Opinion ID: 182783
Heading Depth: 2
Heading Rank: 2

Heading: the value of the information obtained

Text: Batti's challenge to the district court's conclusion that the value of the information obtained exceeded $5,000 requires an interpretation of 18 U.S.C. § 1030(c)(2)(B)(iii). A matter requiring statutory interpretation is a question of law requiring de novo review, and the starting point for interpretation is the language of the statute itself. United States v. Shafer, 573 F.3d 267, 272 (6th Cir.2009) (quotation marks omitted). Section 1030 of Title 18 contains no definition of the term value, as used in 18 U.S.C. § 1030(c)(2)(B)(iii), however, and § 1030 does not otherwise indicate how a court should determine whether the value of the information obtained exceeds $5,000. 18 U.S.C. § 1030(c)(2)(B)(iii). Batti argues that the district court committed a legal error because he asserts that there was no evidence [that his] actions had any impact on the company's use of these commercials. Batti Br. at 18 (emphasis in original, alteration added). In other words, Batti contends that, because he did not damage the information in any way, the court could not find that the value of the information obtained exceeded $5,000. Id. The district court rejected this argument on the ground that the statute does not require that the information obtained lost value as a result of the defendant's illicit actions. As the district court stated: There simply is no requirement under the pertinent subsections of § 1030 that Defendant's unauthorized access must have led to any sort of loss, that the value of the information must have been diminished as a result of his conduct, or that he somehow must have profited from his actions. Rather, the trier of factin this case, the Courtis called upon only to determine the value of the information through some appropriate means. Doc. 26 (Findings of Fact and Conclusions of Law) at 12. We agree with the district court. When the statutory language is plain, the sole function of the courtsat least where the disposition required by the text is not absurdis to enforce it according to its terms. Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296, 126 S.Ct. 2455, 165 L.Ed.2d 526 (2006) (internal quotation marks omitted); see also Caminetti v. United States, 242 U.S. 470, 485, 490, 37 S.Ct. 192, 61 L.Ed. 442 (1917). The statute here requires only a determination of the value of the information obtained, not whether that value decreased. Furthermore, the statute contains specific definitions of the terms loss and damage, either of which could be said to include an alleged decrease in the value of the video footage obtained by Batti. [1] These termsloss and damageare used in other provisions within § 1030, but not in subsection (c)(2)(B)(iii). See 18 U.S.C. § 1030(a)(5)(A) (prohibiting knowingly caus[ing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization, to a protected computer); 18 U.S.C. § 1030(a)(5)(B) (prohibiting intentionally access[ing] a protected computer without authorization, and as a result of such conduct, recklessly caus[ing] damage); 18 U.S.C. § 1030(a)(5)(C) (prohibiting intentionally access[ing] a protected computer without authorization, and as a result of such conduct, caus[ing] damage and loss); 18 U.S.C. § 1030(a)(7)(A) (prohibiting the interstate transmission of any threat to cause damage to a protected computer); 18 U.S.C. § 1030(a)(7)(C) (prohibiting the interstate transmission of any demand or request for money or other thing of value in relation to damage to a protected computer, where such damage was caused to facilitate the extortion). Given that the terms loss and damage encompass the type of decrease in value described by Batti, the absence of these terms in § 1030(c)(2)(B)(iii) supports the conclusion that the value of the information obtained bears no relation to whether that value was diminished by the defendant's actions. We therefore reject Batti's argument that a diminution in value constitutes the statutory measure. Batti also argues that the district court should have used . . . the market value of the information, and that there was no `market' available to set a value on the information. Batti Br. at 14. We believe there is also no merit in this argument, because, as we explain below, although there may be no readily ascertainable market value for the video footage that Batti obtained, the cost of production of that footage was a permissible basis on which the district court could rely in determining whether the value of the information obtained exceeded $5,000. Subsection (a)(2)(C) was added to 18 U.S.C. § 1030 in 1996 in order to protect against the interstate or foreign theft of information by computer. Economic Espionage Act of 1996, Pub.L. 104-294, Title II, § 201, 110 Stat. 3488, 3491-92 (1996); S. REP. NO. 104-357, at , 1996 WL 492169 (1996). In particular, Congress was concerned about the fact that electronically stored information is intangible, and it has been held that the theft of such information cannot be charged under more traditional criminal statutes such as Interstate Transportation of Stolen Property, 18 U.S.C. § 2314. S. REP. NO. 104-357 at  (citing United States v. Brown, 925 F.2d 1301, 1308 (10th Cir. 1991)). [Subsection (a)(2)(C)] ensure[s] that the theft of intangible information by the unauthorized use of a computer is prohibited in the same way theft of physical