Wednesday, August 8, 2012

Dismissal of Computer Hacking Criminal Charges Will Not Be Appealed to U.S. Supreme Court

The Obama Administration will not seek U.S. Supreme Court review of an appeals court decision dismissing criminal charges against an employee who allegedly downloaded confidential data from his employer for purposes of starting his own business. The appeals court threw out charges under the Computer Fraud and Abuse Act (CFAA).

David Nosal, a former managing director at executive search firm Korn/Ferry International was indicted for allegedly persuading colleagues to download confidential information from the employer before leaving to start his new business.

The charges included alleged violations of Section 1030(a)(4) of the CFAA for knowingly and with intent to defraud, accessing a protected computer without authorization, or exceeding authorized access, and by means of such conduct furthering the intended fraud and obtaining anything of value. 18 USC § 1030 (a)(4)).

Three co-workers pleaded guilty to CFAA violations, but Nosal argued that the charges should be dismissed because the CFAA was intended to address computer hackers and "does not cover employees who misappropriate information or who violate contractual confidentiality agreements." He also argued that the CFAA does not extend to employees had authorization to access the information, even if their subsequent or intended use of the information was not authorized.

The en banc U.S. Court of Appeals for the Ninth Circuit agreed, ruling 9-2 that the CFAA charges should be dismissed. The court held that the CFAA does "not extend to violations of [website and company policy] use restrictions” and that the CFAA’s “exceeds authorized access” requirement is limited to “violations of restrictions on access to information, and not restrictions on its use.”

Now that the government has decided not to seek review of the decision by the U.S. Supreme Court, the Ninth Circuit’s ruling will stand, at least in the States of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, and at least until the Supreme Court gets to decide the issue in another case.

John Howley
New York, New York  

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