Kaspersky Lab, Inc. v. U.S. Dep't of Homeland SEC. & Kirstjen M. Nielsen

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 14, 2018 Decided November 30, 2018
No. 18-5176
KASPERSKY LAB, INC. AND KASPERSKY LABS LIMITED,
APPELLANTS
v.
UNITED STATES DEPARTMENT OF HOMELAND SECURITY AND
KIRSTJEN M. NIELSEN, IN HER OFFICIAL CAPACITY AS
SECRETARY OF HOMELAND SECURITY,
APPELLEES
Consolidated with 18-5177
Appeals from the United States District Court
for the District of Columbia
(No. 1:17-cv-02697)
(No. 1:18-cv-00325)
Scott H. Christensen argued the cause for appellants. With
him on the briefs were Ryan P. Fayhee and Stephen R. Halpin
III.
Lewis S. Yelin, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief was H.
Thomas Byron, III.
2
Before: TATEL, Circuit Judge, and EDWARDS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: Kaspersky Lab is a Russian-based
cybersecurity company that provides products and services to
customers around the world. Recently, however, Kaspersky
lost an important client: the United States government. In
September 2017, based on concerns that the Russian
government could exploit Kaspersky’s access to federal
computers for ill, the Acting Secretary of Homeland Security
directed federal agencies to remove the company’s products
from government information systems. And a few months later,
Congress broadened and codified that prohibition in the
National Defense Authorization Act. Kaspersky sued, arguing
that the prohibition constitutes an impermissible legislative
punishment—what the Constitution calls a bill of attainder.
The government responded that the prohibition is not a
punishment but a prophylaxis necessary to protect federal
computer systems from Russian cyber-threats. In consolidated
cases, the district court concluded that Kaspersky failed to
adequately allege that Congress enacted a bill of attainder and
that the company lacked standing to bring a related suit against
the Department of Homeland Security. The district court thus
granted the government’s motions to dismiss. We affirm.
I.
According to the allegations contained in Kaspersky’s
complaint, which we “must . . . accept . . . as true” at the
motion-to-dismiss stage, Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007), Kaspersky Lab is one
of the world’s largest cybersecurity companies. See Complaint,
Kaspersky Lab, Inc. v. United States, No. 1:18-cv-00325, ¶ 18
3
(D.D.C. Feb. 12, 2018) (“Compl.”). Kaspersky operates in 200
countries and territories and maintains 35 offices in 31 of those
countries. Id. The United States is one of Kaspersky’s most
important geographic markets, and Kaspersky has “a
substantial interest in its ability to conduct federal government
business.” Id. ¶¶ 22–23.
Ranking among the world’s top four cybersecurity
vendors, Kaspersky “has successfully investigated and
disrupted” cyberattacks by “Arabic-, Chinese-, English-,
French-, Korean-, Russian-, and Spanish-speaking” hackers.
Id. ¶¶ 20–21. Founded by a Russian national and headquartered
in Moscow, Kaspersky boasts that its “presence in Russia and
its deployment in areas of the world in which many
sophisticated cyberthreats originate . . . makes it a unique and
essential partner in the fight against such threats,” including
hacker groups with suspected connections to Russian
intelligence services. Id. ¶ 20.
But the U.S. government has come to disagree. Around the
beginning of 2017, executive and legislative branch officials
began voicing concerns that Kaspersky’s ties to Russia make it
a proverbial fox in the government’s cyber-henhouse: a threat
to the very systems it is meant to protect.
The chorus of concern about Kaspersky began to swell in
the spring of 2017. Between March and July of that year,
Kaspersky garnered attention in at least five committee
hearings before both houses of Congress. For example, at one
hearing dedicated to the subject of Russian cyber-operations,
Senator Marco Rubio highlighted “open source reports”
detailing ties between Kaspersky’s founder, Eugene
Kaspersky, and the Russian Federal Security Service,
successor to the KGB. Disinformation: A Primer in Russian
Active Measures and Influence Campaigns Panel II: Hearing
4
Before the Senate Committee on Intelligence, 115th Cong.,
pt. 2, at 40 (2017). And at a later hearing, Senator Rubio asked
six heads of various U.S. intelligence agencies, including the
Central Intelligence Agency and the Federal Bureau of
Investigation, whether they would install Kaspersky software
on their own computers. All six replied no. See Open Hearing
on Worldwide Threats: Hearing Before the Senate Committee
on Intelligence (“Worldwide Threats”), 115th Cong. 48 (2017).
In September 2017, the Acting Secretary of Homeland
Security issued Binding Operational Directive 17-01 (the
“Directive”), which required most federal agencies to begin
removing “Kaspersky-branded products” from their
information systems within 90 days. National Protection and
Programs Directorate; Notification of Issuance of Binding
Operational Directive 17-01 and Establishment of Procedures
for Responses (“BOD-17-01”), 82 Fed. Reg. 43,782, 43,783
(Sept. 19, 2017). Invoking her statutory authority to issue
directives “for purposes of safeguarding Federal information
and information systems from a known or reasonably suspected
information security threat, vulnerability, or risk,” 44 U.S.C.
§ 3552(b)(1), the Acting Secretary justified the Directive based
on an interagency assessment of “the risks presented by
Kaspersky-branded products,” BOD-17-01, 82 Fed. Reg. at
43,783. The Directive gave Kaspersky roughly two months to
submit a response and announced that the Acting Secretary
would issue a final decision by mid-December. BOD-17-01, 82
Fed. Reg. at 43,784.
More congressional hearings followed. In October, the
House Science Committee’s Subcommittee on Oversight held
a hearing on the potential threat posed by Kaspersky products
to federal information systems. See Bolstering the
Government’s Cybersecurity: Assessing the Risk of Kaspersky
Lab Products to the Federal Government: Hearing Before the
5
House Subcommittee on Oversight, House Committee on
Science, Space, and Technology, 115th Cong. 3 (2017). Several
members expressed deep concerns about Eugene Kaspersky’s
personal and professional ties to Russia, citing reports that he
was “educated at a KGB cryptography institute” and “worked
for the Russian intelligence services before starting his
software company.” Id. at 12 (statement of Donald S. Beyer);
see also id. at 4 (statement of Lamar S. Smith); id. at 8
(statement of Darin LaHood). The Committee also heard
testimony about the susceptibility of the company’s software
to Russian exploitation, with one expert explaining that due to
Russia’s permissive “telecommunications surveillance and
monitoring laws,” Kaspersky could passively—in the absence
of any “willful complicity or collaboration” in a Russian cyber-
operation—provide the Russian government access to federal
computers. Id. at 44 (testimony of Sean Kanuck).
