7th Circuit Rules Against Deadbeat DA in ECPA Compensation Case
April 12, 2005. The U.S. Court of Appeals (7thCir) issued is second opinion [11 pages in PDF] in Ameritech v. McCann, a case regarding a state District Attorney (DA) who requests and receives information from Ameritech, but refuses to pay, as required by § 2706 of the ECPA. The Court of Appeals held that the DA must pay, instructed the District Court to write a declaratory judgment to that effect, and specified the language to be included.
This is the second time that the Court of Appeals has issued an opinion in this case. On July 22, 2002, this Court of Appeals issued its first opinion [11 pages in PDF], holding that the 11th Amendment does not bar an electronics communications provider from suing a state law enforcement agency in federal court for prospective injunctive relief for an ongoing violation of the Electronic Communications Privacy Act (ECPA). See, story titled "7th Circuit Construes ECPA and 11th Amendment" in TLJ Daily E-Mail Alert No. 475, July 23, 2002.
The present opinion restates the holding of the first opinion. However, it also goes much. It includes an expanded basis for rejecting 11th Amendment immunity. It rejects several other arguments advanced by McCann, including Constitutional authority for the underlying statute, interpretation of the ECPA, and lack of authority to preempt state law. The present opinion directs the District Court to issue a declaratory judgment, and spells out in condescending detail the contents of that declaratory judgment. The Court of Appeals wrote that this second opinion was made necessary, not only by the "intransigence" of McCann, but also because the District Court's "neglected" to enter a "proper judgment" after the Court of Appeals reversed its previous judgment
Ameritech (which has been acquired by SBC) is an incumbent local exchange carrier in the state of Wisconsin. It provides, among other things, landline telephone service.
Michael McCann has been the District Attorney of Milwaukee County since 1968. The DA's office requests and receives information from Ameritech pursuant to the Electronic Communications Privacy Act (ECPA), which is codified at 18 U.S.C. § 2510, et seq.
18 U.S.C. § 2706, which is at issue in this case, provides that "a governmental entity obtaining the contents of communications, records, or other information under section 2702, 2703, or 2704 of this title shall pay to the person or entity assembling or providing such information a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching for, assembling, reproducing, or otherwise providing such information. Such reimbursable costs shall include any costs due to necessary disruption of normal operations of any electronic communication service or remote computing service in which such information may be stored."
This litigation involves McCann's refusal to pay, pursuant to § 2706, for terminating automated messaging account (AMA) reports that are requested and received from Ameritech. This is industry jargon for obtaining information about who is telephoning someone else. That is, since landline phone companies bill for outgoing calls, their record keeping systems organize information by caller. However, the phone companies can compile data on incoming calls to a particular number. The Court of Appeals opinion details this process, and just how expensive and time consuming it is for companies like Ameritech to aggregate and organize this data.
McCann has for a long time requested this data, but refused to pay for it. The Court of Appeals wrote that "State and federal law-enforcement officials throughout the nation pay routinely. Not so in Wisconsin, where officials have dug in their heels."
The Court of Appeals also noted that "Public officials in Wisconsin not only refuse to pay but also make a disproportionately high number of demands compared with law-enforcement officials in other states. That Wisconsin's prosecutors treat terminating AMA reports as free doubtless explains this fact, and the volume of demands explains Ameritech's concern about the drain on its resources."
McCann has long tried to evade his legal obligation under § 2706 by asserting that he has 11th Amendment immunity. The 11th Amendment of the U.S. Constitution provides that "The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State."
The 11th Amendment may be archaic and outdated, but it remains in the Constitution. States, such as Wisconsin, have discovered numerous ways to profit from its abuse.
The Supreme Court has long limited the application of 11th Amendment immunity by the doctrine announced in Ex Parte Young, 209 U.S. 123 (1908). That case held that the 11th Amendment bars a suit for money damages, but not a claim for prospective injunctive relief.
The Court of Appeals, in its first opinion, provided a straightforward application of the doctrine of Ex Parte Young. That is, Ameritech is seeking prospective injunctive relief, not money damages, so its suit is not barred.
This present opinion also addresses additional arguments raised by McCann. He argued that the Congress lacks authority to preempt in this area. The Court of Appeals rejected this argument on the basis that there is no state statute that has been preempted.
