due process

I have written a piece for the Connecticut Law Tribune about four Muslim men alleging they were placed on the no-fly list because they refused to become FBI informants: 

A West Haven man claims he refused to become an FBI informant.

The result, Naveed Shinwari says in court papers, was he was put on the United States no-fly list and was unable to board a flight to take a temporary job in Florida. The Afghani American and practicing Muslim said he lost his expected income from that job and was out $4,000 total in expenses and fees from multiple lost flights. Additionally, Shinwari said he has been unable to visit his wife and other relatives in Afghanistan.

That's all according to his complaint filed in the U.S. District for the Southern District of New York in April. Shinwari and three other plaintiffs allege they are being deprived of due process by being placed on the Transportation Security Administration's no-fly list even though they argue they do not pose a threat to aviation safety.

The case is being prosecuted by the CLEAR Project, which is part of the City University of New York School of Law; the Center for Constitutional Rights; and Debevoise & Plimpton LLP.

Legal experts said that Shinwari's case is likely to be one of many in which plaintiffs go to court to challenge inclusion on the no-fly list. A California federal judge's recent decision requiring the government to remove the name of a Malaysian Muslim architect from all governmental terrorism databases is likely inspiring Shinwari's case, said Sudha Setty, a professor at Western New England University School of Law. Setty's national security research focuses partly on the inability of people to access the court system to address counter-terrorism abuses.

U.S. District Judge William Alsup, of the Northern District of California, ruled in Ibrahim v. Department of Homeland Security that Rabinah Ibrahim was placed on the no-fly list by mistake. An FBI agent filled out the form "in a way exactly opposite from the instructions on the form, a bureaucratic analogy to a surgeon amputating the wrong digit—human errors, yes, but of considerable consequence."

Even though Ibrahim was placed on the no-fly list by error, the derogatory information propagated through "the government's interlocking complex of databases [was] like a bad credit report that will never go away," the judge said.

The positive impact of the Ibrahim decision for "people interested in civil rights and civil liberties" is that those included on the no-fly list now have access to judicial review, Setty said. "That ends up motivating complaints like this one getting filed," she said. "They are looking at the Ibrahim case and saying, 'I can try to get my case heard.'"

Susan Hu, one of Shinwari's attorneys from the Center for Constitutional Rights, said that while a California court does not bind a New York court, "we're hopeful that the [California] decision will be a positive precedent for us."

There have been other challenges to the no-fly list before, Hu said, but what is novel about this case is the ways in which the FBI "exploits the secrecy of the no-fly list" to coerce people into becoming informants. "What we're really asking for this case is for the government to be transparent about its process and to be accountable for its misuse of power," Hu said.

In his lawsuit, Shinwari said he is a lawful permanent resident in the United States, and that in March 2012 he "declined to work as an informant because he believed that it was dangerous, and because it violated his sincerely held personal and religious beliefs."

Shinwari and the other plaintiffs — Muhammad Tanvir, Jameel Algibhah and Awais Sajjad — said people are supposed to be placed on the no-fly list only if there is reasonable suspicion they are known to be or suspected to be terrorists and there is some other "derogatory information" indicating they pose a threat of committing a terrorist act.

But the plaintiffs said the only thing they have done is exercise their constitutional rights.

Shinwari also stated that FBI agents offered to remove him from the no-fly list if he became an informant. But, if he truly posed a threat to aviation safety, there was no way they could actually remove him, he stated. The FBI's New York City press office declined comment.

The U.S. Court of Appeals for the Second Circuit has been a "mixed bag" in terms of plaintiffs getting access to the courts for review of counter-terrorism abuses, Setty said. The Ninth Circuit tends to be more concerned with civil rights and liberties, she said.

Generally, people who have been pressured into becoming informants have not been successful in prosecuting lawsuits on that fact alone, Setty said, because their unwillingness to work as informants is viewed potentially as providing material support to terrorists. But affecting someone's right to travel without due process could be another matter, Setty said.

Richard S. Kay, a constitutional law professor at the University of Connecticut, agreed the Ibrahim case has shown that courts do have jurisdiction over people's placement on the no-fly list and that people are entitled to some form of relief. The question for courts is if there was procedural due process before and after the plaintiffs' liberty to travel was curtailed and what the government's interest was in curtailing that right, Kay said.

The plaintiffs also argued being placed on the no fly list violates their First Amendment rights to freedom of speech, association and religion.

"Many American Muslims, like many other Americans, and many followers of other religions, have sincerely held religious and other objections against becoming informants in their own communities, particularly when they are asked to inform on the communities as a whole rather than specific individuals reasonably suspected of wrongdoing," the plaintiffs said. "Acting as an informant would require them to lie and would interfere with their ability to associate with other members of their communities on their own terms."

Kay said the First Amendment claim "seems a little strained on the face of it" and less compelling than the due process argument.

Shinwari said that in March he was able to get on a commercial flight for the first time in two years. According to court papers, he does not know if he was granted a temporary waiver to travel one time or if he is now removed from the no-fly list.

I'm writing several times a day about products liability for Law.com/The National Law Journal. Occasionally I cross-post a blog I find particularly interesting.

