Lopez v. First Union Nat. Bank of Florida

Decision Date21 November 1997
Docket Number97-4238,Nos. 96-4931,s. 96-4931
Citation129 F.3d 1186
Parties11 Fla. L. Weekly Fed. C 760 Patricia Gonzales LOPEZ, Plaintiff-Appellant, v. FIRST UNION NATIONAL BANK OF FLORIDA, Defendant-Appellee. Jose Daniel Ruiz CORONADO, Plaintiff-Appellant, v. BANKATLANTIC BANCORP, INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

Isidoro Rodriguez, Barranquilla, Colombia, S.A., for Lopez.

Montgomery Blair Sibley, Miami, FL, for Lopez and Coronado.

Karen H. Curtis, Alan I. Mishael, Gallwey, Curtis, Vento & Horn, P.A., Miami, FL, for First Union Nat. Bank of Florida.

Eugene E. Stearns, Vicki Lynn Monroe, Bradford Swing, Miami, FL, for Bankatlantic Bancorp, Inc.

Appeals from the United States District Court for the Southern District of Florida.

Before CARNES, Circuit Judge, and KRAVITCH and REAVLEY *, Senior Circuit Judges.

CARNES, Circuit Judge:

These cases, consolidated for purposes of this appeal, arise out of plaintiffs' claims that their banks improperly disclosed information relating to their checking accounts to federal authorities. The complaint in each case was dismissed on the ground that the safe harbor provisions of the Annunzio-Wylie Anti-Money Laundering Act, 31 U.S.C. § 5318(g), immunized the banks from liability. For the reasons set forth below, we reverse the judgments dismissing the complaints on that ground.

I. THE LOPEZ CASE

We will discuss the two cases separately, beginning with the one Patricia Lopez brought against First Union National Bank ("First Union").

A. FACTS AND PROCEDURAL HISTORY

Because this case is before us on appeal from a Federal Rules of Civil Procedure 12(b)(6) dismissal for failure to state a claim, we limit ourselves to the allegations of the complaint, which we are required to accept as true. Those allegations may turn out to be inaccurate, or there may be additional facts which dictate a different result, but for now the factual boundary of this case is marked by the metes and bounds of the complaint.

The FedWire Fund Transfer System is an electronic funds transfer system which permits large dollar fund transfers by computer-to-computer communications between banks. First Union is a bank within the FedWire Fund Transfer System and uses "electronic storage" to maintain the contents of an electronic funds transfer. On September 2, 1993, and November 30, 1993, First Union received an electronic wire transfer of funds for credit to Lopez's account. On both occasions, First Union provided United States law enforcement authorities with access to the contents of those electronic transfers. First Union made these disclosures based solely on the "verbal instructions" of federal law enforcement authorities.

On February 3, 1994, a United States Magistrate Judge issued a seizure warrant directing First Union to freeze Lopez's account and conduct an inventory of it. Pursuant to the seizure warrant, First Union again provided United States law enforcement authorities access to the contents of the electronic funds transfers sent to Lopez that were being held in electronic storage. On June 6, 1995, First Union surrendered the $270,887.20 balance of Lopez's First Union account to the United States. The United States subsequently filed a civil forfeiture case against Lopez, which was resolved by a stipulation that $108,359 of Lopez's account was forfeited to the United States while $162,532.20 was returned to her.

Following the resolution of the civil forfeiture case, Lopez filed suit against First Union asserting claims under the Electronic Communications Privacy Act 18 U.S.C. §§ 2510 et seq. (Counts I and II), the Right to Financial Privacy Act, 12 U.S.C. §§ 3401 et seq., (Count III), and Florida law. (Count IV).

First Union moved to dismiss the complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. The district court granted the motion and dismissed Lopez's complaint with prejudice. The district court's decision to dismiss the complaint was based exclusively on its conclusion that the Annunzio-Wylie Anti-Money Laundering Act, 31 U.S.C. § 5318(g)(3), immunized First Union from liability. This appeal followed.

B. STANDARD OF REVIEW

We review de novo the dismissal of a complaint for failure to state a claim for relief, accepting all allegations in the complaint as true and construing those allegations in the light most favorable to the plaintiff. See Harper v. Thomas, 988 F.2d 101, 103 (11th Cir.1993). A complaint may not be so dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Pataula Elec. Membership Corp. v. Whitworth, 951 F.2d 1238, 1240 (11th Cir.1992) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)).