items are protected. Id. Regarding the penalties for violations of subsection (a)(2)(C), the Senate Report states that violations involving information of nominal or minimal value constitute misdemeanors, punishable under § 1030(c)(2)(A). S.REP. No. 104-357 at . For violations involving valuable information and misusing information in other more serious ways, however, the felony provision of § 1030(c)(2)(B) applies. Id. Furthermore, Congress identified precisely the types of violations worthy of felony punishment by including within § 1030(c)(2)(B) three preconditions to its application. In order to punish a violation of § 1030(a)(2)(C) as a felony, the government must prove one of the following: (i) the offense was committed for purposes of commercial advantage or private financial gain; (ii) the offense was committed in furtherance of any criminal or tortious act in violation of the Constitution or laws of the United States or of any State; or (iii) the value of the information obtained exceeds $5,000[.] 18 U.S.C. § 1030(c)(2)(B)(i)-(iii). The Senate Report notes that the first two of these preconditions derive from the copyright statute, 17 U.S.C. § 506(a), and the wiretap statute, 18 U.S.C. § 2511(1)(d). S.REP. No. 104-357 at . Moreover, these two provisions are intended to have the same meaning as in those statutes. Id. Subsection (iii) is similar to the transporting-stolen-goods statute mentioned by the Senate Report as the inspiration for the 1996 amendment, 18 U.S.C. § 2314, in that both require the value of the object of the violation to exceed $5,000. Section 2314 prohibits transport[ing], transmit[ting], or transfer[ring] in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud. 18 U.S.C. § 2314 (emphasis added). Consequently, given the absence of case law interpreting the term value in § 1030(c)(2)(B)(iii), we may consider parallel interpretations of § 2314. We also recognize a key difference between the two statutes: although § 1030 prohibits obtaining information, § 2314 prohibits transporting, transmitting, or transferring proscribed items. Thus, as the Senate Report notes, [t]he crux of the offense under subsection 1030(a)(2)(C) . . . is the abuse of a computer to obtain the information, and [a]ctual asportation . . . need not be proved. S.REP. No. 104-357 at -. Examination of the definition of value in 18 U.S.C. § 2311 reveals that the market value of the stolen good constitutes the primary relevant benchmark for the determination of the value of stolen goods, wares, merchandise, securities or money in § 2314. According to § 2311, `Value' means the face, par, or market value, whichever is the greatest, and the aggregate value of all goods, wares, and merchandise, securities, and money referred to in a single indictment shall constitute the value thereof. 18 U.S.C. § 2311. Yet when a particular item does not have a readily ascertainable market value, courts have permitted the use of any reasonable method to calculate value, including the cost of production, research, or design. See Stegora, 849 F.2d at 292 (holding that, in the absence of a market value, any reasonable method may be employed to assign a value to an item, including revenues and the cost of development and production) (internal quotation marks omitted); Drebin, 557 F.2d at 1331-32 (holding that a jury instruction allowing valuation by any reasonable method was proper); Kwan, 2003 WL 22973515, at - (concluding that the cost of production of stolen goods constitutes a permissible valuation method). With this approach in mind, we believe that, where information obtained by a violation of § 1030(c)(2)(B)(iii) does not have a readily ascertainable market value, it is reasonable to use the cost of production as a means to determine the value of the information obtained. The district court here believed that the amount Campbell-Ewald paid for the spots or video footage that Batti later obtained could be viewed as the footage's market value, but the district court also recognized that footage of this type is not sold on a typical retail market. Doc. 26 (Findings of Fact and Conclusions of Law) at 11. As a result, the district court believed that the amount that Campbell-Ewald paid for the footage could also be viewed as the cost of production for the development of advertisements or commercials. Id. We see no error in this approach. Section 1030(a)(2)(C) protects, broadly, information [obtained] from any protected computer, and it is often the case, as it was here, that this information is intangible and lacks any easily ascertainable market value. In such circumstances, we approve of the use of any reasonable method to determine the value of information obtained by a breach of § 1030(a)(2)(C), whether this determination is being made by the district court in a bench trial or by a jury. We hold that the district court's use of the cost of production here was a reasonable, and therefore permissible, method by which to determine the value of the information obtained by Batti. We recognize, however, that, given the broad nature of the statute, violations of § 1030(a)(2)(C) may arise in many different contexts. We therefore express no opinion regarding either the propriety of other methods by which to calculate the value of information obtained under 18 U.S.C. § 1030(a)(2)(C) and (c)(2)(B)(iii) or the applicability of the method we approve today to dissimilar factual circumstances.