ORAL ARGUMENT SCHEDULED JANUARY 10, 1997

IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

____________________________________

No. 96-5121

PHILIP R. KARN, Jr.,

Appellant,

v.

U.S. DEPARTMENT OF STATE, and

THOMAS E. McNAMARA,

Appellees

______________________________________________

BRIEF OF THE APPELLANT PHILLIP R. KARN, JR.

______________________________________________

Kenneth C. Bass, III, Bar No. 52985

Thomas J. Cooper, Bar No. 213215

Venable, Baetjer, Howard & Civiletti, LLP

1201 New York Avenue, N.W.

Suite 1000

Washington, D.C. 20005

(202) 962-4800

Counsel for Appellant

Philip R. Karn, Jr.

Date: September 20, 1996

SUBJECT MATTER AND APPELLATE JURISDICTION

Jurisdiction in the District Court was founded on 28 U.S.C. § 1331 because of the claim that the administrative action under review violates the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) and the First and Firth Amendments.

Jurisdiction in this Court is based on 28 U.S.C. § 1291 because the decision of Judge Richey granting summary judgment is a final order.

STATUTES AND REGULATIONS

The pertinent statutes are attached as Appendix A.

STATEMENT OF ISSUES PRESENTED

1. Whether the District Court erred in granting summary judgment despite the existence of a genuine dispute of material fact, specifically whether export of the diskette poses any actual threat to a legitimate government interest.

2. Whether the Defendants' decision to permit the export of computer source code in a book, while denying permission to export the identical code in text-file form on a diskette, is arbitrary, capricious and invalid under the Due Process Clause.

3. Whether computer programs on diskette are entitled to the same protections under the First Amendment as books.

4. Whether the District Court erred in applying the O'Brien First Amendment standard instead of the New York Times standard for government restraints on speech.

5. Whether the Defendants' decision to permit the export of computer source code listings in a book, while denying permission to export the identical listings in text-file form on a diskette, is arbitrary, capricious and invalid under the Administrative Procedure Act.

6. Whether the District Court erred in interpreting the Arms Export Control Act to preclude judicial review of an administrative decision on the classification of the computer diskette at issue.

STATEMENT OF FACTS

In 1994 Bruce Schneier published a book, Applied Cryptography, containing material on programming computers to use cryptography to protect communications from unwanted interception. Part Five of the book contained complete computer source code listings for several encryption algorithms. (Pl. Ex. 1)

The United States Government has for years regulated the export of cryptographic software under the Arms Export Control Act, 22 U.S.C. §§ 2751-2796d which is implemented by the International Traffic in Arms Regulations (ITAR), 22 C.F.R. §§ 120-130. Those regulations include a procedure for determining whether particular commodities may be exported without an ITAR license. On February 12, 1994, Philip R. Karn, a communications engineer, applied to the Department of State for a determination that export of Applied Cryptography did not require an ITAR license. On March 2, 1994, The Department informed Mr. Karn that the book could be freely exported because it was "in the public domain." (Lowell Decl., Tab 4) That decision went on, however, to state that it did not extend to two diskettes which contained the encryption source code printed in Part Five of Applied Cryptography and other source codes that were not in the book.

Mr. Karn prepared a single diskette that contained only the source code printed in Part Five of the book. On March 9, 1994, he sought a determination that the single diskette, like the previously approved book, could be exported without an ITAR license. On May 11, 1994, the State Department's Office of Defense Trade Controls advised him that the diskette could not be exported without an ITAR license, despite the fact that it contained only information that was identical to that in the book, because the diskette "is designated as a defense article under category XIII(b) (1) of the United States Munitions List." (Lowell Decl., Tab 9)

Mr. Karn appealed this decision, first to the Deputy Assistant Secretary of State in charge of the ODTC, and then to the Assistant Secretary of State for Politico-Military Affairs, Thomas McNamara. The original decision was affirmed by both officials. This litigation ensued.

STATEMENT OF THE CASE

The Complaint sought a Declaratory Judgment that the decision to deny permission to export the diskette while allowing unregulated export of identical information in the form of a book was invalid under the Due Process Clause, the First Amendment and the Administrative Procedure Act. Following an initial status conference with Judge Richey, the Government moved to dismiss and/or for summary judgment. Memoranda and supporting declarations were filed by both sides. In our opposition we noted that many of the arguments raised by the Government were factual assertions that were not supported by any submissions before the court. We filed declarations contesting several of the factual assertions that were at the heart of the Government's arguments. We also initiated discovery, seeking the factual basis for the unsupported assertions in the Government's submission.

Judge Richey granted the Government's motion to stay all discovery and, without having held oral argument or the "mini trial" which we had requested, went on to dismiss the APA claim and grant summary judgment for the defendants on all remaining counts. His order of dismissal was entered on March 22, 1996. His memorandum decision is reported at 925 F. Supp. 1 (1996) and is reprinted in the Joint Appendix (JA ___). A timely notice of appeal was filed on April 19, 1996.

SUMMARY OF ARGUMENT

This appeal arises from action of the Department of State in the administration of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). In 1994 the Department decided that a published book, Applied Cryptography, could be exported without an export license. That decision was made knowingly and notwithstanding the fact that the book contained computer source code for cryptographic algorithms. Immediately thereafter the appellant, a computer engineer, sought permission to export, without an export license, the very same source codes that were contained in the book but to do so in the form of plain-text files on a computer diskette. The State Department denied that request and ruled that the diskette was controlled cryptographic software, despite the fact that the contents of the diskette were identical to the uncontrolled book.

This case challenges the administrative decision on two separate grounds: 1) the distinction drawn between the source codes in the book and the identical source codes on the diskette is arbitrary, capricious and irrational and is therefore unlawful under the Due Process Clause and the Administrative Procedure Act; and 2) the implementation of the ITAR violates the First Amendment because it constitutes a prior restraint of Mr. Karn's right to publish source code, a form of pure speech.

A subsidiary issue is whether a provision in the AECA precluding judicial review of decisions to include certain commodities in the United States Munitions List (USML) also precludes individual administrative actions determining that particular items are within such categories. Appellant contends that the statutory prohibition applies only to administrative designations of categories of controlled commodities and does not preclude review of individual administrative decisions as to whether a particular item falls within the definition of a controlled commodity.

ARGUMENT

I. THIS CASE DOES NOT PRESENT ANY "POLITICAL QUESTIONS" OR OTHER ISSUES WHICH SHOULD NOT BE DECIDED BY THE JUDICIAL BRANCH FOR REASONS OF "NATIONAL SECURITY"

Judge Richey described this case as a matter that "presents a classic example of how the courts today, particularly the federal courts, can become needlessly invoked, whether in the national interest or not, in litigation involving policy decisions made within the power of the President or another branch of the government." (925 F. Supp at 2) He concluded that the case raised "political questions" that should not be entertained by the Judicial Branch. He stated that he would not decide certain issues in this case because a decision might affect "foreign intelligence" matters. The trial judge apparently recognized that the only difference in functional utility between the source code in the unrestricted book and the source code on the diskette was that it takes a few minutes longer to convert the book data into a functional program than it takes to convert the diskette data into the same program, but he nonetheless upheld the regulatory action.

