Petition for Writ of Certiorari — Islamic American American Relief Agency Agency v. Keisler (No. 06-1537)

No. wr 3 Ee eee “ ONG?

In The

Supreme Court of the United States

.

ISLAMIC AMERICAN RELIEF AGENCY,

Petitioner,

VS.

ALBERTO GONZALES, in his individual and official

capacity as Attorney General of the United States,

and United States Department of Justice, JOHN SNOW,

in his individual and official capacity as Secretary of the

Department of Treasury, UNIDENTIFIED FBI AGENTS,

PAUL SCHLUP, AND OTHER UNIDENTIFIED

DEPARTMENT OF TREASURY PERSONNEL,

in their individual and official capacities,

Respondents.

¢

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The District Of Columbia Circuit

¢

PETITION FORA WRIT OF CERTIORARI

’

JOHN KENNETH ZWERLING* SHEREFF HADI AKEEL

108 North Alfred Street 401 S Old Woodward Ave

Alexandria, VA 22314 Ste 430

(703) 684-8000 Birmingham, MI 48009

(248) 594-9595

Counsel for Petitioner

“Counsel of Record

COCKLE LAW BRIEF PRINTING CO) S00) 225-6964

OR CALL COLLECT «2s 542-2831

QUESTION PRESENTED

Courts have always determined whether one entity

can constitutionally be held accountable for the misdeeds

of another entity by reference to agency principals. The

Circuit Court in this case created a new “branch standard”

under which an allegation that one entity is a “branch” of

another is legally distinct from an allegation that it is an

“alias” or an “agent,” and obviates the need for showing

that the entity was controlled by the other or that it

intended to further the misdeeds of the other. Did the

Circuit Court err when it used this branch standard to

hold that the Government could constitutionally seize the

assets of an American charity, IARA-USA, based on the

designation of a Sudanese entity as a terrorist-supporting

organization, without any showing that the American

charity funded the Sudanese entity, intended to further

the misdeeds of the Sudanese entity, or was controlled by

the Sudanese entity?

ii

PARTIES TO THE PROCEEDING

Pursuant to Sup. Ct. R. 14.1(b), the following list

identifies all of the parties appearing here and before the

United States Supreme Court: Islamic Relief Agency,

Alberto Gonzales, in his individual and official capacity as

Attorney General of the United States, and United States

Department of Justice, John Snow, in his individual and

official capacity as Secretary of the Department of Treas-

ury, Unidentified FBI Agents, Paul Schlup, and Other

Unidentified Department of Treasury Personnel, in their

individual and official capacities.

ill

TABLE OF CONTENTS

Page

Question Presented..........ccccccceceseeees stiikiapiaddaginadssniecosiaiiis i

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Constitutional and Statutory Provisions Involved........ 1

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Bi, “FURIE TOGO onic sencccsceceananseccvcvcéssessicess 4

is. I I rai iii hiccitciiciii hdd oitsannicaiets 7

Reasons For Granting The Petition...................cccceeeeeees 10

I. The Circuit Court’s New “Branch Standard”

Conflicts With Prior Decisions of the United

States Supreme Court and Circuit Courts and

Violates the First Amendment By Allowing

Guilt By Mere Association..............cccccccseesseeeeeees 10

A. The United States Supreme Court and

Other Circuit Courts Have Always Treated

a “Branch” as Indistinct from an “Alias” or

“Agent,” and Have Always Required the

Government to Show an Agency Relation-

ship Before Punishing an Entity Vicari-

CUTE sis cicsxsicrsrsuatnceencencetneenmcdenennedale 11

lv

TABLE OF CONTENTS - Continued

Page

B. The Circuit Court’s Branch Standard Uses

Semantics and Circular Logic to Circum-

vent the Constitution By Deeming an En-

tity a “Branch,” Based Purely on Evidence

of Association, Then Rejecting a Freedom

of Association Claim on Grounds that the

Entity is Not Being Punished For Associa-

tion, But Rather for the Misconduct Vi-

cariously Imputed to it as a Branch............ 18

C. The Branch Standard Revives Part of the

Blocking Scheme that One District Court

Has Already Ruled Unconstitutionally Vio-

lates Freedom of Association, and Contra-

dicts the Government’s Tacit Admission that

Evidence of Ownership or Control Is Neces-

sary to Constitutionally Punish an Entity

for Mere Affiliation With an SDGT................ 23

II. Supreme Court Review is Necessary In Order

to Prevent the Executive Branch From Ignor-

ing Fundamental Constitutional Guarantees

In Its Quest to Fortify National Security .......... 25

SRL EO AON SNARE Te TL ON NM, PRE He I 27

TABLE OF AUTHORITIES

Page

CASES

Boim v. Quranic Literacy Institute, 291 F.3d 1000

CRE IE, PIIRIEE Savin asbteceisnanibieesicecinnendinineh ean iaaNaaaaa 16

Healy v. James, 408 U.S. 169 (1972) ...... cece eececeeeeeeees 20, 21

Holy Land Found. for Relief and Dev. v. Ashcroft,

219 F. Supp. 2d 57 (D.C. Cir. 2002).........ccsresrsessssssrsesses 22

Humanitarian Law Project v. Reno, 205 F.3d 1130

Se ts Pe Pin ict shckitscasreacnacacancndkacesiiveueaanuaeeiomestia serene 22

Humanitarian Law Project v. United States Dep’t of

Treasury, 463 F. Supp. 2d 1049 (C.D. Cal. 2006).....23, 24

Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728

EG, Anal PRED cinsesanineniabicanncovsoesnsnineabeaeenmclcenael passim

Islamic Am. Relief Agency v. Unidentified FBI

Agents, 394 F. Supp. 2d 34 (D.D.C. 2005).......... 1,5,6,14

Jund v. Town of Hempstead, 941 F.2d 1271 (2nd

i BES bvicccccninteoniaoecvcanciiinnt anaes 16

Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1961)

(quoting Ex parte Milligan, 71 U.S. 2 (1866))................ 25

National Ass’n for the Advancement of Colored

People v. Clairborne Hardware, 458 U.S. 886

ERIE rks tcsvccsdsrsiscnsieutineeaaaanebeiae 14, 15, 16

National Ass’n for the Advancement of Colored

People v. Overstreet, 384 U.S. 118 (1966)........... 12, 13, 14

National Council of Resistance of Iran v. Depart-

ment of State, 362 U.S. App. D.C. 143 (D.C. Cir.

TABLE OF AUTHORITIES - Continued

National Org. for Women, Inc. v. Scheidler, 267 F.3d

eM MINIT his tih st lactccsrsadchin Sada sadanectaonaeatnsousnndxeicous 15

Tsilimos v. National Ass’n for the Advancement of

Colored People, 187 Ga. App. 554 (Ga. Ct. App.

cae Maia iceaicissidccnba a irkakubindnsindieiadipabicanibindaanaaicannicnbukeuiniosionin 15

United Mine Workers of America v. Coronado Coal

Cag A Bh iets EA SR icas isvasisnsiaoaiadnanievnssisnevasnatenn 11,12

United States v. Robel, 389 U.S. 258 (1967)............000 25, 26

STATUTES

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hy Me EO IEE siicthiniccsdtvnseikininnsandenecsatenmcnisiouaane 2,6

RULES

SI INE, I IN Pics iinsi svn cia sarninois caeneNdnaidanscaigicad asin usalungnngnine ii

REGULATIONS

es ee IO insane sh cascasarticsncseenceiinnenaines 2, 24

ORDERS

13,224, 66 Fed. Reg. 49079 (Sept. 23, 2001).............. 2, 6, 23

13,268, 67 Fed. Reg. 44751 (July 2, 2002) ......ccscecssceeseseene 2

13,372, 70 Fed. Reg. 8499 (Feb. 16, 2005)...........cceeseseeeee 2

TABLE OF AUTHORITIES - Continued

Page

CONSTITUTIONAL PROVISIONS

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OPINIONS BELOW

The opinion of the Court of Appeals is reported at 477

F.3d 728, and is reprinted in the appendix to the petition

(“Pet. App.”) at 1-19. The District Court’s opinion is re-

ported at 394 F. Supp. 2d 34, and is reprinted at Pet. App.

20-64.

+

JURISDICTION

The Court of Appeals entered its judgment on Febru-

ary 13, 2007. This Court has jurisdiction under 28 U.S.C.

§ 1254(1).

¢

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The First Amendment to the United States Constitu-

tion provides:

Congress shall make no law respecting an estab-

lishment of religion, or prohibiting the free exer-

cise thereof; or abridging the freedom of speech,

or of the press; or the right of the people peace-

ably to assemble, and to petition the government

for a redress of grievances.

The Fourth Amendment to the United States Consti-

tution provides:

The right of the people to be secure in their per-

sons, houses, papers, and effects, against unrea-

sorable searches and seizures, shall not be

ss¢lated, and no warrants shall issue, but upon

probable cause, supported by oath or affirmation,

2

and particularly describing the place to be

searched, and the persons or things to be seized.

The Fifth Amendment to the United States Constitu-

tion provides:

No person shall be held to answer for a capital,

or otherwise infamous crime, unless on a pre-

sentment or indictment of a grand jury, except in

cases arising in the land or naval forces, or in the

militia, when in actual service in time of war or

public danger; nor shall any person be subject for

the same offense to be twice put in jeopardy of

life or limb; nor shall be compelled in any crimi-

nal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due

process of law; nor shall private property be

taken for public use, without just compensation.

31 C.F.R. § 594.316 (2007), provides:

The term “to be otherwise associated with,” as

used in § 594.201(a)(4)(ii), means:

(a) To own or control; or

(b) To attempt, or to conspire with one or more

persons, to act for or on behalf of or to provide fi-

nancial, material, or technological support, or fi-

nancial or other services, to.

The International Emergency Economic Powers Act,

50 U.S.C. § 1701 et seq., is set out in the appendix to this

brief. Pet. App. 65-74.

Relevant executive orders — Exec. Order No. 13,224,

66 Fed. Reg. 49079 (Sept. 23, 2001), Exec. Order No.

13,268, 67 Fed. Reg. 44751 (July 2, 2002), and Exec. Order

No. 13,372, 70 Fed. Reg. 8499 (Feb. 16, 2005) — are set out

in the appendix to this brief. Pet. App. 75-89.

The relevant portion of the Administrative Procedure

Act, 5 U.S.C. § 706, is set out in the appendix to this brief.

Pet. App. 90.

STATEMENT OF THE CASE

This case is about whether the power of the United

States Government’ to block the assets of terrorist-

supporting organizations extends to guilt by mere associa-

tion with another organization accused of financially

supporting terrorists. Under Supreme Court and Circuit

Court precedent, in order for an entity to be punished for

the wrongdoing of a different, juridical entity, the Gov-

ernment is constitutionally required to show either that

the entity acted as an agent or alias of the wrongdoing

entity, or that the entity knew about the wrongful conduct

and intended to act in furtherance of it. In this case, the

D.C. Circuit Court has fashioned a new branch standard,

which allows an entity to be punished solely based on

affiliation with another entity, without any showing of an

agency relationship and without any showing of an intent

to further unlawful conduct.

The branch standard has no support in prior legal

authority and seems to be based on nothing more than a

semantic difference between the word “branch” and the

words “alias” or “agent.” The standard contradicts Su-

preme Court and Circuit Court precedent that has always

treated an alleged branch as identical to an agent or alias.

Moreover, the D.C. Circuit Court’s novel branch stan-

dard allows the government to punish an entity solely for

associational activity protected by the First Amendment —

affiliation and statements of support for entirely lawful

4

aims of another entity. For example, the American Red

Cross, a distinct juridical entity chartered by the United

States Government, shares a similar name with over 180

other Red Cross and Red Crescent national organizations

around the world, shares fundamental principles with

these groups, and openly affiliates with these “partners.”

The American United Way, an independent juridical entity,

affiliates with an independent organization, United Way

International, which helps establish “United-Way type

organizations” around the world, with 3,000 such United

Way organizations currently operating in 45 different

countries. Under the Circuit Court’s branch standard, if

the Government finds that any one of these separate

organizations, anywhere in the world, has given material

support to terrorists, the Government may block the

assets of the American charity, and effectively shut it

down, without any showing that the American charity was

an agent of the foreign entity, gave any funding to the

foreign entity, was aware of the foreign entity’s conduct, or

had any intention of supporting it. A blocking of assets

could be justified solely based on the sharing of a name

and open affiliation with the foreign entity’s humanitarian

goals. Thus, the branch standard has a chilling and

dangerous effect on associational freedoms that the Su-

preme Court should intervene to protect.

A. Factual Background

As pointed out by the District Court, Petitioner is at a

disadvantage because it has been denied the ability to

" http://www.redcross.org/services/intl/0,1082,0_323_,00.html

* http://www.uwint.org

view the classified portions of the record. Jslamic Am.

Relief Agency v. Unidentified FBI Agents, 394 F. Supp. 2d

34, 45 (D.D.C. 2005). However, the Circuit Court’s errone-

ous conclusions of law did not turn on any factual dis-

putes. The following are the salient, uncontested facts as

adopted by the courts below:

The Islamic African Relief Agency (“IARA-USA”),

based in Columbia, Missouri, was incorporated as a

nonprofit, humanitarian agency in 1985. Id. at 39-40. The

organization did not operate under any aliases, and did

not have any parent entities, subsidiaries, or affiliates.

Both the founding member of the organization and the

attorney that created the organization submitted affida-

vits attesting to the organization’s independence. Pet. App.

91-95. LARA-USA has been run at all times entirely by its

own, American-based, independent Board, officers, direc-

tors, and employees. IARA-USA’s books and tax state-

ments have reflected only its own activities, and no

consolidated tax returns were ever required or filed.

Since its inception, [ARA-USA has “pravided charita-

ble and humanitarian aid to refugees, orphans, victims of

human and natural disasters, and other poor and needy

persons or entities throughout the world, without regard

to faith or political affiliation.” Islamic Am. Relief Agency

v. Unidentified FBI Agents, 394 F. Supp. 2d at 39-40. In

doing so, IARA-USA has regularly partnered with other

organizations, including the United Nations Relief and

Work Agency and the United States for International

Development.

At the time of IARA-USA’s incorporation, there

existed another entity in the Sudan (“Sudanese entity”),

with an identical name. Jd. But in 2000, the Islamic

6

African Relief Agency changed its name to the Islamic

American Relief Agency. Islamic Am. Relief Agency v.

Gonzales, 477 F.3d 728, 730-31 (D.C. Cir. 2006).

On October 13, 2004, the United States Department of

Treasury, Office of Foreign Assets Control (“OFAC”)

designated the Sudanese entity as a Specially Designated

Global Terrorist (““SDGT”) and blocked its assets. The

designation and blocking was under the authority of

Global Terrorism Executive Order No. 13,224, § 1(d)(i), 66

Fed. Reg. 49079, at 49080 (Sept. 23 2001), and the Inter-

national Emergency Economic Powers Act, 50 U.S.C.

§§ 1701-1707. The designation was based on OFAC’s

determination that the Sudanese entity provided financial

or other support to terrorists. Jslamic Am. Relief Agency v.

Gonzales, 477 F.3d at 731.

IARA-USA was not designated as an SDGT, but OFAC

included IARA-USA in the blocking notice of the Sudanese

entity based on its assertion that IARA-USA was the

“United States Branch” of the Sudanese entity. Jslamic

Am. Relief Agency v. Gonzales, 477 F.3d at 731. IARA-USA

immediately contested the blocking, and, after failing to

persuade OFAC to unblock its assets, [ARA-USA filed suit

in the United States District Court for the District

of Columbia alleging that the blocking violated the Admin-

istrative Procedure Act, 5 U.S.C. § 706(2), the First,

Fourth, and Fifth Amendments to the United States

Constitution, and 42 U.S.C. § 1985(3), and claiming civil

liability for False Affidavit. Islamic Am. Relief Agency uv.

Gonzales, 477 F.3d at 731. The District Court granted

summary judgment to the defendants on all claims.

Islamic Am. Relief Agency v. Unidentified FBI Agents, 394

F. Supp. 2d 34 (D.D.C. 2005). The Circuit Court affirmed,

but remanded on the single issue of the release of money

to pay [ARA-USA’s attorney fees. Islamic Am. Relief Agency

v. Gonzales, 477 F.3d 728 (D.C. Cir. 2006).

B. Proceedings Below

The United States Court of Appeals for the District of

Columbia Circuit rejected all of LARA-USA’s constitutional

claims based solely on the conclusion that IARA-USA was

a branch of the Sudanese entity. The Court noted that this

was a case of first impression because the entity challeng-

ing the blocking (IARA-USA) did not directly support

terrorists and was not the entity designated as an SDGT.

Islamic Am. Relief Agency v. Gonzales, 477 F.3d at 732.

The question, as formulated by the Court, was “whether

the record supports OFAC’s conclusion that IARA-USA is a

branch of [the Sudanese entity].” Jd. at 738. IARA-USA

argued that because the government penalized IARA-USA

vicariously, based on a theory that it was in fact an alias or

agent of the Sudanese entity, the appropriate standard

would be that used for an alias designation — whether the

alleged terrorist-supporting organization so dominates and

controls the alias entity that they can be considered one

organization. Jd. at 732. The Court rejected the argument

based on its conclusion, made without citation to any legal

authority in support of the proposition, that a “branch” is

somehow different from an alias or agent. Jd. at 733. The

Court determined that it must employ a test that reflects

the government’s theory under which the assets were

blocked. Jd. The control test applies to a theory under which

there was a principal-agency relationship, and derives from

ordinary principals of agency law. But because the govern-

ment’s theory was that IARA-USA was a “branch” of the

Sudanese organization, according to the Court, agency law

was inapplicable. Jd. Thus, the logical foundation of the

circuit court’s holding is that the semantic difference

8

between calling an entity a “branch,” rather than calling

an agency an “alias” or “agent” brings the case out of the

realm of agency law and calls for a distinct legal standard

— a branch standard.

