Category Archives: Computer Crime

Computer Fraud and Abuse Act case against hard drive destroying director goes forward

Deloitte & Touche LLP v. Carlson, 2011 WL 2923865 (N.D. Ill. July 18, 2011)

Defendant had risen to the level of Director of a large consulting and professional services firm. (There is some irony here – this case involves the destruction of electronic data, and defendant had been in charge of the firm’s security and privacy practice.)

After defendant left the firm to join a competitor, he returned his work-issued laptop with the old hard drive having been replaced by a new blank one. Defendant had destroyed the old hard drive because it had personal data on it such as tax returns and account information.

The firm sued, putting forth a number of claims, including violation of the Computer Fraud and Abuse Act (CFAA). Defendant moved to dismiss for failure to state a claim upon which relief can be granted. The court denied the motion.

Defendant argued that the CFAA claim should fail because plaintiff had not adequately pled that the destruction of the hard drive was done “without authorization.” The court rejected this argument.

The court looked to Int’l Airport Centers LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006) for guidance on the question of whether defendant’s alleged conduct was “without authorization.” Int’l Airport Centers held that an employee acts without authorization as contemplated under the CFAA if he or she breaches a duty of loyalty to the employer prior to the alleged data destruction.

In this case, plaintiff alleged that defendant began soliciting another employee to leave before defendant left, and that defendant allegedly destroyed the data to cover his tracks. On these facts, the court found the “without authorization” element to be adequately pled.

Court upholds criminal intimidation conviction over threats to distribute sexually explicit photo

State v. Noll, 2011 WL 2418895 (Ind. App. June 14, 2011) (Not selected for publication)

Defendant used a sexually explicit photo of the victim in an attempt to gain leverage in an intra-family dispute. She handed an envelope containing the photo to the victim, and indicated she would begin distributing the photo if certain demands were not met.

Defendant was convicted of intimidation under Indiana law. She sought review of her conviction. On appeal, the court affirmed.

One of the arguments that defendant made on appeal was that there was no intimidation because distribution of the photo to persons such as the victim’s husband or co-workers would not subject her to hatred, contempt, disgrace or ridicule as required by the Indiana statute. Defendant pointed out that the victim had posted the sexually explicit photo of herself at issue on the web five years earlier. So in essence, defendant argued, further distribution would do the victim no harm.

The court rejected this argument, finding:

The fact that [victim] already publicized the material herself certainly merits consideration, but is not alone determinative because publicizing material to a particular audience does not necessarily mean that further, targeted, publication would not lead to hatred, contempt, disgrace, or ridicule. In other words, we consider [victim's] posting of these photographs online in the past as it might mitigate reputational consequences of [defendant] mailing the photographs to others. Although internet websites are of an unusually public and long-lasting nature, we also recognize that making an obscure set of photographs available online is qualitatively different in nature from directly mailing the same photographs as hard-copies addressed to a particular individual or company. [Victim's] husband or employer could have discovered [victim's] prior internet posting of the photographs, but a direct mailing is certain to reach them.

The court similarly rejected defendant’s argument that because the victim had posted the photo on the web before, she had no reasonable expectation of privacy in the photo and thus could not be the subject of intimidation. The court disagreed with the analogy to the Fourth Amendment expectation of privacy because in this case, the privacy interest was the victim’s, not the defendant’s. So use of such an analogy might “misdirect [the court] from the determinative issue of whether she would be exposed to reputational consequences.”

Violent posts on social media profile determined to be threats

This is a post by Jonathan Rogers. Jon is a licensed attorney in California, with a focus on technology and entertainment law. You can reach him by email at jon@jonarogers.com or follow him on Twitter at @jonarogers.

Holcomb v. Com., — S.E.2d —, 2011 WL 2183100 (Va.App., Jun 07, 2011)

Appellant challenged his conviction over posts he made to MySpace on his profile page, arguing that they did not constitute the knowing communications of a threat. He argued that MySpace posts were not the type of communication contemplated by the statute, and his postings did not constitute a threat. Appellant posted violent original lyrics which were clearly about his child’s mother.

Appellant had been convicted under a provision of Virginia law that provides:

Code § 18.2–60(A)(1):

Any person who knowingly communicates, in a writing, including an electronically transmitted communication producing a visual or electronic message, a threat to kill or do bodily injury to a person, regarding that person or any member of his family, and the threat places such person in reasonable apprehension of death or bodily injury to himself or his family member, is guilty of a Class 6 felony.

Appellant argued that he did not knowingly communicate the posts within the meaning of the statute because he posted them through his profile, which was available for anyone to view, as opposed to a communication aimed directly at the victim. The court found that there was no requirement that a threat be communicated directly to the intended victim. It instead focused on the fact that an “electronically transmitted communication” produced a “visual or electronic message” that could be viewed by anyone accessing the MySpace profile. It was enough that the victim was able to identify herself based on the references in his posts and that the appellant knew the victim had access to the profile. In fact, the court found, he knew she had viewed it previously.

