Although the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030, has been alive and well for 25 years, Courts have varied in their approach on determining valuation under this statute. Under the CFAA, valuation plays a pivotal role in determining whether the crime will be treated as a misdemeanor or felony, the appropriate Sentencing Guidelines Range, and the amount of restitution.
In United States v. Batti, 2011 WL 111745, (6th Cir., Jan 14, 2011), the Defendant was charged with violating the CFAA and particularly with improperly accessing information from a protected computer, in violation of 18 U.S.C. § 1030(a)(2)(C) and (c)(2)(B)(iii). Batti appealed the trial court's finding that the value of the information that he obtained exceeded $5,000 and the district court's order of $47,565 in restitution. The Sixth Circuit determined that the trial court properly used the "value of production" in determining the value of the information that Batti illegally took, and the Court further decided that the trial court did not abuse its discretion in ordering restitution in the amount of $47,565.
18 U.S.C. § 1030(a)(2)(C) sets out the prohibited conduct as follows:
(a) Whoever ... (2) intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains ... (C) information from any protected computer ... shall be punished as provided in subsection (c) of this section.
Per the indictment, the prosecution sought a felony conviction by alleging, pursuant to subsection (B)(iii) of the CFAA, that Batti "obtained information valued in excess of $5,000.00." The only portion of this charge that Batti challenged in the court below was whether the value of the information that he obtained exceeded $5,000. The appellate court ultimately agreed with the trial court's valuation for both sentencing and restitution purposes.
Batti first argued that since he did not damage the stolen information, the "value of the information obtained" could not have exceeded $5,000. The Sixth Circuit echoed the view of the trial court by stating, "There simply is no requirement under the pertinent subsections of § 1030 that Defendant's unauthorized access must have led to any sort of loss, that the value of the information must have been diminished as a result of his conduct, or that he somehow must have profited from his actions. Rather, the trier of fact-in this case, the Court-is called upon only to determine the value of the information through some appropriate means."
Batti also argued that there was no "market value" to the information that was stolen, and accordingly, the court could not assess a value to the information. Again, the Sixth Circuit rejected this argument by stating, "We believe there is also no merit in this argument, because, as we explain below, although there may be no readily ascertainable market value for the video footage that Batti obtained, the cost of production of that footage was a permissible basis on which the district court could rely in determining whether the value of the information obtained exceeded $5,000."
The Sixth Circuit Court of Appeals concluded:
...where information obtained by a violation of § 1030(c)(2)(B)(iii) does not have a readily ascertainable market value, it is reasonable to use the cost of production as a means to determine the value of the information obtained. The district court here believed that the amount Campbell-Ewald paid for the "spots" or video footage that Batti later obtained could be viewed as the footage's market value, but the district court also recognized that footage of this type is not sold on a typical retail market. As a result, the district court believed that the amount that Campbell-Ewald paid for the footage could also be viewed as the cost of production for the development of advertisements or commercials. We see no error in this approach.
The Court acknowledged that the "value of production" method is not the only way to calculate value under the CFAA, and in fact, other circuits have not agreed with the analysis used by the Sixth Circuit. However, computer fraud attorneys in the Sixth Circuit should be aware of the implications of this ruling on a client's sentencing and restitution amounts.