Computer Forensics and Legal Technology Blog

As Pamela MacLean (Law.com) reports:

A potentially more serious problem for Kozinski is [the] resurrection of the 2001 internal bureaucratic fight over court monitoring of use of government computers to download movies and music.

[The] complaint includes among the 80 pages of documents, a scathing October 2007 letter from retired court administrator L. Ralph Mecham, who wrote to the head of the Judicial Conduct Committee for the Judicial Conference of the U.S., which sets policies for the federal judiciary.

Mecham, who managed the federal courts for 21 years, recounted the 2001 episode of Kozinski and former Circuit Executive Greg Walters disabling the monitoring software used for three circuits. His 16-page letter to committee chairman, Judge Ralph K. Winter, says Kozinski’s action was considered by government lawyers “not only ‘illegal’ but constituted at least one felony” citing 18 U.S.C. 1361, destruction of government property.

Mecham wrote that although the 9th Circuit’s then-Chief Judge Mary Schroeder knew of the issue, as did the circuit judicial council, no misconduct complaint was brought against Kozinski at the time.

“It is my strongly held view that this total absence of action is the worst example of failure by those responssible for disciplining judges that I have witnessed during my 21 years as AO director,” Mecham’s letter states.

Read MacLean’s article, which contains numerous URL-links for further reading.

The law, backed by the Recording Industry Association of America and Motion Picture Association of America and the U.S. Chamber of Commerce, enhances and expands existing piracy and counterfeiting laws and also creates an intellectual property czar, reporting directly to the president.

• Wikipedia entry
• Electronic Frontier Foundation coverage
• Reuters news release

In related (but somewhat dated) news, the copyright wars have gone criminal. A blogger was arrested in late August for posting songs of a widely known rock group, which songs had not yet been released. LA Times article.

An enhanced spin on this story was put out by the legal blog, May it Please the Court, which explained:

The penalties for criminal infringement are determined by its extent: if the infringer has made in any 180-day period ten or more copies of one or more copyrighted works with a total retail value of $2,500, the crime is a felony entailing up to five years imprisonment and/or a fine of up to $250,000 for individuals and $500,000 for organizations. 18 U.S.C. §§ 2319(a), 3571(b).  Jail time can be increased to ten years for repeat offenders.  Infringement is a crime where it is done “willfully and for purposes of commercial advantage or private financial gain.” 17 U.S.C. § 506(a).   Recent fines levied in criminal copyright infringement cases have been as much as $250,000.

In Jaynes v. Commonwealth of Virginia (slip opinion, Sept. 12, 2008), the Virginia Supreme Court overturned the conviction of North Carolina resident Jeremy Jaynes, who sent over 10,000 emails over a 24 hour period to subscribers of America Online using falsified header information and sender domain names.  None of the recipients had requested communication from Jaynes. Jaynes was charged with violating Virginia’s anti-spam law, which prohibits sending unsolicited bulk emails (UBEs) with false email transmission information.  The anti-spam law also raises the offense to a felony if the volume of UBEs is greater than 10,000 attempted recipients in any 24 hour period.  The court held that, while the lower court had jurisdiction over him because the emails went through AOL’s servers in Virginia, the law was unconstitutionally overbroad.  The right to engage in anonymous speech is an aspect of the freedom of speech protected by the First Amendment, and the only way a speaker can publish an anonymous email is to use a false IP address or domain name.  Therefore, by prohibiting false routing information, the anti-spam law infringes on the right to engage in anonymous speech, which the U.S. Supreme Court has held to be a direct regulation of the content of speech.  In its analysis, the court suggested that had the statute been limited to commercial or fraudulent transmission of email or transmission of illegal or otherwise unprotected speech, the statute may have been constitutional.  However, as written, the statute prohibits the anonymous transmission of all UBEs, even those containing political, religious, or other speech protected by the First Amendment, and was therefore impermissably broad.

[O]verall . . . judges seem[] to embrace — like it or not — the notion that engaging and informing the public are now part of their job description. In the digital information age, the public expects all institutions to be transparent in multiple media, immediately and at all times, and courts are no exception. Some federal and state courts are already putting a lot out there — all court documents, streamed audio of hearings, everything except what the judge ate for lunch — and that trend is spreading. J. Rich Leonard, bankruptcy judge in the U.S. District Court for the Eastern District of North Carolina, described a remarkable and popular pilot project in his court that makes digital audio of bankruptcy hearings available online for a nominal fee.

So writes Tony Mauro in Courts and the New Media (The Legal Times, Sept. 10, 2008)

– continued –

Moreover, the court applied what appears to be a derivative of the Fundamental Equity Doctrine in holding that, even if defendant had a subjective expectation of privacy because he used a confidential password, that expectation was unreasonable because of the criminal use to which it was put: “A burglar plying his trade in a summer cabin during the off season may have a thoroughly justified subjective expectation of privacy, but it is not one which the law recognizes as legitimate,'” the court said, quoting the U.S. Supreme Court’s ruling in Rakas v. Illinois, 439 U.S. 128 (1978).

