Category: Law

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Law Privacy

FCC to address Internet privacy

The chairman of the Federal Communications Commission announced in June that the agency plans this fall to address privacy in the context of consumers’ use of the Internet.

The spur for putting privacy on the agenda is the decision last winter by the FCC to enshrine the principle of an Internet open to all providers of content—a concept better known as net neutrality—within the agency’s authority to regulate common carriers pursuant to Title II of the Communications Act.

The decision included a determination that providers of broadband Internet service, including broadband delivered via mobile devices, will be subject to a section of the law that governs so-called customer proprietary network information (CPNI), which includes such things as the frequency, duration and timing of calls. In short, information that telecommunications companies know from providing service to customers.

Except for billing, emergencies and other exceptions provided by law, carriers cannot use CPNI without the approval of customers. But until the FCC’s net-neutrality ruling, the rules that govern use of CPNI applied only to services such as Voice over Internet Protocol—think Skype—that tie to the telephone network.

That seems likely to change. As the FCC noted in its net-neutrality ruling, the rules that govern use of CPNI by telephone companies would not be “well suited” to broadband Internet service. The reason: In recent years the FCC has revised the rules that govern CPNI after initially classifying broadband Internet service as a so-called information service, which exempted Internet service providers (ISPs) from common carrier status and later led a federal appeals court to order the FCC to revise its approach.

In addition, “the existing CPNI rules do not address many of the types of sensitive information to which a provider of broadband Internet services is likely to have access, such as (to cite just one example) customers’ web browsing history,” the FCC explained.

Until it can adopt rules that address the use of CPNI by broadband Internet providers specifically, the FCC says it “intends to focus on whether providers are taking reasonable, good-faith steps to comply” with restrictions on the use of CPNI set forth in the Communications Act. Note that CPNI does not include customers’ names, addresses and other personal information, the handling of which is governed by laws such as the Cable Television Privacy Act and the privacy notices that cable and phone companies deliver to subscribers.

So what protections for privacy should apply to broadband networks? In July, nine Democratic senators, including Elizabeth Warren and White House hopeful Bernie Sanders, wrote to FCC Chairman Tom Wheeler with some suggestions. The proposals include ensuring the definition of CPNI includes data pertaining to Internet usage, online activity and payments; directing ISPs to collect data transparently; requiring ISPs to obtain consumers’ express consent before sharing information; ordering ISPs to safeguard customers’ information and to notify customers in the event of a data breach; and giving consumers a clear process for resolving complaints.

“We call on the Commission to adopt a comprehensive definition of CPNI as it pertains to broadband,” the senators wrote. “Every click consumers make online paints a detailed picture of their personal and professional lives.”

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Law Privacy

Pocket-dial calls are not private, court rules

Someone whom you pocket-dial can listen to your call with impunity, a federal appeals court has ruled.

That’s because you know, or should know, that using a cellphone might result in your calling someone inadvertently, according to the U.S. Court of Appeals for the Sixth Circuit, which held recently that an assistant to the CEO of Cincinnati/Northern Kentucky International Airport who overheard comments about her boss by the airport’s chairman after he pocket-dialed the assistant is not liable for unlawfully intercepting a private conversation.

The assistant, Carol Spaw, listened continuously on Oct. 24, 2013 while James Huff, the chairman of the airport board, discussed Candace McGraw, the CEO, with Larry Savage, the airport’s vice-chairman, and later with Huff’s wife, Bertha. The men had stepped onto an outdoor balcony at their hotel in Bologna, Italy, where they discussed airport personnel matters, including the possibility of replacing McGraw as CEO.

Both Huff and his wife, with whom Huff continued discussing McGraw after returning to their room, later sued Spaw for intentionally intercepting their private conversations. A trial court ruled in favor of Spaw after concluding that because Huff placed the call, the Huffs lacked a reasonable expectation that their conversation would not be intercepted.

The appeals court agreed with respect to James but not with regard to Bertha. Writing for a three-judge panel, Judge Danny Boggs noted that “a number of simple and well-known measures can prevent pocket-dials form occurring.” But James Huff did not employ any of those measures, Boggs noted, adding, “He is no different from the person who exposes in-home activities by leaving drapes open or a webcam on and therefore has not exhibited an expectation of privacy.”

At issue was a series of steps that led to Spaw’s overhearing a conversation the participants thought to be private. After stepping onto the balcony, Huff tried to call Spaw using his iPhone to ask her to make a dinner reservation for him and Savage. When the call failed to connect, Savage called Spaw, who agreed to make reservations.

Thereafter, while Huff and Savage discussed personnel matters, the iPhone, which Huff had placed in the breast pocket of his jacket, called Spaw’s office phone, which she answered. After saying “hello” several times without a response, Spaw placed her phone on speaker mode and said “hello” a few more times. Within the first two minutes, Spaw realized that Huff and Savage were discussing McGraw, which prompted Spaw to take handwritten notes of the conversation and to instruct her colleague Nancy Hill, who also could hear the men talking, to do the same.

