Elliott Schuchardt v. President United States of Ame

• Court: Court of Appeals for the Third Circuit
• Decided: March 2, 2020
• Docket: 19-1366
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________

No. 19-1366 ________________

ELLIOTT J. SCHUCHARDT, individually and doing business as the Schuchardt Law Firm, on behalf of himself and all others similarly situated,

Appellant

v.

PRESIDENT OF THE UNITED STATES OF AMERICA; DIRECTOR OF NATIONAL INTELLIGENCE; DIRECTOR OF THE NATIONAL SECURITY AGENCY AND CHIEF OF THE CENTRAL SECURITY SERVICE; DIRECTOR OF THE FEDERAL BUREAU OF INVESTIGATION

________________

Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil Action No. 2-14-cv-00705) District Judge: Honorable Cathy Bissoon ________________

Argued September 23, 2019

Before: McKEE, AMBRO, and ROTH, Circuit Judges

(Opinion filed: March 2, 2020)

Elliott J. Schuchardt (Argued) 6223 Highland Place Way Suite 201 Knoxville, TN 37919

Counsel for Appellant Joseph H. Hunt Assistant Attorney General Scott W. Brady United States Attorney Joseph F. Busa (Argued) H. Thomas Byron III United States Department of Justice Civil Division, Appellate Staff 7537 950 Pennsylvania Avenue, N.W. Washington, DC 20530

Counsel for Appellees ________________

OPINION* ________________ AMBRO, Circuit Judge

Elliott J. Schuchardt alleges that the bulk data collection programs of the National

Security Agency (“NSA”) under the Foreign Intelligence Surveillance Act (“FISA”), 50

U.S.C. § 1801 et seq., violate the Fourth Amendment because they allow the Government

to intercept, access, monitor, and store all or substantially all U.S. domestic e-mail

without probable cause. Pl.’s App. 138–67. He filed suit in 2014 against the President of

the United States, the Director of National Intelligence, the Director of the NSA, and the

Director of the Federal Bureau of Investigation (“FBI”). After the District Court

dismissed Schuchardt’s suit for lack of facial standing under Federal Rule of Civil

Procedure 12(b)(1), we reversed. See Schuchardt v. President of the U.S. (“Schuchardt

I”), 839 F.3d 336 (3d Cir. 2016).

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. 2 In a facial attack, we review only “the allegations of the complaint and documents

referenced therein and attached thereto, in the light most favorable to the plaintiff.”

Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). However, if the

defendant contests the pleaded jurisdictional facts, “the court must permit the plaintiff to

respond with evidence supporting jurisdiction.” Id. at 177 (citing Int’l Ass’n of

Machinists & Aerospace Workers v. Nw. Airlines, Inc., 673 F.2d 700, 711–12 (3d Cir.

1982)).

On remand, the District Court held that Schuchardt failed to rebut the evidence the

Government submitted to challenge his factual standing. We agree and thus affirm the

District Court’s ruling.

A. Procedural Background

Schuchardt specifically alleged that the NSA operates a program known as PRISM

through which it collects “massive quantities of e-mail and other data created by [U.S.]

citizens” “directly from the servers” of U.S. service providers like Google, Microsoft,

Yahoo, Facebook, Dropbox, and Apple. Pl.’s App. 145. As “a consumer of various

types of electronic communication, storage, and [I]nternet-search services” of those

service providers, id. at 156, Schuchardt further asserted that the Government “obtained

direct access to the servers” of the providers and was “intercepting, accessing, monitoring

and/or storing [his] private communications . . . .” Id. at 145, 156, 158.1

1 The Government argues that this case is about PRISM and not other programs. Gov’t Br. 27–31. That question was never squarely before the District Court. Nor is it before us. The Government did not argue on remand that Schuchardt was not permitted to submit non-PRISM evidence, and in fact itself submitted evidence that goes beyond 3 Schuchardt supplemented his complaint with two categories of exhibits. First, he

submitted reports from the Washington Post and Guardian newspapers about classified

documents leaked by former NSA contractor Edward Snowden, as well as excerpts of the

materials themselves. These exhibits refer to an NSA program engaged in the bulk

collection of domestic e-mail metadata. Id. at 91–131. Several of the documents appear

to be internal NSA slides. One is titled “Dates When PRISM Collection Began For Each

Provider,” and lists dates when several service providers began collection. Another slide,

“New Collection Posture,” includes slogans such as “Exploit it All.” Id. at 109–10.

