Mediaboss Marketing

Two weeks ago, in United States v. Rosenow, the Ninth Circuit handed down a decision that has a brief but truly stunning passage with major implications for the future of Fourth Amendment law. If the passage stays in the opinion, it's going to have a quite dramatic effect, perhaps inadvertently, on how the Fourth Amendment applies to computers and the Internet. And in my view, those effects are bad. Really, really bad. In this post, I want to say why the passage in Rosenow is so important, and why it's so disturbing. And I'll suggest a possible path forward to deal with it.

I. An Overview of the Rosenow Case

Rosenow arose out of an investigation into child exploitation in the Philippines. Two large Internet providers, Yahoo and Facebook, ended up being involved. That led eventually to Rosenow's arrest on his return from the Philippines to the United States and a search through his computers pursuant to a warrant. The search revealed child sexual abuse material (CSAM), also known as child pornography, including some involving sexual acts between Rosenow and prepubescent Filipina girls. On the basis of the images found on his computer, Rosenow was convicted of sexual exploitation and CSAM possession.

On appeal, Rosenow made several different arguments in his merits brief. A majority of the merits arguments were on Fourth Amendment law. The primary Fourth Amendment claim was that Yahoo and Facebook had become state actors, and that their accessing account information was a government search that triggered the Fourth Amendment. But Rosenow also challenged other parts of the investigation, including the validity of the warrant obtained and whether accessing basic subscriber information was a search.

The Ninth Circuit affirmed in a published opinion by Judge Forrest, joined by Judge Callahan, with a partial dissent by Judge Graber. The Court ruled that Facebook and Yahoo were acting as private actors, not state actors; that the warrants were valid, and that accessing basic subscriber information is not a search under the Fourth Amendment. Judge Graber dissented in part as to one aspect of the state action ruling.

So far, this seems like an interesting decision, although on the whole relatively minor in its significance. It's mostly fact-specific issues (such as where the state action line is) or else pretty clearly correct (such as the ruling that accessing basic subscriber is not a search). It also has a lot I very much agree with, such as the specific ruling that the Stored Communications Act doesn't make Internet providers state actors.

But that's not all. There's more. And that "more" turns out to be really big -- much bigger in its importance, I think, than everything else in the Rosenow opinion.

II. The Stunning Passage in Rosenow

What is that really big thing? In his merits brief, Rosenow claimed that a set of other practices, including the preservation of his Internet account contents, violated the Fourth Amendment. The argument is less than a page of the brief, see page 64, and the only material specifically about preservation is a single sentence saying that the preservations were seizures.

To my great surprise, Rosenow's merits opinion took on those claims and rejected them on the merits. And because Rosenow is a published opinion, its holding is now binding in the Ninth Circuit. In the 45-page published opinion, here's the totality of the discussion of preservation and the Fourth Amendment:

Were the preservation requests unconstitutional seizures?

Acting pursuant to 18 U.S.C. 2703(f), which requires an ESP "to preserve records and other evidence in its possession pending the issuance of a court order or other process," the government directed Yahoo on three separate occasions to preserve records related to Rosenow's private communications. Rosenow contends that these requests were an unconstitutional seizure of his property.

A "seizure" of property requires "some meaningful interference [by the government,] with an individual's possessory interests in [his] property." Jacobsen, 466 U.S. at 113. Here, the preservation requests themselves, which applied only retrospectively, did not meaningfully interfere with Rosenow's possessory interests in his digital data because they did not prevent Rosenow from accessing his account. Nor did they provide the government with access to any of Rosenow's digital information without further legal process. It also is worth noting that Rosenow consented to the ESPs honoring preservation requests from law enforcement under the ESPs' terms of use. Thus, we agree with the district court that these requests did not amount to an unreasonable seizure in violation of the Fourth Amendment.

Yikes!

III. Why the Passage Is So Important, and Why It's Really Bad.

Why is this passage so important? There are two main reasons, I think. The first is narrower, and the second broader. Let me start with the narrower reason (although it's still pretty broad!).

