Bring Back, Bring Back, Oh Bring Back Your Earnings to Me: A Look at the New Tax Bill and Its Repatriation Provision

by Alyssa Depew, Senior Associate


On December 22, 2017, President Trump signed into law Public Bill 115-97 (“Tax Bill”).[1] Commonly known as the “Tax Cuts and Jobs Act,” the Tax Bill represents the most dramatic change to the Internal Revenue Code since the passage of the Tax Reform Act of 1986. Contrary to the 1986 Act,[2] the Tax Bill was the product of a “deeply partisan and largely closed-door process.” [3] Among the many policy changes in the Tax Bill, the one-timed deemed repatriation tax has many multi-national entities examining the potential consequences of moving foreign money back to United States (“U.S.”) soil.[4]

What Is a Repatriation Tax, and Why Would a Tax Holiday Matter?

The United States does not tax active earnings of foreign subsidiaries of U.S. multinationals on a current basis but instead defers taxation until they are actually repatriated to the U.S.[5] Under current law, multi-national companies that wish to bring back accumulated cash or illiquid earnings to the U.S. are subject to tax at the corporate rate, previously set at 35%.[6]

The Tax Bill provides a one-time deemed repatriation tax on accumulated, untaxed earnings of foreign corporations, equal to as low as eight percent of the net tax liability for each of the first five years.[7] Even with the corporate rate now being lowered to 21%,[8] an eight percent liability is extremely attractive to a firm that has accumulated large amounts of cash overseas. It is estimated that Fortune 500 corporations hold more than $2.6 trillion of “permanently reinvested” profits offshore and, subsequently, are avoiding up to $767 billion in U.S. federal income taxes.[9]

Wait a Minute, Haven’t We Done This Before?

This isn’t the first time that a repatriation provision has been enacted. The American Jobs Creation Act of 2004 (“AJCA”) provided a one-time tax holiday on the repatriation of foreign earnings by U.S.-based multinational enterprises.[10] Although Congressmen argued that it would create more than 500,000 jobs in 2 years by raising investment in the United States, the White House’s Council of Economic Advisers stated that the repatriation provision “would not produce any substantial economic benefits.”[11] The U.S. Treasury Department issued explicit guidelines on how earnings returned to the United States could be spent. The funds had to be used for “permitted investments,” which included hiring U.S. workers, U.S. investment, research and development, and certain acquisitions.[12] Certain uses, such as executive compensation, dividends, and stock redemptions, would disqualify repatriations from the holiday.[13]

Was the 2004 Tax Holiday a Success? Depends On Who You Ask.

After the AJCA went into place, economists explored the effectiveness of its repatriation provision by combining data from surveys conducted by the U.S. Bureau of Economic Analysis. The first survey used was the Survey of Direct Transactions of U.S. Reporter with Foreign Affiliate, which provides information on annual repatriations from 1996 to 2005 by U.S. multi-national entities.[14] The second survey was the Survey of U.S. Direct Investment Abroad, which captures financial and operating information for both the parent companies and foreign affiliates of U.S. multinationals.[15]

The finding made by Dharmapala et al.was that $0.60–$0.92 per repatriated dollar was spent in shareholder payouts in 2005 and subsequently not one of the permitted investments. The study claimed to show that the treasury guidelines given were “ineffective in achieving [the] specific goals” of the tax holiday.[16] The estimates from the study implied that firms returned almost all of the repatriated cash to shareholders but not necessarily that firms violated any of the provisions of the AJCA. Rather, the estimates supported the fact that because cash is fungible, a tax policy that “reduces the cost of accessing a particular type of capital will have difficulty affecting how that capital is used.”[17]

The previous finding generally has been accepted in academic circles and consequentially has impacted the debate regarding international tax reform, primarily by causing concern that corporations are likely to violate any spending requirements Congress may tie to future tax holidays.[18] The claims made by Dharmapala et al., however, have not gone entirely without criticism. Recent work by Brennan shows that although the results of the previous finding may provide useful information about “the typical firm in the subgroup of firms they identify,” the claims made regarding the expenditure of the typical dollar from all repatriations are “inaccurate and misleading.”[19]

The basis for Brennan’s criticism lies in the interpretation of the research results. Specifically, that heterogeneity in the data is not taken into account, and therefore, inferring results “for a typical firmin a subgroup to a typical dollar for the large group” is inaccurate.[20]Further, Brennan’s results show that for the 20 largest firm repatriations, firms spent $0.72 per repatriated dollar on uses permissible under the AJCA, with the remaining $0.28 paid out to shareholders.[21]In extending the analysis to non-top-20 firms, firms spent $0.59 per repatriated dollar on uses permissible under the AJCA—contrary to previous findings.[22]

So What Can We Anticipate from Another Tax Holiday?

Although there is no doubt that the Tax Bill makes dramatic and far-reaching changes to U.S. international tax policy, it is unclear how effective the repatriation provision will be in terms of stimulating economic investment based on conflicting analysis on previous tax holidays. What is clear, however, is that major U.S. firms are planning to take advantage of the provision. Most notably, Apple announced plans to bring the vast majority of its $252 billion in cash held abroad back to the U.S., paying a one time tax of nearly $38 billion, along with Cisco Systems planning to bring back $67 billion held overseas.[23] What ultimately happens to the repatriated funds—whether used for innovation and investment or rather distributed to shareholders—is to be determined.

[1]Tax Cuts and Jobs Act, Pub. L. No. 115-97 (2017) (providing for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018).

[2]On the contrary, the Tax Reform Act of 1986 was the product of years of bipartisan negotiation. David E. Rosenbaum, The Tax Reform Act Of 1986: How The Measure Came Together; A Tax Bill For The Textbooks, N.Y. Times (Oct. 23, 1986), [].

[3]Samuel A. Donaldson, Understanding the Tax Cuts and Jobs Act(Jan. 3, 2018), [].

[4]Lisa Marie Sagarra, Apple Leads These Companies With Massive Overseas Cash Repatriation Tax Bills, Fortune (Jan. 18, 2018), [].

