World Wide Catalog 1995 Summer/World_Wide_Catalog_InfoMagic_Summer_1995.iso/pages/wwweff_b.org/pub/alerts/dos_bery.res

Text File | 1995-06-11 | 44KB | 1,140 lines

[May 1995 response of Dept. of State to EFF/Bernstein ITAR crypto export
First Amendmet suit.]


    FRANK W. HUNGER
    Assistant Attorney General
    MICHAEL J. YAMAGUCHI
    United States Attorney
    MARY BETH UITTI
    Assistant United States Attorney
         450 Golden Gate Avenue
         San Francisco, California 94102
         Telephone: [phone]
    VINCENT M. GARVEY
    ANTHONY J. COPPOLINO
    Civil Division, Room 1020
         901 E Street, N.W.
         Washington, D.C.  20530
         Tel:  [phone]
         Fax:  [phone] or 616-8460

Attorneys for the Defendants


                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA


DANIEL J. BERNSTEIN                        )
                                           )
Plaintiff,                                 ) C 95-0582 MHP
                                           )
v.                                         )
                                           )     ANSWER
UNITED STATES DEPARTMENT OP STATE et al.,  )
                                           )
Defendants.                                )
___________________________________________)



Defendants, in their official and individual capacities,
through their undersigned counsel, hereby answer the
Complaint as follows:

               First Affirmative Defense

All claims against the defendants sued in their individual
capacities are barred by the doctrine of qualified immunity,
and the defendants are immune from suit in their individual
capacities.

              Second Affirmative Defense

The Complaint fails to state a claim upon which relief can
be granted against the defendants sued in their individual
capacities.

             Third Affirmative Defense

This Court lacks personal jurisdiction over the defendants
sued in their individual capacities.


                 Fourth Affirmative Defense

Venue does not lie in this judicial district as to the
claims against the defendants sued in their individual
capacities.

                Fifth Affirmative Defense

The claims against the defendants sued in their individual
capacities are barred by the statute of limitations.

                Sixth Affirmative Defense

The Court lacks subject matter jurisdiction to review the
designation of items as defense articles or defense services
under the Arms Export Control Act ("AECA") of 1976, 22
U.S.C. S 2778(h), and with respect to claims arising under
the Administrative Procedure Act, 5 U.S.C. S 551 et sea.

              Seventh Affirmative Defense

The Complaint fails to state a claim upon which relief can
be granted against the defendants in their official
capacities.

              Eighth Affirmative Defense

The plaintiff has failed to exhaust administrative remedies.

              Ninth Affirmative Defense

The plaintiff lacks standing to seek redress of any alleged
injuries to third parties.

              Tenth Affirmative Defense

The defendants respond to the numbered paragraphs of the
Complaint as follows: (l)

1. This paragraph sets forth plaintiff's characterization of
this action, which requires no response, but insofar as a
response may be required, deny.

2. This paragraph sets forth plaintiff's characterization of
this action, which requires no response, but insofar as a
response may be required, deny, except to admit that the
Arms Export Control Act of 1976, 22 U.S.C. S 2778 et seq.,
and the International Traffic in Arms Regulations ("ITAR"),
22 C.F.R. Part 120 et seq., are at issue in this action.

3. Deny the first sentence. The remainder of this paragraph
sets forth legal argument, which requires no response, but
insofar as a response may be required, deny.

4. This paragraph sets forth plaintiff's further
characterization of this action, which requires no response,
but insofar as a response may be required, deny.

5. This paragraph sets forth plaintiff's further
characterization of this action, which requires no response,
but insofar as a response may be required, deny.

