Al Haramain Islamic Foundation, Inc. v. US Department of Treasury , 660 F.3d 1019 ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AL HARAMAIN ISLAMIC FOUNDATION, 
INC., aka Al-Haramain Islamic
Foundation, Inc.; and
MULTICULTURAL ASSOCIATION OF
SOUTHERN OREGON,
No. 10-35032
Plaintiffs-Appellants,
D.C. No.
v.
UNITED STATES DEPARTMENT OF THE  3:07-cv-01155-KI
ORDER AND
TREASURY; TIMOTHY GEITHNER;
AMENDED
OFFICE OF FOREIGN ASSETS
OPINION
CONTROL; ADAM J. SZUBIN; UNITED
STATES DEPARTMENT OF JUSTICE;
and ERIC H. HOLDER JR., Attorney
General,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Oregon
Garr M. King, Senior District Judge, Presiding
Argued and Submitted
March 9, 2011—Portland, Oregon
Filed September 23, 2011
Amended February 27, 2012
Before: Dorothy W. Nelson, Sidney R. Thomas, and
Susan P. Graber, Circuit Judges.
Opinion by Judge Graber
2029
2034 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
COUNSEL
David D. Cole, Georgetown University Law Center, Wash-
ington, D.C., Amanda Shanor, Georgetown University, Lynne
Bernabei and Alan Kabat, Bernabei & Wachtel, PLLC, Wash-
ington, D.C., Thomas H. Nelson, Thomas H. Nelson & Asso-
ciates, Welches, Oregon, and J. Ashlee Albies, Creighton &
Rose, P.C., Portland, Oregon, for the plaintiffs-appellants.
Douglas N. Letter and Michael P. Abate, Civil Division,
United States Department of Justice, Washington, D.C., for
the defendants-appellees.
ORDER
The opinion filed September 23, 2011, is amended as fol-
lows:
On slip opinion page 18090, lines 8-12, delete the two sen-
tences beginning: “In any event . . . .”
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2035
On slip opinion page 18093, line 5, add the following foot-
note after “unreasonable seizures”:
In its petition for rehearing, OFAC raises interest-
ing arguments about issues that we need not, and do
not, decide. We address only the facts of this case:
OFAC’s seizure of assets as a result of its designa-
tion order of a United States entity located within the
United States. We do not address the requirements
under the Fourth Amendment for other situations
including, for example, designations of foreign enti-
ties or designations by executive order. We also
make clear that our holding concerns OFAC’s origi-
nal designation order only; we do not address
whether a warrant is required for subsequent orders.
Finally, we note that a designation order need not
specify all details of every asset to meet the Fourth
Amendment’s particularity requirement. Cf. United
States v. Petti, 973 F.2d 1441, 1444-45 (9th Cir.
1992) (holding that a “ ‘roving’ wiretap surveil-
lance” warrant meets the Fourth Amendment’s par-
ticularity requirement).
With these amendments, the panel has voted to deny the
petition for rehearing. Judges Thomas and Graber have voted
to deny the petition for rehearing en banc, and Judge Nelson
has so recommended.
The full court has been advised of the petition for rehearing
en banc, and no judge of the court has requested a vote on it.
The petition for rehearing and petition for rehearing en
banc are DENIED. No further petitions for rehearing or peti-
tions for rehearing en banc shall be entertained.
2036 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
OPINION
GRABER, Circuit Judge:
Plaintiff Al Haramain Islamic Foundation, Oregon (“AHIF-
Oregon”), is a non-profit organization, incorporated in Ore-
gon, whose stated purpose is to promote greater understand-
ing of Islam. The United States government suspected AHIF-
Oregon of supporting terrorism. In 2004, the Office of For-
eign Assets Control (“OFAC”), a part of the United States
Department of the Treasury, froze AHIF-Oregon’s assets and
designated AHIF-Oregon as a “specially designated global
terrorist” pursuant to Executive Order (“EO”) No. 13,224.
President George W. Bush had issued EO 13,224 pursuant to
the International Emergency Economic Powers Act
(“IEEPA”), 50 U.S.C. §§ 1701-1707, in the wake of the
events of September 11, 2001.
AHIF-Oregon eventually filed this action, asserting that
OFAC has violated a variety of its statutory and constitutional
rights. Plaintiff Multicultural Association of Southern Oregon,
which the government has not accused of supporting terror-
ism, challenges certain laws that bar it from providing ser-
vices to designated entities such as AHIF-Oregon. With the
exception of one claim not at issue on appeal, the district
court granted summary judgment to OFAC.
On appeal, we affirm in part, reverse in part, and remand.
We affirm the district court’s ruling that substantial evidence
supports OFAC’s redesignation of AHIF-Oregon as a spe-
cially designated global terrorist, and we affirm the district
court’s rejection of AHIF-Oregon’s due process claims. We
reverse the district court’s rejection of AHIF-Oregon’s Fourth
Amendment claim and remand for the district court to deter-
mine what judicial relief, if any, is available. Finally, we
reverse the district court’s dismissal of Plaintiffs’ First
Amendment claim.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2037
FACTUAL AND PROCEDURAL HISTORY
AHIF-Oregon incorporated as a non-profit public benefit
corporation under Oregon law in 1999. AHIF-Oregon
describes itself as “an Oregon non-profit charitable organiza-
tion that seeks to promote greater understanding of the
Islamic religion through operating prayer houses, distributing
religious publications, and engaging in other charitable activi-
ties.” It maintains headquarters in Ashland, Oregon, where it
formerly owned and operated a prayer house. Its primary
activities appear to have taken place in Oregon, though it also
was a partial owner of a prayer house in Springfield, Mis-
souri, and conducted some activities there and abroad.
AHIF-Oregon is not the only organization with the name
“Al Haramain Islamic Foundation.” At the time of its incorpo-
ration, organizations with that name existed in dozens of other
countries. One of the largest, if not the largest, was AHIF-
Saudi Arabia, which had an annual budget of between $30
million and $80 million. Like AHIF-Oregon, AHIF-Saudi
Arabia described itself as a charitable organization. AHIF-
Saudi Arabia dissolved in June 2004.
The two organizations, AHIF-Oregon and AHIF-Saudi
Arabia, shared some leaders in common. In particular, Saudi
nationals Aqeel Al-Aqil and Soliman Al-Buthe1 both held
leadership roles in the two organizations. Al-Aqil founded
AHIF-Saudi Arabia and reportedly led that organization dur-
ing much of its existence. He also founded AHIF-Oregon,
along with Al-Buthe and two other persons, and served as
president of that organization until he resigned in March
2003. Al-Buthe was a senior official of AHIF-Saudi Arabia,
where he was primarily responsible for its internet and chari-
1
The names of some persons mentioned in this opinion have several
alternate spellings. Consistent with the parties’ and the district court’s
treatment, we use only one spelling. When quoting documents, we have
substituted the chosen spelling without notation.
2038 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
table works in the United States. Al-Buthe resigned from
AHIF-Saudi Arabia in September 2002. Like Al-Aqil, Al-
Buthe was a founding member of the board of directors of
AHIF-Oregon. Unlike Al-Aqil, Al-Buthe has not resigned
from AHIF-Oregon; Al-Buthe maintains a position on the
board to this day.
Shortly after the events of September 11, 2001, President
Bush exercised his authority under the IEEPA by issuing EO
13,224. 66 Fed. Reg. 49,079 (Sept. 23, 2001). Under the
IEEPA, the President may, in specified ways, “deal with any
unusual and extraordinary threat, which has its source in
whole or substantial part outside the United States, to the
national security, foreign policy, or economy of the United
States, if the President declares a national emergency with
respect to such threat.” 50 U.S.C. § 1701(a). Relevant here,
the President may
(B) investigate, block during the pendency of an
investigation, regulate, direct and compel, nullify,
void, prevent or prohibit, any acquisition, holding,
withholding, use, transfer, withdrawal, transporta-
tion, 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 prop-
erty, subject to the jurisdiction of the United States[.]
Id. § 1702(a)(1)(B). A person who violates the IEEPA is sub-
ject to civil penalties and, for willful violations, criminal pen-
alties, including a fine up to $1 million and imprisonment for
up to 20 years. Id. § 1705.2
2
The IEEPA also authorizes the President to issue regulations. 50
U.S.C. § 1704. Pursuant to that authority, OFAC has issued regulations
governing blocked property. 31 C.F.R. §§ 501.801-.808. With one excep-
tion at section 501.807, the regulations do not describe the designation
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2039
In the Executive Order, the President declared that the
“September 11, 2001, acts . . . constitute an unusual and
extraordinary threat to the national security, foreign policy,
and economy of the United States.” EO 13,224 pmbl. The
Order “blocked” “all property and interests in property” of 27
persons designated by the Order, and it delegated to the speci-
fied agency head the authority to designate other persons with
substantial connections to terrorist activities and organiza-
tions. Id. § 1. Specifically, Section 1 of the Order states that
all property and interests in property of the following
persons that are in the United States or that hereafter
come within the United States, or that hereafter
come within the possession or control of United
States persons are blocked:
(a) foreign persons listed in the Annex to this
order;
(b) foreign persons determined by the Secretary of
State, in consultation with the Secretary of the Trea-
sury and the Attorney General, to have committed,
or to pose a significant risk of committing, acts of
terrorism that threaten the security of U.S. nationals
process or appeals from designations. Section 501.807 states that “[a] per-
son may seek administrative reconsideration of his, her or its designation
. . . or assert that the circumstances resulting in the designation no longer
apply, and thus seek to have the designation rescinded.” The regulation
states that OFAC will review all submitted information and “may request
clarifying, corroborating, or other additional information.” Id.
§ 501.807(b). “A blocked person seeking unblocking . . . may request a
meeting” with OFAC, but “such meetings are not required,” and OFAC
may decline such a request “at its discretion.” Id. § 501.807(c). “After
[OFAC] has conducted a review of the request for reconsideration, it will
provide a written decision to the blocked person.” Id. § 501.807(d). The
regulation provides no time frame for OFAC’s decision on reconsidera-
tion.
2040 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
or the national security, foreign policy, or economy
of the United States;
(c) persons determined by the Secretary of the
Treasury, in consultation with the Secretary of State
and the Attorney General, to be owned or controlled
by, or to act for or on behalf of those persons listed
in the Annex to this order or those persons deter-
mined to be subject to subsection 1(b), 1(c), or
1(d)(i) of this order;
(d) except as provided in section 5 of this order
and after such consultation, if any, with foreign
authorities as the Secretary of State, in consultation
with the Secretary of the Treasury and the Attorney
General, deems appropriate in the exercise of [her]
discretion, persons determined by the Secretary of
the Treasury, in consultation with the Secretary of
State and the Attorney General;
(i) to assist in, sponsor, or provide financial, mate-
rial, or technological support for, or financial or
other services to or in support of, such acts of terror-
ism or those persons listed in the Annex to this order
or determined to be subject to this order; or
(ii) to be otherwise associated with those persons
listed in the Annex to this order or those persons
determined to be subject to subsection 1(b), 1(c), or
1(d)(i) of this order.
The 27 persons and entities specifically listed in the Annex
did not include Al-Aqil, Al-Buthe, or any AHIF organization.3
Id. at annex.
3
In 2002, President Bush amended EO 13,224 to add one entity and one
person, neither of which relates to this case. Exec. Order No. 13,268, 67
Fed. Reg. 44,751 (July 2, 2002).
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2041
In the years following the issuance of EO 13,224, OFAC
periodically designated new persons and entities.4 Relevant
here, by February 1, 2004, OFAC had designated AHIF orga-
nizations in six countries: Somalia, Bosnia, Indonesia, Kenya,
Tanzania, and Pakistan. But OFAC had not designated AHIF-
Oregon, AHIF-Saudi Arabia, or any AHIF organization other
than those six in the countries just listed.
On February 18, 2004, federal and state officials executed
a search warrant at AHIF-Oregon’s Ashland office. The
search warrant concerned investigations into possible criminal
violations of tax, banking, and money-laundering laws.
Agents found, among other things, photographs and other
documents related to violence in Chechnya.
The next day, February 19, 2004, OFAC issued a press
release stating that it had blocked AHIF-Oregon’s assets
pending an investigation concerning the potential designation
of AHIF-Oregon under EO 13,224.5 The press release did not
state reasons for the investigation. OFAC did not provide
prior notice to AHIF-Oregon before blocking its assets, and
OFAC did not obtain a warrant to block the assets.
In the months following that press release, OFAC and
AHIF-Oregon exchanged voluminous documents on a range
of topics. At the request of OFAC, AHIF-Oregon submitted
a copy of a Koran that AHIF-Oregon previously had distrib-
uted to prisoners and others. The Koran was the only item
specifically requested by OFAC.
4
For simplicity, we will refer to persons and entities designated by the
President or OFAC under EO 13,224 as “designated persons” or “desig-
nated entities.” We intend these terms to have the same meaning as the
phrase “specially designated global terrorists.”
5
The government states that approximately $20,310 of AHIF-Oregon’s
assets have been blocked, but AHIF-Oregon counters that that figure does
not include $440,000 in proceeds from the sale of the Ashland property.
We need not resolve those competing claims; the amount of blocked assets
is not material to the issues on appeal.
