The Conspiracy to Commit Larceny, Identity Fraud and The One Fund

This post examines an opinion from the Supreme Judicial Court of Massachusetts,

Suffolk:  Commonwealth v. Mattier, 2016 WL 2758931 (2016).  The opinion begins by explaining that the defendants,

Branden E. Mattier and his half-brother Domunique D. Grice, were convicted by a jury on indictments charging one count each of conspiracy to commit larceny, [Massachusetts General Laws]  chapter 274, § 7, and attempted larceny, [Massachusetts General Laws] chapter 274, § 6. Mattier also was convicted on an indictment charging one count of identity fraud, [MassachusettsGeneral Laws] chapter 266, § 37E. The charges stemmed from an attempt by the defendants to defraud The One Fund Boston (One Fund) of approximately $2 million by claiming that a long-deceased aunt had been injured in the 2013 bombing at the finish line of the Boston Marathon.

The judge imposed on each defendant a State prison sentence of from three years to three years and one day on the conspiracy count and three years' probation on the attempted larceny count, to run from and after the committed sentence. Mattier was sentenced to an additional concurrent probationary term for his conviction of identity fraud. The defendants appealed, and we granted their applications for direct appellate review.

Commonwealth v. Mattier, supra. You can, if you are interested, read more about the facts and the defendants in the news stories you can find here, here and here.

The court also explained that

[a]lthough the appeals were not formally consolidated, we have treated them as such, given the substantial congruence of the issues raised by the defendants.  Mattier contends that his conviction of identity fraud fails as a matter of law because the charged conduct is insufficient to meet the elements of the statute. Both defendants claim that the judge erred in (1) denying the motion to suppress evidence obtained as a result of Mattier's warrantless arrest for the identity fraud and attempted larceny charges; (2) denying the motions for required findings of not guilty on all charges; and (3) denying the motion to strike for cause jurors who donated to One Fund. Grice also challenges statements made by the prosecutor in closing argument.

Commonwealth v. Mattier, supra.

The Supreme Judicial Court began the substantive part of its opinion by explaining how, and why, the prosecution arose:

After two bombs exploded near the finish line of the Boston Marathon on April 15, 2013, One Fund was established. . . . In early May, 2013, the administrator of One Fund held two community meetings to discuss distribution. Mattier and Grice attended one of the meetings, and Mattier registered on One Fund's Web site the following day. On May 15, 2013, One Fund disseminated the claims protocol to those persons registered on One Fund's Web site. The levels of payment were based on severity of injury, with the largest amount going to those victims who suffered double amputation. The protocol required that a claimant submit a `hospital statement’ confirming the dates of hospital treatment and the nature of the injury. All claims were due by June 15, 2013.

One Fund received a claim form from Mattier on June 12, 2013, stating that Mattier's aunt had been injured in the bombing and had required double amputation as a result of her injuries. Mattier requested that the claim disbursement check be made payable to him at his Boston address. On June 7, he signed the claim form as representative for his aunt, and his signature was notarized. Attached to the claim form was a signed letter purporting to be from Dr. Peter A. Burke, chief of trauma services at Boston Medical Center. The letter, dated May 2, 2013, stated that both of the aunt's legs had been amputated as a result of injuries from the marathon bombings.

One Fund administrators suspected that Mattier's claim form might be fraudulent and conducted an internal investigation. After learning that the aunt died in 2000, they rejected the claim. One Fund administrators alerted the Attorney General's office of the false claim.

As part of the Attorney General's investigation into the matter, the police created a `sting’ operation using an overnight courier to deliver a letter to Mattier's residence on July 1, 2013, which stated that the claim had been approved and a check would be arriving July 2, 2013. On July 1, police officers observed Mattier sign for and accept the letter outside his residence while holding his cellular telephone. Subsequently, the police officers obtained a search warrant for Mattier's residence and for Mattier himself at that location.

Commonwealth v. Mattier, supra.