We respectfully submit that Judge Richey erred in concluding that the issues in this case are beyond either the jurisdiction or the judicial competence of the courts. Without undertaking any of the analysis of the "political question" doctrine set forth in Powell v. McCormick, 395 U.S. 486 (1969), he simply labeled this case as a "political" matter, accepted certain totally unsupported representations of Government counsel as to the alleged "national security" implications of the litigation, and then effectively abdicated his role as an independent constitutional officer of the Judicial Branch.

We recognize that the rhetoric of this characterization is strong, but it is apt. We recognize that the courts have not frequently been presented with issues of computer programming, cryptography, source code and diskettes, but those issues are neither so arcane nor so unique to the intelligence community that they justify a withdrawal of the Judicial Branch from the field of controversy. Yet just such a withdrawal occurred in the District Court.

Many of the arguments successfully advanced by Government counsel in the District Court lack any foundation in the record. Government counsel made the following factual arguments without evidentiary support:

  1. Export of the diskette "would present a far greater threat to national security than does the appearance of some source code on the Internet." (Defs. Reply Memo. at 3)
  2. "Export of the diskette would provide foreign recipients with . . . a tool that would help shield their communications from national security surveillance by the United States." (Defs. Reply Memo. at 9)
  3. Export of the diskette "can be expected to result in far more actual use of encryption overseas." (Defs. Reply Memo. at 11)
  4. Export of the diskette "would clearly expose the important governmental interest at stake to more harm." (Def. reply Memo. at 12)

In contrast to the Defendants' unsupported assertions, we submitted evidence of each of the following facts:

  1. "[T]here is no functional difference of any significance" between the source code printed in the book which the Executive Branch allows to be exported and the same source code on the diskette that cannot be exported. (Karn Decl. ¶ 13)
  2. The entire contents of the banned diskette are available in digital (electronic) form on the Internet from a computer facility located in Italy. (Supp. Karn Decl. ¶ 2)
  3. The widespread availability of the same cryptographic source code from foreign sources "makes the restrictions on [export of] this diskette immaterial with regard to the ability of foreigners to shield communications from surveillance." (Supp. Karn Decl. ¶ 6)
  4. The Executive Branch's unsupported and untested assertion that export of this diskette would pose a far greater threat to national security than already exists "is simply wrong." (Supp. Karn Decl. ¶2)

Normally the juxtaposition of the unrebutted declarations submitted by Mr. Karn and the defendants' opposition based on unsupported arguments by counsel would have led to an immediate denial of the defendants' motion, limited discovery and a factual hearing. Instead, Judge Richey accepted the repeated invocations of the "national security" miasma, granted the Government's request for a protective order to stop all discovery, and dismissed the case by labeling all the factual issues a "'political question' for the two elected branches under Articles I and II of the Constitution." (925 F. Supp at 3) He explained that decision by assuming the very facts that were in issue: "The government clearly has an interest in preventing the proliferation of cryptographic software to foreign powers . . . . The Court will not substitute its policy judgments for that of the President." (Id. at 13)

This is not the first time the Executive Branch has come before this Court and invoked the aura of the "national security" in an effort to preclude judicial scrutiny of the actual facts. Precisely the same tactic was employed when a prior Administration tried to get this Court to block publication of the Pentagon Papers and to simply accept the representations of Executive officials that publication of those documents would pose a substantial threat of genuine harm to the national interest. In that case the Judicial Branch declined to abdicate its constitutional duty to uphold the First Amendment. The Supreme Court instead looked at the documents in issue and reached an independent judgment that the asserted harm was entirely overstated and, in any event, an insufficient basis under the First Amendment to enjoin publication. See New York Times Co. v. United States, 403 U.S. 713 (1971)

This case, like the Pentagon Papers litigation pits assertions of national security against the interests of free dissemination of information. But this case poses an added feature as well: here the cognizant national security officials have decided that export of specific cryptographic source code in text format will not endanger the national security, but export of those same source code in a digital form will pose an unacceptable risk of injury. That argument is equivalent to an assertion that it was permissible for The Washington Post to publish the Pentagon Papers as a series of newspaper installments, but impermissible to disseminate the identical information by putting it on the Post's Internet website. Had such a ludicrous assertion been advanced, we are confident that it would have been seen for what it was and soundly rejected.

II. DETERMINING THE RATIONALITY OF A DISTINCTION BETWEEN COMPUTER SOFTWARE ON A DISKETTE AND THE IDENTICAL SOFTWARE IN A BOOK DOES NOT REQUIRE THE JUDICIAL BRANCH TO ENGAGE IN FOREIGN AFFAIRS FUNCTIONS RESERVED TO THE EXECUTIVE BRANCH

In declining to hold an evidentiary hearing, or an oral argument, Judge Richey invoked the traditional judicial deference to the President when issues of foreign affairs are raised. He expressly said twice that he would "not scrutinize the President's foreign policy decision." (925 F. Supp. at 11, 13) He reiterated that he would not decide questions he felt were pure policy questions for the Congress and the Executive. (Id. at 2, 3, 11) Judge Richey cited Chicago & Southern Air Lines v. Waterman SS. Corp., 333 U.S. 103 (1948), to support his belief that the courts have "neither aptitude, facilities nor responsibility" to decide whether this diskette may be exported. We submit that Judge Richey misapplied the "foreign affairs" exemption to the normal full scope of judicial review.

The traditional deference the Judiciary affords the President in areas of foreign affairs has been applied in cases where the decision of the President, or a subordinate official, requires weighing the impact of a particular decision on foreign relations. See, e.g., United States v. Pink, 315 U.S. 203 (1942) (holding that the President's decision regarding recognition of Russia was binding on the courts) No such situation prevails here. This case involves regulating the conduct of an American citizen, not a foreign entity. The case does not present an issue of whether our foreign affairs or national security interests are adversely affected by exporting cryptographic technology to foreign countries. The Executive Branch has already decided that this technology can be exported, at least when it is in book form. The case would be different if the Executive had said that interests of foreign affairs or national security required the complete suppression of any foreign dissemination of this source code, but that is not what it decided. What this case does involve is whether the distinction drawn by the Executive between a book and a diskette is rational. Resolution of that issue does not tread anywhere near issues of foreign affairs.

