[June 25, 2006]

Judge questions secrecy claims: AT&T seeks a shield from suit challenging possible aid to U.S. anti-terror spying.

(Sacramento Bee, The (CA) (KRT) Via Thomson Dialog NewsEdge) Jun. 24--SAN FRANCISCO -- A judge expressed doubts Friday that AT&T's cooperation with the National Security Agency in spying on customer phone calls and e-mails would be a "state secret" that would have to be shielded completely from public or court scrutiny.

U.S. District Judge Vaughn Walker took issue with assertions that mere acknowledgment of the unconfirmed -- but widely reported -- electronic surveillance program would give terrorists a tactical advantage, put AT&T installations abroad at risk and make other telecommunications companies wary of turning over data.

"The state-secret privilege is not unlimited," Walker told a government lawyer, seeming to reject the broadest argument in favor of throwing out a suit by customers against AT&T.

The government was not named as a defendant but has joined the company in moving to have the case dismissed.

At issue in the case are allegations that "AT&T Corp. has opened its key telecommunications facilities and databases to direct access by the NSA and, or other government agencies," according to the legal complaint. It contends the company has intercepted and disclosed "the contents of its customers' communications" and millions of customer records.

The suit alleges the program may have been authorized by President Bush as early as 2001, and is ongoing. Similar suits have been filed across the country.

In a three-hour hearing, Walker reserved his ruling on the dismissal motions, and he appeared to play devil's advocate, baiting lawyers on all sides.

But he directly challenged the government's position that vital national interests inevitably would be compromised if the suit were allowed to proceed.

The rule commonly followed, he said, is that sensitive surveillance matters may be reviewed in private by a judge, who may then turn over portions to attorneys representing litigants.

"We have a balance somewhere. Now where is this?" he asked.

Assistant Attorney General Peter Keisler said the president, acting on intelligence information, has the authority to make the call.

The customers are represented in court by the Electronic Frontier Foundation, an organization that promotes electronic privacy. The suit is one of about two dozen, some targeting the NSA and some the telecommunications industry, filed in recent months to challenge confirmed or reported domestic surveillance programs.

The state-secrets issue also is prominent in a motion for summary judgment in federal court in Detroit, where the American Civil Liberties Union is contesting international wiretapping acknowledged by Bush.

Also under way in California are two ACLU suits over reported disclosure of residential phone records. They name AT&T and Verizon and were filed under state privacy laws.

Another suit against AT&T and affiliated companies, citing federal laws and California's unfair competition law, is pending before Walker.

Arguing on behalf of AT&T at Friday's hearing, lawyer Bradford Berenson said the company has immunity from being sued when it complies with a lawful government request for data.

He described AT&T as "just a passive instrument of the government ... a tool that the government is using."

If customers have a dispute, it's with the government and not the company, he argued.

Walker questioned, though, whether AT&T would be immune from suit if it failed to make proper inquiries about the legality of a government data request, or if it "connived with the government" in a program it should have known was unlawful.

Walker also closely quizzed plaintiffs' lawyer Kevin Bankston, asking: Did the phone company have a duty to assess the legality of a government surveillance program?

It did in this case, said Bankston, because the program was "plainly in violation" of telecommunications privacy laws.

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