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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE:

NATIONAL SECURITY AGENCY

TELECOMMUNICATIONS RECORDS

LITIGATION

This Document Relates To:

07-1187, 07-1242, 07-1323, 

07-1324, 07-1326, 07-1396

 /

MDL Docket No 06-1791 VRW

ORDER

The government seeks to enjoin state officials in

Missouri, Maine, New Jersey, Connecticut and Vermont from

investigating various telecommunication carriers concerning their

alleged disclosure of customer telephone records to the National

Security Agency (NSA) based on the Supremacy Clause of the United

States Constitution, the foreign affairs power of the federal

government and the state secrets privilege. 

Before these cases were transferred to this court by the

Judicial Panel on Multidistrict Litigation (JPML) on February 15,

2007, the government and various defendants filed cross motions for

dismissal and summary judgment. With the exception of reply briefs

in the Connecticut and Vermont cases, these motions were fully

briefed prior to transfer. The court’s scheduling order directed

the parties to complete briefing in the Connecticut and Vermont

cases and permitted the government and state officials to submit

consolidated briefs addressing Ninth Circuit law and other issues

not previously briefed. Doc #219. 

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The government seeks summary judgment on the ground that

the states’ investigations are barred by the Supremacy Clause and

the foreign affairs power of the federal government and because of

the state secrets privilege. As will presently be explained, the

first two grounds of the government’s motion fail. Due to the

pending appeal in Hepting v AT&T, the court will not at this time

reach the third basis of the government’s motion, the state secrets

privilege. The result then is that the government’s summary

judgment motion is DENIED WITHOUT PREJUDICE to its renewal

following the Ninth Circuit’s decision in Hepting. Hence, the

state officials’ motions are rendered moot at this point. What

follows will explain why the first grounds upon which the

government seeks to proceed do not stand up. 

I

On February 15, 2007, the JPML transferred six cases (the

“state cases”) pursuant to MDL 1791: United States v Rabner, et al,

07-1324; United States v Gaw, et al, 07-1242; United States v

Adams, et al, 07-1323; United States v Palermino, et al, 07-1326;

United States v Volz, et al, 07-1396; and Clayton, et al v AT&T

Communications of the Southwest, Inc, et al, 07-1187. Doc #165. 

The state cases arise out of attempts by state officials to compel

various telecommunication carriers to release information

concerning their alleged disclosure of customer telephone records

to the National Security Agency (NSA). Before addressing the

present motions, the court provides a brief summary of the factual

background of each of the cases.

//

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Clayton v AT&T, 07-1187, arises out of investigative

subpoenas issued to AT&T by two commissioners of the Missouri

Public Service Commission (MoPSC) regarding information it

allegedly disclosed to the NSA. Doc #1, Ex A. These subpoenas

seek, for example, 

(1) Any order, subpoena or directive of any court,

tribunal or administrative agency or office

whatsoever, directing or demanding the release of

customer proprietary information relating to

Missouri customers; 

(2) The number of Missouri customers, if any, whose

calling records have been delivered or otherwise

disclosed to the [NSA]; and 

(3) The nature or type of information disclosed to the

NSA, including telephone number, subscriber name

and address, social security numbers, calling

patterns, calling history, billing information,

credit card information, internet data and the

like.

Doc #299, Ex A, tab 3.

Because the commissioners considered AT&T’s response to

be inadequate, they moved pursuant to Missouri law to compel AT&T

to comply with the investigation in Missouri state court. AT&T

then removed the case to the United States District Court for the

Western District of Missouri. Shortly thereafter, the government

initiated a separate Missouri action, United States v Gaw, 07-1242,

on July 26, 2006, seeking declaratory and injunctive relief against

the MoPSC and AT&T. 

The Maine case, United States v Adams, 07-1323, began

after Maine citizens petitioned the Maine Public Utilities

Commission (MePUC) to investigate whether Verizon had shared its

customers’ records with the NSA. Verizon submitted two press

releases in response on May 12 and May 16, 2006, stating that (1)

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the NSA never requested customer records and (2) if a government

agency requested its customer records, Verizon would disclose them

only when authorized by law. Doc #1, ¶ 40. On August 9, 2006,

MePUC ordered Verizon to affirm under oath that its press releases

were accurate. Id, ¶¶ 41-42; Doc #299, Ex A, tab 5. MePUC has not

asked for any additional information from Verizon. See Doc #299,

Ex A, tab 5. On August 21, 2006, the government sued in the United

States District Court for the District of Maine to enjoin the MePUC

from pursuing this inquiry. On February 8, 2007, Judge Woodcock

preliminarily enjoined MePUC from enforcing the order. See United

States v Adams, 473 F Supp 2d 108 (D Me 2007).

The New Jersey case, United States v Rabner, 07-1324,

stems from the New Jersey Attorney General’s investigation into

whether telecommunication carriers disclosed to the NSA telephone

call history data of New Jersey subscribers. Doc #1, ¶34. The New

Jersey Attorney General issued subpoenas duces tecum pursuant to

New Jersey consumer protection law to ten carriers doing business

in New Jersey. These subpoenas include the following requests: 

(1) All orders, subpoenas and warrants issued by or on

behalf of any unit or officer of the Executive

Branch of the Federal Government and provided to

[the carriers] concerning any demand or request to

provide telephone call history data to the NSA;

(2) All documents concerning an identification of

customers * * * whose telephone call history data

was provided * * * to the NSA; of the persons whose

data was provided to the NSA; and 

(3) All documents concerning any communication between

[the carriers] and the NSA * * * concerning the

provision of telephone call history data to the

NSA. 

Doc #299, Ex A, tab 1. In response to these subpoenas, the

government sued the New Jersey Attorney General in the United

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States District Court for the District of New Jersey. Doc #1-1. 

United States v Palermino, 07-1324, arises from a

complaint filed by the American Civil Liberties Union of

Connecticut (ACLU) requesting that the Connecticut Department of

Public Utility Control (CtDPUC) investigate whether the local

carriers violated Connecticut law. In response, the CtDPUC

initiated an administrative proceeding and pursued the requested

investigation. After the CtDPUC denied the carriers’ motions to

dismiss, ACLU filed its first set of interrogatories to each of the

carriers, seeking information concerning potential illegal

disclosure of customer records, such as the following:

(1) Did AT&T have any published privacy policy or

policies concerning customer information and/or

records in effect between September 11, 2001, and

August 10, 2006?

