State of Washington v. U.S. Dept. of State ( 2021 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
STATE OF WASHINGTON; STATE OF No. 20-35391
CALIFORNIA; STATE OF COLORADO;
STATE OF CONNECTICUT; STATE OF D.C. No.
DELAWARE; DISTRICT OF COLUMBIA; 2:20-cv-00111-
STATE OF HAWAII; STATE OF RAJ
ILLINOIS; STATE OF MAINE; STATE OF
MARYLAND; COMMONWEALTH OF
MASSACHUSETTS; STATE OF OPINION
MICHIGAN; STATE OF MINNESOTA;
STATE OF NEW JERSEY; STATE OF
NEW YORK; STATE OF NORTH
CAROLINA; STATE OF OREGON;
COMMONWEALTH OF
PENNSYLVANIA; STATE OF RHODE
ISLAND; STATE OF VERMONT;
COMMONWEALTH OF VIRGINIA;
STATE OF NEW MEXICO; STATE OF
WISCONSIN,
Plaintiffs-Appellees,
v.
UNITED STATES DEPARTMENT OF
STATE; ANTONY J. BLINKEN, in his
official capacity as Secretary of
State; DIRECTORATE OF DEFENSE
TRADE CONTROLS; MIKE MILLER, in
his official capacity as Deputy
Assistant Secretary of State for
2 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
Defense Trade; SARAH HEIDEMA, in
her official capacity as Director of
Policy, Office of Defense Trade
Controls Policy; UNITED STATES
DEPARTMENT OF COMMERCE; GINA
RAIMONDO, in her official capacity
as Secretary of Commerce; BUREAU
OF INDUSTRY AND SECURITY;
MATTHEW S. BORMAN, in his official
capacity as Acting Assistant
Secretary of Commerce for Export
Administration; CORDELL HULL,
Defendants-Appellants,
NATIONAL SHOOTING SPORTS
FOUNDATION, INC.; FREDRIC'S ARMS
& SMITHS, LLC,
Intervenor-Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Richard A. Jones, District Judge, Presiding
Argued and Submitted January 11, 2021
San Francisco, California
Filed April 27, 2021
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 3
Before: Jay S. Bybee and Ryan D. Nelson, Circuit Judges,
and Robert H. Whaley, * District Judge.
Opinion by Judge R. Nelson;
Dissent by Judge Whaley
SUMMARY **
Federal Rulemaking / Judicial Review
The panel vacated the district court’s order that granted
the motion of 22 states and the District of Columbia
(“Plaintiffs”) to enjoin the U.S. Department of State
(“DOS”)’s Final Rule removing 3D-printed guns and their
associated files from the U.S. Munitions List.
Under the International Security Assistance and Arms
Export Control Act of 1976 (the “Control Act”) (codified at
22 U.S.C. § 2778(a)(1)), Congress authorized the President
to designate “defense articles” and regulate their import and
export. When DOS designates an item as a defense article,
it is placed on the U.S. Munitions List and regulated by the
International Traffic in Arms Regulations (“ITAR”).
Congress delegated to the President’s discretion the decision
concerning when an item becomes a “defense article.” The
Department of Commerce (“Commerce”) is empowered to
regulate non-Munitions List items under the Export Control
*
The Honorable Robert H. Whaley, United States District Judge for
the Eastern District of Washington, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
4 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
Reform Act, and these items are placed on the Commerce
Control List (“CCL”). Congress gave Commerce broad
discretion in deciding which items to place on the CCL.
On May 24, 2018, DOS proposed a rule removing 3D-
printed-gun files from the Munitions List and regulation
under ITAR, and placing them on the CCL, regulated by
Commerce under the Export Administration Regulations
instead. The same day, Commerce proposed its own rule
expressly assuming regulatory jurisdiction over these items.
Following notice and comments, DOS and Commerce,
respectively, promulgated Final Rules on January 23, 2020.
Pursuant to plaintiffs’ action challenging both Final Rules
under the Administrative Procedure Act (“APA”), the
district court preliminarily enjoined only the DOS Final
Rule.
The panel held that Congress expressly precluded
judicial review of the relevant agency actions here.
The panel first addressed the reviewability of the DOS
Final Rule. The panel held that clear and convincing
evidence demonstrated that § 2778(h) of the Control Act
could only be read one way: Congress precluded judicial
review of both the designation and undesignation of items as
defense articles.
The panel next addressed the reviewability of the
Commerce Final Rule. The panel held that Congress not
only barred APA challenges to Commerce’s Reform Act
functions, it rendered them, in effect, judicially
unreviewable. Because the APA’s § 702 did not apply to
functions exercised under the Reform Act, federal sovereign
immunity had not been waived, precluding judicial review
of the plaintiffs’ challenge. The panel held that the district
court erred by enjoining the DOS Final Rule in part for
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 5
perceived procedural deficiencies in the Commerce Final
Rule.
The panel held that because both the DOS and
Commerce Final Rules were unreviewable, the plaintiffs had
not demonstrated the requisite likelihood of success on the
merits, and therefore, a preliminary injunction was not
merited. The panel remanded with instructions to dismiss.
Dissenting, District Judge Whaley would affirm the
district court’s order granting plaintiffs’ request for a
preliminary injunction. Judge Whaley disagreed with the
majority’s holding which would allow the new regulatory
system to escape appropriate oversight. He would affirm the
district court’s determination that the plaintiffs have
demonstrated a likelihood of success on the merits as to their
claims that DOS’s Final Rule was arbitrary and capricious,
and the district court’s finding that DOS failed to comply
with the notice requirement under the APA before
implementing its rule.
COUNSEL
Daniel Aguilar (argued) and Sharon Swingle, Appellate
Staff, Civil Division, United States Department of Justice,
Washington, D.C., for Defendants-Appellants.
Brendan Selby (argued) and Kristin Beneski, Assistant
Attorneys General; Jeffrey Rupert, Division Chief; Robert
W. Ferguson, Attorney General; Office of the Attorney
General, Seattle, Washington; Xavier Becerra, Attorney
General; John W. Killeen, Deputy Attorney General; Office
of the Attorney General, Sacramento, California; Philip J.
Weiser, Attorney General; Grant T. Sullivan, Assistant
6 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
Solicitor General; Office of the Attorney General, Denver,
Colorado; William Tong, Attorney General; Maura Murphy
Osborne, Assistant Attorney General; Kimberly Massicotte
and Joseph Rubin; Office of the Attorney General, Hartford,
Connecticut; Kathleen Jennings, Attorney General;
Christian Douglas Wright, Director of Impact Litigation;
Jillian A. Lazar, Deputy Attorney General; Office of the
Attorney General, Wilmington, Delaware; Karl A. Racine,
Attorney General; Jacqueline R. Bechara, Appellate
Litigation Fellow; Office of the Solicitor General,
Washington, D.C.; Clare E. Connors, Attorney General;
Robert T. Nakatsuji, Deputy Attorney General; Office of the
Attorney General, Honolulu, Hawaii; Kawme Raoul,
Attorney General; Kathryn Hunt Muse, Deputy Chief,
Public Interest Division; Darren Kinkead, Assistant
Attorney General; Office of the Attorney General, Chicago,
Illinois; Aaron M. Frey, Attorney General; Susan P. Herman,
Chief Deputy Attorney General; Office of the Attorney
General, Augusta, Maine; Brian E. Frosh, Attorney General;
Jeffrey P. Dunlap and Steven M. Sullivan; Office of the
Attorney General, Baltimore, Maryland; Maura Healey,
Attorney General; Phoebe Fischer-Groban, Assistant
Attorney General; Office of the Attorney General, Boston,
Massachusetts; Dana Nessel, Attorney General; Joseph T.
