Ninth Circuit: Immunity Law for Telecoms That Aided NSA Surveillance Is Constitutional

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By Michael O. Loatman  

The Foreign Intelligence Surveillance Act (FISA) Amendments Act of 2008, which granted retroactive immunity to telecommunications companies who assisted the National Security Agency in monitoring telephone and internet traffic, does not violate the due process rights of litigants nor violate the separation of powers and is therefore constitutional on its face, the U.S. Court of Appeals for the Ninth Circuit ruled Dec. 29 (In re National Security Agency Telecommunications Records Litigation v. AT&T Corp., 9th Cir., 09-16676, 12/29/11).

Although it reversed the U.S. District Court for the Northern District of California's findings on the retroactive application of the law, the appeals court affirmed the majority of the rulings reached by the lower court in dismissing litigation involving 33 consolidated consumer class actions against telecoms.

The litigation focused on Section 802 of the FISA Amendments Act, which was enacted partly in reaction to lawsuits that arose after the media reported that an antiterrorism initiative existed under which telecoms provided the government with telephone and e-mail traffic data.

“The lawsuit ultimately was an effort to recast policy-based objections in constitutional terms—and the effort was rightly unavailing,” Howard M. Wasserman, professor at Florida International University College of Law, Miami, who authored an amicus brief for law professors in favor of the government, told BNA Dec. 29. He said that the statute raises constitutional issues that appear “politically troubling” but that in fact it merely creates “a statutory defense, triggered by the executive, with a relaxed standard of proof or standard of review; nothing in that law is unusual or constitutionally problematic.”

The Ninth Circuit released at the same time as its Hepting opinion an additional two separate, but related, rulings.

In the first additional opinion, the Ninth Circuit ruled that claims against government defendants may continue because the immunity law in question applies only to telecoms (Jewel v. National Security Agency, 9th Cir., 10-15616, 12/29/11).

In its second additional opinion, the appeals court ruled that there was no valid takings claim associated with the activity of the telecoms (In re National Security Agency Telecommunications Records Litigation v. Verizon Communications Inc., 9th Cir., 09-17133, 12/29/11).

All three opinions were written by Judge M. Margaret McKeown and joined by Judges Harry Pregerson and Michael Daly Hawkins.

Long-Running Litigation.

A series of media reports in 2005 asserted that the government was involved in a terrorist surveillance program (TSP) that relied on the cooperation of telecommunications companies to review telephone and internet traffic patterns and communications content. It was not long thereafter that dozens of consumer class action complaints were filed in federal court challenging the alleged practice. Former President George W. Bush admitted in 2006 that the TSP existed, but claimed its scope was more limited than reported.

In July 2006, the district court rejected a motion to dismiss the Hepting lead consumer class action, ruling that the government could not rely on the state secrets privilege and that a telecom defendant could not assert immunity (142 TCM, 07/25/06).

While the district court's Heptingruling was on appeal to the Ninth Circuit, President Bush signed the FISA Amendments Act (H.R. 6304), which, among other things, allowed courts to grant retroactive immunity to telecommunications companies that facilitated warrantless surveillance efforts in the wake of the Sept. 11, 2001 terrorist attacks.

Section 802 does not automatically grant immunity to telecommunications companies but requires the attorney general to certify that at least one of five statutory factors was present as a basis for immunity. Reasons range “from a Foreign Intelligence Surveillance Court order, a national security letter, an Attorney General directive regarding FISA-authorized warrantless surveillance to participation in the TSP—or that no assistance was provided,” the court explained.

On Aug. 21, 2008, the Ninth Circuit remanded the government's interlocutory appeal in Hepting, ordering the district court to reconsider its ruling in light of the FISA amendments (167 TCM, 8/28/08).

Retroactive Application of the Law.

On remand, the district court dismissed the plaintiffs' claims but without prejudice, saying that the plaintiffs could re-file if there was evidence of improper surveillance that fell outside the telecoms' immunity period found in the FISA amendments, which extended from Sept. 11, 2001 to Jan. 7, 2007.

The appeals court said that four of the named class plaintiffs asserted improper surveillance claims based on activity predating the TSP but disagreed that their claims should be dismissed without prejudice.

“Unlike the district court, we conclude that § 802's immunity provisions are not temporally limited; only § 802(a)(4), which references the TSP, contains a temporal limitation. The district court did not err by dismissing these four appellants' pre-September 11, 2001 claims.”

Suits Against Government May Continue.

In the separate Jewelcase, which asserted Electronic Communications Privacy Act (ECPA), 18 U.S.C. § 2510, and Stored Communications Act (SCA), 18 U.S.C. § 2710, claims, the Ninth Circuit ruled that the plaintiffs' “claims are not abstract, generalized grievances and instead meet the constitutional standing requirement of concrete injury.” The appeals court said that the plaintiffs made “detailed allegations and claims of harm linking Jewel to the intercepted telephone, internet and electronic communications.”

