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Case law in 2004 in the area of Internet communications has something in common with the hurricane season that recently ended: It has been an unusually active year. Before 2004, decisions interpreting the Electronic Communications Privacy Act of 1986 and related federal statutes were few and far between. Considering the complexity of these statutes, the paucity of case law is not surprising. At least two federal circuit courts have readily acknowledged the difficulties in interpreting these statutes. In fact, the very first decision to attempt to broach the implications of the federal Wiretap Act and the Electronic Communications Privacy Act as they related to Internet communications described this treacherous area of the law as “famous (if not infamous) for its lack of clarity,” in Steve Jackson Games Inc. v. U.S. Secret Service, 36 F.3d 457, 462 (5th Cir., 1994). The U.S. Court of Appeals for the 9th Circuit, in United States v. Smith, 155 F.3d 1051, 1055 (1998), cert. denied, 525 U.S. 1071, subsequently opined that the 5th Circuit in Steve Jackson Games “might have put the matter too mildly . . . indeed, the intersection of the Wiretap Act and the Stored Communications Act is a complex, often convoluted, area of the law.” If two disparate federal courts so candidly admit to how confusing it is to apply these statutory provisions to real-life scenarios, it is not surprising that attorneys have been slow to recognize the presence of issues to litigate when these statutes have been violated. That trend, however, may be coming to an end. So far in 2004, there have been at least three major court decisions issued interpreting under what circumstances someone other than the participants to a computer communication may acquire information pertaining to that communication. Each of these decisions contain rulings and language that carry serious implications on how such information will or will not be revealed to nonparticipants in computer communications in the future. Arguably the most significant of the cases decided this year is United States v. Councilman, 373 F.3d 197. A review of the facts of the case demonstrates the serious struggle between the law and technology. The defendant was the vice president of an online book distributing company, which also provided an e-mail service to some of its book-dealing customers. The defendant allegedly instructed some of his company’s employees to write a computer program that searched all incoming e-mails sent by Amazon.com to any of the customers of the company’s e-mail service. Once such e-mails from Amazon.com were spotted by the computer program, rather than forward them to the place in the company’s computer network where its customers’ “in box” was located, they were redirected to another area of the computer system so the e-mails could be read by employees. This entire process of redirecting Amazon.com’s e-mails intended for the company’s customers was allegedly done to provide the defendant’s company a competitive advantage because the company could see what offers were being made by Amazon.com to the company’s customers before the e-mails actually reached the customers. The court’s decision does not indicate if these e-mails were eventually forwarded to their intended recipients after they were read by employees. The defendant was charged with one count of conspiracy to violate the federal Wiretap Act in that he conspired to intercept and use the contents of these e-mails and caused such e-mails to be transmitted to people other than the intended recipients. Last year, the District Court of Massachusetts granted the defendant’s motion to dismiss the conspiracy count against him in United States v. Councilman, 245 F. Supp2d 319. In June, a three-judge panel of the 1st Circuit upheld the dismissal on appeal, with one judge dissenting. Before explaining the reasons for this dismissal, however, certain key statutory provisions in the Wiretap Act, parts of which were amended when the Electronic Communications Privacy Act was enacted in 1986, must be understood. There is an important distinction to be found in the definitions of “wire communication” and “electronic communication” under federal law. A “wire communication” involves any transfer, involving the human voice, by “the aid of wire, cable or other like connection” including “any electronic storage of such communication,” 18 U.S.C. 2510(1). In contrast, an “electronic communication” involves the transfer of any “signs, signals, writing, images, sound, data, or intelligence of any nature,” basically meaning any transfer of information or data not containing the human voice, 18 U.S.C. 2510(2). The statute defining “electronic communication,” however, significantly omits the reference to electronic storage that appears in the definition of “wire communication.” This omission was critical to the 1st Circuit’s holding in Councilman. The court cited United States v. Hart, 328 F.3d 45, 49 (1st Cir., 2003), for the proposition that when Congress enacts two statutory provisions as closely related as the definitions of “wire communication” and “electronic communication” and omits from the latter a term (such as “electronic storage”) that is contained in the former, “it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” ELECTRONIC STORAGE Looking at the definition of “electronic storage” in 18 U.S.C. 2510(17)(A) reveals that the term includes “any temporary, intermediate storage . . . incidental to the electronic transmission thereof.” Hence, the term