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Animators at Law, Inc. v. Capital Legal Solutions, 10cv1342 (E.D. Va.; May 10, 2011)

Animators at Law, Inc. v. Capital Legal Solutions, 10cv1342 (E.D. Va.; May 10, 2011)

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Court finds that bartered-for services can go towards satisfying the $5000 loss threshold under the Computer Fraud and Abuse Act.
Court finds that bartered-for services can go towards satisfying the $5000 loss threshold under the Computer Fraud and Abuse Act.

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Published by: Venkat Balasubramani on Jun 14, 2011
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[p
fi
i!
~W~^
IN
THE
UNITED
STATESDISTRICT
COURT
jf
i
FOR
THEEASTERN
DISTRICTOF
VIRGINIA
Alexandria
Division
ANIMATORS
AT
LAW,
INC.,
Plaintiff,
CAPITAL
LEGAL
SOLUTIONS,
LLC,
et
al.,
Defendants.
ORDER
At
issue
in
thisComputer
Fraud
and
AbuseAct
("CFAA")1
action
is
whether
defendants
are
entitled
to
partial
summaryjudgment2withrespect
to
plaintiffs
CFAA
claim
onthe
ground
thatplaintiffhasfailedtodemonstratetherequisitejurisdictional"loss"
of
$5,000ormore,as
requiredbythestatute.
See
18U.S.C.§1030(c)(4)(A)(i)(I).
Forthereasonsthatfollow,defendants'motionforpartialsummaryjudgmentmustbe
denied.
See
18U.S.C.
§1030.
Case
No.
I:10cvl341
MAY
I0
Cii.K;.;;'<:.--'"~;7
2Plaintiffs
complaintasserts
thirteen
claims
for
relief,
all
butone
of
which
are
state
law
claims.
Becausethepartiesarenotdiverse,plaintiffassertsfederaljurisdictionbasedonaclaimbrought
undertheComputerFraudandAbuseAct("CFAA"),18U.S.C.§1030.Defendantsmovedto
dismissthecomplaint,contendingthatplaintiffsCFAAclaimfailedwithrespecttothejurisdictionallossrequirement,andthattheremainingstatelawclaimsshouldthenbedismissed
onjurisdictionalgrounds.
SeeYashenkov.Harrah'sNCCasinoCo.,LLC,
446F.3d541,553
n.4
(4th
Cir.
2006)("Once
adistrict
courthasdismissed
thefederal
claims
inanaction,it
maintains'widediscretion'todismissthesupplementalstatelawclaimsoverwhichitproperlyhassupplementaljurisdiction.")(citationomitted).Themotionwasdeniedbecauseplaintiffs
complaintwassufficienttostateaCFAAclaim,butthepartieswerepermittedlimiteddiscovery
ontheissueofthejurisdictionallossrequirementtoallowconsiderationofthis
pivotal
issueona
morecompleterecord.
i:'.i
*U
Case 1:10-cv-01341-TSE -TCB Document 68 Filed 05/10/11 Page 1 of 15 PageID# 860
 
