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S2 | MONDAY, SEPTEMBER 26, 2016 | White-Collar Crime | NYLJ.COM
How Proposed Changes to the ECPA Affect Privacy Interests in Investigations
BY JOSHUA NEWVILLE AND LINDSEY A. OLSON
P rivacy advocates cheered the Second Cir- cuit’s July 2016 Microsoft v. United States decision holding that electronic com-
munications stored abroad cannot be seized from an internet service provider (ISP) with a search warrant under the Stored Communica- tions Act (SCA). Coupled with recent efforts to amend the Electronic Communications Privacy Act of 1986 (the ECPA), the pendu- lum has swung in favor of privacy protection from government access for remotely-stored
electronic data. Today it is growing harder for the government to obtain personal email content.
For financial fraud investigations, the pro- posed amendments to the ECPA could have significant consequences. The amendments may lead to earlier and greater cooperation between civil agencies like the SEC and the Department of Justice. It may become more difficult for the SEC to meet the standard for scienter in cases where individuals used per- sonal email accounts as part of the alleged misconduct. Finally, in light of the Second Circuit’s recent decision in Microsoft, an ISP’s decision to maintain its customers’ cloud stor-
age data in a foreign location could be a key factor in the privacy analysis.
Current Status of the SCA
The SCA allows the government to com- pel ISPs to disclose an individual’s electronic communications under certain circumstanc- es. The SCA, Title II of the ECPA, generally addresses electronic communications once they are received and held in storage. ECPA Title I, the Wiretap Act, covers interception of communications in transit, while ECPA Title III addresses pen registers and trap and trace devices. Under the SCA, there are three general
categories at issue, each with different levels of protection, listed from highest to lowest:
• Email content held in storage for 180 days or less can be obtained only with a search warrant under §2703(a), which does not require notice to the subscriber (18 U.S.C. §2703(b)(1)(A)).
• Under the SCA, email content held for more than 180 days is obtainable by warrant or administrative subpoena with notice to the subscriber (or delayed notice under certain circumstances) under §2703(b) – at least prior to the Warshak decision (see below).
• Basic subscriber and session informa- tion listed in 18 U.S.C. §2703(c)(2), includ- ing IP addresses, can be compelled using an administrative subpoena without notice to the subscriber.
However, in 2010, the U.S. Court of Appeals for the Sixth Circuit held in United States v. Warshak, 632 F.3d 266 (6th Cir. 2010) that SCA §2703(b) was unconstitutional to the extent it allowed the government to compel email content using an administra- tive subpoena. Warshak found that, under the Fourth Amendment, users have a rea- sonable expectation of privacy in emails stored by their ISP, and as such, seizure of those emails would require a warrant based on probable cause. As the concurrence in Microsoft noted, the DOJ has incorporated the Warshak decision into its official policy and, as a matter of course, seeks warrants to obtain the contents of emails even where the SCA allows for a less-protective stan- dard. We understand that the SEC has also generally refrained from using §2703(b) administrative subpoenas since Warshak.
Technical Limitations of the SCA/ECPA
The SCA was written in the 1980s, when the Internet was in its infancy and when
JOSHUA M. NEWVILLE is a partner and LINDSEY A. OLSON is an associate in the litigation department at Proskauer Rose in New York.
S4
Of Redbirds and Rockets: Corporate Espionage And America’s Pastime BY ANDREW GARBARINO
S6 Correspondent Banking: A Gateway To Money Laundering Requires Heightened Scrutiny
BY CAROLINA A. FORNOS AND KATHERINE A. LEMIRE
Inside
S7 Beyond Compliance:
Three Tips From Recent Cases
BY MATTHEW D. CIPOLLA AND LORENZO DI SILVIO
S8 Cases Illustrate Weaknesses in N.Y. Theft Statutes and Need
For Reform
BY ADAM KAUFMANN, ANTHONY CAPOZZOLO
AND MIRELLA DEROSE
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