Olenga v. Gacki

• Decision Date: 30 November 2020
• Docket Number: Civil Action No. 19-1135 (RDM)
• Citation: 507 F.Supp.3d 260
• Parties: Francois OLENGA, Plaintiff, v. Andrea M. GACKI et al., Defendants.
• Court: U.S. District Court — District of Columbia

507 F.Supp.3d 260

Francois OLENGA, Plaintiff,

v.Andrea M. GACKI et al., Defendants.

Civil Action No. 19-1135 (RDM)

United States District Court, District of Columbia.

Signed November 30, 2020

Erich C. Ferrari, Ferrari & Associates, P.C., Washington, DC, for Plaintiff.

Stuart Justin Robinson, U.S. Department of Justice, San Francisco, CA, for Defendants.

MEMORANDUM OPINION

RANDOLPH D. MOSS, United States District Judge

In 2017, the Office of Foreign Assets Control ("OFAC") added Plaintiff François Olenga, a military official in the Democratic Republic of the Congo ("DRC"), to its list of Specially Designated Nationals and Blocked Persons ("SDN" and "SDN List"), pursuant to the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. § 1701 et seq. This designation froze Olenga's assets subject to U.S. jurisdiction and forbade U.S. individuals or entities from doing business with him. OFAC designated Olenga on the ground that he directed activities of the Republican Guard, a special security force that former DRC President Joseph Kabila allegedly used to stifle political opposition and undermine democracy. On July 14, 2018, Congolese state media announced that Olenga had retired from the army and had become the Military Mission Manager for President Kabila—a position that, according to Olenga, does not include authority to direct any military activities. In part based on that change in circumstances, Olenga requested reconsideration of his designation and, while the administrative process was ongoing, filed this lawsuit. OFAC granted Olenga's request for delisting but simultaneously re-designated him on the ground that he had both previously undermined and continues to undermine democracy in the DRC, irrespective of his retirement. OFAC, in short, gave with one hand, while it took with the other.

Olenga now asks the Court to overturn his re-designation. He argues that OFAC's decision violates both the due process clause of the Fifth Amendment and the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. Olenga contends that his re-designation was procedurally flawed, because the notice he received of the decision was heavily redacted, and substantively flawed, because OFAC acted illogically in granting his request for delisting but then re-designating him based on the same conduct underlying his initial designation. Pending before the Court are OFAC's motion to dismiss or in the alternative for summary judgment, Dkt. 13, and Olenga's cross-motion for summary judgment, Dkt. 15.

For the following reasons, the Court will DENY Olenga's motion for summary judgment, GRANT OFAC's motion to dismiss as to Count III, and GRANT OFAC's motion for summary judgment as to Counts I, II, and IV.

I. BACKGROUND

A. Statutory and Regulatory Background

From the earliest days of our nation's history, its leaders "have viewed economic sanctions as ‘the most likely means of obtaining our objects without war.’ " Rakhimov v. Gacki , No. 19-cv-2554, 2020 WL 1911561, at *1 (D.D.C. Apr. 20, 2020) (quoting James Madison, "Political Observations," National Archives (Apr. 20, 1795) (subsequent procedural history omitted)). In 1917, six months after the United States entered World War I, Congress enacted the Trading with the Enemy Act ("TWEA"), 50 U.S.C. app. § 1 et seq. , which gave the President broad authority to impose economic sanctions, including comprehensive embargoes, in response to both peacetime emergencies and times of war. See Regan v. Wald , 468 U.S. 222, 225–26, 104 S.Ct. 3026, 82 L.Ed.2d 171 (1984). Then in 1977, Congress altered the legal framework governing economic sanctions through IEEPA. The new law "limit[ed] the President's power to act pursuant to [TWEA] solely to times of war," but also permitted the President to declare and respond to national emergencies in times of peace. Id. at 227–28, 104 S.Ct. 3026.

The peacetime powers granted to the President under IEEPA are "essentially the same" as the wartime powers under TWEA, "but the conditions and procedures for their exercise are different." Id. at 228, 104 S.Ct. 3026. Under IEEPA, the President may "declare[ ] a national emergency" in response to "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. Once such an emergency is declared,

the President may, under such regulations as he may prescribe ... 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). These provisions of IEEPA "delegate[ ] broad authority to the President to act in times of national emergency with respect to property of a foreign country." Dames & Moore v. Regan , 453 U.S. 654, 677, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981).

