Blog

S.D.N.Y. Affirms Order To Microsoft To Hand Over Data Stored Overseas Pursuant To A Stored Communications Act Warrant

Author: Scripta Ad Astra Staff

On Thursday, July 31, 2014, Microsoft lost a challenge to an April 25, 2014 order denying its motion to quash a subpoena issued by the federal government pursuant to the Stored Communications Act (“SCA”) for email communications located on Microsoft servers in the Ireland.  Issuing her ruling from the bench, U.S. District Judge Loretta Preska stated that “Congress intended in this statute for ISPs to produce information under their control, albeit stored abroad, to law enforcement in the United States … As [Magistrate Judge James Francis IV] found, it is a question of control, not a question of the location of that information.”

Luckily for Microsoft, Judge Preska stayed the implementation of her ruling so that Microsoft could appeal to the Second Circuit.  While we wait for that to occur, it might be worthwhile to go back and examine what Judge Francis’ April 25, 2014 Order said.

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Congressman Darrell Issa Not Happy With The Federal Trade Commission Taking Action Against LabMD For Data Security Breaches

Author: Scripta Ad Astra Staff

On Thursday, July 24, 2014, Congressman Darrell Issa (R- CA 49), Chairman of the House Oversight Committee, held a hearing on the Federal Trade Commission’s prosecution of LabMD for alleged data security breaches leading to the release of its customer’s personal data.  Needless to say, Congressman Issa was not happy with the FTC.

Background of FTC v. LabMD
On August 28, 2013, the FTC filed an administrative complaint against LabMD alleging a variety of data security breaches that lead to the release of consumer information.  LabMD conducts clinical laboratory tests on specimen samples from consumers and reporting test results to consumers’ health care providers. 
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NSF Funds New UCLA Cybersecurity Research Center and Other News

Author: Scripta Ad Astra Staff

NSF Funds New UCLA Cybersecurity Research Center
In news not necessarily related to the law, UCLA just announced that it is starting a cybersecurity research center, thanks to a grant by the National Science Foundation.  The Center for Encrypted Functionalities opened on Thursday, July 31, 2014, and is funded by a five-year, $5 million grant from theNSF’s Secure and Trustworthy Cyberspace program. The center is a collaboration among researchers at UCLA, Stanford University, Columbia University, the University of Texas at Austin and Johns Hopkins University.  As a proud alumnus, I am happy to hear that UCLA is taking a leading role in developing cybersecurity solutions.

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2014 ABC Desk Guide

The Insolvency Law Standing Committee of the Business Law Section of the State Bar of California recently published the “2014 ABC Desk Guide,” coauthored by Anne Smiddy of Ad Astra Law Group LLP.  Ms. Smiddy co-authored the Desk Guide with Patrick Costello, Esq. of Vectis Law Group, Diana Donabedian Herman, Esq. of McKenna, Long, Aldridge LLP, and Justin E. Rawlins, Esq. of Winston & Strawn LLP, with Peter C. Califano, Esq. of Cooper, White & Cooper as editor.  The Desk Guide provides a convenient compilation and outline of the relevant state and federal statutes and cases affecting the operation of assignments for the benefit of creditors under California law.  The practice guide is available for purchase from the State Bar of California.

Ad Astra Law Group, LLP

Opinion Roundup: California District Courts and the Computer Fraud and Abuse Act – January 2014 through June 2014 – Part Three

Author: Scripta Ad Astra Staff

This is the third part of three part-series on federal district court opinions in California regarding the CFAA.  The first part of this series can be found here.  The second part of this series can be found here.

Overall, California district courts have regularly followed the holdings in Nosaland Brekka regarding “use” versus “access.”  In summary, courts in the Ninth Circuit have generally held that the CFAA does not prohibit misusing information, such as in a trade secrets misappropriation violation: if you are allowed to access information, what you do with that information is not a violation of the CFAA, even if it is contrary to the interests of your employer.  On the other hand, if were not allowed to access information – say you quit or were fired – then a CFAA claim could likely withstand Ninth Circuit scrutiny.

It will be interesting to see how the courts make their decisions, especially as the divide between employment-based CFAA claims (“inside hacker” claims) and non-employment-based (external “hacker” claims) become more prevalent. Of course, you can always come back to Scripta Ad Astra to read about the latest CFAA, computer crimes, and cyber security developments.

NetApp, Inc. v. Nimble Storage, 2014 U.S. Dist. LEXIS 65818 (N.D. Cal. May 12, 2014)
Judge: Lucy H. Koh, United States District Judge.

