state-of-missouri-ex-rel-attorney-general-chris-koster-v-charter ( 2015 )

IN THE MISSOURI COURT OF APPEALS
WESTERN DISTRICT
STATE OF MISSOURI ex rel. )
ATTORNEY GENERAL CHRIS )
KOSTER, )
)
Appellant, )
)
v. ) WD78258
)
) OPINION FILED:
CHARTER COMMUNICATIONS, INC., ) May 26, 2015
d/b/a CHARTER COMMUNICATIONS; )
CHARTER FIBERLINK-MISSOURI, )
LLC; and CHARTER ADVANCED )
SERVICES (MO) LLC, )
)
Respondents. )
Appeal from the Circuit Court of Cole County, Missouri
The Honorable Patricia S. Joyce, Judge
Before Division III: Mark D. Pfeiffer, Presiding Judge, and
Gary D. Witt and Anthony Rex Gabbert, Judges
Appellant-Relator, Missouri Attorney General Chris Koster (“the AG”), appeals the
judgment of the Circuit Court of Cole County, Missouri (“trial court”), declaring that the Civil
Investigative Demands (“CIDs”) issued to Respondents by the AG were not authorized by the
Electronic Communications Privacy Act, 18 U.S.C. §§ 2701 et seq. (“ECPA”), and were thus not
enforceable. Because we conclude that the CIDs were “administrative subpoenas” contemplated
by the ECPA and did not violate Respondents’ constitutional rights of privacy, we reverse the
judgment of the trial court and enter the judgment the trial court should have entered.
Factual and Procedural Background
The salient facts of this case are not in dispute. They are as follows:
One of the responsibilities of the AG is investigating and prosecuting violations of
Missouri’s consumer protection statutes, Chapter 407 of the Revised Statutes of Missouri,
including the Missouri Telemarketing Law (§§ 407.1070 et seq.) and Missouri’s No-Call Law
(§§ 407.1095 et seq.). In furtherance of these investigations, the AG is authorized to issue CIDs
pursuant to section 407.040.
Respondents Charter Communications, Inc.; Charter Fiberlink-Missouri, LLC; and
Charter Advanced Services (MO), LLC, are for-profit companies wholly owned by Charter
Communications Holdings, LLC, an active Delaware corporation (collectively, “Charter”).
Among other things, Charter provides telephone and voice-over-internet-protocol service to
residential and commercial customers in the State of Missouri.
On June 12, 2014, the AG’s office served Charter with CID number 039-14JG (“the June
CID”). The June CID sought information and documentation regarding one of Charter’s
customers which was suspected of having violated Missouri’s no-call and telemarketing laws.
On July 29, 2014, the AG’s office sent CID number 059bb-14JK (“the July CID”) to Charter.
The July CID stated that an unknown Charter customer was suspected of having violated
Missouri’s telemarketing laws and requested information and documentation designed to
investigate such Charter customer. Invoking protections pursuant to the ECPA and article I,
2
section 15 of the Missouri Constitution, Charter refused to produce the information and
documentation sought by the AG’s CIDs.1
The AG’s office filed a petition seeking declaratory relief in the form of a judgment
stating that the CIDs were “administrative subpoenas” for purposes of the ECPA and that
nothing in article 1, section 15 precluded the AG from obtaining the requested information and
documentation requested in the June and July CIDs. The petition further requested the trial court
to order Charter to respond to both CIDs pursuant to section 407.090.
The parties agreed that the pertinent facts were not in dispute and filed dueling motions
for judgment on the pleadings. After briefing and argument, the trial court issued its judgment in
favor of Charter, thereby refusing to enforce the AG’s CIDs. This appeal follows.
Standard of Review
The trial court’s judgment on the pleadings addresses only issues of law. Accordingly,
our review is de novo and without deference to the trial court’s judgment. State ex rel. Kansas
City Symphony v. State, 311 S.W.3d 272, 274 (Mo. App. W.D. 2010).
Analysis
The AG asserts three interrelated points on appeal, which we discuss together for ease of
discussion.
1
The parties agree that the information sought was both “non-content” and “basic subscriber information.”