The U.S. Supreme Court disfavored setting individual damages through statistical sampling in Wal-Mart Stores Inc. v. Dukes. But Alexandra Lahav, a University of Connecticut School of Law professor, argues there remains a role for sample trials in mass torts.

"Right now, the way the law is, you couldn't have a mandatory sampling regime" of cases picked by the plaintiffs and cases picked by the defendants and award damages based on the average of verdicts in those cases, Lahav said in an interview.

But academics have argued that the use of sample trials could comport with due process if used to establish a rebuttable presumption of what damages awards should be, said Lahav, who focuses on due process concerns in class actions and mass actions.

"One of the biggest issues facing courts today in civil procedure is the massive influx of cases," Lahav said—whether in the Deepwater Horizon case or litigation over products that have been mass-distributed.

There are problems with winding up mass-torts through accords in which plaintiffs' law firms settle their inventory of cases separately, Lahav said. Some lawyers are better at negotiating than others and can reach better results for their clients.

Then too, defendants sometimes offer more to plaintiffs with lower-value claims to persuade them to settle at the expense of plaintiffs with higher-value claims and greater injuries, Lahav said. Legal ethicists have “expressed the concern that some plaintiffs will be sold out in favor of other plaintiffs," she said.

If there were more transparency to settlements, Lahav said, she would worry less about whether plaintiffs are getting fairly compensated. Inventory settlements "may be perfectly fair,” she said. “They may be fabulous."

And sample trials would allow for plaintiffs to feel they have been heard, she said.

“Everybody else can look at those [sample] cases and see what happens,” Lahav said. “It's almost like a representative or surrogate. [While] they won't get their catharsis of having their very own trial, they'll get to feel that, at least, the defendant was called to account.”

The Arizona Supreme Court has ruled that it doesn't violate due process for a Connecticut law firm to face a legal malpractice lawsuit in that state even though none of the firm's lawyers are licensed to practice in Arizona. Legal experts, however, said there is little chance that facing a lawsuit in another state will lead law firms to stop the practice of issuing opinion letters to out-of-state clients on tax shelters.

I covered the case in a piece for the Connecticut Law Tribune. Here's an excerpt: 

The Arizona Supreme Court has ruled that a Connecticut law firm with no lawyers licensed to practice in Arizona can nevertheless be the target of a malpractice claim from two Grand Canyon State residents. But the ruling is not likely to curtail the practice of law firms writing opinion letters for out-of-state clients in tax matters, according to legal experts.

In exchange for a $50,000 fee, Bridgeport-based Pullman & Comley and partner D. Robert Morris prepared an opinion letter for Arizona plaintiffs Bill and Sue Beverage some 13 years ago. The letter opined that it would be legitimate under federal tax law for the Beverages to take advantage of a tax shelter known as a custom adjustable rate debt structure.

However, the Internal Revenue Service rejected the couple's tax return and their declaration of substantial losses related to the tax shelter. They ended up being assessed $3 million.

In a two-page opinion, Chief Justice Rebecca White Berch affirmed that the Connecticut defendants are subject to Arizona's specific jurisdiction—even though the firm does not have an office in Arizona and does not have any attorneys licensed to practice law there. Pullman & Comley now have to face claims of civil racketeering, fraud, breach of fiduciary duty, conspiracy, professional malpractice and negligent misrepresentation in Arizona.

Adam Chodorow, a professor who teaches tax law at Arizona State University Sandra Day O'Connor College of Law, said the Arizona Supreme Court decision won't cause firms to step away from issuing opinion letters on tax matters. Instead, he thinks firms are going to insert choice-of-forum clauses—which stipulate the court or jurisdiction in which any subsequent legal actions will take place—when they advise out-of-state clients about tax shelters.

"Any firm that wants to can insert a choice-of-forum clause in any contract with a client," Chodorow said, adding that such clauses are typically upheld by the courts. In this case, such a clause might have prevented Pullman from "getting stuck in court in Arizona."

Chodorow also said law firms that issue opinion letters are going to weigh the costs of potentially being sued by an unhappy clients in a far-off state against the benefits of the business they get from issuing opinion letters.

"I guarantee you, if the money is there, and the client base is there, they'll either accept the risk or assert the forum clauses," he said.

Stephen Utz, a professor at the University of Connecticut School of Law who teaches federal tax law and policy, said the case of Beverage v. Pullman & Comley highlights the risks involved in opinion letters.

As far as the IRS is concerned, taxpayers are still subject to tax penalties even if they have an opinion letter from a law firm stating that a certain investment, deduction or other financial maneuver is legal, Utz said.

"Some law firms don't do letters of this kind in order not to disappoint clients and not mislead them that something is going to be great" when it won't, he said.

Other law firms, however, not only give opinions on tax shelters but design them and market shelters, Utz said.

The IRS has made it more difficult for tax lawyers to give advice on tax shelters, Utz said. The agency has specific penalties for "material advisors," which may include lawyers, who don't report to the IRS when clients have consulted them about certain tax shelters, he said.

The penalties were "intended to be intimidating and to persuade some tax practitioners not to do this," Utz said.

Facing lawsuits in out-of-state jurisdictions over tax-shelter legal advice gone wrong is not what will dissuade law firms from doing this kind of legal work, Utz said. But, he added, penalties from the IRS will.