Raju v. Murphy et al
Filing
154
ORDER granting in part and denying in part 140 Motion to Amend; granting 140 Motion for Joinder; finding as moot 145 Motion for Summary Judgment. Signed by District Judge Carlton W. Reeves on 2/28/2019. (DJ)
____________________
No. 3:17-CV-357-CWR-FKB
SESHADRI RAJU,
Plaintiff,
v.
ERIN MURPHY,
Defendant.
____________________
ORDER ON MOTION TO AMEND
____________________
Before CARLTON W. REEVES, District Judge.
On October 31, 2018, the Court entered an Order denying
without prejudice Dr. Seshadri Raju’s motion to amend.
Docket No. 139. Now before the Court is Raju’s renewed
motion. Docket No. 140. The proposed amendment adds a
party, Medtronic Vascular, Inc. (“Medtronic”), and six
substantive claims: (1) copyright infringement (2) federal
misappropriation of trade secrets, (3) state misappropriation
of trade secrets, (4) tortious interference with contract, (5) civil
conspiracy, and (6) unauthorized access to a computer
network.1 Dr. Erin Murphy argues that each of the proposed
claims are futile and as such, the amendment should be
denied.
I
Legal Standard
Rule 12(b)(6) of the Federal Rules of Civil Procedure
authorizes dismissal of actions that fail “to state a claim upon
which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “A
district court may deny leave to amend a complaint if the
amendment would be futile.” Myers v. CitiMortgage, Inc., 557
Fed. App’x 296, 297 (5th Cir. 2014).
When considering a motion to dismiss under Rule 12(b)(6),
the Court accepts the plaintiff’s factual allegations as true and
makes reasonable inferences in the plaintiff’s favor. Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009). The plaintiff’s claims must be
plausible on their face, which means there is “factual content
that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. (citation
omitted). Since Iqbal, the Fifth Circuit has clarified that the
Supreme Court’s “emphasis on the plausibility of complaint’s
allegations does not give district courts license to look behind
those allegations and independently assess the likelihood that
Having already determined that Raju has sufficiently shown good cause
under Rule 16(b) and proper joinder under Rule 20 (Docket No. 139), the
Court will focus on the parties’ futility arguments. However, in the
previous motion to amend, the Court was unable to assess each proposed
additional claim due to undisputed clerical and substantive deficiencies.
Therefore, the Court will still consider whether good cause exists for each
claim.
1
2
the plaintiff will be able to prove them at trial.” Harold H.
Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n. 44 (5th
Cir. 2011).
The Court now turns to the claims.
II
Copyright Infringement
Murphy argues that the copyright infringement claim is
deficient because (1) the Copyright Act does not protect
Raju’s surgical procedures, (2) there is no allegation of the
ownership of a valid copyright, (3) there is no allegation of
actionable copying, and (4) there are no alleged damages.
“To prove copyright infringement, a plaintiff must establish
(1) ownership of a valid copyright; (2) factual copying; and (3)
substantial similarity.” Nola Spice Designs, L.L.C. v. Haydel
Enters., Inc., 783 F.3d 527, 549 (5th Cir. 2015) (citation omitted).
The Copyright Act does not extend protection “to any idea,
procedure, process, system, method of operation, concept,
principle, or discovery, regardless of the form in which it is
described, explained, illustrated, or embodied in such work.”
17 U.S.C. § 102(b).
Murphy’s first argument is unpersuasive. Raju is alleging a
copyright violation over the use of his surgical videos, not his
surgical procedures. See Docket No. 140-1 at ¶ 67. Copyright
protection extends to Raju’s surgical videos. See Concentro
Labs., L.L.C. v. Practice Wealth, Ltd., 623 Fed. App’x 251, 252
(5th Cir. 2015) (“a copyright in a form or a video outlining a
particular procedure does not extend to the procedure itself”).
