97 MAR 5 AM 11:34
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
PETER D. JUNGER, ) CASE NO. 96 CV 1723
) Plaintiff ) ) JUDGE DONALD C. NUGENT v. ) )
MADELEINE K. ALBRIGHT, et al. )
) Defendants. )
PLAINTIFF'S REPLY TO
DEFENDANTS' OPPOSITION TO THE MOTION FOR LEAVE
TO FILE FIRST SUPPLEMENTAL AND AMENDED COMPLAINT
Defendants argue that Plaintiff's motion for leave to file a supplemental and amended complaint should be denied. In the alternative, Defendants argue that the Court should dismiss the Secretary of State and the claims under the International Traffic in Arms Regulations (ITAR), 22 C.F.R. §§ 120 et seq., and the Arms Export Control Act (AECA), 22 U.S.C. § 2778, which were raised in the original complaint, because jurisdiction over encryption has been transferred from the State Department to the Commerce Department under amendments to the Export Administration Regulations (EAR), 15 C.F.R. Part 730 et seq., reprinted at 61 Fed. Reg. 68572-87 (December 30, 1996). For the following reasons. Plaintiff's motion to supplement the complaint (and retain the claims under the ITAR and the AECA) should be granted.
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I. Plaintiff's Motion for Leave to File a Supplemental and Amended Complaint Should Be Granted
Leave to file an amended or supplemental complaint should be freely granted.1 I Crawtord v. Roane, 53 F.3d 750, 753 (6th Cir. 1995); Janikowski v. Bendix, 823 F.2d 945, 951 (6th Cir. 1987) (noting the Sixth Circuit's liberal position with respect to amending complaints); Andrade v. Crawford & Co., 786 F. Supp. 1302 (N.D. Ohio 1992) (allowing complaint to be amended after the Civil Rights Act of 1991 became etfective while the case was pending); Quarantino v. Tiffany & Co., 71 F.3d 58. 66 (2d Cir. 1995) (leave to file supplemental complaint should be freely granted when supplemental facts are connected to original complaint).
A motion to supplement or amend a complaint may include new parties or new claims. Wright & Miller, 6A Federal Practice and Procedure § 1504 (1990). and should be granted unless there is a "significant showing of prejudice" to the opposing party. Janikowski, 823 F.2d at 951 (citing Moore v. City of Paducah, 790 F.2d 557, 562 (6th Cir. 1986); Quarantino, 71 F.3d at 66. Here, the Defendants have not been prejudiced. Counsel for the Defendants was informed that Plaintiff would file a second complaint once the amendments to the EAR became effective. Courts have even allowed supplemental complaints after the close of discovery. Matthew Bender & Co. v. Hyperlaw, Inc., 1995 U.S. Dist. LEXIS 17688 at *8-9 (S.D.N.Y. November 28. 1995). In the instant action, the reason the Plaintiff moves to file a second complaint (and otfer additional evidence)2 is because the President has transferred control over (nonmilitary) encryption to the EAR, at least for the present time, and therefore, the Secretary of Commerce and EAR claims must be added. The Defendants offer a single argument against granting leave: The Plaintiff's motion
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1 The same standards for granting leave to file an amended complaint apply to supplemental complaints. See Klos v. Haskell, 835 F. Supp. 710, 715 (W.D.N.Y. 1993) aff'd 48 F.3d 81 (2d Cir. 1995).
2 See Plaintiff s Reply to Defendants' Opposition to the Motion to Refile the Proposed Memorandum with Exhibits and Defendants' Motion to Strike.
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should be denied because the supplemental and amended complaint fails to cure jurisdictional defects in the original complaint. The Defendants' argument rests on their repeated claim that Professor Junger lacks standing, under the original complaint and the proposed complaint, because he has not submitted information about his encryption program or any other software that he intends to "export."
Both sides have fully briefed the standing issue. Plaintiff has argued that he does not have to submit software or any other information for prepublication review in order to bring a fdcial challenge under the First Amendment. See Proposed Mem. Op. at 21-35. Moreover. any jurisdictional defects in the original complaint related to his applied challenges may be cured in a supplemental complaint.3 Black v. Secretary of Health and Human Services, 93 F.3d 781, 789- 90 (Fed. Cir. 1996): see also Brammer v. United States, 897 F. Supp. 1022, 1023 (N.D. Ohio 1995).
