United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
July 18, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-11282
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
HOLY LAND FOUNDATION FOR RELIEF AND DEVELOPMENT, ETC; ET AL.,
Defendants,
DAVID J. STRACHMAN, in his capacity as administrator of the
Estate of Yaron Ungar; DVIR UNGAR; YISHAI UNGAR; JUDITH UNGAR;
MEIR UNGAR; MICHAL COHEN; AMICHAI UNGAR; DAFNA UNGAR,
Appellants.
On Appeal from the United States District Court
For the Northern District of Texas
Before JONES, Chief Judge, KING, JOLLY, DAVIS, SMITH, WIENER,
BARKSDALE, GARZA, DeMOSS, BENAVIDES, STEWART, DENNIS, CLEMENT,
PRADO, and OWEN, Circuit Judges.
BENAVIDES and STEWART, Circuit Judges:
We took this case en banc to reevaluate the panel’s treatment
of United States v. Thier, 801 F.2d 1463 (5th Cir. 1986). Relying
on Thier, which held that the notice and hearing requirements of
FED. R. CIV. P. 65 applied to restraining orders issued under the
criminal forfeiture statute, a panel of this Court vacated the
district court’s restraining order for noncompliance with Rule 65.
United States v. Holy Land Found. for Relief and Dev., 445 F.3d 771
(5th Cir. 2006), vacated for reh’g en banc (2006). For the reasons
that follow, we conclude that Thier was wrongly decided, and is now
overruled. We further conclude that, having overruled Thier, we
have no authority to consider the Ungars’ additional arguments. If
the Ungars wish to challenge the ruling of the district court
below, they must first do so in that court, either in a hearing
under 21 U.S.C. § 853, or through some other procedural mechanism.
I. FACTS AND PROCEDURAL HISTORY
Appellant David Strachman represents the estates of husband
and wife, Yaron and Efrat Ungar, who were killed during a terrorist
attack. In February 2004, Strachman, along with members of the
Ungar family and their representatives (“the Ungars”), obtained a
$116,409,123 default judgment against Hamas1 in Rhode Island’s
federal district court pursuant to the civil provisions of the
Antiterrorism Act of 1991, 18 U.S.C. § 2333.2 See Estates of Ungar
ex rel. Strachman v. Palestinian Auth., 304 F. Supp. 2d 232, 238,
242 (D.R.I. 2004). That district court determined that its
1
According to the indictment against the Holy Land Foundation,
“[t]he Harakat al-Muqawamah al-Islamiyya is Arabic for ‘The Islamic
Resistance Movement’ and is known by the acronym HAMAS. HAMAS,
which is sometimes referred to by its followers as ‘The Movement,’
is a terrorist organization based in the West Bank and Gaza Strip.”
2
18 U.S.C. § 2333 provides a cause of action for American
nationals injured in their person, property, or business by reason
of an act of international terrorism.
2
judgment was enforceable against the assets of the Holy Land
Foundation for Relief and Development (“HLF”).3 Id. at 241. Based
on this judgment, federal district courts in New York, South
Carolina, and Washington issued writs of execution against HLF that
the Ungars allege were levied in the respective jurisdictions on or
before September 13, 2004.
Meanwhile, on July 26, 2004, the United States filed a forty-
two count indictment against HLF in federal district court for the
Northern District of Texas. The indictment charged HLF with
material support of a terrorist organization, tax evasion, and
money laundering, and the Government sought forfeiture of HLF
property. In order to preserve HLF’s assets in the event of a
conviction, the Government sought a restraining order from the
district court on September 24, 2004. The district court issued
that order ex parte with the authority given it in the criminal
forfeiture statute, 21 U.S.C. § 853(e)(1)(A). That order
indefinitely froze the assets of HLF and its financial agents,
including the bank accounts in New York, South Carolina and
Washington.
The Ungars were suddenly unable to obtain the funds upon which
3
Without reciting the entire history of HLF, we note that
there is strong evidence that HLF works as a fundraiser for Hamas.
