United States v. Holy Land Foundation for Relief

United States Court of Appeals

Fifth Circuit

F I L E D

IN THE UNITED STATES COURT OF APPEALS

April 4, 2006

FOR THE FIFTH CIRCUIT

Charles R. Fulbruge III

Clerk

No. 04-11282

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

HOLY LAND FOUNDATION

FOR RELIEF AND DEVELOPMENT, ETC. ET AL,

Defendants,

DAVID J. STRACHMAN, in his capacity as administrator of

the Estate of Yaron Ungar; DVIR UNGAR; YISHAI UNGAR;

JUDITH UNGAR; MEIR UNGAR; MICHAL COHEN;

AMICHAI UNGAR; DAFNA UNGAR,

Appellants.

Appeal from the United States District Court

for the Northern District of Texas

Before BENAVIDES, STEWART, and OWEN, Circuit Judges.

CARL E. STEWART, Circuit Judge:

David J. Strachman, in his capacity as administrator of the Estate of Yaron Ungar; Dvir

Ungar; Yishai Ungar; Judith Ungar; Meir Ungar; Michal Cohen; Amichai Ungar; and Dafna Ungar,

challenges a Texas federal district court’s restraining order that indefinitely freezes specific bank

accounts that allegedly had been levied pursuant to writs of execution, issued by New York, South

Carolina, and Washington federal district courts, in order to satisfy a judgment the appellants obtained

against assets of the Holy Land Foundation For Relief and Development. The allegedly levied bank

accounts are only some of the assets specified in, or otherwise covered by, the restraining order.

Additionally, Strachman urges this court to grant a Motion for Summary Disposition and Vacatur

obviating our consideration of the merits of the appeal. For the following reasons, we deny the

Motion for Summary Disposition, and vacate and remand to the district court for further proceedings.

I. FACTUAL AND PROCEDURAL HISTORY

A forty-two count indictment, filed July 26, 2004, charged Holy Land Foundation for Relief

and Development (“HLF”) with material support of a terrorist organization, tax evasion, and money

laundering and sought forfeiture of HLF property. The Government obtained an ex parte restraining

order, on September 24, 2004, from the District Court for the Northern District of Texas in order to

preserve HLF’s assets for the forfeiture requested in the indictment. The restraining order indefinitely

freezes the assets of HLF and its financial agents.

Appellant David Strachman represents the estates of husband and wife, Yaron and Efrat

Ungar, who were killed during a terrorist attack. In February 2004, Strachman, along with members

of the Ungar family and their representatives, (“the Ungars”) obtained a $116,409,123 default

judgment against Hamas1 in Rhode Island’s federal district court pursuant to the civil provisions of

1

According to the indictment against HLF, “The Harakat al-Muqawama al-Islamiyya is Arabic

for ‘The Islamic Resistance Movement’ and is known by the acronym HAMAS. HAMAS, which is

sometimes referred to by its followers as ‘The Movement,’ is a terrorist organization based in the

2

the Antiterrorism Act of 1991, 18 U.S.C. § 2333.2 See Estates of Ungar ex. rel. Strachman v.

Palestinian Auth., 304 F. Supp. 2d 232, 238, 242 (D.R.I. 2004). The Rhode Island federal district

court determined that its judgment was enforceable against the assets of HLF. Id. at 241. Based on

this judgment, federal district courts in New York, South Carolina, and Washington issued writs of

execution against HLF that the Ungars allege were levied in the respective jurisdictions on or before

September 13, 2004.

The Ungars appeal the restraining order against HLF, requesting that it be vacated, that the

district court be directed to refrain from entering further orders that restrain the property and, in the

alternative, that this court direct the district court to conduct a hearing and provide the Ungars an

opportunity to brief and argue these issues.

II. STANDARD OF REVIEW

Although we review a district court’s order of injunction for abuse of discretion, where the

district court’s decision to grant a motion for injunction turns on the application of statutes or

procedural rules, our review of that interpretation is de novo. Cf. Castillo v. Cameron County, Tex.,

238 F.3d 339, 347 (5th Cir. 2001) (“Although the district court’s decision to continue the injunctions

is to be reviewed for an abuse of discretion, because the district court’s decision to terminate or

continue the injunctions turns on the application of § 3626(b) of the [Prison Litigation Reform Act

of 1995], that interpretation is reviewed de novo.” (citations omitted)).

West Bank and Gaza Strip.”

2

Enacted as part of the Antiterrorism Act of 1991 (“ATA”), 18 U.S.C. § 2333 provides a cause

of action for American nationals injured in their person, property, or business by reason of an act of

international terrorism. Estates of Ungar ex. rel. Strachman v. Palestinian Auth., 304 F. Supp. 2d

232 (D.R.I. 2004).

3

III. DISCUSSION

A. Overview

The assets at issue are the funds in certain “blocked” HLF bank accounts located in New

York, South Carolina, and Washington that were specified, by state and account number, in the Texas

district court’s restraining order.3 The Ungars assert that, before the Texas district court entered this

restraining order on September 24, 2004, they had levied writs of execution on these funds pursuant

to judgments obtained in New York, South Carolina, and Washington federal district courts.

According to the Ungars, this placed these funds in the possession of those courts and thereby

divested the Texas district court of jurisdiction to enter this restraining order.

The Ungars appeal, contending that this court should vacate the restraining order because the

Texas district court was without jurisdiction to enter it, and/or because the attachment provision of

the Terrorism Risk Insurance Act of 2002 (“TRIA”) section 201(a), 28 U.S.C. § 1610(f)(1)(A)

(2000), overrides criminal forfeiture provisions. The Ungars further contend that they are entitled to

have this ex parte restraining order vacated because it was directed toward them yet, in violation of

their Fifth Amendment due process rights, they were given no notice or hearing. Accordingly, we

must determine (1) whether the Texas district court had jurisdiction to enter this order restraining

funds that were subject to a levied writ of execution issued by a federal district court in each of three

3

In Estates of Ungar ex rel. Strachman, 304 F. Supp. 2d at 241, the court explained the blocking

as follows:

On December 4, 2001, the Office of Foreign Asset Control [“OFAC”], a division of

the Treasury Department, determined that the HLF acts “for or on behalf of” Hamas

and was thus a Specially Designated Terrorist under Executive Order 12947 and a

Specially Designated Global Terrorist under Executive Order 13224. Holy Land

Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 64 (D. D.C. 2002). These

designations allowed the Treasury Department to block all of the HLF’s funds,

accounts, and real property. Id.

