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CASE COMMENT
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UNITED STATES v. RIGGS:
JACKING INTO THE NET WITH THE ILLINOIS DISTRICT COURT
-by Jay Wood
- ********************************************************************
The following article is a candidate for publication in the Rutgers
Computer and Technology Law Journal, therefore it is (c) copyright
1992 by the author. You may re-post this file freely (as long as
you don't make any changes), but you may not publish the text or a
substantial portion thereof in any form (i.e., print it up and sell
it, include it in your newsletter, etc.). If you mention this article,
you must mention that it is a candidate for publication in the Rutgers
Computer and Technology Law Journal (for the 1992-93 academic year);
if you wish to quote from or reproduce a substantial part of the
article, please contact me.
Comments on the text are extremely welcome.
-Jay Wood InterNet: jwood@andromeda.rutgers.edu
CompuServe: 70540,1252
AOL: JayW9
- *********************************************************************
(FOOTNOTES ARE AT END OF TEXT)
I. INTRODUCTION
The rapid pace of technological innovation has given many
creative individuals the ability to work mischief without
violating any statutes. The range of possible "offenses" often
exceeds the imagination of the legislature. Prosecutors and courts
who are faced with these individuals must make a difficult choice:
they must either let these "criminals" go free, or attempt to
stretch existing laws to cover the (purportedly) culpable conduct.
Efforts to avoid this dilemma have frequently focused on
criminalizing activities at the periphery of the undesirable
conduct. Some legislatures have approached the problem (in the
area of narcotics) with so-called "designer drug" laws.\1\ A United
States District Court presented its solution to the problem in the
area of "computer crime" in the case of United States v. Riggs.\2\
The facts of the case are deceptively simple. Robert Riggs was
a computer enthusiast (a "hacker") who was able to gain access to
a computer that was owned and operated by the Bell South telephone
company. He accomplished this feat from his home, using a personal
computer and a modem to connect with the Bell South computer over
ordinary telephone lines.\3\ His access, although unauthorized, went
undetected by the phone company, and he was able to find and copy
a text file detailing the operations and maintenance of Bell
South's Emergency 911 response system to a disk in his home.\4\
While pursuing his interest in computer and communication
technology, Riggs had become acquainted with Craig Neidorf, an
amateur journalist whose magazine "Phrack"\5\ was distributed by
modem to computer and telecommunications hobbyists through an
informal network of computer bulletin boards.\6\ Riggs and Neidorf
agreed that the Emergency 911 information would be of interest to
Phrack's readers, and made plans to include it in an upcoming
issue.\7\ So that the document could be readied for publication,
Riggs uploaded (transferred) a copy of the text file from his home
in Georgia to a bulletin board system in Illinois, enabling
Neidorf to retrieve it in his home in Missouri.\8\ Neidorf edited the
report to remove features that would identify it's source, and
sent the edited document (via telephone) to the Illinois BBS for
Riggs' approval.\9\
At some point during this transaction, the operator of the
Illinois bulletin board became concerned that potentially
sensitive information was being exchanged through his equipment.
Fearing that this might subject him to some sort of liability, he
notified the appropriate authorities.\10\ As a reward for his
diligence, his computer was confiscated by the Secret Service and
his bulletin board was shut down.\11\ Neidorf and Riggs were located,
and the instant prosecution began.
The pair was charged with wire fraud,\12\ Interstate
Transportation of Stolen Property,\13\ and one violation of the
Computer Fraud and Abuse Act.\14\ Robert Riggs plead guilty to the
charge of wire fraud, on the basis of his activities in gaining
the unauthorized access to Bell South's computer.\15\ Craig Neidorf
challenged the validity of the charges against him, and moved that
they be dismissed.\16\ His challenge cited several grounds for
dismissal, relying principally on the contention that he could not
be charged under the National Stolen Property Act when nothing
tangible had ever been removed from Bell South's possession, and
nothing tangible had moved in interstate commerce.\17\ Based on its
reading (by analogy) of the relevant precedents,\18\ the court found
that the indictment was valid and denied Neidorf's motions for
dismissal.\19\ Although the charges were dropped only a few days into
the trial (when it became apparent that the document in question
was neither very secret nor very valuable),\20\ the Riggs court's
holdings (that the National Stolen Property Act and wire fraud
statutes can apply to the computerized acquisition and
dissemination of text information) remain good law and are likely
to be persuasive to other judges as they attempt to map out the
contours of criminal sanctions for computer activity.
II. BACKGROUND
For their efforts in making the Bell South documents available
to the world, Robert Riggs and Craig Neidorf were charged with
violating the Computer Fraud and Abuse Act of 1986,\21\ the National
Stolen Property Act,\22\ and the wire fraud statute.\23\ No previous
case had ever applied these statutes to a purely electronic
transaction of the sort engaged in here. The closest analogies the
court was able to find in the area of electronic communications
were those dealing with the wire transfer of illegally acquired
funds.\24\ Another sstrain of cases on which the court relied for
guidance related to the theft of trade secret information.\25\ The
trade secret cases are similar in that the value of the item
stolen is frequently negligible (often nothing more than a sheet
of paper), although the value of the information may be quite
significant.
In addition to these parallels, the court drew support from its
understanding of the legislative intent behind the statutes under
which Riggs and Neidorf were charged, and the appropriate
construction that implies.\26\ A proper understanding of the history
and purpose of these acts is therefore required in order to
effectively evaluate the court's decision.
