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April 23, 2003, 9:00 AM ET, Alert No. 647.
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10th Circuit Rules on Civil Liability for Violation of Wiretap Act

4/22. The U.S. Court of Appeals (10thCir) issued its opinion in Quigley v. Rosenthal, a civil case involving application of the federal wiretap act to the monitoring of cordless telephone conversations, as well as defamation, invasion of privacy by intrusion, and false light invasion of privacy. The case addresses who can be held liable for illegal interception of wire or electronic communications, and when the First Amendment offers protection to those who make use of such intercepted communications.

The Appeals Court affirmed a District Court civil judgment against the Anti-Defamation League (ADL) for violation of the Wiretap Act, when it had not conducted the monitoring, but rather, had conspired with others who recorded the cordless telephone conversations, and then made use of the recordings.

The Appeals Court also rejected the ADL's argument that its use of the recordings was protected by the First Amendment. The Appeals Court distinguished the Supreme Court's recent opinion in Bartnicki v. Vopper, which held that a radio host who disclosed an illegally recorded cell phone conversation was protected by the First Amendment.

Also, while the facts of this case involve cordless phones, the underlying statute regulates the interception of many forms of communication, including wireline phones, cellular phones, and internet communications.

Statute. Congress amended the Wiretap Act in 1994. Among other things, it amended the definitions section to prohibit the recording of cordless telephone conversations. The statute is now codified at 18 U.S.C. § 2510 et seq. Currently, 18 U.S.C. § 2511 provides criminal and civil liability for any person who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication" or who "intentionally discloses, or endeavors to disclose, to any other person the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subsection".

Background. The Court's recitation of the facts of the case is long and sordid. It describes the conduct of two feuding couples who were neighbors in an economically upscale suburb or Denver. It also describes how lawyers in private practice, prosecutors, and an interest group were quick to file a civil complaint, criminal complaint, and hold a press conference, without verifying the underlying facts, and without an understanding a key statute.

While the neighborhood spat arose out of such mundane events as the conduct of pet dogs, one couple, the Aronsons went to ADL with claims of religious and ethnic discrimination by the other couple, the Quigleys. The ADL referred the matter to attorneys in private practice (Lozow and his associate Kornfeld). Lozow advised the Aronsons that their monitoring was legal, and advised that they contact District Attorney's (DA) office, which they did. They also continued to monitor the Quigleys, and deliver copies of recordings to their attorneys, and to an assistant DA.

The Aronsons also met with Lozow, Kritzer (a personal injury lawyer), Kornfeld (Lozow's associate), and an ADL representative. It was agreed that the Aronsons should continue monitoring. They also met a second time with Lozow, Kritzer, Kornfeld, and a second ADL representative. The Aronsons then entered into a contingent fee agreement with Lozow and Kritzer.

In December of 1994 (after the amendments to the Wiretap Act had taken effect) Lozow and Kritzer filed a civil complaint on behalf of the Aronsons and against the Quigleys that quoted from the monitored phone conversations. The complaint alleged ethnic discrimination in violation of Colorado law, violations of 42 U.S.C. §§ 1982 and 1985, and other claims. Then, Rosenthal (the head of ADL Denver office, and a defendant in the present action) and Kritzer and Lozow (the attorneys for the Aronsons) held press conference.

Also, latter in December of 1994, the DA's office filed criminal charges against Quigleys alleging ethnic intimidation, conspiracy to commit ethnic intimidation, and felony vehicular assault.

The Aronson's civil lawsuit, the criminal prosecution, and the associated publicity caused harm to the Quigleys.

The Quigleys brought various claims via counterclaim and complaints, against Aronsons, their attorneys, the ADL and its attorneys, and DA's office. The DA's office investigated the criminal charges, which neither the Sheriffs Office, the ADL, nor the Aronsons' attorneys had done. It dismissed the criminal charges, and apologized in writing to the Quigleys. It wrote that it was not aware of any evidence proving that the Quigleys violated Colorado's laws against ethnic intimidation.