The second category of documents Schuchardt attached contained affidavits filed

in support of the plaintiffs in Jewel v. NSA, 965 F. Supp. 2d 1090 (N.D. Cal. 2013), a

separate case challenging the NSA’s interception of internet traffic. Id. at 1098. The

affidavits were of former NSA employees William E. Binney, Thomas A. Drake, and J.

Kirk Wiebe, who asserted that after September 11, 2001, the agency developed an

expansive view of its own surveillance authority. Pl.’s App. 186–219. Binney stated that

he was the creator of the technology the Government uses today to conduct large-scale

data collection, and that members of his team told him the Government implemented

intelligence activities after September 11 known as the President’s Surveillance Program

that involved the collection of domestic e-mails without the privacy protections built into

other NSA programs. Id. at 187–88.

PRISM. See Gov’t’s Add. A; Gov’t’s Add. B. Schuchardt correctly points out that his complaint is broad enough to include programs beyond PRISM. Schuchardt Reply 12. 4 The District Court dismissed in 2015 Schuchardt’s complaint for lack of standing.

A Rule 12(b)(1) motion under the Federal Rules of Civil Procedure to dismiss for lack of

subject matter jurisdiction may be treated as either a facial or factual challenge. See

Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977).

The District Court concluded, for facial challenge purposes, that Schuchardt had

“identified no facts from which [it] reasonably might infer that [the plaintiff’s] own

communications have been targeted, seized or stored.” Pl.’s App. 14–24. As noted, we

reversed in 2016 and concluded that his allegations “plausibly stated an injury in fact

personal to” him “as a facial matter.” Schuchardt I, 839 F.3d at 338. Thus we

considered the exhibits Schuchardt submitted and afforded his pleadings the presumption

of truth. Though the Government disputed Schuchardt’s allegations and submitted

evidence, we could not, on a facial attack, consider its submissions. Id. at 346, 352–53.

Finally, we noted that the Government was “free upon remand to make a factual

jurisdictional challenge to Schuchardt’s pleading.” Id. at 353.

On remand, the parties agreed that, rather than engage in discovery as to

jurisdiction, the Government would make an informal information disclosure; if

Schuchardt was not satisfied, he could resume the litigation. The District Court directed

Schuchardt to inform it “whether or not this case w[ould] be dismissed based on the

information provided . . . .” Pl.’s App. 10. Thereafter, Schuchardt did not make any

discovery or extension requests. The Government filed a renewed motion to dismiss, and

Schuchardt filed a response relying on new affidavits from Binney and Wiebe. Id. at 63–

5 66. Schuchardt conceded at oral argument that he did not make any discovery or

extension requests nor ask for a hearing to qualify Binney and Wiebe as experts.

The District Court issued an order in February 2019 dismissing Schuchardt’s case

for lack of standing on a factual challenge. Pl.’s App. 63. It concluded that the

Government showed that it “did not engage in dragnet-type collection activity,” and in

support of that conclusion it incorporated “by reference, as if fully restated, the evidence

and arguments recited in [the Government’s] opening and reply briefs.” Id. at 64.

Moreover, the documents Schuchardt submitted were inadmissible and did not create a

factual dispute as to his standing. The Court went on to state that, “[e]ven permitting all

of [Schuchardt’s] evidence—which . . . [was] restricted to the recent affidavits of []

Binney and Wiebe,” and the documents attached thereto, the Government’s “positions

carry the day.” Id. at 64–65. Schuchardt’s “post remand efforts” were “underwhelming”

and merely amounted to taking the same evidence previously before the District Court

and “filter[ing] it through the mouthpiece of purported experts.” Id. at 65.2

B. Jurisdiction and Standard of Review

The District Court had jurisdiction under 28 U.S.C. § 1331. We have jurisdiction

per 28 U.S.C. § 1291. “When reviewing an order dismissing a claim for lack of subject

matter jurisdiction, we exercise plenary review over legal conclusions and review

findings of fact for clear error.” Adorers of the Blood of Christ v. Fed. Energy Reg.