A. The Computer Fraud and Abuse Act of 1986
The Computer Fraud and Abuse Act of 1986\27\ is an amended version
of a 1984 statute entitled the Counterfeit Access Device and
Computer Fraud and Abuse Act of 1984.\28\ The 1984 Act was intended
to protect consumer credit records and computers in which the
government had an interest, and proscribed the unauthorized access
or use of a computer operated by or on behalf of the government of
the United States.\29\ The amendment was occasioned by the great
volume of criticism which the 1984 Act received, both for its
narrowness and for what was perceived as poor drafting.\30\ Harsh
criticism was leveled at the 1984 Act for its failure to define a
number of key terms, such as "access," "authorization," and
"use."\31\ It was also strongly suggested by the Justice Department
and the National District Attorney's Association that a fraud
offense (modelled after the federal mail and wire fraud statutes)
be included in any amendment to the Act.\32\ This was attributable to
a belief that existing statutes were insufficiently adaptable to
many computer-related crimes,\33\ as well as to concerns, similar to
those which motivated the passage of the National Stolen Property
Act, that jurisdictional problems would prove insurmountable for
states that are attempting to address these problems through local
legislation.\34\
The 1986 Act attempted to address these concerns by defining
some of its more ambiguous terms and expanding the scope of the
prohibited activities.\35\ Congress refused, however, to include the
fraud offense urged by the District Attorneys\36\ or to fully
federalize computer-related crime.\37\ The most important change in
the 1986 Act, as it relates to Riggs, is the addition of a
provision prohibiting the trafficking in computer passwords.\38\ This
section of the statute, intended to address the perceived problem
of computer hackers trading passwords over "pirate bulletin
boards,"\39\ directly implicated the questions that arose in applying
the National Stolen Property Act to Riggs. In other words, does
the electronic transmission of information to individuals in other
states constitute interstate commerce? Apparently, by passing this
Act, Congress intended to answer that question in the affirmative.
B. The National Stolen Property Act
The National Stolen Property Act (or NSPA) finds its origin in
the National Motor Vehicle Theft Act,\40\ a 1919 law designed to fill
the jurisdictional gap that is created when a criminal takes a
stolen car to another state for its ultimate disposal.\41\ Because an
automobile is a valuable thing that is uniquely suited for removal
to another jurisdiction,\42\ it was felt that special federal
legislation (based on the commerce clause power) was needed to aid
the states in what are otherwise essentially local efforts at law
enforcement.\43\
Demonstrating their continued concern that "criminals have
made full use of the improved methods of transportation and
communication, and have taken advantage of the limited
jurisdiction possessed by State authorities in pursuing fugitive
criminals,"\44\ Congress extended the NMVTA in 1934 to include
property other than vehicles. The National Stolen Property Act\45\
prohibited the transportation in interstate commerce of "any
goods, wares, merchandise, securities or money, of the value of
$5,000 or more, knowing the same to have been stolen, converted or
taken by fraud."\46\
The statute has been successfully applied in several cases to
criminalize the wire transfer of stolen funds.\47\ The statute has
also been applied in cases where the bulk of the value of the
stolen property comes from its status as a trade secret (e.g.,
stolen geophysical maps, the intrinsic value of which (the paper
and ink) is negligible).\48\ No court, however, had ever held that
section 2314 was applicable when nothing tangible had been taken
from the possession of the "crime victim." Indeed, the Court of
Appeals for the Second Circuit noted that "where no tangible
objects were ever taken or transported, a court would be hard
pressed to conclude that 'goods' had been stolen and transported
within the meaning of 2314"\49\ and suggested that "the statute
would presumably not extend to the case where a carefully guarded
secret formula was memorized, carried away in the recesses of a
thievish mind and placed in writing only after a boundary had been
crossed."\50\ Such a case had never reached the bar, and the Riggs
court appears to have been unconvinced by the Second Circuit's
reasoning.
C. Wire Fraud
As the NMVTA begat the NSPA, the laws prohibiting frauds
through the mail grew to produce the wire fraud statutes.\51\ The
original impetus for the mail fraud legislation appears to have
been the fear that the increased accessibility of remote and
innocent country dwellers (resulting from the efficient national
mail routes) would dramatically multiply the opportunities for
unscrupulous inhabitants of large cities to prey upon them.\52\ As
the technology of communication advanced, however, the mail was no
longer the most efficient means of contacting remote citizens. The
number of activities that the legislature wished to proscribe
increased, and the wire fraud statute\53\ was born.
Somewhere in the process, the rationale for the prohibitions
seemed to change. Although the mail fraud statutes were originally
justified as a way to prevent "thieves, forgers, and rapscallions
generally"\54\ from exploiting the "innocent people of the country,"\55\
the prohibitions against using the interstate wire system for
fraudulent purposes are generally accepted for reasons similar to
those underlying the NSPA. Criminals, it is argued, have made such
excellent use of the advances in technology that "new law
enforcement tools" are required to combat their increasingly
sophisticated crime. As a result, the statute requires a very
minimal use of the wire system to become applicable.\56\ The primary
importance of the use of interstate wires is that it provides a
mechanism (through the commerce clause) for the Federal government
to gain jurisdiction over the offense. Wire communication has
never been held to be an integral part of the offense itself.\57\
Of course, the government may not simply rest after showing
that a defendant used the interstate wire system. If their
application of the statute is to be successful, the prosecution
must demonstrate that the use of the wires was in furtherance of a
scheme to defraud.\58\ However, that requirement has never been very
demanding. Fraud, defined broadly, includes "anything calculated
to deceive,"\59\ and the term has been construed quite liberally in
the context of mail and wire fraud statutes.\60\
III. ANALYSIS
The Riggs court approached the issues in this case
sequentially, addressing the application of each statute in turn
as they were listed in the indictment. In the interest of clarity
and consistency, the discussion below will be arranged in the same
manner.
A. Wire Fraud
In Neidorf's motion for the dismissal of the charges against
him, he argued that the wire fraud claim was defective because it
failed to allege the existence an actual scheme to defraud.\61\ The
allegations that Neidorf received and later transferred a computer
text file did not show proof of a scheme to defraud, he argued,
and in the absence of a fiduciary relationship between himself and
Bell South, Neidorf could not be held to have violated any of the
telephone company's intangible rights.\62\ Furthermore, Neidorf
claimed, his role in the situation was more akin to that of an
"innocent tippee" in a securities case than to that of a
coconspirator.\63\ This argument, if accepted, would mean that the
only relevant question should have been whether or not he had a
duty to disclose the proprietary information which he had (through
no wrongdoing of his own) come into possession of.\64\
Not surprisingly, considering the broad sweep of section 1343,
the court gave little credence to either of these arguments.
