Tech Law Journal Daily E-Mail Alert
December 31, 2001, 9:00 AM ET, Alert No. 336.
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DC Circuit Upholds FCC in MCI v. FCC
12/28. The U.S. Court of Appeals (DCCir) issued its opinion in MCI WorldCom Network v. FCC. The Court of Appeals upheld an FCC order dismissing MCI's complaint that Bell Atlantic violated the terms of a pricing condition contained in the order approving the merger of Bell Atlantic and NYNEX. MCI should have filed its complaint with a state public utility commission. See also, PDF copy of opinion.
MCI filed a complaint with the FCC pursuant to 47 U.S.C. § 208 alleging that Bell Atlantic (now Verizon) violated the pricing requirement set forth by the FCC in its order approving the merger of Bell Atlantic and NYNEX Corporation. The FCC issued an order dismissing MCI's complaint, on the basis that the proper forum for MCI's complaint was the state public utility commissions, pursuant to 47 U.S.C. § 252.
MCI filed the present petition for review with the Court of Appeals. A unanimous three judge panel agreed with the FCC, and denied the petition for review. The Court wrote: "Given the presumption of validity and the high level of deference due to an agency in interpreting its own orders and regulations ... we cannot say that the FCC acted unreasonably in declining to enforce the Paragraph 6 condition of the Merger Order in a parallel and duplicative section 208 proceeding. MCI seeks no relief from the FCC that the state public utility commissions cannot grant in their capacity as arbitrators under section 252."
DC Circuit Rules in Teledesic Case
12/28. The U.S. Court of Appeals (DCCir) issued its opinion in Teledesic v. FCC, dismissing as moot challenges to FCC rules which the FCC revised after the filing of Teledesic's petition for review, and denying as meritless the remaining challenges. See also, PDF copy of opinion.
Teledesic is a Bellevue, Washington, based company that is building a global broadband communications network based on low earth orbit satellites. It states that it plans to deploy this "Internet in the Sky" service in 2005. It is a privately held company whose primary investors are McCaw, Bill Gates, Motorola, Saudi Prince Alwaleed Bin Talal, the Abu Dhabi Investment Company and Boeing.
Teledesic filed with the Court of Appeals a petition for review of an FCC order governing the reallocation of a band of radio spectrum previously shared by satellite and traditional terrestrial spectrum users. Teledesic objected to the new rules requiring satellite operators to pay the relocation costs incurred by terrestrial operators during the initial reallocation period. However, the FCC revised its rules just after the filing of the petition for review. The Appeals Court held two issues on appeal are rended moot by the rule revisions. It found other issues to be meritless.
10th Circuit Affirms Conviction Based on Laptop Search
12/28. The U.S. Court of Appeals (10thCir)." issued its opinion in U.S. v. Russell Walser, a criminal search and seizure case involving a laptop. The Appeals Court upheld warrant based searches of a laptop, and a sentencing condition prohibiting use of the Internet without permission of the probation office.
Background. A motel manager reported to police that Walser had drugs in motel room occupied by him and another person. Police obtained a search warrant that covered "records, and/or receipts, written or electronically stored, ... that show or tend to show ownership or control of the premises and other property used to facilitate the distribution and delivery [of] controlled substances". Police then searched the room, found Walser's laptop, and searched it for drug related records. However, police also opened a single AVI file, and found child pormography. Police then obtained a second warrant specifically addressing evidence of child pormography. The second search found further illegal images. Walser was charged with possession of child pormography.
District Court. The U.S. District Court (DWyo) denied Walser's motion to suppress evidence collected from his laptop by police officers. Walser then plead guilty. The Court imposed a sentencing condition that prohibits him from using the Internet without prior permission from the U.S. Probation Office. He appealed both the denial of the motion to suppress, and the sentencing condition.
Appeals Court. The Appeals Court affirmed on both issues. It wrote that "The advent of the electronic age and, as we see in this case, the development of desktop computers that are able to hold the equivalent of a library's worth of information, go beyond the established categories of constitutional doctrine. Analogies to other physical objects, such as dressers or file cabinets, do not often inform the situations we now face as judges when applying search and seizure law. ... officers conducting searches (and the magistrates issuing warrants for those searches) cannot simply conduct a sweeping, comprehensive search of a computer's hard drive. Because computers can hold so much information touching on many different areas of a person's life, there is a greater potential for the ``intermingling´´ of documents and a consequent invasion of privacy when police execute a search for evidence on a computer."
