Plaintiff KindHearts for Charitable Humanitarian Development, Inc. (KindHearts), an Ohio non-profit corporation established in 2002, provides millions of dollars of humanitarian aid internationally, principally towards Palestinians in the West Bank, Gaza, and refugee camps in Lebanon. On February 19, 2006, the Office of Foreign Assets Control (OFAC) of the United States Treasury Department notified KindHearts that all its property and assets were frozen pending an investigation into whether KindHearts provided material support to Hamas. The same day, federal agents executed a search warrant at the KindHearts headquarters and the residence of its president. Over a year later in May 2007, OFAC provisionally determined that KindHearts should be designated as a Specially Designated Global Terrorist (SDGT) under the International Emergency Economic Powers Act (IEEPA), 50 U.S.D. § 1701 et seq. and Executive Order 13224 (E.O. 13224).
In October 2008, plaintiff, represented by the American Civil Liberties Union, filed suit in United States District Court for the Northern District of Ohio against OFAC, alleging violations of the First, Fourth, and Fifth Amendments, the Administrative Procedures Act, 5 U.S.C. § 701 et seq., the IEEPA, 50 U.S.C. § 1701(a), and E.O. 13224. Plaintiff requested an injunction vacating the freeze order and declaratory judgment.
The district court (Judge James Carr) issued a temporary restraining order blocking the SGDT designation pending judicial review. In November and December 2008, both parties moved for summary judgment and defendants moved to dismiss.
Meanwhile, plaintiff had filed a motion under the Federal Rules of Criminal Procedure 41(g) to recover some of the materials seized in February 2006. The district court ordered government to produce copies of the seized materials. In re Search of KindHearts for Charitable Humanitarian Development, Inc., 594 F. Supp. 2d 855 (N.D. Ohio 2009).
Following oral arguments on the issue of summary judgment, in August 2009 the district court partially granted the motion to dismiss with respect to some Fourth Amendment claims and OFAC's constitutional authority. Plaintiff's motion for partial summary judgment was granted with respect to OFAC's violation of the Fourth Amendment, failure to provide notice an opportunity to be heard, and blocking plaintiff's funds to compensate its legal counsel. KindHearts for Charitable Humanitarian Development, Inc. v. Geithner, 647 F. Supp. 2d 857 (N.D. Ohio 2009).
Plaintiff moved for, and the district court granted, a temporary restraining order enjoining defendants from proceeding with the SGDT designation process pending the court's adjudication of applicable remedies for the constitutional and statutory violations found in the August 2009 order. KindHearts for Charitable Humanitarian Development, Inc. v. Geithner, 676 F. Supp. 2d 649 (N.D. Ohio 2009).
Following supplemental briefing on the issue of applicable remedies, in May 2010 the district court ordered government to show probable cause and provide plaintiff with notice of its basis for the freeze on its assets and the pending OFAC investigation. KindHearts for Charitable Humanitarian Development, Inc. v. Geithner, 710 F. Supp. 2d 637 (N.D. Ohio 2010).
Defendants provided briefing on the issues, and the parties headed towards trial. However, in January 2012, the parties settled. Plaintiff was required to dissolve and cease operations, and defendants were required to remove Kindhearts from all lists of entities whose assets are blocked and to pay $330,000 in attorneys' fees and expenses.Elizabeth Homan - 11/18/2013