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Barr v. United States Department of Justice

decided: May 11, 1987.

SHELDON BARR, PLAINTIFF-APPELLANT,
v.
UNITED STATES DEPARTMENT OF JUSTICE, PHILIP T. WHITE, R. TIMOTHY SLATTERY, ROBERT ABRAM, ORESTES J. MIHALY, MARK A. TEPPER AND REBECCA MULLANE, DEFENDANTS-APPELLEES



A defendant in a state criminal proceeding, whose Swiss bank accounts had been frozen at the request of the American government pursuant to its mutual assistance treaty with Switzerland, sought a preliminary injunction against the freeze order. The United States District Court for the Eastern District of New York (Nickerson, J.) denied the preliminary injunction.

Kaufman and Cardamone, Circuit Judges and Bonsal, District Judge.*fn*

Author: Kaufman

KAUFMAN, Circuit Judge:

As developments in modern technology have made it increasingly easy for would-be wrongdoers to carry out their plans on an international scale, the countries of the world have sought stronger cooperation in combatting their schemes. In the case before us, an American citizen subjected to the procedures of one such mutual assistance arrangement asks us to apply the fundamental principle that, no matter how laudable its purposes, the actions of our government are always subject to the limitations of the Constitution. We do so unhesitatingly, while at the same time finding that the complaining party before us has failed to make a substantial showing that his rights were violated.

FACTS

Appellant Sheldon Barr, an attorney, has for several years been the subject of a fraud investigation by the Attorney General of the State of New York. See generally Barr v. Abrams, 810 F.2d 358 (2d Cir. 1987).

On April 29, 1986, Barr was indicted by a New York grand jury for conspiracy, fraud and grand larceny. The grand jury charged in substance that Barr and others had engaged in a scheme to defraud the public by misrepresenting the value of energy conservation devices that they leased to investors. The state claims that this scheme may have defrauded as many as 695 persons out of a total of $13 million.

Believing that Barr's portion of the fruits of the alleged fraud had been deposited in Swiss bank accounts, the New York Attorney General's office requested the United States Department of Justice to transmit to Switzerland a request pursuant to this country's Treaty with the Swiss Confederation on Mutual Assistance in Criminal Matters, 27 U.S.T. 2019, T.I.A.S. No. 8302 (May 25, 1973), seeking a freeze on all bank accounts held by Barr or companies under his control. The Department of Justice complied, transmitting the request on April 30, 1986.

The Swiss government acceded to the request, immobilizing funds in excess of $2 million. While the precise date on which the Swiss authorities acted is unclear, and Barr claims that he first learned of the freeze order when notified of it by one of his Swiss banks, it is undisputed that he retained Swiss counsel and filed objections to the freeze order by letters dated June 5, June 30, and July 22, 1986. In response, the Swiss Federal Police Administration Bureau issued an order dated July 24, 1986 explaining why his objections were insufficient under the Treaty. Barr appealed this order to the Swiss Federal Court. On January 21, 1987, that court vacated the order of the Police Administration Bureau and remanded the proceeding. After remand, the bureau on March 16, 1987 issued another order rejecting Barr's objections to the freeze. The order noted that Barr again had a right of appeal to the Swiss Federal Court.

Meanwhile, on July 22, 1986, Barr commenced the present action in the United States District Court for the Eastern District of New York against the state and federal officials involved in making the request to Switzerland. Alleging that the freeze of his assets was unauthorized by the Treaty and in violation of his constitutional rights, Barr sought an injunction directing the United States to withdraw its request, as well as monetary relief.

On October 15, 1986, Judge Eugene H. Nickerson denied Barr's motion for a preliminary injunction. 645 F. Supp. 235. Barr appeals.

Discussion

A. The Applicable Standard

Judge Nickerson held that, because the injunction Barr sought would interfere with the executive branch's conduct of foreign affairs, the application must be considered under particularly stringent standards, citing Sampson v. Murray, 415 U.S. 61, 83-84, 39 L. Ed. 2d 166, 94 S. Ct. 937 (1974); Adams v. Vance, 187 U.S. App. D.C. 41, 570 F.2d 950, 954-55 (D.C. Cir. 1978). Since we conclude that Barr failed to make even the ordinary showing required for the grant of a ...


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