Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_19-cv-05663/USCOURTS-azd-2_19-cv-05663-0/pdf.json

Parties Involved:
Ian Shane Bailey
Plaintiff
Peter W Yanez
Defendant

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Ian Shane Bailey,

Plaintiff,

v. 

Peter W Yanez,

Defendant.

No. CV-19-05663-PHX-ESW

ORDER 

On December 12, 2019, the Court granted Plaintiff’s Application to Proceed in 

District Court Without Prepaying Fees or Costs (Doc. 2). (Doc. 9). As the Court’s Order 

explained, Plaintiff’s Complaint must be screened pursuant to 28 U.S.C. § 1915(e)(2). 

For the reasons explained below, the Court will dismiss the Complaint (Doc. 1) without 

prejudice and will grant Plaintiff leave to file a First Amended Complaint.

I. LEGAL STANDARDS

A. Statutory Screening of In Forma Pauperis Complaint Pursuant to 28 

U.S.C. § 1915(e)(2)

The Court must dismiss a complaint or portion thereof if a plaintiff has raised 

claims that are legally frivolous or malicious, that fail to state a claim upon which relief 

may be granted, or that seek monetary relief from a defendant who is immune from such 

relief. 28 U.S.C. § 1915A(b)(1)-(2). A pleading must contain a “short and plain 

statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 

8(a)(2) (emphasis added). While Rule 8 does not demand detailed factual allegations, “it 

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demands more than an unadorned, the defendant-unlawfully-harmed-me accusation.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a 

cause of action, supported by mere conclusory statements, do not suffice.” Id. “[A] 

complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to 

relief that is plausible on its face.’” Id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 

544, 570 (2007)). A claim is plausible “when the plaintiff pleads factual content that 

allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.” Id. “Determining whether a complaint states a plausible claim for 

relief [is] . . . a context-specific task that requires the reviewing court to draw on its 

judicial experience and common sense.” Id. at 679. Thus, although a plaintiff’s specific 

factual allegations may be consistent with a claim, a court must assess whether there are 

other “more likely explanations” for a defendant’s conduct. Id. at 681. But as the United 

States Court of Appeals for the Ninth Circuit has instructed, courts must “continue to 

construe pro se filings liberally.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). A 

“complaint [filed by a pro se litigant] ‘must be held to less stringent standards than 

formal pleadings drafted by lawyers.’” Id. (quoting Erickson v. Pardus, 551 U.S. 89, 94 

(2007) (per curiam)).

If the Court determines that a pleading could be cured by the allegation of other 

facts, a pro se litigant is entitled to an opportunity to amend a complaint before dismissal 

of the action. See Lopez v. Smith, 203 F.3d 1122, 1127-29 (9th Cir. 2000) (en banc). “It 

is also clear that section 1915(e) not only permits but requires a district court to dismiss 

an in forma pauperis complaint that fails to state a claim.” Id. at 1127.

B. Subject Matter Jurisdiction 

Unlike state courts, federal courts only have jurisdiction over a limited number of 

cases, and those cases typically involve either a controversy between citizens of different 

states (“diversity jurisdiction”) or a question of federal law (“federal question 

jurisdiction”). See 28 U.S.C. §§ 1331, 1332. The United States Supreme Court has 

stated that a federal court must not disregard or evade the limits on its subject matter 

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jurisdiction. Owen Equip. & Erections Co. v. Kroger, 437 U.S. 365, 374 (1978). Thus, a 

federal court is obligated to inquire into its subject matter jurisdiction in each case and to 

dismiss a case when subject matter jurisdiction is lacking. See Valdez v. Allstate Ins. Co., 

372 F.3d 1115, 1116 (9th Cir. 2004); Fed. R. Civ. P. 12(h)(3). 

For diversity jurisdiction pursuant to 28 U.S.C. § 1332, plaintiff and defendants 

must be residents of different states and the matter in controversy must exceed the sum or 

value of $75,000, exclusive of interest and costs. Matheson v. Progressive Specialty Ins. 

Co., 319 F.3d 1089, 1090 (9th Cir. 2003) (“[J]urisdiction founded on [diversity grounds] 

requires that the parties be in complete diversity and the amount in controversy exceed 

$75,000.”). The goals of the amount-in-controversy requirement serve both to preserve 

the jurisdiction exercised by the state courts and to limit the size of the diversity caseload 

in federal courts. Kanter v. Warner-Lambert Co., 265 F.3d 853, 861 (9th Cir. 2001). 

For federal question jurisdiction, 28 U.S.C. § 1331 provides that district courts 

have jurisdiction over “all civil actions that arise under the Constitution, laws, or treaties 

of the United States.” A case “arises under” federal law either where federal law creates 

the cause of action or “where the vindication of a right under state law necessarily turn[s] 

on some construction of federal law.” Republican Party of Guam v. Gutierrez, 277 F.3d 

1086, 1088-89 (9th Cir. 2002) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation 

Trust, 463 U.S. 1, 8-9 (1983)). 