6. Deny. The Court lacks personal jurisdiction over the

-------
Footnote:

(1) The Complaint, which is 53 pages and 197 paragraphs,
does not comport with Fed. R. Civ. P. 8(a) and (e), which
require a "short and plain statement of the claim" and that
each averment be "simple, concise, and direct." Several
allegations are substantially similar, some repeated nearly
verbatim. See, eq.., 107, 112, 130, and 191 (allegations re:
seeking prior judicial action); 104, 108, 113, 117, 122,
126, 132, 192(c) (allegations re: judicial review); 109,
118, 127 (allegations re: procedural safeguards);
110, 119, 128 (allegations re: the scope of regulatory
standards); 106, 120, 129, 188 (allegations re: acting
within specified time and appeal time). Also, several
paragraphs, noted infra, contain legal argument in narrative
form or inter-mixed with claims for relief.
------

defendants sued in their individual capacities.  The Court
lacks subject matter jurisdiction to review the designation
of items as defense articles or defense services, 22 U.S.C.
S 2778(h), and with respect to claims arising under the
Administrative Procedure Act, 5 U.S.C. 5 551 et seq.

7. Deny.

8. Deny. Venue does not lie in this judicial district as to
the claims against the defendants sued in their individual
capacities.

9. Defendants lack sufficient knowledge to admit or deny the
averments of this paragraph.

10. Admit the first sentence. Deny the second sentence,
except to admit that the statutory authority of the
President under the AECA to promulgate regulation* with
respect to the export of defense articles and defense
services was delegated to the Secretary of State by
Executive Order 11958, 42 Fed. Re*. 4311 (Jan. 18, 1977) as
amended. See 22 U.S.C. S 2751 note.

11. Deny, except to admit that the Arms Control and
Disarmament Agency ("ACDA") is an agency of the Government
of the United States.

12. Deny, except to admit that the Department of Defense is
an agency of the Government of the United States and that
the designation of items on the United States Munitions List
"are made by the Department of State with the concurrence of
the Department of Defense." 22 C.F.R. S 120.2; E.O. 11958, 5
1(1)(1).

13. Deny, except to admit the Department of Commerce is an
agency of the Government of the United States, and that
commodity jurisdiction ("CJ") determinations entail
"consultation among the Departments of State, Defense,
Commerce and other U.S. Government agencies and industry in
appropriate cases." 22 c.F.R. S 120.41(a).

14. Deny, except to admit that the National Security Agency,
a component of the Department of Defense, is an agency of
the Government of the United States, and that the
designation of items on the United States Munitions List
"are made by the Department of State with the concurrence of
the Department of Defense. n a 2 C . F . R . S 120.2; E.O.
11958, S 1(1)(1).

15. Deny the first sentence, except to admit that defendant
Warren Christopher is and has been the United States
Secretary of State since January 20, 1993. Deny the second
sentence, except to admit that the statutory authority of
the President under the AECA to promulgate regulations with
respect to the export of defense articles and defense
services was delegated to the Secretary of State by
Executive Order 11958, 42 Fed. Req. 4311 (Jan. 18, 1977) as
amended, see 22 U.S.C. 5 2751 note, and that by virtue of
delegations of authority by the Secretary of State, the ITAR
are primarily administered by the Director of the Office of
Defense Trade Controls, Bureau of Political Military
Affairs, Department of State. See 22 C.F.R. S 120.1(a).

16. Deny the first sentence, except to admit that defendant
William Perry is and has been the United States Secretary of
Defense since February 3, 1994. Deny the second sentence.

17. Deny the first sentence, except to admit that defendant
Ronald Brown is and has been the united States Secretary of
Commerce since January 22, 1993. Deny the second sentence.

18. Deny the first sentence, except to admit that defendant
Admiral J.M. McConnell is and has been the Director of the
National Security Agency since May 22, 1992. Deny the second
sentence.

19. Deny the first sentence, except to admit that defendant
John Holum is and has been the Director of the Arms Control
and Disarmament Agency since November 22, 1993. Deny the
second sentence.

20. Deny, except to admit that at a time relevant to this
action, defendant William G. Robinson served *g the Director
of the Office of Defense Trade Controls of the Bureau of
Political Military Affairs within the State Department and,
pursuant to 22 C.F.R. 5 120.1 (a), by virtue of delegations
of authority by the Secretary of State, the ITAR are
primarily administered by the director of ODTC.

21. Deny, except to admit that ,a-t a time relevant to this
action, defendant Charles Ray served in the Office of
Defense Trade Controls of the Bureau of Political Military
Affairs within the State Department and provides staff
assistance in the administration of the ITAR by ODTC.