Spaw listened continuously to the call, which lasted 91 minutes. During that time, Huff finished his conversation with Savage and returned to his room, where he relayed to Bertha the substance of his conversation with Savage. Spaw, who used an iPhone to record part of the call, claimed that she felt obliged to do so after hearing the men discuss what Spaw described as an intention to discriminate against McGraw unlawfully.

The court noted that whether someone intercepts a phone call in violation of the law that authorized Spaw’s lawsuit turns on two questions: First, whether a person whose call is intercepted exhibits an expectation of privacy and, second, whether that expectation is reasonable.

“James Huff lacked a reasonable expectation of privacy in his statements only to the extent that a third-party gained access to those statements through a pocket-dialed call that he placed,” wrote Boggs (emphasis in original). “In sum, a person who knowingly operates a device that is capable of inadvertently exposing his conversations to third-party listeners and failed to take simple precautions to prevent such exposure does not have a reasonable expectation of privacy with respect to statements that are exposed to an outsider by the inadvertent operation of that device.”

Unlike her husband, however, Bertha Huff had an expectation that the contents of her conversation would remain private, at least until the final two minutes of the call, when her husband realized what had happened and told her his phone was on.

Though Bertha Huff knew her husband owned a cellphone and that cellphones can pocket-dial, “speaking to a person who may carry a device capable of intercepting one’s statements does not constitute a waiver of the expectation of privacy in those statements,” Boggs wrote.

Bertha Huff might have a claim against Spaw, provided Huff can show that Spaw’s actions constituted an intentional use of a device to intercept Huff’s communications, the court ruled.

The decision reminds us that anyone we pocket-dial can eavesdrop. “Having a private cause of action against someone who records your call after a pocket dial may be small consolation if the contents of the call are sufficiently embarrassing,” writes Jonathan Adler, a professor at Case Western University School of Law, in The Washington Post. “So this is a good reminder to lock your phone before putting it in your pocket.”

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Law News Privacy

Gawker fills in a gap between publishing and privacy

Last Thursday, Gawker, an online site that tout’s “today’s gossip” as “tomorrow’s news,” published an item about a married male executive at a major media company who planned to hook up with a male escort in a Chicago hotel room.

As detailed in the post, the executive, who serves as chief financial officer of Condé Nast, called off the rendezvous after the escort, who realized the executive happens to be the brother of a former Treasury secretary, sent his would-be date documents tied to housing discrimination the escort claims to be facing in Texas.

The post drew a firestorm of criticism from readers, including from journalists. Critics condemned Gawker for outing the executive and for detailing an attempt by the escort, whom the piece identified using a pseudonym, to pressure the executive to hit up his brother for help.

A day after the post went up, Gawker took it down. The move marked “the first time we have removed a significant news story for any reason other than factual error or legal settlement,” Nick Denton, the site’s CEO, wrote in a statement. According to Denton:

“The story involves extortion, illegality and reckless behavior, sufficient justification at least in tabloid news terms. The account was true and well-reported. It concerns a senior business executive at one of the most powerful media companies on the planet… In the early days of the Internet that would have been enough… But the media environment has changed, our readers have changed, and I have changed… I believe this public mood reflects a growing recognition that we all have secrets, and they are not all equally worthy of exposure.”

The decision to remove the post prompted the resignation of both Gawker’s executive editor and the site’s editor-in-chief. Removing the post breached the firewall between the editorial and business sides of the house in a way that, in their view, undermined their responsibility to safeguard the site’s editorial integrity.

As Denton noted, the turnabout marked a departure for Gawker, which made its mark with pieces that sparked the downfall or discomfort of a series of public figures. In 2010, the site published an anonymous account of the author’s one-night stand with Christine O’Donnell, then the Republican nominee for the U.S. Senate from Delaware. (Though O’Donnell was a public figure, critics in and out of the media slammed Gawker for invading her privacy. Denton defended the post by pointing out that O’Donnell campaigned as a paragon of chasteness.) In 2011, former U.S. Rep. Chris Lee resigned after Gawker published an email exchange he had with a woman he met on Craigslist.

Hulk Hogan sued Gawker in 2012 for $100 million after Denton posted excerpts from a tape of the wrestler having sex with the wife of a friend. (The case is pending in a Florida court.) More recently, Gawker investigated whether Katie Holmes moved into a Manhattan apartment three years ago that linked via a secret entrance to a Whole Foods Market on the first floor. (She did, it seems.)

To its credit, the site punches up. In 2010, Gizomodo, a Gawker site devoted to tech news, revealed a lapse in Apple’s legendary security by reporting on a prototype of an iPhone 4 that the editors bought from someone who found it in a bar, where an engineer from Apple left it by accident. Last winter, Gawker took the lead in publishing a trove of emails from the hack of Sony.

At its best, Gawker knows  how to “make fun of people and media sites without being overtly cruel,” Sarah Grieco wrote last year in the Columbia Journalism Review. At its worst, Gawker has a tendency to bully, according to Grieco, who cites Gawker’s claims that Shepard Smith, a Fox News anchor, is gay despite a dearth of evidence.

