Too Poor for Freedom: Sex Offender Registry and the Fourteenth Amendment

By Gabriel Loupe, Senior Associate

October 11, 2016

Introduction

If a school mandated uniforms and suspended a child too poor to afford them, there would be an uproar. Media would excoriate the school for denying the impoverished an education due to their financial circumstances. Many would wonder at the cost of a uniform relative to the school’s budget, suggesting that the school simply offer the child a simple uniform. As ever, our instinctive notions of justice and fair play seem to end at criminal court. In the state of Louisiana, a person required to register as a sex offender who cannot afford to do so, even if he or she turns himself or herself in to the police and asks for help, will be tried, found guilty, and sentenced to prison.[1] Inability to pay will not protect the sex offender from incarceration, nor will informing law enforcement and requesting aid. Under the current regulatory scheme, indigent sex offenders who have served their time have only prison in their future.

This comment argues that imprisonment and fines subsequent to a failure to register, when the offender cannot afford to pay registration costs, are unconstitutional under a substantive due process analysis, as per Bearden v. Georgia.[2] It explains the negative policy implications of the current system. Finally, the comment proposes a legislative solution—the Louisiana Legislature should establish a fund to cover the cost of registry for indigent sexual offenders.

Bearden v. Georgia and Imprisoning Good-faith Indigents

In 1983, the United States Supreme Court decided Bearden v. Georgia.[3] In Bearden, the Court held that the automatic revocation of probation because a probationer could not pay his fine violated due process.[4] In its due process analysis, the Court considered “the nature of the individual interest affected, the extent to which it is affected, the rationality of the connection between legislative means and purpose, and the existence of alternative means for effectuating the purpose.”[5] The Court noted as critical the distinction between an indigent probationer who cannot afford to pay and one who “has willfully refused to pay . . . when he has the means [or has failed] to make sufficient bona fide efforts to seek . . . [means] to pay the fine or restitution.”[6] Although the Court acknowledged the state’s interests in revoking parole, it nevertheless ordered that, should a sentencing court find that a “probationer could not pay despite sufficient bona fide efforts to acquire the resources to do so, the court must consider alternative measures of punishment other than imprisonment.”[7]

Sex Offender Registry in Louisiana and its Problems Under Bearden

The cost of registry and notification is best described as “death by a thousand cuts.” A person convicted of a crime requiring registry must provide “notice of the crime for which he was convicted, his name, residential address, a description of his physical characteristics . . . and a photograph or copy thereof”[8] to various superintendents of various city services and, most importantly, “at least one person in every residence or business within a one-mile radius in a rural area and a three-tenths of a mile radius in an urban or suburban area of the address of the residence where the offender will reside.”[9] This notification must be repeated every five years and every time a person subject to the registry changes address.[10] Further, any person subject to the registry must, depending on the nature of his underlying offense, update his registration every three months, six months, or annually.[11]

Louisiana Revised Statute 15:542.1.4 provides that a person who fails to register, on first conviction, “shall . . . be . . . imprisoned with hard labor for not less than two years, nor more than ten years without benefit of parole, probation, or suspension of sentence.”[12] This imprisonment is an automatic denial of liberty similar to the revocation of probation at issue in Bearden and implicates issues of fair treatment under the Fourteenth Amendment.

Louisiana courts have largely refrained from addressing Bearden in this context. However, in State v. Jones, a recent case from Louisiana’s Fifth Circuit, Judge Wicker penned a particularly cogent dissent, arguing that Bearden should govern failure to register cases in which a defendant made a bona fide attempt to register, but could not due to indigence.[13] Unfortunately, the majority opinion made no mention of either Bearden or the Fourteenth Amendment, leaving readers to their own devices when ascertaining the court’s reasoning on this matter.[14]

A Failure of Policy

The current law does not provide any mitigation for people who make bona fide attempts to register. Nor does it provide mitigation for those who, knowing that they cannot register, contact the relevant authorities in order to inform them of their whereabouts. No state fund exists to pay for registration. This circumstances illustrate a failure of policy on multiple grounds. By not providing mitigation, the state fails to incentivize attempts to register. Those opposing mitigation may point out that the threat of incarceration is such an incentive. However, this argument fails when considering the benefit of sex offenders remaining in contact with relevant authorities. If sex offenders know that they will be arrested by informing police officers that they are trying and failing to register, the offenders will be more likely to evade the authorities. This increases the risk of recidivism and the risk to the community, because the state will no longer know the whereabouts of the offender.

The current law costs the state money. In her Jones dissent, Judge Wicker calculated “the cost of incarcerating Mr. Jones for his failure to fully pay a $580.00 community notification fee [at] $7,121.88.”[15] This calculation did not take into account the cost of prosecution or appeal; the total cost of Mr. Jones’ interaction with the criminal justice system was therefore even higher than Judge Wicker’s estimate.[16]

A Simple Solution

While the cost of registry and notification is insurmountable to the indigent, it is trivial to the state. The establishment of a program to help indigent offenders pay for their registry and notification would eliminate the need for any litigation on the matter. It would incentivize indigent sex offenders to maintain contact with law enforcement. It would also save the state money. Many legal questions have difficult solutions; this is not such a question. The Louisiana Legislature should take immediate action to rectify the situation and spare the state the future costs of expensive litigation and incarceration.

