Court Opinion

ID: 185571
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:33:31+00
Date Added: 2024-06-11T09:42:53.952382
License: Public Domain

276 F.3d 620 (D.C. Cir. 2002)
United States Telecom Association, Appellantv.Federal Bureau of Investigation, et al., Appellees
No. 00-5386
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 12, 2001Decided January 18, 2002

Appeal from the United States District Court  for the District of Columbia (No. 98cv02010)
A. Stephen Hut Jr. argued the cause for appellant.  With  him on the briefs were John H. Harwood II, Samir C. Jain,  Lawrence E. Sarjeant, Linda L. Kent and John W. Hunter.
Anne Murphy, Attorney, U.S. Department of Justice, argued the cause for appellees.  With her on the brief were  Kenneth L. Wainstein, U.S. Attorney, and Douglas N. Letter,
Counsel, U.S. Department of Justice.  Daniel L. Kaplan,  Counsel, entered an appearance.
Before:  Ginsburg, Chief Judge, Henderson, Circuit Judge,  and Williams, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge  Williams.
Williams, Senior Circuit Judge:

1
Electronic eavesdropping  has historically proceeded on a basis of cooperation between  law enforcement authorities and telephone service providers. In 1970 Congress regularized the relationship somewhat by  providing that a court order for electronic surveillance should,  at the request of the officer applying for authority, direct the  provider to furnish the applicant with the necessary "information, facilities and technical assistance."  Act of July 29, 1970,  Pub. L. No. 91-358, tit. II,  211(b), 84 Stat. 654 (1970),  codified at 18 U.S.C.  2518(4).  Because of rapid technological development since then, Congress in 1994 added further  structure with the Communications Assistance for Law Enforcement Act ("CALEA" or the "Act"), 47 U.S.C.  1001 et  seq. (1994).  (Each of the statute's sections has a number 899  lower than that of its codified equivalent in Title 47;  for  simplicity's sake we use only the latter.)  The Act has requirements relating to both the "capability" of telephone  service providers to intercept communications and their "capacity" to do so.  In United States Telecom Ass'n v. FCC, 227 F.3d 450 (D.C. Cir. 2000), we addressed "capability";  here we  deal only with "capacity."

2
In very simplified form, CALEA sets up the following  regime as to capacity, involving three key phases:  (1) The  Attorney General issues "notices" of what capacity is needed. The Attorney General in fact has delegated his duties to the  FBI, and we henceforth refer to it exclusively.  (2) Each  carrier responds with a "statement" of the modifications any  of its systems or services will need to provide the required  capacity.  (3) A carrier is deemed in compliance with the  FBI's capacity notices, without having made the specified  modifications, until the FBI agrees to reimburse the carrier for those modifications.  We spell out the scheme in more  detail below.

3
In 1998 the FBI issued a set of rules implementing the  Act's capacity requirements.  See Implementation of Section  104 [47 U.S.C.  1003] of CALEA, 63 Fed. Reg. 12218 (March  12, 1998) ("Final Notice").  United States Telecom Association ("USTA"), a trade association of about 1400 telephone  companies, sought relief in district court against various  provisions of the rules.  First, it argued that the FBI had  erroneously defined the class of "modifications" for which  carriers might be eligible for reimbursement.  Second, it said  that the FBI's concept of the required "notices" misread the  statute in a variety of ways, each increasing the carriers'  burdens and their risks of being found noncompliant.  In an  unpublished opinion the district court granted summary judgment in favor of the FBI on all issues.

4
Reviewing the grant of summary judgment de novo, see,  e.g., Shields v. Eli Lilly & Co., 895 F.2d 1463, 1466 (D.C. Cir.  1990), we affirm the district court with respect to the reimbursement scheme, finding that the FBI correctly defined the  "modifications" required to be reimbursed.  On the other  hand, finding error on the part of the FBI on each of the  disputes about its notices, we reverse on those issues, with  instructions to the district court to remand the case, in one  instance vacating the challenged feature of the rules, in the  others not.

5
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6
CALEA requires the FBI to issue a notice of both the  "actual number" of interceptions and devices that it expects  will be conducted and used "simultaneously" by October 25,  1998,  1003(a)(1)(A), and the "maximum capacity" required  to accommodate the surveillance that enforcement agencies  "may conduct and simultaneously use" after that date,   1003(a)(1)(B).  Subject to a qualification relating to reimbursement of necessary modifications, service providers are  required within three years after notice to have the capacity  specified in  1003(a)(1)(A) and the ability "expeditiously" to expand to the "maximum capacity" specified in   1003(a)(1)(B).  See  1003(b)(1), 1003(e).  The FBI notice  under  1003(a)(1)(A) is to state

7
the actual number of communication interceptions, pen registers, and trap and trace devices, representing a portion of the maximum capacity set forth under subparagraph (B), that the [FBI] estimates that [law enforcement authorities] may conduct and use simultaneously.

