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Date: Thu, 25 Mar 93 19:22:49 PST
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Subject: File 1--Judge Spark's Decision in Steve Jackson Games Suit

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          UNITED STATES DISTRICT COURT
          WESTERN DISTRICT OF TEXAS
          AUSTIN DIVISION

STEVE JACKSON GAMES                *s
INCORPORATED, et al.,              *s
Plaintiffs,                        *s
                                   *s
V.                                 *s NO. A 91  CA 346 SS
                                   *s
UNITED STATES SECRET SERVICE,      *s
UNITED STATES OF AMERICA, et al.,  *s
Defendants                         *s

                    Opinion

                    I. Facts

     The issues remaining at trial in this lawsuit involves the
Plaintiffs Steve Jackson Games, Incorporated, Steve Jackson,
Elizabeth McCoy, Walter Milliken, and Steffan O'Sullivan's causes
of action against the United States Secret Service and the United
States of America pursuant to three statutes, "Private Protection
Act",42 U.S.C. 2000aa et seq.;"Wire and Electronic Communications
Interception and Interception of Oral Communication" Act, 18
U.S.C. 2510, et seq.; and "Stored Wire and Electronic
Communications and Transactional Records Access" Act, 18 U.S.C
2701, et seq. All other issues and parties have been withdrawn by
agreement of these remaining parties.

     The individual party plaintiffs are residents of the states
of Texas and New Hampshire, and the corporate plaintiff is a
Texas corporation with its principal place of business in Austin,
Texas.

     The Plaintiff Steve Jackson started Steve Jackson Games in
1980 and subsequently incorporated his business. Steve Jackson
Games, Incorporated, publishes books, magazines, box games, and
related products'. More than 50 percent of the corporation's
revenues are derived from its publications. In addition, Steve
Jackson Games, Incorporated, beginning in the mid-1980s and
continuing through this litigation, operated from one of its
computers an electronic bulletin board system called Illuminati.
This bulletin board posts information to the inquiring public about
Steve Jackson Games' products and activities; provides a medium for
receiving and passing on information from the corporation's
employees, writers, customers, and its game enthusiasts; and,
finally, affords its users electronic mail whereby, with the use of
selected passwords, its users can send and receive electronic mail
(E-mail) in both public and private modes. In February of 1990,
there were 365 users of the Illuminati bulletin board.

     Steve Jackson was both the owner and employee of Steve Jackson
Games, Incorporated, and authored many of its publications; he used
both Illuminati's public and private programs for electronic mail
and his use ranged from business records of the corporation,
contracts with his writers, communication with his writers
regarding articles which were intended to be published by the
corporation, to private communications with his business associates
and friends. Elizabeth McCoy's use of the Illuminati bulletin board
involved her participation as a game player, her critiques as to
the games and publications of the corporation, and her private


     'While the content of these publications are not similar to
those of daily newspapers, news magazines, or other publications
usually thought of by this Court as disseminating information to
the public, these products come within the literal language of the
Privacy Protection Act.
communications with associates and friends. William Milliken's use
of the Illuminati bulletin board was apparently limited to private
communicates to associates and friends. Steffan O'Sullivan's use of
the Illuminati bulletin board included writings for publication by
Steve Jackson Games, Inc. , his business dealings with the
corporation, and public and private communications with associates
and friends.

     Importantly, prior to March 1, 1990, and at all other times,
there has never been any basis for suspicion that any of the
Plaintiffs have engaged in any criminal activity, violated any law,
or attempted to communicate, publish, or store any illegally
obtained information or otherwise provide access to any illegally
obtained information or to solicit any information which was to be
used illegally.

     In October of 1988, Henry Kluepfel, Director of Network
Security Technology (an affiliate Bell Company) , was advised a
sensitive, proprietary computer document of Bell South relating to
Bell's "911 program" had been made available to the public on a
computer bulletin board in Illinois. Kluepfel reported this
information to Bell South and requested instructions, but received
no response. In April of 1989, Kluepfel confirmed the 911 Bell
document was available on the Illinois computer bulletin board and
learned the document was additionally available without any
proprietary notice on at least another computer bulletin board and
had been or was being published in a computer bulletin board
newsletter in edited form. In July of 1989, Kluepfel was finally


          - 3 -
instructed by Bell South to report the "intrusion" of its computer
network to the Secret Service and that the document taken was
"sensitive" and "proprietary. " Kluepfel had previously worked with
the Secret Service and was known as an expert and reliable
informant on computer "hacking. , 2 Thereafter, Kluepfel met
Assistant U. S. Attorney William Cook in Chicago and thereafter
communicated with Cook and Secret Service Agent Tim Foley. Agent
Foley was in charge of this particular investigation.

