State of Washington v. U.S. Dept. of State, 996 F.3d 552

Background

In 1976 Congress authorized the President to "designate those items which shall be considered defense articles" (22 U.S.C. § 2778), a power later exercised by the State Department via the ITAR and the U.S. Munitions List (ML); Congress in 1981 required 30-days' congressional notice before removing items from the ML.
In 1989 Congress added § 2778(h): "The designation . . . of items as defense articles . . . shall not be subject to judicial review."
The Export Control Reform Act (Reform Act) gives Commerce authority over non-ML items and provides that "functions exercised under [the Reform Act] shall not be subject to" several APA provisions (50 U.S.C. § 4821(a)).
On May 24, 2018 DOS proposed removing certain small‑caliber firearms and associated technical data (including 3D‑printed gun files) from the ML and transferring jurisdiction to Commerce; Commerce proposed to assume jurisdiction the same day.
On January 23, 2020 DOS and Commerce issued corresponding Final Rules; Commerce added a new EAR provision (15 C.F.R. § 734.7(c)) in its Final Rule to address online posting.
Twenty-two states and D.C. sued under the APA seeking to enjoin the rules; the district court preliminarily enjoined only the DOS Final Rule. The agencies appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 2778(h) bars judicial review of DOS's decision to remove (undesignate) items from the Munitions List	Undesignation is distinct from "designation" and §2778(h) does not preclude review of removals; removals were meant to remain reviewable	The same statutory phrase covers designations and undesignations; Congress precluded judicial review of both	Court: §2778(h) precludes judicial review of both designation and undesignation (clear and convincing evidence)
Whether Commerce's Final Rule is reviewable given the Reform Act exemption and sovereign immunity	Rulemaking that affects ITAR transfers can be reviewed; joint action with DOS permits judicial review of the system as a whole	Reform Act expressly exempts functions exercised under it from APA §§551, 553–559, 701–706; §702 waiver does not apply -> sovereign immunity bars suit	Court: Commerce Final Rule (functions under Reform Act) is exempt from APA and effectively not judicially reviewable (sovereign immunity not waived)
Whether the district court could enjoin DOS's Final Rule based on procedural defects in Commerce's Final Rule	DOS action was entwined with Commerce's changes; district court properly relied on Commerce's procedural flaws to enjoin DOS	Commerce acted under the Reform Act and its rule is unreviewable; DOS Final Rule was substantively identical to its proposal and cannot be enjoined for perceived Commerce defects	Court: District court erred to enjoin DOS in part because of perceived procedural defects in Commerce's unreviewable Rule
Whether plaintiffs showed likelihood of success (preliminary injunction)	DOS rule was arbitrary and capricious and lacked adequate notice; plaintiffs likely to succeed on merits	Agencies argued rules are unreviewable; if reviewable, they addressed comments and national security concerns	Court: Because both rules are unreviewable, plaintiffs failed to show likelihood of success; injunction vacated

Key Cases Cited

Abbott Laboratories v. Gardner, 387 U.S. 136 (1967) (presumption of judicial review can be overcome only by clear and convincing evidence)
Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560 (2012) (same words in same statute presumptively have the same meaning)
Wisc. Cent. Ltd. v. United States, 138 S. Ct. 2067 (2018) (interpret statutes by ordinary public meaning at enactment)
La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355 (1986) (agencies act only pursuant to delegated congressional authority)
Decker v. Nw. Env’t Def. Ctr., 568 U.S. 597 (2013) (interpretive presumption favoring validity that preserves statute’s operation)
Mohasco Corp. v. Silver, 447 U.S. 807 (1980) (avoid reading a statute to give same phrase different meanings within same section)
Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008) (preliminary injunction requires likelihood of success on merits)
FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009) (agency must provide reasoned explanation for changes in policy)