JOLT Digest

Sixth Circuit Rules that High-Volume Phone and Email Campaign Violates Computer Fraud and Abuse Act

By Michael Hoven – Edited by Abby Lauer

Pulte Homes, Inc. v. Laborers’ Int’l Union of N. Am., Nos. 09-2245; 10-1673 (6th Cir. Aug. 2, 2011)
Slip opinion

The Sixth Circuit affirmed in part and reversed in part the United States District Court for the Eastern District of Michigan, which had granted the Laborers’ International Union of North America’s (“LIUNA”) motion to dismiss Pulte Homes’ claim that LIUNA had violated the Computer Fraud and Abuse Act (“CFAA”) by carrying out a phone and email campaign against Pulte. The district court held that Pulte failed to show that LIUNA intentionally caused damage to Pulte’s phone and email systems.

The Sixth Circuit held that Pulte had successfully stated a “transmission” claim under the CFAA but agreed with the district court that it had not stated an “access” claim. The Sixth Circuit concluded that Pulte alleged sufficient facts to state a transmission claim, which requires showing that the defendant intentionally caused damage. The court reasoned that LIUNA’s phone and email bombardment had caused damage to Pulte’s computer system by diminishing Pulte’s ability to send and receive calls and emails. Such damage was also intentional, the court found, because LIUNA likely knew it was causing damage even if it acted without actual knowledge of the consequences of its phone and email barrage. The Sixth Circuit agreed with the lower court that Pulte failed to state an access claim but articulated different reasoning, holding that LIUNA’s actions were not “without authorization” because Pulte allowed members of the public to contact its offices and executives by phone or email. In so holding, the court adopted a “diminished-ability” standard for assessing damage, which may broaden liability under the CFAA.

The Computer Fraud/Data Protection blog provides an overview of the case. Techdirt criticizes the decision for expanding the CFAA beyond its original purpose of combating computer hacking to cover emails sent as part of a labor protest. The Technology & Marketing Law Blog questions whether Pulte had suffered significant damage and whether the allegations were sufficient to demonstrate intent on the part of LIUNA. (more…)

Sixth Circuit Upholds Ohio Anti-Pornography Statute
By Avis Bohlen – Edited by Dmitriy Tishyevich

American Bookseller’s Foundation for Free Expression v. Strickland, Nos. 07-4375/4376 (6th Cir., April 15, 2010)
Opinion

On April 15, the United States Court of Appeals for the Sixth Circuit reversed an Ohio district court’s decision to enjoin the enforcement of an anti-pornography child protection statute, Ohio Revised Code § 2907.31(D)(1), which criminalizes displaying or disseminating harmful materials to juveniles.  The court held that as narrowly construed by the Supreme Court of Ohio, the statute does not violate either the First Amendment or the Commerce Clause of the Constitution.

The Sixth Circuit had previously certified the question as to the scope of the statute to the Ohio Supreme Court.  The Ohio Supreme Court issued its response on January 27, holding that the statute only applies to personally directed electronic communications, such as instant messages, private chat rooms, and person-to-person emails, and not to generally accessible communications on the Internet, like websites or public chat rooms.  In upholding the statute, the Sixth Circuit concluded that the “Internet provisions,” criminalizing the electronic transmission of harmful material to juveniles if the sender “knows or has reason to believe” the recipients to be juveniles, are not unconstitutionally overbroad.  Further, though the court held that the statute does not trigger strict scrutiny because it does not affect constitutionally protected speech among adults, it noted in dicta that it would survive even strict scrutiny because it was narrowly tailored to promote a compelling government interest.  The court also held that the statute does not violate the Commerce Clause.

Cyberlaw Cases provides an overview and history of the case through the Ohio Supreme Court’s January decision. The AP offers an overview of the Sixth Circuit’s decision.  Both the Ohio Attorney General Richard Cordray and groups affiliated with the coalition of publishers and Web site operators that challenged the constitutionality of the statute claimed some degree of victory after the ruling. (more…)

By Tyler Lacey

Federal Prosecutors Launch New Attack Against Online Gamblers in the United States

On June 9, the New York Times reported that federal prosecutors asked four American banks to freeze accounts containing money believed to be used for distributing winnings to online poker players. Wells Fargo, one of the contacted banks, received a court order requiring that the funds be frozen. Professor I. Nelson Rose of Whittier Law School described the move as “surprising” and as a “gamble” by the prosecutors. Professor Rose also said that it is unclear what laws apply to the seizure of individuals’ money.

