The CLOUD Act’s Impact on Cross-Border Investigations

Written By Kristina Cervi

 

United States of America v. Microsoft Corporation

On December 4, 2013, in response to an application by federal law enforcement agents, Magistrate Judge James C. Francis of the Southern District of New York issued a search warrant that authorized the search and seizure of all e-mails and other information associated with an account believed to be furthering illegal drug trafficking. Under the §2703 warrant, Microsoft was compelled to disclose to the Government the contents of the specified e-mail account and all other records or information “[t]o the extent that the information . . . is within [Microsoft’s] possession, custody, or control.”

Microsoft’s Global Criminal Compliance team (“GCC”) produced the non-content information stored on servers in the United States. However, once the GCC determined that the target account’s data was hosted and stored in Dublin, Ireland, Microsoft filed a motion seeking to quash the warrant to the extent that it directed the production of information stored abroad. Microsoft cited the Stored Communications Act (“SCA”) and Rule 41 of the Federal Rules of Criminal Procedure (“Rule 41”) in their motion, claiming “[f]ederal courts are without the authority to issue warrants for the search and seizure of property outside the territorial limits of the United States.”

Judge Francis ultimately denied the motion which was later adopted by the District Court, and Microsoft was held in civil contempt for refusing to comply fully with the warrant. Microsoft appealed to a panel of the Court of Appeals for the Second Circuit contending the SCA and Rule 41 preempted the production of information stored overseas. The Government continued to argue that Microsoft had full control of the data and should be compelled to turn it over despite its overseas storage location. The Second Circuit reversed the denial of the motion to quash and vacated the civil contempt order, holding “that requiring Microsoft to disclose the electronic communications in question would be an unauthorized extraterritorial application of §2703” of the SCA as had been argued by Microsoft at the district level.

Tech Industry Takes It to The Hill

On October 16, 2017, the Supreme Court granted the United States’ Petition for Writ of Certiorari. As both parties prepared for their day before the highest court in the land, Microsoft sought creative solutions and spearheaded a lobbying effort on Capitol Hill. Joined by parties like Apple, Facebook, and Google that could also be implicated by warrants like the one at issue here, Microsoft drafted a letter to Congressional leadership on February 6, 2018. The letter encouraged members of both Houses to adopt the Clarifying Lawful Overseas Use of Data Act (“CLOUD Act”), a bipartisan bill that would amend the SCA and deliver “a logical solution for governing cross-border access to data” while also protecting customers and data holders with the law. The CLOUD Act essentially provided the legal answer to the question of law that parties argued over in front of the Court on February 27, 2018.

On March 23, 2018, Congress passed the $1.3 trillion Omnibus spending bill which included the CLOUD Act and President Trump signed the Consolidated Appropriations Act, 2018 into law. Under the CLOUD Act, companies must provide information properly requested by law enforcement, “regardless of whether such communication, record, or other information is located within or outside of the United States.” The CLOUD Act offers mechanisms for companies or the courts to reject or challenge the warrants, if the request violates the privacy rights of the foreign country storing the data, and if it does not overcome the muster of international comity which seeks to restrain the reach of domestic laws abroad.

Consequently, on April 17, 2018, the Supreme Court of the United States dismissed United States v. Microsoft Corp. on grounds of mootness, citing to the authority of the CLOUD Act. The Court explained that the Government had obtained a validly legal search warrant under the new version of §2703 and that no outstanding disputes remained.

What’s next for cross-border investigations?

The CLOUD Act ultimately provides clarity in a field of law that was in desperate need of an update. The Act preserves the common law right of cloud service providers to challenge search warrants where a conflict of laws exists and to evolve in the wake of the European Union’s new General Data Protection Regulations. Tech companies expect that Europe will consider the comity analysis requirements of the CLOUD Act and decide its own fate in terms of U.S. search warrants.

Further, the law will supplement Mutual Legal Assistance Treaties, which have become increasingly antiquated in the Digital Age. The law provides authority and a framework for the U.S. to establish international agreements. This framework only supports executive agreements with countries that protect privacy and human rights by mandating a broad and robust set of protections found enumerated in the U.S. Constitution. These include the rule of law and principles of nondiscrimination; lawful interference with privacy; fair trial rights; freedom of expression, association, and peaceful assembly; and prohibitions on arbitrary arrests and prohibitions or cruel and unusual punishment.

Overall, the CLOUD Act is a modern legislative action worthy of praise. Companies like Microsoft are able to preserve data privacy in the interest of their consumers through the outlined appellate process. Law enforcement has clarity in an area of law that was becoming increasingly vague, and the CLOUD Act will now streamline the global data exchanges commonly used in cross-border investigations of major crimes. Lastly, the international community will benefit from the enhanced privacy protections and the outlined executive agreement requirements that provide legal structure for the digital evidence gathering phases of criminal litigation.


Sources Cited

Devin Coldewey, Supreme Court dismisses warrant case against Microsoft after CLOUD Act renders it moot, TechCrunch (Apr. 17, 2018).

Taylor Hatmaker, As the CLOUD Act sneaks into the omnibus, big tech butts heads with privacy advocates, TechCrunch (Mar. 22, 2018).

In re Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corp., 15 F.Supp.3d 466 (S.D.N.Y. 2014).

In re Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corp., 829 F.3d 197 (2nd Cir. 2016).

United States v. Microsoft Corp., 584 U.S. ___ (2018).

2383, 115th Cong. (2018).

Dylan Matthews, Congress’s new $1.3 trillion omnibus spending bill, Vox (Mar. 23, 2018).

John Wagner and Mike DeBonis, Trump signs $1.3 trillion spending bill despite veto threat on Twitter, The Washington Post (Mar. 23, 2018).

Brad Smith, The CLOUD Act is an important step forward, but now more steps need to follow, Microsoft (Apr. 3, 2018).

Photo courtesy of FCW.

Taking a Gander at Partisan Gerrymander

Written By Kyle Palmore

 

Background

This term has seen a number of partisan redistricting cases come before the United States Supreme Court. So far, the Court has heard oral arguments for Gill v. Whitford and Benisek v. Lamone. Later this month, the Court will hear oral arguments for a third case concerning partisan gerrymandering: Abbott v. Perez. The decisions from these three cases have the potential to greatly impact the jurisprudence of partisan redistricting. The last time the Supreme Court spoke about partisan redistricting was in Vieth v. Jubelirer in 2004. In Vieth, the Court held that challenges to partisan gerrymanders were not in the purview of courts and were non-justiciable. As in many cases in the Supreme Court, Justice Anthony Kennedy was the swing vote. Justice Kennedy believed that a challenge to an extreme partisan map could have been justiciable if there was a clear standard for deciding when partisan redistricting becomes unconstitutional. As oral arguments for Abott near, the question remains whether Justice Kennedy will find if any of these cases present a clear standard for the Court to apply.

