Naperville Smart Meter Awareness v. City of Naperville

900 F.3d 521

NAPERVILLE SMART METER AWARENESS, Plaintiff-Appellant,

v.CITY OF NAPERVILLE, Defendant-Appellee.

No. 16-3766

United States Court of Appeals, Seventh Circuit.

Argued March 27, 2018

Decided August 16, 2018

David Lee Gulbransen, Jr., Attorney, Law Office of David Gulbransen, Oak Park, IL, for Plaintiff–Appellant.

Kristen Foley, Attorney, Michael DiSanto, Attorney, City of Naperville, Naperville, IL, for Defendant–Appellee.

David A. Greene, Attorney, Electronic Frontier Foundation, San Francisco, CA, for Amicus Curiae Electronic Frontier Foundation.

Caroline Elizabeth Wilson Palow, Attorney, Privacy International, London, Greater London, EC1M 5UY, United Kingdom, for Amicus Curiae Privacy International.

John M. Baker, Attorney, Green Espel PLLP, Minneapolis, MN, for Amicus Curiae American Public Power Association.

Before Wood, Chief Judge, and Bauer and Kanne, Circuit Judges.

Kanne, Circuit Judge.

The City of Naperville owns and operates a public utility that provides electricity to the city’s residents. The utility collects residents’ energy-consumption data at fifteen-minute intervals. It then stores the data for up to three years. This case presents the question whether Naperville’s collection of this data is reasonable under the Fourth Amendment of the U.S. Constitution and Article I, § 6 of the Illinois Constitution.

I. BACKGROUND

The American Recovery and Reinvestment Act of 2009 set aside funds to modernize the Nation’s electrical grid. The Act tasked the Department of Energy with distributing these funds under the Smart Grid Investment Grant program. Through this program, the City of Naperville was selected to receive $11 million to update its own grid. As part of these upgrades, Naperville began replacing its residential, analog energy meters with digital "smart meters."

Using traditional energy meters, utilities typically collect monthly energy consumption in a single lump figure once per month. By contrast, smart meters record consumption much more frequently, often collecting thousands of readings every month. Due to this frequency, smart meters show both the amount of electricity being used inside a home and when that energy is used.

This data reveals information about the happenings inside a home. That is because individual appliances have distinct energy-consumption patterns or "load signatures." Ramyar Rashed Mohassel et al., A Survey on Advanced Metering Infrastructure , 63 Int’l J. Electrical Power & Energy Systems 473, 478 (2014). A refrigerator, for instance, draws power differently than a television, respirator, or indoor grow light. By comparing longitudinal energy-consumption data against a growing library of appliance load signatures, researchers can predict the appliances that are present in a home and when those appliances are used. See id.; A. Prudenzi, A Neuron Nets Based Procedure for Identifying Domestic Appliances Pattern-of-Use from Energy Recordings at Meter Panel , 2 IEEE Power Engineering Soc’y Winter Meeting 941 (2002). The accuracy of these predictions depends, of course, on the frequency at which the data is collected and the sophistication of the tools used to analyze that data.

While some cities have allowed residents to decide whether to adopt smart meters, Naperville’s residents have little choice. If they want electricity in their homes, they must buy it from the city’s public utility. And they cannot opt out of the smart-meter program.¹ The meters the city installed collect residents’ energy-usage data at fifteen-minute intervals. Naperville then stores the data for up to three years.

Naperville Smart Meter Awareness ("Smart Meter Awareness"), a group of concerned citizens, sued Naperville over the smart-meter program. It alleges that Naperville’s smart meters reveal "intimate personal details of the City’s electric customers such as when people are home and when the home is vacant, sleeping routines, eating routines, specific appliance types in the home and when used, and charging data for plug-in vehicles that can be used to identify travel routines and history." (R. 102-1 at 14.) The organization further alleges that collection of this data constitutes an unreasonable search under the Fourth Amendment of the U.S. Constitution as well as an unreasonable search and invasion of privacy under Article I, § 6 of the Illinois Constitution.²

The district court dismissed two of Smart Meter Awareness’s complaints without prejudice. Smart Meter Awareness requested leave to file a third, but the district court denied that request. It reasoned that amending the complaint would be futile because even the proposed third amended complaint had not plausibly alleged a Fourth Amendment violation or a violation of the Illinois Constitution. Smart Meter Awareness appealed. Because the district court denied leave to amend on futility grounds, we apply the legal sufficiency standard of Rule 12(b)(6) de novo to determine if the proposed amended complaint fails to state a claim. See , e.g. , Gen. Elec. Capital Corp. v. Lease Resolution Corp. , 128 F.3d 1074, 1085 (7th Cir. 1997).