“Non-content” electronic data and information, which is governed by § 2703(c) of the ECPA, should be understood
in contrast with “content” electronic information and data, which is governed by § 2703(b) of the ECPA. “Content”
information would include, for example, the substantive contents of an email, phone call, etc. “Non-content”
information would be any other electronic information and data about a call or an email—the phone number that
was dialed, the length of the call, the time of the email, etc. This case concerns “non-content” information only, and
so is governed by § 2703(c). “Basic subscriber information” is that information expressly itemized by § 2703(c)(2)
and subject to production pursuant to, for example and relevant to this appeal, an “administrative subpoena
authorized by a Federal or State statute.” Originally, the AG’s CIDs had sought information argued by Charter to be
outside of the “basic subscriber information” contemplated by § 2703(c)(2), but the AG agreed to remove such
requests and Charter agrees that the information presently sought by the AG’s CIDs constitutes “basic subscriber
information.” Our ruling today is limited to a discussion of the application of the ECPA to CIDs constituting
“non-content” requests that only seek “basic subscriber information” as contemplated by § 2703(c) of the ECPA.
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I. Civil Investigative Demands as Administrative Subpoenas
The ECPA generally prohibits providers of electronic communications services from
disclosing any information about its customers or their electronic communications. Conversely,
pursuant to the ECPA, a governmental entity may require a provider of electronic
communications to divulge its customers’ non-content2 “record[s] or other information
pertaining to [that] subscriber . . . or customer[.]” 18 U.S.C. § 2703(c). These requests are
limited to certain types of process. Id. Section 2703(c) differentiates between two types of
non-content information. The first category of non-content information (which is relevant to this
appeal) is often referred to as “basic subscriber information”3 and is limited to the customer’s:
(A) name;
(B) address;
(C) local and long distance telephone connection records, or records of session
times and durations;
(D) length of service (including start date) and types of service utilized;
(E) telephone or instrument number or other subscriber number or identity,
including any temporarily assigned network address; and
(F) means and source of payment for such service (including any credit card or
bank account number)[.]
18 U.S.C. § 2703(c)(2). The governmental entity, here the AG, can only obtain basic subscriber
information via one of the following ways:
(1) “ an administrative subpoena authorized by a Federal or State statute,”
(2) “a Federal or State grand jury or trial subpoena,”
(3) “a warrant issued using the procedures described in the Federal Rules of
Criminal Procedure (or, in the case of a State court, issued using State warrant
procedures) by a court of competent jurisdiction,”
2
See n.1, supra.
3
See n.1, supra.
4
(4) “a court order for such disclosure under [§ 2703(d)],”
(5) “the consent of the subscriber or customer to such disclosure,” or
(6) “a formal written request relevant to a law enforcement investigation
concerning telemarketing fraud [but limited to information identifying] the
name, address, and place of business of a subscriber or customer of such
provider [.]”
18 U.S.C. § 2703(c)(1)-(2) (emphasis added).
Most often, § 2703 is used when law enforcement is attempting to investigate criminal
offenses, and it was clearly written with criminal investigations in mind. See Federal Trade
Comm’n v. Netscape Commc’ns Corp., 196 F.R.D. 559, 560 (N.D. Cal. 2000). However, courts
have found that it also encompasses a governmental entity’s ability to obtain information
regarding electronic communications in civil cases, id., and the plain language of § 2703(c) is
broad enough to support its application in both criminal and civil matters. See also Telecomms.
Regulatory Bd. of Puerto Rico v. CTIA-The Wireless Ass’n, 752 F.3d 60, 65-67 (1st Cir. 2014).
Given the procedural posture of this case, the only relevant disclosure process is via
“administrative subpoena.” We therefore turn our analysis to the nature and origin of the CID
and whether it constitutes an administrative subpoena.
Section 407.040 allows the AG to issue CIDs in its investigation of possible violations of
the Missouri Merchandising Practices Act, including the Telemarketing Law and the No-Call
Law. It provides, in part:
When it appears to the attorney general that a person has engaged in or is
engaging in any method, act, use, practice or solicitation declared to be unlawful
by this chapter or when he believes it to be in the public interest that an
investigation should be made to ascertain whether a person in fact has engaged in
or is engaging in any such method, act, use, practice or solicitation, he may
execute in writing and cause to be served upon any person who is believed to
have information, documentary material, or physical evidence relevant to the
alleged or suspected violation, a civil investigative demand requiring such person
to appear and testify, or to produce relevant documentary material or physical
evidence . . . . Service of any civil investigative demand, notice, or subpoena may
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be made by any person authorized by law to serve process or by any duly
authorized employee of the attorney general.
