Monday, October 08, 2012

Unauthorized Access, Divorce and Intrusion Upon Seclusion

This post examines an opinion issued in a California divorce case.  As the judge explains,

Robert Yee and Verna Lin are parties to a divorce action filed in Alameda County Superior Court. That action settled but awaits a final judgment, and dissolution of marriage was granted.

[Yee] alleges that during the divorce proceedings [Lin] intentionally and without consent hacked into his email accounts. Specifically, she hacked the email provider facilities of Yahoo and Google, and accessed personal, business and attorney/client information contained therein. [Yee] alleges that his email was hacked at least thirteen times before he discovered [Lin’s] conduct and changed his password.

Yee v. Lin, 2012 WL 4343778 (U.S. District Court for the Northern District of California 2012). 

This case is in federal court, but it is not the divorce case (which was filed in a California state court, as noted above).  In the U.S., divorce is a matter within the exclusive jurisdiction of state courts; as Wikipedia notes, federal courts do not handle divorces.

Getting back to Mr. Yee and Ms. Lin, he filed a civil suit in federal district court in which he alleged four causes of action:  One was for violating 18 U.S. Code § 2701 (the Stored Communications Act); the second was for violating California Penal Code § 502(c)(2); the third was for the tort of “intrusion upon seclusion.”  Yee v. Lin, supra.  And the fourth was for “intentional interference with prospective economic relations”.  Yee v. Lin, supra.

As to facts, Lee alleged that

the email hacking resulted in loss of profits from two business ventures in China. Yee states that he was fired from a Tianjin development project after disclosing that [Lin] had hacked into his email accounts. He further states that he experienced a hostile business environment involving a Shanghai joint venture as a result of [Lin’s] disclosing confidential information contained in his email accounts. [Yee] alleges he lost profits from these failed business ventures.

Yee v. Lin, supra. 

(If you were wondering, the federal district court has jurisdiction over the two causes of action arising under California law under its supplemental jurisdiction:  When someone files a claim that arises under federal law, the federal court can hear and decide state law claims that arise under the same facts involved in the federal claim.)

Lin responded to Yee’s suit by filing a motion to dismiss his causes of action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.  As Wikipedia explains, a Rule 12(b)(6) motion alleges that the plaintiff has failed to adequately plead a given cause of action, such as intrusion upon seclusion, in his/her/its Complaint. The motion does not raise any factual issues; factual issues are to be decided by the jury or by the judge at a bench trial.  To withstand such a challenge, the plaintiff must allege facts which, if proven at trial, would justify a verdict in his favor. 

The federal district court judge who has the case began his analysis of Lin’s motion by examining Yee’s Stored Communication Act (SCA) claim, noting that the SCA

provides a private right of action against anyone who (1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and (3) thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.

Yee v. Lin, supra. 

The cause of action is created by 18 U.S. Code § 2707(a) says any “person aggrieved by” a violation of the SCA “in which the conduct constituting the violation is engaged in with a knowing or intentional state of mind may, in a civil action, recover from the . . . such relief as may be appropriate.”  Yee v. Lin, supra.  Section 2707(b)(2) says the court can award “damages under [§ 2707(c)]”, and 18 U.S. Code § 2707(c) says it can assess

as damages . . . the sum of the actual damages suffered by the plaintiff and any profits made by the violator as a result of the violation. . . If the violation is willful or intentional, the court may assess punitive damages.

Yee v. Lin, supra. 

The judge first addressed Lin’s Rule 12(b)(6) challenge to Yee’s SCA claim.  In his complaint, Yee alleged that Lin

intentionally, knowingly and with the conscious objective of doing harm to Yee accessed the website of an electric communications service, specifically the email provider facilities of Yahoo and Google, and by using the password she obtained without Yee's permission or authority, accessed [his] private email accounts which were in electronic storage on the servers of the electronic communication services . . . , [and] accessed, obtained, copied, saved and/or used the emails.

Yee v. Lin, supra. 

The judge also noted that Yee’s complaint provides

specific times, dates and emails that were allegedly hacked. For example, [he] alleges that on March 25, 2012, he wrote an email at 2:21 PM to his attorney discussing litigation issues related to the divorce. He further alleges that Lin intentionally logged on to his email at 9:01 PM and read confidential attorney/client emails. She then copied and saved these emails and divulged the content to third-persons such as Lin's attorney and Yee's business associate. . . .

The divorce proceedings provide enough factual context to support [Yee’s] allegations that [Lin’s] action were without permission and intentional. It is also plausible that if [Lin] divulged the contents of the emails then she obtained them by either saving or copying them.

Furthermore, [Lin] contends no actual harm was alleged. Not so. [Yee] sufficiently alleges actual damages of lost profits and impaired business relationships as a result of the email hacking. [His] claim under the Act is sufficiently pled.

Yee v. Lin, supra. 

The judge then addressed Yee’s claim under California Penal Code § 502(c)(2), which makes it a state crime to knowingly access and, acting without permission, take, copy or make use of data from a computer, computer system or computer network.  Yee v. Lin, supra.  California Penal Code § 502(e)(1) lets the victim of such a violation bring a civil suit for damages against the perpetrator. 