2042 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
The bulk of the exchange concerned AHIF-Oregon’s possi-
ble connections to Chechen terrorism in Russia. The dispute
centers on a donation in 2000 by AHIF-Oregon to AHIF-
Saudi Arabia of more than $150,000. AHIF-Oregon concedes
that it made the donation but strenuously argues that it was
intended to be used, and in fact was used, for humanitarian
relief in Chechnya. The donation originated from an Egyptian
national who apparently wished to funnel the money through
AHIF-Oregon. AHIF-Oregon received the funds and then
transferred them to AHIF-Saudi Arabia.
In June 2004, while OFAC’s investigation of AHIF-Oregon
continued, two important events occurred. First, AHIF-Saudi
Arabia dissolved. OFAC had not designated AHIF-Saudi Ara-
bia under EO 13,224 or otherwise as a terrorist organization.
Second, OFAC designated Al-Aqil as a specially designated
global terrorist. At the time, though, Al-Aqil no longer had an
official connection to AHIF-Oregon; he had resigned from
AHIF-Oregon’s board in March 2003.
On September 9, 2004, OFAC issued a press release declar-
ing that it had designated AHIF-Oregon. The press release
also stated that OFAC had designated Al-Buthe, even though
OFAC had not advised Al-Buthe of any investigation of him.
The press release read, in part:
The investigation shows direct links between the
U.S. branch and Usama bin Laden. In addition, the
affidavit alleges the U.S. branch of [AHIF] crimi-
nally violated tax laws and engaged in other money
laundering offenses. Information shows that individ-
uals associated with the branch tried to conceal the
movement of funds intended for Chechnya by omit-
ting them from tax returns and mischaracterizing
their use, which they claimed was for the purchase
of a prayer house in Springfield, Missouri.
Other information available to the U.S. shows that
funds that were donated to [AHIF-Oregon] with the
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2043
intention of supporting Chechen refugees were
diverted to support mujahideen, as well as Chechen
leaders affiliated with the al Qaida network.
One week later, on September 16, 2004, OFAC sent a letter
to AHIF-Oregon entitled “BLOCKING NOTICE.” The letter
provided: “You are hereby notified that pursuant to [Execu-
tive Order No. 13,224] and under the authorities granted by
IEEPA, OFAC has determined that [AHIF-Oregon] is an
entity that falls within the criteria for designation set forth in
the Order at § 1(c), (d). Accordingly, [AHIF-Oregon] is
hereby designated as a Specially Designated Global Terrorist
pursuant to the Order.” The letter described the legal conse-
quences of the designation, including the blocking of all
assets, and warned the organization of the civil and criminal
penalties for violations of the IEEPA. The letter concluded
that AHIF-Oregon could request administrative reconsidera-
tion pursuant to 31 C.F.R. § 501.807.
In early 2005, AHIF-Oregon submitted additional docu-
ments for the administrative record and requested administra-
tive reconsideration. In the letter, AHIF-Oregon asserted that
it had no connection to terrorism and provided a detailed
explanation concerning certain subjects, including the Chec-
hen donation. In the many months following its request for
administrative reconsideration, AHIF-Oregon repeatedly
sought both an explanation for the designation and a final
determination of its request for administrative reconsidera-
tion. Like AHIF-Oregon, Al-Buthe requested administrative
reconsideration of OFAC’s designation of him.
Having received no response to its 2005 request for admin-
istrative reconsideration, AHIF-Oregon filed this action in
August 2007. AHIF-Oregon brought a substantive challenge
to the designation and several procedural challenges. As to the
latter, AHIF-Oregon argued that OFAC’s use of classified
information violated its due process rights, that OFAC’s
refusal to provide reasons for the investigation and designa-
2044 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
tion violated its due process rights, and that OFAC’s failure
to obtain a warrant before seizing its assets violated the
Fourth Amendment.
Three months after AHIF-Oregon filed its complaint, in
November 2007, OFAC sent a letter to AHIF-Oregon and Al-
Buthe notifying them of OFAC’s provisional intent to “rede-
signate” them and offering a final chance to submit documen-
tation. The parties again exchanged many documents,
including nearly 1,000 pages of material submitted by AHIF-
Oregon.
On February 6, 2008, OFAC sent AHIF-Oregon and Al-
Buthe a letter stating that, “after a thorough investigation and
review of the evidence in the record regarding AHIF-Oregon
and Mr. Al-Buthe, OFAC has determined that AHIF-Oregon
and Mr. Al-Buthe continue to meet the criteria for designa-
tion.” The letter specified three reasons for redesignating
AHIF-Oregon: “(1) being owned or controlled by [designated
persons] Aqeel Al-Aqil and Al-Buthe, (2) acting for or on
behalf of [designated persons] Al-Aqil and Al-Buthe, and (3)
supporting and operating as a branch office of AHIF, an inter-
national charity that employed its branch offices to provide
financial, material, and other services and support to al Qaida
and other [designated persons].”
In a memorandum dated the same day, OFAC explained, in
more detail, its reasons for redesignating AHIF-Oregon.
Much of the document is redacted, but its unredacted conclu-
sions are the same as the ones stated in the letter:
AH[I]F-Oregon should be determined to be sub-
ject to Executive Order 13,224 for the following rea-
sons: [1] AH[I]F-Oregon has been owned or
controlled by, or has acted for or on behalf of Al-
Aqil; [2] AH[I]F-Oregon has been owned or con-
trolled by, or has acted for or on behalf of Al-Buthe;
[3] As a branch of the Saudi charity Al-Haramain
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2045
Islamic Foundation, AH[I]F-Oregon has acted for or
on behalf of, or has assisted in, sponsored, or pro-
vided financial, material, or technological support
for, or financial or other services to or in support of
Al Qaida and other [designated persons].
(Emphasis omitted.) Four months later, on June 19, 2008,
OFAC designated “the world-wide organization of AHIF.”
In this action, the district court granted summary judgment
to OFAC on all of AHIF-Oregon’s claims. The court held that
substantial evidence did not support OFAC’s determination
that Al-Aqil owned or controlled AHIF-Oregon at the time of
redesignation. But the court found that substantial evidence
did support OFAC’s other two reasons: that Al-Buthe owned
or controlled AHIF-Oregon and that AHIF-Oregon supported
designated persons as a branch office of AHIF-Saudi Arabia.
With respect to the procedural challenges, the district court
rejected AHIF-Oregon’s argument that OFAC cannot rely on
classified information in making its designation determina-
tions. The district court next held that OFAC violated AHIF-
Oregon’s procedural due process rights by failing to provide
notice and a meaningful opportunity to respond. But the dis-
trict court held that the violation was harmless because, even
if AHIF-Oregon properly had been informed of OFAC’s rea-
sons for suspicion, AHIF-Oregon could not have avoided the
redesignation. Finally, the district court held that the blocking
of assets is a “seizure” for purposes of the Fourth Amend-
ment. But the court held that OFAC’s actions fell within the
“special needs” exception to the warrant requirement.
The second named plaintiff in this action is Multicultural
Association of Southern Oregon (“MCASO”). MCASO
describes itself as “an Oregon public benefit corporation with
members, incorporated in 1995 and operating in Medford,
[Oregon, as] a non-profit 501(c)(3) organization.” “MCASO’s
objectives include serving as a catalyst in the southern Oregon
2046 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
community to promote understanding and appreciation
between cultures in order to reduce racism, promote and sup-
port multicultural education, and provide forums for problem
solving related to intercultural differences.” Before the desig-
nation of AHIF-Oregon, MCASO had co-sponsored events
with AHIF-Oregon. MCASO alleged that it would continue to
co-sponsor events and conduct other activities in coordination
with AHIF-Oregon, were it not for AHIF-Oregon’s designa-
tion. MCASO asserts that EO 13,224 and its implementing
regulations are unconstitutionally vague and overbroad and
that they violate MCASO’s First and Fifth Amendment rights
by prohibiting it from working with AHIF-Oregon.6 With one
exception concerning a claim not before us on appeal,7 the
district court rejected MCASO’s claims and granted summary
judgment to OFAC.
AHIF-Oregon and MCASO timely appeal.
STANDARDS OF REVIEW
We review de novo the district court’s decision on cross-
motions for summary judgment. Trunk v. City of San Diego,
629 F.3d 1099, 1105 (9th Cir. 2011). “We review de novo
questions of law, including constitutional rulings, resolved on
summary judgment.” Nader v. Cronin, 620 F.3d 1214, 1216
(9th Cir. 2010) (per curiam), cert. denied, 131 S. Ct. 1844(2011). We review for clear error the district court’s factual
findings. Sapp v. Kimbrell, 623 F.3d 813, 821 (9th Cir. 2010).
The judicial review provisions of the Administrative Proce-
dure Act (“APA”), 5 U.S.C. § 706(2)(A), govern challenges
to OFAC’s designation decisions. See Alaska Dep’t of Envtl.
Conservation v. EPA, 540 U.S. 461, 496-97 & n.18 (2004)
6
AHIF-Oregon also joins in these causes of action but, for simplicity,
we refer to these claims as MCASO’s claims.
7
The government originally cross-appealed but soon after filed a motion
to dismiss the cross-appeal, which we granted.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2047
(holding that, when considering an agency action as to which
the statute does not specify the standard of review, the courts
of appeals must proceed pursuant to the APA’s general stan-
dard of review for agency actions in 5 U.S.C. § 706(2)(A));
see also Vigil v. Leavitt, 381 F.3d 826, 833 (9th Cir. 2004)
(describing Alaska Dep’t of Envtl. Conservation’s applica-
tion); accord Holy Land Found. for Relief & Dev. v. Ashcroft,
333 F.3d 156, 162 (D.C. Cir. 2003). Accordingly, we may set
aside OFAC’s designation only if it is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). Under that standard, we review
for substantial evidence the agency’s factual findings. Alaska
Dep’t of Health & Soc. Servs. v. Ctrs. for Medicare & Medic-
aid Servs., 424 F.3d 931, 937 (9th Cir. 2005).
DISCUSSION
A. Substantive Challenge to the Redesignation
OFAC supported its 2008 redesignation of AHIF-Oregon
on three grounds: (1) that AHIF-Oregon is owned or con-
trolled by Al-Aqil; (2) that AHIF-Oregon is owned or con-
trolled by Al-Buthe; and (3) that AHIF-Oregon provided
support to al Qaida and other designated persons as a branch
office of AHIF-Saudi Arabia. AHIF-Oregon argues under the
APA that substantial evidence does not support those reasons.
Like the district court, we conclude that substantial evidence
supports the last two reasons, but not the first. We address
them in turn, below.
Before doing so, however, we note that AHIF-Oregon also
describes its APA challenge in two other ways. First, AHIF-
Oregon argues that OFAC reached its decision without afford-
ing AHIF-Oregon a meaningful opportunity to respond and
thus violated the APA. We occasionally have held that an
agency’s prejudicial procedural failure violates the APA and,
accordingly, have remanded to the agency for reconsideration.
See, e.g., Asarco, Inc. v. EPA, 616 F.2d 1153, 1162 (9th Cir.
2048 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
1980) (citing Bowman Transp., Inc. v. Ark.-Best Freight Sys.,
Inc., 419 U.S. 281, 288 n.4 (1974)). But the genesis of that
rule appears to be the Due Process Clause, rather than a sepa-
rate statutory grant of procedural rights. See Bowman Transp.,
419 U.S. at 288 n.4 (“Indeed, the Due Process Clause forbids
an agency to use evidence in a way that forecloses an oppor-
tunity to offer a contrary presentation.”). In any event, AHIF-
Oregon does not argue with any specificity that its procedural
objections under the APA are any different from its identical
objections under the Due Process Clause. We address its due
process claim concerning inadequate notice in Part B-2,
below.
Second, AHIF-Oregon argues that OFAC lacked “authori-
zation” to redesignate AHIF-Oregon. We disagree. The regu-
lations clearly contemplate administrative reconsideration, 31
C.F.R. § 501.807; indeed, OFAC issued its redesignation
decision at AHIF-Oregon’s specific request under the regula-
tions. Just as OFAC has authority to designate an entity, it
likewise has the authority to respond to that entity’s request
for reconsideration, including with updated reasons.
It appears that AHIF-Oregon’s primary point is that
OFAC’s 2008 reasons actually are a post-hoc rationalization
for its original 2004 designation and that AHIF-Oregon had
no earlier notice of the reasons OFAC eventually gave in
2008. As with the previous argument, we see no difference
between this argument and AHIF-Oregon’s procedural due
process claim concerning inadequate notice, which we ana-
lyze below, in Part B-2. We turn, then, to our review of
OFAC’s three stated reasons and assess whether substantial
evidence supports its designation of AHIF-Oregon as a spe-
cially designated global terrorist.
1. Ownership or Control by Al-Aqil
[1] Al-Aqil was a founding member of AHIF-Oregon. The
organization’s 2001 tax return described Al-Aqil as the orga-
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2049
nization’s president. But he resigned from AHIF-Oregon’s
board in March 2003. OFAC did not take any action against
AHIF-Oregon until almost a year later, in February 2004,
when it provisionally blocked its funds pending investigation.
Having reviewed the record, we agree with the district court
that “[t]here is no evidence Al-Aqil was involved with AHIF-
Oregon after his resignation, or at the time AHIF-Oregon was
designated.”
