Ajaka v. Gacki

557 F.Supp.3d 45

Antoine AJAKA, et al., Plaintiffs,

v.Andrea M. GACKI, Director of the Office of Foreign Assets Control, Department of the Treasury, et al., Defendants.

Civil Action No. 1:19-cv-01542 (CJN)

United States District Court, District of Columbia.

Signed August 17, 2021

James T. Bacon, Allred, Bacon, Halfhill & Young, PC, Fairfax, VA, for Plaintiffs.

Amy E. Powell, U.S. Department Ofj Ustice, Civil Division, Raleigh, NC, for Defendants.

MEMORANDUM OPINION

CARL J. NICHOLS, United States District Judge

Plaintiffs Antoine and Anni Ajaka challenge their designation as "Specially Designated Nationals" by the Department of the Treasury's Office of Foreign Assets Control ("OFAC"). See generally 2d Am. Compl., ECF No. 12. Pending before the Court is the government's Motion to Dismiss or, in the alternative, Motion for Summary Judgment. See generally Defs.’ Mot. to Dismiss or for Summ. J. ("Defs.’ Mot."), ECF No. 18. Because OFAC's designation was not arbitrary and capricious and did not deprive the Ajakas of due process, the Court grants summary judgment to the government.

I. Background

On March 21, 2018, the Ajakas¹ were indicted in the District of Massachusetts on fourteen counts related to their alleged business transactions with Syrian entities involved in chemical weapons development. See generally Administrative Record ("AR"), ECF No. 25-1 at 73. The indictment charged the Ajakas with illegally exporting to and acting as a broker for those entities and attempting to conceal their illicit conduct through falsified paperwork and false statements to the government. Id. at 75–76. It also alleged that, in January 2018, the Ajakas fled the country while purportedly engaged in pre-indictment plea negotiations with the government. Id. at 54.

A few months after the Ajakas’ flight, OFAC designated the pair "Specially Designated Nationals" pursuant to Executive Order 13382. 2d Am. Compl. ¶ 1. In an accompanying press release, OFAC identified the Ajakas as "key components of a vast network procuring electronics on behalf of Syria's Scientific Studies and Research Center (SSRC), the agency responsible for the development of Syria's chemical weapons." See generally 2d Am. Compl.; Compl. Ex. 1 ("OFAC Press Release"), ECF No. 12-1 at 1. In particular, the press release alleged that the Ajakas had operated a company out of their Massachusetts home to "export electronics, computer equipment, and electrical switches to enhance Syria's capacity to produce weapons of mass destruction." OFAC Press Release at 5. The designation blocked the Ajakas’ property and interests in property subject to the jurisdiction of the United States and generally prohibited U.S. persons from engaging in transactions with them. AR at 1.

Through counsel, the Ajakas submitted several letters to the government regarding their designation. 2d Am. Compl. ¶ 14. Three letters specifically sought "delisting, expedited treatment, a meeting to discuss the designations, and access to the administrative record." Id.² The government did not respond to any of those communications and the Ajakas filed this suit on May 24, 2019. 2d Am. Compl. ¶ 15; see generally Compl., ECF No. 1. A couple months later, the government produced the administrative record for the Ajakas’ designation. AR at 1. The public portion of the administrative record consists of (1) the OFAC designation, (2) the Federal Register notice regarding the designation, (3) a partially redacted memorandum providing the basis for OFAC's designation, (4) Executive Order 13382, (5) several letters from U.S. Immigrations and Customs Enforcement describing the Ajakas’ illicit conduct (and the emails in which they discussed that conduct), (6) a District of Massachusetts press release discussing the indictment against the Ajakas, and (7) a copy of the indictment. Id.

The Ajakas allege that the government violated their due process rights by failing to promptly provide them with the administrative record or timely consider their reconsideration requests. 2d Am. Compl. ¶¶ 21–25. They also allege that OFAC's designation was arbitrary and capricious because it was not based on substantial evidence. Id. ¶¶ 26–30. The government moves to dismiss the Ajakas’ claims under the fugitive disentitlement doctrine; in the alternative, it moves for summary judgment on the grounds that the designation was proper under the APA and that the due process claim is moot (and that the Ajakas were not denied due process even if there was a due process claim properly before the Court). See generally Defs.’ Mot.

II. Legal Standard

Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate when the pleadings and evidence demonstrate that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).