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other states and, if so, whether the provisions of TRIA supercede the criminal forfeiture provisions

attendant to this § 853(e)(1)(A) order; and (2) whether the Federal Rule of Civil Procedure 65 notice

provisions apply to this 21 U.S.C. § 853(e)(1)(A) restraining order and, if so, whether the Ungars

possess the Fifth Amendment rights they claim were violated by the absence of notice and hearing.

In addition to their appeal, however, the Ungars filed a Motion for Summary Disposition and

Vacatur asking this court not to reach the merits of their appeal and, instead, to summarily render

judgment in their favor because this ex parte restraining order had expired on its face and did not

comply with Federal Rule of Civil Procedure 65 hearing and notice requirements. The motion also

requests that this court direct the district court to provide the Ungars an opportunity to be heard and

to present their arguments in opposition, if the Government seeks a new restraining order.

The Government opposes summary disposition and contends that the Ungars lack standing

to appeal the restraining order. The Government also argues that this case does not meet the standard

for summary disposition.

Prior to reaching the merits, we first address the Ungars’ standing to appeal the restraining

order, then examine whether this case is appropriate for summary disposition.

B. The Ungars’ Standing to Appeal

The Ungars assert that they have standing to appeal the restraining order because it affects

their interests. The Ungars also argue that they are the main targets of the restraining order, yet they

have had no opportunity to oppose, contest, or be heard. The Ungars contend that their interests are

perfectly aligned against the interests of the defendant and the Government, therefore neither party

will raise and protect their rights if they are not permitted to do so themselves.

5

By contrast, the Government argues that the Ungars are statutorily barred from asserting

HLF’s rights in a forfeiture proceeding. The Government asserts that third parties may participate in

forfeiture proceedings only(1) in hearings concerning post-indictment restraint on forfeitable property

where they can assert their own due process claims or claims of irreparable injury, and (2) in post-

conviction ancillary proceedings, where they can assert their interest in the forfeitable property.

“[W]hen standing is placed in issue in a case, the question is whether the person whose

standing is challenged is a proper party to request an adjudication of a particular issue and not

whether the issue itself is justiciable.” Flast v. Cohen, 392 U.S. 83, 99-100 (1968). The three

requirements that constitute the “irreducible constitutional minimum” of standing are “injury in fact,”

causation, and redressability. Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S.

765, 771 (2000) (citations omitted). The first, “injury in fact,” requires that the appellant show

personal harm that is concrete, distinct and palpable, as well as actual or imminent. Whitmore v. Ark.,

495 U.S. 149, 155 (1990). To satisfy the second requirement, the appellant “must establish a causal

connection between the injury and the conduct complained of--the injury has to be fairly traceable to

the challenged action of the defendant, and not the result of some third party not before the court.”

McConnell v. Fed. Election Comm’n, 540 U.S. 93, 225 (2003) (internal quotation marks, alterations,

and citation omitted). The third requirement, redressability, is present if there is a “substantial

likelihood that the requested relief will remedy the alleged injury in fact.” Id. (internal quotation

marks omitted, citing Stevens, 529 U.S. at 771); see also Valley Forge Christian Coll. v. Ams. United

for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982) (“[A]t an irreducible minimum,

Art. III requires the party who invokes the court’s authority to show that he personally has suffered

some actual or threatened injury as a result of the putatively illegal conduct of the defendant, and that

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the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable

decision.” (citations and internal quotation marks omitted)). “The [appellant] must clearly and

specifically set forth facts sufficient to satisfy these Art. III standing requirements. A federal court is

powerless to create its own jurisdiction by embellishing otherwise deficient allegations of standing.”

Whitmore, 495 U.S. at 155-56.

“While there is a general rule that non-parties to a suit do not have standing to appeal, we

have previously stated that exceptions exist. For instance, in Castillo[,] . . . we reaffirmed the

principle that if the decree affects a third party’s interests, he is often allowed to appeal.” SEC v.

Forex Asset Mgmt. LLC, 242 F.3d 325, 329 (5th Cir. 2001) (citation and internal quotation marks

omitted). If an injunction extends to non-parties, they may appeal from it. United States v. Chagra,

701 F.2d 354, 359 (5th Cir. 1983).

The indictment’s forfeiture count asserts the Government’s interest in these blocked assets.

The indictment and the Government’s application for the restraining order each detail the fact that

the HLF property is blocked to all except OFAC and third parties like the Ungars. The purpose of

the restraining order was to keep OFAC, the Ungars, and others like the Ungars, from interfering

with the Government’s interest in these assets. Moreover, the Ungars are specifically mentioned in

the Government’s Application for Post-indictment Restraining Order, and the restraining order

includes a list of, inter alia, the same assets the Ungars claim to have levied in partial satisfaction of

their judgment against Hamas. The order of injunction restrains “persons, financial institutions, or

other entities who have any interest or control over the subject property.” If the Ungars are persons

who have any interest or control over the property at issue, then the restraining order is directed

toward them. The Ungars allege that they have “a personal stake in the outcome of the controversy,”

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and argue that the dispute at bar “touches upon the legal relations of parties having adverse legal

interests.” Flast, 392 U.S. at 101 (citations and internal quotation marks omitted). Having

purportedly levied writs of execution issued by federal district courts against some of the HLF assets

expressly named in this restraining order, the Ungars appear to have an interest in, and arguably may

have some control over, these assets.

It is true that the Ungars did not participate in the proceedings before the Texas district

court.4 Nevertheless, on the face of the injunction and the pleadings that gave rise thereto, it appears

that the injunction seeks to keep the Ungars from obtaining specific assets that are the subject of

federal writs of execution that the Ungars claim to have levied. Under this scenario, we find that the

Ungars have standing to appeal this restraining order.

C. Motion for Summary Disposition and Vacatur

The Ungars’ Motion for Summary Disposition and Vacatur asserts that the restraining order

has expired and is “facially void under Rule 65” and that, therefore, summary disposition is

appropriate. The Government opposes summary disposition and contends that this case is not

appropriate for summary disposition.

Summary disposition is proper “[in] those cases where time is truly of the essence,” or where

“the position of one of the parties is clearly right as a matter of law so that there can be no substantial

question as to the outcome of the case.” Groendyke Transp., Inc. v. Davis, 406 F.2d 1158, 1162 (5th

Cir. 1969). Summary disposition also may be appropriate in other situations, such as when the

4

Pursuant to 28 U.S.C. § 1292(a)(1), we have jurisdiction over an appeal from the district court’s

interlocutory order that granted the injunction. Although the Ungars could have asked the district

court to vacate its order, § 1292 imposes no jurisdictional requirement that they do so.

