Suggestion in Bankruptcy

Document Sample
Suggestion in Bankruptcy Powered By Docstoc
					  Van Alstyne v. Electronic Scriptorium,
  _F.3d _, 2009 WL 692512 (March 18,          WILLIAMS, Chief Judge:
                                              *1 During Bonnie Van Alstyne's employ-
      United States Court of Appeals,         ment with Electronic Scriptorium Limited
              Fourth Circuit.                 (“ESL”), ESL's president, Edward Leonard,
                                              began accessing her personal email account.
    Bonnie VAN ALSTYNE, Plaintiff-            Van Alstyne discovered Leonard's actions,
              Appellee,                       which continued for more than a year after
                                              Van Alstyne left ESL, while litigating an
                    v.                        unrelated matter with ESL in Virginia state
                                              court. Thereafter, Van Alstyne brought suit
     ELECTRONIC SCRIPTORIUM,                  under the Stored Communications Act, 18
 LIMITED, Suggestion of Bankruptcy filed      U.S.C.A. § 2707(a) (West 2000) (“SCA”),
  August 16, 2007, Defendant-Appellant,       alleging that Leonard and ESL illegally ac-
                     and                      cessed her personal email account. Follow-
       Edward Leonard, Defendant,             ing trial, a jury awarded Van Alstyne
                     and                      $150,000 in statutory damages and $75,000
      Brett Leonard, Party in Interest.       in punitive damages against Leonard. The
  Bonnie Van Alstyne, Plaintiff-Appellee,     jury awarded an additional $25,000 in statu-
                      v.                      tory damages and $25,000 in punitive dam-
  Edward Leonard, Defendant-Appellant,        ages against ESL. The district court also
                     and                      awarded Van Alstyne $135,723.56 in attor-
Electronic Scriptorium, Limited, Suggestion   ney's fees and costs.
 of Bankruptcy filed August 16, 2007, De-
                  fendant,                    On appeal, ESL and Leonard contend that
                     and                      the district court erred in permitting the jury
      Brett Leonard, Party in Interest.       to award: (1) statutory damages of $1,000
          Nos. 07-1892, 07-1899.              per violation of the SCA; (2) punitive dam-
                                              ages; and (3) attorney's fees, without first
          Argued Dec. 4, 2008.                finding that Van Alstyne suffered actual
         Decided March 18, 2009.              damages. We agree with ESL and Leonard
                                              in part, concluding that plaintiffs pursuing
                                              claims under the SCA must prove actual
Before WILLIAMS, Chief Judge, and             damages in order to be eligible for an award
SHEDD and AGEE, Circuit Judges.               of statutory damages. We disagree, however,
                                              that this requirement holds for punitive
Vacated and remanded with instructions by     damages or attorney's fees. Accordingly, we
published opinion. Chief Judge WILLIAMS       vacate the awards in favor of Van Alstyne
wrote the opinion, in which Judge SHEDD       and remand for further proceedings.
and Judge AGEE joined.
ESL is a small data-conversion company            these exhibits were actually taken from her
owned and operated by Leonard and his             AOL account and not her company account.
