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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
ASKAN HOLDINGS, Plaintiff, v. U.S. DEPARTMENT OF THE TREASURY, OFFICE OF FOREIGN ASSETS CONTROL; STEVEN MNUCHIN, in his official capacity as Secretary of the U.S. Department of the Treasury; and ANDREA GACKI, in her official capacity as Director of the U.S. Department of the Treasury, Office of Foreign Assets Control; Defendants.
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Civil Action No. 1:20-cv-1458 (RJL)
DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR INJUNCTIVE RELIEF OR IN THE ALTERNATIVE FOR MANDAMUS
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 1 of 36
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TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 BACKGROUND ............................................................................................................................ 2 I. STATUTORY AND REGULATORY BACKGROUND .................................................. 2 A. Historical Overview .............................................................................................. 2 B. Extension of the President’s authorities under IEEPA .......................................... 3 C. Executive Order 13224 and the GTSR .................................................................. 4 D. OFAC’s licensing authority ................................................................................... 5 II. FACTUAL BACKGROUND ............................................................................................. 6 III. AGENCY ACTION CHALLENGED IN THIS CASE ...................................................... 8 STANDARD OF REVIEW ............................................................................................................ 9 ARGUMENT ................................................................................................................................ 11 I. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO
PREVAIL ON THE MERITS OF ITS CLAIMS ............................................................. 11
A. Plaintiff is not likely to succeed on the merits of its due process claim because it is not automatically entitled to the information that it seeks ................................... 11
B. Plaintiff’s § 706(1) claim is moot because OFAC has acted on its license
application ................................................................................................................... 17
C. Plaintiff’s premature claim that OFAC’s denial of its license application was arbitrary and capricious is not a basis for preliminary relief ...................................... 18
II. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO BE
IRREPARABLY HARMED ABSENT A PRELIMINARY INJUNCTION ................... 21 III. THE BALANCE OF THE EQUITIES WEIGHS HEAVILY AGAINST
ISSUING INJUNCTIVE RELIEF .................................................................................... 25 CONCLUSION ............................................................................................................................. 28
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TABLE OF AUTHORITIES CASES Aamer v. Obama,
742 F.3d 1023 (D.C. Cir. 2014) ................................................................................................ 10 Air Cargo v. U.S. Postal Serv.,
674 F.3d 852 (D.C. Cir. 2012) .................................................................................................. 27 Al Haramain Islamic Found., Inc. v. U.S. Dep’t of Treasury,
686 F.3d 965 (9th Cir. 2012) ............................................................................................. passim Am. Ass’n of Political Consultants v. United States Small Bus. Admin.,
No. CV 20-970, 2020 WL 1935525 (D.D.C. Apr. 21, 2020) ............................................. 22, 23 Archdiocese v. Wash. Metro Area Transit Auth.,
897 F.3d 314 (D.C. Cir. 2018) .................................................................................................. 10 Arriva Med. LLC v. United States Dep't of Health & Human Servs.,
239 F. Supp. 3d 266 (D.D.C. 2017) .......................................................................................... 23 Balt. Gas & Elec. Co. v. NRDC,
462 U.S. 87 (1983) .................................................................................................................... 18 Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) .................................................................................................................. 20 BHM Healthcare Sols., Inc. v. URAC, Inc.,
320 F. Supp. 3d 1 (D.D.C. 2018) .............................................................................................. 10 Chaplaincy of Full Gospel Churches v. England,
454 F.3d 290 (D.C. Cir. 2006) .................................................................................................. 21 Clarke v. United States,
915 F.2d 699 (D.C. Cir. 1990) .................................................................................................. 17 Cobell v. Norton,
391 F.3d 251 (D.C. Cir. 2004) .................................................................................................... 9 Comm. in Solidarity with People of El Sal. (CISPES) v. Sessions,
929 F.2d 742 (D.C. Cir. 1991) .................................................................................................. 22 Conservation Force, Inc. v. Jewell,
733 F.3d 1200 (D.C. Cir. 2013) ................................................................................................ 18
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 3 of 36
iii
Cornish v. Dudas, 540 F. Supp. 2d 61 (D.D.C. 2008) ............................................................................................ 22
Ctr. for Biological Diversity v. Kempthorne,
498 F. Supp. 2d 293 (D.D.C. 2007) .......................................................................................... 18 Dallas Safari Club v. Bernhardt,
--- F. Supp. 3d --, 2020 WL 1809181 (D.D.C. Apr. 9, 2020) ............................................. 21, 25 Dames & Moore v. Regan,
453 U.S. 654 (1981) .............................................................................................................. 2, 26 Dorfmann v. Boozer,
414 F.2d 1168 (D.C. Cir. 1969) ................................................................................................ 10 Elk Assocs. Funding Corp. v. U.S. Small Bus. Admin.,
858 F. Supp. 2d 1 (D.D.C. 2012) .............................................................................................. 20 English v. Trump,
279 F. Supp. 3d 307 (D.D.C. 2018) .......................................................................................... 11 F.T.C. v. Standard Oil Co.,
449 U.S. 232 (1980) .................................................................................................................. 24 FBME Bank Ltd. v. Lew,
125 F. Supp. 3d 109 (D.D.C. 2015) .......................................................................................... 15 FBME Bank Ltd. v. Lew,
209 F. Supp. 3d 299 (D.D.C. 2016) .......................................................................................... 12 Feng Wang v. Pompeo,
354 F. Supp. 3d 13 (D.D.C. 2018) ............................................................................................ 11 Fla. EB5 Investments, LLC v. Wolf,
No. CV 19-3573 (RJL), 2020 WL 1079181 (D.D.C. Mar. 6, 2020) .................................... 9, 22 Florida Power & Light Co. v. Lorion,
470 U.S. 729 (1985) .................................................................................................................. 27 Foretich v. United States,
351 F.3d 1198 (D.C. Cir. 2003) ................................................................................................ 17 Fund for Animals v. Frizzell,
530 F.2d 982 (D.C. Cir. 1975) .................................................................................................. 25
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 4 of 36
iv
Gilbert v. Homar, 520 U.S. 924 (1997) .................................................................................................................. 13
Greater New Orleans Fair Hous. Action Ctr. v. HUD,
639 F.3d 1078 (D.C. Cir. 2011) ................................................................................................ 10 Guttenberg v. Emery,
26 F. Supp. 3d 88 (D.D.C. 2014) .............................................................................................. 22 Holy Land Found. for Relief & Dev. v. Ashcroft,
219 F. Supp. 2d 57 (D.D.C. 2002), aff’d, 333 F.3d 156 (D.C. Cir. 2003) ........................................................................................ 26
Honig v. Doe,
484 U.S. 305 (1988) .................................................................................................................. 17 Int’l Fabricare Inst. v. EPA,
972 F.2d 384 (D.C. Cir. 1992) .................................................................................................. 20 Islamic Am. Relief Agency. v. Gonzales,
477 F.3d 728 (D.C. Cir. 2007) .................................................................................................. 27 Jifry v. FAA,
370 F.3d 1174 (D.C. Cir. 2004) .......................................................................................... 12, 15 John Doe Co. v. Consumer Fin’l Protection Bur.,
849 F.3d 1129 (D.C. Cir. 2017) .......................................................................................... 21, 22 KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner,
647 F.2d 857 (N.D. Ohio 2009) ................................................................................................ 14 KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner,
647 F. Supp. 2d 857 (N.D. Ohio 2009) ......................................................................... 16, 17, 26 Live365, Inc. v. Copyright Royalty Bd.,
698 F.Supp.2d 25 (D.D.C. 2010) .............................................................................................. 24 Marsh v. Ore. Nat. Res. Council,
490 U.S. 360 (1989) ............................................................................................................ 18, 20 Mathews v. Eldridge,
424 U.S. 319 (1976) .................................................................................................................. 13 Mdewakanton Sioux Indians of Minnesota v. Zinke,
255 F. Supp. 3d 48 (D.D.C. 2017) ............................................................................................ 24
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 5 of 36
v
Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29 (1983) .............................................................................................................. 18, 19
Munaf v. Geren,
553 U.S. 674 (2008) .................................................................................................................... 9 National Council of Resistance of Iran v. Department of State,
