Lvrc Holdings LLC v. Brekka

CourtCourt of Appeals for the Ninth Circuit
DecidedSeptember 15, 2009
Docket07-17116
StatusPublished

This text of Lvrc Holdings LLC v. Brekka (Lvrc Holdings LLC v. Brekka) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lvrc Holdings LLC v. Brekka, (9th Cir. 2009).

Opinion

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

LVRC HOLDINGS LLC,  Plaintiff-Appellant, v. No. 07-17116 CHRISTOPHER BREKKA; EMPLOYEE  D.C. No. CV-05-01026-KJD BUSINESS SOLUTIONS INC.; CAROLYN QUAIN; STUART SMITH; BRAD OPINION GREENSTEIN; FRANK SZABO, Defendants-Appellees.  Appeal from the United States District Court for the District of Nevada Kent J. Dawson, District Judge, Presiding

Argued and Submitted March 13, 2009—San Francisco, California

Filed September 15, 2009

Before: M. Margaret McKeown and Sandra S. Ikuta, Circuit Judges, and James V. Selna,* District Judge.

Opinion by Judge Ikuta

*The Honorable James V. Selna, United States District Judge for the Central District of California, sitting by designation.

13373 13376 LVRC HOLDINGS v. BREKKA

COUNSEL

Thomas G. Grace, Las Vegas, Nevada, for the plaintiff- appellant.

Norman H. Kirshman, Las Vegas, Nevada, for the defendant- appellees.

OPINION

IKUTA, Circuit Judge:

LVRC Holdings, LLC (LVRC) filed this lawsuit in federal district court against its former employee, Christopher Brekka, his wife, Carolyn Quain, and the couple’s two con- sulting businesses, Employee Business Solutions, Inc., a Nevada corporation (EBSN), and Employee Business Solu- tions, Inc., a Florida corporation (EBSF). LVRC alleged that Brekka violated the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, by accessing LVRC’s computer “without LVRC HOLDINGS v. BREKKA 13377 authorization,” both while Brekka was employed at LVRC and after he left the company. See 18 U.S.C. § 1030(a)(2), (4). The district court granted summary judgment in favor of the defendants. We affirm. Because Brekka was authorized to use LVRC’s computers while he was employed at LVRC, he did not access a computer “without authorization” in violation of § 1030(a)(2) or § 1030(a)(4) when he emailed documents to himself and to his wife prior to leaving LVRC. Nor did email- ing the documents “exceed authorized access,” because Brekka was entitled to obtain the documents. Further, LVRC failed to establish the existence of a genuine issue of material fact as to whether Brekka accessed the LVRC website without authorization after he left the company.

I

LVRC operates Fountain Ridge, a residential treatment center for addicted persons, in Nevada.1 As part of its market- ing efforts, LVRC retained LOAD, Inc. to provide email, website, and related services for the facility. Among other duties, LOAD monitored internet traffic to LVRC’s website and compiled statistics about that traffic.

In April 2003, LVRC hired Brekka to oversee a number of aspects of the facility. Part of his duties included conducting internet marketing programs and interacting with LOAD. At the time Brekka was hired, Brekka owned and operated EBSN and EBSF, two consulting businesses that obtained referrals for addiction rehabilitation services and provided referrals of potential patients to rehabilitation facilities through the use of internet sites and advertisements. Stuart Smith, the owner and operator of LVRC, was aware of Brekka’s businesses, although he states he was not aware of the full nature of their operations. 1 Because this appeal comes to us from the grant of a motion for sum- mary judgment, we relate the facts in the light most favorable to LVRC. See Nolan v. Heald College, 551 F.3d 1148, 1150 (9th Cir. 2009). 13378 LVRC HOLDINGS v. BREKKA While Brekka worked for LVRC, he commuted between Florida, where his home and one of his businesses were located, and Nevada, where Fountain Ridge and his second business were located. Brekka was assigned a computer at LVRC, but while commuting back and forth between Florida and Nevada, he emailed documents he obtained or created in connection with his work for LVRC to his personal computer. LVRC and Brekka did not have a written employment agree- ment, nor did LVRC promulgate employee guidelines that would prohibit employees from emailing LVRC documents to personal computers.

In June 2003, Brekka sent an email to LOAD’s administra- tor, Nick Jones, requesting an administrative log-in for LVRC’s website. Jones sent an email with the administrative user name, “cbrekka@fountainridge.com,” and password, “cbrekka,” to Brekka’s work email, which Brekka down- loaded onto his LVRC computer. By using the administrative log-in, Brekka gained access to information about LVRC’s website, including the usage statistics gathered by LOAD. Brekka used those statistics in managing LVRC’s internet marketing.

In August 2003, Brekka and LVRC entered into discus- sions regarding the possibility of Brekka purchasing an own- ership interest in LVRC. At the end of August 2003, Brekka emailed a number of LVRC documents to his personal email account and his wife’s personal email account. These docu- ments included a financial statement for the company, LVRC’s marketing budget, admissions reports for patients at Fountain Ridge, and notes Brekka took from a meeting with another Nevada mental health provider. On September 4, 2003, Brekka emailed a master admissions report, which included the names of past and current patients at Fountain Ridge, to his personal email account.

In mid-September 2003, negotiations regarding Brekka’s purchase of an ownership interest in LVRC broke down, and LVRC HOLDINGS v. BREKKA 13379 Brekka ceased working for LVRC. Brekka left his LVRC computer at the company and did not delete any emails from the computer, so the June 2003 email from Nick Jones, which included the administrative user name and password, remained on his computer.

After Brekka left the company, other LVRC employees had access to Brekka’s former computer, including Brad Green- stein, a consultant who was hired shortly before Brekka left and who assumed many of Brekka’s responsibilities. At some point after Brekka left, the email with the administrative log- in information was deleted from his LVRC computer.

On November 19, 2004, while performing routine monitor- ing of the LOAD website, Jones noticed that someone was logged into the LVRC website using the user name “cbrekka@fountainridge.com” and was accessing LVRC’s LOAD statistics. Jones contacted Greenstein about the use of the “cbrekka” log-in. Jones also provided the IP address of the log-in and the location of the Internet Service Provider (ISP) associated with that IP address, namely, Redwood City, Cali- fornia. Greenstein instructed Jones to deactivate the “cbrekka” log-in, and Jones did so the same day. Shorting thereafter, LVRC filed a report with the FBI, alleging that Brekka had unlawfully logged into LVRC’s website.

LVRC then brought an action in federal court, alleging that Brekka violated the CFAA when he emailed LVRC docu- ments to himself in September 2003 and when he continued to access the LOAD website after he left LVRC. In addition, LVRC brought a number of state tort actions. In response, Brekka filed a third-party complaint against Smith, Green- stein, and Frank Szabo, alleging that they defamed him by making statements that Brekka had stolen information from LVRC.2 2 Brekka’s third-party complaint against Smith, Greenstein, and Frank Szabo is not on appeal before us. 13380 LVRC HOLDINGS v. BREKKA The district court granted summary judgment in favor of Brekka. After dismissing the federal law claims, the district court declined to exercise supplemental jurisdiction over the remaining state law claims and dismissed the case. LVRC filed a motion to reconsider. Before the district court ruled on the motion, LVRC filed this appeal.

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