NovelPoster v. Javitch Canfield Group

140 F. Supp. 3d 938, 2014 WL 3845148, 2014 U.S. Dist. LEXIS 106804
CourtDistrict Court, N.D. California
DecidedAugust 4, 2014
DocketCase No. 13-CV-05186-WHO
StatusPublished
Cited by15 cases

This text of 140 F. Supp. 3d 938 (NovelPoster v. Javitch Canfield Group) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
NovelPoster v. Javitch Canfield Group, 140 F. Supp. 3d 938, 2014 WL 3845148, 2014 U.S. Dist. LEXIS 106804 (N.D. Cal. 2014).

Opinion

ORDER GRANTING DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS

Re: Dkt. No. 60

WILLIAM H. ORRICK, United States District Judge

INTRODUCTION

This case involves the soured relationship between the owners of the plaintiff company, NovelPoster, and the defendant company engaged to operate it, Javitch Canfield Group. Javitch Canfield Group’s owners, Mark Javitch and Daniel Canfield, are also defendants. NovelPoster asserts various causes of action under both federal and state law based on the defendants’ allegedly unlawful access of NovelPoster’s email and other electronic accounts during the start, breakdown, and wake of the parties’ relationship.

The defendants filed this limited Motion for Judgment on the Pleadings, arguing that NovelPoster’s allegations as pleaded in the Complaint fail to support the First through Fourth Causes of Action for violations of the federal Computer Fraud and Abuse Act, the federal Electronic Communications Privacy Act, California’s Comprehensive Computer Data Access and Fraud Act, and California’s Invasion of Privacy Act. The motion is GRANTED. Novel-Poster fails to adequately plead loss to support its causes of action under the Computer Fraud and Abuse Act and Cali-[940]*940forma’s Comprehensive Computer Data Access and Fraud Act and-fails to plead that the defendants “intercepted” any electronic communications under the Electronic Communications Privacy Act and California’s invasion of Privacy Act.

FACTUAL BACKGROUND

The Complaint alleges the following facts:

Plaintiff NovelPoster is an online retailer that designs, sells, and distributes text-based poster products. Compl. (Dkt. No. 1) ¶¶4, 9. NovelPoster has no physical presence and is accessible only through its website and other online internet portals. Compl. ¶ 10. Owners Alex Yancher and Matt Grinberg founded the company in 2011. Compl. ¶ 9. From NovelPoster’s inception, Yancher and Grinberg planned to develop and then sell the company. Compl. ¶ 14.

NovelPoster has accounts with internet companies to conduct its advertising, communications, and sales transactions, including with online payment “gateways,” such as. PayPal and Stripe; online marketing platforms, such as Google Adwords; the website platform Goodsie;. retail sites, such as Etsy and Storenvy; and social media platforms, such as Facebook, Twitter, and Mailchimp. Compl. ¶¶ 11,38.

NovelPoster’s email capabilities are hosted by Google’s services for small-business accounts, through which Novel-Poster has the email accounts Contact@ NovelPoster.com, Matt@NovelPoster.com, and Alex@NóvelPoster.com. Compl. ¶ 11(a).; Contact@NovelPoster.com is the administi'ative account for NovelPoster’s overall Google account, and access to it allows a user to controlMatt@Novel Poster.com andAlex@NovelPoster.com, which are the individual email accounts of Grinberg and Yancher, respectively. Compl. ¶¶ 11(a), 22. Grinberg and Yancher each used his NovelPoster email account to manage the company’s relationships ' with customers and business partners. Compl. ¶ 11(a). They also used these individual email accounts to store contact information for designers, wholesalers, suppliers, and marketers. Compl. ¶ 13. The contract between Nov-elPoster and the defendants was negotiated through these email accounts, and the contract itself is electronically stored there. Compl. ¶ 11(a).

NovelPoster first came into contact with the defendants through Yancher; who met David Canfield at a March 2013 social event in San Francisco. Compl. ¶ 15. Yancher and Canfield agreed to meet and discuss forming a business relationship between NovelPoster and Javitch Canfield Group, which Canfield founded with Mark Javitch, to take oyer NovelPoster operations “until it could be sold.” Compl. ¶¶ 5, 15. Over the next few months, Yancher and Grinberg met with Canfield and Jav-itch several times to discuss this arrangement. Compl. ¶ 16.

Disagreement about the reach of the defendants’ control of the company began even before the parties agreed to the terms governing them relationship. On May 8, 2013, Grinberg emailed the defendants to voice his concern that they had changed the passwords to NovelPoster’s PayPal and Stripe accounts and to state that he and Yancher must “maintain access to all NovelPoster accounts.”1 Compl. ¶ 18.

[941]*941In the same email, Grinberg proposed contract terms to the defendants consisting of the following points:

• The Javiteh Canfield Group would “take over all aspects of operations except for poster design,” for which NovelPoster would be responsible for creating one new poster design per month.
• Operations include “[fulfilling posters or subcontracting fulfillment responsibilities”; inventory management; marketing through Google Adwords, Facebook ads, etc.; customer service; dutbound sales calls to distributors; maintenance of Nov-elPoster’s website and social media presence; and financial and accounting record keeping.
• “NovelPoster continues to have ownership of all NovelPoster related accounts.” •
• The Javiteh Canfield Group receives 80 percent of sales and a 10 percent equity share to vest oyer two years.

Compl. ¶ 17. Canfield accepted these terms on behalf of the defendants via email on May 9,2013.2 Compl. ¶ 21.

On June 6, 2013, the defendants accessed Yancher’s and Grinberg’s individual NovelPoster email accounts and changed them passwords without authorization from or notice to Yancher or Grinberg. Compl. ¶22. Canfield responded to a complaint from Yancher that Yancher was not able to access his individual account by stating that “a server change” had made Yancher’s account “inaccessible,” but that Can-field could forward emails from these accounts to Yancher and Grinberg. Compl. ¶ 22.

On June 10, 2013, Yancher emailed Can-field and Javiteh, stating that he knew the defendants had accessed the individual NovelPoster email accounts and read emails without permission. Compl. ¶23. Javiteh responded and suggested that the group meet to discuss the situation; Yancher agreed, but reiterated that the defendants did not have authority to access the individual email accounts or change their passwords because, they were “personal email accounts.” Compl. ¶24.

The parties met on June 13,: 2013, during which time Yancher and Grinberg told the defendants that the business relationship! “was not working” and NovelPoster wanted to terminate the contract. Compl. ¶25. The defendants refused the termination, “insisting they would relinquish their unauthorized control only for a fee.” Compl. ¶25. NovelPoster refused. Compl. ¶ 25. Grinberg sent an email to Canfield on June 14, 2013, saying that the defendants were in material breach of the contract and that NovelPoster was terminating their contract; Grinberg also stated that NovelPoster was demanding return of its entire business and an inventory estimate as of May 1Ó, 2013. .Compl, ¶26. Javiteh responded by email, pointing out that there was no clause in the contract regarding termination, and so NovelPoster’s attempt to terminate the contract was invalid. Compl. ¶ 27..

Through the time the Complaint was filed, the defendants continued to operate all aspects of NovelPoster and routinely accessed, without authorization,, all ac[942]*942counts related to NovelPoster. Compl. ¶ 36.

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Cite This Page — Counsel Stack

Bluebook (online)
140 F. Supp. 3d 938, 2014 WL 3845148, 2014 U.S. Dist. LEXIS 106804, Counsel Stack Legal Research, https://law.counselstack.com/opinion/novelposter-v-javitch-canfield-group-cand-2014.