Bernstein v. United States Department of Justice

The government defendants appeal the grant of summary judgment to the plaintiff, Professor Daniel J. Bernstein ("Bernstein"), enjoining the enforcement of certain Export Administration Regulations ("EAR") that limit Bernstein's ability to distribute encryption software. We find that the EAR regulations (1) operate as a prepublication licensing scheme that burdens scientific expression, (2) vest boundless discretion in government officials, and (3) lack adequate procedural safeguards. Consequently, we hold that the challenged regulations constitute a prior restraint on speech that offends the First Amendment. Although we employ a somewhat narrower rationale than did the district court, its judgment is accordingly affirmed.

Bernstein is currently a professor in the Department of Mathematics, Statistics, and Computer Science at the University of Illinois at Chicago. As a doctoral candidate at the University of California, Berkeley, he developed an encryption method--"a zero-delay private-key stream encryptor based upon a one-way hash function"1that he dubbed "Snuffle." Bernstein described his method in two ways: in a paper containing analysis and mathematical equations (the "Paper") and in two computer programs written in "C," a high-level computer programming language ("Source Code"). Bernstein later wrote a set of instructions in English (the "Instructions") explaining how to program a computer to encrypt and decrypt data utilizing a one-way hash function, essentially translating verbatim his Source Code into prose form.

Seeking to present his work on Snuffle within the academic and scientific communities, Bernstein asked the State Department whether he needed a license to publish Snuffle in any of its various forms. The State Department responded that Snuffle was a munition under the International Traffic in Arms Regulations ("ITAR"), and that Bernstein would need a license to "export" the Paper, the Source Code, or the Instructions.2 There followed a protracted and unproductive series of letter communications between Bernstein and the government, wherein Bernstein unsuccessfully attempted to determine the scope and application of the export regulations to Snuffle.3

Bernstein ultimately filed this action, challenging the constitutionality of the ITAR regulations. The district court found that the Source Code was speech protected by the First Amendment, see Bernstein v. U.S. Department of State, 922 F.Supp. 1426 (N.D.Cal.1996) ("Bernstein I" ), and subsequently granted summary judgment to Bernstein on his First Amendment claims, holding the challenged ITAR regulations facially invalid as a prior restraint on speech, see Bernstein v. U.S. Department of State, 945 F.Supp. 1279 (N.D.Cal.1996) ("Bernstein II" ).

In December 1996, President Clinton shifted licensing authority for nonmilitary encryption commodities and technologies from the State Department to the Department of Commerce. See Exec. Order No. 13,026, 61 Fed.Reg. 58,767 (1996). The Department of Commerce then promulgated regulations under the EAR to govern the export of encryption technology, regulations administered by the Bureau of Export Administration ("BXA"). See 61 Fed.Reg. 68,572 (1996) (codified at 15 C.F.R. Pts. 730-74). Bernstein subsequently amended his complaint to add the Department of Commerce as a defendant, advancing the same constitutional objections as he had against the State Department. The district court, following the rationale of its earlier Bernstein opinions, once again granted summary judgment in favor of Bernstein, finding the new EAR regulations facially invalid as a prior restraint on speech. See Bernstein v. U.S. Department of State, 974 F.Supp. 1288 (N.D.Cal.1997) ("Bernstein III "). The district court enjoined the Commerce Department from future enforcement of the invalidated provisions, an injunction that has been stayed pending this appeal.

Cryptography is the science of secret writing, a science that has roots stretching back hundreds, and perhaps thousands, of years. See generally DAVID KAHN, THE CODEBREAKERS (2d ed.1996). For much of its history, cryptography has been the jealously guarded province of governments and militaries. In the past twenty years, however, the science has blossomed in the civilian sphere, driven on the one hand by dramatic theoretical innovations within the field, and on the other by the needs of modern communication and information technologies. As a result, cryptography has become a dynamic academic discipline within applied mathematics. It is the cryptographer's primary task to find secure methods to encrypt messages, making them unintelligible to all except the intended recipients:

Encryption basically involves running a readable message known as "plaintext" through a computer program that translates the message according to an equation or algorithm into unreadable "ciphertext." Decryption is the translation back to plaintext when the message is received by someone with an appropriate "key."

Bernstein III, 974 F.Supp. at 1292. The applications of encryption, however, are not limited to ensuring secrecy; encryption can also be employed to ensure data integrity, authenticate users, and facilitate nonrepudiation (e.g., linking a specific message to a specific sender). See id.

