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: (415) 436-7198

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
        901 E Street, N.W.
        Washington, D.C.  20530
        Tel. (Voice): (202) 514-4782
             (Fax)  : (202) 616-8470 or 616-8460

Attorneys for the Defendants

                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA

                   SAN FRANCISCO HEADQUARTERS

________________________________
                                )
DANIEL J. BERNSTEIN,            )       C 95-0582 MHP
                                )
        Plaintiff,              )       DEFENDANTS' NOTICE OF
                                )       MOTION AND MOTION FOR
v.                              )       A STAY PENDING APPEAL AND
                                )       TO SHORTEN TIME.
UNITED STATES DEPARTMENT OF     )
STATE, et. al.,                 )
                                )       EX PARTE MOTION
        Defendants.             )
                                )
________________________________)

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                   NOTICE OF MOTION AND MOTION

     PLEASE TAKE NOTICE that defendants hereby move for a stay
pending appeal of the Court's Order dated August 25, 1997. Because
of the immediate impact the Court's Order will have, and
plaintiff's refusal to stipulate to a short stay, defendant moves
ex parte in conjunction herewith to shorten the time for
consideration of this motion. L.R. 7-8(c). Defendants also move, in
the alternative, for a stay of the Court's August 25, 1997 Order to
September 15, 1997, to allow more time to complete consideration of
defendants' motion for a stay pending appeal from the Court of
Appeals. Defendants have provided the plaintiff with notice of this
motion. This motion is based on this notice, the following
memorandum in support of this motion, and such other evidence as
may be presented to the Court.

                        REQUESTED RELIEF

     For the reasons set forth below, defendants request a stay of
the Court's order pending appeal or, in the alternative, for a stay
of the Court's Order to September 15, 1997.

              MEMORANDUM OF POINTS AND AUTHORITIES

                          INTRODUCTION

     On August 25, 1997, the Court issued an Opinion and Order
("Aug. 25 Order") granting in part plaintiff's motion for a summary
judgment. As part of its Order, the Court issued a permanent
injunction which enjoins the defendants from "further and future
enforcement, cooperation or execution of the statutes, regulations,
rules, policies, and practices declared unconstitutional under this
order, including criminal or civil prosecutions with respect to
plaintiff or anyone else who uses, discusses or publishes or seeks
to use discuss or publish plaintiff's encryption program and
related materials..." Aug. 25 Order  6(a). Defendants are also
enjoined from "threatening, detaining, prosecuting, discouraging or
otherwise interfering with plaintiff or any other person described
in paragraph (6) above in the exercise of their federal
constitutional right as declared in this order." Id.  6(b).1/

____________________

1/   In the declaratory aspect of the Court's order, to which the
injunction applies, the Court declared that "the Export
Administration Regulations, 15 C.F.R. Pt. 730 et seq. (1997) and
all rules, policies and practices promulgated or pursued insofar as
they apply to or require licensing for encryption [continued]

                             [- 1 -]

----------------------------------------------------------------------

     Defendants hereby seek a stay of the Court's Order pending
appeal. This case presents serious questions of law, and the
Court's injunction would, unless stayed pending appeal, impose
immediate and irreparable harm on the government's interests by
authorizing the plaintiff to export the very encryption software
program at issue in this case before a final judicial resolution.
Given the significance of the policy matters involved, the status
quo in this action should be maintained until the constitutional
questions at issue are finally decided.

                            ARGUMENT

I.   Standard for Granting a Stay Pending Appeal

     The grant of a stay pending appeal is governed by the familiar
test that weights both the likelihood of success on the merits and
the relative equities regarding irreparable injury. To obtain a
stay, "the moving party must demonstrate either a combination of
probable success on the merits and the possibility of irreparable
injury or that serious questions are raised and the balance of
hardships tips sharply in the moving party's favor." Beltran v.
Meyers, 677 F.2d 1317, 1320 (9th Cr. 1982). These tests "are merely
the extremes of a single continuum." Benda v. Grand Lodge of Int'l
Ass'n of Machinists, 584 F.2d 308, 314 (9th Cir. 1978), cert.
dismissed, 441 U.S. 937 (1979).

