American Health Inc. et al v Chevere et al.

Filing 147

OPINION AND ORDER granting 124 motion for summary judgment; denying 125 motion for summary judgment; finding as moot 132 Motion to Strike. Judgment shall be entered accordingly. Signed by Judge Juan M. Perez-Gimenez on 12/22/2017. (PMA)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
AMERICAN HEALTH, INC., et al.
Plaintiffs,
CIV. NO. 12-1678(PG)
v.
DR. SERGIO CHEVERE, et al.
Defendant.

OPINION AND ORDER
Before the court are defendant Dr. Sergio Chevere’s (“defendant”) 1,
and plaintiffs American Health, Inc. (“AHI”), Socios Mayores en Salud, Inc.,
and Socios Mayores en Salud Holding, Inc.’s (collectively, “plaintiffs”)
cross-motions for summary judgment, and both parties’ responses thereto.
See Docket Nos. 124, 125, 128 and 129. For the reasons specified below,
summary judgment is GRANTED for defendant. Plaintiffs’ motion for summary
judgment is accordingly DENIED.
I. FACTUAL BACKGROUND
Defendant was a high-ranking employee at AHI and later worked for
plaintiffs as a consultant. See Docket No.126 Plaintiffs’ Statement of
Uncontested Material Facts (“PSUMF”) ¶¶ 4, 16 and 17. Between May 12 and
May 14, 2012, defendant forwarded fifty-four e-mails from his business email account to his personal e-mail account. See PSUMF ¶ 25. The business
e-mail account was held in plaintiffs’ private servers. See PSUMF ¶¶ 14 and
26. The forwarded e-mails had remained opened in defendant’s business email account inbox before defendant forwarded the same to his personal
account. See Docket No. 126-5 (Plaintiff’s Exhibit E) at page 12.
Defendant did not cause damage to or erase data from plaintiffs’
computer systems. See Docket No.124-3 Defendant’s Statement of Uncontested
Material Facts ¶ 37. Plaintiffs claim the fifty-four e-mails contained
confidential

and

proprietary

information,

but

the court

will

make no

findings of fact to that regard because such a finding would be immaterial
to resolving the controversy before this court.

1 Iraida del Rio and the Conjugal Partnership Chevere-Del Rio are also named
as co-defendants.

Page 2

Civ. No. 12-1678 (PG)

Plaintiffs filed suit on August 20, 2012. They claim to have spent
$178,568.73 from July 31, 2012 to March 31, 2016 in the litigation of the
above-captioned case. See PSUMF ¶ 62. They submit to this court proof of
billings payable to the law firm Casellas, Alcover & Burgos P.S.C. for legal
fees in that exact amount. See Docket No. 126-9 (Plaintiff’s Exhibit I).
See also Docket No. 16-1.
Plaintiffs

claim

that

defendant

misappropriated

proprietary

and

confidential information, in violation of federal and state law. Both
parties now move for summary judgment in their favor.
II. STANDARD
Through

summary

judgment,

courts

“pierce

the

boilerplate

of

the

pleadings and assay the parties’ proof in order to determine whether trial
is actually required.” Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794
(1st Cir. 1992). The Supreme Court encourages employing summary judgment in
federal courts - it “[avoids] full blown trials in unwinnable cases, …
[conserves] parties’ time and money, and [permits] the court to husband
scarce judicial resources.” McCarthy v. Northwest Airlines, Inc., 56 F.3d
313, 314 (1st Cir. 1995). See also Celotex Corp. v. Catrett, 477 U.S. 317
(1986).
A court may grant summary judgment only when the pleadings and the
evidence demonstrate that “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). See also Sands v. Ridefilm Corp., 212 F.3d 657, 660 (1st
Cir. 2000). A factual dispute is “genuine” if it could be resolved in favor
of either party, and “material” if it potentially affects the outcome of
the case. See Calero-Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st
Cir. 2004). The court must review the record “taken as a whole,” and “may
not make credibility determinations or weigh the evidence.” Reeves v.
Anderson Plumbing Productions Inc., 530 U.S. 133, 135 (2000). Credibility
determinations, the weighing of the evidence, and the drawing of legitimate
inferences from the facts are functions of a jury, not of a judge. See id.