Froehlich, Assistant Attorney General; Office of the
Attorney General, Lansing, Michigan; Keith Ellison,
Attorney General; Jacob Campion, Assistant Attorney
General; Office of the Attorney General, St. Paul,
Minnesota; Gurbir S. Grewal, Attorney General; Jeremy M.
Feigenbaum, State Solicitor; Office of the Attorney General,
Trenton, New Jersey; Hector Balderas, Attorney General;
Nicholas M. Sydow, Civil Appellate Chief; Office of the
Attorney General, Albuquerque, New Mexico; Letitia
James, Attorney General; Daniela Nogueira, Assistant
Attorney General; Steven C. Wu, Deputy Solicitor General;
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 7
Office of the Attorney General, New York, New York;
Joshua H. Stein, Attorney General; Sripriya Narasimhan,
Deputy General Counsel; Department of Justice, Raleigh,
North Carolina; Ellen F. Rosenblum, Attorney General;
Carla Scott, Senior Assistant Attorney General; Office of the
Attorney General, Portland, Oregon; Michael Kron, Special
Counsel, Office of the Attorney General, Salem, Oregon;
Joshua Shapiro, Attorney General; Jacob B. Boyer, Deputy
Attorney General; Office of the Attorney General,
Philadelphia, Pennsylvania; Peter F. Neronha, Attorney
General; Justin J. Sullivan, Special Assistant Attorney
General; Office of the Attorney General, Providence, Rhode
Island; T.J. Donovan, Attorney General; Benjamin D.
Battles, Solicitor General; Office of the Attorney General,
Montpelier, Vermont; Mark R. Herring, Attorney General;
Samuel T. Towell, Deputy Attorney General, Civil
Litigation; Office of the Attorney General, Richmond,
Virginia; Joshua L. Kaul, Attorney General; Brian P.
Keenan, Assistant Attorney General; Department of Justice
Madison, Wisconsin; for Plaintiffs-Appellees.
Neal Kumar Katyal and Jo-Ann Tamila Sagar, Hogan
Lovells US LLP, Washington, D.C., for Amicus Curiae
Brady.
8 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
OPINION
R. NELSON, Circuit Judge:
The U.S. Department of State (“DOS”) and Department
of Commerce appeal the district court’s order granting the
motion of 22 states and the District of Columbia to enjoin
DOS’s final rule removing 3D-printed guns and their
associated files from the U.S. Munitions List. Because
Congress expressly precluded review of the relevant agency
actions here, we vacate the injunction and remand with
instructions to dismiss.
I
A
In 1976, Congress authorized the President to “designate
those items which shall be considered defense articles” and
“to promulgate regulations for the import and export of such
articles.” International Security Assistance and Arms Export
Control Act of 1976 (“Control Act”), Pub. L. No. 94-329,
§ 212(a)(1), 90 Stat. 729, 744 (codified at 22 U.S.C.
§ 2778(a)(1)). The President subsequently delegated his
authority to the Secretary of State. Administration of Arms
Export Controls, Exec. Order No. 11,958, 42 Fed. Reg.
4,311 (Jan. 18, 1977); see also 22 C.F.R. § 120.1(a). In turn,
DOS promulgated and updated the International Traffic in
Arms Regulations (“ITAR”) to control the licensing, export,
and import of defense articles. See generally 22 C.F.R.
§§ 120–130. When DOS designates an item as a defense
article, it is placed on the U.S. Munitions List (“Munitions
List”) and regulated by the ITAR. 22 U.S.C. § 2778(a)(1).
The ITAR also regulates a defense article’s associated
technical data. 22 C.F.R. §§ 120.6, 120.10(a)(1), (4).
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 9
Congress did not define when an item qualifies as a
“defense article.” Instead, it delegated this decision to the
President. See 22 U.S.C. § 2778(f)(5)(C) (explaining a
“defense article” is “an item designated by the President” as
such); 22 C.F.R. § 120.6 (defining “[d]efense article” as
“any item . . . designated in” the Munitions List by the
President). True, the President must exercise this
designation authority “[i]n furtherance of world peace and
the security and foreign policy of the United States.”
22 U.S.C. § 2778(a)(1). But the point at which an item
becomes a “defense article” is within the President’s sole
discretion. Not surprisingly, some courts have historically
rejected suits challenging designation decisions as
nonjusticiable political questions. See, e.g., United States v.
Martinez, 904 F.2d 601 (11th Cir. 1990).
In 1981, Congress added a provision to the Control Act
requiring the President to give notice to several
congressional committees 30 days “before any item is
removed from the Munitions List.” International Security
and Development Cooperation Act of 1981, Pub. L. No. 97-
113, § 107, 95 Stat. 1519, 1522 (codified as amended at 22
U.S.C. § 2778(f)(1)). So long as the President provides this
notice, whether to remove an item from the Munitions List
is still within his discretion. See id.In 1989, Congress added an additional wrinkle at the
heart of this appeal: “The designation . . . of items as defense
articles . . . shall not be subject to judicial review.” Anti-
Terrorism and Arms Export Amendments Act of 1989, Pub.
L. No. 101-222, § 6, 103 Stat. 1892, 1899 (codified at 22
U.S.C. § 2778(h)).
10 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
B
The Department of Commerce (“Commerce”) is
empowered to regulate non-Munitions List items under the
Export Control Reform Act (“Reform Act”). See 50 U.S.C.
§ 4801 et seq. These items are placed on the Commerce
Control List (“CCL”), id. § 4813(a), subject to regulation
under the Export Administration Regulations (“EAR”), 1 see
generally 15 C.F.R. § 730 et seq. Congress similarly gave
Commerce broad discretion in deciding which items to place
on the CCL. Commerce must only use its authority to
“further significantly the foreign policy of the United
States,” “fulfill its declared international obligations,” and
limit exports making a “significant contribution to the
military potential of any other country” or “prov[ing]
detrimental to . . . national security.” 50 U.S.C. § 4811(1).
Congress also exempted Commerce’s “functions exercised
under [the Reform Act]” from review under the
Administrative Procedure Act (“APA”). Id. § 4821(a).
C
On May 24, 2018, DOS proposed a rule removing all
“non-automatic and semi-automatic firearms to caliber .50
. . . and all of the parts, components, accessories, and
attachments specifically designed for those articles” from
the Munitions List. International Traffic in Arms
Regulations: U.S. Munitions List Categories I, II, and III,
83 Fed. Reg. 24,198, 24,198 (proposed May 24, 2018)
(“DOS Proposed Rule”). The DOS Proposed Rule clarified
that technical data would remain on the Munitions List only
1
Several important differences between the ITAR and EAR have
motivated this lawsuit but are substantively irrelevant to the legal issue
before us.
