Patrick Hately v. Dr. David Watts
917 F.3d 770
| 4th Cir. | 2019Background
- Hately, a former Blue Ridge Community College student, retained his college-branded, Google-hosted web-based email account after graduation; the provider kept multiple server copies (including backup/restore copies).
- Hately shared his account password with a former partner, Nicole; she later gave that password to David Watts, who accessed Hately’s account and reviewed messages (Hately alleges he opened/read many emails and restored deleted-but-unread messages).
- Hately sued Watts (and Nicole) under the federal Stored Communications Act (SCA), the federal Computer Fraud and Abuse Act, and the Virginia Computer Crimes Act (VCCA); prior related litigation (Hately I) involved Nicole and resulted in dismissal of VCCA claims without an explained ruling.
- The district court in the instant suit dismissed Hately’s VCCA claims on collateral-estoppel and pleading-failure grounds, and granted summary judgment to Watts on the SCA claim, holding that previously opened/delivered emails in a web-based client were not in "electronic storage."
- The Fourth Circuit reversed: it held (1) collateral estoppel did not bar reconsideration of VCCA injury, (2) Hately plausibly pleaded consequential damages under the VCCA, and (3) previously opened and delivered emails stored by a web-based provider fall within SCA §2510(17)(B) (backup storage) and thus are in protected "electronic storage."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether collateral estoppel precludes relitigation of whether Hately alleged VCCA "injury to person or property" | Hately: prior dismissal did not finally decide the legal issue; new complaint adds factual allegations not previously litigated | Watts: prior dismissal (and court explanation) resolved injury issue against Hately | Reversed — collateral estoppel did not apply: prior order was ambiguous and mutuality prevents Watts (a non-party to the earlier ruling) from invoking defensive issue preclusion |
| 2. Whether Hately pleaded actionable VCCA damages (sufficiency under Rule 12(b)(6)) | Hately: alleged tangible consequential harms (time, calls to tech support, software, restoring messages) analogous to iParadigms | Watts: alleged time/expenses are speculative or improperly valued and not cognizable | Reversed — allegations plausibly state consequential damages under Fourth Circuit precedent (iParadigms), so dismissal was improper |
| 3. Whether previously delivered and opened emails in a web-based client are "electronic storage" under SCA §2510(17)(A) (temporary, intermediate storage incidental to transmission) | Hately: emails remain stored by provider and protected | Watts: once delivered/opened, messages are post-transmission and not "temporary, intermediate" | Affirmed in part — court agrees opened/delivered messages are not covered by §2510(17)(A) |
| 4. Whether previously delivered and opened emails are "electronic storage" under SCA §2510(17)(B) (storage by an electronic communication service for backup protection) | Hately: such emails are "stored," are "wire or electronic communications," are held by an electronic communication service, and are stored for backup protection (provider redundancy and user retention justify coverage) | Watts: §2510(17)(B) applies only to provider administrative backups or copies made as substitutes for originals; service copies are not "backup"; provider was a remote computing service not an electronic communication service for those copies | Reversed — court holds such emails meet all §2510(17)(B) elements: they are "stored," are "such communications," are held by an electronic communication service, and are stored for backup protection; thus they are in protected "electronic storage" |
Key Cases Cited
- Semtek Int'l v. Lockheed Martin Corp., 531 U.S. 497 (governs preclusive effect rules for federal courts exercising supplemental jurisdiction; federal common law applies but state preclusion law used unless incompatible)
- Taylor v. Sturgell, 553 U.S. 880 (framework for issue preclusion and its requirements)
- A.V. ex rel. Vanderhyne v. iParadigms, LLC, 562 F.3d 630 (4th Cir.) (consequential/time spent investigating unauthorized access qualifies as VCCA injury)
- Theofel v. Farey-Jones, 359 F.3d 1066 (9th Cir.) (discusses SCA §2510(17) and treats backup/subsection interpretations; supports that prior access doesn’t defeat storage analysis)
- United States v. Councilman, 418 F.3d 67 (1st Cir.) (examines §2510(17)(A) and post-transmission storage issues)
- Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107 (3d Cir.) (analyzes distinction between temporary intermediate storage and other storage under SCA)
- Konop v. Hawaiian Airlines, Inc., 302 F.3d 868 (9th Cir.) (recognizes SCA protection for private-configured electronic communications such as email)
- Warshak v. United States, 532 F.3d 521 (6th Cir.) (acknowledges basic e-mail services fall within SCA protections)