The Court next found that [ARA-USA was a branch of

the Sudanese organization. Acknowledging that the

“unclassified record evidence is not overwhelming,” the

court nevertheless pointed to eight pieces of evidence that

proved [ARA-USA’s branch stats: 1.) IARA-USA was

incorporated in the United States with an identical name

to the Sudanese organization and, although the corpora-

tion changed its name eight years ago, the name remains

similar; 2.) LARA-USA’s Articles of Incorporation describe

it as an “affiliate” of the Sudanese entity and includes a

statement that it seeks to effect the same objectives as the

Sudanese entity; 3.) The Sudanese entity is one of a list of

entities to receive a portion of [ARA-USA’s assets upon its

dissolution; 4.) Ten years ago, IARA-USA applied for a

license to transfer funds to the Sudanese entity and

described itself as an “affiliate” and “partner”; 5.) In a

letter to the Washington Times, thirteen years ago, [ARA-

USA’s executive director “implicitly accepted” a newspa-

per’s characterization of IARA-USA as the “Khartoum-

based Islamic relief agency,” and referred to the Sudanese

entity’s “branch offices in the United States”; 6.) Some

solicitation materials referred to “international headquar-

ters” in Sudan; 7.) The Sudanese entity’s web site referred

to IARA-USA as a branch; and 8.) IARA-USA maintained

financial connections with another organization, not

accused of supporting terrorism, that is also alleged to be a

branch of the Sudanese entity. Jd. at 733-34. Thus, all of

the evidence of LARA-USA’s branch status involves speech

and affiliation.

9

Once the Court determined that IARA-USA was a

branch, and therefore the alleged support of terrorism by

the Sudanese entity could be imputed to IARA-USA, all of

IARA-USA’s constitutional claims lost their footing on

grounds that there is no “constitutional right to support

terrorism.” /d. at 735. Thus, the Government's seizing of

IARA-USA’s assets did not implicate the freedom of

association because the Government “did not prevent or

punish the associational activity of LARA-USA, but rather

[the blocking] was directed at its funding of terrorists, as a

branch of [the Sudanese entity].” Jd. at 736. The Court

was not deterred by the facts that IARA-USA never funded

the Sudanese entity, let alone terrorists, and that the

Court’s assessment that IARA-USA was a “branch” of the

Sudanese entity was itself based entirely on associational

activity. The Court also held that its finding that LARA-

USA was a branch of the Sudanese entity relieved the

government from showing that [ARA-USA funded terrorist

organizations with an intent to aid their unlawful activi-

ties, because the intent requirement “is limited to cases in

which liability was imposed by reason of association

alone.” Jd. at 737. But in this case, according to the Circuit

Court, the blocking was not based on association, but

rather on the finding that LARA-USA was a branch. 7d.

The court similarly rejected LARA-USA’s equal protection

and free exercise of religion claims, on grounds that

“[t]here is no free exercise right to fund terrorists.” Jd. at

736-37. Since LARA-USA never even funded the Sudanese

entity that allegedly funded terrorists, this holding was

also a vicarious finding, based on the Court’s branch

standard.

10

REASONS FOR GRANTING THE PETITION

I. The Circuit Court’s New “Branch Standard”

Conflicts With Prior Decisions of the United

States Supreme Court and Circuit Courts and

Violates the First Amendment By Allowing

Guilt By Mere Association.

The D.C. Circuit Court’s distinction between a

“branch” and an “agent” conflicts with prior decisions of

the United States Supreme Court and the Circuit Courts.

The distinction creates a new standard by which an entity

may be deemed a “branch” based solely on association with

another entity, and once deemed a branch, the entity’s

freedom of association claim must be rejected because it is

automatically imputed with the actions of the “parent.”

Thus, through semantics and circular logic, the Circuit

Court has adopted a standard that bypasses the protec-

tions of the First Amendment. But the resulting guilt by

association is impermissible under the Constitution. In the

context of the blocking at issue, even the Government has

recognized through its regulations that some showing of

ownership or control — a showing of agency — is necessary

to punish an entity for mere affiliation with another entity

deemed an SDGT. Because of the conflict regarding this

important principle, which has a severe effect on associa-

tional freedoms, the Supreme Court should clarify the

issue.

11

A. The United States Supreme Court and

Other Circuit Courts Have Always Treated a

“Branch” as Indistinct from an “Alias” or

“Agent,” and Have Always Required the

Government to Show an Agency Relation-

ship Before Punishing an Entity Vicariously.

The Circuit Court’s new branch standard contradicts

Supreme Court precedent, which has routinely treated an

allegation that an entity is a “branch” of another under

agency principles, drawing no distinction between a

branch and an agent.

When a national organization, the United Mine

Workers of America, was sued for restraint of trade and

property damage due to a strike by one of the Union’s local

districts, the United States Supreme Court had absolutely

no question about the fact that agency law applied. United

Mine Workers of America v. Coronado Coal Co., 259 U.S.

344 (1922). There can be no doubt that the local district

that organized the strike was a “branch” of the national

union. The national organization, under its constitution,

was divided into districts, subdistricts, and local unions.

Id. at 383. The governing authority of the national organi-

zation was a general convention consisting of delegates

from the local bodies. Each district also provided a mem-

ber to the International Board. Jd. The national organiza-

tion had the authority to sanction and fund strikes

through the local district. Jd. at 384. Members’ dues were

split between the national treasury, district treasury, and

local treasury. Jd. The local organizations shared the same

name as the national organization, and upon dissolution of

a local body, all of its funds would be transmitted to the

national organization. Jd. “No organized corporation has

12

greater unity of action, and in none is more power cen-

tered in the governing executive bodies.” Jd. at 385.

The court held that “[i]t is a mere question of actual

agency.” Jd. at 395. A corporation may be held liable for

the acts of its agents, only if the acts are shown to be

within the business of the corporation. Jd. Because the

national organization never initiated, participated in, or

ratified the strike of its local district, a directed verdict in

favor of the national union should have been granted. /d.

at 393-96.

The D.C. Circuit Court’s new branch standard directly

contradicts the holding in Coronado. Under the branch

standard, there would have been more than sufficient

evidence that the local unions and districts were

“branches” of the national organization. Once branch

status was established, agency law would have become

irrelevant. Any wrongdoing of the district or local unions

would have automatically been imputed to the national

organization. This novel legal proposition, for which the

Circuit Court cited no authority, and for which none exists,

represents a dangerous inroad into well-established

organizational protections.

A similar situation arose in National Ass’n for the

Advancement of Colored People v. Overstreet, 384 U.S. 118

(1966). In Overstreet, the Savannah Branch of the NAACP

organized a boycott and picketing of a local market in

order to protest an incident of racial violence perpetrated

by the market’s owner. Jd. at 118-19. During the protest,

there were incidents of intimidation of customers, blocking

of sidewalks, and scattered violence. Jd. at 119. The

market sued the Savannah Branch as well as the national

NAACP, and the trial judge instructed the jury that

13

“should it hold the Branch liable, it might also hold peti-

tioner — the national NAACP - [liable] if the Branch were

found to be its ‘agent’.” Id. The jury did make such a

finding and awarded judgment against the National

NAACP. The Georgia Supreme Court affirmed, and the

United States Supreme Court issued, and eventually

dismissed, a Writ of Certiorari. Justice Douglas’ dissent

explained that the Branch was concededly an affiliate of

the national organization. Jd. at 120. A portion of the

Branch’s dues were forwarded to the national NAACP, the

Branch submitted annual reports to the national organiza-

tion, and Branch members were automatically members of

the national NAACP, with the right to attend annual

national conventions. Jd. Justice Douglas dissented on

grounds that the national NAACP should not be held

liable where it did not control the local Branch’s conduct,

did not order or authorize the demonstrations, and did not

ratify them. Jd. at 120-21. Because the First Amendment

forbids imposition of liability of a national political asso-

ciation based on the misconduct of a local branch, without

evidence that the national organization specifically au-

thorized or ratified the misconduct, “a general finding of

‘agency’ or ‘affiliation’ is not enough.” Jd. at 125.

Overstreet is notable because neither the trial court,

the Georgia Supreme Court, nor the dissenting Justices on

the United States Supreme Court ever questioned the fact

that agency law was applicable to a determination of

whether one entity could be held accountable for the

misconduct of another entity with a “branch” relationship.

The question in Overstreet was whether a finding of

agency was enough to constitutionally justify liability. In

the instant case, the D.C. Circuit Court never reached that

question, because it denied that agency law was even

14

relevant to the analysis. The Circuit Court held that

IARA-USA’s constitutional claims were based on a “misin-

terpretation” of the Government’s basis for designation,

and that the “dominates and controls” test was irrelevant

to whether the blocking was constitutional because of the

finding that LARA-USA was a “branch.” Islamic Am. Relief

Agency v. Gonzales, 477 F.3d at 732.

The Supreme Court later turned the principles set

forth in Justices Douglas’ dissent into binding law, in

National Ass’n for the Advancement of Colored People v.

Clairborne Hardware, 458 U.S. 886 (1982). In Clairborne,

plaintiff attempted to hold the national NAACP liable for

the tortious boycott activities of its field secretary, Charles

Evers. The Court held:

“The associational rights of the NAACP and its

members have been recognized repeatedly by

this Court. The NAACP - like any other organi-

zation — of course may be held responsible for the

acts of its agents throughout the country that are

undertaken within the scope of their actual or

apparent authority. Moreover, the NAACP may

be held liable for other conduct of which it had

knowledge and specifically ratified.” Clairborne,

458 U.S. at 930.

But there was no evidence that the national NAACP

gave any actual or apparent authority to commit violence,

had any knowledge of the violence, or was in any way

involved in the boycott. Jd. at 930-31. Quoting Justice

Douglas’ Overstreet dissent with approval, the Court held

that:

“To equate the liability of the national organiza-

tion with that of the Branch in the absence of

any proof that the national authorized or ratified

15

the misconduct in question could ultimately de-

stroy it. The rights of political association are

fragile enough without adding the additional

threat of destruction by lawsuit. We have not

been slow to recognize that the protection of the

First Amendment bars subtle as well as obvious

devices by which political association might be

stifled.” Id. at 931.

The Circuit Court’s branch standard does not subtly

stifle the protections of the First Amendment - it fla-

grantly infringes upon them. Moreover, the idea that a

Branch is automatically imputed with the misdeeds of

another entity, without regard to agency principles of

scope of authority, intent, and knowledge, is inimical to

the principles established by the Supreme Court in Clair-

borne. These principles have been routinely applied by the

states. See, e.g., Tsilimos v. National Ass’n for the Ad-

vancement of Colored People, 187 Ga. App. 554 (Ga. Ct.

App. 1988) (Holding that the NAACP could not be held

liable for tortious flyers distributed by the Vidalia branch

of the NAACP without proof of actual or apparent authori-

zation, or ratification, of the branch’s unlawful conduct).

Circuit Courts have also followed the Supreme Court’s

precedent in Clairborne, and have shown no inclination

towards the new branch standard of the D.C. Circuit. The

Seventh Circuit held that in order for defendant members

of PLAN, a loose national organization of groups dedicated

to anti-abortion protests, to be held liable for illegal

activity at PLAN-sponsored protests, plaintiffs would have

to show that the defendants were aware of PLAN’s illegal

aims and held a specific intent to further those aims.

National Org. for Women, Inc. v. Scheidler, 267 F.3d 687

(7th Cir. 2001). Similarly, the Second Circuit has observed

that unincorporated associations can be held liable for acts

16

of their agents under a theory of authorization. Jund v.

Town of Hempstead, 941 F.2d 1271, 1279 (2nd Cir. 1991).

The Seventh Circuit applied the same rule in the

context of alleged funding of terrorism. Boim v. Quranic

Literacy Institute, 291 F.3d 1000 (7th Cir. 2002). In Boim,

the parents of a United States citizen, murdered in Israel

by Hamas terrorists, sued individuals and organizations

for their loss. Jd. at 1001. Plaintiffs alleged that two

entities were actually “front organizations,” used to

fundraise and launder money in support of terrorism. /d.

at 1023. Rather than analyzing whether the defendant

entities were “branches” of Hamas, the Court cited Clair-

borne for the proposition that liability may not be imposed

by association alone, unless the group itself possessed the

unlawful goals, and the individual had a specific intent to

further those goals. Jd. at 1023. Thus, if plaintiff could

show that defendant organizations were in fact raising

money to support the terrorist operations that resulted in

the murder, then their claim would not run afoul of the

First Amendment. Jd. at 1024. They had to show that the

defendant organizations knew of Hamas’ illegal activities

and intended to help it accomplish those illicit goals when

they contributed money to Hamas. Jd. Whether the groups

were “branches” simply was not relevant to the inquiry.

The new branch standard also breaks with the D.C.

Circuit Court’s own precedent. In National Council of

Resistance of Iran v. Department of State, 362 U.S. App.

D.C. 143 (D.C. Cir. 2004), the secretary of State designated

the Mojahedin-e Khalq Organization (MEK) as a foreign

terrorist organization. Jd. at 153. The MEK’s Farsi name

translated in English as the People’s Mojahedin Organiza-

tion of Iran. Jd. at 154 n.1. Another entity, the National

Council of Resistance of Iran (NCRI) was found to be an

17

“alias” of MEK, and was therefore also designated as a

foreign terrorist organization. Jd. at 154. The Court

discussed two distinct situations in which an “alias” theory

may be applicable. The first is when a single entity is

known by more than one name. As an example, the Court

cited the MEK, which is known as the Mojahedin-e Khalq

Organization in Farsi, and the People’s Mojahedin Organi-

zation of Iran in English. Jd. at 157. The second situation

involves two entities with separate juridical identities.

Under agency principals, “when one entity so dominates

and controls another that they must be considered princi-

pal and agent, it is appropriate, under AEDPA, to look

past their separate juridical identities and to treat them

as aliases.” Id. The FBI alleged that NCRI was the “politi-

cal branch” of the MEK, and was “not a separate organiza-

tion.” Id. at 158. The Court found substantial evidence

that NCRI was dominated and controlled by MEK, and

therefore the alias finding was warranted.

The D.C. Circuit has now abandoned the analysis in

NCRI, holding that agency law is irrelevant when the

government asserts a branch theory. Like the two entities

in NCRI, IARA-USA and the Sudanese entity unques-

tionably have “separate juridical identities,” as [IARA-USA

is incorporated under the laws of the United States. The

government’s theory in the instant case was identical to

the theory in NCRI - that the entity at issue was not a

separate organization, but rather a branch of the alleged

wrongdoing organization. But the D.C. Circuit Court gave

no substantive reason why NCRI, an alleged branch of

MEK, needed to be dominated or controlled in order to be

vicariously punished for MEK’s wrongdoing, but LARA-

USA, an alleged branch of the Sudanese entity, is auto-

matically imputed with the Sudanese entity’s acts. There

18

is simply no substantive basis to draw a distinction be-

tween an “alias” and a “branch.” Any difference is purely

semantic.

The branch standard can only create confusion about

when an organization may constitutionally be held vicari-

ously accountable for the wrongdoing of another entity.

Because the branch standard conflicts with Supreme

Court precedent and decisions of the other circuits, the

Court should grant certiorari in order to clarify this area

of law.

B. The Circuit Court’s Branch Standard Uses

Semantics and Circular Logic to Circumvent

the Constitution By Deeming an Entity a

“Branch,” Based Purely on Evidence of Asso-

ciation, Then Rejecting a Freedom of Asso-

ciation Claim on Grounds that the Entity is

Not Being Punished For Association, But

Rather for the Misconduct Vicariously Im-

puted to it as a Branch.

The Circuit Court’s new branch standard is unconsti-

tutional because it uses circular logic and semantics to

allow the government to ignore the First Amendment

freedom of association. Under the Circuit Court’s analysis,

first the Government may deem an entity a “branch” of an

entity designated as a supporter of terrorism, using

evidence of affiliation between the alleged branch and the

alleged parent — the facts that the alleged branch never

supported terrorism, never gave any money to the alleged

parent or to terrorists, was never controlled by the alleged

parent, and never supported or took any action in further-

ance of the illicit aims of the alleged parent, are all irrele-

vant. Then, once affiliation has been used to establish a

19

“branch” relationship, the government may freely punish

the branch, without being shackled by the First Amend-

ment freedom of association, because there is no constitu-

tional right to facilitate terrorism, and associational

activity is not implicated.

The Circuit Court made its finding that IARA-USA

was a branch of the Sudanese entity entirely based on

evidence of association. Islamic Am. Relief Agency v.

Gonzales, 477 F.3d 728, 733-34 (D.C. Cir. 2006). IARA-USA

originally chose a name identical to the Sudanese organi-

zation but subsequently changed its name. LARA-USA’s

officials, Articles of Incorporation, solicitation materials,

and web site have at times made statements indicating

association and affiliation with the Sudanese organization,

and have expressed their support for the organization’s

humanitarian aims. /d. The only evidence that can even

arguably constitute an action is that IARA-USA applied

for a license, ten years ago, to donate charitable funds to

the Sudanese entity in order to assist in relief, in response

to the humanitarian crisis in Sudan at the time. Notably,

UNICEF, a well-respected and widely known charity,

entered into a contract to financially support the Sudanese

entity for the same reason. Jd. at 736. But IARA-USA’s

license was denied, and the record shows that IARA-USA

never gave any funding to the Sudanese organization.

Thus, the branch finding was supported merely by associa-

tion.

Once the Circuit Court held that IARA-USA was a

“branch” of the Sudanese entity, based on substantial

evidence of association, the Court then agreed with the

District Court’s analysis that the “blocking did not prevent

or punish the associational activity of LIARA-USA, but

rather was directed at its funding of terrorists, as a branch

20

of [the Sudanese entity].” Islamic Am. Relief Agency uv.

Gonzales, 477 F.3d at 736. Obviously, the logic is circular:

the Government may punish an entity as a branch, based

entirely on evidence of association, but a “branch,” by

definition, is not being punished for association. By elevat-

ing the word “branch” to a status outside the realm of well-

established agency law, the Circuit Court has created a

standard by which the Government may freely ignore the

First Amendment.

It is well established that guilt by association, without

evidence that the association poses the threat feared by

the Government, is an impermissible reason to deny First

Amendment rights. Healy v. James, 408 U.S. 169 (1972).

In Healy, college students at a public university applied to

form a local chapter of an organization called Students for

a Democratic Society (SDS), an organization that had a

reputation for supporting violence and campus disruption.

