Pulte Homes, Inc. v. Laborers' International Union

The Federal Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, is a statute that both criminalizes certain computer-fraud crimes and creates a civil cause of action.^[1] Enacted in 1986, the CFAA makes it a crime to "knowingly cause the transmission of a program, information, code, or command, and as a result of that conduct, intentionally cause damage without authorization, to a protected computer."^[2] Under the CFAA, "any impairment to the integrity or availability of data, a program, a system, or information" qualifies as "damage."^[3]

Summarize Fact Check

In September 2009, Pulte, a home building company, fired a construction crew member for what they claimed was misconduct and poor performance.^[1] Soon afterward, the Laborers' International Union of North America (LIUNA) initiated a national campaign against Pulte in order to damage its reputation because they thought union membership was the company's real reason.^[1] The union's tactics included bombarding Pulte's sales offices and three of its executives with thousands of phone calls and emails.^[1] Most of the communications concerned the company's purported unfair labor practices, though some included threats and obscene language.^[1] The volume of calls overloaded Pulte's system, interfering with employees' normal communications with customers and vendors and generally stalling normal business operations.^[1]

Pulte filed suit, alleging violations of the CFAA. The district court denied the motion, holding that Pulte failed to show that LIUNA intentionally caused damage to Pulte's phone and computer systems.^[1] Pulte appealed.

The Sixth Circuit held that Pulte had successfully stated a "transmission" claim. A transmission claim requires a showing that the defendant intentionally caused damage.^[4] The court stated that "a transmission that weakens a sound computer system—or, similarly, one that diminishes a plaintiff's ability to use data or a system—causes damage."^[1] It reasoned that LIUNA's barrage of calls and emails diminished Pulte's ability to use its systems and data because they prevented Pulte from sending and receiving at least some emails and calls.^[1]

The court further held that Pulte met its burden in showing that LIUNA acted with the intent to cause damage, holding that the district court had set too high of a standard as to this element.^[1] LIUNA did not need to know the actual consequences of its actions, the court reasoned; the sheer volume of calls and LIUNA's call to "fight back" indicated that the union intended to cause some harm to Pulte.^[1]

The Sixth Circuit agreed with the lower court that Pulte failed to allege an "access" claim. To state an access claim, a plaintiff must show that the defendant "intentionally accesse[d] a protected computer without authorization."^[5] A person acting "without authorization" has "no rights, limited or otherwise, to access the computer in question."^[1] The court reasoned that Pulte's phone and email systems were open to the public, so LIUNA was authorized to use them. Because Pulte did not allege that LIUNA possessed no right to contact Pulte's offices and its executives, it failed to satisfy this element of its claim.^[1]