Surveillance

Summary: Ninth Circuit Declines to Rehear State Secrets Case

By Rachael Hanna
Wednesday, August 12, 2020, 8:01 AM

On July 20, the Ninth Circuit declined to rehear en banc Fazaga v. FBI, a case concerning the application of the state secrets privilege and procedures laid out in the Foreign Intelligence Surveillance Act (FISA) that allows for the protected review of privileged government evidence during litigation. A panel of the Ninth Circuit had previously decided the case in February 2019. The following summary focuses primarily on the Ninth Circuit’s findings in relation to the state secrets privilege and FISA.

Factual Background

Fazaga was a putative class action alleging that an FBI investigation had involved unlawful searches and anti-Muslim discrimination, filed against the United States, the FBI, two government officials in their official capacities and five FBI agents in their individual capacities. The plaintiffs, Yassir Fazaga, Ali Uddin Malik, and Yasser Abdelrahim, alleged that the FBI surveilled them solely because of their religious identity. Specifically, for at least 14 months in 2006 and 2007, the FBI paid a confidential informant named Craig Monteilh to gather information as part of a counterterrorism investigation known as Operation Flex. The plaintiffs claimed that surveillance by Monteilh and the FBI resulted in searches that violated FISA, the Fourth Amendment and the First Amendment’s prohibition on unlawful religious discrimination.

More specifically, the plaintiffs made 11 different claims, all in response to the three categories of audio and video surveillance alleged in the complaint: recordings made by Monteilh of conversations to which he was a party; recordings made by Monteilh of conversations to which he was not a party; and recordings made by devices planted by FBI agents in Fazaga’s office and Abdelrahim’s house, car and phone. To clarify the courts’ different handling of the different claims, the following chart sets out the 11 claims along with the cause of action, the defense put forward by the defendants, and the outcome at the district and appellate levels. The defenses listed were made by the government unless indicated otherwise.

Claims

Cause of Action

Defenses

Outcome

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the First Amendment Establishment Clause under Bivens and 28 U.S.C. § 1331 (against all defendants except the FBI and United States)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit remanded for consideration of whether Bivens remedy is available; Privacy Act and Religious Freedom Restoration Act (RFRA) preclude some Bivens claims.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the First Amendment Establishment Clause under 42 U.S.C. § 1985(3) and 28 U.S.C. § 1343 (against the agent defendants)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit affirmed dismissal of § 1985(3) claims on grounds of qualified immunity.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the First Amendment Free Exercise Clause under Bivens and 28 U.S.C. § 1331 (against all defendants except the FBI and United States)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit remanded for consideration whether Bivens remedy is available; Privacy Act and RFRA preclude some Bivens claims.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the First Amendment Free Exercise Clause under 42 U.S.C. § 1985(3) and 28 U.S.C. § 1343 (against agent defendants)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit affirmed dismissal of § 1985(3) claims on grounds of qualified immunity.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of RFRA, 42 U.S.C. § 2000bb-1 (against all defendants)

State secrets privilege; qualified immunity (agent defendants only)

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit affirmed dismissal in favor of agent defendants on grounds of qualified immunity; reversed dismissal for government and remanded.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the Fifth Amendment Equal Protection Clause under Bivens and 28 U.S.C. § 1331 (against all defendants except the FBI and United States)

State secrets privilege

District Court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit remanded for consideration whether Bivens remedy is available; Privacy Act and RFRA preclude some Bivens claims.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of the Fifth Amendment Equal Protection Clause under 42 U.S.C. § 1985(3) and 28 U.S.C. § 1343 (against agent defendants)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit affirmed dismissal of § 1985(3) claims on grounds of qualified immunity.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion; injunctive relief to destroy unlawfully obtained information

Violation of the Privacy Act, 5 U.S.C. § 552a(a)-(l) (against the FBI)

State secrets privilege

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit affirmed dismissal for failure to state claim under Privacy Act.

Unconstitutional searches; Fourth Amendment injunctive relief claim to expunge agency records unconstitutionally obtained and maintained

Violation of the Fourth Amendment under Bivens (against Agent Defendants) and 28 U.S.C. § 1331 (against the FBI and United States)

Requested injunctive relief not available under the Constitution; alternatively, if expungement available, still not available here because no ongoing constitutional violation

District court dismissed in favor of all defendants on grounds of state secrets privilege. Ninth Circuit reversed on grounds state secrets privilege was not asserted; Fourth Amendment injunctive relief claim remanded; Fourth Amendment Bivens claim remanded for consideration as appropriate remedy if necessary.