The opinion explains that, on July 2, 2013,

police conducted a controlled delivery of a fake check to Mattier. State police Trooper John Banik drove to Mattier's residence dressed as a Federal Express delivery driver in a white van bearing a Federal Express logo. Mattier was standing just outside his apartment building when Trooper Banik arrived. The two walked toward each other and met on the sidewalk in front of Mattier's apartment building. Trooper Banik asked Mattier to produce his driver's license and, after explaining that he was delivering a claim check, asked whether Mattier was injured in the bombings. Mattier responded that his aunt had been injured. The trooper copied Mattier's driver's license number onto his paperwork and handed Mattier the envelope. Other police officers in the area then surrounded Mattier and arrested him for identity fraud and attempted larceny.

During booking, Mattier's cellular telephone was placed into his property inventory. After being given the Miranda warnings, Mattier waived his rights and spoke with Trooper Banik. He admitted to submitting the claim on behalf of his long-deceased aunt and explained how he created the doctor's letter using forms obtained from the Internet. Trooper Banik obtained Mattier's cellular telephone from inventory, placed it in his office, and obtained a search warrant authorizing the search of the telephone.

Commonwealth v. Mattier, supra.

The court then points out that the search of the cell phone

produced hundreds of cellular telephone text messages between Mattier and Grice. The brothers corresponded about One Fund on the day of the community meeting they had attended, expressed their joy at receiving news that their claim had been approved, and ruminated about the type of Mercedes Benz vehicle that each would buy using the funds awarded on their claim. In one of the text messages, sent before Mattier created the forged letter regarding their dead aunt's claimed injuries, Grice wrote to Mattier: `Subject: Auntie, Nevie Shelton ss# Hospitalized from 4–15–13 til 5–3–13 18 days. Yes to double amputation and permanent brain damage.’

Commonwealth v. Mattier, supra.  

The Court then took up Mattier’s conviction for identity fraud, explaining that Massachusetts General Laws chapter 266 § 37E, provides as follows:

Whoever, with intent to defraud, poses as another person without the express authorization of that person and uses such person's personal identifying information to obtain or to attempt to obtain money, credit, goods, services, anything of value, any identification card or other evidence of such person's identity, or to harass another shall be guilty of identity fraud and shall be punished by a fine of not more than $5,000 or imprisonment in a house of correction for not more than two and one-half years, or by both such fine and imprisonment.

Commonwealth v. Mattier, supra. 

The court went on to explain that

[t]he essential elements of the crime are that a defendant `(1) posed as another person; (2) did so without that person's express authorization; (3) used the other person's identifying information to obtain, or attempt to obtain, something of value; and (4) did so with the intent to defraud.’ Commonwealth v. Giavazzi, 60 Mass.App.Ct. 374, 802 N.E.2d 589 (2004). The essence of the Commonwealth's case was that Mattier downloaded a template of a letter from the Boston Medical Center onto his computer, composed a letter on the template, copied Dr. Burke's signature onto that letter, and then submitted the letter to One Fund together with his claim form.

Commonwealth v. Mattier, supra. 

The opinion notes that the defendants challenged

this conviction on the ground that the particular conduct at issue here was insufficient to establish the first and third elements of the crime. They argue that Mattier did not `pose’ as Dr. Burke within the meaning of the statute and that even if he did, he did not obtain or attempt to obtain money from One Fund while posing as Dr. Burke. In rebuttal, the Commonwealth argues that the evidence, taken in the light most favorable to it, Commonwealth v. Latimore, 378 Mass. 671, 676–677, 393 N.E.2d 370 (1979), was sufficient to prove that Mattier `pose[d]’ as Dr. Burke because the language of the letter implicitly asserted that he, as drafter, was Dr. Burke and that the statute does not require proof that the posing occurred at the same time as the attempt to obtain funds. The trial judge, in denying the defendants' motions for a required finding of not guilty on the identity fraud charges, focused on the `pos[ing]’ element and accepted that Mattier did not `directly’ pose as Dr. Burke. He noted that the `statute is stretched in this case’ because the defendants `did not represent themselves to be Dr. Burke at all. They used Dr. Burke's identity to validate their intended fraud.’ He then concluded that the jury should decide whether Mattier `indirectly posed as [Dr. Burke] by inserting that dummied up letter.’

