2003 WL 22670339 (9th Cir.)

For opinion see 426 F.3d 1150, 427 F.3d 646, 412 F.3d 1071, 392 F.3d 1031

United States Court of Appeals,Ninth Circuit.

UNITED STATES OF AMERICA, Plaintiff/Appellant,

v.

Roya RAHMANI, Et Al., Defendants/Appellees.

No. 02-50355.

April 3, 2003.

On Appeal from the United States District Court for the Central District of California

Reply Brief for the Appellant United States

Michael Chertoff, Assistant Attorney General, Debra W. Yang, United States Attorney, Douglas Letter, Yoel Tobin, Attorneys, U.S. Department of Justice, Room 9106, 601 D Street, N.W., Washington, D.C. 20530-0001, (202) 514-3602

*i TABLE OF CONTENTS

INTRODUCTION ... 1

ARGUMENT ... 5

A. Defendants Have No First Amendment Right To Provide Money To The MEK ... 5

B. The Defendants Have No First Amendment Right To Impose "Due Process Protections" On the Designation Process ... 21

C. Defendants' Due Process Claims Are Meritless ... 24

D. The 1999 Designation Of The MEK Can Validly Serve As A Predicate For Criminal Prosecution Under The Antiterrorism Act ... 26

E. The 1997 MEK Designation Is, In Any Event, Clearly Valid ... 31

CONCLUSION ... 32

CERTIFICATE OF COMPLIANCE ... 33

CERTIFICATE OF SERVICE ... 34

*ii TABLE OF AUTHORITIES

Cases:

Bouie v. City of Columbia, 378 U.S. 347 (1964) ... 29

Brock v. Pierce County, 476 U.S. 253 (1986) ... 28

Codd v. Velger, 429 U.S. 624 (1977) ... 16

DKT Memorial Fund, Ltd. v. Agency for International Development, 887 F.2d 275 (D.C. Cir. 1989) ... 17

Farrakhan v. Reagan, 669 F. Supp. 506 (D.D.C. 1987), affd. without opin., 851 F.2d 1500 (D.C. Cir. 1988) ... 12

Gray-Bey v. United States, 201 F.3d 866 (7th Cir. 2000) ... 28

Hecht Co. v. Bowles, 321 U.S. 321 (1944) ... 28

Humanitarian Law Project v. Reno, 205 F.3d 1130 (9th Cir. 2000), cert. denied, 532 U.S. 904 (2001) ... 5, 6, 12, 19, 24, 27

Kleindienst v. Mandel, 408 U.S. 753 (1972) ... 11

Lewis v. United States, 445 U.S. 55 (1980) ... 29

McKinney v. Alabama, 424 U.S. 669 (1976) ... 19, 20

National Council of Resistance of Iran v. Department of State, 251 F.3d 192 (D.C. Cir. 2001) ... 26, 30

Palestine Information Office v. Schultz, 853 F.2d 932 (D.C. Cir. 1988) ... 12

*iii People's Mojahedin Organization of Iran v. Secretary of State, 182 F.3d 17 (D.C. Cir. 1999) cert. denied, 529 U. S. 1104 (2000) ... 16, 21, 23, 31

Regan v. Wald, 468 U.S. 222 (1984) ... 9, 10, 23

Smithkline Beecham Corp. v. Apotex Corp., ... F. Supp. 2d ..., 2003 WestLaw 728889 (N.D. Ill. March 3, 2003) ... 29

United Hospital Center, Inc. v. Richardson, 757 F.2d 1445 (4th Cir. 1985) ... 28

United States v. Arch Trading Co., 987 F.2d 1087 (4th Cir. 1993) ... 9

United States v. Bozarov, 974 F.2d 1037 (9th Cir. 1992), cert. denied, 507 U.S. 917 (1993) ... 18, 25

United States v. Mendoza-Lopez, 481 U.S. 828 (1987) ... 25

Zemel v. Rusk, 381 U.S. 1 (1965) ... 10

Constitution:

United States Constitution, First Amendment ... passim

Statutes:

8 U.S.C. 1182(a)(3)(B)(iii) ... 15

8 U.S.C. 1189(a)(8) ... 5, 6, 24, 27

8 U.S.C. 1189(b)(3) ... 27

18 U.S.C. 2332d ... 7

18 U.S.C. 2339A ... 18, 19

18 U.S.C. 2339B ... passim

18 U.S.C. 2339B(a) & (g)(6) ... 26

*iv International Emergency Economic Powers Act 50 U.S.C. 1701, et seq. ... 8

50 U.S.C. App. 2405 ... 7

Orders:

Executive Order No. 12543, 51 Fed. Reg. 875 (1986) ... 8

Executive Order No. 12947, 60 Fed. Reg. 5079 (1995) ... 8

Executive Order No. 13129, 64 Fed. Reg. 36759 (1999) ... 8

Executive Order No. 13268, 67 Fed. Reg. 44751 (2002) ... 8

Legislative Materials:

H.R. Rep. No. 104-383, 43-45 (1995) ... 19

*1 INTRODUCTION

Defendants/appellees Rahmani et al. were indicted here because they provided substantial amounts of money over a several year period to the Mujahedin-e Khalq (also known as "the MEK" or "the People's Mojahedin Organization of Iran"), a foreign terrorist entity operating out of Iraq and other foreign countries. The MEK has proudly trumpeted the fact that it has attacked and assassinated various high-level Iranian government officials in recent years.

