Is It Constitutional for the Senate to Retroactively Immunize From Civil Liability the Telecoms That Provided the Government with Information About Customers' Communications?

By ANTHONY J. SEBOK
Tuesday, Jan. 29, 2008

The Senate is currently debating whether to immunize from civil liability the telephone companies that allegedly violated customers' privacy rights when they provided to the U.S. Government confidential information about customers' phone and Internet communications. However, in this column, I want to focus on a narrower issue: If enacted, would the immunizing legislation be constitutional?

In Other Contexts, the Federal Government Has Deemed Retroactive Immunity Unacceptable Unless Paired with a Compensation Fund

Very recently, the Senate has acted as if retroactive immunity for tortfeasors was unacceptable. This was the position it took, for example, when it created the 9/11 Victims Compensation Fund. The Fund was offered in exchange for the victims' (in reality, their families') giving up their right to sue the airlines, the owners of the World Trade Center, and others. To give another example, Congress' recent attempts to eliminate hundreds of thousands of asbestos cases, through bills that almost became law in 2006, were also built on the assumption that, in exchange for eliminating asbestos plaintiffs' right to sue, they would receive compensation through a fund.

In fact, throughout the recent history of federal responses to various liability crises, the pattern has been the same: The elimination of causes of action has always been linked to some kind of quid pro quo, whether it took the form of a guaranteed payment, such as for the 9/11 victims' families, or access to a special court, such as in the case of childhood vaccines. The Black Lung Program and the attempted at instituting an asbestos program are both typical of how the federal government inserts itself into very pedestrian tort litigation by providing immunity from suit with one hand, and compensation to victims with the other.

Yet to read the newspaper reports of the debate in the Senate over the reauthorization of the Foreign Intelligence Surveillance Act (FISA), it is as if this familiar, long history of immunity-for-compensation has been forgotten. The Republicans want to add to FISA a provision that would simply wipe away the lawsuits that have already been filed without any compensation at all. The Democrats are crying foul, arguing that this would set a terrible precedent for the future. But it might be worse than that--the Republicans' proposal might actually be unconstitutional.

Can Congress Constitutionally Erase Substantial Liability Without Providing Compensation Because What Was Taken Was Intangible?

It is important to remember that, beneath all the heated rhetoric surrounding the reauthorization of FISA, lies a very simple issue of tort law. The lawsuits that have been filed against ATT and other telecoms allege, basically, that the telecoms are liable under a statutory tort. A section of the original FISA provides for civil damages of up to $1000, and punitive damages for its violation. There have been both individual suits and class actions filed against AT&T and other telecoms in courts around the country under this cause of action, as well as other, related causes of action, including California's consumer fraud law.

No one, it seems, really wants to argue that the telecoms did not commit actionable torts under the old law, although AT&T has vigorously denied that it is liable to anyone. Still, the Republicans' argument is that even if the telecoms did act in ways that make them liable, they still ought not to be required to compensate their victims, because they were helping America protect itself after 9/11.

This argument doesn't make a lot sense unless something else is added. After, the law interpreting the Fifth Amendment's Takings Clause makes it clear that if the state takes private property for the public interest, it must pay compensation. The same is true if a well-intentioned private citizen takes private property in an effort to protect his neighbors. If Bob tears down Sue's barn in order to protect the town from a spreading fire, why should Sue suffer a loss for an action that benefited everyone?

So what can be added to make sense of the Republican argument? One suspects that they do not think that the interests protected by the lawsuits filed in federal and state court are "property" in the same way that Sue's barn is surely property. Thus, they believe the state can eliminate these claims without paying compensation, because the Fifth Amendment only protects "real" property, not intangible property, such as a claim in tort law.

This would be a good theory, except for the fact that the state and federal courts disagree with it. In 1882, in Pritchard v. Norton, the Supreme Court stated, "Hence it is that a vested right of action is property in the same sense in which tangible things are property, and is equally protected against arbitrary interference." This doctrine clearly applied to tort claims, as well as contract and property claims. For example, in 1993, in Jenkins v. Hospital of the Medical College of Pennsylvania, the Pennsylvania Supreme Court held that the U.S. Constitution's Due Process Clause prohibits the retroactive elimination of a wrongful birth claim by statutory tort reform, where the cause of action had already "vested."