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 11
if “directly related to the defense articles” remaining on the
Munitions List. Id. at 24,201. Because 3D-printed guns and
their associated electronic files fell within Category I small-
caliber firearms, DOS, in effect, proposed to remove 3D-
printed-gun files from the Munitions List and regulation
under the ITAR. 2 These and other removed items were to be
placed on the CCL and regulated by Commerce under the
EAR instead. Id. at 24,198. DOS also provided a 45-day
comment period. 3
The same day, Commerce proposed its own rule
expressly assuming regulatory jurisdiction over those items
removed from the Munitions List. Control of Firearms,
2
DOS proposed to remove the identified articles because they did
not “provide the United States with a critical military or intelligence
advantage.” 83 Fed. Reg. at 24,198. This “includ[ed] many items which
are widely available in retail outlets in the United States and abroad.” Id.
But DOS did not suggest that retail availability was the only justification
for undesignating defense articles and associated technical data. See
Dissent at 34–35.
3
DOS stated it was not required to provide this comment period
under the APA because of the foreign affairs exception. DOS Proposed
Rule, 83 Fed. Reg. at 24,200. DOS has repeatedly maintained this
position since 1954. See United States Munitions List; Enumeration of
Arms, Ammunition and Implements of War Subject to Import and
Export Controls, 19 Fed. Reg. 7,403, 7,405 (Nov. 17, 1954). In adopting
the Control Act, Congress ratified DOS’s position. See Control Act,
§ 212(b)(2), 90 Stat. at 745 (affirming “[a]ll . . . regulations . . . entered
into under section 414 of the Mutual Security Act of 1954 shall continue
in full force and effect until modified, revoked, or superseded by
appropriate authority”); NLRB v. Bell Aerospace Co. Div. of Textron,
Inc., 416 U.S. 267, 275 (1974) (“[C]ongressional failure to revise or
repeal the agency’s interpretation is persuasive evidence that the
interpretation is the one intended by Congress.”). We do not reach
whether the foreign affairs exception applies, however, because the DOS
Final Rule is not subject to judicial review. See infra Part II.A.
12 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
Guns, Ammunition and Related Articles the President
Determines No Longer Warrant Control Under the United
States Munitions List, 83 Fed. Reg. 24,166 (proposed May
24, 2018) (“Commerce Proposed Rule”). Commerce also
provided a period of public comment. Id. at 24,177.
During the Proposed Rules’ concurrent comment
periods, many commentors expressed concerns that shifting
3D-printed-gun files from the Munitions List to the CCL
would impermissibly deregulate 3D-printed guns. The
record is unclear how many commentors expressed these
concerns. The district court in related litigation found
“approximately 12% of the comments received in response”
to the DOS Proposed Rule recognized the Rule’s impact on
3D-printed-gun files and opposed removing them from the
Munitions List. Washington v. U.S. Dep’t of State
(Washington II), 420 F. Supp. 3d 1130, 1138 (W.D. Wash.
2019). A search of the comment database suggests that this
number may have been as high as 33 per cent. According to
the complaint, significantly more comments were received
after the comment periods closed. Regardless of the exact
number of comments, interested members of the public were
aware that the DOS and Commerce Proposed Rules would
transfer regulatory jurisdiction over 3D-printed-gun files
from the Munitions List to the CCL. See 5 U.S.C. § 553(c);
Louis v. Dep’t of Labor, 419 F.3d 970, 975–76 (9th Cir.
2005).
DOS responded to these comments in its final rule,
promulgated on January 23, 2020, explaining that the
Commerce Final Rule would “sufficiently address the U.S.
national security and foreign policy interests relevant to
export controls.” International Traffic in Arms Regulations:
U.S. Munitions List Categories I, II, and III, 85 Fed. Reg.
3,819, 3,823 (Jan. 23, 2020) (“DOS Final Rule”); see also
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 13
id. (noting national security interests would be protected
given EAR amendments made in the Commerce Final Rule).
Notably, the DOS Final and Proposed Rules were identical
in every respect relevant to this appeal. Compare DOS
Proposed Rule, 83 Fed. Reg. at 24,201–02, with DOS Final
Rule, 85 Fed. Reg. at 3,830.
That same day, Commerce promulgated its final rule.
Control of Firearms, Guns, Ammunition and Related
Articles the President Determines No Longer Warrant
Control Under the United States Munitions List, 85 Fed.
Reg. 4,136, 4,140 (Jan. 23, 2020) (“Commerce Final Rule”).
Whereas the DOS Proposed and Final Rules were identical
in all relevant respects, the Commerce Proposed and Final
Rules were not. Originally, Commerce proposed no changes
to the EAR as it believed then-existing EAR regulations
“struck the appropriate approach in providing for national
security and foreign policy control of firearms that would
transfer to the CCL.” Id. at 4,141; see also Commerce
Proposed Rule, 83 Fed. Reg. at 24,167 (explaining that
“existing EAR concepts” would remain in place). But after
considering commentors’ concerns, Commerce decided to
add 15 C.F.R. § 734.7(c) to ensure that 3D-printed-gun files
would remain regulated, even if posted online. Commerce
Final Rule, 85 Fed. Reg. at 4,141–42; see also id. at 4,172–
73 (codified at 15 C.F.R. § 734.7(c)). Commerce’s new
substantive change, ultimately, is what undergirds the
States’ claims against both agencies.
The day the Final Rules were promulgated, 22 states and
the District of Columbia (“States”) sued DOS and
Commerce, claiming both Final Rules violated the APA and
seeking to preliminarily and permanently enjoin their
enforcement. Washington v. U.S. Dep’t of State
(Washington III), 443 F. Supp. 3d 1245, 1253 (W.D. Wash.
14 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
2020). The district court held the Final Rules were
reviewable and the States had shown a likelihood of success
on their APA claims. Id. at 1255–60. The district court
primarily faulted the Commerce Final Rule for its procedural
errors in adding § 734.7(c), e.g., id. at 1257, but
preliminarily enjoined only the DOS Final Rule as it related
to the transfer of 3D-printed-gun files, id. at 1262–63. DOS
and Commerce appealed. 4
II
We review the grant of a preliminary injunction for an
abuse of discretion, the underlying legal conclusions de
novo, and factual findings for clear error. Am. Trucking
Ass’n, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th
Cir. 2009). Questions of statutory interpretation are
reviewed de novo. Id. Accordingly, whether Congress
statutorily precluded judicial review of final agency action
under 5 U.S.C. § 701(a)(1) is also reviewed de novo. See
Hyatt v. Off. of Mgmt. & Budget, 908 F.3d 1165, 1170–72
(9th Cir. 2018).
III
An individual “suffering legal wrong because of agency
action” is entitled to judicial review under the APA. 5
U.S.C. § 702. An agency’s action is unreviewable, however,
if a “statute[] preclude[s] judicial review.” Id. § 701(a)(1).
