660 F.3d 1019 (9th Cir. 2011), 10-35032, Al Haramain Islamic Foundation, Inc. v. United States Dept. of Treasury

Docket Nº:10-35032.
Citation:660 F.3d 1019
Opinion Judge:GRABER, Circuit Judge:
Party Name:AL HARAMAIN ISLAMIC FOUNDATION, INC., aka Al-Haramain Islamic Foundation, Inc.; and Multicultural Association of Southern Oregon, Plaintiffs-Appellants, v. UNITED STATES DEPARTMENT OF the TREASURY; Timothy Geithner; Office of Foreign Assets Control; Adam J. Szubin; United States Department of Justice; and Eric H. Holder Jr., Attorney General, Defen
Attorney:David D. Cole and Amanda Shanor, Georgetown University Law Center, Washington, DC, Lynne Bernabei and Alan Kabat, Bernabei & Wachtel, PLLC, Washington, DC, Thomas H. Nelson, Thomas H. Nelson & Associates, Welches, OR, and J. Ashlee Albies, Creighton & Rose, P.C., Portland, OR, for the plaintiffs-...
Judge Panel:Before: D.W. NELSON, SIDNEY R. THOMAS, and SUSAN P. GRABER, Circuit Judges.
Case Date:September 23, 2011
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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660 F.3d 1019 (9th Cir. 2011)

AL HARAMAIN ISLAMIC FOUNDATION, INC., aka Al-Haramain Islamic Foundation, Inc.; and Multicultural Association of Southern Oregon, Plaintiffs-Appellants,

v.

UNITED STATES DEPARTMENT OF the TREASURY; Timothy Geithner; Office of Foreign Assets Control; Adam J. Szubin; United States Department of Justice; and Eric H. Holder Jr., Attorney General, Defendants-Appellees.

No. 10-35032.

United States Court of Appeals, Ninth Circuit.

September 23, 2011

Argued and Submitted March 9, 2011.

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David D. Cole and Amanda Shanor, Georgetown University Law Center, Washington, DC, Lynne Bernabei and Alan Kabat, Bernabei & Wachtel, PLLC, Washington, DC, Thomas H. Nelson, Thomas H. Nelson & Associates, Welches, OR, and J. Ashlee Albies, Creighton & Rose, P.C., Portland, OR, for the plaintiffs-appellants.

Douglas N. Letter and Michael P. Abate, Civil Division, United States Department of Justice, Washington, D.C., for the defendants-appellees.

Appeal from the United States District Court for the District of Oregon, Garr M. King, Senior District Judge, Presiding. D.C. No. 3:07-cv-01155-KI.

Before: D.W. NELSON, SIDNEY R. THOMAS, and SUSAN P. GRABER, Circuit Judges.

OPINION

GRABER, Circuit Judge:

Plaintiff Al Haramain Islamic Foundation, Oregon (" AHIF-Oregon" ), is a non-profit organization, incorporated in Oregon, whose stated purpose is to promote greater understanding of Islam. The United States government suspected AHIF-Oregon of supporting terrorism. In 2004, the Office of Foreign Assets Control (" OFAC" ), a part of the United States Department of the Treasury, froze AHIF-Oregon's assets and designated AHIF-Oregon as a " specially designated global terrorist" pursuant to Executive Order (" EO" ) No. 13,224. President George W. Bush had issued EO 13,224 pursuant to the International Emergency Economic Powers Act (" IEEPA" ), 50 U.S.C. §§ 1701-1706, in the wake of the events of September 11, 2001.

AHIF-Oregon eventually filed this action, asserting that OFAC has violated a variety of its statutory and constitutional rights. Plaintiff Multicultural Association of Southern Oregon, which the government has not accused of supporting terrorism, challenges certain laws that bar it from providing services to designated entities such as AHIF-Oregon. With the exception of one claim not at issue on appeal, the district court granted summary judgment to OFAC.

On appeal, we affirm in part, reverse in part, and remand. We affirm the district court's ruling that substantial evidence supports OFAC's redesignation of AHIF-Oregon as a specially designated global terrorist, and we affirm the district court's rejection of AHIF-Oregon's due process claims. We reverse the district court's rejection of AHIF-Oregon's Fourth Amendment claim and remand for the district court to determine what judicial relief, if any, is available. Finally, we reverse the district court's dismissal of Plaintiffs' First Amendment claim.

