Beckett Media recently filed two cases in the Northern District of Texas that allege violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (the CFAA). Just a few months ago I blogged about how Texas is a favorable jurisdiction for plaintiffs to bring CFAA claims (Yes, Texas is a good state for plaintiffs to bring CFAA claims); how do you think these CFAA claims will fare?
The cases are Beckett Media, LLC v. Derek Miller d/b/a Miller Cards, 3:14-cv-01512-D, N.D. Tex. (Complaint filed Apr. 24, 2014), and Beckett Media, LLC v. Custom Plush Productions, Inc. d/b/a CPP, Inc. d/b/a The Card Collector, 3:14-cv-01511-M, N.D. Tex. (Complaint filed Apr. 24, 2014).
The CFAA Allegations
Wrongful Access — Website Scraping
The allegations in each of the cases are substantially the same and the primary allegations upon which the CFAA claims are premised are that the defendants Miller Cards and The Card Collector used “data scraping tools to obtain Beckett’s copyrightable content (the checklists and pricing data from http://www.beckett.com” which defendants then give away on their websites to drive traffic to those sites. (Miller Compl. ¶¶ 15-16; Custom Plush Compl. ¶¶ 14-15)
So far, so good, right? Under the Intended Use Theory Beckett Media may be ok for the access prong for the CFAA, but as we have learned recently, even though the access issue is what garners most of the attention for the Computer Fraud and Abuse Act, it is not the only issue that must be considered.
The Loss
There is this little thing that civil CFAA trial lawyers must deal with that is called the jurisdictional threshold “loss” that must also be considered (see Will Sprint’s Multiple Computer Fraud and Abuse Act Lawsuits Highlight the District Court Split on Loss Jurisprudence?). I have written extensively about the loss issue and have even explained why I think one of the cases that addressed this issue in the Northern District of Texas got it wrong (New “Employment” Computer Fraud and Abuse Act case … but with a twist!). But enough about what I think — this is about what you, the faithful reader of this blog and student of the CFAA think!!!
The Test
In each case, Beckett Media pleads the following loss allegations:
Miller Case
- “Beckett provides access to this data for a fee, and there is a market for licenses to access and use checklists and pricing data. Defendant’s actions have caused Beckett to suffer damages and lost profits in excess of $5,000.00.” (Miller Compl. ¶ 15)
- “Defendant’s actions have caused Beckett to be damaged in an amount in excess of $5,000.00, which includes amounts incurred in responding to and prosecuting Defendant’s conduct, and such damages are within the jurisdictional limits of this Court.” (Miller Compl. ¶ 42)
Custom Plush Case
- “Beckett provides access to this data for a fee, and there is a market for licenses to access and use checklists and pricing data. Defendant’s actions have caused Beckett to suffer damages and lost profits in excess of $5,000.00.” (Custom Plush Compl. ¶ 15)
- “Defendant’s actions have caused Beckett to be damaged in an amount in excess of $5,000.00, which includes amounts incurred in responding to and prosecuting Defendant’s conduct, and such damages are within the jurisdictional limits of this Court.” (Custom Plush Compl. ¶ 42)
Do you believe these allegations, as pleaded here, would be sufficient to survive a Motion to Dismiss the CFAA claim in the Northern District of Texas?
Do you believe the allegations should be sufficient?
Please explain the rationale for your answer (I’ve always wanted to say that!).
About the author
Shawn Tuma is a lawyer who is experienced in representing and advising clients on digital business risk which includes complex digital information law and intellectual property issues. This includes things such as trade secrets litigation and misappropriation of trade secrets (under common law and the Texas Uniform Trade Secrets Act), unfair competition, and cyber crimes such as the Computer Fraud and Abuse Act; helping companies with data security issues from assessing their data security strengths and vulnerabilities, helping them implement policies and procedures for better securing their data, preparing data breach incident response plans, leading them through responses to a data breach, and litigating disputes that have arisen from data breaches. Shawn is a partner at BrittonTuma, a boutique business law firm with offices near the border of Frisco and Plano, Texas which is located minutes from the District Courts of Collin County, Texas and the Plano Court of the United States District Court, Eastern District of Texas. He represents clients in lawsuits across the Dallas / Fort Worth Metroplex including state and federal courts in Collin County, Denton County, Dallas County, and Tarrant County, which are all courts in which he regularly handles cases (as well as throughout the nation pro hac vice). Tuma regularly serves as a consultant to other lawyers on issues within his area of expertise and also serves as local counsel for attorneys with cases in the District Courts of Collin County, Texas, the United States District Court, Eastern District of Texas, and the United States District Court, Northern District of Texas.
