Court Announces Unprecedented Remedy for Constitutional Violations of U.S. Charity KindHearts

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On May 10, 2010, based on his August 2009 ruling that the government violated KindHearts for Charitable Humanitarian Development's (KindHearts) Fourth and Fifth amendment rights in shutting it down "pending investigation" into whether it should be listed as a supporter of terrorism, Judge James Carr of the Federal District Court for the Northern District of Ohio ordered new proceedings to remedy the lack of adequate notice and opportunity to defend and freezing of assets without a warrant. 

• Fourth Amendment Seizure Remedy
• Fifth Amendment Due Process Remedy
• Access to Fees to Pay for Legal Defense
• Reformed Procedures for All U.S. Organizations?

 
After the August 2009 ruling the court heard arguments on what should be done to correct the following three constitutional violations that occurred when the government blocked KindHeart's assets:
 
1.) Fourth amendment right violations by failing to obtain a warrant based on probable cause;
2.) Fifth amendment right violations by relying on criteria for Blocks Pending Investigation (BPI) that are unconstitutionally vague as applied and by failing to provide adequate notice and meaningful opportunity to respond; and
3.) Arbitrary and capricious acts by the government when it limited KindHearts' access to its own funds to pay counsel for its defense.

Faced with the unusual question as to what the remedies should be Carr developed novel solutions to remedy the government's violations. He said, "I recognize that this is an unusual and atypical remedy, but this is an unusual and atypical situation." [p.13]
 
Fourth Amendment Seizure Remedy

First, Carr addressed the Fourth Amendment violation by Office of Foreign Assets Controls (OFAC) when it froze KindHeart's assets without first obtaining a warrant based on probable cause. Carr ordered a post-seizure probable cause review by the court. He analogized this remedy to rulings in forfeiture proceedings where the government failed to provide pre-deprivation process. If the government showed probable cause in those post seizure reviews, the court did not require release of the forfeited property in those proceedings. Similarly here, the court will not require the release of the frozen funds if the government meets the specialized standard of probable cause for a BPI warrant. Carr defined the standard as having reasonable ground at the time of the original seizure to believe that KindHearts specifically, was subject to designation under Section 1 of E.O. 13224.

In meeting this standard, if there were determinations made by the government based on classified information as defined by the Classified Information Procedures Act (CIPA), such information may be submitted to the court ex parte and in camera for consideration (only the court views the material).
 
Fifth Amendment Due Process Remedy

Second, Carr determined the remedies for inadequate notice of the allegations against KindHearts and the lack of meaningful opportunity to respond to them were in violation of KindHearts' Fifth Amendment rights.   He ruled that the government did not prove beyond a reasonable doubt that its errors were harmless. As a result, Carr ruled the remedy should be:
 
1.) an ex parte, in camera meeting with the government to determine what classified evidence will give KindHearts adequate notice, and whether that evidence is capable of further declassification or adequate summarization. In the case where summarization of the classified material is insufficient or impossible, then KindHearts’ counsel will be able to review the documents under a security clearance, but will not be able to discuss them with KindHearts.
2.) KindHearts must then be given a meaningful opportunity to respond to the allegations. If classified documents are at issue, the hearing will be closed.
 
Carr deferred ordering a remedy on OFAC's unconstitutionally vague authority under EO 13224 pending the outcome of the probable cause review of OFAC's order freezing KindHearts' assets.
 
Access to Fees to Pay for Legal Defense

The third and final remedy was in response to the arbitrary and capricious acts by OFAC in application of its attorney's fee policy towards KindHearts, in violation of the Administrative Procedures Act.   Carr remanded the decision on attorneys' fee to the OFAC office to be re-determined based on proper rules ordered by the court.
 
Reformed Procedures for All U.S. Organizations?

This judgment on remedies will subject the government in this case to greater judicial oversight and hopefully lead to better procedures in the future. Carr's ruling applies only to KindHearts, but he said, “I leave to Congress 'the responsibility for considering and adopting the appropriate structure' for pre-blocking warrant and probably cause standards that would comply with the Fourth Amendment…Here, however, I am not delineating pre-seizure requirements; I am, rather, constructing a remedy for the constitutional violation in this case.” [p. 16 fn 7]
 
In response to the ruling, KindHearts' attorney Alexander Abdo, an attorney with the ACLU National Security Project, said, “By requiring Congress to step in and fix the government's unconstitutional terrorist-designation scheme, the ruling restores a critical check on executive power. No longer will the government have the authority to shut down a domestic organization's operations and to criminalize all transactions with the organization based merely on the say-so of the executive.”
 
“For years, the government has insulated its terrorist-designation decisions from any meaningful review by denying the frozen charities even the most basic constitutional requirements of due process,” said Georgetown Law Professor David Cole, co-counsel for KindHearts. “Yesterday's decision confirms that such freezes are unconstitutional by requiring the government to provide KindHearts what it has been denied all along – a fair chance to clear its name.”