The Latest Developments in Litigation

• Pages: 24-27
• Date: 01 July 2025
• Published date: 01 July 2025
• Subject Matter: Administrative & Public Law

Published i n Litigation News Volu me 50, Number 4 , Summer 2025. © 2 025 by the Americ an Bar Associa tion. Reprodu ced with permiss ion. All rights r eserved. Thi s information or any p ortion

thereof may not b e copied or dis seminated in a ny form or by any mea ns or stored in a n electroni c database or r etrieval syst em without the ex press writt en consent of th e American B ar Associa tion.

Cell Phone Passcode

Ruling Deepens Fifth

Amendment Rift

By C. Michae l Judd, Litigation News

Associate Editor

In State of Utah v. Valdez, one state

supreme court concluded the Fifth

Amendment guards against a demand

by law enforcement to verbally pro-

vide a cell phone passcode. Some

court watchers believe that the issue

of “compelled decryption” may soon

head to the U.S. Supreme Court for

resolution. In the meantime, practitio-

ners continue to wrangle with ques-

tions about access to devices and the

near-boundless worlds of information

they hold.

In 2017, Utah police arrested Alfonso

Valdez, seized his cell phone, and

obtained a search warrant for the con-

tents of that phone, believing it may

contain evidence that Valdez had kid-

napped and assaulted an ex-girlfriend.

Unable to crack Valdez’s “nine-dot pat-

tern passcode,” police asked Valdez to

provide it. Valdez said no.

Valdez’s case went to trial, and

prosecutors argued that Valdez’s

refusal—and their resulting inability to

access Valdez’s phone—“undermined

the veracity” of a key defense. When

Valdez appealed his eventual convic-

tion, he argued that he had the right to

refuse to provide his passcode under

the Fifth Amendment.

The Utah Court of Appeals reversed

Valdez’s conviction, and the Utah

Supreme Court armed. It stated that

police who order a suspect to state a

passcode aloud are asking for “infor-

mation from the suspect’s mind.” The

court concluded that “Valdez was

asked to verbally communicate his

passcode to police—a traditional tes-

timonial statement” meriting Fifth

Amendment protection.

The court’s decision relates to “com-

pelled disclosure” of a passcode. But

the court hinted at what may be a

simple work-around for law enforce-

ment: Why can’t investigators simply

“obtain[] an order to compel the sus-

pect to provide an unlocked device”?

In practice, that has already happened.

“Law enforcement has quickly pivoted,”

explains Ferdose al-Taie, Dallas, TX,

Co-Chair of the ABA Litigation Section’s

White Collar & Criminal Litigation

Committee. “Many search warrants

already contain language that allows for

refusal of testimonial communications.”

Valdez also expressly avoids the

question of biometric access. “Many

people would instinctually believe that

biometric access provides better pro-

tection for your data than a passcode.

But from a legal perspective, when the

issue is which of those methods is tes-

timonial, that may not actually be the

case,” al-Taie notes. In any event, ques-

tions of “compelled unlocking” and

biometric access are similarly mired in

state court splits. Further complicating

matters is the “foregone conclusion”

exception to the Fifth Amendment privi-

lege against self-incrimination, on which

high courts in Utah and Massachusetts

have now parted ways. As of today, the

U.S. Supreme Court has not yet taken

an opportunity to resolve those splits.

“Many practitioners, prosecutors and

defense counsel both, would welcome

clarif‌ication on this issue,” al-Taie sug-

gests. “On the privacy-rights side,” al-

Taie explains, “many companies provide

cell phones, and employees store both

company and personal information on

the same device. How much access to

an employee’s cell phone could a com-

pany lawfully give investigators? Many

would love to have a workable standard

to help answer that question.”

The sheer volume of information

on cell phones means that compelled

access issues will arise in myriad types

of cases. “Cell phones contain so much

information,” echoes Benjamin Reese,

Columbus, OH, member of the Litigation

Section and its Young Lawyers Division.

“Device issues appear in almost every

white-collar case. And investigators

often seek this information directly from

the subject of the investigation.”

The State of Utah has asked the U.S.

Supreme Court to use the Valdez case

to provide clarity on device-access

issues. “The Supreme Court could

use the Valdez case as the vehicle

to craft an analytical framework to

address this issue,” explains Katayoun

Donnelly, Denver, CO, Co-Chair of the

Pro Bono & Professional Opportunities

Subcommittee of the Section’s Appellate

Practice Committee. “Such a frame-

work would have to account for the

complexity and rapid advancement of

encryption technologies while balanc-

ing defendants’ constitutional rights

against the government’s public safety

interests,” Donnelly suggests.

Court Rejects

Arbitration Clause

Without Opt-Out

Provision

By Whitney Jackson, Litigation

News Associate Editor

A f‌inancial institution recently learned

what happens when it does not include

language in an arbitration agreement

to permit a customer to opt out of the

arbitration clause. A U.S. district court

denied a motion to compel arbitra-

tion based on the f‌lawed provision,

concluding that it was unenforceable

because the bank failed to give the

customer an opportunity to opt out.

The Court of Appeals for the Second

Circuit armed, concluding that the

consumer did not receive clear notice

that he was bound by the arbitration

provision, as required by applicable law.

ABA Litigation Section leaders applaud

the decision, which they believe illus-

trates the inherent pitfalls in arbitra-

tion clauses that courts perceive to be

unfair to consumers.

In Lipsett v. Popular Bank, Frankie

Lipsett sued Popular Bank in the U.S.

District Court for the Southern District

of New York alleging claims stemming

from a banking arrangement he estab-

lished with the bank starting in 2004.

The bank asserted that it included an

arbitration clause in the 2008, 2013–

2014, and 2021 updates to Lipsett’s

2004 customer account agreement.

Based on the customer agreement,

the bank sought to compel arbitration

by arguing that the account updates

provided to Lipsett provided terms

and conditions incorporating a manda-

tory arbitration clause. The trial court

denied the bank’s motion to compel

because it failed to provide Mr. Lipsett

with a chance to opt out of the arbitra-

tion agreement.

Not to be defeated, the bank

appealed the trial court’s ruling. The

court of appeals upheld the district

SUMMER 2 025 • VOL. 50 NO. 4

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