983 F.3d 589
2d Cir.2020Background
- Stagg, P.C., a law firm advising on export controls, sued the State Department and DDTC challenging ITAR licensing as an unconstitutional prior restraint and vague under the First and Fifth Amendments.
- ITAR (under the AECA) requires licenses for exports of "technical data," but excludes "information in the public domain," defined by §120.11 (e.g., published material available at bookstores or libraries).
- Stagg alleged it intended to publish and present free educational materials—including republication, aggregation, and some unspecified "modifications" of publicly available technical information—and feared prosecution based on DOS public statements (2013 and 2015) suggesting unauthorized public releases or aggregation could be ITAR-controlled.
- The district court granted summary judgment to Defendants, finding the ITAR text unambiguously did not treat Stagg’s pleaded activities as requiring a license; it also addressed standing and constitutional claims.
- The Second Circuit agreed the ITAR unambiguously exempts the categories of public-domain material Stagg pleaded, held aggregation or innocuous form-changes do not remove public-domain status (substantive content changes or application to defense articles might), and concluded Stagg’s constitutional challenges are moot for lack of an Article III case or controversy; the district court judgment was vacated and the suit dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Stagg’s intended republication of materials qualifies as "public domain" and thus falls outside ITAR licensing | Stagg: materials (bookstore/library publications) are public-domain but DOS statements make republication risky and subject to licensing | DOS: ITAR §120.11 unambiguously exempts published, generally accessible materials; agency statements cannot override plain text | Held: ITAR unambiguously exempts such published materials; DOS statements inconsistent with the regulation carry no effect |
| Whether aggregation or modification of public-domain materials converts them into ITAR-controlled "technical data" | Stagg: aggregation/modification could be subject to licensing per DOS notices | DOS: aggregation alone does not create control except in limited circumstances (e.g., aggregation for application to a defense article or adding proprietary/substantive content) | Held: aggregation or innocuous form-changes do not remove public-domain status; substantive content changes or application to a defense article would be covered |
| Whether Stagg has Article III standing / the case is moot after statutory construction | Stagg: had standing at outset and may press facial constitutional claims; Qlik means standing assessed at outset | DOS: after court construction showing ITAR does not apply, no credible threat of enforcement; claims are moot | Held: Stagg no longer has a personal stake; its claims are moot and the suit must be dismissed for lack of Article III jurisdiction |
| Whether Stagg may maintain a facial prior-restraint/vagueness challenge even if ITAR does not apply to its pleaded acts | Stagg: Freedman and Lakewood permit facial attacks on licensing schemes without applying for a license | DOS: plaintiff must show injury or credible threat; cannot bring a facial challenge when the scheme does not apply to its conduct | Held: Plaintiff cannot maintain a facial challenge absent a live injury; Freedman/Lakewood do not authorize challenges to licensing rules that do not apply to the plaintiff’s alleged conduct |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete, particularized, actual or imminent injury)
- Susan B. Anthony List v. Driehaus, 573 U.S. 149 (2014) (pre-enforcement challenges require credible threat of prosecution)
- Freedman v. Maryland, 380 U.S. 51 (1965) (facial challenge permitted to licensing schemes when plaintiff is subject to law)
- City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750 (1988) (unbridled discretion in licensing permits facial challenge when plaintiff is subject to law)
- Klein v. Qlik Techs., Inc., 906 F.3d 215 (2d Cir. 2018) (standing evaluated at outset; loss of stake during litigation implicates mootness)
- Christensen v. Harris County, 529 U.S. 576 (2000) (no deference to agency interpretation that conflicts with an unambiguous regulation)
- United States v. Sanchez-Gomez, 138 S. Ct. 1532 (2018) (mootness requires a personal stake at all stages)