Bello v. Smith

651 F.Supp.3d 20

Samark Jose LÓPEZ BELLO, Plaintiff, v. Bradley T. SMITH, in his official capacity as Acting Director,Office of Foreign Assets Control, et al., Defendants.

Civil Action No. 21-1727 (RBW)

United States District Court, District of Columbia

Signed December 21, 2022

Erich C. Ferrari, Ferrari & Associates, P.C., Washington, DC, for Plaintiff.

Stuart Justin Robinson, U.S. Department of Justice, Civil Division, San Francisco, CA, for Defendants.

MEMORANDUM OPINION

REGGIE B. WALTON, United States District Judge

The plaintiff, Samark Jose López Bello, brings this civil action against the defendants, Bradley T. Smith in his official capacity as Acting Director, Office of Foreign Assets Control, and the United States Department of the Treasury, Office of Foreign Assets Control, challenging his designation under the Foreign Narcotics Kingpin Designation Act (the "Kingpin Act") as a specially designated narcotics trafficker, pursuant to the Administrative Procedure Act (the "APA"), 5 U.S.C. §§ 551-59, see Amended Complaint ("Am. Compl.") ¶¶ 126-31, 138-41, 145-47, ECF No. 8, the Fourth Amendment of the United States Constitution, see id. ¶¶ 135-37, and the Fifth Amendment of the United States Constitution, see id. ¶¶ 132-34, 142-44. Currently pending before the Court is (1) the Defendants' Motion to Dismiss or, in the Alternative, for Summary Judgment ("Defs.' Mot." or the "defendants' motion"), ECF No. 10, and (2) the Plaintiff's Cross Motion for Summary Judgment and Opposition to Defendants' Motion to Dismiss or, in the Alternative, for Summary Judgment ("Pl.'s Mot." or the "plaintiff's motion"), ECF No. 12. Upon careful consideration of the parties' submissions,¹ the Court concludes for the following reasons that it must grant in part and deny in part the defendants' motion and deny as moot the plaintiff's cross-motion. The defendants' motion is granted to the extent that it seeks dismissal pursuant to Rule 12(b)(6) and denied in all other respects.

I. BACKGROUND

A. Statutory Background

In 1999, Congress enacted the Kingpin Act, Pub. L. 106-120, tit. VIII, § 801, 113 Stat. 1626 (codified at 21 U.S.C. §§ 1901-08). The purpose of the Kingpin Act is to:

provide authority for the identification of, and application of sanctions on a worldwide basis to, significant foreign narcotics traffickers, their organizations, and the foreign persons who provide support to those significant foreign narcotics traffickers and their organizations, whose activities threaten the national security, foreign policy, and economy of the United States.

21 U.S.C. § 1902. The Kingpin Act authorizes the President to designate "foreign person[s] that play[ ] a significant role in international narcotics trafficking" as "significant foreign narcotics traffickers." Id. §§ 1903(b), 1907(7). It also authorizes the Secretary of the Treasury, in consultation with other Executive Branch officials, to designate as "specially designated narcotics traffickers" foreign persons they believe to be "materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of," or "owned, controlled, or directed by, or acting for or on behalf of" a significant foreign narcotics trafficker designated under 21 U.S.C. Section 1903(b). 31 C.F.R. § 598.314(b)(1)-(2); 21 U.S.C. §§ 1904(b)(2)-(3). The Secretary of the Treasury may also designate as "specially designated narcotics traffickers" foreign persons whom he or she believes "play a significant role" in international narcotics trafficking. 31 C.F.R. § 598.314(b)(3) (2021); 21 U.S.C. § 1904(b)(4). A "specially designated narcotics trafficker" designation by the Secretary of the Treasury or the Office of Foreign Assets Control (the "OFAC") pursuant to Section 1904(b) is a different designation than that made by the President under § 1903(b). See 31 C.F.R. § 598.314 (2021). The Secretary of the Treasury may delegate this authority to designate foreign persons as "specially designated narcotics traffickers" to the OFAC. See 31 C.F.R. § 598.803.

The names of specially designated narcotics traffickers are published by the OFAC in the Federal Register and on the OFAC's Specially Designated Nationals and Blocked Persons List. See 31 C.F.R. § 598.314 n.1. Moreover, as a consequence of being designated, the OFAC may block a foreign designated person's property or interests in property. See 21 U.S.C. § 1904(b). Designated persons may "seek administrative reconsideration of [their] designation . . . or assert that the circumstances resulting in [their designation] no longer apply" and thus request that the OFAC "rescind[ ] [the designation] pursuant to . . . administrative procedures." See 31 C.F.R. § 501.807 (2021).