Our courts have traditionally been open to hear cases where the Executive assertions of foreign affairs interests has become a means for imposing domestic regulation on American citizens. For example, the courts repeatedly ruled in a series of passport control cases that the Judicial Branch would not let the Executive assume unlimited discretion over the issuance of passports, despite the obvious foreign affairs implications of such decisions. See, e.g., Haig v. Agee, 453 U.S. 280 (1981); Zemel v. Rusk, 381 U.S. 1 (1965); Kent v. Dulles, 357 U.S. 116 (1958) The courts have also found a way to adjudicate property claims, even when significant foreign affairs policies are at issue. Compare Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964) ("act of state" doctrine precludes court from deciding issues relating to Cuba's expropriation of property) with Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682 (1976) ("act of state" doctrine did not preclude adjudication of title which would not require the court to assess validity of expropriation); see also Dames & Moore v. Regan, 453 U.S. 654 (1981) (conclusion that the President had the power to suspend Iranian claims litigation did not preclude the claimant from bringing a "taking" action in the Court of Claims) In short the foreign affairs exception applies only where making a decision would require judicial resolution of specific foreign policy issues; it does not apply where a decision will only involve application of principles of domestic law.

III. THE EXECUTIVE'S DISTINCTION IN THIS CASE IS EITHER IRRATIONAL ON ITS FACE OR MUST BE EVALUATED THROUGH A FACT-FINDING HEARING

This appeal focuses on a narrow issue with broad implications. The decision under review concerns specific administrative determinations about discrete cryptographic source code. But the framework of the judicial decision reaches beyond that narrow focus. This case affords an appellate tribunal one of the first opportunities to determine how cryptographic software will be treated by the courts.

The decision below raises substantial concerns, as is evidenced by the amicus participation. That concern is legitimate and the broader implications of the issues in this case are indeed important and of substantial precedential significance. But that broader impact should not obscure the essence of the issue: is it rational, and therefore lawful, for the Executive to draw a significant regulatory distinction between computer source code in a book and the identical information in digital form on a diskette?

Both sides agree that if the administrative action under review is "arbitrary and irrational" then it cannot be sustained. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976); Duke Power Co. v. Carolina Env. Study Group, 438 U.S. 59, 84 (1978). The parties are essentially in agreement on the applicable Due Process principles but differ sharply on how those principles should be applied to this case.

A. IT IS IRRATIONAL TO IMPOSE DIFFERENT REGULATORY RESTRICTIONS ON COMPUTER SOURCE CODE DEPENDING ON WHETHER IT IS PRINTED IN A BOOK OR CONTAINED ON A DISKETTE

There is no functional difference of any significance between the book and the diskette. (Karn Decl. ¶ 13) Neither the book nor the diskette can be used to encrypt or decrypt information. Both the book and the diskette, in the hands of a computer programmer of average skill, can be used as the basic building block for making a functioning encryption program. But the only function of the book or the diskette is to provide information to a human being which can then be used as part of the knowledge needed to build a functioning encryption/decryption program. (Karn Decl. ¶¶ 13-15)

The sole function of the diskette -- storage and transmission of information -- is identical to the sole function of the book. There is no functional difference of any significance between the source code listings in the book and those on the diskette. (Karn Decl. ¶¶ 13-14) Plaintiff's Exhibit 3 is a reproduction of the 18 pages of Applied Cryptography that contain the source code listing for the DES algorithm used by the National Security Agency ("NSA") to conduct the experiment described in the defendants' submission. Plaintiff's Exhibit 4 is a printout of the file DES.TXT on the diskette at issue. As is readily apparent, there is no difference in the information contained in those two listings. They are substantively, and functionally, identical.

In an effort to show Judge Richey that the diskette could be used to create encrypted communications, the defendants had an unidentified NSA employee take the diskette, write some additional source code, compile all of the source code into an operating program and use that program to illustrate how a short text message could be encrypted. (Crowell Decl. ¶¶ 10-14) We responded to that out-of-court demonstration by creating the same encryption functionality using the source code printed in the Applied Cryptography book instead of those on the diskette. The functional identity of the book and the diskette is shown by the fact that a computer programmer with ordinary skill can, using the book itself, create exactly the same functioning encryption program that NSA created using the diskette. (Karn Decl. ¶¶ 3-11) The only difference between the two processes is that a programmer who begins with the book alone must spend less than three hours of additional time at the computer keyboard typing the source code in the book into the computer and perhaps another two hours to proof-read and correct errors in the text file.

The Executive contends that the diskette is the "functional equivalent" of an operating encryption program because a programmer can use the diskette to create a complete program in about an hour. They further contend that it is because of this "functionality" that they can lawfully distinguish between the book and the diskette. The fact is that the only difference between the source code listings in the book and those on the diskette is that it takes somewhat less than five hours, using the book alone, to produce a functioning program, while it takes less than two hours to produce the same program if the programmer starts with the diskette. It is utterly arbitrary, capricious and specious to draw a regulatory distinction between the book, which can be converted into a complete program in less than five hours, and the diskette which requires only 180 minutes less time to produce the same complete functioning program.

As the Appellees have themselves acknowledged, the Due Process Clause precludes regulatory distinction that is "demonstrably arbitrary or irrational." Duke Power, 438 U.S. at 84 (Defs. Mem. at 38, n.29) We contend that a factually correct understanding of the "commodities" at issue in this case would demonstrate that there is no functional difference between the source code listings in the book and those on the diskette.

B. IT IS IRRATIONAL TO PREVENT EXPORT OF THIS DISKETTE WHEN THE IDENTICAL SOURCE CODE, IN DIGITAL FORM IS ALREADY AVAILABLE ON THE INTERNET

The diskette in issue contains code for 14 cryptographic algorithms. In deciding to preclude export, the State Department seemingly ignored that fact that three of the algorithms are, under applicable ITAR regulations, freely exportable because they do not function to encrypt information. Those algorithms (MD5, N-HASH and SHS) are "hashing" functions not capable of performing encryption of data. Those functions are expressly exempted from ITAR regulation. Another of the 14 algorithms is the Enigma cipher that was used by the Germans in World War II. NSA has for many years proudly recognized, and properly so, that the Allies cracked Enigma during the War and were therefore able to read German cable traffic. Since this cipher can be broken by NSA, its export does not pose any threat to national security. In short, the fact that three of the restricted algorithms are clearly outside the scope of the ITAR and one cannot possibly be a security concern is substantial evidence of the irrationality of the administrative action under review.

The absurdity of the administrative decision in this case is highlighted by the fact that the entire contents of the diskette in issue are available on the Internet at an Italian computer site. (Karn Supp. Decl., ¶ 2) Thus not only has all of the restricted source code been disseminated around the world in book form, the precise files that are on the diskette are readily available, in digital form, from a foreign source over the Internet.

The Executive does not, and indeed cannot, dispute the fact that the identical commodity which they will not allow Mr. Karn to export is already freely available on the international market. How then, can they seriously contend that any United States national security interest could be threatened by export of the same commodity?

C. THIS REGULATORY DECISION CANNOT BE SUMMARILY SUSTAINED WHEN MATERIAL FACTS ARE GENUINELY IN DISPUTE

We argued below that a determination of the rationality of the regulatory distinction drawn by the defendants required limited discovery and a mini-trial. Computer programming skills, source code, object code and cryptography are not, we recognize, subjects of everyday consideration in our judicial system. Judge Richey's decision is based on a "trial by declaration" as to the alleged differences, or functional identities, of the book and the diskette and it is procedurally flawed. Because the parties disagree on whether there is a meaningful functional difference between the book and the diskette, there is indeed a genuine dispute on a material fact, a dispute that precludes summary judgment.

