Expert Business Systems, LLC v. Bi4ce, Inc. ( 2007 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1265
EXPERT BUSINESS SYSTEMS, LLC; DAVID ESAW,
Plaintiffs - Appellants,
versus
BI4CE, INCORPORATED, d/b/a Business
Intelligence Force; CHRISTOPHER S. CHODNICKI,
Defendants - Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Andre M. Davis, District Judge. (1:04-cv-
00600-AMD)
Argued: January 31, 2007 Decided: May 9, 2007
Before MICHAEL, MOTZ, and KING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Dennis J. Starks, Accokeek, Maryland, for Appellants.
Joseph A. Compofelice, Jr., MARCUS & BONSIB, Greenbelt, Maryland,
for Appellees. ON BRIEF: Bruce L. Marcus, MARCUS & BONSIB,
Greenbelt, Maryland, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Plaintiffs Expert Business Systems, LLC, and David Esaw
(collectively, “EBS”) appeal from the district court’s award of
summary judgment to defendants BI4CE, Incorporated, d/b/a Business
Intelligence Force, and Christopher Chodnicki (collectively,
“BI4CE”), pursuant to the court’s January 2006 Memorandum Opinion.
See Expert Business Systems, LLC v. BI4CE, Inc., No. 1:04-cv-00600-
AMD (D. Md. Jan. 31, 2006) (the “Opinion”). As explained below, we
are satisfied with the district court’s analysis of the issues in
its Opinion, and we are content to affirm its judgment in favor of
BI4CE.
I.
A.
On February 27, 2004, EBS filed a seven-count complaint
against BI4CE in the District of Maryland, alleging that BI4CE had
violated the Electronic Communications Privacy Act (the “ECPA”), 18
U.S.C. §§ 2510-2521, and the Computer Fraud and Abuse Act (the
“CFAA”), 18 U.S.C. § 1030, and also alleging various state law
claims. On December 16, 2005, the parties filed cross-motions for
summary judgment. Concluding that there were no issues of material
fact in dispute, and that EBS had failed to forecast sufficient
evidence to establish either of its two federal causes of action,
the district court awarded summary judgment to BI4CE on the ECPA
2
and CFAA claims. By its Opinion, the court declined to exercise
supplemental jurisdiction over EBS’s five state law causes of
action and dismissed them without prejudice. EBS contends on
appeal that the court erred in its Opinion in four specific
respects: (1) concluding that there was insufficient evidence to
support the ECPA and CFAA claims; (2) failing to view the evidence
in the light most favorable to EBS; (3) applying an incorrect
evidentiary standard for claims arising under the ECPA and CFAA;
and (4) making impermissible credibility determinations.
B.
EBS and BI4CE, which are information technology businesses,
entered into an agreement to develop a computer software program
after David Esaw, the president of EBS, and Christopher Chodnicki,
the president of BI4CE, met in early 2002 at a technology seminar.
Pursuant to a Teaming Agreement executed in January 2003, EBS and
BI4CE were to work together closely in a joint effort to develop a
web-enabled version of EBS’s proprietary software. After several
months, however, the business relationship between the parties
began to deteriorate and EBS terminated the Teaming Agreement in
July 2003. At that time, EBS informed BI4CE that it had breached
the Teaming Agreement by, inter alia, remotely accessing an EBS
desktop and laptop on several occasions without authorization. EBS
asserts that shortly after it notified BI4CE of its alleged breach
3
of the Teaming Agreement, BI4CE transmitted a program, code or
command to an EBS desktop computer which rendered it useless. As
specific evidence of interception, EBS contends that BI4CE
intercepted two emails addressed to fictional employees created by
EBS for marketing purposes.
EBS’s contentions on its ECPA and CFAA claims are spelled out
in its Complaint and these contentions and the related evidence
were carefully reviewed by the district court in the Opinion.
These contentions include, inter alia, the assertion that during
their business relationship, BI4CE gained access to two of EBS’s
computers and, through the unauthorized installation of a remote
access program, improperly gained access to the records and data
contained therein. Specifically, Count I of the Complaint alleges
that BI4CE violated the ECPA by intercepting, disclosing,
endeavoring to disclose, and using EBS’s wire, oral or electronic
communications.1 EBS then alleges, in its Count II, that BI4CE
violated the CFAA by remotely accessing EBS’s computers without
1
The ECPA creates a cause of action for a violation thereof
and provides, in relevant part:
[A]ny person who . . . intentionally intercepts,
endeavors to intercept, or procures any other person to
intercept or endeavor to intercept, any wire, oral, or
electronic communication; . . . shall be subject to suit.