The Court found that opening a single AVI, or other graphics file, during a search for records of drug transactions is permissible. However, the Court suggested that had the police searched through more graphics files, without a warrant covering graphics files, this would have violated the Fourth Amendment rights of the defendant.
The prosecution had also argued that "because computer files can be re-labeled to disguise their contents, an agent is free to open any file in order to determine its contents and that therefore, opening the AVI file did not exceed the scope of the warrant." The Court left this argument "for another day", since it affirmed on other grounds.
Court Holds Computer Search Can Violate Both 1st and 4th Amendment Civil Rights
12/28. The U.S. Court of Appeals (4thCir) issued its opinion in Trulock v. Freeh, holding that Notra Trulock may proceed with his civil suit for damages against FBI employees for searching password protected files on a computer in violation of his constitutional rights. All three members of the appeal panel agreed that Trulock sufficiently plead a claim for violation of his First Amendment rights, based upon retaliation for publication of a news article critical of the government. Two judges wrote that Trulock could not proceed with a second claim for violation of his Fourth Amendment rights. They wrote that he had sufficiently plead a violation of the Fourth Amendment, but since the case law on computer searches was not clear on this point at the time of the search, this claim may not proceed. One judge would have let this claim proceed also.
Los Alamos - Wen Ho Lee Affair. This case arises out of the saga of security breaches and bungled investigations and prosecutions involving nuclear weapons technology held by the U.S. Department of Energy (DOE). Much of the media coverage and Congressional investigations focused on the Los Alamos Nuclear Laboratory, and Wen Ho Lee. One of the plaintiffs, Notra Trulock, was the DOE's Director of the Office of Intelligence from 1994 to 1998, and Director of the DOE's Office of Counterintelligence from 1995 to 1998.
Whistleblower. Trulock was the "whistle blower" in this affair. He had uncovered evidence of espionage at the DOE. However, the DOE, FBI, and Clinton administration did not take significant action upon his warnings. When the matter became a public scandal in 1998, he appeared before Congressional committees, and spoke with journalists. He states that he was demoted, and then forced out of the DOE.
FBI Retaliation. The complaint states that the National Review (NR) published an article that circulated in early July 2000 that contained excerpts from a longer article written by Trulock. The complaint states that the Trulock's article contained "his criticisms of the Clinton Gore White House, the DOE, the FBI and the CIA for their mishandling and cover-up of the Chinese spy threat, as well as the compromise of national security at U.S. nuclear weapons laboratories, including Los Alamos." (Neither Trulock's original article, nor the NR article containing excerpts, is now in the NR web site; however, this article about the article is.) On July 14, the FBI retaliated.
The Computer. The complaint states that one Linda Conrad and Trulock shared a townhouse, which Conrad owned. The two also shared a computer, but each maintained separate, password protected files on the hard drive. The computer was located in a bedroom. No warrant had been issued for either a search of the house, or the computer. Conrad signed a consent to search. She states that it was coerced. Trulock consented to nothing. The FBI searched the computer for about 90 minutes. The FBI then confiscated the hard drive.
District Court Complaint. Trulock and Conrad promptly filed a complaint in U.S. District Court (EDVa) against various FBI employees, in their individual capacities, alleging violation of their First Amendment and Fourth Amendment rights. The defendants range from then FBI Director Louis Freeh down to the FBI technician who searched the computer in the bedroom. The complaint is based on Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), which held that an individual may bring a civil suit against a federal officer for damages stemming from a constitutional violation.
The complaint contains two counts. Count one alleges violation of the Fourth Amendment. It alleges that the Defendants violated Conrad's rights by seizing her during the interview, violated Conrad and Trulock's rights by coercing Conrad's consent to search their home, and that Conrad's consent, even if voluntary, was insufficient to permit the search of Trulock's private computer files. Count two alleges violation of the First Amendment. It alleges that the FBI conducted the search and seizure in direct retaliation for the unflattering magazine article.