2. Ownership or Control by Al-Buthe
[2] Al-Buthe is a designated person. Al-Buthe exercises
control over AHIF-Oregon because he is on its board of direc-
tors. EO 13,224 authorizes the designation of an entity that is
controlled by a designated person. EO 13,224, § 1(c). It is,
therefore, a valid reason to designate AHIF-Oregon based on
Al-Buthe’s control. We agree with the district court that sub-
stantial evidence supports this reason.
AHIF-Oregon makes only two counterarguments. Neither
persuades us. First, AHIF-Oregon asserts that Al-Buthe’s
designation—an undisputed fact—is “unfounded.” But Al-
Buthe did not join this action as a plaintiff or intervenor.
Whether Al-Buthe’s designation is supported by substantial
evidence is simply not before us. A plaintiff cannot collater-
ally attack the designation of a third party. In short, AHIF-
Oregon knowingly retained (and continues to retain) a desig-
nated person on its board of directors.
Second, AHIF-Oregon argues that, because OFAC gave no
reasons for designating Al-Buthe in 2004, AHIF-Oregon and
Al-Buthe reasonably assumed that he was designated not for
an independent reason germane to him, but because of his
connection to AHIF-Oregon. Al-Buthe asserted in a declara-
tion, filed in the district court, that he would have resigned
from the board had he known that the taint flowed from him
to AHIF-Oregon, rather than vice versa.
2050 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
That argument, however, does not challenge the evidence
in the administrative record, on which the agency made its
decision, and on which we must conduct our review. The evi-
dence in the administrative record demonstrates that Al-Buthe
controlled AHIF-Oregon. To the extent that AHIF-Oregon
argues that OFAC violated Al-Buthe’s procedural rights, that
issue is not before us because, as noted, Al-Buthe is not a
party to this action. To the extent that AHIF-Oregon argues
that OFAC violated AHIF-Oregon’s own procedural rights,
that argument is best viewed as part of the procedural due
process claim concerning inadequate notice, discussed in Part
B-2, below.
Moreover, to the extent that we could consider evidence
beyond the administrative record, such as Al-Buthe’s declara-
tion, it remains true that Al-Buthe did not, in fact, resign after
the 2008 redesignation and, so far as the record demonstrates,
remains a board member of AHIF-Oregon. AHIF-Oregon
now has kept on its board of directors a designated person for
more than five years, two years since it has known OFAC’s
reasoning, and that designated person has not challenged
OFAC’s designation before this court. AHIF-Oregon is “con-
trolled by” a designated person. EO 13,224 § 1(c). There is no
basis to set aside the agency action.
3. Support of Al Qaida and Other Designated Persons as
a Branch Office of AHIF-Saudi Arabia
[3] OFAC asserts that AHIF-Oregon is a branch office of
AHIF-Saudi Arabia and that AHIF-Saudi Arabia, through its
other branches and perhaps directly, supported designated
persons. We have no trouble concluding that substantial evi-
dence supports OFAC’s determination that AHIF-Oregon is a
branch office of AHIF-Saudi Arabia and of the worldwide
network of the Al Haramain Islamic Foundation. One obvious
connection is that AHIF-Oregon chose its name to parallel the
Saudi Arabian organization’s name and the names of other
branches. Additionally, three out of four founding members of
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2051
AHIF-Oregon were senior officials of AHIF-Saudi Arabia.
See Islamic Am. Relief Agency (IARA-USA) v. Gonzales, 477
F.3d 728, 734 (D.C. Cir. 2007) (“An entity’s ‘genesis and his-
tory’ may properly be considered by OFAC in making the
designation or blocking, at least where the ties have not been
severed.” (quoting Holy Land, 333 F.3d at 162)). Moreover,
several documents in the record demonstrate that, at times at
least, AHIF-Oregon described itself to others as a branch
office of the larger AHIF organization. Before us, AHIF-
Oregon strenuously objects to OFAC’s characterization of it
as a “branch office” but, given the deferential standard of
review and the evidence just described, we are unmoved. Sub-
stantial evidence supports OFAC’s determination that AHIF-
Oregon is a “branch office” of the larger AHIF organization.
The next question is whether, on this record, the larger
AHIF organization provided support for al Qaida or other des-
ignated persons. That is, the strong connection between
AHIF-Oregon and AHIF-Saudi Arabia does not, by itself,
establish OFAC’s third reason.
At the time of AHIF-Oregon’s designation and redesigna-
tion, OFAC had designated several separate AHIF entities,
but it had not designated AHIF-Saudi Arabia or some of the
additional AHIF branches that were designated later. OFAC
argues that the various designated branches of the global
AHIF organization formed a loose, mutually supportive net-
work such that the designation of other branches substantiates
the designation of AHIF-Oregon.
[4] In addition, OFAC directs us to evidence in the unclas-
sified record of two events that occurred in 1999: AHIF-
Oregon provided direct financial support to AHIF-Albania,
allegedly to abet terrorist activities in Kosovo; and AHIF-
Oregon funneled a large donation to AHIF-Saudi Arabia,
allegedly to abet terrorist activities in Chechnya. Although
AHIF-Oregon claims that the funds were meant to be used,
and in fact were used, for humanitarian efforts and not terror-
2052 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
ist activities, it does acknowledge the underlying facts of
those financial transactions.
Of course, in 1999, there were no designated persons under
EO 13,224 because the President did not issue that Order until
2001. As we just observed, though, in making a decision
whether to designate, OFAC may consider the origin and his-
tory of an entity, at least when the historical ties have not
been severed. IARA-USA, 477 F.3d at 734. And we note that,
when OFAC designated AHIF-Oregon, it already had desig-
nated AHIF-Albania.
[5] In summary, the evidence in the unclassified record
supports OFAC’s contentions that AHIF-Oregon is a branch
office of an international network of entities that, together,
form the global AHIF organization and that AHIF-Oregon has
ties to other branches, including at least one designated entity.
As did the District of Columbia Circuit, “[w]e acknowledge
that the unclassified record evidence is not overwhelming, but
we reiterate that our review—in an area at the intersection of
national security, foreign policy, and administrative law—is
extremely deferential.” Id. Additionally, we have reviewed
the classified record. In light of all the evidence in the record,
we conclude confidently that substantial evidence supports
OFAC’s conclusion that AHIF-Oregon supported designated
persons as a branch office of AHIF-Saudi Arabia. See EO
13,224 § 1(d)(i) (permitting designation of an entity that pro-
vides “financial, material, or technological support for, or
financial or other services to or in support of,” designated per-
sons).
[6] Because substantial evidence supports two of OFAC’s
three reasons for redesignating AHIF-Oregon under EO
13,224, we affirm the district court’s grant of summary judg-
ment to OFAC on AHIF-Oregon’s substantive claims.
B. Procedural Due Process Challenges
[7] AHIF-Oregon argues that OFAC violated its proce-
dural due process rights by using classified information with-
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2053
out any disclosure of its content and by failing to provide
adequate notice and a meaningful opportunity to respond. We
apply the balancing test set forth in Mathews v. Eldridge, 424
U.S. 319 (1976). See California ex rel. Lockyer v. Fed.
Energy Regulatory Comm’n, 329 F.3d 700, 709 n.8 (9th Cir.
2003) (explaining that, for procedural due process claims, the
Mathews test is “a general test that applies in all but a few
contexts”); Nat’l Council of Resistance of Iran v. Dep’t of
State (NCORI), 251 F.3d 192, 208-09 (D.C. Cir. 2001)
(applying the Mathews test in a similar context); Am.-Arab
Anti-Discrimination Comm. v. Reno (ADC), 70 F.3d 1045,
1061 (9th Cir. 1995) (same); see also Hamdi v. Rumsfeld, 542
U.S. 507, 528-29 (2004) (plurality) (holding that the proper
test for balancing national security interests with a person’s
due process rights is the Mathews balancing test). Under the
Mathews balancing test, we “must weigh (1) [the person’s or
entity’s] private property interest, (2) the risk of an erroneous
deprivation of such interest through the procedures used, as
well as the value of additional safeguards, and (3) the Govern-
ment’s interest in maintaining its procedures, including the
burdens of additional procedural requirements.” Foss v. Nat’l
Marine Fisheries Serv., 161 F.3d 584, 589 (9th Cir. 1998)
(citing Mathews, 424 U.S. at 334-35).
[8] There are strong interests on both sides of the scale,
generally encapsulated in the first and third Mathews factors.
The private party’s property interest is significant. By design,
a designation by OFAC completely shutters all domestic oper-
ations of an entity. All assets are frozen. No person or organi-
zation may conduct any business whatsoever with the entity,
other than a very narrow category of actions such as legal
defense. Civil penalties attach even for unwitting violations.
50 U.S.C. § 1705(b). Criminal penalties, including up to 20
years’ imprisonment, attach for willful violations. Id.§ 1705(c). For domestic organizations such as AHIF-Oregon,
a designation means that it conducts no business at all. The
designation is indefinite. Although an entity can seek admin-
istrative reconsideration and limited judicial relief, those rem-
2054 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
edies take considerable time, as evidenced by OFAC’s long
administrative delay in this case and the ordinary delays
inherent in our judicial system. In sum, designation is not a
mere inconvenience or burden on certain property interests;
designation indefinitely renders a domestic organization
financially defunct.
On the other side of the scale, the government’s interest in
national security cannot be understated. We owe unique def-
erence to the executive branch’s determination that we face
“an unusual and extraordinary threat to the national security”
of the United States. EO 13,224 pmbl. It is beyond dispute
that “the Government’s interest in combating terrorism is an
urgent objective of the highest order.” Holder v. Humanitar-
ian Law Project, 130 S. Ct. 2705, 2724 (2010).
Striking a balance between those two strong competing
interests cannot be done in the abstract. As the Mathews bal-
ancing test makes clear, we must carefully assess the precise
“procedures used” by the government, “the value of addi-
tional safeguards,” and “the burdens of additional procedural
requirements.” Foss, 161 F.3d at 589 (citing Mathews, 424
U.S. at 334-35). As explained in more detail below, the Con-
stitution certainly does not require that the government take
actions that would endanger national security; nor does it
require the government to undertake every possible effort to
mitigate the risk of erroneous deprivation and the potential
harm to the private party. But the Constitution does require
that the government take reasonable measures to ensure basic
fairness to the private party and that the government follow
procedures reasonably designed to protect against erroneous
deprivation of the private party’s interests.
1. OFAC’s Use of Classified Information
AHIF-Oregon argues that OFAC’s use of classified infor-
mation violates its procedural due process rights. The first two
Mathews factors support AHIF-Oregon’s position. As noted
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2055
above, its private interests are significant. And, as we have
held previously with respect to the use of classified informa-
tion without disclosure: “One would be hard pressed to design
a procedure more likely to result in erroneous deprivations.”
ADC, 70 F.3d at 1069 (internal quotation marks omitted).
“[T]he very foundation of the adversary process assumes that
use of undisclosed information will violate due process
because of the risk of error.” Id. But the third Mathews factor
—the government’s interest in maintaining national security
—supports OFAC’s position.
[9] Given the extreme importance of maintaining national
security, we cannot accept AHIF-Oregon’s most sweeping
argument—that OFAC is not entitled to use classified infor-
mation in making its designation determination. See generally
Gen. Dynamics Corp. v. United States, 131 S. Ct. 1900, 1905
(2011) (“[P]rotecting our national security sometimes requires
keeping information about our military, intelligence, and dip-
lomatic efforts secret.”). In AHIF-Oregon’s view, if classified
information concerning national security demonstrates that an
entity is supporting terrorism, OFAC either must decline to
designate the entity or must reveal the classified information
to the entity that OFAC believes supports terrorist activities.
Common sense dictates that AHIF-Oregon is overreaching.
Not surprisingly, all federal courts to have considered this
argument have rejected it. Holy Land, 333 F.3d at 164; Global
Relief Found., Inc. v. O’Neill, 315 F.3d 748, 754 (7th Cir.
2002); KindHearts for Charitable Humanitarian Dev., Inc. v.
Geithner (KindHearts II), 710 F. Supp. 2d 637, 660 (N.D.
Ohio 2010); Al-Aqeel v. Paulson, 568 F. Supp. 2d 64, 72
(D.D.C. 2008); see also NCORI, 251 F.3d at 208 (holding
that, in a designation of a “foreign terrorist organization”
under the Antiterrorism and Effective Death Penalty Act of
1996 (“AEDPA”), the government’s use of classified infor-
mation without permitting the organization to view the infor-
mation did not violate the organization’s due process rights);
People’s Mojahedin Org. of Iran v. Dep’t of State, 327 F.3d
1238, 1241-43 (D.C. Cir. 2003) (following NCORI and
2056 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
describing in detail its holding on this point); United States v.
Ott, 827 F.2d 473, 477 (9th Cir. 1987) (holding that, in a mili-
tary criminal trial, the government’s use of classified informa-
tion, without permitting the defendant or his lawyers to view
the information, did not violate the defendant’s due process
rights); cf. Mohamed v. Jeppesen Dataplan, Inc., 614 F.3d
1070 (9th Cir. 2010) (en banc) (affirming the district court’s
dismissal of an action because of the state secrets doctrine in
a case involving classified information), cert. denied, 131 S.