22. Deny, except to admit that at a time relevant to this
action, defendant Gary M. Oncale served in the Office of
Defense Trade Controls of the Bureau of Political Military
Affairs within the State Department and provided staff
assistance in the administration of the ITAR by ODTC.

23. Deny, except to admit that at a time relevant to this
action, defendant Michael Newlin served as Acting Deputy
Assistant Secretary in the Bureau of Political Military
Affairs.

24. Deny, except to admit that, at a time relevant to this
action, Greg Stark served as an official of the National
Security Agency involved in evaluating technical aspects of
cryptographic software commodities in the commodity
jurisdiction process.

25. Deny, except to admit that, at a time relevant to this
action, Mark Koro served as an official of the National
Security Agency involved in evaluating technical aspects of
cryptographic software commodities in the commodity
jurisdiction process.

26. This paragraph sets forth plaintiff's further
characterization of this action, which requires no response,
but insofar as a response may be required, deny.

27. This paragraph sets forth legal argument, which requires
no response, but insofar as a response may be required,
deny, except to admit that the ITAR are primarily
administered by the Office of Defense Trade Controls, bureau
of Political Military Affairs, Department of State.

28. Deny.

29. This paragraph does not contain averments of fact to
which a response is required, but insofar as a response may
be required, deny.

30. Deny the first sentence. The second sentence does not
contain an averment of fact to which a response is required,
but insofar as a response may be required, deny.

31. Deny.

32. This paragraph characterizes 22 U.S.C. S 2778(a)(1),
which speaks for itself, and requires no response, but
insofar as a response may be required, admit.

33. Deny the first sentence, except to admit that the
Department of State promulgated the International Traffic in
Arms Regulations, 22 C.F.R. ºº 120-130. The second sentence
characterizes 22 C.F.R. º 121.1, which speaks for itself,
and requires no response, but insofar as a response may be
required, admit.

34. This paragraph characterizes 22 C.F.R. S 120.9, which
speaks for itself, and requires no response, but insofar as
a response may be required, deny, except to admit that 22
C.F.R. S 120-9 sets forth the definition of a defense
service.

35. Admit.

36. The averment in this paragraph is not complete, but
references paragraphs 37-40 and, for this reason, a response
is no* required, but insofar as a response may be required,
deny.

37. Deny.

38. This paragraph characterizes 22 C.F.R. º 122.1 and 22
U.S.C. 5 2778(b)(1)(A), which speak for themselves, and
requires no response, but insofar as a response may be
required, deny, except to admit that "if it is determined
that the commodity is a defense article or service covered
by the U.S. Munitions List, registration is required for
exporters, manufacturers, and of defense articles and
defense services" pursuant to 22 C.F.R. Part 122. 22 C.F.R.
S 120.4(b).

39. Deny, except to admit that, pursuant to 22 C.F.R. S
123.1(a), any person who intends to export a defense article
must obtain the approval of the State Department prior to
the export, unless the export qualifies for an exemption
under the ITAR.

40. Deny the first sentence. The second sentence sets forth
legal argument, which requires no response, but insofar as a
response may be required, deny.

41. The first sentence characterizes 22 C.F.R. S 127.3 and
22 U.S.C. S 2778(c), which speak for themselves, and
requires no response, but insofar as a response may be
required, deny, except to admit the referenced penalties for
willful violations of the AECA set forth at 22 U.S.C. S
2778(c). Admit the second sentence.

42. This paragraph characterizes Z2 C.F.R. S 120.4 (g),
which speaks for itself, and requires no response, but _
response may be required, deny, except to admit, that
pursuant to 22 C.F.R. S 120.4(g), the Deputy Assistant
Secretary of State for Political Military Affairs will
provide a written response within 30 days of receipt oú an
appeal.