II.  Serious Questions Are Presented And The Balance of Hardships
Favors Defendants

     Defendant recognizes that the Court has ruled on the merits in
plaintiff's favor on whether export licensing controls on
encryption software constitute a prior restraint. As noted above,
however, the Court is not obligated to find that it ruled
erroneously in order to grant a stay pending appeal. Rather, the
Court need only find first that "serious questions are raised."
that is undoubtedly the case. Indeed, the Court stated its view
that "the legal questions are novel, complex, and of public
importance". See Aug. 25 Order at 30.

     Moreover, the balance of hardships tips decidedly in the
government's favor. The key issue in

____________________

and decryption software and related devices and technology are in
violation of the First amendment on the grounds of prior restraint
and are, therefore, unconstitutional as discussed above, and shall
not be applied to plaintiff's publishing such items, including
scientific papers, algorithms, or computer programs." Aug. 25 Order
 5.

                               - 2 -

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this case is whether the plaintiff and others may export
cryptographic software without a license, as presently required by
the Export Administration Regulations. See 15 C.F.R.  742.2. The
President has specifically found that encryption products
(including software), when used outside the United States, "can
jeopardize our foreign policy and national security interest," and
the "exportation of encryption products accordingly must be
controlled to further U.S. foreign policy objectives, and promote
our national security, including the protection of the safety of
U.S. citizens abroad."2/ The Court has enjoined application of this
policy to plaintiff with respect [to] the exportation of his
encryption software, and as to anyone else who would export
plaintiff's encryption software. See Aug. 25 Order at 31.

     Defendants do not seek relief that would preclude plaintiff
from teaching, publishing, or publicly discussing ideas concerning
encryption, since, as repeatedly stated, such activities are
unregulated.3/ Rather, defendants seek a stay of the Court's
injunction so that plaintiff may not export actual encryption
software programs pending appelate review. See Providence Journal
Company v. FBI, 595 F.2d 889 (1st Cir. 1979); Azurin v. Von Raab,
792 f.2d 914, 915 (9th Cir. 1986) (granting stay pending appeal to
preserve status quo in cases of public importance).

     Defendants desired to present this motion on a more orderly
basis by seeking agreement from plaintiff for a short stay of the
Order to September 15, 1997, in part to address the issues raised
herein. By way of background, counsel for defendants received the
Court's Order by facsimile from the U.S. Attorney's Office after
close-of-business on August 25, 1997. See Declaration of Anthony J.
Coppolino In Support of Ex parte Motion  2.4/ At eh opening of
business (Pacific time) the next morning, August 26, 1997, counsel
for defendants contact plaintiff's counsel in response to a request
by the district court (conveyed by telephone through the presiding
judge's law clerk on the afternoon of August 25,

______________________

2/   Presidential Memorandum, November 15, 1996, Tab A to
Defendants' Second Summary Judgment Memorandum.

3/   See Defendants' Second Summary Judgment Memorandum at 19-20
(citing 15 C.F.R.  734.7, 734.8, 734.9).

4/   See Local Rule 7-11(b)(2).

                             - 3 -

----------------------------------------------------------------------

1997) that the parties discuss the wording and form of the Court's
order and advise the court if there is [sic] any issues therewith.
Id.5/ In the course of that conversation, counsel for defendant
proposed that the parties agree to a short-term stay until
September 15, 1997, in the entry and effectiveness of the Court's
order to allow additional time for consultation. Id.  3. Counsel
for defendant also raised the possibility that the government might
seek a stay pending appeal of the Court's Order, and specifically
sought assurance that the plaintiff would agree to maintain the
status quo and not export his encryption software program until the
government could filed such a motion. Id. Plaintiff's counsel
indicated that she thought the plaintiff was unlikely to agree to
this, but would confer with plaintiff and respond. Id.

