Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-05059/USCOURTS-caDC-14-05059-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 17, 2015 Decided July 10, 2015

No. 14-5059

FERNANDO ZEVALLOS,

APPELLANT

v.

BARACK HUSSEIN OBAMA, IN HIS OFFICIAL CAPACITY AS 

PRESIDENT OF THE UNITED STATES, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:13-cv-00390)

Erich C. Ferrari argued the cause and filed the briefs for 

appellant.

Benjamin M. Shultz, Attorney, U.S. Department of 

Justice, argued the cause for appellees. With him on the brief 

were Ronald C. Machen Jr., U.S. Attorney, and Mark B. 

Stern, Attorney.

Before: GRIFFITH and KAVANAUGH, Circuit Judges, and 

SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GRIFFITH.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 1 of 19
2

GRIFFITH, Circuit Judge:

Appellant Fernando Zevallos brought suit challenging the 

determination of the Department of the Treasury that the 

President had lawfully designated him a significant foreign 

narcotics trafficker. The district court rejected his claims, as 

do we.

I

This case arises under the Foreign Narcotics Kingpin 

Designation Act (Kingpin Act), 21 U.S.C. § 1901 et seq., one 

of several statutory mechanisms that enable the President to 

block or seize the assets of individuals or entities involved in 

international crime or terrorism. The Kingpin Act was 

modeled on a specific, successful application of a similar 

statute, the International Emergency Economic Powers Act 

(IEEPA), 50 U.S.C. §§ 1701-07. See H.R. Rep. No. 106-457, 

42 (1999). IEEPA itself is closely analogous to the antiterrorism provisions of the Antiterrorism and Effective Death 

Penalty Act of 1996, 8 U.S.C. § 1189 (AEDPA). Under all 

three statutes, the President can designate individuals or 

entities as posing a threat to the security of the United States 

or its interests and impose sanctions on them. 

The Kingpin Act specifically targets persons that “play[] a 

significant role in international narcotics trafficking,” 21 

U.S.C. § 1907(7), as “significant foreign narcotics 

traffickers,” id. § 1903(b). Narcotics trafficking includes 

producing, distributing, selling, financing, or transporting any 

illegal narcotic, or conspiring with or assisting others to do so. 

Id. § 1907(3). Persons designated as significant foreign 

narcotics traffickers under the Kingpin Act—just like persons 

designated a threat to the United States under IEEPA and 

AEDPA—are added to the “Specially Designated Nationals 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 2 of 19
3

and Blocked Persons List,” 31 C.F.R. § 501.807(a), and all 

their assets in the United States or under the control of 

any person who is in the United States are “block[ed],” 21 

U.S.C. § 1904(b), or effectively frozen. No citizen or resident 

of the United States may transact or deal in blocked property. 

Id. § 1904(c).

A designated person may “seek administrative 

reconsideration” of his designation and request to be 

removed, or “delist[ed],” from the Specially Designated 

Nationals and Blocked Persons List. 31 C.F.R. § 501.807. The 

same procedure applies irrespective of which statute was 

invoked to designate the person in question. 31 C.F.R. Ch. V, 

App. A; id. § 501.807. A request for reconsideration—also 

sometimes called a delisting request—may include arguments 

or evidence rebutting Treasury’s “basis . . . for the 

designation,” or “assert that the circumstances resulting in the 

designation no longer apply.” Id. § 501.807, 807(a). In other 

words, the designated person must argue that whatever 

rationale led Treasury to designate him under the appropriate 

statute—as relevant here, that the designated person was a 

significant foreign narcotics trafficker as defined in the 

Kingpin Act—was never true or is no longer true. The Office 

of Foreign Assets Control at the Department of the Treasury 

will “conduct[] a review of the request for reconsideration”

and “provide a written decision to the blocked person.” Id. 

§ 501.807(d). A designated person can request delisting as 

many times as he likes. See id. § 501.807.