On December 4, 2001, the Treasury Department determined that HLF
acted “for or on behalf of” Hamas and was thus a Specially
Designated Terrorist under Executive Order 12947 and a Specially
Designated Global Terrorist under Executive Order 13224. See
Estates of Ungar ex rel. Strachman, 304 F. Supp. 2d at 241.
3
they levied, and which they believed belonged to them. They
appealed the restraining order to this Court, alleging, among other
things, that it was entered without providing them adequate notice
or a fair opportunity to be heard. On April 4, 2006, a panel of
this Court agreed with them. After deciding several jurisdictional
and statutory questions, the panel concluded that it was
constrained by our precedent in United States v. Thier, 801 F.2d
1463 (5th Cir. 1986), to apply the notice provisions of Federal
Rule of Civil Procedure 65 to the ex parte restraining order.
Therefore, the panel vacated the restraining order for
noncompliance with Rule 65 and remanded the case to district court
for any further proceedings. 445 F.3d at 793. In doing so, the
panel repeatedly explained that it was bound to follow Thier until
such time as it was overruled either by the Supreme Court or by our
Court sitting en banc. That time has come.
II. STANDARD OF REVIEW
Ordinarily we review a district court’s order of injunction
for abuse of discretion, but where, as here, the district court’s
decision turns on the application of statutes or procedural rules,
our review of that interpretation is de novo. Cf. Castillo v.
Cameron County, Tex., 238 F.3d 339, 347 (5th Cir. 2001) (“Although
the district court’s decision to continue the injunctions is to be
reviewed for an abuse of discretion, . . . because the district
court’s decision . . . turns on the application of § 3626(b) of the
4
[Prison Litigation Reform Act], that interpretation is reviewed de
novo.”) (citations omitted).
III. DISCUSSION
We begin our inquiry with the question of the Ungars’ standing
to appeal the restraining order to this Court. Unlike the panel,
however, our primary concern here is not with the three
constitutional requirements of standing, per se. See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (identifying
three requirements that constitute “irreducible constitutional
minimum” of standing: “injury in fact,” causation, and
redressability). The panel opinion properly dealt with the
question of the Ungars’ personal stake in the outcome of this
controversy, and we have no reason to revisit that inquiry. 445
F.3d at 779–81. Indeed, even the Government does not now challenge
the legitimacy of the Ungars’ interest in this case. Rather, its
more specific argument, and our primary concern, is whether the
Ungars are barred by statute from bringing their arguments to this
Court at this time.
The Government argues that the Ungars must pursue their
interest in HLF’s property in accordance with the scheme set out in
the federal criminal forfeiture statute, 21 U.S.C. § 853.4 If this
4
We note that the Government did not advance this argument in
any detail before the panel. By the time the case reached the en
banc Court, however, the Government had taken up this position as
its primary ground for relief. At oral argument, counsel for the
Government explained that the shift was the result of “further
5
is true, then the Ungars likely would have to wait until HLF’s
criminal trial is over and, if HLF is convicted, assert their
interest in a post-trial hearing in the district court. See 21
U.S.C. § 853(n) (detailing post-trial hearing). At that hearing,
the district judge would assess the primacy of their interest
relative to that of the Government and any other third-party
claimants, and distribute the property accordingly. The Government
urges, therefore, that this appeal is an attempt to circumvent that
statutory scheme and must be dismissed.
The Ungars respond in two ways. First, they assert that they
are, in their words, the “victims” of a restraining order that was
issued without notice or a hearing, and therefore our holding in
Thier, which extended Rule 65's protections to parties “adverse” to
a criminal restraining order, allows them to appeal that order to
this Court. Second, they argue that they need not wait for a post-
trial hearing because § 201(a) of the Terrorism Risk Insurance Act
of 2002 (“TRIA”), Pub. L. No. 107-297, 116 Stat. 2322, 2337, trumps
the criminal forfeiture statute. We consider these arguments in
turn.
