and termites represented OFAC’s constitutional violations, the question ofwhether the violations rise to the “structural” level is whether the termites’ damage to the structural integrity of the house is so significant as to require demolishing and completely rebuilding the house, or whether repairs can return the house to a safe and stable condition. In other words, I m ust determine whether what was done wa s irreparably destructive, or simply damaging, even seriously damaging.
Here, repair is possible. OFAC’s failure to provide KindHearts with constitutionally adequtae notice or a meaningful opportunity to respond was not so serious as to “affect[] the fram ework in which” the BPI proceeds.Neder, supra, 527 U.S. at 8. This is so largeyl because I have stayed further designation proceedings until I remedy these constitutional violations.See KindHearts II, supra, 676 F. Supp. 2d at 656-57. Were KindHearts required to continue to navigate the complex designation process with constitutionally inadequate notice, such constitutional error might require a different conclusion. That is, though, not so here. The inadequate notice has not yet eaten away at the structural underpinnings of OFAC’s designation process vis-a-vis KindHearts.
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I therefore apply harm less error analys is to OFAC’s notice and opportunity-to-respond violations.
2. Harmless Error Analysis I must now determine whether those violations are harmless.
a. Burden of Proof KindHearts argues that harm less error analysis requires the governm ent to show its constitutional violations were “harmless beyond a reasonable doubt.”Tenn. Secondary Sch. Athletic Ass’n v. Brentwood Acad., 551 U.S. 291, 303 (2007). The government disagrees: “Plaintiff cannot show that the error at issue would have altered t he outcome of the decision . . . [and] m ischaracterizes the harmless error standard when it quotes language from Brentwood Academy[.] . . . [T]he subsequentShinseki v. Sanders opinion [explains that] the government [has] to prove due process errors harmless only in criminal cases.” [Doc. 110, at 27]. In Brentwood Academy, the Supreme Court held that the government has the burden to show “beyond a reasonable doubt” that its constitutional errors did not prejudice a private individual’s administrative proceedings. 551 U.S. at 303-04. In Shinseki, the Court held that an applicant for disability benefits has the burden to show – by a preponderance of the evidence – thatstatutory notice errors are not harmless. 129 S. Ct. at 170406. The Court rested its position in part on the betteprosition of the applicant to explain his disability, id. at 1705, and then explained further:
Lower court cases make clear that courts have correlated review of ordinary administrative proceedings to appel late review of civil cases in this respect. Consequently, the burden of showing that an error is harmful normally falls upon the party attacking the agency’s determination. . . . The party seeking to reverse the result of a civil proceeding will likely be in a position at least as good as, and often better than, the opposing party to explain he has been hurt by an error.
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Id. at 1706.
In rejecting placing the burden on the agency, the Court explained:
[W]e have placed such a burden on [the agency] only when the m atter underlying review was criminal. . . . In criminal cases the Government seeks to deprive an individual of his liberty, thereby providing a good reason to require the Government to explain why an error should not upset the trial court’s determination. And the fact that the Government must prove its case beyond a re asonable doubt justifies a rule that makes it more difficult for the reviewing court to find that an error did not affect the outcome of a case. . . . But in the ordinary civil case that is not so.
Id. (emphasis added).
It is important to note, initially, thatShinseki did not purport to overrule (nor even mentioned)
Brentwood Academy, notwithstanding the closeness in time and subject matter of the two opinions.
While the language of the two decisions, m oreover, may seem difficult to reconcile, the distinct
contexts – Brentwood Academy involved constitutional violations, and Shinseki involved statutory
ones – distinguish the cases.
Because the case before me involves constitutional violations, I find theBrentwood Academy
burden of proof applicable.10 See also Chapman v. California, 386 U.S. 18, 24 (1967) (“Certainly
error, constitutional error, in illegally admitting highly prejudicial evidence or comments, casts on
10 Even were Shinseki to apply generally to constitutional violations also, its language and logic do not apply here. This case does not resemble an “ordinary civil case”; it instead is more akin to a crim inal investigation and prosecution. This is so because it involves suspicion of illegal activity, Fourth Amendment search and seizure, and an entity at risk olfosing its very existence.Cf. KindHearts I, supra, 647 F. Supp. 2d at 881 (detailing how the designation process resembles law enforcement, not administrative, action). I also note that KindHearts may be the subject of an actual criminal prosecution, as evidenced by the government’s execution of search warrants at its offices and the home of its principal officer.
The government, moreover, is better positioned thanKindHearts to explain the nature of the error, because it knows the factual and legal f oundations of its actions. Requiring KindHeart s to show the constitutionally inadequate notice was not harm less would be requiring KindHearts to “disprove a negative.” KindHearts II, supra, 676 F. Supp. 2d at 653. I decline to do so, andShinseki does not compel otherwise.
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someone other than the person prejudiced by it a burden to show that it was harmless. It is for that reason that the original common-law harmless-error rule put the burden on the beneficiary of the error either to prove that there was no injury or to sufrfea reversal of his erroneously obtained judgment.”); Al Haramain, supra, 2009 WL 3756363, *7 (requiring the governm ent to show, in the context of designation proceedings, that any constitutional errors were harmless beyond a reasonable doubt).
The government therefore must persuade me that its Fifth Amendment violations are harmless beyond a reasonable doubt.
b. OFAC’s Due Process Violations Are Not Harmless The government argues: 1) “[t]he most logical way to conduct harmless error analysis is to allow the current proceeding [presumably designation] to progress to a final conclusion” [Doc. 110, at 29]; 2) “[p]laintiff has now received all notice to which it is due and has been invited to respond to that notice” [ Id.]; and 3) “[n]o am ount of additional notice would have changed the[] facts” justifying the BPI [Doc. 113, at 35]. KindHearts responds: 1) permitting OFAC “to proceed with designation before it has cured the [due process] defects in its BPI process would be to deny KindHearts the constitutional BPI process to which it is entitled[,]” and “would riskirreparable injury and undermine the Court’s ability to provide a m eaningful remedy for the BPI viol ations” [Doc. 112, at 29, 33]; 2) I already held OFAC’s notice to be constitutionally inadequate so far; and 3) “had OFAC provided KindHearts adequate notice and a meaningful opportunity to defend itself, KindHearts would have responded to the actual bases for the freeze, not to vague and general assertions,” [Doc. 107, at 29] and “OFAC has made no . . . showing” to the contrary [Doc. 112, at 33].
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As to the government’s first argument, the government concedes that the BPI constitutes final agency action. [Doc. 113, at 26 (“To clarify, the BPI and any decision resulting fromthe designation proceeding are two separate and final agency actions.”)]. Each final agency action m erits its own review, 5 U.S.C. § 706, includi ng determination of what rem edy should issue for OFAC’s constitutional violations; I held as much in my October 26 Order, and I decline to short-circuit that process now. See KindHearts II, supra, 676 F. Supp. 2d at 651.
As to the governm ent’s second argum ent, the governm ent continues to em phasize that “KindHearts possesses ample notice of the allegations supporting a BPI.” [Doc. 110, at 30]1.1 I have, however, already stated that these item s provide KindHearts with a “scant y” and “largely uninformative” explanation for the BPI. KindHearts I, supra, 647 F. Supp. 2d at 905, 907. This led me to conclude that “KindHearts remains largely uninformed about the basis for the government’s actions,” id. at 904, and that OFAC therefore “violatedKindHearts’ fundamental right to be told on what basis and for what reasons the government deprived it of all access to its assets and shut down
11 The government lists the items it claims provided KindHearts with notice: (1) the notice of the BPI and the simultaneously-issued public notice summarizing the evidentiary basis therefore; (2) the unclassified, non-privileged adm inistrative records for both the BPI and the provisional designation de termination, including unclassified, nonprivileged versions of thememoranda in support of the BPI and the provisional determination; (3) all ma terials declassified in response to Plaintiff’s request; and (4) all additional unclassified, nonprivileged, evidence that the agency is currently considering. . . . Additional notice, not yet acknowledged by t he Court, but relevant to final decision is that KindHearts is in possession of hundreds of pages of briefing and several hours oof ral argument in which undersigned counsel described in detail the unclassified, non-privileged evidence supporting designation and explained the reasoning supporting both the BPI and the ongoing process. [Doc. 110, at 30].
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its operations,” id. at 906. I thus found the notic e OFAC provided KindHearts constitutionally inadequate,12 and I decline to revisit that holding now.13
As to the government’s third argument, the government fails to show that KindHearts could
submit nothing that would adequately address the agency’s concerns. Harmless errors are those
“small errors or defects that have little, if any, likelihood of having changed the result of the trial.”
Chapman, supra, 386 U.S. at 22.
Here, KindHearts still does not know what f acts to rebut, or what other grounds the
government has f or its action. As KindHearts points out, “OFAC ha s yet to af ford KindHearts
constitutionally adequate notice of the charges against it that would allow KindHearts to know what
to look for” in its documents. [Doc. 112, at 39 n.16].
Demonstrating that OFAC’s error is harmless thus requires the government to prove beyond
a reasonable doubt that KindHearts could marshal no evidence to rebut still unknown factual and
12 As regards the “hundreds of pages of brie fing and several hours of oral argum ent” the government points to, [Doc. 110, at 30], oral summarization and repetition of constitutionally inadequate notice does not render it constitutionally adequate.
13 This conclusion – that the notice providedKindHearts remains inadequate – distinguishes this case from Al Haramain, supra, 2009 WL 3756363, to which the government points in arguing its due process violations were harmless.
In Al Haramain, the district court found that “theredesignation notice” included “a lengthy explanation” of the grounds for the governm ent’s designation decision, and that “[s]uch a comprehensive notice would have provided AHIF-Oregon [the plaintiff] with the facts and law and would have given it the opportunity to respond t o OFAC’s concerns in a knowing and intelligent way.” Id., *7. The reason for the district court’s determ ination that the due process violation was harmless, therefore, rested upon thedelay in providing constitutionally acceptable notice, not in the continued absence of such notice.
By contrast, here I found OFAC’s notice to KindHearts failed constitutionallyboth in delay and in substance. The court in Al Haramain’s determination on this issue, therefore, is inapposite to the situation here.
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legal reasons for the government’s action. The government has not met its burden, instead focusing its argument on the adequacy of the “notice” provided thus far.
The government’s failure to provide KindHearts with adequate notice and a m eaningful opportunity to respond was, therefore, not harmless.14
3. Remedy Having found OFAC’s error not harmless, I must now determine what remedy is appropriate. KindHearts states: “Putting aside the Court’s other constitutional holdings, KindHearts agrees with OFAC that the typical remedy for an unconstitutional agency process includes ‘remand . . . with instructions as to what additional process is due.’” [Doc. 112, at 42 (citing Doc. 110, at 36-37)] . KindHearts then continues, however: “OFAC resists the necessary accompaniment to remand: setting aside the extant, unconstitutional order.” [Id. at 43]. The government responds that solely remand is appropriate.15 The Sixth Circuit has held that a court may remedy constitutional notice and hearing violations through remand for appropriate proceedings. Women’s Med. Prof’l Corp. v. Baird, 438 F.3d 595, 616 (6th Cir. 2006). The District of Colum bia Circuit agreed in National Council of Resistance of Iran v. Department of State, 251 F.3d 192, 209 (D.C. Cir. 2001):
We recognize that a strict and immediate application of the principles of law which we have set forth herein could be taken to require a revocation of the

14 In their remedy briefs, the parties attempt to argue, to the extent possible, about the merits of OFAC’s decision. Until KindHearts receives constitutionally adequate notice and a meaningful opportunity to respond, this exercise is futile given the error’s non-harmless nature. I thus refrain, at this point, from considering the merits of the OFAC’s actions.

15 Because I separately address the remedies for OFAC’s other constitutional violations, I

here consider solely OFAC’s failure to provide KindHearts with notice and a m

eaningful

opportunity to respond.

27

Case: 3:08-cv-02400-JGC Doc #: 115 Filed: 05/10/10 28 of 35. PageID #: 3018
designations before us. However, we alsorecognize the realities of the foreign policy and national security concerns asserted by the Secretary in support of those designations. . . . W e therefore do not order the vacation [sic] of the existing designations, but rather remand the questions to the Secretary with instructions that the petitioners be afforded [due process]. Cf. Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985) (“[I]f the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency[.]”). This is especially appropriate because, “since [I am ] not the [agency] decisionm aker[], it would be inappropr iate for [m e] to presum e what decision m ight be reached” were KindHearts afforded adequate notice and an opportunity to respond. Baird, supra, 438 F.3d at 616. I thus agree with the government – and the reasoning of the District of Columbia Circuit in National Council of Resistance of Iran – that, notwithstanding the APA’s dictate that we set aside unconstitutional agency action, the proper remedy for a notice violation in the context of designation proceedings is to remand to OFAC, without vacatur of the BPI, with instructions as to what additional notice is required. This leaves me with the difficult question of precisely what the government must disclose to KindHearts to provide KindHearts with adequate notice. On this issue, the government notes:
The Court has thus far expressed no opni ion on what specific process must be provided beyond that which has to date been provided. OFAC has at this time given a complete statement of the unclassified, non-privileged reasons for the blocking and has provided KindHearts with all of the unclassified, non-privileged evidence being considered by the agency. There is possibly nothing else that can be done[.] [Doc. 110, at 38 n.18].
28

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KindHearts responds: “If the only evidence that would provide KindHearts adequate notice is classified, OFAC is constitutionally obligated to devise a reasonable alternative that af fords KindHearts a meaningful opportunity to respond.” [Doc. 112, at 42].
I appreciate the government’s interest in national security and foreign policy implicated here. See Section I.B, supra (citing Egan, supra, 484 U.S. at 529-30; Chicago & S. Air Lines, supra, 333 U.S. at 111; Smith, supra, 899 F.2d at 569). As also noted above,however, the judiciary’s role is to ensure the protection of individual rights.Id. (citing Hamdi, supra, 542 U.S. at 536;Trop, supra, 356 U.S. at 103-04; Blaisdell, supra, 290 U.S. at 426; Brill, supra, 783 F. Supp. at 346).
Courts have found that their duty to protectindividual rights extends to requiring disclosure of classified information to give a party an ability to respond to allegations m ade against it.16 See American-Arab Anti-Discrimination Comm. v. Reno(ADC), 70 F.3d 1045, 1070-71 (9th Cir. 1995); see also Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 170 (1951) (Frankfurter, J., concurring) (“The heart of the matter is that democracy implies respect for the elementary rights of men, however suspect or unworthy; a democratic government must therefore practice fairness; and fairness can rarely be obtained by secret, one-sided determ ination of facts decisive of rights.”) ; Bismullah v. Gates , 501 F.3d 178, 187 (D.C. Cir. 2007) (providing security-cleared detainees’ counsel access to classified docum ents), vacated, U.S. , 128 S. Ct. 2960 (2008) (m em.),
16 It bears noting that several related federal sattutes contemplate disclosure – or alternatives to the use – of classified evidence. For example, FISA allows a judge to “disclose to the aggrieved person, under appropriate security procedures and protective orders, portions of the application, order, or other [classified] materials relating to the surveillance[.]” 50 U.S.C. § 1806(f); see also 8 U.S.C. § 1534(e)(3) (contemplating, in deportation proceedings, either provision of an adequate unclassified summary of the classifi ed information or, if that is not possible, disclosure of the necessary classified information to a “special attorney” who may examine the information without disclosure to his or her client).
29

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reinstated, Order No. 06-1197 (D.C. Cir. 2008), dismissed for lack of jurisdiction, 551 F.3d 1068 (D.C. Cir. 2009).
The Fourth Circuit likewise observed in In re Washington Post Co,. 807 F.2d 383, 391-92 (4th Cir. 1986):
[T]roubled as we are by the risk that disclosure of c lassified information could endanger the lives of both Am ericans and their foreign inform ants, . . . blind acceptance by the courts of the governm ent’s insistence on the need for secrecy, without notice to others, without argument, and without a statement of reasons, would impermissibly compromise the independence of the judiciary a nd open the door to possible abuse. See also Kiareldeen v. Reno , 71 F. Supp. 2d 402, 414, 418 (D.N.J . 1999) (holding that the government’s use of classified evidence in de tention-pending-deportation proceedings violated detainee’s due process rights and, inter alia, justified his release). The rationale for requiring such disclosure is that, otherwise, an individual or entity accused of terrorist connections, “like Joseph K. inThe Trial[,] . . . [can prevail only if he can] prove that he is not a terrorist regardless of what m ight be im plied by the Governm ent’s confidential information. It is difficult to imagine how even someone innocent of all wrongdoing can meet such a burden.” Rafeedie v. INS, 880 F.2d 506, 516 (D.C. Cir. 1989). In ADC, the Ninth Circuit faced this issue in the context of immigration: aliens challenged the use of classified information in adjudicating their applications for legalization. The court held that the government’s use of classified information violated an individual’s right to due process. 70 F.3d at 1071. In so holding, the court noted that the governm ent’s reliance on classif ied evidence undermined the adversarial system and created an enormous risk of error. Id. at 1069-70. The court further explained:
30

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Only the m ost extraordinary circ umstances could support one-sided process. W e cannot in good conscience find that the President’s broad generalization regarding a distant foreign policy concern and a relatednational security threat suffices to support a process that is inherently unfair because of the enorm ous risk of error and the substantial personal interests involved.
Id. at 1070.
Drawing on those cases, I propose, subject to giving the parties an opportunity to comment
and be heard, that:
1. I convene, under 8 U.S.C. § 1189(b)(2), an ex parte, in camera meeting with the government to determine what classified evidence will give KindHearts adequate notice,17 and whether that evidence is capable of further declassification or adequate summarization;
2. If so, the government will expeditiously declassify and/or summarize whatever classified information I find will give KindHearts constitutionally adequate notice;
3. If declassification or summarization of classified information is insufficient or impossible, then KindHearts’ counsel will obtain an adequate security clearance to view the necessary documents, and wil l then view these docum ents in camera, under protective order, and without disclosing the contents to KindHearts; and
4. The government will then provide KindHearts’ counsel with an opportunity to respond to these documents (through a closed, classified hearing if KindHearts’ counsel views classified information).18
III. APA Violation: Attorney Fee Policy
In my August 18 Order, I held that OFAC’s application of its attorney fee policy (policy) to
KindHearts, and thus the lim ited extent to which KindHea rts’ blocked funds are available to it to
17 I here specify that adequate notice includes, inter alia, disclosure to KindHearts of each legal basis for the BPI. W ere I to hold otherwise, my holding would be ineffectual, because no matter what evidence KindHearts adduced to rebutthe disclosed bases for the BPI, the government could point to the other, unknown, bases in refusing to release KindHearts’ funds.
18 I find the subs equent notice as ordered here, once provided, renders harm less OFAC’s violation regarding the promptness of the notice provided KindHear ts, and no separate or other remedy is needed or appropriate. This is so because I have stayed designation proceedings pending adjudication of these constitutional violations.See KindHearts II, supra, 676 F. Supp. 2d at 656-57.
31

Case: 3:08-cv-02400-JGC Doc #: 115 Filed: 05/10/10 32 of 35. PageID #: 3022
compensate its counsel, was arbitraryand capricious, and violated the APA.KindHearts I, supra, 647 F. Supp. 2d at 916-20. I turn now to the remedy for this violation.
KindHearts asks that I “remand to OFAC and order it to license payment from blocked funds of all reasonably incurred legal fees in connec tion with KindHearts’ adm inistrative and judicial challenges to OFAC’s BPI and threatened designation.” [Doc. 107, at 31]. The government argues: 1) it reasonably applied the policy to KindHearts’ attorneys19; and 2) ifI determine that its application of the policy to KindHearts was arbitrary and capricious, the appropriate rem edy is to remand to OFAC for additional decision-making.
For the reasons that follow, I remand to OFAC for decision-making consistent with this and my August 18 Order.
Under the APA, I shall: 1) “compel agency action unlawf ully withheld or unreasonably delayed”; and 2) “hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary [or] capricious.” 5 U.S.C. §§ 706(1)-(2)(A).
Generally, where a court finds an agency’s action arbitrary or capricious, it should rem and to the agency rather than conduct a de novo review. Kroger Co. v. Reg’l Airport Auth. of Louisville & Jefferson County, 286 F.3d 382, 387 (6th Cir. 2002) (citing Fla. Power & Light Co., supra, 470 U.S. at 744).
“‘[D]e novo review is appropriate only where there are inadequate factfinding procedures in an adjudicatory proceeding, or where judicial proceedings are brought to enf orce certain
19 The government reasserts its merits arguments regarding the application of the policy to KindHearts. Because I held in m y August 18 Orde r that OFAC’s actions were arbitrary and capricious, I decline to further address these arguments here.
32

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administrative actions.’” Id. (citing Camp v. Pitts , 411 U.S.138, 142 (1973)). A court need not
remand to an agency when:
(1) although the agency failed to abide by the proper procedures of the APA, it arrived at its conclusion in another m anner which was valid under the APA, NLRB v. Wyman-Gordon Co., 394 U.S. 759 [] (1969); or (2) even if the agency did not abide by the proper regula tions, the agency took corrective action, m aking remand meaningless, A.L. Pharma, Inc. v. Shalala, 62 F.3d 1484 (D.C. Cir. 1995) (holding that remand was meaningless on one issue, but still remanding the case to the agency on another issue); or (3) plaintiffs conceded the issue to be decided on remand, Amer. Train Dispatchers Ass’n v. ICC, 26 F.3d 1157 (D.C. Cir. 1994); or (4) although the agency stated erroneous legal reasons forits conclusion, the agency’s conclusion was “the only possible legal result,” as dictated by statute a nd/or Supreme Court precedent, Motion Picture Ass’n of America v. Oman, 969 F.2d 1154, 1158 (D.C. Cir. 1992).
Nat’l Air Traffic Controllers Ass’n v. Sec’y of Dep’t. of Transp., 997 F. Supp. 874, 884 (N.D. Ohio
1998).
None of these exceptions are present here.
I do not intend to repeat my earlier opinion in its entirety here. For clarity, I reiterate the basic
findings of my August 18 Order: 1) OFAC has not provided a sufficient statement of reasons for
authorizing less than the full amount of attorneys’ fees requested; 2) OFAC has not addressed the
effect of certain special circumstances, such as the complexity of issues and its own unresponsiveness
on the generation of attorneys’ fees; and 3) there is a disconnect between the purposes underlying the
policy, as described by OFAC, and OFAC’s denial of access to blocked funds for attorneys’ fees.
The policy states that its m onetary limitations are “m odeled generally on the attorney
compensation provisions of the Criminal Justice Act (CJA) and the Equal Access to Justice Act
(EAJA).” [AR 1706]. The policy limits attorneys’ fees to a rate of $125 per hour, the limit set by the
EAJA. The policy, like the CJA, also incorporatestotal litigation fee caps.These caps can be doubled
in extraordinary cases.
33

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The EAJA and the CJA provide a strong foundation for OFAC’s attorney fee policy. OFAC
has, however, weakened its footing by failing to incorporate the waiver provisi on present in the
CJA.20
Under the CJA:
Payment in excess of any maximum amount provided in paragraph (2) of this subsection may be made for extended or complex representation whenever the court in which the representation was rendered, orthe United States magistrate judge if the representation was furnished exclusively before him, certifies that the amount of the excess payment is necessary to provide fair com pensation and t he payment is approved by the chief judge of the circuit.The chief judge of the circuit may delegate such approval authority to an active or senior circuit judge.
18 U.S.C. § 3006A(d)(3).
In fact, “the statutory maximum is waived so often that the Administrative Office of the U.S.
Courts has created standard CJ A Form 26 for counsel to com plete in order to assist the court in
making its certification.” Randall W . Schnack, Appointment and Payment of Counsel Under the
Criminal Justice Act: Everything Always Wanted to Know But Were Afraid to Ask, 53 FED. LAW. 37,
40 (July 2006).21
As I previously held, OFAC’s adoption of the policy was not arbitrary and capricious on its
face. KindHearts I, supra, 647 F. Supp. 2d at 915-16. Its failure to include the waiver provision of
20 Under t he EAJA, an attorney can request a fee rate in excess of $125 if the court determines that an increase in the cost of living or a special factor justifies a higher fee. Bryant v. Comm’r of Soc. Sec. , 578 F.3d 443, 449-50 (6th Cir. 2009) (citing 28 U.S.C. § 2412(d)(2)(A)). Because I do not find that OFAC’s fee rate cap of $125 in this case was arbitrary or capricious, I do not address this issue further.
21 If OFAC decides to institute a cap waiver system, like that present in the CJA, it could accommodate its concerns about loss of blocked assets by using a system: 1) similar to its present periodic licensing system for requests for fees above the cap; or 2) where periodic fee requests are made to a judge, with OFAC having the right to oppose and be heard on the requests as they are filed.
34

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the CJA does not render it so. It does, however, increase the policy’s susceptibility to arbitrary and capricious application, like the application that occurred here.
For the reasons discussed above and in my August 18 Order, I remand to OFAC for decisionmaking consistent with these opinions.
Conclusion For the foregoing reasons, it is hereby: ORDERED THAT: 1. The government shall show probable cause as provided herein; 2. The government shall provide KindHearts with notice of the basis for its BPI as provided herein; 3. On the issue of attorneys’ fees, the case be, and hereby is, remanded to OFAC for further consideration of KindHearts’ pending and fut ure applications for licensing and release of KindHearts’ funds to compensate its attorneys; and 4. The stay previ ously issued preventing the governm ent from continuing designation proceedings – KindHearts II, supra, 676 F. Supp. 2d 649 – shall, and hereby does, remain in effect pending compliance with this Order and/or further court Order. The Clerk shall arrange a status conference to schedule the further proceedings being set herein before the undersigned; prior to said confer ence, the parties shall confer with regard to the timetable and such other matters that they believe need addressing at the status conference, and shall submit status report(s) not later than one week prior to the conference. So ordered.
s/James G. Carr James G. Carr Chief Judge 35

 
 ,

Case: 3:08-cv-02400-JGC Doc #: 12 Filed: 10/09/08 1 of 3. PageID #: 159

·:; \LE.O

IN THE UNITED STATES DISTRICT COURT\

FOR THE NORTHERN DISTRICT OF OHIO T -9 p\\ 2~ \'2.

WESTERN DIVISION

1"CUoL~R~El\RO'"\CUE'R.~S'·tO&l~E~O~O~{ ~fouOPR.\\~.

)

KINDHEARTS FOR CHARITABLE

)

HUMANITARIAN DEVELOPMENT, INC.,

)

)

Plaintiff:

)

)

v.

)

)

HENRY M. PAULSON, in his official capacity as the )

Secretary ofthe Treasury,

)

ADAM J. SZUBIN, in his official capacity as the

)

Directorofthe Office of Foreign Assets Contro~ and

)

MICHAEL B. MUKASEY, in his official capacity as the )

Attorney General ofthe United States,

)

)

Defendants.

)

TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
The plaintiff in the above-captioned civil action has moved under F.R.Civ.P. 65 for a temporary restraining order and preliminary injunction order preserving the status quo and enjoining defendants, and each of them, from designating plaintiffs as a "Specially Designated Global Terrorist, until plaintiff is provided constitutionally adequate due process. The Court has considered the Motion and the evidence and legal grounds advanced in support of it, finds it well-taken. The Court fmds:
(1) Plaintiff is likely to succeed on the merits of its claims against the defendants. (2) That in the absence of immediate injunctive relief, enjoining the defendants
from taking action to effect the designation of plaintiff as a Specially Designated Global Terrorist without first affording plaintiff constitutionally

Case: 3:08-cv-02400-JGC Doc #: 12 Filed: 10/09/08 2 of 3. PageID #: 160
adequate due process, plaintiff will suffer serious and irreparable injury in the fonn ofloss ofreputation and good will; (3) That the injury defined above is irreparable because no after-the-fact remedy, whether legal or equitable, would be capable of restoring or compensating for the above losses, once they have been incurred; (4) That the defendants' interests will not be impaired in any way by issuance of the immediate injunctive relief that plaintiff seeks; (5) That the public's interest will be served by issuance of the immediate injunctive relief that plaintiffseeks; and (6) That plaintiff has established that under the applicable legal principles it is entitled to immediate injunctive relief. It is therefore ORDERED: (1) That defendants, and their officials, agents, employees, and attorneys, and all those in active concert or participation with them, shall refrain, and they are hereby enjoined and prohibited, from taking any action to effect the designation ofKindHearts as a Specially Designated Terrorist without first affording KindHearts with constitutionally adequate process, including, among other things, notice sufficiently specific to inform KindHearts of the factual and legal basis for the threatened designation, and a meaningful opportunity to contest that basis, including access to all documents and other information upon which it is putatively based. (2) That defendants, and their officials, agents, employees, and attorneys, and all those in active concert or participation with them, shall refrain, and they are hereby
2

Case: 3:08-cv-02400-JGC Doc #: 12 Filed: 10/09/08 3 of 3. PageID #: 161

enjoined and prohibited, from taking any other adverse action against KindHearts during the pendency ofthis proceeding without affording KindHearts constitutionally adequate process.

Dated: ~~6~te.. , ~g
)~of:.~.

~strict Judge

3

 
 Case: 3:08-cv-02400-JGC Doc #: 162 Filed: 01/12/12 1 of 1. PageID #: 3476

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

Kindhearts for Charitable Humanitarian Development, Inc.,
Plaintiff(s)
v.
Timothy Geithner, in his official capacity as the Secretary of the Treasury, et al.,
Defendant(s)

Case No. 3:08cv2400 ORDER

The parties having indicated to the Court that they have reached a settlement of all matters in dispute, it is hereby
ORDERED THAT: 1. Parties are to file a dismissal entry or a joint status report by July 1, 2012. 2. The parties having agreed thereto, any dispute re. term s of settlement is to be
submitted to the undersigned District Judge for final adjudication. So ordered.
/s/ James G. Carr Sr. United States District Judge

 
 Case: 3:08-cv-02400-JGC Doc #: 165 Filed: 11/02/12 1 of 2. PageID #: 3481

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OHIO

WESTERN DIVISION

________________________________________________

)

KINDHEARTS FOR CHARITABLE

)

HUMANITARIAN DEVELOPMENT, INC.,

)

)

Plaintiff,

)

)

v.

)

)

TIMOTHY F. GEITHNER, in his official capacity as the )

Secretary of the Treasury,

)

ADAM J. SZUBIN, in his official capacity as the

)

Director of the Office of Foreign Assets Control, and

)

Civil No. 3:08-cv-2400

ERIC H. HOLDER, in his official capacity as the

)

Chief Judge James G. Carr

Attorney General of the United States,

)

)

Defendants.

)

________________________________________________)

JOINT STATUS REPORT Pursuant to the Court’s order of July 11, 2012, the parties submit this joint status report.

The parties have been working diligently to implement the terms of the settlement agreement and

have encountered additional administrative delays in the distribution of assets. The parties

anticipate completing the remaining steps of the settlement required before dismissal by

February 15, 2013, and respectfully propose to either jointly move the Court for dismissal of this

case or file a joint status report by that date.

November 2, 2012

Respectfully submitted,

STUART DELERY Acting Assistant Attorney General SANDRA M. SCHRAIBMAN Assistant Branch Director Federal Programs Branch
s/Amy Powell AMY POWELL Trial Attorney

s/Alex Abdo ALEX ABDO HINA SHAMSI (admitted pro hac vice) American Civil Liberties Union
Foundation 125 Broad Street, 18th Floor New York, NY 10004 Telephone: (212) 519-7886

1

Case: 3:08-cv-02400-JGC Doc #: 165 Filed: 11/02/12 2 of 2. PageID #: 3482

United States Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Avenue, N.W. Washington, D.C. 20001 Telephone: (202) 514-9836 Fax: (202) 616-8202 amy.powell@usdoj.gov
Counsel for Defendants

Fax: (212) 549-2583 bwizner@aclu.org
FRITZ BYERS (Ohio Bar No. 0002337) The Spitzer Building, Suite 824 520 Madison Avenue Toledo, OH 43603 Telephone: (419) 241-8013 Fax: (419) 241-4215 fbyers@cisp.com
DAVID D. COLE (admitted pro hac vice) Georgetown University Law Center 600 New Jersey Avenue, N.W. Washington, DC 20001 Telephone: (202) 662-9078 cole@law.georgetown.edu
LYNNE BERNABEI (admitted pro hac vice) ALAN R. KABAT (admitted pro hac vice) Bernabei & Wachtel, PLLC 1775 T Street, N.W. Washington, DC 20009 Telephone: (202) 745-1942 Fax: (202) 745-2672 bernabei@bernabeipllc.com
CARRIE L. DAVIS (Ohio Bar No. 0077041) American Civil Liberties Union of Ohio
Foundation, Inc. 4506 Chester Avenue Cleveland, OH 44103 Telephone: (216) 472-2220 Fax: (216) 472-2210 cdavis@acluohio.org
Counsel for KindHearts for Charitable Humanitarian Development, Inc.

2

 
 Case: 3:08-cv-02400-JGC Doc #: 169 Filed: 08/20/13 1 of 3. PageID #: 3490

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

KINDHEARTS FOR CHARITABLE HUMANITARIAN DEVELOPMENT, INC.,

Plaintiff,

v.
TIMOTHY F. GEITHNER, in his official capacity as the Secretary of the Treasury; ADAM J. SZUBIN, in his official capacity as the Director of the Office of Foreign Assets Control; and ERIC H. HOLDER, in his official capacity as the Attorney General of the United States,

Civil No. 3:08-cv-2400 Chief Judge James G. Carr

Defendants.

STATUS REPORT Plaintiff respectfully submits this status report pursuant to the Court’s order of July 29, 2013, to apprise the Court of the progress that has been made in consummating the settlement agreement in this case. Since the last status report, counsel have successfully contacted all of the remaining banks holding Plaintiff’s funds. With two exceptions, all of those banks have disbursed Plaintiff’s funds to the charities and in the proportions set out in the settlement agreement. The two exceptions are Huntington National Bank and DFS Services, LLC. Counsel expect that Huntington will complete the distribution of the funds in its possession by the end of this month. Counsel have been in contact with a representative of DFS, who last stated on July 29 that he would send a confirmation when the funds had been transferred via wire in accordance with the settlement agreement. Counsel have not received any confirmation or any response to a number of emails sent to that representative since July 29.

1

Case: 3:08-cv-02400-JGC Doc #: 169 Filed: 08/20/13 2 of 3. PageID #: 3491
The undersigned have also continued to work with the government and with Plaintiff’s
representatives to dispose of all remaining physical assets of Plaintiff still in the government’s
possession. Once that task is completed and once counsel receive confirmation of DFS’s and
Huntington’s transfers, Plaintiff will take the necessary steps in accordance with the agreement
to dissolve itself. At that point, the government will delist Plaintiff and pay Plaintiff’s attorney’s
fees. The parties will then jointly move to lift the preliminary injunction still in place and to
dismiss this lawsuit with prejudice.
The parties anticipate needing approximately four months to conclude these final steps
and respectfully ask the Court to require the parties to move to dismiss this suit or submit a
further status report by December 20, 2013.
Respectfully submitted,
/s/ David D. Cole DAVID D. COLE (admitted pro hac vice) Georgetown University Law Center 600 New Jersey Avenue, N.W. Washington, DC 20001 Telephone: (202) 662-9078 cole@law.georgetown.edu
FRITZ BYERS (Ohio Bar No. 0002337) The Spitzer Building, Suite 824 520 Madison Avenue Toledo, OH 43603 Telephone: (419) 241-8013 Fax: (419) 241-4215 fbyers@cisp.com
ALEXANDER A. ABDO (admitted pro hac vice) BEN WIZNER (admitted pro hac vice) American Civil Liberties Union Foundation 125 Broad Street, 18th Floor New York, NY 10004 Telephone: (212) 549-2517 Fax: (212) 549-2654
2

Case: 3:08-cv-02400-JGC Doc #: 169 Filed: 08/20/13 3 of 3. PageID #: 3492
bwizner@aclu.org aabdo@aclu.org LYNNE BERNABEI (admitted pro hac vice) ALAN R. KABAT (admitted pro hac vice) Bernabei & Wachtel, PLLC 1775 T Street, N.W. Washington, DC 20009 Telephone: (202) 745-1942 Fax: (202) 745-2672 bernabei@bernabeipllc.com kabat@bernabeipllc.com
3

 
 KINDHEARTS v. GEITHNER
Cite as 647 F.Supp.2d 857 (N.D.Ohio 2009)

857

[33] With regard to the Husseins’ procedural due process claim stemming from the loss of their use and enjoyment of their asphalt drive, I do not find defendants’ defense of qualified immunity maintainable. The law is well-settled that one cannot, in the exercise of state authority, deprive someone of their property without due process of law. See, e.g., Roth, supra, 408 U.S. at 577, 92 S.Ct. 2701; Bell v. Burson, 402 U.S. 535, 539, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971).
The requirements for ‘‘notice and an opportunity to be heard,’’ moreover, are ‘‘clearly established.’’ Gunasekera v. Irwin, 551 F.3d 461, 471 (6th Cir.2009). The defendants, as government employees, should have known that at least some process was due before depriving the Husseins of their property interest.
Any reasonable official would have known that he cannot cease construction or direct destruction of a homeowner’s property without due process. Despite City ordinances noting different ways to resolve zoning violations, the defendants disregarded them and enforced the ordinances as they saw fit. See Silberstein, supra, 440 F.3d at 318 (‘‘A reasonably competent public official is presumed to know the law governing his or her conduct.’’).
If, as the Husseins sufficiently asserted, Klag authorized the Husseins to install a layer of asphalt, it becomes even more clear that the defendants are not entitled to qualified immunity. Because a genuine issue of material fact exists as to this point, summary judgment on the defense of qualified immunity is inappropriate. See Bell v. City of Miamisburg, 1992 WL 1258527, *9 (S.D.Ohio 1992) (finding that when there are ‘‘factual disputes about what occurred, summary judgment on the defense of qualified immunity is inappropriate’’) (citing Brandenburg v. Cureton, 882 F.2d 211 (6th Cir.1989)).

Defendants, furthermore, cannot enjoy qualified immunity to shield them from liability for violating the Husseins’ rights to substantive due process. It is clearly established that government officials cannot, under the substantive due process clause, subject residents to irrational or arbitrary zoning decisions. See Triomphe Investors v. City of Northwood, 835 F.Supp. 1036, 1042 (N.D.Ohio 1993) (‘‘plaintiffs had a clearly established right not to be subject to an arbitrary or an irrational zoning decision.’’) (citing Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 263, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977)).
Thielen and Klag cannot, therefore, rely on the defense of qualified immunity to shield themselves from liabilities for any of the Husseins’ remaining allegations of constitutional violations.
Conclusion For the foregoing reasons, it is hereby: ORDERED THAT defendants’ motion for summary judgment [Doc. 64] be, granted in part and denied in part. So ordered.
,
KINDHEARTS FOR CHARITABLE HUMANITARIAN DEVELOPMENT, INC., Plaintiff v.
Timothy GEITHNER, et al, Defendant. Case No. 3:08CV2400.
United States District Court, N.D. Ohio,
Western Division.
Aug. 18, 2009. Background: Non-profit corporation brought action against Secretary of Trea-

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647 FEDERAL SUPPLEMENT, 2d SERIES

sury, Director of Office of Foreign Assets Control (OFAC) of Treasury Department, and Attorney General challenging a provisional determination by OFAC that corporation was Specially Designated Global Terrorist (SDGT), and challenged block OFAC placed on its assets pending full investigation. Corporation moved for summary judgment, and defendants moved to dismiss for failure to state claim upon which relief can be granted or for summary judgment.
Holdings: The District Court, James G. Carr, Chief Judge, held that:
(1) ‘‘blocking action’’ by OFAC constituted a ‘‘seizure’’ for purposes of the Fourth Amendment;
(2) government failed to show that ‘‘blocking action’’ was justified under exigent circumstances exception to Fourth Amendment;
(3) foreign national, who was president of organization, had ‘‘interest’’ in its assets under International Emergency Economic Powers act (IEEPA);
(4) OFAC’s terrorist designation authority, issued pursuant to executive order under IEEPA, was not unconstitutionally vague;
(5) OFAC provided organization constitutionally inadequate notice prior to blocking its assets during course of its investigation; and
(6) attorney fees policy of OFAC was applied arbitrarily and capriciously, in violation of Administrative Procedure Act (APA), to attorneys of non-profit corporation.
So ordered.
1. Searches and Seizures O13.1 The government seizes property pur-
suant to Fourth Amendment when it creates some meaningful interference with an

individual’s possessory interests in that property. U.S.C.A. Const.Amend. 4.
2. Searches and Seizures O13.1 Even brief detentions of personal ef-
fects, such as a short investigative detention of luggage at an airport, are ‘‘seizures’’ subject to Fourth Amendment scrutiny. U.S.C.A. Const.Amend. 4.
3. Searches and Seizures O13.1 The government need not take posses-
sion of or title to property to ‘‘seize’’ it; interference with the target’s possessory interest triggers Fourth Amendment scrutiny. U.S.C.A. Const.Amend. 4.
4. Searches and Seizures O13.1 War and National Emergency O503 A ‘‘blocking action’’ by the Director of
Office of Foreign Assets Control (OFAC) of Treasury Department, which blocks assets of entities under investigation for supporting terrorism, constitutes a ‘‘seizure’’ for purposes of Fourth Amendment. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202207, 50 U.S.C.A. §§ 1701-1706.
5. Searches and Seizures O24, 125 Generally, the Fourth Amendment
permits seizures only on the basis of probable cause and a judicial warrant listing, with particularity, the item or items to be seized. U.S.C.A. Const.Amend. 4.
6. Searches and Seizures O23 Reasonableness is the ultimate stan-
dard for analysis of government searches and seizures under the Fourth Amendment. U.S.C.A. Const.Amend. 4.
7. Searches and Seizures O23, 24 Searches and seizures are usually
‘‘reasonable’’ under Fourth Amendment only when conducted with a judicial warrant supported by probable cause. U.S.C.A. Const.Amend. 4.

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859

8. Searches and Seizures O24 ‘‘Special needs’’ warrantless searches
and seizures need only be reasonable under all the circumstances; no warrant or probable cause is required. U.S.C.A. Const.Amend. 4.
9. Searches and Seizures O44 Under the Fourth Amendment, if exi-
gent circumstances exist for a search or seizure, the warrant requirement, but not the requirement of probable cause, may be excused. U.S.C.A. Const.Amend. 4.
10. Searches and Seizures O24 Special needs searches and seizures
share at least three basic characteristics: (1) they must serve a purpose above and beyond normal criminal law enforcement; (2) circumstances must make the warrant and probable cause requirement impracticable; and (3) the method of search or seizure must have built-in limits, such as a confined geographic scope or regular, suspicionless application, that restrict executive discretion and ensure that all citizens know the circumstances under which they are subject to a special needs search or seizure. U.S.C.A. Const.Amend. 4.
11. Searches and Seizures O24 War and National Emergency O503 A ‘‘blocking action’’ by the Director of
Office of Foreign Assets Control (OFAC) of Treasury Department, which blocks assets of entities under investigation for supporting terrorism, does not fit within the ‘‘special needs’’ exception to the Fourth Amendment’s warrant and probable cause requirements. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202-207, 50 U.S.C.A. §§ 17011706.

upon consideration of: (1) whether immediate government action was required; (2) whether the governmental interest was sufficiently compelling to justify a warrantless intrusion; and (3) whether the citizens’ expectation of privacy was diminished in some way. U.S.C.A. Const.Amend. 4.
13. Searches and Seizures O45
For a warrantless search to be sustained, a person of reasonable caution must be able to conclude that evidence of a federal crime would probably be found on the premises and also that such evidence would probably be destroyed within the time necessary to obtain a search warrant. U.S.C.A. Const.Amend. 4.
14. Searches and Seizures O44
War and National Emergency O503
Government failed to show that ‘‘blocking action’’ by the Director of Office of Foreign Assets Control (OFAC) of Treasury Department, which blocked assets of non-profit organization under investigation for allegedly supporting terrorism, was justified under exigent circumstances exception to the Fourth Amendment’s warrant and probable cause requirements; OFAC conducted preliminary investigation of presently indeterminate duration which led to blocking order, time was not of essence, and while government had compelling interest in preventing flow of funds to overseas terrorist organizations, government had time to secure a warrant, and organization had strong interest in accessing its funds, remaining in operation and disbursing its funds lawfully. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202-207, 50 U.S.C.A. §§ 1701-1706.

12. Searches and Seizures O42.1 A court may find that exigent circum-
stances existed, thereby eliminating warrant requirement of Fourth Amendment,

15. War and National Emergency O50
District Court could not review, under Administrative Procedure Act (APA) provisional and prospective final determina-

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647 FEDERAL SUPPLEMENT, 2d SERIES

tion by Office of Foreign Assets Control (OFAC) of United States Treasury Department that non-profit corporation was Specially Designated Global Terrorist (SDGT), pursuant to corporation’s purported Fourth Amendment challenge; Court could only review final agency action. U.S.C.A. Const.Amend. 4; 5 U.S.C.A. § 704.
16. Administrative Law and Procedure O704
Provisional agency action is not final action under the Administrative Procedure Act (APA). 5 U.S.C.A. § 704.
17. War and National Emergency O503 International Emergency Economic
Powers Act (IEEPA) does not require that an entity have a nexus with a sanctioned nation to be the subject of a blocking action; rather, IEEPA only requires that blocked property be property in which any foreign country or a foreign national ‘‘has any interest.’’ International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
18. War and National Emergency O503 Foreign national, who was president
of non-profit organization, had ‘‘interest’’ in organization’s assets under International Emergency Economic Powers Act (IEEPA), as was required for Director of Office of Foreign Assets Control (OFAC) of Treasury Department to satisfy Fourth Amendment in issuing ‘‘blocking order’’ on organization’s assets pending full investigation. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
19. Constitutional Law O3905 Vague statutes are contrary to the
first essential requirement of due process of law for two reasons: (1) unclear statutes deny citizens a reasonable opportunity to

know what is prohibited, so that they may act accordingly, and (2) vague laws encourage arbitrary and discriminatory enforcement, because they impermissibly delegate basic policy matters to policemen, judges, and juries. U.S.C.A. Const.Amends. 5, 14.
20. Statutes O47
A plaintiff may assert two types of vagueness claims: (1) it may challenge statutes as vague as applied to plaintiff’s specific conduct, or (2) it may claim that a statute is vague on its face, meaning that it is vague as to conduct beyond that of the individual plaintiff. U.S.C.A. Const. Amend. 1.
21. Statutes O62
A successful facial challenge renders the law invalid; facial invalidation, therefore, is strong medicine that courts should use only as a last resort. U.S.C.A. Const. Amend. 1.
22. Statutes O47
Generally, an enactment is unconstitutionally vague on is face only if it is impermissibly vague in all its applications.
23. Constitutional Law O1152
Salerno doctrine, generally requiring that plaintiff making facial challenge to statute prove its invalidity in all its applications, does not apply if plaintiff shows that challenged enactment is: (1) criminal in nature, and (2) implicates First Amendment rights. U.S.C.A. Const.Amend. 1.
24. Constitutional Law O1800
Where a criminal statute is narrowly tailored to restrict only unprotected speech, it does not implicate First Amendment rights for the purposes of a void-forvagueness challenge. U.S.C.A. Const. Amend. 1.

KINDHEARTS v. GEITHNER
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861

25. Constitutional Law O1868 War and National Emergency O50 Terrorist designation authority of
United States Office of Foreign Assets Control (OFAC) of the Treasury Department, issued pursuant to executive order under International Emergency Economic Powers Act (IEEPA) and which allowed for designations of entities owed or controlled by specially designated global terrorists (SDGT), neither implicated First Amendment rights nor imposed criminal sanctions so as to render it unconstitutionally vague; terms of authority were content neutral, law was largely directed at stopping financial assistance to terrorist organizations, which was a legitimate state interest, and terrorism was specifically defined in the regulations and restrictions were narrowly tailored. U.S.C.A. Const.Amend. 1; International Emergency Economic Powers Act, § 202(a), 50 U.S.C.A. § 1701(a); 31 C.F.R. § 594.311.
26. Statutes O188, 208 Courts may ascertain the meaning of
an undefined term in a statute or other law by reading it in context, or by looking to the term’s common meaning.
27. Statutes O47 A statute may be facially vague if it
contains language that lends itself to subjective interpretation.
28. Constitutional Law O1133 War and National Emergency O50 Executive Order (EO) banning provi-
sion of ‘‘services’’ to specially designated global terrorists (SDGT) was not unconstitutionally vague on its face; EO did not give unfettered authority to designate a person or group as an SDGT, and meaning of the ban would be clear in the vast majority of intended applications.

ignated global terrorists (SDGT) was not unconstitutionally vague on its face; related federal acts, case law, and common meaning provided ‘‘broad concept’’ of examples of material support, including the giving of funds to SDGT, which satisfied definition under EO.
30. Constitutional Law O1440, 1868 War and National Emergency O50 Executive Order (EO) banning per-
sons from being ‘‘otherwise associated with’’ specially designated global terrorists (SDGT) was not unconstitutionally vague on its face; definition in federal regulation limited applicability of phrase to protected speech and conduct. U.S.C.A. Const. Amend. 1; 31 C.F.R. § 594.316.
31. Criminal Law O13(1) Criminal statutes are not unconstitu-
tional where the legislature did not make intent to violate the statute an element of the crime.
32. Constitutional Law O4252 War and National Emergency O50 Provision of International Emergency
Economic Powers Act (IEEPA), which authorized Director of the Office of Foreign Assets Control (OFAC) of the Treasury Department to block individual’s or organization’s assets based on assertion of OFAC that individual or organization was under investigation as to whether it was specially designated global terrorists (SDGT) was not unconstitutional on its face, since, if properly administered, it could be implemented consonant with requirements of due process. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).

29. Constitutional Law O1133 War and National Emergency O50 Executive Order (EO) banning provi-
sion of ‘‘material support’’ to specially des-

33. Constitutional Law O3881 Constitutionally sufficient notice, in
accordance with due process, should give a party an understanding of the allegations

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647 FEDERAL SUPPLEMENT, 2d SERIES

against it so that it has the opportunity to make a meaningful response, must allow a party to be able to know the conduct on which the government bases its action, so that it can explain its conduct or otherwise respond to the allegations, and must provide party to reasonable access to evidence that government is using against them. U.S.C.A. Const.Amend. 5.
34. Constitutional Law O4252 War and National Emergency O50 Director of the Office of Foreign As-
sets Control (OFAC) of the Treasury Department provided inadequate notice, under due process clause, to non-profit corporation prior to blocking its assets, pursuant to International Emergency Economic Powers Act (IEEPA), while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT); organization had its assets seized and had been put out of business without being told why in any meaningful or useful way or on what basis the government took its action, government had not stated which alleged recipients of funds were associated with terroristrelated groups, and organization could not challenge government’s actions without that information, government should have given organization the unclassified administrative record on which it relied in taking its blocking action, and OFAC had not explained either to organization or to court why it failed to provide timely notice of basis and reasons for its blocking order or why it took so long for it to provide scant information it had produced. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
35. Constitutional Law O4252 War and National Emergency O50 Director of the Office of Foreign As-
sets Control (OFAC) of the Treasury De-

partment failed to provide adequate postdeprivation hearing, under due process clause, to non-profit corporation after blocking its assets, pursuant to International Emergency Economic Powers Act (IEEPA), while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT); corporation received no response to its challenge of OFAC’s determination for over year, and once OFAC finally responded, it merely stated it had received corporation’s challenge and had provisionally determined it was SDGT, enclosed copy of unclassified record on which it relied in making its determination, and invited corporation to send another response. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
36. Constitutional Law O978 Non-profit corporation’s due process
challenge to possible final designation by Director of the Office of Foreign Assets Control (OFAC) of the Treasury Department of corporation as specially designated global terrorist (SDGT), under International Emergency Economic Powers Act (IEEPA), was not ripe, since OFAC had not yet made designation and would consider response from corporation before making a determination. U.S.C.A. Const. Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
37. Federal Civil Procedure O1951 The Constitution does not guarantee
compensation for counsel in civil cases. U.S.C.A. Const.Amend. 6.
38. Administrative Law and Procedure O760, 763
The arbitrary and capricious standard under the Administrative Procedure Act, which states that an agency action will not

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863

be set aside unless it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, is deferential to the agency, and a court may not substitute its judgment for that of the agency. 5 U.S.C.A. § 706(2)(A).
39. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department, as well as its application to attorneys of non-profit corporation which had its requests to release funds subject to OFAC blocking order refused, thereby making it unable to pay its counsel, while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT) under International Emergency Economic Powers Act (IEEPA) was ripe for review, since policy and decision represented final agency decision applied to counsel of corporation, and directly affected corporation as its original counsel had to resign after multiple attempts to blocked funds to receive payment for his work and required corporation to secure pro bono assistance from alternate counsel. International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
40. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department, which permitted expenditure of funds subject to OFAC blocking order for payment of attorney fees at rates based on attorney compensation provisions of Equal Access to Justice Act (EAJA) and Criminal Justice Act (CJA), was rationally related to advancement of governmental interest in enhancing ability of blocked party that lacked alternative access to funds to acquire legal representation in connection with its designation, under International Emergency Economic Powers Act (IEEPA), as specially designated global terrorist (SDGT), or blocking of party’s

property and interests in property, as was

required pursuant to ‘‘arbitrary and capri-

cious’’ review under Administrative Proce-

dure Act (APA). 5 U.S.C.A. § 706(2)(A); 28

U.S.C.A. § 2412(d); International Emer-

gency Economic Powers Act,

§ 203(a)(1)(B),

50

U.S.C.A.

§ 1702(a)(1)(B).

41. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department was applied arbitrarily and capriciously, in violation of Administrative Procedure Act (APA), to attorneys of non-profit corporation which had its requests to release funds subject to OFAC blocking order refused, thereby making it unable to pay its counsel, while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT) under International Emergency Economic Powers Act (IEEPA); OFAC provided no sufficient of statement of reasons for authorizing modest, rather than full, amount requested, had not addressed effect on generation of attorney fees of certain special circumstances in case, and there was disconnect between facts underlying request for access to blocked funds for attorney fees and purposes underlying attorney fee policy. 5 U.S.C.A. § 706(2)(A); International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).

Fritz Byers, Jeffrey M. Gamso, Gamso, Helmick & Hoolahan, Toledo, OH, Alan R. Kabat, Lynne Bernabei, Bernabei & Wachtel, David D. Cole, Georgetown University Law Center, Washington, DC, Carrie L. Davis, American Civil Liberties Union of Ohio Foundation, Cleveland, OH, Hina Shamsi, American Civil Liberties Un-

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647 FEDERAL SUPPLEMENT, 2d SERIES

ion Foundation, New York, NY, for Plaintiff.
Amy E. Powell, Jonathan E. Zimmerman, U.S. Department of Justice–Civil Division, Federal Programs, Washington, DC, for Defendant.
Daniel J. Maloney, Maloney, McHugh & Kolodgy, Ltd., Toledo, OH, Ranjana Natarajan, University of Texas, School of Law National Security Clinic, Austin, TX, for Amici Curiae.
ORDER
JAMES G. CARR, Chief Judge.
Plaintiff KindHearts for Charitable Humanitarian Development, Inc. (KindHearts), an Ohio corporation, challenges a provisional determination by the Office of Foreign Assets Control [OFAC] of the United States Treasury Department that plaintiff is a Specially Designated Global Terrorist [SDGT]. KindHearts also challenges the block OFAC placed on plaintiff’s assets pending a full investigation.
OFAC alleges that KindHearts provides material support to Hamas, which is also an SDGT. OFAC’s authority to designate SDGTs and block the assets of entities under investigation for supporting terrorism stems from the International Emergency Economic Powers Act [IEEPA], 50 U.S.C. § 1701–06 and Executive Order 13224 [E.O. 13224].
KindHearts alleges that OFAC’s actions are unconstitutional because: 1) OFAC’s block is an unreasonable seizure in violation of the Fourth Amendment; 2) provisions authorizing OFAC to designate SDGT and block assets pending investigation are void for vagueness under the Fifth Amendment; 3) OFAC denied KindHearts procedural due process before provisionally determining it to be an SDGT and blocking its assets; and 4) OFAC has unconstitutionally restricted plaintiff’s access to the resources it needs to mount a de-

fense. KindHearts further claims that OFAC blocked KindHearts’ assets without proper statutory authorization.
KindHearts asks this court to lift the OFAC blocking order or, alternatively, to require OFAC to provide KindHearts with adequate process.
The defendants—the Secretary of the Treasury, Director of OFAC, and Attorney General—are United States government officials sued in their official capacities. This court sua sponte substitutes as defendants Timothy Geithner, Secretary of the Treasury, and Eric H. Holder, Attorney General, for former Treasury Secretary Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively. Defendants contest plaintiff’s constitutional and statutory claims, and argue that claims arising from OFAC’s provisional determination that KindHearts is an SDGT are not ripe for this court’s review.
Pending are plaintiff’s motion for partial summary judgment under Rule 56 of the Federal Rules of Civil Procedure [Doc. 31] and defendants’ motion to dismiss under Rule 12(b)(6) or, in the alternative, for summary judgment on all counts under Rule 56. [Doc. 36].
Background
KindHearts, a Toledo-based non-profit corporation, was incorporated on January 22, 2002, under Ohio law. Its stated goal is to provide humanitarian aid without regard to religious or political affiliation.
Khaled Smaili founded KindHearts after OFAC shut down several Muslim-affiliated charities which, like KindHearts had as their stated objectives humanitarian relief in the Middle East and elsewhere. KindHearts contends that from its inception, its officers and directors took great care to ensure it did not fund any designated terrorist or terrorist-related entities or otherwise violate federal laws regarding

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865

designated terrorists. It sought guidance from the Treasury Department, and implemented the Treasury’s voluntary guidelines for charitable organizations.
On February 19, 2006, OFAC froze all of KindHearts’ assets pending investigation into whether it was subject to designation under IEEPA and E.O. 13224. More than a year later, on May 25, 2007, OFAC informed KindHearts it had provisionally determined to designate it a SDGT.
Statutory and Regulatory Framework
The Executive initially used the Trading With the Enemy Act [TWEA], 50 App. U.S.C. §§ 1–44, enacted in 1917, to impose sanctions and embargoes on foreign nations. In 1977, Congress amended the TWEA and enacted the IEEPA. The IEEPA requires the President to declare a national emergency to ‘‘deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy or economy of the United States.’’ The pertinent sections of the IEEPA are 50 U.S.C. § 1701 and 1702:
§ 1701. Unusual and extraordinary threat; declaration of national emergency; exercise of Presidential authorities
(a) Any authority granted to the President by section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat. (b) The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for

any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.
§ 1702. Presidential authorities
(a)(1) At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—
(A) investigate, regulate, or prohibit—
(i) any transactions in foreign exchange,
(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
(iii) the importing or exporting of currency or securities, by any person, or with respect to any property, subject to the jurisdiction of the United States;
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States; TTT
50 U.S.C. §§ 1701–1702.
On September 24, 2001, President Bush issued E.O. 13224, declaring a national emergency with respect to ‘‘grave acts and threats of terrorism.’’ He invoked his au-

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647 FEDERAL SUPPLEMENT, 2d SERIES

thority under the IEEPA, authorizing the Secretary of Treasury, in consultation with the Secretary of State and Attorney General, to designate ‘‘persons’’ (defined as individuals or entities) whose property or interests in property should be blocked because they ‘‘act for or on behalf of’’ or are ‘‘owned or controlled by’’ designated terrorists, or because they ‘‘assist in, sponsor, or provide financial, material or technological support for, or financial or other services to or in support of’’ or are ‘‘otherwise associated’’ with them.1
Individuals or entities designated under E.O. 13224 are labeled ‘‘Specially Designated Global Terrorists.’’ In § 10 of the Executive Order, the President states that under the Order no prior notice of a listing or designation needs to be provided to those with a presence in the United States because of the targeted organization’s ability to transfer funds or assets instantaneously, which would render the blocking measures ineffectual.
In October, 2001, the Patriot Act amended the IEEPA. It added the phrase ‘‘block pending investigation’’ after the word ‘‘investigate’’ in 50 U.S.C. § 1702(a)(1)(B). The amendment permitted the Treasury Secretary to impose all the blocking effects of a designation, including freezing an organization’s assets indefinitely and criminalizing all its transactions, without designating the organization a SDGT. The Treasury only needs to assert that it is investigating whether the entity should be designated. The amendment also provided that an agency record containing classified information could be ‘‘submitted to the reviewing court ex parte and in camera.’’

