CA9: OFAC blocking order of assets must comply with the Fourth Amendment

Office of Foreign Asset Control’s blocking order of the Al Haramain Islamic Foundation’s assets issued without a warrant was a Fourth Amendment violation. Al Haramain Islamic Found. v. United States Dep’t of the Treasury, 660 F.3d 1019 (9th Cir. 2011):

Here, the domestic entity’s interest in being free from blocking orders is great. A blocking order effectively shuts down the private entity. Indeed, blocking orders do so by design. Unlike in the Court’s other cases, such as a one-time drug test, a search of files at a person’s office, a search of a home while on probation, or a brief traffic stop, there is no limited scope or scale to the effect of the blocking order. The only limit is temporal, and that limitation is quite small. Once OFAC concludes its investigation (which took more than half a year here), then the party has a right to very limited judicial review and a right to request administrative reconsideration. Both of those actions take considerable time, as the facts of this case and other cases, such as KindHearts, demonstrate. In the meantime, the entity’s doors are closed.

Additionally, OFAC’s potential reach is extensive. Unlike the Court’s cases, which concerned well-defined classes of persons such as probationers, public school students, public employees at work, drivers on the road, and so on, OFAC can issue a blocking order against any person within the United States or elsewhere. And, of course, OFAC does so without warning. There certainly is no “long history of judicial and public acceptance.” Camara, 387 U.S. at 537. Relatedly, unlike in the school and probation cases, in which those persons who conduct the search or seizure also are entrusted with protecting the targeted person’s interests, OFAC is not at all tasked with protecting the interests of the blocked entities.

On the other side of the scale, the government’s interest in preventing terrorism and the funding of terrorism is extremely high. But the sensitive subject matter is no excuse for the dispensing altogether with domestic persons’ constitutional rights. Cf. Hamdi, 542 U.S. 507 (holding that due process required that a United States citizen being held as an “enemy combatant” be given a meaningful opportunity to contest his detention). Rather, the dispositive question here is whether it is impracticable for OFAC to achieve its undeniably important aims without securing a warrant.

On this point, OFAC asserts that it does not and cannot know the location of the assets it seeks to block and must rely on property holders other than the blocked entity to identify such assets. OFAC also asserts that it would be impractical to update its warrants whenever it discovered additional assets owned by the entity. Finally, OFAC asserts that the timing of its blocking orders is coordinated with other governments, which makes it impractical to obtain a warrant.

We are not persuaded. As an initial matter, we reiterate that the number of designated persons located within the United States appears to be very small. The warrant requirement therefore will be relevant in only a few cases. In any event, we are puzzled by OFAC’s concerns related to the allegedly unknown location of the entity’s assets. In order to block assets effectively, OFAC must know which assets it is blocking.