RUDOLPH CONTRERAS, United States District Judge.
The Arms Export Control Act ("AECA" or "the Act") authorizes the President "to control the import and export of defense articles and defense services." 22 U.S.C. § 2778(a)(1). The Act provides that "every person (other than an officer or employee of the United States Government acting in
This case arises out of a dispute over whether and, if so, in what circumstances an attorney acting on behalf of his client may nevertheless be engaging in "brokering activities." After receiving advisory guidance from State about the provision's scope that he found insufficient, Matthew A. Goldstein initiated this action on behalf of his eponymous law firm, Plaintiff Matthew A. Goldstein PLLC. Plaintiff's complaint seeks a declaration equitably estopping State from applying the regulations to its legal services and declaring that State's definition of "brokering activities" is ultra vires, unconstitutional, and violates the Administrative Procedure Act ("APA"). Plaintiff also seeks an injunction permanently enjoining State from applying the brokering regulations to Plaintiff's legal services as described in Mr. Goldstein's request for guidance.
Now before the Court is Defendants' motion to dismiss Plaintiff's claims on the ground that the Court lacks subject matter jurisdiction or, alternatively, that Plaintiff's Amended Complaint fails to state a claim. The Court agrees that Plaintiff lacks standing and that this case is not yet ripe and therefore will grant Defendants' motion to dismiss.
"In furtherance of world peace and the security and foreign policy of the United States," the AECA empowers the President to control the import and export of defense articles and services. See 22 U.S.C. § 2778(a)(1). Initially, the AECA only regulated the direct "manufacturing, exporting, or importing" of defense articles and services. See 22 U.S.C. § 2778 (1996 ed.); see also International Security Assistance and Arms Export Control Act of 1976, Pub. L. No. 94-329, § 212(a)(1), 90 Stat. 729, 744-45. In 1996, however, Congress amended the AECA to require regulation of international arms brokering. See Act of July 21, 1996, Pub. L. No. 104-164, § 151, 110 Stat. 1421, 1437-38. As the House Report explained, "the extension of U.S. legal authority ... to regulate [the] brokering activities" of "U.S. persons (and foreign persons located in the U.S.)" would allow the United States to ensure that the activities of those who broker in international arms "support the furtherance of U.S. foreign policy objectives, national security interests and world peace." H.R. Rep. No. 104-519, at 11-12 (1996), reprinted in 1996 U.S.C.C.A.N. 1118, 1128-29. "More specifically," the report noted that "in some instances U.S. persons are involved
Accordingly, the AECA now requires "every person" who "engages in the business of brokering activities with respect to the manufacture, export, import, or transfer" of a defense article or service to both register with the government and procure a license to engage in such brokering activities. 22 U.S.C. § 2778(b)(1)(A)(ii)(I)-(III). The statute further provides that entities must abide by requirements "[a]s prescribed in regulations issued under this section." Id. § 2778(b)(1)(A)(ii)(I). As part of its International Traffic in Arms Regulations ("ITAR"), State has promulgated regulations specific to brokering activities at Title 22, Part 129 of the Federal Code of Regulations ("Part 129"), see generally 22 C.F.R. §§ 129.1-129.11.
Part 129 requires any person engaged in brokering activities to register with the Directorate of Defense Trade Controls ("the Directorate") as a "precondition for the issuance of approval for brokering activities" or for "the use of exemptions." 22 C.F.R. § 129.3(a); see also id. § 129.3(e). Once registered, a person may not "engage in the business of brokering activities... without first obtaining the approval of the Directorate of Defense Trade Controls for the brokering of" a number of regulatory-prescribed defense articles and services. Id. § 129.4(a); see also id. § 129.5 (listing exemptions from the approval requirement, not relevant here). To obtain approval, a broker must supply the Directorate with certain information and fully describe "the brokering activities that will be undertaken" including: "[t]he action to be taken by the applicant to facilitate the manufacture, export, import, or transfer" of the defense article; "[t]he name, nationality, address, and place of business of all persons who may participate in the brokering activities"; a description of the defense articles involved; the estimated quantity and dollar value; and the "[e]nd-user and end-use." Id. § 129.6(a)-(b). Part 129 also requires registrants to provide a report to the Directorate "on an annual basis" detailing the registrant's "brokering activities in the previous twelve months." Id. § 129.10(a). That report must include a description of the "brokering activities that received or were exempt from approval" or otherwise certify that "there were no such activities." Id. § 129.10(b)-(c). In addition, a "person who is required to register" as a broker "must maintain records concerning brokering activities," which "shall be available at all times for inspection and copying by the Directorate." Id. §§ 129.11, 122.5(b).
