Articles by mjlst

When Divides Collide: How COVID-19 Has Further Exposed the Link Between the Digital Divide and the Education Gap

November 15, 2020
COVID-19, Economy, Education, Social Welfare

Schuyler Troy, MJLST Staffer

As we enter what public health experts warn will be the worst phase yet of the coronavirus pandemic, many Americans have been forced to reckon with the world of remote work—as of June 2020, 42 percent of the U.S. work force was working from home full time. Zoom, the now-ubiquitous video teleconferencing platform, saw an increase in meeting participation from approximately 10 million daily participants in December 2019 to at least 200 million by the end of March 2020. Zoom snafus have taken their place in the cultural zeitgeist, ranging from relatively harmless and even humorous technical snafus to more serious issues like “Zoombombing” and privacy concerns.

Among the more serious problems coming into sharper focus is the effect that remote learning has had on school-aged children, their parents, and their teachers. Without a national strategy regarding how to reopen schools for in-person instruction, states and localities were left to devise what ultimately became a patchwork of solutions. As of September 2, 2020, 73 percent of the largest school districts in the United States had chosen to offer only remote instruction at least to start the year, affecting more than 8 million students.

Early data from this massive shift to remote instruction has revealed some worrying signs. A majority of teachers across the United States report that fewer than half of their students are attending remote classes; 34 percent of teachers report that only 1 in 4 students are attending remote classes. Perhaps more distressing is the data showing stagnation in academic progress. Researchers at Brown University and Harvard University analyzed data gathered for over 800,000 students across the United States and found that through late April 2020, “student progress in math had decreased by about half in classrooms located in low-income ZIP codes, [and] by a third in classrooms in middle-income ZIP codes” as compared to a typical school year. An analysis by McKinsey & Company indicates that the effects on Black and Hispanic students could be even more pronounced.

While racial and socioeconomic education achievement gaps are not new, the shift to remote instruction nationwide appears to have exacerbated them. Pew Research data provides some clues as to one factor that may be driving this phenomenon: lack of access to reliable, high-speed Internet that is necessary for videoconferencing and online coursework. As of 2019, 61 percent of Hispanic Americans and 66 percent of Black Americans used broadband to access the Internet, as compared to 79 percent of white Americans. Only 56 percent of Americans making under $30,000 per year had access to broadband Internet at home, as compared to 92 percent of Americans making over $75,000. Rural communities, which tend to have higher poverty rates than urban and suburban communities, are also less likely to have access to broadband Internet; only 63 percent of rural communities had access to broadband Internet, as compared to 75 percent of urban communities and 79 percent of suburban communities.

Taken together, the data paints a clear and rather sobering picture: remote instruction is leaving some of America’s most vulnerable students even further behind than before.

Congress has taken action in recent years to address the broadband access disparity with the Digital Equity Act, introduced in the Senate in 2019 but not yet passed, which would require the National Telecommunications and Information Administration to establish grant programs promoting digital equity and inclusion, and building capacity for state governments to increase adoption of broadband by their residents. President-elect Joe Biden also pledged throughout the 2020 presidential campaign to expand access to broadband Internet through infrastructure plans and subsidies to low-income Americans who cannot afford broadband. With seeming bipartisan agreement, a rarity in today’s polarized Congress, the United States may be on track to begin closing the digital divide. How that affects the education gap is yet to be seen, but there is good reason to believe closing the digital divide will help narrow the education gap as well.

Pandemics are fairly rare, but they are near impossible to predict, either in frequency or severity. The world was caught off-guard by COVID-19, but the lessons learned, including the lessons on remote instruction, can and should endure. Further, remote instruction is now another metaphorical “tool in the belt” for school districts; many districts are now considering eliminating snow days and replacing them with remote instruction. The sooner there is action on bridging the digital divide, the better the chances that students have to maintain their learning goals.

Reviewing Interchange Fees: How Fifteen Years of Litigation Partially Explains the Grimace on Your Local Business Owner’s Face When You Pay for a $2.00 Product With a Credit Card

November 14, 2020
Antitrust, Class Action, Financial Law

Jesse Smith, MJLST Staffer

Credit and debit cards have become a fundamental part of commerce. It’s hard to beat the perceived simplicity, convenience, and security of using a small piece of plastic or your phone to purchase goods and services. But many forget that when you swipe your card at any business that accepts cards, the merchant does not receive the full amount of the price it charges for the good or service purchased. “Interchange fees” are costs levied against a merchant by the bank that issued the card being used for payment. Until 2010, interchange fees comprised between 1%-3% of the cost of the purchase. Their described purpose is to “cover handling costs, fraud and bad debt costs, and the risk involved in approving the payment.” In recent decades, card issuers have also used interchange fees to fund popular “rewards programs” offered in the form of cashback and points to cardholders.

Interchange fees have been the subject of intense legislative and litigation controversies for the last two decades. They highlight numerous salient issues at the intersection of law, economics, and technology. In 2004, a group of merchants filed a lawsuit against Visa,  Mastercard, and their card issuing banks (In Re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation 827 F.3d 223 (2d Cir. 2016)), alleging anticompetitive practices in how they set interchange fees and the contractual rules required of merchants who accepted their credit cards. The issues addressed in the case span multiple areas of law including corporate structure, antitrust, freedom of speech, and legislative process.

Over a decade later, the lawsuit culminated in one of the largest antitrust class action settlements in the history of the United States. To understand the history and progression of this lawsuit is to understand interchange fees more generally. I spoke to K. Craig Wildfang, a partner at Robins Kaplan LLP, and co-lead counsel for the merchants in the case. Mr. Wildfang’s explanation of the litigation and payment card industry overall provided unparalleled insight into this important aspect of how we conduct transactions in an increasingly tech driven society.

In 2004, Plaintiffs filed claims against Visa and Mastercard (who previously set interchange fee schedules), and the banks that collectively owned these card networks at the time. The lawsuit challenged the “collective setting of interchange fees” by the defendants as antitrust violations, more specifically, as price fixing conspiracies under Sections 1 and 2 of the Sherman Antitrust Act. It also challenged anti-steering rules written into the card networks’ contracts with merchants, which prevented businesses from using discounts, surcharges, or signage to “steer” customers towards use of cheaper methods of payment, including cash or checks.

Soon after the commencement of the lawsuit, Visa and Mastercard restructured their businesses by divesting the banks from their ownership interests and offering IPOs in their companies’ stock. Doing so would cause interchange fee rate setting to resemble the actions of single entities, rather than joint conduct propagated by the banks as owners of the credit card companies. Such restructuring posed a challenge to the merchants suing, as courts historically look at single conduct less skeptically than joint conduct in an antitrust context. Undeterred, Wildfang and the merchants’ counsel leveraged this action into an additional antitrust claim under § 7 of the Clayton Act (which utilizes a lower standard of proof for anti-competitive behavior). Thus, they were able to obtain discovery that, in Wildfang’s estimation, made it “100% clear that the only reason they [restructured] was to try to minimize their antitrust liability.”

After years of litigation, mediation, and even a DOJ investigation into the defendants, in 2012, the parties finally reached a historic multibillion-dollar settlement that also saw Visa and Mastercard lift their contractual bans on steering policies. The 2nd Circuit struck down the settlement on appeal based on a conflict from the same class counsel representing the plaintiffs for both monetary and injunctive relief. Consequently, Wildfang and Robins Kaplan were appointed as counsel for 23(b)(3) plaintiffs seeking monetary relief. Undeterred by this setback, after further amended complaints, discovery, and mediation, Wildfang and class counsel achieved another victory in 2019, securing a $6.25 billion settlement for over 10 million merchants, before reductions for opt outs. Additionally, Visa and Mastercard did not reinstate any anti-steering provisions into their contracts.

