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

---

In the

United States Court of Appeals 

For the Seventh Circuit 

Nos. 13‐3732 & 13‐3738

UNITED STATES OF AMERICA,

Plaintiff‐Appellant,

v.

ALL FUNDS ON DEPOSIT WITH R.J. O’BRIEN &

ASSOCIATES, HELD IN THE NAME OF BRIDGE

INVESTMENT, S.L., BEARING ACCOUNT NUMBERS

XXX‐X3931 AND XXX‐X1784, MAINTAINED AT

HARRIS BANK, ACCOUNT NUMBER XXX‐171‐6,

                                                                              Defendant,

ONE BEACON INS. CO., et al.,                                                          

                                                                                            Claimants‐Appellees.

_____________________________

ART INSURANCE CO., et al.,                                            

                                                                           Plaintiffs‐Appellees,

v.  

AL QAEDA                                                                         

                                                                                          Defendant.

APPEAL OF: UNITED STATES OF AMERICA

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2 Nos. 13‐3732 & 13‐3738

Appeals from the United States District Court for the  

Northern District of Illinois, Eastern Division.

Nos. 1:11‐cv‐04175 & 1:12‐cv‐01346 — Matthew F. Kennelly, Judge.  

ARGUED SEPTEMBER 11, 2014 — DECIDED APRIL 2, 2015

Before BAUER, MANION, and KANNE Circuit Judges.

KANNE, Circuit Judge. Heinous acts of terror breached the

shores of the Nation on September 11, 2001. Approximately

3,000 innocents lost their lives, affecting countless other per‐

sons, communities, and businesses. In the aftermath of that

tragic day, Congress sought to provide victims with a work‐

able means to recover their losses. So it passed the Terrorism

Risk Insurance Act (“TRIA”) of 2002, a sweeping statute that

authorizes execution on blocked assets that are seized or fro‐

zen by the United States, in satisfaction of judgments against

terrorists.

That statute is the focus of this dispute. Were this Court

bound by TRIA’s noble purpose alone, our judgment, no

doubt, would be favorable to Appellees. They are victims of

terror, after all, and they hold a judgment against al Qaeda

for their $2.5 billion subrogation claims. But a statute’s pur‐

pose, no matter how noble or just, cannot defy the unambig‐

uous and plain meaning of its text.  

TRIA’s text, on at least two key points, is quite plain: (1)

the only assets subject to execution are blocked assets; and

(2) assets that are subject to a United States Government

(“USG”) license for final payment, transfer, or disposition,

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Nos. 13‐3732 & 13‐3738 3

among other requirements, do not qualify as blocked assets.

Because the defendant funds here are subject to such a li‐

cense and have been arrested for civil forfeiture, they do not

qualify as blocked assets under TRIA. Appellees’ claims un‐

der TRIA therefore must fail. Although we find Appellees

possess both constitutional and statutory standing, we nev‐

ertheless vacate the district court’s grant of summary judg‐

ment in favor of Appellees. Appellees cannot prevail on the

merits under TRIA.

I. BACKGROUND

Muhammad Abdallah Abdan Al Ghamdi, also known as

Abu al Tayyeb (“al Tayyeb”), provided financial and mili‐

tary support for al Qaeda. Specifically, he raised money for

al Qaeda’s operations and managed its supply chain in Kan‐

dahar, Afghanistan. His criminal network included, among

others, Osama Bin Laden, Khalid Sheik Mohammed, and

three individuals who participated in the September 11 at‐

tacks.

Beginning in 2003 and continuing through 2005, al

Tayyeb invested a large sum of cash with R.J. O’Brien & As‐

sociates (“RJO”), a financial firm in Chicago. Under the

name “Bridge Investments,” and with the assistance of Mo‐

hammad Qasim al Ghamdi (who served as general manager

of the account), al Tayyeb invested over $26,000,000 in fu‐

tures trading accounts with RJO. Notably, al Qaeda had a

beneficial interest in these accounts.  

In less than a year, though, the accounts lost nearly

eighty‐percent of their value. They dwindled to just over

$6,000,000.  

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4 Nos. 13‐3732 & 13‐3738

For al Tayyeb, matters only got worse. Saudi Arabian au‐

thorities arrested him in June 2006, thwarting his plans to

attack Saudi Arabia and the United States. Then, on June 18,

2006, the U.S. Department of the Treasury (“DOT”), Office of

Foreign Assets Control (“OFAC”), blocked his RJO invest‐

ments—then totaling $6,226,355—pending investigation. In

procuring the block, OFAC exercised its authority under Ex‐

ecutive Order 13224 of September 23, 2001, the International

Emergency Economic Powers Act, Title 50, United States

Code, Section 1701 et seq., and the Global Terrorism Sanc‐

tions Regulations, 31 Code of Federal Regulations, Part 594.

On June 19, 2011, while the funds were still blocked, the

United States filed a verified complaint in the Northern Dis‐

trict of Illinois seeking forfeiture of the funds under 18

U.S.C. § 981(a)(1)(G)(I), (iv).1 That complaint was the catalyst

for this dispute. It revealed the existence of al Tayyeb’s

blocked funds, which, until that time, had been designated

as classified by the United States. The press soon caught

wind; one newspaper ran a story on the defendant funds

within three days. See Annie Sweeney, Al‐Qaida figure invest‐

ed with Chicago firm, Chicago Tribune, June 22, 2011, at 1:5.

Claimants‐Appellees (“Appellees”) took notice.

Appellees are comprised of groups of insurance compa‐

nies that paid more than $2.5 billion in property‐damage and

                                                 

1 This statute renders “all assets, foreign or domestic ... of any individu‐

al, entity, or organization engaged in planning or perpetrating” acts of

terrorism either against the United States and its citizens or against for‐

eign governments subject to civil forfeiture. 18 U.S.C. § 981 (a)(1)(G)(I),

(iv). Section 983 of Title 18 provides the “[g]eneral rules for civil forfei‐

ture proceedings[,]” a relevant section that we address below.

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Nos. 13‐3732 & 13‐3738 5

business‐interruption claims following the September 11 at‐

tacks. After learning of al Qaeda’s ties to the defendant

funds, Appellees filed their own verified claims to the funds.

They cited as their interest a “default judgment as to liabil‐

ity” award issued in their favor (and against al Qaeda) by

the Southern District of New York.

Some further background is necessary. Appellees, along

with several thousand personal‐injury plaintiffs who form a

party to the In re Terrorist Attacks Upon the United States mul‐

ti‐district litigation, initially filed tort claims against al

Qaeda for the September 11 attacks in the Southern District

of New York. That litigation lingered for some time as, un‐

surprisingly, al Qaeda did not enter an appearance or try to

contest the claims. Eventually, on April 7, 2006, the Southern

District of New York entered a default judgment as to liabil‐

ity against al Qaeda, holding it liable for the September 11

attacks. It was this order that Appellees cited as giving them

an interest in the defendant funds.

In any event, after Appellees filed their verified claims

contesting forfeiture in the Northern District of Illinois, the

personal injury plaintiffs got involved. They moved to inter‐

vene in the forfeiture action under Rule 24 of the Federal

Rules of Civil Procedure.

With the filing of all these claims, two related cases were

born: the original forfeiture action in which the United States

sought forfeiture of al Tayyeb’s assets (i.e., the defendant

funds) and the later enforcement action in which Appellees

sought to execute their judgment against those same funds.

Both cases are before us on appeal. We return to the topic of

Appellees’ verified claims.

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6 Nos. 13‐3732 & 13‐3738

Appellees’ initial claimed interest in the defendant funds

rested on tenuous ground. For although the Southern Dis‐

trict of New York held al Qaeda liable for Appellees’ dam‐

ages, its April 7, 2006, order did not say for how much. In

short, the New York judgment was incomplete. That fact did

not change until January 25, 2012, when the Clerk of Court

for the Southern District of New York entered final judg‐

ment in the amount of $9,351,247,959.99. We note that the

death of the original MDL judge played a significant role in

the delay of entering final judgment, a fact that is relevant to

our later discussion concerning Appellees’ motion for leave

to amend.  

After Appellees filed their verified claims in the Northern

District of Illinois but before they registered their final

judgment against al Qaeda in the Southern District of New

York, the United States moved to strike their claims and an‐

swers in the Northern District of Illinois. In its view, Appel‐

lees lacked the requisite ownership and legal interest in the

defendant funds to participate in the forfeiture proceedings

because their judgment against al Qaeda was not final and

because they secured no lien against the defendant funds.  

The Northern District of Illinois initially agreed. It held

that Appellees failed to satisfy their pleading obligations

under both Rule G(5)(a)(i)(B) of the Supplemental Rules for

Admiralty or Maritime Claims and Asset Forfeiture Actions

and the related civil forfeiture statute, 18 U.S.C.

§ 983(a)(2)(C)(ii). Labeling Appellees “general unsecured

creditor[s],” the district court found that they could not es‐

tablish their interest in the property to be forfeited. United

States v. All Funds on Deposit with R.J. O’Brien & Assocs., No.

11 C 4175, 2012 U.S. Dist. LEXIS 41309, at *17 (N.D. Ill. Mar.

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Nos. 13‐3732 & 13‐3738 7

27, 2012) (“R.J. O’Brien I”). As a result, Appellees lacked

statutory and prudential standing.2

  

After making those key findings, the Northern District of

Illinois (1) granted the motion to strike and (2) denied the

personal injury claimants’ motion to intervene. It also denied

Appellees’ motion for leave to amend their complaint, rea‐

soning that because Appellees had not yet secured a lien

against the defendant funds, any amendment could not cure

the statutory standing defect. In a significant footnote, how‐

ever, the district court offered a life raft to Appellees:

The [c]ourt need not consider whether they legally

can serve a citation at this time or, if so, whether it

would be appropriate then to allow the insurance

claimants to amend their claims. Similarly, the [c]ourt

need not consider the effects of [the] Terrorism Risk

Insurance Act of 2002 ... on the claimants’ ability to

execute their judgments against the property at issue.

