CYBERLAW REPORT ON THE SJ GAMES CASE
CyberLaw is an educational service focusing on legal issues concerning
computer technology. CyberLex reports legal developments touching the
computer industry. CyberLaw and CyberLex are distributed as a monthly
column, published by computer user groups throughout the United
States.
CyberLaw is edited by Jonathan Rosenoer (jrsnr@well.sf.ca.us)
CyberLaw (tm) [4/93]
Search & Seizure
I. Liberty & Cyberspace
Three years ago, a small publisher of role-playing games in Texas
was raided by the United States Secret Service. Government agents
carted away computers, one of which ran the company's computer
bulletin board system (BBS), hundreds of floppy disks, and drafts of
a soon-to-be-published book and of magazine articles. The seized
material was held for months, which led to the layoff of a number of
the company's employees. No-one at the company was arrested or
charged with a crime. The owner of the company, Steve Jackson,
appealed for help and managed to gain the attention of some
prominent members of the computer community. The case came to
be viewed by many as a struggle for civil liberties in the new
electronic frontier, known as Cyberspace. Steve Jackson and his
supporters were vindicated recently, when a Federal District Court
ruled that the Secret Service had violated federal statutes protecting
publishers and the privacy of electronic communications with regard
to its raid of the company.
II. The Saga Begins
The saga of Steve Jackson and his company began in the summer of
1989, when the Secret Service was contacted by a representative of
BellSouth (a Regional Bell Operating Company) who advised that
there had been a theft of sensitive data from BellSouth's computer
system. The stolen data was described as "an internal, proprietary
document that described the control, operation and maintenance of
BellSouth's 911 emergency system." This report led the Secret
Service and the U.S. Attorney's office in Chicago into a larger
investigation, concerning a national group of computer hackers called
the "Legion of Doom" (LOD).
A member of LOD had allegedly entered a BellSouth computer and
copied the 911 document to his own computer. The 911 document
was then allegedly sent to a BBS in Illinois, from which it was
downloaded by a student named Craig Neidorf and edited for and
distributed in a publication named __Phrack__. One person who
received __Phrack__ was Loyd Blankenship, also a member of LOD.
Notably, the 911 document is not a computer program and has
nothing to do with accessing a 911 system. It simply details who
does what in the telephone company bureaucracy regarding
customer complaints and equipment failures, among other things.
For the Secret Service, BellSouth estimated the cost of the 911
document at $79,449. But in July 1990, during Neidorf's trial, it was
disclosed that the 911 document was available to the public directly
from BellSouth for about $20. (Upon this disclosure, the prosecution
of Neidorf collapsed -- leaving him owing over $100,000 in legal
fees.)
In early 1990, the Secret Service learned that another LOD member
had posted a message on a BBS maintained by Blankenship, allegedly
"inviting other BBS participants to send in encrypted passwords
stolen from other computers, which Blankenship and [the other
member of LOD] would decrypt and return...." After seeking
additional information, the Secret Service decided to obtain search
warrants to obtain evidence against them, including a search warrant
for the offices of Blankenship's employer, Steve Jackson Games, Inc.
Steve Jackson Games, as described by its lawyers, "publishes role-
playing games in book form, magazines, a book about game theory,
boxed games, and game-related products. The company's games are
played not on computers, but with dice, a game book or books, and
lots of imagination." As part of its business, the company runs a BBS
(the "Illuminati" BBS) that allows outside callers to dial in and, as
outlined by Steve Jackson, "read messages left by [the company],
read public messages left by others who have called the bulletin
board, leave public messages for other callers to read, send private
electronic mail to other persons who called the bulletin board, and
'download' computerized files to their own computer." Like the
typical BBS, the Illuminati BBS stored electronic mail, including mail
that had been sent but not yet received. In February 1990, there
were 365 users of the Illuminati BBS and, according to the trial court,
Blankenship was a "co-sysop" of the BBS.