43.  This paragraph characterizes 22 121.1 XIII(b)(l), which
speaks for itself, and requires no response, but insofar as
a response may be required, deny, except to admit that, to
22 C.F.R. S 121.1 XIII(b)(l), the United States Munitions
List includes cryptographic (including key management)
systems, equipment, assemblies, modules, integrated
circuits, components or software with the capability of
maintaining secrecy or confidentiality of information on
information systems, except cryptographic equipment and
software" listed therein, and that, under 2a C.F.R. S
121.8(f), "software includes but is not limited to "the
system functional design, logic flow, algorithms,
application programs, operating systems and support software
for design, implementation, test operation, diagnosis and
repair."

44. This paragraph sets forth legal argument, which requires
no response, but insofar as a response may be required,
deny.

45. Deny, except to admit that 22 C.F.R. S 120.17 sets forth
the definition of an export. The second sentence sets forth
legal argument, which requires no response, but insofar as a
response may be required, deny.

46. This paragraph characterizes 22 C.F.R. S 120.16, which
speaks for itself, and requires no response, but insofar as
a response may be required, deny, except to admit that 22
C.F.R. S 120-16 sets forth the definition of a foreign
person.

47. Admit.

48. Deny the first sentence, except to admit that 22 C.F.R.
S 120.11 sets forth the meaning of information in the public
domain. Deny the second sentence.

49. This paragraph sets forth legal argument, which requires
no response, but insofar as a response may be required,
deny.

50. Admit.

51. This paragraph appears to characterize 22 C.F.R. 5
127.10, which speaks for itself, and requires no response,
but insofar as a response may be required, admit.

52. Admit.

53. Deny, except to admit the quoted portion of the
paragraph which is part of the provision set forth at 22
C.F.R. S 128.1.

54. Deny, except to admit the quoted portion of the
paragraph which is part of the provision set forth at 22
C.F.R. s 120.3

55. Defendants lack sufficient knowledge or information to
admit or deny the first and second sentences. The third
sentence is a statement of plaintiff's wishes, and
defendants lack sufficient knowledge or information to admit
or deny. The fourth sentence is a citation to Exhibit A to
the complaint, which requires no response.

56. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph.

57. Deny the first sentence, except to admit that the
function of plaintiff's cryptographic software is to encrypt
information by using as one of its components a data
authentication hash function program. Deny the second
sentence. The third sentence characterizes 22 C.F.R. S 121.1
XIII(b)(l)(v1), which *peaks for itself, and requires no
response, but insofar as a response may be required, deny,
except to admit that category XIII(b)(l)(vi) of the USML
excludes from the definition Or cryptographic equipment and
software certain data authentication software described
therein.

58. Deny, except to admit that plaintiff's cryptographic
software was determined to be a defense article covered by
the United States Munitions List, 22 C.F.R. S 121.1
XIII(b)(l).

59. This paragraph sets forth a statement of plaintiff's
intentions and wishes, and defendants lack sufficient
knowledge or information to admit or deny.

60. The first sentence is a statement oú plaintiff's wishes,
and defendants lack sufficient knowledge of information to
admit or deny. Defendants lack sufficient knowledge or
information to admit or deny the second sentence.

61. Deny, except to admit that plaintiff submitted the
letter and documents set forth at Exhibit A to the
Complaint, subsequently designated CJ 191-92, seeking a com-
modity jurisdiction determination.

62. Deny, except to admit that defendants Stark and Koro of
the National Security Agency, acting within their official
capacities, evaluated the technical aspects of the
cryptographic software commodity in the commodity
jurisdiction process.

63. Deny, except to admit that, by letter dated August 20,
1992, the Director of the office of Defense Trade Controls
advised the plaintiff of the State Department's commodity
jurisdiction determination, which is set forth at Exhibit B
to the Complaint.

64. Deny the first sentence, except to admit that plaintiff
attempted to communicate with persons at ODTC and NSA
regarding the CJ determination. Deny the second sentence.

65. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph. Defendants have been unable
to locate a copy of the September 22, 1993 letter at Exhibit
Complaint or confirm that an appeal was submitted.

66. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph. Defendants have been unable
to locate a copy of the September 22, 1993 letter at Exhibit
C to the Complaint or confirm that an appeal was submitted.

67. Deny, except to admit that plaintiff submitted the
letters and documents set forth at Exhibit D to the
Complaint.

68. This paragraph sets forth a statement of plaintiff's
purpose, and defendants lack sufficient knowledge to admit
or deny.

