United States District Court, W.D. Missouri.
ORDER AND OPINION (1) GRANTING IN PART AND DENYING IN
PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; AND (2)
GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION
FOR SUMMARY JUDGMENT
D. SMITH, SENIOR JUDGE
are Plaintiff's Motion for Summary Judgment (Doc. #263),
and Defendants' Motion for Summary Judgment (Doc. #265).
For the following reasons, both motions are granted in part
and denied in part.
is a family owned business providing building supplies and
lumber to commercial contractors and homebuilders. Its stores
are located in Kearney, Cameron, and Laurie, Missouri; and
Elwood, Kansas. In 2003, Defendants Jerry Downey and Ray Meng
began working for Plaintiff. Defendants Jess Reynolds and
Sheila Higdon began working for Plaintiff in 2007 and 2010,
respectively. These individuals worked at Plaintiff's
Elwood store, and were at-will employees.
April 2016, Downey, Higdon, Reynolds, and Meng (“former
employees”) resigned from their employment with
Porters. On May 2, 2016, they began working for Defendant
Sprint Lumber, Inc. Sprint Lumber sells lumber and building
materials to commercial builders from its locations in St.
Joseph and Platte City, Missouri. Defendant Scott Laderoute
is president and owner of Sprint Lumber.
in December 2015, there were several communications between
Downey and Laderoute about Downey leaving Plaintiff to work
for Sprint Lumber. Later on, those discussions included
Reynolds, Higdon, and others employed by Plaintiff. Prior to
resigning from Plaintiff, the former employees communicated
with several customers they serviced at Plaintiff regarding
their impending move to Sprint Lumber. They also provided
Sprint Lumber credit applications to many of those customers.
2016, Plaintiff filed this lawsuit and sought a temporary
restraining order, which was denied. Docs. #1-2, 8. In
October 2016, Plaintiff filed a motion for preliminary
injunction. Doc. #116. After a hearing, the Court denied
Plaintiff's motion for preliminary injunction. Doc. #194.
the pendency of this lawsuit, Plaintiff amended its complaint
twice. In its Second Amended Complaint, Plaintiff alleges the
following claims: (1) violation of the Computer Fraud and
Abuse Act, (2) violation of the Sherman Antitrust Act,
computer tampering, (4) violation of the Missouri Uniform
Trade Secrets Act, (5) breach of duty of loyalty, (6)
tortious interference with business expectancy, (7) trespass,
and (8) civil conspiracy. Doc. #109. Downey asserts four
counterclaims: (1) violation of 18 U.S.C. § 2701, (2)
violation of 18 U.S.C. § 2511, (3) invasion of privacy,
and (4) trespass to chattels. Doc. #122. Plaintiff now moves
for summary judgment on the counterclaims alleged by Downey,
and Defendants move for summary judgment on all of
Plaintiff's remaining claims.
moving party is entitled to summary judgment on a claim only
if there is a showing that “there is no genuine issue
as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Williams v. City
of St. Louis, 783 F.2d 114, 115 (8th Cir. 1986).
“[W]hile the materiality determination rests on the
substantive law, it is the substantive law's
identification of which facts are critical and which facts
are irrelevant that governs.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). Thus,
“[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.” Wierman v.
Casey's Gen. Stores, 638 F.3d 984, 993 (8th Cir.
2011) (quotation omitted). The Court must view the evidence
in the light most favorable to the non-moving party, giving
that party the benefit of all inferences that may be
reasonably drawn from the evidence. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588-89
(1986); Tyler v. Harper, 744 F.2d 653, 655 (8th Cir.
1984). A party opposing a motion for summary judgment
“may not rest upon the mere allegations or denials of
the…pleadings, but…by affidavits or as
otherwise provided in [Rule 56], must set forth specific
facts showing that there is a genuine issue for trial.”
Defendants' Motion for Summary Judgment (1) Computer
Fraud and Abuse Act (Count I)
Computer Fraud and Abuse Act (“CFAA”) claims,
Plaintiff alleges Downey, without authorization, deleted
emails from his work email account, which contained
confidential information, trade secrets, and customer contact
information. Doc. #109, at 15-16. Plaintiff alleges Higdon,
without authorization, deleted confidential information,
trade secrets, and customer contact information on the cell
phone provided to her by Plaintiff. Id. Plaintiff
contends Sprint Lumber and Laderoute “affirmatively
participated in and conspired” with Downey and Higdon.
Id. Defendants argue they are entitled to summary
judgment because Downey and Higdon did not act without
authorization and/or did not act in excess of their
authorization, and Plaintiff has not established loss.
CFAA allows a private party to bring a civil action for
damages caused by computer fraud. 18 U.S.C. § 1030(g).
To assert a civil action under the CFAA, a plaintiff must
establish the defendant (1) accessed a protected computer,
(2) without authorization or exceeding authorized access, and
(3) caused loss in excess of $5, 000. 18 U.S.C. §§
1030(a)(4), 1030(c)(4)(A)(i)(I). The parties' discussions
address only the second and third elements, conceding
Plaintiff met the first element.
