United States v. China Telecom (Americas) Corporation ( 2022 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 20, 2022 Decided December 20, 2022
No. 21-5215
UNITED STATES OF AMERICA,
APPELLEE
v.
CHINA TELECOM (AMERICAS) CORPORATION,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:20-mc-00116)
Raechel K. Kummer argued the cause for appellant. On
the briefs were Andrew D. Lipman and Russell M. Blau. Clara
Kollm entered an appearance.
Casen Ross, Attorney, U.S. Department of Justice, argued
the cause for appellee. On the brief were Brian M. Boynton,
Principal Deputy Assistant Attorney General, and Sharon
Swingle and Dennis Fan, Attorneys.
Before: HENDERSON and KATSAS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: In a license
revocation proceeding before the Federal Communications
Commission (FCC), the United States sought to admit
classified evidence relating to electronic surveillance it had
conducted against China Telecom (Americas) Corporation
(China Telecom). Pursuant to the Foreign Intelligence
Surveillance Act (FISA), 50 U.S.C. §§ 1801 et seq., the
government filed this petition for a determination that the
electronic surveillance was lawful and that fruits of the
surveillance were admissible in the underlying FCC
proceedings. See id. § 1806(f). After the district court granted
the government’s petition, the FCC revoked China Telecom’s
license in the underlying action and we then denied China
Telecom’s petition for review of the FCC order without relying
on or otherwise considering the classified evidence. See China
Telecom (Ams.) Corp. v. FCC, No. 21-1233 (D.C. Cir. Dec. 20,
2022). Because the government’s petition no longer presents a
live controversy, China Telecom’s appeal from the district
court order is moot. Accordingly, we vacate the district court
order granting the government’s petition and remand to the
district court with instructions to dismiss the case.
I.
We begin with a brief history of the proceedings to
determine the lawfulness of the government’s electronic
surveillance of China Telecom and the admissibility of related
classified evidence in the underlying FCC proceedings.
Because our opinion in China Telecom (Americas) Corp. v.
FCC ably sets forth the history of the FCC proceedings in
which the government intended to use the classified
information at issue, we need not recount it at length here. See
No. 21-1233, Slip Op. at 8–10 (D.C. Cir. Dec. 20, 2022).
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The government’s petition arises from FCC proceedings to
revoke China Telecom’s common-carrier license under section
214 of the Communications Act of 1934, Pub. L. No. 73-416,
§ 214, 48 Stat. 1064, 1071–72 (codified as amended at 47
U.S.C. § 214). See China Telecom, No. 21-1233, Slip Op. at 8–
10 (describing underlying FCC revocation proceedings). In
2020, several federal agencies, including the Department of
Justice (DOJ), jointly recommended that the FCC revoke China
Telecom’s common-carrier license. To support their
recommendation, the agencies provided the FCC with an
exhibit containing classified evidence derived from their
electronic surveillance of China Telecom under FISA, which
statute permits the Executive Branch to conduct electronic
surveillance to obtain foreign intelligence information. See
50 U.S.C. §§ 1801 et seq.
As required by FISA, the DOJ notified China Telecom that
it intended to “enter into evidence or otherwise use or disclose”
classified information in the then-pending FCC proceedings.
50 U.S.C. § 1806(c). In response, China Telecom moved for
disclosure of all FISA-related information in the FCC’s
possession, both to protect China Telecom’s asserted due
process rights and to determine whether there were grounds to
seek suppression of the classified information. The information
sought included materials submitted by the government to
obtain initial authorization to conduct the electronic
surveillance as well as evidence uncovered during the
surveillance.
FISA empowers the federal district court to adjudicate
“issues regarding the legality of FISA-authorized
surveillance,” ACLU Found. of S. Cal. v. Barr, 952 F.2d 457,
470 (D.C. Cir. 1991), including those that arise in
administrative proceedings, see id. at 462. The relevant FISA
provision, 50 U.S.C. § 1806, attempts to balance the nation’s
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interest in national security with the rights of an “aggrieved
person” against whom the government intends to use classified
information. See United States v. Belfield, 692 F.2d 141, 148
(D.C. Cir. 1982). When the government notifies the court of its
intent to use information derived from electronic surveillance
or when an aggrieved person moves “to discover, obtain, or
suppress evidence or information obtained or derived from
electronic surveillance” before an agency adjudicator like the
FCC, “the United States district court in the same district as the
[agency] shall” consider the lawfulness of the surveillance and
determine whether suppression or disclosure is appropriate.
50 U.S.C. § 1806(c), (f). The court reviews the classified
surveillance materials in camera and ex parte “if the Attorney
General files an affidavit under oath that disclosure or an
adversary hearing would harm the national security of the
United States.” Id. § 1806(f).
