UNITED STATES of America, Plaintiff-Appellant v. HOLY LAND FOUNDATION FOR RELIEF AND DEVELOPMENT, also known as HLF; Shukri Abu Baker; Ghassan Elashi; Mufid Abdulqader; Abdulrahman Odeh, Defendants-Appellees Jenny Rubin; Deborah Rubin; Daniel Miller; Abraham Mendelson; Stuart E. Hersch; Renay Frym; Noam Rozenman; Elena Rozenman; TZVI Rozenman, Appellees.
No. 11-10535.
United States Court of Appeals, Fifth Circuit.
June 25, 2013.
722 F.3d 677
I respectfully dissent from parts IV and V of the majority opinion.
David J. Strachman, Esq., Mcintre, Tate & Lynch, L.L.P., Providence, RI 02903-0000, David J. Strachman, Esq., for Appellees.
Stephen J. Landes, Matthew Mark Garrett, Jennifer S. Geyer, Edwards, Wildman & Palmer, L.L.P., Chicago, IL, Nathan D. Lewin, Lewin & Lewin, Washington, DC, for Amicus Curiae Stanley Boim and Joyce Boim.
Richard Brian Rosenthal, Miami, FL, for Amicus Curiae Victims of F.A.R.C. Narco-Terrorism in Colombia, Keith Stansell, Marc Gonsalves, Thomas Howes, Judith G. Janis, Christopher T. Janis, Greer C. Janis, Michael J. Janis and Jonathan N. Janis
Vijay Shanker, U.S. Department of Justice, Washington, DC, Susan Cowger, Assistant U.S. Attorney, U.S. Attorney‘s Office, Dallas, TX, for Plaintiff-Appellant.
Before WIENER, CLEMENT, and PRADO, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Appellees (“the Rubins“) are victims of a terrorist attack perpetrated by the terrorist group Hamas in 1997 at an outdoor pedestrian mall in Jerusalem. Appellee the Holy Land Foundation (“HLF“) is a designated terrorist organization that the Department of the Treasury has found to act for or on behalf of Hamas by serving as its fundraising arm in the United States. After obtaining a judgment against Hamas in the district court for damages resulting from the attack, the Rubins requested that the court issue a
I. FACTUAL BACKGROUND
A. The Rubins’ proceedings against Hamas
The Rubins are nine American citizens who suffered severe harm as a result of a triple suicide bombing carried out by the terrorist group Hamas on September 4, 1997 at an outdoor pedestrian mall in Jerusalem, Israel. In May 2002, the Rubins brought a lawsuit against Hamas under the civil remedies provisions of the Anti-Terrorism Act of 2001,
B. Federal proceedings against HLF
On December 4, 2001, shortly before the Rubins’ trial, the Secretary of the Treasury determined that HLF “acts for or on behalf of” Hamas and designated HLF a “Specially Designated Terrorist” under Executive Order 12947 and a “Specially Designated Global Terrorist” under Executive Order 13224.1 See Holy Land Found. for Relief & Dev. v. Ashcroft, 219 F.Supp.2d 57, 64 (D.D.C.2002). More specifically, the Treasury Secretary found that HLF functions as the fundraising arm of Hamas in the United States, and, pursuant to the authority granted to him by the Executive Orders, instructed the Office of Foreign Assets Control (“OFAC“) to “block” all of HLF‘s funds, accounts, and other property. Id.
Following HLF‘s designation as a terrorist group and the blocking of its assets, the U.S. government initiated a criminal investigation into HLF‘s activities in the United States. On July 26, 2004, before the Rubins obtained their civil judgment, the government filed a forty-two count indictment against HLF in the Northern District of Texas, which informed HLF of the government‘s intent to seek forfeiture of “all property, real and personal, involved in the [alleged] money laundering
Several years later, on November 24, 2008, a federal jury found HLF guilty of various terrorism-related crimes, tax-related crimes, conspiracy to commit money laundering, and substantive money laundering offenses. The jury also returned a special verdict determining that $12.4 million in HLF assets was derived from proceeds traceable to the commission of the money laundering offenses.
On February 5, 2009, the district court entered a preliminary order of forfeiture against HLF‘s assets under
On April 27, 2011, the district court denied the government‘s motion to dismiss the Rubins’ petition, and also vacated the preliminary order of forfeiture that had been granted to the government after HLF‘s conviction. The court concluded that, under the TRIA, “[HLF‘s] assets are subject to attachment by plaintiffs with judgments ‘notwithstanding any other provision of law,’ such as criminal forfeiture law.” United States v. Holy Land Found. for Relief & Dev., No. 3:04-CR-0240-P, 2011 WL 3703333, at *6 (N.D.Tex. Aug. 19, 2011). The court subsequently amended its Memorandum Opinion and Order to state that the preliminary order of forfeiture would reflect this holding. The government timely appealed, and the district court stayed its order pending the outcome of the appeal.