A. The Ungars’ right to notice under Thier
The Ungars argue that they have a right to appeal the district
deliberation within the Department since the panel’s opinion was
issued.” Whatever the reason for the change, we now have the
benefit of full briefing on this issue and can give it its due
consideration at this time. To be sure, though the argument was
not made forcefully, it is nonetheless preserved for our review.
6
court’s restraining order to this Court, rather than resort to the
§ 853 hearing, because we gave them that right in United States v.
Thier, 801 F.2d 1463 (5th Cir. 1986). Thier presented the case of
a post-indictment restraining order, issued by a district court
pursuant to 21 U.S.C. § 853(e)(1)(A), which prevented a criminal
defendant from disposing of his assets pending the outcome of his
trial. Id. at 1465–66. The Government had requested the order and
put forth sufficient evidence to convince the district judge that
Thier “might frustrate justice and endanger the government’s
interest in these properties by placing them beyond the
jurisdiction of the court.” Id. at 1466. Importantly, the court
issued the order ex parte and ruled that it was to stay in effect
until further ordered by the court. Thier was served with a copy
of the order the next day. At his request, the court later held a
hearing to consider modifying the order, but declined to do so.
Thier then appealed to this Court, alleging, inter alia, that the
district court’s restraint of his assets without an adversary
hearing violated his due process rights under the Fifth Amendment.
A panel of this Court held that post-indictment restraining
orders and injunctions issued pursuant to 21 U.S.C. § 853(e)(1)(A)
would not offend due process so long as the requirements of Federal
Rule of Civil Procedure 65 were satisfied. Id. at 1468. Rule 65
provides certain procedural safeguards to the “adverse party” when
a district court issues an injunction or restraining order. In the
7
case of an ex parte restraining order, it states that such order is
only effective for ten days unless the court chooses to extend it
for one additional ten-day period for good cause, or the party
against whom the order is directed consents to an extension. FED.
R. CIV. P. 65(b); Thier, 801 F.2d at 1469. The ex parte restraining
order in Thier exceeded these hearing and duration limits, and so
the panel remanded the case with directions to conduct a hearing on
reasonable notice and in accordance with the other strictures of
Rule 65. Thus, Thier stands for the proposition that Rule 65
protects “adverse parties”5 whenever an injunction or restraining
order is issued pursuant to the criminal forfeiture statute, 21
U.S.C. § 853(e)(1)(A).
The Ungars argue that they are similarly situated to Thier,
that they are an “adverse party” as that term is used in Rule 65,
and that they were not given adequate notice or a hearing in the
district court. Accordingly, they maintain that they, like Thier,
have the right to appeal that order to this Court. The panel
5
Notably, Rule 65, as a rule of civil procedure, does not
speak in terms of criminal defendants, but rather uses the more
generic term, “adverse parties.” To be sure, the Ungars, unlike
Thier, are not defendants in the case below, and the restraining
order on HLF’s assets does not mention the Ungars at all. However,
the Ungars argue that the order was nonetheless directed at them
because they were in the process of executing their judgment
against HLF’s assets. The panel agreed and adjudged the Ungars to
be an “adverse party” for purposes of Rule 65, which triggered the
panel’s compliance with Thier. 445 F.3d at 792. However, that
question is now moot in light of our decision to overrule Thier,
and we need not consider it at this time.
8
considered this argument at great length and concluded that it was
“constrained by Thier and its progeny” to dissolve the restraining
order. 445 F.3d at 789–93. We are not so constrained. We decide,
here and now, that Thier is no longer the law of this Circuit.
There are several reasons why we have chosen to overrule
Thier. First, shortly after the case was decided, it was called
into doubt by the Supreme Court in United States v. Monsanto, 491
U.S. 600 (1989). In fact, that opinion overruled Thier insofar as
Thier applied a higher burden on the Government than the probable
cause standard to justify pretrial restraint of forfeitable assets.
