Rajaee v. Design Tech Homes, Ltd et al
MEMORANDUM AND ORDER. It is ORDERED that Defendants Design Tech Homes, Ltd. and Design Tech Homes of Texas, LLC's Motion for Summary Judgment (Document No. 25 ) is GRANTED IN PART, and Plaintiff Saman Rajaee's claims for violations of the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act are DISMISSED WITH PREJUDICE. It is further ORDERED that Plaintiff Saman Rajaee's remaining state law claims for misappropriation of confidential information, violation of the Texas Theft Liability Act, negligence, and conversion are DISMISSED WITHOUT PREJUDICE. (Signed by Judge Ewing Werlein, Jr) Parties notified.(gkelner, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
CIVIL ACTION NO. H-13-2517
DESIGN TECH HOMES, LTD and
DESIGN TECH HOMES OF TEXAS, LLC,§
MEMORANDUM AND ORDER
Pending is Defendants' Motion for Summary Judgment (Document
After carefully considering the motion, response, reply,
and applicable law, the Court concludes as follows.
Plaintiff Saman Rajaee ("Plaintiff") is a Houston resident who
has worked in the residential home construction industry for over
In January 2012, Defendants Design Tech Homes, Ltd. and
Design Tech Homes of Texas, LLC (collectively, "Defendants") hired
Plaintiff to provide sales and marketing for them. 2
position required him to have constant access to email to be able
Document No. 39, ex. C
2 (Pl.'s Decl.).
"answer customer requirements
and be available as needed.
Defendants did not provide Plaintiff with a cell phone or smart
instead used his personal smart device,
Apple iPhone 4 (the "iPhone"), to conduct his work for Defendants. 5
Plaintiff's iPhone was connected to Defendants' Microsoft Exchange
allowing Plaintiff remotely to access the email,
manager, and calendar provided by Defendants. 6
On or about February 2,
Plaintiff notified Defendants
that he would be resigning in two weeks, and Defendants immediately
Id., ex. C
Id., ex. C
Id., ex. C ~ 7.
The parties dispute the origin of this connection.
Plaintiff testifies that Defendants "encouraged [their] employees,
such as me, to use their own personal smart device," that he did
not have the technical knowledge to connect his smart phone device
to a Microsoft Exchange Server, and that "someone acting on behalf
[Defendants]" connected Plaintiff's iPhone to Defendants'
Id., ex. C ~~ 5, 7.
Defendants state that Plaintiff
connected his iPhone without authorization, citing the declaration
testimony of their Network Administrator , Alvaro Sandoval, who
asserted that he himself did not connect the iPhone and was not
aware of the connection until the day of Plaintiff's resignation.
See Document No. 25 at 2-3; Document No. 26-1 at 2 of 109.
Document No. 39, ex. C
Plaintiff's iPhone, restoring it to factory settings and deleting
all the data--both personal and work-related--on the iPhone. 8
Plaintiff sued Defendants, alleging that their actions caused
him to lose "more than 600 business contacts collected during the
course of his career,
(many of which are located
overseas and some are related to family business), family photos,
irreplaceable business and personal photos and
videos and numerous passwords.,,9
Plaintiff alleges violations of
the Electronic Communications Privacy Act and the Computer Fraud
Defendants move for summary judgment. 11
II. Legal Standard
Rule 56 (a)
provides that ,,[t] he court shall grant summary
judgment if the movant shows that there is no genuine dispute as to
fact and the movant is entitled to judgment as a
matter of law."
56 (a) .
Once the movant carries
Id., ex. A at 43:2-44:6, 49:7-14; id., ex. C ~ 9; id., ex.
Document No. 9
16 (2d Am. Compl.).
Document No. 25.
summary judgment should not be granted.
Morris v. Covan World Wide
Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).
A party opposing
a properly supported motion for summary judgment may not rest upon
mere allegations or denials
in a pleading,
assertions that a fact issue exists will not suffice.
nonmoving party must set forth specific facts showing the existence
issue concerning every essential component of its
"A pa.rty asserting
cannot be or
genuinely disputed must support the assertion by:
particular parts of materials in the record .
that the materials cited do not establish the absence or presence
or that an adverse party cannot produce
admissible evidence to support the fact./1
FED. R. Cry. P. 56(c) (1).
"The court need consider only the cited materials,
consider other materials in the record./1
Id. 56(c) (3).
In considering a motion for summary judgment,
court must view the evidence "through the prism of the substantive
2505, 2513 (1986).
