Natl Cncl Resistance v. DOS

                  United States Court of Appeals

               FOR THE DISTRICT OF COLUMBIA CIRCUIT

       Argued November 15, 2000      Decided June 8, 2001 

                           No. 99-1438

           National Council of Resistance of Iran and 
             National Council of Resistance of Iran, 
                   U.S. Representative Office, 
                           Petitioners

                                v.

                     Department of State and 
           Madeleine K. Albright, Secretary of State, 
                           Respondents

                        Consolidated with 
                             99-1439

           On Petitions for Review of an Order of the 
                        Secretary of State

     Martin D. Minsker argued the cause for petitioners Na-
tional Council of Resistance of Iran and National Council of 

Resistance of Iran, U.S. Representative Office.  With him on 
the briefs were Scott L. Nelson, Ellen Fels Berkman and 
Jody Manier Kris.

     Jacob A. Stein argued the cause for petitioner People's 
Mojahedin Organization of Iran. With him on the briefs were 
George A. Fisher and Ronald G. Precup.

     Douglas N. Letter, Litigation Counsel, U.S. Department of 
Justice, argued the cause for respondents.  With him on the 
briefs were David W. Ogden, Acting Assistant Attorney 
General, H. Thomas Byron, III, Attorney, and Wilma A. 
Lewis, U.S. Attorney at the time the briefs were filed.

     Before:  Edwards, Chief Judge, Sentelle and Henderson, 
Circuit Judges.

     Opinion for the Court filed by Circuit Judge Sentelle.

     Sentelle, Circuit Judge:  Two organizations, the National 
Council of Resistance of Iran and the People's Mojahedin of 
Iran, petition for review of the Secretary's designation of the 
two as constituting a "foreign terrorist organization" under 
the Anti-Terrorism and Effective Death Penalty Act of 1996, 
raising both statutory and constitutional arguments.  While 
we determine that the designation was in compliance with the 
statute, we further determine that the designation does vio-
late the due process rights of the petitioners under the Fifth 
Amendment, and we therefore remand the case for further 
proceedings consistent with this opinion.

                           The Statute

     Under the Anti-Terrorism and Effective Death Penalty Act 
of 1996 ("Anti-Terrorism Act" or "AEDPA"), 8 U.S.C. 
s 1189, the Secretary of State is empowered to designate an 
entity as a "foreign terrorist organization."  Id.  See general-
ly People's Mojahedin Org. of Iran v. Dep't of State, 182 F.3d 
17 (D.C. Cir. 1999).  The consequences of that designation are 
dire.  The designation by the Secretary results in blocking 
any funds which the organization has on deposit with any 

financial institution in the United States.  18 U.S.C. 
s 2339B(a)(2).  Representatives and certain members of the 
organization are barred from entry into the United States.  8 
U.S.C. s 1182(a)(3)(B)(i)(IV & V).  Perhaps most important-
ly, all persons within or subject to jurisdiction of the United 
States are forbidden from "knowingly providing material 
support or resources" to the organization.  18 U.S.C. 
s 2339B(a)(1).

     Despite the seriousness of the consequences of the determi-
nation, the administrative process by which the Secretary 
makes it is a truncated one.  In part, the AEDPA imposes 
the Secretary's duties in "APA-like language."  People's Mo-
jahedin, 182 F.3d at 22.  The Secretary compiles an "admin-
istrative record" and based upon that record makes "find-
ings."  Cf. Administrative Procedure Act, 5 U.S.C. s 557(c).  
If the Secretary makes the critical findings that "an entity is 
a foreign organization engaging in terrorist activities that 
threaten the national security of the United States," People's 
Mojahedin, 182 F.3d at 19 (construing 8 U.S.C. s 1189), that 
entity then suffers the consequences listed above.

     Following the administrative designation there is judicial 
review.  8 U.S.C. s 1189(b).  While that statutory procedure, 
so far as it goes, sounds like the familiar procedure normally 
employed by the Congress to afford due process in adminis-
trative proceedings, the similarity to process afforded in other 
administrative proceedings ends there.  As we have observed 
before, this "statute ... is unique, procedurally and substan-
tively."  People's Mojahedin, 182 F.3d at 19.  The unique 
feature of this statutory procedure is the dearth of procedural 
participation and protection afforded the designated entity.  
At no point in the proceedings establishing the administrative 
record is the alleged terrorist organization afforded notice of 
the materials used against it, or a right to comment on such 
materials or the developing administrative record.  Nothing 
in the statute forbids the use of "third hand accounts, press 
stories, material on the Internet or other hearsay regarding 
the organization's activities...."  Id. at 19.  The Secretary 
may base the findings on classified material, to which the 

organization has no access at any point during or after the 
proceeding to designate it as terrorist.

     The entity may obtain judicial review by application to this 
court not later than thirty days after the publication of the 
designation in the Federal Register.  8 U.S.C. s 1189(b)(1).  
But that review is quite limited.  Review is based solely upon 
the administrative record.  Granted this is not in itself an 
unusual limitation, but one common to many administrative 
reviews.  However, under the AEDPA the aggrieved party 
has had no opportunity to either add to or comment on the 
contents of that administrative record;  and the record can, 
and in our experience generally does, encompass "classified 
information used in making the designation," as to which the 
alleged terrorist organization never has any access, and which 
the statute expressly provides the government may submit to 
the court ex parte and in camera.  Id. s 1189(b)(2).

     The scope of judicial review is limited as well.  We are to 
hold unlawful and set aside designations that we find to be

     (A) arbitrary, capricious, an abuse of discretion or other-
     wise not in accordance with law;
     
     (B) contrary to constitutional right, power, privilege, or 
     immunity;
     
     (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 under paragraph (2), or
     
     (E) not in accord with the procedures required by law.
     
