Court Opinion

ID: 9902379
Source: CourtListenerOpinion
Date Created: 2023-11-26 23:01:08.926225+00
Date Added: 2024-06-11T09:21:49.718554
License: Public Domain

UNITED STATES DISTRICT COURT
                                 FOR THE DISTRICT OF COLUMBIA

    BAHMAN GROUP,

                   Plaintiff,

           v.
                                                             Civil Action No. 22-3826 (RDM)
    BRADLEY T. SMITH, in his official
    capacity as Director of the Office of Foreign
    Assets Control, et al.,1

                   Defendants.

                                MEMORANDUM OPINION AND ORDER

          This matter concerns the Office of Foreign Assets Control’s (“OFAC”) designation of the

Group pursuant to Executive Order 13224 as a Specially Designated Global Terrorist (“SDGT”)

and OFAC’s inclusion of Bahman Group on its List of Specially Designated Nationals and

Blocked Persons (“SDN List”). Dkt. 11; Dkt. 18 at 2. Specifically, Plaintiff raises three

challenges under the Administrative Procedure Act to OFAC’s denial of Bahman Group’s

delisting petition. Dkt. 11 at 19–22 (Am. Compl. ¶¶ 59–68). The matter is now before the Court

on OFAC’s Motion for Voluntary Remand, Dkt. 18. For the reasons explained below, the Court

will GRANT that motion.

          Federal courts have considerable discretion in deciding whether to grant an agency’s

motion for a voluntary remand. A court will “generally grant an agency’s motion to remand so

1
  The Court automatically substitutes the current Director of the Office of Foreign Assets
Control, Bradley Smith, in the case caption. See Fed. R. Civ. P. 25(d) (providing that “when a
public officer . . . ceases to hold office while the action is pending . . . [t]he officer’s successor is
automatically substituted as a party”).
long as ‘the agency intends to take further action with respect to the original agency decision on

review.’” Util. Solid Waste Activities Grp. v. EPA, 901 F.3d 414, 436 (D.C. Cir. 2018) (quoting

Limnia, Inc. v. Dep’t of Energy, 857 F.3d 379, 386 (D.C. Cir. 2017)); see also FBME Bank Ltd.

v. Lew, 142 F. Supp. 3d 70, 73 (D.D.C. 2015) (“In general . . . ‘[w]hen an agency seeks a remand

to take further action consistent with correct legal standards, courts should permit such a remand

in the absence of apparent or clearly articulated countervailing reasons.’” (quoting Citizens

Against Pellissippi Parkway Extension, Inc. v. Mineta, 375 F.3d 412, 416 (6th Cir. 2004))).

“Remand has the benefit of allowing ‘agencies to cure their own mistakes rather than wasting the

courts’ and the parties’ resources reviewing a record that both sides acknowledge to be incorrect

or incomplete.’” Util. Solid Waste, 901 F.3d at 436 (quoting Ethyl Corp. v. Browner, 989 F.2d

522, 524 (D.C. Cir. 1993)). “Voluntary remand is typically appropriate ‘(i) when new evidence

becomes available after an agency’s original decision was rendered,’ . . . ‘or (ii) whe[n]

“intervening events outside of the agency’s control” may affect the validity of an agency’s

actions.’” FBME Bank Ltd., 142 F. Supp. 3d at 73 (quoting Carpenters Indus. Council v.

Salazar, 734 F. Supp. 2d 126, 132 (D.C. Cir. 2010)). “‘[E]ven if there are no intervening events,

the agency may request a remand (without confessing error) in order to reconsider its previous

position.” Util. Solid Waste, 901 F.3d at 436 (quoting SKF USA Inc. v. United States, 254 F.3d

1022, 1029 (Fed. Cir. 2001)).