*2 Because of its activities, the MEK has been designated by the Secretary of State as a Foreign Terrorist Organization, pursuant to the Secretary's authority under the Antiterrorism and Effective Death Penalty Act of 1996. In that statute, in order to protect the foreign relations and national security interests of the United States, Congress has made knowing provision of material support to a Foreign Terrorist Organization designated by the Secretary of State a felony. See 18 U.S.C. 2339B.

The United States has appealed to this Court because the district court dismissed the indictment against the defendants. That court found the Antiterrorism Act constitutionally invalid, both on its face and as applied, because it does not provide sufficient due process protections to Foreign Terrorist Organizations, and because defendants are denied the ability themselves to challenge in their criminal prosecutions the designation of these organizations.

We note initially that, in their appellee brief, the defendants part company with the district court in a significant way, abandoning the court's conclusion that the Antiterrorism Act is invalid on its face. Accordingly, for the reasons stated in our opening brief, there is no possible justification to conclude here, as the district court did, that the underlying designation scheme in the Antiterrorism Act is facially invalid.

*3 We devote most of our attention in this reply brief to the centerpiece of defendants' argument, which was not the basis for the district court's ruling. Defendants premise their case mainly on the proposition that they have a First Amendment right to provide funds to foreign organizations designated as terrorist by the Executive, unless the district court presiding over the criminal prosecution finds on its own that the organization is actually a terrorist one. In other words, under defendants' argument, regardless of the Executive's designation of the MEK as a Foreign Terrorist Organization, and regardless of whether that designation has been upheld by the D.C. Circuit in the review scheme provided in the governing statute, they cannot be constitutionally prosecuted for financially supporting this entity unless the district court renders its own conclusion that the MEK is a terrorist organization. Because the Antiterrorism Act does not allow for this type of second-guessing by the district courts, defendants contend that the court below correctly dismissed the indictment, although not for the right reason.

Besides being different from the theory adopted by the district court, defendants' legal argument here is wrong at its core. As we show in our brief, defendants have no constitutionally protected right to provide money to the MEK given the decision by the political branches that such aid is contrary to the foreign policy/national security interests of the United States. Defendants' conception *4 incorrectly demands that the district courts override what Congress has enacted, and insist instead on substituting themselves for the Executive in making crucial and sensitive determinations concerning which foreign entities should be sanctioned for their conduct vis-a-vis the United States and its interests. Nothing in the Constitution permits, much less compels, such a usurpation of authority from the Legislative and Executive Branches.

Moreover, in light of the conceded nature of the MEK, defendants' argument in this case is quite odd. As we discuss below, this group has explicitly told the D.C. Circuit in its public court filings that it targets, attacks, and assassinates high-level Iranian officials, using bombs and mortars. The MEK has even informed the D.C. Circuit that it carried out a mortar attack on the offices of the Iranian Supreme Leader, Ali Khamenei, targeting him specifically. Under these circumstances, defendants' contention that they must have the opportunity to establish that the MEK is not a terrorist body is rather puzzling.

Finally, defendants' statutory claim that the 1999 designation of the MEK cannot form the basis of a Section 2339B prosecution disregards the statutory elements of the offense and the D.C. Circuit's decision to leave that designation in place. Furthermore, any counts based on the 1997 MEK designation can clearly proceed because the D.C. Circuit fully upheld that designation.

*5 ARGUMENT

A. Defendants Have No First Amendment Right To Provide Money To The MEK.

1. In our opening brief, we demonstrated that Congress provided in the Antiterrorism Act that defendants in criminal prosecutions brought to enforce that statute cannot challenge the validity of the Secretary of State's underlying designation of an entity as a Foreign Terrorist Organization. See 8 U.S.C. 1189(a)(8). Congress provided specified judicial review within a defined period directly in the D.C. Circuit for the designated organizations themselves, and that review is meant to be exclusive regarding the validity of the designation. Thus, as this Court held in Humanitarian Law Project v. Reno, 205 F.3d 1130, 1137 (9th Cir. 2000), cert. denied, 532 U.S. 904 (2001), where the plaintiffs - who were prospective donors to Foreign Terrorist Organizations - attacked the procedures and judicial review scheme for Antiterrorism Act designations, "that challenge must be raised in an appeal from a decision to designate a particular organization."

In response, Rahmani and the other defendants contend first (Br. 15-17) that they have a right to attack the constitutionality of the statute under which they are being prosecuted. [FN1] We agree with this uncontroversial proposition; defendants are *6 free to argue that their indictment should be dismissed because Section 1189(a)(8) is assertedly unconstitutional, or that 18 U.S.C. 2339B is invalid insofar as criminal liability turns on whether the Secretary of State designated the group, rather than on whether a district court agrees with the designation. Although defendants can raise these arguments, this Court should reject them because they lack merit.

