Hotmail, Defamation and the Stored Communications Act

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This post examines an opinion a federal district court judge recently issued in a civil suit:  Chadha v. Chopra, 2012 WL 6044701 (U.S.District Court for the Northern District of Illinois 2012).   

The case arose when Rajive and Puja Chadha, whom the opinion refers to as “the `Chadhas’”, filed a civil suit against Paramjit Chopra in which they alleged that Chopra had “violated the Stored Communications Act, 18 U.S. Code § 2701 et seq.” and had “committed defamation per se in two separate instances.” Chadha v. Chopra, supra.

Chopra responded by filing a motion to dismiss the Stored Communications Act [SCA] cause of action under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Chadha v. Chopra, supra.  (He did not move to dismiss the defamation per se claim. Chadha v. Chopra, supra.)  As Wikipedia explains, and I have noted in prior posts, a Rule 12(b)(6) motion is how civil suits that are based on

insufficient legal theories . . .are dismissed from court. For example, assault requires intent, so if the plaintiff has failed to plead intent, the defense can seek dismissal by filing a 12(b)(6) motion. `While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions. . . . Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). . . .

To understand the motion to dismiss, it is necessary to understand the nature of the Chadhas’ SCA cause of action, and to understand the cause of action it is necessary to understand how it arose:

The Chadhas allege that Chopra, covertly and without authorization, obtained the username and password to Puja Chadha's email account athotmail.com (`Puja's Hotmail Account’). He used the username and password to log in to Puja's Hotmail Account, and after logging in he accessed emails stored within the account to obtain the identity and email addresses of several of the Chadhas' close friends, family members, social acquaintances, and professional contacts.

The Chadhas further allege that Chopra opened an email account at yahoo.com using the fake name `Anjali Gupta’ (the `Anjali Account’). On June 1, 2011, Chopra sent from the Anjali Account an email to two of the Chadhas' friends making false statements accusing Rajive Chadha of . . . fornication, adultery, and illicit and immoral sexual practices.

On June 9, 2011, Chopra `blind-copied’ the previously-sent email to at least twenty more of the Chadhas' close friends, family members, social acquaintances, and professional contacts. The Chadhas allege Chopra obtained the email address of each individual to whom he sent the emails by his unauthorized access to Puja's Hotmail Account email inbox.

Chopra attempted to mask his identity as the sender of the allegedly defamatory emails by creating a web of anonymous email accounts on several different computers registered to Midwest Institute for Minimally Invasive Therapies, P.C. (`Midwest’), a company that Chopra owns. The Chadhas were only able to determine that Chopra was the individual sending the allegedly defamatory emails by filing a series of petitions for pretrial discovery in Illinois state court, and they incurred substantial cost in conducting their investigation.

Chadha v. Chopra, supra.

Count I of the Complaint the Chadhas filed to initiate this suit states that they are asserting a cause of action that arises under 18 U.S. Code §§ 2701 & 2707. Chadha v. Chopra, Complaint Count I ¶ 31, 2012 WL 5216685.  Section 2701(a)(1) states that

Whoever . . . intentionally accesses without authorization a facility through which an electronic communication service is provided; . . . and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system shall be punished as provided in subsection (b) of [18 U.S. Code § 2701].

And 18 U.S. Code § 2707(a) states that

Except as provided in[18 U.S. Code §] 2703(e), any . . . person aggrieved by any violation of this chapter 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 person or entity . . . which engaged in that violation such relief as may be appropriate.

In attacking the viability of the Chadhas’ SCA cause of action, Chopra made “four arguments” as to why it should be dismissed:  (i) that the Chadhas failed to adequately allege that he acted intentionally; (ii) that the complaint does not adequately allege that Chopra personally accessed Puja's Hotmail Account; (iii) that they have not alleged that he obtained, altered, or prevented access to electronically stored communications; and (iv) that the Chadhas failed to allege actual damages. Chadha v. Chopra, supra.

The district court judge addressed each of the four arguments, in this order.  He began with Chopra’s argument that the Chadhas had not adequately alleged that he “acted intentionally in obtaining emails from Puja's Hotmail Account.” Chadha v. Chopra, supra. The judge found that this argument was

patently frivolous.  As an initial matter, the Chadhas directly allege that Chopra acted intentionally, Complaint ¶ 33 (`Chopra intentionally obtained access [to Puja's Hotmail Account] and opened and read emails stored in its inbox”’), and also allege specific facts which, if true, clearly show that Chopra's actions were intentional, Complaint ¶¶ 13–15.

Further, Chopra does not suggest, and the Court cannot conceive of, any possible way that Chopra might have unintentionally (1) obtained the username and password for Puja's Hotmail Account; (2) used that information to log into the account; and (3) accessed emails in the account's inbox to obtain email addresses.

Chadha v. Chopra, supra (emphasis in the original).

The judge therefore found that the Complaint “describes conduct that is almost certainly the product of intentional conduct,” which meant that Chopra’s first argument “lacks any merit whatsoever.”  Chadha v. Chopra, supra.

He then took up Chopra’s second argument, which was that “`there are no factual allegations that would show that Dr. Chopra, himself, accessed Puja's email account.” Chadha v. Chopra, supra.  The judge disagreed. Chadha v. Chopra, supra. 