As for the second argument, Raju submitted to the Court a
copy of his application for copyright registration of his
3
surgical videos and receipts for fees paid. He is awaiting the
issuance of registration certificates. Murphy claims that this is
insufficient to allege ownership of a valid copyright, but the
Fifth Circuit disagrees. “A plaintiff has complied with the
statutory formalities when the Copyright Office receives the
plaintiff’s application for registration, fee and deposit.”
Lakedreams v. Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991). “[T]he
Fifth Circuit has held that ‘defects resulting from lack of
registration are cured when the registration is filed, even if
after suit is filed.’” Hervey v. Keltman Pharm., Inc., No. 3:12-CV625-CWR-FKB, 2015 WL 4673773, at *3 (S.D. Miss. Aug. 6,
2015) (citing One Treasure Ltd., Inc. v. Richardson, 202 F. App’x
658, 661 (5th Cir. 2006)). Raju, therefore, has alleged
ownership of a valid copyright.
Next, Murphy claims that because Raju has alleged only that
Murphy took a surgical video without permission, rather than
actually using it in Murphy’s or Medtronic’s own work, or
any substantial similarity, Raju has failed to allege actionable
copying. Actionable copying consists of the last two elements
of a copyright infringement claim: (1) factual copying, i.e.,
“whether the alleged infringer . . . actually used the
copyrighted material in his own work, and (2) substantial
similarity between the two works.” See Spear Mktg., Inc. v.
BancorpSouth Bank, 791 F.3d 586, 598 n. 62 (5th Cir. 2015)
(quotation marks and citations omitted). Factual copying can
be shown through direct or circumstantial evidence. See
Armour v. Knowles, 512 F.3d 147, 152 (5th Cir. 2007). In Raju’s
proposed complaint, he alleges that the stolen video was used
to develop Medtronic’s venous stent program. See Docket No.
140-1 at ¶¶ 17, 29, 69. This is sufficient to allege actionable
copying.
4
Raju may amend his complaint to include a copyright
infringement claim.
III
Misappropriation of Trade Secrets—Defend Trade Secrets
Act (DTSA)
The proposed complaint also alleges a misappropriation of
trade secrets claim under federal law. Murphy argues that
Raju fails to state a viable claim because (1) Raju’s vein stents
and stenting procedures are not trade secrets as defined by
the Code, (2) there is no allegation that Raju’s purported trade
secrets were misappropriated, and (3) there are no alleged
damages.
Before discussing the merits of Murphy’s arguments, we must
first return to whether good cause exists under Rule 16(b). In
Raju’s first motion to amend, he claimed that part of the
reason he failed to timely seek amendment was because “the
actions of Dr. Murphy and Medtronic could not have been
known prior to filing the Complaint or the deadline to . . .
amend.” Docket No. 111. Raju alleged that subpoenaed
documents contain emails from Murphy to Medtronic
wherein Murphy discloses Raju’s trade secrets. 2
Upon further review of the original complaint, however, the
facts that give rise to this trade secret claim against Murphy
were in fact known to Raju before the amendment deadline.
In the original complaint, Raju alleges that Murphy disclosed
confidential information, including trade secrets, which were
These trade secrets consist of “Raju specific stent placement procedures,
stent deployment procedures, diagnostic methods, and research
compilations.” Docket No. 140-1 at ¶ 17.
2
5
exclusive to Raju, . . . without the express written
authorization of Raju. See Docket No. 1-1 at ¶¶ 11, 15.
The documents subpoenaed from Medtronic allegedly reveal
more disclosures of trade secrets and a conspiracy between
Murphy and Medtronic to steal those trade secrets. Still, Raju
was certainly aware that Murphy had disclosed trade secrets
before the amendment deadline.
Good cause under Rule 16(b) is shown by considering: “(1)
the explanation for the failure to timely move to amend; (2)
the importance of the amendment; (3) potential prejudice in
allowing the amendment; and (4) the availability of a
continuance to cure such prejudice.” Alford v. Kuhlman Corp.,
No. 3:07-CV-756-HTW-LRA, 2010 WL 1257844, at *1 (S.D.