Id. s 1189(b)(3).  Again, this limited scope is reminiscent of 
other administrative review, but again, it has the unique 
feature that the affected entity is unable to access, comment 
on, or contest the critical material.  Thus the entity does not 
have the benefit of meaningful adversary proceedings on any 
of the statutory grounds, other than procedural shortfalls so 
obvious a Secretary of State is not likely to commit them.
     Designations under the statute persist for two years and 
are renewable for additional two-year periods by the same 

procedure as the original designation.  Id. s 1189(a)(4)(B).  
In the decisions now under review, we consider two petitions 
under s 1189(b).

                          The Petitions

     By notice of October 8, 1999, the Secretary of State, inter 
alia, redesignated petitioner People's Mojahedin of Iran 
("PMOI") as a foreign terrorist organization pursuant to 8 
U.S.C. s 1189.  64 Fed. Reg. 55,112 (1999).  The two-year 
redesignation of the PMOI extended the October 8, 1997 
designation of the same group as a terrorist organization.  
This court rejected a petition for review of the 1997 designa-
tion in People's Mojahedin Org. of Iran v. Dep't of State, 182 
F.3d 17 (D.C. Cir. 1999).  In the 1999 designation, then-
Secretary Madeleine Albright for the first time included the 
designation of the second petitioner before us, the National 
Council of Resistance of Iran ("NCRI").  The Secretary 
found that the NCRI is an alter ego or alias of the PMOI.1  
Both petitioners argue that the Secretary's designation de-
prives them of constitutionally protected rights without due 
process of law.  NCRI argues additionally that the Secretary 
had no statutory authority to find that it was an alias or alter 
ego of PMOI.  For the reasons set forth below, we agree with 
the due process argument, while rejecting the statutory claim.

                             Analysis

     A.   The Alias Finding
          
          1. Record Support
          
     NCRI launches a two-pronged attack on the Secretary's 
designation of it as an alias for the PMOI.  Its first argument 

__________
     1 A third petitioner, National Council of Resistance of Iran-
United States ("NCRI-US") joined the brief of NCRI, fearful that 
because the Secretary did not distinguish between the NCRI and 
NCRI-US it may have been included in the designation as well.  In 
its brief to this court, the United States agrees that NCRI-US was 
not so designated, and we therefore do not separately consider any 
claims on behalf of that entity.

is a three-step analysis forwarding the proposition that "the 
Secretary's alias designation of NCRI has no support in the 
record."  Brief of NCRI at 6.  The first step of its reasoning 
is the generally uncontroversial proposition that "Article III 
[of the Constitution] forbids courts from rubberstamping 
Executive decisions."  Id. at 7.  In support of this premise of 
its syllogism, counsel reminds us that the courts have reject-
ed interpretations of statutes that "cast Article III judges in 
the role of petty functionaries ... required to enter as a court 
judgment an executive officer's decision but stripped of capac-
ity to evaluate independently whether the executive decision 
is correct."  Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 
426 (1995).  While there will be unreviewable Executive deci-
sions, and legitimate differences of opinion as to which deci-
sions fall within the rubberstamp category condemned in 
Gutierrez, and which are simply unreviewable decisions, see 
generally id. at 448-49 (Souter, J., dissenting), we can accept 
the Council's general proposition for purposes of this discus-
sion and move to the further steps of its three-part analysis.

     In applying the rubberstamping premise to the present 
designation of the NCRI as an alias of the PMOI, the Council 
draws from the Act and from our application of it in People's 
Mojahedin the principle that designations under the Act must 
survive a review in which the court determines that the 
designation has "substantial support in the administrative 
record taken as a whole or in classified information submitted 
to the court," 8 U.S.C. s 1189(b)(3)(D), and is not "arbitrary, 
capricious, an abuse of discretion or otherwise not in accor-
dance with law."  Id. s 1189(b)(3)(A).2  Again, the basic 
proposition, being drawn from the words of the statute, may 
be assumed.  Although the Council's brief disputes our prior 
application of the test in People's Mojahedin and seems to 
invite us to overrule that decision, this panel has no power to 
do so, even if we were inclined to accept the invitation. See, 
e.g., LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996) 

__________
     2 The Council does not rely on the other requirements of 
s 1189(b)(3).

(en banc) ("One three-judge panel ... does not have the 
authority to overrule another three-judge panel of the 
court.");  United States v. Kolter, 71 F.3d 425, 431 (D.C. Cir. 
1995) ("This panel would be bound by [a prior] decision even 
if we did not agree with it.").

     Proceeding from the two premises--that the AEDPA does 
not require this Court to rubberstamp the Secretary's deci-
sion, and that the process of reviewing without rubberstamp-
ing involves applying the substantial-record-support and 
arbitrary-and-capricious standards--the NCRI concludes that 
we must set aside the designations, as "there is no support in 
the 1999 SAR [Summary of Administrative Report] for the 
fundraising allegation."  Brief of NCRI at 12.  However, that 
conclusion depends upon our accepting not only the first two 
steps of the syllogism, but also the Council's factual proposi-
tion that the only difference between the 1999 alias designa-
tion and the 1997 review in which the Secretary did not 
designate the Council as an alias of the PMOI is an FBI 
agent's hearsay declaration concerning the use of the Nation-
al Council of Resistance name in fundraising for the PMOI in 
the United States.  It is at this point that the Council's 
reasoning conspicuously founders, even if we uncritically ac-
cept the first two steps.