8
47 U.S.C.  1003(a)(1)(A) (emphasis added).  Pen registers  are devices that record the telephone numbers dialed by the  surveillance's subject;  trap and trace devices record the  telephone numbers of the subject's incoming calls.

9
Each of the carriers is required to respond to the notice of  capacity requirements with a "statement" of "systems or  services that do not have the [necessary] capacity."  1003(d).  The FBI reviews these statements and "may"  agree to reimburse the carrier "for costs associated directly  with modifications to attain" the capacity requirements.  1003(e).  Until the FBI agrees to reimburse the necessary  modifications specified by a carrier, the carrier is considered  in compliance.  Id.

10
We address first the cost allocation issue, then the character of the notices to be issued by the FBI.

11
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12
Cost Allocation.  We start with the key statutory provisions.  Section 1003(d) sets out the duty of the carrier to  submit a statement responding to the FBI's notice, and   1003(e) states the relationship between a carrier's compliance and the FBI's decision on what to reimburse:

1003(d) Carrier statement

13
Within 180 days after the publication by the [FBI] of a notice of capacity requirements pursuant to subsection (a) or (c) of this section, a telecommunications carrier shall submit to the [FBI] a statement identifying any of its systems or services that do not have the capacity to accommodate simultaneously the number of interceptions, pen registers, and trap and trace devices set forth in the notice under such subsection.

14
§ 1003(e) Reimbursement required for compliance

15
The [FBI] shall review the statements submitted under subsection (d) of this section and may, subject to the availability of appropriations, agree to reimburse a telecommunications carrier for costs directly associated with modifications to attain such capacity requirement that are determined to be reasonable in accordance with section 1008(e) of this title.  Until the [FBI] agrees to reimburse such carrier for such modification, such carrier shall be considered to be in compliance with the capacity notices under subsection (a) or (c) of this section.

16
47 U.S.C.  1003(d), (e).

17
The Final Notice provided for eligibility for reimbursement  as follows:

18
Capacity costs associated with any equipment, facilities or services deployed after the Carrier Statement period of 180 days following the effective date of this Final Notice of Capacity will not be eligible for reimbursement.

19
Final Notice, 63 Fed. Reg. at 12220-21.  But the language is  concededly different from the thought the FBI intended to  convey.  In fact, government counsel assured us at oral  argument (with the full assent of USTA's counsel), that this  sentence should really be read as if it also contained the  material added in boldface:

20
Capacity costs associated with any equipment, facilities or services deployed after the Carrier Statement period of 180 days following the effective date of this Final Notice of Capacity will not be eligible for reimbursement, except costs for modifications the FBI has agreed to compensate under  1003(e).

21
Thus, expenses incurred to add equipment--other than for  modifications that the carrier specified in its "statement" and  that the FBI in its discretion agreed to reimburse--are not  reimbursable.

22
USTA objects that under the FBI's reading of  1003(e), a  carrier will have to pay for all capacity it adds in the future  (except for the reimbursed "modifications"), even though the  government will be able to help itself to part of the added  capacity.  As was developed at oral argument, this skews a  carrier's incentives:  rather than invest in capacity additions  sized to accommodate not only its customers' prospective  demand but also the government's future wishes, it will elect  smaller expansions, anticipating that after the next FBI  notice and carrier statement its equipment will require "modification" and thus government reimbursement.  USTA further argues that we should not defer to the FBI's reading of  the Act under Chevron U.S.A. Inc. v. Natural Resources  Defense Council, 467 U.S. 837 (1984), because the government  has a sharp pecuniary interest in the outcome:  under USTA's  reading of the statute, the government would have to pay for  its share of all new capacity that it uses.

23
Of course the issue of Chevron deference arises only if the  statute doesn't plainly settle the issue.  Chevron, 467 U.S. at  842-43 (holding that if "Congress has directly spoken to the  precise question at issue," the court "must give effect to the  unambiguously expressed intent of Congress.").  Here we  find that the Act does so, and therefore need not resolve  USTA's pecuniary-interest theory.

24
The only costs for which the Act provides any compensation are for "modifications" under  1003(e).  These "modifications" are necessarily to "systems or services" identified by  the carrier in its  1003(d) statement as "not hav[ing] the  capacity" to accommodate the needs set out in an FBI notice  under  1003(a)(1).  And those "systems and services" are  necessarily systems and services extant at the time the  carrier files its statement.  In other words, eligibility for  reimbursement extends only to modifications as needed to  mend deficiencies set out in the carrier's  1003(d) statement.

