Monthly Archives: March 2017

First, Let Me Take a Selfie

Author: Adam Pitchel, Associate Member, University of Cincinnati Law Review

Recent events have indicated that the electoral process remains a vital component of American government. Keeping this system free from intimidation, fear, and coercion is necessary to maintain its integrity. As part of this effort, several states have enacted legislation that prevents voters from taking pictures of their ballots after casting their votes.[1] These statutes are designed to preserve the sanctity of the electoral system by reducing the possibility of voter intimidation.[2] More persuasively, other proponents argue that this sort of legislation helps combat bribery or vote buying.[3] Opponents of these statutes argue that they impose an improper restriction of free speech and violate the First Amendment.[4] As part of this argument, they point out that incidents of voter intimidation and coercion have reduced substantially in the late 20th and early 21st centuries.[5] Furthermore, they argue that these statutes are largely ineffective in preventing voter intimidation because people who choose to take photos of their ballots often want to make their political opinion known.[6] Opponents of these statutes incorporate a more modern understanding of the First Amendment as it relates to the electoral process while proponents cling to an outdated rationale that has little bearing on the current issues of our time. Continue reading

The Location of Data: An Issue the Courts have yet to Address

Author: Alexander Spaulding, Associate Member, University of Cincinnati Law Review

Introduction

Technology advances much faster than our judicial system that evolves slowly through precedent. However, technological advances place judges in situations where they must apply the antiquated precedential law to new technology. In December, the Second Circuit faced this problem in Microsoft Corp. v. United States,[1] when it held that the government cannot compel Internet Service Providers (ISPs) to produce electronic data that is stored overseas, even by a warrant.[2] Now, Microsoft need not comply with a warrant that sought readily-accessible data, because that data was stored on servers in Ireland. The court dealt with the data as though it were any other physical object, and did not account for the differences posed by the new technology.[3] By doing so, the court failed to address the novel issue regarding data and its lack of a territorial nature, which will pose challenges to United States law enforcement in the future. However, irrespective of the court’s considerations, the outcome of treating data territorially is beneficial from a foreign policy standpoint. Thus, even though the Second Circuit missed an opportunity to rule on the novel problem presented by data, the court shored up our foreign relations.

The Novel Issue: Where is Data?

Electronic data is significantly different than physical objects because data can be both created and accessed from anywhere with an internet connection. Although data can be created and accessed from almost anywhere, data is still physically stored in server farms located all over the world.[4] Recently, there has been significant scholarly dispute regarding where data is located for jurisdictional purposes.[5] As evidenced by the ruling in Microsoft, data is currently presumed to be located at the server’s location, as evidenced by the ruling in Microsoft, which is in line with the rules of other countries.[6] However, electronic data is arguably “un-territorial,” [7] because its physical location is largely irrelevant—so perhaps data should be considered to not have a location for jurisdictional purposes. Jennifer Daskal argues, “territorial-based rules of the game are premised on two key assumptions: that objects have an observable, identifiable, and stable location, either within the territory or without; and that the location matters.” [8] Data does not comply with either of these assumptions: (1) it is constantly flowing, and (2) its physical location has no bearing on any interaction with it. Thus, the legal location of data should arguably be anywhere that it can be accessed or created.

What the Microsoft Court Addressed: Extraterritoriality

In Microsoft, a magistrate judge issued a warrant under the Stored Communications Act[9] (SCA), requiring Microsoft to produce certain emails.[10] However, some of the emails were stored on a server in Dublin, Ireland.[11] Although the question of where data is located is one of first impression[12], and despite the ongoing debate regarding the un-territorial nature of data, the Microsoft court essentially disregarded the issue because “no party dispute[d] that the electronic data subject to this [w]arrant [are] in fact located in Ireland.”[13] Nor did a party dispute that Microsoft would have to “collect the data from Ireland.”[14] Therefore, the court found no reason to address whether data was exceptional, and defaulted to treating it like a physical object, “located” where it is stored.