wife, Brett, in Leesburg, Virginia. ESL hired     With her suspicions aroused, Van Alstyne
Van Alstyne, a friend of the Leonards, in         began pursuing the possibility that Leonard
January 2001 to serve as Vice President of        and ESL had broken into that private ac-
Marketing. ESL assigned Van Alstyne a             count. Sure enough, during a June 2006 de-
company email account, but she also used          position, Leonard admitted that he accessed
her private password-protected email ac-          Van Alstyne's AOL account after she left the
count with America On-Line (“AOL”) to             company. He further testified that the emails
conduct business from time to time.               produced during the deposition represented
                                                  the only occasions on which he had accessed
According to Van Alstyne, in October 2001,        her account. FN2
Leonard sexually propositioned her, but she
declined his advances. Shortly thereafter, in     *2 No doubt disturbed by Leonard's beha-
December, Van Alstyne and ESL agreed              vior, Van Alstyne promptly instituted an ac-
that Van Alstyne would be recategorized as        tion against Leonard in the United States
an independent contractor with the compa-         District Court for the Eastern District of
ny. In March 2002, ESL unilaterally termi-        Virginia, alleging that Leonard's actions vi-
nated Van Alstyne.                                olated the SCA-part of the Electronic Com-
                                                  munications Privacy Act (“ECPA”), 18
Van Alstyne thereafter pursued several            U.S.C.A. § 2510, et seq. (West 2000)-and
claims for relief against ESL: (1) a sexual       the Virginia Computer Crimes Act, Va.Code
harassment charge with the Equal Employ-          Ann. §§ 18.2-152.1, et seq. (2004). Van Als-
ment Opportunity Commission (“EEOC”);             tyne requested compensatory and punitive
(2) a claim for unemployment benefits with        damages under the SCA, contending that
the Virginia Employment Commission                Leonard's actions caused her “actual damag-
(“VEC”); and (3) a claim for unpaid com-          es,” or, in the alternative, that she was “en-
missions in Virginia state court. Van Als-        titled to an award of the statutory minimum
tyne's EEOC claim was dismissed for want          damage figure provided for by the [SCA].”
of jurisdiction because ESL employed fewer        (J.A. at 33.) Van Alstyne's claim for actual
than fifteen individuals, and she eventually      damages encompassed a claim for attorney's
nonsuited her claim for unpaid commissions.       fees and costs in defending the ESL suit and
Van Alstyne did, however, prevail on her          a claim for damages for mental anguish and
claim with the VEC.                               emotional distress arising from defending
                                                  the ESL suit.
Meanwhile, ESL instituted an action against
Van Alstyne in Virginia state court, alleging     Before Leonard responded, Van Alstyne
several business torts against her.FN1It was      filed an amended complaint adding ESL as
in the midst of discovery in that suit that the   an additional defendant. Van Alstyne filed a
seeds for the instant action were sown. Dur-      second amended complaint in March 2007,
ing a deposition in February 2006, ESL's          removing her claims of mental anguish and
counsel used several emails from Van Als-         emotional distress in order to “maintain a
tyne as exhibits. Van Alstyne believed that       modicum of privacy and avoid further inva-
sion of it through discovery.”(J.A. at 126).     the district court entered its final judgment,
After Leonard and ESL filed a motion to          which also awarded Van Alstyne
compel evidence of Van Alstyne's “actual         $124,763.38 in attorney's fees and
damages,” Van Alstyne amended her com-           $10,960.18 in costs against Leonard and
plaint for a third time. The Third Amended       ESL, jointly and severally. Leonard and ESL
Complaint withdrew the claims under the          noted a timely appeal.
Virginia Computer Crimes Act against both
Leonard and ESL and also “withdr[e]w any         II.
claim for damages ... premised upon the
costs she incurred in defending the [ESL]        *3 [1][2][3] On appeal, Leonard and ESL
suit.”(J.A. at 22.) Van Alstyne's claim for      contend that the district court erred in per-
relief was thus limited to punitive damages      mitting the jury to award Van Alstyne statu-
and “statutory minimum damage[s]” under          tory damages, punitive damages, and attor-
the SCA. (J.A. at 27.)                           ney's fees and costs without first requiring
                                                 her to prove actual damages under the
Leonard and ESL moved for summary                SCA.FN3We review these issues de novo.
judgment, relying principally on the Su-         Henson v. Liggett Group, Inc., 61 F.3d 270,
preme Court's opinion in Doe v. Chao, 540        274 (4th Cir.1995).“When interpreting sta-
U.S. 614, 124 S.Ct. 1204, 157 L.Ed.2d 1122       tutes we start with the plain language.” U.S.