B. Factual Background

The plaintiff, Samark Jose López Bello, "is and was at all times relevant [to this litigation] a citizen of Venezuela and Italy." Am. Compl. ¶ 11. On February 13, 2017, the OFAC designated the plaintiff as a "specially designated narcotics trafficker" under the Kingpin Act for providing "material assistance, financial support, or goods and services in support of" the international narcotics trafficking activities of another specially designated narcotics trafficker, Tareck Zaidan El Aissami. Id. ¶ 2. "[A]t the time of the designation," El Aissami was "the Vice President of the Government of Venezuela." Id. The OFAC designated El Aissami "simultaneous with, and as part of the same designation action targeting, [the plaintiff]." Id. ¶ 4; see id. ¶ 21 (stating that El Aissami was designated on February 13, 2017). At the time of his designation, the plaintiff held two United States ("U.S.") visas—an L1 ('temporary worker') visa and a B1/B2 ('business or tourism visitor') visa—" and "resided . . . [in] Coral Gables, F[lorida]." Id. ¶ 120. "[The plaintiff] was physically present in the United States pursuant to these U.S. visas approximately a week before his designation[.]" Id. At that time, the plaintiff's "wife was also [a U.S.] resident under a 'temporary worker' visa." Id. ¶ 121. They have four children, "[t]wo of [whom] are U.S. citizens[,] . . . [and] three of [them] were studying in the United States" prior to the plaintiff's designation. Id. "Simultaneous with [the plaintiff]'s designation," the OFAC blocked various property owned by the plaintiff, including "U.S. companies alleged to be owned or controlled by [the plaintiff], a U.S.-registered aircraft in which [the plaintiff] allegedly retained an interest, and several U.S.-based real properties and other U.S. assets—including vessels and automobiles—in which [the plaintiff] exercised ownership or control." Id. ¶ 23; see id. ¶¶ 23-26, 86.

On March 8, 2019, the United States Attorney's Office for the Southern District of New York charged the plaintiff with violations of the Kingpin Act. See id. ¶ 82. According to the superseding indictment, issued in March 2020, "[the plaintiff] worked with U.S. citizens and visa-holders to obtain travel services, including private jet charters[,]" in violation of "the Kingpin Act's prohibition on U.S. persons engaging in transactions with or providing services to [the plaintiff]." Id. ¶ 83.

On March 9, 2017, pursuant to the Kingpin Act, "[the plaintiff] requested the full administrative record underlying his designation and the blocking of his properties." Id. ¶ 27. On April 12, 2017, the OFAC responded by providing the plaintiff with the portions of the administrative record regarding the blocking of one of his South Florida properties and indicating that the remaining information regarding his designation "remained in processing and would be provided to him as soon as it was cleared for release." Id. ¶ 28. On May 22, 2017, the OFAC sent to the plaintiff additional portions of "the administrative record related to [his] designation and that of his companies, including certain U.S.-based companies; his U.S.-registered aircraft; and other real estate and assets in the United States." Id. ¶ 32. The portions of the administrative record that was sent on May 22, 2017, included an evidentiary memorandum containing information that, according to the OFAC, "provide[d] reason to believe that [the plaintiff] is a foreign person who is materially assisting in, or providing financial or technological support for or to, or providing goods or services in support of . . . El Aissami[.]" Id. ¶ 33. "This conclusion, according to [the] OFAC, provide[d] the grounds to determine that [the plaintiff] 'meets the criteria for designation as a[ ] [specially designated narcotics trafficker.]' " Id. Much of the record was redacted, see, e.g., id. ¶ 36, and the only "unredacted paragraph state[d] that, '[a]ccording to a July 2013 article in the Venezuelan online newspaper, Reportero 24, [López Bello] is "linked as [a] front m[a]n" for EL AISSAMI. The article asserts that [López Bello] has an estimated net worth of $1 billion.' " Id. ¶ 37 (all but the first alteration in original).

On July 18, 2017, the OFAC provided the plaintiff with "additional unclassified, non-privileged, or otherwise releasable information from the administrative record." Id. ¶ 74. The summaries explain the bases for the plaintiff's designation. See, e.g., id. ¶¶ 75-80 (providing information that the plaintiff "is the 'frontman' for [ ] El Aissami," that he is "in charge of laundering drug proceeds . . . and organizing the air and maritime cocaine routes to transport cocaine[,]" that El Aissami used the plaintiff to purchase certain assets like news outlets, and that the plaintiff is El Aissami's front man, "money manager" and "money launderer" (internal quotation marks omitted)). On November 3, 2021, the OFAC provided the plaintiff with nine additional pages from the administrative record that were approved for release. See Defs.' Mem. at 8.

C. Procedural History

The plaintiff filed his Complaint on June 29, 2021, see Complaint ("Compl.") at 1, ECF No. 1, and filed his Amended Complaint on ...