In Re Any and All Funds or Other Assets, in Brown

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 22, 2009 Decided July 16, 2010

No. 09-5065

IN RE: ANY AND ALL FUNDS OR OTHER ASSETS, IN BROWN
BROTHERS HARRIMAN & CO. ACCOUNT #8870792 IN THE
NAME OF TIGER EYE INVESTMENTS LTD., ET AL.,

UNITED STATES OF AMERICA,
APPELLANT

v.

OPPORTUNITY FUND AND TIGER EYE INVESTMENTS, LTD.,
APPELLEES

Consolidated with 09-5164, 09-5190

Appeals from the United States District Court
for the District of Columbia
(No. 1:08-mc-00807-JDB)

Jean B. Weld, Attorney, U.S. Department of Justice,
argued the cause for appellant. With her on the briefs were
Linda M. Samuel and Daniel H. Claman, Attorneys. R. Craig
Lawrence, Assistant U.S. Attorney, entered an appearance.
 2

Kelly B. Kramer argued the cause for appellee
Opportunity Fund. With him on the brief were Anjali
Chaturvedi and Lara Levinson.

Andrew C. Lourie argued the cause for appellee Tiger
Eye Investments, Ltd. With him on the brief was Michael S.
Kim.

Before: ROGERS, GARLAND, and KAVANAUGH, Circuit
Judges.

Opinion for the Court filed by Circuit Judge
KAVANAUGH.

KAVANAUGH, Circuit Judge: The U.S. Government
seeks a court order under 28 U.S.C. § 2467(d)(3) to freeze the
assets of individuals and entities who are the subjects of an
ongoing criminal investigation by the Brazilian government
for possible violations of Brazilian law.

Before entering the fog of statutory analysis, it is
important to carefully identify the power being asserted here.
The U.S. Government is claiming authority under 28 U.S.C.
§ 2467(d)(3) – a provision enacted into law in 2001 – to
freeze a person’s assets for a period that could be years,
including the assets of U.S. citizens, (i) based solely on a
foreign official’s allegation that the owner of the assets
violated that country’s law, (ii) before any foreign court has
decided whether the owner of the assets is actually guilty of a
legal violation, and (iii) without any right for the owner of the
assets to obtain substantive judicial review in a U.S. court of
the basis for the freeze order, even just for probable cause that
the owner committed an offense.
 3

The precise statutory question we must decide is whether
property may be frozen under § 2467(d)(3) only after a
foreign court has entered a forfeiture judgment, as the District
Court concluded, or also may be frozen even before any such
foreign court forfeiture judgment, as the Government posits.
Like the District Court, we interpret the statute to mean that a
U.S. court may freeze assets under § 2467(d)(3) only after a
foreign court’s forfeiture judgment.

In so ruling, we make two points clear up front. First, the
Government has expressly acknowledged that the statutory
authority it claims here is not used in national security
matters, presumably because a variety of other statutes give
the Government power to freeze and forfeit property for
national security reasons. Second, this case does not involve
or affect the U.S. Government’s ability to freeze or forfeit
assets for alleged or proved violations of U.S. law. This case
concerns only whether § 2467(d)(3) grants the U.S.
Government the power to freeze assets based solely on a
foreign official’s allegation of a violation of that country’s
law, and before any foreign court has adjudicated the matter.

I

In late 2008, the government of Brazil submitted a formal
request for assistance under the Treaty Between the
Government of the United States of America and the
Government of the Federative Republic of Brazil on Mutual
Legal Assistance in Criminal Matters, U.S.-Braz., Oct. 14,
1997, S. TREATY DOC. NO. 105-42 (1998). The Brazilian
authorities asked the United States to freeze (i) accounts held
by the Opportunity Fund, a Cayman Islands investment fund,
at UBS AG in Connecticut, and (ii) an account held by Tiger
 4

Eye Investments, Ltd. at Brown Brothers Harriman & Co. in
New York.

