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Georgia high court says no punitive damages under state’s Computer Systems Protection Act

By Richard Jones | Feb 24, 2017

ATLANTA (Legal Newsline) – Georgia’s highest court last month weighed in on whether a plaintiff can be awarded punitive damages as compensation for losses under the Georgia Computer Systems Protection Act. 

In Lyman et. al. v. Cellchem International LLC, Georgia’s Supreme Court ruled that the state’s court of appeals had erred when it ordered a new trial to determine punitive damages to be awarded to the plaintiffs.

In his ruling, presiding Justice Harold D. Melton determined that there is no provision under the GCSPA allowing for the awarding of punitive damages.

“There is no express language authorizing the recovery of punitive damages in OCGA § 16-9-93 (g) (1),” wrote Melton. “If the legislature had intended for such damages to be recoverable under the statute, it could have expressly stated so.”

The court took to interpreting the law in a more literal sense

“In interpreting this provision, 'we apply the fundamental rules of statutory construction that require us to construe [the] statute according to its own terms, to give words their plain and ordinary meaning, and to avoid a construction that makes some language mere surplusage,'” Melton wrote.

Cellchem sued Dale and Helen Lyman after they resigned their employment to work for another competitor in the same commercial space. In the complaint, Cellchem alleged computer thief and computer trespassing. 

In 2014, a jury awarded a Cellchem a verdict of $7.4 million on the grounds that the defendants had indeed caused harm to Cellchem and had accessed proprietary material from the company’s computers. The court determined that of the $7.4 million in damages, $5.1 million would be punitive damages.

The Lymans appealed, and the court of appeals affirmed the majority of the lower court’s ruling. The appeals court remanded the damages portion of the case back to the lower court for a new trial to determine punitive damages. In making its ruling the appeals court cited Automated Drawing Systems Inc. v. Integrated Network Svcs. Inc, 214 Ga. App. The Lymans then submitted a writ to the Georgia Supreme Court, which agreed to review whether the GCSPA expressly allows for punitive damages.

The Georgia Computer Systems Protection Act was enacted in 1991 to codify criminal liability and set forth penalties for the crimes such as computer theft and computer trespassing. The law does not specifically provide for punitive damages beyond fines for criminal violations of the act but not civil violations. Criminal penalties for crimes such as computer theft and trespassing include fines up to $50,000 while computer password theft can lead to a fine of $5,000 and a year in jail.

In making its decision the court also overruled the holding established in Automated Drawing Systems Inc. v. Integrated Network Svcs. Inc., 214 Ga. App.

“We therefore conclude the court of appeals erred in its determination that an award of punitive damages is authorized under OCGA § 16–9–93 (g) (1) and we remand this case with the direction that the court of appeals enter a new opinion that is consistent our holding here. We also expressly overrule 7 Automated Drawing Systems, supra, which the court of appeals relied upon to reach the erroneous conclusion that punitive damages are available for violations of the GCSPA.”

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