"No state law excuses or forbids compensation", the Court of Appeals wrote. "So, too, state law that fails to provide for compensation when telephone companies disclose information is not inconsistent with a federal law that does require compensation; payment is compatible with both laws. Only a state law along the lines of ``a District Attorney is entitled to records for free´´ would pose a preemption issue, and there is no such law in Wisconsin."
McCann also argued that the Congress lacks Constitutional authority in this area. That is, he did not challenge the authority of the Congress to pass a law requiring phone companies to provide data, services, and surveillance assistance to DAs. Nor did he challenge the authority of the Congress to give states authority to conduct wiretaps. Rather, he only challenged the authority of the Congress to require compensation from phone companies.
The Court of Appeals rejected this argument. It noted that the Constitution includes an interstate commerce clause, and that this includes the power to regulate the phone system. It cited as authority for this proposition a line of case beginning in 1878 with Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1
McCann also argued that the DA's office is not a "governmental entity" within the meaning of the statute, and that the records obtained by the DA's office are not "records" within the meaning of the statute. The Court of Appeals rejected these arguments.
The Court of Appeals also specified the language that the District Court must put in a declaratory judgment upon remand. The Court of Appeals took this unusual step because, after its 2002 reversal, the District Court issued a declaratory judgment, but refused to specify what was enjoined.
The Court of Appeals wrote in its present opinion that "the declaratory judgment should provide that in the future the District Attorney must tender compensation as part of every request under Wis. Stat. §968.135 that Ameritech provide a terminating AMA report, and must agree to litigate the amount of compensation in state court if Ameritech deems the tender inadequate. Unless such an offer is made and included in the state court's order, Ameritech need not provide the requested information."
This language goes well beyond providing prospective injunctive relief. It not only enjoins McCann, prospectively, from continuing his violation of the ECPA, it also specifies that future litigation must be in state court (where the 11th Amendment is inapplicable), and that if McCann violates the injunction, Ameritech may violate its obligations to provide data to McCann.
Also, the Court of Appeals went beyond the doctrine of Ex Parte Young in its analysis of McCann's immunity argument. It wrote that "Once states open their courts to litigation, they must apply federal rules as well as those under state law. The supremacy clause gives no other alternative. ... State courts must comply with the wiretap laws and the fourth amendment; so too they must comply with other federal rules affecting what information, and under what conditions, telecommunications firms provide to state prosecutors. Thus when the District Attorney petitions the state court for an order compelling Ameritech to prepare and provide a terminating AMA report, Ameritech (as the respondent) is entitled to insist that the state court follow federal law by attaching a price tag under §2706(b). ... No prosecutor or court in Wisconsin has been “commandeered” to do anything; §2706 just places a condition on activity that states elect to engage in, and from which they may desist as freely." (Parentheses in original. Citations omitted.)
This present opinion not only provides Ameritech prospective injunctive relief. It appears calculated to assure that Ameritech will in fact get paid for the debts that the DA will incur. Moreover, this opinion appears to further chip away at state sovereign immunity and 11th Amendment immunity.
Thus, this opinion may be pertinent, not only for phone companies that get stiffed by DAs who request ECPA assistance, but also for others who suffer from abusive assertions of state immunity.
Some of these assertions involve telecommunications and technology. For example, states and their public utilities commissions (PUCs) regulate phone companies, services and prices; they have also sometimes asserted 11th Amendment immunity in challenges to their PUCs' orders. (See also, Verizon Maryland v. Public Service Comm. of Maryland [PDF], which is reported at 535 U.S. 635.) Also, states, and state university systems, often assert 11th Amendment immunity to claims of patent infringement and copyright infringement.
This case is Ameritech Corporation v. Michael McCann, U.S. Court of Appeals for the 7th Circuit, Nos. 04-2262, 04-2385, 04-4308 and 05-1002, appeals from the U.S. District Court for the Eastern District of Wisconsin, D.C. No. 99-675, Judge Rudolph Randa presiding.
The 2002 opinion of the Court of Appeals was written by Judge Flaum and
joined by Judges Wood and Williams. The present opinion was written by Judge
and joined by Judges Evans and Kanne.