right our second case for this morning is naperville smart meter awareness against the city of naperville and mr goh branson we are ready for you please the court this case is about the erosion of privacy in the home under the guise of technological process progress where the right of citizens to be secure in the private details intimate details of their home is a road a violated by a government run government owned entity on a fifteen minute increment whose idea was it to get this information from the home in terms of deploying the smart meters yeah the smart meter deployment is part of an overall government project and utility project to modernize the electrical grid related to climate change well it's not necessarily related to climate change  it isn't it's the utility data that's gathered from the smart meters right well it's about increasing the efficiency of the electrical grid in terms of deployment of electricity purchasing electricity fifteen minute increments allow the seller in this a case the city of naperville although this would be equally true for comet or somebody to know precisely what times of day demand is greater perhaps have pricing structures that smooth out the need for electricity and thus allow for better more efficient use of the generating plants or transfers from other parts of the grid correct big gathering of data on a fifteen minute increment or an increment that's greater than the traditional one someone reading that you would have with an analog meter does allow for some increased efficiencies however there is both a quantitative and  qualitative difference in the information that's being gathered by the meter itself and not all of that information that's being gathered is critical for the purposes of billing so let me ask you this  somehow or another there needs to be monitoring of electric use over whatever the billing period is let's call it a month and to come up with even a monthly bill the electric companies got to keep track of each kilowatt hour of electricity that the user has and so somewhere in the depths of the computer maybe not for an analog of any kind of digital  device you would have that information might my sense of your argument is that you're concerned more about the potential of misuse of this every fifteen minute data than you are about anything that's actually happened i mean they say they're using it for these efficient use of the grid billing you know being able to you know encourage you to run your dryer at eleven o'clock at night instead of five o'clock in the afternoon because of demand  searches so so why are we here now don't don't you need some evidence to show or some allegation to show that the kinds of privacy abuses you're concerned about have actually happened gathering but i thought we agreed that the gathering at least at the aggregate level is fine you know you need it for billing nobody's are here arguing they need free electricity in naperville  gathering is going to happen well the different the the issue here and this was a fundamental misunderstanding of the trial court is what is it meant what is meant by aggregate data for the purposes of billing the trial court made the assumption that when the city talks about aggregate data that's gathered by smart meters that it was the same type of aggregate good data that was gathered by analog meters just on an increased frequency while it's true that th meters do gather the same kilowatt hour usage that is gathered by a traditional analog meter just on an increased frequency the fifteen minute interval they also gather a number of other metrics related to the use of electricity in the house they monitor give me yeah they monitor something called reactive power and so it's that reactive power is the the difference between what an appliance uses  its actual operating versus what it's drawing and my understanding from the data that's collected is that that data the reactive power data which includes voltage information amperage information and this was conceded by the city and the hearing that took place before the trial court is that that information that is gathered can be used to identify unique signatures of appliances that are found in the home and so it's  aggregate data there the additional data that's gathered by the smart meter that can be used to determine whether or not someone is in fact washing their dishes in the home or running the dryer or running the washer or using electric water he just washers or whatever it is they own ovens they'll actually pay you to get rid of it and put in a better more efficient device and there's a school of thought in the electric generating business that conservation is really just as good as building a new generating plant and what we really need to do is meet need and if you can do it with fewer kilowatt hours so much better so i guess what that leads me to wonder is why again naperville doesn't actually have a business interest in collecting this data well they have no business be snoopy and figure out who's making a lot of apple pies but you know well they have a business interest in the efficiency of their grid but that c see if the of the appliances that their customers are using while the efficiency of the grid and the overall efficiency of the plants is being used can be determined from that overall kilowatt hour aggregate that would have been collected with an analog meter the additional data from the smart meter is not necessary to make that specific determination what if they used it you would find this offensive but i'd be interested to know what if they use this kind of reactive data to conduct targeted mailing to people with old clunky appliances and say you know we are going to give you whatever make the number three hundred dollars you know to get rid of your old inefficient appliance they don't want to bother everybody in the city with this but they they do a targeted mailing would you find that objectionable yes because they're relying on data that indicates what's going on in the home what type  so you're saying the fact that it's a business reason doesn't really sway you a business reason doesn't protect you from violation of the fourth amendment to question about the analogs supposed