The 46-page opinion of the court said the EO lacks standards for designating terrorist organizations, giving the President "unfettered discretion", so that designations could be "for any reason, including for.... associating with anyone listed... or for no reason." The opinion also struck down provisions allowing designation of people and groups "otherwise associated" with terrorism because the EO "contains no definable criteria for designating individuals and groups... [and] imposes penalties for mere association." The Center for Constitutional Rights, which acted as counsel in the case, issued a press release, in which Georgetown Law professor David Cole said, "The court's decision confirms that even in fighting terror, unchecked executive authority and trampling on fundamental freedoms is not a permissible option." The Justice Department says it has not yet decided on whether to appeal the ruling.

The court's opinion notes that PKK and LTTE both represent groups seeking self determination in countries where plaintiffs allege they have been subjected to human rights abuses and discrimination. Their activities include political organizing and advocacy, social services, humanitarian aid, and defending people from human rights abuses. HLP brought the case because the law prohibits it from engaging in transactions with the groups, since they have been designated as terrorist organizations. HLP wishes to provide:

• training in human rights advocacy and peacemaking negotiations
• legal services to establish institutions that could provide humanitarian aid and negotiate a peace agreement
• direct humanitarian aid to the PKK and LTTE
• engineering and technical services to help rebuild infrastructure in areas devastated by the tsunami of 2004
• psychiatric counseling for tsunami survivors

EO 13224's power to designate people and organizations as "Specially Designated Global Terrorists" comes from the International Emergency Economic Powers Act (IEEPA), as amended by the USA Patriot Act, and the Anti-Terrorism and Effective Death Penalty Act of 1996. These acts authorize the President to declare an emergency with respect to "grave acts of terrorism and threats of terrorism." The laws give the President authority to make regulations to carry out the law, and he in turn has delegated power to make designations to the Secretary of the Treasury. This gives Treasury power to freeze and seize the assets of all persons or groups determined "...to assist, sponsor, or provide financial, material, or technological support for... such acts of (foreign) terrorism or those persons listed in the Annex to this order...or to be otherwise associated with those persons." The original Annex listed 27 persons and organizations, and now includes over 430 entities.