First, as regular readers know, I think the Fourth Amendment makes most Internet content preservation unconstitutional. You can see my full argument in this recent article of mine: The Fourth Amendment Limits of Internet Content Preservation. And you can see the argument fully written out as defense counsel might litigate it in this draft motion to suppress I recently wrote. I think this is a hugely important issue, although it remained almost entirely unlitigated, much to my frustration. No federal court of appeals has decided this issue until Rosenow. The Ninth Circuit heard oral argument on this issue and had extensive briefing on it (with amicus oral argument participation, and briefing, from the ACLU) in United States v. Basey in 2019, but the panel did not reach the question in its decision.

For the Ninth Circuit to weigh in in this fashion when it wasn't fully briefed, and to reject these claims on the merits, is a big deal. It means that the government is free to pursue unlimited preservation, even though the major (and to my mind persuasive) arguments for why it shouldn't be able to do that have not been presented to the court that is saying this is permissible.

That's huge. Under Rosenow, any government official can at any time order any Internet provider to run off a copy of anyone or even everyone's entire account contents. The only authority on the question is now Rosenow, which rejects the claim. I think this is all wrong on the merits. But more importantly, it's wrong on a vast scale: As explained in my article, there are hundreds of thousands of Internet preservations occurring every year. This passage in Rosenow gives any government official a blank check to order any preservation of anyone or everyone's account without limit. To decide this important a question in such a brief and unexplained passage is remarkable.

So that's the narrower (but again, pretty broad) problem. Here's the even broader one. The particular way that Rosenow rules for the government is incredibly far-reaching and deeply troubling. Here's the key passage again:

A "seizure" of property requires "some meaningful interference [by the government,] with an individual's possessory interests in [his] property." Jacobsen, 466 U.S. at 113. Here, the preservation requests themselves, which applied only retrospectively, did not meaningfully interfere with Rosenow's possessory interests in his digital data because they did not prevent Rosenow from accessing his account.

This is a remarkably far-reaching ruling, and all in just two sentences. Whether and when copying data is a Fourth Amendment seizure is one of the foundational questions of the future of Fourth Amendment law that has been in the background of the caselaw for years. And it's also been a topic in scholarship for a long time, including stuff I have spent a lot of time on. As longtime readers may remember, in 2005 I initially concluded that copying wasn't a seizure. By 2010, however, I had changed my mind, and I wrote an article explaining why copying ordinarily is a seizure, using preservation requests as an example: Fourth Amendment Seizures of Computer Data, 119 Yale Law Journal 700 (2010).

District courts have divided on the question. And the one federal court of appeals ruling on it, which had held that copying is a seizure, was vacated when the court went en banc (presumably for reasons other than the seizure ruling, as there was a lot more going on in the case). SeeUnited States v. Ganias, 755 F.3d 125, 137 (2d Cir. 2014) (holding that the Government's retention of electronic copies of the defendant's personal computer "deprived him of exclusive control over those files," which was "a meaningful interference with [the defendant's] possessory rights in those files and constituted a seizure within the meaning of the Fourth Amendment."), vacated by United States v. Ganias, 824 F.3d 199 (2d Cir. 2016) (en banc). So until Rosenow, there was no circuit court precedent on this foundational question.

By ruling that copying is not a seizure, the Ninth Circuit becomes the first circuit court to have ruled on the question in a decision that is still on the books. And the question is of dramatic importance, as the introduction to my 2010 articleflags:

Imagine the police take away a suspect's computer, make a digital copy of its contents, and then give the computer back to the suspect. The police do not open the copy, but they keep it in their custody in case they need to access it later. Does the combined act of copying the files and retaining the copy trigger the Fourth Amendment?

Next imagine that FBI agents believe a particular person is using the Internet to commit a crime. Agents install a surveillance tool at the target's Internet service provider (ISP), and the tool generates copies of all of the target's incoming and outgoing email. The email is copied to a file, but no human being actually looks at the file. Instead, the agents keep the file in case they develop probable cause to look through it for evidence. Again, does the Fourth Amendment allow it?

