Barter Services and Attorney Fees May Qualify As “Loss” Under Computer Fraud and Abuse Act

Cash payment not required! Bartered services, lost employee time, perhaps even fees for attorney investigating / overseeing investigation–all can satisfy the $5,000 mandatory “loss” required to bring a civil action under the Computer Fraud and Abuse Act.

This we can take from a recent case, Animators at Law, Inc. v. Capital Legal Solutions, LLC, Case No. 1:10cv1341 (E.D. Va. May 10, 2011), in which the Computer Fraud and Abuse Act (sometimes the “CFAA”) was again applied in the context of an employee taking confidential information from her former employer. The basic facts of Animators: On March 9, 2010 two employees abruptly quit their job to go work for a competitor of their former employer. A week later the former employer discovered missing a laptop containing confidential information that was used by one of the employees. Employer hired an attorney to oversee an investigation and, after regaining possession of the laptop, had a third party conduct a forensic investigation into how that laptop had been accessed and used during the interim period. The attorney was paid for his services, however, the forensics investigation was performed by a company that the employer had a “barter” relationship with and, despite the fact that the services were valued at far more than $5,000, there was no actual cash payment for the investigation.

Amimators at Law, Inc., the employer, filed a lawsuit for, among other things, violations of the Computer Fraud and Abuse Act, alleging that the former employee’s access of the laptop after her employment with Animators ended was an unauthorized access. The parties did not dispute that such an access was unauthorized. Rather, the defendants filed a motion for summary judgment on the ground that Animators had not satisfied the minimum $5,000 loss generally required in order to bring a civil claim under the CFAA. The court denied the motion for summary judgment finding there was a fact issue as to whether the loss requirement was satisfied for 3 general reasons:

  1. Obtaining services under a barter type relationship is a credit or trade basis that qualifies as a CFAA loss;
  2. The employer’s time spent responding to the unauthorized intrusion, though not precisely kept, was sufficiently documented by billing logs to permit it to qualify as a CFAA loss; and
  3. The fees for attorney who was retained to investigate the intrusion and oversee the investigation may be found by the jury to have been reasonably foreseeable and, therefore, may qualify as a CFAA loss.