69. Deny, except to admit that by letter dated October 5,
1993, the Director of the Office of Defense Trade Controls
advised the plaintiff of the State Department's commodity
jurisdiction determination, which is set forth at Exhibit E
to the Complaint.

70. Deny, except to admit that plaintiff did not appeal CJ
214-93.

71. This paragraph sets forth legal argument, which requires
no response, but insofar as a response may be required,
deny, except to admit that by letter* dated August 20, 1992,
and October 5, 1993, the Director of the Office of Defense
Trade Controls advised the plaintiff of the State
Department's commodity jurisdiction determinations, which
are set forth at Exhibits B and E to the Complaint.

72. Deny, except to admit that, pursuant to 22 C.F.R. º
123.1(a), any person who intends to export a defense article
must obtain the approval of the State Department prior to
the export, unless the export qualifies for an exemption
under the ITAR.

73. Deny, except to admit that defendants have been unable
to locate a copy of the September 22, 1993 letter at Exhibit
C to the Complaint or confirm that an appeal was submitted,
and that plaintiff has not applied for or received an export
license. Defendants lack sufficient knowledge or information
as to the remaining allegations of this paragraph.

74. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph.

75. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph.

76. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph.

77. Defendants lack sufficient knowledge to admit or deny
the averments in this paragraph.

78. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny

79. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

80. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

81. Deny the first sentence, except to admit that some
aspects of government policy with respect to cryptography
has been subject to public policy debate. Defendants lack
sufficient knowledge to admit or deny the averments of
second sentence since the sentence does not specify the
referenced government initiatives. Defendants lack
sufficient knowledge to admit or deny the third sentence,
except to admit that there is scientific interest in
cryptology.

82. Defendants lack sufficient knowledge to admit or deny
the averments of first sentence since the sentence does not
specify the referenced government initiatives that are
"currently being debated in Congress." Deny the second
sentence, except to admit that the Clipper Chip and Key
Escrow Encryption issues concern some issues of
cryptography. Deny the third sentence, except to admit that
the preceding Congress considered but did not enact
legislation that would have altered the existing statutory
and regulatory provisions at issue in this case.

83. Deny the first sentence, except to admit that
plaintiff's cryptographic software allows for data
confidentiality and uses as one of its components data
authentication technology. The second sentence sets forth
plaintiff's purpose in designing the software at issue, and
defendant lacks sufficient knowledge or information to admit
or deny. The third sentence sets forth legal argument, which
does not require a response, but insofar as a response may
be required, deny.

84. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

85. This paragraph sets forth plaintiff's allegation of the
relief sought, which requires no response, but insofar as a
response may be required, deny.

86. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny, except to admit that plaintiff alleges that
the AECA and ITAR are unconstitutional.

87. Deny.

88. Deny.

89. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

90. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

91. This paragraph sets forth legal argument, which does not
require a response, but insofar as a response may be
required, deny.

92. Deny.

93. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

94. The averment in this paragraph is not complete, but
references paragraphs 95-98 and, for this reason, a response
is not required, but insofar as a response may be required,
deny.

95. Deny.

96. Deny.

97. Deny, except to admit that, pursuant to S 123.1(a), any
person who intends to export a defense article must obtain
the approval of the State Department prior to the export,
unless the export qualifies for an exemption under the ITAR.

98. Deny.

99. Deny.

100. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

101. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

102. Deny (including the prayer for relief).

103. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

104. Deny, except to admit that the Court lacks subject
matter jurisdiction to review the designation of items as
defense articles or defense services, 22 U.S.C. S 2778(h),
and with respect to claims arising under the Administrative
Procedure Act, 5 U.S.C.

105. Deny the first sentence, except to admit that plaintiff
submitted to the Office of Defense Trade Controls the
commodity jurisdiction requests set forth at Exhibits A and
D to the Complaint. Deny the second sentence, except to
admit that the "commodity jurisdiction procedure is used
with the U.S. Government if doubt exists as to whether an
article or service is covered by the U.S. Munitions List."
22 C.F.R. S 120.4(a). Deny the third sentence, except to
admit that plaintiff submitted his commodity jurisdiction
request on June 30, 1992, and received a determination on
August 20, 1992. Deny the remainder of the paragraph.