Therefore, the question in Microsoft became whether an extraterritorial warrant is valid under the SCA, regardless of the warrant’s intended object. The court applied the two-part test from Morrison v. Nat’l Austl. Bank Ltd., which determines whether a statute is meant to be used extraterritorially.[15] Since (1) there is no explicit text that states that the act should be applied exterritorialy, and (2) the proposed use of the statute was not extraterritorial, the court found that the SCA does not apply extraterritorially.[16] The court found no reason to override the strong congressional presumption against the extraterritorial application of statutes.[17] Then, the court found that enforcing the warrant would be an extraterritorial application of the SCA.[18] The court reasoned that the congressional purpose of the SCA was to protect privacy, and since the privacy interest in this case was in Ireland, the warrant would apply the SCA extraterritorially, which made it invalid.[19]

Missing the Point

Although the court came to a judgment in Microsoft, the court did not address or resolve the un-territorial nature of data. Rather, the court explicitly ruled in favor of the notion that data is located on the servers where it is stored, despite never tackling the question. The court missed an opportunity to adapt to the new technology, and instead further entrenched itself in applying old law to new technology.

The Ramifications

Law enforcement officers will be severely hindered in obtaining evidence from ISPs that store their information abroad. Barring a different precedential ruling on data territoriality, there are now two paths for law enforcement to have jurisdiction over “extraterritorial” data in the future, and they come through the other branches of government. First, congress could amend the SCA to include provisions that deal with data as an exceptional circumstance. However, until that happens, law enforcement’s only option is to appeal to Mutual Legal Assistance Treaties (MLATs), which are agreements that the executive negotiates with other countries that aid in law enforcement through gathering and exchanging information. However, MLATs require bilateral action and thus often operate much more slowly.[20] Thus, the ruling means that critical information from ISPs, if it is stored overseas, may be very difficult to access under our current laws.

Other Considerations

Although the court did not consider the un-territorial nature of data, there is no guarantee that such a consideration would change the outcome of the case. First, the court could have considered the differences of data when compared to other objects, and still rejected that the difference mattered. Second, even if the court found that data is territorially unique, there is still a compelling reason to rule that seizing data stored overseas is extraterritorial and illegal—foreign policy consequences. If the United States were to authorize unilateral law enforcement intrusions into sovereign countries, it risks offending that country. Furthermore, the United States risks setting a dangerous international precedent that could allow foreign governments to unilaterally compel the production of data located in the United States through jurisdiction in its own country.[21]

Conclusion

Ultimately, considering the foreign political ramifications, the Microsoft court probably made the right decision. However, the court came to its conclusion too quickly, without addressing the debate regarding the location of data. Doing so, the court has made a precedent of dealing with data as it would deal with any physical object, something legal and technological scholars believe is outdated. The court had an opportunity to change the way data is understood, and to rule based on the unique foreign policy concerns that arise from data. Instead, the court settled for applying old law to new technology.

 

[1] 829 F.3d 197, 222 (2d Cir. 2016).

[2] Id.

[3] Id.

[4] Jonathan Nimrodi, 10 Facts You Didn’t Know About Server Farms, Cloudyn, (Sep. 8, 2014), https://www.cloudyn.com/blog/10-facts-didnt-know-server-farms/.

[5] See e.g. David R. Johnson & David Post, Laws and Borders — The Rise of Law in Cyberspace, 48 Stan. L. Rev. 1367, 1374-1376 (1996).

[6] The same is true in the UK; the High Court reached the same conclusion. See Jack Clark, Data Jurisdiction is Where Server is Located, Says Court, http://www.zdnet.com/article/data-jurisdiction-is-where-server-is-located-says-court/#!.

[7]  Jennifer Daskal, The Un-Territoriality of Data, 125 Yale L.J. 326, 389-391 (2015).

[8] Id. at 328-9.

[9] 18 U.S.C. §§ 2701–2712 (2012).

[10] Microsoft, 829 F.3d at 200.

[11] Id. at 201

[12] See Daskal supra note 6 at 328.

[13] Id. at 209

[14] Id.

[15] Id. at 210

[16] Id.

[17]Id. at 216

[18] Id. at 220

[19] Id.

[20] Jennifer Daskal, A New UK-US Data Sharing Agreement: A Tremendous Opportunity, if Done Right, Just Security (Feb. 8, 2016).

[21] See Daskal supra note 6 at 397.

