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ELIZABETH PRITZKER; SBN 146267
FIRST AMENDMENT PROJECT
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Attorneys for Plaintiff
Daniel J. Bernstein



			IN THE UNITED STATES DISTRICT COURT
			FOR THE NORTHERN DISTRICT OF CALIFORNIA


DANIEL J. BERNSTEIN			)
					)  C 95-00582 MHP
           		Plaintiff,	)
					)  MEMORANDUM IN SUPPORT OF
v.					)  EXPEDITED MOTION FOR LEAVE
					)  TO FILE SUPPLEMENTAL PLEADING
					)  F.R.C.P. 15(d) and Local Rule 7-10
UNITED STATES DEPARTMENT OF 		)
 STATE et al.,				)
					)
					)
	   Defendants.			)
                                        )

	Plaintiff seeks leave to file a proposed First Supplemental
Complaint ("Supp. Compl."), a copy of which is attached hereto as
Exhibit A and which has been served upon counsel for defendants now
parties to this action, Mr.  Anthony Coppolino.    Plaintiff hereby
certifies that he has complied with Local Rules 7-10(b) and (c).
Defendants have stated that they intend to respond formally to this
Motion.
	This action was filed on Feb. 21, 1995, challenging the
constitutionality of the Arms Export Control Act ("AECA"), 22 U.S.C.
sec. 2778 et seq., and its implementing regulations, the International
Traffic in Arms Regulations ("ITAR"), 22 C.F.R. Part 120 et seq., on
their face and as applied to plaintiff.
	New facts and law affecting this controversy have occurred, and
the proposed First Supplemental Complaint updates the pleadings as to a
new regulatory regime for encryption export licensing and adds new
defendants who participate in the new licensing scheme.
	The Supplemental Complaint seeks injunctive and declaratory
relief against the prohibitions contained in the new regulatory scheme
for exports of encryption goods and technology.  61 Fed.Reg.  68572
(1996) ("EI regulations"),  Exh. C to Supp.Compl.
	Plaintiff requests expedited review of this motion, because the
new regulatory scheme which went into effect immediately on December
30, 1996, is a prior restraint that suffers from the same
constitutional defects as held unconstitutional by this Court in its
Memorandum and Order of December 16, 1996, and thus violates
plaintiff's First Amendment rights.

	CHANGE IN REGULATORY CONTEXT

	On December 30, 1996, regulatory jurisdiction over cryptography
export licensing was transferred from the regime attacked in the
Complaint, i.e., the ITAR Scheme, to a regime administered primarily by
the Commerce Department ("Commerce").  This new regime ("EAA/IEEPA
Scheme"), has been grafted onto the existing Commerce export licensing
regime of the Export Administration Regulations ("EAR"), 15 C.F.R.
Parts 730 et seq. [cite pleading]
	For constitutional purposes, the EAA/IEEPA Scheme is virtually
identical to the predecessor ITAR Scheme.  The EAA/IEEPA Scheme by its
terms regulates "encryption products that are or would be . . .
designated as defense articles in Category XIII of the [U.S.] Munitions
List and regulated by the [U.S.] Department of State pursuant to the
Arms Export Control Act."  Executive Order 13,026, Supp.Compl. Exh. B.
	The EAA/IEEPA Scheme contains none of the procedural safeguards
that this Court found unconstitutionally absent from the previous ITAR
scheme.  It fails to limit agency discretion, to provide for prompt
judicial review or to require that the government go to court and
defend any decision to deny a license.
	In particular, the EAA/IEEPA Scheme requires a license prior to
the publication of materials containing cryptographic software in
electronic form.  15 C.F.R. sec. 734.2(b)(9); 742.15(a).  Note to 15
C.F.R. sec. 734.3 (b)(2) and (3).  It requires a license prior to
providing "technical assistance" to foreign persons, a term which
includes providing encryption software in the classroom, and either
encryption software or technology (called "technical data" under the
ITAR) at public conferences, or as part of normal peer review of
scientific ideas.  15 C.F.R. sec. 744.9(a).  Even as to printed
encryption source code, "[t]he administration continues to review
whether and to what extent scannable encryption source or object code
in printed form should be subject to the EAR and reserves the right to
impose export controls on such software."  61 Fed.Reg. 68575.
	Although the normal EAR provisions exempt publicly available
information, information resulting from fundamental research and
educational information from export controls, these exemptions do not
apply to "encryption software."  15 C.F.R. sec. 732.2(b); 734.8 (a);
734.9.
	Thus, as before, plaintiff may not may not send cryptographic
software to a scientific peer outside the United States, use encryption
software in teaching a foreign student,  or publish cryptographic
software on the Internet without a license.  15 C.F.R.  sec. 734.2
(b)(9), 744.9(a).  He may not provide information related to the design
of cryptographic software to foreign scientific peers except in
academic settings.  15 C.F.R. sec. 744.9 (a).

	NEW PARTIES

	Plaintiff seeks to add as Defendants the U.S. Department of
Energy, the U.S. Department of Justice, and the Central Intelligence
Agency.  These government agencies are now part of the process of
determining whether dissemination of any encryption software or
technology must be licensed.  15 C.F.R.S. sec. 750.3(b)(2)(v), 772,
Supp.Compl. Exhibit C.  They are therefore necessary and proper parties
to an adjudication of the constitutional issues raised by plaintiff.

	ARGUMENT

	Supplemental pleadings are liberally allowed because they avoid
piecemeal litigation.  Keith v. Volpe, 858 F.2d 467, 473 (9th Cir.
1988), cert.  denied, 493 U.S. 813 (1989) ("tool of judicial economy
and convenience").  Here, the additional facts alleged occurred after
the Complaint was filed, and plaintiff merely updates the action so as
to bring relevant new claims based on these facts within the Court's
jurisdiction.  Id., at 473-474.  The new claims are closely related to
the original action and they present the same fundamental issue:
whether a government export licensing scheme focused on cryptography is
an unconstitutional prior restraint on plaintiff's First Amendment
rights to publish, teach and exchange cryptography.
	The addition of new parties, namely DOJ, DOE and the CIA, is
also proper.  Fed.R.Civ.P. 15(d) "plainly permits supplemental
amendments to cover events happening after suit, and . . . persons
participating in these new events may be added if necessary."  Griffin
v. County School Bd., 377 U.S. 218, 227 (1964).  These agencies are
part of the new regulatory scheme.
	Leave to supplement under Fed.R.Civ.P. 15(d) is liberally
granted "unless undue prejudice to the opposing party will result; the
purpose of the rule is to promote complete adjudication between the
parties."  LaSalvie v. United Dairymen of Arizona, 804 F.2d 1113, 1119
(9th Cir. 1986), cert. denied, 482 U.S. 928 (1987).  Defendants are
not prejudiced by this Supplemental Pleading, which is offered within
days of the effective date of the new regulations and raises legal
issues almost identical to those already adjudicated by the Court.
	Adjudication of plaintiff's rights cannot be "complete" without
the Court's addressing the new licensing scheme, and the public
interest in free speech and academic freedom will be served by
permitting plaintiff to plead these new claims.
	For the foregoing reasons, this Court should grant plaintiff
leave to file the proposed Supplemental Pleading and thereby add the
new claims and parties.


Date: January 13, 1996		McGLASHAN & SARRAIL
				Professional Corporation


					(signed Cindy A. Cohn)
				By _________________________________
					   CINDY A. COHN