Commonwealth v. Mattier, supra. 

The Supreme Judicial Court began its analysis of the defendants’ argument by noting that the

issue before us is whether, on the facts of this case, Mattier's conduct is encompassed within the reach of the statute. When the meaning of a statute is at issue, `[w]e begin with the canon of statutory construction that the primary source of insight into the intent of the Legislature is the language of the statute.’ International Fid. Ins. Co. v. Wilson, 387 Mass. 841, 443 N.E.2d 1308 (1983). Where `the statutory language ‘[could] plausibly be found to be ambiguous,’ the rule of lenity requires the defendant[s] be given ‘the benefit of the ambiguity.’ Commonwealth v. Constantino, 443 Mass. 521, 525, 822 N.E.2d 1185 (2005). . . .

Commonwealth v. Mattier, supra. 

The court explained that it agreed with the

defendant's argument that he did not `pose’ as another person in the manner contemplated by the statute. General Laws c. 266, § 37E (a), defines `[p]ose’ to mean `falsely represent[ing] oneself, directly or indirectly, as another person or persons.’ Where G.L. c. 266, § 37E, does not define the phrase `falsely represent,’ we interpret the term in accordance with `approved usage of the language’ . . . Commonwealth v. Hinds, 437 Mass. 54, 768 N.E.2d 1067 (2002), cert. denied, 537 U.S. 1205 (2003). In that regard, other cases interpreting allegations of false representations require the existence of another party on the receiving end of the representation.  . . .

Accordingly, we interpret the phrase `falsely represent’ in G.L. c. 266, § 37E, to require the Commonwealth to prove that a defendant “pose[d]” as Dr. Burke in his dealings with a third party, One Fund.

Here, the operative act for the purposes of the identity fraud charge was the submission of a forged letter, purportedly written by Dr. Burke, to One Fund. Although Mattier misrepresented the authenticity of the letter to One Fund in claiming that the letter was from Dr. Burke, nothing in the evidence establishes that he ever falsely represented himself to be Dr. Burke.  Mattier submitted the claim form to One Fund under his own name; he did not falsely represent to One Fund that he was Dr. Burke at the time that he submitted the letter. Thus, Mattier's deception does not fall within the scope of the identity fraud statute; his criminal deception was properly charged as attempted larceny.

Commonwealth v. Mattier, supra. 

The defendants in this case raised a number of issues on appeal, but due to the complexity of those issues, this post only examines two of them, the second of which is the brothers’ argument that

their rights under the Federal and State Constitutions were violated by the trial judge's denial of the motion to excuse for cause jurors whom they claim were biased by their donations to One Fund (donating jurors). During voir dire, the judge asked each juror, `Have you or a member of your family raised any money for or contributed to or filed a claim with or received funds from the Boston One Fund?’ Over objections, the judge denied Grice and Mattier's motions to strike two donating jurors for cause. The judge explained that the mere act of donating was not sufficient for a juror to be excused for cause so long as the jurors credibly stated that they could be objective.’

Commonwealth v. Mattier, supra. 

The opinion explains that the trial judge

excused four donating jurors for cause where the jurors did not explicitly say that they could be indifferent. In one instance, the judge found a juror to be indifferent notwithstanding the fact that he and his firm had donated to One Fund. After being alerted by Mattier's counsel that the juror's firm had donated $1 million to the fund, the judge noted that he was going to `err on the side of caution,’ and he excused this juror for cause. Two donating jurors sat on the deliberating jury.

Commonwealth v. Mattier, supra. 

