Van Alstyne v. Electronic Scriptorium, Ltd.

560 F.3d 199, 28 I.E.R. Cas. (BNA) 1441, 2009 U.S. App. LEXIS 5548, 2009 WL 692512
CourtCourt of Appeals for the Fourth Circuit
DecidedMarch 18, 2009
Docket07-1892, 07-1899
StatusPublished
Cited by38 cases

This text of 560 F.3d 199 (Van Alstyne v. Electronic Scriptorium, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Van Alstyne v. Electronic Scriptorium, Ltd., 560 F.3d 199, 28 I.E.R. Cas. (BNA) 1441, 2009 U.S. App. LEXIS 5548, 2009 WL 692512 (4th Cir. 2009).

Opinion

Vacated and remanded with instructions by published opinion. Chief Judge WILLIAMS wrote the opinion, in which Judge SHEDD and Judge AGEE joined.

OPINION

WILLIAMS, Chief Judge:

During Bonnie Van Alstyne’s employment with Electronic Scriptorium Limited (“ESL”), ESL’s president, Edward Leonard, began accessing her personal email account. Van Alstyne discovered Leonard’s actions, which continued for more than a year after Van Alstyne left ESL, while litigating an unrelated matter with ESL in Virginia state court. Thereafter, Van Alstyne brought suit under the Stored Communications Act, 18 U.S.C.A. § 2707(a) (West 2000) (“SCA”), alleging that Leonard and ESL illegally accessed her personal email account. Following trial, a jury awarded Van Alstyne $150,000 in statutory damages and $75,000 in punitive damages against Leonard. The jury awarded an additional $25,000 in statutory damages and $25,000 in punitive damages against ESL. The district court also awarded Van Alstyne $135,723.56 in attorney’s fees and costs.

On appeal, ESL and Leonard contend that the district court erred in permitting *202 the jury to award: (1) statutory damages of $1,000 per violation of the SCA; (2) punitive damages; and (3) attorney’s fees, without first finding that Van Alstyne suffered actual damages. We agree with ESL and Leonard in part, concluding that plaintiffs pursuing claims under the SCA must prove actual damages in order to be eligible for an award of statutory damages. We disagree, however, that this requirement holds for punitive damages or attorney’s fees. Accordingly, we vacate the awards in favor of Van Alstyne and remand for further proceedings.

I.

ESL is a small data-conversion company owned and operated by Leonard and his wife, Brett, in Leesburg, Virginia. ESL hired Van Alstyne, a friend of the Leon-ards, in January 2001 to serve as Vice President of Marketing. ESL assigned Van Alstyne a company email account, but she also used her private password-protected email account with America OnLine (“AOL”) to conduct business from time to time.

According to Van Alstyne, in October 2001, Leonard sexually propositioned her, but she declined his advances. Shortly thereafter, in December, Van Alstyne and ESL agreed that Van Alstyne would be recategorized as an independent contractor with the company. In March 2002, ESL unilaterally terminated Van Alstyne.

Van Alstyne thereafter pursued several claims for relief against ESL: (1) a sexual harassment charge with the Equal Employment Opportunity Commission (“EEOC”); (2) a claim for unemployment benefits with the Virginia Employment Commission (“VEC”); and (3) a claim for unpaid commissions in Virginia state court. Van Alstyne’s EEOC claim was dismissed for want of jurisdiction because ESL employed fewer than fifteen individuals, and she eventually nonsuited her claim for unpaid commissions. Van Alstyne did, however, prevail on her claim with the VEC.

Meanwhile, ESL instituted an action against Van Alstyne in Virginia state court, alleging several business torts against her. 1 It was in the midst of discovery in that suit that the seeds for the instant action were sown. During a deposition in February 2006, ESL’s counsel used several emails from Van Alstyne as exhibits. Van Alstyne believed that these exhibits were actually taken from her AOL account and not her company account. With her suspicions aroused, Van Alstyne began pursuing the possibility that Leonard and ESL had broken into that private account. Sure enough, during a June 2006 deposition, Leonard admitted that he accessed Van Alstyne’s AOL account after she left the company. He further testified that the emails produced during the deposition represented the only occasions on which he had accessed her account. 2

No doubt disturbed by Leonard’s behavior, Van Alstyne promptly instituted an action against Leonard in the United States District Court for the Eastern District of Virginia, alleging that Leonard’s actions violated the SCA — part of the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C.A. § 2510, et seq. (West 2000) — and the Virginia Computer *203 Crimes Act, Va.Code Ann. §§ 18.2-152.1, et seq. (2004). Van Alstyne requested compensatory and punitive damages under the SCA, contending that Leonard’s actions caused her “actual damages,” or, in the alternative, that she was “entitled to an award of the statutory minimum damage figure provided for by the [SCA].” (J.A. at 33.) Van Alstyne’s claim for actual damages encompassed a claim for attorney’s fees and costs in defending the ESL suit and a claim for damages for mental anguish and emotional distress arising from defending the ESL suit.

Before Leonard responded, Van Alstyne filed an amended complaint adding ESL as an additional defendant. Van Alstyne filed a second amended complaint in March 2007, removing her claims of mental anguish and emotional distress in order to “maintain a modicum of privacy and avoid further invasion of it through discovery.” (J.A. at 126). After Leonard and ESL filed a motion to compel evidence of Van Alstyne’s “actual damages,” Van Alstyne amended her complaint for a third time. The Third Amended Complaint withdrew the claims under the Virginia Computer Crimes Act against both Leonard and ESL and also “withdr[e]w any claim for damages ... premised upon the costs she incurred in defending the [ESL] suit.” (J.A. at 22.) Van Alstyne’s claim for relief was thus limited to punitive damages and “statutory minimum damage[s]” under the SCA. (J.A. at 27.)

Leonard and ESL moved for summary judgment, relying principally on the Supreme Court’s opinion in Doe v. Chao, 540 U.S. 614, 124 S.Ct. 1204, 157 L.Ed.2d 1122 (2004), for the proposition that the SCA did not provide for statutory damages absent a showing that the plaintiff suffered actual damages. See Doe, 540 U.S. at 627, 124 S.Ct. 1204 (holding that, under the Privacy Act, $1,000 minimum statutory damages award was available “only to plaintiffs who suffered some actual damages”).

On June 8, 2007, the district court denied the motion for summary judgment, and the case continued to a jury trial. On June 21, 2007, the jury returned a verdict in favor of Van Alstyne against Leonard in the amount of $150,000 in compensatory damages and $75,000 in punitive damages and against ESL in the amount of $25,000 in compensatory damages and $25,000 in punitive damages. The compensatory damages award represented a statutory damages award of $1,000 for each violation of the SCA. ESL and Leonard filed a motion for a new trial and judgment as a matter of law, which the district court denied. On August 13, 2007, the district court entered its final judgment, which also awarded Van Alstyne $124,763.38 in attorney’s fees and $10,960.18 in costs against Leonard and ESL, jointly and severally. Leonard and ESL noted a timely appeal.

II.

On appeal, Leonard and ESL contend that the district court erred in permitting the jury to award Van Alstyne statutory damages, punitive damages, and attorney’s fees and costs without first requiring her to prove actual damages under the SCA. 3 We review these issues

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Bluebook (online)
560 F.3d 199, 28 I.E.R. Cas. (BNA) 1441, 2009 U.S. App. LEXIS 5548, 2009 WL 692512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/van-alstyne-v-electronic-scriptorium-ltd-ca4-2009.