The most significant recent opinion on privacy and the reach of the Stored Communications Act (“SCA”) was issued in August, by Magistrate Judge Paul W. Grimm. In Corsair Special Situations Fund LP v. Engineered Framing Sys. Inc., 2011 WL 3651821 (D. Md. Aug. 17, 2011), Magistrate Grimm addressed whether cell phone records and the contents of text messages are protected from disclosure. After the plaintiff obtained a multi-milliondollar judgment against the defendants, it subpoenaed third-party Internet Service Provider (“ISP”) Verizon Wireless for production of one of the defendant’s “telephone bills, invoices, incoming and outgoing call records, incoming and outgoing text messages, dates of account, [and] invoices” in aid of execution. The defendant moved to quash the subpoena on the ground that it violated her right to privacy.
Although a party generally lacks standing to object to a subpoena to a third party, Magistrate Grimm noted that an exception is made when “the party claims some personal right or privilege in the information sought by the subpoena.” In the case before him, he found that an individual has no “legitimate expectation of privacy in the telephone numbers that are dialed on his or her telephone” With respect to the “bills, invoices, dates of account, and roaming fees,” the court analogized to case law pertaining to privacy rights in bank records, concluding the requested information constitutes “business records of the phone company, and not personal documents in which a customer could have a reasonable expectation of privacy.” Finally, with respect to the contents of the text messages, Magistrate Grimm noted that there was no authority in the Fourth Circuit holding that a party has a protected privacy interest in the contents of text messages sent to or received by the party. He also noted that there was conflicting authority in the Fifth and Eleventh Circuits (i.e., United States v. Finley, 477 F.3d 250, 259 (5th Cir. 2007) (finding expectation of privacy), and United States v. Jones, 149 F. App’x 954, 959 (11th Cir. 2005) (finding no expectation of privacy).
After acknowledging the Supreme Court’s directive in City of Ontario v. Quon, 130 S. Ct. 2619 (2010), that “the contours of a reasonable expectation of privacy within the sphere of digital communications is unresolved within the courts of law and the court of public opinion,” Magistrate Grimm held that the defendant had the burden of showing that she has standing to challenge the production of the text messages.
Ultimately, Magistrate Grimm found that the defendant had not met this burden, and he allowed the subpoena to stand. However, he ordered that the information provided in response to the subpoena could only be used to assist in collecting the judgment, that it was not to be copied or disseminated beyond what was necessary, and that it had to be returned to the defendant or destroyed within 30 days of satisfaction of the judgment.
In another decision allowing access to ISP records, Judge Donna M. Ryu granted a request for expedited discovery of records from ISPs because the petitioner demonstrated that the expedited discovery outweighed the prejudice. Pacific Century Int’l Ltd. v. Does 1-101, 2011 WL 2690142 (N.D. Cal. July 8, 2011). The plaintiff alleged copyright infringement by unidentified defendants who used a peerto- peer file swapping network to download plaintiff’s copyrighted work.
Judge Ryu noted that the defendants “acted under the guise of their Internet Protocol (‘IP’)” addresses rather than their real names, making identification of each defendant by the plaintiffs impossible without the ISP records that identified the IP users’ names and contact details. Judge Ryu also noted that time was of the essence because “[t]ypically, ISPs keep log files of subscriber activities for only limited periods of time before erasing the data.” Although she found that good cause existed to allow the expedited discovery, Judge Ryu placed certain restrictions on the plaintiff and ISPs: (1) only one IP address could be pursued for the pending case; (2) the ISP must preserve all requested information pending a final resolution; (3) the ISP had 30 days to serve the IP address owner/user with notice of the subpoena, and both the ISP and IP user had 30 days after such service was complete to file any motions contesting the subpoena; (4) absent any objections, the ISP should respond to the subpoena within ten days after the period for responding had passed; and (5) to the extent that the ISP wished to recover its production costs, it had to submit a summary of such costs to the court for consideration.
In contrast to Corsair and Pacific Century, United States Bankruptcy Judge Allan L. Gropper denied a German insolvency administrator access to the personal e-mail accounts belonging to the bankrupt party, even though the accounts were stored on the servers of two Internet service providers located in the United States. In re Toft, 453 B.R. 186 (Bankr. S.D.N.Y. July 22, 2011). The debtor, whose debts exceeded 5.6 million Euros, refused to cooperate with the administrator, and his whereabouts were unknown. The German Insolvency Court entered a “Mail Interception Order” authorizing the interception of his postal and electronic mail, and the administrator then filed to have the German order recognized in the United States.
While Judge Gropper agreed that German insolvency proceedings are ordinarily entitled to recognition in the United States and the principle of comity was generally applicable, “[i]t is implicit in the [principle of comity] that deference should be withheld where appropriate to avoid the violation of the laws, public policies, or rights of the citizens of the United States.” The court found that the instant case constituted one of those rare cases in which the relief sought by a Foreign Representative was “manifestly contrary” to the public policy of the United States and thus had to be denied.
Judge Gropper noted that the ex parte request for access to the personal e-mails was an illegal invasion of privacy and that access to stored e-mails on an ISP’s servers is governed by the Stored Communications Act. As such, the ISPs could only release the e-mail communications if there was a search warrant or subpoena issued in the course of a criminal investigation. Since this was a civil matter, and thus no search warrant of criminal subpoena existed, the ISPs could not produce or allow access to the e-mail communications. However, Judge Gropper allowed the German administrator to seek recognition of the German proceeding after providing the notice required by Bankruptcy Rule 2000(q).