8

grounds for an order granting or dissolving an injunction no longer exist. See Aerojet-Gen. Corp. v.

Askew, 476 F.2d 184, 186 (5th Cir. 1973).5

Despite the Ungars’ assertion, the instant restraining order is not facially void. The order

states that it “shall remain in full force and effect until further order of this Court,” and thus it has not

expired on its face. Accordingly, we do not summarily vacate the injunction on that basis.

Relying on United States v. Thier, 801 F.2d 1463, 1468 (5th Cir. 1986), the Ungars also

argue that this 21 U.S.C. § 853(e)(1)(A) restraining order should be summarily vacated because it

is the equivalent of an ex parte temporary restraining order that was not issued in compliance with

Federal Rule of Civil Procedure 65. It is true that this restraining order was issued pursuant to 21

U.S.C. § 853(e)(1)(A) in order to protect the Government’s interest in assets alleged to be subject

to criminal forfeiture. It is also true that, under Their, Federal Rule of Civil Procedure 65 notice and

hearing requirements for ex parte orders apply to § 853(e)(1)(A) restraining orders. Yet, as discussed

infra in Part III.F.2., Their has been overruled, albeit on grounds other than its holding that Federal

Rule of Civil Procedure 65 governs § 853(e)(1)(A) restraining orders, and a panel of this court has

questioned whether Rule 65 still governs § 853(e)(1)(A) restraining orders. Accordingly, we find that

the merits of the opposing positions at bar are not so clear as to warrant summary disposition, and

we deny the Ungars’ request that we summarily dispose of this appeal without reaching its merits.

D. Jurisdiction of the Texas District Court to Enter the Restraining Order

5

In Aerojet, the United States District Court for the Northern District of Florida dissolved an

injunction specifically to encourage instigation of a state court suit to quiet title, and Aerojet appealed

the dissolution order. Aerojet, 476 F.2d at 186. In a related state court suit to quiet title, Aerojet

sought and obtained removal to the District Court for the Southern District of Florida. Id. at 185-186.

As to Aerojet’s appeal of the order dissolving the injunction, this court found that it would be a waste

of money and judicial energies to allow full briefing and argument because the “express grounds for

the district court’s (Northern District) order have now evaporated.” Id. at 186.

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1. Overview of Jurisdictional Issue

On September 24, 2004, the Texas district court ordered that “persons, financial institutions,

or other entities who have any interest or control over the subject property are hereby restrained,

enjoined and prohibited . . . from . . . distributing” any of the HLF funds listed in Attachment A to

the Government’s application for the restraining order. Prior to September 24, 2004, funds in some

of the accounts listed in Attachment A were levied pursuant to a writ of execution issued by a federal

district court in each of the following states: New York, South Carolina, and Washington.

Citing Wong Shing v. M/V Mardina Trader, 564 F.2d 1183, 1188 (5th Cir. 1978), the Ungars

contend that these accounts were withdrawn from the jurisdiction of all other courts because the

levied writs of execution placed them in custodia legis.6 The Ungars contend that other courts of

competent jurisdiction had alreadytaken possession of the bank accounts, therefore, the Texas district

court had no jurisdiction to issue an order restraining transfer or other disposition of these HLF funds.

By contrast, the Government contends that property is placed in custodia legis only via an

in rem judgment. According to the Government, the Ungars’ action and judgment against Hamas was

in personam, and registration of this in personam judgment in other federal district courts did not

convert their action into an in rem proceeding. The Government asserts that because there was no

in rem proceeding before them, the courts that issued writs of execution did not have exclusive

jurisdiction over HLF assets and, therefore, the Texas district court had jurisdiction to enter the

restraining order.

2. Applicable Law

6

In custodia legis means “[i]n the custody or keeping of the law.” Black’s Law Dictionary, 691

(5th ed. 1979); see also In re Chesnut, 422 F.3d 298, 301 (5th Cir. 2005) (explaining that in custodia

legis means “literally, ‘in the custody of the law’; loosely, ‘in the care of the court’”).

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The procedure and proceedings on, and in aid of, a judgment or execution thereof “shall be

in accordance with the practice and procedure of the state in which the district court is held . . .

except that any statute of the United States governs to the extent that it is applicable.” Fed. R. Civ.

P. 69(a). In the instant context, to “levy” is “[t]o take or seize property in execution of a judgment”;

to “garnish” is “to attach (property held by a third party) in order to satisfy a debt”; and to “attach”

is “[t]o take or seize under legal authority. Black's Law Dictionary, 927, 702, 136 (8th ed.2004). A

garnishee is “a person or institution (such as a bank) that is indebted to or is bailee for another whose

property has been subjected to garnishment.” Black’s Law Dictionary, 691 (5th ed. 1979); see also

N.Y.C.P.L.R. § 105 (i) (McKinney 1997) (“A ‘garnishee’ is a person who owes a debt to a judgment

debtor, or a person other than the judgment debtor who has property in his possession or custody in

which a judgment debtor has an interest.”).

The Ungars are judgment creditors, having obtained a judgment against HLF’s assets. Each

financial institution served with a writ of execution is a garnishee, a holder of property in which the

judgment debtor, HLF, has an interest. The writs of execution contain the following language:

YOU ARE COMMANDED, that of the goods, chattels and other assets of

HAMAS . . . in your district, you cause to be made the total sum of

[$116,409,123.00] which lately in the United States District Court for the District of

Rhode Island, [the Ungars] recovered against HAMAS . . . , in an action between [the

Ungars and Hamas], and said judgment was entered on February 11, 2004, in favor

of [the Ungars] and registered on [6/1/2004 in S.D., N.Y.; 7/29/2004 in W.D., Wa.;

8/24/2004 in D., S.C.] . . . .

Pursuant to § 201 of the Terrorism Risk Insurance Act of 2002 . . . this Writ

shall also be effective to execute upon the goods, chattels and other assets of The

Holy Land Foundation . . . (“HLF”) in satisfaction of [the Ungars’] judgment against

[Hamas], and the phrase, “goods, chattels and other assets of HAMAS . . .” appearing

herein shall therefore also include goods, chattels and other assets of the HLF.

11

Each levy specifies the HLF account(s) and purports to be signed by a United States Marshal or

deputy. The Washington levy shows personal service upon the financial institution on September 3,

2004, and the South Carolina levy shows personal service on September 14, 2004. The New York

levy indicates that it was served upon a financial institution, but the date of service is illegible and

there is no indication of whether the service was personal or otherwise.