Id. at 615.6 It is true that the Court specifically declined to
decide whether due process might require a hearing before a
pretrial restraining order could be imposed, id. at 615 n.10, but
the opinion nevertheless speaks in strong terms about the primacy
we ought to give to the language of § 853. It states that “the
6
We recently examined this tension in greater detail in United
States v. Melrose East Subdivision, 357 F.3d 493, 504–05 (5th Cir.
2004), but we briefly recount that observation here. In addition
to requiring an indictment based on probable cause, Thier demanded
that the Government satisfy the traditional four-part test for a
preliminary injunction, one part of which is to demonstrate a
substantial likelihood of success on the merits, in order to carry
its burden at a § 853(e)(1)(A) hearing. See Thier, 801 F.2d at
1470. This undoubtedly imposes a higher burden than probable
cause, but Monsanto makes plain that probable cause alone is
sufficient to satisfy due process. 491 U.S. at 615 (“We conclude
. . . that assets in a defendant’s possession may be restrained in
the way they were here based on a finding of probable cause to
believe that the assets are forfeitable.”). See generally Melrose
East Subdivision, 357 F.3d at 504–05 & n.12 (discussing cases in
greater detail).
9
language of § 853 is plain and unambiguous: all assets falling
within its scope are to be forfeited upon conviction,” and that
“Congress could not have chosen stronger words to express its
intent that forfeiture be mandatory in cases where the statute
applied, or broader words to define the scope of what was to be
forfeited.” Id. at 606–07. This language strongly suggests that
we need not read into § 853 the protections of a wholly separate
rule of civil procedure in order to satisfy the requirements of due
process. The apparent incongruity of the opinions recently
prompted us to observe that “[s]ome aspects of Thier appear to be
in tension with Monsanto, and future cases may need to consider
whether certain portions of Thier were overruled.” Melrose East
Subdivision, 357 F.3d at 504.
In addition to the spirit of Monsanto, however, we are
overruling Thier because it is out of step with the reasoning of
several of our sister circuits.7 Most circuits that have spoken to
the issue do not resort to Rule 65's guarantee of a hearing to
satisfy due process, but they also do not hold that a hearing is
never required. Rather, they rely on the time-honored test of
Mathews v. Eldridge, 424 U.S. 319 (1976), to determine when a
hearing is required. See, e.g., United States v. Jones, 160 F.3d
7
We first catalogued the different approaches of other
circuits in Melrose East Subdivision. See 357 F.3d at 499–500
(summarizing cases).
10
641, 645–48 (10th Cir. 1998); United States v. Monsanto, 924 F.2d
1186, 1193–98 (2d Cir. 1991) (on remand from 491 U.S. 600 (1989));
United States v. Moya-Gomez, 860 F.2d 706, 729–30 (7th Cir. 1988);
United States v. Harvey, 814 F.2d 905, 928–29 (4th Cir. 1987),
superceded as to other issues, In re Forfeiture Hearing As to
Caplin & Drysdale, Chartered, 837 F.2d 637 (4th Cir. 1988) (en
banc), aff’d, 491 U.S. 617 (1989). Under this method, which we
adopt, when the Government is seeking forfeiture and secures an
indictment to that effect based on probable cause, a court may
issue a restraining order without prior notice or a hearing. In
some cases, however, due process will require that the district
court then promptly hold a hearing at which the property owner can
contest the restraining order, without waiting until trial to do
so. To determine when such a hearing is required, we consider the
three Eldridge factors: the private interest that will be affected
by the restraint; the risk of an erroneous deprivation of such
interest through the procedures used, and the probable value, if
any, of additional or substitute procedural safeguards; and
finally, the Government’s interest, including the burdens that the
hearing would entail. 424 U.S. at 335. As we observed in Melrose
East Subdivision, circuits employing this test have found that a
property owner’s interest is particularly great when he or she
needs the restrained assets to pay for legal defense on associated
criminal charges, or to cover ordinary and reasonable living
11
expenses. See Melrose East Subdivision, 357 F.3d at 499–500
(collecting cases).