The burden for showing the absence of any genuine dispute of material facts rests on the Defendants in this case. Church of Scientology v. National Security Agency, 610 F.2d 824, 836 (D.C. Cir. 1979); see also National Cable Television Ass'n, Inc. v. FCC, 479 F.2d 183, 186 (D.C. Cir. 1973) All favorable inferences are to be granted in this case to the Plaintiff. Smith v. Nixon, 606 F.2d 1183, 1187 (D.C. Cir. 1979), cert. denied 453 U.S. 928 (1981)

Judge Richey's decision granting summary judgment to the Government on this record is flawed because the critical factual assumptions on which he based his decision were never supported by any declarations or other evidentiary submissions by the Government. He simply accepted, without requiring any proof, the Executive's self-serving assertions that there was a meaningful functional difference between the book and the diskette.

We submit that a court cannot properly decide a factual matter such as this on the basis of untested arguments by Government counsel, especially when the subject of the dispute is technical cryptographic software. We submit that the Judicial Branch should not, in effect, take judicial notice of a unilateral assertion by an Executive Agency, even an agency with the high reputation of the National Security Agency, and base its conclusion as to the rationality of a regulatory distinction on that blind faith. This Court is all too familiar with past assertions of facts, based on assertions of national security interests, that have on examination turned out to be inaccurate. Just such an inaccurate exaggeration is, we submit, present here. A mini-trial would convincingly demonstrate that the distinction drawn in this case between the book and the diskette is utterly irrational.

The importance of an evidentiary hearing in cases like this one was illustrated by the proceedings before the two three-judge panels that decided that the recently-enacted provisions of the Computer Decency Act were unconstitutional. ACLU v. Reno, 929 F. Supp. 824 (E.D. Pa. 1996); Shea v. Reno, 930 F. Supp. 916 (S.D.N.Y. 1996) Those courts did not simply receive briefs and entertain oral argument. Each panel sat for several days to receive live evidence of how the Internet actually operates, evidence that was critical to the framing of the factual findings that lie at the heart of the panel's opinions. See ALCU v. Reno, 929 F. Supp. at 830-49; Shea v. Reno, 930 F. Supp. at 923, 925. The benefit of such evidentiary proceedings for informed adjudication in cases involving computer technology cannot be minimized. Judge Richey's failure to follow that course in this case is reversible error.

IV. THE EXECUTIVE RECOGNIZES THAT THE FIRST AMENDMENT PRECLUDES BANNING EXPORT OF THIS SOFTWARE IN BOOK FORM AND THE SAME CONCLUSION SHOULD EXTEND TO THE IDENTICAL INFORMATION IN COMPUTER-READABLE DIGITAL FORM

There are two separate reasons why the First Amendment precludes the Executive regulation of this diskette: 1) prohibiting this form of speech cannot meet the applicable First Amendment test because there is no evidence of a "clear and present danger" to a legitimate government interest; and 2) the ITAR provisions as applied to cryptographic software are an unconstitutional system of prior restraint.

A. THERE IS NO "CLEAR AND PRESENT DANGER" POSED BY EXPORT OF THIS DISKETTE

1. The Diskette, Like the Book, is "Pure Speech" Under the First Amendment.

It is beyond debate that Applied Cryptography is a publicly available book entitled to the fullest protection of the First Amendment. The State Department recognized this when they allowed the book to be exported without an ITAR license. We submit that the diskette is equally entitled to the fullest protection of the First Amendment. The source code listings in the book and the files on the diskette are substantively identical. Both contain the text listings for the computer source code for a number of algorithms. Both presentations of the information are comprehensible to a human being. The book can be "understood" by humans. The text files on the diskette can also be "read" and understood by a human, simply through the use of a common personal computer. All the reader has to do is to insert the diskette in a personal computer, and either execute a simple single command or use a common text reader that is routinely included in most personal computer operating system. There cannot be a legally significant difference, for purposes of First Amendment analysis, between "text on paper" and "text on mylar" since both expressions of text are merely means of transmitting information between human beings.

The First Amendment is, of course, broadly construed to cover not only oral speech and the products of the Revolutionary War printing press, but other media as well. Radio, television and motion pictures are each a form of communication unknown to the Founding Fathers, yet each is protected by the same First Amendment that applies to books. It is, we submit, simply inconceivable that a book published on a CD-ROM, such as Grolier's Encyclopedia, is any less entitled to First Amendment protection than the far bulkier paper edition. It is equally inconceivable that computer source code that has been published in a book is automatically subjected to second class status under the First Amendment when the identical information is put on a computer diskette.

The diskette, like the book, functions to communicate information to a human, not to cause a computer to perform a function. The communicative purpose and effect of the diskette is evidenced by the fact that the text files on the diskette include the "comments" in the source code listing of the book. Those comments contain information that is useful only to a human who is using the information for programming purposes and is completely ignored by a computer when the listing is compiled as part of the process of creating a functioning program. Source code listings, unlike object code, are in fact primarily designed to communicate with human beings. As was cogently stated in the preface to a computer science textbook:

Our design of this introductory computer-science subject reflects two major concerns. First, we want to establish the idea that a computer language is not just a way of getting a computer to perform operations but rather that it is a novel formal medium for expressing ideas about methodology. Thus, programs must be written for people to read, and only incidentally for machines to execute.

H. Abelson and G. Sussman, Structure and Interpretation of Computer Programs (MIT Press 1985).

2. The Book and the Diskette Are Both Protected as Tools of Speech

The First Amendment not only protects speech itself, it protects the tools of speech from government regulation which inhibits speech. For example, in Minneapolis Star & Tribune Co. v. Comm. of Revenue, 460 U.S. 575 (1983), the Supreme Court considered the constitutionality of a state statute imposing a sales and use tax on newsprint and ink. Although the tax was not a direct regulation of speech, it was a regulation of essential tools for the publication of printed media. As such, it was analyzed using First Amendment principles. As stated by the Court, "[a] tax that burdens rights protected by the First Amendment cannot stand unless the burden is necessary to achieve an overriding governmental interest." Id. at 582 (emphasis added). Because no such interest was shown in that case, the tax was held unconstitutional.

The expressions of source code are not only pure speech, they are also tools for facilitating human communication that, like the newspaper and ink in Minneapolis Star & Tribune, should be entitled to enhanced First Amendment protections because they are "tools of speech." The Supreme Court has held that the government cannot prohibit citizens from teaching or speaking a foreign language. Meyer v. Nebraska, 262 U.S. 390 (1923) (statute prohibiting teaching of foreign languages unconstitutional); Bartels v. Iowa, 262 U.S. 404 (1923) (statute prohibiting teaching foreign languages below the eighth grade unconstitutional); Yu Cong Eng v. Trinidad, 271 U.S. 500 (1926) (Philippine statute prohibiting maintaining business records in certain languages unconstitutional); Farrington v. Tokushige, 273 U.S. 284 (1927) (injunction against enforcement of Hawaiian statute regulating foreign language schools).

