Judge In AT&T Merger Ruling Had Zero Understanding Of The Markets AT&T Now Dominates

from the net-neutraliwha? dept

So, we already discussed how the Judge that let the AT&T merger proceed showed a comically narrow reading of the media and telecom markets when he approved AT&T's $86 billion Time Warner merger without a single condition. At no point in his 172-page ruling (pdf) did U.S. District Court Judge Richard Leon even utter the phrase "net neutrality," showing a complete failure to understand how AT&T intends to use regulatory capture, vertical media integration (ownership of must-have content like HBO) and its stranglehold over broadband markets in synergistically anti-competitive ways.

Leon focused almost exclusively on bickering between AT&T and DOJ-hired economists over whether the merger would result in higher rates for consumers (which, if you've watched AT&T do business should be a foregone conclusion). But because U.S. antitrust law is already ill-equipped to help police these kinds of vertical integrations, DOJ economists were locked into very specific confines of economic theory, even if it should be obvious to everybody and their uncle that AT&T will use its ownership of CNN, HBO, and other media properties to jack up licensing costs for streaming competitors.

Of course higher costs for licensing (which in turn means higher costs for consumers) is just one way AT&T intends to leverage its greater scale anti-competitively. It also couldn't be more clear that with net neutrality rules out of the way, AT&T has an absolute arsenal of creatively anti-competitive tools at their disposal, whether that means hijinks at interconnection points (something else Leon likely has never heard of), to the use of usage caps to "zero rate" AT&T's own content, while still penalizing competitors like Netflix.

Amusingly, even many of the Wall Street analysts that have routinely cheered on this kind of behavior were quick to point out how Leon appears entirely oblivious to these additional layers of potential pitfalls. For example Wall Street analyst Craig Moffett, who once heralded broadband usage caps as the pinnacle of modern technological achievement, was quick to point out in a research note to clients that Leon had completely missed the forest for the trees:

"The DOJ focused entirely on the risks that would arise from joint ownership of DirecTV and Turner’s cable networks (recall that they even proposed divestiture of one or the other as a preemptive remedy)," said Moffett. "And, therefore, so did Judge [Richard] Leon. Neither ever even raised the issue of whether there might be a more material competitive harm arising from the combination of Turner programming and an ISP."

"The theoretical harm here is obvious," he says. "A wireless or wired ISP, now unfettered by net neutrality regulations, could, in theory, advantage its own content over the content of others, either by zero rating (that is, not counting owned-and-operated content against monthly data caps), by prioritizing (the old fast lanes/slow lanes chestnut), or even by adopting a regime of content exclusivity."

Many analysts believe Leon's myopic ruling set precedent that will result in the DOJ being less likely to police future, major deals in this space, whether it's T-Mobile's competition and job eroding merger with Sprint, or Comcast's latest $65 billion effort to acquire Fox. This slow but steady consolidation in both the media and telecom space will, slowly but surely, mean less overall competition in broadband, fewer diverse options in terms of local reporting, and higher rates for everybody in the chain.

ISPs (and their ocean of dollar per hollar policy folks) have been immensely successful in claiming that ISP oversight must be stripped away if ISPs are to compete on a "level playing field" with Silicon Valley in the ad and streaming wars to come. But as some were quick to note, this intentionally ignores ISPs hold a natural monopoly over the broadband last mile, making the regulatory approach to dealing with ISPs notably different than companies like Facebook (which you can, with a few minor exceptions, choose not to use):

"But neither Facebook nor Google owns the ultimate distribution layer of the consumer connection to the internet. They aren’t the world’s largest telecom company. Neither is Netflix or Amazon or any of the other companies AT&T and Time Warner are afraid of. (Yes, I know Google owns Google Fiber, but that has been more failure than success.)

Tech companies might have vertically integrated the creation and production of content with consumer-facing apps and services, but they all depend on internet connections to reach their audiences. And those connections are increasingly wireless. AT&T and Time Warner aren’t trying to catch up to Netflix by merging; they’re trying to step ahead of them in line by marrying Time Warner’s content to AT&T’s network."

Again, this idea that natural broadband monopolies require different and tougher rules because they're different is something ISPs like to play dumb about. But again, the idea that the domination of media and broadband in concert could be a real problem (especially for startups and small businesses) isn't something Leon bothers to seriously think about at any point in his 172 page ruling. Despite the fact that the obvious harm caused by letting a handful of companies dominate the pipes to the home and the content running over it is becoming painfully apparent in the Comcast era.

As companies like AT&T, Comcast and Verizon beef up with media acquisitions in the hopes of challenging Google and Facebook in the media space, the rules governing the potential downsides of these deals are being routinely stripped away. Whether that's the death of net neutrality (which also gutted the lion's share of FCC authority over ISPs) or the steady assault on decades-old media consolidation rules, for too many are dumbly looking the other direction as these companies try and build a decidedly dystopian broadband and media future.

