Benjamin JOFFE; Lilla Marigza; Rick Benitti; Bertha Davis; Jason Taylor; Eric Myhre; John E. Redstone; Matthew Berlage; Patrick Keyes; Karl H. Schulz; James Fairbanks; Aaron Linsky; Dean M. Bastilla; Vicki Van Valin; Jeffrey Colman; Russell Carter; Stephanie Carter; Jennifer Locsin, Plaintiffs-Appellees, v. GOOGLE, INC., Defendant-Appellant.
No. 11-17483
United States Court of Appeals, Ninth Circuit
Sept. 10, 2013
729 F.3d 1262
CONCLUSION
A material issue of fact remains regarding whether Global and Bagley were necessary participants and substantial factors in the distribution of CMKM securities sufficient to impose liability under Section 5 of the Securities Act. Therefore, we reverse the grant of summary judgment as to Global and Bagley, and remand for further proceedings. We affirm the magistrate judge‘s denial of Dvorak‘s motion to stay and the district court‘s disgorgement order as to Dvorak.
AFFIRMED in part, REVERSED in part and REMANDED. The parties shall bear their own costs on appeal.
Michael H. Rubin (argued), David H. Kramer, Brian M. Willen, and Caroline E. Wilson, Wilson Sonsini Goodrich & Rosati Professional Corporation, Palo Alto, CA, for Defendant-Appellant.
Elizabeth J. Cabraser (argued), and Jahan C. Sagafi, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA; Kathryn E. Barnett, Lieff, Cabraser, Heimann & Bernstein, LLP, Nashville, TN; Jeffrey L. Kodroff, John A. Macoretta, and Mary Ann Giorno, Spector Roseman Kodroff & Willis, P.C., Philadelphia, PA; Daniel A. Small and David A. Young, Cohen Milstein Sellers & Toll, PLLC, Washington, D.C., for Plaintiffs-Appellees.
Marc Rotenberg, Alan Butler, and David Jacobs, Electronic Privacy Information Center, Washington, D.C., for Amicus Curiae Electronic Privacy Information Center.
OPINION
BYBEE, Circuit Judge:
In the course of capturing its Street View photographs, Google collected data from unencrypted Wi-Fi networks. Google publicly apologized, but plaintiffs brought suit under federal and state law,
I. BACKGROUND
A. Facts and History
Google launched its Street View feature in the United States in 2007 to complement its Google Maps service by providing users with panoramic, street-level photographs. Street View photographs are captured by cameras mounted on vehicles owned by Google that drive on public roads and photograph their surroundings. Between 2007 and 2010, Google also equipped its Street View cars with Wi-Fi antennas and software that collected data transmitted by Wi-Fi networks in nearby homes and businesses. The equipment attached to Google‘s Street View cars recorded basic information about these Wi-Fi networks, including the network‘s name (SSID), the unique number assigned to the router transmitting the wireless signal (MAC address), the signal strength, and whether the network was encrypted. Gathering this basic data about the Wi-Fi networks used in homes and businesses enables companies such as Google to provide enhanced “location-based” services, such as those that allow mobile phone users to find nearby restaurants and attractions or receive driving directions.
But the antennas and software installed in Google‘s Street View cars collected more than just the basic identifying information transmitted by Wi-Fi networks. They also gathered and stored “payload data” that was sent and received over unencrypted Wi-Fi connections at the moment that a Street View car was driving by.1 Payload data includes everything transmitted by a device connected to a Wi-Fi network, such as personal emails, usernames, passwords, videos, and documents.
Google acknowledged in May 2010 that its Street View vehicles had been collecting fragments of payload data from unencrypted Wi-Fi networks. The company publicly apologized, grounded its vehicles, and rendered inaccessible the personal data that had been acquired. In total, Google‘s Street View cars collected about 600 gigabytes of data transmitted over Wi-Fi networks in more than 30 countries.
Several putative class-action lawsuits were filed shortly after Google‘s announcement, and, in August 2010, the cases were transferred by the Judicial Panel on Multidistrict Litigation to the Northern District of California. In November, 2010, Plaintiffs-Appellees (collectively “Joffe“) filed a consolidated complaint, asserting claims against Google under the federal Wiretap Act,
Google moved to dismiss Joffe‘s consolidated complaint. The district court declined to grant Google‘s motion to dismiss Joffe‘s federal Wiretap Act claims.2 In re Google Inc. St. View Elec. Commc‘ns Litig., 794 F.Supp.2d at 1084. On Google‘s request, the court certified its ruling for interlocutory appeal under
B. District Court‘s Decision
Google maintained before the district court that it should have dismissed Joffe‘s Wiretap Act claims because data transmitted over unencrypted Wi-Fi networks falls under the statutory exemption that makes it lawful to intercept “electronic communications” that are “readily accessible to the general public.”