25
USTA claims to find support in the passage of  1003(e)  that states:  "Until the [FBI] agrees to reimburse [a] carrier  for [reasonable] modifications, such carrier shall be considered in compliance with the capacity notices."  47 U.S.C.  1003(e).  But the carrier's being "in compliance" appears to  refer only to the modifications identified in the  1003(d)  statement, and says nothing with respect to the government's  uncompensated use of capacity that a provider may add, on  its own, after submitting its  1003(d) statement.

26
USTA also points to CALEA's enforcement provision, prohibiting a court from issuing any enforcement orders that  "require a telecommunications carrier to meet the Government's demand for interception ... to any extent in excess of  the capacity for which the [FBI] has agreed to reimburse  such [a] carrier."  47 U.S.C.  1007(c)(1).  But USTA's literal  reading of this section is plainly unsound;  even USTA does  not think the section governs available capacity antedating  the FBI's very first  1003(a)(1) notice.  The FBI's reading  of the section is that it reinforces the "safe harbor" provided  by  1003(e)'s assurance to a carrier that it will not be out of  compliance if law enforcement authorities demand capacity  that the carrier's  1003(d) statement has said was needed  (until the FBI funds the additional capacity).  As appellant's  construction of § 1007(c)(1) is impossible on a literal basis and  would require us to twist the meaning of  1003(e) itself, we  find it unconvincing.

27
USTA's remaining textual analysis contrasts the Act's language on capacity with its language on capability, which  explicitly provides for compensation for modifications of  equipment deployed before January 1, 1995 to accommodate  law enforcement,  1008(d), and none for equipment deployed  thereafter.  We fail to see how the distinction helps USTA. The capability provisions plainly differ substantially from  those for capacity, but the contrast sheds no light on the  proper interpretation of  1003(d) & (e).

28
Finally, USTA makes reference to some legislative history  it believes is supportive of its position.  See Appellant's Br. at  20-21 (citing H.R. Rep No. 103-827, pt. 1, at 17, 20 (1994)). "But we do not resort to legislative history to cloud a  statutory text that is clear."  Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994).  See also Burlington Northern R.R.  Co. v. Oklahoma Tax Comm'n, 481 U.S. 454, 461 (1987);  In re Sinclair, 870 F.2d 1340, 1342-43 (7th Cir. 1989) (suggesting that legislative history should only be used to elucidate  the meaning of the statutory text).  Of course, legislative  history may "shed new light on congressional intent, notwithstanding statutory language that appears superficially clear." Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1127 (D.C. Cir. 1995) (internal quotation marks and  citation omitted).  But in fact the force of appellant's claim  turns on its selective quotation.  The House Committee Report said:

29
After the four year transition period, which may be extended an additional two years by order of the FCC, industry will bear the cost of ensuring that new equipment and services meet the legislated requirements, as defined by standards and specifications promulgated by the industry itself.

30
However, to the extent that industry must install additional capacity to meet law enforcement needs, the bill requires the government to pay all capacity costs from date of enactment, including all capacity costs incurred after the four year transition period....

31
H.R. Rep No. 103-827, pt. 1, at 16-17 (emphasis added).

32
Appellant ignores the first sentence and quotes the second. In fact, properly read even the second sentence does not help  appellant, for it describes the statute simply as calling on the  government to pay for "additional capacity" that "industry  must install ... to meet law enforcement needs."  Just so. Government must pay for "modifications" that it agrees to  reimburse as specified in  1003(e), but otherwise helps itself  to capacity that is available.

33
Accordingly, we affirm the district court's grant of summary judgment for the government on USTA's cost recovery  claim.

34
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35
The remaining issues relate to provisions dealing with how  the FBI "notices" are to specify capacity requirements.  Again USTA argues that the FBI should not enjoy Chevron  deference because of its pecuniary interest.  Again we need  not address the pecuniary-interest issue, though for a different reason from the one previously given.  Even Chevron  deference requires that the agency position be reasonable,  Chevron, 467 U.S. at 843, and on none of the following issues  is that standard met.

36
"Expeditiously."  Recall that the Act distinguishes between the "actual numbers" of interceptions and equipment  the FBI expects to be conducted and used simultaneously by  October 25, 1998,  1003(a)(1)(A), and the "maximum capacity" required to accommodate surveillance thereafter,   1003(a)(1)(B).  Section 1003(b) gives this distinction operational significance.  Section 1003(b)(1) requires carriers by a  specified date to have the capacity [subject to  1003(e)] to  accommodate the  1003(a)(1)(A) demands and the ability to  "expand[ ]" to the subsection (B) "maximum capacity";  and   1003(b)(2) requires each carrier to "ensure that it can  accommodate expeditiously" an increase in demand up to the  "maximum capacity."