Lozow and Kritzer also settled with the Quigleys, which included paying them money. The ADL paid their insurance deductibles. However, neither the ADL, nor Rosenthal, settled. Charges against them proceeded to trial.

District Court. There was much litigation over many years. In the present action, the Quigleys filed a complaint in U.S. District Court (DColo) against Rosenthal and the ADL alleging violation of the wiretap act, defamation, invasion of privacy, and other claims.

The jury found in favor of the Quigleys on several claims, including defamation against Rosenthal and the ADL based on statements made by Rosenthal during a press conference and media appearance; false light invasion of privacy against Rosenthal and the ADL; invasion of privacy by intrusion against the ADL based on the interception and/or use of private phone calls by an ADL representative, Lozow, and/or Kritzer, acting as the ADL's agents or co-conspirators; and violation of the federal wiretap act against the ADL based agency or co-conspiracy.

The jury awarded Mr. Quigley damages: $900,000 in economic damages; $100,000 in non-economic damages; state law punitive damages of $500,000 against Rosenthal and $250,000 against the ADL; and federal law punitive damages of $5,000,000 against the ADL. The jury awarded Mrs. Quigley damages: $500,000 in non-economic damages; state law punitive damages of $500,000 against Rosenthal and $250,000 against the ADL; and federal law punitive damages of $2,500,000 against the ADL. The District Court made some reductions in the damages awards, and entered judgment. This appeal followed.

Court of Appeals. The Appeals Court largely upheld the District Court. It reversed the judgment on the invasion of privacy by intrusion and false light invasion of privacy claims. It affirmed the judgment on the other claims, and affirmed the damages awards in full.

Much of the Appeals Court's opinion addresses non technology related issues, such as the standard for proving defamation where the defamatory statements are asserted to be of "public concern". The Appeals Court held that the statements were a "private", not a "public concern".

The ADL argued that the District Court erred in instructing the jury that the ADL could be found liable on plaintiffs' federal wiretap claims for having conspired with attorneys Lozow and Kritzer (the Aronsons' attorneys). The Appeals Court rejected this argument, in part because the ADL did not raise this in the trial court, but also because it found that "the ADL has failed to cite any case that holds that a person or entity cannot violate the federal wiretap act by joining with others in a conspiracy. In contrast, plaintiffs have cited a handful of cases that at least suggest or imply that it is possible for a person or entity to violate the federal wiretap act by conspiring with others." (Citations omitted.)

The ADL also raised the issue of agency on appeal. The District Court's judgment was based upon a finding that there was a principal agent relationship between the ADL and the Aronsons' attorneys. The ADL challenged both the jury instructions, and whether there were sufficient facts to submit the issue to the jury. The Appeals Court found no error in the jury instructions, and that it was appropriate to submit the factual issue of whether there was a principal agent relationship to the jury. The Appeals Court noted that the ADL had paid the insurance deductable for the Aronsons' attorneys when they settled with Quigleys, and evidence that these attorneys served the interests of the ADL, rather than the Aronsons.

Finally, the Appeals Court addressed the interaction of the wiretap act and the First Amendment's free speech clause. The ADL argued that its use of the recorded conversations was protected by the First Amendment, relying on Bartnicki v. Vopper, 532 U.S. 514 (2001).

In that case, the Supreme Court held that a radio host cannot be sued for playing an audio recording of a cellular telephone conversation, despite the federal wiretap act, which made illegal both the interception of the conversation, and its disclosure by the radio host. The majority reasoned that the case pitted statutes banning disclosure of illegally obtained electronic communications against the First Amendment freedom of speech claims of persons with illegally obtained recordings to disclose them if their content pertains to a public issue. In that case, the conversation pertained to ongoing collective bargaining negotiations between a teachers' union and the local school board -- a matter of public interest. See also, TLJ story titled "Supreme Court Diminishes Electronic Privacy", May 21, 2001.

