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United States v. Warshak
Court	United States Court of Appeals for the Sixth Circuit
Full case name	'United States v. Steven Warshak et al.'
Argued	June 16 2010
Decided	December 14 2010
Citation	2010 WL 5071766; 2010 U.S. App. LEXIS 25415; --- F.3d ---
Holding
Government agents violated the defendant's Fourth Amendment rights when they compelled his ISP to produce the content of his emails without first obtaining a warrant based on probable cause.
Court membership
Judges sitting	Damon Keith, Danny Boggs, and David McKeague
Case opinions
Majority	Boggs, joined by McKeague
Concurrence	Keith
Laws applied
Fourth Amendment to the United States Constitution, Stored Communications Act 18 U.S.C. § 2701 et seq.

United States v. Warshak is a criminal case decided by the United States Court of Appeals for the Sixth Circuit holding that government agents violated the defendant's Fourth Amendment rights by compelling his Internet Service Provider (ISP) to turn over his e-mails without first obtaining a warrant based on probable cause. However, constitutional violation notwithstanding, the evidence obtained with these emails could not be excluded from the trial because the government agents relied in good faith on the Stored Communications Act (SCA). The court further declared that the SCA is unconstitutional to the extent that it allows the government to obtain emails without a warrant.

This case is notable because it is the first court from the United States Circuit Court of Appeals to explicitly hold that there is a reasonable expectation of privacy in the content of e-mails stored on third party servers and that the content of these emails is subject to Fourth Amendment protection.

Background

Facts

Steven Warshak owned and operated Berkeley Premium Nutraceuticals, Inc. (Berkeley) which sold, among other products, a herbal supplement marketed as a pill for natural male enhancement, called Enzyte. His mother, Harriet Warshak, worked at Berkeley with him in the credit card department.

In 2001, Berkeley launched Enzyte and by 2004, Berkeley's annual sales approached $250 million, in large part due to the success of Enzyte. Enzyte was marketed extensively, and approximately 98% of the advertising was done on television featuring a character known as "Smilin' Bob." In some advertisements, Berkeley presented false information. Phony surveys were presented as fact at Warshak's request, the customer satisfaction rating of 96% was fabricated according to Warshak's request, and even the medical professionals who Berkeley claimed developed Enzyte were fictitious.

Sales of Berkeley's products occurrd via telephone, email, and the Internet. Over the phone, Berkeley's sales force followed a script approved by Warshak designed to try to slip pertinent information past the customer. In the script, customers signing-up for a free trial were informed that they were being enrolled in an "auto-ship" program which would charge their credit card at the end of the first prescription period and send them a refill for their current prescription. To end this auto-shipping, customers had to opt-out of the program. This program led to the vast majority of complaints filed against Berkeley. The auto-ship program and customers dislike for this practice resulted in many orders being canceled. The canceled orders hurt Berkeley's reputation among banks and credit card companies who became reluctant to extend credit to Berkeley. To combat this, Warshak invented various ways of reducing the percentage of refunded charges through questionable tactics. One tactic was to charge the customer's account multiple times for the same purchase, once for the purchase of the supplement and another time for shipping. Warshak referred to this as "double dinging." Later, he instituted the practice of "triple dinging" as well. Additionally, to secure other lines of credit, Warshak, along with his mother Harriet, provided false information to banks.

Much of the information about Warshak's questionable activities were contained in his email correspondence.

Procedural History

In September of 2006, a grand jury in Ohio returned an indictment with more than 100 counts charging Warshak and his mother with various crimes including conspiracy to commit mail, wire, and bank fraud, mail fraud, bank fraud, and money laundering. Warshak moved before trial to exclude emails obtained from his ISP; which was denied.

In January of 2008, the case went to trial. Six weeks later Warshak and his mother were convicted of a majority of the charges. Shortly thereafter, a jury found that certain assets were sufficiently related to the crimes that Warshak was ordered to forfeit illegally obtained gains.

In August of 2008, the defendants were sentenced. Warshak received a prison term of 25 years, ordered to pay a find of $93,000 and to forfeit the sums of $459,540,000 and $44,876,781.68 which represented the proceeds of the crimes. Harriet was sentenced to 24 months imprisonment and to be jointly and severally liable with Warshak for the forfeiture amounts.

The defendants appealed their convictions, sentences, and forfeiture judgments.

Opinion of the Court

Other Issues

Additionally, the court sustained the convictions for conspiracy to commit mail, wire, and bank fraud, along with the convictions for mail fraud, bank fraud, and money laundering because the evidence was sufficient to support them. However, Warshak's sentence was vacated and remanded to the lower court because the court's previous ruling lacked an adequate explanation of losses to justify the sentence.

Result

The Sixth Circuit held that the government violated Steven Warshak's Fourth Amendment rights when it compelled his ISP to turn over the contents of his email without a warrant based on probable cause. However, the emails were not excluded from evidence because the government agents relied in good faith on the provisions of the SCA. As a result, the Sixth Circuit:

• AFFIRMED Warshak's convictions
• AFFIRMED the forfeiture judgments against him, VACATED the 25 year sentence, and REMANDED for resentencing.
• AFFIRMED Harriet's convictions except those related to money laundering, which were REVERSED
• VACATED and REMANDED Harriet's sentence
• AFFIRMED proceeds-money forfeiture judgment against Harriet
• REVERSED money-laundering forfeiture judgment against Harriet

Concurring Opinion

The concurring opinion addressed the use of the SCA by the government to request that Warshak's ISP retain emails it would have otherwise deleted. Section 2703(f) of the SCA, according to Judge Keith, should have no prospective effect. The government's request that the ISP preserve Warshak's stored and future email communications without notifying Warshak is analogous to tapping his phone line without a warrant. This type of action would not survive a challenge under the Fourth Amendment: "The government cannot use email collection as a means to monitor citizens without a warrant anymore than they can tap a telephone line to monitor citizens without a warrant." However, because Judge Keith's interpretation of Section 2703(f) did not affect the outcome of the case, he concurred in the result.

External Links

• Berkeley Premium Nutraceuticals
• Enzyte
• Orin S. Kerr, Applying the Fourth Amendment to the Internet: A General Approach, 62 Stan. L. Rev. 1005 (2010)
• A User’s Guide to the Stored Communications Act, and a Legislator’s Guide to Amending It, 72 Geo. Wash. L. Rev. 1208 (2004)
• EFF declares victory in Warshak case
• Email is protected by Fourth Amendment, ZDNet Report