The answer to both scenarios depends on whether copying computer files without looking at them constitutes a Fourth Amendment "seizure. If copying a computer file amounts to a seizure, then the government cannot make and retain a copy absent special circumstances. On the other hand, if copying is not a seizure, then the government can make and retain the copy without restriction. The Fourth Amendment will limit looking through the copy because that is a Fourth Amendment "search. But what if the government wants to make a copy and hold it? Does that constitute a "seizure"?

Putting the preservation issue aside, a ruling that copying is not a seizure has extraordinary implications. Whether you agree with that holding or disagree with it, I don't think it's a conclusion that is best reached in a precedential opinion in just two sentences.

And that's not all. The Rosenow passage includes this sentence:

It also is worth noting that Rosenow consented to the ESPs honoring preservation requests from law enforcement under the ESPs' terms of use.

What were those terms of use? Earlier in the decision, the court notes a fairly standard term in its privacy policy, here Yahoo's, that Yahoo may disclose information "to investigate, prevent, or take action regarding illegal activities . . . , violations of Yahoo's terms of use, or as otherwise required by law." I assume that's the term they had in mind.

I'm not entirely sure how to read that "note." But read fully, it seems to be suggesting that agreeing to terms of use governing an Internet account can eliminate Fourth Amendment rights. In particular, the provider telling you in the fine print when you register the account that they might end up giving your data to the government in some situations is treated as forever blanket consent to that as a matter of Fourth Amendment law.

As a matter of Fourth Amendment law, I think that would be wrong, for reasons I argued here. But it's also about as far-reaching as you can get. If agreeing to standard terms of service is consent to a possible seizure, then presumably it is also consent to a possible search. That would mean that Fourth Amendment rights online can be reduced to zero through a standard online term no one reads, and that users can't avoid, that were created just to make sure no one can sue the providers for complying with valid legal process. I don't want to be apocalyptic, but this seems really really bad.

IV. A Possible Way Forward

What are the prospects for further review? En banc review is possible. Counsel for Rosenow has received an extension for a petition for rehearing, until June 8. When the petition for rehearing is filed, it's possible that the court could want an en banc panel to take a look at the preservation issue, which could lead to a new opinion. And I would certainly support a full look at the preservation issue by the en banc court.

But there's also a narrower way, should the court not want to go en banc on this or another part of the case. It seems to me that another way forward would be for the panel to just amend the opinion, only changing that passage, to say the issue will not be addressed because it was not fully briefed and was therefore waived.

Here's some context. Under Ninth Circuit practice, an issue is deemed waived unless the appellant "specifically and distinctly argue[d] the issue in his or her opening brief." United States v. Kama, 394 F.3d 1236, 1238 (9th Cir. 2005). The appellant has to specifically and distinctly raise the issue, and it then has to be "supported by argument" in the opening brief, for the Ninth Circuit to rule on it. Leer v. Murphy, 844 F.2d 628, 634 (9th Cir.1988).

As I read the opening brief, whether preservation is an unreasonable seizure was neither specifically and distinctly argued nor supported by argument in the opening brief. Here's the full section from the opening brief:

The government's subpoenas and preservation requests were also illegal searches and seizures under Carpenter.

The recent Supreme Court case Carpenter v. United States, 138 S. Ct. 2206 (2018) also instructs that Rosenow had a legitimate right to privacy in his digital data, and that it violated the Fourth Amendment to interfere with that right without a warrant and probable cause. In Carpenter, the government obtained orders directing wireless carriers to provide cell-tower data regarding several criminal suspects. Id. at 2212. The Supreme Court reversed the resulting conviction, holding that warrantlessly obtaining this information violated the Fourth Amendment. In so doing, it rejected the notion that the third-party doctrine insulated this information from Fourth Amendment scrutiny, noting that thirdparty- doctrine cases did not deal with "confidential communications" and other private information. Id. at 2219. [FN158] The Court held that a warrant should have been required: "this Court has never held that the Government may subpoena third parties for records in which the suspect has a reasonable expectation of privacy" it observed. Id. at 2221 (emphasis provided). "If the choice to proceed by subpoena provided a categorical limitation on Fourth Amendment protection, no type of record would ever be protected by the warrant requirement." Id. at 2222.