     First, we can neither confirm nor deny that the agent's 
declaration is the only difference in the record support be-
tween the 1997 and 1999 records.  We may under the 
AEDPA consider the entire record before us including any 
classified submissions under s 1189(b)(1)(2).  In fact, the 
"substantial support" test relied upon by the Council ex-
pressly empowers us to set aside the designations only if 
they "lack[ ] substantial support in the administrative record 
taken as a whole or in classified information submitted to 
the courts under paragraph (2)."  8 U.S.C. s 1189(b)(3)(D).  
As we recognized in People's Mojahedin, "we will not, can-
not," in a case under this statute "lay out the 'facts.' "  182 
F.3d at 19.  As we further recognized in that decision, our 
only function in reviewing a designation of an organization 
as a foreign terrorist organization "is to decide if the Secre-
tary, on the face of things, had enough information before 

her to come to the conclusion that the organizations were 
foreign and engaged in terrorism."  Id. at 25.  We see no 
greater function for our review of the alias designation.  
We have, as the statute mandates, reviewed the administra-
tive record taken as a whole and the classified information 
submitted to the court.  We conclude that the Secretary's 
designation of the National Council of Resistance as an 
alias for the PMOI does not lack substantial support and 
that designation is neither arbitrary, capricious, nor other-
wise not in accordance with law.

     The Council argues that we must nonetheless strike down 
the alias designation in 1999 because the State Department in 
1997 determined that the NCRI was not an alias of PMOI.  
In the Council's view, this new designation is barred by the 
principle that "when an executive agency switches position, it 
must provide a reasoned explanation for the change."  Brief 
of NCRI at 16 (citing Motor Vehicle Manufacturers Ass'n v. 
State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983)).  Again, 
the principle of law offered by the Council is incontrovertible, 
but it does not apply to this case.  If the Secretary had taken 
the 1997 record and reached a different conclusion, presum-
ably she would have to offer us some reason for the change.  
Whether this reason would have to be disclosed to the 
appellants is arguable given the role of classified material in 
reviews under this statute but she might at least have been 
required to explain to the court the reason for the change.  
However, the Secretary was not acting on the same record.  
There is no logical reason for concluding that there has been 
no change in either the facts or the Secretary's knowledge of 
the facts between the 1997 refusal to designate and the 1999 
designation.  In short, on the record at hand, we cannot find 
that the Secretary erred in her application of the statute.  
We therefore must affirm that designation unless the Secre-
tary overstepped either statutory or constitutional authority.

          2. The Statutory Authority for the Alias Device
          
     The Council's second argument is that the Secretary has 
made no statutory finding that the NCRI meets the three 
elements for designation as a foreign terrorist organization:  

That is, that the Council is (1) a foreign terrorist organization, 
(2) engaging in terrorist activities that (3) threatens the 
national security of the United States.  People's Mojahedin, 
182 F.3d at 19 (construing 8 U.S.C. s 1189).  Only in one 
sense is this true.  That is, the Secretary did not expressly 
find that the NCRI is that sort of organization doing those 
sorts of things under its own name.  The Secretary did, 
however, find that the PMOI is a foreign organization engag-
ing in terrorist activities to threaten the national security of 
the United States, and that the NCRI and the PMOI are one 
and the same.  This is tantamount to finding that the NCRI 
itself meets those criteria.  Logically, indeed mathematically, 
if A equals B and B equals C, it follows that A equals C.  If 
the NCRI is the PMOI, and if the PMOI is a foreign terrorist 
organization, then the NCRI is a foreign terrorist organiza-
tion also.

     The Council argues, without citation of authority, that 
because the statute does not expressly allow for an alias 
designation, the rationale followed by the Secretary in the 
present case is beyond her statutory power.  Again, this 
argument fails.  It is true that the Secretary, like any federal 
agency, has no power, no "capacity to act" except by "delega-
tion of authority ... from the legislature."  Railway Labor 
Executives' Ass'n v. Nat'l Mediation Bd., 29 F.3d 665, 670 
(D.C. Cir. 1994) (en banc).  It is also true that Congress did 
not expressly empower the Secretary to use the alias ratio-
nale.  It is further true, however, that the delegation from 
Congress may be "either expressed or implied."  Id.  Here, 
the power to designate an organization as a foreign terrorist 
organization if it commits the necessary sort of terrorist acts 
under its own name implies the authority to so designate an 
entity that commits the necessary terrorist acts under some 
other name.

     It would simply make no sense for us to hold that Congress 
empowered the Secretary to designate a terrorist organiza-
tion--so as to block any funds which such organization has on 
deposit with any financial institution in the United States, to 
bar its representatives and many or most of its members 
from entry into the United States, and to prevent anyone in 

the United States from providing material resources or sup-
port the organization--only for such periods of time as it took 
such organization to give itself a new name, and then let it 
happily resume the same status it would have enjoyed had it 
never been designated.  If the Secretary has the power to 
work those dire consequences on an entity calling itself 
"Organization A," the Secretary must be able to work the 
same consequences on the same entity while it calls itself 
"Organization B."  We cannot presume that Congress intend-
ed so vain an act as the Council's argument would have us 
conclude.  Cf. First National City Bank v. Banco Para el 
Comercio Exterior de Cuba, 462 U.S. 611 (1983) (Cuban bank 
established by Cuban government as separate judicial entity 
would not be so treated due to the relationship between the 
bank and the Cuban government).

     As this is the last of the statutory arguments advanced by 
either petitioner, the designations before us must stand, 
unless they fail on constitutional grounds.

