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4th Circuit Reverses Stored Communications Act Verdict

Published by on March 19, 2009

On March 18, 2009 the U.S. Court of Appeals for the Fourth Circuit issued a published opinion in the case of Van Alstyne v. Electronic Scriptorium, Limited.  The case involved claims under the Stored Communications Act, 18 USC § 2707(a) (“SCA”).  Van Alstyne filed the lawsuit after discovering that her former employer was accessing her […]

On March 18, 2009 the U.S. Court of Appeals for the Fourth Circuit issued a published opinion in the case of Van Alstyne v. Electronic Scriptorium, Limited.  The case involved claims under the Stored Communications Act, 18 USC § 2707(a) (“SCA”).  Van Alstyne filed the lawsuit after discovering that her former employer was accessing her personal email account after she left the company.  A copy of the opinion is here.  More after the break.

The opening paragraph of the Court’s opinion sums up the factual situation: 

During Bonnie Van Alstyne’s employment with Electronic Scriptorium, Limited (“ESL”), ESL’s President, Edward Leonard, began accessing her personal email account.  Van Alstyne discovered Leonard’s actions, which continued for more than a year after Van Alstyne left ESL, while litigating an unrelated matter with ESL in Virginia State Court. 

Van Alstyne discovered during discovery in a lawsuit brought by ESL against her in Virginia State Court that the owner of ESL had accessed her personal AOL email account after she left the company.  Indeed, he ultimately admitted to accessing her account at all hours of the day, from home and internet cafes, and from locations throughout the world.  During discovery in that case, he produced copies of 258 different emails he had taken from her AOL email account. 

Van Alstyne filed a lawsuit in the United States District Court for the Eastern District of Virginia under the SCA.  After a jury trial, Van Alstyne won an award of $150,000 in compensatory damages and $75,000 in punitive damages against the company owner personally, and $25,000 in compensatory damages in $25,000 in punitive damages from the company.  The District Court also awarded Van Alstyne $124,763.38 in attorney’s fees and $10,960.18 in costs. 

On appeal, the Defendants challenged the award of compensatory damages, which were composed of $1,000 statutory damages for each violation of the SCA.  Applying Supreme Court precedent under the Privacy Act, the court concluded that the SCA requires proof of actual damages as a prerequisite to recovering statutory damages.  Accordingly, the court reversed the award of compensatory damages to Van Alstyne.  The court did conclude, however, that proof of actual damages was not required before an award of either punitive damages or attorney’s fees under the SCA.  Nevertheless, the court remanded those claims to the District Court for reconsideration in light of its rulings. 

Although this case is both entertaining and informative with respect to the SCA, the hidden lesson in this case is the potential consequence of initiating litigation against a former employee.  We have previously commented on the danger of such a strategy here.  In this case, Van Alstyne had filed three claims against the company:  1) a sexual harassment charge with the EEOC; 2) a claim for unemployment benefits; and 3) a claim for unpaid commissions in State Court.  The EEOC claim was dismissed for lack of jurisdiction because ESL employed less than 15 individuals, Van Alstyne non-suited (dismissed) her claim for unpaid commissions, but did recover unemployment benefits.  The company, in turn, began a business tort lawsuit against Van Alstyne in state court.  Ultimately, that decision backfired on ESL because it ended up in bankruptcy and the company and its owner ended up having to defend the SCA litigation brought by Van Alstyne.  A costly proposition indeed.

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