The Court has not yet ruled on the standing issue. Unless the Court is convinced that Plaintiff lacks standing under both the original and proposed complaints, Plaintiff's motion for leave to file should be granted.4
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3 Defendants have expressed some doubt about the status of Plaintiff's "teaching" claim. which was raised in the original complaint. Teaching encryption to foreign students within the classroom or in discussions outside of class is not controlled under the EAR unless a professor uses the internet to teach or sends encryption software to students (and anyone else for that matter) by way of the intemet. Therefore, in the proposed complaint, the Plaintiff has not claimed that he cannot let foreign students take his "Computers and the Law" class without violating the EAR. He cannot, however. use the internet to teach or distribute his program, the instructions to create a working version of his program or any other encryption software, and therefore, he has challenged the EAR as violating rights of academic freedom. See First Supp. and Am. Compl. at 10-11 (Count Four).
4 Defendants correctly note that a decision to deny leave to file a supplemental or amended complaint may be reviewed de novo if the district court's decision is based on a legal conclusion, such as a conclusion that the plaintiff lacks standing. See LRL Properties v. Portgage Metro Housing Authority, 55 F.3d 1097, 1104 (6th Cir. 1995) (cited in Defendants Memorandum at 5-6 n. 6).
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II. The ITAR and AECA Claims and the Secretary Of State Should Not Be Dismissed at This Time
The Defendants also argue that the Secretary of State and the ITAR (and AECA) claims should be dismissed because those claims are moot. The ITAR and AECA claims should not be dismissed unless it is clear that the President will not transfer jurisdiction back to the ITAR. Even if the Court dismisses the ITAR and AECA claims, however, the Secretary of State should not be dismissed.
In the memorandum accompanying the executive order of November 15, 1996, the President reserved the right to transfer jurisdiction back to the State Department under the ITAR:
Upon enactment of any legislation reauthorizing the administration of export controls, the Secretary of Defense, the Secretary of State. and the Attorney General shall reexamine whether adequate controls on encryption products can be maintained ... If adequate controls on encryption products cannot be maintained under a new statute, then such products shall ... be designated or redesignated as defense articles under 22 U.S.C. 2778(a)(1), to be placed on the United States Munitions List and controlled pursuant to the terms of the Arms Export Control Act and the International Traffic in Arms Regulations....
President's Memorandum ¶ 8 (November 15, 1996) (emphasis added).
The President has transferred control over encryption to the EAR by signing an executive order and can transfer jurisdiction back to the ITAR by simply signing another executive order.5 The likelihood that the President will transfer control back to the ITAR is greater now that bills relaxing controls on encryption have been introduced in the House and Senate. See H.R. 105, 105th Congress (February 12, 1997); S. 376 and S. 377, 105th Congress (February 27, 1997). Thus, at this time, it would be premature for the Court to dismiss the ITAR and AECA claims. If the Court grants leave to file the supplemental and amended complaint, any claims that the Court decides are moot can be dismissed in a ruling on the merits.
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5 In the supplemental and amended complaint, Plaintiff challenges the President's power to transfer control to the EAR under the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. §§ 1701-06. See Supp. and Am. Compl. at 11-12 (Count Five).
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The Secretary of State, however. should not be dismissed as a defendant. Under the EAR. the State Department has the authority to review license applications submitted to the Commerce Department s Bureau of Export Administration.6 See 15 C.F.R. § 750.3. 61 Fed. Reg. 12830 (March 25, 1996). Therefore, the Secretary of State is a proper party to a suit challenging the EAR.
For the foregoing reasons, Plaintiff's motion for leave to file the First Supplemental and Amended Complaint should be granted.
Respectfully submitted,
[Signature]
GINO J. SCARSELLI (0062327)
664 Allison Dr.
Richmond Hts., OH 44143-2904
(216)291-8601
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6 0ther Departments, including the Departments of Defense and Justice, could have been added as proper parties because they also have authority to review license applications. See id. § 750.3; see also 61 Fed. Reg 68585 (December 30, 1996).
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CERTIFICATE OF SERVlCE
The undersigned hereby certifies that a copy of the foregoing was served on March 4, 1997, upon Anthony J. Coppolino, Department of Justice, Civil Division Room 1084, 901 E Street. N.W., Washington, D.C. 20530 by Express Mail.
Respectfully submitted,
[Signature]
Gino J. Scarselli (0062327)
664 Allison Drive
Richmond Hts., OH 44143
Tel. 216-291-8601
Fax 216-291-8601
Attorney for the Plaintiff