Does the Computer Fraud Act Apply to ‘Dumbphones’?

While this Court does not disagree that unwanted text messages, like spam e-mail, are an annoyance, whether receipts of such messages can establish a civil action under the CFAA is, of course, a different question.

Czech v. Wall Street on Demand, Inc. 674 F.Supp. 1102, 1106 (N.D.Minn. 2009).

Anti-spam (e-mail and text) lawsuits and legislation are legion: a flurry of Federal and state laws govern junk e-mails and texts.  This post briefly discusses one case which examined whether sending unwanted texts can subject the texter to Federal Computer Fraud liability. 

In Czech v. Wall Street on Demand, 674 F.Supp. 1102 (N.D. Minn. 2009) a Minnesota plaintiff (representing a proposed class of spam texts recipients) was so fed up with unwanted texts that she literally made a Federal case out of it.  She sued in Minn. District Court under the Computer Fraud and Abuse Act, 18 U.S.C. s. 1030 et seq. (CFAA) after receiving unsolicited texts from an online trading company that mass-texted financial information to phone numbers in its database.  The Court granted the defendant’s 12(b)(6) motion to dismiss the Complaint. 

The basis for the court’s dismissal was that the plaintiff – who owned a cellphone which only made and received calls and texts (colloquially, a “dumbphone”)  – was unable to show (1) that defendant obtained information from plaintiff’s phone; or (2) that defendants intentionally tried to damage plaintiff’s phone; or (3) any statutory “damage” or “loss” due to the unwanted texts.  Id.  As noted in an earlier post, damage and loss are terms of art under the CFAA: damage denotes physical damage to a computer or data; while loss refers to the monetary expense incurred in ameliorating a CFAA violation.  See http://paulporvaznik.com/eagle-i-hijacking-a-linkedin-account-and-the-computer-fraud-act/803 (discussion of CFAA damage and loss under 18 U.S.C. s. 1030(e)).

While the Czech Court ultimately dismissed the plaintiff’s CFAA claims, it also applied the CFAA’s expansive definition of “computer” by acknowledging that the plaintiff’s no-frills cell phone qualified as a “computer” under the CFAA.  674 F.Supp.2d at 1107 (“there is no dispute that [plaintiff’s] cell phone (as well as the various similar wireless devices used by the proposed class members) would constitute…a ‘computer’ as further defined in [the CFAA]).  The CFAA defines a computer as any high-speed data processing device performing logical, arithmetic and storage functions – but that is not a calculator or typewriter.  18 U.S.C. s. 1030(e)(1).  The 8th Circuit Court of Appeals also held that a cell phone that only made calls and texts qualified as a protected computer under the CFAA in a criminal case setting in  U.S. v. Kramer, 631 F.3d 900 (8th Cir. 2011)(defendant used cell phone to entice minor across state lines to engage in criminal sexual conduct).

Declining to extend the Act to unwanted texts, the Czech Court stated succinctly that unwanted texts may be annoying, but they do not give rise to CFAA civil liability: “An annoyance? Quite possibly.  The basis for a civil action under [the CFAA]?  The Court thinks not.”  674 F.Supp.2d at 1105.

Take-away: Czech provides a very detailed analysis of CFAA information (defendant obtained information from a protected computer) transmission (defendant transmitted a virus or worm that damaged plaintiff’s computer), and access (defendant accessed plaintiff’s computer and caused damage or loss to plaintiff)claims.  All three of these claims are predicate acts under CFA sections 1030(a)(2)(C), (a)(5)(A) and (a)(5)(C).  The Court describes the elements and the damage and loss requirements for each of the three claims.  The Court also engages in an intricate and interesting (at least I think so) discussion of the difference between obtaining information from a plaintiff’s website as opposed to a plaintiff’s cell number.  But for this post’s purposes, the case is representative of the CFAA’s expansive definition of a “protected computer” and shows that virtually any mechanical device, wired or not, will qualify for coverage under the statute.

Judgments By Confession: How to Open (Not Vacate) Them (IL Law)

confessional

The two key rules that govern challenging  a confessed judgment in Illinois are Supreme Court Rule 276 and  Code Section 2-1301 (735 ILCS 5/2-1301).  The latter provides that “any person for a debt bona fide due may confess judgment by himself or herself or attorney duly authorized, without process” and that the “application to confess judgment shall be made in the county in which the note or obligation was executed or in the county in which one or more of the defendants reside or in any county in which is located any property, real or personal, owned by any one or more of the defendants.”  735 ILCS 5/2-1301(c).

Confession of judgment provisions in consumer transactions are void.  A “consumer transaction” is a sale, lease, assignment, loan, or other disposition of an item of goods, services, or intangibles where the primary purpose is for personal, family, or household use.  Id.

Rule 276 provides that a motion to open a judgment by confession (“JBC”) shall be supported by (1) affidavit in the manner provided by Rule 191 for summary judgments, and be accompanied by a (2) verified answer the defendant proposes to file.

Rule 276 states that if the motion to open and supporting affidavit disclose a prima facie defense on the merits to all or part of plaintiff’s claim, the court shall set the motion for hearing. The plaintiff (the party opposing your motion to open the JBC) may file counter-affidavits.

Rule 276 continues: “If, at the hearing upon the motion, it appears that the defendant [the moving party] has a defense on the merits to the whole or a part of the plaintiff’s [the party that entered the JBC] claim and that he has been diligent in presenting his motion to open the judgment, the court shall sustain the motion either as to the whole of the judgment or as to any part thereof as to which a good defense has been shown, and the case shall thereafter proceed to trial upon the complaint, answer, and any further pleadings which are required or permitted”.  Ill. Sup. Ct. R. 276.

