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1 PILLSBURY WINTHROP SHAW PITTMAN LLP

BRUCE A. ERICSON #76342
2 DAVID L. ANDERSON #149604
JACOB R. SORENSEN #209134
3 MARC H. AXELBAUM #209855
50 Fremont Street
4 Post Office Box 7880
San Francisco, CA 94120-7880
5 Telephone: (415) 983-1000
Facsimile: (415) 983-1200
6
SIDLEY AUSTIN LLP
7 DAVID W. CARPENTER (admitted pro hac vice)
DAVID L. LAWSON (admitted pro hac vice)
8 BRADFORD A. BERENSON (admitted pro hac vice)
EDWARD R. MCNICHOLAS (admitted pro hac vice)
9 1501 K Street, N.W.
Washington, DC 20005
10 Telephone: (202) 736-8010
Facsimile: (202) 736-8711
11
Attorneys for Defendant
12 AT&T CORP.
13
UNITED STATES DISTRICT COURT
14
NORTHERN DISTRICT OF CALIFORNIA
15
SAN FRANCISCO DIVISION
16

17 )
TASH HEPTING, GREGORY HICKS, ) Case No. C-06-0672-VRW
18 CAROLYN JEWEL and ERIK KNUTZEN )
on Behalf of Themselves and All Others
) AT&T CORP’S MOTION FOR A
19 Similarly Situated, ) STAY OF PROCEEDINGS PENDING
) APPEAL
20 Plaintiffs, )
) Courtroom: 6, 17th Floor
21 vs. ) Judge: Hon. Vaughn R. Walker
) Date: September 14, 2006
22 AT&T CORP., AT&T INC. and DOES 1-20, ) Time: 2:00 p.m.
inclusive, )
23 )
Defendants. )
24 )
25

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1 TABLE OF CONTENTS

2 Page

3 I. INTRODUCTION......................................................................................................1

4 II. ARGUMENT .............................................................................................................2

5 A. The balance of harms favors a stay pending appeal .......................................2

6 B. The appeal raises serious legal questions .......................................................6

7 III. CONCLUSION ........................................................................................................14

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1 TABLE OF AUTHORITIES

2 Cases

3 Admiral Insur. Co. v. United States Dist. Court,

881 F.2d 1486 (9th Cir. 1989) .................................................................................... 3
4
Artukovic v. Rison,
5 784 F.2d 1354 (9th Cir. 1986) .................................................................................... 1

6 CIA v. Sims,
471 U.S. 159 (1985) ............................................................................................. 5, 13
7
Dellums v. Smith,
8 577 F. Supp. 1456 (N.D. Cal. 1984)........................................................................... 4

9 Edmonds v. United States Dep’t of Justice,

323 F. Supp. 2d 65 (D.D.C. 2004)............................................................................ 12
10
Ellsberg v. Mitchell,
11 709 F.2d 51 (D.C. Cir. 1983)................................................................................ 4, 13
12 El-Masri v. Tenet,
No. 1:05cv1417, 2006 WL 1391390, 2006 U.S. Dist. LEXIS 34577
13 (E.D. Va. May 12, 2006) ........................................................................................ 8, 9
14 Fitzgibbon v. CIA,
911 F.2d 755 (D.C. Cir. 1990)................................................................................ 8, 9
15
Gentex Corp. v. United States,
16 58 Fed. Cl. 634 (2003)............................................................................................ 2, 4
17 Halkin v. Helms,
598 F.2d 1 (D.C.Cir. 1978)....................................................................... 4, 11, 13, 14
18
Halkin v. Helms,
19 690 F.2d 977 (D.C. Cir. 1982).......................................................................... 5, 8, 14

20 Hudson River Sloop Clearwater, Inc. v. Department of the Navy,

891 F.2d 414 (2d Cir. 1989) ....................................................................................... 9
21
In re Ford Motor Co.,
22 110 F.3d 954 (3d Cir. 1997) ....................................................................................... 3

23 In re Pacific Gas & Elec. Co.,

No. C-02-1550, 2002 WL 32071634, 2002 U.S. Dist. LEXIS 27549
24 (N.D. Cal. Nov. 14, 2002) ...................................................................................... 1, 3

25 In re United States,
872 F.2d 472 (D.C. Cir. 1989)................................................................................ 2, 5
26
Kasza v. Browner,
27 133 F.3d 1159 (9th Cir. 1998) .............................................................................. 5, 13

28
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1 Lopez v. Heckler,
713 F.2d 1432 (9th Cir. 1983) .................................................................................... 1
2
Medhekar v. United States Dist. Court,
3 99 F.3d 325 (9th Cir. 1996) ........................................................................................ 3

4 Military Audit Project v. Casey,

656 F.2d 724 (D.C. Cir. 1981).............................................................................. 8, 11
5
National Lawyers Guild v. Attorney Gen.,
6 96 F.R.D. 390 (S.D.N.Y. 1982)................................................................................ 12

7 Northrop Corp. v. McDonnell Douglas Corp.,

751 F.2d 395 (D.C. Cir. 1984).................................................................................... 5
8
Salisbury v. United States,
9 690 F.2d 966 (D.C. Cir. 1982).................................................................................. 11