In October 2006, pursuant to IEEPA, President Bush issued Executive Order No. 13,413, titled " Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo." Exec. Order No. 13,413, 71 Fed. Reg. 64,105 (2006) (" E.O. 13,413"). The President "determine[d] that the situation in or in relation to the Democratic Republic of the Congo, which has been marked by widespread violence and atrocities that continue to threaten regional stability[,] ... constitutes an unusual and extraordinary threat to the foreign policy of the United States." He therefore "declare[d] a national emergency to deal with that threat." Id . In July 2014, President Obama amended E.O. 13,413 through Executive Order No. 13,671, titled " Taking Additional Steps to Address the National Emergency with Respect to the Conflict in the Democratic Republic of the Congo." Exec. Order No. 13,671, 79 Fed. Reg. 39,947 (2014) (" E.O. 13,671"). The President imposed sanctions on the specific people listed in the Annex to the Order as well as on anyone else who met the specified criteria. Id. As relevant here, E.O. 13,671 amended E.O. 13,413 to cover any person whom the Secretary of the Treasury, in consultation with the Secretary of State, determines "to be responsible for or complicit in, or to have engaged in, directly or indirectly" either "actions or policies that threaten the peace, security, or stability of the Democratic Republic of the Congo" or "actions or policies that undermine democratic processes or institutions in the Democratic Republic of the Congo." Id. § 1(a)(ii)(C)(1) & (2). The executive order also sanctioned any person determined "to be a leader of (i) an entity, including any armed group, that has, or whose members have, engaged in any of the activities described [in the foregoing subsections] or (ii) an entity whose property and interests in property are blocked pursuant to this order." Id. § 1(a)(ii)(E). And the executive order further authorized the Secretary of the Treasury, in consultation with the Secretary of State, to "take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA ... as may be necessary to carry out the purposes of this order." Id. § 4.

Pursuant to a redelegation of authority from the Secretary of the Treasury, see 31 C.F.R. § 547.802, OFAC has promulgated regulations to implement these executive orders, see generally 31 C.F.R. pt. 547. An individual or entity designated by OFAC under E.O. 13,413, as amended by E.O. 13,671, is placed on the SDN List with the program code "[DRCONGO]." See Note 1 to 31 C.F.R. § 547.201(a). The regulations prohibit U.S. people or entities from engaging in transactions with SDNs. 31 C.F.R. § 547.201. A blocked person may "seek administrative reconsideration" of his designation or may "assert that the circumstances resulting in the designation no longer apply." Id. § 501.807; see also id. § 547.101 (incorporating OFAC's generally applicable administrative reconsideration procedures into the regulations specifically applicable to the DRC). As part of the reconsideration process, the blocked person "may submit arguments or evidence that the person believes establishes that insufficient basis exists for the designation." Id. § 501.807(a). The designated person "also may propose remedial steps on the person's part, such as corporate reorganization, resignation of persons from positions in a blocked entity, or similar steps, which the person believes would negate the basis for designation." Id. And the blocked person may request a meeting with OFAC to discuss his designation, although such meetings are not required. Id. § 501.807(c). OFAC reviews the submitted materials and "may request clarifying, corroborating, or other additional information." Id. § 501.807(b). At the conclusion of its review of the request for reconsideration, OFAC "will provide a written decision to the blocked person." Id. § 501.807(d). As the D.C. Circuit has observed, a "designated person can request delisting as many times as he likes." Zevallos v. Obama , 793 F.3d 106, 110 (D.C. Cir. 2015).

B. Factual and Procedural Background

On June 1, 2017, OFAC designated Olenga as an SDN, along with the Safari Beach, a resort that Olenga owned or controlled. 82 Fed. Reg. 26239, 26,239–40 (June 6, 2017). The Office determined that Olenga met the criteria for designation as a "leader of an entity that has, or whose members have, engaged in actions or policies undermining democratic processes or institutions in the DRC." Dkt. 13-1 at 14 (citing E.O. 13,671 § 1(a)(ii)(C)(2) & (E) ). Specifically, according to a press release that accompanied Olenga's...