[1] See La. Rev. Stat. Ann. § 15:542.1.4.

[2] 461 U.S. 660 (1983).

[3] Id.

[4] Id. at 661–62.

[5] Id. at 666–67 (citing Williams v. Illinois, 399 U.S. 235, 260 (1970)).

[6] Id. at 668.

[7] Id. at 672.

[8] La. Rev. Stat. Ann. § 15:542.1 (2016).

[9] La. Rev. Stat. Ann. § 15:542.1(A)(1)(a) (2016).

[10] Id. § 15:542.1(A)(2)(b).

[11] La. Rev. Stat. Ann. § 15:542.1.1(A)(1)–(3) (2016).

[12] La. Rev. Stat. Ann. § 15.542.1.4(A)(1) (2016).

[13] State v. Jones, 182 So.3d 1218 (La. Ct. App. 2015) (Wicker, J., dissenting).

[14] See generally State v. Jones, 182 So.3d 1218 (majority opinion).

[15] Id. at 1225–26 (Wicker, J., dissenting).

[16] Id. at 1226.

‘I Do’ Want More Debt: How Louisiana’s Community Property Law Punishes Premarital Education

By Alex Hotard, Senior Associate

October 11, 2016

Introduction

The Louisiana Fourth Circuit has found a convenient quirk of Louisiana law that allows individuals to boost or reduce their student debt by a whopping 50% with a simple “I do;” but which way the needle moves depends entirely on timing.[1] In Gisleson v. Deputy and Katner v. Katner, the court held that Louisiana’s community property regime requires students to reimburse their spouse if any pre-marriage student debts have been paid with community funds. [2]  In Gisleson the court also noted that when a student takes out loans during a marriage the other spouse is responsible for half of that debt even after divorce.[3]

Spousal debts have always received this treatment in Louisiana,[4] but these cases explicitly applied the traditional rules to student loans.[5] The harsh inequities of the situation demonstrate a legal bias against premarital education. Love-struck students should take stock and plan accordingly.

I. Community Property and Obligations

Louisiana’s default matrimonial regime,[6] the “system of principles and rules governing the ownership and management of the property of married persons,”[7]  distinguishes between those rights and obligations that are community and those that are separate.[8]

The couple shares an undivided one-half interest in community property,[9] and each spouse retains exclusive ownership of his or her separate property.[10] Community property is property acquired by the couple during the marriage through the labor or skill of either spouse, property gifted to the couple during the marriage, property acquired through the use of community property, the fruits derived from community or separate property, and any other property acquired during marriage that is not specifically designated as separate property.[11] Separate property is property that was owned by one spouse before the marriage, property donated or bequeathed to one spouse alone, property acquired from a breach of contract claim between the spouses, and property derived from the expenditure of existing separate property.[12]

Obligations are divided along the same lines as property rights.[13] Community obligations are those that are incurred by one spouse during the marriage either for the benefit of the other spouse or for the benefit of both spouses.[14] Separate obligations are those that are acquired before the marriage, after the marriage, or even during the marriage if they are not acquired for the benefit of the other spouse or for the benefit of both spouses.[15] When community property is used to satisfy separate obligations, the obligor spouse owes to the other spouse an amount equal to one-half of the community property that was expended to satisfy the debt.[16] Likewise, when separate property is used to satisfy community debt, the spouse who owned the separate property is entitled to reimbursement equal to one half of the value of the property that was expended. [17]

II. The Fourth Circuit’s Decisions

In Katner v. Katner, the court held that Ms. Katner, who had acquired a legal education prior to marriage, was obliged to reimburse Mr. Katner in the amount of $7,002.[18] Some of Ms. Katner’s student debt was still outstanding at the start of the marriage, and community funds were used to satisfy these debts.[19] Mr. Katner argued that he should be entitled to reimbursements for half of the payments made on Ms. Katner’s student debt.[20] With little discussion, the court first determined that the debt was a separate obligation because it preceded the marriage and then awarded the reimbursement.[21]

The court’s decision never addressed the inequities of the outcome. The Katners were married for a decade[22] during which time all of Ms. Katner’s income became community property,[23] so Mr. Katner had already benefitted financially from his wife’s education.  Under these circumstances, it is reasonable that Mr. Katner should bear some of the price for that income. Instead, Mr. Katner enjoyed all of his wife’s income with none of the cost; and Ms. Katner was forced to pay for the fault of educating herself prior to marriage.[24]

In the more recent Gisleson v. Deputy, the court held that Dr. Deputy, who had acquired a medical education before his marriage, was obligated to reimburse Ms. Gisleson in the amount of $85,000.[25]  The two were married for 19 years before divorcing one year after Dr. Deputy’s treatment for bone cancer and Ms. Gisleson’s completion of undergraduate studies.[26] Unfortunately for the recovering Dr. Deputy, some of his premarital student debts were paid during the marriage.[27] The court determined that the premarital debts were a separate obligation, and Dr. Deputy was obligated to reimburse Ms. Gisleson for half of the amount paid during their marriage.[28] Additionally, Dr. Deputy was obligated to pay for half of his wife’s outstanding student debt because she took out her loans during the marriage and before deciding to leave the marriage.[29] Dr. Deputy’s student debt, which improved life for his family, went up by 50% during the marriage; his wife’s debt, which went towards improving her own post-marital life, was effectively cut in half.[30]