District Court Ruling. The District Court, Judge Albert Bryan presiding, dismissed the complaint prior to pre-trial discovery for failure to state a claim upon which can be granted, pursuant to FRCP 12(b)(6).
Appeals Court. Judge Benson Legg wrote the opinion of the Court, in which Judge Roger Gregory joined, reversing the dismissal of the complaint as to the First Amendment count. Judge Blane Michael concurred on the First Amendment count reversal, but dissented regarding the majority's affirmance of the dismissal as to the Fourth Amendment count.
Fourth Amendment Claim. The Appeals Court first wrote that there was no Fourth Amendment violation based on allegations of coerced consent; the interrogation was not custodial, and Conrad consented to the search. However, the Court continued that "Conrad lacked authority to consent to the search of Trulock's files. Conrad and Trulock both used a computer located in Conrad's bedroom and each had joint access to the hard drive. Conrad and Trulock, however, protected their personal files with passwords; Conrad did not have access to Trulock's passwords. Although Conrad had authority to consent to a general search of the computer, her authority did not extend to Trulock's password protected files."
The Court reasoned that "Consent to search in the absence of a warrant may, in some circumstances, be given by a person other than the target of the search." However, "the third party must have authority to consent to the search." It continued that "Authority to consent originates not from a mere property interest, but instead from "mutual use of the property by persons generally having joint access or control for most purposes, so that it is reasonable to recognize that any of the co-inhabitants has the right to permit the inspection in his own right and that others have assumed the risk that one of their number might permit the common area to be searched." The Court cited U.S. v. Matlock, 415 U.S. 164 (1974), as authority.
However, having concluded that under the Fourth Amendment the FBI lacked authority to search Trulock's files, the Court nevertheless upheld the dismissal of his Fourth Amendment claim. The Court stated that the case law on this issue was not clear in July 2000, when the search was conducted. It wrote that "the Defendants are entitled to immunity because a reasonable officer in their position would not have known that the search would violate clearly established law".
Now, the law is clear. Trulock cannot proceed with his Fourth Amendment claim for damages, but future similarly situated plaintiffs will be able to pursue Fourth Amendment Bivens claims.
First Amendment Claim. The Appeals Court wrote that "we find that Trulock has alleged sufficient facts in support of his retaliation claim to withstand a motion to dismiss and proceed to discovery. The complaint contains facts that bolster Trulock's claim of improper motive. First, the timing of the search raises an inference of retaliatory motive. ... The article was published in early July 2000 and the search occurred on July 14, 2000. The article chastised the White House, the CIA, the DOE, and the FBI, the very agency that executed the search. According to the Plaintiffs, a criminal referral is necessary for the FBI to commence an official investigation. The complaint alleges, however, that the FBI initiated the investigation without receiving a criminal referral from the DOE. ... All of these factors, when viewed together and accepted as true, raise a reasonable inference that the interrogation and search were retaliatory."
The Court also found that the defendants lacked qualified immunity from a First Amendment Bivens claim. The government argued that the NR "did not enjoy First Amendment protection" and hence no "reasonable officer would have known that retaliatory conduct was impermissible". The Court rejected this argument with brevity.
Dissent. Judge Michael dissented in part. He wrote that "The owner of password protected computer files has a clear expectation of privacy in those files that is protected by the Fourth Amendment. Another person who does not know the passwords has no authority to consent to a search of these private files because he lacks the ``joint access or control´´ required by U.S. v. Matlock ... This should have been abundantly clear to any reasonable law enforcement officer operating in the year 2000. I therefore respectfully dissent ..."
FCC Allows E-Rate Funds to Support Non Educational Uses
12/28. The FCC published a notice in the Federal Register that it adopted an Order [PDF] on November 29, 2001, that permits schools and libraries in the State of Alaska that receive e-rate subsidies to allow their facilities to be used by the general public to receive telecommunications and Internet services. This order took effect on December 28, 2001.