Designation as a specially designated global terrorist immediately results in the blocking of the designee’s property and interests in property within the United States or in the control of United States persons. It also prohibits all transactions with designated entities, including making or receiving any contribution of funds, goods or services to or for the benefit of those persons. Executive Order 13224 specifically prohibits all humanitarian donations.
The Treasury Department promulgated regulations implementing E.O. 13224 on June 6, 2003. The regulations set forth the procedures for imposing civil and criminal penalties on United States persons who engage in any transaction with any entity that has been designated or blocked pending investigation. With respect to a designation, 31 CFR § 501.807 permits designated entities to seek administrative reconsideration by OFAC after they have been designated and had their property frozen.
OFAC’s Block Pending Investigation of KindHearts
On February 19, 2006, OFAC blocked all of KindHearts’ assets and property pending investigation into whether it was subject to designation under E.O. 13224. On the same day it blocked KindHearts’ assets, the government executed search warrants at KindHearts’ Toledo headquarters and the residence of its President, Khaled Smaili. It removed all KindHearts’ records, computers and several boxes of publications and documents. Before executing those search warrants, the Department of Justice obtained two grand jury subpoenas

1. In Humanitarian Law Project v. U.S. Department of Treasury, 463 F.Supp.2d 1049, 1070– 71 (C.D.Cal.2006), the court declared unconstitutional the ‘‘otherwise associated’’ criterion. The Treasury Department subsequently issued a regulation that defined that provision

as ‘‘(a) To own or control; or (b) To attempt, or conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services to.’’

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requiring: 1) Ernst & Young to produce documents relating to KindHearts and 2) a member of KindHearts’ Board of Directors to produce all records of KindHearts from January 1, 2002, to February 17, 2006.
On issuing the block, OFAC sent a ‘‘blocking notice’’ to KindHearts. The notice stated:
You are hereby notified that all property and interests in property of KindHearts TTT including its U.S. representative office and all other offices worldwide, are blocked pending investigation into whether KindHearts is subject to designation pursuant to Executive Order 13224 TTT for being controlled by, acting for or on behalf of, assisting in or providing financial or material support to, and/or otherwise being associated with Hamas.
The notice also explained KindHearts did not receive prior notice of OFAC’s determination to block its assets pending investigation because it could have transferred its funds and assets, thus rendering the sanctions ineffectual. It stated that if KindHearts believed OFAC took this action in error, and wanted to challenge it, it could send a letter to the attention of the Director of OFAC explaining KindHearts’ views and providing evidence.
That same day, the Treasury Department posted a press release on its website announcing the blocking of KindHearts’ assets. The press release also stated that KindHearts’ officials and fundraisers had ‘‘coordinated with Hamas leaders and made contributions to Hamas-affiliated organizations’’ including such organizations in the West Bank and Lebanon. The press release asserted that KindHearts was founded to replace the Hamas-affiliated Holy Land Foundation for Relief and

Development [HLF] and the al-Qaida-affiliated Global Relief Foundation [GRF].2
As a result of the block, KindHearts’ assets and property, including about one million dollars in bank accounts, became frozen indefinitely. Through its blocking order, OFAC effectively shut the organization down.
In April, 2006, KindHearts’ attorney, Jihad Smaili [brother of Khaled Smaili], filed a letter in response to the block, but OFAC failed to respond to it. On November 29, 2006, KindHearts counsel requested a copy of the full administrative record being used by OFAC in its investigation. It received no response.
OFAC’s Provisional SGDT Designation of KindHearts
On May 25, 2007, more than a year after Jihad Smaili’s initial letter, and more than six months after his follow-up letter, OFAC notified KindHearts that OFAC had provisionally determined to designate KindHearts a specially designated global terrorist. In that letter it for the first time acknowledged receiving KindHearts’ challenge to the block pending investigation. OFAC’s letter stated,
We have received Jihad Smaili’s April 24, 2006 letter to TTT OFAC requesting reconsideration of OFAC’s decision to block the property and property interests of KindHearts TTT pending investigation into whether KindHearts should be designated as a Specially Designated Global Terrorist TTT Since receipt of that letter, OFAC has completed its investigation into whether KindHearts should be designated as an Specially Designated Global Terrorist and has provisionally determined that designation is appropriate.

2. By prior action against HLF and GRF, the government had put those organizations out

of operation prior to the founding of KindHearts.

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Accompanying OFAC’s letter were thirty-five unclassified and non-privileged documents on which, according to OFAC, it had relied in making the provisional determination. OFAC acknowledged it also relied on other ‘‘classified and privileged documents obtained to date TTT not authorized for disclosure, including material obtained or derived pursuant to’’ the Foreign Intelligence Surveillance Act [FISA], 50 U.S.C. § 1801 et seq.
The OFAC letter also included an unclassified three-page summary of the classified evidence. It provided no explanation of the specific charges it was considering against KindHearts or why it thought the evidence supported a potential designation.
The letter stated KindHearts could ‘‘present to OFAC any evidence or other information that it [wanted] OFAC to consider before making a final determination with respect to designation.’’ It explained ‘‘OFAC [would] consider any such information, as well as the information described above in making a final determination.’’ It also noted that if it ‘‘decide[d] to consider any additional unclassified, non-privileged materials in making this determination, it [would] advise KindHearts of that fact, provide KindHearts with copies of the materials, and give KindHearts an opportunity to respond to them.’’ OFAC initially

gave KindHearts thirty days to respond to its provisional determination.
KindHearts sought access to the full classified and unclassified administrative record to defend itself, and an extension of time in which to respond to OFAC’s unclassified submission.
On June 14, 2007, KindHearts requested access to its own records in the government’s possession. OFAC waited two months, until August 14, 2007, before notifying KindHearts’ counsel that OFAC possessed only a few of the records. The United States Attorney’s office had the rest of the records. That Office refused to provide KindHearts with a copy of the documents.3
On June 25, 2007, KindHearts’ counsel sent OFAC a twenty-eight page preliminary submission in which KindHearts attempted to, in its words, ‘‘guess at and address OFAC’s concerns.’’ It attached to that a 1369–page submission of supporting evidence. OFAC never responded to this submission.4
On June 27, 2007, KindHearts asked OFAC to perform a declassification review of the classified evidence on which it relied in issuing the blocking notice. In a letter dated August 10, 2007, OFAC agreed with KindHearts’ request, and stated it would give KindHearts thirty days after the com-

3. On April 11, 2008, more than two years after the search of KindHearts’ office and seizure of its records, the United States Attorney’s Office provided KindHearts with an electronic copy of a subset of the seized documents, but did so subject to stringent conditions. Under a protective order, KindHearts members and officers could not view the documents without court approval, and KindHearts counsel could not print or electronically copy any documents. After KindHearts filed this lawsuit, the government agreed to amend the order to permit KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.

On January 30, 2009, I granted KindHearts’ motion to modify the amended protective order. I required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. OFAC allowed KindHearts’ counsel to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel.
4. OFAC claims it ‘‘misplaced’’ the June 25, 2007, submission. It does not, however, state what constituted such ‘‘misplacing,’’ how it happened, or may have happened, or when, if ever, and how it located the submission.

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pletion of declassification review to submit a response. OFAC informed counsel that it could not state when review would be completed, and denied KindHearts’ counsel interim access to classified information.
OFAC reported no progress on the declassification review in the fourteen months between its June 27, 2007, agreement to conduct declassification review and the filing of this lawsuit. After KindHearts filed suit, the government, during a telephone call with KindHearts’ counsel on October 20, 2008, indicated it could complete the declassification review within thirty days.
On August 13, 2007, KindHearts requested further clarification of the charges against it and an extension of time until forty-five days after the completion of the declassification review. KindHearts stated it needed the extension to receive meaningful process.
On August 16, 2007, OFAC informed KindHearts that it could contact KindHearts’ employees; it also stated that any KindHearts documents in possession of such employees constituted blocked property. Use of such documents would require a license from OFAC, and existing regulations require counsel to provide basic identifying information regarding the property.5
On October 26, 2007, and December 20, 2007, KindHearts’ counsel objected to OFAC’s requirement that it identify blocked property in its possession. Counsel did not request a license to use blocked property.
On December 26, 2007, OFAC issued a license allowing KindHearts counsel to receive copies of blocked documents necessary for them to provide legal services to KindHearts.
For over two years, OFAC did not allow KindHearts to use its own funds to pay

attorneys’ fees. OFAC asserted KindHearts could pay for legal services only if those payments did not originate from its blocked funds. Immediately after the block, Jihad Smaili, KindHearts’ attorney, corresponded with OFAC regarding the release of blocked funds to pay attorney fees, but OFAC maintained that KindHearts could only pay for attorneys from ‘‘fresh funds’’ (funds raised abroad), or by obtaining a license to create a legal defense fund. Smaili resigned, and Lynne Bernabei, of the law firm Bernabei & Wachtel PLLC, and Professor David Cole applied for and were granted licenses to represent KindHearts. OFAC denied them funding from blocked assets. In late June 2008, Bernabei & Wachtel sought the assistance of the ACLU.
As of June, 2008, after its policy on attorneys fees was challenged as unconstitutional in other litigation, OFAC, after adopting a policy change, permits KindHearts to use a limited amount of its funds to pay for legal expenses. It can pay up to two lawyers $7000 each for proceedings at the administrative level, and an additional $7000 each for trial level proceedings. It can pay up to $5000 each for appellate proceedings. In March, 2009, after Bernabei & Wachtel applied for funding, OFAC granted $27,040 from KindHearts’ blocked funds for legal fees.
In December, 2008, OFAC produced declassified versions of the block and provisional determination memoranda. Since then, the government has declassified portions of block exhibits. In January, 2009, it declassified several portions of several paragraphs in the block memorandum. On March 13, 2009, OFAC declassified one of several bases for its block and threatened designation.

5. The parties dispute what information the government requires regarding the property.

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Since February 19, 2006, when OFAC first notified KindHearts of the block pending investigation, OFAC has not designated KindHearts a SDGT.6 For almost three years OFAC has blocked KindHearts’ property and property interests and criminalized all transactions with it. OFAC has effectively shut KindHearts down.
STANDARD OF REVIEW
Both plaintiff and defendants move for summary judgment. A court must enter summary judgment ‘‘against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.’’ Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the initial responsibility of informing the district court of its motion’s basis, and identifying the record’s portions that demonstrate the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. 2548. The nonmoving party ‘‘must [then] set forth specific facts showing that there is a genuine issue for trial.’’ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)).
In deciding the motion for summary judgment, the court will believe the nonmoving party’s evidence as true, it will resolve all doubts against the non-moving party, it will construe all evidence in the light most favorable to the non-moving party, and it will draw all inferences in the non-moving party’s favor. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992).

Defendants move to dismiss plaintiff’s claims under Rule 12(b)(6). A court ‘‘must accept all well-pleaded factual allegations of the complaint as true and construe the complaint in the light most favorable to the plaintiff.’’ Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir.2002) (citing Turker v. Ohio Dep’t of Rehab. & Corr., 157 F.3d 453, 456 (6th Cir.1998)); Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir.1994). The court is not bound to accept as true unwarranted factual inferences, Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987), or legal conclusions unsupported by well-pleaded facts. Teagardener v. Republic–Franklin, Inc. Pension Plan, 909 F.2d 947, 950 (6th Cir.1990).
A Rule 12(b)(6) motion to dismiss is directed solely to the complaint and any exhibits attached to it. Roth Steel Products v. Sharon Steel Corp., 705 F.2d 134, 155 (6th Cir.1983). The merits of the claims are not at issue. Consequently, a complaint will be dismissed pursuant to Rule 12(b)(6) only if there is no law to support the claims made, the facts alleged are insufficient to state a claim, or on the face of the complaint there is an insurmountable bar to relief. See Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 702 (6th Cir.1978).
DISCUSSION
1. Fourth Amendment
KindHearts argues that OFAC’s block pending investigation is an unreasonable seizure in violation of the Fourth Amendment. In blocking KindHearts’ assets, OFAC acted without a prior judicial warrant. It purports, however, to have acted on reasonable suspicion that KindHearts met the criteria for designation under E.O. 13224.

6. On October 9, 2008, I enjoined OFAC from designating KindHearts a SDGT. KindHearts sought the injunction to maintain the status

quo and avoid any possible adverse effects from such designation during the pendency of this litigation.

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Neither the IEEPA nor E.O. 13224 requires a warrant or probable cause to effect a block pending investigation. The government argues that the economic sanctions authorized by that statute and the Executive Order are not ‘‘seizures’’ and therefore the Fourth Amendment is inapplicable Alternatively, the government disputes the contention that traditional warrant and probable cause requirements apply to blocks pending investigation.
A. The Block Pending Investigation is a Fourth Amendment ‘‘Seizure’’
The first inquiry is whether OFAC’s block is a ‘‘seizure’’ in Fourth Amendment terms. If the block is not a ‘‘seizure,’’ the Fourth Amendment does not constrain the government’s conduct.
[1, 2] The Fourth Amendment protects ‘‘the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.’’ U.S. Const. amend. IV. The government seizes property when it creates ‘‘some meaningful interference with an individual’s possessory interests in that property.’’ Soldal v. Cook County, Ill., 506 U.S. 56, 61, 113 S.Ct. 538, 121 L.Ed.2d 450 (1992); see also Horton v. California, 496 U.S. 128, 133, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990); U.S. v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984). Even ‘‘brief detentions of personal effects,’’ such as a short investigative detention of luggage at an airport, are ‘‘seizures’’ subject to Fourth Amendment scrutiny. U.S. v. Place, 462 U.S. 696, 706, 103 S.Ct. 2637, 77 L.Ed.2d 110 (1983).
i. OFAC Blocking Actions Meet the Soldal Definition of ‘‘Seizure’’
[3] The government need not take possession of or title to property to ‘‘seize’’ it; interference with the target’s possessory interest triggers Fourth Amendment scrutiny. Illinois v. McArthur, 531 U.S. 326, 330, 121 S.Ct. 946, 148 L.Ed.2d 838 (2001).

In McArthur, officers, who had probable cause to believe a suspect’s home contained marijuana, prevented him from reentering his home for the two hours needed to obtain a search warrant. Id. at 331– 332, 121 S.Ct. 946. Even though the officers had taken nothing during that period, the Court applied Fourth Amendment scrutiny to the ‘‘temporary seizure’’ of the suspect’s home. Id. at 330–31, 121 S.Ct. 946.
Those courts that have considered Fourth Amendment challenges to OFAC blocking actions under the IEEPA and E.O. 13224 disagree as to whether blocks are Fourth Amendment seizures. One view is that asset-blocking is not a seizure. Islamic Am. Relief Agency v. Unidentified FBI Agents, 394 F.Supp.2d 34, 47–48 (D.D.C.2005); Holy Land Foundation for Relief and Development v. Ashcroft, 219 F.Supp.2d 57, 79 (D.D.C.2002).
In upholding the government’s action in those cases, the courts applied the standard for identifying a taking under the Takings Clause of the Fifth Amendment, rather than the Soldal standard for a Fourth Amendment seizure. In Holy Land, supra, 219 F.Supp.2d at 79, the court’s analysis centered on whether an OFAC asset-blocking procedure is a permanent forfeiture or causes title to pass to the government. Id.
As support for its Takings Clause approach, the court In Holy Land, citing Tran Qui Than v. Regan, 658 F.2d 1296, 1301 (9th Cir.1981), IPT Co. v. U.S. Dept. of Treasury, 1994 WL 613371, at *5–6 (S.D.N.Y.), and Can v. U.S., 820 F.Supp. 106, 109 (S.D.N.Y.1993), stated that, because asset blocking does not ‘‘vest’’ title in the government, it is not a ‘‘forfeiture.’’ 219 F.Supp.2d at 79. None of the cases cited by Holy Land involves, however, a Fourth Amendment claim.

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Likewise, in Holy Land, the court cited Cooperativa Multiactiva de Empleados de Distribuidores de Drogas v. Newcomb, Civ. No. 98–0949, slip op. at 13–14 (D.D.C. Mar. 29, 1999), for the statement that ‘‘blocking bars transactions but does not confiscate property and is not tantamount to a forfeiture.’’ Id. Plaintiffs in Cooperativa Multiactiva, however, raised no Fourth Amendment challenge to the blocking notice. Id. at 4. In Cooperativa Multiactiva, the court discussed questions of title and forfeiture to determine whether a blocking notice was a ‘‘fine’’ and compliance with the federal forfeiture statute, not to determine whether it was a ‘‘seizure.’’ Id. at 21–22.
Finally, in Holy Land, the court cited D.C. Precision Inc. v. U.S., 73 F.Supp.2d 338, 343 n. 1 (S.D.N.Y.1999), for the proposition that ‘‘assets blocked by the government are not seized.’’ Id. Despite the use of the word ‘‘seized,’’ the cited passage in D.C. Precision refers to a Takings Clause claim. Id. Plaintiffs did not raise a Fourth Amendment claim in D.C. Precision. Id.
In contrast to Holy Land and related cases, the court in Al–Haramain Islamic Foundation, Inc. v. U.S. Dept. of Treasury, 585 F.Supp.2d 1233, 1263 (D.Or. 2008), concluded that OFAC asset-blocking is a seizure subject to Fourth Amendment analysis. Reliance on the Takings Clause was inappropriate, the court stated, because ‘‘[t]he Fourth Amendment imposes a lower threshold than does the Fifth Amendment.’’ Id. at 1262. A blocking order, the court stated, would be a taking only ‘‘if it resulted in an appropriation of property for the government’s use’’ or if the government’s actions eliminated ‘‘all economically valuable use of the property.’’ Id.
A Fourth Amendment seizure, in contrast, does not result in passage of title to the government or even necessarily permanent deprivation. A seizure affects a

possessory interest: Id. at 1263. A Fourth Amendment seizure may often lead to permanent deprivation of the property ‘‘taken’’ by government officers, but that is not always so. Indeed, Fed.R.Crim.P. 41(g) provides a means for seeking return of seized property.
[4] Viewing the consequences of a blocking order in a Fourth Amendment light, the court in Al Haramain stated that because ‘‘[e]ven a temporary deprivation of property’’ constitutes a seizure, an OFAC blocking action affects Fourth Amendment rights. Id. If merely ‘‘holding luggage for 90 minutes’’ constitutes a seizure, then surely placing an indefinite freeze on all an entity’s assets is as well. Id.
This conclusion is not only reinforced, but, indeed, made irrefutable on consideration of the fact that the very purpose of an OFAC blocking action is to ‘‘depriv[e] the designated person of the benefit of the property, including services, that might otherwise be used to further ends that conflict with U.S. interests.’’ Al Haramain, supra, 585 F.Supp.2d at 1263. An OFAC block interferes with possessory rights, and is, in Fourth Amendment terms a seizure.
ii. Whether the History of the IEEPA, TWEA and the Fourth Amendment Justify Excluding OFAC Blocking Actions from Fourth Amendment Scrutiny
The government offers two arguments as to why I should follow the decision in Holy Land and withhold Fourth Amendment scrutiny from a block pending investigation. First, the government argues that the Supreme Court historically has never applied the Fourth Amendment to imposition of economic sanctions under the TWEA or the IEEPA. Therefore, the government contends, I should not do so in this case.

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Second, the government urges that deference to the executive’s unique role in foreign affairs should override any judicial impulse to invoke the Fourth Amendment. The government bases this argument on the history of TWEA and IEEPA economic blocking actions.
Neither argument offers a compelling reason for foregoing Fourth Amendment analysis, much less for departing from the Supreme Court’s definition of ‘‘seizure’’ in Soldal.
Looking to history for support for its first contention, the government states, ‘‘[i]n the nearly 100 years since the TWEA was passed, no Court has held that the executive must obtain a warrant to conduct an economic blocking authorized by either TWEA or IEEPA.’’ [Doc. 36, at 63]. To undertake a Fourth Amendment analysis, the government claims, would be to disregard a ‘‘systematic, unbroken, executive practice, long pursued to the knowledge of Congress [and the courts] and never before questioned.’’ Id.
For support, the government cites several cases in which the Supreme Court, in the government’s view, has consistently not subjected blocking actions to Fourth Amendment. See Regan v. Wald, 468 U.S. 222, 235, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984) (upholding restrictions on United States citizen travel to Cuba under the TWEA); Dames & Moore v. Regan, 453 U.S. 654, 654, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981) (IEEPA authorizes the president to nullify attachments against property of the Iranian government and to transfer Iranian assets); Orvis v. Brownell, 345 U.S. 183, 73 S.Ct. 596, 97 L.Ed. 938 (1953) (executive order blocking assets of Japanese nationals under TWEA prevents attachment by creditor of Japanese nationals); Propper v. Clark, 337 U.S. 472, 69 S.Ct. 1333, 93 L.Ed. 1480 (1949) (upholding freeze on Austrian property under the

TWEA, despite inconvenience freeze caused to American citizens).
The government accurately depicts these cases and describes their results. What is missing, though, is acknowledgment that in those cases none of the government’s adversaries asserted a Fourth Amendment interest. Like lower courts, see U.S. v. Collier, 246 Fed.Appx. 321, 334–335 (6th Cir.2007) (unpublished disposition) (failing sua sponte to consider Fourth Amendment issues not error); Hartmann v. Prudential Ins. Co. of America, 9 F.3d 1207, 1214 (7th Cir.1993) (‘‘Our system TTT is not geared to having judges take over the functions of lawyers, even when the result would be to rescue clients from their lawyers’ mistakes’’), the Supreme Court routinely does not consider issues not raised by the parties. Absence of discussion of the Fourth Amendment in the cases cited by the government says nothing about how a Fourth Amendment analysis should come out here.
Failure of plaintiffs in the those cases probably did not arise from lawyerly oversight: the economic sanctions targeted foreign governments, and neither foreign governments nor non-resident foreign nationals enjoy Fourth Amendment protection. In U.S. v. Verdugo–Urquidez, 494 U.S. 259, 265, 110 S.Ct. 1056, 108 L.Ed.2d 222 (1990), the Supreme Court held that the Fourth Amendment does not apply to search by American authorities of the Mexican residence of a Mexican citizen and resident. The Court, on examining the text of the Amendment, concluded that its central motivation was to ‘‘protect the people of the United States against arbitrary action by their own government.’’ Id. Thus, the Fourth Amendment, the Court stated, does not protect aliens outside United States territory, nor does it protect foreign governments. Id.

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KindHearts’ situation differs strikingly and significantly from that of the foreign governments and foreign assets at issue in the TWEA and IEEPA cases on which the government relies.7 KindHearts is an American corporation based in Toledo, Ohio. Its assets, presumably, came from persons resident in this country. Those assets were in this country when the government seized them. This case does not involve a nation-targeted embargo.
KindHearts is indisputably one of ‘‘the people’’ protected by the Fourth Amendment. If the Constitution affords KindHearts no protection from unreasonable searches and seizures, whom among ‘‘the people’’ does it protect, and who among the people can be certain of its protection?
The government’s argument, moreover, ignores compelling parallels between the instant case and the colonial-era activities inspiring the Founders to include the Fourth Amendment in our fundamental charter of liberties. Indiscriminate customs searches, unregulated by judicial approbation or oversight, were the ‘‘first inducement’’ to American attitudes against such promiscuous searches and seizures, William J. Cuddihy, The Fourth Amendment: Origins and Original Meaning, 253 (2009). Despised writs of assistance allowing customs officials to employ unfettered discretion in their search for and seizure of smuggled goods and contraband were a ‘‘major cause of the Revolution.’’ Tracy Maclin, The Complexity of the Fourth Amendment: A Historical Review, 77 B.U.L.R. 925, 945 (1997); see also Nelson B. Lasson, The History & Development of

the Fourth Amendment to the U.S. Constitution, 51 (1937).
In the late 1750s and early 1760s, a controversy erupted in the Massachusetts Bay Colony over gubernatorial warrants and writs of assistance to enforce customs laws. Great Britain, embroiled from 1754– 1763 in the Seven Years’ War, enacted customs laws proscribing American commerce with Spanish and French colonies. Great Britain also implemented restrictive trade relationships between itself and the North American colonies. Those laws favored British interests at the expense of colonial merchants. Lasson, supra, at 52; Cuddihy, supra, at 378–380. Evasion of those laws and restriction—smuggling— became more than just a colonial pastime: for many American merchants it was the way of life. It was, as well, often of benefit to Britain’s enemies commercially. Lasson, supra, at 52.
In response to this unacceptable situation, Governor Shirley of Massachusetts issued warrants giving customs officials authority forcibly to enter houses and other buildings, and, once inside, to exercise unfettered discretion to search for and seize contraband. Maclin, supra, 77 B.U.L.R. at 945; Cuddihy, supra, at 378. Public reaction to this exercise of extreme executive authority caused the Governor to require customs officers, before they could conduct such searches, to obtain Writs of Assistance from Crown judges. Maclin, supra, 77 B.U.L.R. at 945.
Unlike the search warrants with which every American judge, prosecutor and defense attorney is now familiar, colonial

7. In Dames & Moore, Wald and Propper, the government blocked assets of foreign governments. Its blocking actions affected American citizens, but only to the extent that they conducted business transactions involving the property of foreign governments and nationals. Because the targets of those sanctions were not clearly among ‘‘the people’’ whom

the Fourth Amendment protects, it is unsurprising that the parties did not bring Fourth Amendment claims. See Al–Aqeel v. Paulson, 568 F.Supp.2d 64, 70–71 (D.D.C.2008) (concluding that Saudi Arabian citizen subject to OFAC asset seizure may not bring a Fourth Amendment claim because claimant alleged interference with overseas assets only).

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Writ of Assistance were ‘‘a continuous license and authority’’ valid for the ‘‘whole lifetime of a reigning sovereign TTT empower[ing] the officer his deputies and servants to search, at their will, wherever they suspected uncustomed goods to be, and to break open any receptacle or package falling under their suspecting eye.’’ Id. The judges of the Superior Court of Judicature who issued Writs of Assistance lacked power to refuse to issue the writs or to review specific searches or seizures. Maclin, supra, 77 B.U.L.R at 946; Cuddihy, supra, at 379.
When King George II died in 1760, all previously-issued writs expired. Customs officers sought new writs. Id. at 380–381. A merchants’ association, The Society for Promoting Trade and Commerce Within the Province, retained James Otis Jr. to challenge the reissuance. Id. at 380. This led to the decision in Paxton’s Case. Culhuddy, supra, at 380. That case ‘‘intensified public antipathy to the writs of assistance’’ and triggered a flood of public commentary on search and seizure. Id. at 395.
Challenging Writs of Assistance, Otis and other critics delineated and condemned the abuses left in their wake. The Writs, as a commentator in the Boston Gazette wrote, allowed writ-holders to ‘‘break open doors, trunks, chests, and boxes—alms houses, brideswells, jails or churches—never mind a dwelling house’’— this listing making clear that no premises were safe. Id. at 396. Another commentator feared that writ-holders would look unchecked ‘‘wherever he shall PLEASE to suspect uncustom’d goods are lodg’d.’’ Id.
Despite these concerns and objections and Otis’s arguments, the court re-issued the Writs of Assistance. Id. at 395.
Though unsuccessful, Otis’s arguments were the ‘‘first recorded declaration’’ of the Fourth Amendment’s requirement of a specific warrant. Id. at 382. Others in

England and the colonies had criticized the writs of assistance, general warrants, and other forms of indiscriminate search and seizure. Otis first contended that specific warrants—in Fourth Amendment terms, warrants ‘‘particularly describing the place to be searched and things to be seized’’— as alone appropriate if the sanctity one’s home and security of one’s possessions were to be assured under, as Otis argued, the ‘‘British Constitution, English common law, natural law, and the higher law.’’ Id. at 387.
As with IEEPA and TWEA, the initial impetus for executive action at the outset of the era leading to Paxton’s Case was to deprive the enemies of economic benefits: restricting trade with the enemy was the purpose of both Governor Shirley’s wartime writs to customs officers and the TWEA. In time, these purposes, and the authority by which government sought to accomplish them led to a practice of farreaching and open-ended searches for and seizures of private property.
Unlike the system under which OFAC has operated thus far, the colonial system came to involve judges in the issuance of the writs. But their participation did little to control the duration of the authority to conduct searches, and did not encompass judicial involvement or oversight during implementation of that authority.
The centrality of indiscriminate customs searches and seizures to the development, purposes and meaning of the Fourth Amendment is of special relevance to this case. Like James Otis, the attorneys for KindHearts claim for their client ‘‘the right TTT to be secure in their TTT papers and effects.’’ Also like Otis, they argue that how the government has been exercising its authority to regulate commercial affairs can violate that right and destroy that security.

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To find the Fourth Amendment inapplicable to OFAC blocking actions would disregard the Amendment’s history and its role as a bulwark against the abuses and excesses of unchecked governmental power.
iii. Whether Deference to the Executive Regarding Foreign Affairs Requires Excluding OFAC Blocking Actions From Forth Amendment Scrutiny
The government’s second argument is that deference to the executive should cause me to refrain from viewing its conduct through the lens of the Fourth Amendment. Courts, in the government’s view, ought not involve themselves with ‘‘the exercise of the executive’s most uniquely reserved powers—conducting foreign affairs and protecting national security.’’ [Doc. 36, at 36]. Instead, I should heed Justice Jackson’s statement in his concurring opinion in Youngstown Sheet & Tube v. Sawyer, 343 U.S. 579, 635–36, 72 S.Ct. 863, 96 L.Ed. 1153 (1952), that ‘‘A seizure executed by the President pursuant to an Act of Congress would be supported by the strongest presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily on any who might attack it.’’ 8
The defendants claim that this means that the President’s powers ‘‘can indeed be so broad and uniquely reserved to the president that questions of Fourth Amendment applicability do not come into play.’’ [Doc. 73, at 34]. Defendants also argue that subjecting OFAC’s actions to Fourth Amendment strictures is improper because when the President ‘‘execute[s] seizures with explicit authorization by congress, the President’s ‘‘authority [is] at its maximum’’.’’ [Doc. 73, at 35]. The government supports this assertion with a further quotation from Justice Jackson:

In the practical working of our government we have already evolved a technique within the framework of the Constitution by which normal executive powers may be considerably expanded to meet an emergency. Congress may and has granted extraordinary authorities which lie dormant in normal times but may be called into play by the Executive in war or upon proclamation of a national emergency.
Youngstown Sheet & Tube, supra, 343 U.S. at 652, 72 S.Ct. 863.
Defendants also argue that U.S. v. Curtiss–Wright, 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255 (1936), stands for the principle that the ‘‘strict limitation’’ on federal powers over ‘‘internal affairs’’ does not apply in the realm of ‘‘external affairs.’’ [Doc. 73, at 35].
The government’s reliance on the propositions expressed by Justice Jackson and in Curtiss–Wright conflates two discrete questions about the limitations of federal executive power. The first question in evaluating the validity of executive action is whether any of the recognized sources of executive authority—Article II, powers inherent in national sovereignty or a valid delegation of authority from Congress— affirmatively empower the executive to take action, such as a block pending investigation. A second, separate question is whether a the manner in which the executive has exercised it authority in a specific instance violates any of the restrictions on federal authority protecting individual liberties.
In Youngstown Sheet & Tube and Curtiss–Wright the Court dealt exclusively with the first question. In this case, however, the first question is not at issue because the parties do not dispute that the

8. Justice Jackson joined in the judgment of the majority that President Truman lacked

constitutional authority to seize a steel company’s assets via Executive Order.

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executive has the general power to block pending investigation. The issue here— whether, in this instance, OFAC has exercised its authority in violation of the Fourth Amendment—involves the second question.
When Justice Jackson in Youngstown Sheet & Tube described the President’s ‘‘authority at its maximum’’ and the need for ‘‘the widest latitude of judicial interpretation,’’ he was describing the President’s power to act vis-a-vis Congress, not restrictions on presidential power imposed by the Bill of Rights. See 343 U.S. at 635, 72 S.Ct. 863. This is apparent from the context of the quotation, which is that when Congress expressly authorizes the action, the President possesses all his authority ‘‘in his own right plus all that Congress may delegate.’’ Id.
Justice Jackson also stated that if a court should invalidate presidential action that Congress has expressly authorized, ‘‘it usually means that the Federal Government as an undivided whole lacks power.’’ Id. Legislation cannot authorize the President to ignore the Bill of Rights. Under the Fourth Amendment, the federal government ‘‘as an undivided whole ’’ lacks entirely the power to conduct unreasonable searches and seizures. Id.
That the Court in Youngstown Sheet & Tube refers to the President’s actions as a ‘‘seizure’’ in no way suggests that that case involved a Fourth Amendment search or seizure. The Steelworkers Union had announced its members would strike after unsuccessful labor-management negotiations. Id. at 864. On the eve of the strike, President Truman ordered the Secretary of Commerce to assume control of the steel mills and keep them running. Id. at 865.
The President’s actions, and the government’s operation of the mills temporarily did not deprive the shareholders of any of the their property interests in the compa-

ny. The company did not claim that President Truman had engaged in an unreasonable seizure under the Fourth Amendment. The issue, rather, was whether the President had the authority to adopt the ‘‘technique of seizure’’ as a ‘‘method of solving labor disputes,’’ even though Congress had expressly declined to incorporate this technique in the Taft– Hartley Act. Id. at 866. The Court noted that Congress’s power to authorize this method was ‘‘beyond question’’ because Congress may ‘‘authorize the taking of private property for public use.’’ Id. at 867. In view of the absence in Youngstown Sheet & Tube of citation to, argument about, discussion of and adjudication on the basis of Fourth Amendment principles and doctrine, the decision in that case, not the Fourth Amendment, is inapplicable here.
Similarly, the Court’s opinion in Curtiss–Wright likewise addressed whether the President possesses inherent, unenumerated powers over foreign affairs—not whether such powers were subject to Bill of Rights limitations. 299 U.S. at 319, 57 S.Ct. 216.
In Curtiss–Wright, an arms manufacturer was charged with conspiring to sell arms to Bolivia in violation of a Joint Resolution of Congress authorizing the President to criminalize such arms sales and a Presidential proclamation issued under that authority. Id. at 312–313, 57 S.Ct. 216. The Court rejected the company’s challenge to Congress’s delegation of authority to the President. Id. at 315–316, 333, 57 S.Ct. 216. The federal government, the Court held, has and can, with regard to the nation’s foreign affairs, exercise the powers inherent in national sovereignty. Such exercise did not violate the rights inuring to the states. Id. at 316, 57 S.Ct. 216.

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Further, because ‘‘[t]he President is the sole organ of the nation in its external relations, and its sole representative with foreign nations,’’ he may exercise powers ‘‘in the field of international relations’’ without needing ‘‘a basis for its exercise in an act of Congress.’’ Id. at 220–221.
The Court’s opinion in Curtiss–Wright makes indisputably clear fundamental constitutional principles of federalism and separation of powers endow the President with extensive, and generally unilateral authority over our foreign affairs, especially with regard to our relations with other countries. Though the Court upheld the exercise of that authority against an American company and others engaged in international commerce, it did not address, much less declare, that such authority, if it impinged on freedoms guaranteed under the Bill of Rights, was in all circumstances and for all times unrestricted and uncontrollable.
Contrary to defendants’ claims, courts have held that the executive’s domestic actions—even when taken in the name of national security—must comport with the Fourth Amendment. See, e.g. U.S. v. U.S. Dist. Court, 407 U.S. 297, 320, 92 S.Ct. 2125, 32 L.Ed.2d 752 (1972) (‘‘the President’s domestic security role TTT must be exercised in a manner compatible with the Fourth Amendment’’); Coolidge v. New Hampshire, 403 U.S. 443, 461, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971) (national security ‘‘is not a talisman in whose presence the Fourth Amendment fades away and disappears.’’); U.S. v. Bin Laden, 126 F.Supp.2d 264, 273 (S.D.N.Y.2000) (‘‘even in the exercise of his foreign affairs power, the President is constrained by other provisions of the Constitution.’’).
OFAC’s blocking action against KindHearts, therefore, is, despite the deference generally due to presidential acts relating to our foreign relations and affairs, subject to some degree of Fourth Amendment

scrutiny. This case raises questions about the extent and consequences of such scrutiny.
B. Whether OFAC Must Have a Warrant and Probable Cause for the Seizure to be Reasonable Under the Fourth Amendment
[5] The next issue is whether OFAC satisfied the requirements of the Fourth Amendment when it blocked KindHearts’ assets pending investigation. Generally, the Fourth Amendment permits seizures only on the basis of probable cause and a judicial warrant listing, with particularity, the item or items to be seized. Place, supra, 462 U.S. at 701, 103 S.Ct. 2637. The government contends, inter alia, that its actions were lawful, and could be undertaken on the basis of reasonable suspicion, rather than probable cause to believe that KindHearts engaged in acts proscribed by the IEEPA and E.O. 13224.
i. Generally, the Fourth Amendment Requires a Warrant and Probable Cause
Defendants argue that this court should jettison the probable cause and warrant requirements in favor of an open-ending balancing of interests. Defendants contend that courts are free to apply an indeterminate ‘‘reasonableness’’ inquiry in light of the doctrine that ‘‘the Fourth Amendment does not proscribe all searches and seizures, but only those that are unreasonable.’’ Skinner v. Railway Labor Executives’ Ass’n, 489 U.S. 602, 619, 109 S.Ct. 1402, 103 L.Ed.2d 639 (1989).
[6] The defendants base their argument on the fact that the Fourth Amendment contains two textually distinct clauses, the reasonableness clause barring ‘‘unreasonable searches and seizure’’ and a warrant clause stating that ‘‘no Warrants shall issue, but upon probable cause.’’ U.S. Const. amend. IV. Reason-

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ableness is the ultimate standard under the Fourth Amendment. Pennsylvania v. Mimms, 434 U.S. 106, 108–109, 98 S.Ct. 330, 54 L.Ed.2d 331 (1977) (‘‘[R]easonableness in all the circumstances of the particular governmental invasion of a citizen’s personal security’’ is the ‘‘touchstone’’ of Fourth Amendment analysis); Soldal, supra, 506 U.S. at 61–62, 113 S.Ct. 538. This does not, however, mean that courts always are free to conduct open-ended balancing of interests whenever the government has seized property.
[7] On the contrary, searches and seizures are usually ‘‘reasonable’’ only when conducted with a judicial warrant supported by probable cause. Place, supra, 462 U.S. at 701, 103 S.Ct. 2637. The reasonableness clause under the Fourth Amendment ‘‘derives content and meaning through reference to the warrant clause.’’ U.S. Dist. Court, supra, 407 U.S. at 309– 310, 92 S.Ct. 2125. Though the ultimate inquiry is reasonableness, ‘‘the Amendment does not leave the reasonableness of most seizures to the judgment of courts or government officers: the Framers of the Amendment balanced the interests involved and decided that a seizure is reasonable only if supported by a judicial warrant based on probable cause.’’ Place, supra, 462 U.S. at 722, 103 S.Ct. 2637 (Blackmun, J. concurring). Under most circumstances searches and seizures conducted without a warrant are ‘‘per se unreasonable under the Fourth Amendment—subject only to a few specifically established and well-delineated exceptions.’’ Katz v. U.S., 389 U.S. 347, 357, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). Thus, as stated in Place, supra, 462 U.S. at 701, 103 S.Ct. 2637, ‘‘In the ordinary case, the Court has viewed a seizure of personal property as per se unreasonable within the meaning of the Fourth Amendment unless it is accomplished pursuant to a judicial warrant issued upon probable cause and

particularly describing the items to be seized.’’
[8, 9] Two recognized exceptions to the warrant requirement might, however, apply in this case. First, ‘‘special needs’’ warrantless searches and seizures need only be reasonable under all the circumstances; no warrant or probable cause is required. See, e.g., Griffin v. Wisconsin, 483 U.S. 868, 873, 107 S.Ct. 3164, 97 L.Ed.2d 709 (1987) (upholding warrantless, suspicionless searches of probationers’ homes); Illinois v. Lidster, 540 U.S. 419, 426, 124 S.Ct. 885, 157 L.Ed.2d 843 (2004) (upholding warrantless, suspicionless stops at a roadblock to gather information about a hit-and-run accident). Second, if exigent circumstances exist, the warrant requirement, but not the requirement of probable cause, may be excused. See, e.g., U.S. v. Johnson, 22 F.3d 674, 680 (6th Cir.1994) (describing general types of exigencies).
ii. Whether the Block is a Special Needs Seizure
[10] Special needs searches and seizures share at least three basic characteristics. First, they must serve a purpose above and beyond normal criminal law enforcement. See Ferguson v. City of Charleston, 532 U.S. 67, 81–86, 121 S.Ct. 1281, 149 L.Ed.2d 205 (2001); City of Indianapolis v. Edmond, 531 U.S. 32, 41–47, 121 S.Ct. 447, 148 L.Ed.2d 333 (2000). Second, circumstances must make ‘‘the warrant and probable cause requirement impracticable.’’ See Griffin, supra, 483 U.S. at 873, 107 S.Ct. 3164. Third, the method of search or seizure must have built-in limits, such as a confined geographic scope or regular, suspicionless application, that restrict executive discretion and ensure that all citizens know the circumstances under which they are subject to a special needs search or seizure. See

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New York v. Burger, 482 U.S. 691, 702–03, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987).
Administrative searches of closely-regulated industries are one type of special needs search. Officials responsible for administrative searches need engage in no prior assessment of behavior. The lack of individualized probable cause is deemed does not violate the Fourth Amendment where the search relates to a closely regulated endeavor or enterprise. Anyone engaging in such activity can reasonably expect inspection.
The Supreme Court upheld such searches In Burger, id. at 702, 107 S.Ct. 2636, the Court upheld suspicionless, warrantless inspection of plaintiff’s automobile chop shop. The Court noted that chop shops are closely regulated, reducing plaintiff’s expectation of privacy and putting their operators on notice that inspections may occur. Id. The Court also concluded that the state’s inspection program was sufficiently regular and certain because it ‘‘carefully limited [inspections] in time, place, and scope.’’ Id. at 702–03, 107 S.Ct. 2636. These built-in limits on executive discretion provided ‘‘a constitutionally adequate substitute for a warrant’’ and gave the owner with notice of when, where and to what extent he was subject to being searched. Id. In concluding that the inspection program was reasonable, the court noted that there was a ‘‘substantial government interest’’ behind the regulatory regime and that warrantless, suspicionless inspections were ‘‘necessary to further the regulatory regime.’’ Id. Accord, e.g., Donovan v. Dewey, 452 U.S. 594, 600, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1981) (warrant constitutionally required when warrantless searches ‘‘are necessary to further a regulatory scheme and the TTT regulatory presence is sufficiently comprehensive and defined’’ that owner knows property is ‘‘subject to periodic inspections undertaken for specific purposes.’’).

Searches and seizures at roadblock check points are another type of warrantless special needs search that must only be ‘‘reasonable’’ under all the circumstances to comply with the Fourth Amendment. In Michigan Dept. of State Police v. Sitz, 496 U.S. 444, 455, 110 S.Ct. 2481, 110 L.Ed.2d 412 (1990), the Court upheld stops at a checkpoint at which police officers detained drivers briefly and tested them for sobriety. The officers stopped every vehicle and checked every driver for intoxication. Id. at 447, 110 S.Ct. 2481. On average, the stops lasted twenty-five seconds. Id. at 448, 110 S.Ct. 2481. See also Lidster, supra, 540 U.S. at 426, 124 S.Ct. 885 (extending Sitz to checkpoints designed to gather information after a nearby hit-and-run accident). Police may not, however, set up roadblocks to detect ordinary criminal wrongdoing. Edmond, supra, 531 U.S. at 37, 121 S.Ct. 447 (drug interdiction roadblock unconstitutional because police may not conduct regular suspicionless searches and seizures solely to enforce criminal laws).
A third type of special needs search and seizure occurs at border crossings. In U.S. v. Martinez–Fuerte, 428 U.S. 543, 551–554, 96 S.Ct. 3074, 49 L.Ed.2d 1116 (1976), the Court applied a balancing test to uphold a Border Patrol traffic-checking program on highways within one hundred miles of the Mexican border. In U.S. v. Boumelhem, 339 F.3d 414, 421 (6th Cir. 2003), the Sixth Circuit upheld a warrantless and suspicionless search of a railroad shipping container from abroad, noting the ‘‘power of the sovereign to protect itself by stopping and examining persons and property crossing into this country.’’ In so holding, the court noted that warrantless entry and exit searches date back to the time of the Framers. Id. at 422 n. 5; see also U.S. v. Montoya de Hernandez, 473 U.S. 531, 538, 105 S.Ct. 3304, 87 L.Ed.2d 381 (1985) (‘‘Routine searches of the per-

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sons and effects of entrants are not subject to any requirement of reasonable suspicion, probable cause, or warrant, and firstclass mail may be opened without a warrant on less than probable cause. Automotive travelers may be stopped at fixed checkpoints near the border without individualized suspicion’’). Border searches are restricted geographically to regions surrounding the border because individuals have a lesser expectation of privacy at the border than in the interior. Id. at 539, 105 S.Ct. 3304.
[11] OFAC’s exercise of its blocking power lacks the characteristics that excuse the warrant and probable cause requirements as to administrative, roadblocks, and border searches and seizures. Most importantly, OFAC’s blocking power entails no built-in limitations curtailing executive discretion and putting individuals on notice that they are subject to blocking.
Traffic checkpoints and border searches are focused geographically, as they occur only at he checkpoint or near the national border. In cases of administrative searches, the government may only search discrete categories of individuals—such as closely-regulated businesses—and even then the regulatory regime must be ‘‘carefully limited in time, place and scope.’’ Burger, supra, 482 U.S. at 702–03, 107 S.Ct. 2636.
Second, in method, OFAC’s blocking power has more in common with ordinary law enforcement activity than with any of the activities considered in the special needs cases. OFAC does not block pending investigation every entity sending money overseas: it only blocks those it suspects have violated the law. In this case, OFAC targeted KindHearts as a potential violator and conducted a preliminary investigation before imposing the block. It necessarily had gathered information in advance that it considered suffi-

cient to justify seizure of KindHearts’ assets.
No such prior determination occurs with a border crossing or checkpoint. Everyone passing through is stopped, detained and examined.
Thus, unlike traditional law enforcement investigatory activities, special needs searches expose everyone within their scope or zone of their operation to a cursory search or brief seizure in the interest of public safety and welfare or border integrity.
OFAC’s blocking power, which focuses on single entities, and does so on the basis of some suspicion, more closely resembles the modus vivendi and modus operandi of traditional law enforcement investigative activity than warrantless searches allowed under the special needs exception. This is true, even though, at this point, OFAC’s actions may be deemed ‘‘civil,’’ but actions violating E.O. 13224 may also become the basis for criminal sanctions. Investigations with the potential for criminal prosecution have historically triggered the warrant and probable cause requirements. See Edmond, supra, 531 U.S. at 37–38, 121 S.Ct. 447.
Finally, for the special needs exception to apply, both the probable cause and warrant requirements must categorically be impracticable in light of the government’s purpose. Griffin, supra, 483 U.S. at 873, 107 S.Ct. 3164. The government provides no explanation as to why the probable cause warrant requirements were impracticable in this case. OFAC has shown no cause to believe or conclude that requiring it to develop probable cause and submit such cause to judicial evaluation would have impaired its enforcement efforts and ability otherwise to act in this case.
In conclusion, OFAC blocking actions do not fit within the special needs exception

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to the warrant and probable cause requirements.
iii. Whether Exigency Excuses the Warrant Requirement
Even if an OFAC blocking action is not a special needs search, a showing of exigent circumstances could eliminate the need for a warrant. Judicially endorsed exigent circumstances are, however, ‘‘few in number and carefully delineated.’’ U.S. Dist. Court, supra, 407 U.S. at 318, 92 S.Ct. 2125.
The Sixth Circuit has identified four general categories of exigency justifying warrantless searches: ‘‘(1) hot pursuit of a fleeing felon, (2) imminent destruction of evidence, (3)[the] need to prevent a suspect’s escape, and (4) a risk of danger to police or others.’’ Johnson, supra, 22 F.3d at 680. None of these situations exists here except, possibly, the need to avoid destruction of evidence (or, in this case, dissipation of assets, which I discuss below). Thus, this case does not fit into a standard exigent circumstances exception to the warrant requirement.
[12] That this is so does not answer the government’s claim of exigency in toto. A court may still find that exigent circumstances existed on consideration of: ‘‘(1) whether immediate government action was required; (2) whether the governmental interest was sufficiently compelling to justify a warrantless intrusion; (3) whether the citizens’ expectation of privacy was diminished in some way.’’ U.S. v. Rohrig, 98 F.3d 1506, 1521 (6th Cir.1996).

[13] For ‘‘immediate government action’’ to be necessary, law enforcement must have an objective, factual basis to believe that ‘‘the loss or destruction of evidence is imminent.’’ U.S. v. Sangineto– Miranda, 859 F.2d 1501, 1512 (6th Cir. 1988). For a warrantless search to be sustained, a ‘‘person of reasonable caution’’ must be able to conclude that ‘‘evidence of a federal crime would probably be found on the premises and also that such evidence would probably be destroyed within the time necessary to obtain a search warrant.’’ Id.
Law enforcement, however, may not merely assume that a suspect will destroy or dispose of evidence or contraband simply because he is aware the government suspects him of an offense. Thus, in Vale v. Louisiana, 399 U.S. 30, 35, 90 S.Ct. 1969, 26 L.Ed.2d 409 (1970), the Court held that an arrest outside a residence does not justify warrantless search of arrestee’s house. Officers, the Court stated, could not conduct such search simply on the basis that ‘‘time is of the essence’’ and ‘‘officers never know whether there is anyone on the premises to be searched who could very easily destroy the evidence.’’ Id. at 34, 90 S.Ct. 1969.9
The gravity of the underlying offense is also a consideration. Rohrig, supra, 98 F.3d at 1516. In Welsh v. Wisconsin, 466 U.S. 740, 742–743, 104 S.Ct. 2091, 80 L.Ed.2d 732 (1984), the Court rejected the contention that exigency authorized warrantless entry into a driver’s home to arrest him after he had left the scene of an

9. In Vale the Court addressed the contention that because narcotics are ‘‘easily removed, hidden, or destroyed’’ it would be unreasonable to require officers to secure a warrant before entering a home following a suspect’s arrest outside the residence, which could have alerted persons inside the home and led to the loss of evidence. Id. at 34, 90 S.Ct. 1969. The Court rejected this reasoning, stat-

ing that the government bears the burden of showing that an ‘‘exceptional situation’’ justified the warrantless entry; speculation is not enough. Id. In this case there is no basis in the record for concluding that KindHearts was aware that the government was moving towards issuance of a blocking notice before it issued the notice.

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accident. The officers’ desire to ascertain the suspect’s blood-alcohol level before dissipation was insufficient to justify entry without a warrant. Id. In so holding, the Court noted that police were investigating the suspect for a ‘‘nonjailable traffic offense that constituted only a civil violation under the applicable state law.’’ Id. at 746 n. 6, 104 S.Ct. 2091.
[14] In this case, the Rohrig factors do not weigh in favor of an absolute exception to the warrant requirement. First, OFAC’s own actions belie its claim that this situation required immediate action, making a prior judicial warrant impracticable. OFAC conducted a preliminary investigation of presently indeterminate duration. That investigation led to the blocking order. Nothing in the record supports any contention that time was of the essence. There is no basis for finding that something clearly, or to a very substantial likelihood, would have been lost by taking the time to prepare the documents for and present them to a judge and receive judicial authority for the seizure.
The second Rohrig factor asks whether the government had a sufficiently compelling interest in swift action to justify a warrantless intrusion. The government has an indisputably important interest in preventing the flow of funds to overseas

terrorist organizations. This is so, even if those organizations, at least for now, are not directly engaged in hostile acts against the United States or its citizens. Among his other Article II powers, the President can conclude that our national interest includes working with other countries to combat terrorism within or adjacent to their borders.
At issue is not, however, the policy or its undoubted importance. At issue, rather, is whether the government has shown that the need for implementing that policy effectively and expeditiously required doing so without judicial authorization. The importance of a particular policy or program does not, without more, excuse the warrant requirement.
The exigent circumstances exception is bottomed on need for immediate action to avoid loss or destruction of evidence. To come within this exception in this case, the government has to show that reasonable grounds existed at the time of the blocking notice to apprehend that KindHearts, unless the block were implemented, was about to dispose of its assets in an unlawful manner.
The government has made no such showing. In this instance the government had time to secure a warrant.10 Thus, the

10. I can anticipate that preparation of an application for a court order authorizing a blocking seizure may be more time-consuming and complex than preparing a complaint for an arrest or an application and affidavit for a conventional search warrant. But the time needed to prepare a blocking application would not appear to be as long as, or longer than the time needed for preparation of a Title III electronic surveillance application. Title III applications and orders are generally employed in the investigation of serious offenses, many of which involve, or potentially involve violence, injury and death. We accept, however, the need to take time to make sure that this intrusive technique is employed cautiously, and only when the government

satisfies Title III’s requirements. The time needed to prepare and approve an application under FISA for presentation to the Foreign Intelligence Surveillance Court likewise probably is extensive. This is so, even though FISA orders are directed at foreign-based terrorist threats against the United States. The exigencies of the circumstances being investigated by electronic surveillance would appear, on balance, usually to be greater than those present when a domestic charitable organization is suspected of diverting, or permitting the diversion of a portion of its assets to terrorist organizations overseas. Nonetheless, we accept, and properly so, the delays inherent in obtaining Title III and FISA orders.

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second Rohrig factor militates in favor of requiring a warrant.
The third factor concerns the citizen’s interest. KindHearts had a strong interest in accessing its funds, remaining in operation and disbursing its funds, to the extent it was doing so, lawfully.
The government has not shown that the need to act without a warrant was so compelling that it could do so lawfully under the exigent circumstances exception to the warrant requirement.
iv. Alteration of Probable Cause and Warrant Requirements
The government argues that its reliance on classified information to determine whether blocking is appropriate justifies bypassing the probable cause requirement and prior judicial review. It also argues that the nature of its investigation—namely, of an organization alleged to be providing financial support to overseas terrorists—precludes judicial involvement and oversight under the separation of powers doctrine.
These arguments are a variation on similar arguments which the Court rejected in U.S. Dist. Court, supra. There the government argued, much as it does here, that a judicial warrant would ‘‘obstruct the President in the discharge of his constitutional duty to protect domestic security.’’ Id. at 318, 92 S.Ct. 2125. The government also argued that courts lack technical expertise to determine whether surveillance is appropriate, and that disclosure of the necessary information to a magistrate would ‘‘create serious potential dangers to the national security and to the lives of informants and agents.’’ Id. at 319, 92 S.Ct. 2125.
The Court held that these concerns did ‘‘not justify complete exemption of domestic security surveillance from prior judicial scrutiny.’’ Id. at 320, 92 S.Ct. 2125. Complete abnegation of the Fourth Amendment and judicial involvement in

protecting Fourth Amendment interests is likewise not justifiable here. As already discussed, nothing in our Fourth Amendment jurisprudence or constitutional tradition supports complete elimination of the probable cause, prior judicial review and warrant requirements.
To the extent the government argues that its possible reliance on classified information as a basis a blocking order justifies displacement of judicial review, its contentions are not persuasive. District judges increasingly handle classified information under the aegis of the Classified Information Procedures Act (CIPA). 18 U.S.C.App. 3, §§ 1–16. The government has not shown that there is something so unique about blocking of assets in circumstances such as those in this case that would make CIPA inapplicable or functionally inoperable.
The Court in U.S. Dist. Court suggested that Congress might adopt a modified warrant procedure that would both respond to the President’s Article II exclusive responsibility and authority to protect national security from foreign dangers and accommodate Fourth Amendment interests and protections. Id. at 320, 92 S.Ct. 2125. Declining ‘‘to detail the precise standards for domestic security warrants,’’ id. at 323, 92 S.Ct. 2125, the Court expressly stated, however, that some form of ‘‘prior judicial approval’’ was constitutionally required. Id. at 324, 92 S.Ct. 2125.
Here, as well, in view of the effect of implementation of Fourth Amendment protections and processes on the President’s Article II powers, some reformulation of the probable cause requirement may be appropriate. The same may be true with regard to variance from the conventional process for obtaining judicial warrants under the Fourth Amendment and Rule 41 of the Federal Rules of Criminal Procedure.

