(Part 1, December)

CyberLaw (tm) [12/92]

I.  Court Rules That Technology Advances Privacy Interests

An impassioned dispute has been brewing between government agencies seeking to slow the pace of commercial development in the areas of data encryption and telecommunications, and consumer advocates and a range of computer companies arguing for the broad availability of advanced data encryption and telecommunication systems.  The government agencies argue that the availability of such systems may threaten national security and crime control.  Critics argue that these systems are necessary to protect personal privacy in the "electronic information age."  A recent court ruling in a Texas drug trafficking case may provide increased weight to the critics' position.  In that case, the U.S. Court of Appeals for the Fifth Circuit ruled that technological advances are capable of expanding the legally-protected range of privacy individuals enjoy.  The decision also appears to hold individuals responsible for attaining a level of technical knowledge sufficient to show that any expectation of privacy sought to be preserved is reasonable, both subjectively and objectively.  (U.S. v. Smith, No. 91-5077 (5th Cir. November 12, 1992).) 

II.  Arrest and Conviction

In 1990, David L. Smith lived with his girlfriend in Port Arthur, Texas.  His next-door neighbor had experienced problems with break-ins to his garage and cars, and suspected Smith.  Using a Bearcat scanner designed to scan and intercept 400 "radio-type" channels, the neighbor began to intercept Smith's phone conversations, made in Smith's home over a cordless telephone. 

Listening to the conversations, the neighbor did not hear anything to tie Smith to the break-ins, but did discover that he was involved in drug dealing.  The neighbor contacted a friend in the local police department, who "instructed and assisted" the neighbor to tape Smith's conversations.  Police officers also participated in the interception and recording of Smith's calls. 

Based on the intercepted calls, Smith was arrested and charged with drug trafficking.  At trial, Smith requested the suppression of evidence obtained through interception of his phone conversations.  The request was denied, and Smith was convicted.

III.  The Appeal

On appeal, Smith claimed that the interception and use of the calls in obtaining his conviction was in violation of Title III of the Omnibus Crime Control and Safe Streets Act of 1968 (18 U.S.C. Sections 2510 et seq.)  As described by the Fifth Circuit, "Title III essentially prohibits the nonconsensual interception of 'wire,' 'oral,' and 'electronic' communication without prior judicial approval."  Smith also argued that the interception and use of his calls violated the Fourth Amendment, which bars unreasonable searches and seizures.

The Fifth Circuit quickly dismissed Smith's Title III claims.  Although Title III includes an exclusionary rule barring the introduction into evidence of illegally intercepted communications, the Fifth Circuit noted that cordless phone communication is expressly carved out from Title III's coverage.  The exclusion had been made because "some types of cordless communication could be so easily intercepted."      

On the Fourth Amendment claim, the Fifth Circuit noted that "what is really involved in Fourth Amendment analysis is our 'societal understanding' about what deserves 'protection from government invasion.'"  The court stated that for a defendant to establish a Fourth Amendment violation, he must "show that a government activity intruded upon a reasonable expectation of privacy in such a significant way that the activity can be called a 'search.'"  He would also have to show that the intrusion was unreasonable given the particular facts of the case.

Regarding privacy expectations, Smith reminded the Fifth Circuit that the U.S. Supreme Court has ruled that a person in a phone booth has a justifiable expectation of privacy in his conversation, whether measured subjectively or objectively.  "Obviously," continued Smith, "one who has a telephone conversation in the privacy of his own home is seeking to keep his personal matters private, unless he knows that the conversation is being heard by others."  Because "one has a right to be secure in one's house against unauthorized intrusion against a policeman viewing or seizing tangible property," reasoned Smith, "the home owner's rights are as clearly invaded when the police warrantlessly intrude into the home with a listening device." 

Smith further advised the Fifth Circuit that the cordless phone at issue was owned by his girlfriend, that he had never read the owner's manual for the phone or owned such a phone, and that he had never been informed that his conversations would not be private.  Although the cordless phone base contained a warning that "privacy of communications may not be insured...," the base was located on a wall and could not be and had not been seen by Smith.  Accordingly, Smith argued that he had a subjective expectation of privacy in his conversations, which society should be prepared to recognize as reasonable.  Additionally, Smith noted that his calls were "not intercepted unintentionally, or by plain radio, or by another cordless telephone.  The interception was an intentional intrusion into [his] privacy through the use of a device specifically designed to intercept transmissions."