Because China Telecom opposed the admission in FCC
proceedings of classified materials derived from the
government’s FISA surveillance, the government invoked
section 1806(f) and petitioned the district court for a
determination that the FISA surveillance was lawfully
authorized and conducted. The government included with its
petition the Attorney General’s declaration that disclosure of
the surveillance materials would harm national security, thus
allowing the district court to review the petition ex parte and in
camera pursuant to section 1806(f).
During its ex parte and in camera review, the district court
orders disclosure of classified information in two
circumstances. First, the court “may” order disclosure of
classified information to the aggrieved person “only where
such disclosure is necessary to make an accurate determination
of the legality of the surveillance.” 50 U.S.C. § 1806(f).
Second, on determining that the FISA surveillance “was
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lawfully authorized and conducted,” the court “shall” order
disclosure of classified evidence “to the extent that due process
requires discovery or disclosure.” Id. § 1806(g). After the
government provided notice of its intent to use FISA evidence
under section 1806(c) and initiated the district court’s review
under section 1806(f), China Telecom requested disclosure on
both grounds: first, it argued that disclosure was necessary to
assist the court in determining the lawfulness of the
government’s surveillance, see id. § 1806(f); and second, it
argued that due process required disclosure, see id. § 1806(g).
In the order challenged here, the district court granted the
government’s petition and denied China Telecom’s request for
disclosure. See United States v. China Telecom (Ams.) Corp.,
No. 20-mc-116, 2021 WL 4707612, at *3 (D.D.C. Sept. 2,
2021). China Telecom filed a timely notice of appeal.
Following the district court’s order, the parties returned to
the FCC revocation proceeding and the FCC subsequently
issued a unanimous order revoking and terminating China
Telecom’s section 214 common-carrier license. See China
Telecom (Ams.) Corp., FCC 21-114, 36 FCC Rcd. ---,
2021 WL 5161884, at *1 (Nov. 2, 2021). Although the FCC
considered classified evidence derived from the FISA
surveillance, it expressly stated that the classified evidence was
“not necessary” to support its decision to revoke and terminate
China Telecom’s license. Id. China Telecom then petitioned for
review of the FCC’s revocation order. China Telecom, No. 21-
1233, Slip Op. at 3. We upheld the FCC’s decision to revoke
China Telecom’s license based on the unclassified evidence
alone. See id. at 10.
II.
The district court had subject matter jurisdiction pursuant
to 50 U.S.C. § 1806(f), which gives the federal district court
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exclusive jurisdiction to adjudicate the admissibility and
disclosure of classified materials derived from the FISA
surveillance of an “aggrieved person.” China Telecom tries to
invoke our appellate jurisdiction through a timely notice of
appeal from the district court’s order granting the government’s
petition and denying China Telecom’s request for disclosure.
Our jurisdiction, however, is not clear in light of our
companion decision denying China Telecom’s petition for
review of the FCC’s order. See China Telecom (Ams.) Corp. v.
FCC, No. 21-1233, Slip Op. at 25 (D.C. Cir. Dec. 20, 2022).
There, we upheld the FCC’s revocation order on the merits
based on the unclassified record alone, without considering or
otherwise relying upon the classified materials of which China
Telecom now seeks disclosure. See id. at 3.
“Article III, Section 2 of the Constitution permits federal
courts to adjudicate only actual, ongoing controversies.” J.T. v.
District of Columbia, 983 F.3d 516, 522 (D.C. Cir. 2020)
(quoting McBryde v. Comm’n to Review Cir. Council Conduct,
264 F.3d 52, 55 (D.C. Cir. 2001)); see also Chafin v. Chafin,
568 U.S. 165, 171–72 (2013). The Constitution therefore
prohibits us from deciding a case if “events have so transpired
that the decision will neither presently affect the parties’ rights
nor have a more-than-speculative chance of affecting them in
the future.” Sec’y of Lab., Mine Safety & Health Admin. v. M-
Class Mining, LLC, 1 F.4th 16, 21–22 (D.C. Cir. 2021)
(quoting J.T., 983 F.3d at 522); see also Knox v. Serv. Emps.
Int’l Union, Local 1000, 567 U.S. 298, 307–08 (2012). “The
case must remain live ‘at all stages of review,’” including on
appeal, and “‘not merely at the time the complaint is filed.’”
United Bhd. of Carpenters & Joiners of Am. v. Operative
Plasterers’ & Cement Masons’ Int’l Ass’n of the U.S. & Can.,
721 F.3d 678, 687 (D.C. Cir. 2013) (quoting Steffel v.
Thompson, 415 U.S. 452, 459 n.10 (1974)). Accordingly, we
must dismiss the case “if an event occurs while a case is
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pending on appeal that makes it impossible for the court to
grant ‘any effectual relief whatever’ to a prevailing party.”
