defendants’ opposition to plaintiff’s motion for … · 2020-06-19 · admin., no. cv 20-970,...

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

ASKAN HOLDINGS, Plaintiff, v. U.S. DEPARTMENT OF THE TREASURY, OFFICE OF FOREIGN ASSETS CONTROL; STEVEN MNUCHIN, in his official capacity as Secretary of the U.S. Department of the Treasury; and ANDREA GACKI, in her official capacity as Director of the U.S. Department of the Treasury, Office of Foreign Assets Control; Defendants.

))) ) ) ) ) ) ) ) ) ))

Civil Action No. 1:20-cv-1458 (RJL)

DEFENDANTS’ OPPOSITION TO PLAINTIFF’S MOTION FOR INJUNCTIVE RELIEF OR IN THE ALTERNATIVE FOR MANDAMUS

Case 1:20-cv-01458-RJL Document 11 Filed 06/19/20 of 36

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TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 1 BACKGROUND ............................................................................................................................ 2 I. STATUTORY AND REGULATORY BACKGROUND .................................................. 2 A. Historical Overview .............................................................................................. 2 B. Extension of the President’s authorities under IEEPA .......................................... 3 C. Executive Order 13224 and the GTSR .................................................................. 4 D. OFAC’s licensing authority ................................................................................... 5 II. FACTUAL BACKGROUND ............................................................................................. 6 III. AGENCY ACTION CHALLENGED IN THIS CASE ...................................................... 8 STANDARD OF REVIEW ............................................................................................................ 9 ARGUMENT ................................................................................................................................ 11 I. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO

PREVAIL ON THE MERITS OF ITS CLAIMS ............................................................. 11

A. Plaintiff is not likely to succeed on the merits of its due process claim because it is not automatically entitled to the information that it seeks ................................... 11

B. Plaintiff’s § 706(1) claim is moot because OFAC has acted on its license

application ................................................................................................................... 17

C. Plaintiff’s premature claim that OFAC’s denial of its license application was arbitrary and capricious is not a basis for preliminary relief ...................................... 18

II. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO BE

IRREPARABLY HARMED ABSENT A PRELIMINARY INJUNCTION ................... 21 III. THE BALANCE OF THE EQUITIES WEIGHS HEAVILY AGAINST

ISSUING INJUNCTIVE RELIEF .................................................................................... 25 CONCLUSION ............................................................................................................................. 28


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TABLE OF AUTHORITIES CASES Aamer v. Obama,

742 F.3d 1023 (D.C. Cir. 2014) ................................................................................................ 10 Air Cargo v. U.S. Postal Serv.,

674 F.3d 852 (D.C. Cir. 2012) .................................................................................................. 27 Al Haramain Islamic Found., Inc. v. U.S. Dep’t of Treasury,

686 F.3d 965 (9th Cir. 2012) ............................................................................................. passim Am. Ass’n of Political Consultants v. United States Small Bus. Admin.,

No. CV 20-970, 2020 WL 1935525 (D.D.C. Apr. 21, 2020) ............................................. 22, 23 Archdiocese v. Wash. Metro Area Transit Auth.,

897 F.3d 314 (D.C. Cir. 2018) .................................................................................................. 10 Arriva Med. LLC v. United States Dep't of Health & Human Servs.,

239 F. Supp. 3d 266 (D.D.C. 2017) .......................................................................................... 23 Balt. Gas & Elec. Co. v. NRDC,

462 U.S. 87 (1983) .................................................................................................................... 18 Bell Atl. Corp. v. Twombly,

550 U.S. 544 (2007) .................................................................................................................. 20 BHM Healthcare Sols., Inc. v. URAC, Inc.,

320 F. Supp. 3d 1 (D.D.C. 2018) .............................................................................................. 10 Chaplaincy of Full Gospel Churches v. England,

454 F.3d 290 (D.C. Cir. 2006) .................................................................................................. 21 Clarke v. United States,

915 F.2d 699 (D.C. Cir. 1990) .................................................................................................. 17 Cobell v. Norton,

391 F.3d 251 (D.C. Cir. 2004) .................................................................................................... 9 Comm. in Solidarity with People of El Sal. (CISPES) v. Sessions,

929 F.2d 742 (D.C. Cir. 1991) .................................................................................................. 22 Conservation Force, Inc. v. Jewell,

733 F.3d 1200 (D.C. Cir. 2013) ................................................................................................ 18


iii

Cornish v. Dudas, 540 F. Supp. 2d 61 (D.D.C. 2008) ............................................................................................ 22

Ctr. for Biological Diversity v. Kempthorne,

498 F. Supp. 2d 293 (D.D.C. 2007) .......................................................................................... 18 Dallas Safari Club v. Bernhardt,

--- F. Supp. 3d --, 2020 WL 1809181 (D.D.C. Apr. 9, 2020) ............................................. 21, 25 Dames & Moore v. Regan,

453 U.S. 654 (1981) .............................................................................................................. 2, 26 Dorfmann v. Boozer,

414 F.2d 1168 (D.C. Cir. 1969) ................................................................................................ 10 Elk Assocs. Funding Corp. v. U.S. Small Bus. Admin.,

858 F. Supp. 2d 1 (D.D.C. 2012) .............................................................................................. 20 English v. Trump,

279 F. Supp. 3d 307 (D.D.C. 2018) .......................................................................................... 11 F.T.C. v. Standard Oil Co.,

449 U.S. 232 (1980) .................................................................................................................. 24 FBME Bank Ltd. v. Lew,

125 F. Supp. 3d 109 (D.D.C. 2015) .......................................................................................... 15 FBME Bank Ltd. v. Lew,

209 F. Supp. 3d 299 (D.D.C. 2016) .......................................................................................... 12 Feng Wang v. Pompeo,

354 F. Supp. 3d 13 (D.D.C. 2018) ............................................................................................ 11 Fla. EB5 Investments, LLC v. Wolf,

No. CV 19-3573 (RJL), 2020 WL 1079181 (D.D.C. Mar. 6, 2020) .................................... 9, 22 Florida Power & Light Co. v. Lorion,

470 U.S. 729 (1985) .................................................................................................................. 27 Foretich v. United States,

351 F.3d 1198 (D.C. Cir. 2003) ................................................................................................ 17 Fund for Animals v. Frizzell,

530 F.2d 982 (D.C. Cir. 1975) .................................................................................................. 25


iv

Gilbert v. Homar, 520 U.S. 924 (1997) .................................................................................................................. 13

Greater New Orleans Fair Hous. Action Ctr. v. HUD,

639 F.3d 1078 (D.C. Cir. 2011) ................................................................................................ 10 Guttenberg v. Emery,

26 F. Supp. 3d 88 (D.D.C. 2014) .............................................................................................. 22 Holy Land Found. for Relief & Dev. v. Ashcroft,

219 F. Supp. 2d 57 (D.D.C. 2002), aff’d, 333 F.3d 156 (D.C. Cir. 2003) ........................................................................................ 26

Honig v. Doe,

484 U.S. 305 (1988) .................................................................................................................. 17 Int’l Fabricare Inst. v. EPA,

972 F.2d 384 (D.C. Cir. 1992) .................................................................................................. 20 Islamic Am. Relief Agency. v. Gonzales,

477 F.3d 728 (D.C. Cir. 2007) .................................................................................................. 27 Jifry v. FAA,

370 F.3d 1174 (D.C. Cir. 2004) .......................................................................................... 12, 15 John Doe Co. v. Consumer Fin’l Protection Bur.,

849 F.3d 1129 (D.C. Cir. 2017) .......................................................................................... 21, 22 KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner,

647 F.2d 857 (N.D. Ohio 2009) ................................................................................................ 14 KindHearts for Charitable Humanitarian Dev., Inc. v. Geithner,

647 F. Supp. 2d 857 (N.D. Ohio 2009) ......................................................................... 16, 17, 26 Live365, Inc. v. Copyright Royalty Bd.,

698 F.Supp.2d 25 (D.D.C. 2010) .............................................................................................. 24 Marsh v. Ore. Nat. Res. Council,

490 U.S. 360 (1989) ............................................................................................................ 18, 20 Mathews v. Eldridge,

424 U.S. 319 (1976) .................................................................................................................. 13 Mdewakanton Sioux Indians of Minnesota v. Zinke,

