American Airways Charters, Inc. v. Donald Regan, Secretary of the Treasury

HAROLD H. GREENE, District Judge

(concurring):

The Office of Foreign Assets Control (OFAC), a minor Treasury Department bureau, has decided that, because it had listed appellant as a Cuban national, it also had the authority to prevent that corporation from being represented by counsel. This decision, if upheld, would have the effect of precluding appellant, through counsel, from contesting OFAC’s actions either administratively or in the courts, from litigating in the Florida courts OFAC’s decision to recognize its chosen individual as the official head of the corporation, or from handling any other legal business. This assertion of authority is unprecedented in the annals of the Trading with the Enemy Act or any other law to which we have been referred. 1 I agree entirely with Judge Ginsburg’s analysis of the applicable law as not permitting such an exercise of power, and I also agree with her that, were OFAC’s position sustained, the implications would be both far-reaching and dangerous. Whatever authority our society may have granted to government, it has always placed a high value on the ability of those at the receiving end of bureaucratic edicts to contest in the courts the legality of what was done to them.

The Catch-22 label from Joseph Heller’s book of the same name has been applied so often to so many situations that it has by now acquired the status of a cliché. But it is difficult to imagine a situation where that label is more apt: a corporation is summarily designated by a governmental agency as a “Cuban national,” but it is not allowed effectively to defend itself against that designation on the theory that, because it is a “Cuban national,” the designating agency need not permit it to be represented by counsel to challenge the designation. 2 If there are precedents in American law to such circular processes, they have not been pointed out to us.

Two basic points made in support of OFAC’s position deserve further note.

First, OFAC has informed the Court that some of those involved in the management of the corporation were engaged in improper or even unlawful activities involving Cuba. But that is hardly a reason for depriving that corporation of the right to choose and retain counsel. We do not deny counsel to murderers or to rapists, to those accused or convicted of treason or espionage, or to those who sue the government to seek access to sensitive national security documents, to cite but a few examples, and I therefore see no basis for depriving this appellant of its retained counsel because *877 some of its officers may be unsavory. Whatever the corporation and its officers may be, they surely do not represent such a menace to this country — in excess of the danger presented by those in the categories enumerated above — that the corporation must be so singled out. If the claims appellant may wish to assert before the administrative agency or in the courts are without validity, that will become apparent soon enough, whether or not counsel continues to represent it; if appellant does have valid claims, it should be allowed to present them in an effective manner, irrespective of the backgrounds or histories of its officers.

Second, OFAC contends that, if appellant is allowed to be represented by its previously retained counsel, the next step will be. to require counsel to be paid, in violation of the freezing regulations. Insofar as I am concerned, there is nothing in our disposition of this case that would give counsel any claim to payment if such payment is prohibited by the appropriate regulations. Thus, I do not share OFAC’s concern about appellant’s lawyer or the issue of his payment. If that attorney wants to proceed with his representation on what may turn out to be a volunteer basis, well and good. But this Court has not by its decision created for him a means for securing a fee.

The dissent would return the case to the District Court 3 to explore issues relating to Florida law 4 and to the exhaustion of administrative remedies. But there are neither new facts nor Florida legal principles for the District Court to consider. Moreover, OFAC made it clear both initially and after our inquiry following oral argument that it had no intention of granting a license to appellant which would enable the corporation to continue to employ counsel. 5 Whatever powers the Treasury may have— and I agree that they are extensive — they do not include the power to deny a designated individual or corporation the right to hire counsel, let alone the power to cut off an attorney-client relationship previously established.

With these additional observations, I concur fully in Judge Ginsburg’s opinion for the Court and in the disposition of the appeal made by that opinion.

. It may be — although this has not been shown — that equivalent authority was exercised during the period when the government had statutory power to "vest," that is to take over, German or other enemy assets during World War I and World War II — a power which OFAC itself does not claim to possess now. The one substantive decision relied upon in this regard by the dissent — Alexewicz v. General Aniline & Film Corp., 181 Misc. 181 , 43 N.Y.S.2d 713 (Sup. Ct.1943) — was rendered at the height of World War II, when the vesting provisions were in effect. In any event, unlike the dissent (at p. 877), I have difficulty regarding congressional inaction in the face of a decision by a court in Broome County as acquiescence in its holding.

. There is here yet another Catch-22 bootstrap. OFAC first unilaterally selected appellant’s vice president as the corporation’s single authorized spokesman; OFAC then concluded that, inasmuch as this chosen instrument did not request legal representation, it was established that the corporation did not desire counsel.

. The District Court would be required to determine whether Florida law might not conceivably (1) regard appellant's vice president rather than its president as that body’s proper spokesman, and (2) require ratification by the shareholders of the retention of counsel by appellant's president and of the instant lawsuit. Since appellant through its president retained counsel before OFAC imposed any license requirement on appellant and since Florida law permits the president of a corporation to retain counsel (see note 5 of Judge Ginsburg’s opinion), there is no basis for inquiring into these negatives — certainly not at the behest of a stranger to the corporation such as OFAC.

. OFAC, however, regards Florida law as irrelevant, arguing that under the Trading with the Enemy Act and the Constitution’s Supremacy Clause, its decisions override state law.

. As early as September 17, 1982, OFAC informed appellant that ”[w]e have no plans to issue new specific licenses to you.” J.A. 20.