[February 27, 1997]
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
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)
PETER D. JUNGER, ) CASE NO. 96 CV 1723
)
Plaintiff )
) Judge Nugent
v. )
)
MADELEINE K. ALBRIGHT, Secretary of )
State of the United States, et al )
)
Defendants. )
)
____________________________________)
DEFENDANTS' RESPONSE TO PLAINTIFF'S MOTION
FOR LEAVE TO SUPPLEMENT THE COMPLAINT
INTRODUCTION
On February 13, 1997, plaintiff filed a motion for leave to supplement his complaint in order to challenge new regulations governing the export of encryption software and technical data. As defendants previously advised the Court, the statutory and regulatory authority governing the export of cryptographic products including software) and related technical data changed after oral argument was held on the pending motions to dismiss or for
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summary judgment.1 Export licensing controls on most encryption software and technical data are now administered by the Department of Commerce under the Export Administration Regulations ("EAR"), not the Department of State under the Arms Export Control Act ("AECA") and the International Traffic in Arms Regulations ("ITAR"), which applied when the case commenced. Plaintiff now seeks to challenge the new encryption export controls.
Defendants oppose plaintiff's motion for leave to supplement his complaint. Defendants have raised threshold jurisdictional objections to plaintiff s original complaint that are not resolved by his proposed supplemental complaint (and indeed, are even more apparent). These jurisdictional defects arise primarily from plaintiff's failure to seek any administrative determination as to whether his cryptographic software is subject to export licensing controls. The law is clear that where an amended pleading does not cure the defects of the original pleading and would not survive a motion to dismiss, a motion for leave to amend or supplement should be denied.
Only if the Court decides to reach the merits of his claims should plaintiff be allowed to supplement the complaint to challenge the new EAR controls, and, in the process, the Court should dismiss plaintiff's original claims challenging the AECA and ITAR as moot.
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1 See Defendants Proposed Findings and Fact and Conclusions of Law at 2, 5-8 ("Def.'s Findings & Cl.").
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ARGUMENT
I. PLAINTIFF'S PROPOSED SUPPLEMENTAL COMPLAINT CONTAINS THE SAME JURISDICTIONAL DEFECTS AS HIS ORIGINAL COMPLAINT.
As the Court is aware, defendants have raised jurisdictional objections to plaintiff's original complaint in this action, and these same objections apply with equal force to his proposed supplemental complaint. Defendants' position is set forth at length in our proposed findings and conclusions.2
In sum, plaintiff s original challenge to the AECA/ITAR provisions is now moot since that authority no longer applies in this case. In addition, plaintiff's claims are not ripe, since plaintiff has not properly sought, and the government has not made, any administrative determinations in this action concerning any of plaintiff's proposed export activities. The lack of ripeness is even more pronounced under the proposed supplemental complaint, since the EAR provisions challenged are entirely new and have never been previously at issue or applied to the plaintiff.
Indeed, when plaintiff recently sought clarification from the government concerning the new regulations, the Commerce Department made clear that the information plaintiff submitted was inadequate on which to base a determination as to whether plaintiff's cryptographic software or possible export activities were subject to export licensing. In its January 29, 1997 letter to plaintiff, the Commerce Department stated:
Because you have not provided (the Bureau of Export Administration ("BXA")] with specific information concerning any export activities that Prof. Junger seeks to engage in, BXA
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2 Def.'s Findings & Cl. at 19-32.
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lacks the necessary information to respond to the questions raised in your letter. Based on the information in your letter, we are also unable to provide you with either a Commodity Classification determination regarding the possible application of the EAR to any software or other items Prof. Junger may wish to export or, if it is determined that those activities are subject to the EAR, an Advisory Opinion [as to] whether a license is required, or likely to be granted.
See Tab E to Defendants' Proposed Findings and Conclusions, January 29, 1997 Letter from Commerce Department to Plaintiff at 2. Commerce also advised plaintiff that it is "unable to respond to your inquiry because you have not adequately described the nature of the material Prof. Junger proposes to export." Id. at 5.