37
The Final Notice implements these provisions by reading  "expeditiously" to allow only five business days.  Final Notice, 63 Fed. Reg. at 12219/1.  The only rationale offered to  support the five-day period is transparently off point.  The  FBI said the decision was "based on past practice as to the  time typically involved under existing procedures used by law  enforcement and telecommunications carriers to make technical interception arrangements."  Id.  This statement about  "past practice" relates only to provisioning individual wiretaps  upon request--a task quite different from that of increasing  total wiretapping capacity.

38
Worse, unrebutted evidence in the record suggests that it  would be impossible for carriers to install additional capacity  in such a short time period.  Unsurprisingly, ordering new  hardware, securing its delivery, and then installing and testing it takes more than five days.  See id. at 12235/1 (noting  that seven commenters, including the trade association representing telecommunications equipment manufacturers, have  described this time frame as unrealistic).

39
In effect, then, the FBI's interpretation of "expeditiously"  de facto erases the statutory distinction between actual and  maximum capacity, even though the statute plainly intends  such a distinction and even specifies that "actual" capacity  should be "a portion of the maximum capacity set forth under  subparagraph (B)."  1003(a)(1)(A).  We therefore find unreasonable and vacate this aspect of the Final Notice.  See  RCA Global Communications, Inc. v. FCC, 758 F.2d 722, 733  (D.C. Cir. 1985) (rejecting agency's reading of a statute that  "would deprive [the statutory provision] of all substantive  effect").

40
"Capacity"/"Number of," and "Simultaneously."  Recall  that  1003(a)(1)(A) requires the FBI to give notice of

41
the actual number of communication interceptions, pen registers, and trap and trace devices, representing a portion of the maximum capacity set forth under subparagraph (B), that the [FBI] estimates that [law enforcement authorities] may conduct and use simultaneously.

42
47 U.S.C.  1003(a)(1)(A) (emphasis added).  Subsection (B)  similarly requires notice of the "maximum capacity" required  to accommodate such interceptions, etc., again "simultaneously."  The Final Notice insisted that these statements of  "actual number" and "capacity" were properly in terms that  drew no distinction between different types of interceptions  (e.g., communications content versus mere pen registers),  even though they differ heavily in their actual demands on  capacity.  Final Notice, 63 Fed. Reg. at 12235.  And it  treated interceptions as "simultaneous" if they occur on the  same day, even though they may each only take moments and  do not overlap in the least.  Id. at 12225.  USTA objects to  both these decisions.  And rightly so.

43
As to "capacity," the FBI acknowledged that different  interceptions impose different demands on capacity;  content  interceptions might require up to five delivery channels because of multiple participants on a call, while others, such as pen registers and trap and trace devices, typically use only a  single channel.  See id. at 12218, 12232-33.  By way of  justification it said that the only historical data it had access  to did not directly reveal the information the carriers were  after:  the available average national ratio of content interceptions to pen registers and trap and trace devices was not "in  any way representative of any specific geographic region." Id. at 12235.  It also said that, in any event, "law enforcement  ... does not know the type(s) of surveillance that will be  needed in the future."  Id. at 12236.

44
As to simultaneity, the FBI insisted that its choice "was  logical from a law enforcement perspective" because court  orders approving wiretapping activities are phrased in terms  of days, and as a result such data was all that was available. Id.  at 12225/3, 12235/2.

45
The FBI's justifications of both decisions--ultimately  claims of defects in existing data--render them unreasonable. See Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 969-70  (D.C. Cir. 1999).  Such complete throwing up of hands is  inconsistent with the Bureau's extensive use of statistical  projections elsewhere in implementing CALEA.  In fact, all  the interception numbers that the FBI gave are estimates. For instance, to determine the actual and maximum capacity  requirements themselves, the FBI undertook to establish a  historic baseline, and then used statistical techniques to extrapolate the baseline into the future.  Id. at 12224-25;  see  also id. at 12226/3 (stating that in determining "growth  factors," which require prediction of future capacity requirements, "statistical and analytical methods were applied to the  historical interception information").

46
As to these portions of the Final Notice, we reverse the  judgment of the district court, with instructions to remand  the case to the agency for a more adequate explanation. Because it is not so clear as in the case of the Bureau's  interpretation of "expeditiously" that there are no defensible  grounds for its conclusions, however, the district court should  not vacate the FBI's resolutions of the "number of/capacity"  and "simultaneously" issues.  Compare Allied-Signal, Inc. v. U.S. Nuclear Regulatory Comm., 988 F.2d 146, 150-51 (D.C.  Cir. 1993) ("The decision whether to vacate depends on the  'seriousness of the order's deficiencies (and thus the extent of  doubt whether the agency chose correctly) and the disruptive  consequences of an interim change that may itself be  changed.' ").

47
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48
The judgment of the district court is affirmed and reversed  as set forth above.

49
So ordered.