More generally, the idea that a cause of action, once it vests, cannot be retroactively eliminated lies deep in the roots of our common law and constitutional tradition. That idea was one reason why the Senate did not just immunize the airlines and other defendants after 9/11. The reason for creating the Fund was not just that they wanted to help the families of the heroes who died on that day, though surely they did. It was also that they would have kicked up a firestorm of litigation had they tried to cut off the right to sue without offering any compensation in exchange.

The Appellate Case that Suggests a Basis for Congress' Eliminating Rights without Providing Compensation

So why has no one pointed out that perhaps the victims of the illegal NSA spying have a right to their vested claims, just as much as the victims of 9/11 or of black lung disease or asbestos, or their families, do?

One reason may be that the Senate does not think that the claims under FISA have really "vested" or "accrued" as the law requires. Yet it is hard for me to see how these terms do not apply to the plaintiffs in the suits that have already been filed, assuming that they can prove their cases. They had a private right to privacy that was established by a federal statute that was in force between 2001 and 2006. Allegedly, during that time, that private right was violated. It would seem to me that at the moment the violation occurred, their right to compensation vested and was accrued.

Another reason the Senate may not think that the claims under FISA can be eliminated without compensation is that they do not think that statutory tort claims are "real" in the way that common law tort claims, or contract or property rights, are "real." There is some support for this point of view in the case law.

Take, for example, Congress' elimination of thousands of lawsuits that had been filed under the Fair Labor Standards Act (FLSA), by the passage of the "Portal to Portal" Act of 1947. After courts had interpreted the FLSA to require that employers pay employees for the time it took for them to travel from the entrance of their factories to their work stations, masses of lawsuits were filed throughout the country to recover those unpaid wages. Manufacturers warned that the liability resulting from these suits could destroy the economy, so Congress eliminated the suits. Its decision to do so was upheld by the Sixth Circuit in 1948 in Fisch v. General Motors Corp.

However, Fisch is very hard to square with the idea that a vested right, once accrued, may not be retroactively eliminated without some sort of compensation. A close reading of Fisch shows that the court was very sensitive to the doctrinal problem it faced. Its reasoning was based on two arguments. It first held that the lawsuits for wages had not "vested," in the proper sense of the term, since they were based on contract terms created by Congress through the FLSA, and so they were always subject to revision by Congress. Second, it held that Congress had established, through its findings, that the Portal to Portal Act was necessary to preserve interstate commerce.

I cannot say whether I agree with Fisch or not. What I can say, however, is that it offers very weak support for the idea that causes of action based on a statutory tort stand on a completely different footing than causes of action based on common law torts. The causes of action that were triggered by the violation of FISA concerned privacy, a tort interest recognized by almost every state's common law, and possibly protected by an implied right of action under the First and Fourteenth Amendments as well. Congress was not creating a right out of whole cloth; it was providing a forum to recover damages for the violation of a right which that had already been established as a matter of common law and constitutional law.

If the best justification of Fisch is that no worker should have viewed his or her claim to extra pay under the Fair Labor Standards Act as "property" because it survived only at the mercy of Congress, then Fisch tells us nothing about how to view the FISA claims.

Nothing in this column indicates whether I think that the suits against the telecoms are valid, or whether the federal government should step in to halt them, as it did with the suits against the airlines after 9/11. Those are questions of policy for others to answer. What I think is unacceptable, however, is that the Senate should approach the rights of the litigants with such disrespect. The FISA claims are just like other statutory tort claims under our federal civil rights laws. It would seem to me incredible to say that the causes of action under the Fair Housing Act or the American with Disabilities Act are not as deeply rooted as, say, a medical malpractice claim.


Anthony J. Sebok, a FindLaw columnist, is a Professor at Benjamin N. Cardozo School of Law in New York City. His other columns on tort issues may be found in the archive of his columns on this site.

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