Gill v. Whitford

At the start of this term, the Supreme Court heard oral arguments for Gill v. Whitford, which involved challenges to Wisconsin’s voting districts under the First and Fourteenth Amendments. In 2016, the district maps made by the Republican-controlled legislature in 2011 were declared unconstitutional as partisan gerrymander. A three-judge panel in the United States District Court for the Western District of Wisconsin concluded that the maps showed “bad intent and bad effect” and that the map drawers used partisan measurements to ensure there was a Republican advantage.

During elections in 2012 and 2014, Democrats won a majority the votes in the statewide Assembly elections; however, Republicans took a majority of the seats in the state Assembly. For example, in 2012, Republicans made up only 48.6 percent of the vote, but gained 60 seats in the Assembly. Conversely, Democrats won 53 percent of the votes and only took 39 seats in the Assembly. Wisconsin Republicans argued that the maps reflected a natural geographic advantage.

When bringing this case before the Court, the plaintiffs argued that the state legislature diluted the Democratic vote by “cracking” and “packing” districts. The plaintiffs used the “efficiency gap” to make their argument. The efficiency gap shows the number of votes that are “wasted” during elections. Votes can be “wasted” in two ways. First, there can be more votes than needed in order for a candidate to win. Second, there can be too few votes to elect a candidate. The efficiency gap determines if a redistricting plan is biased against a party that “wasted” more votes than the other party. Positive values show an advantage for Democrats and negative values show an advantage for Republicans.

In the two aforementioned elections, the efficiency gaps were -13 and -10, respectively. These numbers identified a significant advantage for Republicans

Benisek v. Lamone

At the end of March, the Court heard a second case involving partisan gerrymandering, Benisek v. Lamone. In 2012, Roscoe Bartlett, a Republican, lost the congressional seat he held for 20 years by a 20 percent margin in Maryland’s 6th Congressional District. Previously, in 2010, Bartlett won that same seat by a 28 percent margin. Consequently, Republican voters in Maryland challenged the redrawing of the congressional district under the First Amendment.

Plaintiffs argued that the Democratic lawmakers in Maryland redrew the district in order to retaliate against those who supported Barlett and to dilute the Republican vote in the district. They further argued the district was redrawn to include more Democrats and to exclude Republicans. They argued that this violates the First Amendment as public officials may not retaliate against individuals for their expression. Here, lawmakers retaliated against voters that associated with a particular party when they redrew the district with the intent to dilute votes for the party not in power. Because of this intent, the Plaintiffs argued the new district map must be invalidated.

During oral arguments, Justice Kennedy expressed interest in the issue of a legislature drawing districts to favor the party currently in power. When the district in question was redrawn to accommodate for a population growth, lawmakers moved the district’s boundaries to include a very Democratic district. This change made the district more likely to vote Democrat than it had in the past. He asked whether this test would preclude legislatures from redrawing districts to account for a population shift that reduced support for a party. This question resembled one Justice Kennedy asked lawyers in Gill.

Abbott v. Perez

This month, the Supreme Court will again take on partisan redistricting via Abbott v. Texas. Abbott is the result of two Texas lawsuits, both named Abbott v. Perez, which centered around two maps—one for congressional districts and one for state legislative districts.

Starting in 2011, voters in Texas filed lawsuits alleging Texas violated both the U.S. Constitution and the Voting Rights Act. The lawsuits alleged that, between 2000 and 2010, Texas’ Republican-controlled legislature redrew congressional and legislative plans in order to dilute the vote of Latinos and African Americans, who made up 90 percent of Texas’ new population growth. Due to the growth, the state gained four new seats in the House of Representatives. In 2011, the Texas legislature redrew district maps to incorporate the new seats.

The newly redrawn district maps never went into effect. A three-judge panel in the United States District Court for the Western District of Texas blocked district maps prior to the 2012 election and created interim maps. The State appealed to the panel’s decision to the Supreme Court, which “threw out” the interim maps and told the State’s legislature to use the old district maps to draw new maps. In 2013, the Texas legislature adopted new maps, which were virtually the same to the maps it drew in 2011.

The maps, the 2011 district map and the newly adopted 2013 district maps, were once again taken to the district court. In August 2017, a three-judge panel in the United States District Court for the Western District of Texas invalidated two congressional districts. It found that one violated both the U.S. Constitution and the Voting Rights Act and that the other was drawn to minimize minority voting power and constituted impermissible racial gerrymandering. The panel also found that state legislative districts were intentionally packed and cracked districts in the Dallas-Fort Worth Area in order to dilute the minority vote. The most important holding for the panel was that the State’s districts were redrawn based on a “litigation strategy” as parts of the 2011 maps that were declared unconstitutional remained unconstitutional in the 2013 maps. The State did not redraw the maps to comply with the U.S. Constitution or the Voting Rights Act, but rather to shield the State from further legal challenges. The State was ordered, once again, to redraw the maps.

Shortly after the panel’s decision, Texas filed an appeal to the United States Supreme Court, asking for an injunction. The Court issued a temporary stay in response, and the consolidated cases will be argued on April 24, 2018.

Conclusion

Over the past six months, the Supreme Court has entertained a myriad of arguments concerning political redistricting. Of the nine Justices, only four were in the bench in 2004 when the court heard Vieth – Clarence Thomas, Ruth Bader Ginsburg, Stephen Breyer, and Kennedy. In Vieth, Justices Thomas and Kennedy voted with the majority; and Justices Breyer and Ginsburg joined the dissent. Nevertheless, the question remains: has the Court finally found a case that presents a clear standard that can be used in determining whether or not state legislatures have engaged in unconstitutional partisan gerrymandering? While the outcome of these cases is not clear, one thing is: Justice Kennedy remains the swing vote on this issue, and his vote could potentially change how partisan redistricting is viewed.

 


Sources Cited

Adam Liptak, Supreme Court, Again Weighing Map Warped by Politics, Shows no Consensus, N.Y. Times (Mar. 28, 2018).

Adam Liptak and Michael D. Shear, Kennedy’s Vote is in Play on Voting Maps Warped by Politics, N.Y. Times (Oct. 3, 2017).

Amy Howe, Argument Preview: Texas Redistricting Battles Return to the Court, SCOTUS Blog (Apr. 18, 2018).

Barry C. Burden, Everything You Need to Know About the Supreme Court’s Big Gerrymandering Case, Washington Post (Oct. 1, 2017).

Greg Stohr, U.S. Supreme Court Grapples with Partisan-Gerrymandering Lawsuits, Bloomberg (Mar. 28, 2018).

Mark Stern, Undecided Court, Slate (Mar. 28, 2018).

Robert Barnes, Even on Second Look, Supreme Court Seems Stumped on Gerrymandering Issue, Washington Post (Mar. 28, 2018).