       OFAC “does not concede error,” but, rather, seeks a remand “in order to afford it an

opportunity to (1) consider new, relevant information that the agency presently has before it; (2)

investigate this new information further—including by issuing a further questionnaire that will

afford Plaintiff, in turn, an opportunity to provide additional information to OFAC regarding the

nature of its relationships with certain subsidiary entities; and (3) at the conclusion of this

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process, issue a new final decision that will both account for the results of the agency’s

additional investigation and address the asserted deficiencies alleged by Plaintiff.” Dkt. 18 at 1.

These objectives fall squarely within the type of circumstances that justify voluntary remands.

Not only does OFAC represent that it “recently obtained new evidence that is relevant to whether

Plaintiff meets the criteria for designation under EO 13224,” but there is also reason to believe

that OFAC may acquire additional relevant information from Plaintiff in its responses to the

questionnaire (or questionnaires) the office seeks to propound. Id. at 5. In addition, OFAC

represents that it will “take the results of its further investigation into account in reconsidering its

prior decision.” Id. at 6. Those representations are sufficient, and Plaintiff is incorrect in

insisting that OFAC must also concede error to obtain a voluntary remand. See Dkt. 19 at 9;

Util. Solid Waste, 901 F.3d at 436.

        The Court must also consider “whether remand would unduly prejudice the non-moving

party,” Util. Solid Waste, 901 F.3d at 436 (citing FBME Bank Ltd., 142 F. Supp. 3d at 73), and

whether “the agency’s request appears to be frivolous or made in bad faith,” id. (citing SKF USA,

254 F.3d at 1029; Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344, 349 (D.C. Cir.

1998)). Plaintiff argues that both exceptions to the usual rule favoring voluntary remand apply

here. In Plaintiff’s view, “[a]t every turn . . . Defendants have sought to evade judicial review,”

suggesting that “this do over is just another instance which demonstrates that the Defendants

have no intention of rescinding Plaintiff’s designation, and will avail themselves of any

procedural mechanism available to avoid the reality that the current political environment does

not allow them to face: there is no legal basis for Plaintiff to be designated under E.O. 13224.”

Dkt. 19 at 4. The Court is unpersuaded.

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        First, Plaintiff argues that the voluntary remand would cause further delay in an already

years-long battle to get delisted. Dkt. 19 at 12–15. Although the Court is sympathetic to the

frustration that can arise from lengthy proceedings, lengthy proceedings, Plaintiff has failed to

show that OFAC acted in bad faith in any of those past proceedings or, more generally, how

those past proceedings bear on whether this remand—which is all that is now at issue—would

cause any undue prejudice. Notably, OFAC has offered an expeditious timeline for proceedings

on remand, which reflects the office’s good faith in seeking the voluntary remand and which

will, in addition, ensure that the remand does not unduly prejudice Plaintiff. OFAC commits to

“issue the new questionnaire to Plaintiff within 14 days of the issuance of a remand order;” it

proposes “afford[ing] Plaintiff 45 days from issuance of the questionnaire to either respond,

request an extension of time in which to respond, or inform OFAC that it does not intend to

respond;” and, although OFAC “reserves the right[] to issue subsequent questionnaire(s) seeking

clarification or posing further questions[,] [it] commits to issuing no more than three

questionnaires total, and to providing Plaintiff with at least 45 days to respond at each potential

iteration of this investigative process.” Dkt. 18 at 7. When that process concludes, unless the

parties engage in Terms of Removal negotiations, “OFAC likewise commits to promptly issuing

a new final decision on Plaintiff’s delisting petition, and specifically to do so within 90 days.”

Id. at 7, 8 n.2.

        It is true that OFAC does not specify a firm end date for the remand, but the Court is

persuaded that the proposed schedule is sufficiently detailed and expeditious to protect Plaintiff

from undue delay. It is possible that this remand process will provide Plaintiff the relief it seeks

and that it will do so long before the Court would be able to adjudicate the case on the merits and

the office would be able to issue a decision, if appropriate, following an involuntary remand.

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There is, of course, no guarantee that the agency will change its delisting denial, but there is also

no guarantee that the Court will grant Plaintiff the relief it seeks in this litigation.

