Vista Marketing, LLC v. Terri A. Burkett
812 F.3d 954
| 11th Cir. | 2016Background
- Franklin and Terri Burkett divorced after contentious proceedings in which Franklin repeatedly testified Vista (a telemarketing company he managed) had closed; Terri accessed Franklin’s Vista webmail using a password she said he had given her and provided emails to her divorce counsel to rebut his testimony.
- Vista (Franklin as corporate rep) sued Terri under the Stored Communications Act (SCA), 18 U.S.C. §§ 2701 et seq.; a jury found Terri violated § 2701 450 times and that her conduct was willful, but found Vista suffered $0 in actual damages and awarded $0 punitive damages.
- After the verdict, the district court exercised discretion to award Vista $50,000 in statutory damages (instead of Franklin’s requested $450,000), denied punitive damages and attorney’s fees, and denied Terri’s Rule 50 motions.
- On appeal, key disputed questions included whether accessed emails were in “electronic storage” (and thus protected), whether statutory damages under § 2707(c) may be awarded absent actual damages, whether jury instructions were erroneous, and whether the court could award punitive damages or attorney’s fees despite the jury’s findings.
- The Eleventh Circuit affirmed liability and most trial rulings, held the jury’s finding that at least some emails were in electronic storage resolved the ECS/ storage issue, vacated the statutory-damages award (concluding statutory damages require actual damages or violator profits), and affirmed denial of punitive damages and attorney’s fees.
Issues
| Issue | Plaintiff's Argument (Vista/Franklin) | Defendant's Argument (Terri) | Held |
|---|---|---|---|
| Whether accessed emails were in “electronic storage” under the SCA | At least some emails were protected; CrystalTech acted as an ECS and retained emails in electronic storage | Many accessed emails had been opened/delivered and were only stored by an RCS and thus not covered | Affirmed liability: Terri admitted she sometimes read emails before Franklin opened them, so those emails were in electronic storage with an ECS and protected under § 2701(a) |
| Whether § 2707(c) authorizes statutory damages absent proof of actual damages or violator profits | § 2707(c)’s $1,000 floor allows $1,000 per violation; court should award $450,000 (450 violations) | Statutory damages are available only to a “person entitled to recover,” i.e., one who proved actual damages or violator profits | Reversed district court’s $50,000 award and vacated statutory damages: statutory damages require proof of actual damages or profits (the phrase “person entitled to recover” limits eligibility) |
| Whether the district court could award punitive damages despite jury awarding $0 punitive damages | Court should award punitive damages because violations were willful and numerous | Jury found $0 punitive damages; punitive damages are discretionary and the Seventh Amendment prevents the judge from increasing a jury’s award | Affirmed denial of punitive damages: punitive damages are discretionary (“may”); court cannot override jury’s $0 punitive damages verdict |
| Whether attorney’s fees should have been awarded despite lack of damages | Fees necessary to encourage enforcement of SCA rights; prevailing party should get fees | Fees discretionary; case appeared motivated by vindictiveness and Vista showed no actual harm | Affirmed denial of fees: district court did not abuse discretion in declining fees given findings and context |
Key Cases Cited
- Doe v. Chao, 540 U.S. 614 (2004) (construing near-identical Privacy Act damages language to require proof of actual damages before statutory damages)
- Van Alstyne v. Elec. Scriptorium, Ltd., 560 F.3d 199 (4th Cir. 2009) (holding SCA does not permit statutory damages absent actual damages)
- United States v. Steele, 147 F.3d 1316 (11th Cir. 1998) (statutory interpretation begins with text of the statute)
- United States v. Warshak, 631 F.3d 266 (6th Cir. 2010) (recognizing reasonable expectation of privacy in stored emails)
- DIRECTV, Inc. v. Brown, 371 F.3d 814 (11th Cir. 2004) (noting congressional use of "may" indicates discretionary award in amended statutory damages provision)
- Millennium Partners, L.P. v. Colmar Storage, LLC, 494 F.3d 1293 (11th Cir. 2007) (Seventh Amendment limits judge’s ability to increase jury’s damages award)
- Fanin v. U.S. Dep’t of Veterans Affairs, 572 F.3d 868 (11th Cir. 2009) (discussing that actual damages means pecuniary loss in context of statutory damage provisions)