The Ninth Circuit noted that ECPA and SCA allow “a private right of action for claims of illegal surveillance.” Allowing the Jewel plaintiffs to go forward, the appeals court said there were no prudential considerations, such as a political questions, to bar the litigation and rejected the government's call for a heightened standing requirement “simply because the case involves government officials in the national security context.”

Referencing the separate Jewelruling, which was not consolidated with the 33 class actions, the Ninth Circuit found in Hepting that the district court erred in dismissing both claims against telecoms and against government defendants. The appeals court reversed the trial court on the dismissal of two of the class suits that named government defendants and remanded them to the trial court.

In its McMurray ruling the appeals court also affirmed the dismissal of a Fifth Amendment takings claim regarding Section 802. It explained that the district court correctly dismissed the takings claim because the plaintiff “failed to seek just compensation from the [U.S.] Court of Federal Claims” under the Tucker Act.

Wasserman agreed with the jurisdictional ruling regarding claims against government actors, adding that he “would be very surprised if the takings claim succeeded” if brought before the Court of Federal Claims.

Separation of Powers Arguments Rejected.

On appeal, the plaintiffs did not challenge the amendments to FISA as applied to their cases but instead alleged that the amendments were unconstitutional on their face because they violated the separation-of-powers provisions of the U.S. Constitution.

The Ninth Circuit found no Article I bicameralism and presentment problems with the statute because the system did not amend or negate existing law and went through the legislative process mandated by the Constitution. In passing the FISA amendments, “Congress did not give the Executive the power to enact, amend or repeal a statute,”the appeals court said.

There is also no valid nondelegation doctrine concern, the Ninth Circuit said. “Congress imposed no standard or intelligible principle governing the Attorney General's certification authority,” the court said. Delegation of certain authority is increasingly necessary in the modern, complicated, technological world, it added.

“It is always difficult to prevail on a non-delegation argument,”Wasserman said, “precisely because the Supreme Court has used the doctrine to invalidate laws” very infrequently.

Wasserman said the “standards for when § 802 immunity could be sought and obtained were fairly clear. And the Ninth Circuit was right that vesting enforcement discretion in the executive cannot alone violate non-delegation, particularly in the area of national security. Enforcement discretion is at the heart of what the executive does.”

Nevertheless, Cindy Cohn of the Electronic Frontier Foundation (EFF), in San Francisco, which represented the plaintiffs, told BNA that “[w]e do not think it is constitutional for Congress to simply abdicate its duty to pass or repeal laws to the President, on a case by case basis. It's a dangerous trend, one that gives far too much power to the executive branch.”

Due Process Challenge Nixed.

The plaintiffs claimed due process was lacking because first, the law's procedures allow too much secrecy and thereby deny meaningful notice of the government's basis for certification, and second, the attorney general's certification does not provide a de novo review before an unbiased adjudicator. The court rejected both claims.

The court noted that the lawsuit did not challenge the basic process but only the “the extra layer of secrecy” that “only marginally refines and limits the notice available to a potential claimant.” Although a plaintiff may not at times be provided the specific grounds for certification on which the government relied, the court found no due process violation because one could challenge “any or all of them.”

Cohn, however, said not knowing which grounds were the basis for immunity “left us shadow boxing as we tried to argue that the immunity finding was not ‘supported by substantial evidence,' which is what we were supposed to prove under 802(b)(1). And if you can't even know why the government is asserting that your case should be dismissed, it's hard to see how anyone could think that you were able to defend against the claim or received sufficient due process under the constitutional requirements.”

On the issue of whether the attorney general is an unbiased adjudicator, the court concluded that he was not an adjudicator at all. “Mere certification, which is the foundation of immunity under § 802, is not tantamount to an adjudication,” it said.


For Hepting: Kevin S. Bankston and Cindy Cohn of EFF; Julia Harumi Mass of the ACLU Foundation of Northern California, in San Francisco; Peter J. Eliasberg of the ACLU Foundation of Southern California, in Los Angeles; Harvey Grossman of the Roger Baldwin Foundation of ACLU Inc., in Chicago; and numerous other individual attorneys represented the plaintiffs. Michael Kellogg of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC, in Washington, represented AT&T. Thomas M. Bondy of the Department of Justice, in Washington, represented the government.

For Jewel: EFF's Cohn, Bankston, and Lee Tien, Kurt Opsahl, and James S. Tyre; and other individual attorneys represented the plaintiffs. H. Thomas Byron III of DOJ, in Washington, represented the government.

For McMurray: Steven E. Schwarz of The Law Offices of Steven E. Schwarz, in Chicago, Bruce I. Afran of Princeton, N.J.; and Carl Mayer of the Mayer Law Group LLC, in Princeton, represented the plaintiffs. Brian M. Boynton of Wilmer Cutler Pickering Hale and Dorr LLP, in Washington; as well as Kellogg; Bradford A. Berenson, Eric D. McArthur, and Eric Shumsky of Sidley Austin LLP, in Washington; and Bruce A. Ericson Kevin M. Fong of Pillsbury Winthrop Shaw Pittman LLP, in San Francisco, represented the telecommunications companies. DOJ's Bondy represented the government.


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