Is the US Stored Communications Act fit for purpose? Matt Packer unpicks the Crispin v Audigier case to find out how the Act is influencing e-discovery from social networks

An enduring pearl of legal wisdom holds that a verbal contract is not worth the paper it’s printed on. Now that digital communications are more prolific than ever, a verbal contract is also a passport to hugely tangled lawsuit logistics – as an artist named Buckley Crispin would surely admit.

It was he who provided an ‘oral licence’ in 2005 to Californian designer Christian Audigier, allowing Audigier’s label to reproduce select Crispin works on an edgy range of street clothes. In the lawsuit that followed (Buckley H Crispin v Christian Audigier Inc), Crispin alleged that his artwork had been printed on a far wider range of goods than he had first agreed – and that Audigier had sublicensed several Crispin works for use by other designers without consent.

Apart from the lessons it may teach us about IP licensing – and there are many – the case has become more important for its e-discovery insights.

In February, Audigier’s legal team subpoenaed the social networks Facebook and MySpace, plus web-hosting entity Media Temple, for subscriber details on Crispin held by those sites – and any digital communications that Crispin had issued to Audigier and the sublicensees. The defence team aimed to use this evidence as a means of triangulating the precise nature of the original agreement… to reconstruct a physical contract out of clues to the verbal one, in order to pin down its parameters.

Crispin’s team responded with a motion to quash the subpoenas, citing three objections: i) that the request was irrelevant as no formal agreement had ever been written, so reverse-engineering a licence from peripheral messages would not amount to a bona-fide contract; ii) that the subpoenas requested details protected by privacy rights, the doctrine of trade secrets and the attorney-client privilege; and most crucially iii) that the sources of the requested materials were protected by the Stored Communications Act (SCA).

A battle over scope

Put into force in 1990, the SCA is part of the US Electronic Communications Privacy Act: a piece of legislation passed in 1986, a good decade before the emergence of the world wide web as we know it. In the Court of the Central District of California, Judge John McDermott denied Crispin’s motion. In his interpretation, the SCA as drafted did not provide Facebook, MySpace or Media Temple with protection from disclosure because the services provided by those sites were not within the statute’s scope. Essentially, the SCA covers servers or hard drives that were state of the art in the mid-1980s – devices often referred to in IT-speak as ‘virtual filing cabinets’. As such, the Act had barely begun to anticipate the flexible, multi-platform nature of today’s social networks.

Crispin immediately moved for reconsideration. In late May, the Californian Central District Court’s Judge Margaret Morrow was faced with the responsibility of leading the first ever US legal review of the SCA in the context of social networks and web hosting entities. Testing McDermott’s order against the letter of the law, Morrow found her colleague’s analysis wanting.

In her ruling, Morrow referred to the 2001 case Robert Konop v Hawaiian Airlines. In that case, Konop – a disgruntled former pilot for Hawaiian – had operated a password-protected website used by Hawaiian employees to exchange their views about the company. The site came to the attention of Hawaiian’s vice president, James Davis, who used password-holding proxies to obtain details of the discussions. Citing the SCA, Konop sued Hawaiian and won – but not without a battle over the law’s scope.

Fertile turf

‘As noted in Konop,’ Morrow wrote, ‘the difficulty in interpreting the statute is “compounded by the fact that the [SCA] was written prior to the advent of the internet and the world wide web. As a result, the existing statutory framework is ill suited to address modern forms of communication [such as Facebook and MySpace]. Courts have struggled to analyse problems involving modern technology within the confines of this statutory framework, often with unsatisfying results.”’

Judge McDermott, Morrow added, ‘found that the SCA prohibits only the disclosure of communications held in “electronic storage” by the provider, and that the materials were not in electronic storage as that term is defined in the statute’. In Morrow’s view, McDermott had zeroed in too closely on the public messaging aspects of the sites, to the exclusion of their private messaging services. Finding that the latter fell within the scope of the SCA, Morrow reversed McDermott’s order and quashed the subpoenas.

As it stands, the ruling won’t set a precedent because it occurred at District Court level, on a ‘first impression’ basis. Any higher and other courts would have been compelled to follow its outcome. As social networks provide ever more fertile turf for case evidence, the legal services industry will be thinking ahead to how the SCA could affect its activities. Could an anachronistic law, almost a quarter of a century old, continue to set the limits of discoverability, depending on how it is interpreted?

It will be fascinating to see how the industry reacts – and whether US lawmakers will see fit to update the SCA.


Look out for further articles on e-discovery in the summer 2010 issue of Legal Strategy Review, including an interview with e-discovery expert Jonathan Redgrave