Bal v. U.S. Department of the Treasury
- Ona Wang
- 1:21-cv-04702
- U.S. District Court · Southern District of New York
- 9
In Bal v. Treasury, Judge Wang dismissed most claims but allowed a limited challenge to OFAC redactions to continue.
John Bal’s constitutional claim and most FOIA claims were dismissed; only his challenge to redactions in records produced by OFAC remained.
What happened
In Bal v. U.S. Department of the Treasury, John Bal, representing himself, alleged that the Office of Foreign Assets Control blocked a $400 payment for a Cuban apartment and delayed responding to his request for records. The payment was eventually released, and OFAC later provided records in response to his Freedom of Information Act request.
Bal asserted a constitutional claim against federal officials and claims under the Freedom of Information Act. The court dismissed the constitutional claim because the court would not extend the judge-made damages remedy used in similar cases to this new setting, particularly because OFAC offered a process for seeking release of blocked funds. The court also dismissed claims against individual officers and claims seeking damages, and found most claims about the delayed records moot after OFAC produced them.
Judge Wang denied the motion to dismiss as to Bal’s challenge to redactions in the records OFAC produced, and granted the motion in all other respects. The case therefore continued only on that redaction issue.
The detailed version
- Bal v. U.S. Department of the Treasury · No. 1:21-cv-04702
- Ona Wang
- Oct. 5, 2023
Background
John Bal sued the U.S. Department of the Treasury, the Office of Foreign Assets Control (OFAC), and three OFAC officials: Jason E. Prince, Marshall Fields, and Charles Bishop. Bal represented himself. He alleged that OFAC blocked a payment to Danays Drake for renting an apartment in Cuba from November 3 to December 3, 2018. The payment was $400 and was made through PayPal. PayPal held the payment for more than two years. After Bal asked OFAC to release the funds, OFAC initially denied the request because the payment involved the interest of a “sanctions target.” On reconsideration, Bishop reversed that decision and authorized PayPal to release the payment. PayPal later returned $393.07 to Bal.
Bal also submitted a Freedom of Information Act (FOIA) request to OFAC on May 15, 2020, seeking records and information about the blocked payment. OFAC did not respond before Bal filed his amended complaint. OFAC later provided records to Bal on November 5, 2021, but the records contained redactions.
Bal brought a constitutional claim under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, which can sometimes allow damages claims against federal officials for constitutional violations. He characterized the constitutional claim as a Fifth Amendment procedural due-process claim. He also brought FOIA claims. Bal had voluntarily withdrawn claims under the Federal Tort Claims Act concerning interference with his contract.
Rule 12(b)(6) motion
The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. On such a motion, the court determines whether the complaint alleges enough facts to present a plausible claim. Because Bal represented himself, the court read his allegations liberally, while still not accepting unsupported legal conclusions as facts.
Constitutional claim
The court dismissed Count III. It held that Bal’s Fifth Amendment due-process claim arose in a new context for purposes of Bivens. The claim involved a different constitutional theory and different officials and circumstances from the limited categories in which the Supreme Court had previously recognized a Bivens remedy. The court also found a significant risk of judicial interference with the functioning of the executive branch because the claim concerned OFAC, its regulations, and national-security-related sanctions.
The court further held that an alternative process was available: a person whose funds are blocked can ask OFAC to unblock and release them. Bal had used that process. The court treated the availability of that process as a special reason not to create a new Bivens remedy. The opinion also identified national-security concerns as an additional reason for caution.
FOIA claims
The court dismissed Bal’s FOIA claims against Fields and Prince because FOIA permits claims against a federal agency, not individual federal officers. It also dismissed Bal’s request for damages because FOIA does not provide damages for an agency’s failure to produce documents.
The court held that Count V was moot because OFAC had responded to the FOIA request and provided Bal’s records. A claim is moot when there is no longer a live dispute that the court can effectively remedy. The court also found Count IV moot except to the extent Bal challenged the redactions in the records OFAC produced. The court declined to enter a declaration that OFAC’s earlier failure to respond violated FOIA because the records had later been provided.
Disposition
The court stated that the defendants’ motion to dismiss was granted in part and denied in part. In the conclusion, it denied the motion as to Claim IV only to resolve Bal’s challenges to the redactions in documents already produced. It granted the motion in all other respects. The parties were directed to discuss the redactions and submit a joint status letter by November 1, 2023.
Who was affected
Bal’s constitutional claim and most of his FOIA claims were dismissed. The case remained open only for his challenge to redactions in records OFAC had produced. The opinion does not state the final outcome of that remaining issue.
Read the full 9-page opinion on CourtListener, the free public archive maintained by the Free Law Project.