Church of Scientology v. United States, 506 U.S. 9, 12 (1992)
(quoting Mills v. Green, 159 U.S. 651, 653 (1895)).
Because this Court upheld the FCC’s underlying
revocation decision without relying on or otherwise
considering the classified evidence, China Telecom’s request
for disclosure of the classified evidence is now moot. See City
of El Paso v. Reynolds, 887 F.2d 1103, 1105–06 (D.C. Cir.
1989) (per curiam) (appeal from order denying discovery
became moot when underlying case for which discovery was
sought was decided on merits); Green v. Nevers, 196 F.3d 627,
632 (6th Cir. 1999) (pending discovery dispute mooted by
disposition of underlying cause of action). The government
petitioned the district court to use classified materials
specifically in support of the FCC’s revocation decision; this
Court ultimately decided the merits without considering these
materials. If the government wishes to use such materials in
another proceeding against China Telecom, the government
must again petition a “United States district court” for a
determination that the FISA surveillance of China Telecom
“was lawfully authorized and conducted,” see 50 U.S.C.
§ 1806(f), at which point the court will adjudicate whether
principles of due process require disclosure, see id. § 1806(g).
Because “there is ‘no pending [administrative proceeding] in
which [the requested materials] can be used,’” Convertino v.
U.S. Dep’t of Just., 684 F.3d 93, 101 (D.C. Cir. 2012) (quoting
City of El Paso, 887 F.2d at 1106), the district court’s order
denying disclosure “no longer poses a risk of continuing legal
consequences,” M-Class Mining, 1 F.4th at 22.
Similarly, China Telecom has no right to challenge the
surveillance materials apart from their use in the FCC
revocation proceeding, which terminated on appeal without
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regard to the classified evidence of which China Telecom seeks
disclosure. Here, the district court’s review of the surveillance
materials was triggered by the government’s notice of its intent
to use the surveillance in a “trial, hearing, or other proceeding
in or before [a] court, department, officer, agency, regulatory
body, or other authority of the United States.” 50 U.S.C.
§ 1806(c). In response, China Telecom principally requests
disclosure pursuant to section 1806(g), asserting a due process
right to discover the classified materials so that it may defend
itself in the underlying FCC proceeding. See id. § 1806(g)
(requiring disclosure of classified surveillance material at issue
in administrative proceedings “to the extent that due process
requires discovery or disclosure”). But this Court’s denial of
China Telecom’s petition for review based solely on the
unclassified record deprived China Telecom of a “personal
stake” in the disclosure of the classified materials. See Lewis v.
Cont’l Bank Corp., 494 U.S. 472, 477 (1990) (quoting Los
Angeles v. Lyons, 461 U.S. 95, 101 (1983)). Any order
requiring the government to disclose classified evidence at
issue in an FCC revocation proceeding would be wholly
ineffectual because the proceedings in which the parties sought
to use that evidence have ended. See Nat’l Black Police Ass’n
v. District of Columbia, 108 F.3d 346, 349 (D.C. Cir. 1997)
(federal courts have no power to “decide questions that cannot
affect the rights of litigants in the case before them” (quoting
Preiser v. Newkirk, 422 U.S. 395, 401 (1975))).
When a case becomes moot on appeal, “[t]he established
practice . . . in the federal system . . . is to reverse or vacate the
judgment below and remand with a direction to dismiss.”
Humane Soc’y of U.S. v. Kempthorne, 527 F.3d 181, 184 (D.C.
Cir. 2008) (quoting Arizonans for Off. Eng. v. Arizona,
520 U.S. 43, 71 (1997) (alteration in original)); see also Clarke
v. United States, 915 F.2d 699, 706 (D.C. Cir. 1990) (en banc)
(citing United States v. Munsingwear, 340 U.S. 36, 39 & n.2
9
(1950)). “Vacatur is in order when,” as now, “mootness occurs
through happenstance—circumstances not attributable to the
parties.” Humane Soc’y, 527 F.3d at 187 (quoting Arizonans,
520 U.S. at 71). This remedy “clears the path for future
relitigation by eliminating a judgment the loser was stopped
from opposing on direct review.” Id. at 185 (quoting Arizonans,
520 U.S. at 71).
Accordingly, in light of our companion decision in China
Telecom (Americas) Corp. v. FCC, No. 21-1233, we vacate the
district court order granting the government’s petition. We
remand to the district court with instructions to dismiss the case
as moot.
So ordered.