Neidorf's role in formulating a plan to publish the E911 document,
and his efforts at editing it to disguise its source, were
themselves acts taken in furtherance of a scheme to defraud,
according to the court.\65\ This scheme, as described by the court,
was the plan "to steal the E911 text file from Bell South and to
distribute it to others via the PHRACK newsletter."\66\ The fraud
was nothing more than a "wronging [of] one in his property
rights."\67\ The wrong in this case, apparently, was the
dissemination of proprietary information without it's owners
consent.
In rejecting Neidorf's arguments, the court held that the fraud
statute did not require a fiduciary relationship between Neidorf
and Bell South, in part because the wrong that was alleged was not
a violation of an intangible right.\68\ The opinion noted that a wire
fraud charge based solely upon the deprivation of an intangible
right would not stand, even if a fiduciary relationship could be
demonstrated.\69\ However, the court found, "valuable, confidential
information is 'property,' the deprivation of which can form the
basis of a wire fraud charge under 1343."\70\ Since all of the
rights in and value of a piece of proprietary information arise
from its confidentiality, and Riggs' and Neidorf's activities had
indisputably deprived Bell South of that confidentiality, their
actions presumably constituted deprivation.\71\
In a final blow, the Court rejected Neidorf's contention that
his role was like that of an innocent tippee. They did this on the
grounds that Neidorf had been completely aware of Riggs'
activities from their inception, and had agreed to help conceal
the theft. This concealment, if effective, would have made the
fraud complete.\72\ In order to qualify himself as an innocent
tippee, Neidorf would have had to acquire the information legally.
Since his activities constitute participation in the "theft," he
was held not to have done so.\73\
B. The National Stolen Property Act
The prosecution's application of the National Stolen Property
Act to Neidorf's activities led the court further into uncharted
waters. Neidorf contended, among other things, that the
government's interpretation of section 2314 was faulty because
electronic impulses, which were all that he had actually caused to
cross state lines, did not fit within the definition of "goods,
wares, or merchandise" as set forth in the statute.\74\ Relying on an
analogy to the wire transfer of illegally obtained money, the
court rejected this argument.\75\ Several cases, notably United
States v. Gilboe,\76\ have held that section 2314 applies to the
electronic transfer of stolen money, since the "[e]lectronic
signals in this context are the means by which funds are
transported. The beginning of the transaction is money in one
account and the ending is money in another."\77\ Similarly, "the
information in the E911 text file was accessible at Neidorf's
computer terminal in Missouri before he transferred it, and the
information was also accessible at the Lockport, Illinois computer
bulletin board after Neidorf transferred it."\78\ The manner in which
the transmission occurred does not affect the result.
The more important question, according to the court, is whether
or not the information is a "good, ware, or merchandise" for
purposes of the statute.\79\ Citing several cases holding that
information fixed in a tangible medium can constitute a "good" for
section 2314 purposes,\80\ the court reasoned that if the information
had been contained on a floppy disk, or was printed out by
Neidorf, and the disk or printout had been transported to another
state, the NSPA would apply because the disk or paper would
clearly be "good."\81\ There was no reason to hold differently, they
concluded, merely because in this case the information stayed
inside the computer.\82\
The Riggs court continued by specifically declining to hold
that tangibility was a requirement of the "goods, wares, or
merchandise" language in the National Stolen Property Act.\83\ As an
alternative, they found that a text file would be sufficiently
tangible to meet such a requirement if it were imposed, since this
kind of information is easily accessible to anyone who "simply
presse[s] the right buttons on their computer."\84\
An additional barrier to applying the NSPA against Craig
Neidorf is the Act's requirement that the transferred goods have
in fact been stolen. Relying on Dowling v. United States,\85\ Neidorf
argued that the thing he had transferred, like an illegal
recording, was nothing more than an image of the thing to which
the ownership attached, and not that thing itself. The necessary
conclusion is that Neidorf had merely infringed upon the owners
rights to control the reproduction of the information, which is
not the same thing as theft or conversion.\86\
The court rejected the metaphysical subtleties of this
argument, distinguishing the instant case from Dowling on the
grounds that "[t]he owner of confidential, proprietary business
information, in contrast [to the holder of a copyright], possesses
something which has clearly been recognized as an item of
property."\87\ Although Congress has specifically legislated on the
subject of copyrights, and thereby precluded the application of
section 2314 to copyright infringement, there has been no similar
ruling regarding proprietary information. Therefore, they
conclude, section 2314 may properly be applied.\88\
C. The Computer Fraud and Abuse Act
"In his final gasp,"\89\ Neidorf attempted to argue that the
Computer Fraud and Abuse Act, like the Copyright Act in Dowling,
precludes the application of other statutes against actions that
fall under its jurisdiction.\90\ The rationale for this is that the
Congress, by passing the CFAA, has indicated its intent to fully
address computer-related crime. Based on its inability to find
support for this contention in the legislative record, and
Neidorf's failure to provide any, the court dismissed this
argument as well.\91\
IV. EVALUATION
The court's analysis of the issues raised by Riggs, although in
many respects quite astute, contains several questionable
assertions. Chiefly these are attributable to the court's failure
to adequately understand the dimensions of the computerized world
in which Riggs and Neidorf were acting, and the ways in which the
computerization mattered. Other problems resulted from their
failure to consider how relatively minor variations in the facts
might have caused them to come to a radically different
conclusion. It is not surprising in a case like Riggs, which was
one of first impression, and involved a number of dramatic and
emotionally charged issues, that there are areas in which the
arguments (especially those from analogy) are weaker than one
might like. The discussion below will attempt to address these
concerns, again in the order in which they were addressed by the
court.
A. Wire Fraud
It is difficult to find fault with the court's reasoning with
respect to the wire fraud charge. Given the broad scope of
offenses to which the statute has been held to apply,\92\ the court
had precedent on its side when it held that Neidorf's efforts in
furtherance of the publication of the E911 document were
sufficient to constitute the elements of the fraud part of the
offense.\93\ Neidorf's most favorable argument on this issue focused
on the fact that Bell South not only suffered no monetary loss,
but was at no point deprived of the use or possession of any of
its property.\94\ The contents of Bell South's computer storage
system were exactly the same after Riggs' unauthorized entry and
"theft" as they had been before he got in.\95\ This is why the phone
company did not detect the "theft" on their own: their use of the
information was in no way impaired by the fact that it had been
copied by Riggs.
