Humanitarian Law Project v. U.S. Dept. of Treasury

• Decision Date: 20 April 2007
• Docket Number: No. CV 05 8047 ABC RMCX.,CV 05 8047 ABC RMCX.
• Citation: 484 F.Supp.2d 1099
• Parties: HUMANITARIAN LAW PROJECT, et al. Plaintiffs, v. UNITED STATES DEPARTMENT OF TREASURY, et al. Defendants.
• Court: U.S. District Court — Central District of California

484 F.Supp.2d 1099

HUMANITARIAN LAW PROJECT, et al. Plaintiffs, v. UNITED STATES DEPARTMENT OF TREASURY, et al. Defendants.

No. CV 05 8047 ABC RMCX.

United States District Court, C.D. California.

April 20, 2007.

COPYRIGHT MATERIAL OMITTED

Carol A Sobel, Carol A Sobel Law Offices, Santa Monica, CA, David Cole, Center For Constitutional Rights, Georgetown University Law Ctr, Washington, DC, Paul L. Hoffman, Schonbrun DeSimone Seplow Harris and Ho, Venice, CA, Shayana Devendra Kadidal, Visuvanathan Rudrakumaran, Visuvanathan Rudrakumaran Law Offices, New York, NY, Humanitarian Law Project Ralph D. Fertig Hankai Thamil Sangam Nagalingam Jeyalingam World Tamil Coordinating Committee Tamil Welfare

& Human Rights Committee, for Plaintiff.

John Russell Tyler, U.S. Department of Justice, Civil Division, Washington, DC, United States Department of the Treasury, John Snow, Alberto Gonzales, United States Department of Justice, Condoleeza Rice, United States Department of State, for Defendants.

ORDER RE: DEFENDANTS' MOTION FOR RECONSIDERATION

COLLINS, District Judge.

Pending before the Court is Defendants' Motion for Reconsideration in Part of the Court's Order and Judgment ("Motion"), filed on January 30, 2007. Plaintiffs filed an Opposition on February 23, 2007, to which Defendants replied on March 9, 2007. On March 27, 2007, the Court found the Motion appropriate for determination without oral argument, and took the matter under submission. See Fed.R.Civ.P. 78; Local Rule 7-15. After consideration of the materials submitted by the parties and the case file, the Court hereby GRANTS Defendants' Motion.

FACTUAL AND PROCEDURAL BACKGROUND

On November 21, 2006, the Court issued an Order ("Order") granting in part and denying in part Plaintiffs' Motion for Summary Judgment and Defendants' Motion to Dismiss and Cross-Motion for Summary Judgment. See Humanitarian Law Project v. U.S. Dept. of Treasury, 463 F.Supp.2d 1049 (C.D.Cal.2006).¹ On January 18, 2007, the Court issued a Judgment (entered on January 24, 2007) and a minute order informing the parties of its view that the November 21, 2006 Order resolved all issues in the case, and that the judgment should be made final. However, the Court also allowed any party that disagreed with this view to submit, by January 30, 2007, a brief setting forth any such objection, and identifying any outstanding issues prior to the Court's closing the case.

On January 30, 2007, Defendants filed the instant Motion, seeking reconsideration of two aspects of the Court's Order. First, Defendants contend that the Court should reconsider its decision that the "otherwise associated with" provision of Executive Order 13224 ("EO"), section 1(d)(ii), is unconstitutionally vague on its face and overbroad. Defendants state that on January 26, 2007, in response to the Order, the Office of Foreign Assets Control ("OFAC")² issued a new regulation (31 C.F.R. § 594.316) defining "otherwise associated with." Defendants contend that this new regulation cures the unconstitutionality of EO § 1(d)(ii). Thus, Defendants ask the Court to assess the new regulation, find EO § 1(d)(ii) constitutional, and vacate its Order and injunction against enforcing EO § 1(d)(ii) against Plaintiffs.

Second, Defendants seek reconsideration of the Court's decision that the President's designation of twenty-seven individuals and groups as SDGTs in the Annex to the EO was unconstitutional. Defendants contend that the Court did not consider governing law, and thus arrived at an incorrect decision. Plaintiffs oppose each of Defendants' arguments.

DISCUSSION

Defendants bring their motion for reconsideration pursuant to Federal Rule of Civil Procedure 59(e), which states "Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." Local Rule 7-18 provides that a motion for reconsideration may only be made on the grounds of "(a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision."