251 F.3d 192 (D.C. Cir. 2001) .................................................................................................. 14 Newark Pre-Sch. Council, Inc. v. HHS,
201 F. Supp. 3d 72 (D.D.C. 2016) ...................................................................................... 10, 11 Newdow v. Bush,
355 F. Supp. 2d 265 (D.D.C. 2005) .......................................................................................... 25 Newdow v. Roberts,
603 F.3d 1002 (D.C. Cir. 2010) ................................................................................................ 17 Nken v. Holder,
556 U.S. 418 (2009) .................................................................................................................. 25 Orvis v. Brownell,
345 U.S. 183 (1953) .................................................................................................................... 2 Elec. Privacy Info. Ctr. v. DOJ,
15 F. Supp. 3d 32 (D.D.C. 2014) .............................................................................................. 11 Propper v. Clark,
337 U.S. 472 (1949) .................................................................................................................... 2 Pursuing Am.’s Greatness v. FEC,
831 F.3d 500 (D.C. Cir. 2016) .................................................................................................. 25 Rafeedie v. INS,
880 F.2d 506 (D.C. Cir. 1989) .................................................................................................. 19 Regan v. Wald,
468 U.S. 222 (1984) .................................................................................................................... 3 Sampson v. Murray,
415 U.S. 61 (1974) .................................................................................................................... 22 Sherley v. Sebelius,
644 F.3d 388 (D.C. Cir. 2011) .................................................................................................. 10
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 6 of 36
vi
Steffel v. Thompson, 415 U.S. 452 (1974) .................................................................................................................. 17
Trump v. Comm. on Oversight & Reform of U.S. House of Representatives,
380 F. Supp. 3d 76 .................................................................................................................... 25 Univ. of Tex. v. Camenisch,
451 U.S. 390 (1981) .................................................................................................................. 11 Weinberger v. Romero–Barcelo,
456 U.S. 305 (1982) .................................................................................................................. 10 Winter v. Nat. Res. Def. Council, Inc.,
555 U.S. 7 (2008) ............................................................................................................ 9, 10, 21 Wisc. Gas. Co. v. FERC,
758 F.2d 669 (D.C. Cir. 1985) ...................................................................................... 21, 22, 23 Zarmach Oil Servs., Inc. v. U.S. Dep’t of the Treasury,
750 F. Supp. 2d 150 (D.D.C. 2010) .................................................................................... 20, 21 Zevallos v. Obama,
793 F.3d 106 (D.C. Cir. 2015) ............................................................................................ 13, 27 Zevallos v. Obama,
10 F. Supp. 3d 111 (D.D.C. 2014) ...................................................................................... 18, 20 STATUTES 5 U.S.C. § 702 ............................................................................................................................... 23 5 U.S.C. § 706 ............................................................................................................... 7, 11, 18, 20 50 U.S.C. § 1701 ............................................................................................................................. 3 50 U.S.C. § 1702 ............................................................................................................. 3, 4, 20, 26 50 U.S.C. § 1705 ........................................................................................................................... 27 50 U.S.C. § 4305 ............................................................................................................................. 2 Pub. L. No. 107-56, 115 Stat. 272 (2001) ....................................................................................... 4 40 Stat. 411 (codified as amended at 50 U.S.C. § 4301 et seq.) ..................................................... 2
Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 Page 7 of 36
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REGULATIONS 31 C.F.R. Part 594........................................................................................................................... 4 31 C.F.R. section 594 .................................................................................................................... 14 31 C.F.R. § 501.801 ........................................................................................................................ 5 31 C.F.R. § 594.202 ........................................................................................................................ 5 31 C.F.R. § 594.203 ...................................................................................................................... 23 31 C.F.R. § 594.307 ........................................................................................................................ 5 31 C.F.R. § 594.404 ........................................................................................................................ 5 31 C.F.R. § 594.503 ........................................................................................................................ 5 31 C.F.R. § 594.310 ........................................................................................................................ 4 RULES Local R. 7 ................................................................................................................................ 14, 15 OTHER AUTHORITIES Exec. Order No. 13,224,
66 Fed. Reg. 49,079 (Sept. 23, 2001) ............................................................................... 3, 4, 27 Exec. Order No. 13,886,
84 Fed. Reg. 177 (Sept. 9, 2019) ................................................................................................ 5 S. Rep. No. 95-466 (1977), reprinted in 1977 U.S.C.C.A.N. 4540 ................................................ 3
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INTRODUCTION
The motion for a preliminary injunction brought by Plaintiff Askan Holdings, Ltd.—a
Seychelles-registered holding company and subsidiary of a Romanian airline company that was
party to an unsuccessful 2015 purchase agreement for a second-hand aircraft—is a request for
emergency relief in search of an actual emergency. The Department of the Treasury’s Office of
Foreign Assets Control (“OFAC”) has blocked Plaintiff’s down payment for the aircraft purchase,
and OFAC has twice denied licenses to Plaintiff for the return of these funds because a person
designated by OFAC has an interest therein. Plaintiff’s motion for injunctive relief is premised on
the supposed harm it is suffering from not having what it believes to be sufficient information to
understand OFAC’s basis for the blocking, and its motion seeks the full relief that it requests in
the underlying case.
Because it fails all aspects of the three-factor test necessary for issuing a preliminary
injunction, Plaintiff’s motion should be denied. First, Plaintiff has not established that it will
prevail on the merits of its claims under the due process clause of the Fifth Amendment and the
Administrative Procedure Act (“APA”). Plaintiff’s due process claim cannot be the basis for
injunctive relief because it is not entitled to the information it seeks, including the identity of the
target and unclassified summaries of any classified information, simply by virtue of the fact that it
has filed a lawsuit. Also unlikely to succeed are Plaintiff’s APA claims; since Plaintiff filed its
motion, OFAC has acted on its second license application, rendering moot Plaintiff’s unreasonable
delay claim, and its contention that OFAC’s final decision is arbitrary and capricious duplicates
its due process claim and, in any event, is premature.
Plaintiff’s motion fares no better under the remainder of the preliminary injunction
analysis. Plaintiff has not demonstrated that it will be irreparably harmed in the absence of an
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injunction; not only did Plaintiff wait years after first learning that the funds were blocked to file
suit, but the harm it now identifies is purely economic, which, as this Court observed, does not
provide a basis to issue an injunction. Finally, the balance of the equities heavily weighs in the
Government’s favor. Courts have repeatedly recognized that OFAC’s sanctions authority is an
important foreign policy and national security tool that should not be interfered with, even where
the rights of supposedly innocent third parties are implicated. Nor should Plaintiff be able to obtain
in the context of a preliminary injunction all—if not more—of the relief that it seeks in this case.
For all of these reasons, Plaintiff’s request for emergency relief should be denied, and this case
should proceed in the ordinary course.
BACKGROUND
I. STATUTORY AND REGULATORY BACKGROUND
A. Historical overview
The United States has long utilized economic sanctions as a tool in its foreign policy and
national security arsenals. During most of the twentieth century, U.S. sanctions programs were
governed by the Trading With the Enemy Act (“TWEA”), enacted in 1917. See 40 Stat. 411
(codified as amended at 50 U.S.C. § 4301 et seq.). As amended in 1933, TWEA granted the
President “broad authority” to “investigate, regulate . . . prevent or prohibit . . . transactions” in
times of war or declared national emergencies. See 50 U.S.C. § 4305(b)(1); Dames & Moore v.
Regan, 453 U.S. 654, 672 (1981). TWEA conveys to the Executive Branch the authority to
regulate, prevent, or prohibit transactions, which has been consistently interpreted to encompass
the power to block or freeze a person’s property. See, e.g., Orvis v. Brownell, 345 U.S. 183, 187-
88 (1953); Propper v. Clark, 337 U.S. 472, 483-84 (1949).
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B. Extension of the President’s authorities under IEEPA
In 1977, Congress amended TWEA and enacted IEEPA. See S. Rep. No. 95-466, at 2
(1977), reprinted in 1977 U.S.C.C.A.N. 4540, 4541. IEEPA extended the President’s authority to
declared national emergencies, while TWEA’s application was limited to periods of declared wars.