While litigation was a necessary element of relief, the merchants’ counsel understood this was only part of the solution. Wildfang noted that “when we started the litigation, we knew there would be these ancillary battles, and we decided as the leadership of the litigation, that it was in the interest of our clients . . . to play a productive role in these other . . .  fora.”

In 2010, as part of the Dodd-Frank Wall Street Reform Act, Senator Richard Durbin, assisted by Plaintiffs’ counsel and other merchant trade groups, introduced an amendment granting the Federal Reserve the power to regulate debit card interchange fees. The Fed subsequently capped them at approximately 22 to 24 cents per transaction for banks with assets of $10 billion or more. In Wildfang’s assessment, limiting regulation to debit card fees was a logical starting point for legislative reform:

[I]t was much easier for the merchants to argue . . . that a debit card transaction was just an electronic check . . . it made it more appealing to the congressional people we were talking to, to think . . . “well we’re just going to recognize that these are like electronic checks, and checks don’t have interchange fees. So, let’s get rid of these, or at least cap them.” That’s something more reasonable. If you get into trying to cap or regulate credit card interchange fees, that gets a lot more complicated, because the economics of a credit card transaction are a lot more complicated. Some of the interchange revenue ends up going as rewards to cardholders, which of course, the banks always claim is a wonderful good for the consumer, but in fact, those reward dollars are coming out of pockets of other consumers who may not have a credit card.

Senator Durbin espoused this reasoning in discussing the Durbin Amendment in the Senate Congressional Record. Debit card fees are fundamentally like electronic checks, in that they deduct payment for a transaction from a customer’s checking account. The nature of these transactions largely eliminates the need for high interchange fees, as banks need not entice consumers to spend their own money with rewards programs, nor does it require the same costs incurred to mitigate the risk of a consumer refusing to pay what they owe at the end of a month, as with a credit card.

Capping debit card fees was a monumental victory for merchants. Wildfang noted:

It had been true . . . by the early two thousand teens, that debit card transactions were increasing at a much faster rate than credit card transactions, and that was true whether you were talking about numbers of transactions or transaction volume. And there were a lot of reasons for that . . . [which] made capping debit fees particularly appealing, because we knew that that was a growing piece of the pie, and it was going to continue to grow, and it has continued to grow.

The number of non-prepaid debit card transactions has increased every year from 8.3 billion in 2000, to 72.7 billion in 2018, now constituting over half of all card based transactions, as compared to a little over a quarter in 2000. With the average value of debit card sales hovering consistently in the $38-$39 range, merchants were undoubtedly spared the cost of billions of dollars in interchange fees, having to pay a max of 24 cents, rather than 1%-3% of every transaction conducted. Additionally, the effects of the Durbin Amendment went far beyond relief of the financial burden from debit card fees, igniting tangential legislative and judicial fights throughout the U.S.

Armed with an affordable card payment alternative, it became paramount for merchants to make debit card, check, and cash payment options more appealing by offering discounts for use of these payments, or imposing surcharges on more expensive types of payments. Multiple states, often lobbied by Visa and Mastercard, had either passed or were considering passing laws banning these steering practices. Repealing or preventing these laws was key, as removal of anti-steering provisions from card issuer contracts would be useless if steering were illegal in the first place. Wildfang and merchants’ counsel worked behind the scenes with counsel for plaintiffs in Expressions Hair Design v. Schneiderman, 137 S. Ct. 1144 (2017), where the Supreme Court ruled a New York state law banning merchants from imposing surcharges regulated speech, not conduct. While the holding did not rule on the law’s constitutionality, some believe the case may percolate back to the Court soon to reexamine a key rational basis review standard in free speech cases.

When the litigation first began, consumers paid primarily by cash, check, and magnetic stripe credit or debit cards. Since then, the menu for consumers has increased exponentially, with EMV chip cards, various digital wallets, and cryptocurrencies now permeating payment methods both online and at a physical point of sale. The increasing diversity of payment methods further served to complicate the factual and narrative landscape of the litigation, primarily by challenging the standing Plaintiffs had in the antitrust realm. Wildfang explained:

Let’s take, for example, a transaction like Apple Pay. The economics of that are facially somewhat similar to a credit card, but there are more players in the payment chain, and the impact on the merchant of those transactions is not as clear as in a simple credit . . . or debit card transaction. And you had these intermediate players, one more layer between the banks and the merchant, and as you probably know, under federal antitrust law, only the direct purchaser has standing to bring an action for damages, and the defendants had always argued from the very beginning, that merchants were indirect purchasers, because, as sort of a technical matter, the way the electronics work, the acquiring bank—the merchant’s bank, is in some sense “first in line” as the money goes through them back to the merchant.

This potential dilution of a merchant’s ability to sue as a direct purchaser underscored the need to reach a monetary settlement rather than risk losing at trial. Wildfang believes these developments will play a key role in future electronic payment litigation:

[I]t’s going to be complicated, and the release that we gave to the defendants in the second settlement is almost certain to prompt litigation. There are going to be cases brought in the future where the defendants are going to argue the release applies and protects them against those claims and so there[] [is]going to be a lot of litigation along the edges of the original case, and whether or not a particular future claim has been released or not. And I think that the technological changes are going to be probably right in among all of those cases and kind of test the boundaries of the release.

Digital wallet platforms function and release payment information differently. Google utilizes an actual account for its wallet users to “store” money in, while Apple “facilitat[es] the ordering of fund transfers,” by creating and providing secure payment tokens to the merchant, rather than actual user account information. Apple also levies a 0.15% fee on card issuers who accept Apple Pay for integration with their cards. It remains to be seen how legislatures and courts will classify these roles of differing platforms in the payment chain between consumer and merchant.

But as both merchants and card issuers deal with another party and the costs it brings to the table, numerous issues will emerge once. Will the use of a certain payment method/platform render merchants as indirect purchasers? Will card issuers use additional or new fees to offset the costs of digital wallet providers’ fees? If so, are these fees precluded from litigation by this settlement? These are just a few of countless questions that may arise “around the edges of the original case.” Regardless of if or how these specific battles arise, the dynamic nature of the payment card industry is the one constant in a sea of changing technological variables. As Wildfang summed it up, “for the first forty years or so of the payment card industry, not much changed. But in the last ten years, a lot has changed, and I think that the next five or ten years is going to bring even more change.”

Regulatory Agencies Spring Into Action After Supreme Court Decides Dusky Gopher Frog Case

November 7, 2020
Climate Change, Environment, Environmental Justice, Environmental Law, EPA

Emily Newman, MJLST Staffer

While “critical habitat” is defined within the Endangered Species Act (ESA), a definition for “habitat” has never been adopted within the statute itself or any regulations issued by the two agencies responsible for implementing the ESA, the U.S. Fish and Wildlife Service (USFWS) and the National Marine Fisheries Service (collectively, the “Services”). In 2018, however, the U.S. Supreme Court called this gap into question. Weyerhaeuser Co. v. United States Fish and Wildlife Serv., 139 S. Ct. 361 (2018). In Weyerhaeuser Co. v. United States Fish and Wildlife Service, the Court reviewed a case by which the USFWS designated a particular area of land as critical habitat for the dusky gopher frog, including private property and land that was currently unoccupied by the frog. Id. at 366. Weyerhaeuser Company, a timber company, and a group of family landowners challenged the designation because the land was not currently occupied by this species and would need to be improved before occupation could actually occur. Id. at 367. The Court vacated and remanded the case to the Fifth Circuit, determining that the land first must be designated as “habitat” before being designated as “critical habitat.” Id. at 369. More specifically, they remanded to the Fifth Circuit for it to interpret the meaning of “habitat” under the ESA; however, they did not specifically direct the Services to adopt a definition. Id. The Fifth Circuit ended up dismissing the case upon remand.