FN1. Throughout this brief, as we discuss arguments made by the

defendants, we cite to pages in the brief filed by defendant Rahmani; the other defendants have adopted the points made in that brief, and have filed no separate briefs of their own.

2. Rahmani's next argument forms the heart of defendants' case. She contends (Br. 17-23) that, although Congress can prohibit any provision of material support to foreign terrorist organizations, she and the other defendants possess First Amendment rights to provide money to foreign entities that are not terrorist.

Rahmani appears to claim (Br. at 21) that her contention was "recognized" by this Court in Humanitarian Law Project, 205 F.3d at 1134. That decision, however, nowhere addresses whether there is a First Amendment right to provide material support to a foreign entity that has not been found to be terrorist by a court.

Rahmani nevertheless argues (Br. at 22-23) that defendants have a constitutional right to associate with foreign entities by providing them with material support. She contends that defendants therefore have a constitutional right "to defend against the prosecution by showing that [their] acts are protected by the First *7 Amendment; that means the defendant herself must be able to challenge" a decision by the Executive to designate a foreign entity, and prohibit transactions with it.

In other words, Rahmani contends that the review mechanism established by Congress - which places review exclusively at the organizational level and in the D.C. Circuit alone - is invalid. She urges that all of the defendants here, and any defendant in any district court in the country, must be able to attack the Secretary of State's designation of the MEK as a Foreign Terrorist Organization, and have a right to have the district courts repeatedly reassess and redetermine whether the MEK in fact engages in terrorism, and thus whether material support for it is beyond the First Amendment pale. This argument is mistaken.

a. As a legal matter, Rahmani's argument is unsupported by any case precedent, and is inconsistent with various decisions. Additionally, insofar as it would provide any district court the ability to override the Executive's decision about the terrorist nature of the MEK, her argument would seriously endanger various essential programs under which the political branches conduct foreign relations in the national security arena.

For example, under 18 U.S.C. 2332d, Congress has imposed criminal punishment on those who knowingly engage in financial transactions with foreign governments listed by the Secretary of State as state supporters of terrorism (see *850 U.S.C. App. 2405). Under defendants' theory here, no such criminal prosecution could proceed unless the district court in the relevant case itself determined that the foreign state at issue actually engages in support of terrorism. Otherwise, as defendants' argument runs, they have a First Amendment right to associate with foreign entities, such as by engaging in financial transactions with them - i.e., donating money.

Defendants thus say that the Constitution compels a hearing at which a district court would be required to attempt to determine, for instance, if the government of Sudan actually supports terrorism. Not surprisingly, defendants do not suggest precisely how an individual district judge would intelligently make such a finding (e.g., would each judge hear in camera/ex parte testimony from the Secretary of State, the Director of Central Intelligence, and the President's National Security Advisor?).

Similarly, under the International Emergency Economic Powers Act (50 U.S.C. 1701, et seq.), the President promulgates Executive Orders prohibiting financial dealings with various foreign governments or entities - such as Libya, the Taliban, or Hamas - because they are acting contrary to the interests of the United States, and he wishes to sanction them. See, e.g., Executive Order No. 12543 (51 Fed. Reg. 875 (1986)); Executive Order No. 12947 (60 Fed. Reg. 5079 (1995)); Executive Order No. 13129 (64 Fed. Reg. 36759 (1999)), revoked by Executive Order No. 13268 (67 *9 Fed. Reg. 44751 (2002)). Violations of such embargoes are criminally punishable. See, e.g., United States v. Arch Trading Co., 987 F.2d 1087, 1093-95 (4th Cir. 1993) (upholding criminal conviction for violation of sanctions regime involving Iraq).

Again, under Rahmani's theory, despite the President's decision, individuals could be prosecuted for violating these Executive Order prohibitions only if the presiding district court in each criminal prosecution under the statute reassesses and redetermines that Libya, the Taliban, or Hamas actually is a threat to the United States. In short, courts would be required repeatedly to address quintessentially political questions, under some standard that Rahmani does not define.

Yet, the Supreme Court and other federal courts have determined that these types of orders by the Executive in the foreign affairs realm are valid in the face of constitutional challenge, and have refused to second-guess the foreign policy/national security determinations made by the Executive in imposing them.

For example, the Executive imposed a broad embargo on dealings with Cuba, including travel-related transactions, which would otherwise have provided hard currency to that country. Individuals challenged this embargo, arguing that it violated their substantive due process rights. The Supreme Court rejected this claim, deferring to the Executive determination that Cuba must be denied hard currency, in part because of its support for terrorism. Regan v. Wald, 468 U.S. 222, 240-44 (1984). *10 In so ruling, the Court relied heavily on its prior decision in Zemel v. Rusk, 381 U.S. 1, 13-18 (1965), where it also turned back a First Amendment attack against a refusal to validate passports for U.S. citizens to travel to Cuba in light of a general ban on travel to that country. Regan, 468 U.S. at 241-42.

Most significantly for our purposes today, the Supreme Court in Regan, 468 U.S. at 243, rejected the plaintiffs' contention that the Executive had provided insufficient reasons for the Cuban embargo. The Court explained that the conduct of foreign relations is "so exclusively entrusted to the political branches of government as to be largely immune from judicial inquiry or interference." 468 U.S. at 242. Accordingly, "[o]ur holding in Zemel was merely an example of this classical deference to the political branches in matters of foreign policy." Ibid.