2 Because it incorporated the Government’s briefs in their entirety, we discuss the evidence and arguments therein as the Court’s own decision. We nonetheless note that the wholesale adoption of one side’s briefs is a practice we discourage. See In re Complaint of Luhr Bros., Inc., 157 F.3d 333, 338 (5th Cir. 1998); Walton v. United Consumers Club, Inc., 786 F.2d 303, 313–14 (7th Cir. 1986). 6 Comm’n, 897 F.3d 187, 193 (3d Cir. 2018) (citation omitted). We review the District

Court’s evidentiary findings for abuse of discretion. “In order to justify reversal, a

district court’s analysis and resulting conclusion must be arbitrary or irrational.” United

States v. Bailey, 840 F.3d 99, 117 (3d Cir. 2016) (citation and quotation marks omitted).3

C. Rule 12(b)(1) Factual Challenge

On a Rule 12(b)(1) factual challenge, the plaintiff has the burden of proof,

Mortensen, 549 F.2d at 891, and the burden of persuasion, Gould Elecs Inc., 220 F.3d at

178. Thus “a 12(b)(1) factual challenge strips the plaintiff of the protections and factual

deference provided under 12(b)(6) review” for a typical motion to dismiss on the merits,

Hartig Drug Co. Inc. v. Senju Pharm. Co. Ltd., 836 F.3d 261, 268 (3d Cir. 2016)

(emphasis added) (citation omitted), and under facial 12(b)(1) review, see CNA v. United

States, 535 F.3d 132, 139 (3d Cir. 2008).

It is true that a “[j]urisdictional finding of genuinely disputed facts is inappropriate

when the jurisdictional issue and substantive issues are so intertwined that the question of

jurisdiction is dependent on the resolution of factual issues going to the merits of an

action.” Davis v. Wells Fargo, 824 F.3d 333, 348 (3d Cir. 2016) (citation omitted).

When a case raises a disputed factual issue that goes both to the merits and jurisdiction,

3 Schuchardt devoted much of his brief to the merits of this case. Schuchardt Br. 43–55. The District Court did not reach the merits, as it dismissed on a Rule 12(b)(1) motion. Accordingly, we do not consider his arguments as to the merits. Schuchardt also cited for the first time in his opening brief to non-record evidence (for example, a statement by a government scientist) that every e-mail sent in the United States goes into a Government database. Schuchardt Br. 22, 38. With rare exceptions not in play here, we will not consider evidence outside the record. See Reed v. Phila. Bethlehem & New England R.R. Co., 939 F.2d 128, 133 (3rd Cir. 1991). 7 district courts must “demand less in the way of jurisdictional proof than would be

appropriate at a trial stage.” Mortensen, 549 F.2d at 892. Although we have not defined

the contours of the “less in the way of jurisdictional proof” standard, we have held that

“[b]ecause at issue in a factual 12(b)(1) motion is the trial court’s jurisdiction[,] its very

power to hear the case[,] there is substantial authority that the trial court is free to weigh

the evidence and satisfy itself as to the existence of its power to hear the case.” Id. at

891. “The form of the inquiry is flexible . . . : ‘As there is no statutory direction for

procedure upon an issue of jurisdiction, the mode of its determination is left to the trial

court.’” Id. at 891 n.16 (quoting Gibbs v. Buck, 307 U.S. 66, 71–72 (1939)).

This is not a case where Schuchardt presented competent evidence that the District

Court discounted or where it weighed competing evidence presented by the Government

and Schuchardt.4 The Court considered the evidence the Government submitted to

challenge Schuchardt’s standing, stated that the burden of proof was on Schuchardt, gave

him an opportunity to be heard, and considered his submissions in detail. On this record,

the Court held that he did not create a dispute of material fact as to his standing. See

CNA, 535 F.3d at 144–46 (affirming dismissal where plaintiffs were heard on the

jurisdictional issue but failed to present evidence creating a factual dispute as to subject

matter jurisdiction). It did not err by considering the admissibility of Schuchardt’s

submission, as required expressly by some Circuits. See McPhail v. Deere & Co., 529

4 This is also not a case where the Government refused to turn over discovery related to its intelligence-gathering activities. Schuchardt made no discovery requests, and the Court did not rule on any applicable national security privileges.

8 F.3d 947, 954 (10th Cir. 2008); Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540,

542 (7th Cir. 2006).