The Services’ proposed new rule aims to address this gap. The proposed rule was published on August 5, 2020, and within it, the Services propose two alternative definitions for the meaning of “habitat” which would be added to § 424.02 of the ESA. The first definition is as follows: “The physical places that individuals of a species depend upon to carry out one or more life processes. Habitat includes areas with existing attributes that have the capacity to support individuals of the species.” The alternative definition of “habitat” is listed as: “The physical places that individuals of a species use to carry out one or more life processes. Habitat includes areas where individuals of the species do not presently exist but have the capacity to support such individuals, only where the necessary attributes to support the species presently exist.”

The first definition emphasizes “dependence” while the second emphasizes “use”, but both allow for unoccupied areas to be included in the definition. Additionally, both definitions imply that the land has to be suitable for a particular species in its current condition with no improvements made. The Services clarified that the proposed rule would only be prospective and would not revise any designations of critical habitat already made.

The Services issued the proposed rule largely in order to respond to the Supreme Court’s ruling in Weyerhaeuser, but the Services do mention additional purposes such as the desire to “provide transparency, clarity, and consistency for stakeholders.” The proposed rule is also meant to build upon regulatory reforms issued by the Services in 2019. Additionally, the Services place the proposed rule in a larger context as part of the efforts of the Trump administration to “bring the ESA into the 21st century.”

The proposed rule has received both support and criticism. Those in support of the rule mainly highlight how defining “habitat” would lead to more certainty as to when a particular area would or could be protected under the ESA. They say that this could positively impact species by “aiding the public’s understanding of those areas that constitute habitat” and also by helping companies plan out projects in such a way as to minimize any impact on habitat.

Those against the two definitions contained in the proposed rule have multiple reasons for their criticism. For one, they believe that the primary definition in particular runs the risk of conflating “habitat” and “critical habitat” even though “habitat” presumably should cover a wider area. Second, they argue that defining “habitat” through a regulation is unnecessary and has not been necessary in the 45 plus years that the ESA has been around. This is because defining “habitat” could undermine any critical habitat designations under the ESA, and it would also negatively impact or cause confusion in other parts of the ESA where the word “habitat” is used and other federal statutes that are often “implicated by actions related to listed species.” Third, while the proposed rule is prospective and would not require reevaluations of past critical habitat designations, that does not mean the Services by their own accord won’t reevaluate those designations using the new definition of “habitat.”

The last, and arguably most important, critique of the proposed rule is that either definition has the potential to exclude essential areas of habitat such as fragmented, degraded, or destroyed habitat that would need to be restored, and also habitat that is needed for species whose range will likely fluctuate due to the impacts of climate change. Critics, such as the Southern Environmental Law Center (SELC) and the American Fisheries Society (AFS), argue that this would only maintain the status quo and simply “wouldn’t make sense from a management perspective for species recovery or the legislative perspective intended by Congress in enacting the ESA.” The AFS makes a useful analogy to what would happen if a similar definition applied to polluted waters under the Clean Water Act: “Indeed, if a similar definition was used for polluted waters in the U.S. under the Clean Water Act, we would never have improved water quality by installing treatment systems to remove pollutants, as the definition leaves the only condition as status quo.”

Several opponents of the proposed rule provide their own alternative definitions of habitat or what that definition should include. The Defenders of Wildlife suggest a definition that is consistent with definitions of habitat in academia and with the intent of the ESA, as well as being complementary to but distinct from the definition of “critical habitat” in the ESA: “ ‘Habitat’ is the area or type of site where a species naturally occurs or depends on directly or indirectly to carry out its life processes, or where a species formerly occurred or has the potential to occur and carry out its life processes in the foreseeable future.” Additionally, the AFS advises that any definition of habitat account for areas that may not even “house” the species in question but that are nevertheless important for energy and resource flow; this broader suggestion reflects the move towards “holistic watershed approaches” in fisheries management.

The public comment period for the proposed rule closed on September 4, 2020, but the Services has not yet issued a final rule. Looking ahead, though, the strong opinions both for and against the proposed rule indicate that the Services will most likely face litigation irrespective of what they decide upon in the final rule. Moreover, a change in the Administration following the 2020 election will likely affect the outcome of this regulatory action.

 

 

“IceBreaker” Freshwater Offshore Wind Project Cracks Through Regulatory Jam

November 7, 2020
Energy Law, Environmental Law

Ben Cooper, MJLST Staffer

An offshore wind project in Lake Erie, churned by regulatory crosscurrents, has begun flowing towards construction once again. But followers of the IceBreaker Wind project can be forgiven for harboring reservations about what lies ahead, due to the long-running back-and-forth. Back-and-forth notwithstanding, critics and proponents alike look at IceBreaker Wind as an, ahem, icebreaker to clear the path for more offshore wind in the Great Lakes.

IceBreaker Wind Project

For more than a decade, the Lake Erie Energy Development Corporation (LEEDCo) has been working to advance a windfarm eight miles off the coast of Cleveland in Lake Erie. The project would have six turbines with a combined production to power 7,000 homes. Outside advocates are split on the project: some environmental groups (like the Sierra Club and the Ohio Environmental Council) support IceBreaker Wind, while other environmental groups (like the Black Swamp Bird Observatory and the American Bird Conservancy) are leading the legal challenges to it. Additionally, a group of lakefront property owners and a coal company have become involved in the opposition to the project.

As this project has moved through the regulatory framework, stakeholders have continually pointed out that it will likely chart the course for future offshore wind projects in the Great Lakes. Up until this point, the future of freshwater offshore wind has been aspirational. The CEO of LEEDCo says this approach makes sense when launching a new industry: “[U]ntil you climb that first hill and see what’s out there, you better focus on that first hill.” Now that IceBreaker Wind has cleared some of its most significant hurdles, others in the industry are beginning to peak over the top of that first hill.

Diamond Offshore Wind Moves in on the Great Lakes

Way back when IceBreaker Wind was just a concept, optimism bubbled throughout the Great Lakes region about the promise of offshore wind. Major cities like Chicago, Buffalo, New York, and Cleveland sit just a few miles away from strong, consistent winds. The appeal of offshore wind in the Great Lakes is obvious: abundant energy close to the population centers that need it. Yet, the challenges are evident in IceBreaker’s decade-long saga.

With all the uncertainty that crept into the IceBreaker Wind project, proposals and planning for other offshore wind projects in the Great Lakes quieted down. Still, industry has kept its eyes on IceBreaker—looking for a proof of concept project to lay out the “pathway to responsible development.” Based on recent movement, it seems like players in the freshwater offshore wind space have seen the pathway they need.

One move has been in response to New York State’s 70% renewable energy target by 2030. Diamond Offshore Wind, a subsidiary of Mitsubishi Corporation, thinks the answer lies at least in part in a wind farm in Lake Erie off the coast of Buffalo. This project is in its earliest stages and is still waiting for the results of a feasibility study New York State is conducting.