Unlike the terse Katner opinion; the Gisleson opinion directly addressed Dr. Deputy’s arguments for a more equitable interpretation of the law.[31] Dr. Deputy first argued that Ms. Gisleson had already been reimbursed by virtue of the increased income that his education brought to the marriage;[32] the revenue allowed her to stay at home with her children and to pursue her own college education. [33] The court acknowledged this benefit, but it determined that article 2364 left “no room for interpretation.”[34] Dr. Deputy next argued that his income was a “fruit”[35] derived from his education and that, because the fruits of separate property become community property,[36] the interest expenses that supported his separate education should be treated as a community obligation.[37] This argument has been successfully applied to interest payments on mortgages burdening separate, revenue-generating property;[38] but the court refused to extend the jurisprudence to include student debts.[39] Dr. Deputy’s arguments presented a way out of the Katner precedent, but neither swayed the court.[40]

Conclusion

Given the state of the law, Louisiana legislation seemingly punishes premarital education and rewards education kept within the confines of marriage. Because about 47% of Louisiana’s university students carry student debt,[41] these quirks of the community property regime will undoubtedly frustrate and delight some unhappily married persons in the future. Unless the law of matrimonial regimes is changed, a student’s best course of action is to become familiar with Louisiana’s treatment of student loans and plan around it by strategically timing their marriages or by entering into a prenuptial arrangement.[42]

[1] Gisleson v. Deputy, 122 So. 3d 1089, 1093 (La. 4th Cir. Ct. App. 2013); Katner v. Katner. 28 So. 3d 566, 575 (La. 4th Cir. Ct. App. 2009). Notably, these decisions seem to be the first to expressly address the issue of premarital student debt as a separate obligation.

[2] Gisleson, 122 So. 3d at 1093; Katner, 28 So. 3d at 575.

[3] Gisleson, 122 So. 3d at 1094-95. This principle has been settled for some time. See e.g., Munson v. Munson, 772 So. 2d 141, 145 (La. 3rd Cir. Ct. App. 2000).

[4] La. Civ. Code arts. 2360-2364 (2016).

[5] Gisleson, 122 So. 3d at 1093; Katner, 28 So. 3d at 575.

[6] La. Civ. Code art. 2327 (2016).

[7] La. Civ. Code art. 2325 (2016).

[8] La. Civ. Code art. 2335 (2016); La. Civ. Code art. 2359 (2016).  This method of dividing marital property into separate and community categories is commonly referred to as a “community property regime;” and, while Louisiana is not alone in its practice, the majority of states do not follow a community property regime.  Andrea Carroll & Elizabeth Carter, Louisiana Matrimonial Regimes, Cases and materials 7 (2014).

[9] La. Civ. Code art. 2336 (2016).

[10] La. Civ. Code art. 2341 (2016).

[11] La. Civ. Code art. 2338 (2016).

[12] La. Civ. Code art. 2341 (2016).

[13] See, e.g., La. Civ. Code art. 2360 (2016); La. Civ. Code art. 2363 (2016); La. Civ. Code art. 2345 (2016); La. Civ. Code art. 2357 (2016).

[14] La. Civ. Code art. 2360 (2016).

[15] La. Civ. Code art. 2363 (2016).

[16] La. Civ. Code art. 2364 (2016).

[17] La. Civ. Code art. 2365 (2016).

[18] Katner v. Katner, 28 So. 3d 566, 575 (La. 4th Cir. Ct. App. 2009)

[19] Id.

[20] Id. at 574

[21] Id.

[22] Id.

[23] La. Civ. Code art. 2338 (2016).

[24] Katner, 28 So. 3d at 574.

[25] Gisleson v. Deputy, 122 So. 3d 1089, 1092 (La. 4th Cir. Ct. App. 2013).

[26] Id. at 1091.

[27] Id. at 1092.

[28] Id. at 1092-94.

[29] Id. at 1094-95. The timing of the loan and Dr. Deputy’s inability to show bad faith meant that Ms. Gisleson’s loans were considered community obligations even though the marriage ended within a year from her graduation date. Id. It is worth noting that Louisiana law generally provides for reimbursements to spouses who subsidize their partner’s education with the expectation that the education will benefit the marriage only to be divorced soon after the education is finished. La. Civ. Code art. 121 (2016). Curiously, this reimbursement provision was not discussed by the court.

[30] Gisleson, 122 So. 3d at 1092-95.

[31] Id.

[32] Id. at 1092-93.

[33] Id.

[34] Id. at 1093.

[35] La. Civ. Code art. 551 (2016).

[36] La. Civ. Code art. 2338-2339 (2016).