D. The District Court’s Evidentiary Rulings

Thus we turn to the evidentiary rulings of the District Court. It held that the

documents Schuchardt submitted on remand were unauthenticated and contained hearsay,

and that Binney and Wiebe’s opinions did not meet the reliability requirements for

admission of expert testimony. Gov’t’s Add. A 8–9, 25–26; Gov’t’s Add. B 6–7.5 The

Court considered Schuchardt’s lack of evidence in light of the Government’s admissible

submission and concluded that Schuchardt failed to meet his burden of proof.

1. Schuchardt Presented Unauthenticated Documents.

A party seeking to rely on a piece of evidence must offer proof sufficient to

support a finding that the item is what that party claims it to be. Fed. R. Evid. 901(a);

United States v. Browne, 834 F.3d 403, 408 (3d Cir. 2016). That evidence “must itself be

admissible.” In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 285 (3d Cir.

1983). As for the purported NSA slides, Pl.’s App. 108–13, Schuchardt did not explain

what they were, other than describing them as the “Snowden documents,” Gov’t’s Add.

A 8–9, 25–26. The District Court could only speculate about what they were. The origin

and nature of the new documents attached to Binney’s affidavit on remand were equally

dubious. The new documents included maps showing “tap points” where the NSA

5 The Government inaccurately argues that Schuchardt’s opening brief failed to address the evidentiary holdings. Gov’t Br. 23. Schuchardt did argue, if summarily, that the Court understated Binney’s expertise and that he could have authenticated the documents. Schuchardt Br. 30–33. 9 connects into service providers’ networks and slides explaining collection. Pl.’s App.

244–47. Schuchardt argues that Binney and Wiebe authenticated the documents in their

affidavits, Schuchardt Reply 6, because those documents related to programs they created

and worked on, Pl.’s App. 231, and because Binney obtained them from publications,

which in turn allegedly got the documents from Snowden, id. at 232. The Court correctly

rejected this argument because Binney claimed no personal knowledge that the

documents he obtained from the publications were those allegedly misappropriated by

Snowden. Gov’t’s Add. B 6–7. Neither Binney nor Wiebe claimed he created the

documents or to know who did.

Schuchardt’s argument that the Snowden documents were authenticated by the

Government’s admissions that Snowden misappropriated documents also fails. Any

general admissions by Government officials that Snowden stole documents did not

authenticate the specific documents Schuchardt submitted to the Court. See ACLU v.

U.S. Dep’t of State, 878 F. Supp. 2d 215, 224 (D.D.C. 2012). Hence there was no abuse

of discretion in ruling that those documents were not properly authenticated.

2. Schuchardt Presented Evidence Based on Hearsay.

Hearsay is any statement, other than one made by a declarant while testifying at

the trial or hearing, “offer[ed] in evidence to prove the truth of the matter asserted.” Fed.

R. Evid. 801. It is generally inadmissible as evidence. See United States v. Pelullo, 964

F.2d 193, 203 (3d Cir. 1992). The District Court concluded that the NSA slides

“constitute written out-of-court statements regarding PRISM’s operation that

[Schuchardt] offers for the truth of the matters asserted,” and are inadmissible hearsay.

10 Gov’t’s Add. A 26. It reached the same conclusion regarding the new documents

attached to Binney’s affidavit because Binney claimed no personal knowledge of the

documents and obtained them from journalists, who allegedly obtained them from

Snowden, so that “[e]ach link in this chain of custody is . . . predicated on . . . hearsay.”

Gov’t’s Add. B 6–7. As for the newspaper articles and editorials, the Court held that they

too were hearsay. Schuchardt offered no substantial argument why these materials were

subject to a hearsay exception. We accordingly affirm the District Court in barring them.

3. Schuchardt Failed to Qualify His Expert Witnesses.

Federal Rule of Evidence 702 governs the use of expert testimony in federal courts

and imposes three threshold considerations: qualifications, reliability, and fit. See In re

Paoli R.R. Yard PCB Litig., 35 F.3d 717, 741–43 (3d Cir. 1994). An expert witness must

have specialized expertise or knowledge. See id. at 741. Though we construe the

specialized knowledge requirement liberally, “at a minimum, a proffered expert witness

. . . must possess skill or knowledge greater than the average layman . . . .” Waldorf v.

