3rd Circuit Rules on Application of ECPA to Stored E-Mail

December 10, 2003. The U.S. Court of Appeals (3rdCir) issued its opinion [15 pages in PDF] in Fraser v. Nationwide, a case involving, among other issues, the application of the Electronic Communications Privacy Act (ECPA) to an employer's search of an employee's stored e-mail communications on a company server. The Appeals Court held that there was no violation of the ECPA.

Richard Fraser was an independent insurance agent with a contract with Nationwide Mutual Insurance Co. Nationwide terminated his contract following a search of Fraser's e-mail stored on its main file server, where all of his e-mail was stored. It found drafts of letters to other insurance companies. It concluded he was disloyal, and terminated his contract.

Fraser filed a complaint in U.S. District Court (EDPa) against Nationwide alleging violations of Title I and II of the Electronic Communications Privacy Act of 1986 (ECPA), which is codified at 18 U.S.C. § 2510, et seq. He also pled wrongful termination and other claims not addressed here. The District Court granted summary judgment to Nationwide on the ECPA claims.

The Appeals Court affirmed.

Fraser first argued that Nationwide violated the ECPA by intercepting his e-mail. This claim is based on Title I of the ECPA. The Appeals Court rejected this argument on the basis that an intercept of e-mail must occur contemporaneously with its transmission to constitute an intercept within the meaning of the ECPA.

18 U.S.C. § 2511 provides, in part, that "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 ... shall be subject to suit ..."

18 U.S.C. § 2510(4) defines ''intercept'' 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".

The Appeals Court concluded that "Every circuit court to have considered the matter has held that an ``intercept´´ under the ECPA must occur contemporaneously with transmission." The Court added that "While Congress's definition of ``intercept´´ does not appear to fit with its intent to extend protection to electronic communications, it is for Congress to cover the bases untouched. We adopt the reasoning of our sister circuits and therefore hold that there has been no "intercept" within the meaning of Title I of ECPA."

Fraser also argued that National violated the ECPA by unlawfully accessing stored communications. This claim is based on Title II of the ECPA. The Court rejected this argument too.

18 U.S.C. § 2701(a) provides, in part, that " whoever -- (1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system shall be punished as provided in subsection (b) of this section."

18 U.S.C. § 2510(17), in turn, defines "electronic storage" as "(A) any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof; and (B) any storage of such communication by an electronic communication service for purposes of backup protection of such communication."

The District Court rejected Fraser's argument based on its interpretation that Fraser's e-mail messages were not in backup storage. The Appeals Court provided a different analysis. He relied on the exception for access by service providers.

18 U.S.C. § 2701(c) provides that Subsection (a) of this section does not apply with respect to conduct authorized -- (1) by the person or entity providing a wire or electronic communications service;"

The Appeals Court wrote that "we read § 2701(c) literally to except from Title II's protection all searches by communications service providers. Thus, we hold that, because Fraser's e-mail was stored on Nationwide's system (which Nationwide administered), its search of that e-mail falls within § 2701(c)'s exception to Title II." (Parentheses in original.)

Thus, under this opinion, employers are free to search through their employee's stored e-mail that is on a company administered system, without violating the ECPA. This opinion would also appear to support the argument that if a third party asked an employer or other service provider to search stored e-mail, and it complied, that too would fall within the Section 2701(c) exception. However, the Court did not address this.

This case is Richard Fraser, et al. v. Nationwide Mutual Insurance Co., et al., U.S. Court of Appeals for the Third Circuit, No. 01-2921, Judges Sloviter, Ambro and Becker presiding, an appeal from the U.S. District Court for the Eastern District of Pennsylvania, D.C. No. 98-cv-06726, Judge Anita Brody presiding.