Tamlyn v. BlueStone Advisors LLC et al, No. 1:2017cv08893 - Document 25 (N.D. Ill. 2018)
Court Description: MEMORANDUM OPINION AND ORDER: For the reasons stated herein, BlueStone's Motion to Dismiss [ECF No. 12] is granted. Counts III and IV are dismissed without prejudice. Oral ruling set for 4/26/18 is vacated. Status hearing set for 4/26/18 at 9:00 a.m. for further scheduling. Signed by the Honorable Harry D. Leinenweber on 4/24/18:Mailed notice(maf)
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Tamlyn v. BlueStone Advisors LLC et al Doc. 25 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION KEVIN TAMLYN, Plaintiff, v. Case No. BLUESTONE ADVISORS, LLC, an Illinois Limited Liability Company; ANDREW ROYCE, Individually; and TRACIE RASMUSSEN, Individually, 17 C 8893 Judge Harry D. Leinenweber Defendants. MEMORANDUM OPINION AND ORDER Defendants BlueStone Advisors and Andrew Royce (collectively, “BlueStone”) move to dismiss Counts III and IV of the Complaint for failure to state a claim [ECF No. 12]. For the reasons stated herein, the Court grants the Motion in full and dismisses both Counts without prejudice. I. Kevin Tamlyn BlueStone from parties’ shared BACKGROUND (“Tamlyn”) July 2016 employment sold to commercial June 2017. agreement, insurance According Tamlyn for to the generated new clients for BlueStone and also renewed existing ones. For those services, BlueStone paid Tamlyn a base salary plus commissions. At some point, Tamlyn began to suspect that BlueStone was not paying him all of the commissions he had earned. He asked Dockets.Justia.com BlueStone for an accounting but did not receive one. Toward the end of his employment with BlueStone, Tamlyn courted a company called Framarx Corp. to become a new BlueStone client. But Tamlyn alleges that on June 19, 2017, before he could put a bow on the Framarx negotiations, BlueStone advised him that he would not receive any commission for the Framarx account nor for “any other clients [he] had already acquired.” ¶ 12.) On June 23, 2017, Tamlyn’s employment with BlueStone terminated. the (Compl., Dkt. 1-1 The details of this termination are not clear from complaint; terminated Tamlyn “as [employment] a simply result Agreement.” states of (Id. that BlueStone’s ¶ 15.) his employment breach of Regardless, the Tamlyn explains that BlueStone did not pay him any commission for the Framarx account nor for several other accounts Tamlyn either generated or renewed. In a July 9, 2017 letter confirming Tamlyn’s termination, BlueStone asked that Tamlyn turn over his username and password to his SHOP Marketplace account. such accounts licensed accounts, plan are hosted insurance manage options, termination, he brokers client and by the Healthcare.gov to maintain relationships, provide was According to the Complaint, quotes. only At BlueStone - 2 - and are corporate conduct the by insurance renewals, time employee used of with vet Tamlyn’s a SHOP account. Yet BlueStone ostensibly needed to access the SHOP Marketplace July 7, even 2017, after a Tamlyn’s BlueStone termination, employee however, allegedly so phoned on the Marketplace Call Center and pretended to be Tamlyn to secure the Call Center’s credentials, assistance thus in transitioning there into BlueStone’s hands. Tamlyn sued removed BlueStone that action in changing the log-in information client stored As a result of these behaviors, Illinois and Tamlyn’s now state moves to court. BlueStone dismiss two of the III, for Complaint’s five counts for failure to state a claim. II. Specifically, violations of the DISCUSSION BlueStone Computer moves Fraud to and dismiss Abuse Count Act (“CFAA”), 18 U.S.C. § 1030 et seq., and Count IV, for tortious interference with prospective economic advantage. On this Motion to Dismiss, the Court accepts all well-pleaded allegations as true and draws all reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A. The CFAA (Count III) To state a claim under the CFAA, a plaintiff must allege (1) damage or loss; (2) caused by (3) a violation of one of the substantive provisions set forth in § 1030(a), and (4) conduct involving one of the factors - 3 - of harm set forth in § 1030(c)(4)(A)(i)(I)–(VI). Maximum Smith, 636 218 F.Supp.3d omitted). In this 630, case, Indep. (N.D. Tamlyn Brokerage, Ill. alleges 2016) LLC v. (citations BlueStone violated § 1030(a)(3), which prohibits: intentionally, without authorization to access any nonpublic computer of a department or agency of the United States, access[ing] such a computer of that department or agency that is exclusively for the use of the Government of the United States or, in the case of a computer not exclusively for such use, is used by or for the Government of the United States and such conduct affects that use by or for the Government of the United States[.] 