Mackie et al v. Doe
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable Andrea R. Wood on 9/27/2016. Mailed notice(lxs, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
EMILY MACKIE and INSPIRED
INTERIORS, INC.,
Plaintiffs,
v.
MASON AWTRY and MICHAEL
MAYES,
Defendants.
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No. 14-cv-09206
Judge Andrea R. Wood
MEMORANDUM OPINION AND ORDER
Emily Mackie and her company, Inspired Interiors, Inc., (“Plaintiffs”) have brought this
lawsuit claiming that Defendants Mason Awtry and Michael Mayes acquired a website with an
address confusingly similar to that of the Inspired Interiors site and used that site to make false
and defamatory statements about Mackie. Plaintiffs also allege that Awtry gained unauthorized
access to Mackie’s personal and business contacts, calendars, and messages on third-party
storage sites. Plaintiffs seek relief for this alleged misconduct under various statutory and
common law theories. Now before the Court is Awtry’s Federal Rule of Civil Procedure 12(b)(6)
motion to dismiss five of the ten counts of Plaintiffs’ Second Amended Complaint: Count One, a
claim under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030; Count Four, a claim under
the Lanham Act, 15 U.S.C. 1125(a); Count Five, a claim under the Anticybersquatting Consumer
Protection Act, 15 U.S.C. § 1125(d); Count Six, a claim under the Illinois Uniform Deceptive
Trade Practices Act, 815 ILCS § 510/1 et seq.; and Count Ten, an Illinois common law claim for
tortious interference with prospective business relations. For the reasons detailed below, the
motion is denied.1
BACKGROUND
The following factual allegations are taken from Plaintiffs’ Second Amended Complaint
(Dkt. No. 31) and accepted as true for purposes of Defendants’ motions to dismiss. Khorrami v.
Rolince, 539 F.3d 782, 784 (7th Cir. 2008).
Mackie is an interior designer and the owner of the Inspired Interiors design firm.
(Second Am. Compl. ¶¶ 13, 14, Dkt. No. 31.) Mackie sought to acquire the domain name
inspiredinteriors.com for her company’s website. (Id. ¶ 18.) When she found that the name was
already owned by a third party who wanted at least $5,000 to relinquish it, she instead acquired
the domain name inspiredinterior.com. (Id. ¶¶ 17-19, 21-23.) Mackie discussed purchasing the
inspiredinteriors.com name with Awtry. (Id. ¶ 24.) Defendants acquired the inspiredinteriors.com
domain name with knowledge of Mackie’s desire to own the name and its similarity to the name
of her company’s website. (Id. ¶¶ 28-30, 41.)
Defendants used the inspiredinteriors.com domain name to launch a website where they
posted Mackie’s picture along with content that described her as a liar and a cheater. (Id. ¶¶ 32,
35, 36, 38.) The website also contained statements that updates were “coming soon.” (Id. ¶ 39.)
In addition, Awtry gained unauthorized access to Mackie’s private third-party data storage
accounts, thereby obtaining her private personal and business information. (Id. ¶¶ 49, 53-69.)
Thereafter, a former employee told Mackie that he thought her company’s website had been
hacked, and a prospective business partner told Mackie that she had tried to visit her company’s
website but had found a different site instead. (Id. ¶¶ 25, 26.) Plaintiffs had a reasonable
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Subsequent to the filing and briefing of the motions to dismiss, Plaintiffs voluntarily dismissed, with
prejudice, their claims against Mayes. Accordingly, his motion to dismiss (Dkt. No. 66) is denied as
moot.
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expectation of entering into and continuing a valid business relationship with that prospective
partner. (Id. ¶ 221.) Defendants’ conduct prevented Plaintiffs’ legitimate expectancies from
developing into valid business relationships. (Id. ¶ 228.) Plaintiffs hired information technology
professionals to investigate the suspected hack of their information and to protect against future
occurrences. (Id. ¶ 92.) They spent more than $5,000 in information technology costs and
attorney’s fees in responding to Defendants’ actions. (Id. ¶ 94.)
Plaintiffs’ Second Amended Complaint asserts ten claims for relief; Awtry challenges the
sufficiency of five of those claims. Count One alleges that Awtry violated the Computer Fraud
and Abuse Act (“CFAA”), 18 U.S.C. § 1030, by accessing Mackie’s private information without
authorization. In Count Four, Plaintiffs assert that Defendants intentionally used the
inspiredinteriors.com domain name to create a false association with Plaintiffs’ business, thereby
violating the Lanham Act, 15 U.S.C. § 1125(a). Count Five alleges that Defendants’ domain
name use also violates the Anticybersquatting Consumer Protection Act (“ACPA”), 15 U.S.C. §
1125(d). In Count Six, Plaintiffs allege that the false statements about her on the
inspiredinteriors.com website violated the Illinois Uniform Deceptive Trade Practices Act
(“UDTPA”), 815 ILCS § 510/1. Count Ten asserts an Illinois common law tort claim for tortious
interference with prospective business relations. Awtry seeks dismissal of these claims pursuant
to Federal Rule of Civil Procedure 12(b)(6).