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Opinion Roundup: California District Courts and the Computer Fraud and Abuse Act – January 2014 through June 2014 – Part Two

Author: Scripta Ad Astra Staff

This is part two of a three-part series on federal district court opinions in California related to the CFAA.  The first part can be found here.  The third part will be posted on Friday, July 25, 2014.  Stay tuned and check it out.

Enki Corp. v. Freedman, 2014 U.S. Dist. LEXIS 9169 (N.D. Cal. Jan. 23, 2014)
Judge: Paul S. Grewal, United States Magistrate Judge.

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Back to School Special on Estate Plans

Author: Katy M. Young

As summer comes to an end and we all go back to school in one form or another, it is time to revisit the good old to-do list. Is an estate plan on your to-do list? If you are a business owner, an estate plan that addresses business succession is critically important. If you own a home, the only way to avoid probate is by creating a trust. If you have children, an estate plan is the only way to ensure your control over who becomes your child’s guardian should anything happen to you. Ad Astra Law Group, LLP is offering a back to school special on estate plans completed in August and September 2014.

What is an estate plan? Ad Astra Law Group, LLP offers a comprehensive estate plan package that will protect you, your loved ones, and your assets should tragedy strike. We’ll prepare a trust and a will to address what happens when you pass away. We also create advance health care directives and powers of attorney to protect you in case you become incapacitated. Our lawyers will educate you about the process, guide you through tough decisions, and perform a signing ceremony with a notary to complete the estate plan package. The whole process takes about a month from start to finish.

The attorney fees for probate cases are set by law and are quite high, plus the probate process can take as long as a year or more. For most people, we can create a comprehensive estate plan for about 1/3 of the minimum probate attorney fee and save you the hassle of dealing with probate while grieving. For estate plans completed in August and September 2014, we are offering a 20% discount. Creating your estate plan will bring you peace of mind and it is a great investment in your family’s future. Contact us today to discuss your estate planning needs!

Opinion Roundup: California District Courts and the Computer Fraud and Abuse Act – January 2014 through June 2014 – Part One

Author: Scripta Ad Astra Staff

This week, we will have a three-part series on all of the substantive district court opinions in California regarding the Computer Fraud and Abuse Act (“CFAA”) (18 § U.S.C. 1030) for the first part of 2014 – January through June. We are concentrating on California because that is where most of the Ninth Circuit opinions are generated – not surprising given that Silicon Valley and many technology firms are located in California and within the Ninth Circuit’s jurisdiction.

The CFAA is important to businesses small and large because it provides them the opportunity to seek recourse for unauthorized access to data and information they store and protect on their internal servers or on the cloud.  CFAA violations address outside computer “hackers” as they are commonly perceived in the media, but also “inside” hackers: former employees or business partners that have found ways to access information from their former business associates which they are no longer supposed to view.  The CFAA does not address how information is used once it is acquired, but only covers the initial access of information that one has no authority to view or exceeded his or her authority in so viewing.

Over the next week – Monday, Wednesday, and Friday – we will provide a roundup of the first six months of published California federal opinions regarding the CFAA.

Oracle Am., Inc. v. TERiX Computer Co., 2014 U.S. Dist. LEXIS 561 (N.D. Cal. Jan. 3, 2014)
Judge: Paul S. Grewal, United States Magistrate Judge

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Demurrers to Answers: Changing the Practice of Drafting Defenses

Author: Scripta Ad Astra Staff

Usually, when answering an unverified complaint in California Superior Court, counsel for the defendant will file a general denial, along with a laundry list of “boilerplate” affirmative defenses that might apply to the plaintiff’s claims.  More often than not, the defendant’s answer will fail to include any specific facts supporting those defenses.

At first blush, this common practice may appear to be the result of sloppy or lazy work.  However, vagueness in the defendant’s answer is often a result of the fact that most defendants do not have the ability to prove their defenses at the initial answering phase, usually well-before conducting any discovery.  In addition, the defendant has significant incentive to be over-inclusive when it comes to affirmative defenses, as a party waives un-pled defenses.  An argument can be made that requiring specific facts at the preliminary answering phase of the proceeding may result in significant prejudice and a miscarriage of justice to the defendant who is unable to specifically plead all of its potential affirmative defenses.