§ 407.040.1. Section 407.1107, which is part of the No-Call Law, also provides that “[t]he
attorney general may issue investigative demands, issue subpoenas, administer oaths and conduct
hearings in the course of investigating a violation” of the No-Call Law. § 407.1107.1.
The Missouri Supreme Court has held that Missouri’s CID proceeding “is patterned after
the parallel provisions” of the federal proceedings set forth in the Federal Antitrust Civil Process
Act, 15 U.S.C. § 1312; this federal procedure is, notably, also labeled “Civil Investigative
Demand.” Ashcroft v. Goldberg, 608 S.W.2d 385, 388 (Mo. banc 1980). Goldberg also dictates
that “[s]ince the Missouri CID statute has received virtually no judicial attention, the best
available authority on the subject consists of federal decisions which have construed and applied
the provisions of the Federal Antitrust Civil Process Act.” Id.
The United States District Court for the District of Minnesota analyzed the Federal
Antitrust Civil Process CID as an administrative subpoena, calling it “an innovation in the civil
investigative powers of the Attorney General.” Petition of Gold Bond Stamp Co., 221 F. Supp.
391, 395-96 (D. Minn. 1963). The Utah Court of Appeals, citing Gold Bond Stamp, analyzed its
CID process similarly. Brixen & Christopher Architects v. State, 29 P.3d 650, 656-57 (Utah Ct.
App. 2001); see also id. at 664 (Davis, J., dissenting) (“CIDs are a method by which the attorney
general may compel an individual or corporation to provide ‘information relevant to a civil
antitrust investigation.’ . . . Thus, CIDs are essentially administrative subpoenas issued by the
attorney general.”). The Supreme Court of Colorado analyzed a CID provision found in the
Colorado Organized Crime Control Act, which itself was patterned after the Federal Antitrust
Civil Process Act, as an administrative subpoena. See Benson v. People, 703 P.2d 1274, 1277-78
n.5 & 1278-79 (Colo. banc 1985). And, although applying the CID provisions of the Federal
False Claims Act, 31 U.S.C. §§ 3279-33, rather than those of the Federal Antitrust Civil Process
6
Act, the Sixth Circuit, in United States v. Markwood, 48 F.3d 969, 974 n.4 (6th Cir. 1995), stated,
“Although here we have used the term ‘CID’ without explanation, we believe it is a type of
administrative subpoena. Because everyone involved in this litigation uses the term, we will use
CID and administrative subpoena interchangeably.” Finally, the D.C. Circuit, applying the CID
provision of the Federal Trade Commission Act, 15 U.S.C. § 57b-1(c)(1), analyzed the CIDs as
administrative subpoenas. Fed. Trade Comm’n v. Invention Submission Corp., 965 F.2d 1086,
1087-91 (D.C. Cir. 1992).
These cases’ analyses of CIDs as administrative subpoenas comports with the purpose of
section 407.040 CIDs. They “provide a form of pretrial discovery for the benefit of the attorney
general.” Goldberg, 608 S.W.2d at 388. Also, although the AG’s office is not an administrative
agency, when issuing CIDs under section 407.040, the AG is performing an administrative
function. It is the functional equivalent of a civil enforcement agency enforcing the civil
consumer protection laws of Missouri. While performing this administrative function, similar to
administrative agencies, the AG, under the No-Call Law, is permitted to “issue investigative
demands, issue subpoenas, administer oaths and conduct hearings.” § 407.1107.1. And also like
an administrative agency, the AG is granted “the authority to promulgate . . . all rules necessary
to the administration and enforcement of the provisions of [the Merchandising Practices Act].”
§ 407.145. See also Brixen, 29 P.3d at 659 (under a virtually identical CID statutory scheme,
attorney general of Utah treated as administrative agency).