Rahmani's argument here cannot be squared with the Supreme Court's approach in Regan and Zemel, She contends that each district court in which a criminal case is filed under Section 2339B must review the Secretary's determination about the MEK and make its own decision about whether or not that foreign entity engages in terrorism threatening the security of the United States or its nationals. But in Regan and Zemel, the Supreme Court upheld the Executive's ban on certain types of association with Cuba, and refused to engage in its own decision making as to whether that ban was warranted. The constitutional rights of the plaintiffs in Regan *11 and Zemel did not require a determination by the courts that the ban on providing money to Cuba was justified.

The flaw in Rahmani's argument is shown as well by the Supreme Court's opinion in Kleindienst v. Mandel, 408 U.S. 753 (1972). There, U.S. citizens asserted that their First Amendment associational rights were being violated by the refusal of the Executive to allow a visit by Mandel, a Belgian professor. The Supreme Court rejected this claim because it found that the Executive need give only a "facially legitimate and bona fide" reason to exclude Mandel in order to overcome the plaintiffs' First Amendment claim. Id. at 770. Once again, the associational rights of the Mandel plaintiffs did not require the courts to validate independently the Executive's determination.

In this instance, the Executive has manifestly provided a facially legitimate reason for barring the provision of material support to the MEK. As discussed below, the MEK's own filing in the D.C. Circuit boasts openly of its attacks and assassinations of high-level Iranian officials, and the Secretary of State has used those same acts as the basis for its designation as a Foreign Terrorist Organization.

In sum, the central premise of Rahmani's argument is wrong: neither she nor any other defendant has a constitutionally protected right to associate by providing money to foreign groups with whom the Executive has barred dealings. The Supreme *12 Court decisions in Regan, Zemel, and Kleindienst establish this point. These precedents make clear that, in the foreign policy arena, the political branches determine whether to allow dealings with foreign entities, and those determinations are not vulnerable to constitutional attack in the various district courts. See Palestine Information Office v. Schultz, 853 F.2d 932, 941 (D.C. Cir. 1988) (Supreme Court has approved "broad governmental discretion" in cases that touch upon a right to associate with foreign entities).

This principle is confirmed by lower court decisions as well, including, most significantly, this Court's opinion in Humanitarian Law Project, 205 F.3d at 1136-37. In holding that it was constitutional for Congress to predicate criminal liability under Section 2339B on the provision of material support to designated foreign entities, this Court specifically rejected freedom of association claims by would-be donors, based on the alleged inadequacy of the underlying designation process. See 205 F.3d at 1137 (statutory designation standard sufficiently precise to satisfy constitutional concerns, given the foreign affairs context; moreover, judicial deference to Secretary's designation decision is necessary concomitant of the foreign affairs power).

In addition, the ruling in Farrakhan v. Reagan, 669 F. Supp. 506 (D.D.C. 1987), aff'd. without opin., 851 F.2d 1500 (D.C. Cir. 1988), is highly relevant here. One of the plaintiffs there claimed a First Amendment right to pay funds to Libya, *13 despite an Executive-imposed embargo on financial dealings with that entity. The district court upheld the ban because the Executive's order served a compelling interest: "[T]he court has little choice but to defer to the judgment of the President that all economic intercourse with Libya should cease. * * * Under these circumstances, we cannot say that Muhammad Mosque's interest in the free exercise of their religious principles outweighs the legitimate and compelling security interests of the United States." Id. at 512. The court then expressly rejected a First Amendment speech claim on the identical ground. Ibid.

These various decisions make clear that, in the foreign relations realm, the federal courts should and do respect the determinations made by the Executive, even in the face of constitutional claims. This principle means that, in the case at bar, Rahmani is simply mistaken in arguing that the First Amendment demands that the district court in this case determine whether or not the MEK is a terrorist entity and thus outside the sphere of groups that she can materially support. To the contrary, Congress has validly provided that, once a designation of a Foreign Terrorist Organization is made by the Executive, it can indeed be judicially reviewed in proceedings brought by the designated entity in the D.C. Circuit. Assuming that it is not vacated by that court, the fact of the designation governs and defines the scope of permissible conduct under Section 2339B, not a decision by a district court on the *14 true nature of foreign entities and their effect on our national security, a task for which the courts are obviously unsuited.

b. As alluded to above, in any event, defendants' argument that the MEK is not a terrorist entity is very hard to credit in light of what the MEK itself has said publicly in its court filings.

Rahmani contends (Br. 49-50) that the conclusion that the MEK is a Foreign Terrorist Organization "likely * * * would have been different" if the defendants here could have challenged it. Later, she appears to analogize the designation of the MEK to a hypothetical situation in which the Secretary of State would designate Greenpeace, Solidarity, or the African National Congress.

