528 F.Supp.3d 1168
D. Nev.2021Background
- Motogolf sold golf equipment online and used pay-per-click (PPC) ads; ads disappear for other viewers after a contracted number of clicks and provide valuable demographic data.
- Motogolf alleges defendants Top Shelf Golf, Top Shelf IT, Ivan and Inna Sokolovich repeatedly located and clicked Motogolf’s PPC ads to exhaust clicks, increase Motogolf’s ad costs, and gain market advantage.
- Motogolf sent cease-and-desist letters in March and August 2019 demanding the defendants stop clicking; Motogolf alleges the clicking continued and exhausted PPC budgets weekly.
- Motogolf further alleges Top Shelf and Ivan told Motogolf’s vendors that Motogolf had been interfering with Top Shelf’s ads, and at least one vendor withdrew commercial authorization from Motogolf.
- Motogolf sued for violations of the CFAA, Nevada computer-crimes law (NCLL), Lanham Act, Nevada Deceptive Trade Practices Act (NDTPA), Nevada RICO, intentional interference with contracts and prospective economic advantage, plus conspiracy and aiding and abetting.
- Defendants moved to dismiss; the court granted the motion in part, dismissing several claims with leave to amend and allowing the prospective-interference and related conspiracy/abetting claims to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CFAA / NCLL: whether defendants accessed Motogolf’s computers "without authorization" | Cease-and-desist letters revoked any authorization; click scheme caused loss of data and market advantage | Motogolf’s website and ads are publicly accessible; cease-and-desist cannot convert public access into unauthorized access | Dismissed: public access means no "without authorization" under HiQ; NCLL likewise dismissed; leave to amend granted |
| Pleading specificity under Rule 9(b): roles of each defendant in alleged fraud | Alleged that each defendant engaged in the same clicking conduct; complaint ties IPs to defendants | Complaint lumps defendants together and repeats identical allegations without differentiating roles | Denied as to this ground: alleging each defendant performed the same acts is sufficient here |
| Intentional interference with contractual relations | Defendants contacted vendors leading to at least one vendor withdrawing authorization | Complaint fails to identify the vendor(s), specific contracts, dates, or speakers as required | Dismissed for failure to plead the specific contracts/vendors and knowledge; leave to amend granted |
| Intentional interference with prospective economic advantage | Defendants’ clicks prevented prospective customers from seeing ads, harming Motogolf’s prospective relationships | Must identify particular prospective customers to state claim | Survived: court predicts Nevada would permit alleging a class of prospective customers without naming individuals |
| NDTPA / Lanham Act: misrepresentation, reliance, and likelihood to deceive | Clicking ads constitutes a false representation/transaction and caused harm to Motogolf | Clicking is not a "transaction" or a misrepresentation; Motogolf did not rely on any representation | Dismissed: NDTPA dismissed for failure to plead reliance/causation; Lanham Act dismissed for failure to allege likelihood of deception; leave to amend granted |
| Nevada RICO: whether click scheme amounts to "taking property" under racketeering statute | Click scheme deprived Motogolf of valuable ad data and market share, amounting to taking property | Complaint does not allege facts showing defendants "took property" as required for racketeering predicate | Dismissed for failure to allege taking property; leave to amend granted |
| Aiding & abetting and conspiracy | Defendants conspired and aided each other to commit the pleaded unlawful acts | Many underlying claims fail, so conspiracy/abetting claims based on them must fail | Dismissed where underlying claims dismissed; conspiracy/aiding & abetting survive only to the extent tied to the surviving prospective-interference claim |
Key Cases Cited
- HiQ Labs, Inc. v. LinkedIn Corp., 938 F.3d 985 (9th Cir. 2019) (publicly accessible website access is not "without authorization" under the CFAA)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (courts need not accept legal conclusions or conclusory allegations)
- LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009) (elements for a CFAA § 1030(a)(4) claim)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) requires particularity: who, what, when, where, how)
- Neubronner v. Milken, 6 F.3d 666 (9th Cir. 1993) (relaxed pleading when facts are in defendant’s exclusive control)
- Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) (must identify each defendant's role in an alleged fraudulent scheme)
- Oracle USA, Inc. v. Rimini St., Inc., 879 F.3d 948 (9th Cir. 2018) (state computer-crime statutes interpreted in light of similar federal/state statutes)