The statutory section which serves as the basis for the e-rate program applies to "schools, and libraries for educational purposes". It states, in part: "Telecommunications services for certain providers ... All telecommunications carriers serving a geographic area shall, upon a bona fide request for any of its services that are within the definition of universal service under subsection (c)(3) of this section, provide such services to elementary schools, secondary schools, and libraries for educational purposes at rates less than the amounts charged for similar services to other parties." See, 47 U.S.C. § 254(h)(1)(B).
This order applies to "rural remote communities in Alaska ... when the services are not in use by the schools and libraries for educational purposes." [Order, at ¶ 6.] The order further states that it is limited "to communities in Alaska where there is no local or toll-free dial-up Internet access". [Order, at ¶ 13.]
See, Federal Register, December 28, 2001, Vol. 66, No. 249, at Pages 67112 - 67114. This is FCC 01-350 in CC Docket No. 96-45.
Monday, Dec 31
Deadline to submit reply comments with the Copyright Office (CO) regarding royalty payments for retransmission of over the air broadcast signals. The CO notice "directs all claimants to royalty fees collected under the section 119 statutory license in 2000 to submit comments as to whether a Phase I or Phase II controversy exists as to the distribution of those fees, and a Notice of Intention to Participate in a royalty distribution proceeding." See, 17 U.S.C. § 119. See also, Federal Register, October 30, 2001, Vol. 66, No. 210, at Pages 54789 - 54791.
Deadline to submit comments to the Department of Justice's Bureau of Prisons (BOP) regarding its interim rule permitting monitoring of communications by detainees of the Bureau of Prisons. This interim rule provides that the Attorney General may order the monitoring of attorney client communications of detainees whom he suspects are using those communications to further a terrorist act. See, notice in Federal Register, October 31, 2001, Vol. 66, No. 211, at Pages 55061 - 55066.
Tuesday, Jan 1
New Years Day. Federal offices and Courts will be closed. The TLJ Daily E-Mail Alert will not publish.
Wednesday, Jan 2
The final free copies of the TLJ Daily E-Mail Alert will be sent. See, subscription information page.
Friday, Jan 4
10:00 AM - 1:00 PM. The FCC's Network Reliability and Interoperability Council will hold a meeting. See, notice in Federal Register, November 13, 2001, Vol. 66, No. 219, at Page 56823. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th St. SW., Washington DC.
12:15 PM. The Federal Communications Bar Association's Wireless Telecommunications Practice Committee will host a luncheon. The speakers will be advisors to the FCC Commissioners: Peter Tenhula (Powell), Bryan Tramont (Abernathy), Paul Margie (Copps), and Monica Desai (Martin). The price to attend is $15.00. RSVP to Wendy Parish at Location: Sidley Austin Brown & Wood, 1501 K Street, NW Conference Room 6-E, Washington DC.
Deadline to submit oppositions and comments to the FCC in response to Cingular Wireless', Nextel's, and Verizon Wireless' petitions for reconsideration of certain provisions of the FCC's October 12 orders addressing and conditionally approving requests for waivers and approval of revised deployment plans for wireless Enhanced 911 (E911) services. See, FCC Notice. (CC Docket No. 94-102.)
More Court Opinions
12/28. The U.S. Court of Appeals (5thCir) issued its opinion in Compaq v. IRS, a tax case. Compaq engaged in a foreign stock transaction involving the purchase and resale of American Depository Receipts (ADRs). The U.S. Tax Court held that because the ADR transaction lacked economic substance, the transaction should be disregarded for federal income tax purposes. The Appeals Court reversed.
12/28. The California Court of Appeal (4/3) issued its opinion [PDF] in Charles Burns v. Nature's Best, a case regarding application of the definition of "confidential communication" under § 632 of California Privacy Act in a civil suit arising out of the audio recording of a telephone conversation conducted with a speakerphone without the consent of the plaintiff. The plaintiff prevailed in the trial court. The Court of Appeal reversed.
More News
12/28. President Bush signed into law HR 2883, the Intelligence Authorization Act for Fiscal Year 2002. See, signing statement by Bush.
12/28. President Bush signed into law S 1438, the National Defense Authorization Act for Fiscal Year 2002. See, signing statement by Bush.
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