electronic storage includes, according to the 1st Circuit, not only the final resting place where the electronic communication is intended to complete its journey from sender to recipient but also any other temporary resting place where an electronic communication may reside in a computer system as it awaits transmission along the wires to its next stop in its journey from sender to recipient. Those who understand how the technology of electronic communication works know an e-mail may make many temporary stops, or “hops,” along the path of transmission from sender to recipient. Turning this legal analysis to the facts of Councilman, both parties stipulated to the fact that the e-mails sent by Amazon.com were intercepted once they had already arrived and were stored within the computer system of defendant’s company. The communications in question simply had not been forwarded yet to the specific area of the company’s computer system where the customers accessed the e-mails. Therefore, the program the defendant had the employees create, the 1st Circuit found, merely accessed these e-mails while they were already sitting in “temporary storage” within the company’s computer system. The computer program merely redirected those e-mails from their originally intended final destination of the portion of the company’s computer system made available to the e-mail customers to another location in the system where employees could read them. What the analysis in Councilman actually came down to, in the simplest of terms, is the question of when is an e-mail considered, literally, “in transit” from sender to recipient and when is it in “electronic storage.” As the 1st Circuit noted in its decision, the government tried to argue that what the defendant did in having the e-mails redirected while sitting in temporary storage in the computer system was intercepting the e-mail while it was in “en route storage.” The government was, in essence, trying to equate such an interception of an electronic communication sitting in temporary storage, awaiting transmission to its final destination, as intercepting the communication “in transit.” The 1st Circuit appreciated the government’s analysis, but took a far more literal interpretation of what it means to intercept an e-mail in transit. The court reminded the parties that the stipulation of facts established that the computer program that rerouted the e-mails in question never “performed functions that affected the e-mails . . . while [they] were in transmission through wires or cables between computers,” implying that unless the communication was intercepted as it was actually traveling from one computer to the next, there could be no violation of the Wiretap Act since the communication was not intercepted in transit. The 1st Circuit, however, did not stop there in limiting its evaluation of the law’s impact on Internet communications to the specific facts of this case. In dicta, it made one more chilling comment that could be a presage of how future decisions evaluate this entire area of law: “We believe that the language of the statute makes clear that Congress meant to give lesser protection to electronic communications.” THE AFTERMATH The Councilman decision immediately received harsh criticism from a number of directions. Stripping the facts of this case from the legal technicalities, it is easy to see the frustration caused by this decision. Assume Federal Express was sending flyers, sealed in envelopes, via the U.S. Postal Service, explaining how their services were far cheaper and more efficient than those offered by the Postal Service. Clearly, the Postal Service would be unable to justify opening these envelopes while they sit in the post office awaiting pickup for delivery to their intended recipients (and, therefore, in “temporary storage”), just so that postal employees could gain information on how a competitor is pricing comparable services. It is difficult for most people to understand how our laws treat e-mail so differently from “snail mail.” Even the 1st Circuit in Councilman empathized with the practical difficulties created by its decision. It noted that the technology to accomplish the redirection of e-mail performed at the defendant’s directions did not exist at the time the applicable federal statutory protections were enacted, but reluctantly observed, “It may well be that the protections of the Wiretap Act have been eviscerated as technology advances.” The 1st Circuit went on to concede that under this very narrow definition of when a communication is considered in transit (and, therefore, not in electronic storage) “few seizures [of electronic communications] will constitute interceptions under [the] Wiretap Act.” A reprieve may be on the horizon. In voting last month to rehear the matter en banc, the circuit vacated the judgment. Oral arguments were scheduled for Dec. 8. Many weather forecasters viewed the excessive hurricane activity of 2004 as simply an aberration and not a trend of patterns to come. Considering the increasingly important role that Internet-related communications play in the daily business and private lives of Americans, it should be safe to assume that the increasing attention given this area of the law by the courts is not an aberration, but a trend that will only dramatically increase. Stephen V. Treglia is an assistant district attorney in Nassau County, N.Y., and chief of the technology crime unit. This article first appeared in the ALM newspaper New York Law Journal .

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