Articles Posted in Government

The National Security Agency (“NSA”) along with other government agencies (e.g., FBI, CIA) have expanded their surveillance programs after several terrorist attacks took place on domestic soil. It is a known fact that the federal government is systematically tracking domestic and international calls of its citizens. The surveillance program does not end there but also expands to text messages, internet browsing, and emails.

There is information that indicates the President’s Surveillance Program (“The Program”) was designed to assess, evaluate, gather, and analyze a tremendous amount of information with or without subpoenas or warrants. The Program is intended to disrupt actual or potential terrorist attacks that could be instigated by known or unknown criminals. The government has setup a massive collaboration effort with major telecommunication companies to gather information that would usually not be subject to surveillance. The telecommunication service providers have given access to the NSA to install surveillance equipment (e.g., “fiber-optic splitter”) which makes an exact copy of the data that’s passing through their systems and sends it to the government. Also, other special equipment such as the “Narus Semantic Traffic Analyzer” has been installed on the telecommunication systems to conduct deep packet inspections. These analyzers are capable of assessing and sifting through large data segments (e.g., 10 gigabits) and internet traffic.

These pervasive surveillance programs were authorized by President Bush after September 11, 2001. There is real time access to internet traffic and telephone records that was not previously available for previous surveillance programs. Also, the electronic information is being gathered in real time and stored on secure databases.

The governments of many countries have initiated surveillance programs to protect national security. These programs were allegedly designed and instigated to fight against terrorism and other criminal activities. For example, the British Government has setup a similar program to the United States government’s PRISM  program which is called TEMPORA. The GCHQ, which stands for Government Communications Headquarters, is the British government’s spy agency that operates similar to the United States National Security Agency (“NSA”). There is information that confirms the GCHQ has placed data interceptors on fiber optic cables to analyze internet communications. There is also information that confirms approximately 10 gigabits of data per second (or 21 petabytes of data per day) is being reviewed per day by this spy agency. Its agents are charged with the task of storing all sorts of information – e.g., electronic information with correlating metadata – on computer servers for as long as thirty days. This spy agency uses a technique called Massive Volume Reduction (“MVR”) to conduct its analysis.

Government spy agencies share their intelligence with other nation’s agencies as part of a partnership program. In fact, several years ago, The Guardian publicized this massive information gathering after it was reported by Edward Snowden. It seems the GCHQ is operating under two principles: (1) Mastering the Internet; and (2) Global Telecoms Exploitation. These surveillance programs are meant to gather as much information as possible for evaluation and assessment. However, it seems these principles have not been opened up for public debate and are being carried out without warrants.

The government spy agencies are gathering phone records, email message content, social media communications, and other types of information in an effort to curtail criminal violations. Their targets may include the unsuspecting innocent and suspicious or guilty individuals. Therefore, there are two schools of thought here. First, the spy agencies should carry out their intelligence gathering to prevent another international tragedy such as 9/11. Second, the spy agencies should be subject to certain limitations and should be forced to obtain lawful warrants before conducting surveillance. On the other side, the government officials argue that this type of unprecedented wiretapping is necessary to properly safeguard the country from terrorists.

The United States government has implemented surveillance programs to promote national security. These programs are designed to gather and process electronic information that could arguably assist government agencies in their efforts to enhance national security. However, there is an argument being made that the federal government is using the resources of major communication service providers to obtain records of citizens without legal justification. In other words, the government is engaging in unlawful surveillance programs without probable cause.

What kind of programs have been implemented?

The National Security Agency (“NSA”) has been intercepting internet communications for several years without fully disclosing the nature and extent of its surveillance programs to the general public. It’s also collecting other types of communication records such as phone records and related electronic information. There is evidence that proves AT&T is cooperating with government surveillance programs. The evidence seems to indicate the telecommunication giant has installed fiberoptic splitters to copy and send information to the government. Experts have argued this kind of activity is beyond “wiretapping” since it’s surveilling the entire communication channels without a warrant. So, in essence, the government is engaging in the mass collection of telephone metadata of all domestic customers. The government officials have argued that this type of broad surveillance is justified under the USA Patriot Act which is meant to deter and punish terrorism and enhance law enforcement investigations for the following reasons:

Cybersecurity and privacy rules have changed the private and public sectors’ landscapes. The state and federal rules are changing the ways private and public organizations are managing their operations. These rules are focusing on privacy, security and regulations in all jurisdictions but uniformity is an issue. Therefore, state and federal legislators should ensure uniformity to avoid regulatory and enforcement contradictions.

The State of California has enacted laws to promote cybersecurity within its jurisdiction. For example, Assembly Bill 89 (“AB 89”) was enacted to ensure information sharing should be conducted in a way that protects an individual’s privacy and civil liberties, confidential information, preserves business confidentiality, and enables public officials to detect, investigate, and prevent network security breaches. It has also enacted the California Consumer Privacy Act (“CCPA”) that allows individuals to file a legal action against businesses that fail to implement and maintain reasonable security measures to protect their personal information. Now, “reasonable security measures” may include using a firewall, encryption, and intrusion detection software on their computer networks.