Anderson v. Liberty Lobby, Inc., 106 S. Ct.
All justifiable inferences to be drawn from the
underlying facts must be viewed in the light most favorable to the
Ma tsushi ta Elec.
Zeni th Radio
"If the record,
this light, could not lead a rational trier of fact to find/l for
the nonmovant, then summary judgment is proper.
Kelley v. Price-
Macemon, Inc., 992 F.2d 1408, 1413 (5th Cir. 1993).
On the other
hand, if "the factfinder could reasonably find in [the nonmovant' s]
standards of Rule 56 are met,
a court has discretion to deny a
motion for summary judgment if it believes that "the better course
would be to proceed to a full trial."
Violation of the Electronic Communications Privacy Act
Plaintiff alleges that "Defendants accessed Plaintiff's smart
Plaintiff's communications stored on his smart device in violation
of 18 USC §2701(a) (1)
Stored Communications Act,
Title 18 U.S.C.
2701 is part of the
which Congress passed as part of the
Electronic Communications Privacy Act ("ECPA") to protect potential
See Garcia v. City of Laredo, Tex., 702 F.3d 788, 791
(5th Cir. 2012).
Section 2701(a) (1) provides that whoever "inten-
tionally accesses without authorization a facility through which an
electronic communication service is provided
12 Document No.
9 ~ 20. In his Response to Defendants' Motion
for Summary Judgment, Plaintiff waives this claim by failing to
See Document No. 39.
electronic communication while it is in electronic storage in such
system shall be punished as provided in subsection
Assuming that a cell phone
could be considered a "facilityll under the Stored Communications
electronic storage under the statute.
702 F.3d at 793.
Accordingly, Plaintiff's personal data that he stored on his iPhone
is not protected by Section 2701, and his ECPA claim is dismissed.
Violation of the Computer Fraud and Abuse Act
economic damages valued at more than $5,000,"
in violation of the
Computer Fraud and Abuse Act ("CFAAII), 18 U.S.C.
the CFAA is a criminal statute, Section 1030(g) provides a private
right of action "for [a]ny person who suffers damage or loss by
reason of a violation of this section.
Sys. Int'l, Inc. v. Roehrs, 470 F.3d 1150, 1156 (5th Cir. 2006).
"A civil action for a violation of this section may be brought only
subsection (c) (4) (A)
Document No. 9
The only factor
that is potentially relevant in this case is "loss to 1 or more
persons during any 1--year period
aggregating at least $5,000
1030(c) (4) (A) (i) (I)
Defendants argue that Plaintiff's CFAA claim fails as a matter
law because Plaintiff has produced no evidence of any loss
cognizable under the CFAA that aggregates to at least $5,000. 15
Plaintiff responds that "[t]he present case relates to intentional
deletion of data and documents and
pled facts supporting a CFAA interruption of service and loss.
losses are less than
Because Plaintiff bears the ultimate burden of proving loss at
trial, Defendants may move for summary judgment "by 'showing' --that
is, pointing out to the district court--that there is an absence of
evidence to support the nonmoving party's case."
Catrett, 106 S. Ct. 2548, 2554 (1986).
Defendants are not required
to produce evidence negating Plaintiff's claim.
Defendants have argued that
Celotex Corp. v.
1d. at 2553.
no evidence of
14 The statute's other factors
that may give rise to a civil
cause of action involve medical records, physical injury, threats
to public health or safety, and damage affecting United States
Government computers used in furtherance of the administration of
justice, national defense, or national security.
See 18 U.S.C.
§ 1030 (c) (4) (A) (i) .
Document No. 25 at 13-15; Document No. 40 at 4-5.
Document No. 39 at 17 (emphasis in original).
within the meaning of the statute,
it is Plaintiff's burden to
produce evidence--not merely to rely on his pleadings--in order to
demonstrate the existence of a genuine issue of material fact.
id. at 2552 ("[T]he plain language of Rule 56(c) mandates the entry
of summary judgment,
after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
and on which that party will bear the burden of proof at
trial."); Modrowski v. Pigatto, 712 F.3d 1166, 1170 (7th Cir. 2013)
case, he was obliged to point to evidence that,
believed by the trier of fact, would be sufficient to show that his
loss did in fact exceed $5,000").
evidence of statutory loss, he does cite--albeit in a footnote and
without explanation--to paragraph 11 of his Declaration, in which
he describes the losses he suffered as a result of Defendants'
deletion of his personal data. 17
Plaintiff testifies that he lost:
pictures of his personal home rehabilitation project,
(2) pictures and video of family, friends, and his dogs, which he
values at $3,500;
(3) all cell phone contacts after 2009, which he
at 17 n.90; Document No. 39, ex. C ~ 11.
based on his
(4) all of Plaintiff's text messages, which he values at $1,000;
all of his notes and email accounts,
which he values at
Defendants reply that none of these qualify as "loss" under
The CFAA defines "loss" as "any reasonable cost to any
victim, including the cost of responding to an offense, conducting
a damage assessment, and restoring the data, program,
information to its condition prior to the offense, and any revenue
because of interruption of service."
