Computer Fraud and Abuse Act claim dismissed where plaintiff failed to adequately plead loss or damage

Cost of investigating scope of information loss was not a “damage assessment” as contemplated by the CFAA.

BrokenlaptopPlaintiff sued defendant (a former employee) under the Computer Fraud and Abuse Act (“CFAA”) alleging that defendant intentionally and without authorization accessed plaintiff’s computers, intranet, and email system and sent plaintiff’s confidential customer information to his personal email account. Defendant allegedly used this information when he went to work for a competitor. Plaintiff also alleged that defendant attempted to conceal his actions by deleting the outgoing messages from the work email account.

Defendant moved to dismiss for failure to state a claim. The court granted the motion as to the CFAA claim.

The court found that plaintiff did not (and could not) claim defendant’s conduct caused “damage” within the meaning of the CFAA, because plaintiff did not allege any data were lost or impaired.

On the question of “loss” under the CFAA, the court found that plaintiff failed to allege any facts connecting its purported loss to an interruption of service, loss of data, or even a suspected loss of service or data. Although plaintiff attributed certain losses to “damage assessment and mitigation,” the court found it clear from the complaint that plaintiff’s “damage assessment” efforts were aimed at determining the scope of information defendant emailed to himself and disclosed to his new employer. Plaintiff did not allege it ever lost access to any of the information contained in defendant’s emails, notwithstanding defendant’s attempt to conceal his conduct by deleting the emails.

The court observed:

To be sure, assessing the extent of information illegally copied by an employee is a prudent business decision. But the cost of such an investigation is not “reasonably incurred in responding to an alleged CFAA offense,” because the disclosure of trade secrets, unlike destruction of data, is not a CFAA offense.

Accordingly, in this situation, the costs of investigating defendant’s conduct were not “losses” compensable under the CFAA.

SBS Worldwide, Inc. v. Potts, 2014 WL 499001 (N.D.Ill. February 7, 2014)