     B.   The Due Process Claim
          
     Both petitioners assert that by designating them without 
notice or hearing as a foreign terrorist organization, with the 
resultant interference with their rights to obtain and possess 
property and the rights of their members to enter the United 
States, the Secretary deprived them of "liberty, or property, 
without due process of law," in violation of the Fifth Amend-
ment of the United States Constitution.  We agree.  The 
United States's defense against the constitutional claims of 
the petitioners is two-fold:  (1) that the petitioners have no 
protected constitutional rights and (2) that even if they have 
such rights, none are violated.  Both lines of defense fail.

          1. The Presence of Petitioners
          
     We consider first the eligibility of the petitioners for consti-
tutional protection.  In resisting the claims of the PMOI to 
due process protection, the government asserts that "nearly 
all of these arguments are foreclosed by the binding prece-
dent of this Court in the People's Mojahedin published 
decision, where this Court rejected those same arguments."  

Brief of the Secretary at 20.  In fact, in that decision this 
court rejected only the statutory arguments.  We did so after 
concluding that the petitioners in that case had established no 
constitutional entitlement because "a foreign entity without 
property or presence in this country has no constitutional 
rights, under the Due Process Clause or otherwise."  People's 
Mojahedin Org. of Iran v. Dep't of State, 182 F.3d 17, 22 
(D.C. Cir. 1999).  We left the constitutional questions for such 
time as a designated foreign terrorist organization might be 
able to establish its constitutional presence in the United 
States.  Therefore, that decision cannot foreclose constitu-
tional claims asserted by the PMOI in this case unless for 
some reason it forecloses the possibility of our concluding 
that the entities before us now have a presence in this 
country.  It does not.

     First, for People's Mojahedin to foreclose any question as 
to the NCRI, the government must rely on the two entities 
being one, a proposition we have been willing to accept for 
purposes of the alias designation which brings NCRI within 
the ambit of the terrorist designation bestowed upon the 
PMOI.  Even accepting their identity for all purposes, the 
People's Mojahedin decision cannot foreclose our reconsidera-
tion of the presence question, just as the 1997 failure to 
designate the NCRI as an alias for the PMOI did not bar the 
Secretary from reconsidering that question in 1999.  We 
accepted, and continue to accept, the government's proposi-
tion in support of the 1999 designation that the record is not 
the same and the decision is not the same as in 1997.  
Therefore, the fact that the PMOI had not established a 
constitutional presence in the United States in 1997 under its 
own name cannot possibly establish that neither the PMOI 
nor the NCRI had established a presence by 1999.  And 
while we accept the government's proposition that neither the 
record nor the classified information establishes a presence 
for the PMOI under its own name, we cannot agree that the 
same is true as to the NCRI.

     The government admits that the record before us reflects 
that the NCRI "has an overt presence within the National 
Press Building in Washington, D.C.," and further recognizes 

that the NCRI claims an interest in a small bank account.  
The government attempts to blow this away by saying that 
foreign entities " 'receive constitutional protections [only] 
when they have come within the territory of the United 
States and developed substantial connections within this 
country.' "  Brief of the Secretary at 39 (quoting United 
States v. Verdugo-Urquidez, 494 U.S. 259, 271 (1990)) (brack-
eted material and emphasis added by the Secretary).  Ac-
cepting that quotation, with the bracketed addition of "only" 
at face value, the Secretary asserts that this evidence in the 
record would not support a conclusion that the Council has 
developed substantial connections.  On that basis, the Secre-
tary then asserts that the NCRI is not entitled to constitu-
tional protection.  We reject the Secretary's position for 
multiple reasons.

     First, the Secretary's construction of the quotation from 
Verdugo-Urquidez is misleading.  In context, the full sen-
tence by the Supreme Court did contain the word "only" but 
not in the same position as the government brackets it.  The 
High Court rejected the application of several prior cases--
Plyler v. Doe, 457 U.S. 202 (1982);  Kwong Hai Chew v. 
Colding, 344 U.S. 590 (1953);  Bridges v. Wixon, 326 U.S. 135 
(1945);  Russian Volunteer Fleet v. United States, 282 U.S. 
481 (1931);  Wong Wing v. United States, 163 U.S. 228 (1896);  
and Yick Wo v. Hopkins, 118 U.S. 356 (1886)--which were 
offered by an alien who had been arrested.  The Court 
stated:

     These cases, however, establish only that aliens receive 
     constitutional protections when they have come within 
     the territory of the United States and developed substan-
     tial connections with this country.
     
Verdugo-Urquidez, 494 U.S. at 271 (emphasis added).  The 
critical adverb limits the application of prior precedent.  In 
Verdugo-Urquidez, the Court rejected the claims of a Mexi-
can citizen arrested in Mexico to constitutional protections 
under the United States Constitution outside the United 
States.  Neither the word "only" nor anything else in the 
holding purports to establish whether aliens who have en-

tered the territory of the United States and developed con-
nections with this country but not substantial ones are enti-
tled to constitutional protections.

     In any event, we are not undertaking to determine, as a 
general matter, how "substantial" an alien's connections with 
this country must be to merit the protections of the Due 
Process Clause or any other part of the Constitution.  Rath-
er, we have reviewed the entire record including the classified 
information and determine that NCRI can rightly lay claim to 
having come within the territory of the United States and 
developed substantial connections with this country.  We 
acknowledge that in reviewing the whole record, we have 
included the classified material.  As we noted above and in 
People's Mojahedin, we will not and cannot disclose the 
contents of the record.  We note further that the PMOI has 
made little serious assertion of an independent presence in 
the United States.  Unfortunately for the cause of the Secre-
tary, the PMOI does not need one.  Insofar as PMOI's 
claimed presence is concerned, the United States is now hoist 
with its own petard.  The Secretary concluded in her designa-
tion, which we upheld for the reasons set forth above, that the 
NCRI and the PMOI are one.  The NCRI is present in the 
United States.  If A is B, and B is present, then A is present 
also.