Petitioner Fernando Zevallos is a Peruvian national who 

founded and led Aero Continente, a low-cost airline operating 

throughout Latin America. A number of countries, including 

the United States, investigated Zevallos for alleged 

involvement in narcotics trafficking throughout the 1980s and 

1990s. Peru’s investigations culminated in a 1997 indictment 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 3 of 19
4

of Zevallos on drug trafficking and money laundering charges

based on allegations that he had worked with drug traffickers 

to launder some $40 million. 

In June 2004, President George W. Bush used his 

authority under the Kingpin Act to designate Zevallos as a 

significant foreign narcotics trafficker. Accordingly, all of 

Zevallos’s assets in the United States and the assets of related 

companies and individuals were blocked. Around the time he 

was designated, Zevallos attempted to illegally transfer 

property he owned in Miami to his wife. He was eventually 

charged in the Southern District of Florida with violating the 

Kingpin Act by attempting this transfer. Those charges are 

still pending. 

In December 2004, Zevallos asked Treasury to remove 

him from the Specially Designated Nationals and Blocked 

Persons List and unblock his assets. He submitted to Treasury 

a memorandum with exhibits in support of his request (the 

2004 Memorandum). Treasury responded in June and 

September 2005 by disclosing non-sensitive material relating 

to Zevallos’s designation. Zevallos filed a supplemental 

submission reiterating his arguments one month later. 

Zevallos brought suit in November 2005 in federal district 

court in the District of Columbia, seeking an order that would 

require Treasury to take his name off the Specially 

Designated Nationals and Blocked Persons List and unblock 

his assets. However, shortly thereafter, Zevallos was 

convicted on all pending charges in Peru. He voluntarily 

dismissed his pending lawsuit against Treasury two days after 

his conviction, terminating that litigation. Treasury has since 

explained to Zevallos and to us that the agency interpreted 

Zevallos’s dismissal of his lawsuit as a sign that he was 

abandoning his request for delisting, though Treasury did not 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 4 of 19
5

tell this to Zevallos at the time. At some point thereafter, 

Treasury lost the exhibits Zevallos had submitted with the 

2004 Memorandum. Those exhibits have never been found.

Zevallos began serving a twenty-year prison sentence in 

Peru in 2005. He remains in prison in Peru today. Four years 

passed with no communication between Zevallos and 

Treasury. Zevallos broke this silence in July 2009 when he 

wrote to various U.S. officials, requesting extradition from 

Peru so that he could face the charges pending against him in 

the Southern District of Florida. Treasury construed this letter 

as a request for the agency to reexamine Zevallos’s 

designation and wrote back, asking Zevallos to answer a 

questionnaire about his financial interests and relationship 

with a variety of entities and individuals. Zevallos filed a 

response to that questionnaire in November 2009. 

Another four years passed with no action from Treasury

on Zevallos’s resuscitated delisting request. In March 2013, 

Zevallos filed this action, seeking an injunction that would 

force Treasury to act on his long-pending delisting request. 

Three months later Treasury at last denied the request. 

Treasury acknowledged losing the exhibits attached to 

Zevallos’s 2004 request, but tried to make up for this mistake 

by assuming that whatever Zevallos said about this evidence 

in his 2004 Memorandum was true. Even so, Treasury 

concluded that Zevallos was properly designated in 2004 and 

that he should remain designated in 2013. Treasury also 

produced a number of new pieces of evidence in support of 

the designation.

In response, Zevallos amended his complaint in this action 

to introduce new claims attacking Treasury’s decision. 

Relevant to this appeal, Zevallos argued to the district court 

that the denial of his delisting request was arbitrary and 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 5 of 19
6

capricious and that Treasury had disregarded agency 

procedures. He also maintained that Treasury’s decision

should be reviewed de novo. Separately, Zevallos argued that 

his designation violated his procedural and substantive due 

process rights under the Due Process Clause.