The same subcommittee held a second hearing on
November 14, this time to survey agencies’ compliance with
the Directive. See Bolstering the Government’s Cybersecurity:
A Survey of Compliance with the DHS Directive: Hearing
Before the House Subcommittee on Oversight, House
Committee on Science, Space, and Technology, 115th Cong. 22
(2017). The subcommittee heard testimony from Jeanette
Manfra, Assistant Secretary for Cybersecurity and
Communications at the Department of Homeland Security,
who described the Department’s rationale for issuing the
Directive. She emphasized three concerns. First, “certain
Kaspersky officials” enjoy “ties” to “Russian intelligence and
other government officials.” Id. at 19. Second, Russian law
“allow[s] Russian intelligence agencies to request or compel
assistance from Kaspersky and to intercept communications
transiting Russian networks.” Id. And third, all antivirus
software, including Kaspersky’s, receives “broad access” to the
systems on which it operates. Id. So like a thief who has stolen
6
a security guard’s master key, a cyberattacker can exploit
antivirus software’s “elevated privileges” to inflict serious
damage on the systems the software ostensibly protects. Id. In
the Department’s view, Manfra concluded, the Directive “is a
reasonable, measured approach to the information security
risks posed by . . . [Kaspersky] products to the federal
government.” Id.
Congress apparently agreed with the Department of
Homeland Security’s assessment that Kaspersky software
presented a serious threat. Earlier, in July 2017, when
considering the Senate version of the National Defense
Authorization Act for Fiscal Year 2018 (“NDAA”), the Senate
Armed Services Committee, citing “reports that the Moscow-
based company might be vulnerable to Russian government
influence,” recommended adding a provision that would
prohibit the Department of Defense from using any Kaspersky
software. Senate Armed Services Committee, NDAA FY18
Executive Summary 10 (2017), http://go.usa.gov/xU5JC; see
also S. Rep. No. 115-125, at 302 (2017) (recommending “a
provision that would prohibit any component of the
Department of Defense from using, whether directly or through
work with or on behalf of another element of the United States
Government, . . . any software platform developed, in whole or
in part, by Kaspersky Lab or any entity of which Kaspersky
Lab has a majority ownership”). Later, after the Senate
received the House version of the NDAA, Senator Jeanne
Shaheen introduced an amendment that would prohibit all
federal agencies from using Kaspersky products. See S. Amd.
663, 163 Cong. Rec. S4578 (daily ed. July 27, 2017). The final
version of the NDAA, which included a version of Shaheen’s
amendment, see H.R. Rep. No. 115-404, at 460–62 (2017)
(Conf. Rep.), passed the House on November 14 and the Senate
on November 16.
7
The legislative prohibition on Kaspersky products appears
in section 1634 of the NDAA. Subsections (a) and (b) require
that, beginning October 1, 2018:
No department, agency, organization, or other
element of the Federal Government may use, whether
directly or through work with or on behalf of another
department, agency, organization, or element of the
Federal Government, any hardware, software, or
services developed or provided, in whole or in part,
by—(1) Kaspersky Lab (or any successor entity); (2)
any entity that controls, is controlled by, or is under
common control with Kaspersky Lab; or (3) any entity
of which Kaspersky Lab has majority ownership.
NDAA, Pub. L. No. 115-91, § 1634, 131 Stat. 1283, 1740
(2017). In contrast to the narrow focus of subsections (a) and
(b), subsection (c) of section 1634 mandates a broader review
of federal cybersecurity, directing the Secretary of Defense, in
consultation with other agency heads, to review and report on
“the procedures for removing suspect products or services from
the information technology networks of the Federal
Government.” Id. § 1634(c).
The President signed the NDAA in mid-December 2017,
just a few days after the Secretary finalized the Directive.
Kaspersky filed suit shortly thereafter—or, more
precisely, two Kasperskys filed two suits. Kaspersky Lab, Inc.,
a Massachusetts corporation, and Kaspersky Labs Limited, its
U.K. parent (collectively, “Kaspersky”), first filed a complaint
against the Department of Homeland Security. See Complaint,
Kaspersky Lab, Inc. v. U.S. Department of Homeland Security,
No. 1:17-cv-02697, ¶ 21 (D.D.C. Dec. 18, 2017). This case
challenged the Directive under the Administrative Procedure
Act; we shall call this the “Directive Case.” The same two
8
companies then filed a second complaint, this time against the
United States, alleging that the NDAA violates the
Constitution’s prohibition on bills of attainder. See Complaint,
Kaspersky Lab, Inc. v. United States, No. 1:18-cv-00325, ¶ 4
(D.D.C. Feb. 12, 2018). We shall call this the “NDAA Case.”
The district court consolidated the two cases for the
purpose of resolving related dispositive motions, namely,
cross-motions for summary judgment and a motion to dismiss
in the Directive Case and a motion to dismiss in the NDAA
Case. Kaspersky Lab, Inc. v. U.S. Department of Homeland
Security, No. 1:17-cv-02697 (D.D.C. Feb. 16, 2018). The
district court granted the government’s motion to dismiss the
NDAA Case for failure to state a claim, concluding that
Kaspersky had failed to plausibly allege that section 1634
constitutes a bill of attainder. See Kaspersky Lab, Inc. v. U.S.
Department of Homeland Security, 311 F. Supp. 3d 187, 205–
18, 223 (D.D.C. 2018). Furthermore, because section 1634
covers more products and more agencies than the Directive, the
court concluded that invalidating the Directive alone would
redress none of Kaspersky’s injuries, so it dismissed the
Directive Case for lack of Article III standing. See id. at 218–
23.
Kaspersky now appeals both orders. We review de novo a
“district court’s dismissal of a complaint for lack of standing or
for failure to state a claim.” Washington Alliance of Technology
Workers v. U.S. Department of Homeland Security, 892 F.3d
332, 339 (D.C. Cir. 2018). We begin with the NDAA Case.
II.
Article I, Section 9, Clause 3 of the Constitution provides
that “[n]o Bill of Attainder . . . shall be passed.” Rarely
litigated, the Bill of Attainder Clause nonetheless has real bite,
and Kaspersky argues that section 1634’s ban on the federal
9
government’s use of Kaspersky products violates the Clause’s
prohibition on legislative punishment.