The court then referred to the applicable law, noting that

`Article 12 of the Declaration ofRights of the Massachusetts Constitution and the Sixth Amendment to the United States Constitution, applied to the States through the due process clause of the Fourteenth Amendment, guarantee the right of a criminal defendant to a trial by an impartial jury.’ Commonwealth v. Andrade, 468 Mass. 543, 11 N.E.3d 597 (2014), quoting Commonwealth v. McCowen, 458 Mass. 461, 494, 939 N.E.2d 735 (2010). `The presence of even one juror who is not impartial violates a defendant's right to trial by an impartial jury.’ McCowen, supra, quoting Commonwealth v. Vann Long, 419 Mass. 798, 802, 647 N.E.2d 1162 (1995). `The defendant has the burden of showing that the juror was not impartial and must do so by a preponderance of the evidence.’ Commonwealth v. Amirault, 399 Mass. 617, 626, 506 N.E.2d 129 (1987).

Commonwealth v. Mattier, supra. 

The Supreme Judicial Court then enunciated its ruling on the brothers’ argument that jury bias prejudiced them:

`[o]n a claim of structural error alleging that a jury were not impartial because a particular juror was biased, the defendant must show actual or implied juror bias.’ Commonwealth v. Hampton, 457 Mass. 152, 163, 928 N.E.2d 917 (2010). In deciding whether a juror is actually biased, `it is sufficient for the judge to ‘determine whether jurors [can] set aside their own opinions, [properly] weigh the evidence . . . and follow the instructions of the judge.’ Commonwealth v. Andrade, supra . . . . quoting Commonwealth v. Perez, 460 Mass. 683, 688–689, 954 N.E.2d 1 (2011).

We review for `clear abuse of discretion or a showing that the judge's findings were clearly erroneous.’ Commonwealth v. Torres, 437 Mass. 460, 469, 772 N.E.2d 1046 (2002), quoting Commonwealth v. Amirault, supr . . . . This is because such a determination `is essentially one of credibility, and therefore largely one of demeanor.’ Commonwealth v. McCowen, supra. . . . quoting Commonwealth v. Ferguson, 425 Mass. 349, 352–353, 680 N.E.2d 1166 (1997).

After a careful review of the record, we conclude that the judge did not abuse his discretion in finding that the jurors were not actually biased. The jurors either responded with a direct `No’ when asked whether the contribution would affect his or her ability to be objective or were further questioned until the judge was satisfied that each juror could be objective.

Commonwealth v. Mattier, supra. 

For these and other reasons, the Supreme Judicial Court affirmed

the convictions of attempted larceny and conspiracy against Grice and Mattier. Because we conclude that the evidence was insufficient to convict Mattier of identity fraud, we vacate that conviction and order entry of a judgment of not guilty. We do not remand to the Superior Court for resentencing, where Mattier's sentence is unlikely to be affected by our decision.

Commonwealth v. Mattier, supra. 

The Former Employee, the Computer Fraud and Abuse Act and Trade Secrets

This post examines an opinion recently issued by a U.S.District Court Judge who sits in the U.S. District Court for the District of Puerto Rico:  Sun West Mortgage Company, Inc. v. Matos Flores, 2016 WL 1030074 (2016).  The judge begins by explaining that

[i]n this action, Plaintiff Sun West Mortgage Company (`Sun West’) contends that its former employee, Defendant Miguel Matos Flores (`Matos’) breached his employment agreement and made unauthorized disclosures regarding company trade secrets in violation of The Computer Fraud and Abuse Act, 18 U.S. Code § 1030, et seq. (`CFAA’), the Stored Wire and Electronic Communications and Transactional Records Access Act, 18U.S. Code §§ 2071-2712 et seq. (the`Stored Communications Act’ or the `SCA’), and the Wire and Electronic Communication and Interception of Oral Communications Act, 18U.S. Code §§ 2510-2522 et seq. (the `Wiretap Act’). (Docket No. 1 ¶¶ 36-58.)