Id. at 172. The school denied recognition on grounds that

the group’s philosophy was antithetical to school policies

and based on doubts about the campus group’s independ-

ence from the national SDS. The campus group chose the

same name as the SDS, although it later offered to change

its name. The campus group stated that it supported some,

but not all, of the national organization’s aims and phi-

losophies and that the national-local relationship was a

loose one. The campus group also asserted its independ-

ence and stated that it “was not under the dictates of any

national organization.” Jd. at 173. The Court held that

evidence of affiliation was not a controlling issue. Jd. at

184. The Government may not constitutionally deny rights

solely based on association. Jd. at 186. Instead, “[t]he

Government has the burden of establishing a knowing

affiliation with an organization possessing unlawful aims

21

and goals, and a specific intent to further those illegal

aims.” Id. The Government showed no such intent. The

campus group proclaimed its independence, and the

national organization promoted diverse views, only some

of which called for unlawful action. The campus group only

shared some of those beliefs. Jd. Thus, the relationship

between the campus chapter of the SDS and the national

organization was insufficient to allow the school to consti-

tutionally deny the campus group’s rights. Jd.

Under the Circuit Court’s new branch standard, the

Healy case would have been decided completely differently.

First the Court would have found substantial evidence

that the campus group was a branch. Like IARA-USA, the

campus group in Healy chose the same name as the other

entity accused of misdeeds, referred to itself as a “local

chapter” and espoused many of the same views and goals.

Once the Court found that the campus group was a

branch, the First Amendment would have become irrele-

vant, because there is no constitutional right to incite

imminent lawless action — a position that would be im-

puted to the campus group in the same way that support

of terrorism was vicariously imputed to IARA-USA under

the branch standard. But the Healy Court didn’t use such

a branch analysis, and instead required the Government

to show specific intent to further the other entity’s illicit

aims. As in Healy, LARA-USA has declared its independ-

ence. It has also repeatedly and forcefully stated its

unequivocal opposition to terrorism. As stated in Healy, it

is impermissible to violate rights solely based on associa-

tion; but the Circuit Court’s branch standard and circular

logic enabled the Government to bypass the associational

rights of the First Amendment.

Cases dealing with funding of terrorists are inapposite,

because the D.C. Circuit Court’s branch standard requires

22

no showing of funding or material support of terrorists. The

constitution protects advocacy, which includes advocating

the goals of foreign terrorist organizations, espousing their

views, or even being members. Humanitarian Law Project

uv. Reno, 205 F.3d 1130, 1134 (9th Cir. 2000). “They can do so

without fear of penalty right up to the line established by

Brandenburg v. Ohio.” Id. But when an organization goes

beyond mere advocacy, to give material support to terror-

ists, the activity is no longer protected by the First Amend-

ment. Jd. Thus, the Government may prohibit the act of

giving material support to terrorism, such as giving terror-

ists weapons or explosives, or the money with which to

obtain such weapons. Jd. at 1133. For example, the Gov-

ernment could constitutionally block the assets of the Holy

Land Foundation for Relief and Development because the

group acted “for or on behalf” of Hamas, a designated

terrorist organization, by funding Hamas, and providing

financial support to families of Hamas members. Holy Land

Found. for Relief and Dev. v. Ashcroft, 219 F. Supp. 2d 57

(D.C. Cir. 2002). The constitutional line of protection lies on

the border of advocacy and material support.

The branch standard allows punishment merely for

constitutionally protected advocacy. IARA-USA was not

accused of funding terrorists, the Sudanese entity was.

IARA-USA was not even accused of funding or providing

material support to the entity that was accused of funding

terrorists. In fact, IARA-USA is not even accused of advo-

cating the Sudanese entity’ alleged terrorist-supporting

activity. Instead, [ARA-USA has been punished for advocat-

ing the Sudanese entity's humanitarian mission. It is a

paradigmatic case of “guilt by association,” which the

Supreme Court has long ago rejected, and which the D.C.

Circuit should not be permitted to now revive with its ill-

conceived branch standard.

23

C. The Branch Standard Revives Part of the

Blocking Scheme that One District Court

Has Already Ruled Unconstitutionally Vio-

lates Freedom of Association, and Contra-

dicts the Government’s Tacit Admission

that Evidence of Ownership or Control Is

Necessary to Constitutionally Punish an

Entity for Mere Affiliation With an SDGT.

The branch standard essentially revives a purely

associational basis for blocking that a District Court ruled

unconstitutional, and which the Government corrected by

adding the very requirements of ownership or control that

the D.C. Circuit’s branch standard deems irrelevant.

The executive order in which President Bush invoked

his authority under IEEPA allows the Secretary of the

Treasury to designate as an SDGT anyone acting “for or on

behalf of,” an SDGT, “owned or controlled by,” an SDGT, or

“otherwise associated with” an SDGT. Exec. Order No.

13,224, 66 Fed. Reg. 49079 (Sept. 23, 2001) § 1(c)-(d). A

District Court ruled that the “otherwise associated”

standard is unconstitutional because it is facially vague,

giving the Government unfettered discretion in enforcing

it, and because it is overbroad in that it punishes mere

association with an SDGT. Humanitarian Law Project v.

United States Dep’t of Treasury, 463 F. Supp. 2d 1049 (C.D.

Cal. 2006). Noting that punishment for mere association

alone is impermissible, and that the critical First Amend-

ment line is drawn between advocacy and action, the

Court struck down the standard because “[t]here is noth-

ing in the provision purporting to limit its application only

to those instances of association also involving activity, let

alone activity that furthers or advances an organization’s

illegal goals.” Jd. at 1071.

24

In direct response to the decision, OFAC revised its

regulations to define “otherwise associated with” in a

constitutionally permissible manner. Humanitarian Law

Project v. United States Dep’t of Treasury, No. CV 05-8047,

2007 U.S. Dist. LEXIS 30537 at *11 (C.D. Cal. April 20,

2007). The new regulation, 31 C.FR. § 594.316 (2007),

reads as follows:

The term “to be otherwise associated with,” as

used in § 594.201(a)(4)(ii), means:

(a) To own or control; or

(b) To attempt, or to conspire with one or more

persons, to act for or on behalf of or to provide fi-

nancial, material, or technological support, or fi-

nancial! or other services, to.

On rehearing, the District Court held that the stan-

dard as defined by the new regulation, which requires

ownership, control, or an act of material support, passes

constitutional muster. Humanitarian Law Project uv.

United States Dep't of Treasury, No. CV 05-8047, 2007 U.S.

Dist. LEXIS 30537 at *11 (C.D. Cal. April 20, 2007).

The D.C. Circuit Court’s branch standard revives the

unfettered ability of the Government to punish an entity

“otherwise associated with” an SDGT. The Circuit Court’s

opinion rejects as unnecessary a showing of “ownership or

control,” or a showing of “material support,” which both

the Government and the District Court in California

agreed were necessary to bring the order into conformity

with the First Amendment. Guilt by mere association is no

less unconstitutional here, when established judicially by

the Circuit Court’s branch standard, than it was in Hu-

manitarian Law Project, where it was established by

executive order.

25

II. Supreme Court Review is Necessary In Order

to Prevent the Executive Branch From Ignor-

ing Fundamental Constitutional Guarantees In

Its Quest to Fortify National Security.

There is no doubt that the legislative and executive

branches have a legitimate and pressing interest in

defending the United States against the threat of terror-

ism. However, our constitutional system of government

that protects civil liberties is one of the greatest assets of

the nation we are defending, and those liberties should not

be discarded in the process. As the Supreme Court has

noted in the past:

“The imperative necessity for safeguarding these

rights to procedural due process under the gravest

of emergencies has existed throughout our consti-

tutional history, for it is then, under the pressing

exigencies of crisis, that there is the greatest

temptation to dispense with fundamental consti-

tutional guarantees which, it is feared, will inhibit

governmental action. “The Constitution of the

United States is a law for rulers and people,

equally in war and in peace, and covers with the

shield of its protection all classes of men, at all

times, and under all circumstances.’” Kennedy v.

Mendoza-Martinez, 372 U.S. 144 (1961) (quoting

Ex parte Milligan, 71 U.S. 2 (1866)).

In a case substantively similar to the instant case, the

Supreme Court made clear that it would intervene to

defend the freedom of association when that right is

violated in the name of Congress’ legitimate wartime

interests in protecting America. United States v. Robel,

389 U.S. 258 (1967). In Robel, America faced the threat of

communism, rather than terrorism. Instead of Specially

26

Designated Global Terrorists, the Government maintained

a registry of “Communist-action organizations.” See id. at

259-60. Under the Subversive Activities Control Act of

1950, no member of such an organization could work in a

defense facility. Jd. at 260. The Court struck down the

legislation as unconstitutional, refusing to read into it

requirements of active membership and specific intent to

further unlawful goals. Jd. at 262. The Act literally estab-

lished guilt by association alone, with no need to prove

that an individual’s association posed the threat feared by

the Government. Jd. at 265. The statute was also over-

broad because it was rendered irrelevant that an individ-

ual was a passive member of the communist group, was

unaware of the group’s unlawful aims, or disagreed with

those aims. Jd. at 266. Chief Justice Warren eloquently

discussed the Court’s role in such situations:

Implicit in the term ‘national defense’ is the no-

tion of defending those values and ideals which

set this Nation apart. For almost two centuries,

our country has taken singular pride in the de-

mocratic ideals enshrined in its Constitution,

and the most cherished of those ideals have

found expression in the First Amendment. It

would indeed be ironic if, in the name of national

defense, we would sanction the subversion of one

of those liberties — the freedom of association —

which makes the defense of the Nation worth-

while. Jd. at 264.

Once again, the Government has used its legitimate

interest in national defense to justify punishment based on

association alone. The Circuit Court’s branch standard

upheld the blocking of IARA-USA’s assets, even though

IARA-USA has repeatedly denounced terrorism, and

27

without any showing that IARA-USA knew of any illicit

conduct, intended to further any illicit conduct, provided

material support to terrorists, provided material support

to the entity accused of providing material support to

terrorists, or in any way posed the threat the Government

sought to prevent. Such a standard of guilt by association

is impermissible.

CONCLUSION

Because the Circuit Court’s branch standard is incon-

sistent with Supreme Court and Circuit Court precedent,

violates the United States Constitution, and creates a

chilling and dangerous infringement on associational rights

that cannot be justified by national security interests,

IARA-USA respectfully requests that the United States

Supreme Court grant this Petition for Writ of Certiorari.

Alternatively, Petitioner requests summary reversal.

Respectfully submitted,

ZWERLING, LEIBIG & MOSELY, P.C.

JOHN KENNETH ZWERLING*

Attorneys for Plaintiff-Appellant

108 North Alfred Street

Alexandria, VA 22314

(703) 684-8000

AKEEL & VALENTINE, PLC

SHEREEF HAD! AKEEL

Attorneys for Plaintiff-Appellant

401 S Old Woodward Ave

Ste 430

Birmingham, MI 48009

(248) 594-9595

*Counsel of Record

DATED: May 14, 2007

App. l

ISLAMIC AMERICAN RELIEF AGENCY (IARA-USA),

APPELLANT v. ALBERTO GONZALES, IN HIS

OFFICIAL CAPACITY AS ATTORNEY GENERAL

OF THE U.S., ET AL., APPELLEES

No. 05-5447

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

477 F.3D 728; 2007 U.S. App. LEXIS 3269

November 20, 2006, Argued

February 13, 2007, Decided

COUNSEL: Shereef H. Akeel argued the cause for

appellant. With him on the briefs was John Kenneth

Zwerling.

Douglas Letter, Litigation Counsel, U.S. Department of

Justice, argued the cause for appellees. With him on the

brief was Peter D. Keisler, Assistant Attorney General.

Sharon Swingle, Attorney, entered an appearance.

JUDGES: Before: SENTELLE and TATEL, Circuit

Judges, and EDWARDS, Senior Circuit Judge. Opinion for

the Court filed by Circuit Judge SENTELLE.

OPINION BY: SENTELLE

OPINION:

SENTELLE, Circuit Judge: The Islamic American Relief

Agency (“IARA-USA”), based in Columbia, Missouri,

challenges the district court’s decision upholding the

blocking of its assets. The government concluded that the

organization was a branch office of a Specially Designated

Global Terrorist and invoked its authority under anti-

terrorism laws to block IARA-USA assets. In this appeal,

IARA-USA contends that the district court erroneously

App. 2

held that the record supports the government’s conclusion,

and that it erroneously dismissed and entered summary

judgment for defendants on IARA-USA’s claims under the

Administrative Procedure Act and the Constitution. IARA-

USA also argues that it should have been permitted to

amend its complaint to request access to its blocked funds

for payment of attorneys’ fees. Because we conclude that

the designation was supported by the record and was not

contrary to law, we affirm the district court’s disposition of

the case, but on the question of attorneys’ fees we remand

for further proceedings.

I

In 1985, a Sudanese immigrant founded IARA-USA as

the Islamic African Relief Agency. Since then, the entity

has engaged in humanitarian activities around the world,

often in partnership with similar organizations. In 2000,

IARA-USA changed its name from the “Islamic African

Relief Agency” to the “Islamic American Relief Agency”

(emphasis added). Meanwhile, the entity in Sudan calling

itself the Islamic African Relief Agency (“LARA”) continued

to exist under that name.

On October 13, 2004, the Office of Foreign Assets

Control in the Department of the Treasury (“OFAC”)

designated IARA as a Specially Designated Global Terror-

ist (“SDGT”). The designation was based on OFAC’s

conclusion that IARA “provides financial support or other

services to persons who commit, threaten to commit or

support terrorism” in violation of anti-terrorism laws.

Ajithough IARA-USA was not independently designated,

OFAC considered it to be the United States branch of

LARA and included it in the blocking notice. This meant

App. 3

that none of IARA-USA’s financial assets or property could

be “transferred, withdrawn, exported, paid, or otherwise

dealt in without prior authorization from OFAC.” IARA-

USA could not receive “any contribution of funds, goods, or

services,” nor could it continue to use its offices or remove

any items of corporate property. Any violation of the

blocking notice could subject LARA-USA to criminal and

civil penalties.

IARA-USA immediately contested the blocking,

maintaining that it is a separate entity from IARA. It

requested that OFAC review the designation and permit

IARA-USA to access its blocked funds for the limited

purpose of paying attorneys’ fees. In late December 2004,

having failed to persuade OFAC to unblock its assets,

IARA-USA filed a complaint in district court, naming as

defendants the Attorney General, the Secretary of the

Treasury, and other unidentified FBI agents and Treasury

personnel.’ Relevant to this appeal, it claimed that (1) the

blocking is unsupported by the record and thus violates

the APA and the International Emergency Economic

Powers Act, 50 U.S.C: §§ 1701-1707; (2) the blocking

violates IARA-USA’s constitutional rights of equal protec-

tion, free exercise of religion, and free association; and (3)

IARA-USA should be permitted to pay attorneys’ fees from

the blocked funds. In a memorandum opinion and order

issued on September 15, 2005, the district court dismissed

or entered summary judgment in favor of defendant on all

claims. Islamic Am. Relief Agency v. Unidentified FBI

Agents, 394 F. Supp. 2d 34 (D.D.C. 2005) (*JARA-USA”).

The district court held that the record supported OFAC’s

’ For simplicity, we refer to the remaining defendants coilectively

as “the Government.”

App. 4

conclusion that [ARA-USA was a branch of IARA, and that

the blocking was proper under applicable laws and the

Constitution. It also denied the motion to access blocked

funds for attorneys’ fees.

In this appeal, IARA-USA argues that the district

court erred in rejecting the three arguments described

above, and that it erred in failing to ensure that the

Government complied with an internal regulation requir-

ing it to declassify record evidence and in denying discov-

ery before entering summary judgment. IARA-USA does

not challenge the district court’s ruling on its other claims.

II

We note at the outset that the designated entity,

LARA, is not a party to this case, and IARA-USA does not

challenge the evidentiary basis for the designation of its

alleged parent. Rather, the question here is whether the

record supports OFAC’s conclusion that IARA-USA is a

branch of LARA. If so, as LIARA-USA conceded at oral

argument, OFAC’s blocking of its assets was a proper

consequence of the designation.

We review de novo the district court’s entry of sum-

mary judgment in favor of the defendants. We will affirm

if, viewing all evidence in the light most favorable to

IARA-USA, “there is no genuine issue as to any material

fact and ... the moving party is entitled to judgment as a

matter of law.” FED. R. CIV. P. 56(c); see McCready v.

Nicholson, 465 F.3d 1, 7 (D.C. Cir. 2006). A dispute over a

material fact is “genuine” if the evidence is “such that a

reasonable jury could return a verdict for the nonmoving

party.” Id. at 7 (quoting George v. Leavitt, 366 U.S. App.

D.C. 11, 407 F.3d 405, 410 (D.C. Cir. 2005)). Under the

App. 5

same de novo standard, the dismissal of claims under

Federal Rule of Civil Procedure 12(b)(6) will be affirmed if

“it appears beyond doubt that [[ARA-USA] can prove no

set of facts in support of [its] claim which would entitle [it]

to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct.

99, 2 L. Ed. 2d 80 (1957). We accept the complaint’s factual

allegations as true and give IARA-USA the benefit of all

inferences that can reasonably be drawn therefrom.

Browning v. Clinton, 352 U.S. App. D.C. 4, 292 F.3d 235,

242 (D.C. Cir. 2002). This Court need not, however, accept

inferences that are unsupported by the facts set out in the

complaint, nor will it accept legal conclusions cast in the

form of factual allegations. Kowal v. MCI Communications

Corp., 16 F.3d 1271, 1276, 305 U.S. App. D.C. 60 (D.C. Cir.

1994).

Our review of an SDGT designation falls under the

APA, and thus its highly deferential standard of review

applies. See Holy Land Found. for Relief & Dev. v.

Ashcroft, 357 U.S. App. D.C. 35, 333 F.3d 156, 162 (D.C.