(2) To the extent that any published privacy policy

referenced in your response [above] changed during

the relevant period, explain the specific terms

that changed, when the changes occurred, and the

reasons for the change.

(3) Without providing any details about the purpose(s)

or target(s) of any investigation(s) or

operations(s), at any time during the relevant

period has AT&T ever received [a court order or a

request under 18 USC § 2709, I e, a “national

security letter”] seeking disclosure of customer

information and/or records?

Doc #299, Ex A, tab 4. On September 6, 2006, the government sued

in the United States District Court for the District of

Connecticut.

In United States v Volz, 07-1396, the commissioner of the

Vermont Department of Public Service (VtDPS) propounded information

requests under Vermont law, 30 VSA § 206, to AT&T and Verizon

concerning their conduct and policies vis-à-vis the NSA. 07-1396,

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Doc #1, Ex C. After AT&T and Verizon failed to comply with the

request, VtDPS petitioned the Vermont Public Service Board (VtPSB)

to open investigations of the carriers, Id, ¶¶ 33-34, and

eventually ordered the carriers to respond. Id, ¶ 37 & Ex I. This

prompted the government to bring suit to enjoin VtPSB in the

District Court of Vermont. 

The parties’ cross motions for summary judgment concern

three issues: whether the state officials’ investigations (1)

violate the Supremacy Clause by regulating directly or

discriminating against the federal government or conflicting with

an affirmative command of Congress; (2) impinge on the foreign

affairs power of the federal government; or (3) run afoul of the

state secrets privilege. 

In reviewing a summary judgment motion, the court must

determine whether genuine issues of material fact exist, resolving

any doubt in favor of the party opposing the motion. “[S]ummary

judgment will not lie if the dispute about a material fact is

‘genuine,’ that is, if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Anderson v

Liberty Lobby, Inc, 477 US 242, 248 (1986). “Only disputes over

facts that might affect the outcome of the suit under the governing

law will properly preclude the entry of summary judgment.” Id. 

And the burden of establishing the absence of a genuine issue of

material fact lies with the moving party. Celotex Corp v Catrett,

477 US 317, 322-23 (1986). When the moving party has the burden of

proof on an issue, the party’s showing must be sufficient for the

court to hold that no reasonable trier of fact could find other

than for the moving party. Calderone v United States, 799 F2d 254,

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258-59 (6th Cir 1986). Summary judgment is granted only if the

moving party is entitled to judgment as a matter of law. FRCP 56©.

The nonmoving party may not simply rely on the pleadings,

however, but must produce significant probative evidence supporting

its claim that a genuine issue of material fact exists. TW Elec

Serv v Pacific Electrical Contractors Ass’n, 809 F2d 626, 630 (9th

Cir 1987). The evidence presented by the nonmoving party “is to be

believed, and all justifiable inferences are to be drawn in his

favor.” Anderson, 477 US at 255. “[T]he judge’s function is not

himself to weigh the evidence and determine the truth of the matter

but to determine whether there is a genuine issue for trial.” Id

at 249.

II

The court takes up jurisdictional issues first. 

In these suits, the government seeks both declaratory and

injunctive relief, including: (1) a declaration that state

investigations are invalid under and preemted by the Supremacy

Clause; and (2) an order enjoining the state officials from

investigating the carriers relating to their alleged disclosure of

records to the NSA. These pleadings suffice to confer federal

question jurisdiction under 28 USC §§ 1331 and 1345.

It is well-established that the federal courts have

jurisdiction under 28 USC § 1331 over a preemption claim seeking

injunctive and declaratory relief. See, e g, Verizon Md, Inc v Pub

Serv Comm’n of Md, 535 US 635, 641-43 (2002). In Shaw v Delta Air

Lines, Inc, 463 US 85, 96 & n14 (1983), the Supreme Court held:

//

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A plaintiff who seeks injunctive relief from state

regulation, on the ground that such regulation is

preempted by a federal statute which, by virtue of

the Supremacy Clause of the Constitution, must

prevail, thus presents a federal question which the

federal courts have jurisdiction under 28 USC §

1331 to resolve.

See also Bud Antle, Inc v Barbosa, 45 F3d 1261, 1362 (9th Cir 1994)

(“Even in the absence of an explicit statutory provision

establishing a cause of action, a private party may ordinarily seek

declaratory and injunctive relief against state action on the basis

of federal preemption.”); United States v Morros, 268 F3d 695, 702-

03 (9th Cir 2001), citing Bell v Hood, 327 US 678, 681-82 (1946)

(conferring federal question jurisdiction for claims by government

that seek relief “directly under the Constitution or laws of the

United States” in challenging the actions of state officials under

the Supremacy Clause); Richard H Fallon, et al, Hart and Wechler’s

The Federal Courts and the Federal System 903 (5th ed 2003). 

An alternative ground for federal question jurisdiction

is furnished by 28 USC § 1345, which “provides the district courts

with original jurisdiction of all civil actions commenced by the

United States,” thereby creating “independent subject matter

jurisdiction.” Morros, 268 F3d at 702-03. Accordingly, the court

finds that jurisdiction lies in federal court under 28 USC §§ 1331

and 1345.

 A second hurdle to reaching the merits in these cases is

that the government lacks an express cause of action. The

government describes three means of remedying this omission, one of

which the court can easily dispense with. The government errs in

arguing that the existence of jurisdiction itself gives rise to a

cause of action. It is firmly established by the Supreme Court

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that the vesting of jurisdiction does not in and of itself give

rise to a cause of action. Texas Industries, Inc v Radcliff

Materials, Inc, 451 US 630, 640-41 (1981). Nor do the statutes

relied on for jurisdiction create substantive causes of action. 

Hence, to secure a cause of action for these suits, the government

must look elsewhere. 

One option for establishing a cause of action lies with

an obscure line of cases culminating in In re Debs, 158 US 564

(1895), which permit the government to sue to vindicate its

sovereign interests even when not authorized by statute. See also

Dugan v United States, 16 US 172 (1818); United States v Tingey, 30

US 115 (1831); Cotton v United States, 52 US 229 (1851); Jessup v

United States, 106 US 147 (1882). Debs involved an attempt by the

federal government to enjoin the Pullman labor strike of 1894. 158

US at 577. The Court upheld the propriety of the injunction,

proclaiming that

[e]very government, entrusted, by the very terms of

its being, with powers and duties to be exercised

and discharged for the general welfare, has a right

to apply to its own courts for any proper assistance

in the exercise of the one and the discharge of the

other * * *.

