CFAA only for hacking – at least in the West

In U.S. v. Nosal __ F.3d __ (2012), the Ninth Circuit made clear that it considers the scope of the Computer Fraud and Abuse Act to be focused specifically on computer hacking rather than more broadly related to violations of corporate policies and terms of service agreements.

The case arose out of a minor bit of corporate espionage – and the hubris and stupidity that often accompanies such activities. David Nosal, former employee at the executive search firm of Korn/Ferry, “convinced some of his former colleagues who were still working for Korn/Ferry to help him start a competing business.”  The Korn/Ferry employees used their access to the system to download confidential information, including source lists, names and contact, which they emailed to Nosal. They were all caught. The government indicted Nosal was on twenty counts, including trade secret theft, mail fraud, conspiracy and violations of the CFAA.

Although Nosal did not violate the CFAA, he was charged with aiding and abetting those former colleagues who did. The aiding and abetting count rests on whether the conduct of Nosal’s former colleagues violated the CFAA when they used their authorized access to the confidential database to violate the terms of confidentiality and theft of trade secrets.

Writing a clear, rather stinging rebuke of the government’s position, Judge Kozinski explained that the section of the CFAA is limited to computer hacking, not every violation of use.

The CFAA defines “exceeds authorized access” as “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.” 18 U.S.C. § 1030(e)(6).

This language can be read either of two ways: First, as Nosal suggests and the district court held, it could refer to someone who’s authorized to access only certain data or files but accesses unauthorized data or files—what is colloquially known as “hacking.” For example, assume an employee is permitted to access only product information on the company’s computer but accesses customer data: He would “exceed[] authorized access” if he looks at the customer lists.

Second, as the government proposes, the language could refer to someone who has unrestricted physical access to a computer, but is limited in the use to which he can put the information. For example, an employee may be authorized to access customer lists in order to do his job but not to send them to a competitor.

… The government’s interpretation would transform the CFAA from an anti-hacking statute into an expansive misappropriation statute. … The government’s construction of the statute would expand its scope far beyond computer hacking to criminalize any unauthorized use of information obtained from a computer. This would make criminals of large groups of people who would have little reason to suspect they are committing a federal crime.

… Minds have wandered since the beginning of time and the computer gives employees new ways to procrastinate, by chatting with friends, playing games, shopping or watching sports highlights. … Employers wanting to rid themselves of troublesome employees without following proper procedures could threaten to report them to the FBI unless they quit. Ubiquitous, seldom-prosecuted crimes invite arbitrary and discriminatory enforcement.

There are a number of subsections of the CFAA and the government takes the position that the broad interpretation this provision is limited by the need to prove an intent to defraud. In those other sections of the CFAA where intent to defraud is not required, the statute’s scope can still be more limited. But the Ninth Circuit points out that the language of the offense is the same such that a different scope in the same statute for the same phrase is unworkable.

The Ninth Circuit remains at odds with decisions in other circuits. Eventually either Congress or the Supreme Court will need to reconcile this increasingly important tension in the CFAA. For now, one’s exposure to federal criminal prosecution depends, at least in part, on where one accesses the computer.