[5]Foreign subsidiaries of U.S. multinationals are not domestic corporations and therefore are not subject to U.S. taxation on their foreign (non-U.S.) source income. I.R.C. § 7701(a)(5) (2012). Without special rules, such earnings are subject to U.S. taxation only on their repatriation to the United States mainly through dividends but also through interest, royalties, or other payments to the U.S. parent or other U.S. affiliates. Id.§ 61(a).

[6]Tax Cuts and Jobs Act, Pub. L. No. 115-97, § 13001(b)(3)(A)(i) (2017).

[7]Perspectives,Shearman & Sterling (Dec. 21, 2017) []. The earnings held as “cash or cash equivalents” are taxed at a rate of 15.5%, and all other earnings are taxed at a rate of 8%. The tax rates on the one-time deemed repatriation are achieved by providing the U.S. shareholder a deduction in the amount necessary to achieve 15.5% and 8% net rates. Id.

[8]Tax Cuts and Jobs Act, Pub. L. No. 115-97, § 13001(a) (2017).

[9]Fortune 500 Companies Hold a Record $2.6 Trillion Offshore, Inst. on Taxation and Econ. Pol’y (Mar. 2017), [].

[10]American Jobs Creation Act of 2004, Pub. L. No. 108-357, 118 Stat. 1418.

[11]Glenn R. Simpson & Gregory Zuckerman, Tax Windfall May Not Boost Hiring Despite Claims; Some Companies Plan to Use New Break on Foreign Profits for Debt and Other Needs, Wall St. J.(Oct. 13, 2004), [].

[12]Dharmapala et al., Watch What I Do, Not What I Say: The Unintended Consequences Of The Homeland Investment Act , 66J. ofFinance 753, 756 (2011).


[14]Direct Investment Surveys: BE-577, Direct Transactions of U.S. Reporter With Foreign Affiliate, Fed. Register, (last visited Feb. 19, 2018) [].

[15]International Surveys: U.S. Direct Investment Abroad,Bureau of Econ. Analysis, (last visited Feb. 19, 2018) [].

[16]Dharmapala,supra note 12,at 783.


[18] See generally Thomas J. Brennan, Where the Money Really Went: A New Understanding of the AJCA Tax Holiday, Nw. Law & Econ Research Paper No. 13-35 (2014).

[19]Id. at 41. See generallyMartin A. Sullivan, New Insight on Repatriation Holiday Not a Game Changer, Tax Analysts (Sept. 2, 2013), [].

[20]Brennan, supra note 18, at 41(emphasis added).

[21]Id. at 34–39, 41.

[22]Id. at 38–40.

[23]Cisco to Repatriate $67 Billion Under New Tax Law, N.Y. Times (Feb. 14, 2018), [].

Are Snapchat Geofilters Infiltrating Property Rights?

by Taylor E. Cooper, Senior Associate


It’s a typical Friday night, and you’re at home sharing a meal with your favorite people. You pull out your phone to take a Snapchat[1] of everyone gathered around the table. You snap the photo, but the lighting didn’t quite turn out like you planned. Typical. As you’re swiping your finger, going through the different lighting filters, you come across colorful images and text bordering your photo. The bordering reads, “Happy Birthday, Janine!” Your first thought is, “Who is Janine?” Shortly after, however, you think, “What is this filter and how did it get here?” To answer these questions: (1) I’m not sure; and (2) the feature is called a Snapchat Geofilter. Understanding how it got there, however, is more technologically and legally complex.[2]

Geofilters can be purchased on the Snapchat website and, after entering Snapchat’s website, can be completed in four easy steps: first, design your Geofilter; second, choose the dates when you want the Geofilter to be active; next, choose the area the Geofilter will “inhabit”; and, finally, submit your Geofilter and pay Snapchat the fee for your Geofilter.[3] Seems simple enough, yes? The process, however, may have legal consequences that business and personal property owners have neglected to capitalize on under the theory of unjust enrichment.

Theory of Unjust Enrichment for Property Owners Against Snapchat

In Louisiana, to have a claim for unjust enrichment, or action de in rem verso, a plaintiff must show five things: (1) an enrichment; (2) an impoverishment to themselves; (3) a connection between the enrichment and the resulting impoverishment; (4) no just cause for the enrichment and resulting impoverishment; and (5) that no other remedy at law exists to the plaintiff.[4]

Additionally, it is well known that a landowner’s right to exclude unwanted people and objects from his property is one of the core tenets of property law.[5] Thus, it very easily can be ascertained that Snapchat is being enriched to the impoverishment of a property owner’s right to exclude unconsented objects. Although it is very easy to explain the enrichment, connection of the enrichment and resulting impoverishment, and how Snapchat has no cause for its enrichment, explaining parts of the impoverishment and how there is no remedy available at law requires a modern approach to property rights and the right to exclude.

Proving an Impoverishment

An impoverishment traditionally infers a diminution of value in property[6] or even could be attained by unwillingly taking a personal risk.[7] That being said, it would be ridiculous to theorize that the courts could calculate the value lost in a theoretical property right. Despite this limitation, a well-founded tradition exists in Louisiana law allowing nominal damages to suffice to meet necessary damage requirements.[8] Because relief can only be granted upon a showing that damages have been sustained, many Louisiana cases have relied on nominal damage declarations to protect the rights of aggrieved parties in rendering a judgment[9]. Likewise, the property rights affected by intangible objects[10] cannot be protected without the use of nominal damages to substitute and comprise the monetary amount required for the damage sustained.

Therefore, in order to be sufficient as an impoverishment of the property owner’s rights, courts should assign nominal damages for the detriment caused to the property owner’s right to exclude.[11] This solution would protect the fundamental right of a property owner to exclude unwanted objects—physical or virtual—from his property and allow a plaintiff suing under unjust enrichment to move forward to the next prong of the unjust enrichment analysis.