     Around February 6, 1990, Kluepfel learned that the 911
document was available on a computer billboard entitled "Phoenix"
which was operated by Loyd Blankenship in Austin, Texas. Kluepfel
"downloaded" the document to put in readable form and then advised
these facts to the Secret Service. Prior to February 26, 1990,
Kluepfel learned that Blankenship not only operated the Phoenix
bulletin board, but he was a user of the Illinois bulletin board
wherein the 911 document was first disclosed, was an employee of
Steve Jackson Games, Inc., and a user of the Steve Jackson Games,
Inc.'s bulletin board "Illuminati." Kluepfel's investigation also
determined that Blankenship was a "co-sysop" of the Illuminati
bulletin board, which means that he had the ability to review
anything on the Illuminati bulletin board and, importantly, maybe
able to delete anything on the system.  Blankenship's bulletin
board Phoenix had published "hacker" information and had solicited
"hacker" information relating to passwords, ostensibly to be


     2 "hacker" is an individual who accesses another's computer
     system without authority.
analyzed in some type of decryption scheme. By February 26, 1990,
Kluepfel determined that the Phoenix bulletin board was no longer
accessible as he could not dial, or "log into" it. He reported this
to Agent Foley. While Kluepfel advised Agent Foley that Blankenship
was an employee of Steve Jackson Games, Inc., and was a user and
co-sysop of Illuminati, Kluepfel never had any information whereby
he was suspicious of any criminal activity by any of the Plaintiffs
in this cause. Kluepfel was, and is, knowledgeable in the operation
of computers, computer bulletin boards, the publishing of materials
and document by computers, the communications through computer
bulletin boards (both public and private communications), and could
have 'logged" into the Illuminati bulletin board at any time and
reviewed all of the information on the bulletin board except for
the private communications referred to by the Plaintiffs as
electronic communications or electronic mail, but did not do so.
Kluepfel had legitimate concerns, both about the 911 document
stolen from Bell South and the possibility of a decryption system
which could utilize passwords in rapid fashion and could result in
intrusions of computer systems, including those of the Bell System.

     In February of 1990, Agent Foley was also knowledgeable about
computer bulletin boards and he too could have "logged" into
Illuminati, become a user and reviewed all public communications on
the bulletin board, but did not do so.

     By February 28, 1990, when the search warrant affidavit was
executed, Agent Foley had received information from reliable


          - 5 -
sources (Kluepfel, Williams, Spain, Kibbler, Coutorie, and Niedorf
, and possibly others') there had been an unlawful intrusion on the
Bell South computer program, the 911 Bell South document was a
sensitive and proprietary document, and that computer hackers were
attempting to utilize a decryption procedure whereby unlawful
intrusions could be made to computer programs including the Defense
Department, and these hackers were soliciting passwords so that the
decryption procedure could become operational. In addition, Agent
Foley was advised Loyd Blankenship had operated his Phoenix
bulletin board from his home, had published the 911 Bell South
document in edited form, and had published and communicated that a
decryption strategy was available and other "hackers" should submit
selective passwords to finalize the decryption scheme for
intrusions into computer systems by using a rapid deployment of
passwords. Agent Foley was also advised that Blankenship was an
employee of Steve Jackson Games and had access to the Illuminatie
bulletin board as a user and a co-sysop and he may well (and in
fact did) have the ability to delete any documents or information
in the Steve Jackson Games computers and Illuminatie bulletin
board. The only information Agent Foley had regarding Steve Jackson
Games, Inc. and Steve Jackson was that he thought this was a
company that put out games, but he also reviewed a printout of
Illuminati on February 25, 1990, which read, "Greetings, Mortal!
You have


3    'Kluepfel, Williams, Spain and Kibbler are employees of Bell
South; Coutorie is a University of Texas Systems investigator
assigned to investigate computer hacking; and Niedorf is a hacker
involved in the Illinois bulletin board system.
entered the secret computer system of the Illuminati, the on-line
home of the world's oldest and largest secret conspiracy.
5124474449300/1200/2400BAUD fronted by Steve Jackson Games,
Incorporated. Fnord. " The evidence in this case strongly suggests
Agent Foley, without any further investigation, misconstrued this
information to believe the Illuminati bulletin board was similar in
purpose to Blankenship's Phoenix bulletin board, which provided
information to and was used by "hackers." Agent Foley believed, in
good faith, at the time of the execution of his affidavit on
February 28, 1990, there was probable cause to believe Blankenship
had the 911 Bell South document and information relating to the
decryption scheme stored in his computer at home or perhaps in
computers, disks, or in the Illuminati bulletin board at his place
of employment at Steve Jackson Games, Inc.; that these materials
were involved in criminal activities; and that Blankenship had the
ability to delete any information stored on any of these computers
and/or disks.

