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Peter Hall and Big Bad Productions, Inc. v. Earthlink Network Inc.

2005 U. S. App. Lexis 1230 (2d Cir. January 25, 2005)

The Second Circuit holds that an Internet Service Provider does not violate Title I of the Electronic Communications Privacy Act when, in the ordinary course of its business, it continues to receive and store emails sent to the email address of a terminated account holder.

Plaintiff, an independent film producer, opened an email account with Earthlink Network Incorporated (“Earthlink”).  Earthlink was informed that plaintiff was using this account to send “spam” and terminated plaintiff’s access to it.  Six days later, Earthlink determined that this information was incorrect, and forwarded 16 emails addressed to this account that it received to another of plaintiff’s non-Earthlink email accounts.  Plaintiff’s email account with Earthlink was not, however, reopened.  The parties disagree as to why this did not occur.  Over an ensuing one year period, Earthlink received and stored 591 emails addressed to this account.  It subsequently forwarded them, en masse, to plaintiff.

Plaintiff commenced this action, charging, inter alia, that Earthlink’s receipt of these 591 emails constituted a violation of Title I (Wiretap Act) of the Electronic Communications Privacy Act (the “Act” or “ECPA”), and that its conduct constituted a breach of the parties’ contractual arrangements.

The Second Circuit affirmed the district court’s grant of summary judgment, dismissing these claims.

Title I of the ECPA prohibits the unauthorized interception of electronic communications.  Under the Act, the term “intercept” is defined as “the aural or other acquisition of the contents of any … electronic … communication through the use of any electronic, mechanical, or other device.”  18 U.S.C. Section 2510(4). 

The Act has an “ordinary course of business exception” designed to exempt from its prohibitions Internet Service Providers, telephone companies and others who acquire third party electronic communications in the ordinary course of their businesses of transmitting the same.  The Act achieves this result by excluding from the definition of “electronic, mechanical or other device” “any telephone or telegraph instrument, equipment or facility, or any component thereof … being used by a provider of wire or electronic communication service in the ordinary course of its business.”

Because only interceptions using “electronic, mechanical or other devices” are prohibited, this exception ensures that the receipt by ISPs of electronic communications in the ordinary course of their businesses does not run afoul of the Act.

Plaintiff argued that this exception did not apply to Earthlink, because it used equipment other than “telephone or telegraph instruments, equipment or facilities” in its acquisition of the communications at issue.  While recognizing that the provisions of 2510(5)(a) were “arguably ambiguous,” the Second Circuit rejected this interpretation, holding instead that the exception applied to “any … equipment or facility” being used by an ISP in the ordinary course, telephone or otherwise.  Said the Court:

We hold that Earthlink’s continued reception of emails sent to lot99 did not constitute an interception under the ECPA because it was conducted as part of the “ordinary course of [Earthlinks’] business.”  See 18 U.S.C. Section 2510(5)(a).

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If ISPs were not covered by the ordinary course of business exception, ISPs would constantly be intercepting communications under ECPA because their basic services involve the “acquisition of the contents” of electronic communications.  See 18 U.S.C. Section 2510(4).  Congress could not have intended this absurd result.  Thus, we hold that ISPs do not “intercept” if they are acting within the ordinary course of their businesses.

Because it found, based on undisputed evidence presented by Earthlink, that its ordinary course of business during the time period in question was to recover and store emails of terminated account holders, the Court held that Earthlink was protected by the statute’s exception, and affirmed the dismissal of the ECPA claims against it.

The court also affirmed the dismissal of plaintiff’s breach of contract claim, finding his claim for consequential damages too speculative.  Plaintiff had claimed that the termination of his account prevented him from properly promoting a film, which, in turn, caused the film to do poorly, and adversely impacted his career.  Based on the evidence he presented, the Court found these claimed damages too speculative, and affirmed their dismissal by the district court.

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