No Remedy Exists to Protect Property Rights from Virtual Intrusions

An important prong in the unjust enrichment analysis is proving that there is no other remedy available under which a plaintiff can recover.[12] The theory of unjust enrichment does not fall necessarily into a particular area of law, such as contracts, torts, or property, but is based on equitable principles when the enrichment is not justified in law or contract;[13] as such, unjust enrichment must be a last resort for plaintiffs.[14] In support for the argument of unjust enrichment as posed in the Introduction’s hypothetical, the property owner cannot defend his property rights under any other theory of law. To claim a traditional tort of trespass or nuisance there has to be either a physical intrusion[15] or a significant harm to the property or property owner.[16] Similarly, the plaintiff has no contractual relationship with Snapchat that would confer any rights allowing the property owner to limit or stop Snapchat’s actions. Thus, the equitable principles behind unjust enrichment should be employed to protect an individual’s property rights against companies placing virtual objects onto private property and receiving undeserved money in connection withthe exploitation of the individual’s property rights. Otherwise, there is no recourse for property owners to exclude Snapchat from receiving monetary gain at the expense of personal property rights.


A property owner logically has a monetary interest and investment in the property he owns. Following from this interest and investment, it does not seem logical that Snapchat or other companies employing similar technology can reap monetary gains from placing virtual objects onto private property, without compensating the property owners for “inhabiting” their spaces. To make a simple analogy, the scenario above would be congruent to a business operating in your front yard without ever giving you a nickel. In the same respect, Snapchat Geofilters allow virtual objects to bypass the law to the detriment of property owners, unless property owners can defend their rights nominally through claims of unjust enrichment.

[1] Snapchat is an application first conceived in April 2011 that initially allowed users to send pictures and videos that would auto-erase after a user-allotted time. The application quickly gained popularity with young adults and is used ubiquitously as a verb. See generally J. J. Colao, Snapchat: The Biggest No-Revenue Mobile App Since Instagram, Forbes (Nov. 27, 2012, 1:36 PM), [].

[2] Snapchat has described Geofilters as “creative overlays that capture where you are or what you are up to in a Snap! Create your own, and surprise Snapchatters in the locations you chose.” Snapchat, (last visited Nov. 6, 2017) [].

[3] Id. Additionally, Snapchat rates the cost of their Geofilters at dollar per square foot, but factors such as the date, time, and location that the user requests will determine the increase in cost.

[4] Baker v. McClay Properties Co., 648 So. 2d 888, 897 (La. 1995).

[5] See Andrew P. Morriss & Roger E. Meiners, The Destructive Role of Land Use Planning, 14 Tul. Envtl. L.J. 95, 101 (2000); Kaesar Aetna v. United States, 444 U.S. 164, 176 (1979).

[6] See generally Daspit v. City of Alexandria, 342 So. 2d 683, 690 (La. Ct. App. 1977).

[7] See generally Baker, 648 So. 2d at 897.

[8] See Id.. See also Green v. Farmers’ Consol. Dairy Co., 37 So. 858 (La. 1905).

[9] See generally Graham v. Western Union Telegraph Co., 34 So. 91 (La. 1903); Green v. Farmers’ Consolidated Dairy Co., 37 So. 858 (La. 1905); Bourdette v. Sieward, 31 So. 630 (La. 1902); See also 6 La. Civ. L. Treatise, Law Of Obligations § 7.20 (2d ed.)

[10] Restatement (Second) of Torts § 158 (Am. Law Inst. 1965) (Traditional notions of trespass require the intruding object to have a physical presence to give rise to a trespass action).

[11] See generally Graham, 34 So.; Green, 37 So. Bourdette, 31 So.; See also 6 La. Civ. L. Treatise, Law Of Obligations § 7.20 (2d ed.)

[12] Baker, 648 So. 2d at 897.

[13] See Edmonston v. A-Second Mortg. Co., 289 So. 2d 116, 122 (La. 1974).

[14] Baker, 648 So. 2d at 897.

[15] See Pub. Serv. Co. of Colo. v. Van Wyk, 27 P.3d 377, 389-90 (Colo. 2001) (The court in Van Wyk discussed the “physicality” requirement to sustain trespass actions); See also Restatement (Second) of Torts § 158.

[16] Id.§ 821D cmt. d. A significant harm could be a dog barking or physical property damage cause by the nuisance.

“If the Phone Is for Me, I Ain’t Here!”

by R. Morgan Briggs, Issue Editor


Can the government use your cell phone data to track you without a warrant? That question currently is before the United States Supreme Court in United States v. Carpenter—a criminal case appealed from the United States Sixth Circuit Court of Appeals.[1] Timothy Carpenter was convicted of violating the Hobbs Act[2] on nine counts of armed robbery.[3] At trial, the government used approximately four months of “transactional phone records” obtained from Carpenter’s wireless carrier to show that he was near the robberies about the time they occurred.[4] The Sixth Circuit upheld Carpenter’s conviction and found that obtaining phone records showing Carpenter’s approximate location was not a search under the Fourth Amendment.[5]

As a business practice, wireless carriers typically log and store certain records about their customers’ phone calls, including the date, time, and duration of each call and the cell-sites where each call begins and ends.[6] Cell phones function by establishing a radio connection with nearby cell towers.[7] They constantly search for the strongest tower signal.[8] In urban areas, each cell tower typically covers a one-half mile to two-mile area.[9] Cell towers project different radio frequency signals in different directions.[10] So a phone connecting on one side of a tower will use a different signal than a phone simultaneously connected on the opposite side of that same tower. The data identifying the tower and signal that the phone connects to is called the cell-site location information (“CSLI”).[11]

To obtain Carpenter’s CSLI, the Federal Bureau of Investigation (“FBI”) asked a federal magistrate judge[12] to order the CLSI’s release under the Stored Communications Act. The Stored Communications Act allows the government to obtain telecommunications records, without a probable cause warrant, when the government provides a judge with “specific and articulable facts . . . that there are reasonable grounds to believe that the . . . records . . . are relevant and material to an ongoing criminal investigation.”[13] The FBI asserted that Carpenter’s phone records would provide evidence that he violated the Hobbs Act.[14] Satisfied that sufficient facts existed to reasonably believe that the phone records were relevant and material to the FBI’s criminal investigation, the magistrate judge ordered Carpenter’s service provider to provide his CLSI.[15] Using Carpenter’s CSLI to convict him, the FBI demonstrated that Carpenter was within a one-half mile to two miles of several robberies when they occurred.[16] Since his CSLI was obtained without a probable cause warrant, Carpenter argues that his conviction should be set aside because the FBI committed an unreasonable warrantless search, violating the Fourth Amendment.[17]