Treasury insisted that the district court should use the 

APA’s conventional arbitrary and capricious standard, not de 

novo review. Treasury also asked the district court to dismiss 

or grant summary judgment as to every count of Zevallos’s 

amended complaint. The district court held in Treasury’s 

favor on each point. See Zevallos v. Obama, 10 F. Supp. 3d 

111, 119-33 (D.D.C. 2014).

1

Zevallos timely appealed. We have jurisdiction under 28 

U.S.C. § 1291. We consider the district court’s ruling de 

novo. Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728, 

732 (D.C. Cir. 2007). As always, when we examine an 

agency’s decision, we apply the APA’s “highly deferential 

standard,” meaning that we may set aside Treasury’s action 

“only if it is ‘arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law.’” Id. at 732 (quoting 5 

U.S.C. § 706(2)(A)); see also Holy Land Found. for Relief & 

Dev. v. Ashcroft, 333 F.3d 156, 161 (D.C. Cir. 2003). Under 

that standard, “we may not substitute our judgment for 

[Treasury’s], but we will require it to ‘examine the relevant

data and articulate a satisfactory explanation for its action 

including a rational connection between the facts found and 

 1 Zevallos also argued that the denial of his delisting request violated 

the APA because of undue delay and because blocking his assets violated 

the Takings Clause of the Fifth Amendment. The district court dismissed 

these claims, finding that the undue delay claim was now moot and that 

only the Court of Federal Claims would have jurisdiction to consider his 

Takings Clause claim. See Zevallos, 10 F. Supp. 3d at 123-24, 132-33. 

Zevallos does not appeal either of those rulings here.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 6 of 19
7

the choice made.’” Islamic Am. Relief Agency, 477 F.3d at 

732 (quoting Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. 

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

Zevallos asks us to take the extraordinary and rare step of 

reviewing Treasury’s determination de novo instead of under 

the APA’s arbitrary and capricious standard. See Melissa F. 

Wasserman, Deference Asymmetries: Distortions in the 

Evolution of Regulatory Law, 93 TEX. L. REV. 625, 639 n.44 

(2015) (finding only one example where a court applied de 

novo review under the APA, in an unusual case in which the 

agency decisionmaker had obvious bias against the 

petitioner). We will not do so. We have never applied de novo

review in an APA case and have stated in dicta that 

“procedures must be severely defective before a court 

proceeding under the APA can substitute de novo review for

review of the agency’s record.” Nat’l Org. for Women v. 

Social Sec. Admin., 736 F.2d 727, 745-46 (D.C. Cir. 1984) 

(Mikva & McGowan, JJ., concurring). These proceedings 

were not severely defective. The agency’s fact-finding 

procedures were adequate, and Zevallos had ample 

opportunity to make his case to agency officials. See id.

Therefore arbitrary and capricious review will apply.

II

A

We affirm the district court’s rejection of Zevallos’s claim 

that Treasury’s denial of his delisting request was arbitrary 

and capricious.

Treasury denied Zevallos’s delisting request by relying on 

five different sets of evidence: (1) newspaper articles 

discussing the recent seizure of assets he continued to control 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 7 of 19
8

in Panama; (2) newspaper articles discussing new charges 

filed against him in Peru in 2011 and 2012; (3) newspaper 

articles discussing his ongoing control of assets in Peru; (4) 

newspaper articles discussing the recent discovery of an illicit 

cellphone and memory stick in his prison cell in Peru; and (5) 

his 2007 criminal indictment in the Southern District of 

Florida.

Zevallos argues that Treasury is not entitled to rely on 

“[u]nverified open source materials” like news media reports 

to justify designation decisions under the Kingpin Act. 

