Stagg P.C. v. U.S. Dep't of State

STAGG P.C., Plaintiff, v. U.S. DEPARTMENT OF STATE; DIRECTORATE OF DEFENSE TRADE CONTROLS;and MIKE POMPEO (in his official capacity only as Secretary of State), Defendants.

15 Civ. 8468 (KPF)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

April 25, 2019

OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge:

The Court is in receipt of Plaintiff's motion for reconsideration and opening brief ("Pl. Recon. Br." (Dkt. #92)), Defendants' opposition papers (Dkt. #99), and Plaintiff's reply submission ("Pl. Recon. Reply" (Dkt. #100)). As explained below, Plaintiff's motion raises no legal or factual matters that alter the conclusions reached by the Court in its January 30, 2019 Opinion and Order (the "January 2019 Opinion" (Dkt. #89)). See Stagg P.C. v. U.S. Dep't of State; Directorate of Defense Trade Controls; and Mike Pompeo, 354 F. Supp. 3d 448 (S.D.N.Y. 2019) ("Stagg III"). The Court therefore denies Plaintiff's motion.

A. Applicable Law

The Second Circuit has made clear that motions for reconsideration are to be denied except where "the moving party can point to controlling decisions or data that the court overlooked — matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). Compelling reasons for granting a motion for reconsideration are limited to "an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992) (internal quotation marks and citation omitted). A motion for reconsideration is, of course, "not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a 'second bite at the apple[.]'" Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012) (quoting Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998)); see also Stone v. Theatrical Inv. Corp., 80 F. Supp. 3d 505, 506 (S.D.N.Y. 2015) (observing that a motion for reconsideration "is neither an occasion for repeating old arguments previously rejected nor an opportunity for making new arguments that could have been previously advanced" (internal quotations and citations omitted)).

B. Discussion

Plaintiff raises a number of arguments, none of which provides a valid basis for the Court to alter its prior ruling. The Court addresses them in turn in the remainder of this Opinion.

1. Plaintiff's Arguments Seeking Declaratory Relief as to the Government's Prior Interpretation of the ITAR Are Improper

To begin, Plaintiff notes that the Court's construction of the ITAR's regulatory text differed from the Department's pre-litigation view on the matter, and from Defendants' litigation position. (See Pl. Recon. Br. 4-5 (observing that the Court's holding "contradicts the Government's arguments")). Proceedingfrom that premise, Plaintiff urges the Court to extend its ruling to "acknowledge" that "the government's prior enforcement and/or threatened enforcement violated Plaintiff's constitutional rights[.]" (Id.). Indeed, Plaintiff asserts that this is "the exact declaratory relief" it requested on page 13 of its First Amended Complaint (the "FAC"). (Id. at 5). The Court disagrees.

First, Plaintiff's motion for reconsideration mischaracterizes the FAC. On the issue of contemplated disseminations, Plaintiff recited in relevant part that

Plaintiff seeks to disseminate materials that are already published and generally accessible public information ... available from bookstores and libraries, and that are in the public domain, but that were not authorized by the Defendants into the public domain. ... Plaintiff [seeks] to disseminate information that met the public domain exclusion within 22 C.F.R. § 120.11 because the information was published, generally accessible, and available to the public from bookstores or public libraries.

Stagg III, 354 F. Supp. 3d at 459 (internal citations and quotation marks omitted). "Moreover, Plaintiff also seeks to aggregate and modify the information that it plans to disseminate." Id. at 461 (internal citations and quotation marks omitted).

The FAC sought relief from a purported prior restraint on these intended disseminations that Plaintiff alleged was imposed by the ITAR. (See generally FAC). Page 13 of the FAC, to which Plaintiff now cites, states:

WHEREFORE, Plaintiff respectfully requests judgment against Defendants, under all applicable causes of action, as follows:

1. A declaration that Defendants' prior restraint is facially invalid under the First Amendment to the United States Constitution;2. A declaration that Defendants' prior restraint is invalid under the Fifth Amendment to the United States Constitution;

3. A declaration that Defendants' prior restraint is invalid under the Administrative Procedures Act;

4. An order temporarily, preliminarily, and permanently enjoining Defendants, their officers, agents, servants, and employees from enforcing the prior restraint on privately generated unclassified information;

5. Attorney fees and costs pursuant to 28 U.S.C. § 2412; and

6. Any other further relief as the Court deems just and appropriate.

(FAC 13). As it happened, this Court found that the purported prior restraint alleged in the FAC did not exist. See Stagg III, 354 F. Supp. 3d at 462-64 (holding that the ITAR does not disqualify information from the public domain exclusion either solely because the information entered the public domain without prior government authorization, or solely because the information has been aggregated or modified). Thus, the Court has already granted the relief that Plaintiff sought on page 13 of the FAC by construing the ITAR to clarify that Plaintiff never truly faced a prior restraint.

