Docket – March 6, 2019

4th U.S. Circuit Court of Appeals

Hately v. Watts (P), 4th Cir. (Wynn) from EDVA at Alexandria (Trenga).

In this case invoking the Virginia Computer Crimes Act and the federal Stored Communications Act, the district court erred both in finding that (1) the plaintiff failed to demonstrate the requisite statutory injury under state law, and (2) the plaintiff’s previously opened and delivered emails stored by a web-based email service were not in statutorily protected “electronic storage” under federal law.

When a federal court exercises supplemental jurisdiction over a state law claim, federal common law governs the preclusive effect of the federal court’s disposition of that claim. The federal rule of decision in such cases is to apply state preclusion law, unless the state preclusion law is incompatible with federal interests. Discerning no such incompatibility, this court applies Virginia preclusion law to determine that the doctrine of issue preclusion didn’t bar the plaintiff from litigating the adequacy of his allegations as to damages in a new complaint.

The plaintiff has pleaded facts that plausibly establish that he suffered consequential damages actionable under the Virginia Computer Crimes Act. The district court correctly held that previously delivered and opened emails, like those at issue, are no longer in temporary, intermediate storage incidental to their electronic transmission and, thus, do not fall within the scope of the Act’s subsection (A). But previously opened and delivered emails stored in a web-based email client are in “electronic storage” within the meaning of 18 U.S.C. § 2510(17)(B), which encompasses “any [1] storage of [2] such communication [3] by an electronic communication service [4] for purposes of backup protection of such communication.”

An entity that acts as an electronic communication service in one context may act as only a remote computing service in another context or, in still other contexts, may not act as either an electronic communication service or a remote computing service. For example, the court concludes today that companies such as Microsoft and Google function as an electronic communication services when they provide email services through their proprietary web-based email applications. But that doesn’t mean Microsoft and Google necessarily function as electronic communication services regarding other applications and services they offer, like cloud- based data processing and analytics services, or goods or products they sell or license, like hardware or software.

The messages a user of a web-based email service chooses not to delete — the messages that district court’s erroneous construction of subsection (B) leaves unprotected — are likely precisely the types of messages Congress sought to protect. By choosing to save such messages after reading them, the user indicates that the messages have sufficient personal, commercial, or other significance that they want to be able to access them again in the future. It defies logic that the unopened junk and spam email messages that a user leaves in his or her inbox or designated folder without opening would be entitled to more protection than those messages the user chooses to open and retain. This court doesn’t believe Congress intended such an absurd result when it enacted a statute intended to fill in the gaps in the then-existing privacy protections for electronic communications and therefore spur adoption of new communication technologies, like email.

Reversed and remanded.

Robinson v. U.S. Dep’t of Education (P), 4th Cir. (Wilkinson) from DMD at Greenbelt (Hazel).

The district court properly found that it lacked jurisdiction over the plaintiff-appellant’s lawsuit against the U.S. Department of Education for violations of the Fair Credit Reporting Act. It is settled law that a waiver of sovereign immunity must be unambiguous and unequivocal, and here Congress has enacted no such waiver.

This case centers on the meaning of the word “person” in 15 U.S.C. § 1681n and § 1681o, specifically whether the federal government is a “person” for purposes of FCRA’s general civil liability provisions. When Congress means to waive sovereign immunity in a provision otherwise applying to persons, it says so explicitly. The United States is not ordinarily considered to be a person. On this ordinary understanding, the Act’s enforcement provisions wouldn’t apply to the federal government. In the universe of possible waivers, this would be a very casual one, and the stark contrasts between the Act’s civil liability provisions and recognized waivers serve as strong evidence that Congress did not waive sovereign immunity under FCRA.

Affirmed.

Equinor USA Onshore Props. Inc. v. Pine Res. LLC (P), 4th Cir. (Gregory) from SDWV at Charleston (Berger).

This appeal concerns a contractual obligation to “spud” three wells on a tract of land in West Virginia. The parties dispute whether the obligation to “spud” the wells is an obligation only to begin drilling or to complete the wells to the point of mineral production. The district court properly ruled that the Purchase and Sale Agreement executed between the petitioner and respondent contains no requirement that the spudded wells be completed to production. The Agreement does not require hydrocarbon production.

The Agreement is ambiguous as to whether it required completion of the three wells to production. Because it is reasonably susceptible to two meanings — (1) that it required only that drilling be commenced and (2) that it required drilling completion and mineral production — extrinsic evidence may determine the intent of the parties. Here, while there is evidence that the petitioner believed the Agreement required production, the record as a whole supports the district court’s conclusion that the intent of the parties wasn’t completion of the three wells to production in the timeframe established by the Agreement’s section 5.7(b). The Agreement contemplates mineral production but stops short of requiring it.

The district court also properly concluded that the petitioner failed to prove it sustained any damages. The respondent doesn’t dispute that it breached the Agreement by failing to spud the second and third wells. But the petitioner’s evidence of damages was related entirely to royalties to which it would have been entitled had the three wells been completed and producing. No separate evidence of damages sustained solely due to the failure to spud the second and third wells was introduced. Absent evidence of damages flowing from the respondent’s failure to begin drilling the second and third wells, the district court committed no error in granting judgment to the respondent.

Affirmed.

U.S. District Court – Virginia Western

Owen v. County of Franklin, Va., WDVA at Roanoke (Conrad).

Franklin County, Virginia is not entitled to summary judgment as to the Title VII retaliation claim of a county employee, which were related to her claims of assault and battery against her supervisor.

The county argues that merely rejecting the supervisor’s sexual advances and asking him to stop his harassment did not constitute oppositional activity to support a retaliation claim. This court disagrees. This conclusion comports with the plain language of the opposition clause of Title VII and broad interpretations by the U.S. Supreme Court and 4th Circuit of what constitutes oppositional conduct.

Here, a reasonable jury could easily find that the plaintiff’s statements to her supervisor regarding his offensive behavior constituted protected activity. This is not a case in which an employee merely rejected unwanted advances on one occasion. Instead, the plaintiff’s supervisor subjected her to increasingly inappropriate sexual comments and physical contact, which she repeatedly told him to stop. The plaintiff also complained to her supervisor about another coworker’s harassing behavior, and she escalated the supervisor’s harassment before a final decision was made to termination her employment.

Motion for summary judgment denied.



Categories: Daily Dockets

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