A recent case from the U.S. Court of Appeals for the Fourth Circuit, Van Alstynes v. Electronic Scriptorium Ltd., held that an employer who accessed a former employee’s personal e-mail account could be held liable for punitive damages and attorneys’ fees under the federal Stored Communications Act (SCA), even without proof of actual damages.
After Electronic Scriptorium was sued by its former Vice President of Marketing, the company’s president, Edward Leonard, gained access to her personal AOL e-mail account and over the course of a year, downloaded in excess of 250 e-mails. The former employee, Van Alstynes, learned of this access in response to discovery requests. She also discovered that Mr. Leonard had accessed the account at all hours of the day, and from home, work, and places as far away as London and Hong Kong. She sued the company and Mr. Leonard for violating the SCA. The SCA criminalizes unauthorized access to “electronic communications” in “electronic storage” at an “electronic communications service.” The SCA authorizes a private cause of action for monetary damages, namely, actual damages, punitive damages, and attorneys’ fees. The SCA states that “in no case shall a person be entitled to recover [actual damages] less than the sum of $1,000.”
The defendants attempted to dismiss the claim on the basis that Mr. Leonard’s actions had not caused any damages. The district court rejected this argument, and the jury returned a verdict against the company for $25,000 in compensatory damages and $25,000 in punitive damages, and $150,000 in compensatory damages and $75,000 in punitive damages against Mr. Leonard. The compensatory damages represented statutory damages of $1,000 each for each SCA violation. The court also awarded over $135,000 in attorneys’ fees and court costs against the defendants, for a total award of over $400,000. The defendants appealed to the Fourth Circuit.
The Fourth Circuit upheld the decision but disagreed with the damages calculations. Interestingly, unlike the three federal district courts that previously considered the issue, the Fourth Circuit held that statutory damages of $1,000 per violation are not available in the absence of actual damages. The appellate court did find that punitive damages and attorneys’ fees can be awarded in the absence of actual damages, but vacated the awards for those and remanded this case to the district court.