In spite of the Court’s high-flying rhetoric, the Debs doctrine has

seldom been invoked in the century-plus since its inception. 

“[R]elatively little has been made of this broad authorization to

sue because in most instances, the federal government has sued

pursuant to federal statutes and not based on its inherent interest

in protecting its citizens.” Erwin Chemerinksy, Federal

Jurisdiction, § 2.3 (Aspen 2003). 

//

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The contours of the doctrine enunciated in Debs remain

unclear, not least due to the vague guidance offered by the Debs

Court.

[I]t is not the province of the government to

interfere in any mere matter of private controversy

between individuals, or to use its great powers to

enforce the rights of one against another, yet,

whenever the wrongs complained of are such as affect

the public at large, and are in respect of matters

which by the Constitution are entrusted to the care

of the Nation, and concerning which the Nation owes

the duty to all the citizens of securing to them

their common rights, then the mere fact that the

government has no pecuniary interest in the

controversy is not sufficient to exclude it from the

courts, or prevent it from taking measures therein

to fully discharge those constitutional duties. Debs, 158 US at 586.

Under its most expansive reading, Debs authorizes the

government to sue without statutory authorization whenever the

alleged violations “affect the public at large.” 158 US at 586. 

Such a broad mandate has led the government to invoke Debs in

varied circumstances, including in suits to enforce immunity of the

armed forces from certain state taxes, see United States v

Arlington County, 326 F2d 929 (4th Cir 1964), to enforce civil

rights under the Commerce Clause, see United States v Jackson, 318

F2d 1 (5th Cir 1963), and to enjoin sellers from obtaining default

judgments without proper service of process, see United States v

Brand Jewelers, Inc, 318 F Supp 1293 (SDNY 1970). Most relevant

here, the government has succeeded in invoking this doctrine in

disputes over interference with national security. United States v

Marchetti, 466 F2d 1309 (4th Cir 1972) (protection of contractual

rights in addition to national security interest). See also United

States v Mattson, 600 F2d 1295, 1298 (9th Cir 1979) (“Where

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interference with national security has been at issue, courts have

also relied on the doctrine to reach the merits of the

controversy.”)

The state officials draw the court’s attention to Justice

Black’s concurring opinion in New York Times Co v United States,

403 US 713, 718 (1971), which gives reason for restraint in

applying Debs. Justice Black cautioned that invocation of Debs

invites the government — that is, the executive branch — to exceed

its constitutional grant to ensure that the laws are faithfully

executed. 

It would, however, be utterly inconsistent with the

concept of separation of powers for this Court to

use its power of contempt to prevent behavior that

Congress has specifically declined to prohibit. * *

* The Constitution provides that Congress shall make

laws, the President execute laws, and courts

interpret laws. It did not provide for government

by injunction in which the courts and the Executive

branch can ‘make laws’ without regard to the action

of Congress. It may be more convenient for the

Executive Branch if it need only convince a judge to

prohibit conduct rather than ask the Congress to

pass a law, and it may be more convenient to enforce

a contempt order than to seek a criminal conviction

in a jury trial. Moreover, it may be considered

politically wise to get a court to share the

responsibility for arresting those who the Executive

Branch has probable cause to believe are violating

the law. But convenience and political

considerations of the moment do not justify a basic

departure from the principles of our system of

government. 

403 US 713, 718 (1971) (citations omitted). 

In view of these separation of powers concerns, the court

agrees with the state officials that mere incantation of “sovereign

interests” does not suffice under Debs to generate a cause of

action. But even a narrow construction of Debs cannot prevent the

doctrine’s application here. Although the state officials insist

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on casting these investigations as garden variety

telecommunications regulation, it cannot be gainsaid that the

officials’ efforts bear particularly on the government’s national

security interests. Whatever the boundaries of the Debs, the court

is confident that these suits fall well within its borders. See

Mattson, 600 F2d at 1298 (“Where interference with national

security has been at issue, courts have also relied on the doctrine

to reach the merits of the controversy.”). Debs is thus properly

invoked by the government in these cases. 

As an alternative to relying on Debs, the government

asserts that the Supremacy Clause of the Constitution creates an

implied right of action to enjoin state regulations that are

preempted by a federal statutory or constitutional provision. The

Supreme Court implicitly supported such a right in Pharmaceutical

Research and Manufacturers of America v Walsh, 538 US 644 (2003). 

Plaintiffs in that case argued – without a cause of action – that a

state regulation was preempted by Medicaid, a federal Spending

Clause statute. Only two Justices declined to reach the merits of

plaintiff’s claim for reason that no claim was stated. The

remaining Justices — a plurality of four and three in dissent —

proceeded to the merits without pause, tacitly deciding that an

implied claim was stated for preemption. 

The DC Circuit relied on Walsh in rejecting a state

agency’s contention that plaintiffs “have no private right of

action for injunctive relief against the state” based on the

preemptive force of a federal statute. Pharmaceutical Research and

Manufacturers of America v Thompson, 362 F3d 819 (DC Cir 2004). 

“By addressing the merits of the parties’ arguments without mention

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of any jurisdictional flaw,” the court explained, “seven Justices

appear to have sub silentio found no flaw.” 362 F3d at 819 n3. See

also Planned Parenthood v Sanchez, 403 F3d 324 (5th Cir 2005).

The court concurs with the DC Circuit’s reasoning. By

entertaining federal preemption suits, see e g, Walsh, 538 US 644, 

Verizon Maryland, Inc, 535 US 635 (2002), the Supreme Court has

cleared the path for parties to seek declaratory and injunctive

relief against state action on the basis of federal preemption

alone. This implied cause of action, in conjunction with the

proper invocation of Debs, provides two grounds for the government

to proceed in these cases. 

Even if the government has jurisdiction and a cause of

action, several state officials urge this court to abstain from

exercising jurisdiction over these suits pursuant to the Younger v

Harris, 401 US 37 27 (1971), line of cases, which hold that

principles of comity and federalism require federal courts to

abstain from enjoining pending state proceedings. See also Ohio

Civil Rights Comm’n v Dayton Christian Schools, Inc, 477 US 619,

627 (1986) (extending the Younger doctrine to certain state

administrative proceedings, so long as those proceedings are

“judicial in nature”).