     Unfortunately, although he was an attorney and expressly
represented this fact in his affidavit, Agent Foley was not aware
of the Privacy Protection Act, 42 U.S.C. 2000aa et seq., and he
conducted no investigation about Steve Jackson Games, Incorporated,
although a reasonable investigation of only several hours would
have revealed Steve Jackson Games, Inc. was, in fact, a legitimate
publisher of information to the public and Mr. Jackson would have
cooperated in the investigation. Agent Foley did not know the
individual Plaintiffs but did know they were users of Illuminati as

          - 7 -
he had a list of all users prior to February 28, 1990. Agent Foley
did know and understand the Illuminati bulletin board would have
users and probably would have stored private electronic
communications between users. Notwithstanding the failure of any
investigation regarding Steve Jackson Games, Agent Foley and
Assistant U. S. Attorney Cook intended to seize and review all of
the information and documents in any computer accessible to
Blankenship, regardless of what other incidental information would
be seized. These intentions were expressly stated in their
application for a search warrant and the warrant itself.' Foley's
affidavit, executed on February 28, 1990, was sufficient under the
law for the issuance of a search warrant by the United States
Magistrate Judge. The Court does not find from a preponderance of
the evidence that the admitted errors in Foley's affidavit were
intentional and so material to make the affidavit and issuance of
the warrant legally improper. See, Franks v. Delaware, 438 U.S.
154, 98 S.Ct. 2674 (1978). The factual errors in the affidavit
include the Bell 911 document was a computer program; the Bell 911
document was engineered at a cost of $79,449; the Bell 911 document
had been 'slightly" edited; articles in

     4 The Court does fault Agent Foley and the Secret Service on
     the failure to make any investigation of Steve Jackson Games,
     Inc. prior to March 1, 1990, and to contact Steve Jackson in
     an attempt to enlist his cooperation and obtain information
     from him as there was never any basis to suspect Steve Jackson
     or Steve Jackson Games, Inc. of any criminal activity, and
     there could be no questions the seizure of computers, disks,
     and bulletin board and all information thereon, including all
     back-up materials would have an adverse effect (including
     completely stopping all activities) on the business of Steve
     Jackson Games, Inc. and the users of Illuminati bulletin
     board.
Phrack were described as "hacker tutorials;" the Bell 911 document
published in Phrack contained a proprietary notice; Blankenship was
a computer programmer for Steve Jackson Games, Inc.; Blankenship's
alias "Mentor" was listed as an Illuminati bulletin board user;

Coutorie, prior to February 28, 1990, provided Foley with
information on Steve Jackson Games, Inc.; and that Kluepfel had
"logged" into Illuminati. The affidavit and warrant preparation was
simply sloppy and not carefully done. Therefore, the Court denies
the Plaintiff's contentions relating to the alleged improprieties
involved in the issuance of the search warrant.

     On March 1, 1990, Agents Foley and Golden executed the
     search

warrant. At the time of the   execution, each agent had available

computer experts who had been flown to Austin to advise and
review

the stored information in the computers, the bulletin boards, and
disks seized. These computer experts certainly had the ability to
review the stored information and, importantly, to copy all
information contained in the computers and disks within hours.

     During the search of Steve Jackson Games and the seizure of
the three computers, over 300 computer disks, and other materials,
Agent Golden was orally advised by a Steve Jackson Games, Inc.
Employee that Steve Jackson Games, Inc. was in the publishing
business. Unfortunately, Agent Golden, like Foley, was unaware of
the Privacy Protection Act and apparently attached no significance
to this information. The evidence is undisputed that Assistant U.

S. Attorney Cook would have stopped the search at the time of this
notification had he been contacted.

          - 9 -
     By March 2, 1990, Agent Foley knew Steve Jackson Games, Inc.
was in the publishing business and the seizure included documents
intended for publication to the public, including a book and other
forms of information. He also knew or had the ability to learn the
seizure of the Illuminati bulletin board included private and
public electronic communications and E-mail. By March 2, 1990,
Agent Foley knew that Steve Jackson Games, Incorporated, and its
attorneys in Dallas and Austin, were requesting the immediate
return of the properties and information seized, that transcripts
of publications and the back-up materials had been seized, and that
the seizure of the documents, including business records of Steve
Jackson Games, Inc., and their back-up was certain to economically
damage Steve Jackson Games, Inc. While Agent Foley had a legitimate
concern there might be some type of program designed to delete the
materials, documents, or stored information he was seeking, he
admits there was no valid reason why all information seized could
not have been duplicated and returned to Steve Jackson Games within
a period of hours and no more than eight days from the seizure. In
fact, it was months (late June 1990) before the majority of the
seized materials was returned. Agent Foley simply was unaware of
the law and erroneously believed he had substantial criminal
information which obviously was not present, as to date, no arrests
or criminal charges have ever been filed against anyone, including
Blankenship.

