United States Court of Appeals verdict on NCRI

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United States Court of Appeals



Argued April 2, 2004                                                      Decided July 9, 2004


No. 01-1480











On Petition for Review of Orders of the

Department of State


Paul F. Enzinna argued the cause and filed the briefs forpetitioner. Martin D. Minsker entered an appearance.

Douglas Letter, Litigation Counsel, U.S. Department ofJustice, argued the cause for respondents. With him on thebrief was Peter D. Keisler, Assistant Attorney General.

Bills of costs must be filed within 14 days after entry of judgment.The court looks with disfavor upon motions to file bills of costs outof time.  

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Before: HENDERSON, GARLAND, and ROBERTS, CircuitJudges.Opinion for the Court filed by Circuit Judge ROBERTS.ROBERTS, Circuit Judge: This is the fourth in a series ofrelated cases concerning the biennial designations by theSecretary of State of the Mojahedin-e Khalq Organization(MEK)1and its aliases as a foreign terrorist organization(FTO). See People’s Mojahedin Org. of Iran v. Dep’t ofState, 182 F.3d 17 (D.C. Cir. 1999) (PMOI I); NationalCouncil of Resistance of Iran v. Dep’t of State, 251 F.3d 192(D.C. Cir. 2001) (NCRI); People’s Mojahedin Org. of Iran v.Dep’t of State, 327 F.3d 1238 (D.C. Cir. 2003) (PMOI II); seegenerally 8 U.S.C. § 1189. In 1999, and again in 2001, theNational Council of Resistance of Iran (NCRI) was deter-mined by the Secretary of State to be an alias of MEK andwas accordingly also designated an FTO. See 1999 Designa-tion, 64 Fed. Reg. at 55,112; 2001 Redesignation, 66 Fed.Reg. at 51,089. In May 2003, after a remand to cure certaindue process deficiencies, see NCRI, 251 F.3d at 208–09, theSecretary decided to leave in place the 1999 and 2001 desig-1The Mojahedin-e Khalq translates into English as People’sMojahedin. [AR268] The Mojahedin-e Khalq Organization (MEK)is known in English as the People’s Mojahedin Organization of Iran(PMOI). Our prior decisions have variously referred to the Moja-hedin-e Khalq as MEK, People’s Mojahedin of Iran, and PMOI.Compare PMOI I, 182 F.3d at 20 (‘‘the People’s Mojahedin Organi-zation of Iran — the MEK, for short’’), with NCRI, 251 F.3d at 197(‘‘petitioner People’s Mojahedin Organization of Iran (‘PMOI’)’’).To limit confusion, wherever possible we will use the terms Mojahe-din-e Khalq and MEK, and, except in case names, not the termsPeople’s Mojahedin or PMOI. We adopt this convention because itis the Mojahedin-e Khalq Organization that the Secretary hasdesignated as a foreign terrorist organization. See Designation ofForeign Terrorist Organizations, 62 Fed. Reg. 52,650 (Oct. 8, 1997)(1997 Designation); Designation of Foreign Terrorist Organiza-tions, 64 Fed. Reg. 55,112 (Oct. 8, 1999) (1999 Designation); Redes-ignation of Foreign Terrorist Organizations, 66 Fed. Reg. 51,088,51,089 (Oct. 5, 2001) (2001 Redesignation); Redesignation of For-eign Terrorist Organizations, 68 Fed. Reg. 56,860, 56,861 (Oct. 2,2003) (2003 Redesignation). ——————————————————————————– Page 3

