COMMENTS REQUESTED -- Apparent large telco liability based on USA Today facts

[David Farber <dave () farber net>]

Begin forwarded message:

From: Peter Swire <peter () peterswire net>
Date: May 11, 2006 8:28:39 PM EDT
To: dave () farber net
Subject: Apparent large telco liability based on USA Today facts

Dave:

        Perhaps your list can spot a flaw here.  Based on the statutory
language, it seems that the telcos face really large liability on the  
facts
as reported in USA Today.

        Thanks,

        Peter

http://thinkprogress.org/2006/05/11/telcos-liable/

This morning, USA Today reported that three telecommunications  
companies -
AT&T, Verizon and BellSouth - provided "phone call records of tens of
millions of Americans" to the National Security Agency. Such conduct  
appears
to be illegal and could make the telco firms liable for tens of  
billions of
dollars. Here's why:

    1. It violates the Stored Communications Act. The Stored  
Communications
Act, Section 2703(c), provides exactly five exceptions that would  
permit a
phone company to disclose to the government the list of calls to or  
from a
subscriber: (i) a warrant; (ii) a court order; (iii) the customer's  
consent;
(iv) for telemarketing enforcement; or (v) by "administrative  
subpoena." The
first four clearly don't apply. As for administrative subpoenas, where a
government agency asks for records without court approval, there is a  
simple
answer - the NSA has no administrative subpoena authority, and it is  
the NSA
that reportedly got the phone records.

    2. The penalty for violating the Stored Communications Act is  
$1000 per
individual violation. Section 2707 of the Stored Communications Act  
gives a
private right of action to any telephone customer "aggrieved by any
violation." If the phone company acted with a "knowing or intentional  
state
of mind," then the customer wins actual harm, attorney's fees, and  
"in no
case shall a person entitled to recover receive less than the sum of
$1,000."

    (The phone companies might say they didn't "know" they were  
violating
the law. But USA Today reports that Qwest's lawyers knew about the legal
risks, which are bright and clear in the statute book.)

    3. The Foreign Intelligence Surveillance Act doesn't get the  
telcos off
the hook. According to USA Today, the NSA did not go to the FISA  
court to
get a court order. And Qwest is quoted as saying that the Attorney  
General
would not certify that the request was lawful under FISA. So FISA  
provides
no defense for the phone companies, either.

In other words, for every 1 million Americans whose records were  
turned over
to NSA, the telcos could be liable for $1 billion in penalties, plus
attorneys fees. You do the math.

Prof. Peter P. Swire
C. William O'Neill Professor of Law
Moritz College of Law of
   The Ohio State University
Visiting Senior Fellow, Center for American Progress
(240) 994-4142, www.peterswire.net




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