A. The "Otherwise Associated With" Provision

Defendants seek reconsideration of the Court's finding that the "otherwise associated with" provision is unconstitutional on the ground that a change of law occurred after the Order was issued, and that this change of law remedied the constitutional infirmities identified in the Order. Before disputing Defendants' arguments on their merits, Plaintiffs urge the Court to decline to consider the new regulation on a number of grounds, including that the motion is untimely, that Defendants have not demonstrated how their request meets the requirements for reconsideration, and that Defendants' motion amounts to a request to find the Order moot on the unsound ground that Defendants voluntarily changed their illegal conduct.

1. Whether Reconsideration is Appropriate

First, Plaintiffs contend that Defendants' Motion is untimely because it was filed more than 10 days after the Order was entered, in violation of Federal Rule of Civil Procedure 59(e). Rule 59(e) states, "Any motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." However, although the Order was entered on November 27, 2006, judgment was not entered until January 24, 2007, and Defendants filed their Motion on January 30, 2007. In addition, the Court's January 18, 2007, minute order allowed the parties until January 30, 2007, to object to the judgment. Accordingly, Defendants' motion is timely.

Second, the new regulation is a change of law under Local Rule 7-18(b), which Defendants correctly invoke in their motion. Plaintiffs contend, however, that the change of law is equivalent to any defendants' voluntary cessation of illegal conduct, and that ordinarily, such a voluntary cessation does not render moot a case challenging that defendants' conduct. See Friends of the Earth v. Laidlaw, 528 U.S. 167, 189, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (quoting City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 71 L.Ed.2d 152 (1982)) ("It is well settled that `a defendant's voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice.'"); see also City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 71 L.Ed.2d 152 (1983) ("In this case the city's repeal of the objectionable language would not preclude it from reenacting precisely the same provision if the District Court's judgment were vacated.") However, the question before the Court is not whether the Order is moot or whether the new law strips the Court of jurisdiction. Indeed, the reasoning in the Order as issued remains valid as to EO § 1(d)(ii) as it existed at the time the Order was issued. Rather, the question before the Court is whether the law has changed, and, if so, whether the new law passes constitutional muster, thus justifying lifting the injunction. That the law that the Court is reviewing is a regulation, and that the Defendants happen to be the party that issued the regulation, does not negate the Court's discretion to reconsider an Order where doing so is otherwise appropriate. See Navajo Nation v. Confederated Tribes and Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th Cir.2003) (stating, "Whether or not to grant reconsideration is committed to the sound discretion of the [district] court.") (citations omitted).

For example, in Freedom to Travel Campaign v. Newcomb, 82 F.3d 1431 (9th Cir.1996), the Ninth Circuit upheld the District Court's opinion that the term "educational activities" as used in OFAC regulations was not void for vagueness even though the term was undefined. Freedom to Travel, 82 F.3d at 1440. The Court also noted, albeit in dicta, that while the appeal was pending, OFAC had issued new regulations defining "educational activities." The Court then considered the newly-issued definition on its merits, and found that "[t]he Treasury Department's recent amendment to the Regulations further cures any vagueness defects." Id. at 1441. Similarly, Defendants here issued a new regulation that bears on the matters addressed in the Order, and filed a timely motion for reconsideration. Assessing the new regulation on its merits now is therefore appropriate. Doing so now will also obviate having to do so on remand, should the parties appeal the Order, and would thereby serve judicial economy. See, e.g., Coral Const. Co. v. King County, 941 F.2d 910, 928 (9th Cir.1991) (where defendant County modified the ordinance under appellate review, the Ninth Circuit remanded the question to the District Court, stating, "it would be premature to consider the present version of the ordinance ... [w]e leave the question of the amended program's constitutionality-and the corresponding question of the continued necessity for injunctive or declaratory relief-to the district court for determination on remand.")

In addition, as stated above, the motion does not seek reconsideration on the ground that the intervening change in law renders Plaintiffs' challenge moot. Rather, Defendants contend that the change in law addresses the constitutional infirmities of EO § 1(d)(ii) as it stood previously. Thus, although Defendants ask the Court to vacate its Order and injunction, that is not the remedy the Court would provide if it grants Defendants' motion. Instead, the Court would issue a new order analyzing the new provision, and, if appropriate, lift the injunction. Accordingly, the Court's determination that EO § 1(d)(ii) as it existed when the Order was issued was unconstitutional would...