In July, the Ninth Circuit Court of Appeals issued two decisions by which it intends to clarify liability under the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”).  The CFAA imposes criminal penalties and civil damages upon 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 . . . .”  For a more complete explanation of the CFAA, please click here.  The two cases are United States v. Nosal (Nosal II), No. 14-10037, 2016 U.S. App. LEXIS 12382 (9th Cir. July 5, 2016) and Facebook, Inc. v. Power Ventures, No 13-17102, 2016 U.S. App. LEXIS 12781 (9th Cir. July 12, 2016).

In Nosal II, the Ninth Circuit, for a second time, considered the scope of the CFAA involving defendant Nosal.  The first time was in United States v. Nosal (Nosal I), 676 F.3d 854 (9th Cir. 2012) (en banc), holding that exceeding the terms of use of computer where access was authorized was not a violation of the CFAA.  The court in Nosal I rejected Nosal’s liability for downloading confidential information from his then employer’s databased to use at a new enterprise.  Although Nosal was authorized to access the database as a current employee, the downloading violated the employer’s confidentiality and computer use policies.  However, violating such terms of use did not constitute a violation of the CFAA; the court distinguished between access restrictions and use restrictions and held that the “exceeds authorized access” prong of section 1030(a)(4) of the CFAA “does not extend to violations of [a company’s] use restrictions.”  (Id. at 863.)  The court affirmed the district court’s dismissal of the five CFAA counts related to Nosal’s conduct.

Undaunted, the United States Attorney prosecuted Nosal in Nosal II under a different factual scenario.  In addition to accessing and downloading computer material during his employment, Nosal also accessed and downloaded material after his employment terminated.  Even though his former employer revoked his access to the employer’s computers, Nosal enlisted the aid of his former executive assistant to access the former employer’s computers.  The executive assistant continued to have permitted access to the former employer’s computers.

The court in Nosal II concluded that Nosal’s use of the executive assistant to access computers to which he had no permitted access violated the CFAA, holding:

“Without authorization” is an unambiguous, non-technical term that, given its plain and ordinary meaning, means accessing a protected computer without permission.  This definition has a simple corollary:  once authorization to access a computer has been affirmatively revoked, the user cannot sidestep the statute by going through the back door and accessing the computer through a third party.

(Nosal II, 2016 U.S. App. LEXIS 12382 at *4.)

The second case Facebook, Inc. v. Power Ventures, Inc., No 13-17102, 2016 U.S. App. LEXIS 12781 (9th Cir. July 12, 2016), applied Nosal I and Nosal II to a specific and complex fact pattern.  In Facebook, the defendant Power Ventures, Inc. (“Power”) operated a social website with the following concept:  “Individuals who already used other social networking websites could log on to Power.com and create an account.  Power.com would then aggregate the user’s social networking information.  The individual, a ‘Power’ user could see all contacts from many social networking sites on a single page.  The Power user thus could keep track of a variety of social networking friends through a single program and could click through the central Power website to individual social networking sites.”  (Id. at *4.)

Power instituted a promotional campaign to generate more users for its site.  It did so by encouraging Facebook users to refer Facebook “friends” to Power.com.  This campaign utilized Facebook to transmit messages both external and internal to Facebook.  Upon becoming aware of Power’s promotional campaign, Facebook transmitted a cease and desist letter to Power instructing Power to terminate its activities.  Facebook also attempted to block Power’s access to Facebook.  Power sought to circumvent the block and continued its promotion.

Facebook filed an action alleging, inter alia, violation of the CFAA.  The district court granted summary judgment in favor of Facebook and awarded damages.  The Ninth Circuit affirmed the district court’s ruling on the CFAA claim while reversing on certain other issues.  The court remanded for reconsideration of appropriate remedies and a recalculation of damages under the CFAA.

In reaching its conclusion, the Ninth Circuit reviewed both Nosal I and Nosal II:

From those cases, we distill two general rules in analyzing authorization under the CFAA.  First, a defendant can run afoul of the CFAA when her or she has no permission to access a computer or when such permission has been revoked explicitly.  Once permission has been revoked, technological gamesmanship or the enlisting of a third party to aid in access will not excuse liability.  Second, a violation of the terms of the use of a website – without more – cannot be the basis for liability under the CFAA.

(2016 U.S. App. LEXIS 12781 at *17-18.)

The court ruled that Power’s original access to the Facebook website through Facebook users (who were also Power.com users) did not violate the CFAA.  The permission of the Facebook user was sufficient to avoid liability.  However, once Facebook served Power with the cease and desist letter, Power no longer had permission to access the Facebook website.  That letter superseded any permission attributable to any Facebook user.

Whether Nosal I, Nosal II and Facebook provide a clear enough road map to computer users and legal counsel as to what constitutes a CFAA violation remains to be seen.  What we do know is that:

(a)     violation of terms of use alone is not a violation of CFAA;

(b)     one cannot circumvent revocation of right of access to computers through the use of third parties or other “gamesmanship’”

(c)     a timely cease and desist letter can revoke permission which third parties may have previously and legitimately provided.