Cir. 2003). Under that standard, we will set aside OFAC’s

action only if it is “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.” 5

U.S.C. § 706(2)(A). We may not substitute our judgment

for OFAC’s, but we will require it to “examine the relevant

data and articulate a satisfactory explanation for its action

including a rational connection between the facts found

and the choice made.” Motor Vehicle Mfrs. Ass’n v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S. Ct. 2856,

77 L. Ed. 2d 443 (1983) (internal quotation marks omit-

ted); see also Cellular Telecomms. & Internet Ass’n v. FCC,

356 U.S. App. D.C. 238, 330 F.3d 502, 507 (D.C. Cir. 2003).

Thus, with respect to the APA claims, if OFAC’s actions

were not arbitrary and capricious and were based on

App. 6

substantial evidence, we must affirm the district court’s

decision. 5 U.S.C. § 706(2)(A); Holy Land, 333 F.3d at 162.

A

This case is the first in this Court challenging an

SDGT designation based on a branch relationship with an

entity that supports terrorists. Our prior cases involved

entities that directly supported terrorists. [ARA-USA

suggests that because of this factual difference, we should

review the blocking as we would review an alias designa-

tion in a Foreign Terrorist Organization (“FTO”) case. In

those cases, we require evidence that the designated entity

“so dominates and controls” the alleged alias entity that

they can be considered one and the same. Nat’? Council of

Resistance of Iran v. Dep’t of State, 362 U.S. App. D.C. 148,

373 F.3d 152, 157 (D.C. Cir. 2004) (“NCRI”). On LARA-

USA's theory, then, blocking its assets based on the desig-

nation of LARA was proper only if IARA “dominates and

controls” IARA-USA. The Government disagrees, arguing

that the alias test is not applicable here because this

blocking was not based on an alias theory. It urges instead

that the blocking may stand if there is sufficient evidence

that IARA-USA and IARA are the same organization, even

in the absence of evidence that one controls the other.

We conclude that the Government has the better

argument. To determine whether the evidence is sufficient,

we must employ a test that reflects the theory on which

the assets were blocked. The “dominates and controls” test

is appropriate for reviewing the existence of a principal-

agent relationship because, where there is sufficient

evidence to find an agency relationship, substantial

evidence of the principal’s unlawful activity is sufficient to

App. 7

justify the designation or blocking of the agent. See NCRI,

373 F.3d at 157 (concluding that the “dominates and

controls” test is an appropriate basis for upholding an

alias designation, because of the “ordinary principle[} of

agency law” that “where a corporate entity is so exten-

sively controlled by its owner that a relationship of princi-

pal and agent is created ... one may be held liable for the

actions of the other”) (internal quotation marks and

citation omitted). In this case, however, OFAC’s theory was

that [ARA-USA and IARA, along with other branch offices,

comprised a single global organization. The Government

argues that their relationship, therefore, is more accu-

rately described as one between different offices of the

same entity. It follows that, if the record contains substan-

tial evidence that IARA-USA is a branch of LARA, then it

was proper for OFAC to subject IARA-USA to the blocking

as a result of I[ARA’s designation.

The district court applied the proper standard. It

entered summary judgment on the APA claims, concluding

that the record contained “substantial evidence” to support

OFAC’s conclusion that IARA-USA “is related and con-

nected to the IARA,” and accordingly that the designation

was not arbitrary and capricious. JARA-USA, 394 F. Supp.

2d at 45-46. As did the district court, we shall limit our

review of the designation to the administrative record.

Holy Land, 333 F.3d at 162.

With this framework in mind, we turn to the unclassi-

fied record. While the record contains a great number of

documents, we discuss here only a sampling of the most

pertinent. LARA-USA was founded by an immigrant from

Sudan, the site of LARA’s offices, and was incorporated with a

name identical to [ARA’s from its founding until 2000, when

LARA-USA made the minor change of replacing “African” in

App. 8

its name with “American.” IARA-USA’s Articles of Incorpo-

ration describe it as “Islamic African Relief Agency United

States Affiliate” and include the purpose of “effect[ing] the

Objectives and Means of the Islamic African Relief Agency

as set forth in its Constitution.” In the event of IARA-

USA’s dissolution, the Articles of Incorporation provided

that L[ARA, among other entities, should receive its assets.

Since its founding, IARA-USA has continued to

engage in conduct that evinces a branch relationship with

IARA. In 1998, for example, IARA-USA applied to the

Treasury Department for a license to transfer funds to

“Islamic African Relief Agency, Sudan,” in which it de-

scribed itself as “The Islamic African Relief Agency, United

States Affiliate.” It described “the Islamic African Relief

Agency, Sudan” as its “partner in Sudan.” In a letter to the

Washington Times on October 10, 1995, IARA-USA’s

Executive Director identified himself as speaking on

behalf of “IARA and its partners,” implicitly accepted the

newspaper’s characterization of [ARA as the “Khartoum-

based ‘Islamic Relief Agency,’” and acknowledged IARA’s

“branch offices in the United States” and other countries.

Solicitation materials used by LARA-USA stated that its

“international headquarters are in Khartoum, Sudan.”

Additionally, LARA-USA maintained financial connections

with at least one other IARA branch and its address was

listed on LARA websites as a United States branch office.

IARA-USA denies that this evidence reveals a branch

relationship. The initial identity and current similarity in

the entities’ names, it claims, is purely coincidental: the

founder of LARA-USA, though aware of IARA’s existence,

chose the name because it was descriptive of the organiza-

tion’s mission. Although IARA-USA offers no explanation

for the references to LARA in its Articles of Incorporation,

App. 9

it nonetheless categorically denies that the organization

was founded as a branch.

IARA-USA’s arguments fail in the face of clear and

substantial evidence in the record. The evidence supports

the conclusion that, at its founding, [ARA-USA considered

itself a branch of IARA. An entity’s “genesis and history”

may properly be considered by OFAC in making the

designation or blocking, at least where the ties have not

been severed. Holy Land, 333 F.3d at 162. Although it is

true that IARA-USA subsequently amended its name,

there is no indication that it severed the relationship,

particularly in light of the more recent evidence discussed

above. Indeed, since IARA-USA itself does not concede

that it was ever a branch of IARA, it cannot argue that the

name change effected a severance of the relationship.

Rather, LARA-USA would have us believe that the

amended name, as the initial name, was chosen simply

because it was descriptive, without any intention of

aligning with IARA. We need not pass on the credibility of

this explanation, however, because we hold that the other

evidence in the record is sufficient to support OFAC’s

interpretation of the evidence.

We acknowledge that the unclassified record evidence

is not overwhelming, but we reiterate that our review — in

an area at the intersection of national security, foreign

policy, and administrative law — is extremely deferential.

Cf. Holy Land, 333 F.3d at 166 (noting the unique nature

of reviewing an SDGT designation as “involving sensitive

issues of national security and foreign policy”); Humani-

tarian Law Project v. Rene, 205 F.3d 1130, 1137 (9th Cir.

2000) (noting that, where a “regulation involves the

conduct of foreign affairs, we owe the executive branch

even more latitude than in the domestic context” and

App. 10

stating that the high degree of judicial deference to the

decision to designate an entity as an FTO “is a necessary

concomitant of the foreign affairs power”). Under that

standard, the record — containing various types of evidence

from several different sources, and covering an extended

period of time — provides substantial evidence for the

conclusion that [ARA-USA is part of IARA. Furthermore,

although we deem it unnecessary to sustain OFAC’s

actions, the classified record contains extensive evidence

that L[ARA-USA is a branch of IARA.

OFAC’s conduct was also lawful under the relevant

statute and Executive Orders. In the wake of the attacks

of September 11, 2001, the President invoked the author-

ity of the International Emergency Economic Powers Act,

50 U.S.C. §§ 1701-1707 (“IEEPA”) by declaring a national

emergency with respect to the “unusual and extraordinary

threat to national security” posed by terrorists. Blocking

Property and Prohibiting Transactions With Persons Who

Commit, Threaten to Commit, or Support Terrorism, Exec.

Order No. 13,224, 66 Fed. Reg. 49,079 (Sept. 23, 2001), as

amended by Exec. Orders No. 13,268, 67 Fed. Reg. 44,751

(July 2, 2002) and No. 13,372, 70 Fed. Reg. 8499 (Feb. 16,

2005). In that Order, the President described the types of

conduct that could subject an entity to blocking of its

assets, such as providing financial support to terrorists.

He named a number of entities whose assets would be

blocked immediately, and authorized the Treasury De-

partment to designate additional entities that it deter-

mines are within the purview of the Order. Exec. Order

No. 13,224, §§ 1, 7, 66 Fed. Reg. at 49,079, 49,081.

IARA-USA argues that OFAC cannot block an entity’s

assets unless it determines that the entity itself poses an

“unusual and extraordinary threat to national security.”

App. 11

The district court rejected this argument, holding that the

threat need not be found with regard to each individual

entity. IARA-USA, 394 F. Supp. 2d at 46. We agree with

the district court. The President may exercise his author-

ity under the IEEPA “to deal with any unusual and ex-

traordinary 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, if

the President declares a national emergency with respect

to such threat.” 50 U.S.C. § 1701(a). Thus, once the Presi-

dent has declared a national emergency, the IEEPA au-

thorizes the blocking of property to protect against that

threat. Jd. § 1702(a)(1)(B). It is that authority OFAC

invoked when it blocked L[ARA-US\.4's assets. We hold that

the district court correctly dismissed this claim because

IARA-USA could prove no set of facts that would entitle it

to relief.

B

We turn next to IARA-USA’s claims that the blocking

violated its rights under the Constitution. As an initial

matter, we note that LARA-USA’s constitutional claims

rest on a misinterpretation of, OFAC’s basis for the desig-

nation. IARA-USA argues that the blocking was unconsti-

tutional because the Government has not shown that

IARA-USA is controlled or dominated by IARA. But as

explained above, OFAC’s basis for the blocking was that

IARA-USA functions as a branch of IARA. Thus, the

“dominates and controls” test is not relevant to whether

the blocking was constitutional. And since we have con-

cluded that there was substantial evidence that I[ARA-

USA was a branch of IARA, these constitutional claims

lose their footing. As we have noted previously, “there is no

App. 12

First Amendment right nor any other constitutional right

to support terrorists.” Holy Land, 333 F.3d at 166; see also

Humanitarian Law Project, 205 F.3d at 1133 (“[TJhere is

no constitutional right to facilitate terrorism” with mate-

rials or funding.).

Our analysis of [ARA-USA’s constitutional arguments

is informed by our recent decision in Holy Land, 333 F.3d

at 164-67. In that case, Holy Land Foundation (“HLF”)

challenged its designation as an SDGT under the First,

Fourth, and Fifth Amendments. Jd. The district court

rejected HLF’s First and Fifth Amendment claims, and we

affirmed, on the basis that “the law is established that

there is no constitutional right to fund terrorism.” Jd. at

165. Thus, where an organization is found to have ¢: 1p-

ported terrorism, government actions to suspend that

support are not unconstitutional. Jd. (noting that HLF

could not have “produced evidence upon which a reason-

able trier of fact could have found that the designation and

the blocking of assets violated its First or Fifth Amend-

ment rights” because “there is no constitutional right to

fund terrorism” and the record evidence established that

HLF did fund a terrorist organization).

IARA-USA contends that OFAC violated its right to

equal protection under the Fifth Amendment by singling it

out as a Muslim organization. As evidence that OFAC

treated it differently than similar organizations, [ARA-

USA notes that UNICEF’s funds were not blocked even

though it also provided financial support to LARA. The

district court entered summary judgment after concluding

that IARA-USA had not shown that it was similarly

situated to UNICEF. JARA, 394 F. Supp. 2d at 50-51. As

the district court noted, to survive summary judgment

IARA-USA must show that it was treated differently than

App. 13

a similar organization with similar ties to an SDGT. Cf.

Plyler v. Doe, 457 U.S. 202, 216, 102 S.Ct. 2382, 72

L. Ed. 2d 786 (1982) (“[T]he Constitution does not require

things which are different in fact or opinion to be treated

in law as though they were the same.” (quoting Tigner v.

Texas, 310 U.S. 141, 147, 60 S.Ct. 879, 84 L. Ed. 1124

(1940))). LARA-USA asserts that UNICEF entered into a

contract in which it agreed to provide financial support to

IARA. But a single contact of this nature does not begin to

approximate the extensive relationship between IJARA-

USA and IARA. As the district court held, [ARA-USA and

UNICEF are not similarly situated, and as a result their

disparate treatment by OFAC cannot itself support a claim

that IARA-USA has been denied equal protection of the

law. LARA-USA’s equal protection claim thus was properly

rejected by the district court.

IARA-USA also argues that OFAC violated its rights

of association and free exercise of religion under the First

Amendment. Its freedom of association claim is that the

blocking inhibits its ability to engage in the associational

activity of making financial contributions and that its

association, even with an unpopular entity, cannot form

the basis of the decision to block its assets. Following Holy

Land, the district court dismissed the claim, concluding

that the blocking did not implicate [ARA-USA’s association

rights because it did not prevent or punish the associa-

tional activity of [ARA-USA, but rather was directed at its

funding of terrorists, as a branch of LARA. JARA-USA, 394

F. Supp. 2d at 54. We agree with the district court. Our

decision in Holy Land relied on the Ninth Circuit’s recent

decision in Humanitarian Law Project. Holy Land, 333

F.3d at 166 (holding, with regard to HLF’s freedom of

association claim, “that there is no First Amendment right

App. 14

nor any other constitutional right to support terrorists”

with funding) (citing Humanitarian Law Project, 205 F.3d

at 1133). In Humanitarian Law Project, entities desig-

nated as FTOs argued that preventing them from making

donations in support of humanitarian and political activi-

ties violated their First Amendment right of association, at

least where it was not shown that they intended their

donations to support unlawful activities. 205 F.3d at 1133.

The Ninth Circuit noted that freedom of association is

implicated where people are punished merely for “mem-

bership in a group or for espousing its views, whereas the

statute in question only prohibited the act of giving mate-

rial support.” Id. (citing NAACP v. Claiborne Hardware

Co., 458 U.S. 886, 920, 102 S. Ct. 3409, 73 L. Ed. 2d 1215

(1982)). Similarly, it held that the requirement to show

intent to aid unlawful acts was not applicable in the

context of donations to terrorist groups, because the

money could be used for unlawful activities regardless of

donor intent. Jd. at 1133-34.

Here, as in Holy Land, we adopt the Ninth Circuit’s

reasoning. The blocking was not based on, nor does it

prohibit, associational activity other than financial sup-

port. The blocking of IARA-USA’s assets does not punish

advocacy of IARA’s or any other entity’s goals. See Hu-

manitarian Law Project, 205 F.3d at 1133-34 (distinguish-

ing financial support from advocacy and noting that, just

as “there is no constitutional right to facilitate terrorism

by giving terrorists the weapons and explosives with

which to carry out their grisly missions,” neither is there

any “right to provide resources with which terrorists can

buy weapons and explosives”). We hold that OFAC’s

blocking of L[ARA-USA’s assets does not implicate [ARA-

USA’s First Amendment right of association.

App. 15

Nor is the Government required to show that IARA-

USA funded terrorist organizations with an intent to aid

their unlawful activities. Although the Supreme Court has

previously imposed such an intent requirement, it is

limited to cases in which liability was imposed by reason

of association alone. See Healy v. James, 408 U.S. 169,

186, 92 S. Ct. 2338, 33 L. Ed. 2d 266 (1972) (noting that

where First Amendment rights are denied based on “guilt

by association alone, without (establishing) that an indi-

vidual’s association poses the threat feared by the Gov-

ernment ... [t]he government has the burden of

establishing a knowing affiliation with an organization

possessing unlawful aims and goals, and a specific intent

to further those illegal aims”) (internal quotation marks

and citations omitted). In this case, however, OFAC’s

decision to block IARA-USA’s assets was not based on

association. Rather, as we have explained above, the

decision was based on OFAC’s finding that IARA-USA is a

branch of an SDGT. Thus we do not require a showing that

IARA-USA intended its funding to .support terrorist

activities. Cf. Humanitarian Law Project, 205 F.3d at

1133-34 (“We therefore do not agree ... that the First

Amendment requires the government to demonstrate a

specific intent to aid an organization’s illegal activities

before attaching liability to the donation of funds.”).

As to [IARA-USA’s free exercise of religion claim, we

conclude that the district court properly entered summary

judgment for defendants. IARA-USA argues that the

blocking “substantially burdens” the religious exercise of

its members because they intended their donations to

fulfill their religious obligation to engage in humanitarian

charitable giving. Blocking those funds before they could

be distributed, IARA-USA contends, interfered with that

App. 16

religious expression. As we explained in Holy Land,

“lalcting against the funding of terrorism does not violate

the free exercise rights protected by ... the First Amend-

ment. There is no free exercise right to fund terrorists.”

333 F.3d at 167. We have already concluded that there was

sufficient evidence in the administrative record that

IARA-USA did, through its relationship with IARA,

support terrorism. We thus affirm the district court’s

dismissal of IARA-USA’s free exercise claim.

IARA-USA argues that, had it been permitted to

engage in additional discovery on its constitutional claims,

it might have found evidence sufficient to survive sum-

mary judgment. The district court held that discovery was

not warranted because, based on the record presented,

discovery would not have produced any evidence to create

a genuine factual dispute and thus could not have changed

its disposition of the claims. JARA-USA, 394 F. Supp. 2d at

43 n.9. “The district court has broad discretion in its

handling of discovery, and its decision to allow or deny

discovery is reviewable only for abuse of discretion.” Brune

uv. IRS, 274 U.S. App. D.C. 89, 861 F.2d 1284, 1288 (D.C.

Cir. 1988) (quoting FED. R. CIV. P. 26(b)(1) (internal

quotation marks and citation omitted)). The district court’s

review of the APA claims were limited to the administra-

tive record, but IARA-USA “had ample opportunity” to —

and indeed did — come forward with additional evidence

during the administrative proceeding to support its other

claims. IARA-USA, 394 F. Supp. 2d at 43 n.9. See Holy

Land, 333 F.3d at 166 (noting that there was an adequate

record where the designated entity had “every opportunity

and incentive to produce the evidence sufficient to rebut”

the evidence supporting the designation in order to create

a genuine factual dispute). We thus conclude that the

App. 17

district court did not abuse its discretion in denying

discovery.

