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Global Relief Foundation, Inc. v. O'Neill

December 31, 2002

GLOBAL RELIEF FOUNDATION, INC., PLAINTIFF-APPELLANT,
v.
PAUL H. O'NEILL, SECRETARY OF THE TREASURY, ET AL., DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 02 C 674--Wayne R. Andersen, Judge.

Before Cudahy, Coffey, and Easterbrook, Circuit Judges.

The opinion of the court was delivered by: Easterbrook, Circuit Judge.

As amended January 24, 2003.

GLOBAL RELIEF FOUNDATION, INC., PLAINTIFF-APPELLANT,
v.
PAUL H. O'NEILL, SECRETARY OF THE TREASURY, ET AL., DEFENDANTS-APPELLEES.

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 02 C 674--Wayne R. Andersen, Judge.

Before Cudahy, Coffey, and Easterbrook, Circuit Judges.

The opinion of the court was delivered by: Easterbrook, Circuit Judge.

ARGUED OCTOBER 29, 2002

Following the terrorist attack of September 11, 2001, the President issued an executive order declaring a national emergency and authorizing the Secretary of the Treasury to freeze the assets of groups that "assist in, sponsor, or provide financial, material, or technological support for, or financial or other services to or in support of, such acts of terrorism" to the extent that statutes permit freezes. Executive Order 13224 §1(d)(i), 66 Fed. Reg. 49079 (Sept. 23, 2001). Authority for this order lies in the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701-07, which after Executive Order 13224 was amended by the USA PATRIOT Act, Pub. L. 107-56, Title I, §106, 115 Stat. 272 (Oct. 26, 2001). On December 14, 2001, the Secretary used the delegated authority to block all assets of Global Relief Foundation, Inc., an Illinois charitable corporation that conducts operations in approximately 25 foreign entities, including Afghanistan, Albania, Bosnia, Kosovo, Iraq, Lebanon, Pakistan, Palestine (West Bank and Gaza), Russia (Chechnya and Ingushetia), Somalia, and Syria. The provision underlying this action is §1702(a)(1)(B), which provides that the President may investigate, 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[.]

Global Relief Foundation (which goes by the acronym GRF) denies that any "foreign . . . national" has an "interest" in its assets, and it asked the district court to enjoin the blocking order for this reason and several others said to be rooted in the Constitution. The district court denied this request, see 207 F. Supp. 2d 779 (N.D. Ill. 2002), and GRF has appealed.

When the district court acted, the blocking order was an interim step pending investigation. The freeze on December 14 was accompanied by a search of GRF's headquarters, and the Treasury Department planned to use evidence obtained from the search, plus submissions it invited from GRF, to decide whether to extend the freeze. One element of relief that GRF requested was an injunction against the extension, which would be accomplished by naming GRF a "Specially Designated Global Terrorist" under Executive Order 13224. On October 18, 2002, shortly before oral argument, the Office of Foreign Assets Control listed GRF as a Specially Designated Global Terrorist. See . Designation does not change the status of GRF's assets and records, which remain in Treasury's control. But it does affect the scope of arguments available on appeal. Because the designation is a fait accompli, a court cannot enjoin its making--though a court might direct the Office of Foreign Assets Control to lift it. To the extent that GRF was attacking the factual support for the interim order, time has passed that issue by; the right question now is whether the designation of October 18 is supported by adequate information, and that question cannot be resolved until the district court has assembled a new record. What is more, some of GRF's principal legal theories drop out of the case. It contended, for example, that Executive Order 13224, which was issued before enactment of the USA PATRIOT Act, could not have delegated to the Secretary of the Treasury those powers added to the IEEPA by the new law. The change that potentially affected this case was the addition to §1702(a)(1)(B) of language authorizing asset freezes pending investigation. Now that the investigative stage is over, however, the amendment to the IEEPA does not matter to the freeze, and it is correspondingly inappropriate for us to decide whether Executive Order 13224 delegates powers enacted after September 23, 2001.

Appellees make a broader argument: that the appeal is moot and should be dismissed. Obviously the suit is live. Treasury has blocked GRF's accounts and thus effectively shut down its operations across the globe. A federal court could order Treasury to end the freeze. When relief is possible, a lawsuit is not moot. See Spencer v. Kemna, 523 U.S. 1 (1998); Hall v. Beals, 396 U.S. 45 (1969). One application of this principle is that suits seeking money damages, as GRF does, cannot become moot unless the defendant satisfies the plaintiff's demand. See Powell v. McCormack, 395 U.S. 486, 498-500 (1969). Injunctive relief directing Treasury to lift all restrictions on GRF's assets and operations also remains an option. Even voluntary cessation by the defendants would not moot the case, while any possibility remained that they would again freeze GRF's assets. See Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Services, 532 U.S. 598, 608 (2001); Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc., 528 U.S. 167, 189 (2000). Still, appellees contend, the appeal is moot in the sense that word often takes when an appeal from the grant of preliminary injunctive relief is overtaken by the grant of permanent injunctive relief. Whether the record adequately supported relief pending trial is of no moment once the trial has been held and permanent relief entered. All that then matters is whether the record supports permanent relief. See, e.g., Continental Training Services, Inc. v. Cavazos, 893 F.2d 877, 880 (7th Cir. 1990). Just so, appellees insist, now that the freeze pending investigation has been replaced by a final order naming GRF as a Specially Designated Global Terrorist.

This would be a good analogy if all that GRF wanted was review of the freeze in light of the information that Treasury possessed on December 14, 2001, or if the only point of the appeal had been to obtain an order preventing the Treasury Department from blocking the assets until it had reached a final decision. Those issues are behind us, and no resolution one way or the other could do GRF any good today. The premise of appellees' suggestion of mootness is that GRF's current requests are limited to its status pending final administrative resolution; appellees concede that the appeal would not be moot if GRF sought relief against any permanent blocking order. Suggestion of Mootness at 6-8. Yet GRF's ambition is not so limited. It contends, among other things, that the IEEPA never applies to the assets of any corporation that holds its charter from one of the United States. This argument, if successful, would knock out any freeze, preliminary or permanent, without regard to the strength of the evidence. If GRF is right on this score, then it is entitled to relief immediately. Dismissing this appeal, and directing GRF to start from scratch in the district court with a challenge to the designation of October 18, then would compound the injury by extending the length of an illegal administrative action. It is because of possibilities such as this that courts say that entry of a permanent injunction (or, here, a permanent administrative order) "usually" calls for dismissal of the appeal from preliminary relief. See Burgess v. Ryan, 996 F.2d 180, 184 (7th Cir. 1993). "Usually" is not always; one appropriate exception is for a legal argument that would annul any adverse decision, temporary or permanent.

Now the scope of its ambition would not be enough if GRF had not advanced and preserved these arguments, but it has done what is required. Soon after receiving formal notice from Treasury that proceedings were under way that could end in its being named a Specially Designated Global Terrorist, GRF asked the district court to stave off that action. This request, in a document filed on June 5, 2002, and styled "Rejoinder to Defendants' Notice," asks the court to block the designation and advances arguments that have been reiterated in the appellate briefs. Although the district judge did not expressly deal with this aspect of GRF's position, he did address many of the underlying legal arguments (such as the contention that the IEEPA does not apply to U.S. corporations). It is unnecessary to recite the details of GRF's arguments in the district court and this court. Defendants' argument that GRF has forfeited ...


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