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Violation of FISA, 50 U.S.C. § 1810 (against all defendants)

Sovereign immunity (government);

qualified immunity (agent defendants)

District court dismissed for the government on sovereign immunity grounds (not appealed) and state secrets privilege (appealed); denied qualified immunity for agent defendants. Ninth Circuit reversed dismissal based on state secrets privilege and remanded. Ninth Circuit granted qualified immunity with regard to surveillance categories (1) and (2) and held no FISA violations with regard to surveillance category (1); granted qualified immunity for Agents Tidwell, Walls, and Rose with regard to surveillance category (3); denied qualified immunity for Agents Allen and Armstrong with regard to surveillance category (3).

Unlawful discrimination on the basis of, or burdens on, or abridgement of the rights to, religion

Invasion of privacy, violation of Cal. Civ. Code § 52.1, and intentional infliction of emotional distress under the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346(b), 2671, et seq. (against the United States)

State secrets privilege

District court dismissed on grounds of state secrets privilege; Ninth Circuit remanded state law and FTCA claims based on district court’s ultimate resolution of surviving federal constitutional and statutory claims.

Procedural Posture

The U.S. District Court for the Central District of California initially permitted the plaintiffs’ FISA claim against the FBI agents to proceed, rejecting the argument that the named agents were entitled to qualified immunity. It dismissed the claim against the government on the grounds of sovereign immunity.

In a second order, however, the district court dismissed all the plaintiffs’ other claims on the basis of the state secrets privilege––a long-recognized government privilege to prevent the disclosure of state secrets in civil litigation. Upon the government’s invocation of this privilege, courts will exclude the state secrets evidence, often deferring to the executive branch’s judgment, but sometimes after reviewing the evidence independently. If plaintiffs are unable to press their claim without access to the privileged evidence, under federal common law, dismissal has traditionally been the only available remedy. Here, the district court held that the FBI would need to rely on privileged material to defend against the plaintiffs’ claims, and that “protective orders or restrictions on testimony” could not be used as an effective substitute for dismissal.

Notably, the district court declined to use FISA’s in camera, ex parte procedures—set out in 50 U.S.C. § 1806(f)—as a substitute for dismissal, believing they did not apply to non-FISA claims. Section 1806(f) procedures apply only to electronic surveillance materials. They allow the judge to review in camera and ex parte––in private and without the presence of the opposing party––the government’s “application, order, and such other materials relating to the surveillance as may be necessary to determine whether the surveillance of the aggrieved person was lawfully authorized and conducted.” While dismissal remains a possible outcome, under § 1806(f), courts may instead choose to disclose to the plaintiffs, “under appropriate security procedures and protective orders,” portions or summaries of the materials related to the electronic surveillance, but only if “such disclosure is necessary to make an accurate determination of the legality of the surveillance.”

On appeal, the key issue was whether the procedures established under FISA for adjudicating the legality of challenged electronic surveillance replaced the common law state secrets privilege’s dismissal remedy. The plaintiffs argued for FISA’s § 1806(f) procedures to be applied instead of immediate dismissal, while the government defended the district court’s dismissal on the basis of the state secrets privilege. The Ninth Circuit is the first federal court of appeals to address this issue.

Holdings

The three-judge panel for the Ninth Circuit held that some of the claims the district court dismissed on state secret grounds should not have been dismissed outright. The Ninth Circuit concluded that, in determining sua sponte that particular claims warranted dismissal under the state secrets privilege, the district court had erred. Rather, the district court should have reviewed any state secrets evidence necessary for a determination of whether the alleged surveillance was unlawful.

Under Section 110 of FISA, codified at 50 U.S.C. § 1810, individuals who are subjected to electronic surveillance that violates FISA’s procedures have a private right of action. Concerning the FISA claim against the individual FBI agents, the Ninth Circuit considered the three categories of audio and video surveillance alleged in the complaint. To have violated FISA’s procedures, the alleged surveillance would need to have been conducted in circumstances in which the plaintiffs had a reasonable expectation of privacy and in which a warrant would be required if the surveillance were taking place for law enforcement purposes.

The court concluded that the five FBI agents were entitled to qualified immunity with regard to the first two categories of surveillance, on the grounds that the plaintiffs lacked a reasonable expectation of privacy as to the first category and that, while the plaintiffs did have a reasonable expectation of privacy as to the second category, that right was not “clearly established.” As to the third category of surveillance, the court held that two FBI agents named as defendants were not entitled to qualified immunity against the plaintiffs’ FISA claim, but the other three named agents were entitled to dismissal because the plaintiffs had not plausibly alleged the three agents’ specific involvement in this category of surveillance.

