E-mail intercept violates wiretap law, First Circuit holds.

Overturning a decision by a three-judge panel, the full First Circuit Court of Appeals ruled, 5-2, that the federal government can prosecute an e-mail service provider that intercepted messages and read them before sending them on to the intended recipients. (United States v. Councilman, 418 F.3d 67 (1st Cir. 2005).)

The defendant, a bookseller who ran an online service listing rare and used books, offered dealers, as part of their subscription, an e-mail address at the bookseller's domain name. The indictment stated that the bookseller's systems administrator altered the company mail account so that messages sent to subscribers from Amazon.com, a competing Internet retailer, would first be copied and sent to an online mailbox that the bookseller could access. He and others read the intercepted messages and allegedly used them for commercial advantage. A grand jury returned an indictment against the bookseller, charging him with conspiracy to violate the Wiretap Act.

The district court dismissed the charge, ruling that the e-mail messages were not covered by the act because they were briefly "stored" on the bookseller's server while on their way to the recipients, and the act does not apply to communications in electronic storage. On appeal, a three-judge panel of the First Circuit, ruling 2-1, agreed.

But the full court reversed, finding that the term "electronic communication" includes e-mail that is in "transient" electronic storage--on its way to the recipient--because the temporary storage is part of the communication process. Had the full court not reversed the decision, e-mail would have been excluded from the Wiretap Act, because it is, by its nature, "stored" at rations intervals along its route of transmission--even if only for a fleeting second.

The case raises interesting technical and legal issues about the Internet, e-mail, and privacy. David McGuire, director of communications for the Center for Democracy & Technology, said that while the case is unique--his organization has "not seen any other e-mail provider trapping messages"--it is still an important victory for privacy. The First Circuit decision "reaffirms that e-mail is subject to protection against government intrusion and against misuse by Internet service providers," he said.

Although his organization is pleased with the decision, McGuire said that major concerns about e-mail privacy remain. For example, so-called Webmail--that is, mail accounts a user gets from services such as Microsoft's Hotmail or Yahoo--is not afforded the same privacy protections as e-mail accounts on a private server, he said. And e-mails stored on a computer are clearly not covered by the Wiretap Act because they are not "in transit."

"There are strange lines drawn in cyberspace that don't have any real meaning but have a profound impact on the level of privacy afforded personal communications," McGuire said. "This is why we have endorsed strengthening privacy rules--because we think that existing ones are insufficient to protect e-mail from undue government incursions."

Andrew Good, a Boston lawyer who represented the bookseller, said the court "contradicted every precedent that confronted this question" in ruling that e-mails have the same privacy protection as telephone calls. He plans to seek U.S. Supreme Court review if his client is convicted.

The wiretap law makes it a crime to intentionally intercept any wire, oral, or electronic communication. Enacted before e-mail and the Internet emerged, it was amended in 1986 by the Electronic Communications Privacy Act (ECPA) to include electronic transmissions. Sen. Patrick Leahy (D-Vt.), one of the authors of the ECPA, had filed an amicus brief on behalf of the government in this case.

Leahy, along with Sen. John Sununu (R-N.H.) and Reps. Chris Cannon (R-Utah) and Jay Inslee (D-Wash.), introduced the E-Mail Privacy Act of 2005 to close the loophole in the law by changing the language of the Wiretap Act to reflect the "ongoing basis during transit" concept.