Tuesday, July 15, 2008

Are You "Less Protected" When Using An Overseas Litigation Vendor?

This guest post was written by David Booth Alden. Mr. Alden is a partner resident in the Cleveland office of Jones Day. This post is entirely his work. It of course represents only his views, and not the views of his clients or firm.


As the price of long distance communication has fallen, many companies have outsourced information-related functions previously performed in the United States to foreign countries with lower labor costs. It is commonplace to speak with representatives located in India or other, lower-cost foreign locations when calling customer “help desks.” Not surprisingly, some firms have sought similar cost savings by outsourcing litigation support functions to foreign locations that are “only an e-mail away.”

But a declaratory judgment action filed by a Maryland law firm, Newman McIntosh & Hennessey, LLP v. Bush, No. 1:08-cv-787-CKK (D.D.C. filed May 12, 2008), seeks to end or drastically reduce foreign litigation support outsourcing. Newman has been the subject of some comment in the blogosphere. (See http://www.legalethics.com/?s=plaint, http://www.pangea3.com/legalblog/, http://ridethelightning.senseient.com/page/2/, and http://commonscold.typepad.com/eddupdate/2008/05/and-theyll-gues.html). The basic issue there is whether the National Security Agency’s surveillance of international electronic data traffic either (a) waives otherwise applicable claims of attorney-client privilege or work product protection or (b) undermines the Fourth Amendment’s protection against unreasonable searches when U.S. entities communicate electronically with persons overseas.

The Newman defendants are (1) President Bush; (2) an Indian legal services firm, Acumen Legal Services (India) Pvt., Ltd.; (3) the Indian services firm’s U.S. affiliate, Acumen Solutions, LLC; and (4) John and Jane Doe defendants. The complaint alleges that (a) overseas foreign nationals lack Fourth Amendment rights; (b) when one party to an electronic communication is an overseas foreign national, the U.S. Government takes the position that there can be no reasonable expectation of privacy in the communication; (c) the NSA, acting in conjunction with other countries’ security agencies, “intercepts as many as 3 billion communications every day,” which are “relayed to NSA memory buffers” that “store five trillion pages of data;” and (d) the intercepts of attorney-client communications (i) waive Fourth Amendment rights, (ii) breach applicable claims of attorney-client privilege, and (iii) disclose confidential communications.

The Newman complaint may well suffer from threshold problems that will prevent consideration of the merits. For example, there may be no case or controversy, and the plaintiff law firm may lack standing to raise some or all of the claims. But, whatever the fate of the particular claims raised in the Newman complaint, litigants considering international legal outsourcing should be concerned if the mere fact of communicating materials overseas undermines otherwise applicable privileges and protections. Yet, at least on the limited facts revealed in the Newman complaint, that does not appear to be the case. Newman’s concerns about undermining attorney-client privilege and work product protection claims seem overblown, and the alleged Fourth Amendment problems appear to be moot.

Privilege and Work Product

With respect to attorney-client privilege and work product protection claims, an area in which I frequently dabble, the Newman complaint’s contention that NSA eavesdropping may result in a waiver is unpersuasive. No form of communication is entirely free from the possibility of eavesdropping, yet court decisions and ethics opinions generally uphold the privileged or protected status of communications exchanged by e-mail and cell phone. See, e.g., In re Asia Global Crossing Ltd., 322 B.R. 247, 255 (Bankr. S.D.N.Y. 2005) (“while disagreement exists, … the transmission of a privileged communication through unencrypted e-mail does not, without more, destroy the privilege”); ABA Formal Ethics Op. 99-413 (transmission of privileged or protected information by e-mail does not violate a lawyer’s obligation to preserve client confidences); Delaware State Bar Ass’n Ethics Op. 2001-02 (absent extraordinary circumstances, transmission of privileged or protected information by e-mail or cell phone did not violate a lawyer’s ethical obligation to preserve client confidences).

As comment c to § 71 of the Restatement (Third) of the Law Governing Lawyers (2000), notes, “[c]onfidentiality is a practical requirement” for purposes of the attorney-client privilege, and “[t]he privilege applies if the communicating person has taken reasonable precautions in the circumstances.” Here, “practical[ities]” should dictate that the risk of interception does not create a waiver because (1) the threat is a government surveillance program that, according to the Newman complaint, sweeps up huge volumes of communications and presents a fairly minimal risk that any given communication will be read by someone in the intelligence community; and (2) there do not seem to be “reasonable precautions” one could take to reduce or eliminate the threat short of not communicating.

The Fourth Amendment

With respect to the Fourth Amendment claims, an area well outside my normal practice, the claims raised in Newman are not new. A similar challenge to the NSA surveillance program that appears to be at issue in Newman – the “Terrorist Surveillance Program” or TSP – initially was successful in ACLU v. NSA, 438 F. Supp. 2d 754 (E.D. Mich. 2006). There, the district court found that (1) the ACLU had standing to challenge TSP; (2) the Fourth Amendment “requires prior warrants for any reasonable search,” 438 F. Supp. 2d at 771; and (3) enjoined warrantless TSP wiretaps.

On appeal, the Sixth Circuit first stayed the injunction and then, in a 2-1 ruling, vacated and remanded. ACLU v. NSA, 467 F.3d 590 (6th Cir. 2006) (entering stay pending appeal); ACLU v. NSA, 493 F.3d 644 (6th Cir. 2007), vacating and remanding 438 F. Supp. 2d 754 (E.D. Mich. 2006), cert. denied, 112 S. Ct. 1334 (2008). While the dissenting judge would have affirmed because, in his view, the TSP’s warrantless searches violated both the Foreign Intelligence Surveillance Act or FISA, 50 U.S.C. § 1801, et seq., and Title III of the Omnibus Crime Control and Safe Streets Act, 18 U.S.C. §§ 2510-22, the majority found that the plaintiffs lacked standing. ACLU, 493 F.3d at 713 (Gilman, J., dissenting); id. at 657 (majority opinion).

But more importantly for present purposes, the government represented in that appeal that, as of early 2007, the TSP had been altered to conform to FISA’s warrant requirements. 493 F.3d at 651 n.4. Specifically, then-Attorney General Alberto Gonzales stated that, following a January 10, 2007 Foreign Intelligence Surveillance Court order authorizing the government to target communications where there is probable cause to believe that one party is affiliated with al Qaeda, future TSP electronic surveillance would “‘be conduct[ed] subject to the approval of the Foreign Intelligence Surveillance Court.’” Id. (quoting Jan. 17, 2007 letter from Attorney General Gonzales).

If TSP now operates subject to FISA’s requirements as the government represented, claims that the NSA is conducting warrantless searches of international communications based on descriptions of TSP as it existed before 2007 seemingly would lack merit. Thus, Newman may be much ado about very little.

1 comment:

Anonymous said...

Wow, a big firm lawyer justifies practicing law overseas...without a license. What a shocker.

I tell you what. Give me the ability to plant whatever spy device I want into Jones Day, without any recourse, ( and by the way, my device would be way less powerful than say..the United States Government )and let's see if that may affect his atty-client priv.

What a joke.