📄 sj-dec~1.txt
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- 7 -he had a list of all users prior to February 28, 1990. Agent Foleydid know and understand the Illuminati bulletin board would haveusers and probably would have stored private electroniccommunications between users. Notwithstanding the failure of anyinvestigation regarding Steve Jackson Games, Agent Foley andAssistant U. S. Attorney Cook intended to seize and review all ofthe information and documents in any computer accessible toBlankenship, regardless of what other incidental information wouldbe seized. These intentions were expressly stated in theirapplication for a search warrant and the warrant itself.' Foley'saffidavit, executed on February 28, 1990, was sufficient under thelaw for the issuance of a search warrant by the United StatesMagistrate Judge. The Court does not find from a preponderance ofthe evidence that the admitted errors in Foley's affidavit wereintentional and so material to make the affidavit and issuance ofthe warrant legally improper. See, Franks v. Delaware, 438 U.S.154, 98 S.Ct. 2674 (1978). The factual errors in the affidavitinclude the Bell 911 document was a computer program; the Bell 911document was engineered at a cost of $79,449; the Bell 911 documenthad been 'slightly" edited; articles in 4 The Court does fault Agent Foley and the Secret Service on the failure to make any investigation of Steve Jackson Games, Inc. prior to March 1, 1990, and to contact Steve Jackson in an attempt to enlist his cooperation and obtain information from him as there was never any basis to suspect Steve Jackson or Steve Jackson Games, Inc. of any criminal activity, and there could be no questions the seizure of computers, disks, and bulletin board and all information thereon, including all back-up materials would have an adverse effect (including completely stopping all activities) on the business of Steve Jackson Games, Inc. and the users of Illuminati bulletin board.Phrack were described as "hacker tutorials;" the Bell 911 documentpublished in Phrack contained a proprietary notice; Blankenship wasa computer programmer for Steve Jackson Games, Inc.; Blankenship'salias "Mentor" was listed as an Illuminati bulletin board user;Coutorie, prior to February 28, 1990, provided Foley withinformation on Steve Jackson Games, Inc.; and that Kluepfel had"logged" into Illuminati. The affidavit and warrant preparation wassimply sloppy and not carefully done. Therefore, the Court deniesthe Plaintiff's contentions relating to the alleged improprietiesinvolved in the issuance of the search warrant. On March 1, 1990, Agents Foley and Golden executed the searchwarrant. At the time of the execution, each agent had availablecomputer experts who had been flown to Austin to advise andreviewthe stored information in the computers, the bulletin boards, anddisks seized. These computer experts certainly had the ability toreview the stored information and, importantly, to copy allinformation contained in the computers and disks within hours. During the search of Steve Jackson Games and the seizure ofthe three computers, over 300 computer disks, and other materials,Agent Golden was orally advised by a Steve Jackson Games, Inc.Employee that Steve Jackson Games, Inc. was in the publishingbusiness. Unfortunately, Agent Golden, like Foley, was unaware ofthe Privacy Protection Act and apparently attached no significanceto this information. The evidence is undisputed that Assistant U.S. Attorney Cook would have stopped the search at the time of thisnotification had he been contacted. - 9 - By March 2, 1990, Agent Foley knew Steve Jackson Games, Inc.was in the publishing business and the seizure included documentsintended for publication to the public, including a book and otherforms of information. He also knew or had the ability to learn theseizure of the Illuminati bulletin board included private andpublic electronic communications and E-mail. By March 2, 1990,Agent Foley knew that Steve Jackson Games, Incorporated, and itsattorneys in Dallas and Austin, were requesting the immediatereturn of the properties and information seized, that transcriptsof publications and the back-up materials had been seized, and thatthe seizure of the documents, including business records of SteveJackson Games, Inc., and their back-up was certain to economicallydamage Steve Jackson Games, Inc. While Agent Foley had a legitimateconcern there might be some type of program designed to delete thematerials, documents, or stored information he was seeking, headmits there was no valid reason why all information seized couldnot have been duplicated and returned to Steve Jackson Games withina period of hours and no more than eight days from the seizure. Infact, it was months (late June 1990) before the majority of theseized materials was returned. Agent Foley simply was unaware ofthe law and erroneously believed he had substantial criminalinformation which obviously was not present, as to date, no arrestsor criminal charges have ever been filed against anyone, includingBlankenship. In addition, Agent Foley must have known his seizure ofcomputers, printers, disks and other materials and his refusal to - 10 -provide copies represented a risk of substantial harm to SteveJackson Games, Inc. -- under circumstances where he had no reasonto believe the corporation or its owner was involved in criminalactivity. The Secret Service denies that its personnel or its delegatesread the private electronic communications stored in the seizedmaterials and specifically allege that this information wasreviewed by use of key search words only. Additionally, the SecretService