seems unlikely but suppose a company that had not made the switch to digital yet decided that it was going to cost a lot of money to replace everybody's meter from the old analog to the digital so instead they hire an army of underemployed people in their early twenty's to go around and read the analog meters once every fifteen minutes they just circle around the neighborhood all day long a jot down where it is legal yes because they're you're only collecting that rod usage data the kilowatt hour data that's the same as the analog analog meter one of the things that the pointed out was that in that instance the meter reader would be able to observe going on in the homes from the curtilage i don't think so i mean i don't think you can tell from the curtilage in my house whether of turned the oven on or not correct you could observe a certain  extra maladies if there had an air conditioner for example you could see the compressor was running but you certainly couldn't reveal any details about what's going on within the home such as the use of an oven the use of an electric water heater that's on or so the trunk or relied on the third party doctrine to determine that there is no reasonable expectation of privacy within the data that's being gathered however the third party doctrine as applied to this case is a map the third party doctrine protects data well protects the third party and says that any data that is turned over to a third party loses that expectation of privacy because it's been revealed to a third party that there is no third party problem that the third party doctrine is essentially absurd i mean you know people turn information over their telephone companies and it's you know we have the case pending in the supreme court about the stored communications act in the modern world you turn all sorts of information over to companies because you actually want to be part of the modern world you don't be off the grid you don't want to live without a phone you don't want to in other ways cut yourself off and we call that and you know it's kind of one of those things only a lawyer can love it's voluntary you know it's really non voluntary correct yeah there are there are a few years any different we enforce this third party doctrine and all these other applications well the the key difference here is that the city of naperville's d p u e is not actually a third party they're not independent utility they're one hundred percent owned and operated by the city of naperville you know what bothers me about that actually if you were to win it seems to me you would be giving a tremendous competitive boost to the private utility you would make it more expensive for municipally owned utilities such as one naperville chose to  e and you would be actually inducing a switch over to the comets of the world i don't know that that's true your honor because com had for example in their smart meter deployment program offers customers the alternative of retaining an analog meter it would be perfectly possible for if the third party doctrine did not apply to municipally owned utility naperville have would have the ability to offer an analog meter as an alternative the same as comment but now they do have that alternative for the wired digital right but the way a little extra the wire digital smart meter for the wired the wireless alternative that's offered by the city of naperville is simply a smart meter that has the radio disabled so it's still logging the same information it's still gathering all of the the original kilowatt usage our and the reactive data it's just storing it on a memory card that then has to be picked up by the city once a month or some other interval but the same data is there as the as would be gathered on the fifteen minute increment ok well maybe you would like to save a little bit for rebuttal and unless you have something more sane just well i just wanted to also say that the city it relies are as argued about proprietary capacity in their brief and it seems to be using that as a way to try to apply the third party doctrines of them as if they're working in a proprietary capacity they should be treated the same way that a third party utility would be treated but as the seventh circuit noted wisconsin interscholastic the proprietary capacity does not absolve them from scrutiny under constitutional provisions thank you morning may please the court my name is kristen foley and i represent the city of naperville the city of naperville as the proprietor of an electric utility providing electric service to fifty seven thousand customers did not and does not violate the fourth amendment when  collects a kilowatt hour data usage every fifteen minutes to smart meters because the electric customers have voluntarily contract for service with the city and have no reasonable expectation of privacy but they have no other way to get electricity right you have to live in a real correctly so i guess they put solar panels on their house or some crack they don't and that that argument whether or not it is truly voluntarily voluntary was addressed in the same manner in the supreme court cases of miller and smith versus  and involving banks and and telephone companies where the dissent said it's not you can't function in modern society without without having you know a bank account or cellphone or not so you can choose what thank you was built correct but as far as that that theory was rejected by the majority has been rejected by the majority since the one nine hundred seventy s said i'm going to say that miller is actually quite different first of all impera clytie although the court didn't get into this vast numbers of people function without bank accounts that's why all those currency exchanges are sitting around downtown chicago there are many people who simply don't have either the really canonic wherewith all or the perceived economic wherewithal to use the banking system and so they live in a cash economy they live in the currency exchange economy so it's actually quite possible to function without a bank it may be a little expensive if you need to cash objected but it's possible  secondly electricity one hundred i guess is something that i have a very hard time unless