These claims are strange given that, in its most recent brief to the D.C. Circuit, the MEK itself says that, during the period relevant to the 1999 designation, it carried out a bombing and mortar attack on the Iranian Islamic Revolutionary Prosecutor's Office in June 1998; assassinated the Iranian Minister of Prisons and his bodyguards in October 1998; attacked and killed the Deputy Chief of the Iranian Joint Staff Command, who was the personal military adviser to the Iranian Supreme Leader, in April 1999; and conducted mortar attacks in June 1998 on the Central Command Headquarters of the Islamic Revolutionary Guards Corps and the Defense Industries Organization in Tehran. See Brief of Petitioner, in People's Mojahedin Organization *15 of Iran v. Department of State, No. 01-1465, at 32-34. These are not simply the conclusions of the Secretary of State; they are the MEK's own words. And, these attacks plainly fit within Congress' statutory definition of terrorist activity. See 8 U.S.C. 1182(a)(3)(B)(iii).

In addition, as mentioned earlier, in that same filing, the MEK told the D.C. Circuit (at 35-38) that it attacked (and in some instances killed) Iranian officials in 2000 and 2001, including a mortar attack in which the MEK actually targeted Iranian Supreme Leader Khamenei.

Similarly, in its appeal to the D.C. Circuit of the 1997 designation, the MEK did not dispute that it employed violent means to obtain its objectives. Indeed, it openly admitted maintaining an "army" and carrying out "missions" within Iran "against military and strategic targets." See Brief of Petitioner, in People's Mojahedin Organization of Iran v. Department of State, No. 97- 1648, at 27.

Despite these court statements by the MEK, Rahmani asserts that she could show that the MEK does not engage in terrorism, and that she and the other defendants thus have a constitutionally protected right to provide it with money. If this argument were indeed made with regard to an entity such as Greenpeace or Solidarity, it might at least have some credibility. But in connection with the MEK, the contention is obviously absurd.

*16 Moreover, defendants cannot reasonably contend (Br. 50) that the MEK is not a threat to the national security of the United States when that organization carries out these attacks, such as trying to assassinate the Supreme Leader of Iran, as it claims a right supposedly protected by the United States Constitution to raise money in this country - money that then could be used by the MEK to accomplish such a mission. In any event, the district court here would not be able properly to determine if the MEK is or is not actually a threat to the national security of the United States. As the D.C. Circuit correctly ruled in People's Mojahedin Organization of Iran v. Secretary of State, 182 F.3d 17, 23 (D.C. Cir. 1999), cert. denied, 529 U.S. 1104 (2000), this type of decision cannot be made by the courts - it is beyond the judicial function.

Given the MEK's description of its activities, the defendants here simply cannot escape the common sense principle made clear by the Supreme Court that an individual is entitled to a hearing only when there is a reason for such a hearing. See Codd v. Velger, 429 U.S. 624, 627 (1977). There is thus no point to a hearing here on the terrorist nature of the MEK after that entity has already expressly told the D.C. Circuit that it tries to, and does, assassinate high-level Iranian officials with bombs and mortars.

c. Furthermore, contrary to Rahmani's argument (Br. 20), the issue in this case does not change simply because the MEK may engage in some political activity, and *17 support for it thus can have a "political" element to it. Obviously, the Executive makes decisions of a political/policy nature when he decides to impose an embargo on dealings with, or material support for, foreign entities such as Cuba, Libya, the Taliban, or Hamas. In the international relations sphere, the Executive is free to make these types of "political" judgments. See DKT Memorial Fund, Ltd. v. Agency for International Development, 887 F.2d 275, 289-90 (D.C. Cir. 1989) ("To hold that the United States government cannot make viewpoint-based choices in foreign affairs would be unthinkable").

Thus, the very heart of defendants' main argument is wrong; they do not have a First Amendment right to provide material support to foreign entities in the absence of a court determination that such entities are engaged in terrorism. Instead, the political branches can decide, as they did in the Antiterrorism Act of 1996, to criminalize the provision of material support to a foreign organization designated as terrorist by the Secretary of State. Congress did not have to do so, but it provided limited and exclusive judicial review of such designations in the D.C. Circuit, when sought by the entity itself.

As we pointed out in our opening brief (at 26-28), there are compelling reasons for Congress to have centralized review authority over those designations in that court and to have restricted its timing and scope. Major problems for enforcement of *18 the Antiterrorism Act's goal of limiting terrorist fundraising in the United States would arise if each district court in which a prosecution is brought were free to override the decision of the Secretary, especially if that decision has already been reviewed and upheld by the D.C. Circuit, and enforced in prior terrorist financing prosecutions.

Further, for foreign relations purposes, there is an obvious need for finality once Foreign Terrorist Organizations designations are made. See United States v. Bozarov, 974 F.2d 1037, 1044 (9th Cir. 1992) ("the need for uniformity in the realm of foreign policy is particularly acute; it would be politically disastrous if the Second Circuit permitted the export of computer equipment and the Ninth Circuit concluded that such exports were not authorized by the [statute]"), cert. denied, 507 U.S. 917 (1993). Yet, under defendants' argument, district courts around the United States would at different times be making potentially conflicting decisions about whether a terrorist organization designation would be valid or not.

