16-315-cv
Stagg P.C. v. U.S. Dep’t of State
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 16th day of December, two thousand sixteen.
PRESENT: GUIDO CALABRESI,
REENA RAGGI,
GERARD E. LYNCH,
Circuit Judges.
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STAGG P.C.,
Plaintiff-Appellant,
v. No. 16-315-cv
UNITED STATES DEPARTMENT OF STATE,
DIRECTORATE OF DEFENSE TRADE CONTROLS,
JOHN KERRY, in his official capacity only as Secretary
of State,
Defendants-Appellees.
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APPEARING FOR APPELLANT: LAWRENCE D. ROSENBERG (Christopher
B. Stagg, Stagg P.C., New York, New York, on
the brief), Jones Day, Washington D.C.
APPEARING FOR APPELLEE: DOMINIKA TARCZYNSKA, Assistant United
States Attorney (Benjamin H. Torrance,
Assistant United States Attorney, on the brief),
for Preet Bharara, United States Attorney for
1
the Southern District of New York, New York,
New York.
Appeal from an order of the United States District Court for the Southern District
of New York (Shira A. Scheindlin, Judge) denying a preliminary injunction.
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the order entered on January 26, 2016, is AFFIRMED.
Plaintiff Stagg P.C. appeals from the denial of its motion for a preliminary
injunction against the government’s imposition of the registration and licensing mandates
of the Arms Export Control Act (“AECA”), 22 U.S.C. § 2778, and the International
Traffic in Arms Regulations (“ITAR”), 22 C.F.R. §§ 120–130, which regulate the
dissemination of information related to items enumerated on the United States Munitions
List, see 22 C.F.R. § 121. Specifically, the requested injunction would have broadly
enjoined the government from “enforcing any licensing or other approval requirements
for putting privately generated unclassified information into the public domain.” J.A. 8
(emphases added). Our jurisdiction to review the denial order is established by 28
U.S.C. § 1292(a)(1).
Stagg alleges that the challenged licensing system is (1) an unconstitutional prior
restraint under the First Amendment and (2) impermissibly vague under the Fifth
Amendment. While defending the district court’s injunction denial, the government
challenges its ruling that Stagg has standing to maintain this action. We review (1) a
determination as to standing de novo; and (2) the denial of a preliminary injunction for
abuse of discretion, which we will identify only where a decision rests on an error of law
or clearly erroneous finding of fact. See Nicosia v. Amazon, Inc., 834 F.3d 220, 238 (2d
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Cir. 2016). In so doing, we assume the parties’ familiarity with the facts and record of
prior proceedings, which we reference only as necessary to explain our decision to affirm
substantially for the reasons stated by the district court. See Stagg P.C. v. U.S. Dep’t of
State, 158 F. Supp. 3d 203 (S.D.N.Y. 2016).
1. Standing
The district court determined that, “under the lenient standing requirements in
prior restraint cases,” Stagg has standing to pursue this action because it “alleges that it
possesses certain technical data . . . that it wants to aggregate into a set of materials for
presentation to an audience,” which “requires prior approval from the DDTC under the
AECA and the ITAR.” Id. at 209. We agree.
In stating that (1) it presently seeks to disseminate information already in its
possession subject to ITAR’s challenged licensing requirement and (2) it has already
refrained from doing so for fear of being sanctioned, Stagg has alleged the “real or
immediate threat” of future injury necessary for standing. City of Los Angeles v. Lyons,
461 U.S. 95, 111 (1983); see Meese v. Keene, 481 U.S. 465, 473 (1987) (determining that
affidavit stating that challenged law had deterred plaintiff from exhibiting films
established standing). Moreover, a licensing regime is subject to facial challenge as a
prior restraint when it “allegedly vests unbridled discretion in a government official over
whether to permit or deny” publication of speech, even “without the necessity of
[plaintiff’s] first applying for, and being denied, a license.” City of Lakewood v. Plain
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Dealer Publ’g Co., 486 U.S. 750, 755–56 (1988). Accordingly, the district court
correctly rejected the government’s standing challenge to this action.1
2. Preliminary Injunction
A plaintiff seeking a preliminary injunction must establish that (1) he is likely to
succeed on the merits, (2) he is likely to suffer irreparable harm in the absence of
preliminary relief, (3) the balance of equities tips in his favor, and (4) an injunction is in
the public interest. See Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008).