R.J. O’Brien I, 2012 U.S. Dist. LEXIS 41309, at *23 n.1.

Accepting the life raft, Appellees quickly served on the U.S.

Marshals Service a citation to discover assets. The United

States moved to quash. The district court denied the motion

to quash and issued a writ of execution. Recognizing Appel‐

lees’ changed circumstances (namely, their lien), the court

found Appellees possessed statutory and prudential stand‐

ing. It also found that any procedural hurdles to standing—

imposed by the civil forfeiture statute, see 18 U.S.C. § 983—

                                                 

2 The district court did not address the issue of constitutional standing at

the time it rendered this decision.

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8 Nos. 13‐3732 & 13‐3738

were superseded by TRIA’s “[n]otwithstanding any other

provision of law” (“notwithstanding”) clause. United States

v. All Funds on Deposit with R.J. O’Brien & Assocs., 892 F.

Supp. 2d 1038, 1050–53 (N.D. Ill. 2012) (“R.J. O’Brien II”). The

district court then permitted Appellees to amend their

claims to reflect their perfected lien on the defendant funds.3

Id. at 1053. And the litigation marched forward.

The United States moved to certify the district court’s de‐

cision for interlocutory appeal. It lost. See United States v. All

Funds on Deposit with R.J. O’Brien & Assocs., Nos. 11 C 4175 &

12 C 1346, 2012 U.S. Dist. LEXIS 189345, at *11 (N.D. Ill. Dec.

12, 2012) (“R.J. O’Brien III”). The parties then filed cross mo‐

tions for summary judgment. In its motion, the United States

renewed its standing arguments.4

Appellees, for their part, relied on TRIA. In their view,

that statute prioritizes their interest in the defendant funds,

even in the face of a government forfeiture action. Addition‐

ally, Appellees argued that the “notwithstanding” clause

supersedes the procedural oddities of civil forfeiture law.

Invoking the purpose and intent of TRIA, Appellees finally

argued that the defendant funds should be subject to execu‐

tion to satisfy their judgment against al Qaeda. The district

                                                 

3 This time, the district court addressed the issue of constitutional stand‐

ing; it held they had it. R.J. O’Brien II, 892 F. Supp. 2d at 1049.

4 The United States also argued Appellees could not execute their judg‐

ment against the defendant funds because TRIA did not waive the sov‐

ereign immunity of the United States, an argument it raises again on ap‐

peal. For reasons discussed below, we need not address this precise issue

here.

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Nos. 13‐3732 & 13‐3738 9

court agreed with Appellees’ interpretation of TRIA. It

granted summary judgment in their favor.  

Importantly, the district court did so based on the critical

assumption that the defendant funds remained blocked at

the time the parties moved for summary judgment. “[I]t is

undisputed,” the district court noted, “that the assets in

question are ‘blocked,’ a status that is essential for a TRIA

claim to go forward; the government labeled the assets as

such in its complaint.” United States v. All Funds on Deposit

with R.J. O’Brien & Assocs., 982 F. Supp. 2d 830, 844 (N.D. Ill.

2013) (“R.J. O’Brien IV”) (emphasis added).  

But six months before the Southern District of New York

had entered final judgment in Appellees’ favor, and more

than two years before the Northern District of Illinois issued

its decision in favor of Appellees, OFAC granted a license to

the Department of Justice (“DOJ”) on July 8, 2011. That li‐

cense permitted the DOJ to “take all necessary actions in fur‐

therance of the ... pursuit of [the] civil forfeiture of the [de‐

fendant funds].” Gov’t App’x L.A. 272, ¶ 20. Four days after

OFAC granted the license, the Northern District of Illinois

granted the United States’ application for warrants of arrest

in rem for the defendant funds. The United States executed

the warrants on July 12, 2011, and took possession of the

funds that same day.

Herein lies the rub. TRIA provides in pertinent part:

Blocked asset.—The term ‘blocked asset’ means—  

(A) any asset seized or frozen by the United States

under section 5(b) of the Trading With the Enemy Act

... or under sections 202 and 203 of the International

Emergency Economic Powers Act ... and

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10 Nos. 13‐3732 & 13‐3738

(B) does not include property that—

(i) is subject to a license issued by the United

States Government for final payment, transfer, or dis‐

position by or to a person subject to the jurisdiction of

the United States in connection with a transaction for

which the issuance of such license has been specifical‐

ly required by statute other than the International

Economic Powers Act ... or the United Nations Partic‐

ipation Act of 1945 ... .

Pub. L. No. 107‐297, § 201(d)(2) 116 Stat. 2322, 2339–40 (codi‐

fied as a note to 28 U.S.C. § 1610) (emphasis added).

The Northern District of Illinois recognized the existence

of the license in its decision (it was stipulated by all parties

to be an undisputed fact), but it nonetheless treated the

funds as if they remained blocked. See R.J. O’Brien IV, 982 F.

Supp. 2d at 839‐40. As we noted before, whether the funds

are blocked is the decisive issue. That is because, per TRIA’s

text, victims of terror may only execute on “blocked” funds.

We address this issue in detail below.

Before doing so, however, we address the standing ar‐

guments again raised by the United States. These are thresh‐

old issues. Cf. United States v. $304,980.00 in United States

Currency, 732 F.3d 812, 818 (7th Cir. 2013) (“[W]ithout a case

or controversy under Article III, we have no authority to

proceed to the merits.”).

II. ANALYSIS

A. Standing  

Whether constitutional, statutory, or prudential in form,

standing is a question of law that we review de novo. Winkler

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Nos. 13‐3732 & 13‐3738 11

v. Gates, 481 F.3d 977, 982 (7th Cir. 2007). We begin our anal‐

ysis with a discussion of constitutional standing.

1. Constitutional Standing

Standing under Article III “is a threshold question in eve‐

ry federal case ... .” Warth v. Seldin, 422 U.S. 490, 498 (1975).

“A federal court’s jurisdiction can be invoked only ... when

the plaintiff ... has suffered ‘some threatened or actual injury

resulting from the putatively illegal action[.]’” Id. at 499

(quoting Linda R. S. v. Richard D., 410 U.S. 614, 617 (1943)).

Although we have described standing as “undemanding,”

Family & Children’s Ctr., Inc. v. School City of Mishawaka, 13

F.3d 1052, 1058 (7th Cir. 1994), neither intellectual curiosity

nor purely psychological harm suffices to establish it. United

States v. 5 S 351 Tuthill Rd, Naperville, Ill., 233 F.3d 1017, 1022

(7th Cir. 2000) (“Similarly, simple indignation, or an impact

on one’s opinions, aspirations or ideology do not suffice to

establish standing.”) (citations and internal quotations omit‐

ted).  

Claimants establish constitutional standing in a forfeiture

proceeding just as they would in any other proceeding. They

must allege (1) an immediate threat of injury that is (2) fairly

traceable to the government’s conduct, and (3) which a fa‐

vorable federal court decision likely would redress or reme‐

dy. Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561–

62 (1992)).

Importantly, “a claimant need not ‘establish that a right

of his has been infringed; that would conflate the issue of

standing with the merits of the suit.’” $304,980.00 in United

States Currency, 732 F.3d at 818 (quoting Aurora Loan Servs.,

Inc. v. Craddieth, 442 F.3d 1018, 1024 (7th Cir. 2006)). A claim‐

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12 Nos. 13‐3732 & 13‐3738

ant need only establish “a colorable claim to such a right.” Id.

(emphasis in original). A colorable claim, we emphasize, is

merely an arguable one. Underscoring this low bar, we have

described it as “one that is not frivolous.” S. Ill. Carpenters

Welfare Fund v. Carpenters Welfare Fund, 326 F.3d 919, 923 (7th

Cir. 2003) (citing Nuema, Inc. v. AMP, Inc., 259 F.3d 864, 878

(7th Cir. 2001)).  

Here, Appellees allege an immediate and actual threat of

injury that is far from frivolous—the impending forfeiture of

seized terrorist funds to which they have an arguable claim.

TRIA, the source of that claim, provides in pertinent part:

Notwithstanding any other provision of law ... in

every case in which a person has obtained a judgment

against a terrorist party on a claim based upon an act

of terrorism, or for which a terrorist party is not im‐

mune ... the blocked assets of that terrorist party (in‐

cluding the blocked assets of any agency or instru‐

mentality of that terrorist party) shall be subject to ex‐

ecution or attachment in aid of execution in order to

satisfy such judgment to the extent of any compensa‐

tory damages for which such terrorist party has been

adjudged liable.

Pub. L. No. 107‐297, 201(a), 116 Stat. 2322, 2337 (codified as a

note to 28 U.S.C. § 1610).

Appellees fit within this ambit. They are victims of ter‐

rorism who hold an unsatisfied judgment against al Qaeda, a

terrorist party, in the amount of $9,351,247,959.99. That sum

flows from al Qaeda’s September 11 attacks, which harmed

Appellees by causing them to compensate their insured for

massive property‐damage and business‐interruption claims.

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Nos. 13‐3732 & 13‐3738 13

To be sure, the specific defendant funds at issue belonged to

al Tayyeb. But he was a key member of al Qaeda, a named

terrorist party who both parties agree holds a beneficial in‐

terest in the defendant funds.  

Collectively, these facts are sufficient to formulate Appel‐

lees’ arguable claim to the defendant funds. Cf. John G. Rob‐

erts, Jr., Comment: Article III Limits on Statutory Standing, 42

Duke L.J. 1219, 1228 (1993) (“Article III injury may exist sole‐

ly by virtue of statutes creating legal rights, the invasion of

which creates standing.”) (internal quotations and citations

omitted).

