A reflection on California's AB 857 (2016) - a law passed to suppress the act of people being able to freely build unregistered arms in their home - and California's more recent AB 39 (2023), a law which aspires to force registration of nearly every digital currency user. (The following is an overview of some of the court cases which have touched on the issues that problematic and common to both laws, as both legislate 'prior restraint.') My apology in advance for this long note.
The first notable case in which the United States Supreme Court ruled on a prior restraint issue was Near v. Minnesota, 283 U.S. 697 (1931). In that case the Court held prior restraint to be unconstitutional, except in extremely limited circumstances such as national security issues. In that case, with respect to the Minnesota Gag Law of 1925, also known as The Public Nuisance Law, the United States Supreme Court ruled, ""The statute in question cannot be justified by reason of the fact that the publisher is permitted to show, before injunction issues, that the matter published is true and is published with good motives and for justifiable ends. ... it would be but a step to a complete system of censorship. ... The preliminary freedom, by virtue of the very reason for its existence, does not depend, as this court has said, on proof of truth. (Patterson v. Colorado, 205 U.S. 454, 462)". (...) "(T)he protection even as to previous restraint is not absolutely unlimited. But the limitation has been recognized only in exceptional cases."
These prior restraint issues later made their way into the world of computer code. One of Electronic Frontier Foundation's first major legal victories was Bernstein v. Department of Justice, paving the way for international e-commerce.
The court eventually ruled that the export control laws on encryption violated Bernstein's First Amendment rights by prohibiting his constitutionally protected speech, leading to regulatory changes that made it easier to publish encryption software online without the approval of the US government. Along the way, Judge Marilyn Hall Patel in the Northern District of California issued the crucial first ruling that found that "code is speech" and so is protected by the First Amendment in the United States.
"This court can find no meaningful difference between computer language, particularly high-level languages as defined above, and German or French....Like music and mathematical equations, computer language is just that, language, and it communicates information either to a computer or to those who can read it..."
-Judge Patel, April 15, 1996
Similarly, when people share code with the ultimate intention of conveying technical information that will enable two parties to communicate about a possible "build," or share ideas about the "build" in the context of home built weapons development, whether they are editing CAD files, utilizing a 3-D printer, or merely finishing metal parts by drilling them out to completion with a drill press and other tools while referencing the code and technical information, this is speech and it is protected expression. The case of Defense Distributed vs. U.S. Department of State, addressed some of these issues. By around the middle of 2018, after several years in the Defense Distributed case, and a negotiated settlement, Cody Wilson and Defense Distributed were free to upload designs of working firearms to the internet; those files are legal to own and share, and the resulting weapons are legal to own. Defense Distributed and DEFCAD have continue to distribute those files.
In like manner, if someone who is a builder and owner of one of these pieces, decides voluntarily that he or she wishes to engrave a mark (or potentially a serial number) on the finished lower receiver that he or she has built, or on other pieces, that is speech and it is protected expression, and it would be illegal to prevent this form of speech by engaging in the type of prior restraint that AB 857 (2016) (current California law) mandates.
The demands proposed by AB 857 that we apply to the Department of Justice for a unique serial number "or other mark of identification" have no basis in reality and as mentioned are a form of prior restraint that unconstitutionally would keep us as builders and owners from expressing ourselves as we see fit.
The demands proposed by the State of California that people apply for a permit and register with the State to use bitcoin or other systems under what is now law (AB 39 (2023) [California's bitlicense], set to take effect July 2025), are no different. These ideas are unconstitutional and meritless.
Finally, I think it is an important note that the soldiers in WWII did not fight the Nazis so that fascist schemes could later be upheld which would mimic Nazi behavior. A brief review of history is in order to remind us of why we should avoid gun registration schemes - or bitlicense schemes such as those adopted by California and New York.
In 1932, Alfred Flatow registered his handguns, as decreed by the harsh gun control laws of the Weimar Republic drawn up amid the chaos of aftermath of WWI.
The first assault on the Republic came not from the right but from the communist left. German Communists attempted to overthrow the government by armed struggle. The government mobilized the Freikorps, which murdered the Communist leaders.
Hoping to stem further attacks on the state, the Weimar Republic imposed draconian gun control laws that made it punishable by death to carry a gun.
The Weimar Ministry of the Interior made gun registration mandatory. Although the Weimar Ministry of the Interior worked to assure registrants that their information would remain safe, this proved to be an empty promise. When Nazis took over in 1933, the information was culled for registrants who were deemed "enemies of the state," a euphemism for Jews, communists, and other political opponents.