Even with all the uncertainty of offshore wind development in the Great Lakes, there is a regulatory benefit to these freshwater projects over their ocean counterparts: while offshore projects in the ocean require approval from the Bureau of Ocean Energy Management (BOEM), projects in the Great Lakes do not require BOEM’s involvement. This is notable because BOEM has been frustratingly absent from offshore wind development over the past few years.

Conclusion

Even with the benefits of advancing these offshore wind projects in the Great Lakes rather than the ocean, these projects are costly and time intensive. It makes sense that developers are cautious to jump into the unknown. Since IceBreaker Wind cleared some of its last major hurdles, however, we should expect to see more companies embarking on projects to harness the country’s greatest untapped natural resource.

FDA Approval of a SARS-CoV-2 Vaccine and Surrogate Endpoints

November 1, 2020
COVID-19, Food and Drug Law, Health, Healthcare, Public Health

Daniel Walsh, Ph.D, MJLST Staffer

The emergence of the SARS-CoV-2 virus has thrown the world into chaos, taking the lives of more than a million worldwide to date. Infection with SARS-CoV-2 causes the disease COVID-19, which can have severe health consequences even for those that do not succumb. An unprecedented number of vaccines are under development to address this challenge. The goal for any vaccine is sterilizing immunity, which means viral infection is outright prevented. However, a vaccine that provides only partially protective immunity will still be a useful tool in fighting the virus. Either outcome would reduce the ability of the virus to spread, and hopefully reduce the incidence of severe disease in those who catch the virus. An effective vaccine is our best shot at ending the pandemic quickly.

For any vaccine to become widely available in the United States, it must first gain approval from the Food and Drug Administration (FDA). Under normal circumstances a sponsor (drug manufacturer) seeking regulatory approval would submit an Investigational New Drug (IND) application, perform clinical trials to gather data on safety and efficacy, and finally file a Biologics License Application (BLA) if the trials were successful. The FDA will review the clinical trial data and make a determination as to whether the benefits of the therapy outweigh the risks, and if appropriate, approve the BLA. Of course, degree of morbidity and mortality being caused by COVID-19 places regulators in a challenging position. If certain prerequisites are met, the FDA as the authority to approve a vaccine using an Emergency Use Authorization (EUA). As pertaining to safety and efficacy, the statutory requirements for issuing an EUA are lower than normal approval. It should also be noted that an initial approval via EUA does not preclude eventual normal approval.  Full approval of the antiviral drug remdisivir is an example of this occurrence.

In any specific instance, the FDA must conclude that a reason for using the EUA process (in this case SARS-CoV-2):

can cause a serious or life-threatening disease or condition . . . based on the totality of scientific evidence available . . . including data from adequate and well-controlled clinical trials, if available, it is reasonable to believe that . . . the product may be effective in diagnosing, treating, or preventing [SARS-CoV-2] . . . the known and potential benefits of the product, when used to diagnose, prevent, or treat [SARS-CoV-2], outweigh the known and potential risks of the product . . . .

21 USC 360bbb-3(c). On its face, this statute does not require the FDA to adhere to the full phased clinical trial protocol in grating an EUA approval. Of course, the FDA is free to ask for more than the bare minimum, and it has wisely done so by issuing a set of guidance documents in June and October. The FDA indicated that, at the minimum, a sponsor would need to supply an “interim analysis of a clinical endpoint from a phase 3 efficacy study;” that the vaccine should demonstrate an efficacy of at least 50% in a placebo controlled trial; that phase 1 and 2 safety data should be provided; and that the phase 3 data “should include a median follow-up duration of at least two months after completion of the full vaccination regimen” (among other requirements) in the October guidance.

It is clear from these requirements that the FDA is still requiring sponsors to undertake phase 1, 2, and 3 trials before FDA will consider issuing an EUA, but that the FDA is not going to wait for the trials to reach long term safety and efficacy endpoints, in an effort to get the public access to a vaccine in a reasonable time frame. The Moderna vaccine trial protocol, for example, has a study period of over two years. The FDA also has a statutory obligation to “efficiently review[] clinical research and take[] appropriate action . . . in a timely manner.” 21 USC § 393(b)(1).

One method of speeding up the FDA’s assessment of efficacy is a surrogate endpoint. Surrogate endpoints allow the FDA to look at an earlier, predictive metric of efficacy in a clinical trial when it would be impractical or unethical to follow the trial to its actual clinical endpoint. For example, we often use blood pressure as a surrogate endpoint when evaluating drugs intended to treat stroke. The FDA draws a distinction between candidate, reasonably likely, and validated surrogate endpoints. The latter two can be used to expedite approval. However, in its June guidance, the FDA noted “[t]here are currently no accepted surrogate endpoints that are reasonably likely to predict clinical benefit of a COVID-19 vaccine . . . .  [and sponsors should therefore] pursue traditional approval via direct evidence of vaccine safety and efficacy . . . .” This makes it unlikely surrogate endpoints will play any role in the initial EUAs or BLAs for any SARS-CoV-2 vaccine.

However, as the science around the virus develops the FDA might adopt a surrogate endpoint as it has for many other infectious diseases. Looking through this list of surrogate endpoints, a trend is clear. For vaccines, the FDA has always used antibodies as a surrogate endpoint. However, the durability of the antibody response to SARS-CoV-2 has been an object of much concern. While this concern is likely somewhat overstated (it is normal for antibody levels to fall after an infection is cleared), there is evidence that T-cells are long lasting after infection with SARS-CoV-1, and likely play an important role in immunity to SARS-CoV-2. It is important to note that T-Cells (which coordinate the immune response and some of which can kill virally infected cells) and B-Cells (which produce antibody proteins) are both fundamental, and interdependent pieces of the immune system. With this in mind, when developing surrogate endpoints for SARS-CoV-2 the FDA should consider whether it is open to a more diverse set of surrogate endpoints in the future, and if so, the FDA should communicate this to sponsors so they can begin to build the infrastructure necessary to collect the data to ensure vaccines can be approved quickly.

 

Ad Astra Per Aspera – “To the Stars Through Difficulties”

November 1, 2020
Economy, Space Law

Carlton Hemphill, MJLST Staffer

With upcoming elections and the ongoing pandemic on the minds of many, it’s easy to get lost in the negatives of 2020. However, one shining star of a historic event took place on May 30, 2020, NASA astronauts once again launched from U.S. soil, and for the first time on commercially produced and maintained spacecraft. The mission to the International Space Station (ISS) went as well as anyone could have hoped for: uneventful. It sounds ironic to describe such a monumental moment as being “uneventful,” but in the context of strapping humans to the tip of a rocket and blasting them into space, “uneventful” is good. It is also a testament to how far the privatization of space exploration has come. SpaceX, the company responsible for the successful launch of NASA astronauts to the ISS, did not start out with success. Many of their early launch attempts of the Falcon 1 ended in disaster, nearly putting the company out of business. However, with the help of government contracts SpaceX was able to continue researching and developing their rockets to the point of being an industry leader.

What about the economy? Good news for the U.S. economy and taxpayers alike.

