Ameritech Corp. v. McCann

• Decision Date: 12 April 2005
• Docket Number: No. 04-2385.,No. 05-1002.,No. 04-4308.,No. 04-2262.,04-2262.,04-2385.,04-4308.,05-1002.
• Citation: 403 F.3d 908
• Parties: AMERITECH CORPORATION, Plaintiff-Appellant, Cross-Appellee, v. E. Michael McCANN, District Attorney of Milwaukee County, Wisconsin, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

403 F.3d 908

AMERITECH CORPORATION, Plaintiff-Appellant, Cross-Appellee, v. E. Michael McCANN, District Attorney of Milwaukee County, Wisconsin, Defendant-Appellee, Cross-Appellant.

No. 04-2262.

No. 04-2385.

No. 04-4308.

No. 05-1002.

United States Court of Appeals, Seventh Circuit.

Argued December 6, 2004.

Decided April 12, 2005.

Craig A. Knot (argued), Ameritech Corp., Chicago, IL, for Plaintiff-Appellant.

Paul L. Barnett (argued), Office of the Attorney General Wisconsin, Department of Justice, Madison, WI, for Defendants-Appellees.

Before EASTERBROOK, KANNE, and EVANS, Circuit Judges.

EASTERBROOK, Circuit Judge.

Now making its second appearance in this court, this suit presents questions about the meaning and constitutionality of 18 U.S.C. § 2706, part of the Electronic Communications Privacy Act. This section requires any "governmental entity" that demands certain information from phone companies to pay for the expense of its provision. Michael McCann, the District Attorney for Milwaukee County in Wisconsin, has refused to comply with this statute. When Ameritech (a subsidiary of SBC), which provides phone service in Wisconsin and other parts of the Midwest, sued to enforce § 2706, the district judge ruled that the litigation is foreclosed by principles of state sovereign immunity. (District Attorneys in Wisconsin are officers of the state.) We reversed, 297 F.3d 582 (2002), holding that prospective obedience may be compelled under Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). On remand the district court opined that the District Attorney must comply with § 2706 whenever it governs — but the district judge refused to say when it does govern. 308 F.Supp.2d 911 (E.D.Wis.2004). Ameritech has appealed again. Following oral argument we held matters in abeyance until the district court entered a proper judgment, which it had neglected to do. See Buck v. U.S. Digital Communications, Inc., 141 F.3d 710 (7th Cir.1998); American Interinsurance Exchange v. Occidental Fire & Casualty Co., 835 F.2d 157 (7th Cir.1987); Azeez v. Fairman, 795 F.2d 1296, 1297 (7th Cir.1986). A real declaratory judgment and a fresh notice of appeal at last present the case for decision.

The dispute concerns "terminating AMA reports." Unlike cell phone companies, which bill their customers for calls received as well as calls made, landline phone companies bill for outgoing calls only. The network that routes and connects each call "knows" its destination; how else could it connect the call and compute the customer's bill (which may vary by distance between the call's origin and destination)? The system for generating and retaining this information is called "automated message accounting" or AMA. Customers' bills often show this information. Ask a landline phone company such as Ameritech "who placed the calls received by customer X?", however, and it has no easy way to answer, as the computer databases organize all of the information by which customer placed the calls rather than by which customer received them.

AMA information is stored on searchable media, but compiling a report about the origin of calls terminated (= received) at a given number — hence, "terminating AMA report" — takes both human and computer time. Each report for a given number requires an hour or two of employees' time to set up the data-processing request and turn the resulting raw data into a report that non-specialists can follow, plus about 15 minutes of computer time per day covered by the report. These are powerful (and expensive) computers needed to handle a flood of information: Ameritech terminates about 25 million calls daily in Wisconsin alone. Fifteen minutes per recipient per day adds up; when the District Attorney wants a terminating AMA report for one number for one month, he is requisitioning at least seven hours of time on a mainframe computer (potentially as much as 20 hours), plus an hour or two of skilled labor. And Ameritech receives more than 400 requests for terminating AMA reports monthly in the Midwest.