nations of NCRI as an FTO. NCRI now again petitions forreview. After reviewing NCRI’s arguments, the entirety ofthe administrative record, and certain classified materialsappended to that record, we conclude that the Secretary’slatest designation complied with the governing statute and allconstitutional requirements. We therefore deny the petitionfor review.I.The Anti-Terrorism and Effective Death Penalty Act of1996 (AEDPA) empowers the Secretary of State to designatean entity as an FTO whenever the Secretary determines that(1) the entity is foreign; (2) it engages in terrorist activity;and (3) the terrorist activity threatens the security of theUnited States or its nationals. 8 U.S.C. § 1189(a)(1). Adesignation as an FTO persists for two years, after which theSecretary may redesignate the entity as an FTO for a suc-ceeding two-year period upon finding that the statutory cir-cumstances still exist. Id. § 1189(a)(4)(B).An FTO designation visits serious consequences on theaffected organization: The Secretary of the Treasury mayrequire financial institutions to freeze any assets of the FTO,id. § 1189(a)(2)(C); the members and representatives of theFTO become ineligible to enter the United States, id.§ 1182(a)(3)(B)(i)(IV), (V); and anyone who knowingly pro-vides ‘‘material support or resources’’ to the FTO — includingany donation of money — may be prosecuted and imprisonedfor up to fifteen years, 18 U.S.C. § 2339B(a)(1). The mani-fest purpose of these provisions is to deny terrorist organiza-tions support — financial or otherwise — in and from theUnited States. See H.R. REP. NO. 104-383, at 43–45 (1995)(House Report on AEDPA’s primary predecessor bill).Despite these serious consequences of designation, thegoverning statute affords suspect entities only ‘‘truncated’’participation in the administrative process leading to thedesignation and ‘‘quite limited’’ judicial review after the fact.NCRI, 251 F.3d at 196. As we noted in PMOI I, ‘‘unlike therun-of-the-mill administrative proceeding,’’ ‘‘there is [under ——————————————————————————– Page 4  

AEDPA] no adversary hearing, no presentation of whatcourts and agencies think of as evidence, [and] no advancenotice to the entity affected by the Secretary’s internaldeliberations.’’ 182 F.3d at 19. Once the Secretary hasdesignated an entity an FTO, the statute directs us to ‘‘holdunlawful and set aside a designation’’ only if we find it to be:(A) arbitrary, capricious, an abuse of discretion, or oth-erwise not in accordance with law;(B) contrary to constitutional right, power, privilege, orimmunity;(C) in excess of statutory jurisdiction, authority, or limi-tation, or short of statutory right;(D) lacking substantial support in the administrative rec-ord taken as a whole or in classified information submit-ted to the court [ex parte and in camera], or(E) not in accord with the procedures required by law.8 U.S.C. § 1189(b)(3). Although the statute permits thiscourt to base its review either ‘‘solely upon the administrativerecord’’ ‘‘taken as a whole,’’ or as supplemented by anyclassified information submitted by the Secretary, the Actmakes no provision for the disclosure of that classified materi-al to the designated entity. See id. § 1189(b)(2), (3)(D); seegenerally 28 C.F.R. pt. 17 (governing access to classifiednational security information).In 1997, and every two years since, the Secretary hasdesignated MEK an FTO. See 1997 Designation, 62 Fed.Reg. at 52,650; 1999 Designation, 64 Fed. Reg. at 55,112;2001 Redesignation, 66 Fed. Reg. at 51,089; 2003 Redesig-nation, 68 Fed. Reg. at 56,861. Starting in 1999, the Secre-tary added NCRI to the list of designated FTOs, havingconcluded that NCRI was an alias of MEK. See 1999 Desig-nation, 64 Fed. Reg. at 55,112 (‘‘I hereby designate TTT thefollowing organization as a foreign terrorist organization: TTTMujahedin-e Khalq Organization TTT also known as NationalCouncil of Resistance, also known as NCR.’’). NCRI now, forthe second time, seeks review of that designation. In NCRI’sprevious challenge — brought jointly with MEK — we con- ——————————————————————————– Page 5