This court has previously assumed without deciding that
the Bill of Attainder Clause’s protection applies to corporations
such as Kaspersky. See BellSouth Corp. v. FCC (“BellSouth
I”), 144 F.3d 58, 63 (D.C. Cir. 1998) (“We assume, as do the
parties, that the Bill of Attainder Clause protects corporations
as well as individuals.”); see also Consolidated Edison Co. of
New York v. Pataki, 292 F.3d 338, 349 (2d Cir. 2002) (holding
that corporations are “individuals” protected by the Bill of
Attainder Clause). Acknowledging that the question remains
open, the government does not argue here that the Clause
protects individuals only. See Appellants’ Br. 18 n.3 (stating
that the court “need not resolve the question [of the Clause’s
applicability to corporations] in this case”). Therefore, absent
an argument to the contrary and as in our previous cases, we
shall continue to assume that the Bill of Attainder Clause
extends to corporations.
To subjects of the British crown, bills of attainder meant a
very particular thing: “parliamentary acts sentencing named
persons to death without the benefit of a judicial trial.”
BellSouth I, 144 F.3d at 62. But our Constitution sweeps more
broadly. Since early in our history, the Bill of Attainder Clause
has been understood to prohibit all “bills of pains and
penalties”—legislative acts imposing on specified individuals
or classes punishments less severe than death, such as
banishment, imprisonment, denial of the right to vote, or
confiscation of property. See Foretich v. United States, 351
F.3d 1198, 1217 (D.C. Cir. 2003) (listing bills of pains and
penalties); BellSouth I, 144 F.3d at 64 (same).
In the last two centuries, legislatures have innovated
beyond death and banishment. But as punishments evolved
10
over time, so too did the courts’ interpretation of the Clause.
“Our treatment of the scope of the Clause has never precluded
the possibility that new burdens and deprivations might be
legislatively fashioned that are inconsistent with the bill of
attainder guarantee.” Nixon v. Administrator of General
Services, 433 U.S. 425, 475 (1977). It is the job of the courts to
“prevent[] Congress from circumventing the clause by cooking
up newfangled ways to punish disfavored individuals or
groups.” BellSouth I, 144 F.3d at 65.
This job is not always straightforward. For example, in the
post–Civil War years, the Supreme Court invalidated as bills of
attainder laws prohibiting confederate sympathizers from
serving as priests and lawyers, see Cummings v. Missouri, 71
U.S. 277, 319 (1866); Ex Parte Garland, 71 U.S. 333, 377–78
(1866), but not a law prohibiting convicted felons from
practicing medicine, see Hawker v. New York, 170 U.S. 189,
191–92 (1898). Similarly, in the early Cold War period, the
Court held that an alien was not punished by “the mere denial”
of his Social Security benefits after the government deported
him for being a communist. See Flemming v. Nestor, 363 U.S.
603, 605, 617 (1960). By contrast, the Court did invalidate as
legislative punishments one statute in which Congress had
mandated that “no salary or compensation should be paid” to
three named federal employees suspected of engaging in
“subversive” communist activities, United States v. Lovett, 328
U.S. 303, 305–13 (1946), and another statute in which
Congress “ma[de] it a crime for a member of the Communist
Party to serve as an officer or . . . an employee of a labor
union,” United States v. Brown, 381 U.S. 437, 438 (1965).
As this abridged history demonstrates, each bill of
attainder case “has turned on its own highly particularized
context.” Flemming, 363 U.S. at 616. Regardless of their
particulars, however, all bills of attainder share two basic
11
elements: “a law is prohibited under the bill of attainder clause
‘if it (1) applies with specificity, and (2) imposes punishment.’”
Foretich, 351 F.3d at 1217 (quoting BellSouth Corp. v. FCC
(“BellSouth II”), 162 F.3d 678, 683 (D.C. Cir. 1998)). Because
the government concedes, as it must, that section 1634 applies
with specificity to Kaspersky, we focus on the second element,
punishment.
A “punishment” is something more than a burden. See
Selective Service System v. Minnesota Public Interest Research
Group, 468 U.S. 841, 851 (1984) (“That burdens are placed on
citizens by federal authority does not make those burdens
punishment.”). The task, then, is to distinguish permissible
burdens from impermissible punishments. To do so, the
Supreme Court instructs courts to conduct “three necessary
inquiries”:
(1) whether the challenged statute falls within the
historical meaning of legislative punishment; (2)
whether the statute, “viewed in terms of the type and
severity of burdens imposed, reasonably can be said
to further nonpunitive legislative purposes”; and (3)
whether the legislative record “evinces a
congressional intent to punish.”
Id. at 852 (quoting Nixon, 433 U.S. at 473, 475–76, 478). This
court, while observing that “[t]he Court has applied each of
these criteria as an independent—though not necessarily
decisive—indicator of punitiveness,” has explained that “the
second factor—the so-called ‘functional test’—‘invariably
appears to be the most important of the three.’” Foretich, 351
F.3d at 1218 (quoting BellSouth II, 162 F.3d at 684) (internal
quotation marks omitted). We shall therefore begin with that
test.
12
Functional Test
Courts need a sorting mechanism for distinguishing
statutes with punitive purposes from statutes with merely
burdensome effects. Put another way, the ultimate question is
whether the burden is a means to an end or an end in and of
itself. Seeking to answer this question, the functional test asks
“whether the law under challenge, viewed in terms of the type
and severity of burdens imposed, reasonably can be said to
further nonpunitive legislative purposes.” Nixon, 433 U.S. at
475–76. As we explained in our most recent bill of attainder
case, Foretich v. United States, “where there exists a significant
imbalance between the magnitude of the burden imposed and a
purported nonpunitive purpose, the statute cannot reasonably
be said to further nonpunitive purposes.” 351 F.3d at 1221. In
short: identify the purpose, ascertain the burden, and assess the
balance between the two.
Importantly, the functional test provides an inferential
tool; it does not impose an independent requirement. Although
a serious imbalance may support an inference that the
legislature’s purported nonpunitive objective serves as a
“smokescreen” for some undisclosed punitive purpose,
BellSouth I, 144 F.3d at 66, an imperfect fit between purpose
and burden does not necessarily prove punitive intent. The
difference is nuanced but crucial: the question is not whether a
burden is proportionate to the objective, but rather whether the
burden is so disproportionate that it “belies any purported
nonpunitive goals.” Foretich, 351 F.3d at 1222.
Over the years and across cases, courts have considered a
wide variety of factors in conducting this functional inquiry.
Generally speaking, these factors fall into two categories.