See Regan v. Wald, 468 U.S. 222, 227-28 (1984). Although the broad authorities granted to the
President under IEEPA remain essentially the same as those under TWEA, with certain limited
exceptions, see id. at 228, IEEPA requires the President to declare a 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,” see
50 U.S.C. § 1701(a). Once such a national emergency is declared, IEEPA authorizes the President
to:
. . . direct and compel, nullify, void, prevent or prohibit, any . . . transfer . . . 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 . . . with respect to any property, subject to the jurisdiction of the United States . . . .
Id. § 1702(a)(1)(B).
Pursuant to this expansive authority, Presidents have designated persons under sanctions
programs based on IEEPA in response to a variety of declared national emergencies. See, e.g.,
Exec. Order No. 13224, 66 Fed. Reg. 49079 (Sept. 23, 2001) (blocking assets of persons
determined “to have committed, or to pose a significant risk of committing, acts of terrorism that
threaten” U.S. national security). In October 2001, the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 amended
IEEPA. Among other things, the amendments provided that, in case of judicial review of an
IEEPA-based blocking designation, an agency record containing classified information “may be
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submitted to the reviewing court ex parte and in camera.” See 50 U.S.C. § 1702(c), added by Pub.
L. No. 107-56, § 106, 115 Stat. 272, 278 (2001).
C. Executive Order 13224 and the GTSR
In the wake of the September 11, 2001 attacks, the U.S. Government has made considerable
efforts to locate and target sources of terrorist funding, and it has drawn upon a range of tools to
disrupt funding channels and networks. See Declaration of Andrea Gacki (attached), ¶ 13. Critical
to this effort has been Executive Order 13224 (“E.O. 13224”), which was signed on September 23,
2001 and declared a national emergency to address the “unusual and extraordinary threat to [U.S.]
national security, foreign policy, and economy” posed by “grave acts of terrorism and threats of
terrorism committed by foreign terrorists,” including the September 11 attacks, as well as “the
continuing and immediate threat of further attacks on United States nationals or the United States.”
Exec. Order 13224, Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism, 66 Fed. Reg. 49079, 49079 (Sept. 23, 2001). E.O.
13224 blocked “all property and interests in property” of the persons specifically identified in an
Annex to the E.O. or who are designated by the Secretaries of State or the Treasury pursuant to
specified criteria. Id.
E.O. 13224 authorizes the Secretary of the Treasury to “employ all powers granted to the
President by IEEPA,” to promulgate rules and regulations to carry out the purposes of the Order,
and to re-delegate such functions. See id. at 49080; see generally 31 C.F.R. Part 594 (the “Global
Terrorism Sanctions Regulations”). A person whose property or interests in property is blocked
pursuant to section 201(a) of the GTSR is known as a Specially Designated Global Terrorist
(“SDGT”). See 31 C.F.R. § 594.310. In 2019, EO 13224 was amended to, among other things,
expand the scope of persons eligible to be blocked pursuant to that authority to include foreign
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persons determined “to have committed or have attempted to commit, to pose a significant risk of
committing, or to have participated in training to commit acts of terrorism that threaten the security
of United States nationals or the national security, foreign policy, or economy of the United
States.” See Exec. Order No. 13886, 84 Fed. Reg. 177 (Sept. 9, 2019). OFAC’s actions at issue
in this case were taken pursuant to E.O. 13224 prior to its amendment in 2019 and the GTSR. See
Gacki Decl. ¶ 16.
D. OFAC’s licensing authority
Once an SDGT is designated, all property and interests in property of the SDGT that are in
the United States, come within the United States, or are or come within the possession or control
of a U.S. person are blocked, and the GTSR do not allow for that interest to be extinguished absent
authorization from OFAC in the form of a license. See 31 C.F.R. § 594.202; 31 C.F.R.
§ 594.404(b). Such licenses may be either “general” or “specific.” 31 C.F.R. § 594.307. A
specific license may be issued where a person requests authorization to conduct an otherwise
prohibited transaction or service. 31 C.F.R. § 501.801(b)(2). Persons whose license applications
are denied are permitted to seek reconsideration of the denial by providing new facts or changed
circumstances that the applicant believes warrants a different decision. Id. § 501.801(b)(5).
OFAC’s regulations permit, but do not compel, the issuance of licenses if certain criteria
are met. 31 C.F.R. § 594.503; see also Gacki Decl. ¶ 19. The agency’s regulatory authority grants
it discretion to consider U.S. national security and foreign policy objectives when deciding whether
to grant or deny a license. 31 C.F.R. § 594.503; see also Gacki Decl. ¶ 19. Because these
considerations are complex, subtle, and ever-changing, OFAC evaluates each application for a
specific license on a case-by-case basis in light of all relevant facts and circumstances, including
the nature of the sanctions program pursuant to which the blocking occurred, whether national
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security and foreign policy concerns have changed, and the novel circumstances underlying each
request. Gacki Decl. ¶ 19. OFAC’s policy, moreover, contemplates that property and interests in
property generally should remain blocked until the sanctions on the designated person are lifted or
the national emergency justifying the designation has terminated. Id. ¶ 20. Consistent with this
policy, OFAC issues licenses releasing blocked property only in limited circumstances, and very
rarely when the license request is to engage in commercial activity. Id.
II. FACTUAL BACKGROUND
Plaintiff Askan Holdings, Ltd., is a Seychelles-registered aircraft holding company, and a
wholly owned subsidiary and the dedicated holding company of Transylvania International
Airlines SRL (“TIA”).1 Compl., ECF No. 1, ¶ 1. In 2015, Plaintiff contracted with a Turkish
company called Jazz Jet Aviation to serve as a middle man for purchasing a second-hand aircraft,
which Plaintiff alleges was to shore up TIA’s commercial airline business. Id. ¶¶ 9-10. Plaintiff
alleges that it entered into a letter of intent to purchase an Airbus 320. Id. ¶ 12. That letter of
intent was signed by Plaintiff and Jazz Jet Aviation; Plaintiff did not (and does not) identify the
owner of the Airbus 320 or the owner’s location. See id. As part of its obligations under the letter
of intent, Plaintiff deposited $920,000 of the $9,200,000 purchase price of the airplane with
Froriep, a Swiss law firm that served as an escrow agent. Id. ¶ 14. Ultimately, the agreement
between Plaintiff and Jazz Jet fell apart when the latter was unable to secure possession of the
Airbus 320. Id. ¶¶ 15-17.
1 Defendants refer to the Complaint here for purposes of conveying information as it was alleged in the Complaint. With the exception of the Complaint’s discussion of Plaintiff’s efforts to obtain a specific license, Defendants are not in a position to know whether the allegations in the Complaint discussed herein are true.
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Plaintiff’s $920,000 down payment was placed at Deutsche Bank Trust Company
Americas, where it currently resides. Id. ¶ 18. After Plaintiff’s deal fell apart, Froriep’s attempt
to transfer the funds from the bank back to Askan was unsuccessful because the funds were
blocked. Id. On May 18, 2016, Plaintiff submitted a license request for release of the blocked
funds. See Gacki Decl. ¶ 24. OFAC denied that request on May 2, 2017 after determining that a
person blocked pursuant to the GTSR had an interest in the blocked funds and that such a license
would be inconsistent with its licensing policies. See Gacki Decl. ¶ 24. Plaintiff submitted a
second request for a license on October 9, 2019, seeking reconsideration of OFAC’s May 2, 2017
denial. See 10/9/19 License Application, ECF No. 1-1 (attached as Exhibit A to Plaintiff’s
Complaint); Plaintiff explained that it had not been able to identify any SDGT interests in the
transaction, and if there were any such interests, they were not “readily apparent.” Id. After
reviewing the information submitted by Plaintiff and determining that a person blocked pursuant
to the GTSR had an interest in the funds, OFAC concluded that release of the funds would be
inconsistent with its policy and denied Plaintiff’s second request. Gacki Decl. ¶ 24. OFAC issued
this decision on June 12, 2020. Id.; see also 6/12/20 License Denial (attached as Exhibit A).