That said, the APA’s “basic presumption of judicial review”
4
There is additional procedural history relevant to other issues
raised on appeal. See Def. Distributed v. U.S. Dep’t of State, 838 F.3d
451 (5th Cir. 2016); Washington II, 420 F. Supp. 3d 1130, dismissed as
moot sub nom., Washington v. Def. Distributed, No. 20-35030, 2020 WL
4332902, *1 (9th Cir. Jul. 21, 2020). Because we do not reach these
issues, however, we do not detail these prior cases.
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 15
can only be overcome if there is “clear and convincing”
evidence that Congress intended to preclude judicial review.
Abbott Lab’ys v. Gardner, 387 U.S. 136, 140–41 (1967),
abrogated on other grounds by Califano v. Sanders, 430
U.S. 99 (1977). The texts of both the Control Act and
Reform Act demonstrate Congress’s intent to preclude
judicial review of both the DOS and Commerce Final Rules.
A
We first turn to the reviewability of the DOS Final Rule.
The Control Act states: “The designation . . . of items as
defense articles or defense services for purposes of this
section shall not be subject to judicial review.” 22 U.S.C.
§ 2778(h). A plaintiff cannot challenge the government’s
decision to designate items as defense articles. E.g.,
Martinez, 904 F.2d at 601–03; United States v. Pulungan,
569 F.3d 326, 326–28 (7th Cir. 2009); United States v. Roth,
628 F.3d 827, 832 (6th Cir. 2011). That said, we are
presented with a slightly different question: whether
§ 2778(h) bars judicial review of the decision to undesignate
items as defense articles (i.e., remove them from the
Munitions List). The district court relied on Washington v.
U.S. Department of State (Washington I), 318 F. Supp. 3d
1247, 1260 (W.D. Wash. 2018), which erroneously stated in
passing that “Congress chose not to make unreviewable”
“the removal of an item from the Munitions List.”
Washington III, 443 F. Supp. 3d at 1255 (alteration adopted).
But the original public meaning of § 2778(h) makes clear
that the undesignation of an item as a defense article is also
judicially unreviewable. See Wisc. Cent. Ltd. v. United
States, 138 S. Ct. 2067, 2070 (2018) (“[O]ur job is to
interpret the words consistent with their ordinary meaning
. . . at the time Congress enacted the statute.” (citation
omitted)).
16 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
The phrase “designation . . . as defense articles” in
§ 2778(h) is substantively identical to the phrase in
§ 2778(a)(1) under which the President is authorized to
“designate [items] . . . as defense articles.” Accordingly, we
assume these same phrases “used in different parts of the
same act are intended to have the same meaning,” unless
context demonstrates otherwise. Taniguchi v. Kan Pac.
Saipan, Ltd., 566 U.S. 560, 571 (2012) (citations and internal
quotation marks omitted); Cherokee Nation v. Georgia, 30
U.S. (5 Pet.) 1, 19 (1831) (“[T]he same words have not
necessarily the same meaning attached to them when found
in different parts of the same instrument: their meaning is
controlled by context.”).
The term “designate” in § 2778(a)(1) was originally
understood to authorize both designations and
undesignations. In 1976, Congress authorized the President
to “designate” items as defense articles in § 2778(a)(1), but
did not expressly authorize the President to undesignate, or
remove, items from the Munitions List. See 22 U.S.C.
§ 2778(a)(1). Nonetheless, the President immediately
thereafter delegated authority to the Secretary of State to
make “[d]esignations, including changes in designations . . .
of items or categories which shall be considered as defense
articles.” See Administration of Arms Export Controls,
Exec. Order No. 11,958, 42 Fed. Reg. 4,311 (Jan. 18, 1977)
(emphasis added). From 1976 on, items were routinely
designated and undesignated as defense articles. 5
5
See, e.g., 35 Fed. Reg. 19,994, 19,995 (Dec. 31, 1970)
(“remov[ing] from the U.S. Munitions List” various items like “helium,
JATO units, airfield matting, propollers used on reciprocating aircraft
engines, [and] aircraft tires”); compare also 22 C.F.R. § 121.01,
Category I(e) (1979) (designating “bayonets and specifically designed
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 17
Congress’s later addition to the Control Act supports this
reading as well. In 1980, Congress required the President to
review the Munitions List and determine which items, “if
any, should be removed from such List.” International
Security and Development Cooperation Act of 1980, Pub. L.
No. 96-533, § 108(a), 94 Stat. 3131, 3137. A year later,
Congress modified this language slightly, requiring the
President to “periodically review the items on the United
States Munitions List” and provide 30-days’ notice to
congressional committees “before any item is removed from
the Munitions List.” Pub. L. No. 97-113, § 107, 95 Stat. at
1522 (codified as amended at § 2778(f)(1)) (emphasis
added).
Despite recognizing the President’s power to remove
items from the Munitions List, these amendments contain no
language expressly granting the President that authority.
Rather, Congress recognized what had always been implicit
from § 2778(a)(1): the lesser power to undesignate is part
and parcel of the greater power to designate. See id.; see also
United States v. Hudson, 11 U.S. (7 Cranch) 32, 33 (1812)
(finding Congress’s power to create federal courts includes
the lesser power to restrict jurisdiction); Seila Law LLC v.
CFPB, 140 S. Ct. 2183, 2211 (2020) (finding the President’s
executive power “generally includes the ability to supervise
and remove the agents who wield executive power in his
stead.”).
The dissent finds it “plausible” to assume that “the
President’s power to remove articles from the Munitions List
stems from § 2778(f) rather than § 2778(a).” Dissent at 28.
components therefor” as defense articles), with Revision of the ITAR, 45
Fed. Reg. 83,970, 83,971 (proposed Dec. 19, 1980) (proposing to remove
bayonets from the Munitions List).
18 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
But neither the 1980 nor 1981 iterations of § 2778(f) contain
language suggesting a delegation of power. The 1980
amendment obligates the President to review the Munitions
List “in order to determine which of such articles . . . , if any,
should be removed”—no language authorizing the President
to remove defense articles in the first place. See Pub. L. No.
96-533, § 108(a), 94 Stat. at 3137. In the 1981 amendment,
Congress omitted the word “removed” from the same phrase
entirely. Instead, the President now must review Munitions
List items “to determine what items, if any, no longer
warrant export controls under this section.” See Pub. L. No.
97-113, § 107, 95 Stat. at 1522. Only after discussing
reporting requirements does § 2778(f) mention that the
“report shall be submitted at least 30 days before any item is
removed from the Munitions List.” Id. We reject the
dissent’s assumption that Congress buried a delegation so
foundational to the President’s Control Act authority in
§ 2778(f), as Congress “does not . . . hide elephants in
mouseholes.” See Whitman v. Am. Trucking Ass’ns, 531
U.S. 457, 468 (2001).
Rather, the Control Act’s only plausible reading is that
§ 2778(a)(1) was originally understood to include both the
authority to designate and undesignate. It thus follows that
§ 2778(h)’s use of the same phrase in the same way plainly
means the same thing: designations include undesignations.
See Taniguchi, 566 U.S. at 571.