[37] Gisleson, 122 So. 3d at 1093-94.

[38]See Gill v. Gill, 895 So. 2d 807, 817 (La. 2nd Cir. Ct. App. 2005) (stating “interest on a separate debt is chargeable to the community where the debt is part of the price of (or secured by mortgage on) separate property which itself produces revenue.”).

[39] Gisleson, 122 So. 3d at 1094.

[40] Id. at 1092-95.

[41] Project on Student Debt, State by State Data, Inst. for College Access & Success, http://ticas.org/posd/map-state-data-2015# [https://perma.cc/U66T-N48M] (last visited September 18, 2016).

[42] La. Civ. Code art. 2328 (2016).

Bring Your Own Bill? Reimbursing Employee Use of a Personal Cell Phone for Work-Related Purposes

By Taylor Crousillac, Senior Associate

March 21, 2016

Introduction

Bring-your-own-device (“BYOD”) refers to the increasing trend of employers allowing employees to use their own personal cell phones in lieu of employer-provided devices to access company computer networks and email systems. This trend does not appear to be slowing down, and some experts are predicting that by 2017, half of employers will require employees to supply their own personal cell phone for work-related purposes.[1] BYOD programs can increase employee productivity and satisfaction in the workplace, but such programs come with their own risks, including privacy concerns for the employee and security concerns for the employer.[2] Even the U.S. Supreme Court recognizes the unique legal challenges posed by modern cell phones.[3] Currently, there are no statutes at the federal or state level—including Louisiana—directly addressing BYOD policies and practices, and there is limited—but developing—case law on BYOD.[4] Whether the employee or employer has the responsibility to pay for the work-related use of an employee’s personal device is an unresolved issue in Louisiana. But a creative attorney might be able to construct an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.

I. The Potential Payment Problem

The most basic reason why an employer would object to paying for part of an employee’s cell phone bill is that the employer believes that the employee would be paying for the phone regardless. That argument is not unfounded. For example, 64% of Americans owned a smart phone in 2015.[5] Aside from phone calls, text messaging, and internet use, email is the most common use for cell phones; topping social networking, playing videos, and using maps and navigation.[6] Thus, if an employee is likely to have a smart phone and is also already using the device for personal emails, then why should employers spend money subsidizing an employee’s phone bill? One California state court of appeals has addressed this issue directly.

 II. A Starting Point: Cochran v. Schwan’s Home Service, Inc.[7]

Cochran, a California appellate court decision, involved a plaintiff who filed a class action against his employer on behalf of himself and other employees who were not reimbursed by their employer for expenses pertaining to the work-related use of their personal cell phones.[8] The plaintiffs based their argument for reimbursement on Section 2802(a) of California’s Labor Code, which states that, “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer.”[9] According to the legislative history of Section 2802, the section was “designed to prevent employers from passing their operating expenses on to their employees.”[10] The appellate court reversed the trial court’s decision to deny class certification based on its interpretation of Section 2802(a).[11]

According to Cochran, Section 2802(a) of California’s Labor Code called for a straightforward solution. Under the statute, an employer is always obligated to reimburse an employee for his or her use of that employee’s personal cell phone for work-related reasons.[12] The court appeared to base its decision on the face of the statute itself and equitable principles. It stated that reimbursement was always required because “[o]therwise, the employer would receive a windfall because it would be passing its operating expenses on to the employee.”[13]

Additionally, the court noted that it is irrelevant if a third party is paying the employee’s bill and that the specific details of the employee’s cell phone plan are likewise irrelevant—for example, unlimited calls or texts.[14] The specific damages may prove difficult to determine in a case like this. The court, however, found that under Section 2802, “the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was necessary.”[15] Importantly, the court also made reference to the significant privacy concerns that an employee has related to his or her personal cell phone. By refusing employers the ability to question who is paying an employee’s cell phone bill and the specifics of the plan, it “prevents [employers] from digging into the private lives of their employees to unearth how they handle their finances vis-à-vis family, friends and creditors.”[16] In light of this interpretation of Section 2802, the appellate court remanded the case to the trial court to reconsider the plaintiffs’ motion.[17]

III. Potential Impacts of Cochran to BYOD Law in Louisiana

Although Cochran has an important impact on California’s BYOD law, its potential impact on other states, such as Louisiana, remains unclear. For instance, the holding of Cochran is narrow as it comes from only one California appellate circuit and interprets a particular California state statute. Thus, even the persuasive authority of the decision is limited. That is not to say, however, that it could not be used in another jurisdiction as the basis for a reimbursement claim for an employee’s work-related use of a personal cell phone, especially in a jurisdiction with a statute similar to Section 2802 of California’s Labor Code.

Louisiana does not have an equivalent state statue, but there is an argument for employee reimbursement on the basis of Louisiana Civil Code article 2298.[18] Article 2298, the state’s codification of the doctrine of unjust enrichment, states, “[a] person who has been enriched without cause at the expense of another person is bound to compensate that person.”[19] On its face, an argument under Civil Code article 2298 would appear to implicate the same equitable concerns espoused in Cochran.[20] In particular, the employee would be using his or her personal finances to benefit the employer. It is worth noting here that an employee’s argument for compensation would be significantly weakened if an employee signed an employment agreement making it clear that the employee would be expected to use his or her personal phone for these work related purposes. The argument for reimbursement is best suited for an instance in which there was no mention of this situation in the employment contract, or if there was no employment agreement at all between the parties.

