Online "Bookmaking"

I’ve done at least one post on how U.S. law (federal law, in that instance) approaches online gambling (or gaming). This post is about a recent Washington Supreme Court that addressed the issue of online gambling under Washington state law.

The case is a civil action, a declaratory judgment action, to be precise. As Wikipedia notes, a declaratory judgment is

a judgment of a court in a civil case which declares the rights, duties, or obligations of one or more parties in a dispute. A declaratory judgment is legally binding, but it does not order any action by a party. . . .

A declaratory judgment is typically requested when a party is threatened with a lawsuit but the lawsuit has not yet been filed; or when it is thought by one of two (or more) parties that their rights under law and/or contract might conflict. . . .

The declaratory judgment action in this case was brought by Internet Community & Entertainment Corp., d/b/a Betcha.com (Betcha). Internet Community & Entertainment Corp. v. Washington State Gambling Commission, __ P.3d __, 2010 WL 3432595 (Washington Supreme Court 2010) [hereinafter Betcha v. Gaming Commission]. The issue was “whether Betcha has engaged in `professional gambling’ within the meaning of Washington's gambling act”. Betcha v. Gaming Commission, supra.

This is how the Washington Supreme Court described Betcha:

For a fee, registered Betcha users could post proposed wagers on the outcomes of certain events for other users to accept. Posted wagers on Betcha have ranged from sporting events, to political contests, to whether the moon would be full on a given night. Offerors were able to set the terms of the wager, including whatever stakes and odds they concluded were appropriate. Offerors were required to first fund an account with a credit card to ensure offerors had enough money to `cover’ their bets if they lost. . . . [T]hose accepting an offer to wager were required to have enough funds in their accounts to cover the bets before wagers could be accepted. Once a bet was accepted, Betcha placed the wagered funds into escrow and froze the account pending the outcome of the wagered on event. Betcha . . . charg[ed] a fee whenever a bettor listed a bet, accepted a proposed bet, proposed a counteroffer to a bet, or posted an offer in a larger font size and a more prominent location.

Once a wagered event was complete, bettors submitted claims that they had won or lost the bets or that the bets were ambiguous. If the losing bettor agreed to the loss, Betcha would transfer the money from escrow to the winning bettor's account. . . . [A] losing bettor had up to 72 hours after a winning claim was made to choose not to pay the loss. . . . by simply clicking a button on their computer screens. If a bettor did not exercise the option not to pay within 72 hours of a winning claim, or otherwise respond to the claim, Betcha would transfer the money from escrow to the winning claimant's account. . . .

Every registered user . . . was given an `honor rating,’ . . . representing the relative trustworthiness of a bettor. . . . Honor ratings were based on various factors including, among other things, the size of a user's bets, negative feedback from other users, and the promptness with which a bettor paid losses.

Betcha v. Gaming Commission, supra. Not long after Betcha launched, agents from the Washington

State Gambling Commission met with Nicholas Jenkins, Betcha's founder and principal. The Commission had determined that Betcha was engaged in professional gambling and ordered Betcha to cease operations. Jenkins disputed the claim that Betcha was engaged in professional gambling, arguing that because bettors are not compelled to pay their losses, they are not gambling.

Betcha v. Gaming Commission, supra. It was at this point that Betcha filed the action for a declaratory judgment. The trial judge held that Betcha was engaged in “booking” and “professional gambling” in violation of Washington state law, the Court of Appeals reversed the trial court judge and the case went to the state Supreme Court. Betcha v. Gaming Commission, supra.

The Washington Supreme Court began its opinion by noting that the resolution of the case depended “in large part” on whether Betcha was engaged in “professional gambling” as that term is defined under Washington law. Betcha v. Gaming Commission, supra. Section 9.46.0269(1) of the Washington Revised Code says that a person is engaged in professional gambling when

(a) Acting other than as a player . . ., the person knowingly engages in conduct which materially aids any form of gambling activity; or

(b) Acting other than in a manner authorized by this chapter, the person pays a fee to participate in a card game, contest of chance, lottery, or other gambling activity; or

(c) Acting other than as a player or in the manner authorized by this chapter, the person knowingly accepts or receives money or other property pursuant to an agreement or understanding with any other person whereby he or she participates or is to participate in the proceeds of gambling activity; or

(d) The person engages in bookmaking. . . .

The Supreme Court explained that

subsections (a)-(c) define `professional gambling’ in relation to a person's involvement in `gambling activity while subsection (d) defines `professional gambling as engaging in `bookmaking.’ Thus, a person may be involved in `professional gambling if he or she engages in various forms of `gambling activity’ or engages in `bookmaking.’

Betcha v. Gaming Commission, supra.

The Supreme Court found that Betcha was engaged in bookmaking, which Washington Revised Code § 9.46.0213 defines as “accepting bets, upon the outcome of future contingent events, as a business or in which the bettor is charged a fee . . . for the opportunity to place a bet.” The Court of Appeals had held that Betcha was not engaged in bookmaking because bookmaking required that the person/entity “take a position in the bets”, which Betcha did not. Betcha v. Gaming Commission, supra. The Supreme Court explained that the Court of Appeals erred, because the statute defined bookmaking as “either accepting bets as a business or charging a fee for the opportunity to place a bet”. Betcha v. Gaming Commission, supra. The Supreme Court then held that Betcha was, in fact, engaged in bookmaking:

Although Betcha did not take a position on the bets listed on its web site, it did charge its users a fee for the opportunity to place bets with others. Betcha's entire business model was based on charging fees from those wishing to bet on its web site. Users . . . were allowed to send bets to Betcha, which would post them on its web site for a fee. Betcha charged fees `for the opportunity to place a bet.’ It was unambiguously engaged in `bookmaking’ as that term is defined under the gambling act.