     In addition, Agent Foley must have known his seizure of
computers, printers, disks and other materials and his refusal to


          - 10 -
provide copies represented a risk of substantial harm to Steve
Jackson Games, Inc. -- under circumstances where he had no reason
to believe the corporation or its owner was involved in criminal
activity.

     The Secret Service denies that its personnel or its delegates
read the private electronic communications stored in the seized
materials and specifically allege that this information was
reviewed by use of key search words only. Additionally, the Secret
Service denies the deletion of any information seized with two
exceptions of "sensitive" or "illegal" information, the deletion of
which was consented to by Steve Jackson.     However, the
preponderance of the evidence, including common sense 5,
establishes that the Secret Service personnel or its delegates did
read all electronic communications seized and did delete certain
information and communications in addition to the two documents
admitted deleted. The deletions by the Secret Service, other than
the two documents consented to by Steve Jackson, were done without
consent and cannot be justified.

     By March 2, 1990, Agent Foley, Agent Golden, and the Secret
Service, if aware of the Privacy Protection Act, would have known
that they had, by a search warrant, seized work products of
materials from a person or entity reasonably believed to have a
purpose to disseminate to the public a"book" or "similar form of
public communication."

     'The application and the search warrant itself was worded by
Foley and Cook so that all information would be "read" by the
Secret Service.

          - 11 -
     The failure of the Secret Service after March 1, 1990, to --
promptly -- return the seized products of Steve Jackson Games,
Incorporated cannot be justified and unquestionably caused economic
damage to the corporation.

     By March 1, 1990, Steve Jackson Games, Incorporated was
apparently recovering from acute financial problems and suffering
severe cash flow problems. The seizure of the work product and
delays of publication, whether by three weeks or several months,
directly impacted on Steve Jackson Games, Incorporated. Eight
employees were terminated because they could not be paid as
revenues from sales came in much later than expected. However, it
is also clear from a preponderance of the evidence that after the
calendar year 1990, the publicity surrounding this seizure and the
nature of the products sold by Steve Jackson Games, Incorporated
had the effect of increasing, not decreasing, sales. In fact, Steve
Jackson Games, Incorporated developed a specific game for sale
based upon the March 1, 1990, seizure. The Court declines to find
from a preponderance of the evidence there was any economic damage
to Steve Jackson Games, Incorporated after the calendar year 1990
as a result of the seizure of March 1, 1990.'

     As a result of the seizure of March 1, 1990, and the retention
of the equipment and documents seized, Steve Jackson Games,
Incorporated sustained out-of-pocket expenses of $8,781.00. The


     6 The Court finds the testimony of Joanne Midwikis, an
accountant who testified on behalf of Steve Jackson Games, Inc. and
Steve Jackson, on damages suffered by Steve Jackson Games, Inc. and
Steve Jackson was not credible.

          - 12 -
personnel at this corporation had to regroup, rewrite, and
duplicate substantial prior efforts to publish the book Gurps
Cyberpunk and other documents stored in the computers and the
Illuminati bulletin board, explain to their clientele and users of
the bulletin board the difficulties of their continuing business to
maintain their clientele, to purchase or lease substitute equipment
and supplies, to re-establish the bulletin board, and to get the
business of Steve Jackson Games, Inc. back in order. The Court has
reviewed the evidence regarding annual sales and net income of
Steve Jackson Games, Incorporated for 1990 and the years before and
after and finds from a preponderance of the evidence there was a 6
percent loss of sales in 1990 due to the seizure and related
problems. The evidence was undisputed that there was a 42 percent
profit on sales of publications of Steve Jackson Games,
Incorporated. Thus, Steve Jackson Games, Incorporated sustained

damages in loss of sales in 1990 of $100,617.00 for a loss of
profit of $42,259.00 as a direct and proximate result of the
seizure of March 1, 1990, and the retention of the documents
seized. After 1990, the net sales of Steve Jackson Games,
Incorporated continued to increase annually in a traditional
proportion as the sales had been increasing from 1988. Thus, from
a preponderance of the evidence, the loss of $42,259.00 is
inconsistent with the net income figures of Steve Jackson Games,
Incorporated in the years immediately following and preceding
1990.

     Regarding damages to Steve Jackson, personally, his own
testimony is that by 1990 he was becoming more active in the


          - 13 -
management of Steve Jackson Games, Incorporated, and spending less
time in creative pursuits such as writing. Steve Jackson Games,
Incorporated was in such financial condition that Chapter 11
proceedings in bankruptcy were contemplated. Thereafter, the
testimony clearly established that Steve Jackson Games reasserted
himself in management and was spending substantial time managing
the corporation. The Court declines to find from a preponderance of
the evidence that Steve Jackson personally sustained any
compensatory damages as a result of the conduct of the United
States Secret Service.