Plaintiff initiated this case on June 2, 2020, filing a Complaint that asserts three causes of
action. First, Plaintiff alleges that OFAC’s blocking of funds and refusal to grant Plaintiff a license
is arbitrary and capricious in violation of § 706(2)(A) of the APA. See Compl. ¶¶ 30-32. Second,
Plaintiff contends that, because OFAC had not responded to its October 9, 2019 request for a
license at the time the Complaint was filed, OFAC was unlawfully withholding agency action in
violation of § 706(1) of the APA. Id. ¶¶ 34-41. Third, Plaintiff asserts that OFAC has violated its
due process rights by failing to provide it with certain information about its license denial,
including unclassified information and the identity of the person blocked pursuant to the GTSR.
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Id. ¶¶ 44-47. Plaintiff seeks an injunction ordering OFAC to issue a decision on its license
application or to stop blocking the return of the down payment, as well as declaratory and
mandamus relief. Id. Prayer for Relief.
Also on June 2, 2020, Plaintiff filed a motion styled as a request for injunctive relief or, in
the alternative, for mandamus. See Pl.’s Mot. for Inj. Relief or in the Alt. for Mandamus (“Pl.’s
PI Mot.”), ECF No. 3, at 1. The relief Plaintiff seeks in that motion exceeds that which it seeks in
the Complaint. Whereas the Complaint requests simply that the Court order OFAC to issue a
decision on Plaintiff’s most recent licensing request or stop blocking the funds, see Compl. at
Prayer for Relief, Plaintiff’s motion requests an injunction ordering OFAC to either (1) grant the
application or, (2) if the application is denied, identify the person or persons whose interest in
property is blocked pursuant to the GTSR and provide Plaintiff with all of the unclassified facts
supporting OFAC’s decision and unclassified summaries of the any classified information, see
Pl.’s PI Mot. at 1.
On June 9, 2020, the Court held a telephonic status conference to discuss Plaintiff’s motion.
During that status conference, the Court construed Plaintiff’s motion as one seeking a preliminary
injunction. See Tr. of 6/9/20 Tel. Status Conf. (attached as Exhibit B) at 13:25 – 14:1. The Court
further directed OFAC to provide by June 19, 2020 the agency’s “best estimate” of when it can
provide an unclassified record regarding OFAC’s prior license denial. Id. at 15:1-5.
III. AGENCY ACTION CHALLENGED IN THIS CASE
For the sake of clarity, Defendants note that the agency action referred to throughout this
memorandum is OFAC’s June 12, 2020 license denial. Although Plaintiff’s Complaint purports
to challenge OFAC’s May 2, 2017 license denial, see Compl. ¶ 23; see also Tr. of 6/9/20 Tel.
Status Conf. at 15:15 (directing OFAC to provide unclassified record for “OFAC’s prior license
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9
denial”), OFAC has since issued a decision on June 12, 2020 again denying Plaintiff a license.
Because OFAC’s June 12 decision was a denial of Plaintiff’s request for reconsideration of
OFAC’s May 2, 2017 denial, OFAC’s prior decision has been supplanted by the June 12 decision.
Defendants submit that this distinction is immaterial with respect to the contents of the
Administrative Record in this case: all of the materials that OFAC considered, directly or
indirectly, for its May 2, 2017 denial will be included in the Administrative Record for the June
12, 2020 reconsideration denial.2
STANDARD OF REVIEW
A preliminary injunction is an “extraordinary and drastic remedy” that is “never awarded
as of right.” Munaf v. Geren, 553 U.S. 674, 689-90 (2008). Instead, a preliminary injunction “may
only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). To obtain such relief, a plaintiff “must establish
[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the
absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an
injunction is in the public interest.” Id. at 20. And the movant carries the burden of persuasion.
See Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004); Fla. EB5 Investments, LLC v. Wolf, No.
CV 19-3573 (RJL), 2020 WL 1079181 (D.D.C. Mar. 6, 2020).
The Court of Appeals has emphasized that the “first and most important factor” is whether
the moving party has “established a likelihood of success on the merits.” Aamer v. Obama, 742
F.3d 1023, 1038 (D.C. Cir. 2014). “When a plaintiff has not shown a likelihood of success on the
merits, [we need not] consider the other factors.” Greater New Orleans Fair Hous. Action Ctr. v.
2 This same point, moreover, holds true to the extent that Plaintiff purports to challenge OFAC’s blocking of Askan’s funds (as opposed to the denial of its license request). The distinction makes no difference in the Administrative Record.
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HUD, 639 F.3d 1078, 1088 (D.C. Cir. 2011). The Supreme Court has also instructed that a
preliminary injunction cannot issue on the basis of speculative or possible injury. Rather, the
moving party must establish that irreparable harm is at least “likely in the absence of an
injunction.” Winter, 555 U.S at 22.3 Finally, “courts of equity should pay particular regard for the
public consequences in employing the extraordinary remedy of injunction.” Weinberger v.
Romero–Barcelo, 456 U.S. 305, 312 (1982).
Moreover, the D.C. Circuit “has expressly cautioned that ‘[t]he power to issue a
preliminary injunction, especially a mandatory one, should be ‘sparingly exercised,’” Newark Pre-
Sch. Council, Inc. v. HHS, 201 F. Supp. 3d 72, 78 (D.D.C. 2016) (quoting Dorfmann v. Boozer,
414 F.2d 1168, 1173 (D.C. Cir. 1969)), and has characterized the standard for a mandatory
preliminary injunction as “demanding.” Archdiocese v. Wash. Metro Area Transit Auth., 897 F.3d
314, 319 (D.C. Cir. 2018). Heeding these warnings, courts in this Circuit have held that a party
seeking a preliminary injunction bears a “significantly heightened” burden when, as here, “a
plaintiff requests affirmative injunctive relief” that would change the status quo rather than merely
preserving it. Feng Wang v. Pompeo, 354 F. Supp. 3d 13, 20 (D.D.C. 2018); accord English v.
Trump, 279 F. Supp. 3d 307, 316 (D.D.C. 2018). This heightened burden is warranted because, at
its core, “‘[t]he purpose of a preliminary injunction is merely to preserve the relative positions of
3 In Sherley v. Sebelius, 644 F.3d 388, 393 (D.C. Cir. 2011), the Court of Appeals noted that Winter called into question the “sliding-scale approach” to consideration of the preliminary injunction factors that had been the law of this Circuit. The Court read “Winter at least to suggest if not to hold that a likelihood of success is an independent, free-standing requirement for a preliminary injunction” such that a “movant cannot obtain a preliminary injunction without showing both a likelihood of success and a likelihood of irreparable harm.” Id. at 393; see BHM Healthcare Sols., Inc. v. URAC, Inc., 320 F. Supp. 3d 1, 7 (D.D.C. 2018). Noting a split among the circuits on the interpretation of Winter, the Court of Appeals held that it did not need to resolve the question because the movant in Sherley failed to establish an entitlement to a preliminary injunction under the “less demanding sliding-scale” approach. Id. This Court need not address this issue here, as Plaintiff’s claims for relief fail under either standard.
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the parties’” while the Court decides the merits of a plaintiff’s claim. Newark Pre-Sch. Council,
Inc., 201 F. Supp. 3d at 78 (quoting Univ. of Tex., 451 U.S. at 395). Courts thus have held that a
party seeking a mandatory injunction must “clearly” show that “he or she is entitled to relief or
that extreme or very serious damage will result from the denial of the injunction.” Elec. Privacy
Info. Ctr. v. DOJ, 15 F. Supp. 3d 32, 39 (D.D.C. 2014) (collecting cases). For the reasons discussed
below, Plaintiff cannot meet this heavy burden.
ARGUMENT
I. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO PREVAIL ON THE MERITS OF ITS CLAIMS
Plaintiff brings three claims in this case: (1) a due process challenge to the sufficiency of
information it was provided about OFAC’s reasons for blocking its funds and denying its license
application, (2) a challenge under § 706(1) of the APA that OFAC has unlawfully withheld or
unreasonably delayed a decision on its license application, and (3) a challenge under § 706(2)(A)
to OFAC’s denial of its license request on the grounds that the denial was arbitrary and capricious.
Since the time that Plaintiff filed the instant motion, OFAC has denied Plaintiff’s October 2019
license request, rendering the § 706(1) challenge moot. For the reasons discussed below, neither
of the other two claims can serve as a basis for issuing a preliminary injunction.