Under the APA, a court will "hold unlawful and set aside agency action, findings, and conclusions" if they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). The arbitrary and capricious standard is " ‘narrow’ ... as courts defer to the agency's expertise." Ctr. for Food Safety v. Salazar , 898 F. Supp. 2d 130, 138 (D.D.C. 2012) (quoting Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ). The Court presumes the validity of agency action, see, e.g. , Davis v. Latschar , 202 F.3d 359, 365 (D.C. Cir. 2000), and will not "substitute [its] judgment for that of the agency," Sioux Valley Rural Television v. F.C.C. , 349 F.3d 667, 679 (D.C. Cir. 2003). Instead, the Court reviews the administrative record to determine whether the agency's decision was supported by a rational basis. See Holy Land Found. for Relief and Dev. v. Ashcroft , 333 F.3d 156, 162 (D.C. Cir. 2003). The Court's review of a decision made by OFAC is even more deferential because OFAC operates "in an area at the intersection of national security, foreign policy, and administrative law." Islamic Am. Relief Agency v. Gonzales , 477 F.3d 728, 734 (D.C. Cir. 2007).

III. Analysis

A. Fugitive Disentitlement Doctrine

As a preliminary matter, the government asks the Court to dismiss the Ajakas’ claims because they are fugitives from justice. Defs.’ Mot. at 13–19.³

The fugitive disentitlement doctrine is an equitable doctrine that permits a court, in its discretion, to dismiss a fugitive's "appeal or writ of certiorari if the party seeking relief is a fugitive while the matter is pending." Degen v. United States , 517 U.S. 820, 824, 116 S.Ct. 1777, 135 L.Ed.2d 102 (1996). The doctrine "first developed as a way for courts to dismiss appeals in criminal cases by defendants who had escaped custody after filing the appeal and were evading the jurisdiction of the court." United States v. $6,976,934.65, Plus Int. Deposited into Royal Bank of Scotland Int'l, Acct. No. 2029-56141070, Held in Name of Soulbury Ltd. , 554 F.3d 123, 127 (D.C. Cir. 2009) [hereinafter Soulbury ]. Dismissal was an exercise of a court's inherent authority "to refuse to hear a criminal case in error, unless the convicted party ... is where he can be made to respond to any judgment we may render." Degen , 517 U.S. at 824, 116 S.Ct. 1777 (quoting Smith v. United States , 94 U.S. 97, 97, 24 L.Ed. 32 (1876) ). Although the Court of Appeals initially extended the doctrine to civil cases, see Doyle v. U.S. Dep't of Justice , 668 F.2d 1365, 1366 (D.C. Cir. 1981) (affirming dismissal of FOIA request related to criminal sentence appellant was evading by remaining in Panama), the Supreme Court later limited disentitlement to situations in which dismissal was a "reasonable response to the problems and needs that provoke it," Degen , 517 U.S. at 823–824, 116 S.Ct. 1777, and held that dismissal of claims in civil forfeiture actions was a disproportionate response to the problem of allowing a fugitive to litigate a related civil proceeding. The Court did not, however, reach the issue of whether a court could enforce "a disentitlement rule under proper authority." Id. at 828, 116 S.Ct. 1777.

Congress responded to the Court's invitation by enacting the Civil Asset Forfeiture Reform Act of 2000 (CAFRA), Pub. L. No. 106-185, 114 Stat. 202 (2001). Section 14 created the fugitive disentitlement statute, which grants courts the authority to "disallow a person from using the resources of the United States in furtherance of a claim in any related civil forfeiture action or a claim in third party proceedings in any related criminal forfeiture action " upon a finding that such person met certain statutory requirements regarding his or her fugitive status. 28 U.S.C. § 2466(a) (emphasis added). Since then, courts in this District have exercised that statutory authority to dismiss a fugitive's civil forfeiture claims when there is a sufficient connection between the claimant's fugitive status and the underlying proceedings. See, e.g. , United States v. Any & all Funds on Deposit in Acct. No. XXXXX-XXXXXXXX at HSBC Bank PLC, 55 Corp. St., Coventry, United Kingdom , 87 F. Supp. 3d 163, 168 (D.D.C. 2015) ; United States v. $1,231,349.68 In Funds , 227 F. Supp. 2d 130, 133 (D.D.C. 2002).

There is, of course, one obvious problem with the government's attempt to invoke the doctrine in this case: the proceeding is neither a criminal appeal within the scope of the traditional doctrine nor a civil forfeiture proceeding within the scope of the disentitlement statute. And while the Court of Appeals has contemplated the applicability of the doctrine in civil cases when there is "an adequate connection" between the proceedings and the claimant's fugitive status, see Daccarett-Ghia v. Comm'r of Internal Revenue Serv. , 70 F.3d 621, 629 (D.C. Cir. 1995), such a connection is absent here. The Court of Appeals has made clear that a sufficient "connection" would require more than commonality of subject matter; the individual's fugitive...