If nothing else, Steven Warshak ran a memorable ad campaign. His “Smiling Bob” commercials on late-night TV featured a normal-looking guy enjoying normal-guy activities such as barbecuing and swimming. The entire time, a large smile remained plastered across his face. The ads explained that Bob is happy because he takes Enzyte, a pill for “natural male enhancement.”

For several years, Warshak profitably sold Enzyte and other herbal supplements through his Cincinnati-based company, Berkeley Premium Nutraceuticals, but the whole operation turned out to be a massive fraud.

For one, the data and doctors cited to prove Enzyte’s efficacy were entirely fictional. Berkeley employees made them up. Additionally, when customers provided credit card numbers for their initial purchases, the company automatically enrolled them in an “auto-ship” program. Through a variety of illicit strategies, the auto-ship plan made it difficult for customers to stop receiving (and paying for) more of the company’s products.

Warshak and his mother, Harriet, who also worked at Berkeley, were convicted of various fraud charges in 2008. Warshak was sentenced to 25 years in prison.

He appealed, and on Dec. 14, 2010, a 6th Circuit panel upheld most of the conviction. More importantly, the court made a landmark pronouncement as part of the 98-page opinion: E-mail stored with commercial Internet service providers (ISP) has the same Fourth Amendment protection and expectation of privacy as phone calls and letters.

That section of the decision stemmed from government investigators’ actions in secretly subpoenaing NuVox, the ISP that stored Warshak’s e-mail. The subpoena gave the government access to 27,000 of Warshak’s e-mails without his knowledge or a search warrant.

“[T]he Fourth Amendment must keep pace with the inexorable march of technological progress, or its guarantees will wither and perish,” wrote Judge Danny Boggs.

United States v. Warshak is the first opinion to flat-out say e-mail may be private and constitutionally privileged, says Theodore Claypoole, a member at Womble Carlyle.

“Up until now, no courts have made that bald a statement,” he says.

Sneaky Subpoena

The court in Warshak argued that personal e-mails stored on an ISP are no less private than letters passing through the U.S. Postal Service or phone calls passing through a telecommunications provider.

“The 6th Circuit recognized that the third party can have access for all sorts of reasons, but that does not defeat reasonable expectation of privacy,” says Susan Freiwald, a professor at the University of San Francisco School of Law, who wrote a law review article cited in the opinion.

For example, telephone companies can listen to people’s phone calls if they need to make sure their service is working, Freiwald says. Knowing that, an individual can still expect his calls to be private in the government’s eyes.

In this case, the defendant didn’t even know his e-mails had been subpoenaed. Claypoole, who chairs his firm’s Privacy and Data Security Team, says the government used a “particularly underhanded and sneaky method” to obtain the e-mails.

But in the wake of the ruling, it will be harder for the government to pull the same move without a search warrant–even outside the 6th Circuit.

“The 6th Circuit isn’t well-known for having outlying views on legal issues, so it’s probably going to be taken pretty seriously,” says Audra Dial, a partner at Kilpatrick Townsend & Stockton. “I would think other circuits would follow suit.”

Warshak is the court’s attempt to bring the Stored Communications Act up to speed with technology. The act states that the government can access ISP-stored e-mails older than 180 days with just an administrative subpoena or court order, but the circuit ruled that provision unconstitutional. As part of their justification, the judges acknowledged that people now use e-mail for largely the same purposes as snail mail.

“People are now able to send sensitive and intimate information, instantaneously, to friends, family, and colleagues half a world away,” Judge Boggs wrote. “Lovers exchange sweet nothings, and businessmen swap ambitious plans, all with the click of a mouse button.”

Broadcast Expectations

Warshak‘s connection to corporate legal departments is somewhat indirect. Most employees should be aware that company e-mail is not private. That general principle has not changed. But this case may add a few wrinkles to the equation.

Claypoole says it’s more important than ever to regularly publicize corporate e-mail policy so that it is utterly unambiguous.

“Broadcast to employees that you do not believe they have a right of privacy in their company e-mail,” he says. “If you’re told it’s not private, than you shouldn’t have an expectation that it’s private.”

Additionally, Warshak could benefit smaller companies that do not host their own e-mail but use third-party services such as Gmail. When investigating such small businesses, it will be harder for the government to go straight to third parties and gain access to company e-mail without a search warrant–like it did against Warshak and Berkeley Premium Nutraceuticals.

“It wouldn’t have been possible for them to come to a company [hosting its own e-mail] and say, ‘We want your e-mail server without a search warrant,’” Dial says. Now, small companies will enjoy that protection as well.