January 30, 2006

Corporations that have received a National Security Letter (NSL), a kind of subpoena authorized by the U.S. Patriot Act that’s intended to combat terrorism, should seek guidance from in-house and outside counsel before submitting private company information to the government, according to an article in The Corporate Counselor authored by Partner Charles B. Sklarsky and Associate Monica R. Pinciak

The FBI issues NSLs pursuant to Section 2709 of the U.S. Code to demand the production of telephone and electronic communications records from communication service providers “to protect against international terrorism or clandestine intelligence activities,” the authors stated.  And, the Section prohibits an NSL recipient from ever disclosing that the FBI sought information pursuant to the NSL, the so-called “gag provision.”

Moreover, the law “does not expressly provide for judicial review, and indeed seems to preclude judicial review because the filing of such a challenge would disclose the receipt of an NSL,” the authors wrote.

Mr. Sklarsky and Ms. Pinciak noted that corporations are also subject to these special subpoenas because Section 2709 does not define the phrase “wire or electronic communication service providers” and the federal government has adopted a broad interpretation that includes private corporations’ communication systems.  

“Applying the plain language of the statute, a private corporation that provides its employees with the means to send or receive electronic communications is an ‘electronic communication service provider’,” and case law applying that definition supports such a broad reading, the authors said. 

Despite the gag provision, the federal government has publicly stated that it does not view the law as prohibiting consultations with counsel, according to the article.  However, it does prohibit an NSL recipient from disclosing the substance of the request.

NSLs have been the subject of recent controversy and litigation, but such challenges are “rare” because the gag provision effectively shields the subpoena from judicial scrutiny, said Mr. Sklarsky and Ms. Pinciak in the article. 

For instance, in September 2004, the U.S. District Court for the Southern District of New York ruled that the section violates the Fourth Amendment because it effectively bars judicial challenge to the propriety of an NSL request, and that the gag provision amounts to prior restraint in violation of the First Amendment. 

Similarly, a district court in Connecticut held in August 2005 that the gag provision in that case violated the First Amendment, noting that “Section 2709 has the practical effect of silencing those who have the most intimate knowledge of the statute’s effect.”  The U.S. Court of Appeals for the Second Circuit heard oral arguments in that case in November. 

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