10 SG Cowen Secur. Corp. v. United States Dist. Court,

189 F.3d 909 (9th Cir. 1999) ...................................................................................... 3
11
Sterling v. Tenet,
12 416 F.3d 338 (4th Cir. 2005) ................................................................................ 5, 13
13 Thomas v. City of Evanston,
636 F. Supp. 587 (N.D. Ill. 1986)............................................................................... 6
14
Totten v. United States,
15 92 U.S. 105 (1875) ................................................................................................... 11
16 United States Surgical Corp. v. Origin Medsystems, Inc.,
No. C-92-1892, 1996 U.S. Dist. LEXIS 2793 (N.D. Cal. Feb. 3,
17 1996)........................................................................................................................... 6
18 United States v. Griffin,
440 F.3d 1138 (9th Cir. 2006) .................................................................................... 3
19
United States v. Marchetti,
20 466 F.2d 1309 (4th Cir. 1972) .................................................................................. 13

21 United States v. Reynolds,

345 U.S. 1 (1953) ................................................................................................. 5, 10
22
Washington Metro. Area Transit Comm’n v. Holiday Tours, Inc.,
23 559 F.2d 841 (D.C. Cir. 1997).................................................................................... 7

24 Washington Post v. United States Dep’t of Def.,

766 F. Supp. 1 (D.D.C. 1991)..................................................................................... 9
25

26

27

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1 Statutes and Codes

2 United States Code

Title 28, section 1292(b)..................................................................................... 1, 6, 7
3
Rules and Regulations
4
Federal Rules of Evidence
5 Rule 706...................................................................................................................... 5

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1 NOTICE OF MOTION
2 AND MOTION TO STAY PROCEEDINGS PENDING APPEAL
3 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

4 PLEASE TAKE NOTICE that on Thursday, September 14, 2006, at 2:00 p.m.,

5 before the Honorable Vaughn R. Walker, United States District Chief Judge, in

6 Courtroom 6, 17th Floor, 450 Golden Gate Avenue, San Francisco, California, defendant

7 AT&T CORP. will move and hereby does move to stay further proceedings pending
8 appeal.

9 This motion is made on the grounds that a stay pending appeal is warranted, and is

10 filed in response to this Court’s July 20, 2006 Order (Dkt. 308, “Order”) directing the

11 parties to “describe what portions of this case, if any, should be stayed if this order is

12 appealed.” Order at 71:13-14. This motion is based on this notice of motion and motion,

13 the memorandum that follows, all pleadings and records on file in this action, and any other

14 arguments and evidence presented to this Court at or before the hearing on this motion.

15 Additionally, on July 27, 2006, AT&T filed an administrative motion asking this Court to

16 grant an interim stay of proceedings until the Court rules on this stay motion.

17

18 ISSUE TO BE DECIDED
19 Should this Court grant a stay of proceedings pending appeal where the

20 interlocutory appeal certified by this Court raises serious legal questions and any further

21 proceedings are likely to prejudice the appeal and risk disclosures the United States has

22 asserted would cause exceptionally grave damage to the nation’s security?

23

24

25

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1 I. INTRODUCTION.
2 The Court’s July 20, 2006 Order (Dkt. 308, “Order”) directs the parties to “describe

3 what portions of this case, if any, should be stayed if this order is appealed.” Order at

4 71:13-14. Defendant AT&T Corp. (“AT&T”) respectfully requests a stay of further

5 proceedings in this litigation pending appeal.

6 A stay pending appeal is warranted where the stay applicant demonstrates that the

7 appeal raises “serious legal questions” and that “the balance of hardships tips sharply” in

8 favor of a stay. Artukovic v. Rison, 784 F.2d 1354, 1355 (9th Cir. 1986) (citing Lopez v.

9 Heckler, 713 F.2d 1432, 1435 (9th Cir.), rev’d on other grounds, 463 U.S. 1328 (1983)).

10 Of particular importance here, “the public interest is a factor to be strongly considered,”

11 Lopez, 713 F.2d at 1435, in assessing the balance of harms. By certifying the state secrets

12 issue for interlocutory appeal under 28 U.S.C. § 1292(b), Order at 70:26-27, the Court has

13 already recognized that the appeal raises serious legal questions.

14 The conclusion that the balance of harms strongly favors a stay of proceedings is
15 likewise inescapable for at least two reasons. First, “the quintessential form of prejudice
16 justifying a stay” exists where, as here, the appeal may be “rendered moot” unless a stay is
17 entered. In re Pacific Gas & Elec. Co., No. C-02-1550, 2002 WL 32071634, at *2,
18 2002 U.S. Dist. LEXIS 27549, at *8 (N.D. Cal. Nov. 14, 2002). The United States has
19 represented to the Court that this case should be dismissed because “any attempt to proceed

20 in the case will substantially risk the disclosure of” privileged state secrets. See Public

21 Declaration of John D. Negroponte, Director of Nat’l Intelligence (“Public Negroponte

22 Decl.”), ¶ 9 (Dkt. 124). Because the Order contemplates both the disclosure of specific

23 information that the government seeks to protect and further proceedings that risk

24 additional disclosures of information that the government asserts is privileged under the

25 state secrets doctrine, failure to stay the Order would cause precisely the harm that the

26 appeal seeks to prevent, effectively rendering the appeal moot, at least in part. Disclosures

27 once made cannot be recalled; that is why courts routinely stay proceedings pending appeal

28 of orders rejecting confidentiality and privilege claims, even where the disclosures at issue
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1 implicate only confidential commercial and fiduciary information that has no national

2 security implications.