you're suggesting that people can go off grid altogether as i say and plaster solar panels all over the top of their house and live with that but i don't think the supreme court has closed the door on something like electricity be like saying oh you know we're put a smart water meter in and sure you can live without water well not really  one of the interesting points as far as whether it's voluntary or voluntary or not was addressed by the fourth circuit in us versus graham in one of the cell site location information cases and the the fourth circuit and analogized voluntary versus involuntary as being are you aware as a customer that this information is being collected versus are you not aware of it that the police are taking it so that i would that say so would you say that your obligation to pay a parking ticket is voluntary because you're aware that the city has decided you parked in front of the fire hydrant i think going to awareness surely not enough to make it voluntary that would probably be differ i think that's one component that this court consider in the grand scheme of whether it is voluntary or not we have been providing electricity to our residents since one thousand seven everyone is certainly aware that there is a meter on their house everyone is aware that they get monthly bills from the city that electricity is not free and that they are aware that we are taking incremental readings of their electricity juror not talking about what i'm going to just call the meditator that the additional data that mr gold rinse and says is has been added to that collection of information since you left the analog platform we are gathering and analyzing kilowatt hour data for billing purposes that is it we are not doing anything other than taking electric readings for the purpose of generating a bill and for the purpose of implementing future programs one of the programs we desire to implement is a demand response program which allows customers to turn down their electric usage during high peak hours and get a credit on their bill for that so do we have a question of fact here because he's very adamant that you're collecting more than that you know and you're saying no we aren't so don't we need to know no your honor either way there is has held that there is no reason expectation of privacy in both the eight circuits in us versus mcintyre and the sixth circuit in two thousand and sixteen in the case of us versus thomas there's also been several district court cases  oregon wyoming which say that there's no reasonable expectation of privacy and electric usage data so when your electric company is reading your meter you know but you give that information anybody no absolutely not in fact what we did is we how this keep it all yourself you don't give anybody else correct that there are very few people who can have the information and we specifically codified that in our ordinance the people who can get the information are the electric department the finance department for billing purposes and the legal department those are the only people who can get the combination of customer and usage data combined that's it so we held ourselves to a higher standard  we have even said we've even codified that we will not release any information without a warrant or a court order that has the both the customer information and the amount of energy so we have a very high standard to pay and recognize it would be a problem if you did if we revealed it if you didn't have what you say well i think that under the you know the there is the case ferguson vs versus charleston where if there is a completely commingled purpose between the city and the police department and you're not collecting energy or energy readings for billing but you're really secretly collecting energy and coots with the police for something the national  information based upon the electric usage records that we are getting that there is to a point if it's also said that you're actually already if you will collecting that information and storing it even if you've decided to put blinders on and not read it right now and the collection itself is the fourth amendment violation i'm just that's my understanding of his theory right well it's not but it's not a we are collecting it we do hold it for three years and then we  where did three years come from so there's some statute of limitation on bill collection no i think that before we didn't have a limit and so we then we enacted a specific limit so that there wasn't a massive data pile in some room that hello really  justice league was right in that there is no right to privacy in electric usage data but also even if there was a right to privacy in kilowatt hours the right to privacy and any sort of metadata anything else even if even if this court were to assume that there was some right to privacy in what we are taking we're still not violating that right because what we're doing and we're operating electric utility in a proprietary capacity we have reasonable security measures to prevent that information from being disclosed to third parties and what do you third parties you said even means the police so absolutely police are investigating joe smith's house for suspicious electrical use there's got to be a warrant absolutely that over absolutely and so what we're doing is reasonable in scope we have security measures and we're also doing exactly what our private counterparts are doing such as kind that comment is installing four million your opponent said and i gather this is true in other places around the country to that comment has left the option on the table for someone to have the old analog meter and surely not that many people even want the thing i mean it seems to me that there are financial disincentives because it's more expensive to send somebody around in and read analog meters  so the question as i see it is why isn't the option of an analog meter something that's required well it's not required because we are allowed in our and architraves very capacity to make reasonable business decisions and that the supreme court in the case of wayland versus new york in nassau versus nelson said the test isn't for you to show what's necessary or the test isn't for you