New York, South Carolina, and Washington have similar yet distinct means of handling

execution of the Ungars’ judgment by levying upon HLF bank accounts. Our review of the record

reveals that none of the levies was perfected so as to transfer possession or control of HLF’s interest

in the bank accounts to the respective federal district courts or to the Ungars in such a manner that

the Ungars may now challenge the Texas district court’s jurisdiction to enter the restraining order.

2. The New York Levy

In New York, levy of a writ of execution upon a bank account is accomplished by the service

of the proper documents upon the bank by the sheriff. N.Y.C.P.L.R.§ 5232 (McKinney 1997). Once

this is done, the levy is valid for ninety days. Id.

At the expiration of ninety days after a levy is made by service of the execution, or of

such further time as the court, upon motion of the judgment creditor or support

collection unit has provided, the levy shall be void except as to property or debts

which have been transferred or paid to the sheriff or to the support collection unit or

§ as to which a proceeding under sections 5225 or 5227 has been brought.

Id.; see also Lennox v. Brady, 101 N.Y.S. 2d 22, 24 (N.Y. Sup. Ct. 1950) (stating that “a levy is

rendered void where the property levied upon under a warrant of attachment is not reduced to actual

possession” or turnover proceedings instituted, within the ninety day period). The record does not

indicate that, (1) during the ninety days after levy upon the New York bank account, HLF property

was transferred into the possession or control of the sheriff; or (2) the Ungars perfected the levy by

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commencing a turnover proceeding directed against the holder of the property. If either is not done

within the ninety day period, the levy is void. See generally N.Y.C.P.L.R.§§ 5232, 5225, 5227

(McKinney 1997); Wordie v. Chase Manhattan Bank, 529 N.Y.S.2d 1,1 (N.Y. App. Div. 1988).

The Ungars assert that service of the proper documents upon the New York banks occurred

on September 2, 2004. Assuming arguendo that this is true, the record reflects no transfer of the

funds from the banks to the United States Marshal or sheriff, and no acknowledgment or other

indication by the banks that the United States Marshal or sheriff has control of HLF’s interest in the

accounts. Likewise, the record reflects no commencement of turnover proceedings.7 Accordingly, the

levy became void on or about December 2, 2004. Although it is arguable whether the New York levy

divested the Texas district court of jurisdiction to enter the restraining order as to the funds in New

York accounts, it is undisputed that the New York levy is void. “It is well-settled that no recovery

may be had for losses which the purportedly injured party might have prevented by reasonable efforts

and expenditures.” Wordie, 140 A.D. 2d at 436, 529 N.Y.S. 2d at 2 (citation omitted). The Ungars

allowed the New York levy to lapse and become void by failing to pursue, within the prescribed

ninety day period, the statutory mechanisms available to perfect the levy. Cf. id.; but see In re Flax,

179 B.R. 408 (E.D. N.Y. 1995) (“New York courts have not held the Sheriff’s failure to obtain

possession of the property to be seized fatal to the lienor’s interest in every case, but the courts have

made an exception only where the failure is caused by a third party’s failure to comply with the

7

Although not a part of the instant record, the docket of the District Court for the Southern

District of New York reveals that, on April 11, 2005, the Ungars instituted turnover proceedings

against the New York banks, pursuant to sections 5225 or 5227 of the New York Civil Practice Law

and Rules –well after the date in early December 2004 when the levy became void.

13

Sheriff’s directives to turn over the property.”). There being no valid New York levy, we decline to

grant relief to the Ungars based upon a levy allowed to become void by their inaction.

3. The South Carolina Levy

In South Carolina, a judgment creditor executes upon personal property of the judgment

debtor via attachment. S. C. Code Ann. § 15-19-10 (1976). Personal property is bound for four

months from the date of levy. S. C. Code Ann. § 15-39-100 (1979). As in New York, a South

Carolina bank may comply with the levy and give possession to the sheriff upon levy, but there must

be a separate garnishment action against the bank in order to make a levy effective if the bank does

not give the sheriff possession or control. See Johnson v. Serv. Mgmt. Inc., 478 S.E.2d 63 (S.C.

1996); Johnson v. Serv. Mgmt. Inc., 459 S.E.2d 900 (S.C. Ct. App.1995), aff’d, 478 S.E.2d 63 (S.C.

1996). There is no valid levy until the sheriff has either possession or the power to possess or control.

McManus v. Bank of Greenwood, 171 S.E. 473 (S.C. 1933).

The instant record contains no indication that the South Carolina bank gave possession or

control of the bank account (or HLF’s interest therein) to the United States Marshal or sheriff, and

no indication the Ungars commenced the requisite action to make the levy effective. Accordingly, the

Ungars have not shown that the South Carolina levy divested the Texas district court of jurisdiction

to restrain the funds in HLF’s South Carolina bank accounts.

4. The Washington Levy

Under Washington state law, when a judgment creditor seeks to obtain a judgment debtor’s

property from a bank as garnishee, there must be a specific proceeding in which a writ of garnishment

is directed to the bank. Wash. Rev. Cod. Ann. §§ 6.27.20 - 6.27.370 passim (West 1995); see also

Yakima Adjustment Serv., Inc. v. Durand, 622 P.2d 408, 412 (Wash. Ct. App. 1981) (“[U]pon being

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served with a writ of garnishment the garnishee must answer and disclose what funds, if any, he holds

that are due or owing to a defendant. He must serve the answer on a defendant, [Wash. Rev. Cod.

§§ 6.27.110, 6.27.190], who may thereafter controvert it by way of affidavit. The issue is thus formed

and the matter then tried.”).

While a garnishment is an in rem proceeding that places property in custodia legis, the

garnishment provisions are separate and distinct from the provisions for writ of execution and levy.

U. S. Fid. & Guar. Co. v. Hollenshead, 98 P 749, 750 (Wash. 1909). Compare Wash. Rev. Cod.

Ann. § 6.17.160(7) (West 1995) (“Other intangible personal property may be levied on by serving

a copy of the writ on, or mailing it to, the judgment debtor in the manner as required by RCW

6.17.130, together with a description of the property.”); Wash. Rev. Cod. Ann. § 6.27.080 (West

1995) (“A writ of garnishment is effective against property in the possession or control of a financial

institution only if the writ of garnishment is directed to and names a branch as garnishee defendant.”).

Thus, the Ungars’ Washington levy could have been valid if it were in execution of a judgment

rendered in a garnishment proceeding. Nothing in the record shows that the Ungars served a writ of

garnishment upon the Washington bank. The record reveals nothing about garnishment proceeding,

or a judgment (or execution/levy thereof) that resulted from such a proceeding. Accordingly, there

appears to have been no bar to the Texas district court’s jurisdiction to enter the restraining order as

to the HLF bank accounts in Washington.