Page 3

Civ. No. 12-1678 (PG)

In short, when there is a genuine dispute as to any material fact, and
when a court would be required to make credibility determinations, weigh
the evidence, or draw legitimate inferences from the facts in order to
adjudicate a controversy, summary judgment will not be granted. While no
legitimate inferences can be drawn, the court will construe all reasonable
inferences in favor of the nonmoving party. See Stoutt v. Banco Popular de
Puerto Rico, 158 F. Supp. 2d 167, 171 (D.P.R. 2001). Still, the nonmoving
party is required to demonstrate “through submissions of evidentiary quality
that a trial worthy issue persists.” Iverson v. City of Boston, 452 F.3d
94, 108 (1st Cir. 2006).

III. DISCUSSION
A. The Mise-En-Scène: An Overview of Malicious Cyber Acts and Plaintiffs’
Claims
Cyber technologies are a minefield of technical nuances. Naturally,
the legal landscape that affects cyberspace can be seemingly riddled with
gray areas and be difficult to navigate. Before jumping into the proverbial
Minotaur’s

maze,

the

court

will,

for

clarity’s

sake,

consider

some

introductory notes on malicious cyber acts.
It is well-settled that malicious cyber acts can lead to civil
liability and criminal prosecution. Indeed, criminal enterprises, malign
actors, and those seeking to gain unfair advantages in their ventures
increasingly turn to cyberspace to carry out or facilitate malicious acts.
Put plainly, malicious cyber acts consist of the use of computer driven
technologies to commit malicious acts. They can be parceled into three
distinct categories: (1) acts in which a computer is the target of the
malicious activity, (2) acts in which a computer is used as a tool that is
essential for the malicious activity, and (3) acts in which the use of a
computer is incidental to the malicious activity. These distinctions are
important when applying the law to malicious cyber acts. The court will
discuss the first and second categories in more detail, insofar as the
latter is immaterial to the issue at hand.

Page 4

Civ. No. 12-1678 (PG)

Acts in the first category, in which a computer is the target, can
ordinarily only exist in cyberspace (e.g. hacking and distributed denial of
service attacks). They are an entirely “new” breed of malicious activity.
Traditional statutes are often ill-fitted or otherwise insufficient to carry
civil claims and criminal prosecutions addressing malicious cyber acts of
this sort. Thus, to properly make malicious cyber acts that fall into the
first category actionable, specialized statutes that specifically target
conduct in cyberspace are necessary.
On the other hand, acts in the second category, in which a computer
is an essential tool, are mostly age-old malicious acts (e.g. fraud and
theft) being committed in new ways. They are, in that sense, “old wine in
new bottles.” Take, for example, a fraud committed in cyberspace and one
committed in the physical world: both are fraud, but only the former is a
malicious cyber act. They are different in that a computer was used as an
essential tool in one but not in the other. A malicious cyber act falling
into the second category can be properly addressed through a traditional
statute,

though

specialized

legislation

could

nonetheless

streamline

litigation or prescribe particular remedies. That is to say, while Congress
could very well choose to enact legislation that specifically targets, say,
instances of fraud committed through the use of a computer, traditional
statutes addressing fraud could be perfectly adequate to carry the day.2
In the case at hand, plaintiffs allege that defendant engaged in the
illegal misappropriation of confidential information. Such conduct would
fall squarely within the second category of malicious cyber acts (i.e. acts
in which a computer is used as a tool that is essential for the malicious
activity).

Hence,

traditional

laws

may

be

more

suitable

conduits

for

plaintiffs legal action, rather than statutes that specifically target
malicious cyber acts. In fact, Congress may well have intended such conduct
to remain codified under traditional laws.

2

The previous paragraphs paraphrase Chapter 2 of Ralph D. Clifford’s
Cybercrime: The Investigation, Prosecution and Defense of a Computer Related Crime.
See Ralph D. Clifford, Cybercrime: The Investigation, Prosecution and Defense of a
Computer Related Crime 15-20 (2011).