I. When Is a Search Not a “Search?”

To say that the Supreme Court’s Fourth Amendment jurisprudence is something less than crystal-clear would surprise no law student.[18] The Fourth Amendment protects “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures[.]”[19] The Supreme Court has recognized that the Fourth Amendment was historically understood to “embody a particular concern for government trespass” upon persons, houses, papers, and effects.[20] Government trespasses upon these protected areas typically are a search.[21]

In Katz v. United States, Justice Marshall Harlan wrote a concurring opinion and opined that the Constitution also protects people from searches that violate a “reasonable expectation of privacy.”[22] This interpretation subsequently was adopted by the Supreme Court.[23] So when society recognizes that a subjective expectation of privacy is reasonable, government intrusion upon that expectation is a search.[24]

Nevertheless, Supreme Court jurisprudence provides that no legitimate expectation of privacy exists, and thus no Fourth Amendment protection exists, for information volunteered to third parties.[25] By revealing information to a third party, the Supreme Court reasoned, a person assumes the risk that the third party may reveal her information to the government.[26] This notion often is called the “third-party doctrine.”[27] This doctrine applies even if the person believed that the third party would not reveal the information to anyone.[28]

II. No Search or a Search Within Reason?

Carpenter contends that the Fourth Amendment requires a probable cause warrant before the government can obtain his “longer-term cell site location information.” [29] More specifically, Carpenter argues that a Fourth Amendment “search” occurs when the government effectively tracked him for 127 days.[30] According to Carpenter, longer-term CSLI is a “private paper” protected by a reasonable expectation of privacy.[31] Therefore, Carpenter argues that warrantless searches of long-term CSLI are unreasonable and prohibited by the Fourth Amendment.[32]

The government asserts that obtaining business records from a service provider simply is not a Fourth Amendment search.[33] The government argues that Carpenter cannot expect privacy regarding his locational information because he voluntarily gave it to his service provider.[34] Further, assuming that obtaining long-term cell-site records is a Fourth Amendment search, the government maintains that obtaining the data under the Stored Communications Act is reasonable under the Fourth Amendment.[35]

The government argues that if Americans want to restrict governmental intrusions upon their privacy, they may, through Congress, restrain the government.[36] The government contends that the Stored Communications Act is Americans’ desired balance between the want for privacy and the need for effective law enforcement.[37] That is, requiring only specific and articulable facts, something less than traditional probable cause, to obtain CSLI but ensuring that an independent determination by a federal judge checks unbridled governmental discretion.[38]

III. The Ball Is Now in the Supreme Court.[39]

No one can predict precisely what the United States Supreme Court will decide in every case it considers.[40] But if the Court looks to the Circuit Courts of Appeals and district courts for guidance, the future does not bode well for privacy advocates. Of the six federal circuits to consider the propriety of obtaining CSLI without a warrant, none have found it unconstitutional.

The Fourth,[41] Fifth,[42] Sixth,[43] Tenth,[44] and Eleventh[45] circuits hold that obtaining CSLI from a service provider is not a search under the Fourth Amendment. Although the Third Circuit found that a cell phone user does not voluntarily share her location with her service provider, it nevertheless held that “CSLI from cell phone calls is obtainable under a § 2703(d) order and that such an order does not require the traditional probable cause determination.”[46] Further, most federal district court judges to consider the issue found that CSLI orders under the Stored Communications Act are constitutional.[47]

If the lower courts largely are unified in upholding CSLI orders under the Stored Communications Act, the following question is presented: why did the Supreme Court grant certiorari? LSU Law Professor Edward P. Richards[48] doubts that the Court will choose this case to fundamentally alter the traditional third-party doctrine because an independent judicial determination by the magistrate judge was required as a check on unbridled government discretion.[49] Instead, he believes this case presents an opportunity for the Court to encourage Congress to make meaningful changes to the law. Recognizing that Congress sometimes fails to address issues acknowledged by the Court, Professor Richards notes that, in the past, Congress amended Section 702 of the Foreign Intelligence Surveillance Act (“FISA”) to curtail the government’s right to engage in bulk data collection.[50]

The United States Supreme Court might not be the final battleground for privacy concerns in Louisiana. If privacy advocates are dissatisfied with the Supreme Court’s decision, they may argue that CSLI nevertheless is protected by Louisiana’s Constitution. Louisiana’s Constitution protects “person, property, communications, houses, papers, and effects against unreasonable searches, seizures, or invasions of privacy.”[51] Louisiana’s Supreme Court has recognized that this provision is not merely a regurgitation of the Fourth Amendment but is “one of the most conspicuous instances in which our citizens have chosen a higher standard of individual liberty than that afforded by the jurisprudence interpreting the federal constitution.”[52] In certain cases, Louisiana’s Constitution may protect Louisianans’ privacy more strongly than the United States Constitution.[53] In any event, the tension between privacy interests and legitimate governmental concerns in a modern technological era will endure for the foreseeable future.


[1] Carpenter v. United States, 819 F.3d 880 (6th Cir. 2016), cert. granted, 137 S. Ct. 2211 (June 5, 2017) (No 16-402).

[2] 18 U.S.C. § 1951 (2012). The Hobbs Act prohibits robbery affecting interstate commerce. Id.; see also The Hobbs Act, U. S. Dept. of Justice, (last visited Oct. 11, 2017) (discussing the Hobbs Act) [].

[3] See United States v. Carpenter, 819 F.3d 880 (6th Cir. 2016).

[4] Brief for Petitioner at 8, United States v. Carpenter, 137 S. Ct. 2211 (2017) No. 16-402.

[5] See Carpenter, 819 F.3d at 890 (6th Cir. 2016).

[6] Providers keep these records for business purposes, including to find weaknesses in their networks and apply roaming charges. Brief for the United States at 3, United States v. Carpenter, 137 S. Ct. 2211 (2017) No. 16-402.

[7] Id. at 2.

[8] Id.

[9] Id.

[10] See id.

[11] See, e.g., Brief for Petitioner, supra note 5, at 3.

