Court Opinion

ID: 809581
Source: CourtListenerOpinion
Date Created: 2012-10-04 21:45:13+00
Date Added: 2024-06-11T18:00:35.041451
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT

                                     No. 11-3859

                GRANT MANUFACTURING & ALLOYING, INC.,
                                                   Appellant.

                                           v.

                   GREGORY McILVAIN; DARYL WILLIAMS

                   On Appeal from the United States District Court
                      for the Eastern District of Pennsylvania
                              (D. C. No. 5-10-cv-01029)
                     District Judge: Honorable Juan R. Sanchez

                       Submitted under Third Circuit LAR 34.1(a)
                                on September 14, 2012

                Before: SCIRICA, ROTH and BARRY, Circuit Judges

                            (Opinion filed: October 2, 2012)

                                     OPINION

ROTH, Circuit Judge:

      Grant Manufacturing & Alloying, Inc. brought suit against Gregory McIlvain and

Daryl Williams, alleging violations of the Computer Fraud and Abuse Act (CFAA), 18

U.S.C. § 1030, and Pennsylvania law. The District Court granted summary judgment in

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favor of Grant as to all federal claims and declined to exercise supplemental jurisdiction

over the remaining state law claims. Grant appeals that decision. For the reasons stated

below, we will affirm the District Court’s grant of summary judgment.

   I. Background

       We write primarily for the parties, who are familiar with this case. Therefore, we

will set forth only those facts necessary to our analysis.

       Grant is a manufacturer of tin, tin alloys, and specialty products serving the

electronics, plating, and tin chemical industries. McIlvain and Williams began working

for Grant as sales representatives in 1986 and 1988, respectively. On February 19, 2010,

McIlvain and Williams resigned from Grant to work for Nathan Trotter and Company,

Inc., one of Grant’s competitors.

       The day before McIlvain and Williams resigned from Grant, McIlvain accessed

Grant’s computerized purchase order system and marked sixty-three customer and

distributor records for deletion. On the date of McIlvain and Williams’s resignation,

Jeffrey Fried, Grant’s independent information technology consultant, came to Grant’s

offices to work on transitional issues and discovered the records that McIlvain had

marked for deletion. When Fried alerted Grant to this fact, Grant asked Fried to examine

all data in the computer system to determine whether McIlvain or Williams had tampered

with any other records. Fried did so and compiled a number of reports showing that

Grant’s computer records had been altered in the week before McIlvain and Williams’s

departure. Fried could not determine exactly when during that period the changes were

made or who made the changes. Grant contends that McIlvain and Williams modified

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the computer records prior to their resignation to make Grant’s pricing less competitive

and to sabotage its business.

       Fried billed Grant $9,312.50 for the work he performed relating to McIlvain and

Williams’s departure. The charges were related to routine transitional matters as well as

the tasks of restoring the data that McIlvain marked for deletion and verifying the

integrity of Grant’s computer system. Fried’s time entries on the invoice submitted to

Grant specify the dates and the number of hours he worked, as well as the tasks he

performed. However, the entries do not distinguish between the time spent working on

issues relating to McIlvain and Williams’s alleged malfeasance and the time spent on

routine transitional issues. At his deposition, Fried was not asked, nor did he state, how

much of his bill was attributable to McIlvain and Williams’s alleged misconduct.1 Fried

also testified that he was able to restore the data marked for deletion in about fifteen

seconds and that this task alone would cost about $100.

   II. Jurisdiction & Standard of Review

       The District Court had jurisdiction pursuant to 28 U.S.C. § 1331, and we have

jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review of the District

Court’s order granting summary judgment, and, in doing so, resolve all factual disputes

and draw all reasonable inferences in the light most favorable to the non-moving party.

Callison v. City of Philadelphia, 430 F.3d 117, 119 (3d Cir. 2005). Summary judgment

       1
        Due to a scheduling conflict, Grant’s counsel was unable to attend Fried’s
deposition. Grant’s motion to quash the subpoena for Fried’s deposition was denied.
Grant does not appeal that decision.
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is appropriate when there “is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

   III. Discussion

       The sole issue in this appeal is whether Grant presented sufficient evidence to

permit a jury to conclude that it had suffered more than $5,000 in losses, as defined by

the CFAA. We agree with the District Court’s determination that Grant failed to do so.

       The CFAA permits private causes of action only if the conduct at issue causes a

“loss to 1 or more persons during any 1-year period . . . aggregating at least $5,000 in

value[.]” 18 U.S.C. § 1030(c)(4)(A)(i)(I); see also id. § 1030(g) (permitting private right

of action). The statute 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.” Id. § 1030(e)(11).

       Grant brings three independent causes of action under the CFAA. The parties do

not dispute that the $5,000 threshold applies to each cause of action. The parties also do

not dispute that the only loss at issue is the $9,312.50 in costs incurred by Grant for

Fried’s services. Thus, the only way Grant could survive summary judgment was by

presenting evidence that would permit a jury to infer that at least $5,000 of Fried’s bill

was attributable to a response to McIlvain and Williams’s alleged CFAA violation.

       As noted above, Fried’s time entries do not indicate how long it took him to

resolve issues related to a potential CFAA violation. The only evidence in the record is

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Fried’s deposition testimony, in which he stated that he spent about fifteen seconds

restoring the data, which was worth about $100 of his time. Grant offered no other

evidence at the summary judgment phase or on appeal showing that the costs associated

with the alleged CFAA violations approximated $5,000. Therefore, the District Court

correctly held that a reasonable jury could not find that Grant satisfied the $5,000

requirement because Grant submitted insufficient evidence showing how much time, or

the proportion of time, Fried spent responding to McIlvain and Williams’s alleged

misconduct.

       Grant’s argument on appeal appears to be that vital evidence is missing from the

record. In short, Grant asserts that, if its counsel had attended Fried’s deposition, counsel

would have been able to elicit testimony from Fried as to how much time he spent

responding to the alleged CFAA violations and that this testimony would give rise to a

genuine dispute of material fact. However, the fact of the matter is that Grant’s counsel

did not attend Fried’s deposition, nor did Grant’s counsel proffer any other admissible

evidence on this critical issue. Absent any evidence in the record suggesting that Fried

needed more than a few moments to address the purported CFAA violation, a jury could

not conclude that at least $5,000 of Fried’s bill related to such a violation.

       Because Grant has failed to present sufficient evidence that it suffered a loss as

defined by the CFAA, we need not reach Grant’s arguments concerning evidence of

violations of specific provisions of the CFAA.

   IV. Conclusion

       For the foregoing reasons, we will affirm the judgment of the District Court.

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