Unfortunately for Neidorf, no less an authority than the
Supreme Court has held that this line of argument must fail. In
Carpenter v. United States,\96\ a reporter for the Wall Street
Journal's influential "Heard on the Street" column entered into a
scheme with several stockbrokers in which he would provide them
with information that was scheduled for publication in the column
prior to the date it appeared in print.\97\ This sharing of pre-
publication information was a violation of the newspaper's
official policy and practice.\98\ When they received these "insider
tips," the brokers would buy and sell stocks in such a way that
they were able to (and did) profit from the effects that the
column had on the stock market.\99\ These profits were shared with
the reporter.\100\
R. Foster Winans (the reporter) was convicted of wire fraud,
and appealed the conviction on the grounds that neither he nor his
cohorts had obtained money or property from the journal.\101\ Winans
further argued that his activities had not interfered with the
Journal's use of its property (the information).\102\ The Supreme
Court ruled against him, holding that the conviction withstood
these objections since the fraud part of the statute required only
a "wronging [of] one in his property right[s]."\103\ The violation of
the confidentiality of The Journal's information met this
standard.\104\
Although this decision would seem to lend support to the
court's conclusion in the Riggs case, the situations are
distinguishable in at least one important respect. While the
"theft" of information at issue in Carpenter resulted in no
financial loss to the Wall Street Journal, it did result in gain
to the takers.\105\ This contrasts dramatically with Riggs, in which
there was not only no identifiable loss, there was no identifiable
gain, to any party.\106\ There is, consequently, some difficulty with
using the precedents the court cites to support the contention
that Neidorf's and Riggs' actions constituted fraud.\107\ Since this
difficulty lies with ambiguities in the definition of "fraud," it
is not possible to say with any degree of certainty that the court
was either right or wrong: the ambiguity remains unresolved.
However, it would seem to be prudent in such a situation for
court's to err on the side of caution, restricting their
interpretation of ambiguous terminology to its clear and
undisputed meaning and allowing the legislature the opportunity to
expand these definitions by statute if they so desire.
B. National Stolen Property Act
The greatest tension in the court's reasoning arose from the
application of the NSPA to the electronic transfer of the E911
text file between Neidorf and Riggs. Although there is significant
authority for the contention that the transfer of stolen or
fraudulently obtained funds by wire does not avoid the strictures
of section 2314 on the grounds that only "electronic impulses" had
been transferred,\108\ it is not entirely clear that the analogy
between the transfer of funds and the transfer of a document will
withstand scrutiny. In the first place, money, whether transferred
electronically or physically, can be in only one place at a time.
That this was not the case in Riggs was precisely the point: the
E911 document, after having been "transferred" from Georgia to
Indiana, still existed in Georgia in precisely the same manner it
did before the "transfer" took place.\109\ Because the transfer in
Riggs was different from the transfer of stolen funds, the analogy
to other cases that have addressed the "electronic impulses" issue
tends to be misleading. Unlike stolen funds, the E911 document was
accessible from virtually any place in the world. This was true
even when copies existed only on Bell South's computer. Riggs'
ability to acquire a copy without leaving his home\110\ proves this
point.
Because the document, in every case, remained intact in the
place it was "transferred" from, there was nothing actually moved
across state lines. The arguments accepted in the money cases
(that although nothing was physical moved, the result was the
same) do not apply to Riggs. When the court speaks of a transfer
in this situation, what it is actually discussing is the creation
of a copy in a distant place (somewhat like a fax). The difficulty
which the court has in discussing this has to do with the ability
of computer files to be infinitely and perfectly reproduced. This
fundamental difference between computer files and the sorts of
property to which the NSPA has previously been held to apply has
caused a significant strain in the court's reasoning.\111\
A further difficulty with the analogy to money transfers is the
fact that Riggs concerned the theft of a document rather than
funds. The electronic impulses involved in the money transfers
were relatively unimportant because they were nothing more than a
means for getting the money from one place to another they
represented something (the money) which was both tangible and
valuable. In Riggs, electronic impulses (whether stored on a
magnetic disk or transmitted over the telephone wires) are the
"thing" that is alleged to have been stolen.\112\ The impulses were,
therefore, much more than a mode of transportation: they were the
very essence of the thing that was transported. The issue,
contrary to what the court says, is precisely "whether electronic
impulses are 'goods, wares, or merchandise' within the meaning of
2314."\113\
The court's lack of clarity on this point was especially
evident in its discussion of the tangibility requirement.\114\ In an
effort to make a connection between Riggs and prior cases
involving the theft of trade secrets,\115\ the court argued that "if
the information in Bell South's E911 text file had been affixed to
a floppy disk, or printed out on a computer printer, then
Neidorf's transfer of that information across state lines would
clearly constitute the transfer of 'goods, wares, or merchandise'
within the meaning of 2314."\116\ For support of this assertion the
court quotes (among other similar cases) United States v.
Bottone,\117\ which held that the intermediate use of a photocopy
machine between the theft and the interstate transportation would
not be sufficient to escape the statute.\118\ The court assumes away
the important question, however, when they posit the affixation of
the E911 file to a floppy disk or paper printout. If the computer
file, without having been affixed to a disk or paper, was
sufficiently tangible for it to be the sort of property to which
the NSPA would be applicable,\119\ there is no reason why it should
not have been considered sufficiently tangible for purposes of the
statute when it was transported interstate in that form.\120\ The
question that remains unaddressed, of course, is whether or not
the file is tangible. The fact that there are tangible mediums to
which the file could have been affixed is not relevant to this
inquiry.
