By Ronald G. London In a 9-2 reversal of an earlier appellate decision by a 3-judge panel, the U.S. Court of Appeals for the 9th Circuit issued an en banc ruling in U.S. v. Nosal, holding that the prohibition in the federal Computer Fraud and Abuse Act (“CFAA”) on exceeding authorized access to a computer covers only the scope of access allowed, not the subsequent use of any information obtained.  In doing so, the court rejected a broader reading the government advocated, which the en banc majority held “would transform the CFAA from an anti-hacking statute into an expansive misappropriation statute.”  The court’s decision, authored by Judge Kozinski, explains that this narrow construction is preferable because it prevents CFAA liability for, for example, employees using their work computers in violation of their employers’ acceptable use polices, and/or web-surfers using a website in ways that may violate its terms of use/service, which the court noted few ever read, and even fewer understand in enough detail to avoid unwitting liability. The CFAA is primarily a criminal statute intended to deter computer hackers, though it permits civil actions by private parties damaged as a result of a violations (assuming they incur sufficient injury).  It generally prohibits intentionally or knowingly accessing a computer without authorization or exceeding authorized access in a variety of contexts, including those involving government computers, attempts to defraud to obtain something of value, and/or causing damage or loss to the computer or its data. The case against Nosal involved his former employment at an executive search firm where, after he left, he convinced some former colleagues still at the company to help him start a competing business, including by accessing and providing Nosal information from a confidential database at the firm.  While these cohorts were authorized to access their employer’s database generally, it had a policy barring disclosure of confidential information, leading to CFAA charges against Nosal for aiding and abetting the former colleagues in “exceeding authorized access” to the search firm’s computer. The question thus became whether the CFAA’s “exceeds authorized access” language refers (as Nosal argued) to someone who has been authorized to access only certain data or files but accesses other, unauthorized data or files – what is colloquially known as “hacking” – or (as the government argued) someone who has unrestricted physical access to data or files, but is limited in the use to which he can put them.  After the trial court ultimately answered this question in Nosal’s favor, while the 3-judge appellate panel ruled for the government, on rehearing en banc, the 9th Circuit adopted the narrower interpretation, and affirmed dismissal of the CFAA charges. The en banc decision started with the statutory definition of “exceeds authorized access,” which the CFAA defines as “to access a computer with authorization and use such access to obtain or alter information [to which] the accesser is not entitled.”  Noting that it is more sensible to read “entitled” as a synonym for “authorized,” the court determined that “exceeds authorized access” must refer to data or files on a computer that one is not authorized to access, rather than any later use to which they are put.  This is consistent, the court held, with the fact that Congress enacted the CFAA primarily to address computer hacking, while the broad interpretation favored by the government would vastly expand its scope to criminalize any unauthorized use of information obtained from a computer.  As the court went on to explain:

This would make criminals of large groups of people who would have little reason to suspect they are committing a federal crime. While ignorance of the law is no excuse, we can properly be skeptical as to whether Congress, in 1984, meant to criminalize conduct beyond that which is inherently wrongful, such as breaking into a computer.

Rather, the en banc decision stated, “If Congress wants to incorporate misappropriation liability into the CFAA, it must speak more clearly.”  The court bolstered its determination by noting it also is supported by the rule that courts will “construe a statute as displacing a substantial portion of the common law only where Congress has clearly indicated its intent to do so.” Thus, because Nosal's accomplices had permission to access the company database and obtain the information within, the CFAA charges failed to meet the “without authorization, or exceeds authorized access” element and were properly dismissed.  However, the en banc decision held, significantly, that its construction of “exceeds authorized access” would apply to all uses of that term in the statute, noting that the phrase appears five times in the first seven subsections.  In doing so, it rejected the government’s suggestion that the interpretation would apply only to the provision Nosal was charged with violating, which involved knowingly accessing a computer in excess of authorization with intent to defraud and thereby furthering the fraud and obtaining something of value. The court also noted that its decision departed from broader interpretations of “exceeds authorized access” adopted by the Fifth, Seventh, and Eleventh Circuits, which the en banc Ninth Circuit urged to reconsider their approach.  This split among the Circuits makes it more likely that the Supreme Court would agree to review the Nosal decision, making it an important case to watch as the time for the government to seek such review begins to wind down.