Filed Under: antitrust, competition, consumer welfare, doj, merger, net neutrality, richard leon, zero rating
Companies: at&t

AT&T Defeats DOJ In Merger Fight, Opening The Door To Some Major Competitive Headaches

from the what-could-possibly-go-wrong dept

AT&T has defeated the DOJ in a court battle over whether or not the company will be allowed to acquire Time Warner for $86 billion.

In a ruling (pdf), U.S. District Court Judge Richard Leon stated that the government failed to make its case that the merger would harm AT&T's competitors, most of which are now trying to keep pace in the streaming video space. Consumer advocates have routinely warned that AT&T will use its greater leverage to make must-have content (like Time Warner owned CNN or HBO) significantly more costly for companies hoping to compete with AT&T's own TV services, including its newish streaming video effort, DirecTV Now.

That a company with a thirty-year history of anti-competitive behavior will likely use this greater leverage to behave badly shouldn't have been a particularly hard case to make, suggesting that DOJ lawyers may have flubbed key components of its case. The DOJ sued to thwart the deal last November, and while the agency claimed it was to protect consumers, the incongruity with other Trump administration consumer policies (like, well, everything) have fueled speculation that Trump's disdain for Time Warner owned CNN, or his close relationship with Rupert Murdoch may have colored the DOJ's decision to sue.

It's an indisputable and massive win for AT&T, and the DOJ's first antitrust court loss since 2004. Leon didn't just kill the lawsuit, he didn't offer any conditions to mitigate potential anti-competitive problems, and largely urged the DOJ not to appeal. AT&T, as you might expect, was thrilled with the court's failure to block its latest megamerger:

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government’s lawsuit to block our merger with Time Warner. We thank the Court for its thorough and timely examination of the evidence, and we compliment our colleagues at the Department of Justice on their dedicated representation of the government. We look forward to closing the merger on or before June 20 so we can begin to give consumers video entertainment that is more affordable, mobile, and innovative."

Anybody that has witnessed AT&T's versions of "affordable" and "innovative" likely isn't to buy that claim. This is, after all, a company that thought it would be a good idea to charge consumers more money just to protect their own privacy. It's also the same company that has been repeatedly dinged by government for either ripping off its own customers, or turning a blind eye while all manner of others did. Not surprisingly, more consumer-oriented folks like former FCC staffer and consumer advocate Gigi Sohn had a decidedly different take on AT&T's court win:

"Big media conglomerates are the winners and consumers are the losers with Judge Leon’s decision. Merging AT&T, one of the largest cable, satellite and mobile broadband companies with Time Warner will lead to higher prices, fewer choices and perhaps more importantly, fewer voices. Coupled with the demise of the 2015 net neutrality rules yesterday, AT&T will be free to favor Time Warner content over its cable and its fixed and mobile broadband networks."

Numerous companies were waiting on the AT&T decision before pursuing their own, previously-unthinkable merger ambitions. Comcast, for example, has stated the company was holding off on making its $60 billion offer for Fox's remaining assets until it saw the outcome of the case. Sprint and T-Mobile are also considering a merger that's likely to reduce competition in wireless and kill tends of thousands of sector jobs.

It's not just the AT&T merger that's problematic. The wave of major consolidation this loss will trigger, combined with the death of net neutrality protections opens the door to an absolute ocean of bad behavior by companies that have already clearly documented they'll stop at nothing to keep real competition at bay. And while the rise of streaming competitors crafting original content may mitigate some of this, you'd have to be pretty naive to think AT&T's stranglehold over broadband and media, combined with Trump era regulatory capture ends particularly well for the consumers and small businesses caught in its wake.

Filed Under: antitrust, competition, consolidation, doj, merger, richard leon
Companies: at&t, time warner

Judge Tosses Long-Running Section 215 Surveillance Lawsuit

from the it's-time-for-the-Supreme-Court-to-stop-dodging-difficult-surveillance-quest dept

A federal judge has issued the final word in one long-running dragnet surveillance suit. The lawsuit, filed by Larry Klayman immediately after the first Snowden leak, alleged the Section 215 phone records program -- targeting Verizon Business customers according to the leaked document -- was unconstitutional. DC district court judge Richard Leon agreed, issuing an injunction in December 2013 demanding a cessation of the Section 215 dragnet.

This order was immediately stayed to allow the government to appeal (and to continue harvesting domestic phone records in bulk). The Appeals Court disagreed with Leon, sending the case back for another ruling. It didn't change anything at the lower level. Judge Leon still found the program unconstitutional and ordered the NSA to stop collecting the phone records of the two named plaintiffs.