255 F. Supp. 3d 48 (D.D.C. 2017) ............................................................................................ 24


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Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29 (1983) .............................................................................................................. 18, 19

Munaf v. Geren,

553 U.S. 674 (2008) .................................................................................................................... 9 National Council of Resistance of Iran v. Department of State,

251 F.3d 192 (D.C. Cir. 2001) .................................................................................................. 14 Newark Pre-Sch. Council, Inc. v. HHS,

201 F. Supp. 3d 72 (D.D.C. 2016) ...................................................................................... 10, 11 Newdow v. Bush,

355 F. Supp. 2d 265 (D.D.C. 2005) .......................................................................................... 25 Newdow v. Roberts,

603 F.3d 1002 (D.C. Cir. 2010) ................................................................................................ 17 Nken v. Holder,

556 U.S. 418 (2009) .................................................................................................................. 25 Orvis v. Brownell,

345 U.S. 183 (1953) .................................................................................................................... 2 Elec. Privacy Info. Ctr. v. DOJ,

15 F. Supp. 3d 32 (D.D.C. 2014) .............................................................................................. 11 Propper v. Clark,

337 U.S. 472 (1949) .................................................................................................................... 2 Pursuing Am.’s Greatness v. FEC,

831 F.3d 500 (D.C. Cir. 2016) .................................................................................................. 25 Rafeedie v. INS,

880 F.2d 506 (D.C. Cir. 1989) .................................................................................................. 19 Regan v. Wald,

468 U.S. 222 (1984) .................................................................................................................... 3 Sampson v. Murray,

415 U.S. 61 (1974) .................................................................................................................... 22 Sherley v. Sebelius,

644 F.3d 388 (D.C. Cir. 2011) .................................................................................................. 10


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Steffel v. Thompson, 415 U.S. 452 (1974) .................................................................................................................. 17

Trump v. Comm. on Oversight & Reform of U.S. House of Representatives,

380 F. Supp. 3d 76 .................................................................................................................... 25 Univ. of Tex. v. Camenisch,

451 U.S. 390 (1981) .................................................................................................................. 11 Weinberger v. Romero–Barcelo,

456 U.S. 305 (1982) .................................................................................................................. 10 Winter v. Nat. Res. Def. Council, Inc.,

555 U.S. 7 (2008) ............................................................................................................ 9, 10, 21 Wisc. Gas. Co. v. FERC,

758 F.2d 669 (D.C. Cir. 1985) ...................................................................................... 21, 22, 23 Zarmach Oil Servs., Inc. v. U.S. Dep’t of the Treasury,

750 F. Supp. 2d 150 (D.D.C. 2010) .................................................................................... 20, 21 Zevallos v. Obama,

793 F.3d 106 (D.C. Cir. 2015) ............................................................................................ 13, 27 Zevallos v. Obama,

10 F. Supp. 3d 111 (D.D.C. 2014) ...................................................................................... 18, 20 STATUTES 5 U.S.C. § 702 ............................................................................................................................... 23 5 U.S.C. § 706 ............................................................................................................... 7, 11, 18, 20 50 U.S.C. § 1701 ............................................................................................................................. 3 50 U.S.C. § 1702 ............................................................................................................. 3, 4, 20, 26 50 U.S.C. § 1705 ........................................................................................................................... 27 50 U.S.C. § 4305 ............................................................................................................................. 2 Pub. L. No. 107-56, 115 Stat. 272 (2001) ....................................................................................... 4 40 Stat. 411 (codified as amended at 50 U.S.C. § 4301 et seq.) ..................................................... 2


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REGULATIONS 31 C.F.R. Part 594........................................................................................................................... 4 31 C.F.R. section 594 .................................................................................................................... 14 31 C.F.R. § 501.801 ........................................................................................................................ 5 31 C.F.R. § 594.202 ........................................................................................................................ 5 31 C.F.R. § 594.203 ...................................................................................................................... 23 31 C.F.R. § 594.307 ........................................................................................................................ 5 31 C.F.R. § 594.404 ........................................................................................................................ 5 31 C.F.R. § 594.503 ........................................................................................................................ 5 31 C.F.R. § 594.310 ........................................................................................................................ 4 RULES Local R. 7 ................................................................................................................................ 14, 15 OTHER AUTHORITIES Exec. Order No. 13,224,

66 Fed. Reg. 49,079 (Sept. 23, 2001) ............................................................................... 3, 4, 27 Exec. Order No. 13,886,

84 Fed. Reg. 177 (Sept. 9, 2019) ................................................................................................ 5 S. Rep. No. 95-466 (1977), reprinted in 1977 U.S.C.C.A.N. 4540 ................................................ 3


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INTRODUCTION

The motion for a preliminary injunction brought by Plaintiff Askan Holdings, Ltd.—a

Seychelles-registered holding company and subsidiary of a Romanian airline company that was

party to an unsuccessful 2015 purchase agreement for a second-hand aircraft—is a request for

emergency relief in search of an actual emergency. The Department of the Treasury’s Office of

Foreign Assets Control (“OFAC”) has blocked Plaintiff’s down payment for the aircraft purchase,

and OFAC has twice denied licenses to Plaintiff for the return of these funds because a person

designated by OFAC has an interest therein. Plaintiff’s motion for injunctive relief is premised on

the supposed harm it is suffering from not having what it believes to be sufficient information to

understand OFAC’s basis for the blocking, and its motion seeks the full relief that it requests in

the underlying case.

Because it fails all aspects of the three-factor test necessary for issuing a preliminary

injunction, Plaintiff’s motion should be denied. First, Plaintiff has not established that it will

prevail on the merits of its claims under the due process clause of the Fifth Amendment and the

Administrative Procedure Act (“APA”). Plaintiff’s due process claim cannot be the basis for

injunctive relief because it is not entitled to the information it seeks, including the identity of the

target and unclassified summaries of any classified information, simply by virtue of the fact that it

has filed a lawsuit. Also unlikely to succeed are Plaintiff’s APA claims; since Plaintiff filed its

motion, OFAC has acted on its second license application, rendering moot Plaintiff’s unreasonable

delay claim, and its contention that OFAC’s final decision is arbitrary and capricious duplicates

its due process claim and, in any event, is premature.

Plaintiff’s motion fares no better under the remainder of the preliminary injunction

analysis. Plaintiff has not demonstrated that it will be irreparably harmed in the absence of an


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injunction; not only did Plaintiff wait years after first learning that the funds were blocked to file

suit, but the harm it now identifies is purely economic, which, as this Court observed, does not

provide a basis to issue an injunction. Finally, the balance of the equities heavily weighs in the

Government’s favor. Courts have repeatedly recognized that OFAC’s sanctions authority is an

important foreign policy and national security tool that should not be interfered with, even where

the rights of supposedly innocent third parties are implicated. Nor should Plaintiff be able to obtain

in the context of a preliminary injunction all—if not more—of the relief that it seeks in this case.

For all of these reasons, Plaintiff’s request for emergency relief should be denied, and this case

should proceed in the ordinary course.

BACKGROUND

I. STATUTORY AND REGULATORY BACKGROUND

A. Historical overview

The United States has long utilized economic sanctions as a tool in its foreign policy and

national security arsenals. During most of the twentieth century, U.S. sanctions programs were

governed by the Trading With the Enemy Act (“TWEA”), enacted in 1917. See 40 Stat. 411

(codified as amended at 50 U.S.C. § 4301 et seq.). As amended in 1933, TWEA granted the

President “broad authority” to “investigate, regulate . . . prevent or prohibit . . . transactions” in

times of war or declared national emergencies. See 50 U.S.C. § 4305(b)(1); Dames & Moore v.

Regan, 453 U.S. 654, 672 (1981). TWEA conveys to the Executive Branch the authority to

regulate, prevent, or prohibit transactions, which has been consistently interpreted to encompass

the power to block or freeze a person’s property. See, e.g., Orvis v. Brownell, 345 U.S. 183, 187-

88 (1953); Propper v. Clark, 337 U.S. 472, 483-84 (1949).


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B. Extension of the President’s authorities under IEEPA

In 1977, Congress amended TWEA and enacted IEEPA. See S. Rep. No. 95-466, at 2

(1977), reprinted in 1977 U.S.C.C.A.N. 4540, 4541. IEEPA extended the President’s authority to

declared national emergencies, while TWEA’s application was limited to periods of declared wars.