The United States disagrees. It argues that Appellees’

threat of injury is too speculative to establish constitutional

standing. It is wrong. Appellees are akin to the claimant in 5

S 351 Tuthill Rd. There, a beneficiary of a land trust chal‐

lenged the government’s attempt to forfeit the land that was

the subject of the trust. Id. at 1021. We found that he pos‐

sessed standing, as the forfeiture action would have de‐

prived him of proceeds from the future sale of the land. Id. at

1024. Even though the value of those land proceeds was un‐

known—we noted the possibility of a “peppercorn” valua‐

tion—the plaintiff could bring his claim because the poten‐

tial harm was “more than intellectual, psychological or ideo‐

logical.” Id. at 1021–22.  

So it is here. Appellees secured a default judgment as to

liability against al Qaeda before the United States com‐

menced its forfeiture action. That their judgment had not yet

been reduced to a monetary sum by the time they filed their

verified claims does not render their threat of injury specula‐

tive or any less real. Should Appellees not prevail below,

their harm, like the harm to the claimant in 5 S 351 Tuthill

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14 Nos. 13‐3732 & 13‐3738

Rd., would be more than intellectual, psychological, or ideo‐

logical. It would be financial, worth far more than the pep‐

percorn we conjured in 5 S 351 Tuthill Rd. And although the

fraction at stake may be small—$6 million is but a tiny mor‐

sel of their billions in damages—the harm is nonetheless

concrete.

Turning from the threat of injury (standing factor one) to

traceability and availability for redress (standing factors two

and three), these funds would redress Appellees’ multi‐

billion‐dollar losses sustained in the aftermath of the Sep‐

tember 11 attacks. The potential harm derived from the for‐

feiture of the funds is fairly—and in this case, directly—

traceable to the United States’ conduct, particularly given

the United States’ verified complaint for forfeiture. And fi‐

nally, a favorable federal court decision would afford Appel‐

lees the long‐awaited opportunity to commence satisfaction

(however partial) of their judgment against al Qaeda. Each

factor having been satisfied, we find Appellees possess con‐

stitutional standing. There is a case or controversy before us.

U.S. Const. art. III, § 2.

2. Statutory Standing under TRIA

Even though Appellees possess constitutional standing,

we may nevertheless decline to hear this case if Appellees do

not “fall within the zone of interests protected by the law in‐

voked.” Allen v. Wright, 468 U.S. 737, 751 (1984). This is a

question of statutory standing, Lexmark Int’l, Inc. v. Static

Control Components, Inc., 134 S. Ct. 1377, 1386–87 (2014), and

we address it now.

TRIA plainly contemplates this type of action. Congress

passed this statute to provide victims of terror, like Appel‐

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Nos. 13‐3732 & 13‐3738 15

lees, with a workable means to recover their losses. We need

not resort to legislative history to deduce this conclusion;

TRIA’s preamble states it is designed “[t]o ensure the con‐

tinued financial capacity of insurers to provide coverage for

risks from terrorism.” Pub. L. No. 107‐297. And that is what

Appellees are trying to do—recover their significant finan‐

cial losses caused by al Qaeda’s September 11 attacks. Such

recovery would ensure their continued financial capacity,

while incentivizing grants of much needed coverage for to‐

day’s terrorism‐related risk. We hold that Appellees are

therefore within the zone of interests that TRIA protects.

Our zone‐of‐interests inquiry ordinarily would be con‐

fined to one statute. See Air Conf. v. Am. Postal Workers Union,

498 U.S. 517, 523–24 (1991) (“[T]he plaintiff must establish

that the injury he complains of (his aggrievement, or the ad‐

verse effect upon him) falls within the ‘zone of interest’

sought to be protected by the statutory provision whose vio‐

lation forms the legal basis for his complaint.”) (emphasis in

original). But this is no ordinary case. Because this appeal

involves two actions, both of which implicate rules of forfei‐

ture, we must also determine whether Appellees fall within

the zone of interests protected by 18 U.S.C. § 983.

3. Statutory Standing under Civil Forfeiture

To establish statutory standing in a civil forfeiture pro‐

ceeding, a claimant must adhere to the procedural require‐

ments set forth in the Supplemental Rules for Admiralty or

Maritime Claims and Asset Forfeiture Actions. See United

States v. $487,825 in U.S. Currency, 484 F.3d 662, 664–65 (3d

Cir. 2007). These pleading requirements exist to “force

claimants to come forward as quickly as possible after the

initiation of forfeiture proceedings, so that the court may

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16 Nos. 13‐3732 & 13‐3738

hear all interested parties and resolve the dispute without

delay, and to minimize the danger of false claims by requir‐

ing claims to be verified or solemnly affirmed.” United States

v. $8,221,877.16 in United States Currency, 330 F.3d 141, 150

n.9 (3d Cir. 2003) (internal quotation marks and citations

omitted).

Here, the procedural requirements at issue are filing

deadlines and interest statements concerning the defendant

funds. See generally Fed. R. Civ. P. Supp. R. G(5). Additional‐

ly, the United States argues that Appellees are not innocent

owners—an affirmative defense “to the confiscation of assets

of suspected international terrorists ... .”5 18 U.S.C.

§ 987(a)(2). According to the United States, these deficiencies

keep Appellees outside civil forfeiture’s zone of interest.

To begin, a claimant has sixty days after the United States

commences a forfeiture proceeding to assert an interest in

the defendant property, provided the United States pub‐

lished notice of its forfeiture proceeding “on an official in‐

ternet government forfeiture site.” Fed. R. Civ. P. Supp. R.

G(a)(ii)(B). If the United States failed to send direct notice to

a claimant or his attorney, two additional provisions also al‐

low for a sixty‐day filing deadline. Fed. R. Civ. P. Supp. R.

G(a)(ii)(C)(1)–(2). Rule G further requires a claimant to state

his interest in the property subject to forfeiture. A claimant

                                                 

5 The district court treated innocent ownership as an issue concerning

prudential standing. But in more than one location, the civil forfeiture

statute expressly provides for the defense of innocent ownership. See 18

U.S.C. §§ 983(d)(1)–(3), 987(a)(2). Accordingly, we discuss it as a matter

of statutory standing.

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Nos. 13‐3732 & 13‐3738 17

who asserts an interest in the defendant funds must identify

the specific property claimed, identify the claimant, and

state the claimant’s interest in the property. Fed. R. Civ. P.

Supp. R. G(a)(i)(A)–(B).

The United States does not quibble with Appellees’ orig‐

inal filing date. Appellees filed their initial claims on August

19, 2011, sixty days after the United States commenced its

forfeiture action. Instead, the United States takes issue with

Appellees’ amended verified claims. These claims, it argues,

“were more than seven months delinquent.” (Appellant’s Br.

29.) In making this argument, of course, the United States

keeps Appellees’ filing clock running, discounting entirely

the filing of their original verified claims and the district

court’s order permitting Appellees to amend those claims.

We do not accept this tally of time. The district court act‐

ed within its discretion when it allowed Appellees to amend

their claims. See United States v. U.S. Currency, in the amount

of $103,387.27, 863 F.2d 555, 563 (7th Cir. 1988). Having been

granted a motion to amend their verified claims, Appellees

did not offend the filing deadlines.

As for Appellees’ stated claims of interest, it is undisput‐

ed that Appellees missed the mark when they initially filed

their claims. The district court correctly noted that, without

either a final judgment entered or lien secured, Appellees

were nothing more than “general unsecured creditors” when

they first filed their claims. But once again, the district court

acted within its discretion when it allowed Appellees to

amend their claims.  

As to this point, we remind the United States that the

Federal Rules of Civil Procedure are always in play, even in

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
18 Nos. 13‐3732 & 13‐3738

the midst of civil forfeiture actions. See $8,221,877.16 in Unit‐

ed States Currency, 330 F.3d at 149 (“Parties to civil forfeiture

proceedings are the servants of two procedural masters: the

Supplemental Rules devised for ... in rem proceedings, and

the generally applicable Federal Rules of Civil Procedure.”).

Rule 15 expressly provides that a “court should freely give

leave [to amend a pleading] when justice so requires.” Fed.

R. Civ. P. 15(a)(1)(2).  

We find that justice required that the court grant Appel‐

lees leave to amend. By keeping the defendant funds classi‐

fied, and therefore secret, until the moment it commenced its

forfeiture action, the United States made it nearly impossible

for Appellees to satisfy their pleading requirements under

Rule G. Appellees had little if any time to secure a lien and

perfect their interest by the time the funds were made pub‐

lic. Worse, the original MDL judge died, greatly lengthening

the time it took for the Southern District of New York to en‐

ter final judgment in favor of Appellees (and against al

Qaeda). Understanding these unusual facts, and recognizing

the flattening effect of TRIA’s “notwithstanding” clause (dis‐

cussed below), the district court properly exercised its dis‐

cretion and permitted Appellees to amend their claims. As a

result, this procedural requirement, like the filing deadline

requirement, poses no bar to Appellees’ statutory standing

under civil forfeiture.

That leaves us with innocent ownership. Innocent own‐

ership is a defense to civil forfeiture. 18 U.S.C. § 983(d)(1); see

also United States v. Bakjakajian, 524 U.S. 321, 332 (1998) (not‐

ing “forfeiture ... cannot be imposed upon innocent own‐

ers.”). It prevents civil forfeiture so long as a claimant can

prove by a preponderance of the evidence that “he did not

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Nos. 13‐3732 & 13‐3738 19

know about or consent to the illegal use” of the property

subject to forfeiture. 5 S Tuthill Rd., 233 F.3d at 1026; see also

18 U.S.C. § 983(d)(1), (2)(A)(ii) (noting the defense is also

triggered when, “upon learning of the conduct ... [the

claimant] did all that reasonably could be expected under

the circumstances to terminate such use of the property”). In

the terrorism‐forfeiture context, “[a]n owner of property that

is confiscated under any provision of law ... may ... assert[]

as an affirmative defense that the innocent owner provisions

of section 983(d) of title 18, United States Code, apply to the

case.” 18 U.S.C. § 987(a)(2).