Miss. Mar. 26, 2010) (citing S&W Enter. v. Southtrust Bank, 315
F.3d. 533 (5th Cir. 2003)) (brackets omitted). The Court “does
not mechanically count the number of factors that favor each
side.” EEOC v. Serv. Temps, Inc., No. 3:08-CV-1552-D, 2009 WL
3294863, at *3 (N.D. Tex. Oct. 13, 2009).
Raju’s failure to include a misappropriation of trade secrets
claim at the outset of this case suggests a lack of diligence, but
the last three factors weigh in favor of granting leave to
amend for the reasons stated in the Court’s previous Order.
See Docket No. 139. Considering the four factors as a whole,
the Court finds that Raju has met the good cause standard
despite his knowledge of facts sufficient to have alleged a
misappropriation of trade secrets claim before the deadline.
A private right of action is allowed for misappropriation of
trade secret claims where a plaintiff sufficiently alleges: (1) the
existence of a trade secret; (2) misappropriation of the trade
secret; and (3) the trade secret’s relation to a product or service
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used in, or intended for use in, interstate or foreign commerce.
See 18 U.S.C. § 1836(b)(1). A trade secret is defined as
information that:
(1) the owner . . . has taken reasonable measures
to keep . . . secret; and
(2) derive[s] independent economic value,
actual or potential, from not being generally
known to, and not being readily ascertainable
through proper means by, another person who
can obtain economic value from the disclosure
or use of the information.
Id. § 1839(3).
Raju has sufficiently alleged the existence of a trade secret.
The proposed complaint sets forth allegations regarding
procedures, methods, and compilations that Raju developed.
Trade secrets, as defined by the Code, include:
all forms and types of financial, business,
scientific, technical, economic, or engineering
information,
including
patterns,
plans,
compilations, program devices, formulas,
designs, prototypes, methods, techniques,
processes, procedures, programs, or codes
Id. (emphasis added).
The proposed complaint further alleges that Raju
“maintained, or took reasonable precautions to maintain, the
secrecy of his trade secrets,” including the execution of a
confidentiality agreement. Docket No. 140-1 at ¶¶ 9, 15. It also
states that “the information derives independent economic
value from its confidentiality and is not legally accessible to
7
others.” Id. at ¶ 16. Raju claims that document production
reveals that Murphy disclosed this information to Medtronic.
Id. at ¶ 17. The Court must take these allegations as true at this
stage.
Raju’s complaint contains sufficient allegations to support a
misappropriation of trade secrets claim under federal law.
IV
Misappropriation of Trade Secrets—Mississippi Uniform
Trade Secrets Act (MUTSA)
Raju also seeks to bring a claim of misappropriation of trade
secrets under Mississippi law. The question is whether it is
preempted by the Copyright Act.
The Fifth Circuit has found similar state law claims,
specifically unfair competition by misappropriation, to be
preempted by the Copyright Act. See Alcatel USA, Inc. v. DGI
Techs., Inc., 166 F.3d 772, 789 (5th Cir. 1999). That is because
the Copyright Act provides, in relevant part:
[A]ll legal or equitable rights that are equivalent
to any of the exclusive rights within the general
scope of copyright . . . in works of authorship
that are fixed in a tangible medium of
expression and come within the subject matter
of copyright . . . , are governed exclusively by
this title. Thereafter, no person is entitled to any
such right or equivalent right in any such work
under the common law or statutes of any State.
8
17 U.S.C. § 301(a). 3
Congress chose to exclude procedures, concepts, and
methods of operation from federal copyright protection.
“Allowing a state law to protect such works would
undermine the exclusion of such subject matter from the
federal copyright scheme.” Ultraflo, 845 F.3d at 657 (quotation
marks and citation omitted).
