The Tax Man Cometh -- Computer Fraud & Abuse Act Pleading Standards (Pacer Req'd)

An interesting case in the area of the Computer Fraud & Abuse Act came down last week from the United States District Court for the Western District of Missouri. The case, H&R Block Eastern Enterprises, Inc. v. J&M Securities, LLC, 2006 WL 1128744 (W.D.Mo. April 24, 2006), was brought after H&R Block found that the defendant, a collections company, was bringing numerous garnishment proceedings against its clients. Defendant could have obtained that information only -- H&R Block surmised -- by illegally accessing H&R Block's confidential electronic databases.

Defendant sought to dismiss by arguing that H&R Block's allegations were vague and that it could not claim "access by inference." The trial court disagreed, though, holding that under the liberal pleading standards, H&R Block's allegations were sufficient, particularly since it claimed that defendant could not have obtained the information to do what it did without improper access.

The court also ruled that H&R Block's essentially conclusory claims of damages were sufficient at the pleading stage and that "[p]ersuasive authority narrowly construing compensable losses under the [Computer Fraud & Abuse Act] will be considered when the facts are developed."

An article on the case from the Kansas City Star can be found here.