Why Amazon Was Right to Raise a First Amendment Objection to A Subpoena for Its Customer Records in a Tax Fraud Case

By ANITA RAMASASTRY
Wednesday, Jan. 09, 2008

Recently, Wisconsin-based U.S. Magistrate Judge Stephen Crocker made public his sealed decision concerning a federal government request to Amazon for customer book purchase records.

Thus, the public learned that, in early August 2007, Magistrate Judge Crocker had denied a government subpoena request that would have forced Amazon.com to identify customers who had purchased books from a man charged with tax evasion.

As I will discuss below, the judge's ruling was straightforward and correct. Customers (or those parties who hold their customer records) should be able to invoke a First Amendment right when the government wants to seek access to their reading histories without their prior notice or consent. The government should have to justify the necessity of obtaining such records through subpoena, showing its heightened need for such sensitive, private information.

If courts did not afford such protections, I believe customers would feel less safe with online purchases and commerce. Thus, the government's request to Amazon could have a chilling effect on the virtual marketplace for books and other media. We should encourage people to read freely, and not to worry about whether their book purchases might cause them trouble.

The D'Angelo Investigation, and What the Government Wanted from Amazon

This past summer, the federal tax investigation at issue in the case targeted Robert D 'Angelo, a former head of the Madison Wisconsin Civic Center and director of the Overture Center for the Arts, for possible charges of tax and mail fraud. D'Angelo had reportedly sold over 24,000 books through the Amazon website to third parties, operating from his office, without declaring his profits as income. (Amazon hosts smaller sellers that sell used books, listing their books as well as new books on the site.)

The government wanted to examine his book sales records and contact customers to find out more about D'Angelo's online business activity. It sought to obtain the records through Amazon, because, since Amazon hosted D'Angelo's book offers, his customers would also be Amazon patrons. Thus, it subpoenaed Amazon for the records of all of D'Angelo's customers, hoping some of these customers would testify against him.

Importantly, the customers were not implicated in any of D'Angelo's alleged crimes, and would have had no prior knowledge or notice that federal prosecutors would be wading through their book purchases. However, they might have learned about it later, and certainly if they were contacted to provide testimony. (Moreover, had the subpoena been enforced, all Amazon customers might have learned about it when the judge made the decision public.) They then might have become worried about their own book selections. For example, what if someone wanted to read about terrorism because she was interested in national security; or another person was interested in serial killers because he was a crime novel fan? They might fear the government's learning these facts, and even storing such data once it had trawled through the D'Angelo records. Due to concerns like these, the First Amendment's protection of the freedom of expression necessarily includes some protections for anonymity both in creating speech and in consuming it.

The government eventually narrowed its request and asked for the transaction records of 120 customers who had bought used books from D 'Angelo (about 30 customers per year for the four years D'Angelo transacted online through Amazon.com).

As noted above, Amazon fought the subpoena; invoking the First Amendment rights of its customers. It claimed that if it divulged so many customer records, when none of the customers themselves were accused of criminal activity, that would be an infringement on its customers' rights of freedom of expression. It also cited a "chilling effect" on speech - a special concern under Supreme Court First Amendment doctrine - noting that if customers learned their records were being accessed without their knowledge or permission, that might cause them to alter their online reading and spending activity.

In April, Amazon filed a motion to quash the subpoena, under court seal.

Magistrate Judge Crocker's Opinion: Why It Was Right to Allow Amazon to Invoke Customers' First Amendment Rights

Magistrate Judge Crocker correctly found that Amazon had a right to invoke its customers' First Amendment interests in objecting to the subpoena. After all, the customers, unaware of the subpoenas, were not in a position to raise these rights themselves. He noted that given today's political climate, especially, customers might well become worried and change their behavior if they knew that federal officials were perusing their reading lists.

Magistrate Judge Crocker also noted that the First Amendment was clearly implicated here: "The subpoena is troubling because it permits the government to peek into the reading habits of specific individuals without their prior knowledge or permission." He also declared that the subpoena's "chilling effect on expressive e-commerce would frost keyboards across America." Although he acknowledged that the prosecution wanted the sales records for a legitimate law enforcement goal, he also noted that"[i]t is an unsettling and un-American scenario to envision federal agents nosing through the reading lists of law-abiding citizens while hunting for evidence against somebody else."

Finally, Magistrate Judge Crocker also referred to current public apprehension about issues such as the reach of the USA Patriot Act, the FBI 's Internet search program (named Carnivore), and recent issues concerning the dismissal of U.S. Attorneys. These might be reasons why customers might "fear that federal prosecutors and law enforcement agents have a secondary political agenda that could come into play when an opportunity presented itself."

Magistrate Judge Crocker had no concerns about the government 's good faith in seeking the records, he wrote, but he also added that Amazon was rightly concerned about how complying with the subpoena might adversely impact its bookselling business. He noted, that when a party invoked the First Amendment, the government had a higher burden to show its legitimate need for the data it sought, and also why such information was crucial to its investigation.

Federal prosecutors did not see this as a First Amendment issue and argued that the U.S. Supreme Court has never recognized this type of First Amendment concern as grounds not to prohibit disclosure to a grand jury. The feds also noted that they needed to interview D'Angelo's customers in order to present evidence to the grand jury about D'Angelo's book sales. In other words, they could not prove he engaged in tax fraud without showing evidence of the sales that had transpired.

A Less Intrusive Way to get Customer Data

Magistrate Judge Crocker agreed with the point that the federal government had an important need to interview or contact D'Angelo's customers (who are also Amazon customers).

Yet he pointed out that there was a less intrusive way to get the information: Amazon could create a process to randomly contact a subset of D'Angelo's customers to provide them with information about the investigation, and to ask them whether they voluntarily would contact and cooperate with federal prosecutors. A letter from the US Attorney would accompany the Amazon letter, but the identity of those customers who chose not to participate, would never be disclosed to the federal government.

This is a better solution. Granted, some critics may argue that no customers would step forward and agree to cooperate with the investigation. But until we set up such mechanisms, we will never know whether that is a correct assertion.

Ultimately, prosecutors withdrew the subpoena,. They noted that they were able to get the needed customer information from computers they seized from D 'Angelo instead.

Thus, as Magistrate Judge Crocker noted, "If the government had been more diligent in looking for work-arounds instead of baring its teeth when Amazon balked, it 's probable that this entire First Amendment showdown could have been avoided."


Anita Ramasastry is a visiting professor at the National University of Ireland - Galway and an Associate Professor of Law at the University of Washington School of Law in Seattle and a Director of the Shidler Center for Law, Commerce & Technology. She has previously written on business law, cyberlaw, computer data security issues, and other legal issues for this site, which contains an archive of her columns.

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