We note that the Ninth Circuit still adheres to the view
expressed in Thier, that the protections of Rule 65 apply to all
injunctions and restraining orders under § 853(e)(1)(A). See
United States v. Roth, 912 F.2d 1131 (9th Cir. 1990). On the other
end of the spectrum, the Eleventh Circuit maintains that no
pretrial hearing is ever required, even when the restrained assets
are needed to pay counsel. See United States v. Register, 182 F.3d
820, 835 (11th Cir. 1999) (“We appear to be the only circuit
holding that, although pre-trial restraint of assets needed to
retain counsel implicates the Due Process Clause, the trial itself
satisfies this requirement.” (citing United States v. Bissell, 866
F.2d 1343, 1352–54 (11th Cir. 1989))). With due respect to both of
those circuits, we believe the rule we adopt strikes an appropriate
balance between those views. It will spare the Government from
frivolous challenges that might impede its ongoing criminal
investigations, but does so without jeopardizing the rights of
property owners to access their assets in a timely fashion when
necessary.
Returning now to the Ungars, we find that their claim is
substantially affected by our decision to overturn Thier. It was
Thier that incorporated Federal Rule of Civil Procedure 65, with
its procedural safeguards for “adverse parties.” That language, in
12
turn, allowed the Ungars to bring their due process claim to this
Court, for even though they were not parties to the underlying
criminal action, the panel did consider them to be “adverse
parties” for purposes of Rule 65.8 445 F.3d at 792. Under the
rule we announce today, however, there is no need to consider Rule
65, and there are no such protections for “adverse parties.”
Instead, if the Ungars wish to challenge the district court’s
order, they must be able to satisfy the Eldridge factors. We turn
now to the question of whether they can do so.
B. The Ungars’ interest in the forfeitable assets
The Ungars argued before the panel that the district court in
Texas had no jurisdiction to restrain the bank accounts in question
because other courts in New York, South Carolina and Washington had
already levied writs of execution against those accounts, rendering
them in custodia legis.9 The panel considered this argument at
great length, examined the status of each account individually, and
concluded:
Our review of the record reveals that none of the levies
was perfected so as to transfer possession or control of
8
“When dealing with a preliminary injunction, the ‘adverse
party’ means the party adversely affected by the injunction, not
the opponent in the underlying action.” Parker v. Ryan, 960 F.2d
543, 545 (5th Cir. 1992).
9
In custodia legis means “[i]n the custody or keeping of the
law . . . .” BLACK’S LAW DICTIONARY 768 (6th ed. 1990); see also In
re Chesnut, 422 F.3d 298, 301 (5th Cir. 2005) (explaining that in
custodia legis means “literally, ‘in the custody of the law’;
loosely, ‘in the care of the court’”).
13
HLF’s interest in the bank accounts to the respective
federal district courts or to the Ungars in such a manner
that the Ungars may now challenge the Texas district
court’s jurisdiction to enter the restraining order.
445 F.3d at 783 (emphasis added). This reasoning was sound, and it
bears directly on the question of the Ungars’ property interest in
the accounts. Therefore, before going forward, we note that the
entire portion of the panel opinion explaining that jurisdiction
was not defeated on this basis, specifically Part III.D, is hereby
REINSTATED. 445 F.3d at 782–85.
Having accepted the panel’s conclusion that the Ungars had no
perfected property interest in the subject accounts, we find that
the private interest affected by the restraint in this case is
minimal at best.10 Accordingly, they do not have any right under
Eldridge to request a hearing at this time, nor do they have any
right to appeal the district court’s restraining order to this
Court. They are simply judgment creditors, and while they may have
10
While the first of the Eldridge factors largely disposes of
the issue in this case, we note for the sake of completeness that
the other two factors also favor the Government. The risk of an
erroneous deprivation of the Ungars’ interest is minimal in light
of the safeguards afforded to the Ungars by 21 U.S.C. § 853. See
infra Part III.C. As for the Government’s interest, we have
already referenced the Supreme Court’s view that “Congress could
not have chosen stronger words” to express its view that forfeiture
should be both mandatory and broad in scope. Monsanto, 491 U.S. at
606–07. From this we draw the related conclusion that it would be
a significant burden on the Government to have to defend the
forfeiture order from attack by a third party during the course of
an ongoing criminal prosecution. While future cases may present a
different balance of interests, we find that the Eldridge factors
do not support the Ungars’ request for a hearing at this time. See
Mathews v. Eldridge, 424 U.S. at 335.
