Del Monte Fresh v. Chiquita Brands Intern.

• Decision Date: 19 March 2009
• Docket Number: No. 07 C 5902.,07 C 5902.
• Citation: 616 F.Supp.2d 805
• Parties: DEL MONTE FRESH PRODUCE, N.A., INC., Plaintiff, v. CHIQUITA BRANDS INTERNATIONAL INC., and Kim Kinnavy, Defendants.
• Court: U.S. District Court — Northern District of Illinois

616 F.Supp.2d 805

DEL MONTE FRESH PRODUCE, N.A., INC., Plaintiff, v. CHIQUITA BRANDS INTERNATIONAL INC., and Kim Kinnavy, Defendants.

No. 07 C 5902.

United States District Court, N.D. Illinois, Eastern Division.

March 19, 2009.

Martin K. Denis, Bethany A. Hilbert, Barlow Kobata & Denis, Michael David Robbins, Michael D. Robbins & Associates, Chicago, IL, for Plaintiff.

Deborah S. Brenneman, Thompson Hine LLP, Cincinnati, OH, Gregory Robert James, Jr., Joseph Michael Gagliardo, Lindsy Ann Wilkerson, Thomas Stephen Bradley, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Ltd., Steven Joseph Roeder, Jordan Douglas Shea, Williams, Montgomery & John, Ltd., Joshua B. Adams, Meczyk Golberg, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

WILLIAM J. HIBBLER, District Judge.

Del Monte Fresh Produce N.A., Inc., alleges its former employee Kim Kinnavy breached her confidentiality and non-compete agreement when she left Del Monte to work for Chiquita Brands International. Del Monte also alleges Chiquita committed various business torts. Kinnavy and Chiquita deny the allegations and move for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Kinnavy's motion for summary judgment is GRANTED in part and DENIED in part. Chiquita's motion for summary judgment is GRANTED.

I. Factual Background

For such a complex case, the facts are quite simple. Kim Kinnavy worked in the Illinois office of Del Monte as district sales manager from 1999 until she resigned in 2007. As a sales manager, Kinnavy worked with customers who had banana supply contracts. Del Monte gave its sales managers—including Kinnavy—laptop computers and access to Del Monte's customer database. Two weeks before Kinnavy resigned, she used her laptop to e-mail herself files with the following titles: (a)Fuel surcharge: (b)Revised royal; (c)Contract renewals; (d) Pineapple update; (e)Phone list; (f) North American Customer Database 2005; (g) Fax List— Old Machine; (h) Fax List—III-6-06; and (i) CUSTMAST.xls, Kinnavy also e-mailed a copy of the "Fax List" and the "Phone List" to Mike Elsen, a broker working in Phoenix Arizona. Kinnavy denies she used the files for commercial purposes or that the files contained confidential information. After resigning, Kinnavy went to work for one of Del Monte's chief competitors: Chiquita Brands International.¹

Upon learning of Kinnavy's new employment, Del Monte sued Kinnavy in the Circuit Court of Cook County. Next, Del Monte removed the case to this Court on the basis of diversity jurisdiction and amended its pleadings to include Chiquita as a defendant. The essence of Del Monte's complaint is that Kinnavy violated federal law, and breached her employment agreements by working for a competitor and e-mailing confidential information to a third party. Del Monte also claims Chiquita tortiously interfered with Del Monte's business contracts and made intentional misrepresentations. Kinnavy and Chiquita move for summary judgment on all claims.

II. Standard of Review

Summary judgment is appropriate when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the initial burden of demonstrating there is no genuine issue of material fact, and judgment as a matter of law should be granted in their favor. Fed. R.Civ.P. 56(c). Once the moving party has met the initial burden, the non-moving party must offer more than a mere scintilla of evidence to survive summary judgment. Roger Whitmore's Auto. Servs. v. Lake County, Ill., 424 F.3d 659, 667 (7th Cir.2005). The non-moving party must produce specific facts showing there is a genuine issue of material fact, and the moving party is not entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Finally, all evidence and inferences must be viewed in the light most favorable to the non-moving party. Id. at 255, 106 S.Ct. 2505.

III. Analysis

A. The Computer Fraud and Abuse Act does not Apply to Kinnavy

Count III alleges Kinnavy intentionally—and without authorization—accessed Del Monte's computer system and e-mailed business-related documents to her personal e-mail account and to Mike Elson, a broker in Arizona. According to Del Monte, these actions constitute a violation of the Federal Computer Fraud and Abuse Act. By contrast, Kinnavy disputes whether her actions trigger liability under the statute.

