In December, a divided panel of the U.S. Court of Appeals for the Second Circuit in U.S. v. Valle interpreted the Computer Fraud and Abuse Act to exclude employees who access their employer’s computers. The upshot is that if you are an employee in the Second Circuit and steal data from your employer to commit identity theft or to provide it to a competitor, you cannot be prosecuted by the Department of Justice or sued by your employer under the CFAA.
A recent ruling shows that plaintiffs must act fast when using a federal criminal statute for a civil suit.
The U.S. Court of Appeals for the Second Circuit in August addressed the proper application of the statute of limitations to a civil action—in the context of allegations of malicious statements made on the Internet over a broken romance and sexual misconduct—brought under the federal computer crime statute, the Computer Fraud and Abuse Act (CFAA). The case was Sewell v. Bernardin.
The recent decision in Allied Portables v. Youmans from the U.S. District Court for the Middle District of Florida underscores the need for businesses to establish explicit, well-advertised written policies identifying the scope of permissible employee access to company computers. Absent such policies, employers may be precluded from using the civil remedy in the federal computer crime statute, the Computer Fraud and Abuse Act, to sue employees who steal or destroy data from a company computers.
Allied properly recognized that for a CFAA claim to succeed, the plaintiff employer must be able to show the critical element that the defendant employee accessed a company computer by exceeding the authorized access to the computer.
On January 2015, the Obama administration announced a series of proposals to strengthen the country’s response to cyberattacks including, most notably, specific amendments to the federal computer crime statute, the Computer Fraud and Abuse Act (CFAA). These changes are not only significant to the cyber crime-fighting efforts of federal prosecutors, but also to private companies. This is because the CFAA allows companies victimized by violations of the statute to bring civil actions against the perpetrators. 18 U.S.C. 1030(g). The CFAA, among other things, makes it a crime when an individual “accesses” a computer “without authorization or exceeds authorized access” to steal data.
A number of class actions have recently been filed in federal district courts, predicated, in part, on alleged violations of the federal computer crime statute, the Computer Fraud and Abuse Act, complaining of tracking software placed on iPhone and Android devices and unwanted text messages. Decisions in these cases have implications for filing a valid CFAA civil action.
Although headlines have focused on foreign cyberattacks, plenty are U.S.-based—and can be remedied. Over the past year the national press has repeatedly reported on the vulnerability of our intellectual property to nation-state hackers like China, which have reportedly accessed and stolen highly confidential data by entering computer systems through public websites. Lost in the headlines… Read More
At issue is whether the Computer Fraud and Abuse Act applies to data theft by employees; the circuits are split. BY Nick Akerman On July 26, the U.S. Court of Appeals for the Fourth Circuit became the first circuit to adopt the Ninth Circuit’s holding in U.S. v. Nosal, 676 F.3d 854 (9th Cir. 2012),… Read More
Yesterday the 9th Circuit Court of Appeals issued an opinion holding that limiting an employee’s access to the company computers solely for business purposes, i.e. not stealing the data for a competitor, cannot be the predicate for a violation of the federal computer crime statute, the Computer Fraud and Abuse Act (“CFAA”), Title 18, U.S. C. § 1030. U.S. v. Nosal, 2012 WL 1176119 (9th Cir. April 10, 2012). The CFAA makes it a crime in various instances to access a computer “without authorization” or to have “exceeded authorized access” to obtain information from the computer and permits those, including companies, who are victims of violations of the statute to bring a civil action against the perpetrators. Acknowledging that its decision conflicts with the 5th, 7th and 11th Circuits, there is a good chance the Supreme Court will have the final say on this issue if the Department of Justice decides to appeal. As the dissent pointed out, this decision is counter to the common sense notion that a “bank teller is entitled to access a bank’s money for legitimate purposes, but not to take the bank’s money for himself.”
Have your client companies’ policies kept
pace with changes in the law affecting
computer technology? New statutes and court
decisions relating to computer technology
affect every business. Many companies
overlook opportunities to respond to these
new laws by adopting robust policies to
take advantage of the protections they
afford and to minimize the risks they pose.
This article will review three critical areas
of computer technology that should be
addressed by company policies: theft of data,
social networking and cloud computing.
How do semi-nude photos, suicide and a possible decision by the US Supreme Court relate to a Nebraska decision handed down last month on the Computer Fraud and Abuse Act (“CFAA”)?