Wednesday, July 26, 2006, 7/26/2006 09:55:00 AM

"You're Suing Me? Then Front Me My Attorney's Fees . . . . "

By Todd
This really isn't a posting dealing with the Computer Fraud and Abuse Act because the decision of Judge Posner of the Seventh Circuit doesn't technically address CFAA issues. That said, the decision in International Airport Centers, LLC v. Citrin, 2006 WL 2051659 (7th Cir., July 25, 2006) is an interesting one.

Mr. Citrin was a former executive with International Airport Centers. When he handed back his company laptop as part of his departure, he apparently deleted some of the company's computer data on that laptop. The company did not like this. They sued him for violations of the Computer Fraud and Abuse Act. He argued originally that mere deletion of information is not a violation of the CFAA. The Seventh Circuit told him he was wrong. He spent a lot in attorney's fees making his arguments.

Mr. Citrin sued in Delaware Chancery Court for enforcement of the indemnity provision of his employment contract that International Airport Centers must pay for his attorney's fees if he is sued for matters arising out of his work for the company. That same indemnity provision provides that International Airport Centers must front Mr. Citrin his attorney's fees while he's defending himself and he is obligated to reimburse the company if he is not the prevailing party.

Well, Mr. Citrin went to Delaware to get the advance that International Airport Centers refuses to give him. He wants $1.3 million for legal expenses already incurred. Delaware is likely going to give it to him. The company wanted the Seventh Circuit in Chicago to issue an injunction stopping that legal proceeding. The Seventh Circuit, per Judge Posner, said "no, we're not going to enjoin that action. That's a proper forum, the court has jurisdiction over the parties and the subject matter, and Mr. Citrin did not have to bring that action in the federal district court where the CFAA case is pending. It is not a compulsory counterclaim."

The interesting part of the decision is the ramification of the employment contract. The company sues their former executive for alleged misconduct involving a company laptop, he gets some mighty thorough (read: expensive) attorneys to represent him, and they have to foot the bill until a decision comes out one way or the other. We bet this doesn't sit well with the company's Board. We will await the outcome of the CFAA claim and report back.
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