It is, of course, encryption's secrecy applications that concern the government. The interception and deciphering of foreign communications has long played an important part in our nation's national security efforts. In the words of a high-ranking State Department official:

Policies concerning the export control of cryptographic products are based on the fact that the proliferation of such products will make it easier for foreign intelligence targets to deny the United States Government access to information vital to national security interests. Cryptographic products and software have military and intelligence applications. As demonstrated throughout history, encryption has been used to conceal foreign military communications, on the battlefield, aboard ships and submarines, or in other military settings. Encryption is also used to conceal other foreign communications that have foreign policy and national security significance for the United States. For example, encryption can be used to conceal communications of terrorists, drug smugglers, or others intent on taking hostile action against U.S. facilities, personnel, or security interests.

Lowell Decl. at 4 (reproduced in Appellant's Excerpts of Record at 97). As increasingly sophisticated and secure encryption methods are developed, the government's interest in halting or slowing the proliferation of such methods has grown keen. The EAR regulations at issue in this appeal evidence this interest.

The EAR contain specific regulations to control the export of encryption software, expressly including computer source code. Encryption software is treated differently from other software in a number of significant ways. First, the term "export" is specifically broadened5 with respect to encryption software to preclude the use of the internet and other global mediums if such publication would allow passive or active access by a foreign national within the United States or anyone outside the United States. 15 C.F.R. § 734.2(b)(9)(B)(ii).6 Second, the regulations governing the export of nonencryption software provide for several exceptions that are not applicable to encryption software.7 In addition, although printed materials containing encryption source code are not subject to EAR regulation, the same materials made available on machine-readable media, such as floppy disk or CD-ROM, are covered. 15 C.F.R. § 734.3(b), Note to Paragraphs (b)(2) & (b)(3). The government, moreover, has reserved the right to restrict source code in printed form that may be easily "scanned," thus creating some ambiguity as to whether printed publications are necessarily exempt from licensing. See 61 Fed.Reg. 68,575 (1996).

If encryption software falls within the ambit of the relevant EAR provisions, the "export" of such software requires a prepublication license. When a prepublication license is requested, the relevant agencies undertake a "case-by-case" analysis to determine if the export is "consistent with U.S. national security and foreign policy interests." 15 C.F.R. § 742.15(b). All applications must be "resolved or referred to the President no later than 90 days" from the date an application is entered into the BXA's electronic license processing system. 15 C.F.R. § 750.4(a). There is no time limit, however, that applies once an application is referred to the President. Although the regulations do provide for an internal administrative appeal procedure, such appeals are governed only by the exhortation that they be completed "within a reasonable time." 15 C.F.R. § 756.2(c)(1). Final administrative decisions are not subject to judicial review. 15 C.F.R. § 756.2(c)(2).

The parties and amici urge a number of theories on us. We limit our attention here, for the most part, to only one: whether the EAR restrictions on the export of encryption software in source code form constitute a prior restraint in violation of the First Amendment. We review de novo the district court's affirmative answer to this question. See Roulette v. Seattle, 97 F.3d 300, 302 (9th Cir.1996).

It is axiomatic that "prior restraints on speech and publication are the most serious and least tolerable infringement on First Amendment rights." Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 559, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976). Indeed, the Supreme Court has opined that "it is the chief purpose of the [First Amendment] guaranty to prevent previous restraints upon publication." Near v. Minnesota, 283 U.S. 697, 713, 51 S.Ct. 625, 75 L.Ed. 1357 (1931). Accordingly, "[a]ny prior restraint on expression comes ... with a 'heavy presumption' against its constitutional validity." Organization for a Better Austin v. Keefe, 402 U.S. 415, 419, 91 S.Ct. 1575, 29 L.Ed.2d 1 (1971). At the same time, the Supreme Court has cautioned that "[t]he phrase 'prior restraint' is not a self-wielding sword. Nor can it serve as a talismanic test." Kingsley Books, Inc. v. Brown, 354 U.S. 436, 441, 77 S.Ct. 1325, 1 L.Ed.2d 1469 (1957). We accordingly turn from "[t]he generalization that prior restraint is particularly obnoxious" to a "more particularistic analysis." Id. at 442.