See Regan v. Wald, 468 U.S. 222, 227-28 (1984). Although the broad authorities granted to the

President under IEEPA remain essentially the same as those under TWEA, with certain limited

exceptions, see id. at 228, IEEPA requires the President to declare a national emergency “to deal

with any unusual and extraordinary threat, which has its source in whole or substantial part outside

the United States, to the national security, foreign policy, or economy of the United States,” see

50 U.S.C. § 1701(a). Once such a national emergency is declared, IEEPA authorizes the President

to:

. . . direct and compel, nullify, void, prevent or prohibit, any . . . transfer . . . of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest . . . with respect to any property, subject to the jurisdiction of the United States . . . .

Id. § 1702(a)(1)(B).

Pursuant to this expansive authority, Presidents have designated persons under sanctions

programs based on IEEPA in response to a variety of declared national emergencies. See, e.g.,

Exec. Order No. 13224, 66 Fed. Reg. 49079 (Sept. 23, 2001) (blocking assets of persons

determined “to have committed, or to pose a significant risk of committing, acts of terrorism that

threaten” U.S. national security). In October 2001, the Uniting and Strengthening America by

Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 amended

IEEPA. Among other things, the amendments provided that, in case of judicial review of an

IEEPA-based blocking designation, an agency record containing classified information “may be


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submitted to the reviewing court ex parte and in camera.” See 50 U.S.C. § 1702(c), added by Pub.

L. No. 107-56, § 106, 115 Stat. 272, 278 (2001).

C. Executive Order 13224 and the GTSR

In the wake of the September 11, 2001 attacks, the U.S. Government has made considerable

efforts to locate and target sources of terrorist funding, and it has drawn upon a range of tools to

disrupt funding channels and networks. See Declaration of Andrea Gacki (attached), ¶ 13. Critical

to this effort has been Executive Order 13224 (“E.O. 13224”), which was signed on September 23,

2001 and declared a national emergency to address the “unusual and extraordinary threat to [U.S.]

national security, foreign policy, and economy” posed by “grave acts of terrorism and threats of

terrorism committed by foreign terrorists,” including the September 11 attacks, as well as “the

continuing and immediate threat of further attacks on United States nationals or the United States.”

Exec. Order 13224, Blocking Property and Prohibiting Transactions With Persons Who Commit,

Threaten to Commit, or Support Terrorism, 66 Fed. Reg. 49079, 49079 (Sept. 23, 2001). E.O.

13224 blocked “all property and interests in property” of the persons specifically identified in an

Annex to the E.O. or who are designated by the Secretaries of State or the Treasury pursuant to

specified criteria. Id.

E.O. 13224 authorizes the Secretary of the Treasury to “employ all powers granted to the

President by IEEPA,” to promulgate rules and regulations to carry out the purposes of the Order,

and to re-delegate such functions. See id. at 49080; see generally 31 C.F.R. Part 594 (the “Global

Terrorism Sanctions Regulations”). A person whose property or interests in property is blocked

pursuant to section 201(a) of the GTSR is known as a Specially Designated Global Terrorist

(“SDGT”). See 31 C.F.R. § 594.310. In 2019, EO 13224 was amended to, among other things,

expand the scope of persons eligible to be blocked pursuant to that authority to include foreign


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persons determined “to have committed or have attempted to commit, to pose a significant risk of

committing, or to have participated in training to commit acts of terrorism that threaten the security

of United States nationals or the national security, foreign policy, or economy of the United

States.” See Exec. Order No. 13886, 84 Fed. Reg. 177 (Sept. 9, 2019). OFAC’s actions at issue

in this case were taken pursuant to E.O. 13224 prior to its amendment in 2019 and the GTSR. See

Gacki Decl. ¶ 16.

D. OFAC’s licensing authority

Once an SDGT is designated, all property and interests in property of the SDGT that are in

the United States, come within the United States, or are or come within the possession or control

of a U.S. person are blocked, and the GTSR do not allow for that interest to be extinguished absent

authorization from OFAC in the form of a license. See 31 C.F.R. § 594.202; 31 C.F.R.

§ 594.404(b). Such licenses may be either “general” or “specific.” 31 C.F.R. § 594.307. A

specific license may be issued where a person requests authorization to conduct an otherwise

prohibited transaction or service. 31 C.F.R. § 501.801(b)(2). Persons whose license applications

are denied are permitted to seek reconsideration of the denial by providing new facts or changed

circumstances that the applicant believes warrants a different decision. Id. § 501.801(b)(5).

OFAC’s regulations permit, but do not compel, the issuance of licenses if certain criteria

are met. 31 C.F.R. § 594.503; see also Gacki Decl. ¶ 19. The agency’s regulatory authority grants

it discretion to consider U.S. national security and foreign policy objectives when deciding whether

to grant or deny a license. 31 C.F.R. § 594.503; see also Gacki Decl. ¶ 19. Because these

considerations are complex, subtle, and ever-changing, OFAC evaluates each application for a

specific license on a case-by-case basis in light of all relevant facts and circumstances, including

the nature of the sanctions program pursuant to which the blocking occurred, whether national


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security and foreign policy concerns have changed, and the novel circumstances underlying each

request. Gacki Decl. ¶ 19. OFAC’s policy, moreover, contemplates that property and interests in

property generally should remain blocked until the sanctions on the designated person are lifted or

the national emergency justifying the designation has terminated. Id. ¶ 20. Consistent with this

policy, OFAC issues licenses releasing blocked property only in limited circumstances, and very

rarely when the license request is to engage in commercial activity. Id.

II. FACTUAL BACKGROUND

Plaintiff Askan Holdings, Ltd., is a Seychelles-registered aircraft holding company, and a

wholly owned subsidiary and the dedicated holding company of Transylvania International

Airlines SRL (“TIA”).1 Compl., ECF No. 1, ¶ 1. In 2015, Plaintiff contracted with a Turkish

company called Jazz Jet Aviation to serve as a middle man for purchasing a second-hand aircraft,

which Plaintiff alleges was to shore up TIA’s commercial airline business. Id. ¶¶ 9-10. Plaintiff

alleges that it entered into a letter of intent to purchase an Airbus 320. Id. ¶ 12. That letter of

intent was signed by Plaintiff and Jazz Jet Aviation; Plaintiff did not (and does not) identify the

owner of the Airbus 320 or the owner’s location. See id. As part of its obligations under the letter

of intent, Plaintiff deposited $920,000 of the $9,200,000 purchase price of the airplane with

Froriep, a Swiss law firm that served as an escrow agent. Id. ¶ 14. Ultimately, the agreement

between Plaintiff and Jazz Jet fell apart when the latter was unable to secure possession of the

Airbus 320. Id. ¶¶ 15-17.

1 Defendants refer to the Complaint here for purposes of conveying information as it was alleged in the Complaint. With the exception of the Complaint’s discussion of Plaintiff’s efforts to obtain a specific license, Defendants are not in a position to know whether the allegations in the Complaint discussed herein are true.


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Plaintiff’s $920,000 down payment was placed at Deutsche Bank Trust Company

Americas, where it currently resides. Id. ¶ 18. After Plaintiff’s deal fell apart, Froriep’s attempt

to transfer the funds from the bank back to Askan was unsuccessful because the funds were

blocked. Id. On May 18, 2016, Plaintiff submitted a license request for release of the blocked

funds. See Gacki Decl. ¶ 24. OFAC denied that request on May 2, 2017 after determining that a

person blocked pursuant to the GTSR had an interest in the blocked funds and that such a license

would be inconsistent with its licensing policies. See Gacki Decl. ¶ 24. Plaintiff submitted a

second request for a license on October 9, 2019, seeking reconsideration of OFAC’s May 2, 2017

denial. See 10/9/19 License Application, ECF No. 1-1 (attached as Exhibit A to Plaintiff’s

Complaint); Plaintiff explained that it had not been able to identify any SDGT interests in the

transaction, and if there were any such interests, they were not “readily apparent.” Id. After

reviewing the information submitted by Plaintiff and determining that a person blocked pursuant

to the GTSR had an interest in the funds, OFAC concluded that release of the funds would be

inconsistent with its policy and denied Plaintiff’s second request. Gacki Decl. ¶ 24. OFAC issued

this decision on June 12, 2020. Id.; see also 6/12/20 License Denial (attached as Exhibit A).