In the Ninth Circuit, however, the federal government 

may bypass the Younger hurdle when it acts as a litigant. See

United States v Morros, 268 F3d 695 (9th Cir 2001). According to

the Morros court, if the federal government seeks relief against a

state or its officers, it makes little sense to hew to the

principles of comity and federalism that animate Younger because

“the state and federal governments are in direct conflict before

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they arrive at the federal courthouse,” rendering futile “any

attempt to avoid a federal-state conflict.” Id (citing United

States v Composite State Bd of Medical Examiners, 656 F2d 131, 136

(5th Cir 1981). The Ninth Circuit’s reasoning in Morros

undoubtedly applies here. The possibility of avoiding “unnecessary

conflict between state and federal governments,” Composite State,

656 F2d at 136, faded long before these cases arrived to this

court. Because such a conflict inheres in these cases, Younger

abstention is inapplicable.

The court finally turns to the argument advanced in three

of these cases that no case or controversy exists because the state

officials have not attempted to enforce its statutes and

regulations against the carriers. Ripeness is one of the four

justiciability doctrines that stem from the Article III limitation

of the federal judicial power to cases or controversies. 

Accordingly, “whether a claim is ripe for adjudication goes to a

court’s subject matter jurisdiction * * *.” St Clair v City of

Chico, 880 F2d 199, 201 (9th Cir 1989), quoted in Schwarzer et al,

Federal Civil Procedure Before Trial § 2:178 (1997). The standard

to be applied in determining if there is a case or controversy ripe

for resolution is whether there is “a reasonable threat of

prosecution for conduct allegedly protected by the Constitution.” 

Ohio Civil Rights Comm’n v Dayton Christian Schools, 477 US 619,

626 n1 (1986). 

Because the state officials have made plain their

intention to subject the carriers to investigation, the court

agrees with the government that the carriers face a reasonable

threat of prosecution and thus there is before the court a ripe

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case or controversy. Cf Public Utilities Comm'n v United States,

355 US 534, 538 (1958) (allowing preenforcement review of a state

regulation that required common carriers to receive state

pre-approval before offering reduced shipping rates to the United

States where the state had “plainly indicated an intent to enforce

the Act”); see also Mobil Oil Corp v Virginia, 940 F2d 73, 76 (4th

Cir 1991) (allowing preenforcement review of amendments to the

Virginia Petroleum Products Franchise Act, which an oil company

claimed were preempted, even though Virginia had not specifically

indicated that it intended to enforce that statute against

plaintiffs, because the Virginia “Attorney General [had] not * * *

disclaimed any intention of exercising her enforcement authority").

III

Turning to the merits, these cases concern whether the

state laws underlying the investigations run afoul of the Supremacy

Clause, the federal foreign affairs power or state secrets

privilege. State law may violate the Supremacy Clause in two ways: 

the law may regulate directly or discriminate against the

government, see McCulloch v Maryland, 4 Wheat 316, 425-437 (1819),

or the law may conflict with an affirmative command of Congress,

see Gibbons v Ogden, 9 Wheat 1, 211 (1824); see also Hillsborough

County v Automated Medical Laboratories, Inc, 471 US 707, 712-713

(1985). The government’s attack on the investigations relies on

both grounds of invalidity.

//

//

//

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A

It is a fundamental principle of our law “that the

constitution and the laws made in pursuance thereof are supreme;

that they control the constitution and laws of the respective

States, and cannot be controlled by them.” McCulloch v Maryland, 4

Wheat 316, 426 (1819). From this principle is derived the

corollary that “the activities of the Federal Government are free

from regulation by any state.” Hancock v Train, 426 US 167, 178

(1976). As Justice Holmes observed in Johnson v Maryland, 254 US

51, 57 (1920):

[T]he immunity of the instruments of the United

States from state control in the performance of

their duties extends to a requirement that they 

desist from performance until they satisfy a state

officer upon examination that they are competent

for a necessary part of them.

The doctrine that embodies these principles – termed

intergovernmental immunity — prevents state laws from regulating

directly or discriminating against the federal government. 

The Supreme Court’s modern-day treatment of the

intergovernmental immunity doctrine has been marked by restraint,

making plain the doctrine has no application here. Although the

pertinent state disclosure orders, Doc #299, Ex A, relate to

federal government activities, they do not regulate the government

directly; indeed, they impose no duty on the government. See

United States v New Mexico, 455 US 720 (1982). The Court upheld

analogous regulations in North Dakota v United States, 495 US 423,

437 (1990), which involved laws requiring out-of-state shippers of

alcohol to file monthly reports and to affix a label to each bottle

of liquor sold to federal military enclaves. Id at 426. The Court

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reasoned that because the laws operated on suppliers, not the

government, “[t]here is no claim * * *, nor could there be, that

North Dakota regulates the Federal Government directly.” Id at

436-37. That conclusion leaves no doubt that the state

investigations operate on the carriers alone. 

Nor can it be said that the investigations “discriminate

against the federal government or those with whom it deals.” North

Dakota v United States, 495 US 423, 437 (1990). The

nondiscrimination rule prevents states from meddling with federal

government activities indirectly by singling out for regulation

those who deal with the government. This rule does not, however,

oblige special treatment. A “[s]tate does not discriminate against

the Federal Government and those with whom it deals unless it

treats someone else better than it treats them.” Washington v

United States, 460 US 536, 544-45 n10 (1983). Applying these

principles, the Court has required that regulations be imposed

equally on all similarly situated constituents of a state and not

based on a constituent’s status as a government contractor or

supplier. See United States v County of Fresno, 429 US 452,

462-464 (1977). 

The nondiscrimination analysis should not “look to the

most narrow provision addressing the Government or those with whom

it deals. A state provision that appears to treat the Government

differently on the most specific level of analysis may, in its

broader regulatory context, not be discriminatory.” North Dakota,

495 US at 438. The asserted laws at issue here regulate equally

all public utilities, making no distinction based on the

government’s involvement. Although the present investigation, in

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targeting alleged disclosure of call records to the NSA, may

“appear[] to treat the government differently,” the regulatory

regime as whole treats any unauthorized disclosure the same. These

neutral state laws regulating the carriers “are but normal

incidents of the organization within the same territory of two

governments.” North Dakota, 495 US at 435, citing Helvering v

Gerhardt, 304 US 405, 422 (1938).

