Tech Systems, Inc. v. Lovelen Pyle


UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:12-cv-00374-GBL-JFA Copies to all parties and the district court/agency. [999701291].. [13-1359, 13-2098]

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Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 1 of 9 UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1359 TECH SYSTEMS, INC., Plaintiff - Appellee, v. LOVELEN PYLES, Defendant – Appellant, and JOHN AND JANE DOES 1-10, Defendants. No. 13-2098 TECH SYSTEMS, INC., Plaintiff - Appellee, v. LOVELEN PYLES, Defendant – Appellant, and JOHN AND JANE DOES 1-10, Defendants. Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 2 of 9 Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (1:12-cv-00374-GBL-JFA) Submitted: October 27, 2015 Decided: November 18, 2015 Before MOTZ and AGEE, Circuit Judges, and DAVIS, Senior Circuit Judge. Affirmed by unpublished per curiam opinion. Eric H. Zagrans, ZAGRANS LAW FIRM LLC, Cleveland, Ohio, for Appellant. Eric Scott Crusius, Stephen P. Ramaley, MILES & STOCKBRIDGE P.C., Tysons Corner, Virginia, for Appellee. Unpublished opinions are not binding precedent in this circuit. 2 Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 3 of 9 PER CURIAM: Lovelen Pyles appeals the district court’s orders denying her motion under Fed. R. Civ. P. 50 for judgment as a matter of law and granting attorney’s fees in favor of Tech Systems, Inc. (“TSI”). Pyles asserts that the district court erred in denying her motion as to violations of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 (2012); the Electronic Communications Privacy Act, 18 fiduciary duty. in instructing U.S.C. § 2701 (2012); and her breach of She also contends that the district court erred the jury on punitive TSI’s motion for attorney’s fees. damages and in granting We affirm. I. “We review de novo the legal conclusions upon which the district court’s denial of judgment as a matter of law were premised.” Belk, Inc. v. Meyer Corp., U.S., 679 F.3d 146, 164 (4th Cir. 2012). “If, viewing the facts in the light most favorable to the non-moving party, there is sufficient evidence for a reasonable jury to have found in [the non-moving party’s] favor, we are constrained to affirm the jury verdict.” Lack v. Wal-Mart Stores, Inc., 240 F.3d 255, 259 (4th Cir. 2001). A. “Although the CFAA is primarily a criminal statute, it permits private parties to bring a cause of action to redress a 3 Appeal: 13-1359 Doc: 85 violation of Filed: 11/18/2015 the Pg: 4 of 9 CFAA . . . .” A.V. ex rel. Vanderhye iParadigms, LLC, 562 F.3d 630, 645 (4th Cir. 2009). v. The civil suit may be brought in limited circumstances by “[a]ny person who suffers damage or loss” as a result of a CFAA violation. U.S.C. § 1030(g). 18 As relevant here, the violation must have caused “loss to 1 or more persons during any 1-year period . . . aggregating at least § 1030(c)(4)(A)(i)(I), $5,000 (g). A in value.” person 18 violates the U.S.C. CFAA by “intentionally access[ing] a computer without authorization or exceed[ing] information authorized from § 1030(a)(2)(C), access, any or and thereby obtain[ing] . . . protected computer,” “intentionally access[ing] 18 a U.S.C. protected computer without authorization, and as a result of such conduct, caus[ing] damage and loss,” 18 U.S.C. § 1030(a)(5)(C). This court narrowly interprets the terms authorization” and “exceeds authorized access.” “without WEC Carolina Energy Sols. LLC v. Miller, 687 F.3d 199, 206 (4th Cir. 2012). “[A]n employee . . . accesses a computer ‘without authorization’ when [s]he gains admission to a computer without approval.” at 204. Id. “[A]n employee ‘exceeds authorized access’ when [s]he has approval to access a computer, but uses [her] access to obtain or alter information that falls outside the bounds of [her] approved access.” Id. “Notably, 4 neither of these Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 5 of 9 definitions extends to the improper use of information validly accessed.” Id. Pyles argues that the CFAA did not apply to her actions during her employment with TSI because she, as the human resources director, had full access to the computer information. Under the WEC Carolina framework, we disagree. Pyles accessed both the main computer network and financial servers without authorization or in excess of her authority. termination email of her account authorization. in losses employment, and Pyles Additionally, upon accessed corporate Blackberry company-issued her without Moreover, TSI demonstrated damage that resulted from Pyles’ actions. Thus, there was sufficient evidence for a reasonable jury to have found in TSI’s favor. B. A person violates the ECPA by: “(1) intentionally access[ing] without authorization a facility through which an electronic communication intentionally exceed[ing] service an is provided; authorization to or (2) access that facility; and thereby obtain[ing], alter[ing], or prevent[ing] authorized access to a wire or electronic communication while it is in electronic storage in such system.” Pyles limits her ECPA challenge 18 U.S.C. § 2701(a). to whether she acted “without authorization” or “exceed[ed] [her] authorization” in 5 Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 6 of 9 accessing TSI’s computer system. * Pyles contends not only that TSI granted her permission to access the computer system, but also that her actions did not go outside the bounds of that permission. We disagree. Authorization is a matter of permission and dependent on its scope, properly not used. on whether See WEC information Carolina, 687 validly accessed F.3d 204. at was Here, although Pyles was permitted to use TSI’s email to carry out her duties as human resources manager, she was not authorized to access the server through manner she did here. which the email functioned in the Additionally, her authorization to access the Blackberry terminated with her employment. Thus, there was sufficient evidence for a reasonable jury to have found in TSI’s favor. II. In Virginia, to establish a breach of fiduciary duty, a plaintiff duty, must (2) the resulted from show that defendant the (1) the breached breach. defendant that duty, Informatics * owed and a fiduciary (3) damages Applications Grp., Accordingly, Pyles has abandoned any challenge related to the other elements of her ECPA violation. Fed. R. App. P. 28(a)(8)(A); Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6 (4th Cir. 1999). 6 Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 7 of 9 Inc. v. Shkolnikov, 836 F. Supp. 2d 400, 424 (E.D. Va. 2011). “[A]n employee . . . owes a fiduciary duty of loyalty to [her] employer during [her] employment.” Partners, LLC, 576 S.E.2d 752, Williams v. Dominion Tech. 757 (Va. 2003). This duty “prohibits the employee from acting in a manner adverse to his employer’s interest.” Hilb, Rogal & Hamilton Co. of Richmond v. DePew, 440 S.E.2d 918, 921 (Va. 1994). Moreover, “termination does not automatically free a[n] . . . employee from his or her fiduciary obligations” if the action was “founded on information gained during the relationship.” 634 S.E.2d 737, 744 (Va. Today Homes, Inc. v. Williams, 2006) (internal quotation marks omitted). Pyles concedes that she owed TSI a fiduciary duty under Virginia law. She asserts that the district court improperly denied her motion to strike the breach-of-fiduciary-duty claim because, she argues, the information she revealed was not the kind that would give an advantage to a competing business. Nevertheless, the record reveals that she breached her duty by acting in disregarding bad faith TSI’s with interests resulting in damages to TSI. confidential in accessing information the email and by server, Accordingly, the district court properly rejected this claim. 7 Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 Pg: 8 of 9 III. Finally, instructions Pyles challenges allowing for the punitive attorney’s fees in TSI’s favor. district damages and court’s its jury award of It is a “settled rule” that we will not consider issues raised for the first time on appeal absent “fundamental error or a denial of fundamental justice.” In re Under Seal, 749 F.3d 276, 285 (4th Cir. 2014) (internal quotation marks omitted). “Fundamental error is more limited than the plain error standard that [this Court] appl[ies] in criminal cases.” Id. (internal quotation marks omitted). Thus, this court has used the plain error standard “as something of an intermediate step in a civil case.” Id. at 286. “[W]hen a party in a civil case fails to meet the plain-error standard, we can say with confidence fundamental error.” that [s]he has not established Id. To establish plain error, Pyles must show that: was an error, (2) the error was affected her substantial rights. F.3d 941, showing, 954 “we (4th retain Cir. and (3) the error United States v. Robinson, 627 2010). discretion plain, (1) there to Even if Pyles deny relief; makes plain this errors should only be corrected where not doing so would result in a miscarriage of justice or would otherwise seriously affect the fairness, integrity or public 8 reputation of judicial Appeal: 13-1359 Doc: 85 Filed: 11/18/2015 proceedings.” Id. Pg: 9 of 9 (alterations, citation, and internal quotation marks omitted). We have refused to undertake plain error review, however, where a party “failed to make anywhere in its briefs . . . : district court fundamentally or its most essential argument it never contended that the even plainly erred.” In re Under Seal, 749 F.3d at 292; see Makdessi v. Fields, 789 F.3d 126, 132 (4th Cir. 2015) (refusing plain error review where appellant failed to assert that elements of such review were satisfied). claims. Failing to argue either, Pyles has abandoned these Moreover, Pyles’ jurisdictional argument is meritless because the court properly exercised subject-matter jurisdiction over her federal and state-law claims pursuant to 28 U.S.C. § 1331 (2012) (federal question), and 28 U.S.C. § 1367(a) (2012) (supplemental jurisdiction). Accordingly, we affirm the district court’s orders. dispense with contentions are oral argument adequately because presented in the the facts We and legal materials before this court and argument would not aid the decisional process. AFFIRMED 9

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