cluded that both the 1999 designation of MEK as an FTO andthe designation of NCRI as an alias of MEK satisfied therequirements of the statute. Specifically concerning NCRI,we held — based on the record then presented to us by theSecretary — that the Secretary’s conclusion that NCRI wasan alias of MEK ‘‘does not lack substantial support and TTT isneither arbitrary, capricious, nor otherwise not in accordancewith law.’’ NCRI, 251 F.3d at 199.As a constitutional matter, however, we determined thatthe procedures afforded by the statute and employed by theSecretary in arriving at those designations violated bothorganizations’ due process rights. See id. at 208–09. We didnot vacate the Secretary’s designation as to either MEK orNCRI, but remanded to the Secretary with instructions thateach entity be afforded the opportunity to: (1) respond to anypart of the Secretary’s administrative record that is notclassified material; (2) file evidence on its own behalf; and (3)be meaningfully heard by the Secretary. Id. at 210.Both MEK and NCRI availed themselves of these opportu-nities. NCRI submitted voluminous materials that purportedto demonstrate that it was sufficiently independent of MEKthat it could not be considered an alias of that organization.On September 24, 2001, the State Department informed MEKand NCRI that the Secretary had decided to leave the 1999designation of MEK in place but that ‘‘no such determinationregarding the NCRI as an alias of the MEK is possible atthis time.’’ Letter of Ambassador Francis X. Taylor, Coordi-nator for Counterterrorism, U.S. Dep’t of State, at 2 (Sept.24, 2001). This was shortly followed, on October 5, 2001, bythe Secretary’s redesignation of both MEK as an FTO andNCRI as an alias of MEK. See 2001 Redesignation, 66 Fed.Reg. at 51,089. At that time, the State Department assuredNCRI that although ‘‘the present situation TTT requires con-tinued designation of [NCRI] as an alias of MEK for now,’’upon the completion of review of NCRI’s submissions, ‘‘theSecretary will make a de novo determination in light of theentire record, including the material you have submitted.’’ ——————————————————————————– Page 6

Letter of Ambassador Francis X. Taylor, Coordinator forCounterterrorism, U.S. Dep’t of State, at 1 (Oct. 5, 2001).Nearly a year later, the State Department provided forNCRI’s review additional materials obtained by the FBI inthe course of ‘‘its long-running investigation of the MEK andNCRI.’’ Letter of Ambassador Francis X. Taylor, Coordina-tor for Counterterrorism, U.S. Dep’t of State, at 1 (Sept. 4,2002). Within two months, NCRI submitted its response.See Letter of Paul F. Enzinna, Esq. (Nov. 1, 2002). In May2003, the State Department completed its review process and,on May 24, the Secretary decided to leave in place the 1999and 2001 ‘‘designations of the National Council of Resistance(NCR) and the National Council of Resistance of Iran(NCRI) as foreign terrorist organization aliases of the Muja-hedin-e Khalq (MEK).’’ Action Mem. from William Pope &William H. Taft, IV to the Secretary of State, at 3 (May 22,2003) (Action Mem.). NCRI now petitions for review of thislatest decision.II.NCRI’s primary argument is that the Secretary’s conclu-sion that NCRI is an alias of MEK lacks substantial supportin the administrative record. NCRI insists that it is anumbrella organization of Iranian dissident persons and groupsof which MEK is only a single member, no more powerfulthan any other. In addressing this contention, we begin withour earlier holding in this action. In NCRI, we concluded —based on the record then presented to us — that the Secre-tary’s designation of NCRI as an alias of MEK ‘‘does not lacksubstantial support and TTT is neither arbitrary, capricious,nor otherwise not in accordance with law.’’ 251 F.3d at 199.Although that decision is obviously not determinative of thequestion before us today — we are now reviewing a recordthat has since been supplemented both by the Governmentand NCRI — its holding must nevertheless inform our deci-sion here. Logically, NCRI’s challenge can succeed only ifthe new record materials establish its independence fromMEK so that we can no longer affirm that ‘‘the Secretary, on ——————————————————————————– Page 7