Recently, the Ninth Circuit held that Arizona's "English-only" statute was unconstitutional. Yniguez v. Arizonans, 69 F.3d 920 (9th Cir. 1995) cert. granted, 116 S.Ct. 1316 (1996). We submit that the Government cannot prohibit its citizens from communicating in code, anymore than it can prohibit them from communicating in the Spanish, Japanese or Navaho language.

It is significant that the majority in Minneapolis Star & Tribune analyzed the issue under First Amendment principles and did not employ the equal protection analysis urged by then-Justice Rehnquist in dissent. We submit that the Court's analysis in that case stands for an underlying First Amendment principle: regulation of the tools of speech, like regulation of speech itself, raises First Amendment concerns and can be justified only by "an overriding governmental interest."

This case involves plaintiff's attempt to obtain the State Department's clearance to export Constitutionally protected information. The First Amendment does not stop at the water's edge. In Bullfrog Films, Inc., v. Wick, 847 F.2d 502, 511 (9th Cir. 1988), the Ninth Circuit held that United States Information Agency regulations implementing an international agreement aimed at facilitating the international circulation of educational and scientific audio-visual materials were subject to First Amendment analysis and did not pass Constitutional muster. The Court of Appeals wrote that:

A logically prior question, whether the First Amendment applies abroad, was raised by the district court . . . the court concluded: 'There can be no question that, in the absence of some over-riding governmental interest such as national security, the First Amendment protects communications with foreign audiences to the same extent as communications within our borders.'

Id. at 509 n.9 (citing the lower court opinion at 646 F. Supp. 492, 502 (C.D. Cal. 1986)).

3. The Government Regulation In This Case Must Pass the "Clear and Present Danger" Test Applicable to "Pure Speech", not the O'Brien Test Applicable to "Conduct" or "Speech Plus"

Judge Richey mistakenly concluded that the First Amendment issue in this case should be analyzed using the guidance of United States v. O'Brien, 391 U.S. 367 (1968). That conclusion is fundamentally wrong. As the Appellees themselves have recognized, O'Brien sets forth "the standard for evaluating the government's regulation of conduct which might, in its particular applications, impose incidental restrictions on speech." (Defs. Mem. at 20) O'Brien applies only "when 'speech' and 'non-speech' elements are combined in the same course of conduct." O'Brien, 391 U.S. at 376 That analysis has no application here because we are only dealing with the regulation of communications, not conduct.

Judge Richey agreed that the source code at issue was a form of protected speech, but applied the less restrictive O'Brien test instead of the "clear and present danger" test that has consistently been applied to restraints of pure speech. His analysis would, if accepted by this Court, subject all publishing activities to an O'Brien analysis. The conduct at issue in O'Brien was the burning of draft cards. The case took on a First Amendment coloration only because the draft cards were being burned as a protest against the war in Vietnam. The defendants in that case categorized their conduct as "symbolic speech" and sought refuge in the First Amendment. The Supreme Court properly recognized that burning a government-issued document was qualitatively different than publishing an anti-war newspaper. This case involves acts of distributing information, not conduct as was the case in O'Brien.

The First Amendment was designed, in large part, to protect the right of citizens to communicate through printing, publication and distribution of speech in the form of handbills, broadsides and rudimentary newspapers. The printing, publication and distribution of a book is classic "pure speech" and cannot be transformed by lawyers' arguments into "conduct" and thus subjected to regulation under a lessened standard of judicial scrutiny. That same result must follow for publication and distribution of information in digital form, whether in the form of a computer-readable CD-ROM or, as here, a diskette. The First Amendment is not limited to the printing press and it, like technology, expands to embrace all means for communicating information. See, e.g., Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495 (1952) (overruling Mutual Film Corp. v. Industrial Comm'n of Ohio, 236 U.S. 230 (1915) and applying First Amendment protections to motion pictures)

After Judge Richey's decision, a California federal district court ruled that the First Amendment applies fully to cryptographic source code. In Bernstein v. Department of State, 922 F. Supp. 1426 (N.D. Cal. 1996), Judge Patel was faced with a different ITAR decision involving cryptographic source code. In that case the plaintiff sought to export the code for a cryptographic program he had written without having to obtain an ITAR license. There, as here, the State Department decided that the ITAR regulations applied and a license would be required.

Judge Patel, unlike Judge Richey, denied the Government's motion to dismiss that case. She held that the cryptographic source code was speech within the scope of the First Amendment and she rejected the Executive's attempt to apply an O'Brien analysis. While the Government contended that the case involved "conduct" and not speech, Judge Patel rejected that argument entirely, stating that

Bernstein's encryption system is written, albeit in computer language rather than in English. Furthermore, there is little about this functional writing to suggest it is more like conduct than speech. A computer program is so unlike flag burning and nude dancing that defendants' reliance on conduct cases is misplaced. It would be convoluted indeed to characterize Snuffle as conduct in order to determine how expressive it is when, at least formally, it appears to be speech.

Id. at 1434-35.

Judge Patel squarely held that "[f]or the purposes of First Amendment analysis, this court finds that source code is speech." Id. at 1436. She turned next to an evaluation of the identical O'Brien argument advanced in this case. Unlike Judge Richey, however, Judge Patel rejected the argument, stating that since "source code is speech and not conduct, O'Brien does not appear to provide the appropriate standard under which to evaluate plaintiff's claims." Id. at 1437.

4. The District Court Erred in Concluding that the Regulation was a "Content-Neutral" Decision When In Fact It Was Based Only on the Content

Judge Richey's decision to apply an O'Brien analysis rested on his acceptance of the Executive's argument that the regulation of this diskette was a "content-neutral" decision. That argument is fallacious. All computer source code is the same type of speech. It is written in a language that can be read and understood by humans, but can also be understood by computers. But the defendants' regulation of that language depends entirely on its content. If the language of the source code does not contain the subject matter of cryptography, then it does not require an export license.

Moreover not all cryptographic source code requires an export license. ODTC has developed certain standard practices for regulating exports of cryptologic software. The ODTC decisions on exporting cryptographic software are in fact made entirely on the basis of recommendations from the National Security Agency ("NSA"). Current policy permits essentially unregulated export of cryptographic software that uses either the RC2 or RC4 ciphers, as long as the cipher keylength is 40 bits or less. Applied Cryptography at 454. NSA employees review cryptographic source code to determine whether it can or cannot be exported without an ITAR license. Their decision rests on entirely on their evaluation of the content of that source code; that is, whether it will, once complied, produce "strong" encryption that they believe might endanger national security, or will produce "weak" encryption that can be freely exported.