However, as Zevallos acknowledges, we have approved the 

use of such materials as part of the unclassified record 

supporting the decision to designate an individual or entity for 

inclusion on the Specially Designated Nationals and Blocked 

Persons List under closely analogous statutes. See, e.g., Holy 

Land, 333 F.3d at 162 (explaining that, under IEEPA, “it is 

clear that the government may decide to designate an entity 

based on a broad range of evidence, including intelligence 

data and hearsay declarations”); People’s Mojahedin Org. of 

Iran v. U.S. Dep’t of State, 182 F.3d 17, 19 (D.C. Cir. 1999)

(noting that “nothing in [AEDPA] restricts [the Department of 

State] from acting on the basis of third hand accounts, press 

stories, material on the Internet[,] or other hearsay regarding 

the organization’s activities”).

2 There are good reasons to 

permit Treasury to rely on such materials that apply equally in 

all these contexts. The designation decision may be based in 

part on classified information. Treasury may face logistical or 

 2 Though elsewhere Zevallos argues that our past decisions examining 

closely related statutes like IEEPA and AEDPA cannot help guide our 

assessment of the Kingpin Act, see infra at 15, he did not make that 

argument in this regard. To the contrary, his brief acknowledged the 

relevance of those cases here. As Zevallos has not argued to the contrary, 

we will assume our precedents under IEEPA and AEDPA provide useful 

guidance on this score.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 8 of 19
9

political difficulties obtaining judicial or law enforcement 

records from other countries. Diplomatic concerns may limit 

what Treasury or its agents can say publicly in connection 

with individual designations. And the safety of investigators 

or informants might be put at hazard were their testimony 

made available as part of the administrative record. Those 

same considerations apply with equal force here. We see no 

reason to disapprove the use of such materials in delisting 

proceedings under the Kingpin Act when we have approved 

their use in nearly identical circumstances. 

Zevallos suggests instead that relying on open source 

materials was inappropriate here because Treasury gathered 

the articles immediately before deciding his delisting request 

and therefore lacked adequate time to develop a more 

complete record that corroborated their content. But our 

previous IEEPA and AEDPA decisions approved the use of 

media reports to support a designation decision without regard 

to the recency of those reports or the presence of 

corroboration. See, e.g., Holy Land, 333 F.3d at 162.

Zevallos also argues that the news reports on which 

Treasury relied do not support its determination. To the extent 

he has preserved his arguments, they fail; where they have 

been forfeited, we do not consider them. Treasury relied in 

part on articles revealing the discovery of an illicit cellphone 

and memory stick in Zevallos’s jail cell, as well as articles 

discussing the use of such devices by incarcerated drug 

traffickers to continue managing their affairs. Zevallos points 

out that the Kingpin Act only permits designating an 

individual who “plays a significant role” in narcotics 

trafficking, not someone who merely has the capacity to do 

so. See 21 U.S.C. § 1907(7). Evidence that he possessed an 

illicit cellphone in prison, he argues, does not show that he 

used that cellphone to participate in narcotics trafficking. Fair 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 9 of 19
10

enough. Perhaps these articles, standing alone, might not have 

provided enough to justify Zevallos’s designation. But this 

evidence at a minimum shows that Zevallos had the capacity 

to communicate with others outside his prison. And Zevallos 

does not argue that Treasury could not rely on this evidence in 

combination with other evidence of illegal activity to 

conclude that he still represents a threat and should remain 

designated. 

And there was no shortage of additional evidence. For 

example, Treasury relied on a set of articles discussing the 

seizure of Panamanian bank accounts that Zevallos continued 

to control from prison through his sister, as well as another set 

of articles discussing his family’s ongoing control of a 

number of properties in Peru that were ostensibly seized by 

the Peruvian government years ago in connection with 

Zevallos’s conviction. Zevallos argued below that this 

evidence was irrelevant because it showed only that his 

family continued to control assets derived from narcotics 

trafficking. On appeal he argues that Treasury may not rely on 

evidence that he owns such assets because he cannot legally 

or practically relinquish control of them, given that they are 

blocked under the Kingpin Act and that he is incarcerated. 

