Tech Systems, Inc. v. Lovelen Pyles

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1359
TECH SYSTEMS, INC.,
Plaintiff - Appellee,
v.
LOVELEN PYLES,
Defendant – Appellant,
and
JOHN AND JANE DOES 1-10,
Defendants.
No. 13-2098
TECH SYSTEMS, INC.,
Plaintiff - Appellee,
v.
LOVELEN PYLES,
Defendant – Appellant,
and
JOHN AND JANE DOES 1-10,
Defendants.
Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:12-cv-00374-GBL-JFA)
Submitted: October 27, 2015 Decided: November 18, 2015
Before MOTZ and AGEE, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by unpublished per curiam opinion.
Eric H. Zagrans, ZAGRANS LAW FIRM LLC, Cleveland, Ohio, for
Appellant. Eric Scott Crusius, Stephen P. Ramaley, MILES &
STOCKBRIDGE P.C., Tysons Corner, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Lovelen Pyles appeals the district court’s orders denying
her motion under Fed. R. Civ. P. 50 for judgment as a matter of
law and granting attorney’s fees in favor of Tech Systems, Inc.
(“TSI”). Pyles asserts that the district court erred in denying
her motion as to violations of the Computer Fraud and Abuse Act
(“CFAA”), 18 U.S.C. § 1030 (2012); the Electronic Communications
Privacy Act, 18 U.S.C. § 2701 (2012); and her breach of
fiduciary duty. She also contends that the district court erred
in instructing the jury on punitive damages and in granting
TSI’s motion for attorney’s fees. We affirm.
I.
“We review de novo the legal conclusions upon which the
district court’s denial of judgment as a matter of law were
premised.” Belk, Inc. v. Meyer Corp., U.S., 679 F.3d 146, 164
(4th Cir. 2012). “If, viewing the facts in the light most
favorable to the non-moving party, there is sufficient evidence
for a reasonable jury to have found in [the non-moving party’s]
favor, we are constrained to affirm the jury verdict.” Lack v.
Wal-Mart Stores, Inc., 240 F.3d 255, 259 (4th Cir. 2001).
A.
“Although the CFAA is primarily a criminal statute, it
permits private parties to bring a cause of action to redress a
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violation of the CFAA . . . .” A.V. ex rel. Vanderhye v.
iParadigms, LLC, 562 F.3d 630, 645 (4th Cir. 2009). The civil
suit may be brought in limited circumstances by “[a]ny person
who suffers damage or loss” as a result of a CFAA violation. 18
U.S.C. § 1030(g). As relevant here, the violation must have
caused “loss to 1 or more persons during any 1-year period . . .
aggregating at least $5,000 in value.” 18 U.S.C.
§ 1030(c)(4)(A)(i)(I), (g). A person violates the CFAA by
“intentionally access[ing] a computer without authorization or
exceed[ing] authorized access, and thereby obtain[ing] . . .
information from any protected computer,” 18 U.S.C.
§ 1030(a)(2)(C), or “intentionally access[ing] a protected
computer without authorization, and as a result of such conduct,
caus[ing] damage and loss,” 18 U.S.C. § 1030(a)(5)(C).
This court narrowly interprets the terms “without
authorization” and “exceeds authorized access.” WEC Carolina
Energy Sols. LLC v. Miller, 687 F.3d 199, 206 (4th Cir. 2012).
“[A]n employee . . . accesses a computer ‘without authorization’
when [s]he gains admission to a computer without approval.” Id.
at 204. “[A]n employee ‘exceeds authorized access’ when [s]he
has approval to access a computer, but uses [her] access to
obtain or alter information that falls outside the bounds of
[her] approved access.” Id. “Notably, neither of these
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definitions extends to the improper use of information validly
accessed.” Id.
Pyles argues that the CFAA did not apply to her actions
during her employment with TSI because she, as the human
resources director, had full access to the computer information.
Under the WEC Carolina framework, we disagree. Pyles accessed
both the main computer network and financial servers without
authorization or in excess of her authority. Additionally, upon
termination of her employment, Pyles accessed her corporate
email account and company-issued Blackberry without
authorization. Moreover, TSI demonstrated damage that resulted
in losses from Pyles’ actions. Thus, there was sufficient
evidence for a reasonable jury to have found in TSI’s favor.
B.
A person violates the ECPA by: “(1) intentionally
access[ing] without authorization a facility through which an
electronic communication service is provided; or (2)
intentionally exceed[ing] an authorization to access that
facility; and thereby obtain[ing], alter[ing], or prevent[ing]
authorized access to a wire or electronic communication while it
is in electronic storage in such system.” 18 U.S.C. § 2701(a).