     Counsel for defendants thereafter faxed to plaintiff's counsel
a proposed short-term stay to September 15, 1997. Id.  4. On the
evening of August 26, 1997, counsel for plaintiff advised counsel
for defendants that plaintiff would not agree to defendants'
proposal for this short stay. Id.  5. In response to a question
as to whether plaintiff intended to export encryption software
through an Internet posting, plaintiff's counsel indicated that
plaintiff had waited a long time for the Court's decision, and she
provided no assurance that plaintiff would forbear exporting his
software before the issue could be raise[d] with the courts. Id.
Counsel for defendants advised plaintiff's counsel that, absent
such assurance, defendants would file a motion with the district
court as soon as the next day. Id. Thus, even after plaintiff was
on notice that defendants desired to seek a stay pending appeal in
an orderly fashion, he provided no assurance that he would not
export his encryption software in the interim.

     While plaintiff may now desire to export his software, the
judicial process in this case has not yet

______________________

5/   In fact, as the parties began to discuss, defendants raised
three issues needing clarification. First, the injunction portion
of the Order at  6(a) appears inconsistent with the Court's
description on page 30 of the scope of the injunction as limited to
"plaintiff or against anyone else who seeks to use, discuss, or
publish plaintiff's encryption program." It appears as if a comma
[,] should have been inserted on page 32 after the word
"prosecutions." Defendant construes the injunction as described on
page 30 of the opinion. Also,  6(a) of the Order refers to
encryption and decryption software "and related devices..." This
reference is unclear since encryption devices, such as hardware
products, have never been at issue in this case. In defendants'
view, this term should be deleted. Finally,  6(a) declares
plaintiff's rights with respect to "computer programs." In
defendants' view, the words "source code" should be inserted
therein since, from the beginning, this case has concerned the
encryption source code programs, not machine executable object code
which the court did not determine to be protected by the First
Amendment.

                             - 4 -

----------------------------------------------------------------------

run its course. Defendants have the right to pursue further review,
and it is possible that plaintiff may not prevail in this case.
Since plaintiff was unwilling to forbear on his apparent intention
to immediately act upon the Court's decision and export encryption
software, it became necessary for defendants to seek this stay
pending appeal. Regardless of the Court's ultimate view of the
merits, a stay is warranted to preclude the export of the
encryption software program at issue until appelate review is
completed. Since the government has repeatedly made clear that it
does not regulate the mere teaching or publication of ideas
concerning encryption, or the distribution of encryption software
in the United States, including to students, any prejudice to
plaintiff by such a stay would not outweigh the harm to the
defendants' interests.

                           CONCLUSION

     For the foregoing reasons, defendants' motion for a stay
pending appeal should be granted. In the alternative, the Court
should stay the entry and effectiveness of its August 25 Order to
September 15, 1997, to allow more time to complete consideration of
this motion and to ensure the government an opportunity to seek a
stay pending appeal from the Court of Appeals.

Respectfully Submitted,

FRANK W. HUNGER
Assistant Attorney General

MICHAEL J. YAMAGUCHI (Cal. SBN 84984)
United States Attorney

MARY BETH UITTI (Cal. SBN 64452)
Assistant United States Attorney
450 Golden Gate Avenue
San Francisco, California 94102
Telephone: (415) 436-7198

[AJC Signature]

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
901 E Street, N.W.
Washington, D.C. 20530
Tel.: (202) 514-4782
Attorneys for the Defendants

Date: August 27, 1997

                              - 5 -

----------------------------------------------------------------------

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: (415) 436-7198

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
        901 E Street, N.W.
        Washington, D.C.  20530
        Tel. (Voice): (202) 514-4782
             (Fax)  : (202) 616-8470 or 616-8460

Attorneys for the Defendants

                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA

                   SAN FRANCISCO HEADQUARTERS

________________________________
                                )
DANIEL J. BERNSTEIN,            )       C 95-0582 MHP
                                )
        Plaintiff,              )       DECLARATION OF
                                )       ANTHONY J. COPPOLINO
v.                              )       IN SUPPORT OF EX PARTE
                                )       MOTION. L.R. 7-11(b)(2)
UNITED STATES DEPARTMENT OF     )
STATE, et. al.,                 )
                                )
        Defendants.             )
                                )
________________________________)

     I, Anthony J. Coppolino, do hereby state and declare as
follows:

     1.   I am a Trial Attorney for the Department of Justice,
Civil Division, Federal programs Branch, and counsel of record for
the defendants in this action. I submit this declaration in
connection with defendants' ex parte motion for a stay pending
appeal and to shorten time.