IV.  The Court Considers Technology and Expectations of Privacy

In considering these arguments, the Fifth Circuit focused upon the important role that telecommunications play in today's society, observing that "wireless" technology is one of the fastest growing areas in the field of telecommunications, and that cordless phones are threatening to outstrip sales of traditional land line telephones.  According to the court, "the decision as to whether cordless telephone conversations are protected by the Fourth Amendment may ultimately determine whether any telephone conversation is protected by the Fourth Amendment."

Where a cordless telephone differs from a normal land line phone is in the cordless phone's use of an actual radio signal.  A cordless phone transmits the signal from a mobile unit to a base unit, which is attached to a land- based telephone line.  A cordless phone also receives radio signals from the base unit.  The radio signals carry the actual conversation.  Although communications carried over land-based telephone lines are clearly protected by the Fourth Amendment, a conversation broadcast into the air by radio waves has been viewed as "more analogous to carrying on an oral communication in a loud voice or with a megaphone...."  In such cases, the person carrying on the call was viewed as knowingly exposing the communication to the public.

Courts had ruled in earlier decisions that cordless phone users could have no reasonable expectation of privacy in their calls because of the ease by which the calls could be monitored.  At the time of those decisions, some cordless phones had a range of over 700 feet and were subject to interception by standard radio scanners, radio receivers, and other cordless phones (many of which were pre-set to the same frequency).  The Fifth Circuit noted, however, that more recent cordless phones employ an evolved technology; many are limited in range to about 60 feet, "barely beyond the average house or yard," and are no longer pre-set to the same frequency.  Since cordless phones now transmit on frequencies not utilized by commercial radio, conventional radios can no longer intercept cordless communications.  Although the conversations can be monitored by radio scanners, the court further noted that only a small percentage of the populace own such scanners.  In addition, new cordless phones also incorporate the ability to scramble their signals. 

Respecting the new technology, the Fifth Circuit discerned that, "Surely the reasonableness of an expectation of privacy becomes greater when the conversation can only be intercepted using specialized equipment not possessed by the average citizen."  "[I]n spite of the fact that a defendant uses a cordless phone," continued the court, "the circumstances may show that he also has a reasonable expectation of privacy."  In this case, however, the Fifth Circuit found that although Smith claimed not to know that his conversations would not be private, he had "introduced absolutely no evidence -- such as the phone's frequency or range -- that would tend to show that his subjective expectation of privacy was reasonable." 

In light of the above, the Fifth Circuit found that the trial court erred in assuming that there could never be a reasonable expectation of privacy for a cordless telephone communication.  But the court affirmed Smith's conviction, nonetheless, for the reason that "even under a correct application of the law ... [Smith] failed to carry his burden of showing that his Fourth Amendment rights were violated."   

(A copy of the Fifth Circuit's decision and other papers concerning this case were kindly made available to the author by Bruce N. Smith, Esq., of Beaumont, Texas, attorney for defendant David L. Smith.  Persons interested in privacy rights and electronic bulletin boards will find an easily accessible discussion of the state of the law in SYSLAW (2d Ed. 1992), by Lance Rose, Esq. and Jonathan Wallace, Esq.)

CyberLaw (tm) is published solely as an educational service.  The author may be contacted at jrsnr@well.sf.ca.us; cyberlaw@aol.com; questions and comments may be posted on America Online (go to keyword "CYBERLAW").  Copyright (c) 1992 Jonathan Rosenoer; All Rights Reserved.  CyberLaw is a trademark of Jonathan Rosenoer.


CyberLex (tm) [12/92]

Notable legal developments reported in December 1992 include the following:
  - In a lawsuit concerning whether the copyright to software written on the job by a freelance computer programmer is owned by the programmer or the business for which it was written, the U.S. Court of Appeals for the Second Circuit has held that among the most important factors to be weighed are whether the business paid health benefits and Social Security taxes on behalf of the programmer, and the level of expertise involved in writing the program.  (Wall Street Journal, December 8, 1992, B5.)