[12] United States Magistrate Judges are judicial officers appointed to eight year terms by a majority vote of district court judges. See 28 U.S. Code § 631. The Magistrate Judge exercises jurisdiction over matters authorized by statute, delegated by the district court judge, or consented to by the parties.

[13] 18 U.S.C. § 2703(d).

[14] United States v. Carpenter, 819 F.3d 880, 884 (6th Cir. 2016).

[15] See id.

[16]Id. at 885. The records obtained in this case spanned 127 days, revealing 12,898 separate points of location data. Id. at 886. Notably, CSLI is less precise than GPS location information. CSLI might be too imprecise to show “trips to the psychiatrist, the plastic surgeon, the abortion clinic, the AIDS treatment center, the strip club, the criminal defense attorney, the by-the-hour motel, the union meeting, the mosque, synagogue or church, the gay bar and on and on.” See United States v. Jones, 565 U.S. 400, 415 (2012) (Sotomayor, J., concurring) (quoting People v. Weaver, 909 N.E.2d 1195, 1999 (N.Y. 2009)). But CSLI does allow the government to see if you have been in the neighborhood.

[17] See Carpenter, 819 F.3d at 884.

[18] See Illinois v. Caballes, 543 U.S. 405, 408 (2005) (finding that a narcotics-detection dog sniffing a car is not a “search” under the Fourth Amendment because there is no “legitimate privacy interest” in illegal cannabis trade). In an amicus brief supporting Carpenter, the Cato Institute critiques the Caballes holding: “Possession of drugs being illegal, there is no legitimate expectation of privacy in their possession. Thus, a search aimed at illegal drugs is not a search. That’s confounding.” Brief for the Cato Institute as Amicus Curiae in Support of Petitioner at 15, United States v. Carpenter, No. 16-402. But see Kyllo v. United States, 533 U.S. 27 (2001) (using thermal-imaging cameras to detect infrared radiation emitted from a home, for the purpose of detecting illegal cannabis growing, is a “search”).

[19] U.S. Const. amend. IV.

[20] Jones, 565 U.S. at 406.

[21] See id. Agents physically installing a GPS tracking device on a Jeep is a Fourth Amendment search. Id. at 404.

[22] Katz v. United States, 389 U.S. 347, at 360–61 (Harlan, J., concurring).

[23] See, e.g., Bond v. United States, 529 U.S. 334, 338 (2000) (“Our Fourth Amendment analysis embraces two questions. First, we ask whether the individual, by his conduct, has exhibited an actual expectation of privacy . . . Second, we inquire whether the individual’s expectation of privacy is ‘one that society is prepared to recognize as reasonable.’”) (internal citations omitted); California v. Ciraolo, 476 U.S. 207, 211 (1986) (“The touchstone of Fourth Amendment analysis is whether a person has a ‘constitutionally protected reasonable expectation of privacy.’”) (citing Katz, 389 U.S. at 360 (Harlan, J., concurring)); Smith v. Maryland, 442 U.S. 735, 740 (1979) (“[T]his Court uniformly has held that the application of the Fourth Amendment depends on whether the person invoking its protection can claim a ‘justifiable,’ a ‘reasonable,’ or a ‘legitimate expectation of privacy’ that has been invaded by government action.”).

[24] See Smith, 442 U.S. at 740.

[25] See, e.g., id. at 743–44. Cf. Hoffa v. United States, 385 U.S. 293, 302 (1966) (upholding Jimmy Hoffa’s conviction based on a government informant’s testimony because “[n]either this Court nor any member of it has ever expressed the view that the Fourth Amendment protects a wrongdoer’s misplaced belief that a person to whom he voluntarily confides his wrongdoing will not reveal it.”).

[26] United States v. Miller, 425 U.S. 435, 443 (1976) (finding no expectation of privacy in bank records generated by the bank).

[27] See, e.g., United States v. Graham, 824 F.3d 421, 425 (4th Cir. 2016).

[28] See Miller, 425 U.S. at 443. If this logic is extended to reach modern communication, then arguably no reasonable expectation of privacy exists concerning any unencrypted electronic message sent via third party. Justice Sotomayor is concerned that the third-party doctrine may be an improper standard in the modern era. See U.S. v. Jones, 565 U.S. 400, 417 (2012) (Sotomayor, J., concurring) (“[I]t may be necessary to reconsider the premise that an individual has no reasonable expectation of privacy in information voluntarily disclosed to third parties. This approach is ill suited to the digital age, in which people reveal a great deal of information about themselves to third parties in the course of carrying out mundane tasks.”) (citations omitted).

[29] Brief for Petitioner, supra note 5, at 14.

[30] Id. at 10.

[31] Id. at 11.

[32] Brief for Petitioner, supra note 5, at 13.

[33] Brief for the United States, supra note 7, at 11.

[34] Id. at 11.

[35] Id. at 50.

[36] See U.S. v. Jones, 565 U.S. 400, 429–30 (2012) (Alito, J., concurring) (“In circumstances involving dramatic technological change, the best solution to privacy concerns may be legislative. A legislative body is well situated to gauge changing public attitudes, to draw detailed lines, and to balance privacy and public safety in a comprehensive way.”) (internal citation omitted). This argument has been accepted by some federal circuits. See United States. v. Carpenter, 819 F.3d 880, 889 (6th Cir. 2016) (“Congress has specifically legislated on the question before us today, and in doing so has struck the balance reflected in the Stored Communications Act. The Act stakes out a middle ground between full Fourth Amendment protection and no protection at all, requiring that the government show “reasonable grounds” but not “probable cause” to obtain the cell-site data at issue here.”); U.S. v. Graham, 824 F.3d 421, 437 (4th Cir. 2016) (“[T]he Stored Communications Act (SCA), demonstrates that Congress can—and does—make these judgments. . . . It requires the executive to obtain judicial approval, as the Government did here, before acquiring even non-content information.”).

[37] Brief for the United States, supra note 7, at 53.

[38] See 18 U.S.C. § 2703(d).

[39] An interesting aside, there is a basketball court on the fifth floor of the United States Supreme Court building. This arena is aptly named “The Highest Court in the Land.” See Elizabeth Nix, 7 Things You Might Not Know About The U.S. Supreme Court, History (Oct. 8, 2013), [].

