• Court Extends the Reach of the Federal Computer Fraud and Abuse Act To Mass E-Mail and Mass Telephone Call Campaigns
  • October 12, 2011 | Authors: Joseph A. Martin; Kevin A. Sachs
  • Law Firm: Archer & Greiner A Professional Corporation - Haddonfield Office
  • With its decision in Pulte Homes, Inc. v. Laborers' International Union of North America, the Court of Appeals for the Sixth Circuit has extended the reach of the federal Computer Fraud and Abuse Act ("CFAA") to mass e-mail and mass telephone call campaigns that diminish the operability of a company's e-mail and telephone systems.
    In Pulte, homebuilder Pulte Homes terminated the employment of a construction crew member.  Shortly thereafter, and to protest the termination, the Laborers' International Union of North America ("LIUNA") began a campaign which involved "bombarding" Pulte's sales offices and executives with thousands of emails and hiring an auto-dialing service and encouraging its members to make thousands of phone calls to Pulte. The emails overloaded Pulte's systems.  Its employees could not access business-related e-mails or send e-mails to customers and vendors.  And the telephone calls clogged access to Pulte's voicemail system and prevented its customers from reaching its sales offices and representatives. The campaign, according to Pulte, effectively stalled its business operations.
    Pulte filed suit alleging, among other claims, violations of the CFAA, for knowingly causing "the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization" to a computer. (18 U.S.C. § 1030(a)(5)(A)). The trial court dismissed Pulte's transmission claims under the CFAA, holding that Pulte failed to state a claim that LIUNA intentionally caused damage to Pulte's computer systems.
    The Court of Appeals for the Sixth Circuit reversed the trial court's decision, ruling that Pulte had alleged facts sufficient to show the intent necessary to plead a CFAA transmission claim. According to the Court, Pulte's allegations that LIUNA had instructed its members to send "thousands" of emails and to "fight back" made it plausible that LIUNA understood that its actions would damage Pulte's technology systems, and thus the allegations were sufficient under the CFAA. The Court also found that Pulte had adequately pled damages simply by alleging that LIUNA's actions "diminished Pulte's ability to use its systems and data because they prevented Pulte from receiving at least some calls and accessing or sending at least some e-mails."
    The Court's decision is important for two reasons.  First, it appears to set a low bar for alleging the facts necessary to satisfy, at least at the pleading stage, the intent element of a CFAA transmission claim.  To the Sixth Circuit, simply sending a large volume of emails or directing a high volume of telephone calls to a company, without more, is sufficient under the CFAA to show that the sender (or the organizer) intended to damage the company. Second, the decision is important because it confirms that a company, to satisfy the required damages element under the CFAA, need only allege that the functionality of its computer system was "diminished" - in this case through volume of transmitted data - not that its system was rendered inoperable.  Together, these principles should make it easier for companies who face e-mail or other data "attacks" to invoke the potent civil and criminal provisions of the CFAA.