     The Secretary offers one further argument for the proposi-
tion that petitioners are not entitled to the protection of the 
Due Process Clause.  The Secretary asserts that the United 
States exercises the powers of external sovereignty indepen-
dent of the affirmative grants of the Constitution as an 
inherent attribute of sovereignty under international law.  
See, e.g., Kleindienst v. Mandel, 408 U.S. 753, 765 (1972).  As 
a result of that sovereignty, the Secretary contends, the 
government interacts with foreign entities not within the 
constitutional framework, but through the system of interna-
tional law and diplomacy.  Specifically, the Secretary asserts 
that "foreign governmental entities therefore 'lie[ ] outside 
the structure of the union.' "  Brief of the Secretary at 35 
(quoting Principality of Monaco v. Mississippi, 292 U.S. 313, 
330 (1934)).  This argument need not detain us long.

     It is certainly true that sovereign states interact with each 
other through diplomacy and even coercion in ways not 
affected by constitutional protections such as the Due Process 
Clause.  However, since neither the PMOI nor the NCRI is a 
government, none of the authorities offered by the Secretary 
have any force.  The closest the Secretary can come is to 
assert that the Council has described itself as a "government 
in exile."  That untested claim is not sufficient by itself to 
bring the Council within the ambit of authorities governing 
the interrelationship of two sovereigns.  If the United States 
were to recognize the Council as a government, or even 
perhaps to deal with it as if it were a government, then the 
result might be different.  But on the present record, the 
Secretary has deemed the Council to be nothing but a foreign 
terrorist organization, and it is as such that the Secretary 
must litigate with that entity.

     The PMOI and NCRI have entered the territory of the 
United States and established substantial connections with 
this country.  The cases distinguished by the Verdugo- 
Urquidez Court make plain that both organizations therefore 
are entitled to the protections of the Constitution.  See, e.g., 
Kwong Hai Chew v. Colding, 344 U.S. at 596 (holding that an 
alien who permanently resided in the United States was "a 
person within the protection of the Fifth Amendment" and 
therefore was entitled to due process);  Bridges v. Wixon, 326 
U.S. at 148 (holding that a permanent alien resident was 
entitled to the First Amendment's guarantees of free speech 
and press);  Russian Volunteer Fleet v. United States, 282 
U.S. at 489, 491-92 (holding that a Russian corporation whose 
property was taken by the United States was "an alien 
friend," and hence deserved protection under the Fifth 
Amendment's Takings Clause);  Wong Wing v. United States, 
163 U.S. at 238 (holding that permanent alien residents were 
entitled to due process under the Fifth Amendment, and 
indictment by grand jury under the Sixth Amendment);  and 
Yick Wo v. Hopkins, 118 U.S. at 369 (holding that permanent 
alien residents deserved protection under the Fourteenth 
Amendment's Due Process Clause).  We therefore proceed to 

consider whether the PMOI and NCRI have been deprived of 
a constitutional right.

           2. The Due Process Claims
          
           a. The deprivation
          
     The government argues that even accepting the proposition 
that petitioners are entitled to the protection of the Due 
Process Clause of the Fifth Amendment, the designation 
process and its consequences do not deprive them of life, 
liberty, or property.  The Secretary contends that this ques-
tion is settled by Paul v. Davis, 424 U.S. 693 (1976), in which 
the Supreme Court held that the government does not, 
simply by the act of defaming a person, deprive him of liberty 
or property rights protected by the Due Process Clause.  Id. 
at 708-10.  However, Paul v. Davis held much more than the 
point for which the government asserts it.

     That case concerned the stigmatizing of plaintiffs by police 
officers distributing a flyer listing them among "active shop-
lifters."  In reversing a circuit decision that the dissemination 
of such information implicated the Due Process Clause, the 
High Court entered the holding upon which the government 
relies.  But in doing so, it analyzed and distinguished its 
earlier decision in Wisconsin v. Constantineau, 400 U.S. 433 
(1971).  In Constantineau, a state statute empowered a local 
police chief, without notice or hearing to a citizen, to cause a 
notice to be posted in all retail outlets that that person was 
one who "by excessive drinking" exhibited specified undesir-
able "traits, such as exposing himself or family 'to want' or 
becoming 'dangerous to the peace' of the community."  Id. at 
434 (quoting Wis. Stat. s 176.26 (1967)).  The Constantineau 
Court held that this stigmatizing posting without notice or 
hearing constituted a violation of the Fifth Amendment Due 
Process Clause.  In explaining its refusal to follow Constanti-
neau, the Paul Court noted specific language from the Con-
stantineau holding:

     Where a person's good name, reputation, honor, or integ-
     rity is at stake because of what the government is doing 
     to him, notice and opportunity to be heard are essential.
     
424 U.S. at 708 (quoting Constantineau, 400 U.S. at 437 
(emphasis supplied by the Paul Court)).

     The Paul Court then went on to note the effects of the 
excessive drinking posting beyond stigmatization:  That is, the 
posted individual could not purchase or even receive by gift 
alcoholic beverages within the city limits for one year.  Thus, 
the Paul Court held, the appropriate rule of law is that where 
the government issues a stigmatizing posting (or designation) 
as a result of which the stigmatized individual is "deprived 
... of a right previously held under state law," due process is 
required.  Id.  The deprivation under the Wisconsin statute 
as described in Paul v. Davis was "the right to purchase or 
obtain liquor in common with the rest of the citizens."  Id.