14
a viable third-party claim on the assets of HLF, there is currently
no legal basis for them to appeal a restraining order on those
assets. In fact, the relevant law is to be found in the criminal
forfeiture statute itself, which lays out a detailed scheme by
which third-party claimants like the Ungars can assert their
interest in the restrained assets.
C. Third-party claims under 21 U.S.C. § 853
The criminal forfeiture statute is designed to balance the
Government’s interest in efficient and orderly prosecution with the
rights of defendants and third parties who claim an interest in
forfeitable property. Two key provisions of the statute make clear
that the Ungars may not intercede in the pending HLF prosecution at
this time, at least not in the fashion in which they have done so.11
Section 853(k) reads:
Except as provided in subsection (n) of this section, no
party claiming an interest in property subject to
forfeiture under this section may—
(1) intervene in a trial or appeal of a criminal
case involving the forfeiture of such property under this
section; or
(2) commence an action at law or equity against the
United States concerning the validity of his alleged
interest in the property subsequent to the filing of an
indictment or information alleging that the property is
subject to forfeiture under this section.
This bar on intervention makes an exception for the process set out
in section (n). That section, in turn, makes plain that the Ungars
11
The Ungars concede that they could follow the procedure set
forth in § 853, but add that they need not do so because TRIA gives
them an independent remedy. We consider this argument in greater
detail in Part III.D, infra.
15
will have a chance to assert their interest in the subject
property, but only after the termination of the pending criminal
case. In the event of a conviction, the court will enter an order
of forfeiture, which will transfer Holy Land’s assets to the
Government of the United States. Then:
(1) Following the entry of an order of forfeiture under
this section, the United States shall publish notice of
the order and of its intent to dispose of the property in
such manner as the Attorney General may direct. The
Government may also, to the extent practicable, provide
direct written notice to any person known to have alleged
an interest in the property that is the subject of the
order of forfeiture as a substitute for published notice
as to those persons so notified.
(2) Any person, other than the defendant, asserting a
legal interest in property which has been ordered
forfeited to the United States pursuant to this section
may, within thirty days of the final publication of
notice or his receipt of notice under paragraph (1),
whichever is earlier, petition the court for a hearing to
adjudicate the validity of his alleged interest in the
property. The hearing shall be held before the court
alone, without a jury.
21 U.S.C. § 853(n).
It is plain, therefore, that if HLF is convicted12 and its
assets are forfeited to the Government, the Ungars will receive
notice of that occurrence. At that time they may petition the
court for a hearing. The statute further states that such a
hearing is to take place within thirty days of the filing of the
12
It goes without saying that if the Government fails to
convict HLF, then the Ungars are in the same position they were
before the criminal case arose. They are still judgment creditors,
and they may continue to execute that judgment against HLF’s assets
in the relevant jurisdictions.
16
petition, if practicable. 21 U.S.C. § 853(n)(4). Moreover, the
court is empowered to consolidate all petitions for such hearings
into a single proceeding, so as to adjudicate all competing claims
at once. Id. In this way, then, the hearing is similar to a
bankruptcy proceeding, at which the judge will consider the
validity and priority of each party’s alleged interest in the
property. If the district court determines that a third party, be
it the Ungars or any other claimant,13 has an interest superior to
that of the Government, it will amend the forfeiture order
accordingly. § 853(n)(6).