Gestapo legal adviser Werner Best proposed to execute Jews who were found in possession of firearms.
In 1938, in preparation for Kristallnacht (November 9-10, 1938), the Gestapo used Weimar gun registration records to disarm Jews and focused on Jewish gun owners for deportation to concentration camps. Alfred Flatow fled Germany for the Netherlands, but when Nazis invaded the Netherlands, in May 1940, Flatow was on the Gestapo's list.
Flatow was arrested and sent to Theresienstadt Concentration Camp, where he died from starvation on December 28, 1942. His cousin Gustav died in the same camp three years later.
If you believe it is impossible for these kinds of things to happen here in the USA, you are wrong. It has happened before - 1942-1946 with Japanese-American internment, for example - and it could easily happen again, given today's political conversations and attempts in D.C. to to put gun owners on so-called "terrorist watchlists." Indeed, with express provisions in California law stipulating that 100,000 dollars would be a penalty for the State's interpretation that you didn't meet what they felt was compliance with the law, this is a clear sign that anyone who has any innovative or logical business use of bitcoin or cryptocurrency will soon be on a California watchlist.
In 2017, the California Legislature attempted to use a law and the state's own staff to censor speech of a blogger who posted the publicly available names and addresses of legislators who routinely attacked the rights of Californians. The Legislature's anti-speech law and its attempt to infringe upon basic First Amendment rights were stricken down by the California Eastern District Court, which ruled on Feb. 27, 2017 in Publius v. Boyer-Vine that “content-based laws — those that target speech based on its communicative content — are presumptively unconstitutional.” That court decision was not appealed and the nature of the decision was to provide a remedy for problems caused by prior restraint actions of the State which violate the 1st Amendment exercise.
There is no question that California's AB 39 (2023) is a content-based law that targets not only bitcoin but other digital assets which are used not only for transactional purposes but as a means of expression – as a form of speech. That the transactional purpose and the speech happen at the same time does not extinguish the 1 st Amendment protection that is enjoyed by network participants. California's attempt to target an entire economy and entire networks of individuals via its efforts to pass AB 39 (which is now law) is in fact a violation of the judgment of the California Eastern District Court which made quite clear that “content-based laws-- those that target speech based on its communicative content – are presumptively unconstitutional.” And thus, AB 39 is presumptively unconstitutional.
In the recent U.S. Supreme Court decision known as Tennessee Wine and Spirits Retailers Association v. Thomas, seen at
https://www.supremecourt.gov/opinions/18pdf/18-96_5i36.pdf it is noted that this Supreme Court decision is not just about wine, but that commercial actions cannot be turned into prohibited acts by a state. Quote follows from the decision: "More recently, we observed that our dormant Commerce Clause cases reflect a “‘central concern of the Framers that was an immediate reason for calling the Constitutional Convention: the conviction that in order to succeed, the new Union would have to avoid the tendencies toward economic Balkanization that had plagued relations among the Colonies and later among the States under the Articles of Confederation.’” Granholm, 544 U. S., at 472 (quoting Hughes v. Oklahoma, 441 U. S. 322, 325–326 (1979)). In light of this history and our established case law, we reiterate that the Commerce Clause by its own force restricts state protectionism." ..."And Granholm never said that its reading of history or its Commerce Clause analysis was limited to discrimination against products or producers. On the contrary, the Court stated that the Clause prohibits state discrimination against all “‘out-of-state economic interests,’” Granholm, 544 U. S., at 472 (emphasis added), and noted that the direct-shipment laws in question “contradict[ed]” dormant Commerce Clause principles because they “deprive[d] citizens of their right to have access to the markets of other States on equal terms.” Id., at 473 (emphasis added)."
Given this long record I have cited of both California court decisions against prior restraint, California court decisions in favor of code as speech, and US Supreme Court decisions which bar states from creating blanket prohibitions of commerce, there is no logic whatsoever to anything like either California's AB 857 (2016) or California's AB 39 (2023) [the California bitlicense, now law]. While both would have to be challenged in court, we cannot hold our breath waiting for this to happen. We can resist these ill-founded ideas only so long as it is economically sustainable, but I propose also that people safely continue their innovative work from elsewhere - in a place they will not be prosecuted for doing so.
cc: @ODELL
@Gigi @Shawn