A. Plaintiff is not likely to succeed on the merits of its due process claim because it is not automatically entitled to the information that it seeks
Plaintiff’s motion relies heavily on its assertion that OFAC is violating its Fifth
Amendment right to due process by not providing it with information about the reasons why the
agency has blocked the transfer of Plaintiff’s down payment currently being held by Deutsche
Bank America. Pl.’s PI Mot. at 7-10. In particular, Plaintiff demands that OFAC “immediately”
provide it with “all of the unclassified information in the administrative record supporting the
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government action” as well as unclassified summaries of classified information in the record. Id.
at 8. Plaintiff also seeks “the identity of the party or parties that triggered OFAC to act.” Id. at 9.
In actuality, OFAC is not obligated to provide Plaintiff with all of this information in order to
satisfy due process requirements (assuming such protections apply to Plaintiff), and none of this
information is required at this stage of the litigation.
To begin, it is not certain that Plaintiff is entitled to due process rights because it appears
to have, at best, extremely limited connections to the United States. Plaintiff is a Seychelles-
registered aircraft holding company and a wholly owned subsidiary and the dedicated holding
company of TIA, a Romanian company which operates aircraft. Compl. ¶ 1. TIA’s director and
sole shareholder is an individual named Nizam Kucuk Akyuz, who Plaintiff does not allege to be
a U.S. citizen or otherwise have connections to the United States. Id. Indeed, the only connection
Plaintiff does identify is the fact that its blocked funds are held in a U.S. bank account, but even
that bank account is not alleged to belong to Plaintiff. See id. ¶ 14. Plaintiff has cited no case
where full due process protections have been extended to a foreign entity with no physical presence
and merely had blocked funds transiting through the U.S. financial system. Indeed, case law out
of this Circuit suggests the opposite. See, e.g., Jifry v. FAA, 370 F.3d 1174, 1182 (D.C. Cir. 2004)
(“[N]on-resident aliens who have insufficient contacts with the United States are not entitled to
Fifth Amendment protections); FBME Bank Ltd. v. Lew, 209 F. Supp. 3d 299, 328 (D.D.C. 2016)
(“[F]inding due process protections under these circumstances would be inconsistent with
Verdugo–Urquidez’s requirement that the foreign entity ‘come within the territory’ of the United
States, which suggests at least some degree of physical presence. As a result, the Court concludes
that FBME has likely not met its burden to establish an entitlement to due process as a general
matter.” (internal citation omitted)).
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Assuming Plaintiff can invoke the protections of due process, or at least insofar as such
protections could apply to the blocked funds, Plaintiff has failed to set forth a plausible due process
claim. Courts have made clear that the provision of due process does not involve a one-size-fits-
all approach. To the contrary, “due process is flexible and calls for such procedural protections as
the particular situation demands.” Gilbert v. Homar, 520 U.S. 924, 930 (1997). “The essence of
due process is the requirement that a person in jeopardy of serious loss (be given) notice of the
case against him and opportunity to meet it.” Mathews v. Eldridge, 424 U.S. 319, 348 (1976)
(internal quotation marks omitted). With regarding to OFAC’s blocking of assets, the D.C. Circuit
has held that due process does not require advanced notice, given that “providing notice before
blocking the assets of [designated persons] would create a substantial risk of asset flight.” Zevallos
v. Obama, 793 F.3d 106, 116 (D.C. Cir. 2015). Although Plaintiff does not specify whether it
believes it is entitled to pre- or post-deprivation notice, it can legally lay claim only to the latter.
Plaintiff’s due process claim on its merits cannot form the basis for a preliminary injunction
for two reasons. First, OFAC did provide Plaintiff with procedural protections when denying its
license application. Despite Plaintiff’s claim that OFAC failed to provide it “with any information
that would apprise [Plaintiff] of the reasons” OFAC blocked the funds, Pl.’s PI Mot. at 7, OFAC
informed Plaintiff in its denial letter that “the blocked funds transfer in question involves the
interest of a sanctions target” See 6/12/20 License Denial. OFAC further explained that the target
is “a Specially Designated Global Terrorist, pursuant to the Global Terrorism Sanctions
Regulations, 31 C.F.R. section 594.” Id. Plaintiff, moreover, has an available mechanism for
challenging the license denial: it can seek reconsideration of OFAC’s decision by presenting the
agency with new or additional relevant information. Id. By bringing the instant lawsuit, Plaintiff
challenges the sufficiency of the explanation for the license denial that it received, and this Court’s
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procedures set forth the relevant procedures for review of OFAC’s decision. See, e.g., Local Rule
7(n) (contemplating, in cases concerning review of administrative agency actions, creation,
certification, and disclosure of an administrative record where the Government has “cited or
otherwise relied upon” the record in support of or in opposition to a dispositive motion). But there
is no basis to conclude that OFAC’s blocking of the funds transfer or its licensing process as
executed in this case is unconstitutional.
Second, Plaintiff’s motion misses the mark when it asserts that Plaintiff has a right to have
“immediately” certain types of information. It insists, for example, that OFAC immediately
provide “all of the unclassified information in the administrative record supporting the government
action.” Pl.’s Mot. at 8. But there is no requirement that such information be provided
immediately. Here, OFAC issued its license denial on June 12, 2020, ten days after Plaintiff
moved for a preliminary injunction, and Defendants will provide Plaintiff with the certified
unclassified administrative record for its decision in compliance with this Court’s rules. See Local
Rule 7(n); see also Tr. of 6/9/20 Tel. Status Conf. at 15:1-8 (directing OFAC to submit by June
19, 2020 an “estimate” of when it will be able to provide the unclassified administrative record to
Plaintiff). Plaintiff’s demand for the Court issue an injunction because it did not receive the
unclassified administrative record “immediately” upon filing its suit is not supported by either case
law or this Court’s procedures. And as a practical matter, such a position would be untenable:
administrative records are created as a result of the filing of a lawsuit involving an APA challenge
to a final agency action; they do not exist in a vacuum, and agencies generally do not prepare them
absent a lawsuit.
Nor is Plaintiff correct to assert that unclassified summaries of classified information are
necessary in order to comply with due process. See Pl.’s PI Mot. at 8-9 (“When the unclassified
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information in the administrative record is insufficient to support the government’s action, the
agency must supplement the record with unclassified summaries of the classified information on
which it has based its action.”). Contrary to Plaintiff’s suggestion, unclassified summaries
generally are not required where classified information is part of an administrative record, as courts
in this Circuit have recognized on multiple occasions. See, e.g., Jifry, 370 F.3d at 1183-84 (holding
that the Government satisfied the notice requirements of due process by informing foreign pilots
that their airmen certificates had been revoked based on TSA’s determination that they were a
“security threat.”); FBME Bank Ltd. v. Lew, 125 F. Supp. 3d 109, 119 n.2 (D.D.C. 2015)
(concluding that, while “unclassified summaries of classified information on which an agency
relied may be helpful to litigants, they are not required”); Holy Land Found. for Relief & Dev. v.
Ashcroft, 333 F.3d 156, 164 (D.C. Cir. 2003) (rejecting plaintiffs’ argument “that due process
prevents its designation [by OFAC] based upon classified information to which it has not had
access”). Although the Ninth Circuit remarked, in the context of reviewing OFAC’s designation
of a non-profit corporation as a terrorist organization, that unclassified summaries “could provide
helpful information,” it did not hold that they were necessary in every instance. See Al Haramain
Islamic Found., Inc. v. U.S. Dep’t of Treasury, 686 F.3d 965, 983 (9th Cir. 2012) (“[A]n
unclassified summary may not be possible because, in some cases, the subject matter itself may be
classified and cannot be revealed without implicating national security.”); id. at 984 (“We agree
that a case-by-case approach is proper. As we have alluded to earlier, the proper measures in any
given case will depend on a number of factors.”).
Plaintiff’s request for information, moreover, is premature, even on its own terms. Plaintiff
contends that unclassified summaries are required where the unclassified administrative record “is
insufficient to support the government’s action.” Pl.’s Mot. at 8. But, as discussed above, the
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Court has ordered only that OFAC provide an “estimate” of when the unclassified (and non-
privileged) Administrative Record will be ready, and Plaintiff cannot at present to know whether
or not it is insufficient. Consistent with Local Rule 7(n) and any scheduling order entered by the
Court, OFAC will submit the unclassified (and non-privileged) certified Administrative Record
for this case. That would be the proper time for Plaintiff to dispute the sufficiency of the Record,
not in the context of a preliminary injunction motion.