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I agree, though, with the parties’ request that I not undertake in this case to determine whether such reformulation is appropriate or necessary or, if so, to define its contours. In not undertaking these tasks, I go no further than the Supreme Court in U.S. Dist. Court, in which the Court left to Congress the responsibility for considering and adopting the appropriate structure. Id. at 320, 92 S.Ct. 2125. This, in turn, led to enactment of FISA and creation of the FISC.11
I also note that provision could be made for emergency seizure of assets pending such review when, as and if truly exigent circumstances existed—as they did not in this case, and as is unlikely in other past cases of OFAC blocking orders. In any event, great care would have to be taken to ensure that what should be rare did not become routine.
That has not happened under Title III: warrantless emergency surveillance, though authorized by that statute, 18 U.S.C. § 2518(7), has hardly ever occurred in the forty years since its enactment. But circumstances might possibly arise where the time needed for even ex parte prior judicial review might be so risky that an emergency exception, ‘‘both limited and

tailored reasonably to secure law enforcement needs while protecting privacy interests,’’ Illinois v. McArthur, 531 U.S. 326, 337, 121 S.Ct. 946, 148 L.Ed.2d 838 (2001), would be appropriate.12
C. Fourth Amendment Challenges to the Provisional and Final SDGT Designation
[15] KindHearts also challenges the provisional and prospective final SDGT designations under the Fourth Amendment. This court can review neither challenge at this time. Under the Administrative Procedure Act [APA], 5 U.S.C. § 704, I may review only final agency action. Agency action becomes final when it creates a binding obligation. Bennett v. Spear, 520 U.S. 154, 158, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
[16] Provisional agency action is not final action. Greater Detroit Resource Recovery Auth. v. U.S. E.P.A., 916 F.2d 317, 322 (6th Cir.1990) (holding a letter of intent to hold agency proceedings contemplating revocation of a permit was not final agency action); Den–Mat Corp. v. U.S., Food and Drug Admin., 1992 WL 208962, *4 (D.Md.1992) (‘‘[A] statement by the FDA in a letter of what its position is on

11. FISA contains an alternative probable cause formulation: ‘‘probable cause to believe that TTT the target of the electronic surveillance is a foreign power or an agent of a foreign power’’ and that ‘‘each of the facilities or places at which the electronic surveillance is directed is being used, or is about to be used, by a foreign power or an agent of a foreign power.’’ 50 U.S.C. § 1805(a)(2)(A)(B).
This standard differs from the conventional probable cause requirement not in the level of suspicion, but in what federal agents must suspect. Courts have upheld this modified probable cause standard under the Fourth Amendment. U.S. v. Johnson, 952 F.2d 565, 573 (1st Cir.1991); U.S. v. Pelton, 835 F.2d 1067, 1075 (4th Cir.1987); U.S. v. Badia, 827 F.2d 1458, 1464 (11th Cir.1987). I note,

however, that, at a minimum, the Fourth Amendment requires prior judicial review and approval, based on probable cause sufficient to justify issuance of a blocking order to seize the assets of an American corporation or American citizens. This necessitates government submission of objective and reasonably verifiable information establishing such cause to a neutral and detached judicial officer.
12. In McArthur, officers prevented the defendant from entering his home for two hours until they could obtain a search warrant for marijuana. Id. at 329, 121 S.Ct. 946. Preventing his entry was but a ‘‘brief seizure of the premises’’ and permissible under the Fourth Amendment. Id. at 333, 121 S.Ct. 946. There was, as well, prompt judicial review of probable cause and issuance of a search warrant.

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an issue, along with a threat of enforcement that does not arise to a promise to enforce, is not a final action.’’). The provisional designation is, by definition, not final agency action: this court cannot, therefore, review it. Final designation would be final agency action, but it has yet to occur.
2. Statutory Authorization for Block Pending Investigation
KindHearts argues that the IEEPA does not authorize OFAC’s block on KindHearts’ assets because the IEEPA requires that blocked individuals have a nexus with a nation on which the United States government has imposed economic sanctions. Defendants argue that the IEEPA requires no such nexus and that OFAC may properly block any assets in which any foreign national—not just foreign nations and foreign nationals linked to a sanctioned nation—has an interest.
A. Whether the IEEPA Requires a Nexus With a Sanctioned Nation
The IEEPA authorizes the President to ‘‘investigate, block during the pendency of an investigation, regulate, TTT or prohibit TTT transactions involving TTT any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.’’ 50 U.S.C. § 1702(a)(1)(B).
Two courts have rejected the argument that the IEEPA requires that an entity have a nexus with a sanctioned nation to be blocked. In Al Haramain, supra, 585 F.Supp.2d at 1260, plaintiff argued that a blocking action ‘‘requires a nexus between a sanction against a national and a sanction against its country.’’ Thus, the government could properly sanction a Libyan national, but not a national of a country the United States has never sanctioned. Id.

The court rejected this argument, concluding that ‘‘the term ‘thereof’ simply directs that the ‘national’ must be ‘foreign’ without imposing any other conditions.’’ Id.; see also Humanitarian Law Project v. U.S. Dept. of Treasury, 463 F.Supp.2d 1049, 1072–1073 (C.D.Cal.2006) (rejecting contention that the IEEPA is only a ‘‘tool for nation-to-nation diplomacy’’ and that the power to block individual assets under IEEPA is not merely ‘‘incident to’’ the power to impose sanctions).
These rulings represent the better interpretation of the IEEPA. First, as the court in Al Haramain concluded, there is no textual reason to interpret ‘‘thereof’’ as a limitation; the phrase ‘‘nationals thereof’’ simply means foreign nationals.
Second, the executive has blocked the assets of individuals unaffiliated with sanctions in the past and received Congressional approval. This occurred after President Clinton issued executive orders under the IEEPA blocking the assets of Columbian drug cartels. E.O. 12978 (Oct. 21, 1995). In the legislative findings in the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. § 1901(a)(3), Congress addressed President Clinton’s actions, noting that the President ‘‘successfully applied [the IEEPA] to international narcotics traffickers in Columbia and based on that successful case study, Congress believes similar authorities should be applied worldwide.’’ The findings specifically referenced E.O. 12978. Id. at § 1901(a)(1).Congress amended the IEEPA in 2001 and, though aware of President Clinton’s executive orders, did not limit the IEEPA to be only a tool of nation-to-nation diplomacy.
[17] The IEEPA requires no nexus with a sanctioned nation; it only requires that blocked property be property in which any foreign country or a foreign national ‘‘has any interest.’’ 50 U.S.C. § 1702(a)(1)(B).

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B. Whether a Foreign National Has ‘‘Any Interest’’ in KindHearts’ Assets
Even if the IEEPA mandates no nexus with a sanctioned nation, the statute requires a foreign national to have an ‘‘interest’’ in the corporation’s assets within the meaning of 50 U.S.C. § 1702(a)(1)(B). Id. To satisfy the Fourth Amendment, OFAC thus must show, with regard to an entity’s alleged violation of IEEPA and E.O. 13224, probable cause to believe that a foreign national has an ‘‘interest’’ in the corporation’s assets.13
[18] The IEEPA authorizes blocking based on ‘‘any interest.’’ See 50. U.S.C. § 1702(a)(1)(B); Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F.Supp.2d 57, 67 (D.D.C.2002). Congress has authorized the executive to define the statutory terms of the IEEPA. 50 U.S.C. § 1704. OFAC defines ‘‘interest’’ to mean ‘‘an interest of any nature whatsoever, direct or indirect.’’ 31 C.F.R. § 535.312. In contrast, OFAC defined the terms ‘‘property’’ and ‘‘property interest’’ to refer to an expansive list of legally enforceable rights, including currency, negotiable instruments, ‘‘evidences of title,’’ ‘‘contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future or contingent.’’ 31 C.F.R. §§ 535.311
Courts have endorsed broad interpretations of the phrase ‘‘any interest’’ as used in the IEEPA and TWEA. E.g., Regan v. Wald, 468 U.S. 222, 225–226, 233–34, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984) (the phrase ‘‘any interest’’ must be construed broadly); Consarc Corp. v. Iraqi Ministry, 27 F.3d 695, 701–02 (D.C.Cir.1994) (OFAC may define property interests, subject to judicial review).

The statute does not, therefore, require that a foreign national have a legally enforceable property interest in a target corporation’s assets. A beneficial interest in the entity’s assets may suffice. Global Relief Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir.2002).
To date, courts have considered the definition of ‘‘interest’’ in cases involving OFAC blocking actions against domestic corporations only where: 1) foreign nationals occupy key executive positions or were members of the entity’s board, Global Relief, supra, 315 F.3d at 752–53 (two of the three members of the board were foreign nationals), Al Haramain, supra, 585 F.Supp.2d at 1261 (foreign nationals served as the President and Treasurer); or 2) OFAC had already named the United States corporation as an SDGT for channeling funds to foreign terrorists. Islamic Am. Relief, supra, 394 F.Supp.2d at 40, 46; Holy Land, supra, 219 F.Supp.2d at 67.
Khaled Smali, President of KindHearts, is a foreign national. This satisfies the requirement of 50 U.S.C. § 1702(a)(1)(B) that a foreign national have an interest in the organization.
3. Void for Vagueness
Plaintiff alleges that OFAC’s authority to block assets pending investigation and to designate SDGTs under the IEEPA and E.O. 13224 is unconstitutionally vague. First, plaintiff claims neither the IEEPA nor E.O. 13224 imposes substantive or procedural constraints on the authority to block pending investigation. Second, plaintiff claims that neither the IEEPA nor E.O. 13224 imposes a scienter requirement for designation. Third, plaintiff claims that the criteria set forth in E.O. 13224 for designation contain the unconstitutionally vague terms ‘‘material support,’’

13. American citizenship does not immunize KindHearts from blocking. Global Relief

Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir.2002).

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‘‘services,’’ and ‘‘otherwise associated with.’’
To determine whether a statute is vague, courts consider whether the statute is ‘‘sufficiently clear so as not to cause persons ‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’ ’’ Connally v. General Const. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926). Vague statutes violate the Due Process Clause of the Fifth or Fourteenth Amendments. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983); see also Coates v. City of Cincinnati, 402 U.S. 611, 614, 91 S.Ct. 1686, 29 L.Ed.2d 214 (1971).
[19] Vague statutes are contrary to the ‘‘first essential of due process of law’’ for two reasons. Connally, supra, 269 U.S. at 391, 46 S.Ct. 126. First, unclear statutes deny citizens ‘‘a reasonable opportunity to know what is prohibited, so that [they] may act accordingly.’’ Grayned v. City of Rockford, 408 U.S. 104, 108–09, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). Second, vague laws encourage arbitrary and discriminatory enforcement, because they ‘‘impermissibly delegate[ ] basic policy matters to policemen, judges, and juries.’’ Id. at 108–109, 92 S.Ct. 2294; see also City of Chicago v. Morales, 527 U.S. 41, 60, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999); Papachristou v. City of Jacksonville, 405 U.S. 156, 162, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972).
Courts demand a greater level of certainty where a vague criminal statute ‘‘might induce individuals to forgo their rights of speech, press, and association’’ to avoid even a risk of prosecution. Scull v. Com. of Va. ex rel. Comm. on Law Reform & Racial Activities, 359 U.S. 344, 353, 79 S.Ct. 838, 3 L.Ed.2d 865 (1959); see also Ashton v. Kentucky, 384 U.S. 195, 200, 86 S.Ct. 1407, 16 L.Ed.2d 469 (1966); Am. Booksellers Found. for Free Expression v.

Strickland, 512 F.Supp.2d 1082, 1097 (S.D.Ohio 2007), questions certified, 560 F.3d 443 (6th Cir.2009) (‘‘The courts will pay even closer attention when TTT a statute attempts to restrict an area of free expression through the penal code, because the threat of punitive penalties has the potential to significantly chill speech.’’).
A. Facial and As–Applied Vagueness Claims
[20] A plaintiff may assert two types of vagueness claims. First, it may challenge statutes as vague as applied to plaintiff’s specific conduct. An as-applied challenge ‘‘implicates the statutes’ enforcement only as to the plaintiff challenging the statute’’ but does not ‘‘implicate the enforcement of the law against third parties.’’ Humanitarian Law Project, supra, 463 F.Supp.2d at 1058. Thus, a successful as-applied challenge ‘‘does not render the law itself invalid.’’ Id.
[21] Second, plaintiffs may claim that a statute is vague on its face, meaning that it is vague as to conduct beyond that of the individual plaintiff. Id. A successful facial challenge renders the law invalid; facial invalidation, therefore, is ‘‘strong medicine’’ that courts should use only as a ‘‘last resort.’’ Id.; see also Nat’l Endowment for the Arts v. Finley, 524 U.S. 569, 580, 118 S.Ct. 2168, 141 L.Ed.2d 500 (1998).
KindHearts asserts both facial and asapplied challenges to OFAC’s designation and block pending investigation authorities.
i. Facial Invalidity
(a). OFAC Neither Suppresses Protected Speech Nor Imposes
Criminal Sanctions
[22] Generally, an enactment is unconstitutionally vague on is face only if it is ‘‘impermissibly vague in all its applications.’’ Village of Hoffman Estates v.

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Flipside, Hoffman Estates, Inc., 455 U.S. 489, 497, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982); see also U.S. v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987) (enunciating the ‘‘Salerno doctrine’’ that a successful facial challenge to a statute requires proof of invalidity in all its applications unless the statute regulates protected speech).
If, however, plaintiffs show that an allegedly vague criminal statute reaches a ‘‘substantial amount of constitutionally protected conduct’’ under the First Amendment, Belle Maer Harbor v. Charter Twp. Of Harrison, 170 F.3d 553, 557 (6th Cir.1999), the Salerno doctrine does not apply. See Salerno, supra, 481 U.S. at 745, 107 S.Ct. 2095 (recognizing an exception for First Amendment claims). Despite the general rule that plaintiffs who engage in ‘‘some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others,’’ the Supreme Court has ‘‘relaxed that requirement’’ in the First Amendment context to avoid chilling protected speech. U.S. v. Williams, 553 U.S. 285, 128 S.Ct. 1830, 1845, 170 L.Ed.2d 650 (2008).
[23] To avail themselves of this exception to Salerno, plaintiffs must show that the challenged enactment is: 1) criminal in nature; and 2) implicates First Amendment rights. In Kolender v. Lawson, 461 U.S. 352, 353, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983), the Supreme Court invalidated a criminal statute requiring those who ‘‘loiter or wander on the streets to provide ‘credible and reliable’ identification and to account for their presence when requested by a peace officer.’’ Though the statute could be clear in some instances, the Court invalidated it on the its potential to infringe First Amendment rights and the serious criminal sanctions imposed for its violation. Id. at 358 n. 8, 103 S.Ct. 1855; see also Morales, supra, 527 U.S. at 55 n. 22, 119 S.Ct. 1849 (in dicta, declining to

apply Salerno in void for vagueness challenge to a criminal statute implicating First Amendment rights).
[24] Where a criminal statute is narrowly tailored to restrict only unprotected speech, it does not implicate First Amendment rights for the purposes of a void-forvagueness challenge. Belle Maer Harbor, supra, 170 F.3d at 557; see also Rendon v. Transp. Sec. Admin, 424 F.3d 475, 480 (6th Cir.2005). Indeed, to be invalid, a statute must reach a ‘‘substantial amount’’ of protected speech: not all laws restricting speech satisfy this test.
In Rendon, the Sixth Circuit concluded that a Transportation Security Administration regulation did not reach a substantial amount of protected First Amendment conduct. The regulation at issue stated that ‘‘[n]o person may interfere with, assault, threaten, or intimidate screening personnel in the performance of their screening duties.’’ 49 C.F. R. § 1540.109. Because the statute requires that the plaintiff ‘‘interfere’’ with screeners in the performance of a specified task, it did not give screeners unfettered discretion to fine anyone they may find disruptive and therefore did not reach a substantial amount of protected speech. 424 F.3d at 478.
[25] In this case, OFAC’s designation authority neither implicates First Amendment rights nor is criminal in nature. Courts have uniformly held that OFAC’s blocking and designation authorities do not reach a substantial amount of protected speech, and that its restrictions are narrowly tailored. Al Haramain, supra, 585 F.Supp.2d at 1267 (E.O. 13224 ‘‘does not punish a substantial amount of protected free speech or associational rights.’’); Islamic Am. Relief, supra, 394 F.Supp.2d at 52–55 (rejecting claims that OFAC blocking action violates plaintiff’s First Amendment freedom of speech, freedom of associ-

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ation and freedom of religion, and noting that ‘‘nothing in the IEEPA or the executive order prohibits [the plaintiff] from expressing its views.’’); Holy Land Found. for Relief and Dev. v. Ashcroft, 333 F.3d 156, 166 (D.C.Cir.2003) (‘‘[T]here is no First Amendment right nor any other constitutional right to support terrorists.’’); Holy Land, supra, 219 F.Supp.2d at 82 (OFAC designation and blocking did not restrict plaintiff’s ‘‘ability to express its viewpoints, even if these views include an endorsement of Hamas.’’); Global Relief Found., Inc. v. O’Neill, 207 F.Supp.2d 779, 806 (N.D.Ill.2002), aff’d 315 F.3d 748 (7th Cir.2002) (Executive Order satisfies strict scrutiny and is not overbroad under in violation of the First Amendment because it neither ‘‘directly regulates speech or expression’’ and does not grant discretion to ‘‘determine whether particular items of expression may be prohibited on the basis of their content.’’).
Even if plaintiff shows that OFAC’s blocking and designation authorities reach a substantial amount of constitutionally protected conduct, the consequences are civil, rather than criminal. Even harsh civil sanctions do not justify applying heightened scrutiny. In Columbia Natural Res. Inc. v. Tatum, 58 F.3d 1101, 1108 (6th Cir.1995), for example, the court held that civil provisions of the Racketeer Influenced and Corrupt Organizations Act [RICO], 18 U.S.C. § 1962(c), were not unconstitutionally vague. The court stated that it ‘‘expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe.’’ Id. (citing Hoffman Estates, supra, 455 U.S. at 498–499, 102 S.Ct. 1186).14

(b). OFAC’s Authority to Order Blocking Pending Investigation
is Not Facially Vague
Plaintiffs argue OFAC’s power to block assets pending investigation is vague on its face because neither E.O. 13224 nor the IEEPA require OFAC to establish any level of suspicion or amass any quantum of evidence before acting. If this is true, the enactments are vague because without criteria governing OFAC’s actions ‘‘persons ‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’ ’’ Connally, supra, 269 U.S. at 391, 46 S.Ct. 126.
Defendants argue that the substantive criteria set forth in § 1 of E.O. 13224 constrain both OFAC’s power to designate and to block pending investigation. Defendants further assert, ‘‘To initiate a BPI OFAC must be pursuing an investigation based upon a reasonable basis to suspect that the individual or entity meets the E.O. criteria. Whereas, to designate, OFAC must have reason to believe the subject meets the designation criteria.’’ [Doc. 36, at 30 n. 25]. Plaintiffs respond that OFAC’s power to designate and power to block pending investigation have distinct sources in the text of E.O. 13224, and that the government’s putative ‘‘reasonable basis to suspect’’ standard is wholly invented.
E.O. 13224 empowers OFAC to block and designate by delegating powers given to the President by Congress in the IEEPA. Congress, through the IEEPA, authorized the President to block certain assets and transactions in cases of declared national emergency. 50 U.S.C.A. §§ 1702(a)(1), 1701. In E.O. 13224, the President declared that ‘‘foreign terrorists’’ represented an ‘‘unusual and extraordinary threat to the national security’’ and

14. The court in Columbia Natural Resources, id. at 1108, accurately noted that civil penalties for RICO violations are ‘‘harsh,’’ as such

penalties can include, inter alia, ‘‘dissolution or reorganization of any enterprise.’’ 18 U.S.C. § 1964(a).

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designated several entities and persons as ‘‘foreign terrorists.’’
OFAC’s power to designate SDGTs derives from E.O. 13224, § 1(c)-(d). These sections permit the Secretary of Treasury, in consultation with the Secretary of State and the Attorney General, to determine that an entity is ‘‘owned or controlled by’’ a designated foreign terrorist, has ‘‘assist[ed] in, sponsor[ed], or provide[d] financial, material, or technological support for, or financial or other services to or in support of’’ acts of terrorism by a designated foreign terrorist, or is ‘‘otherwise associated with’’ a designated terrorist. Under § 1 of E.O. 13224, the ‘‘property and interests in property’’ of entities so designated by the Treasury ‘‘are blocked.’’ Section 1 of E.O. 13224, however, does not confer any power on the United States Treasury to block pending investigation; it only authorizes blocks on entities who have already been designated.
OFAC’s power to block pending an investigation presumably stems from E.O. 13224, § 7, which authorizes the Secretary of the Treasury to ‘‘employ all powers granted to the President by IEEPA TTT as may be necessary to carry out the purposes of this order.’’ E.O. 13224 does not specifically mention any power to block pending an investigation. The catch-all provision in § 7, however, delegates the President’s IEEPA authority to block pending investigation to the Treasury. IEEPA authorizes the President to ‘‘investigate [and] block during the pendency of an investigation TTT any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.’’ 50 U.S.C. § 1702(a)(1)(B).
With regard to statutory limits on OFAC’s authority to impose blocking pending investigation, the plaintiff and defendant agree that the IEEPA places five

limitations on the President’s power to block pending investigation, and that these also limit OFAC’s power under E.O. 13224. First, before acting under IEEPA, the President must find and declare a national emergency based on an ‘‘unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States, to the national security, foreign policy, or economy of the United States.’’ 50 U.S.C. § 1701(a). Second, the President may exercise his authority ‘‘to deal with an unusual and extraordinary threat to which a national emergency has been declared’’ and ‘‘not for any other purpose.’’ Id. at 1701(b). Third, blocks pending investigation, like all blocks, must be on ‘‘property in which any foreign country or a national thereof has any interest.’’ 50 U.S.C. § 1702(a)(1)(B). Fourth, the President may not under IEEPA regulate the export of personal communications, information such as films, artworks and news wire feeds, or transactions ordinarily incident to travel in a foreign country. Id. at § 1702(b). Fifth, the president must consult with Congress ‘‘in every possible instance’’ before exercising his authority and Congress periodically reviews the President’s actions. Id. at §§ 1703(a), 1622.
These limitations, however, do not require OFAC to establish any specific level of suspicion or collect any quantum of evidence before blocking an entity pending an investigation. Plaintiffs argue that, provided the President has declared a national emergency, OFAC may block any entity it chooses to investigate on a whim. Defendants respond that OFAC may only block pending investigation if OFAC is ‘‘pursuing an investigation based upon a reasonable basis to suspect that the individual or entity meets’’ the criteria for designation under the E.O. [Doc. 73, at 30 n. 25].

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Defendants argue that this ‘‘reasonable basis to suspect’’ requirement derives from the judicial review provision of the Administrative Procedures Act (APA), 5 U.S.C. § 706(2)(A). This provision states that a court may overturn an agency action that is ‘‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’’ Id.; see also Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 377, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). Defendant cites three cases in which courts reviewed whether OFAC had a ‘‘rational basis’’ for issuing a final SDGT determination and block. Holy Land Found. for Relief and Development v. Ashcroft, 333 F.3d 156, 162 (D.C.Cir.2003); see also Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728, 732 (D.C.Cir.2007); Al Haramain, supra, 585 F.Supp.2d at 1249.
Defendant’s argument, however, is flawed. First, § 706(2)(A) of the APA sets forth a standard of judicial review, not a substantive standard to govern agency behavior. OFAC must comply with statutes, executive orders, and Treasury regulations governing its conduct; it should not consider whether its actions would later be reversed under the deferential ‘‘arbitrary and capricious’’ standard of judicial review in choosing its course of action.
Second, defendant’s argument fails to establish a link between the power to block pending investigation (authorized by E.O. 13224, § 7) and the standard for designating an SDGT (described in E.O. 13224, § 1). Nothing in the text of E.O. 13224 suggests that the block pending investigation power can be exercised only as a precursor to designation, nor does anything suggest how close OFAC must be to designating to impose a block. Without such a link, a reviewing court has no basis for determining whether OFAC has exercised its power reasonably in accordance with its authority.

Defendants rely on three cases involving challenges to post-designation blocking orders, not blocks pending investigation. Islamic Am. Relief, supra, 477 F.3d at 732; Holy Land, supra, 333 F.3d at 162; Al Haramain, supra, 585 F.Supp.2d at 1249.
Because the cases do not deal with the power to block pending investigation, they provide no guidance as to the restrictions on this power. In all three, OFAC simultaneously designated the target entity as an SDGT and blocked its assets. In these cases, therefore, both the designation decision and the block were governed by § 1 of the Executive Order, not § 7.
Section 1 sets forth criteria for designation and the block attaches automatically on designation. Courts in these cases apply the APA’s standard of review to determine whether OFAC had a ‘‘rational basis’’ to designate an entity under the § 1 criteria—courts do not treat ‘‘rational basis’’ as the criteria OFAC must abide in blocking or designating an entity. Holy Land, supra, 333 F.3d at 162.
Neither the IEEPA nor E.O. 13224, therefore, restrict OFAC’s power to block pending investigation OFAC’s authority to block pending investigation by requiring a specific quantum of evidence or level of suspicion that the targeted entity should be designated.
Plaintiff argues that this lack of statutory criteria restricting OFAC’s blocking authority makes that authority unconstitutionally vague. Because no criteria restrict OFAC’s authority, all exercise of that authority, plaintiff contends, are ab initio suspect, thereby rendering the IEEPA and E.O. 13224 facially vague.
Application of the Fourth Amendment to blocks pending investigation provides the criteria, otherwise unavailable under the IEEPA and E.O. 13224, for such seizures. If, to satisfy the Fourth Amendment,

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OFAC may only block pending investigation on a showing of probable cause that the target entity has violated prohibitions of the IEEPA and E.O. 13224, its discretion to block is not unfettered and OFAC’s authority is not unconstitutionally vague on its face.15
B. Whether the Criteria For Designation Are Unconstitutionally Vague
KindHearts also facially challenges OFAC’s designation authority as unconstitutionally vague. I have concluded previously that challenges to OFAC’s preliminary and final designation authority are not reviewable at this time, but I consider KindHearts’ challenge because the designation criteria also govern the probable cause standard required to block pending investigation.
OFAC’s designation authority arises from E.O. 13224, § 1 which orders a block on ‘‘all property and interest in property’’ subject to United States jurisdiction of an enumerated list of foreign terrorist individuals and organizations. E.O. 13224 § 1(d)(i)-(ii) authorizes the Secretary of the Treasury to add to this list by designating additional entities that ‘‘assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of’’ or are ‘‘otherwise associated with’’ individuals or groups designated as foreign terrorists. E.O. 13224, § 2(a) further authorizes designation and blocking for ‘‘making or receiving of any contribution of funds, goods, or services to or for the benefit of’’ designated foreign terrorists. KindHearts argues that the terms ‘‘services,’’ ‘‘otherwise associated with’’ and ‘‘material support’’ are unconstitutionally vague. KindHearts further argues that E.O. 13224 is unconstitutionally vague because it contains no scienter requirement.

To establish that these terms are unconstitutionally vague, plaintiff must show that they cause persons ‘‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’’ Connally, supra, 269 U.S. at 391, 46 S.Ct. 126. Because plaintiff’s challenge is facial and, as discussed above, does not implicate First Amendment rights, plaintiff must show that the challenged provisions are ‘‘impermissibly vague in all [their] applications.’’ Hoffman Estates, supra, 455 U.S. at 497, 102 S.Ct. 1186. To prevent arbitrary enforcement and to provide citizens with reasonable notice of what conduct is proscribed, a statute must draw ‘‘reasonably clear lines’’ between legal and illegal conduct. Smith v. Goguen, 415 U.S. 566, 573, 94 S.Ct. 1242, 39 L.Ed.2d 605 (1974).
Because E.O. 13224 and the IEEPA are federal rather than state law, this court has greater leeway to construe the enactments to remedy vagueness. The Supreme Court has rarely held federal statutes to be void for vagueness. Columbia Natural Resources, supra, 58 F.3d at 1108. Because federal statutes are subject to interpretation by federal courts, federal courts need not ‘‘sit passively and review only what other people have said to determine if a statute is vague.’’ Id. Rather, a federal court’s ‘‘own interpretations are a means of mitigating any vagueness.’’ Id.
[26] An undefined word or phrase does not necessarily render an enactment vague. Courts may ascertain an undefined term’s meaning by reading it in context, Boos v. Barry, 485 U.S. 312, 332, 108 S.Ct. 1157, 99 L.Ed.2d 333 (1988), or by looking to the term’s common meaning. U.S. v. Haun, 90 F.3d 1096, 1101 (6th Cir.1996) (If the common meaning of an undefined term

15. In this case, OFAC failed to follow the Fourth Amendment in imposing the block pending investigation. Thus, as applied to

KindHearts, OFAC’s authority under the IEEPA and E.O. 13224 was unconstitutionally vague.

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provides ‘‘adequate notice of the conduct prohibited and standards for enforcement,’’ the statute is not void for vagueness.). Courts may look to other statutes and case law to determine an undefined term’s meaning. See Jordan v. De George, 341 U.S. 223, 229–230, 71 S.Ct. 703, 95 L.Ed. 886 (1951) (upholding phrase ‘‘crime of moral turpitude’’ against vagueness challenge by examining meaning of term in cases and other statutes).
[27] A statute may be facially vague if it contains language that ‘‘lends itself to subjective interpretation.’’ Humanitarian Law Project, supra, 463 F.Supp.2d at 1062. In Coates v. City of Cincinnati, 402 U.S. 611, 612–614, 91 S.Ct. 1686, 29 L.Ed.2d 214 (1971), the court invalidated an ordinance prohibiting ‘‘conduct TTT annoying to persons passing by,’’ because ‘‘[c]onduct that annoys some people does not annoy others.’’ See also U.S. v. Wunsch, 84 F.3d 1110 (9th Cir.1996) (invalidating court’s local disciplinary rule requiring lawyers to ‘‘abstain from all offensive personality’’ because it could ‘‘refer to any number of behaviors’’ and it would be ‘‘impossible to know when such behavior would be offensive enough to invoke the statute.’’).
i. ‘‘Services’’
Plaintiff argues that the term ‘‘services’’ as it appears in E.O. 13224, §§ 1–2 is unconstitutionally vague. The Treasury Regulations do not provide a concise definition of ‘‘services,’’ but they do contain a non-exhaustive list of examples: ‘‘legal, accounting, financial, brokering, freight forwarding, transportation, public relations, or other services.’’ 31 C.F.R. § 594.406.
[28] Other courts have concluded that the term ‘‘services’’ in E.O. 13324 is not unconstitutionally vague. In Humanitarian Law Project, supra, 463 F.Supp.2d at 1063, the court held that the term ‘‘services’’ in the E.O. 13224 is not vague be-

cause it is a ‘‘word of common understanding and one that could not be used for selective or subjective enforcement.’’ Despite the fact that the regulations list examples in place of an exact definition, the court concluded that ‘‘any given individual would be able to distinguish when he or she was providing a ‘service’ to a designated terrorist group, as opposed to engaging in independent activity.’’ Id.; see also Al Haramain, supra, 585 F.Supp.2d at 1270 (The term ‘‘services’’ in E.O. 13224 is not unconstitutionally vague because the whole phrase, ‘‘services to or in support of’’ an SDGT ‘‘implies cooperation between the two entities, as opposed to independent advocacy.’’).
Courts have also upheld the term ‘‘services’’ against vagueness challenges in other contexts. See, e.g., Al Haramain, supra, 585 F.Supp.2d at 1269–1270 (upholding ‘‘services’’ as it appears in IEEPA); U.S. v. Lindh, 212 F.Supp.2d 541, 547 (E.D.Va.2002) (upholding ‘‘services’’ in a criminal case).
In Humanitarian Law Project v. Mukasey, 509 F.3d 1122, 1136 (9th Cir.2007), the court concluded that the ‘‘service’’ in the Antiterrorism and Effective Death Penalty Act of 1996 [AEDPA] is unconstitutionally vague. The AEDPA, however, expressly defined ‘‘services’’ to include ‘‘expert advice or assistance.’’ Id. The court ruled the terms ‘‘expert advice or assistance’’ to be unconstitutionally vague because the terms reaches protected First Amendment activity, such as training in ‘‘how to lobby or petition representative bodies such as the United nations.’’ Id. The court concluded that the phrase ‘‘expert advice or assistance’’ was unconstitutionally vague, and that the term ‘‘services’’ was unconstitutionally vague because the term includes ‘‘expert advice or assistance.’’ Id. at 1135– 1136.

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The term ‘‘service’’ in E.O. 13224 is not unconstitutionally vague. The common meaning of the word sufficiently constrains executive discretion. When read in context, ‘‘services to or in support of,’’ the term clearly requires a collaborative relationship with an SDGT; independent advocacy is not covered. Moreover, neither the E.O. nor the Treasury Regulations expressly extend the term ‘‘services’’ to any protected area of speech, making the Ninth Circuit’s reasoning in Humanitarian Law Project regarding the AEDPA inapplicable here.
ii. ‘‘Material Support’’
Plaintiffs assert that the term ‘‘material support’’ is unconstitutionally vague. Neither the Executive Order nor the Treasury regulations provide a definition of this term. To construe the statute, courts may look to how other statutes, regulations, and case law define this term. See Jordan, supra, 341 U.S. at 229–230, 71 S.Ct. 703.
The Immigration and Naturalization Act [INA], 8 U.S.C. § 1182(a)(3)(B), bars aliens who ‘‘engage in terrorist activity,’’ including those who ‘‘afford material support’’ to terrorists from receiving visas or entering the United States. The statute provides several examples of ‘‘material support,’’ including ‘‘a safe house, transportation, communications, funds, transfer or other material financial benefit, false documentation or identification, weapons (including chemical, biological, or radiological weapons), explosives, or training.’’ Id. at § 1182(a)(3)(B)(iv)(VI).
Courts have defined and applied the term ‘‘material support’’ from the INA using the plain meaning of the words. Thus, ‘‘material’’ has been held to mean ‘‘significant’’ or ‘‘essential’’ and ‘‘support’’ has been held to mean ‘‘sustenance or maintenance; esp., articles such as food and clothing that allow one to live in the degree of comfort to which one is accus-

tomed.’’ Singh–Kaur v. Ashcroft, 385 F.3d 293, 298 (3d Cir.2004) (construing ‘‘material support’’ in 8 U.S.C. § 1182(a)(3)(B)(iv)(VI)) (quoting Black’s Law Dictionary 991, 1453 (7th Ed.1999)) Though not addressing a vagueness challenge to the statute, the court concluded that ‘‘material support’’ clearly encompassed the claimant’s actions, which included providing food and shelter to individuals the claimant knew had committed terrorist activities. Id. at 299.
The term ‘‘material support’’ also appears in the AEDPA, 18 U.S.C. § 2339A. Subsection (b)(1) defines ‘‘material support or resources’’ to mean
any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials.
That two different federal statutes define ‘‘material support’’ somewhat differently does not, as plaintiffs contend, indicate that the statute is vague. The definitions in the INA and AEDPA do not set forth an exhaustive list of examples. In addition to specific examples like ‘‘weapons, lethal substances [and] explosives,’’ the definition in the AEDPA includes general terms like ‘‘any property, tangible or intangible, or service.’’ 18 U.S.C. § 2339A(b)(1). The definition in the INA uses the term ‘‘including’’ before the enumerated examples, indicating that Congress ‘‘intended to illustrate a broad concept rather than narrowly circumscribe a term with exclusive categories.’’ Singh–Kaur, supra, 385 F.3d

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at 298. Even if the two statutes differ in the examples they list, there is substantial overlap: both list safe houses, funds, false documentation, financial services and weapons as examples of ‘‘material support.’’
[29] Plaintiff’s vagueness challenge to ‘‘material support’’ fails. The INA, AEDPA, existing case law and common meaning provide a ‘‘broad concept’’ of material support that is sufficiently clear. Statutes ‘‘need not define with mathematical precision the conduct forbidden.’’ Columbia Natural Res., supra, 58 F.3d at 1108. Plaintiff, furthermore, must show that the statute is vague in all its potential applications to succeed in its facial challenge. Because existing statutes and case law identify a clear core of activities that constitute ‘‘material support’’—including the giving of funds, which plaintiff allegedly did—plaintiff’s facial challenge fails.
iii. ‘‘Otherwise associated with’’
Plaintiffs also find unconstitutional vagueness in the term ‘‘otherwise associated with’’ in E.O. 13224, § 1. OFAC regulations have recently defined this phrase to mean ‘‘(a) To own or control [an SDGT]; or (b) To attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or other financial services, to’’ [an SDGT]. 31 C.F.R. § 594.316.
[30] Plaintiff alleges that the phrase ‘‘otherwise associated with’’ arguably encompasses First Amendment protected speech and association. The recentlyadopted definition in 31 C.F.R. § 594.316, however, clarifies the phrase and limits its applicability to protected speech and conduct. Since the regulation was adopted, courts have twice rejected arguments identical to the plaintiff’s. See Al Haramain, supra, 585 F.Supp.2d at 1270 (term ‘‘otherwise associated with’’ as defined in § 594.316 is not unconstitutionally vague);

Humanitarian Law Project v. U.S. Dept. of Treasury, 484 F.Supp.2d 1099, 1106 (C.D.Cal.2007) (terms ‘‘on behalf of’’ and ‘‘to attempt, or to conspire’’ in § 594.316 are themselves sufficiently clear and clarify the meaning of ‘‘otherwise associated with’’).
Plaintiff notes that § 594.316 includes the terms ‘‘services’’ and ‘‘material support,’’ which it alleges are unconstitutionally vague. For the reasons described above, neither term is vague either as it appears in E.O. 13224 or 31 C.F.R. § 594.316. Neither, therefore, makes the term ‘‘otherwise associated with’’ unconstitutionally vague.
iv. Lack of a Scienter Requirement
Plaintiff claims, and the defendant does not dispute that OFAC may designate a targeted entity for providing ‘‘material support,’’ providing ‘‘services’’ or ‘‘otherwise associat[ing] with’’ an SDGT without showing that the targeted entity knew the recipient of its resources was an SDGT or that the targeted entity knew the resources would be used for illegal purposes. Plaintiff argues that this lack of a scienter requirement renders E.O. 13224 unconstitutionally vague.
[31] Lack of a scienter requirement does not make an otherwise clear statute unconstitutionally vague. Even criminal statutes are not unconstitutional where the legislature did not make intent to violate the statute an element of the crime. Lambert v. California, 355 U.S. 225, 228, 78 S.Ct. 240, 2 L.Ed.2d 228 (1957) (‘‘There is wide latitude in the lawmakers to declare an offense and to exclude elements of knowledge and diligence from its definition.’’). Punishing ‘‘a person for an act as a crime when ignorant of the facts making it so’’ is not a denial of due process of law. Williams v. North Carolina, 325 U.S. 226, 238, 65 S.Ct. 1092, 89 L.Ed. 1577 (1945). Although ‘‘a scienter requirement may

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mitigate a law’s vagueness, especially with respect to the adequacy of notice to the complainant that his conduct is proscribed,’’ Hoffman Estates, supra, 455 U.S. at 499, 102 S.Ct. 1186, lack of such requirement does not make the statute vague.
In this case, the absence of a scienter requirement does not make OFAC’s authority unconstitutionally vague.
4. Procedural Due Process
KindHearts asserts a due process challenge to OFAC’s provisional designation of it as a SDGT.
KindHearts claims that the statute on its face does not accommodate, and in any event, OFAC failed to provide constitutionally mandated due process. As a result, according to KindHearts, it was not given—and, in its view, even yet has not received—constitutionally adequate notice of the basis and reasons for the blocking order. It also asserts that the government has failed to provide an opportunity to be heard in response to that order and the deprivation of its assets.
For the reasons that follow, I reject KindHearts’ contentions regarding facial invalidity for want of an express description of process. I conclude, however, that the government’s actions regarding the blocking order failed to provide the two fundamental requirements of due process: meaningful notice and opportunity to be heard. Mathews v. Eldridge, 424 U.S. 319, 333, 348, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).
I find, though, that I presently cannot determine the extent to which KindHearts has been prejudiced by the violation of its constitutional rights.
I also conclude that the due process challenge to the provisional SDGT designation is not ripe for adjudication.

A. Asset Freeze—Facial Challenge
KindHearts contends that IEEPA § 1702(a)(1)(B) is unconstitutional on its face because it fails to include procedural safeguards. The law does not require notice, an opportunity to be heard or pre- or post-deprivation process. A provision of the Patriot Act amended the IEEPA and authorized OFAC to block an individual’s or organization’s assets based on its assertion that the individual or organization is under investigation.16 OFAC can thus freeze an American corporation’s assets just by announcing that the corporation is under investigation—under the statute it does not need to provide any process to that corporation.
§ 1702(a)(1)(B) states:
At the times and to the extent specified in § 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States[.]
KindHearts argues the government must provide notice and an opportunity to be heard by a neutral tribunal. While it agrees that the government does not always have to provide pre-deprivation process, it maintains that the government

16. Section 106 of the Patriot Act inserted ‘‘block during the pendency of an investiga-

tion’’ after ‘‘investigate’’ in the text of 50 U.S.C. § 1702(a)(1)(B).

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must afford it prompt post-deprivation process.
The government, in response, emphasizes the flexible nature of due process requirements, and states that courts must consider the governmental interest in national security in addition to harm to private interests and risk of erroneous deprivation. The government’s interest in national security, it contends, is paramount.
KindHearts correctly contends that the IEEPA contains no procedural protections. That does not mean that it meets the Salerno ‘‘no set of circumstances’’ test. 481 U.S. at 745, 107 S.Ct. 2095.17 Under Salerno, ‘‘a plaintiff can only succeed in a facial challenge by establishing that no set of circumstances exist under which the Act would be valid, i.e., that the law is unconstitutional in all of its applications.’’ Washington State Grange v. Washington State Republican Party, 552 U.S. 442, 128 S.Ct. 1184, 1190, 170 L.Ed.2d 151 (2008).
In U.S. v. Al–Arian, 308 F.Supp.2d 1322 (M.D.Fla.2004), the court upheld the constitutionality of the IEEPA because the statute primarily applies to foreign organizations. The court reasoned that facial analysis of the statute should include the statute’s application to foreign organizations and to organizations without a substantial connection to the United States. It stated, ‘‘[i]n such limited and exceptional circumstances TTT the facial analysis of a statute, like AEDPA or IEEPA, should include application to foreign organizations and individuals without a substantial connection to the United States.’’ Id. at 1346. It rejected the notion that its analysis would ‘‘eviscerate the doctrine of facial invalidity.’’ Id. It instead explained that its analysis prevented it ‘‘from intruding

into an area that TTT belong[ed] to the domain of political power.’’ Id.
No other court has explicitly addressed the constitutionality of the IEEPA under the Salerno ‘‘no set of circumstances’’ test. In Global Relief Foundation, Inc., supra, 207 F.Supp.2d at 793, plaintiff argued the IEEPA did not apply to the domestic assets of a United States corporation. Plaintiff did not challenge the constitutionality of the statute under Salerno. In Holy Land Foundation, supra, 219 F.Supp.2d at 67, plaintiff argued that under the IEEPA, the President can only block property in which a foreign country or national has an interest that is ‘‘legally enforceable.’’ Again, plaintiff did not challenge the statute’s constitutionality under Salerno.
In Al–Haramain Islamic Foundation v. U.S. Dept. of Treasury, supra, the plaintiff challenged the lack of procedural safeguards and regulations under the APA, arguing that OFAC’s designation process was arbitrary and capricious because ‘‘none of the regulations [identified] any procedural or substantive criteria to guide the process.’’ 585 F.Supp.2d at 1253. In response to plaintiff’s complaint that the designation process lacked procedural safeguards, the court held ‘‘there is no mandatory duty requiring OFAC to adopt the regulations AHIF–Oregon demands TTT, the agency’s failure to do so cannot be deemed ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law’ under the APA TTT In the absence of regulations, the requirements of due process apply.’’ Id. at 1254. Thus, although the court did not specifically address the constitutionality of the statute under the Salerno ‘‘no set of circumstances’’ test, it rejected plaintiff’s challenges by noting that the requirements of

17. See supra, § 4. Nor, despite KindHearts’ contention to the contrary, does the statute

implicate First Amendment freedoms. Id.

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due process apply to and constrain implementation of the statute.
The government argues that the IEEPA can be applied constitutionally. It asserts that its application to KindHearts is an example of a set of circumstances under which the statute is constitutional. It notes that KindHearts suggests safeguards that it believes would satisfy the constitutional standard. Thus, according to the government, KindHearts itself suggests a set of circumstances under which the IEEPA is constitutional.
[32] In Khouzam v. Attorney General of the U.S., 549 F.3d 235, 243–44 (3rd Cir.2008), the court, considering the facial constitutionality of the Foreign Affairs Reform and Restructuring Act of 1998 [FARRA] noted that neither the statute nor its implementing regulations provided ‘‘any procedures to be afforded the alien once the Attorney General [made] a determination that a deferral [of removal] should be terminated based on diplomatic assurances.’’ The court did not, however, fault the statute or its implementing regulations for the lack of process the petitioner received. It noted that the Act did not prohibit the Executive from acting constitutionally, and therefore was not facially unconstitutional. The court stated, ‘‘We do not attribute the lack of due process to TTT FARRA or its implementing regulations, for neither expressly directed the Executive to act in a manner that offends the Fifth Amendment. A statute is not facially unconstitutional unless ‘no set of circumstances exists under which the Act would be valid.’ ’’ Id. at 258; see also, Washington State Grange, supra, 552 U.S. at ––––, 128 S.Ct. at 1194 (finding statute was not facially unconstitutional because it could ‘‘conceivably be’’ implemented in a constitutional manner). But see, e.g., Wis-

consin v. Constantineau, 400 U.S. 433, 439, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971) (finding statute that lacked provisions for notice and hearing unconstitutional); Leslie v. Lacy, 91 F.Supp.2d 1182, 1186, 1193 (S.D.Ohio 2000) (finding statute unconstitutional on its face where text contained ‘‘no provision for notice TTT or hearing prior to the transfer of title TTT or after the transfer of title.’’).
OFAC does not contend that due process requirements do not apply at all. Indeed, it contends that it has met those requirements. Thus, it implicitly acknowledges the mandate of due process: it only disputes the claim of noncompliance. Although OFAC, as discussed in the next subsection, failed to afford adequate postdeprivation due process, the statute under which it acted can, if properly administered, be implemented consonant with due process requirements. It is, therefore, not unconstitutional on its face.
B. Asset Freeze: As–Applied Due Process Challenge
KindHearts argues OFAC provided inadequate post-deprivation process after impositing the block pending investigation in February, 2006, thereby violating KindHearts’ due process rights. These violations, according to KindHearts, included OFAC’s failure to specify any objective criteria for blocking KindHearts’ assets and provide either pre- or postdeprivation process. Due to OFAC’s alleged unconstitutional application of its blocking power, KindHearts asks that I lift the block.18
KindHearts claims that as notice of the block, OFAC only provided a single boilerplate sentence stating that OFAC was investigating it for possible connections to

18. The parties agree that OFAC’s block pending investigation constitutes a final agency

action subject to judicial review.

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Hamas. According to KindHearts, the notice failed to specify the Executive Order criteria OFAC suspected KindHearts of violating, and instead cited all the criteria in one sentence. Although KindHearts repeatedly asked for specification of the charges against it and reasons for OFAC’s freeze, OFAC ignored its requests. KindHearts asked for the full administrative record OFAC was using against it, but OFAC has to date failed to provide KindHearts with the full record.19
OFAC notified KindHearts that it could submit a letter in response to OFAC’s block. Despite KindHearts’ prompt submission, OFAC failed to respond for over one year. Its response consisted of a mere acknowledgement of KindHearts’ letter.
The government rejects KindHearts’ assertion that it received constitutionally inadequate process following the blocking of its assets. First, the government argues that in this case, due process does not require pre-deprivation notice or an opportunity to be heard. KindHearts does not refute the contention on this point. Predeprivation notice is not always necessary. See, e.g., Calero–Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 678–79, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974) (finding that in limited circumstances a seizure can take place without pre-seizure notice and a hearing).
The government insists KindHearts cannot legitimately claim it was unaware of the legal and factual grounds for the block. The initial blocking order notice stated that OFAC blocked KindHearts’ assets under E.O. 13224 and the IEEPA, as amended by the Patriot Act. It included the legal criteria supporting its investigation, stat-

ing it was investigating KindHearts for being ‘‘controlled by,’’ ‘‘acting for or on behalf of,’’ ‘‘assisting in or providing financial or material support to,’’ ‘‘and/or otherwise being associated with Hamas.’’
OFAC notes that the blocking notice did not include every basis for blocking authorized in E.O. 13224. Thus, it disputes KindHearts’ contention that it simply recited that Order’s list. Due process was also provided, the government asserts, via its invitation to KindHearts to challenge the blocking order by sending a letter presenting its views and evidence to the attention of the director of OFAC.
The government also claims that the press release placed on its website concurrently with issuance of the blocking notice constituted adequate notice of the factual basis for its decision to block KindHearts’ assets. OFAC adds that to date, it has given KindHearts its letter stating its provisional determination to designate KindHearts an SDGT and the thirty-five unclassified and non-privileged exhibits supporting that provisional determination, redacted provisional determination evidentiary memorandum, redacted block pending investigation evidentiary memorandum and portions of declassified exhibits. All this information, according to OFAC, constitutes sufficient notice for KindHearts meaningfully to challenge the block, along with its challenge to the provisional determination.
KindHearts responds that OFAC is conflating the notice it provided in conjunction with its blocking action with the notice of the provisional SDGT determination.
In response to KindHearts’ complaint about the three year delay in providing the bulk of the materials now in its hands, the

19. On May 25, 2007 (approximately one year and three months after the government initiated the block pending investigation), the government provided to KindHearts its unclassified and non-privileged record consisting of

thirty-five exhibits along with its letter informing KindHearts of its provisional determination to designate KindHearts as a SDGT. The government did not, however, provide access to its classified record.

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government contends that its original press release, issued concurrently with the blocking order, constituted sufficient notice. That, coupled with the invitation to KindHearts to send a letter challenging the blocking order, satisfied due process. The government additionally argues that whatever notice problems may have existed at the time of the blocking have been cured because KindHearts now has adequate notice and may challenge both the block and impending designation. According to OFAC, whatever process problems the delay caused will be cured because the process is moving forward, and the parties are negotiating a timeline for a prompt adjudication.
(i). Components of Adequate Notice
Constitutionally sufficient notice must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be TTT reasonably [calculated] to convey the required information TTT [W]hen notice is a person’s due, process which is a mere gesture is not due process.
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314–15, 70 S.Ct. 652, 94 L.Ed. 865 (1950).
[33] Constitutionally sufficient notice should give the party an understanding of the allegations against it so that it has the opportunity to make a meaningful response. The party must be able to know the conduct on which the government bases its action, so that it can explain its conduct or otherwise respond to the alle-

gations. It must also have reasonable access to the evidence that the government is using against them. See, e.g., Gete v. I.N.S., 121 F.3d 1285, 1297–98 (9th Cir. 1997) (discussing requirements of notice).
To determine whether KindHearts received constitutionally required process in conjunction with OFAC’s block pending investigation, I must weigh 1) ‘‘the private interest TTT affected by the official action;’’ 2) ‘‘the risk of an erroneous deprivation of such interest through the procedures used;’’ and 3) ‘‘the Government’s interest, including the function involved and the fiscal and administrative burdens that TTT additional or substitute procedural requirement would entail.’’ Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).
(ii). What OFAC Provided as Notice
To the extent that the government has provided notice of the basis for its blocking notice, it has done so in a piecemeal and partial manner. The blocking order simply recited criteria from E.O. 13224 and referenced the IEEPA, as amended by the Patriot Act and 31 C.F.R. Part 594. According to KindHearts, OFAC simply stated all possible criteria for investigation in a single sentence. OFAC disputes this, noting that it did not mention all of the criteria listed in the Executive Order.20 The concurrently posted press release similarly failed, according to KindHearts, to give any useful information about why the government froze all its assets and put it out of operation.
OFAC’s invitation to KindHearts to send a letter in response to the blocking

20. KindHearts also argues that OFAC failed to state the legal criteria supporting its blocking decision. OFAC now states it acted under the ‘‘reasonable basis’’ standard of the APA, at times calling the standard a ‘‘reasonable basis to suspect’’ [Doc. 36, at 30, n. 25; 37] and at other times, a ‘‘reasonable basis to believe.’’ [Doc. 73, at 25]. As discussed in

the § 3(A)(i)(b), supra, the government’s purported legal basis improperly tries to convert the standard for judicial review into the substantive standard triggering action under the statute. Going forward, the legal criteria for initiating the block pending investigation will be probable cause under the Fourth Amendment.

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notice did not add to KindHearts’ understanding of the reasons and basis for the government’s actions. The government did not offer access to the unclassified administrative record, any part of the documents and property seized during execution of the search warrants, or funds to pay attorney fees. Nonetheless, KindHearts’ attorney at that time, Jihad Smaili, promptly submitted a challenge to OFAC’s blocking action.
On November 29, 2006, Lynne Bernabei, successor counsel for KindHearts, wrote OFAC requesting access to the full administrative record for the potential designation. Not only did OFAC not provide any portion of the administrative record, it did not even respond to the November 29th letter.
On May 25, 2007, fifteen months after OFAC blocked KindHearts, and more than a year after Smali’s letter to OFAC, OFAC notified KindHearts that it had provisionally determined to designate KindHearts an SDGT. OFAC’s notice acknowledged receipt of Smaili’s November 29, 2006, letter, and stated that since receiving his letter, it had completed its investigation,

which resulted in the provisional SDGT designation.
OFAC’s notice of provisional designation did not recite new or alternative grounds for the potential designation. Instead, OFAC reiterated that its blocking action was based on the IEEPA, E.O. 13224 and 31 C.F.R. Part 594. It included with the letter thirty-five unclassified, non-privileged exhibits, which constituted the unclassified administrative record on which OFAC based its provisional determination.
OFAC did not include a statement explaining how those exhibits related to its charges against KindHearts, or how those documents were relevant. See Al–Haramain, supra, 585 F.Supp.2d at 1255–56 (stating that the government failed to provide constitutionally adequate process when it provided the administrative record supporting its designation /redesignation but the majority of those documents did not mention the plaintiff, and OFAC failed to explain the significance of that evidence).
Twenty of the thirty-five exhibits provided to KindHearts with the provisional determination notice do not mention KindHearts.21 The unclassified administrative

21. The unclassified administrative record consists of: a list of ‘‘Charitable societies whose accounts at Arab Bank were confiscated by Israeli security forces as Part of the Struggle Against Financing Terrorism,’’ from the Intelligence and Terrorism Information Center at the Center for Special Studies (http://www.intelligence.org.il/eng/finance/ bacnk ap6.htm); an article in the Cincinnati Post describing Fawaz Damrah’s sentencing to two months in prison; Treasury Department press release regarding Al–Aqsa’s designation as a financier of Terror Charity linked to Hamas; Treasury Department press release regarding Global Relief’s designation; indictment in Northern District of Illinois of Marzook (2004); Treasury Department Press release: U.S. Designates 5 Charities and 6 Hamas Leaders as Terrorist Entities; indictment in Holy Land Foundation v. U.S. (Northern District of Texas) 2004; Article on

palestine-info.net: PA Closes down Islamic Institution, Societies, Newspapers, Parties; KindHearts’ Articles of Incorporation; Department of Justice Press Release: Alamoudi sentenced to Jail in Terrorism financing case; Treasury Department Press release 2004: Treasury Designates Global Network, Senior Officials of IARA for Support to Bin Laden, Others; 2003 Tax Form 990 for KindHearts; two KindHearts Newsletters describing its activities; Toledo Blade article regarding Senate Finance Committee’s investigation of twentyfive Muslim organizations, including KindHearts, and the closing of the investigation; KindHearts’ address in Palestine and Lebanon on website; E.O. 13224 annex; three page ‘‘statement of the case’’—almost verbatim repeat of press release OFAC issued on February 19, 2006; Press Release from Chairman of U.S. Senate Finance Committee; KindHearts and IARA correspondence and

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record includes court opinions and indictments in Global Relief and Holy Land cases, historical articles, a Council on Foreign Relations Backgrounder on Hamas, various OFAC press releases, newspaper articles, KindHearts’ Newsletters and its organizational chart. OFAC invited KindHearts to respond to its provisional determination decision within thirty days of the date of the letter.
On June 14, 2007, KindHearts renewed its request for the full administrative record, both classified and unclassified. On June 25, 2007, KindHearts responded to OFAC’s provisional determination with a twenty-eight page preliminary submission. It attached to that a 1369–page submission of supporting evidence. On June 27, 2007 KindHearts also requested that OFAC initiate declassification review.
OFAC never responded to KindHearts’ June 25th submission.22 On August 10, 2007, KindHearts asked OFAC to perform a declassification review of the classified and privileged evidence on which it relied.
OFAC agreed, and said it would give KindHearts thirty days after the end of the declassification review to submit a response. For over fourteen months OFAC reported no progress with the review.23
On August 13, 2007, KindHearts requested further clarification of the charges against it, and an extension of time until

forty-five days after the declassification review was complete. On August 15, 2007, it also asked for access to classified evidence and to its own documents, all of which had been seized. On November 6, 2008, OFAC sought declassification review of block-related documents.
On December 12, 2008, approximately thirty-four months after the block pending investigation, and approximately eighteen months after its provisional determination to designate KindHearts an SDGT, the government provided KindHearts with redacted versions of the block memorandum and evidentiary memo on which it relied in reaching its provisional determination. In its redacted provisional determination memo, OFAC indicated the significance of the unclassified records it had released nineteen months earlier.
In December, 2008, and January, 2009, OFAC declassified portions of the administrative record supporting its block. That record included seven exhibits that the government had not included among the exhibits disclosed with the provisional determination decision. The additional exhibits, according to the government, had not been relied on in making that determination.24 The December, 2008, submission included a redacted copy of the block memorandum.

invoices; contractual agreements for services between KindHearts and North American Professional Services, Inc., & MLC Solutions; Letter from Sanabil to KindHearts; Global Relief Program reports; Email exchanges between KindHearts employees; Letter from Welfare Association to KindHearts; Internet article: ‘‘In Deir—El Balah, the Islamic Movement of Resistance Collects the Fruits of its Work on the Ground’’ (World Online); Global Relief contacts; Holy Land DC District and Circuit opinions; Boim v. Quaranic Literacy opinion; articles on the ‘‘Society of Muslim Brothers’’ and ‘‘Muslim Brotherhood’s Conquest of Europe;’’ Council on For-

eign Relations Backgrounder on Hamas, KindHearts’ Organizational Chart.
22. KindHearts learned about a year later that OFAC had no record of having received the submission. OFAC later admitted that it had received, but later misplaced the record. [Doc. 73].
23. After KindHearts filed this lawsuit, OFAC told its counsel that it could complete the declassification review within thirty days.
24. The government also stated that it would not be relying on those exhibits in the designation proceedings.