[40] If you believe anyone has this prescient power, I have a red-light to sell you in Grant Parish.

[41] Graham, 824 F.3d at 426 (“[T]he question before us is whether the government invades an individual’s reasonable expectation of privacy when it obtains, from a third party, the third party’s records, which permit the government to deduce location information. . . . [T]he cases that establish the third-party doctrine provide the answer.”).

[42] In re Application of U.S. for Historical Cell Site Data, 724 F.3d 600, 615 (5th Cir. 2013) (“Section 2703(d) orders to obtain historical cell site information for specified cell phones at the points at which the user places and terminates a call are not categorically unconstitutional.”) (emphasis in original).

[43] United States. v. Carpenter, 819 F.3d 880, 887–89 (6th Cir. 2016) (holding that defendants have no legitimate expectation of privacy in cell-site location information recorded by a third party).

[44] United States v. Thompson, 866 F.3d 1149, 1158 (10th Cir. 2017) (“[W]e focus on the narrow question before us: whether Thompson has a reasonable expectation of privacy in his historical CSLI. . . . [W]e hold he does not.”).

[45] United States v. Davis, 785 F.3d 498, 511 (11th Cir. 2015) (en banc) (“Davis has no subjective or objective reasonable expectation of privacy in MetroPCS’s business records showing the cell tower locations that wirelessly connected his calls.”).

[46] In re Application of U.S. for an Order Directing a Provider of Elec. Commc’n. Serv. to Disclose Records to Gov’t., 620 F.3d 304, 313 (3d Cir. 2010).

[47] See, e.g., United States v. Wheeler, 2016 WL 1048989, at *11–13 (E.D. Wis. Mar. 14, 2016) (Pepper, J.); United States v. Dorsey, 2015 WL 847395, at *8 (C.D. Cal. Feb. 23, 2015) (Snyder, J.); United States v. Shah, No. 13–328, 2015 WL 72118, at *7–9 (E.D.N.C. Jan. 6, 2015) (Flanagan, J.); United States v. Banks, 52 F.Supp.3d 1201, 1204–06 (D. Kan. 2014) (Crabtree, J.); United States v. Rigmaiden, No. 08–814, 2013 WL 1932800, at *14 (D. Ariz. May 8, 2013) (Campbell, J.). But see In re Application for Tel. Info. Needed for a Criminal Investigation, 119 F.Supp.3d 1011, 1026 (N.D. Cal. 2015) (Koh, J.) (“[T]he Court concludes that cell phone users have an expectation of privacy in the historical CSLI . . . and that society is prepared to recognize that expectation as objectively reasonable.”).

[48] Professor Richards received a J.D. from Houston Law in 1978 and a Master of Public Health in disease control from the University of Texas School of Public Health in 1983. Professor Richards currently teaches Cybersecurity and Counterterrorism, Administrative Law, Intro to Environmental Law, and Climate Change Law. For additional information about professor Richards, see Edward P. Richards, LSU Law, (last visited Oct. 25, 2017) [].

[49] See United States v. Carpenter, 819 F.3d 880, 884 (6th Cir. 2016).

[50] See generally 702, U.S. House of Representatives Permanent Select Committee on Intelligence, (last visited Nov. 7, 2017) [].

[51] La. Const. art. I, § 5.

[52] State v. Hernandez, 410 So.2d 1381, 1385 (La.1982). For further academic discussion of the history of Article 1, § 5 of Louisiana’s Constitution, see Lee Hargrave, The Declaration of Rights of the Louisiana Constitution of 1974, 35 La. L. Rev. 1, 20 (1974).

[53] See, e.g., Hernandez, 410 So.2d at 1385.

Whose Privilege Is It Anyway? The Applicability of the Attorney-Client Privilege to Communications with Former Employees

by Mac Zentner, Senior Associate


The attorney-client privilege is one of the oldest and most valued privileges in American society, and its operation as an evidentiary shield preserves the confidential nature of the lawyer-client relationship.[1] In the corporate context, courts have rarely questioned whether corporations are able to invoke this privilege, but have struggled to determine the extent to which the privilege protects communications between a corporation’s lawyers and its current and former employees. Although a few courts have addressed whether the privilege applies to former corporate employees, this issue remains unresolved for the majority of federal and state jurisdictions, including Louisiana.[2]

The Attorney-Client Privilege, Generally

The attorney-client privilege protects the client’s right to refuse to disclose (and to prevent any other person from disclosing) confidential communications between the client and the attorney.[3] In order to establish the attorney-client privilege, there are several elements that must be satisfied: (1) the client is the asserted holder of the privilege; (2) the communication is between the client and attorney (or their respective representatives);[4] (3) the communication is made in confidence and outside the presence of strangers; and (4) the communication is made for the purpose of obtaining legal assistance.[5] Although the various states’ privilege rules largely are similar to those under the federal common law, the exact scope of the privilege is somewhat different in a number of states.[6] Also, when federal courts apply federal law, they apply the privilege rules under the federal common law; when federal courts exercise diversity jurisdiction, however, they apply the privilege rules of the forum state under the Erie doctrine.[7]

Who Is the “Corporate Client”? The Law After Upjohn

In addition to individual clients, corporate entities also may assert the attorney-client privilege. Generally speaking, the privilege rules apply to corporate clients in the same manner as they do for individual clients and protect communications between the corporation’s lawyers and its employees.[8] The exact scope of the corporate privilege has not been without controversy, however, and courts have struggled to define it over the years.