The Supreme Court has treated licensing schemes that act as prior restraints on speech with suspicion because such restraints run the twin risks of encouraging self-censorship and concealing illegitimate abuses of censorial power. See Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 759, 108 S.Ct. 2138, 100 L.Ed.2d 771 (1988). As a result, "even if the government may constitutionally impose content-neutral prohibitions on a particular manner of speech, it may not condition that speech on obtaining a license or permit from a government official in that official's boundless discretion." Id. at 764 (emphasis in original). We follow the lead of the Supreme Court and divide the appropriate analysis into two parts. The threshold question is whether Bernstein is entitled to bring a facial challenge against the EAR regulations. See id. at 755. If he is so entitled, we proceed to the second question: whether the regulations constitute an impermissible prior restraint on speech. See id. at 769.

A. Is Bernstein entitled to bring a facial attack?

A licensing regime is always subject to facial challenge8 as a prior restraint where it "gives a government 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." Id. at 759.

The EAR regulations at issue plainly satisfy the first requirement--"the determination of who may speak and who may not is left to the unbridled discretion of a government official." Id. at 763. BXA administrators are empowered to deny licenses whenever export might be inconsistent with "U.S. national security and foreign policy interests." 15 C.F.R. § 742.15(b). No more specific guidance is provided. Obviously, this constraint on official discretion is little better than no constraint at all. See Lakewood, 486 U.S. at 769-70 (a standard requiring that license denial be in the "public interest" is an "illusory" standard that "renders the guarantee against censorship little more than a high-sounding ideal."). The government's assurances that BXA administrators will not, in fact, discriminate on the basis of content are beside the point. See id. at 770 (presumption that official will act in good faith "is the very presumption that the doctrine forbidding unbridled discretion disallows."). After all, "the mere existence of the licensor's unfettered discretion, coupled with the power of prior restraint, intimidates parties into censoring their own speech, even if the discretion and power are never actually abused." Id. at 757.

The more difficult issue arises in relation to the second requirement--that the challenged regulations exhibit "a close enough nexus to expression." We are called on to determine whether encryption source code is expression for First Amendment purposes.9

We begin by explaining what source code is.10 "Source code," at least as currently understood by computer programmers, refers to the text of a program written in a "high-level" programming language, such as "PASCAL" or "C." The distinguishing feature of source code is that it is meant to be read and understood by humans and that it can be used to express an idea or a method. A computer, in fact, can make no direct use of source code until it has been translated ("compiled") into a "low-level" or "machine" language, resulting in computer-executable "object code." That source code is meant for human eyes and understanding, however, does not mean that an untutored layperson can understand it. Because source code is destined for the maw of an automated, ruthlessly literal translator--the compiler--a programmer must follow stringent grammatical, syntactical, formatting, and punctuation conventions. As a result, only those trained in programming can easily understand source code.11

Also important for our purposes is an understanding of how source code is used in the field of cryptography. Bernstein has submitted numerous declarations from cryptographers and computer programmers explaining that cryptographic ideas and algorithms are conveniently expressed in source code.12 That this should be so is, on reflection, not surprising. As noted earlier, the chief task for cryptographers is the development of secure methods of encryption. While the articulation of such a system in layman's English or in general mathematical terms may be useful, the devil is, at least for cryptographers, often in the algorithmic details. By utilizing source code, a cryptographer can express algorithmic ideas with precision and methodological rigor that is otherwise difficult to achieve. This has the added benefit of facilitating peer review--by compiling the source code, a cryptographer can create a working model subject to rigorous security tests. The need for precisely articulated hypotheses and formal empirical testing, of course, is not unique to the science of cryptography; it appears, however, that in this field, source code is the preferred means to these ends.

Thus, 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.13 Similarly, the undisputed record here makes it clear that cryptographers utilize source code in the same fashion.14

In light of these considerations, we conclude that encryption software, in its source code form15 and as employed by those in the field of cryptography, must be viewed as expressive for First Amendment purposes, and thus is entitled to the protections of the prior restraint doctrine. If the government required that mathematicians obtain a prepublication license prior to publishing material that included mathematical equations, we have no doubt that such a regime would be subject to scrutiny as a prior restraint. The availability of alternate means of expression, moreover, does not diminish the censorial power of such a restraint--that Adam Smith wrote Wealth of Nations without resorting to equations or graphs surely would not justify governmental prepublication review of economics literature that contain these modes of expression.