In the present case, the Court of Appeals held that the facts are distinguishable from those in Bartnicki. First, the recorded conversations in the present case were a matter of private, not public, concern. Second, the radio host in Bartnicki accurately portrayed the contents of the recording, while the ADL in the present case did not accurately portray the contents of the conversations. Finally, the radio host played no role in the recording of the conversations, while the ADL knew all along that the recordings were being made.

The interception of cordless, cellular or wireline phone conversations, or electronic communications (without authority) is clearly illegal. This case, and Bartnicki, address the issue of when third parties who use illegally recorded communications may also be sued. Perhaps these cases stand for the proposition that when illegally obtained communications, that are of public concern, fall into the hands of journalists, who accurately report them, then the First Amendment offers the journalists protection from prosecution or civil liability; however, when lawyers or interest groups are involved in the interception of communications by others, and then selectively and inaccurately use the communications to advance their own interests, the First Amendment offers them no protection.

There is, of course, a huge grey area of potential factual scenarios that lie somewhere between the facts of Bernicki and the present case.

Microsoft to Revise Licensing Terms for Server Operating System Products

4/21. The Antitrust Division of the Department of Justice (DOJ) released a document titled "Microsoft Consent Decree Compliance Advisory" which pertains to revisions made to licenses Microsoft is offering for server software under the terms of the U.S. District Court's (DC) November 12, 2002, Final Judgment. See also, DOJ release.

The advisory states that "Section III.E. of the Final Judgment requires Microsoft to make available for use by third parties on reasonable and non-discriminatory terms certain technology used by Microsoft server operating system products to interoperate with Windows operating system products. Microsoft began to offer this technology for license on or about August 6, 2002."

The advisory continues that the DOJ "has undertaken a careful and thorough review and evaluation of the terms of the licenses offered by Microsoft. As part of that review, the Department has consulted with various parties likely to be interested in the licenses, as well as with Microsoft. The Department has also analyzed complaints regarding Microsoft's compliance with Section III.E. during this time period. In response to comments from the Department and other antitrust enforcement agencies, Microsoft agreed to substantially revise the terms of the licenses that it initially offered on August 6, 2002, as well as to eliminate the non-disclosure agreement covering the terms of those licenses that Microsoft had originally imposed. The revised licenses will be available for review on Microsoft's website within the next several days."

Microsoft stated in a release that as a part of the settlement and final judgment, "Microsoft has made available for license elements of its Windows client/server intellectual property -- called protocols -- to other companies for use in their server products to interoperate with certain Windows clients. The Microsoft Communications Protocol Program (MCPP) was released in August 2002, and several companies have licensed various protocols since that time. ... In the coming weeks, Microsoft will announce and implement an additional set of proposed changes that will further simplify entry to, and participation in, the program."

More News

4/16. Eric Smith, President of the International Intellectual Property Alliance (IIPA), wrote a letter [3 pages in PDF] to U.S. Trade Representative (USTR) Robert Zoellick regarding support for protection of intellectual property rights in trade agreements. He wrote that "it is essential that copyright laws, vigorously enforced, continue to fuel creativity and promote and protect investment. In the ever changing environment in which we operate, a successful initiative will require a multi-pronged strategy: (a) the negotiation of Free Trade Agreements, both bilateral and plurilateral; (b) the aggressive application of U.S. trade laws, like Special 301 and our various unilateral trade preference programs (GSP, CBI, ATPA etc.); and (c) a truly joint effort to work together to secure the implementation by all our trading partners of the all-important WIPO ``Internet´´ Treaties, which provide the critical legal infrastructure for the growth of electronic commerce in copyrighted materials."

4/22. The Center for Democracy and Technology (CDT) sent a letter [7 pages in PDF] to the state of Pennsylvania's Office of the Attorney General (OAG) appealing its denial, in part, of the CDT's request, pursuant to the Pennsylvania Right to Know statute, that the OAG disclose the uniform resource locators (URLs) of internet web sites that the OAG has directed internet service providers (ISPs) to block on the grounds that they contain child pormography in violation of Pennsylvania law. The CDT wrote that "we fully appreciate the potential sensitivity of the requested records, but nevertheless believe that Pennsylvania law gives its citizens the right to know about the specific actions of state officials. Under the relevant case law applicable to the Right to Know statute, the requested documents are public records that cannot be withheld based on any of the enumerated statutory exemptions." The CDT further stated that it wants to "determine what innocent web sites have been blocked."

