The federal government in 2013 told Defense Distributed—a company whose business involves the distribution of tools and software for the 3D-printing or otherwise home-milling of weapons—that certain software files it distributed constituted the illegal export of armaments under International Traffic in Arms Regulations (ITAR) and the Arms Control Export Act (AECA).
Seeing the files as analogous to a book containing instructions on how to make a gun, Defense Distributed, along with other parties, sued the State Department in 2015 on First Amendment grounds. The federal government settled that lawsuit in July 2018. As part of the settlement, the feds announced certain such software files, known generically as CAD files (for computer-aided design), would be removed from the United States Munitions List (USML). Items on that list require a license to export.
Within days of that announcement, various states and the District of Columbia sued the federal government for taking the files off the list, claiming that the removal was done "in violation of the Administrative Procedure Act [APA]." The plaintiffs claimed that "there is no indication in the settlement agreement or elsewhere that any analysis, study or determination was made by the government defendants in consultation with other agencies before the federal government agreed to lift export controls on the downloadable guns." The plaintiffs also said the decision "violates the Tenth Amendment by infringing on states' rights to regulate firearms."
This week, Judge Robert A. Lasnik of U.S. District Court for the Western District of Washington, in deciding on motions for summary judgment in that suit, State of Washington et al. v. U.S. Department of State et al., agreed that removing those files from the USML was unlawful based on the APA arguments (though not the 10th Amendment ones), and reversed the federal government's choice to allow free distribution of the files.
As discussed in Lasnik's decision, the federal government's initial reaction to the states' suit "justified the deregulation of the CAD files [that could help make weapons]…by pointing to a Department of Defense determination that the items 'do not provide the United States with a critical military or intelligence advantage' and 'are already commonly available and not inherently for military end-use.'"
However, the government has been temporarily enjoined from following through on their "temporary modification of the USML" as the suit progressed. In practical terms, this has been meaningless to any actual interest of the states suing, unless that interest was just to bedevil Defense Distributed, as the files—like most things on the internet—can be and are widely distributed by anyone else who pleased besides Defense Distributed. They're just files, after all, and nothing on the internet is easier to share.
Defense Distributed argued that the State Department's decision should lawfully be at the government's discretion with no judicial overview. Lasnik admits that "The AECA expressly commits one type of decision to agency discretion, namely the decision to designate an item as a defense article or defense service."
But the rub, as Lasnik sees it, is that the regulatory decision the plaintiffs were challenging was not about designating files, but rather removing them from USML. Lasnik thinks the suing states have legitimate cause to challenge the government's "failure to comply with statutory procedures and/or to consider certain congressionally-specified factors when making removal decisions under AECA. Congress did not expressly make such removal decisions unreviewable."
The federal government, for its part, argued that the suing states were not legitimately injured parties who should have legal standing to sue, though Lasnik concluded that "the States' interests in curbing violence, assassinations, terrorist threats, aviation and other security breaches, and violations of gun control laws within their borders are at least marginally related to the interests protected or regulated by the AECA."
Lasnik concluded that the removal of the CAD files from USML was done illegitimately without legally required 30-day notice to Congress, and that, despite arguments to the contrary from Defense Distributed,
this procedural failure cannot be rectified by providing Congressional notice thirty days in advance of making the 'temporary' removal 'final:' the temporary modification implemented the removal immediately, without waiting for the proposed rule to become final and without giving Congress notice and an opportunity to exercise its oversight role. Because the removal to which the States object occurred as of July 27, 2018, a subsequent notice is obviously not timely under the statute.
Thus, the removal "must be held unlawful and set aside under §706 of the APA."
Lasnik also finds the removal decision to be illegally "arbitrary and capricious" because "Congress directed the agency to consider how the proliferation of weaponry and related technical data would impact world peace, national security, and foreign policy," and that the State Department seemed to evaluate "export controls on small caliber
firearms only through the prism of whether restricting foreign access would provide the United States with a military or intelligence advantage," which is too narrow.
Judge Lasnik thus believes "the delisting was not 'based on consideration of the relevant factors and within the scope of the authority delegated to the agency by the statute,' [thus] it must be invalidated under the APA." Lasnik believes the State Department should be required to give more detailed reasoning for why they changed their mind on the USML listing of those files, since the government "failed to identify substantial evidence in the administrative record explaining a change of position that necessarily contradicts its prior determinations and findings regarding the threats posed by the subject CAD files and the need to regulate the same under the AECA."
Nothing in Lasnik's decision gives any consideration to the notion that the very lawsuit against the government, which the government was settling when they made that decision, argued that having those files on the USML violated the First Amendment rights of Defense Distributed. Because it was a settlement and not a decision on the merits, the government is not on record as saying it agreed its previous actions violated the First Amendment.
The Lasnik decision ignored free speech in his close-focus on APA consideration, though the judge did point out that the federal government "has not relied on the First Amendment as justification for its action, and neither the Court nor the private defendants may supply a basis for the decision that the agency itself did not rely upon."
Chad Flores, lead counsel for Defense Distributed, said in an email today in reaction to Lasnik's decision that "The First Amendment protects the freedom of speech from all abridgment, including this lawsuit's indirect censorship methods. The APA is important, but no statute can require the federal government to violate the First Amendment."
In Flores' eyes, "with today's unprecedented ruling, a few rogue state officials have commandeered the State Department to do their unconstitutional bidding nationwide. Defense Distributed will be appealing and fully expects a swift reversal."