Lasco Foods, Inc. v. Hall and Shaw Sales, Marketing, & Consulting LLC
600 F.Supp.2d 1045
In the United States District Court for the Eastern District of Missouri
Case Number 4:08CV01683JCH
Before District Judge J.C. Hamilton
Decided on January 22, 2009

Relevancy of the Case: Treatment of “interruption in service” as a ground for violation of CFAA

Statutes and Provisions Involved

• The Computer Fraud and Abuse Act, 18 U.S.C. § 1030
• The Stored Wire and Electronic Communications Act, 18 U.S.C. § 2701

Relevant Facts of the Case

• The plaintiff is a Missouri-based food corporation. Two of its former employees, Hall and Shaw, are owners and operators of the defendant company.
• During his employment with the plaintiff, Hall was a Regional Sales Manager, while Shaw worked as a National and Regional Sales Manager.
• Considering their role, they had virtually unrestricted access to the plaintiff’s computers. The plaintiff faced interruption in service due to deleting information from their services. It alleges unlawful copying and downloading of its trade secrets for personal use.

Prominent Arguments by the Counsels

• The defendants’ counsel argued that the plaintiff’s claim under CFAA should fail as it did not allege damage and loss. Moreover, their access to Lasco’s computers was not in excess of authorisation.

Opinion of the Bench

• Federal courts have noted that the general purpose of SECA and CFAA acts was to create a cause of action against computer hackers.
• The plaintiff has stated both loss and damage. Impairment to the integrity or availability of data or interruption in service would require the plaintiff to incur reasonable costs. An interruption in service for 108 days is sufficient to demonstrate the impact of the defendants’ actions.
• However, the plaintiff has filed to prove that the defendants accessed information without authorisation.

Final Decision

• The court dismissed the defendants’ motion to dismiss SECA and CFAA claims while granting time to the plaintiff to amend its complaint.

Srikari Ammanamanchi, an undergraduate student at the NALSAR University of Law, prepared this case summary during her internship with The Cyber Blog India in May/June 2022.