The government presents an impressive patchwork of dicta

in support of its theory, but none of the cases it cites pertains

to the present facts. Hancock v Train, 426 US 167, 174 (1976), for

example, concerns a state attorney general’s efforts to require the

United States Army, the Tennessee Valley Authority and the Atomic

Energy Commission to obtain state air pollution permits for

facilities on federal installations. The Hancock Court found

decisive the fact that the regulations “place[d] a prohibition on

the federal government” — a feature absent here. Both Mayo v

United States, 319 US 441, 447 (1943), and City of Los Angeles v

United States, 355 F Supp 461, 464 (CF Cal 1972), prove equally

unavailing for the government. In both cases, plaintiffs sought to

exact fees directly from a government entity. Again, no equivalent

interplay between the public utilities and the federal government

exists here. 

In sum, because the investigations neither regulate

directly nor discriminate against the federal government, the

investigations do not violate the doctrine of intergovernmental

immunity.

//

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B

The court turns to the government’s preemption argument.

By virtue of the Supremacy Clause, it is a “fundamental principle

of the Constitution * * * that Congress has the power to preempt

state law.” Crosby v Nat'l Foreign Trade Council, 530 US 363, 372

(2000) (citing US Const, Art VI, cl 2). The Supreme Court

cautions, however, that “despite the variety of these opportunities

for federal preeminence, we have never assumed lightly that

Congress has derogated state regulation, but instead have addressed

claims of preemption with the starting presumption that Congress

does not intend to supplant state law.” New York State Conference

of Blue Cross & Blue Shield Plans v Travelers Insurance Co, 514 US

645, 654 (1995). Accordingly, “the purpose of Congress is the

ultimate touchstone” of any preemption analysis. Cipollone v

Liggett Group, 505 US 504, 516 (1992) (citation omitted). 

State law must yield to federal law in three situations. 

First, state law may be preempted if Congress has expressly so

provided. Gade v National Solid Wastes Mgm’t Ass’n, 505 US 88

(1992). Second, under field preemption, “[i]f Congress evidences

an intent to occupy a given field, any state law falling within

that field is preempted.” Silkwood v Kerr-McGee Corp, 464 US 238,

248 (1984) (citing Fidelity Federal Savings & Loan Ass’n v de la

Cuesta, 458 US 141, 153 (1982)). Finally, under conflict

preemption, “[i]f Congress has not entirely displaced state

regulation over the matter in question, state law is still

preempted to the extent it actually conflicts with federal law,

that is, when it is impossible to comply with both state and

federal law * * * or where the state law stands as an obstacle to

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the accomplishment of the full purposes and objectives of

Congress.” Id (citing Florida Lime & Avocado Growers, Inc v Paul,

373 US 132, 142-43 (1963) and Hines v Davidowitz, 312 US 52, 67

(1941)). The government contends that express, field and conflict

preemption apply to the state investigations. 

1

State law is preempted insofar as Congress has expressly

stated its intent to supersede state law. Shaw v Delta Air Lines,

Inc, 463 US 85, 95-98 (1983). The task of statutory construction

of an expressed preemption clause “must in the first instance focus

on the plain wording of the clause, which necessarily contains the

best evidence of Congress’ preemptive intent.” CSX Transportation,

Inc v Easterwood, 507 US 658, 664 (1993). If Congress intends to

alter the usual constitutional balance between the states and the

federal government, it must make its intention to do so

unmistakably clear in the language of the statute. Rice v Santa Fe

Elevator Corp, 331 US 218, 230 (1947). The plain statement rule,

as applied to expressed preemption, “is nothing more than an

acknowledgment that the states retain substantial sovereign powers

under our constitutional scheme, powers with which Congress does

not readily interfere.” Gregory v Ashcroft, 501 US 452, 461. 

Little more than a paragraph in the briefing is devoted

to the contention that federal law — namely, the Stored

Communications Act (“SCA”), 18 USC § 2701 et seq — preempts

expressly the state laws at issue here. The SCA, which was enacted

as part of the Electronic Communications Privacy Act of 1986

(“ECPA”), Pub L No 99-508, 100 Stat 1848 (1986), regulates

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disclosure of non-content “record[s] or other information

pertaining to a subscriber.” 18 USC § 2702©. Relevant to the

issue of preemption, the SCA specifies that “[t]he remedies and

sanctions described in this chapter are the only judicial remedies

and sanctions for nonconstitutional violations of this chapter.” 

Id § 2708. 

As the court concluded in its order denying remand in

Riordan, 06-3574, and Campbell, 06-3596, section 2708 of the SCA

serves a limited purpose: to prevent criminal defendants from

suppressing evidence based on electronic communications or customer

records obtained in violation of ECPA’s provisions. Doc #130 at 6. 

The government gives no reason to revisit this issue. Accordingly,

the court concludes that federal law does not expressly preempt the

states laws at issue here.

2 

Even if a federal statute does not expressly preempt

state law, it may do so by implication. Field preemption is found

if the federal so thoroughly regulates a legislative field that

Congress intended it to be occupied exclusively by the federal

government. Freightliner Corp v Myrick, 514 US 280, 287 (1995). 

If a “scheme of federal regulation * * * [is] so pervasive as to

make reasonable the inference that Congress left no room for the

States to supplement it,” or if an Act of Congress “touches a field

in which the federal interest is so dominant that the federal

system will be assumed to preclude enforcement of state laws on the

same subject,” field preemption exists. English v General Electric

Co, 496 US 72, 79 (1990); Rice, 331 US at 230. Because Congress

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left room for state regulation of public utilities and their

consumers’ privacy, field preemption fails. 

As discussed in the court’s remand order, see Doc #130 at

7, the preemptive force of the Foreign Intelligence Surveillance

Act (“FISA”) is undercut by the statute’s language that

contemplates state court litigation concerning illegal

surveillance. For example, section 1806(f), in pertinent part,

provides procedures for consideration of the propriety of FISA

orders “[w]herever * * * any motion or request is made by an

aggrieved person pursuant to any other statute or rule of * * * any

state before any court or other authority of * * * any state to

discover or obtain applications or orders of other materials

relating to electronic surveillance * * * .” 50 USC 1806(f). The

statutory exemption in 1861(e) also implies the availability of

civil claims with respect to the production of records. It

provides that a “person who, in good faith, produces tangible

things under an order pursuant to this section shall not be liable

to any other person for such production.” 50 USC 1861(e). FISA

thus contemplates that, in the absence of a government order for

the business records under 50 USC 1861(a)(1), injured parties will

have causes of action and remedies under other provisions of state

and federal law. 

