Shefts v. Petrakis
Filing
272
ORDER & OPINION Entered by Judge Joe Billy McDade on 3/14/13. The Court has herein resolved all remaining outstanding questions related to the calculation of damages in this case, assuming that the jury will find Defendants liable. If liability under the SCA is found as to the Yahoo! email claim, the fact that Plaintiff does not seek actual damages does not preclude his recovery of statutory damages under the SCA. (SW, ilcd)
E-FILED
Thursday, 14 March, 2013 03:57:16 PM
Clerk, U.S. District Court, ILCD
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
JAMISON SHEFTS,
Plaintiff,
v.
JOHN PETRAKIS, KEVIN MORGAN,
HEIDI HUFFMAN, and ACCESS2GO,
INC., an Illinois corporation,
Defendants.
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Case No. 10-cv-1104
ORDER & OPINION
This matter is before the Court on Plaintiff‟s brief to proceed with the
remaining claim within Count III of Plaintiff‟s First Amended Complaint under the
Stored Communications Act (“SCA”). (Doc 270). Plaintiff originally claimed that
Defendants violated the SCA by accessing his Access2Go email, his Blackberry text
messages, and his Yahoo! email, but the Court already determined that Plaintiff
could not recover for Defendants‟ conduct as to the Access2Go email and Blackberry
text messages. (Docs. 249 & 268). On February 20, 2013, the Court issued an
Order resolving a number of questions relating to the calculation of damages for
remaining claims, should liability be found. (Doc. 269). Because it appeared that
Plaintiff dropped the SCA claim regarding the Yahoo! email messages in his initial
brief on damages, the Court did not address those damages in the previous Order.
(Doc. 269; Doc. 261 at 8). Plaintiff has since notified the Court of his intent to
pursue the Yahoo! SCA claim; thus, the Court will address the remaining question
raised in Defendants‟ brief on damages asking “whether, under the SCA, the fact
that Plaintiff does not seek actual damages will prevent his recovery of statutory
damages.” (Doc. 270; Doc. 263 at 5). As noted in the last Order, any assumptions
made do not prejudice Defendants‟ arguments against liability as the Court
assumes that the jury will find in Plaintiff‟s favor for the purpose of analysis only.
I. Does the fact that Plaintiff does not seek actual damages under the
SCA prevent his recovery of statutory damages?
In his brief responding to Defendants‟ initial brief on damages, Plaintiff
asserts that the SCA‟s language permits him to recover statutory damages as an
alternative to actual damages, and thus, that his decision not to seek actual
damages does not prevent his recovery of statutory damages. (Doc. 264 at 2). The
Court agrees with Plaintiff‟s position. Defendants‟ argument relies heavily on Van
Alstyne v. Electronic Scriptorium, Ltd., in which the Fourth Circuit held that “the
plain language of [18 U.S.C.] § 2707(c) unambiguously requires proof of actual
damages as a prerequisite to recovery of statutory damages.” 560 F.3d 199, 206
(4th Cir. 2009). The Van Alstyne court based this interpretation on a prior Supreme
Court decision, in which the Supreme Court interpreted language in the Privacy Act
that was “substantively identical” to § 2707(c) to limit a Plaintiff‟s recovery in this
way. Id. at 204-06 (citing Doe v. Chao, 540 U.S. 614 (2004)).
As noted by the Southern District of New York in Pure Power Boot Camp,
Inc. v. Warrior Fitness Boot Camp, LLC, though, there are arguments suggesting
that this Supreme Court precedent should not control the interpretation of §
2707(c), as several other district courts have also concluded. 759 F. Supp. 2d 417,
427 (S.D.N.Y. 2010) (“Doe is dubious authority for the proposition that Section
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2707(c) does not mean what it provides, recovery of „minimum statutory damages of
$1,000‟” (quoting Freedman v. Town of Fairfield, No. 3:03CV01048, 2006 WL
2684347, at *3 (D. Conn. Sept. 19, 2006))); In re Hawaiian Airlines, Inc., 355 B.R.
225, 230 (D. Haw. 2006) (noting that the structures of the Privacy Act and the SCA
are not similar enough for the former to be directly applicable to the latter); Cedar
Hill Assocs., Inc. v. Paget, No. 04 C 0557, 2005 WL 3430562, at *2 (N.D. Ill. Dec. 9,
2005) (holding that 18 U.S.C. § 2701 et seq. does not require actual damages as a
precursor to recovery).
First, the decision in Van Alstyne is not based on a Supreme Court
interpretation of the SCA, but of the earlier Privacy Act. In the Doe case itself, the
Supreme Court distinguished the SCA as irrelevant to the interpretation of the
Privacy Act when it rejected the plaintiff‟s attempt to analogize the two in support
of his argument that the Privacy Act authorized liquidated damages remedies
similarly to the SCA. Doe, 540 U.S. at 626. The Court refused to draw a connection
between the two statutes, explicitly stating that “the trouble with Doe‟s position is
its reliance on the legislative histories of completely separate statutes passed well
after the Privacy Act.”
Id.
