US v. Councilman
The defendant in the case Bradford Councilman is a bookseller who offered email service to his customers. Councilman allegedly ordered two employees to configure the email processing software so that all incoming email sent from Amazon.com a competitor was secretly copied and sent to his personal email account before it arrived in the intended recipient's mailbox. On August 11 2005 the /en banc/ First Circuit Court of Appeals ruled that Councilman could be prosecuted under the Wiretap Act.
In an earlier decision by a three judge panel the First Circuit reached the opposite conclusion and dismissed the charges against Councilman holding that because the emails were in "electronic storage" when copied and rerouted by Counciman they could not be "intercepted" under the Wiretap Act. But by interpreting the Wiretap Act's privacy protections narrowly the court effectively gave Internet communications providers free rein to invade the privacy of their users for any reason and at any time. As the panel itself stated in the ruling "it may well be that the protections of the Wiretap Act have been eviscerated as technology advances."
After several groups including EFF filed briefs supporting the government's petition for a new hearing the First Circuit granted a rehearing of the case before all the judges in the circuit. The full court's new decision makes clear that even though emails are stored in computer memory during transmission it is still criminal for an email provider--or anyone else--to secretly intercept them.
The case was remanded back to the district court for trial and Councilman was acquitted in February 2007. However the First Circuit's decision on the meaning of the law still stands.