In a shocker of an opinion, the US District Court for the Northern District of Ohio ruled that OFAC cannot freeze the assets of an organization suspected of terrorism ties without probable cause.

In the opinion handed down on Tuesday Judge James Carr ruled that the government must tell the organization the basis for the asset freeze and give the organization the opportunity to defend itself.

The ruling came in the case of Kindhearts for Charitable Humanitarian Development, which sued the federal government in 2008 after the US Treasury Department’s Office of Foreign Assets Control (OFAC) froze its assets in 2006, alleging it was providing support to US-designated terrorist group Hamas. The American Civil Liberties Union (ACLU) brought the suit on plaintiffs’ behalf.

Kindhearts argued that OFAC’s asset freeze, investigation, and refusal to allow KindHearts to dispute OFAC’s findings were arbitrary and capricious, and violated KindHearts’ First, Fourth, and Fifth Amendment rights.

While it has yet to be determined whether or not the government will appeal, I have to think that they will and that this decision will be overturned. This opinion files in the face of every piece of legal precedent I have seen on the matter. It is pretty much well established that OFAC, under the umbrella of national security concerns, can freeze assets in the manner which took place here.

I would be shocked to see this decision stand. Shocked but extremely happy. OFAC does seems to enjoy a certain “because we say so” right, that is frustrating to deal with. Leveling the playing field would not be a bad thing at all. While I believe in OFAC’s core mission, I think their regulations and policies need a major overhaul.

My guess is that while Kindhearts and the ACLU won the battle, the war is far from over.

The opinion, all 100 pages of it, is found here.