The affidavit accompanying the Brazilian request alleged,
based on an ongoing Brazilian criminal investigation, that
Daniel and Veronica Dantas had perpetrated a scheme to
defraud the Brazilian financial system, engage in insider
trading, and launder the proceeds of those crimes. Many of
those activities, the affidavit stated, were carried out through
the Opportunity Fund and Tiger Eye Investments.

In late 2008 and early 2009, based on information
contained in the affidavit, the United States Department of
Justice filed a series of applications in the U.S. District Court
for the District of Columbia for restraining orders against
accounts held by the Opportunity Fund and Tiger Eye. As
authority for its applications, the Government cited 28 U.S.C.
§ 2467(d)(3), which authorizes a district court to issue “a
restraining order pursuant to section 983(j) of title 18” in
order to “preserve the availability of property subject to a
foreign forfeiture or confiscation judgment.” 28 U.S.C.
§ 2467(d)(3)(A).

As relevant to the substantive issue presented here, the
District Court ultimately concluded in two decisions – one in
March 2009 and one in May 2009 – that § 2467(d)(3) did not
authorize it to issue restraining orders until a Brazilian court
issued a forfeiture or confiscation judgment. Because no such
foreign court judgment had yet issued, the District Court
denied the U.S. Government’s application for restraining
orders.
 5

II

We first explain our jurisdiction to hear this appeal under
28 U.S.C. § 1292(a)(1).

The courts of appeals have jurisdiction to review district
court decisions “granting, continuing, modifying, refusing or
dissolving injunctions, or refusing to dissolve or modify
injunctions.” 28 U.S.C. § 1292(a)(1). Under this statute, we
have appellate jurisdiction to review the District Court’s
granting or denying of a preliminary injunction. See Davis v.
Pension Benefit Guar. Corp., 571 F.3d 1288, 1291 (D.C. Cir.
2009). A restraining order lasting longer than 14 days
generally is considered an injunction, the granting or denying
of which is subject to appeal. See Sampson v. Murray, 415
U.S. 61, 86 (1974); United States v. E-Gold, Ltd., 521 F.3d
411, 414-15 (D.C. Cir. 2008) (order restraining “assets
pending trial and judgment” is an “injunction” under 28
U.S.C. § 1292(a)(1)). Here, the relevant restraining orders
sought by the Government – and ultimately denied by the
District Court – would have lasted far longer than 14 days.
Therefore, the District Court’s March decision (which
dissolved prior injunctions that had already lasted longer than
14 days and would have continued indefinitely) and its May
decision (denying an injunction that would have lasted longer
than 14 days) are appealable under § 1292(a)(1).

We thus proceed to the merits of the statutory dispute. In
analyzing the statute, we exercise de novo review. See United
States v. Sheehan, 512 F.3d 621, 629 (D.C. Cir. 2008).

III

Before 2000, the U.S. could forfeit assets at the request of
a foreign government only by instituting independent
 6

forfeiture proceedings in a U.S. Court based on alleged
violations of U.S. law.

In 2000, Congress passed and President Clinton signed
the Civil Asset Forfeiture Reform Act, Pub. L. No. 106-185,
§ 15, 114 Stat. 202, 219-21 (2000). That Act included most
of what is now 28 U.S.C. § 2467. Section 2467 grants federal
district courts jurisdiction to enforce “foreign forfeiture or
confiscation judgment[s]” and to “enter such orders as may be
necessary to enforce the judgment on behalf of the foreign
nation.” 28 U.S.C. § 2467(c)(1), (d)(1). The statute thus
allows the U.S. Government to forfeit assets based on the
existence of a foreign court judgment; no longer does the U.S.
Government need to institute independent forfeiture
proceedings based on violations of U.S. law in order to seize
such property.

In 2001, Congress passed and President Bush signed the
Patriot Act, a wide-ranging piece of legislation that included
what is now 28 U.S.C. § 2467(d)(3). That provision
authorizes federal district courts to issue temporary
restraining orders to “preserve the availability of property
subject to a foreign forfeiture or confiscation judgment.” Id.
§ 2467(d)(3)(A).