That analysis, we submit, is not any different, for First Amendment purposes, than any other form of censorship. When the Maryland State Board of Censors looked at motion pictures to determine whether they could be exhibited, they based their decisions on their evaluation of the content of each movie. If they judged that the content was obscene and therefore public exhibition would endanger public morality, they precluded exhibition. If they judged the movie non-obscene it could be shown, even if it contained provocative scenes. See Freedman v. Maryland, 380 U.S. 51 (1965). The same evaluative process was undertaken in this case. When the NSA reviews requests for export of cryptographic software, it looks to the content of that software to determine whether it is harmless (non-obscene) or dangerous (obscene). The decision on whether to permit or deny export is entirely based on the content of the software. Because the decision hinges entirely on what the reviewer concludes about the content of the speech, it is simply wrong to classify the decision as "content-neutral" and therefore apply a diluted First Amendment protection. See Regan v. Time, Inc., 468 U.S. 641 (1984) (statutory prohibition on publishing photographs of currency except for "philatelic, numismatic, educational, historical or newsworthy purposes" could not be sustained as a "time, place or manner" restriction but was unconstitutional since it required government to evaluate content of photograph)

When, as here, a government action is based on the content of communication, it is subject to the strictest judicial scrutiny and is impermissible unless the Court finds that there is a genuine "compelling" governmental interest that is furthered by the restriction and the chosen means of regulation is the "least restrictive means" of furthering that interest. Sable Communications v. FCC, 492 U.S. 115, 126 (1989). A full inquiry into the facts at issue here would show that there is no genuine national security interest threatened by this diskette. In the absence of a compelling interest, the content-based decision in this case cannot stand.

5. Even if the O'Brien Test Were Applicable, It Would Not Justify Prohibiting the Export of the Applied Cryptography Diskette

Even if the O'Brien test were applicable to the present case, the defendants' actions would not pass Constitutional muster. The Supreme Court established four criteria for determining when government interests sufficiently justify the regulation of expressive conduct combining speech and non-speech elements:

government regulation is sufficiently justified if it is within the Constitutional power of the government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.

O'Brien, 391 U.S. at 377. Assuming arguendo that the diskette is not pure speech but is a type of conduct with speech components, the third and fourth prongs of the O'Brien test are not satisfied.

Subjecting the diskette to export controls under the ITAR amounts to prohibiting its export. Accordingly, Plaintiff would be subjected to a prior restraint on the use of the diskette, a form of speech, in violation of his First Amendment right to free expression. Export of the encryption programs on the diskette cannot in fact threaten the national security because the same programs are already widely available in other countries. It follows, therefore, that prohibiting the export is axiomatically a restriction "on alleged First Amendment freedoms" that is "greater than is essential to the furtherance" of the interest protected.

B. THE ITAR REGULATIONS AS APPLIED TO COMPUTER PROGRAMS ARE AN UNCONSTITUTIONAL SYSTEM OF PRIOR RESTRAINTS

In 1977, a NSA employee wrote the Institute of Electronic and Electrical Engineering to advise that the intended publication of a paper on public key cryptography would violate the ITAR. (Ex. 1, Applied Cryptography at 452) His contention was based on the literal language of the regulations which prohibited the disclosure, in the United States, of even "unclassified information" if the information might "advance the state of the art . . . in an area of significant military applicability." Id. Public key cryptography was, at that time, essentially unknown outside of NSA, so the warning was, on its face, a credible construction of the then-applicable ITAR regulations.

The NSA letter caused a firestorm of concern and led directly to a series of legal opinions by the Office of Legal Counsel (OLC) in the Department of Justice. The first opinion, issued May 11, 1978, concluded that "[t]he ITAR requirement of a license as a prerequisite to 'exports' of cryptographic information clearly raises First Amendment questions of prior restraint." (OLC Memorandum to Dr. Frank Press, May 11, 1978, at 5) (JA at __) That office went on to conclude that "the regulatory provisions present questions of overbreadth and vagueness." Id. at n.8. The memorandum concluded by stating that the ITAR restrictions on cryptologic information, whether generated by the government or developed by private individuals, were "justifiable under the First Amendment only to the extent that the information is properly classified or classifiable." Id. at 7 (emphasis added). The ultimate conclusion was "that the present ITAR licensing scheme does not meet constitutional standards." Id. at 11.

In part as a direct result of the OLC opinion, the Department of State undertook a revision of the ITAR and published proposed changes in December of 1980. 45 Fed. Reg. 83,970 (Dec. 19, 1980). On July 1, 1981, OLC issued its second opinion on the constitutionality of the ITAR regime. The office concluded that while "the revised ITAR is a significant improvement over the prior version, . . . even as revised, it can have a number of unconstitutional applications." OLC Memorandum Opinion for the Office of Munitions Control, July 1, 1981, at 1, published at 5 Opin. OLC 202. The 1981 opinion concluded that while some of the substantive vagueness of the ITAR had been eliminated, the process was still an unconstitutional system of prior restraint because it does not "impose on the government the burden of obtaining prompt judicial review of any State Department decision barring the communication of cryptographic information." Id., 5 Opin. OLC at 205. The Department of State did not heed the OLC advice and the present regulations still do not require the government to initiate a prompt judicial review of the denial of an export license for cryptographic data. OLC's 1981 opinion correctly stated that "if speech is arguably protected by the First Amendment, it may not be subjected to prior restraint except in the most extraordinary cases" and that "[p]rior restraint . . . is presumptively unconstitutional." Id., 5 Opin. OLC at 212.

OLC was again asked to analyze the ITAR in 1984. In yet another opinion, that office concluded that "the application of the ITAR to a significant class of conduct continues to raise serious constitutional questions." OLC Memorandum for Davis R. Robinson, Legal Adviser, Department of State, July 5, 1984, at 2. That opinion considered two intervening Supreme Court decisions, Metromedia, Inc. v. San Diego, 453 U.S. 490 (1981) and Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983). The office concluded that, notwithstanding those decisions, "the constitutional principles upon which we relied [in our prior opinions] remain intact." OLC Mem. at 4. The Office again concluded that the revised ITAR would still "appear to us to present sensitive constitutional issues" and that there was still an unconstitutional "remaining overbreadth." Id. at 14-15.

The constitutional infirmities which OLC has repeatedly identified in the ITAR remain there today. There is still no provision for prompt judicial review, at the government's instigation, of decisions to prohibit dissemination of cryptographic information outside the United States. In fact, the administrative action taken in this case has, if anything, retreated from the "liberalization" that OLC expected. The revised ITAR considered in 1984 held out the promise that no "public domain" information would ever be regulated. See 1984 OLC opinion at 8. In this case, the defendants have, through linguistic distortions, specifically prohibited the export of source code that is undeniably already in the public domain.

Judge Richey refused to consider Mr. Karn's First Amendment facial challenge to the ITAR regulations, stating that "[t]he Court will not accept the plaintiff's invitation to address the constitutionality of the "technical data" provisions of the ITAR. . . ." (925 F. Supp. at 12) He erroneously concluded that the "technical data" regulations had not been applied to Mr. Karn and that he therefore lacked "standing" to challenge those regulations. Judge Richey misapplied the decision in Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). That case reiterated the established rule that a party who is not "injured in fact" by agency action does not have standing to challenge that action. In this case there simply is no question that Mr. Karn has been adversely affected by the agency action under review.

