Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-01174/USCOURTS-casd-3_11-cv-01174-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PLATINUM LOGISTICS,

Plaintiff,

CASE NO. 11-CV-1174-LAB-MDD

ORDER DISMISSING CASE FOR

LACK OF SUBJECT MATTER

JURISDICTION

vs.

MAINFREIGHT and MELISSA YSAIS,

Defendants.

The Court previously granted Defendants’ motion to dismiss without prejudice

because of a problem with Platinum Logistics’ claim against Ysais under the Computer

Fraud and Abuse Act. The problem was that the complaint didn’t effectively identify the

actual sections of the CFAA that Ysais has allegedly violated. Section 1030(a)(5)(C)

prohibits the access of a computer “without authorization,” while sections 1030(a)(2) and

(a)(4) prohibit both unauthorized access and exceeding access that is authorized. Citing the

Ninth Circuit’s decision in LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1131 (9th Cir.

2009), the Court explained that if Platinum Logistics has a CFAA claim against Ysais, it can’t

arise under section 1030(a)(5)(C): “Because Platinum Logistics concedes that Ysais had full

access, in the course of her employment, to its customer lists and rate sheets, it simply

cannot claim that she used a computer ‘without authorization’ and is liable under §

1030(a)(5)(C) of CFAA.” (Dkt. No. 9 at 2.)

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The Court gave Platinum Logistics leave to file an amended complaint that explicitly

alleged violations of sections 1030(a)(2) and (a)(4). Claims under these provisions, the

Court pointed out, could survive a motion to dismiss because at the time the Ninth Circuit

had held that “an employee ‘exceeds authorized access’ under § 1030 when he or she

violates the employer’s computer access restrictions—including use restrictions.” United

States v. Nosal, 642 F.3d 781, 785 (9th Cir. 2011), rev’d 2012 WL 1176119 at *8 (9th Cir.

Apr. 10, 2012) (en banc). If Platinum Logistics amended its complaint accordingly, the Court

said it would stay the case pending the Ninth Circuit’s rehearing of Nosal en banc. See 661

F.3d 1180 (9th Cir. 2011).

Curiously, Platinum Logistics filed an amended complaint, but without any

modification to its CFAA claim against Ysais. Still, it alleges that Ysais “accessed Platinum’s

computer containing its customer lists and other confidential material . . . without

authorization or in excess of the authorization granted” and it cites only section

1030(a)(5)(C), which only prohibits the access of a computer “without authorization.” (See

Compl. ¶ 21–22; FAC ¶ 23–24.) By again incorporating the language “in excess of the

authorization granted” Platinum Logistics implies it is asserting a claim under sections

1030(a)(2) and (a)(4) of CFAA, but it fails to actually cite those sections. The Court is

therefore inclined to do what it said it would do if Platinum Logistics failed to adequately

incorporate sections 1030(a)(2) and (a)()4 into its amended complaint: dismiss its claim

under section 1030(a)(5)(C) with prejudice and then dismiss this case for lack of subject

matter jurisdiction. 

Even if Platinum Logistics had incorporated sections 1030(a)(2) and (a)(4) into its

amended complaint, however, those claims would also fail as a matter of law. Why? 

Because the Ninth Circuit recently issued its en banc ruling in Nosal, and it held that the

phrase “exceeds authorized access” in the CFAA “is limited to violations of restrictions on

access to information, and not restrictions on its use.” Nosal, 2012 WL 1176119 at *8. 

Platinum Logistics doesn’t maintain that Ysais had restricted access to its customer lists and

rate sheets. (FAC ¶ 10 (“On or around June 23, 2006, Platinum offered Defendant Ysais a

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position at Platinum as a sales manager, which gave her access to Platinum’s customer lists

and rate sheets.”).) It just maintains that she copied them when she left Platinum Logistics

to work for a competitor, and has been using them, in violation of a nondisclosure agreement

that she signed, to attract business for that competitor. (FAC ¶¶ 15–18.) Nosal now makes

clear that this does not give rise to a claim under CFAA. Platinum Logistics’ CFAA claim

against Ysais is therefore DISMISSED WITH PREJUDICE.

With the CFAA claim out of the picture, only Platinum Logistics’ state law claims

remain. The Court is well within its discretion to dismiss a case for lack of jurisdiction when

all federal claims have been dismissed and only state law claims over which it has

supplemental jurisdiction remain. United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726

(1966); Noyes v. Kelly Svcs., 488 F.3d 1163, 1173 (9th Cir. 2007); Acri v. Varian, 114 F.3d

999, 1000 (9th Cir. 1997); 28 U.S.C. § 1367(c). It exercise that discretion here. This case

is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction. 

IT IS SO ORDERED.

DATED: April 16, 2012

HONORABLE LARRY ALAN BURNS

United States District Judge

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