Ct. 2442 (2011); IARA-USA, 477 F.3d 728 (rejecting a chal-
lenge that the agency failed to comply with its regulation, 28
C.F.R. § 17.17(a)(1), which required the agency to determine
which portions of the classified record “can be declassified”).
The only case that could be read to yield the contrary con-
clusion is our decision in ADC, 70 F.3d 1045. There, the gov-
ernment used classified information in summary proceedings
to exclude certain long-time resident aliens. Id. at 1052-54.
The aliens brought suit, alleging that the use of classified
information violated their due process rights. Id. at 1054. The
district court, after viewing the classified information ex parte
and in camera, agreed. Id.Applying the Mathews balancing test, we affirmed. ADC,
70 F.3d at 1068-70. We found that the first two factors
strongly favored the plaintiffs. And, under the facts of that
case, we held that the government’s claims of national secur-
ity were “insufficient to tip the Mathews scale towards the
Government.” Id. at 1070. We reached that conclusion
because of the content of the classified information. Specifi-
cally, the government had argued that the aliens threatened
national security, but the classified information contained
nothing about the aliens themselves; the classified informa-
tion demonstrated only that the aliens were nominal members
of a foreign organization that had engaged in terrorist activi-
ties. Id. at 1069-70. Notably, we stated that “[t]hese aliens
have been free since the beginning of this litigation almost
eight years ago, without criminal charges being brought
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2057
against them for their activities. . . . [The classified evidence]
does not indicate that either alien has personally advocated
those [impermissible] doctrines or has participated in terrorist
activities.” Id. at 1070. We concluded that the use of classi-
fied information “should be presumptively unconstitutional.
Only the most extraordinary circumstances could support one-
sided process.” Id. Because extraordinary circumstances did
not exist in that case, the use of the classified information was
impermissible. Id.[10] AHIF-Oregon argues that ADC is directly on point
and “controls here.” AHIF-Oregon is mistaken. We did not
hold that classified information can never be used. Instead, we
held that such use is “presumptively unconstitutional” subject
to the government’s overcoming the presumption in “the most
extraordinary circumstances.” Id. Even assuming that the
standard enunciated in ADC remains good law,8 the use of
classified information in the fight against terrorism, during a
presidentially declared “national emergency,” qualifies as suf-
ficiently “extraordinary” to overcome the presumption.9 See
8
We express some hesitation about the continuing vitality of ADC, espe-
cially in light of its premise that “a court may not dispose of the merits
of a case on the basis of ex parte, in camera submissions.” 70 F.3d at 1069(internal quotation marks omitted). As we recently explained at great
length sitting en banc, that premise does not hold, at least in some con-
texts. Jeppesen Dataplan, 614 F.3d at 1077 (“One [form of the state
secrets doctrine] completely bars adjudication of claims premised on state
secrets . . . ; the other is an evidentiary privilege . . . that excludes privi-
leged evidence from the case and may result in dismissal of the claims.”
(emphasis omitted)); cf. Gen. Dynamics, 131 S. Ct. at 1905 (“[P]rotecting
our national security sometimes requires keeping information about our
military, intelligence, and diplomatic efforts secret.”). Because we distin-
guish ADC, we need not decide whether ADC remains valid precedent.
See Miller v. Gammie, 335 F.3d 889, 899-900 (9th Cir. 2003) (en banc)
(explaining when a three-judge panel may conclude that an earlier prece-
dent has been fatally undermined).
9
Additionally, our determination in ADC that the government could not
use the classified information depended on the content of the classified
information itself, which the district court had viewed in camera and ex
2058 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
EO 13,224 pmbl. (“[The] September 11, 2001, acts . . . consti-
tute an unusual and extraordinary threat to the national secur-
ity, foreign policy, and economy of the United States . . . .”).
In sum, we join all other courts to have addressed the issue
in holding that, subject to the limitations discussed below, the
government may use classified information, without disclo-
sure, when making designation determinations.
AHIF-Oregon’s more nuanced argument, however, pre-
sents a different question. AHIF-Oregon argues that, even if
OFAC may use classified information, it must undertake
some reasonable measure to mitigate the potential unfairness
to AHIF-Oregon. AHIF-Oregon proffers that OFAC could,
for example, provide an unclassified summary of the classi-
fied information or permit AHIF-Oregon’s lawyer to view the
documents after receiving a security clearance and pursuant to
a protective order. In essence, AHIF-Oregon argues that, to
the extent possible, OFAC must take reasonable measures that
do not implicate national security and impose only a small
burden on the agency.
[11] Under the Mathews test, we must consider “the value
of additional safeguards” against the risk of error and “the
burdens of additional procedural requirements.” Foss, 161
F.3d at 589. The value of AHIF-Oregon’s suggested methods
seems clear. Without disclosure of classified information, the
designated entity cannot possibly know how to respond to
OFAC’s concerns. Without knowledge of a charge, even sim-
ple factual errors may go uncorrected despite potentially easy,
ready, and persuasive explanations. To the extent that an
parte. It is clear from our analysis in ADC that, had the classified informa-
tion demonstrated that the plaintiff-aliens had, in fact, engaged in terror-
ism, then the government’s reliance on the information would have been
permissible. In other words, our decision appears to have agreed with the
premise that the government may use classified information without dis-
closure, if that information truly implicates national security. Here, the
classified information implicates national security.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2059
unclassified summary could provide helpful information, such
as the subject matter of the agency’s concerns, and to the
extent that it is feasible to permit a lawyer with security clear-
ance to view the classified information, the value of those
methods seems undeniable. Indeed, the benefits from such
disclosure could flow not only to the designated entity, which
may be able to clear up errors, but also to OFAC, which may
benefit from the resulting information provided by the desig-
nated entity.
We find significant that there may be means of providing
information to the potential designee that do not implicate
national security. For example, an unclassified summary, by
definition, does not implicate national security because it is
unclassified. Similarly, a lawyer for the designated entity who
has the appropriate security clearance also does not implicate
national security when viewing the classified material
because, by definition, he or she has the appropriate security
clearance.10
[12] We recognize that disclosure may not always be pos-
sible. For example, an unclassified summary may not be pos-
sible because, in some cases, the subject matter itself may be
classified and cannot be revealed without implicating national
security. Depending on the circumstances, OFAC might have
a legitimate interest in shielding the materials even from
someone with the appropriate security clearance. See Ott, 827
F.2d at 477 (holding, in a different context, that “Congress
10
We recognize that the utility of the methods described in text may be
limited. For example, the information conveyed by an unclassified sum-
mary will be decidedly less helpful to the entity than the classified infor-
mation itself. But limited utility is very different from no utility. An
unclassified summary is analogous to privilege logs in the context of dis-
covery disputes, yet their use is routine. See Fed. R. Civ. P. 26(b)(5); see
also MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 505 (9th Cir. 1986)
(holding that, on a motion for attorney fees, the requesting party must dis-
close its time sheets to the other party, redacted as necessary where pro-
tected by the attorney-client privilege).
2060 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
has a legitimate interest in authorizing the Attorney General
to invoke procedures designed to ensure that sensitive security
information is not unnecessarily disseminated to anyone not
involved in the surveillance operation in question, whether or
not she happens for unrelated reasons to enjoy security clear-
ance”); see also Gen. Dynamics, 131 S. Ct. at 1904 (noting
that disclosure of sensitive information to a limited number of
lawyers led to “unauthorized disclosure of military secrets”).
In many cases, though, some information could be summa-
rized or presented to a lawyer with a security clearance with-
out implicating national security.
Indeed, OFAC has not defended its failure to provide an
unclassified summary or access by a lawyer with the proper
security clearance on the ground that any such measure would
have implicated national security. Instead, OFAC asserts that
any mechanism would be unduly burdensome. OFAC points
to the large number of designated persons and argues that any
of the proposed measures could overwhelm the agency,
diminishing its ability to carry out its important mission of
protecting national security.
We acknowledge the agency’s abstract concerns but find
that they have little practical reality. Here, for instance, OFAC
eventually presented a list of unclassified reasons to AHIF-
Oregon, which could have been augmented by a short unclas-
sified summary of classified evidence. The small expenditure
in time and resources would not outweigh the entity’s interest
in knowing the charges and evidence against it. In fact, OFAC
has provided just such a summary in a different case. See
KindHearts for Charitable Humanitarian Dev., Inc. v. Geith-
ner (KindHearts I), 647 F. Supp. 2d 857, 868 (N.D. Ohio
2009) (noting that OFAC had provided “an unclassified three-
page summary of the classified evidence” to the entity under
investigation).
[13] We understand from the parties that many (and likely
most) of the designated persons are not United States citizens
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2061
or entities. That conclusion is unsurprising given that EO
13,224 primarily targets “foreign persons.”11 Many of those
persons likely cannot assert the due process protections that
are available to AHIF-Oregon, a United States entity. See
NCORI, 251 F.3d at 201 (holding that “a foreign entity with-
out property or presence in this country has no constitutional
rights, under the Due Process Clause or otherwise” (internal
quotation marks omitted)); see also Aguilera-Montero v.
Mukasey, 548 F.3d 1248, 1253 (9th Cir. 2008) (discussing the
“significant” “distinction” between those aliens who have
entered the United States and those who have not: “Aliens
standing on the threshold of entry are not entitled to the con-
stitutional protections provided to those within the territorial
jurisdiction of the United States.” (internal quotation marks
omitted)). So far as we can tell from the record in this case,
very few designated persons respond to OFAC at all, let alone
with requests for mitigation measures concerning classified
information. In any event, if OFAC becomes inundated by
mitigation requests in the future, the agency properly can raise
that issue before the appropriate court. For purposes of this
case, we hold that the small burden on the agency of provid-
ing mitigation measures does not outweigh the potential value
to AHIF-Oregon. OFAC’s failure to pursue potential mitiga-
tion measures violated AHIF-Oregon’s due process rights.
[14] We note that we are not the first court to reach this
conclusion. In KindHearts II, 710 F. Supp. 2d at 657-60, the
district court surveyed the sparse case law on this topic and,
having viewed the material in camera, concluded that, in the
circumstances of that case, the government must “expedi-
tiously declassify and/or summarize” its classified informa-
tion and that, “[i]f declassification or summarization of
11
Compare EO 13,224, § 1(a), (b) (blocking the assets of “foreign per-
sons listed in the Annex” and “foreign persons” listed in the future that
meet certain requirements), with id. § 1(c), (d) (blocking the assets of
“persons” listed in the future, provided that certain other, more onerous
requirements are met).
2062 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
classified information is insufficient or impossible,” the gov-
ernment must permit a lawyer for the plaintiff to view the
classified information under a protective order. We agree that
a case-by-case approach is proper. As we have alluded to ear-
lier, the proper measures in any given case will depend on a
number of factors. We expect the agency (and, if necessary,
the district court) to consider, at a minimum, the nature and
extent of the classified information, the nature and extent of
the threat to national security, and the possible avenues avail-
able to allow the designated person to respond more effec-
tively to the charges.
2. Adequate Notice and Meaningful Opportunity to
Respond
AHIF-Oregon argues that OFAC violated its due process
rights by failing to provide adequate notice and a meaningful
opportunity to respond to OFAC’s designation and redesigna-
tion determinations. Specifically, AHIF-Oregon asserts that
OFAC refused to disclose its reasons for investigating and
designating AHIF-Oregon, leaving AHIF-Oregon unable to
respond adequately to the agency’s unknown suspicions.
“Due process requires notice ‘reasonably calculated, under
all the circumstances, to apprise interested parties of the pen-
dency of the action and afford them an opportunity to present
their objections.’ ” United Student Aid Funds, Inc. v.
Espinosa, 130 S. Ct. 1367, 1378 (2010) (quoting Mullane v.
Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).
“ ‘Due process is flexible and calls for such procedural pro-
tections as the particular situation demands.’ ” Gilbert v.
Homar, 520 U.S. 924, 930 (1997) (brackets omitted) (quoting
Morrissey v. Brewer, 408 U.S. 471, 481 (1972)). Once again,
the Mathews balancing test applies. Foss, 161 F.3d at 589.
At the outset, we note that AHIF-Oregon wisely does not
challenge OFAC’s decision not to provide pre-deprivation
notice. As the district court noted, and as many courts have
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2063
held, the potential for “asset flight” almost certainly justifies
OFAC’s decision not to provide notice before freezing the
assets. See Holy Land, 333 F.3d at 163-64; Global Relief, 315
F.3d at 754. Instead, AHIF-Oregon challenges the alleged
failure to provide adequate notice and a meaningful opportu-
nity to respond during the four-year period between the freez-
ing of the assets in February 2004 and the redesignation
determination in February 2008.12
In the first seven months, OFAC gave AHIF-Oregon no
statement of reasons. OFAC did provide some unclassified
documents to AHIF-Oregon and requested that AHIF-Oregon
provide a copy of a Koran. But OFAC neither explained the
relevance of the documents nor provided a statement of rea-
sons for its investigation. After receiving the documents and
request for a copy of a Koran, AHIF-Oregon took a guess at
what reasons OFAC might possibly have had in mind. Some
of those guesses ended up being correct (the $150,000 check
to Chechens), and some of those guesses ended up being
incorrect (distribution of Korans). In the entire four-year
period, only one document could be viewed as supplying
some reasons for OFAC’s investigation and designation deci-
sion. Seven months after blocking AHIF-Oregon’s assets,
OFAC issued a press release that explained some of OFAC’s
reasons for the designation.13 In particular, the press release
12
Notice and a meaningful opportunity to respond are, in many circum-
stances, two different inquiries. Here, however, they are two sides of the
same coin. No one disputes that OFAC permitted AHIF-Oregon the
opportunity to submit evidence and arguments during the pendency of
OFAC’s determinations. The dispute concerns whether OFAC adequately
apprised AHIF-Oregon of its reasons for considering designation and
redesignation. If there was inadequate notice, then there was an inadequate
opportunity to respond. But if there was adequate notice, then there was
an adequate opportunity to respond. Although they are both implicated, we
refer in text generally to adequate notice because, in the circumstances
here, the two inquiries collapse.