Rahmani tries to minimize the grave harm her argument would cause by asserting (Br. 15) that its impact would be limited because the Government could still prosecute those who violate 18 U.S.C. 2339A. But that statute covers situations in which an individual provides material support while knowing or intending that it is to be used in carrying out various specified crimes. This provision does not stop the *19 individual who wants to give money to a group such as Hamas, which engages in terrorism as well as actions of a humanitarian nature, but neither intends for his support to help terrorism nor knows that it will be used for that purpose.

Congress decided to address this problem, finding that money is fungible, and that groups such as Hamas can in actuality use cash in any way they choose, regardless of the desires and intent of the donor far away in the United States. And, money given to Hamas for one purpose simply frees other funds to be used for terrorism. See Humanitarian Law Project, 205 F.3d at 1136 (recognizing Congressional findings in the Antiterrorism Act); H.R. Rep. No. 104-383, 43-45 (1995).

Accordingly, Section 2339B serves a very important anti-terrorism purpose that is not accomplished through Section 2339A, Rahmani's argument here thus indeed would be very damaging to antiterrorism efforts, if accepted.

d. Rahmani nevertheless argues (Br. 23) that her position is compelled by McKinney v. Alabama, 424 U.S. 669 (1976), where the Court held that a prior labeling of material as obscene could not bind a defendant in a later criminal prosecution when he argued that the prosecution violated his First Amendment free speech rights. The Court ruled that the defendant must have an opportunity in some *20 forum to litigate the nature of the material at stake before he could be convicted of selling obscene material. Id. at 676-77.

McKinney does not control here for two reasons. First, obscenity raises a special issue because, as McKinney argued in his defense, its definition varies "according to contemporary community standards." Id. at 673. Therefore, a determination of obscenity in a prior civil proceeding elsewhere in a state could not determine that the material was obscene in the specific place of prosecution.

Second, McKinney had nothing to do with foreign relations and national security. Consequently, the precedents discussed above had no relevance - there was no Executive determination compelling deference. To the contrary, the question at issue was in McKinney a quintessentially judicial one that the Supreme Court had held must be made by the courts in the many varying circumstances in which it arises.

Thus, the situation in McKinney starkly contrasts to the question of whether the MEK is a terrorist entity threatening the national security of the United States, considering its activities in Iraq, Iran, and elsewhere around the globe. That determination involves intelligence information (often classified), and sensitive political, foreign relations, and national security issues. As we pointed out earlier, this judgment is one that must be made by the political branches as part of a unified national antiterrorism and foreign policy, which differs sharply from the *21 determination about whether particular material is obscene, requiring a judicial inquiry based often on the specific nature of the material and uniquely localized considerations.

In light of the foregoing, defendants' First Amendment argument should be rejected.

B. The Defendants Have No First Amendment Right to Impose "Due Process Protections" On the Designation Process

In the alternative, the defendants argue (Br. 32-40) that they have a First Amendment right not to be tried on the basis of a designation under Section 2339B unless that designation has sufficient due process protections to ensure reliability. But this argument fails as well, in light of the foreign affairs powers of the United States.

1. Foreign countries such as Iraq, Iran, and North Korea have no due process rights, and the political branches can of course sanction them for perceived misbehavior, such as supporting terrorists or engaging in weapons proliferation, without affording them a hearing or other process. See People's Mojahedin, 182 F.3d at 22 ("No one would suppose that a foreign nation had a due process right to notice and a hearing before the Executive imposed an embargo on it for the purpose of coercing a change in policy").

*22 Similarly, as defendants acknowledge (Br. 37, 40), the United States can sanction many other dangerous foreign entities without affording them a hearing or other process, and in fact the overwhelming majority of designated Foreign Terrorist Organizations clearly lack any constitutional due process rights. But the upshot of the defendants' argument is that., while Iraq or Libya or al-Qaeda may not have any due process rights, the United States cannot enforce sanctions against U.S. persons who violate embargoes on dealings with these entities unless either the entities or their material supporters and suppliers in the United States receive notice of the proposed sanction, a "meaningful" opportunity to be heard, arid "meaningful" judicial review.

In other words, according to defendants, the United States could not prosecute or punish U.S. persons for supplying funds to al-Qaeda in violation of sanctions imposed on that group for the attacks of September 11, 2001, unless the Government provided notice and a hearing to al-Qaeda and/or al-Qaeda supporters in the U.S. on whether al-Qaeda was really responsible for the attacks, together with "meaningful" judicial review.

The absurdity of this proposition hardly needs explication; simply put, there are no such constraints on the ability of the United States to conduct foreign policy and to take effective measures against foreign entities it perceives as hostile. See, *23 e.g., Regan v. Wald, 468 U.S. at 243 (upholding restrictions on travel to Cuba against constitutional attack by American citizens because "[i]n the opinion of the State Department," Cuba had provided widespread support for violence and terrorism) (emphasis added); ibid. (noting traditional deference to Executive judgment in the vast external realm); Argument A, supra (demonstrating that there is no constitutional right to provide money to foreign entities deemed by the political branches to pose a threat to our national security, and no right to influence or challenge that decision except through the political process).