Betcha v. Gaming Commission, supra.

Betcha had argued that it could not have engaged in bookmaking unless it was first

engaged in gambling activity. It argues that the word `bets’ as used in the [relevant Washington statute] necessarily implies gambling bets and that because bettors were told they had no obligation to pay their losses, no gambling . . . occurred on its web site. We disagree. Under the statutory definition of bookmaking, it is immaterial whether or not Betcha users were engaged in gambling activity. . . .

[T]he statute does not require that `bets’ be “gambling bets” in order for a business or individual to be engaged in `bookmaking.’ Unlike many of the other statutory definitions throughout the act, the statutory definition of `bookmaking’ does not contain any reference to `gambling’ or `gambling activity.’ The statute prohibits the charging of a fee `for the opportunity to place a bet.’ The opportunity to place a bet does not require that the bets be paid if lost.. . .We hold that within the plain meaning of [Washington Revised Code § 9.46.0213], bookmaking is charging a fee for the opportunity to place a bet and the term `bet’ does not require that the bet be honored or betting losses be paid.

Betcha v. Gaming Commission, supra (emphasis in the original).

The Washington Supreme Court held that Betcha was “engaged in bookmaking and therefore professional gambling” under Washington law. Betcha v. Gaming Commission, supra. It therefore reversed the Court of Appeals and reinstated the trial court’s judgment, which had held that Betcha was engaged in professional gambling in violation of Washington State law. Betcha v. Gaming Commission, supra. (It also held the company had possessed gambling records and transmitted gambling information over the Internet, two more crimes under Washington state law.)

You can read more about the case here, if you're interested. According to this new story, this decision isn’t “expected to lead to any immediate criminal charges”, which seems odd. So does the fact that, as this news story notes, Betcha was “shut down in 2007 following a raid on the company’s [Seattle-based] offices that was conducted by Washington authorities at the behest of the state of Louisiana.” Those stories make it sound like Washington may just let this go, since the site has apparently been down for almost 3 years . . . ?

Earthquake . . . Cancelled

A little over a year ago I did a post on the 9th Circuit's decision in the Comprehensive Drug Testing case.

As I explained in those posts, in the CDT case the 9th Circuit not only rules on the admissibility of certain evidence, it also set out a set of procedures police were required to follow in searching for and/or seizing digital evidence. In one of my posts on the case, I noted that I really didn't see how the 9th Circuit (or any court, for that matter) had the Constitutional authority to create such procedures and enforce them on law enforcement. In another, I speculated about the extent to which the procedures were analogous to what the Supreme Court did in the 1960s in the Miranda case, which also, of course, specified procedures police must follow in gathering evidence.

According to Wired, the 9th Circuit issued a new decision on rehearing the case in which it backed off on the prescribed digital evidence procedures. I haven't read the case yet, but I might do a post on it, depending on how much, if at all, it says about the earlier decision to prescribe procedures the current decision to back off of them.

The Wired story has a length to the 58-page opinion, if you'd like to check it out for yourself.

“Evidence of Other Crimes, Wrongs, or Acts” and Email

As I noted in an earlier post, Rule 404(b) of the Federal Rules of Evidence provides as follows:

Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. . . .

Rule 404(b) (and similar state rules of evidence) creates an exception to the general rule – which is found in Rule 404(a) of the Federal Rules of Evidence and in similar state provisions – “excluding circumstantial use of character evidence.” Advisory Committee Note – Federal Rule of Evidence 404. As the drafters of Rule 404 noted, character evidence can be used “for the purpose of suggesting an inference that the person acted on the occasion in question consistently with his character. This use of character is often described as `circumstantial.’” Advisory Committee Note – Federal Rule of Evidence 404.

As the drafters also noted, in most

jurisdictions today, the circumstantial use of character is rejected but with important exceptions: (1) an accused may introduce pertinent evidence of good character . . .; (2) an accused may introduce pertinent evidence of the character of the victim, as in support of a claim of self-defense to a charge of homicide . . . ; and (3) the character of a witness may be gone into as bearing on his credibility.

Advisory Committee Note – Federal Rule of Evidence 404. This post is about a case in which the defendant argued that the trial court erred in admitting certain emails pursuant to Rule 404(b), which applied because it’s a federal case.

The case is U.S. v. Hemetek, 2010 WL 3377327 (U.S. Court of Appeals for the 4^th Circuit) and this is how it arose:

In . . . 2005, based on information from a anonymous informant that Hemetek had purchased marijuana seeds over the internet, Sergeant Starcher designated the Hemetek farm for helicopter surveillance. . . . During the flyover of the Hemetek farm, . . . marijuana plants were observed growing in three large plots. . . .

The police approached the farm and received permission to search from [Hemetek’s] son, Richard Lockhart. . . . Richard said Hemetek used to be involved with growing marijuana when she was married to Vaughn Johnson. On arriving . . . while the search was underway, Hemetek stated that when she was married to Johnson, the couple had grown some marijuana but that she had not been associated with it in recent years and that the plants did not belong to her.