In defense of the discretion that Gawker demonstrates when it wants to, Denton has cited the decision not to publish nude photos of Jennifer Lawrence and other celebrities that leaked last year. The images may have been accurate, but they exposed no lie, Denton told Capital New York recently.

The piece about the CFO seems to be akin to the case of Hogan but with one difference. Hogan charges Gawker with invading his privacy. The video showed Hogan having sex but the act was private and recorded without his knowledge, he alleges. Gawker counters that the material is newsworthy, a position in line with the law, which generally protects reporters who ferret out facts that are not commonly known so long as they’re news.

Still, compared with Hogan, a celebrity who has boasted about his sexual prowess, the CFO of Condé Nast is an unknown. Sure, he works for a company that publishes The New Yorker, Vogue and other titles. But the person in charge of overseeing preparation of financial statements, managing Condé Nast’s financial strength or presenting the company’s creditworthiness has little to do with the content of its magazines.

At many news outlets, the executive suite tends to be a well-paid wing of the back office. And by most accounts, the current CFO of Condé Nast is about as far from the limelight as one can be. It’s also difficult to find a contradiction between his private behavior and public persona. He has no public persona.

Though Denton seems to have concluded as much the realization came too late to prevent the piece from going up in the first place. In a memo Monday to Gawker’s staff, he noted that the CFO story was legal but unworthy of the discretion afforded the editors who signed off on its publication. Writes Denton:

“We need a codification of editorial standards beyond putting truths on the Internet. [italics in original] Stories need to be true and interesting. I believe we will have to make our peace with the idea that to be published, those truths should be worthwhile. And some humane guidelines are needed — in writing — on the calculus of cruelty and benefit in running a story. Everybody has a private life, even a C-level executive, at least unless they blab about it. We do not seek to expose every personal secret — only those that reveal something interesting. And the more vulnerable the person hurt, the more important the story had better be.”

Time will tell if that’s a standard Gawker can uphold. Some members of Gawker’s editorial staff dispute both the viability of the criterion and Denton’s role in publishing the Condé Nast piece, which some in the newsroom say he could have killed up front had he found it as reprehensible as he contends.

Whatever the outcome, the test that Denton has articulated further defines the boundaries of publishing and privacy in a digital age. Highlight the disparities between the statements and actions of public figures. Clear the air of spin. Cover the news. And remember that stories are about people, too.

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Law Privacy

Neiman Marcus customers can sue over data breach

The hassle of straightening out unauthorized charges and the cost of protecting oneself against identity theft give consumers whose personal information is swiped in a data breach standing to sue a company that controlled the information, a federal appeals court in Chicago ruled Monday.

Customers who shopped at Neiman Marcus over roughly three months in 2013 during which hackers used malware to steal payment card information from the retailer’s terminals suffered injuries concrete enough to support their claims, according to the U.S. Court of Appeals for the 7th Circuit.

The customers, who include people who discovered fraudulent charges on their credit or debit cards after using the cards at Neiman Marcus stores in New York and California two years ago, filed a class-action lawsuit in March 2014 charging the luxury chain with failing to maintain security sufficient to protect their personal information and waiting six months from the start of the breach to notify customers their information had been compromised.

The plaintiffs alleged that the breach exposed 350,000 cards, of which 9,200 were known to have been used fraudulently. In all, the breach may have exposed as many as 1.1 million payment cards.

The trial court tossed the lawsuit, finding the plaintiffs’ claims of financial harm they might experience insufficient to support standing. Judge Diane Wood, writing for a three-judge panel of the appeals court, disagreed:

“At this stage in the litigation, it is plausible to infer that the plaintiffs have shown a substantial risk of harm from the Neiman Marcus data breach. Why else would hackers break into a store’s database and steal customers’ private information? Presumably, the purpose of the hack is, sooner or later, to make fraudulent charges or assume those consumers’ identities.”

The court distinguished the case of the data breach before it with a ruling in 2013 by the Supreme Court that found human rights organizations lacked standing to challenge the Foreign Intelligence Surveillance Act because they could not show that the government actually intercepted their communications with suspected terrorists.

“This is a really consequential decision” notes Alison Frankel of Reuters. “It’s the first time a federal appeals court has looked at a data breach class action that was dismissed because the trial judge said it fell short of [the Supreme Court’s] standing requirements.”

The customers of Neiman Marcus “should not have to wait until hackers commit identity theft or credit-card fraud in order to give the class standing, because there is an ‘objectively reasonable likelihood’ that such an injury will occur,” wrote Wood, citing the Court’s ruling from two years ago.

According to Wood, an offer by Neiman Marcus to pay the cost of a credit-monitoring service that costs $4.95 for the first month and $19.95 a month thereafter reflects the type of injury the plaintiffs suffered. She added:

“It is telling in this connection that Neiman Marcus offered one year of credit monitoring and identity-theft protection to all customers for whom it had contact information and who shopped at their stores between January 2013 and January 2014. It is unlikely that it did so because the risk is so ephemeral that it can safely be disregarded.”

