Plaintiff’s CFAA Claim Dismissed Because of Simple Pleading Error

This blog is full of posts about the Computer Fraud and Abuse Act‘s requirement that, for a civil claim, the claimant must plead a $5,000 loss. Click here to see. One of the operative words in that sentence is plead — not argue — but plead! This means it must be in your pleading which is either the Complaint in Federal Court or the Petition in State Court (Texas, anyway).

Unfortunately for the Plaintiff in Sharma v. Howard County, 2013 WL 530948 (D. Md. Feb. 12, 2013), they apparently simply forgot to include that $5,000 loss allegation in the pleading. The Plaintiff brought the CFAA claim in the Original Complaint and then the Defendant filed a Motion to Dismiss on the basis of a failure to plead the requisite $5,000 loss. The Plaintiff then filed a Response to Motion to Dismiss and Brief in Support as well as an Amended Complaint. While the Court implies that Plaintiff did an adequate job of arguing the $5,000 loss in its Brief, apparently the Plaintiff (i.e., Plaintiff’s attorney) forgot to include the substance of that argument in the Amended Complaint and, therefore, the Court dismissed the CFAA claim:

Plaintiff asserts in his brief that he incurred costs as a result of his counsel’s investigation of the alleged CFAA violation. But the amended complaint does not allege that Plaintiff incurred costs as a result of this investigation or that those costs aggregated to at least $5,000. Therefore, Plaintiff’s CFAA claim must be dismissed.

While this result is certainly unfortunate for the Plaintiff, it is worth noting that courts in general have not decided on a clear-cut rule as to whether the attorneys’ fees associated with investigating a Computer Fraud and Abuse Act violation are calculated in the $5,000 loss. This Court seems to side with those that do include that cost as part of the “loss”.

Now you have one more good reason why, if you suspect you or your company may be the victim of a CFAA violation, you need to contact a qualified attorney and have them lead the investigation. If you have any questions or would like to talk computer fraud, data security or privacy, please feel free to give me a call (469.635.1335) or email me (stuma@brittontuma.com).

District Court of Colorado Dismisses CFAA Claim for Failing to Adequately Plead Cause of Action and Loss (shawnetuma.com)
Two Year Statute of Limitations of Computer Fraud and Abuse Act Accrued When Plaintiff “Suspected” Wrongdoing (shawnetuma.com)
Court Implies Unknown “Backdoor Node” On Software Licensee’s Server To Monitor Infringement May Violate CFAA (shawnetuma.com)
Another CFAA Case Dismissed Because Plaintiff Only Recited Elements in Complaint (shawnetuma.com)

Published by Shawn E. Tuma

Shawn Tuma is an attorney who is internationally recognized in cybersecurity, computer fraud and data privacy law, areas in which he has practiced for nearly two decades. He is a Partner at Spencer Fane, LLP where he regularly serves as outside cybersecurity and privacy counsel to a wide range of companies from small to midsized businesses to Fortune 100 enterprises. You can reach Shawn by telephone at 972.324.0317 or email him at stuma@spencerfane.com. View more posts