The defendant (or party opening a confessed judgment) can also assert counterclaims.  SCR 276.  Even if the moving party fails to establish a defense, he can still proceed on a counterclaim if the court finds that the moving party pled facts to support a counterclaim.

The burden on a party moving to open a JBC is lighter than on a summary judgment or  Section 2-619 motion to dismiss.  In fact, all the trial court does is determine whether the moving party’s motion and affidavits disclose a prima facie defense.  Kim v. Kim, 247 Ill.App.3d 910, 913-14 (2nd Dist. 1993).

On a motion to open a JBC, the court doesn’t look into disputed facts.  Instead, the court accepts as true all facts asserted by the moving party in his affidavits.

While a plaintiff (or party contesting the motion to open) may file counter-affidavits in opposition to a motion to open, the trial court may not try the merits of the case on the affidavits or counter-affidavits because this would encroach on the right to trial by jury.

A motion to open a confessed judgment is addressed to the sound discretion of the trial court and will not be overturned on review absent an abuse of discretion.

Take-aways: Rule 276 provides clear and simple requirements for a motion to open a JBC.  The moving party must attach a supporting affidavit and a proposed responsive pleading (which is verified).  The movant must also show meritorious defense and diligence in bringing the motion (similar to Section 2-1401 standards).

Once the JBC is opened, it proceeds like any other civil lawsuit, with motion practice, oral and written discovery and ultimately a trial.  I have to stress again that opening a JBC shouldn’t be a cause for too much (premature) celebration.  All it means is you can now defend a suit on the merits.  I say this because I have seen multiple instances where a defendant successfully opened a JBC, acted like he won the case (and taunted me too!), only to lose on a 2-619 motion or summary judgment motion a very short time later.

Can a LinkedIn Account Be Stolen (or Converted)?

Earlier I discussed the three claims on which plaintiff prevailed at trial (albeit with no damages) against her former employer, Edcomm.  For symmetry’s sake, I now summarize the five state law claims which defendant won. 

These claims are (1) identity theft, (2) conversion, (3) tortious interference with contract, (4) civil conspiracy, and (5) civil aiding and abetting.  In analyzing these claims, the Pa. district court assessed some creative attempts to adapt and expand common law tort rules to a modern-day computerized context. 

(1) Claim and Factual Basis: Identity Theft.  Edcomm used plaintiff’s “identifying information” (see 18 Pa. Cons. Stat. s. 4120(a)) without plaintiff’s permission when it hijacked her LinkedIn account and replaced plaintiff’s credentials with those of plaintiff’s successor (can you say “salt in the wound”?).

Ruling and Reasoning: Identity theft claim fails.  Plaintiff’s name was publicly available and never possessed by Edcomm.   Also, Edcomm inadvertently left plaintiff’s “honors and awards” on Morgan’s LinkedIn page. 

Plaintiff’s honors and awards are not sufficient identifying information such that someone who viewed Morgan’s page would think he was actually viewing plaintiff’s page.  In addition, because Edcomm didn’t purposefully leave plaintiff’s honors and awards on plaintiff’s former LinkedIn page, plaintiff couldn’t show that Edcomm used plaintiff’s information for an improper purpose.  * 9.

(2) Claim and Factual Basis: Conversion.  Edcomm effectively stole or “converted” plaintiff’s LinkedIn account – which is plaintiff’s property or chattel.

 Ruling and Reasoning: Conversion claim fails because a LinkedIn account is not the type of “tangible property” (touchable, feelable, palpable, e.g.) contemplated by a conversion suit. 

Software, domain names and satellite signals are intangible property not subject to conversion under Pennsylvania law.  A LinkedIn account is “an intangible right to access a specific page on a computer”; it is not palpable property that can be converted.  *9-10.

(3) Claim and Factual Basis: Tortious interference with contract.  Edcomm tortiously interfered with plaintiff’s contract with LinkedIn when Edcomm blocked plaintiff’s access from the page.

Ruling and Reasoning.  The claim fails.  Plaintiff definitely has a contract right in her LinkedIn account by virtue of the User Agreement and Edcomm definitely interfered with that contractual relationship. 

However, plaintiff regained control of her account within a month of being fired and she could not prove measurable monetary loss.  No damages = no tortious interference under Pa. law.

(4) Claim and Factual Basis: Civil Conspiracy.  Edcomm and individual employee defendants conspired to misappropriate and damage plaintiff’s LinkedIn account.

Ruling and Reasoning: Plaintiff fails to prove a civil conspiracy.  A corporate defendant and employees or agents of that corporation cannot conspire with each other under the intra-corporate conspiracy doctrine.  

Plaintiff didn’t show malice (a required conspiracy element under Pa. law): that defendants’ sole purpose was to injure plaintiff (as opposed to keeping what Edcomm believed to be company property).     *11.

(5) Claim and Factual Basis: Civil Aiding and Abetting. The individual Edcomm agents aided and abetted in Edcomm’s misappropriation of plaintiff’s identity.

Ruling and Reasoning: Judgment for defendant.  While plaintiff proved an actionable wrong: misappropriation of publicity, invasion of privacy and unauthorized use of name, plaintiff failed to show individual defendants’ “substantial assistance” in the wrongful conduct.  Since plaintiff did not provide the court with sufficient evidence of each individual’s actions, plaintiff’s civil aiding and abetting claim failed.

Parting Shots:

– Pirating a social media account is not conversion; since the account is an intangible right to access a computer page rather than tangible property;

– A civil conspiracy claim requires concerted activity by at least two or more persons, and that a corporation cannot, by definition, conspire with its own agents.