3 Second, the harm to the nation’s security that the United States reasonably

4 anticipates if this case is litigated itself amply justifies a stay pending appeal. Whatever the

5 Court’s current view of the danger to national security arising from the disclosures and

6 further proceedings contemplated by the Order, courts are obligated to “err on the side of

7 caution” when faced with “national defense concerns,” Gentex Corp. v. United States,

8 58 Fed. Cl. 634, 655 (2003). That is particularly true here, because, as the Court

9 recognizes, it “is hardly in a position to second-guess the government’s assertions” about

10 threats to national security. Order at 26:11-12. In these circumstances, the proper course is

11 to err on the side of protecting national security and stay proceedings while the court of

12 appeals considers the state secrets issues.

13 The paramount public interest in protecting national security outweighs any private
14 interests of the plaintiffs in avoiding a stay pending appeal. Indeed, it is doubtful that it
15 would ever be proper to consider sacrificing national security interests to a plaintiff’s desire
16 for speedier prosecution of private litigation. See In re United States, 872 F.2d 472, 476
17 (D.C. Cir. 1989) (“the balance has already been struck in favor of protecting secrets of state
18 over the interests of a particular litigant”). In any event, despite plaintiffs’ vague
19 allegations, there is no reliable basis in the record to conclude that plaintiffs will, in fact, be

20 subject to a real and immediate threat of concrete injury while the appeal is pending. A

21 fortiori, plaintiffs have not asserted any harm that could outweigh the real, immediate and

22 concrete threat of irreparable damage that disclosures of state secrets could cause to

23 national security.

24 II. ARGUMENT.
25 A. The balance of harms favors a stay pending appeal.
26 The balance of harms tips sharply in favor of a stay pending appeal. First, it is well

27 settled that an order that contemplates or risks disclosure of information claimed to be

28 privileged or confidential should be stayed pending appeal for the obvious reason: “there
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1 exists a ‘real possibility . . . that privileged information would be irreparably’ leaked . . . if

2 it turns out that the district court erred.” United States v. Griffin, 440 F.3d 1138, 1142

3 (9th Cir. 2006) (first omission in original). 1 Thus, absent a stay, the appeal may be

4 “rendered moot,” which is “the quintessential form of prejudice justifying a stay.” Pacific

5 Gas, 2002 WL 32071634, at *2, 2002 U.S. Dist. LEXIS 27549, at *8. 2

6 The government contends that any information tending to confirm or deny AT&T’s

7 participation in any of the intelligence activities alleged in the plaintiffs’ First Amended

8 Complaint (“FAC,” Dkt. 8) is privileged. 3 The Order contemplates disclosure by AT&T of

9 such information, Order at 40:9-13. The government also contends that any further

10 litigation of the matters raised in the FAC would inherently risk the disclosure of other state

11 secrets. 4 AT&T must now decide whether in answering the FAC it must confirm or deny

12 the existence of all of the intelligence activities there alleged. AT&T must confront the
13 same issue in making initial Rule 26 disclosures and in pleading affirmative defenses, some
14 of which might be based on additional factual allegations. In the current posture of this
15 case, it is unclear at the very least how AT&T can defend itself without making factual
16 statements covered by the government’s state secrets assertion. In these circumstances, the
17 appeal that the Court authorized in the Order easily could be mooted, at least in part.
18
1
19 See also Admiral Insur. Co. v. United States Dist. Court, 881 F.2d 1486, 1491 (9th Cir.
1989) (granting a “petition for a writ of mandamus and request for an emergency stay”
20 relating to a district court order requiring disclosure of allegedly privileged documents);
In re Ford Motor Co., 110 F.3d 954, 963 (3d Cir. 1997) (granting appeal before final
21 judgment of privilege issues because “[a]ppeal after final judgment cannot remedy the
breach in confidentiality occasioned by erroneous disclosure of protected materials. At
22 best, on appeal after final judgment, an appellate court could send the case back for re-
trial without use of the protected materials. At that point, however, the cat is already out
23 of the bag.”).
2
See also SG Cowen Secur. Corp. v. United States Dist. Court, 189 F.3d 909, 914 (9th Cir.
24 1999) (“[A] petitioner is damaged or prejudiced if his claim will be moot on appeal.
Compliance with a discovery order moots an appeal of that order. . .”, (citing Medhekar v.
25 United States Dist. Court, 99 F.3d 325, 326-27 (9th Cir. 1996)).
3
26 Mot. to Dismiss Or, In the Alternative, For Summ. J. By the United States of America at
17:14-18:3 (Dkt. 124).
27 4
Mot. to Dismiss Or, In the Alternative, For Summ. J. By the United States of America at
16:10-19.
28
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1 Although the prejudice arising from disclosures that might moot the appeal is alone

2 sufficient to demonstrate substantial harm, it is far from the sole harm that justifies a stay.

