## Facts

- A Missouri-based nonprofit humanitarian organization was founded in 1985 as the Islamic African Relief Agency and renamed in 2000 as the Islamic American Relief Agency.
- A separate Sudan-based entity continued operating under the Islamic African Relief Agency name.
- In October 2004, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Sudan-based entity a Specially Designated Global Terrorist (SDGT).
- Although the U.S. nonprofit was not separately listed as an SDGT, OFAC treated it as a U.S. branch of the designated Sudan-based entity and included it in the blocking action.
- The blocking prohibited dealing in the U.S. nonprofit’s property and interests in property without OFAC authorization.
- OFAC’s branch determination relied on name/history overlap, asserted organizational ties and cooperation, and OFAC’s assessment that the U.S. nonprofit functioned as a branch rather than an independent organization.
- The nonprofit sued federal officials under the Administrative Procedure Act (APA) and the Constitution, challenging the branch determination, the asset blocking, and seeking relief including access to funds to pay counsel.
- The district court granted summary judgment to the government on the APA and constitutional claims and denied leave to amend the complaint to seek access to blocked funds for attorneys’ fees.

## Issues

1. Whether OFAC’s determination that the U.S. nonprofit was a branch of the designated SDGT, and the resulting asset blocking, were supported by the administrative record and lawful under the APA and governing authorities.
2. Whether the asset blocking violated the nonprofit’s constitutional rights, including equal protection-based objections.
3. Whether the district court abused its discretion by denying leave to amend the complaint to request access to blocked funds to pay attorneys’ fees.

## Decision

- The court of appeals affirmed the judgment upholding OFAC’s branch determination and the asset blocking under the APA.
- The court of appeals rejected the constitutional challenges.
- The court of appeals remanded for further proceedings on the denial of leave to amend concerning access to blocked funds for attorneys’ fees.

## Legal Principles

- Agency action is upheld under the APA if supported by substantial evidence and not arbitrary, capricious, or contrary to law.
- In matters implicating national security and foreign policy, judicial review is especially deferential to executive determinations.
- OFAC may block property interests of a designated terrorist entity and, where supported by the record, treat an associated U.S. entity as a branch subject to the same blocking restrictions.
- Equal protection and related constitutional challenges fail absent a showing that the claimant is similarly situated to comparators and where the government action is grounded in record-supported findings of terrorist ties; there is no constitutional entitlement to support terrorism-linked activity.
- Leave to amend under Federal Rule of Civil Procedure 15 should be freely given; denial may warrant reconsideration where the record suggests confusion or potentially misleading agency communications about procedures for seeking authorization to pay attorneys.

## Conclusion

The court sustained OFAC’s treatment of the U.S. nonprofit as a branch of an SDGT and upheld the resulting asset blocking under deferential APA review, rejected the asserted constitutional violations, and sent back for reconsideration whether the nonprofit should be allowed to amend its pleadings to seek access to blocked funds for attorneys’ fees.


Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728 (D.C. Cir. 2007)