The Fifth Circuit utilizes a two-part preemption test to
determine if state law claims are preempted by the Copyright
Act. “First, the cause of action is examined to determine if it
falls ‘within the subject matter of copyright.’ Second, the
cause of action is examined to determine if it protects rights
that are ‘equivalent’ to any exclusive rights of a federal
copyright, as provided in 17 U.S.C. § 106.” Daboub v. Gibbons,
42 F.3d 258, 288-89 (5th Cir. 1995) (citation omitted); see also
Alcatel, 166 F.3d at 785-86. “Under the . . . ‘equivalency test,’ if
the acts of which a plaintiff complains would violate both
state law and copyright law, then the state right is deemed
‘equivalent to copyright’ and thus preempted.” Harrell v. St.
John, 792 F. Supp. 933, 941 (S.D. Miss. 2011) (citation omitted).
“State law claims based on ideas fixed in tangible media are
The Copyright Act may preempt claims for which it does not necessarily
provide protection. “The preemption statute [] sweeps more broadly. It
preempts state protections of works that fall within the subject matter (that
is, the scope) of copyright, regardless whether the works are actually
afforded protection under the Copyright Act. Scope and protection are not
synonyms. . . . The shadow actually cast by the Act’s preemption is notably
broader than the wing of its protection.” Ultraflo Corp. v. Pelican Tank Parts,
Inc., 845 F.3d 652, 656 (5th Cir. 2017) (quotation marks, brackets, and
citations omitted).
3
9
preempted by the Copyright Act.” Spear Mktg., Inc. v.
BancorpSouth Bank, 791 F.3d 586, 597 (5th Cir. 2015).
Murphy argues that surgical procedures are clearly within the
scope of copyright. Raju responds that because the surgical
procedures were not contained in a tangible medium of
expression, this claim is not preempted.
In Ultraflo, the Fifth Circuit concluded that copyright
preemption extended to a state claim seeking to protect the
plaintiff’s valve design. The valve design (an “idea” or
“useful article” not subject to copyright protection) was
contained in a software program (a copyrightable work). See
Ultraflo Corp. v. Pelican Tank Parts, Inc., 845 F.3d 652, 657 (5th
Cir. 2017).
The same is true here. Raju is seeking to protect, inter alia, his
procedures and methods. The surgical procedures are
contained in videos—videos that were allegedly stolen and
disclosed to Medtronic by Murphy. 4 Videos are tangible
mediums of expression. See Cusano v. Klein, 473 F. App’x 803,
804 (9th Cir. 2012) (finding that still and video footage of the
plaintiff’s performances and public appearances as a member
of KISS were within the subject matter of copyright); Ray v.
ESPN, Inc., No. 13-1179-CV-W-SOW, 2014 WL 2766187 (W.D.
Mo. Apr. 8, 2014) (“Once plaintiff’s wrestling performances
were captured on film, they became fixed in a tangible
medium of expression”) (quotation marks, brackets, and
citation omitted); Vaughn v. Kelly, No. 06-C-6427, 2007 WL
804694, at *3 (S.D. Ill. Mar. 13, 2007) (“both the song [Step in
Raju claims that trade secrets were also disclosed through lectures,
presentations, and email communications. See Docket No. 140-1, at ¶¶ 17,
22, 28.
4
10
the Name of Love] and the video are original works of
authorship fixed in a tangible medium of expression. Thus,
the song and video satisfy the subject matter prong”)
(quotation marks, brackets, and citation omitted).
Raju’s surgical procedures and methods all fall within the
subject matter of copyright and, as such, pass the first prong
of the preemption test.
The parties argued only the first prong of the preemption test.
The preemption inquiry, however, does not end there. The
Court must next determine whether this state law claim seeks
to protect rights equivalent to those “within the general scope
of copyright.” This “extra-elements” test looks at whether
“one or more qualitatively different elements are required to
constitute the state-created cause of action being asserted.”
Alcatel, 166 F.3d at 787. If so, there is no preemption. Id.