Shortly after this ruling, the USA Freedom Act ended the NSA's bulk collection of phone records, largely rendering the lawsuit moot. After another round of appeals, the government asked Judge Leon to dismiss the case entirely. Judge Leon has done so, agreeing with the government that the implementation of the USA Freedom Act prevents it from collecting phone records in bulk and brings it in line with the injunction previously issued by Leon. The plaintiffs were hoping a round of discovery would produce records substantiating their claims of warrantless surveillance of the single named client. Judge Leon has denied additional requests by the plaintiffs and dismissed [PDF] the case with prejudice.

[E]ven if plaintiffs were able to establish -- through jurisdictional discovery -- that the NSA had, in fact, collected their telephony metadata, they still would not be able to overcome the jurisdictional defect in this case. Because bulk collection under Section 215 is now prohibited by statute, plaintiffs' claims for injunctive relief against bulk collection are moot, regardless of whether the Government actually collected and queried plaintiffs' telephony metadata pursuant to the Section 215 program in the past.

The decision closes with Judge Leon expressing his hope the Supreme Court might step in and address the Third Party Doctrine directly and more closely examine the "expectation of privacy" concept in the context of today's communication methods. (This is why the upcoming Carpenter case -- dealing with warrantless collection of historical cell site information -- bears watching.)

While the zeal and vigilance with which plaintiffs have sought to protect our Constitutional rights is indeed laudable, this Court, in the final analysis, has no choice but to dismiss these cases for plaintiffs' failure to demonstrate the necessary jurisdiction to proceed. I do so today, however, well aware that I will not be the last District Judge who will be required to determine the appropriate balance between our national security and privacy interests during this never-ending war on terror. Hopefully by the time these issues are next joined, our Supreme Court will have had the opportunity to provide us with further guidance on the parameters of our privacy interests in this era of ever-increasing electronic communication. If not, concerned citizens such as these will continue to shoulder the heavy yoke that vigilance to our Constitutional liberties surely requires.

Filed Under: 4th amendment, larry klayman, mass surveillance, nsa, richard leon, section 215, surveillance

Appeals Court Says NSA Can Keep Trampling 4th Amendment With Phone Surveillance Program For Now

from the keep-going-guys dept

This is hardly a surprise, but the DC Appeals Court has issued a stay on Judge Richard Leon's ruling from earlier this week that the NSA's bulk phone record collection program was unconstitutional. This is the same appeals court that overturned Leon's earlier ruling finding the program unconstitutional. This time, as we noted, Judge Leon refused to grant the government a stay, noting that the DC Circuit had taken its sweet time in actually issuing a ruling on the appeal -- and the program is set to end in a couple weeks anyway. Also, Leon didn't order the entire program shut down, but just that the NSA stop keeping the records of the plaintiffs who were customers of Verizon Business Network Services (J.J. Little and J.J. Little & Associates).

Of course, the DOJ ran to the appeals court, claiming (among other things) that their system couldn't stop collecting the metadata of those individual entities without shutting down the whole program and putting us all at risk of TEH TERRRORISTS!!!!!. Of course, in the alternative, it argued that J.J. Little still shouldn't have standing because there's no proof that Verizon Business Network Services (VBNS) is still a part of the bulk collection program. As Marcy Wheeler pointed out, these arguments are nonsensical. First, the system clearly has the capability to remove certain indicators, as the government has previously admitted it had to leave out things like pizza parlors that mucked up the connection data. Second, it's bizarre to argue that taking this one number out would let the terrorists win... while at the same time arguing that maybe the entire VBNS no longer participates in the program.

Either way, the appeals court wasted no time issuing a stay with basically no explanation other than "to give the court sufficient opportunity to consider the merits of the motion for a stay." Of course it says it's not a motion on the merits -- and it's not -- but given that the program is dead in a couple weeks anyway, it doesn't much matter one way or the other. Still, both sides have been asked to file additional arguments over the next few days.

Filed Under: 215, 4th amendment, dc circuit, jj little, larry klayman, nsa, richard leon, surveillance

Judge Again Says NSA Phone Records Program Is Unconstitutional; Orders NSA To Stop Collecting Phone Records Of Plaintiffs

from the here-we-go-again dept

Back in December of 2013, DC district court judge Richard Leon shocked many by declaring the NSA's bulk collection of phone records under Section 215 of the PATRIOT Act to be unconstitutional. Just a few months ago, the DC circuit appeals court overturned that ruling and sent it back to the lower court, saying that the plaintiff, Larry Klayman, failed to prove he had standing to bring the lawsuit -- mainly because Snowden only had revealed that the NSA was scooping up all Verizon Business Network phone records, and Klayman was a Verizon Wireless customer. That it had since been revealed that the NSA also got Verizon Wireless records was basically ignored.