The Supreme Court Takes on Two Redistricting Cases from Texas, Economist Blog (Jan. 15, 2018).

Photo courtesy of ExchangeWire.

There’s Something Brewing in your Coffee…But Do We All Need to Know?

Written By Amanda Cramer

 

California is relatively progressive when it comes to most issues. But has it gone too far? A judge in Los Angeles County Superior Court ruled that coffee must now carry a warning about a cancer-causing chemical simmering inside each cup. While such a decision may sound ominous, a look inside California’s mechanism for imposing such warnings proves that these cancer notices may be anything but.

Proposition 65

All over California, people cannot seem to escape warning signs in bold, capital letters of the risk of cancer, birth defects, or other reproductive harms from various products. This all began when California voters passed legislation called Proposition 65, formally known as the Safe Drinking Water and Toxic Enforcement Act of 1986. Under Proposition 65, the Office of Environmental Health Hazard Assessment compiles a list of chemicals, currently at nearly 900, that are known to cause cancer or birth defects. Businesses in California are then required to alert consumers if any of these chemicals are present on their premises. The law relies on citizen enforcement, and it allows anyone to sue. There is no injury requirement, and plaintiffs do not even need to have purchased the product that is the subject of the suit. Further, the law incentivizes private plaintiffs by allowing them, if successful, to share in any civil penalties awarded, in addition to entitling them to seek attorney’s fees.

Council for Education and Research on Toxics v. Starbucks Corp., et al.

In 2010, a not-for-profit group, the Council for Education and Research on Toxics, sued 90 coffee retailers, arguing that they were violating Proposition 65 by failing to warn consumers of a chemical in their coffee that could cause cancer. The chemical, acrylamide, forms naturally in some foods as they are cooked at high temperatures, and it has been found to cause cancer in mice in high doses. That danger has placed acrylamide on the Proposition 65 list of cancer causing chemicals.

The case was divided into phases, with the first phase of the trial covering “Defendants’ affirmative defenses of (1) ‘no significant risk level’; (2) First Amendment; and (3) federal preemption.” The court rejected the defendants’ arguments during this phase of the trial and, thus, the defendants moved on to phase two of the case, where a ruling was released on March 28, 2018.

In phase two, the defendants––who include Green Mountain Coffee Roasters Inc., the J.M. Smucker Company, Kraft Foods Global, and Starbucks, among others––argued that the levels of acrylamide in coffee should be considered safe and that the health benefits of coffee outweigh the risks of acrylamide. The defendants tried to prevail at trial by showing that, while their product may contain acrylamide, considerations of public health would support such an alternative risk level for exposure to the chemical, in addition to showing that this alternative level is supported by a quantitative risk assessment. They presented evidence from renowned experts, such as David Kessler, the former head of the U.S. Food and Drug Administration under both President Bush and President Clinton. Another expert, who performed a quantitative risk assessment of acrylamide, was also used. However, the court ultimately ruled that the “[d]efendants failed to satisfy their burden of proving by a preponderance of evidence that consumption of coffee confers a benefit to human health.”

The defendants are represented by lawyers from many of the nation’s largest law firms. The plaintiff is represented by a four-person firm. Ultimately, this was a David-and-Goliath battle, and David and his slingshot prevailed.

Burden of Proof 

The defendants’ loss might seem surprising, however, much of it may have to do with the high burden of proof they faced in this case. When a plaintiff brings suit under Proposition 65, he or she only needs to show that a chemical in a product sold by a defendant is listed as harmful under the law. The burden is then shifted to the defendant to prove that the chemical is present at such a low level that the product does not require a warning. Here, the defendants had to prove that acrylamide in coffee would not cause one or more cases of cancer for every 100,000 people exposed, over a period of 70 years.

Statistically, meeting this empirical burden was a near practical impossibility for the defendants. The lifetime risk of cancer is one in two; thus, of the theoretical 100,000 coffee drinkers exposed to acrylamide, roughly 50,000 of them would eventually develop cancer for a host of other reasons in 70 years. Therefore, proving that one of those 100,000 people would develop cancer specifically because of acrylamide, rather than family history, genetics, or any other carcinogenic exposures would require a 70-year long study carefully controlling all the exposures to everything on earth in more than 100,000 people. But experimenting with 100,000 people would still not be enough. It would require more than 85 billion participants to build up the statistical power to support a strong claim that acrylamide does not cause cancer in one or more people out of every 100,000. This would become the largest, longest, and costliest study in the history of biomedical research, by orders of magnitude.

Conclusion

While this may all seem daunting, it is important for manufacturers, distributors, and retailers outside of California to be aware. Proposition 65 allows a suit to be initiated against any company with more than 10 employees doing business in California. After a successful suit, not only would a warning be necessary for the product, but companies could also be required to pay penalties of “up to $2,500 ‘per day for each violation.’” This means that even small, New York companies, who have no similar law in their states, but that occasionally sell products to stores in California, should be aware of the listed chemicals under Proposition 65 in order to make their business decisions accordingly.

Although many businesses have been ‘steaming’ over the ruling, they are not the only ones feeling the impact. When cancer notices are brewing everywhere, from indoor garages to the Disneyland Resort to any place that serves alcohol, this may quickly diminish the purpose of the law and make customers overlook such warnings.

 

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Sources Cited

Alexander Nazaryan, Will coffee in California come with a cancer warning?, Los Angeles Times (Feb. 18, 2018).

Brendan Borrell, Are Proposition 65 warnings healthful or hurtful?, Los Angeles Times (Nov. 2, 2009).

California coffee may soon come with a cancer warning, but should consumers worry?, CBS News (Feb. 8, 2018).

Council for Educ. and Research on Toxics v. Starbucks Corp., et al., No. BC435759, (Super. Ct. Cal. Mar. 28, 2018).

David Spiegelhalter, Coffee and cancer: what Starbucks might have argued, University of Cambridge: Winton Centre for Risk and Evidence Communication (Apr. 2, 2018).

Jenna Greene, Daily Dicta: Bitter Brew: What Went Wrong in California’s Coffee Lawsuit, The American Lawyer: Litigation Daily (Apr. 2, 2018).

Nate Raymond, Starbucks coffee in California must have cancer warning, judge says, Reuters (Mar. 29, 2018).

Norman C. Hile, et al., Beware Calif.’s Proposition 65, Law 360 (Jul. 19, 2011).

State of Cal. E.P.A. Office of Envtl. Health Hazard Assessment Safe Drinking Water And Toxic Enforcement Act Of 1986, Chemicals Known to the State to Cause Cancer or Reproductive Toxicity (Dec. 29, 2017).

Photo courtesy of CNN.

