UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION




STEVE JACKSON GAMES
INCORPORATED, et al.,
     Plaintiffs,


v.


UNITED STATES SECRET SERVICE, UNITED STATES OF AMERICA, et al., Defendants




                             _Opinion_


                             I. Facts


The issues remaining at trial in this lawsuit involves the Plaintiffs
Steve Jackson Games, Incorporated, Steve Jackson, Elizabeth McCoy, Walter
Milliken, and Steffan O'Sullivan's causes of action against the United
States Secret Service and the United States of America pursuant to three
statutes, "Private Protection Act", 42 U.S.C. 2000aa _et seq_.; "Wire and
Electronic Communications Interception and Interception of Oral
Communication' Act, 18 U.S.C. 2510, et seq.; and "Stored Wire and
Electronic Communications and Transactional Records Access" Act, 18 U.S.C
2701, _et seq_. All other issues and parties have been withdrawn by
agreement of these remaining parties.


The individual party plaintiffs are residents of the states of Texas and
New Hampshire, and the corporate plaintiff is a Texas corporation with its
principal place of business in Austin, Texas.


The Plaintiff Steve Jackson started Steve Jackson Games in 1980 and
subsequently incorporated his business. Steve Jackson Games, Incorporated,
publishes books, magazines, box games, and related products F1. More than
50 percent of the corporation's revenues are derived from its
publications. In addition, Steve Jackson Games, Incorporated, beginning in
the mid-1980s and continuing through this litigation, operated from one of
its computers an electronic bulletin board system called Illuminati. This
bulletin board posts information to the inquiring public about Steve
Jackson Games' products and activities; provides a medium for receiving
and passing on information from the corporation's employees, writers,
customers, and its game enthusiasts; and, finally, affords its users
electronic mail whereby, with the use of selected passwords, its users can
send and receive electronic mail (E-mail) in both public and private
modes. In February of 1990, there were 365 users of the Illuminati
bulletin board.


Steve Jackson was both the owner and employee of Steve Jackson Games,
Incorporated, and authored many of its publications; he used both
Illuminati's public and private programs for electronic mail and his use
ranged from business records of the corporation, contracts with his
writers, communication with his writers regarding articles which were
intended to be published by the corporation, to private communications
with his business associates and friends. Elizabeth McCoy's use of the
Illuminati bulletin board involved her participation as a game player, her
critiques as to the games and publications of the corporation, and her
private communications with associates and friends. William Milliken's use
of the Illuminati bulletin board was apparently limited to private
communicates to associates and friends. Steffan O'Sullivan's use of the
Illuminati bulletin board included writings for publication by Steve
Jackson Games, Inc., his business dealings with the corporation, and
public and private communications with associates and friends.


Importantly, prior to March l, 1990, and at all other times, there has
never been any basis for suspicion that any of the Plaintiffs 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.


In October of 1988, Henry Kluepfel, Director of Network Security
Technology (an affiliate Bell Company), was advised a sensitive,
proprietary computer document of Bell South relating to Bell's "911
program" had been made available to the public on a computer bulletin
board in Illinois. Kluepfel reported this information to Bell South and
requested instructions, but received no response. In April of 1989,
Kluepfel confirmed the 911 Bell document was available on the Illinois
computer bulletin board and learned the document was additionally
available without any proprietary notice on at least another computer
bulletin board and had been or was being published in a computer bulletin
board newsletter in edited form. In July of 1989, Kluepfel was finally
instructed by Bell South to report the "intrusion of its computer
network to the Secret Service and that the document taken was "sensitive"
and "proprietary. Kluepfel had previously worked with the Secret Service
and was known as an expert and reliable informant on computer "hacking."
F2 Thereafter, Kluepfel met Assistant U. S. Attorney William Cook in
Chicago and thereafter communicated with Cook and Secret Service Agent Tim
Foley. Agent Foley was in charge of this particular investigation.


