Federal Judge to Be Keeper of Disputed Data in PayPal Hacking Case

The Recorder, Vanessa Blum
October 15, 2012

A federal judge stepped in Thursday to resolve a long-running dispute over computer files seized by agents investigating the 2010 cyberattack against PayPal.

U.S. District Senior Judge D. Lowell Jensen ordered prosecutors to turn over digital copies of computers and other electronic devices to be held by the court — a pragmatic solution the judge said would preserve potential evidence for trial but prevent government agents from accessing information outside the scope of search warrants.

Fourteen people from around the country are charged with taking part in an attack on PayPal's servers organized by the "hacktivist" group Anonymous. Each defendant is charged with conspiring in the attack and with causing intentional damage to a protected computer.

For months, defense attorneys had protested the government's handling of their clients' personal computer files like photographs and emails. Led by Los Gatos solo James McNair Thompson and Thomas Nolan Jr. of Nolan, Armstrong & Barton in Palo Alto, defense lawyers insisted such materials were never covered by search warrants and should be purged, not held as evidence.

Jensen agreed with defense arguments to a point, saying agents could not access the files without a court order. However, the judge also recognized a need to keep a complete record of evidence collected in the investigation.

"When you seize something, there's an obvious obligation to keep it intact," Jensen said.

The hacking case, U.S. v. Collins, 11-471, is being handled by Assistant U.S. Attorneys Matthew Parella and Hanley Chew, who are part of the CHIP, or computer hacking and intellectual property, group.

The defendants are accused of engaging in a distributed denial of service, or DDoS, attack on PayPal's computer servers, a form of hacking which overloads a computer network until it can no longer function. The attack was intended to punish PayPal for cutting ties with online publisher WikiLeaks, prosecutors allege.

U.S. Magistrate Judge Paul Grewal, who has presided over the discovery dispute, twice ordered the government to return, delete, or destroy files not covered by search warrants. Prosecutors appealed to Jensen, insisting the demand could compromise evidence in the case.

Justice Department appellate lawyer Jennifer Ellickson, who has joined in the discovery dispute, told Jensen incriminating software programs found on defendants' computers might not operate if other files were erased.

At the close of the hearing, Jensen said it was time to move on. "We need to be talking about other things — things like trials," he said.