Ninth Circuit Upholds Telecom Immunity for Warrantless Wiretapping but Permits Suit Against Government

By Alan Z. Rozenshtein
Saturday, December 31, 2011, 12:04 AM

As Raffaella mentioned earlier, the Ninth Circuit released three opinions on Thursday relating to class action litigation against the government and major telecommunications companies (AT&T, Verizon, etc.) for the warrantless wiretapping program conducted by the National Security Agency (NSA) under the Terrorist Surveillance Program (TSP) in the wake of September 11. The main opinions are: Hepting v. AT&T, in which the court held that § 802 of the Foreign Intelligence Surveillance Act (FISA), also known as the FISA Amendment Act of 2008, which retroactively granted immunity to telecoms, is constitutional; and Jewel v. NSA (which Ben highlighted back in August), in which the court held that the class action representative had standing to bring a number of statutory and constitutional claims against the government (though it did not address the government's alternative argument that the claims were foreclosed by the state secrets privilege). The court also issued a brief third opinion, McMurray v. Verizon, in which the court rejected the claim that § 802 is an unconstitutional taking under the Fifth Amendment. In all three cases, Judge M. Margaret McKeown wrote for a unanimous panel. I focus on Hepting and Jewell below.

Hepting v. AT&T

Hepting involved 33 separate lawsuits against various telecoms, consolidated through the multidistrict litigation process. Although not a named defendant in the original suits, the government intervened on the side of the telecoms to defend § 802. The district court dismissed the consolidated suit given the immunity provisions in § 802. The plaintiffs appealed.

The court first described § 802. The immunity provisions are triggered if the Attorney General certifies to one or more of five conditions -- essentially either that "no assistance was provided" or that assistance was provided pursuant to a "a Foreign Intelligence Surveillance Court order, a national security letter, [or] an Attorney General directive regarding FISA-authorized warrantless surveillance to participation in the TSP." Quoting from the Senate committee report on § 802, the court noted Congress's recognition of the "importance of the private sector [cooperation] in security activities" and that litigation against telecoms could cause them to be "unwilling to cooperate with lawful Government requests in the future," leading to "unacceptable" national security consequences.

The court next considered the separation-of-powers challenges to § 802. It first rejected the argument that the certification provisions, by giving discretion to the Attorney General whether or not a telecom defendant should get immunity, was an "impermissible statutory repeal" akin to the Line Item Veto Act (which the Supreme Court struck down in Clinton v. New York as violating the bicameralism and presentment requirements of the Constitution (art. I, § 7, cls. 2–3)). It noted numerous other provisions throughout the U.S. code granting the executive branch similar discretionary powers, none of which had ever been taken to violate the bicameralism and presentment requirements. Second, the court rejected a nondelegation challenge. It noted the virtual absence of nondelegation-based invalidation of legislation in the modern age, held that the certification conditions listed in § 802 provided a sufficiently "intelligible principle," and emphasized that the nondelegation requirement is "relaxed for delegations in fields in which the Executive has traditionally wielded its own power," such as intelligence. Third, the court rejected the argument that, because § 802 provides that the Attorney General's certifications can only be overridden by courts if "not supported by substantial evidence," § 802 is an unconstitutional incursion by the legislature into the judicial branch's activities. The court noted that many other statutes use a similar substantial-evidence standard of review. Finally, the court noted that § 802 did not deprive federal courts of jurisdiction over all warrantless wiretapping-related claims (and thereby deprive the plaintiffs of due process), since the statute "does not foreclose relief against government actors and entities who are the primary players in the alleged wiretapping."

The court also rejected the claim that § 802 deprives the plaintiffs of their liberty and property interests without due process. Assuming without deciding that the plaintiffs had a property interest at stake, the court first held that the Attorney General does not act as an adjudicator when certifying to the § 802 conditions (in which case the plaintiffs could argue that the adjudication was biased) and that preexisting policy preferences serve a legitimate role in certification decisions. Second, the court held that § 802 provides sufficient notice and process, even where the government, on national security grounds, certifies under § 802 without identifying the specific certification condition it is referencing.

Jewel v. NSA

Carolyn Jewel brought a class action on behalf of herself and similarly situated individuals -- "ordinary Americans" who are current or former AT&T customers -- against various government agencies and officials for a number of statutory and constitutional claims arising out of the warrantless wiretapping program, including the operation of what Jewel characterized as a "dragnet of ordinary American citizens." The district court held that Jewel lacked standing because she had failed to "make out prima facie allegations necessary to establish that she was an 'aggrieved person' under the FISA." Because the district court dismissed the case at the summary judgment phase, the appeals court assumed Jewel's allegations to be true for the purpose of the standing analysis.

The court first addressed whether Jewel had constitutional standing under Article III's "cases and controversies" requirement, which the Supreme Court has interpreted as requiring "(1) an injury in fact that (2) is fairly traceable to the challenged conduct and (3) has some likelihood of redressability." In addition, the "injury in fact" must be "concrete and particularized."Addressing the injury-in-fact requirement, the court held that both the statutes -- FISA, the Electronic Communications Privacy Act (ECPA), the Stored Communications Act (SCA), and the Administrative Procedures Act -- and the constitutional provisions -- the First and Fourth Amendments -- under which Jewel sued created legal rights, injuries which would be sufficiently concrete to convey standing. In evaluating whether the injury was sufficiently particularized, the court noted that, although injuries to "large of numbers of Americans suffer[ing] alike" are often more appropriately addressed to the legislature rather than judiciary, "the fact that a harm is widely shared does not necessarily render it a generalized grievance," specifically if the harm is of a concrete rather than "an abstract and indefinite nature." Analogizing to mass tort cases, the court held that, because Jewel's alleged injuries were to her privacy, rather than some generalized privacy interest held by all Americans, Jewel's injuries were sufficiently particularized, even if many others were similarly injured. This, the court explained, distinguished Jewel's challenge from a previous challenge to the wireless wiretapping program brought by the ACLU, which the 6th Circuit dismissed in 2007 for lack of standing on the grounds that the ACLU had not alleged that any of its communications had been intercepted. The court also held that Jewel straightforwardly met the traceability and redressibility requirements.

The court then addressed whether "prudential" considerations -- "the broad nature of the claims and the role of the courts in addressing intelligence and surveillance issues" -- counseled against standing, noting that this issue was the "core of the government's argument on appeal." While recognizing that "Jewel challenges conduct that strikes at the heart of a major public controversy involving national security and surveillance" and that "national security issues require sensitivity," the court characterized Jewel's claims as "present[ing] straightforward claims of statutory and constitutional rights, not political questions." The court emphasized that Congress had already created causes of action under FISA, ECPA, and SCA, and had limited § 802 immunity to private companies, thus "expressly le[aving] intact potential claims against the government." The court rejected the district court's application of a heightened standard for standing to Jewel's constitutional claims in the context of national security involving the executive: "Article III imposes no heightened standing requirement for the often difficult cases that involve constitutional claims against the executive involving surveillance."

Having determined that Jewel had standing to sue the government, the court remanded the case back to the district court for further proceedings, including consideration of the government's argument that Jewel's claims were foreclosed by the state secrets privilege.