The statutory issue before us is whether property may be
frozen under § 2467(d)(3) only after a foreign court has
entered a forfeiture judgment, or also may be frozen even
before any such foreign court forfeiture judgment.

A

By its plain text, § 2467(d)(3) allows U.S. courts to issue
temporary restraining orders to preserve property “subject to a
 7

foreign forfeiture or confiscation judgment” – not to preserve
property “subject to foreign forfeiture or confiscation.”
Standing alone, the phrase “subject to a foreign forfeiture or
confiscation judgment” is more naturally read to mean that
the foreign court’s judgment already has been entered, not
that a judgment might be issued in the future.

Moreover, Congress knows the difference between
“subject to forfeiture” and “subject to a forfeiture judgment.”
Congress has repeatedly used the phrase “subject to
forfeiture” to describe property that may be forfeited in a
future proceeding. E.g., 8 U.S.C. § 1324(b)(1); 16 U.S.C.
§ 470gg(b); id. § 668b(b); id. § 742j-1(e); id. § 972f(c); id.
§ 1171(a); id. § 1417(c); id. § 1437(e)(1); id. § 1540(e)(4)(A);
18 U.S.C. § 981(a)(1); id. § 983(a)(1)(A)(iii); 19 U.S.C.
§ 1497(a)(1)(B)(ii); 21 U.S.C. § 881(a); 26 U.S.C. § 7303; id.
U.S.C. § 7608(a)(4); 30 U.S.C. § 1466(a). In other statutes,
by contrast, Congress has used the phrase “subject to a final
order” or decision, and those laws plainly contemplate a
decision or order that already has been issued. E.g., 5 U.S.C.
§ 1215(a)(4) (“subject to a final order”); 7 U.S.C. § 12d
(“subject to a final decision or order”); 29 U.S.C. § 1872
(“subject to a final order”).

Here, Congress chose to include the word “judgment” in
§ 2467(d)(3) and to define “forfeiture or confiscation
judgment” in § 2467(a)(2) as “a final order of a foreign
nation.” Congress’s decision to include the word “judgment”
suggests that assets may be frozen under § 2467(d)(3) only
after a foreign court has entered a forfeiture judgment.
Congress’s deliberate choice must be respected. Cf. Lopez v.
Gonzales, 549 U.S. 47, 56 (2006); Gozlon-Peretz v. United
States, 498 U.S. 395, 404-05 (1991).
 8

B

In attempting to overcome the significance of the word
“judgment” in § 2467(d)(3), the Government offers five main
arguments.

First, the Government cites other language in the
statutory text that, it says, contemplates that the Government
can obtain a restraining order even before a foreign court
judgment. For example, § 2467(d)(3)(B)(i) states that a court,
in deciding whether to issue a restraining order, may rely on
“an affidavit describing the nature of the proceeding or
investigation underway in the foreign country” and on
documents “setting forth a reasonable basis to believe that the
property to be restrained will be named in a judgment of
forfeiture at the conclusion of such proceeding.” 28 U.S.C.
§ 2467(d)(3)(B)(i) (emphasis added). Section 2467(d)(3)(C)
provides that the property owner may not challenge the
application for the restraining order based on a ground also
raised in the litigation “pending” in the foreign court. The
Government argues that those statutory phrases obviously
contemplate a future foreign judgment.

But the key fact that makes sense of those statutory
provisions – and that undermines the Government’s position
here – is that forfeitures are often a two-stage process, as the
Government acknowledged at oral argument. See Tr. of Oral
Arg. at 25-26. In the first stage, a foreign court renders a
forfeiture or confiscation judgment against an individual or
entity – that is, a judgment “compelling a person or entity . . .
to pay a sum of money . . . .” 28 U.S.C. § 2467(a)(2). In
many instances, however, the specific assets that must be
seized to give effect to that judgment are unknown at the time.
That leads to the second stage, which culminates in a separate
 9

judgment of forfeiture naming the specific property to be
forfeited.

