Coercive fines, national security, and the Death Star

When the Department of Justice went after Yahoo in 2008 to enforce a surveillance order related to national security, the Internet services provider initially resisted the subpoena and attempted to fight it in court. Last week, when the story from the 2008 legal fight emerged, the cost of sustaining that fight to protect user privacy looked desperate enough, with potential fines for Yahoo set at $250,000 a day, even while appealing the order in FISA court. The Washington Post reported yesterday that it was actually much worse than that — in fact, it was exponentially worse, literally:

For an illuminating glimpse of government power in action, it’s hard to beat the fines the Justice Department threatened to level against Yahoo if it didn’t comply with a secret and sweeping surveillance request in 2008.News coverage of the case, for which documents were unsealed last week, reported the proposed fines as $250,000 a day. But there was also a clause that called for a doubling of the amount each week if Yahoo refused to comply. It was more than enough to bankrupt the company after just a few months.

Yahoo’s longtime outside counsel, Marc Zwillinger, who was lead attorney in the unsuccessful fight against the government’s data demand, calculated the cost of resistance at more than $25 million after the first month and $400 million in the second month. “And practically speaking,” Zwillinger noted in a blog post published Monday afternoon, “coercive civil fines means that the government would seek increased fines, with no ceiling, until Yahoo complied.”

The case was a foundational legal step in the government’s construction of PRISM, the surveillance program that gives NSA extensive access to records of online communications by users of Yahoo and other U.S.-based technology firms. What most bothered Yahoo was the lack of individual search warrants and court review for people outside the United States – something the company argued was required by the Fourth Amendment of the constitution.

Yahoo lost its case before the Foreign Intelligence Surveillance Court in April 2008 and, as the company prepared to appeal to a higher court, the government requested that the daily fines begin. Rather than pay them, the company began furnishing the requested user data while it continued its legal fight. The company eventually lost the appeal.

In one sense, this provides a little context for the revelations from the Edward Snowden cache. Internet providers didn’t just blithely submit to PRISM, but at least in this case attempted to fight it. On the other hand, the issue of blanket subpoenas and massive data collection didn’t just pass under the radar for the FISA court either. The court apparently had an opportunity for debate, if a necessarily brief one, on its hands before fiscal necessity forced Yahoo to start complying with the order even while appealing it on 4th Amendment grounds.

That doesn’t mean that the system provided by Congress allows for the right to reasonably challenge these orders. The weekly doubling of the balance of fines provided a startling amplification of government power to force companies into compliance even if the courts might eventually rule that the government had indeed violated the Constitution. The Post puts this into perspective with this chart showing the rapid escalation of costs into the ridiculous, which the Post has at its full size on its site:



Within twelve weeks under this system, Yahoo would have run through its 2007 revenue of $7.2 billion in fines. Before the 28th week, Yahoo’s fines could have paid off the national debt at that time of $9.5 trillion. At week 36 — less than nine months — Yahoo would have had to find every last cent of the value of the Earth at $195 quadrillion.  Just a couple of weeks after that, they would have had to mortgage the fully-operational Death Star, presumably minus the two-meter-wide port that allows some kid in a speeder to put a banana up its tailpipe and blow it apart.

National security should get taken seriously, but so should constitutional protections. Americans have the right to seek redress in courts for arguably illegal actions taken by the government, but laws such as these make those rights theoretical at best. If the government can end up charging you for a Death Star within the gestational period of a normal human being as the consequence of exercising that right, then the right does not exist at all in any practical sense. Congress needs to revisit this ASAP.

Small wonder few of the telecoms fought the US for long on these orders. They must have looked at this and told themselves:

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David Strom 9:31 PM on December 05, 2022