106. Deny the first two sentences, except to admit the
quoted portion of the paragraph which is part of the
provision set forth at 22 C.F.R. º 120.4(e). Deny the third
sentence.

107. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

108. Deny the first sentence, except to admit that the Court
lacks subject matter jurisdiction to review the designation
of items as defense articles or defense services, 22 U.S.C.
S 2778(h), and with respect to claims arising under the
Administrative Procedure Act, 5 U.S.C. S 551 et seq. Deny
the second sentence.

109. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

110. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

111. The first sentence characterizes 22 C.F.R. S 120.4(g),
which speaks for itself, and no response is required, but
insofar as a response may be required, deny, except to admit
that, pursuant to 22 C.F.R. S 120.4(g), the deputy assistant
Secretary of State for Political Military Affairs will
provide a written response within 30 days of receipt of an
appeal. Deny the second sentence. Defendants lack sufficient
knowledge to admit or deny the averments of the third
sentence since defendants have been unable to locate a copy
of the September 22, 1993 letter at Exhibit C to the
Complaint or confirm that an appeal was submitted.

112. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

113. Admit the first sentence. The remainder of this
paragraph sets forth legal argument, which requires no
responses, but insofar as a response may be required, deny
except to admit that the Court lacks subject matter
jurisdiction to review the designation of items as defense
articles or defense services. 22 U.S.C. S 2778(h).

114. Deny (including the prayer for relief).

115. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

116. Deny, except to admit that "if it is determined that
the commodity is a defense article or service covered by the
U.S. Munitions list, registration is required for exporters,
manufacturers, and furnishers of defense articles and
defense services" pursuant to 22 C.F.R. Part 122. 22 C.F.R.
S 120.4(b).

117. The first sentence characterizes 2Z C.F.R. 5 128.1,
which speaks for itself, and no response is required, but
insofar as a response may be required, deny, except to admit
that the Court lacks subject matter jurisdiction to review
the designation of items as defense articles or defense
services, 22 U.S.C. S 2778(h), and with respect to claims
arising under the Administrative Procedure Act, 5 U.S.C. S
551 et seq. Deny the second sentence.

118. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

119. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

120. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

121. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

122. Deny, except to admit that the Court lacks subject
matter jurisdiction to review the designation of items as
defense articles or defense services, 22 U.S.C. 5 2778(h),
and with respect to claims arising under the Administrative
Procedure Act, 5 U.S.C. S 551 et seq.

123. Deny (including the prayer for relief).

124. This paragraph realleges and incorporates by reference
prior allegations, and defendants'prior responses thereto
are also incorporated by reference.

125. This paragraph appears to characterize 22 C.F.R. Part
123, which speaks for itself, and no response is required,
but insofar as a response may be required, deny.

126. The first sentence characterizes 2Z CFR. S 128.1, which
speaks for itself, and no response is required, but insofar
as a response may be required, deny, except to admit that
the Court lacks subject matter jurisdiction to review the
designation of items as defense articles or defense
services, 22 U.S.C. S 2778(h), and with respect to claims
arising under the Administrative Procedure Act, 5 U.S.C. S
551 et seq. Deny the second sentence.

127. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

128. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

129. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

130. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

131. Deny, except to admit that the office of Defense Trade
Controls advised the plaintiff of the State Department's
commodity jurisdiction determinations, which are set forth
at Exhibits B and E to the Complaint.

132. Deny, except to admit that the Court lacks subject
matter jurisdiction to review the designation of items as
defense articles of defense services, 22 U.S.C. S 2778(h),
and with respect to claims arising under the Administrative
Procedure Act, 5 U.S.C. º 551 et seq.

133. Deny (including the prayer for relief).

134. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

135. Deny the first sentence. The second sentence sets forth
legal argument, which requires no response, but insofar as a
response may be required, deny. The remainder of this
paragraph is not complete but references several succeeding
paragraph, and for this reason a response is not required,
but insofar as a response may be required, deny.