Wednesday, April 23

8:45 AM - 6:30 PM. The U.S. Chamber of Commerce will host a conference titled "Critical Infrastructure and Homeland Security: Public Policy Implications for Business". See, notice, agenda, and online registration pages. The prices to attend range from $500 to $650. Location: 1615 H Street, NW.

9:00 AM. Day one of a two day meeting of the Department of Commerce's (DOC) Bureau of Industry and Standards' (BIS) Information Systems Technical Advisory Committee (ISTAC). The meeting will be partly open, and partly closed. The agenda includes discussion of ultrawideband technologies. See, notice in the April 3, 2003, Vol. 68, No. 64, at Page 16262. Location: DOC, Hoover Building, Room 3884, 14th Street between Pennsylvania and Constitution Avenues, NW.

9:00 AM - 12:00 NOON. The Council for Excellence in Government (CEG) and the Center for Democracy and Technology (CDT) will host a meeting on federal government agency privacy practices. The participants will include Nuala Kelly (Chief Privacy Officer of the DHS), Kevin Landy (Minority Counsel, Senate Committee on Governmental Affairs), David McClure (CEG), Patricia McGinnis (CEG), Ari Schwartz (CDT), Zoe Strickland (Chief Privacy Officer, USPS), Peter Swire (Ohio State University). For more information contact Ari Schwartz at 202 637 9800 or ari@cdt.org. RSVP to egov@excelgov.org. Location: The Pierce Room, Willard Hotel, 1401 Pennsylvania Ave., NW.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. See, agenda [PDF]. The event will be webcast. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

10:00 AM - 2:00 PM. The the National Industrial Security Program Policy Advisory Committee (NISPPAC) of the Information Security Oversight Office (ISOO) will hold a meeting. The ISOO is responsible for policy oversight of the Government wide security classification system. The NISPPAC was created on January 8, 1993 by Section 103 of Executive Order 12829. For more information, contact ISOO Director William Leonard at 202 219-5250. See, notice in the Federal Register, March 19, 2003, Vol. 68, No. 53, at Pages 13334 - 13335. Location: Room 105, National Archives and Records Administration, 700 Pennsylvania Ave., NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Common Carrier Practice Committee will host a brown bag lunch. The speakers will be the chief and deputies of the FCC's Telecommunications Access Policy Division. For more information, contact Matt Brill at mbrill@fcc.gov. Location: Qwest, 1020 19th St., NW, Suite 700.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding the role of technology in helping consumers and businesses protect the privacy of personal information, including the steps taken to keep their information secure. The FTC stated that "Especially useful are any studies, surveys, research, and empirical data". The FTC will hold a workshop titled "The Consumer Experience" on May 14, and another workshop titled "The Business Experience" on June 4. See, FTC release.

Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for grants under the Technology Opportunities Program (TOP). See, NTIA release and notice in the Federal Register, March 17, 2003, Vol. 68, No. 51, at Pages 12678 - 12683.

Thursday, April 24

9:00 AM. Day two of a two day meeting of the Department of Commerce's (DOC) Bureau of Industry and Standards' (BIS) Information Systems Technical Advisory Committee (ISTAC). The meeting will be partly open, and partly closed. The agenda includes discussion of ultrawideband technologies. See, notice in the April 3, 2003, Vol. 68, No. 64, at Page 16262. Location: DOC, Hoover Building, Room 3884, 14th Street between Pennsylvania and Constitution Avenues, NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in OCC Acquis Inc v. FCC, No. 01-1143. Judges Ginsburg, Henderson and Randolph will preside. Location: 333 Constitution Ave. NW.

