Stored Communications Act limits Gmail information obtainable pursuant to subpoena

Beluga Shipping GMBH & Co. KS Beluga Fantastic v. Suzlon Energy LTD., 2010 WL 3749279 (N.D. Cal., Sept. 23, 2010)

Court rules that under the Stored Communications Act, account holder consent is required to obtain copies of emails in Google’s possession. Before you issue a subpoena seeking copies of emails, read Beluga Shipping.

Suzlon is the third largest wind turbine manufacturer in the world. In an action pending in the Federal Court in New South Wales Australia, Suzlon brought cross claims for fraud and breach of fiduciary duty against several of its former employees who were imprisoned in India.

Suzlon believed that its former employees used internet mail accounts hosted by Google to perpetrate their fraud. Therefore, it filed a petition under 28 U.S.C. §1782 to obtain discovery from Google. 28 U.S.C. §1782 provides the means by which parties to a foreign proceeding can obtain discovery in the United States for use in that proceeding. The Federal Rules of Civil Procedure apply in §1782 proceedings unless the court prescribes a different procedure to follow. In Beluga Shipping, the district court applied the Federal Rules of Civil Procedure.

In its §1782 petition, Suzlon sought leave to issue subpoenas to Google to obtain all emails sent or received by its former employees using specific Gmail accounts. Suzlon also sought any records establishing when those Gmail accounts were created, the name provided to Google by the user of each account during the account creation process, the country in which each account was created, how Google stores or saves emails in its Gmail accounts and how information regarding when emails sent to and from a Gmail account is recorded and stored.

The district court permitted Google to intervene and oppose Suzlon’s petition. Google argued that under the Stored Communications Act, 18 U.S.C. §§2701-2712, consent of the individual account holders is required, and that unless their consent is obtained, it could not lawfully comply with Suzlon’s subpoena.

In response, Suzlon cited Zheng v. Yahoo, Inc., 2009 U.S. Dist. LEXIS 111886 (N.D. Cal., Dec. 2, 2009), and argued that the Stored Communications Act does not apply to foreign citizens. Therefore, Suzlon argued that Google was obligated to comply with its subpoena. However, the district court found Zheng inapplicable because “the email interceptions and disclosures occurred outside of the United States by a company whose servers were located outside the United States.” In the court’s view, these factors led to Zheng’s conclusion that the Stored Communications Act does not apply to foreign nationals. However, because Google and its servers are located in the United States, the district court concluded that the Stored Communications Act was applicable in the case before it.

Because Suzlon had not obtained the consent of its former employees, the district court denied, its petition to subpoena the emails of those employees, without prejudice to a renewed showing that the account holders’ consent had been obtained. The court did direct Google to produce documents which established when the specific Gmail accounts in question were created, the actual names of the email account holders provided to Google during the account creation process and the countries from which the specific Gmail accounts were created. The court further directed Google to continue to preserve the emails contained in the specific Gmail accounts in question pending a showing of consent by the account holders.

Despite the unusual procedural context in which this decision arose, the Beluga Shipping decision is significant for any litigant who seeks information from a provider of internet email service such as Google, Yahoo or Hotmail. Without the consent of the account holder, parties may be unable to obtain by subpoena emails that were sent or received by the account holder. So, first seek the consent of the account holder and if that fails, consider a motion asking the court to compel the account holder’s assent. Additionally, when communications occur through applications found in the “cloud,” the Stored Communications Act can raise a similar impediment to obtaining communications stored in the cloud.

Attorney-client privilege trumps an employer’s electronic communications and computer use policy

Stengart v. Loving Care Agency, Inc., 973 A.2d 390 (N.J. Super. A.D., 2009 WL 1811064 (N.J. Super. A.D.)

Introduction.

Stengart addressed whether the attorney-client privilege protected a former employee’s emails that were sent to her attorney using a company-issued laptop computer through a personal, password-protected, web-based (Yahoo) email account. The emails addressed a lawsuit the former employee contemplated bringing against her employer and were sent to the employee’s personal attorney prior to her resignation from the company. The company obtained the emails after suit was filed by making a forensic image of the computer’s hard drive and extracting them from the plaintiff’s internet browser history.

The court in Stengart concluded the emails were privileged, holding the policy considerations underlying the attorney-client privilege “substantially outweighed” the company’s interest in enforcing its computer use and electronic communications policy. The decision is also significant in that the court remanded for an evidentiary hearing to determine whether the company’s attorneys should be disqualified or if some other sanction should be imposed as a result of their failure to comply with Rule 4.4(b) of the New Jersey Rules of Professional Conduct. The New Jersey rule, like Rule 4.4(b) of the Model Rules, requires that whenever a lawyer has reasonable cause to believe that a document was inadvertently produced, the lawyer should not read it, and must promptly notify the sender.

The court’s decision in Stengart should be contrasted with Scott v. Beth Israel Medical Center, 17 Misc. 934, 847 N.Y.S.2d 436 (2007), which held the attorney-client privilege was lost when the plaintiff used the company’s email system to communicate with his attorney in view of the company’s no personal use and email monitoring policies coupled with the plaintiff’s awareness of those policies. The Stengart and Beth Israel decisions demonstrate that whether an employee’s communication with personal counsel retains its privileged nature when made via the company’s computer or email system involves a fact-specific inquiry. This post will address those decisions and will outline the factors that courts have examined when addressing the issue of attorney-client privilege in this context.

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