the face of things, had enough information before [him] tocome to the conclusion’’ that NCRI is an alias of MEK. Id.Having reviewed the supplemented administrative record as awhole and the classified information appended to it, we con-clude that NCRI has not met this burden.To explain our decision, we must first review what itmeans — in the very particular context of AEDPA — for oneorganization to be an alias of another. On its previousappeal, NCRI argued that the Secretary lacked authorityunder AEDPA to designate an entity an FTO based on afinding that it was an alias of another designated FTO. Seeid. at 200. We rejected that contention, finding that thegrant of authority to designate FTOs ‘‘implies the authorityto so designate an entity that commits the necessary terroristacts under some other name.’’ Id. In so doing, we used amathematics metaphor — specifically, the transitive proper-ty — to describe the alias concept: ‘‘Logically, indeed mathe-matically, if A equals B and B equals C, it follows that Aequals C. If the NCRI is the [MEK], and if the [MEK] is aforeign terrorist organization, then the NCRI is a foreignterrorist organization also.’’ Id.; see also id. (‘‘If the Secre-tary has the power to work those dire consequences on anentity calling itself ‘Organization A,’ the Secretary must beable to work the same consequences on the same entity whileit calls itself ‘Organization B.’ ’’). Seizing upon our earlierinvocation of the transitive property, NCRI now argues thatthe administrative record does not demonstrate that ‘‘Aequals B’’ — that is, that NCRI equals MEK — and there-fore NCRI cannot be an alias of MEK. Indeed, NCRIrightly points out that even the State Department acknowl-edges that NCRI and MEK are not ‘‘one and the same.’’ SeePet. Reply Br. 4–6.Implicit in NCRI’s argument, however, is a mistaken as-sumption that the alias concept, under AEDPA, is boundedby the transitive property. This reads too much into ourmathematical metaphor in NCRI. See Berkey v. Third Ave.Ry. Co., 244 N.Y. 84, 94 (1926) (Cardozo, J.) (‘‘Metaphors inlaw are to be narrowly watched, for starting as devices toliberate thought, they end often by enslaving it.’’). While it is ——————————————————————————– Page 8

certainly correct to use the term alias to describe scenarioswhere a single entity is known by more than one name — forinstance, Mojahedin-e Khalq is an alias for People’s Mojahe-din, two names for the same organization, one Farsi, theother English — nothing in AEDPA or any more general ruleof logic or language requires that the application of the aliasconcept be strictly limited to such circumstances.To the contrary, our citation in NCRI to First NationalCity Bank v. Banco Para El Comercio Exterior de Cuba, 462U.S. 611 (1983), indicates that we intended the alias conceptto have a sweep beyond the transitive. In that case, whichconcerned a suit brought by Banco Para El Comercio Exteri-or (BPECE) against First National City Bank for perform-ance under a letter of credit, the Supreme Court held thatFirst National could counterclaim for setoff of the value of itsassets that had been seized and nationalized by the Cubangovernment, notwithstanding the fact that BPECE had beenestablished by the Cuban government as a juridical entityseparate from the government. See id. at 623–34. Acknowl-edging a presumption that ‘‘government instrumentalities es-tablished as juridical entities distinct and independent fromtheir sovereign should normally be treated as such,’’ id. at626–27, the Court nevertheless concluded that the normallyseparate juridical status had to be set aside where the Cubangovernment was the real party in interest behind BPECE’sletter of credit claim, id. at 632. The Court, in reaching itsconclusion, looked to ordinary principles of agency law, notingthat ‘‘where a corporate entity is so extensively controlled byits owner that a relationship of principal and agent is created,we have held that one may be held liable for the actions of theother.’’ Id. at 629 (citing NLRB v. Deena Artware, Inc., 361U.S. 398, 402–04 (1960)). We think those same ordinaryprinciples of agency law are fairly encompassed by the aliasconcept under AEDPA. When one entity so dominates andcontrols another that they must be considered principal andagent, it is appropriate, under AEDPA, to look past theirseparate juridical identities and to treat them as aliases.The inclusion of these fundamental precepts of agency lawwithin AEDPA’s alias concept is entirely consistent with — ——————————————————————————– Page 9