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On January 30, 2009, 594 F.Supp.2d 855 (N.D.Ohio 2009), OFAC declassified portions of several paragraphs in the block memorandum. On March 13, 2009, in response to KindHearts’ final brief relating to the pending pretrial motions, OFAC declassified one of the several bases for its block and provisional determination to designate KindHearts.
In sum, the ‘‘notice’’ KindHearts has received to date, since the government’s provisional determination to designate it an SDGT, is the letter KindHearts received informing it of the government’s decision, the thirty-five unclassified, nonprivileged exhibits, and a redacted version of the provisional determination evidentiary memo. OFAC claims it relied on the thirty-five exhibits in making its blocking decision, in addition to seven other exhibits that it did not rely on in making its provisional determination decision. Those seven exhibits and the redacted block evidentiary memorandum have been handed over to KindHearts.
KindHearts remains largely uninformed about the basis for the government’s actions. To the extent that it has become usefully informed, that information came only after long, unexplained and inexplicable delay and following multiple requests for information.25
(iii). OFAC’s ‘‘Notice’’ Was Constitutionally Inadequate
OFAC’s block of KindHearts resulted in the indefinite freeze of all of KindHearts’ assets and property, including about one million dollars in bank accounts. The

block shut KindHearts down indefinitely and its corporate existence remains in jeopardy due to OFAC’s block pending investigation.
[34] Applying the first factor from the Mathews balancing test—the private interest affected by OFAC’s action—it is clear that the private interest is substantial. An American corporation has had all its assets seized and been put out of business without being told, in any meaningful or useful way why, or on what basis the government took that action.
Applying the second Mathews factor— the risk of erroneous deprivation—I conclude that the failure to provide adequate and timely notice creates a substantial risk of wrongful deprivation. This is especially so in view of the fact that the government does not contend that KindHearts was donating its funds exclusively to Hamas. But the government has not provided its estimate of the approximate amounts of such donations, or what portion of KindHearts’ funds went to Hamas or individuals or entities related to Hamas.
Nor, as importantly, has the government stated which recipients, to the extent that it knows of specific recipients, were Hamas fronts or Hamas affiliated. Without this sort of information, KindHearts cannot meaningfully challenge the government’s actions. Not knowing to whom, in the government’s view, its funds should not have gone, it cannot rebut the government’s claim that recipients were Hamas connected.
An inability to rebut necessarily enhances, if it does not entirely ensure, the likelihood of erroneous deprivation.26

25. To the extent that OFAC contends, or might contend, that KindHearts knew itself what it was doing, where its funds were going and the unlawfulness of their destination, such response on its part is unavailing. Notice is to come from the government because it alone knows what it believes, and why what it believes justifies its actions.

26. As discussed infra, § 4(F) and § 5, the government has refused KindHearts’ requests for access to the blocked funds to enable it to compensate its attorneys. OFAC’s refusal to let KindHearts pay its lawyers to bring its challenges to the government’s actions amplifies the risks of erroneous deprivation. This is so, even though KindHearts has counsel in

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Other courts have found that failure to provide meaningful notice creates a high risk of erroneous deprivation. For example, in Gete, supra, the Ninth Circuit held that INS’ procedures following vehicle seizures violated procedural due process. The court faulted INS for failing to provide, post-seizure, its legal and factual basis for the seizure, ‘‘copies of [the] evidence to be used against them,’’ and ‘‘statements of the reasons for its denials of relief.’’ Id. at 1298. It explained that such procedures were necessary to ‘‘permit [plaintiffs] effectively to rebut the INS’ claims.’’ Id. at 1297. The court explained:
[R]equiring the disclosure of the factual bases for seizures would go a long way toward preventing some of the erroneous and fundamentally unfair forfeiture decisions that inevitably flow from so haphazard a process. So, too, would requiring the giving of notice of the specific statutory provision allegedly violated, rather than allowing the mere provision, without explanation, of copies of the entire statute and regulations. Similarly, furnishing owners with copies of evidence to be used against them, such as officers’ reports detailing the facts upon which the claim of probable cause is based, would permit them to understand the true nature of the INS’ charges and afford them a fair opportunity to prepare a proper defense to the threatened forfeiture. Finally, requiring the INS to provide statements of the reasons for its denials of relief would enable persons whose vehicles have been declared forfeited to determine whether the agency based its decision on erroneous facts, to discover whether there is evidence not previously considered that might be submitted, and to prepare rea-

sonably informed petitions for remission, mitigation, and reconsideration.
Id. at 1298.
To comply with due process requirements, OFAC should, at the very least, have promptly given KindHearts the unclassified administrative record on which it relied in taking its blocking action. See Al Haramain, supra, 585 F.Supp.2d at 1255– 57 (discussing the inadequacy of the record’s contents, but taking for granted that the record should be provided after the block); Global Relief Found., supra, 207 F.Supp.2d at 808 (noting OFAC publicly filed four binders of exhibits on March 27, 2002, approximately three months after OFAC’s block of Global Relief’s assets); Holy Land Found., supra, 333 F.3d at 164 (stating due process requires disclosure of the unclassified portions of the administrative record). Without that record, OFAC’s invitation to send a letter challenging the block held out no hope that any challenge would be either comprehensive or successful.
Applying the third Mathews factor—the governmental interest and burden of providing additional procedural protection—I note that OFAC has not explained, either to KindHearts or this court, why it failed to provide timely notice of the basis and reasons for its blocking order, or why it took so long for it to provide the scanty information it ultimately has produced.
OFAC apparently assumes that no explanation is needed. If so, it necessarily concedes that the third Mathews factor indisputably favors KindHearts. Absent an explanation for its conduct and dismissive treatment of KindHearts’ oft-repeated requests, it cannot claim that to have done

this lawsuit, which involves the prospect, but no guarantee of fee-shifting under the Equal

Access to Justice Act, 28 U.S.C. § 2412(d).

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otherwise would have been unacceptably or unduly burdensome.
In sum, consideration of the Mathews factors leads inescapably to the conclusion that OFAC violated KindHearts’ fundamental right to be told on what basis and for what reasons the government deprived it of all access to all its assets and shut down its operations. Whether OFAC violated the Constitution deliberately or indifferently does not matter at this stage: what matters is that OFAC did not meet its obligation to provide meaningful notice regarding its deprivation of KindHearts’ property.
(iv). Failure to Provide Prompt Post–Deprivation Hearing
In addition to constitutionally inadequate notice procedures, KindHearts also argues OFAC failed to provide it a meaningful opportunity to be heard. As the Supreme Court stated in Fuentes v. Shevin, 407 U.S. 67, 80–81, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (citation omitted):
The constitutional right to be heard is a basic aspect of the duty of government to follow a fair process of decisionmaking when it acts to deprive a person of his possessions. The purpose of this requirement is not only to ensure abstract fair play to the individual. Its purpose, more particularly, is to protect his use and possession of property from arbitrary encroachment-to minimize substantively unfair or mistaken deprivations of property,TTTT So viewed, the prohibition against the deprivation of property without due process of law reflects the high value, embedded in our constitutional and political history, that we place on a person’s right to enjoy what is his, free of governmental interference.

[35] Despite the due process requirement of prompt post-deprivation hearing, KindHearts received no response to its administrative challenge for over one year. When OFAC finally responded, it merely stated it had received KindHearts’ challenge and had provisionally determined to designate it an SDGT. It provided no reasons for its decision. It merely enclosed a copy of the unclassified record on which it relied in making its provisional determination and invited KindHearts to send another response.
It is unclear whether OFAC even considers its invitation to KindHearts to challenge its block and its one line response a ‘‘post-deprivation hearing.’’ 27 OFAC did not require the challenge by a certain date, nor did it agree to respond by a certain date. It waited over a year to respond. And one can hardly consider its one sentence acknowledgment of the receipt of KindHearts’ letter (which KindHearts put forward without the unclassified record, its own documents or access to its funds to pay its attorneys) a due process hearing.
Even if OFAC somehow believes that its invitation to send a letter fulfilled, at least initially, its obligation to give KindHearts an opportunity to be heard, its subsequent unresponsiveness has left KindHearts without any semblance of due process.
This is particularly true in light of how long OFAC has withheld the opportunity to be heard. Partially through simple unresponsiveness, and partially through piecemeal disclosure of information, OFAC has engendered a delay of remarkable duration.
Promptness is an important aspect of the due process right to be heard. Barry v. Barchi, 443 U.S. 55, 64, 99 S.Ct. 2642, 61

27. Adam Szubin, director of OFAC, described OFAC’s response to KindHearts’ challenge as an implicit denial of its challenge. He stated, ‘‘OFAC’s May 25, 2007 letter informing

KindHearts of its provisional determination to designate referenced KindHearts’ request for reconsideration and, by implication, denied it.’’ [Doc. 73, Att. 1].

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L.Ed.2d 365 (1979). There is, though, no bright-line gauge for determining whether the government has provided a hearing with sufficient promptness to protect against undue severity from the deprivation. Instead, the Supreme Court has created another balancing test, whereby courts are to examine the ‘‘importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken.’’ Fed. Deposit Ins. Corp. v. Mallen, 486 U.S. 230, 242, 108 S.Ct. 1780, 100 L.Ed.2d 265 (1988).
In this case, KindHearts asserts a substantial private interest-its existence and loss of access to its assets.
OFAC asserts its dilatoriness resulted from a need to progress further with its investigation before being able to evaluate KindHearts’ challenge. It argues Congress gave OFAC the power to maintain the status quo while determining whether an organization has unlawful ties to Specially Designated Global Terrorists.
OFAC also argues that KindHearts is partly responsible for the delay, particularly any delay after May 25, 2007. OFAC notes that KindHearts has requested several extensions to respond to OFAC’s piecemeal disclosure of information about its reasons for the blocking order.28
OFAC bears primary responsibility for the delay KindHearts has encountered in its effort to be heard: It waited fifteen months after the block to make a provisional determination and provide even the largely uninformative unclassified record to KindHearts. In the meantime, OFAC

apparently lost a 1369–page submission that KindHearts attached to its preliminary response.
After OFAC agreed to declassify documents, more than fourteen months passed before KindHearts saw any results from the declassification review. OFAC took more than thirty months to give KindHearts redacted records supporting its blocking action. It also resisted giving KindHearts access to its own documents. The delays KindHearts has sought have, in contrast, been a reasonable attempt to be able to review and respond to intermittent, and still incomplete disclosure of the information on which OFAC acted.
The final element of the promptness inquiry is the likelihood that the interim decision was mistaken. OFAC presently asserts that it issued the block order and has been investigating KindHearts because: 1) from KindHearts’ inception individuals have been involved in the organization who were active and influential participants in other Islamic charities that OFAC has shut down due to their support of overseas terrorist organizations, including Hamas; 2) members of KindHearts have had contacts with known members of Hamas; and 3) KindHearts’ funds have gone to Hamas controlled entities in the Middle East.
The materials provided to KindHearts give rise to some reason to believe that these allegations may be so. But what matters is whether OFAC has failed to afford KindHearts with a adequate opportunity to be heard in response to those allegations. On balancing the pertinent factors, I conclude that OFAC has failed to provide a meaningful hearing, and to do so

28. The fact that KindHearts sought to enjoin final designation as a SDGT should not be held against it. KindHearts perceived that such designation would have prejudiced its position in this case. In any event, its motion

for a temporary restraining order came after years had passed since the initial block order and the intervening failure by OFAC to provide it with reasonable notice.

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with sufficient promptness to moderate or avoid the consequences of delay. OFAC did not provide timely or sufficient notice to enable KindHearts to prepare an effective challenge. OFAC ignored KindHearts’ initial response. What reply OFAC made to KindHearts’ responses and requests was delayed and did not cure the deficiencies of its earlier notice. Even if OFAC may ultimately show it had an adequate basis for the blocking order, that does not justify the length of the government’s delay in giving KindHearts an opportunity to be heard.29
(v). Prejudice to KindHearts From the Due Process Violations
After concluding that OFAC’s provision of post-block process was constitutionally deficient, I must determine whether, despite the unconstitutional procedures, I can ‘‘say any due process violation was harmless beyond a reasonable doubt.’’ Al Haramain, supra, 585 F.Supp.2d at 1257 (citing Tennessee Secondary Sch. Athletic Ass’n v. Brentwood Academy, 551 U.S. 291, 303, 127 S.Ct. 2489, 2497, 168 L.Ed.2d 166 (2007)).
The parties’ briefs have not addressed this issue, and I am not certain that the record, in any event, is sufficiently developed to determine whether and to what extent KindHearts has been prejudiced, and whether any such prejudice has been cured or presently can be remedied. Further proceedings must occur before these questions can be answered.

C. As–Applied Challenge to Provisional Designation
KindHearts also raises constitutional challenges to the process provided in conjunction with OFAC’s provisional designation of KindHearts a SDGT.
OFAC does not contest KindHearts’ right to have adequate pre-designation notice and an opportunity to be heard. It claims it has provided the process that is due KindHearts relative to SDGT status.
OFAC also contends that KindHearts’ claim that OFAC has not provided due process with regard to such status is not ripe for judicial review. This is so, according to OFAC, because it has yet to take final agency action, in the form of final designation of KindHearts as a SDGT. Thus, it argues, its actions thus far are not judicially reviewable under the APA.
The APA limits judicial review of administrative actions to ‘‘final agency actions.’’ 5 U.S.C. § 704. KindHearts insists, however, that, under Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), abrogated on other grounds, Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), I can nonetheless now enjoin final SDGT designation.
In Abbott Laboratories the Court upheld pre-enforcement review of agency actions. As KindHearts reads this decision, anticipated agency action is ripe for judicial review if the court finds that the issues are

29. KindHearts suggests that the Director of OFAC cannot be a neutral decision-maker. The Northern District of Illinois rejected a similar argument in Global Relief Foundation, supra, 207 F.Supp.2d at 806, in which plaintiff refused to challenge OFAC’s block on the basis that the challenge amounted to little more than ‘‘window dressing because TTT the person TTT responsible for prosecuting Global Relief’’ would also be receiving the evidence. It cited the Supreme Court, which held that members of administrative agencies typically

receive results of investigations, ‘‘approve the filing of charges or formal complaints instituting enforcement proceedings, and then TTT participate in the TTT hearings.’’ (citing Withrow v. Larkin, 421 U.S. 35, 56, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975)). The Supreme Court explained the procedure did not violate the APA or due process. Thus, a hearing before the Director of OFAC does not constitute a violation of KindHearts’ due process right to a neutral decision-maker.

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‘‘fit for judicial review’’ and the parties will be harmed if I withhold consideration.
The decision in Abbott Labs and cases applying that decision are, however, limited to cases in which petitioners seek preenforcement review of what courts deem ‘‘final agency actions.’’ For agency actions to be considered final, ‘‘the action must mark the consummation of the agency’s decision-making process—it must not be of a merely tentative or interlocutory nature.’’ Bennett v. Spear, 520 U.S. 154, 177–78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). The action must also ‘‘be one by which rights or obligations have been determined, or from which legal consequences will flow.’’ Id. (citations omitted).
In Abbott Labs, the Supreme Court permitted pre-enforcement judicial review of an FDA regulation interpreting a statute. The Court found that pre-enforcement review was appropriate despite the fact that the regulation had not yet been enforced against a specific party. In its analysis, the Court noted that the ripeness doctrine required it to consider the ‘‘fitness of the issues for judicial decision’’ and the ‘‘hardship to the parties of withholding court consideration.’’ Id. at 149, 87 S.Ct. 1507.
In its discussion of the fitness of the issues for judicial review, the Court asserted that it considered the issuance of the regulation ‘‘final agency action’’ making it ripe for review under the APA. It noted that courts have ‘‘interpreted the finality element in a pragmatic way.’’ Id.
In each of the examples it cited to support a pragmatic interpretation of the finality element, the Court found agency regulations and orders as final agency actions fit for judicial review. Asserting that the regulation at issue in Abbott Labs constituted final agency action, the Court stated, ‘‘The regulation challenged here, promulgated in a formal manner after announcement in the Federal Register and consideration of comments by interested

parties is quite clearly definitive. There is no hint that this regulation is informal.’’ Id. at 151, 87 S.Ct. 1507.
In Ammex Inc. v. Cox, 351 F.3d 697, 706 (6th Cir.2003), the Sixth Circuit, applying Abbott Labs, held that ripeness in the context of pre-enforcement review of agency action requires the court to weigh three factors:
The first two deal with the fitness of the issues for judicial determination. One aspect of the judicial fitness of the issues is the extent to which the legal analysis would benefit from having a concrete factual context. The second aspect TTT is the extent to which the enforcement authority’s legal position is subject to change before enforcement. The third consideration deals with the hardship to the parties of withholding court consideration.
In its discussion of the second factor, the Sixth Circuit noted that in Abbott Labs, the court found the regulation ripe for judicial review because it represented a ‘‘final regulation that the FDA was unlikely to change.’’ Id. at 708.
After noting the need for final agency action, the Sixth Circuit found no final agency action in Ammex, where the ‘‘Notice of Intended Action’’ was ‘‘at most an initiation of proceedings’’ and not final agency action. Id.; see also National Park Hospitality Ass’n v. Dept. of Interior, 538 U.S. 803, 812, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003) (considering whether section at issue was final agency action, in addition to whether the question presented was a purely legal one, and whether ‘‘further factual development would significantly advance the court’s ability to deal with the legal issues presented’’); Texas v. U.S., 497 F.3d 491, 498–99 (5th Cir.2007) (finding challenge to secretarial procedures fit for judicial review in part because they constituted ‘‘final agency action, as

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they [were] final rules that were promulgated through a formal notice—and—comment rule-making process after announcement in the Federal Register ’’).
It is unclear which of OFAC’s actions KindHearts considers ‘‘final’’ and subject to review. OFAC has not formally designated KindHearts an SDGT. KindHearts argues that OFAC has, for all intents and purposes, already made a final decision regarding its designation. OFAC, however, has stated that it will consider a response from KindHearts before determining whether to designate it. I cannot assume that OFAC will designate KindHearts before it has done so.
OFAC’s provisional determination to designate KindHearts is not final agency action subject to review, because it does not ‘‘mark the consummation of the agency’s decision-making process.’’ Bennett v. Spear, 520 U.S. 154, 177, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
Another point of contention is OFAC’s unwillingness to provide access to classified evidence or further notice to KindHearts. OFAC contends that it has provided sufficient due process to KindHearts. Thus, its attitude toward giving more information to KindHearts appears ‘‘final.’’
[36] I have not come across a case in which a court deemed an agency’s interlocutory and ongoing decisions regarding notice, where such decisions have not been formalized by agency rule, regulation, statute, order etc., as a final agency action subject to judicial review. The Abbott Labs line of cases permitting pre-enforcement review does not involve a due process claim similar to that which KindHearts raises. KindHearts does not seek preenforcement review of a formal, finalized regulation, statute or policy. KindHearts seeks, rather, pre-enforcement review of a process that it asserts has denied it due process.

I conclude, accordingly that KindHearts’ due process challenge to possible final designation as a SDGT is not ripe for judicial review.
D. Restrictions on KindHearts’ Access to Its Own Documents
KindHearts argues that OFAC also severely restricted its due process right to meaningfully respond to allegations against it by: 1) denying it access to its own documents for over two years; 2) placing unreasonable restrictions on its ability to review and use the documents; and 3) requiring counsel to give the government results of any independent investigation taken as part of KindHearts’ defense.
During its February, 2006, execution of search warrants at KindHearts’ office and its president’s home, the FBI seized 150 boxes of documents, paper files, computer hard drives, video tapes and other media. OFAC refused to provide KindHearts copies of those records for over two years. KindHearts claims those records constituted the core of its defense because they document how it spent its money.
KindHearts also contends that in creating its administrative record OFAC selectively used those documents, excluding information unfavorable to it and thereby skewing that record.
In 2008, OFAC gave KindHearts’ counsel an electronic copy of a subset of its documents subject to a protective order. The order prohibited KindHearts members and officers from viewing the documents without court approval, and forbade KindHearts counsel from printing or electronically copying any documents. Only one representative had a copy of a subset of its own documents.
After KindHearts filed suit on October 9, 2008, the United States Attorney’s office indicated a willingness to discuss amend-

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ments to the protective order. The government agreed to amend the order, permitting KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.
KindHearts complained that these restrictions still interfered with its ability to present a meaningful defense. Because some former officials live elsewhere than where the attorneys reside, KindHearts objected to the requirement that those officials could only review documents in counsels’ offices. It similarly objected to the restriction on counsels’ ability to print documents for review or to attach to pleadings.
The government acknowledged it provided counsel with an incomplete ‘‘subset’’ of the seized materials. It refused to provide the remainder even under the restrictive terms of the protective order, and despite the fact that the materials, having been generated by KindHearts, were not classified.
OFAC claimed these restrictions were reasonable. In its initial response, it argued the blocked documents could contain sensitive information such as donor lists, donee information, procedures to avoid detection, etc. According to OFAC, its substantive reasons for limiting access to documents trumped KindHearts’ concerns.
This court, on January 30, 2009, granted KindHearts’ motion to modify the amended protective order. It required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. In light of the protective order, OFAC allowed KindHearts to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel. It therefore rendered moot KindHearts’ complaints regarding OFAC’s rule that former KindHearts officials review documents in the presence of counsel.

Though KindHearts now enjoys substantially unrestricted access to its own documents, that does not mean that the government’s conduct has no due process implications. Without access to its corporate records, KindHearts would find it difficult, if not impossible to document claims that OFAC either overlooked records favorable to KindHearts or misinterpreted records. Denying access by KindHearts’ counsel to its client’s records deprived them of an important, if not the principal means for challenging the blocking order and defending against final designation of their client as a SDGT.
This action, coupled with OFAC’s delay in providing any significant information from its own files about its basis and reasons for the blocking order, left KindHearts’ attorneys almost entirely unequipped to marshal and present evidence. This, in turn, would have lessened significantly the benefits from having an opportunity to be heard, had a due process hearing been afforded to KindHearts.
E. OFAC’s Limitations On KindHearts’ Investigation
KindHearts argues that OFAC’s requirement that it identify all documents obtained from former KindHearts officials violates its due process right to a meaningful defense by forcing it to act as agents for the government. It also argues the rule is an ‘‘arbitrary and capricious exercise of authority granted under the Regulations.’’
OFAC responds that it only requires generic information regarding additional documents. For example, it wants to know the number of boxes of documents acquired from former KindHearts officials, to ensure that such material is not destroyed or disseminated. KindHearts rejects this explanation, stating the ‘‘parameters of [the rule] remain impermissibly unclear and subject to OFAC’s whim, especially given TTT the plain terms of the

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regulation—to which OFAC originally cited in support of its disclosure requirement, 31 C.F.R. 501.603(b)(ii).’’ This rule requires substantial details about documents obtained, such as the owner, property, location, and contact information for the holder of the property. 31 C.F.R. § 501.603(b)(ii) requires initial reports on blocked property to,
[D]escribe the owner or account party, the property, its location, any existing or new account number or similar reference necessary to identify the property, actual or estimated value and the date it was blocked, and shall include the name and address of the holder, along with the name and telephone number of a contact person from whom compliance information can be obtained. If the report is filed by a financial institution and involves the receipt of a payment or transfer of funds which are blocked by the financial institution, the report shall also include photocopy of the payment or transfer instructions received and shall confirm that the payment has been deposited into a new or existing blocked account which is labeled as such and is established in the name of, or contains a means of clearly identifying the interest of, the individual or entity subject to blocking pursuant to the requirements of this chapter.
OFAC states that it only requires general descriptions of the blocked property, and that such a description ‘‘need not include the contents or even the name of the source of the documents. It could satisfy its obligation by stating it was in possession of three boxes of documents.’’ [Doc.

36]. Given OFAC’s insistence that it only requires generic information so that it can carry out its mandate to provide oversight of blocked property, I find that its policy does not amount to a due process violation or an arbitrary and capricious exercise of its authority.
KindHearts does not contend that OFAC is demanding more than such generic information; nor does it argue that providing such information would violate its due process rights. Providing generic information would not compromise KindHearts’ counsel, and requiring such information is not a due process violation.
F. Restrictions on KindHearts’ Access to Its Own Funds to Finance Its Defense
OFAC prohibits use of blocked funds to pay attorney fees. Initially, under its policy, OFAC required that KindHearts either pay for attorneys through ‘‘fresh funds,’’ i.e., funds raised outside of the United States, or apply for a license from OFAC to create a legal defense fund. For over two years OFAC kept KindHearts from using any part of the blocked funds to pay its counsel.
KindHearts’ original attorney, Jihad Smaili, wrote several letters to OFAC inquiring into methods of paying employees, ways to comply with the block and obtaining access to blocked funds to pay for attorney fees. OFAC refused to entertain Mr. Smaili’s repeated requests for access to blocked funds, insisting instead that Smaili be compensated solely from overseas accounts or apply for a license to start a legal defense fund.30

30. On receiving the blocking notice, Smaili corresponded with OFAC regarding access to blocked funds to receive payment for his continued (and previous) representation of KindHearts. On February 24, 2006, Smaili sent a letter/fax to OFAC ‘‘requesting information regarding the procedure in place for receiving attorneys’ fees for his representation

of KindHearts.’’ On March 1, 2006, Smaili acknowledged being informed that he would not be able to access any of the frozen funds for legal services provided, and to be provided’’ and protested that this ‘‘smack[ed] of inherent unfairness, especially since the government hasn’t made any official accusations against KindHearts.’’

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Being unable to secure compensation, Smaili resigned as counsel in May, 2006.
Successor counsel likewise sought to obtain access to blocked funds for their fees. Their efforts were unavailing until March 3, 2009, when OFAC approved payment to Bernabei & Wachtel, PLLC of $27,040.
In June, 2008, after OFAC’s attorney fees restrictions were challenged as unconstitutional in a separate lawsuit, Al Haramain, supra, 585 F.Supp.2d at 1246, OFAC implemented its new policy. The policy permits expenditure of blocked funds at rates based on the attorney compensation provisions of the Equal Access to Justice Act [EAJA], 28 U.S.C. § 2412(d), and Criminal Justice Act [CJA], 18 U.S.C. § 3006A.

The policy thus allows payments of $7000, per attorney, for up to two attorneys for administrative proceedings and district court litigation. It permits $5000, per attorney, for up to two attorneys for appellate court litigation. Although the policy states the funds are for ‘‘up to two attorneys,’’ OFAC later explained that KindHearts and other blocked or designated charities are not limited to two attorneys, but that for purposes of OFAC’s policy it distributes funds based on a hypothetical two attorneys.
KindHearts contends that OFAC’s policy and failure to provide KindHearts access to its own funds to pay for attorneys violates its due process right to access the courts.31 OFAC contends that there is no constitutional right to counsel in civil cases

On March 9, 2006, Smaili applied for a license to enable him to access blocked funds so that he could ‘‘continue legal representation on behalf of KindHearts and to receive payment for legal services already provided to KindHearts both prior to the Blocking Notice and after the Blocking Notice.’’ He added, ‘‘KindHearts has no source of funding whatsoever after its accounts were frozen and there are no prospects for raising any funds for legal representation.’’ On March 23, 2006, OFAC responded, issuing Smaili a license, but refusing to permit him access to blocked funds. It noted ‘‘payments authorized by the license must not originate from sources within the United States or within the possession or control of a U.S. person including overseas branches and must not be made from a blocked account or blocked property.’’ It acknowledged ‘‘under appropriate circumstances, OFAC has authorized the creation and operation of legal defense funds to enable the channeling of nonblocked funds from U.S. persons for the purpose of supporting legal representation, provided that the fund is administered by a law firm.’’ If KindHearts could not raise such funds, OFAC stated it would ‘‘consider other licensing options after receiving from KindHearts the report on all blocked property in KindHearts’ possession or control, wherever located, required by § 501.603 of the C.F.R.’’ Other options could include authorizing KindHearts’ access to its

own blocked overseas property to pay for legal services, subject to certain terms and conditions. On March 27, 2006, Smaili reiterated his concerns, stating KindHearts has ‘‘no prospects for raising funds to support its legal efforts’’ and that ‘‘KindHearts’ reputation in the community has been forever tarnished and it would be inconceivable and unreasonable to expect that individuals or entities would donate money to a KindHearts legal fund.’’ On April 24, 2006, Smaili sent OFAC a letter challenging the block pending investigation, in response to the notice of February 19, 2006. On May 17, 2006, he submitted a letter to OFAC stating he was resigning as counsel for KindHearts. In June, 2006, KindHearts retained Lynne Bernabei and David Cole. They continued to send letters requesting a license to access blocked funds. OFAC continued to deny these requests. These letters continued into October, 2006. On March 3, 2009, OFAC granted Bernabei & Wachtel, PLLC, a license to obtain $27,040.00 of blocked KindHearts funds in partial satisfaction of its attorneys’ fees request.
31. KindHearts also claims that OFAC’s actions vis-a-vis KindHearts’ requests for release of blocked funds to compensate counsel were arbitrary and capricious. See § 5(B), infra.

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or access to blocked funds to pay for attorneys.
KindHearts argues that OFAC’s policy prohibiting it from using its blocked funds to pay attorney fees constitutes a violation of its due process right to access to the courts. See, e.g., Martin v. Lauer, 686 F.2d 24, 32 (D.C.Cir.1982) (‘‘Meaningful access to the courts is a fundamental right of citizenship in this country TTT Indeed, all other legal rights would be illusory without it.’’) (citations omitted).
Courts have held that the government may not deny civil litigants their right to obtain counsel. An arbitrary refusal by a state or federal court to hear a party represented by counsel would amount to ‘‘a denial of a hearing, and, therefore, of due process in the constitutional sense.’’ American Airways Charters, Inc. v. Regan, 746 F.2d 865, 873 (D.C.Cir.1984) (quoting Powell v. Alabama, 287 U.S. 45, 68–69, 53 S.Ct. 55, 77 L.Ed. 158 (1932)).
Courts having considered the issue have concluded, however, that no right to access blocked funds exists. See, e.g., id. at 869 (D.C.Cir.1984) (assets that were ‘‘blocked, TTT [could] not be touched without OFAC’s permission’’); Beobanka d.d. Belgrade v. U.S., 1997 WL 23182, *1 (S.D.N.Y.1997) (noting that plaintiffs ‘‘cite no authority for the proposition that restrictions on the method of payment of counsel violates [sic] due process.’’); Al–Haramain, supra, 585 F.Supp.2d at 1271 (finding no due process right to access blocked funds).
[37] OFAC correctly recites the doctrine that the Constitution does not guarantee compensation for counsel in civil cases. E.g., Ivey v. Bd. of Regents, 673 F.2d 266, 269 (9th Cir.1982). Here, however, KindHearts seeks to compensate

counsel from its own funds, not those of the government.
Even so, KindHearts has no constitutional claim to such funds. As the court explained in Al Haramain:
The Fifth Amendment does not require access to blocked fees to pay attorneys. In both civil and criminal cases, courts have concluded that prohibitions on the use of funds for attorneys’ fees do not pose a due process violation. For example, pretrial restraining orders which freeze assets, including funds which a defendant seeks to use to pay an attorney, do not arbitrarily interfere with a defendant’s fair opportunity to retain counsel and violate neither the fifth nor the sixth amendments.
585 F.Supp.2d 1233, 1271 (citations omitted).
5. Claims OFAC Acted Arbitrarily and Capriciously
KindHearts claims that OFAC acted arbitrarily and capriciously in implementing its initial blocking order and refusing requests to release blocked funds to compensate its counsel.32 OFAC denies that its decisions as to either issue were arbitrary or capricious.33 In addition, it contends that issues relating to release of blocked funds for attorneys’ fees are not ripe for judicial review.
Under the Administrative Procedure Act, ‘‘an agency action shall not be set aside unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ’’ 5 U.S.C. § 706(2)(A).
Agency action is arbitrary and capricious where the agency has relied on

32. Details regarding KindHearts’ requests for access to blocked funds to compensate its counsel are set forth in § 4(v)(F), supra.

33. Having found that the block pending investigation violated the Fourth Amendment, it is not necessary to examine whether that action passes muster under the more lenient arbitrary and capricious standard.

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factors that Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency experience.
National Cotton Council of America v. U.S. E.P.A., 553 F.3d 927, 934 (6th Cir. 2009) (citations omitted).
[38] The arbitrary and capricious standard is deferential to the agency, and a court may not substitute its judgment for that of the agency. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). The court restricts its review to the administrative record without additional fact-finding. See Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). If the agency decision is supported by a rational basis in the administrative record, the decision survives arbitrary and capricious review. See Bowman Transp., Inc. v. Arkansas–Best Freight System, Inc., 419 U.S. 281, 290, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). Although arbitrary and capricious review is highly deferential to agencies, the government asserts an even higher degree of deference in the realm of foreign affairs. See Regan v. Wald, 468 U.S. 222, 242, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984).
The Sixth Circuit has explained that ‘‘when conducting this form of review, [the court] ensure[s] that the agency examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts and the choice made.’’ National Cotton Council of America, supra, 553 F.3d at 934 (citing Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.

29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). ‘‘While [the court] may not supply a reasoned basis for the agency’s action that the agency itself has not given, [it] will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.’’ Bowman Transp., Inc., supra, 419 U.S. at 285–86, 95 S.Ct. 438.
A. Ripeness
[39] OFAC’s attorney fees policy and its application to KindHearts’ attorneys is ripe for review. The policy and decision in response to counsel’s application for fees, which was granted in the amount of $27,040 for nearly three years’ work, represents a final agency action. After formally announcing the policy in June, 2008, OFAC applied the policy to KindHearts’ counsel. Though it released some blocked funds, the amount released was far less than the $46,000 counsel sought.
KindHearts has been affected directly by the policy and continues to be so affected. Its original counsel, Jihad Smaili, had to resign after multiple attempts to access blocked funds to receive payment for his work. Current retained counsel have had to seek and secure pro bono assistance from counsel from the American Civil Liberties Union.34
B. Whether OFAC’s Policy on Attorney Fees is Arbitrary and Capricious
(i). Adoption of OFAC’s Policy Was Not Arbitrary and Capricious
In its policy statement on attorney fees, OFAC explains that its policy ‘‘is aimed at enhancing the ability of a blocked party that lacks alternative access to funds to acquire legal representation in connection with its designation or the blocking of its property and interests in property.’’ [AR

34. Other private counsel, Fritz Byers and Professor David Cole, have pending fee petitions

to OFAC.

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1704–06]. In its arguments in this court, OFAC states that it caps fees to preserve blocked funds. Preserving blocked funds, according to OFAC, serves such important governmental interests as 1) depriving a sanctioned entity of the benefit of its property and preventing it from using its assets to further ends conflicting with United States interests; 2) preserving blocked funds as a negotiating tool for use by the President in addressing the relevant national emergency; and 3) preserving the blocked assets for legal judgments.
OFAC states that, after the terrorist attacks on 9/11, it ‘‘granted licenses for payment of attorney fees to Holy Land Foundation, Benevolence International Foundation and Global Relief Foundation, all of which were challenging blocking actions taken against them.’’ Those licenses permitted payment of attorney fees from blocked funds. According to OFAC, the three organizations used more than $3 million from the blocked accounts, which ‘‘evoked substantial criticism from various sources, including Congress. Congress enacted the Terrorism Risk Insurance Act of 2002, which authorized victims of terrorism to satisfy judgments by attaching the blocked assets of terrorist organizations and their supporters.’’ [Doc. 73]. This enactment, in OFAC’s view, enhanced the need to preserve assets, once it has blocked them.
[40] Given OFAC’s explanation for its attorney fee policy, I cannot find, under the arbitrary and capricious standard of review, that adoption of OFAC’s policy was arbitrary or capricious, or that the policy is arbitrary and capricious on its face. Limiting of the amount of attorney fees paid with blocked funds ‘‘is rationally re-

lated to the advancement of legitimate governmental interests.’’ Beobanka, supra, 1997 WL 23182, *2; see also Al Haramain, supra, 585 F.Supp.2d at 1271–72. I may not substitute my judgment for that of the agency or order the agency to adopt a more generous policy.
(ii) OFAC Applied its Policy to KindHearts Arbitrarily and Capriciously
[41] I find, however, that OFAC’s application of its policy to KindHearts in this case has been arbitrary and capricious. This is so because: 1) OFAC has provided no sufficient statement of reasons for authorizing payment of $27,040, rather than the full and still rather modest, amount requested, or some amount in between; 2) OFAC has not addressed the effect on the generation of attorneys’ fees of certain special circumstances in this case, such as its delay in responding to communications on behalf of KindHearts, and its general unresponsiveness, in any event, to the requests in those communications, and the complexity of nearly all the manifold issues; and 3) there is a disconnect between the facts underlying the request for access to blocked funds for attorneys’ fees and the purposes, as described by OFAC, underlying its June, 2008, attorney fee policy.
OFAC gives no satisfactory reasons for its authorization of $27,040. It may be that it applied the EAJA/CJA cap of $7,000 per attorney for two attorneys for proceedings first before the agency and then before this court. But the amount authorized is $960 less than the caps. OFAC does not explain how it arrived at the amount of $27,040, rather than authorizing the ‘‘full’’ award of $28,000.35

35. In its license, OFAC merely states that it calculated the amount ‘‘with reference to OFAC’s published policy entitled ‘Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs

Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings’ (available at http://www.treas.gov/ offices/enforcement/ofac/licensing/guidance/ legal fee guide.pdf).’’ [Doc. 74, Att. 2].

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More importantly, there is nothing in the record to indicate that OFAC took into account any of the circumstances that would justify awarding the full amount requested—$46,000—to counsel. As already noted, that is, in absolute and relative terms, a modest amount given the work that counsel appears to have done both before the agency and in this court.36 Three years had passed before counsel received a nickel. There is no reason to doubt that the amount requested was for services actually performed.
Most of the delay, as noted, resulted from OFAC’s failure to respond to repeated inquires and requests by KindHearts’ counsel. Not compensating counsel for work done as a result of OFAC-caused delay is an abuse of OFAC’s discretion,

and supports a finding of arbitrary agency action.37
The issues raised in this case have been and remain complex.38 The amount of the award suggests quite strongly that OFAC failed to take the complexities into account when it decided to approve $27,040, rather than the $46,000 requested.
There is, moreover, a disconnect between OFAC’s response to the fee requests in this case and the legitimate governmental interests it states its policy furthers. No apparent, much less manifest risk of dissipation of the corpus would or could result from granting the requested amount. According to my understanding, the government has approximately $1 million of KindHearts’ funds. Allocation of about five percent of the sequestered assets for attorney fees would

36. Bernabei & Wachtel provided, as requested by OFAC, an ‘‘Itemized statement of the hourly rate and number of hours billed per attorney for legal services directly related to the request for administrative reconsideration of the blocking and proposed designation, and the legal challenge thereto’’ [June 2006–December 2008] and an ‘‘Itemized statement and description of costs incurred in seeking administrative reconsideration or judicial review of the blocking and proposed designation, divided by each phase of the case’’ [June 2006–December 2008]. OFAC should have explained what it found wanting when it decided not to grant the petition in full.
37. One aspect of the delay is particularly remarkable, and, perhaps, emblematic. Once OFAC agreed in August, 2007, to conduct a declassification review, KindHearts heard no updates or information regarding the review until November, 2008, after KindHearts filed this suit. OFAC agreed to complete such review within thirty days of a telephone conference which took place shortly after OFAC filed this suit. OFAC states it received the declassified documents back from the originating agencies shortly before this lawsuit was filed and that it reviewed them for accuracy, incorporated them into the administrative record, and produced them to KindHearts. OFAC’s failure to inform KindHearts of the status of the declassification process,

and sudden readiness to provide the documents after KindHearts filed suit, contributed to the delay in this case and supports the finding that it acted arbitrarily and capriciously with regard to the attorney fee requests.
38. Though looking to the EAJA and CJA as templates for OFAC’s June, 2008, policy was not arbitrary and capricious, the fit is far from exact and tight, especially with regard to the CJA. Relatively few federal criminal cases involve complexities similar to those present in these proceedings. When they do, approval of petitions for excess compensation is routine. Under both the CJA and EAJA, moreover, a judge—not one’s adversary—determines the amount of compensation, whether within or above the cap. Indeed, under the CJA, both the District Judge and a Circuit Judge must independently approve any request for excess compensation. Under the OFAC policy, it, rather than a judicial officer, decides how much of the blocked funds to release to counsel. While there does not appear to be anything inherently unlawful about this structure, it can, if not implemented in good faith, impartially and fairly, result in the kind of arbitrary and capricious ‘‘award’’ made here.

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hardly endanger the integrity of the balance of those assets or the government’s ability permanently to retain them when and if it became entitled to do so.
Preserving the funds to pay possible future judgments against KindHearts is a worthy goal—provided there is some likelihood of claims being asserted, verdicts being entered and judgments being enforced. There is nothing to indicate whether OFAC took such likelihood, or lack thereof, into account in reaching its decision to award $27,040, rather than the requested $46,000.
Preserving the funds for use by the President as a negotiating tool does not seem at all likely in this case. These funds belong to an American corporation, not a foreign government, or even a foreign private entity with influence over relations with the United States.
Even if a risk exists that funds will be needed for either of these purposes, that risk should be weighed against the risk that private counsel will no longer be able or agree to represent KindHearts. As a corporation, KindHearts cannot represent itself. To gain access to the courts to contest OFAC’s actions and allegations KindHearts can only appear through counsel. Denying a corporation access to counsel is tantamount to depriving it of the right to defend itself. American Airways Charters, Inc., supra, 746 F.2d at 873, n. 14.
Finally, paying counsel for putting OFAC to the test of the Constitution and laws of the United States hardly harms United States interests. Indeed, it furthers them, regardless of the outcome of that test. To the extent OFAC fails the test, it can and no doubt will correct its procedures. Doing so will improve its operations, while eliminating the distraction of further litigation. To the extent that OFAC passes the test, it can continue operating as it has, with the constitutional-

ity of its operations having received a judicial imprimatur.
In light of the foregoing, I conclude that OFAC’s handling thus far of KindHearts’ request for access to blocked assets to compensate counsel has been arbitrary and capricious. From all that appears in the record, OFAC’s decision was reached mechanistically, and without individualized consideration of the facts and circumstances of this case. If the basis for OFAC’s decision was otherwise, it has not said so.
Conclusion
For the foregoing reasons, it is
ORDERED THAT:
1. Secretary of the Treasury Timothy Geithner and Attorney General Eric H. Holder are hereby substituted as defendants for former Secretary of the Treasury Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively.
2. Defendant’s motion to dismiss [Doc. 36] be and hereby is granted with regard to plaintiff’s claims that:
A. The Fourth Amendment precludes final designation of plaintiff as a Specially Designated Global Terrorist, without prejudice;
B. OFAC’s authority is void for vagueness;
C. OFAC’s block pending investigation of plaintiff’s assets contravened due process of law on its face;
D. As applied, OFAC’s provisional designation of KindHearts as a Specially Designated Global Terrorist contravened due process, without prejudice;
E. OFAC’s impairment of plaintiff’s investigation violated due process;
F. OFAC’s restriction of access to blocked funds to compensate counsel,

LONGS v. FORD MOTOR CO.
Cite as 647 F.Supp.2d 919 (W.D.Tenn. 2009)

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and otherwise be and hereby is denied.

Jeffrey LONGS, Plaintiff,

Defendant’s motion to dismiss is otherwise denied.
3. Plaintiff’s motion for partial summary judgment [Doc. 31] be and hereby is granted with regard to its claims:
A. That OFAC violated the Fourth Amendment claim when it seized plaintiff’s assets without probable cause and prior judicial review and issuance of a warrant for such seizure;
B. OFAC’s failure to provide notice, and an opportunity to be heard, and its restrictions on plaintiff’s access to its documents; and
C. OFAC’s limitation on the extent to which plaintiffs’ blocked funds are available to it to compensate its counsel was arbitrary and capricious and violated the Administrative Procedure Act.
Plaintiff’s motion for summary judgment is otherwise denied.
4. A status/scheduling conference is set for September 21, 2009 at 3:30 p.m.; not later than one week before the conference the parties shall submit an agreed or separate status report[s] specifying issues needing further consideration and suggesting a timetable for adjudication or other disposition of such issues.
So ordered.
,

v.
FORD MOTOR COMPANY, Defendant.
Case No. 2:07–cv–02653–JPM–cgc.
United States District Court, W.D. Tennessee, Western Division.
Aug. 10, 2009.
Background: Terminated employee brought claims against his former employer alleging discrimination in form of disparate treatment on basis of race, discrimination in form of policies with disparate impact on older African-American employees, and retaliation in violation of Title VII and Age Discrimination in Employment Act (ADEA). Employer moved for summary judgment.
Holdings: The District Court, Jon P. McCalla, Chief Judge, held that:
(1) employee failed to establish prima facie case of race discrimination based on disparate impact;
(2) employee’s memorandum and formal Equal Employment Opportunity Commission (EEOC) charge were activities protected by Title VII and ADEA;
(3) genuine issue of material fact precluded summary judgment as to whether employer knew employee filed formal charge with EEOC, as part of employee’s prima facie retaliation case; and
(4) employee sufficiently established his protected activities were cause of his termination, as part of his prima facie case of retaliation.
Motion granted in part and denied in part.

1. Civil Rights O1118, 1201 Under the McDonnell Douglas frame-
work using circumstantial evidence to sup-

 
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[33] With regard to the Husseins’ procedural due process claim stemming from the loss of their use and enjoyment of their asphalt drive, I do not find defendants’ defense of qualified immunity maintainable. The law is well-settled that one cannot, in the exercise of state authority, deprive someone of their property without due process of law. See, e.g., Roth, supra, 408 U.S. at 577, 92 S.Ct. 2701; Bell v. Burson, 402 U.S. 535, 539, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971).
The requirements for ‘‘notice and an opportunity to be heard,’’ moreover, are ‘‘clearly established.’’ Gunasekera v. Irwin, 551 F.3d 461, 471 (6th Cir.2009). The defendants, as government employees, should have known that at least some process was due before depriving the Husseins of their property interest.
Any reasonable official would have known that he cannot cease construction or direct destruction of a homeowner’s property without due process. Despite City ordinances noting different ways to resolve zoning violations, the defendants disregarded them and enforced the ordinances as they saw fit. See Silberstein, supra, 440 F.3d at 318 (‘‘A reasonably competent public official is presumed to know the law governing his or her conduct.’’).
If, as the Husseins sufficiently asserted, Klag authorized the Husseins to install a layer of asphalt, it becomes even more clear that the defendants are not entitled to qualified immunity. Because a genuine issue of material fact exists as to this point, summary judgment on the defense of qualified immunity is inappropriate. See Bell v. City of Miamisburg, 1992 WL 1258527, *9 (S.D.Ohio 1992) (finding that when there are ‘‘factual disputes about what occurred, summary judgment on the defense of qualified immunity is inappropriate’’) (citing Brandenburg v. Cureton, 882 F.2d 211 (6th Cir.1989)).

Defendants, furthermore, cannot enjoy qualified immunity to shield them from liability for violating the Husseins’ rights to substantive due process. It is clearly established that government officials cannot, under the substantive due process clause, subject residents to irrational or arbitrary zoning decisions. See Triomphe Investors v. City of Northwood, 835 F.Supp. 1036, 1042 (N.D.Ohio 1993) (‘‘plaintiffs had a clearly established right not to be subject to an arbitrary or an irrational zoning decision.’’) (citing Village of Arlington Heights v. Metropolitan Hous. Dev. Corp., 429 U.S. 252, 263, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977)).
Thielen and Klag cannot, therefore, rely on the defense of qualified immunity to shield themselves from liabilities for any of the Husseins’ remaining allegations of constitutional violations.
Conclusion For the foregoing reasons, it is hereby: ORDERED THAT defendants’ motion for summary judgment [Doc. 64] be, granted in part and denied in part. So ordered.
,
KINDHEARTS FOR CHARITABLE HUMANITARIAN DEVELOPMENT, INC., Plaintiff v.
Timothy GEITHNER, et al, Defendant. Case No. 3:08CV2400.
United States District Court, N.D. Ohio,
Western Division.
Aug. 18, 2009. Background: Non-profit corporation brought action against Secretary of Trea-

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647 FEDERAL SUPPLEMENT, 2d SERIES

sury, Director of Office of Foreign Assets Control (OFAC) of Treasury Department, and Attorney General challenging a provisional determination by OFAC that corporation was Specially Designated Global Terrorist (SDGT), and challenged block OFAC placed on its assets pending full investigation. Corporation moved for summary judgment, and defendants moved to dismiss for failure to state claim upon which relief can be granted or for summary judgment.
Holdings: The District Court, James G. Carr, Chief Judge, held that:
(1) ‘‘blocking action’’ by OFAC constituted a ‘‘seizure’’ for purposes of the Fourth Amendment;
(2) government failed to show that ‘‘blocking action’’ was justified under exigent circumstances exception to Fourth Amendment;
(3) foreign national, who was president of organization, had ‘‘interest’’ in its assets under International Emergency Economic Powers act (IEEPA);
(4) OFAC’s terrorist designation authority, issued pursuant to executive order under IEEPA, was not unconstitutionally vague;
(5) OFAC provided organization constitutionally inadequate notice prior to blocking its assets during course of its investigation; and
(6) attorney fees policy of OFAC was applied arbitrarily and capriciously, in violation of Administrative Procedure Act (APA), to attorneys of non-profit corporation.
So ordered.
1. Searches and Seizures O13.1 The government seizes property pur-
suant to Fourth Amendment when it creates some meaningful interference with an

individual’s possessory interests in that property. U.S.C.A. Const.Amend. 4.
2. Searches and Seizures O13.1 Even brief detentions of personal ef-
fects, such as a short investigative detention of luggage at an airport, are ‘‘seizures’’ subject to Fourth Amendment scrutiny. U.S.C.A. Const.Amend. 4.
3. Searches and Seizures O13.1 The government need not take posses-
sion of or title to property to ‘‘seize’’ it; interference with the target’s possessory interest triggers Fourth Amendment scrutiny. U.S.C.A. Const.Amend. 4.
4. Searches and Seizures O13.1 War and National Emergency O503 A ‘‘blocking action’’ by the Director of
Office of Foreign Assets Control (OFAC) of Treasury Department, which blocks assets of entities under investigation for supporting terrorism, constitutes a ‘‘seizure’’ for purposes of Fourth Amendment. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202207, 50 U.S.C.A. §§ 1701-1706.
5. Searches and Seizures O24, 125 Generally, the Fourth Amendment
permits seizures only on the basis of probable cause and a judicial warrant listing, with particularity, the item or items to be seized. U.S.C.A. Const.Amend. 4.
6. Searches and Seizures O23 Reasonableness is the ultimate stan-
dard for analysis of government searches and seizures under the Fourth Amendment. U.S.C.A. Const.Amend. 4.
7. Searches and Seizures O23, 24 Searches and seizures are usually
‘‘reasonable’’ under Fourth Amendment only when conducted with a judicial warrant supported by probable cause. U.S.C.A. Const.Amend. 4.

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8. Searches and Seizures O24 ‘‘Special needs’’ warrantless searches
and seizures need only be reasonable under all the circumstances; no warrant or probable cause is required. U.S.C.A. Const.Amend. 4.
9. Searches and Seizures O44 Under the Fourth Amendment, if exi-
gent circumstances exist for a search or seizure, the warrant requirement, but not the requirement of probable cause, may be excused. U.S.C.A. Const.Amend. 4.
10. Searches and Seizures O24 Special needs searches and seizures
share at least three basic characteristics: (1) they must serve a purpose above and beyond normal criminal law enforcement; (2) circumstances must make the warrant and probable cause requirement impracticable; and (3) the method of search or seizure must have built-in limits, such as a confined geographic scope or regular, suspicionless application, that restrict executive discretion and ensure that all citizens know the circumstances under which they are subject to a special needs search or seizure. U.S.C.A. Const.Amend. 4.
11. Searches and Seizures O24 War and National Emergency O503 A ‘‘blocking action’’ by the Director of
Office of Foreign Assets Control (OFAC) of Treasury Department, which blocks assets of entities under investigation for supporting terrorism, does not fit within the ‘‘special needs’’ exception to the Fourth Amendment’s warrant and probable cause requirements. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202-207, 50 U.S.C.A. §§ 17011706.

upon consideration of: (1) whether immediate government action was required; (2) whether the governmental interest was sufficiently compelling to justify a warrantless intrusion; and (3) whether the citizens’ expectation of privacy was diminished in some way. U.S.C.A. Const.Amend. 4.
13. Searches and Seizures O45
For a warrantless search to be sustained, a person of reasonable caution must be able to conclude that evidence of a federal crime would probably be found on the premises and also that such evidence would probably be destroyed within the time necessary to obtain a search warrant. U.S.C.A. Const.Amend. 4.
14. Searches and Seizures O44
War and National Emergency O503
Government failed to show that ‘‘blocking action’’ by the Director of Office of Foreign Assets Control (OFAC) of Treasury Department, which blocked assets of non-profit organization under investigation for allegedly supporting terrorism, was justified under exigent circumstances exception to the Fourth Amendment’s warrant and probable cause requirements; OFAC conducted preliminary investigation of presently indeterminate duration which led to blocking order, time was not of essence, and while government had compelling interest in preventing flow of funds to overseas terrorist organizations, government had time to secure a warrant, and organization had strong interest in accessing its funds, remaining in operation and disbursing its funds lawfully. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, §§ 202-207, 50 U.S.C.A. §§ 1701-1706.

12. Searches and Seizures O42.1 A court may find that exigent circum-
stances existed, thereby eliminating warrant requirement of Fourth Amendment,

15. War and National Emergency O50
District Court could not review, under Administrative Procedure Act (APA) provisional and prospective final determina-

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tion by Office of Foreign Assets Control (OFAC) of United States Treasury Department that non-profit corporation was Specially Designated Global Terrorist (SDGT), pursuant to corporation’s purported Fourth Amendment challenge; Court could only review final agency action. U.S.C.A. Const.Amend. 4; 5 U.S.C.A. § 704.
16. Administrative Law and Procedure O704
Provisional agency action is not final action under the Administrative Procedure Act (APA). 5 U.S.C.A. § 704.
17. War and National Emergency O503 International Emergency Economic
Powers Act (IEEPA) does not require that an entity have a nexus with a sanctioned nation to be the subject of a blocking action; rather, IEEPA only requires that blocked property be property in which any foreign country or a foreign national ‘‘has any interest.’’ International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
18. War and National Emergency O503 Foreign national, who was president
of non-profit organization, had ‘‘interest’’ in organization’s assets under International Emergency Economic Powers Act (IEEPA), as was required for Director of Office of Foreign Assets Control (OFAC) of Treasury Department to satisfy Fourth Amendment in issuing ‘‘blocking order’’ on organization’s assets pending full investigation. U.S.C.A. Const.Amend. 4; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
19. Constitutional Law O3905 Vague statutes are contrary to the
first essential requirement of due process of law for two reasons: (1) unclear statutes deny citizens a reasonable opportunity to

know what is prohibited, so that they may act accordingly, and (2) vague laws encourage arbitrary and discriminatory enforcement, because they impermissibly delegate basic policy matters to policemen, judges, and juries. U.S.C.A. Const.Amends. 5, 14.
20. Statutes O47
A plaintiff may assert two types of vagueness claims: (1) it may challenge statutes as vague as applied to plaintiff’s specific conduct, or (2) it may claim that a statute is vague on its face, meaning that it is vague as to conduct beyond that of the individual plaintiff. U.S.C.A. Const. Amend. 1.
21. Statutes O62
A successful facial challenge renders the law invalid; facial invalidation, therefore, is strong medicine that courts should use only as a last resort. U.S.C.A. Const. Amend. 1.
22. Statutes O47
Generally, an enactment is unconstitutionally vague on is face only if it is impermissibly vague in all its applications.
23. Constitutional Law O1152
Salerno doctrine, generally requiring that plaintiff making facial challenge to statute prove its invalidity in all its applications, does not apply if plaintiff shows that challenged enactment is: (1) criminal in nature, and (2) implicates First Amendment rights. U.S.C.A. Const.Amend. 1.
24. Constitutional Law O1800
Where a criminal statute is narrowly tailored to restrict only unprotected speech, it does not implicate First Amendment rights for the purposes of a void-forvagueness challenge. U.S.C.A. Const. Amend. 1.