Lastly, the court addressed the remaining claims, which had been dismissed prematurely pursuant to the state secrets privilege.

State Secrets Privilege

What constitutes a “state secret” has never been definitively set out by the courts, and the Ninth Circuit in this case did not attempt to construct such a definition. The court did note that the state secrets privilege has been applied to information whose disclosure would impair national defense capabilities, reveal intelligence sources and methods, disrupt foreign diplomatic relations, or otherwise harm national security. Moreover, the Ninth Circuit recognized that in a post-9/11 threat environment, even purely domestic investigations may involve foreign security concerns that lead the government to invoke the privilege.

Under United States v. Reynolds, to invoke the state secrets privilege, the head of the department overseeing the litigation must lodge a formal claim, which must reflect that official’s judgment and not the judgment of lower ranking officials. Additionally, the government’s invocation must provide the judge with enough detail for him or her to independently determine the validity of the privilege assertion and the scope of evidence covered by the privilege. Here, the attorney general asserted the state secrets privilege, articulated in Reynolds. The government submitted both public and classified declarations laying out the parameters of the evidence it thereby sought to exclude. Accordingly, the FBI sought dismissal of the plaintiffs’ religious discrimination claims but not their Fourth Amendment and FISA claims.

Quoting Mohamed v. Jeppesen Dataplan, Inc., the Ninth Circuit explained that the Reynolds privilege justifies dismissal of a claim in three circumstances: (1) if “the plaintiff cannot prove the prima facie elements of her claim with nonprivileged evidence”; (2) if “the privilege deprives the defendant of information that would otherwise give the defendant a valid defense to the claim”; and (3) if “privileged evidence” is “inseparable from nonprivileged information that will be necessary to the claims or defenses” such that “litigating the case to a judgment on the merits would present an unacceptable risk of disclosing state secrets.” While the district court wrote that the plaintiffs could make a prima facie case without resorting to state secrets evidence, it determined that the second and third circumstances were present, requiring dismissal of the Fourth Amendment claim. However, the Ninth Circuit held that this was in error: The government had not sought the claim’s dismissal on the basis of the state secrets privilege, as is required under Reynolds. Although the FBI agents had pointed to the state secrets privilege in arguing for the claim’s dismissal, this was not sufficient, the Ninth Circuit wrote.

FISA Displacement of the State Secrets Privilege

Before FISA’s enactment in 1978, foreign intelligence surveillance and the treatment of evidence implicating state secrets were governed purely by federal common law. Under Ninth Circuit case law, a clear statement by Congress explicitly abrogating the common law state secrets privilege that existed before 1978 is not required to decide that FISA displaced part of that federal common law. Rather, in order to displace common law, FISA only needs to “speak directly” to the issue addressed by that law—here, the state secrets privilege’s dismissal remedy.

The Ninth Circuit found that FISA’s § 1806(f) does speak directly to the question otherwise answered by the common law state secrets privilege dismissal remedy. In relevant part, § 1806(f) provides that if “an aggrieved person” makes a request “pursuant to any other statute or rule” to obtain applications, orders, or other materials relating to electronic surveillance and “if the Attorney General files an affidavit under oath” asserting that disclosure of such information or an adversary hearing would harm the national security of the United States, the court adjudicating the case is empowered to “review in camera and ex parte the application, order, and such other materials relating to the surveillance as may be necessary to determine whether the surveillance of the aggrieved person was lawfully authorized and conducted.” The Ninth Circuit read § 1806(f) as codifying and “confirm[ing] Congress’s intent to make the in camera and ex parte procedure the exclusive procedure for evaluating privileged evidence that threatens national security in the context of electronic surveillance-related determinations.”

Thus, the court concluded that FISA’s § 1806(f) in camera and ex parte procedures, where applicable, displace the previous dismissal remedy afforded by the state secrets privilege. These procedures must be used when an aggrieved person affirmatively challenges the legality of electronic surveillance—whether the challenge is brought under FISA, the Constitution or any other law.

Application of FISA’s § 1806(f) Procedures

The Ninth Circuit determined that the present case fell within § 1806(f), as the attorney general had asserted the state secrets privilege with regard to information relating to Operation Flex and the plaintiffs had requested information derived from electronic surveillance.