1030 (e) (11).
'loss' encompasses only two types of harm: costs to investigate and
respond to an offense,
and costs incurred because of a service
610, 630 (S.D. Tex. 2011)
719 F. Supp.
(Ellison, J.); Nexans Wires S.A. v. Sark-USA,
562-63 (2d Cir. 2006)
(citing Quantlab Techs.
Inc., 319 F.
aff'd 166 F.
(holding $10 million in lost profits caused
by misappropriation of confidential data was not recoverable under
connected to an "interruption of service.")); see also Resdev, LLC
Document No. 39, ex. C
Document No. 40 at 4-5.
v. Lot Builders Ass'n, Inc., 6:04-CV-13740RL31DAB, 2005 WL 1924743,
at *4 (M.D. Fla. Aug. 10, 2005)
("By use of the term 'cost' and its
addressing, an unauthorized-computer-access event, the CFAA plainly
narrow grouping of
distinct from- -and thus
excluding--the far greater range of losses that could flow from a
violation of the CFAA..").
Plaintiff has not produced evidence of any costs he incurred
to investigate or respond to the deletion of his data, nor do the
losses and damages for which he does produce evidence arise from an
"interruption of service."
See M-I LLC v. Stelly,
759, 780 (S.D. Tex. 2010)
733 F. Supp. 2d
("case law has consistently
interpreted the loss provision to encompass only the costs incurred
as a result of investigating or remedying damage to a computer, or
costs incurred because the computer's service was interrupted");
Alliantgroup, 803 F. Supp. 2d at 630 (granting summary judgment on
CFAA claim where plaintiff
"does not allege an interruption of
incurred to investigate and respond to an interruptions or any
service interruption"); Clinton Plumbing
Heating of Trenton, Inc.
v. Ciaccio, CIV. 09-2751, 2010 WL 4224473, at *6 (E.D. Pa. Oct. 22,
("Various courts have interpreted 'loss' to mean the remedial
computer for damage,
(citations omitted); Nexans Wires, 319 F. Supp. 2d at 477, aff'd,
had lost revenue
because the computer systems . . . were down, that would seem to be
the type of lost revenue contemplated by the statute."); see also
Inc. v. McMillian, CIV.A. 05-1979, 2007 WL 2264457, at *2
(W.D. La. Aug. 6, 2007)
(although defendants allegedly deleted data
interruption of service").
Accordingly, Plaintiff has not offered
evidence sufficient to raise a genuine issue of material fact that
Plaintiff's CFAA claim is dismissed.
This Court's original jurisdiction is based solely on federal
Plaintiff's remaining causes of action--for
Texas Theft Liability Act, negligence, and conversion--all arise
under and allege serious issues of Texas law.
jurisdiction over these remaining state law claims.
supplemental jurisdiction . . . if .
See 28 U.S.C.
(3) the district court has
dismissed all claims over which it has original jurisdiction.");
Enochs v. Lampasas Cnty., 641 F.3d 155, 161 (5th Cir. 2011)
general rule is to dismiss state claims when the federal claims to
which they are pendent are dismissed.") .
For the foregoing reasons, it is
ORDERED that Defendants Design Tech Homes,
Tech Homes of Texas, LLC's Motion for Summary Judgment
No. 25) is GRANTED IN PART, and Plaintiff Saman Rajaee's claims for
violations of the Electronic Communications Privacy Act and the
Computer Fraud and Abuse Act are DISMISSED WITH PREJUDICE.
Plaintiff Saman Rajaee's
remaining state law
claims for misappropriation of confidential information, violation
of the Texas Theft Liability Act, negligence, and conversion are
DISMISSED WITHOUT PREJUDICE.
Plaintiff is reminded that the period of limitations to file
their state claims in state court is tolled for a period of thirty
(30) days after the claims are dismissed unless state law provides
for a longer tolling period.
The Clerk shall notify all parties and provide them with a
signed copy of this Order.
SIGNED at Houston, Texas, on this
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