                           In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

Nos. 04-2262, 04-2385, 04-4308 & 05-1002
AMERITECH CORPORATION,
                         Plaintiff-Appellant, Cross-Appellee,
                              v.


E. MICHAEL MCCANN, District Attorney
of Milwaukee County, Wisconsin,
                      Defendant-Appellee, Cross-Appellant.

                        ____________
          Appeals from the United States District Court
               for the Eastern District of Wisconsin.
         No. 99-C-675—Rudolph T. Randa, Chief Judge.
                        ____________
   ARGUED DECEMBER 6, 2004—DECIDED APRIL 12, 2005
                  ____________




  Before EASTERBROOK, KANNE, and EVANS, Circuit Judges.
  EASTERBROOK, Circuit Judge. Now making its second
appearance in this court, this suit presents questions about
the meaning and constitutionality of 18 U.S.C. §2706, part
of the Electronic Communications Privacy Act. This section
requires any “governmental entity” that demands certain
information from phone companies to pay for the expense of
2                Nos. 04-2262, 04-2385, 04-4308 & 05-1002

its provision. Michael McCann, the District Attorney for
Milwaukee County in Wisconsin, has refused to comply with
this statute. When Ameritech (a subsidiary of SBC), which
provides phone service in Wisconsin and other parts of the
Midwest, sued to enforce §2706, the district judge ruled that
the litigation is foreclosed by principles of state sovereign
immunity. (District Attorneys in Wisconsin are officers of
the state.) We reversed, 297 F.3d 582 (2002), holding that
prospective obedience may be compelled under Ex parte
Young, 209 U.S. 123 (1908). On remand the district court
opined that the District Attorney must comply with §2706
whenever it governs—but the district judge refused to say
when it does govern. 308 F. Supp. 2d 911 (E.D. Wis. 2004).
Ameritech has appealed again. Following oral argument we
held matters in abeyance until the district court entered a
proper judgment, which it had neglected to do. See Buck v.
U.S. Digital Communications, Inc., 141 F.3d 710 (7th Cir.
1998); American Interinsurance Exchange v. Occidental Fire
& Casualty Co., 835 F.2d 157 (7th Cir. 1987); Azeez v.
Fairman, 795 F.2d 1296, 1297 (7th Cir. 1986). A real
declaratory judgment and a fresh notice of appeal at last
present the case for decision.
  The dispute concerns “terminating AMA reports.” Unlike
cell phone companies, which bill their customers for calls
received as well as calls made, landline phone companies
bill for outgoing calls only. The network that routes and con-
nects each call “knows” its destination; how else could it
connect the call and compute the customer’s bill (which may
vary by distance between the call’s origin and destination)?
The system for generating and retaining this information is
called “automated message accounting” or AMA. Customers’
bills often show this information. Ask a landline phone
company such as Ameritech “who placed the calls received
by customer X?”, however, and it has no easy way to answer,
as the computer databases organize all of the information
by which customer placed the calls rather than by which
customer received them.
Nos. 04-2262, 04-2385, 04-4308 & 05-1002                     3

  AMA information is stored on searchable media, but com-
piling a report about the origin of calls terminated (= re-
ceived) at a given number—hence, “terminating AMA report”—
takes both human and computer time. Each report for a
given number requires an hour or two of employees’ time to
set up the data-processing request and turn the resulting
raw data into a report that non-specialists can follow, plus
about 15 minutes of computer time per day covered by the
report. These are powerful (and expensive) computers
needed to handle a flood of information: Ameritech termi-
nates about 25 million calls daily in Wisconsin alone. Fif-
teen minutes per recipient per day adds up; when the
District Attorney wants a terminating AMA report for one
number for one month, he is requisitioning at least seven
hours of time on a mainframe computer (potentially as much
as 20 hours), plus an hour or two of skilled labor. And
Ameritech receives more than 400 requests for terminating
AMA reports monthly in the Midwest.