The court also determined that the plaintiffs were “aggrieved persons” with regard to the recordings made by planted devices because Fazaga had a reasonable expectation of privacy in his office, and Abdelrahim had a reasonable expectation of privacy in his home, car and phone.

Lastly, the court noted that FISA § 1805(a)(2)(A) prohibits electronic surveillance of a U.S. person “solely upon the basis of activities protected by the first amendment to the Constitution of the United States,” which is what the plaintiffs alleged happened. If true, such surveillance was necessarily unauthorized by FISA, and § 1810 subjects any persons who intentionally engaged in such surveillance to civil liability. The Ninth Circuit concluded that since Congress provided procedures for the review of national security-related evidence, it must have intended for those procedures to be used when an aggrieved person sues for damages under FISA.

Additional Non-FISA Claims

The panel next considered whether the claims other than the FISA § 1810 claim must be dismissed for reasons other than the state secrets privilege, limited to reasons raised by the defendants’ motions to dismiss.

Addressing the Fourth Amendment search claim for injunctive relief against the two defendants sued in their official capacity, the court first held that the remedy sought by the plaintiffs—the expunging of all records the FBI unconstitutionally collected and retained—was available under the Constitution. Because the government made no argument to dismiss this claim other than the state secrets privilege, it should not have been dismissed.

The court also considered the Fourth Amendment claim against the FBI agents sued in their individual capacities. On this claim, plaintiffs sought monetary damages under Bivens v. Six Unknown Named Agents. Noting the overlap between the plaintiffs’ FISA § 1810 claim and their Fourth Amendment Bivens claim, the Ninth Circuit wrote that the “narrow range of the remaining FISA claim” left it uncertain that the plaintiffs would continue to pursue the Bivens claim. Rather, the court remanded for the district court to determine whether a Bivens remedy is appropriate for the Fourth Amendment claim against the FBI agents.

Regarding the plaintiffs’ allegations that they were surveilled solely because of their religion and their claims under the First and Fifth Amendments, the Ninth Circuit again focused on whether there were grounds for dismissal independent of the state secrets privilege.

The court noted its previous holdings in this case that injunctive relief is available under the Constitution for viable challenges to government actions and that dismissal pursuant to the state secrets concern was premature due to the availability of § 1806(f) procedures. As a result, the Ninth Circuit further held that the First and Fifth Amendment injunctive relief claims against the defendants in their official capacity could proceed.

Regarding the defendants’ First and Fifth Amendment Bivens claims against the FBI agents in their individual capacity, the Ninth Circuit found that the Privacy Act and the Religious Freedom Restoration Act (RFRA) provided an alternative remedy for some, but not all, of those claims. The appeals court remanded to the district court the issue of whether a Bivens remedy remains available for the remaining claims.

However, the Ninth Circuit affirmed the lower court’s dismissal of the plaintiffs’ 42 U.S.C. § 1985(3) claims––that they were deprived of their First and Fifth Amendment rights––against the named FBI agents. At the time the plaintiffs alleged they were surveilled, neither the Ninth Circuit nor the Supreme Court had held that an intracorporate agreement (an agreement between members of the same agency, in this case the FBI) could subject federal officials to liability under § 1985(3), and the circuits that had decided the issue were split. Thus, there was no clearly established law on the question; the FBI agents were entitled to qualified immunity, and the district court properly dismissed the § 1985(3) allegations.

Next, the plaintiffs brought RFRA claims against individual agents and the government for unlawful surveillance. The government had only argued that these claims should be dismissed based on the state secrets privilege. However, the individual agents also argued that they were entitled to qualified immunity because no law clearly established that their covert surveillance had substantially burdened the plaintiffs’ religion. Citing two other Ninth Circuit cases that suggested such surveillance would not constitute a substantial burden—Vernon v. City of Los Angeles and The Presbyterian Church (U.S.A.) v. United States—the Ninth Circuit again determined that the FBI agents were entitled to qualified immunity. However, because the FBI does not enjoy the qualified immunity of individual agents and made no other arguments in support of dismissal, the Ninth Circuit held that the RFRA claim against the FBI could proceed.

Finally, the court considered the plaintiffs’ claim for injunctive relief against the FBI under the Privacy Act and their claims under the Federal Tort Claims Act (FTCA) against the United States. A prior Ninth Circuit case, the court found, precluded the injunctive relief the plaintiffs sought—the destruction or return of information obtained through unlawful surveillance—and therefore the plaintiffs had failed to state a claim. As to the FTCA claims, the court declined to consider whether the surveillance had been discretionary in nature—which would preclude a FTCA claim—arguing that this was a matter for the district court to determine on remand.