Until 2013, Part 129's definition of "broker" and "brokering activities" was quite general. A broker was defined as "any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission, or other consideration." 22
In 2011, in light of a 2003 report to Congress in which State had "noted that it was beginning a review of the brokering regulations" and "assess[ing] the need to modify the regulations in light of the experience gained in administering them," State issued a Notice of Proposed Rulemaking that substantially altered the regulatory definition of "broker" and "brokering activities." Amendment to the International Traffic in Arms Regulations: Registration and Licensing of Brokers, Brokering Activities, and Related Provisions, 76 Fed. Reg. 78,578, 78,578 (Dec. 19, 2011). As pertinent to this case, State proposed to amend the definition of brokering activities to clarify that "[b]rokering activities do not include ... activities by an attorney that do not extend beyond providing legal advice to a broker." Id. at 78,587 (proposed language for § 129.2(e)(3)); see also id. at 78,578 (explaining change).
State promulgated an Interim Final Rule in 2013, amending Part 129. See generally Amendment to the International Traffic in Arms Regulations: Registration and Licensing of Brokers, Brokering Activities, and Related Provisions, 78 Fed. Reg. 52,680 (Aug. 26, 2013). In response to the comments of three parties, State altered the proposed language of § 129.3 slightly to clarify that the definition of brokering activities does not extend beyond the provision of legal advice to a client (rather than to a broker). Id. at 52,681. Thus, the current definition, effective October 24, 2013, provides that "brokering activities" do not include "activities by an attorney that do not extend beyond the provision of legal advice to clients." 22 C.F.R. § 129.2(b)(2)(iv).
In a "Frequently Asked Questions" section of its website, the Directorate provides further guidance regarding the regulatory definition's scope. The FAQs state that:
Frequently Asked Questions (FAQs) — Registration, U.S. Dep't of State, Directorate of Defense Trade Controls (July 2, 2015), http://pmddtc.state.gov/registration/faqs_reg.html.
Because this dispute was caught in the cross-hairs of the 2013 change in legal regime, the Court also briefly describes the available methods for seeking guidance from State about the ITAR's requirements.
Before the 2013 amendments, 22 C.F.R. § 129.10, entitled "Guidance," provided that "[a]ny person desiring guidance on issues related to" Part 129, "such as whether an activity is a brokering activity within the scope of this Part ... may seek guidance in writing from the Directorate of Defense Trade Controls." 22 C.F.R. § 129.10 (2006 ed.). The provision cross-referenced to "[t]he procedures and conditions stated in § 126.9." Id. Section 126.9, in turn, provides a mechanism to request advisory opinions that "are issued on a case-by-case basis and apply only to the particular matters presented to the Directorate of Defense Trade Controls." 22 C.F.R. § 126.9(a). Any request for an advisory opinion "must be made in writing" and "must outline in detail the equipment, its usage, the security classification (if any) of the articles or related technical data, and the country or countries involved." Id. The section further cautions that advisory opinions "are not binding on the Department of State, and may not be used in future matters before the Department." Id.
