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Inside Privacy Updates on Developments in Global Privacy & Data Security from Covington & Burling LLP

Privacy at a cost? Recent smart meter litigation in Maine

Posted in Cybersecurity, Data Breaches, Emerging Technologies, State Legislatures

By Nigel Howard, Jessica Milner and Mark Johnson

Interesting questions are arising in relation to how to implement an “opt out” for smart meters.  In many states, customer unease about the privacy and safety concerns associated with smart meters has resulted in new legislation or regulations that give customers the ability to decline the installation of a smart meter.  However, smart meters enable energy efficiency and cost savings, so should customers that opt out have to pay more?

This question arose last month in the Maine Supreme Court in the case of Friedman v. Maine Public Utilities Commission and Central Maine Power Company. The court heard an appeal from the Maine Public Utilities Commission’s dismissal of a complaint raising concerns over smart meter technology, including privacy and security issues.

  The Commission had previously authorized the Central Maine Power Company to install smart meters in the home of each of its customers unless a customer paid both an initial fee and a recurring monthly fee for the right to opt out of receiving a smart meter.  The privacy concerns focus on the capacity of smart meters to record, in nearly real time, data about electricity usage ─ potentially revealing when a person is home, when they are asleep, and at what times they are using specific appliances.  This data gets transmitted to the smart grid, which presents a risk that sensitive information could make its way to unauthorized third parties through cybersecurity attacks or accidental disclosures.  The initial privacy argument advanced by the appellants in the Maine case is that the collection of data within a customer’s home by the smart meters constitutes an impermissible search for which no consent has been given under the Fourth Amendment.  They contend there is no consent because the utility’s terms and conditions do not include authorization for collecting data from the customer’s home and customers have no alternative source for buying electricity.  The issue is further complicated by the imposition of fees for customers seeking to opt out.  The idea that one must pay a monthly charge to prevent disclosures of private information is not appealing to some customers.

In their brief, the appellants cited Kyllo v. United States, 533 U.S. 27 (2001), a U.S. Supreme Court privacy decision in which the Court held that using technology to collect data or information that otherwise could not be obtained without a physical intrusion constitutes a “search” under the Fourth Amendment.  They argued that a smart meter not only collects detailed and personal data, but also might be more intrusive than even the infrared camera technology at issue in Kyllo.

As the use of smart meters becomes more prevalent, the decision of the Maine Supreme Court on these privacy issues may shape the scope of future legal battles around the country.  Already, similar privacy arguments have been raised by opponents of smart meter programs in at least one other case (Naperville Smart Meter Awareness v. City of Naperville, N.D. Ill., No. 11-CV-9299, Dec. 30, 2011).  

Once the Maine Supreme Court releases its decision in Friedman, we will post an update.