Applying 9th Circuit LVRC v. Brekka Ruling, District Court Dismisses Most CFAA Criminal Charges in United States v. Nosal

29 01 2010

The debate over the applicability of the Computer Fraud and Abuse Act in cases of alleged employee disloyalty has yielded quite a few rulings over the last several years, and generated a circuit split last September with the Ninth Circuit decision in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009). In that civil action alleging employee theft and misappropriation of trade secrets, the appeals court rejected an expansive interpretation of the CFAA, concluding that an employee’s authorization to access an employer’s computer network is not automatically revoked when the employee is acting in a manner that is disloyal to the employer’s interest. The Ninth Circuit explicitly rejected the contrary reasoning of the Seventh Circuit in International Airport Centers, LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006). In the Citrin case, Judge Posner authored a panel ruling that under common law agency principles, an employee who breaches the duty of loyalty to an employer thereby lacks authorization within the meaning of the CFAA.

The battleground in those two cases was whether a former employer could bring a civil action under the CFAA against former employees who accessed the employer’s computer network, while still employed, for disloyal purposes.

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