Around February 6, l990, Kluepfel learned that the 911 document was
available on a computer billboard entitled "Phoenix" which was operated by
Loyd Blankenship in Austin, Texas. Kluepfel "downloaded" the document to
put in readable form and then advised these facts to the Secret Service.
Prior to February 26, 1990, Kluepfel learned that Blankenship not only
operated the Phoenix bulletin board, but he was a user of the Illinois
bulletin board wherein the 911 document was first disclosed, was an
employee of Steve Jackson Games, Inc., and a user of the Steve Jackson
Games, Inc.'s bulletin board "Illuminati." Kluepfel's investigation also
determined that Blankenship was a 'co-sysop" of the Illuminati bulletin
board, which means that he had the ability to review anything on the
Illuminati bulletin board and, importantly, maybe able to delete anything
on the system. Blankenship's bulletin board Phoenix had published "hacker"
information and had solicited "hacker" information relating to passwords,
ostensibly to be analyzed in some type of decryption scheme. By February
26, 1990, Kluepfel determined that the Phoenix bulletin board was no
longer accessible as he could not "dial" or "log into" it. He reported
this to Agent Foley. While Kluepfel advised Agent Foley that Blankenship
was an employee of Steve Jackson Games, Inc., and was a user and co-sysop
of Illuminati, Kluepfel never had any information whereby he was
suspicious of any criminal activity by any of the Plaintiffs in this
cause. Kluepfel was, and is, knowledgeable in the operation of computers,
computer bulletin boards, the publishing of materials and document by
computers, the communications through computer bulletin boards (both
public and private communications), and could have "logged" into the
Illuminati bulletin board at any time and reviewed all of the information
on the bulletin board except for the private communications referred to by
the Plaintiffs as electronic communications or electronic mail, but did
not do so. Kluepfel had legitimate concerns, both about the 911 document
stolen from Bell South and the possibility of a decryption system which
could utilize passwords in rapid fashion and could result in intrusions of
computer systems, including those of the Bell System.


In February of 1990, Agent Foley was also knowledgeable about computer
bulletin boards and he too could have "logged" into Illuminati, become a
user and reviewed all public communications on the bulletin board, but did
not do so.


By February 28, 1990, when the search warrant affidavit was executed,
Agent Foley had received information from reliable sources (Kluepfel,
Williams, Spain, Kibbler, Coutorie, and Niedorf, and possibly others F3)
there had been an unlawful intrusion on the Bell South computer program,
the 911 Bell South document was a sensitive and proprietary document, and
that computer hackers were attempting to utilize a decryption procedure
whereby unlawful intrusions could be made to computer programs including
the Defense Department, and these hackers were soliciting passwords so
that the decryption procedure could become operational. In addition, Agent
Foley was advised Loyd Blankenship had operated his Phoenix bulletin board
from his home, had published the 911 Bell South document in edited form,
and had published and communicated that a decryption strategy was
available and other "hackers" should submit selective passwords to
finalize the decryption scheme for intrusions into computer systems by
using a rapid deployment of passwords. Agent Foley was also advised that
Blankenship was an employee of Steve Jackson Games and had access to the
Illuminati bulletin board as a user and a co-sysop and he may well (and in
fact did) have the ability to delete any documents or information in the
Steve Jackson Games computers and Illuminati bulletin board. The only
information Agent Foley had regarding Steve Jackson Games, Inc. and Steve
Jackson was that he thought this was a company that put out games, but he
also reviewed a printout of Illuminati on February 25, 1990, which read,
"Greetings, Mortal! You have entered the secret computer system of the
Illuminati, the on-line home of the world's oldest and largest secret
conspiracy. 5124474449300/1200/2400BAUD fronted by Steve Jackson Games,
Incorporated. Fnord." The evidence in this case strongly suggests Agent
Foley, without any further investigation, misconstrued this information to
believe the Illuminati bulletin board was similar in purpose to
Blankenship's Phoenix bulletin board, which provided information to and
was used by "hackers." Agent Foley believed, in good faith, at the time of
the execution of his affidavit on February 28, 1990, there was probable
cause to believe Blankenship had the 911 Bell South document and
information relating to the decryption scheme stored in his computer at
home or perhaps in computers, disks, or in the Illuminati bulletin board
at his place of employment at Steve Jackson Games, Inc.; that these
materials were involved in criminal activities; and that Blankenship had
the ability to delete any information stored on any of these computers
and/or disks.


Unfortunately, although he was an attorney and expressly represented this
fact in his affidavit, Agent Foley was not aware of the Privacy Protection
Act, 42 U.S.C. 2000aa _et seq._, and he conducted no investigation about
Steve Jackson Games, Incorporated, although a reasonable investigation of
only several hours would have revealed Steve Jackson Games, Inc. was, in
fact, a legitimate publisher of information to the public and Mr. Jackson
would have cooperated in the investigation. Agent Foley did not know the
individual Plaintiffs but did know they were users of Illuminati as he had
a list of all users prior to February 28, 1990. Agent Foley did know and
understand the Illuminati bulletin board would have users and probably
would have stored private electronic communications between users.
Notwithstanding the failure of any investigation regarding Steve Jackson
Games, Agent Foley and Assistant U. S. Attorney Cook intended to seize and
review all of the information and documents in any computer accessible to
Blankenship, regardless of what other incidental information would be
seized. These intentions were expressly stated in their application for a
search warrant and the warrant itself. F4