     Elizabeth McCoy, Walter Milliken and Steffan O'Sullivan also
allege compensatory damages. These Plaintiffs all had stored
electronic communications, or E-mail, on the Illuminati bulletin
board at the time of seizure. All three of these Plaintiffs
testified that they had public and private communications in
storage at the time of the seizure. Steve Jackson, Elizabeth McCoy,
Walter Milliken and Steffan O'Sullivan all testified that
following June of 1990 some of their stored electronic
communications, or E-mail, had been deleted.  It is clear, as
hereinafter set out, that the conduct of the United States Secret
Service violated two of the three statutes which the causes of
action of the Plaintiffs are based and, therefore, there are
statutory damages involved, but the Court declines to find from a
preponderance of the evidence that any of the individual Plaintiffs
sustained any compensatory damages.



          - 14 -
                               ii.

                               a.

                     PRIVACY PROTECTION ACT
              (First Amendment Privacy Protection)
                    42 U.S.C. 2000aa et seq.

     The United States Secret Service, by Agent Foley and Assistant
United States Attorney Cox, sought and obtained an order from a
United States Magistrate Judge to search for and seize and
thereafter read the information stored and contained in "computer
hardware (including, but not limited to, central processing unit(s)
monitors, memory devices, modem(s), programming equipment,
communication equipment, disks, and printers) and computer software
(including, but not limited to) memory disks, floppy disks, storage
media) and written material and documents relating to the use of
the computer system (including network access files) ,
documentation relating to the attacking of computers and
advertising the results of computer attacks (including telephone
numbers and location information), and financial documents and
licensing documentation relative to the compute programs and
equipment at the business known as Steve Jackson Games which
constitute evidence, instrumentalities, and fruits of federal
crimes, including interstate transportation of stolen property (18
U.S.C. 2314) and interstate transportation of computer access
information (18 U.S.C. 1030(a)(6))." See, Warrant Application and
Order.

     On March 1, 1990, the Secret Service seized the following
property on the premises of Steve Jackson Games, Inc.: Compuadd
keyboard; Packard-Bell monitor; DKT computer; cardboard box
containing disks, miscellaneous papers and circuit boards; Splat
Master gun with "Mentor" on barrel; Hewlett-Packard laser jet
printer; BTC keyboard with cover; IBM personal computer 5150
(disassembled); Seagate Tech hard disk; 2400 modem 1649-1795 with
Dower supply and disk; IBM keyboard; Amdek mode[l] 31OA; bulletin
board back-up files (approximately 150); Empac International
Corporation XT computer; "WWIV" users manual; red box of floppy
disks; miscellaneous papers and notes from desk; floppy disk
entitled "Phoenix setup." See, Warrant Return.

     The evidence establishes the actual information seized,
including both the primary source and back-up materials of the
draft of Gurps Cyberpunk, a book intended for immediate publication
(within days to weeks) , drafts of magazine and magazine articles
to be published, business records of Steve Jackson Games,
Incorporated (including contracts and drafts of articles by writers
of Steve Jackson Games, Incorporated), the Illuminati bulletin
board and its contents (including public announcements, published
newsletter articles submitted to the public for review, public
comment on the articles submitted and electronic mail containing
both private and public communications) . Notwithstanding over 300
floppy disks being seized, the evidence introduced during trial was
not clear as to what additional information was seized during the
search warrant execution. However, the evidence is clear that on
March 1, 1990, "work product materials, " as defined in 42 U.S.C.
2000aa-7 (b), was




          - 16 -
obtained as well as materials constituting "documentary materials"
as defined in the same provision.'

     The Privacy Protection Act, 42 U.S.C. 2000aa, dictates:
"Notwithstanding any other law, it shall be unlawful for a
government officer or employee, in connection with the
investigation . . . of a criminal offense to search for or seize
any work product materials possessed by a person reasonably
believed to have a purpose to disseminate to the public a
newspaper, broadcast, or other similar form of public communication
. . ."  See, 42 U.S.C. [sec] 2000aa(a).

     Assuming Agent Foley was knowledgeable of the Privacy
Protection Act (which he was not), neither he nor Assistant United
States Attorney Cox had any information which would lead them to
believe that Steve Jackson Games, Incorporated published books and
materials and had a purpose to disseminate to the public its
publications. Their testimony is simply they thought it a producer
of games. As heretofore stated, the Court feels Agent Foley failed
to make a reasonable investigation of Steve Jackson Games,
Incorporated when it was apparent his intention was to take
substantial properties belonging to the corporation, the removal of
which could have a substantial effect on the continuation of



    7 If the Secret Service, in the performance of executing Court
order, had only obtained and taken the 911 document or alleged
decryption materials, application of the definitions of
"documentary materials" and "work product materials" would
logically result in no violation of the statute under the
circumstances of this case. It was the seizing all documents and
information and, thereafter, the failure to promptly return the
information seized which leads to violation of the statute.