Plaintiff’s third and final demand—for OFAC “to identify the party that triggered its order
to freeze [Plaintiff’s] down payment,” see Pl.’s PI Mot. at 10—should similarly be rejected.
Plaintiff again relies on KindHearts for this proposition, but that case—a district court opinion
from outside this Circuit—concerned a due process challenge brought by a U.S. charitable
organization that itself had been “blocked pending investigation” for two years by OFAC. See
KindHearts, 647 F. Supp. 2d at 904. Nor did the court’s order in that case specifically hold that
disclosure was required where information was classified or would otherwise cause harm to U.S.
national security or law enforcement interests. Id.; see also Al Haramain, 686 F.3d at 983
(suggesting that disclosure of information would not be required where it would “implicat[e]
national security”). Indeed, this Court has rightly expressed skepticism about Plaintiff’s ability to
obtain that information. See Tr. of 6/9/20 Tel. Status Conf. at 13:10-14 (“It's a whole other thing
whether they can reveal what their sources are. The odds are overwhelming probably that their
sources are classified and they will not be able to share that with you.”). Plaintiff simply has no
basis to assert that it is entitled, as a matter of right, to know the identity of the target referenced
in OFAC’s denial letter, especially at this preliminary stage of the case.
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B. Plaintiff’s § 706(1) claim is moot because OFAC has acted on its license application
Nor can Plaintiff show that it is likely to succeed on its claim that OFAC has unreasonably
delayed agency action by “failing to act on Askan’s application for a license.” Compl. ¶¶ 33-42.
In particular, this claim is moot because OFAC has now acted on the Plaintiffs’ second license
application and has denied it.4 See 6/12/20 License Denial. Under Article III of the Constitution,
a federal court “may only adjudicate actual, ongoing controversies.” Honig v. Doe, 484 U.S. 305,
317 (1988). “This limitation gives rise to the doctrine[ ] of ... mootness,” Foretich v. United States,
351 F.3d 1198, 1210 (D.C. Cir. 2003), which precludes judicial review where “events have so
transpired that [a judicial] decision will neither presently affect the parties’ rights nor have a more-
than-speculative chance of affecting them in the future,” Clarke v. United States, 915 F.2d 699,
701 (D.C. Cir. 1990) (en banc) (quotation marks omitted). “It is a basic constitutional requirement
that a dispute before a federal court be ‘an actual controversy extant at all stages of review, and
not merely at the time the complaint is filed.’” Newdow v. Roberts, 603 F.3d 1002, 1008 (D.C.
Cir. 2010) (quoting Steffel v. Thompson, 415 U.S. 452, 459 n.10 (1974)).
Here, the second license application was submitted to OFAC in October 2019. It was
denied on June 12, 2020. See 6/12/20 License Denial; Gacki Decl. ¶ 24. Any unreasonable delay
claim is therefore moot because the agency action demanded has been completed. See, e.g.,
Zevallos, 10 F. Supp. 3d at 123-24 (finding claim regarding delay moot after agency issued
decision); Ctr. for Biological Diversity v. Kempthorne, 498 F. Supp. 2d 293, 296–97 (D.D.C. 2007)
(agency’s issuance of decision on plaintiff’s petition for rulemaking mooted claim of unreasonable
delay and request for order requiring agency to issue decision); cf. Conservation Force, Inc. v.
4 OFAC had already acted on Plaintiff’s 2016 license application. See Compl. ¶¶ 22-23.
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Jewell, 733 F.3d 1200, 1205 (D.C. Cir. 2013) (describing that due process claims based on delay
had become moot upon issuance of a final decision).
C. Plaintiff’s premature claim that OFAC’s denial of its license application was arbitrary and capricious is not a basis for preliminary relief
In its third claim for relief, Plaintiff contends that OFAC’s denial of a license was arbitrary
and capricious because OFAC has not provided Plaintiff “with the information that it needs to
understand the basis of OFAC’s actions” and “has forced [Plaintiff] to guess at OFAC’s actions.”
Pl.’s PI Mot. at 11. As with Plaintiff’s other two claims, the § 706(2)(A) claim cannot serve as a
basis for granting a preliminary injunction here.
To begin, Plaintiff’s § 706(2)(A) claim largely duplicates its due process claim. An
arbitrary and capricious claim challenges the soundness of an agency’s decision-making process,
see Marsh v. Ore. Nat. Res. Council, 490 U.S. 360, 378 (1989) (holding that, a court reviewing a
§ 706(2)(A) challenge “must consider whether the decision was based on a consideration of the
relevant factors and whether there has been a clear error of judgment” (citation omitted)), and,
ultimately, the question for a court undertaking this review is whether the agency’s decision is
“within the bounds of reasoned decisionmaking,” Balt. Gas & Elec. Co. v. NRDC, 462 U.S. 87,
105 (1983); see also Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463
U.S. 29, 43 (1983) (identifying four procedural errors that would permit a court to set aside an
agency decision as arbitrary and capricious).
In this case, however, Plaintiff does not allege that OFAC committed any procedural errors
in denying its license application or that OFAC’s decision-making process was not sufficiently
sound. Nor does Plaintiff suggest that blocking funds in which an SDGT has an interest is an
invalid basis for OFAC to act. Rather, Plaintiff complains that OFAC has deprived it of its
property without providing an explanation as to why, employing language mirroring that it uses to
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plead its due process claim. See, e.g., Pl.’s PI Mot. at 11 (“By refusing to provide Askan with the
information that it needs to understand the basis of OFAC’s actions, [OFAC] has forced Askan to
have to guess at OFAC’s reasons. Where a party can only guess at the reasons for an agency’s
actions, the party cannot adequately respond and the risk that the agency will erroneously deprive
the party of its rights is high.”). Indeed, two of the cases upon which Plaintiff principally relies in
discussing its § 706(2)(A) claim—Al Haramain v. U.S. Department of Treasury and Rafeedie v.
INS5—addressed procedural due process claims separate and apart from challenges brought under
§ 706(2)(A) of the APA. Properly understood as a due process challenge, Plaintiff’s arbitrary and
capricious claim should fail for the same reasons discussed above. See supra, Section I.A; cf.
Rakhimov v. Gacki, No. CV 19-2554 (JEB), 2020 WL 1911561, at *7 (D.D.C. Apr. 20, 2020)
(describing the issuance of an unclassified summary as an “unprecedented remedy” to which
plaintiff is not entitled under the APA).
Furthermore, any attempt by Plaintiff to secure a preliminary injunction on the basis of its
arbitrary and capricious claim is premature. OFAC denied Plaintiff’s request for a license on June
12, 2020, but Plaintiff moved for a preliminary injunction on June 2, 2020, prior to it even having
knowledge as to what OFAC’s decision would be. Plaintiff thus has no basis to allege in its motion
that OFAC acted arbitrarily in denying the license or that its decision was not supported by a
rational basis because OFAC had not even made a final decision at the time the motion was filed,
let alone been able to provide a justification for that decision. Such speculation falls well short of
providing a basis to conclude that Plaintiff is likely to succeed on the merits of this claim. See Elk
Assocs. Funding Corp. v. U.S. Small Bus. Admin., 858 F. Supp. 2d 1, 24 (D.D.C. 2012) (holding
that, in the context of a likelihood-of-success-on-the-merits analysis, “conclusory and speculative