Page 5

Civ. No. 12-1678 (PG)

Plaintiffs set forth three federal question claims, pursuant to the
Computer Fraud and Abuse Act (CFAA), the Wiretap Act, and the Stored
Electronic Communications Act (SECA). These three statutes are not catchall nets for malicious cyber acts. Instead, they target specific forms of
conduct in cyberspace, under specific circumstances. For the reasons stated
below,

the

court

finds

that

defendant’s

alleged

misappropriation

of

confidential information falls outside the purview of the CFAA, the Wiretap
Act, and the SECA. Instead, the court finds that the remedies plaintiffs
request are more properly sought under state law.
In addition to the federal causes of action, plaintiffs also raised
supplemental

claims

under

Puerto

Rico’s

Industrial

and

Trade

Secret

Protection Act, as well as claims of breach of contract, breach of duty of
loyalty, breach of implied contractual and legal duty, and conversion, all
pursuant to Puerto Rico’s Civil Code. These claims find their way to federal
court through supplemental jurisdiction, on the back of plaintiffs’ federal
question claims.
B. A Chink in the Armor: The Computer Fraud and Abuse Act
Plaintiffs

claim

that

defendant’s

alleged

misappropriation

of

confidential information violates the CFAA. However, plaintiffs fail to
cross the statutory damage threshold.
The CFAA proscribes that whoever “knowingly and with intent to defraud,
accesses a protected computer without authorization, or exceeds authorized
access, and by means of such conduct furthers the intended fraud and obtains
anything of value … shall be punished.” 18 U.S.C. § 1030(a)(4). However, a
civil claim can only be raised when the plaintiff suffers damage or loss
amounting to $5,000 or more. See 18 U.S.C. § 1030(g). Here, plaintiffs did
not.
The CFAA defines the term damage narrowly. Damage “means any impairment
to

the

integrity

or

availability

of

data,

a

program,

a

system,

or

information.” 18 U.S.C. § 1030(e)(8). Certainly, the CFAA’s definition of
damage “does not encompass any harm resulting from the disclosure to a
competitor of trade secrets or other confidential information.” Sun W.

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Civ. No. 12-1678 (PG)

Mortg. Co., Inc. v. Matos Flores, No. CV 15-1082 (GAG), 2016 WL 1030074, at
*4 (D.P.R. Mar. 10, 2016). In fact, damages under the CFAA are restricted
to “the destruction, corruption, or deletion of electronic files, the
physical destruction of a hard drive, or any diminution to the completeness
of the system.” New South Equip. Mats, LLC v. Keener, 989 F.Supp. 2d 522,
529 (S.D.Miss. 2013). It is patently clear that, while defendant may have
acquired

confidential

information

without

plaintiffs’

authorization,

plaintiffs did not suffer any damage, as defined by the CFAA, because of
the intrusion. It is uncontested that defendant caused no impairment to the
integrity or availability of the data. No electronic files were destroyed,
corrupted or deleted, nor was the completeness of the system diminished in
any way.
Plaintiffs now hope to reach the threshold amount only by showing they
suffered loss. They claim that “the evidence … establishes that to (1)
assess the extent of Chevere’s violation, (2) take remedial measures, and
(3) prosecute this case AHI has incurred expenses to the tune of $178,568.73
since the inception of the case.” Docket No. 128 at page 14.
In the context of the CFAA, loss means
any 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). “Although the First Circuit Court of Appeals has
held that the CFAA does not restrict ‘loss’ under the statute to purely
physical damage, nothing in the statute suggests that the alleged loss or
costs can be for matters unrelated to the computer.”

Padmanabhan v. Healey,

159 F. Supp. 3d 220, 224 (D. Mass. 2016), aff’d, No. 16-1159, 2017 WL
3404402 (1st Cir. Jan. 4, 2017) (citing EF Cultural Travel BV v. Explorica,
Inc., 274 F.3d 577, 584 (1st Cir.2001); Shirokov v. Dunlap, Grubb & Weaver,
PLLC, 2012 WL 1065578, at *24 (D. Mass. Mar. 27, 2012)).
Following the aforementioned case law, costs incurred in conducting a
damage assessment and repairing a damaged computer system count towards
determining loss under the CFAA. The time spent by employees assessing

Civ. No. 12-1678 (PG)