3 The public interest weighs heavily in any stay determination, 5 but it has particular

4 significance here: when faced with “national defense concerns” where “vital interests are at

5 stake,” courts have an obligation to “err on the side of caution.” Gentex Corp., 58 Fed. Cl.

6 at 655; see also Halkin v. Helms, 598 F.2d 1, 7 (D.C.Cir. 1978) (“Halkin I”) (courts “must

7 be especially careful not to order any dissemination of information asserted to be privileged

8 state secrets”). That cautious approach is especially important where, as here, the

9 government has asserted that the dissemination of any information related to the subject

10 matter of the FAC would result in “grave” harm. In light of the risks, the entry of a stay

11 pending appeal serves important public interests that would otherwise be irreparably

12 harmed.

13 Here, two very senior Executive officers who have been entrusted with safeguarding
14 our national security have declared that, in their expert judgment, any further proceedings
15 in this litigation would risk disclosure of information that “would cause exceptionally grave
16 damage to the national security” of the United States. 6 Although the Court did not agree, it
17 acknowledged the gravity and importance of the issue with its certification for interlocutory
18 appeal and expressly recognized that it “is hardly in a position to second-guess the
19 government’s assertions in this matter.” 7 The Court also acknowledged “the extraordinary

20

21 5
Lopez, 713 F.2d at 1435 (“the public interest is a factor strongly to be considered”); see
also Dellums v. Smith, 577 F. Supp. 1456, 1458 (N.D. Cal. 1984) (the “most critical
22 factor for determining whether a stay should be granted is the effect of a stay on the
public interest”), rev’d on other grounds, 797 F.2d 817 (9th Cir. 1986).
23 6
Mot. to Dismiss Or, In the Alternative, For Summ. J. By the United States of America at
24 13:9-13 (emphasis added) (citing declarations of Director of National Intelligence,
John D. Negroponte, and Director of the National Security Agency, Keith T. Alexander);
25 Public Negroponte Declaration ¶ 12 (“any further elaboration on the public record
concerning these matters would reveal information that could cause the very harms my
26 assertion of the state secrets privilege is intended to prevent”).
7
Order at 26:11-12; see also, e.g., Ellsberg v. Mitchell, 709 F.2d 51, 58 (D.C. Cir. 1983)
27 (“[T]he probability that a particular disclosure will have an adverse effect on national
security is difficult to assess, particularly for a judge with little expertise in this area.”);
28 (continued…)
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1 security concerns raised by the government here” in proposing the appointment of an expert

2 under Fed. R. Evid. 706. Order at 69:7. Although AT&T does not concur with the

3 suggestion that such an expert should be appointed, it seems clear that the factors that led

4 the Court to consider that extraordinary step would also, and first, justify a stay pending

5 appeal. 8

6 In light of the government’s assertion that a state secrets dismissal is necessary to

7 avoid the risk of grave harm to the nation’s security, it is far from clear that the private

8 interests asserted by plaintiffs are even relevant to whether a stay should be granted pending

9 appeal. The Supreme Court has determined that the state secrets privilege is absolute and

10 that courts may not balance the national security interests it is designed to protect against

11 the interests of private litigants, no matter how compelling. See United States v. Reynolds,

12 345 U.S. 1, 11 (1953). When national security and “the greater public good,” Kasza v.

13 Browner, 133 F.3d 1159, 1167 (9th Cir. 1998), are implicated, private interests necessarily

14 must give way. 9

15 But even if private interests could be considered in determining whether a stay

16 pending appeal should be entered, clearly plaintiffs’ interests in prosecuting this litigation
17 during the appeal do not outweigh the public interest in ensuring that the appellate court has
18
(…continued)
19 CIA v. Sims, 471 U.S. 159, 180 (1985) (“It is the responsibility of [the intelligence
community], not that of the judiciary to weigh the variety of complex and subtle factors in
20 determining whether disclosure of information may lead to an unacceptable risk of
compromising the. . . intelligence-gathering process.”).
21 8
Harm from disclosures of sensitive information cannot be cured by special procedures
22 designed to protect such information, because “such procedures, whatever they might be,
still entail considerable risk.” Sterling v. Tenet, 416 F.3d 338, 348 (4th Cir. 2005), cert.
23 denied, 126 S. Ct. 1052 (2006). “At best, special accommodations give rise to added
opportunity for leaked information. At worst, that information would become public.”
24 Id. In any event, a stay of proceedings pending appeal would obviate the need for the
Court to appoint an expert.
25 9
See In re United States, 872 F.2d at 475 (“[T]he ‘balance has already been struck’ in favor
of protecting secrets of state over the interests of a particular litigant.” (quoting Halkin v.
26 Helms, 690 F.2d 977, 990 (D.C. Cir. 1982)); Northrop Corp. v. McDonnell Douglas
Corp., 751 F.2d 395, 399 (D.C. Cir. 1984) (national security interests protected by the
27 state secrets privilege “cannot be compromised by any showing of need on the part of the
party seeking the information.”).
28
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1 an opportunity to make its own judgment whether the subject matter of this lawsuit is so

2 sensitive that the private litigation must be dismissed before potentially damaging