5 See Al Haramain, 686 F.3d at 986; Rafeedie v. INS, 880 F.2d 506, 516 (D.C. Cir. 1989).
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assertions, unsupported by any competent evidence, are patently insufficient to overcome the
presumption of administrative regularity”); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007) (holding that, in order to sufficiently state a viable claim, a plaintiff’s “[f]actual allegations
must be enough to raise a right to relief above the speculative level”).6 Moreover, OFAC indicated
in its denial that an SDGT has an interest in the blocked funds. See 6/12/20 License Denial; see
also Compl. ¶¶ 22-23. Plaintiff offers nothing to contest this determination at this stage of the
case, other than assertions about consulting the SDN List and Lexis/Nexis; there is no basis at this
time for the Court to conclude, even preliminarily, that OFAC acted arbitrarily or capriciously.7
6 Indeed, Count I of the Complaint, which alleges that OFAC’s decision was arbitrary and capricious, should be dismissed for failure to state a claim. Plaintiff provides no explanation or reasons for this allegations but instead simply repeats the operative language from § 706(2)(A) in its Complaint. See Compl. ¶¶ 30-32; Twombly, 550 U.S. at 555 (“[A] plaintiff’s obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”). Implicit in Plaintiff’s claim is the notion that an agency action is de facto arbitrary and capricious whenever the agency fails to provide supporting justification for that action. Here, OFAC has articulated a basis for the denial of the license: the existence of an SDGT in the funds. Moreover, OFAC has statutory authorization to make ex parte, in camera submissions in order to defend its actions. See 50 U.S.C. § 1702(c). In such instances, just because more specific details supporting an agency’s final action are unknown to a plaintiff does not necessarily mean that they are arbitrary and capricious. See Rakhimov, 2020 WL 1911561, at *5-*6. 7 Even if Plaintiff has brought a proper § 706(2)(A) claim (as opposed to a variation of its due process claim), the Court’s review of OFAC’s license denial would be “narrow and particularly deferential.” See Marsh v. Ore. Natural Resources Council, 490 U.S. 360, 378 (1989); Int’l Fabricare Inst. v. EPA, 972 F.2d 384, 389 (D.C. Cir. 1992) (stating that this “highly deferential standard of review presumes ‘agency action to be valid’”). This deference is especially warranted here, given the national security and foreign policy underpinnings of OFAC’s sanctions program. See Zevallos, 10 F. Supp. 3d at 119 (recognizing additional deference beyond that typically accordedto an agency under the APA); Zarmach Oil Servs., Inc. v. U.S. Dep’t of the Treasury, 750 F. Supp. 2d 150, 155 (D.D.C. 2010) (“[C]ourts owe a substantial measure of ‘deference to the political branches in matters of foreign policy,’ including cases involving blocking orders.”).
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II. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO BE IRREPARABLY HARMED ABSENT A PRELIMINARY INJUNCTION
In addition to not being likely to succeed on the merits, Plaintiff has not shown that it is
likely to suffer an irreparable injury without a preliminary injunction. Among other defects in its
argument Plaintiff relies almost entirely on allegations of economic harm, but, absent highly
unusual circumstances, such allegations are an insufficient basis for an irreparable harm finding,
as this Court observed at the June 9, 2020 status conference. See Tr. of 6/9/20 Status Conference
at 8:8-14 (“THE COURT: I would encourage the plaintiffs to familiarize themselves, if they’re
not, with the irreparable-harm component of a PI in this Circuit. It’s very tough. And if it’s a
financial issue, it’s really tough. And the chances of getting a PI, unless you can show that
$900,000 is going to bring down your company, is very slim, very slim.”). And because irreparable
harm is a necessary finding for a preliminary injunction to issue, see Winter, 555 U.S at 22,
Plaintiff’s motion fails for this reason alone.
The D.C. Circuit “has set a high standard for irreparable injury.” Chaplaincy of Full Gospel
Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006). To obtain the extraordinary and drastic
remedy of preliminary injunctive relief, a plaintiff must “establish an injury that is ‘both certain
and great . . . actual and not theoretical.’” John Doe Co. v. Consumer Fin’l Protection Bur., 849
F.3d 1129, 1134 (D.C. Cir. 2017) (quoting Wisc. Gas. Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.
1985)). To meet this demanding standard, “[t]he party seeking relief must show that the
complained-of injury is so imminent that there is a clear and present need for equitable relief.”
Dallas Safari Club v. Bernhardt, --- F. Supp. 3d --, 2020 WL 1809181, at *4 (D.D.C. Apr. 9, 2020)
(citing Wisc. Gas Co., 758 F.2d at 674). “Injunctions ... will not issue to prevent injuries neither
extant nor presently threatened, but only merely feared.” Comm. in Solidarity with People of El
Sal. (CISPES) v. Sessions, 929 F.2d 742, 745–46 (D.C. Cir. 1991) (alteration in original). Neither
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“bare allegations of harm,” id., nor “unsubstantiated and conclusory assertions,” John Doe Co.,
849 F.3d at 1134, are enough. The movant instead “must submit competent evidence into the
record that would permit the Court to assess whether [the movant], in fact, faces irreparable harm”
if an injunction is not issued. Guttenberg v. Emery, 26 F. Supp. 3d 88, 102 (D.D.C. 2014) (cleaned
up) (citing Cornish v. Dudas, 540 F. Supp. 2d 61, 65 (D.D.C. 2008)); Am. Ass’n of Political
Consultants v. United States Small Bus. Admin., No. CV 20-970, 2020 WL 1935525, at *6 (D.D.C.
Apr. 21, 2020), appeal pending (denying PI based on conclusory allegations of financial harm
without detailed documentation).
Moreover, it is “well settled” that economic harm “does not, in and of itself, constitute
irreparable harm.” Wis. Gas Co., 758 F.2d at 674; Fla. EB5 Investments, LLC v. Wolf, 2020 WL
1079181, at *3. “Recoverable monetary loss may constitute irreparable harm only where the loss
threatens the very existence of the movant’s business.” Id. Where the harm is financial, “an
insufficiency of savings or difficulties in immediately obtaining [replacement income] ... will not
support a finding of irreparable injury, however severely [it] may affect a particular individual.”
Sampson v. Murray, 415 U.S. 61, 92 (1974).
Primarily, Plaintiff seems to argue that it has suffered economic harm from the blocking of
funds, but Plaintiff has not demonstrated that such economic harm is irreparable. Plaintiff avers
that it “has suffered irreparable harm because the only way to remedy the harm is for OFAC to
issue a license.” Pl.’s PI Mot. at 12. But even if true, that statement demonstrates the exact
opposite proposition: that the harm is recoverable. If the “only” appropriate remedy here is the
issuance of a license, there is no emergency justifying preliminary relief because that same remedy
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could issue following full consideration of the merits if the Court determined it was appropriate.8
Plaintiff has not demonstrated that any irreparable harm would occur in the interim. The only
immediate alleged harm is economic, see Wis. Gas Co., 758 F.2d at 674, and the alleged harm is
recoverable because, although monetary damages are not available, the APA permits injunctive
relief in appropriate circumstances, see 5 U.S.C. § 702.
Nor has Plaintiff even attempted to demonstrate that “the alleged loss threatens the very
existence of the movant’s business.” Id; see also Arriva Med. LLC v. United States Dep't of Health
& Human Servs., 239 F. Supp. 3d 266, 281 (D.D.C. 2017) (rejecting argument that any delay in
adjudication threatened the business because the losses threatened the business). Indeed, Plaintiff
has not submitted any evidence whatsoever regarding the harm to the business, much less the
detailed, non-conclusory declarations that might support a finding of irreparable harm. See Am.
Ass’n of Political Consultants, 2020 WL 1935525, at *6. Although Plaintiff’s counsel indicated
at the status conference that Plaintiff was unable to “launch the business,” Plaintiff still has not
submitted any evidence that would support finding that the existence of the business is threatened.
In short, the alleged financial harm is not irreparable because the funds are not seized or forfeited;
they are frozen in place, and could in theory be released if Plaintiff were successful in this action.9
Plaintiff also refers to an informational injury, claiming that “it has lost information that it
needs to be able to know what caused the purported violation, and thus to arrange its future affairs.”
Pl.’s PI Mot. at 12. But again, Plaintiff fails to explain why this is a harm, what “actual” “great”
8 Of course, the appropriate remedy here would depend on if some violation were found and the nature of that violation. If the Court found a procedural or substantive error in the license denial, it is likely that the only appropriate remedy would be a remand for additional proceedings consistent with correction of the errors found by the Court. In any event, Defendant maintains that no violation has occurred here, and no remedy is appropriate. 9 Consistent with OFAC’s regulations Plaintiff’s funds are also accruing interest while the blocking measure is in place. See 31 C.F.R. § 594.203.
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and “imminent” harm could occur while this case is decided in the normal course, or why that
harm is irreparable, and Plaintiff submits no evidence whatsoever in support of its allegations.