“Whether a claim is equivalent requires looking to the actual
alleged misconduct and not merely the elements of the state
cause of action.” GlobeRanger Corp. v. Software AG United States
of America, Inc., 836 F.3d 477, 485 (5th Cir. 2016) (citation
omitted).
“The Mississippi Uniform Trade Secrets Act (MUTSA) creates
a cause of action for the misappropriation of another’s trade
secrets when those secrets are accessed by improper means.”
Seven Seas Technologies, Inc. v. Infinite Comput. Sols., Inc., No.
3:13-CV-137-DPJ-FKB, 2018 WL 5625123, at *5 (S.D. Miss. Oct.
30, 2018). “To state a viable claim under MUTSA, a plaintiff
must demonstrate: (1) a trade secret existed; (2) the trade
secret was acquired though a breach of a confidential
relationship or discovered by improper means; and (3) the use
of the trade secret was without the plaintiff’s authorization.”
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Id. “One form of misappropriation is the disclosure or use of
a trade secret of another without express or implied consent
by a person who, to acquire knowledge of the trade secret,
used
improper
means
such
as
theft,
bribery,
misrepresentation, breach or inducement of a breach of a duty
to maintain secrecy.” TLS Mgt. & Mktg. Serv., LLC v. Mardis
Fin. Serv., Inc., No. 3:14-CV-881-CWR-LRA, 2018 WL 3698919,
at *4 (S.D. Miss. Aug. 3, 2018) (quotations, brackets and
citations omitted).
“Because trade secret law protects against not just copying
but also any taking that occurs through breach of a
confidential relationship or other improper means, all ten
circuits that have considered trade secret misappropriation
claims have found them not preempted by the Copyright
Act.” GlobeRanger, 836 F.3d at 486 (collecting cases). But see
Harrell, 792 F. Supp 2d at 941 (“all of the state law claims
asserted by [the plaintiff] have been found preempted under
the Copyright Act. Specifically, claims for antitrust violations,
misappropriation of trade secrets, and claims for unfair
competition by misappropriation were preempted in
Alcatel”). 5 In accordance with the overwhelming case law, the
Court concludes that Raju’s trade secret misappropriation
claim requires establishing an additional element—that the
protected information was acquired through a breach of a
confidential relationship or discovered by improper means—
than what is required to make out a copyright violation.
Harrell is not entirely correct. The only state law claim found to be
preempted in Alcatel was unfair competition by misappropriation. Alcatel,
166 F.3d at 785, 789.
5
12
Having failed the second prong of the preemption test, this
claim is not preempted.
Finally, Murphy restates the same futility arguments that she
did for the federal trade secret misappropriation claim.
Having already concluded that Raju has sufficiently pled the
existence of trade secrets and the misappropriation of those
trade secrets, the Court finds that this claim is neither
preempted nor otherwise deficient.
V
Tortious Interference With Contract
Murphy again claims that Raju’s tortious interference with
contract claim is preempted by the Copyright Act. Murphy
further contends that this claim is futile because (1) Murphy
cannot tortuously interfere with her own contract, (2) Murphy
resigned from her employment, (3) the purported interference
was not wrongful, and (4) there are no alleged damages.
Murphy mischaracterizes Raju’s pleading. Raju alleges that
Medtronic, not Murphy, tortuously interfered with an
existing contract. In his proposed complaint, Raju asserts that
Medtronic employed Murphy without Raju’s knowledge or
authorization, as required by the employment agreement. He
contends that Medtronic had direct knowledge of Murphy’s
employment with Raju and this wrongful interference
prevented Murphy from performing under her existing
contract.
The Court will not address Murphy’s arguments here since
the claim is only against Medtronic, and that claim is not
futile.