                    - 17 -
business. Agent Foley, it appears, in his zeal to obtain evidence
for the criminal investigation, simply concluded Steve Jackson
Games, Incorporated was somehow involved in Blankenship's alleged
activities because of the wording of the Illuminati bulletin board
menu. In any event, the Court declines to find from a preponderance
of the evidence that on March 1, 1990, Agent Foley or any other
employee or agent of the United States had reason to believe that
property seized would be the work product materials of a person
believed to have a purpose to disseminate to the public a
newspaper, book, broadcast or other similar form of public
communication.'8

8    'The legislative history to the Privacy Protection Act states:

          ...the Committee recognized a problem for the law en-
          forcement officer, who seeking to comply with the
          statute, might be uncertain whether the materials he
          sought were work product or nonwork product and that they
          were intended for publication. Therefore, in the
          interests of allowing for some objective measure for
          judgment by the office, the Committee has provided that
          the work product must be possessed by someone "reasonably
          believed" to have a purpose to communicate to the public.

S. Rep. No. 874, 96th Cong., 2nd Sess., 10 (1980), reprinted in
1980 U.S.C.C.A.N. 3950, 3957. As the Court has stated, Agent Foley
with only a few hours of investigation would have "reasonably
believed" Steve Jackson Games, Incorporated had "a purpose to
communicate to the public." Therefore, under an objective standard,
assuming a reasonable investigation, Agent Foley and the Secret
Service violated the statute on March 1, 1990. However, Agent Foley
was not aware of the Privacy Protection Act and was therefore not
"seeking to comply" with its requirements. Consequently, the Court
found on March 1, 1990 neither Agent Foley nor any other employee
or agent of the United States "reasonably believed" the materials
seized were work product or Steve Jackson Games, Incorporated had
a "purpose to disseminate to the public."

                    - 18 -
     During the search on March 1, and on March 2, 1990, the Secret
Service was specifically advised of facts that put its employees on
notice of probable violations of the Privacy Protection Act. It is
no excuse that Agents Foley and Golden were not knowledgeable of
the law. On March 2, 1990, and thereafter, the conduct of the
United States Secret Service was in violation of 42 U.S.C. 2000aa
et seq. It is clear the Secret Service continued the seizure of
property of Steve Jackson Games, Incorporated including information
and documents through late June of 1990. Immediate arrangements
could and should have been made on March 2, 1990, whereby copies of
all information seized could have been made. The government could
and should have requested Steve Jackson as chief operating officer
of the corporation to cooperate and provide the information
available under the law. The Secret Service's refusal to return
information and property requested by Mr. Jackson and his lawyers
in Dallas and Austin constituted a violation of the statute.
Regarding any information seized that would constitute 'documentary
materials" (whereby the defensive theory of 42 U.S.C. 2000aa(b) (3)
might apply) there would have been no problem as the property was
in the possession of the United States Secret Service and their
experts and Steve Jackson were present to ensure no destruction,
alteration or concealment of information contained therein. In any
event, it is the seizure of the "work product materials" that leads
to the liability of the United States Secret Service and the United
States in this case. Pursuant to 42 U.S.C. 2000aa-6, the Court
finds from a preponderance of the evidence that Steve Jackson

          - 19 -
Games, Incorporated is entitled to judgement against the United
States Secret Service and the United States of America for its
expenses of $8,781.00 and its economic damages of $42,259.00. The
Court declines to find from a preponderance of the evidence other
damages of Steve Jackson Games, Incorporated or liability of the
United States Secret Service or the United States of America to any
other Plaintiff under the provisions of the Privacy Protection Act.

                               b.

          WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION
             AND INTERCEPTION OF ORAL COMMUNICATIONS
                     18 U.S.C. 2510 et seq.

     The Plaintiff s allege the United States Secret Service " s
conduct also violated 18 U.S.C. 2510, et seq., as it constituted
intentional interceptions of "electronic communication. " They
allege the interception occurred at the time of seizure or,
perhaps, at the time of review of the communication subsequent to
the seizure. There is no question the individual Plaintiffs had
private communications stored in Illuminati at the time of the
seizure and the court has found from a preponderance of the
evidence the Secret Service intended not only to seize and read
these communications, but, in fact, did read the communications and
thereafter deleted or destroyed some communications either
intentionally or accidentally. The Defendants contend there is no
violation of this particular statute under the facts of this case
because there never was any unlawful "interception" within the
meaning of the statute. Alternatively, the Defendants contend that
the "good faith reliance" on the search warrant issued by the


               - 20 -
United States Magistrate Judge is a complete defense under Section
2520 .