Nonetheless, the dissent finds Congress’s single mention
of “removed” in § 2778(f) to mean that designations and
removals were intended to be treated differently in
§ 2778(h). Dissent at 26–30. Removals are singled out in
the congressional review context. But relying on
congressional reporting requirements to determine the scope
of judicial review is at best questionable. See Guerrero v.
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 19
Clinton, 157 F.3d 1190, 1196 (9th Cir. 1998) (clarifying
“congressional reporting requirements are, and heretofore
have been, a management tool employed by Congress for its
own purposes” (citation omitted)); see also Dep’t of Com. v.
New York, 139 S. Ct. 2551, 2602 (2019) (Alito, J.,
concurring in part). Even if we relied on this distinction, it
bolsters our conclusion: Congress distinguished removals in
§ 2778(f) for congressional review, but a few years later
chose not to do so in § 2778(h) for judicial review. Instead,
Congress used the same phrase in § 2778(a)(1) and
§ 2778(h) despite § 2778(f)’s intervening enactment.
The dissent also incorrectly applies the canon of
expressio unius est exclusio alterius. We agree generally
“that all omissions from a statute should be understood as
intentional exclusions.” Dissent at 28 (citing Wheeler v. City
of Santa Clara, 894 F.3d 1046, 1054 (9th Cir. 2018)). This
canon only applies, however, if “it is fair to suppose that
Congress considered the unnamed possibility and meant to
say no to it.” Marx v. Gen. Revenue Corp., 568 U.S. 371,
381 (2013) (internal quotation marks and citation omitted).
But it is not “fair to suppose” that Congress intended to
exclude removal decisions from § 2778(h)’s scope when
using a phrase previously used to encompass such decisions.
If anything, we “expect[] Congress to have been explicit”
when using the same term to mean different things.
Gustafson v. Alloyd Co., 513 U.S. 561, 573 (1995). There is
no explicit indication here, and thus the expressio unius
canon does not apply.
Because § 2778(f) does not delegate to the President
authority to remove defense articles, this interpretation
would also invalidate some of the President’s core and
commonly understood functions under the Control Act. See
Decker v. Nw. Env’t Def. Ctr., 568 U.S. 597, 623 (2013)
20 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
(Scalia, J., concurring in part) (“Applying the interpretive
presumption of validity . . . we are to prefer the meaning that
preserves to the meaning that destroys.” (cleaned up)). If we
assume § 2778(h) does not include undesignations, logically
the same phrase in § 2778(a)(1) would not either. See
Taniguchi, 566 U.S. at 571. Such an interpretation would
suggest the President never had authority to do what has
been done for decades without any whiff of congressional
disapproval. Cf. Bell Aerospace, 416 U.S. at 275. We adopt
the plainer reading: Congress authorized the President to
designate and undesignate defense articles in § 2778(a), and
it used the exact same meaning in § 2778(h).
The States also contend § 2778(h) only shields from
review decisions to place items on the Munitions List since
only the designation of items “as defense articles” is
judicially unreviewable. See 22 U.S.C. § 2778(h). Under
the Control Act and the ITAR, designating an item “as a
defense article” is, in effect, synonymous with placing an
item on the Munitions List. See 22 U.S.C. § 2778(a)(1)
(“The items so designated shall constitute the United States
Munitions List.”); 22 C.F.R. § 121.1 (“In this part, articles
. . . and related technical data are designated as defense
articles . . . and constitute the U.S. Munitions List.”). But
the same phrase—“as defense articles”—does not limit the
meaning of “designate” in § 2778(a)(1). The States provide
no reason why we should treat the same phrase in § 2778(h)
any differently. 6 See Taniguchi, 566 U.S. at 571; Gustafson,
513 U.S. at 573.
6
The States also cite legislative history in support of their argument.
“But legislative history is not the law.” Epic Sys. Corp. v. Lewis, 138 S.
Ct. 1612, 1631 (2018). Nor do we “inquire what the legislature meant;
we ask only what the statute means.” Id. (alteration adopted) (citation
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 21
At a more fundamental level, the States’ reliance on the
phrase “as defense articles” misunderstands what actually
happens when DOS removes an item from the Munitions
List. The States argue that removing an item is akin to
designating an item as something other than a defense
article. But by removing an item from the Munitions List,
DOS only undesignates the defense article and no longer
regulates it—DOS does not re-designate an item as a non-
defense article or place it on some alternative list. Put
differently, when removing items from the Munitions List,
DOS merely removes those items’ designations “as defense
articles.” Thus, § 2778(h) textually remains in full force.
The dissent attempts to cabin our analysis as “[a]t best
. . . a plausible account for how to interpret the statute.”
Dissent at 30. But the dissent does not offer a plausible
counter-reading of § 2778(h). Adopting the dissent’s
position would “unreasonably” give the same phrase “two
different meanings in the same section of the statute,” see
Mohasco Corp. v. Silver, 447 U.S. 807, 826 (1980); find a
foundational delegation implicitly buried in a congressional
and internal quotation marks omitted). And as the States admit in their
brief, “because the plain language of Section 2778(h) is clear and precise,
it is unnecessary to consult legislative history.” Regardless, the
legislative history relied upon is ambiguous at best. Compare 135 Cong.
Rec. 31,346 (1989) (explaining § 2778(h) was added to ensure the
agencies themselves should settle “whether an item should be on the
Munitions List or the Commodity Control List,” suggesting both
designations and undesignations were intended to be judicially
unreviewable (emphasis added)), with 135 Cong. Rec. H-9,626 (daily ed.
Nov. 21, 1989) (statement of Rep. Dante Fascell) (noting the addition of
§ 2778(h) “concerns the judicial review procedures for placing items on
the Munitions List.” (emphasis added)). More importantly, this history
contains no indication that the terms “designation” or “as defense
articles” were intended to hold different meanings in § 2778(a)(1) and
§ 2778(h).
22 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
review provision, see Am. Trucking Ass’ns, 531 U.S. at 468;
and invalidate a basic and commonly understood authority
of the President under the Control Act, see Decker, 568 U.S.
at 623 (Scalia, J., concurring in part). 7 Absent other
plausible readings, clear and convincing evidence
demonstrates that § 2778(h) can only be read in one way:
Congress precluded judicial review of both the designation
and undesignation of items as defense articles. 8
B
We next turn to the reviewability of the Commerce Final
Rule. The Reform Act states: “[T]he functions exercised
under [the Reform Act] shall not be subject to sections 551,
553 through 559, and 701 through 706 of Title 5.” 50 U.S.C.
§ 4821(a). As applied here, this provision is clear and
7
The dissent also provides “additional reasons” for why Congress
may have wanted to treat judicial review of removals and designations
differently. Dissent at 29. Congress may decide to codify these policy
considerations in the future. But § 2778(h) as currently written does not
reflect them. Ambiguity cannot be created by non-textual
considerations. See Carcieri v. Salazar, 555 U.S. 379, 387 (“[W]e must
apply the statute according to its terms.” (citations omitted)).
8
DOS and Commerce contend Congress has exclusive review of
removal actions because of the congressional reporting provision in
§ 2778(f). The D.C. Circuit has rejected the argument that such
congressional reporting requirements inferably preclude judicial review.