Hemetek was indicted on September 16, 2008 . . . and charged with . . . knowingly and intentionally manufacturing, by growing and cultivating, 100 or more marihuana plants. . . in violation of [21 U.S. Code § 841(a)(1)]. . . . [T]he case was set for jury trial. . . .

The government gave notice pursuant to [Rule 404(b)] that it intended to introduce evidence of the correspondence and purchase of the marijuana seeds from medicalseeds.com in the trial . . . to show motive, intent and absence of mistake. [Hemetek] filed a Motion in Limine to suppress the introduction of said evidence. . . .The Court rule that the emails . . . could be introduced . . . at trial. . . . As the case was a circumstantial one only, in that there was no direct connection of [Hemetek] to the marijuana plants located proximate to her property, the admission of the email and the statements acknowledging [she] had prior involvement with marijuana were crucial to the government's case. Had they not been admitted into evidence . . . it is unlikely [Hemetek] would have been convicted. . .

Brief of Appellant, U.S. v. Hemetek, 2010 WL 752208 (2010). According to the prosecution’s brief on appeal, the evidence consisted of an email thread between an

individual with an email address of *6 khemetek @hotmail.com and an entity with the email address, seedorders@medicalseeds.com. The first email stated, `I placed an order in March and my check has been cashed #471 for $350. Could I please have my order or my money back. K. Hemetek, Rt. 1 Box 156, Letart, WV, 25253.’ The second was dated April 28, 2004, and stated, `Greetings, the hold on your cheque was recently removed and your order was shipped. Next time if you wish faster service do not send a payment via cheque. Peace Mary.’

The third message in the thread stated, `The seeds I got were bad - only two out of 20 came up and I had got some from a friend . . . and they all came up. I am asking for a refund of $350 or I am going to post it on the internet site.’ This message . . . referenced an address of `Rt.1, Box 156, Letart, WV, 25253.’ The final message was dated June 15, 2004, and stated, `Greetings, we guarantee 80% germination simply send back the seeds that do not germinate and we can re-ship. Mary.’

Brief of Appellee, U.S. v. Hemetek, 2010 WL 1220268 (2010).

As the 4^th Circuit explained, evidence of “other bad acts” is not admissible under Rule 404(b) if it is used “`to prove the character of a person in order to show action in conformity therewith’” but may be admissible for other purposes “`such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident’”. U.S. v. Hemetek, supra (quoting Rule 404(b)).

The court also noted that when the district court judge gives the jury a limiting instruction that explains “`the purpose for admitting evidence of prior acts,’” the evidence “`will not ... be applied to convict a defendant on the basis of bad character or . . . prior acts. . . . Instead, such evidence will be “probative of elements of the offense in trial.’” U.S. v. Hemetek, supra (quoting U.S. v. Queen, 132 F.3d 991 (U.S. Court of Appeals for the 4^th Circuit 1997)).

In her motion in limine, Hemetek argued that the prosecution,

by using the e-mail, improperly suggested `that because she had bought seeds in the past she was likely to have cultivated the plants, and because of the suspicious circumstances surrounding the discovery of the email, the district court should have suppressed this evidence.’

U.S. v. Hemetek, supra. The 4^th Circuit did not agree:

Despite Hemetek's contentions, the e-mail demonstrates that she had previously sought to purchase and plant marijuana seeds, had the knowledge and intent to cultivate marijuana, and had taken preparatory steps to do so. The e-mail also tends to demonstrate that the presence of marijuana on Hemetek's property was not a mistake or accident, and that she had the motive and opportunity for such cultivation. Thus, the evidence was both relevant to and probative of the charged act of cultivating marijuana. . . .

The evidence was reliable because the e-mail came from her personal e-mail account and contained her name, address, and the number of the check she wrote to pay for the order, confirmed with a copy of the check from her bank. . . . Accordingly, we find that the district court did not abuse its discretion in admitting the e-mail pursuant to Rule 404(b).

U.S. v. Hemetek, supra.

How, you might ask, did law enforcement happen to fly over the Hemetek farm and/or get the emails? According to the prosecution’s brief on appeal,

Sgt. E.B. Starcher of the West Virginia State Police received an anonymous letter at the West Virginia State Police detachment in Mason County, West Virginia. The letter alleged that [Hemetek] was using school computers to correspond with a website affiliated with marijuana. [It] also contained printouts from an apparent series of emails between [Hemetek] and a website called, `medicalseeds.com.’

Brief of Appellee, U.S. v. Hemetek, supra. And how did the anonymous person know this? According to Hemetek’s brief on appeal, at trial the prosecution presented witnesses

associated with New Haven Elementary School, where [Hemetek] was a reading teacher, [the first of whom,] the retired secretary of New Haven Elementary School testified that to get to the computer lab at the school a person would have to enter the front door of the school and pass by her office.

Angela Roach, a computer technology specialist at New Haven Elementary School testified that on February 7, 2005, she and Blythe Powell discovered an email on Hemetek's account on the a computer in the computer lab, when they accessed Hemetek's email account. . . .

Blythe Powell testified that she shared the email with the principal of their school. Linda Rollins, a psychologist and investigator for the Mason County Board of Education, testified that many people were aware of Hemetek's password for her Hotmail account, where the email was accessed by Powell and Roach.

Brief of Appellant, U.S. v. Hemetek.

Oh, . . . and Hemetek was sentenced to serve 60 months in prison. U.S. v. Hemetek, supra.

