Could Your Firm's E-Mail Policy Run Afoul of the Federal Wiretap Act?

Once seen only in the shadows of the war against organized crime, the Federal Wiretap Act should now be moving steadily and rapidly toward the top of the corporate compliance checklist. Robust civil remedies, recent court decisions and technological developments have transformed the act's risk profile from a non-event to a statute worthy of significant attention.

Although principally a criminal statute, the Federal Wiretap Act is unique among privacy laws in that it provides for substantial monetary damages without proof of actual harm.

Under the act, an aggrieved party can recover a minimum award of $10,000 or $100 per day of violation -- whichever is greater, or, actual damages, plus punitive damages, attorneys' fees and costs. Comparing recent class action litigation involving security breaches with potential class actions involving the Federal Wiretap Act demonstrates the significantly pro-plaintiff aspect of this remedial scheme.

To date, the vast majority of security breach class actions have been dismissed, or resolved in the defendant's favor on summary judgment, because the plaintiff failed to plead or prove that the security breach at issue proximately caused any cognizable damage to class members.

By contrast, under the Federal Wiretap Act, proof that the violation proximately caused cognizable harm is unnecessary, and each individual plaintiff can recover a minimum of $10,000 even in the absence of actual damages.

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Source: Law Technology News
By: Phillip Gordon