Carpenter demonstrates that searches and seizures occurred here. The government seized Yahoo records through ongoing preservation requests, with no notice to Rosenow. And it both seized property and affirmatively prompted additional searches by issuing administrative subpoenas to Facebook. Under Carpenter, this should have required a warrant showing probable cause. Because the government had neither, this evidence should have been suppressed.

[FN158: Even the dissent seemed to concede that private communicationsas opposed to mere location datawould not be governed by the third-party doctrine. See id. at 2230 (Kennedy, J., dissenting) ("Miller and Smith [the leading third-party cases] may not apply when the Government obtains the modern-day equivalents of an individual's own 'papers' or 'effects,' even when those papers or effects are held by a third party.") (citing Ex parte Jackson, 96 U. S. 727, 733 (1878) (letters held by mail carrier); United States v. Warshak, 631 F. 3d 266, 283-288 (6th Cir. 2010) (e-mails held by Internet service provider)).]

The claim here seems to be that, somewhere in the subpoenas and preservation requests, there were unreasonable searches and seizures. Most of the passage seems to be arguing that the subpoenas were searches under Carpenter, a claim that in my view the Ninth Circuit properly rejected.

But here's the key. As I read that passage, it doesn't seem to be separately and distinctly claiming that preservation is an unreasonable seizure, or offering a legal argument for why that might be. The test for what is a seizure is not even mentioned. How the test might apply is not mentioned. The test for the reasonableness of a seizure is not mentioned (much less applied) either, except to say that a warrant should have been required. Compare that passage to the model brief I recently posted. It seems to me that the opening brief in Rosenow did not put the court on notice of the legal questions before it on the preservation issue. You'd have to guess what the specific arguments were on the preservation issue, as the opening brief didn't flag them, much less make them.

I don't mean to criticize the hard-working counsel in the case. I believe Rosenow was the first case ever to get an opinion on the Fourth Amendment issues raised by preservation in the trial court decision. To use an exam-grading analogy ('tis the season): The issue was spotted, unlike all the other cases where counsel have just missed it. The opening brief raised a lot of issues, and went right up to the page limit, so it may not have been developed because of other issues in the case. And I agree that the preservation issue was addressed in more detail in the Ninth Circuit reply brief.

But it seems to me that, if the court doesn't want to take this enormously important set of questions on en banc, it might be wise to amend the panel opinion to recognize that there's a lot more going on in the case than the panel realized given that the issue was not fully developed in the opening brief. That would make no difference to the outcome. And it would just replace a single paragraph in the opinion, as the analysis paragraph would just become a waiver paragraph. But it would mean that these critical and novel legal issues could wait for full briefing and decision in another case.

As always, stay tuned.

[UPDATE: I fiddled a bit with the post shortly after posting it.]

Continue reading here:
The Ninth Circuit's Stunner in Rosenow, and Thoughts on the Way Forward - Reason

Our bipartisan, public interest organization frequently files Freedom of Information Act (FOIA) requests to learn how the FBI, CIA and other intelligence and law enforcement agencies obtain warrantless access to Americans personal information, in defiance of the Fourth Amendment. It is, to say the least, a target-rich environment.

A government watchdog agency revealed in February that the CIA has been conducting bulk surveillance of Americans in violation of that agencys charter forbidding domestic spying. In March, we learned that a component of the Department of Homeland Security is scooping up Americans personal financial transactions in the form of money transfers.

In both instances, the government acts on the belief that the Fourth Amendment requirement for a probable cause warrant can be sidestepped when it comes to obtaining our personal movements and other sensitive consumer information from our cell phones and digital devices. Government attorneys assert it is legal for their agencies to simply open the government purse and buy our data scraped from apps and social media, no warrant needed. When further challenged, the governments ultimate fallback is a claim that a Reagan-era executive order, known as E.O. 12333, means that it needs no statutory authority to look at whatever it wants.

It wasnt supposed to be like this. Congress created the Freedom of Information Act in 1967 at a time when lawless surveillance of Americans by the FBI and CIA was rampant. It sought to create balance with a tool for Americans to get some clarity about government operations. But even here, the government ignores the plain meaning of the law to do whatever it wants.