  Ameritech wants to be compensated for the expense of
producing these reports. The need to pay for services rend-
ered also will induce law-enforcement personnel to be less
profligate in their demand for these reports, which at least
in Wisconsin they see as free goods. According to Ameritech,
§2706 requires law-enforcement agencies to pay for the
information. Here is the statute:
    (a) Except as otherwise provided in subsection (c),
    a governmental entity obtaining the contents of com-
    munications, records, or other information under
    section 2702, 2703, or 2704 of this title shall pay to
    the person or entity assembling or providing such
    information a fee for reimbursement for such costs
    as are reasonably necessary and which have been
    directly incurred in searching for, assembling, re-
    producing, or otherwise providing such information.
    Such reimbursable costs shall include any costs due
    to necessary disruption of normal operations of any
4                Nos. 04-2262, 04-2385, 04-4308 & 05-1002

    electronic communication service or remote comput-
    ing service in which such information may be
    stored.
    (b) The amount of the fee provided by subsection (a)
    shall be as mutually agreed by the governmental
    entity and the person or entity providing the infor-
    mation, or, in the absence of agreement, shall be as
    determined by the court which issued the order for
    production of such information (or the court before
    which a criminal prosecution relating to such
    information would be brought, if no court order was
    issued for production of the information).
    (c) The requirement of subsection (a) of this section
    does not apply with respect to records or other in-
    formation maintained by a communications com-
    mon carrier that relate to telephone toll records and
    telephone listings obtained under section 2703 of
    this title. The court may, however, order a payment
    as described in subsection (a) if the court deter-
    mines the information required is unusually volu-
    minous in nature or otherwise caused an undue
    burden on the provider.
Section 2703 in turn provides for governmental access to
AMA records. State and federal law-enforcement officials
throughout the nation pay routinely. Not so in Wisconsin,
where officials have dug in their heels. Since 1986, when
§2706 was enacted, the statute has produced only two liti-
gated cases—one dealt with an allegedly excessive aggre-
gate level of requests by a user willing to pay, see Michigan
Bell Telephone Co. v. DEA, 693 F. Supp. 542 (E.D. Mich.
1988), and the other is this suit, now in its sixth year, in
which the requester is in denial. Public officials in Wisconsin
not only refuse to pay but also make a disproportionately
high number of demands compared with law-enforcement
officials in other states. That Wisconsin’s prosecutors treat
Nos. 04-2262, 04-2385, 04-4308 & 05-1002                    5

terminating AMA reports as free doubtless explains this fact,
and the volume of demands explains Ameritech’s concern
about the drain on its resources.
  As we’ve already mentioned, the district court originally
dismissed Ameritech’s suit on sovereign-immunity grounds,
and we remanded for decision on the merits. What followed
was peculiar. Although federal courts are supposed to
explore all non-constitutional grounds of decision first, to
ensure against unnecessary constitutional adjudication, see
Jean v. Nelson, 472 U.S. 846, 854 (1985); Horn Farms, Inc.
v. Johanns, 397 F.3d 472, 477 (7th Cir. 2005), the district
judge began with a series of constitutional issues and then
refused to address the main statutory question at
all—making the rest of its opinion largely, if not wholly,
advisory. The upshot was a declaratory judgment that the
District Attorney must pay compensation whenever it is
due, but not specifying when that might be. Neither side is
satisfied with that truism. We shall tackle the issues in the
right order, starting with the statute and moving to the
Constitution only to the extent necessary in light of the
statutory decision.
  Logically the first statutory question is the one the
district judge refused to address: whether the exemption in
§2706(c) covers terminating AMA reports. If it does, then the
case is over. The district judge thought it inappropriate to
broach the subject because §2706(b) calls on the court that
required the disclosure to set the amount of compensation.
True enough, but this suit is not about the amount of
compensation; Ameritech seeks a prospective declaration
that will determine the kinds of reports for which compen-
sation is required. That’s why, we held in 2002, the litiga-
tion comes within Ex parte Young. The district judge refused
to address the effect of §2706(c) because he treated this suit
as a quest for money. This repeats the mistake that led to
our prior reversal. We see no point in remanding a second
time and will resolve the issue ourselves. Given the District
6                Nos. 04-2262, 04-2385, 04-4308 & 05-1002

Attorney’s intransigence, and the fact that subpoenas are
issued ex parte, there are obvious gains to resolving the
question now instead of hoping that the District Attorney
will spontaneously start asking state courts to fix compen-
sation under §2706(b). (We refer throughout this opinion to
“the District Attorney,” because one named D.A. is the sole
defendant. But that defendant is represented in this court
by the Attorney General of Wisconsin, and his position is
that of the State as an entity rather than an idiosyncratic
view from Milwaukee.)
   According to the District Attorney, terminating AMA re-
ports are exempt from compensation because they “relate
to” telephone toll records. The reports come from the AMA
data that phone companies create and use in the regular
course of business, so they must relate to those data. Lan-
guage cannot be cut into little snippets, however; this phrase
takes color from the preceding language: “records or other
information maintained by a communications common car-
rier that relate to telephone toll records”. If state officials
want “records”—for example, bills and equivalent state-
ments—that phone companies “maintain” in the course of
their phone business, they may have them for free; likewise
if the state wants the raw “information.” Read this way, the
exemption covers copies of customers’ bills and not, for
example, the papers that Ameritech’s accountants use to
produce its balance sheet and tax return. But the District
Attorney does not want copies of customers’ bills or the raw
data on 25 million calls a day. He wants reports that
Ameritech does not “maintain” but must create on demand.
Because Ameritech does not “maintain” terminating AMA
reports, they are not covered by §2706(c)’s exception.
  According to the District Attorney, §2706(a) requires judg-
ment in his favor even if §2706(c) does not. Section 2706
applies only to demands by “governmental entities,” and
that means (the District Attorney contends) the federal
government alone. Certainly that’s not what §2706(a) says.
Nos. 04-2262, 04-2385, 04-4308 & 05-1002                     7