Thus, even after defendants raised this objection from the very beginning of this litigation, plaintiff again failed to submit information to the Commerce Department concerning the nature of the software that he wishes to export, or any proposed export activities. As with his challenge to the State Department's regulations, plaintiff seeks to file suit against the Commerce Department and its regulations prior to any determination by the government that his software or activities are in fact subject to export licensing.
Plaintiff's original claim that mere teaching about cryptography is subject to export controls is wholly unsupported to establish standing, as is his challenge to licensing controls on encryption software, since no actual software has been determined to be so controlled.3
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3 In his motion for leave to supplement, plaintiff indicates that his claim concerning the teaching of foreign students about cryptography is now resolved under the new EAR, see Motion for Leave at 1-2, although this is not entirely clear from the proposed supplemental complaint itself, which raises an "academic freedom" claim concerning the use of the Internet to teach about encryption. See Proposed First Supplemental and Amended Complaint, Count Four, ¶ 57. Neither claim is colorable under the regulations and should be dismissed for lack of standing.
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Doctrines supporting First Amendment overbreadth and facial challenges do not save plaintiff s standing in this case, as set forth in defendants' proposed findings and conclusions.4
A district court has discretion to deny leave to amend or supplement a complaint under Fed.R.Civ.P. 15 where the resulting proposed complaint would not survive a motion to dismiss. Thiokol Corp. v. Department of Treasury, 987 F.2d 376, 383 (6th Cir. 1993) (citing Neighborhood Development Corp. v. Advisory Council on Historic Preservation, 632 F.2d 21, 23 (6th Cir. 1980). See also Warren v. Manufacturers National Bank of Detroit, 759 F.2d 542, 546 (6th Cir. 1985).5 Denial of a motion to amend is especially appropriate where the proposed amended pleading "failed to correct the shortcomings of the original pleading. " See Hamilton v. Bean, 745 F.2d 1034, 1036 (6th Cir. 1984). Among the reasons a motion to amend or supplement the original complaint may properly be denied is where the court finds it lacks jurisdiction to consider the claims at issue. See Madison-Hughes v. Shalala, 80 F.3d 1121, 1131 (6th Cir. 1996).
Because the jurisdictional defects that exist with plaintiff's original complaint have not been addressed or resolved in his proposed First Supplemental or Amended Complaint, the Court should deny plaintiff's motion for leave to supplement.6
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4 See Def.'s Findings & Cl. at 25-32.5 Leave to amend may be denied where the amended pleading also would not survive a summary judgment motion. See Wilson v. American Trans Air, Inc., 874 F.2d 386, 392 (7th Cir. 1989).
6 Denial of leave to file an amended complaint is usually reviewed under an abuse of discretion standard. See LRL Properties v. Portage Metro Housing Authority, 55 F.3d 1097, 1104 (6th Cir. 1995) (citations omitted). The Sixth Circuit has held that when the district (continued ...)
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II. IF THE COURT DECIDES TO REACH THE MERITS, THE COMPLAINT
SHOULD BE SUPPLEMENTED AND PLAINTIFF'S ORIGINAL CLAIMS
AGAINST THE AECA AND ITAR SHOULD BE DISMISSED.
If the Court decides to reach the merits of plaintiff's claims, either because it finds jurisdiction exists or, even if jurisdiction is lacking, nonetheless reaches the merits in the alternative so that all district court proceedings can be concluded, then the complaint should be supplemented to encompass the new EAR provisions, since the controls previously at issue under the Arms Export Control Act and the ITAR administered by the State Department are no longer applicable. In this instance, the Court should dismiss as moot the original claims brought by plaintiff, and dismiss the Secretary of State as a defendant.