Because these arguments were not made below, they have 

been forfeited. See Potter v. District of Columbia, 558 F.3d 

542, 549-50 (D.C. Cir. 2009). But even if not forfeited, they

miss the point. Treasury does not fault Zevallos for nominally 

owning assets he is somehow obstructed from abandoning.3

Instead, Treasury relied on this evidence, as it was entitled to 

 3 It is by no means clear that Zevallos is correct that any legal or 

practical impediment would prevent him from abandoning any assets. But 

we need not decide that question because his ability to abandon bank 

accounts or other property is irrelevant to Treasury’s decision to continue 

his designation.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 10 of 19
11

do, to show that Zevallos remains in contact with his family

and continues to manage his assets from prison.

Treasury also pointed to articles reporting new charges 

filed against Zevallos in Peru in 2011 and 2012 alleging more 

recent money laundering activity. Zevallos did not address 

this evidence at all except as part of his categorical argument

that Treasury should not have relied on any news reports. But 

as we explained above, Treasury was entitled to rely on 

evidence of this kind to conclude that Zevallos remains of 

concern to law enforcement.

Finally, Zevallos argues that Treasury should not have 

considered his 2007 criminal indictment. He made no 

argument at all regarding the 2007 indictment below and so 

he has forfeited any argument he might make on appeal on 

this score. See Potter, 558 F.3d at 549-50.

All this evidence together provides adequate basis to 

justify Treasury’s determination. There is no doubt, as 

Zevallos argues, that Treasury marshalled less evidence now 

than existed to support his original designation in 2004. And 

we agree that much of this evidence could be viewed in a light 

more beneficial to Zevallos. However, when we evaluate 

agency action, “we do not ask whether record evidence could 

support the petitioner’s view of the issue, but whether it 

supports the [agency’s] ultimate decision.” Fla. Gas 

Transmission Co. v. FERC, 604 F.3d 636, 645 (D.C. Cir. 

2010) (citation omitted). Under that deferential standard, we 

find that this record supports Treasury’s denial of Zevallos’s 

delisting request. 

B

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 11 of 19
12

Zevallos argues that Treasury reached the decision to deny 

his request “without observance of procedure required by 

law.” 5 U.S.C. § 706(2)(D). His claim rests on two grounds. 

He criticizes the agency for losing the exhibits he submitted in 

support of the 2004 Memorandum as part of his original 

delisting request. He also asserts that the agency should have 

notified him that dismissing his lawsuit in 2005 would, in 

Treasury’s view, also effectively withdraw his delisting 

request. 

We will not invalidate Treasury’s decision based on 

procedural error unless the errors alleged could have affected 

the outcome. See Ozark Auto. Distributors, Inc. v. NLRB, 779 

F.3d 576, 582 (D.C. Cir. 2015) (“‘In administrative law, as in 

federal civil and criminal litigation, there is a harmless error 

rule.’” (quoting PDK Labs. Inc. v. U.S. D.E.A., 362 F.3d 786, 

799 (D.C. Cir. 2004)). Zevallos has failed to argue that either 

error was anything more than harmless. First, though losing 

the binders full of evidence Zevallos submitted in 2004 was 

without question a serious error, Treasury remediated that

mistake by assuming that everything Zevallos said about what 

was in the missing evidence was true. Zevallos insists 

nonetheless that Treasury “arguably would have reached a 

different conclusion” had the agency reviewed the actual 

evidence instead of accepting his word for what the evidence 

showed. We fail to see how. The evidence would either have 

supported or contradicted the factual claims Zevallos made in 

the 2004 Memorandum. If the former, Zevallos would have 

been no better off because Treasury already assumed 

everything he said about the evidence was true. On the other 

hand, he would have been much worse off if examining the 

evidence showed that Zevallos had lied about what it showed. 

