Capitol Audio Access, Inc. v. Umemoto, 2013 WL 5425324 (E.D. Cal. Sept. 27, 2013)

Capitol Audio Access, Inc. v. Umemoto, 2013 WL 5425324 (E.D. Cal. Sept. 27, 2013)

Plaintiff owned an online service that published daily reports of information and had an archive of past issues. The service was passcode-protected and only available to subscribers who paid a subscription fee based on the number of individuals who had access to the service. Sharing of login credentials was explicitly prohibited. Defendanthad a single-user subscription and shared it with and distributed it to approximately 100 people. Premised on this conduct, plaintiff sued defendant for violating the Computer Fraud and Abuse Act.

Defendant moved to dismiss arguing plaintiff had not adequately pleaded “damage” or “loss.” Plaintiff argued that (1) it satisfied “damage” because the disclosure of its information constituted an impairment of the integrity of data, and (2) it satisfied “loss” because the license agreements that were evaded were valued at more than $5,000 per year.

The term “damage” means any impairment to the integrity or availability of data, a program, a system, or information and the term “loss” means any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service. Plaintiff did not sufficiently allege either damage or a loss because of interruption of service; the CFAA claim was dismissed.