First, a statute performs poorly on the functional test when
its effect is significantly overbroad. See Foretich, 351 F.3d
13
at 1222 (“A grave imbalance or disproportion between the
burden and the purported nonpunitive purpose suggests
punitiveness, even where the statute bears some minimal
relation to nonpunitive ends.”). To determine whether the
statute goes farther than necessary, courts compare the burden
actually imposed with hypothetical “less burdensome
alternatives” by which the legislature could have accomplished
the same objective. Nixon, 433 U.S. at 482. A statute may be
“less burdensome” when it includes procedural safeguards to
“protect the constitutional and legal rights of [the] individual[s]
adversely affected,” id. at 477; lasts only temporarily or
“sunsets” at a time certain, BellSouth II, 162 F.3d at 683; allows
the affected individual to relieve himself of the burden by
taking “belated[]” corrective action, Selective Service System,
468 U.S at 855; or imposes conditions instead of an absolute
“bar,” BellSouth I, 144 F.3d at 65. In considering less
burdensome alternatives, however, courts must resist the
temptation to label a statute a bill of attainder simply because
“sometimes it works harshly.” Hawker, 170 U.S. at 197.
Second, a statute flounders on the functional test when its
reach is underinclusive. Foretich, 351 F.3d at 1224 (“[T]he
functional test necessarily takes account of the scope or
selectivity of a statute in assessing the plausibility of alleged
nonpunitive purposes.”). To be sure, selectivity alone does not
a bill of attainder make. “[T]he Court has clearly stated that
satisfaction of the specificity prong alone is not sufficient to
find that a particular law implicates the bill of attainder clause,
let alone violates it.” BellSouth II, 162 F.3d at 684.
Nevertheless, a concern for specificity reappears in the
punishment inquiry, and courts take note when a statute
seemingly burdens one among equals. For example, in
Foretich, we invalidated a statute that prevented a particular
father accused of sexually abusing his daughter from having
visitation “without the child’s consent.” 351 F.3d at 1207
 14
(quoting D.C. Code § 11-925). Explaining that “narrow
application of a statute to a specific person or class of persons
raises suspicion,” we concluded in that case that “the narrow
focus of the disputed Act [could not] be explained ‘without
resort to inferences of punitive purpose.’” Id. at 1224 (quoting
BellSouth I, 144 F.3d at 67).
Just how overbroad or underinclusive is too overbroad or
underinclusive? On this issue, the cases are less than pellucid.
On the one hand, the Bill of Attainder Clause does not require
narrow tailoring. Congress enjoys leeway to select among more
or less burdensome options, and it “may read the evidence
before it in a different way than might this court or any other,
so long as it remains clear that Congress was pursuing a
legitimate nonpunitive purpose.” BellSouth II, 162 F.3d at 689.
On the other hand, the functional test is “more exacting” than
rational basis review. BellSouth I, 144 F.3d at 67. The
functional inquiry demands not some conceivable nonpunitive
purpose, but rather an actual nonpunitive purpose. See
Foretich, 351 F.3d at 1223 (“[A] statute . . . does not escape
unconstitutionality merely because the Government can assert
purposes that superficially appear to be nonpunitive.”).
So somewhere between the two poles of narrow tailoring
and rational basis lies the functional test’s tipping point. We
have at times described the test as requiring a “coherent and
reasonable nexus” or a “rational connection” between the
burden imposed and nonpunitive purpose furthered. Id.
at 1219, 1221. At other times, we have used somewhat more
stringent language, demanding that courts “ensure that ‘the
nonpunitive aims of an apparently prophylactic measure [are]
sufficiently clear and convincing.’” BellSouth II, 162 F.3d
at 686 (alteration in original) (quoting BellSouth I, 144 F.3d
at 65).
15
In this case, however, we have no need to choose between
the rational-and-coherent or clear-and-convincing
formulations, because section 1634 easily clears the latter,
higher bar.
We begin with the nonpunitive interest at stake: the
security of the federal government’s information systems.
Given the volume and variety of governmental functions
conducted by and through computers, the district court hardly
exaggerated when it described the government’s networks as
“extremely important strategic national assets.” Kaspersky
Lab, 311 F. Supp. 3d at 192–93. And those assets need
protection: as Congress recognized in the Federal Information
Security Modernization Act of 2014, “the highly networked . . .
Federal computing environment” faces significant
“information security risks,” including the threat of
“unauthorized access, use, disclosure, disruption, modification,
or destruction of” government information. 44 U.S.C. §§ 3551,
3553. Indeed, although Kaspersky argues that Congress
enacted section 1634 to further that body’s undisclosed
punitive intentions, the company does not dispute, as a general
matter, that protecting federal computers from cyber-threats
qualifies as a “legitimate nonpunitive purpose.” Patchak v.
Jewell, 828 F.3d 995, 1006 (D.C. Cir. 2016), cert. granted sub
nom. Patchak v. Zinke, 137 S. Ct. 2091 (2017), aff’d, 138 S. Ct.
897 (2018).
While those cyber-threats emanate from all over the world,
Russia might well top the list. As the Director of National
Intelligence (DNI) testified to the Senate Select Committee on
Intelligence in May 2017, “Russia is a full-scope cyber actor
that will remain a major threat to [the] US Government . . . .
Moscow has a highly advanced offensive cyber program, and
in recent years, the Kremlin has assumed a more aggressive
cyber posture.” Worldwide Threats, at 16 (statement of Daniel
16
R. Coats). One need look no further, the DNI warned, than
“Russia’s efforts to influence the 2016 US election” to discern
the “scope and sensitivity” of the targets Russia seems willing
to attack. Id. In other words, Russia has demonstrated both the
means and the willingness to launch cyber-operations against
the U.S. government and its information systems.
Enter Kaspersky, a Russian company founded by a
Russian citizen with its headquarters in Russia. In the months
before enacting section 1634, Congress heard substantial
expert testimony warning that Kaspersky’s ties to Russia could
jeopardize the integrity of the federal computers on which the
company’s products operate. With or without Kaspersky’s
willing cooperation, explained the experts, the Russian
government could use Kaspersky products as a backdoor into
federal information systems. Then, having gained privileged
and undetected access, Russia could make all manner of
mischief. The Acting Secretary of Homeland Security
apparently agreed with these warnings. So Congress, after
hearing all of this information, decided to disallow federal use
of Kaspersky hardware, software, and services.