In 1981, the United States Supreme Court in Upjohn Co. v. United States rejected the “control group” test that had been adopted by some jurisdictions. Under this test, the attorney-client privilege for corporations protected only communications between the senior officers who control a corporation (the so-called “control group”) and the corporation’s lawyers.[9] The Court instead ruled that the scope of the privilege depends on the subject matter of the communication, rather than who was making the communication.[10] In Upjohn, senior employees of Upjohn, a drug manufacturing company, became aware that one of the company’s foreign subsidiaries possibly had paid bribes to foreign government officials.[11] Subsequently, Upjohn’s office of general counsel began an internal investigation in which its lawyers sent out a questionnaire to its employees and interviewed 33 of them, including several who were no longer employed by the company.[12] When the Internal Revenue Service (“IRS”) requested the disclosure of the completed questionnaires and interview notes, Upjohn claimed privilege.[13]

The Supreme Court held that the communications were privileged and that the privilege applied not only to those high-level employees who possess the authority to act on the legal advice of the attorney, but also to any employee who can provide information that will assist the attorney in representing the corporation.[14] The Court declined to address, however, whether the privilege also applied to the communications with the former employees.[15] In a concurring opinion, Chief Justice Burger criticized the Court’s failure to confront this question and proposed his own test to determine whether the privilege should apply to communications with former employees.[16] It was not until 2015 in Hanover Ins. v. Plaquemines Parish that this issue was addressed under Louisiana law.

The Hanover Decision and Why It Matters

Although only a small number of courts after Upjohn have addressed whether the attorney-client privilege extends to communications with former employees, a Louisiana federal court recently confronted this issue in Hanover Ins. v. Plaquemines Parish.[17] In Hanover, the court utilized an “Erie guess” to predict how the Louisiana Supreme Court would decide the case.[18] It recognized that the only Louisiana case to have addressed this issue was Turner v. Lowery, in which the Louisiana Supreme Court issued a protective order preventing discovery of privileged communications between the party’s corporate counsel and any former employees relating to the subject matter of the lawsuit.[19]

The Hanover court noted that the court in Turner, in support of its decision to issue the protective order, had relied on the fact that both the Ninth and Fourth Circuit Courts of Appeal had adopted the test from Chief Justice Burger’s concurring opinion in Upjohn.[20] Because there was no other caselaw on point, the court in Hanover adopted the Burger concurrence and held that the Louisiana Supreme Court would extend the attorney-client privilege to communications with a former employee, at a minimum, when:

(1) [T]he former employee was employed by the corporation during the time relevant to the attorney’s current representation of the corporation; (2) the former employee possesses knowledge relevant to the attorney’s current representation of the corporation; and (3) the purpose of the communication is to assist the attorney in “(a) evaluating whether the employee’s conduct has bound or would bind the corporation; (b) assessing the legal consequences, if any, of that conduct; or (c) formulating appropriate legal responses to actions that have been or may be taken by others with regard to that conduct.”[21]

The court then determined that because each of the test’s requirements was met, the communications at issue were privileged.[22]


Although the Hanover decision is not binding on the Louisiana Supreme Court,[23] its holding nevertheless exists as significantly persuasive authority given the absence of state court jurisprudence addressing this issue.[24] Thus, it seems likely that the Louisiana Supreme Court would conclude that the attorney-client privilege extends to communications between a corporation’s attorneys and its former employees as long as the test promulgated in Hanover is satisfied.

[1] See Hunt v. Blackburn, 128 U.S. 464, 470 (1888) (explaining that the attorney-client privilege “is founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice, which assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure”).

[2] Hanover Ins. Co. v. Plaquemines Parish Gov’t, 304 F.R.D. 494, 499–500 (E.D. La. 2015).

[3] See, e.g., Attorney-client privilege, Black’s Law Dictionary (10th ed. 2014).

[4] Furthermore, it is not required that the communication be made by the client, as the privilege protects communications both from the client to the lawyer and from the lawyer to the client. See, e.g., Kobluk v. U. of Minn., 574 N.W. 2d 436 (Minn. 1998) (holding that drafts of documents by lawyer sent to client for review were privileged).

[5] See Restatement (Third) of the Law Governing Lawyers § 68 (Am. Law Inst. 2000); see also La. Code Evid. art. 506 (2017).

[6] Restatement § 68 cmt. d.

[7] Fed. R. Evid. 501; Erie doctrine, Black’s Law Dictionary (10th ed. 2014) (“The principle that a federal court exercising diversity jurisdiction over a case that does not involve a federal question must apply the substantive law of the state where the court sits.”).

[8] Restatement § 73. See generally Upjohn Co. v. United States, 449 U.S. 383 (1981).

[9] Upjohn, 449 U.S. at 390.

[10] Id. (“[T]he privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice.”).

[11] Id. at 386.

[12] Id. at 386–87, 394 n.3.

[13] Id. at 387–88.

[14] Id. at 391 (“In the corporate context, however, it will frequently be employees beyond the control group . . . who will possess the information needed by the corporation’s lawyers.”).

[15] Id. at 394 n.3.

[16] Id. at 402–03 (Burger, J., concurring) (“[T]he Court should make clear now that, as a general rule, a communication is privileged at least when, as here, an employee or former employee speaks at the direction of the management with an attorney regarding conduct or proposed conduct within the scope of employment. The attorney must be one authorized by the management to inquire into the subject and must be seeking information to assist counsel in performing any of the following functions: (a) evaluating whether the employee’s conduct has bound or would bind the corporation; (b) assessing the legal consequences, if any, of that conduct; or (c) formulating appropriate legal responses to actions that have been or may be taken by others with regard to that conduct.”).

[17] Hanover Ins. Co. v. Plaquemines Parish Gov’t, 304 F.R.D. 494 (E.D. La. 2015).

[18] Id. at 496–97 (“If the Louisiana Supreme Court has not ruled on this issue, then this Court must make an ‘Erie guess’ and determine as best it can what the Louisiana Supreme Court would decide.” (quoting Howe ex rel. Howe v. Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir. 2000))).

[19] Id. at 497 (citing Turner v. Lowery, 703 So. 2d 1 (La. 1997)).

[20] Id. at 498; see also In re Allen, 106 F.3d 582, 606 (4th Cir. 1997); In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litig., 658 F.2d 1355, 1361 n.7 (9th Cir. 1981). The court also stated that although the Ninth and Fourth Circuit Courts of Appeals are the only two federal appellate courts that have considered this question, “it appears that every federal court, with the exception of a single district court decision in 1985, has held that the privilege extends to former employees in certain contexts.” Hanover, 304 F.R.D. at 498.

[21] Hanover, 304 F.R.D. at 499–500 (quoting Upjohn, 449 U.S. at 402–03 (Burger, J., concurring)).

