Opinion ID: 182213
Heading Depth: 3
Heading Rank: 1

Heading: Defense Articles and Services Under the Act

Text: We review questions of statutory interpretation de novo. United States v. Gagnon, 553 F.3d 1021, 1025 (6th Cir.2009) (citing United States v. Parrett, 530 F.3d 422, 429 (6th Cir.2008)). The Act allows for the President of the United States to identify defense articles and defense services on the United States Munitions List that cannot be exported without a license from the United States. 22 U.S.C. § 2778(a)-(b) (2006). Furthermore, section 2778(c) imposes criminal penalties for [a]ny person who willfully violates any provision of [the Act]. In part, the Munitions List identifies as defense articles: (a) Aircraft, including . . . drones . . . which are specifically designed, modified, or equipped for military purposes. . . . . (h) Components, parts, accessories, attachments, and associated equipment (including ground support equipment) specifically designed or modified for the articles in paragraphs (a) through (d) of this category, excluding aircraft tires and propellers used with reciprocating engines. (i) Technical data (as defined in § 120.10) and defense services (as defined in § 120.9) directly related to the defense articles enumerated in paragraphs (a) through (h) of this category (see § 125.4 for exemptions), except for hot section technical data associated with commercial aircraft engines. Technical data directly related to the manufacture or production of any defense articles enumerated elsewhere in this category that are designated as Significant Military Equipment (SME) shall itself be designated SME. 22 C.F.R. § 121.1, Category VIII (2010). Section 120.10 of the Code of Federal Regulations proceeds to define technical data as: (1) Information . . . which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation. And section 120.09 instructs that a defense service is, in relevant part, [t]he furnishing to foreign persons of any technical data controlled under this subchapter (see § 120.10), whether in the United States or abroad. Initially, we take note that courts may not review whether items are properly designated as defense articles on the Munitions List. 22 U.S.C. § 2778(h). Our query, therefore, is not whether technical data and components are defense articles, but whether the data from Phase II and the Agency Proposal and the Force Stand fall under the definitions of technical data and components. See United States v. Pulungan, 569 F.3d 326, 328 (7th Cir.2009) (referencing 22 U.S.C. § 2778(h)). Roth argues that the Phase II data, Agency Proposal, and Force Stand were not defense articles because they were not developed to put plasma actuators on anything designated on the Munitions List. He draws this conclusion because during the time he worked on the project, future stages of Phase II envisioned testing actuators on commercially available aircraft, which are not covered on the Munitions List, before incorporating the actuators into military aircraft. He asserts that his removal from Phase II before actuators were ever applied to any aircraft signifies that his actions could have no connection to a military aircraft. However, the federal regulations extend export controls to all stages of defense projects that are covered by the Act, not just the final stages when military devices are directly involved. In pertinent part, the federal regulations define technical data, which is a category of defense article, as [i]nformation . . . which is required for the design, development, production, manufacture, [and] assembly . . . of defense articles such as drones. 22 C.F.R. §§ 120.10, 121.1. These terms envision that research requires multiple stages before a project reaches completion, and apply export controls to all those phases. Furthermore, the regulations define components as parts, accessories, attachments, and associated equipment. . . specifically designed or modified for the articles such as drones. Id. The regulations have been written to cover a broad range of articles at all stages of research and development in projects covered by the Act. Somehow, Roth ignores the fact that the final goal of Phase II was to incorporate plasma actuators on military drone aircraft. While the project might have called for the data to be tested on a commercially available drone plane at some point in the project, Roth admits that all the data collected, as well as the Force Stand that was developed to collect it, were derived for eventual military use. What is more, he does not argue that the data and Force Stand would not have been defense articles once they were used in conjunction with a military aircraft. This omission implies that the data and the Force Stand would have qualified as defense articles at some point. It seems that Roth thinks that barriers exist between the stages of the project that prevent the defense article qualification from being imputed from one stage to another, which is incorrect according to 22 C.F.R. §§ 120.10, 121.1. Because the final objective of this project was incorporating plasma actuators into military drones, the district court properly concluded that the underlying data and component were defense articles and services pursuant to 22 C.F.R. § 121.1, Category VIII.