To answer this question, the district court first looked to the definitions supplied by the Act. In re Google Inc. St. View Elec. Commc‘ns Litig., 794 F.Supp.2d at 1075-76. The statute provides in relevant part that “‘readily accessible to the general public’ means, with respect to a radio communication, that such communication is not ... (A) scrambled or encrypted.”
The district court then considered whether data transmitted over a Wi-Fi network is a “radio communication” because the phrase is not defined by the Act. In re Google Inc. St. View Elec. Commc‘ns Litig., 794 F.Supp.2d at 1076-81. The court reasoned that “radio communication” encompasses only “traditional radio services,” and not other technologies that also transmit data using radio waves, such as cellular phones and Wi-Fi networks.3 Id. at 1079-83. Since Wi-Fi networks are not a “radio communication,” the definition of “readily accessible to the general public” provided by
Finally, the court addressed whether data transmitted over unencrypted Wi-Fi networks is nevertheless an “electronic communication” that is “readily accessible to the general public” under
II. OVERVIEW OF THE WIRETAP ACT
The Wiretap Act imposes liability on a person who “intentionally intercepts ... any wire, oral, or electronic communication,”
Google only argues, as it did before the district court, that it is exempt from liability under the Act because data transmitted over a Wi-Fi network is an “electronic communication ... readily accessible to the general public” under
Joffe contends that the definition of “readily accessible to the general public” in
As noted,
Admittedly, following the plain language of the statute creates some tension with
Although our reading may render
In short, we agree with Google that the definition of “readily accessible to the general public” in
III. ANALYSIS
In support of its position that it is exempt under
We reject both claims.4 We hold that the phrase “radio communication” in
A. Data Transmitted over a Wi-Fi Network Is Not a “Radio Communication” under the Wiretap Act.
We turn first to the question of whether data transmitted over a Wi-Fi network is a “radio communication” as that term is used in
1. The ordinary meaning of “radio communication” does not include data transmitted over a Wi-Fi network
The Wiretap Act does not define the phrase “radio communication” so we must give the term its ordinary meaning. See Hamilton v. Lanning, 560 U.S. 505, 513 (2010) (“When terms used in a statute are undefined, we give them their ordinary meaning.“); United States v. Daas, 198 F.3d 1167, 1174 (9th Cir.1999) (“If the statute uses a term which it does not define, the court gives that term its ordinary meaning.“).
According to Google, radio communication “refers to any information transmitted using radio waves, i.e., the radio frequency portion of the electromagnetic spectrum.” Appellant‘s Br. at 28. The radio frequency portion of the spectrum is “the part of the spectrum where electromagnetic waves have frequencies in the range of about 3 kilohertz to 300 gigahertz.” Id. at 27.
Google‘s technical definition does not conform with the common understanding held contemporaneous with the enacting Congress. See United States v. Iverson, 162 F.3d 1015, 1022 (9th Cir.1998) (“When a statute does not define a term, we generally interpret that term by employing the ordinary, contemporary, and common meaning of the words that Congress used“) (emphasis added). The radio frequency portion of the electromagnetic spectrum covers not only Wi-Fi transmissions, but also television broadcasts, Bluetooth devices, cordless and cellular phones, garage door openers, avalanche beacons, and wildlife tracking collars. See Fed. Commc‘n Comm‘n, Encyclopedia—FM Broadcast Station Classes and Service Countours, available at http://www.ntia.doc.gov/files/ntia/publications/ 2003-allochrt.pdf (last visited Aug. 13, 2013). One would not ordinarily consider, say, television a form of “radio communication.” Not surprisingly, Congress has not typically assumed that the term “radio” encompasses the term “television.” See, e.g.,
The Wiretap Act itself does not assume that the phrase “radio communication” encompasses technologies like satellite television that are outside the scope of the phrase as it is ordinarily defined. For example, the statute‘s damages provision sets out specified penalties when the “violation of this chapter is the private viewing of a private satellite video communication that is not scrambled or encrypted or if the communication is a radio communication that is transmitted on [frequencies specified by regulation].”
Google‘s proposed definition is in tension with how Congress—and virtually everyone else—uses the phrase. In common parlance, watching a television show does not entail “radio communication.” Nor does sending an email or viewing a bank statement while connected to a Wi-Fi network. There is no indication that the Wiretap Act carries a buried implication that the phrase ought to be given a broader definition than the one that is commonly understood. See Mohamad v. Palestinian Auth., 566 U.S. 449, 454 (2012) (favoring a definition that matches “how we use the word in everyday parlance” and observing that “Congress remains free, as always, to give the word a broader or different meaning. But before we will assume it has done so, there must be some indication Congress intended such a result“).
