Judge: Mark A. Young, Case: 21SMCV01472, Date: 2023-08-22 Tentative Ruling
Case Number: 21SMCV01472 Hearing Date: February 9, 2024 Dept: M
CASE NAME: Strategic
Legal Practices APC v. Consumer Law Experts PC, et al.
CASE NO.: 21SMCV01472
MOTION: Demurrer
to the Third Amended Complaint
HEARING DATE: 2/9/2024
Legal
Standard
A
demurrer for sufficiency tests whether the complaint states a cause of action.
(Hahn v. Mirda (2007)
147 Cal.App.4th 740, 747.) When considering demurrers, courts read the
allegations liberally and in context. In a demurrer proceeding, the defects
must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (CCP §§
430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate
facts sufficient to apprise the defendant of the factual basis for the claim
against him. (Semole v. Sansoucie
(1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit
contentions, deductions or conclusions of fact or law alleged in the pleading,
or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen
(1964) 226 Cal.App.2d 725, 732, internal citations omitted.)
A
special demurrer for uncertainty is disfavored and will only be sustained where
the pleading is so bad that defendant cannot reasonably respond—i.e., cannot
reasonably determine what issues must be admitted or denied, or what counts or
claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s
of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if
the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Ibid.)
“Liberality in permitting amendment
is the rule, if a fair opportunity to correct any defect has not been given.” (Angie
M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of
discretion for the court to deny leave to amend where there is any reasonable
possibility that plaintiff can state a good cause of action. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to
show in what manner plaintiff can amend the complaint,
and how that amendment will change the legal effect of the
pleading. (Id.)
Analysis
Defendant Beck demurs to the Third Amended Complaint’s (TAC) fourth cause
of action for a violation of Penal Code § 502. Defendant Beck argues that he was
authorized to access the data in the course and scope of his employment and did
not have to bypass or circumvent security and penetrate levels of software.
Penal Code section 502 states, in relevant part:
(a) It is the intent of the
Legislature in enacting this section to expand the degree of protection
afforded to individuals, businesses, and governmental agencies from tampering,
interference, damage, and unauthorized access to lawfully created
computer data and computer systems. The Legislature finds and declares that the
proliferation of computer technology has resulted in a concomitant
proliferation of computer crime and other forms of unauthorized access
to computers, computer systems, and computer data…
(b)
For the purposes of this section, the following terms have the following
meanings:
(1) “Access”
means to gain entry to, instruct, cause input to, cause output from, cause data
processing with, or communicate with, the logical, arithmetical, or memory
function resources of a computer, computer system, or computer network.
[…]
(10) “Injury”
means any alteration, deletion, damage, or destruction of a computer system,
computer network, computer program, or data caused by the access, or the denial
of access to legitimate users of a computer system, network, or program.
(c) Except as provided in
subdivision (h), any person who commits any of the following acts is guilty of
a public offense:
[…]
(2) Knowingly accesses and
without permission takes, copies, or makes use of any data from a computer,
computer system, or computer network, or takes or copies any supporting
documentation, whether existing or residing internal or external to a computer,
computer system, or computer network.
[…]
(e)(1) In addition to any other
civil remedy available, the owner or lessee of the computer, computer system,
computer network, computer program, or data who suffers damage or loss by
reason of a violation of any of the provisions of subdivision (c) may bring a
civil action against the violator for compensatory damages and injunctive
relief or other equitable relief.
[…]
(h) Subdivision (c) does not apply to punish any
acts which are committed by a person within the scope of lawful employment. For
purposes of this section, a person acts within the scope of employment when the person performs acts which are reasonably
necessary to the performance of their work
assignment.
(2) Paragraph (3) of subdivision (c) does not
apply to penalize any acts committed by a person acting outside of their lawful employment, provided that the
employee's activities do not cause an injury, to the employer or another, or
provided that the value of supplies or computer services which are used does
not exceed an accumulated total of two hundred fifty dollars ($250).
(Emphasis added.)