Moreover, compliance with section 407.040 CIDs is obtained in the same manner as
historically provided for administrative subpoenas. When discussing enforcement of CIDs,
which the court also calls administrative subpoenas, under the Federal Trade Commission Act,
the D.C. Circuit stated, “The agency, in issuing a[n administrative] subpoena, has undertaken no
final administrative action; a[n administrative] subpoena becomes an appealable final order only
7
after the subpoenaed party refuses to comply and the agency requests and receives judicial
enforcement.” Invention Submission Corp., 965 F.2d at 1089. The same is true of CIDs under
section 407.040. The CIDs are not independently enforceable. If the recipient refuses to comply
with the CID, the AG may seek to have the court order compliance pursuant to section 407.090.
Thus in purpose and function, chapter 407 CIDs are the same as administrative subpoenas.
Accordingly, for purposes of the ECPA, we conclude that the CIDs issued by the AG are
administrative subpoenas.4
II. Constitutional Limitations on Civil Investigative Demands
Charter argues that, even if CIDs are deemed to be administrative subpoenas, and thus
their enforcement is not limited by the ECPA, they should not be enforced because they violate
article I, section 15 of the Missouri Constitution. Article I, section 15, is the Missouri equivalent
of the Fourth Amendment to the United States Constitution. It was amended in 2014, and
presently provides:
[t]hat the people shall be secure in their persons, papers, homes, effects, and
electronic communications and data, from unreasonable searches and seizures;
and no warrant to search any place, or seize any person or thing, or access any
electronic data or communication, shall issue without describing the place to be
searched, or the person or thing to be seized, or the data or communication to be
accessed, as nearly as may be; nor without probable cause, supported by written
oath or affirmation.
MO. CONST. art. I, § 15. The recent amendments to this provision added the express restrictions
on issuance of warrants to “access any electronic data or communication” without probable
4
Charter notes that section 407.040.3 dictates that no CID shall “[c]ontain any requirement which would be
unreasonable or improper if contained in a subpoena duces tecum issued by a court of this state” and cites Brixen &
Christopher Architects v. State, 29 P.3d 650 (Utah Ct. App. 2001). We note two things about Brixen. First, the
court analyzed the CIDs in question as administrative subpoenas. Second, though the Utah court was discussing the
CIDs in relationship to standards applied to subpoenas duces tecum, it was doing so in the context of determining
whether the information sought in the CIDs was sufficiently relevant and reasonable to satisfy the constraints on
administrative subpoenas imposed by the Fourth Amendment. Id. at 663-64. Frankly, we agree with both premises
of the Brixen court; namely, that CIDs are administrative subpoenas, and that the information sought in the CIDs
must still comply with due process principles outlined by the Fourth Amendment to the United States Constitution
and, in our case, as applied to the State of Missouri via article I, section 15 of the Missouri Constitution. As we
discuss next in our ruling, the AG’s CIDs do, in fact, pass constitutional muster.
8
cause supported by written oath or affirmation. So, in this respect, article I, section 15 differs
from the Fourth Amendment. However, courts have long already interpreted the Fourth
Amendment’s protections as covering electronic communications and data in addition to
“persons, houses, papers, and effects.” See, e.g., Katz v. United States, 389 U.S. 347, 353 (1967)
(“The Government’s activities in electronically listening to and recording the petitioner’s words
violated the privacy upon which he justifiably relied while using the telephone booth and thus
constituted a ‘search and seizure’ within the meaning of the Fourth Amendment.”); State v.
Faruqi, 344 S.W.3d 193, 204-05 (Mo. banc 2011) (computer data analyzed under the Fourth
Amendment, but the employee had no reasonable expectation of privacy in a computer owned by
his employer). Because the Fourth Amendment is already being interpreted to protect electronic
communications and data, we conclude that article I, section 15, even as amended, is not
currently measurably more restrictive on the government than is the Fourth Amendment.
Charter argues that it has a constitutionally protected interest in the “private information
and data” that it keeps, including its business records regarding its customers’ communications.