The State of New York has enacted laws to promote cybersecurity within its jurisdiction. For example, it has passed the Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”) to protect consumers from exposure of private information from cybersecurity attacks. This statute is designed to increase data protection and data breach notification requirements for commercial enterprises. It is meant to hold business organizations responsible for gathering and storing consumer personal information which may include a name, address, telephone number, email address, date-of-birth, and social security number.

International e-commerce laws have been evolving since the inception of the information technology age. International e-commerce transactions which take place over the vast network of computers have become more streamlined with the advancement of technology. The following topics will be evaluated and addressed in these series of articles: Intellectual properties, taxes, and alternative dispute resolution.

Intellectual property rights can be protected by registering trademarks, copyrights or patents with governmental agencies. For example, the United States Patent and Trademark Office (“USPTO”) registers patents and trademarks. The United States Copyright Office registers copyrights. However, trade secrets cannot be registered with any government agencies. The trade secret owner is responsible to protect it by taking precautionary steps. International e-commerce and business law attorneys should recommend the following steps to their clients: (1) locate, identify, and mark the trade secrets; (2) restrict access to the trade secrets; (3) sign non-disclosure agreements with the trade secret holders; and (4) restrict access to the trade secrets. The Uniform Trade Secrets Act (“UTSA”) defines a trade secret as information that derives independent economic value because it is not generally known or readily ascertainable and is the subject of efforts to maintain secrecy. It includes formulas, patterns, compilations, programs, devices, methods, techniques, or processes that yield economic value – e.g., customer lists.

International e-commerce transactions will be taxed by the appropriate government agencies. In 2018, the United States Supreme Court addressed this issue in South Dakota v. Wayfair and acknowledged the states are losing revenue due to their incapability to collect sales tax from out-of-state retailers. Thus far, the Internet Tax Freedom Act (“ITFA”) and Streamlined Sales Tax Project have been implemented to prevent new taxes on e-commerce transactions and to simplify sales and use taxes.

International e-commerce laws pertain to online commercial transactions that takes place for the purchase or sale of goods and services.  Electronic contracts are used for the purchase or sale of software through shrink-wrap, click-wrap, and browse-wrap agreements. In general, these electronic transactions have a correlation to taxes, duties, and custom laws. In addition, the topic of intellectual property must be addressed to protect confidential information such as trademarks, copyrights, patents, and trade secrets.

There are six principles that apply to electronic agreements. First, the users should have automatic access to the agreement’s terms. Second, the contractual terms should comply with the applicable laws in relation to form, content, notice, and disclosure. Third, the users should be given the opportunity to take some form of affirmative action to consummate the transaction. Fourth, users should be given the opportunity to reject the agreement. Fifth, the agreement process should provide the user to detect and correct errors. Sixth, users should be able to print the agreement and software developers should provide a method to preserve the electronic records.

It is important for e-businesses to comply with the guidelines. For example, e-businesses should use fair advertising and marketing strategies for the online transactions. They should provide correct and accessible information about their company and its goods and services. They should fully disclose information regarding the transaction’s terms and conditions. They should provide a secure method for online payments. They should protect the customer’s privacy during the e-commerce transactions.

The Eliminating Abuse and Rampant Neglect of Interactive Technology (“EARN IT”) Act is a proposed bill that is designed to permit government agencies scan online messages and prevent child sexual exploitations. It is meant to force websites remove child abuse images from their platforms. The advocates argue it is necessary to allow the government evaluate online communications for potential violations. They argue that websites should be held accountable for user violations. This law seems to be against encryption which is used to obscure content from the unintended recipient. Encryption technology has been used to protect online privacy by scrambling messages through special algorithms. It can only be deciphered by the intended recipient who has access to the private key. Encryption can be used to securely communicate on the internet but it can also be used for nefarious reasons. That said, the EARN IT Act does not use the term “encryption” in its provisions. The supporting legislators have claimed the proposed statute is not designed to outlaw encryption. Also, it would require websites to adhere to certain best practices that will be implemented by the Attorney General’s Office by selecting a group of law enforcement agents who would impose them.

The EARN IT Act could reduce the protections granted under Section 230 of the Communications Decency Act (“CDA”) which provides a certain level of immunity for online service providers. Now, the immunity is not absolute but it is not very far from it. It protects online service providers (a/k/a “interactive computer service providers”) from user violations. For example, if the user engages in conduct that constitutes invasion of privacy of another person, the website would be shielded from legal liability. So, the victim could not file a lawsuit against the website for the user’s violations. However, the following three exceptions apply: (1) federal criminal activity and obscene material; (2) intellectual property violations; and (3) sex trafficking. In fact, 47 U.S.C. § 230(e)(1) prohibits obscene material and sexual exploitation of children. Moreover, 47 U.S.C. § 223 prohibits the transmission of lewd, lascivious, filthy, or indecent messages to a person under the age of eighteen. The CDA prohibits online service providers from sexual exploitation of minors, sex trafficking, or promotion of prostitution in jurisdictions where it is illegal. In other words, interactive computer service providers cannot facilitate these activities on their platforms. In Reno v. ACLU, the Supreme Court evaluated the CDA and its relevant provisions. It found that the CDA criminalized protected speech – e.g., sexually explicit speech – and unprotected obscenity.