18 U.S.C. § 1030(a)(3). Finally, of the six possible “factors of harm” required in the fourth CFAA element, only one could possibly be present here based on the current allegations. That is “loss to 1 or more persons during any 1-year period . . . aggregating at least $5,000 in value” in economic damages. 18 U.S.C. § 1030(c)(4)(A)(i)(I), (g). Tamlyn argues that when BlueStone accessed the SHOP Marketplace using Tamlyn’s wrongly-begotten log-in credentials, BlueStone intentionally nonpublic, governmental Tamlyn by Marketplace. As a depriving without computer him of authorization and his that said valuable accessed access access a harmed to the There are several problems with this allegation. threshold BlueStone’s and access matter, of the however, Tamlyn Marketplace - 4 - is through correct that Healthcare.gov, which is allegedly hosted on U.S. government constituted accessing a government computer. servers, See, 18 U.S.C. § 1030(a)(3). As the Eighth Circuit summarized: “The language of § 18 U.S.C. 1030(e)(1) [(which defines “computer”)] is exceedingly broad. If a device is ‘an electronic . . . or other high speed arithmetic, data or processing storage device functions,’ it performing is a logical, computer. This definition captures any device that makes use of a[n] electronic data processor, examples of which are legion.” United States v. Kramer, 631 F.3d 900, 902-03 (8th Cir. 2011) (citations omitted) (noting that coffeemakers, microwave ovens, watches, telephones, children’s toys, MP3 players, refrigerators, heating and airconditioning units, radios, alarm clocks, televisions, and DVD players fit within the statutory definition of “computer”). The Kramer court further recognized that while this definition might have a broad sweep, possible over-breadth is a matter for Congress, not the courts, to correct: “As more devices come to have built-in intelligence, [§ 1030(e)(1)] grows. statute but does not the effective scope of This might prompt Congress to amend the authorize the judiciary to give the existing version less coverage than its language portends.” Id. at 904 (quoting United States v. Mitra, 405 F.3d 492, 495 (7th Cir. 2005)). BlueStone’s alleged access of a government server - 5 - fits within that expansive definition. Accord, United States v. Drew, 259 F.R.D. 449, 461 (C.D. Cal. 2009) (treating access of a private company’s server through use of that company’s website as accessing a computer under the CFAA); but cf. Fidlar Techs. v. LPS Real Estate Data Sols., Inc., 810 F.3d 1075, 1084 (7th Cir. 2016) (finding that a three-tiered system comprising county databases, facilitated a user-interface, communication and between a “middle the tier” databases that and the interface did not meet the definition of “computer”). Beyond fall short. server this, however, Tamlyn’s CFAA allegations largely He maintains that BlueStone accessed the government “without authorization” because BlueStone secured that access only by recovering Tamlyn’s log-in credentials through misrepresentation. whether, On this score, notwithstanding misrepresentations, Tamlyn’s the parties BlueStone’s employment argue over telephonic agreement vested in BlueStone a right to all of the data Tamlyn created in his SHOP account and thus, by definition, BlueStone was authorized to access the account irrespective of Tamlyn’s consent. But Tamlyn’s “without authorization” argument is hamstrung by his failure to “nonpublic.” allege plausibly These two that the server elements—“without in question authorization” is and “nonpublic”—are related, because if a computer is public, the - 6 - public is de facto authorized to access it. See, Int’l Airport Centers, L.L.C. v. Citrin, 440 F.3d 418, 420 (7th Cir. 2006) (remarking in dicta that the public websites open to the public). authority defining is authorized of includes Legal “nonpublic” “most Education government access Here, neither party cites any in the CFAA Court’s own efforts have turned up little. Office to has explained computers, but context, and the However, the DOJ’s that not “nonpublic” [government] Internet servers that, by design, offer services to members of the general public.” Education, U.S. Dep’t of Justice Office of Legal Prosecuting Computer https://www.justice.gov/ Crimes (2015), sites/default/files/criminal- cips/legacy/2015/01/14/ccmanual.pdf. Here, Tamlyn alleges that any member of the public with a broker’s license can create a SHOP account and use it to access the government server. It is not clear, however, that a mere licensure requirement renders a computer “nonpublic” guiding authority, under the subsection Court is (a)(3), doubtful and that absent it any would. Ultimately, though, the Court need not decide whether Tamlyn has plausibly alleged that the accessed server was nonpublic; his CFAA claim fails for another reason. Simply enough, Tamlyn stumbles in alleging the requisite damages. Because none of the other “factors of harm” set forth - 7 - in § 1030(c)(4)(A)(i) could plausibly fit the facts here, Tamlyn must allege that he suffered at least $5,000 in economic damages within one year. Id.; 18 U.S.C. § 1030(g). He does not do so. Tamlyn argues the Court should simply infer that the loss of access to his SHOP account “meet[s] damages claim under [the] CFAA.” the requirements for (Compl., Dkt. 22 at 2.) the Twombly/Iqbal pleading standard is not so forgiving. a But See, Iqbal, 556 U.S. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Tamlyn must specifically allege damages as well as an explanation for how BlueStone’s conduct caused them. He cannot hope to limp into court on inference alone. See, e.g., Modrowski v. Pigatto, No. 09 C 7002, 2010 WL 2610656, at *2 (N.D. Ill. June 25, 2010) (dismissing a CFAA § (a)(2) claim for lack of requisite specificity in alleging damages). fails to state a CFAA claim, and Count III is Tamlyn accordingly dismissed without prejudice. B. To state a Tortious Interference (Count IV) claim under Illinois law for intentional interference with prospective economic advantage, “a plaintiff must allege (1) a reasonable expectancy of entering into a valid business relationship, (2) the defendant’s knowledge of the expectancy, (3) an intentional and unjustified interference by the defendant that induced or caused a breach or termination of - 8 - the expectancy, and (4) damage to the plaintiff resulting from the defendant’s interference.” Co., 806 F.3d 967, 971 (7th Foster v. Principal Life Ins. Cir. 2015) (citations omitted). Tamlyn alleges that his SHOP account held information related to his former clients and that BlueStone’s seizure of his account prevented him from continuing to service those clients. First of all, BlueStone points out that Tamlyn’s employment agreement forbade him from “engag[ing] in any other gainful employment,” so Tamlyn could not, while still employed, have developed any client relationships BlueStone. Further, former 2019. of those he cultivated for (Employment Agreement, Ex. A to Compl., Dkt. 1-1.) the agreement BlueStone termination. independent restricted clients for at Tamlyn least from two servicing years after any his That two-year proscription does not end until June As such, BlueStone argues that the only SHOP account client data to which Tamlyn would be entitled access would be data for clients whose relationships predated—and presumably were paused during—Tamlyn’s employment. then Tamlyn does not dispute this reading of the agreement, though he argues in response that the agreement, or at least portions of it, is not enforceable. This argument is alleges unenforceability. - 9 - new. The Complaint nowhere Either way, Tamlyn’s claim does not pass muster because he fails to allege plausibly that BlueStone knew of any reasonable business expectancy. There are two groups of possible clients to consider: those clients Tamlyn serviced while in BlueStone’s employ, and those clients Tamlyn worked with prior to, and not during, his year in BlueStone’s employ. Tamlyn argues that the post-employment restrictive covenant contained in his employment agreement is not enforceable, and so he was free to service former BlueStone clients after his termination. misses the mark. The question in the tortious This argument interference analysis is not whether Tamlyn was bound by the covenant, but rather whether BlueStone believed he was. If BlueStone believed as much, BlueStone would also believe Tamlyn could not have any reasonable business expectancy with former BlueStone clients. But Tamlyn never alleges that BlueStone had reason to doubt the enforceability of the post-employment covenant or the agreement generally, so his tortious interference claim has no legs vis-àvis the first group of clients. Next, Tamlyn’s allegations fare no better regarding the second group of possible clients. He alleges that: “Defendants knew of [his] reasonable expectations of continuing his existing business relationships clients serviced through on [sic] his SHOP account.” Dkt. 1-1 ¶ 49.) with the (Compl., But even if Tamlyn means to refer to pre- 10 - BlueStone-employment clients, he has not explained who these clients are, why he reasonably expected to be able to work with them after an ostensible year without professional contact, or how BlueStone Complaint on came to this know about score allegations do not suffice. is such an threadbare, expectation. and His threadbare Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 827 (7th Cir. 2015) (citing Iqbal, 556 U.S. at 678). Count V is dismissed without prejudice III. For Dismiss the [ECF CONCLUSION reasons stated No. is 12] herein, granted. BlueStone’s Counts III Motion and IV to are dismissed without prejudice. IT IS SO ORDERED. Harry D. Leinenweber, Judge United States District Court Dated: 4/24/2018 - 11 -
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