C. ANALYSIS

As a preliminary matter, we first address First Union's arguments that Lopez's complaint fails to state a claim under either the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510 et seq., ("the ECPA") or the Right to Financial Privacy Act, 12 U.S.C. §§ 3401 et seq., ("the RFPA"). 1 We will then address the additional issue of whether the Annunzio-Wylie Anti-Money Laundering Act, 31 U.S.C. § 5318(g)(3), immunizes First Union from liability.

1. Lopez's Claims Under the ECPA

In 1986, Congress clarified the existence of privacy rights in electronic communications by enacting the ECPA, which provides "protect[ion] against the unauthorized interception of electronic communications." Sen. Rep. No. 99-541 at 3555. Among other things, the ECPA defines the conditions in which an electronic communications service may divulge the contents of electronic communications, see, e.g., 18 U.S.C. § 2702; 18 U.S.C. § 2511, defines the conditions in which the government is entitled to access an individual's electronic communications, see 18 U.S.C. § 2703, and provides a civil cause of action for anyone injured by a violation of the act's substantive provisions, see 18 U.S.C. § 2707.

In counts I and II of her complaint, Lopez alleges that First Union violated her rights under the ECPA. In count I, she specifically alleges that First Union violated 18 U.S.C. § 2702(a)(1), which provides that "a person or entity providing an electronic communication service to the public shall not knowingly divulge to any person or entity the contents of a communication while in electronic storage by that service." The complaint alleges that First Union provided an electronic communication service and that First Union provided the United States access to "the contents of information in electronic storage, including the contents of electronic communications pertaining to ... Lopez."

First Union contends that count I fails to state a viable claim under 18 U.S.C. § 2702(a)(1), because it is not an electronic communication service. We reject that contention which amounts to nothing more than a denial of the allegations in Lopez's complaint. Accepting all allegations in the complaint as true as we are required to do at this stage, we conclude that Count I states a violation of 18 U.S.C. § 2702(a)(1). 2

In count II, Lopez alleges that First Union infringed her rights under the ECPA by violating 18 U.S.C. § 2703 and 18 U.S.C. § 2511(3)(a). Section 2703 defines the conditions in which an electronic communication service may disclose electronic communications to the government. If the electronic communication service has held the contents of an electronic communication in electronic storage for one hundred eighty days or less, it may disclose that electronic communication to the government only pursuant to a federal or state warrant. See 18 U.S.C. § 2703(a). In count II, Lopez alleges that, on the same day funds were electronically transferred to her account, First Union disclosed contents of those electronic funds transfers in electronic storage pursuant to "verbal instructions" instead of a warrant. She also alleges that the disclosures were made on the same day that funds were electronically transferred to her account, which means the communication disclosed had been held in electronic storage for less than one hundred eighty days. Those allegations are sufficient to state a prima facie claim under 18 U.S.C. § 2703.

However, the allegations of count II of the complaint are not sufficient to state a claim under 18 U.S.C. § 2511(3)(a). That section provides that "an electronic communication service ... shall not intentionally divulge the contents of any communication ... while in transmission on that service to any person or entity other than an addressee or intended recipient of such communication." 18 U.S.C. § 2511(3)(a) (emphasis added). That proscription is not violated unless the communication is divulged "while in transmission." Neither count II nor any other part of the complaint alleges that First Union disclosed Lopez's electronic communications "while in transmission." Instead, count II alleges that First Union disclosed the contents of electronic communications held in electronic storage.

Alleging that First Union disclosed a communication held in "electronic storage," which violates § 2702(a)(1), is not equivalent to alleging that First Union disclosed a communication in "transmission," which would violate § 2511(3)(a). Because the complaint does not allege that First Union disclosed communications while in transmission, it fails to state a claim under § 2511(3)(a).

2. Lopez's Claim Under the RFPA

In United States v. Miller, 425 U.S. 435, 443, 96 S.Ct. 1619, 1623, 48 L.Ed.2d 71 (1976), the Supreme Court held that individuals have no Fourth Amendment expectation of privacy in their financial records while those records are in the hands of third parties. That decision prompted Congress to enact the Right to Financial Privacy Act, 12 U.S.C. §§ 3401 et seq., ("the RFPA"), which provides individuals with some privacy rights in financial records that are in the hands of third parties....

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