18 U.S.C. § 2511(1)(a).
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authorization and transmitting a computer program that destroyed
one of EBS’s computers.2
In contrast, BI4CE explains that it installed the remote
access program at EBS’s request to allow EBS to remotely access
BI4CE’s server. According to BI4CE, this arrangement allowed EBS
to make changes to its product website, which BI4CE was developing
pursuant to the Teaming Agreement. BI4CE further contends that it
received the two emails at issue in the ordinary course of its
business arrangement with EBS and immediately forwarded them to
EBS. Finally BI4CE asserts that the damage to the computer was
caused by EBS’s own system upgrades and file downloads and not by
any harmful program or code sent by BI4CE.
Although it is undisputed that BI4CE had physical access to
the computers in question on at least one occasion, the evidence
fails to demonstrate that BI4CE installed any software that allowed
it remote access to EBS’s computers. Instead, the evidence
indicates that the software on these computers allowed EBS to
initiate remote access to BI4CE’s server, not vice versa.3 This
2
The CFAA creates a cause of action for a violation thereof,
and provides, in relevant part, that whoever causes a $5,000 loss
during a one-year period by “knowingly caus[ing] the transmission
of a program, information, code, or command, and as a result of
such conduct, intentionally caus[ing] damage without authorization,
to a protected computer” shall be subject to suit. 18 U.S.C. §
1030(a),(g).
3
EBS and BI4CE each submitted expert reports of forensic
computer examinations to the district court in support of their
respective motions for summary judgment. Lawrence Larsen, retained
5
evidence supports BI4CE’s contention that EBS requested the remote
access arrangement so that it could make alterations to its product
website, which BI4CE was developing and hosting. EBS also failed
to forecast any evidence to demonstrate that BI4CE had
“intercepted” the emails at issue or any other wire, oral or
electronic communication. Instead, the evidence is that BI4CE
received and promptly forwarded to EBS the two contested emails
pursuant to the Teaming Agreement and its obligations to host and
maintain the EBS product website on its server. Finally, EBS
failed to rebut BI4CE’s evidence that the complained of damage to
the EBS computer was caused by the activities of an EBS employee,
rather than being caused by a harmful program or code sent by
BI4CE.4
by EBS to examine the hard drives of its two computers, drew no
conclusions regarding the cause of EBS’s computer problems.
Instead, Larsen reported that he had not detected any suspicious
internet activity or spyware during his forensic review, and
indicated that it was the EBS computer that was initiating contact
with the BI4CE server, in a manner consistent with BI4CE’s
explanation of events.
4
EBS’s expert, Larsen, did not identify any evidence of a
program or code sent by BI4CE to cause damage to EBS’s desktop
computer in violation of the CFAA. In contrast, Michael
Wertheimer, retained by BI4CE, found forensic evidence indicating
that EBS’s difficulties with its desktop computer were ongoing,
rather than sudden, and that they may have been caused by a system
update, hardware installation or file download that all coincided
with EBS’s computer problems. Wertheimer did not find any evidence
of a harmful code or program sent by BI4CE and, accordingly,
concluded that there is no basis to identify any suspicious
activity on the part of BI4CE. EBS accordingly failed to forecast
any evidence that BI4CE had transmitted such a code or program
beyond its undisputed computer problems.
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II.
We review de novo a district court’s award of summary
judgment, viewing the facts and the reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party. See
EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005).
Summary judgment is permissible when “there is no genuine issue as
to any material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). When a party has submitted sufficient evidence to support
its request for summary judgment, the burden shifts to the
nonmoving party to show that there are genuine issues of material
fact justifying a trial. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586-88 (1986). And, of course,
unsupported speculation is not sufficient to defeat a properly
supported summary judgment motion. Ash v. UPS, 800 F.2d 409, 411-
12 (4th Cir. 1986). An award of summary judgment is also
appropriate when a party “fails to make a showing sufficient to
establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at
trial.” Celotex, 477 U.S. at 322. With these principles in mind,
we turn to EBS’s appellate contentions.
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III.
A.