The government, in fact, does not seriously dispute that source code is used by cryptographers for expressive purposes. Rather, the government maintains that source code is different from other forms of expression (such as blueprints, recipes, and "how-to" manuals) because it can be used to control directly the operation of a computer without conveying information to the user. In the government's view, by targeting this unique functional aspect of source code, rather than the content of the ideas that may be expressed therein, the export regulations manage to skirt entirely the concerns of the First Amendment. This argument is flawed for at least two reasons.

First, it is not at all obvious that the government's view reflects a proper understanding of source code. As noted earlier, the distinguishing feature of source code is that it is meant to be read and understood by humans, and that it cannot be used to control directly the functioning of 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.

Second, and more importantly, the government's argument, distilled to its essence, suggests that even one drop of "direct functionality" overwhelms any constitutional protections that expression might otherwise enjoy. This cannot be so.16 The distinction urged on us by the government would prove too much in this era of rapidly evolving computer capabilities. The fact that computers will soon be able to respond directly to spoken commands, for example, should not confer on the government the unfettered power to impose prior restraints on speech in an effort to control its "functional" aspects. The First Amendment is concerned with expression, and we reject the notion that the admixture of functionality necessarily puts expression beyond the protections of the Constitution.

The government also contends that the challenged regulations are immune from prior restraint analysis because they are "laws of general application" rather than being "directed narrowly and specifically at expression." Lakewood, 486 U.S. at 760-61. We cannot agree. Because we conclude that source code is utilized by those in the cryptography field as a means of expression, and because the regulations apply to encryption source code, it necessarily follows that the regulations burden a particular form of expression directly.

The Supreme Court in Lakewood explored what it means to be a "law of general application" for prior restraint purposes. In that case, the Court cited a law requiring building permits as a "law of general application" that would not be subject to a facial attack as a prior restraint, reasoning that such a law carried "little danger of censorship," even if it could be used to retaliate against a disfavored newspaper seeking to build a printing plant. Id. at 761. In the Court's view, "such laws provide too blunt a censorship instrument to warrant judicial intervention prior to an allegation of actual misuse." Id. Unlike a building permit ordinance, which would afford government officials only intermittent and unpredictable opportunities to exercise unrestrained discretion over expression, the challenged EAR regulations explicitly apply to expression and place scientific expression under the censor's eye on a regular basis. In fact, there is ample evidence in the record establishing that some in the cryptography field have already begun censoring themselves, for fear that their statements might influence the disposition of future licensing applications. See, e.g., NATIONAL RESEARCH COUNCIL, CRYPTOGRAPHY'S ROLE IN SECURING THE INFORMATION SOCIETY 158 (1996) ("Vendors contended that since they are effectively at the mercy of the export control regulators, they have considerable incentive to suppress any public expression of dissatisfaction with the current process."). In these circumstances, we cannot conclude that the export control regime at issue is a "law of general application" immune from prior restraint analysis.17

Because the prepublication licensing scheme challenged here vests unbridled discretion in government officials, and because it directly jeopardizes scientific expression, we are satisfied that Bernstein may properly bring a facial challenge against the regulations.18 We accordingly turn to the merits.

B. Are the regulations an impermissible prior restraint?

"[T]he protection even as to previous restraint is not absolutely unlimited." Near, 283 U.S. at 716. The Supreme Court has suggested that the "heavy presumption" against prior restraints may be overcome where official discretion is bounded by stringent procedural safeguards. See FW/PBS, 493 U.S. at 227 (plurality opinion of O'Connor, J.); Freedman v. Maryland, 380 U.S. 51, 58-59, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965); Kingsley Books, 354 U.S. at 442-43; 11126 Baltimore Blvd. v. Prince George's County, 58 F.3d 988, 995 (4th Cir.1995) (en banc). As our analysis above suggests, the challenged regulations do not qualify for this First Amendment safe harbor.19 In Freedman v. Maryland, the Supreme Court set out three factors for determining the validity of licensing schemes that impose a prior restraint on speech: (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.20 See 380 U.S. at 58-60. The district court found that the procedural protections provided by the EAR regulations are "woefully inadequate" when measured against these requirements. Bernstein III, 974 F.Supp. at 1308. We agree.