The 2013 Interim Final Rule revised, renumbered, and substantially altered the guidance available to regulated entities under Part 129. Previous § 129.10 was renumbered as § 129.9. Section 129.9 now provides a stand-alone method by which a party can seek guidance. The section still provides that a person "desiring guidance on whether an activity constitutes a brokering activity within the scope of this part 129 may request in writing guidance from the Directorate of Defense Trade Controls." 22 C.F.R. § 129.9. But the new section goes on to require that the requester "identify the applicant and registrant code (if applicable) and describe fully the activities that will be undertaken," listing specific information that a requester must provide — including the "name, nationality, and geographic location of all U.S. and foreign persons who may participate in the activities," the "[e]nd-user and end-use," and "[a] copy of any agreement or documentation, if available, between or among the requester and other persons who will be involved in the activity or related transactions that describes the activity to be taken by such persons" — that go far beyond the more limited information required by § 126.9. Id.; compare 22 C.F.R. § 126.9. There appears to be a benefit to that specificity, however: § 129.9(b) states that any guidance received as a result of a
Plaintiff's law practice focuses on international trade. See Am. Compl. ¶ 63. As alleged in its complaint, Plaintiff's clients "include exporters of military, homeland security, dual-use, and purely commercial items and technologies," and Plaintiff advises its clients "on all aspects of U.S. export control laws and related international trade laws." Id. Plaintiff contends that "[m]ost of these legal services involve advisements on transactions subject to the ITAR." Id.
Concerned about the scope of the 2013 Final Interim Rule, Plaintiff's principal, Matthew A. Goldstein, sought an advisory opinion from Daniel Cook, the Directorate's Chief of the Compliance, Registration, and Enforcement Division. Am. Compl. ¶ 37. While Plaintiff's complaint alleges that the request was sent pursuant to 22 C.F.R. § 129.9(a), see Am. Compl. ¶ 37, Plaintiff has since clarified that Mr. Goldstein's request was submitted under the prior guidance provision, 22 C.F.R. § 129.10, see Pl.'s Mem. Opp'n Defs.' Mot. to Dismiss at 7 n.2 ("Pl.'s Mem. Opp'n"), ECF No. 26-1. Mr. Goldstein sent Mr. Cook a letter on August 29, 2013, three days after the Final Interim Rule was promulgated, but before its October 24, 2013 effective date, expressing concern that some lawyers' activities might fall within the regulatory definition of "brokering activities" because "export compliance advice frequently includes advice on how to structure transactions involving sales of defense articles and assistance in the preparation of contracts and other documents for such transactions." Goldstein Aff. Attach. A ("Pl.'s Attach. A"), ECF No. 26-2 (reproducing letter); see also Am. Compl. ¶ 37. The letter requested Mr. Cook's advice on whether six listed legal services would be considered as "brokering activities," as follows:
Pl.'s Attach. A; see also Am. Compl. ¶ 37. The letter further stated that Mr. Goldstein's services are not provided "on a commission or contingency basis" but "are performed for an hourly or flat fee," that the listed services "involve defense articles, technical data, and/or defense services described under ITAR Part 121, to include classified and unclassified defense articles and technical data," and that the listed services may "involve exports and services provided to any country except as limited by ITAR section 126.1" (which specifies countries with which brokering activities are banned or curtailed on various grounds). Pl.'s Attach. A; see also Am. Compl. ¶ 38.
For over a year, State failed to respond to this request. See Am. Compl. ¶ 39. Plaintiff alleges that it "made repeated requests for information on [the] status of the Advisory Opinion Request." Id. In the interim, Mr. Goldstein sought an advisory opinion from the District of Columbia Bar Legal Ethics Committee regarding whether, to the extent his activities did constitute "brokering activities," he was permitted to comply with the ITAR's disclosure requirements without violating District of Columbia Rule of Professional Conduct 1.6 (presumably for obtaining prior approval for any transactions, see 22 C.F.R. § 129.6(a)-(b), or for purposes of submitting the necessary year-end report, see id. § 129.10(a)-(c)). See Am. Compl. ¶ 56.
Steuart Thomsen, Chair of the D.C. Bar Legal Ethics Committee, responded by two letters dated May 30, 2014, and June 25, 2014. See Pl.'s Mem. Opp'n Ex. 4 ("Pl.'s Ex. 4"), ECF No. 26-3; Pl.'s Mem. Opp'n Ex. 5 ("Pl.'s Ex. 5"), ECF No. 26-3.