Second, to the extent that Plaintiff's motion for reconsideration seeks declaratory relief as to the merits of Defendants' pre-litigation and litigation positions regarding how to interpret certain provisions of the ITAR, the Court has already ruled that the positions were largely mistaken. See Stagg III, 354 F. Supp. 3d at 462-64. But to the extent that Plaintiff's motion for reconsideration seeks declaratory relief as to whether the mere fact that theDepartment once held such views itself violated Plaintiff's constitutional rights, this Court and the Second Circuit have both previously explained that Plaintiff lacks standing to mount a facial constitutional challenge to an unenacted interpretation of the ITAR. In the words of the Second Circuit,

[M]any of Stagg's arguments ... could be read as attacking not the existing regulatory scheme, but either a proposed regulation that was never adopted, or a prior regulation that Stagg claims was once in force but has since been repealed. Constitutional questions about regulations that no longer exist or that have been under consideration do not present cases or controversies within a court's Article III jurisdiction.

Stagg P.O. v. Dep't of State, 673 F. App'x 93, 95, n.1 (2d Cir. 2016) (summary order) ("Stagg II"). And in the words of this Court, "Plaintiff has no standing to mount a facial challenge to [a] proposed-but-not-enacted" interpretation of the ITAR. See Stagg III, 354 F. Supp. 3d at 643; see also id. at 461-62 ("Plaintiff has standing to challenge only the current ITAR.... [T]he Court will not consider any aspect of Plaintiff's briefing that purports to mount a facial challenge to text that has not been formally adopted into the ITAR.").

Plaintiff has not moved for reconsideration of the Court's ruling on standing. Therefore, to the extent that it now urges the Court to expound on the constitutionality of the Department's prior, mistaken views of the ITAR, Plaintiff improperly seeks to backdoor precisely those arguments as to which the Second Circuit and this Court have found it lacked standing. Such an argument violates the rule that a motion for reconsideration is not "an occasion for repeating old arguments previously rejected[.]" Stone, 80 F. Supp. 3d at 506.

Third, the Court disagrees that its prior holding was "tantamount to a decision that the Government's prior enforcement and/or threatened enforcement violated Plaintiff's constitutional rights[.]" (Pl. Recon. Br. 5). To the contrary, the Court clearly stated that it would "consider Plaintiff's facial challenge solely as it pertains to the current text of the ITAR's 'public domain' exclusion, and 'deemed export' provision." Stagg III, 354 F. Supp. 3d at 462. Therefore, the Court's prior holding applies solely to that text, as enacted in 22 C.F.R. §§ 120.11(a) and 120.17(a)(2). The Court made no ruling on the constitutionality vel non of the Department's prior enforcement or threatened enforcement actions.

Nor did Plaintiff's summary judgment briefing seek judgment based on the Department's prior enforcement or threatened enforcement actions. Indeed, such a claim would likely have required Plaintiff to plead facts and show evidence far beyond what Plaintiff provided for its facial challenge to the ITAR's text. Plaintiff instead sought summary judgment on the basis that "the ITAR currently imposes a prior restraint to use the public domain exclusion," arguing that "this Court should find this prior restraint on the public domain exclusion is facially unconstitutional." (Dkt. #63 at 3 (emphasis in original); see also id. at 7 ("This case presents a facial challenge and only pure questions of law that require no factual development. It presents a pure question of law because only the text of the regulations is required." (internal citations omitted))). Having obtained this Court's construction of the regulatory text, which construction has been largely favorable to Plaintiff, Plaintiff cannot now,at the thirteenth hour, advance new claims regarding prior enforcement or threatened enforcement actions. Such arguments...