5. Summary of Jurisdictional Analysis

Neither the South Carolina nor the Washington levy placed HLF funds in the custody of a

court or its officer so as to remove the funds from the jurisdiction of the Texas district court. The

New York levy arguably divested other courts of jurisdiction during the ninety day period following

15

service, but that levy is void and therefore is not a proper basis for the relief requested by the Ungars.

Under these circumstances, the Ungars have not demonstrated that the Texas district court was

without jurisdiction to include the HLF bank accounts in South Carolina or Washington in its order

restraining HLF assets. Moreover, the Ungars may not challenge entry of this restraining order on

the basis of a levy they allowed to become void. For these reasons, the Ungars’ jurisdictional

argument fails.

E. The Terrorism Risk Insurance Act of 2002 § 201(a) and 21 U.S.C. § 853

The Ungars next argue that the Terrorism Risk Insurance Act of 2002 (“TRIA”) section

201(a), 28 U.S.C. § 1610(f)(1)(A) (2000), permits attachments and executions “notwithstanding any

other provision of law,” and that the legislative purpose of the TRIA is such that § 1610(f)(1)(A)

trumps any forfeiture provisions and proceedings. Thus, they contend, § 1610(f)(1)(A) overrides

statutorylimitations on attachment and execution, and all blocked HLF assets are subject to execution

under § 1610(f)(1)(A), without regard to whether they are tainted property otherwise subject to

restraint or criminal forfeiture. The basis for this argument is the § 1610(f)(1)(A) provision that,

“notwithstanding any other provision of law, . . .” blocked assets (such as the restrained HLF bank

accounts) “shall be subject to execution or attachment in aid of execution of any judgment relating

to a claim” such as the claim upon which the Ungars prevailed against Hamas.8 28 U.S.C. §

1610(f)(1)(A) (2000); Estates of Ungar ex rel. Strachman, 304 F. Supp. 2d at 241-42.

The Government counters this argument by pointing out that, as third parties rather than

owners of the restrained assets, the Ungars may not assert HLF’s rights. The Government asserts that

8

The Ungars and the Government agree that the Ungars’ judgment against Hamas, the nature of

HLF’s blocked assets, and the related New York, South Carolina, and Washington federal district

court judgments are within the scope of § 1610(f)(1)(A).

16

ancillary proceedings under the criminal forfeiture statute are the exclusive means by which third

parties may assert their interest in forfeitable property, and contends that the Ungars may not assert

their alleged interest in HLF’s forfeitable property prior to entry of an order of forfeiture. This

contention is grounded in 21 U.S.C. § 853 which provides that (1) “[n]o party claiming an interest

in property subject to forfeiture under this section may intervene in a trial or appeal of a criminal case

involving the forfeiture,” or “commence an action at law or equity against the United States

concerning the validity of his alleged interest in the property subsequent to the filing of an indictment

or information alleging that the property is subject to forfeiture under this section,” except as

provided in § 853(n); and (2) after entry of an order of forfeiture, a third party may “petition the court

for a hearing to adjudicate the validity of his alleged interest in the property.” 21 U.S.C. §§ 853(k),

853(n)(2).

The Ungars are not parties to the instant criminal case; they have appealed but have not

commenced an action against the United States. Likewise, they have not intervened in the criminal

case against HLF. See Fed. R. Civ. P. 24(c) (“A person desiring to intervene shall serve a motion to

intervene upon the parties as provided in Rule 5. The motion shall state the grounds therefor and shall

be accompanied by a pleading setting forth the claim or defense for which intervention is sought.”).

Accordingly, their appeal is outside the scope of §§ 853(k) and 853(n)(2). While § 853(n)(2) permits

a third party to petition the court after entry of a forfeiture order, § 853 does not require entry of a

forfeiture order before third parties in the Ungars’ procedural posture may challenge an ex parte,

post-indictment restraining order that specifies bank accounts subject to writs of execution issued by

other federal district courts. Similarly, § 1610(f)(1)(A) does not purport to override the issuance of

such a restraining order. This subsection of the TRIA provides as follows:

17

Notwithstanding any other provision of law, . . . any property with respect to which

financial transactions are prohibited or regulated pursuant to section 5(b) of the

Trading with the Enemy Act (50 U.S.C. App. 5(b)), section 620(a) of the Foreign

Assistance Act of 1961 (22 U.S.C. 2370(a)), sections 202 and 203 of the International

Emergency Economic Powers Act (50 U.S.C. 1701-1702), or any other proclamation,

order, regulation, or license issued pursuant thereto, shall be subject to execution or

attachment in aid of execution of any judgment relating to a claim for which a foreign

state (including any agency or instrumentality or such state) claiming such property

is not immune under section 1605(a)(7).

28 U.S.C. § 1610(f)(1)(A) (2000). The Ungars contend that the “notwithstanding” clause overrides

all legal barriers to execution that prevent them from obtaining these HLF assets in satisfaction of

their judgment against Hamas.

The purpose of the Foreign Sovereign Immunities Act of 1976 (“FSIA”), 28 U.S.C. §§ 1330,

1602-11, is to set forth principles by which a federal court decides a foreign state’s claim that its

property is immune from jurisdiction.9 28 U.S.C. § 1602 (“Claims of foreign states to immunity

should henceforth be decided by courts of the United States and of the States in conformity with the

principles set forth in this chapter.”). Subject to certain international agreements involving the United

States, a foreign state’s property in the United States is immune from attachment arrest and execution

9

United States Code, Title 28. Judiciary and Judicial Procedure, Part IV. Jurisdiction and Venue,

Chapter 97. Jurisdictional Immunities of Foreign States, states its purpose as follows:

§ 1602. Findings and declaration of purpose

The Congress finds that the determination by United States courts of the claims of foreign

states to immunity from the jurisdiction of such courts would serve the interests of justice and

would protect the rights of both foreign states and litigants in United States courts. Under

international law, states are not immune from the jurisdiction of foreign courts insofar as their

commercial activities are concerned, and their commercial property may be levied upon for the

satisfaction of judgments rendered against them in connection with their commercial activities.

Claims of foreign states to immunity should henceforth be decided by courts of the United

States and of the States in conformity with the principles set forth in this chapter.