Although the regulations require that license applications be resolved or referred to the President within 90 days, see 15 C.F.R. § 750.4(a), there is no time limit once an application is referred to the President. Thus, the 90-day limit can be rendered meaningless by referral. Moreover, if the license application is denied, no firm time limit governs the internal appeals process. See 15 C.F.R. § 756.2(c)(1) (Under Secretary "shall decide an appeal within a reasonable time after receipt of the appeal."). Accordingly, the EAR regulations do not satisfy the first Freedman requirement that a licensing decision be made within a reasonably short, specified period of time. See FW/PBS, 493 U.S. at 226 (finding that "a prior restraint that fails to place time limits on the time within which the decisionmaker must issue the license is impermissible"); Riley v. National Fed. of the Blind, 487 U.S. 781, 802, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988) (licensing scheme that permits "delay without limit" is impermissible); Vance v. Universal Amusement Co., 445 U.S. 308, 315-17, 100 S.Ct. 1156, 63 L.Ed.2d 413 (1980) (prior restraint of indefinite duration is impermissible). The EAR regulatory regime further offends Freedman 's procedural requirements insofar as it denies a disappointed applicant the opportunity for judicial review.21 See 15 C.F.R. § 756.2(c)(2); FW/PBS, 493 U.S. at 229 (plurality opinion of O'Connor, J.) (finding failure to provide "prompt" judicial review violates Freedman ); Freedman, 380 U.S. at 59 (licensing procedure must assure a prompt final judicial decision).

We conclude that the challenged regulations allow the government to restrain speech indefinitely with no clear criteria for review. As a result, Bernstein and other scientists have been effectively chilled from engaging in valuable scientific expression. Bernstein's experience itself demonstrates the enormous uncertainty that exists over the scope of the regulations and the potential for the chilling of scientific expression. In short, because the challenged regulations grant boundless discretion to government officials, and because they lack the required procedural protections set forth in Freedman, we find that they operate as an unconstitutional prior restraint on speech.22 See Lakewood, 486 U.S. at 769-772 (holding that newsrack licensing ordinance was an impermissible prior restraint because it conferred unbounded discretion and lacked adequate procedural safeguards).

C. Concluding comments.

We emphasize the narrowness of our First Amendment holding. We do not hold that all software is expressive. Much of it surely is not. Nor need we resolve whether the challenged regulations constitute content-based restrictions, subject to the strictest constitutional scrutiny, or whether they are, instead, content-neutral restrictions meriting less exacting scrutiny. We hold merely that because the prepublication licensing regime challenged here applies directly to scientific expression, vests boundless discretion in government officials, and lacks adequate procedural safeguards, it constitutes an impermissible prior restraint on speech.

We will, however, comment on two issues that are entwined with the underlying merits of Bernstein's constitutional claims. First, we note that insofar as the EAR regulations on encryption software were intended to slow the spread of secure encryption methods to foreign nations, the government is intentionally retarding the progress of the flourishing science of cryptography. To the extent the government's efforts are aimed at interdicting the flow of scientific ideas (whether expressed in source code or otherwise), as distinguished from encryption products, these efforts would appear to strike deep into the heartland of the First Amendment. In this regard, the EAR regulations are very different from content-neutral time, place and manner restrictions that may have an incidental effect on expression while aiming at secondary effects.

Second, we note that the government's efforts to regulate and control the spread of knowledge relating to encryption may implicate more than the First Amendment rights of cryptographers. In this increasingly electronic age, we are all required in our everyday lives to rely on modern technology to communicate with one another. This reliance on electronic communication, however, has brought with it a dramatic diminution in our ability to communicate privately. Cellular phones are subject to monitoring, email is easily intercepted, and transactions over the internet are often less than secure. Something as commonplace as furnishing our credit card number, social security number, or bank account number puts each of us at risk. Moreover, when we employ electronic methods of communication, we often leave electronic "fingerprints" behind, fingerprints that can be traced back to us. Whether we are surveilled by our government, by criminals, or by our neighbors, it is fair to say that never has our ability to shield our affairs from prying eyes been at such a low ebb. The availability and use of secure encryption may offer an opportunity to reclaim some portion of the privacy we have lost. Government efforts to control encryption thus may well implicate not only the First Amendment rights of cryptographers intent on pushing the boundaries of their science, but also the constitutional rights of each of us as potential recipients of encryption's bounty. Viewed from this perspective, the government's efforts to retard progress in cryptography may implicate the Fourth Amendment, as well as the right to speak anonymously, see McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 115 S.Ct. 1511, 1524, 131 L.Ed.2d 426 (1995), the right against compelled speech, see Wooley v. Maynard, 430 U.S. 705, 714, 97 S.Ct. 1428, 51 L.Ed.2d 752 (1977), and the right to informational privacy, see Whalen v. Roe, 429 U.S. 589, 599-600,