For example, our organization has been forced to sue the Department of Justice and FBI to compel them to produce records on potential spying on Congress. We are concerned that members of Congress of both parties who have publicly stated they believe U.S. intelligence agencies have been surveilling them and has unmasked their identities in foreign communications, may have been targeted by our government. We also have been forced to sue over the refusal of six government agencies to respond to a FOIA request seeking information on surveillance of presidential campaign and transition officials.

In both cases, our requests have been stymied by a legal tactic known as a Glomar response.

This judicial doctrine arose from one of this countrys greatest intelligence coups. After a Soviet nuclear ballistic missile submarine sank in the Pacific Ocean in 1968, the U.S. Navy located the wreck at a depth of three miles. With an elaborate cover story and the help of billionaire Howard Hughes, the CIA spent the current value of $1.3 billion to build an ambitious deep-sea platform, Hughes Glomar Explorer, which dropped an enormous claw to the seabed to retrieve a section of the sub.

When journalists followed up on Glomar rumors, the government developed the Glomar response, which holds that certain information vital to national security can be neither confirmed nor denied.

What was once an exceptional tactic to protect heroic intelligence operations has since become a standard ploy to render FOIA meaningless. In the case of potential spying on Congress, some of the documents we seek are correspondence between intelligence agencies and members of Congress who believe theyve been targeted. On what national security basis can the government categorically refuse to search for, and thus withhold, all correspondence with Congress?

In our FOIA concerning spying on campaigns, the government asserts that the very act of searching for documents could jeopardize national security. Opening a file drawer to look for congressional correspondence is not, in fact, analogous to publicly revealing the existence of a super-secret vessel capable of bringing a Soviet nuclear submarine to the surface. Besides, how can the government know which files are classified and involve national security, and which can be released, without looking at them?

When Attorney General Merrick Garland was chief judge of the D.C. Circuit Court, he upheld the principle that official acknowledgement of documents can force their disclosure over an otherwise valid Glomar response. Perhaps courts could further adopt a bright-line rule that would balance national security and the U.S. Constitution. They could hold that an agency is acting in bad faith when it attempts to Glomar documents containing evidence of possible illegal interference in Congress and campaigns.

Judges are the Constitutions last line of defense. The expansion of the Glomar loophole to circumvent FOIA threatens to render a law passed by Congress, and signed by a president, with the approval of the American people who elected them, utterly meaningless. At the very least, the courts should make the agencies look through their files as FOIA clearly demands.

Unless judges respond with some vigor, the trust Americans place in our government will deserve to be lower than a Soviet sub stuck in the Marianas Trench.

Mark Udall was a U.S. senator representing Colorado from 2009 to 2015. Bob Goodlatte represented Virginias 6th District in Congress from 1993 to 2019 and chaired the House Judiciary Committee. Both are senior policy advisers to the Project for Privacy and Surveillance Accountability.

Follow this link:
We can neither confirm nor deny were spying on Congress - The Hill

I know Im not stupid, but did you watch Mattea Roach on Jeopardy? I was spell-bound while she immediately hit her buzzer with the correct answer to many more questions than I can imagine ever having learned about. There she was, immediately recalling the name of a teeny island that I never heard of, dates of events so old they predate our ancestors ancestors. From the air, she easily pulled names of third and fourth cousins of the ninth reigning queen of a country thats been extinct for several lifetimes. How in the world did she do it?

I know our brains are supposed to have been the first computers, but come on! It doesnt mean we dont forget things. It doesnt mean we all can analyze formulas and recall everything weve ever learned for the rest of our lives. Contestants like Mattea have fascinated me from the first time I realized how few questions I can answer on Jeopardy while it is childs-play to them.

I would love to talk to the parents of these wonder-women and -men. How did they raise such smart people? Did they have implants inserted in their children at birth? Did they constantly play music as they raised their children? Ive read that music stimulates the young brain, especially while they sleep. There may be truth to that, as my granddaughters mother played soft music every night while Cadence slept and believe me, she is one smart cookie. My parents, on the other hand, liked a quiet house, so musical notes rarely bounced off our walls. When I became aware of the Beatles, back in the 60s, I got a record player, built a collection of 33 1/3s, and played music in my room with the door closed, but I think it was too late for me. So, here I am, not the brightest light bulb in my husbands garage, but I get by.