The United States argues that Appellees cannot satisfy

this requirement. As a result, the argument goes, Appellees

fall outside the zone of interests protected by civil forfeiture

and do not satisfy statutory standing.

We have observed that “a rather expansive zone of inter‐

ests is protected by the innocent ownership provision” of

forfeiture law. 5 S 351 Tuthill Rd., 233 F.3d at 1023 (quoting

United States v. U.S. Currency, $81,000, 189 F.3d 28, 34 (1st

Cir. 1999)). The problem for Appellees is that, despite this

expansive zone, innocent ownership only applies to two

types of claimants: (1) those who enjoyed an ownership in‐

terest in the property at the time of the event triggering for‐

feiture; and (2) those who acquired an ownership interest in

the property after the triggering event as bona fide purchas‐

ers or sellers for value (“BFPV”) without knowledge that the

funds were subject to forfeiture. See 18 U.S.C.

§§ 983(d)(2)(A), (3)(A). Neither of those applies here.

Regarding the first definition, al Tayyeb deposited his

funds beginning in 2003 and continuing through 2005. As‐

suming for the sake of argument that Appellees’ default

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20 Nos. 13‐3732 & 13‐3738

judgment as to liability against al Qaeda was sufficient for

them to acquire an ownership interest in the defendant

funds, the Southern District of New York did not issue that

order until April 7, 2006, a date that comes well after al

Tayyeb’s deposits with RJO ceased.

That means qualifying as BFPVs is the only way for Ap‐

pellees to satisfy the affirmative‐defense requirement and

enter the zone of interests protected by the statute. Appel‐

lees, however, cannot do that. Although Appellees acquired

their interest in the defendant funds after the acts giving rise

to the forfeiture occurred, they did not purchase or sell any‐

thing. They simply seek to recover their losses, an impossi‐

ble goal under this statutory regime. The civil forfeiture

statute does not contemplate that kind of relief. Without

some mechanism that enables Appellees to overcome this

final obstacle, Appellees would be unable to participate in

the forfeiture proceeding.

i. The Mechanism ‐ TRIA

Innocent ownership brings us, at long last, to TRIA. We

find TRIA’s broad “notwithstanding” clause supersedes the

innocent ownership requirement of civil forfeiture. Put dif‐

ferently, it cures Appellees’ standing defect under civil for‐

feiture law. Several reasons compel our conclusion. First and

foremost, once the United States commences a forfeiture ac‐

tion, it is impossible for qualified albeit unrelated victims of

terror (here, the insurance companies) to comply with civil

forfeiture’s innocent owner requirement and, at the same

time, execute against the blocked funds. This conflict re‐

quires the innocent owner provision to yield in the face of

TRIA’s broad “notwithstanding” clause. A clause, we em‐

phasize, that expressly permits Appellees or any person who

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Nos. 13‐3732 & 13‐3738 21

“has obtained a judgment against a terrorist party on a claim

based upon an act of terrorism,” to execute on, or attach in

aid of execution on, the blocked funds of the terrorist party

to satisfy their judgment, “[n]otwithstanding any other provi‐

sion of law[.]” Pub. L. No. 107‐297, § 201(a), 116 Stat. 2322,

2377 (emphasis added).

We have recognized the potent power of a “notwith‐

standing” clause before. See Joren v. Napolitano, 633 F.3d

1144, 1146 (7th Cir. 2010) (“[T]he use of a “notwithstanding”

clause signals Congressional intent to supercede conflicting

provisions in any other statute.”) (citing Cisneros v. Alpine

Ridge Grp., 508 U.S. 10, 18 (1993)) (emphasis added). Where a

“notwithstanding” clause is cabined by terms limiting its

scope, we have recognized those limits as well. See Citizens

Elec. Corp. v. Bituminous Fire & Marine Ins. Co., 68 F.3d 1016,

1019 (7th Cir. 1995) (finding the “notwithstanding” clause of

CERCLA, 42 U.S.C. § 9607(a), refers only to substantive lia‐

bility and therefore has limited applicability) (citations omit‐

ted). In TRIA, there are no terms that limit this clause’s

scope.

To the contrary, words of broad application bookend

TRIA’s “notwithstanding” clause. The statute reads in perti‐

nent part: “In general.—Notwithstanding any other provision

of law ... in every case in which a person has obtained a

judgment ... .” Pub. L. No. 107‐297, § 201(a), 116 Stat. 2322,

2377 (emphasis added). The only textual limitation to this

broad power is found in subsection (b), which provides for

discretionary presidential waivers, on an asset‐by‐asset ba‐

sis, when the property is “subject to the Vienna Convention

on Diplomatic Relations or the Vienna Convention on Con‐

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22 Nos. 13‐3732 & 13‐3738

sular Relations.” Id. But neither party contends that subsec‐

tion applies here.

For all these reasons, the district court correctly relied on

TRIA in finding that Appellees could proceed with their

claims notwithstanding the conflicting provisions of civil

forfeiture. Forfeiture’s standing requirements cannot over‐

come TRIA’s sweeping mechanism for recovery. In so hold‐

ing, we pass no judgment on the merits of Appellees’ claims

under TRIA.6 For that substantive issue is discussed below.

At this point, we simply open the doors for Appellees to en‐

ter the courthouse.

Fighting this conclusion, the United States asks us to

adopt what it views as persuasive precedent from the Fifth

Circuit. See generally United States v. Holy Land Found. for Re‐

lief and Dev., 722 F.3d 677 (5th Cir. 2013) (“Holy Land”). While

that case is instructive, particularly on the status of re‐

strained funds subject to an OFAC license, we are uncon‐

vinced that the Fifth Circuit reads the “notwithstanding”

clause more narrowly than we do.  

In Holy Land, the court held TRIA’s “notwithstanding”

clause “does not trump” provisions of the criminal forfeiture

statute, 21 U.S.C. § 853, a statute similar to its civil counter‐

part. Id. at 687. But the Fifth Circuit rendered this holding in

response to arguments that boldly contravened the plain text

of TRIA. Id. Specifically, the claimants there argued that

TRIA superseded provisions within itself, rendering the

                                                 

6 In particular, we assume at this stage of our analysis that Appellees

have a viable (i.e., not frivolous) case that the funds remain blocked and

subject to attachment under TRIA.

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13‐3732 & 13‐3738 23

“blocked assets” requirement of the statute unnecessary. In

rejecting this argument, the Fifth Circuit reasoned:

The presence of the “notwithstanding” clause does

not alter our responsibility to abide by the definitions

provided by Congress in the same statute. Our role in

interpreting the TRIA is to “[g]ive effect to the text

congress enacted,” not to “rewrite the statute to re‐

flect a meaning we deem more desirable.”

Id. at 688 (quoting Ali v. Fed. Bureau of Prisons, 552 U.S. 214,

228 (2008)). Appellees make no such argument here. In fact,

their argument rests on the assumption that the defendant

funds remain blocked—the same assumption adopted by the

district court when it granted summary judgment in their

favor. Accordingly, we do not find Holy Land to be persua‐

sive on the scope of TRIA’s “notwithstanding” clause.

Having found that Appellees possess both constitutional

and statutory standing, we now proceed to the merits of

their case under TRIA. Appellees’ claims rise and fall with

the text of that statute.

B. The Status of the Defendant Funds under TRIA

The “cardinal canon” of statutory interpretation is that

we look first to the text of the statute. Conn. Nat’l Bank v.

Germain, 503 U.S. 249, 253 (1992) (“[C]ourts must presume

that a legislature says in a statute what it means and means

in a statute what it says”); see also 2A N. Singer, Sutherland

Statutory Construction § 46.03, at 82 (4th ed. 1984) (“What a

legislature says in the text of a statute is considered the best

evidence of the legislative intent or will.”). When a statute is

unambiguous, our inquiry starts and stops at the text. Suesz

v. Med‐1 Solutions, LLC, 757 F.3d 636, 659 (7th Cir. 2014) (en

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
24 Nos. 13‐3732 & 13‐3738

banc) (Kanne, J., dissenting) (“Absent ambiguity, the first

canon [of statutory interpretation] is also the last: ‘judicial

inquiry is complete.’”) (citation omitted).

Here, the relevant text of the statute is unambiguous. For

ease of reference, we replicate it once more:

Notwithstanding any other provision of law, and ex‐

cept as provided in subsection (b) [of this note], in

every case in which a person has obtained a judgment

against a terrorist party on a claim based upon an act

of terrorism, or for which a terrorist party is not im‐

mune under section 1605A or 1605(a)(7) ... the blocked

assets of that terrorist party (including the blocked as‐

sets of any agency or instrumentality of that terrorist

party) shall be subject to execution or attachment in

aid of execution in order to satisfy such judgment to

the extent of any compensatory damages for which

such terrorist party has been adjudged liable.

Pub. L. No. 107‐297, § 201(a), 116 Stat. 2322, 2337 (emphasis

added).  

By its terms, TRIA allows victims of terror to execute on‐

ly on blocked assets. This point is beyond dispute. See Minis‐

try of Defense and Support for the Armed Forces of the Islamic Re‐

public of Iran v. Elahi, 556 U.S. 366, 374 (2009) (observing that

TRIA permits “a person with a terrorism‐related judgment

to attach an asset ... provided the asset was a “blocked asset”)

(emphasis added); Estate of Heiser v. Islamic Republic of Iran,

807 F. Supp. 2d 9, 18 n.6 (D.D.C. 2011) (“The TRIA ... applies

only to blocked assets”).

Relevantly then, TRIA defines blocked assets as:

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Nos. 13‐3732 & 13‐3738 25

(A) any asset seized or frozen by the United States under

section 5(b) of the Trading With the Enemy Act ... or

under sections 202 and 203 of the International Emer‐

gency Economic Powers Act ... and

(B) does not include property that—

(i) is subject to a license issued by the United States

Government for final payment, transfer, or disposi‐

tion by or to a person subject to the jurisdiction of the

United States in connection with a transaction for

which the issuance of such license has been specifical‐

ly required by statute other than the International

Economic Powers Act ... or the United Nations Partic‐

ipation Act of 1945 ... .

