Hepting v. At & T Corp.

• Decision Date: 20 July 2006
• Docket Number: No C-06-672 VRW.,C-06-672 VRW.
• Citation: 439 F.Supp.2d 974
• Court: U.S. District Court — Northern District of California
• Parties: Tash HEPTING, et al, Plaintiffs, v. AT & T CORPORATION, et al, Defendants.

439 F.Supp.2d 974

Tash HEPTING, et al, Plaintiffs, v. AT & T CORPORATION, et al, Defendants.

No C-06-672 VRW.

United States District Court, N.D. California.

July 20, 2006.

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Cindy Arm Cohn, Corynne McSherry, Kevin Stuart Bankston, Kurt Opsahl, Electronic Frontier Foundation, Jeff D. Friedman Elena Maria Dimuzio, Heller Ehrman LLP, Eric B. Fastiff, Lieff, Cabraser, Heimann & Bernstein, LLP, Eric A. Isaacson, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, Maria V. Morris, Shana Eve Scarlett, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, Barry R. Himmelstein, Lieff Cabraser Heimann & Bernstein LLP, San Francisco, CA, Bert Voorhees, Traber & Voorhees, Pasadena, CA, James Samuel Tyre, Culver City, CA, Michael M. Markman, Heller, Ehrman, White & McAuliffe LLP, Menlo Park, CA, Robert D. Fram, Heller, Ehrman, White & McAuliffe LLP, Reed R. Kathrein, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, Richard Roy Wiebe, Law Office of Richard R. Wiebe, San Francisco, CA, Theresa M. Traber, Esq., Traber & Voorhees, Pasadena, CA, Tze Lee Tien, Berkeley, CA, for Plaintiffs.

Bruce A. Ericson, David L. Anderson, Jacob R. Sorensen, Pillsbury Winthrop Shaw Pittman LLP, San Francisco, CA, David W. Carpenter, Sidley Austin Brown & Wood LLP, Chicago, IL, David L. Lawson, Sidley Austin Brown & Wood, Edward Robert McNicholas, Bradford Allan Berenson, Sidley Austin LLP, Andrew H. Tannenbaum, Anthony Joseph Coppolino, Peter D. Keisler, United State Department of Justice, Civil Division, Federal Programs Branch, Renee Sharon Orleans, U.S. Department of Justice, Washington, DC, Marc Van Der Hout, Van Der Hout & Brigagliano, San Francisco, CA, James J. Brosnahan Brian Martinez Morrison & Foerster LLP San Francisco, CA, Jennifer Stisa Granick, Stanford Law School Crown Quadrangle, Stanford, CA, Susan A. Freiwald USF School of Law Terry Gross, Gross & Belsky LLP, Roger R. Myers, Holme Roberts & Owen LLP Laurence F. Pulgram Fenwick & West LLP San Francisco, CA, for Defendants.

Eric Schneider, Delray Beach, FL, pro se.

ORDER

WALKER, Chief Judge.

Plaintiffs allege that AT & T Corporation (AT & T) and its holding company, AT & T Inc, are collaborating with the National Security Agency (NSA) in a massive warrantless surveillance program that illegally tracks the domestic and foreign communications and communication records of millions of Americans. The first amended complaint (Doc # 8(FAC)), filed on February 22, 2006, claims that AT & T and AT & T Inc have committed violations of:

(1) The First and Fourth Amendments to the United States Constitution (acting as agents or instruments of the government) by illegally intercepting, disclosing, divulging and/or using plaintiffs' communications;

(2) Section 109 of Title I of the Foreign Intelligence Surveillance Act of 1978 (FISA), 50 U.S.C. § 1809, by engaging in illegal electronic surveillance of plaintiffs' communications under color of law (3) Section 802 of Title III of the Omnibus Crime Control and Safe Streets Act of 1968, as amended by section 101 of Title I of the Electronic Communications Privacy Act of 1986 (ECPA), 18 U.S.C. §§ 2511(1)(a), (1)(c), (1)(d) and (3)(a), by illegally intercepting, disclosing, using and/or divulging plaintiffs' communications;

(4) Section 705 of Title VII of the Communications Act of 1934, as amended, 47 U.S.C. § 605, by unauthorized divulgence and/or publication of plaintiffs' communications;

(5) Section 201 of Title II of the ECPA ("Stored Communications Act"), as amended, 18 U.S.C. §§ 2702(a)(1) and (a)(2), by illegally divulging the contents of plaintiffs' communications;

(6) Section 201 of the Stored Communications Act, as amended by section 212 of Title II of the USA PATRIOT Act, 18 U.S.C. § 2702(a)(3), by illegally divulging records concerning plaintiffs' communications to a governmental entity and

(7) California's Unfair Competition Law, Cal Bus & Prof Code §§ 17200 et seq, by engaging in unfair, unlawful and deceptive business practices.