Finally, Civil Code article 2298 handles damages in much the same way as Cochran. Article 2298 states in its second paragraph, “[t]he amount of compensation due is measured by the extent to which one has been enriched or the other has been impoverished, whichever is less.”[21] This approach calls for a facts and circumstances inquiry similar to the approach the Cochran Court espoused in its discussion on damages under Section 2802.[22]

Conclusion

The issue of reimbursement for use of an employee’s personal cell phone for work-related purposes has the potential to generate litigation in Louisiana, and the chances of litigation will only increase in the future as personal cell phones continue to invade the workplace. Although there is no current Louisiana state statue or case law on the subject, one could potentially combine Civil Code article 2298 and the reasoning in Cochran to create a blueprint for an employee reimbursement claim in Louisiana.

[1] See Gartner Predicts by 2017, Half of Employers Will Require Employees to Supply Their Own Device for Work Purposes, Gartner (May 1, 2013), http://www.gartner.com/newsroom/id/2466615 [https://perma.cc/R3K2-MMHV].

[2] See generally Melinda L. McLellan et al., Wherever You Go, There You Are (with Your Mobile Device): Privacy Risks and Legal Complexities Associated with International “Bring Your Own Device” Programs, 21 Rich. J.L. & Tech. 11 (2015).

[3] See Riley v. California, 134 S. Ct. 2473, 2488–89 (2014) (noting that modern cell phones implicate privacy concerns far beyond those implicated in the search of other objects that might be kept on an arrestee’s person).

[4] See McLellan et al., supra note 2, at 6.

[5] Aaron Smith, U.S. Smartphone Use in 2015, Pew Res. Center (Apr. 1, 2015), http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/ [https://perma.cc/C3TQ-9MK6]. This number has risen sharply in recent years. In the spring of 2011, only 35% of Americans owned a smartphone. Id.

[6] Id.

[7] Cochran v. Schwan’s Home Serv., Inc., 176 Cal. Rptr. 3d 407 (Ct. App. 2014).

[8] Id. at 409.

[9] Cal. Lab. Code § 2802(a) (West, Westlaw 2016).

[10] See Gattuso v. Harte-Hanks Shoppers, Inc., 169 P.3d 889, 893 (Cal. 2007).

[11] Id. at 413.

[12] Id. at 412.

[13] Id. (emphasis added).

[14] Id. at 413 (The court stated that “it is no concern to the employer that the employee may pass on the expense to a family member or friend, or to a carrier that has to then write off a loss. It is irrelevant whether the employee changed plans to accommodate work-related cell phone usage. Also, the details of the employee’s cell phone plan do not factor into the liability analysis.”).

[15] Id. (internal quotations omitted).

[16] Id.

[17] Id.

[18] La. Civ. Code art. 2298 (2016).

[19] Id.

[20] See Cochran, 176 Cal. Rptr. 3d at 412 (arguing that without reimbursement, the employer would be receiving a windfall at the expense of the employee).

[21] La. Civ. Code art. 2298.

[22] See supra note 15.

Email and the Threat of Inadvertent Compromise or Settlement

By Mark Macmurdo, Senior Associate

March 15, 2016

As any practitioner knows, negotiations for compromise—or “settlement”—do not just take place in an office setting. Increasingly, deals are ironed out from laptops, tablets, and cellphones. Practitioners would do well to remember that, in the eyes of the law, these informal forms of communication could have the same consequences as a formal letter. In particular, the risk of an inadvertent agreement to settle looms over any such correspondence.

I. Email May Meet the Form Requirements of a Signed Writing, Even if the Agreement is Pieced Together from Multiple Messages

An email may qualify as a signed writing, creating an enforceable agreement. A writing meets the form requirement for a valid compromise.[1] Implicit in the writing requirement set forth in Civil Code article 3072 is a requirement that both parties sign the agreement.[2] Louisiana Revised Statutes section 9:2707 states that, where the law requires a writing or a signature, an electronic record or electronic signature satisfies those requirements. Thus, an email with a corresponding electronic signature is sufficient to meet the form requirements for a compromise.[3]

Louisiana law defines an “electronic signature” as “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”[4] A court may require that any compromise established through email include such an electronic signature.[5] In determining whether an email has satisfied the implied requirement that a compromise agreement be signed, a court has found that an ordinary closing with the sender’s name at the end of an email message is insufficient to indicate intent to create an electronic signature for the purposes of a compromise or contract.[6]

Although a single communication by one party stating its understanding of an agreement is insufficient to establish a compromise because both parties must sign an agreement,[7] the agreement need not be written in a single document.[8] Where two instruments may be read together to outline the obligations and agreement of the parties, there is a valid compromise.[9] A court could find that a compromise has been reached through an exchange of writings, even though there is a lack of clarity as to incidental matters.[10]

