United States v. Holy Land Foundation for Relief & Development
722 F.3d 677
| 5th Cir. | 2013Background
- Nine Americans (the Rubins) obtained a $214.5 million civil judgment under the Anti‑Terrorism Act against Hamas for a 1997 suicide bombing in Jerusalem.
- The Holy Land Foundation (HLF) was designated and its assets blocked by Treasury as acting for Hamas; OFAC blocked HLF funds under IEEPA and later issued a license to permit government criminal forfeiture actions.
- The government indicted HLF in 2004 and obtained a § 853 restraining order to preserve assets for criminal forfeiture prior to the Rubins' civil judgment becoming enforceable.
- HLF was convicted in 2008; a preliminary criminal forfeiture order and $12.4 million forfeiture judgment were entered, and the government moved to dismiss third‑party claims to the assets.
- The Rubins filed an ancillary petition under 21 U.S.C. § 853(n) and argued alternatively that TRIA § 201 allowed execution against HLF’s assets despite forfeiture restraints; the district court denied the government’s motion to dismiss and amended its forfeiture order to reflect that holding.
- The Fifth Circuit reversed, holding the Rubins cannot recover under § 853(n) or TRIA § 201 because the assets were lawfully restrained for criminal forfeiture (and thus not “blocked” under TRIA when the Rubins sought execution).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 853(n) permits Rubins to recover HLF assets | Rubins asserted an interest and sought to attach HLF funds | Gov’t: § 853(n) permits relief only if third party shows superior interest or bona fide purchaser status | Held: Rubins conceded they meet neither § 853(n)(6)(A) nor (B); § 853(n) does not permit recovery |
| Whether TRIA § 201 allows execution against assets restrained for criminal forfeiture | Rubins: TRIA § 201 applies "notwithstanding any other law" to let judgment creditors attach terrorist assets | Gov’t: TRIA applies only to assets that qualify as statutorily "blocked"; assets restrained under § 853(e) after an OFAC license were not "blocked" for TRIA purposes | Held: TRIA covers only assets blocked under specified statutes; these assets were licensed/restrained for forfeiture and thus not TRIA‑blocked |
| Whether TRIA’s "notwithstanding" clause overrides § 853 criminal forfeiture | Rubins: Clause should trump any law that prevents execution by victims | Gov’t: Clause overrides only truly conflicting statutes; no conflict exists between TRIA and § 853 here | Held: No conflict; "notwithstanding" does not nullify § 853 where government restraint preceded Rubins’ enforceable TRIA rights |
| Whether in custodia legis prevents Northern District of Texas jurisdiction over assets located elsewhere | Rubins: Assets in custody of other courts cannot be forfeited by N.D. Tex. | Gov’t: § 853 provides in personam jurisdiction over defendant regardless of asset location; third parties cannot relitigate forfeitability in § 853(n) ancillary proceeding | Held: Rubins lack standing to raise in custodia legis in § 853(n); court has in personam jurisdiction and doctrine does not bar forfeiture |
Key Cases Cited
- Libretti v. United States, 516 U.S. 29 (ancillary § 853(n) proceeding is the exclusive vehicle for third‑party claims)
- Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (relation‑back doctrine vests title upon judicial forfeiture order)
- United States v. Ursery, 518 U.S. 267 (criminal forfeitures are in personam and not dependent on physical seizure)
- Smith v. Federal Reserve Bank of New York, 346 F.3d 264 (TRIA applies only to statutorily defined "blocked" assets; "notwithstanding" clause limited)
- Hegna v. Islamic Republic of Iran, 376 F.3d 485 ("notwithstanding" clause applies only where another law actually conflicts with TRIA)
- United States v. Jarvis, 499 F.3d 1196 (pretrial restraint under § 853(e) preserves assets for forfeiture)