Flagg v. City of Detroit, case No. 05-74253 (E.D. Mich. August 22, 2008)

In this case, the plaintiff was seeking text messages relating to its allegations that the City of Detroit avoided and delayed investigating a murder. Plaintiff issued 2 subpoenas to Skytel, the company that the City had contracted with for text messaging services for its employees. The subpoenas sought all text messages sent or received by 34 individuals, including the individual defendants, over a period of five years, and all text messages sent or received by any city official or employee during a four hour time period. The court denied defendants’ motion to quash on relevancy grounds and ordered two Magistrate Judges to review the text messages for relevancy. This opinion was discussed here. Skytel has now moved to quash under the Stored Communications Act (the “SCA”), 18 U.S.C. § 2701 et seq.

Judge Gerald E. Rosen both distinguished the holding in Quon v. Arch Wireless Operating Co., Case No. 07-55282 (9th Cir. June 18, 2008), discussed here, and rejected it. In so doing, the court raised some important issues relating to access to public records, explained how the defendant City had “control” over the text messages, and perhaps sounded the death knell for the Quon decision a mere three months after it was rendered.

The court characterized the question as whether the services provided by Skytel were electronic communication services (“ECS”), (defined as "any service which provides to users thereof the ability to send or receive wire or electronic communications." 18 U.S.C. § 2510(15)) or "remote computing services" ("RCS"), (which is defined as "the provision to the public of computer storage or processing services by means of an electronic communications system." 18 U.S.C. § 2711(2)). The distinction is important. There are different criteria for establishing an exception to the general rule against disclosure. The provider of an RCS may divulge the contents of a communication with the "lawful consent" of the subscriber to the service, while the provider of an ECS may divulge such a communication only with the "lawful consent of the originator or an addressee or intended recipient of such communication." 18 U.S.C. § 2702(b)(3).

The court noted that the Sixth Circuit and other courts have held that documents are deemed to be within the "control" of a party if it "has the legal right to obtain the documents on demand." In re Bankers Trust Co., 61 F.3d 465, 469 (6th Cir.1995). The courts have also found that a corporate party may be deemed to have control over documents in the possession of one of its officers or employees.

In Riddell Sports Inc. v. Brooks, 158 F.R.D. 555, 558 (S.D.N.Y.1994), for example, the defendant sought to compel the production of tape recordings of his telephone conversations with an officer of the plaintiff corporation, Mr. Wingo, who had not been named a party to the suit. The plaintiff argued that these tapes belonged to Wingo, and not the corporation, "and therefore should have been sought by subpoena served on him personally." The court disagreed, explaining that when materials are "created in connection with the officer's functions as a corporate employee, the corporation has a proprietary interest in them and the officer has a fiduciary duty to turn them over on demand."

Slip Opinion at 17.

The court observed that this principle extends to materials that the officer or employee has a legal right to obtain. The court cited Herbst v. Able, 63 F.R.D. 135, 136 (S.D.N.Y.1972), where the plaintiffs had sought production of transcripts of testimony given by non-party employees of the defendant corporation, Douglas Aircraft Company, at a private hearing before the Securities and Exchange Commission. Douglas Aircraft objected to this request, but under the SEC rules, a witness was entitled to a transcript of his or her own testimony. In light of this rule, the court held that the plaintiffs were entitled to the requested transcripts, which Douglas Aircraft could obtain through its employees. Thus, the Flagg court concluded, the City has control over its employees’ text messages.

The court also found that the City has control over the SkyTel text messages in light of the Michigan law governing the maintenance and disclosure of public records. Michigan's Freedom of Information Act ("FOIA") mandates that a "public body shall furnish a requesting person a reasonable opportunity for inspection and examination of its public records." Mich. Comp. Laws § 15.233(3). The City is a "public body" under the FOIA and at least some of the SkyTel text messages satisfy the statutory definition of "public records," insofar as they capture communications among City officials or employees "in the performance of an official function." The City clearly has a legal right to obtain these records as necessary to discharge its statutory duty of disclosure. The Michigan case law holds that the FOIA duty of disclosure, like the Rule 34 duty of production, extends to public records within the possession or control of a public body. See MacKenzie v. Wales Township, 247 Mich.App. 124, 635 N.W.2d 335, 339 (2001); Easley v. University of Michigan, 178 Mich.App. 723, 444 N.W.2d 820, 822 (1989).

Given the indicia of control, the Court found that the text messages maintained by SkyTel would be an appropriate subject of a Rule 34 request for production directed at the Defendant City of Detroit. Plaintiff would be entitled to review any and all relevant, nonprivileged communications, absent some basis for concluding that these communications are beyond the reach of civil discovery. The question was whether the SCA erects such a bar to the production of any text messages preserved by SkyTel.

The court noted that SkyTel cannot produce any communications without the "lawful consent" called for under § 2702(b)(3). The consent that is needed to satisfy § 2702(b)(3) depends upon the sort of service being provided. If this service is deemed to be an RCS, then the consent of the "subscriber" is sufficient to permit the service provider to divulge the contents of a communication maintained on this service. 18 U.S.C. § 2702(b)(3). In contrast, if a service is determined to be an ECS, then only the "lawful consent of the originator or an addressee or intended recipient" of a communication will suffice to overcome the prohibition against divulging this communication. 18 U.S.C. § 2702(b)(3).