18

except as provided in 28 U.S.C. §§ 1610 and 1611. 28 U.S.C. § 1609. The TRIA amended § 1610

of the FSIA, which is titled “Exceptions to the immunity from attachment or execution” to make

available assets that might otherwise be immune from execution. The TRIA’s legislative history

clarifies that the purpose of § 1610(f)(1)(A) is “to strip a terrorist state of its immunity from

execution or attachment in aid of execution.” 148 Cong. Rec. S11528 (daily ed. Nov. 19, 2002)

(statement of Sen. Harkin); see also Hill v. Republic of Iraq, 2003 WL 21057173 at *2 (D. D.C.

Mar. 11, 2003) (holding that the § 1610(f)(1)(A) notwithstanding clause “overrides any immunity

from execution that blocked [terrorist party] property might otherwise enjoy”). Thus, the purpose

of § 1610(f)(1)(A) appears to be to provide a general exception to a foreign state’s immunity from

execution and attachment. See TRIA, Pub. L. No. 107-297, Title II, section 201(a), 116 Stat. 2322,

2337 (2002) (where the general nature of section 201(a) is emphasized as follows: “In General.

Notwithstanding any other provision of law . . . .”)

We conclude that the “notwithstanding” language relied on by the Ungars appears to target

statutory immunities to execution. The criminal forfeiture statute does not immunize HLF bank

accounts from writs of execution. The challenged restraining order freezes and preserves the accounts

until the claims to them can be prioritized in ancillary proceedings. The TRIA does not address these

circumstances. Because the issues at bar do not involve a foreign state’s or terrorist party’s FSIA

immunity from execution, we find no basis to conclude that § 1610(f)(1)(A) preempts, trumps, or

otherwise interferes with the operation of 21 U.S.C. § 853 criminal forfeiture provisions.

F. No Intervening Precedent has Changed the Fifth Circuit’s Holding that Federal Rule of Civil

Procedure 65 applies to § 853(e)(1)(A) Restraining Order

19

The Ungars assert that the notice and hearing requirements of Federal Rule of Civil Procedure

65 apply to ex parte restraining orders and injunctions issued under 21 U.S.C. § 853(e)(1)(A).

Arguing that the restraining order was aimed entirely at the Ungars, not at the criminal defendants,

the Ungars maintain that they should have been provided prior notice and a hearing as required by

Rule 65. They contend that failure to comply with Rule 65 notice and hearing requirements violated

their Fifth Amendment due process rights and rendered the restraining order void.

The Government asserts that Federal Rule of Civil Procedure 65 notice must be given to the

property owner, HLF, and that this notice was given, via the indictment. The Government further

asserts that HLF does not have an automatic right to a hearing under the forfeiture statute. The

Government points out that the Ungars cite no authority for the proposition that a third party with

an unperfected interest in a criminal defendant’s forfeitable property has a right under Rule 65 to

notice and a hearing prior to the entry of a forfeiture restraining order. Moreover, the Government

argues, the Ungars are not the only judgment creditors that can seek to attach HLF’s blocked assets.

The Government also contends that the Federal Rule of Civil Procedure 65 ten-day time limit

for temporary restraining orders does not apply to ex parte post-indictment forfeiture restraining

orders. Section 853 provides a ten-day limit for ex parte pre-indictment orders and a ninety-day limit

for other pre-indictment orders, but provides no time limit for post-indictment restraining orders.

Therefore, the Government argues, § 853 post-indictment restraining orders, like preliminary

injunctions, have an indefinite duration.

1. Applicable Law

Upon application of the United States, a district court may enter a restraining order or an

injunction, or take any other action to preserve the availability of forfeitable property “[u]pon the

20

filing of an indictment or information charging a violation . . . for which criminal forfeiture may be

ordered under this section and alleging that the property with respect to which the order is sought

would, in the event of conviction, be subject to forfeiture under this section.” 21 U.S.C. §

853(e)(1)(A). The requirements of Federal Rule of Civil Procedure 65 apply to the issuance of

restraining orders and injunctions issued pursuant to 21 U.S.C. § 853(e)(1)(A). United States v.

Thier, 801 F.2d 1463, 1468 (5th Cir. 1986); United States v. Melrose E. Subdivision, 357 F.3d 493,

505 n.12 (5th Cir. 2004) (“As a general matter, the Federal Rules presumptively apply except to the

extent that they actually conflict with a subsequent statute.”). Federal Rule of Civil Procedure 65

provides, in pertinent part, as follows:

(a) Preliminary Injunction.

(1) Notice. No preliminary injunction shall be issued without notice to the

adverse party.

....

(b) TemporaryRestraining Order; Notice; Hearing; Duration. A temporary restraining

order may be granted without written or oral notice to the adverse party or that

party’s attorney only if

(1) it clearly appears from specific facts shown by affidavit or by the verified

complaint that immediate and irreparable injury, loss, or damage will result to the

applicant before the adverse party or that party’s attorney can be heard in opposition,

and

(2) the applicant’s attorney certifies to the court in writing the efforts, if any,

which have been made to give the notice and the reasons supporting the claim that

notice should not be required.

Every temporary restraining order granted without notice shall be indorsed with the

date and hour of issuance; shall be filed forthwith in the clerk’s office and entered of

record; shall define the injury and state why it is irreparable and why the order was

granted without notice; and shall expire by its terms within such time after entry, not

to exceed 10 days, as the court fixes, unless within the time so fixed the order, for

good cause shown, is extended for a like period or unless the party against whom the

order is directed consents that it may be extended for a longer period. The reasons for

the extension shall be entered of record. In case a temporary restraining order is

21

granted without notice, the motion for a preliminary injunction shall be set down for

hearing at the earliest possible time and takes precedence of all matters except older

matters of the same character; and when the motion comes on for hearing the party

who obtained the temporary restraining order shall proceed with the application for

a preliminary injunction and, if the party does not do so, the court shall dissolve the

temporary restraining order.

Although Federal Rule of Civil Procedure 65(b) allows the ex parte issuance of restraining orders

under certain limited circumstances, it also provides that an ex parte restraining order is effective for

a maximum of ten days unless the court extends it for one additional ten-day period for good cause

shown, or unless the “party against whom the order is directed consents [to an extension].” Fed. R.

Civ. P. 65(b); Thier, 801 F.2d at 1469; Phillips v. Chas. Schreiner Bank, 894 F.2d 127, 130 n.5 (5th

Cir. 1990). An ex parte order that purports to be of indefinite duration is a preliminary injunction

rather than a temporary restraining order. Phillips, 894 F.2d at 130 n5.