13
OFAC also sent a letter to AHIF-Oregon one week after the 2004
press release. But that letter contains no statement of reasons. The letter
states that OFAC had designated AHIF-Oregon pursuant to EO 13,224,
§ 1(c), (d); those provisions contain all the general reasons for which an
entity such as AHIF-Oregon may be designated.
2064 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
stated that AHIF-Oregon had provided support to Chechen
terrorists and attempted to conceal that activity.
[15] We hold that all three Mathews factors support the
conclusion that OFAC violated AHIF-Oregon’s due process
rights. First, OFAC’s blocking notice deprived AHIF-Oregon
of its ability to use any funds whatsoever, for any purpose.
Second, because AHIF-Oregon could only guess (partly
incorrectly) as to the reasons for the investigation, the risk of
erroneous deprivation was high. Finally, and perhaps most
importantly, although national security might justify keeping
AHIF-Oregon in the dark, OFAC makes no effort to demon-
strate that its failure to provide AHIF-Oregon with reasons for
its investigation promoted national security. OFAC presents
three different arguments to justify its failure to provide a
statement of reasons.
First, OFAC argues that its September 2004 press release
constituted sufficient notice. We agree with OFAC that the
press release states with some clarity that AHIF-Oregon sup-
ported Chechen terrorists (the third reason given in the 2008
redesignation notice). OFAC also claims that there was suffi-
cient information in the press release to apprise AHIF-Oregon
of OFAC’s concern about control by Al-Aqil and Al-Buthe
(the first and second reasons given in the 2008 redesignation
notice). But, as the district court correctly pointed out, the
press release stated nothing about ownership or control of
AHIF-Oregon. OFAC provided notice concerning only one of
three reasons for its investigation and designation, and that
notice occurred seven months after it froze AHIF-Oregon’s
assets. Such a significantly untimely and incomplete notice
does not meet the requirements of due process.
Second, OFAC argues that it was impractical to provide
reasons to AHIF-Oregon during the four-year investigation.
We are unpersuaded for many of the same reasons, just dis-
cussed, concerning OFAC’s failure to provide mitigation
measures regarding the classified information. It is clear that
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2065
OFAC had its reasons for investigating AHIF-Oregon (other-
wise its investigation would be unjustified), so the summary
of those reasons would not present a practical burden. More-
over, as discussed above, it appears that very few of the enti-
ties under investigation request a statement of reasons or are
even entitled to the protections of the Due Process Clause.
We can envision situations in which OFAC acts so quickly
between the original deprivation and its decision to designate
that it may be impractical to provide a statement of reasons.
But the seven-month period of the original investigation, and
certainly the four-year period of the entire redesignation
determination, gave OFAC ample time to provide AHIF-
Oregon with, at a minimum, a terse and complete statement
of reasons for the investigation. There is no reason why
OFAC could not have given notice in this particular case.14 If
a notice requirement is unduly burdensome in some future
case, OFAC may present that argument to the appropriate
court.
Finally, OFAC argues that the circumstances of its investi-
gation and the documentation that it submitted to AHIF-
Oregon provided that entity with sufficient information from
which AHIF-Oregon could guess OFAC’s reasons. In any
event, OFAC asserts, AHIF-Oregon’s guesses proved partly
correct. We have rejected that argument in an analogous situa-
tion; the opportunity to guess at the factual and legal bases for
a government action does not substitute for actual notice of
the government’s intentions.
In Gete v. INS, 121 F.3d 1285, 1287-91 (9th Cir. 1997), the
INS seized motor vehicles from certain aliens and offered
14
Indeed, at oral argument, counsel for OFAC disavowed the argument
that OFAC could not have given timely notice to AHIF-Oregon in this
particular case. See Oral Arg. Transcript at 44:20 (Counsel for OFAC:
“Your Honor, I am not arguing—my argument today is not that [OFAC]
could not have noticed [AHIF-Oregon]. That is not the argument.”).
2066 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
only summary process of the aliens’ requests to recover those
vehicles. The INS argued, similarly to OFAC here, that noth-
ing required additional process and, in any event, the motor
vehicle “owners will frequently have at least a general idea of
the factual basis for the seizure.” Id. at 1297. We disagreed
and held that the Due Process Clause required the INS “to
give sufficient notice concerning the factual and legal bases
for its seizures.” Id. With respect to the argument that the
owners likely could guess as to the reasons, we held that,
“without knowing the exact reasons for the seizure, as well as
the particular statutory provisions and regulations they are
accused of having violated, [the owners] may not be able to
clear up simple misunderstandings or rebut erroneous infer-
ences drawn by the INS.” Id. We held that the Due Process
Clause required the INS to disclose the “factual bases for sei-
zure[ ]” and “the specific statutory provision allegedly violat-
ed.” Id. at 1298.
[16] Although our decision in Gete arose in a different
context, OFAC has not attempted to explain why the different
context matters. We find Gete’s reasoning equally applicable
here: In the absence of national security concerns, due process
requires OFAC to present the entity with, at a minimum, a
timely statement of reasons for the investigation.
Our conclusion also is supported by the analysis of the dis-
trict court in KindHearts I, 647 F. Supp. 2d at 901-08. In that
case, the district court found a due process violation in the
identical context (designation by OFAC under EO 13,224 of
a non-profit organization) with startlingly similar facts. OFAC
blocked the entity’s assets but gave no statement of reasons
until “approximately thirty-four months after the block pend-
ing investigation, and approximately eighteen months after its
provisional determination to designate.” Id. at 903. The court
held that the notice was constitutionally inadequate and failed
to provide a meaningful opportunity to respond. Id. at 904-08;
see id. at 901 (“Constitutionally sufficient notice should give
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2067
the party an understanding of the allegations against it so that
it has the opportunity to make a meaningful response.”).
OFAC leans heavily on two decisions by the District of
Columbia Circuit. In NCORI, 251 F.3d at 208-09, the court
addressed what process is due in the closely similar context
of designation of a foreign terrorist organization under
AEDPA. In that case, the government had provided no notice
at all and no opportunity for the entity to be heard. Id. at 208.
The court held that due process requires notice of pending
designation, a copy of the unclassified administrative record,
and an opportunity to respond. Id. at 208-09. That court did
not address the issue at hand here: whether the notice must
contain some statement of reasons for the investigation. Thus
the court did not state that the government must supply its
reasons for investigating.
Similarly, in Holy Land, 333 F.3d at 164, the District of
Columbia Circuit addressed a challenge to OFAC’s designa-
tion under EO 13,224, including the argument that OFAC
provided insufficient process. Applying NCORI, the court
rejected the due process argument:
Treasury notified both Holy Land [“HLF”] and the
district court that it was reopening the administrative
record and considering whether to redesignate HLF
as an SDGT [specially designated global terrorist],
on the basis of additional evidence linking HLF and
Hamas. Holy Land was then given thirty-one days to
respond to the redesignation and the new evidence.
Holy Land did respond and the Treasury considered
its response as well as the new evidence before
deciding to redesignate HLF in May 2002. There-
fore, Treasury provided HLF with the requisite
notice and opportunity for response necessary to sat-
isfy due process requirements.
Id.2068 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
Both decisions by the District of Columbia Circuit may
suggest that a statement of reasons is not required by due pro-
cess, because neither decision mentions that issue. But it
appears that the plaintiffs in those cases never raised that spe-
cific issue and that the notice given in Holy Land sufficiently
stated the reasons for the investigation. We do not read those
decisions as holding definitively that due process does not
require a statement of reasons. In any event, to the extent that
the District of Columbia Circuit decisions are in tension with
our decision in Gete, we are bound to follow our decision.
Miller v. Gammie, 335 F.3d 889, 899-900 (9th Cir. 2003) (en
banc). We hold that OFAC violated AHIF-Oregon’s due pro-
cess rights by failing to provide an adequate statement of rea-
sons for its investigation.
3. Harmlessness of the Procedural Due Process Viola-
tions
[17] Although OFAC violated AHIF-Oregon’s procedural
due process rights, we may grant judicial relief only if the
errors were prejudicial. OFAC argues that, to the extent that
it violated AHIF-Oregon’s due process rights, any error was
harmless and no prejudice ensued. AHIF-Oregon responds
that the violations at issue here are “structural” and not sub-
ject to harmlessness analysis. AHIF-Oregon argues, in the
alternative, that the errors were not harmless.
We disagree with AHIF-Oregon that the procedural due
process violations at issue here are “structural errors” that per
se undermine the proceedings. The Supreme Court has never
held that an error in the civil context is structural.15 M.L. v.
15
AHIF-Oregon asserts that “the Supreme Court appears to have”
applied structural error in Caperton v. A.T. Massey Coal Co., 129 S. Ct.
2252 (2009). In Caperton, the Court held that a justice of the West Vir-
ginia Supreme Court violated due process by failing to recuse himself
from a case in which one party was an “extraordinary” donor to the jus-
tice’s reelection campaign. The Court remanded “for further proceedings
not inconsistent with [its] opinion.” Id. at 2267. Given the Court’s silence
on the issue of harmlessness and its open-ended remand, we decline to
read that case as a landmark case—the first of its kind according to AHIF-
Oregon—concerning an issue that the Court failed even to mention.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2069
Fed. Way Sch. Dist., 394 F.3d 634, 654 (9th Cir. 2005)
(Gould, J., concurring). And even in the criminal context, the
Supreme Court “ha[s] found an error to be structural, and thus
subject to automatic reversal, only in a very limited class of
cases.” Neder v. United States, 527 U.S. 1, 8 (1999) (internal
quotation marks omitted).
[18] AHIF-Oregon likens its situation to that of a criminal
defendant who is convicted of a charge not included in the
indictment. See Stirone v. United States, 361 U.S. 212, 219
(1960) (“Here, . . . we cannot know whether the grand jury
would have included in its indictment [the additional] charge
. . . . This was fatal error.”). But there are significant differ-
ences between criminal and civil proceedings, even here,
where the deprivation of property is great. We do not hold
that an error in a civil context can never be structural, but we
do hold that the errors here—failure to mitigate the use of
classified information and failure to provide sufficiently
detailed notice—do not undermine the proceedings so funda-
mentally that we cannot ask whether the error was harmless.
See KindHearts II, 710 F. Supp. 2d at 654 (holding that, at
least with respect to the constitutionally inadequate notice in
that case, the errors were not structural).
Turning to the harmless-error analysis, we face another
threshold question: the burden of proof. Quoting Tennessee
Secondary School Athletic Ass’n v. Brentwood Academy, 551
U.S. 291, 303 (2007), the district court held that OFAC bore
the burden of demonstrating that the procedural due process
violations were “harmless beyond a reasonable doubt.”
Although the district court’s reliance on Brentwood Academy
is understandable, we hold that the district court erred. In that
case, the Supreme Court stated, without elaboration on the
proper standard, that “[e]ven accepting the questionable hold-
ing that [the agency’s] closed-door deliberations were uncon-
stitutional, we can safely conclude that any due process
violation was harmless beyond a reasonable doubt.” Id.2070 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
We do not read the Court’s statement as resolving the
proper standard of proof in the civil context. Because the
Supreme Court in Brentwood Academy did not explain its
choice of the “reasonable doubt” standard and did not cite any
cases supporting the use of that standard, we read its use of
the demanding “beyond a reasonable doubt” standard simply
as illustrating how clear it was that the purported error in that
case was harmless.
Just two years later, the Court addressed that specific issue
and clarified that “we have placed such a burden [to prove
harmlessness] on the appellee only when the matter underly-
ing review was criminal.” Shinseki v. Sanders, 129 S. Ct.
1696, 1706 (2009). Because this is not a criminal case, AHIF-
Oregon has the burden of proving that the error was harmful.
See id. (“[T]he burden of showing that an error is harmful
normally falls upon the party attacking the agency’s determi-
nation.” (collecting cases)); see also id. at 1705 (noting the
potential for “abuse of the judicial process and diminish[-
ment] [of] the public’s confidence in the fair and effective
operation of the judicial system” where the courts set “an evi-
dentiary barrier so high that it could never be surmounted
. . . , namely, reversing for error regardless of its effect on the
judgment” (internal quotation marks omitted)); Cal. Wilder-
ness Coal. v. U.S. Dep’t of Energy, 631 F.3d 1072, 1092 (9th
Cir. 2011) (“Certainly, Sanders clarifies that the burden of
showing an agency’s deviation from the APA was not harm-
less rests with the petitioner . . . .”); cf. Lata v. INS, 204 F.3d
1241, 1246 (9th Cir. 2000) (“To prevail on a due process
challenge to deportation proceedings, [the alien] must show
error and substantial prejudice. A showing of prejudice is
essentially a demonstration that the alleged violation affected
the outcome of the proceedings; we will not simply presume
prejudice.” (citations omitted)).