We can understand the Ungars’ frustration at having to await
the completion of the Government’s case, but we are readily
satisfied that the system set out in § 853 provides them with due
process. To be sure, the Ungars will have their day in court, but
under the scheme set forth in § 853, they cannot have it today, and
they cannot have it in this Court. They must wait for the criminal
13
We note that at least one other group of plaintiffs, the Boim
family, have secured a judgment against HLF in the same fashion as
the Ungars. Amended Final Judgment in a Civil Case, Boim v.
Quranic Literacy Inst., No. 00-C-2905 (N.D. Ill. Mar. 2, 2005).
That case is now on appeal in the Seventh Circuit, but if their
judgment is affirmed, then presumably they, too, will have an
interest to assert in a post-trial forfeiture hearing in the
district court in Texas. We suspect that potential conflicts of
this sort were one reason that Congress chose to ban third-party
intervention during the pendency of a criminal prosecution, and to
move all such claims into a post-trial hearing instead. While this
delay may impose a burden on the claimants, the countervailing
benefits to the Government, the court, and even the claimants
themselves, are obvious.
17
prosecution to conclude, and, if HLF is convicted, they must take
their arguments to that district court in the first instance.
D. The Ungars’ Reliance on TRIA
Despite the clear language of § 853, the Ungars assert that it
does not apply to them. They argue that they need not wait for the
post-trial hearing described in § 853(n), because another statute,
TRIA § 201(a), trumps the criminal forfeiture statute. The
relevant portion of that Act provides that:
Notwithstanding any other provision of law, . . . in
every case in which a person has obtained a judgment
against a terrorist party on a claim based upon an act of
terrorism, or for which a terrorist party is not immune
under section 1605(a)(7) of title 28, United States Code,
the blocked assets of that terrorist party (including the
blocked assets of any agency or instrumentality of that
terrorist party) shall be subject to execution or
attachment in aid of execution in order to satisfy such
judgment to the extent of any compensatory damages for
which such terrorist party has been adjudged liable.
TRIA § 201(a) (emphasis added). The Ungars place great weight on
the “notwithstanding” clause in this statute. On the strength of
that clause, counsel for the Ungars likens TRIA to “legal
kryptonite,” and argues that it supercedes the criminal forfeiture
statute and allows the Ungars to reach the assets that are
“blocked” by the district court’s § 853 restraining order. TRIA,
he says, makes the Ungars’ claim qualitatively different from a
typical judgment creditor’s claim to forfeitable assets. On this
reading, because the court’s restraining order currently prevents
the Ungars from executing their judgment against HLF’s assets, that
18
order is in conflict with TRIA § 201(a) and must be declared void.
The Government agrees that TRIA trumps previous laws that
limit the attachment and execution of blocked assets, but maintains
that the criminal forfeiture statute is not such a law. On the
Government’s reading, § 853 does not “block” any of HLF’s assets as
that term is used in § 201(a). Rather, says the Government, the
criminal forfeiture statute sets out a system whereby the court can
distribute those funds in an appropriate manner. In short, § 853
does not say that the Ungars cannot execute their judgment; it
merely tells them when and how. Therefore, the two statutes do not
conflict with one another, but work in tandem, and the
“notwithstanding” clause should not be read to override § 853.
This is certainly an interesting legal question, but we have
no license to consider it at this time. The reason we have to
refrain is that the Ungars never presented this TRIA argument to a
district court in the first instance. They are presently on appeal
in this Court without being a party to the action below, or even
trying to make themselves a party to it. Importantly, this is not
a question of their having waived the argument, but of the
propriety of our considering arguments that have never been before
a lower court. If TRIA is the powerful tool that the Ungars say it
is, then they must invoke it in the district court first, either in
the § 853 hearing or through some other procedural channel, but we
are not authorized to consider that question until a lower court
has done so.
19
IV. CONCLUSION
For the foregoing reasons, Part III.D of the panel opinion is
REINSTATED, while all other portions remain VACATED. Having
overruled Thier, there is no authority allowing the Ungars to
appeal to this Court without first presenting their arguments to
the district court. Accordingly, the appeal is DISMISSED.
20