DISCUSSION
In assessing the sufficiency of a complaint under Rule 12(b)(6), this Court accepts all
well-pleaded allegations in the complaint as true and views them in the light most favorable to
the plaintiffs. Arnett v. Webster, 658 F.3d 742, 751 (7th Cir. 2011). The complaint must provide
enough factual information to state a claim to relief that is plausible on its face and raises a right
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to relief above the speculative level. Doe v. Vill. of Arlington Heights, 782 F.3d 911, 914 (7th
Cir. 2015).
I.
Computer Fraud and Abuse Act
Awtry argues that Plaintiffs’ CFAA claim is insufficient because it fails to allege any
damages for which the statute allows recovery. The CFAA penalizes those who knowingly
access computers without authorization and creates a private right of action for those who have
suffered “damage or loss” as a result of a violation of its terms. 18 U.S.C. §§ 1030(a), (g). Some
courts in this District have held that “damage or loss” is limited to diminution in the
completeness or usability of the data on a computer system. See, e.g., Cassetica Software, Inc. v.
Computer Scis. Corp., No. 09 C 0003, 2009 WL 1703015, at *3 (N.D. Ill. June 18, 2009).
Plaintiffs’ complaint alleges losses resulting only from the costs of investigation of the impact of
the suspected hacking, measures to prevent future occurrences, and attorney’s fees. Because
Plaintiffs do not allege loss of or damage to their data or systems, Awtry asserts that their
damages are not covered.
The “damage or loss” analysis upon which Awtry relies has not yet been adopted by the
Seventh Circuit and has not been universally accepted in this District, however. Numerous
courts, citing the CFAA’s explicit definition of “loss” as including “any reasonable cost to any
victim,” including “the cost of responding to an offense and conducting a damage assessment,”
have interpreted the provision to include the costs associated with conducting investigation and
security assessments in response to a suspected violation of the CFAA. 18 U.S.C. § 1030(e)(11));
Pascal Pour Elle, Ltd. v. Jin, 75 F. Supp. 3d 782, 791 (N.D. Ill. 2014); Farmers Ins. Exch. v.
Auto Club Grp., 823 F. Supp. 2d 847, 854-55 (N.D. Ill. 2011) (collecting cases). This Court finds
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the analysis of those cases to be persuasive and concludes that Plaintiffs need not allege damage
to or unavailability of their data or systems to allege “loss” for CFAA purposes.
The CFAA also restricts private rights of action to plaintiffs whose aggregated loss as a
result of a violation is at least $5,000. 18 U.S.C. § 1030(c)(4)(A)(i)(I). Awtry notes that
Plaintiffs’ complaint alleges expenditures for both information technology costs and attorney’s
fees; he contends that attorney’s fees are not losses covered by the CFAA and that Plaintiffs have
thus failed to allege loss above the threshold required to bring this action. But Plaintiffs’
complaint alleges that they spent “more than $5,000” on the aggregate of information technology
costs and attorney’s fees, and does not detail their expenditures. Their pleading thus does not
allege that their expenditures exclusive of attorney’s fees were less than the $5,000 loss threshold
amount. Accordingly, a conclusion that Plaintiffs’ non-attorney losses fell short of $5,000 may
only be reached by drawing factual inferences in Awtry’s favor, an improper practice at the
motion to dismiss stage. The Court concludes that Count One of Plaintiffs’ complaint states a
sufficient CFAA claim for relief.
II.
Anticybersquatting Consumer Protection Act
The ACPA prohibits registration or use of, or trafficking in, a domain name if the
defendant’s name was identical or confusingly similar to the plaintiff’s distinctive or famous
mark and if the defendant had a bad faith intent to profit from the use of the plaintiff’s mark. 15
U.S.C. § 1125(d). Awtry contends that Plaintiffs’ complaint must be dismissed because they
have not sufficiently alleged that their “Inspired Interiors” mark was distinctive or famous. But
the Second Amended Complaint explicitly alleges that the name is distinctive, that customers
identify it with Plaintiffs, and that they identify it with an upscale interior design service.
(Second Am. Compl. ¶¶ 122, 123, 138, Dkt. No. 31.) Whether a mark is sufficiently distinctive
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to be protectable without proof of secondary meaning and whether it has acquired secondary
meaning are questions of fact. Chattanoga Mfg., Inc. v. Nike, Inc., 140 F. Supp. 2d 917, 923-24
(N.D. Ill. 2001). Plaintiffs’ ACPA claim thus cannot be dismissed at the pleadings stage because
of insufficient claims of a protectable trademark. Awtry also argues that insufficient allegations
of a protectable trademark are fatal to Plaintiffs’ Lanham Act claim in Count Four. But the
Court’s conclusion regarding the factual nature of the trademark-protection question in the
ACPA context also dictates rejection of Awtry’s similar arguments as to the Lanham Act claim.