As we noted in September, Judge Leon made it pretty clear that he still believed the program was unconstitutional, and pushed Klayman to get the process moving so he could rule. Klayman was able to bring new plaintiffs (J.J. Little and J.J. Little & Associates)) into the case who were Verizon Business Network Services subscribers to take that issue out of play. And now that's happened, and Leon has, once again declared the program unconstitutional and ordered an injunction to have it stopped.

With the Government's authority to operate the Bulk Telephony Metadata Program quickly coming to an end, this case is perhaps the last chapter in the Judiciary's evaluation of this particular Program's compatibility with the Constitution. It will not, however, be the last chapter in the ongoing struggle to balance privacy rights and national security interests under our Constitution in an age of evolving technological wizardry. Although this Court appreciates the zealousness with which the Government seeks to protect the citizens of our Nation, that same Government bears just as great a responsibility to protect the individual liberties of those very citizens.

Thus, for all the reasons stated herein, I will grant plaintiffs J.J. Little and J.J. Little & Associates' requests for an injunction and enter an order consistent with this Opinion that (1) bars the Government from collecting, as part of the NSA's Bulk Telephony Metadata Program, any telephone metadata associated with these plaintiffs' Verizon Business Network Services accounts and (2) requires the Government to segregate any such metadata in its possession that has already been collected.

He did not grant the same order for Klayman or other plaintiffs who were not customers of Verizon Business Services, in order to avoid the standing question. Perhaps more interesting is that, unlike last time, he did not give the government an immediate stay on this ruling, and you can tell he's a bit annoyed about what happened last time:

In my December 2013 Opinion, I stayed my order pending appeal in light of the national security interests at stake and the novelty of the constitutional issues raised. I did so with the optimistic hope that the appeals process would move expeditiously. However, because it has been almost two years since I first found that the NSA's Bulk Telephony Metadata Program likely violates the Constitution and because the loss of constitutional freedoms for even one day is a significant harm... I will not do so today.

Good for him.

As noted above, Judge Leon finds standing just for the two new plaintiffs, basically accepting the appeals court's ruling earlier that Klayman and other plaintiffs failed to "adequately" sustain their claims of harm. He rejects some silly defenses from the DOJ, including the claim that we no longer know if Verizon Business Network Services is a part of the program. As Leon says "it defies common sense for defendants to argue, as they apparently do that the Government has chosen to omit from this breathtakingly broad metadata collection Program a provider that the Government surveilled in the past and that, presumably, has the infrastructure to continue assisting in that surveillance. In fact it would make no sense whatsoever for the Government to use all available tools except VBNS call data to accomplish its putative goals."

Then onto the important stuff: the Fourth Amendment. Leon tackled much of that back in his 2013 opinion, but there's more here, noting that the problem is still in place, even after the USA Freedom Act passed:

In my December 2013 Opinion, I explained at length why both the indiscriminate bulk collection of telephony metadata and the analysis of that data each separately constitute a search within the meaning of the Fourth Amendment.... Neither the recent changes in the operation of the Program, nor the passage of the USA FREEDOM Act, has done anything to alter this analysis. The fact remains that the indiscriminate, daily bulk collection, long-term retention, and analysis of telephony metadata almost certainly violates a person's reasonable expectation of privacy.

Then there's the question of whether these collections count as "unreasonable searches" and Judge Leon finds that they do. In part, he tosses out the usual reliance on Smith v. Maryland by the government, which says that if you give data over to a third party, you no longer have any privacy rights over it (the so-called "third party doctrine"). The ruling compares it to the diminished privacy rights you have in going through airport security:

Notably, Americans know that airports are discrete areas in which certain rights otherwise enjoyed are forfeited.... It is their choice to enter that space and, in so doing, to check certain rights at the door. Not so with cellphones. As already described, cellphones have become a constant presence in people's lives. While plaintiffs' privacy interests in their aggregated metadata may be somewhat diminished by the fact that it is held by third-party service providers, this is a necessary reality if one is to use a cellphone at all, and it is, therefore, simply not analogous to the context of voluntarily entering an airport. In this case, plaintiffs have asserted that the searches were a substantial intrusion on their privacy, and I have no reason to doubt that, nor to find that their privacy expectations should have been diminished given the context. Rather, I conclude that plaintiffs' privacy interests are robust.

Judge Leon also notes that the public really had no idea this was happening, until recently:

Finally, far from Americans being put on notice of the Bulk Telephony Metadata Program such that they could choose to avoid it, the Program was, and continues to be, shrouded in secrecy. This may, of course, be practically necessary for the Program to be effective, but it nevertheless increases the level of the privacy intrusion.

