Beta Technology, Inc. v. Meyers, 2013 WL 5602930 (S.D. Tx. Oct. 10, 2013) (order denying motion to dismiss)

Beta Technology, Inc. v. Meyers, 2013 WL 5602930 (S.D. Tx. Oct. 10, 2013) (order denying motion to dismiss)

Denying the motion to dismiss, the court found Plaintiff’s Complaint adequately pleaded (1) both access and transmission violations of the Computer Fraud and Abuse Act, and (2) the requisite $5,000 loss.

Defendant Meyers was an employee of Plaintiff working under a non-compete agreement. Plaintiff provided him with a computer and access to its computer system, and had a computer use policy deeming it “inappropriate conduct” to use Plaintiff’s computer system to engage in private or personal business activities, to make unauthorized copies of data, or to delete data. Defendant Meyers resigned his employment to form a competing company and Plaintiff alleges that “[b]efore or at the time of his resignation,” he (1) downloaded confidential and proprietary information to use for the competitor and (2) deleted all stored information from his computer.

Access / Transmission

The Court followed the Intended-Use Theory of access set forth by the Fifth Circuit in United States v. John. “Like the defendant in John, Meyers’s authorization to use Plaintiff’s computer system and the data contained therein was circumscribed by company policy.” Plaintiff’s allegations where sufficient to allege Meyers exceeded authorized access by alleging “Meyers violated this policy by making unauthorized copies of Plaintiff’s confidential information and then deleting stored information from the computer.” Any such activities done after he resigned would have been without authorization.

Loss

Complaint stating that Plaintiff “incurred, and continues to incur, significant expenses in assessing and recovering the data deleted from the computer,” and that it has resulted in a loss of more than $5,000 in any one-year period was sufficient to meet the jurisdictional loss requirement for a civil claim under §1030(c)(4)(A)(i)(I).

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