II. STANDARD OF REVIEW
We review de novo a district court‘s legal conclusions regarding jurisdiction. Filer v. Donley, 690 F.3d 643, 646 (5th Cir.2012). In evaluating a district court‘s disposition of a petition filed under
III. ANALYSIS
A. Jurisdiction to hear the appeal
On April 27, 2011, the district court issued a Memorandum Opinion and Order denying the government‘s motion to dismiss the Rubins’ third-party ancillary petition under
The Rubins argue that we lack jurisdiction over the instant appeal since the government failed to file a new or amended notice of appeal after the district court granted its Rule 59(b) motion to amend the Memorandum Opinion and Order. The Rubins base their argument on Federal Rule of Appellate Procedure 4(a)(4)(B)(ii), which requires a party “intending to challenge an order disposing of [a motion to amend under Federal Rule of Civil Procedure 59(b)] or a judgment‘s alteration or amendment upon such a motion [to] file a notice of appeal, or an amended notice of appeal.” FED. R.APP. P. 4(a)(4)(B)(ii). The Rubins’ argument fails because the government never sought to: (1) challenge the court‘s ruling on its Rule 59(b) motion to
Under Rule 4(a)(4)(B)(i), the government‘s notice of appeal was rendered “dormant” at the time that the government filed its Rule 59(b) motion to amend. See Ross v. Marshall, 426 F.3d 745, 751-52 (5th Cir.2005) (“Our court has found that the timely filing of a [Rule 59(b) motion] suspends or renders dormant a notice of appeal until all such motions are disposed of by the trial court. This holds true regardless of whether the motion was filed before or after the notice of appeal.“). Once the court ruled on the motion to amend, the government‘s notice of appeal became effective to appeal the original Memorandum Order and Opinion. See FED. R.APP. P. 4(a)(4)(B)(i) (“If a party files a notice of appeal after the court announces or enters a judgment—but before it disposes of [a Rule 59(b) motion to amend]—the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered.“). Thus, the government‘s notice of appeal was proper and timely, and we may exercise jurisdiction over the appeal.
B. Recovery under 21 U.S.C. § 853 or the TRIA
The district court denied the government‘s motion to dismiss on the ground that the TRIA relieved the Rubins of having to satisfy their burden for recovery under
i. 21 U.S.C. § 853(n) does not provide the Rubins with a basis to prevail in the ancillary proceeding.
The criminal forfeiture statute bars a third party claiming an interest in forfeitable property from intervening in the criminal trial or appeal, and also prohibits a third party from commencing a separate action against the United States on the basis of that party‘s interest in the property.
A third party can prevail in the ancillary proceeding in one of two ways: (1) it can establish priority over the interest of the United States by showing that it had an interest in the property superior to the defendant‘s interest at the time the defendant committed the crime,
The Rubins conceded in district court and in their appellate brief that they neither had an interest in HLF‘s assets at the time the crimes were committed nor were bona fide purchasers for value of HLF‘s assets after the crimes were committed. There is no basis under
ii. The TRIA does not provide the Rubins a basis to assert their interest in the forfeited property.
The Rubins maintain that § 201 of the TRIA permits execution against HLF‘s funds notwithstanding their inability to satisfy
The ambit of the TRIA is clear: It operates to reach those funds which have been blocked by the government pursuant to one of two statutes. See Estate of Heiser v. Islamic Republic of Iran, 807 F.Supp.2d 9, 18 (D.D.C.2011) (“TRIA ... applies only to ‘blocked assets,’ which it defines as ‘any asset seized or frozen by the United States.‘“). The TRIA specifically limits the definition of “blocked” assets to those that are seized or frozen under § 5(b) of the Trading with the Enemy Act or § 202 or § 203 of the IEEPA—“a limitation that this Court cannot ignore.” Weinstein v. Islamic Republic of Iran, 299 F.Supp.2d 63, 75 (E.D.N.Y.2004); see also Stansell v. Revolutionary Armed Forces of Colom., 704 F.3d 910, 915 (11th Cir.2013) (“[The TRIA] defines what a ‘blocked asset’ ‘means,’ not what the term merely could ‘include.’ When a statutory definition declares what a term ‘means’ rather than ‘includes,’ any meaning not stated is excluded.“). Moreover, the TRIA “imposes no obligation on the President to maintain [blocked] funds for future attachment [by judgment creditors].” Smith v. Fed. Reserve Bank of N.Y., 346 F.3d 264, 271 (2d Cir.2003). Nor does it reach those funds which the government has been given authorization to control through another means.