That some lenders will not hold customers responsible for unauthorized charges neither eliminates injury to the cardholders nor shows that their injury cannot be redressed by a decision in their favor, the court found.

According to the court, the fact that the plaintiffs’ injuries might be traced to a data breach at Target or another of the retailers whose systems hackers infiltrated around the same time also does not rule out a lawsuit against Neiman Marcus.

If it happens that more than one company may be responsible for exposing the plaintiffs’ personal information to hackers, the companies themselves will have an opportunity to prove that they were not the cause of the injury, the court said.

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Law Privacy

Search of seized hard drives highlights questions of privacy in a digital age

A federal appeals court in New York has agreed to hear anew an appeal that explores the contours of privacy in a digital age.

At the urging of one of their colleagues, a majority of judges on the 2nd Circuit U.S. Court of Appeals voted on June 29 to rehear an appeal filed by Stavros Ganias, an accountant from Wallingford, Connecticut who was convicted in 2011 of two counts of tax evasion and sentenced to 24 months in prison.

The ruling reopens an appeal decided in June 2014 by three judges of the court, who in a divided ruling vacated Ganias’ conviction after concluding that the government violated his Fourth Amendment rights when it retained files from his lawfully searched computers for more than two-and-a-half years and then searched them again when it later developed probable cause.

The case highlights a difference between searches of books or papers and searches of computers and other electronics, which can hold files that range from the professional to the personal and may encompass far more information about someone from whom the government seizes such devices than the warrant itself authorizes.

In deciding to review the ruling, the majority asked the parties and their allies to address two questions that the court will consider when it convenes for oral argument on Sept. 30.

“(1) Whether the Fourth Amendment was violated when, pursuant to a warrant, the government seized and cloned three computer hard drives containing both responsive and non-responsive files, retained the cloned hard drives for some two-and-half years, and then searched the non-responsive files pursuant to a subsequently issued warrant; and

(2) Considering all relevant factors, whether the government agents in this case acted reasonably and in good faith such that the files obtained from the cloned hard rives should not be suppressed.”

At issue is a prosecution that stemmed from Ganias’ work on behalf of a company that had been hired by the U.S. Army to provide security and maintenance services at a vacant facility in Stratford, Connecticut.

Based on a tip from a confidential source that the contractors had stolen copper wire and other equipment from the facility, in Nov. 2003 investigators from the Army obtained warrants to search several premises, including the offices that housed Ganias’ accounting firm.

There, pursuant to the warrant, the agents made identical copies of the hard drives of Ganias’ computers. Though the imaging also copied Ganias’ personal files—contained in programs such as QuickBooks and TurboTax—the agents assured Ganias they were looking only for materials that tied to the investigation. The following spring, after discovering suspicious payments by the contractor to a business owned by someone who had not reported any income from that business, the Army invited the IRS to join the investigation. Investigators from the Army gave the IRS copies of Ganias’ hard drives so that agents from the IRS could review the evidence.

By December, the agents from both the Army and IRS had extracted the files that tied to their investigation of the contractor. They knew the warrant did not authorize them to review other records retrieved from the hard drives. Still, they retained the files that had nothing to do with the investigation.

For its part, the IRS started to suspect that Ganias had failed to report the contractor’s income properly. In July 2005—about 20 months following the seizure of the hard drives—the IRS broadened its investigation to include possible tax fraud by Ganias. The agent in charge of the investigation did not review Ganias personal financial records, which she knew to be beyond the scope of the warrant.

The following February, the government asked Ganias and his attorney for permission to review Ganias’ personal files that had been copied from the hard drives. After Ganias did not respond, the IRS obtained a warrant to search the images of Ganias’ financial records seized in 2003. Because Ganias had revised the original files shortly after the Army copied the drives in 2003, the original records would not have existed absent the government’s retaining the images.

At trial, Ganias sought to suppress the computer files that became the subject of his appeal. Judge Alvin Thompson of the U.S. District Court in Hartford denied the motion, explaining:

“Here… where the searches and seizures were authorized by a magistrate judge, where government agents scrupulously avoided reviewing files that they were not entitled to review, and where the defendant had an alternative remedy pursuant to [a motion to return property] to avoid the complained of injury, i.e. that the government held his data for too long without returning or destroying it, the defendant has not shown that his Fourth Amendment rights were violated.”

On appeal, the court noted that the framers of the Constitution sought to end the practice of the British of searching the premises of opponents and seizing their papers, books and records indiscriminately pursuant to so-called general warrants. Consequently, the court noted, the Fourth Amendment requires that warrants will be available to the government only on a showing of probable cause and a description of the places to be searched and the items to be seized. According to Judge Denny Chin:

“These Fourth Amendment protections apply to modern computer files. Like 18th Century “papers,” computer files may contain intimate details regarding an individual’s thoughts, beliefs, and lifestyle, and they should be similarly guarded against unwarranted Government intrusion. If anything, even greater protection is warranted.”