         Second, Plaintiff argues that OFAC is acting in bad faith. But OFAC has offered

substantial and legitimate reasons for a voluntary remand, leaving Plaintiff to argue that those

reasons are pretextual and that OFAC’s actual design is “to avoid judicial scrutiny of its actions

targeting Plaintiff.” Dkt. 19 at 19. Plaintiff’s allegations are unsupported and too speculative to

withstand scrutiny. To start, Plaintiff complains that OFAC’s motion is untimely because it

comes sixteen months after OFAC’s denial decision. Dkt. 19 at 4, 19. But, ten of those months

passed before Plaintiff filed suit on December 27, 2022, Dkt. 1, and Plaintiff did not file its

amended complaint until June 1, 2023, Dkt. 11, only three months before OFAC moved for a

voluntary remand on August 25, 2023, Dkt. 18. OFAC’s timing does not reflect a strategy of

delay.

         Plaintiff also claims that “[t]here is no indication from [OFAC] . . . that [the referenced]

new, unspecified evidence bears on the legal questions presented in this litigation, such as

whether . . . OFAC can designate Plaintiff under E.O. 13224 for the conduct of its purported

subsidiaries.” Dkt. 19 at 16. But that contention ignores OFAC’s representation that it “recently

obtained new evidence that is relevant to whether Plaintiff meets the criteria for designation

under EO 13224.” Dkt. 18 at 5. Applying the presumption of good faith, the Court accepts

OFAC’s representation and will not require an ex parte, in camera submission to confirm the

truth of that representation; the Court has no reason to doubt counsel’s veracity.

         Finally, Plaintiff argues that evidence of OFAC’s bad faith can be found in footnote 2 of

OFAC’s opening brief, where it refers to the possibility that it might “attempt to negotiate a

Terms of Removal with Plaintiff,” Dkt. 18 at 8 n.2, even though counsel for OFAC allegedly told

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counsel for Plaintiff that “a Terms of Removal Agreement [was] not on the table and would not

be a possible outcome of a reopened administrative matter,” Dkt. 19 at 22. But, as OFAC

explains in its reply brief, the fact that the office was not at that time “willing to undertake any

negotiations related to a potential Terms of Removal agreement,” does not mean that it has (or

would) “categorically” exclude the possibility of reaching such an agreement in the future,

“regardless of what information Plaintiff might provide to OFAC” on remand. Dkt. 21 at 18. To

the contrary, OFAC seeks “to issue a new questionnaire to Plaintiff for the express purpose of

affording it an opportunity to provide additional information,” which might affect the outcome of

the remand. Id. OFAC offers no guarantees, but it remains open to persuasion, and that is all

that is required.

        The Court, accordingly, concludes that a voluntary remand is warranted. Given

Plaintiff’s concern, however, that the proceedings on remand might proliferate, resulting in

undue delay and precluding judicial review, the Court will retain jurisdiction over the matter

while on remand and will require the parties to file a joint status report in six months. If Plaintiff

encounters delay that exceeds that anticipated in OFAC’s motion, Plaintiff can seek appropriate

relief from the Court.

                                          CONCLUSION

        For the foregoing reasons, Defendants’ Motion for Voluntary Remand, Dkt. 18, is

GRANTED. OFAC shall issue its new questionnaire to Plaintiff within 14 days of this order,

and it shall issue its new final decision on Plaintiff’s delisting petition within 90 days of (as

applicable) either (1) the return date of Plaintiff’s response to the final questionnaire that OFAC

issues; (2) the date on which Plaintiff informs OFAC it does not intend to respond to any

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questionnaire; or (3) in the event that Plaintiff elects not to respond or to inform OFAC that it

will not respond, the date which is 45 days from OFAC’s issuance of its new questionnaire. The

parties shall submit a joint status report on or before May 21, 2024, unless OFAC issues its final

decision before that date. This action is hereby STAYED pending final agency action on

remand.

       SO ORDERED.

                                                      /s/ Randolph D. Moss
                                                      RANDOLPH D. MOSS
                                                      United States District Judge

Date: November 26, 2023

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