Page 7

damage to or fixing a computer system also constitutes loss. However, the
time spent by employees not carrying out tasks specific to the computer
does not (such as a meeting to determine whether to file suit because of an
intrusion). See Wilson v. Moreau, 440 F.Supp. 2d 81, 109 (D.R.I. 2006),
aff’d, 492 F.3d 50 (1st Cir. 2007). Legal fees incurred by a plaintiff
similarly cannot be used to satisfy the $5,000 threshold. See Wilson, 440
F.Supp. 2d 110. In short, loss encompasses costs incurred only when directly
related to the computer and revenues lost due to an interruption of service.
The record evinces that plaintiffs have indeed spent $178,568.73 since
the “inception of this case.” Docket No. 128 at page 14. However, this
amount accounts entirely for legal fees paid to the law firm that represents
them in this case. See PSUMF ¶ 62 (“AHI has incurred expenses to the tune
of $178,568.73 related to legal fees and costs in connection with its
representation…”). As evidentiary support to satisfy the $5,000 statutory
threshold amount, plaintiffs only submitted to the court proof of the fees
they paid (and owe) to the representing law firm. See Docket No. 126-9
(Plaintiff’s Exhibit I). See also Docket No. 16-1. As previously stated,
costs incurred by plaintiffs due to legal fees do not constitute loss in
the context of the CFAA. See Wilson, 440 F.Supp. 2d 110. The factual record
plaintiffs submitted is devoid of other showings of loss that would push
plaintiffs’ claim over the statutory threshold amount. As such, plaintiffs’
claim necessarily fails.
Some courts have held that “loss of confidential and proprietary
information for the benefit of defendants’ competing enterprise” constitutes
loss in the context of the CFAA. Res. Ctr. for Indep. Living, Inc. v.
Ability Res., Inc., 534 F.Supp. 2d 1204, 1211 (D.Kan.2008). See also Meats
by Linz, Inc. v. Dear, 2011 WL 1515028 at *3 (N.D. Tex. Apr. 20, 2011).
Other courts, including district courts in the First Circuit, have made a
more restrictive reading of the statute, holding instead that such loss
does not count towards the CFAA’s statutory threshold. See Wilson, 440
F.Supp. 2d 110 (“revenues lost due to the unfair business competition
resulting from the hacked confidential information did not count towards
the ‘loss’ requirement”)”. See also Sun W. Mortg. Co., Inc. v. Matos Flores,

Page 8

Civ. No. 12-1678 (PG)

No. CV 15-1082 (GAG), 2016 WL 1030074, at *4 (D.P.R. Mar. 10, 2016); Nexans
Wires S.A. v. Sark-USA, Inc., 319 F.Supp.2d 468, 471-477 (S.D.N.Y. 2004).
The First Circuit Court of Appeals has yet to face the question squarely.
In any event, the court agrees with its sister court in Rhode Island:
the use of confidential and proprietary information to the detriment of the
plaintiff does not constitute loss in the context of the CFAA. See Wilson,
440 F.Supp. 2d 110. At any rate, the court need not reach that question
because plaintiffs have failed to show that they suffered any injury due to
the

alleged

misappropriation

of

confidential

information.

In

fact,

plaintiffs themselves rightly observe: “The only reason [defendant] can
claim that he did not use AHI’s confidential and proprietary information to
the detriment of AHI, was because AHI moved quickly to enjoin him from using
and disclosing such information to third parties.” Docket No. 128 at page
8. In light of that concession, and of the absence of any showing of
materialized

damages,

plaintiffs’

CFAA

claim

is

nothing

short

of

an

oxymoron. The court is bewildered that plaintiffs affirm to have suffered
grave injury while conceding they dodged the bullet thanks to their swift
action. Plaintiffs cannot have their cake and eat it too.
Because plaintiffs have failed to establish damage or loss amounting
to $5,000, their CFAA claim necessarily fails, and defendant is entitled to
summary judgment as a matter of law. No material facts relevant to the
adjudication of this claim remain in question. Thus, plaintiffs’ claim is
DISMISSED WITH PREJUDICE.
C. Leaning on a Broken Reed: The Wiretap Act
Next, plaintiffs sustain that defendants violated the Wiretap Act.
However, their reliance on this statute is wholly misguided. The alleged
misconduct does not fall within the purview of the Wiretap Act.
The

Wiretap

Act

punishes

anyone

who

“intentionally

intercepts,

endeavors to intercept, or procures any other person to intercept or
endeavor to intercept, any wire, oral, or electronic communication.” 18
U.S.C.A. § 2511(1)(a). The statute provides for a civil cause of action.
The Wiretap Act defines intercept as “the aural or other acquisition of the

Page 9

Civ. No. 12-1678 (PG)

contents of any wire, electronic, or oral communication through the use of
any

electronic,

mechanical,

or

other

device.”

