Opinion ID: 2763621
Heading Depth: 3
Heading Rank: 3

Heading: Computer Fraud and Abuse Act Claim

Text: This Court reviews “a district court’s denial of a Rule 50(b) motion de novo, applying the same deferential standard as the district court.” Radvansky v. City of Olmsted Falls, 496 F.3d 609, 614 (6th Cir. 2007). We do not weigh the evidence, question the credibility of the witnesses, or substitute our judgment for that of the trier of fact. K & T Enters., Inc. v. Zurich Ins. Co., 97 F.3d 171, 175–76 (6th Cir. 1996). The motion may be granted only if in viewing the evidence in the light most favorable to the non-moving party and drawing all reasonable inferences in its favor, there is no genuine issue of material fact for the jury, and reasonable minds could come to but one conclusion, in favor of the moving party. Radvansky, 496 F.3d at 614. Plaintiffs alleged that Efacts violated the Computer Fraud and Abuse Act by intentionally accessing “a protected computer without authorization, and as a result of such conduct, cause[d] 3 Indeed, as discussed infra, § II.C, Efacts has never actually contested the authenticity of the records themselves; it only quibbles with Plaintiffs’ authentication efforts. No. 14-3002 Yoder & Frey, et al. v. EquipmentFacts Page 8 damage and loss.” 18 U.S.C. § 1030(a)(5)(C).4 The CFAA is primarily a criminal statute, but it provides for a civil right of action and economic damages in certain circumstances, such as when a violator causes “loss” of at least $5,000 in value to one or more persons during any one-year period. See id. §§ 1030(g), (c)(4)(A)(i)(I). Here, the jury found in favor of Plaintiffs, but only awarded damages to RTB. To prevail on their claims, Plaintiffs were required to show that Efacts’ actions caused both “damage” and “loss.” See id. § 1030(a)(5)(C). “Damage” is statutorily defined as “any impairment to the integrity or availability of data, a program, a system, or information.” Id. § 1030(e)(8).5 “Loss” means 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. Id. § 1030(e)(11). Although Efacts perfunctorily contends that Plaintiffs failed to establish “damage,” the focus of its argument is that RTB was not entitled to a recovery because it failed to produce evidence establishing that it incurred damages resulting from an “interruption in service,” and therefore it failed to demonstrate “loss.” The district court rejected this argument. It found that Plaintiffs had provided sufficient evidence that Efacts’ action denied service to Yoder & Frey’s other bidders by fraudulently occupying bidding slots (i.e., when Efacts placed a $10,000 bid on an item, no other auction participant could bid $10,000 on that same item) on which it had no intention of making good. By crowding out legitimate bids, the court reasoned, Efacts caused an interruption in service. The district court did not believe it was necessary for Plaintiffs to establish that Efacts’ conduct completely overwhelmed the system or rendered it inoperable. 4 It is undisputed that Plaintiffs’ bidding system constitutes a “protected computer” and that Efacts’ alleged access was “without authorization.” 5 The CFAA does not define three key terms—“impairment,” “integrity,” and “availability”—and therefore we look to the common meanings of these words. Pulte Homes, Inc. v. Laborers’ Int’l Union of N. Am., 648 F.3d 295, 301 (6th Cir. 2011) (citing United States v. Plavcak, 411 F.3d 655, 660–61 (6th Cir. 2005)). “‘Impairment’ means a ‘deterioration’ or an ‘injurious lessening or weakening.’ The definition of ‘integrity’ includes an ‘uncorrupted condition,’ an ‘original perfect state,’ and ‘soundness.’ And ‘availability’ is the ‘capability of being employed or made use of.’” Id. (quoting 7 Oxford English Dictionary 696, 1066 (2d ed. 1989); 1 Oxford English Dictionary 812 (2d ed. 1989)). No. 14-3002 Yoder & Frey, et al. v. EquipmentFacts Page 9 First, Plaintiffs presented evidence sufficient to establish that Efacts caused “damage.” Justin Clark testified: “If ultimately the winning bid was for $10,000, it would have prevented [an auction participant] not only from bidding but from actually winning the item. So a false $10,000 winning bid would have precluded a legitimate buyer from actually acquiring that item at $10,000.” [R. 139, Tr. Trial I, PGID 2539–40.] By placing false bids and occupying bidding slots, Efacts impaired the integrity of the program and/or system because legitimate bidders were unable to bid that same amount. See 18 U.S.C. § 1030(e)(8) (defining damage). Stated differently, Efacts’ conduct interfered with the ability of the auction platform to function as intended—true bidders were unable to acquire the items at issue for their lowest possible price. Second, and at issue here, Plaintiffs also demonstrated that Efacts caused “loss” by accessing the auction platform without authorization and fraudulently using the bidding system. Clark testified that his probe into the false bidding took him between 200 and 300 hours to complete and that his typical hourly billing rate is between $100 and $200. “Loss” is defined in the disjunctive—it includes “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.” 18 U.S.C. 1030(e)(11). It also encompasses “any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.” Id. If a plaintiff is able to establish a loss of at least $5,000 in value, whether that be composed solely of costs identified in the first clause, or solely costs identified in the second clause, or a combination of both, then he may recover under the statute. See Nexans Wires S.A. v. Sark-USA, Inc., 166 F. App’x 559, 563 (2d Cir. 2006) (“[T]he plain language of the [CFAA] treats lost revenue as a different concept from incurred costs, and permits recovery of the former only where connected to an ‘interruption in service.’”). Efacts’ actions required RTB to investigate the offense and conduct a damage assessment, thereby causing “loss.” See A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 646 (4th Cir. 2009) (holding that “loss” is broadly defined and “plainly contemplates . . . costs incurred as part of the response to a CFAA violation, including the investigation of an offense”). Thus, contrary to Efacts’ belief, it was not necessary that Plaintiffs establish that an No. 14-3002 Yoder & Frey, et al. v. EquipmentFacts Page 10 “interruption in service” occurred. It is equally unnecessary, for disposition of this case, that we delineate the scope of “interruption in service,” and we decline to do so. In sum, when the evidence is viewed in the light most favorable to Plaintiffs, and all reasonable inferences are drawn in their favor, we conclude that there was ample basis for the jury to find that Efacts caused Plaintiffs damage and loss when it accessed the auction without authorization, thereby violating the CFAA.