Mr. Thomsen acknowledged that, whether it would be possible to communicate "sufficient information to obtain a client's informed consent when the law requires the attorney to obtain approval ... prior to engaging in such communications is a determination that must be left to the attorney's professional judgment and discretion." Id. Ultimately, Mr. Thomsen advised that "[t]o the extent that you are required by law to reveal certain information that would otherwise be subject to the protections of Rule 1.6 prior to engaging in substantive communications with your client, you may find that it is impossible to comply with the informed consent provision found in 1.6(e)(1)." Id. at 2 (emphasis added).
On July 3, 2014, Mr. Goldstein finally received some type of communication from State. On that date, Mr. Cook called Mr. Goldstein to discuss Mr. Goldstein's advisory opinion request. Plaintiff alleges that the two discussed the request "at length" and Mr. Cook advised Mr. Goldstein that, "so long as no fee arrangements are [made] on a commission or contingency basis," the "legal services described in Plaintiff's Advisory Opinion Request are not subject to Part 129." Am. Compl. ¶ 40. Thereafter, Mr. Goldstein sent Mr. Cook a follow up letter officially withdrawing his advisory opinion request, and reiterating the substance of Mr. Cook's guidance. See Am. Compl. ¶ 42; see also Goldstein Aff. Attach. C, ECF No. 26-2. In the ensuing months, Plaintiff alleges that it "corresponded with attorneys and public interest groups and notified them of the advisement provided by Defendant Cook," and "relying on the advisement provided by Defendant Cook ... provided legal services described in the Advisory Opinion Request." Am. Compl. ¶¶ 43, 44.
On February 24, 2015, seven months after he had spoken with Mr. Goldstein, Plaintiff alleges that Mr. Cook sent Mr. Goldstein a letter advising him that his advisory opinion request, and his conversation with Mr. Cook, "lacked sufficient detail for the Department to make an official determination as to whether the activities discussed constituted brokering activities." Am. Compl. ¶ 46; see Decl. of Daniel L. Cook ("Cook Decl.") Attach. B at 1, ECF No. 25-2.
Soon thereafter, on March 3, 2015, Plaintiff filed suit in this Court. See Compl., ECF No. 1. Its complaint alleges that Defendants' "application of Part 129 to legal services requires Plaintiff and other attorneys who may provide such services to register with the Department of State as arms brokers, to disclose confidential client information, and to provide law enforcement agents with open access to law firm records without a subpoena, warrant or other legal process subject to judicial review." Am. Compl. ¶ 3. The complaint seeks recovery on five claims: (1) that Defendants should be equitably estopped from applying Part 129 to Plaintiff's activities because of Plaintiff's reasonable reliance on the advice Mr. Cook relayed by telephone; (2) that Part 129's definition of "brokering activities," specifically its description of which legal services are subject to the ITAR, is unconstitutionally vague in violation of the Fifth Amendment's Due Process Cause; (3) that Defendants' application of Part 129 to legal services is ultra vires and exceeds authority under the AECA; (4) that application of Part 129 violates the "separation of powers"
After Plaintiff filed its complaint, Mr. Cook sent Mr. Goldstein yet another letter, dated May 15, 2015, stylized as a "supplemental advisory opinion" to "provide additional guidance" and "describe[ ] activities by an attorney that would constitute provision of legal advice to a client and not brokering activity." Cook Decl. Attach. C at 1, ECF No. 25-2. Mr. Cook noted that the Directorate "does not intend for registration to be a prerequisite for providing legal services in connection with the types of activities referenced in your letter." Id. at 2. That letter advised Mr. Goldstein that four of the activities identified in his advisory opinion request — those enumerated as numbers one (advising clients how to structure transactions), two (preparing contracts), three (advising clients on and preparing technical assistance agreements), and five (advising on proposals to broker and sell defense articles) — "would constitute the provision of legal advice," and thus would not "fall within the scope of brokering activities," so long as the client has "already identified the foreign party/parties." Id. at 2. With respect to the fourth type of service, advising clients on the availability of financing for defense articles and preparing legal documents required to finance those export sales, Mr. Cook advised that "as long as you provide a listing from open sources of potential financial institutions for selection
Defendants have now moved to dismiss Plaintiff's claims under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6), arguing that this Court lacks subject matter jurisdiction and that, even if jurisdiction is proper, Plaintiff's Amended Complaint fails to state a claim. See Defs.' Mem. Supp. Mot. to Dismiss ("Defs.' Mem. Supp.") at 10-36, ECF No. 25-1. Plaintiff opposes dismissal on all grounds. See Pl.'s Mem. Opp'n at 12-38.