     2.   On the afternoon of August 25, 1997, I received a
telephone call from the Court (through

                             [- 1 -]

----------------------------------------------------------------------

a law clerk for the presiding district judge) indicating that the
Court wished for the parties to review the wording and form of the
"Order" portion of the Court's decision on pending summary judgment
motions in this action, which was filed that day, and, if
necessary, to schedule a telephone conference with the Court
regarding any issues in connection therewith. I received a copy of
the Court's Order by facsimile from the U.S. Attorney's office in
San Francisco shortly after 7 p.m. (easter time) on August 25,
1997. Shortly after 9:00 a.m. (Pacific time) on the morning of
August 26, 1997, I called the office of counsel for plaintiff,
Cindy Cohn, was advised she was not yet in, and left a recorded
voice mail message for her to return my call. Counsel for plaintiff
returned my call s short time later and I advised her of the
Court's request to discuss the wording and form of the Court's
Order.

     3.   In the course of that conversation, counsel for plaintiff
indicated that she was preparing a proposed "judgment" that she
requested that I review. We then discussed the Court's August 25
Order and I noted three aspects of the Order that, in my view,
needed clarification. I proposed that the parties agree to a short-
term stay until September 15, 1997, in the entry and effectiveness
of the Court's Order to allow additional time for consultation. I
also raised the possibility that the government might seek a stay
pending appeal of the Court's order, and specifically sought
assurance that plaintiff would agree to maintain the status quo by
not exporting his encryption software program until the government
could file such a motion. Plaintiff's counsel indicated that she
thought plaintiff was unlikely to agree to this, but would confer
with plaintiff and respond. I also indicated that I had contacted
the Court's courtroom deputy to determine the Court's availability
for a telephonic status conference.

     4.   At approximately 3:30 p.m. (eastern time) on August 26,
1997, I faxed a letter to plaintiff's counsel and attached a
proposed Order which would stay the entry and effectiveness of the
Court's August 25 Order to September 15, 1997, to allow time to
address the clarification and stay issues with the Court in a more
orderly fashion (attached hereto).1/

_______________________

1/   At approximately 9:30 p.m. (eastern time) on August 26, 1997,
plaintiff's counsel left a voice message indicating the fax had not
transmitted completely. I received this message the next morning
(August 27), and sent the fax again at approximately 8:50 a.m.
(eastern time).

                                - 2 -

----------------------------------------------------------------------

     5.   At approximately 6:30 p.m. (eastern time) on August 26,
1997, I called plaintiff's counsel and inquired again as to whether
plaintiff would agree to a stay to September 15, 1997. Plaintiff's
counsel stated that plaintiff would not agree to defendants'
proposal for a short stay. I inquired if plaintiff intended to
export his software by posting to the Internet. Plaintiff's counsel
indicated that plaintiff had waited along time for the Court's
decision, and she provided no assurance that plaintiff would
forbear on exporting his software before the issue could be raised
with the courts. I advised plaintiff's counsel that, absent such
assurance, I would file a motion with the district court as soon as
Wednesday, August 27, 1997.

     6.   At approximately 9:30 p.m. (eastern time) on August 26,
1997, plaintiff's counsel left a voice message for me that, in
part, reiterated that she had talked with the plaintiff and that he
would not agree to defendants' proposed stay.

     7.   I spoke with plaintiff's counsel on the afternoon of
Wednesday, August 27, 1997, and again provided notice of
defendants' intent to file the instant motion.

     I declare under penalty of perjury that the foregoing is true
and correct.

DATE: 8/27/97                [Signature]

                             ANTHONY J. COPPOLINO

                               - 3 -
[End AJC declaration]

----------------------------------------------------------------------

U.S. Department of Justice
Civil Division
Washington, D.C. 20530

August 26, 1997
(202) 514-4782

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

     Re:  Bernstein v. Department of State et al.
          (C-95-0582 MHP N.D. Cal.)