Importantly, Congress provided definitions for many other similar terms in the Wiretap Act, but refrained from providing a technical definition of “radio communication” that would have altered the notion that it should carry its common, ordinary meaning. See, e.g.,
2. A “radio communication” is a predominantly auditory broadcast, which excludes payload data transmitted over Wi-Fi networks
There are two telltale indicia of a “radio communication.” A radio communication
The payload data transmitted over unencrypted Wi-Fi networks that was captured by Google included emails, usernames, passwords, images, and documents that cannot be classified as predominantly auditory. They therefore fall outside of the definition of a “radio communication” as the phrase is used in
3. Defining “radio communication” to include only predominantly auditory broadcasts is consistent with the rest of the Wiretap Act
Crucially, defining “radio communication” as a predominantly auditory broadcast yields a coherent and consistent Wiretap Act. Google‘s overly broad definition does not. See K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988) (“In ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.“)
Throughout the Wiretap Act, Congress used the phrase “radio communication“—which is at issue here—and the similar phrase “communication by radio.” Even within the very provision that we are construing—
When read in context, the phrase “radio communication” tends to refer more narrowly to broadcast radio technologies rather than to the radio waves by which the communication is made. “Radio communication” is typically surrounded by words that evoke traditional radio technologies whenever it is used in the Act. See Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)
On the other hand, the Wiretap Act uses “communication by radio” to refer more broadly to any communication transmitted by radio wave. See
The way the phrase “radio communication” is used in
Relatedly, giving “radio communication” its ordinary meaning as a predominantly auditory broadcast also avoids producing absurd results that are inconsistent with the statutory scheme. See Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982) (“[I]nterpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available.“); Ariz. State Bd. for Charter Schools v. U.S. Dep‘t of Educ., 464 F.3d 1003, 1008 (9th Cir.2006) (“[W]ell-accepted rules of statutory construction caution us that ‘statutory interpretations which would produce absurd results are to be avoided. When a natural reading of the statutes leads to a rational, common-sense result, an alteration of meaning is not only unnecessary, but also extrajudicial.‘“). Under the expansive definition of “radio communication” proposed by Google, the protections afforded by the Wiretap Act to many online communications would turn on whether the recipient of those communications decided to secure her wireless network. A “radio communication” is “readily accessible to the general public” and, therefore, exempt from Wiretap Act liability if it is not scrambled or encrypted.
The definition of “readily accessible to the general public” in
Next, Google strenuously argues that the rest of the Wiretap Act supports its position that “radio communication” in
Google also looks beyond the Wiretap Act in an effort to fit its expansive definition of “radio communication” into the statutory scheme. It points out that the Communications Act expressly defines the phrases “radio communication” and “communication by radio” broadly to include “the transmission by radio of writing, signs, signals, pictures, and sounds of all kinds.”
Google also leans heavily on a series of amendments to
In 1994, Congress amended
The significance of all of this is that Congress repealed
This evidence of congressional action and inaction is far more equivocal than Google acknowledges. First, the task force‘s report does not control what the phrase “radio communication” meant to Congress when it enacted
Second, Congress‘s decision to add
Third, and perhaps most importantly, there is no reliable indication of what the 1996 Congress intended to accomplish by repealing
Alternatively, Congress might have (correctly) determined that
Neither of these entirely plausible explanations for the amendment and repeal are consistent with Google‘s assumption that the pre-1994 conception of “radio communication” included data transmitted over a Wi-Fi network and the 1996 repeal of
Finally, Google‘s fall back position is that the rule of lenity dictates that we
B. Wi-Fi Transmissions Are Not “Readily Accessible to the General Public” under 18 U.S.C. § 2511(2)(g)(i)
In the previous section, we concluded that payload data transmitted over a Wi-Fi network is not a “radio communication” under
First, Wi-Fi transmissions are not “readily” available because they are geographically limited and fail to travel far beyond the walls of the home or office where the access point is located. Google
Second, the payload data transmitted over unencrypted Wi-Fi networks is only “accessible” with some difficulty. Unlike traditional radio broadcasts, a Wi-Fi access point cannot associate or communicate with a wireless device until it has been authenticated. See IEEE Computer Soc‘y, IEEE Standard for Information Technology—Telecommunications and Information Exchange Between Systems—Local and Metropolitan Area Networks—Specific Requirements: Part 11: Wireless LAN Medium Access Control (MAC) and Physical Layer (PHY) Specifications 473, Fig. 11-6 (2007). Devices on Wi-Fi networks—even unencrypted networks—communicate via encoded messages sent to a specific destination over the wireless channel. Id. Therefore, intercepting and decoding payload data communicated on a Wi-Fi network requires sophisticated hardware and software. To capture this information, a wireless device must initiate a connection with the network and send encapsulated and coded data over the network to a specific destination. If the communications were intercepted by a traditional analog radio device they would sound indistinguishable from random noise. Wi-Fi transmissions are not “readily accessible” to the “general public” because most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network.8 Even if it is commonplace for members of the general public to connect
IV. CONCLUSION
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.
JAY S. BYBEE
UNITED STATES CIRCUIT JUDGE