With that two-stage reality in mind, we read the language
of § 2467(d)(3)(B)(i) and (d)(3)(C) to refer to the process that
precedes entry of the second-stage judgment naming the
property to be forfeited. That approach both makes sense of
those prospective elements of the overall statutory scheme
and respects the congressional decision to use the word
“judgment” in § 2467(d)(3) as the prerequisite for a
restraining order.

That approach also corresponds to the difference in
language between § 2467(a)(2) and (d)(3)(B)(i). Section
2467(a)(2) anticipates a forfeiture judgment against a person
or entity as the prerequisite for a freeze order. Section
2467(d)(3)(B)(i) in turn contemplates a judgment of forfeiture
naming the property to be restrained as something that will
occur after the freeze order.

Contrary to the Government’s contention, the nuanced
statutory language meshes nicely with the two-stage foreign
forfeiture process.

Second, the Government suggests that § 2467(d)(3)’s
cross-reference to § 983(j) of Title 18 justifies reading
§ 2467(d)(3) as authorizing property restraints before a
foreign judgment. As previously noted, § 2467(d)(3) provides
that “the Government may apply for, and the court may issue,
a restraining order pursuant to section 983(j)” to “preserve the
availability of property subject to a foreign forfeiture or
confiscation judgment.” Id. § 2467(d)(3)(A).
 10

Section 983(j) is a general provision that authorizes the
temporary restraint of assets “subject to civil forfeiture” as a
result of violations of U.S. law. Section 983(j) in essence
provides a model for how restraining orders will be issued
under § 2467(d)(3). The Government points out that § 983(j)
allows the restraint of property “subject to civil forfeiture,”
which contemplates a civil forfeiture judgment in the future.
18 U.S.C. § 983(j)(1). But that prospective language does not
answer the question here about § 2467(d)(3). As already
discussed, foreign forfeiture often is a two-stage process – an
initial foreign forfeiture or confiscation judgment against a
person or entity followed by a subsequent judgment naming
the property to be forfeited. So the fact that § 983(j) is
prospectively focused on a future judgment does not answer
the question in this case. After all, our reading of the statute
contemplates a future judgment – the second-stage judgment
– naming the property to be forfeited.

Third, the Government argues that requiring a foreign
judgment as a prerequisite to a freeze order would render
meaningless the 2001 statutory amendment that added
§ 2467(d)(3). Not so. The 2001 amendment specified the
procedures for issuing restraining orders based on foreign
court judgments. That amendment thereby eliminated some
of the uncertainty about how courts were to go about
preserving and restraining the assets of a person or entity
subject to a foreign court judgment. Congress had made the
major legislative decision on this issue in 2000, when it first
decided that the U.S. Government could forfeit assets based
on a foreign court’s judgment (and not only based on
suspected or actual violations of U.S. law). The 2001
amendment filled in some gaps left by the 2000 legislation
and made sure that the assets of a guilty party could be frozen
once the foreign judgment against the individual had been
 11

entered, even though the second-stage judgment naming the
property had not yet occurred.

Recall that § 2467(d)(1) – part of the original 2000
enactment – states that a “district court shall enter such orders
as may be necessary to enforce the judgment on behalf of the
foreign nation.” Id. § 2467(d)(1) (emphasis added). That
general phrasing left room for litigants to argue that property
could not be temporarily restrained or frozen until the
property itself was named in a judgment of forfeiture – in
other words, only after the second stage of the two-stage
foreign forfeiture process. Section 2467(d)(3) eliminated that
uncertainty by expressly providing for temporary restraining
orders before the second-stage judgment. Section 2467(d)(3)
also outlined what kinds of evidence can be used when the
Government attempts to obtain those restraining orders and
makes clear that U.S. courts cannot consider the same
challenges being raised in the foreign court. In the absence of
these statutory clarifications, district courts would have been
left to their own devices to figure out whether temporary
restraining orders were permitted at all before a foreign
judgment naming the property was issued, what forms of
evidence would be admissible in deciding to issue those
restraining orders, and whether U.S. courts could consider the
same arguments being addressed in the foreign court.