136. Deny the first sentence, except to admit that 121.1 --
Category XIII, Auxiliary Military Equipment -- includes on
the United States Munitions List cryptographic systems,
devices, equipment and software "with the capability of
maintaining secrecy or confidentiality of information or
information systems," except as noted therein. See 22 C.F.R.
S 121.1 XIII(b). The remainder of this paragraph sets forth
legal argument, which requires no response, but insofar as a
response may be required, deny.

137. Deny the first sentence, except to admit that the
definition of technical data "does not include information
concerning general scientific, mathematical or engineering
principles commonly taught in schools, colleges, and
universities or information in the public domain as defined
in S 1201.11" and also doe* not include "basic marketing
information on function or purpose or general system
descriptions of defense articles." 22 C.F.R. S 120.10(a)(5).
The remainder of this paragraph sets forth legal argument,
which requires no response, but insofar as a response may be
required, deny.

138. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

139. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

140. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

141. The first two sentences set forth legal argument, which
requires no response, but insofar as a response may be
required, deny. Deny the third sentence.

142. Deny the first sentence, except to admit the definition
of software set forth at 22 C.F.R. S 121.8(f). The second
sentence does not state a fact or claim, but sets forth
speculation as to how defendants have "possibly interpreted"
the ITAR, which requires no response, but insofar as a
response may be required, deny. The third sentence sets
forth legal argument, which requires no response, but
insofar as a response may be required, deny.

143. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

144. That paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

145. Deny.

146. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

147. Deny (including the prayer for relief).

148. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

149. The averment in this paragraph is not complete, but
reference several succeeding paragraphs. It also sets forth
legal argument, which requires no response, but insofar as a
response may be required, deny.

150. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny, except to admit the policy on designating
and determining a defense article and defense service in the
future is set forth at 22 C.F.R. S 120.3.

151. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny, except to admit the policy on designating
and determining article and defense service in the future is
set forth at 22 C.F.R. S 120.3.

152. Deny the first sentence, except to admit that 22 C.F.R.
S 120.17 sets forth the definition of an export. The
remainder of this paragraph sets forth legal argument, which
requires no responses, but insofar as a response may be
required, deny.

153. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

154. Deny.

155. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

156. Deny the first sentence. The second sentence purports
to characterize the "essence" of a conversation with
defendant Charles Ray and, as such, does not sufficiently
state a factual allegation. It also constitutes legal
argument, which requires no response, but insofar as a
response may be required, deny.

157. Deny.

158. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny, except to admit that 22 C.F.R. S 121.1 --
Category XIII, Auxiliary Military Equipment - includes on
the United States Munitions List cryptographic systems,
devices, equipment and software *with the capability of
maintaining secrecy or confidentiality of information or
information systems," except as noted therein. See 22 C.F.R.
S 121.1 XIII(b).

159. Deny the first sentence, except to admit the definition
of software set forth at 22 C.F.R. S 121.8(f). The remainder
of this paragraph sets forth legal argument, which requires
no response, but insofar as a response may be required,
deny.

160. Deny the first sentence, except to admit that the
Director of the Office of Defense Trade Controls advised the
plaintiff of the State Department's commodity jurisdiction
determination*, which are set forth at Exhibits B and E to
the Complaint. Deny the second sentence, except to admit
that, pursuant to 22 C.F.R. S 123.1(a), any person who
intends to export a defense article must obtain the approval
of the State Department prior to the export, unless the
export qualifies for an exemption under the ITAR.

161. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

162. Deny.

163. This paragraph sets forth legal argument, which does
not require a response, but insofar as a response may be
required, deny.

164. Deny (including the prayer for relief).

165. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

166. Deny the first sentence, except to admit that plaintiff
sought the commodity jurisdiction determinations set forth
at Exhibits A and D to the Complaint. Defendants lack
sufficient knowledge to admit or deny the averments in the
second and third sentences.

