IN RE: UNDER SEAL, NO. 13-4625

Decided: April 16, 2014

The Fourth Circuit held that the district court did not clearly err by holding Lavabit LLC (“Lavabit”) and its owner, Levison, in contempt for their failures to comply with a Pen/Trap Order.

Lavabit and Levison (“Lavabit”) provided email service to around 400,000-plus users, and used the industry-standard Secure Sockets Layer (“SSL”) encryption and decryption method to transmit its data.  Essentially, this encryption method relies on a public key, less important, and a private key, which may compromise the data of all users if a third party gains access.  In 2013, the Government obtained court orders under the Pen/Trap State, 18 U.S.C. §§ 3123–27, and the Stored Communications Act (“SCA”), 18 U.S.C. §§ 2701–12, which required Lavabit to turn over metadata, not email content, on the target account for a criminal investigation.  While meeting with Federal Bureau of Investigation (FBI) agents, Lavabit signaled that he did not plan to comply with the order, but indicated he was “technically capable [of] decrypt[ing] the [target’s] information.”  Thus, the Government secured an order to compel Lavabit’s compliance with the Pen/Trap Order.  This order specifically stated that a failure to comply could result in a criminal contempt of court proceeding against Lavabit.  Nonetheless, Lavabit disregarded the court’s order, ignored the FBI’s requests to confer, and withheld the unencrypted metadata.  After a series of court orders, hearings, failed compliance, and attempted demands to pay for his services; Lavabit allowed a Pen/Trap Device to be installed but failed to provide the encryption keys so that the information was useless to the Government.  Then, Lavabit moved to quash the seizure warrant, which the district court denied, and held a compliance hearing that ordered Lavabit to provide the private keys by August 5.  Again, Lavabit failed to comply.  On August 5, the Government moved for sanctions in the amount of five-thousand-dollars per day against Lavabit and Levinson until they complied.  Finally, after six weeks of data was lost, Lavabit complied.  Now, Lavabit appeals its civil contempt charges with various statutory and constitutional challenges.

Before addressing the appeal, the Fourth Circuit noted that the civil contempt order presented a live controversy because Lavabit and Levison may be sanctioned further for their conduct.  The Court noted that Lavabit’s failure to raise its statutory challenges to the Pen/Trap Order and the SCA in the district court constricted the Fourth Circuit to “reverse only if the newly raised argument establishes ‘fundamental error’ or a denial of fundamental justice.”  Stewart v. Hall, 770 F.2d 1267, 1271 (4th Cir. 1985).  The Court emphasized that forfeiture and waiver rules are critical to maintaining the integrity of courts, avoiding unfair surprise to opponents, preserving finality, and conserving judicial resources.  Holly Hill Farm Corp. v U.S., 447 F.3d 258, 267 (4th Cir. 2006).

The Court refused to rewrite Lavabit’s own statements to create a specific, timely objection that would preserve a claim on appeal, and instead stated that Lavabit’s own statements likely misled the Government, and the district court.  The Court emphasized that Lavabit’s failure to raise his challenges in the district court required that he demonstrate a plain error standard for reversal by this Court.  In re Celotex Corp., 124 F.3d 619, 631 (4th Cir. 1997).  Instead, Lavabit attempted to persuade the Fourth Circuit to craft a new exception; by claiming that the district court and Government induced him to forfeit his challenges; to answer his question of pure law; to sympathize with him because he appeared pro se in the lower court; and to recognize that this case is one of “public concern.”  The Court found none of these arguments persuasive, and reiterated that Lavabit failed to make his most essential argument for plain error.  Therefore, the Court reasoned that Lavabit abandoned that argument as well.  Finally, the Fourth Circuit noted that two independent bases supported the district court’s civil contempt order, which allowed the Court to avoid any constitutional challenges, and uphold the district court.

Full Opinion

Samantha R. Wilder

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