Plaintiff agrees that, under his supplemental complaint, the Director of the State Department's Office of Defense Trade Controls, William J. Lowell, should be dismissed as a defendant but, inexplicably, would retain the Secretary of State as a defendant. This makes no sense: the Secretary of State and all State Department defendants should be dropped since the ITAR no longer applies here. If the complaint is supplemented, only the Secretary of Commerce should be substituted as a defendant, since he discharges the export licensing authority under the EAR.7
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court bases its decision to deny leave to amend on a legal conclusion that the amended pleading would not survive a motion to dismiss, the decision may be reviewed de novo. Id. (citing Vild v. Visconsci, 956 F.2d 560, 565 (6th Cir.), quoting Martin v. Associated Truck Lines Inc., 801 F.2d 246, 248 (6di Cir. 1986), cert. denied, 506 U.S. 832 (1992).7 The Director of the National Security Agency, Lt. Gen. Kenneth Minihan, is not specifically listed as a party in plaintiff's supplemental complaint and, in any event, should be dismissed as a defendant since NSA, while an agency with expertise and interests in this case, is not the export licensing authority under the EAR.
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If the Court allows plaintiff to supplement his complaint in order to reach the merits, the question arises as to how matters should proceed from here. Both parties' proposed findings of facts and conclusions of law address the merits of the legal issues with reference to the EAR.8 However, plaintiff has also submitted ten new affidavits and exhibits, which defendants did not have a chance previously to address and, therefore, have moved to strike for any consideration at this point in connection with the parties' proposed findings and conclusions. Also, at least one new claim raised by plaintiff, Count Five challenging the President's use of the International Emergency Economic Powers Act to regulate the export of encryption software and technical data under the EAR, has not been briefed, and other specific points raised in the proposed supplemental complaint may not have been addressed by defendants previously.
Accordingly, if the Court reaches the merits and wishes to consider plaintiff's new evidentiary submissions, it may be necessary to have a second round of summary judgment motions so that all evidence, legal claims, and points of authority are addressed before the Court decides the merits of this action based on the supplemental complaint. Absent such further proceedings on the merits, plaintiff's new exhibits should be struck and his claims
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8 Indeed, plaintiff's proposed findings of fact and conclusions of law cannot be considered unless the Court grants plaintiff leave to supplement his complaint and reaches the merits of the EAR claims. Plaintiff acknowledges this in his motion, indicating that he intended to file his proposed supplemental complaint before his proposed findings and conclusions. As presently drafted, plaintiff's Proposed Memorandum Opinion prematurely addresses the constitutionality of the EAR provisions which are not at issue in the original complaint and, thus, not yet before the Court. Defendants' proposed findings and conclusions addressed the merits of plaintiff's claims with respect to both the prior ITAR controls and the new EAR provisions, but only on the assumption that the Court found it had jurisdiction here and allowed plaintiff to supplement his complaint. See Def.'s Findings & Cl. at 2-3. Otherwise, the merits as to the EAR are not before the Court.
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limited to those previously raised. Otherwise, plaintiff would be permitted to bootstrap his new EAR challenge to the final stages of summary judgment proceedings on the prior ITAR provisions, and file new claims, new evidence, and new proposed findings and conclusions without a full response by defendants. The Court may wish to confer with the parties concerning the need for additional briefing and evidentiary submissions.
CONCLUSION
For the foregoing reasons, plaintiff's motion to supplement his complaint should be denied.
Respectfully Submitted,
FRANK W. HUNGER
Assistant Attorney General
EMILY M. SWEENEY
United States Attorney
VINCENT M. GARVEY
Deputy Branch Director
[Signature]
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
901 E Street, N.W.
Washington, D.C. 20530
Tel. (Voice): (202) 514-4782
(FAX): (202) 616-8470 or 616-8460
Attorneys for the Defendants
Date: February 27, 1997
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CERTIFICATE OF SERVICE
I hereby certify that on the 26th day of February 1997, a copy of the foregoing Defendants' Response To Plaintiff's Motion For Leave To Supplement The Complaint, via overnight express mail, on:
Gino J. Scarselli
664 Allison Drive
Richmond Hts., Ohio 44143
Tel: (216) 291-8601
[Signature]
ANTHONY J. COPPOLINO