Extortion and Extra-Territorial Jurisdiction

As a recent Congressional Research Service report explains, crime is ordinarily

proscribed, tried, and punished according to the laws of the place where it occurs. American criminal law applies beyond the geographical confines of the United States, however, under certain limited circumstances. . . . A surprising number of federal criminal statutes have extraterritorial application, but prosecutions have been few. This may be because when extraterritorial criminal jurisdiction does exist, practical and legal complications, and sometimes diplomatic considerations, may counsel against its exercise.

Charles Doyle, Extraterritorial Application of American Criminal Law, Congressional Research Service (March 26, 2010). This post is about a recent decision that issued in U.S. v. Daniels, 2010 WL 2557506 (U.S. District Court for the Northern District of California 2010).

On August 27, 2009, a federal grand jury in California “returned a nine-count indictment” charging Donald Daniels, Martin Washburn, Tapani Koivunen and Irina Rebegeneau with committing and conspiring to commit wire fraud, mail fraud and money laundering in violation of federal law. U.S. v. Daniels, supra. On October 1, 20009, the grand jury returned a superseding indictment that re-charged these counts but added two: “Counts 10 and 11, against Daniels, Washburn and [Sergei] Shkurkin, for using and conspiring to use extortionate means to collect or attempt to collect any extension of credit in violation of 18 U.S. Code § 894.” U.S. v. Daniels, supra. These defendants then moved to dismiss Counts 10 and 11 on the theory that “applying section 894 under such circumstances constitutes an impermissible extraterritorial application of the extortion statute,” i.e., that this district court could not legally “exercise jurisdiction over such conduct.” U.S. v. Daniels, supra.

Before we can analyze their argument, the government’s response and the court’s ruling on the motion to dismiss, I need to outline how the charges arose:

Washburn was the president of FoodPro International, Inc.; Rebegeneau was a project manager/engineer at FoodPro; and Koivunen was the chief executive officer of Global Sierra Management, LLC. In 2003, FoodPro and GSM, along with AS Vahenurme Agro (`ASV’), an Estonian company owned by Finnish partners, formed Global Sierra Partners, LLC (`GSP’), a Nevada corporation. . . . created with the intent of opening a state-of-the-art milling and bakery operation in Estonia.

GSP sought a loan from [OPIC], a [U.S.] agency that provides financing . . . to encourage participation in foreign business projects. . . . OPIC [agreed to] provide an $8.9 million small business loan to GSP, and GSP would contribute $7.6 million in equity investment to the project. FoodPro would provide $3.8 million cash, ASV would provide $700,000 cash and $2 million in property contributions, and GSM would provide $1 million cash. . . .

The members of GSP devised a scheme [to] procure a short-term loan of $4.5 million from entities controlled by Daniels, . . . so GSP would appear to possess the financing it had promised OPIC it would procure. Once GSP received the loans from OPIC, GSP would return the money to Daniels, rather than invest it in the bakery. Daniels agreed to provide the short-term loan in exchange for 25% interest, which would ultimately result in a $1.15 million payment from GSP to Daniels. . . .

[By] October 2004, Daniels had become unhappy with the pace at which he was being repaid . . . . Daniels, Washburn and Shkurkin (a business associate of Daniels) devised a plan to convince the Finnish partners that Daniels' money came from the Russian mafia and to threaten the Finnish partners with bodily harm unless they quickly paid the remaining $650,000 owed to Daniels. To effectuate the plan, Daniels asked Arkady Zalan, a high-level employee at FoodPro, if he knew anyone in the Russian mafia. Although Zalan did not know anyone in the Russian mafia, he ultimately contacted a man known as `Gennadi,’ who lived in Israel.

On October 20, 2004, Washburn sent an email to the Finnish partners, . . . stating that representatives for the investors, including two Americans . . . and one Russian (Gennadi), wanted a face-to-face meeting to address . . . the loan agreement. In a follow up email sent the next day by Shkurkin to Koivunen (and copied to Washburn, Zalan and the Finnish partners), Shkurkin stated `[y]ou [the Finnish partners] knew exactly what you were getting into. We were very clear. . . . ‘

On November 15, 2004, a meeting of the GSP Board of Directors took place at a hotel in Helsinki, Finland. In attendance were Washburn, Zalan, Koivunen, the Finnish partners, Shkurkin and Gennadi. Prior to the meeting, Daniels deposited $5,000 into Zalan's bank account to pay for Gennadi's expenses. . . . [and] Zalan, Washburn and Shkurkin crafted a statement for Gennadi to read to the assembled Board.

At the meeting, Gennadi read the statement, which, . . . [said] that if the remaining $650,000 were not paid by GSP to Daniels, it would be collected from GSP and GSP's members by `all means necessary.’ The Finnish partners described this as a `mafia-style’ threat. . . .

U.S. v. Daniels, supra. As I noted above, this threat was the basis of the 18 U.S. Code § 894 against the defendants listed above. They argued, basically, that the threat was made in a foreign county, so the U.S. federal court didn’t have jurisdiction over the extortion charge. The government claimed the court had jurisdiction because “overt acts that aided and abetted” the threat occurring in the U.S. U.S. v. Daniels, supra. As the judge noted, the government relied on the theory of territorial jurisdiction, under which the U.S. can assert jurisdiction over a crime if the crime, or part of the crime, occurred in U.S. territory. U.S. v. Daniels, supra. The court explained that to rule on the motion to dismiss, it had to decide “what conduct” violates § 894 and then decide if part of that conduct occurred in the U.S. U.S. v. Daniels, supra.