Appellant’s second argument was that the posts were not threats under the statute. He argued they were lyrics which he had a history of writing and posting on his profile. The court disagreed, finding that because of specific references to the victim, and the unusual subject matter of the lyrics, the post contained statements that would place the victim in “reasonable apprehension of death or bodily injury.” The court pointed to actions taken by the victim, including moving in with her parents, and her testimony that she felt scared after seeing the postings.

The court found the online postings to MySpace where threats which placed apprehension in the victim. So the court upheld the convictions.

CFAA violation where employee’s access to work computer violated fiduciary duty to employer

Plaintiff former employer sued defendant former employee for violation of the Computer Fraud and Abuse Act, 18 U.S.C. 1030, alleging that defendant, while still in the employ of plaintiff, accessed confidential business information and destroyed other important data. Defendant moved to dismiss the CFAA claim. The court denied the motion.

Defendant had argued that the complaint failed to establish that access to the work computer was had without authorization. He assserted that plaintiff did not allege that at any time while defendant was employed by plaintiff his access to his work-issued computer was restricted, or that plaintiff ever told him that he was no longer permitted to access the computer.

But the plaintiff had alleged that defendant’s access violated the fiduciary duty defendant owed. The court held that under Int’l Airport Ctr., L.L.C. v. Citrin, 440 F.3d 418, 420–21 (7th Cir.2006), allegations of a breach of duty are enough to properly allege that defendant lost his authorization to access his company computer.

Compare this holding (and Citrin) with the Ninth Circuit’s holding in LVRC Holdings v. Brekka.

Employee did not violate Computer Fraud and Abuse Act by checking Facebook and personal email at work

Lee v. PMSI, Inc., 2011 WL 1742028 (M.D.Fla., May 6, 2011)

Former employee sued the company she used to work for alleging pregnancy discrimination. The company countersued under the Computer Fraud and Abuse Act (“CFAA”) alleging that the former employee violated the CFAA by using her work computer to access Facebook and check her personal email. She moved to dismiss the counterclaim, and the court granted the motion. The court found that the company failed to allege that its computer system was damaged by plaintiff’s internet usage, and plaintiff was alleged only to have accessed her own information, not that of the employer.

Court says law firm did not eavesdrop on employee phone calls

Bowden v. Kirkland & Ellis, 2011 WL 1211555 (7th Cir. April 1, 2011)

Two former employees of a law firm sued the firm for violation of the Electronic Communications Privacy Act, 18 USC 2510 et seq. and for violation of the Illinois Eavesdropping Act, 720 ILCS 5/14-2. The district court granted summary judgment in favor of the law firm. The former employees sought review with the Seventh Circuit. On appeal, the court affirmed the grant of summary judgment.

The court held that the former employees’ evidence of eavesdropping raised no more than a “theoretical possibility” of a violation. Even one of the strongest experts in the case triple hedged his testimony, saying the records “could indicate the potential that interception may have occurred.” So the grant of summary judgment was proper.

The plaintiffs had also raised an electronic discovery issue, namely a claim that the law firm spoliated evidence by destroying a server that contained phone records relevant to the case. The court rejected that argument, finding no credible evidence that the destruction was undertaken in bad faith.

Do certain mobile apps violate the Computer Fraud and Abuse Act?

[This is a guest post by attorney Caroline Belich. Caroline is a Chicago native, former Michigan State volleyball player, and recent admitee to the California bar with particular interest in the First Amendment.]

According to the Wall Street Journal and other sources, federal prosecutors in New Jersey are investigating whether certain mobile applications for smartphones have illegally obtained or transmitted information about their users. Part of the criminal investigation is to determine whether these app makers made appropriate disclosures to users about how and why their personal information is being used. The app makers subpoenaed include the popular online music service Pandora.

Examples of information disclosed by these app makers may include a user’s age, gender, location, and also unique identifiers for the phone. The information may then passed on to third parties and advertising networks. The problem is that users may be unaware that their information is being accessed by a smartphone app because a maker failed to notify them.

As a result, this failure to notify may violate the Computer Fraud and Abuse Act (18 USC 1030). The CFAA is a federal statute that is often used against hackers. Applying this rationale here, federal prosecutors may argue that the app makers essentially hacked users cellphones.

However, some legal experts believe that criminal charges against the app makers are unlikely. Supporting this belief is the fact that many criminal charges against companies result in non-prosecution or deferred prosecution agreements in exchange for concessions of wrongdoing or monetary payments.

But while criminal charges are doubtful, civil lawsuits by users and causes of action brought by the Federal Trade Commission (FTC) may not be. First, consumers may sue app makers for failure to notify under privacy rights claims. Second, the FTC could allege unfair and deceptive trade practices by makers for failure to inform users how their personal information is being employed. Recently, Google settled with the FTC regarding its social network, Buzz, where allegations were made about violations of users’ privacy.

In light of the potential for privacy rights violations and deceptive trade practices, the FTC has advocated a “Do Not Track” option for web browsers and cellphone users, similar to the “Do Not Call” list for telemarketing. But app makers strongly oppose this idea, of course, for various reason. First, it could obstruct their ability to collect data about their users’ utilization of their product. Second, the option could frustrate financial opportunities with third parties seeking the invaluable consumer statistics. And the third justification is best depicted by Facebook’s privacy policy – while a user may be giving away his own information, he’s not giving away that of his friends… as long as his friends haven’t shared the info with “everyone.”