Judge Leon then looks to see if, maybe, just maybe the government can justify this intrusion by showing that these searches were necessary to stop terrorist attacks, but again, finds no evidence to support that.

To date, the Government has still not cited a single instance in which telephone metadata analysis actually stopped an imminent attack, or otherwise aided the Government in achieving any time-sensitive objective. Although the Government is not required to adduce a specific threat in order to demonstrate that a "special need" exists, providing this Court with examples of the Program's success would certainly strengthen the Government's argument regarding the Program's efficacy. This is especially true given that the Program is not designed for detection and deterrence like most other programs upheld under the "special needs" doctrine. Indeed, most warrantless searches upheld under the "special needs" doctrine boast deterrence as a substantial Governmental interest.

He also rejects the idea that the USA Freedom Act shows that Congress is okay with the program and that proves that the NSA had the "special needs" necessary to keep the program running. And he clearly thinks this is a dumb argument, even saying a sarcastic "Please!" in his response:

....the Government makes the bootstrap argument that the enactment of the USA FREEDOM Act confirms the importance of this Program to meeting the Government's special needs, and suggests that this Court should defer to that judgment. Please! I recognize that my duty to evaluate the efficacy of this Program is "not meant to transfer from politically accountable officials to the courts the decision as to which among reasonable alternative law enforcement techniques should be employed to deal with a serious public danger."... Nonetheless, while "the choice among such reasonable alternatives remains with the governmental officials," I must still determine whether the Program is reasonably effective in accomplishing its goals, even if not optimally so.... This is a conclusion I simply cannot reach given the continuing lack of evidence that the Program has ever actually been successful as a means of conducting time-sensitive investigations in cases involving imminent threats of terrorism.

From there he goes on to detail why letting the program continue to spy on the plaintiffs would create significant harm and rejects the idea that the government can't respond quickly enough, noting that it's had 22 months since his original ruling to figure out how to handle this.

Of course, again, the ruling only applies to the bulk phone records of two plaintiffs -- and the entire program is set to end at the end of this month anyway, but it is still an important victory for the 4th Amendment and against NSA bulk surveillance.

Filed Under: 4th amendment, bulk records, doj, j.j. little, larry klayman, mass surveillance, metadata, nsa, richard leon, standing

District Court Judge Worried About NSA Running Out The Clock On Phone Records... While Appeals Court Happy To Let Clock Run

from the different-approaches dept

On Wednesday, there were separate hearings in two of the most watched cases around the NSA bulk phone records collections. First up, was a hearing before district judge Richard Leon, who was the first judge to find the NSA's bulk collection of phone records under Section 215 of the PATRIOT Act unconstitutional. As you may have heard, last week, the DC circuit appeals court struck down that ruling, focusing solely on the question of standing, saying that the plaintiff, Larry Klayman, had failed to prove that he had standing, since he used Verizon Wireless, and the documents released by Ed Snowden only showed that Verizon Business Services turned over phone records.

Of course, in a bit of a twist, while it was true at the time of the original lawsuit that there was not public information confirming Verizon Wireless participated in the program (even though many suspected it), since then the government has released documents proving that Verizon Wireless was part of the collection program. Back in court, Judge Leon made it clear he still believes that the program itself is unconstitutional (and that the appeals court did not rule on that issue, but just the standing issue). He's also well aware that under the USA Freedom Act, the bulk collection under the PATRIOT Act is about to end, so he spent the time in court suggesting strongly to Klayman that he needs to act quickly if the case is to have any meaning at all -- while also telling the DOJ he won't let them just run out the clock. The DOJ is clearly relying on the ending of this particular kind of collection under the USA Freedom Act to suggest the court has nothing to rule on, but Judge Leon isn't buying it:

Justice Department lawyer Rodney Patton noted that the wind-down of the NSA program follows Congress's passage in June of the USA Freedom Act, which ends the phone metadata collection program but also extended for about six months the legal authority under which the g was set up.

"The political branches came to a compromise," Patton said. "This court should consider what the political branches decided to do.....and not consider the extraordinary remedy of [a new] injunction."

After Patton spoke, Leon leaned in and pointed for emphasis as he warned against foot-dragging by the government. "I am not going to allow, if I can help it, any misimpression or impression that the government is trying to run out the clock here," the judge said. "I'm not going to tolerate that."

There are some procedural issues in the way, however, starting with the fact that the appeals court has not officially released the appeal to send the case back to the district court, so Judge Leon hinted very strongly, while claiming he wasn't instructing Klayman what to do, that Klayman needs to get the appeals court to officially give the case back. But he's also clear that he still believes the program is unconstitutional:

"This court believes there are millions and millions of Americans whose constitutional rights have been and are being violated, but the window...for action is very small....It's time to move."