The court observed that investigators who carry out a warrant may do so by making mirror images of the information stored on hard drives that the investigators can later review off-site. According to the court, the government must review the material within a reasonable period—there’s no one-size-fits-all rule—and that material is subject to exclusion from evidence when the government seizes items outside the scope of the warrant (a practice that starts to resemble a general warrant) and fails to act in good faith.

In the case of Ganias, the court concluded that the government had overstepped its authority. According to Chin, the government’s retaining Ganias’ records for two-and-a-half years interfered with his rights in those files.

“Without some independent basis for its retention of those documents in the interim, the government clearly violated Ganias’ Fourth Amendment rights by retaining the files for a prolonged period of time and then using them in a future criminal investigation,” wrote Chin, who rejected the government’s contention that it obtained a second warrant to search Ganias’ files.

“If the Government could seize and retain non-responsive electronic records indefinitely, so it could search them whenever it later developed probable cause, every warrant to search for particular electronic data would become, in essence, a general warrant,” he added.

The ruling, which vacated Ganias’ conviction, surfaces a tension between the reasonableness of a search—in this case the length of time the government retains records swept up in a search—and the need for the government to establish that it has not altered evidence in its custody. As the Harvard Law review noted in December:

“Although the court properly found that Ganias’ Fourth Amendment rights had been violated, the decision failed to appreciate the importance of authentication requirements for electronic evidence. As a result, Ganias may unnecessarily complicate prosecutions by potentially creating a perceived ‘right to deletion’—a prescription that federal prosecutors must delete files nonresponsive to a warrant sooner rather than later. The court could have avoided any potentially burdensome effects of this prescription on the evidentiary authentication process had it issued a more narrow ruling merely suppressing the evidence.”

The decision to reexamine the ruling also may tie to a question posed by Orin Kerr, a professor of criminal law and procedure at George Washington University who has commented on the case. “Is the real problem here that the government has over-seized and is taking unfair advantage of having extra stuff available to it, or is the real problem only that too much time has elapsed before the government is taking that advantage?” Kerr wrote in The Washington Post following Chin’s ruling.

Kerr suggests the same facts as Ganias except imagines the government developed probable cause for the second crime days after carrying out the first warrant. “Should that case come out differently?” he asks. “And if it could come out differently, is that because we intuit that the information for the second warrant likely is still… available on the original hard drive or because we think that the government’s seizure did not go on for so long as to become unreasonable?”

The first briefs are due by July 29.

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Law

Justice Scalia’s dissent in marriage ruling. Really?

The Supreme Court’s ruling legalizing same-sex marriage elicited a colorful dissent from Justice Antonin Scalia, who accused the majority of making policy from the bench.

Scalia charged his fellow justices with overstepping their roles as jurists to wade into a matter of social policy that ought to have been resolved by voters and their elected representatives. According to Scalia,

“This is a naked judicial claim to legislative—indeed, super-legislative—power; a claim fundamentally at odds with our system of government. Except as limited by a constitutional prohibition agreed to by the People, the States are free to adopt whatever laws they like, even those that offend the esteemed Justices’ ‘reasoned judgment.’ A system of government that makes the People subordinate to a committee of nine unelected lawyers does not deserve to be called a democracy.”

To allow the question of marriage to be resolved “by a select, patrician, highly unrepresentative panel of nine is to violate a principle even more fundamental than no taxation without representation: no social transformation without representation,” Scalia added.

He later quoted from the majority’s opinion, followed by his inserting a rhetorical “Really?” that evokes a recurring sketch by Seth Myers and Amy Poehler on the “Weekend Update” segment of “Saturday Night Live.”

The lament is one that Scalia returns to from time to time. “The core of Justice Scalia’s judicial philosophy is that judges deciding constitutional cases should discover the answers in external sources: judges must not make value choices,” Erwin Chemerinsky a professor of constitutional law and dean at the University of California Irvine, wrote in a law review article in 2000.

Of course, Justice Scalia is entitled to his philosophy. But that doesn’t make it any easier to reconcile his charges in the marriage decision with the occasions on which Justice Scalia has seemed quite willing, from the bench, to interfere in the “democratic process”—his words—from the dissent in the marriage ruling.

I’m thinking here of Bush v. Gore, the 5 to 4 decision by a majority of the Court in 2000 that ended the counting of votes in a hotly contested presidential election and thereby awarded the White House to George W. Bush.

In that case, the majority—of which Scalia was a member (the opinion was signed “by the Court”)—stopped tries to tally votes in Florida after finding that the recount—with its attempt by officials in the Sunshine State to discern the intent of voters from ballots that voting machines had failed to mark clearly—violated the constitutional right of voters not to be treated arbitrarily in a way that could “value one person’s vote over that of another.”

But what the majority in that case refused to do was to allow the recount to continue, despite efforts by the state, under the supervision of its highest court, to do exactly that. As the majority explained:

“Upon due consideration of the difficulties identified to this point, it is obvious that the recount cannot be conducted in compliance with the requirements of equal protection and due process without substantial additional work.”