- VPL Research, Inc., one of the U.S. leaders in the field of virtual reality, has lost basic virtual reality patents to France's Thompson CSF SA.  Thompson gained the rights to the patents after VPL failed to repay a series of loans  totaling about $1 million; the patents had been pledged as collateral for the loans.  (Wall Street Journal, December 7, 1992, B1; San Jose Mercury News, December 8, 1992, 1G.)

- Kevin Lee Poulson has been charged with violating a federal espionage law prohibiting the gathering of classified military secrets.  There has been no allegation that Poulson intended to distribute the information to any foreign power.  Poulson has previously been charged with a number of crimes, and it is alleged that he broke into telephone company offices and penetrated phone company computers, among other things.  (San Jose Mercury News, December 8, 1992, 4B, and December 9, 1992, 1A.)
 - California utility companies have reportedly been voluntarily giving police confidential personal information about consumers.  Information disclosed by the utilities includes electricity and gas use figures, as well as Social Security numbers, places of employment, driver's license numbers, and other information provided by consumers to utilities.  In some instances, the utilities agreed to tap consumer utility lines to gather evidence on suspected drug labs.  (San Jose Mercury News, December 27, 1992, 1A.)
   - Two young members of a group known as the "Masters of Deception," Julio Fernandez and John Lee, have pled guilty to conspiring to possess or use unauthorized access devices to affect the operation of computer systems involved in interstate commerce.  Members of the Masters of Deception allegedly broke into corporate and university computer systems.  The two face up to 5 years in prison and a $250,000 fine.  (San Jose Mercury News, December 3, 1992, 3F; Wall Street Journal, December 3, 1992, B2.)  
 - Federal Trade Commission staff attorneys have reportedly suggested that the FTC seek a preliminary injunction against Microsoft Corp.  (Wall Street Journal, December 11, 1992, A3.)   
  - The U.S. Court of International Trade has ruled that the International Trade Commission misread the law in its ruling against Japanese producers of flat-panel displays, and sent the matter back to the Commission for further consideration.  In the meantime, protective duties imposed by the Commission will remain in place.  (San Jose Mercury News, December 31, 1992, 1E.)

- A federal judge has ruled that Advanced Micro Devices Inc. does not have the right to copy and distribute Intel Corp. microcode in its 486 microprocessors.  (Wall Street Journal, December 3, 1992, A3; New York Times, December 3, 1992, C1; San Jose Mercury News, December 3, 1992, 1F.) 

- A federal judge has ruled that McAfee Associates Inc., one of the largest vendors of antivirus software, must stop distribution of products that "falsely identify" Imageline Inc.'s PicturePak software "as infected with a computer virus."  (Wall Street Journal, December 29, 1992, B4.)


-  Bell Atlantic Corp., a regional Bell company, has filed suit claiming that its right to free speech is violated by the Cable Act of 1984, which prohibits a telephone company from owning a cable television system in a city where it provides phone service.  Bell Atlantic is seeking to build an advanced communications network in Alexandria, VA, that would provide hundreds of channels of television over fiber-optic lines, as well as new 2- way communication services.  (New York Times, December 18, 1992, C1; San Jose Mercury News, December 18, 1992, 10E.)

- The U.S. Justice Department has filed suit against the 8 largest American airlines, accusing them of using a computerized reservation system to communicate proposed fare increases to competitors and to fix air fares.  (New York Times, December 22, 1992, A1; San Jose Mercury News, December 22, 1992, 8D.)

- Novell Inc. has signed a letter of intent with AT&T to acquire Unix Systems Laboratories, an AT&T subsidiary that produces a version of the Unix operating system.  (New York Times, December 22, 1992, C1; San Jose Mercury News, December 22, 1992, 8D.)  

CyberLex (tm) is published solely as an educational service.  Copyright (c) 1992 Jonathan Rosenoer; All Rights Reserved.  CyberLex is a trademark of Jonathan Rosenoer.