In addition to these federal claims, Sun West also contends that Matos violated various Puerto Rico laws, invoking diversity jurisdiction. (Docket No.¶¶ 1, 59-93.)

Presently before the Court is Matos' motion to dismiss the federal claims pursuant to FEDERALRULES OF CIVIL PROCEDURE Rule 12(b)(6) for failure to state a claim upon which relief can be granted. (Docket No. 25). Additionally, Matos requests jurisdictional discovery in order to ascertain whether the parties are completely diverse and Sun West's state law claims are properly before the Court. (Docket No. 25).

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

The judge then outlined the “relevant factual and procedural background,” i.e., the facts and events that brought the case before him and required that he resolve certain issues:

Sun West hired Matos as a loan officer on April 11, 2011. (Docket No. 1 ¶ 5.) He was responsible for `sourc[ing] prospective consumer borrowers’ and signing them up for single-family loan mortgage packages. Id. ¶ 6. As a result of his position, Matos had access to Sun West's borrower, broker, customer and investors lists, contractual arrangements, lists of real estate agents, vendors, suppliers, and service providers that had contractual arrangements with Sun West, Sun West's pricing and financial structures, marketing programs and plans, operational methods and cost information, accounting procedures, and research and development. Id. ¶ 7. Pursuant to the Employment Agreement (the `Agreement’), Matos agreed not to `publish, disclose or allow to be published or disclosed, Trade Secrets to any person who is not an employee of Sun West unless such disclosure is necessary for the performance of Loan Officer's obligation under the Agreement.’ Id. ¶ 8.

Carlos Gaztambide is the Executive President of Multiples Mortgage Corp, a competitor of Sun West in Puerto Rico. (Docket No. 1 ¶¶ 14-15.) Sun West alleges that on December 5, 2014, Matos told Gaztambide that he wanted to refer a client to Multiples Mortgage and that he was unhappy at Sun West.  Id. ¶¶ 15-16. Sun West also contends that Matos indicated he could set up a team of Sun West employees who would leave to join Multiples Mortgage.  Id. ¶ 17.

In an affidavit appended to the Complaint, Gaztambide states that he notified Matos that he would not hire anyone from Sun West without first speaking with Sun West's Executive Vice President Raul Padilla, and that Multiples Mortgage could not compensate any Sun West loan officers for referrals. (Docket No. 1-5 ¶¶ 5, 8.)

Gaztambide also stated that after Matos complained that Sun West was not properly compensating loan originators, Gaztambide asked to see Sun West's pricing. Id. ¶ 10. Gaztambide states that Matos accessed this information on his telephone and showed it to him. Id. Gaztambide states that later that day, Matos contacted him again to request that he keep their conversation confidential. Id. ¶ 11.

Sun West alleges that Matos sent and downloaded to his personal e-mail account 270 transmissions containing Sun West's confidential information and trade secrets without authorization, though it has not determined if Matos reproduced or revealed any of this information. (Docket No. 1 ¶¶ 22-23.)

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

The judge went on to outline the “standard of review” he was obliged to apply in ruling on the defendant’s motion:

When considering a motion to dismiss for failure to state a claim upon which relief can be granted, see FED. R. CIV. P. 12(b)(6), the court analyzes the complaint in a two-step process under the current context-based `plausibility’ standard established by the Supreme Court. See Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (U.S. Court ofAppeals for the 1st Circuit 2012) (citing Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) which discusses Ashcroftv. Iqbal, 556 U.S. 662 (2009) and Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)).

First, the court must `isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements.’ Id. A complaint does not need detailed factual allegations, but `[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.’ Ashcroft v. Iqbal, supra.  Second, the court must then `take the complaint's well-[pleaded] (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief.’ Schatz v. Republican State Leadership Comm., supra.  Plausible, means something more than merely possible, and gauging a pleaded situation's plausibility is a context-specific job that compels the court to draw on its judicial experience and common sense. Schatz v. Republican State Leadership Comm., supra (citing Ashcroft v. Iqbal, supra). This `simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary element. Bell Atl. Corp. v. Twombly, supra.