Viewed in context, section 1634 “has the earmarks of a
rather conventional response” to a security risk: remove the
risk. BellSouth I, 144 F.3d at 65. We think it worth
emphasizing, moreover, that the government discontinued only
its own use of Kaspersky products; all other individuals and
companies in the universe of potential clients remain free to
buy and use Kaspersky products as they please. To be sure,
section 1634 may still impose serious financial and reputational
costs on Kaspersky. And Congress, unable to predict the future,
had no way of knowing for sure whether Kaspersky products
would have caused harm if left in place. But “the severity of a
sanction is not determinative of its character as punishment,”
Selective Service System, 468 U.S. at 851, and surely Congress
17
can do more than identify threats approaching at a distance and
wait patiently for those threats to cause empirically provable
consequences. Given the not insignificant probability that
Kaspersky’s products could have compromised federal
systems and the magnitude of the harm such an intrusion could
have wrought, Congress’s decision to remove Kaspersky from
federal networks represents a reasonable and balanced
response. Section 1634 is prophylactic, not punitive.
Kaspersky, however, accuses Congress of imposing a
disproportionate burden. According to the company, Congress
could have made section 1634 less burdensome by, for
example, including a sunset provision, permitting the
government to use Kaspersky products on the condition that the
company cease operating in Russia, or prohibiting the use of
Kaspersky’s hardware and software but not its services. Or, so
says Kaspersky, Congress could have done nothing, leaving it
to the executive branch to remove the company from the rolls
of approved federal contractors pursuant to the process (and
procedural safeguards) contained in federal procurement
regulations.
But the fact that Kaspersky can imagine slightly less
restrictive measures does not demonstrate that the law
Congress actually chose amounts to punishment. Take
Kaspersky’s suggestion that instead of legislating, “Congress
could have referred the matter to the executive branch to
consider” debarring Kaspersky under the procedures set forth
in the Federal Acquisition Regulation. Appellants’ Br. 36.
Debarment, however, prevents the government only from
inking future contracts; it would neither require agencies to
remove already-purchased Kaspersky products from their
systems nor completely prevent third-party contractors from
using Kaspersky products in fulfilling their own federal
contracts. See 48 C.F.R. § 9.405-1 (“Notwithstanding the
18
debarment . . . of a contractor, agencies may continue contracts
or subcontracts in existence at the time the contractor was
debarred . . . .”); 48 C.F.R. § 9.405-2 (“[C]ontractors shall not
enter into any subcontract in excess of $35,000, other than a
subcontract for a commercially available off-the-shelf item,
with a contractor that has been debarred . . . .”). Moreover,
although Kaspersky insists that it would have preferred
debarment because the Federal Acquisition Regulation
contains “procedural safeguards,” Appellants’ Reply Br. 16
n.8, the company fails to identify how those procedural
safeguards would have ultimately forestalled an end to future
federal contracts. Indeed, debarment appears to be the worst of
all worlds for all parties involved. Kaspersky would have still
lost the opportunity to sell to the U.S. government—as it has
under section 1634—but federal computer systems would have
remained at risk from unremoved Kaspersky software.
Similar deficiencies plague Kaspersky’s other proposals:
either the suggested alternative does not adequately protect
federal information systems, or it does not substantially lessen
the burden on Kaspersky. With respect to the proposals that fail
to protect federal computers as well as section 1634 does—for
example, including a sunset provision—those we reject for
failure to offer genuinely workable alternatives. And with
respect to the remaining proposals that lessen the burden on
Kaspersky only slightly, or that swap one burden for another—
for example, requiring Kaspersky to discontinue all Russian
operations—we cannot infer from the marginal difference
between those hypothetical statutes and the statute actually
passed that Congress chose section 1634 with punishment in
mind. “In other words, it does not matter that Congress
arguably could have enacted different legislation in an effort”
to secure federal networks, because “it cannot be legitimately
‘suggested that the risks . . . were so feeble that no one could
reasonably assert them except as a smoke screen for some
19
invidious purpose.’” BellSouth II, 162 F.3d at 689 (quoting
BellSouth I, 144 F.3d at 66).
Kaspersky also argues that it was unfairly “single[d] out”
for mistreatment, Appellants’ Br. 15, and that Congress should
have instead “passed a law of general applicability that
prohibits the federal government from using products or
services of any cybersecurity software producer that provides
information to [Russian intelligence agencies], does business
in Russia, has servers in Russia, or uses Russian networks,”
Appellants’ Reply Br. 16. But Kaspersky identifies no cyber-
product as vulnerable to malicious exploitation as Kaspersky’s.
And although the company accurately points out that many
cyber-companies operate in Russia, we conclude that
Congress, based on the evidence before it, could have
reasonably determined that Kaspersky’s Russian ties differ in
degree and kind from these other companies’. It was
Kaspersky—not these other companies—about whom the
experts sounded the alarm. Kaspersky, in other words, is in a
class of its own.
Indeed, in this respect, this case closely resembles Nixon
v. Administrator of General Services, which concerned a
statute that had directed the Administrator of General Services
“to take custody,” at least temporarily, of former-President
Nixon’s presidential papers and tape recordings. 433 U.S. at
429. The Court rejected Nixon’s claim that the statute’s
specificity evinced punitive intent, concluding instead that
Congress had permissibly created “a legitimate class of one”
because “at the time of the Act’s passage, only [Nixon’s]
materials demanded immediate attention.” Nixon, 433 U.S. at
472; see also BellSouth I, 144 F.3d at 67 (concluding, given the
unique characteristics of BellSouth Corporation’s operating
companies, that their “differential treatment” under the statute
at issue was “quite understandable without resort to inferences
20
of punitive purpose”). The Court in Nixon also found it notable
that in addition to offering a short-term Band-Aid solution to
the problem presented by Nixon’s records, the statute also
established a commission to study the preservation of future
administrations’ presidential materials. Id. As the Court saw it,
the statute permissibly dealt with a pressing issue at hand while
simultaneously acting to prevent the same problem from
arising again.
So too, here. No one argues that Kaspersky presents the
only possible gap in the federal computer system’s defenses.
But Congress had ample evidence that Kaspersky posed the
most urgent potential threat, and this court must give Congress
“sufficient latitude to choose among competing policy
alternatives,” lest “our bill of attainder analysis . . . ‘cripple the
very process of legislating.’” Foretich, 351 F.3d at 1222–23
(quoting Nixon, 433 U.S. at 470); cf. Clements v. Fashing, 457
U.S. 957, 969 (1982) (holding, in the context of an equal-
protection challenge, that “[a] [s]tate [may] regulate ‘one step
at a time, addressing itself to the phase of the problem which
seems most acute’” (quoting Williamson v. Lee Optical of
Oklahoma Inc., 348 U.S. 483, 489 (1955))). The Bill of
Attainder Clause does not make perfect the enemy of the good.