Foley's affidavit, executed on February 28, 1990, was sufficient under the
law for the issuance of a search warrant by the United States Magistrate
Judge. The Court does not find from a preponderance of the evidence that
the admitted errors in Foley's affidavit were intentional and so material
to make the affidavit and issuance of the warrant legally improper. _See,
Franks v. Delaware_, 438 U.S. 154, 98 S.Ct. 2674 (1978). The factual
errors in the affidavit include the Bell 911 document was a computer
program; the Bell 911 document was engineered at a cost of $79,449; the
Bell 911 document had been "slightly" edited; articles in _Phrack_ were
described as "hacker tutorials;" the Bell 911 document published in Phrack
contained a proprietary notice; Blankenship was a computer programmer for
Steve Jackson Games, Inc.; Blankenship's alias "Mentor" was listed as an
Illuminati bulletin board user; Coutorie, prior to February 28, 1990,
provided Foley with information on Steve Jackson Games, Inc.; and that
Kluepfel had "logged" into Illuminati. The affidavit and warrant
preparation was simply sloppy and not carefully done. Therefore, the Court
denies the Plaintiff's contentions relating to the alleged improprieties
involved in the issuance of the search warrant.


On March 1, 1990, Agents Foley and Golden executed the search warrant. At
the time of the execution, each agent had available computer experts who
had been flown to Austin to advise and review the stored information in
the computers, the bulletin boards, and disks seized. These computer
experts certainly had the ability to review the stored information and,
importantly, to copy all information contained in the computers and disks
within hours.


During the search of Steve Jackson Games and the seizure of the three
computers, over 300 computer disks, and other materials, Agent Golden was
orally advised by a Steve Jackson Games, Inc. Employee that Steve Jackson
Games, Inc. was in the publishing business. Unfortunately, Agent Golden,
like Foley, was unaware of the Privacy Protection Act and apparently
attached no significance to this information. The evidence is undisputed
that Assistant U. S. Attorney Cook would have stopped the search at the
time of this notification had he been contacted.


By March 2, 1990, Agent Foley knew Steve Jackson Games, Inc. was in the
publishing business and the seizure included documents intended for
publication to the public, including a book and other forms of
information. He also knew or had the ability to learn the seizure of the
Illuminati bulletin board included private and public electronic
communications and E-mail. By March 2, 1990, Agent Foley knew that Steve
Jackson Games, Incorporated, and its attorneys in Dallas and Austin, were
requesting the immediate return of the properties and information seized,
that transcripts of publications and the back-up materials had been
seized, and that the seizure of the documents, including business records
of Steve Jackson Games, Inc., and their back-up was certain to
economically damage Steve Jackson Games, Inc. While Agent Foley had a
legitimate concern there might be some type of program designed to delete
the materials, documents, or stored information he was seeking, he admits
there was no valid reason why all information seized could not have been
duplicated and returned to Steve Jackson Games _within a period of hours
and no more than eight days_ from the seizure. In fact, it was months
(late June 1990) before the majority of the seized materials was returned.
Agent Foley simply was unaware of the law and erroneously believed he had
substantial criminal information which obviously was not present, as to
date, no arrests or criminal charges have ever been filed against anyone,
including Blankenship.


In addition, Agent Foley must have known his seizure of computers,
printers, disks and other materials and his refusal to provide copies
represented a risk of substantial harm to Steve Jackson Games, Inc. --
under circumstances where he had no reason to believe the corporation or
its owner was involved in criminal activity.


The Secret Service denies that its personnel or its delegates read the
private electronic communications stored in the seized materials and
specifically allege that this information was reviewed by use of key
search words only. Additionally, the Secret Service denies the deletion of
any information seized with two exceptions of sensitive" or "illegal"
information, the deletion of which was consented to by Steve Jackson.
However, the preponderance of the evidence, including common sense F5,
establishes that the Secret Service personnel or its delegates did read
all electronic communications seized and did delete certain information
and communications in addition to the two documents admitted deleted. The
deletions by the Secret Service, other than the two documents consented to
by Steve Jackson, were done without consent and cannot be justified.


By March 2, 1990, Agent Foley, Agent Golden, and the Secret Service, if
aware of the Privacy Protection Act, would have known that they had, by a
search warrant, seized work products of materials from a person or entity
reasonably believed to have a purpose to disseminate to the public a
"book" or "similar form of public communication."


The failure of the Secret Service after March 1, 1990, to -- promptly --
return the seized products of Steve Jackson Games, Incorporated cannot be
justified and unquestionably caused economic damage to the corporation.