18

U.S.C.

§

2510(4).

Electronic communication “means any transfer of signs, signals, writing,
images, sounds, data, or intelligence of any nature transmitted in whole or
in part by a wire, radio, electromagnetic, photoelectronic or photooptical
system that affects interstate or foreign commerce… .” 18 U.S.C. § 2510(12).
The

transfer

of

an

e-mail,

thus,

would

constitute

an

electronic

communication.
It is not unlawful “for a person not acting under color of law to
intercept a wire, oral, or electronic communication where such person is a
party to the communication…” 18 U.S.C. 2511(d). However, the interception
violates

the

Wiretap

Act,

despite

the

person

being

a

party

to

the

communication, when “for the purpose of committing any criminal or tortious
act in violation of the Constitution or laws of the United States or of any
State.” Id. Thus, even if defendant was the recipient of the e-mails in
question, he could still have violated the Wiretap Act if he forwarded the
e-mails with the purpose of committing a criminal or tortious act – a
question that is, at this point, very much in dispute.
The First Circuit Court of Appeals has not yet decided whether the
Wiretap Act requires that an interception occur contemporaneously to the
transmission of the electronic communication. Today, this court faces that
issue head-on, where here (a) defendant forwarded the e-mails in question
after transmission of the electronic communications had been completed and
transit concluded, (b) the communications had been opened by the intended
recipient, and (c) had remained opened in his inbox for some time.
“The Fifth Circuit and several others have approved the judicial
definition

of

‘intercept’

as

acquisition

contemporaneous

with

transmission.” TLS Mgmt. & Mktg. Servs. LLC v. Rodriguez-Toledo, No. CV 152121 (BJM), 2017 WL 3242244, at *4 (D.P.R. July 28, 2017)(citing Konop v.
Hawaiian Airlines, Inc., 302 F.3d 868, 878 (9th Cir. 2002); Steve Jackson
Games, Inc. v. United States Secret Service, 36 F.3d 457 (5th Cir. 1994)).
“These circuits have distinguished between materials acquired in transit,
which are interceptions, and those acquired from storage, which purportedly

Civ. No. 12-1678 (PG)

Page 10

are not.” In re Pharmatrak, Inc., 329 F.3d 9, 21 (1st Cir. 2003)(citing
Konop, 302 F.3d at 878). While caselaw from other circuits is not controlling
here, it is certainly persuasive.
Thus, following these decisions, this court agrees that:
the interception must occur while the communication is
transmitted, or the conduct may fall instead under the provisions
of the Stored Wire and Electronic Communications Act, which
prohibits
access
and
disclosure
of
information
stored
electronically. However, it is difficult to determine when a
communication is “in transit” because electronic communications,
such as e-mails or voice-mails, are only transmitted for
milliseconds and stored on different servers as they are routed.
Ralph D. Clifford, Cybercrime: The Investigation, Prosecution and Defense
of a Computer Related Crime 215 (2011). 3 This finding disposes of plaintiffs’
Wiretap Act claim. The e-mails in question had been delivered, opened by
the recipient, and stored in the recipient’s inbox for some time until they
were accessed and forwarded by defendant. Thus, it is patently obvious to
this court that the communications were no longer “in transit,” but had
rather “crossed the finish line of transmission.” Accordingly, the alleged
“interceptions” did not occur contemporaneously to the transmission of the
original e-mail messages. Their subsequent forwarding, which is the object
of defendant’s alleged breach, does not fall under the purview of this
particular act.
In short, this court finds that the acquisition of an electronic
communication must occur contemporaneously to the transmission thereof in
order to constitute an interception within the context of the Wiretap Act.
Defendant allegedly acquired the electronic messages in question to his

3

In Councilman, the First Circuit of Appeals faced the question of whether
an e-mail was an electronic communication when stored temporarily in a server that
acts merely as a conduit for routing the e-mail to its final destination. Ruling
en banc, the Court decided that “the term ‘electronic communication’ includes
transient electronic storage that is intrinsic to the communication process for
such communications.” U.S. v. Councilman, 418 F.3d 67, 79 (1st Cir.2005). But,
given that neither the facts nor the arguments presented in Councilman “invite[d]
consideration of either the existence or the applicability of a contemporaneity or
real-time requirement” the Court did “not plunge into that morass.” Councilman, 418
F.3d 80. Here, the court cannot side-step considering the existence of a real-time
requirement for intercepting an electronic communication in the context of the
Wiretap Act.