Besides allowing for this milestone of American science and engineering to occur, government contracts for commercial space exploration prove to be economically beneficial. Prior to the May 30th mission, NASA was paying a premium to launch astronauts on Russian spacecraft, and virtually all commercial satellite launches had been outsourced to Russia and China. It appeared as if the United States was out of the space game. With the then existing technology, domestic aerospace companies were unable to match the prices offered by foreign competitors. The economic incentives provided by government contracts to domestic companies such as SpaceX, have reversed this trend. They have allowed companies to invest in research that has led to tremendous cost savings, such as a reusable first stage rocket engine, and increased reliability and safety. Domestic companies are now able to offer safe and reliable space travel cheaper than foreign competitors. This has once again shifted power back to the United States, with SpaceX controlling the market for commercial satellites, as well as the future launches of NASA astronaut missions. NASA plans to continue using commercial spacecraft for its next mission to the ISS. The mission, named SpaceX Crew–1, is slotted for November 14, 2020, and will bring three NASA astronauts and one Japanese mission specialist to the ISS. So, stay tuned, and stay excited!

Is there more to commercial space exploration than satellites and astronauts? Sure there is.

The idea of sending paying customers into space is nothing new and has been talked about since space travel first became a reality. The recent success of commercializing space has reignited talk about profiting from those curious to venture out of this world (especially with the way 2020 has gone). NASA has even gotten on board with economizing space and is planning on allowing “private astronauts” to spend up to 30 days on the ISS for the low cost of $35,000 per night, plus shipping and handling (i.e. launch costs for commercial spacecraft). It seems that the end goal of both the government and private companies is to stimulate a space economy. While this concept might initially seem hard to imagine, one need only look to the evolution of the aviation industry for a reality check.

Of course, when a space economy becomes reality, there will be a pressing need for increased laws and regulations. While space travel has been around for over half a century, and a good body of laws pertaining to space already exist, the concept of commercialized space travel is still relatively new and uncharted territory. Lawmakers will most likely turn to the aviation industry for guidance on how to regulate this growing field. As technology advances and propels people further into previously uncharted territory, the law must follow hand in hand and evolve to the changing circumstances.

 

Watching an APA Case Gestate Live!

October 25, 2020
Administrative Law, Internet, Social Media

Parker von Sternberg, MJLST Staffer

On October 15th the FCC published an official Statement of Chairman Pai on Section 230. Few particular statutes have come under greater fire in recent memory than the Protection for “Good Samaritan” Blocking and Screening of Offensive Material and the FCC’s decision to wade into the fray is almost certain to end up causing someone to bring suit regardless of which side of the issue the Commission comes down on.

As a brief introduction, 47 U.S. Code § 230 provides protections from civil suits for providers of Interactive Computer Services, which for our purposes can simply be considered websites. The statute was drafted and passed as a direct response by Congress to a pair of cases, namely Cubby, Inc. v. CompuServe Inc. and Stratton Oakmont, Inc. v. Prodigy Services Co.Cubby, Inc. v. CompuServe Inc., 776 F.Supp. 135 (S.D.N.Y. 1991) and Stratton Oakmont, Inc. v. Prodigy Services Co., 1995 WL 323710 (N.Y. Sup. Ct. 1995). Cubby held that the defendant, CompuServe, was not responsible for third-party posted content on its message board. The decisive reasoning by the court was that CompuServe was a distributor, not a publisher, and thus “must have knowledge of the contents of a publication before liability can be imposed.”Cubby, Inc. v. CompuServe Inc., 776 F.Supp. 135, 139 (S.D.N.Y. 1991). On the other hand, in Stratton Oakmont, the defendant’s exertion of “editorial control” over a message board otherwise identical to the one in Cubby “opened [them] up to a greater liability than CompuServe and other computer networks that make no such choice.” Stratton Oakmont, 1995 WL 323710 at *5.

Congress thus faced an issue: active moderation of online content, which is generally going to be a good idea, created civil liability where leaving message boards open as a completely lawless zone protects the owner of the board. The answer to this conundrum was § 230 which states, in part:

(c) Protection for “Good Samaritan” blocking and screening of offensive material

(1) Treatment of publisher or speaker

No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

(2) Civil liability – No provider or user of an interactive computer service shall be held liable on account of—

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected . . . .

Judicial application of the statute has so far largely read the language expansively. Zeran v. AOL held that “[b]y its plain language, § 230 creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.”Zeran v. Am. Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997). The court also declined to recognize a difference between a defendant acting as a publisher versus a distributor. Speaking to Congress’s legislative intent, the court charted a course that aimed to both immunize service providers as well as encourage self-regulation. Id. at 331-334. Zeran has proved immensely influential, having been cited over a hundred times in the ensuing thirteen years.

Today however, the functioning of § 230 has become a lightning rod for the complaints of many on social media. Rather than encouraging interactive computer services to self-regulate, the story goes that it instead protects them despite their “engaging in selective censorship that is harming our national discourse.” Republicans in the Senate have introduced a bill to amend the Communications Decency Act specifically to reestablish liability for website owners in a variety of ways that § 230 currently protects them from. The Supreme Court has also dipped its toes in the turbulent waters of online censorship fights, with Justice Thomas saying that “courts have relied on policy and purpose arguments to grant sweeping protection to Internet platforms” and that “[p]aring back the sweeping immunity courts have read into §230 would not necessarily render defendants liable for online misconduct.”

On the other hand, numerous private entities and individuals hold that § 230 forms part of the backbone of the internet as we know it today. Congress and the courts, up until a couple of years ago, stood in agreement that it was vitally important to draw a bright line between the provider of an online service and those that used it. It goes without saying that some of the largest tech companies in the world directly benefit from the protections offered by this law, and it can be argued that the economic impact is not limited to those larger players alone.

What all of this hopefully goes to show is that, no matter what happens to this statute, someone somewhere will be willing to spend the time and the money necessary to litigate over it. The question is what shape that litigation will take. As it currently stands, the new bill in the Senate has little chance of getting through the House of Representatives to the President’s desk. The Supreme Court just recently denied cert to yet another § 230 case, upholding existing precedent. Enter Ajit Pai and the FCC, with their legal authority to interpret 47 U.S. Code § 230. Under the cover of Chevron deference protecting administrative action with regard to interpreting statutes the legislature has empowered them to enforce, the FCC wields massive influence with regard to the meaning of § 230. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

While the FCC’s engagement is currently limited to a statement that it intends to “move forward with rulemaking to clarify [§ 230’s] meaning,” there are points to discuss. What limits are there on the power to alter the statute’s meaning? Based on the Commissioner’s statement, can we tell generally what side they are going to come down on? With regard to the former, as was said above, the limit is set largely by Chevron deference and by § 706 of the APA. The key words here are going to be if whoever ends up unhappy with the FCC’s interpretation can prove that it is “arbitrary and capricious” or goes beyond a “permissible construction of the statute.” Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

The FCC Chairman’s statement lays out that issues exist surrounding §230 and establishes that the FCC believes the legal authority exists for it to interpret the statute. It finishes by saying “[s]ocial media companies have a First Amendment right to free speech. But they do not have a First Amendment right to a special immunity denied to other media outlets, such as newspapers and broadcasters.” Based on this statement alone, it certainly sounds like the FCC intends to narrow the protections for interactive computer services providers in some fashion. At the same time, it raises questions. For example, does § 230 provide websites with special forms of free speech that other individuals and groups do not have? The statute does not on its face make anything legal that without it would not be. Rather, it ensures that legal responsibility for speech lies with the speaker, rather than the digital venue in which it is said.

The current divide on liability for speech and content moderation on the internet draws our attention to issues of power as the internet continues to pervade all aspects of life. When the President of the United States is being publicly fact-checked, people will sit up and take notice. The current Administration, parts of the Supreme Court, some Senators, and now the FCC all appear to feel that legal proceedings are a necessary response to this happening. At the same time, alternative views do exist outside of Washington D.C., and at many points they may be more democratic than those proposed within our own government.

