Humanitarian Law Project v. United States Department of TreasuryHumanitarian Law Project v. United States Department of Treasury
ORDER RE: DEFENDANTS’ MOTION FOR RECONSIDERATION
Pending before the Court is Defendants’ Motion for Reconsideration in Part of the Court’s Order and Judgment (“Motion”), filed on January 30, 3007. Plaintiffs filed an Opposition on February 23, 2007, to which Defendants replied on March 9, 2007. On March 27, 2007, the Court found the Motion appropriate for determination without oral argument, and took the matter under submission.
See
FACTUAL AND PROCEDURAL BACKGROUND
On November 21, 2006, the Court issued an Order (“Order”) granting in part and denying in part Plaintiffs’ Motion for Summary Judgment and Defendants’ Motion to Dismiss and Cross-Motion for Summary Judgment.
See Humanitarian Law Project v. U.S. Dept. of Treasury,
On January 30, 2007, Defendants filed the instant Motion, seeking reconsideration of two aspects of the Court’s Order. First, Defendants contend that the Court should reconsider its decision that the “otherwise associated with” provision of Executive Order 13224 (“EO”), section l(d)(ii), is unconstitutionally vague on its face and overbroad. Defendants state that on January 26, 2007, in response to the Order, the Office of Foreign Assets Control (“OFAC”)
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issued a new regulation (
Second, Defendants seek reconsideration of the Court’s decision that the President’s designation of twenty-seven individuals and groups as SDGTs in the Annex to the EO was unconstitutional. Defendants contend that the Court did not consider governing law, and thus arrived at an incorrect decision. Plaintiffs oppose each of Defendants’ arguments.
DISCUSSION
Defendants bring their motion for reconsideration pursuant to
A. The “Otherwise Associated With” Provision
Defendants seek reconsideration of the Court’s finding that the “otherwise associated with” provision is unconstitutional on the ground that a change of law occurred after the Order was issued, and that this change of law remedied the constitutional infirmities identified in the Order. Before disputing Defendants’ arguments on their merits, Plaintiffs urge the Court to decline to consider the new regulation on a number of grounds, including that the motion is untimely, that Defendants have not demonstrated how their request meets the requirements for reconsideration, and that Defendants’ motion amounts to a request to find the Order moot on the unsound ground that Defendants voluntarily changed their illegal conduct.
1. Whether Reconsideration is Appropriate
First, Plaintiffs contend that Defendants’ Motion is untimely because it was filed more than 10 days after the Order was entered, in violation of
Second, the new regulation is a change of law under Local Rule 7 — 18(b), which Defendants correctly invoke in their motion. Plaintiffs contend, however, that the change of law is equivalent to any defendants’ voluntary cessation of illegal conduct, and that ordinarily, such a voluntary cessation does not render moot a case challenging that defendants’ conduct.
See Friends of the Earth v. Laidlaw,
For example, in
Freedom to Travel Campaign v. Newcomb,
In addition, as stated above, the motion does not seek reconsideration on the ground that the intervening change in law renders Plaintiffs’ challenge moot. Rather, Defendants contend that the change in law addresses the constitutional infirmities of EO § l(d)(ii) as it stood previously. Thus, although Defendants ask the Court to vacate its Order and injunction, that is not the remedy the Court would provide if it grants Defendants’ motion. Instead, the Court would issue a new order analyzing the new provision, and, if appropriate, lift the injunction. Accordingly, the Court’s determination that EO § l(d)(ii) as it existed when the Order was issued was unconstitutional would remain intact. Should Defendants repeal the new provision and leave the term “otherwise associated with” undefined, they would do so despite the Order, and would render EO § l(d)(ii) unconstitutional.
Thus, in light of the procedural posture of this case, in which reconsideration was timely sought and the matter is likely to be appealed, the Court exercises its discretion to reconsider the Order.
2. Whether
At stated, Defendants contend that the new regulation remedies the constitutional infirmities identified in the Order. Specifically, the Order found the “otherwise associated with” provision of the EO unconstitutionally vague because the term is not itself susceptible of clear meaning, was not defined by OF AC’s implementing regulations, its application was not subject to any identifiable criteria, and its enforcement was therefore subject only to the Government’s unfettered discretion.
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The Order also found the provision unconstitutionally overbroad because it imposed penalties for mere association with SDGTs, and that this overbreadth was substantial in relation to the potentially constitutional scope of the provision.
See Humanitarian Law Project,
Defendants now contend that, in direct response to the Order, OFAC revised its regulations implementing and interpreting the EO by adding a new section,
The term “to be otherwise associated with,” as used in [31 C.F.R.]