CFAA does not define the term “without
authorization” or “authorization, ” but
defines “exceeds authorized access” as
“access to a computer with authorization and to use
such access to obtain or alter information in the computer
that the accesser is not entitled to obtain or alter.”
18 U.S.C. § 1030(e)(6). The parties concede courts are
split in interpreting both phrases, particularly when
applying the CFAA to an employee who accesses an
employer's computer with permission prior to termination,
and uses that information to benefit a competitor. Doc. #265,
at 65-69; Doc. #291, at 103-08; see also InfoDeli, LLC v.
W. Robidoux, Inc., No. 15-364-BCW, 2016 WL 6921623, at
*6 (W.D. Mo. Mar. 7, 2016) (noting courts are split on the
CFAA definitions but declining to adopt a definition when
considering a motion to dismiss).
courts hold an individual acts without authorization whenever
he, without his employer's knowledge, “acquires
adverse interest or if he is otherwise guilty of a serious
breach of loyalty.” Int'l Airport Ctrs., LLC v.
Citrin, 440 F.3d 418, 421 (7th Cir. 2006) (citation
omitted); see also United States v. Rodriguez, 628
F.3d 1258, 1263-64 (11th Cir. 2010); P.C. Yonkers, Inc.
v. Celebrations the Party & Seasonal Superstore LLC,
428 F.3d 504, 510-11 (3d Cir. 2005); Shurgard Storage
Ctrs., Inc. v. Safeguard Self Storage, Inc., 119
F.Supp.2d 1121, 1124-25 (W.D. Wash. 2000). Other courts apply
a more narrow view, finding “without
authorization” applies to outsiders' or
hackers' conduct, and does not apply to individuals, such
as employees, who have permission to access the computer.
See WEC Carolina Energy Sols. LLC v. Miller, 687
F.3d 199, 203-07 (4th Cir. 2012); LVRC Holdings LLC v.
Brekka, 581 F.3d 1127, 1132-35 (9th Cir. 2009); US
Bioservices Corp. v. Lugo, 595 F.Supp.2d 1189, 1192-95
(D. Kan. 2009); Shamrock Foods Co. v. Gast, 535
F.Supp.2d 962, 964-65 (D. Ariz. 2008).
Eighth Circuit has not decided whether the CFAA imposes civil
liability on employees who access information with permission
but with improper purpose. Several district courts in the
Eighth Circuit have decided this particular issue. The
Eastern District of Missouri, Southern District of Iowa,
District of Nebraska, and Western District of Arkansas
adopted the broader interpretation to cover actions by an
employee who, although given access to an employer's
computers, utilizes information from the computers for
personal use, in contravention of the employee's duty of
loyalty, or to aid unlawful competition. Lasco Foods,
Inc. v. Hall & Shaw Sales, Mktg., & Consulting,
LLC, No. 08CV1683, 2009 WL 3523986, at *4 (E.D. Mo. Oct.
26, 2009) (stating a CFAA claim was sufficiently pled when
the former employees were alleged to have “acted
without authorization” by obtaining the plaintiff's
information for “personal use and in contravention of
their fiduciary duty”); NCMIC Fin. Corp. v.
Artino, 638 F.Supp.2d 1042, 1060-61 (S.D. Iowa 2009)
(finding the defendant's “actions in accessing
NCMIC's computer system to send e-mails aiding his
unlawful competition… and to obtain NCMIC's
customer spreadsheet” was “without
authorization”); Ervin & Smith Advert. &
Pub. Relations, Inc. v. Ervin, No. 8:08CV459, 2009 WL
249998, at *7-8 (D. Neb. Feb. 3, 2009) (finding the
defendants' authorization terminated once they destroyed
the agency relationship by appropriating protected
information); Nilfis-Advance, Inc. v. Mitchell, No.
05-5179, 2006 WL 827073, at *2 (W.D. Ark. Mar. 28, 2006)
(finding the plaintiff sufficiently pled a CFAA violation by
alleging the defendant emailed company files to a personal
computer for the purpose of misappropriation).
Court is persuaded by the Seventh Circuit's reasoning in
Citrin, and the decisions issued by the majority of
district courts in the Eighth Circuit. In Citrin,
Judge Posner found an employee's authorization to access
a computer “terminated when…he resolved to
destroy files that incriminated himself and other files that
were the property of his employer, in violation of the duty
of loyalty that agency law imposes on an employee.” 440
F.3d at 420 (citations omitted). Although noting the
difference between “without authorization” and
“exceeding authorized access” is “paper
thin, ” Judge Posner concluded the employee's
breach of duty of loyalty terminated his agency relationship,
and thus, his computer access was terminated. Id. at
420-21. “Violating the duty of loyalty, or failing to
disclose adverse interests, voids the agency
relationship.” Id. at 421 (quoting State
v. DiGiulio, 835 P.2d 488, 492 (Ariz.Ct.App. 1992));
see also Restatement (Second) of Agency § 112
cmt. b (1958) (stating an agent who acquired an interest
adverse to the principal or acts for another principal
“should realize that the principal would not desire him
to continue to act”). Applying this standard, the Court
finds Plaintiff may bring CFAA claims against Downey and
Higdon. The Court finds genuine issues of material fact exist
with regard to these claims, and thus, Defendants'
summary judgment motion on the CFAA claims against Higdon and
Downey is denied.
regard to Meng and Reynolds, Plaintiff admitted Meng and
Reynolds did not tamper with its computers. Doc. #265, at 19;
Doc. #286-1, at 5; Doc. #291, at 28. Thus, Defendants'
motion for summary judgment on Plaintiff's CFAA claims
against Meng and Reynolds is granted.