C

IARA-USA also argues that the district court erred in

failing to ensure that the Government complied with an

internal regulation governing the declassification of record

material in judicial proceedings. The regulation, promul-

gated by the Department of Justice, states in relevant part

that when that agency is required “to produce classified

information” in litigation, it “shall immediately determine

from the agency originating the classified information

whether the information can be declassified.” 28 C.F.R.

§ 17.17(a)(1). In a hearing in early 2005, the district court

accepted DOJ’s representation that it had complied with

the regulation. Even if it had not, the regulation provides

no private right of action, as IARA-USA itself conceded

at oral argument before this Court. Cf Alexander uv.

Sandoval, 532 U.S. 275, 285-86, 121 S.Ct. 1511, 149

L. Ed. 2d 517 (2001) (noting, in the context of anti-

discrimination legislation, that a regulation does not make

actionable conduct that is not prohibited by the statute).

We thus find no basis on which we could conclude that the

district court erred with respect to the agency’s compliance

with its internal regulation.

* *

Finally, LARA-USA maintains that the district court

erred in denying its motion to compel payment of attor-

neys’ fees. The blocking notice stated that OFAC would

consider “requests for specific licenses to ameliorate the

effects” of the blocking, including permitting “the payment

from blocked funds ... of attorneys’ fees and expenses

App. 18

related to legal representation of the organization in this

matter.” In its motion, IARA-USA argued that OFAC acted

arbitrarily and capriciously in denying its request to

access the blocked funds for the purpose of paying attor-

neys’ fees connected with the litigation. The district court

denied the motion, concluding that the motion raised a

new claim that was collateral to the complaint and thus

that the issue was not properly before the court. JARA-

USA, 394 F. Supp. 2d at 39 n.4. On appeal, IARA-USA

concedes that the issue was not raised in its complaint,

but argues that the district court should have permitted it

to amend its complaint. Indeed, it notes, it requested leave

to amend its complaint in its motion to compel attorneys’

fees: “If the Court adopts Defendants’ argument, then by

virtue of this Motion, Plaintiff seeks leave to appeal to

amend its Complaint for OFAC’s wrongful denial of its

attorney fees, in violation of APA.” The district court

nowhere addressed the request for leave to amend, though

this is hardly surprising as this one sentence was buried

in an eight-page motion. JARA-USA, 394 F. Supp. 2d at 39

n.4 (denying the motion to compel without reference to its

alternative request for leave to amend the complaint).

Leave to amend one’s complaint is liberally permitted.

FED. R. CIV. P. 15(a) (leave to amend a pleading “shall be

freely given when justice so requires”); Foman v. Davis,

371 U.S. 178, 182, 83 S. Ct. 227, 9 L. Ed. 2d 222 (1962).

We also note that there is some evidence in the record

suggesting that IARA-USA’s decision to omit the issue

from its complaint and the district court’s decision to deny

the motion may have been based on communications by

OFAC implying that it intended to grant the request.

LARA-USA’s request for leave to amend, therefore, should

be considered. We express no opinion on how the district

App. 19

court should rule, but we believe it should consider the

motion. We therefore remand on this issue in order to give

the district court an opportunity to consider the motion for

leave to amend.

il

As the district court held, the blocking of IARA-USA’s

assets was not unlawful. OFAC’s determination that

IARA-USA functions as a branch of IARA was supported

by substantial evidence in the unclassified record, and was

proper under the relevant anti-terrorism laws, the APA

and the Constitution. Accordingly, [ARA-USA’s claims are

without merit and were properly dismissed or disposed of

on summary judgment by the district court. The judgment

of the district court is affirmed in all respects except that

portion relating to LARA-USA’s motion for leave to amend

its complaint. On that issue, the case is remanded to the

district court for further proceedings.

So ordered.

App. 20

ISLAMIC AMERICAN RELIEF AGENCY, Plaintiff, v.

UNIDENTIFIED FBI AGENTS, et al., Defendants.

Civil Action No. 04-2264 (RBW)

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

394 F. Supp. 2d 34; 2005 U.S. Dist. LEXTS 21570

September 15, 2005, Decided

COUNSEL: For ISLAMIC AMERICAN RELIEF AGENCY,

(L[ARA-USA), Plaintiff: Shereef Akeel, MELAMED, DAILEY &

AYKEL, P.C., Huntington Woods, MI.

For JOHN ASHCROFT, In his official capacity as Attorney

General of the U.S., PAUL SCHULP, Defendants: Andrea

Gacki, Carlton Greene, U.S. DEPARTMENT OF JUS-

TICE, Washington, DC.

For JOHN SNOW, In his official capacity as Secretary

of the Department of Treasury, UNIDENTIFIED FBI

AGENTS, UNIDENTIFIED DEPARTMENT OF TREAS-

URY PERSONNEL, Defendants: Andrea Gacki, U.S.

DEPARTMENT OF JUSTICE, Washington, DC.

JUDGES: REGGIE B. WALTON, United States District

Judge.

OPINION BY: REGGIE B. WALTON

OPINION:

MEMORANDUM OPINION'

’ The contents of this memorandum opinion contains only informa-

tion that is already in the public domain, i.e., the plaintiff’s complaint,

the defendants’ unclassified papers, and the unclassified administrative

record.

App. 21

On December 30, 2004, the plaintiff commenced this

action claiming violations by the defendants of the First,

Fourth and Fifth Amendment to the United States Consti-

tution, the International Emergency Economic Powers Act

(“IEEPA”), 50 U.S.C. § 1701 et seg. (2000), and the Admin-

istrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq.

(2003). Complaint (“Compl.”) 7 1. On that same day, the

plaintiff filed a motion for a preliminary injunction, which

this Court denied on February 18, 2005. February 18, 2005

Order. Currently before the Court is (1) the Defendants’

Motion to Dismiss and for Summary Judgment’ and (2)

Defendant Paul Schlup’s Motion to Dismiss.’ For the

reasons set forth below, the Court grants both motions.’

* The following papers have been submitted to the Court in

connection with this motion: (1) Memorandum in Support of Defen-

dants’ Motion to Dismiss and for Summary Judgment (“Defs.’ Mem.”);

(2) Plaintiff's Answer to Defendants’ Motion to Dismiss and for

Summary Judgment (“Pl.’s Opp’n”); and (3) Reply in Support of

Defendants’ Motion to Dismiss and for Summary Judgment (“Defs.’

Reply”).

* The following papers have been submitted to the Court in

connection with this motion: (1) Memorandum of Points and Authorities

in Support of Defendant Paul Schlup’s Motion to Dismiss (“Schlup’s

Mem.”); (2) the Plaintiff’s Answer to Defendant Paul Schlup’s Motion

to Dismiss (“Pl.’s Opp’n to Schlup’s Mot.”); and (3) Reply in Support of

Defendant Paul Schlup’s Motion to Dismiss (“Schlup’s Reply”).

* Also before the Court is the Plaintiff’s Motion for Reconsidera-

tion and to Amend Judgment. This motion is directed at the Court’s

Order issued in response to the plaintiff’s motion for a preliminary

injunction. Because this Court concludes that the defendants are

entitled to summary judgment or dismissal of al] the plaintiff’s claims,

the plaintiff’s motion for reconsideration must be denied. In addition,

the plaintiff has filed a Motion to Compel Defendants to Pay Attorney

Fees (“Pl.’s Mot.”). This motion challenges the decision of the United

States Department of the Treasury, Office of Foreign Assets Control

(“OFAC”), denying the plaintiff access to blocked funds to pay its

attorney's fees. Pl.’s Mot. at 2-3. The plaintiff’s motion requires little

(Continued on following page)

App. 22

I. Background

(A) Factual Background

The Islamic African Relief Agency, now the Islamic

American Relief Agency (“LARA-USA”), based in Columbia,

Missouri, was established in 1985 as a nonprofit humani-

tarian relief organization under section 501(c)(3) of the

United States Internal Revenue Code. Complaint

(“Compl.”) J 8; Pl.’s Opp’n at 6. Specifically, the [ARA-USA

has “provided charitable and humanitarian aid to refu-

gees, orphans, victims of human and natural disasters,

and other poor and needy persons and entities throughout

the world, without regard to faith or political affiliation.”

Compl. § 9. At the time the IARA-USA was incorporated in

the United States, an organization based in Sudan also

existed under the name Islamic African Relief Agency

(“IARA”).” Pl.’s Opp’n at 6. The plaintiff posits that the two

organizations are completely separate entities and are in

no way related. Compl. 7 12, 28. In 2000, the [ARA-USA

began expanding and providing humanitarian relief to

other countries outside of the African continent. Pl.’s

Opp’n at 7. Thus, to reflect its broader mission, the plain-

tiff changed its name to the Islamic American Relief

Agency (“IARA-USA”). Id.

discussion. The plaintiff concedes that its complaint lacks any facts or

claims to support this allegation as this decision to deny access to the

blocked funds occurred following the filing of the present action.

Plaintiff’s Reply to Defendants’ Opposition to Plaintiff’s Motion to

Compel Payment of Attorney's Fees at 1. As such, this claim is not

properly before the Court and must be denied. See Johnson v. DiMario,

14 F. Supp. 2d 107, 111 (D.D.C. 1998) (noting that a new claim must be

asserted in an amended complaint pursuant to Federal Rule of Civil

Procedure 15).

* The Court will refer to the United States entity as “LARA-USA,”

and the Sudan-based organization as “IARA.”

App. 23

On October 13, 2004, pursuant to Global Terrorism

Executive Order No. 13,224, and the IEEPA, the United

States Department of the Treasury, Office of Foreign

Assets Control (“OFAC”), designated the LARA, including

the IARA-USA, as a Specially Designated Global Terrorist

(““SDGT”), and blocked the assets of the LARA, along with

the assets of five of its senior officials.© Compl. 7] 23-26;

Compl., Ex. A; Pl.’s Opp’n at 11. The designation was

based on evidence, both classified and unclassified, that

purportedly demonstrated that the IARA “assists in,

sponsors, or provides financial, material, or technological

support for, or financial or other services to or in support

of, such acts of terrorism.... ” Exec. Order. 13,224,

§ 1(d)(i), 66 Fed. Reg. 49,079, at 49,080 (Sept. 23, 2001).

Based upon the blocking notice against the IARA, the

property of the LARA-USA was also blocked and its bank

accounts frozen. Compl. { 29. The OFAC blocking notice

stated that the IARA-USA could challenge the blocking

order by writing a letter to the Director of the OFAC.

Compl., Ex. A at 2. In addition to the blocking notice, the

plaintiff posits that the defendants illegally obtained a

sealed search warrant, and seized and removed property

from the IARA-USA office in Columbia, Missouri. Compl.

{I 31-32.

On December 30, 2004, the plaintiff filed this action

challenging the OFAC’s decision to block its assets. In

particular, the plaintiff brings this action against John

Snow, Secretary of the Treasury and Alberto Gonzales,

* Specifically, those officials were: Dr. Mohammed Ibrahim

Sulaiman, Jaffar Ahmad, Abdullah Makki, Abdul Aziz Abba Karmu-

hamad, Khalid Ahmed Jumah Al-Sudani, and Abrahim Buisir. Compl.

q 26 & Ex. B.

‘App. 24

Attorney General of the United States,’ in their official

capacities, and various unidentified Federal Bureau of

Investigation (“FBI”) Agents, Paul Schlup, a Special Agent

with the Internal Revenue Service, and other unidentified

Department of the Treasury employees both in their

individual and official capacities. Compl. JJ 13-21. The

plaintiff’s complaint asserts nine separate counts against

the various defendants. Specifically, the plaintiff alleges

violations of the APA, the First, Fourth and Fifth Amend-

ments to the United States Constitution, Civil Liability for

False Affidavit, and violations of 42 U.S.C. § 1985(3).

Compl. 7] 45-101. Moreover, the plaintiff seeks monetary

damages pursuant to Bivens v. Six Unknown Agents of the

Fed. Bureau of Narcotics, 403 U.S. 388, 29 L. Ed. 2d 619,

91 S. Ct. 1999 (1971) against the individual defendants.

(B) Statutory and Regulatory Background

(1) International Emergency Economic Powers

Act (““IEEPA”)

Through much of the Twentieth century, the United

States utilized economic sanctions as a tool of foreign policy

pursuant to the Trading With the Enemy Act (“TWEA”).

Passed in 1917, and amended in 1933, the TWEA granted

the President “broad authority” to “investigate, regulate,

... prevent or prohibit ... transactions” in times of war

or declared national emergencies. 50 U.S.C. app. § 5(b).

In 1977, through the passage of the IEEPA, Congress

further amended the TWEA. The IEEPA delineates “the

President’s authority to regulate international economic

" Pursuant to Fed. R. Civ. P. 25, the Court has substituted Alberto

Gonzales, the current Attorney General, as the proper defendant, for

John Ashcroft, who was the Attorney General when this action was filed.

App. 25

transactions during wars or national emergencies.” S. Rep.

No. 95-466 at 2. The IEEPA limited the TWEA’s applica-

tion to periods of declared wars and to certain existing

TWEA programs, while the IEEPA was applicable during

other times of declared national emergencies. See Regan v.

Wald, 468 U.S. 222, 227-28, 82 L. Ed. 2d 171, 104 S. Ct.

3026 (1984). Under the IEEPA, the President can declare a

national emergency “to deal with any unusual and extraor-

dinary 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). The IEEPA authorizes the President to

investigate, block during the pendency of an in-

vestigation, regulate, direct and compel, nullify,

void, prevent or prohibit, any acquisition, hold-

ing, withholding, use, transfer, withdrawal,

transportation, importation or exportation of, or

dealing in, or exercising any right, power, or

privilege with respect to, or transactions involv-

ing, any property in which any foreign country or

a national thereof has any interest by any per-

son, or with respect to any property, subject to

the jurisdiction of the United States. ...

50 U.S.C. § 1702(a)(1)(B).° However, the IEEPA specifically

prohibits the President from regulating or prohibiting

* In October 2001, Congress passed the Uniting and Strengthening

America by Providing Appropriate Tools Required to Intercept and

Obstruct Terrorism Act of 2001 (‘USA PATRIOT Act”), which amended

the IEEPA. These amendments added, among other things, authority to

block assets pending an investigation, and provided that, in case of

judicial review of an IEEPA blocking order, an agency record containing

classified information “may be submitted to the reviewing court ex

parte and in camera.” 50 U.S.C. § 1702(c) (emphasis added). Pursuant

to this provision, this Court has reviewed the classified portions of the

agency record in this case.

App. 26

directly or indirectly “donations, by persons subject to the

jurisdiction of the United States, of articles such as food,

clothing, and medicine ... except to the extent that the

President determines that such donations ... would

seriously impair his ability to deal with any national

emergency. ...” 50 U.S.C. § 1702(b)(2).

(2) Executive Order No. 13,224

Following the September 11, 2001 terrorist attacks on

the United States, President Bush, on September 23, 2001,

issued Executive Order 13,224, declaring a national

emergency with respect to the “grave acts of terrorism ...

and the continuing and immediate threat of further

attacks on United States nationals or the United States.”

Exec. Order. 13,224, 66 Fed. Reg. 49,079, at 49,079 (Sept.

23, 2001). Through this Executive Order, President Bush

invoked the authority granted to him under the IEEPA, id.

§ 1, and blocked all property and interests in property of

twenty-seven foreign terrorist, terrevist organizations, and

their supporters, each which were designated as SDGTs,

id., annex.

The Executive Order authorizes the Secretary of the

Treasury, in consultation with the Secretary of State and

the Attorney General, to designate additional SDGTs

whose property or interests in property should be blocked

because they “act for or on behalf of” or are “owned or

controlled by” designated terrorists, or because they

“assist in, sponsor, or provide ... support for,” or are

“otherwise associated” with them. Jd. § 1(c)-(d). Moreover,

the Executive Order also authorizes the Secretary of

Treasury to “employ all powers granted to the President

by IEEPA and [the United National Participation Act

App. 27

(‘UNPA’)]” and to promulgate rules and regulations to

carry out the purposes of the Order and to re-delegate

such functions if he chose to do so. Jd. § 7, 66 Fed. Reg. at

49,081. Moreover, the Executive Order states:

because of the ability to transfer funds or assets

instantaneously, prior notice to such persons of

measures to be taken pursuant to this order

would render these measures ineffectual. I there-

fore determine that for these measures to be ef-

fective in addressing the national emergency

declared in this order, there need be no prior no-

tice of a listing or determination made pursuant

to this order.

Id. § 10. In addition, section 4 of the Executive Order

states that “the making of donations of the type specified

in section 203(b)(2) of IEEPA (50 U.S.C. § 1702(b)(2)) ...

would seriously impair my ability to deal with the national

emergency declared in this order ... and [therefore the

President] ... prohibits such donations.... ” Jd. § 4, 66

Fed. Reg. at 49,080.

(3) Executive Order 13,372

On February 16, 2005, President Bush issued Execu-

tive Order 13,372. This Executive Order amended Execu-

tive Order 13,224 to make clear that the IEEPA’s

humanitarian aid exception does not authorize entities

blocked pursuant to Executive Order 13,324 to donate

humanitarian aid articles to anyone, even unblocked

persons, without prior authorization from the OFAC. Exec.

Order No. 13,372, 70 Fed. Reg. 8499 (Feb. 16, 2005).

Specifically, Executive Order 13,372 states:

App. 28

I hereby determine that the making of donations

of the type of articles specified in section

203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to,

or for the benefit of, any persons determined to

be subject to this order would seriously impair

my ability to deal with the national emergency

declared in this order, and would endanger

Armed Forces of the United States that are in a

situation where imminent involvement in hostili-

ties is clearly indicated by the circumstances,

and I hereby prohibit such donations as provided

by section 1 of this order.

Id. § 1

(4) Regulations

The OFAC has, pursuant to a delegation of authority

by the Secretary of the Treasury, promulgated record-

keeping and procedural regulations applicable to their

various sanctions programs. See, e.g., 31 C.F.R. pt. 500.