     Like the parties in Constantineau, and unlike the parties in 
Paul, petitioners here have suffered more than mere stigma-
tization.  Rather than being posted as drunkards, the peti-
tioners have been designated as foreign terrorist organiza-
tions under the AEDPA.  Rather than being deprived of the 
previously held right to purchase liquor, they have been 
deprived of the previously held right to--for example--hold 
bank accounts, and to receive material support or resources 
from anyone within the jurisdiction of the United States.  
Many people, presumably including the members of the 
Council and the PMOI, would consider these to be rights 
more important than the right to purchase liquor.  We con-
sider at least one of them equally entitled to constitutional 
protection.

     The most obvious rights to be impaired by the Secretary's 
designation are the petitioners' property rights.  Specifically, 
there is before us at least a colorable allegation that at least 
one of the petitioners has an interest in a bank account in the 
United States.  As they are one, if one does, they both do.  
We have no idea of the truth of the allegation, there never 
having been notice and hearing, but for the present purposes, 
the colorable allegation would seem enough to support their 
due process claims.  Russian Volunteer Fleet v. United 
States, 282 U.S. 481, 491-92 (1931), makes clear that a foreign 
organization that acquires or holds property in this country 

may invoke the protections of the Constitution when that 
property is placed in jeopardy by government intervention.  
This is not to say that the government cannot interfere with 
that and many other rights of foreign organizations present in 
the United States; it is only to say that when it does so it is 
subject to the Due Process Clause.

     The other two consequences of the designation less clearly 
implicate interests protected by the Due Process Clause.  As 
to the right of the members of the organizations to enter the 
United States, the Secretary argues with some convincing 
force that aliens have no right of entry and that the organiza-
tion has no standing to judicially assert rights which its 
members could not bring to court.  See, e.g., Takahashi v. 
Fish and Game Comm'n, 334 U.S. 410, 419 (1948).  The 
organizations counter that the present act limits the ability to 
travel abroad of its members who are already in the United 
States as they know they would be denied readmission.

     As to the third consequence of the designation--that is the 
banning of the provision of material support or resources to 
the organizations--both parties again raise colorable argu-
ments.  The petitioners, citing such cases as Apthecker v. 
Secretary of State, 378 U.S. 500, 507 (1964), and NAACP v. 
Alabama, 357 U.S. 449 (1958), assert that this limitation 
deprives their members of First Amendment associational 
and expressive rights.  The government asserts that the 
limitation does not affect the ability of anyone to engage in 
advocacy of the goals of the organizations, but only from 
providing material support which might likely be employed in 
the pursuit of unlawful terrorist purposes as of First Amend-
ment protected advocacy.  See Humanitarian Law Project v. 
Reno, 205 F.3d 1130, 1133-34 (9th Cir. 2000).

     On each of the second and third consequences, each side 
offers plausible arguments.  But we need not decide as an 
initial matter whether those consequences invade Fifth 
Amendment protected rights of liberty, because the invasion 
of the Fifth Amendment protected property right in the first 
consequence is sufficient to entitle petitioners to the due 
process of law.

           b. When process is due
          
     As petitioners argue, the fundamental norm of due process 
clause jurisprudence requires that before the government can 
constitutionally deprive a person of the protected liberty or 
property interest, it must afford him notice and hearing.  
Mathews v. Eldridge, 424 U.S. 319, 334-35 (1976).  Therefore, 
petitioners argue that the Secretary was obligated to give 
them notice of her intent to make the declarations of terrorist 
status and previous nature, and afford them the opportunity 
to respond to the evidence upon which she proposed to make 
those declarations and to be heard on the proper resolution of 
the questions.  Indeed, "[the Supreme] Court consistently has 
held that some form of hearing is required before an individu-
al is finally deprived of a property interest."  Id. at 333.

     At the same time, the Supreme Court has made clear that 
"[i]t is by now well established that ' "due process" unlike 
some legal rules, is not a technical conception with a fixed 
content unrelated to time, place and circumstances.' "  Gilbert 
v. Homar, 520 U.S. 924, 930 (1997) (quoting Cafeteria and 
Restaurant Workers v. McElroy, 367 U.S. 886, 895 (1961)).  
Otherwise put, "due process is flexible and calls for such 
procedural protections as the particular situation demands."  
Morrissey v. Brewer, 408 U.S. 471, 481 (1972).  Citing Ho-
mar, and Morrissey, inter alia, the United States contends 
that since due process consists only of that process which is 
due under the circumstances, even given our holding that 
petitioners are protected by the due process clause, they are 
not due any procedural protection that they have not already 
received.

     When analyzing the petitioners' claims, and the govern-
ment's defenses, we are mindful that two distinct questions 
remain for us to determine.  We have dispensed with the 
issue as to whether petitioners are entitled to due process;  
the questions remaining for us are what due process, and 
when.  That is, to what procedural devices must the petition-
ers have access in order to protect their interests against the 
deprivations worked by the statute, and must that access be 

afforded before the Secretary's declaration, or is it sufficient 
under the circumstances that such access be available post-
deprivation?  The government rightly reminds us that the 
Supreme Court established in Mathews v. Eldridge and in-
deed even before that decision,

     that identification of the specific dictates of due process 
     generally requires consideration of three distinct factors:  
     first, the private interests that will be affected by the 
     official action;  second, the risk of an erroneous depriva-
     tion of such interest of the procedure used, and the 
     probable value, if any, of additional or substitute proce-
     dural safeguards;  and finally, the government's interest, 
     including the function involved and the fiscal and admin-
     istrative burdens that the additional or substitute proce-
     dural requirements would entail.
     