The only “informational” remedy sought is disclosure of the information on which the blocking
was based. See id. at 1 (seeking disclosure of “all individuals and entities whose involvement with
the transaction justified blocking the transaction and why”; and seeking disclosure of “the
unclassified facts supporting OFAC’s decision and an unclassified summary of the classified facts
supporting its decision.”). If the Court were to determine that disclosure of additional information
is warranted following adjudication of the merits of this action, the Court could remand to the
agency with instructions to make additional disclosures (or unblock if disclosure is not possible).
Plaintiff has identified no harm that would occur in the interim.
Plaintiff also makes a passing reference to “legal fees” incurred as a result of the blocking.
Pl.’s PI Mot. at 12. But Plaintiff submits no evidence in support of that allegation, and it does not
explain why two license applications could have generated such fees. In any event, the “rule
against economic losses constituting irreparable harm applies with full force to litigation expenses”
and “[l]itigation costs cannot constitute an irreparable injury for the purposes of granting a
preliminary injunction.” Mdewakanton Sioux Indians of Minnesota v. Zinke, 255 F. Supp. 3d 48
(D.D.C. 2017); see also Live365, Inc. v. Copyright Royalty Bd., 698 F.Supp.2d 25, 45 (D.D.C.
2010) (noting that “[t]he Supreme Court has held that ‘[m]ere litigation expense, even substantial
and unrecoupable cost, does not constitute irreparable injury,’ ” even when those costs “are likely
to be substantial” (quoting F.T.C. v. Standard Oil Co., 449 U.S. 232, 244 (1980)).
Finally, Plaintiff’s delay is seeking preliminary injunctive relief militates against a finding
of irreparable harm. Courts in this jurisdiction have found that “[a]n unexcused delay in seeking
extraordinary injunctive relief may be grounds for denial because such delay implies a lack of
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urgency and irreparable harm.” Newdow v. Bush, 355 F. Supp. 2d 265, 292 (D.D.C. 2005); Dallas
Safari Club, 2020 WL 1809181, at *7 (D.D.C. Apr. 9, 2020). The D.C. Circuit has held that a
delay of forty-four days before bringing action for injunctive relief was “inexcusable,” and
“bolstered” the “conclusion that an injunction should not issue,” particularly where the party
seeking an injunction had knowledge of the pending nature of the alleged irreparable harm. Fund
for Animals v. Frizzell, 530 F.2d 982, 987 (D.C. Cir. 1975). Here, the funds at issue have been
blocked since at least 2016, and the first license application was denied in May 2017. See generally
Compl.
For all of the above reasons, Plaintiff has not demonstrated a likelihood of irreparable harm,
and the motion should be denied on that basis alone.
III. THE BALANCE OF THE EQUITIES WEIGHS HEAVILY AGAINST ISSUING INJUNCTIVE RELIEF
The final two factors—the balance of equities and the public interest—merge where, as
here, “the Government is the opposing party.” Trump v. Comm. on Oversight & Reform of U.S.
House of Representatives, 380 F. Supp. 3d 76, 105 (D.D.C.) (quoting Nken v. Holder, 556 U.S.
418, 435 (2009)); see also Pursuing Am.’s Greatness v. FEC, 831 F.3d 500, 511 (D.C. Cir. 2016)
(Government’s “harm and the public interest are one and the same, because the government’s
interest is the public interest”).
Here, these factors manifestly favor the government. First, OFAC has issued a
determination on Plaintiff’s latest (and second) request for a license to release the blocked funds.
See 6/12/20 License Denial. That decision may not be to Plaintiff’s liking, but it has been issued.
Second, to the extent Plaintiff regards the agency’s decision as unlawful or deficient, the proper
remedy is for a dispositive motion briefing schedule that includes the production of an
Administrative Record. See Local Rule 7(n). Indeed, at this point Plaintiff’s preliminary
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injunction is a solution in search of a problem: the only actual “emergency” relief sought has been
granted, and the APA and this Court’s Local Rules provide a standard process to adjudicate
Plaintiff’s claims. There is no basis for Plaintiff to seek an injunction now that would provide it
relief in excess of what it seeks in its Complaint. Such an injunction, which would alter the status
quo and mandate action by OFAC, lacks any basis in supporting case law. Virtually all the cases
Plaintiff cite involve matters in which the parties had filed cross-motions for summary judgment,
involve out-of-Circuit precedent outweighed by rulings of the D.C. Circuit and other decisions
from this District; or present otherwise distinguishing factual circumstances.10
Moreover, there are strong public interests supporting OFAC’s refusal to issue a license
for these funds. “Blocking orders are an important component of U.S. foreign policy, and the
President’s choice of this tool to combat terrorism is entitled to particular deference.” Holy Land
Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 84 (D.D.C. 2002) (“Holy Land I”) aff’d,
333 F.3d 156 (D.C. Cir. 2003). As the Supreme Court has explained, IEEPA grants the President
broad authority during times of war or declared national emergencies to “investigate, regulate, . .
. prevent or prohibit . . . transactions involving . . . any property in which any foreign country or a
national thereof has any interest.” See, e.g., Dames & Moore, 453 U.S. at 663 n.2 (quoting 50
U.S.C. § 1702(a)(1)(B)). For decades, courts have consistently accorded uniquely broad deference
to sanctions programs and actions under both IEEPA and TWEA.
10 See, e.g., Al Haramain, 686 F.3d at 974, 976 (decision issued after parties’ cross-motions for summary judgment; decision is from the Ninth Circuit; plaintiff was a U.S. charitable organization; plaintiff also alleged Fourth Amendment seizure of physical property located inside the U.S.; co-plaintiff claimed constitutional harms emanating from First Amendment restrictions as well as the blocking of funds); KindHearts, 647 F. Supp. 2d at 870, 904 (decision issued after parties’ cross-motions for summary judgment; decision is from the S.D. Ohio; plaintiff was a U.S. charitable organization; and claimed constitutional harms emanating from Fourth Amendment seizure of physical property within the United States).
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Even if, as Plaintiff contends, any SDGT interests were not “readily apparent,” see ECF
No. 1-1 at 1, that is not a basis for relief under IEEPA. In enacting IEEPA, Congress expressly
contemplated that some third-parties, innocent, unwitting, or otherwise, would be adversely
affected by the blocking of funds where a sanctioned party has an interest. IEEPA, E.O. 13224,
and the GTSR do not require a showing of scienter for assets to be blocked. Cf. Islamic Am. Relief
Agency. v. Gonzales, 477 F.3d 728, 737 (D.C. Cir. 2007) (holding that the government need not
show intent to use funds to aid unlawful activity to block funds); Al Haramain, 686 F.3d at 980
(“Civil penalties attach even for unwitting violations.” (citing 50 U.S.C. § 1705(b))). There is no
exception to the operation of the U.S. sanctions programs for purportedly innocent participants,
and no injunction can issue on that basis.
Finally, even if Plaintiff was correct that OFAC’s decision was unlawful or lacked factual
support, the proper remedy would be a remand to the agency—not an injunction requiring the
agency to do as Plaintiff commands. See Zevallos, 793 F.3d at 115 (“Even if Zevallos proved a
procedural error sufficient to invalidate Treasury’s decision, at most we would vacate Treasury’s
determination and remand for Treasury to rule again.”); see N. Air Cargo v. U.S. Postal Serv., 674
F.3d 852, 861 (D.C. Cir. 2012) (“When a district court reverses agency action and determines that
the agency acted unlawfully, ordinarily the appropriate course is simply to identify a legal error
and then remand to the agency, because the role of the district court in such situations is to act as
an appellate tribunal.”). The Court should reject Plaintiff’s motion and allow the parties to
proceed, as in the ordinary course, to briefing dispositive motions on the basis of an administrative
record. See Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985).
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CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Injunctive Relief or in the Alternative
for Mandamus should be denied.
Date: June 19, 2020 Respectfully submitted,
JOSEPH H. HUNT Assistant Attorney General Civil Division
DIANE KELLEHER Assistant Branch Director
/s/
NATHAN SWINTON Senior Trial Counsel U.S. Department of Justice Civil Division, Federal Programs Branch 1100 L Street NW Washington, DC 20005 (202) 305-7667 [email protected]
Counsel for Defendants
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