Detained Immigrant Minors Guaranteed Access to Abortions


Facebook Faced with Data Breach Controversy  

Written By Amy Johnson

 

The New York Times recently revealed that Cambridge Analytica, a data analysis firm based in London, was hired by the Trump Campaign to “harvest private information from the Facebook profiles of more than 50 million users without their permission.” Facebook has faced growing backlash since the information was revealed – their stocks have been dropping, Chief Security Officer Alex Stamos has stepped down, Chief Executive Officer Mark Zuckerberg is expected to brief congressional committees, and as of March 21, 2018, both Facebook and Cambridge Analytica have been sued in the United States District Court for the Northern District of California. Mark Zuckerberg called the scandal “a major breach of trust” during a recent interview with CNN.

What did Facebook and Cambridge Analytica do?

Cambridge is a company owned by billionaire Robert Mercer. Steve Bannon, a former Trump adviser, is alleged to have presided over a project with Cambridge Analytica in which information was obtained to construct and analyze voter profiles. The company worked with the Trump Campaign team to compile millions of United States Facebook users’ profiles to build a program to predict and influence voter choices. This data was obtained through Aleksandr Kogan, a Cambridge University researcher, who created a personality quiz for users to take on Facebook. Once a user linked into the quiz, Kogan was able to access the user’s page and data. Through several hundred thousand quiz takers, Kogan was able to access more than 50 million Facebook users’ profiles, later targeting them with personally-tailored political advertisements. In other words, if a user took the quiz, he or she (and thousands of Facebook friends’ ‘likes’ and ‘dislikes’) were accessible.

Kogan’s access to this data was known to Facebook and was consistent with Facebook’s developer application program interface (“API”). The Facebook developer page shows that their application program creator allows developers of apps to not only get user’s account information, but to access information like “friends_interests” and “friends_religion_politics.” However, Facebook’s policy only allowed for the collection of friends’ data for the purpose of improving user experience in the app – not for sale or advertising uses. This “unprecedented data harvesting” of millions of Facebook users’ information by Cambridge Analytica, and more specifically, the use of that data, raises many new questions about Facebook’s role in targeting United States voters in the past election.

In the midst of the reveal of the Cambridge Analytica breach, President Donald J. Trump took to Twitter to discuss his campaign’s success in utilizing social media during his campaign. He tweeted, “Remember when they were saying, during the campaign, that Donald Trump is giving great speeches and drawing big crowds, but he is spending much less money and not using social media as well as Crooked Hillary’s large and highly sophisticated staff. Well, not saying that anymore!”

What Laws Might Apply to Facebook and Cambridge Analytica?

With one lawsuit filed, and a potential for more filings in the future, there are several ways that Facebook users and Facebook could proceed to court.

(1) Computer Fraud and Abuse Act (CFAA)

The CFAA provides criminal and civil penalties for unauthorized access to computer networks. However, the statute itself focuses on the “authorization” of the “accesser” which, technically, Kogan had. The quiz created required voluntary action on part of the user in taking the quiz, which notified the user of access to their user profiles. In a recent Ninth Circuit decision, the Court stated “a defendant can run afoul of the CFAA when he or she has no permission to access a computer” when the permission granted “has been revoked explicitly.” However, the Court did not say that ‘overstaying one’s welcome’ was a violation of the CFAA. Here, Kogan had authorization to the Facebook profiles and that authorization was not revoked during his access. He may have done more than “welcome,” but it will be up to the courts to determine whether or not this constitutes a violation.

The CFAA also punishes users who exceed authorized access, which could be where Kogan is deemed to be in violation. However, the language in the statute states that exceeding authorized access is accessing “a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled to.” When Kogan created the quiz, he obtained access to information in a way allowed by Facebook’s API; yet, when that information was subsequently used beyond what Facebook allows, it lent itself to a possible violation of the CFAA.

(2) Federal Trade Commission (FTC) Rules

Bloomberg recently reported that the FTC is also investigating whether Facebook violated the terms of the 2011 consent decree between the social media site and the FTC. The decree provided that Facebook needs to be transparent about user privacy and to not deceive its users as to how their data will be used. If a court finds that Facebook violated this policy, the penalty could be up to $40,000 per day per violation. Lawmakers have also asked the FTC to look into whether Facebook should pay damages to individual users. The FTC said in a statement that “it takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook.” A group of 37 attorneys have sent a letter to Mark Zuckerberg for details on Facebook’s privacy safeguards.

(3) Securities Law

Securities law encourages companies to “disclose material information promptly, including disclosures pertaining to cybersecurity matters.” Facebook’s 2014 and 2015 reports have no mention of the Cambridge Analytica incident, and the site, as a whole, mentions data breach as a risk but never discloses if any breaches took place. Moreover, Facebook never reported this incident to investors or to the Securities Exchange Commission (SEC). It remains to be seen whether the SEC will pursue action against Facebook, along with the potential forthcoming actions of the FTC and individual users.

What’s Next?

Moving forward, users can expect to see hearings, lawsuits, potential jail time, and in general terms, what has been described by some as a regulatory nightmare. For Facebook, pinning this breach on Kogan and Cambridge may be key. If not, users may observe the downfall of the social media tycoon.

 


Sources Cited

Andrew Keane Woods, The Cambridge Analytica-Facebook Debacle: A Legal Primer, Lawfare (March 20, 2018).

Carole Cadwalladr, Emma Graham-Harrison, Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach, The Guardian (March 17, 2018).

Facebook, Inc., v. Power Ventures, Inc., 844 F.3d 1058, 1067 (9th Cir. 2016).

Computer Fraud & Abuse Act, 18 U.S.C.A. § 1001, Pub. L. 99-474 (1986).

Tiffany Hsu & Cecilia Kang, Facebook Comes Under Scrutiny of Federal Trade Commission, New York Times (March 26, 2018).

Eric Auchard, Jonathan Stempel, Facebook, Cambridge Analytica sued in U.S. by users over data harvesting, Reuters (March 21, 2018).

Dustin Volz, David Shepardson, Munsif Vengattil, Facebook investors fret over costs as Zuckerberg apologizes, Reuters (March 22, 2018).

Photo courtesy of New York Post.

It’s All Political: Minnesota Voters Alliance v. Mansky

Written By Sara D. Lupi

 

“So somebody goes to the polling place and is wearing a shirt, doesn’t say anything about a candidate or a ballot issue, but a particular election judge, one of these people picked by one of the two parties, says, oh, that’s political . . . so now this person has a choice.  The person can wear a bathrobe or some kind of coverup to go in and vote . . . Or the person can be listed as a bad Minnesotan and, at some point down the road, potentially fined $300, found to have committed a petty offense.”  – U.S. Supreme Court Justice Samuel Alito

Background

During the November 2010 election, Petitioner Andrew Cilek entered his designated polling place in Hennepin County. He was wearing a “Please I.D. Me” button and a Tea Party t-shirt with the message “Don’t Tread on Me” and a Gadsden Flag.  Cilek twice tried to enter the polling place, and on each attempt he was told that he either needed to cover his t-shirt and button, or take them off in order to vote. He refused.  On his third try, Cilek was allowed to vote, but the election judge wrote down his name and address for potential prosecution.