Canadian Government Decides Not to Regulate Internet Video and Audio Broadcasts

Canadian radio and television broadcasters are required by the Canadian Radio-television and Telecommunications Commission (CRTC) to broadcast a minimum amount of Canadian content. On June 9, Ars Technica reported that the CRTC issued a report saying that although internet audio and video do count as “broadcasting” for the purposes of their regulatory schemes, they will retain a regulatory exemption from providing Canadian content. The CRTC’s decision, while currently supported by major providers of online audio and video such as Google, leaves open the possibility that the CRTC will impose future regulations.

Electronic Frontier Foundation Urges Court to Hold Email Protected Under the Fourth Amendment

On June 10, the Electronic Frontier Foundation (EFF) filed an amicus brief in the Sixth Circuit’s ongoing case Warshak v. United States. The brief argues that the Justice Department violated Warshak’s Fourth Amendment expectation of privacy in his email. The EFF reports that “the government acquired over 27,000 emails spanning over six months from Warshak’s email provider, all without probable cause.” The basis of EFF’s position is that email should receive the same protection against unlawful search and seizure as is given to phone calls, postal mail, and private papers kept at home.

Court Abused Discretion by Failing to Apply eBay Factors

On June 9, Patently-O reported that the Federal Circuit remanded a patent dispute case back to the district court because it failed to consider the eBay factors in its refusal to grant a permanent injunction to the patent holder. In the eBay case, the Supreme Court required a patentee seeking injunctive relief to “demonstrate (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”

Mary J. Blige’s “Family Affair” Not a Copyright Violation
By Jia Ryu – Edited by Anthony Kammer

Jones v. Blige
United States Court of Appeals for the Sixth Circuit, March 9, 2009
Slip Opinion

On March 9, 2009, the US Court of Appeals for the Sixth Circuit affirmed a Michigan district court’s grant of summary judgment for defendant, Mary J. Blige in a copyright infringement case. Plaintiffs Leonard Jones and James E. White had filed suit against Defendants Mary J. Blige, Andre Young (aka “Dr. Dre”), Universal Music Group (“UMG”), and others for copyright infringement.

The Court of Appeals affirmed the lower court’s decision, holding that the songs were not substantially similar and that the Plaintiffs had not provided sufficient evidence to establish Defendants’ access to their work under the “corporate receipt” doctrine. Exclusive Rights offers commentary, focusing on the distinction made in this case between the corporate receipt doctrine and “bare corporate receipt.” The Michigan Messenger briefly summarized the opinion here. (more…)

Sixth Circuit Affirms Conviction of Counterfeit DVD Importer 
By Dmitriy Tishyevich – Edited by Nicola Carah 

United States v. Teh
Sixth Circuit, July 31, 2008, No. 06-2371 
Slip Opinion 

On July 31, the 6th Circuit affirmed the conviction of Thiah Teh, who was indicted after airport officials searched his luggage and found what appeared to be 756 counterfeited DVDs and 284 counterfeited DVD sleeve packages.  Teh was found guilty and sentenced to one year of probation under 18 U.S.C. § 545, which imposes fines and up to twenty years imprisonment for “knowingly import[ing] . . . merchandise contrary to law.”  Although the government did not indicate at trial what statutory provision provided the basis for the “contrary to law” element of the § 545 violation, it asserted on appeal that Teh’s actions violated 18 U.S.C. § 2318, which provides felony  penalties for up to 5 years for importing counterfeit labels, documentation, or packaging. 

Teh argued on appeal, inter alia, that a copyright violation could not serve as the basis for a § 545 offense under Dowling v. United States, 473 U.S. 207 (1985), which held that distribution of bootleg sound recordings could not be prosecuted under the National Stolen Property Act (“NSPA”).  The Supreme Court reasoned that, by enacting the Copyright Act, Congress intended to address copyright violations with more precision than the NSPA would allow.  In addition, the Court also expressed concern that civil copyright violations might otherwise come within the ambit of the criminal trafficking statute, which carries significantly more serious penalties. 

(more…)