I.3
AnimatorsatLaw,Inc.("Animators"),aVirginiacorporationprovidinglitigationsupport
servicesingraphicsandtechnology,broughtthisactionagainstthreedefendants:(i)Capital
LegalSolutions,LLC("CLS"),aVirginialimitedliabilitycompanyalsoengagedinlitigation
supportservices;andtwoindividualsformerlyemployedbyAnimatorsandcurrentlyemployed
byCLS:(ii)AprilTishler,and(iii)WilliamYarnoff.Inessence,Animatorsallegesthatbeginninginearly2010,CLSconspiredwithTishlerandYarnoff,whowerethenemployedbyAnimators,toleaveAnimators'employmenttobecomeCLSemployees,andtotakewiththemconfidentialandproprietaryinformationaboutAnimators'services,projects,andclients.
Tishlerand
Yarnoff
abruptlyleftAnimators'employmentto
join
CLSonMarch
9,2010.
OnMarch17,KenLopez,Animators'president,noticedthatanAnimatorslaptopcontaining
salesinformationwasmissing.ThelaptophadbeenusedpreviouslybyTishler,andafter
emailingTishler,LopezlearnedthatthelaptophadbeenretainedbyTishleroranotherformer
AnimatorsemployeeworkingatCLS.BecausethelaptopwasbelievedtocontainAnimators'
confidentialfiles,thediscoverythatithadbeeninthepossession
of
someoneatCLSledLopez
tosuspectthatTishler,Yarnoff,orothersatCLSmayhaveaccessedthefilesonthecomputer
without
authorization.4
Thus,
Lopez
initiated
an
investigationconcerning
whetherdefendants
3
Allfacts
recited
hereare
undisputed
unless
otherwisestated,
and
where
any
disputes
of
factare
noted,theanalysisproceedsbyassumingtheversion
of
thedisputemostfavorabletothenon-movant—inthiscaseAnimators.
SeeSapphireDev.,
LLC
v.
Span
USA,
Inc.,
120Fed.Appx.
466,470
(4thCir.2005).Specifically,whiledefendantsdisputethattheyviolatedtheCFAA,
theyconcedethatfor
the
purposes
of
summaryjudgment,
itisappropriatetotake
Animators'
version
of
theunauthorizedaccess
astrue.
Thus,Animators'version
of
the
events,including
the
allegedunauthorizedaccess,isreflectedinthefactualrecitationhere.
4
The
parties
do
not
disputethat
any
access
to
Animators'confidential
files
by
Tishler,
Yarnoff,
oranyotherformerAnimatorsemployeesafterleavingAnimatorswouldconstituteunauthorized
access.
Case 1:10-cv-01341-TSE -TCB Document 68 Filed 05/10/11 Page 2 of 15 PageID# 861
 
copied,deleted,orotherwisemisusedAnimators'confidentialinformationafterleaving
Animators'employment.
Lopez,suspectingthatanunauthorizedintrusionhadoccurred,directedthatthelaptopbe
deliveredtoIntelligentDiscoverySolutions,Inc.("IDS")forforensicanalysis.Lopezalso
suspectedthatTishlerandYarnoffhasconspiredwithCLStostealconfidentialinformationfrom
Animators,andthusrequestedIDStoanalyzeitscomputersystem.IDSconductedan
examination
of
the
laptop
aswellas
three
other
items,namely
two
"spare
bundle
images"5and
a
harddrivefromanAppleiMaccomputer,butonlytheinvestigation
of
thelaptopwasdirectly
relatedtotheunauthorizedcomputeraccessbyTishlerandYarnoff.IDSwas"taskedwith
tryingtoidentify[any]evidencerelatedtothetakinganddeletion
of
AnimatorsatLaw
proprietary
or
confidential
information."
See
Def.
Ex.
3,
PL000102.6
IDS's
"Preliminary
InstigativeReport"concerningitsexaminationindicatedthatafterLopezinquiredwithTishleraboutthemissinglaptopandbeforethelaptop'sreturntoAnimators,approximately800files
andfoldersweredeletedfromthelaptop.
See
Def.Ex.3,PL000102-21.AccordingtoLopez,at
least
twelve
of
the
files
contained
confidential
Animators
information.
ThepartiesdisputewhetherAnimatorsincurredanyactualcostsforIDS'services,and
if
so,whatcostscanbespecificallyattributedtothelaptopanalysis.Theengagementletterfrom
IDStoAnimatorsprovides,inpertinentpart,asfollows:[Animators]shallcompensateIDSforservicesprovided,whichshallinclude
Consultant'sfees,supportserviceshourlyfees,computercharges,and
reimbursablecostsandexpenses.Consultant'shourlyfeeis$00.00.IDS'current
5
Although
the
record
is
not
especially
clear
on
thispoint,
it
appearsthat
thesparebundleimages
appearcontainbackupfilesfromAnimators'computersystems.
6
In
lieu
of
pagenumbers,
defendants'
summary
judgment
exhibitscontain
onlyBatesnumbers,
suchas"PL000102,"TheseBatesnumbersareincludedwhereapplicableforreference
purposes.
Case 1:10-cv-01341-TSE -TCB Document 68 Filed 05/10/11 Page 3 of 15 PageID# 862

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