9:30 AM. The U.S. International Trade Commission (USITC) will hold a hearing in its economic effects investigation titled "U.S. Singapore Free Trade Agreement: Potential Economywide and Selected Sectoral Effects". This is Inv. No. TA-2104-6. Location: Main Hearing Room, USITC Building, 500 E Street SW.

12:00 NOON - 1:45 PM. The Legislation Committee of the DC Bar Association's Intellectual Property Law Section will host a luncheon program titled "Copyright Legislative Agenda". The speakers will be Robert Kasunic (Copyright Office), Arthur Sackler (International Intellectual Property Institute), Gigi Sohn (Public Knowledge), and Kate Colgan (National Writers Union). The price to attend ranges from $25 to $35. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

12:00 NOON - 1:30 PM. DC Bar Association's Computer and Telecommunications Law and Law Office Management Sections will host a brown bag lunch titled "The E-Mauled: Managing Clients, Confidences, and Communications in the Electronic Age". The speaker will be Jeffrey Berger. The price to attend ranges from $15 to $20. Location: DC Bar Conference Center, 1250 H Street NW, B-1 Level.

2:00 - 4:15 PM. The law firm of McGuire Woods and the Richmond Bar Association will host a panel discussion titled "2003 Antitrust Forum". The panelists will include Deborah Majoras (Deputy Assistant Attorney General, Antitrust Division, Department of Justice), Joe Simons (Director of the Federal Trade Commission's Bureau of Competition), and James Donahue (Vice Chair of the National Association of Attorneys General, Multistate Antitrust Task Force). See, notice. The event is free. For more information, contact Doris Cole at 804 775-7741 or dcole@mcguirewoods.com. Location: Omni Richmond Hotel, 100 South 12th Street, Richmond, VA.

Friday, April 25

8:00 AM - 3:30 PM. The National Science Foundation's (NSF) Advisory Committee for Computer and Information Science and Engineering will hold a meeting. For more information, contact Gwen Blount at 703 292-8900. See, notice in the Federal Register, March 24, 2003, Vol. 68, No. 56, at Page 14264. Location: NSF, 4201 Wilson Blvd., Room 1235, Arlington, VA.

9:00 AM - 4:30 PM. The Federal Communications Commission's (FCC) Consumer Advisory Committee (CAC) will hold a meeting. See, FCC release [PDF] and notice in the Federal Register, April 4, 2003, Vol. 68, No. 65, at Pages 16513 - 16515. Location: FCC, Room TW-C305, 445 12th Street, SW.

9:00 - 10:30 AM. The Center for Progressive Regulation (CPR) will host a program titled "Democracy Dies Behind Closed Doors: The Homeland Security Act and Government Secrecy Initiatives". The speakers will include Rena Steinzor (University of Maryland School of Law), and David Vladeck (Georgetown University Law Center). A CPR notice states that "Credentialed congressional staff and credentialed media are invited to attend. A light breakfast will be served." Location: Room 2247, Rayburn Building.

10:00 AM. The 21st Century Intellectual Property Coalition will meet to discuss U.S. Patent and Trademark Office (USPTO) funding and fees. For more information, contact Dana Colarulli at 202 521-6717 or dana@ipo.org.

Monday April 28

9:00 AM - 5:00 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) program titled "Enforcement". The price to attend ranges from $180 to $250. Location: Wiley Rein & Fielding, 1750 K St., 10th Floor, Washington DC.