EBS first contends on appeal that the district court erred in
concluding that EBS had forecast insufficient evidence to support
its federal claims under the ECPA and the CFAA. Having thoroughly
reviewed the Opinion and the parties’ appellate briefs, and having
heard and considered the oral argument, we are satisfied that the
court did not err in ruling that there is insufficient evidence to
support the ECPA and CFAA claims. We are therefore content to
reject this contention on the reasoning of the district court. See
Opinion 7-8 (concluding that there is an “utter lack of any
substantial probative evidence” to support the ECPA cause of
action, and an “utter lack of expert opinion evidence” to support
EBS’s “speculative assertions” of a CFAA cause of action).5
B.
EBS next contends that the district court applied an incorrect
evidentiary standard for its claims under the ECPA and CFAA, by
ruling that direct evidence is essential in order to establish such
claims. To the contrary, however, the Opinion does not so rule,
and it does not mandate that direct evidence is essential to
maintaining the two federal claims. Instead, the court concludes
5
The Opinion can be found at J.A. 1238-47. (Citations to
“J.A.___” refer to the Joint Appendix filed by the parties in this
appeal.)
8
that there is an “utter lack of any substantial probative evidence
that defendants wrongfully ‘intercepted’ the disputed e-mails” and
notes the “utter lack of any expert opinion evidence supporting the
speculative assertions by plaintiffs that defendants . . . damaged
the computers through the delivery of a [code or program].”
Opinion 7-8. The only discussion by the court of either direct or
circumstantial evidence is its characterization of the evidence
offered by EBS as “an increasingly attenuated series of inferences-
on-inferences based on circumstantial evidence arising from
defendants’ undisputed physical access to the plaintiffs’
computers.” Opinion 6. Accordingly, the Opinion does not premise
the court’s award of summary judgment to BI4CE on the fact that EBS
presented circumstantial evidence only. The award is, to the
contrary, simply based on the court’s conclusion that EBS’s
evidence was insufficient to present a genuine issue of material
fact.
C.
EBS next asserts that the district court, in its Opinion,
failed to view the evidence in the light most favorable to EBS, and
contends that the court erred when it failed to give proper weight
to the evidence presented. This contention is again contradicted
by the Opinion, where the court observes that, “[e]ven viewing the
record in favor of plaintiffs as the non-movants, no reasonable
9
juror could reasonably conclude by a preponderance of the evidence
that defendants violated § 2511.” Opinion 8. The Opinion points
out, as to EBS’s CFAA claim, that “plaintiffs have not even
attempted to respond to the unobjected-to and unrebutted opinion
stated by defendants’ forensic computer experts.” Id. After our
independent consideration of the record and the Opinion, we are
satisfied that the court viewed the evidence in the light most
favorable to EBS and correctly concluded that no reasonable juror
could find in EBS’s favor on the basis thereof. Although
reasonable inferences must be drawn in favor of EBS as the
nonmoving party, such inferences are required by law to “fall
within the range of reasonable probability and not be so tenuous as
to amount to speculation or conjecture.” Thompson Everett, Inc. v.
Nat’l Cable Adver., L.P., 57 F.3d 1317, 1323 (4th Cir. 1995). The
district court correctly applied the controlling legal principles
in this regard, and this contention of EBS is thus also without
merit.
D.
Finally, EBS contends that the district court made credibility
determinations in its Opinion that are inappropriate for a summary
judgment proceeding. Specifically, EBS asserts that the court
erred when it observed, by footnote, that emails sent by EBS
contained “harsh language” and “sarcasm,” when it stated that EBS
10
did not “accurately set forth the date on which plaintiffs’ interns
first exercised dominion and control over plaintiffs’ computers,”
and when it observed that an intern resisted BI4CE’s attempts to
depose him “apparently with plaintiffs’ acquiescence.” Opinion 4
n.6, 6 n.9. EBS is correct, of course, that credibility
determinations by a trial court are not permissible in a summary
judgment proceeding. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986) (noting that “[c]redibility determinations, the
weighing of evidence, and the drawing of legitimate inferences from
the facts are jury functions, not those of a judge, whether he is
ruling on a motion for summary judgment or for a directed
verdict”). Contrary to this contention, however, the Opinion does
not reflect that the district court made any such credibility
determinations. Moreover, the court did not rest its award of
summary judgment to BI4CE on the specified footnotes, but instead
on the failure of EBS to demonstrate a dispute of material fact on
the ECPA and CFAA claims. As a result, this final contention is
also rejected.
IV.
Pursuant to the foregoing, we are unable to identify any
reversible error made by the district court in its disposition of
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this case, and we thus affirm its award of summary judgment to
BI4CE.
AFFIRMED
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