387 F. Supp. 3d 830
M.D. Tenn.2019Background
- Wachter, Inc. employed Brian Pitts (manager) and Josh Estes (foreman) and provided them email and network access containing confidential pricing, customer lists, contacts, and financial data.
- Pitts (and allegedly Estes) forwarded Wachter emails and proprietary information to personal accounts, Pitts’s spouse Megan, and to Cabling Innovations, a company Pitts part‑owns, and used that information to bid for/obtain work for Cabling Innovations.
- Wachter terminated Pitts and sued Pitts, Estes, Megan Pitts, and Cabling Innovations asserting nine causes of action (federal and state), including CFAA, ECPA, SCA, breach of fiduciary/loyalty, tortious interference, unjust enrichment, conversion, and civil conspiracy.
- Defendants moved to dismiss under Rule 12(b)(6); the court reviewed the sufficiency of pleadings under Twombly/Iqbal standards.
- The court dismissed most federal claims (CFAA, ECPA, SCA) and multiple state claims as preempted or legally deficient, but allowed breach of duty of loyalty (Count V) to proceed and preserved civil‑conspiracy as a vehicle to extend liability to non‑employee defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pitts/Estes (and Cabling Innovations) violated the CFAA by accessing/obtaining Wachter data "without authorization" or "exceeding authorized access" | Employee misuse and transmission of employer data to a competitor is "without authorization," and Cabling Innovations obtained access via Pitts | Pitts/Estes had employer‑granted access; CFAA targets outsiders/hackers; authorized employees misusing data do not violate CFAA | Dismissed: court adopts narrow view — authorized employee access (even if misused) does not satisfy CFAA; transmission claim also fails for lack of alleged CFAA "damage" |
| Whether forwarding stored employer emails constituted an ECPA "interception" | Forwarding internal emails to outside accounts is interception and unlawful under ECPA | Forwarding involved emails at rest in an employee account, not acquisition "in flight"; thus not an interception | Dismissed: forwarding stored/delivered emails is not an ECPA interception under Sixth Circuit precedent (must be contemporaneous/in‑flight) |
| Whether SCA liability attaches where an employee with authorized access forwards employer emails to a competitor | Cabling Innovations (through Pitts) accessed employer facility without authorization; user exception inapplicable | Pitts was an authorized user of Wachter’s email system; SCA targets unauthorized access, not secondary use/disclosure; user exception applies | Dismissed as to SCA: user exception applies — allegations show Pitts had authorized access, so no SCA claim against defendants |
| Whether Wachter stated state‑law claims (fiduciary duty, tortious interference, unjust enrichment, conversion) | Misappropriation of confidential/proprietary information supports state torts and remedies against all defendants | Many common‑law claims are displaced or preempted by Tennessee Uniform Trade Secrets Act (TUTSA); some torts not recognized for intangible/confidential information; fiduciary duty claim requires officer/director status | Mixed: breach of fiduciary duty (Count IV), tortious interference (VI), unjust enrichment (VII), and conversion (VIII) dismissed (preemption or legal deficiency); breach of duty of loyalty (Count V) survives; civil conspiracy (Count IX) survives only to attach co‑conspirator liability to Count V |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requiring factual plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state plausible claim, not mere conclusions)
- Pulte Homes, Inc. v. Laborers' Intern. Union of N. Am., 648 F.3d 295 (6th Cir.) (definition of "damage" under CFAA for transmission claims)
- Luis v. Zang, 833 F.3d 619 (6th Cir.) (ECPA "intercept" requires contemporaneous acquisition—"in flight")
- Int'l Airport Ctrs., LLC v. Citrin, 440 F.3d 418 (7th Cir.) (broader view that employee misuse can be "without authorization" under CFAA; discussed and distinguished)
- Black & Decker (US), Inc. v. Smith, 568 F. Supp. 2d 929 (W.D. Tenn.) (advocates narrow CFAA reading; authorized access does not convert to unauthorized by misuse)