These provisions in FISA suggest that Congress did not

intend to foreclose state involvement in the area of surveillance

regulation. As such, it cannot be said that the scheme of federal

regulation here is “so pervasive as to make reasonable the

inference that Congress left no room for the States to supplement

it.” English, 496 US at 79.

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3

Finally, state action is preempted to the extent it

actually conflicts with federal statutes, regulations or the

Constitution. Barnett Bank of Marion County, NA v Nelson, 517 US

25, 31 (1996). Conflict preemption is found if it is “impossible

for a private party to comply with both state and federal

requirements” or if state law “stands as an obstacle to the

accomplishment and execution of the full purposes and objectives of

Congress.” Freightliner Corp v Myrick 514 US 280, 287 (1995);

Geier v American Honda Motor Co, 529 US 861, 873 (2000).

In support of conflict preemption, the government relies 

chiefly on two statutory privileges, first citing to section 6 of

the National Security Agency Act of 1959, 50 USC § 402 note 6,

which provides: 

[N]othing in this act or any other law * * * shall be

construed to require the disclosure of the organization

or any function of the National Security Agency, of any

information with respect to the activities thereof, or of

the names, titles, salaries, or number of persons

employed by such agency. 50 USC § 402, n6, sec 6(a)

(emphasis added). 

The government also relies on 50 USC § 403-1(i)(1), which states,

“[t]he Director of National Intelligence shall protect intelligence

sources and methods from unauthorized disclosure.” The overarching

issue is whether compliance with both federal and state regulations

is a physical impossibility or whether the state investigations

“stand[] as an obstacle to the accomplishment of the full purposes

and objectives of Congress.” Silkwood, 464 US at 248. For reasons

discussed below, the court finds that neither of these provisions

compels preemption.

//

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Compliance with both federal and state regulations is not

a physical impossibility, at least in view of “the circumstances of

[the] particular case.” Florida Lime & Avocado Growers, Inc v

Paul, 373 US 132, 142-43 (1963). “What is a sufficient obstacle is

a matter of judgment, to be informed by examining the federal

statute as a whole and identifying its purpose and intended

effects.” Crosby v National Foreign Trade Council, 530 US 363, 373

(2000) 

For when the question is whether a Federal act

overrides a state law, the entire scheme of the

statute must of course be considered and that which

needs must be implied is of no less force than that

which is expressed. If the purpose of the act

cannot otherwise be accomplished -- if its

operation within its chosen field else must be

frustrated and its provisions be refused their

natural effect -- the state law must yield to the

regulation of Congress within the sphere of its

delegated power. 

Crosby, 530 US at 373 (citing Savage v Jones, 225 US 501, 533

(1912).

Applying this standard, the court cannot conclude that

the state investigations will inevitably conflict with federal law. 

In Hepting, 06-672, the government argued that the information

covered by the section 6 statutory privilege is “at least coextensive with the assertion of the state secrets privilege by the

DNI.” 06-672, Doc #124 at 14. Insofar as section 6 proscribes

disclosure that would otherwise fall within the state secrets

privilege, no conflict exists, as the government may intervene and

assert the state secrets privilege in any of these proceedings. A

conflict may arise, however, to the extent the state officials seek

information covered by section 6 that lies outside the scope of the

state secrets privilege. The court doubts whether any of the these

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investigations would engender such a conflict, especially given the

government’s insistence that all information sought by the state

officials implicates the state secrets privilege. Regardless, it

would be inappropriate for the court to rule on the scope of this

possible conflict in the abstract. See Time Warner Entm’t Co, LP v

FCC, 56 F3d 151, 195 (DC Cir 1995) (“[W]hether a state regulation

unavoidably conflicts with national interests is an issue incapable

of resolution in the abstract.”).

Under the obstruction strand of conflict preemption,

state law is preempted to the extent it actually interferes with

the “methods by which the federal statute was designed to reach

[its] goal.” Int'l Paper Co v Ouellette, 479 US 481, 494 (1987);

Verizon North, Inc v Strand, 309 F3d 935, 940 (6th Cir 2002). In

making this determination, courts “consider the relationship

between state and federal laws as they are interpreted and applied,

not merely as they are written.” Jones v Rath Packing Co, 430 US

519, 526 (1977); Time Warner, 56 F3d at 195 (“[W]hether a state

regulation unavoidably conflicts with national interests is an

issue incapable of resolution in the abstract.”) (quoting Alascom,

Inc v FCC, 727 F2d 1212, 1220 (DC Cir 1984)). Hence, obstruction

preemption focuses on both the objective of the federal law and the

method chosen by Congress to effectuate that objective, taking into

account the law’s text, application, history and interpretation. 

To support obstruction, the government avers that any

litigation touching upon the statutory privileges must ipso facto

obstruct Congress’ purpose. But such a view misapprehends the

federal law’s purpose by ignoring the bulk of Congress’s activity

in this realm. For example, inquiry into activity not sanctioned

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by the Pen Register Act, 18 USC § 3121, or FISA, falls outside of

section 6's ambit. The Pen Register Act provides that “no person

may install or use a pen register or a trap and trace device

without first obtaining a court order under section 3123 of this

title [18 USCS § 3123] or under the [FISA].” 18 USC § 3121(a). 

Similarly, FISA requires an application under oath attesting to

eleven qualifying conditions, including the purpose of the

investigation, and the persons to be investigated, as well as that

the information likely to be obtained is foreign intelligence

information not concerning a “United States person.” 50 USC §

1804(a)(1) to (11). Both of these statutes counter the

government’s myopic view of federal law in this area. 

In further support of its conflict-preemption argument,

the government points to 18 USC § 798(a), a statute that makes it a

crime to divulge improperly any classified information “concerning

the communication intelligence activities of the United States.” 