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25. Constitutional Law O1868 War and National Emergency O50 Terrorist designation authority of
United States Office of Foreign Assets Control (OFAC) of the Treasury Department, issued pursuant to executive order under International Emergency Economic Powers Act (IEEPA) and which allowed for designations of entities owed or controlled by specially designated global terrorists (SDGT), neither implicated First Amendment rights nor imposed criminal sanctions so as to render it unconstitutionally vague; terms of authority were content neutral, law was largely directed at stopping financial assistance to terrorist organizations, which was a legitimate state interest, and terrorism was specifically defined in the regulations and restrictions were narrowly tailored. U.S.C.A. Const.Amend. 1; International Emergency Economic Powers Act, § 202(a), 50 U.S.C.A. § 1701(a); 31 C.F.R. § 594.311.
26. Statutes O188, 208 Courts may ascertain the meaning of
an undefined term in a statute or other law by reading it in context, or by looking to the term’s common meaning.
27. Statutes O47 A statute may be facially vague if it
contains language that lends itself to subjective interpretation.
28. Constitutional Law O1133 War and National Emergency O50 Executive Order (EO) banning provi-
sion of ‘‘services’’ to specially designated global terrorists (SDGT) was not unconstitutionally vague on its face; EO did not give unfettered authority to designate a person or group as an SDGT, and meaning of the ban would be clear in the vast majority of intended applications.

ignated global terrorists (SDGT) was not unconstitutionally vague on its face; related federal acts, case law, and common meaning provided ‘‘broad concept’’ of examples of material support, including the giving of funds to SDGT, which satisfied definition under EO.
30. Constitutional Law O1440, 1868 War and National Emergency O50 Executive Order (EO) banning per-
sons from being ‘‘otherwise associated with’’ specially designated global terrorists (SDGT) was not unconstitutionally vague on its face; definition in federal regulation limited applicability of phrase to protected speech and conduct. U.S.C.A. Const. Amend. 1; 31 C.F.R. § 594.316.
31. Criminal Law O13(1) Criminal statutes are not unconstitu-
tional where the legislature did not make intent to violate the statute an element of the crime.
32. Constitutional Law O4252 War and National Emergency O50 Provision of International Emergency
Economic Powers Act (IEEPA), which authorized Director of the Office of Foreign Assets Control (OFAC) of the Treasury Department to block individual’s or organization’s assets based on assertion of OFAC that individual or organization was under investigation as to whether it was specially designated global terrorists (SDGT) was not unconstitutional on its face, since, if properly administered, it could be implemented consonant with requirements of due process. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).

29. Constitutional Law O1133 War and National Emergency O50 Executive Order (EO) banning provi-
sion of ‘‘material support’’ to specially des-

33. Constitutional Law O3881 Constitutionally sufficient notice, in
accordance with due process, should give a party an understanding of the allegations

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647 FEDERAL SUPPLEMENT, 2d SERIES

against it so that it has the opportunity to make a meaningful response, must allow a party to be able to know the conduct on which the government bases its action, so that it can explain its conduct or otherwise respond to the allegations, and must provide party to reasonable access to evidence that government is using against them. U.S.C.A. Const.Amend. 5.
34. Constitutional Law O4252 War and National Emergency O50 Director of the Office of Foreign As-
sets Control (OFAC) of the Treasury Department provided inadequate notice, under due process clause, to non-profit corporation prior to blocking its assets, pursuant to International Emergency Economic Powers Act (IEEPA), while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT); organization had its assets seized and had been put out of business without being told why in any meaningful or useful way or on what basis the government took its action, government had not stated which alleged recipients of funds were associated with terroristrelated groups, and organization could not challenge government’s actions without that information, government should have given organization the unclassified administrative record on which it relied in taking its blocking action, and OFAC had not explained either to organization or to court why it failed to provide timely notice of basis and reasons for its blocking order or why it took so long for it to provide scant information it had produced. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
35. Constitutional Law O4252 War and National Emergency O50 Director of the Office of Foreign As-
sets Control (OFAC) of the Treasury De-

partment failed to provide adequate postdeprivation hearing, under due process clause, to non-profit corporation after blocking its assets, pursuant to International Emergency Economic Powers Act (IEEPA), while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT); corporation received no response to its challenge of OFAC’s determination for over year, and once OFAC finally responded, it merely stated it had received corporation’s challenge and had provisionally determined it was SDGT, enclosed copy of unclassified record on which it relied in making its determination, and invited corporation to send another response. U.S.C.A. Const.Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
36. Constitutional Law O978 Non-profit corporation’s due process
challenge to possible final designation by Director of the Office of Foreign Assets Control (OFAC) of the Treasury Department of corporation as specially designated global terrorist (SDGT), under International Emergency Economic Powers Act (IEEPA), was not ripe, since OFAC had not yet made designation and would consider response from corporation before making a determination. U.S.C.A. Const. Amend. 5; International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
37. Federal Civil Procedure O1951 The Constitution does not guarantee
compensation for counsel in civil cases. U.S.C.A. Const.Amend. 6.
38. Administrative Law and Procedure O760, 763
The arbitrary and capricious standard under the Administrative Procedure Act, which states that an agency action will not

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863

be set aside unless it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, is deferential to the agency, and a court may not substitute its judgment for that of the agency. 5 U.S.C.A. § 706(2)(A).
39. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department, as well as its application to attorneys of non-profit corporation which had its requests to release funds subject to OFAC blocking order refused, thereby making it unable to pay its counsel, while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT) under International Emergency Economic Powers Act (IEEPA) was ripe for review, since policy and decision represented final agency decision applied to counsel of corporation, and directly affected corporation as its original counsel had to resign after multiple attempts to blocked funds to receive payment for his work and required corporation to secure pro bono assistance from alternate counsel. International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).
40. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department, which permitted expenditure of funds subject to OFAC blocking order for payment of attorney fees at rates based on attorney compensation provisions of Equal Access to Justice Act (EAJA) and Criminal Justice Act (CJA), was rationally related to advancement of governmental interest in enhancing ability of blocked party that lacked alternative access to funds to acquire legal representation in connection with its designation, under International Emergency Economic Powers Act (IEEPA), as specially designated global terrorist (SDGT), or blocking of party’s

property and interests in property, as was

required pursuant to ‘‘arbitrary and capri-

cious’’ review under Administrative Proce-

dure Act (APA). 5 U.S.C.A. § 706(2)(A); 28

U.S.C.A. § 2412(d); International Emer-

gency Economic Powers Act,

§ 203(a)(1)(B),

50

U.S.C.A.

§ 1702(a)(1)(B).

41. War and National Emergency O512 Attorney fees policy of Office of For-
eign Assets Control (OFAC) of the Treasury Department was applied arbitrarily and capriciously, in violation of Administrative Procedure Act (APA), to attorneys of non-profit corporation which had its requests to release funds subject to OFAC blocking order refused, thereby making it unable to pay its counsel, while OFAC continued its investigation as to whether organization was designated a specially designated global terrorist (SDGT) under International Emergency Economic Powers Act (IEEPA); OFAC provided no sufficient of statement of reasons for authorizing modest, rather than full, amount requested, had not addressed effect on generation of attorney fees of certain special circumstances in case, and there was disconnect between facts underlying request for access to blocked funds for attorney fees and purposes underlying attorney fee policy. 5 U.S.C.A. § 706(2)(A); International Emergency Economic Powers Act, § 203(a)(1)(B), 50 U.S.C.A. § 1702(a)(1)(B).

Fritz Byers, Jeffrey M. Gamso, Gamso, Helmick & Hoolahan, Toledo, OH, Alan R. Kabat, Lynne Bernabei, Bernabei & Wachtel, David D. Cole, Georgetown University Law Center, Washington, DC, Carrie L. Davis, American Civil Liberties Union of Ohio Foundation, Cleveland, OH, Hina Shamsi, American Civil Liberties Un-

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647 FEDERAL SUPPLEMENT, 2d SERIES

ion Foundation, New York, NY, for Plaintiff.
Amy E. Powell, Jonathan E. Zimmerman, U.S. Department of Justice–Civil Division, Federal Programs, Washington, DC, for Defendant.
Daniel J. Maloney, Maloney, McHugh & Kolodgy, Ltd., Toledo, OH, Ranjana Natarajan, University of Texas, School of Law National Security Clinic, Austin, TX, for Amici Curiae.
ORDER
JAMES G. CARR, Chief Judge.
Plaintiff KindHearts for Charitable Humanitarian Development, Inc. (KindHearts), an Ohio corporation, challenges a provisional determination by the Office of Foreign Assets Control [OFAC] of the United States Treasury Department that plaintiff is a Specially Designated Global Terrorist [SDGT]. KindHearts also challenges the block OFAC placed on plaintiff’s assets pending a full investigation.
OFAC alleges that KindHearts provides material support to Hamas, which is also an SDGT. OFAC’s authority to designate SDGTs and block the assets of entities under investigation for supporting terrorism stems from the International Emergency Economic Powers Act [IEEPA], 50 U.S.C. § 1701–06 and Executive Order 13224 [E.O. 13224].
KindHearts alleges that OFAC’s actions are unconstitutional because: 1) OFAC’s block is an unreasonable seizure in violation of the Fourth Amendment; 2) provisions authorizing OFAC to designate SDGT and block assets pending investigation are void for vagueness under the Fifth Amendment; 3) OFAC denied KindHearts procedural due process before provisionally determining it to be an SDGT and blocking its assets; and 4) OFAC has unconstitutionally restricted plaintiff’s access to the resources it needs to mount a de-

fense. KindHearts further claims that OFAC blocked KindHearts’ assets without proper statutory authorization.
KindHearts asks this court to lift the OFAC blocking order or, alternatively, to require OFAC to provide KindHearts with adequate process.
The defendants—the Secretary of the Treasury, Director of OFAC, and Attorney General—are United States government officials sued in their official capacities. This court sua sponte substitutes as defendants Timothy Geithner, Secretary of the Treasury, and Eric H. Holder, Attorney General, for former Treasury Secretary Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively. Defendants contest plaintiff’s constitutional and statutory claims, and argue that claims arising from OFAC’s provisional determination that KindHearts is an SDGT are not ripe for this court’s review.
Pending are plaintiff’s motion for partial summary judgment under Rule 56 of the Federal Rules of Civil Procedure [Doc. 31] and defendants’ motion to dismiss under Rule 12(b)(6) or, in the alternative, for summary judgment on all counts under Rule 56. [Doc. 36].
Background
KindHearts, a Toledo-based non-profit corporation, was incorporated on January 22, 2002, under Ohio law. Its stated goal is to provide humanitarian aid without regard to religious or political affiliation.
Khaled Smaili founded KindHearts after OFAC shut down several Muslim-affiliated charities which, like KindHearts had as their stated objectives humanitarian relief in the Middle East and elsewhere. KindHearts contends that from its inception, its officers and directors took great care to ensure it did not fund any designated terrorist or terrorist-related entities or otherwise violate federal laws regarding

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designated terrorists. It sought guidance from the Treasury Department, and implemented the Treasury’s voluntary guidelines for charitable organizations.
On February 19, 2006, OFAC froze all of KindHearts’ assets pending investigation into whether it was subject to designation under IEEPA and E.O. 13224. More than a year later, on May 25, 2007, OFAC informed KindHearts it had provisionally determined to designate it a SDGT.
Statutory and Regulatory Framework
The Executive initially used the Trading With the Enemy Act [TWEA], 50 App. U.S.C. §§ 1–44, enacted in 1917, to impose sanctions and embargoes on foreign nations. In 1977, Congress amended the TWEA and enacted the IEEPA. The IEEPA requires the President to declare a national emergency to ‘‘deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy or economy of the United States.’’ The pertinent sections of the IEEPA are 50 U.S.C. § 1701 and 1702:
§ 1701. Unusual and extraordinary threat; declaration of national emergency; exercise of Presidential authorities
(a) Any authority granted to the President by section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat. (b) The authorities granted to the President by section 1702 of this title may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared for purposes of this chapter and may not be exercised for

any other purpose. Any exercise of such authorities to deal with any new threat shall be based on a new declaration of national emergency which must be with respect to such threat.
§ 1702. Presidential authorities
(a)(1) At the times and to the extent specified in section 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—
(A) investigate, regulate, or prohibit—
(i) any transactions in foreign exchange,
(ii) transfers of credit or payments between, by, through, or to any banking institution, to the extent that such transfers or payments involve any interest of any foreign country or a national thereof,
(iii) the importing or exporting of currency or securities, by any person, or with respect to any property, subject to the jurisdiction of the United States;
(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States; TTT
50 U.S.C. §§ 1701–1702.
On September 24, 2001, President Bush issued E.O. 13224, declaring a national emergency with respect to ‘‘grave acts and threats of terrorism.’’ He invoked his au-

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thority under the IEEPA, authorizing the Secretary of Treasury, in consultation with the Secretary of State and Attorney General, to designate ‘‘persons’’ (defined as individuals or entities) whose property or interests in property should be blocked because they ‘‘act for or on behalf of’’ or are ‘‘owned or controlled by’’ designated terrorists, or because they ‘‘assist in, sponsor, or provide financial, material or technological support for, or financial or other services to or in support of’’ or are ‘‘otherwise associated’’ with them.1
Individuals or entities designated under E.O. 13224 are labeled ‘‘Specially Designated Global Terrorists.’’ In § 10 of the Executive Order, the President states that under the Order no prior notice of a listing or designation needs to be provided to those with a presence in the United States because of the targeted organization’s ability to transfer funds or assets instantaneously, which would render the blocking measures ineffectual.
In October, 2001, the Patriot Act amended the IEEPA. It added the phrase ‘‘block pending investigation’’ after the word ‘‘investigate’’ in 50 U.S.C. § 1702(a)(1)(B). The amendment permitted the Treasury Secretary to impose all the blocking effects of a designation, including freezing an organization’s assets indefinitely and criminalizing all its transactions, without designating the organization a SDGT. The Treasury only needs to assert that it is investigating whether the entity should be designated. The amendment also provided that an agency record containing classified information could be ‘‘submitted to the reviewing court ex parte and in camera.’’

Designation as a specially designated global terrorist immediately results in the blocking of the designee’s property and interests in property within the United States or in the control of United States persons. It also prohibits all transactions with designated entities, including making or receiving any contribution of funds, goods or services to or for the benefit of those persons. Executive Order 13224 specifically prohibits all humanitarian donations.
The Treasury Department promulgated regulations implementing E.O. 13224 on June 6, 2003. The regulations set forth the procedures for imposing civil and criminal penalties on United States persons who engage in any transaction with any entity that has been designated or blocked pending investigation. With respect to a designation, 31 CFR § 501.807 permits designated entities to seek administrative reconsideration by OFAC after they have been designated and had their property frozen.
OFAC’s Block Pending Investigation of KindHearts
On February 19, 2006, OFAC blocked all of KindHearts’ assets and property pending investigation into whether it was subject to designation under E.O. 13224. On the same day it blocked KindHearts’ assets, the government executed search warrants at KindHearts’ Toledo headquarters and the residence of its President, Khaled Smaili. It removed all KindHearts’ records, computers and several boxes of publications and documents. Before executing those search warrants, the Department of Justice obtained two grand jury subpoenas

1. In Humanitarian Law Project v. U.S. Department of Treasury, 463 F.Supp.2d 1049, 1070– 71 (C.D.Cal.2006), the court declared unconstitutional the ‘‘otherwise associated’’ criterion. The Treasury Department subsequently issued a regulation that defined that provision

as ‘‘(a) To own or control; or (b) To attempt, or conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services to.’’

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requiring: 1) Ernst & Young to produce documents relating to KindHearts and 2) a member of KindHearts’ Board of Directors to produce all records of KindHearts from January 1, 2002, to February 17, 2006.
On issuing the block, OFAC sent a ‘‘blocking notice’’ to KindHearts. The notice stated:
You are hereby notified that all property and interests in property of KindHearts TTT including its U.S. representative office and all other offices worldwide, are blocked pending investigation into whether KindHearts is subject to designation pursuant to Executive Order 13224 TTT for being controlled by, acting for or on behalf of, assisting in or providing financial or material support to, and/or otherwise being associated with Hamas.
The notice also explained KindHearts did not receive prior notice of OFAC’s determination to block its assets pending investigation because it could have transferred its funds and assets, thus rendering the sanctions ineffectual. It stated that if KindHearts believed OFAC took this action in error, and wanted to challenge it, it could send a letter to the attention of the Director of OFAC explaining KindHearts’ views and providing evidence.
That same day, the Treasury Department posted a press release on its website announcing the blocking of KindHearts’ assets. The press release also stated that KindHearts’ officials and fundraisers had ‘‘coordinated with Hamas leaders and made contributions to Hamas-affiliated organizations’’ including such organizations in the West Bank and Lebanon. The press release asserted that KindHearts was founded to replace the Hamas-affiliated Holy Land Foundation for Relief and

Development [HLF] and the al-Qaida-affiliated Global Relief Foundation [GRF].2
As a result of the block, KindHearts’ assets and property, including about one million dollars in bank accounts, became frozen indefinitely. Through its blocking order, OFAC effectively shut the organization down.
In April, 2006, KindHearts’ attorney, Jihad Smaili [brother of Khaled Smaili], filed a letter in response to the block, but OFAC failed to respond to it. On November 29, 2006, KindHearts counsel requested a copy of the full administrative record being used by OFAC in its investigation. It received no response.
OFAC’s Provisional SGDT Designation of KindHearts
On May 25, 2007, more than a year after Jihad Smaili’s initial letter, and more than six months after his follow-up letter, OFAC notified KindHearts that OFAC had provisionally determined to designate KindHearts a specially designated global terrorist. In that letter it for the first time acknowledged receiving KindHearts’ challenge to the block pending investigation. OFAC’s letter stated,
We have received Jihad Smaili’s April 24, 2006 letter to TTT OFAC requesting reconsideration of OFAC’s decision to block the property and property interests of KindHearts TTT pending investigation into whether KindHearts should be designated as a Specially Designated Global Terrorist TTT Since receipt of that letter, OFAC has completed its investigation into whether KindHearts should be designated as an Specially Designated Global Terrorist and has provisionally determined that designation is appropriate.

2. By prior action against HLF and GRF, the government had put those organizations out

of operation prior to the founding of KindHearts.

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Accompanying OFAC’s letter were thirty-five unclassified and non-privileged documents on which, according to OFAC, it had relied in making the provisional determination. OFAC acknowledged it also relied on other ‘‘classified and privileged documents obtained to date TTT not authorized for disclosure, including material obtained or derived pursuant to’’ the Foreign Intelligence Surveillance Act [FISA], 50 U.S.C. § 1801 et seq.
The OFAC letter also included an unclassified three-page summary of the classified evidence. It provided no explanation of the specific charges it was considering against KindHearts or why it thought the evidence supported a potential designation.
The letter stated KindHearts could ‘‘present to OFAC any evidence or other information that it [wanted] OFAC to consider before making a final determination with respect to designation.’’ It explained ‘‘OFAC [would] consider any such information, as well as the information described above in making a final determination.’’ It also noted that if it ‘‘decide[d] to consider any additional unclassified, non-privileged materials in making this determination, it [would] advise KindHearts of that fact, provide KindHearts with copies of the materials, and give KindHearts an opportunity to respond to them.’’ OFAC initially

gave KindHearts thirty days to respond to its provisional determination.
KindHearts sought access to the full classified and unclassified administrative record to defend itself, and an extension of time in which to respond to OFAC’s unclassified submission.
On June 14, 2007, KindHearts requested access to its own records in the government’s possession. OFAC waited two months, until August 14, 2007, before notifying KindHearts’ counsel that OFAC possessed only a few of the records. The United States Attorney’s office had the rest of the records. That Office refused to provide KindHearts with a copy of the documents.3
On June 25, 2007, KindHearts’ counsel sent OFAC a twenty-eight page preliminary submission in which KindHearts attempted to, in its words, ‘‘guess at and address OFAC’s concerns.’’ It attached to that a 1369–page submission of supporting evidence. OFAC never responded to this submission.4
On June 27, 2007, KindHearts asked OFAC to perform a declassification review of the classified evidence on which it relied in issuing the blocking notice. In a letter dated August 10, 2007, OFAC agreed with KindHearts’ request, and stated it would give KindHearts thirty days after the com-

3. On April 11, 2008, more than two years after the search of KindHearts’ office and seizure of its records, the United States Attorney’s Office provided KindHearts with an electronic copy of a subset of the seized documents, but did so subject to stringent conditions. Under a protective order, KindHearts members and officers could not view the documents without court approval, and KindHearts counsel could not print or electronically copy any documents. After KindHearts filed this lawsuit, the government agreed to amend the order to permit KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.

On January 30, 2009, I granted KindHearts’ motion to modify the amended protective order. I required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. OFAC allowed KindHearts’ counsel to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel.
4. OFAC claims it ‘‘misplaced’’ the June 25, 2007, submission. It does not, however, state what constituted such ‘‘misplacing,’’ how it happened, or may have happened, or when, if ever, and how it located the submission.

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pletion of declassification review to submit a response. OFAC informed counsel that it could not state when review would be completed, and denied KindHearts’ counsel interim access to classified information.
OFAC reported no progress on the declassification review in the fourteen months between its June 27, 2007, agreement to conduct declassification review and the filing of this lawsuit. After KindHearts filed suit, the government, during a telephone call with KindHearts’ counsel on October 20, 2008, indicated it could complete the declassification review within thirty days.
On August 13, 2007, KindHearts requested further clarification of the charges against it and an extension of time until forty-five days after the completion of the declassification review. KindHearts stated it needed the extension to receive meaningful process.
On August 16, 2007, OFAC informed KindHearts that it could contact KindHearts’ employees; it also stated that any KindHearts documents in possession of such employees constituted blocked property. Use of such documents would require a license from OFAC, and existing regulations require counsel to provide basic identifying information regarding the property.5
On October 26, 2007, and December 20, 2007, KindHearts’ counsel objected to OFAC’s requirement that it identify blocked property in its possession. Counsel did not request a license to use blocked property.
On December 26, 2007, OFAC issued a license allowing KindHearts counsel to receive copies of blocked documents necessary for them to provide legal services to KindHearts.
For over two years, OFAC did not allow KindHearts to use its own funds to pay

attorneys’ fees. OFAC asserted KindHearts could pay for legal services only if those payments did not originate from its blocked funds. Immediately after the block, Jihad Smaili, KindHearts’ attorney, corresponded with OFAC regarding the release of blocked funds to pay attorney fees, but OFAC maintained that KindHearts could only pay for attorneys from ‘‘fresh funds’’ (funds raised abroad), or by obtaining a license to create a legal defense fund. Smaili resigned, and Lynne Bernabei, of the law firm Bernabei & Wachtel PLLC, and Professor David Cole applied for and were granted licenses to represent KindHearts. OFAC denied them funding from blocked assets. In late June 2008, Bernabei & Wachtel sought the assistance of the ACLU.
As of June, 2008, after its policy on attorneys fees was challenged as unconstitutional in other litigation, OFAC, after adopting a policy change, permits KindHearts to use a limited amount of its funds to pay for legal expenses. It can pay up to two lawyers $7000 each for proceedings at the administrative level, and an additional $7000 each for trial level proceedings. It can pay up to $5000 each for appellate proceedings. In March, 2009, after Bernabei & Wachtel applied for funding, OFAC granted $27,040 from KindHearts’ blocked funds for legal fees.
In December, 2008, OFAC produced declassified versions of the block and provisional determination memoranda. Since then, the government has declassified portions of block exhibits. In January, 2009, it declassified several portions of several paragraphs in the block memorandum. On March 13, 2009, OFAC declassified one of several bases for its block and threatened designation.

5. The parties dispute what information the government requires regarding the property.

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Since February 19, 2006, when OFAC first notified KindHearts of the block pending investigation, OFAC has not designated KindHearts a SDGT.6 For almost three years OFAC has blocked KindHearts’ property and property interests and criminalized all transactions with it. OFAC has effectively shut KindHearts down.
STANDARD OF REVIEW
Both plaintiff and defendants move for summary judgment. A court must enter summary judgment ‘‘against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.’’ Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the initial responsibility of informing the district court of its motion’s basis, and identifying the record’s portions that demonstrate the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. 2548. The nonmoving party ‘‘must [then] set forth specific facts showing that there is a genuine issue for trial.’’ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)).
In deciding the motion for summary judgment, the court will believe the nonmoving party’s evidence as true, it will resolve all doubts against the non-moving party, it will construe all evidence in the light most favorable to the non-moving party, and it will draw all inferences in the non-moving party’s favor. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992).

Defendants move to dismiss plaintiff’s claims under Rule 12(b)(6). A court ‘‘must accept all well-pleaded factual allegations of the complaint as true and construe the complaint in the light most favorable to the plaintiff.’’ Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir.2002) (citing Turker v. Ohio Dep’t of Rehab. & Corr., 157 F.3d 453, 456 (6th Cir.1998)); Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir.1994). The court is not bound to accept as true unwarranted factual inferences, Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987), or legal conclusions unsupported by well-pleaded facts. Teagardener v. Republic–Franklin, Inc. Pension Plan, 909 F.2d 947, 950 (6th Cir.1990).
A Rule 12(b)(6) motion to dismiss is directed solely to the complaint and any exhibits attached to it. Roth Steel Products v. Sharon Steel Corp., 705 F.2d 134, 155 (6th Cir.1983). The merits of the claims are not at issue. Consequently, a complaint will be dismissed pursuant to Rule 12(b)(6) only if there is no law to support the claims made, the facts alleged are insufficient to state a claim, or on the face of the complaint there is an insurmountable bar to relief. See Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 702 (6th Cir.1978).
DISCUSSION
1. Fourth Amendment
KindHearts argues that OFAC’s block pending investigation is an unreasonable seizure in violation of the Fourth Amendment. In blocking KindHearts’ assets, OFAC acted without a prior judicial warrant. It purports, however, to have acted on reasonable suspicion that KindHearts met the criteria for designation under E.O. 13224.

6. On October 9, 2008, I enjoined OFAC from designating KindHearts a SDGT. KindHearts sought the injunction to maintain the status

quo and avoid any possible adverse effects from such designation during the pendency of this litigation.

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Neither the IEEPA nor E.O. 13224 requires a warrant or probable cause to effect a block pending investigation. The government argues that the economic sanctions authorized by that statute and the Executive Order are not ‘‘seizures’’ and therefore the Fourth Amendment is inapplicable Alternatively, the government disputes the contention that traditional warrant and probable cause requirements apply to blocks pending investigation.
A. The Block Pending Investigation is a Fourth Amendment ‘‘Seizure’’
The first inquiry is whether OFAC’s block is a ‘‘seizure’’ in Fourth Amendment terms. If the block is not a ‘‘seizure,’’ the Fourth Amendment does not constrain the government’s conduct.
[1, 2] The Fourth Amendment protects ‘‘the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.’’ U.S. Const. amend. IV. The government seizes property when it creates ‘‘some meaningful interference with an individual’s possessory interests in that property.’’ Soldal v. Cook County, Ill., 506 U.S. 56, 61, 113 S.Ct. 538, 121 L.Ed.2d 450 (1992); see also Horton v. California, 496 U.S. 128, 133, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990); U.S. v. Jacobsen, 466 U.S. 109, 113, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984). Even ‘‘brief detentions of personal effects,’’ such as a short investigative detention of luggage at an airport, are ‘‘seizures’’ subject to Fourth Amendment scrutiny. U.S. v. Place, 462 U.S. 696, 706, 103 S.Ct. 2637, 77 L.Ed.2d 110 (1983).
i. OFAC Blocking Actions Meet the Soldal Definition of ‘‘Seizure’’
[3] The government need not take possession of or title to property to ‘‘seize’’ it; interference with the target’s possessory interest triggers Fourth Amendment scrutiny. Illinois v. McArthur, 531 U.S. 326, 330, 121 S.Ct. 946, 148 L.Ed.2d 838 (2001).

In McArthur, officers, who had probable cause to believe a suspect’s home contained marijuana, prevented him from reentering his home for the two hours needed to obtain a search warrant. Id. at 331– 332, 121 S.Ct. 946. Even though the officers had taken nothing during that period, the Court applied Fourth Amendment scrutiny to the ‘‘temporary seizure’’ of the suspect’s home. Id. at 330–31, 121 S.Ct. 946.
Those courts that have considered Fourth Amendment challenges to OFAC blocking actions under the IEEPA and E.O. 13224 disagree as to whether blocks are Fourth Amendment seizures. One view is that asset-blocking is not a seizure. Islamic Am. Relief Agency v. Unidentified FBI Agents, 394 F.Supp.2d 34, 47–48 (D.D.C.2005); Holy Land Foundation for Relief and Development v. Ashcroft, 219 F.Supp.2d 57, 79 (D.D.C.2002).
In upholding the government’s action in those cases, the courts applied the standard for identifying a taking under the Takings Clause of the Fifth Amendment, rather than the Soldal standard for a Fourth Amendment seizure. In Holy Land, supra, 219 F.Supp.2d at 79, the court’s analysis centered on whether an OFAC asset-blocking procedure is a permanent forfeiture or causes title to pass to the government. Id.
As support for its Takings Clause approach, the court In Holy Land, citing Tran Qui Than v. Regan, 658 F.2d 1296, 1301 (9th Cir.1981), IPT Co. v. U.S. Dept. of Treasury, 1994 WL 613371, at *5–6 (S.D.N.Y.), and Can v. U.S., 820 F.Supp. 106, 109 (S.D.N.Y.1993), stated that, because asset blocking does not ‘‘vest’’ title in the government, it is not a ‘‘forfeiture.’’ 219 F.Supp.2d at 79. None of the cases cited by Holy Land involves, however, a Fourth Amendment claim.

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Likewise, in Holy Land, the court cited Cooperativa Multiactiva de Empleados de Distribuidores de Drogas v. Newcomb, Civ. No. 98–0949, slip op. at 13–14 (D.D.C. Mar. 29, 1999), for the statement that ‘‘blocking bars transactions but does not confiscate property and is not tantamount to a forfeiture.’’ Id. Plaintiffs in Cooperativa Multiactiva, however, raised no Fourth Amendment challenge to the blocking notice. Id. at 4. In Cooperativa Multiactiva, the court discussed questions of title and forfeiture to determine whether a blocking notice was a ‘‘fine’’ and compliance with the federal forfeiture statute, not to determine whether it was a ‘‘seizure.’’ Id. at 21–22.
Finally, in Holy Land, the court cited D.C. Precision Inc. v. U.S., 73 F.Supp.2d 338, 343 n. 1 (S.D.N.Y.1999), for the proposition that ‘‘assets blocked by the government are not seized.’’ Id. Despite the use of the word ‘‘seized,’’ the cited passage in D.C. Precision refers to a Takings Clause claim. Id. Plaintiffs did not raise a Fourth Amendment claim in D.C. Precision. Id.
In contrast to Holy Land and related cases, the court in Al–Haramain Islamic Foundation, Inc. v. U.S. Dept. of Treasury, 585 F.Supp.2d 1233, 1263 (D.Or. 2008), concluded that OFAC asset-blocking is a seizure subject to Fourth Amendment analysis. Reliance on the Takings Clause was inappropriate, the court stated, because ‘‘[t]he Fourth Amendment imposes a lower threshold than does the Fifth Amendment.’’ Id. at 1262. A blocking order, the court stated, would be a taking only ‘‘if it resulted in an appropriation of property for the government’s use’’ or if the government’s actions eliminated ‘‘all economically valuable use of the property.’’ Id.
A Fourth Amendment seizure, in contrast, does not result in passage of title to the government or even necessarily permanent deprivation. A seizure affects a

possessory interest: Id. at 1263. A Fourth Amendment seizure may often lead to permanent deprivation of the property ‘‘taken’’ by government officers, but that is not always so. Indeed, Fed.R.Crim.P. 41(g) provides a means for seeking return of seized property.
[4] Viewing the consequences of a blocking order in a Fourth Amendment light, the court in Al Haramain stated that because ‘‘[e]ven a temporary deprivation of property’’ constitutes a seizure, an OFAC blocking action affects Fourth Amendment rights. Id. If merely ‘‘holding luggage for 90 minutes’’ constitutes a seizure, then surely placing an indefinite freeze on all an entity’s assets is as well. Id.
This conclusion is not only reinforced, but, indeed, made irrefutable on consideration of the fact that the very purpose of an OFAC blocking action is to ‘‘depriv[e] the designated person of the benefit of the property, including services, that might otherwise be used to further ends that conflict with U.S. interests.’’ Al Haramain, supra, 585 F.Supp.2d at 1263. An OFAC block interferes with possessory rights, and is, in Fourth Amendment terms a seizure.
ii. Whether the History of the IEEPA, TWEA and the Fourth Amendment Justify Excluding OFAC Blocking Actions from Fourth Amendment Scrutiny
The government offers two arguments as to why I should follow the decision in Holy Land and withhold Fourth Amendment scrutiny from a block pending investigation. First, the government argues that the Supreme Court historically has never applied the Fourth Amendment to imposition of economic sanctions under the TWEA or the IEEPA. Therefore, the government contends, I should not do so in this case.

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Second, the government urges that deference to the executive’s unique role in foreign affairs should override any judicial impulse to invoke the Fourth Amendment. The government bases this argument on the history of TWEA and IEEPA economic blocking actions.
Neither argument offers a compelling reason for foregoing Fourth Amendment analysis, much less for departing from the Supreme Court’s definition of ‘‘seizure’’ in Soldal.
Looking to history for support for its first contention, the government states, ‘‘[i]n the nearly 100 years since the TWEA was passed, no Court has held that the executive must obtain a warrant to conduct an economic blocking authorized by either TWEA or IEEPA.’’ [Doc. 36, at 63]. To undertake a Fourth Amendment analysis, the government claims, would be to disregard a ‘‘systematic, unbroken, executive practice, long pursued to the knowledge of Congress [and the courts] and never before questioned.’’ Id.
For support, the government cites several cases in which the Supreme Court, in the government’s view, has consistently not subjected blocking actions to Fourth Amendment. See Regan v. Wald, 468 U.S. 222, 235, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984) (upholding restrictions on United States citizen travel to Cuba under the TWEA); Dames & Moore v. Regan, 453 U.S. 654, 654, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981) (IEEPA authorizes the president to nullify attachments against property of the Iranian government and to transfer Iranian assets); Orvis v. Brownell, 345 U.S. 183, 73 S.Ct. 596, 97 L.Ed. 938 (1953) (executive order blocking assets of Japanese nationals under TWEA prevents attachment by creditor of Japanese nationals); Propper v. Clark, 337 U.S. 472, 69 S.Ct. 1333, 93 L.Ed. 1480 (1949) (upholding freeze on Austrian property under the

TWEA, despite inconvenience freeze caused to American citizens).
The government accurately depicts these cases and describes their results. What is missing, though, is acknowledgment that in those cases none of the government’s adversaries asserted a Fourth Amendment interest. Like lower courts, see U.S. v. Collier, 246 Fed.Appx. 321, 334–335 (6th Cir.2007) (unpublished disposition) (failing sua sponte to consider Fourth Amendment issues not error); Hartmann v. Prudential Ins. Co. of America, 9 F.3d 1207, 1214 (7th Cir.1993) (‘‘Our system TTT is not geared to having judges take over the functions of lawyers, even when the result would be to rescue clients from their lawyers’ mistakes’’), the Supreme Court routinely does not consider issues not raised by the parties. Absence of discussion of the Fourth Amendment in the cases cited by the government says nothing about how a Fourth Amendment analysis should come out here.
Failure of plaintiffs in the those cases probably did not arise from lawyerly oversight: the economic sanctions targeted foreign governments, and neither foreign governments nor non-resident foreign nationals enjoy Fourth Amendment protection. In U.S. v. Verdugo–Urquidez, 494 U.S. 259, 265, 110 S.Ct. 1056, 108 L.Ed.2d 222 (1990), the Supreme Court held that the Fourth Amendment does not apply to search by American authorities of the Mexican residence of a Mexican citizen and resident. The Court, on examining the text of the Amendment, concluded that its central motivation was to ‘‘protect the people of the United States against arbitrary action by their own government.’’ Id. Thus, the Fourth Amendment, the Court stated, does not protect aliens outside United States territory, nor does it protect foreign governments. Id.

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KindHearts’ situation differs strikingly and significantly from that of the foreign governments and foreign assets at issue in the TWEA and IEEPA cases on which the government relies.7 KindHearts is an American corporation based in Toledo, Ohio. Its assets, presumably, came from persons resident in this country. Those assets were in this country when the government seized them. This case does not involve a nation-targeted embargo.
KindHearts is indisputably one of ‘‘the people’’ protected by the Fourth Amendment. If the Constitution affords KindHearts no protection from unreasonable searches and seizures, whom among ‘‘the people’’ does it protect, and who among the people can be certain of its protection?
The government’s argument, moreover, ignores compelling parallels between the instant case and the colonial-era activities inspiring the Founders to include the Fourth Amendment in our fundamental charter of liberties. Indiscriminate customs searches, unregulated by judicial approbation or oversight, were the ‘‘first inducement’’ to American attitudes against such promiscuous searches and seizures, William J. Cuddihy, The Fourth Amendment: Origins and Original Meaning, 253 (2009). Despised writs of assistance allowing customs officials to employ unfettered discretion in their search for and seizure of smuggled goods and contraband were a ‘‘major cause of the Revolution.’’ Tracy Maclin, The Complexity of the Fourth Amendment: A Historical Review, 77 B.U.L.R. 925, 945 (1997); see also Nelson B. Lasson, The History & Development of

the Fourth Amendment to the U.S. Constitution, 51 (1937).
In the late 1750s and early 1760s, a controversy erupted in the Massachusetts Bay Colony over gubernatorial warrants and writs of assistance to enforce customs laws. Great Britain, embroiled from 1754– 1763 in the Seven Years’ War, enacted customs laws proscribing American commerce with Spanish and French colonies. Great Britain also implemented restrictive trade relationships between itself and the North American colonies. Those laws favored British interests at the expense of colonial merchants. Lasson, supra, at 52; Cuddihy, supra, at 378–380. Evasion of those laws and restriction—smuggling— became more than just a colonial pastime: for many American merchants it was the way of life. It was, as well, often of benefit to Britain’s enemies commercially. Lasson, supra, at 52.
In response to this unacceptable situation, Governor Shirley of Massachusetts issued warrants giving customs officials authority forcibly to enter houses and other buildings, and, once inside, to exercise unfettered discretion to search for and seize contraband. Maclin, supra, 77 B.U.L.R. at 945; Cuddihy, supra, at 378. Public reaction to this exercise of extreme executive authority caused the Governor to require customs officers, before they could conduct such searches, to obtain Writs of Assistance from Crown judges. Maclin, supra, 77 B.U.L.R. at 945.
Unlike the search warrants with which every American judge, prosecutor and defense attorney is now familiar, colonial

7. In Dames & Moore, Wald and Propper, the government blocked assets of foreign governments. Its blocking actions affected American citizens, but only to the extent that they conducted business transactions involving the property of foreign governments and nationals. Because the targets of those sanctions were not clearly among ‘‘the people’’ whom

the Fourth Amendment protects, it is unsurprising that the parties did not bring Fourth Amendment claims. See Al–Aqeel v. Paulson, 568 F.Supp.2d 64, 70–71 (D.D.C.2008) (concluding that Saudi Arabian citizen subject to OFAC asset seizure may not bring a Fourth Amendment claim because claimant alleged interference with overseas assets only).

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Writ of Assistance were ‘‘a continuous license and authority’’ valid for the ‘‘whole lifetime of a reigning sovereign TTT empower[ing] the officer his deputies and servants to search, at their will, wherever they suspected uncustomed goods to be, and to break open any receptacle or package falling under their suspecting eye.’’ Id. The judges of the Superior Court of Judicature who issued Writs of Assistance lacked power to refuse to issue the writs or to review specific searches or seizures. Maclin, supra, 77 B.U.L.R at 946; Cuddihy, supra, at 379.
When King George II died in 1760, all previously-issued writs expired. Customs officers sought new writs. Id. at 380–381. A merchants’ association, The Society for Promoting Trade and Commerce Within the Province, retained James Otis Jr. to challenge the reissuance. Id. at 380. This led to the decision in Paxton’s Case. Culhuddy, supra, at 380. That case ‘‘intensified public antipathy to the writs of assistance’’ and triggered a flood of public commentary on search and seizure. Id. at 395.
Challenging Writs of Assistance, Otis and other critics delineated and condemned the abuses left in their wake. The Writs, as a commentator in the Boston Gazette wrote, allowed writ-holders to ‘‘break open doors, trunks, chests, and boxes—alms houses, brideswells, jails or churches—never mind a dwelling house’’— this listing making clear that no premises were safe. Id. at 396. Another commentator feared that writ-holders would look unchecked ‘‘wherever he shall PLEASE to suspect uncustom’d goods are lodg’d.’’ Id.
Despite these concerns and objections and Otis’s arguments, the court re-issued the Writs of Assistance. Id. at 395.
Though unsuccessful, Otis’s arguments were the ‘‘first recorded declaration’’ of the Fourth Amendment’s requirement of a specific warrant. Id. at 382. Others in

England and the colonies had criticized the writs of assistance, general warrants, and other forms of indiscriminate search and seizure. Otis first contended that specific warrants—in Fourth Amendment terms, warrants ‘‘particularly describing the place to be searched and things to be seized’’— as alone appropriate if the sanctity one’s home and security of one’s possessions were to be assured under, as Otis argued, the ‘‘British Constitution, English common law, natural law, and the higher law.’’ Id. at 387.
As with IEEPA and TWEA, the initial impetus for executive action at the outset of the era leading to Paxton’s Case was to deprive the enemies of economic benefits: restricting trade with the enemy was the purpose of both Governor Shirley’s wartime writs to customs officers and the TWEA. In time, these purposes, and the authority by which government sought to accomplish them led to a practice of farreaching and open-ended searches for and seizures of private property.
Unlike the system under which OFAC has operated thus far, the colonial system came to involve judges in the issuance of the writs. But their participation did little to control the duration of the authority to conduct searches, and did not encompass judicial involvement or oversight during implementation of that authority.
The centrality of indiscriminate customs searches and seizures to the development, purposes and meaning of the Fourth Amendment is of special relevance to this case. Like James Otis, the attorneys for KindHearts claim for their client ‘‘the right TTT to be secure in their TTT papers and effects.’’ Also like Otis, they argue that how the government has been exercising its authority to regulate commercial affairs can violate that right and destroy that security.

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To find the Fourth Amendment inapplicable to OFAC blocking actions would disregard the Amendment’s history and its role as a bulwark against the abuses and excesses of unchecked governmental power.
iii. Whether Deference to the Executive Regarding Foreign Affairs Requires Excluding OFAC Blocking Actions From Forth Amendment Scrutiny
The government’s second argument is that deference to the executive should cause me to refrain from viewing its conduct through the lens of the Fourth Amendment. Courts, in the government’s view, ought not involve themselves with ‘‘the exercise of the executive’s most uniquely reserved powers—conducting foreign affairs and protecting national security.’’ [Doc. 36, at 36]. Instead, I should heed Justice Jackson’s statement in his concurring opinion in Youngstown Sheet & Tube v. Sawyer, 343 U.S. 579, 635–36, 72 S.Ct. 863, 96 L.Ed. 1153 (1952), that ‘‘A seizure executed by the President pursuant to an Act of Congress would be supported by the strongest presumptions and the widest latitude of judicial interpretation, and the burden of persuasion would rest heavily on any who might attack it.’’ 8
The defendants claim that this means that the President’s powers ‘‘can indeed be so broad and uniquely reserved to the president that questions of Fourth Amendment applicability do not come into play.’’ [Doc. 73, at 34]. Defendants also argue that subjecting OFAC’s actions to Fourth Amendment strictures is improper because when the President ‘‘execute[s] seizures with explicit authorization by congress, the President’s ‘‘authority [is] at its maximum’’.’’ [Doc. 73, at 35]. The government supports this assertion with a further quotation from Justice Jackson:

In the practical working of our government we have already evolved a technique within the framework of the Constitution by which normal executive powers may be considerably expanded to meet an emergency. Congress may and has granted extraordinary authorities which lie dormant in normal times but may be called into play by the Executive in war or upon proclamation of a national emergency.
Youngstown Sheet & Tube, supra, 343 U.S. at 652, 72 S.Ct. 863.
Defendants also argue that U.S. v. Curtiss–Wright, 299 U.S. 304, 57 S.Ct. 216, 81 L.Ed. 255 (1936), stands for the principle that the ‘‘strict limitation’’ on federal powers over ‘‘internal affairs’’ does not apply in the realm of ‘‘external affairs.’’ [Doc. 73, at 35].
The government’s reliance on the propositions expressed by Justice Jackson and in Curtiss–Wright conflates two discrete questions about the limitations of federal executive power. The first question in evaluating the validity of executive action is whether any of the recognized sources of executive authority—Article II, powers inherent in national sovereignty or a valid delegation of authority from Congress— affirmatively empower the executive to take action, such as a block pending investigation. A second, separate question is whether a the manner in which the executive has exercised it authority in a specific instance violates any of the restrictions on federal authority protecting individual liberties.
In Youngstown Sheet & Tube and Curtiss–Wright the Court dealt exclusively with the first question. In this case, however, the first question is not at issue because the parties do not dispute that the

8. Justice Jackson joined in the judgment of the majority that President Truman lacked

constitutional authority to seize a steel company’s assets via Executive Order.

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executive has the general power to block pending investigation. The issue here— whether, in this instance, OFAC has exercised its authority in violation of the Fourth Amendment—involves the second question.
When Justice Jackson in Youngstown Sheet & Tube described the President’s ‘‘authority at its maximum’’ and the need for ‘‘the widest latitude of judicial interpretation,’’ he was describing the President’s power to act vis-a-vis Congress, not restrictions on presidential power imposed by the Bill of Rights. See 343 U.S. at 635, 72 S.Ct. 863. This is apparent from the context of the quotation, which is that when Congress expressly authorizes the action, the President possesses all his authority ‘‘in his own right plus all that Congress may delegate.’’ Id.
Justice Jackson also stated that if a court should invalidate presidential action that Congress has expressly authorized, ‘‘it usually means that the Federal Government as an undivided whole lacks power.’’ Id. Legislation cannot authorize the President to ignore the Bill of Rights. Under the Fourth Amendment, the federal government ‘‘as an undivided whole ’’ lacks entirely the power to conduct unreasonable searches and seizures. Id.
That the Court in Youngstown Sheet & Tube refers to the President’s actions as a ‘‘seizure’’ in no way suggests that that case involved a Fourth Amendment search or seizure. The Steelworkers Union had announced its members would strike after unsuccessful labor-management negotiations. Id. at 864. On the eve of the strike, President Truman ordered the Secretary of Commerce to assume control of the steel mills and keep them running. Id. at 865.
The President’s actions, and the government’s operation of the mills temporarily did not deprive the shareholders of any of the their property interests in the compa-

ny. The company did not claim that President Truman had engaged in an unreasonable seizure under the Fourth Amendment. The issue, rather, was whether the President had the authority to adopt the ‘‘technique of seizure’’ as a ‘‘method of solving labor disputes,’’ even though Congress had expressly declined to incorporate this technique in the Taft– Hartley Act. Id. at 866. The Court noted that Congress’s power to authorize this method was ‘‘beyond question’’ because Congress may ‘‘authorize the taking of private property for public use.’’ Id. at 867. In view of the absence in Youngstown Sheet & Tube of citation to, argument about, discussion of and adjudication on the basis of Fourth Amendment principles and doctrine, the decision in that case, not the Fourth Amendment, is inapplicable here.
Similarly, the Court’s opinion in Curtiss–Wright likewise addressed whether the President possesses inherent, unenumerated powers over foreign affairs—not whether such powers were subject to Bill of Rights limitations. 299 U.S. at 319, 57 S.Ct. 216.
In Curtiss–Wright, an arms manufacturer was charged with conspiring to sell arms to Bolivia in violation of a Joint Resolution of Congress authorizing the President to criminalize such arms sales and a Presidential proclamation issued under that authority. Id. at 312–313, 57 S.Ct. 216. The Court rejected the company’s challenge to Congress’s delegation of authority to the President. Id. at 315–316, 333, 57 S.Ct. 216. The federal government, the Court held, has and can, with regard to the nation’s foreign affairs, exercise the powers inherent in national sovereignty. Such exercise did not violate the rights inuring to the states. Id. at 316, 57 S.Ct. 216.

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Further, because ‘‘[t]he President is the sole organ of the nation in its external relations, and its sole representative with foreign nations,’’ he may exercise powers ‘‘in the field of international relations’’ without needing ‘‘a basis for its exercise in an act of Congress.’’ Id. at 220–221.
The Court’s opinion in Curtiss–Wright makes indisputably clear fundamental constitutional principles of federalism and separation of powers endow the President with extensive, and generally unilateral authority over our foreign affairs, especially with regard to our relations with other countries. Though the Court upheld the exercise of that authority against an American company and others engaged in international commerce, it did not address, much less declare, that such authority, if it impinged on freedoms guaranteed under the Bill of Rights, was in all circumstances and for all times unrestricted and uncontrollable.
Contrary to defendants’ claims, courts have held that the executive’s domestic actions—even when taken in the name of national security—must comport with the Fourth Amendment. See, e.g. U.S. v. U.S. Dist. Court, 407 U.S. 297, 320, 92 S.Ct. 2125, 32 L.Ed.2d 752 (1972) (‘‘the President’s domestic security role TTT must be exercised in a manner compatible with the Fourth Amendment’’); Coolidge v. New Hampshire, 403 U.S. 443, 461, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971) (national security ‘‘is not a talisman in whose presence the Fourth Amendment fades away and disappears.’’); U.S. v. Bin Laden, 126 F.Supp.2d 264, 273 (S.D.N.Y.2000) (‘‘even in the exercise of his foreign affairs power, the President is constrained by other provisions of the Constitution.’’).
OFAC’s blocking action against KindHearts, therefore, is, despite the deference generally due to presidential acts relating to our foreign relations and affairs, subject to some degree of Fourth Amendment

scrutiny. This case raises questions about the extent and consequences of such scrutiny.
B. Whether OFAC Must Have a Warrant and Probable Cause for the Seizure to be Reasonable Under the Fourth Amendment
[5] The next issue is whether OFAC satisfied the requirements of the Fourth Amendment when it blocked KindHearts’ assets pending investigation. Generally, the Fourth Amendment permits seizures only on the basis of probable cause and a judicial warrant listing, with particularity, the item or items to be seized. Place, supra, 462 U.S. at 701, 103 S.Ct. 2637. The government contends, inter alia, that its actions were lawful, and could be undertaken on the basis of reasonable suspicion, rather than probable cause to believe that KindHearts engaged in acts proscribed by the IEEPA and E.O. 13224.
i. Generally, the Fourth Amendment Requires a Warrant and Probable Cause
Defendants argue that this court should jettison the probable cause and warrant requirements in favor of an open-ending balancing of interests. Defendants contend that courts are free to apply an indeterminate ‘‘reasonableness’’ inquiry in light of the doctrine that ‘‘the Fourth Amendment does not proscribe all searches and seizures, but only those that are unreasonable.’’ Skinner v. Railway Labor Executives’ Ass’n, 489 U.S. 602, 619, 109 S.Ct. 1402, 103 L.Ed.2d 639 (1989).
[6] The defendants base their argument on the fact that the Fourth Amendment contains two textually distinct clauses, the reasonableness clause barring ‘‘unreasonable searches and seizure’’ and a warrant clause stating that ‘‘no Warrants shall issue, but upon probable cause.’’ U.S. Const. amend. IV. Reason-

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ableness is the ultimate standard under the Fourth Amendment. Pennsylvania v. Mimms, 434 U.S. 106, 108–109, 98 S.Ct. 330, 54 L.Ed.2d 331 (1977) (‘‘[R]easonableness in all the circumstances of the particular governmental invasion of a citizen’s personal security’’ is the ‘‘touchstone’’ of Fourth Amendment analysis); Soldal, supra, 506 U.S. at 61–62, 113 S.Ct. 538. This does not, however, mean that courts always are free to conduct open-ended balancing of interests whenever the government has seized property.
[7] On the contrary, searches and seizures are usually ‘‘reasonable’’ only when conducted with a judicial warrant supported by probable cause. Place, supra, 462 U.S. at 701, 103 S.Ct. 2637. The reasonableness clause under the Fourth Amendment ‘‘derives content and meaning through reference to the warrant clause.’’ U.S. Dist. Court, supra, 407 U.S. at 309– 310, 92 S.Ct. 2125. Though the ultimate inquiry is reasonableness, ‘‘the Amendment does not leave the reasonableness of most seizures to the judgment of courts or government officers: the Framers of the Amendment balanced the interests involved and decided that a seizure is reasonable only if supported by a judicial warrant based on probable cause.’’ Place, supra, 462 U.S. at 722, 103 S.Ct. 2637 (Blackmun, J. concurring). Under most circumstances searches and seizures conducted without a warrant are ‘‘per se unreasonable under the Fourth Amendment—subject only to a few specifically established and well-delineated exceptions.’’ Katz v. U.S., 389 U.S. 347, 357, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). Thus, as stated in Place, supra, 462 U.S. at 701, 103 S.Ct. 2637, ‘‘In the ordinary case, the Court has viewed a seizure of personal property as per se unreasonable within the meaning of the Fourth Amendment unless it is accomplished pursuant to a judicial warrant issued upon probable cause and

particularly describing the items to be seized.’’
[8, 9] Two recognized exceptions to the warrant requirement might, however, apply in this case. First, ‘‘special needs’’ warrantless searches and seizures need only be reasonable under all the circumstances; no warrant or probable cause is required. See, e.g., Griffin v. Wisconsin, 483 U.S. 868, 873, 107 S.Ct. 3164, 97 L.Ed.2d 709 (1987) (upholding warrantless, suspicionless searches of probationers’ homes); Illinois v. Lidster, 540 U.S. 419, 426, 124 S.Ct. 885, 157 L.Ed.2d 843 (2004) (upholding warrantless, suspicionless stops at a roadblock to gather information about a hit-and-run accident). Second, if exigent circumstances exist, the warrant requirement, but not the requirement of probable cause, may be excused. See, e.g., U.S. v. Johnson, 22 F.3d 674, 680 (6th Cir.1994) (describing general types of exigencies).
ii. Whether the Block is a Special Needs Seizure
[10] Special needs searches and seizures share at least three basic characteristics. First, they must serve a purpose above and beyond normal criminal law enforcement. See Ferguson v. City of Charleston, 532 U.S. 67, 81–86, 121 S.Ct. 1281, 149 L.Ed.2d 205 (2001); City of Indianapolis v. Edmond, 531 U.S. 32, 41–47, 121 S.Ct. 447, 148 L.Ed.2d 333 (2000). Second, circumstances must make ‘‘the warrant and probable cause requirement impracticable.’’ See Griffin, supra, 483 U.S. at 873, 107 S.Ct. 3164. Third, the method of search or seizure must have built-in limits, such as a confined geographic scope or regular, suspicionless application, that restrict executive discretion and ensure that all citizens know the circumstances under which they are subject to a special needs search or seizure. See

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New York v. Burger, 482 U.S. 691, 702–03, 107 S.Ct. 2636, 96 L.Ed.2d 601 (1987).
Administrative searches of closely-regulated industries are one type of special needs search. Officials responsible for administrative searches need engage in no prior assessment of behavior. The lack of individualized probable cause is deemed does not violate the Fourth Amendment where the search relates to a closely regulated endeavor or enterprise. Anyone engaging in such activity can reasonably expect inspection.
The Supreme Court upheld such searches In Burger, id. at 702, 107 S.Ct. 2636, the Court upheld suspicionless, warrantless inspection of plaintiff’s automobile chop shop. The Court noted that chop shops are closely regulated, reducing plaintiff’s expectation of privacy and putting their operators on notice that inspections may occur. Id. The Court also concluded that the state’s inspection program was sufficiently regular and certain because it ‘‘carefully limited [inspections] in time, place, and scope.’’ Id. at 702–03, 107 S.Ct. 2636. These built-in limits on executive discretion provided ‘‘a constitutionally adequate substitute for a warrant’’ and gave the owner with notice of when, where and to what extent he was subject to being searched. Id. In concluding that the inspection program was reasonable, the court noted that there was a ‘‘substantial government interest’’ behind the regulatory regime and that warrantless, suspicionless inspections were ‘‘necessary to further the regulatory regime.’’ Id. Accord, e.g., Donovan v. Dewey, 452 U.S. 594, 600, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1981) (warrant constitutionally required when warrantless searches ‘‘are necessary to further a regulatory scheme and the TTT regulatory presence is sufficiently comprehensive and defined’’ that owner knows property is ‘‘subject to periodic inspections undertaken for specific purposes.’’).