(2004), for the proposition that the SCA did     Dep't of Labor v. N.C. Growers Ass'n, 377
not provide for statutory damages absent a       F.3d 345, 350 (4th Cir.2004).“It is well es-
showing that the plaintiff suffered actual       tablished that when the statute's language is
damages. See Doe, 540 U.S. at 627 (holding       plain, the sole function of the courts-at least
that, under the Privacy Act, $1,000 mini-        where the disposition required by the text is
mum statutory damages award was available        not absurd-is to enforce it according to its
“only to plaintiffs who suffered some actual     terms.” Lamie v. U.S. Tr., 540 U.S. 526,
damages”).                                       534, 124 S.Ct. 1023, 157 L.Ed.2d 1024
                                                 (2004) (internal quotation marks omitted). In
On June 8, 2007, the district court denied the   interpreting the plain language of a statute,
motion for summary judgment, and the case        we give the terms their “ordinary, contem-
continued to a jury trial. On June 21, 2007,     porary, common meaning, absent an indica-
the jury returned a verdict in favor of Van      tion Congress intended [it] to bear some dif-
Alstyne against Leonard in the amount of         ferent import.” North Carolina v. Tenn. Val-
$150,000 in compensatory damages and             ley Auth., 515 F.3d 344, 351 (4th Cir.2008)
$75,000 in punitive damages and against          (internal quotation marks omitted). We fol-
ESL in the amount of $25,000 in compensa-        low “the cardinal rule that statutory lan-
tory damages and $25,000 in punitive dam-        guage must be read in context [because] a
ages. The compensatory damages award             phrase gathers meaning from the words
represented a statutory damages award of         around it.” Gen. Dynamics Land Sys., Inc.
$1,000 for each violation of the SCA. ESL        v. Cline, 540 U.S. 581, 596, 124 S.Ct. 1236,
and Leonard filed a motion for a new trial       157 L.Ed.2d 1094 (2004) (internal quotation
and judgment as a matter of law, which the       marks omitted).
district court denied. On August 13, 2007,
III.                                               tentionally violated the Act, it would be lia-
                                                   ble for “actual damages sustained by the in-
A.                                                 dividual as a result of the refusal or failure,
                                                   but in no case shall a person entitled to re-
Section 2701 of the SCA creates a criminal         covery receive less than the sum of
offense for whoever “intentionally accesses        $1,000.”5 U.S.C.A. § 522a(g)(4)(A). Inter-
without authorization a facility through           preting this language, the Court concluded
which an electronic communication service          that by using the phrase “actual damages
is provided” or “intentionally exceeds an          sustained,” Congress “made specific provi-
authorization to access that facility,” and by     sion ... for what a victim within the limited
doing so “obtains, alters, or prevents autho-      class may recover.” 540 U.S. at 620. And,
rized access to a wire or electronic commu-        the “simplest reading” of the clause “a per-
nication while it is in electronic storage in      son entitled to recovery, ... looks back to the
such system.”18 U.S.C.A. § 2701(a)(1-2).           immediately preceding provision for reco-
                                                   vering actual damages.”Id. A contrary view,
Section 2707 provides a private cause of ac-       the Court continued, “simply pays no atten-
tion for “any ... other person aggrieved” by a     tion to the fact that the statute does not
violation of § 2701. 18 U.S.C.A. § 2707(a).        speak of liability (and consequent entitle-
Under § 2707, a district court may award           ment to recovery) in a freestanding, unquali-
equitable or declaratory relief, a reasonable      fied way, but in a limited way, by reference
attorney's fee and other costs, and “damages       to       enumerated      damages.”Id.        at
under subsection (c).” 18 U.S.C.A. §               621.Accordingly, the Doe Court concluded
2707(b). Subsection (c) provides:                  that statutory damages were available only
                                                   to plaintiffs who first proved that they suf-
The court may assess as damages in a civil         fered actual damages. Id. at 627.The Doe
action under this section the sum of the ac-       Court reached this result using a
tual damages suffered by the plaintiff and         “straightforward textual analysis.” Id. at
any profits made by the violator as a result       620.