167. Deny the first sentence, except to admit that, by
letters dated August 20, 1992 and October 5, 1993, the
Director of the Office of Defense Trade Controls advised the
plaintiff of the State Department's commodity jurisdiction
determinations, which are set forth at Exhibits B and E to
the Complaint. Deny the second sentence. The remainder of
this paragraph sets forth legal argument, which requires no
response, but insofar as a response may be required, deny.

168. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

169. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

170. Deny (including the prayer for relief).

171. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior-responses thereto
are also incorporated by reference.

172. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

173. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

174. Defendants lack sufficient knowledge to admit or deny
the averments of this paragraph.

175. Defendants lack sufficient knowledge to admit or deny
the averments of the first sentence. Deny the second
sentence.

176. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

177. Deny (including the prayer for relief).

178. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

179. The first sentence characterizes 22 C.F.R. S 121.8(f),
which speaks for itself, and requires no response, but
insofar as a response may be required, admit the quoted
portion of the paragraph set forth at 22 C.F.R. S 121.8(f).
Deny the second sentence, except to admit that, pursuant to
*2 C.F.R. S 121.1 XIII(b)(l), the United State* Munitions
List includes "Cryptographic (including key management)
system*, equipment, assembler, modules, integrated circuits,
components or software with the capability of maintaining
secrecy or confidentiality of information on information
systems, except cryptographic equipment and software listed
therein. Admit the third sentence.

180. This paragraph sets forth legal argument, which
requires no response but insofar as a response may be
required, deny.

181. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

182. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

183. Deny (including the prayer for relief).

184. This paragraph realleges and incorporates by reference
prior allegations, and defendants' prior responses thereto
are also incorporated by reference.

185. Deny the first sentence, except to admit that plaintiff
sought the commodity jurisdiction determinations set forth
at Exhibits A and D to the Complaint. Deny the second
sentence.

186. Deny, except to admit that defendants have been unable
to locate a copy of the September 22, 1993 letter at Exhibit
C to the Complaint or confirm that an appeal was submitted.

187. This paragraph sets forth legal argument, which
requires no response, but insofar as a response may be
required, deny.

188. Deny the first two sentences, except to admit the
quoted portion of the paragraph which is part of the
provision set forth at 22 C.F.R. S 120.4(e). Deny the third
sentence.

189. Deny.

190. Deny.

191. This paragraph sets forth legal argument, which
requires no response, but insofar as a responses may be
require*, deny.

192. Deny. a) Deny. b) Deny. c) Deny. d) Deny. e) Deny. f)
Deny.

193. Deny, except to admit that coordination with ACDA
concerns those matters within ACDA's area of responsibility.

194. Deny.

195. Deny.

196. Deny the first sentence.  The second sentence sets
forth legal argument, which requires no response, but
insofar as A response may be required, deny. Deny the third
sentence, except to admit that the ITAR permitted the
plaintiff to appeal the CJ determinations at issue, and
defendants have been unable to locate a copy of the
September 22, 1993 letter at Exhibit C to the Complaint or
confirm that an appeal was submitted as to CJ 191-92, and
that plaintiff did not appeal CJ 214-93.

197. Deny.

Defendants deny that plaintiff is entitled to the relief for
which he prays or to any relief whatsoever.

WHEREFORE, defendants, having fully answered, respectfully
pray that this action be dismissed with prejudice and that
this Court award the defendants such other and further
relief as the court may deem just and proper.

    Respectfully Submitted,

    FRANK W. HUNGER
    Assistant Attorney General

    MICHAEL J. YAMAGUCHI
    United States Attorney

    MARY BETH UITTI
    Assistant United States Attorney
     450 Golden Gate Avenue
     San Francisco, California 94102
     Telephone: [phone]

<signature>

VINCENT M GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1020
     901 E Street, N.W.
     Washington, D.C.  20530
     Tel:  [phone]
     Fax:  [phone] Or 616-8460

Attorneys for the United States

            CERTIFICATE OF SERVICE

I hereby certify that on this the 1st day of May 1995, a
copy of the foregoing Answer was served by first class mail,
postage prepaid, on:

Cindy A. Cohn
McGLASHAN & SARRAIL
177 Bovet Road, Sixth Floor
San Mateo, California  94402

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ANTHONY COPPOLINO