In a ruling on June 18th, 2008, a panel of the 9th Circuit held that a provider of text messaging services violated the Stored Communications Act by turning over the contents of an employee's text messages to his employer, the Ontario, California Police Department. The panel also ruled that the employer's search of the text messages violated the employee's rights under the Fourth Amendment, as well as the rights of the third-party recipients of the communications. This decision will have a wide-ranging impact, and will influence how employers draft and implement employee monitoring policies in the future.
The facts of the case are relatively straightforward. Jeff Quon, a Sergeant in the Ontario Police Department and member of the city's SWAT team, received a two-way pager from the OPD. Arch Wireless Operating Company Inc. contracted with the Department to provide text-messaging services for the pager.
The Department had no official policy governing the use of the pagers, but a police official stated at a meeting that the Department considered the text messages as equivalent to email and subject to the Department's general computer usage policy. A more informal policy directly governed the actual use of the pagers, however.
Each pager could send and receive 25,000 characters per month, after which the Department had to pay overage charges. The officer in charge of paying the overages would simply collect money from each user for the overage charge connected to their pager. As part of that arrangement, it was understood that the supervising officer would not conduct an audit into the breakdown between work and personal uses of the pagers, as long as the users agreed to pay for the overages.
Sergeant Quon exceeded his character limit several times, and paid the Department for the overages each time. Eventually, however, Chief Lloyd Scharf ordered an audit of several officers' pager use, including Sergeant Quon's, ostensibly to determine whether the 25,000 character limit had caused officers to pay for work-related messages. The Department requested the transcripts of the text messages for each user from Arch Wireless, which the company delivered to a representative of the Department. Officers within the Department, including the Chief, reviewed the transcripts of Sergeant Quon's text messages and found them to contain many personal messages, some of which were sexually explicit. The Chief eventually referred the matter to internal affairs.
Sergeant Quon and several people with whom he communicated using the pager brought suit against Arch Wireless, the City of Ontario, the Ontario Police Department and Chief Scharf alleging that the release and review of the text message transcripts violated the Stored Communications Act and constituted an unreasonable search under the Fourth Amendment. The district court granted the defendants' motion for summary judgment on the SCA claim, but denied summary judgment on the Fourth Amendment issue. After a trial, a jury determined that the search of the text messages was reasonable and absolved the defendants of liability.
On appeal, the 9th Circuit affirmed the decision below in part and reversed in part. The panel disagreed with the lower court's reading of the Stored Communications Act as it applied to Arch Wireless, and, while agreeing with the district court that the plaintiffs had a reasonable expectation of privacy in their text messages, disagreed with the resolution of the Fourth Amendment claim and held that the search of the transcripts was excessive in its scope.
The Stored Communications Act
Congress passed the Stored Communications Act in 1986 as part of the Electronic Communications Privacy Act in order to deter potential privacy breaches that the burgeoning world of electronic communications had begun to enable. The SCA prohibits the release of private communications to certain entities and/or individuals by "providers" of communications services. The SCA's prohibitions vary based on whether the provider is a "remote computing service" (RCS) or an "electronic communication service" (ECS).
An RCS can release private information "with the lawful consent of . . . the subscriber," 18 U.S.C. § 2702(b)(3), while an ECS may only release such information with the consent of "an addressee or intended recipient of such communication." Id. § 2702(b)(1), (b)(3). The OPD was neither an addressee or intended recipient of the text messages, but it was a subscriber. Thus, if Arch Wireless provided remote computing services then its release of the transcipts was lawful, but if it provided electronic communications services, the release violated the SCA.
The lower court, in granting summary judgment for defendants on this issue, determined that Arch Wireless was an RCS, and could thus release the transcripts to the OPD without breaching the SCA's restrictions. The Ninth Circuit panel disagreed.
After examining the SCA's language and the facts of the case, the 9th Circuit determined that Arch wireless was an ECS, and had violated the SCA by delivering the transcripts to its subscriber, the OPD, rather than an addressee or intended recipient of the messages. The SCA defines an ECS as "any service which provides to users thereof the ability to send or receive wire or electronic communications." Id. § 2510(15). The panel examined the text messaging service that Arch Wireless supplied to the OPD and decided that it fit this definition of an ECS since it allowed users of the service to send electronic communications over radiowaves.
Moreover, Arch Wireless did not provide the OPD with "computer storage" or "processing services" that would support it's contention that it was an RCS. The panel acknowledged that Arch Wireless did in fact store messages when it archived previously delivered messages, but pointed out that the SCA contemplated temporary storage incidental to the communication of messages and storage for backup purposes. The panel decided that Arch Wireless' retention of old messages was for backup purposes, held that the district court should have categorized Arch Wireless as an ECS instead of an RCS, and remanded to the district court for entry of judgment in favor of plaintiffs.
The Fourth Amendment
In addition to finding that Arch Wireless violated the SCA, the 9th Circuit also held that the OPD and its officers violated the plaintiffs' Fourth Amendment rights by reviewing the text message transcripts. The court agreed with the district court that plaintiffs had a reasonable expectation of privacy in the content of the text messages, but disagreed with the jury's determination that the search was reasonable.
In finding a reasonable expectation of privacy in the contents of the text messages, the court looked to the OPD's informal policy covering the text messages. Since the department represented that it would not review the text messages if users paid any overage charges in full, the users had a reasonable expectation that the content of those messages would remain private.
The panel recognized that the general policy regarding Internet and computer use in the department stated that users should have no expectation of privacy when using the resources, and also acknowledged that OPD administrators had stated their intent to apply this policy to the use of the pagers. The panel agreed with the district court, however, that the "operational reality" within the department was actually the informal policy since that was the system that the officer in charge of administering the pagers put into place.
Although the plaintiffs had a reasonable expectation of privacy in the content of their text messages, they still had to demonstrate that the search was unreasonable in order to prevail on their Fourth Amendment claim. The 9th Circuit found that the search was reasonable at its inception since its purpose was to explore the efficacy of the 25,000 character limit.
The panel ruled that the search was unreasonable in its scope, however. The court determined that the OPD could have conducted an effective audit of the pager use without reviewing the entire contents of the messages. Because the object of the search was non-investigatory, the review of the entire contents of the messages exceeded the scope of a reasonable search and violated the Fourth Amendment.
This decision puts employers on alert that they should draft and implement clear, effective policies governing the monitoring of employees' electronic communications. By clearly stating an employee's consent to allow an employer to monitor wireless communications through an outside service provider, these sorts of policies will allow third-party telecommunications companies to turn over communications without incurring SCA liability. Moreover, expect to see telecommunications companies include a requirement that employers have broad employee consent to disclosures in their service contracts with private and public enterprises as a further protection.
In addition, it is important for employers to actually put written policies into place and not rely on informal arrangements. While only dealing with the Fourth Amendment in this case, the 9th Circuit's reliance on the "operational reality" of an organization could open the door for employee claims against employers or third-parties based on discrepancies between the day-to-day realities and written policies of a workplace.