indeed, necessary to — the effective pursuit of the statute’sobjective of denying support in and from the United States toterrorist organizations. Just as it is silly to suppose ‘‘thatCongress empowered the Secretary to designate a terroristorganization TTT only for such periods of time as it took suchorganization to give itself a new name, and then let it happilyresume the same status it would have enjoyed had it neverbeen designated,’’ NCRI, 251 F.3d at 200, so too it is implau-sible to think that Congress permitted the Secretary todesignate an FTO to cut off its support in and from theUnited States, but did not authorize the Secretary to preventthat FTO from marshaling all the same support via juridicallyseparate agents subject to its control. For instance, underNCRI’s conception, the Government could designate XYZorganization as an FTO in an effort to block United Statessupport to that organization, but could not, without a separateFTO designation, ban the transfer of material support toXYZ’s fundraising affiliate, FTO Fundraiser, Inc. Thecrabbed view of alias status advanced by NCRI is at war notonly with the antiterrorism objective of AEDPA, but commonsense as well.We need not plumb all the complexities of agency law todetermine when an agent, under AEDPA, is the alias of itsprincipal. It is sufficient for our purposes to note that therequisite relationship for alias status is established at leastwhen one organization so dominates and controls another thatthe latter can no longer be considered meaningfully indepen-dent from the former. See, e.g., NLRB v. Deena Artware,Inc., 361 U.S. 398, 403 (1960) (‘‘ ‘Dominion may be so com-plete, interference so obtrusive, that by the general rules ofagency the parent will be a principal and the subsidiary anagent.’ ’’) (quoting Berkey, 244 N.Y. at 95); Casino ReadyMix, Inc. v. NLRB, 321 F.3d 1190, 1196 (D.C. Cir. 2003)(‘‘ ‘agent’ is one who agrees to act ‘subject to [a principal’s]control’ ’’) (quoting RESTATEMENT (SECOND) OF AGENCY § 1, cmt.a (1958)); cf. Transamerica Leasing, Inc. v. La Republica deVenezuela, 200 F.3d 843, 848 (D.C. Cir. 2000) (‘‘A sovereign isamenable to suit based upon the actions of an instrumentalityit dominates because the sovereign and the instrumentality ——————————————————————————– Page 10

are in those circumstances not meaningfully distinct entities;they act as one.’’).We thus frame our inquiry here as whether ‘‘the Secretary,on the face of things, had enough information before [him] tocome to the conclusion’’ that NCRI was dominated andcontrolled by MEK. PMOI I, 182 F.3d at 25. Based on ourreview of the entire administrative record and the classifiedmaterials appended thereto, we find that the Secretary didhave an adequate basis for his conclusion. While our deter-mination is buttressed by classified information provided tous on an ex parte and in camera basis — the contents ofwhich we cannot discuss — the voluminous unclassified mate-rials contained in the administrative record by themselvesand by a comfortable margin provide sufficient support forthe Secretary’s conclusion, given the standard of review. Itwould serve little purpose to catalogue all the material in theadministrative record supporting the conclusion that NCRI isdominated and controlled by MEK, but we will set out belowa few of the pieces of information we found to be mostcompelling. As we do so, it bears repeating that AEDPAdoes not permit us, in exercising our limited judicial review,to make any ‘‘judgment whatsoever regarding whether thematerial before the Secretary is or is not true,’’ but allows usto inquire only whether the Secretary ‘‘had enough informa-tion before [him] to come to the conclusion’’ that NCRI isdominated and controlled by MEK. Id.After an extensive investigation of MEK and NCRI, theFBI reported to the State Department that ‘‘[i]t is theunanimous view of the FBI personnel who are involved in andfamiliar with the FBI’s investigation of the [MEK] that theNCRI is not a separate organization, but is instead, and hasbeen, an integral part of the MEK at all relevant times.’’Letter of Charles Frahm, Section Chief, International Terror-ism Operations Section II, at 1 (Aug. 28, 2002). Contrary toNCRI’s portrayal of itself as an umbrella organization, ofwhich the MEK was just one member, the FBI concludedthat it is NCRI that is ‘‘the political branch’’ of the MEK. Id.Attach. at 1. ——————————————————————————– Page 11