III. The Raid
On March 1, 1990, Steve Jackson Games was raided by the Secret
Service. They seized and carried away a computer found on
Blankenship's desk, a disassembled computer next to his desk, the
computer running the Illuminati BBS, over 300 computer disks, and
various documents and other materials. Among the seized items
were drafts of a book titled __GURPS Cyberpunk__, which was to be
published within days or weeks of the raid, and drafts of magazines
and magazine articles. ("GURPS" stands for "Generic Universal Game
Role Playing System.") According to the company's attorneys, a
Secret Service agent called __GURPS Cyberpunk__ "'a handbook for
computer crime' in Mr. Jackson's presence, (although the government
now claims that the book was not the target of the search and admits
it was not evidence of any crime)."
For Steve Jackson Games, the raid was a calamity. It was suffering
severe cash flow problems, and the seizure caused substantial delays
in publication and the termination of 8 employees. The bulk of the
seized material was not made available to the company until late
June 1990, and no printed copies of __GURPS Cyberpunk__ were ever
returned.
The raid also caused wide concern across the United States. From the
outset, as noted by the company's lawyers, many saw the case as one
in which,
"The Secret Service, on exceedingly weak pretense, invaded the office
of an upstanding, hard-working small businessman, and nearly put
him out of business. The Secret Service shut down a working BBS --
a new, powerful means of public and private communication -- with
__no__ evidence that anything unlawful was transpiring there.
Shutting down the "Illuminati" was like clearing or closing down a
park or meeting hall, simply because one of hundreds of the people
gathered there was under vague suspicion."
This view was later validated by the trial court, which found that,
"[P]rior to March 1, 1990, and at all other times, __there has never
been any basis for suspicion__ that [Steve Jackson Games, Steve
Jackson, or any of the other individuals who subsequently sued the
Secret Service as a result of the raid] have engaged in any criminal
activity, violated any law, or attempted to communicate, publish, or
store any illegally obtained information or otherwise provide access
to any illegally obtained information or to solicit any information
which was to be used illegally." (Emphasis added.)
IV. The Lawsuit
After the raid, Steve Jackson Games, Steve Jackson and 3 users of the
Illuminati BBS filed suit against the United States Secret Service, the
United States of America, and several government employees who
had been involved in the raid. The plaintiffs brought causes of action
for violation of the following: the Fourth Amendment to the U.S.
Constitution; the Privacy Protection Act, 42 U.S.C. 2000aa et seq.; the
Wire and Electronic Communications Interception and Interception of
Oral Communication Act, 18 U.S.C. 2510 et seq.; and, the Stored Wire
and Electronic Communications and Transactional Records Act, 18
U.S.C. 2701 et seq. (The latter 2 statutes are part of the Electronic
Communications Protection Act, or ECPA.)
V. Fourth Amendment
With respect to the Fourth Amendment, the plaintiffs argued that
"probable cause to believe that a crime has occurred ... does not
automatically give license to search every place that a suspect may
frequent," and also that "there must be probable cause to believe
that the __type__ of materials sought are located at the place to be
searched." "The search warrant," continued the plaintiffs, "did not
establish probable cause that evidence of any crime would be found
at [Steve Jackson Games]," and the search of the company "was
broader than justified by any facts in the warrant." In response, the
government argued that even if the plaintiffs were correct, they still
had to prove that "these defects were so obvious that no reasonable
officer could have believed the warrant to be valid, in light of the
information [the officer] possessed." Because a court determination
in favor of the plaintiffs could have resulted in an immediate appeal
that would delay the balance of their case, the plaintiffs dropped
their Fourth Amendment claims to focus their case on the Privacy
Protection Act and ECPA claims.
VI. Privacy Protection Act
The Privacy Protection Act concerns the investigation and
prosecution of criminal offenses and, in relevant part, prohibits
government employees from searching for or seizing any "work
product materials" possessed by a person reasonably believed to
have a purpose to disseminate to the public a newspaper, book,
broadcast, or other similar form of public communication. "Work
product materials" are defined to include materials, not including
contraband, the fruits of a crime, or things used as the means of
committing a crime, created or prepared for the purpose of
communicating such materials to the public.