Federal courts are courts of limited jurisdiction, and the law presumes that "a cause lies outside this limited jurisdiction...." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); see also Gen. Motors Corp. v. E.P.A., 363 F.3d 442, 448 (D.C.Cir.2004) ("As a court of limited jurisdiction, we begin, and end, with an examination of our jurisdiction."). It is the plaintiff's burden to establish that the court has subject matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).
Because subject matter jurisdiction focuses on the Court's power to hear a claim, the Court must give the plaintiff's factual allegations closer scrutiny than would be required for a 12(b)(6) motion for failure to state a claim. See Grand Lodge of Fraternal Order of Police v. Ashcroft, 185 F.Supp.2d 9, 13-14 (D.D.C.2001). Thus, the Court is not limited to the allegations contained in the complaint. See Wilderness Soc'y v. Griles, 824 F.2d 4, 16 n. 10 (D.C.Cir.1987). Instead, "where necessary, the court may consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C.Cir.1992) (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981)).
The D.C. Circuit has explained that a motion to dismiss for lack of standing constitutes a motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure because "the defect of standing is a defect in subject matter jurisdiction." Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987). Likewise, motions to dismiss on the grounds of ripeness and mootness have consistently been brought under Rule 12(b)(1), because those justiciability concerns typically implicate the court's subject-matter jurisdiction. See, e.g., Del Monte Fresh Produce Co. v. United States, 570 F.3d 316, 321, 326 (D.C.Cir.2009) (reviewing dismissal under 12(b)(1) on mootness grounds); Venetian Casino Resort, L.L.C. v. E.E.O.C., 409 F.3d 359, 363, 366 (D.C.Cir.2005) (reviewing dismissal under 12(b)(1) on ripeness grounds); see also Larsen v. U.S. Navy, 525 F.3d 1, 4 (D.C.Cir.2008) ("`Federal courts lack jurisdiction to decide moot cases because their constitutional authority extends only to actual cases or controversies.'" (quoting Iron Arrow Honor Soc'y v. Heckler, 464 U.S. 67, 70, 104 S.Ct. 373, 78 L.Ed.2d 58 (1983))); Exxon Mobil Corp. v. FERC, 501 F.3d 204,
In support of their motion to dismiss, Defendants argue that this Court is without jurisdiction over this dispute because Plaintiff has not established an injury in fact sufficient to confer standing and because Plaintiff's claims are not yet ripe, or have now become moot. From the out-set the Court notes that three aspects of this case are particularly informative to its analysis: the broad, generalized nature of Mr. Goldstein's request for an advisory opinion from State, devoid of any specific detail describing Plaintiff's proposed activities; the hypothetical and inherently tentative nature of State's response to that request; and Plaintiff's vague, generalized assertion, unaccompanied by specific factual allegations, that Plaintiff will be required to disclose confidential client information if it is subjected to Part 129's requirements. The requirement that a plaintiff show standing, like other justiciability concerns, "assures that there is a real need to exercise the power of judicial review in order to protect the interests of the complaining party" and "requires federal courts to satisfy themselves that the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant his invocation of federal-court jurisdiction." Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009) (emphasis in original) (internal quotation marks and citations omitted). Ultimately, Plaintiff has failed to do so here. Because Plaintiff has not demonstrated an injury in fact and because, in any event, its claims are not yet ripe, the Court will grant Defendants' motion to dismiss.