of the violation, but in no case shall a person
entitled to recover receive less than the sum      *4 [4] Like the Privacy Act, the SCA limits
of $1,000. If the violation is willful or inten-   an award of damages to the “actual damages
tional, the court may assess punitive damag-       suffered,” as well as “any profits,” thus
es. In the case of a successful action to en-      “ma[king] specific provision ... for what a
force liability under this section, the court      victim ... may recover.”Id. Furthermore, the
may assess the costs of the action, together       SCA and Privacy Act contain the substan-
with reasonable attorney fees determined by        tively identical following phrase: “but in no
the court.                                         case shall a person entitled to recover re-
                                                   ceive less than the sum of $1,000,” which
Id. § 2707(c).                                     “looks back to the immediately preceding
                                                   provision for recovering actual damages.”Id.
In Doe, the Supreme Court reviewed the             Indeed, the only differences between the
Privacy Act, which provided that in cases in       damages provisions in the two statutes is the
which the United States had willfully or in-       SCA's use of the term “suffered” instead of
“sustained” and its use of the phrase “and        Driver's Privacy Protection Act lists, as re-
any profits made by the violator.”Neither         medies, “actual damages, but not less than
difference, it seems to us, has any material      liquidated damages in the amount of
impact. Thus, we are left to interpret statuto-   $2,500.”18 U.S.C.A. § 2724. Cf. Saunders
ry language in all important respects identic-    v. Branch Banking & Trust Co. of Va., 526
al to that already interpreted by the Supreme     F.3d 142, 149 (4th Cir.2008) (noting, under
Court. Our answer, it appears, should be ob-      Fair Credit Reporting Act, that plaintiff was
vious: just as the Privacy Act required proof     entitled to “compensatory damages or statu-
of “actual damages” as a prerequisite to re-      tory damages”).
covering statutory damages, so does the
SCA.                                              In sum, the Supreme Court has already in-
                                                  terpreted language that is substantively iden-
Buttressing this conclusion is the fact that      tical to § 2707(c) to require proof of actual
Congress, if it wished the result that Van        damages as a prerequisite to recovering sta-
Alstyne presses for, could have written a         tutory damages, and Congress has shown the
simpler, unambiguous statute. As we ex-           ability to enact statutes that clearly award
plained in interpreting the Privacy Act:          statutory damages absent proof of actual
                                                  damages. Accordingly, we hold that the
For instance, section 4 and subsection (A)        plain language of § 2707(c) unambiguously
could have been phrased in the following, or      requires proof of actual damages as a prere-
similar, terms: “the United States shall be       quisite to recovery of statutory damages.
liable to the individual in an amount equal to
the sum of (A) whichever is greater: actual       B.
damages sustained by the individual as a
result of the refusal or failure, or $1,000.”     *5 [5] Van Alstyne makes several arguments
                                                  in response, none of which we believe are
Doe v. Chao, 306 F.3d 170, 178 (4th               well-taken. First, Van Alstyne contends that
Cir.2002), aff'd Doe, 540 U.S. at 627.            the structure and legislative history of the
                                                  SCA dictate a different result, a conclusion
Congress has followed such a course in sev-       reached by the district courts to have consi-
eral enactments. The Wiretap Act, which           dered the issue. See In re Hawaiian Airlines,
like the SCA is found within the ECPA,            Inc., 355 B.R. 225, 231 (D.Haw.2006) (con-
provides:                                         cluding that “the Supreme Court's interpreta-
                                                  tion of the Privacy Act in Doe v. Chao does
In any other action under this section, the       not apply to the similar statutory language
court may assess as damages whichever is          found in the Stored Communications Act”);
the greater of ... the sum of the actual dam-     Freedman v. Town of Fairfield, No.
ages suffered by the plaintiff and any profits    3:03CV01048 (PCD), 2006 U.S. Dist.