The agency did in fact apply the "technical data" regulations to Mr. Karn in this case. Karn contended in his request that the computer diskette, just like the book, was information that was in the public domain within the meaning of the "technical data" regulations and thus did not require an export license. The agency disagreed and construed its regulations to exclude encryption software from the "public domain" provisions in the ITAR regulations. Based on that tortured and unprecedented interpretation, the agency concluded that the diskette, unlike the book, was a "munitions item" that required an export license. We submit that the result of that interpretive legerdemain was, for purposes of standing to challenge the regulations, an application of the "technical data" provisions to Mr. Karn.

The novel interpretation of the regulations adopted by the agency in this case will not withstand analysis. A straight-forward application of the plain meaning of the ITAR leads to the conclusion that the diskette, like the book, is in the "public domain" and not subject to the ITAR regulations. The defendants reach a different conclusion through a route of regulatory construction that is a paradigm of regulatory legerdemain. As articulated by Secretary McNamara in his June 13, 1995, letter to the plaintiff:

the ITAR "public domain" exemption which you and your attorneys claim is applicable to your disk is only available for "information" that otherwise would be "technical data" and cryptographic software does not come within the meaning of technical data. . . . Technical data is defined at ITAR §120.10(a)(1) as "information, other than software as defined in §120.10(d) . . . ."

Secretary McNamara's interpretation of the regulations is, quite simply, untenable as a matter of any "plain meaning" construction. The complete text of the "public domain" in section 120.11 of the ITAR contains no hint, suggestion or warning that it only applies to information "that otherwise would be 'technical data'" as defined in section 120.10. The "public domain" definition is as follows:

  1. Public domain means information which is published and which is generally accessible or available to the public:

(1) Through sales at newsstands and bookstores;

(2) Through subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information;

(3) Through second class mailing privileges granted by the U.S. Government;

(4) At libraries open to the public or from which the public can obtain documents;

(5) Through patents available at any patent office;

(6) Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the United States;

(7) Through public release (i.e., unlimited distribution) in any form (e.g., not necessarily in published form) after approval by the cognizant U.S. government department or agency (see also 125.4(b)(13) of this subchapter);

(8) Through fundamental research in science and engineering at accredited institutions of higher learning in the U.S. where the resulting information is ordinarily published and shared broadly in the scientific community. Fundamental research is defined to mean basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls. University research will not be considered fundamental research if:

  1. The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity, or

  1. The research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.

It is not possible to read into those words Secretary McNamara's additional requirement that the "information" must also meet the separate definition of "technical data" in the preceding section of the regulations.

The flaws in the defendants' regulatory analysis go beyond a mere misreading of the definition of "public domain." Secretary McNamara contends that the only "information" that can fit the "public domain" definition is information that is also "technical data" as defined in a separate provision of the ITAR. He then goes on to both amend and misread that separate provision. The complete regulatory definition of "technical data" is as follows:

(a) Technical data means, for purposes of this subchapter:

(1) Information, other than software as defined in § 120.10(d), which is required for the design development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation;

(2) Classified information relating to defense articles and defense services;

(3) Information covered by an invention secrecy order;

(4) Software as defined in § 121.8(f) of this subchapter directly related to defense articles;

(5) This definition does not include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain as defined in §120.11. It also does not include basic marketing information on function or purpose or general system descriptions of defense articles.

Section 120.10.

The first flaw in the defendants' construction of this regulation is their effort to amend the reference to "software as defined in § 120.10(d)". There is no section 120.10(d) in the ITAR. This error, which has been present in the regulations, uncorrected, since they were last published in their entirety on July 22, 1993, is the reason why Secretary McNamara stated in his letter to the Plaintiff that the citation was incorrect. Secretary McNamara then went on to attempt to amend the published regulations by declaring that the "citation should read §120.10(a)(4)". Defs. Ex. 14.

However, that ad hoc amendment simply will not support the interpretation the defendants attempt. The defendants contend that "the definition of technical data specifically excludes cryptographic software enumerated in category XIII(b)" of section 121.1 of the ITAR. Defs. Mem. at 7. Not only is that interpretation unsupported by any language in the regulations, it is also flatly contradicted by the language of the regulation.

Subsection (a)(4) of the definition of "technical data" expressly includes "[s]oftware as defined in § 121.8(f) of this subchapter . . ." That section provides:

  1. Software includes but is not limited to the system functional design, logic flow, algorithms, application programs, operating systems and support software for design, implementation, test, operation, diagnosis and repair. . . .

On its face, this definition does not exclude any form of software, much less the cryptographic software covered in category XIII(b)(1).

The defendants' construction of the "technical data" provision rests entirely on the second sentence of §121.8(f) which states that "[a] person who intends to export software only should, unless it is specifically enumerated in § 121.1 (e.g., XIII(b)), apply for a technical data license pursuant to part 125 of this subchapter." Defendants somehow read into that parenthetical reference to category XIII(b) an exclusion of such software from the definition of technical data. The text does not support that construction. All that the second sentence says is that persons who wish to export software enumerated in category XIII(b) should not apply for a technical data license. The section does not, in other words, limit the definition of "technical data," but is -- at most -- an inartful limitation on the granting of technical data licenses.

Defendants overlook the most relevant language in the ITAR "technical data" definition which expressly excludes from its coverage "information in the public domain as defined in section 120.11." Therefore, if cryptographic source code are publicly available, they cannot be "technical data" because the regulatory definition of "technical data" expressly excludes public domain information from its coverage.

The published regulations are not vague on their face: Any "information", whether it consists of cryptographic source code or Pulitzer Prize-winning fiction, is outside the ITAR regulatory structure if it meets the regulatory definition of "public domain" material. The interpretation of the ITAR applied in this case is simply an arbitrary re-writing of the published regulations driven by an arbitrary distinction between a diskette and a book. As such, it is unconstitutional under the Due Process Clause and it is a violation of the Administrative Procedure Act which also renders arbitrary and capricious agency action invalid. See 5 U.S.C. § 706(2)(A) (agency action invalid if "arbitrary, or capricious")

V. THE AECA PROHIBITION ON JUDICIAL REVIEW OF PRESIDENTIAL DECISIONS TO INCLUDE ITEMS IN THE ITAR REGULATIONS DOES NOT PRECLUDE REVIEW OF SPECIFIC LICENSING DECISIONS SUCH AS THE ONE AT ISSUE HERE

Judge Richey dismissed the Administrative Procedure Act claim by concluding that a provision in the Arms Export Control Act precluded judicial review. The relevant AECA section states that the "designation by the President . . . in regulations issued under this section, of items as defense articles or defense services for purposes of this section shall not be subject to judicial review." 22 U.S.C. § 2778(h). This provision arguably prohibits a challenge to the inclusion of cryptographic software in Category XIII(b) of the published USML, absent constitutional issues. What the language does not prohibit is this challenge to the government decision that this specific diskette can be subjected to the ITAR regulations. The question of whether a category of items should have been placed on the USML involves policy decisions that might fall within the non-reviewable area of a foreign policy question; however, the question whether a specific item is properly regulated under that category is one of fact which the judiciary is well-suited to address.