By March 1, 1990, Steve Jackson Games, Incorporated was apparently
recovering from acute financial problems and suffering severe cash flow
problems. The seizure of the work product and delays of publication,
whether by three weeks or several months, directly impacted on Steve
Jackson Games, Incorporated. Eight employees were terminated because they
could not be paid as revenues from sales came in much later than expected.
However, it is also clear from a preponderance of the evidence that after
the calendar year 1990, the publicity surrounding this seizure and the
nature of the products sold by Steve Jackson Games, Incorporated had the
effect of increasing, not decreasing, sales. In fact, Steve Jackson Games,
Incorporated developed a specific game for sale based upon the March 1,
1990, seizure. The Court declines to find from a preponderance of the
evidence there was any economic damage to Steve Jackson Games,
Incorporated after the calendar year 1990 as a result of the seizure of
March 1, 1990. F6


As a result of the seizure of March 1, 1990, and the retention of the
equipment and documents seized, Steve Jackson Games, Incorporated
sustained out-of-pocket expenses of $8,781.00. The personnel at this
corporation had to regroup, rewrite, and duplicate substantial prior
efforts to publish the book _Gurps Cyberpunk_ and other documents stored
in the computers and the Illuminati bulletin board, explain to their
clientele and users of the bulletin board the difficulties of their
continuing business to maintain their clientele, to purchase or lease
substitute equipment and supplies, to re-establish the bulletin board, and
to get the business of Steve Jackson Games, Inc. back in order. The Court
has reviewed the evidence regarding annual sales and net income of Steve
Jackson Games, Incorporated for 1990 and the years before and after and
finds from a preponderance of the evidence there was a 6 percent loss of
sales in 1990 due to the seizure and related problems. The evidence was
undisputed that there was a 42 percent profit on sales of publications of
Steve Jackson Games, Incorporated. Thus, Steve Jackson Games, Incorporated
sustained damages in loss of sales in 1990 of $100,617.00 for a loss of
profit of $42,259.00 as a direct and proximate result of the seizure of
March 1, 1990, and the retention of the documents seized. After 1990, the
net sales of Steve Jackson Games, Incorporated continued to increase
annually in a traditional proportion as the sales had been increasing from
1988. Thus, from a preponderance of the evidence, the loss of $42,259.00
is consistent with the net income figures of Steve Jackson Games,
Incorporated in the years immediately following and preceding 1990.


Regarding damages to Steve Jackson, personally, his own testimony is that
by 1990 he was becoming more active in the management of Steve Jackson
Games, Incorporated, and spending less time in creative pursuits such as
writing. Steve Jackson Games, Incorporated was in such financial condition
that Chapter 11 proceedings in bankruptcy were contemplated. Thereafter,
the testimony clearly established that Steve Jackson Games reasserted
himself in management and was spending substantial time managing the
corporation. The Court declines to find from a preponderance of the
evidence that Steve Jackson personally sustained any compensatory damages
as a result of the conduct of the United States Secret Service.


Elizabeth McCoy, Walter Milliken and Steffan O'Sullivan also allege
compensatory damages. These Plaintiffs all had stored electronic
communications, or E-mail, on the Illuminati bulletin board at the time of
seizure. All three of these Plaintiffs testified that they had public and
private communications in storage at the time of the seizure. Steve
Jackson, Elizabeth McCoy, Walter Milliken and Steffan O'Sullivan all
testified that following June of 1990 some of their stored electronic
communications, or E-mail, had been deleted. It is clear, as hereinafter
set out, that the conduct of the United States Secret Service violated two
of the three statutes which the causes of action of the Plaintiffs are
based and, therefore, there are statutory damages involved, but the Court
declines to find from a preponderance of the evidence that any of the
individual Plaintiffs sustained any compensatory damages.


                                II. 

a.                     PRIVACY PROTECTION ACT


                (First Amendment Privacy Protection)


                     42 U.S.C. 2000aa et seq.


The United States Secret Service, by Agent Foley and Assistant United
States Attorney Cox, sought and obtained an order from a United States
Magistrate Judge to _search_ for and _seize_ and thereafter _read_ the
information stored and contained in "computer hardware (including, but not
limited to, central processing unit(s) monitors, memory devices, modem(s),
programming equipment, communication equipment, disks, and printers) and
computer software (including, but not limited to) memory disks, floppy
disks, storage media) and written material and documents relating to the
use of the computer system (including network access files), documentation
relating to the attacking of computers and advertising the results of
computer attacks (including telephone numbers and location information),
and financial documents and licensing documentation relative to the
compute programs and equipment at the business known as Steve Jackson
Games which constitute evidence, instrumentalities, and fruits of federal
crimes, including interstate transportation of stolen property (18 U.S.C.
2314) and interstate transportation of computer access information (18
U.S.C. 1030(a)(6)).' See, Warrant Application and Order.