AHIF-Oregon must establish that, had it been provided the
process it was due, it could have, and plausibly would have,
taken steps to undermine OFAC’s 2008 redesignation such
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2071
that OFAC would not have made the redesignation or that
substantial evidence would not have supported the redesigna-
tion.16 In Part A, we held that substantial evidence supports
two of the three reasons given by OFAC: ownership or con-
trol by Al-Buthe and AHIF-Oregon’s support of designated
entities and persons. As we explain below, AHIF-Oregon
could not have undermined OFAC’s conclusion that AHIF-
Oregon supported designated persons. Accordingly, we need
not determine whether AHIF-Oregon could have undermined
OFAC’s conclusion that Al-Buthe’s control supported its des-
ignation determination.
[19] Initially, we note that, as discussed in Part B-2, OFAC
did provide some notice to AHIF-Oregon of its concerns
related to AHIF-Oregon’s support of designated persons as a
branch office of AHIF-Saudi Arabia. Among other things,
AHIF-Oregon had notice about the $150,000 check to the
Chechens, so it had a full opportunity to respond to that alle-
gation. Its failure to alleviate OFAC’s concerns, even with
some notice, suggests that additional information would not
have made a difference. Additionally, there is little that
AHIF-Oregon could have done about the history and genesis
of its organization, including its connections to the larger
AHIF organization. Viewing the record as a whole, including
the classified information, we conclude that the procedural
due process violations related to AHIF-Oregon’s support of
16
Under our jurisprudence, in certain contexts, an error that had a “bear-
ing on the procedure used” is not harmless. Cal. Wilderness Coal., 631
F.3d at 1092 (internal quotation marks omitted); but see id. at 1109-10(Ikuta, J., dissenting) (arguing that our rule has been superseded by Sand-
ers). As we recently explained, that rule does not apply where “[t]he
notice requirement was not an end in itself.” Id. at 1092 (majority). “If a
failure of notice had no effect on the [final substantive] determination . . . ,
there could be no harm; the failure of notice by itself was of no conse-
quence.” Id. Here, we hold that notice is not “an end in itself.” Notice pro-
vides fairness to the designated entity and facilitates full disclosure of
information. But, where OFAC would have arrived at the same determina-
tion even with adequate notice, any error is harmless.
2072 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
designated persons were harmless. Even if AHIF-Oregon had
enjoyed better access to classified information and constitu-
tionally adequate notice, we are confident that it would not
have changed OFAC’s ultimate designation determination.
We therefore affirm the district court’s dismissal of the due
process claims.
C. Fourth Amendment
AHIF-Oregon argues that OFAC’s failure to obtain a war-
rant supported by probable cause violated its Fourth Amend-
ment right to be free of unreasonable seizures. “In the
ordinary case, the [Supreme] Court has viewed a seizure of
personal property as per se unreasonable within the meaning
of the Fourth Amendment unless it is accomplished pursuant
to a judicial warrant issued upon probable cause and particu-
larly describing the items to be seized.” United States v.
Place, 462 U.S. 696, 701 (1983). In most circumstances,
searches and seizures conducted without a warrant are “per se
unreasonable under the Fourth Amendment—subject only to
a few specifically established and well-delineated excep-
tions.” Katz v. United States, 389 U.S. 347, 357 (1967). Here,
OFAC argues that its seizure falls within one of those well-
delineated exceptions to the warrant requirement: the “special
needs” exception.
1. “Special Needs” Exception
[20] “The ‘special needs’ exception is ‘an exception to the
general rule that a search [or seizure] must be based on indi-
vidualized suspicion of wrongdoing.’ ” Friedman v. Boucher,
580 F.3d 847, 853 (9th Cir. 2009) (quoting City of Indianapo-
lis v. Edmond, 531 U.S. 32, 54 (2000)). “Under this excep-
tion, suspicionless searches [and seizures] may be upheld if
they are conducted for important non-law enforcement pur-
poses in contexts where adherence to the warrant-and-
probable cause requirement would be impracticable.” Id.(internal quotation marks and emphasis omitted); see also
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2073
Griffin v. Wisconsin, 483 U.S. 868, 873 (1987) (“[W]e have
permitted exceptions when special needs, beyond the normal
need for law enforcement, make the warrant and probable-
cause requirement impracticable.” (internal quotation marks
omitted)). AHIF-Oregon concedes that OFAC blocking orders
are “conducted for important non-law enforcement purposes,”
specifically, to prevent the funding of terrorist organizations.
But the parties dispute whether the application of the warrant
requirement would be impracticable.
The Supreme Court has held that the “special needs”
exception applies in several different contexts. The exception
requires a weighing of the nature and extent of the privacy
interest at hand against the nature and immediacy of the gov-
ernment’s concerns and the efficacy of the procedures
employed in meeting those concerns. Bd. of Educ. v. Earls,
536 U.S. 822, 830-34 (2002). Because those interests vary
with the factual context, a brief survey of the major cases is
helpful.
In Camara v. Municipal Court, 387 U.S. 523 (1967), the
Court held that periodic, routine building inspections for
health code reasons fell within the exception. The Court
explained that (1) “such programs have a long history of judi-
cial and public acceptance”; (2) “the public interest demands
that all dangerous conditions be prevented or abated, yet it is
doubtful that any other canvassing technique would achieve
acceptable results”; and (3) the searches “involve a relatively
limited invasion of the urban citizen’s privacy.” Id. at 537.
In O’Connor v. Ortega, 480 U.S. 709 (1987), the Court
held that a government employer may search the files and
drawers of its employees for work-related reasons. The Court
held that “requiring an employer to obtain a warrant whenever
the employer wished to enter an employee’s office, desk, or
file cabinets for a work-related purpose would seriously dis-
rupt the routine conduct of business and would be unduly bur-
densome.” Id. at 722 (plurality); see also id. at 732 (Scalia, J.,
2074 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
concurring) (agreeing with the plurality’s “special needs”
conclusion). Additionally, “the privacy interests of govern-
ment employees in their place of work . . . , while not insub-
stantial, are far less than those found at home or in some other
contexts.” Id. at 725 (plurality); see also Nat’l Treasury
Employees Union v. Von Raab, 489 U.S. 656, 665-67 (1989)
(holding that drug testing of Customs employees falls within
the “special needs” exception for similar reasons).
In Earls, 536 U.S. at 825, the Court held that a public
school’s policy of requiring drug testing of all students partic-
ipating in extracurricular activities fell within the “special
needs” exception. “A student’s privacy interest is limited in
a public school environment . . . .” Id. at 830. Because the
school conducted the test with many procedural safeguards
and used the results only in connection with permitting the
student to participate in extracurricular activities, the Court
held that, “[g]iven the minimally intrusive nature of the sam-
ple collection and the limited uses to which the test results are
put, we conclude that the invasion of students’ privacy is not
significant.” Id. at 834. Finally, the Court considered the
school’s strong interest in “preventing drug use by schoolchil-
dren,” especially because of “specific evidence of drug use”
at the school in question. Id.In Griffin, 483 U.S. at 875-80, the Court held that a proba-
tion officer’s search of a probationer’s home on a tip by a
police officer that the probationer illegally possessed a gun
fell within the exception. The Court emphasized that
“[p]robation is simply one point . . . on a continuum of possi-
ble punishments.” Id. at 874. “A warrant requirement would
interfere to an appreciable degree with the probation system,”
particularly because “the delay inherent in obtaining a warrant
would make it more difficult for probation officials to respond
quickly to evidence of misconduct.” Id. at 876. Moreover,
“[a]lthough a probation officer is not an impartial magistrate,
neither is he the police officer who normally conducts
searches against the ordinary citizen. He . . . is also supposed
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2075
to have in mind the welfare of the probationer.” Id. Overall,
the Court concluded that “the probation regime would . . . be
unduly disrupted” by requiring probable cause and a warrant.
Id. at 878. “[I]t is both unrealistic and destructive of the whole
object of the continuing probation relationship to insist upon
[a showing of probable cause].” Id. at 879.
In Michigan Department of State Police v. Sitz, 496 U.S.
444 (1990), and United States v. Martinez-Fuerte, 428 U.S.
543 (1976), the Court held that traffic checkpoints where offi-
cers screened vehicles for intoxicated drivers or illegal aliens
survived Fourth Amendment scrutiny. In both cases, the
Court’s decision resulted largely from the “minor interfer-
ence” involved in responding to a traffic checkpoint.
Martinez-Fuerte, 428 U.S. at 565; see Sitz, 496 U.S. at 451(holding that the intrusion on motorists is “slight”); see also
New York v. Burger, 482 U.S. 691, 702 (1987) (holding that
“the owner or operator of commercial premises in a ‘closely
regulated’ industry has a reduced expectation of privacy” such
that the Fourth Amendment warrant and probable-cause
requirements “have lessened application in this context”).
Finally, in Skinner v. Railway Labor Executives’ Ass’n, 489
U.S. 602 (1989), the Court held that railroads may administer
blood, urine, and breath tests for railroad employees who are
involved in certain train accidents. The Court held that a war-
rant “would do little to further the[ ] aims” of the Fourth
Amendment because, in the context of a regulatory scheme in
which privacy intrusions “are defined narrowly and specifi-
cally in the regulations that authorize them, and doubtless are
well known to covered employees,” “there are virtually no
facts for a neutral magistrate to evaluate.” Id. at 622. The
Court also noted that the value of the results of most of the
tests would be greatly diminished, or even eliminated, by the
delay that obtaining a warrant would cause. Id. at 623.
[21] Here, the domestic entity’s interest in being free from
blocking orders is great. A blocking order effectively shuts
2076 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
down the private entity. Indeed, blocking orders do so by
design. Unlike in the Court’s other cases, such as a one-time
drug test, a search of files at a person’s office, a search of a
home while on probation, or a brief traffic stop, there is no
limited scope or scale to the effect of the blocking order. The
only limit is temporal, and that limitation is quite small. Once
OFAC concludes its investigation (which took more than half
a year here), then the party has a right to very limited judicial
review and a right to request administrative reconsideration.
Both of those actions take considerable time, as the facts of
this case and other cases, such as KindHearts, demonstrate. In
the meantime, the entity’s doors are closed.
[22] Additionally, OFAC’s potential reach is extensive.
Unlike the Court’s cases, which concerned well-defined
classes of persons such as probationers, public school stu-
dents, public employees at work, drivers on the road, and so
on, OFAC can issue a blocking order against any person
within the United States or elsewhere. And, of course, OFAC
does so without warning. There certainly is no “long history
of judicial and public acceptance.” Camara, 387 U.S. at 537.
Relatedly, unlike in the school and probation cases, in which
those persons who conduct the search or seizure also are
entrusted with protecting the targeted person’s interests,
OFAC is not at all tasked with protecting the interests of the
blocked entities.
[23] On the other side of the scale, the government’s inter-
est in preventing terrorism and the funding of terrorism is
extremely high. But the sensitive subject matter is no excuse
for the dispensing altogether with domestic persons’ constitu-
tional rights. Cf. Hamdi, 542 U.S. 507 (holding that due pro-
cess required that a United States citizen being held as an
“enemy combatant” be given a meaningful opportunity to
contest his detention). Rather, the dispositive question here is
whether it is impracticable for OFAC to achieve its undeni-
ably important aims without securing a warrant.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2077
On this point, OFAC asserts that it does not and cannot
know the location of the assets it seeks to block and must rely
on property holders other than the blocked entity to identify
such assets. OFAC also asserts that it would be impractical to
update its warrants whenever it discovered additional assets
owned by the entity. Finally, OFAC asserts that the timing of
its blocking orders is coordinated with other governments,
which makes it impractical to obtain a warrant.
[24] We are not persuaded. As an initial matter, we reiter-
ate that the number of designated persons located within the
United States appears to be very small. The warrant require-
ment therefore will be relevant in only a few cases.
We acknowledge that the issue of “asset flight” is a legiti-
mate concern; that coordination may be required with differ-
ent agencies of this government or even with foreign
governments; and that additional assets may be discovered in
the future. To the extent that those concerns are present in any
given situation, OFAC can protect its interest in stopping the
funding of terrorism by seizing the assets initially pursuant to
an emergency exception to the warrant requirement, see
United States v. Deemer, 354 F.3d 1130, 1132 (9th Cir. 2004)
(describing the emergency exception); or pursuant to a care-
fully circumscribed warrant, cf. United States v. Tamura, 694
F.2d 591, 595-96 (9th Cir. 1982) (permitting, in some
instances involving intermingled documents, the seizure of
many documents followed by the ability to seek a warrant for
material not initially covered by a warrant). After OFAC has
blocked the assets so that asset flight is foreclosed, OFAC
then can obtain a warrant specifying the particular assets.
[25] In any event, OFAC has not given us any reason why
it could not have obtained a warrant here. We hold that the
“special needs” exception does not apply to the seizure of
AHIF-Oregon’s assets by OFAC under EO 13,224. See Kind-
Hearts II, 647 F. Supp. 2d at 879-82 (holding that the “special
needs” exception did not apply to very similar facts).