`[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.”’ Ashcroft v. Iqbal, supra (quoting FED. R. CIV. P. 8(a)(2)). If, however, the `factual content, so taken, “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” the claim has facial plausibility.’ Ocasio-Hernández v. Fortuño-Burset, supra (quoting Ashcroft v. Iqbal, supra).

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

The judge then turned to the analysis of the issues raised in Matos’ motion to dismiss, explaining that Matos argues that

`the bare assertion that the [ ] 270 emails sent to his personal email were trade secrets is insufficient to state a claim under CFAA, SCA or the Wire Tap Act.’ (Docket No. 25 ¶ 4.3.) The Court will address each in turn.

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

He began his analysis of the plaintiff’s CFAA claim by explaining that the CFAA

provides a civil remedy for victims who suffer damages in excess of $5,000 as a result of an individual who `knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access’ in furtherance of fraud.18 U.S. Code §1030(a)(4). Accordingly, to state a claim under the CFAA, Sun West must demonstrate that Matos accessed a protected computer `without authorization’ or that he `exceeded’ his `authorized access’ in order to commit a fraud. Id. Despite the CFAA's expansive language, the statute was not intended to criminalize `benign activities such as workplace procrastination.’ Advanced Micro Devices, Inc. v. Feldstein, 951 F. Supp. 2d 212, 218 (U.S. District Court for the District of Massachusetts 2013) (citing United States v. Nosal, 676 F.3d 854, 866 (U.S. Court of Appeals for the 9^th Circuit  2012)).

The term `without authorization’ is not defined by the statute and courts have split on whether to take a broad or narrow view of the language. Advanced Micro Devices, Inc, 951 F. Supp. 2d at 217-18 (describing CFAA interpretations). The narrow interpretation of the CFAA holds that the term `without authorization’ only reaches conduct by outsiders who did not have permission to access the plaintiff's computer. E.g., Shamrock Foods v. Gast, 535 F. Supp. 2d 962, 967 (U.S. District Court for the District of Arizona 2008). This interpretation of the statute would preclude a claim under the CFAA by an employer against its employee. Conversely, the broad view allows for an employer's CFAA claim against an employee who accesses a computer whenever he, without the employer's knowledge, `acquires an interest that is adverse to that of his employer or is guilty of a serious breach of loyalty.' Guest-Tek Interactive Entm't, Inc. v. Pullen, 665 F. Supp. 2d 42, 45 (D. Mass. 2009) (analyzing CFAA interpretations). Although the [U.S. Court of Appeals for the] 1st Circuit has not specifically addressed the meaning of `without authorization’ or `exceeded authorization,’ it has favored a broader reading of the statute. Guest-Tek Interactive Entm't, Inc. v. Pullen, supra. . . .

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

The judge went on to explain that

[e]ven under a broad interpretation of the statute, Sun West failed to satisfy the Twombly and Iqbal pleading requirements as to the CFAA claim. Sun West's allegation that Matos forwarded information to his personal e-mail account, sending 270 transmissions, is insufficient to state a claim. Sun West specifically does not allege that he copied, revealed to third parties, or reproduced any information, proprietary or otherwise. (Docket No. 1 ¶ 23.) Sun West also does not allege that Matos sent such emails with `intent to defraud,’ in furtherance of a fraud, or that he obtained anything of value. 18 U.S. Code § 1030(a). Similarly, Sun West's allegation that Matos showed confidential pricing information to Gaztambide on his telephone is insufficient to support an inference that he accessed a Sun West computer without authorization, or in excess of his authorization, absent allegations he did so in furtherance of a fraud. At most, the Court interprets this alleged incident as an attempt to justify his desire to leave Sun West to Gaztambide, who expressed skepticism that Matos was being mistreated by Sun West. (Docket No. 1-5 ¶ 10.)