424 U.S. at 335 (citing Goldberg v. Kelly, 397 U.S. 254, 263-71 
(1970)).  Unlike the advocates before us, we do not have the 
luxury of blurring the question of what and when.  We must 
determine what process is sufficient to afford petitioners the 
protection of the Fifth Amendment, and when--in terms of 
pre-deprivation or post-deprivation--that process must be 
available.

     The Secretary reviews the three elements of the balancing 
inquiry set forth in Mathews to conclude that "the balancing 
tips decidedly in favor of the government and justifies post-
poning review until after the Secretary's designation."  Brief 
of the Secretary at 46.  However, while we acknowledge that 
the factors set forth, being drawn as they are from the 
Supreme Court case, are necessarily the right ones, we must 
note that the government has made little effort to tie the 
factors to the question of "when" as opposed to "what" due 
process is to be afforded.  As to the private interest, the 
government compares the interests asserted by petitioners in 
this case with that asserted in United States v. James Daniel 
Good Real Property, 510 U.S. 43 (1993).  In that case, the 
Supreme Court considered "whether, in the absence of exi-
gent circumstances, the Due Process Clause of the Fifth 
Amendment prohibits the government in a civil forfeiture 

case from seizing real property without first affording the 
owner notice and an opportunity to be heard."  The Court 
expressly held "that it does."  Id. at 46.  The government 
argues from the facts of James Daniel Good Real Property 
that the importance of the real estate forfeited in that case 
dwarfs the importance of the interests of an organization in, 
for example, a bank account, and concludes that somehow 
that case supports the proposition that the interest to be 
protected here is not sufficiently important to warrant due 
process.

     This strikes us as a non sequitur.  The fact that the 
Supreme Court has held that the Fifth Amendment provides 
protection for a highly important property interest is at most 
neutral on the question of whether that Amendment provides 
protection to an arguably less important property interest, or 
even a concededly less important one.  If anything, the 
decision would seem to weigh in favor of affording due 
process protection to the interest asserted by petitioners--it 
being a property interest as was the interest before the 
Supreme Court in James Daniel Good Real Property.

     As to the second factor, that is, the risk of erroneous 
deprivation, the Secretary again offers an analysis of ques-
tionable relevance.  The government reminds us that the 
Secretary must, under the statute, consult with the Attorney 
General and the Secretary of Treasury before designating a 
foreign terrorist organization, 8 U.S.C. s 1189(c)(4), and must 
notify congressional leaders seven days before designating 
such an organization, id. s 1189(a)(2)(A).  While we under-
stand the Secretary's point that more heads are likely to 
reach a sounder result, the application of that facially com-
monsensical notion to due process questions is, to put it 
charitably, unclear.  The United States functions with a 
unitary executive, created in Article II of the Constitution 
and constrained by the Fifth Amendment from depriving 
anyone protected by that Amendment of life, liberty or 
property without due process of law.  The involvement of 
more than one of the servants of that unitary executive in 
commencing a deprivation does not create an apparent substi-
tute for the notice requirement inherent in the constitutional 

norm.  Neither is it apparent how notice by the Article II 
branch of government to representatives of the Article I 
branch can substitute for notice to the person deprived.  
Again, the government has offered nothing that apparently 
weighs in favor of a post-deprivational as opposed to pre-
deprivational compliance with due process requirements of 
the Constitution.

     As to the third Mathews v. Eldridge factor--"the govern-
ment's interest, including the function involved in the fiscal 
and administrative burdens that the additional or substitute 
procedural requirement would entail," 424 U.S. at 319--the 
Secretary rightly reminds us that "no governmental interest 
is more compelling than the security of the nation."  Haig v. 
Agee, 453 U.S. 280, 307 (1981).  It is on this very point that 
the Secretary most clearly has failed to distinguish between 
the what of the Due Process Clause and the when.  Certainly 
the United States enjoys a privilege in classified information 
affecting national security so strong that even a criminal 
defendant to whose defense such information is relevant 
cannot pierce that privilege absent a specific showing of 
materiality.  United States v. Yunis, 867 F.2d 617, 623-24 
(D.C. Cir. 1989) (applying the Classified Information Proce-
dure Act, 18 U.S.C. App. ss 1-16 (1982)).  As we will discuss 
further infra, that strong interest of the government clearly 
affects the nature--the "what" of the due process which must 
be afforded petitioners.  It is not immediately apparent how 
that affects the "when" of the process--that is, whether due 
process may be effectively provided post-deprivation as op-
posed to pre-deprivation.

     In support of the argument that the foreign-policy/national-
security nature of the evidence supports the constitutional 
adequacy of a post-deprivation remedy, the Secretary offers 
our decision in Palestine Information Office v. Shultz, 853 
F.2d 932 (D.C. Cir. 1988).  The Secretary is correct that in 
that case, we held that where the Secretary of State had 
ordered the closing of an office (arguably, a foreign ministry) 
in this country in response to and in an attempt to curb 
alleged terrorist activities, the "burden on the government of 
requiring a hearing before the closing of [the] foreign mis-

sion" was sufficient to warrant dispensing with any otherwise 
available pre-deprivation hearing.  Id. at 942.  We did so 
recognizing the " 'changeable and explosive nature of contem-
porary international relations, and the fact that the executive 
is immediately privy to information which cannot be swiftly 
presented to, evaluated by, and acted upon by the legisla-
ture....' "  Id. at 943 (quoting Zemel v. Rusk, 381 U.S. 1, 17 
(1965)).

     We remain committed to, and indeed bound by, that same 
reasoning.  It is simply not the case, however, that the 
Secretary has shown how affording the organizations whatev-
er due process they are due before their designation as 
foreign terrorist organizations and the resulting deprivation 
of right would interfere with the Secretary's duty to carry out 
foreign policy.

