By Robert Milligan and Joshua Salinas A California federal jury convicted a San Francisco executive recruiter this week for violations of the Computer Fraud and Abuse Act (“CFAA”) and theft of trade secrets from his former employer. The conviction represents a significant landmark in the closely watched eight-year case that deepened a federal circuit court… Continue Reading
Tag Archives: CFAA
The Computer Fraud and Abuse Act and Disloyal Employees: A Narrow Bridge To Nowhere?
Posted in Computer Fraud, Computer Fraud and Abuse Act, Data Theft, Trade SecretsBy Gary Glaser and Jacob Oslick An old folk melody describes the world as “a very narrow bridge,” where one misstep can bring disaster. The song seeks to inspire, calling on people to have “no fear at all” while crossing through life’s perils. However inspiring this song might be, some metaphorical bridges just aren’t worth… Continue Reading
Recent California Federal Court Rulings Muddy the Interpretation of the Computer Fraud and Abuse Act
Posted in Computer Fraud and Abuse ActDoes the Computer Fraud and Abuse Act (“CFAA”) prohibit hacking–improperly gaining entrance into a computer system–or simply prohibit improper use of a computer system? U.S. Courts of Appeal are divided. Now, district and appellate court judges in a single federal case pending in the Northern District of California, U.S. v. Nosal, have produced several divergent… Continue Reading
North Carolina Federal Court Uses Computer Fraud and Abuse Act Claim to Exercise Supplemental Jurisdiction Over State Law Claims Against Former Employee and her New Employer
Posted in Computer Fraud and Abuse ActA North Carolina federal court judge exercised his discretion recently to deny a Federal Rule 12(b)(1) motion to dismiss, for lack of subject-matter jurisdiction (complete diversity was absent), multiple state law claims filed by NouvEON against its ex-employee and her new employer. One of the eight counts in the complaint alleged a federal cause of… Continue Reading
California Federal Court Allows Non-Signatory to Arbitration Agreement to Compel Arbitration in Trade Secrets Dispute
Posted in Computer Fraud and Abuse Act, Restrictive Covenants, Trade SecretsA federal district court in the Northern District of California recently found that a non-signatory to an arbitration agreement may enforce that agreement against a signatory and compel arbitration under the doctrine of equitable estoppel. Semin, a software developer, worked for Torbit, Inc. He signed an employment agreement containing a proprietary information non-disclosure provision, and a commitment… Continue Reading
Missouri Federal Court Finds Violations of Employment Agreement May Constitute Unlawful Access Under the Computer Fraud and Abuse Act
Posted in Computer Fraud and Abuse Act, Restrictive Covenants, Trade SecretsBy Paul Freehling and Joshua Salinas A recent Missouri federal court opinion describes an almost unbelievable scenario. Employees signed well-drafted employment agreements — containing such provisions as non-competition, confidentiality, promise of loyalty, and commitment to return employer’s property within 24 hours of termination of employment — and then incorporated and operated a competitor company while still… Continue Reading
Computer Activists Take Over Sentencing Commission Website
Posted in Computer Fraud and Abuse Act, LegislationAnonymous, the aptly named anonymous collective of hackers, hacked into the United States Sentencing Commission’s website on January 23 to protest the government’s prosecution of Aaron Swartz, who committed suicide last month. The group initially hacked the site on Friday January 22, replacing the contents of the site with its own video. In the video,… Continue Reading
Computer Fraud and Abuse Act Claims Subject to Heightened Pleading Requirements
Posted in Computer Fraud and Abuse Act, Practice & ProcedureIn a recent Northern District of California decision, Judge Saundra Brown Armstrong upheld the Ninth Circuit’s ruling in Nosal, and at the same time, held that fraudulent conduct claims under the Computer Fraud and Abuse Act are subject to the heightened pleading requirements of Rule 9 of the Federal Rules of Civil Procedure. Plaintiff is a… Continue Reading
Employer Petitions U.S. Supreme Court to Resolve Computer Fraud and Abuse Act Circuit Split
Posted in Computer Fraud, Computer Fraud and Abuse Act, Data Theft, Practice & ProcedureBy Robert Milligan and Joshua Salinas As anticipated, the issue regarding the application of the Computer Fraud and Abuse Act (“CFAA”) against employees who violate their employer’s computer use policies and steal valuable company data may be headed to the U.S. Supreme Court. Last week, WEC Carolina Energy Solutions LLC (“WEC”) filed a petition for writ… Continue Reading
“Click Fraud” Allegations Found Insufficient Under Computer Fraud and Abuse Act, But Personal Jurisdiction Found Where Defendant Company’s Website Deliberately Targeted Consumers Within the Forum State
Posted in Computer Fraud and Abuse Act, Unfair CompetitionBy Joshua Salinas and Jessica Mendelson A federal district court for the Northern District of California recently held in a “competitor click fraud” case that a mere assertion of a violation of the Computer Fraud and Abuse Act claim without sufficient factual details regarding any inside or outside “hacking” is insufficient to establish subject matter… Continue Reading