Searches and seizures at roadblock check points are another type of warrantless special needs search that must only be ‘‘reasonable’’ under all the circumstances to comply with the Fourth Amendment. In Michigan Dept. of State Police v. Sitz, 496 U.S. 444, 455, 110 S.Ct. 2481, 110 L.Ed.2d 412 (1990), the Court upheld stops at a checkpoint at which police officers detained drivers briefly and tested them for sobriety. The officers stopped every vehicle and checked every driver for intoxication. Id. at 447, 110 S.Ct. 2481. On average, the stops lasted twenty-five seconds. Id. at 448, 110 S.Ct. 2481. See also Lidster, supra, 540 U.S. at 426, 124 S.Ct. 885 (extending Sitz to checkpoints designed to gather information after a nearby hit-and-run accident). Police may not, however, set up roadblocks to detect ordinary criminal wrongdoing. Edmond, supra, 531 U.S. at 37, 121 S.Ct. 447 (drug interdiction roadblock unconstitutional because police may not conduct regular suspicionless searches and seizures solely to enforce criminal laws).
A third type of special needs search and seizure occurs at border crossings. In U.S. v. Martinez–Fuerte, 428 U.S. 543, 551–554, 96 S.Ct. 3074, 49 L.Ed.2d 1116 (1976), the Court applied a balancing test to uphold a Border Patrol traffic-checking program on highways within one hundred miles of the Mexican border. In U.S. v. Boumelhem, 339 F.3d 414, 421 (6th Cir. 2003), the Sixth Circuit upheld a warrantless and suspicionless search of a railroad shipping container from abroad, noting the ‘‘power of the sovereign to protect itself by stopping and examining persons and property crossing into this country.’’ In so holding, the court noted that warrantless entry and exit searches date back to the time of the Framers. Id. at 422 n. 5; see also U.S. v. Montoya de Hernandez, 473 U.S. 531, 538, 105 S.Ct. 3304, 87 L.Ed.2d 381 (1985) (‘‘Routine searches of the per-

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sons and effects of entrants are not subject to any requirement of reasonable suspicion, probable cause, or warrant, and firstclass mail may be opened without a warrant on less than probable cause. Automotive travelers may be stopped at fixed checkpoints near the border without individualized suspicion’’). Border searches are restricted geographically to regions surrounding the border because individuals have a lesser expectation of privacy at the border than in the interior. Id. at 539, 105 S.Ct. 3304.
[11] OFAC’s exercise of its blocking power lacks the characteristics that excuse the warrant and probable cause requirements as to administrative, roadblocks, and border searches and seizures. Most importantly, OFAC’s blocking power entails no built-in limitations curtailing executive discretion and putting individuals on notice that they are subject to blocking.
Traffic checkpoints and border searches are focused geographically, as they occur only at he checkpoint or near the national border. In cases of administrative searches, the government may only search discrete categories of individuals—such as closely-regulated businesses—and even then the regulatory regime must be ‘‘carefully limited in time, place and scope.’’ Burger, supra, 482 U.S. at 702–03, 107 S.Ct. 2636.
Second, in method, OFAC’s blocking power has more in common with ordinary law enforcement activity than with any of the activities considered in the special needs cases. OFAC does not block pending investigation every entity sending money overseas: it only blocks those it suspects have violated the law. In this case, OFAC targeted KindHearts as a potential violator and conducted a preliminary investigation before imposing the block. It necessarily had gathered information in advance that it considered suffi-

cient to justify seizure of KindHearts’ assets.
No such prior determination occurs with a border crossing or checkpoint. Everyone passing through is stopped, detained and examined.
Thus, unlike traditional law enforcement investigatory activities, special needs searches expose everyone within their scope or zone of their operation to a cursory search or brief seizure in the interest of public safety and welfare or border integrity.
OFAC’s blocking power, which focuses on single entities, and does so on the basis of some suspicion, more closely resembles the modus vivendi and modus operandi of traditional law enforcement investigative activity than warrantless searches allowed under the special needs exception. This is true, even though, at this point, OFAC’s actions may be deemed ‘‘civil,’’ but actions violating E.O. 13224 may also become the basis for criminal sanctions. Investigations with the potential for criminal prosecution have historically triggered the warrant and probable cause requirements. See Edmond, supra, 531 U.S. at 37–38, 121 S.Ct. 447.
Finally, for the special needs exception to apply, both the probable cause and warrant requirements must categorically be impracticable in light of the government’s purpose. Griffin, supra, 483 U.S. at 873, 107 S.Ct. 3164. The government provides no explanation as to why the probable cause warrant requirements were impracticable in this case. OFAC has shown no cause to believe or conclude that requiring it to develop probable cause and submit such cause to judicial evaluation would have impaired its enforcement efforts and ability otherwise to act in this case.
In conclusion, OFAC blocking actions do not fit within the special needs exception

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to the warrant and probable cause requirements.
iii. Whether Exigency Excuses the Warrant Requirement
Even if an OFAC blocking action is not a special needs search, a showing of exigent circumstances could eliminate the need for a warrant. Judicially endorsed exigent circumstances are, however, ‘‘few in number and carefully delineated.’’ U.S. Dist. Court, supra, 407 U.S. at 318, 92 S.Ct. 2125.
The Sixth Circuit has identified four general categories of exigency justifying warrantless searches: ‘‘(1) hot pursuit of a fleeing felon, (2) imminent destruction of evidence, (3)[the] need to prevent a suspect’s escape, and (4) a risk of danger to police or others.’’ Johnson, supra, 22 F.3d at 680. None of these situations exists here except, possibly, the need to avoid destruction of evidence (or, in this case, dissipation of assets, which I discuss below). Thus, this case does not fit into a standard exigent circumstances exception to the warrant requirement.
[12] That this is so does not answer the government’s claim of exigency in toto. A court may still find that exigent circumstances existed on consideration of: ‘‘(1) whether immediate government action was required; (2) whether the governmental interest was sufficiently compelling to justify a warrantless intrusion; (3) whether the citizens’ expectation of privacy was diminished in some way.’’ U.S. v. Rohrig, 98 F.3d 1506, 1521 (6th Cir.1996).

[13] For ‘‘immediate government action’’ to be necessary, law enforcement must have an objective, factual basis to believe that ‘‘the loss or destruction of evidence is imminent.’’ U.S. v. Sangineto– Miranda, 859 F.2d 1501, 1512 (6th Cir. 1988). For a warrantless search to be sustained, a ‘‘person of reasonable caution’’ must be able to conclude that ‘‘evidence of a federal crime would probably be found on the premises and also that such evidence would probably be destroyed within the time necessary to obtain a search warrant.’’ Id.
Law enforcement, however, may not merely assume that a suspect will destroy or dispose of evidence or contraband simply because he is aware the government suspects him of an offense. Thus, in Vale v. Louisiana, 399 U.S. 30, 35, 90 S.Ct. 1969, 26 L.Ed.2d 409 (1970), the Court held that an arrest outside a residence does not justify warrantless search of arrestee’s house. Officers, the Court stated, could not conduct such search simply on the basis that ‘‘time is of the essence’’ and ‘‘officers never know whether there is anyone on the premises to be searched who could very easily destroy the evidence.’’ Id. at 34, 90 S.Ct. 1969.9
The gravity of the underlying offense is also a consideration. Rohrig, supra, 98 F.3d at 1516. In Welsh v. Wisconsin, 466 U.S. 740, 742–743, 104 S.Ct. 2091, 80 L.Ed.2d 732 (1984), the Court rejected the contention that exigency authorized warrantless entry into a driver’s home to arrest him after he had left the scene of an

9. In Vale the Court addressed the contention that because narcotics are ‘‘easily removed, hidden, or destroyed’’ it would be unreasonable to require officers to secure a warrant before entering a home following a suspect’s arrest outside the residence, which could have alerted persons inside the home and led to the loss of evidence. Id. at 34, 90 S.Ct. 1969. The Court rejected this reasoning, stat-

ing that the government bears the burden of showing that an ‘‘exceptional situation’’ justified the warrantless entry; speculation is not enough. Id. In this case there is no basis in the record for concluding that KindHearts was aware that the government was moving towards issuance of a blocking notice before it issued the notice.

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accident. The officers’ desire to ascertain the suspect’s blood-alcohol level before dissipation was insufficient to justify entry without a warrant. Id. In so holding, the Court noted that police were investigating the suspect for a ‘‘nonjailable traffic offense that constituted only a civil violation under the applicable state law.’’ Id. at 746 n. 6, 104 S.Ct. 2091.
[14] In this case, the Rohrig factors do not weigh in favor of an absolute exception to the warrant requirement. First, OFAC’s own actions belie its claim that this situation required immediate action, making a prior judicial warrant impracticable. OFAC conducted a preliminary investigation of presently indeterminate duration. That investigation led to the blocking order. Nothing in the record supports any contention that time was of the essence. There is no basis for finding that something clearly, or to a very substantial likelihood, would have been lost by taking the time to prepare the documents for and present them to a judge and receive judicial authority for the seizure.
The second Rohrig factor asks whether the government had a sufficiently compelling interest in swift action to justify a warrantless intrusion. The government has an indisputably important interest in preventing the flow of funds to overseas

terrorist organizations. This is so, even if those organizations, at least for now, are not directly engaged in hostile acts against the United States or its citizens. Among his other Article II powers, the President can conclude that our national interest includes working with other countries to combat terrorism within or adjacent to their borders.
At issue is not, however, the policy or its undoubted importance. At issue, rather, is whether the government has shown that the need for implementing that policy effectively and expeditiously required doing so without judicial authorization. The importance of a particular policy or program does not, without more, excuse the warrant requirement.
The exigent circumstances exception is bottomed on need for immediate action to avoid loss or destruction of evidence. To come within this exception in this case, the government has to show that reasonable grounds existed at the time of the blocking notice to apprehend that KindHearts, unless the block were implemented, was about to dispose of its assets in an unlawful manner.
The government has made no such showing. In this instance the government had time to secure a warrant.10 Thus, the

10. I can anticipate that preparation of an application for a court order authorizing a blocking seizure may be more time-consuming and complex than preparing a complaint for an arrest or an application and affidavit for a conventional search warrant. But the time needed to prepare a blocking application would not appear to be as long as, or longer than the time needed for preparation of a Title III electronic surveillance application. Title III applications and orders are generally employed in the investigation of serious offenses, many of which involve, or potentially involve violence, injury and death. We accept, however, the need to take time to make sure that this intrusive technique is employed cautiously, and only when the government

satisfies Title III’s requirements. The time needed to prepare and approve an application under FISA for presentation to the Foreign Intelligence Surveillance Court likewise probably is extensive. This is so, even though FISA orders are directed at foreign-based terrorist threats against the United States. The exigencies of the circumstances being investigated by electronic surveillance would appear, on balance, usually to be greater than those present when a domestic charitable organization is suspected of diverting, or permitting the diversion of a portion of its assets to terrorist organizations overseas. Nonetheless, we accept, and properly so, the delays inherent in obtaining Title III and FISA orders.

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second Rohrig factor militates in favor of requiring a warrant.
The third factor concerns the citizen’s interest. KindHearts had a strong interest in accessing its funds, remaining in operation and disbursing its funds, to the extent it was doing so, lawfully.
The government has not shown that the need to act without a warrant was so compelling that it could do so lawfully under the exigent circumstances exception to the warrant requirement.
iv. Alteration of Probable Cause and Warrant Requirements
The government argues that its reliance on classified information to determine whether blocking is appropriate justifies bypassing the probable cause requirement and prior judicial review. It also argues that the nature of its investigation—namely, of an organization alleged to be providing financial support to overseas terrorists—precludes judicial involvement and oversight under the separation of powers doctrine.
These arguments are a variation on similar arguments which the Court rejected in U.S. Dist. Court, supra. There the government argued, much as it does here, that a judicial warrant would ‘‘obstruct the President in the discharge of his constitutional duty to protect domestic security.’’ Id. at 318, 92 S.Ct. 2125. The government also argued that courts lack technical expertise to determine whether surveillance is appropriate, and that disclosure of the necessary information to a magistrate would ‘‘create serious potential dangers to the national security and to the lives of informants and agents.’’ Id. at 319, 92 S.Ct. 2125.
The Court held that these concerns did ‘‘not justify complete exemption of domestic security surveillance from prior judicial scrutiny.’’ Id. at 320, 92 S.Ct. 2125. Complete abnegation of the Fourth Amendment and judicial involvement in

protecting Fourth Amendment interests is likewise not justifiable here. As already discussed, nothing in our Fourth Amendment jurisprudence or constitutional tradition supports complete elimination of the probable cause, prior judicial review and warrant requirements.
To the extent the government argues that its possible reliance on classified information as a basis a blocking order justifies displacement of judicial review, its contentions are not persuasive. District judges increasingly handle classified information under the aegis of the Classified Information Procedures Act (CIPA). 18 U.S.C.App. 3, §§ 1–16. The government has not shown that there is something so unique about blocking of assets in circumstances such as those in this case that would make CIPA inapplicable or functionally inoperable.
The Court in U.S. Dist. Court suggested that Congress might adopt a modified warrant procedure that would both respond to the President’s Article II exclusive responsibility and authority to protect national security from foreign dangers and accommodate Fourth Amendment interests and protections. Id. at 320, 92 S.Ct. 2125. Declining ‘‘to detail the precise standards for domestic security warrants,’’ id. at 323, 92 S.Ct. 2125, the Court expressly stated, however, that some form of ‘‘prior judicial approval’’ was constitutionally required. Id. at 324, 92 S.Ct. 2125.
Here, as well, in view of the effect of implementation of Fourth Amendment protections and processes on the President’s Article II powers, some reformulation of the probable cause requirement may be appropriate. The same may be true with regard to variance from the conventional process for obtaining judicial warrants under the Fourth Amendment and Rule 41 of the Federal Rules of Criminal Procedure.

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I agree, though, with the parties’ request that I not undertake in this case to determine whether such reformulation is appropriate or necessary or, if so, to define its contours. In not undertaking these tasks, I go no further than the Supreme Court in U.S. Dist. Court, in which the Court left to Congress the responsibility for considering and adopting the appropriate structure. Id. at 320, 92 S.Ct. 2125. This, in turn, led to enactment of FISA and creation of the FISC.11
I also note that provision could be made for emergency seizure of assets pending such review when, as and if truly exigent circumstances existed—as they did not in this case, and as is unlikely in other past cases of OFAC blocking orders. In any event, great care would have to be taken to ensure that what should be rare did not become routine.
That has not happened under Title III: warrantless emergency surveillance, though authorized by that statute, 18 U.S.C. § 2518(7), has hardly ever occurred in the forty years since its enactment. But circumstances might possibly arise where the time needed for even ex parte prior judicial review might be so risky that an emergency exception, ‘‘both limited and

tailored reasonably to secure law enforcement needs while protecting privacy interests,’’ Illinois v. McArthur, 531 U.S. 326, 337, 121 S.Ct. 946, 148 L.Ed.2d 838 (2001), would be appropriate.12
C. Fourth Amendment Challenges to the Provisional and Final SDGT Designation
[15] KindHearts also challenges the provisional and prospective final SDGT designations under the Fourth Amendment. This court can review neither challenge at this time. Under the Administrative Procedure Act [APA], 5 U.S.C. § 704, I may review only final agency action. Agency action becomes final when it creates a binding obligation. Bennett v. Spear, 520 U.S. 154, 158, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
[16] Provisional agency action is not final action. Greater Detroit Resource Recovery Auth. v. U.S. E.P.A., 916 F.2d 317, 322 (6th Cir.1990) (holding a letter of intent to hold agency proceedings contemplating revocation of a permit was not final agency action); Den–Mat Corp. v. U.S., Food and Drug Admin., 1992 WL 208962, *4 (D.Md.1992) (‘‘[A] statement by the FDA in a letter of what its position is on

11. FISA contains an alternative probable cause formulation: ‘‘probable cause to believe that TTT the target of the electronic surveillance is a foreign power or an agent of a foreign power’’ and that ‘‘each of the facilities or places at which the electronic surveillance is directed is being used, or is about to be used, by a foreign power or an agent of a foreign power.’’ 50 U.S.C. § 1805(a)(2)(A)(B).
This standard differs from the conventional probable cause requirement not in the level of suspicion, but in what federal agents must suspect. Courts have upheld this modified probable cause standard under the Fourth Amendment. U.S. v. Johnson, 952 F.2d 565, 573 (1st Cir.1991); U.S. v. Pelton, 835 F.2d 1067, 1075 (4th Cir.1987); U.S. v. Badia, 827 F.2d 1458, 1464 (11th Cir.1987). I note,

however, that, at a minimum, the Fourth Amendment requires prior judicial review and approval, based on probable cause sufficient to justify issuance of a blocking order to seize the assets of an American corporation or American citizens. This necessitates government submission of objective and reasonably verifiable information establishing such cause to a neutral and detached judicial officer.
12. In McArthur, officers prevented the defendant from entering his home for two hours until they could obtain a search warrant for marijuana. Id. at 329, 121 S.Ct. 946. Preventing his entry was but a ‘‘brief seizure of the premises’’ and permissible under the Fourth Amendment. Id. at 333, 121 S.Ct. 946. There was, as well, prompt judicial review of probable cause and issuance of a search warrant.

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an issue, along with a threat of enforcement that does not arise to a promise to enforce, is not a final action.’’). The provisional designation is, by definition, not final agency action: this court cannot, therefore, review it. Final designation would be final agency action, but it has yet to occur.
2. Statutory Authorization for Block Pending Investigation
KindHearts argues that the IEEPA does not authorize OFAC’s block on KindHearts’ assets because the IEEPA requires that blocked individuals have a nexus with a nation on which the United States government has imposed economic sanctions. Defendants argue that the IEEPA requires no such nexus and that OFAC may properly block any assets in which any foreign national—not just foreign nations and foreign nationals linked to a sanctioned nation—has an interest.
A. Whether the IEEPA Requires a Nexus With a Sanctioned Nation
The IEEPA authorizes the President to ‘‘investigate, block during the pendency of an investigation, regulate, TTT or prohibit TTT transactions involving TTT any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.’’ 50 U.S.C. § 1702(a)(1)(B).
Two courts have rejected the argument that the IEEPA requires that an entity have a nexus with a sanctioned nation to be blocked. In Al Haramain, supra, 585 F.Supp.2d at 1260, plaintiff argued that a blocking action ‘‘requires a nexus between a sanction against a national and a sanction against its country.’’ Thus, the government could properly sanction a Libyan national, but not a national of a country the United States has never sanctioned. Id.

The court rejected this argument, concluding that ‘‘the term ‘thereof’ simply directs that the ‘national’ must be ‘foreign’ without imposing any other conditions.’’ Id.; see also Humanitarian Law Project v. U.S. Dept. of Treasury, 463 F.Supp.2d 1049, 1072–1073 (C.D.Cal.2006) (rejecting contention that the IEEPA is only a ‘‘tool for nation-to-nation diplomacy’’ and that the power to block individual assets under IEEPA is not merely ‘‘incident to’’ the power to impose sanctions).
These rulings represent the better interpretation of the IEEPA. First, as the court in Al Haramain concluded, there is no textual reason to interpret ‘‘thereof’’ as a limitation; the phrase ‘‘nationals thereof’’ simply means foreign nationals.
Second, the executive has blocked the assets of individuals unaffiliated with sanctions in the past and received Congressional approval. This occurred after President Clinton issued executive orders under the IEEPA blocking the assets of Columbian drug cartels. E.O. 12978 (Oct. 21, 1995). In the legislative findings in the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. § 1901(a)(3), Congress addressed President Clinton’s actions, noting that the President ‘‘successfully applied [the IEEPA] to international narcotics traffickers in Columbia and based on that successful case study, Congress believes similar authorities should be applied worldwide.’’ The findings specifically referenced E.O. 12978. Id. at § 1901(a)(1).Congress amended the IEEPA in 2001 and, though aware of President Clinton’s executive orders, did not limit the IEEPA to be only a tool of nation-to-nation diplomacy.
[17] The IEEPA requires no nexus with a sanctioned nation; it only requires that blocked property be property in which any foreign country or a foreign national ‘‘has any interest.’’ 50 U.S.C. § 1702(a)(1)(B).

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B. Whether a Foreign National Has ‘‘Any Interest’’ in KindHearts’ Assets
Even if the IEEPA mandates no nexus with a sanctioned nation, the statute requires a foreign national to have an ‘‘interest’’ in the corporation’s assets within the meaning of 50 U.S.C. § 1702(a)(1)(B). Id. To satisfy the Fourth Amendment, OFAC thus must show, with regard to an entity’s alleged violation of IEEPA and E.O. 13224, probable cause to believe that a foreign national has an ‘‘interest’’ in the corporation’s assets.13
[18] The IEEPA authorizes blocking based on ‘‘any interest.’’ See 50. U.S.C. § 1702(a)(1)(B); Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F.Supp.2d 57, 67 (D.D.C.2002). Congress has authorized the executive to define the statutory terms of the IEEPA. 50 U.S.C. § 1704. OFAC defines ‘‘interest’’ to mean ‘‘an interest of any nature whatsoever, direct or indirect.’’ 31 C.F.R. § 535.312. In contrast, OFAC defined the terms ‘‘property’’ and ‘‘property interest’’ to refer to an expansive list of legally enforceable rights, including currency, negotiable instruments, ‘‘evidences of title,’’ ‘‘contracts of any nature whatsoever, and any other property, real, personal, or mixed, tangible or intangible, or interest or interests therein, present, future or contingent.’’ 31 C.F.R. §§ 535.311
Courts have endorsed broad interpretations of the phrase ‘‘any interest’’ as used in the IEEPA and TWEA. E.g., Regan v. Wald, 468 U.S. 222, 225–226, 233–34, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984) (the phrase ‘‘any interest’’ must be construed broadly); Consarc Corp. v. Iraqi Ministry, 27 F.3d 695, 701–02 (D.C.Cir.1994) (OFAC may define property interests, subject to judicial review).

The statute does not, therefore, require that a foreign national have a legally enforceable property interest in a target corporation’s assets. A beneficial interest in the entity’s assets may suffice. Global Relief Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir.2002).
To date, courts have considered the definition of ‘‘interest’’ in cases involving OFAC blocking actions against domestic corporations only where: 1) foreign nationals occupy key executive positions or were members of the entity’s board, Global Relief, supra, 315 F.3d at 752–53 (two of the three members of the board were foreign nationals), Al Haramain, supra, 585 F.Supp.2d at 1261 (foreign nationals served as the President and Treasurer); or 2) OFAC had already named the United States corporation as an SDGT for channeling funds to foreign terrorists. Islamic Am. Relief, supra, 394 F.Supp.2d at 40, 46; Holy Land, supra, 219 F.Supp.2d at 67.
Khaled Smali, President of KindHearts, is a foreign national. This satisfies the requirement of 50 U.S.C. § 1702(a)(1)(B) that a foreign national have an interest in the organization.
3. Void for Vagueness
Plaintiff alleges that OFAC’s authority to block assets pending investigation and to designate SDGTs under the IEEPA and E.O. 13224 is unconstitutionally vague. First, plaintiff claims neither the IEEPA nor E.O. 13224 imposes substantive or procedural constraints on the authority to block pending investigation. Second, plaintiff claims that neither the IEEPA nor E.O. 13224 imposes a scienter requirement for designation. Third, plaintiff claims that the criteria set forth in E.O. 13224 for designation contain the unconstitutionally vague terms ‘‘material support,’’

13. American citizenship does not immunize KindHearts from blocking. Global Relief

Found. v. O’Neill, 315 F.3d 748, 753 (7th Cir.2002).

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‘‘services,’’ and ‘‘otherwise associated with.’’
To determine whether a statute is vague, courts consider whether the statute is ‘‘sufficiently clear so as not to cause persons ‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’ ’’ Connally v. General Const. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926). Vague statutes violate the Due Process Clause of the Fifth or Fourteenth Amendments. Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983); see also Coates v. City of Cincinnati, 402 U.S. 611, 614, 91 S.Ct. 1686, 29 L.Ed.2d 214 (1971).
[19] Vague statutes are contrary to the ‘‘first essential of due process of law’’ for two reasons. Connally, supra, 269 U.S. at 391, 46 S.Ct. 126. First, unclear statutes deny citizens ‘‘a reasonable opportunity to know what is prohibited, so that [they] may act accordingly.’’ Grayned v. City of Rockford, 408 U.S. 104, 108–09, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972). Second, vague laws encourage arbitrary and discriminatory enforcement, because they ‘‘impermissibly delegate[ ] basic policy matters to policemen, judges, and juries.’’ Id. at 108–109, 92 S.Ct. 2294; see also City of Chicago v. Morales, 527 U.S. 41, 60, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999); Papachristou v. City of Jacksonville, 405 U.S. 156, 162, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972).
Courts demand a greater level of certainty where a vague criminal statute ‘‘might induce individuals to forgo their rights of speech, press, and association’’ to avoid even a risk of prosecution. Scull v. Com. of Va. ex rel. Comm. on Law Reform & Racial Activities, 359 U.S. 344, 353, 79 S.Ct. 838, 3 L.Ed.2d 865 (1959); see also Ashton v. Kentucky, 384 U.S. 195, 200, 86 S.Ct. 1407, 16 L.Ed.2d 469 (1966); Am. Booksellers Found. for Free Expression v.

Strickland, 512 F.Supp.2d 1082, 1097 (S.D.Ohio 2007), questions certified, 560 F.3d 443 (6th Cir.2009) (‘‘The courts will pay even closer attention when TTT a statute attempts to restrict an area of free expression through the penal code, because the threat of punitive penalties has the potential to significantly chill speech.’’).
A. Facial and As–Applied Vagueness Claims
[20] A plaintiff may assert two types of vagueness claims. First, it may challenge statutes as vague as applied to plaintiff’s specific conduct. An as-applied challenge ‘‘implicates the statutes’ enforcement only as to the plaintiff challenging the statute’’ but does not ‘‘implicate the enforcement of the law against third parties.’’ Humanitarian Law Project, supra, 463 F.Supp.2d at 1058. Thus, a successful as-applied challenge ‘‘does not render the law itself invalid.’’ Id.
[21] Second, plaintiffs may claim that a statute is vague on its face, meaning that it is vague as to conduct beyond that of the individual plaintiff. Id. A successful facial challenge renders the law invalid; facial invalidation, therefore, is ‘‘strong medicine’’ that courts should use only as a ‘‘last resort.’’ Id.; see also Nat’l Endowment for the Arts v. Finley, 524 U.S. 569, 580, 118 S.Ct. 2168, 141 L.Ed.2d 500 (1998).
KindHearts asserts both facial and asapplied challenges to OFAC’s designation and block pending investigation authorities.
i. Facial Invalidity
(a). OFAC Neither Suppresses Protected Speech Nor Imposes
Criminal Sanctions
[22] Generally, an enactment is unconstitutionally vague on is face only if it is ‘‘impermissibly vague in all its applications.’’ Village of Hoffman Estates v.

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Flipside, Hoffman Estates, Inc., 455 U.S. 489, 497, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982); see also U.S. v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987) (enunciating the ‘‘Salerno doctrine’’ that a successful facial challenge to a statute requires proof of invalidity in all its applications unless the statute regulates protected speech).
If, however, plaintiffs show that an allegedly vague criminal statute reaches a ‘‘substantial amount of constitutionally protected conduct’’ under the First Amendment, Belle Maer Harbor v. Charter Twp. Of Harrison, 170 F.3d 553, 557 (6th Cir.1999), the Salerno doctrine does not apply. See Salerno, supra, 481 U.S. at 745, 107 S.Ct. 2095 (recognizing an exception for First Amendment claims). Despite the general rule that plaintiffs who engage in ‘‘some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others,’’ the Supreme Court has ‘‘relaxed that requirement’’ in the First Amendment context to avoid chilling protected speech. U.S. v. Williams, 553 U.S. 285, 128 S.Ct. 1830, 1845, 170 L.Ed.2d 650 (2008).
[23] To avail themselves of this exception to Salerno, plaintiffs must show that the challenged enactment is: 1) criminal in nature; and 2) implicates First Amendment rights. In Kolender v. Lawson, 461 U.S. 352, 353, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983), the Supreme Court invalidated a criminal statute requiring those who ‘‘loiter or wander on the streets to provide ‘credible and reliable’ identification and to account for their presence when requested by a peace officer.’’ Though the statute could be clear in some instances, the Court invalidated it on the its potential to infringe First Amendment rights and the serious criminal sanctions imposed for its violation. Id. at 358 n. 8, 103 S.Ct. 1855; see also Morales, supra, 527 U.S. at 55 n. 22, 119 S.Ct. 1849 (in dicta, declining to

apply Salerno in void for vagueness challenge to a criminal statute implicating First Amendment rights).
[24] Where a criminal statute is narrowly tailored to restrict only unprotected speech, it does not implicate First Amendment rights for the purposes of a void-forvagueness challenge. Belle Maer Harbor, supra, 170 F.3d at 557; see also Rendon v. Transp. Sec. Admin, 424 F.3d 475, 480 (6th Cir.2005). Indeed, to be invalid, a statute must reach a ‘‘substantial amount’’ of protected speech: not all laws restricting speech satisfy this test.
In Rendon, the Sixth Circuit concluded that a Transportation Security Administration regulation did not reach a substantial amount of protected First Amendment conduct. The regulation at issue stated that ‘‘[n]o person may interfere with, assault, threaten, or intimidate screening personnel in the performance of their screening duties.’’ 49 C.F. R. § 1540.109. Because the statute requires that the plaintiff ‘‘interfere’’ with screeners in the performance of a specified task, it did not give screeners unfettered discretion to fine anyone they may find disruptive and therefore did not reach a substantial amount of protected speech. 424 F.3d at 478.
[25] In this case, OFAC’s designation authority neither implicates First Amendment rights nor is criminal in nature. Courts have uniformly held that OFAC’s blocking and designation authorities do not reach a substantial amount of protected speech, and that its restrictions are narrowly tailored. Al Haramain, supra, 585 F.Supp.2d at 1267 (E.O. 13224 ‘‘does not punish a substantial amount of protected free speech or associational rights.’’); Islamic Am. Relief, supra, 394 F.Supp.2d at 52–55 (rejecting claims that OFAC blocking action violates plaintiff’s First Amendment freedom of speech, freedom of associ-

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ation and freedom of religion, and noting that ‘‘nothing in the IEEPA or the executive order prohibits [the plaintiff] from expressing its views.’’); Holy Land Found. for Relief and Dev. v. Ashcroft, 333 F.3d 156, 166 (D.C.Cir.2003) (‘‘[T]here is no First Amendment right nor any other constitutional right to support terrorists.’’); Holy Land, supra, 219 F.Supp.2d at 82 (OFAC designation and blocking did not restrict plaintiff’s ‘‘ability to express its viewpoints, even if these views include an endorsement of Hamas.’’); Global Relief Found., Inc. v. O’Neill, 207 F.Supp.2d 779, 806 (N.D.Ill.2002), aff’d 315 F.3d 748 (7th Cir.2002) (Executive Order satisfies strict scrutiny and is not overbroad under in violation of the First Amendment because it neither ‘‘directly regulates speech or expression’’ and does not grant discretion to ‘‘determine whether particular items of expression may be prohibited on the basis of their content.’’).
Even if plaintiff shows that OFAC’s blocking and designation authorities reach a substantial amount of constitutionally protected conduct, the consequences are civil, rather than criminal. Even harsh civil sanctions do not justify applying heightened scrutiny. In Columbia Natural Res. Inc. v. Tatum, 58 F.3d 1101, 1108 (6th Cir.1995), for example, the court held that civil provisions of the Racketeer Influenced and Corrupt Organizations Act [RICO], 18 U.S.C. § 1962(c), were not unconstitutionally vague. The court stated that it ‘‘expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe.’’ Id. (citing Hoffman Estates, supra, 455 U.S. at 498–499, 102 S.Ct. 1186).14

(b). OFAC’s Authority to Order Blocking Pending Investigation
is Not Facially Vague
Plaintiffs argue OFAC’s power to block assets pending investigation is vague on its face because neither E.O. 13224 nor the IEEPA require OFAC to establish any level of suspicion or amass any quantum of evidence before acting. If this is true, the enactments are vague because without criteria governing OFAC’s actions ‘‘persons ‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’ ’’ Connally, supra, 269 U.S. at 391, 46 S.Ct. 126.
Defendants argue that the substantive criteria set forth in § 1 of E.O. 13224 constrain both OFAC’s power to designate and to block pending investigation. Defendants further assert, ‘‘To initiate a BPI OFAC must be pursuing an investigation based upon a reasonable basis to suspect that the individual or entity meets the E.O. criteria. Whereas, to designate, OFAC must have reason to believe the subject meets the designation criteria.’’ [Doc. 36, at 30 n. 25]. Plaintiffs respond that OFAC’s power to designate and power to block pending investigation have distinct sources in the text of E.O. 13224, and that the government’s putative ‘‘reasonable basis to suspect’’ standard is wholly invented.
E.O. 13224 empowers OFAC to block and designate by delegating powers given to the President by Congress in the IEEPA. Congress, through the IEEPA, authorized the President to block certain assets and transactions in cases of declared national emergency. 50 U.S.C.A. §§ 1702(a)(1), 1701. In E.O. 13224, the President declared that ‘‘foreign terrorists’’ represented an ‘‘unusual and extraordinary threat to the national security’’ and

14. The court in Columbia Natural Resources, id. at 1108, accurately noted that civil penalties for RICO violations are ‘‘harsh,’’ as such

penalties can include, inter alia, ‘‘dissolution or reorganization of any enterprise.’’ 18 U.S.C. § 1964(a).

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designated several entities and persons as ‘‘foreign terrorists.’’
OFAC’s power to designate SDGTs derives from E.O. 13224, § 1(c)-(d). These sections permit the Secretary of Treasury, in consultation with the Secretary of State and the Attorney General, to determine that an entity is ‘‘owned or controlled by’’ a designated foreign terrorist, has ‘‘assist[ed] in, sponsor[ed], or provide[d] financial, material, or technological support for, or financial or other services to or in support of’’ acts of terrorism by a designated foreign terrorist, or is ‘‘otherwise associated with’’ a designated terrorist. Under § 1 of E.O. 13224, the ‘‘property and interests in property’’ of entities so designated by the Treasury ‘‘are blocked.’’ Section 1 of E.O. 13224, however, does not confer any power on the United States Treasury to block pending investigation; it only authorizes blocks on entities who have already been designated.
OFAC’s power to block pending an investigation presumably stems from E.O. 13224, § 7, which authorizes the Secretary of the Treasury to ‘‘employ all powers granted to the President by IEEPA TTT as may be necessary to carry out the purposes of this order.’’ E.O. 13224 does not specifically mention any power to block pending an investigation. The catch-all provision in § 7, however, delegates the President’s IEEPA authority to block pending investigation to the Treasury. IEEPA authorizes the President to ‘‘investigate [and] block during the pendency of an investigation TTT any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.’’ 50 U.S.C. § 1702(a)(1)(B).
With regard to statutory limits on OFAC’s authority to impose blocking pending investigation, the plaintiff and defendant agree that the IEEPA places five

limitations on the President’s power to block pending investigation, and that these also limit OFAC’s power under E.O. 13224. First, before acting under IEEPA, the President must find and declare a national emergency based on an ‘‘unusual and extraordinary threat, which has its source in whole or in substantial part outside the United States, to the national security, foreign policy, or economy of the United States.’’ 50 U.S.C. § 1701(a). Second, the President may exercise his authority ‘‘to deal with an unusual and extraordinary threat to which a national emergency has been declared’’ and ‘‘not for any other purpose.’’ Id. at 1701(b). Third, blocks pending investigation, like all blocks, must be on ‘‘property in which any foreign country or a national thereof has any interest.’’ 50 U.S.C. § 1702(a)(1)(B). Fourth, the President may not under IEEPA regulate the export of personal communications, information such as films, artworks and news wire feeds, or transactions ordinarily incident to travel in a foreign country. Id. at § 1702(b). Fifth, the president must consult with Congress ‘‘in every possible instance’’ before exercising his authority and Congress periodically reviews the President’s actions. Id. at §§ 1703(a), 1622.
These limitations, however, do not require OFAC to establish any specific level of suspicion or collect any quantum of evidence before blocking an entity pending an investigation. Plaintiffs argue that, provided the President has declared a national emergency, OFAC may block any entity it chooses to investigate on a whim. Defendants respond that OFAC may only block pending investigation if OFAC is ‘‘pursuing an investigation based upon a reasonable basis to suspect that the individual or entity meets’’ the criteria for designation under the E.O. [Doc. 73, at 30 n. 25].

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Defendants argue that this ‘‘reasonable basis to suspect’’ requirement derives from the judicial review provision of the Administrative Procedures Act (APA), 5 U.S.C. § 706(2)(A). This provision states that a court may overturn an agency action that is ‘‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’’ Id.; see also Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 377, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). Defendant cites three cases in which courts reviewed whether OFAC had a ‘‘rational basis’’ for issuing a final SDGT determination and block. Holy Land Found. for Relief and Development v. Ashcroft, 333 F.3d 156, 162 (D.C.Cir.2003); see also Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728, 732 (D.C.Cir.2007); Al Haramain, supra, 585 F.Supp.2d at 1249.
Defendant’s argument, however, is flawed. First, § 706(2)(A) of the APA sets forth a standard of judicial review, not a substantive standard to govern agency behavior. OFAC must comply with statutes, executive orders, and Treasury regulations governing its conduct; it should not consider whether its actions would later be reversed under the deferential ‘‘arbitrary and capricious’’ standard of judicial review in choosing its course of action.
Second, defendant’s argument fails to establish a link between the power to block pending investigation (authorized by E.O. 13224, § 7) and the standard for designating an SDGT (described in E.O. 13224, § 1). Nothing in the text of E.O. 13224 suggests that the block pending investigation power can be exercised only as a precursor to designation, nor does anything suggest how close OFAC must be to designating to impose a block. Without such a link, a reviewing court has no basis for determining whether OFAC has exercised its power reasonably in accordance with its authority.

Defendants rely on three cases involving challenges to post-designation blocking orders, not blocks pending investigation. Islamic Am. Relief, supra, 477 F.3d at 732; Holy Land, supra, 333 F.3d at 162; Al Haramain, supra, 585 F.Supp.2d at 1249.
Because the cases do not deal with the power to block pending investigation, they provide no guidance as to the restrictions on this power. In all three, OFAC simultaneously designated the target entity as an SDGT and blocked its assets. In these cases, therefore, both the designation decision and the block were governed by § 1 of the Executive Order, not § 7.
Section 1 sets forth criteria for designation and the block attaches automatically on designation. Courts in these cases apply the APA’s standard of review to determine whether OFAC had a ‘‘rational basis’’ to designate an entity under the § 1 criteria—courts do not treat ‘‘rational basis’’ as the criteria OFAC must abide in blocking or designating an entity. Holy Land, supra, 333 F.3d at 162.
Neither the IEEPA nor E.O. 13224, therefore, restrict OFAC’s power to block pending investigation OFAC’s authority to block pending investigation by requiring a specific quantum of evidence or level of suspicion that the targeted entity should be designated.
Plaintiff argues that this lack of statutory criteria restricting OFAC’s blocking authority makes that authority unconstitutionally vague. Because no criteria restrict OFAC’s authority, all exercise of that authority, plaintiff contends, are ab initio suspect, thereby rendering the IEEPA and E.O. 13224 facially vague.
Application of the Fourth Amendment to blocks pending investigation provides the criteria, otherwise unavailable under the IEEPA and E.O. 13224, for such seizures. If, to satisfy the Fourth Amendment,

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OFAC may only block pending investigation on a showing of probable cause that the target entity has violated prohibitions of the IEEPA and E.O. 13224, its discretion to block is not unfettered and OFAC’s authority is not unconstitutionally vague on its face.15
B. Whether the Criteria For Designation Are Unconstitutionally Vague
KindHearts also facially challenges OFAC’s designation authority as unconstitutionally vague. I have concluded previously that challenges to OFAC’s preliminary and final designation authority are not reviewable at this time, but I consider KindHearts’ challenge because the designation criteria also govern the probable cause standard required to block pending investigation.
OFAC’s designation authority arises from E.O. 13224, § 1 which orders a block on ‘‘all property and interest in property’’ subject to United States jurisdiction of an enumerated list of foreign terrorist individuals and organizations. E.O. 13224 § 1(d)(i)-(ii) authorizes the Secretary of the Treasury to add to this list by designating additional entities that ‘‘assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of’’ or are ‘‘otherwise associated with’’ individuals or groups designated as foreign terrorists. E.O. 13224, § 2(a) further authorizes designation and blocking for ‘‘making or receiving of any contribution of funds, goods, or services to or for the benefit of’’ designated foreign terrorists. KindHearts argues that the terms ‘‘services,’’ ‘‘otherwise associated with’’ and ‘‘material support’’ are unconstitutionally vague. KindHearts further argues that E.O. 13224 is unconstitutionally vague because it contains no scienter requirement.

To establish that these terms are unconstitutionally vague, plaintiff must show that they cause persons ‘‘of common intelligence TTT necessarily [to] guess at [a statute’s] meaning and [to] differ as to its application.’’ Connally, supra, 269 U.S. at 391, 46 S.Ct. 126. Because plaintiff’s challenge is facial and, as discussed above, does not implicate First Amendment rights, plaintiff must show that the challenged provisions are ‘‘impermissibly vague in all [their] applications.’’ Hoffman Estates, supra, 455 U.S. at 497, 102 S.Ct. 1186. To prevent arbitrary enforcement and to provide citizens with reasonable notice of what conduct is proscribed, a statute must draw ‘‘reasonably clear lines’’ between legal and illegal conduct. Smith v. Goguen, 415 U.S. 566, 573, 94 S.Ct. 1242, 39 L.Ed.2d 605 (1974).
Because E.O. 13224 and the IEEPA are federal rather than state law, this court has greater leeway to construe the enactments to remedy vagueness. The Supreme Court has rarely held federal statutes to be void for vagueness. Columbia Natural Resources, supra, 58 F.3d at 1108. Because federal statutes are subject to interpretation by federal courts, federal courts need not ‘‘sit passively and review only what other people have said to determine if a statute is vague.’’ Id. Rather, a federal court’s ‘‘own interpretations are a means of mitigating any vagueness.’’ Id.
[26] An undefined word or phrase does not necessarily render an enactment vague. Courts may ascertain an undefined term’s meaning by reading it in context, Boos v. Barry, 485 U.S. 312, 332, 108 S.Ct. 1157, 99 L.Ed.2d 333 (1988), or by looking to the term’s common meaning. U.S. v. Haun, 90 F.3d 1096, 1101 (6th Cir.1996) (If the common meaning of an undefined term

15. In this case, OFAC failed to follow the Fourth Amendment in imposing the block pending investigation. Thus, as applied to

KindHearts, OFAC’s authority under the IEEPA and E.O. 13224 was unconstitutionally vague.

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provides ‘‘adequate notice of the conduct prohibited and standards for enforcement,’’ the statute is not void for vagueness.). Courts may look to other statutes and case law to determine an undefined term’s meaning. See Jordan v. De George, 341 U.S. 223, 229–230, 71 S.Ct. 703, 95 L.Ed. 886 (1951) (upholding phrase ‘‘crime of moral turpitude’’ against vagueness challenge by examining meaning of term in cases and other statutes).
[27] A statute may be facially vague if it contains language that ‘‘lends itself to subjective interpretation.’’ Humanitarian Law Project, supra, 463 F.Supp.2d at 1062. In Coates v. City of Cincinnati, 402 U.S. 611, 612–614, 91 S.Ct. 1686, 29 L.Ed.2d 214 (1971), the court invalidated an ordinance prohibiting ‘‘conduct TTT annoying to persons passing by,’’ because ‘‘[c]onduct that annoys some people does not annoy others.’’ See also U.S. v. Wunsch, 84 F.3d 1110 (9th Cir.1996) (invalidating court’s local disciplinary rule requiring lawyers to ‘‘abstain from all offensive personality’’ because it could ‘‘refer to any number of behaviors’’ and it would be ‘‘impossible to know when such behavior would be offensive enough to invoke the statute.’’).
i. ‘‘Services’’
Plaintiff argues that the term ‘‘services’’ as it appears in E.O. 13224, §§ 1–2 is unconstitutionally vague. The Treasury Regulations do not provide a concise definition of ‘‘services,’’ but they do contain a non-exhaustive list of examples: ‘‘legal, accounting, financial, brokering, freight forwarding, transportation, public relations, or other services.’’ 31 C.F.R. § 594.406.
[28] Other courts have concluded that the term ‘‘services’’ in E.O. 13324 is not unconstitutionally vague. In Humanitarian Law Project, supra, 463 F.Supp.2d at 1063, the court held that the term ‘‘services’’ in the E.O. 13224 is not vague be-

cause it is a ‘‘word of common understanding and one that could not be used for selective or subjective enforcement.’’ Despite the fact that the regulations list examples in place of an exact definition, the court concluded that ‘‘any given individual would be able to distinguish when he or she was providing a ‘service’ to a designated terrorist group, as opposed to engaging in independent activity.’’ Id.; see also Al Haramain, supra, 585 F.Supp.2d at 1270 (The term ‘‘services’’ in E.O. 13224 is not unconstitutionally vague because the whole phrase, ‘‘services to or in support of’’ an SDGT ‘‘implies cooperation between the two entities, as opposed to independent advocacy.’’).
Courts have also upheld the term ‘‘services’’ against vagueness challenges in other contexts. See, e.g., Al Haramain, supra, 585 F.Supp.2d at 1269–1270 (upholding ‘‘services’’ as it appears in IEEPA); U.S. v. Lindh, 212 F.Supp.2d 541, 547 (E.D.Va.2002) (upholding ‘‘services’’ in a criminal case).
In Humanitarian Law Project v. Mukasey, 509 F.3d 1122, 1136 (9th Cir.2007), the court concluded that the ‘‘service’’ in the Antiterrorism and Effective Death Penalty Act of 1996 [AEDPA] is unconstitutionally vague. The AEDPA, however, expressly defined ‘‘services’’ to include ‘‘expert advice or assistance.’’ Id. The court ruled the terms ‘‘expert advice or assistance’’ to be unconstitutionally vague because the terms reaches protected First Amendment activity, such as training in ‘‘how to lobby or petition representative bodies such as the United nations.’’ Id. The court concluded that the phrase ‘‘expert advice or assistance’’ was unconstitutionally vague, and that the term ‘‘services’’ was unconstitutionally vague because the term includes ‘‘expert advice or assistance.’’ Id. at 1135– 1136.

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The term ‘‘service’’ in E.O. 13224 is not unconstitutionally vague. The common meaning of the word sufficiently constrains executive discretion. When read in context, ‘‘services to or in support of,’’ the term clearly requires a collaborative relationship with an SDGT; independent advocacy is not covered. Moreover, neither the E.O. nor the Treasury Regulations expressly extend the term ‘‘services’’ to any protected area of speech, making the Ninth Circuit’s reasoning in Humanitarian Law Project regarding the AEDPA inapplicable here.
ii. ‘‘Material Support’’
Plaintiffs assert that the term ‘‘material support’’ is unconstitutionally vague. Neither the Executive Order nor the Treasury regulations provide a definition of this term. To construe the statute, courts may look to how other statutes, regulations, and case law define this term. See Jordan, supra, 341 U.S. at 229–230, 71 S.Ct. 703.
The Immigration and Naturalization Act [INA], 8 U.S.C. § 1182(a)(3)(B), bars aliens who ‘‘engage in terrorist activity,’’ including those who ‘‘afford material support’’ to terrorists from receiving visas or entering the United States. The statute provides several examples of ‘‘material support,’’ including ‘‘a safe house, transportation, communications, funds, transfer or other material financial benefit, false documentation or identification, weapons (including chemical, biological, or radiological weapons), explosives, or training.’’ Id. at § 1182(a)(3)(B)(iv)(VI).
Courts have defined and applied the term ‘‘material support’’ from the INA using the plain meaning of the words. Thus, ‘‘material’’ has been held to mean ‘‘significant’’ or ‘‘essential’’ and ‘‘support’’ has been held to mean ‘‘sustenance or maintenance; esp., articles such as food and clothing that allow one to live in the degree of comfort to which one is accus-

tomed.’’ Singh–Kaur v. Ashcroft, 385 F.3d 293, 298 (3d Cir.2004) (construing ‘‘material support’’ in 8 U.S.C. § 1182(a)(3)(B)(iv)(VI)) (quoting Black’s Law Dictionary 991, 1453 (7th Ed.1999)) Though not addressing a vagueness challenge to the statute, the court concluded that ‘‘material support’’ clearly encompassed the claimant’s actions, which included providing food and shelter to individuals the claimant knew had committed terrorist activities. Id. at 299.
The term ‘‘material support’’ also appears in the AEDPA, 18 U.S.C. § 2339A. Subsection (b)(1) defines ‘‘material support or resources’’ to mean
any property, tangible or intangible, or service, including currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel (1 or more individuals who may be or include oneself), and transportation, except medicine or religious materials.
That two different federal statutes define ‘‘material support’’ somewhat differently does not, as plaintiffs contend, indicate that the statute is vague. The definitions in the INA and AEDPA do not set forth an exhaustive list of examples. In addition to specific examples like ‘‘weapons, lethal substances [and] explosives,’’ the definition in the AEDPA includes general terms like ‘‘any property, tangible or intangible, or service.’’ 18 U.S.C. § 2339A(b)(1). The definition in the INA uses the term ‘‘including’’ before the enumerated examples, indicating that Congress ‘‘intended to illustrate a broad concept rather than narrowly circumscribe a term with exclusive categories.’’ Singh–Kaur, supra, 385 F.3d

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at 298. Even if the two statutes differ in the examples they list, there is substantial overlap: both list safe houses, funds, false documentation, financial services and weapons as examples of ‘‘material support.’’
[29] Plaintiff’s vagueness challenge to ‘‘material support’’ fails. The INA, AEDPA, existing case law and common meaning provide a ‘‘broad concept’’ of material support that is sufficiently clear. Statutes ‘‘need not define with mathematical precision the conduct forbidden.’’ Columbia Natural Res., supra, 58 F.3d at 1108. Plaintiff, furthermore, must show that the statute is vague in all its potential applications to succeed in its facial challenge. Because existing statutes and case law identify a clear core of activities that constitute ‘‘material support’’—including the giving of funds, which plaintiff allegedly did—plaintiff’s facial challenge fails.
iii. ‘‘Otherwise associated with’’
Plaintiffs also find unconstitutional vagueness in the term ‘‘otherwise associated with’’ in E.O. 13224, § 1. OFAC regulations have recently defined this phrase to mean ‘‘(a) To own or control [an SDGT]; or (b) To attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or other financial services, to’’ [an SDGT]. 31 C.F.R. § 594.316.
[30] Plaintiff alleges that the phrase ‘‘otherwise associated with’’ arguably encompasses First Amendment protected speech and association. The recentlyadopted definition in 31 C.F.R. § 594.316, however, clarifies the phrase and limits its applicability to protected speech and conduct. Since the regulation was adopted, courts have twice rejected arguments identical to the plaintiff’s. See Al Haramain, supra, 585 F.Supp.2d at 1270 (term ‘‘otherwise associated with’’ as defined in § 594.316 is not unconstitutionally vague);

Humanitarian Law Project v. U.S. Dept. of Treasury, 484 F.Supp.2d 1099, 1106 (C.D.Cal.2007) (terms ‘‘on behalf of’’ and ‘‘to attempt, or to conspire’’ in § 594.316 are themselves sufficiently clear and clarify the meaning of ‘‘otherwise associated with’’).
Plaintiff notes that § 594.316 includes the terms ‘‘services’’ and ‘‘material support,’’ which it alleges are unconstitutionally vague. For the reasons described above, neither term is vague either as it appears in E.O. 13224 or 31 C.F.R. § 594.316. Neither, therefore, makes the term ‘‘otherwise associated with’’ unconstitutionally vague.
iv. Lack of a Scienter Requirement
Plaintiff claims, and the defendant does not dispute that OFAC may designate a targeted entity for providing ‘‘material support,’’ providing ‘‘services’’ or ‘‘otherwise associat[ing] with’’ an SDGT without showing that the targeted entity knew the recipient of its resources was an SDGT or that the targeted entity knew the resources would be used for illegal purposes. Plaintiff argues that this lack of a scienter requirement renders E.O. 13224 unconstitutionally vague.
[31] Lack of a scienter requirement does not make an otherwise clear statute unconstitutionally vague. Even criminal statutes are not unconstitutional where the legislature did not make intent to violate the statute an element of the crime. Lambert v. California, 355 U.S. 225, 228, 78 S.Ct. 240, 2 L.Ed.2d 228 (1957) (‘‘There is wide latitude in the lawmakers to declare an offense and to exclude elements of knowledge and diligence from its definition.’’). Punishing ‘‘a person for an act as a crime when ignorant of the facts making it so’’ is not a denial of due process of law. Williams v. North Carolina, 325 U.S. 226, 238, 65 S.Ct. 1092, 89 L.Ed. 1577 (1945). Although ‘‘a scienter requirement may

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mitigate a law’s vagueness, especially with respect to the adequacy of notice to the complainant that his conduct is proscribed,’’ Hoffman Estates, supra, 455 U.S. at 499, 102 S.Ct. 1186, lack of such requirement does not make the statute vague.
In this case, the absence of a scienter requirement does not make OFAC’s authority unconstitutionally vague.
4. Procedural Due Process
KindHearts asserts a due process challenge to OFAC’s provisional designation of it as a SDGT.
KindHearts claims that the statute on its face does not accommodate, and in any event, OFAC failed to provide constitutionally mandated due process. As a result, according to KindHearts, it was not given—and, in its view, even yet has not received—constitutionally adequate notice of the basis and reasons for the blocking order. It also asserts that the government has failed to provide an opportunity to be heard in response to that order and the deprivation of its assets.
For the reasons that follow, I reject KindHearts’ contentions regarding facial invalidity for want of an express description of process. I conclude, however, that the government’s actions regarding the blocking order failed to provide the two fundamental requirements of due process: meaningful notice and opportunity to be heard. Mathews v. Eldridge, 424 U.S. 319, 333, 348, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).
I find, though, that I presently cannot determine the extent to which KindHearts has been prejudiced by the violation of its constitutional rights.
I also conclude that the due process challenge to the provisional SDGT designation is not ripe for adjudication.

A. Asset Freeze—Facial Challenge
KindHearts contends that IEEPA § 1702(a)(1)(B) is unconstitutional on its face because it fails to include procedural safeguards. The law does not require notice, an opportunity to be heard or pre- or post-deprivation process. A provision of the Patriot Act amended the IEEPA and authorized OFAC to block an individual’s or organization’s assets based on its assertion that the individual or organization is under investigation.16 OFAC can thus freeze an American corporation’s assets just by announcing that the corporation is under investigation—under the statute it does not need to provide any process to that corporation.
§ 1702(a)(1)(B) states:
At the times and to the extent specified in § 1701 of this title, the President may, under such regulations as he may prescribe, by means of instructions, licenses, or otherwise—(B) investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States[.]
KindHearts argues the government must provide notice and an opportunity to be heard by a neutral tribunal. While it agrees that the government does not always have to provide pre-deprivation process, it maintains that the government

16. Section 106 of the Patriot Act inserted ‘‘block during the pendency of an investiga-

tion’’ after ‘‘investigate’’ in the text of 50 U.S.C. § 1702(a)(1)(B).

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must afford it prompt post-deprivation process.
The government, in response, emphasizes the flexible nature of due process requirements, and states that courts must consider the governmental interest in national security in addition to harm to private interests and risk of erroneous deprivation. The government’s interest in national security, it contends, is paramount.
KindHearts correctly contends that the IEEPA contains no procedural protections. That does not mean that it meets the Salerno ‘‘no set of circumstances’’ test. 481 U.S. at 745, 107 S.Ct. 2095.17 Under Salerno, ‘‘a plaintiff can only succeed in a facial challenge by establishing that no set of circumstances exist under which the Act would be valid, i.e., that the law is unconstitutional in all of its applications.’’ Washington State Grange v. Washington State Republican Party, 552 U.S. 442, 128 S.Ct. 1184, 1190, 170 L.Ed.2d 151 (2008).
In U.S. v. Al–Arian, 308 F.Supp.2d 1322 (M.D.Fla.2004), the court upheld the constitutionality of the IEEPA because the statute primarily applies to foreign organizations. The court reasoned that facial analysis of the statute should include the statute’s application to foreign organizations and to organizations without a substantial connection to the United States. It stated, ‘‘[i]n such limited and exceptional circumstances TTT the facial analysis of a statute, like AEDPA or IEEPA, should include application to foreign organizations and individuals without a substantial connection to the United States.’’ Id. at 1346. It rejected the notion that its analysis would ‘‘eviscerate the doctrine of facial invalidity.’’ Id. It instead explained that its analysis prevented it ‘‘from intruding

into an area that TTT belong[ed] to the domain of political power.’’ Id.
No other court has explicitly addressed the constitutionality of the IEEPA under the Salerno ‘‘no set of circumstances’’ test. In Global Relief Foundation, Inc., supra, 207 F.Supp.2d at 793, plaintiff argued the IEEPA did not apply to the domestic assets of a United States corporation. Plaintiff did not challenge the constitutionality of the statute under Salerno. In Holy Land Foundation, supra, 219 F.Supp.2d at 67, plaintiff argued that under the IEEPA, the President can only block property in which a foreign country or national has an interest that is ‘‘legally enforceable.’’ Again, plaintiff did not challenge the statute’s constitutionality under Salerno.
In Al–Haramain Islamic Foundation v. U.S. Dept. of Treasury, supra, the plaintiff challenged the lack of procedural safeguards and regulations under the APA, arguing that OFAC’s designation process was arbitrary and capricious because ‘‘none of the regulations [identified] any procedural or substantive criteria to guide the process.’’ 585 F.Supp.2d at 1253. In response to plaintiff’s complaint that the designation process lacked procedural safeguards, the court held ‘‘there is no mandatory duty requiring OFAC to adopt the regulations AHIF–Oregon demands TTT, the agency’s failure to do so cannot be deemed ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law’ under the APA TTT In the absence of regulations, the requirements of due process apply.’’ Id. at 1254. Thus, although the court did not specifically address the constitutionality of the statute under the Salerno ‘‘no set of circumstances’’ test, it rejected plaintiff’s challenges by noting that the requirements of

17. See supra, § 4. Nor, despite KindHearts’ contention to the contrary, does the statute

implicate First Amendment freedoms. Id.