II. Email May Evidence Intent to Compromise, Even when a Subsequent, More Formal Document is Contemplated

There are no magic words that conclusively determine whether a party intended to make an offer for compromise. A court may find that the specificity of terms contained in a writing indicates the party’s intent to compromise.[11] Even where a more formal future agreement is contemplated, a preliminary agreement that meets the form requirements and indicates consent as to particular terms may be upheld as a valid compromise.[12] By contrast, when the terms of an offer are confusing or contradictory, a court may find that no offer to establish a valid compromise has been made.[13] In addition, where an exchange indicates further negotiation or discussion regarding the terms of a compromise is contemplated, no compromise is established.[14]

III. Informal Electronic Communication in Holt v. Ace American Insurance Co.

Holt v. Ace American Insurance Co.[15] serves as an example of a court finding that an exchange of a long series of emails establishes a valid compromise. Because the emails established the compromise, the time for payment of the compromise was based on the date of the emails, even where a more formal settlement and release document was clearly contemplated and subsequently executed.[16]

In that case, the plaintiff’s attorney received a message from the mediator indicating that the defendant would be willing to settle at a particular price.[17] The plaintiff’s attorney replied to the mediator with a message stating that he had advised his clients “of the following facts,” apparently stating the parties’ obligations under the proposed compromise.[18] The plaintiff’s attorney asked the mediator to have the “[the defendant], through their counsel, confirm the terms of the compromise settlement to insure [sic] that it is an enforceable compromise agreement.”[19] The mediator forwarded the message to defendant’s counsel, asking the attorney to “please confirm asap.”[20] The attorney replied stating that his message “will confirm [that the defendant] agrees to the settlement per the e-mail string below” and that he would send a “draft Settlement and Release Agreement” to the plaintiff’s attorney.[21] The court found that the trial court did not manifestly err in finding that a valid compromise had been established.[22]

IV. Disclaimers May Be Effective in Preventing an Inadvertent Compromise

Practitioners should not let the informal nature of email fool them; electronic messages exchanged by attorneys could become enforceable if they meet the form requirements and evidence intent to compromise. This rule not only applies to emails sent from the office but extends to messages sent from any portable device. Regardless of whether the attorneys in an email exchange actually intended to reach a compromise, a court may nonetheless find a valid compromise based on the circumstances. To avoid inadvertent agreements to compromise, or any other agreement that requires a signature, a disclaimer located in all electronic correspondence might be an effective method of precluding a finding that the message contains an electronic signature. Because intent is a requirement for a valid electronic signature, such a disclaimer could state “nothing in this message may be construed as evidencing intent to provide an electronic signature for the purposes of Louisiana Revised Statutes section 9:2602.” Such a disclaimer, however, might be overly inclusive and be used as a way to invalidate other agreements. Alternatively, a disclaimer stating that “nothing in this message may be construed as evidencing intent to compromise” may be more effective for these purposes.

[1] La. Civ. Code art. 3072 (2016).

[2] Felder v. Ga. Pac. Corp., 405 So. 2d 521, 523 (La. 1981) (“Obviously, to serve as written proof of the agreement and obligations of both parties, and their acquiescence therein, the written agreement must be signed by both parties, obligating both to do what they have agreed on.”).

[3] La. Civ. Code art. 3072 cmt. d; Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012).

[4] La. Rev. Stat. Ann. § 9:2602 (Supp. 2015).

[5] Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012) (citing La. Rev. Stat. Ann. § 9:2602) (dictum). But see Holt v. Ace Am. Ins. Co., 149 So. 3d 886, 889–91 (La. Ct. App. 2014) (where attorney stated that his message “will confirm [that his client] agrees to the settlement” in the email string, the electronic signature was apparently valid).

[6] Regions Bank, 92 So. 3d at 956.

[7] Id.; Scott v. Green, 621 So. 2d 1, 2 (La. Ct. App. 1993); Barnes v. West, 159 So. 3d 1075, 1078 (La. Ct. App. 2015).

[8] Felder v. Ga. Pac. Corp., 405 So. 2d 521, 523 (La. 1981); Jacobson v. Harris, 503 So. 2d 540, 542 (La. Ct. App. 1987).

[9] Felder, 405 So. 2d at 524; Elder v. Elder & Elder Enters., Ltd., 948 So. 2d 348, 351 (La. Ct. App. 2007) (“In deciphering when separate instruments satisfy the writing requirement of [Louisiana Civil Code article] 3071, the Supreme Court has reasoned that where two instruments, when read together, outline the obligations each party has to the other and evidence each party’s acquiescence in the agreement, a written compromise agreement . . . has been perfected.”).

[10] See, e.g., Klebanoff v. Haberle, 978 So. 2d 598, 604 (La. Ct. App. 2008) (where parties had not agreed upon indemnification language to accompany the settlement, and the party demanding such language was assured that the opposing party would sign any such language, it was an “incidental matter” to the settlement of the lawsuit). But see Collins v. Mike’s Trucking Co., 934 So. 2d 827, 833 (La. Ct. App. 2006) (where a party wrote “this is not true!” in response to proposed indemnification language, it was fatal to the agreement because there was no “meeting of the minds”).