Getting by would not be acceptable to people like Mattea. To excel beyond supposed human capabilities is more her speed. Is there a limit to how much information a human being can retain forever? Ive read that the only reason animals dont outsmart us is because our brain to body ratio is greater than those of whales, elephants, all animals for that matter.

YET, on the other hand, what do brainiacs do with all that knowledge reverberating within their skull? Is there really a need to know everything? Is one lifetime enough to put all that knowledge to good use? Too bad people cant share their intelligence with the rest of us lesser souls. Im sure Mattea could give me one-third of her intelligence and never miss it. But what a difference it would make to me. What would you with, say, five times more intelligence and memory capability than you have now? Invent a cure for cancer? Figure out how to get to the end of the wild blue yonder? Look beyond yourself to the needs of others and instantly know what they need and how to supply it? Maybe not only present our opinions, but instantly present facts (real facts, not made-up ones) on which we base our opinions?

On the other hand, does the world really need us all to know everything at the drop of a question? There are places for us sitting on the lower rungs. Maybe high intelligence doesnt equal patience, empathy, and generosity. Now, Im not suggesting high intelligence equals lack of humanity that certainly would be outweighed by caring people in the medical field, teaching, and yes, even in politics. What Im saying is, arent our needs fulfilled by moms and dads, manual laborers, helpful neighbors, leaders of faith just as important as our highly successful scientists, archeologists, law interpreters?

Well, Ive talked myself into it. Now I can watch Mattea as she casually recalls the fourth amendment to Estonias constitution and not be jealous. She has her role in life, and I have mine. Whos to say her role is more important than mine, or yours? I guess the bottom line is to do our best, whatever that might be. Never harm, only love, share, and assist.

Read this article:
Is there really a point to knowing everything? | North State Voices - Oroville Mercury-Register

Using Samuel Alitos logic in proposing to strike down the right to an abortion, other rights that you take for granted could also be eliminated. The argument is that if something is not mentioned in the Constitution, that right is based only on the majority opinion of the Supreme Court. Thus, if the Roe vs. Wade decision was wrong, the current court could reverse that decision.

This opens to door to removing other presumed rights. For example, the Constitution does not give you the right to own an AR-15. The Second Amendment only gives you the right to keep and bear arms and says nothing about private ownership. The Swiss government used to require all men of a certain age to keep their military weapon at home while not on deployment or in training. The Constitutions language does not say it allows for private ownership just to keep and bear arms for a well regulated militia. The only thing that allows you to own firearms is the interpretation by the Supreme Court, which we now see can change.

How about your right to privacy? The Fourth Amendment only protects you from unreasonable searches and seizures but says nothing about privacy. A state could sue to make all medical, educational, and employment records public. If the Supreme Court agrees that the Constitution does not address these, it could rule that all records can be made public.

How about the right to travel between states? There is nothing in the Constitution that gives you that right. Thus, if a state wants to restrict entry or charge you $100 to enter the state, the Supreme Court could use the logic applied to Roe vs. Wade to allow a state to do that.

More likely the so-called conservatives who brought the lawsuit on Roe vs. Wade will go after your right to enter a mixed-race marriage or marriage for same sex couples. The right to use contraception services and products would also be subject to the whim of five justices. The Constitution does not address these rights any more than it addresses Roe vs. Wade.

Let your imagination run free to think of all the rights you think you have that are not explicitly covered by the Constitution or its amendments. Public education, libraries, and healthcare are among the things not mentioned in the Constitution and would be fair game for revocation or elimination.

The other part of the argument against abortion rights is that until 1973 there was no support for a constitutional right for access to an abortion. That logic might mean that women will again need to get a mans permission to get a credit card, which was the case before 1973. Not allowed until after 1973 was the protection for a woman not to get fired if she got pregnant or to sue for sexual harassment in the workplace. All rights that women and men have won since the founding of the country would be subject to cancelation.