Scalia and his fellow members of the majority were unwilling to give the state time to do that additional work, despite it’s potential to determine the outcome of an election, which, you might say, is the incarnation of the democratic process that Scalia otherwise venerates.

Writing in The New Yorker on the tenth anniversary of Bush v. Gore, Jeffrey Toobin addressed this contradiction:

“Bush v. Gore would resonate, in any case, because the Court prevented Florida from determining, as best it could, whether Gore or Bush really won. (Recounts of the ballots by media organizations produced ambiguous results; they suggest that Gore would have won a full statewide recount and Bush would have won the limited recount initially sought by the Gore forces.) But the case also represents a revealing prologue to what the Supreme Court has since become. As in Bush v. Gore, nominally conservative Justices no longer operate by the rules of traditional judicial conservatism.”

For his part, Justice Scalia has told those who take issue with the majority’s ruling in Bush v. Gore to “Get over it.”

That’s what came back to me while reading Justice Scalia’s dissent in Friday’s marriage ruling. Sure, Scalia’s rejoinders can be a delight to read. But his charge that his colleagues in the marriage majority, which, after all, upheld its responsibility to say what the law is, overstepped, might be more credible if Scalia himself were to have followed his own admonition to give the people their say.

Or as Justice Scalia might say: Really?

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Law

The Supreme Court’s ruling on marriage equality

Marriage equality is the law of the land.

By a vote of 5 to 4, the Supreme Court ruled Friday that guarantees of due process and equal protection of law enshrined in the 14th Amendment to the Constitution require states to license marriages between two people of the same sex. “No longer may this liberty be denied to them,” Justice Anthony Kennedy wrote for the majority.

One can imagine the concluding paragraph of the majority’s opinion being read aloud at weddings henceforth. In it, Justice Kennedy writes:

“No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.

The judgment of the Court of Appeals for the Sixth Circuit is reversed.

It is so ordered.”

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Law

The Obamacare ruling shows that context matters

The Supreme Court on Thursday ruled that subsidies for health insurance should be available to Americans wherever they reside.

At issue was a section of the Affordable Care Act (ACA) that authorizes tax credits for those who purchase coverage in marketplaces “established by the state.” Four policyholders from Virginia sued, charging that those four words meant the law did not authorize credits for taxpayers in states, like theirs, that rely on the federal health-insurance marketplace. Without subsidies, the petitioners charged, they could neither afford health insurance nor be required by law to purchase it.

That ambiguity presented the Court with the need to interpret the ACA and marked the second time since the law was enacted in 2010 that its fate fell to the justices.

A trial court dismissed the suit after finding that the ACA provided subsidies for plans purchased through either the state or federal exchanges. The 4th U.S. Circuit Court of Appeals affirmed but the Court of Appeals for the D.C. Circuit ruled, in a separate case, that the ACA limited tax credits to state exchanges only.

By a vote of 6 to 3, the Court sided with the 4th Circuit. As Chief Justice John Roberts wrote for the majority:

“If the statutory language is plain, we must enforce it according to its terms. But oftentimes the ‘meaning—or ambiguity—of certain words or phrases may only become evident when placed in context.’ So when deciding whether the language is plain, we must read the words ‘in their context and with a view to their place in the overall statutory scheme.’ Our duty, after all, is to ‘construe statutes, not isolated provisions.'” [citations omitted]

The majority agreed with the petitioners that the language of the phrase at issue was ambiguous, in that one can read it as limited to state exchanges or as applicable to both state and federal exchanges.

The ambiguity prompted the majority to look to the broader structure of the law. Congress put in place subsidies as part of a push to maximize the pool of people who are insured, the majority noted. That lowers premiums by avoiding an alternative whereby only people who need health insurance—those who are less healthy and presumably consume more health care—buy it.

The alternative, which would have denied subsidies to roughly 6.4 million people in 34 states that use the federal exchange, could upend the market for health insurance irreparably. In that event, the Chief Justice wrote:

“One study predicts that premiums would increase by 47 percent and enrollment would decrease by 70 percent… It is implausible that Congress meant the Act to operate in this manner… Petitioners’ arguments about the plain meaning of [the law] are strong. But while the meaning of the phrase ‘an exchange established by the state’ may seem plain ‘when viewed in isolation,’ such a reading turns out to be ‘untenable in light of [the statute] as a whole.’ In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” [citations omitted]

Congress passed the ACA “to improve health insurance markets, not destroy them,” wrote Roberts. “If at all possible, we must interpret the act in a way that is consistent with the former, and avoids the latter.

Categories
Law

Fate of Obamacare to turn on four words

The Supreme Court is expected to decide as soon as this week whether a main part of the Affordable Care Act (ACA) can survive.

Four residents of Virginia contend they were forced by the ACA to buy coverage because of subsidies they receive from the federal government. Their appeal rests on the words “established by the state,” a phrase in the law that the challengers say means that only people who buy coverage through marketplaces established by states—not through the federal health care marketplace—qualify for subsidies.