2. Although defendants' theory is clearly wrong as a basic matter of constitutional law, it is particularly absurd here. As we pointed out above, it is both undisputed and indisputable that the MEK engages in violent acts that fit the literal statutory definition of "terrorist activity." Even assuming, contrary to fact, that under some circumstances MEK's U.S. supporters could be entitled to due process safeguards in the designation process on the issue of whether the MEK actually engages in violence, no one has a constitutional right to a hearing before the Secretary of State on whether an avowedly violent foreign group should be considered a liberation movement rather than a terrorist group, or whether its violence damages or advances U.S. national security. This sort of issue is clearly a political question, and its resolution is one for the political branches and the political process. See *24People's Mojahedin, 182 F.3d at 23 (whether MEK's terrorist activity threatens U.S. national security is nonjusticiable). Thus, defendants' argument for due process protections is particularly mistaken in the context of this case.

3. Defendants' argument is also at odds with this Court's decision in Humanitarian Law Project, which specifically rejected the claims of would-be material supporters to a designated group that the designation process did not adequately protect their First Amendment rights. See Humanitarian Law Project, 205 F.3d at 1136-37. Furthermore, it is irrelevant that Humanitarian Law Project was a pre-enforcement challenge to the statute rather than a criminal prosecution (see Br. at 32), since the plaintiffs there claimed that they were being denied the ability to engage in protected First Amendment activity, and would have been entitled to appropriate relief if that were true.

C. Defendants' Due Process Claims Are Meritless

The arguments we have made rebutting defendants' First Amendment claims apply as well to their argument (Br. 45-50) that Section 1189(a)(8) also violates their ostensible due process right to personally obtain judicial review of the MEK's designation. The Supreme Court cases we have cited above make clear that defendants have no constitutional right to provide money to foreign entities in the face of a decision by the political branches to prohibit such conduct, and no right to *25 influence or challenge that decision except through the political process. And, as we have pointed out, there is in fact no dispute about the violent character of the MEK, which is openly and avowedly attempting to overthrow a foreign government and assassinate its officials.

In any event, the defendants' due process argument (Br. 45-50) is simply wrong even in a domestic context, for it posits a free-floating due process right on the part of criminal defendants to challenge prior administrative determinations to which they were not a party, even where, as here, the subject of the administrative proceeding sought and received judicial review. This argument distorts the narrow holding of United States v. Mendoza-Lopez, 481 U.S. 828 (1987), beyond all recognition, and is flatly inconsistent with the binding Circuit precedent cited in our brief (see our opening brief at 29-35).

Furthermore, defendants' attempts to distinguish United States v. Bozarov, 974 F.2d at 946, are mistaken. Regardless of whether the defendant there had a right to seek administrative review of a license denial (see Br. at 30 note 10), the administrative denial of a license was not subject to judicial review on the merits. See Bozarov, 974 F.2d at 1039 & 1044-45. Moreover, just as the Bozarov defendant's individual rights were not involved in the decision to place a particular commodity on the export control list, so too the individual rights of the defendants *26 in this case were not involved in the MEK designation decision, even though in both cases the defendants' subsequent actions exposed them to criminal liability.

D. The 1999 Designation Of The MEK Can Validly Serve As A Predicate For Criminal Prosecution Under The Antiterrorism Act.

Defendants also argue (Br. 40-45) that the prosecution here cannot proceed because the D.C. Circuit erred in declining to vacate the 1999 designation of the MEK, and instead leaving that designation in place pending the outcome of the remand to the Secretary of State. See National Council of Resistance of Iran v. Department of State, 251 F.3d 192, 209 (D.C. Cir. 2001). Thus, defendants urge this Court to ignore the consequences of the D.C. Circuit's ruling.

1. Defendants' argument is clearly wrong as a statutory matter, and their recitation of Congressional intent is highly selective and incomplete. As a statutory matter, it is clear that the elements of the criminal case before the district court included only the fact of the designation. See 18 U.S.C. 2339B(a) & (g)(6). Because the D.C. Circuit did not set aside the designation, this element was not affected. Thus, there is no impediment to prosecution and no warrant for dismissal of the indictment.

Furthermore, it is equally clear that Congress entrusted designation appeals exclusively to the D.C. Circuit, and did not intend for each district court handling *27 Section 2339B prosecutions across the country to second-guess the D.C. Circuit and opine on whether the court of appeals with exclusive statutory jurisdiction over designation decisions had erred in its designation rulings. See 8 U.S.C. 1189(a)(8). Thus, the district court in this case did not comport with Congress' intent when it second-guessed the D.C. Circuit's decision to leave an allegedly flawed designation in place while remanding to remedy the alleged flaw. See Humanitarian Law Project, 205 F.3d at 1137 (challenge to the judicial review scheme must be raised before the D.C. Circuit).

2. In any event, the D.C. Circuit did not err in declining to set aside the 1999 designation of the MEK.

Defendants claim that, based on the use of its word "shall," the Antiterrorism Act mandates that, if the D.C. Circuit finds that a designation was "contrary to constitutional right," it must set it aside, and cannot allow the designation to stand while any defects are corrected. See 8 U.S.C. 1189(b)(3) (the court "shall hold unlawful and set aside" such a designation).