On March 1, 1990, the Secret Service seized the following property on the
premises of Steve Jackson Games, Inc.: Compuadd keyboard; Packard-Bell
monitor; DKT computer; cardboard box containing disks, miscellaneous
papers and circuit boards; Splat Master gun with "Mentor" on barrel;
Hewlett-Packard laser jet printer; BTC keyboard with cover; IBM personal
computer 5150 (disassembled); Seagate Tech hard disk; 2400 modem 1649-1795
with power supply and disk; IBM keyboard; Amdek mode 310A; bulletin board
back-up files (approximately 150); Empac International Corporation XT
computer; "WWIV" users manual; red box of floppy disks; miscellaneous
papers and notes from desk; floppy disk entitled "Phoenix setup." _See_,
Warrant Return.


The evidence establishes the actual information seized, including both the
primary source and back-up materials of the draft of _Gurps Cyberpunk_, a
book intended for immediate publication (within days to weeks), drafts of
magazine and magazine articles to be published, business records of Steve
Jackson Games, Incorporated (including contracts and drafts of articles by
writers of Steve Jackson Games, Incorporated), the Illuminati bulletin
board and its contents (including public announcements, published
newsletter articles submitted to the public for review, public comment on
the articles submitted and electronic mail containing both private and
public communications). Notwithstanding over 300 floppy disks being
seized, the evidence introduced during trial was not clear as to what
additional information was seized during the search warrant execution.
However, the evidence is clear that on March 1, 1990, "work product
materials," as defined in 42 U.S.C. 2000aa-7(b), was obtained as well as
materials constituting "documentary materials" as defined in the same
provision. F7


The Privacy Protection Act, 42 U.S.C. 2000aa, dictates: "Notwithstanding
any other law, it shall be unlawful for a government officer or employee,
in connection with the investigation . . . of a criminal offense to search
for or seize any work product materials possessed by a person reasonably
believed to have a purpose to disseminate to the public a newspaper,
broadcast, or other similar form of public communication . . . ." _See_,
42 U.S.C. Sec. 2000aa(a).


Assuming Agent Foley was knowledgeable of the Privacy Protection Act
(which he was not), neither he nor Assistant United States Attorney Cox
had any information which would lead them to believe that Steve Jackson
Games, Incorporated published books and materials and had a purpose to
disseminate to the public its publications. Their testimony is simply they
thought it a producer of games. As heretofore stated, the Court feels
Agent Foley failed to make a reasonable investigation of Steve Jackson
Games, Incorporated when it was apparent his intention was to take
substantial properties belonging to the corporation, the removal of which
could have a substantial effect on the continuation of business. Agent
Foley, it appears, in his zeal to obtain evidence for the criminal
investigation, simply concluded Steve Jackson Games, Incorporated was
somehow involved in Blankenship's alleged activities because of the
wording of the Illuminati bulletin board menu. In any event, the Court
declines to find from a preponderance of the evidence that on March 1,
1990, Agent Foley or any other employee or agent of the United States had
reason to believe that property seized would be the work product materials
of a person believed to have a purpose to disseminate to the public a
newspaper, book, broadcast or other similar form of public communication.
F8


During the search on March 1, and on March 2, 1990, the Secret Service was
specifically advised of facts that put its employees on notice of probable
violations of the Privacy Protection Act. It is no excuse that Agents
Foley and Golden were not knowledgeable of the law. On March 2, 1990, and
thereafter, the conduct of the United States Secret Service was in
violation of 42 U.S.C. 2000aa _et seq_. It is clear the Secret Service
continued the seizure of property of Steve Jackson Games, Incorporated
including information and documents through late June of 1990. Immediate
arrangements could and should have been made on March 2, 1990, whereby
copies of all information seized could have been made. The government
could and should have requested Steve Jackson as chief operating officer
of the corporation to cooperate and provide the information available
under the law. The Secret Service's refusal to return information and
property requested by Mr. Jackson and his lawyers in Dallas and Austin
constituted a violation of the statute. Regarding any information seized
that would constitute "documentary materials" (whereby the defensive
theory of 42 U.S.C. 2000aa(b)(3) might apply) there would have been no
problem as the property was in the possession of the United States Secret
Service and their experts and Steve Jackson were present to ensure no
destruction, alteration or concealment of information contained therein.
In any event, it is the seizure of the "work product materials" that leads
to the liability of the United States Secret Service and the United States
in this case.  Pursuant to 42 U.S.C. 2000aa-6, the Court finds from a
preponderance of the evidence that Steve Jackson Games, Incorporated is
entitled to judgment against the United States Secret Service and the
United States of America for its expenses of $8,781.00 and its economic
damages of $42,259.00.  The Court declines to find from a preponderance of
the evidence other damages of Steve Jackson Games, Incorporated or
liability of the United States Secret Service or the United States of
America to any other Plaintiff under the provisions of the Privacy
Protection Act.










b.         WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION
             AND INTERCEPTION OF ORAL COMMUNICATIONS
                      18 U.S.C. 2510 et seq.