In 2001, the government deemed HLF to be an arm of Hamas and blocked its funds pursuant to the IEEPA. When the government initiated its criminal investigation into HLF‘s activities in 2004, HLF‘s assets were still blocked. We must determine whether the government essentially unblocked HLF‘s assets when it obtained a restraining order under
Under
The Rubins argue that the filing of the indictment and forfeiture demand did not have any legal effect on HLF‘s assets because the executive blocking orders and accompanying regulations prohibit essentially all transactions involving blocked property. See Executive Orders 12947, 13224;
[A]n appropriate license ... issued by or pursuant to the direction or authorization of the Director of the Office of Foreign Assets Control before, during, or after a transfer [of blocked property] shall validate such transfer or make it enforceable to the same extent that it would be valid or enforceable but for the provisions of the International Emergency Economic Powers Act.
The government obtained such a license (the “forfeiture license“) from OFAC on September 23, 2004, which authorized the government “to pursue criminal forfeiture of the assets of the Holy Land Foundation for Relief and Development (‘HLF‘) blocked pursuant to” Executive Orders 12947 and 13224. The license further authorized the government to pursue “restraining orders” in order to preserve the assets for criminal forfeiture. Notwithstanding the status of HLF‘s assets as blocked, the government‘s receipt of a license from OFAC restrained those assets and permitted the government to proceed with the criminal forfeiture process.
By the time that the Rubins obtained their judgment against HLF on September 27, 2004, the government had restrained HLF‘s assets to preserve them for potential criminal forfeiture. As the Rubins concede in their brief, the government‘s restraining order became legally effective before the Rubins received a judgment in their favor giving them the right under the TRIA to execute against HLF‘s assets. Once an indictment had been filed and the assets restrained, victims of terrorism could no longer execute against those assets under the TRIA. See Estate of Heiser, 807 F.Supp.2d at 18 n. 6 (“Thus, because transactions ... are undertaken under an OFAC licensing scheme, they are unblocked and not subject to attachment.“); Bank of N.Y. v. Rubin, 484 F.3d 149, 150 (2d Cir.2007) (determining that assets blocked pursuant to an Executive Order, but also subject to an OFAC general licensing scheme, were not blocked and therefore were not subject to attachment under the TRIA). Consequently, the TRIA could not be applied to those funds since they no longer qualified as blocked under that statute.
iii. The TRIA does not trump the criminal forfeiture statute.
The Rubins argue that, even if HLF‘s assets do not qualify as blocked, they should still prevail because the provisions of the TRIA trump the criminal forfeiture provisions of
In accordance with the holdings of other courts of appeals, we previously have noted that the “notwithstanding” clause only applies when another provision of law conflicts with the TRIA. See, e.g., Hegna v. Islamic Republic of Iran, 376 F.3d 485, 494 n. 34 (5th Cir.2004) (observing that the “notwithstanding” clause did not compel the application of the TRIA because the other statute at issue did not conflict with the TRIA); Smith, 346 F.3d at 271 (“[T]he
According to the Rubins,
Section 201 of the TRIA “operates to empower a plaintiff with a ‘judgment against a ‘terrorist party’ to execute against any ‘blocked assets’ of that party.” Smith, 346 F.3d at 271 (quoting TRIA § 201(a)). As discussed above, HLF‘s assets were not blocked at the time the Rubins obtained their judgment. The fact that the government and the parties “treated and considered” the assets as blocked throughout the criminal trial, Holy Land Found., 2011 WL 3703333, at *6, does not make them so. Since HLF‘s assets already had been restrained under
The Rubins’ argument about the breadth of the “notwithstanding” clause is similarly unavailing. In their brief, the Rubins advocate an interpretation of TRIA § 201‘s “notwithstanding” clause that operates to override all statutes that, by their purpose or effect, shield assets from attachment or execution. “Congress‘[s] use of the ‘notwithstanding’ language,” the Rubins argue, “was clearly intended to prevent the Executive branch from using any statute, both those it had already employed and new provisions it might try to use in the future, to block enforcement of terrorism judgments.” This sweeping assertion assumes that the “notwithstanding” clause trumps any other law that has the incidental effect of removing funds from the reach of judgment creditors.