Pub. L. No. 107‐297, § 201(d)(2), 116 Stat. 2322, 2339–40 (em‐

phasis added). It is this section that engenders strong dis‐

pute between the parties.

According to Appellees, despite the fact that OFAC is‐

sued a license to the DOJ to “take all necessary actions in

furtherance of the ... pursuit of [the] civil forfeiture of the

[defendant funds],” the defendant funds remain blocked

within the meaning of TRIA. That the funds have also been

arrested does nothing to change this status, they argue. Their

first argument in support of this conclusion rests, in part, on

the verified complaint filed by the United States. There, the

United States admitted that OFAC blocked the defendant

funds on June 18, 2006. Secondarily, Appellees rely on the

fact that the district court treated the defendant funds as

blocked in its opinion below.

To the extent that this argument sounds in law‐of‐the‐

case doctrine, we reject it. That the United States or the dis‐

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26 Nos. 13‐3732 & 13‐3738

trict court, at one point or another, found the funds to be

blocked does not render them blocked now. Holy Land, 722

F.3d at 688 (“The fact that the government and the parties

treated and considered the assets as blocked throughout the

criminal trial does not make them so.”) (internal citations

and quotations omitted). TRIA, moreover, “does not guaran‐

tee that any blocked assets will in fact be available when a

particular victim seeks to execute on a judgment.” Smith v.

Fed. Reserve Bank of N.Y., 346 F.3d 264, 271 (2d Cir. 2003). Be‐

cause the law of the case doctrine is discretionary, Hicks v.

Resolution Trust Corp., 970 F.2d 378, 381 (7th Cir. 1992), and

“is not designed to perpetuate error,” id., we will not consid‐

er the funds blocked if they are not in fact blocked.

Appellees next argue that because the OFAC license itself

was not attached to the record, it cannot form a basis for re‐

versal. In support, Appellees rely on United States v. Alcantar,

83 F.3d 185, 190–91 (7th Cir. 1996), wherein we denied a mo‐

tion to supplement the record with new evidence on appeal.

Id.

But Appellees’ reliance on Alcantar is misplaced. Alcantar

is a criminal case that addressed alleged errors at trial such

as sufficiency of the evidence and ineffective assistance of

counsel (“IAC”). Id. at 189–91. Attempting to preserve his

claim of IAC, the appellant there moved to supplement the

appellate record with transcripts from his grand jury pro‐

ceeding. Id. at 190. We denied the appellant’s motion, rea‐

soning that because those materials were never before the

district court, we could not consider them on direct appeal.

Id. (citing Fed. R. App. 10(e)) (additional citations omitted).

We subsequently encouraged the appellant to include the

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Nos. 13‐3732 & 13‐3738 27

matters in his collateral proceeding. Id. at 191. Those facts

are far removed from the case at bar.

In characterizing the OFAC license as new evidence, Ap‐

pellees look past the Stipulation of Undisputed Facts. There,

Appellees stipulated that OFAC issued a license concerning

the defendant funds. Appellees also stipulated to the broad

terms of this license, which expressly authorized the DOJ to

“take all necessary actions in furtherance of the ... pursuit of

[the] civil forfeiture of the [defendant funds.” Gov’t App’x

L.A. 272, ¶ 20 (emphasis added). There is nothing new about

this evidence. The stipulation binds the parties, and is on

point. Had the parties not stipulated to the existence and the

relevant contents of the OFAC license, we may have reached

a different conclusion. For we agree with the dissent that it is

odd for the United States to place so much stock in some‐

thing that is not a part of the record. But the presence of the

stipulation, which includes a stipulation to the broad, opera‐

tive terms of the license, quells any concern regarding the

completeness of the record.  

Indeed, the stipulation provides this court with ample in‐

formation. For example, the stipulation tells us that OFAC

issued the license. That means it qualifies as “a license issued

by the United States Government ... .” 116 Stat. 2322, 2339.

The stipulation next tells us that the license was issued to the

DOJ. That means “a person subject to the jurisdiction of the

United States” is its intended recipient. Id; see also 116 Stat.

2322, 2326 (defining person, in part, as a “governmental

unit”). As for its scope, the stipulation expressly contem‐

plates a broad one: it allows the DOJ to “take all necessary

actions in furtherance of” civil forfeiture. Gov’t App’x L.A.

272, ¶ 20. That satisfies the purpose criterion, which requires

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28 Nos. 13‐3732 & 13‐3738

the license to be “for final payment, transfer, or disposition.”

116 Stat. 2322, 2339.  

A license to effect forfeiture is, at bottom, a license for fi‐

nal transfer or disposition. Cf. Holy Land, 722 F.3d at 687. Our

conclusion on this latter point rests not only on the Fifth Cir‐

cuit’s implied decision in Holy Land, but also on the nature of

forfeiture itself. Forfeiture, let’s not forget, is both a process

and a desired end state. The United States’ desired end state

is ownership of al Tayyeb’s funds, a final disposition it pre‐

fers to limbo, or worse, possession by al Qaeda for terrorist

operations. That helps explain why, after securing the OFAC

license, the United States arrested and took possession of the

funds on July 12, 2011. The license at issue enabled that ar‐

rest, just as it ultimately enables the final transfer of the

funds from al Tayyeb. As a result, the stipulated terms of

this license qualify it as one for “final ... transfer, or disposi‐

tion ... .” 116 Stat. 2322, 2339.

Each of these critical facts flows directly from the parties’

stipulation to the license, and they weigh in favor of finding

the funds to no longer be “blocked”—at least as TRIA de‐

fines the term. We respectfully disagree, therefore, with the

dissent’s contention that the stipulation is too vague to carry

any real meaning on appeal. The stipulation carries signifi‐

cant meaning. When coupled with the arrested nature of the

funds, it reveals the funds are no longer blocked within the

statutory meaning of TRIA.

Additionally, that the stipulation does not state whether

OFAC issued the license “in connection with a transaction

for which the issuance of such a license has been specifically

required by statute other than the International Emergency

Economic Powers Act ... or the United Nations Participation

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Nos. 13‐3732 & 13‐3738 29

Act of 1945,” 116 Stat. 2322, 2339–40, does not alter our con‐

clusion. Whether a certain statute requires the issuance of a

license is a question of law; it need not be addressed by the

parties’ stipulation.  

Here, that question of law is not in dispute. Appellees

make no argument on appeal that either the International

Emergency Economic Powers Act (“IEEPA”) exemption or

the United Nations Participation Act of 1945 (“UNPA”) ex‐

emption preserves these funds as blocked, so as to subject

them to attachment under TRIA. Pub. L. No. 107‐297,

§ 201(d)(2)(B)(i), 116 Stat. 2322, 2339–40. Nor did Appellees

develop such an argument before the district court. This is‐

sue, consequently, is deemed waived. Puffer v. Allstate Ins.

Co., 675 F.3d 709, 718 (7th Cir. 2014).  

Nevertheless, the dissent relies heavily on this portion of

TRIA. Citing 31 C.F.R. §§ 594.101 and 594.502(b), the dissent

essentially contends that IEEPA required the forfeiture li‐

cense because IEEPA blocked the assets. It follows, the dis‐

sent concludes, that the funds must remain blocked (and

subject to attachment under TRIA) because the IEEPA ex‐

emption applies.  

Putting to one side the fact that Appellees (or the United

States, for that matter) did not brief this issue, we see things

differently than the dissent does. IEEPA empowers the Pres‐

ident to exercise “emergency economic powers in response

to peacetime crises.” Regan v. Wald, 468 U.S. 222, 227‐28

(1984). Although OFAC invoked IEEPA, among other au‐

thorities, to block al Tayyeb’s funds on June 18, 2006, its

powers under IEEPA are not unlimited: “IEEPA does not

authorize the Executive to take title to foreign assets, to regu‐

late purely domestic transactions, to regulate gold or bullion,

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30 Nos. 13‐3732 & 13‐3738

or to seize records.” United States v. Ali Amirnazmi, 645 F.3d

564, 572 n.12 (3d Cir. 2011) (citing Regan, 468 U.S. at 228 n.8

(citation omitted).7 IEEPA, for example, does not speak of

applications for warrants of arrest in rem. The Supplemental

Rules for Admiralty or Maritime Claims and Asset Forfei‐

ture Actions, on the other hand, do.

The utility of TRIA’s IEEPA exemption, moreover, is re‐

vealed by other circuits that have not applied it under simi‐

lar circumstances. See Holy Land, 722 F.3d at 685 (refraining

from applying TRIA’s IEEPA exemption to funds subject to

an OFAC license even though the funds there were initially

blocked pursuant to IEEPA); Bank of N.Y. v. Rubin, 484 F.3d

149, 150 (2d Cir. 2007) (per curiam) (same). These decisions

are incompatible with the dissent’s view. What is more, once

the United States executed its warrants of arrest in rem, the

funds—at least by that point—were no longer “seized or

frozen” as TRIA contemplates the terms—a threshold re‐

quirement that obviates the dissent’s discussion on this point

altogether. Instead, the funds were seized under civil forfei‐

ture. We cannot overlook that fact.

Appellees next argue waiver. In their view, the United

States waived the issue of the blocked (or unblocked) status

of the defendant funds when it advanced the argument only

in its reply brief before the district court. We reject this ar‐

                                                 

7 We acknowledge that Congress granted the President additional au‐

thority to confiscate foreign property, subject to certain conditions, when

it amended IEEPA in 2001. See Uniting and Strengthening America by

Providing Appropriate Tools Required to Intercept and Obstruct Terror‐

ism (USA PATRIOT) Act of 2001, Pub. L. No. 107‐56, § 106, 115 Stat. 272,

277–78 (Oct. 26, 2011).