These regulations permit a designated or blocked indi-

vidual or entity to seek a license from the OFAC to

engage in any transaction involving blocked property. 31

C.F.R. § 501.801-802. In addition, the regulations establish

a procedure to allow a person to “seek administrative

reconsideration” of a designation or blocking if a party

believes an error has been made. Jd. § 501.806-807. Spe-

cifically, an applicant seeking administrative reconsidera-

tion is permitted to submit materials to contest the

designation, and the OFAC may request additional mate-

rials from the applicant in assessing the request for

reconsideration. Jd.

App. 29

II. The Defendants’ Summary Judgment and Dis-

missal Motion

(A) Standards of Review

On a motion to dismiss for failure to state a claim

upon which relief can be granted pursuant to Rule

12(b)(6), this Court must construe the allegations and

facts in the complaint in the light most favorable to the

plaintiff and must grant the plaintiff the benefit of all

inferences that can be derived from the facts alleged.

Conley v. Gibson, 355 U.S, 41, 45-46, 2 L. Ed. 2d 80, 78

S. Ct. 99 (1957); Barr v. Clinton, 361 U.S. App. D.C. 472,

370 F.3d 1196, 1199 (D.C. Cir. 2004) (citing Kowal v. MCI

Communications Corp., 305 U.S. App. D.C. 60, 16 F.3d

1271, 1276 (D.C. Cir. 1994)). However, the Court need not

accept asserted inferences or conclusory allegations that

are unsupported by the facts set forth in the complaint.

Kowal, 16 F.3d at 1276. In deciding whether to dismiss a

claim under Rule 12(b)(6), the Court can only consider the

facts alleged in the complaint, documents attached as

exhibits or incorporated by reference into the complaint,

and matters about which the Court may take judicial

notice. EEOC v. St. Francis Xavier Parochial Sch., 117

F.3d 621 at 624-25, 326 U.S. App. D.C. 67 (1997). The

Court will dismiss a claim pursuant to Rule 12(b)(6) only if

the defendant can demonstrate “beyond doubt that the

plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.” Conley, 355 U.S. at 45-

46.

This Court will grant a motion for summary judgment

under Rule 56(c) if “the pleadings, depositions, answers to

interrogatories and admissions on file, together with the

affidavits or declarations, if any, demonstrate that there is

no genuine issue as to any material fact and that the

App. 30

moving party is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(c). When ruling on a motion for summary

judgment, this Court must view the evidence in the light

most favorable to the non-moving party. Bayer v. United

States Dep't of Treasury, 294 U.S. App. D.C. 44, 956 F.2d

330, 333 (D.C. Cir. 1992). However, the non-moving party

cannot rely on “mere allegations or denials ... , but...

must set forth specific facts showing that there [are]

genuine issues for trial.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)

(citation omitted). Under Rule 56, “if a party fails to

establish the existence of an element essential to that

party’s case and on which that party will bear the burden

of proof at trial” summary judgment is warranted. Haz-

ward v. Runyon, 14 F. Supp. 2d 120, 122 (D.D.C. 1998)

(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91

L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). The party moving

for summary judgment bears the burden of establishing

the absence of evidence to support the non-moving party’s

case. Id. In considering a motion for summary judgment,

“the court must draw all reasonable inferences in favor of

the nonmoving party, and it may not make credibility

determinations or weigh the evidence.” Reeves v. Sander-

son Plumbing Prods., Inc., 530 U.S. 133, 150, 147 L. Ed. 2d

105, 120 S. Ct. 2097 (2000).’

* The vast majority of the plaintiff’s claims will be dismissed

pursuant to Rule 12(b)(6). However, as discussed later in this opinion,

the Court has looked beyond the complaint with regards to the plain-

tiff’s First and Fifth Amendment claims, and accordingly, the Court

will review those claims under the summary judgment standard. See

Fed. R. Civ P. 12(b). Although no discovery has taken place, it is

appropriate for this Court to look beyond the complaint and resolve

these claims under Rule 56(c), as the plaintiff has had ample opportu-

nity to come forward with, and indeed has provided this Court with, a

(Continued on following page)

App. 31

(B) Legal Analysis

The plaintiff’s principal claim in this action is that

the OFAC’s designation of the [ARA-USA as an SDGT and

the blocking of its assets, amount to violations of the APA,

namely, 5 U.S.C. § 706(2). Pl.’s Opp’n at 18. Under this

provision of the APA, this Court may vacate a decision by

an agency only if the decision is:

(A) arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law;

(B) contrary to constitutional right, power,

privilege, or immunity;”

(C) in excess of statutory jurisdiction, authority,

or limitations, or short of statutory right;

(D) without observance of procedure required

by law;”

substantial number of exhibits and declarations to support its positions.

Moreover, for several reasons, this Court must conclude that no further

discovery is warranted. First, the plaintiff’s principal claim is an APA

challenge to the OFAC decision. As such, that challenge is limited to a

review of the administrative record. Camp v. Pitts, 411 U.S. 138, 142,

36 L. Ed. 2d 106, 93 S. Ct. 1241 (1973) (under the APA, “the focal point

for judicial review should be the administrative record already in

existence, not some new record made initially in the reviewing court.”).

Moreover, based upon the papers and exhibits currently before the

Court, discovery would not produce any evidence that could create a

genuine factual dispute, which would be necessary to alter this Court's

rulings.

© In addition to claiming that the OFAC’s actions violate various

constitutional principles, and thus should be vacated pursuant to the

APA, the plaintiff’s complaint lists separately various alleged constitu-

tional violations. Compl. {9 45-78. However, the claims are identical.

Because this Court finds that the OFAC’s actions do not contravene the

Constitution, and thus are not violative of the APA, the constitutional

claims, for the reasons stated herein, must fail as well.

App. 32

(E) unsupported by substantial evidence ... ; or

(F) unwarranted by the facts to the extent that

the facts are subject to trial de novo by the re-

viewing court.

5 U.S.C. § 706(2)(A). The plaintiff claims that the defen-

dants’ actions should be vacated under each of the above

provisions. Pl.’s Opp’n at 18. The Court will address each

in turn.

(1) Are the Defendants’ Actions Arbitrary and

Capricious, Supported by Substantial Evi-

dence, and Warranted by the Facts?

Under the arbitrary and capricious standard, the

Court does not undertake its own fact-finding, rather, the

Court must review the administrative record as assembled

by the agency. Camp v. Pitts, 411 U.S. 138 at 141, 142, 36

L. Ed. 2d 106 (1973). This review is highly deferential to

the agency. See Citizens to Pres. Overton Park, Inc. v.

Volpe, 401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814

(1971); Holy Land Found. for Relief and Dev. v. Ashcroft,

357 U.S. App. D.C. 35, 333 F.3d 156, 162 (D.C. Cir. 2003).

And “there is a presumption in favor of the validity of [the]

administrative action.” Bristol-Myers Squibb Co. v. Sha-

lala, 923 F. Supp. 212, 216 (D.D.C. 1996). If the “agency’s

reasons and policy choices . .. conform to ‘certain minimal

standards of rationality’... the [decision] is reasonable

and must be upheld.” Small Refiner Lead Phase-Down

" Despite claiming that the defendants’ actions were contrary to

established procedures, P].’s Opp’n at 18, the plaintiff presents no such

argument in his papers submitted to the Court. Thus, this claims will

not be addressed.

App. 33

Task Force v. EPA, 227 U.S. App. D.C. 201, 705 F.2d 506,

521 (D.C. Cir. 1983) (citation omitted). Thus, the Court

“must consider whether the decision was based on a

consideration of the relevant factors and whether there

has been a clear error of judgment.” Citizens to Pres.

Qverton Park, 401 U.S. at 416. Moreover, in reviewing

agency decisions regarding foreign relations, the Court is

mindful that “[mJatters related ‘to the conduct of foreign

relations ... are so exclusively entrusted to the political

branches of government as to be largely immune from

judicial inquiry or inference.’” Regan, 468 U.S. at 242

(quoting Harisiades v. Shaughnessy, 342 U.S. 580, 589, 96

L. Ed. 586, 72 S.Ct. 512 (1952)). Thus, “as a general

principal, ... this Court should avoid impairment of

decisions made by the Congress or the President in mat-

ters involving foreign affairs or national security.” Global

Relief Found. v. O’Neill, 207 F. Supp. 2d 779, 788 (N.D. Ill.

2002) (citing Haig v. Agee, 453 U.S. 280, 292, 69 L. Ed. 2d

640, 101 S. Ct. 2766 (1981)).

The plaintiff contends that the administrative record

lacks any evidence demonstrating that the plaintiff has

funded terrorist activities or that the plaintiff knowingly

interacted with a known terrorist or terrorist organization

prior to its designation by the IARA as an SDGT. Pl.’s

Opp’n at 18-19. Moreover, the plaintiff contends that the

District of Columbia Circuit’s decision in Holy Land

Found., 333 F.3d at 156, requires the conclusion that the

OFAC’s decision should be vacated because it lacks sub-

stantial evidence in the record. Pl.’s Opp’n at 20-21. In

particular, the plaintiff relies heavily on their claim that

the LARA and the IARA-USA are completely separate

entities that are in no way related, or controlled by the

other. Jd. at 22-30.

App. 34

This Court recognizes that the plaintiff is at an

inherent disadvantage as it is not able to review and

analyze the administrative record in its entirety, but

rather is limited only to those portions of the administra-

tive record that are not classified. This Court, however,

has before it both the classified and unclassified adminis-

trative record. Although the Court cannot disclose the

evidence which the defendants contend support its deci-

sion to block the assets of the IARA-USA, upon careful

review of the entire record before it, and affording the

defendants the substantial deference they are due under

the APA, this Court must conclude that the agency’s

decision to block the [ARA-USA’s assets was not arbitrary

and capricious, but is in fact supported by substantial

evidence in the record and warranted by the facts con-

tained therein.” In fact, contrary to the plaintiff’s argu-

ment, this Court must conclude that there is substantial

evidence in the record to support the defendants’ conclu-

sion that the IARA-USA is related and connected to

the IARA. Accordingly, the defendants are entitled to

* Because the Court relies heavily on portions of the classified

administrative record, and viewed the administrative record as a whole

in making its decision, the Court’s analysis would be incomplete if it

detailed only those portions of the unclassified administrative record

that supports its decision. Thus, this Court will not delineate the facts

in the unclassified administrative record that supports this ruling, as

doing so would provide an incomplete and fragmented view of this

Court’s reasoning. See, eg., Edmonds v. United States DOJ, 323

F. Supp. 2d 65, 68 n.3 (D.D.C. 2004), aff’d 161 Fed. Appx. 6, 2005 U.S.

App. LEXIS 8116, No. 04-5386 (D.C. Cir. May 6, 2005). Moreover,

because the Circuit Court will have to review this decision de novo if it

is appealed, this Court’s analysis of the administrative record will not

be central to the resolution of any such appeal. See Pharm. Research

and Mfrs. Am. v. Thompson, 360 U.S. App. D.C. 375, 362 F.3d 817, (D.C.

Cir. 2004) (“We review the district court’s grant of summary judgment

de novo pursuant to the [APA]”).

App. 35

summary judgment on this portion of the plaintiff’s APA

claim.

(2) Did the Defendants’ Actions Exceed their

Statutory Authority?

The power vested in the President pursuant to the

IEEPA “may be exercised to deal with 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, if

the President declares a national emergency with respect

to such threat.” 50 U.S.C. § 1701. Based on the authoriza-

tion of this statutory provision, the plaintiff posits that the

defendants’ decision to block the IARA-USA’s assets

violated the APA because the OFAC exceeded its statutory

authority. Pl.’s Opp’n at 43-44. Specifically, the plaintiff

argues that there is no evidence of an “unusual and

extraordinary threat” to the United States to warrant the

blocking of the [ARA-USA’s assets, as there is no evidence

that the plaintiff engaged in or supported terrorist activi-

ties. Id. at 44.

Contrary to the plaintiff’s argument, however, 50

U.S.C. § 1701 does not form the basis for challenging an

individual designation. Rather, this provision sets forth

the requirement that the President declare a national

emergency with respect to such “unusual and extraordi-

nary threats” in order to invoke the provisions of the

IEEPA. Once this finding has been made, then the provi-

sious of the IEEPA can be invoked and the assets blocked

of organizations designated as SDGTs. Thus, any chal-

lenge based on 50 U.S.C. § 1701 must be to the President’s

determination that an “unusual and extraordinary threat”

exists, i.e., the legality of the Executive Order. No such

App. 36

challenge is made here, nor could it successfully be made.

The President specifically found the existence of “grave

acts of terrorism and threats of terrorism committed by

foreign terrorists, ... and the cuntinuing and immediate

threat of further attacks on United States nationals or the

United States [that] constitute an unusual and extraordi-

nary threat to the national security, foreign policy, and

economy of the United States. ...” Exec. Order. 13,224, 66

Fed. Reg. 49,079, at 49,079 (Sept. 23, 2001). Thus, by

finding that an unusual and extraordinary threat exists,

and by declaring a national emergency, the President

employed 50 U.S.C. § 1701 to invoke the provisions of the

IEEPA. And following the September 11, 2001 attacks,

there was clearly a basis for the President’s finding of an

unusual and extraordinary threat, and this finding com-

ports with the requirements of 50 U.S.C. § 1701. Accord-

ingly, the President properly exercised the powers granted

to him under the IEEPA.

Nonetheless, even if this Court could conclude that 50

U.S.C. § 1701 provides a basis to challenge an individual

organization’s designation, the plaintiff’s claim would still

have to be rejected. First, Executive Order 13,224 clearly

designates the procedures for designating organizations as

SDGTs. Exec. Order. 13,224 §§ 5-7, 66 Fed. Reg. 49,079, at

49,081 (Sept. 23, 2001). Moreover, this Court has already

concluded that the defendants had a reasonable basis for

blocking the IARA-USA’s assets. Thus, there was a

sufficient basis for the conclusion that the [IARA-USA’s

actions posed an “unusual and extraordinary” threat to

the United States. Accordingly, there is simply no basis

for the plaintiff’s claim that the OFAC exceeded its

App. 37

statutory authority." Accordingly, this claim must be

dismissed under Rule 12(b)(6), as the plaintiff has failed to

state a claim upon which relief can be granted.

(3) Were the Plaintiffs Constitutional Rights

Violated?

(a) The Plaintiff's Fourth Amendment

Claim

The Fourth Amendment provides:

The right of the people to be secure in their

persons, houses, papers, and effects, against

’* During the preliminary injunction hearing, the plaintiff also

posited that the defendants exceeded their statutory authority by

blocking its assets because the aid provided by the IARA-USA fell

under the humanitarian aid exception of the IEEPA, 50 U.S.C.

§ 1702(b). Defs.’ Mem. at 31. The defendants again argue that the

plaintiff’s position has no merit. In the plaintiff’s opposition, however,

the plaintiff makes no argument to the contrary. Accordingly, this Court

will treat this argument as conceded by the plaintiff. FDIC v. Bender,

326 U.S. App. D.C. 390, 127 F.3d 58, 67-68 (D.C. Cir. 1997); Stephenson

uv. Cox, 223 F. Supp. 2d 119, 121 (D.D.C. 2002). However, even if such a

claim was now being made, it is clear that the humanitarian aid

exception would not apply in this case. First, 50 U.S.C. § 1702(b) does

not, on its face, apply to monetary contributions, but rather is limited to

the donation of “articles such as food, clothing, and medicine.” 50 U.S.C.

§ 1702(b)(2); Holy Land Found. for Relief and Dev. v. Ashcroft., 219

F. Supp. 2d 57, 68 (D.D.C. 2002). Moreover, the humanitarian aid

exception has an exception itself. Specifically, it states that the excep-

tion applies “except to the extent that the President determines that

such donations ... would seriously impair his ability to dea] with any

national emergency declared under section 1701 of this title.... ” 50

U.S.C. § 1702(b). Section 4 of Executive Order 13,224 as originally

enacted, and as amended by Executive Order 13,372, specifically

invokes this exception to the humanitanan aid exception. Exec. Order

13,224 § 4, 66 Fed. Reg. 49,079 (Sept. 23, 2001); see also Exec. Order

13,372 § 1, 70 Fed. Reg. 8499 (Feb. 16, 2005). Accordingly, the humani-

tarian aid exception would not apply even if it was now being advanced

by the plaintiff.

App. 38

unreasonable searches and seizures, shall not

be violated, and no warrants shall issue, but

upon probable cause, supported by oath or affir-

mation, and particularly describing the place to

be searched, and the persons or things to be

seized.

U.S. Const. amend. IV. The plaintiff contends that the

defendants searched its offices and seized its assets

without a warrant or an exception to the warrant re-

quirement in violation of the Fourth Amendment. Compl.

{1 52-57; Pl.’s Opp’n at 36-37. The plaintiff specifically is

challenging “the removal of its property at the time of the

raid.” Pl.’s Opp’n at 35. Moreover, the plaintiff alleges that

the defendants obtained a search warrant under false

pretenses. Jd. It appears that the plaintiff is raising two

distinct Fourth Amendment claims. First, whether the

criminal search warrant that was issued and executed was

valid, and second, whether the OFAC properly blocked the

IARA-USA’s assets.

To the extent that the plaintiff’s Fourth Amendment

claim seeks to challenge the validity of the search warrant,

this aspect of the claim must be dismissed. The search

warrant was issued by the United States District Court for

the Western District of Missouri. Federal Rule of Criminal

Procedure 41(g) states that “[a] person aggrieved by an

unlawful search and seizure of property or by the depriva-

tion of property may move for the property’s return. The

motion must be filed in the district where the property

was seized.” Fed. R. Crim. P. 41(g). Consistent with the

language of the rule, the District of Columbia Circuit has

held such a challenge to the validity of a search warrant

must be brought in the district in which the seizure took

place. See Smith v. Katzenbach, 122 U.S. App. D.C. 113,

App. 39

351 F.2d 810, 814 (D.C. Cir. 1965); see also In re Grand

Jury Proceedings, 115 F.3d 1240, 1245 (5th Cir. 1997).

Accordingly, to the extent that the plaintiff challenges the

validity of the search warrant, this claim must be brought

in the district in which the property was seized — the

Western District of Missouri.” Accordingly, this claim must

fail.

