Firm Loses Prior-Restraint Case Over Military Blueprints

MANHATTAN (CN) – Ruling against a law firm that issues reports on export controls, a federal judge refused to block possible restrictions on the dissemination of military blueprints, even for materials in the public domain.

U.S. District Judge Katherine Failla found that the law firm Stagg PC has legitimate concerns about the U.S. State Department’s proposed rules, but that the challenge here must focus only on existing rules. 

The existing rules, known as the International Traffic in Arms Regulations, were adopted during the Cold War. Among other things, they require weapons makers and dealers to obtain licenses before exporting into the public domain technical data related to “defense articles,” such as blueprints or sketches for tanks and nuclear weapons. 

In 2015, however, the State Department proposed changes specifying that publicly available technical data that had been aggregated or released without government authorization would not be considered in the public domain. The proposed rules never passed.

The State Department had maintained that the proposed rules were really a clarification, telling Judge Failla in briefings that they were “a more explicit statement of the ITAR’s requirement that one must seek and receive a license or other authorization from the Department or other cognizant U.S. government authority to release ITAR controlled ‘technical data.’”

Stagg,  a niche law firm specializing in export-control issues for aerospace, defense and technology companies,  claimed in its lawsuit, however, that it feared government prosecution if it published sensitive technical data online.

Besides offering legal advice and consulting services, Stagg publishes free brochures and gives presentations on export-control matters that share technical data, which it claims are already available in bookstores and libraries, despite not being officially authorized by the U.S. government.

Stagg claimed the rule proposal was “unconstitutional prior restraint on speech, is overly vague, lacks any procedural safeguards, provides boundless discretion to government officials, and fails to provide any judicial review.”

Fighting for an injunction, the firm went all the way to Washington for relief. The Supreme Court denied it a writ of certiorari last year, however, and on Wednesday Judge Failla awarded the government summary judgment.

Though she agreed Stagg’s fears of prosecution lent it standing to seek injunctive relief, Failla found that the existing text of the statute presented no prior-restraint problems and was clear on what constituted information in the public domain.

“Nothing in the current ITAR’s definition of public domain can reasonably be interpreted to suggest that data that would otherwise qualify as public domain does not solely because it became publicly available without government authorization,” she wrote.

The ruling notes that the State Department now explains on its website, under “frequently asked questions,” that information from library books and other publicly available sources do not require government approval for republication. 

In addition to saying nothing in the FAQ about liability for aggregating public domain materials, the department posted a notice in the Federal Register in 2013 that said it would be unlikely for a company to create new non-public data using public domain materials.

“Nowhere does the ITAR mention, or conceivably imply, that prior government authorization is required for public domain status,” Failla wrote.

Christopher Stagg, who founded the firm in 2014, did not comment on the ruling but said he will appeal the decision.

The State Department did not immediately comment on the ruling.

In the 42-page opinion, Failla took issue with how both sides crafted their arguments.

“Even today, years into the litigation, the parties’ disputes occasionally tilt toward the speculative or the hoped-for, rather than the actual,” she wrote in the beginning of the opinion.

Failla noted the State Department refused to say whether it could prosecute Stagg for republishing information already in the public domain, despite no such mention in the government’s opening or reply briefs.

She also noted that under Stagg’s arguments, any unclassified technical data leaked online could be considered fair game for republishing and that “everything on the Internet does not qualify as a ‘library’ solely by virtue of its presence online.”

ITAR-controlled data culled from the internet are still subject to the same licensing requirements as other technical data not in the public domain, Failla wrote, shooting down what she said were Stagg’s “case for internet exceptionalism.”

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