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Civ. No. 12-1678 (PG)

personal e-mail after transmission to his business e-mail had concluded,
when acquisition could no longer be considered interception. As such,
plaintiffs’ claim stands a snowball’s chance in hell of succeeding, since
acquiring an electronic communication after transmission has concluded
cannot violate the Wiretap Act. Defendant is entitled to judgment as a
matter of law, and no material facts relevant to the adjudication of this
claim

remain

in

question.

Plaintiffs’

claim

is

thus

DISMISSED

WITH

PREJUDICE.
D. A Flash in the Pan: The Stored Electronic Communications Act
The court now turns to plaintiffs’ SECA claim. The SECA protects
electronic communications that are not in transit and instead lie in
electronic storage. However, the SECA’s framework is highly technical, and
its scope much narrower than plaintiffs suggest. Hence, while plaintiffs
claim that defendant’s alleged misappropriation of certain e-mail messages
containing confidential information violates the SECA, the court finds that
defendant’s actions do not fall within the statute’s limited scope.
Whoever “(1) intentionally accesses without authorization a facility
through which an electronic communication service is provided; or (2)
intentionally exceeds an authorization to access that facility; and thereby
obtains, alters, or prevents authorized access to a wire or electronic
communication while it is in electronic storage in such system” violates
the SECA. 18 U.S.C. § 2701(a). A person aggrieved by a violation of the
SECA may seek civil remedy through a private right of action. See 18 U.S.C.
§ 2707(a). However, defendant did not violate § 2701(a) because the e-mails
in question were not in electronic storage in the context of the SECA at
the time they were allegedly misappropriated.
The SECA defines the term “electronic storage” narrowly. The term does
not apply to all storage of electronic communications. Instead, “electronic
storage” means “(a) any temporary, intermediate storage of a wire or
electronic communication incidental to the electronic transmission thereof;
and (b) any storage of such communication by an electronic communication

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Civ. No. 12-1678 (PG)

service for purposes of backup protection of such communication.” 18 U.S.C.
§ 2510(17).
When the intended recipient opens an e-mail and chooses to keep that
e-mail in the inbox server, that opened e-mail is not held in electronic
storage as defined by the SECA. See Fraser v. Nationwide Mut Ins. Co., 135
F.Supp. 2d 623, 635-36 (E.D.Pa.2001), aff’d in part, 352 F.3d 107, 114 (3d
Cir.2004). See also United States v. Weaver, 636 F.Supp 2d 769, 772-773
(C.D.Ill.2009); Bansal v. Russ, 513 F.Supp. 2d 264, 276 (E.D.Pa. 2007)
(holding that accessing opened e-mail does not violate the SECA). Opened email that remains stored in an inbox server is not held in electronic
storage because it is not in “temporary, intermediate storage” that is
“incidental” to transmission, nor is it acting “for purposes of backup
protection of such communication.” 18 U.S.C. § 2510(17).
In Theofel, the Ninth Circuit held that previously accessed e-mails
are in electronic storage because they offer backup protection. See Theofel
v. Farey-Jones, 359 F.3d 1066 (9th Cir.2004)(although conceding that opened
e-mail does not function as a backup, and is thus not in electronic storage,
when stored only in a Remote Computing Service). However, this court finds
Theofel

unpersuasive.

See

generally

Jennings

v.

Jennings,

401

S.C.

1

(2012)(“We decline to hold that retaining an opened e-mail constitutes
storing it for backup protection under the Act.”). “The Ninth Circuit’s
interpretation

of

storage

for

backup

protection

under

the

Stored

Communication Act cannot be squared with legislative history and other
provisions of the Act.” Weaver, 636 F. Supp. 2d, 772.
Sometimes the addressee, having requested and received a message,
chooses to leave it in storage on the service for re-access at
a later time. The Committee intends that, in leaving the message
in storage, the addressee should be considered the subscriber or
user from whom the system received the communication for storage,
and that such communication should continue to be covered by
section 2702(a)(2).
H.R.Rep. No. 99–647, at 65 (1986). Section 2702(a)(2) refers to

the

treatment of material held in a Remote Computing Service. See 18 U.S.C. §
2702(a)(2).

