ScHwartz v. ADP, LLC
| Decision Date | 26 July 2021 |
| Docket Number | 2:21-cv-283-SPC-MRM |
| Parties | DAVID SCHWARTZ, Plaintiff, v. ADP, INC. and AUTOMATIC DATA PROCESSING, INC., Defendants. |
| Court | U.S. District Court — Middle District of Florida |
Before the Court is Defendants ADP, Inc. and Automatic Data Processing, Inc.'s (together, “ADP”) Motion to Dismiss (Doc. 19). Plaintiff David Schwartz responded in opposition (Doc. 21). The Court grants and denies in part.
This case arises from Schwartz's job with ADP. A few years ago, their relationship went awry. Schwartz alleges ADP has illegal business practices. After he blew the whistle on them, ADP retaliated. They locked him out of his laptop and iPad, then fired him.
After ADP sued Schwartz in state court for breach of contract and taking trade secrets. Schwartz counterclaimed for wrongful termination. Later, ADP filed another state action for defamation. Those cases are still pending. When the state-court litigation got publicity, ADP started hacking into Schwartz's electronic communications and accounts. Now in federal court, Schwartz brings a host of claims against ADP.
A complaint must recite “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “To 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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A facially plausible claim allows a “court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Courts must accept all well-pled allegations as true and view them most favorably to plaintiff. Almanza v. United Airlines Inc., 851 F.3d 1060, 1066 (11th Cir. 2017).
“A party may move for a more definite statement of a pleading . . so vague or ambiguous that the party cannot reasonably prepare a response.” Fed. R. Civ. P. 12(e). The motion “must point out the defects complained of and the details desired.” Id. But this Rule cannot supplant discovery. Spiral Direct, Inc. v. Basic Sports Apparel, Inc., 151 F.Supp.3d 1268, 1282 (M.D Fla. 2015).
ADP challenges each of Schwartz's twelve claims for various reasons. The Complaint alleges identical causes of action against each Defendant. So similar claims are grouped below.
To start, Schwartz sues for violating the Computer Fraud and Abuse Act (“CFAA”). According to him, ADP hacked into his electronic devices to take his information, including communications with his lawyers. ADP also allegedly accessed Schwartz Apple accounts, ID, iCloud, and applications (together, “Accounts”). Among other things, ADP wants a clearer pleading.
“While the CFAA was designed as a criminal statute to punish computer hacking, it does allow private civil actions in a narrow set of circumstances.” Fla. Atl. Univ. Bd. of Trs. v. Parsont, 465 F.Supp.3d 1279, 1290 (S.D. Fla. 2020) (citations omitted). “A CFAA claim has four elements: (1) a defendant intentionally accessed a protected computer; (2) without authorization or exceeding authorized access; and the defendant (3) thereby obtained information; and (4) the plaintiff suffered damage or loss of at least $5, 000.” Hall v. Sargeant, No. 18-80748-CIV-ALTMAN/Reinhart, 2020 WL 1536435, at *28 (S.D. Fla. Mar. 30, 2020).
To start, ADP contends Schwartz's various Accounts are unprotected devices under the CFAA. The Court agrees. Where relevant, a “protected computer” is “a computer . . . which is used in or affecting interstate or foreign commerce or communication.” 18 U.S.C. § 1030(e)(2)(B). And a computer is “an electronic . . . or other high speed data processing device performing logical, arithmetic, or storage functions, and includes any data storage facility or communications facility directly related to or operating in conjunction with such device.” Id. § 1030(e)(1). That definition might encompass Schwartz's laptop, iPhone, and iPad (together, “Devices”). Yet he provides no authority to support reading CFAA as somehow protecting the Accounts.
Even so, Schwartz alleges at least some of the Devices were intentionally accessed. But like ADP argues, it's unclear which Devices were hacked. This is notable here when the parties disagree whether Schwartz should even have certain Devices. Given the pleading of Accounts as protected computers and uncertainty on specific Devices in dispute, the Court grants ADP's request for a more definite statement.