Section 894 makes it a crime for anyone to “knowingly participate[] in any way . . . in the use of extortionate means to . . . attempt to collect any extension of credit.” It defines “extortionate means” as any “means which involves the use, or an express or implicit threat of use, of violence or other criminal means to cause harm to the person, reputation, or property of any person”. 18 U.S. Code § 891(7). The court noted that by making anyone who “participate[s] in any way” in such activity liable, Congress “evinced an intent to reach a broad range of conduct.” U.S. v. Daniels, supra.

The judge then found that all three defendants participated in such activity:

Daniels wired $5,000 to a bank account controlled by Zalan with the intent that Zalan use the funds to finance Gennadi's travel to . . . Helsinki. Moreover, the purpose of the extortion scheme was to threaten the Finnish partners into repaying Daniels' loan to a bank account in the United States. Washburn sent an email from the United States to, among others, the Finnish partners in order to arrange the meeting in Helsinki, with full knowledge that the threat would be delivered at the meeting. Shkurkin sent a vaguely threatening email from the United States to . . . the Finnish partners informing them that he would be attending the Helsinki meeting on behalf of Daniels.

U.S. v. Daniels, supra. The judge found that this activity, “standing alone,” gave the court jurisdiction over Counts 10 and 11. U.S. v. Daniels, supra. The court also noted that Congress intended for § to be applied extra-territorially, but that this, in and of itself, did not establish that international law would allow it to be applied in that fashion. U.S. v. Daniels, supra.

The judge explained that under international law five principles allow a sovereign to exercise extraterritorial criminal jurisdiction:

(1) territorial, wherein jurisdiction is based on the place where the offense is committed; (2) national, wherein jurisdiction is based on the nationality or national character of the offender; (3) protective, wherein jurisdiction is based on whether the national interest is injured; (4) universal, which amounts to physical custody of the offender; and (5) passive personal, wherein jurisdiction is based on the nationality or national character of the victim.

U.S. v. Daniels, supra (citing Chua Han Mow v. U.S., 730 F.2d 1308 (U.S. Court of Appeals for the 9^th Circuit 1984). The judge found that in this case exercising jurisdiction

is justified pursuant to the territorial and national principles of extraterritoriality. Firstly, . . . while the actual threat in this case was delivered overseas, much of the preparatory work was completed within the United States. Furthermore, the intended effects of the conspiracy -- to recover money for Daniels that would be deposited in the United States -- would have impacted the United States. Pursuant to the territorial principle of extraterritoriality, courts have frequently held that where a crime is committed outside of the United States, but its effects are felt within the United States, a federal criminal law may apply extraterritorially. . . . Secondly, Daniels, Washburn and Shkurkin all appear to be citizens, nationals or residents of the United States and no evidence to the contrary has been presented. The government therefore has a recognized and valid interest in prosecuting them for misdeeds committed outside of the country.

U.S. v. Daniels, supra. Finally, the judge found it was “reasonable” for the U.S. to exercise jurisdiction over the activity at issue in Counts 10 and 11 because it was strongly linked to the U.S., the U.S. has a strong connection with the defendants given their nationality, there was little if any risk that exercising jurisdiction would conflict with the interests of another state and exercising jurisdiction was “consistent with the traditions of the international system.” U.S. v. Daniels, supra.

While the judge noted that “there can be no doubt that Finland likely has a strong interest in regulating the conduct at issue in this case,” he found that all of the other relevant factors “favor finding that the exercise of jurisdiction is reasonable.” U.S. v. Daniels, supra.

GPS Monitoring Revisited (2010)

Someone asked me, recently, to do a post about some of the recent cases that have addressed the use of GPS devices to track someone’s movements in a vehicle. It’s been quite a while since I did a post on that topic, so I thought it was time to revisit the issues it raises.

We’ll start with the case that got a fair amount of press attention: U.S. v. Maynard, ___ F.3d ___, 2010 WL 3063788 (U.S. Court of Appeals for the D.C. Circuit 2010). The appeal raised several issues, all of which arose from Antoine Jones’ and Lawrence Maynard’s convictions for conspiring distribute and possessing with intent to distribute cocaine in violation of federal law.

Jones is the one who raised the GPS issue: He argued that his conviction should be overturned “because the police violated the Fourth Amendment prohibition of “unreasonable searches” by tracking his movements 24 hours a day for four weeks with a GPS device they had installed on his Jeep without a valid warrant.” U.S. v. Maynard, supra.

The D.C. Court of Appeals noted that it had to consider two issues in ruling on Jones’ argument: (i) was the use of the GPS device a “search” under the 4^th Amendment and (ii) if it was a search, was the search “reasonable,” i.e., conducted pursuant to a search warrant or an exception to the warrant requirement. U.S. v. Maynard, supra.

In a post I did years ago, I noted courts had consistently held that using a GPS to track someone’s movements in their vehicle wasn’t a 4^th Amendment search based on the U.S. Supreme Court’s decisions in two cases: U.S. v. Knotts, 460 U.S. 276 (1983) and U.S. v. Karo, 468 U.S. 706 (1984). As you can see, both decisions are well over twenty years old, which means the facts at issue were even older and the technology involved (“beepers” installed on vehicles and a container of chemicals) was very primitive by today’s standards. (Check out either opinion to bind out what the beepers did.)