Apparently, Alito thinks that anything after the 1600s does not qualify as being deeply rooted in the nations history and traditions as he quotes a British jurist who executed witches and advocated for executing children as young as 14. That same jurist considered women to be the property of either their father or husband. Women who were independent of a man (e.g., widows) were considered with suspicion and occasionally accused and prosecuted for practicing witchcraft.

The Roe vs. Wade decision is based, in part, on the fact that in the first trimester the fetus is essentially an extension of the womans body and upon which it is dependent for its existence. The Alito position makes the woman subservient to the fetus based on a religious position, not facts based on biology. If this religious position dictates judicial decisions, other religious positions could be imposed on all citizens. The Supreme Courts conservative majority seems intent on exercising its activist agenda to take the country back to a darker place.

(Dr. Norm Hoffman is a semi-retiredclinical psychologist living in Waynesville.This email address is being protected from spambots. You need JavaScript enabled to view it..)

Go here to read the rest:
If Roe v. Wade goes, then what is next - Smoky Mountain News

Dear Chairman Scott and Ranking Member Foxx:

The U.S. Chamber of Commerce opposes H.R. 7701, the Wage Theft Prevention and Wage Recovery Act, which would hinder employees from receiving their due compensation and inhibit the use of arbitration procedures that have been shown to be highly efficient and cost effective.

While sounding benign and well meaning, the provisions on requiring pay disclosures and paystubs are redundant with rights covered under state law. Adding federal requirements would add complexity and confusion without actually improving worker protections.

Similarly, increasing the financial consequences for violations makes a great headline, but the actual impact on low-wage workers will not be to their advantage. Employers faced with such massive damages and penalties will most likely choose to challenge the citations and allegations and pursue a litigation approach. Payment of back wages would be delayed by years. The plaintiff's bar will collect more fees, but low-wage workers may see scant returns or nothing at all. The proposed increases also are inflexible with no room for discretion based on the size of business or the type of violation.

The ultimate goal of this bill is to promote expensive class action litigation that does little to help businesses and employees by precluding the enforcement of predispute arbitration clauses. Such litigation serves principally to benefit the attorneys who file class action lawsuits. Arbitration is a fair, effective, and less expensive means of resolving disputes compared to going to court. Empirical studies demonstrate that employees in arbitration do just as well, or in many circumstances, considerably better, than in court. For example, recent studies have found that employees in arbitration prevail three times more often, win more money, and resolve their claims must faster than in litigation.[1] Studies have also shown that class action settlements frequently provide only a pittance or many times, nothing at all to class members while millions of dollars are paid to their attorneys.[2]

Finally, the bills Grant Program would deputize advocates to help conduct investigations. This would eradicate the long tradition of employers voluntarily cooperating with agency investigations, producing documents, and welcoming investigators into their worksites. If the Department of Labor brings along unions and advocates, employers would likely stop cooperating and insist on search warrants and document subpoenas, in accordance with the Fourth Amendment. Again, more complexity, longer investigations, and more litigation will harm low-wage workers by delaying payment of wages.

The Chamber urges the Committee not to approve the Wage Theft Prevention and Wage Recovery Act.

Sincerely,

Neil L. Bradley

Executive Vice President, Chief Policy Officer,

and Head of Strategic Advocacy

U.S. Chamber of Commerce

cc: Members of the House Committee on Education and Labor

[1] See Fairer, Faster, Better III: An Empirical Assessment of Consumer and Employment Arbitration (March 2022) available at https://instituteforlegalreform.com/research/update-an-empirical-assessment-of-consumer-employment-cases-in-arbitration-litigation/.

[2] See Do Class Actions Benefit Class Members? An Empirical Analysis of Class Actions (Dec. 11, 2013) available at https://www.mayerbrown.com/files/uploads/documents/pdfs/2013/december/doclassactionsbenefitclassmembers.pdf.

See more here:
U.S. Chamber Letter on H.R. 7701, the Wage Theft Prevention and Wage Recovery Act - uschamber.com