An intriguing question arises when applying this doctrine to overcome the legitimate expectation of privacy:  What if the encryption software used is discovered to have been pirated or in violation of the EULA, but defendant was not otherwise putting the computer use or data to criminal use?  Does the Independent Source Doctrine warrant exception apply?  What if defendant’s alleged unlawful conduct has no relation to the data or computer use  –can that conduct be used as a pretext for overcoming defendant’s legitimate privacy expectation?  Can tortious, but not unlawful conduct, be used as a pretext for overcoming the legitimate privacy expectation?

For related prior blog posts, see:

• Domestic Travelers’ Laptops Subject to DHS Searches
• Email and Text Messaging Protected from Law Enforcement and Employers
• Reasonable Suspicion not Required for Laptop Search at Int’l Airport
• Third party PC technician’s discovery of contraband held admissible
• Surrendering the PGP passphrase
• Evidence Obtained Through Spyware May Be Admissible
• Employees Waive Privilege In Communications Transmitted From Company Computer System

The U.S. Appeals Court for the District of Columbia Circuit ruled 2-1 yesterday and upheld the legality of the Public Company Accounting Oversight Board, rejecting arguments that the PCAOB violates the Separation of Powers doctrine. An attorney for plaintiffs have indicated they will appeal either to the U.S. Supreme Court or seek a rehearing en banc. U.S. Securities and Exchange Commission Chairman Christopher Cox said the decision was “welcome news for the commission, investors and U.S. capital markets.”

For more reading:

• Sarbanes-Oxley Audit Panel Upheld by Appeals Court
• Appeals court denies challenge to accounting law
• Court upholds Public Accounting Oversight Board
• PCAOB Statement re: Favorable Decision In Free Enterprise Fund v. PCAOB

Decision and coverage.

Today, The Washington Post has published an editorial entitled, Search and Replace, arguing that Congress needs to set the rule for how border agents can delve into travelers’ laptops.  The Post points out that the Department of Homeland Security has expanded the the broad discretion of the border exception to domestic travelers’ laptop computers and other electronic devices, noting that two federal appeals courts have upheld the same.

Given the confidential nature of client data, privileged data,¹ corporate intellectual property and personal data and given the numerous data breaches that have occurred because of mishandling by government agencies, both data encryption and routine data backups (to a separate repository) seem well advised.

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¹ This could include, for example, attorney client privilege, work product privilege, Privacy Protection Act privilege (for journalists), inter alia.

Alan Gura, who argued and won the Heller case, characterized the project as “a powerful source” that helped him track down documents. Opposing counsel, Thomas Goldstein, said the project was important in the effort to “get the constitutional history right.”

Some commentators, such as the blawg Overlawyered.com (here), have opined:

The PCAOB has generated endless red tape. Its rules micromanaging companies’ internal controls, which require auditors to examine such minute details as which employee has access to which computer password, cost the American economy billions of dollars, contributing to an overall price tag for Sarbanes-Oxley of at least $35 billion a year.

On the other hand, the research firm, Glass, Lewis& Co., found that, in 2003, 4 % of all listed U.S. firms restated their reported earnings to correct mistakes. Under Sarbanes-Oxley, which imposed stricter scrutiny, that number increased in 2006 to nearly 12 %. Since then, it has edged down, as companies have improved their internal financial controls.  Some argue that’s good for investors and good for management, too, because CEOs make better decisions when they have more accurate financial information to work with.

The Washington Post (here) reports that, if the lawsuit prevails, the entire Act would fall, because it lacks a “severability” clause –if one of its provisions is found to be unconstitutional, the whole law would be stricken.

Update: After doing some further research, it seems the Washington Post article wasn’t entirely clear that the district court case was already decided against plaintiffs on summary judgment.

Although the court found that plaintiffs Beckstead & Watts had standing as to the Motions to Dismiss, it reached the merits on all three constitutional claims.

The memorandum decision is here.  The appeal docket is here.

As to the Appointments Clause, the district court concluded that PCAOB members are, in fact, inferior officers and, to the extent that plaintiffs claimed PCAOB members should have been appointed by the SEC Chairman (rather than by the entire Commission), plaintiffs lacked standing.

As to the Separation of Powers doctrine, the court noted that the Supreme Court has never held that the Constitution requires the President to maintain direct removal power over inferior officers and here the President has not been “completely stripped” of his ability to remove PCAOB members, because SEC Commissioners can be removed by the President for cause can be removed by the SEC “for good cause shown”

As to the non-delegation doctrine, the court found that legislative delegation effected by the Act is squarely within the bounds of modern non-delegation doctrine, because the auditing, quality control, and ethics standards the PCAOB applies “must either be ‘required by [the] Act or the rules of the Commission or necessary or appropriate in the public interest or for the protection of investors.”  (citing 15 U.S.C. § 7213(a)(1)).  The court declared that the foregoing are “intelligible” standards that the Supreme Court has acknowledged in “various statutes authorizing regulation in the public interest.”

Note the entry of appearance by Ken Starr on behalf of the plaintiff-appellants.