Perhaps in recognition of this confusion between medium and
message, the court reached a tentative holding that tangibility
was not required by the NSPA.\121\ An imperceptible, but valuable, gas
was used as an example to bolster the argument.\122\ Unfortunately,
the example served primarily to illustrate the court's
misapprehension of the word "tangible." Tangible is defined as
"corporeal[;] capable of being exactly comprehended[;] real,
concrete."\123\ This is not synonymous with perceptible, which means
"discernible by the senses or mind."\124\ The gas in the court's
example may very well be imperceptible to human senses; it does
not follow that it is intangible. The perceptibility of the gas is
absolutely irrelevant for purposes of determining its tangibility:
a gas, discernible or not, is real and concrete, and section 2314
would prohibit the theft and interstate transportation of a
tangible item whether it required tangibility or not. There is,
additionally, strong support for the proposition that tangibility
is required: the plain meaning of the term "goods, wares, or
merchandise" demands it.\125\
C. Computer Fraud and Abuse Act
The court's brisk dismissal of Neidorf's contention that the
Computer Fraud and Abuse Act precluded his prosecution under other
statutes\126\ is somewhat puzzling. There is no particular reason to
believe that absence of an explicit mention in the record that the
legislature intended to preclude prosecutions under other statutes
should lead to the opposite conclusion. A more forceful argument
against the court's conclusion is the lack of applicability of
other statutes to Neidorf's actions. Neidorf was likely correct in
his claim that the CFAA was the only act under which he could
legitimately have been prosecuted: it is the only statute with
which he had been charged that explicitly mentions computer
related crime.\127\ Since the nature of Neidorf's activities were
inextricably bound up with computer technology, the application of
statutes which do not comprehend the possibilities of computer
technology would risk stretching their language beyond the point
of credibility. "When interpreting a criminal statute that does
not explicitly reach the conduct in question, we are reluctant to
base an expansive reading on inferences drawn from subjective and
variable 'understandings.'"\128\
V. CONCLUSION
It is often the case that new technology requires new
paradigms. Computer technology is no exception. It is not possible
to understand the events alleged in Riggs (or their implications)
if we remain mired in (relatively) old-fashioned metaphors like
paper print outs or computer disks. The document transfers that
took place in the Riggs case were entirely virtual:\129\ all of the
events took place in a kind of electronic netherworld that bears
no direct relation to physical space.\130\ The court made much of the
fact that the documents were initially available in one state, but
later became available in another.\131\ In virtual terms, however,
this is a distinction without a difference. Neidorf and Riggs
might as easily have been next door neighbors or inhabitants of
different planets; they would be unlikely to have known the
difference.\132\ In the world of electronic communications, geographic
location is all but irrelevant.
It is difficult not to wonder if the court would have come out
differently had Neidorf not saved the file on his own disk, but
merely accessed it and edited it while it remained stored at the
Lockport BBS or on Riggs' computer. Based upon the court's
justification for its result, the answer would have to be yes.
While information on the BBS was (theoretically) available to
anyone, anywhere, who "simply pressed the right buttons on their
computer,"\133\ it would not have been physically present in a
tangible form (like a disk or a paper printout) in any place other
than the computer in Illinois. Although the Riggs court's
reasoning would lead us to conclude that no violation of the NSPA
had taken place in this hypothetical, it is difficult to
understand why such a distinction should make a difference.
When presented with a case like Riggs, in which the real world
has changed much faster than the law, courts face a difficult
dilemma. They must choose between construing the literal language
of the statute in a strict and principled manner, and flexibly
applying the existing laws to address what they see as culpable
behavior. The latter approach carries with it the all but
inevitable risk of deforming the very legal order it seeks to
uphold. Stretching statutory language to fit fact patterns for
which it was never designed simply cannot be considered a
preferred way of dealing with the law. Although Neidorf's actions
may have been the sort that we, as a society, wish to prohibit,
they were (with the possible exception of the Computer Fraud and
Abuse Act) not illegal at the time he performed them. If the
judgement of the legislature is that these sorts of acts should be
illegal, they have the power to ensure that they are. To attempt
to address these problems through the creative application of
existing but unrelated statutes, without the benefit of
legislative guidance is very much like judicially creating ex post
facto laws.
A concerted effort to educate both the courts and the legislatures
about the functions of computerized telecommunications and the
metaphors appropriate to discussing them would clearly be in
order. Legislators and judges are, after all, human; and their
fears of the unknown may be just as strong as those of the average
citizen. Although they can, to some extent, be held accountable
for their failure to educate themselves, it is ultimately the job
of those who will be most affected by hasty and ignorant
legislation and precedents to share their experience with the
government. Properly carried out, such an effort could ensure that
decisions like Riggs are, in the future, the exception rather than
the rule.
_____________________________________________________
***FOOTNOTES***
_____________________________________________________
\1\ "Designer drugs" are chemical compounds which have the same or similar
narcotic effects as illegal drugs, but different chemical structures. Because
the possession or sale of these chemicals is not prohibited by the laws
against, e.g., heroin or cocaine, and because of the practical difficulty of
regularly adding to the schedule of controlled dangerous substances, laws have
been enacted which automatically include "designer" equivalents to illegal
drugs in the existing anti-narcotics statutes.
\2\ 739 F.Supp. 414 (N.D.Ill. 1990). Although Congress has addressed the
area of computer crime with the Computer Fraud and Abuse Act (18 U.S.C.
1030), that statute is limited to computers in which consumer credit
information is stored or in which the Federal government has an interest. U.S.
v. Riggs represents a prosecutorial and judicial attempt to combat activities
that are essentially computer-related with statutes and precedents that do not
(either explicitly or implicitly) comprehend the possibilities of computerized
communications.
\3\ Riggs, 739 F.Supp. at 417.
\4\ Id.
\5\ The name comes from combining the words "phreak" and "hack," which are
the terms used for the acts of exploring, respectively, the telephone network
and computer systems.
\6\ A computer bulletin board, or BBS, is a software program which runs on a
computer that is connected to one or more telephone lines. The program allows
computer users with access to modems to phone up the BBS and, among other
things, access electronic mail, upload and download computer files, and leave
messages for later callers. See, e.g., Jensen, An Electronic Soap Box:
Computer Bulletin Boards and the First Amendment, 39 Fed.Com.L.J. 217 (1987).
\7\ Riggs, 739 F.Supp. at 417
\8\ Id.
\9\ Id.
\10\ John Perry Barlow, Crime and Puzzlement: In Advance of the Law on the
Electronic Frontier; Cyberspace, WHOLE EARTH REV., September 22, 1990, at 44.