18 USC § 798(a). Because the disclosure under the subpoenas is not

“authorized,” such disclosures may violate federal law. Yet the

term “classified information” for purposes of 18 USC 798(a) means

“information which, at the time of a violation of this section, is,

for reasons of national security, specifically designated by a

United States Government Agency for limited or restricted

dissemination or distribution.” 18 USC § 798(b). And the

government does not purport to have designated as classified the

records at issue here; indeed, it has not acknowledged that the

carriers even divulged records to the NSA. As such, no conflict

exists with 18 USC §798(a) until the government “specifically

designate[s]” the records pertinent to the cases at bar. Even if

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the pertinent records fall under 18 USC § 798(a), the

aforementioned statuary privileges — not to mention the state

secrets privilege — furnish the government with more than enough

protection against any conflict. 

Finally, the government contends that presidential

executive orders aimed at protecting national security information

conflict with the state investigations. Executive orders, in and

of themselves, do not preempt state law. Congress has the

exclusive power to make laws necessary and proper to carry out the

powers vested by the United States Constitution in the federal

government. Youngstown Sheet & Tube Co v Sawyer, 343 US 579

(1952). Only when executive orders are necessary as a means of

carrying out federal laws do they preempt state law. Cf Fidelity

Federal Sav & Loans Ass’n, 458 US at 154 (administrative

regulations may preempt state law when Congress has delegated that

rule-making power). 

Executive order 12,958 directs agencies to control

strictly the classified information in their possession and to

ensure that information is disclosed only when doing so is “clearly

consistent with the interests of national security.” 60 Fed Reg

19825. Similarly, executive order number 12,968 (60 Fed Reg 40245)

establishes a security program for access to information by nongovernment employees and 36 CFR § 1222.42(b) requires that when

“nonrecord material containing classified information is removed

from the executive branch, it is protected under conditions

equivalent to those required of executive branch agencies * * *.” 

The government attempted to explain why these orders are

necessary as a means of carrying out federal laws, as required for

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preemption, for the first time at oral argument. Without the

benefit of briefing, however, it remains uncertain whether these

executive orders amount to anything more than mere expressions of

executive will. But even supported by an act of Congress, these

orders cannot carry the day for the government. Again, no conflict

inheres because for any information sought in violation of these

orders the government may exercise its privileges, statutory or

otherwise. 

Accordingly, the government cannot show the requisite

conflict because, based on the present record, the investigations

do not require an act by the carriers that federal law or policy

deems unlawful. Nor do the investigations pose an obstacle to the

purposes and objectives of Congress. Should it occur that

information sought by the states implicates the aforementioned

executive orders but falls outside the state secrets privilege, the

court will entertain a renewed motion from the government based on

conflict preemption. 

C

Even if no federal activity preempts the state laws at

issue here, the state investigations are said to infringe on the

foreign affairs power of the federal government under Zschernig v

Miller, 389 US 429 (1968). The national government’s exclusive

authority to regulate the foreign affairs of the United States has

long been recognized as a constitutional principle of broad scope. 

See United States v Pink, 315 US 203, 233 (1942) (“Power over

external affairs is not shared by the States; it is vested in the

national government exclusively.”); Hines v Davidowitz, 312 US 52,

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63 (1941). “It follows that all state action, whether or not

consistent with current foreign policy, that distorts the

allocation of responsibility to the national government for the

conduct of American diplomacy is void as an unconstitutional

infringement on an exclusively federal sphere of responsibility.” 

Laurence H Tribe, American Constitutional Law § 4-5 at 656 (3d ed

2000).

This principle, which prohibits state action that unduly

interferes with the federal government’s authority over foreign

affairs, derives from both the text and structure of the

Constitution. The Constitution allocates power for external

affairs to the legislative and executive branches of the national

government and simultaneously prohibits the states from engaging in

activities that might interfere with the national government’s

exercise of these powers. To be sure, no clause in the

Constitution explicitly bestows a “foreign affairs power” to the

federal government. See L Henkin, Foreign Affairs and the United

States Constitution 14-15 (2d ed 1996). But a number of

provisions, when read together, strongly imply that such authority

was intended. See Harold G Maier, Preemption of State Law: A

Recommended Analysis, 83 Am J Int’l L 832, 832 (1989) (“[N]either

the Articles of Confederation nor the Constitution provided for a

general foreign affairs power. Nonetheless, there was never any

real question that the United States would act as a single nation

in the world community.”).

Specifically, the Constitution provides that Congress

possesses the authority “to lay and collect Taxes, Duties, Imposts

and Excises, to pay the Debts and provide for the common Defense

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and general Welfare of the United States,” US Const art I, § 8, cl

1, “to regulate Commerce with foreign Nations,” id, cl 3, and “to

define and punish Piracies and Felonies committed on the high Seas,

and Offences against the Law of Nations,” id, cl 10. Additionally

Congress is granted the power “to declare War, grant Letters of

Marque and Reprisal, and make Rules concerning Captures on Land and

Water,” id, cl 11, and the President is designated the “Commander

in Chief of the Army and Navy of the United States,” id, art II, §

2, cl 1.

With respect to the states, the Constitution directs that

“no State shall enter into any Treaty, Alliance, or Confederation;

grant Letters of Marque and Reprisal” or, without the consent of

Congress, “lay any Imposts or Duties on Imports or Exports” or

“enter into any Agreement or Compact * * * with a foreign Power,”

or “engage in War, unless actually invaded, or in such imminent

Danger as will not admit of delay.” Id, § 1, cl 10.

These and other constitutional provisions evidence an

intent on the part of the framers to grant paramount authority for

foreign affairs to the political branches of the federal

government, thereby necessitating the exclusion of intrusive

efforts on the part of the states in foreign relations. The

Supreme Court enshrined these principles in Zschernig v Miller, 389

US 429 (1968), in which the Court announced the foreign affairs

doctrine that governs the cases at bar.

Zschernig involved an Oregon probate statute that

conditioned the inheritance rights of an alien not residing in the

United States on his ability to prove that American heirs would

have a reciprocal right to inherit estates in the foreign country

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and that he would receive payments from the Oregon estate “without

confiscation, in whole or in part, by the governments of such

foreign countries.” Id at 430. The Supreme Court noted that it

had earlier refused to invalidate a similar statute enacted by

California “on its face” because that statute would have only “some

incidental or indirect effect in foreign countries.” Id at 432-33

(quoting Clark v Allen, 331 US 503, 517 (1947)). In Zschernig,

however, the Court assessed “the manner of [the Oregon statute’s]

application” and observed that the law had compelled state courts

to “launch[] inquiries into the type of governments that obtain in

particular foreign nations.” 389 US at 433. The Court noted, for

example, that the statute triggered assessments of “the actual

administration of foreign law” and “the credibility of foreign

diplomatic statements.” Id at 435. In short, the statute “seemed

to make unavoidable judicial criticism of nations established on a

more authoritarian basis than our own.” Id at 440. Looking at these

effects of the Oregon statute, the Court concluded that it was

unconstitutional because it “affected international relations in a

persistent and subtle way,” had a “great potential for disruption

or embarrassment” and triggered “more than ‘some incidental or

indirect effect in foreign countries.’” Id at 434-35, 440. 