This conclusion was based in large part on evidence gath-ered from the search — executed in December 2001 pursuantto a valid warrant — of a house in Falls Church, Virginiaapparently used as office space by both NCRI and MEK.There, the FBI discovered NCRI and MEK materials ‘‘com-mingled together, and not separated,’’ including bank records,signed blank checks, MEK propaganda, NCRI publications,travel documents, and letterhead which listed the sameFrench address for each organization. Id. Attach. at 2–4.Crucially, among the recovered documents was a schematicbreakdown of the ‘‘Iranian Resistance,’’ which describedNCRI as ‘‘The Political Branch’’ of the movement. Id. at Tab6.Additionally, earlier investigations of MEK and NCRI hadrevealed that the two organizations shared an essentiallyunitary leadership structure. The overall head of MEK,Massoud Rajavi, also leads NCRI. And Rajavi’s wife, Mar-yam Rajavi, was selected by NCRI to be Iran’s President-in-Exile. Id. Attach. at 2; see also id. Attach. at 4 (‘‘Theleadership of [MEK] and NCRI is intermixed, and the enti-ties operate in a day-to-day way as a single unit.’’). Thesefacts corroborated the FBI’s earlier conclusion prior to the2001 designation of NCRI as an FTO that ‘‘the NCR/NCRI isin fact controlled by and inseparable from the MEK.’’ Decl.of Agent Michael Rolince (quoted in Action Mem., Tab 2 at11).The State Department acknowledged that ‘‘NCRI has sub-mitted numerous affidavits purporting to show that it is notcontrolled by the MEK and is not an MEK front,’’ and evencredited some of NCRI’s ‘‘subsidiary points.’’ Action Mem.,Tab 2 at 12, 9. The agency, however, concluded that ‘‘theevidence developed by the FBI is convincingly to the con-trary.’’ Id. Tab 2 at 12. It may be true that the StateDepartment relied very heavily on the conclusions of thecounterterrorism experts of the FBI. As noted above,though, under the narrow powers of judicial review Congresshas accorded to us under AEDPA, it is emphatically not ourprovince to second-guess the Secretary’s judgment as towhich affidavits to credit and upon whose conclusions to rely. ——————————————————————————– Page 12  

We are to judge only whether the ‘‘support’’ marshaled forthe Secretary’s designation was ‘‘substantial.’’ 8 U.S.C.§ 1189(b)(3)(D). We conclude that the support for the Secre-tary’s conclusion that NCRI was dominated and controlledby, and thus was an alias of, MEK was indeed substantial,and we therefore reject NCRI’s statutory challenge to itsdesignation as an FTO.III.This leaves only NCRI’s constitutional challenges to certainprocedures employed in making that designation. Specifical-ly, NCRI argues that due process requires that (1) it beprovided access to any classified materials that the Secretaryrelied upon in making the designation, and (2) it have anadversary hearing before the agency at which it could con-front witnesses against it. Both these arguments are fore-closed by our earlier decisions in NCRI and PMOI II. See251 F.3d at 208–09; 327 F.3d at 1242–43. ConcerningNCRI’s claim that it is entitled to review classified materials,in NCRI we wrote that the government ‘‘need not disclose theclassified information to be presented in camera and ex parteto the court under the statute.’’ 251 F.3d at 208. In PMOIII, addressing the same claim, this time brought by MEK, wewere even more emphatic: ‘‘We reject this contentionTTTTWe already decided in [NCRI] that due process required thedisclosure of only the unclassified portions of the administra-tive record.’’ 327 F.3d at 1242. PMOI II also disposes ofNCRI’s claim for an adversary hearing. There, we held thatNCRI established the constitutional baseline for fair processand, the Government having complied with those commandson remand, that ‘‘nothing further is due.’’ Id. at 1243. Wereach the same conclusion with regard to NCRI.The petition for review is denied.


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