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In the latest development of a case involving Joe and Barbara Campbell, as well as 10 anonymous plaintiffs, against Tri County Telephone Association, TCT has filed an appeal on an order to the United States Court of Appeals. The appeal, filed July 2, contests the judgment entered on June 4, on the cross motions for summary judgment in the case.
The judgment ordered in June by the U.S. District Court of Wyoming was that the federal claims made by TCT against Joe Campbell be dismissed. Further, with those claims dismissed diversity no longer existed and the court did not entertain TCT’s state-based claims.
Prior to Jan. 1, 2015, TCT was a membership-owned cooperative, but became a privately owned company after a decision by the board of directors to sell the cooperative to a private entity. Joe Campbell was a member of the board at the time and opposed the sale.
After the cooperative dissolved, Joe retained computers with alleged confidential documents he first received while a board member, and TCT authorized his initial access and download of the documents. After his board termination, TCT requested he return the computers and adopted a resolution requiring all board members to temporarily return their computers to TCT so the company back up alleged confidential documents. Joe refused despite requests from TCT.
In December of 2015, Joe initiated a class-action suit in Park County District Court against numerous defendants involved with the sale. In March of 2017, TCT filed suit with the U.S. District Court of Wyoming against Joe under several theories of liability including the Computer Fraud and Abuse Act (CFAA), breach of contract, conversion, intentional or tortious interference with a prospective economic advantage and business expectancy.
On March 1, 2019, Joe moved for summary judgment as to TCT’s CFAA and tortious interference claims. He contended summary judgment was proper because CFAA protections only extend to hacking activity, and he only downloaded the documents while still a board member with authorized access to them, and continued to access the documents even after he was no longer a board member.
Joe also contended his motion is appropriate because TCT can’t prove damage or loss within the meaning of the statute. Further Joes contended TCT’s state-based tortious interference claims on various grounds, as well as the simple idea that the claims fail for lack of causation and damages.
On March 29, TCT also moved for partial summary judgment as to its claims for CFAA violations, breach of contract and conversion. They argued the judgment is appropriate because the record shows Joe retained a computer and accessed confidential data after he was no longer a board member, and that he published the information of various agreements with the intent of harming TCT.
Responses to the cross motions for summary judgment were filed on April 19, and arguments were heard on May 22, during which Joe offered new points regarding application of the CFAA in the case. He noted the CFAA’s protections only extend to activity on “protected computers,” and that a computer is only protected if it is connected to the Internet. As he did not access the TCT servers, he claimed the relevant computer was not protected under the statute.
It was noted in the court’s discussion that TCT only had two remaining federal claims in the suit, both which are under the CFAA. While TCT also brings several state-based claims, the court would only consider those claims through the exercise of supplemental jurisdiction, as diversity does not exist. Accordingly, the court focused its attentions on TCT’s CFAA claims.
In further discussion the court agreed with TCT that Joe was acting without authorization when he continued to access alleged confidential documents. However, proving unauthorized access alone will not trigger the liability under the CFAA and it was decided Joe’s conduct is not punishable under the CFAA.
Joe also offered another argument that justified dismissal of TCT’s CFAA claims, according to the court, noting their claims fail as a matter of law because TCT has not suffered a compensable injury under the statute.
As for loss to the company, TCT identified several pieces of evidence to suggest it suffered loss under the statute, including about 79 hours of technician time, 58 hours of administrative time, 104 hours of administrator time and 148 hours of Chief Technical Officer time investigating Joe’s breach. Additionally, TCT CEO Chris Davidson noted the company had to pay a forensic computer company to assist in response efforts, and those efforts cost $24,369.95.
Davidson also stated Joe’s behavior forced TCT to upgrade security systems, costing $58,625 in 2017 and $13,250 in 2018, and paid attorney’s fees and costs associated with data breaches and enforcement of the company’s non-disclosure agreements and its efforts to retrieve its property. The court found the costs cited by Davidson problematic, as many of them amount to litigation expenses or those incurred long after the company became aware Joe had wrongfully retained equipment and data.
The company also identified several pieces of evidence documenting alleged loss of business relationships and opportunities, including restrictions on TCT related to its credit facility being able to make acquisitions, borrow funds for capital expenditures, extend credit facility beyond maturity date, alter amortization schedules use accumulated cash balances outside liquid investments.
Similarly, a TCT official testified restrictions were imposed on TCT’s ability to borrow money after Joe filed a class action lawsuit, and further suggested the disclosure of confidential documents caused a loss of existing customers.
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