Pursuant to Minnesota election law, Section 211B.11, all political apparel is banned inside a polling place, including political badges, political buttons, or other political insignia.  Campaign-related material promoting specific candidates is prohibited, as well as material “designed to influence and impact voting (including specifically the ‘Please I.D. Me’ buttons)” and “[m]aterial promoting a group with recognizable political views (such as the Tea Party, MoveOn.Org, and so on).”  Election judges at each polling place determine whether an individual is in violation of the statute.  Those in violation are asked to remove the materials or to cover them up.  Those who refuse to comply are still allowed to vote, but their names are recorded for potential prosecution.

Cilek, along with his organization, the Minnesota Voters Alliance (together, Petitioners), filed a lawsuit claiming Section 211B.11 violated the First Amendment, both facially and as-applied.

The District Court dismissed Petitioners claims, and on appeal, the Eighth Circuit upheld the ban against Petitioners’ facial claim and reversed the district court’s dismissal of the as-applied claim, remanding it back to the district court.  Petitioners filed their first petition for a writ of certiorari, which was denied by the Supreme Court, and the case proceeded in the lower courts, where the as-applied challenge was rejected again.  Petitioners then filed another writ of certiorari, limited to the facial challenge.  The Supreme Court granted writ and heard oral arguments on February 28, 2018.

Precedent

In Burson v. Tennessee, the Supreme Court upheld a section of the Tennessee Code which prohibited solicitation of votes and the display or distribution of campaign materials within 100 feet of entrance to polling places.  The Court found the code section to be narrowly tailored to serve the compelling state interest of protecting the right of its citizens to vote freely and effectively.

Petitioners’ Oral Arguments

Counsel for Petitioners began their argument by clarifying that the only question before the court was whether Section 211B.11 of Minnesota election law violated the First Amendment’s overbreadth doctrine.  Petitioners asserted that the statute goes beyond prohibiting advocacy for a particular candidate or ballot issue and that it prohibits “self-expression of personal values and associations.”  Petitioners distinguished these facts from Burson by characterizing their display of political material here as “passive” rather than the “active campaigning” which was at issue in Burson.  Petitioners further acknowledged that the State’s interests in protecting a citizen’s right to vote are addressed by anti-intimidation statutes, and they made the argument that there is no “right to vote free of being bothered at all.”

Justice Anthony Kennedy posited the question of whether political speech should be allowed in polling places at all, since voters are there to vote and nothing else.  Justice Ruth Bader Ginsburg and Justice Sonia Sotomayor built on this question, asking if a state could constitutionally limit any kind of political speech in a polling place, since it is not a public forum.

Respondents’ Oral Arguments

Counsel for Respondents began their argument by establishing that the State’s interest is to “protect the integrity of the elections[,]” which they intended to do “by preserving order and decorum in the polling place.”  The State’s position is that political material worn by voters might confuse and intimidate other voters.  The “test[,]” which Minnesota utilizes in determining if material is prohibited, is whether a “reasonable person would understand that the message that’s being delivered is one regarding electoral choices in the polling place.”

Justice Alito pointed out that in the current political climate, many things have a political implication; therefore, on election day, Alito mentioned how each voter would have to have knowledge of every candidate and every ballot question, thereafter determining if what they were wearing has a political connotation.  Counsel replied by pointing out that a reasonable person would only recognize those political messages that were “well known.”  In response to this, Justice Alito questioned Counsel as to whether rainbow flags on t-shirts would be permitted, or whether an NRA t-shirt would be permitted, as both could be linked to political issues.  Counsel responded that a rainbow flag would be allowed as long as there was not a question related to gay rights on the ballot.  However, an NRA t-shirt would not be allowed, as it has a “clear indication” that it relates to a political issue.

What’s Next?

Although Burson suggests otherwise, it is likely that the Justices will rule in favor of Petitioners, finding the statute not to be narrowly tailored.  As Justice Alito’s line of questioning suggests, in this political climate, many slogans and insignias can have a political connotation. Nevertheless, Respondent’s argument and reliance on Burson, that political material in the polling place could intimidate voters, is a valid state interest.  A decision is expected by June of this year, so we will have to wait a few months to find out if that interest is compelling, as well as whether Minnesota has narrowly tailored its voting laws to address that interest.

 


Sources Cited

Amy Howe, Argument preview: Justices to hear challenges to Minnesota voting dress code, SCOTUSblog (Feb. 23, 2018).

Amy Howe, Argument analysis: Justices debate decorum, line-drawing and “political apparel at the polls, SCOTUSblog (Feb. 28, 2018).

Amy Howe, Justices to hear challenge to Minnesota voting dress code: In Plain English, SCOTUSBlog (Jan. 22, 2018).

Burson v. Tennessee, 504 U.S. 191 (1992).

Petition for Writ of Certiorari, Minn. Voters Alliance v. Mansky (2017) (No. 16-1435).

Transcript of Oral Argument, Minn. Voters Alliance v. Mansky (2018) (No. 16-1435).

Photo courtesy of Pacific Legal Foundation.

USSF: Playing Monopoly or Soccer?

Written By Nick Constantino

 

The North American Soccer League (NASL) announced that it has canceled its 2018 season after it failed to receive a preliminary injunction, which would have prevented the U.S. Soccer Federation (USSF) from revoking NASL’s Division II status.

Background

USSF is the official governing body of soccer in the United States. The U.S. professional soccer structure, organized by USSF, is split into three different divisions (I, II, and III), with I being at the top of the pyramid, and III at the bottom. Similar to the structure of the National Collegiate Athletic Association (“NCAA”), Division I status is the most desirable. NASL’s Division I status signifies the highest level of competition and overall status, with several competitive and financial benefits, including better positioning in international competitions and higher-quality sponsorships and television deals. Those benefits decrease along with the division level.

To meet Division I standards, USSF requires a league to have at least 16 teams, stadiums with a capacity of more than 15,000, and that a certain number of those teams be located in cities that have a population of at least 2 million people. Currently, and likely for the foreseeable future, Major League Soccer (MLS) is the only sanctioned USSF Division I league in the United States.

In contrast, to meet Division II standards, USSF requires leagues to have at least 12 teams, in addition to having teams located in the Eastern, Central, and Pacific time zones. As of this year, the United Soccer League (USL) is the only sanctioned Division II league, which is the reason for NASL bringing a lawsuit.

There are currently no Division III leagues recognized by USSF. However, two leagues are reportedly eying Division III status by 2020.