Armstrong v. Bush, 924 F.2d 282, 291–92 (D.C. Cir. 1991). We reject
the agencies’ argument for the same reasons. Given the different nature
of provisions creating congressional review and provisions barring
judicial review, see Guerrero, 157 F.3d at 1196, the enactment of a
congressional reporting requirement is insufficient to demonstrate “clear
and convincing” evidence of an intent to bar judicial review. See Abbott
Lab’ys, 387 U.S. at 141 (“The right to review is too important to be
excluded on such slender and indeterminate evidence of legislative
intent.”).
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 23
unambiguous: the Commerce Final Rule amended the EAR
pursuant to the Reform Act; therefore the Rule is not
reviewable under the APA. See Commerce Final Rule, 85
Fed. Reg. at 4,169 (“[The Reform Act] provides the legal
basis for [Commerce]’s principal authorities and serves as
the authority under which [Commerce] issues this rule.”).
The district court recognized as much, noting the
“Commerce Rule, when viewed in isolation, appears to fall
within [§ 4821(a)’s] exemption.” Washington III, 443 F.
Supp. 3d at 1255. Nonetheless, the district court believed,
without citation to authority, it could review the Commerce
Final Rule because it was promulgated in conjunction with
the DOS Final Rule. Id. at 1255–56. Even assuming the
DOS Final Rule was reviewable (it is not), this theory of
review goes beyond established principles of delegated
authority and agency action. “[A]n agency literally has no
power to act . . . unless and until Congress confers power
upon it.” See La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355,
374 (1986). Accordingly, Commerce could have only acted
pursuant to its delegated authority under the Reform Act in
promulgating its Final Rule. And because Commerce
engaged in “functions exercised under” the Reform Act, the
Reform Act expressly bars APA challenges, regardless of
joint agency efforts.
Congress not only barred APA challenges to
Commerce’s Reform Act functions; it rendered them, in
effect, judicially unreviewable. The federal government
cannot be sued unless it first waives sovereign immunity.
Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 412 (1821)
(“The universally received opinion is, that no suit can be
commenced or prosecuted against the United States . . . .”);
see also Federalist No. 81 (Alexander Hamilton) (“It is
inherent in the nature of sovereignty not to be amendable to
24 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
the suit of an individual without its consent.” (emphasis
omitted)). And the APA is, foremost, a waiver of sovereign
immunity to allow private litigants to challenge agency
action. 5 U.S.C. § 702; Ramos v. Wolf, 975 F.3d 872, 900
(9th Cir. 2020) (R. Nelson, J., concurring). But because
§ 702 does not apply to “functions exercised under” the
Reform Act, 50 U.S.C. § 4821(a), federal sovereign
immunity has not been waived, precluding judicial review of
the States’ challenge.
The dissent would hold that the bar on APA review under
the Reform Act is irrelevant to this appeal given that the
district court only enjoined the DOS Final Rule. Dissent
at 30–31. We agree that the district court could have taken
judicial notice of Commerce’s Proposed and Final Rules.
See United States v. Woods, 335 F.3d 993, 1001 (9th Cir.
2003). This is especially true given DOS considered
Commerce’s Final Rule when making the decision to
remove 3D-printed-gun files from the Munitions List. See
DOS Final Rule, 85 Fed. Reg. at 3,823. But contrary to the
dissent’s assertion, Dissent at 30, the district court did more
than take judicial notice. Like the dissent, the district court
never acknowledged that the DOS Proposed and Final Rules
were identical in every substantive respect—DOS did what
it said it would do. Instead, the district court grounded its
substantive APA review in part on perceived procedural
defects of the Commerce Final Rule, especially Commerce’s
“out of left field” decision to include § 734.7(c) in its final
rule. 9
9
See Washington III, 443 F. Supp. 3d at 1257 (finding “neither
agency gave any indication that a specific regulation would apply to the
online dissemination of 3-D gun files”); id. at 1257 n.3 (noting
“Commerce all but acknowledges [the fact that its Final Rule was
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 25
Accordingly, the district court also erred by enjoining the
DOS Final Rule in part for perceived procedural deficiencies
in the Commerce Final Rule.
C
Because both the DOS and Commerce Final Rules are
unreviewable, the States have not demonstrated the requisite
likelihood of success on the merits. See Winter v. Nat. Res.
Def. Council, Inc., 555 U.S. 7, 20 (2008). Absent this
showing, we need not address the other preliminary
injunction factors. Glob. Horizons, Inc. v. U.S. Dep’t of
Labor, 510 F.3d 1054, 1058 (9th Cir. 2007).
IV
Congress expressly barred judicial review of
designations and undesignations of defense articles under
the Control Act and of any functions exercised under the
Reform Act. Accordingly, the district court erred in
reviewing the DOS and Commerce Final Rules, and its
injunction is therefore contrary to law.
VACATED and REMANDED with instructions to
dismiss.
deficient] in the notice of final rulemaking”); id. at 1257 (criticizing the
notice of proposed rulemaking processes as the Proposed Commerce
Rule only referenced “existing EAR concepts of jurisdictions and
controls”); id. (criticizing the Commerce Rule’s change in jurisdiction as
“com[ing] out of left field”); id. at 1258 (finding the States likely to
succeed on the merits as they “had no opportunity to comment on a
scheme that applies specifically to 3-D files, including the potential
public safety implications that would occur from implementing the Final
Rules in their current form”).
WHALEY, District Judge, dissenting:
This case concerns the regulatory authority over 3D-
printed gun files (hereinafter “3D gun files”), which can be
used to produce undetectable, untraceable, and deadly
weapons. During prior litigation, the U.S. Department of
State (“DOS”) argued that the proliferation of this
technology could provide terrorist and criminal
organizations with access to dangerous firearms, contribute
to armed conflict and terrorist or criminal acts, and
undermine global export control and non-proliferation
regimes. However, DOS abruptly changed course in 2018,
transferring its regulatory authority over 3D gun files to the
Department of Commerce (“Commerce”). The States and
amicus argue that this new regime contains substantial
loopholes that would allow for the widespread proliferation
of this dangerous technology.
I disagree with the majority’s holding which allows this
new regulatory system to escape appropriate oversight.
Therefore, I respectfully dissent.
I.
The majority’s conclusion that DOS’s final rule is
unreviewable flows from DOS’s argument that
“designation” in 22 U.S.C. §§ 2778(a)(1) & 2778(h) must
hold the same meaning, and the majority speculates that the
phrase “designate . . . as defense articles” in § 2778(a)(1)
was originally understood to authorize designations and
removals. Majority Op. at 16. In support of this position,
the majority points to 22 U.S.C. § 2778(f), which reads,
“The President may not remove any item from the Munitions
List until 30 days after the date on which the President has
provided notice of the proposed removal to [Congress] . . . .”
The majority interprets this to mean that when Congress
created the 30-day notice period for removal actions from
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 27
the Munitions List, it must have assumed that the President
already had this removal power.
“[O]nly upon a showing of clear and convincing
evidence of a contrary legislative intent should the courts
restrict access to judicial review.” Abbott Labs. v. Gardner,
387 U.S. 136, 141 (1967) (citation and internal quotation
marks omitted)), abrogated on other grounds by Califano v.