The district court determined that the third and fourth factors required denial of the
preliminary injunction here to avoid “very serious adverse impacts” to national security.
Stagg P.C. v. U.S. Dep’t of State, 158 F. Supp. 3d at 210. We agree.
The content of the speech in question is “technical data,” which ITAR defines as
“[i]nformation . . . required for [inter alia] the design, development, [and] production . . .
of defense articles.” 22 C.F.R. § 120.10(a). Because Stagg (1) has elected not to
identify, even to the district court, the specific content of the material it seeks to publish,
see Stagg P.C. v. U.S. Dep’t of State, 158 F. Supp. 3d at 208; and (2) has requested a
broad injunction against “any licensing or other approval requirements for putting
1
We note that many of Stagg’s arguments on appeal could be read as attacking not the
existing regulatory scheme, but either a proposed regulation that was never adopted, or a
prior regulation that Stagg claims was once in force but has since been repealed.
Constitutional questions about regulations that no longer exist or that have been under
consideration do not present cases or controversies within a court’s Article III
jurisdiction. See Nat’l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 687 (2d Cir.
2013) (“A claim is not ripe if it depends upon contingent future events that may not occur
as anticipated, or indeed may not occur at all.” (internal quotation marks omitted)).
Here, however, the government unambiguously confirmed at oral argument that Stagg
correctly characterizes the government’s interpretation of the existing regulatory scheme
(as noted below). Thus, we agree that Stagg has standing to challenge that scheme as
the government construes it.
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privately generated unclassified information into the public domain,” J.A. 8 (emphases
added) (an injunction which we note would apply also to material that is not presently
publicly available), the district court appropriately “assume[d] the worst case scenario,”
i.e., that the material at issue might communicate, for example, “technical data for
delivery systems for weapons of mass destruction,” or for “chemical and biological
agents,” or “plans for 3D-printable plastic firearms,” Stagg P.C. v. U.S. Dep’t of State,
158 F. Supp. 3d at 210 n.47 & 210–11.
The national security concerns raised by a preliminary injunction that barred the
government from licensing, and thereby controlling, the dissemination of such sensitive
information are obvious and significant. We note that the government does not merely
invoke national security as “a broad, vague generality” of the sort that cannot “abrogate
the fundamental law embodied in the First Amendment.” New York Times Co. v. United
States, 403 U.S. 713, 719 (1971) (Black, J., concurring). Rather, it has set forth specific
concerns relating to the export of “technical data” as defined in ITAR. As a State
Department official explained in a sworn affidavit, a preliminary injunction would “cause
significant harm to the national security and foreign policy interest of the United States,”
due to the potential for “[u]ncontrolled disclosure of technical data on the development,
production, or deployment of weapons of mass destruction” or “the potential release of
technical data for delivery systems of” such weapons to “someone set on creating mass,
indiscriminate, civilian casualties” or a “foreign adversary.” J.A. 95. Indeed, “[a]bsent
the inclusion of ‘technical data[]’” within ITAR’s licensing structure, the statutory “limits
on arms transfers would be of negligible practical effect because [they] would leave
unregulated the exportation of the technology, know-how, blueprints, and other design
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information sufficient for foreign powers to construct, produce, manufacture, maintain,
and operate the very same equipment regulated in its physical form by the ITAR.” Id. at
90. In matters of national security, which present the most compelling national interest,
see Haig v. Agee, 453 U.S. 280, 307 (1981); American Civil Liberties Union v. Clapper,
785 F.3d 787, 826 (2d Cir. 2015), we accord considerable “deference” to such an
“evaluation of the facts by the Executive,” Holder v. Humanitarian Law Project, 561
U.S. 1, 33 (2010); see also Winter v. Nat. Res. Def. Council, Inc., 555 U.S. at 27. Thus,
the government presents a valid case—unrefuted by Stagg—for balancing the equities in
their favor and finding that the public interest weighs against this injunction.