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13‐3732 & 13‐3738 31

gument as well. It disregards the relevant procedural history

of the case, which was impacted by the Fifth Circuit’s deci‐

sion in Holy Land, 722 F.3d at 677.

There, the Fifth Circuit addressed a TRIA action brought

by victims of a Hamas terrorist attack in Jerusalem. Id. at 680.

Specifically, the victims sought to satisfy their judgment

against Hamas by executing on the blocked funds of its

fundraising wing in the United States—Holy Land Founda‐

tion. Id. at 680–82. Like here, OFAC issued a license to the

United States “to pursue criminal forfeiture of the [blocked]

assets ... .” Id. at 687. And like here, the United States re‐

strained (in our case, “arrested”) the “assets to preserve

them for potential criminal forfeiture.” Id. The Fifth Circuit

found that the license, coupled with the restrained status of

the funds, rendered them unblocked under TRIA. Id. (cita‐

tions omitted). The United States took notice.

Realizing the relevancy of the Holy Land case, the United

States filed an unopposed motion before the district court to

address its holding before the parties finished briefing their

cross motions for summary judgment. Although the district

court denied the motion, it instructed both parties to address

the case in their remaining briefs. This record belies any

claim that the United States waived the issue of the status of

the funds. The United States acted like a party seeking to

preserve an issue, not waive it. And it did just that.

On the impact of the July 8, 2011, OFAC license and the

July 12, 2011, arrest of the funds, we are persuaded by the

Fifth Circuit’s analysis. These funds are now part of an

OFAC licensing scheme, they are arrested, and they there‐

fore outside the ambit of TRIA. The statute does not “reach

those funds which the government has been given authori‐

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32 Nos. 13‐3732 & 13‐3738

zation to control through another means.” Holy Land, 722

F.3d at 685, 688 (observing that “[t]he definition of ‘blocked

assets’ set forth in TRIA is narrow”) (emphasis added). Con‐

sequently, and for all the reasons discussed above, Appellees

cannot execute on these funds. They are excluded from the

definition of “blocked assets” under the statute. Pub. L. No.

107‐297, § 201(d)(2), 116 Stat. 2322, 2339. Other courts are in

accord. See Rubin, 484 F.3d at 150 (finding assets subject to a

general licensing scheme to be unblocked and not subject to

attachment under TRIA); Estate of Heiser, 807 F. Supp. 2d at

18 n.6 (“Thus, because transactions ... are undertaken under

an OFAC licensing scheme, they are unblocked and not sub‐

ject to attachment.”).

In an effort to prevent this result, Appellees point out

that OFAC issues two types of licenses: general licenses and

specific licenses. While general licenses may render funds

unblocked, specific licenses, they argue, do not. Unfortu‐

nately for Appellees, TRIA does not support this argument.

The text of TRIA makes no distinction between—or mention

of—“specific” or “general” licenses. Rather, the statute

broadly excepts any property subject to “a license issued by

the United States Government,” subject to certain conditions,

from qualifying as a blocked asset. Pub. L. No. 107‐297,

§ 201(d)(2), 116 Stat. 2322, 2339–40 (emphasis added).

That leaves the purpose of the statute as Appellees’ last

best hope for recovery. But as we stated before, a statute’s

purpose cannot defy the unambiguous and plain meaning of

its text. See Suesz, 757 F.3d at 659 (Kanne, J., dissenting).

Whereas here, the text leaves no room for debate, we do not

close our eyes to it.  

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13‐3732 & 13‐3738 33

Having found the funds to no longer be blocked (as TRIA

defines the term), Appellees cannot proceed under that stat‐

ute. Consequently, the parties’ arguments concerning TRIA’s

waiver of sovereign immunity are moot. Without any waiver

of sovereign immunity, Appellees cannot attach the defend‐

ant funds, now seized and held by the United States, to satis‐

fy their judgment against al Qaeda. See Dep’t of the Army v.

Blue Fox, 525 U.S. 255, 264 (1999) (“[S]overeign immunity

bars creditors from attaching or garnishing funds in the

Treasury[.]”); see also Weinstein v. Islamic Republic of Iran, 274

F. Supp. 2d 53, 58 (D.D.C. 2003) (“[I]f the property sought to

be attached by plaintiffs is property that (1) has been seized

by the United States from a terrorist party and (2) is present‐

ly held by the United States, it cannot be attached ... .”). The

United States’ remaining arguments concerning in custodia

legis, and prior exclusive jurisdiction are moot.

We pause to make some observations. First, we are mind‐

ful of the dissent’s concern regarding the litigation tactics of

the Executive Branch. That the Executive Branch could delay

revealing the existence of these particular funds, and then

employ measures designed specifically to take them outside

the scope of TRIA—a remedial statute—smacks of games‐

manship. But the United States’ approach to litigating this

case falls within the bounds of what Congress permitted

when it enacted this iteration of TRIA. It is not the function

of the courts to disturb the policy judgments of the Legisla‐

tive Branch.  

Finally, it is unfortunate, to say the least, that the victims

of September 11 are still seeking relief, all these years later,

for their tragic losses. For that we reason, we are also mind‐

ful of the United States’ concession at oral argument that the

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34 Nos. 13‐3732 & 13‐3738

victims of al Qaeda will be allowed to use the remission pro‐

cess to submit claims for relief. If that process proves to be

inadequate, perhaps Congress can revisit TRIA to strengthen

its means of recovery for victims of terror.

III. CONCLUSION

For the foregoing reasons, we find Appellees possess

constitutional and statutory standing. Nevertheless, their ac‐

tions under TRIA ultimately fail. TRIA is no doubt a remedi‐

al statute. Its purpose, however, cannot save a ruling that

offends its text. By the time Appellees filed their initial, veri‐

fied claims, OFAC had already issued its license and the

funds had already been arrested to preserve them for forfei‐

ture. In sum, the funds were no longer blocked. To Appel‐

lees, that result may seem unfair, but it is the only permissi‐

ble reading under the statute. For these reasons, as well as

the reasons discussed above, we VACATE the grant of

summary judgment in favor of Appellees and REMAND this

case with instructions to enter summary judgment in favor

of the United States.

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13-3732 & 13-3738 35

MANION, Circuit Judge, concurring in part and dissenting in

part.

I agree with the court that the insurance companies have

standing. However, I disagree with the court’s conclusion that

the forfeiture license and the in rem arrest warrants prevent the

insurance companies from recovering the funds. Neither the

forfeiture license nor the arrest warrants changed the status of

the funds as blocked under the Terrorism Risk Insurance Act

(“TRIA”), and the funds remain accessible by the insurance

companies. For these reasons, I respectfully dissent.

I. Blocked funds and TRIA.

The International Emergency Economic Powers Act

(“IEEPA”) gives the President the power to block, i.e., freeze,

assets in response to “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.” 50 U.S.C. §§ 1701(a),

1702(a)(1)(B); see also Smith v. Fed. Reserve Bank of N.Y., 346 F.3d

264, 267 (2d Cir. 2003). The United Nations Participation Act

(“UNPA”) empowers the President to apply measures to

enforce economic and communication sanctions called for by

the United Nations Security Council. 22 U.S.C. § 287c. Afterthe

terrorist attacks of September 11, 2001, the President invoked

these powers to issue Executive Order 13224 to block the assets

of designated terrorists, terrorist organizations, and foreign

persons who support these terrorists. 66 Fed. Reg. 49079-83

(Sept. 25, 2001). The Department of the Treasury’s Office of

Foreign Assets Control (“OFAC”) promulgated the Global

Terrorism Sanctions Regulations (“GTSR”) to implement

Executive Order 13224. 68 Fed. Reg. 34196-97 (June 6, 2003).

“Except as authorized by statutes, regulations, orders, direcCase: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
36 Nos. 13-3732 & 13-3738

tives, rulings, instructions, licenses or otherwise,” funds that

are blocked under GTSR “may not be transferred, paid,

exported, withdrawn or otherwise dealt in.” 31 C.F.R.

§ 594.201(a).

“To ensure the continued financial capacity of insurers to

provide coverage for risks from terrorism,” Congress passed

the Terrorism Risk Insurance Act (“TRIA”). Pub. L. No.

107-297, 116 Stat. 2322 (Nov. 26, 2002). In addition to a general

terrorism insurance program, TRIA gives victims of terrorism

the ability to execute judgments on terrorist assets that are

blocked (i.e., “seized or frozen”) under IEEPA. § 201(a), 116

Stat. at 2337. The question before the court is whether the

funds are considered blocked under TRIA. If the funds are

blocked, they are available to satisfy the insurance companies’

judgments. If the funds are instead considered “unblocked”

under TRIA, they are no longer available to satisfy judgments.

The parties stipulated that OFACblocked the funds on June

18, 2007, pursuant to Executive Order 13224, IEEPA, and

GTSR. Gov’t App’x L.A. 272, 18. This action by OFAC brought

the funds within the ambit of TRIA and made them eligible to

satisfy the judgments of the insurance companies. However,

the parties also stipulated that OFAC issued a license to the

DOJ on July 8, 2011 to “take all necessary actions in furtherance

of the ... pursuit of [the] civil forfeiture of the [defendant

funds].” Id. at 20. The license allowed the government to move

forward with its complaint for civil forfeiture, which it filed on

June 19, 2011. In furtherance of the forfeiture action, the district

court issued in rem arrest warrants for the funds on July 12,

2011. The district court took possession of the funds on July 14,

2011. Gov’t App’x L.A. 15. So, the more specific question is

whether the forfeiture license or arrest warrants changed the

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Nos. 13-3732 & 13-3738 37

status of the funds under TRIA from blocked to unblocked. As

explained below, neither the forfeiture license nor the arrest

warrants unblocked the funds under TRIA.

