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Chichakli v. Trump

United States District Court, District of Columbia

March 16, 2017

RICHARD A. CHICHAKLI, Plaintiff,
v.
DONALD J. TRUMP, et al., Defendants.[1]

          MEMORANDUM OPINION

          COLLEEN KOLLAR KOTELLY United States District Court Judge

         This matter is before the Court on the Official Capacity Defendants' Motion to Dismiss [ECF No. 18]. For the reasons discussed below, the motion will be granted.

         I. BACKGROUND

         Plaintiff is a United States citizen, Compl. ¶¶ 1, 13, who has been

tried [in the United States District Court for the Southern District of New York] and convicted by a jury on . . . nine counts of an indictment charging as follows: one count of conspiracy to engage in business practices prohibited by the International Emergency Economic Powers Act . . ., in violation of 50 U.S.C. § 1705 and 18 U.S.C. § 371; one count conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; and six counts of wire fraud, in violation of 18 U.S.C. §§ 1343, 2.

United States v. Bout, 651 F. App'x 62, 63 (2d Cir.), cert. denied sub nom. Chichakli v. United States, 137 S.Ct. 412 (2016).[2] He is serving a sentence of 60 months' imprisonment on each count, with all sentences running concurrently. See Judgment in a Criminal Case, United States v. Chichakli, No. S3 09-CR-1002-02 (S.D.N.Y. Dec. 8, 2014) at 3.

         A. Liberian Sanctions Program

         The International Emergency Economic Powers Act (“IEEPA”), see 50 U.S.C. §§ 1701-07, “authorizes the President to declare a national emergency when an extraordinary threat to the United States arises that originates in substantial part in a foreign state.” Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156, 159 (D.C. Cir. 2003); see 50 U.S.C. § 1701(a) (authorizing declaration of 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”). Such a declaration “clothes the President with extensive authority set out in 50 U.S.C. § 1702.” Holy Land Found. for Relief & Devel., 333 F.3d at 159. For example, the President may:

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) (emphasis added).

         In accordance with IEEPA and the United Nations Participation Act, see 22 U.S.C. § 287c, among other statutory provisions, former President George W. Bush issued an Executive Order titled Blocking Property of Certain Persons and Prohibiting the Importation of Certain Goods from Liberia:

I, GEORGE W. BUSH, President of the United States of America, note that the actions and policies of former Liberian President Charles Taylor and other persons, in particular their unlawful depletion of Liberian resources and their removal from Liberia and secreting of Liberian funds and property, have undermined Liberia's transition to democracy and the orderly development of its political, administrative, and economic institutions and resources. I further note that the Comprehensive Peace Agreement Dated: August 18, 2003, and the related ceasefire have not yet been universally implemented throughout Liberia, and that the illicit trade in round logs and timber products is linked to the proliferation of and trafficking in illegal arms, which perpetuate the Liberian conflict and fuel and exacerbate other conflicts throughout West Africa. I find that the actions, policies, and circumstances described above constitute an unusual and extraordinary threat to the foreign policy of the United States and hereby declare a national emergency to deal with that threat.

Exec. Order No. 13348 (“E.O. 13348” or “Order”), 69 Fed. Reg. 44885 (July 22, 2004).

         Pursuant to E.O. 13348, “all property and interests in property [of persons identified in the Order] that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in[.]” E.O. 13348 § 1(a) (emphasis added). The Order also blocked property found “to be owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any person whose property and interests in property [were] blocked pursuant to this [O]rder[.]” E.O. 13348 § 1(a)(ii)(D).

         Further, E.O. 13348 delegated to the Secretary of the Treasury the authority to promulgate regulations to carry out its purposes. E.O. 13348 § 6. This authority, in turn, was delegated to the Office of Foreign Assets Control (“OFAC”), Compl. ¶ 15, which promulgated regulations in 2007, see Former Liberian Regime of Charles Taylor Sanctions Regulations, 72 Fed. Reg. 28, 855 (May 23, 2007); 31 C.F.R. Part 593. The regulations set forth procedures by which a person subject to a Blocking Notice applies to OFAC for a license permitting a transaction which otherwise would have violated the terms of the Order. See 31 C.F.R. §§ 501.801-501.803, 593.501.