made by the violator ... or ... statutory dam-    LEXIS 66857, at *8 (D.Conn. Sept. 19,
ages of whichever is the greater of $100 a        2006) (allowing recovery of statutory dam-
day for each day of violation or $10,000.         ages and explaining that “if Doe cited Sec-
                                                  tion 2707(c) as authority for Congress' in-
18 U.S.C.A. § 2520(c)(2). Likewise, the           tention as to damages recoverable under the
earlier enacted Privacy Act, it would have          [6][7] Van Alstyne next points us to legisla-
said so as dicta, instead of rejecting its histo-   tive history, specifically, the Senate Report
ry as not determinative”); Cedar Hill As-           that accompanied the passage of the SCA.
socs. v. Paget, No. 04 C 0557, 2005 U.S.            Of course, when statutory language is plain
Dist. LEXIS 32533, at *8-9 (N.D.Ill.Dec. 9,         and unambiguous-and we believe that the
2005) (noting the language in the Privacy           language of the SCA is-there is no need for
Act and SCA were “admittedly very simi-             recourse to legislative history. Moreover, the
lar,” but nonetheless concluding that the leg-      legislative history Van Alstyne relies on,
islative history dictated finding that statutory    which consists of a single sentence in the
damages could be awarded without proof of           Senate Report from 1986, is not as helpful
actual damages under the SCA).                      as Van Alstyne suggests and does not pro-
                                                    vide “clearly expressed legislative intention”
To that end, Van Alstyne refers back to §           in conflict with our result. Consumer Prod-
2707(a), which provides that any “person            uct Safety Comm'n v. GTE Sylvania, Inc.,
aggrieved” may “recover” from the violator.         447 U.S. 102, 108, 100 S.Ct. 2051, 64
According to Van Alstyne, this provision            L.Ed.2d 766 (1980). The Senate Report pro-
means that, in order to be a person “entitled       vides, in discussing § 2707(c), that “damag-
to recover” under § 2707(c), a plaintiff need       es under the section includ[e] the sum of ac-
only be a “person aggrieved,” not a person          tual damages suffered by the plaintiff and
who suffered actual damages. A closer look,         any profits made by the violator as the result
however, renders this argument unpersua-            of the violation as provided in (c) with min-
sive. The phrase Van Alstyne refers to pro-         imum statutory damages of $1,000.”S.Rep.
vides that an aggrieved person may “recover         No. 99-541, at 43 (1986). The mere mention
... such relief as may be appropriate.”18           of “statutory damages” in the legislative his-
U.S.C .A. § 2707(a). Subsection (b) then            tory hardly works to conclusively establish
defines appropriate relief to include prelimi-      that a plaintiff is entitled to minimum statu-
nary and other equitable or declaratory relief      tory damages absent any proof of actual
and attorney's fees and costs. § 2707(b). It        damages. The same Senate Report also ad-
also provides that appropriate relief may in-       dresses amendments to the ECPA, specifi-
clude “damages under subsection (c).” §             cally the remedies provision of the Wiretap
2707(b)(2). Thus, a person aggrieved is not         Act, 18 U.S.C.A. § 2520. In describing those
automatically a person “entitled to recover”        amendments, the Report explains,
as defined by subsection (c). Instead, a per-
son aggrieved may recover appropriate re-           *6 Proposed subsection 2520(c) provides a
lief, which encompasses damages as defined          method for the computation of damages.
and limited by subsection (c). The reference        The general rule is set out in paragraph (2)
to a person “entitled to recover” in § 2707(c)      of subsection (c).The court may assess dam-
is best read, just as in Doe, to refer back to      ages consisting of whichever is the greater
the beginning of that sentence, that is, a per-     of (A) the sum of the plaintiff's actual dam-
son who “suffered” actual damages. That             ages and any profits the violator made as a
conclusion cannot be avoided by the circular        result of the violation; or (B) statutory dam-
logic Van Alstyne proposes.                         ages of whichever is the greater of $100 a
                                                    day or $10,000.
                                                  at common law,
Id. at 27 (emphasis added).