II. The effect of the license.

As mentioned, the parties stipulatedthat OFACblocked the

funds pursuant to GTSR, 31 C.F.R. § 594.101, et seq. Those

regulations contain the following provisions:

No regulation, ruling, instruction, or license

authorizes any transaction prohibited under this

part unless the regulation, ruling, instruction, or

license is issued by [OFAC] and specifically

refers to this part. No regulation, ruling, instruction, or license referring to this part shall be

deemed to authorize any transaction prohibited

by any provision of this chapter unless the

regulation, ruling, instruction, or license specifically refers to such provision.

31 C.F.R. § 594.502(b). To put it another way, if OFAC blocked

the assets under GTSR, then OFAC can unblock the assets by

a license only if the license specifically refers to GTSR and the

specific provision used to block the assets. The limitation is

more than a simple requirement to reference the provision that

originally blocked the assets: 

No license or authorization contained in or

issued pursuant to those other parts [of the

OFAC chapter] authorizes any transaction prohibited by this part. No license or authorization

contained in or issued pursuant to any other

provision of law or regulation authorizes any

transaction prohibited by this part.

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38 Nos. 13-3732 & 13-3738

31 C.F.R. § 594.101. Therefore, if OFAC blocked the assets

under GTSR, then OFAC can unblock the assets by a license

only if the license is issued under GTSR. For this reason, the

forfeiture license must have been issued pursuant to GTSR if

it was a valid license. Furthermore, a valid license issued under

GTSR is construed narrowly:

Any regulation, ruling, instruction, or license

authorizing any transactionotherwiseprohibited

under this part has the effect of removing a

prohibition contained in this part from the

transaction, but only to the extent specifically stated

by its terms.

31 C.F.R. § 594.502(c) (emphasis added).

Thus, the forfeiture license permitted the DOJ to “take all

necessary actions in furtherance of the ... pursuit of [the] civil

forfeiture of the [defendant funds]” and nothing more. Gov’t

App’x L.A. 272, 20. So, although the license unblocked the

funds so that the government could obtain arrest warrants in

furtherance of its civil forfeiture action, the license did not

unblock the funds for the terrorist Muhammad Abdallah

Abdan Al Ghamdi (“al Tayyeb”) or anyone else. Clearly, if the

government fails in its civil forfeiture action, the funds are not

then available to al Tayyeb. In short, the funds are still blocked

for all other purposes. The government concedes this fact. See

Gov’tReply Br. 18 (“The government, however,hasnot argued

that OFAC issued a general license completely lifting the order

it imposed in 2007. Rather, OFAC allowed the government to

take all necessary action to subject the defendant funds to

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13-3732 & 13-3738 39

forfeiture.”). The license, by its terms, did not unblock the

funds for the purposes of TRIA.1

There is, though, a way in which a license can unblock

funds for purposes of TRIA without unblocking the funds

under GTSR. It involves TRIA’s definition of blocked assets

but, as explained below, it does not apply here.2

III. The TRIA license exclusion.

TRIA excludes from its definition of blocked assets property that is subject to a license that meets four specific criteria:

the license must be 1) issued by the United States Government;

2) for final payment, transfer, or disposition; 3) for a transaction by or to a person subject to the jurisdiction of the United

States; and 4) specifically required by a statute other than IEEPA

or UNPA. § 201(d)(2)(B)(i), 116 Stat. at 2339–40 (emphasis

added). Assets subject to a license that meets the above criteria

are considered “unblocked” for the purposes of TRIA even

though they are still blocked for other purposes (except, of

course, for whatever purpose is authorized by the license).

There is no dispute that the forfeiture license was issued by the

As a general matter, even though TRIA is dependent on IEEPA and 1

regulations like GTSR to block funds, its mechanisms for attachment

operate outside of those laws. See Estate of Heiser v. Bank of Tokyo Mistubishi

UFJ, 919 F. Supp. 2d 411, 422–23 (S.D.N.Y. 2013) (accepting representations

by the United States that an OFAC license is not required to authorize the

release of blocked assets subject to TRIA).

 Although the parties did not argue this issue with specificity on appeal, 2

they raised the overarching issue of whether the forfeiture license unblocked the funds under TRIA. An examination of that issue requires an

examination of TRIA’s definition of blocked assets. Therefore, the issue is

not waived.

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
40 Nos. 13-3732 & 13-3738

United States and involves a person subject to the jurisdiction

of the United States. So, of the four criteria, only the second

and fourth remain for the court to decide. If the license is either

not for final payment, transfer, or disposition or if the license

is required by either the IEEPA or UNPA, then the funds are

still eligible to satisfy the insurance companies’ judgment. Of

course, had the government disclosed the forfeiture license we

might easily discern the answer. But since the government has

not disclosed it, further analysis is necessary.

A. The stipulated language is insufficient to conclude that

the license is for final disposition.

The stipulated language is too vague to establish that the

forfeiture license is a license for final disposition. True, the

award of the funds to the government according to a final

judgment of forfeiture would be a final disposition. And, it is

conceivable that a license could authorize the government to

take title to the funds only if and when the district court enters

final judgment in the government’s favor. But, the stipulated

language does not say these things. The stipulated language

says only that the license authorizes the DOJ to “take all

necessary actions in furtherance of the ... pursuit of [the] civil

forfeiture.” Gov’t App’x L.A. 272, 20. Before the court holds

that the license is for final disposition, it should consider what

the original language of the license might say. What is underneath the ellipsis? Does the addition of the second “the”

change the original meaning? Could it be that OFAC authorized the DOJ to take all necessary actions in furtherance of the

filing of a complaint in pursuit of civil forfeiture? Or, perhaps

OFAC authorized the DOJ to take all necessary actions in

furtherance of the restraining orders required for the pursuit of

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13-3732 & 13-3738 41

civil forfeiture? Until the government discloses the forfeiture

license we will not know.

B. The license was required by IEEPA and UNPA.

Even if the forfeiture license were a license for final

disposition, the assets are not excluded from TRIA’s definition

of blocked assets because the license does not meet the fourth

requirement that the license be required by a statute otherthan

the IEEPA or UNPA. As explained previously, the forfeiture

license must have been issued under GTSR in order to constitute a valid license. Infra at 37. An examination of GTSR’s

authority reveals that its substantive authority (i.e., its authority for blocking and licensing) is derived from IEEPA and

UNPA. See 31 C.F.R. § 594.101, Statutory Authority (authority

note applicable to entire part); see also 68 Fed. Reg. 34196-97.

Hence, any license issued under GTSR is issued under IEEPA

and UNPA, and any license required by GTSR is required by

IEEPA and UNPA.

It follows that the forfeiture license cannot meet the

requirements of TRIA’s exclusion: To be a valid license, OFAC

must have issued the forfeiture license under GTSR and,

consequently, under IEEPA and UNPA. If so, then the license

was not issued “in connection with a transaction for which the

issuance of such license has been specifically required by

statute other than [IEEPA] or [UNPA]” as required by TRIA’s

exclusion. § 201(d)(2)(B)(i), 116 Stat. at 2339-40 (emphasis

added). If, on the other hand, OFAC did not issue the forfeiture

license under GTSR, then it is not a valid license at all and the

funds are not “subject to a license” as required by TRIA’s

exclusion. Id. at 2339. In either of the only two possible cases

(issued under GTSR or not) the license does not satisfy the

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
42 Nos. 13-3732 & 13-3738

requirements of TRIA’s exclusion. Consequently, the funds are

not considered unblocked by TRIA’s exclusion.

IV. United States v. Holy Land.

The government invites us to rely on the Fifth Circuit’s

decision in United States v. Holy Land Found. for Relief and Dev.,

722 F.3d 677 (5th Cir. 2013), to hold that since the license

unblocked the funds for the purposes of the forfeiture proceeding, thereby making them available to any qualified claimant,

the funds are no longer blocked under TRIA. The Fifth Circuit, 3

however, did not hold that the OFAC license in its case

unblocked the assets. Rather, it held that “the government

essentially unblocked HLF’s assets when it obtained a restraining order under 21 U.S.C. § 853(e)(1)(A) to pursue the criminal

forfeiture of those assets.” Id. at 685. 

The license in Holy Land stated that it “authorized the

government ‘to pursue criminal forfeiture of the assets of the

Holy Land Foundation for Relief and Development (“HLF”)

blocked pursuant to’ Executive Orders 12947 and 13224” and

“further authorized the government to pursue ‘restraining

orders’ in order to preserve the assets for criminal forfeiture.”

Id. at 687. The plaintiffs in Holy Land could not satisfy their

judgment because “[o]nce an indictment had been filed and the

assets restrained, victims of terrorism could no longer execute

against those assets ... TRIA could not be applied to those

funds since they no longer qualified as blocked under that

statute.” Id. (citations omitted). 

From all indications, it appears that the Fifth Circuit in Holy Land had the 3

benefit of a copy of the forfeiture license in the record, a benefit not

provided by the government in this case.

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Nos. 13-3732 & 13-3738 43

The reason given by the Fifth Circuit for this result was

twofold: First, “TRIA specifically limits the definition of

‘blocked’ assets to those that are seized or frozen under ... the

Trading with the Enemy Act or ... IEEPA.” Id. at 685. And,

second, TRIA “does [not] reach those funds which the government has been given authorization to control through another

means.” Id. In other words, because the government was given

authorization to control the funds in Holy Land through the

restraining orders, the Fifth Circuit held that the funds were no

longer blocked under IEEPA. And, since the funds were no 4

longer blocked under IEEPA, they were no longerreachable by

TRIA.

The Fifth Circuit’s conclusion is wrong, and the reason why

should be obvious from the discussion above. The forfeiture

license in Holy Land never unblocked the funds under IEEPA.

Rather, despite the fact that the funds were still blocked under

IEEPA, the license allowed the forfeiture action to proceed. The

Fifth Circuit stated this exactly, but did not recognize the

inconsistency: “Notwithstanding the status of HLF’s assets as

blocked, the government’s receipt of a license from OFAC

restrained those assets and permitted the government to

proceed with the criminal forfeiture process.” Id. at 687

(emphasis added). Similarly here, as the government concedes,

OFAC did not issue a license completely lifting its blocking

order imposed in 2007. Instead, it issued a specific license

allowing for the government’s forfeiture action and nothing

more. Therefore, Holy Land provides no reason to hold that the

license or the arrest warrants unblocked the funds. 