GPS devices are a LOT more sophisticated than the beepers used in these cases, which logically raises the question as to whether the use of a GPS device, unlike the use of a beeper, is a 4^th Amendment search . . . which brings us back to U.S. v. Maynard. Jones argued that the government’s use of the GPS was a 4^th Amendment search because it violated his reasonable expectation of privacy in his movements on the streets. The government argued that it wasn’t a search, citing U.S. v. Knotts, in which, as I explained in my earlier post, the Supreme Court held that someone “traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another” because it’s public, i.e., anyone could follow him and see where he went. U.S. v. Knotts, supra.

The D.C. Court of Appeals, however, noted that the Knotts Court

specifically reserved the question whether a warrant would be required in a case involving `twenty-four hour surveillance,’ stating `if such dragnet-type law enforcement practices as [Knotts] envisions should eventually occur, there will be time enough then to determine whether different constitutional principles may be applicable.’

U.S. v. Maynard, supra (quoting U.S. v. Knotts). The government tried to dismiss this issue by arguing that the Court’s use of the term “dragnet” implied “mass surveillance, not . . . the prolonged surveillance of a single individual”. U.S. v. Maynard, supra. The D.C. Circuit pointed out that in making the statement quoted above the Supreme Court was responding to Knotts’ argument that “if a warrant is not required, prolonged `twenty-four hour surveillance of any citizen of this country will be possible, without judicial knowledge or supervision.’” U.S. v. Maynard, supra (quoting U.S. v. Knotts).

The D.C. Circuit therefore found that the Knotts Court held that someone traveling in a vehicle on public streets has no 4^th Amendment expectation of privacy in “`his movements from one place to another’”, but did not hold that such a person “has no reasonable expectation of privacy in his movements whatsoever, world without end”. U.S. v. Maynard, supra (quoting U.S. v. Knotts). The D.C. Circuit then noted that three of the federal Courts of Appeals – the 8^th, 9^th and 10^th Circuits – had reserved this same issue. U.S. v. Maynard, supra (citing U.S. v. Marquez, 6 05 F.3d 604 (8^th Cir. 2010); U.S. v. Pineda-Moreno, 591 F.3d 1212 (9^th Cir. 2010); and U.S. v. Garcia, 474 F.3d 994 (7^th Cir. 2007)).

The D.C. Circuit then considered the issue the Knotts Court had reserved and concluded that unlike someone’s movements during

a single journey, the whole of one's movements over the course of a month is not actually exposed to the public because the likelihood anyone will observe all those movements is effectively nil. Second, the whole of one's movements is not exposed constructively even though each individual movement is exposed, because that whole reveals more-sometimes a great deal more-than does the sum of its parts.

U.S. v. Maynard, supra. The D.C. Circuit held that Jones had a reasonable expectation of privacy in his movements during the month he was monitored . . . which meant the monitoring was a “search.” U.S. v. Maynard, supra. Since the search was not conducted pursuant to a warrant, the court held that it violated the 4^th Amendment and reversed Jones’ conviction. U.S. v. Maynard, supra.

One of the cases the D.C. Circuit cited as reserving judgment on the mass surveillance issue was U.S. v. Pineda-Moreno, supra. I don’t know if that characterization really holds up, since in addressing the GPS-as-a-search issue, the Pineda-Moreno court quoted this statement from the Knotts opinion:

Insofar as [Knotts’] complaint appears to be simply that scientific devices such as the beeper enabled the police to be more effective in detecting crime, it has no constitutional foundation. We have never equated police efficiency with unconstitutionality, and we decline to do so now.

U.S. v. Knotts, supra. (The Pineda-Moreno court also held that officers didn’t violate the 4^th Amendment by installing the GPS device in Pineda-Moreno’s car while it was parked on the curtilage of his home, which goes to a different issue: whether the installation of a GPS device is a 4^th Amendment seizure. The 7^th Circuit also addressed that issue in Garcia. Both said it wasn’t . . . but the Pineda-Moreno decision departed from what has been a basic assumption, i.e., that installing or monitoring GPS devices “in” someone’s home or on the curtilage of their home violates the 4^th Amendment.)

Several other courts have recently addressed the GPS-as-a-search issue. In Foltz v. Commonwealth, __ S.E.2d __, 2010 WL 3463131 (Virginia Court of Appeals 2010), a Virginia court held that monitoring a GPS device isn’t a search under the 4^th Amendment or the Virginia Constitution’s version of the 4^th Amendment (and that installing the device isn’t a seizure under either provision).

In U.S. v. Jesus-Nunez, 2010 WL 2991229 (U.S. District Court for the Middle District of Pennsylvania 2010), the judge rejected the mass surveillance argument the D.C. Circuit found compelling. She found the fact that “the GPS device allowed the Government to overcome the impracticality of 24-hour visual surveillance is irrelevant” to the 4^th Amendment search issue, and therefore held that the case was controlled by the Supreme Court’s decision in U.S. v. Knotts. U.S. v. Jesus-Nunez, supra. In other words, she held it wasn’t a search. She also, though, noted that she (i.e., “the court”)

shares [Jesus-Nunez’s] concern for the duration of the GPS tracking, and agrees it is highly improbable that the Government could have maintained 24-hour visual surveillance for this length of time. The court also recognizes that in Knotts, the Supreme Court commented about the very concern raised by [Jesus-Nunez] --- that the court's decision will mean that twenty-four hour surveillance of any citizen of this country will be possible without judicial knowledge or supervision. . . . However, the court does not believe it is in the position to rewrite constitutional principles long established by the Supreme Court because of the changing landscape of technology. This is the province of Congress or the higher courts; it is this court's duty to apply precedent to the facts.

