In Luis v. Zang (No. 14-3601), the Sixth Circuit held that a maker of monitoring software was potentially liable under federal and state Wiretap Acts—not for selling the software, but for saving the intercepted communications on its own servers. The plaintiff claimed that the defendant Awareness Technologies, Inc. markets the WebWatcher brand as allowing customers to create a secret record of the target’s computer activity in “near real-time” on its cloud servers. He alleged that the WebWatcher software was used to illegally intercept his communications, and that Awareness marketed WebWatcher to encourage those illegal uses.

In an opinion by Judge Gilman, a divided panel held that the plaintiff stated a claim under 18 U.S.C. § 2511, 2512 & 2520(a). Following other circuits, it held that an “intercept” under the Wiretap Act must occur “contemporaneously with the transmission” of the communication. WebWatcher met that standard because of its real-time monitoring and ability to capture communications that are not saved by the target. More importantly, the panel held that Awareness was “engaged in” the illegal surveillance under Section 2520 because the captured communications were saved on its own servers. If the software saved the files directly on the customer’s computer, rather than the cloud, it may have avoided application of the Wiretap Act.

In dissent, Judge Batchelder argues that the complaint insufficiently alleges that Awareness itself intercepted any communications under Section 2511. She also argues that WebWatcher does not violate 18 U.S.C. § 2512 because it is consistent with uses requiring “full disclosure, including an employer’s monitoring of its employees or parental monitoring of children.”

This decision may have significant implications for companies that market and support software tools that can be used for illegal purposes.