When a client challenges sanctions in a U.S. court, the workhorse is usually the Administrative Procedure Act (APA): the court asks whether the decision of the Office of Foreign Assets Control (OFAC) was arbitrary, unexplained, or procedurally defective. That tool has a ceiling. In matters touching national security and foreign affairs, courts give OFAC substantial deference, and an “arbitrary and capricious” argument alone is often not enough.

So seasoned litigants rarely stop at the APA. Alongside the administrative argument, they plead constitutional claims against OFAC, theories grounded directly in the U.S. Constitution. Three recur most often: a denial of due process, a violation of the First Amendment, and action beyond OFAC’s statutory authority (ultra vires). This article takes each in turn and explains when it actually works.

Why the APA alone is often not enough

APA review is built around the administrative record. The court does not substitute its judgment for OFAC’s or try the case afresh; it asks whether the agency relied on relevant facts and articulated its reasoning. In sanctions cases that baseline is layered with deference to the executive in foreign affairs. The practical result is that winning purely on “arbitrary and capricious” grounds is hard: OFAC needs only to show a minimally rational link between the facts and the designation.

Constitutional claims against OFAC shift that balance. A constitutional question is a question of law, which a court resolves with less deference, and sometimes none. These claims also open doors the APA does not: arguments about classified evidence, about the suppression of protected speech, about action outside the statute. That is why a well-pleaded lawsuit against OFAC almost always blends administrative and constitutional theories. How the APA challenge itself is built, and what the court examines, we cover separately.

The threshold question: who actually has constitutional rights

Before raising constitutional claims against OFAC, there is a gating question: Does the Constitution protect this plaintiff at all? It is not technical, but a fork that drives the entire strategy.

U.S. citizens and lawful residents hold constitutional rights without question. Foreign companies and individuals hold them only if they have “substantial connections” to the United States. The Supreme Court framed this in United States v. Verdugo-Urquidez (1990): a foreign person with no meaningful presence, property, or activity in the country generally falls outside constitutional protection. Lower courts have applied the same logic in 32 County Sovereignty Committee v. Department of State (D.C. Circuit, 2002): a foreign organization with no U.S. presence or property was held to have no rights under the Fifth or First Amendments.

For the firm’s clients, the takeaway is concrete. A foreign petitioner with blocked funds in U.S. banks, a U.S. office, a subsidiary, or another durable tie usually has a footing to invoke the Constitution. One without any such connection more often has to lean on ultra vires and the APA, where the “rights” threshold does not apply.

Procedural due process under the Fifth Amendment

The Fifth Amendment bars the government from depriving a person of property without due process of law. Blocking assets is exactly a deprivation of control over property, so due process applies to sanctions cases directly. The fight is usually not whether the process is owed, but whether the process given was enough.

Courts accept that, faced with a national-security threat, OFAC may block first and provide process afterward. But that process must have substance. The case law converges on a few requirements: the petitioner must be told the reasons for the designation in enough detail to respond; must be given access to the unclassified record; and must have a genuine chance to rebut. In National Council of Resistance of Iran v. Department of State (D.C. Circuit, 2001), the court held that notice and an opportunity to be heard are required. In Al Haramain Islamic Foundation v. Treasury, the Ninth Circuit found a violation where OFAC relied on classified material without giving the petitioner an adequate unclassified summary.

The sharpest problem is classified evidence. OFAC may submit it to the court in camera, but that collides with the petitioner’s right to see and answer the case against it. This is where constitutional claims against OFAC bite hardest: a plaintiff can demand an unclassified summary, attack the sufficiency of the notice, and show that, cut off from the evidence, it never had a real chance to defend itself. A close cousin is the void-for-vagueness argument: that the designation criteria are so open-ended that the person cannot tell what conduct drew the sanction.

The First Amendment: speech and association

The First Amendment protects speech and association, and sanctions can reach both. Where a designation rests on a person’s statements, publications, membership, or affiliations, a First Amendment claim becomes available. So do restrictions that keep a blocked person from retaining counsel, publishing, or maintaining protected communication.

This route is the hardest of the three. In Holder v. Humanitarian Law Project (2010), the Supreme Court upheld a ban on “material support” to designated organizations even in the form of coordinated expert advice, recognizing broad government authority in the security context. Yet the same Court confirmed that independent advocacy, not coordinated with the designated party, stays protected.

The International Emergency Economic Powers Act (IEEPA), as amended by the Berman Amendment, exempts informational materials and their dissemination from sanctions regulation, reflecting constitutional constraints rooted in the First Amendment. Real arguments are built on these lines: sanctions cannot punish protected speech and cannot extend to what Congress expressly placed off-limits.

Ultra vires and the limits of IEEPA

Strictly speaking, ultra vires is not a constitutional ground but a statutory one: it argues that OFAC exceeded the authority granted by IEEPA and the underlying executive order. Procedurally, though, it is pleaded beside the constitutional claims and reinforces them, so it belongs in the same discussion.

OFAC’s authority is broad but bounded. IEEPA lets the executive block property tied to a declared emergency, but does not regulate what the statute expressly excludes: personal communications, informational materials, and, on certain conditions, humanitarian donations. An ultra vires claim says a particular designation or interpretation does not fit those limits: the person does not meet the executive order’s criteria, or OFAC has stretched sanctions into territory IEEPA does not cover.

The Supreme Court has historically read IEEPA powers expansively: Dames & Moore v. Regan (1981) is the touchstone. So, ultra vires rarely wins head-on. Its value is surgical: when a designation plainly departs from the text of the order, or OFAC claims authority past the statute’s edges, a court can step in even amid general deference to the executive.

Pleading these grounds alongside an APA claim

In practice, these theories do not compete; they stack in a single complaint. The APA sets the baseline review of the agency decision; due process attacks procedural shortfalls and the handling of classified evidence; the First Amendment shields speech and association; ultra vires marks the outer edge of OFAC’s power. Together, they give a court several independent paths to the same result – vacating or reconsidering the designation.

Two practical points matter here. First, the forum: suits against OFAC on these grounds are usually filed in the U.S. District Court for the District of Columbia, and why that court is the venue of choice we have addressed separately. Second, sequence: constitutional claims against OFAC are almost always stronger when they follow an exhausted administrative delisting petition. The agency’s denial or its silence builds the record on which the court’s review then rests.

The bottom line

Constitutional claims against OFAC are not a fallback but a reinforcing layer of strategy. They move part of the dispute from “was the agency’s decision reasonable” to “were the plaintiff’s rights respected and did OFAC stay within the law,” where courts are far less inclined to defer automatically. The decisive variables are the threshold question of whether constitutional rights attach at all, and the quality of the administrative record built before suit.

A sound strategy does not choose between the APA and the Constitution; it joins them. The attorneys at Fesenko, P.C. Law Offices assess which grounds fit a given client and frame the case so the administrative and constitutional arguments work together.