Meanwhile, over in the 2nd Circuit appeals court -- the one appeals court to rule that this same program was unconstitutional, the ACLU has been working hard to demand that the program be shut down now even during the so-called "transition" period from the PATRIOT Act to the USA Freedom Act. The ACLU is arguing that if the program is unconstitutional, then it needs to be stopped, now, not during some "transition." Unfortunately, it appears that the court is more skeptical on that one, and willing to let the government "run out the clock." From the Guardian:

“The harm we’re suffering has no expiration date,” Abdo argued, contending that the continued surveillance, which expires on 28 November under the new surveillance regime Congress passed in June, has a chilling effect on the civil liberties group’s work.

But three judges on the second circuit court of appeals signaled a reluctance to intercede in the NSA’s ongoing surveillance, which is ostensibly designed to smooth a pathway toward letting the NSA and other federal agencies obtain vast amounts of US call records from telecoms pursuant to a judicial order.

“One would think you’re on the losing end of a civil rights catastrophe, but you’ve made tremendous progress on your point of view,” said Judge Robert D Sack, who referenced a famous Vietnam-era quote to ask if the injunction would be a moot point after November: “Why don’t you declare victory and withdraw?”

Judge Sack also compared the situation to ordering a plane to land mid-flight, rather than complete its descent. Given all that, it seems unlikely that the court will order the mass surveillance be stopped prior to the official end date set by the USA Freedom Act. And, all this means is that it's likely the government will end up with basically no punishment for having unconstitutionally spied on Americans for years.

Filed Under: 2nd circuit, doj, nsa, patriot act, richard leon, section 215, surveillance, usa freedom act

Here's Hoping Judge Ignores The Nutty Plaintiff With An Important Case On NSA Surveillance Of Business Records

from the hopefully,-hopefully dept

Many of us were excited, 11 months ago, when District Court Judge Richard Leon ruled that the NSA's bulk collection of phone metadata was unconstitutional. This was the first program revealed via the documents from Ed Snowden, and it involved the US using Section 215 of the PATRIOT Act, approved by the FISA Court with little explanation (until much later) to say that it's okay to request all phone records from Verizon. What had been often mentioned as a brief aside, is the fact that the plaintiff in the case, Larry Klayman is a bit of a conspiracy-theorist nutjob.

That came out loud and clear earlier today during the oral arguments in the appeal (Klayman had tried to go straight to the Supreme Court, which failed, though pretty much everyone expects the case to get back there eventually). Dan Froomkin, over at The Intercept, briefly discusses how Klayman's nutty rantings in the court have the potential to derail the whole thing.

But the lead plaintiff in this case is Larry Klayman, a bombastic and litigious conspiracy theorist who happened to file one of the first post-Snowden lawsuits.

And when the three-judge panel began peppering him to substantiate his claims of standing and harm, Klayman was unable to make a cogent argument. He accused the government of consistently lying and of getting “into people’s underwear.” And he cast himself personally as the victim of government surveillance and dirty tricks, saying his phone made calls he never placed and that a client’s computer had been broken into.

“I can’t talk on the phone anymore,” he complained.

He told the judges they were the last defense against tyranny, and warned them of revolution should they fail.

Riiiiiiiight.

Thankfully, Cindy Cohn from the EFF was also on hand and provided a much more legally relevant and defensible argument:

On the crucial issue of how the information being collected by the NSA differs from the information being collected in the 1979 case of Smith v. Maryland, Cohn provided the key answer that Klayman was incapable of summoning: Its size.

Smith was about one robbery suspect, whose calls were monitored for three days. “This is the untargeted mass collection of the phone calls of millions of people over many years,” Cohn said.

Judge David Sentelle interrupted: “Does it become an invasion because there’s lots of it? Or is a million times nothing still nothing?”

Cohn said American citizens have a reasonable expectation that the government isn’t logging all their phone calls all the time for no specific reason. “There are regular people making everyday phone calls, that are swept up in this.”

There's much more in the actual discussion, but this is really what the case is about. Can the courts continue to take the awful Smith v. Maryland argument, saying that it was okay to get a single phone's records from the phone company without a warrant, and extrapolate it out to mean that the government can demand every phone record of every call. There's still a lot more to go in this process, including a likely rehearing with the full DC Circuit and then the eventual Supreme Court ruling. One just hopes that Klayman's nuttiness doesn't get in the way of this important case.

