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Shubert v. Metrophone Inc.

argued: February 5, 1990.

STEVEN SHUBERT, APPELLANT IN NO. 89-1671
v.
METROPHONE, INC. AND AWACS, INC., D/B/A METROPHONE AND ALL SUBSIDIARIES, AFFILIATES, DIVISIONS AND PARENT ENTITIES; GERARD A. MARGIOTTI, M.D., APPELLANT IN NO. 89-1801 V. BELL ATLANTIC CORP. D/B/A BELL ATLANTIC MOBILE SYSTEMS, AND ALL SUBSIDIARIES, AFFILIATES, DIVISIONS AND PARENT ENTITIES



On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Action No. 89-1966. On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Action No. 89-1967.

Greenberg, Scirica, and Seitz, Circuit Judges

Author: Greenberg

Opinion OF THE COURT

GREENBERG, Circuit Judge.

By this opinion we dispose of consolidated appeals from orders dismissing two actions brought in the United States District Court for the Eastern District of Pennsylvania on behalf of subscribers to cellular phone service systems.*fn1 The appellants, Steven Shubert and Gerard A. Margiotti, who are such subscribers, alleged that their service providers, the appellees, Metrophone Inc. and Bell Atlantic Corp., intentionally divulged the contents of their cellular mobile phone communications, as well as those of other subscribers, without consent, in violation of 18 U.S.C. 2511(3), a section of the Electronic Communications Privacy Act of 1986, Pub.L. No. 99-508, 100 Stat. 1848 (1986). Accordingly, the appellants sought civil damages for themselves and on behalf of the classes of subscribers they have sought to represent pursuant to 18 U.S.C. § 2520.*fn2 In addition, appellants asserted pendent state claims.

The district court by an order of July 13, 1989, dismissed Shubert's Privacy Act cause of action against Metrophone pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief could be granted and declined to exercise jurisdiction over the pendent state claims which were thus dismissed without prejudice.*fn3 By an order dated September 5, 1989 the district court similarly dismissed Margiotti's Privacy Act claim against Bell as well as his pendent state claims.*fn4 Shubert and Margiotti appeal from these orders. The district court had jurisdiction under 28 U.S.C. § 1331 and we have jurisdiction under 28 U.S.C. § 1291.

Appellants alleged that the contents of their cellular communications had been divulged by appellees in transmitting the communications by a method susceptible to interception by third parties in violation of 18 U.S.C. § 2511(3)(a) which recites:*fn5

Except as provided in paragraph (b) of this subsection, a person or entity providing an electronic communication service to the public shall not intentionally divulge the contents of any communication (other than one to such person or entity, or an agent thereof) while in transmission on that service to any person or entity other than an addressee or intended recipient of such communication or an agent of such addressee or intended recipient.*fn6

In dismissing Shubert's complaint, the court held that while the Privacy Act proscribes the intentional disclosure of communications, it does not prohibit the mere facilitation of cellular transmissions. Thus, it reasoned that a violation of the Privacy Act must be predicated upon a showing that a person had either intercepted communications "or knew or had reason to know that the information to be disclosed was obtained through an interception." The court pointed out that Shubert had not alleged that Metrophone had improperly acquired the contents of his communications. It further held that the Privacy Act does not impose a general duty upon a cellular service provider to encrypt or otherwise render its transmissions incapable of interception.

Following the dismissal of Shubert's complaint, Margiotti amended his complaint against Bell to allege that the disclosures which allegedly resulted from the transmission of his cellular calls in a form capable of interception, were neither necessary nor incidental to cellular transmissions. He further alleged that the disclosures of his communications were not authorized pursuant to exceptions to the Privacy Act in 18 U.S.C. § 2511(2)(a) or § (3)(b). The court, however, on Bell's motion to dismiss indicated that the decision in Shubert's case had not turned on the necessary or incidental nature of the alleged divulgence and reiterated that the act of transmitting communications in a manner capable of interception does not, in and of itself, divulge the contents of such communications in violation of section 2511(3). The court reasoned that any eavesdropping third party would have to act intentionally and independently of the communication provider in order to listen in on the communications, and it is that eavesdropping which is illegal.

Inasmuch as the district court dismissed these actions because it concluded that appellants did not allege judicially cognizable claims under the Privacy Act, our review is plenary. Government Employees Ins. Co. v. Benton, 859 F.2d 1147, 1149 (3d Cir. 1988). Of course, as these cases were dismissed under Fed.R.Civ.P. 12(b)(6), we must construe all factual allegations in the complaints most favorably to the appellants and affirm the dismissals only if it appears certain that no relief could be granted to them under any set of facts which could be proven. D.P. Enterprises, Inc. v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir. 1984).

Appellants raise a number of arguments on appeal, but all ultimately depend upon the proposition that the transmission of cellular communications without scrambling or encrypting and by a method permitting their interception is an intentional divulgence of the contents of the communications. Further, they contend that scrambling or encrypting techniques are available which at least would make it more difficult to intercept cellular transmissions and we accept that allegation in deciding these appeals.

The Privacy Act amended Title III of the Omnibus Crime Control and Safe Streets Act of 1968, which has come to be known as the Wiretap Act. See 18 U.S.C. § 2510 et seq. Section 2511 of the Wiretap Act was extensively modified by the Privacy Act which, as germane to this appeal, added section 2511(3)(a) above quoted, relating to intentional disclosures by communication service providers, and amended 18 U.S.C. § 2511(1), to read in relevant part:

(1) Except as otherwise specifically provided in this chapter any person who --

(a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral or electronic communication;

(b) intentionally uses, endeavors to use, or procures any other person to use or endeavor to use any electronic, mechanical, or other device to ...


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