The Plaintiffs allege the United States Secret Service's conduct also
violated 18 U.S.C. 2510, et seq., as it constituted intentional
interceptions of "electronic communication." They allege the interception
occurred at the time of seizure or, perhaps, at the time of review of the
communication subsequent to the seizure. There is no question the
individual Plaintiffs had private communications stored in Illuminati at
the time of the seizure and the court has found from a preponderance of
the evidence the Secret Service intended not only to seize and read these
communications, but, in fact, did read the communications and thereafter
deleted or destroyed some communications either intentionally or
accidentally. The Defendants contend there is no violation of this
particular statute under the facts of this case because there never was
any unlawful "interception" within the meaning of the statute.
Alternatively, the Defendants contend that the "good faith reliance" on
the search warrant issued by the


 United States Magistrate Judge is a complete defense under Section 2520.


The Government relies on the 1976 Fifth Circuit case of the _United States
v. Turk_, 526 F.2d 654 (5th Cir. 1976), _cert denied_, 429 U.S. 823, 97
S.Ct. 74 (1976), and its interpretation of the statutory definition of
"interception." In _Turk_, police officers listened to the contents of a
cassette tape without first obtaining a warrant. The court concluded this
was not an "interception" under 18 U.S.C. Sec. 2510 et seq.


>>Whether the seizure and replaying of the cassette tape by the officers
was also an "interception" depends on the definition to be given "aural
acquisition.' Under one conceivable reading, and 'aural acquisition" could
be said to occur whenever someone physically hears the contents of a
communication, and thus the use of the tape player by the officers to hear
the previously recorded conversation might fall within the definition set
out above. No explicit limitation of coverage to contemporaneous
"acquisitions" appears in the Act.


>>We believe that a different interpretation -- one which would exclude
from the definition of "intercept" the replaying of a previously recorded
conversation -- has a much firmer basis in the language of Sec. 2510(4)
and in logic, and corresponds more closely to the policies reflected in
the legislative history. The words acquisition... through the use of any
... device" suggest that the central concern is with the activity engaged
in a the time of the oral communication which causes such communication to
be overheard by uninvited listeners. If a person secrets a recorder in a
room and thereby records a conversation between two others, an
"acquisition" occurs at the time the recording is made. This acquisition
itself might be said to be "aural" because the contents of the
conversation are preserved in 2 form which permits the later aural
disclosure of the contents. Alternatively, a court facing the issue might
conclude that an "aural acquisition" is accomplished only when two steps
are completed -- the initial acquisition by the device and the hearing of
the communication by the person or persons responsible for the recording.
Either of these definitions would require participation by the one charged
with an "interception" in the contemporaneous acquisition of the
communication through the use to the device. The argument that a new and
different aural acquisition" occurs each time a recording of an oral
communication is replayed is unpersuasive. That would mean that
innumerable "interceptions," and thus violations of the Act, could follow
from a single recording .


_Id._, at 657-658 (footnotes omitted). While the Fifth Circuit authority
relates to the predecessor statute, Congress intended no change in the
existing definition of 'intercept" in amending the statute in 1986. _See_,
S. Rep. No. 541, 99th Cong., 2nd Sess. 13 (1986), _reprinted in_ 1986
U.S.C.C.A.N. 3555, 3567 ("Section 101(a)(3) of the ELECTRONIC
COMMUNICATIONS PRIVACY ACT amends the definition of the term "intercept"
in current section 2510(4) of electronic communications. The definition of
"intercept" under current law is retained with respect to wire and oral
communications except that the term "or other" is inserted after "aural."
This amendment clarifies that it is illegal to intercept the non-voice
portion of a wire communication."). The Court finds this argument
persuasive when considering the Congressional enactment of the Stored Wire
and Electronic Communications and Transactional Records Access Act, 18
U.S.C. 2701, _et seq_.