\11\ Id.
\12\ 18 U.S.C. 1343.
\13\ 18 U.S.C. 2314.
\14\ 18 U.S.C. 1030(a)(6)(A).
\15\ Michael Alexander, Hacker Trial Begins in Chicago, COMPUTERWORLD, July
30, 1990, at 8; Motions to Dismiss Wire Fraud and Transport of Stolen Property
Claims For Hacker Publishing Activity Denied, But Charges Dropped, THE COMPUTER
LAWYER, September 1990, at 37 [hereinafter Motions to Dismiss].
\16\ United States v. Riggs, 739 F.Supp. 414 (N.D.Ill. 1990), and 743
F.Supp. 556 (N.D.Ill. 1990).
\17\ Riggs, 739 F.Supp. at 420.
\18\ The cases cited by the court consist of holdings that the interstate wire
transfer of stolen funds falls within the ambit of the National Stolen
Property Act (United States v. Kroh, 896 F.2d 1524 (8th Cir. 1990); United
States v. Goldberg, 830 F.2d 459 (3rd Cir. 1987); United States v. Wright, 791
F.2d 133 (10th Cir. 1986); and United States v. Gilboe, 684 F.2d 235 (2nd Cir.
1982)) and cases holding that the stolen property may, under some
circumstances, be intellectual property (United States v. Bottone, 365 F.2d
389, 393 (2nd Cir. 1966); United States v. Greenwald, 479 F.2d 320 (6th Cir.
1973); United States v. Lester, 282 F.2d 750 (3rd Cir. 1960); and United
States v. Seagraves, 265 F.2d 876 (1959)).
\19\ 739 F.Supp. at 426; 743 F.Supp. at 562.
\20\ Michael Alexander, Dial 1800...for Bellsouth 'Secrets,' COMPUTERWORLD,
August 6, 1990, at 8; Craig Bromberg, In Defense of Hackers, N.Y. TIMES MAG.,
April 21, 1991, at 44; Motions to Dismiss, supra note 15; Score One for the
Hackers of America, NEWSWEEK, August 6, 1990, at 48.
\21\ 18 U.S.C. 1030(a)(6)(A).
\22\ 18 U.S.C. 2314.
\23\ 18 U.S.C. 1343.
\24\ See note 18, supra.
\25\ See note 18, supra.
\26\ 739 F.Supp at 421, 423.
\27\ 18 U.S.C. 1030.
\28\ Pub. L. No. 98173, ch. 21, 98 Stat. 2190 (1984) (codified as amended at
18
U.S.C. 1030 (1988)).
\29\ Dodd. S. Griffith, Note, The Computer Fraud and Abuse Act of 1986: A
Measured Response to a Growing Problem, 43 VAND. L. REV. 453, 460 (1990);
David A. Bender, PREVENTION AND PROSECUTION OF COMPUTER AND HIGH TECHNOLOGY
CRIME
(MB) 3.05[b].
\30\ Griffith, supra note 29, at 466473.
\31\ Id. at 470.
\32\ Id. at 469.
\33\ Griffith, supra note 29, at 469 n.128; 473.
\34\ Id. at 472.
\35\ Id. at 474.
\36\ Id. at 478.
\37\ Griffith, supra note 29, at 484.
\38\ 18 U.S.C. 1030(a)(6)(A).
"(a) Whoever
* * *
(6) knowingly and with intent to defraud traffics (as defined in
section 1029) in any password or similar information through which a computer
may be accessed without authorization, if
(A) such trafficking affects interstate or foreign commerce
* * *
shall be punished as provided in subsection (c) of this section."
\39\ Griffith, supra note 29, at 481.
\40\ 18 U.S.C. 2312.
\41\ United States v. Smith, 686 F.2d 234, 24446 (1982).
\42\ "The automobile was uniquely suited to felonious taking whether by
larceny,
embezzlement, or false pretenses. It was a valuable, salable article which
itself supplied the means for speedy escape." Dowling v. United States, 105
S.Ct. 3127, 3134 n.12 (1985) (quoting United States v. Turley, 877 S.Ct at
400401).
\43\ Id. at 313435.
\44\ Id. at 3134 n.13 (quoting from the Attorney General in 78 Cong. Rec. 2947
(1934)).
\45\ 18 U.S.C. 2314.
"Whoever transports in interstate or foreign commerce any goods,
wares, merchandise, securities or money, of the value of $5,000 or more,
knowing the same to have been stolen, converted, or taken by fraud
* * *
"Shall be fined not more than $10,000 or imprisoned not more than
ten years, or both."
\46\ Id.
\47\ See United States v. Kroh, 896 F.2d 1524 (8th Cir. 1990); United States
v.
Goldberg, 830 F.2d 459 (3rd Cir. 1987); United States v. Wright, 791 F.2d 133
(10th Cir. 1986); United States v. Gilboe, 684 F.2d 235 (2nd Cir. 1982).
\48\ United States v. Lester, 282 F.2d 750 (3rd Cir. 1960); United States v.
Seagraves, 265 F.2d 876 (1959). See also United States v. Greenwald, 479 F.2d
320 (6th Cir. 1973).
\49\ United States v. Bottone, 365 F.2d 389, 393 (2nd Cir. 1966).
\50\ Id.
\51\ The language in 1343 (the wire fraud statute) concerning the elements of
the offense is the same as that in 1341 (the mail fraud statute). The courts
have, accordingly, construed them to have the same effect.
\52\ McNally v. United States, 107 S.Ct. 2875, 287980 (1987) ("The sponsor of
the recodification stated, in apparent reference to the antifraud provision,
that measures were needed 'to prevent the frauds which are mostly gotten up in
the large cities . . . by thieves, forgers, and rapscallions generally, for
the purpose of deceiving and fleecing the innocent people of the country.'").
\53\ 18 U.S.C. 1343.
"Whoever, having devised or intending to devise any scheme or
artifice to defraud, or for obtaining money or property by means of false or
fraudulent pretenses, representations, or promises, transmits or causes to be
transmitted by means of wire, radio, or television communication in interstate
or foreign commerce, any writings, signs, signals, pictures, or sounds for the
purpose of executing such scheme or artifice, shall be fined not more than
$1,000 or imprisoned not more than five years, or both."