The complaint seeks certification of a class action and redress through statutory damages, punitive damages, restitution, disgorgement and injunctive and declaratory relief.

On April 5, 2006, plaintiffs moved for a preliminary injunction seeking to enjoin defendants' allegedly illegal activity. Doc # 30(MPI). Plaintiffs supported their motion by filing under seal three documents, obtained by former AT & T technician Mark Klein, which allegedly demonstrate how AT & T has implemented a warrantless surveillance system on behalf of the NSA at a San Francisco AT & T facility. Doc #31, Exs A-C (the "AT & T documents"). Plaintiffs also filed under seal supporting declarations from Klein (Doc #31) and J Scott Marcus (Doc #32), a putative expert who reviewed the AT & T documents and the Klein declaration.

On April 28, 2006, AT & T moved to dismiss this case. Doc # 86 (AT & T MTD). AT & T contends that plaintiffs lack standing and were required but failed to plead affirmatively that AT & T did not receive a government certification pursuant to 18 U.S.C. § 2511(2)(a)(ii)(B). AT & T also contends it is entitled to statutory, common law and qualified immunity.

On May 13, 2006, the United States moved to intervene as a defendant and moved for dismissal or, alternatively, for summary judgment based on the state secrets privilege. Doc # 124-1 (Gov MTD). The government supported its assertion of the state secrets privilege with public declarations from the Director of National Intelligence, John D Negroponte (Doc #124-2 (Negroponte Decl)), and the Director of the NSA, Keith B Alexander (Doc #124-3 (Alexander Decl)), and encouraged the court to review additional classified submissions in camera and ex parte. The government also asserted two statutory privileges under 50 U.S.C. § 402 note and 50 U.S.C. § 403-1(i)(1).

At a May 17, 2006, hearing, the court requested additional briefing from the parties addressing (1) whether this case could be decided without resolving the state secrets issue, thereby obviating any need for the court to review the government's classified submissions and (2) whether the state secrets issue is implicated by an FRCP 30(b)(6) deposition request for information about any certification that AT & T may have received from the government authorizing the alleged wiretapping activities. Based on the parties' submissions the court concluded in a June 6, 2006, order that this case could not proceed and discovery could not commence until the court examined in camera and ex parte the classified documents to assess whether and to what extent the state secrets privilege applies. Doc # 171.

After performing this review, the court heard oral argument on the motions to dismiss on June 23, 2006. For the reasons discussed herein, the court DENIES the government's motion to dismiss and DENIES AT & T's motion to dismiss.

I

The court first addresses the government's motion to dismiss or, alternatively, for judgment on state secrets grounds. After exploring the history and principles underlying the state secrets privilege and summarizing the government's arguments, the court turns to whether the state secrets privilege applies and requires dismissal of this action or immediate entry of judgment in favor of defendants. The court then takes up how the asserted privilege bears on plaintiffs' discovery request for any government certification that AT & T might have received authorizing the alleged surveillance activities. Finally, the court addresses the statutory privileges raised by the government.

A

"The state secrets privilege is a common law evidentiary rule that protects information from discovery when disclosure would be inimical to the national security. Although the exact origins of the privilege are not certain, the privilege in this country has its initial roots in Aaron Burr's trial for treason, and has its modern roots in United States v. Reynolds, 345 U.S. 1, 73 S.Ct. 528, 97 L.Ed. 727 (1953)." In re United States, 872 F.2d 472, 474-75 (D.C.Cir.1989) (citations omitted and altered). In his trial for treason, Burr moved for a subpoena duces tecum ordering President Jefferson to produce a letter by General James Wilkinson. United States v. Burr, 25 F.Cas. 30, 32 (C.C.D.Va. 1807). Responding to the government's argument "that the letter contains material which ought not to be disclosed," Chief Justice Marshall riding circuit noted, "What ought to be done under such circumstances presents a delicate question, the discussion of which, it is hoped, will never be rendered necessary in this country." Id. at 37. Although the court issued the subpoena, id. at 37-38, it noted that if the letter "contain[s] any matter which it would be imprudent to disclose, which it is not the wish of the executive to disclose, such matter, if it be not immediately and essentially applicable to the point, will, of course, be suppressed." Id. at 37.

The actions of another president were at issue in Totten v. United States, 92 U.S. 105, 23 L.Ed. 605 (1876), in which the Supreme Court established an important precursor to the modern-day state secrets privilege. In that case, the administrator of a former spy's estate sued the government based on a contract the spy allegedly made with President Lincoln to recover compensation for espionage services rendered during the Civil War. Id. at 105-06. The Totten Court found the action to be barred:

The service stipulated by the contract was a secret service; the information sought was to be obtained clandestinely, and was to be communicated privately; the employment and the service were to be equally concealed. Both employer and agent must have understood that the lips of the other were to be for ever sealed respecting the relation of either to the matter. This condition of the engagement was implied from the nature of the employment, and is implied in all secret employments of the government...