Virginia is among 34 states that use the federal marketplace. Absent the subsidy, the challengers charge they would be neither able nor required to buy health insurance. If the Court agrees, 6.4 million people could lose tax credits that help them afford coverage and, in most instances, keep them on the rolls.

The government calls the interpretation advanced by the challengers strained. Congress never intended to distinguish between federal and state exchanges in setting up subsidies, proponents of the law say.

Instead, the four words at issue constitute a vestige of an assumption—abandoned during the legislative process—that each state would establish an exchange. It later became apparent that some states would decline to set up exchanges, in which case the federal government made coverage available through HealthCare.gov.

More than 11 million Americans have signed up for health coverage since the ACA passed five years ago. In all, 48% of Americans say the law is working well or needs minor improvements, while 50% say it needs to be overhauled or eliminated, according to the latest NBC News/Wall Street Journal poll.  That’s down from December 2013, when 57% of adults said the law needed to be recast.

Not surprisingly, support for the ACA divides along party lines.  A survey last February by the Pew Research Center found that 87% of Republicans opposed the law while 78% of Democrats supported it.

According to the latest Gallup poll, people between the ages of 18 and 29, those who earn less than $24,000 a year, and black and Hispanic voters are most likely to say the law has helped them and their families.

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Law

Supreme Court backs ban on Confederate license plates, strikes down Arizona sign law

Two rulings last week by the Supreme Court highlight differences in the protection of speech depending in part on who is speaking and reveal some of the ways the justices assess First Amendment claims.

By a vote of 5 to 4, the Court affirmed, in an appeal by the Texas Division of the Sons of Confederate Veterans, that speech by the government may not be challenged as violating the Constitution. Separately, by a unanimous judgment that stretched across four concurring opinions, the Court invalidated a code adopted by the town of Gilbert, Arizona that governed the display of billboards and outdoor signs.

The rulings “are likely to be analyzed together from here on, to determine how—and whether—they fit into the strong pattern that the modern Court had followed in more or less steadily expanding free-speech rights,” Lyle Denniston observed at Scotusblog. “Indeed, in some ways the outcomes seemed contradictory, and the splintering of the Court added to that appearance.”

In the case from the Lone Star State, the Court reviewed the veterans group’s challenge of a decision about five years ago by the Texas Department of Motor Vehicles Board, which rejected the group’s proposal for a license plate featuring a Confederate battle flag. Comments filed by the public as part of the review process showed that many people considered the design offensive, the board said. (The proposal preceded the massacre at Emanuel African Methodist Episcopal Church in Charleston that, among other things, has renewed calls to remove the Confederate flag from the state capitol.)

Though the trial court backed the board, the 5th Circuit U.S. Court of Appeals reversed, concluding that the board, in declining to approve the design, discriminated against the veterans’ viewpoint in violation of the First Amendment.

The Court disagreed. “When government speaks, it is not barred by the Free Speech Clause from determining the content of what it says,” Justice Breyer wrote for a majority joined by Justices Thomas, Ginsburg, Kagan and Sotomayor. “That freedom in part reflects the fact that it is the democratic electoral process that first and foremost provides a check on government speech.”

A review of the program by which Texas considers proposals for specialty license plates shows that “Texas explicitly associates itself with the speech on its plates” and that someone who displays a message on a license plate issued by the state “likely intends to convey to the public that the state has endorsed that message,” explained Justice Breyer. “If not, the individual could simply display the message in question in larger letters on a bumper sticker right next to the plate.”

The First Amendment applies to government regulation of speech by members of the public, not to speech by the government, the majority noted. Members of the public who disagree with speech by the government have both the freedom to criticize the government’s views and to vote elected officials out of office, the Court explained. Democracy itself “provides a check on government speech,” Justice Breyer noted.

The alternative—subjecting speech by the government to the strictures of the First Amendment—would not work, Justice Breyer noted, adding:

“How could a city government create a successful recycling program if officials, when writing householders asking them to recycle cans and bottles, had to include in the letter a long plea from the local trash disposal enterprise demanding the contrary? How could a state government effectively develop programs designed to encourage and provide vaccinations, if officials had to provide the prospective of those who oppose this type of immunization?”

But specialty license plates do not constitute government speech, countered the dissenters, who likened the plates to a so-called limited public forum, which allows state property to be used by private speakers, such as when a city turns over its municipal auditorium for a candidates’ debate. In those cases, the dissenters noted, the First Amendment prevents the government from discriminating on the basis of viewpoints. As Justice Alito explained:

“The Confederate battle flag is a controversial symbol. To the Texas Sons of Confederate Veterans, it is said to evoke the memory of their ancestors and other soldiers who fought for the South in the Civil War. To others, it symbolizes slavery, segregation, and hatred. Whatever it means to motorists who display that symbol and to those who see it, the flag expresses a viewpoint. The Board rejected the plate design because it concluded that many Texas would find the flag symbol offensive. That was pure viewpoint discrimination.”