Shuta, 142 F.3d 601, 625 (3d Cir. 1998). District courts perform a screening function,

typically called a Daubert hearing, to ensure that evidence presented is, among other

things, reliable. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 597 (1993). It

is so if “based on the ‘methods and procedures of science’ rather than on ‘subjective

belief or unsupported speculation . . . .’” Paoli, 35 F.3d at 742 (citation omitted). Rule

703 permits experts to rely on hearsay so long as it is of the kind normally employed by

experts in the field. See In re TMI Litig., 193 F.3d 613, 697 (3d Cir. 1999). However,

11 the trial judge must conduct an independent evaluation of the reasonableness of relying

on the type of data underlying the opinion. See Paoli, 35 F.3d at 748.

Binney stated in his affidavit that he “was the primary designer and developer of a

number of programs designed to acquire and analyze very large amounts” of information

from the “Internet” before leaving the NSA in 2001. Pl.’s App. 228–29. He continues to

serve as a consultant to foreign governments on intelligence collection and has testified

before foreign government agencies. Id. at 240. According to Binney, after the

September 11 attacks the NSA’s surveillance program changed to allow indiscriminate

bulk data collection, and the President’s Surveillance Program thereafter involved the

“collection of the full content of domestic e-mail traffic.” Id. at 230. Binney based his

conclusions on “the highly-detailed information contained in the documents leaked by

[Snowden].” Id. at 231. Binney stated that “[t]he documents provided by Mr. Snowden

are the type of data that experts in the intelligence community would typically and

reasonably rely upon . . . .” Id. at 232. Wiebe submitted a two-page affidavit agreeing

with Binney’s assessment based on his review of the same documents. Id. at 249–54.

The District Court concluded that Binney and Wiebe were not qualified to testify

as experts. Neither identified or described the field of “scientific, technical, or other

specialized knowledge” in which he is purportedly an expert. Gov’t Add. B 9. Wiebe

did not discuss the exhibits at all in his affidavit, and Binney did not explain how the

exhibits led him to reach his conclusions. Id. at 9–10. The Court therefore could not

determine whether their conclusions were based on reliable principles and methods. It

also discounted Schuchardt’s argument that the affidavits were admissible under Rule

12 703 based on Binney’s assertion that the Snowden documents are the “type of data that

experts in the intelligence community would typically and reasonably rely upon.” Id. at

10 n.7.6 That assertion provided no basis for the Court to conduct an independent

evaluation into reasonableness. Id. Moreover, Schuchardt did not request a Daubert

hearing or submit evidence regarding Binney and Wiebe’s field of expertise or their

methodologies. Accordingly, the Court did not abuse its discretion in barring their

testimony as experts.

4. The Government’s Evidence

Contrast Schuchardt’s lack of competent evidence against the admissible

submissions by the Government. These included a sworn declaration from Wayne

Murphy, the Director of Operations at the NSA, who was “responsible for . . . managing

the integration and use of the NSA’s global foreign intelligence authorities” and had

“personal knowledge” of the matters alleged in Schuchardt’s complaint. Pl.’s App. 173.

He stated that “[n]either PRISM nor any other NSA intelligence-gathering activity

involves the bulk collection (or storage) of all or substantially all of the e-mail (or other

Internet-based communications) of all U.S. persons.” Id. The District Court credited

those statements and reasoned that Schuchardt could not show that his communications

would have been targeted and collected. Gov’t Add. A 22. The Government also cited

other authorities, such as the Report on the Surveillance Program Operated Pursuant to

Section 702 of the Foreign Intelligence Surveillance Act issued in July 2014 by the

6 The District Court also separately ruled, and we affirm, that Binney and Wiebe could not testify as fact witnesses because they did not claim any personal knowledge of the NSA’s current collection programs. Gov’t’s Add. A 29–31. 13 Privacy and Civil Liberties Oversight Board, as well as case law from other Circuits,

acknowledging the targeted nature of PRISM, see, e.g., United States v. Mohamud, 843

F.3d 420, 440 (9th Cir. 2016).

* * * * *

Because the District Court did not abuse its discretion in concluding that

Schuchardt’s evidence was inadmissible and that the Government’s evidence stood

uncontroverted, we affirm its ruling that Schuchardt lacked factual standing for his suit.