Sun West Mortgage Company, Inc. v. Matos Flores, supra.

The judge therefore went on to find that Sun West’s claim

under the CFAA also fails to satisfy the damages requirement. The CFAA defines damage as `any impairment to the integrity or availability of data, a program, a system or information. . . .’ 18 U.S. Code § 1030(e)(8). This language does not encompass any harm resulting from the disclosure to a competitor of trade secrets or other confidential information. Courts have interpreted this to include `the destruction, corruption, or deletion of electronic files, the physical destruction of a hard drive, or any diminution in the completeness or usability of the data on a computer system.’ E.g., New South Equip. Mats, LLC v. Keener, 989 F. Supp. 2d 522 (U.S. District Court for the Southern District of Mississippi 2013) (finding that mere copying of electronic information is not enough to satisfy the CFAA's damage requirement). Although the First Circuit has not limited `loss’ under the statute to purely physical damages, the statute does not permit claims for matters unrelated to the computer. See Shirkov v. Dunlap, Grubb & Weaver, PLLC, 2012 WL 1065578, at *24 (U.S. District Court for the Southern District of Mississippi, Mar. 27, 2012).

Sun West asserts that its damages include `the hiring of a forensic computer examiner to determine the scope of Matos' breach and a damages assessment; the hiring of counsel to bring this legal action; the management's time necessary for addressing, responding to and remediating Matos' wrongdoings; and the value of the information Matos retrieved from the Sun West premises.’ (Docket No. 1 ¶ 41.) These damages are not sufficient to trigger the CFAA. Courts have held that legal fees do not constitute a loss under the CFAA. Wilson v. Moreau, 440 F. Supp. 2d 81 (U.S. District Court for the District of Rhode Island 2006). Similarly, management's time spent evaluating whether Matos' conduct is actionable is not recoverable under the CFAA. Id.

The value of information Matos may have retrieved from Sun West is speculative at best because Sun West concedes it has no basis to believe Matos `copied, revealed to third parties [or] reproduced’ any of this information. (Docket No. 1 ¶ 23.) Sun West does not allege that its computers or network were out of commission or damaged in any way. Neither does Sun West contend that it incurred costs repairing its computers. Thus, the motion to dismiss Sun West's claim pursuant to the CFAA is hereby GRANTED.

Sun West Mortgage Company, Inc. v. Matos Flores, supra (emphasis in the original).

The Judge then addressed and disposed of Sun West’s claims under the Stored Communications Act and the Wiretap Act.  Sun West Mortgage Company, Inc. v. Matos Flores, supra.  He began with the Stored Communications Act (“SCA”), explaining that it

prohibits an individual from intentionally accessing, without authorization, a facility that provides an electronic communication service or exceeding an authorization to access that facility, and thereby obtaining, altering or preventing authorized access to a wire or electronic communication while it is in electronic storage in such system. 18 U.S. Code § 2701(a). Under the statute, `any person aggrieved’ by knowing and intentional conduct that violates the SCA has a private right of action. 18 U.S. Code § 2707(a). An aggrieved person is one who was a party to an intercepted electronic communication, or against whom the interception was directed.  Padmanabhan v. Healey, 2016 WL 409673, at *3 (U.S. District Court for the District of Massachusetts Feb. 2, 2016).

Since the SCA was established in 1986, courts have struggled with the same language at issue under the CFAA, namely `access without authorization’ and `exceed [ ] an authorization to access’ a facility. Cheng v. Romo, 2012 WL 6021369 (U.S. District Court for the District of Massachusetts Nov. 28, 2012). As with the CFAA, the First Circuit has not directly addressed the meaning of these terms under the SCA; however, courts in the First Circuit have consistently applied CFAA caselaw in analyzing the SCA. Id. at *4 (citing Guest-Tek Interactive Entm't, Inc. v. Pullen, 665 F. Supp. 2d 42 (U.S. District Court for the District of Massachusetts 2009).