The Federal Rule of Civil Procedure 65(a)(1) notice requirement “mean[s] that where factual

disputes are presented, the parties must be given a fair opportunity and a meaningful hearing to

present their differing versions of those facts before a preliminary injunction may be granted.” Kaepa,

Inc. v. Achilles Corp., 76 F.3d 624, 628 (5th Cir. 1996) (footnote, citation, and internal quotation

marks omitted). The Federal Rule of Civil Procedure 65(a)(1) notice should complywith Federal Rule

of Civil Procedure 65(d), which requires five days’ notice before a hearing on a motion. Harris

County, Tex. v. CarMax Auto Superstores Inc., 177 F.3d 306, 326 (5th Cir. 1999) (citing Marshall

Durbin Farms, Inc. v. Nat’l Farmers Org., 446 F.2d 353, 358 (5th Cir.1971)). Because

“[c]ompliance with Rule 65(a)(1) is mandatory,” a preliminary injunction granted without adequate

notice and a fair opportunity to oppose it should be vacated and remanded to the district court.

Harris County, 177 F.3d at 326 (citing Parker v. Ryan, 960 F.2d 543, 544 (5th Cir. 1992)). The

22

language of Federal Rule of Civil Procedure 65(a)(1) requires notice to the “adverse party.” In

dealing with a preliminary injunction, the “adverse party” means the party adversely affected by the

injunction, not the opponent in the underlying action. Parker v. Ryan, 960 F.2d 543, 545 (5th Cir.

1992).

The Government contends that Thier’s application of Federal Rule of Civil Procedure 65 to

§ 853(e)(1)(A) ex parte, post indictment restraining orders was called into serious question by United

States v. Monsanto, 491 U.S. 600 (1989), and asserts that, in light of Monsanto, the Ungars are not

entitled to a Federal Rule of Civil Procedure 65 automatic hearing. “It is well-established that one

panel of our court will not overturn another absent an intervening precedent by our court sitting en

banc or a Supreme Court precedent.” FDIC v. Dawson, 4 F.3d 1303, 1307 (5th Cir.1993); see also

United States v. Fowler, 216 F.3d 459, 460 (5th Cir.2000); United States v. Avants, 367 F.3d 433,

441 (5th Cir.2004). Therefore, if the Ungars are an “adverse party” for purposes of Federal Rule of

Civil Procedure 65, then we are constrained by Thier and its progeny to find that (1) the Ungars were

entitled to notice, (2) absence of this notice requires that the restraining order be dissolved, and (3)

the Ungars are entitled to notice and a hearing before the New York, South Carolina, or Washington

bank accounts are restrained indefinitely –unless there is intervening precedent by our court, en banc,

or by the Supreme Court.

2. Thier and Monsanto in the United States Fifth Circuit Court of Appeals

In Thier, 801 F.2d. at 1468, this court considered the absence of a specified duration for the

post-indictment order in the language of § 853(e)(1)(A) and, inter alia, held the following:

The statute does not on its face or by necessary implication bar minimum due process

protections. The wording of § 853 does not expressly or impliedly negate the

applicability of Fed. R. Civ. P. 65. The requirements of Rule 65 apply to the issuance

23

of all restraining orders and injunctions by the courts of the United States. Since those

requirements were not excluded, they apply to restraining orders and injunctions

issued pursuant to 21 U.S.C. § 853(e)(1)(A).

The Government correctly notes that the indictment constituted notice to HLF sufficient for issuance

of a temporary restraining order, but under Thier’s application of Federal Rule of Civil Procedure

65,10 the duration of that order could be no longer than ten days (twenty days, if HLF consented

thereto). The district court specified that this ex parte restraining order “shall remain in full force and

effect until further notice of this Court.” Because of its indefinite duration, under Thier, this

restraining order is a preliminary injunction issued in violation of Federal Rule of Civil Procedure

65(a)(1). Cf. Phillips, 894 F.2d at 130 n.5.

Citing Melrose East Subdivision, 357 F.3d at 504, the Government asserts that Thier was

driven by the belief that Federal Rule of Civil Procedure 65 embodies “minimum due process

protections” that must be enforced in criminal forfeiture proceedings, but that this theory was called

into serious question by Monsanto. The Government asserts that this court should follow the

approach adopted by the Tenth and Fourth Circuits that no automatic hearing is required under

Federal Rule of Civil Procedure 65 in light of Monsanto, following United States v. Jones, 160 F.3d

641, 645-47 (10th Cir. 1998).

10

As stated in Thier, 801 F.2d at 1468-1469,

Congress has determined that the context of a post-indictment restraining order

presents sufficient exigencies to satisfy the first requirement of Rule 65 that

irreparable loss would occur before a hearing could take place. See S.Rep. No. 225,

98th Cong., 2d Sess. 203, reprinted in 1984 U.S.Code Cong. & Ad.News 3182, 3386.

Therefore the government need not make any showing of potential irreparable loss

other than the return of the described form of indictment. Congress intended for the

indictment itself to constitute sufficient notice of the government’s intent to seek

forfeiture. Id.

24

In Melrose East Subdivision, the issue at bar was, at a hearing challenging the issuance of a

pretrial restraining order pursuant to a civil forfeiture statute, whether the Government must show

probable cause instead of substantial likelihood of success on the merits. The court observed that

Thier found applicable to 21 U.S.C. § 853(e)(1)(A) the “substantial likelihood of success” standard

typically required for preliminary injunctions but Monsanto had concluded that due process permitted

the Government to restrain assets needed to pay counsel upon a showing of probable cause. Although

the civil forfeiture statute in Melrose East Subdivision was “textually very similar” to § 853(e)(1)(A),

there was no comment on whether Monsanto had changed Thier except as follows:

Whether or not all of Thier remains good law in the context of 21 U.S.C. §

853(e)(1)(A), this new guidance from the Supreme Court convinces us that in the

context of § 983(j)(1)(A) --a statute enacted after Monsanto– Thier should not be

carried over to the extent that it would require the government to show more than

probable cause in order to restrain assets.

Melrose East Subdivision, 357 F.3d at 504. Thier’s determination that Federal Rule of Civil

Procedure 65 applies to 21 U.S.C. § 853(e)(1)(A) restraining orders was not discussed. See Melrose

East Subdivision, 357 F.3d at 505 n.12. But the court did state the following:

This case therefore does not implicate the question whether the district court may in

its discretion hold a pre-restraint hearing, or indeed whether it must hold a

pre-restraint hearing as a matter of due process. There is authority for the proposition

that due process does not require a pre-restraint hearing in the context of

post-indictment restraining orders under 21 U.S.C. § 853(e)(1)(A), the criminal

analogue of § 983(j)(1)(A). See United States v. Monsanto, 924 F.2d 1186, 1192-93

(2d Cir. 1991) (en banc), on remand from 491 U.S. 600, 109 S.Ct. 2657, 105 L.Ed.2d

512 (1989); United States v. Musson, 802 F.2d 384, 387 (10th Cir. 1986). But cf.