In Quon, Arch Wireless had moved for summary judgment on the plaintiffs' SCA claim, arguing that the service it provided was an RCS and that the city, by requesting the disclosure of text messages maintained on this service, had provided the subscriber with the consent necessary to permit these disclosures without violating the prohibitions set forth in § 2702(a). The district court initially observed that Arch Wireless appeared to have provided a "computer storage" service that was characteristic of an RCS, as the messages it had provided to the city were retrieved from long-term storage after already having been delivered and read by their recipients. Nonetheless, the court acknowledged, the maintenance of the text message in storage was not enough, standing alone, to distinguish an RCS from an ECS, because the SCA expressly contemplates that an ECS also entails the "electronic storage" of communications.

The district court construed the SCA and its legislative history as eschewing an "all or nothing" approach to characterizing a service provider's activities, instead of recognizing that a service provider such as Arch Wireless could provide both RCSs and ECSs to a single customer. Thus, the key question was whether Arch Wireless's retrieval of text messages from storage after they had been transmitted and read by their recipients—should be deemed to be an RCS or an ECS. This required the court to distinguish between the "electronic storage" utilized by an ECS and the "computer storage" provided by an RCS. As to the former, the statute defines "electronic storage" as "any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof," or "any storage of such communication by an electronic communication service for purposes of backup protection of such communication." 18 U.S.C. § 2510(17). Because the text messages that Arch Wireless had retrieved from storage and forwarded to the city had already been transmitted and read in the past, their continued storage could not be construed as "temporary" or "incidental to" their transmission. Rather, the district court reasoned that the characterization of Arch Wireless's service as an ECS or an RCS turned upon whether the text messages had been stored "for purposes of backup protection."

The court concluded that this was not the purpose for which Arch Wireless had stored the text messages which were subsequently provided to the city. The court relied principally on the Ninth Circuit's observation in an earlier case that a service does not store messages "for backup purposes" if it is "the only place a user stores his messages." The Ninth Circuit disagreed, reversing the district court's ruling, and holding that "Arch Wireless provided an 'electronic communication service' to the City." Quon, 529 F.3d at 903. That decision rested on the "all-or-nothing" approach rejected by the district court. The Ninth Circuit broadly categorized Arch Wireless as providing a service for sending and receiving electronic communications, as opposed to a "computer storage" service. 529 F.3d at 901. While the court recognized that Arch Wireless did "archiv[e] ... text messages on its server," it noted that both ECSs and RCSs entail some form of "storage," and it found that Arch Wireless did not provide the "virtual filing cabinet" function that was cited in the legislative history of the SCA as characteristic of an RCS. 529 F.3d at 901-02.

The Ninth Circuit explained its Theofel decision, and that this prior ruling, properly understood, actually led to the opposite conclusion. In Quon, the court observed that Theofel had held that an internet service provider ("ISP") had stored e-mail messages on its server "for purposes of backup protection," since "[a]n obvious purpose for storing a message on an ISP's server after delivery is to provide a second copy of the message in the event that the user needs to download it again—if, for example, the message is accidentally erased from the user's own computer." Theofel, 359 F.3d at 1075. The court in Quon found that this ruling governed the case before it, where "[t]he service provided by [the ISP in Theofel] is closely analogous to Arch Wireless's storage of [the plaintiffs'] messages," and where it was "clear that the messages were archived for 'backup protection,' just as they were in Theofel." Quon, 359 F.3d at 902.

The Flagg court rejected this analysis. First, the Court read the Ninth Circuit's decision in that case as resting on a unitary approach, under which service providers contract with their customers to provide either an ECS or an RCS, but not both. “Yet, the prohibitions against disclosure set forth in § 2702(a) focus on the specific type of service being provided (an ECS or an RCS) with regard to a particular communication, and do not turn upon the classification of the service provider or on broad notions of the service that this entity generally or predominantly provides.” Slip Opinion at 37.

A key fact here was that the contract between the City and Skytel had terminated in 2004. Thus, the court characterized the continued storage of the City’s text messages as an archival service. Thus, the ECS/RCS inquiry turns upon the characterization of the service that SkyTel presently provides to the City, pursuant to which the company is being called upon to retrieve text messages from an archive of communications sent and received by City employees years ago. The resolution of this issue, in turn, depends upon whether SkyTel has maintained this archive "for purposes of backup protection," so that its contents may be deemed to be held in "electronic storage" by an ECS, or whether this archive is more properly viewed as "computer storage" offered by an RCS.

Because SkyTel is no longer providing a text messaging service to the City, any archive of text messages that SkyTel continues to maintain on the City's behalf constitutes the only available record of these communications, and cannot possibly serve as a "backup" copy of communications stored elsewhere. Therefore, the archive maintained by SkyTel constitutes "computer storage," and the company's maintenance of this archive on behalf of the City is a "remote computing service" as defined under the SCA. As a result, the City is both able and obligated to give its consent, as a subscriber, to SkyTel's retrieval of text messages so that the City may comply with a Rule 34 request for their production.

Alternatively, the court noted, even if service provided by SkyTel is not an RCS, the City nonetheless has an obligation to secure the requisite consent from its employees that would permit SkyTel to proceed with its retrieval of communications. This is precisely what the courts have held in the Rule 34 case law, including Riddell Sports, 158 F.R.D. at 559, Herbst, 63 F.R.D. at 138, and In re Domestic Air Transportation Antitrust Litigation, 142 F.R.D. at 356. In particular, the court noted, Riddell Sports holds that a corporate party has control over, and thus may be compelled to produce, documents in the possession of one of its officers or employees, and that the officer or employee has a fiduciary duty to turn such materials over to the corporation on demand.

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