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U.S. Supreme Court Ruling on the Computer Fraud and Abuse Act Secures Decisive Win for Varnum Client

June 25, 2021

Victory at all Levels after High Court Decision

The U.S. Supreme Court's recent ruling regarding the interpretation of the Computer Fraud and Abuse Act (CFAA) sealed a victory in a related Varnum client matter that also hinged on the high court's interpretation of the CFAA.

On June 3, the Court rejected the broad interpretation of the CFAA’s "exceeds authorized access" provision, holding that a violation of that provision only occurs when one obtains "information from particular areas in the computer … to which their computer access does not extend." The matter upon which the Court ruled paralleled Varnum's defense in Royal Truck & Trailer Sales and Service Inc. v Kraft et al, which had been sent to the Supreme Court for review.

In Royal Truck, Varnum argued that the defendants were not in violation of the CFAA, as it does not bar employees from using company information to which they have authorized access. Following extensive briefing, the U. S. District Court for the Eastern District of Michigan agreed with that interpretation and granted Varnum's motion to dismiss. The matter was appealed to the U.S. Sixth Circuit Court of Appeals, which upheld the ruling in its first look at the issue. When Plaintiff next sought an appeal to the Supreme Court to overturn the Sixth Circuit’s ruling, Varnum vigorously opposed the Plaintiff’s petition for certiorari and the Court refused to take up the case.

Circuit courts across the country were split regarding their interpretation of the CFAA's reach. The Fourth, Sixth and Ninth Circuits took a stance that limited the reach of the law, while the First, Fifth, Seventh, Eighth and Eleventh Circuits interpreted the rule more broadly. The Supreme Court ruling provides final guidance on the matter.

Varnum partner Sam Vitale led the Varnum litigation team which included senior partner Rich Hewlett and associate Jordan Giles.

"We are gratified to see the Court agree with our position that the CFAA does not prohibit accessing data once access is authorized," Vitale said. "The decision gives clarity to both employers and employees regarding potential claims and liabilities under the CFAA."

Giles, a first-year associate, was added to the team upon joining the firm in early January. She provided important support, including participating in the research and drafting of Varnum's clients' petition to the Supreme Court.

Hewlett praised the Varnum team's work on the matter, crediting Vitale and Giles with providing clear and concise legal analysis to which all the courts agreed.

"It is gratifying to see that all of Sam's analysis, writing, and oral arguments throughout the case was consistent with the Supreme Court's ruling and resulted in a win for our client," Hewlett said. "It also was wonderful to have Jordan on the team in a meaningful role. She did a great job in support of Sam and is indicative of the types of associates we have at the firm and the kind of work they are exposed to early in their careers."

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