Because Zevallos cannot show any injury from the loss of his 

evidence, this error provides no basis to invalidate Treasury’s 

determination.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 12 of 19
13

Nor has Zevallos suggested that he was harmed by the 

long delay after Treasury interpreted Zevallos’s request as 

withdrawn in 2005. To be sure, Treasury should notify

individuals when disregarding their pending requests. And 

Zevallos is correct that no statute or regulation allows 

Treasury to disregard pending requests, as happened here. But 

Zevallos must show that a different process would have led 

Treasury to a different decision. He has not done so. Though 

Treasury took a long time, the agency ultimately considered 

and denied the delisting request. Zevallos was designated as a 

significant foreign narcotics trafficker in 2004. He remained

so designated for the next eight years. He is still so designated 

today. Nothing would have changed had Treasury denied his 

delisting request in 2006 or 2010. Zevallos insists that the 

delay harmed him because his ongoing designation imposed 

serious burdens on him and his family. But Zevallos has not 

and cannot argue that he would have avoided that harm had 

Treasury made its decision earlier. Therefore any error on this 

score is harmless as well.

Finally, we note that any discussion of procedural error in 

this context is academic. Even if Zevallos proved a procedural 

error sufficient to invalidate Treasury’s decision, at most we 

would vacate Treasury’s determination and remand for 

Treasury to rule again. But Treasury’s procedure governing 

requests for reconsideration of designation decisions imposes 

no limit on the number of times a designated person can 

request delisting. See 31 C.F.R. § 501.807. Zevallos is free to 

file a new request and obtain a new ruling from Treasury, just 

as he would if we vacated and remanded the decision before 

us. In fact, it seems Zevallos has already taken advantage of 

this procedure. He filed another delisting request with 

Treasury after he noticed this appeal, which the agency has 

held in abeyance while this matter is pending. If anything,

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 13 of 19
14

Zevallos is better off for having read Treasury’s 2013 

decision. He now knows all of Treasury’s newest and best 

arguments justifying his ongoing designation and can respond 

to them in a future request for reconsideration.

C

Zevallos also insists that Treasury violated his procedural 

and substantive due process rights under the Constitution. He 

faults Treasury for failing to afford him the chance to 

challenge his designation beforehand and for providing 

inadequate process to challenge his designation after the fact. 

And he argues that denying his delisting request was so

gravely unfair as to infringe his substantive due process 

rights. He is wrong on all counts.

“[D]ue process is flexible and calls for such procedural 

protections as the particular situation demands.” Morrissey v. 

Brewer, 408 U.S. 471, 481 (1972). Though the Due Process 

Clause generally requires the Government to afford 

individuals notice and an opportunity to be heard before 

depriving them of their property, there are “extraordinary 

situations where some valid governmental interest is at stake 

that justifies postponing the hearing until after the event.”

Boddie v. Connecticut, 401 U.S. 371, 379 (1971). “[W]here a 

State must act quickly, or where it would be impractical to 

provide predeprivation process, postdeprivation process 

satisfies the requirements of the Due Process Clause.” Gilbert 

v. Homar, 520 U.S. 924, 930 (1997). This is especially true 

where the seizure is aimed at “property . . . of a sort that could 

be removed to another jurisdiction, destroyed, or concealed, if 

advance warning of confiscation were given.” Calero-Toledo 

v. Pearson Yacht Leasing Co., 416 U.S. 663, 679 (1974). In 

that circumstance, “[t]he ease with which an owner could 

frustrate the Government’s interests in the forfeitable property 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 14 of 19
15

create[s] a ‘special need for very prompt action’ that 

justifie[s] the postponement of notice and hearing until after 

the seizure.” United States v. James Daniel Good Real Prop., 

510 U.S. 43, 52 (1993) (quoting Calero-Toledo, 416 U.S. at 

678).

This is just such a case. There is no doubt that blocking 

Zevallos’s assets deprived him of his property. But providing 

notice before blocking the assets of international narcotics 

traffickers would create a substantial risk of asset flight. Just 

as in Calero-Toledo, that risk creates a “special need for very 

prompt action.” 416 U.S. at 678. To say that offering 

predeprivation process in this circumstance would prove 

“impractical,” Gilbert, 520 U.S. at 930, understates the case; 

such process would likely cripple the Kingpin Act. 