Plaintiff initiated this case on June 2, 2020, filing a Complaint that asserts three causes of

action. First, Plaintiff alleges that OFAC’s blocking of funds and refusal to grant Plaintiff a license

is arbitrary and capricious in violation of § 706(2)(A) of the APA. See Compl. ¶¶ 30-32. Second,

Plaintiff contends that, because OFAC had not responded to its October 9, 2019 request for a

license at the time the Complaint was filed, OFAC was unlawfully withholding agency action in

violation of § 706(1) of the APA. Id. ¶¶ 34-41. Third, Plaintiff asserts that OFAC has violated its

due process rights by failing to provide it with certain information about its license denial,

including unclassified information and the identity of the person blocked pursuant to the GTSR.


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Id. ¶¶ 44-47. Plaintiff seeks an injunction ordering OFAC to issue a decision on its license

application or to stop blocking the return of the down payment, as well as declaratory and

mandamus relief. Id. Prayer for Relief.

Also on June 2, 2020, Plaintiff filed a motion styled as a request for injunctive relief or, in

the alternative, for mandamus. See Pl.’s Mot. for Inj. Relief or in the Alt. for Mandamus (“Pl.’s

PI Mot.”), ECF No. 3, at 1. The relief Plaintiff seeks in that motion exceeds that which it seeks in

the Complaint. Whereas the Complaint requests simply that the Court order OFAC to issue a

decision on Plaintiff’s most recent licensing request or stop blocking the funds, see Compl. at

Prayer for Relief, Plaintiff’s motion requests an injunction ordering OFAC to either (1) grant the

application or, (2) if the application is denied, identify the person or persons whose interest in

property is blocked pursuant to the GTSR and provide Plaintiff with all of the unclassified facts

supporting OFAC’s decision and unclassified summaries of the any classified information, see

Pl.’s PI Mot. at 1.

On June 9, 2020, the Court held a telephonic status conference to discuss Plaintiff’s motion.

During that status conference, the Court construed Plaintiff’s motion as one seeking a preliminary

injunction. See Tr. of 6/9/20 Tel. Status Conf. (attached as Exhibit B) at 13:25 – 14:1. The Court

further directed OFAC to provide by June 19, 2020 the agency’s “best estimate” of when it can

provide an unclassified record regarding OFAC’s prior license denial. Id. at 15:1-5.

III. AGENCY ACTION CHALLENGED IN THIS CASE

For the sake of clarity, Defendants note that the agency action referred to throughout this

memorandum is OFAC’s June 12, 2020 license denial. Although Plaintiff’s Complaint purports

to challenge OFAC’s May 2, 2017 license denial, see Compl. ¶ 23; see also Tr. of 6/9/20 Tel.

Status Conf. at 15:15 (directing OFAC to provide unclassified record for “OFAC’s prior license


9

denial”), OFAC has since issued a decision on June 12, 2020 again denying Plaintiff a license.

Because OFAC’s June 12 decision was a denial of Plaintiff’s request for reconsideration of

OFAC’s May 2, 2017 denial, OFAC’s prior decision has been supplanted by the June 12 decision.

Defendants submit that this distinction is immaterial with respect to the contents of the

Administrative Record in this case: all of the materials that OFAC considered, directly or

indirectly, for its May 2, 2017 denial will be included in the Administrative Record for the June

12, 2020 reconsideration denial.2

STANDARD OF REVIEW

A preliminary injunction is an “extraordinary and drastic remedy” that is “never awarded

as of right.” Munaf v. Geren, 553 U.S. 674, 689-90 (2008). Instead, a preliminary injunction “may

only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat.

Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). To obtain such relief, a plaintiff “must establish

[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the

absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an

injunction is in the public interest.” Id. at 20. And the movant carries the burden of persuasion.

See Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004); Fla. EB5 Investments, LLC v. Wolf, No.

CV 19-3573 (RJL), 2020 WL 1079181 (D.D.C. Mar. 6, 2020).

The Court of Appeals has emphasized that the “first and most important factor” is whether

the moving party has “established a likelihood of success on the merits.” Aamer v. Obama, 742

F.3d 1023, 1038 (D.C. Cir. 2014). “When a plaintiff has not shown a likelihood of success on the

merits, [we need not] consider the other factors.” Greater New Orleans Fair Hous. Action Ctr. v.

2 This same point, moreover, holds true to the extent that Plaintiff purports to challenge OFAC’s blocking of Askan’s funds (as opposed to the denial of its license request). The distinction makes no difference in the Administrative Record.


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HUD, 639 F.3d 1078, 1088 (D.C. Cir. 2011). The Supreme Court has also instructed that a

preliminary injunction cannot issue on the basis of speculative or possible injury. Rather, the

moving party must establish that irreparable harm is at least “likely in the absence of an

injunction.” Winter, 555 U.S at 22.3 Finally, “courts of equity should pay particular regard for the

public consequences in employing the extraordinary remedy of injunction.” Weinberger v.

Romero–Barcelo, 456 U.S. 305, 312 (1982).

Moreover, the D.C. Circuit “has expressly cautioned that ‘[t]he power to issue a

preliminary injunction, especially a mandatory one, should be ‘sparingly exercised,’” Newark Pre-

Sch. Council, Inc. v. HHS, 201 F. Supp. 3d 72, 78 (D.D.C. 2016) (quoting Dorfmann v. Boozer,

414 F.2d 1168, 1173 (D.C. Cir. 1969)), and has characterized the standard for a mandatory

preliminary injunction as “demanding.” Archdiocese v. Wash. Metro Area Transit Auth., 897 F.3d

314, 319 (D.C. Cir. 2018). Heeding these warnings, courts in this Circuit have held that a party

seeking a preliminary injunction bears a “significantly heightened” burden when, as here, “a

plaintiff requests affirmative injunctive relief” that would change the status quo rather than merely

preserving it. Feng Wang v. Pompeo, 354 F. Supp. 3d 13, 20 (D.D.C. 2018); accord English v.

Trump, 279 F. Supp. 3d 307, 316 (D.D.C. 2018). This heightened burden is warranted because, at

its core, “‘[t]he purpose of a preliminary injunction is merely to preserve the relative positions of

3 In Sherley v. Sebelius, 644 F.3d 388, 393 (D.C. Cir. 2011), the Court of Appeals noted that Winter called into question the “sliding-scale approach” to consideration of the preliminary injunction factors that had been the law of this Circuit. The Court read “Winter at least to suggest if not to hold that a likelihood of success is an independent, free-standing requirement for a preliminary injunction” such that a “movant cannot obtain a preliminary injunction without showing both a likelihood of success and a likelihood of irreparable harm.” Id. at 393; see BHM Healthcare Sols., Inc. v. URAC, Inc., 320 F. Supp. 3d 1, 7 (D.D.C. 2018). Noting a split among the circuits on the interpretation of Winter, the Court of Appeals held that it did not need to resolve the question because the movant in Sherley failed to establish an entitlement to a preliminary injunction under the “less demanding sliding-scale” approach. Id. This Court need not address this issue here, as Plaintiff’s claims for relief fail under either standard.


11

the parties’” while the Court decides the merits of a plaintiff’s claim. Newark Pre-Sch. Council,

Inc., 201 F. Supp. 3d at 78 (quoting Univ. of Tex., 451 U.S. at 395). Courts thus have held that a

party seeking a mandatory injunction must “clearly” show that “he or she is entitled to relief or

that extreme or very serious damage will result from the denial of the injunction.” Elec. Privacy

Info. Ctr. v. DOJ, 15 F. Supp. 3d 32, 39 (D.D.C. 2014) (collecting cases). For the reasons discussed

below, Plaintiff cannot meet this heavy burden.

ARGUMENT

I. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO PREVAIL ON THE MERITS OF ITS CLAIMS

Plaintiff brings three claims in this case: (1) a due process challenge to the sufficiency of

information it was provided about OFAC’s reasons for blocking its funds and denying its license

application, (2) a challenge under § 706(1) of the APA that OFAC has unlawfully withheld or

unreasonably delayed a decision on its license application, and (3) a challenge under § 706(2)(A)

to OFAC’s denial of its license request on the grounds that the denial was arbitrary and capricious.

Since the time that Plaintiff filed the instant motion, OFAC has denied Plaintiff’s October 2019

license request, rendering the § 706(1) challenge moot. For the reasons discussed below, neither

of the other two claims can serve as a basis for issuing a preliminary injunction.