In short, we reject the Government’s contention that our
reading renders the 2001 amendment meaningless.

Fourth, the Government cites legislative history in the
form of a Report of the House Committee on Financial
Services. As an initial matter, the Committee Report provides
conflicting evidence on whether § 2467(d)(3) was meant to
allow the restraint of property before a foreign judgment. For
 12

example, the Report indicates that § 2467(d)(3) was meant to
give federal courts the authority to enforce “foreign forfeiture
judgment[s].” H.R. REP. NO. 107-250, pt. 1, at 59 (2001).
That statement supports our reading because it refers to a
judgment. That said, the Report also provides that the 2001
amendment was meant “to include a mechanism for
preserving property subject to forfeiture in a foreign country.”
Id. (emphasis added). That statement tends to support the
Government’s reading. So the legislative history may point in
both directions, at least insofar as the House Report does not
refer to a two-stage forfeiture process.

Of course, even if this lone Report from one Committee
of one House did support the Government’s reading of
§ 2467(d)(3), the statutory text controls. As a general matter,
“it is the statute, and not the Committee Report, which is the
authoritative expression of the law.” City of Chicago v. Envtl.
Def. Fund, 511 U.S. 328, 337 (1994); see also Exxon Mobil
Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568 (2005)
(“As we have repeatedly held, the authoritative statement is
the statutory text, not the legislative history or any other
extrinsic material.”). And here, the relevant statutory text
says “subject to a foreign forfeiture or confiscation
judgment,” not “subject to forfeiture.” We cannot disregard
the congressional intent reflected in that statutory text.

Fifth, the Government points to policy interests
supporting its reading of § 2467(d)(3). If the U.S.
Government is unable to restrain assets before there is a
foreign forfeiture judgment against the person or entity, then
those assets might disappear before they can be restrained.
And if the U.S. does not help other countries restrain assets
before the foreign trial, it allegedly will not meet its
obligations under the Vienna Convention; as a result, other
 13

countries might be hesitant to restrain assets for the U.S in
similar circumstances.

To begin with, the Government indicated at oral
argument that § 2467(d)(3) has been invoked in attempts to
obtain pre-judgment restraining orders only 10 to 12 times in
the last decade – approximately once a year. See Tr. of Oral
Arg. at 4. The Government has expressly stated, moreover,
that this provision is not used in national security cases. Id. at
71.1 Furthermore, a separate statute – § 981 of Title 18 – was
designed to meet the U.S.’s obligations under the Vienna
Convention.

In considering the Government’s policy arguments,
which we of course take very seriously, we must note that
there are strong policy interests on the other side as well.
Section 2467(d)(3) applies to U.S. citizens and noncitizens
alike, as the Government acknowledged at oral argument. See
id. at 5. So under the Government’s interpretation, a U.S.
citizen’s assets could be frozen for years – without any
meaningful substantive judicial review in a U.S. court – based
merely on the request of a foreign official and the prospect
that the property owner might one day be found guilty or
liable in a foreign court. Here, as elsewhere, it is difficult to

1
There are a number of statutory tools available to the
Government when it seeks to freeze assets in the name of national
security. See, e.g., 8 U.S.C. § 1189(a)(2)(C) (Secretary of Treasury
can require freezing of assets linked to foreign terrorist
organizations); 18 U.S.C. § 981(a)(1)(G) (assets of persons
perpetrating terrorism against the U.S. or U.S. persons or property
can be forfeited); id. § 1956(c)(7)(D) (forfeiture is available for
various terrorism and terrorism-related crimes); 50 U.S.C.
§ 1702(a) (President has the authority to freeze assets of foreign
persons or organizations engaged in hostilities against the U.S.).
 14

believe Congress would “enact so significant a [measure]
without a clear indication of its purpose to do so.” United
States v. O’Brien, 130 S. Ct. 2169, 2172 (2010). Congress
does not typically hide elephants in mouseholes, and the
Government’s assertion of authority in this case qualifies as
such an elephant. Cf. Whitman v. American Trucking Ass’ns,
531 U.S. 457, 468 (2001).