         The Annex to E.O. 13348 listed 28 persons, such as “the . . . former president of Liberia, his immediate family, Cabinet members, and . . . other foreign [persons] who allegedly supported [Charles Taylor's] regime, ” Compl. ¶ 27, whose property and interests in property were blocked. Among those foreign persons was Viktor Anatolijevitch Bout, whom plaintiff describes as “a Russian national who allegedly sold arms to Liberia in 2000[.]” Id.; see E.O. 13348, Annex ¶ 2. In April 2005, OFAC designated plaintiff a Specially Designated National (“SDN”) under E.O. 13348 when, “[a]fter an investigation, OFAC determined that [plaintiff] was acting on behalf of Bout.” Chichakli v. Szubin, 546 F.3d 315, 316 (5th Cir. 2008).[3] Although OFAC did not claim that plaintiff “is or was ever directly involved in Liberia with the [r]egime of Charles Taylor, ” Compl. ¶ 63, it nevertheless “issued a Blocking Notice subjecting [plaintiff] to the sanctions set out in the Executive Order, ” Chichakli, 546 F.3d at 316; see Compl. ¶¶ 29, 63. OFAC published plaintiff's name and identifying information about him on its SDN List. See 75 Fed. Reg. 38212 (July 1, 2010) (most recent Federal Register publication of the then-current SDN List). It denied plaintiff's request for reconsideration of the Blocking Notice. See Chichakli, 546 F.3d at 316.

         “While [Executive Order] 13348 was in effect, [plaintiff's] assets within the jurisdiction of the United States were blocked and he could conduct no business with U.S. persons or financial institutions except as authorized by license.” Mem. of P. & A. in Support of Official Capacity Defs.' Mot. to Dismiss (“Defs.' Mem.”) at 4. According to defendants, “OFAC has granted more than fifteen of [plaintiff's] license requests, ” which allowed him access to blocked funds in order that plaintiff could conduct “transactions related to [his] maintenance, specifically the ability to purchase food, clothing and other items.” Defs.' Mem. at 5.

         On November 12, 2015, former President Barack H. Obama issued Executive Order 13710 which terminated the national emergency with respect to Liberia. See Termination of Emergency with Respect to the Actions and Policies of Former Liberian President Charles Taylor, Exec. Order 13710, 80 Fed. Reg. 71, 679 (Nov. 12, 2015). Subsequently, OFAC removed plaintiff from the SDN List and published a notice listing “the entries which [were] being removed from the SDN List in order to effectuate the removal.” Defs.' Mem. at 7.[4]Accordingly, defendants have represented, plaintiff “is no longer a Blocked Person [and no longer is] subject [to] the allegedly improper Liberia regulations, ” and therefore “no longer requires a license from OFAC to conduct transactions.” Reply Mem. of P. & A. in Support of Official Capacity Defs.' Mot. to Dismiss (“Reply”) at 4-5. OFAC has provided instructions to plaintiff for the retrieval of his unblocked property. See generally id., Ex. 1 (Letter to plaintiff from Jeremy R. Sausser, Acting Assistant Director, Enforcement, OFAC, dated April 18, 2016) (exhibit number designated by the Court). Further, OFAC informed plaintiff that “[a]pplicable regulations do not provide for . . . inventories and accountings to be created, maintained, or provided.” Id., Ex. 1 at 2.

         B. Civil Action No. 3:06-cv-1546-N

         In 2006, plaintiff, by counsel, filed a civil action in the United States District Court for the Northern District of Texas challenging the actions of OFAC, its former Director Adam Szubin, and the former Secretaries of State and Treasury under E.O. 13348 and the IEEPA. See Complaint, Chichakli v. Szubin, No. 3:06CV1546 (N.D. Tex. filed Aug. 25, 2006) (“Texas Complaint”) ¶¶ 1, 7-9. He alleged that federal officials “raided” his home, his office, and an employee's home on April 26, 2005. Id. ¶ 14. “A search warrant was presented” for plaintiff's homes in Richardson, Texas and for his office; a second home in Plano, Texas “was entered and searched without a warrant.” Id. Plaintiff alleged that “property was seized by the FBI from all three locations.” Id. OFAC agents left plaintiff with a copy of Special Designation and Blocking Memorandum stating

[T]here was reason to believe that [plaintiff, other individuals and 30 corporate entities] (a) are owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, a person whose property and interests in property are blocked pursuant to [E.O. 13348], namely Viktor Bout; and/or (b) have materially assisted, sponsored, provided financial, material, or technological support for, or goods or services in support of, the unlawful depletion of Liberian resources, the removal of Liberian resources from that country, and the secreting of Liberian funds and property by any person whose property and interests in property are blocked pursuant to [E.O. 13348], ...

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