Massachusetts Lawyers Weekly Features Hannah Joseph’s Analysis of Supreme Court Case

July 15, 2021
, , , , , News

Hannah Joseph’s article, summarizing the Supreme Court’s recent decision in Van Buren v. United States, was published by Massachusetts Lawyers Weekly on July 2, 2021.

The article, titled “Supreme Court narrows Computer Fraud and Abuse Act,” provides in-depth analysis of the Court’s landmark decision, which narrowed the Computer Fraud and Abuse Act (“CFAA”) and resolved a significant circuit split. The article also discusses the ruling’s import and makes practical suggestions for employers that want to preserve the potential to bring a CFAA claim in, e.g., trade secret misappropriation cases.

According to the article, following Van Buren, it no longer matters for purposes of determining CFAA liability that a person obtained computer information for an unauthorized purpose (such as accessing an employer’s confidential information to use at his next employer). It only matters whether the access was authorized to begin with.

In particular, as the article states,

he Van Buren decision has effectively returned the CFAA to its intended form as an anti-hacking statute, targeting external and internal hackers and centering around a gates-up-or-down inquiry.

This holding holds particular significance for trade secrets owners (such as employers) in those circuits that had previously interpreted the statute broadly.

Following Van Buren, it is no longer relevant for purposes of CFAA liability that an employee obtains computer information for an unauthorized purpose. Employers must now show that, in obtaining the computer information, the employee accessed a computer, or an area of a computer (such as a file, folder or database), that was off-limits to him.

Accordingly, employers who are interested in potentially preserving the option of bringing a CFAA claim may want to consider establishing internal firewalls on their computer systems and technologically cordoning their employees from information that they do not need to know in order to perform their roles.

(Doing so is also helpful for purposes of establishing a trade secrets claim but, on the other hand, may be counter to a company’s culture and otherwise slow down workflow processes. The extent to which a company partitions between departments and employees is thus a decision that an employer should make in partnership with its trade secrets counsel.)

Moreover, following Van Buren, companies looking to prevent the scraping of their online data may need to look to other causes of action, including, inter alia, for breach of contract, copyright infringement, trade secrets misappropriation, and under the Digital Millennium Copyright Act.

In addition to creating internal technological barriers (to address threats posed by employees), those companies may want to limit the amount of information they make available to the public (by, e.g., taking down certain information or password-protecting certain pages).

Hannah Joseph is Senior Counsel at Beck Reed Riden LLP, where she focuses her practice on complex commercial litigation. Specializing in the areas of trade secrets law, restrictive covenants, employee mobility, and unfair competition, she regularly litigates issues concerning the use and enforceability of noncompetition, nonsolicitation, and nondisclosure agreements, and counsels both employers and employees regarding the same. She also counsels on the protection of trade secrets. Hannah has been named Super Lawyers’ Rising Star in Massachusetts consecutively since 2016 and has been recognized as a recommended attorney by The Legal 500 United States 2021.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

 

Supreme Court Specifies Limits on Personal Jurisdiction

July 6, 2017
, , , Resources

n June 19, 2017, the United States Supreme Court in Bristol-Myers Squib Co. v. Superior Court of California, issued an 8-1 decision clarifying the bounds of specific jurisdiction over multi-state corporations. Following the trend established by the Supreme Court in its 2014 Daimler AG v. Bauman decision, the Court applied established principles of civil procedure to reach a decidedly pro-business holding that limits specific jurisdiction to cases where the facts at issue arise directly out of defendant’s presence in the forum state.

Background

Over 600 plaintiffs filed suit in state court in California against Bristol-Meyers Squib Co. (“BMS”) claiming that one of BMS’s drugs, Plavix, had injured consumers. Of the 600 plaintiffs, only 86 were California residents – the rest had no connections with California at all (they did not purchase or ingest the drug in California, and were not injured in California). However, each plaintiff’s claim was essentially identical.

BMS moved to dismiss the claims brought by the out-of-state plaintiffs for lack of personal jurisdiction. During the Court’s deliberation on the jurisdictional issue, the Daimler decision came down, effectively foreclosing general jurisdiction as an option in this case.  Instead, the California Supreme Court granted specific jurisdiction over the out-of-state plaintiffs, applying what they termed a “sliding scale approach to specific jurisdiction” in which the exercise of jurisdiction was allowed “based on a less direct connection between BMS’s forum activities and plaintiff’s claims than might otherwise be required.”

Certiorari was granted to determine whether this novel “sliding scale” approach violated BMS’s due process rights.

The Majority Holding

he majority of the Supreme Court held that the California Court’s sliding scale approach did violate the Due Process Clause of the Fourteenth Amendment (characterizing it as a “loose and spurious form of general jurisdiction”) and found that California courts lacked specific personal jurisdiction over the out-of-state plaintiffs under the traditional “arising out of” analysis.

Writing for the majority, Justice Alito explained that what is needed for a finding of specific jurisdiction “is a connection between the forum and the specific claims at issue.” Since the out-of-state plaintiffs had no personal connections to California, there was no reason to submit BMS to the “coercive power of a State that may have little legitimate interest in the claims in question.”

The Dissent

In a dissenting opinion, Justice Sotomayor focused on the apparent unfairness of the majority’s position, noting that the decision could have the effect of making it more difficult to “aggregate the claims of plaintiffs across the country whose claims may be worth little alone.”  In particular, the dissent took issue with the level of relatedness required for a finding of specific personal jurisdiction, arguing that the majority holding narrowed this standard to an unworkable and unfair degree.

Takeaways

n its 2014 Daimler decision, the Supreme Court greatly limited corporate exposure to general jurisdiction by taking an extremely narrow view of where a corporation is “at home.” Now, in BMS, the Court has taken a similarly pro-business approach, this time to specific jurisdiction, and limited the exposure of companies who operate nationwide.

The impact of this decision on class action claims, foreign corporations, and multi-defendant litigation is yet to be seen. If this holding plays out as Justice Sotomayor believes, however, such claims will be severely curtailed, if not entirely stifled. This decision gives a protective shield to corporate defendants, and shifts the burden to plaintiffs to figure out whether and where the appropriate forum exists.

****

Lauren Corbett, the author of this case summary, is an associate at Beck Reed Riden LLP, focusing her practical on complex commercial litigation and employment disputes.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.