\54\ McNally, 107 S.Ct. at 2879.
\55\ Id.
\56\ See, e.g., United States v. Condolon, 600 F.2d 7 (C.A.Va. 1979)
("Gravaman
of offense of wire fraud is simply the misuse of interstate communication
facilities"); United States v. Cowart, 595 F.2d 1023 (C.A.Ga. 1979) ("To prove
wire fraud, government must show scheme, use of interstate communications,
such as telephone, and criminal intent to defraud); United States v. Corey,
566 F.2d 429 (C.A.N.Y. 1977) ("To prove a violation of this section, it need
only be shown that a defendant was one of the participants in a fraudulent
scheme which was furthered by the use of interstate transmission facilities").
\57\ See supra note 56.
\58\ 18 U.S.C. 1343.
\59\ BLACK'S LAW DICT. (6th. ed. 1990).
\60\ United States v. Keane, 522 F.2d 534 (7th Cir. 1975) ("A specific
violation
of state law . . . is not necessary to obtain a conviction for mail fraud").
\61\ United States v. Riggs, 739 F.Supp. 414, 418 (N.D. Ill. 1990).
\62\ Id. at 41819.
\63\ Id. at 419.
\64\ Id.
\65\ Riggs, 739 F.Supp. at 418.
\66\ Id.
\67\ Id. (quoting Hammerschmidt v. United States, 265 U.S. 182 (1924)).
\68\ Id. at 419.
\69\ Riggs, 739 F.Supp. at n.7 (citing McNally v. United States, 483 U.S. 350
(1987), for the proposition that "a mail fraud charge must be based on the
deprivation of property[, although] the property which forms the basis for a
wire fraud or mail fraud charge can be 'intangible' property").
\70\ Id. The court cites Carpenter v. United States, 108 S.Ct. 316, 320 (1987)
(holding that the publication schedule and contents of the Wall Street
Journal's "Heard on the Street" column is confidential business information
and therefore protected property under 1341) and United States v. Keane, 852
F.2d 199, 205 (7th Cir. 1988) (finding protectable property in a city's
confidential plans for acquiring real estate) as support.
\71\ The court does not explicitly draw this conclusion in their opinions,
perhaps because the reasoning is somewhat problematic. In the first place, it
is difficult to understand precisely how the usual rationale for protection of
proprietary business information (the preservation of competitive advantage)
applies in the case of a publicly regulated monopoly such as the telephone
company. Although it has been suggested that the integrity of the 911 response
system may be compromised by the widespread publication of this kind of
information, that argument would seem to urge the application of some sort of
quasi-national security interest standard of secrecy rather than the
prohibitions of the trade secret law.
It should also be noted that proprietary information does not easily fit
into the category of things of which one can be deprived. It is easy to imagine
that a limited (as in this case) or even broad publication of confidential
information would not rob it of all utility in the hands of its original
possessor. Still, the court's decision seems to suggest that any degree of
deprivation would be sufficient to trigger the application of section 1343.
Although this would be consistent with much of the other wire fraud
jurisprudence (e.g., the principle that any use of the wire system is
sufficient for the statute to apply), there is no indication that the court
even considered this potentially problematic area. As it is easily conceivable
that public knowledge of even the existence of some information could lessen
its utility, the court's interpretation of the wire fraud statute would seem
bound to collide with the First Amendment (if the collision has not, as
Neidorf argued, already occurred).
\72\ Riggs, 739 F.Supp. at 419.
\73\ Id.
\74\ Id. at 420.
\75\ Id.
\76\ 684 F.2d 235 (2d Cir. 1982).
\77\ Id. at 238.
\78\ Riggs, 739 F.Supp. at 420.
\79\ Id.
\80\ United States v. Greenwald, 479 F.2d 320 (6th Cir. 1973) (documents
containing chemical formulas); United States v. Bottone, 365 F.2d 389 (2nd
Cir. 1966) (copies of documents describing the manufacture of a patented
drug); United States v. Lester, 282 F.2d 750 (3rd Cir. 1960) (copies of
geophysical maps); and United States v. Seagraves, 265 F.2d 876 (1959) (same
as Lester).
\81\ Riggs, 739 F.Supp. at 421.
\82\ Id.
\83\ Id.
\84\ Id. at 422.
\85\ 105 S. Ct. 3127 (1985). In a prosecution for the sale of bootleg Elvis
Presley recordings, the court held that the goods actually shipped (the
illegally manufactured records) do not come within the range of section 2314
because no physical part of the shipment had been "stolen, converted, or taken
by fraud." The court further held that a copyright is not the sort of interest
that is capable of being "stolen, converted, or taken by fraud."
\86\ Riggs, 739 F.Supp. at 422.
\87\ Id. at 423.
\88\ Id.
\89\ Id.
\90\ Riggs, 739 F.Supp. at 423.
\91\ Id. See also Griffith, supra note 29, at 484485
\92\ See supra note 56 and related text; see also supra note 60.
\93\ Riggs, 739 F.Supp. at 418.
\94\ Although the statement of facts does not explicitly state this, it is
implicit both from the nature of computer telecommunications (erasing the file
from the Bell South computer would have required actions in addition to merely
downloading it) and from Riggs' ability to successfully conceal his access to
the file. See also infra note 109.
\95\ See supra note 94.
\96\ 108 S.Ct. 316 (1987).
\97\ Id. at 318-319.
\98\ Id. at 319.
\99\ Id.
\100\ Carpenter, 108 S.Ct. at 319.
\101\ Id. at 320-321.
\102\ Id.
\103\ Id. at 321.
\104\ "Petitioners' arguments that they did not interfere with the Journal's
use
of the information . . . miss the point. * * * Petitioners cannot successfully
contend . . . that a scheme to defraud requires a monetary loss, such as
giving the information to a competitor; it is sufficient that the Journal has
been deprived of its exclusive use of the information, for exclusivity is an
important aspect of confidential business information and most private
property for that matter."
Id. See also note 69, supra.
