U.S. v. Councilman

• Citation: 373 F.3d 197
• Decision Date: 29 June 2004
• Docket Number: No. 03-1383.,03-1383.
• Parties: UNITED STATES of America, Appellant, v. Bradford C. COUNCILMAN, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

373 F.3d 197

UNITED STATES of America, Appellant, v. Bradford C. COUNCILMAN, Defendant, Appellee.

No. 03-1383.

United States Court of Appeals, First Circuit.

Heard December 3, 2003.

Decided June 29, 2004.

Gary S. Katzmann, Assistant United States Attorney, with whom Michael J. Sullivan, United States Attorney, and Richard P. Salgado, Senior Counsel, Computer Crime and Intellectual Property Section, were on brief, for appellant.

Andrew Good, with whom Good & Cormier, was on brief, for appellee.

Before TORRUELLA, Circuit Judge, CYR, Senior Circuit Judge, and LIPEZ, Circuit Judge.

TORRUELLA, Circuit Judge.

The United States appeals from the district court's dismissal of Count One of the Indictment against defendant Bradford C. Councilman ("defendant"). Count One charged defendant with conspiring to engage in conduct prohibited by various provisions of the Wiretap Act, 18 U.S.C. §§ 2510-2522, in violation of 18 U.S.C. § 371. We affirm.

I. Facts

Defendant was Vice-president of Interloc, Inc. ("Interloc"). Interloc's primary business was as an online rare and out-of-print book listing service. As part of its services, Interloc provided certain book dealer customers with an electronic mail ("e-mail") address and acted as the service provider. The dealer was provided with an e-mail account ending in "@Interloc.com".¹

In May 1998, Alibris, a California corporation, acquired Interloc. Defendant was Vice-president, shareholder and employee of Interloc and Alibris. Among defendant's responsibilities was the management of the Internet Service Provider ("ISP") and the book dealer subscription list managed by Interloc.

The parties stipulated to the following facts relevant to the transfer of electronic messages by the Interloc systems. An e-mail message, which is composed using an e-mail program, is transferred from one computer to another on its way to its final destination, the addressee. Building on the principle of store and forward, the message is handed to a Message Transfer Agent ("MTA") which stores the message locally. The message is routed through the network from one MTA to another until it reaches the recipient's mail server, which accepts it and stores it in a location accessible to the recipient. Once the e-mail is accessible to the recipient, final delivery has been completed. The final delivery process places the message into storage in a message store area. Often, a separate Mail Delivery Agent ("MDA") will be required to retrieve the e-mail from the MTA in order to make final delivery.

Interloc's computer facility used a program known as procmail (short for process mail) as its MDA. Procmail operates by scanning and sorting e-mail together with an MTA computer program known as "sendmail."

According to the Indictment, on or about January 1998, defendant directed Interloc employees to write computer code to intercept and copy all incoming communications from Amazon.com to subscriber dealers. The Interloc systems administrator wrote a revision to the mail processing code called procmail.rc ("the procmail"), designed to intercept, copy, and store, all incoming messages from Amazon.com before they were delivered to the members' e-mail, and therefore, before the e-mail was read by the intended recipient. Defendant was charged with using the procmail to intercept thousands of messages. Defendant and other Interloc employees routinely read the e-mails sent to its members seeking to gain a commercial advantage.

The procmail was designed to work only within the confines of Interloc's computer. At all times that MTA sendmail and MDA procmail performed operations affecting the e-mail system, the messages existed in the random access memory (RAM) or in hard disks, or both, within Interloc's computer systems. Each of the e-mails at issue constituted an "electronic communication" within the meaning of 18 U.S.C. § 2510(12).