Moreover, to the extent the plaintiff is alleging that

the OFAC’s blocking of its assets violates the Fourth

Amendment, this claim must fail as well. As another

member of this Court noted in Holy Land Found., “[t]he

Government plainly had the authority to issue the block-

ing order pursuant to the IEEPA and the Executive Orders

and the Court has determined that its actions were not

* Rule 41(g) was originally part of Rule 41(e), and that is how the

rule was constructed when the Circuit Court issued its ruling in Smith.

Under that earlier version of the rule, a party could seek the return of

property or suppression of its use as evidence in the district where the

property was seized. See Smith, 351 F.2d at 814. The rule also provided

that the suppression motion could be made in the district where the

trial is to be held. Jd. This rule was amended in 1972, 1989, and 2002,

with one result being part of Rule 41(g) becoming Rule 41(h). See Fed.

R. Crim. P. 41, amend. Under the current version of the Rule, a motion

seeking return of property is only proper in the district where the

property was seized. Fed. R. Crim. P. 41(g). On the other hand, Rule

41(h) provides that a motion to suppress can be brought only in the

district where the trial will occur. Fed. R. Crim. P. 41(h). In this case,

the plaintiff is seeking the return of its property.

The defendants make this argument in their dismissal motion,

but the plaintiff makes no attempt in its opposition to challenge this

argument. Accordingly, it appears that the plaintiff concedes that this

Court is not the proper forum to challenge the legality of the search

warrant. FDIC, 127 F.3d at 67-68. Moreover, count seven of the

plaintiffs complaint, alleging that the search warrant was based upon a

false affidavit, is also a challenge to the sufficiency of the search

warrant and, for the reasons stated above, must also be brought in the

Western District of Missouri.

App. 40

arbitrary and capricious. Further, the case law is clear

that a blocking of this nature does not constitute a sei-

zure.” Holy Land Found. for Relief and Dev. v. Ashcroft.,

219 F. Supp. 2d 57, 78-79 (D.D.C. 2002) (citing Tran Qui

Than v. Regan, 658 F.2d 1296, 1301 (9th Cir. 1981); D.C.

Precision Inc. v. United States, 73 F. Supp. 2d 338, 343 n.

1. (S.D.N.Y. 1999); Can v. United States, 820 F. Supp. 106,

109 (S.D.N.Y. 1993)). Accordingly, this Court agrees that

the OFAC’s blocking of the IARA-USA’s assets does not

create a cognizable claim under the Fourth Amendment.

Thus, the defendants are entitled to dismissal of the

plaintiff’s Fourth Amendment claim.”

(b) The Plaintiff’s Fifth Amendment Due

Process Claim

The Fifth Amendment provides that no person may

“be deprived of life, liberty, or property, without due

process of law.” U.S. Const. amend V. “The fundamental

requirement of [procedural] due process is the opportunity

to be heard ‘at a meaningful time and in a meaningful

manner.’” Mathews v. Eldridge, 424 U.S. 319, 333, 47

L. Ed. 2d 18, 96 S. Ct. 893 (1976) (quoting Armstrong v.

Manzo, 380 U.S. 545, 552, 14 L. Ed. 2d 62, 85 S. Ct. 1187

(1965)). “Procedural due process rules are meant to protect

‘* Much of the plaintiff’s Fourth Amendment argument is prem-

ised on the assumption that the IARA-USA is an organization that is

completely separate from the IARA. Thus, goes the argument, there

was no probable cause that the IARA-USA was engaged in any wrong-

doing. Pl.’s Opp’n at 36-37. As already noted, however, this Court has

concluded that there is substantial evidence in the administrative

record to support the OFAC’s decision to block the LARA-USA’s assets.

Accordingly, because the underlying assumption of the plaintiff’s

argument is without merit, so to is the argument itself.

App. 41

persons not from the deprivation, but from the mistaken

or unjustified deprivation of life, liberty, or property.”

Carey v. Piphus, 435 U.S. 247, 259, 55 L. Ed. 2d 252, 98

S. Ct. 1042 (1978). “Due process is flexible and calls for

such procedural protections as the particular situation

demands.” Morrissey v. Brewer, 408 U.S. 471 at 481, 33

L. Ed. 2d 484, 92 S. Ct. 2593 (1972). In resolving claims of

procedural due process violations, three factors are consid-

ered:

First, the private interest that will be affected by

the official action: second, the risk of an errone-

ous deprivation of such interest through the pro-

cedures used, and the probable value, if any, of

additional or substitute procedural safeguards;

and finally, the Government’s interest, including

the function involved and the fiscal and adminis-

trative burdens that the additional or substitute

procedural requirement would entail.

Mathews, 424 U.S. at 335. Moreover, in applying this test,

the Court is mindful that there are circumstances that

“present|] an ‘extraordinary’ situation in which postpone-

ment of notice and hearing until after seizure does not

deny due process.” Calero-Toledo v. Pearson Yacht Leas-

ing Co., 416 U.S. 663, 679-80, 40 L. Ed. 2d 452, 94 S. Ct.

2080 (1974). As the Court noted in Calero-Toledo, even

immediate seizure of a property interest is appropriate if

(1) “the seizure has been directly necessary to secure an

important governmental or general public interest;” (2)

“there has been a special need for very prompt action;”

and (3) “the State has kept strict control over its monop-

oly of legitimate force: the person initiating the seizure

has been a government official responsible for determin-

ing, under the standards of a narrowly drawn statute,

App. 42

that it was necessary and justified in the particular

instance.” Id. at 679 (citation omitted).

Here, the plaintiff claims its due process rights were

violated because it was not afforded notice and a hearing

before its assets were blocked. Compl. {J 45-47; Pl.’s

Opp’n at 38-39. In support of this argument, the plaintiff

relies heavily on Natl Council of Resistance of Iran (NCRI)

uv. Dep't of State, 346 U.S. App. D.C. 131, 251 F.3d 192, 205

(D.C. Cir. 2001). However, NCRI is inapposite. In NCRI,

the District of Columbia Circuit held that notice and an

opportunity to be heard must be afforded prior to designat-

ing an entity as a “foreign terrorist organization” under

the Anti-Terrorism and Effective Death Penalty Act

(“AEDPA”). NCRI, 251 F.3d at 205-208. However, as

another member of this Court has found, NCRI does not

control in cases where action was taken pursuant to the

IEEPA, as actions under the IEEPA “flow [] from a Presi-

dentially declared national emergency.” Holy Land Found.,

219 F. Supp. 2d at 76. Moreover, the Circuit Court in NCRI

did “not foreclose the possibility that the [government], in

an appropriate case, [could] demonstrate the necessity of

withholding all notice and all opportunity to present

evidence until the designation [was] already made.” NCRI,

251 F.3d at 208. This is just such a case. Thus, this Court

agrees with its colleague in Holy Land Found., that the

applicable test was enunciated in Calero-Toledo.

It cannot be reasonably argued that protecting the

public from terrorist attacks is not an important govern-

mental and public interest. Moreover, here,

prompt action by the Government was neces-

sary to protect against the transfer of assets

subject to the blocking order. Money is fungible,

and any delay or pre-blocking notice would afford

App. 43

a designated entity the opportunity to transfer,

spend, or conceal its assets, thereby making the

IEEPA sanctions program virtually meaningless.

Holy Land Found., 219 F. Supp. 2d at 77. Finally, there is

no dispute that the government, not private parties,

initiated the blocking at issue here. Based on these cir-

cumstances, the Court agrees with the defendants’ posi-

tion that the plaintiff were not entitled to pre-deprivation

notice and a hearing. Accordingly, the plaintiff’s due

process challenge must be dismissed, as it fails to state a

claim as a matter of law.

(c) The Plaintiff’s Fifth Amendment

Equal Protection Claim

The plaintiff also contends that the defendants have

violated the equal protection guarantees embodied in the

Fifth Amendment.’ Compl. 4] 71-78; Pl.’s Opp’n at 31-35.

Specifically, the plaintiff opines that the defendants have

treated the IARA-USA differently than it has treated the

United Nations Children’s Fund (“UNICEF”), which has

assisted, sponsored, and provided support to the IARA

even after the organization was designated as a SDQGT.

Pl.’s Opp’n at 33.

“The Equal Protection Clause of the [Fifth] Amend-

ment commands that no State shall ‘deny to any person

within its jurisdiction the equal protection of the laws,’

which is essentially a direction that all persons similarly

" The equal protection component of the Fifth Amendment is

derived from the Amendment's due process clause. Edmonson uv.

Leesville Concrete Co., Inc., 500 U.S. 614, 616, 114 L. Ed. 2d 660, 111

S. Ct. 2077 (1991).

App. 44

situated should be treated alike.” City of Cleburne v.

Cleburne Living Cir., 473 U.S. 432, 439, 87 L. Ed. 2d 313,

105 S. Ct. 3249 (1985) (quoting Plyler v. Doe, 457 U.S. 202,

216, 72 L. Ed. 2d 786, 102 S.Ct. 2382 (1982)). When

assessing an equal protection challenge, “{t]he general rule

is that legislation is presumed to be valid and will be

sustained if the classification drawn by the statute is

rationally related to a legitimate state interest.” Jd. at 440.

However, “when a statute classifies by race, alienage, or

national origin,” courts must apply a “strict scrutiny”

standard of review. Id. Accordingly, this Court must first

determine what level of review it must employ in this case.

In Massachusetts Board of Retirement v. Murgia, 427

U.S. 307, 49 L. Ed. 2d 520, 96 S.Ct. 2562 (1976), the

Supreme Court made clear that an “equal protection

analysis requires strict scrutiny of a legislative classifica-

tion only when the classification impermissibly interferes

with the exercise of a fundamental right or operates to the

peculiar disadvantage of a suspect class.” Jd. at 312. The

only conceivable suspect class challenge that could be

made here would be religious based,” but there is no basis

for such a claim, and the plaintiff does not argue, that the

IEEPA and the Executive Order intentionally discrimi-

nates on the basis of religion. Pl.’s Opp’n at 34 (acknowl-

edging that the IEEPA is “fair on its face”). Nor does the

IEEPA or the Executive Orders interfere with the exercise

of a fundamental right. Accordingly, any classification

* The plaintiff does not attempt to argue, nor could it, that

terrorists or terrorists organizations are a suspect class that warrant

application of the “strict scrutiny” test. See, e.g., Holy Land Found., for

Relief and Dev. v. Ashcroft, 357 U.S. App. D.C. 35, 333 F.3d 156, 165

(D.C. Cir. 2003) (“there is no constitutional nght to fund terrorism.”).

App. 45

made by the IEEPA or the Executive Orders need only be

rationally related to a legitimate governmental objective in

order to survive a constitutional challenge. See Mathews v.

de Castro, 429 U.S. 181, 185, 50 L. Ed. 2d 389, 97 S. Ct.

431 (1976). Here, the IEEPA and the Executive Order are

clearly rationally related to the government’s objective to

protect the American public from terrorist attacks.

Moreover, the plaintiff has simply failed to even

invoke the Equal Protection guarantees of the Fifth

Amendment. As noted earlier, as a predicate to invoking

the protections of the Equal Protection Clause, the plain-

tiff must demonstrate that it was similarly situated to

other nonprofit organizations who support terrorist activi-

ties and who were treated differently. See Plyler v. Doe,

457 U.S. 202, 72 L. Ed. 2d 786, 102 S. Ct. 2382 (1982);

Cook v. Babbitt, 819 F. Supp. 1, 11 (D.D.C. 1993) (citing

City of Cleburne, 473 U.S. at 439). Here, the plaintiff

contends that its treatment has been different than that of

UNICEF. However, based on the evidence presented to

this Court, there is simply no basis to conclude that

UNICEF has even remotely the same type and number of

ties to the LARA, or any other organization with terrorist

ties, as does the plaintiff. Thus, the underlying premise for

the plaintiff’s equal protection argument fails as UNICEF

and the IARA-USA are simply not similarly situated. As

the Circuit Court stated, “there is no constitutional right

to fund terrorism.” Holy Land Found., 333 F.3d at 165

(citation omitted). And the record evidence supports the

conclusion that the IARA-USA has done exactly that.

Accordingly, the defendants are entitled to summary

judgment on the plaintiff’s equal protection claim.

App. 46

(d) The Plaintiff’s Takings Clause Claim

The second count of the plaintiff’s complaint alleges

that the taking of its property and the blocking of its

assets violate the Takings Clause of the Fifth Amendment.

Compl. 1{ 48-51. Under the Fifth Amendment, no “private

property [shall] be taken for public use, without just

compensation.” U.S. Const. amend V. The defendants

argue, and this Court agrees, that this claim must be

dismissed.” First, it appears that this Court lacks subject

matter jurisdiction over the plaintiff’s Fifth Amendment

claim, as this is a claim properly brought before the

United States Court of Federal Claims pursuant to the

Tucker Act, 28 U.S.C. § 1491. See, eg., 28 U.S.C.

§ 1491(a)(1) (“[t]he United States Court of Federal Claims

shall have jurisdiction to render judgment upon any claim

against the United States founded either upon the Consti-

tution, or any Act of Congress or any regulation of an

executive department.... ”); Dames & Moore v. Regan,

453 U.S. 654, 688-89, 69 L. Ed. 2d 918, 101 S. Ct. 2972

(1981) (noting that the Court of Federal Claims is the

proper forum for claims alleging an unconstitutional

taking). Moreover, to the extent that the plaintiff seeks to

challenge the blocking of assets pursuant to an Executive

Order, such an order is not, as a matter of law, a takings

within the meaning of the Fifth Amendment. Holy Land

Found., 219 F. Supp. 2d at 78 (citing multiple cases for the

proposition that the blocking of assets does not “as a

* The plaintiff has failed to advance any argument in opposition to

the defendants’ position regarding this claim. Accordingly, they have

conceded the issue and this claim could be dismissed without further

discussion. FDIC, 127 F.3d at 67-68.

App. 47

matter of law, constitute takings within the meaning of

the Fifth Amendment.”).”

(e) The Plaintiff's First Amendment Free-

dom of Speech Claim

The fourth count of the plaintiff’s complaint alleges

that the defendants, by prohibiting the plaintiff from

making humanitarian contributions, has violated the free

speech guarantees of the First Amendment. Compl. J] 58-

63. Under the First Amendment, “Congress shall make no

law ... abridging the freedom of speech.” U.S. Const.

amend I. In analyzing claims under the First Amendment,

the Supreme Court has provided multiple analytical

frameworks depending on the type of speech at issue. For

example, if the speech is aimed at interfering with the

expressive component of conduct, the Court must apply

the strict scrutiny standard of review. See, e.g. Texas v.

Johnson, 491 U.S. 397, 406, 105 L. Ed. 2d 342, 109 S. Ct.

2533 (1989) (applying strict scrutiny to law prohibiting

only the burning of flags which offended witnesses of the

events). However, the Court analyzes a claim under

intermediate scrutiny when the “regulation ... serves

purposes unrelated to the content of expression.” Ward v.

Rock Against Racism, 491 U.S. 781, 791, 105 L. Ed. 2d

661, 109 S.Ct. 2746 (1989); see also United States v.

O’Brien, 391 U.S. 367, 376, 20 L. Ed. 2d 672, 88 S. Ct.

1673 (1968) (applying intermediate scrutiny to regulation

* In addition, as this Court has already noted, if this claim seeks

the return of the plaintiff’s property seized pursuant to the search

warrant, such a claim must be brought in the Western District of

Missouri.

App. 48

prohibiting the burning of a draft card).” Here, the plain-

tiff premises its claim on the Supreme Court’s decisions in

Buckley v. Valeo, 424 U.S. 1, 46 L. Ed. 2d 659, 96 S. Ct. 612

(1976) and Nixon v. Shrink Missouri Gov't PAC, 528 U.S.

377, 145 L. Ed. 2d 886, 120 S. Ct. 897 (2000), and opines

that this Court should employ the strict scrutiny analysis.

Specifically, the plaintiff posits that these cases stand for

the proposition that the contribution of money is clearly

the type of speech activity that warrants protection under

the First Amendment. Pl.’s Opp’n at 39-40. Thus, because

the Executive Order and the IEEPA prohibit the plaintiff

from making financial contributions for humanitarian aid,

the plaintiff contends that they violated the First Amend-

ment. Pl.’s Opp’n at 39-40.

The defendants do not argue, nor could they, that

donation of money is not a form of speech protected by the

First Amendment. See, e.g., Buckley, 424 U.S. at 16;

Village of Schaumburg v. Citizens for a Better Env't, 444

U.S. 620, 636-37, 63 L. Ed. 2d 73, 100 S. Ct. 826 (1980).

Rather, they posit that the Court should employ an inter-

mediate scrutiny standard of review, Defs.’ Mem. at 53-54,

and this Court agrees. Contrary to the plaintiff’s conten-

tion, Buckley and its progeny simply do not set forth the

proper framework for the analysis the Court must conduct

* The principal standards under which First Amendment claims

are reviewed are strict scrutiny and intermediate scrutiny. Am. Soc. of

Ass’n Executives v. United States, 23 F. Supp. 2d 64, 68 (D.D.C. 1998).

However, the Supreme Court has employed “other standards for

analyzing the restriction of speech depending on the particulars of the

speech or the type of regulation at issue. In analyzing statutes involv-

ing taxation or the allocation of public funds the Supreme Court has

applied a standard even more deferential than intermediate scrutiny.”

Id.

App. 49

in this case. In Buckley, the Supreme Court was presented

with a statute that placed restrictions on political contri-

butions. Buckley, 424 U.S. at 1. Noting that “the First

Amendment affords the broadest protection to such politi-

cal expression,” the Court applied the strict scrutiny

standard in analyzing whether the restrictions passed

constitutional scrutiny. Jd. at 14. Here, however, there is

no allegation that the IARA-USA uses its funds to make

political contributions, rather, the IARA-USA uses its

funds for charitable and humanitarian aid. As Judge

Kessler noted in Holy Land Found., “such charitable

contributions plainly do not involve political expression,

and therefore do not warrant strict scrutiny under Buck-

ley.” Holy Land Found., 219 F.Supp. 2d at 82 n. 37.