3 disclosures occur. All record evidence (as distinct from calculatedly vague allegations in

4 the FAC) indicates that plaintiffs are not harmed by the Terrorist Surveillance Program,

5 because that program collects only “certain ‘one-end foreign’ communications where one

6 party is associated with the al Qaeda terrorist organization,” 10 and plaintiffs have alleged

7 that they fall outside that group, see FAC ¶ 70 (excluding from plaintiffs’ class “anyone

8 who knowingly engages in sabotage or international terrorism, or activities that are in

9 preparation therefore [sic]”). At worst, the harm to plaintiffs is a delay in the proceedings

10 related to other alleged “communication content” activities the government has not

11 confirmed and which plaintiffs contend may chill their use of certain communications

12 channels. To minimize these highly speculative potential harms, AT&T supports an

13 expedited schedule on appeal.

14 In assessing the supposed harm to plaintiffs, it should also be remembered that the
15 appeal will proceed under 28 U.S.C. § 1292(b). If the Ninth Circuit does not grant
16 permission to appeal, then (subject to the government’s and AT&T’s decision whether to
17 seek certiorari) any delay will be short. And if the Ninth Circuit does grant permission to
18 appeal, that decision would itself be a substantial factor weighing in favor of a stay.
19 B. The appeal raises serious legal questions.
20 A party seeking a stay pending appeal “is not required to convince the court that its

21 own order was incorrect, otherwise no district court would ever grant a stay.” United States

22 Surgical Corp. v. Origin Medsystems, Inc., No. C-92-1892, 1996 U.S. Dist. LEXIS 2793, at

23 *9 (N.D. Cal. Feb. 3, 1996). Rather, where, as here, the balance of harms favors a stay, the

24 stay applicant need only show that the appeal raises “serious legal questions.” Id. 11 That

25
10
26 Public Negroponte Decl. ¶ 11.
11
See also Thomas v. City of Evanston, 636 F. Supp. 587, 590 (N.D. Ill. 1986) (“Obviously,
27 we think an appeal will probably fail; we have reviewed our opinion and stand by it. Had
we thought an appeal would be successful, we would not have ruled as we did in the first
28 (continued…)
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1 standard is unquestionably satisfied here, as the Court’s certification of its state secrets

2 ruling for interlocutory appeal under 28 U.S.C. § 1292(b) confirms.

3 The Order’s holding that public statements about the Terrorist Surveillance Program

4 foreclose dismissal of this lawsuit on state secrets grounds raises a number of serious legal

5 questions. For example, senior government officials have determined that disclosure of any

6 information tending to confirm or deny whether AT&T was involved in any of the alleged

7 “communications content” activities would endanger national security. The Order

8 recognizes that such disclosures could have precisely that effect: “if this litigation verifies

9 that AT&T assists the government in monitoring communication records, a terrorist might

10 well cease using AT&T and switch to other, less detectable forms of communication.”

11 Order at 25:21-24. Alternatively, if this litigation reveals that AT&T did not participate in

12 the alleged communications record activities, “then a terrorist who had been avoiding

13 AT&T might start using AT&T if it is a more efficient form of communication.” Id. at

14 25:26-27. 12 The Order nonetheless rules that the government may not protect this

15 information from disclosure, because general contours of the alleged communication

16 content program have been publicly disclosed.
17 Whether this ruling is correct is, at minimum, a serious legal question. With
18 respect, the Court’s decision that “the government has opened the door for judicial inquiry
19 by publicly confirming and denying material information about its monitoring of

20 communication content,” Order at 40:3-5, is unprecedented. The courts have consistently

21 held that public disclosure of some aspects of a government intelligence program⎯short of

22

23 (…continued)
place. But a party seeking a stay need not show that it is more than 50% likely to succeed
24 on appeal; otherwise, no district court would ever grant a stay. It is enough that the [stay
applicant] have a substantial case on the merits.”); Washington Metro. Area Transit
25 Comm’n v. Holiday Tours, Inc., 559 F.2d 841, 844 (D.C. Cir. 1997) (where balance of
harms strongly favors a stay, the movant need only show that it will raise serious
26 questions on appeal).
12
See also Order at 26:5-8 (“[a] terrorist who operates with full information is able to
27 communicate more securely and more efficiently than a terrorist who operates in an
atmosphere of uncertainty”).
28
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1 official confirmation of the information for which state secrets protection is

2 sought⎯provides no basis to deny a state secrets dismissal. As another district court

3 recently explained:

4 [any] argument that government officials’ public affirmation of the existence

of a rendition program undercuts the claim of privilege misses the critical
5 distinction between a general admission that a rendition program exists, and
the admission or denial of the specific facts at issue in this case. A general
6 admission provides no details as to the means and methods employed in
these renditions, or the persons, companies or governments involved. . .
7 [T]he government seeks to protect from disclosure the operational details of
the extraordinary rendition program, and these details are validly claimed as
8 state secrets.