“A governmental entity” is considerably broader than “the
federal government.” The point of §2706 is not to distinguish
the federal government from other governments, but to dis-
tinguish the public from the private sector. Any private
actor who wants information from a phone company will
have to negotiate and pay for the service, when §2702
allows disclosure at all. Governments have a power of com-
pulsion, and §2706 attaches a price tag to the use of that
power, just as the Constitution’s takings clause requires
compensation for other uses of governmental power to
obtain private property.
  Although the Electronic Communications Privacy Act does
not define the term “governmental entity,” it uses that
phrase in several sections in ways that make application to
state and local governments unmistakable. For example,
§2703 specifies how a “governmental entity” can go about
obliging a phone company to hand over records. The statute
gives examples, such as “an administrative subpoena au-
thorized by a Federal or State statute or a Federal or State
grand jury or trial subpoena”, §2703(b)(1)(B)(i). Other options
include a “State warrant” (referred to in three subsections)
and a “Federal or State grand jury or trial subpoena” (in
§2703(c)(2)). Then there is §2703(d), which distinguishes
what “a State governmental authority” must do from how
a federal governmental body proceeds, an odd reference in-
deed if the category “governmental entity” does not include
states.
  The language of §2703 and §2706 taken together is enough
to satisfy any plain-statement requirement for application
of federal law to the states. Cf. Gregory v. Ashcroft, 501 U.S.
452, 460-61 (1991). Although the Congressional Budget
Office expressed an opinion that the 1986 law would not
impose new costs on states, this view—on which Congress
did not vote, and the President did not sign—cannot alter
the meaning of enacted statutes. It suggests instead that
the CBO erred (or perhaps thought that compensable de-
8                 Nos. 04-2262, 04-2385, 04-4308 & 05-1002

mands would be so rare that the expenses under §2706
would not make a dent in a governmental budget).
  Next in line is the District Attorney’s argument that
§2706 does not preempt state law. It does not contain an
express declaration of preemption, the District Attorney
observes, and therefore (he says) does not supersede state
law. Since when has such a declaration been required? The
Constitution’s supremacy clause does all the heavy lifting.
Federal statutes prevail over state and local statutes to the
extent of any inconsistency, whether or not Congress so
declares one statute at a time. See International Paper Co.
v. Ouellette, 479 U.S. 481, 489 (1987).
  What’s more, the parties’ to and fro about preemption
is beside the point. No state law excuses or forbids compen-
sation. Federal and state law may differ without one
preempting the other: for example, a federal speed limit of
80 miles per hour on interstate highways would not preempt
a lower speed limit under state law, because a driver could
comply with both rules at the same time. See Amanda
Acquisition Corp. v. Universal Foods Corp., 877 F.2d 496 (7th
Cir. 1989). So, too, state law that fails to provide for compen-
sation when telephone companies disclose information is not
inconsistent with a federal law that does require compensa-
tion; payment is compatible with both laws. Only a state
law along the lines of “a District Attorney is entitled to
records for free” would pose a preemption issue, and there
is no such law in Wisconsin. Thus the question is simply
what §2706 itself requires.
  Section 2706(a) provides that compensation is payable
when “a governmental entity obtain[s] the contents of
communications, records, or other information under
section 2702, 2703, or 2704 of this title”. The District
Attorney insists that he obtains terminating AMA reports
under Wis. Stat. §968.135 rather than under any federal
statute. That does not fly, for reasons that should be appar-
Nos. 04-2262, 04-2385, 04-4308 & 05-1002                      9