The assets in Holy Land were blocked under IEEPA, not the Trading With 4

the Enemy Act. Holy Land, 722 F.3d at 685.

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44 Nos. 13-3732 & 13-3738

Another reason not to accept the Fifth Circuit’s conclusion

is that it provided no authority for its premise that TRIA

cannot reach those funds which the government has been

given authorization to control through other means. The Fifth

Circuit did cite the D.C. District Court and Second Circuit as

authorities which—the Fifth Circuit thought—have decided

that assets subject to licenses are unblocked under TRIA. Id.

(citing Estate of Heiser v. Islamic Republic of Iran, 807 F. Supp. 2d

9, 18 n.6 (D.D.C. 2011), and Bank of N.Y. v. Rubin, 484 F.3d 149,

150 (2d Cir. 2007)). An examination of both cases, however,

reveals that they were not decided as the Fifth Circuit understood.

In Estate of Heiser, the plaintiffs sued the Telecommunications Company of Iran under the Foreign Sovereign Immunities Act (“FSIA”) in order to attach payments owed to the

telecommunications company. Estate of Heiser, 807 F. Supp. 2d

at 16–18. The plaintiffs chose not to sue under TRIA because of

the paucity of blocked Iranian assets available for attachment.

Id. at 15. They chose instead to sue under the FSIA because it

allows plaintiffs to attach the property of state agencies or

instrumentalities when they cannot attach the property of the

state itself. Id. at 15–16, 18. Since OFAC’s Iranian Transactions

Regulations contained a general license that “unblocked”

payments totelecommunication companies thathandledtraffic

between the United States and Iran, the plaintiffs attempted to

attach payments owed by Sprint to the Telecommunications

Company of Iran. Id. at 16–17. In a footnote, the district court

noted:

Here, the payments owed from Sprint to [sic]

TIC are neither seized nor frozen; instead, they

are made under a general license permitting

Case: 13-3738 Document: 42 Filed: 04/02/2015 Pages: 49
Nos. 13-3732 & 13-3738 45

payments incident to telecommunications traffic.

... Thus, because transactions between Sprint

and [sic] TIC are undertaken under an OFAC

licensing scheme, they are unblocked and not

subject to attachment. 

Id. at 18 n.6. The Fifth Circuit misunderstood this discussion to

mean that the district court held that blocked assets subject to

a license (such as we have here) are unblocked. That is not

what the district court said. Rather, the district court explained

that the payments between the telecommunication companies

were never blocked because the OFAC general license removed all such transactions from the sanction regulations’

prohibitions. Since the payments were never blocked to begin

with, TRIA was inapplicable.

This is why the distinction between general and specific

licenses is important. GTSR defines a general license as “any

license or authorization the terms of which are set forth in

subpart E of this part” and a specific license as “any license or

authorization not set forth in subpart E of this part but issued

pursuant to this part.” 31 C.F.R. §594.307. Subpart E of the 5

GTSR contains regulations that authorize specific types of

transactions. See, e.g., 31 C.F.R. § 594.517 (“receipts of payment

of professional fees and reimbursement of incurred expenses

for the provision of legal services authorized pursuant to

§ 594.506(a) are authorized from funds originating outside the

United States”). A general license, then, is not so much a

license as a regulation preventing assets from being blocked in

Each part of the OFAC regulations contains its own definitions so it is

5

necessary to examine the definitions specific to the sanction regime at issue.

See 31 C.F.R. § 501.301.

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46 Nos. 13-3732 & 13-3738

the first place. In contrast, a specific license is a license issued

under the authority of the regulations that is necessary to

unblock assets that the regulations have at first blocked. In this

case we are dealing with a specific license that unblocked the

funds for the purposes of forfeiture.

The second case relied upon by Holy Land made the same

distinction. In Bank of N.Y., the Second Circuit adopted the

reasons of the “fine opinion below” and stated:

[W]e hold that assets blocked pursuant to Executive Order 12170, 44 Fed. Reg. 65,729 (Nov. 14,

1979), and its accompanying regulations, see 31

C.F.R. Part 535, that are also subject to the general license of 31 C.F.R. § 535.579, are not blocked

assets under the TRIA and therefore are not

subject to attachment under that statute. 

Bank of N.Y., 484 F.3d at 150. Below, the district court explained: “This license [31 C.F.R. § 535.579(a)] has the effect of

removing a prohibition or prohibitions in subpart B from the

transaction. ... Accordingly, transactions authorized by the

general license would not be blocked by Section 535.201.” Bank

of N.Y. v. Rubin, 2006 U.S. Dist. LEXIS 10215 at *9 (S.D.N.Y.

Mar. 15, 2006) (quotation omitted). The license at issue in Bank

of N.Y. was not a specific license of the type at issue here or in

Holy Land, but a regulation put in place to effectuate the

“Algiers Accords” where “most Iranian assets in the United

States were unblocked and the trade embargo was lifted.” Id.

at *8. Therefore, as with Estate of Heiser, Bank of N.Y. concerns

a general license that is really a regulation that removes the

prohibition from the law, not a specific license that unblocks

assets for a specific purpose that were blocked by an OFAC

order. Thus, it stands that assets subject to a general license are

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Nos. 13-3732 & 13-3738 47

not blocked for the purposes of TRIA because a general license

is a regulation that removes the prohibition against the assets

so that the sanction regulations do not block the assets in the

first place. See Weinstein v. Islamic Republic of Iran, 299 F. Supp.

2d 63, 67–68 (E.D.N.Y. 2004). That is not the case here.

V. Conclusion.

For the reasons explained above, neither the forfeiture

license nor the arrest warrants in this case unblocked the funds

for the purpose of TRIA. Consequently, the funds are still

blocked and available to satisfy the insurance companies’

judgment. To hold otherwise would render meaningless our

opinion that TRIA’s “notwithstanding” clause supersedes civil

forfeiture standing requirements. We are compelled to hold

that TRIA supersedes civil forfeiture standing requirements

because “once the United States commences a forfeiture action,

it is impossible for qualified albeit unrelated victims of terror

(here, the insurance companies) to comply with civil forfeiture’s innocent owner requirement and, at the same time,

execute against the blocked funds.” Ante at 20. Yet, as the

government explains, “To secure the in rem jurisdiction, the

district court was required to arrest or judicially restrain the

defendant funds.” Gov’t Reply Br. 26 n.23 (citing United States

v. All Funds Distributed To Weiss, 345 F.3d 49, 55 (2d Cir. 2003)

(possession orrestraint of the defendant res is necessary for the

district court to secure its in rem jurisdiction.)). If an OFAC

6

forfeiture license with an arrest warrant or restraining order

unblocks blocked assets, plaintiffs who are “allowed to enter

the courthouse” through TRIA’s “notwithstanding” clause will

An examination of Rule G(3)(b) of the Supplemental Rules of Admiralty 6

or Maritime Claims and Asset Forfeiture also reveals this to be the case.

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48 Nos. 13-3732 & 13-3738

never obtain relief since every forfeiture action against blocked

funds requires an OFAC license and an arrest warrant or

restraining order. 

Finally, since neither the license nor the arrest warrants

unblock the funds under TRIA, it is necessary to address the

government’s sovereignimmunityargument. The government

argues that the insurance companies cannot attach the funds

because TRIA does not waive the government’s sovereign

immunity. The district court, however, correctly found that

Congress had waived the government’s sovereign immunity

through TRIA. We should adopt the district court’s reasoning

and reach the same conclusion. See United States v. All Funds on

Deposit with R.J. O’Brien & Assocs., 892 F. Supp. 2d 1038,

1043–45 (N.D. Ill. 2012). 

All that said, perhaps what is most troubling about this case

is that the Executive Branch has dictated the pace of this

proceeding at every turn and continually stonewalled the

insurance companies’ efforts to satisfy their judgment against

terrorist assets. The funds were blocked by the government

from 2007 to 2011. After ignoring FOIA requests from the

insurance companies for years on the grounds that they were

exempt from disclosure for reasons of national security, the

government finally disclosed the identity of the blocked assets

when, in June 2011, the government initiated a forfeiture

proceeding against them. In August 2011, the insurance 7

In July 2003, the insurance companies sent FOIA requests to relevant 7

federal agencies including the Treasury Department and the DOJ seeking

“identification of assets belonging to” al-Qaeda and approximately 192

other Executive Order 13224 terrorist designees. In 2005, the insurance

companies brought suit to obtain this information. In October 2006,

Treasury asserted that information was exempt from disclosure. In June

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Nos. 13-3732 & 13-3738 49

companies timely asserted their interests. The government

resisted, but lost in the district court. Now, on appeal, the

government argues that its acquisition of a forfeiture license

unblocked the assets, and because the assets are unblocked

they are no longer within the ambit of TRIA. Because the court

accepts this argument, the insurance companies are out of luck,

and the assets will be forfeited to the government without ever

seeing the light of day. The government accomplishes this coup

d’état despite the fact that the forfeiture license that is the

lynchpin of its theory is not in the record, so we do not have

the complete picture of its contents. Perhaps that is why the

government used the coup de main of stipulating to a vague

description of the unseen forfeiture license. 

For these reasons, I would affirm the judgment of the

district court.

2008, the insurance companies submitted an amended FOIA request for

“any and all documents from the DOJ’s Criminal Division identifyingassets

belonging to the foreign states, terrorism-related entities and

individuals ... .” In October, 2008, the DOJ-Criminal Division responded

that “as of August 5, 2008, the AFMLS has reported that they do not have

any records of assets pertaining to the individuals and entities named in

your request.” In December 2008, the government prevailed in the FOIA

suit.

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