A. Plaintiff is not likely to succeed on the merits of its due process claim because it is not automatically entitled to the information that it seeks

Plaintiff’s motion relies heavily on its assertion that OFAC is violating its Fifth

Amendment right to due process by not providing it with information about the reasons why the

agency has blocked the transfer of Plaintiff’s down payment currently being held by Deutsche

Bank America. Pl.’s PI Mot. at 7-10. In particular, Plaintiff demands that OFAC “immediately”

provide it with “all of the unclassified information in the administrative record supporting the


12

government action” as well as unclassified summaries of classified information in the record. Id.

at 8. Plaintiff also seeks “the identity of the party or parties that triggered OFAC to act.” Id. at 9.

In actuality, OFAC is not obligated to provide Plaintiff with all of this information in order to

satisfy due process requirements (assuming such protections apply to Plaintiff), and none of this

information is required at this stage of the litigation.

To begin, it is not certain that Plaintiff is entitled to due process rights because it appears

to have, at best, extremely limited connections to the United States. Plaintiff is a Seychelles-

registered aircraft holding company and a wholly owned subsidiary and the dedicated holding

company of TIA, a Romanian company which operates aircraft. Compl. ¶ 1. TIA’s director and

sole shareholder is an individual named Nizam Kucuk Akyuz, who Plaintiff does not allege to be

a U.S. citizen or otherwise have connections to the United States. Id. Indeed, the only connection

Plaintiff does identify is the fact that its blocked funds are held in a U.S. bank account, but even

that bank account is not alleged to belong to Plaintiff. See id. ¶ 14. Plaintiff has cited no case

where full due process protections have been extended to a foreign entity with no physical presence

and merely had blocked funds transiting through the U.S. financial system. Indeed, case law out

of this Circuit suggests the opposite. See, e.g., Jifry v. FAA, 370 F.3d 1174, 1182 (D.C. Cir. 2004)

(“[N]on-resident aliens who have insufficient contacts with the United States are not entitled to

Fifth Amendment protections); FBME Bank Ltd. v. Lew, 209 F. Supp. 3d 299, 328 (D.D.C. 2016)

(“[F]inding due process protections under these circumstances would be inconsistent with

Verdugo–Urquidez’s requirement that the foreign entity ‘come within the territory’ of the United

States, which suggests at least some degree of physical presence. As a result, the Court concludes

that FBME has likely not met its burden to establish an entitlement to due process as a general

matter.” (internal citation omitted)).


13

Assuming Plaintiff can invoke the protections of due process, or at least insofar as such

protections could apply to the blocked funds, Plaintiff has failed to set forth a plausible due process

claim. Courts have made clear that the provision of due process does not involve a one-size-fits-

all approach. To the contrary, “due process is flexible and calls for such procedural protections as

the particular situation demands.” Gilbert v. Homar, 520 U.S. 924, 930 (1997). “The essence of

due process is the requirement that a person in jeopardy of serious loss (be given) notice of the

case against him and opportunity to meet it.” Mathews v. Eldridge, 424 U.S. 319, 348 (1976)

(internal quotation marks omitted). With regarding to OFAC’s blocking of assets, the D.C. Circuit

has held that due process does not require advanced notice, given that “providing notice before

blocking the assets of [designated persons] would create a substantial risk of asset flight.” Zevallos

v. Obama, 793 F.3d 106, 116 (D.C. Cir. 2015). Although Plaintiff does not specify whether it

believes it is entitled to pre- or post-deprivation notice, it can legally lay claim only to the latter.

Plaintiff’s due process claim on its merits cannot form the basis for a preliminary injunction

for two reasons. First, OFAC did provide Plaintiff with procedural protections when denying its

license application. Despite Plaintiff’s claim that OFAC failed to provide it “with any information

that would apprise [Plaintiff] of the reasons” OFAC blocked the funds, Pl.’s PI Mot. at 7, OFAC

informed Plaintiff in its denial letter that “the blocked funds transfer in question involves the

interest of a sanctions target” See 6/12/20 License Denial. OFAC further explained that the target

is “a Specially Designated Global Terrorist, pursuant to the Global Terrorism Sanctions

Regulations, 31 C.F.R. section 594.” Id. Plaintiff, moreover, has an available mechanism for

challenging the license denial: it can seek reconsideration of OFAC’s decision by presenting the

agency with new or additional relevant information. Id. By bringing the instant lawsuit, Plaintiff

challenges the sufficiency of the explanation for the license denial that it received, and this Court’s


14

procedures set forth the relevant procedures for review of OFAC’s decision. See, e.g., Local Rule

7(n) (contemplating, in cases concerning review of administrative agency actions, creation,

certification, and disclosure of an administrative record where the Government has “cited or

otherwise relied upon” the record in support of or in opposition to a dispositive motion). But there

is no basis to conclude that OFAC’s blocking of the funds transfer or its licensing process as

executed in this case is unconstitutional.

Second, Plaintiff’s motion misses the mark when it asserts that Plaintiff has a right to have

“immediately” certain types of information. It insists, for example, that OFAC immediately

provide “all of the unclassified information in the administrative record supporting the government

action.” Pl.’s Mot. at 8. But there is no requirement that such information be provided

immediately. Here, OFAC issued its license denial on June 12, 2020, ten days after Plaintiff

moved for a preliminary injunction, and Defendants will provide Plaintiff with the certified

unclassified administrative record for its decision in compliance with this Court’s rules. See Local

Rule 7(n); see also Tr. of 6/9/20 Tel. Status Conf. at 15:1-8 (directing OFAC to submit by June

19, 2020 an “estimate” of when it will be able to provide the unclassified administrative record to

Plaintiff). Plaintiff’s demand for the Court issue an injunction because it did not receive the

unclassified administrative record “immediately” upon filing its suit is not supported by either case

law or this Court’s procedures. And as a practical matter, such a position would be untenable:

administrative records are created as a result of the filing of a lawsuit involving an APA challenge

to a final agency action; they do not exist in a vacuum, and agencies generally do not prepare them

absent a lawsuit.

Nor is Plaintiff correct to assert that unclassified summaries of classified information are

necessary in order to comply with due process. See Pl.’s PI Mot. at 8-9 (“When the unclassified


15

information in the administrative record is insufficient to support the government’s action, the

agency must supplement the record with unclassified summaries of the classified information on

which it has based its action.”). Contrary to Plaintiff’s suggestion, unclassified summaries

generally are not required where classified information is part of an administrative record, as courts

in this Circuit have recognized on multiple occasions. See, e.g., Jifry, 370 F.3d at 1183-84 (holding

that the Government satisfied the notice requirements of due process by informing foreign pilots

that their airmen certificates had been revoked based on TSA’s determination that they were a

“security threat.”); FBME Bank Ltd. v. Lew, 125 F. Supp. 3d 109, 119 n.2 (D.D.C. 2015)

(concluding that, while “unclassified summaries of classified information on which an agency

relied may be helpful to litigants, they are not required”); Holy Land Found. for Relief & Dev. v.

Ashcroft, 333 F.3d 156, 164 (D.C. Cir. 2003) (rejecting plaintiffs’ argument “that due process

prevents its designation [by OFAC] based upon classified information to which it has not had

access”). Although the Ninth Circuit remarked, in the context of reviewing OFAC’s designation

of a non-profit corporation as a terrorist organization, that unclassified summaries “could provide

helpful information,” it did not hold that they were necessary in every instance. See Al Haramain

Islamic Found., Inc. v. U.S. Dep’t of Treasury, 686 F.3d 965, 983 (9th Cir. 2012) (“[A]n

unclassified summary may not be possible because, in some cases, the subject matter itself may be

classified and cannot be revealed without implicating national security.”); id. at 984 (“We agree

that a case-by-case approach is proper. As we have alluded to earlier, the proper measures in any

given case will depend on a number of factors.”).

Plaintiff’s request for information, moreover, is premature, even on its own terms. Plaintiff

contends that unclassified summaries are required where the unclassified administrative record “is

insufficient to support the government’s action.” Pl.’s Mot. at 8. But, as discussed above, the


16

Court has ordered only that OFAC provide an “estimate” of when the unclassified (and non-

privileged) Administrative Record will be ready, and Plaintiff cannot at present to know whether

or not it is insufficient. Consistent with Local Rule 7(n) and any scheduling order entered by the

Court, OFAC will submit the unclassified (and non-privileged) certified Administrative Record

for this case. That would be the proper time for Plaintiff to dispute the sufficiency of the Record,

not in the context of a preliminary injunction motion.

