|
|
 |
|
September 9, 2010 |
|
|
|
|
| |
|
|
| April 01, 2010 |
By: Leonard Deutchman |
|
t the hearing on a proposed temporary restraining order, the court found that Meesham Neergheen's copying of sensitive data the day before he left the employ of Mintel International Group for a direct competitor was a prima facie violation of the Computer Fraud and Abuse Act while at trial. The court found that Mintel had effectively forced Neergheen out of his position and that his copying of data was not the basis for any cause of action. In this week's article we will try to ascertain why the court reversed its legal conclusion even though the essential facts of the case did not change.
A CHANGE OF HEART OR MIND?
In holding that Neergheen's copying of Mintel's confidential information did not constitute a "loss" under the CFAA, the trial court followed Del Monte Fresh Produce v. Chiquita Brands International, decided in the Northern District of Illinois on March 19, 2009, and another 2009 decision in the same court, SKF USA Inc. v. Bjerkness.
These opinions are part of an ongoing debate as to what constitutes a cause of action under the CFAA. A 2000 case out of the Northern District of Illinois, YourNetDating v. Mitchell, and the other cases the court cited in Mintel I hold opposite of Del Monte Fresh Produce and SKF USA.
YourNetDating stands for the proposition that copying confidential information without or in excess of authorization does constitute a "loss" under the CFAA. Case law in other circuits supports YourNetDating.
In a 2001 case out of the 1st U.S. Circuit Court of Appeals, EF Cultural Travel BV v. Explorica, Inc., 274, for example, the court found a "loss" under the CFAA when an employee copied proprietary company information and used it to create a program that enabled his new travel company to obtain information from his former employer's website. Even though the website was open to the public, the 1st Circuit found that the copying of the information and its misuse to the benefit of the current employer constituted a "loss" because the former employee could not have obtained that information as efficiently without the use of that confidential information.
While the court, then, chose to follow Del Monte and SKF USA, it had ample authority on which to rely had it chosen to follow EF Cultural Travel BVI as well as YourNetDating and the other cases it cited in Mintel I. Nothing had changed with regard to the facts that led the court to issue the TRO for the CFAA violation except the court's thinking regarding those facts. The court's attempt to play down Neergheen's e-mailing to himself Mintel proprietary information on the basis that Mintel "had no policy" prohibiting employees from e-mailing themselves Mintel data is disingenuous at best: Mintel certainly had a policy regarding keeping confidential information confidential and using it solely for Mintel's benefit.
One can only speculate as to why the court changed its mind. Certainly the rulings in the decisions between Mintel I and Mintel V signaled that change.
In Mintel III, Magistrate Judge Maria Valdez denied Mintel's motion to reconsider the denial of its prior motion to allow Mintel's digital forensics experts to search the computers of Neergheen's new employer, Datamonitor, for any of the Mintel data Neergheen had e-mailed to himself. As I wrote in a March 2009 column, "Building a Case for Rule 34 Relief," while Valdez's decision found some support in Mintel's refusal to exhaust less intrusive steps, such as allowing Datamonitor to conduct its own search using search terms supplied by Mintel, much of the court's logic was circular: Mintel needed to conduct the search to determine whether the data was there but the court denied the motion to conduct the search because Mintel could not produce proof that the data would be there.
The court again employed circular logic to rule against Mintel in Mintel IV, which I wrote in a May 2009 column, "'A Loathsome, Offensive Brute' of a Case." There, Valdez held, and the district court affirmed, that Mintel's expert could not opine that a pattern of characters found on Mintel's USB drives was evidence that Neergheen had wiped the drives. The reason the court gave to support its ruling was that "Plaintiff's expert found no traces of a wiping program on the USB drives apart from the presence of the" pattern of characters [emphasis supplied]. This reasoning is circular because "traces of a wiping program" would not have been on either USB drive, but rather on the hard drive of the computer Neergheen used, the most likely suspects being Datamonitor's computers which, of course, the court had barred Mintel from searching in Mintel III. If Mintel's factual record, then, was not as strong as it could have been, that could in part have been because, throughout the litigation, the court prohibited Mintel from taking the aggressive steps needed to gather facts.
It should be noted, particularly given the court's curious, adverse rulings towards Mintel in Mintel III and Mintel IV, that whatever the reason for the court's change in attitude towards Mintel regarding the CFAA claim, granting it at the TRO hearing and then finding against Mintel at trial on, basically, the same evidence, the change could not be the result of facts not known until the trial. Those newly discovered facts did not contradict Mintel's assertion, which the court accepted at the TRO hearing and on which it based its granting of the TRO, that Neergheen violated the CFAA by e-mailing confidential Mintel files to his personal e-mail account.
The newly uncovered facts presented at trial fell into two categories.
The first was comprised of facts pertaining to other counts, such as Datamonitor's decision to put Neergheen in a position where he would not solicit present Mintel clients; those facts concerned the non-compete and non-solicitation covenants.
The second category was comprised of facts which pertained to the second aspect of the CFAA complaint, the issue of whether Neergheen used any wiping application to destroy Mintel data (the subject of Mintel IV). Mintel's failure to carry its burden of proving that Neergheen had "damaged" Mintel's data did not touch upon the evidence that Neergheen's copying and e-mailing confidential Mintel data to his personal e-mail account constituted a "loss" under the CFAA.
The court's change in thinking came solely from a re-interpretation of the CFAA consistent with Del Monte Fresh Produce and SKF USA and inconsistent with YourNetDating and the other cases cited by the court in Mintel I. Whether that re-interpretation was the result of a principled re-evaluation of the case law or a growing sympathy for defendant Neergheen is a matter for speculation.
TAKEAWAYS?
With the CFAA, as with many areas of the law, there is sufficient case law to justify opposite conclusions of law. When that is true, an advocate must rely on factors not, strictly speaking, germane to the matter to get the court to follow one strain of case law and not another. Usually, those additional factors are called "the equities."
In the latest Mintel decision, we cannot know whether the equities persuaded the court, but we can see that, as the court learned more about the matter, the picture of what took place went from that of a disloyal employee who copied confidential information on the eve of defecting to a rival company to one of a loyal employee, told that his job was to be eliminated and offered another one at a lower salary, who went to a rival that, without even the threat of legal action, did its best to respect the non-compete the employee had with his prior employer.
In any matter, the equities will weigh heavily on a court's legal decision, regardless of how dispassionate and objective a court seems to act or a judge believes that he or she is. When the matter concerns the technical esoterica of digital forensics, it should not surprise the practitioner when the court drifts away from the forensics and towards the familiar and so views the results of forensic analysis through the lens of the equities of the matter.
Leonard Deutchman is general counsel and administrative partner of LDiscovery, a firm based in New York City, Fort Washington, Pa., McLean, Va. and Chicago that specializes in electronic digital discovery and digital forensics. This story was first published in The Legal Intelligencer, an affiliate of the Daily Business Review.
|
Search the archive for more stories.
|
|
|
 |
|
lawjobs Featured Ad
Associate
Dynamic, multi-practice law firm seeks associate with 1-2 years exp. for litigation in workers' comp. department; excellent salary and benefits.
Please fax resume to
(954) 938-7902 |
|
|
|
|
|
|
