Ctr. Law & Consulting, LLC v. Axiom Res. Mgmt., Inc.

• Decision Date: 24 April 2020
• Docket Number: Civil Action No. 1:19-cv-1642
• Parties: CENTRE LAW AND CONSULTING, LLC, Plaintiff, v. AXIOM RESOURCE MANAGEMENT, INC. and Kevin Charles Riley, Defendants.
• Court: U.S. District Court — Eastern District of Virginia

456 F.Supp.3d 765

CENTRE LAW AND CONSULTING, LLC, Plaintiff,

v.AXIOM RESOURCE MANAGEMENT, INC. and Kevin Charles Riley, Defendants.

Civil Action No. 1:19-cv-1642

United States District Court, E.D. Virginia, Alexandria Division.

Signed April 24, 2020

Richard W. Driscoll, Driscoll & Seltzer PLLC, Alexandria, VA, for Plaintiff.

Stephen Joseph Obermeier, Krystal Brunner Swendsboe, Rebecca Lynn Saitta, Wiley Rein LLP, Washington, DC, for Defendant Axiom Resource Management, Inc.

Eric Scott Waldman, Patrick James McDonald, Timothy J. McEvoy, Cameron McEvoy PLLC, Fairfax, VA, for Defendant Kevin Charles Riley.

ORDER

T.S. Ellis, III, United States District Judge

This is a dispute between feuding marriage partners in the process of dissolving their marriage that also involves the estranged partners' employers. According to the complaint, the husband, with the help of his employer, intercepted his wife's business emails for over eleven years without authorization. Accordingly, plaintiff, the wife's employer, alleges that defendants are liable to plaintiff under (i) the Electronic Communications Privacy Act (ECPA), 18 U.S.C. § 2511, and (ii) three Virginia statutes ( Va. Code § 19.2-62(A), Va. Code § 18.2-152.4, and Va. Code § 18.2-152.5 ) that criminalize the unlawful interception of communications, computer trespass, and computer invasion of privacy. At issue are the defendants' motions to dismiss the complaint pursuant to Rule 12(b)(6), Fed. R. Civ. P.

The matter has been fully briefed and thus is ripe for disposition. For the reasons that follow, defendants' motions to dismiss are granted in part and denied in part. Defendants' motions are granted with respect to plaintiff's computer invasion of privacy claim (Count IV) and denied in all other respects.

I.

As required by Rule 12(b)(6), Fed. R. Civ. P., plaintiff's well-pleaded allegations are assumed to be true and all facts are viewed in the light most favorable to plaintiff. See Mylan Labs, Inc. v. Matkari , 7 F.3d 1130, 1134 (4th Cir. 1993). The complaint contains the following relevant factual allegations:

• Plaintiff, Centre Law and Consulting, LLC ("Centre Law"), is a Virginia limited liability company that provides its customers and clients with legal services, training, and federal contract consulting services. Barbara Kinosky is the managing member of Centre Law.

• Defendant Axiom Resource Management Inc. ("Axiom") is a Virginia corporation that provides project and acquisition management services, information technology, and compliance services to federal agencies and private clients.

• Defendant Kevin Charles Riley is a citizen of Virginia and a shareholder, director, officer, and agent of Axiom.

• At all times relevant to the complaint Riley was married to Kinosky.

• In 2002, Riley and IT personnel at Axiom assisted Centre Law in setting up Centre Law's electronic communications system with Egnyte, Inc. Thereafter, Axiom IT personnel assisted Centre Law with maintenance of Centre Law's email account.

• In 2006, the marriage between Riley and Kinosky began to deteriorate. On June 12, 2018, Kinosky commenced divorce proceedings against Riley in the Circuit Court for Manatee County, Florida, but the divorce is yet to be finalized.¹

• The complaint alleges that at some point in 2006, Riley and/or IT personnel from Axiom altered the Centre Law email account by installing an Exchange Transport Rule ("ETR") within the software which governed the transmission of electronic communications to or from Kinosky's Centre Law email account.

• According to the complaint, an ETR "automatically intercepts"² electronic communications to or from a designated user and disseminates a duplicate of the communications to a separate mailbox without disclosure of such interception or duplication to the designated user or any other addressee within the communication.

• The ETR remained functioning within the software for the Centre Law email account until the middle of 2017 at which time Centre Law moved its electronic communication system from Egnyte, Inc. to another host.