Thus, the Court's analysis under this statute is the same as under the CFAA. The Complaint fails to allege sufficient facts to support an inference that Matos obtained, altered, or prevented authorized access to a wire or electronic communication. The mere assertion that he sent Sun West's confidential information and trade secrets to his personal e-mail account, without more, does not satisfy the Plaintiff's pleading requirements under Twombly and Iqbal. The motion to dismiss Sun West's claim pursuant to the SCA is GRANTED.

Sun West Mortgage Company, Inc. v. Matos Flores, supra (emphasis in the original).

Finally, the judge took up Sun West’s claim under the Wiretap Act, explaining that

[w]ithout providing citation to a specific chapter or provision of the U.S. Code, Sun West claims that `Matos' actions were in violation of the Wiretap Act, which entitles Sun West to recover damages (compensatory and punitive) costs and attorneys' fees against Matos and injunctive relief to enjoin Matos from further violating the Wiretap Act.’ . . . 18 U.S. Code § 2511 prohibits any person from intentionally intercepting, endeavoring to intercept, or procuring any other person to intercept any wire, oral or electronic communication. It also prohibits disclosure and intentional use of information or the contents of such communications. Id. Under the statute, `intercept’ is the `acquisition of the contents of any . . . electronic communication . . . through the use of any electronic, mechanical or other device.’ 18 U.S. Code § 2510(4).

Sun West Mortgage Company, Inc. v. Matos Flores, supra (emphasis in the original).

The judge then went on to explain that, in order to

prevail under this statute, a plaintiff must demonstrate that the defendant `acted with the purpose of committing a criminal or tortious act other than the recording of the communication itself.’ Vazquez-Santos v. El Mundo Broad. Corp., 283 F. Supp. 2d 561, 566-67 (U.S. District Court for the District of Puerto Rico 2003) Similarly, `a disclosure or use of the contents of any intercepted communication is only unlawful if the person knows or has reason to know that the interception was illegal.’ Vazquez-Santos v. El Mundo Broad. Corp, supra. Importantly, the Wiretap Act permits interception of electronic communications if consent is given by at least one of the parties to the communications. United States v. Bennett, 538 F. Supp. 1045 (U.S. District Court for the District of Puerto Rico 1982).

In this case, Sun West has not specified which factual allegations in its Complaint support this claim. To the extent Sun West bases this claim on its allegations regarding the `270 transmissions to [Matos'] personal email from Sun West's information computer system,’ Sun West offers nothing to support its claim under the Wiretap Act that Matos acted with a criminal or tortious intent. (Docket No. 1 ¶ 22.) Sun West presents exclusively conclusory statements that support only a threadbare recitation of the elements of a claim. Allegations that Matos `intercepted the confidential information with a tortious intent’ and that he `intends to benefit economically from the confidential information he intercepted’ are insufficient to satisfy the pleading requirements. These allegations do not allow the Court to infer more than a mere possibility of misconduct, and thus, do not support a reasonable inference that Sun West is entitled to relief under the Wiretap Act. The motion to dismiss this claim is GRANTED.

Sun West Mortgage Company, Inc. v. Matos Flores, supra (emphasis in the original).

The judge then went on to explain that

[i]n sum, the Court GRANTS Defendant's motion to dismiss the federal claims under CFAA, the Stored Communications Act, and the Wiretap Act. These claims are DISMISSED with prejudice. Judgment shall be entered accordingly.

Sun West Mortgage Company, Inc. v. Matos Flores, supra (emphasis in the original).

As Wikipedia explains,

[p]rejudice is a legal term with different meanings when used in criminal, civil or common law. . . . Two of the more common applications of the word are as part of the terms `with prejudice’ and `without prejudice’. In general, an action taken with prejudice is essentially final; in particular, `dismissal with prejudice’ would forbid a party from refiling the case. . . .