The Computer Fraud and Abuse Act prohibits, inter alia, individuals from illicitly accessing secure computers and damaging the computer or the data.²³ 18 U.S.C. § 1030. Although the CFAA is primarily a criminal statute, it provides a private right of action:

Any person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages and injunctive relief ...

18 U.S.C. § 1030(g) (emphasis added). Thus, Del Monte must show that it suffered damage or loss in order to maintain an action under the CFAA. The CFAA provides very specific definitions of damage and loss. Section 1030(e)(8) defines "damage" as any "impairment to the integrity or availability of data, a program, a system or information." The CFAA defines "loss" as:

Any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program system or information to its condition prior to the offense, any revenue lost, cost incurred, or other consequential damages incurred because of the interruption of service.

Section 1030(e)(11).⁴

Kinnavy admits she accessed Del Monte's business information after her authority to view these documents expired. See, e.g., International Airport Centers v. Citrin, 440 F.3d 418, 420 (7th Cir.2006) (holding employee no longer had authority to access company's confidential information once he breached duty of loyalty and decided to quit employer.). Kinnavy also admits she e-mailed herself and Elsen some of Del Monte's customer information. The only question is whether these actions "damaged" Del Monte or caused it to suffer a "loss" under the CFAA.

Under the CFAA, an employee causes "damage" when she destroys company data. For example, in Citrin, the Seventh Circuit held a business was damaged because a former employee deleted all the files on his company-issued laptop and "loaded into the laptop a secure-erasure program, designed, by writing over the deleted files, to prevent their recovery." Citrin, 440 F.3d. at 419. Similar reasoning was applied by the district court in Patrick Patterson Custom Homes v. Bach, which found that a business was damaged because an employee "deleted files from the laptop computer and installed a shredding software to destroy files on the laptop computer and render them unrecoverable." 586 F.Supp.2d 1026, 1030 (N.D.Ill., 2008).

By contrast, merely downloading and e-mailing confidential information is insufficient to show damages under the CFAA. In Garelli Wong & Assocs. v. Nichols, Garelli Wong claimed that Nichols—an ex-employee who went to work for a competitor—"compiled significant amounts of Garelli Wong's confidential and proprietary client and candidate information ... and attempted to send this information to his personal e-mail account and/or copied it for his personal use," 551 F.Supp.2d 704, 707 (N.D.Ill.2008). Nichols argued there was no damage because his "unauthorized acts of copying and e-mailing Garelli Wong's computer files did not impair the integrity or availability of the information in the Database and did not cause any interruption of service." Id. at 709. The court agreed:

Though Garelli Wong would like us to believe that recent amendments to the CFAA are intended to expand the use of the CFAA to cases where a trade secret has been misappropriated through the use of a computer, we do not believe that such conduct alone can show "impairment to the integrity or availability of data, a program, a system or information."

Id. at 710. See, also Sam's Wines & Liquors, Inc. v. Hartig, No. 08 C 570, 2008 U.S. Dist. LEXIS 76451, at *1-2, 2008 WL 4394962 (N.D.Ill. Sept. 24, 2008) (finding

no damage where an employee stole plaintiffs customer data from plaintiff's computer and took the information to one of plaintiff's competitors: "While not binding precedent, the Court finds that the rule of Nichols is persuasive.").

In Motorola, Inc. v. Lemko Corp., Motorola alleged a group of its employees secretly accepted employment with one of its competitors and—while still working for Motorola—downloaded and e-mailed Motorola's confidential business information to third parties. 609 F.Supp.2d 760, 763 (N.D.Ill.2009). Despite these transgressions, the court found Motorola was not damaged:

The only harm Motorola has alleged is the disclosure to a competitor of its trade secrets and other confidential information. The CFAA's definition of damage does not cover such harm; rather, damage under the statute is limited to impairment of the integrity or availability of data and information. The plain language of the statutory definition refers to situations in which data is lost or impaired because it was erased or because for example a defendant smashed a hard drive with a hammer.

Id. at 769.

In sum: copying electronic files from a computer database—even when the ex-employee e-mails those files to a competitor—is not enough to satisfy the damage requirement of the CFAA; there must be destruction or impairment to the integrity of the underlying data. Here, Kinnavy did not erase any files from her company-issued laptop, nor did she install any destructive...