NASL Fights Back

NASL is a professional men’s soccer league with five teams headquartered in New York City. A group of teams founded NASL in late 2009. From its inaugural season in 2011, it was sanctioned by USSF as a Division II league. However, in August of 2017, USSF revoked NASL’s Division II status because the league fell short of the two requirements, as NASL prepared to host only 8 teams for the 2018 season, none of which were located in the Central time zone.

In response, NASL filed suit in the U.S. District Court for the Eastern District of New York. NASL also requested a preliminary injunction to preserve its Division II status while the court considered the underlying claims.

NASL argues that USSF’s joint financial ties to MLS represent a fundamental conflict of interest, resulting in an antitrust violation that interferes with U.S. Soccer’s independence in setting and applying their standards to NASL and other Division II sanctioning. This is because MLS and USSF are partners in Soccer United Marketing, a company with an estimated value of $2 billion. NASL argues that being corporate partners is motivation for USSF to deny NASL Division II status because USSF is protecting their corporate partner’s interests by not allowing a potential competitor to the MLS. Although NASL and MLS would not be direct competitors if USSF granted the NASL Division II status, the next ‘step up’ for NASL would be Division I status, consequently placing NASL in direct competition with MLS.

Hearing the Injunction

During the preliminary injunction hearing, NASL did not challenge the authority of USSF to establish divisional tiers or even promulgate standards for professional leagues, both issues potentially subject to antitrust regulation. Instead, NASL attempted to eliminate the standards it did not meet, arguing a concerted effort between USSF, MLS, and USL to effectively ‘crowd’ NASL out of the soccer market.

Under federal antitrust laws, a court may issue a preliminary injunction where a party shows (1) irreparable harm; (2) a likelihood of success on the merits of the original claim; (3) a balance of the hardships tipping decidedly in favor of the moving party; and (4) that a preliminary injunction is in the public interest. However, the court will only grant an injunction in a situation altering a result already decided (in this case, USSF revoking NASL’s division II status) “upon a clear showing that the moving party is entitled to the relief requested.”

Here, Judge Margo K. Brodia found that NASL would suffer “irreparable harm” upon losing its Division II status. She determined that NASL might even fold as a league or lose valuable investors if USSF revoked their Division II status. Both of those factors, she concluded, constitute “irreparable harm.”

She then found that the hardship NASL would suffer “tips slightly” more in favor of NASL, in comparison to the harm USSF would sustain by disrupting its regulatory authority, and that granting the injunction would not harm the public interest.

Despite all of this, Judge Brodia found that NASL failed to prove they were clearly entitled to the relief requested. She determined that, “despite the ample evidence of a conflict of interest between [USSF] and MLS, [NASL] fails to present sufficient evidence of undue influence in the actual standard-setting process.” Judge Brodia did not think that the conflict of interest between USSF and MLS influenced the decision to deny NASL’s status, rather, she found that NASL failed to meet Division II requirements due to their own fault.  Consequently, Judge Brodia denied NASL’s claim.

NASL appealed the ruling to the Second Circuit on December 15, 2017. In their appeal, NASL argued that the District Court abused its discretion in applying the preliminary injunction standard.

On February 23, 2018, the Second Circuit affirmed Judge Brodia’s decision.

What’s Next?

On February 27, 2018, NASL’s Interim Commissioner, Rishi Sehgal, announced that the league was cancelling its 2018 season and would be shifting its focus “to securing the longer-term advancement of soccer in this country, not only for the NASL, but for all soccer fans, clubs, and communities impacted by the USSF’s restrictions on competition.”

Just one week after the decision to cancel the upcoming season, NASL dropped down to just three teams. The New York Cosmos, Miami FC, and Jacksonville Armada will instead play this year in the National Premier Soccer League, a semi-professional competition not sanctioned by the USSF.

 

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Sources Cited

NASL Staff, North American Soccer League Announces Cancellation of 2018 Season, NASL (Feb. 27, 2018).

Injunctive Relief for Private Parties, 15 U.S.C. § 26 (1914).

Otoe-Missouria Tribe of Indians v. N.Y. State Dep’t of Fin. Servs., 769 F.3d 105, 110 (2d Cir. 2014).

Anthony Gruppuso, NASL Cancels Complete 2018 Season After Court Ruling, ESPN (Feb. 27, 2018).

Jeff Carlisle, NASL Sues U.S. Soccer Directors Over Acting to Protect Interests, ESPN (Feb. 6, 2018).

Photo courtesy of NASL.com.

Georgia Tax Bill Clear for Takeoff While Second Amendment Grounds Delta’s Exemption

Written By Erika L. Simonson

Since the February shooting in Parkland, Florida, several companies have ended their relationships with the National Rifle Association (NRA). One corporation, Delta Air Lines, responded to the tragedy with an attempt to “remain neutral” in the national gun debate by removing its discount for NRA members. However, instead of removing itself from the gun debate, Delta found its company at the center of the conversation.

Background

Seventeen students and adults were killed on February 14, 2018, when a lone gunman opened fire in Marjory Stoneman Douglas High School with an AR-15 assault rifle. According to The Guardian, this was the eighth shooting of the year in the United States to have resulted in a death or injury.

The nation’s response to Parkland was swift, led in part by the activism of some students present in the high school during the attack. Companies like Walmart, Kroger, L.L. Bean, and Dick’s Sporting Goods announced they would no longer sell firearms to anyone under 21 years of age. REI cut ties with Vista Outdoor, a company that manufactures guns and supports the NRA. MetLife, Hertz, Enterprise Holdings, and United Airlines ended discount programs for NRA members. Finally, Delta Air Lines also ended their NRA discount program in what they called an attempt to “remain neutral” in the national gun debate.

Action in Atlanta

While these companies’ actions were met with both applause and criticism nationwide, Delta became the center of attention for Georgia legislators. Within days of Delta’s statement about removing its NRA member discount and taking a neutral stance, the Georgia legislature struck down a jet fuel tax exemption that would have been lucrative for Delta, the state’s largest private employer.

Georgia began offering this tax break to a financially-struggling Delta after the recession in 2008. The state stopped offering that tax cut in 2015, but it was on track to reinstate it again this year. Days after Delta’s statement, however, the proposed tax break was killed in the Georgia Senate, following a push by Lieutenant Governor Casey Cagle. Georgia Governor Nathan Deal is expected to sign the tax bill, sans jet fuel exemption. This missed tax exemption opportunity for Delta will add up to nearly $50 million a year.