ent from our discussion of the “governmental entity”
question. Section 2703 specifies how information is obtained
from phone companies, and a subpoena authorized by a
state statute is one of those means. Thus when the District
Attorney invokes Wis. Stat. §968.135 or any equivalent
route to compel Ameritech to produce a terminating AMA
report he has obtained information “under” §2703.
  Having interpreted §2706 as obliging state and local
governments to pay for the phone records they require, we
must address the District Attorney’s multiple constitutional
objections. He contends, for example, that Congress lacks
authority to regulate this subject. Yet the commerce power
includes all channels of interstate commerce, including the
phone system. See Pensacola Telegraph Co. v. Western Union
Telegraph Co., 96 U.S. 1 (1878); United States v. Lopez, 514
U.S. 549, 558 (1995); United States v. Morrison, 529 U.S.
598, 608-09 (2000). That’s one point of AT&T Corp. v. Iowa
Utilities Board, 525 U.S. 366, 377-86 (1999), which rejected
another state’s argument that the national government
must keep hands off of the state’s regulation of firms that
carry intra-state phone calls. See also Louisiana Public
Service Commission v. FCC, 476 U.S. 355 (1986).
  The District Attorney might as well argue that he (and
the state judiciary) may ignore the federal wiretap statutes
(including §2702), and the fourth amendment, when obtain-
ing access to the contents of “local” calls. Prudently, however,
he concedes that the Omnibus Crime Control and Safe
Streets Act of 1968, which regulates wiretapping, is within
the commerce power even as applied to intra-state calls. See
United States v. D’Antoni, 874 F.2d 1214, 1218-19 (7th Cir.
1989). If that statute may be applied to states, why not the
Electronic Communications Privacy Act? It is an interesting
detail, though not vital to the constitutional analysis, that
the Electronic Communications Privacy Act is an amend-
ment to Title III of the Omnibus Crime Control and Safe
Streets Act. What does matter is that both of these statutes
10               Nos. 04-2262, 04-2385, 04-4308 & 05-1002

regulate the telephone network, which reaches worldwide
and is securely within the national power.
  As for the contention that §2706(b) impinges unduly on
state sovereignty by opening state courts to private suits,
see Alden v. Maine, 527 U.S. 706 (1999): the District
Attorney (which is to say the state itself), not a private
party, is the plaintiff in state court. Once states open their
courts to litigation, they must apply federal rules as well as
those under state law. The supremacy clause gives no other
alternative. See Testa v. Katt, 330 U.S. 386 (1947). State
courts must comply with the wiretap laws and the fourth
amendment; so too they must comply with other federal
rules affecting what information, and under what condi-
tions, telecommunications firms provide to state prosecu-
tors. Thus when the District Attorney petitions the state
court for an order compelling Ameritech to prepare and
provide a terminating AMA report, Ameritech (as the
respondent) is entitled to insist that the state court follow
federal law by attaching a price tag under §2706(b). See
Erickson v. Board of Governors, 207 F.3d 945, 952 (7th Cir.
2000).
  No prosecutor or court in Wisconsin has been “comman-
deered” to do anything; §2706 just places a condition on
activity that states elect to engage in, and from which they
may desist as freely. Cf. Reno v. Condon, 528 U.S. 141 (2000).
This is another thing (beyond the use of Ex parte Young)
that our case has in common with Verizon Maryland Inc. v.
Public Service Commission of Maryland, 535 U.S. 635
(2002): nothing compelled Maryland to regulate phone ser-
vice and prices, but if it chose to do so it had to comply with
applicable federal laws. See also MCI Telecommunications
Corp. v. Illinois Bell Telephone Co., 222 F.3d 323, 345 (7th
Cir. 2000). If Wisconsin wants to keep compensation ques-
tions out of its courts, it can repeal Wis. Stat. §968.135 (and
any similar sources of authority), and then the state
judiciary will not need to resolve these disputes—but of
Nos. 04-2262, 04-2385, 04-4308 & 05-1002                  11

course the prosecutors then won’t have compulsory process
and will need to negotiate with Ameritech about the price
to be paid for terminating AMA reports.
  The judgment of the district court is vacated, and the case
is remanded with instructions to issue a new declaratory
judgment covering all of the points in this opinion. Given
Wisconsin’s longstanding noncompliance with §2706, and
its penchant for litigation, the declaratory judgment should
provide that in the future the District Attorney must tender
compensation as part of every request under Wis. Stat.
§968.135 that Ameritech provide a terminating AMA report,
and must agree to litigate the amount of compensation in
state court if Ameritech deems the tender inadequate.
Unless such an offer is made and included in the state
court’s order, Ameritech need not provide the requested
information. A provision of this kind will prevent the
District Attorney from prolonging the guerilla warfare in
which the state has been engaged for almost 20 years.


A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                   USCA-02-C-0072—4-12-05