Sanders, 430 U.S. 99 (1977). Although the majority
contends that its interpretation of the statute meets this “clear
and convincing” standard, a more plausible interpretation of
§ 2778(f) is that through the addition of this provision,
Congress intended to treat designations and removals
separately. Under the plain language of the amendment,
§ 2778(f) could likely be read as singling out “removal” as a
distinct power, and then subjecting it to congressional
oversight. Following this reasoning, the addition of
§ 2778(f) in 1981 evinces Congress’s intent to separate
designation from removal, and then to distinguish between
these processes. Accordingly, Congress’s later amendment
in 1989 barring judicial review was therefore intended to
render only “designation” actions unreviewable, while
leaving removal decisions subject to judicial review. This
interpretation follows the well-established canon of statutory
interpretation that Congress’s use of different terms
demonstrates a difference in meaning. See Henson v.
Santander Consumer USA Inc., 137 S. Ct. 1718, 1723 (2017)
(“[W]hen we’re engaged in the business of interpreting
statutes we presume differences in language . . . convey
differences in meaning.”); Spencer Enters., Inc. v. United
States, 345 F.3d 683, 689 (9th Cir. 2003) (“[W]e must
assume that this difference in language is legally
significant.”).
28 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
Because it is plausible to interpret § 2778(f) as
separating removals from designations, the majority’s
subsequent reasons for precluding judicial review over
DOS’s final rule are unavailing. For instance, the majority
contends that the States’ interpretation would invalidate core
and commonly understood presidential functions by
implying that the President never had the authority to
remove defense articles from the Munitions List. However,
to the extent the President had the implicit authority to
remove items from the Munitions List when § 2778(a) was
enacted in 1976, the addition of § 2778(f) shortly thereafter
clarified that the President’s removal power was separate
from its designation power and was subject to congressional
oversight. Under this interpretation, the President’s power
to remove articles from the Munitions List stems from
§ 2778(f) rather than § 2778(a).
Likewise, the majority disregards the States’ argument
under the canon of expressio unius est exclusio alterius,
which presumes that all omissions from a statute should be
understood as intentional exclusions, see Wheeler v. City of
Santa Clara, 894 F.3d 1046, 1054 (9th Cir. 2018), because
the majority finds no basis to infer an intention by Congress
to separate designations from removals. However, if
Congress intended to separate removals from designations
following the addition of § 2778(f) in 1981, then this would
support the States’ contention that when Congress enacted
§ 2778(h), it could have expressly barred judicial review
over removal decisions but declined to do so. See Anti-
Terrorism and Arms Export Amendments Act of 1989, Pub.
L. No. 101-222, § 6, 103 Stat. 1892, 1899; NLRB v. SW
General, Inc., 137 S. Ct. 929, 940 (2017) (application of the
expressio unius canon depends on context and will apply
only when “circumstances support[] a sensible inference that
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 29
the term left out must have been meant to be excluded.”
(citation and internal quotation marks omitted)).
There are additional reasons to infer that Congress
intended to distinguish between designation and removal
actions. The lack of judicial oversight over designations
means that the President’s decision over which weapons to
regulate is wholly discretionary, 22 U.S.C. § 2778(h), and
thus individual complainants cannot avoid regulation
through litigation. In contrast, judicial review over the
removal of items from the Munitions Lists would prevent
deregulation that is arbitrary or otherwise unlawful.
Precluding judicial review over designations but not
removals would therefore align with Congress’s decision to
provide a congressional check over removals from the
Munitions List but not designations. In other words,
§ 2778(f) and § 2778(h) when read together indicate
Congress’s intent to err on the side of regulation, making
designations discretionary and subjecting removals to
procedural safeguards. This interpretation could be viewed
as advancing the statute’s objective to further “world peace
and the security and foreign policy of the United States . . . .”
22 U.S.C. § 2778(a)(1). Thus, the full context of the statute
and its purpose support precluding judicial review over
designation decisions but not removals. See Rojas v. Fed.
Aviation Admin., 989 F.3d 666, 672–73 (9th Cir. 2021) (en
banc) (“[A]s is always true when interpreting statutes,
statutory context and purpose matter . . .”).
Given these considerations, contrary to the majority’s
position, Congress’s intention to preclude judicial review
over the President’s decision to remove items from the
Munitions List is not clear and convincing. See Abbott
Labs., 387 U.S. at 140–41 (restricting access to judicial
review over agency action requires clear and convincing
30 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
evidence of a contrary legislative intent). At best, the
majority has presented a plausible account for how to the
interpret the statute, but that is not enough. The counter
interpretation is just as plausible, and this ambiguity allowed
the district court to exercise judicial review in this case. See
Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140
S. Ct. 1891, 1905 (2020) (Administrative Procedures Act
establishes a basic presumption of judicial review over
agency action); ANA Int’l, Inc. v. Way, 393 F.3d 886, 891
(9th Cir. 2004) (explaining that “as a matter of the
interpretive enterprise itself, the narrower construction of a
jurisdiction-stripping provision is favored over the broader
one.”).
II.
As to Commerce’s final rule, I agree with the majority
that this rule is unreviewable pursuant to 50 U.S.C.
§ 4821(a). However, the district court did not “review”
Commerce’s final rule. Instead, it concluded that DOS’s
final rule was unlawful, and then enjoined DOS’s final rule
from implementation or enforcement. Commerce’s final
rule, in comparison, was left untouched.
Although the district court considered the contents of
Commerce’s final rule in its review of DOS’s final rule, this
was appropriate given the statutory framework at issue in
this case. In DOS’s final rule, DOS stated that it was
transferring its regulatory authority to Commerce and
expressly invoked Commerce’s final rule. See International
Traffic in Arms Regulations: U.S. Munitions List Categories
I, II, and III [hereinafter “ITAR”], 85 Fed. Reg. 3,819, 3,823
(Dep’t of State Jan. 23, 2020). DOS even explained that
transferring jurisdiction to regulate certain 3D gun files to
Commerce was justified because Commerce’s
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 31
controls on technology and software for
firearms previously controlled in [Munitions
List] Category I(a)—and for all other items
this rule removes from the [Munitions
List]—sufficiently address the U.S. national
security and foreign policy interests relevant
to export controls. In sum, while Commerce
controls over such items and technology and
software are appropriate, continued inclusion
of them on the [Munitions List] is not.
Id.Not only was it appropriate for the district court to
consider Commerce’s final rule in the analysis, but to ignore
it would undoubtedly lead to the conclusion that DOS’s final
rule is arbitrary and capricious. Agency action is arbitrary
and capricious if the agency fails to explain or acknowledge
a change in policy. See FCC v. Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009) (explaining that an agency must
“provide [a] reasoned explanation for its action . . . [and]
may not, for example, depart from a prior policy sub silentio
. . .”). Considered in isolation, DOS’s final rule removes
certain 3D gun files from the Munitions List and does not
provide for any replacement regulatory controls. See
generally ITAR, 85 Fed. Reg. at 3,819–33. So absent
Commerce’s final rule, the subject 3D gun files would
become completely unregulated, a clear change in DOS
policy that would be arbitrary and capricious.