Furthermore, like the statute at issue in Nixon, section 1634
contains not only specific provisions addressing a particular
threat (subsections (a) and (b)), but also a broader provision
directing further investigation of that threat. Specifically,
subsection (c) directs the Secretary of Defense to conduct a
review of “the procedures for removing suspect products or
services from the information technology networks of the
Federal Government.” NDAA § 1634(c). Nothing in section
1634 prevents Congress from expanding its prohibition to
include other companies or products later determined to pose a
cybersecurity risk. Given this context, we are convinced that
21
section 1634 represents Congress’s effort at triage, not
punishment.
At the end of the day, the functional test does not require
that Congress precisely calibrate the burdens it imposes to the
goals it seeks to further or to the threats it seeks to mitigate.
Instead, the test requires only that Congress refrain from
“‘pil[ing] on’ . . . additional, entirely unnecessary burden[s].”
Foretich, 351 F.3d at 1228 (Tatel, J., concurring in part and
concurring in the judgment) (quoting Consolidated Edison Co.,
292 F.3d at 354). And given the reasonable balance between
the burden imposed by section 1634 and the nonpunitive
national security objective it furthers, we easily conclude that
Congress has not done so here.
Historical Test
Having failed to make a persuasive showing on the
functional test, Kaspersky faces an uphill battle. Foretich, 351
F.3d at 1218 (“[C]ompelling proof on [the functional test] may
be determinative.”). Although we cannot rule out the
possibility that a persuasive showing on the historical or
motivational tests could overcome a challenger’s failure to
raise a suspicion of punitiveness under the functional test, this,
as we are about to explain, is not such a case—indeed, not even
close.
Under the historical test, we ask “whether the challenged
statute falls within the historical meaning of legislative
punishment.” Selective Service System, 468 U.S. at 852. This
question overlaps significantly with the functional test because,
historically, “legislative punishment” existed where the burden
imposed so dramatically outweighed the benefit gained that
courts could infer only a punitive purpose. “[T]he substantial
experience of both England and the United States with [bills of
attainder],” the Supreme Court explained in Nixon, “offers a
22
ready checklist of deprivations and disabilities so
disproportionately severe and so inappropriate to nonpunitive
ends that they unquestionably have been held to fall within the
proscription of [the Bill of Attainder Clause].” Nixon, 433 U.S.
at 473; see also Foretich, 351 F.3d at 1219 (explaining that
early Supreme Court bill-of-attainder cases “foreshadowed the
development of the functional test”).
Despite the apparent redundancy of the historical inquiry,
we must double-check our functional-test work by comparing
section 1634 to the “ready checklist” of historical punishments.
“This checklist includes sentences of death, bills of pains and
penalties, and legislative bars to participation in specified
employments or professions.” Foretich, 351 F.3d at 1218.
As Kaspersky admits, “‘the particular burden imposed’”
by section 1634 “‘is not precisely identical to any of the
burdens historically recognized as punishment.’” Appellants’
Br. 24 (quoting Foretich, 351 F.3d at 1219). Kaspersky has not
been sentenced to death, nor banished, nor had its property
confiscated. See BellSouth I, 144 F.3d at 64 (listing historic
“bills of pains and penalties”). Kaspersky nonetheless argues
that section 1634, though not strictly analogous, is so
“consistent with historical forms of punishment” that the
historical test weighs in its favor. Appellants’ Br. 24.
In support of this claim, Kaspersky highlights two
characteristics shared by many historic bills of attainder:
excluding or expelling individuals from a profession, and
“mark[ing] specified persons with a brand of infamy or
disloyalty.” Foretich, 351 F.3d at 1219. In particular,
Kaspersky cites four Supreme Court cases—two from the Civil
War and two from the Cold War—in which, as previously
noted, the Court invalidated statutes that excluded,
respectively, former confederate sympathizers and communists
23
from particular vocations, including, in one case, from
government service. See Cummings, 71 U.S. 277 (prohibiting
ex-rebel sympathizers from serving as priests); Ex Parte
Garland, 71 U.S. 333 (denying ex-confederate sympathizers
admission to the bar); Lovett, 328 U.S. 303 (cutting off salary
to certain “subversive” government employees); Brown, 381
U.S. 437 (criminalizing communists’ service as officers in
labor unions). Kaspersky also relies on our decision in
Foretich, in which we concluded that “deprivation of parental
rights and the opprobrium of being branded a criminal child
abuser . . . may be of even greater magnitude than many of [the
burdens] at issue in the historical cases.” Foretich, 351 F.3d at
1220. Based on these decisions, Kaspersky argues that section
1634 imposes punishment because it “stamp[s] [Kaspersky]
with Congress’s legislative conclusion that the company is
disloyal to the United States, or at least undeserving of the
federal government’s trust.” Appellants’ Br. 17.
The historical punishments Kaspersky cites are readily
distinguishable from the burden section 1634 imposes on the
company. To begin with, although we assume that the Bill of
Attainder Clause protects corporations as well as natural
persons, see supra at 9, we have no basis for likewise assuming
that corporate entities feel burdens in the same way as living,
breathing human beings. “[I]t is obvious,” we have explained,
“that there are differences between a corporation and an
individual under the law,” so “any analogy between prior cases
that have involved individuals and this case, which involves a
corporation, must necessarily take into account this
difference.” BellSouth II, 162 F.3d at 684. And as the Second
Circuit has explained, “[t]here may well be actions that would
be considered punitive if taken against an individual, but not if
taken against a corporation.” Consolidated Edison Co., 292
F.3d at 349.
24
In particular, the stain of a “brand of infamy or disloyalty”
matters most to flesh-and-blood humans. These are people
who, most likely, have but one country of citizenship—a
country in which they exercise civic privileges available
exclusively to living individuals, such as voting, running for
office, or serving in the armed forces. They are people who
have neighbors and colleagues and communities in whose good
graces they hope to remain. And they are people who have
families and friends whose own reputations and happiness are
tied, at least in part, to their own.
Corporations are very different. To be sure, corporations
may derive substantial financial value from their brands’
reputations. But that is precisely the point: reputation is an asset
that companies cultivate, manage, and monetize. It is not a
quality integral to a company’s emotional well-being, and its
diminution exacts no psychological cost. This is why, for
example, “[t]he law of libel has long reflected the distinction
between corporate and human plaintiffs by limiting corporate
recovery to actual damages in the form of lost profits.” Martin
Marietta Corp. v. Evening Star Newspaper Co., 417 F. Supp.
