Metropolitan News-Enterprise


Monday, September 25, 2006


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Appeals Court:  Evidence of Computer Hacking Conspiracy Enough to Send Case to Jury, Defeat Summary Judgment


By a MetNews Staff Writer


Circumstantial evidence that a business owner conspired to hack into a competitor’s web site was sufficient to let the case go to the jury, the Fourth District Court of Appeal ruled Friday.

In an unpublished opinion, Div. Three reversed Orange Superior Court Judge Derek G. Johnson, who granted summary judgment to EZ Copy and its owner Mark Holman in a suit brought by J & H Copy Services, Inc.

J & H copies confidential medical records for its customers and maintains an internet web site they can access. EZ Copy was its competitor.

EZ Copy hired Pinnica Corporation to assist in EZ Copy’s web site design. All parties agreed that Pinnica employee Daniel Johnson hacked into J & H’s web site and rigged it so that anyone accessing it would find a nearly-blank screen with a short, profane rant saying, among other things, that it was “the easiest hack ever.”

J & H’s attorney, Jay Coggan, told the MetNews that the motivation was to scare J & H’s customers into believing that their confidential files would not be secure on J & H’s site.

Johnson had no prior relationship with J & H, while there was “ill will” between J & H and Holman, the parties agreed. There was also evidence that prior to the hacking, Holman had expressed a desire to harm J & H, and asked Johnson: “is there something that you can do to get into their website?”

Almost immediately after the hacking, another employee of EZ Copy contacted a mutual customer of both J & H and EZ Copy, to spread word of J & H’s security breach — before J & H itself was even aware of the problem, evidence showed.

Johnson allegedly wrote an e-mail to others at Pinnica, saying:

“I know what I did . . . .

“I don’t need to hear what repercussions may or may not result from what I did. I did what I did because of my own personal feelings and not because of anything our client said. I don’t need to hear what you may have to say. I have the repercussions from my personal life to deal with and the thought of the current investigations are enough. [E]ither you want to fire me or not . . . either way I accept your decision and am not going to argue it . . .”

Johnson committed suicide shortly thereafter.

J & H sued Pinnica, EZ Copy and Holman, alleging that Holman and Johnson conspired to hack into its web site. EZ Copy and Holman moved for summary judgment, arguing that J & H lacked sufficient evidence to support its conspiracy allegation.

In granting the motion, Judge Johnson said:

“Well, there’s no question that . . . the dots connect. I don’t have any problem with that. It smells. It smells to high heaven. . . .”

But Johnson said he was “looking for some act in furtherance of a conspiracy.”

He reasoned that evidence that Holman expressed to Johnson his desire to “f—- that company up,” and then immediately asked him “is there something that you can do to get into their website?,” established only that Holman might have “planted the seed,” but was insufficient to impose conspiracy liability.

On appeal J & H argued that the evidence that Holman asked Johnson directly if he could “get into” J & H’s website — followed shortly thereafter by Johnson doing that very thing — was sufficient to support the conclusion that Johnson’s act was the product of a conspiracy.

Justice William W. Bedsworth, writing for Div. Three, agreed, saying:

“A conspiracy to commit a tort is, by its nature, secretive it would be unusual — and highly counterproductive — for the parties involved in such an arrangement to openly acknowledge their participation in the scheme. As a consequence, the existence of a conspiracy is typically established through inferences — conclusions drawn from surrounding facts and circumstances, including the relationships among the alleged members and between them and their target.”

Bedsworth explained:

“In this case, the involvement of Holman and EZ Copy would be a ‘mere possibility’ if all we knew was that Holman was hostile toward J & H, but had no evidence linking either him or EZ Copy to Johnson or the actual hacking incident. But here, such evidence is abundant. As the trial court itself put it, ‘the dots connect.’”

Coggan said Holman and J & H owner Dale Holden grew up together, and Holman worked for Holden before starting his own business. He said he couldn’t speculate what led Johnson to commit suicide, but said it happened shortly after the FBI started investigating and seized Pinnica’s computers.

Theodore Beall, attorney for EZ Copy and Holman could not be reached.

Justices Eileen C. Moore and Raymond J. Ikola concurred in the opinion.

The case is J & H Copy Service, Inc. v. Pinnica Corporation, G036214


Copyright 2006, Metropolitan News Company