United States v. James Daniel Good Real Prop., 510 U.S. 43, 52-57, 62, 114 S.Ct.

492, 126 L.Ed.2d 490 (1993) (holding that due process requires a hearing before the

government may seize real property pending the resolution of a civil forfeiture action).

Thus, the Government is not alone in its assertion that Federal Rule of Civil Procedure 65 notice and

hearing requirements do not apply to § 853 post-indictment restraining orders.

25

In addition, at least one district court within the Fifth Circuit has chosen to follow the Tenth

Circuit rather than Thier. Faced with a motion to dissolve a § 853 ex parte restraining order, it held

that a post-restraint, pre-conviction hearing is not required before denial of defendant’s motion to

dissolve “absent a prima facie showing, made through a properly supported motion, that [the

defendant] needs the assets for reasonable and necessary legal and/or living expenses, and that the

grand jury erred in determining the assets are either proceeds from or traceable to the offenses

charged in the Superseding Indictment.” United States v. Causey, 309 F. Supp. 2d 917, 924-27 (S.D.

Tex. 2004) (following United States v. Jones, 160 F.3d 641, 647 (10th Cir. 1998) and citing United

States v. Jamieson, 189 F. Supp. 2d 754, 757 (N.D. Ohio 2002)). In effect, this district court decided

that the Federal Rule of Civil Procedure 65 ten day limit for ex parte orders did not apply to the §

853(e)(1)(A) restraining order.11

The Causey district court correctly noted that, “[b]ecause the district court held an extensive

four-day hearing on the issue of probable cause and because the Second Circuit had not addressed

the procedural due process issue, the [Monsanto] Court did not consider whether due process

requires a pre-restraint hearing.” Causey 309 F. Supp.2d at 925. Likewise, the Causey district court

accurately observed that Melrose did not address the question whether the district court may in its

discretion, or must as a matter of due process, hold a pre-restraint hearing. Id. at 926. Yet, there has

been no en banc precedent from this court that changes Their’s ruling that a § 853 ex parte, post

11

Cf. United States v. Gelb, 826 F.2d 1175, 1176 (2d Cir. 1987):

Although a post-indictment restraining order based on RICO’s forfeiture provisions

may issue with a minimum of process, Congress appears to have provided no

durational limitation to its reach short of the termination of the related criminal

prosecution. Compare 18 U.S.C. § 1963(d)(1)(B) and (d)(2). A post-indictment

restraining order is thus very similar to a preliminary injunction.

26

indictment restraining order is subject to Federal Rule of Civil Procedure 65. Nevertheless, as we

noted in Melrose, there is authority for the Government’s position that Monsanto has cast serious

doubt upon Thier’s holding that a hearing is required for such a restraining order.

There is a circuit split on this issue. See United States v. Monsanto, 924 F.2d 1186, 1192-93

(2d Cir. 1991) (en banc), on remand from 491 U.S. 600 (1989) (finding no Rule 65 requirement for

a § 853 ex parte, post indictment restraining order); accord United States v. Musson, 802 F.2d 384,

387 (10th Cir. 1986); accord United States v. Jones, 160 F.3d 641, 647 (10th Cir. 1998). In contrast

to these Second and Tenth Circuit cases, shortly after Monsanto was decided, the Ninth Circuit

reaffirmed its decision in United States v. Crozier, 777 F.2d 1376 (9th Cir.1985), that Federal Rule

of Civil Procedure 65 applies to post-indictment pre-conviction restraining orders:12

In the absence of valid procedural guidelines in the forfeiture provisions of the Act,

we held that Rule 65 of the Federal Rules of Civil Procedure applies to require a

district court to hold a prompt hearing after a TRO is granted to determine whether

a preliminary injunction should issue. [Crozier, 777 F.2d] at 1384. This holding is not

inconsistent with United States v. Monsanto, 491 U.S. 600, 109 S.Ct. 2657, 105

L.Ed.2d 512 (1989). There, the Supreme Court explicitly refused to decide whether

a hearing in connection with a restraining order pending trial was required and what

type of hearing, if any, would satisfy the requirements of due process. Id. 109 S.Ct.

at 2666 n. 10. The law of our circuit therefore remains that in order for a restraining

order under § 853 to be constitutional, the district court must hold a hearing under

Rule 65 to determine whether probable cause exists to issue an injunction.

United States v. Roth, 912 F.2d 1131, 1133 (9th Cir. 1990). Likewise, the law of the Fifth Circuit

remains unchanged because there has been no intervening en banc Fifth Circuit or Supreme Court

precedent: the requirements of Federal Rule of Civil Procedure 65 apply to the issuance of restraining

orders and injunctions issued pursuant to 21 U.S.C. § 853(e)(1)(A). Thier, 801 F.2d at 1468.

12

See this court’s discussion of Crozier in Thier, 801 F.2d at 1467.

27

Monsanto changed the standard of proof for the Federal Rule of Civil Procedure 65 probable cause

hearing, but not this circuit’s holding that Rule 65 governs a § 853(e)(1)(A) restraining order.

The instant § 853(e)(1)(A) order restrains indefinitely the New York, South Carolina, and

Washington bank accounts that are the subject of this appeal; therefore it is to be treated as a

preliminary injunction. Phillips, 894 F.2d at 130 n5. The Ungars are adverse parties for Federal Rule

of Civil Procedure 65 purposes, having been named in the Government’s application for the

restraining order and having an interest in some of the bank accounts specified in the order, which

interest is (1) adverse to both parties to this criminal case, and (2) adversely affected by the

restraining order. As an ex parte “preliminary injunction,” Federal Rule of Civil Procedure 65(a)(1)

requires notice to adverse parties.

The record reveals no compliance with Federal Rule of Civil Procedure 65(a)(1) notice

provision. “Compliance with Rule 65(a)(1) is mandatory,” and a preliminary injunction granted

without adequate notice and a fair opportunity to oppose it should be vacated and remanded to the

district court. Harris County, 177 F.3d at 326 (citing Parker v. Ryan, 960 F.2d at 544).

CONCLUSION

For the foregoing reasons, we DENY the Ungars’ motion for summary disposition and DENY

the Ungars’ request that we direct the district court not to enter further orders that restrain HLF’s

interest in these bank accounts. We VACATE the restraining order, and REMAND the matter to the

district court with directions that any further proceedings be in accord with this opinion.

28