II. DISCUSSION

Plaintiff’s Complaint alleges that Defendant Peter W. Yanez

hacked my phone and paid an overseas Bank of India account 

$17,195.82 U.S currency to put a virus on my phone to 

eliminate any and all information that I had on him . . . I have 

also found out doing background research, that Mr. Yanez is 

on the FBI watch list for terroristic cyber-attacking and 

hacking. I do have a case started with the Maricopa sheriffs 

office as well, but they highly recommended me to file a 

federal case as well due to the overseas accounts and hacking.

(Doc. 1 at 1). Plaintiff asserts that the Court “has jurisdiction over this matter pursuant to 

federal statutes §§ US. Code 1030.” (Doc. 1 at 1). The Court liberally construes the 

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Complaint as alleging that the court has subject matter jurisdiction over this action 

pursuant to 28 U.S.C. § 1331 based upon a federal question arising under 18 U.S.C. 1030. 

Karim-Panahi v. Los Angeles Police Dep’t, 839 F.2d 621, 623 (9th Cir. 1988) (explaining 

that where a plaintiff appears pro se, “the court must construe the pleadings liberally and 

must afford the plaintiff the benefit of any doubt”). 

The Computer Fraud and Abuse Claims (“CFAA”), codified at 18 U.S.C. § 1030, 

“is a federal criminal statute that also authorizes civil actions for any person who suffers 

damage or loss by reason of a violation of the statute.” In re Apple Inc. Device 

Performance Litig., 347 F. Supp. 3d 434, 451 (N.D. Cal. 2018) (citing 18 U.S.C. § 

1030(g) (“Any person who suffers damage or loss by reason of a violation of this section 

may maintain a civil action against the violator to obtain compensatory damages and 

injunctive relief or other equitable relief.”). The CFAA “prohibits a number of different 

computer crimes, the majority of which involve accessing computers without 

authorization or in excess of authorization, and then taking specified forbidden actions, 

ranging from obtaining information to damaging a computer or computer data.” LVRC 

Holdings LLC v. Brekka, 581 F.3d 1127, 1131 (9th Cir. 2009); see also 18 U.S.C. § 

1030(a)(1)-(7). Courts have held that a cell phone may qualify as a “protected computer” 

for purposes of the CFAA. See In re Apple Inc. Device Performance Litig., 347 F. Supp. 

3d at 451 (iPhone qualifies as a “protected computer”); United States v. Kramer, 631 

F.3d 900, 903 (8th Cir. 2011) (concluding that a “basic cell phone” that could be used 

only to call and text message qualified as a “computer” for purposes of the CFAA). 18 

U.S.C. § 1030(e)(1)-(2) defines a “protected computer” as “an electronic . . . or other 

high speed data processing device performing logical, arithmetic, or storage functions” 

that “is used in or affecting interstate or foreign commerce or communication.” 

To state a private cause of action under the CFAA, a “plaintiff must prove that the 

defendant violated one of the provisions of § 1030(a)(1)-(7), and that the violation 

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involved one of the factors listed in § [1030(c)(4)(A)(i)(I)-(V)].”

1

 LVRC Holdings LLC, 

581 F.3d at 1131. The CFAA has a two-year statute of limitations. 18 U.S.C. § 1030(g) 

(“No action may be brought under this subsection unless such action is begun within 2 

years of the date of the act complained of or the date of the discovery of the damage”). 

Here, Plaintiff’s Complaint does not indicate the specific subsection of the CFAA

that Plaintiff alleges Defendant violated. The Complaint also does not include sufficient 

factual allegations showing that the phone at issue would qualify as a computer under the 

CFAA,2 nor does it contain sufficient factual allegations from which the Court may 

reasonably infer that Defendant is liable for the alleged “hack” of Plaintiff’s phone. In 

addition, because the Complaint does not indicate relevant dates, it is impossible for the 

Court to determine whether the two-year statute of limitations has expired. 

Finally, the notes that the Complaint does not properly plead damages or loss 

under the CFAA. The CFAA defines “damage” as “any impairment to the integrity or 

availability of data, a program, a system, or information.” 18 U.S.C. § 1030(e)(8). 

Courts have held that “damage” means actual harm to computers or networks as a result 

of a defendant’s unauthorized accessed to a protected computer, rather than economic 

harm due to the commercial value of the data itself. See NetApp, Inc. v. Nimble Storage, 

Inc., 41 F. Supp. 3d 816, 834 (N.D. Cal. 2014) (dismissing plaintiff’s CFAA claim 

because plaintiff failed to allege any damages to the computer system or destruction to 

any data as a result of the defendant’s unauthorized access of plaintiff's computer); 

Farmers Ins. Exchange v. Steele Ins. Agency, Inc., No. 2:13-CV-00784, 2013 WL 

3872950, at *21 (E.D. Cal. July 25, 2013) (“Indeed, a number of courts have noted that 

‘costs not related to computer impairment or computer damages are not compensable 

1 The bracketed subsection is added to reflect a change in the statute, which was amended 

in 2008. LVRC Holdings LLC referenced 1030(a)(5)(B) factors, which are now found 

under § 1030(c)(4)(A)(i). See 18 U.S.C. § 1030(g); LVRC Holdings LLC, 581 F.3d at 

1131 n.3.