Filed Under: 4th amendment, 9th circuit, appeals, cindy cohn, larry klayman, nsa, phone records, richard leon, section 215, smith v. maryland, surveillance, third party doctrine

Judge Says Supreme Court Should Overturn Awful Surveillance Precedent, But Until It Does, He Has To Reject Case Against NSA

from the a-small-step dept

We've written plenty about the case Smith v. Maryland, which established the dangerous Supreme Court precedent that there is no 4th Amendment expectation of privacy to be found in any data or information you give to a third party. Judge Richard Leon, back in December, ruled that the NSA surveillance efforts were so different from the situation in Smith (involving police getting dialing information on a single person from the phone company) that it wasn't an applicable precedent in the case in front of him, brought by Larry Klayman. That case is now being appealed.

In a new case, Smith v. Obama (assuming no relation to the "Smith" in the Maryland case), Judge Lynn Winmill, in the Idaho district court, has said that Judge Leon's ruling should be the model for a Supreme Court ruling overturning Smith v. Maryland. However, since no such ruling has taken place, he has to reject the claim in this case:

Judge Leon's decision should serve as a template for a Supreme Court opinion. And it might yet. Justice Sotomayor is inclined to reconsider Smith, finding it “ill-suited to the digital age, in which people reveal a great deal of information about themselves to third parties in the course of carrying out mundane tasks.” See U.S. v. Jones, 132 U.S. 945, 957 (2012) (Sotomayor, J., concurring). The Fourth Amendment, in her view, should not “treat secrecy as a prerequisite for privacy.”

But Smith was not overruled, and it continues – along with the Circuit decisions discussed above – to bind this Court. This authority constrains the Court from joining Klayman. Accordingly, the Court will grant the defendants’ motion to dismiss and deny Smith's motion for injunctive relief.

There's a bit more to the case overall, as it focuses on "location" data, and it's not entirely clear if the NSA is really collecting location data. However, as Judge Winmill notes, the Supreme Court's rulings in Jones suggest that the Supreme Court may be finally recognizing how outdated Smith v. Maryland is -- and it's good to see other judges recognizing this as well, even if they're constrained by existing precedent elsewhere.

Filed Under: layman, lynn winmill, nsa, richard leon, smith v. maryland, supreme court, surveillance, third party doctrine

On Second Thought: Why Was Verizon's Challenge To Bulk Phone Records Collection So Weak?

from the you-can-do-better-than-that dept

On Friday we wrote about an unnamed phone company apparently challenging the FISA Court's order to hand over certain phone records on basically every phone call, noting that the FISA Court shot down that challenge. The phone company was not identified, but the Washington Post says that people have confirmed that it's Verizon. That isn't all that surprising. As far as we know, the Section 215 bulk phone record orders are mainly used on Verizon and AT&T, but not other, smaller phone companies.

In our post, we suggested the nameless telco deserved kudos for actually challenging the order, but in retrospect, the company only deserves very partial kudos. First, assuming it's Verizon, the company has been receiving these orders every three months for something close to eight years. And it just challenged them now? Second, the challenged relied entirely on Judge Richard Leon's ruling from December that found the Section 215 program unconstitutional. Verizon did not make any specific statutory or constitutional challenges itself to the order. It just pointed to Judge Leon's ruling and said that, based on that ruling, it was questioning the order. In fact, it's not even clear if Verizon was actively challenging the order, or just asking for clarification based on Judge Leon's ruling.

That's a fairly weak challenge, and allowed FISC judge Rosemary Collyer to just handwave away Judge Leon's arguments, without Verizon having to present any real arguments itself. It's a challenge, certainly, but a rather weak one that Verizon had to know it would lose, and which didn't require much effort at all.

Filed Under: fisa court, fisc, richard leon, rosemary collyer, section 215
Companies: verizon

Unnamed Phone Company Challenges NSA's Bulk Records Collection; FISC Says It's Perfectly Legal

from the of-course-they-would dept

Late on Friday, the FISA Court unclassified a few documents, including a ruling on an until now secret attempt by a telco to challenge the latest FISC order demanding that the telco hand over metadata on all phone records under Section 215 of the Patriot Act. The telco's name is redacted, but it relied entirely on Judge Richard Leon's ruling from December, which found the bulk collection of phone records unconstitutional. Basically, the telco appears to have received the renewed Section 215 bulk collection order from FISC in January, and then challenged it on the basis of Judge Leon's ruling. The FISC shoots down that challenge, rejecting Judge Leon's reasoning, and insisting that bulk collection of phone records is perfectly legal and constitutional.

Turning now to the merits of the Fourth Amendment issue, this Court finds Judge Leon's analysis in Klayman to be unpersuasive and concludes that it provides no basis for vacating or modifying the Secondary Order issued [REDACTED] January 3, 2014....