The only response Zevallos offers is to critique the district 

court for relying on a line of cases under IEEPA that 

approved blocking assets without predeprivation process. 

Zevallos insists that the district court was wrong to employ 

IEEPA precedent. We need not decide whether he is right.

The due process analysis here is straightforward without 

analogizing the Kingpin Act to any other statute. As we have 

explained, the circumstances of this case justified Treasury’s 

decision to designate Zevallos and block his assets without 

affording him notice and the opportunity to be heard 

beforehand. See Calero-Toledo, 416 U.S. at 679.

Nor can Zevallos complain of the adequacy of the 

postdeprivation process he received. He was given notice and 

a meaningful opportunity to be heard, which is what the Due 

Process Clause requires. Holy Land, 333 F.3d at 163.4

 4 Though Zevallos insisted that IEEPA cases cannot provide any 

guidance for determining whether predeprivation process is required under 

the Kingpin Act, see supra at 15, his discussion of the adequacy of the 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 15 of 19
16

Treasury provided Zevallos several times with the 

unclassified evidence on which it relied to designate him; 

Zevallos not only had the chance to contest the propriety and 

adequacy of that evidence but did so on more than one 

occasion. And he remains free now to continue contesting his 

designation by filing new delisting requests, meaning that he 

can make any new arguments that occur to him and reiterate 

and expand any arguments he felt received short shrift on 

Treasury’s last review. Due process does not require more.

Zevallos makes four equally deficient responses, two of 

which we consider and reject and two of which we do not 

reach because they have been forfeited. First, he complains 

that Treasury waited far too long before deciding his request

and failed to communicate with him during these delays. 

True, other courts have held that extremely prolonged delays 

while considering such requests can violate the Due Process 

Clause. See Al Haramain, 686 F.3d at 985 (finding a due 

process violation when Treasury never produced the entire 

unclassified administrative record justifying a designation 

decision, explained only some of the reasons for the 

designation via a press release months later, and waited years 

to respond to a delisting request); KindHearts, 647 F. Supp. 

2d at 905 (same, where Treasury only produced a “scanty,”

partial record thirty-four months after the designation). This 

case is quite different. Though Treasury took several years to 

decide Zevallos’s request, Treasury did promptly provide 

 

postdeprivation process he received is based almost entirely on three 

IEEPA cases: Holy Land, 333 F.3d at 163, Al Haramain Islamic Found., 

Inc. v. U.S. Dep’t of Treasury, 686 F.3d 965, 984 (9th Cir. 2012), and 

KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner, 647 F. 

Supp. 2d 857, 905 (N.D. Ohio 2009). Thus, as we did when discussing the 

permissibility of news media reports as a basis for designation decisions, 

see supra at 8 n.2, we will assume that Zevallos accepts the relevance of 

these cases on this question. 

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 16 of 19
17

Zevallos with the unclassified administrative record justifying 

his designation and allowed him to respond to it on multiple 

occasions. Unlike the petitioners in Al Haramain and 

KindHearts who never fully understood why they had been 

designated, Zevallos was fully equipped to rebut Treasury’s 

rationale by the time it finished disclosing information to him 

in September 2005. Cf. Al Haramain, 686 F.3d at 984-85 

(finding that Treasury had violated due process by “refus[ing]

to disclose its reasons for investigating and designating [the 

petitioner], leaving [the petitioner] unable to respond 

adequately to the agency’s unknown suspicions”); 

KindHearts, 647 F. Supp. 2d at 904 (same, because the 

petitioner “remain[ed] largely uninformed about the basis for 

the government’s actions”). Because Zevallos knew the basis 

for his designation, no comparable due process violation 

existed here. In any event, if there was error, it was harmless. 