13
VI
Civil Conspiracy
“Civil conspiracy is a derivative tort; therefore, liability . . .
depends on participation in an underlying tort. To adequately
plead a claim for civil conspiracy, a plaintiff must adequately
plead the underlying tort” Homoki v. Conversion Servs., Inc.,
717 F.3d 388, 402 (5th Cir. 2013) (citations omitted).
The proposed complaint alleges that Murphy and Medtronic
conspired to misappropriate Raju’s trade secrets, in violation
of federal and state law, and infringe his copyrights. Murphy
argues, once again, that Raju’s civil conspiracy claim is
preempted by the Copyright Act. In support of this, Murphy
cites a Fourth Circuit case, Tire Eng’g & Distribution, LLC v.
Shandong Linglong Rubber Co., Ltd., which concluded that
the additional elements required to prove
conspiracy to infringe copyrights are not
sufficient to escape the Copyright’s Act’s ambit
of preemption. Under Virginia law, the gist of
the civil action of conspiracy is the damage
caused by the acts committed in pursuance of
the formed conspiracy and not the mere
combination of two or more persons to
accomplish an unlawful purpose or use an
unlawful means. Thus the core of the claim for
conspiracy to infringe copyrights is identical to
that under the Copyright Act, and the extra
element of agreement or combination does not
make it otherwise.
682 F.3d 292, 311-12 (4th Cir. 2012) (quotation marks, brackets,
and citations omitted).
14
While the Fifth Circuit has not addressed the question of
whether conspiracy claims are preempted by the Copyright
Act, several of our sister courts in this circuit have done so
and reached the same conclusion. 6
The civil conspiracy claim is not qualitatively different from
the underlying federal copyright claim. As such, Raju’s
conspiracy claim is preempted to the extent that the
conspiracy claim implicates Raju’s copyrighted materials.
However, because Raju also alleges that Murphy and
Medtronic conspired to steal his trade secrets, that claim is not
preempted.
Murphy also asserts that, because the alleged conspiracy
began on August 8, 2015, the civil conspiracy claim is timebarred. Mississippi courts have applied the one-year statute
of limitations period to claims of civil conspiracy. See Harris v.
Jackson Cty., Miss., No. 1:14-CV-435-LG-JCG, 2015 WL
5918196, at *4 (S.D. Miss. Oct. 9, 2015) (citing Jones v. Flour
Daniel Servs. Corp., 32 So. 3d 417, 422-23 (Miss. 2010) and
Gasparrini v. Bredemeier, 802 So. 2d 1062, 1065-66 (Miss. Ct.
App. 2001)). “In the conspiracy context, the cause of action
accrues as soon as the plaintiff knew or should have known
See, e.g., Integrated3d, Inc. v. Aveva, Inc., No. 1:17-CV-159, 2017 WL
1185175, at *5 (E.D. Tex. Nov. 16, 2017); Xpel Technologies Corp. v. American
Filter Film Distributors, No. SA-08-CA-175-XR, 2008 WL 3540345, at *8 n.51
(W.D. Tex. Aug. 11, 2008) (“while an allegation of conspiracy by itself does
not add the extra element needed to survive preemption, when it is
attached to a claim which already meets the extra element test, [such as
misappropriation of trade secrets,] the conspiracy allegation should also
survive”); Cooper v. Sony Music Entm’t Inc., No. CIV.A. 01-0941, 2002 WL
391693, at *4 (S.D. Tex. Feb. 22, 2002).
6
15
of the overt acts involved in the alleged conspiracy.” Shabazz
v. Franklin, 24 F.3d 239, 239 (5th Cir. 1994) (citation omitted).
Raju asserts in his complaint, and the Court must accept as
true, that he was not aware of the conspiracy until he received
documents subpoenaed from Medtronic on June 26, 2018.
Thus, Raju has sought to bring this claim well within the one
year staute of limitations. It is not time-barred.
