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International Chauffeured v. Fast Operating Corp

April 16, 2012

INTERNATIONAL CHAUFFEURED SERVICE, INC., PLAINTIFF,
v.
FAST OPERATING CORP., D/B/A CARMEL CAR & LIMOUSINE SERVICE, AND JOHN DOES 1-100, DEFENDANTS.



The opinion of the court was delivered by: Naomi Reice Buchwald United States District Judge

MEMORANDUM AND ORDER

Plaintiff International Chauffeured Service, Inc. brings this lawsuit against defendants Faster Operating Corp., d/b/a Carmel Car & Limousine Service ("Carmel"), and John Does 1-100, alleging a violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(g) (the "CFAA"), and asserting state common law claims of misappropriation of trade secrets and unfair competition. Presently before us is Carmel's motion to dismiss the complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

For the reasons set forth herein, Carmel's motion is granted.

BACKGROUND*fn1

Plaintiff is a corporation organized under the laws of Delaware, with its principal place of business in New York. Since 1999, it has been operating a global chauffeured car service, matching passengers with drivers upon request. In offering this service, plaintiff relies upon a proprietary database -- created over a period of more than ten years --containing potential pick-up and drop-off locations, as well as the pricing information for the numerous possible permutations of the two.

Carmel is a New York corporation, with its principal place of business also in New York. Carmel had been operating its own chauffeured car service in New York, New Jersey, and Connecticut, when it approached plaintiff in late 2007 or early 2008 about purchasing plaintiff's business. Carmel subsequently decided not to pursue the transaction but expanded its operations nationwide in 2009. Like plaintiff, Carmel also utilizes a database of pick-up and drop-off locations and prices.

Plaintiff alleges that Carmel's database is a "carbon copy" of its own, containing "typos, abbreviations, and colloquial references to geographical locations," as well as pricing information, identical to those found in plaintiff's database.*fn2

(FAC ¶ 12.) Plaintiff infers from the identity of the two databases that Carmel accessed plaintiff's restricted and proprietary server without authorization and copied its database, which resides on a network of three computers at plaintiff's principal place of business, though it does not allege when such access may have occurred.

Plaintiff alleges that, "[a]s a result of Carmel's unauthorized accessing" of its server, it needed "to investigate and remedy the effects of that unauthorized access." (Id. ¶ 24.) The security investigation was performed by LimoSys Software LLC ("LimoSys"), the developer of the database, between October 19 and October 21 of 2009 at a cost of $1413. Subsequently, plaintiff tasked Aaron Shmuel, one of its employees, to monitor its servers and networks "for any indications of further unauthorized access." (Aff. in Supp. of Pl.'s First Am. Compl. ("Oren Aff.") ¶ 7.) Shmuel engaged in these monitoring activities for three hours a day until June 2010, when he cut back to one hour per day. Plaintiff instructed Shmuel to discontinue the monitoring in November 2010, and it attributes "roughly" $13,900 of Shmuel's salary over the time period from November 2009 to November 2010 to that monitoring. (Id.)*fn3

Plaintiff further alleges that Carmel's misappropriation of the database has resulted in a substantial loss of plaintiff's business, which loss it values at $5,919,781.

Plaintiff brought suit on April 19, 2011, alleging a violation of the CFAA, misappropriation of trade secrets, and unfair competition, and seeking to recover the above costs.

DISCUSSION

I. Legal Standards

When deciding a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must accept as true all well-pleaded facts alleged in the complaint and draw all reasonable inferences in plaintiff's favor. See Kassner v. 2nd Ave. Delicatessen, Inc., 496 F.3d 229, 237 (2d Cir. 2007). We need not, however, accept as true mere "conclusions of law or unwarranted deductions of fact." ...


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