901 F.3d 315
D.C. Cir.2018Background
- OFAC designated Panamanian businessman Abdul Mohamed Waked Fares, his son Mohamed Abdo Waked Darwich, and Grupo Wisa as "Specially Designated Narcotics Traffickers" under the Kingpin Act, freezing U.S. assets and barring transactions.
- Plaintiffs requested the administrative record; OFAC produced a heavily redacted record (law-enforcement sensitive) and later provided two unclassified summaries describing factual allegations (bulk cash smuggling, false invoicing, real‑estate laundering, use of Balboa Bank).
- Plaintiffs sued, asserting a Fifth Amendment due process violation because OFAC refused to produce the unredacted evidentiary record or identify sources; they sought either disclosure or delisting.
- OFAC maintained disclosure would jeopardize ongoing investigations and sources; it offered unclassified summaries and said it would produce any additional non‑privileged material if and when available.
- The district court granted summary judgment for the government, concluding the unclassified summaries satisfied due process; the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process requires OFAC to produce the unredacted administrative record or identify sources when it withholds law‑enforcement sensitive evidence | Fares: OFAC must either disclose the underlying evidence (or non‑privileged source details) or delist plaintiffs; summaries are insufficient | OFAC: Unclassified summaries providing the who/what/when/where suffice where disclosure would harm ongoing law‑enforcement interests; courts may accept summaries in limited circumstances | Court: Held govt. may rely on unclassified summaries; no due process violation where plaintiffs did not challenge redactions and court assumes withholding justified |
| Proper procedural test for adequacy of post‑deprivation notice | Fares: Greater specificity about sources required to meaningfully contest designation | OFAC: Mathews balancing applies; government interest in protecting investigations outweighs incremental value of disclosure | Court: Applied Mathews v. Eldridge and found balance favors government given assumed sensitivity of withheld material |
| Whether plaintiffs forfeited remedies that would allow in‑camera or cleared‑counsel review | Fares: (did not press) plaintiffs did not seek in‑camera review or cleared counsel | OFAC: Plaintiffs declined available routes to challenge privilege claims or seek court review | Court: Noted plaintiffs failed to pursue established alternatives (in‑camera review, challenge to privilege), undermining their claim |
| Whether precedent requires disclosure of non‑classified, law‑enforcement sensitive information | Fares: Precedent allegedly irrelevant; blanket redactions unacceptable | OFAC: Precedent permits disclosure of only unclassified portions and use of summaries in extraordinary cases | Court: Held precedent allows summaries and non‑disclosure in narrow, compelling circumstances; plaintiffs’ all‑or‑nothing ask is foreclosed by precedent |
Key Cases Cited
- People’s Mojahedin Org. of Iran v. Dep’t of State, 327 F.3d 1238 (D.C. Cir.) (due process permits disclosure of only unclassified portions of administrative record in national‑security contexts)
- Nat’l Council of Resistance of Iran v. Dep’t of State, 251 F.3d 192 (D.C. Cir.) (recognized limited accommodations for classified material in executive designations)
- Holy Land Found. for Relief & Dev. v. Ashcroft, 333 F.3d 156 (D.C. Cir.) (upholding limited disclosure of unclassified material where national security interests implicated)
- Zevallos v. Obama, 793 F.3d 106 (D.C. Cir.) (discussing OFAC designation effects and delisting opportunities)
- Al Haramain Islamic Found., Inc. v. Dep’t of Treasury, 686 F.3d 965 (9th Cir.) (permitting unclassified summaries and in‑camera review in limited circumstances)
- Mathews v. Eldridge, 424 U.S. 319 (U.S. Supreme Court) (establishes private‑interest/risk/Government‑interest balancing test for procedural due process)
- Am.-Arab Anti-Discrimination Comm. v. Reno, 70 F.3d 1045 (9th Cir.) (noting high risk of erroneous deprivation when undisclosed information is used)
- Tuite v. Henry, 98 F.3d 1411 (D.C. Cir.) (standards for asserting law‑enforcement investigatory privilege)
- Bismullah v. Gates, 501 F.3d 178 (D.C. Cir.) (discussing need for counsel access to classified materials for meaningful review)