Plaintiff’s third and final demand—for OFAC “to identify the party that triggered its order

to freeze [Plaintiff’s] down payment,” see Pl.’s PI Mot. at 10—should similarly be rejected.

Plaintiff again relies on KindHearts for this proposition, but that case—a district court opinion

from outside this Circuit—concerned a due process challenge brought by a U.S. charitable

organization that itself had been “blocked pending investigation” for two years by OFAC. See

KindHearts, 647 F. Supp. 2d at 904. Nor did the court’s order in that case specifically hold that

disclosure was required where information was classified or would otherwise cause harm to U.S.

national security or law enforcement interests. Id.; see also Al Haramain, 686 F.3d at 983

(suggesting that disclosure of information would not be required where it would “implicat[e]

national security”). Indeed, this Court has rightly expressed skepticism about Plaintiff’s ability to

obtain that information. See Tr. of 6/9/20 Tel. Status Conf. at 13:10-14 (“It's a whole other thing

whether they can reveal what their sources are. The odds are overwhelming probably that their

sources are classified and they will not be able to share that with you.”). Plaintiff simply has no

basis to assert that it is entitled, as a matter of right, to know the identity of the target referenced

in OFAC’s denial letter, especially at this preliminary stage of the case.


17

B. Plaintiff’s § 706(1) claim is moot because OFAC has acted on its license application

Nor can Plaintiff show that it is likely to succeed on its claim that OFAC has unreasonably

delayed agency action by “failing to act on Askan’s application for a license.” Compl. ¶¶ 33-42.

In particular, this claim is moot because OFAC has now acted on the Plaintiffs’ second license

application and has denied it.4 See 6/12/20 License Denial. Under Article III of the Constitution,

a federal court “may only adjudicate actual, ongoing controversies.” Honig v. Doe, 484 U.S. 305,

317 (1988). “This limitation gives rise to the doctrine[ ] of ... mootness,” Foretich v. United States,

351 F.3d 1198, 1210 (D.C. Cir. 2003), which precludes judicial review where “events have so

transpired that [a judicial] decision will neither presently affect the parties’ rights nor have a more-

than-speculative chance of affecting them in the future,” Clarke v. United States, 915 F.2d 699,

701 (D.C. Cir. 1990) (en banc) (quotation marks omitted). “It is a basic constitutional requirement

that a dispute before a federal court be ‘an actual controversy extant at all stages of review, and

not merely at the time the complaint is filed.’” Newdow v. Roberts, 603 F.3d 1002, 1008 (D.C.

Cir. 2010) (quoting Steffel v. Thompson, 415 U.S. 452, 459 n.10 (1974)).

Here, the second license application was submitted to OFAC in October 2019. It was

denied on June 12, 2020. See 6/12/20 License Denial; Gacki Decl. ¶ 24. Any unreasonable delay

claim is therefore moot because the agency action demanded has been completed. See, e.g.,

Zevallos, 10 F. Supp. 3d at 123-24 (finding claim regarding delay moot after agency issued

decision); Ctr. for Biological Diversity v. Kempthorne, 498 F. Supp. 2d 293, 296–97 (D.D.C. 2007)

(agency’s issuance of decision on plaintiff’s petition for rulemaking mooted claim of unreasonable

delay and request for order requiring agency to issue decision); cf. Conservation Force, Inc. v.

4 OFAC had already acted on Plaintiff’s 2016 license application. See Compl. ¶¶ 22-23.


18

Jewell, 733 F.3d 1200, 1205 (D.C. Cir. 2013) (describing that due process claims based on delay

had become moot upon issuance of a final decision).

C. Plaintiff’s premature claim that OFAC’s denial of its license application was arbitrary and capricious is not a basis for preliminary relief

In its third claim for relief, Plaintiff contends that OFAC’s denial of a license was arbitrary

and capricious because OFAC has not provided Plaintiff “with the information that it needs to

understand the basis of OFAC’s actions” and “has forced [Plaintiff] to guess at OFAC’s actions.”

Pl.’s PI Mot. at 11. As with Plaintiff’s other two claims, the § 706(2)(A) claim cannot serve as a

basis for granting a preliminary injunction here.

To begin, Plaintiff’s § 706(2)(A) claim largely duplicates its due process claim. An

arbitrary and capricious claim challenges the soundness of an agency’s decision-making process,

see Marsh v. Ore. Nat. Res. Council, 490 U.S. 360, 378 (1989) (holding that, a court reviewing a

§ 706(2)(A) challenge “must consider whether the decision was based on a consideration of the

relevant factors and whether there has been a clear error of judgment” (citation omitted)), and,

ultimately, the question for a court undertaking this review is whether the agency’s decision is

“within the bounds of reasoned decisionmaking,” Balt. Gas & Elec. Co. v. NRDC, 462 U.S. 87,

105 (1983); see also Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463

U.S. 29, 43 (1983) (identifying four procedural errors that would permit a court to set aside an

agency decision as arbitrary and capricious).

In this case, however, Plaintiff does not allege that OFAC committed any procedural errors

in denying its license application or that OFAC’s decision-making process was not sufficiently

sound. Nor does Plaintiff suggest that blocking funds in which an SDGT has an interest is an

invalid basis for OFAC to act. Rather, Plaintiff complains that OFAC has deprived it of its

property without providing an explanation as to why, employing language mirroring that it uses to


19

plead its due process claim. See, e.g., Pl.’s PI Mot. at 11 (“By refusing to provide Askan with the

information that it needs to understand the basis of OFAC’s actions, [OFAC] has forced Askan to

have to guess at OFAC’s reasons. Where a party can only guess at the reasons for an agency’s

actions, the party cannot adequately respond and the risk that the agency will erroneously deprive

the party of its rights is high.”). Indeed, two of the cases upon which Plaintiff principally relies in

discussing its § 706(2)(A) claim—Al Haramain v. U.S. Department of Treasury and Rafeedie v.

INS5—addressed procedural due process claims separate and apart from challenges brought under

§ 706(2)(A) of the APA. Properly understood as a due process challenge, Plaintiff’s arbitrary and

capricious claim should fail for the same reasons discussed above. See supra, Section I.A; cf.

Rakhimov v. Gacki, No. CV 19-2554 (JEB), 2020 WL 1911561, at *7 (D.D.C. Apr. 20, 2020)

(describing the issuance of an unclassified summary as an “unprecedented remedy” to which

plaintiff is not entitled under the APA).

Furthermore, any attempt by Plaintiff to secure a preliminary injunction on the basis of its

arbitrary and capricious claim is premature. OFAC denied Plaintiff’s request for a license on June

12, 2020, but Plaintiff moved for a preliminary injunction on June 2, 2020, prior to it even having

knowledge as to what OFAC’s decision would be. Plaintiff thus has no basis to allege in its motion

that OFAC acted arbitrarily in denying the license or that its decision was not supported by a

rational basis because OFAC had not even made a final decision at the time the motion was filed,

let alone been able to provide a justification for that decision. Such speculation falls well short of

providing a basis to conclude that Plaintiff is likely to succeed on the merits of this claim. See Elk

Assocs. Funding Corp. v. U.S. Small Bus. Admin., 858 F. Supp. 2d 1, 24 (D.D.C. 2012) (holding

that, in the context of a likelihood-of-success-on-the-merits analysis, “conclusory and speculative

5 See Al Haramain, 686 F.3d at 986; Rafeedie v. INS, 880 F.2d 506, 516 (D.C. Cir. 1989).


20

assertions, unsupported by any competent evidence, are patently insufficient to overcome the

presumption of administrative regularity”); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007) (holding that, in order to sufficiently state a viable claim, a plaintiff’s “[f]actual allegations

must be enough to raise a right to relief above the speculative level”).6 Moreover, OFAC indicated

in its denial that an SDGT has an interest in the blocked funds. See 6/12/20 License Denial; see

also Compl. ¶¶ 22-23. Plaintiff offers nothing to contest this determination at this stage of the

case, other than assertions about consulting the SDN List and Lexis/Nexis; there is no basis at this

time for the Court to conclude, even preliminarily, that OFAC acted arbitrarily or capriciously.7