There is a chance that if the FCC takes too long to produce a “clarification” of §230 that Chairman Pai will be replaced after the upcoming Presidential election. Even if this does happen, I feel that the outlining of the basic positions surrounding this statute is nonetheless worthwhile. A change in administrations simply means that the fight will occur via proposed statutory amendments or in the Supreme Court, rather than via the FCC.

 

The “Circuit Split” That Wasn’t

October 25, 2020
Constitutional Law, Criminal Law, Fourth Amendment, Law Enforecement

Sam Sylvan, MJLST Staffer

Earlier this year, the Fourth Circuit punted on an opportunity to determine the constitutional “boundaries of the private search doctrine in the context of electronic searches.” United States v. Fall, 955 F.3d 363, 371 (4th Cir. 2020). The private search doctrine, crafted by the Supreme Court in the 80’s, falls under the Fourth Amendment’s umbrella. The doctrine makes it lawful for law enforcement to “search” something that was initially “searched” by a private third party, because the Fourth Amendment is “wholly inapplicable to a search or seizure, even an unreasonable one, effected by a private individual not acting as an agent of the Government or with the participation or knowledge of any government official.” United States v. Jacobsen, 466 U.S. 109, 113 (1984).

An illustration: Jane stumbles upon incriminating evidence on John’s laptop that implicates John in criminal activity (the “initial private search”), Jane shows the police what she found on the laptop (the “after-occurring” search), and the rest is history for John. But for law enforcement’s after-occurring search to avoid violating the Fourth Amendment, its search must not exceed the scope of the initial private search. “The critical measures [to determine] whether a governmental search exceeds the scope of the private search that preceded it,” United States v. Lichtenberger, 786 F.3d 478, 485 (6th Cir. 2015), include whether “there was a virtual certainty that nothing else of significance was in the [property subjected to the search]” and whether the government’s search “would not tell [law enforcement] anything more than [it] already had been told” or shown by the private searcher. Jacobsen, 466 U.S. at 119.

Of course, the Supreme Court’s holdings from the 80’s that speak to the scope of the Fourth Amendment are often difficult to reconcile with modern-day Fourth Amendment fact patterns that revolve around law enforcement searches of modern electronic devices (laptops; smartphones; etc.). In the key Supreme Court private search doctrine case, Jacobsen (1984), the issue was the constitutionality of a DEA agent’s after-occurring search of a package after a FedEx employee partially opened the package (upon noticing that it was damaged) and saw a white powdery substance.

Since the turn of the millennium, courts of appeals have stretched to apply Jacobsen to rule on the private search doctrine’s application to, and scope of, law enforcement searches of electronics. In 2001, the Fifth Circuit addressed the private search doctrine in a case where the defendant’s estranged wife took a bunch of floppy disks, CDs, and zip disks from the defendant’s property. She and her friend then discovered evidence of defendant’s criminal activity on those disks while searching some of them and turned the collection over to the police, which led to the defendant’s conviction. United States v. Runyan, 275 F.3d 449 (5th Cir. 2001).

There are two crucial holdings in Runyan regarding the private search doctrine. First, the court held that “the police exceeded the scope of the private search when they examined the entire collection of ‘containers’ (i.e., the disks) turned over by the private searchers, rather than confining their [warrantless] search to the selected containers [that were actually] examined by the private searchers.” Id. at 462. Second, the court held that the “police search [did not] exceed[] the scope of the private search when the police examine[d] more items within a particular container [i.e., a particular disk] than did the private searchers” who searched some part of the particular disk but not its entire contents. Id. at 461, 464. Notably absent from this case: a laptop or smartphone.

Eleven years after Runyan, the Seventh Circuit held that the police did not exceed the scope of the private searches conducted by a victim and her mother. Rann v. Atchison, 689 F.3d 832 (7th Cir. 2012) (relying heavily on Runyan). In Rann, the police’s after-occurring search included viewing images (on the one memory card brought to them by the victim and the one zip drive brought to them by the victim’s mother) that the private searchers themselves had not viewed. Id. Likening computer storage disks to containers (as the Runyan court did), the Rann court concluded “that a search of any material on a computer disk is valid if the private [searcher] viewed at least one file on the disk.” Id. at 836 (emphasis added). But notably absent from this case like Runyan: a laptop or smartphone.

Two years after Rann, the Supreme Court decided Riley v. California—a landmark case where the Court unanimously held that the warrantless search of a cellphone during an arrest was unconstitutional. Specific reasoning from the Riley Court is noteworthy insofar as assessing the Fourth Amendment’s (and, in turn, the private search doctrine’s) application to smartphones and laptops. The Court stated:

[W]e generally determine whether to exempt a given type of search from the warrant requirement by assessing, on the one hand, the degree to which it intrudes upon an individual’s privacy and, on the other, the degree to which it is needed for the promotion of legitimate governmental interests. . . . [Smartphones] are in fact minicomputers that also happen to have the capacity to be used as a telephone. They could just as easily be called cameras, video players, rolodexes, calendars, tape recorders, libraries, diaries, albums, televisions, maps, or newspapers. One of the most notable distinguishing features of [smartphones] is their immense storage capacity.

573 U.S. 373, 385, 393 (2014). Riley makes crystal clear that when the property at issue is a laptop or smartphone, the balance between a person’s privacy interests and the governmental interests tips heavily in favor of the individual’s privacy interests. In simpler terms, law enforcement needs a warrant to search a laptop or smartphone unless it has an extremely compelling reason for failing to comply with the Fourth Amendment’s warrant requirement.

 

One year after Riley, the Sixth and Eleventh Circuits—armed with Riley’s insights regarding modern electronic devices—decided Lichtenberger and United States v. Sparks, respectively. The two Circuits held that in both cases the police, in conducting their after-occurring warrantless searches of a laptop (Lichtenberger) and a smartphone (Sparks), exceeded the scope of the initial private searches, reaching these conclusions in large part due to Riley. In Lichtenberger, the police exceeded the scope of the initial private search when, without a warrant, they looked at photographs on the laptop that the private searcher had not looked at, despite the private searcher’s initial viewing of other photographs on the laptop. 786 F.3d 478 (6th Cir. 2015). In Sparks, the police exceeded the scope of the initial private search when, without a warrant, they viewed a video within the same album on the smartphone that the private searcher had scrolled through but which the private searcher did not actually view. 806 F.3d 1323 (11th Cir. 2015), overruled on other grounds by United States v. Ross, 963 F.3d 1056 (11th Cir. 2020) (overruling Sparks “to the extent that [Sparks] holds that [property] abandonment implicates Article III standing”).

 

At first glance, Lichtenberger and Sparks seem irreconcilable with Runyan and Rann, leading many commentators to conclude there is a circuit split regarding the private search doctrine: the “container” approach versus the “file”/“narrow” approach. But I disagree. And there is a rather simple explanation for reaching this conclusion—Riley merely heightened Jacobsen’s “virtual certainty” requirement in determining whether law enforcement exceed the scope of initial private searches of laptops and smartphones. In other words, “virtual certainty” is significantly elevated in the context of smartphones and laptops because of the heightened privacy interests at stake stemming from their immense storage capacities and unique qualities—i.e., they contain information and data about all aspects of our lives to a much greater extent than floppy disks, CDs, zip drives, and camera memory cards. Thus, the only apparent sure way for law enforcement to satisfy the private search doctrine’s “virtual certainty” requirement when a laptop or smartphone is involved (and thereby avoid inviting defendants to invoke the exclusionary rule) is to view exactly what the private searcher viewed.