In any event, regardless of how one might ultimately
balance and resolve the policy arguments, policy
considerations alone cannot transform the content of a
statute’s text. It is not a court’s role to substitute its “view of
. . . policy for the legislation which has been passed by
Congress.” Florida Department of Revenue v. Piccadilly
Cafeterias, Inc., 128 S. Ct. 2326, 2339 (2008) (internal
quotation marks omitted). In this case, as we have repeatedly
explained, the word “judgment” in the statutory text is critical
and indicates how Congress itself authoritatively struck the
balance between the competing policy considerations.

Of course, if the Department of Justice wants Congress to
expand the Government’s authority, the Department can so
recommend to the Legislative Branch. Indeed, the
Government’s counsel told us at oral argument that the
Department of Justice is already working on such draft
legislation.

***

We affirm the District Court’s March 2009 and May
2009 decisions rejecting the Government’s applications for
restraining orders.

So ordered.
 15

APPENDIX

§ 2467. Enforcement of foreign judgment

(a) Definitions. – In this section –

(2) the term “forfeiture or confiscation judgment”
means a final order of a foreign nation compelling a
person or entity –

(A) to pay a sum of money representing the
proceeds of an offense described in Article 3,
Paragraph 1, of the United Nations Convention,
any violation of foreign law that would
constitute a violation or an offense for which
property could be forfeited under Federal law if
the offense were committed in the United States,
or any foreign offense described in section
1956(c)(7)(B) of title 18, or property the value
of which corresponds to such proceeds; or

(B) to forfeit property involved in or traceable to
the commission of such offense.

***

(d) Entry and Enforcement of Judgment. –

(1) In general. – The district court shall enter such
orders as may be necessary to enforce the judgment
on behalf of the foreign nation unless the court finds
that –
 16

(A) the judgment was rendered under a system
that provides tribunals or procedures
incompatible with the requirements of due
process of law;

(B) the foreign court lacked personal jurisdiction
over the defendant;

(C) the foreign court lacked jurisdiction over the
subject matter;

(D) the foreign nation did not take steps, in
accordance with the principles of due process, to
give notice of the proceedings to a person with
an interest in the property of the proceedings in
sufficient time to enable him or her to defend; or

(E) the judgment was obtained by fraud.

(2) Process. – Process to enforce a judgment under
this section shall be in accordance with rule 69(a) of
the Federal Rules of Civil Procedure.

(3) Preservation of property. –

(A) In general. – To preserve the availability of
property subject to a foreign forfeiture or
confiscation judgment, the Government may
apply for, and the court may issue, a restraining
order pursuant to section 983(j) of title 18, at
any time before or after an application is filed
pursuant to subsection (c)(1) of this section.
 17

(B) Evidence. – The court, in issuing a
restraining order under subparagraph (A) –

(i) may rely on information set forth in an
affidavit describing the nature of the
proceeding or investigation underway in the
foreign country, and setting forth a
reasonable basis to believe that the property
to be restrained will be named in a
judgment of forfeiture at the conclusion of
such proceeding; or

(ii) may register and enforce a restraining
order that has been issued by a court of
competent jurisdiction in the foreign
country and certified by the Attorney
General pursuant to subsection (b)(2).

(C) Limit on grounds for objection. – No person
may object to a restraining order under
subparagraph (A) on any ground that is the
subject of parallel litigation involving the same
property that is pending in a foreign court.