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due process apply to and constrain implementation of the statute.
The government argues that the IEEPA can be applied constitutionally. It asserts that its application to KindHearts is an example of a set of circumstances under which the statute is constitutional. It notes that KindHearts suggests safeguards that it believes would satisfy the constitutional standard. Thus, according to the government, KindHearts itself suggests a set of circumstances under which the IEEPA is constitutional.
[32] In Khouzam v. Attorney General of the U.S., 549 F.3d 235, 243–44 (3rd Cir.2008), the court, considering the facial constitutionality of the Foreign Affairs Reform and Restructuring Act of 1998 [FARRA] noted that neither the statute nor its implementing regulations provided ‘‘any procedures to be afforded the alien once the Attorney General [made] a determination that a deferral [of removal] should be terminated based on diplomatic assurances.’’ The court did not, however, fault the statute or its implementing regulations for the lack of process the petitioner received. It noted that the Act did not prohibit the Executive from acting constitutionally, and therefore was not facially unconstitutional. The court stated, ‘‘We do not attribute the lack of due process to TTT FARRA or its implementing regulations, for neither expressly directed the Executive to act in a manner that offends the Fifth Amendment. A statute is not facially unconstitutional unless ‘no set of circumstances exists under which the Act would be valid.’ ’’ Id. at 258; see also, Washington State Grange, supra, 552 U.S. at ––––, 128 S.Ct. at 1194 (finding statute was not facially unconstitutional because it could ‘‘conceivably be’’ implemented in a constitutional manner). But see, e.g., Wis-

consin v. Constantineau, 400 U.S. 433, 439, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971) (finding statute that lacked provisions for notice and hearing unconstitutional); Leslie v. Lacy, 91 F.Supp.2d 1182, 1186, 1193 (S.D.Ohio 2000) (finding statute unconstitutional on its face where text contained ‘‘no provision for notice TTT or hearing prior to the transfer of title TTT or after the transfer of title.’’).
OFAC does not contend that due process requirements do not apply at all. Indeed, it contends that it has met those requirements. Thus, it implicitly acknowledges the mandate of due process: it only disputes the claim of noncompliance. Although OFAC, as discussed in the next subsection, failed to afford adequate postdeprivation due process, the statute under which it acted can, if properly administered, be implemented consonant with due process requirements. It is, therefore, not unconstitutional on its face.
B. Asset Freeze: As–Applied Due Process Challenge
KindHearts argues OFAC provided inadequate post-deprivation process after impositing the block pending investigation in February, 2006, thereby violating KindHearts’ due process rights. These violations, according to KindHearts, included OFAC’s failure to specify any objective criteria for blocking KindHearts’ assets and provide either pre- or postdeprivation process. Due to OFAC’s alleged unconstitutional application of its blocking power, KindHearts asks that I lift the block.18
KindHearts claims that as notice of the block, OFAC only provided a single boilerplate sentence stating that OFAC was investigating it for possible connections to

18. The parties agree that OFAC’s block pending investigation constitutes a final agency

action subject to judicial review.

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Hamas. According to KindHearts, the notice failed to specify the Executive Order criteria OFAC suspected KindHearts of violating, and instead cited all the criteria in one sentence. Although KindHearts repeatedly asked for specification of the charges against it and reasons for OFAC’s freeze, OFAC ignored its requests. KindHearts asked for the full administrative record OFAC was using against it, but OFAC has to date failed to provide KindHearts with the full record.19
OFAC notified KindHearts that it could submit a letter in response to OFAC’s block. Despite KindHearts’ prompt submission, OFAC failed to respond for over one year. Its response consisted of a mere acknowledgement of KindHearts’ letter.
The government rejects KindHearts’ assertion that it received constitutionally inadequate process following the blocking of its assets. First, the government argues that in this case, due process does not require pre-deprivation notice or an opportunity to be heard. KindHearts does not refute the contention on this point. Predeprivation notice is not always necessary. See, e.g., Calero–Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 678–79, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974) (finding that in limited circumstances a seizure can take place without pre-seizure notice and a hearing).
The government insists KindHearts cannot legitimately claim it was unaware of the legal and factual grounds for the block. The initial blocking order notice stated that OFAC blocked KindHearts’ assets under E.O. 13224 and the IEEPA, as amended by the Patriot Act. It included the legal criteria supporting its investigation, stat-

ing it was investigating KindHearts for being ‘‘controlled by,’’ ‘‘acting for or on behalf of,’’ ‘‘assisting in or providing financial or material support to,’’ ‘‘and/or otherwise being associated with Hamas.’’
OFAC notes that the blocking notice did not include every basis for blocking authorized in E.O. 13224. Thus, it disputes KindHearts’ contention that it simply recited that Order’s list. Due process was also provided, the government asserts, via its invitation to KindHearts to challenge the blocking order by sending a letter presenting its views and evidence to the attention of the director of OFAC.
The government also claims that the press release placed on its website concurrently with issuance of the blocking notice constituted adequate notice of the factual basis for its decision to block KindHearts’ assets. OFAC adds that to date, it has given KindHearts its letter stating its provisional determination to designate KindHearts an SDGT and the thirty-five unclassified and non-privileged exhibits supporting that provisional determination, redacted provisional determination evidentiary memorandum, redacted block pending investigation evidentiary memorandum and portions of declassified exhibits. All this information, according to OFAC, constitutes sufficient notice for KindHearts meaningfully to challenge the block, along with its challenge to the provisional determination.
KindHearts responds that OFAC is conflating the notice it provided in conjunction with its blocking action with the notice of the provisional SDGT determination.
In response to KindHearts’ complaint about the three year delay in providing the bulk of the materials now in its hands, the

19. On May 25, 2007 (approximately one year and three months after the government initiated the block pending investigation), the government provided to KindHearts its unclassified and non-privileged record consisting of

thirty-five exhibits along with its letter informing KindHearts of its provisional determination to designate KindHearts as a SDGT. The government did not, however, provide access to its classified record.

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government contends that its original press release, issued concurrently with the blocking order, constituted sufficient notice. That, coupled with the invitation to KindHearts to send a letter challenging the blocking order, satisfied due process. The government additionally argues that whatever notice problems may have existed at the time of the blocking have been cured because KindHearts now has adequate notice and may challenge both the block and impending designation. According to OFAC, whatever process problems the delay caused will be cured because the process is moving forward, and the parties are negotiating a timeline for a prompt adjudication.
(i). Components of Adequate Notice
Constitutionally sufficient notice must be reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be TTT reasonably [calculated] to convey the required information TTT [W]hen notice is a person’s due, process which is a mere gesture is not due process.
Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314–15, 70 S.Ct. 652, 94 L.Ed. 865 (1950).
[33] Constitutionally sufficient notice should give the party an understanding of the allegations against it so that it has the opportunity to make a meaningful response. The party must be able to know the conduct on which the government bases its action, so that it can explain its conduct or otherwise respond to the alle-

gations. It must also have reasonable access to the evidence that the government is using against them. See, e.g., Gete v. I.N.S., 121 F.3d 1285, 1297–98 (9th Cir. 1997) (discussing requirements of notice).
To determine whether KindHearts received constitutionally required process in conjunction with OFAC’s block pending investigation, I must weigh 1) ‘‘the private interest TTT affected by the official action;’’ 2) ‘‘the risk of an erroneous deprivation of such interest through the procedures used;’’ and 3) ‘‘the Government’s interest, including the function involved and the fiscal and administrative burdens that TTT additional or substitute procedural requirement would entail.’’ Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).
(ii). What OFAC Provided as Notice
To the extent that the government has provided notice of the basis for its blocking notice, it has done so in a piecemeal and partial manner. The blocking order simply recited criteria from E.O. 13224 and referenced the IEEPA, as amended by the Patriot Act and 31 C.F.R. Part 594. According to KindHearts, OFAC simply stated all possible criteria for investigation in a single sentence. OFAC disputes this, noting that it did not mention all of the criteria listed in the Executive Order.20 The concurrently posted press release similarly failed, according to KindHearts, to give any useful information about why the government froze all its assets and put it out of operation.
OFAC’s invitation to KindHearts to send a letter in response to the blocking

20. KindHearts also argues that OFAC failed to state the legal criteria supporting its blocking decision. OFAC now states it acted under the ‘‘reasonable basis’’ standard of the APA, at times calling the standard a ‘‘reasonable basis to suspect’’ [Doc. 36, at 30, n. 25; 37] and at other times, a ‘‘reasonable basis to believe.’’ [Doc. 73, at 25]. As discussed in

the § 3(A)(i)(b), supra, the government’s purported legal basis improperly tries to convert the standard for judicial review into the substantive standard triggering action under the statute. Going forward, the legal criteria for initiating the block pending investigation will be probable cause under the Fourth Amendment.

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notice did not add to KindHearts’ understanding of the reasons and basis for the government’s actions. The government did not offer access to the unclassified administrative record, any part of the documents and property seized during execution of the search warrants, or funds to pay attorney fees. Nonetheless, KindHearts’ attorney at that time, Jihad Smaili, promptly submitted a challenge to OFAC’s blocking action.
On November 29, 2006, Lynne Bernabei, successor counsel for KindHearts, wrote OFAC requesting access to the full administrative record for the potential designation. Not only did OFAC not provide any portion of the administrative record, it did not even respond to the November 29th letter.
On May 25, 2007, fifteen months after OFAC blocked KindHearts, and more than a year after Smali’s letter to OFAC, OFAC notified KindHearts that it had provisionally determined to designate KindHearts an SDGT. OFAC’s notice acknowledged receipt of Smaili’s November 29, 2006, letter, and stated that since receiving his letter, it had completed its investigation,

which resulted in the provisional SDGT designation.
OFAC’s notice of provisional designation did not recite new or alternative grounds for the potential designation. Instead, OFAC reiterated that its blocking action was based on the IEEPA, E.O. 13224 and 31 C.F.R. Part 594. It included with the letter thirty-five unclassified, non-privileged exhibits, which constituted the unclassified administrative record on which OFAC based its provisional determination.
OFAC did not include a statement explaining how those exhibits related to its charges against KindHearts, or how those documents were relevant. See Al–Haramain, supra, 585 F.Supp.2d at 1255–56 (stating that the government failed to provide constitutionally adequate process when it provided the administrative record supporting its designation /redesignation but the majority of those documents did not mention the plaintiff, and OFAC failed to explain the significance of that evidence).
Twenty of the thirty-five exhibits provided to KindHearts with the provisional determination notice do not mention KindHearts.21 The unclassified administrative

21. The unclassified administrative record consists of: a list of ‘‘Charitable societies whose accounts at Arab Bank were confiscated by Israeli security forces as Part of the Struggle Against Financing Terrorism,’’ from the Intelligence and Terrorism Information Center at the Center for Special Studies (http://www.intelligence.org.il/eng/finance/ bacnk ap6.htm); an article in the Cincinnati Post describing Fawaz Damrah’s sentencing to two months in prison; Treasury Department press release regarding Al–Aqsa’s designation as a financier of Terror Charity linked to Hamas; Treasury Department press release regarding Global Relief’s designation; indictment in Northern District of Illinois of Marzook (2004); Treasury Department Press release: U.S. Designates 5 Charities and 6 Hamas Leaders as Terrorist Entities; indictment in Holy Land Foundation v. U.S. (Northern District of Texas) 2004; Article on

palestine-info.net: PA Closes down Islamic Institution, Societies, Newspapers, Parties; KindHearts’ Articles of Incorporation; Department of Justice Press Release: Alamoudi sentenced to Jail in Terrorism financing case; Treasury Department Press release 2004: Treasury Designates Global Network, Senior Officials of IARA for Support to Bin Laden, Others; 2003 Tax Form 990 for KindHearts; two KindHearts Newsletters describing its activities; Toledo Blade article regarding Senate Finance Committee’s investigation of twentyfive Muslim organizations, including KindHearts, and the closing of the investigation; KindHearts’ address in Palestine and Lebanon on website; E.O. 13224 annex; three page ‘‘statement of the case’’—almost verbatim repeat of press release OFAC issued on February 19, 2006; Press Release from Chairman of U.S. Senate Finance Committee; KindHearts and IARA correspondence and

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record includes court opinions and indictments in Global Relief and Holy Land cases, historical articles, a Council on Foreign Relations Backgrounder on Hamas, various OFAC press releases, newspaper articles, KindHearts’ Newsletters and its organizational chart. OFAC invited KindHearts to respond to its provisional determination decision within thirty days of the date of the letter.
On June 14, 2007, KindHearts renewed its request for the full administrative record, both classified and unclassified. On June 25, 2007, KindHearts responded to OFAC’s provisional determination with a twenty-eight page preliminary submission. It attached to that a 1369–page submission of supporting evidence. On June 27, 2007 KindHearts also requested that OFAC initiate declassification review.
OFAC never responded to KindHearts’ June 25th submission.22 On August 10, 2007, KindHearts asked OFAC to perform a declassification review of the classified and privileged evidence on which it relied.
OFAC agreed, and said it would give KindHearts thirty days after the end of the declassification review to submit a response. For over fourteen months OFAC reported no progress with the review.23
On August 13, 2007, KindHearts requested further clarification of the charges against it, and an extension of time until

forty-five days after the declassification review was complete. On August 15, 2007, it also asked for access to classified evidence and to its own documents, all of which had been seized. On November 6, 2008, OFAC sought declassification review of block-related documents.
On December 12, 2008, approximately thirty-four months after the block pending investigation, and approximately eighteen months after its provisional determination to designate KindHearts an SDGT, the government provided KindHearts with redacted versions of the block memorandum and evidentiary memo on which it relied in reaching its provisional determination. In its redacted provisional determination memo, OFAC indicated the significance of the unclassified records it had released nineteen months earlier.
In December, 2008, and January, 2009, OFAC declassified portions of the administrative record supporting its block. That record included seven exhibits that the government had not included among the exhibits disclosed with the provisional determination decision. The additional exhibits, according to the government, had not been relied on in making that determination.24 The December, 2008, submission included a redacted copy of the block memorandum.

invoices; contractual agreements for services between KindHearts and North American Professional Services, Inc., & MLC Solutions; Letter from Sanabil to KindHearts; Global Relief Program reports; Email exchanges between KindHearts employees; Letter from Welfare Association to KindHearts; Internet article: ‘‘In Deir—El Balah, the Islamic Movement of Resistance Collects the Fruits of its Work on the Ground’’ (World Online); Global Relief contacts; Holy Land DC District and Circuit opinions; Boim v. Quaranic Literacy opinion; articles on the ‘‘Society of Muslim Brothers’’ and ‘‘Muslim Brotherhood’s Conquest of Europe;’’ Council on For-

eign Relations Backgrounder on Hamas, KindHearts’ Organizational Chart.
22. KindHearts learned about a year later that OFAC had no record of having received the submission. OFAC later admitted that it had received, but later misplaced the record. [Doc. 73].
23. After KindHearts filed this lawsuit, OFAC told its counsel that it could complete the declassification review within thirty days.
24. The government also stated that it would not be relying on those exhibits in the designation proceedings.

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On January 30, 2009, 594 F.Supp.2d 855 (N.D.Ohio 2009), OFAC declassified portions of several paragraphs in the block memorandum. On March 13, 2009, in response to KindHearts’ final brief relating to the pending pretrial motions, OFAC declassified one of the several bases for its block and provisional determination to designate KindHearts.
In sum, the ‘‘notice’’ KindHearts has received to date, since the government’s provisional determination to designate it an SDGT, is the letter KindHearts received informing it of the government’s decision, the thirty-five unclassified, nonprivileged exhibits, and a redacted version of the provisional determination evidentiary memo. OFAC claims it relied on the thirty-five exhibits in making its blocking decision, in addition to seven other exhibits that it did not rely on in making its provisional determination decision. Those seven exhibits and the redacted block evidentiary memorandum have been handed over to KindHearts.
KindHearts remains largely uninformed about the basis for the government’s actions. To the extent that it has become usefully informed, that information came only after long, unexplained and inexplicable delay and following multiple requests for information.25
(iii). OFAC’s ‘‘Notice’’ Was Constitutionally Inadequate
OFAC’s block of KindHearts resulted in the indefinite freeze of all of KindHearts’ assets and property, including about one million dollars in bank accounts. The

block shut KindHearts down indefinitely and its corporate existence remains in jeopardy due to OFAC’s block pending investigation.
[34] Applying the first factor from the Mathews balancing test—the private interest affected by OFAC’s action—it is clear that the private interest is substantial. An American corporation has had all its assets seized and been put out of business without being told, in any meaningful or useful way why, or on what basis the government took that action.
Applying the second Mathews factor— the risk of erroneous deprivation—I conclude that the failure to provide adequate and timely notice creates a substantial risk of wrongful deprivation. This is especially so in view of the fact that the government does not contend that KindHearts was donating its funds exclusively to Hamas. But the government has not provided its estimate of the approximate amounts of such donations, or what portion of KindHearts’ funds went to Hamas or individuals or entities related to Hamas.
Nor, as importantly, has the government stated which recipients, to the extent that it knows of specific recipients, were Hamas fronts or Hamas affiliated. Without this sort of information, KindHearts cannot meaningfully challenge the government’s actions. Not knowing to whom, in the government’s view, its funds should not have gone, it cannot rebut the government’s claim that recipients were Hamas connected.
An inability to rebut necessarily enhances, if it does not entirely ensure, the likelihood of erroneous deprivation.26

25. To the extent that OFAC contends, or might contend, that KindHearts knew itself what it was doing, where its funds were going and the unlawfulness of their destination, such response on its part is unavailing. Notice is to come from the government because it alone knows what it believes, and why what it believes justifies its actions.

26. As discussed infra, § 4(F) and § 5, the government has refused KindHearts’ requests for access to the blocked funds to enable it to compensate its attorneys. OFAC’s refusal to let KindHearts pay its lawyers to bring its challenges to the government’s actions amplifies the risks of erroneous deprivation. This is so, even though KindHearts has counsel in

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Other courts have found that failure to provide meaningful notice creates a high risk of erroneous deprivation. For example, in Gete, supra, the Ninth Circuit held that INS’ procedures following vehicle seizures violated procedural due process. The court faulted INS for failing to provide, post-seizure, its legal and factual basis for the seizure, ‘‘copies of [the] evidence to be used against them,’’ and ‘‘statements of the reasons for its denials of relief.’’ Id. at 1298. It explained that such procedures were necessary to ‘‘permit [plaintiffs] effectively to rebut the INS’ claims.’’ Id. at 1297. The court explained:
[R]equiring the disclosure of the factual bases for seizures would go a long way toward preventing some of the erroneous and fundamentally unfair forfeiture decisions that inevitably flow from so haphazard a process. So, too, would requiring the giving of notice of the specific statutory provision allegedly violated, rather than allowing the mere provision, without explanation, of copies of the entire statute and regulations. Similarly, furnishing owners with copies of evidence to be used against them, such as officers’ reports detailing the facts upon which the claim of probable cause is based, would permit them to understand the true nature of the INS’ charges and afford them a fair opportunity to prepare a proper defense to the threatened forfeiture. Finally, requiring the INS to provide statements of the reasons for its denials of relief would enable persons whose vehicles have been declared forfeited to determine whether the agency based its decision on erroneous facts, to discover whether there is evidence not previously considered that might be submitted, and to prepare rea-

sonably informed petitions for remission, mitigation, and reconsideration.
Id. at 1298.
To comply with due process requirements, OFAC should, at the very least, have promptly given KindHearts the unclassified administrative record on which it relied in taking its blocking action. See Al Haramain, supra, 585 F.Supp.2d at 1255– 57 (discussing the inadequacy of the record’s contents, but taking for granted that the record should be provided after the block); Global Relief Found., supra, 207 F.Supp.2d at 808 (noting OFAC publicly filed four binders of exhibits on March 27, 2002, approximately three months after OFAC’s block of Global Relief’s assets); Holy Land Found., supra, 333 F.3d at 164 (stating due process requires disclosure of the unclassified portions of the administrative record). Without that record, OFAC’s invitation to send a letter challenging the block held out no hope that any challenge would be either comprehensive or successful.
Applying the third Mathews factor—the governmental interest and burden of providing additional procedural protection—I note that OFAC has not explained, either to KindHearts or this court, why it failed to provide timely notice of the basis and reasons for its blocking order, or why it took so long for it to provide the scanty information it ultimately has produced.
OFAC apparently assumes that no explanation is needed. If so, it necessarily concedes that the third Mathews factor indisputably favors KindHearts. Absent an explanation for its conduct and dismissive treatment of KindHearts’ oft-repeated requests, it cannot claim that to have done

this lawsuit, which involves the prospect, but no guarantee of fee-shifting under the Equal

Access to Justice Act, 28 U.S.C. § 2412(d).

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otherwise would have been unacceptably or unduly burdensome.
In sum, consideration of the Mathews factors leads inescapably to the conclusion that OFAC violated KindHearts’ fundamental right to be told on what basis and for what reasons the government deprived it of all access to all its assets and shut down its operations. Whether OFAC violated the Constitution deliberately or indifferently does not matter at this stage: what matters is that OFAC did not meet its obligation to provide meaningful notice regarding its deprivation of KindHearts’ property.
(iv). Failure to Provide Prompt Post–Deprivation Hearing
In addition to constitutionally inadequate notice procedures, KindHearts also argues OFAC failed to provide it a meaningful opportunity to be heard. As the Supreme Court stated in Fuentes v. Shevin, 407 U.S. 67, 80–81, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) (citation omitted):
The constitutional right to be heard is a basic aspect of the duty of government to follow a fair process of decisionmaking when it acts to deprive a person of his possessions. The purpose of this requirement is not only to ensure abstract fair play to the individual. Its purpose, more particularly, is to protect his use and possession of property from arbitrary encroachment-to minimize substantively unfair or mistaken deprivations of property,TTTT So viewed, the prohibition against the deprivation of property without due process of law reflects the high value, embedded in our constitutional and political history, that we place on a person’s right to enjoy what is his, free of governmental interference.

[35] Despite the due process requirement of prompt post-deprivation hearing, KindHearts received no response to its administrative challenge for over one year. When OFAC finally responded, it merely stated it had received KindHearts’ challenge and had provisionally determined to designate it an SDGT. It provided no reasons for its decision. It merely enclosed a copy of the unclassified record on which it relied in making its provisional determination and invited KindHearts to send another response.
It is unclear whether OFAC even considers its invitation to KindHearts to challenge its block and its one line response a ‘‘post-deprivation hearing.’’ 27 OFAC did not require the challenge by a certain date, nor did it agree to respond by a certain date. It waited over a year to respond. And one can hardly consider its one sentence acknowledgment of the receipt of KindHearts’ letter (which KindHearts put forward without the unclassified record, its own documents or access to its funds to pay its attorneys) a due process hearing.
Even if OFAC somehow believes that its invitation to send a letter fulfilled, at least initially, its obligation to give KindHearts an opportunity to be heard, its subsequent unresponsiveness has left KindHearts without any semblance of due process.
This is particularly true in light of how long OFAC has withheld the opportunity to be heard. Partially through simple unresponsiveness, and partially through piecemeal disclosure of information, OFAC has engendered a delay of remarkable duration.
Promptness is an important aspect of the due process right to be heard. Barry v. Barchi, 443 U.S. 55, 64, 99 S.Ct. 2642, 61

27. Adam Szubin, director of OFAC, described OFAC’s response to KindHearts’ challenge as an implicit denial of its challenge. He stated, ‘‘OFAC’s May 25, 2007 letter informing

KindHearts of its provisional determination to designate referenced KindHearts’ request for reconsideration and, by implication, denied it.’’ [Doc. 73, Att. 1].

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L.Ed.2d 365 (1979). There is, though, no bright-line gauge for determining whether the government has provided a hearing with sufficient promptness to protect against undue severity from the deprivation. Instead, the Supreme Court has created another balancing test, whereby courts are to examine the ‘‘importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken.’’ Fed. Deposit Ins. Corp. v. Mallen, 486 U.S. 230, 242, 108 S.Ct. 1780, 100 L.Ed.2d 265 (1988).
In this case, KindHearts asserts a substantial private interest-its existence and loss of access to its assets.
OFAC asserts its dilatoriness resulted from a need to progress further with its investigation before being able to evaluate KindHearts’ challenge. It argues Congress gave OFAC the power to maintain the status quo while determining whether an organization has unlawful ties to Specially Designated Global Terrorists.
OFAC also argues that KindHearts is partly responsible for the delay, particularly any delay after May 25, 2007. OFAC notes that KindHearts has requested several extensions to respond to OFAC’s piecemeal disclosure of information about its reasons for the blocking order.28
OFAC bears primary responsibility for the delay KindHearts has encountered in its effort to be heard: It waited fifteen months after the block to make a provisional determination and provide even the largely uninformative unclassified record to KindHearts. In the meantime, OFAC

apparently lost a 1369–page submission that KindHearts attached to its preliminary response.
After OFAC agreed to declassify documents, more than fourteen months passed before KindHearts saw any results from the declassification review. OFAC took more than thirty months to give KindHearts redacted records supporting its blocking action. It also resisted giving KindHearts access to its own documents. The delays KindHearts has sought have, in contrast, been a reasonable attempt to be able to review and respond to intermittent, and still incomplete disclosure of the information on which OFAC acted.
The final element of the promptness inquiry is the likelihood that the interim decision was mistaken. OFAC presently asserts that it issued the block order and has been investigating KindHearts because: 1) from KindHearts’ inception individuals have been involved in the organization who were active and influential participants in other Islamic charities that OFAC has shut down due to their support of overseas terrorist organizations, including Hamas; 2) members of KindHearts have had contacts with known members of Hamas; and 3) KindHearts’ funds have gone to Hamas controlled entities in the Middle East.
The materials provided to KindHearts give rise to some reason to believe that these allegations may be so. But what matters is whether OFAC has failed to afford KindHearts with a adequate opportunity to be heard in response to those allegations. On balancing the pertinent factors, I conclude that OFAC has failed to provide a meaningful hearing, and to do so

28. The fact that KindHearts sought to enjoin final designation as a SDGT should not be held against it. KindHearts perceived that such designation would have prejudiced its position in this case. In any event, its motion

for a temporary restraining order came after years had passed since the initial block order and the intervening failure by OFAC to provide it with reasonable notice.

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with sufficient promptness to moderate or avoid the consequences of delay. OFAC did not provide timely or sufficient notice to enable KindHearts to prepare an effective challenge. OFAC ignored KindHearts’ initial response. What reply OFAC made to KindHearts’ responses and requests was delayed and did not cure the deficiencies of its earlier notice. Even if OFAC may ultimately show it had an adequate basis for the blocking order, that does not justify the length of the government’s delay in giving KindHearts an opportunity to be heard.29
(v). Prejudice to KindHearts From the Due Process Violations
After concluding that OFAC’s provision of post-block process was constitutionally deficient, I must determine whether, despite the unconstitutional procedures, I can ‘‘say any due process violation was harmless beyond a reasonable doubt.’’ Al Haramain, supra, 585 F.Supp.2d at 1257 (citing Tennessee Secondary Sch. Athletic Ass’n v. Brentwood Academy, 551 U.S. 291, 303, 127 S.Ct. 2489, 2497, 168 L.Ed.2d 166 (2007)).
The parties’ briefs have not addressed this issue, and I am not certain that the record, in any event, is sufficiently developed to determine whether and to what extent KindHearts has been prejudiced, and whether any such prejudice has been cured or presently can be remedied. Further proceedings must occur before these questions can be answered.

C. As–Applied Challenge to Provisional Designation
KindHearts also raises constitutional challenges to the process provided in conjunction with OFAC’s provisional designation of KindHearts a SDGT.
OFAC does not contest KindHearts’ right to have adequate pre-designation notice and an opportunity to be heard. It claims it has provided the process that is due KindHearts relative to SDGT status.
OFAC also contends that KindHearts’ claim that OFAC has not provided due process with regard to such status is not ripe for judicial review. This is so, according to OFAC, because it has yet to take final agency action, in the form of final designation of KindHearts as a SDGT. Thus, it argues, its actions thus far are not judicially reviewable under the APA.
The APA limits judicial review of administrative actions to ‘‘final agency actions.’’ 5 U.S.C. § 704. KindHearts insists, however, that, under Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), abrogated on other grounds, Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), I can nonetheless now enjoin final SDGT designation.
In Abbott Laboratories the Court upheld pre-enforcement review of agency actions. As KindHearts reads this decision, anticipated agency action is ripe for judicial review if the court finds that the issues are

29. KindHearts suggests that the Director of OFAC cannot be a neutral decision-maker. The Northern District of Illinois rejected a similar argument in Global Relief Foundation, supra, 207 F.Supp.2d at 806, in which plaintiff refused to challenge OFAC’s block on the basis that the challenge amounted to little more than ‘‘window dressing because TTT the person TTT responsible for prosecuting Global Relief’’ would also be receiving the evidence. It cited the Supreme Court, which held that members of administrative agencies typically

receive results of investigations, ‘‘approve the filing of charges or formal complaints instituting enforcement proceedings, and then TTT participate in the TTT hearings.’’ (citing Withrow v. Larkin, 421 U.S. 35, 56, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975)). The Supreme Court explained the procedure did not violate the APA or due process. Thus, a hearing before the Director of OFAC does not constitute a violation of KindHearts’ due process right to a neutral decision-maker.

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‘‘fit for judicial review’’ and the parties will be harmed if I withhold consideration.
The decision in Abbott Labs and cases applying that decision are, however, limited to cases in which petitioners seek preenforcement review of what courts deem ‘‘final agency actions.’’ For agency actions to be considered final, ‘‘the action must mark the consummation of the agency’s decision-making process—it must not be of a merely tentative or interlocutory nature.’’ Bennett v. Spear, 520 U.S. 154, 177–78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). The action must also ‘‘be one by which rights or obligations have been determined, or from which legal consequences will flow.’’ Id. (citations omitted).
In Abbott Labs, the Supreme Court permitted pre-enforcement judicial review of an FDA regulation interpreting a statute. The Court found that pre-enforcement review was appropriate despite the fact that the regulation had not yet been enforced against a specific party. In its analysis, the Court noted that the ripeness doctrine required it to consider the ‘‘fitness of the issues for judicial decision’’ and the ‘‘hardship to the parties of withholding court consideration.’’ Id. at 149, 87 S.Ct. 1507.
In its discussion of the fitness of the issues for judicial review, the Court asserted that it considered the issuance of the regulation ‘‘final agency action’’ making it ripe for review under the APA. It noted that courts have ‘‘interpreted the finality element in a pragmatic way.’’ Id.
In each of the examples it cited to support a pragmatic interpretation of the finality element, the Court found agency regulations and orders as final agency actions fit for judicial review. Asserting that the regulation at issue in Abbott Labs constituted final agency action, the Court stated, ‘‘The regulation challenged here, promulgated in a formal manner after announcement in the Federal Register and consideration of comments by interested

parties is quite clearly definitive. There is no hint that this regulation is informal.’’ Id. at 151, 87 S.Ct. 1507.
In Ammex Inc. v. Cox, 351 F.3d 697, 706 (6th Cir.2003), the Sixth Circuit, applying Abbott Labs, held that ripeness in the context of pre-enforcement review of agency action requires the court to weigh three factors:
The first two deal with the fitness of the issues for judicial determination. One aspect of the judicial fitness of the issues is the extent to which the legal analysis would benefit from having a concrete factual context. The second aspect TTT is the extent to which the enforcement authority’s legal position is subject to change before enforcement. The third consideration deals with the hardship to the parties of withholding court consideration.
In its discussion of the second factor, the Sixth Circuit noted that in Abbott Labs, the court found the regulation ripe for judicial review because it represented a ‘‘final regulation that the FDA was unlikely to change.’’ Id. at 708.
After noting the need for final agency action, the Sixth Circuit found no final agency action in Ammex, where the ‘‘Notice of Intended Action’’ was ‘‘at most an initiation of proceedings’’ and not final agency action. Id.; see also National Park Hospitality Ass’n v. Dept. of Interior, 538 U.S. 803, 812, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003) (considering whether section at issue was final agency action, in addition to whether the question presented was a purely legal one, and whether ‘‘further factual development would significantly advance the court’s ability to deal with the legal issues presented’’); Texas v. U.S., 497 F.3d 491, 498–99 (5th Cir.2007) (finding challenge to secretarial procedures fit for judicial review in part because they constituted ‘‘final agency action, as

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they [were] final rules that were promulgated through a formal notice—and—comment rule-making process after announcement in the Federal Register ’’).
It is unclear which of OFAC’s actions KindHearts considers ‘‘final’’ and subject to review. OFAC has not formally designated KindHearts an SDGT. KindHearts argues that OFAC has, for all intents and purposes, already made a final decision regarding its designation. OFAC, however, has stated that it will consider a response from KindHearts before determining whether to designate it. I cannot assume that OFAC will designate KindHearts before it has done so.
OFAC’s provisional determination to designate KindHearts is not final agency action subject to review, because it does not ‘‘mark the consummation of the agency’s decision-making process.’’ Bennett v. Spear, 520 U.S. 154, 177, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
Another point of contention is OFAC’s unwillingness to provide access to classified evidence or further notice to KindHearts. OFAC contends that it has provided sufficient due process to KindHearts. Thus, its attitude toward giving more information to KindHearts appears ‘‘final.’’
[36] I have not come across a case in which a court deemed an agency’s interlocutory and ongoing decisions regarding notice, where such decisions have not been formalized by agency rule, regulation, statute, order etc., as a final agency action subject to judicial review. The Abbott Labs line of cases permitting pre-enforcement review does not involve a due process claim similar to that which KindHearts raises. KindHearts does not seek preenforcement review of a formal, finalized regulation, statute or policy. KindHearts seeks, rather, pre-enforcement review of a process that it asserts has denied it due process.

I conclude, accordingly that KindHearts’ due process challenge to possible final designation as a SDGT is not ripe for judicial review.
D. Restrictions on KindHearts’ Access to Its Own Documents
KindHearts argues that OFAC also severely restricted its due process right to meaningfully respond to allegations against it by: 1) denying it access to its own documents for over two years; 2) placing unreasonable restrictions on its ability to review and use the documents; and 3) requiring counsel to give the government results of any independent investigation taken as part of KindHearts’ defense.
During its February, 2006, execution of search warrants at KindHearts’ office and its president’s home, the FBI seized 150 boxes of documents, paper files, computer hard drives, video tapes and other media. OFAC refused to provide KindHearts copies of those records for over two years. KindHearts claims those records constituted the core of its defense because they document how it spent its money.
KindHearts also contends that in creating its administrative record OFAC selectively used those documents, excluding information unfavorable to it and thereby skewing that record.
In 2008, OFAC gave KindHearts’ counsel an electronic copy of a subset of its documents subject to a protective order. The order prohibited KindHearts members and officers from viewing the documents without court approval, and forbade KindHearts counsel from printing or electronically copying any documents. Only one representative had a copy of a subset of its own documents.
After KindHearts filed suit on October 9, 2008, the United States Attorney’s office indicated a willingness to discuss amend-

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ments to the protective order. The government agreed to amend the order, permitting KindHearts attorneys to have an electronic copy of the documents, and allowing former KindHearts officials to view the documents in counsels’ offices.
KindHearts complained that these restrictions still interfered with its ability to present a meaningful defense. Because some former officials live elsewhere than where the attorneys reside, KindHearts objected to the requirement that those officials could only review documents in counsels’ offices. It similarly objected to the restriction on counsels’ ability to print documents for review or to attach to pleadings.
The government acknowledged it provided counsel with an incomplete ‘‘subset’’ of the seized materials. It refused to provide the remainder even under the restrictive terms of the protective order, and despite the fact that the materials, having been generated by KindHearts, were not classified.
OFAC claimed these restrictions were reasonable. In its initial response, it argued the blocked documents could contain sensitive information such as donor lists, donee information, procedures to avoid detection, etc. According to OFAC, its substantive reasons for limiting access to documents trumped KindHearts’ concerns.
This court, on January 30, 2009, granted KindHearts’ motion to modify the amended protective order. It required OFAC to disclose to KindHearts copies of all documents seized by the government, without unreasonable restrictions. In light of the protective order, OFAC allowed KindHearts to receive blocked documents and removed the requirement that documents be viewed only under supervision of counsel. It therefore rendered moot KindHearts’ complaints regarding OFAC’s rule that former KindHearts officials review documents in the presence of counsel.

Though KindHearts now enjoys substantially unrestricted access to its own documents, that does not mean that the government’s conduct has no due process implications. Without access to its corporate records, KindHearts would find it difficult, if not impossible to document claims that OFAC either overlooked records favorable to KindHearts or misinterpreted records. Denying access by KindHearts’ counsel to its client’s records deprived them of an important, if not the principal means for challenging the blocking order and defending against final designation of their client as a SDGT.
This action, coupled with OFAC’s delay in providing any significant information from its own files about its basis and reasons for the blocking order, left KindHearts’ attorneys almost entirely unequipped to marshal and present evidence. This, in turn, would have lessened significantly the benefits from having an opportunity to be heard, had a due process hearing been afforded to KindHearts.
E. OFAC’s Limitations On KindHearts’ Investigation
KindHearts argues that OFAC’s requirement that it identify all documents obtained from former KindHearts officials violates its due process right to a meaningful defense by forcing it to act as agents for the government. It also argues the rule is an ‘‘arbitrary and capricious exercise of authority granted under the Regulations.’’
OFAC responds that it only requires generic information regarding additional documents. For example, it wants to know the number of boxes of documents acquired from former KindHearts officials, to ensure that such material is not destroyed or disseminated. KindHearts rejects this explanation, stating the ‘‘parameters of [the rule] remain impermissibly unclear and subject to OFAC’s whim, especially given TTT the plain terms of the

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regulation—to which OFAC originally cited in support of its disclosure requirement, 31 C.F.R. 501.603(b)(ii).’’ This rule requires substantial details about documents obtained, such as the owner, property, location, and contact information for the holder of the property. 31 C.F.R. § 501.603(b)(ii) requires initial reports on blocked property to,
[D]escribe the owner or account party, the property, its location, any existing or new account number or similar reference necessary to identify the property, actual or estimated value and the date it was blocked, and shall include the name and address of the holder, along with the name and telephone number of a contact person from whom compliance information can be obtained. If the report is filed by a financial institution and involves the receipt of a payment or transfer of funds which are blocked by the financial institution, the report shall also include photocopy of the payment or transfer instructions received and shall confirm that the payment has been deposited into a new or existing blocked account which is labeled as such and is established in the name of, or contains a means of clearly identifying the interest of, the individual or entity subject to blocking pursuant to the requirements of this chapter.
OFAC states that it only requires general descriptions of the blocked property, and that such a description ‘‘need not include the contents or even the name of the source of the documents. It could satisfy its obligation by stating it was in possession of three boxes of documents.’’ [Doc.

36]. Given OFAC’s insistence that it only requires generic information so that it can carry out its mandate to provide oversight of blocked property, I find that its policy does not amount to a due process violation or an arbitrary and capricious exercise of its authority.
KindHearts does not contend that OFAC is demanding more than such generic information; nor does it argue that providing such information would violate its due process rights. Providing generic information would not compromise KindHearts’ counsel, and requiring such information is not a due process violation.
F. Restrictions on KindHearts’ Access to Its Own Funds to Finance Its Defense
OFAC prohibits use of blocked funds to pay attorney fees. Initially, under its policy, OFAC required that KindHearts either pay for attorneys through ‘‘fresh funds,’’ i.e., funds raised outside of the United States, or apply for a license from OFAC to create a legal defense fund. For over two years OFAC kept KindHearts from using any part of the blocked funds to pay its counsel.
KindHearts’ original attorney, Jihad Smaili, wrote several letters to OFAC inquiring into methods of paying employees, ways to comply with the block and obtaining access to blocked funds to pay for attorney fees. OFAC refused to entertain Mr. Smaili’s repeated requests for access to blocked funds, insisting instead that Smaili be compensated solely from overseas accounts or apply for a license to start a legal defense fund.30

30. On receiving the blocking notice, Smaili corresponded with OFAC regarding access to blocked funds to receive payment for his continued (and previous) representation of KindHearts. On February 24, 2006, Smaili sent a letter/fax to OFAC ‘‘requesting information regarding the procedure in place for receiving attorneys’ fees for his representation

of KindHearts.’’ On March 1, 2006, Smaili acknowledged being informed that he would not be able to access any of the frozen funds for legal services provided, and to be provided’’ and protested that this ‘‘smack[ed] of inherent unfairness, especially since the government hasn’t made any official accusations against KindHearts.’’

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Being unable to secure compensation, Smaili resigned as counsel in May, 2006.
Successor counsel likewise sought to obtain access to blocked funds for their fees. Their efforts were unavailing until March 3, 2009, when OFAC approved payment to Bernabei & Wachtel, PLLC of $27,040.
In June, 2008, after OFAC’s attorney fees restrictions were challenged as unconstitutional in a separate lawsuit, Al Haramain, supra, 585 F.Supp.2d at 1246, OFAC implemented its new policy. The policy permits expenditure of blocked funds at rates based on the attorney compensation provisions of the Equal Access to Justice Act [EAJA], 28 U.S.C. § 2412(d), and Criminal Justice Act [CJA], 18 U.S.C. § 3006A.

The policy thus allows payments of $7000, per attorney, for up to two attorneys for administrative proceedings and district court litigation. It permits $5000, per attorney, for up to two attorneys for appellate court litigation. Although the policy states the funds are for ‘‘up to two attorneys,’’ OFAC later explained that KindHearts and other blocked or designated charities are not limited to two attorneys, but that for purposes of OFAC’s policy it distributes funds based on a hypothetical two attorneys.
KindHearts contends that OFAC’s policy and failure to provide KindHearts access to its own funds to pay for attorneys violates its due process right to access the courts.31 OFAC contends that there is no constitutional right to counsel in civil cases

On March 9, 2006, Smaili applied for a license to enable him to access blocked funds so that he could ‘‘continue legal representation on behalf of KindHearts and to receive payment for legal services already provided to KindHearts both prior to the Blocking Notice and after the Blocking Notice.’’ He added, ‘‘KindHearts has no source of funding whatsoever after its accounts were frozen and there are no prospects for raising any funds for legal representation.’’ On March 23, 2006, OFAC responded, issuing Smaili a license, but refusing to permit him access to blocked funds. It noted ‘‘payments authorized by the license must not originate from sources within the United States or within the possession or control of a U.S. person including overseas branches and must not be made from a blocked account or blocked property.’’ It acknowledged ‘‘under appropriate circumstances, OFAC has authorized the creation and operation of legal defense funds to enable the channeling of nonblocked funds from U.S. persons for the purpose of supporting legal representation, provided that the fund is administered by a law firm.’’ If KindHearts could not raise such funds, OFAC stated it would ‘‘consider other licensing options after receiving from KindHearts the report on all blocked property in KindHearts’ possession or control, wherever located, required by § 501.603 of the C.F.R.’’ Other options could include authorizing KindHearts’ access to its

own blocked overseas property to pay for legal services, subject to certain terms and conditions. On March 27, 2006, Smaili reiterated his concerns, stating KindHearts has ‘‘no prospects for raising funds to support its legal efforts’’ and that ‘‘KindHearts’ reputation in the community has been forever tarnished and it would be inconceivable and unreasonable to expect that individuals or entities would donate money to a KindHearts legal fund.’’ On April 24, 2006, Smaili sent OFAC a letter challenging the block pending investigation, in response to the notice of February 19, 2006. On May 17, 2006, he submitted a letter to OFAC stating he was resigning as counsel for KindHearts. In June, 2006, KindHearts retained Lynne Bernabei and David Cole. They continued to send letters requesting a license to access blocked funds. OFAC continued to deny these requests. These letters continued into October, 2006. On March 3, 2009, OFAC granted Bernabei & Wachtel, PLLC, a license to obtain $27,040.00 of blocked KindHearts funds in partial satisfaction of its attorneys’ fees request.
31. KindHearts also claims that OFAC’s actions vis-a-vis KindHearts’ requests for release of blocked funds to compensate counsel were arbitrary and capricious. See § 5(B), infra.

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or access to blocked funds to pay for attorneys.
KindHearts argues that OFAC’s policy prohibiting it from using its blocked funds to pay attorney fees constitutes a violation of its due process right to access to the courts. See, e.g., Martin v. Lauer, 686 F.2d 24, 32 (D.C.Cir.1982) (‘‘Meaningful access to the courts is a fundamental right of citizenship in this country TTT Indeed, all other legal rights would be illusory without it.’’) (citations omitted).
Courts have held that the government may not deny civil litigants their right to obtain counsel. An arbitrary refusal by a state or federal court to hear a party represented by counsel would amount to ‘‘a denial of a hearing, and, therefore, of due process in the constitutional sense.’’ American Airways Charters, Inc. v. Regan, 746 F.2d 865, 873 (D.C.Cir.1984) (quoting Powell v. Alabama, 287 U.S. 45, 68–69, 53 S.Ct. 55, 77 L.Ed. 158 (1932)).
Courts having considered the issue have concluded, however, that no right to access blocked funds exists. See, e.g., id. at 869 (D.C.Cir.1984) (assets that were ‘‘blocked, TTT [could] not be touched without OFAC’s permission’’); Beobanka d.d. Belgrade v. U.S., 1997 WL 23182, *1 (S.D.N.Y.1997) (noting that plaintiffs ‘‘cite no authority for the proposition that restrictions on the method of payment of counsel violates [sic] due process.’’); Al–Haramain, supra, 585 F.Supp.2d at 1271 (finding no due process right to access blocked funds).
[37] OFAC correctly recites the doctrine that the Constitution does not guarantee compensation for counsel in civil cases. E.g., Ivey v. Bd. of Regents, 673 F.2d 266, 269 (9th Cir.1982). Here, however, KindHearts seeks to compensate

counsel from its own funds, not those of the government.
Even so, KindHearts has no constitutional claim to such funds. As the court explained in Al Haramain:
The Fifth Amendment does not require access to blocked fees to pay attorneys. In both civil and criminal cases, courts have concluded that prohibitions on the use of funds for attorneys’ fees do not pose a due process violation. For example, pretrial restraining orders which freeze assets, including funds which a defendant seeks to use to pay an attorney, do not arbitrarily interfere with a defendant’s fair opportunity to retain counsel and violate neither the fifth nor the sixth amendments.
585 F.Supp.2d 1233, 1271 (citations omitted).
5. Claims OFAC Acted Arbitrarily and Capriciously
KindHearts claims that OFAC acted arbitrarily and capriciously in implementing its initial blocking order and refusing requests to release blocked funds to compensate its counsel.32 OFAC denies that its decisions as to either issue were arbitrary or capricious.33 In addition, it contends that issues relating to release of blocked funds for attorneys’ fees are not ripe for judicial review.
Under the Administrative Procedure Act, ‘‘an agency action shall not be set aside unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ ’’ 5 U.S.C. § 706(2)(A).
Agency action is arbitrary and capricious where the agency has relied on

32. Details regarding KindHearts’ requests for access to blocked funds to compensate its counsel are set forth in § 4(v)(F), supra.

33. Having found that the block pending investigation violated the Fourth Amendment, it is not necessary to examine whether that action passes muster under the more lenient arbitrary and capricious standard.

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factors that Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency experience.
National Cotton Council of America v. U.S. E.P.A., 553 F.3d 927, 934 (6th Cir. 2009) (citations omitted).
[38] The arbitrary and capricious standard is deferential to the agency, and a court may not substitute its judgment for that of the agency. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). The court restricts its review to the administrative record without additional fact-finding. See Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). If the agency decision is supported by a rational basis in the administrative record, the decision survives arbitrary and capricious review. See Bowman Transp., Inc. v. Arkansas–Best Freight System, Inc., 419 U.S. 281, 290, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). Although arbitrary and capricious review is highly deferential to agencies, the government asserts an even higher degree of deference in the realm of foreign affairs. See Regan v. Wald, 468 U.S. 222, 242, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984).
The Sixth Circuit has explained that ‘‘when conducting this form of review, [the court] ensure[s] that the agency examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between the facts and the choice made.’’ National Cotton Council of America, supra, 553 F.3d at 934 (citing Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.

29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). ‘‘While [the court] may not supply a reasoned basis for the agency’s action that the agency itself has not given, [it] will uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.’’ Bowman Transp., Inc., supra, 419 U.S. at 285–86, 95 S.Ct. 438.
A. Ripeness
[39] OFAC’s attorney fees policy and its application to KindHearts’ attorneys is ripe for review. The policy and decision in response to counsel’s application for fees, which was granted in the amount of $27,040 for nearly three years’ work, represents a final agency action. After formally announcing the policy in June, 2008, OFAC applied the policy to KindHearts’ counsel. Though it released some blocked funds, the amount released was far less than the $46,000 counsel sought.
KindHearts has been affected directly by the policy and continues to be so affected. Its original counsel, Jihad Smaili, had to resign after multiple attempts to access blocked funds to receive payment for his work. Current retained counsel have had to seek and secure pro bono assistance from counsel from the American Civil Liberties Union.34
B. Whether OFAC’s Policy on Attorney Fees is Arbitrary and Capricious
(i). Adoption of OFAC’s Policy Was Not Arbitrary and Capricious
In its policy statement on attorney fees, OFAC explains that its policy ‘‘is aimed at enhancing the ability of a blocked party that lacks alternative access to funds to acquire legal representation in connection with its designation or the blocking of its property and interests in property.’’ [AR

34. Other private counsel, Fritz Byers and Professor David Cole, have pending fee petitions

to OFAC.

916

647 FEDERAL SUPPLEMENT, 2d SERIES

1704–06]. In its arguments in this court, OFAC states that it caps fees to preserve blocked funds. Preserving blocked funds, according to OFAC, serves such important governmental interests as 1) depriving a sanctioned entity of the benefit of its property and preventing it from using its assets to further ends conflicting with United States interests; 2) preserving blocked funds as a negotiating tool for use by the President in addressing the relevant national emergency; and 3) preserving the blocked assets for legal judgments.
OFAC states that, after the terrorist attacks on 9/11, it ‘‘granted licenses for payment of attorney fees to Holy Land Foundation, Benevolence International Foundation and Global Relief Foundation, all of which were challenging blocking actions taken against them.’’ Those licenses permitted payment of attorney fees from blocked funds. According to OFAC, the three organizations used more than $3 million from the blocked accounts, which ‘‘evoked substantial criticism from various sources, including Congress. Congress enacted the Terrorism Risk Insurance Act of 2002, which authorized victims of terrorism to satisfy judgments by attaching the blocked assets of terrorist organizations and their supporters.’’ [Doc. 73]. This enactment, in OFAC’s view, enhanced the need to preserve assets, once it has blocked them.
[40] Given OFAC’s explanation for its attorney fee policy, I cannot find, under the arbitrary and capricious standard of review, that adoption of OFAC’s policy was arbitrary or capricious, or that the policy is arbitrary and capricious on its face. Limiting of the amount of attorney fees paid with blocked funds ‘‘is rationally re-

lated to the advancement of legitimate governmental interests.’’ Beobanka, supra, 1997 WL 23182, *2; see also Al Haramain, supra, 585 F.Supp.2d at 1271–72. I may not substitute my judgment for that of the agency or order the agency to adopt a more generous policy.
(ii) OFAC Applied its Policy to KindHearts Arbitrarily and Capriciously
[41] I find, however, that OFAC’s application of its policy to KindHearts in this case has been arbitrary and capricious. This is so because: 1) OFAC has provided no sufficient statement of reasons for authorizing payment of $27,040, rather than the full and still rather modest, amount requested, or some amount in between; 2) OFAC has not addressed the effect on the generation of attorneys’ fees of certain special circumstances in this case, such as its delay in responding to communications on behalf of KindHearts, and its general unresponsiveness, in any event, to the requests in those communications, and the complexity of nearly all the manifold issues; and 3) there is a disconnect between the facts underlying the request for access to blocked funds for attorneys’ fees and the purposes, as described by OFAC, underlying its June, 2008, attorney fee policy.
OFAC gives no satisfactory reasons for its authorization of $27,040. It may be that it applied the EAJA/CJA cap of $7,000 per attorney for two attorneys for proceedings first before the agency and then before this court. But the amount authorized is $960 less than the caps. OFAC does not explain how it arrived at the amount of $27,040, rather than authorizing the ‘‘full’’ award of $28,000.35

35. In its license, OFAC merely states that it calculated the amount ‘‘with reference to OFAC’s published policy entitled ‘Guidance on the Release of Limited Amounts of Blocked Funds for Payment of Legal Fees and Costs

Incurred in Challenging the Blocking of U.S. Persons in Administrative or Civil Proceedings’ (available at http://www.treas.gov/ offices/enforcement/ofac/licensing/guidance/ legal fee guide.pdf).’’ [Doc. 74, Att. 2].

KINDHEARTS v. GEITHNER
Cite as 647 F.Supp.2d 857 (N.D.Ohio 2009)

917

More importantly, there is nothing in the record to indicate that OFAC took into account any of the circumstances that would justify awarding the full amount requested—$46,000—to counsel. As already noted, that is, in absolute and relative terms, a modest amount given the work that counsel appears to have done both before the agency and in this court.36 Three years had passed before counsel received a nickel. There is no reason to doubt that the amount requested was for services actually performed.
Most of the delay, as noted, resulted from OFAC’s failure to respond to repeated inquires and requests by KindHearts’ counsel. Not compensating counsel for work done as a result of OFAC-caused delay is an abuse of OFAC’s discretion,

and supports a finding of arbitrary agency action.37
The issues raised in this case have been and remain complex.38 The amount of the award suggests quite strongly that OFAC failed to take the complexities into account when it decided to approve $27,040, rather than the $46,000 requested.
There is, moreover, a disconnect between OFAC’s response to the fee requests in this case and the legitimate governmental interests it states its policy furthers. No apparent, much less manifest risk of dissipation of the corpus would or could result from granting the requested amount. According to my understanding, the government has approximately $1 million of KindHearts’ funds. Allocation of about five percent of the sequestered assets for attorney fees would

36. Bernabei & Wachtel provided, as requested by OFAC, an ‘‘Itemized statement of the hourly rate and number of hours billed per attorney for legal services directly related to the request for administrative reconsideration of the blocking and proposed designation, and the legal challenge thereto’’ [June 2006–December 2008] and an ‘‘Itemized statement and description of costs incurred in seeking administrative reconsideration or judicial review of the blocking and proposed designation, divided by each phase of the case’’ [June 2006–December 2008]. OFAC should have explained what it found wanting when it decided not to grant the petition in full.
37. One aspect of the delay is particularly remarkable, and, perhaps, emblematic. Once OFAC agreed in August, 2007, to conduct a declassification review, KindHearts heard no updates or information regarding the review until November, 2008, after KindHearts filed this suit. OFAC agreed to complete such review within thirty days of a telephone conference which took place shortly after OFAC filed this suit. OFAC states it received the declassified documents back from the originating agencies shortly before this lawsuit was filed and that it reviewed them for accuracy, incorporated them into the administrative record, and produced them to KindHearts. OFAC’s failure to inform KindHearts of the status of the declassification process,

and sudden readiness to provide the documents after KindHearts filed suit, contributed to the delay in this case and supports the finding that it acted arbitrarily and capriciously with regard to the attorney fee requests.
38. Though looking to the EAJA and CJA as templates for OFAC’s June, 2008, policy was not arbitrary and capricious, the fit is far from exact and tight, especially with regard to the CJA. Relatively few federal criminal cases involve complexities similar to those present in these proceedings. When they do, approval of petitions for excess compensation is routine. Under both the CJA and EAJA, moreover, a judge—not one’s adversary—determines the amount of compensation, whether within or above the cap. Indeed, under the CJA, both the District Judge and a Circuit Judge must independently approve any request for excess compensation. Under the OFAC policy, it, rather than a judicial officer, decides how much of the blocked funds to release to counsel. While there does not appear to be anything inherently unlawful about this structure, it can, if not implemented in good faith, impartially and fairly, result in the kind of arbitrary and capricious ‘‘award’’ made here.

