White Collar Crime & Internal Investigations Blog

Deepening Split in Circuits Over Computer Abuse Law

Posted in Constitutional Rights, U.S. Attorney's Office

The Fourth Circuit has now joined the Ninth Circuit in holding that an employee’s misappropriation of his employer’s trade secrets is not a violation of the Computer Fraud and Abuse Act (CFAA). See WEC Carolina Energy Solutions LLC, v. Willie Miller, et al., No.11-1201 (4th Cir.) As reported in this blog, the Ninth Circuit previously held that the phrase “exceeds authorized access” in the CFAA is unclear, and that the rule of lenity does not permit interpreting the statute to extend to mere violations of use restrictions. In other words, a person can violate the CFAA only with violations of unauthorized access to information in a federally protected computer, not merely with violations of the use restrictions that attach to the information.

In the WEC case, Miller allegedly downloaded confidential documents to a personal computer before resigning from the company, then later used the confidential information when making a sales presentation to a potential WEC customer on behalf of a competitor. WEC sued Miller on various theories, including a CFAA claim. The district court dismissed the CFAA claim, and the Fourth Circuit affirmed the dismissal. The Court of Appeals noted that the CFAA has both criminal and civil applications, and concluded that it must therefore be construed narrowly. Reasoning that the statute is primarily intended to combat computer hacking, and not to rein in rogue employees, the Fourth Circuit held that the CFAA does not provide “a remedy for misappropriation of trade secrets or violation of [an employer's computer] use policy.”

The conflict now sets the Fourth and Ninth Circuits against the Fifth, Seventh and Eleventh Circuits. It is possible that the Solicitor General’s office is looking for an appropriate vehicle to present the split to the Supreme Court, or as noted previously, the Department of Justice may be likely to seek a legislative fix in the next Congress. One thing is certain: the scope of the federal law’s application should not vary from circuit to circuit, or be dependent on an individual prosecutor’s view of Congress’s intent.