8/14/2019 EFF: caps

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If Telephoe Compay Liability is to be “Capped,” Damages Mst be Fairto Plaitiffs ad Proportioate to Defedats’ Resorces i Order toAssre FISA’s Ftre “Exclsivity”

Proponents o ull retroactive amnesty or telephone company deendants in the pending cases haveargued that such extraordinary relie is necessary to avoid bankrupting the deendants and causing damageto the American economy. While EFF ully rejects this claim, it believes that this concern can be addressedin a ar less draconian and radical ashion than unqualied amnesty by statutorily “capping” damagesagainst the phone companies — whether in total, per action, per plainti, per day o violation, or somecombination o these variables.

I damages caps are to be a component o Congress’ eventual legislation in this area, EFF believes that— whatever the means used to calculate them — the resulting damages available must be air to plaintisand sufcient, given the resources o the deendant companies, to provide a meaningul disincentive touture violations o the many statutes rom which the deendant companies now seek extraordinary relie.

Absent such a disincentive, Congress’ eorts to assure the “exclusivity” o the new version o FISA nowunder debate will be seriously undermined because telephone carriers will have no reason not to respondavorably again in the uture when another overreaching Executive asks them to violate multiple existinglaws on the Executive’s claim o authority alone.

Fairness: In addition to making Constitutional claims, the pending cases are suits or the violation o atleast our major statutes, including FISA itsel, that impose specic duties upon telecommunications compa-nies to saeguard their customers’ records and privacy rom unlawul surveillance. (Others include the Wire-tap, Communications, and Electronic Communications Privacy Acts.) Taken together, these would permiteach plainti to recover statutory damages totaling a minimum o $13,000. Other statutory options includethe award o damages or each day o an ongoing violation, a method that would yield much larger awards

given the almost six years o warrantless domestic surveillance at issue in the pending cases and the millionso Americans likely aected. Clearly, when it passed these several statutes Congress wanted to strongly dis-courage their breach and to provide courts with the tools to heavily penalize their violation.

Measured against both the severity o the penalties in existing law, and the enormous scope o the viola-tion alleged in the pending cases, EFF strongly urges Congress – even while capping damages – to assurethat tens o million o ordinary Americans are not sent the clear signal that their privacy is, quite literally,worth a pittance. Regrettably, the $25 million damages cap suggested to date would send exactly that mes-sage, working out to literally less than the price o the $0.41 stamp necessary to le orms to participate inthe litigation or each aected American.

Proportionality: EFF has detailed elsewhere that the enormous corporate deendants in the

pending cases have extraordinary nancial resources. Given the need highlighted above to assure that nocompany in the uture will again accede to the privacy-crushing demands o an overreaching Executive, thepenalty assessed against them i liability is ound in these cases must be proportionate to those resources.To put that in perspective, i Congress were to “cap” total damages at $25 million, that sum would rep-resent literally a fraction of 1% o the over $3 billion in net income that AT&T alone realized in just thethird quarter o 2007. In 2006, AT&T, Verizon and Sprint realized combined net income o $15.6 billionand — during the years in which the deendant telephone companies were knowingly diverting millionso Americans’ domestic communications — just these three companies reported combined net income o over $72 billion …… an incredible 3,000 times $25 million!  

ELECTROnIC FROnTIER FOunDATIOnProtectig Rights ad Promotig Freedom o the Electroic Frotier www.eff.org 

Electroic Frotier Fodatio www.eff.org  Cotacts: Kevi Baksto of EFF at (415) 748-8126 or Adam Eisgra (202) 215-6884