In contrast, the “virtual certainty” requirement in the context of old school floppy disks, CDs, zip drives, and memory cards is quite simply a lower standard of certainty because the balance between privacy interests and legitimate governmental interests is not tipped heavily in favor of privacy interests.

While floppy disks, CDs, and zip drives somewhat resemble “containers,” such as the package in Jacobsen, smartphones and laptops are entirely different Fourth Amendment beasts. Accordingly, the four cases should all be analyzed through the lens that the particular electronic device at issue in each case is most significant because it guides the determination of whether the after-occurring search fell within the scope of the initial private search. Looking at the case law this way makes it so that it is not the container approach versus the file approach. Rather, it is (justifiably) the container approach for certain older electronic storage devices and the file approach for modern electronic devices that implicate weightier privacy concerns.

Hailstorms in Baltimore: The Fourth Circuit’s Opportunity to Create Oversight and Accountability for a Secretive Police Technology

October 17, 2020
Constitutional Law, Fourth Amendment, Human Rights Law, Law Enforecement

Jordan Hughes, MJLST Staffer

The past several months have once again shone a spotlight on the difficulty of holding police and law enforcement accountable for their actions. The American public has become more aware than ever of the unions and structures in place to shield officers from liability. Despite years of DOJ investigations and investigative reporting into the procedures of departments around the country, many regular police practices remain hidden from the public eye. Including the use of secretive new technologies that allow for unprecedented levels of discretion—and unprecedented potentials for abuse.

The Hailstorm is one such dragnet-style electronic capturing device that over 85 federal and state enforcement agencies have used largely in secret for more than two decades. This past spring, the 4th Circuit joined the fledgling ranks of federal courts asked to grapple with constitutional questions raised by the elusive technology. Baltimore police used a Hailstorm in 2014 to locate Kerron Andrews, who had an outstanding arrest warrant. Andrews v. Balt. City Police Dep’t, No. CCB-16-2010, 2018 U.S. Dist. LEXIS 129523, at *4 (D. Md. Aug. 1, 2018). The device enabled Baltimore police to pinpoint the apartment building where Andrews was sitting, despite having been unable to find him using standard location information released to them by his phone carrier. The police never disclosed the device during their surveillance, citing instead a “pen register order” as authorization for its use. A Maryland state court held that the government violated Andrews’ Fourth Amendment rights through use of the Hailstorm, and a state appellate court upheld that decision. Andrews then sued the police department in a federal district court, but the federal court considered the search constitutional and granted summary judgment against him. Andrews appealed.

The 4th Circuit, in Andrews v. Balt. City Police Dep’t, No. 18-1953, 2020 U.S. App. LEXIS 9641 (4th Cir. Mar. 27, 2020), both acknowledged the serious constitutional questions at stake and declined to make a ruling on them due to a lack of information. The district court was directed on remand to make findings concerning the Baltimore Police Department’s practice regarding Hailstorm technology, as well as the extent of constitutional intrusions involved in the search. Whatever the outcome, the 4th Circuit is likely to hear this case again. When it finally does, the court will have to decide how to apply the Fourth Amendment to a technology that may be fully incompatible with the freedom from broad and general searches that it typically guarantees.

What is a Hailstorm?

The “Hailstorm” is a model of “cell site simulator” technology sold by Harris Corporation. Other commonly used Harris models include the “StingRay,” “TriggerFish,” and “KingFish.” Generically, these devices are known as international mobile subscriber identity (“IMSI”) catchers.

IMSI catchers essentially mimic a wireless carrier’s base station, causing cell phones to communicate their unique identifiers and location data to the device even when they’re not in use. They function as a dragnet, capturing the unique numerical identifiers of all wireless devices within a particular area. The technology provides both identification and location data for devices. It is precise enough for law enforcement to narrow a device’s location to six feet, and to identify the exact unit a device is in from outside a large apartment complex. IMSI catchers are also capable of capturing the contents of communications, although there has not been a disclosed instance yet of law enforcement using an IMSI catcher in this fashion. IMSI catchers are small, and can easily be handheld or mounted on vehicles or drones.

What is the concern?

The Hailstorm raises a number of concerns under the Fourth Amendment—the constitutional provision meant to protect Americans from unreasonable searches and seizures. The ACLU, in a 2014 guide for defense attorneys, outlined the major Fourth Amendment questions that arise with the use of any IMSI catcher. These include:

  1. Level of scrutiny: IMSI catchers are almost certainly intrusive enough to violate both reasonable expectations of privacy and property interests, thus giving rise to Fourth Amendment scrutiny. When used in connection with a residence, the devices provide critical details about the inside of the property that constitutes a search under any framework. While the Supreme Court has held that there is no reasonable expectation of privacy on outgoing phone numbers voluntarily sent to a third party, that analysis likely cannot extend to data that gets redirected and captured by a Hailstorm without the phone-owner’s knowledge or consent.
  2. General search: There is an argument that any search conducted by an IMSI catcher constitutes a general search, and thus should be categorically barred by the Fourth Amendment. An IMSI catcher indiscriminately gathers all signaling information from a captured phone, seemingly incompatible with a constitutional requirement that surveillance minimize the collection of information unsupported by probable cause. Further, the dragnet functionality conducts this information grab on all devices in a vicinity, including innocent third parties whom the government lacks probable cause to search.
  3. Inaccurate warrants: When law enforcement does apply for a warrant to use an IMSI catcher, those warrants are very likely inaccurate. Warrant applications, driven by federal policies of non-disclosure, typically either (a) omit the fact that the government intends to use an IMSI catcher, (b) mislead the court by saying the government intends to use less intrusive devices (like a pen register) instead, or (c) fail to provide any information on what the technology is and how it operates. In either scenario, the warrant is predicated on a material omission that deprives a court of its constitutional obligation to balance government interests against intrusions into private rights.
  4. Invalid warrants: If a warrant accurately states law enforcement’s intended use of an IMSI catcher, it may be facially invalid due to the necessarily general nature of the search. The entire purpose of the warrant requirement is to require law enforcement to state with particularity the area to be searched and the persons or things to be seized. It remains an open question whether warrant particularity requirements can ever be compatible with intrusive dragnet surveillance technologies.

A separate and perhaps more troubling concern is the extreme lengths, only recently uncovered, that the government has gone to in order to keep this technology a secret. The federal government uses extensive non-disclosure agreements to prevent federal, state, and even local law enforcement from disclosing any details on the capabilities and usage of IMSI catchers. There have been a couple instances where judges demanded police to disclose possible use of an IMSI catcher at trial. Prosecutors in these instances have voluntarily dropped the evidence, offered plea bargains without jail time, or voluntarily dismissed the case altogether rather than disclose the device’s usage. Law enforcement agents have also demonstrated a willingness to offer alternative explanations for evidence obtained by an IMSI catcher. In one case where the FBI used a StingRay, for example, a discovered email from a special agent read: “we need to develop independent probable cause for the search warrant . . . FBI does not want to disclose the [redacted] (understandably so).”

IMSI catchers in the courts so far

The first reported decision dealing with an IMSI catcher was in 1995. In re United States, 885 F. Supp. 197 (C.D. Cal. 1995). The court, which had difficulty applying current law to the new surveillance technology, demanded that law enforcement develop stronger safeguards before permitting its use. Since 1995, nation-wide police practices of avoiding disclosure of the devices has largely shielded them from the view of courts. More recent orders from even the most tech-savvy magistrate judges suggest that judicial officers across the country still have little exposure to or understanding of IMSI technology. The lack of exposure and understanding is critical to continuing the law enforcement practice of applying for approval to use a “pen register” device.

