CINDY A. COHN, ESQ.;  SBN 145997
McGLASHAN & SARRAIL
Professional Corporation
177 Bovet Road, Sixth Floor
San Mateo, CA  94402
Tel:  (415) 341-2585
Fax: (415) 341-1395

LEE TIEN, ESQ.:  SBN 148216		ROBERT CORN-REVERE, ESQ.
1452 Curtis Street			JULIA F. KOGAN, ESQ.
Berkeley, CA  94702			JEREMY B. MILLER, ESQ.
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M. EDWARD ROSS, ESQ;  SBN 173048	Washington, DC  20004
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JAMES WHEATON;  SBN 115230
ELIZABETH PRITZKER; SBN 146267
FIRST AMENDMENT PROJECT
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Oakland, CA  94612
Tel:  (510) 208-7744

Attorneys for Plaintiff
Daniel J. Bernstein


IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA
	
				)	
DANIEL J. BERNSTEIN,		)	Case No. C-95-0582 MHP
				)	
		Plaintiff	)	PLAINTIFF'S OPPOSITION TO 
				)	DEFENDANTS' MOTION FOR
				)	RECONSIDERATION AND 
UNITED STATES DEPARTMENT OF 	)	REPLY TO DEFENDANTS'
STATE, et al.,			)	REQUEST FOR CLARIFICATION
				)	
	Defendants.		)
				)

INTRODUCTION	

	Plaintiff Daniel J. Bernstein, by his attorneys, hereby opposes
Defendants' Motion to Reconsider this Court's December 16, 1996
Memorandum Opinion and Order.  Although a district court "may
reconsider its grant of summary judgment under either Fed. R. Civ. P.
59(e)  (motion to alter or amend a judgment) or 60(b) (relief from
judgment), Defendants must show, as a threshold matter, that new
material facts have emerged or that there has been a change in law
since issuance of the order. 1/  Reconsideration is appropriate only
where the court is presented with newly discovered evidence, where the
court has committed clear error, or there has been an intervening
change in controlling law.  Reconsideration for any other reason would
be "highly unusual."  School Dist. No. 1J, Multnomah County, Oregon v.
ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993), cert. denied, 114 S.
Ct. 2742 (1994).
	No circumstances warranting reconsideration exist in this
case.  Although Defendants have rearranged the chairs for the agencies
that will administer the prior restraint at issue, the government has
made no material change in its regulations regarding the export of
cryptographic software.  Even the modifications now being proffered to
this Court are ephemeral, for Defendants have expressly reserved the
right to reimpose the ITAR regulations.  In short, there is nothing to
reconsider.  Clarification may be appropriate, however, to explore the
extent to which Defendants are free to disregard the this Court's
constitutional findings.

ARGUMENT	

I.      RECONSIDERATION OF THIS COURT'S DECEMBER 1996 ORDER IS
	COMPLETELY UNJUSTIFIED

	The sole rationale for reconsideration offered by Defendants is
that the ITAR regulations upon which this Court's Order was based "have
been superseded."  Defendants' Memorandum of Points and Authorities in
Support of the Motion for Reconsideration ("Recon. Motion") at 2.
Although Defendants acknowledge, as they must, that "the controversy
between the parties continues under the new EAR" and that "the parties'
dispute as to licensing procedures for plaintiff's encryption source
code, and as to technical data, would continue," they assert that "the
ITAR no longer governs the export of plaintiff's source code or
technical data."  Id. at 2-3.
	It is by no means clear that Defendants are even technically
correct in their claim that the ITAR no longer applies.  As President
Clinton's Memorandum accompanying Executive Order 13026 made clear,
Defendants retain the authority at their discretion to redesignate
encryption products as defense articles "to be placed on the United
States Munitions List and controlled pursuant to the terms of the terms
of the Arms Export Control Act and the International Traffic in Arms
Regulations."  Recon. Motion, Tab A.  Moreover, Executive Order 13026
provides that Defendants "shall" control the "export of assistance
(including training) to foreign persons in the same manner and to the
same extent as the export of such assistance is controlled under the
AECA."  It further provides that the regulation of encryption products
"shall be subject to such further conditions as the President may
direct."  Id.  Far from implementing a substantive change in the law,
the Executive Order specifies that the new process "is intended only
	Although Plaintiff agrees with the Defendants that "[a]ny final
judgment in this case should be directed at the current regulatory
policy," 2/ there is no basis for reconsidering this Court's previous
Order.  Instead, Plaintiff proposes that this Court consider a separate
Summary Judgment on the new regulations.  Defendants themselves cite a
Supreme Court decision declining to alter its previous opinion when
presented with a claim of mootness due to intervening replacement of
one ordinance with another.   The Court characterized the question as
"whether the new ordinance is sufficiently similar to the repealed
ordinance that it is permissible to say that the challenged conduct
continues . . . ."  Northeastern Florida Chapter of the Associated
General Contractors of America v. City of Jacksonville, 508 U.S. 656,
662 n.3 (1993).  The Court stated, "Nor does it matter that the new
ordinance differs in certain respects from the old one.  . . . The new
ordinance . . . disadvantages [petitioner] in the same fundamental way
	The Supreme Court similarly rejected a mootness claim in City
of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289 (1982), where
it applied the "well settled" rule that "a defendant's voluntary
cessation of a challenged practice does not deprive a federal court of
its power to determine the legality of the practice."  City of Mesquite
is particularly relevant here, because the Court refused to reverse as
moot a holding based upon an ordinance that was subsequently amended in
an attempt to eliminate vagueness.   The Court stressed that "[m]ere
voluntary cessation of allegedly illegal conduct does not moot a case;
if it did, the courts would be compelled to leave "[t]he defendant . .
. free to return to his old ways.'"  Id. at 289 n.10, citing United
States v. W. T. Grant Co., 345 U.S. 629, 632 (1953);  United States v.
Trans-Missouri Freight Assn., 166 U.S. 290 (1897).
	The only authorities Defendants cite in support of their
Motion, Diffenderfer v. Central Baptist Church of Miami, Inc., 404 U.S.
412 (1972) (per curiam) and Fusari v. Steinberg, 419 U.S. 379 (1975),
see Recon. Motion at 3 nn.5, 8, were expressly distinguished in
Northeastern Florida, 508 U.S. at 662 n.3 (citations omitted), where
the Court noted  that both cases predate City of Mesquite, and also
that "the statutes at issue in those cases were changed substantially,
and . . there was therefore no basis for concluding that the challenged
conduct was being repeated."  Here, by contrast, "[t]here is no mere
risk that [the government] will repeat its allegedly wrongful conduct;
it has already done so."  Northeastern Florida, 508 U.S. at 662.