[11] First Nat’l Bank of Jefferson Parish v. Manor Heights Co., 576 So. 2d 61, 64 (La. Ct. App. 1991) (where an attorney-agent stated that his client “would like to explore . . . the possibility of settling” a dispute, detailed a list of terms it would be willing to accept, and asked for “thoughtful consideration of the foregoing settlement proposal,” the court found that a compromise had been reached).

[12] LeBlanc v. State Farm Ins. Co., 878 So. 2d 715, 720 (La. Ct. App. 2004).

[13] Soileau v. Allstate Ins. Co., 857 So. 2d 1264 (La. Ct. App. 2003).

[14] Regions Bank v. Cabinet Works, L.L.C., 92 So. 3d 945, 956 (La. Ct. App. 2012).

[15] 149 So. 3d 886 (La. Ct. App. 2014).

[16] Id. at 889–90.

[17] Id. at 888.

[18] Id. at 888–89.

[19] Id. at 888.

[20] Id. at 889.

[21] Id.

[22] Id. at 890. The court did not address the lack of signatures by the parties or the sufficiency of the language to indicate consent.

Two Sides to Security: iPhones and the All Writs Act

By Gregory Reda, Senior Associate

March 15, 2016

Introduction

In 2014, Apple decided to cloak the password-protected contents of its mobile devices with default encryption; this security mechanism automatically encrypts data stored on the phone, on Apple’s servers, and data in transit.[1] To access the encrypted information, a person needs a key that is “tied to the device password and only stored locally on the phone.”[2] Further, the phone’s encrypted contents remain unreachable to Apple because the company did not make a separate key or pathway to the data for itself.[3] The data is more secure this way.[4] Apple’s method of encryption protects its customers from hackers and identity thieves, but also creates an obstacle for law enforcement.[5]

Two recent federal cases, one in New York and another in California, highlight the issue. In each instance, the United States government obtained a legally valid warrant to search an iPhone but was unable to access the phone’s data because that data was locked behind Apple’s encryption technology.[6] In both cases, the government sought a court order through the All Writs Act (“AWA”) that would compel Apple to create another pathway into the phone.[7] The courts’ rulings have created a conflict. Whereas the California court held that Apple must assist the government pursuant to the AWA,[8] the New York court ruled that using the AWA would be improper because another statute alleviates Apple from government cooperation.[9] To protect its customers’ data, Apple has moved to vacate the ruling in California.[10] A plain reading of the AWA supports Apple’s motion.

I. The All Writs Act

The AWA provides that the “Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.”[11] The AWA allows a court to “effectively carry out the duties of an independent judiciary by issuing the orders necessary to do so—even if Congress had not had the foresight to create all of the procedural mechanisms that might be required.”[12] The AWA, however, is a discretionary,[13] residual source of authority, and courts should only use the AWA to issue writs when a statutory gap exists. As a result, when a statute specifically addresses the particular issue at hand, then that statute governs, even if “compliance with [its] procedures appears inconvenient or less appropriate.”[14] Therefore, determining if the AWA compels Apple to create another pathway into its devices turns on whether the government seeks to fill a statutory gap.

II. Searching for a Gap

Congress enacted the Communications Assistance to Law Enforcement Act (“CALEA”) to “preserve the government’s ability, pursuant to court order or other lawful authorization, to intercept communications involving advanced technologies.”[15] The federal government and Apple have agreed that CALEA does not compel Apple to bypass its security measures to allow access into one of its devices. The parties disagree, however, on why CALEA does not apply; “the government contends that CALEA simply has nothing to say on the matter, while Apple argues that the omission reflects a legislative choice.”[16]

Courts have expanded CALEA to cover additional technologies since the statute was enacted in 1994, but Congress created several exemptions “to ensure that the law would not stem technological progress.”[17] The exemptions limit the government’s ability to constrain the services that communication companies can offer. They prohibit the government from requiring a telecommunications carrier to help “bypass any encryption that might shield communications from surveillance.” Additionally, the exemptions preclude the government from asking an “information service” to intercept communications or access communication information.[18]

The act defines an information service as the “offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications.”[19] The term also “includes a service that permits a customer to retrieve stored information from, or file information for storage in, information storage facilities; electronic publishing; and electronic messaging services.”[20] Therefore, Apple is exempt from the obligations of CALEA as it is by definition an information service.[21]

III. Finding CALEA Instead

The New York court’s verdict—which was favorable to Apple[22]—resulted from a plain reading of the AWA. The court found that no statutory gap existed within CALEA that the AWA could fill. The court reasoned that Congress had considered the precise relief for which the government was requesting but had declined to adopt that relief in any legislation.[23] To justify its conclusion, the court severed the AWA’s statutory language into a three-part analysis: (1) whether the issuance of the writ the government sought was “in aid of” the court’s jurisdiction; (2) whether the writ was “necessary or appropriate” to provide such aid to the court’s jurisdiction; and (3) whether the writ would be “agreeable to the usages and principles of law.”[24]