     To oversimplify, assume the Secretary gives notice to one 
of the entities that:

     We are considering designating you as a foreign terrorist 
     organization, and in addition to classified information, we 
     will be using the following summarized administrative 
     record.  You have the right to come forward with any 
     other evidence you may have that you are not a foreign 
     terrorist organization.
     
It is not immediately apparent how the foreign policy goals of 
the government in general and the Secretary in particular 
would be inherently impaired by that notice.  It is particular-
ly difficult to discern how such a notice could interfere with 
the Secretary's legitimate goals were it presented to an entity 
such as the PMOI concerning its redesignation.  We recog-
nize, as we have recognized before, that items of classified 
information which do not appear dangerous or perhaps even 
important to judges might "make all too much sense to a 
foreign counterintelligence specialist who could learn much 
about this nation's intelligence-gathering capabilities from 
what these documents revealed about sources and methods."  
Yunis, 867 F.2d at 623.  We extend that recognition to the 
possibility that alerting a previously undesignated organiza-
tion to the impending designation as a foreign terrorist 

organization might work harm to this county's foreign policy 
goals in ways that the court would not immediately perceive.  
We therefore wish to make plain that we do not foreclose the 
possibility of the Secretary, in an appropriate case, demon-
strating the necessity of withholding all notice and all oppor-
tunity to present evidence until the designation is already 
made.  The difficulty with that in the present case is that the 
Secretary has made no attempt at such a showing.

     We therefore hold that the Secretary must afford the 
limited due process available to the putative foreign terrorist 
organization prior to the deprivation worked by designating 
that entity as such with its attendant consequences, unless he 
can make a showing of particularized need.

            c. What process is due
          
     We have no doubt foreshadowed our conclusion as to what 
process the Secretary must afford by our discussion of when 
the Secretary must afford it.  That is, consistent with the full 
history of due process jurisprudence, as reflected in Mathews 
v. Eldridge, "[t]he fundamental requirement of due process is 
the opportunity to be heard 'at a meaningful time and in a 
meaningful manner.' "  424 U.S. at 333 (quoting Armstrong v. 
Manzo, 380 U.S. 545, 552 (1965)).  To make plain what we 
have assumed above, those procedures which have been held 
to satisfy the Due Process Clause have "included notice of the 
action sought," along with the opportunity to effectively be 
heard.  Id. at 334.  This, we hold, is what the Constitution 
requires of the Secretary in designating organizations as 
foreign terrorist organizations under the statute.  The Secre-
tary must afford to the entities under consideration notice 
that the designation is impending.  Upon an adequate show-
ing to the court, the Secretary may provide this notice after 
the designation where earlier notification would impinge upon 
the security and other foreign policy goals of the United 
States.

     The notice must include the action sought, but need not 
disclose the classified information to be presented in camera 
and ex parte to the court under the statute.  This is within 
the privilege and prerogative of the executive, and we do not 

intend to compel a breach in the security which that branch is 
charged to protect.  However, the Secretary has shown no 
reason not to offer the designated entities notice of the 
administrative record which will in any event be filed publicly, 
at the very latest at the time of the court's review.  We 
therefore require that as soon as the Secretary has reached a 
tentative determination that the designation is impending, the 
Secretary must provide notice of those unclassified items 
upon which he proposes to rely to the entity to be designated.  
There must then be some compliance with the hearing re-
quirement of due process jurisprudence--that is, the opportu-
nity to be heard at a meaningful time and in a meaningful 
manner recognized in Mathews, Armstrong, and a plethora of 
other cases.  We do not suggest "that a hearing closely 
approximating a judicial trial is necessary."  Mathews, 424 
U.S. at 333.  We do, however, require that the Secretary 
afford to entities considered for imminent designation the 
opportunity to present, at least in written form, such evidence 
as those entities may be able to produce to rebut the adminis-
trative record or otherwise negate the proposition that they 
are foreign terrorist organizations.

     It is for this reason that even in those instances when post-
deprivation due process is sufficient, our review under 
s 1189(b) is not sufficient to supply the otherwise absent due 
process protection.  The statutory judicial review is limited to 
the adequacy of the record before the court to support the 
Secretary's executive decision.  That record is currently com-
piled by the Secretary without notice or opportunity for any 
meaningful hearing.  We have no reason to presume that the 
petitioners in this particular case could have offered evidence 
which might have either changed the Secretary's mind or 
affected the adequacy of the record.  However, without the 
due process protections which we have outlined, we cannot 
presume the contrary either.

                              Remedy

     We recognize that a strict and immediate application of the 
principles of law which we have set forth herein could be 

taken to require a revocation of the designations before us.  
However, we also recognize the realities of the foreign policy 
and national security concerns asserted by the Secretary in 
support of those designations.  We further recognize the 
timeline against which all are operating:  the two-year desig-
nations before us expire in October of this year.  We there-
fore do not order the vacation of the existing designations, 
but rather remand the questions to the Secretary with in-
structions that the petitioners be afforded the opportunity to 
file responses to the nonclassified evidence against them, to 
file evidence in support of their allegations that they are not 
terrorist organizations, and that they be afforded an opportu-
nity to be meaningfully heard by the Secretary upon the 
relevant findings.

     While not within our current order, we expect that the 
Secretary will afford due process rights to these and other 
similarly situated entities in the course of future designations.

                            Conclusion

     For the reasons set forth above, we order that the Secre-
tary's designation of the National Council of Resistance of 
Iran and the People's Mojahedin of Iran as being one foreign 
terrorist organization be remanded to the Secretary for fur-
ther proceedings consistent with this opinion.