Zschernig thus stands for the proposition that states may

legislate with respect to traditional state concerns, such as

inheritance and property rights, even if the legislation has

international implications, but such conduct is unconstitutional

when it has more than an “incidental or indirect effect in foreign

countries.” Id at 440. As the First Circuit recently observed,

under Zschernig, “there is a threshold level of involvement in and

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impact on foreign affairs which the states may not exceed.”

National Foreign Trade Council v Natsios, 181 F3d 38, 49-57 (1st

Cir 1999), aff’d on other grounds sub nom, Crosby v National

Foreign Trade Council, 530 US 363 (2000). 

But Zschernig, and the foreign affairs power it

announced, has its limits. Only a handful of state or local laws

have been struck down under Zschernig, and these laws have

typically singled out foreign nations for regulation. See, e g,

Natsios, 181 F3d 38, 53 (finding that the Massachusetts Burma Law,

which restricted the ability of Massachusetts and its agencies from

purchasing goods or services from companies that did business with

Burma (Myanmar), was unconstitutional, in part, as a “threat to

[the] federal foreign affairs power”); Tayyari v New Mexico State

University, 495 F Supp 1365, 1376-79 (D NM 1980) (striking down a

university’s policy designed to “rid the campus of Iranian

students” because it conflicted with a federal regulation and

“frustrated the exercise of the federal government’s authority to

conduct the foreign relations of the United States”); Springfield

Rare Coin Galleries, Inc v Johnson, 115 Ill 2d 221 (Ill 1986)

(invalidating an Illinois statute that excluded South Africa from a

tax exemption as more than an “incidental” intrusion on the federal

government's foreign affairs power); Bethlehem Steel Corp v Board

of Commissions, 276 Cal App 2d 221 (1969) (invalidating a

California Buy American statute because it had “more than ‘some

incidental or indirect effect in foreign countries’ and * * * great

potential for disruption * * * .”). 

The Ninth Circuit’s decision in Deutsch v Turner Corp,

324 F3d 692 (9th Cir 2003), sheds light on the present issues. 

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Deutsch affirmed this court’s decision in In re World War II Era

Japanese Forced Labor Litig, 164 F Supp 2d 1160 (ND Cal 2001),

finding preemption of a California law that created a cause of

action for victims of World War II slave labor. The Ninth Circuit

stated that California had “sought to create its own resolution to

a major issue arising out of the war – a remedy for wartime acts

California’s legislature believed had never been fairly resolved.” 

Id at 712. Because the power to make and resolve war included the

authority to resolve war claims, the California scheme was

preempted by the federal scheme. Id at 714. As this court

observed, the statute’s terms and legislative history “demonstrate

a purpose to influence foreign affairs directly” and “target[]

particular countries,” as “California intended the statute to send

an explicit foreign relations message, rather than simply to

address some local concern. In re WWII, 164 F Supp 2d at 1173,

1174.

In contrast to the law in Deutsch, none of the state laws

the government seeks to preempt was enacted to influence foreign

affairs. Nor can it be said that any state has attempted to

“establish its own foreign policy.” 389 US at 441. Instead, the

laws underlying the state investigations are directed at more

mundane, local concerns such as utility regulation and privacy,

traditional realms of state power.

Nor is there a basis for concluding that the

investigations of the carriers will have significant impact on the

government’s relations with any foreign nation. In this regard,

Int'l Ass’n of Indep Tanker Owners v Locke, 148 F3d 1053, 1068 (9th

Cir 1998), is instructive. The Ninth Circuit in Locke rejected out

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of hand the argument that onerous regulations on oil tankers

promulgated by the state of Washington were unconstitutional under

Zschernig because the litigant “failed to demonstrate that, even if

[those] regulations [had] some extraterritorial impact, that impact

[was] more than ‘incidental or indirect.’” Locke, 148 F3d at 1069

(quoting Zschernig, 389 US at 434). Akin to the regulations in

Locke, the state investigations may have an effect on foreign

affairs, but that effect is only incidental and indirect. See

Zschernig, 389 US at 433. 

D

Finally, the court takes up how the state secrets

privilege bears on the state officials’ investigations. The

Director of the NSA, General Keith B Alexander, has concluded that

permitting the investigations to proceed would interfere with the

national security operations of the government. Doc #265, Ex A. 

Alexander’s declaration explains that each of the “five of the

state proceedings * * * seek, at a minimum, information regarding: 

(1) whether specific telecommunication carriers assisted the NSA

with an alleged foreign intelligence program involving the

disclosure of large quantities of records pertaining to customer

communications; and (2) if such a program exists, the precise

nature of the carriers’ alleged involvement and details concerning

the alleged NSA activities.” Doc #265, Ex A, ¶ 16. According to

Alexander, confirming or denying “allegations concerning

intelligence activities, sources, methods, relationships, or

targets” would harm national security in various ways. Id, ¶ 17. 

//

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In view of this court’s analysis in Hepting v AT&T Corp,

439 F Supp 2d 974 (ND Cal 2006), the court notes — and the state

officials acknowledge — that some of the information sought in

these investigations may implicate the state secretes privilege. 

Conversely, some questions posed in these investigations fall

outside the privilege’s scope, a point the government conceded at

oral argument. With further guidance from the Ninth Circuit, the

court will be able to decide whether and to what extent the state

investigations may proceed. Accordingly, the court declines to

rule on the state secrets issue pending the Ninth Circuit’s

decision in Hepting v AT&T Corp.

IV

In sum, the government’s summary judgment motion is 

DENIED WITHOUT PREJUDICE to its renewal following the Ninth

Circuit’s decision in Hepting v AT&T. The court also DENIES AS

MOOT the state officials’ motions for summary judgment. After the

Ninth Circuit issues an order in Hepting, the parties may renotice

their cross motions. 

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

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