9 El-Masri v. Tenet, No. 1:05cv1417, 2006 WL 1391390, at *5, 2006 U.S. Dist. LEXIS

10 34577, at *18 (E.D. Va. May 12, 2006). 13

11 Here, too, the United States seeks state secrets protection for information relating to
12 the operational details of, including the means and methods employed and the persons and
13 companies involved in, the alleged NSA intelligence activities. The Order suggests that
14 AT&T could, without implicating state secrets, reveal information confirming or denying
15 its participation in the alleged communication content activities “at the level of generality at
16 which the government has publicly confirmed or denied its monitoring of communication
17 content.” Order at 40:14-16. But the government has neither confirmed nor denied the
18 participation of AT&T (or any other carrier) in any such activities at any level of generality.
19 And thus, as the Order elsewhere recognizes, “uncovering whether and to what extent a

20 certification [authorizing AT&T to assist in the alleged activities] exists might reveal

21 information about AT&T’s assistance to the government that has not been publicly

22

23 13
See also Halkin v. Helms, 690 F.2d 977, 994 (D.C. Cir. 1982) (“Halkin II”) (“disclosure
of an overseas CIA station’s existence is a far cry from disclosure of the activities carried
24 on by that station (and whether they were carried on with knowledge, acquiescence, or
active participation of local intelligence agencies”)); Military Audit Project v. Casey,
25 656 F.2d 724, 752 (D.C. Cir. 1981) (rejecting claim that “because some information about
the project ostensibly is now in the public domain, nothing about the project in which the
26 appellants have expressed an interest can properly remain classified”); Fitzgibbon v. CIA,
911 F.2d 755, 766 (D.C. Cir. 1990) (“the fact that information resides in the public
27 domain does not eliminate the possibility that further disclosures can cause harm to
intelligence sources, methods and operations”).
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1 disclosed.” Id. at 38:5-7. In short, nothing that government officials have said publicly

2 provides any basis for rejecting the government’s claim that any further information

3 regarding the alleged activities, including any information tending to confirm or deny

4 AT&T’s assistance in the alleged activities, remains privileged. Because maintenance of

5 the suit would inevitably require disclosure of such information, immediate dismissal is

6 required.

7 The Order reaches the contrary conclusion only by relying upon inapposite

8 statements by, and general characteristics of, AT&T. But, “[i]t is self-evident that a private

9 party’s allegations purporting to reveal the conduct of the United States’ intelligence

10 services . . . are entirely different from the official admission or denial of those allegations.”

11 El-Masri, 2006 WL 1391390, at *5, 2006 U.S. Dist. LEXIS 34577, at *19. Thus, even if

12 AT&T had expressly confirmed or denied its participation in any of the alleged intelligence

13 activities⎯and AT&T has categorically done neither, instead respecting the government’s
14 admonition that AT&T would violate the law if it did⎯that could not serve as a basis for
15 rejecting the government’s state secrets privilege and requiring AT&T to disclose

16 information that would reveal the existence or nonexistence of official government

17 certifications relating to any of the alleged intelligence activities. 14

18

19 14
Fitzgibbon, 911 F.2d at 765 (“acknowledg[ing] the fact that in the arena of intelligence
and foreign relations there can be a critical difference between official and unofficial
20 disclosures.”); Hudson River Sloop Clearwater, Inc. v. Department of the Navy, 891 F.2d
414, 421-22 (2d Cir. 1989) (holding that public disclosure of information by retired Navy
21 General did not affect the Navy’s classification of that information as secret) (“Officials
no longer serving with an executive branch department cannot continue to disclose
22 official agency policy, and certainly they cannot establish what is agency policy through
speculation, no matter how reasonable it may appear to be.”); Washington Post v. United
23 States Dep’t of Def., 766 F. Supp. 1, 9-10 (D.D.C. 1991) (holding with respect to a FOIA
request that “information in the public domain may be withheld” if 1) “the agency asserts
24 in its declarations that the information being withheld is not exactly the same as the
information being withheld and that release of the more detailed information in the
25 document poses a threat to the national security”; 2) “although the information withheld
is exactly the same as information in the public realm, revealing the context in which the
26 information is discussed would itself reveal additional information, release of which is
harmful to the national security”; or 3) “if the information in the public domain was not
27 officially disclosed, official confirmation or acknowledgement of that information may be
harmful to national security.”).
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1 Moreover, even if a private party’s public confirmation or denial of its participation

2 in alleged government intelligence activities could effectively waive the government’s state

3 secrets privilege to protect from public disclosure information that would tend to provide

4 official confirmation or denial, but see Reynolds, 345 U.S. at 7, there would be no basis for

5 any such finding here. Neither AT&T nor the government has made any such disclosures

6 with respect to any of the intelligence activities alleged in this lawsuit. The Order

7 nonetheless concludes that “AT&T and the government have for all practical purposes

8 already disclosed that AT&T assists the government in monitoring communication

9 content.” Order at 29:5-7. The Order reasons that: (i) the communications content

10 program admitted by government officials could not exist “without the acquiescence and

11 cooperation of some telecommunications provider,” id. at 29:20-21 (emphasis added),

12 (ii) because AT&T is a large telecommunications carrier, its “assistance would greatly help

13 the government implement this program” and, indeed, it is “unclear” whether the program

14 “could even exist” without AT&T’s participation, id. at 29:26-28 - 30:1-4, and, (iii) AT&T

15 has admitted that it has some classified government contracts and that “[i]f and when” it is

16 asked to help the government, it does so “strictly within the law,” id. at 30:14-15 - 31

17 (emphasis omitted).