The Chadhas allege that`“Chopra obtained the username and password for Puja's Hotmail Account,` `Chopra then used the username and password to log in to Puja's Hotmail Account,` and `Chopra accessed emails in the inbox.’ Complaint ¶¶ 13–15 (emphasis added). . . . These allegations are easily sufficient state a claim that Chopra personally accessed Puja's Hotmail Account.

Chadha v. Chopra, supra. 

The judge also speculated that, “[p]erhaps Chopra means to argue that the allegations are simply not true.” Chadha v. Chopra, supra.  He noted, however, that if that was the case, then that argument was

unavailable to him at this stage because of the well-known rule that a complaint's allegations are accepted as true for purposes of ruling on a motion to dismiss. . . . The Chadhas were not required, in their complaint, to prove that Chopra must have accessed Puja's Hotmail Account. Rather, they were only required to allege that he did access the account without authorization. Their allegations are sufficient.

Chadha v. Chopra, supra (emphasis added).

That brings us to Chopra’s third argument, which was that “`mere access’ to Puja's Hotmail Account, even if intentional, is insufficient to state a claim under the SCA.” Chadha v. Chopra, supra.  

According to Chopra, merely accessing Puja's Hotmail Account does not establish that he `obtain[ed], alter[ed], or prevent[ed] authorized access to a wire or electronic communication,’ as required by the SCA. 18 U.S.C. § 2701(a); see also Fischer v. Mount Olive Lutheran Church, 207 F.Supp.2d 914, 926 (U.S. District Court for the Western District of Wisconsin 2002) (`accessing plaintiff's Hotmail account intentionally is not enough in and of itself to violate the act’).

Chopra is correct that the statute appears to require more than mere intentional unauthorized access to an email account, assuming that it is possible to access an email account without obtaining any of the account's electronic communications. But if a defendant, after accessing the account, `obtains . . . a wire or electronic communication a violation occurs. See Fischer v. Mount Olive, supra (`obtain[ing] plaintiff's email’ constitutes a violation of the act’).

Chadha v. Chopra, supra.  

The judge then explained that the Chadhas, in addition to alleging that Chopra

accessed Puja's Hotmail Account, also allege that he `opened and read emails stored in its inbox.’ Complaint ¶ 33. Chadha acknowledges as much by claiming that he is not alleged to have done `anything other than “access” Puja's emails.’ [Motion to Dismiss] at 7 (emphasis added). The SCA does not require anything more. By alleging that Chopra opened and read (i.e., obtained) the emails, the Chadhas satisfy the second clause of the statute, which requires that a defendant `obtain[ ] . . .  a wire or electronic communication.’ 18 U.S. Code § 2701(a).

Chadha v. Chopra, supra.  The judge therefore found that Chopra's third argument also failed.  Chadha v. Chopra, supra.  

Finally, the judge addressed Chopra’s fourth argument: “that the Chadhas failed to plead any actual damages incurred as a result of his actions with respect to Puja's Hotmail Account” and “cannot, therefore, obtain statutory damages for his violation.”  Chadha v. Chopra, supra.  The Chadhas’ responded to this argument with three of their own:

First, they assert that the complaint alleges actual damages in the form of the forensic costs the Chadhas incurred in determining that it was Chopra who was sending the offensive emails. Second, they argue they are not required to plead actual damages to recover statutory damages under the SCA. And third, they note that even if they were required to plead actual damages to recover the statutory damage amounts, actual damages are not required to recover punitive damages and attorneys' fees.

Chadha v. Chopra, supra.  

The judge noted that “there is a split of authority as to whether actual damages are required . . . to recover statutory damages under the SCA.” Chadha v. Chopra, supra.  He also noted

that 18 U.S. Code § 2707(c) says that the district court judge “may 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,” but “in no case” shall a plaintiff who is entitled to damages “receive less than . . . $1,000.”  Chadha v. Chopra, supra.  The judge can also/instead assess punitive damages if the violation is “willful or intentional”.   Chadha v. Chopra, supra. 

He also noted that many federal district court judges “have not required a showing of actual damages in order to recover statutory damages.” Chadha v. Chopra, supra.  The judge ultimately concluded, however, that in order to rule on Copra’s motion to dismiss he did not need to resolve the issue of whether the Chadhas had to allege actual damages in order to recover statutory damages.  Chadha v. Chopra, supra.  

   

The federal courts are in agreement that a party can recover punitive damages and attorneys' fees even without proving actual damages. . . . Because the Chadhas seek both punitive damages and attorneys' fees, Count I survives regardless of whether they can prove actual damages.

Further, the Chadhas' complaint sets forth a plausible basis to believe they will be able to show actual damages. The Chadhas allege that as a result of Chopra's SCA violation, they incurred actual damages in the form of forensic and computer security expenses to discover that Chopra was the individual who accessed Puja's Hotmail Account and sent the offending emails. . . . [T]hey have at this point stated a plausible claim for actual damages.

Chadha v. Chopra, supra.  

The judge therefore denied the motion to dismiss.  Chadha v. Chopra, supra.  That does not mean the Chadhas have won the suit and/or will win if and when the case goes to trial.  It simply means  the lawsuit can proceed.  Chadha v. Chopra, supra.