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Islamic American Relief Agency v. Unidentified FBI Agents

September 15, 2005


The opinion of the court was delivered by: Reggie B. Walton United States District Judge


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 Constitution, the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. § 1701 et seq. (2000), and the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. (2003). Complaint ("Compl.") ¶ 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*fn2 and (2) Defendant Paul Schlup's Motion to Dismiss.*fn3 For the reasons set forth below, the Court grants both motions.*fn4

I. Background

(A) Factual Background

The Islamic African Relief Agency, now the Islamic American Relief Agency ("IARAUSA"), based in Columbia, Missouri, was established in 1985 as a nonprofit humanitarian relief organization under section 501(c)(3) of the United States Internal Revenue Code. Complaint ("Compl.") ¶ 8; Pl.'s Opp'n at 6. Specifically, the IARA-USA has "provided charitable and humanitarian aid to refugees, 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").*fn5 Pl.'s Opp'n at 6. The plaintiff posits that the two organizations are completely separate entities and are in no way related. Compl. ¶¶ 12, 28. In 2000, the IARA-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 plaintiff changed its name to the Islamic American Relief Agency ("IARA-USA"). Id.

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 IARA, including the IARA-USA, as a Specially Designated Global Terrorist ("SDGT"), and blocked the assets of the IARA, along with the assets of five of its senior officials.*fn6 Compl. ¶¶ 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 "assist[s] in, sponsor[s], or provide[s] 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 IARA-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. ¶¶ 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, Attorney General of the United States,*fn7 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. ¶¶ 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 Amendments to the United States Constitution, Civil Liability for False Affidavit, and violations of 42 U.S.C. § 1985(3). Compl. ¶¶ 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 (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 transactions during wars or national emergencies." S. Rep. No. 95-466 at 2. The IEEPA limited the TWEA's application 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 (1984). Under the IEEPA, the President can declare a national emergency "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." 50 U.S.C. § 1701(a). The IEEPA authorizes the President to

investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States . . . .

50 U.S.C. § 1702(a)(1)(B).*fn8 However, the IEEPA specifically prohibits the President from regulating or prohibiting 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, terrorist 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. Id. § 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 ("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. Id. § 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 therefore determine that for these measures to be effective in addressing the national emergency declared in this order, there need be no prior notice 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] . . . prohibit[s] such donations . . . ." Id. § 4, 66 Fed. Reg. at 49,080.

(3) Executive Order 13,372

On February 16, 2005, President Bush issued Executive Order 13,372. This Executive Order amended Executive 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:

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 hostilities 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 recordkeeping and procedural regulations applicable to their various sanctions programs. See, e.g., 50 C.F.R. pt. 500. These regulations permit a designated or blocked individual 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. Id. § 501.806- 807. Specifically, an applicant seeking administrative reconsideration is permitted to submit materials to contest the designation, and the OFAC may request additional materials from the applicant in assessing the request for reconsideration. Id.

II. The Defendants' Summary Judgment and Dismissal 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 (1957); Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004) (citing Kowal v. MCI Communications Corp., 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. St. Francis, 117 F.3d at 624-25. 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 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, 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 issue[s] for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (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. Hazward v. Runyon, 14 F. Supp. 2d 120, 122 (D.D.C. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (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. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).*fn9

(B) Legal Analysis

The plaintiff's principal claim in this action is that the OFAC's designation of the IARAUSA as an SDGT and the blocking of its assets, amount to violations of the APA, namely, 5 U.S.C. ยง 706(2). Pl.'s Opp'n at 18. Under this provision of the APA, this ...

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