Beck allegedly accessed SLP’s
computer system for the unauthorized purpose of downloading thousands of SLP
documents from hundreds of its client case files, including training materials
[and] other documents, which he copied to a Google drive, his personal computer
and other repositories and shared with CLE and Anvar. (TAC ¶¶ 5, 21-23.) Plaintiff
alleges that Beck breached the Beck Agreement by downloading SLP’s Proprietary
Information and Documents without authorization from the SLP computer system to
his Google drive, personal computer and other repositories during his
employment and after leaving SLP until 9:00 on his last day of employment, and
that he did so for an unauthorized purpose – namely, sharing them with CLE, using
them at CLE, and engaging in activities and to compete with SLP using these
materials. (TAC ¶¶ 37-40.) Plaintiff claims that Beck violated section 502 by knowingly
accessing and without permission copying and making use of data from
Plaintiff’s computer system, and diverting that data to himself and third
parties. (TAC ¶¶ 58-61.) These allegations mirrors Penal Code section 502(c)(2)’s
language.
One issue is whether Beck’s conduct
violated section 502(c), or whether the exemption in section 502(h) applies to
Beck’s access and copying of SLP’s data. Plaintiff alleges that Beck accessed
and copied the data outside the scope of his employment with Plaintiff. The Second
District discussed this exemption in the case of Chrisman v. City of Los
Angeles as follows:
Broadly speaking, subdivision (h)
has two subparts that under certain conditions prohibit criminally punishing an
employee who misuses an employer's computer. The first subpart applies to an
employee's computer misuse within the scope of his employment. It states:
“Subdivision (c) [the punishment
provision on which respondents rely] does not apply to punish any acts which
are committed by a person within the scope of his or her lawful employment. For
purposes of this section, a person acts within the scope of his or her
employment when he or she performs acts which are reasonably necessary to the
performance of his or her work assignment.” (§ 502, subd. (h)(1).)
It is undisputed that appellant was
on duty when he misused department computers. Respondents argue appellant was
not, however, acting within the scope of his employment because he had no
legitimate job-related reason for his computer inquiries. But
respondents define “scope of employment” too narrowly. They suggest it
covers only legitimate job-related conduct, rendering acts that violated
department rules outside the scope of employment. Generally speaking, however,
showing that an employee violated an employer's rules does not determine
whether the employee acted within the scope of employment . . ..
(Chrisman v. City of Los
Angeles (2007) 155 Cal. App. 4th 29, 36.) After reviewing “scope of
employment” caselaw, the Chrisman court concluded that “an employer's disapproval of an employee's conduct does not cast the
conduct outside the scope of employment. If the employer's disapproval were the
measure, then virtually any misstep, mistake, or misconduct by an employee
involving an employer's computer would, by respondents' reasoning, be
criminal.” (Id. at 37; citing Mary M. v. City of Los Angeles
(1991) 54 Cal.3d 202 [Supreme Court held that a police officer in uniform and
driving a marked police car was acting within the scope of his employment when
he pulled over a drunken driver but instead of arresting her, took her home and
raped her]; Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962
[child was hurt riding alongside his uncle in uncle’s employer’s tractor in
violation of employer’s rules; uncle still found to be within the scope of
employment because he was working for his employer while operating the
tractor]; Mahru v. Superior Court (1987) 191 Cal.App.3d 545 [defendant-employee
found exempt under former version of section 502 where employee retaliated out
of spite against a customer of his employer by altering a computer's software
to prevent the customer from using the employer's computer].)
Here, Beck’s access was not within
the scope of his employment even as broadly defined by caselaw. Beck’s access
and copying of such data was not reasonably necessary for Beck to perform
his work assignments as an attorney at Plaintiff’s firm, but rather for the purpose
of establishing a competing law firm. (TAC ¶¶ 3, 11.)
Plaintiff must
also plead an injury. Notably, subdivision (h)(2) provides an exemption to subdivision
(c)(3) for “any acts committed by a person acting outside of his or her lawful
employment, provided that the employee's activities do not cause an injury”
defined by the statute. An injury in this context does not mean any form of damage,
but “any alteration, deletion, damage, or destruction of a computer
system, computer network, computer program, or data caused by the access, or
the denial of access to legitimate users of a computer system, network, or
program.” (Pen. Code § 502(b)(10).) Here,
however, Plaintiff has brought this action under subdivision (c)(2), and
therefore, the limitations set forth above would not apply.
Furthermore, subdivision (e)(1) permits
“any other civil remedy available . . . who suffers damage or loss by reason of
a violation of any of the provisions of subdivision (c) may bring a civil
action . . . for compensatory damages and injunctive relief or other equitable
relief.” The limitations on damages urged
by Defendant are not supported by a plain reading of the statute. Here, Plaintiff has properly alleged damages
under the statute.
Accordingly, the demurrer is OVERRULED. Defendant to file an answer within 20 days.