Michigan Federal Court Adopts Narrow Interpretation of Civil Liability Under Computer Fraud and Abuse Act

The U.S. Circuit Courts of Appeals are currently split over how broadly the Computer Fraud and Abuse Act (“CFAA”) should be interpreted. A recent decision out of the Eastern District of Michigan highlights this split and examines the ways in which the courts have interpreted the statute before deciding to adopt a narrow interpretation of civil liability under the CFAA.

On May 14, 2012, Judge Marianne O. Battani of the Eastern District of Michigan decided the case of Ajuba International , LLC v. Saharia. As a condition of his employment, Mr. Saharia, the defendant, signed an employment agreement with the plaintiffs, along with a non-compete agreement prohibiting him from competing with Ajuba International or soliciting any of its employees. Once the agreement expired, Saharia entered into a new agreement with Ajuba International’s subsidiary, Ajuba India. Under the terms of this agreement, Saharia acted as Ajuba India’s president. Unbeknownst to the plaintiffs, however, at the same time, Saharia had established his own company, AGS India, to compete directly with their company. Allegedly, Saharia then hired multiple key management personnel from AGS India, interfered with the plaintiffs’ business relationships to advance his own interests, and misappropriated trade secrets and other confidential information. The plaintiffs sued in federal

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