United States: What Happens When My Company Receives A National Security Letter? A Primer

Authored by Keith Burney, Aravind Swaminathan, Harry Clark, McGregor Scott and Melinda Haag

Even today, most companies—even technology companies—do not think they have information that the U.S. Government wants or needs, particularly as it might relate to a national security investigation. The reality is that as terrorists and others who threaten national security use a broader spectrum of technology resources to communicate and to finance and conduct operations, the U.S. Government has significantly increased its collection of data from technology companies and others.

In this, our first in a series of short primers from Orrick's national security counseling team¹, we discuss the National Security Letter (NSL), one of the more basic ways the government requests information. Although NSLs are limited in scope, the U.S. Government makes thousands of requests per year using National Security Letters, and the number of companies receiving such requests is growing daily.

This post describes National Security Letter elements that you need to understand, particularly if your company is a communications or financial services provider. This post also reviews immediate steps to take should your company receive one of these letters.

What is an NSL?

A National Security Letter is an administrative subpoena that the federal government uses to collect information in national security investigations. Like other administrative subpoenas (but unlike FISA warrants, which we will discuss in a follow-up post), an NSL does not require prior approval by a judge or court. Although the statutes identify the Director of the FBI as the approving authority, they also allow the Director to delegate that authority, which often falls to a Special Agent in Charge of an FBI Field Office. Because NSLs can be authorized without judicial review, the information that can be obtained with an NSL is limited by statute.

The information the government can collect with an NSL depends on which statute authorizes the letter. National Security Letters can be authorized under three different statutes: (1) the Electronic Communications Privacy Act ("ECPA", 18 U.S.C. § 2709), (2) the Fair Credit Reporting Act ("FCRA", 15 U.S.C. §§ 1681u and 1681v), and (3) the Right to Financial Privacy Act ("RFPA", 12 U.S.C. § 3414). Under ECPA, the government can request subscriber information and toll billing records. FCRA allows the government to request consumer identifying information. And under RFPA, the government can request complete financial records. Although these requests may seem broad in the abstract, practically speaking the government can access only limited information using each of these requests.

Who gets NSLs?

Broadly speaking, the government issues NSLs to four types of companies—electronic communications service providers (like ISPs), wire communications service providers (like telephone companies), financial institutions, and credit reporting agencies. Although on its face this appears to limit NSL authority to a narrow set of business sectors, courts have in fact interpreted these categories quite broadly, meaning that more than traditional ISPs, telephone companies, and banks are potential targets of an NSL. For example, electronic communications service providers include text messaging service providers, electronic bulletin boards, web-based travel reservation sites, domain hosting services, and software as a service providers.

Wire and Electronic Communications Service Providers

Access to both wire and electronic communications service provider information is authorized by ECPA. One would have thought that Congress intended to grant access to the same information for each type of provider. However, a drafting anomaly in the authorizing statute created a difference in the categories of information the government may obtain from electronic communications service providers as compared to wire communications service providers (see below for more on this). From a wire communications service provider, the government may request a subscriber's name, address, length of subscription service, and toll billing records. From an electronic communications service provider, the government can only request a subscriber's name, address, and length of subscription service—not toll billing records. This difference may seem inconsequential to the uninitiated, but it is critical for those responding to an NSL for the first time.

The practical implication of the ability to collect toll billing records from wire communication providers is that the government can find out who a suspect calls and who calls a suspect. In the case of landline telephones, toll records usually also provide the government the precise location of the callers at the time of the call. Authority to access location data does not, however, extend to cell phones.

The electronic communications equivalent of call records are IP logs. IP logs, like telephone toll records, identify computers a subscriber contacts and computers used to contact a subscriber. Under ECPA, electronic service providers are required to turn over "local and long distance toll billing records." But because electronic service providers do not bill based on what IP addresses a customer visits, a National Security Letter does not authorize the collection of IP logs.

Financial Institutions

Financial institutions may also receive National Security Letters under a different statutory scheme. NSLs issued to financial institutions are governed by RFPA (12 U.S.C. § 3514). So long as the government has met the usual requirements of an NSL—certification by a Special Agent in Charge that the information is needed for a national security purpose—then the government can obtain financial records for a specified individual or entity. And unlike ECPA, RFPA allows financial institutions to disclose financial records without a letter (e.g., through an oral inquiry by law enforcement) in the event of an emergency that creates imminent danger of physical injury to a person, serious property damage, or flight to avoid prosecution.

Credit Reporting Agencies

Credit Reporting Agencies may receive NSLs requiring them to release a consumer's identifying information, which consists of name, address, former addresses, places of employment, and former places of employment. An NSL can also be issued to credit reporting agencies for the names and addresses of all financial institutions where a consumer maintains an account. The requirements imposed on the government for an NSL directed to a credit agency are the same as those under ECPA and RFPA. Within the same act—but under separate authority (15 U.S.C. § 1681v)—the government may also seek a full credit report for a consumer.

