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Daniel J. Bernstein v. United States Department of Justice, et al.

No. 97-166686 (9th Cir. May 6, 1999)

In this case, the Ninth Circuit wrestled with Professor Daniel Bernstein's continuing challenge to the constitutionality of various governmental regulations that attempt to restrict the export of software encryption programs.

The Export Administration Regulations , 15 C.F.R. Pts. 730 - 734("EAR") prohibit the export of designated encryption software without a license. To obtain such a license, one must apply to the appropriate government agency, which reviews the application on a case by case basis to determine if the export is "consistent with United States national security and foreign policy interests." Such application must either be resolved, or referred to the President, within 90 days. The President, however, is given an unlimited time period in which to rule on the propriety of any application referred to him. Appeals from a license denial, either by the President or the agency, must be completed "within a reasonable time."

Professor Bernstein contended that these regulations represent an unconstitutional prior restraint on speech that runs afoul of the First Amendment. By a vote of two to one, the Ninth Circuit agreed.

To prevail on his claim, Bernstein must both have standing to advance a facial attack to the EAR regulations and demonstrate that those regulations constitute an impermissible prior restraint on speech.

To bring a facial attack on a licensing scheme like that at issue, the Ninth Circuit held, Bernstein must show both that the licensing scheme "gives a governmental official or agency substantial power to discriminate based on the content or viewpoint of speech by suppressing disfavored speech or disliked speakers" and has "a close enough nexus to expression or to conduct commonly associated with expression to pose a real and substantial threat of ... censorship risks."

The Ninth Circuit held that Bernstein had standing to bring a facial attack to these regulations. The EAR regulations invest in administrators the power to deny a license application if it is inconsistent with "United States national security and foreign policy interests." Said the court "[o]bviously, this constraint on official discretion is little better than no constraint at all."

The court further held that "source code" can be used by individuals to express their thoughts for First Amendment purposes, and thus that the licensing scheme in question affected expression so as to render it subject to scrutiny under the First Amendment. This holding was based on the court's determination that those trained in computer programming can both read and use source code to communicate with one another. The court analogized source code to equations and formulas utilized by mathematicians. Said the court:

Cryptographers use source code to express their scientific ideas in much the same way that mathematicians use equations or economists use graphs. Of course, both mathematical equations and graphs are used in other fields for many purposes, not all of which are expressive. But mathematicians and economists have adopted these modes of expression in order to facilitate the precise and rigorous expression of complex scientific ideas. Similarly, the undisputed record here makes it clear that cryptographers utilize source code in the same fashion.

The court reached this conclusion despite the fact that source code can easily be compiled by a compiler into object code, which in turn can be used to operate a computer.

While source code, when properly prepared, can be easily compiled into object code by a user, ignoring the distinction between source and object code obscures the important fact that source code is not meant solely for the computer but is rather written in a language intended also for human analysis and understanding.

The court went on to conclude that the challenged regulations constituted an impermissible prior restraint on speech in violation of the First Amendment. The court noted that not all prior restraints on speech are prohibited by the First Amendment. Rather, the "heavy presumption against prior restraints may be overcome where official discretion is bounded by stringent procedural safeguards." When applied to licensing schemes, this requires that "(1) any restraint must be for a specified brief period of time; (2) there must be expeditious judicial review; and (3) the censor must bear the burden of going to court to suppress the speech in question and must bear the burden of proof." Because the licensing scheme at issue did not set a time limit by which the appropriate agency had to either pass on an application for a license or determine any appeal from such a ruling, the court held that it lacked the requisite procedural safeguards, and was an impermissible restraint on speech. As a result, the Ninth Circuit held that the regulations at issue were unconstitutional.

It is likely that this issue will be brought to the attention of the Supreme Court. Each of the three panel members who ruled on this appeal wrote separate opinions. Judge Fletcher, who wrote the majority opinion, was joined in a concurrence by Judge Bright, who stated that he joined because "the speech aspects of encryption source code represent communication between computer programmers" that were protected by the First Amendment. However, Judge Bright noted that he found merit in the dissent's opinion that source code is often not expressive speech, and suggested that "this case ... may be appropriate for review by the United States Supreme Court."

The dissent rests on its conclusion that, in the main, source code is not expressive speech, but rather a functional tool utilized in the operation of computers. As such, concluded the dissent, because the challenged licensing scheme is not narrowly directed at expression or conduct commonly associated with expression, plaintiff Bernstein was not permitted to bring a facial challenge to the statute under the First Amendment. As explained by the dissent:

Export of encryption source code is not conduct commonly associated with expression. Rather it is conduct that is normally associated with providing other persons with the means to make their computer messages secret. ... The EAR is not specifically directed towards stifling the expressive nature of source code or Bernstein's academic discussion about cryptography. ... Thus, the EAR is generally directed at non-expressive conduct -- the export of source code as a tool to make messages secret and impervious to government eavesdropping capabilities.

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