to show that you're doing the least restrictive type of gathering of information the test is really what we're doing is what we are doing reasonable and i assert to you what we are doing is reasonable we have offered a don wireless smart meter option we don't want to go back to the analogs because frankly we can't take the fifteen minute readings on an analog meter without an extreme amount of expense we want everyone to be on the same type of meter we feel that it's very important for our electric absolutely and if we can keep our purchase cost down we can then pass that along to our customers we are completely rate based utility we operate at no profit at all so it's very important for us to be fiscally responsible to our taxpayers to make sure our rates stay as low as possible you know analog meters have been around for sixty years we want the smart meters to be around for another sixty we want to have conservation abilities going forward that it is incredibly important to allow people to be to play a more active role in their energy usage and if they want to turn down the dial on a hot summer afternoon to get a credit or to get some money off their bill then we think that's a wonderful thing and we want to allow our customers the ability to do that they don't have to do that they don't do that completely voluntary that's that's a program that that's a demand response program that we are looking forward to implement soon we haven't done it now but i knew you were going to do it house and your oven is going to start talking to you about you know you've been using too much electricity rate cut it out and besides you need to lose weight you know i certainly understand that this was this was a change going from reading once a month to reading every fifteen minutes but we have a solid business purpose behind it we are not alone there are over seventy million smart meters that have been installed across the united states this is what's the denominator how many if we were all smart meter how many of them would be out there i believe that there would be around i think that the seventy million is almost fifty percent right now so we were kind of early we did it several years ago i think it's coming right now is still in the process of i think they're supposed to be done at the end of this year i'm with their four million so and why i keep bringing you know it's important to remember what comment it is doing because this is also in the wisconsin interscholastic athletic association case this court said that the tendency is to allow state actors performing commercial or proprietary actions the same latitude as their private counterparts so i bet you would agree surely with what mr cole branson said that being that you may be trying to do that but on the other hand the naperville electric utility is bound by the first amendment it's bound by the fourth amendment you don't just say well we decided to opt out of the constitution one hundred percent we one hundred percent agree with you and there has been no violation of the fourth amendment under either theory under the third party doctrine or we're operating as a proprietor in a proprietary capacity because what we're doing is reasonable because we have security measures and because our our private counterparts are doing it that's it's reasonable as well so we're still complying with that we're not violating anyone's fourth amendment rights or their right to privacy and taking the one thing that i wanted to point out your honor was when you when discussing the naperville statute of naperville statute which routines only three years of data was actually and acted after the appeal was filed and so i think that that's a an almost a tacit admission that there's a privacy implication here or at least a potential privacy problem but you had mentioned specifically judge would that does it require a warrant and the  require a warrant it requires a warrant or a court order and i think that language is significant because in mcintyre one of the issues is that there was no warrant the the court order was in fact a subpoena that was issued by a prosecutor so there was no judicial review which is one of the major issues that we take with the city of naperville's statute and their statutory provisions that are in acted to supposedly protect the privacy of the individual there is no requirement for judicial review there is no warrant requirement there's nothing that would stop a naperville prosecutor from issuing a subpoena for that information to the city of naperville itself and having the that data be turned over to the i mean just because you get a subpoena doesn't mean everything happens you can go back to the court say this is excessive in scope it's too burdensome it's not relevant you know well but challenge you would be challenging the  naperville the utility is the city of naperville and the police department is the city of naperville so i don't know why the city of naperville would challenge its own subpoena the utility would challenge the subpoena issued by its prosecutor what about this case suppose the city  i bet naperville probably has fire regulations that restrict the number of people who can live and houses of various sizes most most places do but suppose it notices that a house has that sensibly has two people living in has extraordinary high electric usage and it suspects that actually huge number of people are are living there you know ten fifteen people all ramped in there so that might be municipal ordinance in force and that's outside the criminal realm but there might be a discovery request or some other form of court order why is it that a court order is automatically not good enough well because i think that we're talking about a fourth amendment violation about the privacy interest within the home and under the fourth amendment that requires a warrant with problem cause the fourth amendment requires searches and seizures to be reasonable and one way of showing that it's reasonable is if there's a warrant there's not always a warm requirement well if there were exigent circumstances for example there may be an exception all right i see my time has expired all right well thank you very much thanks to both counsel take