Procedures on Remand

On remand, the court instructed the district court to allow the FISA and Fourth Amendment claims to proceed as usual, to the extent that they were validly pleaded in the complaint and not subject to qualified immunity. The district court should, using § 1806(f)’s in camera and ex parte procedures, review any materials relating to the electronic surveillance—including the evidence over which the government asserted the state secrets privilege—as may be necessary to determine whether the electronic surveillance was lawfully authorized and conducted.

The Ninth Circuit further held that once the district court conducted such a review and determined the lawfulness of that surveillance, it could rely on its assessment of the same evidence to “determine the lawfulness of the surveillance falling outside FISA’s purview,” if the plaintiffs proceed with those claims. The appeals court noted that the government could raise a state secrets defense, which the district court should newly consider.

Denial of Rehearing En Banc: The Concurrence and Dissent

Concurring in the denial of rehearing en banc, Judges Gould and Berzon, joined by Judges Wardlaw, Fletcher, and Paez, wrote to respond to Judge Bumatay’s dissent from the rehearing denial.

In concluding that § 1806(f)’s procedures apply, the judges wrote, the panel opinion did not—as the dissent argued—“second guess” the executive branch’s determination of what evidence should be shielded from disclosure by the state secrets privilege. Nor did the panel opinion see FISA displace the state secrets privilege; to the contrary, the government must invoke the state secrets privilege before § 1806(f)’s procedures can be applied. Rather, § 1806(f)’s procedures displace the state secrets privilege’s common law dismissal remedy. Classified material is still protected from disclosure under § 1806(f), and the government routinely uses those procedures––in camera and ex parte review––when prosecuting suspected terrorists without concern that such procedures will lead to the disclosure of state secrets.

Berzon and Gould emphasized that the state secrets privilege is an evidentiary privilege, not a constitutional one, consistent with the Reynolds holding. Moreover, the dismissal remedy is a procedural exigency and therefore does not raise separation of powers concerns, as the dissent argued. They also noted that, contrary to the dissent’s argument, § 1806(f) procedures apply whether the government is prosecuting a case or is being sued for unlawful electronic surveillance.

Dissenting from the denial of rehearing en banc, Bumatay, joined by Judges Callahan, Ikuta, Bennett, R. Nelson, Bade, Lee, and VanDyke—and Judges Collins and Bress, except for Section III.A.2—wrote that the panel’s opinion “strain[ed] the meaning of FISA and adopt[ed] a virtually boundless view” of § 1806(f). He argued that the court should have required a clear statement from Congress that it intended FISA to displace the state secrets privilege. Bumatay would also have limited the interpretation of § 1806(f) such that its procedures would be triggered only by pretrial motions relating to the admissibility of evidence, rather than creating what the judge described as “an independent grant of authority” to force the government to comply with those procedures if a party has any claim relating to electronic surveillance, regardless of whether it was brought under FISA.

Bumatay wrote further that the decision seriously degraded the executive branch’s ability to protect national secrets, and upset the balance of power among co-equal branches of government by abrogating the state secrets privilege. “Secrecy, at least at times, is a necessary concomitant of the executive power,” he wrote. As such, limiting the state secrets privilege implicates separation of powers concerns: “the displacement of the state secrets privilege creates a tension between Congress and the Executive because we elevate a statute over a constitutionally based privilege.” The judge maintained that, under Reynolds, the state secrets privilege does not tolerate any disclosure, even only to the judge in camera and ex parte, if such disclosure can be avoided.

Conclusion

As noted above, the Ninth Circuit is the first federal appellate court to have addressed the issue of whether FISA’s § 1806(f) in camera and ex parte procedures, which provide a balance between protecting state secrets and allowing meritorious claims of unlawful government surveillance to proceed, displaced the common law state secrets privilege’s dismissal remedy. The Ninth Circuit answered this question in the affirmative. The U.S. Court of Appeals for the Fourth Circuit will soon address this question in a similar context in Wikimedia v. National Security Agency, in which plaintiffs allege unlawful electronic surveillance by the National Security Agency. While the district court found § 1806(f) inapplicable and dismissed the case on the basis of the state secrets privilege, the Wikimedia plaintiffs cite the Ninth Circuit’s decision in their case in support of their argument that § 1806(f) procedures displace the common law state secrets privilege’s dismissal remedy and allow for judicial review of the evidence they seek.

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