Court is left with Plaintiff's CFAA claims against Sprint
Lumber and Laderoute. Plaintiff alleges Sprint Lumber and
Laderoute affirmatively participated in and conspired with
Downey and Higdon to violate the CFAA. The parties failed to
address this particular claim. Although it is doubtful the
CFAA permits a civil conspiracy claim, the Court must deny
Defendants' motion for summary judgment on
Plaintiff's CFAA claim against Sprint Lumber and
Missouri Computer Tampering Act (Count III)
seek summary judgment on Plaintiff's Missouri Computer
Tampering Act (“MCTA”) claims, and
Plaintiff's claim for punitive damages under the MCTA.
Substantive Claims under the MCTA
alleges Downey and Higdon violated the MCTA by (1)
affirmatively and without authorization, deleting, altering,
and/or destroying company data and confidential information
on Plaintiff's computing and mobile devices, and (2)
disclosing and taking company data and confidential
information from the computing and mobile devices. Doc. #109,
at 18-19. Plaintiff also contends Sprint Lumber and Laderoute
conspired with Downey and Higdon to perform these acts, and
Sprint Lumber and Laderoute received, retained, and/or used
the data and confidential information obtained by Downey and
Higdon. Id. Defendants argue entitlement to summary
judgment because Downey and Higdon were authorized to access,
delete, and/or alter information on Plaintiff's computers
and cell phones.
owner of a computer system may bring a civil action against
any person who violates the MCTA. Mo. Rev. Stat. §
537.525.1 (2016). A person violates the MCTA by
“knowingly and without authorization or without
reasonable grounds to believe he has such
authorization” does one of the following:
(1) Modifies or destroys data or programs residing or
existing internal to a computer, computer system, or computer
network: or (2) Modifies or destroys data or programs or
supporting documentation residing or existing external to a
computer, computer system, or computer network; or (3)
Discloses or takes data, programs, or supporting
documentation, residing or existing internal or external to a
computer, computer system, or computer network; (4) Discloses
or takes a password, identifying code, personal
identification number, or other confidential information
about a computer system or network that is intended to or
does control access to the computer system or network; (5)
Accesses a computer, a computer system, or a computer
network, and intentionally examines information about another
person; (6) Receives, retains, uses, or discloses any data he
knows or believes was in violation of this subsection.
Mo. Rev. Stat. § 569.095.1 (2016); see also W. Blue
Print Co. v. Roberts, 367 S.W.3d 7, 20 (Mo. banc 2012).
The Court finds genuine issues of material fact exist with
regard to Plaintiff's MCTA claims against Downey, Higdon,
Sprint Lumber, and Laderoute. Therefore, Defendants'
summary judgment motion on these particular claims is denied.
However, similar to the CFAA claims, Plaintiff admitted Meng
and Reynolds did not tamper with Plaintiff's computers,
and therefore, Defendants' summary judgment motion on
Plaintiff's MCTA claims against Meng and Reynolds is
Punitive Damages under the MCTA
seek summary judgment on Plaintiff's claim for punitive
damages under the MCTA. Plaintiff concedes the MCTA does not
provide for punitive damages, but argues punitive damages are
available because Defendants committed intentional torts. The
MCTA allows for recovery of “compensatory damages,
including any expenditures reasonably and necessarily
incurred by the owner or lessee to verify the computer
system…or data was not altered, damaged, or deleted by
the access, ” and reasonable attorneys' fees. Mo.
Rev. Stat. § 537.525(1)-(2). The statute does not allow
for recovery for punitive damages. Plaintiff fails to cite
any case finding otherwise. Defendants' summary judgment
motion on Plaintiff's request for punitive damages under
the MCTA is granted.
Missouri Uniform Trade Secrets Act (Count IV)
Missouri Uniform Trade Secrets Act (“MUTSA”)
claims, Plaintiff alleges Defendants disclosed and used
Plaintiff's trade secrets without consent. Defendants
argue the information and data at issue does not rise to the
level of trade secrets.
demonstrate a misappropriation of trade secrets, one must
show: “(1) a trade secret exists, (2) the defendant
misappropriated the trade secret, and (3) the plaintiff is
entitled to either damages or injunctive relief.”
Cent. Tr. & Inv. Co. v. Signalpoint Asset
Mgmt., LLC, 422 S.W.3d 312, 320 (Mo. banc
2014). A “trade secret” includes but
is not limited to “technical or nontechnical data, a
formula, pattern, compilation, program, device, method,
technique, or process, that”:
(a) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by other persons who can obtain