At the time of the raid on Steve Jackson Games, the Secret Service
was advised that the company was in the publishing business. No
significance was attached to this information, however, as the Secret
Service agents involved in the raid were oblivious of the provisions
of the Privacy Protection Act.
Notwithstanding the fact that the Secret Service had failed to make a
reasonable investigation of Steve Jackson Games "when it was
apparent [its] intention was to take substantial properties belonging
to the [company], the removal of which could have a substantial
effect on the continuation of business," the trial court declined to find
that on March 1, 1990, any government employee had reason to
believe that the property to be seized would be "work product
material" subject to the Privacy Protection Act. But during the raid,
the Secret Service had been advised of facts that put its agents on
notice of probable violations of that Act. Indeed, the Secret Service
continued to detain the company's property through late June 1990
despite the fact that, as observed by the trial court, "[i]mmediate
arrangements could and should have been made on March 2, 1990,
whereby copies of all information seized could have been made."
The refusal of the Secret Service to return the company's information
and property violated the Privacy Protection Act, and the court
awarded Steve Jackson Games its expenses ($8,781) and economic
damages ($42,259).
VII. ECPA
The trial court did not find, however, that the Secret Service had
violated the Electronic Communications Interception and Interception
of Oral Communication Act. According to the trial court, "the Secret
Service intended not only to seize and read [the communications
stored on the Illuminati BBS], but, in fact, did read the
communications and thereafter deleted or destroyed some
communications either intentionally or accidentally." But the Secret
Service had not "intercepted" communications within the meaning of
the latter Act, ruled the court, apparently on the grounds that only
the contemporaneous acquisition of a communication is prohibited
thereby.
In support of this ruling, the court looked to the Congressional
enactment of the Stored Wire and Electronic Communications and
Transactional Records Act, among other things. This statute protects
the content of electronic communications in electronic storage and
sets out specific requirements for the government to follow to obtain
the "disclosure" of such communications. One such requirement is
that there be "reason to believe the contents of a[n] ... electronic
communication ... are relevant to a legitimate law enforcement
inquiry." Although the Secret Service wanted to seize, review and
read all electronic communications, public and private, on the
Illuminati BBS, the Secret Service did not advise the Magistrate Judge
who issued the warrant for the raid on Steve Jackson Games "that the
Illuminati board contained private electronic communications
between users or how the disclosure of the content of these
communications could relate to [the] investigation." The court
commented that it was not until June 1990 that the plaintiffs were
able to determine the reasons for the March 1, 11990, seizure, "and
then only with the efforts of the offices of both United States
Senators of the State of Texas." Simply stated, "[t]he procedures
followed by the Secret Service in this case virtually eliminated the
safeguards contained in the statute." Lacking sufficient proof of
compensatory damages, the court assessed statutory damages in
favor of the plaintiffs, in the amount of $1,000 for each plaintiff.
VIII. Further Information
Further information concerning this case may be found in the opinion
of the United States District Court in __Steve Jackson Games, Inc., et
al. v. United States Secret Service, et al.__, No. A-91-CA-346-SS (W.D.
Tex. 3/12/93). For background information on this case and other
related cases, see B. Sterling, __The Hacker Crackdown__ (1992), and
John Perry Barlow, __Crime & Puzzlement__ (1990).
(Copies of the arguments filed with the trial court and of the court's
opinion were kindly made available to the author by Peter D.
Kennedy, Esq., of George, Donaldson & Ford, attorneys for Steve
Jackson Games, Inc. and the other plaintiffs.)
CyberLaw (tm) is published solely as an educational service. The
author may be contacted at jrsnr@well.sf.ca.us; cyberlaw@aol.com;
questions and comments may be posted on America Online (go to
keyword "CYBERLAW"). Copyright (c) 1993 Jonathan Rosenoer; All
Rights Reserved. CyberLaw is a trademark of Jonathan Rosenoer.
CyberLex (tm) [4/93]
Notable legal developments reported in April 1993 include the
following:
#The Ninth Circuit Court of Appeals has ruled that an
independent service provider violated copyright laws by loading
operating software licensed to its client into the random access
memory of its client's computer in the course of fixing the computer.