II. ANALYSIS

The Fourth Amendment of the U.S. Constitution protects "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." Similarly, Article I, § 6 of the Illinois Constitution affords people "the right to be secure in their persons, houses, papers and other possessions against unreasonable searches, seizures, invasions of privacy or interceptions of communications by eavesdropping devices or other means."

We can resolve both the state and federal constitutional claims by answering the following two questions.³ First, has the organization plausibly alleged that the data collection is a search? Second, is the search unreasonable? For the reasons that follow, we find that the data collection constitutes a search under both the Fourth Amendment and the Illinois Constitution. This search, however, is reasonable.⁴

A. The collection of smart-meter data at fifteen-minute intervals constitutes a search.

"At the [Fourth Amendment’s] very core stands the right of a man to retreat into his own home and there be free from unreasonable government intrusion." Silverman v. United States , 365 U.S. 505, 511, 81 S.Ct. 679, 5 L.Ed.2d 734 (1961). This protection, though previously tied to common-law trespass, now encompasses searches of the home made possible by ever-more sophisticated technology.

Kyllo v. United States , 533 U.S. 27, 31–32, 121 S.Ct. 2038, 150 L.Ed.2d 94 (2001). Any other rule would "erode the privacy guaranteed by the Fourth Amendment." Id . at 34, 121 S.Ct. 2038.

"Where ... the Government uses a device that is not in general public use, to explore details of the home that would previously have been unknowable without physical intrusion, the surveillance is a ‘search.’ " Id . at 40, 121 S.Ct. 2038. This protection remains in force even when the enhancements do not allow the government to literally peer into the home. In Kyllo , for instance, the intrusion by way of thermal imaging was relatively crude—it showed that "the roof over the garage and a side wall of [a] home were relatively hot compared to the rest of the home and substantially warmer than neighboring homes in the triplex." Id . at 30, 121 S.Ct. 2038. The device "did not show any people or activity within the walls of the structure" nor could it "penetrate walls or windows to reveal conversations or human activities." Id. (quoting Supp.App. to Pet. for Cert. 39–40). Nevertheless, the Supreme Court held that law enforcement had searched the home when they collected thermal images. Id . at 40, 121 S.Ct. 2038.

The technology-assisted data collection that Smart Meter Awareness alleges here is at least as rich as that found to be a search in Kyllo . Indeed, the group alleges that energy-consumption data collected at fifteen-minute intervals reveals when people are home, when people are away, when people sleep and eat, what types of appliances are in the home, and when those appliances are used.⁵ (R. 102-1 at 14.) By contrast, Kyllo merely revealed that something in the home was emitting a large amount of energy (in the form of heat).

It’s true that observers of smart-meter data must make some inferences to conclude, for instance, that an occupant is showering, or eating, or sleeping. But Kyllo rejected the "extraordinary assertion that anything learned through ‘an inference’ cannot be a search." Id . at 36, 121 S.Ct. 2038 (quoting id . at 44, 121 S.Ct. 2038 (Stevens, J., dissenting) ). What’s more, the data collected by Naperville can be used to draw the exact inference that troubled the Court in Kyllo . There, law enforcement "concluded that [a home’s occupant] was using halide lights to grow marijuana in his house" based on an excessive amount of energy coming from the home. Id . at 30, 121 S.Ct. 2038. Here too, law enforcement could conclude that an occupant was using grow lights from incredibly high meter readings, particularly if the power was drawn at odd hours. In fact, the data collected by Naperville could prove even more intrusive. By analyzing the energy consumption of a home over time in concert with appliance load profiles for grow lights, Naperville law enforcement could "conclude" that a resident was using the lights with more confidence than those using thermal imaging could ever hope for. With little effort, they could conduct this analysis for many homes over many years.

Under Kyllo , however, even an extremely invasive technology can evade the warrant requirement if it is "in general public use." Id. at 40, 121 S.Ct. 2038. While more and more energy providers are encouraging (or in this case forcing) their customers to permit the installation of smart meters, the meters are not yet so pervasive that they fall into this class. To be sure, the exact contours of this qualifier are unclear—since Kyllo, the Supreme Court has offered little guidance. But Kyllo itself...