What to do if your company receives a National Security Letter?

The first thing to remember when you receive an NSL is that many of them forbid the recipient company from disclosing to anyone the fact that the government has sought or obtained access to a consumer's information. There are, however, some limited exceptions to the non-disclosure requirement. First, the company can disclose the request to those people who are necessary to fulfill the request. Because the requests are usually addressed to a company executive or corporate counsel, companies must be able to disclose them to engineers who have the access and skills necessary to assemble the information. Second, the non-disclosure clause allows the company to seek legal advice on the matter.

Unless someone at your company has dealt with NSLs before, it is advisable to seek experienced legal counsel before complying. Although the requests may seem straightforward, companies may have an obligation (e.g., under its privacy policy) to ensure that the government has met its obligations under the relevant NSL statute before releasing private customer data. Furthermore, an NSL is typically used early in an investigation, which means that agents will likely return with additional requests as their investigation continues. Understanding the process and deciding how and whether to comply will require an experienced attorney.

Can companies challenge a National Security Letter?

The short answer is yes, but doing so is not always advisable. All the NSL statutes provide for Judicial Review of an NSL order under 18 U.S.C. § 3511. Under § 3511, a court may modify or set aside an NSL if it determines that the order is unreasonable, oppressive, or otherwise unlawful. Companies receiving an NSL may also challenge the non-disclosure requirement in district court.

Although there have been few challenges to NSLs, some have been surprisingly successful. Congress first passed legislation authorizing NSLs in 1986 and it amended and expanded this authority in 2002 as part of the USA PATRIOT Act. These amendments and the country's increased concern with national security threats drastically increased the use of NSLs in the early 2000s. This resulted in a corresponding rise in legal challenges to portions of the USA PATRIOT Act and its subsequent amendments. While individual plaintiffs have not always achieved their desired outcome in court, government agencies and Congress have shown a willingness to modify internal procedures or existing law to address litigants' concerns.

Based in large part on court challenges to NSLs, Congress amended the non-disclosure and judicial review provisions of the enabling statutes as follows:

• First, the government is now required to certify that a non-disclosure order is necessary, rather than simply granting a pro forma order with every NSL.
• Second, the recipient of an NSL is now able to challenge the non-disclosure order in court. In fact, the government is now required to notify recipients of the right to challenge the non-disclosure order. And the government now has the burden of proof to establish that the non-disclosure order is necessary.
• Finally, an NSL must now identify with specificity the selectors (i.e., specific information identifying an account, such as an email address) to be used in searching a recipient's records.

What's next?

The next frontier for NSLs is Electronic Communications Transactional Records or ECTRs. The FBI defines ECTRs as the information that electronic communications service providers retain that is analogous to subscriber information and toll billing records maintained by telephone communications service providers. According to the FBI, between 1986 and 2009 electronic communications service providers routinely provided such information in response to NSLs. In 2009, however, providers began refusing to provide ECTRs due to a 1993 change in the Electronic Communications Privacy Act. The FBI wants to close this loophole.

The FBI acknowledges that ECTRs would include the sender's email address, the email recipient's email address, and the date, time, and size of an email. Privacy advocates argue that if the FBI is given access to ECTRs, it will use this authority to access a much broader set of information, including web browser history, text logs, IP addresses and other network address information. The FBI has lobbied Congress twice in the past year to modify ECPA to expand its NSL authority to include ECTRs. To date Congress has shown a willingness to grant this expanded authority to the FBI, but it is unlikely that anything will happen until after the November elections.

Conclusion

Companies should be aware of the challenges associated with NSLs. Given the strict non-disclosure obligations, those who anticipate the possibility of receiving a letter should identify individuals whose support may be necessary to collect the information, and identify outside counsel who can assist and provide advice on obligations that may accompany the receipt of an NSL.

Please stay tuned for our second post in this series, discussing the USA PATRIOT Act.

Footnotes

1 Orrick's national security counseling team includes Melinda Haag, formerly the United States Attorney for the Northern District of California, McGregor Scott, formerly the United States Attorney for the Eastern District of California, Keith Burney, formerly a law clerk to the Foreign Intelligence Surveillance Court of Review and a Navy SEAL Commander, Aravind Swaminathan, Co-Chair of Orrick's Cybersecurity and Data Privacy Practice and formerly a Department of Justice Computer Hacking and Intellectual Property Section Attorney and Assistant United States Attorney for the Western District of Washington in Seattle, Harry Clark, Chair of Orrick's International Trade and Compliance Group, and Clark McFadden, former General Counsel to the Senate Armed Services Committee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.