2 Plaintiff does not allege that the phone at issue is a cell phone that has been used in 

interstate commerce or communication.

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under the CFAA.’”); Civic Ctr. Motors, Ltd. v. Mason St. Imp. Cars, Ltd., 387 F. Supp. 

2d 378, 382 (S.D.N.Y. 2005) (“Costs not related to computer impairment or computer 

damages are not compensable under the CFAA.”). The CFAA defines “loss” as “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.” 18 U.S.C. § 1030(e)(11). A “loss”

must total at least $5,000. See Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058, 

1066 (9th Cir. 2016) (concluding that the plaintiff “suffered a loss within the meaning of 

the CFAA as plaintiff’s employees spent many hours, totaling more than $5,000 in costs, 

analyzing, investigating, and responding to [the defendant’s] actions”). Here, Plaintiff 

seeks damages in the amount of $1,500,000 for his “phone, loss of job, mental anguish, 

and taking down a serial homeland security hacker.” (Doc. at 2). The Complaint lacks 

sufficient factual allegations showing that Plaintiff has suffered a harm recognized by the

CFAA. The Complaint also fails to adequately identify the impairment of or damage to 

Plaintiff’s phone that was accessed without authorization. Doyle v. Taylor, 09–cv–

00158, 2010 WL 2163521, at *2-3 (E.D. Wash. May 24, 2010) (to show “damage” or 

“loss” under the CFAA, “plaintiffs must identify impairment of or damage to the 

computer system that was accessed without authorization”).

For the above reasons, the Court concludes that the Complaint fails to adequately 

plead a cause of action under the CFAA. The Complaint does not allege any other basis 

for the Court’s jurisdiction.

3

 Plaintiff’s Complaint will be dismissed for failure to state a 

claim upon which relief may be granted. Within thirty days, Plaintiff may submit a first 

amended complaint to cure the deficiencies outlined above. Plaintiff must clearly 

designate on the face of the document that it is the “First Amended Complaint.” If 

Plaintiff files a First Amended Complaint that asserts a cause of action under the CFAA, 

3 Diversity jurisdiction is not available as the Complaint states that the parties are both 

residents of the State of Arizona.

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Plaintiff must identify the specific subsection of the CFAA that Plaintiff alleges that

Defendant has violated. For example, if Plaintiff alleges that Defendant has violated 18 

U.S.C. § 1030(a)(5), then the First Amended Complaint must so explicitly state. Plaintiff

must allege sufficient allegations supporting each of the required elements of the

subsection asserted.

A first amended complaint supersedes the original complaint. Ferdik v. Bonzelet, 

963 F.2d 1258, 1262 (9th Cir. 1992); Hal Roach Studios v. Richard Feiner & Co., 896 

F.2d 1542, 1546 (9th Cir. 1990). After amendment, the Court will treat an original 

complaint as nonexistent. Ferdik, 963 F.2d at 1262. Any cause of action that was raised

in the original complaint and that was voluntarily dismissed or was dismissed without 

prejudice is waived if it is not alleged in a first amended complaint. Lacey v. Maricopa 

County, 693 F.3d 896, 928 (9th Cir. 2012) (en banc). If Plaintiff fails to timely comply 

with every provision of this Order, the Court may dismiss this action without 

further notice. See Ferdik, 963 F.2d at 1260-61 (a district court may dismiss an action 

for failure to comply with any order of the Court).

III. CONCLUSION

IT IS ORDERED that by March 23 2020, Plaintiff must file a First Amended 

Complaint that complies with this Order and corrects all deficiencies noted herein. If 

filed, Plaintiff shall indicate on the pleading that it is a “First Amended Complaint.” 

Failure to timely file a First Amended Complaint may result in the dismissal of this 

action without further notice.

IT IS FURTHER ORDERED that if the First Amended Complaint asserts a 

cause of action under the Computer Fraud and Abuse Claims, 18 U.S.C. § 1030, Plaintiff

shall specifically identify the specific subsection of 18 U.S.C. § 1030 that Plaintiff asserts 

that Defendant has violated. The First Amended Complaint must contain sufficient 

allegations supporting each of the required elements of the subsection asserted.

IT IS FURTHER ORDERED that if Plaintiff files a First Amended Complaint, it 

may not be served until the Court has issued its screening order pursuant to 28 U.S.C. §

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1915(e)(2).

Dated this 21st day of February, 2020.

Honorable Eileen S. Willett

United States Magistrate Judge

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