Awtry argues that a valid ACPA claim must include an explicit allegation that
Defendants intended to profit from their use of Plaintiffs’ mark and that the Second Amended
Complaint must be dismissed because it lacks any such allegation. But ACPA claims have been
found sufficient even in the absence of explicit allegations of intent to profit when the
complaint’s allegations raise a plausible inference of such intent. In Flentye v. Kathrein, 485 F.
Supp. 2d 903, 915 (N.D. Ill. 2007), for example, the plaintiff’s complaint explicitly alleged bad
faith, but included no similarly specific claim of the defendant’s intent to profit from the
confusion between marks. That intent was nonetheless inferred from the plaintiff’s allegations
that the defendant was a direct competitor, and the complaint was found sufficient to state a
claim for relief. Id.
Here, Plaintiffs’ complaint does not claim that the parties were competitors or that
Defendants intended to siphon customers from Plaintiffs’ business for their own. But the
complaint does explicitly allege that Mackie had discussed with Awtry her desire for the
inspiredinteriors.com domain name and that Defendants purchased the name with knowledge of
that desire. The intent to profit from registration of a domain name by selling it to a similarlynamed business is “exactly the wrong Congress intended to remedy when it passed the ACPA.”
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Ford Motor Co. v. Catalanotte, 342 F.3d 543, 549 (6th Cir. 2003). Even in the absence of a
specific profit-motive allegation, Plaintiffs’ complaint raises a plausible inference of the
existence of such motive: to provoke Plaintiffs to offer value to acquire the domain name. Count
Five of Plaintiffs’ complaint is thus sufficient to state a claim for relief under the ACPA.
III.
Uniform Deceptive Trade Practices Act
The UDTPA prohibits various deceptive trade practices, including disparagement of the
goods, services, or business of another entity by a false or misleading representation of fact. 815
ILCS 510/2(a)(7). Count Six of Plaintiffs’ complaint alleges that Defendants violated the
UDTPA by publishing on the inspiredinteriors.com website statements that Mackie was a liar
and a cheater.
Awtry correctly notes that commercial disparagement and defamation are separate legal
concepts under Illinois law and that the UDTPA’s prohibition against commercial disparagement
relates only to statements about the quality of a plaintiff’s goods or services. See Fedders Corp.
v. Elite Classics, 279 F. Supp. 2d 965, 972 (S.D. Ill. 2003). He argues that the claimed statements
about Mackie are directed to her personal integrity rather than her business offerings and are
therefore not actionable under the statute. But Illinois law acknowledges the possibility that a
single statement can constitute both commercial disparagement and defamation. See Allcare, Inc.
v. Bork, 531 N.E.2d 1033, 1037 (Ill. App. Ct. 1988). In such circumstances, “both causes of
action may lie.” Crinkley v. Dow Jones & Co., 385 N.E.2d 714, 720 (Ill. App. Ct. 1978).
According to Plaintiffs’ complaint, Inspired Interiors provided design services through Mackie’s
personal services. Their allegations raise a reasonable inference that a reference to Mackie’s
dishonesty could relate to the quality of the service she provides. The pleadings do not support
an inference that the alleged website postings can be properly construed only as relating to
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Mackie’s personal behavior rather than her business offerings. Awtry’s motion is accordingly
denied as to Count Six of Plaintiffs’ complaint.
IV.
Tortious Interference With Prospective Business Relations
Count Ten of the complaint asserts a claim for tortious interference with Plaintiffs’
prospective business relations. “Under Illinois law, the elements of a claim for tortious
interference with business expectancy are: (1) a reasonable expectancy of entering into a valid
business relationship; (2) the defendant’s knowledge of this expectancy; (3) an intentional and
unjustified interference by the defendant inducing or causing a breach or termination of the
expectancy; and (4) damages to the plaintiff resulting from such interference.” Am. Audio Visual
Co. v. Rouillard, No. 07 C 4948, 2010 WL 914970, at *2 (N.D. Ill. Mar. 9, 2010). Awtry
contends that a valid tortious interference claim must allege a reasonable expectancy of a
business relationship rather than the mere hope of one. But Plaintiffs have indeed alleged more
than a mere hope of a business relationship: their complaint identifies a specific person with
whom they had a reasonable expectation of entering into a business partnership. (Second Am.
Compl. ¶¶ 26, 221, 228, Dkt. No. 31.) This allegation is sufficient to raise a plausible inference
of a reasonable expectation rather than a mere hope of a future relationship.
CONCLUSION
For the foregoing reasons, Defendant Awtry’s motion to dismiss (Dkt. No. 32) is
DENIED.
ENTERED:
Dated: September 27, 2016
__________________________
Andrea R. Wood
United States District Judge
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