                                                  One who commits a trespass to a chattel is
Unlike the single sentence Van Alstyne re-        subject to liability to the possessor of the
lies upon, this portion of the Senate Report      chattel if, but only if ...
clearly specifies that a court may award, in
actions under the Wiretap Act, actual dam-        (b) the chattel is impaired as to its condition,
ages or statutory damages. Such clear autho-      quality, or value, or
rization is missing from the sentence quoted
above addressing the SCA.                         (c) the possessor is deprived of the use of
                                                  the chattel for a substantial time, or
Van Alstyne next suggests that an examina-
tion of the common law roots of the SCA           (d) bodily harm is caused to the possessor,
and the Privacy Act must lead us to a con-        or harm is caused to some person or thing in
trary conclusion. In Doe, after concluding        which the possessor has a legally protected
that the statutory text of the Privacy Act did    interest.
not support the plaintiff's position, the Court
further noted that the plaintiff's argument       Restatement (Second) of Torts § 218.
was also at “odds with the traditional under-
standing that tort recovery requires not only     [8] As the comments to sections (b) and (c)
wrongful act plus causation reaching to the       explain, “[t]he interest of a possessor of a
plaintiff, but proof of some harm for which       chattel in its inviolability, unlike the similar
damages can reasonably be assessed.” Doe,         interest of a possessor of land, is not given
540 U.S. at 621.                                  legal protection by an action for nominal
                                                  damages for harmless intermeddlings with
Van Alstyne contends that unlike the Priva-       the chattel.”Restatement (Second) of Torts §
cy Act, which the Doe Court found akin to         218 cmt e. Thus, nothing in the common law
defamation or invasion of privacy, the SCA        of trespass to chattel alters “the traditional
is analogous to the common law of trespass        understanding that tort recovery requires not
and that, at common law, a trespass action        only wrongful act plus causation reaching to
did not require proof of actual damag-            the plaintiff, but proof of some harm for
es.FN4SeeRestatement (Second) of Torts §§         which damages can reasonably be assessed.”
158 and 163 (1965). In fact, according to         Doe, 540 U.S. at 621.
Van Alstyne, damages are allowed even
when a trespass actually benefits the proper-     *7 [9] Van Alstyne's final argument is that
ty owner, because “[t]he wrong for which a        the Doe Court implicitly concluded that the
remedy is given under the rule stated in this     SCA permits an award of statutory damages
Section consists of an interference with the      without proof of actual damage. Unfortu-
possessor's interest in excluding others from     nately for Van Alstyne, it was the dissenting
the land.”Restatement (Second) of Torts §         justices in Doe, not the majority, that con-
163 cmt. d. Van Alstyne, however, conflates       cluded the SCA permitted such an award.
trespass to land with trespass to chattel,        See Doe, 540 U.S. at 639-640 (Ginsburg, J.,
which more closely mirrors the SCA. And,          dissenting) (noting the SCA also “ha[s] been
understood to permit recovery of the $1,000       awards of $150,000 against Leonard and
statutory minimum despite the absence of          $25,000 against ESL must be vacated.
proven actual damages”). Van Alstyne ar-
gues, however, that in responding to the dis-     IV.
sent the majority in Doe, instead of address-
ing the dissent's contention, concluded “the      ESL and Leonard raise two additional argu-
trouble with [plaintiff's] position is its re-    ments that deserve our consideration: that,
liance on the legislative histories of com-       under the SCA, Van Alstyne must also
pletely separate statutes passed well after the   prove actual damages to recover either (1)
Privacy Act.” Doe, 540 U.S. at 626. Accord-       punitive damages or (2) attorney's fees. On
ing to Van Alstyne, if the SCA and the Pri-       both questions, we agree with Van Alstyne
vacy Act's remedies are similarly limited,        that proof of actual damages is not required
the Doe Court should have said so. See also       before an award of either punitive damages
Freedman, 2006 U.S. Dist. LEXIS at *9             or attorney's fees.