Ameritech wants to be compensated for the expense of producing these reports. The need to pay for services rendered also will induce law-enforcement personnel to be less profligate in their demand for these reports, which at least in Wisconsin they see as free goods. According to Ameritech, § 2706 requires law-enforcement agencies to pay for the information. Here is the statute:

(a) Except as otherwise provided in subsection (c), a governmental entity obtaining the contents of communications, records or other information under section 2702, 2703, or 2704 of this title shall pay to the person or entity assembling or providing such information a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching for, assembling, reproducing, or otherwise providing such information. Such reimbursable costs shall include any costs due to necessary disruption of normal operations of any electronic communication service or remote computing service in which such information may be stored.

(b) The amount of the fee provided by subsection (a) shall be as mutually agreed by the governmental entity and the person or entity providing the information, or, in the absence of agreement, shall be as determined by the court which issued the order for production of such information (or the court before which a criminal prosecution relating to such information would be brought, if no court order was issued for production of the information).

(c) The requirement of subsection (a) of this section does not apply with respect to records or other information maintained by a communications common carrier that relate to telephone toll records and telephone listings obtained under section 2703 of this title. The court may, however, order a payment as described in subsection (a) if the court determines the information required is unusually voluminous in nature or otherwise caused an undue burden on the provider.

Section 2703 in turn provides for governmental access to AMA records. State and federal law-enforcement officials throughout the nation pay routinely. Not so in Wisconsin, where officials have dug in their heels. Since 1986, when § 2706 was enacted, the statute has produced only two litigated cases — one dealt with an allegedly excessive aggregate level of requests by a user willing to pay, see Michigan Bell Telephone Co. v. DEA, 693 F.Supp. 542 (E.D.Mich.1988), and the other is this suit, now in its sixth year, in which the requester is in denial. Public officials in Wisconsin not only refuse to pay but also make a disproportionately high number of demands compared with law-enforcement officials in other states. That Wisconsin's prosecutors treat terminating AMA reports as free doubtless explains this fact, and the volume of demands explains Ameritech's concern about the drain on its resources.

As we've already mentioned, the district court originally dismissed Ameritech's suit on sovereign-immunity grounds, and we remanded for decision on the merits. What followed was peculiar. Although federal courts are supposed to explore all non-constitutional grounds of decision first, to ensure against unnecessary constitutional adjudication, see Jean v. Nelson, 472 U.S. 846, 854, 105 S.Ct. 2992, 86 L.Ed.2d 664 (1985); Horn Farms, Inc. v. Johanns, 397 F.3d 472, 477 (7th Cir.2005), the district judge began with a series of constitutional issues and then refused to address the main statutory question at all — making the rest of its opinion largely, if not wholly, advisory. The upshot was a declaratory judgment that the District Attorney must pay compensation whenever it is due, but not specifying when that might be. Neither side is satisfied with that truism. We shall tackle the issues in the right order, starting with the statute and moving to the Constitution only to the extent necessary in light of the statutory decision.

Logically the first statutory question is the one the district judge refused to address: whether the exemption in § 2706(c) covers terminating AMA reports. If it does, then the case is over. The district judge thought it inappropriate to broach the subject because § 2706(b) calls on the court that required the disclosure to set the amount of compensation. True enough, but this suit is not about the amount of compensation; Ameritech seeks a prospective declaration that will determine the kinds of reports for which compensation is required. That's why, we held in 2002, the litigation comes within Ex parte Young. The district judge refused to address the effect of § 2706(c) because he treated this suit as a quest for money. This repeats the mistake that led to our prior reversal. We see no point in remanding a second time and will resolve the issue ourselves. Given the District Attorney's intransigence, and the fact that subpoenas are issued ex parte, there are obvious gains to resolving the question now instead of hoping that the District Attorney will spontaneously start asking state courts to fix compensation under § 2706(b). (We refer throughout this opinion to "the District Attorney," because one named D.A. is the sole defendant. But that defendant is represented in this court by the Attorney General of Wisconsin, and his position is that of the State as an entity rather than an idiosyncratic view from Milwaukee.)

According to the District Attorney, terminating AMA reports are exempt from compensation because they "relate to" telephone toll records. The reports come from the AMA data that phone companies create and use in the regular course of business, so they must relate to those data. Language cannot be cut into little snippets, however; this phrase takes color from the preceding language: "records or other information maintained by a communications common carrier that relate to telephone toll records". If state officials want "records" — for example, bills and...