Dear Ms. Cohn:

     This letter is to follow-up our discussion concerning the
wording and form of the Court's order. As you know, Judge Patel
asked us to confer on these matters and advise her of our views.
You indicated that you are preparing a proposed judgment for us to
consider, and that some of the issues I raised should be discussed
with the Court.

     Enclosed is a draft proposed order that would stay the entry
or effectiveness of the Court's order until September 15 to allow
the parties to complete these consultations and, if necessary,
confer with the Court concerning the Order. We think it is in the
best interests of all parties to confer and present our views to
the courts in an orderly fashion. Please advise of your views in
the event a telephone conference with the Court is necessary.

     Sincerely,

     [Signature]

     ANTHONY J. COPPOLINO
     Trial Attorney
     Civil Division

enclosure: draft order

----------------------------------------------------------------------

DRAFT

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: (415) 436-7198

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
        901 E Street, N.W.
        Washington, D.C.  20530
        Tel. (Voice): (202) 514-4782
             (Fax)  : (202) 616-8470 or 616-8460

Attorneys for the Defendants

                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA

                   SAN FRANCISCO HEADQUARTERS

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

                              ORDER

     Upon conferring with the parties, and good cause appearing, it
is HEREBY ORDERED THAT the entry and effectiveness of the Order of
the Court dated August 25, 1997, shall be stayed until September
15, 1997, in order to permit the parties additional time to confer
as to the wording and form of the Order and, if necessary, to
confer further with the Court or to seek clarification or other
relief in connection with the Order.

                             [- 1 -]

----------------------------------------------------------------------

SO ORDERED:

DATE: [None]                   [No signature]

                               Marilyn Hall Patel
                               United States District Judge
                               Norther[n] District of California

                              - 2 -

----------------------------------------------------------------------

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: (415) 436-7198

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
        901 E Street, N.W.
        Washington, D.C.  20530
        Tel. (Voice): (202) 514-4782
             (Fax)  : (202) 616-8470 or 616-8460

Attorneys for the Defendants

                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA

                   SAN FRANCISCO HEADQUARTERS

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

                              ORDER

     Upon consideration of defendants' motion for a stay pending
appeal, the record of this case, and good cause appearing, it is

     HEREBY ORDERED THAT defendants' motion shall be and hereby is
GRANTED; and it is

     FURTHER ORDERED THAT the Court's Opinion and Order filed
August 25, 1997, shall be and hereby is stayed pending appeal in
this action and until the completion of all appellate proceedings.

                             [- 1 -]

----------------------------------------------------------------------

SO ORDERED:

DATE: [None]                   [No signature]

                               Marilyn Hall Patel
                               United States District Judge
                               Northern District of California

                              - 2 -

----------------------------------------------------------------------

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: (415) 436-7198

VINCENT M. GARVEY
ANTHONY J. COPPOLINO
Department of Justice
Civil Division, Room 1084
        901 E Street, N.W.
        Washington, D.C.  20530
        Tel. (Voice): (202) 514-4782
             (Fax)  : (202) 616-8470 or 616-8460

Attorneys for the Defendants

                IN THE UNITED STATES DISTRICT COURT

              FOR THE NORTHERN DISTRICT OF CALIFORNIA

                   SAN FRANCISCO HEADQUARTERS

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

                              ORDER

     Upon consideration of defendants' motion for a stay, and good
cause appearing, it is HEREBY ORDERED THAT the entry and
effectiveness of the Order of the Court dated August 25, 1997,
shall be and hereby is stayed until September 15, 1997, to allow
time to complete consideration of defendants' motion for a stay
pending appeal and to ensure the government an opportunity to seek
a stay pending appeal from the Court of Appeals.

                             [- 1 -]

----------------------------------------------------------------------

SO ORDERED:

DATE: [None]                        [No signature]

                                    Marilyn Hall Patel
                                    United States District Judge
                                    Norther[n] District of California

                              - 2 -