2078 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
2. “General Reasonableness” Test
OFAC also argues that, apart from any well-delineated
exception to the warrant requirement, its blocking orders “are
not susceptible to Fourth Amendment challenges” because
they are per se reasonable under the “general reasonableness”
test. “ ‘[R]easonableness in all the circumstances of the partic-
ular governmental invasion of a citizen’s personal security’ ”
is the “touchstone” of Fourth Amendment analysis. Pennsyl-
vania v. Mimms, 434 U.S. 106, 108-09 (1977) (quoting Terry
v. Ohio, 392 U.S. 1, 19 (1968)).
Ordinarily, the reasonableness of governmental action is
established by obtaining a warrant or by falling within one of
the well-delineated exceptions to the warrant requirement.
Katz, 389 U.S. at 357. OFAC has directed us to a few cases,
however, in which the Supreme Court has analyzed whether
a warrantless search was reasonable in the totality of the
circumstances—without reference to any specific exception.
Samson v. California, 547 U.S. 843 (2006); United States v.
Flores-Montano, 541 U.S. 149 (2004); United States v.
Knights, 534 U.S. 112 (2001). We will assume for the purpose
of our discussion (but do not decide) that the “ ‘general
Fourth Amendment approach,’ ” Samson, 547 U.S. at 848(quoting Knights, 534 U.S. at 118), applies equally to war-
rantless seizures. But see KindHearts I, 647 F. Supp. 2d at
878-79 (holding that there is no general “reasonableness”
approach to warrantless seizures).
Under this approach, “we examine the totality of the cir-
cumstances to determine whether a [seizure] is reasonable
within the meaning of the Fourth Amendment.” Samson, 547
U.S. at 848 (internal quotation marks and brackets omitted).
“Whether a search is reasonable is determined by assessing,
on the one hand, the degree to which it intrudes upon an indi-
vidual’s privacy and, on the other, the degree to which it is
needed for the promotion of legitimate governmental inter-
ests.” Id. (internal quotation marks omitted).
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2079
Most of our reasoning above, concerning the special needs
exception, applies equally here. The cases in which the Court
has found warrantless searches to be reasonable all involve
very special circumstances and greatly diminished privacy
interests—a point repeatedly emphasized by the Court. For
instance, in Flores-Montano, 541 U.S. at 154, the Court held
that a person’s privacy interest in the interior of an automo-
bile’s gas tank is not sufficient to overcome the government’s
interest in preventing drug smuggling at the border. Similarly,
in Samson and Knights, the Court explained at length that pro-
bationers and parolees, who are subject to a clearly disclosed
search condition of parole or probation, have greatly dimin-
ished expectations of privacy such that warrantless searches
survived Fourth Amendment scrutiny. Samson, 547 U.S. at
850-52; Knights, 534 U.S. at 119-21. Here, however, as we
have explained, the reach of OFAC’s authority extends to all
persons and entities, without limitation. Nothing diminishes
the privacy expectation of persons and entities potentially
subject to seizure by OFAC because that class includes every-
one.
[26] We reiterate that OFAC’s interest in preventing ter-
rorism is extremely high. But we cannot accept OFAC’s con-
tention that its blocking orders are per se reasonable in all
circumstances, solely by virtue of that vital mission. As we
noted above, an exception to the warrant requirement would
permit OFAC to seize assets without obtaining a warrant in
some situations. But, because there is no diminished expecta-
tion of privacy and because nothing prevents OFAC from
obtaining a warrant in the normal course, we reject OFAC’s
argument that its blocking orders are per se reasonable under
the “general reasonableness” approach.17
17
OFAC also mentions two district court decisions, Islamic Am. Relief
Agency v. Unidentified FBI Agents, 394 F. Supp. 2d 34, 48 (D.D.C. 2005);
Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57,
78-79 (D.D.C. 2002). In both of those cases, the court held, with no analy-
sis whatsoever, that a blocking order does not constitute a “seizure” for
2080 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
[27] In summary, no exception applies to OFAC’s warrant-
less seizure of AHIF-Oregon’s assets and the seizure is not
justified under a “general reasonableness” test. We therefore
hold that OFAC violated AHIF-Oregon’s Fourth Amendment
right to be free of unreasonable seizures.18 Because the district
court did not reach the issue of remedy and because the par-
ties did not brief that issue before us, we remand to the district
court to determine, in the first instance, what remedy, if any,
is available.
D. First Amendment
Section 2(a) of EO 13,224 prohibits any person from mak-
ing “any contribution of . . . services to or for the benefit of”
designated entities. MCASO “seeks to engage in advocacy
coordinated with and for the benefit of AHIF-Oregon.”
MCASO argues that the prohibition against its coordinated
advocacy violates the First Amendment.
We are guided by the Supreme Court’s decision in Holder
Fourth Amendment purposes. We do not find the unexplained conclusion
persuasive. See KindHearts II, 647 F. Supp. 2d at 871-72 (explaining the
errors of the other district court opinions and rejecting the argument that
the seizure of assets under EO 13,224 is not a “seizure” for Fourth
Amendment purposes).
18
In its petition for rehearing, OFAC raises interesting arguments about
issues that we need not, and do not, decide. We address only the facts of
this case: OFAC’s seizure of assets as a result of its designation order of
a United States entity located within the United States. We do not address
the requirements under the Fourth Amendment for other situations includ-
ing, for example, designations of foreign entities or designations by execu-
tive order. We also make clear that our holding concerns OFAC’s original
designation order only; we do not address whether a warrant is required
for subsequent orders. Finally, we note that a designation order need not
specify all details of every asset to meet the Fourth Amendment’s particu-
larity requirement. Cf. United States v. Petti, 973 F.2d 1441, 1444-45 (9th
Cir. 1992) (holding that a “ ‘roving’ wiretap surveillance” warrant meets
the Fourth Amendment’s particularity requirement).
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2081
v. Humanitarian Law Project (“HLP”), 130 S. Ct. 2705(2010). In that case, the government had designated certain
entities as “foreign terrorist organizations” under AEDPA. Id.
at 2713. Two United States citizens and six domestic organi-
zations wished to provide aid to the peaceful portion of the
designated entities’ activities but feared prosecution under 18
U.S.C. §§ 2339A and 2339B. HLP, 130 S. Ct. at 2713-14.
Those provisions criminalize the provision of any “service” or
“material support” to AEDPA-designated entities. 18 U.S.C.
§ 2339A(b)(1); id. § 2339B(a)(1); see also HLP, 130 S. Ct. at
2715 (describing the relevant legislative history). The plain-
tiffs desired to provide certain specified services and to con-
duct coordinated advocacy with the AEDPA-designated
entities. HLP, 130 S. Ct. at 2714. In a pre-enforcement action,
the plaintiffs challenged the statute’s application to those pro-
posed activities. Id.
The Supreme Court rejected the plaintiffs’ vagueness chal-
lenge to the term “service.” Id. at 2721-22. The Court held
that it was clear that the term “service” “refers to concerted
activity, not independent advocacy.” Id. at 2721. Accordingly,
although the statute prohibits coordinated advocacy, the stat-
ute permits independent advocacy. Id. at 2722. The plaintiffs
had posed many hypothetical questions about what constitutes
coordinated advocacy, as opposed to independent advocacy.
Id. But the Court held that those challenges were unripe in the
context of a pre-enforcement challenge:
The problem with these questions is that they are
entirely hypothetical. Plaintiffs have not provided
any specific articulation of the degree to which they
seek to coordinate their advocacy with the [desig-
nated entities]. They have instead described the form
of their intended advocacy only in the most general
terms. See, e.g., Brief for Plaintiffs 10-11 (plaintiffs
“would like, among other things, to offer their ser-
vices to advocate on behalf of the rights of the Kurd-
ish people and [one entity] before the United Nations
2082 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
and the United States Congress” (internal quotation
marks and alteration omitted)); App. 59 (plaintiffs
would like to “write and distribute publications sup-
portive of [one entity] and the cause of Kurdish lib-
eration” and “advocate for the freedom of political
prisoners in Turkey”).
Deciding whether activities described at such a
level of generality would constitute prohibited “ser-
vice[s]” under the statute would require sheer
speculation—which means that plaintiffs cannot pre-
vail in their preenforcement challenge. It is apparent
with respect to these claims that gradations of fact or
charge would make a difference as to criminal liabil-
ity, and so adjudication of the reach and constitution-
ality of the statute must await a concrete fact
situation.
Id. (alteration in original) (citation and some internal quota-
tion marks omitted).
The Court next discussed the plaintiffs’ as-applied chal-
lenge to the statute’s ban on “material support.” The Court
rejected the government’s argument that only intermediate
scrutiny applied. Id. at 2723-24. The Court held that strict
scrutiny applied because, at least on the facts of that case, the
statute regulated speech because of its content. Id. The Court
then turned to whether the statute’s ban on material support
was necessary to further the (concededly high) interest of
combating terrorism. Id. at 2724.
The Court upheld the statute’s constitutionality as applied
to the plaintiffs’ desired conduct. Id. at 2724-30. The Court
first explained that, at least with respect to the activities
desired by the plaintiffs, three rationales existed. Id. First, the
Court held that “[m]oney is fungible.” Id. at 2725. When a
terrorist organization receives support for any end, even
peaceful ends, it frees up the organization’s funds for other,
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2083
sinister ends. Id. at 2725-26. In a footnote, the Court
explained that this line of reasoning applies even if the sup-
port, such as the provision of non-financial material help, is
not itself fungible. Id. at 2726 n.6. Second, the Court held that
support “also importantly helps lend legitimacy to foreign ter-
rorist groups—legitimacy that makes it easier for those groups
to persist, to recruit members, and to raise funds—all of
which facilitate more terrorist attacks.” Id. at 2725. In
response to the dissent’s argument that there is no natural
stopping place for the legitimacy concern, the Court
responded that “Congress has settled on just such a natural
stopping place: The statute reaches only material support
coordinated with or under the direction of a designated for-
eign terrorist organization.” Id. at 2726. Third, the Court held
that “[p]roviding foreign terrorist groups with material sup-
port in any form also furthers terrorism by straining the
United States’ relationships with its allies and undermining
cooperative efforts between nations to prevent terrorist
attacks.” Id. The Court explained that the Republic of Turkey
actively was at war with one of the entities and “would hardly
be mollified by the explanation that the support was meant
only to further those groups’ ‘legitimate’ activities.” Id.
The Court then “turn[ed] to the particular speech plaintiffs
propose to undertake.” Id. at 2729. The Court held that Con-
gress permissibly could ban the plaintiffs’ proposed training
of the entities’ members “on how to use humanitarian and
international law to peacefully resolve disputes.” Id. “It is
wholly foreseeable that the [entity] could use the specific
skills that plaintiffs propose to impart as part of a broader
strategy to promote terrorism. The [entity] could, for example,
pursue peaceful negotiation as a means of buying time to
recover from short-term setbacks, lulling opponents into com-
placency, and ultimately preparing for renewed attacks.” Id.
(citation, internal quotation marks, and brackets omitted). The
Court concluded that “[t]his possibility is real, not remote.”
Id.
2084 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
The Court next held that Congress permissibly could ban
the plaintiffs’ proposal to teach entities’ members “how to
petition various representative bodies such as the United
Nations for relief.” Id. (internal quotation marks omitted). The
Court held that the relief that the entities could seek might
include monetary relief and, again noting that “[m]oney is
fungible,” the Court concluded that those funds “could be
redirected to funding the group’s violent activities.” Id.
With respect to the plaintiffs’ proposed coordinated advo-
cacy, however, the Court again punted. Id. The Court held
that, as it had explained earlier, the “plaintiffs do not specify
their expected level of coordination” with the entities; their
“proposals are phrased at such a high level of generality that
they cannot prevail in this preenforcement challenge.” Id.
In addition to not reaching the challenge concerning coordi-
nated advocacy, the Court expressly limited its holdings to the
particular facts of the case. Id. at 2729-30. Most relevant here,
the Court stated that “[w]e . . . do not suggest that Congress
could extend the same prohibition on material support at issue
here to domestic organizations.” Id. at 2730; see also id. at
2712 (“We do not . . . address the resolution of more difficult
cases that may arise under the statute in the future.”).
[28] With that discussion in mind, we analyze the provi-
sion at issue here—section 2(a) of EO 13,224—and
MCASO’s proposed activities. Section 2(a) of EO 13,224 and
the statutory provision at issue in HLP both prohibit the provi-
sion of “services” to an entity that has been designated, albeit
under different statutory authorities, by the executive branch
as a terrorist organization. For purposes of the First Amend-
ment analysis, we see no difference between section 2(a) of
EO 13,224 and the statute at issue in HLP. Accordingly, as
both parties suggest, we must apply the Supreme Court’s
decision in HLP. Two immediate results follow.
First, as OFAC readily concedes, MCASO is free to con-
duct a practically limitless range of independent activities to
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2085
express its view that AHIF-Oregon should not be designated.
On that topic, it may petition the government or the United
Nations, hold press conferences, lobby the public, purchase
advertisements, conduct demonstrations, organize an educa-
tional conference, and so on. It is only coordinated activities
—those activities done, for instance, on behalf of AHIF-
Oregon or in coordination with AHIF-Oregon—that EO
13,224 prohibits.
