1. Internet Legal Issues (Management 447) Professor Charles H. Smith Privacy (Chapter 9) Spring 2006

2. Reasonable Expectation of Privacy  The foundation for all theories grounded in the right to privacy.  May be formed by factors such as applicable law, the parties’ relationship, and any other relevant circumstances.  Case studies re use of telephone – Katz v. United States (pp. 261-64) and Bartnicki v. Vopper (page 265).

3. Constitutional Bases for Right to Privacy  Federal – the word “privacy” is never mentioned, but 4 th Amendment protects against unreasonable searches and seizures by government, and 9 th Amendment prevents government denial of other rights not stated in the Bill of Rights that are “retained by the people”; various United States Supreme Court cases have created a right to privacy (e.g., Roe v. Wade).  California – expressly stated in Article 1, Section 1; protects against government and private conduct.

4. Common Law Bases for Right to Privacy  Use of a person’s name, picture or likeness for commercial purposes without permission (aka the right to publicity).  Intrusion into a person’s private life.  Public disclosure of private facts.  False light.

5. Statutory Bases for Right to Privacy  Fair Credit Reporting Act – prohibits disclosure of information re credit history or employment data from person’s credit file.  Electronic Funds Transfer Act – requires that consumer contracts re electronic funds transfers state when and how information about them may be disclosed.  Child Online Protection Act – directs FTC to adopt regulations re children’s personal information.  Computer Fraud and Abuse Act – civil and criminal remedies when crackers or others who break into computer network or exceed authorized access and obtain protected information (e.g., financial or medical).  Evidentiary privileges, such as attorney-client, doctor- patient or clergy-penitent (but note that privileges are generally founded in common law).  Case study re Electronic Communications Privacy Act – In re DoubleClick, Inc. Privacy Litigation (pp. 281-83).

6. Privacy in the Workplace  What is an employee’s reasonable expectation of privacy in the workplace?  What is an employer’s exposure to legal action for employee’s personal computer use at work (e.g., sexual harassment)?  How much employee time is wasted on personal computer use at work?  Case studies – Smyth v. Pillsbury Co. (pp. 294-96) and Konop v. Hawaiian Airlines (pp. 297-99).

7. Spam  Spam is the e-mail equivalent of junk mail; it is an unsolicited advertisement sent by e- mail.  Federal anti-spam statute – Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) regulates senders and advertisers re commercial e-mail messages (Ballon, pp. 120-21).  Case studies – Cyber Promotions, Inc. v. America Online, Inc. (pp. 288-90), CompuServe, Inc. v. Cyber Promotions (pp. 290-92), and Intel Corp. v. Hamidi, 30 Cal.4 th 1342 (2003) (see following slides re Intel case).

8. Intel Corp. v. Hamidi – Introduction  Computer company (Intel) sought injunction vs. former employee (Hamidi) to prevent him from sending further e-mails to Intel employees.  Hamidi had sent about 200,000 e- mails (negative about Intel) to 8,000-35,000 employees on six occasions over 21-month period; Hamidi removed any employee who requested removal from e-mail list but refused Intel’s request to stop totally.

9. Intel Corp. v. Hamidi – Procedural History and Issue  Trial court granted Intel’s MSJ and issued injunction on theory of trespass to chattels; court of appeal affirmed but California Supreme Court reversed (see following slides for holding and reasons).  Issue – “whether the undisputed facts demonstrate Hamidi’s actions caused or threatened to cause damage to Intel’s computer system, or injury to its rights in that personal property, such as to entitle Intel to judgment as a matter of law.” (30 Cal.4 th at 1352.)

10. Intel Corp. v. Hamidi – Supreme Court’s Holding and Reasons  Holding – Hamidi won because trespass to chattels (based on defendant’s deprivation of plaintiff’s possessory interest in personal property) does not now and should not be extended to encompass Hamidi’s e-mails, which did not damage or impair the functioning of Intel’s computer system. (30 Cal.4 th at 1347.)  Court first distinguished prior cases (Thrifty-Tel and federal anti-spamming cases); number of Hamidi’s e-mails “minuscule compared to the amounts of mail sent by commercial operations” since spam now 45% of all e-mails. (30 Cal.4 th at 1356.)

11. Intel Corp. v. Hamidi – Reasons cont.  No damage could be attributed to Intel’s employees being distracted from their work due to content of Hamidi’s e-mails since no impact on Intel’s possessory interest in its computer system; also, Intel has no property interest in employees’ time. (30 Cal.4 th at 1359.)

12. Intel Corp. v. Hamidi – Reasons cont.  “Intel connected its e-mail system to the Internet and permitted its employees to make use of this connection both for business and, to a reasonable extent, for their own purposes. In doing so, the company necessarily contemplated the employees' receipt of unsolicited as well as solicited communications from other companies and individuals. That some communications would, because of their contents, be unwelcome to Intel management was virtually inevitable. Hamidi did nothing but use the e-mail system for its intended purpose – to communicate with employees. The system worked as designed, delivering the messages without any physical or functional harm or disruption. These occasional transmissions cannot reasonably be viewed as impairing the quality or value of Intel's computer system.” (30 Cal.4 th at 1359-60.)

13. Intel Corp. v. Hamidi – Reasons cont.  While Court did not need to deal with 1 st Amendment issue (having resolved the case on common law reasons), it did say that only party(ies) possibly entitled to injunction were those employees who requested removal from Hamidi’s e- mail list, but no need since Hamidi removed anyone who requested it. (30 Cal.4 th at 1365.)

14. Intel Corp. v. Hamidi – Justice Kennard’s Concurrence  Justice Kennard agreed with the majority, even though she sympathized with Intel, stating that Intel could avoid the “distraction” problem by telling employees to delete Hamidi’s e-mails without reading them and requesting Hamidi to be removed from his e-mail list. (30 Cal.4 th at 1366-67.)

15. Intel Corp. v. Hamidi – Justice Brown’s Dissent  “Intel Corporation has invested millions of dollars to develop and maintain a computer system. It did this not to act as a public forum but to enhance the productivity of its employees. Kourosh Kenneth Hamidi sent as many as 200,000 e-mail messages to Intel employees. The time required to review and delete Hamidi's messages diverted employees from productive tasks and undermined the utility of the computer system. ‘There may... be situations in which the value to the owner of a particular type of chattel may be impaired by dealing with it in a manner that does not affect its physical condition.’ (Rest.2d Torts, § 218, com. h, p. 422.) This is such a case.” (30 Cal.4 th at 1367.)

16. Intel Corp. v. Hamidi – Justice Mosk’s Dissent  “The majority fail to distinguish open communication in the public ‘commons’ of the Internet from unauthorized intermeddling on a private, proprietary intranet. Hamidi is not communicating in the equivalent of a town square or of an unsolicited ‘junk’ mailing through the United States Postal Service. His action, in crossing from the public Internet into a private intranet, is more like intruding into a private office mailroom, commandeering the mail cart, and dropping off unwanted broadsides on 30,000 desks. Because Intel's security measures have been circumvented by Hamidi, the majority leave Intel, which has exercised all reasonable self-help efforts, with no recourse unless he causes a malfunction or systems ‘crash.’ Hamidi's repeated intrusions did more than merely ‘prompt[] discussions between “[e]xcited and nervous managers” and the company's human resources department’... they also constituted a misappropriation of Intel's private computer system contrary to its intended use and against Intel's wishes.” (30 Cal.4 th at 1386.)