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Civ. No. 12-1678 (PG)

The SECA distinguishes between electronic communications that are
stored by an Electronic Communications Service (ECS) and a Remote Computing
Service (RCS). An ECS is “any service which provides to the users thereof
the ability to send or receive wire or electronic messages.” 18 U.S.C. §
2510(15). Meanwhile, a system constitutes an RCS when it engages in “the
provision to the public of computer storage or processing service by means
of

an

electronic

communications

system.”

18

U.S.C.

§

2711(2).

“The

classifications of ECS and RCS are context sensitive: the key is the
provider’s

role

with

respect

to

a

particular

copy

of

a

particular

communication, rather than the provider’s status in the abstract.” Orin
Kerr, A User’s Guide to the Stored Communications Act, and a Legislator’s
Guide to Amending It, 72 Geo. Wash. L. Rev 1208, 1215 (2004). 4
When a user leaves previously opened e-mail in an inbox server, the
service provider acts as an RCS, rather than an ECS, with respect to that
particular electronic communication. See id. at 1217. See also Prosecuting
Computer Crimes, DOJML Comment 9-3.000, 5 Department of Justice Manual
(Supp.2011-13)(citing H.R.Rep. No. 99–647, at 65 (1986)). As such, defendant
could not have violated § 2701(a) because that section of the SECA does not
apply to materials held in an RCS. To boot, not even the RCS rules apply to
plaintiffs’ data because American Health Inc.’s private servers constitute
a non-public service provider. An RCS must provide “to the public … [a]
computer storage or processing service.” 18 U.S.C. § 2711(2) (emphasis
ours).
Plaintiffs’ SECA claim is without merit because the e-mails in question
were not in electronic storage as required by § 2701(a) at the time the
alleged misappropriation took place. Furthermore, the e-mails in question
were stored in a non-public service provider acting as an RCS. As such,
defendant is entitled to judgment as a matter of law. No material facts

4 In Theofel, the Ninth Circuit maintained that a service provider could act
as both an ECS and an RCS simultaneously. See Theofel, 359 F.3d 176-177. However,
this court rejects that holding. The provisions that apply to ECS and RCS are
mutually exclusive. Indeed, “if an e-mail message is covered by both the ECS and
RCS rules at the same time, the legal process that is permitted under the RCS rules
would violate the ECS rules.” Kerr, A User’s Guide to the Stored Communications
Act, and a Legislator’s Guide to Amending It, at Footnote 61.

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Civ. No. 12-1678 (PG)

relevant to the adjudication of this claim remain in controversy. Thus,
plaintiffs’ SECA claims are DISMISSED WITH PREJUDICE.
E. Stacked on Pillars of Sand: Plaintiffs’ State Law Claims
Plaintiffs’ remaining claims rely on state law, and found their way
to federal court through supplemental jurisdiction.
When all federal claims are dismissed, the court typically declines
to exercise supplemental jurisdiction over a plaintiff’s state law claims.
See

Camelio

v.

American

Federation,

137

F.3d

666,

672

(1st

Cir.

1998)(“Certainly, if the federal claims are dismissed before trial, … the
state claims should be dismissed as well.”); Rodriguez v. Doral Mortgage
Corp., 57 F.3d 1168, 1177 (1st Cir.1995).
This court has already disposed of plaintiffs’ federal claims. As
such, it will no longer exercise supplemental jurisdiction over plaintiffs’
state law claims. As a result, all of plaintiffs’ state law claims are
DISMISSED WITHOUT PREJUDICE.
IV. CONCLUSION
For the foregoing reasons, defendant’s motion for summary judgment is
GRANTED, insofar as plaintiffs’ federal question claims are without merit,
and defendant is entitled to judgment as a matter of law. Plaintiffs’ motion
for summary judgment is accordingly DENIED. Plaintiffs’ federal question
claims are thus DISMISSED WITH PREJUDICE. As such, this court will no longer
exercise supplemental jurisdiction over plaintiffs’ remaining claims. Thus,
plaintiffs’ state law claims are DISMMISSED WITHOUT PREJUDICE. Judgment
will be entered accordingly.
IT IS SO ORDERED.
In San Juan, Puerto Rico, December 22, 2017.
S/ JUAN M. PÉREZ-GIMÉNEZ
JUAN M. PEREZ-GIMENEZ
SENIOR U.S. DISTRICT JUDGE