The State of Texas has authorized more than 350 specialty license plates, including plates bearing the names of high schools, fraternities or sororities, the Daughters of the American Revolution, a favorite soft drink and a favorite NASCAR driver, Justice Alito observed. Would someone sitting at the side of a highway in Texas, watching the vehicles pass by, “really think that the sentiments reflected in these specialty plates are the views of the State of Texas and not those of the owners of the cars?” he asked. “If a car with a plate that says ‘Rather Be Golfing’ passed by at 8:30 am on a Monday morning, would you think: ‘This is the official policy of the State—better to golf than to work?’”

On the other hand, attempts by the government to regulate speech will be presumed unconstitutional whenever the regulation differentiates among private citizens based on the content of their message. The town of Gilbert, a city of roughly 209,000 people that sits about 22 miles southeast of Phoenix, established rules for the display of outdoor signs based on three categories: those that conveyed so-called ideological messages, those that aimed to influence the outcome of an election, and those that directed people to a gathering of a religious, charitable or nonprofit organization.

At issue was an appeal by the Good News Church, which the town fined for posting between 15 and 20 temporary signs that advertised upcoming services. The signs omitted a date for the assemblies and remained posted for longer than the 13 hour-period that concluded one hour after the services. The town cited the church, which sued.

A trial court sided with the town. The 9th U.S. Circuit Court of Appeals agreed, concluding that the code did not discriminate among displays based on the content of their message.

The Court reversed the ruling. “The restrictions in the Sign Code that apply to any given sign thus depend entirely on the communicative content of the sign,” Justice Thomas wrote in an opinion joined by Justices Roberts, Scalia, Kennedy and Sotomayor. “On its face, the Sign Code is a content-based regulation of speech. We thus have no need to consider the government’s justifications or purposes for enacting the Code to determine whether it is subject to strict scrutiny.”

According to Thomas, the appellate court’s determination that the code did not regulate speech based on the town’s disagreement with any particular message disregarded the need to determine initially whether the law as written avoided distinctions based on the message being conveyed.

In upholding the code, the 9th Circuit had determined that the town’s attempt to regulate signs had nothing to do with the content of their messages. But that overlooked “the crucial first step in the content-neutrality analysis: determining whether the law is content neutral on its face,” Justice Thomas wrote. “In other words, an innocuous justification cannot transform a facially content-based law into one that is content neutral. Thus, a speech regulation targeted at specific subject matter is content based even if it does not discriminate among viewpoints within that subject matter.”

That view went too far, according to Justices Breyer and Kagan, who wrote separately to covey their view. “Regulatory programs almost always require content discrimination,” Justice Breyer noted. “And to hold that such content discrimination triggers strict scrutiny is to write a recipe for judicial management of ordinary government regulatory activity.”

As Justice Breyer noted, the government requires that public companies include certain content in securities filings, that labels for prescription drugs bear the symbol ‘Rx only,” that rules requiring confidentiality of medical records allow a physician to disclosed that a patient has HIV to the patient’s spouse or sexual partner, and that commercial airplane pilots must ensure that each passenger has been advised to fasten his or her seatbelt. According to Justice Breyer:

“The better approach is to generally treat content discrimination as a strong reason weighing against the constitutionality of a rule where a traditional public forum, or where viewpoint discrimination, is threatened, but elsewhere treat it as a rule of thumb, finding it a helpful, but not determinative legal tool, in an appropriate case, to determine the strength of a justification.”

Despite the ruling, three of the four opinions gave little guidance to municipalities, which may be left to wonder how they might regulate the placement of billboards without contravening the Constitution. That fell to Justice Alito, who, in a concurrence joined by Justices Kennedy and Sotomayor, offered some examples of how to regulate outdoor signs other than by reference to the content of the billboards themselves:

“I will not attempt to provide anything like a comprehensive list, but here are some rules that would not be content based:

Rules regulating the size of signs. These rules may distinguish among signs based on any content-neutral criteria, including any relevant criteria listed below.

Rules regulating locations in which signs may be placed. These rules may distinguish between free-standing signs and those attached to buildings.

Rules distinguishing between lighted and unlighted signs.

Rules distinguishing between signs with fixed messages and electronic signs with messages that change.

Rules that distinguish between the placement of signs on private and public property.

Rules distinguishing between the placement of signs on commercial and residential property.

Rules distinguishing between on-premises and off-premises signs.

Rules restricting the total number of signs allowed per miles of roadway

Rules imposing time restrictions on signs advertising a one-time event. Rules of this nature do not discriminate based on topic or subject and are akin to rules restricting the times within which oral speech or music is allowed.”

That’s not to suggest that all regulation of speech that does not encompass content comports with the First Amendment. Rules that set the so-called time, place and manner of speech must be narrowly tailored to serve a legitimate government interest but, as Justice Alito, explained, “need not meet the high standard imposed” on regulations that regulate speech based on its content or the speaker’s viewpoint.

At least some municipalities welcomed the ruling, which impacts most local governments. “Gilbert looks forward to the opportunity to review its own regulations to make necessary changes consistent with the Supreme Court’s decision,” Michael Hamblin, the town’s attorney, said in a statement.