Delta and First Amendment Rights

The first free speech case involving a business was decided in 1952 in Joseph Burstyn v. Wilson, in which the Supreme Court of the United Stated (SCOTUS) struck down a New York law that forbid the commercial showing of any film deemed “sacrilegious.” In 1976, in Virginia Pharmacy Board v. Virginia Citizens Consumer Council, SCOTUS created the “commercial speech doctrine,” which gave courts the power to strike down laws regulating the market and advertising of products with no artistic, political, or expressive component. More recently, in 2010, SCOTUS held in Citizen’s United v. Federal Election Commission that corporations have the same free speech rights as individuals under the First Amendment. This means that SCOTUS’ previous decisions on freedom of speech would also protect the right of corporations – including Delta – to engage in political speech, symbolic speech, and to be free from compelled speech. In consequence, several media outlets have accused Georgia of violating Delta’s First Amendment rights.

Media outlets often rely on the 2011 decision Sorrell v. IMS Health for support of a First Amendment violation. In that case, SCOTUS struck down a Vermont statute, the Prescription Confidentiality Act, that prohibited the sale or use of a doctor’s prescribing habits for marketing purposes. The Act was passed in response to several pharmaceutical companies using individual doctors’ prescribing habits without the doctors’ consent. SCOTUS held that content-based or speaker-based restrictions on non-misleading commercial speech regarding lawful goods or services should be subjected to heightened judicial scrutiny. This heightened level of scrutiny requires the government to demonstrate with greater certainty that its purposes could not be achieved by means that do not entail speech restrictions.

Therefore, while on its face, Georgia’s “retaliation” against Delta may seem like a violation of Delta’s free speech rights, there is uncertainty as to whether any case would get very far in the courts. This is because this case is distinct from Sorrell, as Georgia did not pass a law that infringed upon Delta’s free speech, rather, Georgia declined to pass a law at all. Further, the Georgia legislators provided seemingly sufficient non-speech reasons for the tax bill.

Conclusion

Atlanta is Delta’s largest hub, at three times the size of the next two busiest hubs. Delta is unlikely to move its corporate headquarters, as it would be costly to separate the headquarters and Delta executives from the busiest hub. Georgia is also inclined to keep ties with the airline, since the Atlanta airport – Hartfield-Jackson – remains the busiest airport in the world. Moreover, Delta employs more than 30,000 people in the state and contributes more than $43 billion to the state’s economy each year.

In consequence, this missed opportunity of a $50-million savings may just be a ‘drop in the bucket’ for Delta, who reported more than $41 billion in revenue last year. So, despite the loss of this exemption, it is not likely we’ll see Delta break ties with Georgia anytime soon. It remains to be seen whether a lawsuit, or hardline conversation, will be born of this controversy.

 

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Sources Cited

Alana Wise, Georgia Lawmakers Kill Proposed Tax Break in Dig at Delta Over NRA Fight, Reuters (Mar. 1, 2018), https://www.reuters.com/article/us-usa-guns-delta-air-tax/georgia-lawmakers-kill-proposed-tax-break-in-dig-at-delta-over-nra-fight-idUSKCN1GD6M7.

Citizens United v. Federal Trade Commission, 558 U.S. 310 (2010).

Danielle Weiner-Bronner, Why Delta and Atlanta Need Each Other, CNN (Mar. 1, 2018), http://money.cnn.com/2018/03/01/news/companies/delta-atlanta-tax-break/index.html.

Jason Hanna, Faith Karimi and Emanuella Grinberg, Gunman Confessed to Florida High School Shooting, Police Say, CNN (Feb. 15, 2018), https://www.cnn.com/2018/02/15/us/florida-high-school-shooting/index.html.

Joseph Burnstyn, Inc., v. Wilson, 343 U.S. 495 (1952).

Julia Horowitz and Jackie Wattles, These Companies are Distancing Themselves From the Gun Industry, CNN (Mar 3, 2018), http://money.cnn.com/2018/03/03/news/companies/companies-cutting-ties-nra-gun-lobby/index.html.

Julie Creswell and Michael Corkey, Walmart and Dick’s Raise Minimum Age for Gun Buyers to 21, N.Y. Times (Feb. 28, 2018), https://www.nytimes.com/2018/02/28/business/walmart-and-dicks-major-gun-retailers-will-tighten-rules-on-guns-they-sell.html.

Lois Beckett, How Many U.S. School Shootings Have There Been in 2018 So Far?,  Gaurdian (Feb. 15, 2018), https://www.theguardian.com/world/2018/feb/14/school-shootings-in-america-2018-how-many-so-far.

Meagan Flynn, Boycott: REI, Mountain Equipment Co-Op Stop Selling Major Outdoor Brand with NRA Ties, Wash. Post (Mar. 2, 2018), https://www.washingtonpost.com/news/morning-mix/wp/2018/03/02/gun-boycott-rei-mountain-equipment-co-op-stop-selling-major-outdoor-brand-due-to-its-weapons-sales-nra-ties/?utm_term=.2c577a8a4071.

Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011).

Tiffany Hsu, ‘Our Values Are Not For Sale,’ Says Delta C.E.O. as Airline Considers Ending Divisive Discounts, N.Y. Times (Mar. 2, 2018), https://www.nytimes.com/2018/03/02/business/delta-nra-discount.html.

Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).

Photo courtesy of Small Town Rules.

Rick Gates Pleads Guilty to Criminal Charges

Written by Lisa Knab

 

Background

Rick Gates, a former campaign official for President Donald Trump, pleaded guilty to two criminal charges on February 23, 2018. The plea came less than 24 hours after a grand jury indicted him on a host of new charges.

With 32 total indictments, growing from the initial eight he faced as of October 2018, Gates sent a letter sent to family and friends. In it, he explained that despite his “initial desire to vigorously defend” himself, Gates made the decision to plead guilty in an attempt to protect his four children. In weighing a guilty plea against the costly and time-consuming process of proceeding to trial, Gates stated that he felt he would “better serve [his] family moving forward by exiting [the] process.”

The charges Gates pleaded guilty to include conspiring to defraud the United States and lying to the Federal Bureau of Investigation (FBI) when trying to secure an earlier plea deal. The conspiracy charge stemmed from an intense investigation, led by special counsel Robert Mueller, which uncovered what prosecutors allege to be a decade-long scheme. Prosecutors claim that Gates, led by long-time business partner Paul Manafort, laundered millions of dollars the pair made while working for a political party in Ukraine. According to the prosecution, the pair used the money to buy property and luxurious goods to support Manafort’s “lavish lifestyle.”

Manafort, who was also indicted on 32 charges, has maintained his innocence. In a statement made shortly after Gates’ guilty plea, Manafort stated that he “had hoped and expected [his] business colleague would have had the strength to continue the battle to prove [their] innocence.” Nevertheless, Manafort stated that Gates’ decision did “not alter [his own] commitment to defend [him]self against the untrue piled-up charges contained in the indictments against [him].”

The Plea Deal

As part of the deal, in exchange for admitting to conspiring to defraud the United States and lying to the FBI, the prosecution has agreed to drop various charges, including a forfeiture demand that, if convicted, could have made Gates liable for up to $18 million.