FACTUAL AND PROCEDURAL HISTORY

AHIF-Oregon incorporated as a non-profit public benefit corporation under Oregon law in 1999. AHIF-Oregon describes

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itself as " an Oregon non-profit charitable organization that seeks to promote greater understanding of the Islamic religion through operating prayer houses, distributing religious publications, and engaging in other charitable activities." It maintains headquarters in Ashland, Oregon, where it formerly owned and operated a prayer house. Its primary activities appear to have taken place in Oregon, though it also was a partial owner of a prayer house in Springfield, Missouri, and conducted some activities there and abroad.

AHIF-Oregon is not the only organization with the name " Al Haramain Islamic Foundation." At the time of its incorporation, organizations with that name existed in dozens of other countries. One of the largest, if not the largest, was AHIF-Saudi Arabia, which had an annual budget of between $30 million and $80 million. Like AHIF-Oregon, AHIF-Saudi Arabia described itself as a charitable organization. AHIF-Saudi Arabia dissolved in June 2004.

The two organizations, AHIF-Oregon and AHIF-Saudi Arabia, shared some leaders in common. In particular, Saudi nationals Aqeel Al-Aqil and Soliman Al-Buthe 1 both held leadership roles in the two organizations. Al-Aqil founded AHIF-Saudi Arabia and reportedly led that organization during much of its existence. He also founded AHIF-Oregon, along with Al-Buthe and two other persons, and served as president of that organization until he resigned in March 2003. Al-Buthe was a senior official of AHIF-Saudi Arabia, where he was primarily responsible for its internet and charitable works in the United States. Al-Buthe resigned from AHIF-Saudi Arabia in September 2002. Like Al-Aqil, Al-Buthe was a founding member of the board of directors of AHIF-Oregon. Unlike Al-Aqil, Al-Buthe has not resigned from AHIF-Oregon; Al-Buthe maintains a position on the board to this day.

Shortly after the events of September 11, 2001, President Bush exercised his authority under the IEEPA by issuing EO 13,224. 66 Fed.Reg. 49,079 (Sept. 23, 2001). Under the IEEPA, the President may, in specified ways, " 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(a). Relevant here, the President may

(B) 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[.]

Id. § 1702(a)(1)(B). A person who violates the IEEPA is subject to civil penalties and, for willful violations, criminal penalties, including a fine up to $1 million and imprisonment for up to 20 years. Id. § 1705.2

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In the Executive Order, the President declared that the " September 11, 2001, acts ... constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States." EO 13,224 pmbl. The Order " blocked" " all property and interests in property" of 27 persons designated by the Order, and it delegated to the specified agency head the authority to designate other persons with substantial connections to terrorist activities and organizations. Id. § 1. Specifically, Section 1 of the Order states that

all property and interests in property of the following persons that are in the United States or that hereafter come within the United States, or that hereafter come within the possession or control of United States persons are blocked:

(a) foreign persons listed in the Annex to this order;

(b) foreign persons determined by the Secretary of State, in consultation with the Secretary of the Treasury and the Attorney General, to have committed, or to pose a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States;

(c) persons determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General, to be owned or controlled by, or to act for or on behalf of those persons listed in the Annex to this order or those persons determined to be subject to subsection 1(b), 1(c), or 1(d)(i) of this order;

(d) except as provided in section 5 of this order and after such consultation, if any, with foreign authorities as the Secretary of State, in consultation with the Secretary of the Treasury and the Attorney General, deems appropriate in the exercise of [her] discretion, persons determined by the Secretary of the Treasury, in consultation with the Secretary of State and the Attorney General;

(i) to assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of, such acts of terrorism or those persons listed in the Annex to this order or determined to be subject to this order; or

(ii) to be otherwise associated with those persons listed in the Annex to this order or those persons determined to be subject to subsection 1(b), 1(c), or 1(d)(i) of this order.

The 27 persons and entities specifically listed in the Annex did not include Al-Aqil, Al-Buthe, or any AHIF organization.3 Id. at annex.

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In the years following the issuance of EO 13,224, OFAC periodically designated new persons and entities.4 Relevant here, by February 1, 2004, OFAC had designated AHIF organizations in six countries: Somalia, Bosnia, Indonesia, Kenya, Tanzania, and Pakistan. But OFAC had not designated AHIF-Oregon, AHIF-Saudi Arabia, or any AHIF organization other than those six in the countries just listed.

On February 18, 2004, federal and state officials executed a search warrant at AHIF-Oregon's Ashland office. The search warrant concerned investigations into possible criminal violations of tax, banking, and money-laundering laws. Agents found, among other things, photographs and other documents related to violence in Chechnya.

The next day, February 19, 2004, OFAC issued a press release stating that it had blocked AHIF-Oregon's assets pending...

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