     The Government relies on the 1976 Fifth Circuit case of the

United States v. Turk, 526 F.2d 654 (5th Cir. 1976), cert denied,
429 U.S. 823, 97 S.Ct. 74 (1976), and its interpretation of the
statutory definition of "interception." In Turk, police officers
listened to the contents of a cassette tape without first obtaining
a warrant. The court concluded this was not an "interception" under
18 U.S.C. [sec] 2510 et seq.

     Whether the seizure and replaying of the cassette tape by the
     officers was also an "interception" depends on the definition
     to be given "aural acquisition." Under one conceivable
     reading, and "aural acquisition" could be said to occur
     whenever someone physically hears the contents of a
     communication, and thus the use of the tape player by the
     officers to hear the previously recorded conversation might
     fall within the definition set out above. No explicit
     limitation of coverage to contemporaneous "acquisitions"
     appears in the Act.
          We believe that a different interpretation -- one which
     would exclude from the definition of "intercept" the replaying
     of a previously recorded conversation -- has a much firmer
     basis in the language of S 2510(4) and in logic, and
     corresponds more closely to the policies reflected in the
     legislative history. The words "acquisition... through the use
     of any ... device" suggest that the central concern is with
     the activity engaged in a the time of the oral communication
     which causes such communication to be overheard by uninvited
     listeners. If a person secrets a recorder in a room and
     thereby records a conversation between two others, an
     "acquisition" occurs at the time the recording is made. This
     acquisition itself might be said to be "aural" because the
     contents of the conversation are preserved in a form which
     permits the later aural disclosure of the contents.
     Alternatively, a court facing the issue might conclude that an
     "aural acquisition" is accomplished only when two steps are
     completed -- the initial acquisition by the device and the
     hearing of the communication by the person or persons
     responsible for the recording. Either of these definitions
     would require participation by the one charged with an
     "interception" in the contemporaneous acquisition of the
     communication through the use to the device. The argument that
     a new and different "aural acquisition" occurs each time a
     recording of an oral
     communication is replayed is unpersuasive. That would mean
     that innumerable "interceptions," and thus violations of the
     Act, could follow from a single recording.

Id., at 657-658 (footnotes omitted). While the Fifth Circuit
authority relates to the predecessor statute, Congress intended no
change in the existing definition of "intercept" in amending the
statute in 1986. See, S. Rep. No. 541, 99th Cong., 2nd Sess. 13
(1986), reprinted in 1986 U.S.C.C.A.N. 3555, 3567 ("Section
101(a)(3) of the ELECTRONIC COMMUNICATIONS PRIVACY ACT amends the
definition of the term "intercept" in current section 2510(4) of
title 18 to cover electronic communications. The definition of
"intercept" under current law is retained with respect to wire and
oral communications except that the term "or other" is inserted
after "aural." This amendment clarifies that it is illegal to
intercept the non-voice portion of a wire communication."). The
Court finds this argument persuasive when considering the
Congressional enactment of the Stored Wire and Electronic
Communications and Transactional Records Access Act, 18 U.S.C.
2701, et seq.

     The Court declines to find liability for any Plaintiff against
the Defendants pursuant to the Wire and Electronic Communications
Interception and Interception of Oral Communications Act, 18
U.S.C.2510, et seq., and specifically holds that the alleged
"interceptions" under the facts of this case are not
"interceptions"contemplated by the wire and Electronic
Communications Interception and Interception of Oral Communications
Act. It simply has no applicability to the facts of this case.

                              - 22-
                               c.

            STORED WIRE AND ELECTRONIC COMMUNICATIONS
                AND TRANSACTIONAL RECORDS ACCESS
                  18 U.S.C. [sec] 2701 et seq.

     Prior to February 28, 1990, Agent Foley, Assistant United
States Attorney Cox, and the computer consultants working with them
were cognizant of public computer bulletin boards and the use of
electronic communications and E-mail through them. Each of the
persons involved in this investigation, including Agent Foley, had
the knowledge and opportunity to log into the Illuminati bulletin
board, review its menu and user lists, obtain passwords, and
thereafter review all information available to the public. In fact,
Agent Foley erroneously thought Kluepfel had done this when a
printout of Illuminati documents dated February 25, 1990, was
received. When Foley applied for the search warrant on February 28,
1990, he knew the Illuminati bulletin board provided services to
the public whereby its users could store public and private
electronic communications. While Foley admits no knowledge of the
Privacy Protection Act and its provisions protecting publishers of
information to the public, he testified he was knowledgeable
regarding the Wire and Electronic Communications Interception and
Interception of Oral Communications Act. But, Foley never thought
of the law's applicability under the facts of this case. Steve
Jackson Games, Inc., through its Illuminati bulletin board
services, was a "remote computing service" within the definition of
Section 2711, and, therefore, the only procedure available to the
Secret Service to obtain "disclosure" of the contents of electronic


