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Al Haramain Islamic Foundation, Inc. v. U.S. Department of the Treasury

United States Court of Appeals for the Ninth Circuit · Constitutional Law

Constitutional LawDue ProcessFourth AmendmentFirst AmendmentAdministrative LawNational SecurityOFACIEEPA

Facts

AHIF-Oregon is an Oregon nonprofit that OFAC suspected of supporting terrorism. In 2004 OFAC froze its assets without prior notice or a warrant, later designated it under Executive Order 13,224, and in 2008 redesignated it based on ownership or control by Al-Buthe and its role as a branch office of the larger AHIF network that supported designated persons. During the designation process OFAC used classified information and gave AHIF-Oregon only limited and delayed notice of its reasons. MCASO, another Oregon nonprofit, alleged that the designation regime barred it from engaging in coordinated advocacy with AHIF-Oregon, such as joint press activity and public education efforts.

Issue

Whether substantial evidence supported OFAC's redesignation of AHIF-Oregon under the APA, whether OFAC's procedures violated AHIF-Oregon's Fifth and Fourth Amendment rights, and whether the prohibition on MCASO's coordinated advocacy with AHIF-Oregon violated the First Amendment. The court also had to determine whether any due process violation warranted relief.

Rule

Under the APA, OFAC's designation decision stands unless arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, and its factual findings are reviewed for substantial evidence. For a domestic entity, procedural due process under Mathews requires reasonable measures to reduce error, including timely and adequate notice of the reasons for investigation and, where feasible, mitigation of the unfairness created by undisclosed classified information; however, relief requires prejudice. OFAC's initial designation order freezing a domestic entity's assets is a Fourth Amendment seizure that requires a warrant. Content-based restrictions on coordinated advocacy are subject to strict scrutiny, and on the facts here the prohibition on MCASO's coordinated speech with AHIF-Oregon was not sufficiently justified.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Crescent Learning Center, a nonprofit incorporated in Oregon, had its domestic bank accounts frozen by a Treasury sanctions office pending investigation. For eight months, the agency sent scattered document requests but never told the organization why it was under investigation; only later did a press release mention one suspected basis while omitting two others eventually used in a final redesignation.

If the nonprofit challenges the procedures under the Fifth Amendment, which is the best answer?

Explanation. The majority held that, although pre-deprivation notice need not be given because of asset-flight concerns, due process still required timely and adequate notice after the freeze. A target may not be left to guess at the factual and legal bases for the action. A delayed press release identifying only one of several reasons is constitutionally insufficient because it does not allow a meaningful opportunity to respond. (Derived from Al Haramain Islamic Foundation, Inc. v. U.S. Department of the Treasury (n.d.).)