Modis, Inc. v. Trisha Bardelli and Edge Technology Services, Inc.
531 F.Supp.2d 314
In the United States District Court for the District of Connecticut
Case Number 3:07cv1638 (WWE)
Before Senior District Judge W.W. Eginton
Decided on January 22, 2008

Relevancy of the Case: Proving jurisdictional loss for claiming damages under CFAA

Statutes and Provisions Involved

• The Computer Fraud and Abuse Act, 18 U.S.C. § 1030

Relevant Facts of the Case

• The plaintiff is a Florida-based company providing customised IT and personnel services. Bardelli, the defendant, is a Connecticut resident. The plaintiff employed the defendant as a Resource Development Manager. She was responsible for recruiting candidates to place at the plaintiff’s clients’ locations in the Meriden area.
• She also executed an employment agreement with the plaintiff, which contained restrictive covenants that prohibited her from disclosing the plaintiff’s confidential information and working for a competitor or a similar business within a fifty-mile radius of the plaintiff’s Meriden office in a similar capacity.
• While still employed with the plaintiff, she started communicating with Edge Technology Services (ETS) for potential employment. She used the plaintiff’s email system to access information contained in the database for her own purposes.
• The plaintiff alleges that she misappropriated confidential trade secrets and other proprietary information. Further, the plaintiff’s claims for damages are subject to an arbitration agreement. However, claims for injunctive and equitable relief are exempted from the agreement.

Prominent Arguments by the Counsels

• The plaintiff’s counsel argued that she obtained confidential information from a secured database called COSMOS. Her actions caused the plaintiff a loss of more than $5,000, fulfilling the requirements of CFAA.
• The defendant’s counsel submitted that the plaintiff has failed to establish the requisite elements under CFAA. She had authorisation to access the database during her employment with the plaintiff. Moreover, the plaintiff failed to establish the jurisdictional requirements of CFAA as her alleged conduct was limited to Connecticut.

Opinion of the Bench

• To claim relief under CFAA, the plaintiff must establish the jurisdictional amount of loss. In the present case, the plaintiff’s allegations fail to provide notice as to whether the plaintiff is asserting losses based on response cost or revenue due to an interruption of service.
• This case presents an instance where the plaintiff is obliged to amplify its claim of a jurisdictional loss with some factual allegation so that the claim is rendered plausible.

Final Decision

• The court dismissed the plaintiff’s claim under CFAA while denying the defendant’s motion to dismiss other claims.
• The court left it for the plaintiff to prove that the defendant’s action excluded it from exercising its right of ownership, possession, and control over its proprietary information for its conversion claim.

Anjini Pandey, an undergraduate student at Dr. Ram Manohar Lohiya National Law University, prepared this case summary during her internship with The Cyber Blog India in May/June 2022.