\105\ Id. at 319.
\106\ Phrack was an amateur publication. It was (and is) distributed at no
charge
to readers. Copies are available for downloading from numerous public and
private bulletin board systems or from InterNet sites such as
ftp.cs.widener.edu (in directory /pub/cud/phrack).
\107\ This difficulty may not be insurmountable. If fraud signifies nothing
more
than "wronging one in his property rights by dishonest methods or schemes,"
then the statute would seem to apply to the facts in Riggs. Hammerschmidt v.
United States, 44 S.Ct. 511, 512 (1924). However, "the words 'to defraud' . .
. usually signify the deprivation of something of value." Id.; see also
BLACK'S LAW DICT. (6th. ed. 1990). This language indicates that the statute
should not apply to a case like Riggs where neither loss nor gain (nor, in
fact, deprivation) is involved. This ambiguity seems to have gone largely
unexplored; it is certainly unresolved, and the Riggs court ignores it
entirely.
\108\ See, e.g., United States v. Gilboe, 684 F.2d 235 (2d Cir. 1982); United
States v. Kroh, 896 F.2d 1524 (8th Cir. 1990); United States v. Goldberg, 830
F.2d 459 (3d Cir. 1987); United States v. Wright, 791 F.2d 133 (10th Cir.
1986); United States v. Kenngott, 840 F.2d 375 (7th Cir. 1987).
\109\ The term "download" does not imply the deletion of any files.
Furthermore,
the factual allegations in the case charge only that Riggs transferred the
text file from the Bell South computer system, not that he tampered with the
contents of that system. This is further borne out by the failure of Bell
South to detect Riggs' unauthorized access. See Riggs, 739 F.Supp. at 417; see
also note 94, supra.
\110\ Riggs, 739 F.Supp. at 417.
\111\ See, e.g., Dowling v. United States, 105 S.Ct. 3127, 3133 (1985) (The
NSPA
"seems clearly to contemplate a physical identity between the items unlawfully
obtained and those eventually transported").
\112\ It will not do to claim that the information is the thing which has been
stolen; the NSPA applies only to "goods, wares, merchandise, securities or
money" (18 U.S.C. 2314), and this requires tangibility. United States v.
Smith, 686 G.2d 234, 240 (1982) ("The phrase goods, wares, or merchandise
connotes tangible items; something tangible has or possesses physical form.").
Accepting, arguendo, the Riggs court's holding that an electronically
transferred document is a tangible object, this goes no further than to state
that "when proprietary business information is affixed to some tangible
medium, such as a piece of paper, it constitutes 'goods, wares, or
merchandise' within the meaning of 2314." United States v. Riggs, 739
F.Supp. 414, 420 (1990). The tangible medium in this case can be nothing other
than the computer file.
\113\ Riggs, 739 F.Supp. at 420 ("The question this case presents, then, is
not
whether electronic impulses are 'goods, wares, or merchandise' within the
meaning of 2314, but whether the proprietary information contained in Bell
South's E911 text file constitutes a 'good, ware, or merchandise' within the
purview of the statute.").
\114\ Id. at 421.
\115\ United States v. Greenwald, 479 F.2d 330 (6th Cir. 1973); United States
v.
Bottone, 365 F.2d 389 (2nd Cir. 1966); United State v. Lester, 282 F.2d 750
(3rd Cir. 1960); United States v. Seagraves, 265 F.2d 876 (1959).
\116\ Riggs, 739 F.Supp. at 421.
\117\ 365 F.2d 389 (2nd Cir. 1966).
\118\ Id. at 393.
\119\ That is, that it was a good, ware, or merchandise. "Sometimes the
meaning
of 'goods' is extended to include all tangible items, as in the phrase 'goods
and services.'" BLACK'S LAW DICT. (6th. ed. 1990). A good cannot, presumably,
be an intangible item. See also United States v. Smith, 686 F.2d 234, 240
(1982).
\120\ In other words, the bare text file (unaffixed to any medium) was what
was
stolen, as well as what was transported. The Bottone court was able to come to
the decision it did because something tangible was taken from Lederle, and
something tangible was transported across the border. Bottone v. United
States, 365 F.2d 389, 393-394 (2nd Cir. 1966). The only issue was that "the
intangible information that was the purpose of the theft was transformed and
embodied in a different physical object." Id. at 393. The court went to great
pains to emphasize that its conclusions would not apply "where no tangible
objects were ever taken and transported." Id. This is, however, precisely the
situation in Riggs.
\121\ "[T]his court is not entirely convinced that tangibility is an absolute
requirement of 'goods, wares, or merchandise' under 2314." United States v.
Riggs, 739 F.Supp. 414, 421 (N.D.Ill. 1990).
\122\ Id. at 421.
\123\ THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (William
Morris, ed.,
New College Ed. 1978).
\124\ Id.
\125\ See supra note 119.
\126\ Riggs, 739 F.Supp. at 423.
\127\ It remains an open question whether his actions constitute the
trafficking
in stolen passwords, as prohibited by the CFAA. 18 U.S.C. 1030(a)(6)(A).
\128\ Williams v. United States, 102 S.Ct. 3088, 3092 (1982) (quoted in
Dowling
v. United States, 105 S.Ct. 3127, 3133-3134 (1985)).
\129\ "Existing or resulting in essence or effect though not in actual fact,
form, or name." THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE
(William
Morris, ed., New College Ed. 1978). This term is often used to describe the
"space" in which computer events take place (viz., virtual reality).
\130\ This "place" is often referred to as "cyberspace," a term originally
coined
by the writer William Gibson but quickly adopted in the computer world,
especially among the hacker subculture. See, e.g., WILLIAM GIBSON, NEUROMANCER
(1984).
\131\ Riggs, 739 F.Supp. at 420.
\132\ In a recent experiment, for example, private computer users were able to
send electronic mail to orbiting space shuttle astronauts through publicly
accessible networks. See, e.g., Joe Abernathy and Mark Carreau, Electronic
Mail Beams Shuttle's Message Home, HOUSTON CHRON., Aug. 5, 1991, at 1A.
\133\ Riggs, 739 F.Supp. at 422.