Article III limits federal courts' jurisdiction to particular "cases" and "controversies" and the Supreme Court has consistently explained that "[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal court jurisdiction to actual cases or controversies." Clapper v. Amnesty Int'l USA, ___ U.S. ___, 133 S.Ct. 1138, 1146, 185 L.Ed.2d 264 (2013) (quoting Daimler-Chrysler Corp. v. Cuno, 547 U.S. 332, 341, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006)). "The `irreducible constitutional minimum' for standing is (i) the party must have suffered a concrete and particularized injury in fact, (ii) that was caused by or is fairly traceable to the actions of the defendant, and (iii) is capable of resolution and likely to be redressed by judicial decision." Sierra Club v. E.P.A., 755 F.3d 968, 973 (D.C.Cir.2014). In other words, to establish standing as a constitutional matter a plaintiff must "demonstrate the existence of a `personal injury fairly traceable to the opposing party's allegedly unlawful conduct and likely to be redressed by the requested relief." Delta Air Lines, Inc. v. Exp.-Imp. Bank of U.S., 85 F.Supp.3d 250, 260 (D.D.C.2015) (brackets omitted) (quoting Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)). And, to show an injury in fact, a plaintiff must have suffered "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (internal quotation marks and citations omitted).
A plaintiff bears the burden of demonstrating its standing. Id. at 561, 112 S.Ct. 2130. When assessing standing at the motion to dismiss stage, the Court will "accept the well-pleaded factual allegations as true and draw all reasonable inferences from those allegations in the plaintiff's favor," but will "not assume the truth of legal conclusions, nor ... accept inferences that are unsupported by the facts set out in the complaint." Arpaio v. Obama, 797 F.3d 11, 19 (D.C.Cir.2015) (internal quotation marks and citations omitted). Mere assertions of injury, unsupported by factual allegations, will not do. See Clapper, 133 S.Ct. at 1154 (finding no standing where respondents "present no concrete evidence to substantiate their fears, but instead rest on mere conjecture about possible governmental actions"). If an allegation of injury is based on future conduct, the Supreme Court has "repeatedly reiterated that `threatened injury must be certainly impending to constitute injury in fact,' and that `allegations of possible future injury' are not sufficient." Id. at 1147 (brackets omitted) (quoting Whitmore v. Arkansas, 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990)). While "imminence is concededly a somewhat elastic concept, it
In response to Defendants' motion to dismiss, Plaintiff claims that Part 129's application to legal services forces a head-on conflict between those regulations and the D.C. Rules of Professional Conduct. Plaintiff claims that it is injured by Part 129 because that Part's application to legal services "requires that attorneys disclose confidential client information." Pl.'s Mem. Opp'n at 16. As a result, Plaintiff contends that it will be forced "to choose between not providing the legal services and violating professional rules of responsibility or violating federal law." Id. at 20. Further, it argues that Part 129's application to Plaintiff's legal services violates its "constitutionally protected liberty interest in pursuing its profession." Id. at 15.
While the Court does not gainsay that an interest in pursuing one's profession is a cognizable liberty interest, "the injury in fact test requires more than an injury to a cognizable interest. It requires that the party seeking review be himself among the injured." Lujan, 504 U.S. at 563, 112 S.Ct. 2130 (quoting Sierra Club v. Morton, 405 U.S. 727, 734-35, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972)). For several reasons, Plaintiff fails to carry its burden to show that it is among the injured here.
First, Plaintiff's theory of injury relies entirely on a threshold showing that it has engaged in or will engage in some activity that might fall within the scope of "brokering activity." Only by showing that fact can Plaintiff claim that Part 129's requirements will be applied to its activities. To the extent Plaintiff does anything more than simply assume this to be the case, it relies primarily on Mr. Cook's letter, and its implicit acknowledgement that an attorney's advice to or services on behalf of a client where the foreign parties are unknown might fall within the definition of "brokering activity."