The Court declines to find liability for any Plaintiff against the
Defendants pursuant to the Wire and Electronic Communications Interception
and Interception of Oral Communications Act, 18 U.S.C. 2510, et seq., and
specifically holds that the alleged "interceptions" under the facts of
this case are not 'interceptions contemplated by the Wire and Electronic
Communications Interception and Interception of Oral Communications Act.
It simply has no applicability to the facts of this case.


c.            STORED WIRE AND ELECTRONIC COMMUNICATIONS
                 AND TRANSACTIONAL RECORDS ACCESS
                     18 U.S.C. Sec. 2701 et seq.


Prior to February 28, 1990, Agent Foley, Assistant United States Attorney
Cox, and the computer consultants working with them were cognizant of
public computer bulletin boards and the use of electronic communications
and E-mail through them. Each of the persons involved in this
investigation, including Agent Foley, had the knowledge and opportunity to
log into the Illuminati bulletin board, review its menu and user lists,
obtain passwords, and thereafter review all information available to the
public. In fact, Agent Foley erroneously thought Kluepfel had done this
when a printout of Illuminati documents dated February 25, 1990, was
recieved. When Foley applied for the search warrant on February 28, 1990,
he knew the Illuminati bulletin board provided services to the public
whereby its users could store public and private electronic
communications. While Foley admits no knowledge of the Privacy Protection
Act and its provisions protecting publishers of information 'o the public,
he testified he was knowledgeable regarding the Wire and Electronic
Communications Interception and Interception of Oral Communications Act.
But, Foley never thought of the law's applicability under the facts of
this case. Steve Jackson Games, Inc., through its Illuminati bulletin
board services, was a "remote computing service" within the definition of
Section 2711, and, therefore, the only procedure available to the Secret
Service to obtain _"disclosure"_ of the contents of electronic
communications was to comply with this statute. _See_, 18 U.S.C. 2703.
Agent Foley and the Secret Service, however, wanted more than "disclosure'
of the contents of the communication. As the search warrant application
evidences, the Secret Service wanted _seizure_ of all information and the
authority to review and read all electronic communications, both public
and private. A court order for such disclosure is only to issue if "there
is a reason to believe the contents of a[n] . . . electronic communication
. . . are relevant to a legitimate law enforcement inquiry." _See_, 18
U.S.C. Sec. 2703(d). Agent Foley did not advise the United States
Magistrate Judge, by affidavit or otherwise, that the Illuminati bulletin
board contained private electronic communications between users or how the
disclosure of the content of these communications could relate to his
investigation. Foley's only knowledge was that Blankenship had published
part of the 911 document and decryption information in his Phoenix
bulletin board, was employed at Steve Jackson Games, Inc., and could have
the ability to store and delete these alleged unlawful documents in the
computers or Illuminati bulletin board at Steve Jackson Games,
Incorporated. At Agent Foley's specific request, the application and
affidavit for the search warrant were sealed. The evidence establishes the
Plaintiffs were not able to ascertain the reasons for the March 1, 1990
seizure until after the return of most of the property in June of 1990,
and then only by the efforts of the offices of both United States Senators
of the State of Texas. The procedures followed by the Secret Service in
this case virtually eliminated the safeguards contained in the statute.
For example, no Plaintiff was on notice that the search or seizure order
was made pursuant to this statute and that Steve Jackson Games,
Incorporated could move to quash or modify the order or eliminate or
reduce any undue burden on it by reason of the order. _See_, 18 U.S.C.
Sec. 2703(d). The provisions of the statute regarding the preparation of
back-up copies of the documents or information seized were never utilized
or available. _See_, 18 U.S.C. Sec. 2704. Agent Foley stated his concern
was to prevent the destruction of the documents' content and for the
Secret Service to take the time necessary to carefully review all of the
information seized. He feared Blankenship could possibly delete the
incriminating documents or could have programmed destruction in some
manner. Notwithstanding that any alteration or destruction by Blankenship,
Steve Jackson, or anyone else would constitute a criminal offense under
this statute, Foley and the Secret Service seized -- not just obtained
disclosure of the content -- all of the electronic communications stored
in the Illuminati bulletin board involving the Plaintiffs in this case.
This conduct exceeded the Government's authority under the statute.


The Government Defendants contend there is no liability for alleged
violation of the statute as Foley and the Secret Service had a "good
faith" reliance on the February 28, 1990, court order/search warrant. The
Court declines to find this defense by a preponderance of the evidence in
this case.


Steve Jackson Games, Incorporated, as the provider and each individual
Plaintiffs as either subscribers or customers were "aggrieved" by the
conduct of the Secret Service in the violation of this statute. While the
Court declines to find from a preponderance of the credible evidence the
compensatory damages sought by each Plaintiff, the Court will assess the
statutory damages of $1,000.00 for each Plaintiff.