Prohibitions on judicial review are to be interpreted narrowly in light of the strong presumption in favor of judicial review. Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670-73 (1986). The Supreme Court has established the standard for overcoming this presumption in favor of judicial review as "a showing of 'clear and convincing evidence' of a contrary legislative intent." Traynor v. Turnage, 485 U.S. 535, 542 (1988). In considering the scope of a judicial review prohibition, the Court gives great weight to the specific language chosen by Congress, and also considers the text and legislative history of the statute. Block v. Community Nutrition Institute, 467 U.S. 340, 345 (1984); Traynor, 485 U.S. at 541-43. For example, in McNary v. Haitian Refugee Center, Inc., 498 U.S. 479, 483 (1991), the Court addressed whether provisions in the Immigration and Nationality Act precluded a federal district court from exercising general federal question jurisdiction.

The judicial review provision in McNary provided: "There shall be no administrative or judicial review of a determination respecting an application for adjustment of status under this section except in accordance with this subsection." 8 U.S.C. § 1160(e)(1). The Court noted that the critical words in the judicial review prohibition referred "only to review 'of a determination respecting an application'" for Special Agricultural Worker status. McNary, 498 U.S. at 491-492, quoting 8 U.S.C. § 1160(e)(1). Because the critical words were in the singular form, the Court interpreted the prohibition to apply only to the denial of an individual application. Thus, a challenge to the application process itself was allowed. Id. McNary illustrates that the presumption in favor of judicial review directs the Court to focus on the narrowest possible interpretation when examining the precise wording of a judicial review prohibition. When applied to section 2778(h) of the AECA, this approach limits the judicial review prohibition to the Secretary of State's listing of items in the USML published regulation only; thus, the prohibition does not bar review of specific factual issues such as the one at issue here.

The text of the AECA also supports an interpretation that allows review of whether an item is properly regulated under the ITAR. The judicial review prohibition applies to "the designation . . . in regulations . . . of items as defense articles or defense services for purposes of this section. . . ." 22 U.S.C. § 2778(h). The same words appears at the very beginning of section 2778 in a paragraph that sheds light on how narrowly Congress intended the judicial review prohibition to apply.

Paragraph 22 U.S.C. § 2778(a)(1) reads in relevant part:

The President is authorized to designate those items which shall be considered as defense articles and defense services for the purposes of this section and to promulgate regulations for the import and export of such articles and services. The items so designated shall constitute the United States Munitions List.

Restated, this paragraph defines the items designated "as defense articles and defense services for purposes of this section" as the USML. Since Congress repeated these exact words in the judicial review prohibition ('as defense articles or defense services for purposes of this section'), Congress must have intended that they receive the same meaning in paragraph (h) as they are defined as in paragraph (a)(1). Thus, since paragraph (a)(1) indicates that these items designated shall constitute the USML, Congress must have intended that the judicial review prohibition similarly apply to only the designation of items on the USML. Such an intention would not prohibit review of the factual determinations involved in deciding whether the State Department can actually regulate an item under one of the USML categories previously designated.

The Supreme Court has allowed judicial review even when faced with a prohibition far more sweeping than that of the AECA. In Lindahl v. OPM, 470 U.S. 768 (1985), the Court allowed judicial review under the Civil Service Retirement Act notwithstanding a provision that decisions by the Office of Personnel Management ("OPM") on "questions of dependency and disability . . . shall be final and conclusive and shall not be subject to review." 5 U.S.C. § 8347(c). The issue before the Court was whether section 8347(c) prohibited judicial review altogether, or only the factual determinations of the OPM, and thus permitting review of questions of law and procedure. The Court noted that

while section 8347(c) plausibly can be read as imposing an absolute bar to judicial review, it also quite naturally can be read as precluding review only of OPM's factual determinations about 'questions of disability and dependency'. . . . [W]hen Congress intends to bar judicial review altogether, it typically employs language far more unambiguous and comprehensive than that set forth in § 8347.

Lindahl, 470 U.S. at 779-80. Based on the presumption favoring judicial review and the precise wording of the text, section 8347 was interpreted as precluding only review of OPM's factual, but not its legal, conclusions. Id. at 779.

The similarity of the dual reading of section 8347 noted by the Court in Lindahl and the dual reading of section 2778(h) in this case is dispositive. In light of the presumption favoring judicial review, the ambiguous language of section 2778(h), the particular wording chosen by Congress, and the lack of a statutory structure supporting a complete prohibition on review, this Court should find that section 2778(h) does not bar the review sought in this case.

The precedent in this Court is consistent with our reading of the statute. This Circuit has placed a narrow construction on statutes that limit judicial review. In Dart v. United States, 848 F.2d 217 (D.C. Cir. 1988), this Circuit had to determine whether the judicial review prohibition in the Export Administration Act ("EAA") was broad enough to prohibit the review of certain functions that were not specified in the language of the EAA's prohibition. The EAA prohibited review of orders of the Secretary that "'affirm, modify, or vacate' an ALJ's initial decision." In Dart, the Secretary had issued an order that did not affirm, modify or vacate an ALJ decision, but instead "reversed" the ALJ's decision. The court found that judicial review of the Secretary's reversal was available based upon the "well-established presumption favoring judicial review and on the particular language, structure and legislative history of the EAA." Id. at 221. That decision is consistent with the "narrow construction" rule that the Supreme Court has held must be applied to legislative attempts to limit judicial review. This Court has also stated clearly that the party seeking to preclude review bears the burden of demonstrating by clear and convincing evidence that Congress intended to restrict access to judicial review. Bartlett v. Bowen, 816 F.2d 695, 699 (D.C. Cir. 1987).

Conclusion

We submit that the irrationality of the Executive action in this case is so clear that this Court could reverse and remand with instructions to enter a declaratory judgment that sets aside the defendants' refusal to treat the diskette as they treated the book. However, given the novelty of the issues and the asserted national security interest, we recognize that it would be more judicious to remand for discovery and a mini-trial to determine the facts with instructions to decide, under the "clear and present danger" test and the Due Process Clause, whether the export of this diskette in fact poses a risk to the national security and whether the distinction drawn between the book and the diskette is rational.

Respectfully submitted,

Dated: September 20, 1996

Kenneth C. Bass, III

Thomas J. Cooper

Venable, Baetjer, Howard & Civiletti, LLP

1201 New York Avenue, N.W.

Suite 1200

Washington, D.C. 20005

(202) 962-4800

Counsel for Appellant

Philip R. Karn, Jr.

DC2DOCS1\29955.1