(noting “if Doe cited Section 2707(c) as au-
thority for Congress' intention as to damages     A.
recoverable under the earlier enacted Priva-
cy Act, it would have said so as dicta, in-       [11] Although “[t]here is no established fed-
stead of rejecting its history as not determin-   eral common law rule that precludes the
ative”). Of course, the Supreme Court has         award of punitive damages in the absence of
“consistently refused to give” opinions           an award of compensatory damages,” People
“upon issues which remain unfocused be-           Helpers Found., Inc. v. City of Richmond,
cause they are not pressed before the Court       12 F.3d 1321, 1326 (4th Cir.1993), we have
with that clear concreteness provided when a      held, in accordance with “the majority rule”
question emerges precisely framed and ne-         that, absent statutory language to the con-
cessary for decision from a clash of adver-       trary, punitive damages are not recoverable
sary argument exploring every aspect of a         absent proof of actual damage, id. at 1327.
multi-faced situation embracing conflicting
and demanding interests.” United States v.        *8 [12] The SCA, we believe, provides such
Fruehauf, 365 U.S. 146, 157, 81 S.Ct. 547, 5      language. Section 2707(c) states, “[i]f the
L.Ed.2d 476 (1961). The Doe Court's refusal       violation [of the SCA] is willful or inten-
to interpret a statute not before it does not     tional, the court may assess punitive damag-
carry the authoritative weight Van Alstyne        es.”18 U.S.C.A. § 2707(c). This sentence
would prescribe it.                               lacks the limiting language associated with
                                                  an award of actual damages and statutory
C.                                                damages, with no references to persons “en-
                                                  titled to recover.” The sole limitation is that
[10] A “straightforward textual analysis”         the violation of the SCA be “willful or inten-
leads us to conclude that the district court      tional,” a threshold which the jury found to
erred in permitting the jury to award Van         be met in this case.
Alstyne statutory damages without requiring
her to prove that she sustained actual dam-       Accordingly, we find no error in the district
ages. Doe, 540 U.S. at 620. Accordingly, the      court's award of punitive damages absent a
showing of actual damages. See Saunders,         erwise, be recovered.
526 F.3d at 152-155 (approving award of
punitive damages under the Fair Credit Re-       Nonetheless, like the award of punitive
porting Act without award of actual damag-       damages, we must vacate the award of attor-
es); Yohay v. City of Alexandria Employees       ney's fees and costs for the district court's
Credit Union, Inc., 827 F.2d 967, 972 (4th       further consideration in light of Van Als-
Cir.1987) (noting “[a]ctual damages are not      tyne's lower degree of success. See, e.g.,
a statutory prerequisite to an award of puni-    Farrar v. Hobby, 506 U.S. 103, 114, 113
tive damages under the [Fair Credit Report-      S.Ct. 566, 121 L.Ed.2d 494 (1992) (noting,
ing Act]”). We must vacate and remand this       in interpreting 42 U.S.C.A. § 1988, “the de-
award, however, for the district court to ree-   gree of the plaintiff's overall success goes to
valuate in light of our ruling above that Van    the reasonableness of a fee award ....“ (in-
Alstyne was not entitled to statutory damag-     ternal quotation marks omitted)).
es in this case absent proof of actual damag-
es.                                              V.

B.                                               We agree with Leonard and ESL that the
                                                 SCA, containing language in all material
[13] Finally, ESL and Leonard challenge the      respects identical to the Privacy Act, cannot
award of attorney's fees and costs to Van        be read to permit an award of statutory dam-
Alstyne. Section 2707(b)(3) provides that        ages absent proof of actual damages. We
appropriate relief for an “aggrieved” person     accordingly vacate the statutory damages
may include “a reasonable attorney's fee and     awards against Leonard and ESL and re-
other litigation costs reasonably in-            mand the case for further proceedings. Al-
curred.”18 U.S.C.A. § 2707(b)(3).Section         though we agree with Van Alstyne that
2707(c), which describes the requirements        proof of actual damages is not a prerequisite
for an award of damages, concludes by not-       to recovery of punitive damages or attor-
ing that “[i]n the case of a successful action   ney's fees and costs, we vacate those awards
to enforce liability under this section, the     for the district court's reconsideration in
court may assess the costs of the action, to-    light of our ruling that Van Alstyne was not
gether with reasonable attorney fees deter-      entitled to statutory damages. We express no
mined by the court.”18 U.S.C.A. § 2707(c).       opinion as to whether Van Alstyne, at this
This latter sentence, ESL and Leonard con-       late stage, may yet again amend her com-
tend, limits the award of attorney's fees to     plaint to plead actual damages.