In addition, the deal provides that Gates will cooperate with Mueller and his associates in their continued investigation of Manafort. This is significant because, as Manafort’s long-time, right-hand man, Gates was trusted with information regarding Manafort’s alleged schemes.

Without the deal, and without considering the dropped charges, Gates could have faced up to 10 years in prison on the conspiracy and lying charges alone. However, under the deal, prosecutors have agreed that Gates will receive a recommended sentence of only four-to-six years, as well as a fine between $20,000 and $200,000. The final sentence will factor in Gates’ cooperation in aiding the investigation of Manafort.

Finally, Gates’ lawyer retains the right to advocate for an even lesser sentence based on Gates’ “disproportionate conduct” as compared to Manafort. A status hearing has been set for May 14, 2018, at which time the government will update the court on the status of the case, including Gates’ cooperation up until that point.

Cooperation and Additional Factors

While everyone following the investigations led by Mueller will likely have an opinion on the sentence Gates should receive, the final decision is in the hands of the judge. In addition to considering Gates’ cooperation and “disproportionate conduct,” the judge may consider various other mitigating or aggravating factors. An aggravating factor is a circumstance which would merit a greater sentence, while a mitigating factor is one which would support a lesser sentence.

As explained above, the judge will consider Gates’ cooperation when imposing a sentence. Depending on the actions of Gates in the coming weeks, this could serve as either a mitigating or aggravating factor. In other words, if Gates cooperates only minimally, the judge may view this as cause for a greater sentence. On the other hand, if Gates provides the government with a great deal of useful information concerning the activities of Manafort, the judge may view this as warranting a lesser sentence. Keeping in line with precedent, it is likely the judge will also consider any “disproportionate conduct,” any existence, or lack thereof, of a prior criminal record, as well as whether Gates feels genuine remorse.

Conclusion

While part of Gates’ plea deal includes a recommended sentence of four-to-six years, the actual sentence handed down is dependent upon factors weighed by the judge. The main factor for consideration will be his cooperation with the government in the investigation of Manafort. Therefore, it remains to be seen whether Gates’ actions, over the next few weeks, will play a key role in the fate of Manafort and/or mitigate the length of his own sentence.

 

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Sources Cited

Aggravating and Mitigating Factors, JUSTIA (last visited Feb. 24, 2018).

Debra Cassens Weiss, Former Trump campaign aide Rick Gates pleads guilty in special counsel probe, ABA Journal (Feb. 23, 2018).

Devlin Barnett and Spencer S. Hsu, Former Trump campaign official Rick Gates pleads guilty to 2 charges, The Washington Post (Feb. 23, 2018).

Zoe Tillman, Former Trump Campaign Adviser Rick Gates Pleaded Guilty To Conspiracy And Lying To Investigators, BuzzFeed News (Feb. 23, 2018).

Photo created by a court artist, courtesy of VOA News.

Powerball Winner Fights to Remain Anonymous

Written By Meghan Vumback

 A New Hampshire woman (“Jane Doe”) who won a $559.7 million Powerball jackpot in January can begin collecting her money while a Judge determines whether she can remain anonymous.

Background

Jane Doe purchased the Jan. 6 winning Powerball ticket at Reeds Ferry Market in Merrimack, New Hampshire . Upon realizing that the winning numbers matched the numbers on her ticket, she went to the Commission website and read the instructions on the back of her ticket. In following the Commission’s instructions, Jane Doe printed her name, address, city, phone number, and signed the back of her ticket. However, she was not aware that in doing so she was signing away her anonymity.

Upon retaining counsel, Jane Doe learned that the State of New Hampshire allows tickets to be signed by the trustee of a designated trust so that a winner can maintain privacy, and that in signing her name on the back of her winning ticket, she had relinquished her right to that privilege. Essentially, because she used her personal information, and not a designated trustee to sign the back of her lottery ticket, that information will become public once she submits her ticket to the Commission.

Oral Arguments

Jane Doe filed a complaint in the New Hampshire Superior Court in an effort to remain anonymous. Due to the size of her award, she is seeking to have her name, address, and other identifying information exempt from disclosure. She further requests that the Court authorize the winning ticket to be assigned to a trust that she has created for this purpose. Alternatively, Jane Doe requests that she be allowed to “white out” her name and replace the information with that of the trust she created.

Jane Doe is arguing that her privacy interests significantly outweigh the need for her information to become public. As a long-time resident of New Hampshire, and an engaged member of the community, she wishes to continue having the freedom to participate in community events and everyday activities without being targeted as the winner of half of a billion dollars.

The New Hampshire Attorney General’s office, which is representing the Commission, filed a legal response arguing that releasing Jane Doe’s information is consistent with New Hampshire’s Right-to-Know law, in which lottery tickets with the winner’s name, hometown, and prize amounts must be released.

The Attorney General’s office is asserting that the public’s right to know who won the nation’s eighth-largest lottery jackpot does outweigh Jane Doe’s minimal privacy interests. They argue first that failing to publicize her identity could erode trust in the lottery system. Second, they argue that the disclosure of a person’s name and hometown does not implicate substantial privacy interests.

What’s Next?

In order to make a determination on this case, the judge is going to have to look at the totality of the circumstances and balance the interests of both parties to determine which interest prevails: the privacy interests of Jane Doe, or the public’s interests in transparency in the operation of lottery games.

The $559.7 million Powerball jackpot is available for distribution and has been since January 22, 2018. Because Jane Doe has not yet submitted her ticket to the Commission, she is losing about $14,000 a day in interest. In consequence, a judge has allowed for the jackpot to be put into a temporary trust until a final ruling is made. It is unclear when Judge Charles Temple will decide the case.

“Regardless of whether the court ultimately decides in her favor, Ms. Doe has a strong interest in seeing this matter resolved as quickly as possible so that the prize can be claimed without further loss of interest.”

 

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Sources Cited

Aric Jenkins, New Hampshire’s Attorney General to Powerball Winner: You Can’t Remain Anonymous, Time (Feb. 13, 2018).

New Hampshire Powerball Winner Argues for Privacy But to Also Receive Winnings, CBS (Feb. 13, 2018).

Cleve R. Wootson Jr., All she has to do to collect a $560 million lotto jackpot is make her name public. She refuses., The Washington Post (Feb. 13, 2018).

Maurice Kreis, Jane Doe vs. Right-to-Know in NH: A Tragedy in the Making, InDepth.org (Feb. 16, 2018).

Complaint For Declaratory Judgement and Injunctive Relief and Request for Immediate and Expedited Hearing as Time is of the Essence, Jane Doe v. New Hampshire Lottery Commission (Jan. 29, 2018).

Photo courtesy via WEAU 13 News.