947, 955 (D.D.C. 1976); see also Art Metal-U.S.A., Inc. v.
United States, 753 F.2d 1151, 1156 (D.C. Cir. 1985) (holding
that a corporation suing for defamation “may only recover
actual damages in the form of lost profits”). Unlike defamation
actions brought by individuals, because a corporation “has no
personal reputation,” Golden Palace, Inc. v. National
Broadcasting Co., 386 F. Supp. 107, 109 (D.D.C. 1974), aff’d,
530 F.2d 1094 (D.C. Cir. 1976), “libel action[s] brought on
behalf of corporation[s]” fall far short of implicating “‘the
essential dignity and worth of every human being,’” Martin
Marietta Corp., 417 F. Supp. at 955 (quoting Gertz v. Robert
Welch, Inc., 418 U.S. 323, 341 (1974)).
25
Because human beings and corporate entities are so
dissimilar, any analogy between the statutes that courts have
found to qualify as bills of attainder and section 1634 is
strained at best. Section 1634 is unlike the statute at issue in
Cummings v. Missouri, which following the Civil War closed
“office[s] of honor, trust, or profit” to individuals who had
“expressed sympathy with any who were drawn into the
Rebellion,” thereby permanently associating even passive
sympathizers with “the most active and the most cruel of the
rebels.” 71 U.S. at 317–18; see also Flemming, 363 U.S. at 615
(explaining that “the finding of punitive intent” in Cummings
“drew heavily on the Court’s first-hand acquaintance with the
events and the mood of the then recent Civil War”). Unlike the
individuals expunged from federal payrolls in United States v.
Lovett, Kaspersky has not been shunted into an underclass of
citizens declared “unfit . . . to continue in Government
employment” and “purg[ed] [from] the public service” for
holding membership in communist organizations and
espousing “views and philosophies” consonant with
“subversive activity.” 328 U.S. at 311–12; see also Flemming,
363 U.S. at 615 (explaining that “the determination that a
punishment had been imposed” in Lovett “rested in large
measure on the specific Congressional history” of the statute).
Nor, finally, is Kaspersky at all like Dr. Foretich, who Congress
had by legislative act “permanently associated . . . with
criminal acts of child sexual abuse.” Foretich, 351 F.3d at
1223.
Furthermore, all of the Supreme Court’s employment ban
cases have involved “a legislative enactment barring
designated individuals or groups from participation in specified
employments or vocations.” Nixon, 433 U.S. at 474. Not so
with section 1634. As the complaint itself alleges, Kaspersky
is “one of the world’s largest privately owned cybersecurity
companies,” and it does business all around the globe. Compl.
26
¶ 18. Because the federal government is far from Kaspersky’s
only client, section 1634 does not prevent Kaspersky from
engaging in its chosen profession, namely, developing and
selling cybersecurity products and services.
To the contrary, rather than an employment ban, section
1634 much more closely resembles the kinds of permissible
“line-of-business restrictions” and “run-of-the-mill business
regulations” that we approved in BellSouth I, 144 F.3d at 116,
and BellSouth II, 162 F.3d at 686. In those cases, this court
upheld two provisions of the Telecommunications Act of 1996,
one that prohibited all Bell operating companies and their
affiliates from engaging in certain types of electronic
publishing for four years, see BellSouth I, 144 F.3d at 61, and
another that prevented the operating companies from providing
certain kinds of long-distance services without first meeting
statutorily defined criteria, see BellSouth II, 162 F.3d at 680–
81. Admittedly, the provisions at issue in the BellSouth cases
presented easier calls: the two Telecommunications Act
sections under review included statutory escape hatches—such
as a sunset provision and a corporate restructuring
workaround—that section 1634 lacks. Nonetheless, the
BellSouth cases make clear that the Bill of Attainder Clause
tolerates statutes that, in pursuit of legitimate goals such as
public safety or economic regulation, prevent companies from
engaging in particular kinds of business or particular
combinations of business endeavors. See BellSouth I, 144 F.3d
at 64–65 (contrasting punitive employment bars with
nonpunitive conflict-of-interest and cross-ownership
restrictions); see also Navegar, Inc. v. United States, 192 F.3d
1050, 1066 (D.C. Cir. 1999) (holding that a statute banning the
manufacture of semiautomatic assault weapons did not
constitute a bill of attainder against gun manufacturers). And
section 1634 is just such a statute: for the protection of federal
27
computer systems, it prevents Kaspersky from selling products
for use in federal computers.
At bottom, then, a wide valley separates section 1634 from
the small handful of statutes that courts have found to be
unconstitutional bills of attainder. All four of the relevant
Supreme Court cases involved flesh-and-blood humans whom
the legislature deemed untrustworthy or subversive based on
those individuals’ political beliefs. And this court’s case,
Foretich, concerned a legislative determination that a father
had sexually abused his own daughter. Those cases differ
markedly from the situation we face here, where Congress
simply decided to stop using a company’s products based on
its determination that those products posed a national security
risk. Section 1634 may well cost Kaspersky some revenue, but
it stretches credulity to view what is ultimately a procurement
decision as a “brand of infamy or disloyalty.” Foretich, 351
F.3d at 1219. Of course, we do not foreclose the possibility that
Congress could impose a brand of infamy or disloyalty upon a
corporation that would rise to the level of legislative
punishment. But, in this case, section 1634 represents no more
than a customer’s decision to take its business elsewhere.
Though costly to Kaspersky, such a decision falls far short of
“the historical meaning of legislative punishment.” Selective
Service System, 468 U.S. at 852.
Motivational Test
The motivational test asks “whether the legislative record
‘evinces a congressional intent to punish.’” Selective Service
System, 468 U.S. at 852 (quoting Nixon, 433 U.S. at 478). As
we explained in Foretich, “[g]iven the obvious constraints on
the usefulness of legislative history as an indicator of
Congress’s collective purpose,” statutes rarely struggle to
satisfy the motivational test. 351 F.3d at 1225. Indeed, “this
28
prong by itself is not determinative in the absence of
‘unmistakable evidence of punitive intent.’” Id. (quoting
Selective Service System, 468 U.S. at 855 n.15).
Kaspersky not only fails to offer such unmistakable
evidence; it very nearly fails to offer any evidence whatsoever.