Rather, First Amendment freedom of speech challenges to

blocking decisions are analyzed under the intermediate

scrutiny standard discussed in United States v. O’Brien,

391 U.S. 367, 376-77, 20 L. Ed. 2d 672, 88 S. Ct. 1673

(1968). See Holy Land Found., 219 F. Supp. 2d at 81; see

also Humanitarian Law Project v. Reno, 205 F.3d 1130,

1135-36 (9th Cir. 2000); Global Relief Found., Inc. v.

O’Neill, 207 F. Supp. 2d 779, 806 (N.D. Tl. 2002).

Under O’Brien, the government’s restriction passes

intermediate scrutiny if (1) “it is within the constitutional

power of the Government;” (2) “it furthers an important

governmental interest;” (3) “the governmental interest is

unrelated to the suppression of free expression;” and (4)

“the incidental restriction on alleged First Amendment

freedoms is no greater than is essential to the furtherance

of that interest.” 391 U.S. at 377. Here, the IEEPA and the

Executive Order clearly survive constitutional scrutiny

under this standard and the plaintiff makes absolutely no

attempt to argue otherwise. First, the President clearly

App. 50

had the power to issue Executive Order 13,224, and the

OFAC had the authority to block the plaintiff’s assets. See

Regan, 468 U.S. at 244; Teague v. Regional Comm’r of

Customs, 404 F.2d 441 at 445 (2d Cir. 1968). Second,

Executive Order 13,224 and the OFAC’s actions clearly

further an important governmental interest — preventing

terrorist attacks. Third, the government’s interest is

completely unrelated to the suppression of free expression,

rather, its interest is to prohibit the funding of terrorist

activities. As noted in Holy Land Found., “money is

_fungible, and the Government has no other, narrower,

means of ensuring that even charitable contributions to a

terrorist organization are actually used for legitimate

purposes.” Holy Land Found., 219 F. Supp. 2d at 82 (citing

Humanitarian Law Project, 205 F.3d at 1136). Moreover,

nothing in the IEEPA or the Executive Order prohibits the

IARA-USA from expressing its views. Finally, the inciden-

tal restriction on the First Amendment is no greater than

necessary. Accordingly, this Court must conclude that the

restrictions created by the Executive Order and the

OFAC’s actions are “narrowly enough tailored to only

further its interest in stopping the flow” of funds to terror-

ist activities. Id.

(f) The Plaintiff's First Amendment Free-

dom of Association Claim

The plaintiff also claims, relying on NAACP uv. Clai-

borne Hardware Co., 458 U.S. 886, 73 L. Ed. 2d 1215, 102

S. Ct. 3409 (1982), that because Executive Order 13,224

and the actions of the OFAC’s completely prohibit the

plaintiff from making any contributions, which is a type of

associational activity, the Executive Order and the block-

ing order violate its right of association as protected by the

App. 51

First Amendment. Pl.’s Opp’n at 41-43. Specifically, the

plaintiff contends that the government simply cannot meet

its “burden of establishing knowing affiliation with an

organization possessing unlawful aims and goals, and a

specific intent to further those illegal aims,” which is

necessary to withstand constitutional scrutiny. Pl.’s Opp’n

at 41-42 (quoting Healy v. James, 408 U.S. 169, 186, 33

L. Ed. 2d 266, 92 S. Ct. 2338 (1972)). The argument raised

here is virtually identical to the argument raised and

rejected by the Court in Holy Land Found., and this Court

sees no reason to depart from the very clear and persua-

sive logic in that case.

In Claiborne Hardware Co., the Supreme Court

reversed the judgment against the NAACP and members

of that organization who had participated in a seven-year

boycott of white merchants. The Supreme Court found

that liability had been unconstitutionally imposed “by

reason of association alone.” Claiborne Hardware Co., 458

U.S. at 920. As the District Court in Holy Land Found.

noted, “this is simply not a case like Claiborne Hardware,

because OFAC’s action was not taken against [the LARA-

USA] for ‘reason of association alone.’” Holy Land Found..,

219 F. Supp. 2d at 80 (citation omitted). Rather, here, as in

Holy Land Found.,

the IEEPA, the two Executive Orders, and the

blocking order do not prohibit membership in

[the LARA-USA] or endorsement of its views, and

therefore does not implicate [the [ARA-USA’s]}

association rights. Instead, they prohibit [[ARA-

USA] from providing financial support to [the

IARA], “and there is no constitutional right to

facilitate terrorist.”

App. 52

Holy Land Found., 219 F. Supp. 2d at 81 (quoting Hu-

manitarian Law Project, 205 F.3d at 1133). Thus, Clai-

borne Hardware Co. does not control this case and the

defendants’ actions, which do not prohibit association, are

not unconstitutional.

Moreover, because the defendants have not acted

based on guilt by association, the specific intent require-

ment discussed in Claiborne Hardware Co. is not appli-

cable here. Nonetheless, “imposing a ‘specific intent’

requirement on the Government’s authority to issue

blocking orders would substantially undermine the pur-

pose of the economic sanctions programs. Regardless of [its

own] intent, [the IARA-USA] cannot effectively control

whether support given to [the IARA] is used to promote

that organizations’s unlawful activities.” Holy Land

Found., 219 F. Supp. 2d at 81 (citing Humanitarian Law

Project, 205 F.3d at 1133). Accordingly, the defendants are

entitled to dismissal of this claim, as the plaintiff has

failed to state a claim upon which relief can be granted.

(g) The Plaintiffs First Amendment Free-

dom of Religion Claim

The fifth count of the plaintiff’s complaint alleges a

violation of its First Amendment right of free exercise of

religion. Compl. {| 64-70. Specifically, the plaintiff claims

that the “LARA-USA and its Muslim donors and employees

support and participate in the LARA-USA’s work because

it fulfills their religious obligations as Muslims to engage

in Zakat (humanitarian charitable giving).” Jd. J 65. Thus,

argues the plaintiff, by blocking its assets, the government

has substantially burdened its and its donors exercise of

religion. Id. 66. The defendants posit, however, that this

claim must fail under the ruling in Farrakhan v. Reagan,

App. 53

669 F. Supp. 506, 512, aff’d 271 U.S. App. D.C. 273, 851

F.2d 1500 (1988), and also because the IARA-USA cannot

invoke the religious rights of its employees or past donors,

nor does it have standing itself to state a valid free exer-

cise claim. Defs.’ Mem. at 58-59. The plaintiff makes no

attempt to counter the defendants’ argument, and this

Court therefore must conclude that the plaintiff concedes

that this claim has no merit and must be dismissed. FDIC,

127 F.3d at 67-68. In any event, the Court notes that the

IARA-USA lacks standing to even make such a claim. As

the Supreme Court has recognized, “since ‘it is necessary

in a free exercise cause for one to show the coercive effect

of the enactment as it operates against him in the practice

of his religion,’ the claim asserted here is one that ordinar-

ily requires individual participation.” Harris v. McRae, 448

U.S. 297, 321, 65 L. Ed. 2d 784, 100 S. Ct. 2671 (1980)

(citation omitted). Thus, the Harris Court held that an

organization did not have standing to raise a free exercise

claim, but rather, it must be brought by an individual. /d.

Here, since the only named plaintiff is the IARA-USA, an

organization, the IARA-USA simply has no standing to

assert this challenge. See Harris, 448 U.S. at 321; Holy

Land Found., 219 F. Supp. 2d at 83-84.

(h) The Plaintiff's 42 U.S.C. § 1985(3) Claim

Although not specifically challenged by the defendants

in their dismissal motion, the plaintiff’s § 1985 claim

must fail as well. This claim is predicated on the defen-

dants’ alleged constitutional violations. Compl. 7] 92-101.

Since this Court has already concluded that the plaintiff’s

constitutional challenges can not survive the defendants’

motions, the legal predicate underlying this claim is

lacking and it too cannot survive.

App. 54

(C) Conclusion

Based on the foregoing analysis, the Court concludes

that the plaintiff is unable to maintain any of the claims it

has raised under the APA, the Constitution, and 42 U.S.C.

§ 1985. Accordingly, the Court must grant either the

defendants’ motion to dismiss or their motion for summary

judgment.

III. Defendant Schlup’s Dismissal Motion

In addition to the other defendants’ motion for dis-

missal of the claims against them in their official capaci-

ties, which the Court has granted, defendant Schlup also

seeks dismissal of the claims brought against him in his

individual capacity. The plaintiff alleges that Schlup

violated its First, Fourth, and Fifth Amendment rights, by

submitting a false affidavit to obtain a search warrant,

and violated 42 U.S.C. § 1985(3). Pl.’s Opp’n to Schlup

Mot. at 1. The claims are premised upon the invocation of

the ruling enunciated in Bivens, 403 U.S. at 388.” Compl.

{1 47, 51, 57, 63, 70, 78, 85. Schlup posits that he should

* In Bivens, the Supreme Court acknowledged the right of citizens

to file claims for damages against federal law enforcement offic als who

violate their constitutional rights. Bivens, 403 U.S. at 389. There,

petitioner Bivens alleged he had been subjected to an unlawful search

and seizure by federal agents in violation of the Fourth Amendment. Jd.

In reversing the District Court and the Second Circuit’s affirmance of

the dismissal of Biven’s complaint on the ground that he had failed to

state a cause of action, the Supreme Court held that “damages may be

obtained for injuries consequent upon a violation of the Fourth

Amendment by federal officials.... ” Jd. at 395; see also Corr. Servs.

Corp. v. Malesko, 534 U.S. 61, 66, 151 L. Ed. 2d 456, 122 S. Ct. 515

(2001) (“In Bivens ... we recognized for the first time an implied

private action for damages against federal officers alleged to have

violated a citizen’s constitutional rights.”).

App. 55

be dismissed as a defendant in this case because this

Court lacks personal jurisdiction over him.” Schlup’s

Mem. at 3. The plaintiff contends, however, that this Court

has personal jurisdiction over Schlup under two distinct

theories. First, the plaintiff opines that Schlup has “trans-

acted business” within the meaning of the District of

Columbia’s long-arm statute, D.C. Code § 13-423. Pl.’s

Opp’n to Schlup’s Mot. at 4. And second, the plaintiff

posits that this Court has personal jurisdiction over

Schlup because he is a member of a civil conspiracy with

members subject to personal jurisdiction in this Court.

Pl.’s Opp’n to Schlup’s Mot. at 6. Neither argument,

however, provides a sufficient basis for this Court to

exercise personal jurisdiction over Schlup.“

* In addition, defendant Schlup opines that he is entitled to

dismissal] of the claims raised against him because (1) this Court is not

the proper venue for the plaintiff to assert its claims; (2) he was not

properly served with the summons and complaint; (3) the plaintiff

cannot state a cognizable Fourth Amendment claim against him

because it cannot assert Fourth Amendment protections on behalf of its

employees or donors; and (4) he is entitled to qualified immunity.

Because this Court concludes that it lacks personal jurisdiction over

defendant Schlup, it need not address these alternative positions.

* Throughout the IARA-USA’s opposition, it opines that discovery

will provide further support for its contention that this Court has

personal jurisdiction over defendant Schlup. Pl.’s Opp’n to Schlup’s

Mot. at 4-5. Motions for discovery concerning personal jurisdiction are

liberally granted whenever a party has “a good faith belief that such

discovery will enable it to show that the court has personal jurisdiction

over the defendant.” Caribbean Broad. Sys. Ltd. v. Cable & Wireless

PLC, 331 U.S. App. D.C. 226, 148 F.3d 1080, 1090 (D.C. Cir. 1998).

Moreover, “l[a] plaintiff faced with a motion to dismiss for lack of

personal jurisdiction is entitled to reasonable discovery, lest the

defendant defeat the jurisdiction of a federal court by withholding

information on its contacts with the forum.” El-Fadi v. Cent. Bank of

Jordan, 316 U.S. App. D.C. 86, 75 F.3d 668, 676 (D.C. Cir. 1996). But

the plaintiff here is not entitled to discovery. First, the LARA-USA

(Continued on following page)

App. 56

(A) The District of Columbia Long-Arm Statute

“Because Bivens suits are suits against government

officials in their individual, rather than their official,

capacities, personal jurisdiction over the individual defen-

dants is necessary to maintain a Bivens claim.” Robertson

uv. Merola, 895 F. Supp. 1, 3 (D.D.C. 1995) (citing Delgado

v. Bureau of Prisons, 727 F.Supp. 24 (D.D.C. 1989);

Lawrence v. Acree, 79 F.R.D. 669, 670 (D.D.C. 1978)). Ona

motion to dismiss for lack of personal jurisdiction, the

plaintiff bears the burden of establishing personal juris-

diction over each defendant. Crane v. New York Zoological

Soc., 282 U.S. App. D.C. 295, 894 F.2d 454, 456 (D.C. Cir.

1990) (explaining that the plaintiff bears the burden of

establishing a factual basis for a court’s exercise of per-

sonal jurisdiction over a defendant). In order to satisfy this

burden, the plaintiff cannot rely on conclusory allegations;

rather, it must allege specific facts on which personal

jurisdiction is based. First Chicago Int v. United Ex-

change Co., 267 U.S. App. D.C. 27, 836 F2d 1375, 1378

(D.C. Cir. 1988) (noting that conclusory allegations regard-

ing a defendant’s business practices are insufficient to

establish personal jurisdiction). Moreover, a court need not

treat the plaintiff’s allegations as true; rather, the court

may consider and weigh affidavits and other relevant

merely mentions that discovery would further support its arguments,

however, it has not filed a motion seeking such discovery, or repre-

sented what information discovery would disclose which would eluci-

date any of the issues, including the jurisdictional issue. Moreover,

even if this Court could conclude that such a request has been made, in

the absence of any proffer concerning “alleged ... facts remotely

suggesting that [Schlup] had any connection to the District of Colum-

bia[,]” the Court concludes that jurisdictional discovery would not shed

light on whether it can exercise personal jurisdiction over defendant

Schlup. Caribbean Broad. Sys., 148 F.3d at 1090.

App. 57

matter in making the jurisdictional determination. /d.

Nonetheless, “[iJn determining whether such a basis

exists, factual discrepancies appearing in the record must

be resolved in favor of the plaintiff.” Crane, 894 F.2d at

456 (D.C. Cir. 1990).

Under District of Columbia law, personal jurisdiction

can be satisfied either by demonstrating that the court has

general jurisdiction pursuant to D.C. Code § 13-422, or

that the court has personal jurisdiction pursuant to the

District of Columbia long-arm statute, D.C. Code § 13-423.

It is clear, and the plaintiff does not contend otherwise,

that the Court does not have general jurisdiction over

defendant Schlup, as he is not domiciled in the District of

Columbia nor does he maintain his principal place of

business here. See D.C. Code § 13-422. Rather, Schlup is a

resident of Missouri and works in Missouri. Schlup’s Mot.,

Declaration of Paul R. Schlup (“Schlup Dec.”) J 2. Thus,

the question for this Court to rescive is whether it can

exercise personal jurisdiction over Schlup pursuant to the

District of Columbia’s long-arm statute.

The plaintiff contends that it has satisfied the re-

quirements of showing that this Court can exercise per-

sonal jurisdiction over Schlup pursuant to D.C. Code § 13-

423(a)(1). Pl.’s Opp’n to Schlup’s Mot. at 2. This provisions

provides: “(a) A District of Columbia court may exercise

personal jurisdiction over a person, who acts directly or by

an agent, as to a claim for relief arising from the person’s —

(1) transacting business in the District of Columbia.” D.C.

Code § 13-423. D.C. § 13-423{a)(1) is “‘co-extensive with

the Constitution’s due process limit.’” Dickson v. United

States, 831 F. Supp. 893, 897 (D.D.C. 1993) (quoting First

Chicago Int'l v. United Exch. Co., Ltd., 267 U.S. App. D.C.

27, 836 F.2d 1375, 13877 (D.C. Cir. 1988)); see also Envtl.

App. 58

Research Int'l, Inc. v. Lockwood Greene Engineers, Inc.,

355 A.2d 808 (D.C. 1976) (stating that Congress intended

the District of Columbia’s long-arm statute to be co-

extensive with due process.). As a result of this congru-

ence, courts in this jurisdiction have consistently held that

“the only nexus required by ... [§ 13-423](a)(1) ... be-

tween the District of Columbia and the nonresident

defendant is ‘some affirmative act by which the defendant

brings itself within the jurisdiction and establishes mini-

mum contacts.’”” Berwyn Fuel, Inc. v. Hogan, 399 A.2d 79,

80 (D.C. 1979) (quoting Cohane v. Arpeja-California, Inc.

385 A.2d 153, 158 (D.C. 1978)). Therefore, the plaintiff

must demonstrate that exercising jurisdiction over the

defendants would not “offend the traditional notions of fair

play and substantial justice.” International Shoe Co. v.

Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154

(1945); see also Hasenfus v. Corporate Air Services, 700

F. Supp. 58, 61 (D.D.C. 1988) (quoting Intl Shoe, 326 U.S.

at 316) (internal quotation marks omitted). “Under the

‘minimum contacts’ standard, courts must insure that

‘the defendant’s conduct and connection with the forum

State are such that he should reasonably anticipate being

haled into court [here].’” GTE New Media Services Inc. v.

* D.C. Code § 13-423(b) acts as a limitation on § 13-423(a) and

“bars ... claims unrelated to the acts forming the basis for personal

jurisdiction.” See Dickson, 831 F. Supp. at 897 n.5; Pollack v. Meese, 737

F. Supp. 663, 666 (D.D.C. 1990) (citing Willis v. Willis, 211 U.S. App.

D.C. 103, 655 F.2d 1333, 1336 (D.C. Cir. 1981)). The limitation in § 13-

423(b) is “meant to prevent ‘the assertion of claims in the forum state

that do not bear some relationship to the acts in the forum state relied

upon to confer jurisdiction.’” Cohane, 385 A.2d at 158 (quoting Malinow

v. Eberly, 322 F. Supp. 594, 599 (D. Md. 1971)). Therefore, if a claim is

related to the defendants’ acts in the District of Columbia, the require-

ment of § 13-423(b) is satisfied. Dickson, 831 F. Supp. at 897.

App. 59

BellSouth Corp., 339 U.S. App. D.C. 332, 199 F.3d 1343,

1847 (D.C. Cir. 2000) (quoting World-Wide Volkswagen

Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100

S. Ct. 559 (1980)).”

Here, the plaintiff opines that because Schlup is a

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