The court in Van Alstyne, nonetheless, was not
persuaded by this language, reasoning that “the Doe Court‟s refusal to interpret a
statute not before it does not carry the authoritative weight [plaintiff] would
prescribe it.” Van Alstyne, 560 F.3d at 208. While this Court agrees that the Doe
Court‟s refusal to interpret the SCA does not conclusively determine that the SCA
permits an award of statutory damages without proof of actual damages, there is
also no language to conclusively determine the contrary. What can be extracted
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from the Court‟s language in Doe is that the Court did not refute plaintiff‟s
proposition that the SCA authorizes true liquidated damages remedies, and that
despite similar constructions, the damages provision under the Privacy Act is
decidedly distinct and not “substantively identical to § 2707(c).” Van Alstyne, 560
F.3d at 206. Simply put, Doe does not apply to the case at hand.
Thus, as no Supreme Court case pointedly decides the issue of statutory
damages under the SCA and the only appellate case relies on an interpretation of a
different statute, the Court shall assess the statutory construction, legislative
history, and other district court decisions regarding § 2707(c) to support its
conclusions.
a. Statutory Construction
The relevant portion of 18 U.S.C. § 2707(c) provides:
(c) Damages.--The court may assess as damages in a civil action under this
section the sum of the actual damages suffered by the plaintiff and any
profits made by the violator as a result of the violation, but in no case shall
a person entitled to recover receive less than the sum of $1,000.
18 U.S.C. § 2707(c).
A plain reading of the statute seems to indicate that § 2707(c) provides a
means of calculating damages allowing the court to assess the sum of actual
damages and any profits, but in the absence of those variables, a person entitled to
recovery can at least recover the statutory minimum. 18 U.S.C. § 2707(c). From a
practical standpoint, this viewpoint bears logic as actual damages may often be very
difficult to prove in SCA cases, when, for example, the SCA violation is an
unauthorized access of email which results in no financial harm to the plaintiff. To
contrast this provision with that which the Supreme Court analyzed in the Doe
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case, the relevant portion of 5 U.S.C. § 552a(g)(4) of the Privacy Act states that if a
court determines that an agency violated the statute
in a manner which was intentional or willful, the United States shall be
liable to the individual in an amount equal to the sum of—(A) actual
damages sustained by the individual as a result of the refusal or failure, but
in no case shall a person entitled to recovery receive less than the sum of
$1,000.
5 U.S.C. § 552a(g)(4).
In § 552a(g)(4), the restrictive language shall be liable seems to dictate actual
damages as the only remedy in that clause, whereas in § 2707(c), the language that
the court may assess the sum of actual damages and any profits seems to offer that
formula as one means of calculation.
b. Legislative History
Legislative history supports this analysis of the statute, as Congress
expressly states that “subsection (c) provides the measure of damages under this
section.” H.R. REP. NO. 99-647, at 74 (1986) (emphasis added). The House Report
accompanying the SCA further explains that “damages include actual damages, any
lost profits but in no case less than $1,000,” and the decision to use the word
“include” implies that recovery is not strictly limited to actual damages but rather
encompasses a broader scope. Id. (emphasis added). The subsequent Senate Report
confirms this belief when it provides “. . . damages under the section including the
sum of actual damages suffered by the plaintiff and any profits made by the violator
as the result of the violation as provided in (c) with minimum statutory damages of
$1,000.” S. REP. NO. 99-541, at 43.
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The court in Van Alstyne refused to consider the legislative history in its
analysis because it found the statutory language “plain and unambiguous,” but this
Court respectfully disagrees with that approach, particularly because the Doe Court
relied on legislative history in reaching its own determination on the Privacy Act.
Van Alstyne, 560 F.3d at 207; Doe, 540 U.S. at 622-23.
c. Other District Court Decisions
As previously noted, a number of district court decisions have addressed the
issue and found that the SCA does not require actual damages as a precursor to
recovery. Cedar Hill Assocs., Inc. v. Paget, No. 04C0557, 2005 WL 3430562, at *2
(N.D. Ill. Dec. 9, 2005). The court in Van Alstyne addressed and rejected the district
court decisions reached in Freedman, Hawaiian Airlines, and Cedar Hill Associates.
Van Alstyne, 560 F.3d at 206. For the reasons stated above, however, this Court
agrees with the reasoning put forth in these other cases, and because it is not
within the Fourth Circuit, it is not obligated to follow Van Alstyne.1
Thus, if
liability under the SCA is found as to the Yahoo! email claim, the fact that Plaintiff
does not seek actual damages does not preclude his recovery of statutory damages
under the SCA.
CONCLUSION
The Court has herein resolved all remaining outstanding questions related to
the calculation of damages in this case, assuming that the jury will find Defendants
Subsequent district court decisions issued after Van Alstyne also distinguish their
interpretations of Doe v. Chao. See Chadha v. Chopra, No. 12 C 4204, 2012 WL
6044701, at *3 n.3 (N.D. Ill Dec. 5, 2012) (“Though the Supreme Court held that the
Privacy Act‟s virtually identical language did require actual damages, it also
arguably assumed that the SCA did not require actual damages in order to recover
statutory damages.”) (construing Doe, 540 U.S. at 626-27, 639-40)).
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liable. If liability under the SCA is found as to the Yahoo! email claim, the fact that
Plaintiff does not seek actual damages does not preclude his recovery of statutory
damages under the SCA.
IT IS SO ORDERED.
Entered this 14th day of March, 2013.
s/ Joe B McDade
JOE BILLY McDADE
United States Senior District Judge
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