denies the deletion of any information seized with twoexceptions of "sensitive" or "illegal" information, the deletion ofwhich was consented to by Steve Jackson. However, thepreponderance of the evidence, including common sense 5,establishes that the Secret Service personnel or its delegates didread all electronic communications seized and did delete certaininformation and communications in addition to the two documentsadmitted deleted. The deletions by the Secret Service, other thanthe two documents consented to by Steve Jackson, were done withoutconsent and cannot be justified. By March 2, 1990, Agent Foley, Agent Golden, and the SecretService, if aware of the Privacy Protection Act, would have knownthat they had, by a search warrant, seized work products ofmaterials from a person or entity reasonably believed to have apurpose to disseminate to the public a"book" or "similar form ofpublic communication." 'The application and the search warrant itself was worded byFoley and Cook so that all information would be "read" by theSecret Service. - 11 - The failure of the Secret Service after March 1, 1990, to --promptly -- return the seized products of Steve Jackson Games,Incorporated cannot be justified and unquestionably caused economicdamage to the corporation. By March 1, 1990, Steve Jackson Games, Incorporated wasapparently recovering from acute financial problems and sufferingsevere cash flow problems. The seizure of the work product anddelays of publication, whether by three weeks or several months,directly impacted on Steve Jackson Games, Incorporated. Eightemployees were terminated because they could not be paid asrevenues from sales came in much later than expected. However, itis also clear from a preponderance of the evidence that after thecalendar year 1990, the publicity surrounding this seizure and thenature of the products sold by Steve Jackson Games, Incorporatedhad the effect of increasing, not decreasing, sales. In fact, SteveJackson Games, Incorporated developed a specific game for salebased upon the March 1, 1990, seizure. The Court declines to findfrom a preponderance of the evidence there was any economic damageto Steve Jackson Games, Incorporated after the calendar year 1990as a result of the seizure of March 1, 1990.' As a result of the seizure of March 1, 1990, and the retentionof the equipment and documents seized, Steve Jackson Games,Incorporated sustained out-of-pocket expenses of $8,781.00. The 6 The Court finds the testimony of Joanne Midwikis, anaccountant who testified on behalf of Steve Jackson Games, Inc. andSteve Jackson, on damages suffered by Steve Jackson Games, Inc. andSteve Jackson was not credible. - 12 -personnel at this corporation had to regroup, rewrite, andduplicate substantial prior efforts to publish the book GurpsCyberpunk and other documents stored in the computers and theIlluminati bulletin board, explain to their clientele and users ofthe bulletin board the difficulties of their continuing business tomaintain their clientele, to purchase or lease substitute equipmentand supplies, to re-establish the bulletin board, and to get thebusiness of Steve Jackson Games, Inc. back in order. The Court hasreviewed the evidence regarding annual sales and net income ofSteve Jackson Games, Incorporated for 1990 and the years before andafter and finds from a preponderance of the evidence there was a 6percent loss of sales in 1990 due to the seizure and relatedproblems. The evidence was undisputed that there was a 42 percentprofit on sales of publications of Steve Jackson Games,Incorporated. Thus, Steve Jackson Games, Incorporated sustaineddamages in loss of sales in 1990 of $100,617.00 for a loss ofprofit of $42,259.00 as a direct and proximate result of theseizure of March 1, 1990, and the retention of the documentsseized. After 1990, the net sales of Steve Jackson Games,Incorporated continued to increase annually in a traditionalproportion as the sales had been increasing from 1988. Thus, froma preponderance of the evidence, the loss of $42,259.00 isinconsistent with the net income figures of Steve Jackson Games,Incorporated in the years immediately following and preceding1990. Regarding damages to Steve Jackson, personally, his owntestimony is that by 1990 he was becoming more active in the - 13 -management of Steve Jackson Games, Incorporated, and spending lesstime in creative pursuits such as writing. Steve Jackson Games,Incorporated was in such financial condition that Chapter 11proceedings in bankruptcy were contemplated. Thereafter, thetestimony clearly established that Steve Jackson Games reassertedhimself in management and was spending substantial time managingthe corporation. The Court declines to find from a preponderance ofthe evidence that Steve Jackson personally sustained anycompensatory damages as a result of the conduct of the UnitedStates Secret Service. Elizabeth McCoy, Walter Milliken and Steffan O'Sullivan alsoallege compensatory damages. These Plaintiffs all had storedelectronic communications, or E-mail, on the Illuminati bulletinboard at the time of seizure. All three of these Plaintiffstestified that they had public and private communications instorage at the time of the seizure. Steve Jackson, Elizabeth McCoy,Walter Milliken and Steffan O'Sullivan all testified thatfollowing June of 1990 some of their stored electroniccommunications, or E-mail, had been deleted. It is clear, ashereinafter set out, that the conduct of the United States SecretService violated two of the three statutes which the causes ofaction of the Plaintiffs are based and, therefore, there are
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