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- Computer underground Digest Thu Mar 25 1993 Volume 5 : Issue 22
- ISSN 1004-042X
-
- Editors: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
- Archivist: Brendan Kehoe
- Shadow-Archivists: Dan Carosone / Paul Southworth
- Ralph Sims / Jyrki Kuoppala
- Ian Dickinson
- Copy Eater: Etaion Shrdlu, Senior
-
- CONTENTS, #5.22 (Mar 25 1993)
- File 1--Judge Spark's Decision in Steve Jackson Games Suit
-
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- ----------------------------------------------------------------------
-
- Date: Thu, 25 Mar 93 19:22:49 PST
- From: Anonymous@well.sf.ca.us
- Subject: File 1--Judge Spark's Decision in Steve Jackson Games Suit
-
- ALTHOUGH THIS IS A PUBLIC DOCUMENT-IF YOU POST THIS OPINION
- PLEASE RETAIN THIS CREDIT:FIRST BBS POSTING-FLETC-INFONET
- KFM M-SYSOP- 3-24-93 9:32PM- THANKS
-
- 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 All other issues and parties have been withdrawn by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
-
-
-
- -27-
-
- ------------------------------
-
- End of Computer Underground Digest #5.22
- ************************************
-
-