FISC, of course, immediately highlights the infamous Smith v. Maryland case that all defenders of bulk collection point to (and which Judge Leon said did not apply here, given the very different circumstances). But, FISC still argues it applies claiming that the differences are "indistinguishable."

The information [REDACTED] produces to NSA as part of the telephony metadata program is indistinguishable in nature from the information at issue in Smith and its progeny. It includes dialed and incoming telephone numbers and other numbers pertaining to the placing or routing of calls, as well as the date, time and duration of the calls.

That seems disingenuous at best. You need to be willfully distorting the facts to argue that Smith and the bulk data collection programs are "indistinguishable" from one another. Smith involved information on a single person. The bulk collection covers everyone. In fact, Judge Leon himself went through a rather detailed explanation of what "distinguishes" the Smith case from the bulk collection, including the fact that while people may expect phone companies to occasionally provide information to law enforcement on suspects, they do not reasonably expect the telcos to do that on everything from every person.

FISC Judge Rosemary Collyer admits that Judge Leon explained why the two situations are wholly different, but simply disagrees on every distinguishing factor.

This Court respectfully disagrees with Judge Leon's reasons for deviating from Smith. To begin with, Judge Leon focused largely on what happens (and what could happen) to the telephony metadata after it has been acquired by NSA -- e.g., how long the metadata could be retained and how the Government could analyze it using sophisticated technology. Smith and the Supreme Court's other decisions applying the third-party disclosure principle make clear that this focus is misplaced in assessing whether the production of telephony metadata constitutes a search under the Fourth Amendment.

Smith reaffirmed that the third-party disclosure principle -- i.e., the rule that "a person has no legitimate expectation of privacy in information he voluntarily turns over to third parties" ... applies regardless of the disclosing person's assumptions or expectations with respect to what will be done with the information following its disclosure.

From there, Judge Collyer goes on to restate the rather expansive view that, under the third party doctrine, basically you have absolutely no 4th Amendment rights whatsoever to anything held by a third party. There's also this fun tidbit, in which the ruling dismisses the "everyone's content" vs. "just one target's content"

The aggregated scope of the collection and the overall size of NSA's database are immaterial in assessing whether any person's reasonable expectation of privacy has been violated such that a search under the Fourth Amendment has occurred. To the extent that the quantity of the metadata collected by NSA is relevant, it is relevant only on a user-by-user basis. The pertinent question is whether a particular user has a reasonable expectation of privacy in the telephony metadata associated with her or her own calls. For purposes of determining whether a search under the Fourth Amendment has occurred, it is irrelevant that other users' information is also being collected and that the aggregate amount acquired is very large.

Basically, even though there is a very big distinguishing factor between collecting one targeted person's info and everyone's info, the FISA Court insists that this factor can be ignored, because you have to look at it in terms of each person's individual situation. That seems like a highly questionable analysis, and a very dangerous "cheat" to hide from the biggest factor that makes the 215 bulk collection orders so different from the situation in Smith.

Even more troubling, is that the FISC seems to argue that phone metadata probably isn't that revealing anyway -- which is clearly bogus. It points to the case that Smith mainly relied upon, the Miller case involving bank records, and argues that phone metadata and bank records are basically the same:

It is far from clear to this Court that even years' worth of non-content call detail records would reveal more of the details about a telephone user's personal life than several months' worth of the same person's bank records. Indeed, bank records are likely to provide the Government directly with detailed information about a customer's personal life -- e.g., the names of the persons with whom the customer has had financial dealings, the sources of his income, the amounts of money he has spent and on what forms of goods and services, the charities and political organizations that he supports -- that the call detail records simply do not, by themselves, provide.

I find it equally questionable that bank record information isn't considered private, but even if we grant that premise, the rest of the argument makes little sense. In fact, much of the above information may not actually be supplied by bank records, and a person can often use cash to leave no such record. While both records may be quite revealing (beyond what I think the 4th Amendment should allow), given the choice, I'd argue that my phone records are a hell of a lot more revealing and private than my bank records.

FISC also rejects the idea that the Supreme Court's decision in the Jones case (arguing that GPS tracking may go too far) changes the analysis here. Judge Collyer points out that the rulings that Judge Leon relies on were concurring opinions, but not, technically part of the majority ruling (he basically lumped together Justice Alito and Justice Sotomayor's rulings, despite each taking slightly different approaches).

In the end, the FISC rejects the attempt by the unnamed telco, and basically says that Judge Leon's ruling is wrong. Kudos to the nameless telco for actually challenging the Section 215 order. Hopefully we'll find out soon which telco actually made a move to protect its users' privacy.

Filed Under: 4th amendment, bulk data, bulk records collection, fisa court, fisc, larry klayman, metadata, patriot act, richard leon, rosemary collyer, section 215