III.
As to the remaining bases raised by the parties in this
appeal, I agree with the district court’s disposition. In
particular, I would affirm the district court’s determination
that the States have demonstrated a likelihood of success on
32 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
the merits as to their claims that DOS’s final rule is arbitrary
and capricious, and the district court’s finding that DOS
failed to comply with the notice requirement under the APA
before implementing its rule.
The rulemaking at issue in this case must be considered
in the context of DOS’s prior litigation and eventual
settlement with Defense Distributed, a private company
intent on publishing 3D gun files on the internet. See Def.
Distributed v. U.S. Dep’t of State, 121 F. Supp. 3d 680, 686–
87 (W.D. Tex. 2015). In defending the lawsuit, DOS
contended that Defense Distributed’s files could be used to
create “virtually undetectable” firearms that presented a
“serious risk of acts of violence,” specifically that the
“proposed export of undetectable firearms technology could
be used in an assassination, for the manufacture of spare
parts by embargoed nations, terrorist groups, or guerrilla
groups, or to compromise aviation security overseas in a
manner specifically directed at U.S. persons.”
The district court denied Defense Distributed’s motion
for a preliminary injunction, and the Fifth Circuit affirmed.
See Def. Distributed v. U.S. Dep’t of State, 838 F.3d 451,
458–61 (5th Cir. 2016). The Fifth Circuit determined that
“[DOS’s] stated interest in preventing foreign nationals—
including all manner of enemies of this country—from
obtaining technical data on how to produce weapons and
weapon parts is not merely tangentially related to national
defense and national security; it lies squarely within that
interest.” Id. at 458. The Fifth Circuit subsequently denied
rehearing the case en banc, Def. Distributed v. U.S. Dep’t of
State, 865 F.3d 211, 212 (5th Cir. 2017), and the Supreme
Court declined to review the case, Def. Distributed v. Dep’t
of State, 138 S. Ct. 638 (2018).
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 33
After the denial of certiorari, DOS suddenly and secretly
changed course. DOS settled with Defense Distributed and
agreed to initiate rulemaking that would remove Defense
Distributed’s 3D gun files from the Munitions List.
According to an expert declaration provided by the States in
the present case, the terms of the settlement permitting the
export of Defense Distributed’s 3D gun files could lead to
the proliferation of untraceable “ghost guns.” This potential
increase in the accessibility of “ghost guns” presents a
serious threat to public safety, as “ghost guns” have already
been linked to multiple mass shootings in the United States.
Despite the threat to public safety posed by the settlement,
the terms of the settlement were not publicly disclosed until
after the comment period on DOS’s proposed rule had
ended.
This history between DOS and Defense Distributed
demonstrates both the arbitrariness and capriciousness of
DOS’s final rule and the lack of adequate notice. First, with
regard to the arbitrary and capricious standard, DOS argued
to this Court that its final rule was simply the result of a
“decade-long effort to revise the Munitions List,” and that
DOS’s position on regulating 3D gun files has never
changed. Yet the terms of the settlement belie that assertion,
as it appears that DOS’s settlement with Defense Distributed
was the driving force behind DOS’s rulemaking. On this
record, it is difficult to view DOS’s final rule as anything but
a change in policy, since that is what the settlement required.
See Int’l Rehab. Sciences Inc. v. Sebelius, 688 F.3d 994,
1001 (9th Cir. 2012) (explaining when an unexplained
agency inconsistency can lead to a finding that the agency
acted arbitrarily).
Furthermore, it appears that DOS deliberately kept its
settlement with Defense Distributed a secret. According to
34 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
the States’ allegations, Defense Distributed and DOS
finalized their settlement agreement in April 2018, DOS and
Commerce filed their notices of proposed rulemaking on
May 24, 2018, and then the notice-and-comment period
closed on July 9, 2018. Around 3,000 comments were
received during the comment period, only a small fraction of
which pertained to 3D gun files.
However, rather than announcing the settlement that
compelled this proposed rulemaking, DOS delayed making
the settlement public until after the comment period closed.
Neither at oral argument nor in its briefing to this Court has
DOS explained that delay. And once the settlement did
become public a few weeks after the comment period had
ended, the federal government received over 106,000 emails
from concerned members of the public regarding the
deregulation of 3D gun files. This outpouring of public
comments after the terms of the settlement came to light
indicates that an ordinary interested member of the public
likely did not understand that the proposed rules implicated
the regulation of 3D gun files. See Nat. Res. Def. Council v.
EPA, 279 F.3d 1180, 1187 (9th Cir. 2002) (adequate notice
depends on whether interested parties reasonably could have
anticipated the final rulemaking from the proposed rule.).
Further, the language of DOS’s proposed rule obscured
its true intent to deregulate 3D gun files, as was required
under the settlement. See Louis v. U.S. Dep’t of Labor, 419
F.3d 970, 975–76 (9th Cir. 2005) (explaining that even if
“each of the components . . . are technically present” in the
proposed rule, notice is still deficient if it “obscures the
intent of the agency” such that it would allow “potentially
controversial subject matter . . . to go unnoticed buried deep
in a non-controversial publication.”). For instance, although
DOS’s proposed rule generally refers to “technical data,” it
STATE OF WASHINGTON V. U.S. DEP’T OF STATE 35
never mentions “3D gun files” or any of the other terms used
to describe this technology, even though the settlement
agreement specifically required rulemaking that would
exclude such items from the Munitions List. See
International Traffic in Arms Regulations: U.S. Munitions
List Categories I, II, and III [hereinafter “Proposed Rule”],
83 Fed. Reg. 24,198, 24,201 (Dep’t of State May 24, 2018).
Additionally, rather than being transparent about the
connection between the settlement and the proposed
rulemaking, DOS’s proposed rule stated only that small-
caliber firearms were being removed from the Munitions
List because they did not “provide the United States with a
critical military or intelligence advantage,” primarily
because they are “widely available in retail outlets in the
United States and abroad.” Proposed Rule, 83 Fed. Reg. at
24,198. Yet this stated rationale clearly did not apply to the
3D gun files that were the subject of the settlement, as these
files were not widely available in retail outlets.
On a fundamental level, I question DOS’s candor in this
case. DOS has never explained why, after securing several
victories in the litigation with Defense Distributed, it
decided to settle and agreed to permit the export of 3D gun
files, even though DOS had argued that the export of these
files would irreparably harm the United States’ national
security interests. It also appears that DOS deliberately hid
the settlement from the public until after the comment period
had closed, as DOS’s proposed rule never mentions “3D gun
files” and instead misleadingly stated that the rule was aimed
at munitions that were already widely available at retail
establishments. Given this lack of explanation about the
settlement and the failure to publicly disclose the settlement
until after the notice-and-comment period had ended, the
States were likely to succeed in showing that DOS’s final
36 STATE OF WASHINGTON V. U.S. DEP’T OF STATE
rule was arbitrary and capricious and violated the APA’s
notice-and-comment requirements.
For these reasons, I would affirm the district court’s
order granting the States’ request for a preliminary
injunction.