United States v. Nosal

676 F.3d 854, 36 I.E.R. Cas. (BNA) 865, 2012 U.S. App. LEXIS 7151, 2012 WL 1176119
CourtCourt of Appeals for the Ninth Circuit
DecidedApril 10, 2012
Docket10-10038
StatusPublished
Cited by146 cases

This text of 676 F.3d 854 (United States v. Nosal) 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
United States v. Nosal, 676 F.3d 854, 36 I.E.R. Cas. (BNA) 865, 2012 U.S. App. LEXIS 7151, 2012 WL 1176119 (9th Cir. 2012).

Opinions

[856]*856OPINION

KOZINSKI, Chief Judge:

Computers have become an indispensable part of our daily lives. We use them for work; we use them for play. Sometimes we use them for play at work. Many employers have adopted policies prohibiting the use of work computers for nonbusiness purposes. Does an employee who violates such a policy commit a federal crime? How about someone who violates the terms of service of a social networking website? This depends on how broadly we read the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030.

FACTS

David Nosal used to work for Korn/Ferry, an executive search firm. Shortly after he left the company, he convinced some of his former colleagues who were still working for Korn/Ferry to help him start a competing business. The employees used their log-in credentials to download source lists, names and contact information from a confidential database on the company’s computer, and then transferred that information to Nosal. The employees were authorized to access the database, but Korn/Ferry had a policy that forbade disclosing confidential information.1 The government indicted Nosal on twenty counts, including trade secret theft, mail fraud, conspiracy and violations of the CFAA. The CFAA counts charged Nosal with violations of 18 U.S.C. § 1030(a)(4), for aiding and abetting the Korn/Ferry employees in “exceeding their] authorized access” with intent to defraud.

Nosal filed a motion to dismiss the CFAA counts, arguing that the statute targets only hackers, not individuals who access a computer with authorization but then misuse information they obtain by means of such access. The district court initially rejected Nosal’s argument, holding that when a person accesses a computer “knowingly and with the intent to defraud ... [it] renders the access unauthorized or in excess of authorization.” Shortly after-wards, however, we decided LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir.2009), which construed narrowly the phrases “without authorization” and “exceeds authorized access” in the CFAA. Nosal filed a motion for reconsideration and a second motion to dismiss.

The district court reversed field and followed Brekka’s guidance that “[t]here is simply no way to read [the definition of ‘exceeds authorized access’] to incorporate corporate policies governing use of information unless the word alter is interpreted to mean misappropriate,” as “[s]uch an interpretation would defy the plain meaning of the word alter, as well as common sense.” Accordingly, the district court dismissed counts 2 and 4-7 for failure to state an offense. The government appeals. We have jurisdiction over this interlocutory appeal. 18 U.S.C. § 3731; United States v. Russell, 804 F.2d 571, 573 (9th Cir.1986). We review de novo. United States v. Boren, 278 F.3d 911, 913 (9th Cir.2002).

DISCUSSION

The CFAA defines “exceeds authorized access” as “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.” 18 U.S.C. § 1030(e)(6). This language can be read either of two ways: First, as Nosal suggests and the district court held, it could refer to someone who’s authorized to access only certain [857]*857data or files but accesses unauthorized data or files—what is colloquially known as “hacking.” For example, assume an employee is permitted to access only product information on the company’s computer but accesses customer data: He would “exceed[ ] authorized access” if he looks at the customer lists. Second, as the government proposes, the language could refer to someone who has unrestricted physical access to a computer, but is limited in the use to which he can put the information. For example, an employee may be authorized to access customer lists in order to do his job but not to send them to a competitor.

The government argues that the statutory text can support only the latter interpretation of “exceeds authorized access.” In its opening brief, it focuses on the word “entitled” in the phrase an “aecesser is not entitled so to obtain or alter.” Id. § 1030(e)(6) (emphasis added). Pointing to one dictionary definition of “entitle” as “to furnish with a right,” Webster’s New Riverside University Dictionary 435, the government argues that Korn/Ferry’s computer use policy gives employees certain rights, and when the employees violated that policy, they “exceedfed] authorized access.” But “entitled” in the statutory text refers to how an aecesser “obtain[s] or alter[s]” the information, whereas the computer use policy uses “entitled” to limit how the information is used after it is obtained. This is a poor fit with the statutory language. An equally or more sensible reading of “entitled” is as a synonym for “authorized.”2 So read, “exceeds authorized access” would refer to data or files on a computer that one is not authorized to access.

In its reply brief and at oral argument, the government focuses on the word “so” in the same phrase. See 18 U.S.C. § 1030(e)(6) (“aecesser is not entitled so to obtain or alter” (emphasis added)). The government reads “so” to mean “in that manner,” which it claims must refer to use restrictions. In the government’s view, reading the definition narrowly would render “so” superfluous.

The government’s interpretation would transform the CFAA from an anti-hacking statute into an expansive misappropriation statute. This places a great deal of weight on a two-letter word that is essentially a conjunction. If Congress meant to expand the scope of criminal liability to everyone who uses a computer in violation of computer use restrictions— which may well include everyone who uses a computer—we would expect it to use language better suited to that purpose.3 Under the presumption that Congress acts interstitially, we construe a statute as displacing a substantial portion of the common law only where Congress has clearly indicated its intent to do so. See Jones v. United States, 529 U.S. 848, 858, 120 S.Ct. 1904, 146 L.Ed.2d 902 (2000) (“[Ujnless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance in the prosecution of crimes.” (internal quotation marks omitted)).

[858]*858In any event, the government’s “so” argument doesn’t work because the word has meaning even if it doesn’t refer to use restrictions. Suppose an employer keeps certain information in a separate database that can be viewed on a computer screen, but not copied or downloaded.

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676 F.3d 854, 36 I.E.R. Cas. (BNA) 865, 2012 U.S. App. LEXIS 7151, 2012 WL 1176119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-nosal-ca9-2012.