In Brief

• In a significant ruling on email privacy, the Northern District of California held that Google’s interception and scanning of user emails for the purpose of creating targeted advertisements and user profiles may violate state and federal wiretapping laws.
• Employers that monitor employee emails should take note of this decision and its potential implications, but understand that the holding is limited to communications that are “in transit.”

Google, Inc.’s practice of “reading” user emails may constitute wiretapping, according to a federal district judge in California. Last month, Northern District of California District Judge Lucy Koh denied Google’s motion to dismiss a class action lawsuit accusing Google of violating state and federal wiretapping laws through its practice of intercepting and scanning user emails in order to develop targeted advertisements and user profiles. The case is In Re: Google Inc. Gmail Litigation, 13-MD-02430-LHK, and the full decision can be found at http://www.privacyandsecuritymatters.com/files/2013/09/Gmail_Litigation_Order.pdf.

The case involves a consolidated multi-district litigation in which plaintiffs are seeking damages on behalf of several classes of Gmail (the email service provided by Google) users and non-Gmail users who sent or received messages from Gmail users. The outcome of the case could have far reaching effects regarding email services and consumer privacy.

In its motion to dismiss, Google argued that scanning the messages did not constitute wiretap violations because the practice falls under an exemption for activities that take place “in the ordinary course of its business.” Additionally, Google argued that both Gmail and non-Gmail users either explicitly or impliedly consented to the interception and scanning of the messages through Google’s Terms of Service and Privacy Policies. Judge Koh disagreed with both arguments.

With regard to consent, Google argued that by agreeing to its Terms of Service and Privacy Policies, all Gmail users “consented to Google reading their emails.” Google further suggested that non-Gmail users impliedly consented to Google’s interception when those users sent or received emails from a Gmail user. Google implemented multiple versions of its Terms of Service and Privacy Policies during the period at issue. However, the District Court held that it could not be said that any of the classes consented to such interception and use because the language in each iteration of Google’s Terms of Service and Privacy Policies “did not explicitly notify Plaintiffs that Google would intercept users’ emails for the purposes of creating user profiles or providing targeted advertising.”

Additionally, the District Court ruled that the “ordinary course of business” exemption did not apply because Google’s interception of the messages was neither instrumental nor incidental to the operation of its email services. Rather, the District Court found that “Google’s interceptions of emails for targeting advertising and creating user profiles occurred independently from the rest of the email-delivery system.” This was evident in that the Gmail system allegedly had “separate processes for spam filtering, antivirus protections, spell checking, language detection, and sorting than the devices that perform alleged interceptions that are challenged in this case.”

In discussing the narrow application of the “ordinary course of business” exception, Judge Koh observed that “[t]he narrow construction of ‘ordinary course of business’ is most evident in [wiretap] cases where an employer has listened in on employee’s phone calls in the workplace.” Judge Koh cited several federal cases supporting the proposition that the “ordinary course of business” is narrowly construed in the employment context to allow employer “eavesdropping” on employee phone calls where the employer provides notice and that “there must be some nexus between the need to engage in the alleged interception and the subscriber’s ultimate business, that is, the ability to provide the underlying service or good.”

For employers concerned with a variety of internal employment issues – such as the possibility that employees may be revealing company secrets to competitors – the Court’s ruling has limited effect. For instance, neither the federal nor Pennsylvania wiretapping statutes prohibit employers from accessing employee emails stored on the employer’s computers and servers. See Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107 (3d Cir. 2003). Such actions do not constitute an “interception” under the wiretap laws because the search is not conducted contemporaneously as the communication is in transit.

Nonetheless, Judge Koh’s decision provides a roadmap that other courts may choose to follow. The principles she enunciated serve as a framework for determining what email providers may lawfully do to monetize free services and what employers may lawfully do to monitor employee email use.