So even if these criminal investigations do not come to fruition, at least the possibility is making the public aware of their rights involving smartphone products so that industry standards may be created or laws requiring notification may be made.

Sexting minor’s lawsuit against website moves forward despite her violation of federal law

Doe v. Peterson, 2011 WL 1120172 (E.D.Mich. March 24, 2011)

When plaintiff Jane Doe was seventeen years old, she took some nude photos of herself and sent them over the internet to her boyfriend. Somehow the photos ended up on an adult website owned by defendants. Doe brought a civil cause of action against defendants for violation of the federal child pornography laws and for intrusion upon seclusion, public disclosure of private facts, intentional infliction of emotional distress, and negligence.

The defendants pled an interesting affirmative defense to Doe’s claims — in pari delicto. A plaintiff’s actions that are found to be in pari delicto are just as bad or worse than what the plaintiff is suing over, so in cases like that the court will not award relief. Doe moved to strike this affirmative defense. The court granted the motion.

Although the court found that “it seems clear that [Doe was] guilty of violating federal laws prohibiting the production and distribution of child pornography,” it held that as a matter of law the doctrine of in pari delicto was not available to the defendants as an affirmative defense.

The court refused to allow “broad common-law barriers to relief where a private suit serv[ed] important public purposes.” Doe was a member of the class sought to be protected by the statute she had violated, and was not equally culpable as defendants allegedly were in permitting the distribution of the images. In this respect, it was not clear that Doe was of greater or equal fault than defendants, so the in pari delicto defense did not apply.

School didn’t violate eighth grade hacker’s due process rights by suspending him over denial of service attack

Harris ex rel. Harris v. Pontotoc County School Dist., — F.3d —, 2011 WL 814972 (5th Cir., March 10, 2011)

Back in 2008, when Derek Harris was in eighth grade, he got suspended and had to attend “alternative school” for violating the school district’s technology use policy. School officials accused Derek of possessing a keylogger program, of launching a denial of service attack on the school’s network (from the computer his mom used in her job as secretary for the elementary school’s principal), and bypassing security to access the DOS prompt. (Kudos to the kid for getting in trouble for two kinds of “D-O-S” nefariousness!)

Derek’s parents, on his behalf, sued the school in federal court, arguing that the suspension and transfer to alternative school violated his due process rights under the Fourteenth Amendment to the Constitution. The school district moved for summary judgment. The court granted the motion.

It quickly dispensed with the argument that sending Derek to an alternative school violated his rights. It observed that a school district may not withdraw the right to a public education on grounds of misconduct absent fundamentally fair procedures to determine whether the misconduct has occurred. Since transferring him to an alternative education program did not deny access to public education, it did not violate his Fourteenth Amendment rights.

The court likewise held that the suspension was proper and did not violate Derek’s constitutional interests. It reviewed the suspension in light of the 1975 Supreme Court case of Goss v. Lopez, which requires that a student being suspended be given oral or written notice of the charges against him and, if he denies them, an explanation of the evidence the authorities have and an opportunity to present his side of the story.

In this case, the court found that Derek was notified of the charges on the day he was suspended. He had numerous opportunities to meet with school officials, to hear some of the charges, and to explain and respond. The processes he was afforded, the court found, were sufficient to satisfy the Fourteenth Amendment.

Mom violated wiretap law by bugging daughter’s teddy bear to eavesdrop on dad

Lewton v. Divingnzzo, 2011 WL 692292 (D.Neb. Feb. 18, 2011)

Defendant thought her ex-husband was abusing their daughter during visitations. To prove these allegations in the custody case, defendant sewed an electronic recording device into the little girl’s favorite teddy bear. After the daughter returned from visiting with her father, the mom would unstitch the teddy bear and download the recorded conversations onto her computer.

She tried using the transcribed recordings as evidence in the state court custody proceeding. But the judge would not let them into evidence because they violated Nebraska law. The father and others whose conversations were recorded via the teddy bear sued the mom under the federal Electronic Communications Privacy Act.

Both sides moved for summary judgment. The court ruled in favor of the father, finding that the surreptitious recording did not fit into any exception of the ECPA.

The ECPA provides a private right of action to any person whose wire, oral or electronic communication is intercepted, disclosed or intentionally used in violation of the ECPA. Looking to Eighth Circuit authority, the court observed that the ECPA prohibits all wiretapping that is not specifically exempted by the statute.

No doubt this was a tough case – a parent fearing for the safety of his or her child might have strong reasons to resort to eavesdropping to protect the child. But the court was hamstrung – “[w]hile the notion that a parent or guardian should be able to listen to a child’s conversations to protect the child from harm may have merit as a matter of policy, it is for Congress, not the courts, to alter the provisions of the statute.”

The court ordered the defendant and her father (who had transcribed the recordings) to pay $10,000 to each of the offended plaintiffs. The defendant’s lawyer who had distributed the recordings to the guardian ad litem and others was found to have violated the ECPA but was not ordered to pay any money damages.