The court found that the writ would be “in aid of” the court’s jurisdiction because it would help the government execute a valid warrant.[25] Further, no congressional prohibition existed on the matter, so the judicial action was inside the bounds of being “necessary or appropriate.”[26] The court emphasized, however, that the phrase “agreeable to the usages and principles of law” within the AWA must mean more than just an action not being prohibited by law. Otherwise, the words “usages and principles” would be left superfluous.[27] The court thus determined that the third element requires an AWA writ to also be consistent with both the development and implementation of the law.[28]

The New York court looked to CALEA’s history and found that the executive and legislative branches had, at different times, considered either updating the statute or creating special legislation to provide the exact assistance that the government sought. Fortunately for Apple, Congress never adopted that legislation.[29] What Congress knowingly left in place were the obligations and exemptions imposed by CALEA, including the exemption for information services that encompasses Apple. The court ultimately did not issue a writ on the grounds that Congress was aware of the remedy the government sought but had not enacted a law to provide for that remedy.[30]

Conclusion

A court should deny a request for a writ compelling Apple—or any other information service—to assist a law enforcement investigation by producing a new pathway into one of its devices if that writ is based upon the AWA. To allow a court to formulate a writ based upon a legislative agenda that was considered but not implemented would damage the AWA’s purpose and would give legislative-like powers to the judiciary.[31] The legislature is the proper place for the federal government to address its concerns over default encryption, not a court house.[32]

[1] Berkman Ctr. for Internet & Soc’y, Harvard Univ., Don’t Panic: Making Progress on the “Going Dark” Debate 3–4 (2016), available at https://cyber.law.harvard.edu/pubrelease/dont-panic/Dont_Panic_Making_Progress_on_Going_Dark_Debate.pdf [https://perma.cc/V5C7-CETU].

[2] Id.

[3] Id.

[4] See id. at 1.

[5] But see id. at 9–15 (arguing that default encryption does not put the FBI completely in “the dark”).

[6] Matt Apuzzo, Should the Authorities Be Able to Access Your iPhone?, N.Y. Times (Feb. 17, 2016), http://www.nytimes.com/2016/02/18/us/politics/whether-phones-should-lock-out-the-fbi.html?ref=technology&_r=1 [https://perma.cc/36YD-7G2Y].

[7] Since October of 2015, Apple has received federal orders to unlock at least twelve devices. With the amount of smartphones in use today, it is inevitable that these requests will only continue. Bill Chappell, Apple Has Gotten Federal Orders to Help Unlock at Least 13 Devices, NPR (Feb. 24, 2016, 12:15 PM), http://www.npr.org/sections/thetwo-way/2016/02/24/467943526/apple-has-gotten-federal-orders-to-unlock-at-least-13-devices [https://perma.cc/89RV-BER5].

[8] In re Search of an Apple Iphone Seized During Execution of a Search Warrant on a Black Lexus IS300, Cal. License Plate 35KGD203, No. ED 15-0451M, 2016 WL 618401 (C.D. Cal. Feb. 16, 2016).

[9] In re Order Requiring Apple, Inc. to Assist in the Execution of a Search Warrant Issued by this Court, No. 15-MC-1902(JO), 2016 WL 783565 (E.D.N.Y. Feb. 29, 2016).

[10] Apple’s Motion Opposing the iPhone Order, N.Y. Times (Feb. 25, 2016), http://www.nytimes.com/interactive/2016/02/25/technology/document-apple-motion-opposing-iphone-order.html [https://perma.cc/T72N-YMXA].

[11] 28 U.S.C. § 1651(a) (2015).

[12] In re Order Requiring Apple, Inc. to Assist in the Execution of a Search Warrant Issued by this Court, No. 15-MC-1902(JO), 2016 WL 783565, at *6 (E.D.N.Y. Feb. 29, 2016).

[13] See United States v. N.Y. Tel. Co., 434 U.S. 159, 174–78 (1977).

[14] Pa. Bureau of Corr. v. U.S. Marshals Serv., 474 U.S. 34, 43 (1985).

[15] H.R. Rep. No. 103-827, pt. 1, at 9 (1994).

[16] In re Apple, Inc., 2016 WL 783565, at *18.

[17] Id. at *16.

[18] 47 U.S.C. § 1002(b) (2015).

[19] Id. § 1001(6).

[20] Id.

[21] In re Apple, Inc., 2016 WL 783565, at *11.

[22] Id.

[23] The court looked at 18 U.S.C. § 2703(f)(1), which requires certain communication and computing services to preserve records. Id.

[24] Id. at *6.

[25] Id. at *8.

[26] Id.

[27] TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001).

[28] In re Apple, Inc., 2016 WL 783565, at *12.

[29] Id. at *16 (reviewing In re Order Requiring Apple, Inc. to Assist in the Execution of a Search Warrant Issued by this Court, No. 1:15-mc-01902-JO, 2015 WL 5920207, at *2–3 (E.D.N.Y. Oct. 9, 2015)).

[30] Id. at *11.

[31] See id. at *14.

[32] See generally Berkman Ctr. for Internet & Soc’y, supra note 1, at 5–9.