Stagg contends that the district court’s reliance solely on national security to deny
the preliminary injunction is foreclosed by New York Times Co. v. United States, 403
U.S. 713. We are not persuaded. While it could not be said that disclosure of the
materials there at issue would “result in direct, immediate, and irreparable damage to our
Nation or its people,” id. at 730 (Stewart, J., concurring), that is just the conclusion that
the district court was entitled to draw here so long as Stagg refuses to disclose to a court
the information it wants to shield from ITAR. Further, here we deal with a statutorily
authorized regulatory scheme, which implicates legislative as well as executive judgment
about the national security interest in controlling information for the production of
defense articles on the U.S. Munitions List. See id. at 718 (Black, J., concurring).
Having carefully scrutinized the specific national security interests presented by
the government, we conclude that its stated interests outweigh Stagg’s claimed harm.
The government has articulated specific, concrete damage to national security that could
result if the district court entered Stagg’s broad proposed injunction. The specificity of
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the government’s contentions contrasts sharply with the vagueness of Stagg’s allegations
and its refusal to provide the district court with sufficient information to assess the
plausibility of the government’s national security arguments. Thus, the district court did
not abuse its discretion when it found that the public interest in maintaining national
security weighed against granting a preliminary injunction in this case.
In these circumstances, where the balance-of-equities and public interest factors
weigh so heavily against a preliminary injunction, we need not decide whether Stagg is
likely to succeed on the merits or to suffer irreparable harm. See American Civil
Liberties Union v. Clapper, 785 F.3d at 826 (declining to order preliminary injunction in
light of national security interests even where success on merits was certain); see also
Defense Distributed v. U.S. Dep’t of State, 838 F.3d 451, 458 (5th Cir. 2016) (affirming
denial of preliminary injunction against ITAR on balance-of-equities and public interest
factors alone). Accordingly, we identify no abuse of discretion in the district court’s
denial decision.
But just as Stagg’s refusal to disclose—even to the district court—the information
it seeks to publish, and whether that information is already publicly available, makes it
appropriate to deny the broad preliminary injunction sought, we note concern with the
government’s representations at oral argument. Specifically, government counsel
argued that ITAR applies to republication of information already in the public domain.
While a June 3, 2015 proposed rule would add a subsection to the definition of “public
domain” making clear that “[t]echnical data . . . is not in the public domain if it has been
made available to the public [initially] without authorization,” 80 Fed. Reg. 31,525,
31,535, and would proscribe the “mak[ing] available to the public [of] technical data . . .
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if [a party] has knowledge that the technical data . . . was [first] made publicly available
without an authorization in § 120.11(b),” id. at 31,538, it is unclear where in the current
ITAR such a prohibition can be located. Indeed, government counsel was unable to
direct us to a provision that qualifies 22 C.F.R. § 120.10(b), which presently exempts
from the definition of technical data, subject to ITAR, inter alia, “information in the
public domain as defined in § 120.11.” We do not pursue the point further here or
predict how it might be decided on full briefing. We state only that, while we affirm the
order denying the broad injunction sought by Stagg, we do so without prejudice to the
pursuit of narrower relief in the district court.2
3. Conclusion
We have considered Stagg’s remaining arguments and conclude that they are
without merit. Accordingly, we AFFIRM without prejudice the order denying
preliminary injunctive relief.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
2
Insofar as comments in the district court’s opinion are skeptical of a narrower
injunction, we do not understand them to reflect any ruling, particularly as no narrower
relief or supportive briefing was then before the court.
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