Pyles limits her ECPA challenge to whether she acted
“without authorization” or “exceed[ed] [her] authorization” in
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accessing TSI’s computer system. * Pyles contends not only that
TSI granted her permission to access the computer system, but
also that her actions did not go outside the bounds of that
permission. We disagree.
Authorization is a matter of permission and dependent on
its scope, not on whether information validly accessed was
properly used. See WEC Carolina, 687 F.3d at 204. Here,
although Pyles was permitted to use TSI’s email to carry out her
duties as human resources manager, she was not authorized to
access the server through which the email functioned in the
manner she did here. Additionally, her authorization to access
the Blackberry terminated with her employment. Thus, there was
sufficient evidence for a reasonable jury to have found in TSI’s
favor.
II.
In Virginia, to establish a breach of fiduciary duty, a
plaintiff must show that (1) the defendant owed a fiduciary
duty, (2) the defendant breached that duty, and (3) damages
resulted from the breach. Informatics Applications Grp.,
*Accordingly, Pyles has abandoned any challenge related to
the other elements of her ECPA violation. Fed. R. App. P.
28(a)(8)(A); Edwards v. City of Goldsboro, 178 F.3d 231, 241 n.6
(4th Cir. 1999).
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Inc. v. Shkolnikov, 836 F. Supp. 2d 400, 424 (E.D. Va. 2011).
“[A]n employee . . . owes a fiduciary duty of loyalty to [her]
employer during [her] employment.” Williams v. Dominion Tech.
Partners, LLC, 576 S.E.2d 752, 757 (Va. 2003). This duty
“prohibits the employee from acting in a manner adverse to his
employer’s interest.” Hilb, Rogal & Hamilton Co. of Richmond v.
DePew, 440 S.E.2d 918, 921 (Va. 1994). Moreover, “termination
does not automatically free a[n] . . . employee from his or her
fiduciary obligations” if the action was “founded on information
gained during the relationship.” Today Homes, Inc. v. Williams,
634 S.E.2d 737, 744 (Va. 2006) (internal quotation marks
omitted).
Pyles concedes that she owed TSI a fiduciary duty under
Virginia law. She asserts that the district court improperly
denied her motion to strike the breach-of-fiduciary-duty claim
because, she argues, the information she revealed was not the
kind that would give an advantage to a competing business.
Nevertheless, the record reveals that she breached her duty by
acting in bad faith with confidential information and by
disregarding TSI’s interests in accessing the email server,
resulting in damages to TSI. Accordingly, the district court
properly rejected this claim.
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III.
Finally, Pyles challenges the district court’s jury
instructions allowing for punitive damages and its award of
attorney’s fees in TSI’s favor. It is a “settled rule” that we
will not consider issues raised for the first time on appeal
absent “fundamental error or a denial of fundamental justice.”
In re Under Seal, 749 F.3d 276, 285 (4th Cir. 2014) (internal
quotation marks omitted). “Fundamental error is more limited
than the plain error standard that [this Court] appl[ies] in
criminal cases.” Id. (internal quotation marks omitted). Thus,
this court has used the plain error standard “as something of an
intermediate step in a civil case.” Id. at 286. “[W]hen a
party in a civil case fails to meet the plain-error standard, we
can say with confidence that [s]he has not established
fundamental error.” Id.
To establish plain error, Pyles must show that: (1) there
was an error, (2) the error was plain, and (3) the error
affected her substantial rights. United States v. Robinson, 627
F.3d 941, 954 (4th Cir. 2010). Even if Pyles makes this
showing, “we retain discretion to deny relief; plain errors
should only be corrected where not doing so would result in a
miscarriage of justice or would otherwise seriously affect the
fairness, integrity or public reputation of judicial
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proceedings.” Id. (alterations, citation, and internal
quotation marks omitted).
We have refused to undertake plain error review, however,
where a party “failed to make its most essential argument
anywhere in its briefs . . . : it never contended that the
district court fundamentally or even plainly erred.” In re
Under Seal, 749 F.3d at 292; see Makdessi v. Fields, 789 F.3d
126, 132 (4th Cir. 2015) (refusing plain error review where
appellant failed to assert that elements of such review were
satisfied). Failing to argue either, Pyles has abandoned these
claims. Moreover, Pyles’ jurisdictional argument is meritless
because the court properly exercised subject-matter jurisdiction
over her federal and state-law claims pursuant to 28 U.S.C.
§ 1331 (2012) (federal question), and 28 U.S.C. § 1367(a) (2012)
(supplemental jurisdiction).
Accordingly, we affirm the district court’s orders. We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED
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