Paradigm Backs Michael Lewellen on Appeal to the Fifth Circuit

Paradigm filed an amicus brief with the Fifth Circuit in Lewellen v. Blanche, urging the court to reverse a decision that let the government dodge judicial review of its overaggressive use of money transmission laws against non-custodial software developers under 18 U.S.C. § 1960. 

This is our second time weighing in on this case, but the facts and our argument are unchanged: DOJ’s overreach is a threat to all non-custodial software developers. Last summer, we opposed the government’s motion to dismiss Michael Lewellen’s suit, which challenges DOJ’s theory that publishing non-custodial software can make a developer an unlicensed “money transmitter.” 

Our current brief makes two points. First, a non-binding policy memo that DOJ can revoke (or ignore) at any time doesn’t erase the risk created by a legal theory the government is still actively pursuing, as DOJ’s continued prosecution of developers—including its push for a retrial after a hung jury in the Storm case—makes clear. Second, publishing code is speech, and Lewellen doesn’t have to wait to be indicted before challenging a rule that discourages him from publishing his software. Courts have long held that a credible threat of prosecution is itself an injury, especially where, as here, the government has already prosecuted the exact conduct at issue. 

The stakes in this case go beyond one plaintiff. If developers can find out whether their code is legal only by risking a felony prosecution, the rule of law has failed them. And the effects are already visible: Developers are shelving projects, moving overseas, or blocking U.S. users altogether rather than risk the same fate as the developers DOJ continues to attack.

Our brief is available here.