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Seventh Circuit Affirms City’s Right to Collect Resident Energy-Consumption Data Every 15 Minutes

Seventh Circuit Affirms City’s Right to Collect Resident Energy-Consumption Data Every 15 Minutes
August 29, 2018 by Reena R. Bajowala, Partner

On August 16, 2018, the Seventh Circuit Court of Appeal issued Naperville Smart Meter Awareness v. City of Naperville, No. 16-3766 (slip op.), finding the City of Naperville’s mandatory “smart meter” program was not an unreasonable search under the Fourth Amendment to the U.S. Constitution. The City of Naperville owns and operates the public utility that provides electricity to the city’s residents. The utility collects and retains residents’ energy-consumption data at 15-minute intervals for up to three years. Traditional analog energy meters typically collect monthly energy consumption in a single lump figure once a month. Notably, a resident cannot opt-out of Naperville’s smart meter program. The Court analyzed whether the data collection constituted a “search.” The Court noted the richness of inferences that could be drawn from the data collected relating to the private lives of residents, including their television, sleep, and other habits. Recognizing the “ever-accelerating pace of technological development carries serious privacy implications,” the Court found Naperville “searches” its residents’ homes when it collects this data. In so finding, the Court noted that “even extremely invasive technology can evade the warrant requirement if it is ‘in general public use.’” The Court found, however, that smart meters had not yet reached that level of use. Also, the Court rejected the argument that the residents voluntarily entered into a relationship that required providing the information, making the Fourth Amendment irrelevant, because a “choice to share data imposed by fiat is no choice at all.” If a resident wants electricity in his or her home, he or she must buy it from the city’s public utility. The Court found, however, that the search was “reasonable,” meaning Naperville’s interest in collecting the energy-consumption data outweighed the residents’ privacy interest. Specifically, the interests in “allow[ing] utilities to reduce costs, provide cheaper power to consumers, encourage energy efficiency, and increase grid stability” were sufficient. Based on Naperville’s assurance that the data would not be turned over to law enforcement without a warrant, the Court concluded the search was reasonable “where the search is unrelated to law enforcement, is minimally invasive, and presents little risk of corollary criminal consequences.” The Court cautioned that its opinion was limited and could change if the data were collected at shorter intervals, if the data was more easily accessible to law enforcement, or if the residents could genuinely consent to the utility. In addition, as technologies become more pervasive and reach the level of “general public use,” we can expect the Fourth Amendment analysis to become thornier. A copy of the opinion can be found here.

For more information, contact Reena Bajowala or another member of our Internet of Things Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.



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