Kaspersky relies solely on a handful of public comments made
by Senator Shaheen, the sponsor of the amendment that became
section 1634. In a September 2017 New York Times op-ed, the
senator warned that the “threat . . . posed by antivirus and
security software products created by Kaspersky Lab, a
Moscow-based company with extensive ties to Russian
intelligence” creates an “alarming national security
vulnerability.” Jeanne Shaheen, The Russian Company that Is
a Danger to Our Security, N.Y. Times, Sept. 4, 2017.
Similarly, in a press release several weeks later, Shaheen stated
that the “case against Kaspersky Lab is overwhelming,”
warning that “[t]he strong ties between Kaspersky Lab and the
Kremlin are alarming and well-documented.” Shaheen’s
Legislation to Ban Kaspersky Software Government-Wide
Passes Senate as Part of Annual Defense Bill, Jeanne Shaheen
(Sept. 18, 2017), https://www.shaheen.senate.gov/news/press/
shaheens-legislation-to-ban-kaspersky-software-government-
wide-passes-senate-as-part-of-annual-defense-bill-.
The trouble with Kaspersky’s reliance on Shaheen’s
comments is twofold. First, we detect no punitive intent in the
senator’s statements. To the contrary, she expressed a desire to
take action to protect federal information systems—a
nonpunitive objective. And second, even if Shaheen’s
statements did reveal a personal desire to punish Kaspersky,
the company cites no corroborating evidence indicating that
other members of Congress shared her supposedly punitive
motivations. “‘[S]everal isolated statements are not sufficient
to evince punitive intent,’ and cannot render a statute a bill of
29
attainder without any other indicia of punishment.” Foretich,
351 F.3d at 1225 (quoting BellSouth II, 162 F.3d at 690)
(internal quotation marks omitted). Therefore, like the
functional and historical tests, the motivational test does
nothing to support Kaspersky’s argument that section 1634
constitutes a bill of attainder.
III.
Before concluding our consideration of the NDAA Case,
we need to address a procedural concern raised by Kaspersky.
As a general rule, “Federal Rule of Civil Procedure 12(d)
forbids considering facts beyond the complaint in connection
with a motion to dismiss the complaint for failure to state a
claim.” United States ex rel. Shea v. Cellco Partnership, 863
F.3d 923, 936 (D.C. Cir. 2017). Kaspersky argues that as a
consequence of consolidating the Directive and the NDAA
Cases for purposes of resolving related motions, the district
court impermissibly relied upon facts contained in the
Directive Case’s administrative record when considering the
government’s motion to dismiss the NDAA Case.
Although we cannot rule out the possibility that the district
court improperly comingled facts from the two separate cases,
we need not reach that issue. Because we are reviewing the
district court’s dismissal de novo, even if that court
impermissibly ventured outside the pleadings, we can affirm
based on the available permissible evidence. Among the
information a court may consider on a motion to dismiss are
“public records subject to judicial notice.” Kaempe v. Myers,
367 F.3d 958, 965 (D.C. Cir. 2004). “A federal court may take
judicial notice of ‘a fact that is not subject to reasonable
dispute’ if it . . . ‘can be accurately and readily determined from
sources whose accuracy cannot reasonably be questioned.’”
Hurd v. District of Columbia, 864 F.3d 671, 686 (D.C. Cir.
30
2017) (quoting Fed. R. Evid. 201(b)). In this case, Kaspersky
takes issue with the claims about the company memorialized in
various congressional hearings and legislative materials, but
the fact that those records exist is beyond dispute. Therefore,
in the foregoing discussion, we have noticed section 1634’s
legislative record not for its truth, but for its existence. See
Hurd, 864 F.3d at 686 (explaining that this court can rely on a
public record “of what was said” without relying “on it for the
truth of the matter asserted”).
We therefore consult section 1634’s legislative record to
provide evidence of statutory purpose only—that is, what
information Congress had before it when enacting the statute.
And in this case, that is enough to resolve Kaspersky’s claim.
Relying just on the legislative record and, of course, the NDAA
Case’s complaint itself, we conclude for all the reasons already
discussed that Kaspersky’s complaint fails to plausibly allege
that section 1634 is a bill of attainder. We shall therefore affirm
the district court’s dismissal of Kaspersky’s NDAA Case for
failure to state a claim upon which relief can be granted.
IV.
Having concluded that section 1634 is not a bill of
attainder, and thus having affirmed dismissal of the NDAA
Case, we turn to Kaspersky’s other suit against the Department
of Homeland Security. In its complaint, the company alleges
that Binding Operational Directive 17-01 violates the
Administrative Procedure Act, and it seeks the Directive’s
invalidation. See Complaint, Kaspersky Lab, Inc. v. U.S.
Department of Homeland Security, No. 1:17-cv-02697, at 22
(D.D.C. Dec. 18, 2017).
As the district court recognized, however, Kaspersky has
a serious standing problem. Section 1634 prohibits all the same
conduct as the Directive—and then some. Indeed, section 1634
31
sweeps more broadly than the Directive in two respects: it
covers more Kaspersky products and applies to more agencies.
See Kaspersky Lab, 311 F. Supp. 3d at 219 (“[T]he prohibition
in the NDAA is broader than the prohibition in [Binding
Operational Directive] 17–01, because it includes all
Kaspersky Lab products and services (not just ‘Kaspersky-
branded’ products), and because it does not exempt any
national security systems.”). Consequently, as Kaspersky
apparently concedes, invalidation of the Directive alone would
do nothing to help Kaspersky’s plight as long as section 1634
remains good law.
And indeed it does. Thus, as the district court explained,
“even if . . . the Court were to order the rescission of the
[Directive], [Kaspersky’s] harms would not be redressed.”
Kaspersky Lab, 311 F. Supp. 3d at 219. It is well-settled that
courts lack jurisdiction to hear cases in which the plaintiff fails
to identify a redressable injury. See Simon v. Eastern Kentucky
Welfare Rights Organization, 426 U.S. 26, 38 (1976) (holding
that to demonstrate standing, a plaintiff must show “an injury
to himself that is likely to be redressed by a favorable
decision”). Therefore, because courts “ha[ve] no jurisdiction to
proceed to the merits of a lawsuit where [their] ultimate
decision will have no real effect,” Kaspersky Lab, 311 F. Supp.
3d at 219, we shall affirm the district court’s dismissal of the
Directive Case for lack of subject matter jurisdiction.
V.
For the foregoing reasons, we affirm the district court’s
dismissal of the NDAA Case for failure to state a claim upon
which relief can be granted, as well as its dismissal of the
Directive Case for lack of jurisdiction.
So ordered.