[22] Id. at 500.

[23] See, e.g., Bradford R. Clark, Ascertaining the Laws of the Several States: Positivism and Judicial Federalism After Erie, 145 U. Pa. L. Rev. 1459, 1471–72 (1997).

[24] See State v. Foret, 628 So. 2d 1116, 1122 (La. 1993); see also La. Code Evid. art. 102 cmt. a. (2017) (“[T]he adoption of this Code facilitates the movement towards a uniform national law of evidence. . . . [and] Louisiana courts now have available a body of persuasive authority which may be instructive in interpreting the Louisiana Code.”).

The Declaratory Judgment Action: Your Secret Weapon for Staying in State Court

by Tiffany Dupree, Senior Associate


You’ve just filed your case in state court. You have a non-diverse party, but you’ve been down this road before. You know that the defendant will try to remove the case to federal court, claiming that you joined the non-diverse party solely to defeat diversity jurisdiction. Truth be told, maybe you did, but you have a duty to your client and know that a state court judge will be more inclined to decide the case in your favor.

The battle of removals and motions to remand is about to begin. If only you had a secret weapon, a surefire way to keep your case in state court. Under recent Louisiana court decisions, adding a claim for declaratory relief may be the secret weapon you’ve been waiting for.

Standards for Removal based on Improper Joinder

Pursuant to 28 U.S.C. § 1332(a)(1), United States district courts have original jurisdiction over civil actions in which the amount in controversy exceeds $75,000 and is between citizens of different states.[1] Under 28 U.S.C. § 1441(a), “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.”[2]

A party seeking removal based on improper joinder of a non-diverse defendant bears a “heavy” burden of proving that joinder is improper.[3] To meet this burden, the removing party must show either “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.”[4] Typically, the removing party does not claim actual fraud in the recitation of the jurisdictional facts. Thus, the pertinent issue before a court faced with removal due to improper joinder is whether the plaintiff is able to establish a cause of action against the non-diverse party.

In determining whether a non-diverse party has been joined improperly, federal courts must consider if it is possible for the plaintiff to recover against the non-diverse defendant under state law.[5] If there is a cause of action for declaratory relief, however, the test is different.[6] The court in Bilyeu v. Wells Fargo Insurance Services, Inc., found that the Louisiana Declaratory Judgment Act (“LDJA”)[7] alters what it means to “recover against” a non-diverse defendant.[8]

The Power of a Declaratory Judgment Action

The LDJA is the applicable law concerning declaratory judgment actions initiated in Louisiana courts.[9] The LDJA provides that “[w]hen declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceedings.”[10] Therefore, the possibility to “recover against” a non-diverse defendant is met when the defendant is an affected, interested party.[11]

An action for a declaratory judgment is sought to determine the rights of the parties.[12] Thus, the analysis set forth in the LDJA begs the question: when would an action to determine the rights of a party ever not affect the party?

The LDJA’s meaning of “recover against” allows a plaintiff to join a non-diverse party solely to defeat diversity jurisdiction, provided that one of the claims asserted is for declaratory relief. The joinder of the non-diverse party is deemed proper because the party will be affected by the declaration regardless of the conclusion the court reaches. If the court concludes that the non-diverse party is liable to the plaintiff, the non-diverse party is affected. If the court concludes that the non-diverse party is not liable to the plaintiff, the non-diverse party is still affected.[13]

The standard under the LDJA for defeating an improper joinder claim is remarkably low. As noted by the court in Alfred Miller Construction Company v. Carboline Company, “[t]he mere fact that [a plaintiff states] a cause of action for a declaratory judgment explaining [his] rights and liabilities under [a contract] is sufficient to defeat a claim of improper joinder.”[14] The defendant’s “heavy” burden in proving improper joinder, coupled with the minuscule requirements the LDJA places on the plaintiff to defeat the claim, creates an easy win for the plaintiff, allowing the case to remain in state court.


Under recent Louisiana caselaw, a claim for declaratory relief seems to be an easy way to win the battle of removals and motions to remand. So, the next time you file an action in Louisiana state court but are concerned that the defendant will remove to federal court based on improper joinder of a non-diverse defendant, be sure to use your secret weapon, the declaratory judgment action.

[1] 28 U.S.C. § 1332(a)(1) (2012).

[2] 28 U.S.C. § 1441(a) (2012).

[3] Travis v. Irby, 326 F.3d 644, 649 (5th Cir. 2003).

[4] Id. at 647.

[5] Frank’s Int’l, LLC v. Nat’l Union Fire Ins. Co. Pittsburg, No. 16-5252-JJB-RLB, 2016 WL 7242565, at *3 (M.D. La. Nov. 15, 2016) (citing Bilyeu v. Wells Fargo Ins. Servs., Inc., No. 16-00023, 2016 WL 5721070, at *4–5 (W.D. La. Sept. 29, 2016)).

[6] Id.

[7] La. Code Civ. Proc. arts. 1871–1883 (2017).

[8] Bilyeu, 2016 WL 5721060, at *5–6.

[9] Frank’s Int’l, 2016 WL 7242565, at *3. Although there is disagreement among Louisiana courts as to which Declaratory Judgment Act—the LDJA or the Federal Declaratory Judgment Act—should be applied in such cases, both Acts render the same result. Cf Bilyeu, 2016 WL 5721070 with Phoenix Expl. Co. v. Am. Int’l Specialty Lines Ins. Co., 2017 WL 3159013, at *3 n.10 (W.D. La. May 23, 2017).

[10] La. Code Civ. Proc. art. 1880 (emphasis added).

[11] Id.; Bilyeu, 2016 WL 5721060, at *5–6.

[12] Declaratory Judgment, Black’s Law Dictionary (10th ed. 2014).

[13] Phoenix, 2017 WL 7242565, at *3) (stating that the defendant’s motion for summary judgment seeking to declare the defendant not liable to the plaintiff “establishes a reasonable basis for recovery against the defendant based on the plaintiff’s declaratory judgment claim.”).

[14] Alfred Miller Constr. Co. v. Carboline Co., No 13-00084, 2013 WL 4538901, at *4 n.7 (W.D. La. Aug. 26, 2013).