individuals who prove actual damages. We
disagree. Certainly, Congress could have         *9 VACATED AND REMANDED WITH
spoken more clearly on this issue, with the      INSTRUCTIONS
reference to attorney's fees and costs in sub-
section (c) seemingly superfluous in light of    FN1. ESL filed for bankruptcy in August
subsection (b)(3). We conclude, however,         2007 and this proceeding remains pending
that § 2707(b)(3) authorizes an award of at-     as an adversary proceeding in bankruptcy
torney's fees as appropriate relief apart from   court.
any requirement that damages, actual or oth-
FN2. These statements were not entirely          974 (2006), on this issue. In Unitherm, the
true. Indeed, Leonard ultimately admitted to     Court held that failure to file a Rule 50(b)
accessing Van Alstyne's AOL account at all       motion removed an appellate court's power
hours of the day, from home and internet         to review a sufficiency of the evidence chal-
cafes, and from locales as diverse as Lon-       lenge on appeal. Id. at 989. Having reviewed
don, Paris, and Hong Kong. During discov-        the parties' supplemental briefs, we easily
ery, Leonard produced copies of 258 differ-      conclude that Unitherm is not applicable to
ent emails he had taken from Van Alstyne's       this case, in which Leonard and ESL are not
AOL account.                                     challenging the sufficiency of the evidence
                                                 supporting the jury's verdict. Fuesting, 448
FN3. Van Alstyne argues that Leonard and         F.3d at 941 (noting “without an explicit dec-
ESL failed to preserve this argument for ap-     laration from the Supreme Court, we will
peal because, in her view, Leonard and ESL       not strain to read [Unitherm ] as overturning
are attempting to appeal the denial of a         a right of appellate review that is stated in
summary judgment ruling. That, Van Als-          the Federal Rules of Evidence, manifested in
tyne correctly notes, they may not do. See,      the precedents of numerous court of appeals
e.g., Varghese v. Honeywell Int'l Inc., 424      decisions, and observed in the leading trea-
F.3d 411, 421-23 (4th Cir.2005). We have         tises”).
reviewed the record and conclude that the
appellants did properly preserve this issue      FN4. ESL and Leonard argue that the ap-
by filing a motion for summary judgment          propriate common law analogue is the same
and then filing a Rule 50(a) motion for          invasion to privacy tort examined in Doe.
judgment as a matter of law. See Fuesting v.     Because the common law of trespass does
Zimmer, 448 F.3d 936, 941 (7th Cir.2006)         not aid Van Alstyne's argument, we have no
(recognizing that “[a] renewed motion for        need to opine on the precise common law
judgment as a matter of law under Rule           analogue for the SCA.
50(b) is not a condition precedent to appeal
from a final judgment. If there have been
errors at the trial, duly objected to, dealing
with matters other than the sufficiency of the
evidence, they may be raised on appeal from
the judgment even though there has not been
either a renewed motion for judgment as a
matter of law or a motion for a new trial ....
“ (quoting 9A Charles Alan Wright & Ar-
thur R. Miller, Federal Practice & Procedure
§ 2540 (2d ed.1995)).

After oral argument, we ordered the parties
to file supplemental briefs regarding the im-
pact of the Supreme Court's decision in Uni-
therm Food Sys., Inc. v. Swift-Eckrich, Inc.,
546 U.S. 394, 126 S.Ct. 980, 163 L.Ed.2d

Shared By:
Description: Suggestion in Bankruptcy document sample