Were we to adopt the Rubins’ interpretation of TRIA § 201, we would broaden the reach of the provision by overriding the statutorily supplied definition of “blocked” assets. See TERRORISM RISK INSURANCE ACT § 201(d)(2)(A). The presence of the “notwithstanding” clause does not alter our responsibility to abide by the definitions provided by Congress in the same statute. Our role in interpreting the TRIA is to “[g]ive effect to the text congress enacted,” not to “rewrite the statute to reflect a meaning we deem more desirable.” Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 228 (1988).
Moreover, contrary to the Rubins’ assertions, we need not look to the legislative history of the TRIA to determine the meaning of the “notwithstanding” clause. The language of TRIA § 201 is not ambiguous; it allows a plaintiff with a judgment against a terrorist organization to execute against that organization‘s assets. See Smith, 346 F.3d at 271. The TRIA does not nullify the prior dispensation of funds that were not blocked at the time the terrorism victims obtained a judgment in their favor. The “notwithstanding” clause should not be read to override the operation of other statutory provisions that do not interfere with the TRIA‘s stated purpose. See Hegna, 376 F.3d at 494 n. 34 (refusing to apply the “notwithstanding” clause of the TRIA to trump another statute that did not conflict with the TRIA). In the absence of such a conflict, the “notwithstanding” clause does not function in the manner proposed by the Rubins.
Since the statutory language of § 201 of the TRIA is clear, we decline to look beyond its text for guidance. Milner v. Dep‘t of the Navy, 562 U.S. 562, 572 (2011) (refusing to apply “ambiguous legislative history to muddy clear statutory language“). The Rubins have failed to present compelling evidence in the text of the statute or in caselaw interpreting the statute to convince us that the “notwithstanding” clause has their desired effect. We therefore hold that § 201 of the TRIA does not trump the criminal forfeiture provisions of
C. Jurisdiction over HLF‘s assets
Finally, the Rubins assert the in custodia legis doctrine to challenge the district court‘s jurisdiction to seize HLF‘s forfeitable assets. This doctrine dictates that, where “a court of competent jurisdiction takes possession of property through its officers, that property is withdrawn from the jurisdiction of all other courts which, though of concurrent jurisdiction, may not disturb that possession.” In re Rehkopf Mattress Sales, Inc., 479 F.2d 67, 70 (5th Cir.1973). At the time the government initiated forfeiture proceedings against HLF‘s assets, many of those assets were in the custody of the District Courts for the Southern District of New York and the Western District of Washington.6 The Rubins maintain that, applied to the facts, the doctrine prevents the District Court for the Northern District of Texas from executing against HLF‘s assets because those assets are in the custody of courts in other jurisdictions.
The Rubins are foreclosed from raising this argument because it is an impermissible third-party challenge to the forfeiture of HLF‘s assets. See
Even if HLF had brought a challenge to the forfeitability of its assets under the in custodia legis doctrine, that argument would be precluded by the terms of the criminal forfeiture statute. The relevant provision,
IV. CONCLUSION
The Rubins have failed to demonstrate that they are entitled to recovery under either
EDITH BROWN CLEMENT
UNITED STATES CIRCUIT JUDGE
Notes
Pub.L. No. 107-297, 116 Stat. 2322.Notwithstanding any other provision of law ... any property with respect to which financial transactions are prohibited or regulated pursuant to section 5(b) of the Trading with the Enemy Act (50 U.S.C.App. 5(b)), section 620(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2370(a)), sections 202 and 203 of the International Emergency Economic Powers Act (50 U.S.C. 1701-1702), or any other proclamation, order, regulation, or license issued pursuant thereto, shall be subject to execution or attachment in aid of execution of any judgment relating to a claim for which a foreign state (including any agency or instrumentality or such state) claiming such property is not immune[.]
Both parties spend a great deal of time discussing the application of the relation-back doctrine under the criminal forfeiture statute. The government argues that, because the relation-back doctrine operates to vest title to HLF‘s money-laundering proceeds as of the time Hamas began to engage in those activities, those funds never became blocked property under the IEEPA. The Rubins counter that the relation-back provision is merely a “legal fiction” that should not be applied in situations where, as here, a statute clearly prioritizes the interests of terrorist victims over those of the government in allocating a terrorist organization‘s assets. We need not discuss the merits of these arguments in great detail. Supreme Court precedent indicates that