6 Indeed, Count I of the Complaint, which alleges that OFAC’s decision was arbitrary and capricious, should be dismissed for failure to state a claim. Plaintiff provides no explanation or reasons for this allegations but instead simply repeats the operative language from § 706(2)(A) in its Complaint. See Compl. ¶¶ 30-32; Twombly, 550 U.S. at 555 (“[A] plaintiff’s obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”). Implicit in Plaintiff’s claim is the notion that an agency action is de facto arbitrary and capricious whenever the agency fails to provide supporting justification for that action. Here, OFAC has articulated a basis for the denial of the license: the existence of an SDGT in the funds. Moreover, OFAC has statutory authorization to make ex parte, in camera submissions in order to defend its actions. See 50 U.S.C. § 1702(c). In such instances, just because more specific details supporting an agency’s final action are unknown to a plaintiff does not necessarily mean that they are arbitrary and capricious. See Rakhimov, 2020 WL 1911561, at *5-*6. 7 Even if Plaintiff has brought a proper § 706(2)(A) claim (as opposed to a variation of its due process claim), the Court’s review of OFAC’s license denial would be “narrow and particularly deferential.” See Marsh v. Ore. Natural Resources Council, 490 U.S. 360, 378 (1989); Int’l Fabricare Inst. v. EPA, 972 F.2d 384, 389 (D.C. Cir. 1992) (stating that this “highly deferential standard of review presumes ‘agency action to be valid’”). This deference is especially warranted here, given the national security and foreign policy underpinnings of OFAC’s sanctions program. See Zevallos, 10 F. Supp. 3d at 119 (recognizing additional deference beyond that typically accordedto an agency under the APA); Zarmach Oil Servs., Inc. v. U.S. Dep’t of the Treasury, 750 F. Supp. 2d 150, 155 (D.D.C. 2010) (“[C]ourts owe a substantial measure of ‘deference to the political branches in matters of foreign policy,’ including cases involving blocking orders.”).


21

II. PLAINTIFF HAS NOT DEMONSTRATED THAT IT IS LIKELY TO BE IRREPARABLY HARMED ABSENT A PRELIMINARY INJUNCTION

In addition to not being likely to succeed on the merits, Plaintiff has not shown that it is

likely to suffer an irreparable injury without a preliminary injunction. Among other defects in its

argument Plaintiff relies almost entirely on allegations of economic harm, but, absent highly

unusual circumstances, such allegations are an insufficient basis for an irreparable harm finding,

as this Court observed at the June 9, 2020 status conference. See Tr. of 6/9/20 Status Conference

at 8:8-14 (“THE COURT: I would encourage the plaintiffs to familiarize themselves, if they’re

not, with the irreparable-harm component of a PI in this Circuit. It’s very tough. And if it’s a

financial issue, it’s really tough. And the chances of getting a PI, unless you can show that

$900,000 is going to bring down your company, is very slim, very slim.”). And because irreparable

harm is a necessary finding for a preliminary injunction to issue, see Winter, 555 U.S at 22,

Plaintiff’s motion fails for this reason alone.

The D.C. Circuit “has set a high standard for irreparable injury.” Chaplaincy of Full Gospel

Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006). To obtain the extraordinary and drastic

remedy of preliminary injunctive relief, a plaintiff must “establish an injury that is ‘both certain

and great . . . actual and not theoretical.’” John Doe Co. v. Consumer Fin’l Protection Bur., 849

F.3d 1129, 1134 (D.C. Cir. 2017) (quoting Wisc. Gas. Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.

1985)). To meet this demanding standard, “[t]he party seeking relief must show that the

complained-of injury is so imminent that there is a clear and present need for equitable relief.”

Dallas Safari Club v. Bernhardt, --- F. Supp. 3d --, 2020 WL 1809181, at *4 (D.D.C. Apr. 9, 2020)

(citing Wisc. Gas Co., 758 F.2d at 674). “Injunctions ... will not issue to prevent injuries neither

extant nor presently threatened, but only merely feared.” Comm. in Solidarity with People of El

Sal. (CISPES) v. Sessions, 929 F.2d 742, 745–46 (D.C. Cir. 1991) (alteration in original). Neither


22

“bare allegations of harm,” id., nor “unsubstantiated and conclusory assertions,” John Doe Co.,

849 F.3d at 1134, are enough. The movant instead “must submit competent evidence into the

record that would permit the Court to assess whether [the movant], in fact, faces irreparable harm”

if an injunction is not issued. Guttenberg v. Emery, 26 F. Supp. 3d 88, 102 (D.D.C. 2014) (cleaned

up) (citing Cornish v. Dudas, 540 F. Supp. 2d 61, 65 (D.D.C. 2008)); Am. Ass’n of Political

Consultants v. United States Small Bus. Admin., No. CV 20-970, 2020 WL 1935525, at *6 (D.D.C.

Apr. 21, 2020), appeal pending (denying PI based on conclusory allegations of financial harm

without detailed documentation).

Moreover, it is “well settled” that economic harm “does not, in and of itself, constitute

irreparable harm.” Wis. Gas Co., 758 F.2d at 674; Fla. EB5 Investments, LLC v. Wolf, 2020 WL

1079181, at *3. “Recoverable monetary loss may constitute irreparable harm only where the loss

threatens the very existence of the movant’s business.” Id. Where the harm is financial, “an

insufficiency of savings or difficulties in immediately obtaining [replacement income] ... will not

support a finding of irreparable injury, however severely [it] may affect a particular individual.”

Sampson v. Murray, 415 U.S. 61, 92 (1974).

Primarily, Plaintiff seems to argue that it has suffered economic harm from the blocking of

funds, but Plaintiff has not demonstrated that such economic harm is irreparable. Plaintiff avers

that it “has suffered irreparable harm because the only way to remedy the harm is for OFAC to

issue a license.” Pl.’s PI Mot. at 12. But even if true, that statement demonstrates the exact

opposite proposition: that the harm is recoverable. If the “only” appropriate remedy here is the

issuance of a license, there is no emergency justifying preliminary relief because that same remedy


23

could issue following full consideration of the merits if the Court determined it was appropriate.8

Plaintiff has not demonstrated that any irreparable harm would occur in the interim. The only

immediate alleged harm is economic, see Wis. Gas Co., 758 F.2d at 674, and the alleged harm is

recoverable because, although monetary damages are not available, the APA permits injunctive

relief in appropriate circumstances, see 5 U.S.C. § 702.

Nor has Plaintiff even attempted to demonstrate that “the alleged loss threatens the very

existence of the movant’s business.” Id; see also Arriva Med. LLC v. United States Dep't of Health

& Human Servs., 239 F. Supp. 3d 266, 281 (D.D.C. 2017) (rejecting argument that any delay in

adjudication threatened the business because the losses threatened the business). Indeed, Plaintiff

has not submitted any evidence whatsoever regarding the harm to the business, much less the

detailed, non-conclusory declarations that might support a finding of irreparable harm. See Am.

Ass’n of Political Consultants, 2020 WL 1935525, at *6. Although Plaintiff’s counsel indicated

at the status conference that Plaintiff was unable to “launch the business,” Plaintiff still has not

submitted any evidence that would support finding that the existence of the business is threatened.

In short, the alleged financial harm is not irreparable because the funds are not seized or forfeited;

they are frozen in place, and could in theory be released if Plaintiff were successful in this action.9

Plaintiff also refers to an informational injury, claiming that “it has lost information that it

needs to be able to know what caused the purported violation, and thus to arrange its future affairs.”

Pl.’s PI Mot. at 12. But again, Plaintiff fails to explain why this is a harm, what “actual” “great”

8 Of course, the appropriate remedy here would depend on if some violation were found and the nature of that violation. If the Court found a procedural or substantive error in the license denial, it is likely that the only appropriate remedy would be a remand for additional proceedings consistent with correction of the errors found by the Court. In any event, Defendant maintains that no violation has occurred here, and no remedy is appropriate. 9 Consistent with OFAC’s regulations Plaintiff’s funds are also accruing interest while the blocking measure is in place. See 31 C.F.R. § 594.203.


24

and “imminent” harm could occur while this case is decided in the normal course, or why that

harm is irreparable, and Plaintiff submits no evidence whatsoever in support of its allegations.