Second, we must apply strict scrutiny to EO 13,224’s pro-
hibition. HLP, 130 S. Ct. at 2724. Accordingly, the prohibi-
tion survives only if it is narrowly tailored to advance the
concededly compelling government interest of preventing ter-
rorism. San Jose Christian Coll. v. City of Morgan Hill, 360
F.3d 1024, 1031 (9th Cir. 2004). Regulations subject to strict
scrutiny “almost always violate the First Amendment.” Dish
Network Corp. v. FCC, No. 10-16666, 2011 WL 3449485, at
*5 (9th Cir. Aug. 9, 2011). But not always, as HLP instructs.
We turn, then, to the facts of this case.
Although both this case and HLP involve the proposed pro-
vision of services to a designated entity, the facts of this case
differ from HLP’s in two significant ways. First, in HLP, the
plaintiffs proposed to conduct “coordinated advocacy” with
the designated entities, but only in the most general terms.
Because the plaintiffs had failed to specify what activities it
would conduct, the Court held that the pre-enforcement chal-
lenge could not proceed.
Here, however, MCASO has specified in some detail the
activities in which it wishes to engage. In particular, MCASO
avers in the complaint that, in coordination with AHIF-
Oregon and on its behalf, it desires to “speak[ ] to the press,
hold[ ] demonstrations, and contact[ ] the government.” In its
brief before us, MCASO explains that it would like to “or-
ganiz[e] public education activities in conjunction with AHIF-
Oregon.” At oral argument, MCASO’s lawyer said that the
2086 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
organization would like to issue a “coordinated press release”
and to conduct a “coordinated press conference.”19
OFAC does not assert that these proposed activities are so
general as to preclude pre-enforcement challenge. We agree.
Like the proposed training activities reviewed by the Supreme
Court in HLP, 130 S. Ct. at 2729, MCASO’s proposed activi-
ties here are specific enough that we may review the First
Amendment challenges in this pre-enforcement action.
The second significant difference between this case and
HLP is the nature of the designated entity. The entities in HLP
were wholly foreign, whereas AHIF-Oregon is, at least in
some respects, a domestic organization. On this point, the par-
ties offer divergent views. MCASO asserts that AHIF-Oregon
is a wholly domestic organization, so HLP does not apply. See
id. at 2730 (“We also do not suggest that Congress could
extend the same prohibition on material support at issue here
to domestic organizations.”). In OFAC’s view, AHIF-Oregon
is nothing more than a branch office of the larger global AHIF
organization. Because AHIF-Oregon is a part of a foreign
organization, OFAC argues, AHIF-Oregon is no different
than the designated foreign terrorist organizations in HLP,
and HLP controls here.
Both parties oversimplify the issue. AHIF-Oregon is nei-
ther wholly domestic nor wholly foreign. It is a domestic
organization because it is incorporated under Oregon law, it
is physically located in Oregon, it has funds in domestic bank
accounts, and it has conducted most of its activities in the
United States. But it also has ties to the larger AHIF organiza-
tion because of the overlap between its founding members
and those of foreign entities and because of its interactions
19
We also note that MCASO is no stranger to AHIF-Oregon. MCASO
explains in the complaint that it has engaged in coordinated activities with
AHIF-Oregon in the past and “would like to continue to work with [AHIF-
Oregon] in its former activities.”
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2087
and communications with AHIF-Saudi Arabia and other
AHIF branches. We therefore reject both parties’ facile
descriptions of the domestic or foreign nature of AHIF-
Oregon. The extent to which the entity is domestic or foreign
matters only to the extent that it bears on the three rationales
advanced by the Supreme Court in HLP, to which we now turn.20
1. Money is Fungible
The Supreme Court upheld the prohibition of specified ser-
vices related to an entity’s peaceful ends in significant part
because “[m]oney is fungible.” Id. at 2725. Funds raised by
an entity for its peaceful ends can be directed to its terrorist
objectives and, at the very least, giving money for one pur-
pose frees up funds that can be used in aid of terrorism. Id.
at 2725-26. As the Court clarified in a footnote, the same rea-
soning applies to non-financial gifts, such as the provision of
services. Id. at 2726 n.6. The wholly foreign entities at issue
in HLP had ready access to funds through their foreign cof-
fers; indeed, the entities were engaged in an active war with
Turkey. Id. at 2726-27. Additionally, the record showed that
the entities had used funds that had been raised for humanitar-
ian purposes to pursue violent activities. Id. at 2725-26.
This rationale has very little force with respect to
MCASO’s proposed activities. To the extent that coordinated
advocacy with MCASO could free up AHIF-Oregon’s assets
for sinister purposes, AHIF-Oregon has no assets available.
OFAC has frozen all of AHIF-Oregon’s assets.
OFAC responds that AHIF-Oregon is nothing more than a
branch office of the larger, international AHIF organization
and that the global organization has unfrozen assets in foreign
countries. This is a fair point. As discussed earlier, substantial
20
OFAC has not advanced, and we cannot think of, any additional ratio-
nales that might support the ban on coordinated advocacy. We therefore
limit our discussion to the three rationales advanced by the Court in HLP.
2088 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
evidence supports OFAC’s view that AHIF-Oregon is a
branch office of the larger AHIF organization. Viewed as a
singular entity, MCASO’s coordinated advocacy with AHIF-
Oregon theoretically could free up funds held by the larger
AHIF organization for terrorist activities. But that theoretical
possibility goes only so far.
The larger AHIF organization is not entirely a singular
entity. MCASO seeks to advocate with and on behalf of
AHIF-Oregon, not the larger AHIF organization. We do not
question that the support of a domestic branch office could aid
the larger international organization to some extent. But, in
contrast to the direct aid to the wholly foreign organization at
issue in HLP and the clear possibility of freeing up assets, the
link between the services at issue here and the freeing of
resources is less direct and more speculative.
Relatedly, in HLP specific evidence, in the form of sworn
affidavits, demonstrated that the entities had siphoned off
humanitarian funding for violent purposes. By contrast, there
is no evidence that, since the designation of AHIF-Oregon,
the larger AHIF organization has spent any funds, or would
spend any funds, supporting AHIF-Oregon. In the many years
since its designation, the larger AHIF organization apparently
has left AHIF-Oregon to its own, frozen devices. It is only
speculative to conclude that aiding AHIF-Oregon with its
public relations campaign would free up resources heretofore
not spent by the larger AHIF organization. In addressing the
plaintiffs’ first proposed activity in HLP, the Court found that
the possibility of the designated entities using the training for
sinister purposes “is real, not remote.” 130 S. Ct. at 2729.
With respect to the plaintiffs’ other proposed activity in HLP,
the Court found that the training could be used to receive
“monetary relief.” Id. We do not suggest that OFAC’s con-
cerns here are unfounded; we hold only that the connection
between the provision of services and the freeing of funds for
terrorist activities is much more attenuated here than in HLP.
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2089
2. Legitimacy Concerns
The Supreme Court’s second rationale was that coordinated
advocacy would help legitimize a terrorist organization,
which “makes it easier for those groups to persist, to recruit
members, and to raise funds—all of which facilitate more ter-
rorist attacks.” Id. at 2725. This rationale applies with almost
equal force here. MCASO’s coordinated advocacy with
AHIF-Oregon would increase that organization’s legitimacy,
which could aid its ability to persist and to recruit members.
Additionally, although there is some attenuation, as discussed
above, coordinated advocacy with AHIF-Oregon might aid
the larger AHIF organization’s efforts to raise funds.
We note, however, that this rationale is not particularly
strong. As noted above, an organization may advocate vigor-
ously on behalf of the designated entity so long as that advo-
cacy is independent. We see only a small difference, for
purposes of determining the legitimizing effect, between a
vigorous independent advocacy campaign and a coordinated
advocacy campaign. Because the Supreme Court did not
reach the issue of “coordinated advocacy,” we do not know
its view on whether this rationale would apply to pure-speech
activities like a coordinated press conference. We will assume
that there is some small additional legitimization by being
able, for instance, to state that a legitimate organization’s pub-
lic relations campaign is “on behalf of” a designated entity or
to coordinate efforts with the designated entity.
3. Foreign Policy Concerns
The Supreme Court’s final rationale was that “[p]roviding
foreign terrorist groups with material support in any form also
furthers terrorism by straining the United States’ relationships
with its allies and undermining cooperative efforts between
nations to prevent terrorist attacks.” Id. at 2726. In HLP, the
government supported that rationale with a sworn affidavit
describing “a violent insurgency waged by” one of the foreign
2090 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
designated entities against Turkey and describing the direct
effect of foreign activities of the designated entities on the
foreign relations of the United States. Id. The Republic of
Turkey “would react sharply to Americans furnishing material
support to foreign groups . . . and would hardly be mollified
by the explanation that the support was meant only to further
those groups’ ‘legitimate’ activities. From Turkey’s perspec-
tive, there likely are no such activities.” Id. at 2726-27.
Like the rationale concerning the fungibility of money, we
conclude that this rationale has some, but very little, force
here. Unlike the specific evidence of ongoing conflicts
between the foreign organization and an ally of the United
States, OFAC here offers only past conduct by other branches
of the larger AHIF organization as evidence of potential strain
in the United States’ foreign relations. Moreover, the Supreme
Court’s concern about foreign nations’ perception of “Ameri-
cans furnishing material support to foreign groups,” id. at
2726 (emphasis added), is diminished to some extent here
because MCASO seeks to assist only AHIF-Oregon, a domes-
tic branch of AHIF. Admittedly, foreign nations may not
appreciate that distinction fully, just as the Court noted that
nations may not appreciate the legitimate/illegitimate distinc-
tion. But the ability of the United States to explain that it per-
mits coordinated advocacy only and with respect to only the
domestic branch of AHIF distinguishes this case from the
direct training of a wholly foreign organization actively at war
with an ally, at issue in HLP.
4. Conclusion
[29] The Supreme Court’s rationales in HLP apply to the
circumstances here, but they apply much more weakly. As the
Supreme Court instructed, prohibitions against the content of
speech, such as those here, must survive strict scrutiny. For
that reason, and because the Court carefully circumscribed its
analysis in HLP, we are hesitant to apply that decision to facts
far beyond those at issue in that case. See 130 S. Ct. at 2712
AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY 2091
(“We do not . . . address the resolution of more difficult cases
. . . .”); id. at 2730 (“[W]e in no way suggest that a regulation
of independent speech would pass constitutional muster, even
if the Government were to show that such speech benefits for-
eign terrorist organizations.”); id. (“We . . . do not suggest
that Congress could extend the same prohibition on material
support at issue here to domestic organizations.”). Indeed, the
Court’s analysis applied only to the two forms of direct train-
ing that the plaintiffs sought to provide to the designated enti-
ties in that case. The Court specifically declined to decide
whether Congress permissibly could ban coordinated advo-
cacy, such as the advocacy sought here by MCASO. In the
final analysis, HLP involved wholly foreign organizations
currently at war with a United States ally, involved specific
evidence concerning the continuing terrorist activities of those
organizations and the ability of those organizations to mis-use
the support offered by the plaintiffs, and involved proposed
training that had a “real, not remote” possibility of furthering
terrorism. Id. at 2729. By contrast, we address a domestic
branch of an international organization with little evidence
that the pure-speech activities proposed by MCASO on behalf
of the domestic branch will aid the larger international organi-
zation’s sinister purposes. In these circumstances, we hold
that OFAC’s content-based prohibitions on speech violate the
First Amendment. We therefore reverse the district court’s
dismissal of Plaintiffs’ First Amendment claim.
CONCLUSION
In summary, we hold as follows:
1. Substantial evidence supports the redesignation of
AHIF-Oregon as a specially designated global terrorist under
EO 13,224, for two of the three reasons advanced by OFAC.
We affirm the district court’s ruling to that effect under the
Administrative Procedure Act.
2. OFAC may rely on classified information to make a
designation decision. But OFAC violated AHIF-Oregon’s
2092 AL HARAMAIN ISLAMIC v. U.S. DEP’T OF TREASURY
Fifth Amendment right to due process by failing to provide
constitutionally adequate notice and a meaningful opportunity
to respond, and by failing to mitigate the use of classified
information by, for example, preparing and disclosing an
unclassified summary. Nonetheless, because the outcome of
the designation process in this instance would not have been
altered by respecting those due process rights, those constitu-
tional errors were harmless and no judicial relief is available
to AHIF-Oregon. Again, we affirm the district court’s ruling.
3. OFAC violated AHIF-Oregon’s Fourth Amendment
right to be free from unreasonable seizures when it froze that
domestic entity’s assets without ever obtaining a warrant.
Accordingly, we reverse the district court’s contrary ruling.
With respect to any potential remedy, because the parties did
not brief the issue and because the district court has not ruled
on it, we remand for that court to consider, in the first
instance, what relief, if any, may be available to AHIF-
Oregon.
4. MCASO has a First Amendment right to engage in the
forms of coordinated advocacy that it seeks, such as holding
a joint press conference with AHIF-Oregon. The content-
based prohibitions on MCASO’s speech violate the First
Amendment. We therefore reverse the district court’s dis-
missal of Plaintiffs’ First Amendment claim.
AFFIRMED in part, REVERSED in part, and
REMANDED. The parties shall bear their own costs of
appeal.