II.     THIS COURT SHOULD CLARIFY THE EXTENT TO WHICH DEFENDANTS MAY
	IGNORE THE CONSTITUTIONAL FINDINGS IN THE DECEMBER 1996 ORDER

	At the time of the December Order this Court anticipated that
the guidance it provided would enable the parties to reach a
stipulation to permit Professor Bernstein to teach free of the threat
of prosecution.  And so it did.  Yet just two weeks after this Court
held that the licensing scheme for cryptographic software imposed an
unconstitutional prior restraint on its face, the government adopted
new rules that Defendants acknowledge impose the same "essential
requirements that previously applied to encryption source code under
the ITAR."  Recon. Motion at 2.
	Defendants have given this Court's Order the narrowest possible
interpretation, limiting its scope effectively to the stipulation and
nothing more.  This position threatens Plaintiff with prosecution
should he "export" his encryption software without a license.  In
adopting a new set of rules, the government chose to reimpose
fundamentally the same system of prior restraint that this Court
concluded is unconstitutional, and, in their statements to Plaintiff,
have acted as if the Order does not exist.  Defendants correctly point
out that this Court so far has not issued an injunction, but a
declaratory ruling should eliminate uncertainty about legal obligations
and prevent future litigation.  Such a declaration "should be a message
not only to the parties but also to the public" and should have
"significant educational and lasting importance." Bilbrey v. Brown, 738
F.2d 1462, 1471 (9th Cir. 1984).  It should be "another marker along
the road to implementation of [constitutional] rights."  Id.  It is
difficult to conclude that a declaratory ruling performs this function
when Defendants ignore its constitutional findings, both in their
issuance of new regulations and in their threats to Plaintiff. 3/
Given these developments, Plaintiff agrees that all parties would
benefit from this Court's clear direction.  However, any such
clarification can be accomplished when it rules on Summary Judgment
pursuant to Plaintiff's Supplemental Complaint.

CONCLUSION

	For the foregoing reasons, this Court should deny Defendants'
Motion for Leave to File a Motion for Reconsideration.

					Respectfully submitted,

					McGLASHAN & SARRAIL, P.C.
					Professional Corporation



					By: _______________________
					       CINDY A. COHN
		


1/      Civil L. R. 7-9(b)(2).  Similarly, Civil L.R. 7-9(b)(1)
requires the moving party to demonstrate that it did not know, or could
not reasonably have discovered the purported change in law "at the time
of the interlocutory order."  Although the specific Department of
Commerce regulations were not issued until December 30, 1996,
Defendants were well aware of the impending transfer of jurisdiction,
as evidenced by Executive Order 13026, filed with this Court by
Defendants on November 26, 1996 and as Attachment A in the instant
Motion.  Moreover, Defendants participated in promulgation of the new
regulations.
2/      Plaintiff has filed a Request for Leave to File a Supplemental
Complaint to account for the government's procedural adjustments and
intends to immediately file for Summary Judgment after the Supplemental
Complaint is filed.  Defendants do not oppose supplementing the
complaint "in principle," except as to the addition of new Defendants
(Department of Justice, Central Intelligence Agency and the Department
of Energy).  The addition of these parties as Defendants is appropriate
because they have been given authority over exports only because
encryption products have been transferred to the Commerce Control
List.  Whether or not these parties will promulgate rules, they will
have the ability to block the grant of export licenses.  Plaintiff is
challenging the export regulations both on their face and as applied.
3/      Once a district court issues a declaratory ruling that a
statutory scheme is facially unconstitutional, as occurred here, it has
the authority to grant other necessary relief, such as barring
enforcement "as to any to whom [the regulations] might be applied."
Doe v. Gallinot, 657 F.2d 1017, 1024 (9th Cir. 1981).