We have already held that the administrative record supports 

Treasury’s conclusion that Zevallos should remain 

designated, and Zevallos does not suggest that reviewing his 

delisting request at a faster pace would have changed that 

outcome.

Zevallos disagrees. He was harmed by Treasury’s due 

process violations, he argues, because he has been forced to 

respond to his designation “in a post hoc manner” and “to 

decipher the administrative process by trial and error.” There 

is no support for this claim in the record. Zevallos has known 

from the beginning how to attack Treasury’s case against him. 

He has done so several times, and he can continue to do so

now in new requests for delisting. Nothing about the history 

of this case suggests that Zevallos has been forced to stumble 

towards a moving target. And once again, because no

procedural error Zevallos alleges played a role in the denial of 

his delisting request, none provides a basis to vacate 

Treasury’s determination.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 17 of 19
18

Second, Zevallos maintains that Treasury’s loss of the 

binders of evidence he submitted with his original delisting 

request in 2004 prevented the agency from giving his 

argument a fair hearing. Again, we disagree. As we have 

already explained, Treasury rendered any arguable error 

harmless by simply accepting what Zevallos said about the 

missing evidence in his 2004 submission. Treasury’s 

bumbling was no more harmful with respect to Zevallos’s due 

process rights than it was under the APA’s requirement that 

Treasury follow appropriate agency procedure. 

Zevallos has forfeited his last two due process arguments. 

He argues that Treasury did not disclose the basis for 

continuing to designate him until the final decision regarding 

his delisting request issued in 2013. Because Zevallos had not 

previously seen this evidence, he insists he could not 

adequately contest his ongoing designation. Zevallos forfeited 

this argument by not raising it in the district court. Potter, 558 

F.3d at 549-50. He also points to the questionnaire Treasury 

asked him to answer in 2009 once the agency realized he still 

wanted a decision on his delisting request, and complains that

Treasury’s 2013 decision did not address any of the topics 

about which the 2009 questionnaire inquired. This argument 

is doubly forfeited: Zevallos did not make it to the district 

court; and on appeal he made it for the first time in his reply 

brief. See Russell v. Harman Int’l Indus., Inc., 773 F.3d 253, 

255 n.1 (D.C. Cir. 2014) (holding that arguments raised for 

the first time in a reply brief are forfeited).

Finally, Zevallos insists that Treasury’s conduct violated 

his substantive due process rights. We have explained in the 

past that substantive due process forbids only “egregious 

government misconduct,” George Wash. Univ. v. District of 

Columbia, 318 F.3d 203, 209 (D.C. Cir. 2003), involving state

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 18 of 19
19

officials guilty of “grave unfairness” so severe that it 

constitutes either “a substantial infringement of state law 

prompted by personal or group animus,” or “a deliberate 

flouting of the law that trammels significant personal or 

property rights,” Silverman v. Barry, 845 F.2d 1072, 1080 

(D.C. Cir. 1988). “Inadvertent errors, honest mistakes, agency 

confusion, even negligence in the performance of [official]

duties, do not” violate substantive due process rights. Id.

Zevallos has not suggested misconduct even approaching this 

egregious standard. Any error Treasury committed was, at 

most, the result of mistake or negligence and, as we have 

pointed out repeatedly, was harmless. Thus we affirm the 

district court on this score as well.

Nor is it true, as Zevallos suggests, that his claims could 

only be adjudicated at a trial because we have not before 

examined designations under the Kingpin Act. Due process is 

a thickly forested field. Though the statute is new, the legal 

question is very old; and though Zevallos contests action 

taken under a statute we have not confronted until now, the 

deficiency in his claims arises from legal rules that apply 

equally to all statutes. The district court’s decision was 

perfectly appropriate.

III

For the foregoing reasons we affirm the district court.

USCA Case #14-5059 Document #1561867 Filed: 07/10/2015 Page 19 of 19