We agree that Charter’s business records may be considered “papers” protected by the Fourth
Amendment. See Patel v. City of Los Angeles, 738 F.3d 1058, 1061-62 (9th Cir. 2013). We also
agree that the AG’s issuance of the CIDs, if enforced, would constitute a search of Charter’s
records. “The question we must next decide is whether the search[] authorized by [section
407.040 is] reasonable. Ordinarily, to answer that question, we would balance the need to search
against the invasion which the search entails.” Id. at 1063 (internal quotation omitted). Unlike a
police search in a criminal investigation, which might require a warrant supported by probable
cause, “[t]he Supreme Court has made clear that, to be reasonable, an administrative
record-inspection scheme need not require issuance of a search warrant, but it must at a
minimum afford an opportunity for pre-compliance judicial review.” Id. (emphasis added). The
9
CID procedure at issue provides just such an opportunity. Once a CID is served, the recipient
has until the return date specified in the CID, up to twenty days, to file a petition to modify or set
aside the CID. § 407.070. In such a petition, the recipient may state its objections to the CID,
and why it believes that the CID is unreasonable.5
In addition to the requirement that there be some mechanism for the recipient of an
administrative investigative demand to be able to seek pre-compliance judicial review, the
Fourth Amendment’s reasonableness requirement mandates that: (1) the investigative demand
comply with the statute authorizing it, Benson v. People, 703 P.2d 1274, 1278 (Colo. banc 1985);
(2) the information sought is relevant to the administrative inquiry, id.; and (3) the investigative
demand is not too indefinite or too broad, United States v. Golden Valley Electric, 689 F.3d
1108, 1113 (9th Cir. 2012). In this case, the AG agreed to accept only the basic subscriber
information regarding the Charter subscribers that would be available to the AG under the
“administrative subpoena” exception of the ECPA. In addition, the CIDs informed Charter of
what civil provisions the Charter customers were being investigated of having violated, and there
is nothing in the record demonstrating that the AG’s demands were unduly broad, overly
burdensome, or irrelevant.6 Accordingly, we conclude that neither the Fourth Amendment to the
United States Constitution nor article I, section 15 of the Missouri Constitution prohibits
enforcement of the CIDs issued by the AG.
5
Here, Charter did not utilize section 407.070 to challenge the CIDs. However, it did contact the AG’s
office to let it know that it would not comply with the CIDs; the two parties also met to negotiate a solution even
though an agreement was not reached. Because the AG’s office participated in the negotiations with Charter, the
trial court permitted Charter to assert its defenses to the CIDs out of time in its answer to the AG’s petition under
section 407.090. We conclude that it was not an abuse of the trial court’s discretion to allow Charter to assert its
defenses in this manner. That said, the prescribed and preferable method for recipients of CIDs to lodge objections
to CIDs is to follow the statutory scheme outlined by section 407.070.
6
Charter alternatively argues on appeal that a warrant and probable cause are necessary in addition to the
CIDs because Charter’s subscribers may ultimately be subject to civil monetary penalties associated with violations
of Missouri’s No-Call and Telemarketing laws. Resp. Br. 34. However, Charter is not accused or suspected of
violating any laws; rather, it is Charter’s subscribers that are being investigated. Thus, Charter simply does not have
standing to assert Fourth Amendment electronic privacy interests that belong to Charter’s subscribers—not to
Charter. United States v. Golden Valley Electric, 689 F.3d 1108, 1116 (9th Cir. 2012).
10
The AG’s appeal is granted.
Conclusion
For the reasons stated above, we reverse the judgment of the trial court. “[W]hen a trial
court fails to make a [correct] declaration settling rights, . . . a reviewing court may, in its
discretion, make the declaration that should have been made.” Vowell v. Kander, 451 S.W.3d
267, 272 (Mo. App. W.D. 2014) (citing Nicolai v. City of St. Louis, 762 S.W.2d 423, 426 (Mo.
banc 1988)). See also Rule 84.14 (Appellate courts are authorized to issue “such judgment as the
court ought to give. Unless justice otherwise requires, the [appellate] court shall dispose finally
of the case.”). Here, where the parties do not dispute the salient facts and Charter’s defenses
have been fully addressed and rejected by our ruling today, we exercise our discretion to enter
the judgment that should have been entered by the trial court: namely, the CIDs issued by the
AG constitute administrative subpoenas as contemplated by the ECPA; the CIDs issued by the
AG do not violate any constitutional principles as set forth in the Fourth Amendment to the
United States Constitution or article I, section 15 of the Missouri Constitution; and Charter is
hereby ordered to produce the non-content basic subscriber information requested by the June
and July CIDs within thirty days from the date upon which final mandate issues from this Court
in this appeal.
Mark D. Pfeiffer, Presiding Judge
Gary D. Witt and Anthony Rex Gabbert, Judges, concur.
11