This argument is mistaken because substantial precedent makes clear that Congress' use of the word "shall" does not automatically mean "must." Rather, "in determining the proper interpretation in a statute of the words 'may' and 'shall' it is the intention of the legislature * * * which should be controlling and * * * no *28 formalistic rule of grammar or word form should stand in the way of carrying out this legislative intent. Thus, in a proper case 'shall' may properly be construed as permissive." United Hospital Center, Inc. v. Richardson, 757 F.2d 1445, 1453 (4th Cir. 1985). Accord Gray-Bey v. United States, 201 F.3d 866, 869 (7th Cir. 2000) ("the use of 'shall' in the Constitution is not always or necessarily understood to be mandatory").

In a ruling that is quite instructive here, the Supreme Court in Hecht Co. v. Bowles, 321 U.S. 321 (1944), rejected an argument very similar to Rahmani's. There, the Emergency Price Control Act of 1942 provided that, if the Administrator of the statute showed that a person had committed a violation, an injunction or other order "shall be granted" by the court. Yet, the Supreme Court denied an argument that the issuance of such an order was mandatory, holding that the courts retained discretion to withhold relief in an appropriate case. Id. at 328. Accord Brock v. Pierce County, 476 U.S. 253 (1986) (Secretary of Labor does not lose authority to act after statutory deadline has passed, despite use of the word "shall").

As the Seventh Circuit explained in Gray-Bey, 201 F.3d at 868, the federal courts generally have the power to exercise judgment with regard to the appropriate remedy. It cited the "inherent equitable powers of the federal courts * * * to override [arbitrariness] when compelling circumstances demand that action. * * * [Our view] *29 reflects a reconciliation between the commands of legislation and the exigencies of judicial decisionmaking that is well grounded in the law."

Quite recently, Judge Posner, sitting by designation, applied this principle in Smithkline Beecham Corp. v. Apotex Corp., 247 F. Supp.2d 1011, 2003 WestLaw 728889 (N.D. Ill. March 3, 2003). He pointed out that precedents establish that "shall" can mean "may." For equitable reasons, he therefore declined to enter injunctive relief in that case, even though the applicable statute provided that the court "shall" do so. Id. at *36.

As we pointed out in our opening brief (49-50), there have been numerous compelling instances in a variety of circumstances in which the Supreme Court has found unconstitutional action, but has not invalidated that action. Rahmani asserts (Br. 43-44) that these examples are all irrelevant because they did not involve cases in which criminal prosecutions proceeded on the basis of unconstitutional action. But, as we also pointed out in our opening brief (at 51), in Lewis v. United States, 445 U.S. 55 (1980), the Supreme Court plainly held that a criminal conviction can be based on a predicate that is assumed to be constitutionally invalid.

3. Rahmani also relies (Br. 43) on the decision in Bouie v. City of Columbia, 378 U.S. 347, 352 (1964), for her argument, claiming that this precedent prohibits constructions of criminal statutes that could not have been anticipated in advance *30 from being applied in criminal cases. Bouie involved a situation in which the limited wording of a criminal statute was clear, but the South Carolina Supreme Court in its decision expanded the statute in such a way as to cover conduct that was not criminal under the language of the statute at the time it was committed. This scenario has no relevance here because, when Rahmani and the other defendants provided money to the MEK, the Antiterrorism Act's clear terms prohibited such action, and either the Secretary's 1997 designation of the MEK or the Secretary's 1999 designation of the MEK was in effect. There was thus no expansion of the definition of criminal activity after the fact.

In this instance, the D.C. Circuit exercised its discretion, in the interests of national security and foreign relations, to leave the 1999 designation in place, as the Secretary of State conducted further proceedings on remand. National Council of Resistance of Iran, 251 F.3d at 209. That decision was fully within the D.C. Circuit's authority, and this Court should reject defendants' suggestion that it should override the D.C. Circuit's order. [FN2]

FN2. As noted in the prior briefs, on remand, the Secretary of State reaffirmed the 1999 designation of the MEK. That entity has challenged this decision in the D.C. Circuit, and that case was argued on January 17, 2003.

4. Rahmani nevertheless argues (Br. 39) that giving effect to the D.C. Circuit's decision providing for a remand would constitute a prohibited ex post facto law. This *31 argument is obviously wrong because, as discussed above, the Antiterrorism Act's prohibition on giving material support to a Foreign Terrorist Organization was effective before the conduct alleged in the indictment occurred, and the 1997 and 1999 designations of the MEK were also in place before the respective conduct took place. Defendants are not in any sense being held criminally responsible for conduct that was defined as criminal only after it happened.

E. The 1997 MEK Designation Is, In Any Event, Clearly Valid.

This argument leads to our final point. Rahmani also asserts (Br. 45 n. 16) that the 1997 designation is flawed for the same reasons as the 1999 designation. But this argument makes no sense. As we pointed out in our opening brief, the 1997 MEK designation was fully upheld by the D.C. Circuit, and there were no due process problems with that designation. See People's Mojahedin, 182 F.3d at 17-25. Thus, that designation clearly can serve as the basis for a valid prosecution.

*32 CONCLUSION

For the foregoing reasons and those stated in our opening brief, the district court's judgment dismissing the indictment should be reversed.