18 This presumption hardly establishes, much less constitutes official confirmation of,
19 AT&T’s participation in the particular intelligence activities that are alleged in this lawsuit

20 and as to which the government has asserted the state secrets privilege. As the Order notes,

21 “[a] remaining question is whether, in implementing the ‘terrorist surveillance program’”

22 that the government has disclosed⎯ of which neither the named plaintiffs nor the class they
23 claim to represent are even potential targets⎯ “the government ever requested the
24 assistance of AT&T.” Order at 31:17-19. The very “existence” of the far broader

25 communications content surveillance alleged in the FAC “and AT&T’s involvement, if any,

26 remains far from clear.” Id. at 35:25-26.

27 Certainly, neither AT&T’s size nor its unremarkable assertions that it operates

28 within the law and responds appropriately to lawful government requests for assistance
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1 provides any basis to presume that AT&T received such a request in this instance or was

2 involved in the intelligence activities alleged in this lawsuit. With no public information

3 about the nature, purposes, targets, methods, or other operational details of any NSA

4 intelligence activities, there is no possible basis to conclude that AT&T was asked to

5 participate in such activities or that any such activities required AT&T’s participation.

6 AT&T has forthrightly informed the public that when the government asks for, and AT&T

7 can lawfully provide, help in protecting American security, it does so. This in no way

8 means that AT&T was asked to participate or has participated in the NSA intelligence

9 activities alleged in the FAC. Nor do the facts that AT&T (like many other carriers) has

10 some classified government contracts or (like all other carriers that have been sued) has

11 argued that it would be immune from suit for assisting the government as alleged here

12 provide any basis for concluding that AT&T, in fact, provided such assistance. In any

13 event, even where public information establishes the likelihood of a fact that the

14 government seeks to protect from disclosure, that public information provides no basis for a

15 court to presume the fact and then rely upon that presumption to deny the government’s

16 request for a dismissal on national security grounds. See, e.g., Totten v. United States,

17 92 U.S. 105 (1875) (dismissing a suit alleging a secret espionage agreement between

18 William Lloyd and the United States government where Lloyd’s estate itself asserted that

19 the relationship existed). 15

20

21 15
See also, e.g., Halkin I, 598 F.2d at 11 (rejecting claim that case should not be dismissed
on state secrets grounds because fact that plaintiffs communications were intercepted
22 could be presumed from the presence of their names on a publicly disclosed
“watchlists”); Military Audit Project, 656 F.2d at 745 (the “key premise on which the
23 appellants base their argument that ‘the cat is already out of the bag’ is unsupported by
the record and contrary to the government’s affidavits. The government’s affidavits are
24 entitled to substantial weight”) Salisbury v. United States, 690 F.2d 966, 971 (D.C. Cir.
1982) (upholding NSA’s refusal to comply with FOIA request in part because despite
25 agency’s prior disclosure of related information, “owing to the mosaic-like nature of
intelligence gathering, and to our desire to avoid discouraging the agency from disclosing
26 such information about its intelligence function as it feels it can without endangering its
performance of that function, we will not hold in this case that such limited disclosures as
27 have been made require the agency to make the disclosures sought here”) (internal
quotation and citation omitted); Edmonds v. United States Dep’t of Justice, 323 F. Supp.
28 (continued…)
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1 At bottom, the Order rests on the Court’s determination that “AT&T’s assistance in

2 national security surveillance is hardly the kind of ‘secret’ that the Totten bar and the state

3 secrets privilege were intended to protect or that a potential terrorist would fail to

4 anticipate.” Order at 31:22-25. The Court has apparently concluded that “public

5 disclosures . . . indicate that AT&T is assisting the government to implement some kind of

6 surveillance program,” id. at 34:2-4 (emphasis added), and that the high government

7 officials responsible for protecting national security are wrong in contending that official

8 confirmation of AT&T’s participation (or lack thereof) in the particular NSA intelligence

9 activities alleged in the FAC “creates a ‘reasonable danger’ of harming national security,”

10 id. at 35:14-15. 16 AT&T respectfully submits that this is the type of judicial second-

11 guessing of government national security determinations that the state secrets privilege
12 forbids. 17
13 In Hayden v. NSA, 608 F.2d 1381 (D.C. Cir. 1979), the court rejected the plaintiff’s
14 argument that “some channels monitored by NSA are well known to be closely watched,
15 and that no foreign government would send sensitive material over them; hence NSA can
16 safely disclose material” regarding those channels. Id. at 1388. Instead, the court correctly
17 ruled that “[t]he Agency states that to reveal which channels it monitors would impair its
18 mission” and that “[t]his is precisely the sort of situation where Congress intended
19 reviewing courts to respect the expertise of the agency; for us to insist that the Agency’s