Bob the Builder on Demand: Labor Markets and a Changing Economy

Adam Pitchel, Associate Member, University of Cincinnati Law Review

Recent technology has changed labor markets for employers, employees, and consumers. The increase of temporary work channeled through an online or mobile-based system raises important questions about the roles and responsibilities of those working in a “gig economy.” Companies that utilize this business model such as Uber, Lyft, Handy, and Airbnb have faced criticism about classifying their workers as independent contractors rather than employees.[1] By doing so, these businesses avoid many of the responsibilities of a typical employer. For example, independent contractors are typically not entitled to anti-discrimination protections, payroll tax contributions, or healthcare benefits.[2] Proponents of this sort of business model champion the flexibility that it provides by allowing people to choose when they work.[3] Conversely, critics argue that this model merely serves to exploit laborers by collecting profits from their work while giving them little or no support.[4]

Issues regarding the applicability of the independent contractor label are currently being litigated in the state and federal court systems. Several class-action suits have been filed by current and former workers of these companies, alleging that they deserve to be categorized as employees rather than independent contractors.[5] Workers argue that their companies exercise too much control over their work product for them to be considered independent contractors.[6] It is likely that the eventual resolution of these suits will provide some guidance; however that will take a significant amount of time. Thankfully, policymakers around the country have drafted legislation that helps alleviate or interpret some of these issues. Legislators attempted to bridge the gap between service provider and worker by offering some benefits to workers while maintaining the independent contractor label.[7] By doing so, lawmakers have provided another way to resolve the question of whether certain workers and independent contractors or employees. Continue reading

CORPORATIONS SEEK TAX AVOIDANCE THROUGH CORPORATE INVERSIONS

Author: Ryan Kenny, Associate Member, University of Cincinnati Law Review

Since the 1980s, an increasing number of United States-based corporations have been shifting assets overseas into low and no-tax jurisdictions to avoid paying high tax rates in the United States.[1] As a result, the corporate tax base has decreased in size, which creates problems for tax revenues. Some members of Congress have estimated stopping corporate inversions would save the United States’ tax base nearly forty-one billion dollars over ten years, although no study has been officially commissioned by the federal government to verify this number.[2] Although there are often a multitude of reasons why a company may decide to invert, the most prevailing justification is the significant tax savings.[3] The procedure and laws surrounding a company’s decision to invert to a low- or no-tax jurisdiction (“tax havens”), such as the Cayman Islands or Bermuda, are incredibly complex. The federal government has tried several initiatives to curb corporate inversions since the early 2000s, but corporations still find ways to invert. It is important to understand the different ways corporations invert before addressing how to solve the revenue gap created by inversions. While the government has been focusing on how to stop inversions, it would be more economical for the tax system to reexamine how it defines the location of a corporation, or its “residence”. This may provide a way for the Internal Revenue Service (“IRS”) and Congress to fix the unintended consequences of the Internal Revenue Code (“Code”), which have led incentivized corporations to invert. Continue reading

The Sixth Amendment and the Right to Choose Appointed Counsel

Author: Melanie Navamanikkam, Associate Member, University of Cincinnati Law Review

The Due Process Clauses of the United States Constitution, along with the Sixth Amendment, guarantee to all felony defendants the right to a fair trial.[1] However, the definition of what exactly constitutes a “fair trial” may be determined by the financial means of the defendant.[2] For the wealthy, a fair trial entails the right to choose counsel that the defendant feels will adequately represent their interests,[3] with the ability to change and substitute counsel over concerns such as lack of trust—a vital component of client-lawyer relationships in criminal cases.[4] A defendant’s ability to protect his or her interests is especially important in a felony cases, where a defendant’s right to liberty and freedom are at stake. On the other hand, while the justice system recognizes the severity of what is at stake for wealthy criminal defendants, poor defendants who cannot afford their own counsel are offered no such acknowledgement.[5] Instead, for indigent defendants, the definition of what constitutes a ‘fair trial’ is confined to mean that poor defendants only have the right to be appointed conflict-free counsel who will represent them at the minimal level required by the law.[6]

The Sixth Amendment unabashedly offers poor defendants, who make up the majority of criminal defendants, a brand of justice that is tipped against them by offering no way to assess their appointed counsel and de minimis means to  hold counsel accountable for the level of representation provided. Such wealth-based discrimination pervasively denies the constitutional guarantee of equal treatment under the law and must be reanalyzed to reflect the objectives of the Due Process Clauses. Continue reading