918

647 FEDERAL SUPPLEMENT, 2d SERIES

hardly endanger the integrity of the balance of those assets or the government’s ability permanently to retain them when and if it became entitled to do so.
Preserving the funds to pay possible future judgments against KindHearts is a worthy goal—provided there is some likelihood of claims being asserted, verdicts being entered and judgments being enforced. There is nothing to indicate whether OFAC took such likelihood, or lack thereof, into account in reaching its decision to award $27,040, rather than the requested $46,000.
Preserving the funds for use by the President as a negotiating tool does not seem at all likely in this case. These funds belong to an American corporation, not a foreign government, or even a foreign private entity with influence over relations with the United States.
Even if a risk exists that funds will be needed for either of these purposes, that risk should be weighed against the risk that private counsel will no longer be able or agree to represent KindHearts. As a corporation, KindHearts cannot represent itself. To gain access to the courts to contest OFAC’s actions and allegations KindHearts can only appear through counsel. Denying a corporation access to counsel is tantamount to depriving it of the right to defend itself. American Airways Charters, Inc., supra, 746 F.2d at 873, n. 14.
Finally, paying counsel for putting OFAC to the test of the Constitution and laws of the United States hardly harms United States interests. Indeed, it furthers them, regardless of the outcome of that test. To the extent OFAC fails the test, it can and no doubt will correct its procedures. Doing so will improve its operations, while eliminating the distraction of further litigation. To the extent that OFAC passes the test, it can continue operating as it has, with the constitutional-

ity of its operations having received a judicial imprimatur.
In light of the foregoing, I conclude that OFAC’s handling thus far of KindHearts’ request for access to blocked assets to compensate counsel has been arbitrary and capricious. From all that appears in the record, OFAC’s decision was reached mechanistically, and without individualized consideration of the facts and circumstances of this case. If the basis for OFAC’s decision was otherwise, it has not said so.
Conclusion
For the foregoing reasons, it is
ORDERED THAT:
1. Secretary of the Treasury Timothy Geithner and Attorney General Eric H. Holder are hereby substituted as defendants for former Secretary of the Treasury Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively.
2. Defendant’s motion to dismiss [Doc. 36] be and hereby is granted with regard to plaintiff’s claims that:
A. The Fourth Amendment precludes final designation of plaintiff as a Specially Designated Global Terrorist, without prejudice;
B. OFAC’s authority is void for vagueness;
C. OFAC’s block pending investigation of plaintiff’s assets contravened due process of law on its face;
D. As applied, OFAC’s provisional designation of KindHearts as a Specially Designated Global Terrorist contravened due process, without prejudice;
E. OFAC’s impairment of plaintiff’s investigation violated due process;
F. OFAC’s restriction of access to blocked funds to compensate counsel,

LONGS v. FORD MOTOR CO.
Cite as 647 F.Supp.2d 919 (W.D.Tenn. 2009)

919

and otherwise be and hereby is denied.

Jeffrey LONGS, Plaintiff,

Defendant’s motion to dismiss is otherwise denied.
3. Plaintiff’s motion for partial summary judgment [Doc. 31] be and hereby is granted with regard to its claims:
A. That OFAC violated the Fourth Amendment claim when it seized plaintiff’s assets without probable cause and prior judicial review and issuance of a warrant for such seizure;
B. OFAC’s failure to provide notice, and an opportunity to be heard, and its restrictions on plaintiff’s access to its documents; and
C. OFAC’s limitation on the extent to which plaintiffs’ blocked funds are available to it to compensate its counsel was arbitrary and capricious and violated the Administrative Procedure Act.
Plaintiff’s motion for summary judgment is otherwise denied.
4. A status/scheduling conference is set for September 21, 2009 at 3:30 p.m.; not later than one week before the conference the parties shall submit an agreed or separate status report[s] specifying issues needing further consideration and suggesting a timetable for adjudication or other disposition of such issues.
So ordered.
,

v.
FORD MOTOR COMPANY, Defendant.
Case No. 2:07–cv–02653–JPM–cgc.
United States District Court, W.D. Tennessee, Western Division.
Aug. 10, 2009.
Background: Terminated employee brought claims against his former employer alleging discrimination in form of disparate treatment on basis of race, discrimination in form of policies with disparate impact on older African-American employees, and retaliation in violation of Title VII and Age Discrimination in Employment Act (ADEA). Employer moved for summary judgment.
Holdings: The District Court, Jon P. McCalla, Chief Judge, held that:
(1) employee failed to establish prima facie case of race discrimination based on disparate impact;
(2) employee’s memorandum and formal Equal Employment Opportunity Commission (EEOC) charge were activities protected by Title VII and ADEA;
(3) genuine issue of material fact precluded summary judgment as to whether employer knew employee filed formal charge with EEOC, as part of employee’s prima facie retaliation case; and
(4) employee sufficiently established his protected activities were cause of his termination, as part of his prima facie case of retaliation.
Motion granted in part and denied in part.

1. Civil Rights O1118, 1201 Under the McDonnell Douglas frame-
work using circumstantial evidence to sup-

 
 Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 1 of 18
Armstrong,Cat03,Termed
U.S. District Court Northern District of Ohio (Toledo) CIVIL DOCKET FOR CASE #: 3:08−cv−02400−JGC

Kindhearts For Charitable Humanitarian Development, Inc. vs. Paulsen. et al Assigned to: Judge James G. Carr Cause: 28:2201 Declaratory Judgment
Plaintiff

Date Filed: 10/09/2008 Date Terminated: 07/17/2014 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Defendant

Kindhearts For Charitable Humanitarian Development, Inc.

represented by Fritz Byers 824 Spitzer Bldg. 520 Madison Avenue Toledo, OH 43604 419−241−8013 Fax: 419−241−4215 Email: fritz@fritzbyers.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Alan R. Kabat Bernabei & Wachtel 1775 T Street, NW Washington, DC 20009 202−745−1942 Fax: 202−745−2627 Email: kabat@bernabeipllc.com ATTORNEY TO BE NOTICED

Alexander A. Abdo American Civil Liberties Union Foundation 18th Floor 125 Broad Street New York, NY 10004 212−549−2517 Fax: 549−2654 ATTORNEY TO BE NOTICED

Benjamin E. Wizner American Civil Liberties Union Foundation 18th Floor 125 Broad Street New York, NY 10004 212−519−7860 Fax: 549−2654

Carrie L. Davis American Civil Liberties Union of Ohio 4506 Chester Avenue Cleveland, OH 44103 216−472−2200 Fax: 216−472−2210 Email: cdavis@acluohio.org ATTORNEY TO BE NOTICED

David D. Cole Georgetown University Law Center 600 New Jersey Avenue, NW Washington, DC 20001

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 2 of 18
202−662−9078 ATTORNEY TO BE NOTICED
Hina Shamsi American Civil Liberties Union Foundation 18th Floor 125 Broad Street New York, NY 10004 212−992−8860 Email: hshamsi@aclu.org ATTORNEY TO BE NOTICED
Jeffrey M. Gamso Office of the Ohio Public Defender − Cleveland Cuyahoga County Ste. 200 310 Lakeside Avenue Cleveland, OH 44113 216−443−3669 Fax: 216−443−6911 Email: jeff.gamso@gmail.com ATTORNEY TO BE NOTICED
Lynne Bernabei Berabei & Wachtel 1775 T Street, NW Washington, DC 20009 202−745−1942 Fax: 202−745−2627 Email: lbernabei@aol.com ATTORNEY TO BE NOTICED

V.
Defendant
Henry M. Paulson in his official capacity as the Secretary of the Treasury TERMINATED: 08/18/2009

represented by Amy E. Powell U.S. Department of Justice − Federal Programs − 20 Massachu 20 Massachusetts Avenue, NW Washington, DC 20001 202−514−9836 Fax: 202−616−8202 Email: amy.powell@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Jonathan E. Zimmerman INVALID ADDRESS − U.S. Department of Justice 20 Massachusetts Avenue, NW Washington, DC 20001 202−353−0441 Fax: 202−616−8202 Email: jonathan.zimmerman@usdoj.gov (Inactive) ATTORNEY TO BE NOTICED
Stephen J. Buckingham U.S. Department of Justice − Civil Division Federal Program 20 Massachusetts Avenue, NW Washington, DC 20001

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 3 of 18

202−514−3330 Fax: 202−616−8470 Email: stephen.buckingham@usdoj.gov ATTORNEY TO BE NOTICED

Defendant
Adam J. Szubin in his official capacity as the Director of the Office of Foreign Assets Control

represented by Amy E. Powell (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jonathan E. Zimmerman (See above for address) ATTORNEY TO BE NOTICED

Stephen J. Buckingham (See above for address) ATTORNEY TO BE NOTICED

Defendant
Michael B. Mukasey in his official capacity as Attorney General of the United States TERMINATED: 08/18/2009

represented by Amy E. Powell (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Jonathan E. Zimmerman (See above for address) ATTORNEY TO BE NOTICED

Stephen J. Buckingham (See above for address) ATTORNEY TO BE NOTICED

Defendant
Timothy Geithner in his official capacity as Secretary of the Treasury

represented by Amy E. Powell U.S. Department of Justice − Civ. Division, Federal Programs 20 Massachusetts Avenue, NW Washington, DC 20001 202−514−9836 Fax: 202−616−8202 Email: amy.powell@usdoj.gov ATTORNEY TO BE NOTICED

Jonathan E. Zimmerman (See above for address) ATTORNEY TO BE NOTICED

Stephen J. Buckingham (See above for address) ATTORNEY TO BE NOTICED

Defendant
Eric H. Holder, Jr. in his official capacity as Attorney General of the United States

represented by Amy E. Powell (See above for address) ATTORNEY TO BE NOTICED

Jonathan E. Zimmerman (See above for address) ATTORNEY TO BE NOTICED

Stephen J. Buckingham

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 4 of 18

(See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Grantmakers Without Borders

represented by Daniel J. Maloney Maloney, McHugh & Kolodgy, Ltd. 20 North St. Clair Street Toledo, OH 43604 419−241−5175 Fax: 419−725−2075 Email: dmaloney@mmklaw.net LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan University of Texas School of Law National Security Clinic 727 East Dean Keeton Street Austin, TX 78705 512−232−7222 Fax: 512−232−0800 ATTORNEY TO BE NOTICED

Amicus Curiae OMB Watch

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Kay Guinane

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae
American−Arab Anti−Discrimination Committee

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Appleton Foundation

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 5 of 18

ATTORNEY TO BE NOTICED

Amicus Curiae Bill of Rights Defense Committee

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Defending Dissent Foundation

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Fund for Nonviolence

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Grassroots International

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Kinder USA

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Amicus Curiae Muslim Advocates

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 6 of 18

Amicus Curiae Muslim Public Affairs Council

represented by Daniel J. Maloney (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Ranjana Natarajan (See above for address) ATTORNEY TO BE NOTICED

Date Filed 10/09/2008
10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008 10/09/2008
10/14/2008 10/15/2008

# Docket Text
1 Complaint against Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Filing fee $ 350, receipt number 34660003298, filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Civil Cover Sheet) (C,D) (Entered: 10/09/2008)
2 Motion for temporary restraining order and preliminary injunction filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Certificate of Counsel, # 2 Proposed Order)(C,D) (Entered: 10/09/2008)
3 Memorandum of points and authorities In Support of 2 Motion for temporary restraining order and preliminary injunction filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
4 Motion for order to enlarge page limit filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
5 Declaration of Alan R. Kabat filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
6 Declaration of John W. Boyd filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
7 Declaration of Ellen Yaroshefsky filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
8 Declaration of Jihad M.Smaili (Complete file held in clerks office for viewing) filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) (Entered: 10/09/2008)
9 Declaration of Lynne Bernabei (2 Volumes) (Complete file available in Clerk's office) filed by Kindhearts For Charitable Humanitarian Development, Inc.. (C,D) Modified on 10/9/2008 (G,D). (Entered: 10/09/2008)
10 Motion for attorney David Cole to Appear Pro Hac Vice. Filing fee $ 100, receipt number 34660003300, filed byFritz Byers. (C,D) (Entered: 10/09/2008)
11 Motion for attorney Hina Shamsi to Appear Pro Hac Vice. Filing fee $ 100, receipt number 34660003299.Filed by Fritz Byers (C,D) (Entered: 10/09/2008)
12 Order granting plaintiff's Motion for Temporary Restraining Order. (see order for full details). (Related Doc # 2 ). Judge James G. Carr on 10/9/2008.(S,AL) (Entered: 10/09/2008)
Minutes of proceedings [Non Document] before Judge James G. Carr.Motion Hearing held on 10/9/2008 re Motion for temporary restraining order. Motion granted. Pretrial Conference set for 10/16/2008 at 09:00 AM in Chambers 210 before Judge James G. Carr. (Court Reporter Angela Nixon.)Related document(s) 2 (S,AL) (Entered: 10/09/2008)
13 Joint Motion to continue conference filed by Henry M. Paulson, Adam J. Szubin and Michael B. Mukasey. (Powell, Amy) Modified on 10/15/2008 (document unsigned, filer notified) (B,TM). (Entered: 10/14/2008)
14 Marginal Entry Order: Motion to continue the 10/16/2008 scheduling conference is granted. Telephone status conference is scheduled 10/20/2008 at noon. Parties are to

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 7 of 18

10/17/2008
10/17/2008
10/17/2008 10/20/2008 10/20/2008 10/20/2008 10/24/2008 10/24/2008 10/29/2008
10/29/2008
10/30/2008
10/30/2008
11/04/2008 11/20/2008 11/20/2008 11/20/2008

call into the court's bridge line at (419)213−5510. Access code is 551011. Signed by Judge James G. Carr on 10/15/2008. (Related Doc # 13 ). (S,JM) (Entered: 10/15/2008)
15 Marginal Entry Order granting plaintiff's Motion for order to enlarge page limit for memorandum in support of motion for temporary restraining order and preliminary injunction. (Related Docs # 3 4 ). Signed by Judge James G. Carr on 10/17/2008.(S,JM) (Entered: 10/17/2008)
16 Marginal Entry Order granting Motion for attorney David D. Cole to appear pro hac vice for plaintiff Kindhearts For Charitable Humanitarian Development, Inc. (Related Doc # 10 ). Signed by Judge James G. Carr on 10/17/2008.(S,JM) (Entered: 10/17/2008)
17 Marginal Entry Order granting Motion for attorney Hina Shamsi to appear pro hac vice for Kindhearts For Charitable Humanitarian Development, Inc. (Related Doc # 11 ). Signed by Judge James G. Carr on 10/17/2008.(S,JM) (Entered: 10/17/2008)
18 Attorney Appearance by Amy E. Powell filed by on behalf of all defendants. (Powell, Amy) (Entered: 10/20/2008)
19 Joint Motion for extension of motion deadlines and to set a briefing schedule filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) (Entered: 10/20/2008)
20 Unopposed Motion to vacate Temporary Restraining Order and Preliminary Injunction filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Related document(s) 12 . (Powell, Amy) (Entered: 10/20/2008)
21 Marginal Entry Order : plaintiff's motion for summary judgment is due 11/21/08; defendants' opposition/cross motion due 12/12/08; reply/opposition due 1/7/09; reply due 1/26/09. 19 . Judge James G. Carr on 10/24/2008.(S,AL) (Entered: 10/24/2008)
22 Marginal Entry Order granting the unopposed Motion to vacate the temporary restraining order and preliminary injuction. (Related Doc # 20 ). Judge James G. Carr on 10/24/2008.(S,AL) (Entered: 10/24/2008)
23 Motion for attorney Lynne Bernebei to Appear Pro Hac Vice. Filing fee $100.00, receipt number 06470000000003269808, filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 10/29/2008 (document unsigned, filer notified) (B,TM). (Entered: 10/29/2008)
24 Motion for attorney Alan Kabat to Appear Pro Hac Vice. Filing fee $100.00, receipt number 06470000000003269825, filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 10/29/2008 (document unsigned, filer notified) (B,TM). (Entered: 10/29/2008)
25 Marginal Entry Order granting Motion for attorney Lynne Bernabei to appear pro hac vice for plaintiff Kindhearts For Charitable Humanitarian Development, Inc. (Related Doc # 23 ). Signed by Judge James G. Carr on 10/30/2008.(S,JM) (Entered: 10/30/2008)
26 Marginal Entry Order granting Motion for attorney Alan R. Kabat to appear pro hac vice for plaintiff Kindhearts For Charitable Humanitarian Development, Inc. (Related Doc # 24 ). Signed by Judge James G. Carr on 10/30/2008.(S,JM) (Entered: 10/30/2008)
27 Notice of Filing of OFAC Licenses filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Exhibit)(Kabat, Alan) (Entered: 11/04/2008)
28 Notice of Intent to Use Foreign Intelligence Surveillance Act Information filed by all defendants. (Powell, Amy) (Entered: 11/20/2008)
29 Motion for Order to Enlarge Page Limit filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 11/20/2008)
30 Marginal Entry Order granting Motion to enlarge page limit for Plaintiff's memorandum in support of its motion for partial summaryjudgment. (Related Doc # 29 ). Signed by Judge James G. Carr on 11/20/2008.(S,JM) (Entered: 11/20/2008)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 8 of 18

11/21/2008 11/21/2008
11/21/2008 11/21/2008 12/12/2008 12/12/2008
12/12/2008 12/12/2008 12/13/2008 12/15/2008 12/15/2008 12/15/2008 12/15/2008 12/15/2008 12/18/2008 12/22/2008

31 Motion for partial summary judgment filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Shamsi, Hina) (Entered: 11/21/2008)
32 Memorandum in support of motion for partial summary judgment filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. Related document(s) 31 . (Attachments: # 1 Affidavit Declaration of Lynne Bernabei, # 2 Affidavit Declaration of Jihad Smaili, # 3 Affidavit Declaration of Fritz Byers, # 4 Affidavit Declaration of Alan Kabat, # 5 Affidavit Declaration of John Boyd, # 6 Affidavit Declaration of Ellen Yaroshefsky) (Shamsi, Hina) Modified on 11/25/2008 (B,TM). (Entered: 11/21/2008)
33 Exhibit V Volume 1 of 2 (224 pages) to the Declaration of Lynne Bernabei in support of Motion for Partial Summary Judgment filed by Kindhearts For Charitable Humanitarian Development, Inc. (Complete document on file) Related document(s) 31 (C,D) (Entered: 11/24/2008)
34 Exhibit V Volume 2 of 2 (309 pages) to the Declaration of Lynne Bernabei in support of Motion for Partial Summary Judgment (Complete document on file)filed by Kindhearts For Charitable Humanitarian Development, Inc. Related document(s) 31 . (C,D) (Entered: 11/24/2008)
35 Unopposed Motion for Expansion of Page Limitations filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Attachments: # 1 Proposed Order)(Powell, Amy) (Entered: 12/12/2008)
36 Motion to dismiss or in the alternative, Motion for summary judgment and Opposition to plaintiff's Partial Motion for Summary Judgment filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Related document(s) 1 . (Attachments: # 1 Exhibit A − Declaration of Adam Szubin, # 2 Exhibit B − GRF Slip Op, # 3 Exhibit C − Holy Land Slip Op, # 4 Proposed Order, # 5 Certificate of Service)(Powell, Amy) Modified on 12/18/2008 (B,TM). (Entered: 12/12/2008)
37 Notice of Manual Filing of Administrative Record filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) (Entered: 12/12/2008)
38 DUPLICATE OF 36 Opposition to 31 Motion for partial summary judgment filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) Modified on 12/18/2008 (B,TM). (Entered: 12/13/2008)
39 Notice of Lodging Ex Parte, In Camera Materials filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) (Entered: 12/13/2008)
40 Administrative Record (Vol. 1 of 5) − Blocking Notice & BPI Exhibits 1 − 57 filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Complete document on file in Clerk's Office. (G,D) (Entered: 12/15/2008)
41 Administrative Record (Vol. 2 of 5) − BPI Exhibits 58 − 92 & Correspondence filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Complete document on file in Clerk's Office. (G,D) (Entered: 12/15/2008)
42 Administrative Record (Vol. 3 of 5) − PDM Exhibits 1 − 60 filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Complete document on file in Clerk's Office (G,D) (Entered: 12/15/2008)
43 Administrative Record (Vol. 4 of 5) − PDM Exhibits 61 − 104 filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Complete document on file in Clerk's Office (G,D) (Entered: 12/15/2008)
44 Administrative Record (Vol. 5 of 5) − PDM Exhibits 105 − 114 & Correspondence filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. Complete document on file in Clerk's Office. (G,D) (Entered: 12/15/2008)
45 Reply (classified) in support of defendants' motion to dismiss, or in the alternative, for summary judgment and opposition to plaintiff's motion for partial summary judgment filed by all defendants. 31 36 (S,AL) (Entered: 12/18/2008)
46 Order granting Motion by Defendants Paulson, Szubin and Mukasey to file its Memorandum in Support of Defendants' Motion to Dismiss or in the Alternative for Summary Judgment and in Opposition to Plaintiff's Motion for Partial Summary Judgment not to exceed eighty (80) pages in length. (Related Doc # 35 ). Signed by

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 9 of 18

12/30/2008 01/05/2009
01/15/2009 01/20/2009
01/30/2009 01/30/2009 01/31/2009
02/02/2009 02/02/2009 02/02/2009 02/02/2009 02/06/2009 02/06/2009 02/06/2009 02/12/2009 02/20/2009

Judge James G. Carr on 12/22/2008.(S,JM) (Entered: 12/22/2008)
47 Unopposed Motion for extension of Parties' Opposition/Reply Briefs until Jan. 16, 2009/February 6, 2009 filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 12/30/2008)
48 Marginal Entry Order granting 47 plaintiff's motion for extention of deadlines. Plaintiff's reply in support of its motion for summary judgment and opposition to defendants' motion for summary judgment is due 1/16/2009; Defendants' reply in support of its motion for summary judgment is due 2/6/2009. Signed by Judge James G. Carr on 1/5/2009.(S,JM) (Entered: 01/05/2009)
49 Unopposed Motion to Modify Briefing Schedule filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 1/20/2009 (B,TM). (Entered: 01/15/2009)
50 Marginal Entry Order granting 49 plaintiff's Motion to Modify Briefing Schedule. Plaintiffs reply in support of its motion for summary judgment and opposition to defendants' motion for summary judgment are due 2/2/2009. Defendants' reply in support of their motion for summary judgment is due 2/27/2009. Signed by Judge James G. Carr on 1/20/2009.(S,JM) (Entered: 01/20/2009)
Notice of Hearing [Non Document]: Pretrial/Scheduling Conference set for 2/9/2009 at 04:30 PM in Chambers 210 before Judge James G. Carr. Prior to said conference the parties shall file status reports/agendas on February 6, 2009. (S,AL) (Entered: 01/30/2009)
51 Notice of Manual Filing of Supplement to Administrative Record filed by all defendants. (Powell, Amy) (Entered: 01/30/2009)
52 Unopposed Motion for Order to Enlarge Page Limit for Reply Memorandum in support of Motion for Partial Summary Judgment and in Opposition to defendants Motion for Summary Judgment filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 2/3/2009 (B,TM). (Entered: 01/31/2009)
53 Reply to response to 31 Motion for partial summary judgment, 36 Motion to dismiss or in the alternative Motion for summary judgment filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Second Declaration of Alan Kabat)(Shamsi, Hina) (Entered: 02/02/2009)
54 Supplement to Administrative Record (KH1 − 675) filed by all defendants. Complete document on file in Clerk's Office (G,D) (Entered: 02/03/2009)
55 Supplement to Administrative Record (KH676 − 1369) filed by all defendants. Complete document on file in Clerk's Office (G,D) (Entered: 02/03/2009)
56 Certification of Supplement to Administrative Record filed by all defendants. Complete document on file in Clerk's Office. (59 pgs) Related document(s) 54 , 55 .(G,D) (Entered: 02/03/2009)
57 Marginal Entry Order granting Motion to enlarge page limit for plaintiff's reply memorandum in support of its motion for summary judgment and in opposition to the defendants' motion for summary judgment. (Related Documents 52 53 ). Signed by Judge James G. Carr on 2/6/2009.(S,JM) (Entered: 02/06/2009)
58 Status Report filed by all defendants. (Powell, Amy) (Entered: 02/06/2009)
59 Status Report filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 02/06/2009)
60 Order: Status Conference was held on 2/9/2009 before Judge James G. Carr. Oral arguments on pending motions are scheduled 3/24/2009 at 8:30 a.m., in Chambers 210 before Judge James G. Carr. Signed by Judge James G. Carr on 2/12/2009. (Court reporter: Cynthia Lee.) (Time: 20 min.) (S,JM) (Entered: 02/12/2009)
61 Unopposed Motion for extension of Reply Memorandum in Support of Motion for Summary Judgment until March 6, 2009 filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) Modified on 2/23/2009 (document unsigned, filer

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 10 of 18

02/26/2009 02/27/2009 02/27/2009 02/27/2009 02/27/2009 02/27/2009 02/27/2009 02/27/2009 03/03/2009
03/05/2009 03/06/2009

notified) (B,TM). (Entered: 02/20/2009)
62 Marginal Entry Order granting 61 the defendant's Motion for an extension of time until 3/6/09 to file their reply brief. Judge James G. Carr on 2/26/2009.(S,AL) (Entered: 02/26/2009)
63 Motion for attorney Ranjana Natarajan to Appear Pro Hac Vice. Filing fee paid of $100.00, receipt number 06470000000003442247, filed by Amicus Curiae parties. (Maloney, Daniel) Modified on 3/3/2009 (B,TM). (Entered: 02/27/2009)
64 Affidavit/Declaration of Ranjana Natarajan filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Maloney, Daniel) Modified on 3/3/2009 (signature of Ranjana Natarajan) (B,TM). (Entered: 02/27/2009)
65 Motion for Leave to File Proposed Brief Amicus Curiae filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Maloney, Daniel) Modified on 3/3/2009 (B,TM). (Entered: 02/27/2009)
66 Affidavit/Declaration in Support of Motion For Leave to File Proposed Brief Amicus Curiae filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Attachments: # 1 Brief of Amici Curiae)(Maloney, Daniel) (Entered: 02/27/2009)
67 Proposed Order in support of 65 Motion for Leave to File Proposed Brief Amicus Curiae filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Maloney, Daniel) Modified on 3/3/2009 (B,TM). (Entered: 02/27/2009)
68 Memorandum In Support of 65 Motion for Leave to File Proposed Brief Amicus Curiae filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Maloney, Daniel) Modified on 3/3/2009 (B,TM). (Entered: 02/27/2009)
69 Corporate Disclosure Statement filed by Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates, Muslim Public Affairs Council. (Maloney, Daniel) Modified on 3/3/2009 (B,TM). (Entered: 02/27/2009)
70 Marginal Entry Order granting Motion for attorney Ranjana Natarajan to appear pro hac vice for Amicus Curiae parties Grantmakers Without Borders, OMB Watch, Kay Guinane, American−Arab Anti−Discrimination Committee, Appleton Foundation, Bill of Rights Defense Committee, Defending Dissent Foundation, Fund for Nonviolence, Grassroots International, Kinder USA, Muslim Advocates and Muslim Public Affairs Council. Signed by Judge James G. Carr on 3/3/2009. (Related Doc # 63 )(S,JM) (Entered: 03/03/2009)
71 Order granting Motion for leave to file an amicus curiae. (Related Doc # 65 ). Judge James G. Carr on 3/5/2009. (S,AL) Modified on 3/6/2009 (B,TM). (Entered: 03/05/2009)
72 Unopposed Motion for expansion of page limits to the Reply Memorandum in support of Motion to Dismiss or in the alternative Summary Judgment filed by Henry M. Paulson, Adam J. Szubin, Michael B. Mukasey. (Powell, Amy) Modified on 3/10/2009

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 11 of 18

03/06/2009 03/06/2009
03/06/2009 03/12/2009 03/13/2009 03/17/2009 03/18/2009 03/18/2009 03/25/2009
04/30/2009 04/30/2009
05/01/2009 05/07/2009 06/26/2009 07/07/2009

(B,TM). (Entered: 03/06/2009)
73 Reply to response to 36 Motion to dismiss or in the alternative Motion for summary judgment filed by all defendants. (Attachments: # 1 Exhibit 1 − Supplemental Declaration of Adam Szubin)(Powell, Amy) (Entered: 03/06/2009)
74 Notice of Filing Second Supplement to Public Administrative Record filed by all defendants. (Attachments: # 1 Certification of Second Supplement by William Schisa, # 2 Second Supplement to Public Administrative Record)(Powell, Amy) (Entered: 03/06/2009)
75 Response to 65 Motion for leave to file Brief of Amici Curiae filed by all defendants. (Powell, Amy) Modified on 3/10/2009 (B,TM). (Entered: 03/06/2009)
76 Marginal Entry Order granting defendants' Motion for order to exceed the page limitation. (Related Doc # 72 ). Judge James G. Carr on 3/12/2009.(S,AL) (Entered: 03/12/2009)
77 Notice of Filing Third Supplement to Public Administrative Record filed by all defendants. (Attachments: # 1 Third Supplement to Public Administrative Record)(Powell, Amy) (Entered: 03/13/2009)
Notice of Hearing [Non Document]: Telephone Conference set for 3/24/2009 09:30 AM in to be held before Judge James G. Carr. Counsel to call: 419−213−5509, access code 550911. (S,AL) (Entered: 03/17/2009)
78 Statement of Supplemental Issues filed by all defendants. (Attachments: # 1 Certification)(Powell, Amy) Modified on 3/19/2009 (B,TM). (Entered: 03/18/2009)
79 Statement of Supplemental Issues filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 3/19/2009 (B,TM). (Entered: 03/18/2009)
80 Order: Telephone Conference was held on 3/24/2009 before Judge James G. Carr. Oral argument on pending motions for summary judgment are rescheduled for 5/1/2009, at 8:30 a.m. Clerk to note the appearance of John Czarnecki as counsel of Khalid Smali. Signed by Judge James G. Carr on 3/25/2009. (Time: 45 min.) (S,JM) (Entered: 03/25/2009)
81 Questions for counsel re. Oral Argument scheduled for 5/1/09. (S,AL) (Entered: 04/30/2009)
82 Notice Of Filing Of Fourth Supplement To Administrative Record filed by all defendants. (Attachments: # 1 Exhibit Letter to Bernabei from OFAC, # 2 Exhibit Attachments 1−3, # 3 Exhibit Attachments 4−6, # 4 Exhibit Attachments 7−13, # 5 Exhibit Attachments 14−19, # 6 Exhibit License)(Powell, Amy) (Entered: 04/30/2009)
Minutes of proceedings [Non Document] before Judge James G. Carr.Oral Argument held on 5/1/2009. Matter taken under advisement. (Court Reporter: Tracy Spore.)Time: 7.5. (S,AL) (Entered: 05/01/2009)
83 Notice of Filing of OFAC Fee Petitions filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Exhibit 1−2 (OFAC Fee Petitions))Related document(s) 53 , 32 , 31 .(Kabat, Alan) (Entered: 05/07/2009)
84 Notice of Filing of OFAC's Decision on Request for Extension of Time filed by all plaintiffs. (Attachments: # 1 Exhibit)(Kabat, Alan) (Entered: 06/26/2009)
85 Transcript of Oral Argument held on 5/1/09 before Judge James G. Carr. To obtain a bound copy of this transcript please contact court reporter Tracy Spore at 419−392−6626. [274 pages] Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Parties requesting that privacy information be redacted must file a notice of intent to redact with the court by 7/16/2009. Redaction Request due 7/28/2009. Redacted Transcript Deadline set for 8/7/2009. Release of Transcript Restriction set for 10/5/2009. (S,Tr) (Entered: 07/07/2009)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 12 of 18

08/05/2009 08/18/2009
09/14/2009 09/14/2009 09/18/2009 09/21/2009 09/21/2009 09/22/2009 09/22/2009
09/24/2009

86 Notice of Filing of OFAC's Decision on Plaintiff's Fee Petitions filed by Kindhearts For Charitable Humanitarian Development, Inc.. Related document(s) 83 .(Kabat, Alan) (Entered: 08/05/2009)
87 Order : Secretary of the Treasury Timothy Geithner and Attorney General Eric H. Holder are hereby substituted as defendants for former Secretary of the Treasury Henry M. Paulson and former Attorney General Michael B. Mukasey, respectively. Defendant's motion to dismiss [Doc. 36] is granted with regard to plaintiffs claims that: The Fourth Amendment precludes final designation of plaintiff as a Specially Designated Global Terrorist, without prejudice; OFAC's authority is void for vagueness; OFAC's block pending investigation of plaintiff's assets contravened due process of law on its face; As applied, OFACs provisional designation of KindHearts as a Specially Designated Global Terrorist contravened due process, without prejudice; OFAC's impairment of plaintiffs investigation violated due process; OFACs restriction of access to blocked funds to compensate counsel, and otherwise is denied. Defendant's motion to dismiss is otherwise denied. Plaintiff's motion for partial summary judgment is granted with regard to its claims: that OFAC violated the Fourth Amendment claim when it seized plaintiffs assets without probable cause and prior judicial review and issuance of a warrant for such seizure; OFAC's failure to provide notice, and an opportunity to be heard, and its restrictions on plaintiff's access to its documents; OFAC's limitation on the extent to which plaintiffs' blocked funds are available to it to compensate its counsel was arbitrary and capricious and violated the Administrative Procedure Act.Plaintiffs motion for summary judgment is otherwise denied. A status/scheduling conference is set for September 21, 2009 at 3:30 p.m.; not later than one week before the conference the parties shall submit an agreed or separate status report[s] specifying issues needing further consideration and suggesting a timetable for adjudication or other disposition of such issues. (Related Doc # 36 ) (Related Doc # 31 ). Judge James G. Carr on 8/18/2009.(S,AL) (Entered: 08/18/2009)
88 Status Report of Plaintiffs in Response to Court's Order of August 18, 2009 filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 09/14/2009)
89 Status Report filed by defendants, Geithner, Szubin and Holder. (Powell, Amy) Modified on 10/27/2009 (B,TM). (Entered: 09/14/2009)
90 Notice denying request for extension of deadline to provisional designation determination filed by defendants. (Attachments: # 1 Attachment A)(Zimmerman, Jonathan) Modified on 9/21/2009 (B,TM). (Entered: 09/18/2009)
91 Motion for temporary restraining order and/or for interim relief filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Affidavit Wizner Declaration)(Kabat, Alan) (Entered: 09/21/2009)
Notice [non−document]. Counsel are to call into the Court's bridge line for the telephone conference this afternoon at 3:30 p.m.(EST.) The call−in number is 419−213−5509 (passcode is 550911). (S,JM) (Entered: 09/21/2009)
92 Joint Motion to continue dates for briefing of Plaintiff's motion for interim relief and hearing filed by defendants. (Powell, Amy) Modified on 10/27/2009 (B,TM). (Entered: 09/22/2009)
93 Order: Status/scheduling conference was held 9/21/2009 before Judge James G. Carr. Plaintiff's post−opinion brief is due 10/30/2009; defendants' post−hearing brief is due 12/15/2009; plaintiff's post−hearing reply is due 1/20/2010; defendants' sur−reply is due 2/1/2010. Defendants' response to plaintiff's motion for temporary restraining order is due 9/24/2009; plaintiff's reply is due 9/27/2009. Status/scheduling telephone conference re. plaintiff's motion for temporary restraining order is scheduled 9/28/2009, at 9:30 a.m. Counsel are to call into the court bridge line at 419−213−5509 (passcode is 550911). Signed by Judge James G. Carr on 9/22/2009. (Time: 1 hr.) (S,JM) (Entered: 09/22/2009)
94 Marginal Entry Order granting the parties joint motion to continue. Defendants' brief in opposition to interim relief is due 10/2/09; reply due 10/9/09, with a status conference set for 10/13/09 at 10:00 a. m. (Related Doc # 92 ). Judge James G. Carr on 9/24/2009.(S,AL) (Entered: 09/24/2009)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 13 of 18

10/02/2009 10/02/2009 10/09/2009 10/13/2009 10/14/2009
10/14/2009 10/14/2009 10/15/2009 10/15/2009 10/16/2009 10/19/2009
10/19/2009 10/20/2009 10/26/2009
10/30/2009

95 Unopposed Motion for leave to file Opposition to Motion for Interim Relief and or Temporary Restraining Order in excess of pages filed by defendants. (Powell, Amy) Modified on 10/27/2009 (B,TM). (Entered: 10/02/2009)
96 Opposition to 91 Motion for temporary restraining order and/or for interim relief filed by defendants. (Attachments: # 1 Exhibit A − Aero Continente, S.A. v. Newcomb, Slip Op.)(Powell, Amy) Modified on 10/27/2009 (B,TM). (Entered: 10/02/2009)
97 Reply to response 96 to Motion for temporary restraining order and/or for interim relief 91 filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Kabat, Alan) Modified on 10/13/2009 (C,D). (Entered: 10/09/2009)
Notice [non−document]: Counsel are to call into the court's bridge line at 419−213−5509 (passcode 550911) for telephone status conference scheduled 10/13/2009 at 10:00 a.m. (S,JM) (Entered: 10/13/2009)
98 Order: Status/scheduling telephone conference was held on 10/13/2009 with Judge James G. Carr. Clerk to note appearance on behalf of plaintiff of Ben Wizner, Esq. and Alexander Abdo, Esq., with leave being granted to Attorney Abdo to appear pro hac vice. Telephonic argument on pending motion for stay set for 10/15/2009, at 9:00 a.m. before Judge Carr. Signed by Judge James G. Carr on 10/14/2009. (Time: 30 min.) (S,JM) (Entered: 10/14/2009)
99 Attorney Appearance of Ben Wizner by Fritz Byers filed by on behalf of Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 10/14/2009)
100 Attorney Appearance of Alex Abdo by Fritz Byers filed by on behalf of Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 10/14/2009)
Notice [non−document]: Counsel are to call into the court's bridge line at 419−213−5509 (passcode 550911) for telephonic motion hearing scheduled 10/15/2009 at 9:00 a.m. (S,JM) (Entered: 10/15/2009)
101 Marginal Entry Order granting Motion for leave to file opposition to motion for interim relief and for temporary restraining order in excess of page limit. Signed by Judge James G. Carr on 10/15/2009. (Related Doc # 95 ) (S,JM) (Entered: 10/15/2009)
102 Notice of Filing Proposed Order for Interim Relief filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Proposed Order)(Byers, Fritz) Modified on 10/19/2009 (B,TM). (Entered: 10/16/2009)
103 Order: Telephonic oral argument was held on 10/15/2009 before Judge James G. Carr. Leave granted to plaintiff by 3:00 p.m., 10/16/2009, to propose precatory language re. order, if such were to issue, granting such relief; leave granted to defendants to file response by 3:00 p.m., 10/19/2009. Prior briefing schedule vacated: plaintiffs brief re, remedies to be filed 10/30/ 2009; defendants response due 12/7/2009; plaintiffs reply due 12/21/2009; defendants sur−reply 1/11/2009. Signed by Judge James G. Carr on 10/19/2009. (Time: 1hr.) (Court Reporter: Angela Nixon.) (S,JM) (Entered: 10/19/2009)
104 Response to Plaintiff's 102 Proposed Order filed by defendants. (Attachments: # 1 Proposed Order) (Zimmerman, Jonathan) Modified on 10/27/2009 (B,TM). (Entered: 10/19/2009)
105 Reply to 104 Government's Proposed Order filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) Modified on 10/27/2009 (B,TM). (Entered: 10/20/2009)
106 Order : defendants are temporarily restrained and enjoined from designating KindHearts as an SDGT, and from requiring KindHearts to respond to defendants in the designation process, pending my determination of what remedy shall issue because of the constitutional and statutory violations found in the Order entered August 18, 2009. [Doc (Related Doc # 91 ). Judge James G. Carr on 10/26/2009.(S,AL) (Entered: 10/26/2009)
107 Supplemental Brief on Remedy filed by Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Affidavit, # 2 Affidavit) (Byers, Fritz) (Entered: 10/30/2009)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 14 of 18

11/09/2009 12/07/2009 12/07/2009 12/14/2009 12/21/2009 01/11/2010 02/05/2010 05/10/2010
05/18/2010 05/18/2010 06/07/2010 06/17/2010
07/30/2010 07/30/2010 07/30/2010

108 Notice of Supplemental Authority filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Attachments: # 1 Exhibit 1 − Slip Opinion in Al−Haramain Islamic Foundation v. Dep't of Treasury)(Powell, Amy) (Entered: 11/09/2009)
109 Unopposed Motion for leave to exceed page limitations for Supplemental Brief filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Powell, Amy) Modified on 12/8/2009 (B,TM). (Entered: 12/07/2009)
110 Supplement (Defendants' First Supplemental Brief) filed by All Defendants. (Attachments: # 1 Exhibit 1 − Zimmerman Email to the Court, # 2 Exhibit 2 − Excerpts from Transcript of Oral Argument, # 3 Exhibit 3 − Declaration of John Smith with attachments)(Powell, Amy) (Entered: 12/07/2009)
111 Marginal Entry Order granting 109 defendants' unopposed Motion for leave to exceed page limitations for supplemental brief. Signed by Judge James G. Carr on 12/14/2009.(S,JM) (Entered: 12/14/2009)
112 Supplemental Reply Brief of Remedy to 91 Motion for temporary restraining order and/or for interim relief filed by Plaintiffs. (Attachments: # 1 Affidavit, # 2 Affidavit)(Byers, Fritz) Modified on 12/23/2009 (B,TM). (Entered: 12/21/2009)
113 Second Supplemental Brief filed by All Defendants. (Powell, Amy) Modified on 1/14/2010 (B,TM). (Entered: 01/11/2010)
114 Notice of Supplemental Authority filed by All Plaintiffs. (Attachments: # 1 Exhibit HM Treasury v. Ahmed (2010))(Kabat, Alan) (Entered: 02/05/2010)
115 Order. The government shall show probable cause as provided herein and provide KindHearts with notice of the basis for its BPI as provided herein; re attorneys' fees, case is remanded to OFAC for further consideration. The stay previously issued remains in effect pending compliance with the order. Status conference to be scheduled re 87 . Judge James G. Carr on 5/10/2010. (R,Ci) (Entered: 05/10/2010)
Notice [Non Document] of Pretrial Conference set for 6/14/2010 at 02:00 AM in to be held telephonically before Judge James G. Carr. Counsel shall call 419−213−5509, access code 550911. (S,AL) (Entered: 05/18/2010)
Corrected Notice [Non Document] of Telephone Conference set for 6/14/2010 at 02:00 PM to be held telephonically before Judge James G. Carr. Counsel to call the bridge line at 419−213−5509, access code 550911. (S,AL) (Entered: 05/18/2010)
116 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 06/07/2010)
117 Order: Status/scheduling conference was held on 6/14/2010 before Judge James G. Carr. OFAC to undertake need to know review and notify court and counsel of result of that review on or before 7/30/2010. Results of further review, if any, of unclassified information as to which government has not made disclosure due to privilege, to be provided to court and counsel by 7/30/2010. Government's` brief in support of unclassified probable cause showing and governments supplemental brief re. handling of classified information to be filed on or before 7/30/2010; plaintiffs responses to be filed by 8/31/2010; governments replies to be filed on or before 9/15/2010. Plaintiff to respond to government's probable cause submission, as may be supplemented by 7/30/2010, on or before 8/31/2010; defendants' replies due 9/15/2010. Defendants brief re. in camera, ex parte submission of classified information in support of probable cause to be filed on or before 7/30/2010. Signed by Judge James G. Carr on 6/17/2010. (Time: 20 min.)(S,JM) (Entered: 06/17/2010)
118 Notice of Filing 5th Supplement to the Administrative Record filed by All Defendants. (Attachments: # 1 5th Supplement to the Administrative Record)(Powell, Amy) (Entered: 07/30/2010)
119 Notice of Lodging of Ex Parte, In Camera Materials filed by All Defendants. (Powell, Amy) (Entered: 07/30/2010)
120 Supplemental Brief on Probable Cause − Unclassified, Nonprivileged Version filed by All Defendants. (Powell, Amy) (Entered: 07/30/2010)

Case: 3:08-cv-2400 As of: 11/19/2018 08:36 PM EST 15 of 18

07/30/2010 07/30/2010 08/25/2010 08/30/2010 09/09/2010 09/10/2010 09/10/2010 09/10/2010 09/13/2010 09/13/2010 09/13/2010 09/13/2010 09/21/2010
09/23/2010 10/29/2010 10/29/2010 10/29/2010

121 Supplemental Brief Concerning Due Process And The Handling of Classified Information filed by All Defendants. (Attachments: # 1 Attachment A, # 2 Attachment B) (Zimmerman, Jonathan) (Entered: 07/30/2010)
124 Declarations (classified) in support of defendants' supplemental memorandum concerning due process notice and the handling of classified information filed by all dendants. (S,AL) (Entered: 09/01/2010)
122 Unopposed Motion for extension of Parties' Submissions on Probable Cause until Sept 10 and Sept. 24 filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 08/25/2010)
123 Marginal Entry Order granting 122 the plaintiff's Motion to Extend Deadlines. Plaintiff's brief due 9/10/2010; reply due 9/24/2010. Judge James G. Carr on 8/30/2010.(S,AL) (Entered: 08/30/2010)
125 Unopposed Motion for leave to extend page limits filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Kabat, Alan) (Entered: 09/09/2010)
126 Memorandum Brief on Due Process and Classified Evidence filed by All Plaintiffs. Related document(s) 124 , 121 . (Kabat, Alan) Modified on 9/13/2010 (B,TM). (Entered: 09/10/2010)
127 Memorandum Brief on Probable Cause filed by All Plaintiffs. Related document(s) 120 . (Attachments: # 1 Affidavit) (Kabat, Alan) Modified on 9/13/2010 (B,TM). (Entered: 09/10/2010)
128 Notice of Manual Filing of Exhibits to Plaintiff's Memorandum on Probable Cause filed by All Plaintiffs. Related document(s) 127 .(Kabat, Alan) (Entered: 09/10/2010)
129 Exhibit/Appendix in support of Memorandum of Probable Cause, volume I of II filed by All Plaintiffs. COMPLETE DOCUMENT ON FILE IN CLERK'S OFFICE Related document(s) 127 . (B,TM) (Entered: 09/13/2010)
130 Exhibit/Appendix in support of Memorandum on Probable Cause, volume II of II filed by All Plaintiffs. COMPLETE DOCUMENT ON FILE IN CLERK'S OFFICE Related document(s) 127 , 128 . (B,TM) (Entered: 09/13/2010)
131 Exhibit/Appendix B excerpts to OFAC in support of Memorandum on Probable Cause filed by All Plaintiffs. COMPLETE DOCUMENT ON FILE IN CLERK'S OFFICE. Related document(s) 127 , 128 . (B,TM) (Entered: 09/13/2010)
132 Marginal Entry Order granting plaintiff's Motion for leave to exceed the page limitation. (Related Doc # 125 ). Judge James G. Carr on 9/13/2010.(S,AL) (Entered: 09/13/2010)
133 Motion for extension of time for defendants to respond to plaintiff's Supplemental Briefs until October 25, 2010 filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Zimmerman, Jonathan) Modified on 9/21/2010 (B,TM). (Entered: 09/21/2010)
134 Marginal Entry Order granting 133 defendants' motion for an extension of time until 10/29/10 to file their response. Judge James G. Carr on 9/23/2010.(S,AL) (Entered: 09/23/2010)
135 Reply to Plaintiff's Memorandum on Due Process and Classified Information filed by All Defendants. Related document(s) 126 . (Attachments: # 1 Exhibit Attachment A) (Zimmerman, Jonathan) Modified on 11/2/2010 (B,TM). (Entered: 10/29/2010)
136 Unopposed Motion for leave to expand page limitations filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Powell, Amy) (Entered: 10/29/2010)
137 Supplemental Reply Brief on Probable Cause filed by All Defendants. (Attachments: # 1 Attachment A − Second Supplemental Declaration of Adam Szubin, # 2 Exhibit 1 to Szubin Declaration − Watson Memo Part 1, # 3 Exhibit 1 to Szubin Declaration − Watson Memo Part 2, # 4 Exhibit 2 to Szubin Declaration − Correspondence re Watson Memo) (Powell, Amy) Modified on 11/2/2010 (B,TM). (Entered: 10/29/2010)

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11/10/2010 11/17/2010
11/24/2010 11/29/2010 11/29/2010
11/29/2010 12/13/2010
12/22/2010 12/22/2010 01/27/2011 02/01/2011 02/07/2011 03/07/2011
03/11/2011 03/15/2011 04/15/2011 04/20/2011 05/16/2011

138 Marginal Entry Order granting Unopposed Motion to enlarge page limits 136 . Signed by Judge James G. Carr on 11/10/2010.(S,JM) (Entered: 11/10/2010)
139 Motion for leave to File Sur−Reply and Request for Oral Argument filed by Plaintiff Kindhearts For Charitable Humanitarian Development, Inc.. (Attachments: # 1 Exhibit (Proposed Sur−Reply Brief))(Kabat, Alan) Modified on 11/18/2010 (B,TM). (Entered: 11/17/2010)
Notice [Non Document] of Telephone Conference set for 12/15/2010 at 12:00 PM in to be held before Judge James G. Carr. (S,AL) (Entered: 11/24/2010)
140 Marginal Entry Order granting 139 Motion for leave to file sur−reply and request for oral argument. Signed by Judge James G. Carr on 11/29/2010.(S,JM) (Entered: 11/29/2010)
141 Order: Telephone scheduling conference was held on 11/29/2010. Oral arguments are scheduled 2/3/2011 at noon in Courtroom 204 before Judge James G. Carr. The 12/15/2010 telephone conference is vacated. Signed by Judge James G. Carr on 11/29/2010. (Time: 15 min.) (S,JM) (Entered: 11/29/2010)
142 Sur−Reply to defendants reply memorandum on probable cause, due process and classified information filed by All Plaintiffs. Related document(s) 120 . (S,AL) (Entered: 12/01/2010)
143 Motion for leave to file a response to Plaintiff's Sur−reply filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Attachments: # 1 Proposed Response to Plaintiff's Surreply)(Powell, Amy) (Entered: 12/13/2010)
144 Marginal Entry Order granting defendant's Motion for leave to file a response to plaintiff's sur−reply. (Related Doc # 143 ). Judge James G. Carr on 12/22/2010.(S,AL) (Entered: 12/22/2010)
145 Response to plaintiff's sur−reply in response to defendants' supplemental reply concerning probable cause and due process and the use of classified information filed by all defendants. (S,AL) (Entered: 12/22/2010)
Notice [Non Document] of Telephone Conference (re. resetting the 2/4/11 oral arguments) set for 1/31/2011 at 09:30 AM before Judge James G. Carr. Counsel call call 419−213−5509, access code 550911. (S,AL) (Entered: 01/27/2011)
Minutes of proceedings [Non Document] before Judge James G. Carr.Pretrial Conference held on 1/31/2011. (Court Reporter: Tracy Spore.)Time:.15. (S,AL) (Entered: 02/01/2011)
146 Order: that the oral arguments are rescheduled for March 17, 2011 at noon. Ex parte, in camera session scheduled for March 17, 2011 at 7:30 a.m.. Judge James G. Carr on 2/7/2011. (S,AL) (Entered: 02/07/2011)
Notice [Non Document]: Ex parte in camera hearing scheduled for 3/17/2011 is rescheduled for 8:30 a.m. The Oral Argument is rescheduled for 10:30 a.m. on 3/17/2011 in Courtroom 204 before Judge James G. Carr. (S,AL) (Entered: 03/07/2011)
147 Joint Motion to continue hearings filed by Timothy Geithner, Eric H. Holder, Jr, Michael B. Mukasey, Henry M. Paulson, Adam J. Szubin. (Powell, Amy) (Entered: 03/11/2011)
148 Marginal Entry Order granting 147 Motion to continue the hearings scheduled March 17,2010. Status reports are due April 15, 2010. Signed by Judge James G. Carr on 3/14/2010. (S,JM) Modified on 3/15/2011 (S,JM). (Entered: 03/15/2011)
149 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 04/15/2011)
150 Order: Parties to file further Status Report by 5/16/2011. Judge James G. Carr on 4/20/2011. (S,AL) (Entered: 04/20/2011)
151 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 05/16/2011)

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05/24/2011 06/17/2011 06/24/2011 07/22/2011 08/10/2011 08/26/2011 09/15/2011 09/21/2011 09/28/2011 10/07/2011 10/07/2011 10/24/2011
11/14/2011 11/21/2011 11/28/2011
12/31/2011 01/12/2012
01/12/2012 07/02/2012

152 Marginal entry order: Further status report is due 6/17/2011. Signed by Judge James G. Carr on 5/24/2011. (Related document: 151 ) (S,JM) (Entered: 05/24/2011)
153 Joint Status Report filed by All Defendants. (Zimmerman, Jonathan) (Entered: 06/17/2011)
154 Marginal Entry Order: Further status report is due 7/22/2011. Signed by Judge James G. Carr on 6/24/2011. (Related document: 153 )(S,JM) Modified on 6/24/2011 (S,JM). (Entered: 06/24/2011)
155 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 07/22/2011)
Notice [Non document] of Telephone Conference set for 8/15/2011 at 09:30 AM before Judge James G. Carr. Counsel to call the bridge line at 419−213−5509, access code 550911. (S,AL) (Entered: 08/10/2011)
156 Order: Telephone status conference was held on 8/15/2011, with Judge James G. Carr. Further status reports are due 9/15/2011. Signed by Judge James G. Carr on 8/26/2011. (Time: 10 min.) (S,JM) (Entered: 08/26/2011)
157 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 09/15/2011)
Notice [non−document]: Telephone status conference is scheduled 10/4/2011 at 10:00 AM EST. with Judge James G. Carr. Counsel are to call into the Court bridge line at 419−213−5555. Passcode is 550911. (S,JM) (Entered: 09/21/2011)
Notice [Non document]: The Telephone Conference set for 10/4/2011 at 10:00am has been moved to 10/4/2011 at 01:30 PM before Judge James G. Carr. Counsel to call the bridge line at 419−213−5509, access code 550911. (S,AL) (Entered: 09/28/2011)
158 Order of Pretrial Conference held on 10/4/2011. Parties to file further status reports by 11/14/2011. Time:.10. Judge James G. Carr on 10/7/2011. (S,AL) (Entered: 10/07/2011)
Set Deadlines and Hearings Status Report due by 11/14/2011. Related document(s) 158 . (G,D) (Entered: 10/11/2011)
Non document Order: All documents from todays date and hereafter, must be filed as PDF documents in text searchable format (i.e. no scanned documents, except for exhibits). All exhibits must be specifically identified. Failure to comply with these requirements will result in the Clerks Office marking the document(s) as a filing error and you will be required to re−file in compliance with this order. Judge James G. Carr on 10/24/2011. (S,AL) (Entered: 10/24/2011)
159 Joint Status Report filed by All Defendants. (Zimmerman, Jonathan) (Entered: 11/14/2011)
Notice [Non Document]: Telephone Conference set for 11/28/2011 at 08:30 AM before Judge James G. Carr. Counsel shall call the bridge line at 419−213−5509, access code 550911. (S,AL) (Entered: 11/21/2011)
160 Order of Pretrial Conference held on 11/28/2011. Status Report due by 12/30/2011. Parties to file dismissal order or further status report by 7/1/2012. Time:.15 Judge James G. Carr on 11/28/2011. Court Reporter: Angela Nixon(S,AL) (Entered: 11/28/2011)
161 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 12/31/2011)
162 Order: The parties have indicated to the Court that they have reached a settlement of all matters in dispute. Parties are to file a dismissal entry or a joint status report by 7/1/2012. Any dispute re. terms of settlement is to be submitted to the undersigned District Judge for final adjudication. Signed by Judge James G. Carr on 1/12/2012. (S,JM) (Entered: 01/12/2012)
Set Deadlines and Hearings Status Report due by 7/1/2012. Related document(s) 162 . (G,Di) (Entered: 01/13/2012)
163 Joint Status Report filed by Timothy Geithner, Kindhearts For Charitable Humanitarian Development, Inc.. (Byers, Fritz) (Entered: 07/02/2012)

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07/11/2012 11/02/2012 11/16/2012 02/15/2013 02/20/2013 07/29/2013
08/20/2013 08/22/2013 12/20/2013 01/13/2014
01/28/2014 05/01/2014 05/08/2014 07/15/2014 07/17/2014

164 Marginal Entry Order: Status report or dismissal entry is due on or before 11/2/2012. (S,JM) (Entered: 07/11/2012)
165 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 11/02/2012)
166 Order (re 165 ) Dismissal or Further Status Report due by 2/15/2013. Judge James G. Carr on 11/16/12. (C,D) (Entered: 11/16/2012)
167 Status Report filed by Kindhearts For Charitable Humanitarian Development, Inc.. Related document(s) 166 .(Kabat, Alan) (Entered: 02/15/2013)
168 Attorney Appearance by Stephen J. Buckingham filed by on behalf of All Defendants. (Buckingham, Stephen) (Entered: 02/20/2013)
Order(non−document) Further Status Report or Dismissal entry due 8/20/13. (re 167 Status Report filed by Kindhearts For Charitable Humanitarian Development, Inc.). Judge James G. Carr on 7/29/13. (C,D) (Entered: 07/29/2013)
169 Status Report filed by All Plaintiffs. (Kabat, Alan) (Entered: 08/20/2013)
Order(non−document): Further status report or Dismissal entry due 12/20/13 (re 169 Status Report). Judge James G. Carr on 8/22/13. (C,D) (Entered: 08/22/2013)
170 Joint Status Report filed by All Defendants. (Powell, Amy) (Entered: 12/20/2013)
Notice [non−document] of Status Conference set for 1/27/2014 at 04:00 PM to be held telephonically before Judge James G. Carr using the court's bridge line (419−213−5509 Access Code 550911). (C,D) (Entered: 01/13/2014)
171 Order. Status Conference held on 1/27/2014. Dismissal entry to be filed on or before 5/1/2014. Judge James G. Carr on 1/28/2014. (G,D) (Entered: 01/28/2014)
172 Joint Status Report filed by All Plaintiffs. (Byers, Fritz) (Entered: 05/01/2014)
173 Order re 172 Dismissal entry or Status Report due by 7/15/2014. Judge James G. Carr on 5/8/14. (C,D) (Entered: 05/08/2014)
174 Joint Stipulation of Dismissal and Motion to Vacate Preliminary Injunction filed by All Defendants. (Powell, Amy) (Entered: 07/15/2014)
175 Joint Stipulation and Order of Case Dismissal with prejudice Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii)(re 174 ) and dissovling preliminary injuction. Judge James G. Carr on 7/17/14. (C,D) (Entered: 07/17/2014)