Among the courts that have been faced with the question of IMSI catcher use, several—including the 7th Circuit in 2016—have declined to answer questions concerning the devices’ constitutionality. United States v. Patrick, 842 F.3d 540 (7th Cir. 2016). In his dissent, Chief Judge Wood described the avoidance strategies of law enforcement as “bad faith” that could justify suppression, and closed by writing that “it is time for the Sting[R]ay to come out of the shadows, so that it can be subject to the same kind of scrutiny as other mechanisms.”

The 7th Circuit ultimately did revisit the question of Sting[R]ays in Sanchez-Jara in 2018. United States v. Sanchez-Jara, 889 F.3d 418 (7th Cir. 2018). That court rejected the “general search” argument and upheld a warrant that referred generally to “electronic investigative techniques” without specifying the use of IMSI catcher technology. The other federal circuits have yet to reach a decision on the issue.

Andrews v. Balt. City Police Dep’t will almost certainly appear before the 4th Circuit again. While the question in that case deals with whether a pen register application can cover use of a Hailstorm device, deeper questions surrounding the constitutionality of a Hailstorm search underlie every aspect of the litigation. The court will be faced with a police department that has a history of abusing discretion, and that has shielded the courts from its use of IMSI catchers for years, in a moment of increased public scrutiny of police practices and procedures. The 4th Circuit thus has a unique opportunity to create a level of increased accountability for law enforcement, and to change the trajectory of police surveillance strategies for years to come.

Extracting Favors: Fossil-Fuel Companies Are Using the Pandemic to Lobby for Regulatory Rollbacks and Financial Bailouts

October 17, 2020
Climate Change, COVID-19, Energy Law, Environment, Environmental Law, Regulatory

Christopher Cerny, MJLST Staffer

In the waning months of World War II, Winston Churchill is quoted, perhaps apocryphally, as saying, “[n]ever let a good crisis go to waste.” It seems fossil-fuel companies have taken these words to heart. While in the midst of one of the greatest crises of modern times, oil, gas, and coal companies are facing tremendous economic uncertainty, not only from the precipitous drop in demand for gasoline and electricity, but also from the rise of market share held by renewable energy. In response, industry trade groups and the corporations they represent are engaged in an aggressive lobbying campaign aimed at procuring financial bailouts and regulatory rollbacks. The federal government and some states seem inclined to provide assistance, but with the aforementioned rise of renewable energy, many see the writing on the wall for some parts of the fossil-fuel industry.

The ongoing COVID-19 pandemic continues to inflict immeasurable havoc on a global scale. The virus and the mitigation efforts designed to curb its spread have dramatically changed the way humankind interacts with each other and the world around us. In the United States, nearly all states at one time or another implemented mandatory shelter-at-home orders to restrict movement and prevent the further spread of the novel coronavirus. These orders have, in many ways, completely restructured society and the economy, with perhaps no sector being more impacted than transportation. At the peak of the virus in the United States, air travel was down 96% and, in April 2020, passenger road travel was down 77% from 2019. Similarly, the pandemic has altered America’s energy consumption. For example, the Midcontinent Independent System Operator reports a decrease in daily weekday demand in March and April of up to 13% and a national average decline of as much as 7% for the same time frame. A secondary impact of these market disruptions is on the fossil-fuel industry. The decrease in electricity demand has further diminished the already declining coal market, while the fall off in travel and transportation has radically impacted oil prices.

On April 20, a barrel of oil traded for a loss for the first time ever when demand fell so low that the cost storing oil exceeded its sale price. While the price of a barrel of oil, the world’s most traded commodity, has since improved, as of October 1st, the U.S. stock index for domestic oil companies remains down 57% in 2020. Similarly, coal consumption in the United States is projected to decline 23% this year. Natural gas remains resilient, with U.S. demand only dropping 2.8% between January and May of 2020. However, much of natural gas’s buoyancy comes at the expense of lower prices. These numbers are dire, especially for coal and oil, two domestic industries already on the decline due to the rise in renewable energy.

Fossil-fuel companies have gone on the offensive. The oil and gas industry is responding to these calamitous figures and grim financials by lobbying state and federal lawmakers for financial bailouts and the relaxation of environmental regulations. The California Independent Petroleum Association, an oil and gas trade group, requested an extension for compliance with an idle well testing plan that would push 100% program compliance from 2025 to 2029. Further, the trade group asked California to scale back on Gov. Gavin Newsom’s plan to increase the staff of the California Energy Management Division, the state agency charged with oversight of oil and gas drilling. In Texas, the Blue Ribbon Task Force on Oil Economic Recovery, created at the behest of the state oil and gas regulatory body and composed of representatives and leaders of Texas’s oil and gas trade groups, recommended the suspension of particular environmental testing and extensions for environmental reporting to the state agency. The Louisiana Oil and Gas Association asked Louisiana Gov. John Bel Edwards to suspend the state’s collection of severance taxes.

On the national stage, the Independent Petroleum Association of America asked the Chairman of the Federal Reserve to support changes to the Main Street Lending Program, a part of the CARES Act, to expand the eligibility requirements to include many oil and gas producers. The American Fuel and Petrochemical Manufacturers, a refiners trade association, called on the Trump administration and the Environmental Protection Agency (EPA) to waive biofuel policies that mandate the blending of renewable corn-derived ethanol in petroleum refining. The American Petroleum Institute also reached out to the Trump administration seeking the waiver of record keeping and training compliance.

Not to be left behind, the coal industry ramped up its lobbying as well. In an opinion piece, the CEO of America’s Power, a coal trade group extolled the virtues of the fleet of coal power plants and their necessity in the recovery from the COVID-19 pandemic. The National Mining Congress, the coal industry’s lobbying arm, sent a letter to the Trump administration and Congressional leaders asking for an end to the industry’s requirements to pay into funds for black lung disease and polluted mine clean-up

These lobbying efforts are being met with varied levels of success. In a move that garnered criticism from the Government Accountability Office, the Department of the Interior through the Bureau of Land Management cut royalties on oil and gas wells leased by the federal government, saving the industry $4.5 million. The EPA scaled back enforcement of pollution rules, instead relying on companies to monitor themselves. The Governors of Texas, Utah, Oklahoma, and Wyoming sent a letter asking the EPA to waive the biofuel blending regulations in support of the refiners trade group. In September, the EPA denied the request. The Governor of Louisiana agreed to delay the collection of the severance tax, a revenue source for the state that can normally bring in $40 million per month. The Louisiana state legislature later voted to reduce the severance tax on oil and gas from 12.5% to 8.5% for the next eight years. The EPA finalized a rule that it is not “appropriate and necessary” to regulate certain hazardous air pollutants, including mercury, emitted from coil and oil fired power plants.

It is difficult to discern what impact these industry efforts and resulting government actions will have in the long term. The financial measures may have propped up an industry that otherwise would have suffered permanent damage and bankruptcies without the influx of relief and capital. However, environmental groups are more concerned with the regulatory rollbacks. For example, after the EPA chose to allow companies to self-monitor pollution, there was a year-over-year decline of 40% in air emissions tests at industrial facilities and over 16,500 facilities did not submit required water quality reports. The ramifications of the state and federal acquiescence to the fossil-fuel industry’s requested regulatory non-compliance may end up costing the American tax payers millions of dollars, causing irreparable immediate harm to the environment, and delaying critical action needed to mitigate anthropogenic climate change.

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