(__MAI Systems Corp. v. Peak Computer Inc., et al.__, 93 C.D.O.S.
2596 (9th Cir. 4/9/93)).
#The White House has announced the development of a
computer chip, called the "Clipper Chip," that encodes voice and data
transmissions using a secret algorithm. The chip is to work with an
80-bit, split key escrow system. Two escrow agents would each hold
40-bit segments of a user's key, which would be released to law
enforcement agents upon presentation of a valid warrant. After the
announcement, several groups expressed concern that, among other
things, the algorithm used cannot be trusted unless it is public and
open to testing. (New York Times, April 16, 1993, A1; San Jose
Mercury News, April 16, 1993, 1A, and April 17, 1993, 11D;Wall
Street Journal, April 19, 1993, A5.)
#The CIA has warned U.S. high-tech companies that the French
government may be spying on them. (San Jose Mercury News, April
27, 1993, 11E.)
#Kevin Poulson, a hacker already scheduled to be tried on 14
federal felonies, has been indicted on 19 more felony counts in which
he is accused of using telephone and computer skills to ensure that
he and two alleged accomplices would win radio station call-in
contests. Prizes in those contest included a pair of Porsche cars and
more than $20,00 in cash. (San Jose Mercury News, April 22, 1993,
1F.)
#InterDigital Communications Corp. has filed suit for patent
infringement against Oki Electric Industry Co., of Tokyo. The suit
concerns a data communication technique called code division
multiple access (CDMA), developed by a San Diego-based company,
and CDMA-based phones that Oki plans to manufacture, among other
things. InterDigital holds many patents on a rival technique called
time division multiple access, used by several cellular phone
companies. (Wall Street Journal, April 19, 1993, 7B.)
#20 Japanese telecommunications companies announced that
they will join Motorola's Iridium project, a planned digital cellular
telephone network linked by 66 orbiting satellites. (San Jose
Mercury News, April 3, 1993, 11D.)
#The nation's local phone companies offered to build the
"information superhighway" promoted by Vice President Al Gore if
they are allowed to go back onto the long-distance phone business, to
manufacture equipment, and to provide video programming over
phone lines. (San Jose Mercury News, April 16, 1993, 3C.)
#Apple Computer, Inc. is fighting a $290 million claim by the IRS
for back taxes for the years 1987 and 1988 relating to the value of
property transferred between foreign and domestic units of the
company. (San Jose Mercury News, April 3, 1993, 9D.)
#A federal judge overturned a jury verdict that AMD did not
have the right to use Intel microcode in AMD chips, and granted a
new trial. The basis for the court's ruling was that Intel had failed to
produce critical documents that would have allowed AMD fairly to
present its defense. The verdict had stopped AMD from selling a
clone of Intel's 486 microprocessor. Within 2 weeks, Intel sued AMD
alleging that AMD's 486 clones and an AMD chip not yet on the
market violate Intel copyrights. (San Jose Mercury News, April 17,
1993, 1A, and April 29, 1993, 1C; New York Times, April 17, 1993,
p.17.)
#The Commerce Department has imposed permanent import
duties of up to 11.45% on Korean-made computer memory chips,
following an International Trade Commission finding of "dumping" by
South Korean manufacturers. (San Jose Mercury News, April 23,
1993, 1C.)
#Taiwan has adopted a set of copyright law revisions. (San Jose
Mercury News, April 23, 1993, 3C.)
#The International Trade Commission has agreed to investigate
claims by a Mississippi inventor that 20 computer disk-drive
manufacturers are violating a patent he holds for placing carbon
coating on computer disks by importing drives that use the
technology. One manufacturer, Connor Peripherals Inc., has filed suit
to declare the inventor's patent invalid. (San Jose Mercury News,
April 27, 1993, 9E.)
CyberLex (tm) is published solely as an educational service.
Copyright (c) 1993 Jonathan Rosenoer; All Rights Reserved. CyberLex
is a trademark of Jonathan Rosenoer.
Steve Jackson Games | SJ Games vs. the Secret Service