§ 594.201(a)(4)(h), means:
(a) To own or control; or
(b) To attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services, to.
Defendants contend that this newly-issued definition sets forth criteria governing the Secretary of the Treasury’s (hereafter, “Secretary”) discretion to designate SDGTs that are sufficient to avoid violating the First and Fifth Amendments to the United States Constitution. Plaintiffs disagree, contending that the new regulation is null and void because it exceeds the Secretary’s designation authority under section 1(c) of the EO. Plaintiffs further argue that even if the new regulation is not null and void, it does not cure the constitutional infirmities of the “otherwise associated with” provision. The Court agrees with Defendants.
First, the new regulation does not exceed the scope of the Secretary’s designation authority. Plaintiffs contend that the regulation expands the Secretary’s designation authority under section 1(c) of the EO. Specifically, Plaintiffs claim that while section 1(c) authorizes the designation of persons who are “owned or controlled by” already-designated SDGTs, the new regulation reaches to those who themselves “own or control” SDGTs. This argument is not well-taken. •
The new regulation relates to the Secretary’s designation authority under EO § l(d)(ii), the “otherwise associated with” provision, not to section 1(c). As such, the new provision simply defines the operative term of the designation authority delegated to the Secretary in section l(d)(ii). In addition to this express delegation of authority to designate SDGTs, the Secretary is authorized, under EO § 7, “to take such actions, including promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and UNPA as may be necessary to carry out the purposes of this order.” Thus, the EO also expressly authorizes the Secretary to issue regulations to interpret the designation authority granted therein. As such, OFAC’s regulations do not exceed the scope of the Secretary’s authority “unless they contradict express statutory language or prove unreasonable.”
Consarc Corp. v. Iraqi Ministry,
The new provision also remedies the constitutional defects of the “otherwise associated with” provision. The full language of the new provision states that to be “otherwise associated with” means “[t]o own or control” an SDGT, or “[t]o attempt, or to conspire with one or more persons, to act for or on behalf of or to provide financial, material, or technological support, or financial or other services, to” an SDGT.
The new provision’s language varies from that previously analyzed only in that it identifies “to own or control” and “[t]o attempt, or to conspire” as additional bases for designation. Plaintiffs do not challenge the constitutionality of the “to own or control” element of the provision. However, Plaintiffs do claim that the phrase “to attempt, or to conspire” to do anything “on behalf of’ can reach “any” associational activity, such as filling out a membership card or communicating with an SDGT about its interests, and that this language is therefore unconstitutional.
Plaintiffs’ conclusory argument does not specify whether they believe that the provision is vague, overbroad, or both. In any case, Plaintiffs’ argument is not persuasive. The Court already found that the phrase “on behalf of’ was not vague.
See Humanitarian Law Project v. U.S. Dept. of Treasury,
Nor is the phrase “to attempt, or to conspire” unconstitutionally overbroad. A law is overbroad if it punishes a substantial amount of protected conduct judged in relation to the statute’s legitimate sweep, until and unless the law is narrowed to remove the threat.
See Virginia v. Hicks,
B. The President’s Designations in the Annex
The Order held that the designation of twenty-seven groups and individuals as SDGTs, as reflected in the Annex to the EO, was unconstitutional because no criteria were given for these designations. As part of its holding, the Court also concluded that Plaintiffs had standing to bring this claim. However, the Court has reconsidered its standing analysis, and finds that Plaintiffs lack standing.
In their initial briefing, Defendants appeared to argue that Plaintiffs lacked standing because their fear of being designated an SDGT derived from their association with other groups designated by the Secretary, rather than from their association with groups designated by the President. The Court found this argument unpersuasive because twenty-seven groups had already been designated by the President, and Plaintiffs contended simply that they risk designation by the President for any reason. In its motion for reconsideration, Defendants again contend that Plaintiffs lack standing, and state several bases for this argument. Among these bases, Defendants argue that the President’s designations in the Annex do not on their face give rise to First Amendment concerns because his authority to designate is derived from IEEPA, and the designations were not an exercise of authority pursuant to the criteria described in the body of the EO itself. 4 Because the President’s authority under IEEPA does not on its face implicate First Amendment rights, Plaintiffs cannot invoke the relaxed standing analysis for First Amendment claims, and must instead meet the ordinary, and more demanding, standing requirements, which they cannot do. Having reviewed the Government’s more extensive analysis, the Court agrees.
The twenty-seven designations reflected in the Annex to EO 13224 were made by the President pursuant to IEEPA, 50 U.S.C. 1701, et. seq. By so designating these groups, the President “blocked” their interests and assets pursuant to IEEPA. The IEEPA authorizes 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.”
[Ijnvestigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, 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 property, subject to the jurisdiction of the United States ....
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“To satisfy the Article III case or controversy requirement, [a plaintiff] must establish, among other things, that it has suffered a constitutionally cognizable injury-in-fact.”
Cal. Pro-Life Council, Inc. v. Getman,
Here, Plaintiffs were not designated SDGTs in the Annex. Accordingly, they lack standing to challenge a law unless they can establish a “genuine threat of imminent prosecution” and not merely an “imaginary or speculative fear of prosecution.”
Sacks v. Office of Foreign Assets Control,
Based on the second and third factors, Plaintiffs cannot establish an injury-in-fact. They therefore lack standing to challenge the President’s designation authority. Plaintiffs have pointed to no instance of their being issued a specific threat or warning that the they would be designated. Plaintiffs refer to the twenty-seven designations made in 2001 in the Annex as sufficiently recent and numerous to argue that their risk of being designated SDGTs by the President is real and immediate. While that might have been sufficient to satisfy First Amendment standing, it is insufficient here. Plaintiffs have not shown, for example, that the President has designated any SDGTs since September 2001. Nor have Plaintiffs argued or shown that any of these designated individuals or organizations are similar to them, or that these SDGTs engaged in conduct similar to Plaintiffs’ conduct. Plaintiffs’ fear of designation by the President is ultimately based on speculation. Accordingly, Plaintiffs cannot establish a genuine and imminent threat that they will *1109 be designated by the President pursuant to IEEPA. Thus, Plaintiffs lack standing, and the issue is not properly before the Court.
CONCLUSION
For the foregoing reasons the Court hereby STRIKES the section of the Order entitled “Plaintiffs’ Vagueness Challenge to the President’s Designation Authority,” and VACATES the associated injunction. The Court also hereby lifts the injunction against enforcing Executive Order 13224, § l(d)(ii) against Plaintiffs.
IT IS SO ORDERED.
FINAL JUDGMENT RE: PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT, DEFENDANTS’ MOTION TO DISMISS AND CROSS-MOTION FOR SUMMARY JUDGMENT, AND DEFENDANTS’ MOTION FOR RECONSIDERATION
This action came before the Court, the Honorable Audrey B. Collins presiding, on Plaintiffs’ Motion for Summary Judgment under
On January 30, 2007, Defendants filed a Motion for Reconsideration in Part of the Court’s Order and Judgment. Upon consideration of the parties’ briefs, the Court found the matter appropriate for determination without oral argument and took it under submission. On April 20, 2007, the Court issued an Order deciding Defendants’ Motion for Reconsideration.
In view of the two Court Orders on the parties’ respective motions, it is hereby ORDERED and ADJUDGED that:
This Judgment supercedes the Judgment entered on January 24, 2007. Plaintiffs’ Motion for Summary Judgment is DENIED. Defendants’ Motion to Dismiss and Cross-Motion for Summary Judgment is GRANTED in part and DENIED in part, and Defendants’ Motion for Reconsideration is GRANTED, as follows:
1. The Court finds that Plaintiffs have standing to bring their First Amendment challenge to Executive Order 13224, § l(d)(ii), the “otherwise associated with” provision. The Court therefore DENIES Defendants’ Motion to Dismiss on this ground.
2. The Court finds that Executive Order 13224, § l(d)(ii), the “otherwise associated with” provision, as it existed prior to the January 26, 2007, issuance of31 C.F.R. § 594.316 , was unconstitutionally vague on its face and overbroad. However, the Court finds, upon reconsideration, that31 C.F.R. § 594.316 cures the constitutional defects of Executive Order 13224, § l(d)(ii). Accordingly, the injunction against enforcing Executive Order 13224, § l(d)(ii) against Plaintiffs is hereby LIFTED.
3. In all other respects, Defendants’ Motion to Dismiss and Cross-Motion for Summary Judgment is GRANTED.
Notes
. Because the Order sets forth the background of this matter in detail, herein the Court will only recite background that is relevant to the instant motion.
. OFAC is the Department of Treasury agency charged with implementing the Executive Order.
. EO 13224, § l(d)(ii), the “otherwise associated with” provision, states, in relevant part: *1105 “[A]ll 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: ... persons determined by the Secretary of the Treasury ... to be otherwise associated with [an SDGT].”
. Plaintiffs argue that the Court should deny reconsideration because Defendants did not present these arguments earlier. However, the Court finds that Defendants did preserve these points supporting their standing argument. See e.g. Defs’ Mem. Supp. Mot. Dismiss & Summ. J. 5:2-25, Defs' Reply Supp. Mot. Dismiss & Summ. J. 22-23, fn. 17 & 18.