          - 23 -
communications was to comply with this statute. See,  18 U.S.C. 2
7 0 3 . Agent Foley and the Secret Service, however, wanted more
than "disclosure" of the contents of the communication. As the
search warrant application evidences, the Secret Service wanted
seizure of all information and the authority to review and read all
electronic communications, both public and private. A court order
for such disclosure is only to issue if "there is a reason to
believe the contents of a[n] . . . electronic communication . are
relevant to a legitimate law enforcement inquiry." See, 18 U.S.C.
S 2703(d). Agent Foley did not advise the United States Magistrate
Judge, by affidavit or otherwise, that the Illuminati bulletin
board contained private electronic communications between users or
how the disclosure of the content of these communications could
relate to his investigation. Foley's only knowledge was that
Blankenship had published part of the 911 document and decryption
information in his Phoenix bulletin board, was employed at Steve
Jackson Games, Inc. , and could have the ability to store and
delete these alleged unlawful documents in the computers or
Illuminati bulletin board at Steve Jackson Games, Incorporated. At
Agent Foley's specific request, the application and affidavit for
the search warrant were sealed.                            The
evidence establishes the Plaintiffs were not able to ascertain the
reasons for the March 1, 1990 seizure until after the return of
most of the property in June of 1990, and then only by the efforts
of the offices of both United States Senators of the State of
Texas. The procedures followed by the Secret Service in this case
virtually eliminated the safeguards

     - 24 -
contained in the statute. For example, no Plaintiff was on notice
that the search or seizure order was made pursuant to this statute
and that Steve Jackson Games, Incorporated could move to quash or
modify the order or eliminate or reduce any undue burden on it by
reason of the order. See, 18 U.S.C. [sec] 2703(d). The provisions
of the statute regarding the preparation of back-up copies of the
documents or information seized were never utilized or available.
See, 18 U.S.C. [sec] 2704. Agent Foley stated his concern was to
prevent the destruction of the documents' content and for the
Secret Service to take the time necessary to carefully review all
of the information seized. He feared Blankenship could possibly
delete the incriminating documents or could have programmed
destruction in some manner. Notwithstanding that any alteration or
destruction by Blankenship, Steve Jackson, or anyone else would
constitute a criminal offense under this statute, Foley and the
Secret Service seized -- not just obtained disclosure of the
content -- all of the electronic communications stored in the
Illuminati bulletin board involving the Plaintiffs in this case.
This conduct exceeded the Government's authority under the statute.

     The Government Defendants contend there is no liability for
alleged violation of the statute as Foley and the Secret Service
had a "good faith" reliance on the February 28, 1990, court
order/search warrant. The Court declines to find this defense by a
preponderance of the evidence in this case.

     Steve Jackson Games, Incorporated, as the provider and each
individual Plaintiffs as either subscribers or customers were


          - 25 -
"aggrieved" by the conduct of the Secret Service in the violation
of this statute.  While the Court declines to find from a
preponderance of the credible evidence the compensatory damages
sought by each Plaintiff, the Court will assess the statutory
damages of $1,000.00 for each Plaintiff.

                          III. SUMMARY

     This is a complex case. It is still not clear how sensitive
and/or proprietary the 911 document was (and is) or how genuinely
harmful the potential decryption scheme may have been or if either
were discovered by the Secret Service in the information seized on
March 1, 1990. The fact that no criminal charges have ever been
filed and the investigation remains "on going" is, of course, not
conclusive.

     The complexity of this case results from the Secret Service's
insufficient investigation and its lack of knowledge of the
specific laws that could apply to their conduct on February 28,
1990 and thereafter. It appears obvious neither the government
employees nor the Plaintiffs or their lawyers contemplated the
statute upon which this case is brought back in February, March,
April, May or June of 1990. But this does not provide assistance to
the defense of the case. The Secret Service and its personnel are
the entities that citizens, like each of the Plaintiffs, rely upon
and look to protect their rights and properties. The Secret Service
conduct resulted in the seizure of property, products, business
records, business documents, and electronic communications




          - 26 -
of a corporation and f our individual citizens that the statutes
were intended to protect.

     It may well be, as the Government Defendants contend, these
statutes relied upon by the Plaintiff s should not apply to the
facts of this case, as these holdings may result in the government
having great difficulties in obtaining information or computer
documents representing illegal activities. But this Court cannot
amend or rewrite the statutes involved. The Secret Service must go
to the Congress for relief. Until that time, this Court recommends
better education, investigation and strict compliance with the
statutes as written.

     The Plaintiffs are ordered to submit application for
attorney's fees and costs with appropriate supporting affidavits
within ten (10) days of the date of this order. The Defendants will
have ten days thereafter to file their responses.


     SIGNED this the s/12  day of March, 1993.




          Sam Sparks United States District Judge



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