VII
Unauthorized Access to a Computer or Computer
Network—Computer Fraud and Abuse Act (CFAA)
The CFAA makes unlawful “intentionally access[ing] a
computer without authorization or exceed[ing] authorized
access, and thereby obtain[ing] information from any
protected computer.” 18 U.S.C. § 1030(a)(2)(C). To bring a
claim under the CFAA, Raju must show “not only that [he]
suffered ‘damage’ or ‘loss’ by a defendant’s alleged actions,
but such damage or loss must meet the $5,000 statutory
threshold set forth in 18 U.S.C. § 1030(c)(4)(A)(i)(I).” New
South Equip. Mats, LLC v. Keener, 989 F. Supp. 2d 522, 531 (S.D.
Miss. 2013) (citations omitted). The term “loss” is defined as
[A]ny reasonable cost to any victim, including
the cost of responding to an offense, conducting
a damage assessment, and restoring the data,
program, system, or information to its condition
prior to the offense, and any revenue lost, cost
incurred, or other consequential damages
incurred because of interruption of service.
18 U.S.C. § 1030(e)(11). In other words, cognizable loss under
the CFAA “encompasses only two types of harm: costs to
investigate and respond to a computer intrusion, and costs
16
associated with a service interruption.” Quantlab Techs. Ltd.
(BVI) v. Godlevsky, 719 F. Supp. 2d 766, 776 (S.D. Tex. 2010).
In his proposed complaint, Raju alleges that Murphy, with the
intent to defraud, copied at least one surgical video from his
website and delivered it to Medtronic, and that she absconded
with Raju’s computer after accepting a position with
Medtronic. See Docket No. 140-1 at ¶¶ 69, 77, 82, 83. Raju
further contends that, in his efforts to understand the scope of
and prevent further unauthorized access, he has incurred
costs in excess of $5,000. Id. at ¶ 82.
Murphy argues that a claim under the CFAA is futile because
the proposed complaint contains no factual allegations of (1)
unauthorized access, (2) damage or loss in excess of $5,000, or
(3) fraud as required under 18 U.S.C. § 1030.
In Keener, Judge Lee dismissed the plaintiff’s CFAA claim
because the plaintiff had “neither alleged that it ha[d]
sustained a loss of at least $5,000 nor plead facts that would
support a conclusion that it ha[d] suffered loss totaling at least
$5,000.” Id. Specifically, the plaintiff in that case alleged loss
“including, without limitation, expenses incurred in technical
evaluation . . . to evaluate the breach of [it]'s computer
systems and equipment and to determine what data was
taken.” Id. Here, Raju has gone a step further and attached a
$5,000 amount to his alleged efforts to understand the scope
and prevent further unauthorized access. That, however, is
not specific enough. In Keener, Judge Lee referenced other
district courts that have concluded that generalized
allegations of damage and loss in excess of $5,000 during a
one-year period is insufficient to plead the requisite
jurisdictional amount under the CFAA. See, e.g., Oce North
17
America, Inc. v. MCS Servs., Inc., 748 F. Supp. 2d 481, 488 (D.
Md. 2010) (finding plaintiff’s allegations that it “ha[d]
suffered impairment to the integrity or availability of its data,
programs, systems and information resulting in losses or
damages in excess of $5,000 during a one year period” to be
merely conclusory and insufficient).
It is impossible to ascertain from Raju’s proposed complaint
whether his loss, exclusive of damages, would exceed $5,000
in any one-year period. He does not allege an interruption of
service as a result of Murphy’s actions, or any specific
investigation or response to Murphy’s alleged unauthorized
access to the computer. See Godlevsky, 719 F. Supp. 2d at 776.
As a result, Raju has failed to adequately plead sufficient facts
to bring a claim under the CFAA.
VIII
Conclusion
The motion to amend is granted in part and denied in part.
As such, Murphy’s pending motion for summary judgment
is moot. Within 10 days, Raju shall file his Amended
Complaint consistent with this Order and the parties are
instructed to contact the chambers of the Magistrate Judge
for a case management conference and the entry of a revised
scheduling order.
SO ORDERED, this the 28th day of February, 2019.
s/ CARLTON W. REEVES
United States District Judge
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