20 (…continued)
2d 65, 76 (D.D.C. 2004) (“That privileged information has already been released to the
21 press or provided in briefings to Congress does not alter the Court’s conclusion” that
government’s invocation of state secrets privilege requires dismissal), aff’d, 161 Fed.
22 App’x 6 (D.C. Cir.), cert. denied, 126 S. Ct. 734 (2005); National Lawyers Guild v.
Attorney Gen., 96 F.R.D. 390, 402 (S.D.N.Y. 1982) (“[D]isclosure of a type of
23 information similar to that presently sought will not vitiate the state secrets privilege.”) .
16
24 See also Order at 38:2-4 (“it is not a secret for purposes of the state secrets privilege that
AT&T and the government have some kind of intelligence relationship”) (emphasis
25 added).
17
It is worth noting that much of the state secrets jurisprudence recognizing the limited role
26 of the judiciary and the need for utmost deference to the government officials responsible
for safeguarding the nation’s security was developed during times when the external
27 threats to domestic U.S. security were far less concrete and immediate than they are
today.
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1 rationale here is implausible would be to overstep the proper limits of the judicial role.” Id.

2 Here, at a minimum, the Order’s contrary ruling raises a substantial legal question, because

3 as the Order recognizes, the Court “is not in a position to estimate a terrorist’s risk

4 preferences, which might depend on facts not before the court.” Order at 41:21-23. 18

5 Finally, the Order’s rejection of AT&T’s motions to dismiss on standing grounds

6 also raises substantial legal issues. The Order contends that the FAC cannot be dismissed at

7 the pleading stage, because the plaintiffs have alleged, “upon information and belief,” the

8 creation by AT&T of “a dragnet that collects the content and records of its customers’

9 communications.” Order at 48:12-13. But this misapprehends both the governing legal

10 standard in a state secrets case and a critical aspect of AT&T’s standing argument.

11 AT&T’s argument is that, regardless of what the plaintiffs have pled in the FAC, their case

12 must be dismissed, because the government has asserted state secrets protection over any

13 information tending to confirm or deny the fact of acquisition of any of plaintiffs’

14 communications⎯an irreducible element of the plaintiffs’ standing burden. The courts

15 have universally accepted the assertion of the state secrets privilege with respect to

16 information that would confirm or deny the fact of acquisition of particular communications

17

18 18
As the Ninth Circuit has cautioned, even “seemingly innocuous information” could be
“part of a classified mosaic,” Kasza, 133 F.3d at 1166, and “what may seem trivial to the
19 uninformed, may appear of great moment to one who has a broad view of the scene and
may put the questioned item of information in its proper context.” Sims, 471 U.S. at 178
20 (alteration omitted). “Only the Director [of the intelligence agency] has the expertise to
attest⎯and he has⎯to this larger view.” Sterling, 416 F.3d at 347; see also Ellsberg,
21 709 F.2d at 58 (“the probability that a particular disclosure will have an adverse effect on
national security is difficult to assess, particularly for a judge with little expertise in this
22 area”); Halkin I, 598 F.2d at 8 (“It requires little reflection to understand that the business
of foreign intelligence gathering in this age of computer technology is more akin to the
23 construction of a mosaic than it is to the management of a cloak and dagger affair.
Thousands of bits and pieces of seemingly innocuous information can be analyzed and
24 fitted into place to reveal with startling clarity how the unseen whole must operate.”);
United States v. Marchetti, 466 F.2d 1309, 1318 (4th Cir. 1972) (“The significance of
25 one item of information may frequently depend upon knowledge of many other items of
information. What may seem trivial to the uninformed, may appear of great moment to
26 one who has a broad view of the scene and may put the questioned item of information in
its proper context. The courts, of course, are ill-equipped to become sufficiently steeped
27 in foreign intelligence matters to serve effectively in the review of secrecy classifications
in that area.”).
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1 through a classified surveillance program (as well as the means, methods and operational

2 details of the program that might indirectly provide such information). The Order provides

3 no basis for any contrary conclusion, and, where, as here, the plaintiffs will be unable to

4 prove standing, the complaint must be dismissed regardless of its allegations. See, e.g.,

5 Halkin I, 598 F.2d 1, 8-11 (affirming dismissal on standing grounds where “identification

6 of the individuals or organizations whose communications have or have not been acquired

7 presents a reasonable danger that state secrets would be revealed”); Halkin II, 690 F.2d 977,

8 999 & n.23 (“Appellants have alleged, but ultimately cannot show, a concrete injury,”

9 notwithstanding allegations of “vacuum cleaner” surveillance).

10 III. CONCLUSION.
11 For these reasons, the Court should enter a stay of all aspects of this litigation
12 pending appeal.
13 Dated: July 31, 2006.
14 PILLSBURY WINTHROP SHAW PITTMAN LLP
BRUCE A. ERICSON
15 DAVID L. ANDERSON
JACOB R. SORENSEN
16 MARC H. AXELBAUM
50 Fremont Street
17 Post Office Box 7880
San Francisco, CA 94120-7880
18
SIDLEY AUSTIN LLP
19 DAVID W. CARPENTER
DAVID L. LAWSON
20 BRADFORD A. BERENSON
EDWARD R. MCNICHOLAS
21 1501 K Street, N.W.
Washington, DC 20005
22

23

24 By /s/ Marc H. Axelbaum

/s/ Marc H. Axelbaum
25 Attorneys for Defendant
AT&T CORP.
26

27

28
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