For the sake of clarity, the Accounts may be relevant to the amended allegations on ADP accessing the Devices. And the largely unexplained exhibit does not clearly contradict Schwartz's access theory. For example, the Accounts all relate to Apple. So even if the exhibit does not prove access-as the parties dispute-it could suggest ADP accessed Apple computers. See Sargeant, 2020 WL 1536435, at *28 ( access to material stored in e-mail account actionable because the account was located on physical server (i.e., a protected computer)). What's more, any dispute over the exhibit's meaning will not be resolved at the pleading stage without context on its full meaning.
Given that conclusion, the Court need not address ADP's remaining arguments. At this point, the Court will not take judicial notice of a partial deposition Schwartz gave during the state-court proceedings. The more definite statement may clear up that issue anyway. And any issue with deficient alleged losses can be raised again if the amended complaint is lacking.
So Counts 1 and 7 must make a more definite statement. On repleading, Schwartz should clarify the Devices accessed to support his claims.
Next, Schwartz seeks damages for Stored Communications Act (“SCA”) violations. A SCA claim arises after someone (1) “intentionally assesses without authorization a facility through which an electronic communication service is provided” or “exceeds an authorization to that facility”; and (2) “obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.” 18 U.S.C. § 2701(a); see also id. § 2707(a); Snow v. DirecTV, Inc., 450 F.3d 1314, 1321 (11th Cir. 2006). ADP contends these claims fail for three reasons.
First, ADP challenges the Complaint for failing to allege a “facility” as defined by the SCA. It says the Devices are not facilities. To be sure, case law supports that interpretation. Stirling Int'l Realty v. Soderstrom, No. 6:14-cv-1109-Orl-40TBS, 2015 WL 2354803, at *5-6 (May 15, 2015) (); see United States v. Steiger, 318 F.3d 1039, 1049 (11th Cir. 2003). Yet Schwartz allegations relate to the Accounts-not the Devices. And the Accounts are either cloud- or Apple-based systems used for storing electronic communications. Those are the types of facilities the SCA generally protects. Id.; see also Vista Mktg., LLC v. Burkett, 812 F.3d 954, 962-64 (11th Cir. 2016); Garcia v. City of Laredo, Tex., 702 F.3d 788, 792 (5th Cir. 2012).
Second, ADP contends Schwartz insufficiently pled intent in conflict with his own exhibit. In support, it cites Judge Steele's recent decision for the proposition plaintiffs should support their SCA intent allegations with evidence. Skypoint Advisors, LLC v. 3 Amigos Prods. LLC, No. 2:18-cv-356-FtM-29MRM, 2020 WL 70977 (M.D. Fla. Jan. 7, 2020). Yet Skypoint doesn't stand for that. Rather, the case just held a pleading was enough on intent - in part-because it attached screenshots of text messages supporting some allegations. The fact exhibits may support a pleading do not make them a necessity. And the Complaint properly alleges ADP accessed the Accounts to collect Schwartz's communications (most notably those from his lawyer). Likewise, ADP's arguments on a conflicting exhibit are misplaced. While the exhibit may not prove ADP accessed the Accounts, it is not inconsistent with Schwartz's story.
And third, ADP maintains Schwartz's communications were not “in electronic storage, ” as required. 18 U.S.C. § 2701(a)(2). It says opened e-mails are unprotected. While the Eleventh Circuit punted the issue, there is significant support elsewhere for ADP's position. E.g., Satori v. Schrodt, 424 F.Supp.3d 1121, 1132-34 (N.D. Fla. 2019). All the same, Satori was a summary judgment case, when the bar to go forward is much higher. The Court finds the allegations sufficient at this stage and leaves any resolution of the facts to a later day.
So Counts 2 and 8 survive.
Moving on, the Court turns to claims under the Wiretap Act. This provides an action against someone who “intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication.” 18 U.S.C. § 2511(1)(a); see id. § 2520(a). As defined, “intercept” is “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.” Id. § 2510(4). So Wiretap Act plaintiffs must show “defendant (1) intentionally (2) intercepted, endeavored to intercept or procured another person to intercept or endeavor to intercept (3) the contents of (4) an electronic communication (5) using a device.” Hamilton Grp. Funding, Inc. v. Basel, 311 F.Supp.3d 1307, 1314 (S.D. Fla. 2018).
Interception “encompasses only acquisitions contemporaneous with transmission.” Steiger, 318 F.3d at 1047. In other words, “a contemporaneous interception-i.e., an acquisition during ‘flight'-is...
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