The only “informational” remedy sought is disclosure of the information on which the blocking

was based. See id. at 1 (seeking disclosure of “all individuals and entities whose involvement with

the transaction justified blocking the transaction and why”; and seeking disclosure of “the

unclassified facts supporting OFAC’s decision and an unclassified summary of the classified facts

supporting its decision.”). If the Court were to determine that disclosure of additional information

is warranted following adjudication of the merits of this action, the Court could remand to the

agency with instructions to make additional disclosures (or unblock if disclosure is not possible).

Plaintiff has identified no harm that would occur in the interim.

Plaintiff also makes a passing reference to “legal fees” incurred as a result of the blocking.

Pl.’s PI Mot. at 12. But Plaintiff submits no evidence in support of that allegation, and it does not

explain why two license applications could have generated such fees. In any event, the “rule

against economic losses constituting irreparable harm applies with full force to litigation expenses”

and “[l]itigation costs cannot constitute an irreparable injury for the purposes of granting a

preliminary injunction.” Mdewakanton Sioux Indians of Minnesota v. Zinke, 255 F. Supp. 3d 48

(D.D.C. 2017); see also Live365, Inc. v. Copyright Royalty Bd., 698 F.Supp.2d 25, 45 (D.D.C.

2010) (noting that “[t]he Supreme Court has held that ‘[m]ere litigation expense, even substantial

and unrecoupable cost, does not constitute irreparable injury,’ ” even when those costs “are likely

to be substantial” (quoting F.T.C. v. Standard Oil Co., 449 U.S. 232, 244 (1980)).

Finally, Plaintiff’s delay is seeking preliminary injunctive relief militates against a finding

of irreparable harm. Courts in this jurisdiction have found that “[a]n unexcused delay in seeking

extraordinary injunctive relief may be grounds for denial because such delay implies a lack of


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urgency and irreparable harm.” Newdow v. Bush, 355 F. Supp. 2d 265, 292 (D.D.C. 2005); Dallas

Safari Club, 2020 WL 1809181, at *7 (D.D.C. Apr. 9, 2020). The D.C. Circuit has held that a

delay of forty-four days before bringing action for injunctive relief was “inexcusable,” and

“bolstered” the “conclusion that an injunction should not issue,” particularly where the party

seeking an injunction had knowledge of the pending nature of the alleged irreparable harm. Fund

for Animals v. Frizzell, 530 F.2d 982, 987 (D.C. Cir. 1975). Here, the funds at issue have been

blocked since at least 2016, and the first license application was denied in May 2017. See generally

Compl.

For all of the above reasons, Plaintiff has not demonstrated a likelihood of irreparable harm,

and the motion should be denied on that basis alone.

III. THE BALANCE OF THE EQUITIES WEIGHS HEAVILY AGAINST ISSUING INJUNCTIVE RELIEF

The final two factors—the balance of equities and the public interest—merge where, as

here, “the Government is the opposing party.” Trump v. Comm. on Oversight & Reform of U.S.

House of Representatives, 380 F. Supp. 3d 76, 105 (D.D.C.) (quoting Nken v. Holder, 556 U.S.

418, 435 (2009)); see also Pursuing Am.’s Greatness v. FEC, 831 F.3d 500, 511 (D.C. Cir. 2016)

(Government’s “harm and the public interest are one and the same, because the government’s

interest is the public interest”).

Here, these factors manifestly favor the government. First, OFAC has issued a

determination on Plaintiff’s latest (and second) request for a license to release the blocked funds.

See 6/12/20 License Denial. That decision may not be to Plaintiff’s liking, but it has been issued.

Second, to the extent Plaintiff regards the agency’s decision as unlawful or deficient, the proper

remedy is for a dispositive motion briefing schedule that includes the production of an

Administrative Record. See Local Rule 7(n). Indeed, at this point Plaintiff’s preliminary


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injunction is a solution in search of a problem: the only actual “emergency” relief sought has been

granted, and the APA and this Court’s Local Rules provide a standard process to adjudicate

Plaintiff’s claims. There is no basis for Plaintiff to seek an injunction now that would provide it

relief in excess of what it seeks in its Complaint. Such an injunction, which would alter the status

quo and mandate action by OFAC, lacks any basis in supporting case law. Virtually all the cases

Plaintiff cite involve matters in which the parties had filed cross-motions for summary judgment,

involve out-of-Circuit precedent outweighed by rulings of the D.C. Circuit and other decisions

from this District; or present otherwise distinguishing factual circumstances.10

Moreover, there are strong public interests supporting OFAC’s refusal to issue a license

for these funds. “Blocking orders are an important component of U.S. foreign policy, and the

President’s choice of this tool to combat terrorism is entitled to particular deference.” Holy Land

Found. for Relief & Dev. v. Ashcroft, 219 F. Supp. 2d 57, 84 (D.D.C. 2002) (“Holy Land I”) aff’d,

333 F.3d 156 (D.C. Cir. 2003). As the Supreme Court has explained, IEEPA grants the President

broad authority during times of war or declared national emergencies to “investigate, regulate, . .

. prevent or prohibit . . . transactions involving . . . any property in which any foreign country or a

national thereof has any interest.” See, e.g., Dames & Moore, 453 U.S. at 663 n.2 (quoting 50

U.S.C. § 1702(a)(1)(B)). For decades, courts have consistently accorded uniquely broad deference

to sanctions programs and actions under both IEEPA and TWEA.

10 See, e.g., Al Haramain, 686 F.3d at 974, 976 (decision issued after parties’ cross-motions for summary judgment; decision is from the Ninth Circuit; plaintiff was a U.S. charitable organization; plaintiff also alleged Fourth Amendment seizure of physical property located inside the U.S.; co-plaintiff claimed constitutional harms emanating from First Amendment restrictions as well as the blocking of funds); KindHearts, 647 F. Supp. 2d at 870, 904 (decision issued after parties’ cross-motions for summary judgment; decision is from the S.D. Ohio; plaintiff was a U.S. charitable organization; and claimed constitutional harms emanating from Fourth Amendment seizure of physical property within the United States).


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Even if, as Plaintiff contends, any SDGT interests were not “readily apparent,” see ECF

No. 1-1 at 1, that is not a basis for relief under IEEPA. In enacting IEEPA, Congress expressly

contemplated that some third-parties, innocent, unwitting, or otherwise, would be adversely

affected by the blocking of funds where a sanctioned party has an interest. IEEPA, E.O. 13224,

and the GTSR do not require a showing of scienter for assets to be blocked. Cf. Islamic Am. Relief

Agency. v. Gonzales, 477 F.3d 728, 737 (D.C. Cir. 2007) (holding that the government need not

show intent to use funds to aid unlawful activity to block funds); Al Haramain, 686 F.3d at 980

(“Civil penalties attach even for unwitting violations.” (citing 50 U.S.C. § 1705(b))). There is no

exception to the operation of the U.S. sanctions programs for purportedly innocent participants,

and no injunction can issue on that basis.

Finally, even if Plaintiff was correct that OFAC’s decision was unlawful or lacked factual

support, the proper remedy would be a remand to the agency—not an injunction requiring the

agency to do as Plaintiff commands. See Zevallos, 793 F.3d at 115 (“Even if Zevallos proved a

procedural error sufficient to invalidate Treasury’s decision, at most we would vacate Treasury’s

determination and remand for Treasury to rule again.”); see N. Air Cargo v. U.S. Postal Serv., 674

F.3d 852, 861 (D.C. Cir. 2012) (“When a district court reverses agency action and determines that

the agency acted unlawfully, ordinarily the appropriate course is simply to identify a legal error

and then remand to the agency, because the role of the district court in such situations is to act as

an appellate tribunal.”). The Court should reject Plaintiff’s motion and allow the parties to

proceed, as in the ordinary course, to briefing dispositive motions on the basis of an administrative

record. See Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985).


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CONCLUSION

For the foregoing reasons, Plaintiff’s Motion for Injunctive Relief or in the Alternative

for Mandamus should be denied.

Date: June 19, 2020 Respectfully submitted,

JOSEPH H. HUNT Assistant Attorney General Civil Division

DIANE KELLEHER Assistant Branch Director

/s/

NATHAN SWINTON Senior Trial Counsel U.S. Department of Justice Civil Division, Federal Programs Branch 1100 L Street NW Washington, DC 20005 (202) 305-7667 [email protected]

Counsel for Defendants


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