12:00 NOON - 1:45 PM. The Trade Secrets Committee of the DC Bar Association's Intellectual Property Law Section will host a luncheon program titled "Enforcement and Protection of Intellectual Property Rights: Federal Prosecution in the Eastern District of Virginia". The speaker will be Jack Hanly, Chief of the Cybercrime Unit in the U.S. Attorneys Office in Alexandria, VA. The price to attend ranges from $25 to $35. For more information, call 202 626-3463. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Day one of a two day convention hosted by the National Association of Regulatory Utility Commissioners (NARUC) and the National Exchange Carriers Association (NECA) titled "Second NARUC/NECA National Summit on Broadband Deployment: Accelerating the Transition". At 8:30 AM, Assistant Secretary of Commerce for Technology Policy Bruce Mehlman is scheduled to speak. At 12:15 PM, FCC Chairman Michael Powell is scheduled to deliver the luncheon keynote address. At 5:00 PM, Sen. Conrad Burns (R-MT) is scheduled to speak. See, agenda [PDF]. The price to attend ranges from $495 to $795. Location: Hyatt Regency Crystal City, 2729 Jefferson Davis Highway, Arlington, VA.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding a proposed set of rules pertaining to "plug and play" cable compatibility. On December 19, 2002, fourteen consumer electronics companies and seven cable operators announced that they have entered into a Memorandum of Understanding (MOU) regarding a national plug and play standard between digital television (DTV) products and digital cable systems. See, document [78 pages in PDF] consisting of the MOU, proposed rules to be promulgated by the FCC, and a letter to FCC Chairman Michael Powell and others. See also, FCC release [MS Word] of January 7 announcing the FNPRM, and notice in the Federal Register, January 16, 2003, Vol. 68, No. 11, at Pages 2278 - 2283. This is CS Docket 97-80, and PP Docket 00-67. For more information, contact Susan Mort in the FCC's Media Bureau at 202 418-7200 or smort@fcc.gov.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding on how to use the reallocated Mobile Satellite Service (MSS) spectrum as well as other bands previously proposed for Advanced Wireless Service (AWS) use, the relocation of the Multipoint Distribution Service (MDS), and additional flexibility for the Unlicensed Personal Communications Service (UPCS) band spectrum. This is ET Docket 00-258 and IB Docket No. 99-81. See, notice in the Federal Register, March 13, 2003, Vol. 68, No. 49, at Pages 12015 - 12020.

Day one of a two day conference titled "2003 Great Lakes Symposium on VLSI". The theme of this year's conference "VLSI in the Nanometer Era". VLSI refers to very large scale integration in microprocessors. See, conference website. Location: Radisson Barcelo Hotel, 2121 P Street NW.

Tuesday, April 29

9:00 AM - 4:00 PM. The Federal Communications Commission's (FCC) E911 Coordination Initiative will hold a meeting. Location: FCC, Commission Meeting Room, 445 12th Street, SW.

12:30 PM. Tom Ridge, Secretary of the Homeland Security, will give a luncheon speech. For reservations call 202 662-7501. Location: National Press Club, 529 14th St. NW, 13th Floor.

Day two of a two day convention hosted by the National Association of Regulatory Utility Commissioners (NARUC) and the National Exchange Carriers Association (NECA) titled "Second NARUC/NECA National Summit on Broadband Deployment: Accelerating the Transition". At 3:30 - 5:00 PM, FCC Commissioners Kathleen Abernathy, Jonathan Adelstein, Michael Copps, and Kevin Martin are scheduled to participate in a roundtable discussion. See, agenda [PDF]. The price to attend ranges from $495 to $795. Location: Hyatt Regency Crystal City, 2729 Jefferson Davis Highway, Arlington, VA.

Day one of a two day convention of the Association for Local Telecommunications Services (ALTS). See, agenda. Location: Hyatt Regency Crystal City, Arlington, VA.

Day two of a two day convention hosted by the National Association of Regulatory Utility Commissioners (NARUC) and the National Exchange Carriers Association (NECA) titled "Second NARUC/NECA National Summit on Broadband Deployment: Accelerating the Transition". See, agenda. The price to attend ranges from $495 to $795. Location: Hyatt Regency Crystal City, 2729 Jefferson Davis Highway, Arlington, VA.

Day two of a two day conference titled "2003 Great Lakes Symposium on VLSI". The theme of this year's conference "VLSI in the Nanometer Era". VLSI refers to very large scale integration in microprocessors. See, conference website. Location: Radisson Barcelo Hotel, 2121 P Street NW.

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