• In January 2018, Riley departed his residence with Kinosky, taking with him some computers and digital devices purchased with marital funds, but leaving other computers and digital devices behind.

• While using one of the computers that Riley left behind, Kinosky discovered some of her Centre Law emails in the "Deleted Items" folder for "Kevin Riley." The complaint alleges that these emails were unlawfully intercepted and duplicated.

• Centre Law subsequently incurred tens of thousands of dollars in the investigation and prevention of further unauthorized interception of its electronic communications.

II.

The well-settled motion to dismiss standard applicable here does not require extensive elaboration. As the Supreme Court has made clear, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Importantly, in making this determination the district court must "accept as true all well-pled facts in the complaint and construe them in the light most favorable to [the plaintiff]." United States v. Triple Canopy, Inc. , 775 F.3d 628, 632 n.1 (4th Cir. 2015). But the district court is not bound to "accept as true a legal conclusion couched as a factual allegation." Anand v. Ocwen Loan Servicing, LLC , 754 F.3d 195, 198 (4th Cir. 2014). Thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. Instead, the complaint must allege facts that, if true, plausibly satisfy each element of the claims for which relief is sought. Accordingly, the motions to dismiss must be granted if the complaint does not allege a sufficient factual basis to create a plausible inference that plaintiff is entitled to relief.

III.

In Counts I and II, plaintiff alleges that defendants unlawfully "intercepted" Kinosky's business email communications, in violation of the interception provisions common to both the ECPA, 18 U.S.C. § 2511, and the Virginia Interception of Wire, Electronic or Oral Communications Act ("Virginia Wiretap Act"), Va. Code § 19.2-62(A). Axiom and Riley argue that plaintiff's allegations in Counts I and II fail as a matter of law because the complaint fails to allege that Axiom or Riley "intercepted" plaintiff's electronic communications during transmission, as required to state a claim for relief under either the ECPA or the Virginia Wiretap Act.³

The ECPA, in pertinent part, prohibits intentionally intercepting any electronic communication. 18 U.S.C. § 2511(1)(a). The Act further defines "intercept" to mean "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4).⁴ Importantly, courts applying the ECPA have consistently held that a qualifying "intercept" occurs only where the acquisition of the communication happens contemporaneously with its transmission by its sender.⁵

Axiom argues that the complaint does not allege that Axiom acquired plaintiff's communications contemporaneously with its transmission. In support of this argument, Axiom relies on a prior decision of this Court, Global Policy Partners, LLC v. Yessin , 686 F. Supp. 2d 631 (E.D. Va. 2009). But defendant's reliance on Yessin is unwarranted as that case is clearly distinguishable from the factual allegations in the complaint here. In Yessin , the complaint alleged that the defendant was logging into his estranged wife's work email account using her password and that this activity was stymied once Mrs. Yessin changed her email account password. See id. at 634, 639. Accordingly, the plaintiff's ECPA and Virginia Wiretap Act claims in Yessin were dismissed for failure to state a claim because the complaint alleged that the defendant accessed the plaintiffs' email communications after those communications had been stored on their destination server. This access plainly did not qualify as an "intercept" of those electronic communications contemporaneously with their transmission.⁶

In contrast to Yessin and the other cases plaintiff cites, the complaint in this case alleges that the ETR placed within plaintiff's email software "automatically intercepted" and duplicated plaintiff's emails at the point of transmission. This allegation is categorically different from the claim of logging into someone's email account without authorization and viewing their inbox, as was alleged in Yessin.

At this stage of this litigation, construing the facts alleged in the complaint in the light most favorable to plaintiff, this allegation states a plausible factual basis that defendants intercepted plaintiff's electronic communications contemporaneously with transmission, as required to state a claim under the ECPA and the Virginia Wiretap Act. Other courts that have considered the automatic duplication and forwarding of electronic communications have arrived at the same conclusion.⁷ Accordingly, defendants' motions to dismiss Counts I and II of plaintiff's complaint must be denied. At summary judgment or trial plaintiff must adduce facts to prove that defendants actually "intercepted" plaintiff's electronic communications contemporaneously with the transmission of those communications, but at this stage plaintiff has met its burden of alleging sufficient facts, which if true, state a plausible claim for relief on Counts I and II.

IV.

In Count IV, plaintiff alleges a violation of the Virginia Computer Crimes Act ("VCCA"), Va. Code § 18.2-152.5, which prohibits unauthorized use of a computer network to examine employment, salary, credit, or other financial or identifying information....