California Federal District Court Distinguishes Ninth Circuit’s Nosal Decision and Finds that Computer Fraud and Abuse Act Claims Are Available for Violations of Employers’ “Access” Restrictions
Posted in Computer Fraud and Abuse ActOn June 19, 2012, a district court for the Northern District of California distinguished the Ninth Circuit’s recent U.S. v. Nosal decision and allowed an employer to bring a claim under the Computer Fraud and Abuse Act (“CFAA”) against a former employee for alleged violations of a verbal computer access restriction. (Weingand v. Harland Financial… Continue Reading
Solar Panel Rivals In Trade Secret and Data Theft Spat In California Federal Court
Posted in Computer Fraud and Abuse ActBy Jessica Mendelson On February 13, SunPower Corporation, a manufacturer of solar panels, sued five former employees, as well as its rival, SolarCity Corporation in federal court in San Francisco, California and sought a temporary restraining order against the defendants. SunPower asserted claims of unfair competition, trade secret misappropriation, and violations of the Computer Fraud and… Continue Reading
Dead Again? Use of Computer Fraud and Abuse Act By Employers To Combat Employee Data Theft Limited By Ninth Circuit’s Latest Ruling
Posted in Computer Fraud and Abuse ActThe Ninth Circuit Court of Appeals ordered that U.S. v. Nosal be reheard en banc by all of the Appeals Court judges and that the “three-judge panel opinion [in U.S. v. Nosal, 642 F.3d 781 (9th Cir. 2011)] shall not be cited as precedent by or to any court of the Ninth Circuit.” Accordingly, the ability of employers… Continue Reading
Outside Counsel Fees May Be a Qualified Loss to Meet the CFAA’s $5000 Jurisdictional Requirement
Posted in Computer Fraud and Abuse ActBy David Monachino The Computer Fraud and Abuse Act (“CFAA”) requires, among other things, that a plaintiff demonstrate a “loss” of $5,000 or more. See 18 U.S.C. § 1030(c)(4)(A)(i)(I). In Animators at Law, Inc. v. Capital Legal Solutions, LLC, et al., Case No. 10-CV-1341 E.D.Va. (May 10, 2011) (unpublished) (TSE) two former employees of Animators’ abruptly left to… Continue Reading
Computer Fraud and Abuse Act Remains Viable Claim For Employers To Assert Against Employees Who Steal Company Data
Posted in Computer Fraud and Abuse ActBy Robert Milligan and Joshua Salinas The Computer Fraud and Abuse Act (“CFAA”) remains a potent weapon for employers to use against disgruntled employees who steal company data. The Sixth Circuit in U.S. v. Batti, No. 09-2050, 2011 WL 111745 (6th Cir. 2011)recently upheld the criminal conviction of an employee who allegedly accessed, copied, and leaked… Continue Reading
Brekka decision continues to get press attention
Posted in Computer Fraud and Abuse ActAmy E. Bivins recently published another article in the Daily Labor Report addressing the effects of the Ninth Circuit’s Brekka decision, which we have posted about previously. Ms. Bivins quotes Seyfarth attorney Carolyn Sieve on the issue. Carolyn reminded employers that they "should not rely solely on a potential CFAA claim to protect their proprietary… Continue Reading
More on Brekka
Posted in Computer Fraud and Abuse ActThe BNA publication, Electronic Commerce & Law Report, recently quoted our own Carolyn Sieve, discussing the Brekka decision. The Electronic Commerce & Law Report article, "Brekka Case Shows Need for Comprehensive Strategy to Shield Data from Insider Misuse," discussed how the Ninth Circuit recently joined a trend disfavoring Computer Fraud and Abuse Act (CFAA) claims… Continue Reading
The Ninth Circuit Holds that “Authority” Requirement Prevent Employer From Bringing Computer Fraud and Abuse Act Claim Against Former Employee
Posted in Computer Fraud and Abuse ActIn a recent decision, the federal Ninth Circuit Court of Appeals joined a growing number of federal courts that have limited the use of the Computer Fraud and Abuse Act ("CFAA") in suits brought against former employees accused of taking data from a company’s computer system before leaving the company. In LVRC Holdings LLC v…. Continue Reading
District Court Rejects Employer’s Attempt to Use the Computer Fraud & Abuse Act against Former Employees
Posted in Computer Fraud and Abuse ActIn Lasco Foods, Inc. v. Hall and Shaw Sales, Marketing & Consulting, LLC, 600 F. Supp. 2d 1045 (E.D. Mo. 2009), the United States District Court for the Eastern District of Missouri dismissed an employer’s claim that two former employees violated the Computer Fraud & Abuse Act (“CFAA”), 18 U.S.C. § 1030, et seq., by… Continue Reading
Damage Assessment Not Enough: For Purposes of the CFAA, Apparently “Loss” Does Mean “Damage”
Posted in Computer Fraud and Abuse ActBY JASON STIEHL In recent years, courts in the Northern District of Illinois have made clear that without actual harm to data, a plaintiff cannot claim “damage” under the Consumer Fraud and Abuse Act, 18 U.S.C. 1030 et seq. (“CFAA”). See, e.g., Garelli Wong & Assoc. v. Nichols, 551 F. Supp. 2d 704, 704 (N.D. Ill…. Continue Reading
Federal Court in North Carolina Upholds CFAA Claim as Pleaded
Posted in Computer Fraud and Abuse ActAlthough the trial court’s analysis was not extensive, it clearly found that allegations in a complaint that an employee used a computer program to delete information from a laptop and knowingly deleted information without authorization sufficiently states a Computer Fraud and Abuse Act claim so as to survive a motion to dismiss for failure to state a claim…. Continue Reading