Second, even had Plaintiff adequately alleged it was engaged in such activities, it has shown nothing other than a speculative threat of enforcement. Mr. Cook's letter echoes State's Frequently Asked Questions, which indicate that the agency might conclude that, in some circumstances, an attorneys' activities in assisting a client fall within the definition of "brokering activities." See Frequently Asked Questions (FAQs) — Registration, U.S. Dep't of State, Directorate of Defense Trade Controls, http://pmddtc.state.gov/registration/faqs_reg.html (July 2, 2015) (stating, for example, that if an attorney is involved in various services "beyond contract terms of already identified foreign parties by your client, then such activities may constitute brokering activities" (emphasis added)). As Defendants explain, whether a particular transaction crosses into "brokering activity" is an inherently fact-bound determination dependent on the nature of the transaction and the parties. The limitation is intended to "avoid the possibility, for example, that an attorney providing these services would also engage in brokering activities by finding the foreign party to the transaction."
Third, even if Plaintiff could show that it was actually engaging in or has previously engaged in brokering activities and that State might initiate enforcement proceedings against it, Plaintiff has alleged nothing more than conjecture to substantiate its claim that it risks being injured by Part 129's requirements. Plaintiff points out that, if it does engage in "brokering activities," it would be required to seek advance approval to engage in brokering activities on behalf of its client, submit a yearly report to State about those activities, and maintain records available for State's inspection. See Pl.'s Mem. Opp'n at 16. And Plaintiff generally alleges that it "cannot reasonably comply with Part 129 disclosure and record access requirements" and Rule 1.6. Am. Compl. ¶ 64. But beyond its bald assertion that it will be required to disclose confidential attorney client information, Plaintiff has not even attempted to allege with any specificity what type of information it would be required to but cannot provide without violating Rule 1.6. cf. R.J. Reynolds Tobacco Co. v. FDA, 810 F.3d 827, 831, 2016 WL 191913, at *4 (D.C.Cir. Jan. 15, 2016) (finding purported injury resulting from several Tobacco Products Scientific Advisory Committee members' access to plaintiffs' confidential information insufficiently imminent to confer standing because "plaintiffs ha[d] not set forth by affidavit or other evidence specific facts suggesting that the challenged members have made or will make improper use of confidential information").
Several basic questions remain unanswered. For example: What kind of information would Plaintiff have to produce to which it anticipates that the attorney-client privilege might attach? Why would that information fall within the ambit of Rule 1.6? And why would it be difficult for Plaintiff to provide some more generalized information that would both satisfy Part 129's disclosure requirements and shield confidential information? Defendants point out that Part 129 only requires an individual to "provide detailed factual information about a prospective transaction, not privileged information." Defs.' Mem. Supp. at 15; cf. U.S. v. Legal Servs. of N.Y. City, 249 F.3d 1077, 1081 (D.C.Cir.2001) (explaining that "[c]ourts have consistently held that the general subject matters of clients' representations are not privileged... [n]or does the general purpose of a client's representation necessarily divulge confidential professional communication"
Moreover, Plaintiff fails entirely to explain why or how it would be unable to advise its client about the requirements of Part 129, and seek informed consent before obtaining from its clients or providing to State any confidential information that might be necessary to comply with those requirements. Cf. Defs.' Reply at 7 (arguing that Plaintiff "ignores the option that it could inform a client of the requirements imposed by Part 129 and obtain the client's informed consent to seek guidance regarding whether a particular activity is a brokering activity"). Plaintiff cherry picks a single line from the D.C. Bar's opinion letter stating that "[t]o the extent that you are required by law to reveal certain information that would otherwise be subject to the protections of Rule 1.6 prior to engaging in substantive communications with your client, you may find that it is impossible to comply with the informed consent provision found in 1.6(e)(1)." Pl.'s Ex. 5 at 2. But that opinion letter itself appears to support the idea that where an attorney is "aware prior to taking on the engagement that he or she will be required to disclose certain confidences and secrets," he can "advise the client of these risks at the outset of the representation and obtain the client's informed consent prior to receiving any information subject to disclosure." Pl.'s Ex. 5 at 4 (footnote omitted). Without more specific allegations, Plaintiff's singular assertion that application of Part 129 will cause it injury is no more than conjecture.