Count One of the Indictment charged defendant with a violation of 18 U.S.C. § 371 for conspiracy to violate 18 U.S.C. § 2511. Defendant allegedly conspired to intercept the electronic communications, to intentionally disclose the contents of the intercepted communications, in violation of 18 U.S.C. § 2511(1)(a), and to use the contents of the unlawfully obtained electronic communication, in violation of 18 U.S.C. § 2511(1)(c). Finally, the government alleged that defendant had conspired to cause a person to divulge the content of the communications while in transmission to persons other than the addressees of the communications, in violation of 18 U.S.C. § 2511(3)(a).² The object of the conspiracy, according to the government, was to exploit the content of e-mail from Amazon.com, the Internet retailer, to dealers in order to develop a list of books, learn about competitors and attain a commercial advantage for Alibris and Interloc.³

Defendant moved to dismiss the Indictment for failure to state an offense under the Wiretap Act, as the e-mail interceptions at issue were in "electronic storage," as defined in 18 U.S.C. § 2510(17), and could not be intercepted as a matter of law. The district court did not initially grant the motion to dismiss but, upon further briefing by the parties, granted the motion and dismissed Count One. The district court found that the e-mails were in electronic storage and that, therefore, the Wiretap Act could not be violated because the requisite "interception" was lacking. United States v. Councilman, 245 F.Supp.2d 319 (D.Mass.2003).

II. Analysis

A. The Wiretap Act

We review questions of statutory interpretation de novo. See United States v. Jones, 10 F.3d 901, 904 (1st Cir.1993). The issue in this case is whether there was an "intercept" of a communication within the meaning of the Wiretap Act. In cases of statutory construction we begin with the language of the statute. See Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999). We determine the meaning of a word from the context in which it is used. See Holloway v. United States, 526 U.S. 1, 6-7, 119 S.Ct. 966, 143 L.Ed.2d 1 (1999).

The Electronic Communications Privacy Act ("ECPA") amended Title III of the Omnibus Crime Control and Safe Streets Act of 1968, commonly known as the federal wiretap law. See Electronic Communications Privacy Act, Pub.L. No. 99-508, 100 Stat. 1848 (1999). The ECPA was divided into Title I, commonly known as the Wiretap Act, 18 U.S.C. §§ 2510-2522, and Title II, commonly known as the Stored Communications Act, 18 U.S.C. §§ 2701-2711.⁴ The amendments provided for the protection of electronic communications along with oral and wire communications. See S.Rep. No. 99-541, at 11 (1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3565.

We begin our analysis by highlighting the difference between the definitions of "wire communications" and "electronic communications" in the Wiretap Act, mindful that the communications at issue in this appeal are electronic in nature. Under 18 U.S.C. § 2510(1), a

"wire communication" means any aural transfer made in whole or in part through the use of facilities for the transmission of communications by the aid of wire, cable or other like connection between the point of origin and the point of reception furnished or operated by any person engaged in providing or operating such facilities ... and such term includes any electronic storage of such communication....

18 U.S.C. § 2510(1). By comparison, "`electronic communication' means any transfer of signs, signals, writing, images sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system." Id. at § 2510(12). No mention is made of electronic storage of electronic communications. See generally In re Hart, 328 F.3d 45, 49 (1st Cir.2003)( "[W]hen Congress includes a particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.").

"Intercept" is defined as "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4).

The statute that defendant is charged with conspiring to violate, 18 U.S.C. § 2511, provides criminal penalties to be imposed on "any person who — (a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication." 18 U.S.C. § 2511(1)(a).

Relying on the language of the statute and the decisions of our sister circuits, the district court held that Congress did not intend for the Wiretap Act's interception provisions to apply to communication in electronic storage. Councilman, 245 F.Supp.2d at 321. The district court rejected "[t]he Government's position ... that the Wiretap Act applies to interceptions that take place when the message ... is `in transit' or `in process of delivery.'" Id. Relying on the definition of electronic storage, the district court held that no interception can occur while the e-mails are in electronic storage and therefore, without the requisite interception, the Wiretap Act could not be violated.

The scope of electronic communications that can theoretically be intercepted is obviously reduced when the definition does not include electronic storage of such communications, as is the case with wire communications. In addition, electronic storage includes a vast range of possible situations including "(A) any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof...." 18 U.S.C. § 2510(17)(A). The government argues that this section does not necessarily place the e-mails in question in this case outside the interception requirement of 18 U.S.C. § 2511(a).

The particular problem confronted in this case is what has been...