U.S. v. Jesus-Nunez, supra.

So . . . where does this leave us? It leaves us with a situation in which courts are struggling to fit the expanded capacities of new technologies into existing law. In my humble opinion, the courts are struggling with two, equally plausible but irresistibly irreconcilable propositions:

(a) One is that while “some,” limited use of automated, remote surveillance techniques (e.g., beepers and GPS devices) doesn’t violate the 4^th Amendment, the expanded, what we might call unrestricted, use of such techniques does constitute a search under the 4^th Amendment and is unconstitutional unless it’s conducted pursuant to a search warrant or an applicable exception to the warrant requirement.

The problem I have with this proposition is that it doesn’t explain how and why what isn’t a search when it’s done at one level but morphs into a search when it’s done on an expanded level. As far as I can see, the only way that proposition makes sense is if the limited surveillance really is a 4^th Amendment search but courts have (at least implicitly) decided that it’s such a de minimis search, such a small intrusion on the person’s privacy, that they don’t construe it as having 4^th Amendment significance. Then, under this line of reasoning, the expanded surveillance becomes a 4^th Amendment because now there’s enough of an intrusion on privacy for courts to take cognizance of. I, for one, can’t really buy that argument; as far as I know (and I could be wrong here), courts have never predicated the applicability of 4^th Amendment protections of privacy on the magnitude of the intrusion into privacy. I believe (and again, I could be wrong), that privacy has pretty much been treated as a unitary concept . . . a violation is a violation, regardless of how “minor” the intrusion is.

(b) The other is that even the expanded use of surveillance techniques doesn’t violate the 4^th Amendment because it’s just the repetition of activity that targets conduct (i.e., movements in public) in which we can have no expectation of privacy, not under the 4^th Amendment and not as a simple matter of common sense. On a personal level, I’m not keen on this one, but as a lawyer I have a hard time coming up with a good argument as to why it isn’t valid.

A factual distinction is that with GPS monitoring we’re talking about targeting a specific individual, which arguably differentiates GPS monitoring (as it’s currently being used) from the kind of broad spectrum monitoring that’s carried out by the CCTV cameras in London and other cities. That’s a legitimate distinction, but I don’t really see how it refutes this second proposition.

If something isn’t private, it isn’t private. In the 4^th Amendment context, the Supreme Court has held that an officer’s motivation in conducting a search or seizure isn’t relevant in determining whether the search or seizure violates the 4^th Amendment. All that matters is that the officer can articulate an objectively reasonable basis for the search/seizure. So the fact that one is targeted and the other targets everyone presumably doesn’t differentiate the two scenarios, at least not for the purposes of 4^th Amendment analysis.

My other problem is that I can see the argument Jones (and others) have made coming back to bite them: They argue that the expanded use of surveillance techniques like GPS monitoring transforms what was (at least arguably) not a 4^th Amendment “search” into one. I think it can be used to argue the opposite: As I’ve noted here before, in the Katz case, which is the case in which the Supreme Court articulated the standard we currently use to decide if something’s a 4^th Amendment search, the Court noted that we have no 4^th Amendment expectation of privacy in anything we “knowingly expose to public view.” If we all know, or if we all come to realize, that we are/can be monitored every moment of every occasion in which we’re “in public,” then how can we possibly say that we reasonably believed our movements in public were “private?”

A Note on Scheduling

As you may (or may not) have noticed, my default practice has been to do a blog post three times a week: on Monday, Wednesday and Friday mornings.

I'm now back from sabbatical (sigh) and the summer break (sigh2) and my schedule tends to be rather hectic, especially on Wednesdays and Fridays.

So sometimes posts will be a little late or a little early (like the one I'm going to do in a few minutes). I'm still sticking to the three times a week, and roughly the same intervals between posts . . . but with a little elasticity.

Nastiness in Legal Academia . . .

This post is a bit of a digression. It’s my way of sorting through the potential criminal liability a law school faculty candidate might incur for the dirty trick she seems to have played on another law school faculty candidate.

This is all I know of what happened, or allegedly happened, based on this blog post:

P and V were both on the academic job market. They had somewhat overlapping areas of research interest, and so might have been thought of as competitors, as it were. Both P and V were under some degree of consideration at Major Law School (hereafter MLS). But V, unlike P, got a fly-back to give a job talk at MLS. On the morning of the day of V's job talk, P sent the following e-mail under a pseudonym (`Jade West’) from an e-mail account created for that purpose.

The e-mail began with a quotation discrediting V's scholarship and disparaging V's publications. P alleged that this quotation came from an email that was sent to P's `colleagues’ at MLS. The e-mail concluded with these lines: `In other words, WE DON'T WANT YOU. . . HERE AT [MLS]. You belong at a crap school like [name omitted]. Hope you blow your job talk today.’

Fortunately, V did not see P's e-mail until after the job talk. V was obviously very distressed, however, and the intent of the malicious missive was clear. Its contents were also false, i.e., no e-mail had circulated among faculty at MLS like the one P purported to be quoting, and P was never a faculty member at MLS.

An acquaintance of V, a computer expert, set up a technological trap known as a `honeypot’ to decisively link P's fake email account to P's school account. P's identity is thus now known.

P, in fact, secured a tenure-track job at another law school. That law school does not know about P's appalling misconduct.