In her 12(b)(6) motion, Lin argued Yee did not have “standing to bring a claim under § 502(c)(2)  because he is not `the owner of the . . . data’ and has not suffered a loss by reason of a violation.” Yee v. Lin, supra.  Yee responded by pointing out that he owned the data in his email accounts. Yee v. Lin, supra.  Yee’s complaint also alleged that the

email hacking caused him to incur `monetary expenses associated with responding to Lin's unauthorized access including, but not limited to expenses related to identifying, inspecting, analyzing and rectifying Lin's improper actions.’ For example, [Yee] alleges that at a business meeting on March 30, 2012 in China, he disclosed to his client that `sensitive business information about their project could have been compromised.’

Accordingly, standing to sue under § 502(e) is met. The rest of [Lin’s] arguments repeat those made under the [SCA]. For the same reasons discussed above, [Yee] has pled sufficient facts to state a claim under § 502.

Yee v. Lin, supra.  

That brings us to Yee’s third claim:  intrusion upon seclusion.  The judge began his analysis of this claim, and Lin’s Rule 12(b)(6) challenge to it, by noting that

`[o]ne who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.’ Whether conduct is offensive depends on `the degree of the intrusion, the context, conduct and circumstances surrounding the intrusion as well as the intruder's motives and objectives, the setting into which [s]he intrudes, and the expectations of those whose privacy is invaded.’ Deteresa v. American Broadcasting Cos., Inc., 121 F.3d 460 (United States Court of Appeals for the 9th Circuit 1997).

Yee v. Lin, supra.  

Yee claimed Lin intentionally intruded on his right to privacy and solitude by:

`intentionally accessing and/or wrongfully disclosing the contents of his personal, business and privileged email communications between [Lin] and third parties . . . [which] was offensive and objectionable to [Yee] and would be offensive and objectionable to a reasonable person of ordinary sensibilities in that it exposed [Yee’s] private, privileged and confidential affairs to [Lin] and other unauthorized persons, gained unfair advantage for [Lin] in the [d]ivorce [c]ase and/or otherwise for the purpose of her own and others financial gain.’

Yee v. Lin, supra (quoting Yee’s complaint).  

The judge then found that Yee had pled

sufficient facts to establish that [Lin] intentionally accessed his email without consent which resulted in damages. [Yee] also pled that his emails contained personal, confidential and private communications. This is sufficient to plead the invasion of privacy requirement. Moreover, the context of the intrusion, allegedly occurring during a contested divorce and the thirteen alleged unauthorized entries into his email is sufficient to plead the highly offensive to a reasonable person requirement.

Accordingly, [Yee] has pled sufficient facts to state a claim for the tort of intrusion upon seclusion.

Yee v. Lin, supra.  

And that brings us to Yee’s fourth and final claim:  intentional interference with prospective economic relations.  Yee v. Lin, supra.  As the opinion explains, the elements of this claim are

`(1) the existence of a specific economic relationship between [plaintiff] and third parties that may economically benefit [plaintiff]; (2) knowledge by [defendant] of this relationship; (3) intentional acts by [defendant] designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) damages to the [plaintiff].’

Yee v. Lin, supra (quoting Rickards v. Canine Eye Registration Foundation, Inc., 704 F.2d 1449 (U.S. Court of Appeals for the 9th Circuit 1983)).

In his complaint, Yee alleged that Lin “intentionally interfered with two business ventures that failed.”  Yee v. Lin, supra.  The judge found Yee’s allegations in support of this claim were insufficient to withstand Lin’s Rule 12(b)(6) challenge to dismiss it for failing to state a viable legal claim.  Yee v. Lin, supra.  

With regard to the first business deal, [Yee] alleges that he was fired from a Tianjin development project for disclosing to his business associate that his emails were hacked by [Lin]. This is insufficient to show that [her] actions were designed (or reasonably likely) to disrupt [his] business interest. It was [Yee] who disclosed the infiltration, not [Lin]. Nothing pled plausibly shows such disclosure was likely to happen.

Yee v. Lin, supra.  

As to the second business deal, the judge noted that Yee’s complaint alleged that

`the business relationship between [Yee] and his [business] associate [Lin Hua Cheng] in China was in fact disrupted by [Lin’s]intentional interference by creating a hostile and uncooperative business environment . . . [resulting in] denied specific payments, refused attendance at important business meetings and experienced disruption of the distribution of funds to which he was entitled.’

Yee v. Lin, supra.  

The judge found this was not

specific enough to support the allegation that [Lin’s] actions were designed to disrupt [Yee’s] business interests, even if actual disruption occurred. [Yee]f also does not provide specific facts to support the allegation that [Lin] knew of the business relationship. Notably, [he] does not specify the content of the emails disclosed to the business associates. Without these important facts, the allegations are merely conclusory.

Yee v. Lin, supra.  

He therefore denied Lin’s Rule 12(b)(6) motion with regard to the first three claims and granted it with regard to the fourth one.  Yee v. Lin, supra.  That does not mean the claim is dead; Yee can file an amended complaint and try to remedy the deficiencies in how he pleads this claim.  Nor does it means that Yee wins on the first three claims; it only means they survive and the case moves forward on them, at least.

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