Ultimately, Plaintiff has failed to allege in any concrete way that it is engaging in activities that might constitute "brokering activities," that possible enforcement by State over those activities is imminent, and that, if Plaintiff must comply with Part 129, it will face actual injury to its ability to pursue its profession and will necessarily be required to disclose client confidences.
These same infirmities counsel in favor of the Court's conclusion that, even if Plaintiff could establish standing, a second jurisdictional obstacle inevitably stands in Plaintiff's way: ripeness. "The ripeness doctrine generally deals with when a federal court can or should decide a case." Am. Petroleum Inst. v. E.P.A., 683 F.3d 382, 386 (D.C.Cir.2012). "The ripeness doctrine is `designed to prevent the courts, through avoidance of premature adjudication, from entangling themselves
Under the prudential ripeness doctrine, "courts apply a familiar two-pronged balancing test: first, a court must evaluate the `fitness of the issue for judicial decision'; and second, a court must consider `the hardship to the parties of withholding [its] consideration.'" Id. (quoting Abbott Labs v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)). "In assessing the fitness prong, courts evaluate `whether the agency action is final; whether the issue presented for decision is one of law which requires no additional factual development; and whether further administrative action is needed to clarify the agency's position.'" Nat'l Mining Ass'n v. Jackson, 768 F.Supp.2d 34, 46 (D.D.C.2011) (quoting Action Alliance of Senior Citizens v. Heckler, 789 F.2d 931, 940 (D.C.Cir.1986)).
Plaintiff's claims are not yet fit for judicial review. A "regulation is not ordinarily considered the type of agency action `ripe' for judicial review under the APA until the scope of the controversy has been reduced to more manageable proportions, and its factual components fleshed out, by some concrete action applying the regulation to the claimant's situation in a fashion that harms or threatens to harm him." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 891, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Here, Mr. Cook's letter providing guidance to Plaintiff was phrased tentatively, indicated that an assessment of any potential "brokering activity" necessarily depends on case-specific facts, and was not binding upon State. Courts consistently find guidance letters of this sort non-final and not ripe for adjudication. See Ctr. for Auto Safety v. Nat'l Highway Traffic Safety Admin., 452 F.3d 798, 808-09 (D.C.Cir.2006) (concluding that a "generic letter" from the National Highway Safety Administration was non-final where it suggested that "in general" certain limitations to automobile recalls might be permissible but remained "conditional" and "only general in its prescriptions"); Reliable Auto. Sprinkler Co., Inc. v. Consumer Prod. Safety Com'n, 324 F.3d 726, 734 (D.C.Cir.2003) (concluding that a letter indicating that the agency would consider plaintiff's products a "consumer product" under the relevant statute was not final because the letter contained "no unequivocal statement of the agency's position on the meaning of `consumer product'" and that "application of the statutory term ... would clearly involve the resolution of factual issues and the creation of a record"); Am. Fed'n of Gov't Empls., AFL-CIO v. O'Connor, 747 F.2d 748, 756 (D.C.Cir.1984) (finding advisory opinion of the Merit Systems Protection Board's Special Counsel not ripe where unions had only "solicited an assurance that their registration activities, broadly and briefly described" complied with the law, and where the Special Counsel had not confronted any "member with a prosecution threat").
Moreover, further factual development here "would `significantly advance [the
The Court shares Plaintiff's concern that some uncertainty persists in State's definition of "brokering activities." Yet, Plaintiff is not without recourse. If Plaintiff desires concrete guidance before it faces the threat of an enforcement action, nothing precludes it from seeking guidance — and a binding State Department determination — that its proposed activity does not constitute a "brokering activity" by submitting a more detailed request that provides as much information as Plaintiff is able to without disclosing confidential attorney-client information.
For the foregoing reasons, Defendants' motion to dismiss is