On the other hand, the defendant’s inclusion of copious amounts of affirmative defenses that are not likely to ever be used in the case may be so excessive it borders on abuse.  More and more plaintiffs’ attorneys are bringing demurrers to the affirmative defenses in answers.  These demurrers are based upon the respective defendant’s failure to state facts sufficient to constitute a defense pursuant to the requirements of California Code of Civil Procedure Section 430.20.

Many practitioners on both sides do not realize that the affirmative defenses stated in the answer must aver facts as carefully and with as much detail as the facts which constitute the cause of action alleged in the complaint: the defendant is required to plead ultimate facts, rather than evidentiary matters or legal conclusions.  See Doe v. City of Los Angeles, (2007) 42 Cal. 4th 531, 550, and FPI Development Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 384.  However, even where a defense is defectively pled, it may be allowed if the defendant’s pleading gives sufficient notice to enable the plaintiff to prepare to meet the defense, in part because un-pled defenses are waived.  See Harris v. City of Santa Monica (2013) 56 Cal. 4th 203, 240.

When the defendant has filed a factually unsupported answer, there is a strong probability that a judge will sustain the plaintiffs’ demurrer to the answer, but will simultaneously grant the defendant leave to amend.  Therefore, it is best practice to determine whether the demurrer is necessary.   The plaintiff’s attorney should ask whether the motion will ultimately save costs on discovery by eliminating meritless affirmative defenses at the outset, or whether it is going to burn attorney’s fees with little benefit to the client.  In cases with a “burning limits” insurance policy or with a defendant with limited funds, creating more work for your opponent ultimately reduces the funds available for settlement.  Expedient trial scheduling may also be adversely affected by a demurer to the answer.  Many courts have a considerable backlog for dates to hear demurrers, and, as result, the demurrer may still be pending at the time of the initial case management conference. When that happens, because the case is not at issue, the likelihood of obtaining the earliest-possible trial date is slim to none.  The defendant’s attorney faced with a demurrer to the answer must determine whether it is cost-effective to oppose a motion that will likely be granted, or to offer to amend the answer.  Although unlikely, a court could potentially sustain the demurrer as to some or all of the affirmative defenses without leave to amend.

The answering defendant is in the position of avoiding the situation altogether by being more careful in drafting affirmative defenses.  However, if there is a dispute as to the factual sufficiency of affirmative defenses in an answer, the most expedient solution is to simply attempt to informally resolve the dispute by meeting and conferring with opposing counsel to discuss the defenses.  If possible, the parties should agree to amend the answer to remove unnecessary affirmative defenses and include some facts within the defendant’s knowledge to give notice of the bases for the meritorious defenses.
If the parties can be reasonable and informally resolve their dispute, they will: (1) avoid unnecessary attorneys’ fees (which the clients will appreciate), (2) advance the case beyond the pleading phase (which the attorneys should appreciate), and (3) prevent excessive motion practice in the already-over-burdened courts (which the judge will appreciate).

Federal Judge Holds California’s Death Penalty Unconstitutional

Author: Wendy Hillger

The Honorable Cormac J. Carney ruled on July 16, 2014 that the death penalty system in California is unconstitutional.  In a 29-page opinion, Judge Carney noted the system in California serves no penological purpose because of the extended period of time it takes to enforce it.  Most Death Row inmates die of natural causes rather than at the hands of the state.  There are nearly 750 inmates currently on Death Row, including San Quentin’s Ernest Dewayne Jones, the petitioner in this case.  Given the problems with lethal injections, executions have been halted in California since January 2006.

The case at present only gives a reprieve to inmate Jones, but an appeal to the Ninth Circuit Court of Appeals by the Attorney General Kamala Harris is under review.  A statewide order could come from the Ninth Circuit, and then the case could make its way to the United States Supreme Court.  The death penalty was ruled unconstitutional in 1972 by the U.S. Supreme Court, but the Court later reinstated capital punishment nationwide four years later.  Thereafter, the voters of California have instituted capital punishment three times.

If affirmed, Judge Carney’s ruling could end capital punishment in the state (temporarily if not permanently).  Inmates on California’s Death Row, including Polly Klaas’ and Laci Peterson’s killers as well as other notorious serial killers, could see their penalties commuted to life in prison sentences.

We do not take a position on capital punishment.  However, we do note that appeals in civil lawsuits take over 12 months to adjudicate.  All appeals in death penalty cases are automatically presented to the California Supreme Court.  The Supreme Court, like other courts, are struggling to keep up with the pace of cases filed.  It is axiomatic that removing the need to review prisoner death penalty appeals would speed up all other appeals.

The United States District Court for the Central District of California opinion can be found here.