                           III. SUMMARY


This is a complex case. It is still not clear how sensitive and/or
proprietary the 911 document. was (2nd is) or how genuinely harmful the
potential decryption scheme may have been or if either were discovered by
the Secret Service in the information seized on March 1, 1990. The fact
that no criminal charges have ever been filed and the investigation
remains "on going" is, of course, not conclusive.


The complexity of this case results from the Secret Service's insufficient
investigation and its lack of knowledge of the specific laws that could
apply to their conduct on February 28, 1990 and thereafter. It appears
obvious neither the government employees no- the Plaintiffs or their
lawyers contemplated the statute upon which this case is brought back in
February, March, April, May or June of 1990. But this does not provide
assistance to the defense of the case. The Secret Service and its
personnel are the entities that citizens, like each of the Plaintiffs,
rely upon and look to protect their rights and properties. The Secret
Service conduct resulted in the seizure of property, products, business
records, business documents, and electronic communications of a
corporation and four individual citizens that the statutes were intended
to protect.


It may well be, as the Government Defendants contend, these statutes
relied upon by the Plaintiffs should not apply to the facts of this case,
as these holdings may result in the government having great difficulties
in obtaining information or computer documents -representing illegal
activities. But this Court cannot amend or rewrite the statutes involved.
The Secret Service must go to the Congress for relief. Until that time,
this Court recommends better education, investigation and strict
compliance with the statutes as written.


The Plaintiffs are ordered to submit application for attorney's fees and
costs with appropriate supporting affidavits within ten (10) days of the
date of this order. The Defendants will have ten days thereafter to file
their responses.


SIGNED this the 12 day of March, 1993.


                    Sam Sparks United States District Judge



[Footnotes]


1 While the content of these publications are not similar to those of
daily newspapers, news magazines, or other publications usually thought of
by this Court as disseminating information to the public, these products
come within the literal language of the Privacy Protection Act.


2 A "hacker" is an individual who accesses another's computer system
without authority.


3 Kluepfel, Williams, Spain and Kibbler are employees of Bell South;
Coutorie is a University of Texas Systems investigator assigned to
investigate computer hacking; and Niedorf is a hacker involved in the
Illinois bulletin board system.


4 The Court does fault Agent Foley and the Secret Service on the failure
to make any investigation of Steve Jackson Games, Inc. prior to March 1,
1990, and to contact Steve Jackson in an attempt to enlist his cooperation
and obtain information from him as there was never any basis to suspect
Steve Jackson or Steve Jackson Games, Inc. of any criminal activity, and
there could be no questions the seizure of computers, disks, and bulletin
board and all information thereon, including all back-up materials would
have an adverse effect (including completely stopping all activities) on
the business of Steve Jackson Games, Inc. and the users of Illuminati
bulletin board.


5 The application and the search warrant itself was worded by Foley and
Cook so that all information would be "read" by the Secret Service.


6 The Court finds the testimony of Joanne Midwikis, an accountant who
testified on behalf of Steve Jackson Games, Inc. and Steve Jackson, on
damages suffered by Steve Jackson Games, Inc. and Steve Jackson was not
credible.


7 If the Secret Service, in the performance of executing Court order, had
only obtained and taken the 911 document or alleged decryption materials,
application of the definitions of "documentary materials" and "work
product materials" would logically result in no violation of the statute
under the circumstances of this case. It was the seizing all documents and
information and, thereafter, the failure to promptly return the
information seized which leads to violation of the statute.


8 The legislative history to the Privacy Protection Act states:


...the Committee recognized a problem for the law enforcement officer, who
seeking to comply with the statute, might be uncertain whether the
materials he sought were work product or nonwork product and that they
were intended for publication. Therefore, in the interests of allowing for
some objective measure for judgment by the office, the Committee has
provided that the work product must be possessed by someone "reasonably
believed" to have a purpose to communicate to the public.


S. Rep. No. 874, 96th Cong., 2nd Sess., 10 (1980), _reprinted in_ 1980
U.S.C.C.A.N. 3950, 3957.  As the Court has stated, Agent Foley with only a
few hours of investigation would have "reasonably believed"  Steve Jackson
Games,  Incorporated had "a purpose to communicate  to  the  public."
Therefore,  under  an  objective standard, assuming a reasonable
investigation, Agent Foley and the Secret Service violated the statute on
March 1, 1990.  However, Agent Foley was not aware of the Privacy
Protection Act and was therefore  not "seeking  to  comply"  with  its
requirements. Consequently, the Court found on March 1, 1990 neither Agent
Foley or any other employee or agent of the United States "reasonably
believed" the materials seized were work product or Steve Jackson Games,
Incorporated had a "purpose to disseminate to the public."