The EARN IT Act has been compared to the Fight Online Sex Trafficking Act (“FOSTA”) and Stop Enabling Sex Trafficking Act (“SESTA”) which were passed to fight against online sex trafficking by making websites criminally liable for user content. These federal statutes caused several websites, including, but not limited to, Craigslist and Backpage to remove pages or be completely shut down. So naturally, critics have argued that they promoted online speech censorship and prevented people who engaged in consensual sex work. Yet, if the proposed bill passes legislation, it could open the floodgates for lawsuits against technology companies.

Free speech and censorship laws have clashed for a very long time in this country. On one hand, we have the constitutional right to free speech. On the other hand, there are limitations that can be applied on a case-by-case basis. In short, speech can be censored if it includes obscenity, child pornography, or the incitement of imminent lawless action. The Supreme Court has faced a multitude of cases in these contexts. For example, in Schenck v. United States, the court ruled that freedom of speech does not include the right to incite actions that would harm others. In Roth v. United States, it held that it is unlawful to make or distribute obscene materials. In United States v. O’Brien, it held that it is unlawful to burn draft cards as an anti-war protest. In Hazelwood School District v. Kuhlmeier, it ruled that it is unlawful to permit students to print articles in a school newspaper over the objections of the school administration. In Bethel School District #43 v. Fraser, the court held that it is illegal for students to make obscene speech at a school-sponsored event. Furthermore, in Morse v. Frederick, it held that students cannot advocate illegal drug use at a school-sponsored event. The point is that even though there are a vast amount of constitutionally-protected rights, yet there are certain limitations.

How does the First Amendment apply to private social media platforms?

The First Amendment is designed to limit government agencies from encroaching upon its citizen’s rights. In recent years, private social media platforms – e.g., Facebook, Twitter, Instagram – have had discretion to limit, control, or censor online speech of their users. It is certainly arguable that the state and federal constitutions should also apply to private social media platforms because truth and falsity have always clashed with each other during the course of history. There are several schools of thought that analyze free speech rights based on the freedom of expression. First, one idea is that government should not change or alter the marketplace of ideas with censorship. Second, the other idea is that people should have the liberty to express themselves in society without reservation. So, if the social media platforms are granted censorship rights, then it would prevent liberty and growth. Now, more recently, in Packingham v. North Carolina, the Supreme Court acknowledged the fact that speech is taking place on social media platforms more than anywhere else. As such, the State Action Doctrine’s application should be reevaluated by the legislators.

This article has been prepared to discuss the legality of online gambling and the relevant rules and regulations. These laws affect individuals, businesses, startups, and entrepreneurs as they’ve recently expressed their interests in this topic. Therefore, we will discuss the relevant state and federal laws.

It’s important to note that in Murphy v. NCAA, the Supreme Court struck down the Professional and Amateur Sports Protection Act (“PASPA”) and granted the states the right to regulate sports gambling within their own jurisdictions. In general, placing an online wager is legal but it should not be placed on a website that is located in the United States. In other words, the gambling website and its owner must not reside or do business within the United States and its territories. So, for this reason, individuals may run into contradictory state laws which will be referenced here.

What are the state laws?

Both California and the federal government have enacted statutes that regulate arbitration agreements and awards. The Federal Arbitration Act (FAA) and California Arbitration Act (CAA) are similar in many aspects but they have differences that can sometimes lead to conflict. Other state and federal statutes can also conflict with the FAA. Under the Federal Preemption Doctrine, provisions of state law that directly conflict with a federal statute are invalid or unenforceable. The U.S. Supreme Court has issued several rulings in recent years about preemption of state laws, and even other federal laws, by the FAA. The Supreme Court has also identified situations in which the CAA can apply instead of the FAA.

Federal Preemption Doctrine

The Supremacy Clause, found in Article VI, clause 2 of the U.S. Constitution, states that federal law is “the supreme Law of the Land.” The preemption doctrine is intended to guide courts in determining when federal law supersedes state law. In a 2009 decision, Wyeth v. Levine, the Supreme Court expressed its “assumption” that preemption would not occur “unless that was the clear and manifest purpose of Congress.” Whether the court has always strictly held to this principle is a matter of some disagreement.

The U.S. Supreme Court Finds Preemption by the FAA

In 2017, the Supreme Court decided Kindred Nursing Centers Ltd. v. Clark, which involved a challenge to mandatory arbitration clauses signed by individuals with powers of attorney on behalf of elderly nursing home residents in Kentucky. Under Kentucky law, according to the Supreme Court, “the rights of access to the courts and trial by jury [is considered] to be ‘sacred’ and ‘inviolate.’” State courts ruled the arbitration agreements to be invalid. The Supreme Court found the state court rulings to be invalid under § 2 of the FAA, which states that arbitration agreements are only subject to challenge under “such grounds as exist at law or in equity for the revocation of any contract.”
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