For what it’s worth, I have NEVER heard of anything comparable, or even similar, happening in legal academic (which, of course, doesn’t mean it hasn’t happened, but I’m quite confident that things like this are, at most, very rare).

Being a cybercrime person, when I read this post my thoughts turned to the possibility that P (for whom I, and perhaps you, have no sympathy but a fair amount of anonymous rancor) had committed a crime or crimes. So I decided to use this post to sort through the possibilities.

Let’s start with identity theft. As I’ve noted in other posts, it’s is usually a financial crime, i.e., it generally involves a perpetrator who uses someone’s personally identifying information to obtain credit or otherwise enrich herself. As I’ve noted in a couple of posts, at least one state – Wisconsin – has an identity theft statute that encompasses the use of another’s identifying information to inflict financial “harm” on them but also makes it a crime to use such information to harm the person’s reputation. Wisconsin Statutes section 943.201(2)(c). I think that’s probably the broadest identity theft statute I’ve seen.

So, has P committed a crime under that statute? Except for one glitch, we might have at least an attempt charge under the Wisconsin statute because in criminalizing the use of another’s personal information for financial gain, it includes using the information to obtain employment. That, in a roundabout kind of way, is what P was trying to do here, though it doesn’t seem to have worked; that’s why I say we might, at most, have an attempted identity theft charge under a statute like the Wisconsin statute.

Except for that same glitch, we would seem to have a good case for charging P under the residual provision of the Wisconsin identity theft statute, the section that makes it a crime to use someone else’s personal identifying information to harm their reputation. If we decided that the pseudonymous email P sent “harmed” V’s reputation (which it might have done, if it was widely distributed), then we might have a viable charge under the Wisconsin identity theft statute or a similar provision, if one exists.

But there’s the glitch. P didn’t use V’s personal identifying information. She used an alias (which I’m assuming is fake) that at least implicitly represented herself as a member of the MLS law faculty. Since she used an alias, she didn’t “steal” V’s identity, which probably mean identity theft isn’t a viable charge. As I explained in an earlier post, the U.S. Supreme Court held last year that, at least under the federal identity theft statute, you have to steal the identity of a real person in order to have a viable case of identity theft. So identity theft probably doesn’t work.

What about criminal impersonation? As I’ve noted in other posts, some states have a statute that makes it a crime to pretend to be another person. Arkansas, for example, has a statute that makes it a crime to (i) obtain another person’s personal identifying information without their permission and (ii) use it for any unlawful purpose, including to “harass another person.” Arkansas Code § 5-37-227. As I noted in another post, a few other states have criminal impersonation statutes that make it a crime to pretend to be someone in order to commit a crime or otherwise “benefit” themselves.

The Arkansas statute seems a possible option for dealing with what P did, except for two things. One is that P didn’t use another (real) person’s personal identifying information; she used a pseudonym that, as far as we know, doesn’t belong to a real person. The other problem is the requirement that P have used the identifying information to “harass” another person. She used a name other than her own (Jade West) V, and for the purposes of analysis we’ll assume that qualifies as using personal identifying information. So we might have the “other person” (since V is distinct from P and from the presumably fictive “Jade West”), if fake people count (or if there is a real Jade West and if P was using her name).

The problem I see with this alternative is one I’ve noted in earlier posts on harassment: Statutes consistently define harassment in terms of repeated conduct (probably because something that might be irritating can become annoying and harassing if it’s repeated). We apparently only have one email here, which almost certainly wouldn’t qualify as harassment.

We have the same problem with stalking. As I’ve noted in earlier posts, cyber-stalking statutes often criminalize the use of electronic media to inflict “emotional distress” on the victim but they, like harassment statutes, require repeated conduct. The usual term of art in cyber-stalking statutes is a “course of conduct,” i.e., three or more repeated acts that inflict, or are intended to inflict, emotional distress on the victim. What P did no doubt caused V to suffer emotional distress, but it wasn’t repeated, within the meaning of a cyber-stalking statute.

What about criminal defamation? I’ve done a few posts on criminal defamation and I wrote a lengthy law review article on it (“Online Defamation”), which you can access via a link on the right-hand side of the blog. Here is an example of a criminal defamation statute:

A person who shall knowingly publish or disseminate, either by written instrument, sign, pictures, or the like, any statement or object tending to . . . impeach the honesty, integrity, virtue, or reputation or expose the natural defects of one who is alive, and thereby to expose him to public hatred, contempt, or ridicule, commits criminal libel.

Colorado Revised Statutes § 18-13-105(1). It looks like we might have a winner here: P published statements that were clearly intended to “impeach the . . . reputation” of V, so prosecution for criminal libel might be a possibility, depending on what state(s) all this happened in.

Since truth is usually an absolute defense in a criminal libel case, P might have a defense if she could – as I doubt – show that what she said was true. (She certainly wasn’t on the MLS faculty, but that probably isn’t an integral part of what seems to constitute criminal libel here.) I also don’t see that, given what P said about V’s scholarship, would have the kind of hyperbole defense argument that applied in a case I recently blogged about.

Do I think P will ever be prosecuted, for criminal defamation or anything else? No. I’m not even sure if she’s ever be sanctioned in any way for what she did (though some of the comments on the blog post quoted above are suggesting that she be reported to the bar authorities, for potential discipline). I just thought (think) it was a really crummy thing to do and therefore decided to ruminate on whether or not it could give rise to criminal charges.