Intellectual Property Law

A unanimous federal appeals court on Monday narrowed the scope of when telecommunications companies must keep the self-issued FBI search-warrant requests secret.

But the court limited when it was necessary for judges to review a secrecy order.

The appeal concerned various counter-terrorism statutes and the 2006 USA Patriot Act, which allows the FBI to demand information concerning telephone and e-mail communications (among other things) without a warrant under a national security letter, or NSL. The law forbids companies to let a customer know that the bureau has sought information concerning their telephone and e-mail traffic.

Ruling on an American Civil Liberties Union challenge to the gag order provision, the 2nd U.S. Circuit Court of Appeals concluded 3-0 that a carrier must keep the order secret if the FBI certifies that disclosure of the NSL "may result in an enumerated harm that is related to an authorized investigation to protect against international terrorism or clandestine intelligence activities."

That phrasing dramatically limited the parameters of when a gag order was automatically required. Until the court's ruling Monday, the previous standard for secrecy was required for any criminal investigation or "interference with diplomatic relations, or danger to the life or physical safety of any person."

The ACLU sought to limit the rule and allow NSL targets the ability to challenge the NSLs. It also maintains the secrecy rule violates the First Amendment rights of the telecommunication companies.

"The nondisclosure requirement," Judge Jon O. Newman wrote (.pdf) for the appeals court, "is not a typical prior restraint or a typical content-based restriction warranting the most rigorous First Amendment scrutiny."

Judge Newman's 55-page opinion was joined by judges Guido Calabrese and Sonia Sotomayor.

In 2005, 40,000 NSLs were sent to carriers, the court noted. The letters often demanded phone numbers dialed or received, and outgoing and incoming e-mail addresses of selected individuals. The contents of such communications are not usually authorized under a national security letter.

In the case decided Monday, the appeals court diverged from the lower courts on how much judicial oversight is required, if any.

A New York federal judge had ruled that the law's lack of language requiring judicial oversight of the secrecy provisions accorded the FBI too much power. The lower court declared the secrecy provision unconstitutional, and demanded a judge review every gag order. That decision was stayed pending appeal.

But on Monday, the New York-based appellate court agreed with the government that it should not be required to "initiate litigation" and or to obtain judicial approval of every secrecy order (these number in the tens of thousands). Instead, the court noted that judges must review the validity of a secrecy order, in private if necessary, only when a telecommunications company challenges the gag order under what the court termed a "reciprocal notice procedure."

Yet the "reciprocal notice procedure" may have little value in the real world: Tens of thousands of customers may never know that personal information, including banking records, was disclosed to the FBI. As the appeals court noted, telecommunication companies have only challenged secrecy orders three times.

The court wrote:

The government could inform each NSL recipient that it should give the government prompt notice, perhaps within 10 days, in the event that the recipient wished to contest the nondisclosure requirement. Upon receipt of such notice, the government could be accorded a limited time, perhaps 30 says, to initiate a judicial review to maintain the nondisclosure requirement, and the proceeding would have to be concluded within a prescribed time, perhaps 60 days.

? The NSL could also inform the recipient that the nondisclosure requirement would remain in effect if the recipient declines to give the government notice of an intent to challenge the requirement or, upon a challenge, if the government prevails. If the government is correct that very few NSL recipients have any interest in challenging the nondisclosure requirement (perhaps no more than three have done so thus far), this 'reciprocal notice procedure' would nearly eliminate the government's burden to initiate litigation.

See Also:

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• AT&T, Verizon: We Obeyed FBI "Emergency" Requests - 739 of Them ...
• FBI Misuses, Underreports Patriot Act Power: Audit
• Court Strikes Down Key Patriot Act Power Again