# United States v. All Funds on Deposit With R.J. O'Brien & Associates

> Court of Appeals for the Seventh Circuit · April 2, 2015 · 783 F.3d 607

URL: https://www.frixlaw.com/law-library/cases/2791102

## Case

- **Full name:** 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 XXXXXXXX and XXXXXXXX, Maintained at Harris Bank, Account Number XXXXXXXX, 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
- **Court:** Court of Appeals for the Seventh Circuit
- **Decided:** April 2, 2015
- **Citations:** 783 F.3d 607; 2015 WL 1476044
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Bauer, Manion, Kanne
- **Nature of suit:** civil
- **Cited by:** 69 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/2791102

## How later opinions describe it (automated extraction)

- finding, as a “threshold issue[ ],” that plaintiffs had statutory standing to sue under the Terrorism Risk Insurance Act before finding they failed to prove a claim under the Act
- finding that the TRIA conferred statutory standing to contest forfeiture action where it was “impossible” both to comply with forfeiture law and execute under TRIA
- finding that “there are no . . . limit[s]” to the scope of the “notwithstanding” clause in the TRIA and holding that the broadness of the clause “supersedes the innocent ownership requirement of civil forfeiture”
- noting that funds at issue there were subject to “OFAC . . . license to the United States ‘to pursue criminal forfeiture of the . . . assets’”
- recognizing the “potent power of a ‘notwithstanding’ clause” to “supercede conflicting provisions”

## Opinion text

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

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,
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.
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.
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.
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.
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.
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.
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
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
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‐
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.
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
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‐
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
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.
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
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
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
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
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‐
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.
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
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:
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‐
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
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
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
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,
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).
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‐
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.
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
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.
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. After the
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, direc-
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 OFAC blocked 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
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 stipulated that OFAC blocked 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, instruc-
tion, 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 specifi-
cally 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 pro-
hibited 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.
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 transaction otherwise prohibited
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’t Reply Br. 18 (“The government, however, has not 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
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 prop-
erty 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 transac-
tion 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

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

2
Although the parties did not argue this issue with specificity on appeal,
they raised the overarching issue of whether the forfeiture license un-
blocked 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.
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 under-
neath the ellipsis? Does the addition of the second “the”
change the original meaning? Could it be that OFAC autho-
rized 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
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 other than
the IEEPA or UNPA. As explained previously, the forfeiture
license must have been issued under GTSR in order to consti-
tute a valid license. Infra at 37. An examination of GTSR’s
authority reveals that its substantive authority (i.e., its author-
ity 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
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 proceed-
ing, thereby making them available to any qualified claimant,
the funds are no longer blocked under TRIA.3 The Fifth Circuit,
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 restrain-
ing 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).

3
From all indications, it appears that the Fifth Circuit in Holy Land had the
benefit of a copy of the forfeiture license in the record, a benefit not
provided by the government in this case.
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 govern-
ment 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.4 And, since the funds were no
longer blocked under IEEPA, they were no longer reachable 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.

4
The assets in Holy Land were blocked under IEEPA, not the Trading With
the Enemy Act. Holy Land, 722 F.3d at 685.
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 under-
stood.
In Estate of Heiser, the plaintiffs sued the Telecommunica-
tions Company of Iran under the Foreign Sovereign Immuni-
ties 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 to telecommunication companies that handled traffic
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
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 re-
moved 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.”5 31 C.F.R. §594.307. Subpart E of the
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

5
Each part of the OFAC regulations contains its own definitions so it is
necessary to examine the definitions specific to the sanction regime at issue.
See 31 C.F.R. § 501.301.
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 Execu-
tive 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 gen-
eral 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 ex-
plained: “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
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 forfei-
ture’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 or restraint of the defendant res is necessary for the
district court to secure its in rem jurisdiction.)).6 If an OFAC
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

6
An examination of Rule G(3)(b) of the Supplemental Rules of Admiralty
or Maritime Claims and Asset Forfeiture also reveals this to be the case.
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 sovereign immunity argument. 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.7 In August 2011, the insurance

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/2791102. Public record. Not legal advice.