United States District Court, Northern District of California
January 21, 1999
UNITED STATES OF AMERICA, PLAINTIFF,
NICHOLAS MIDDLETON, DEFENDANT.
The opinion of the court was delivered by: Legge, District Judge.
ORDER ON MOTIONS
Defendant has made several motions, which have been opposed,
briefed, argued, and submitted for decision.
The indictment charges one count, a violation of
18 U.S.C. § 1030(a)(5)(A). That section provides that whoever "knowingly
causes the transmission of a program, information, code, or
command, and as a result of such conduct, intentionally causes
damage without authorization, to a protected computer" is guilty
of a crime.
Defendant first moves to dismiss the indictment on the ground
that its allegations are insufficient. The charging indictment
closely tracks the language of the statute quoted above. It then
goes on to charge that "defendant knowingly transmitted code and
commands to a computer system of an Internet Service Provider
within the Northern District of California, a computer system
that was then used in interstate and foreign commerce, and that
as a result of such conduct the defendant intentionally caused
damage without authorization, and that damage caused a loss
aggregating at least $5,00 during a one-year period. . . ." The
dispute is over the sufficiency of the allegation of damage.
The term "damage" for purposes of Section 1030(a)(5)(A) is
defined in Subsection (e)(8) in four ways. The one that is at
issue here is Subsection (e)(8)(A), defining "damage" as "causes
loss aggregating at least $5,000 in value during any 1-year
period to one or more individuals."
The indictment here specifically alleges that the damage was a
loss aggregating at least $5,000 during a one-year period. The
indictment does not use the words "to one or more individuals."
However, the failure to include that language does not render the
indictment fatally defective.
Federal Rule of Criminal Procedure 7(c) requires that an
indictment be a plain, concise, and definite written statement of
the essential facts constituting the offense
charged. "An indictment is sufficient if it contains the elements
of the charged crime in adequate detail to inform the defendant
of the charge and to enable him to plead double jeopardy."
United States v. Alber, 56 F.3d 1106, 1111 (9th Cir. 1995)
(quoting United States v. Buckley, 689 F.2d 893, 896 (9th Cir.
1982)). "An indictment must be read in its entirety and construed
in accord with common sense and practicality." Alber, 56 F.3d
This indictment meets those standards. The acts which defendant
is alleged to have done are certainly set forth with adequate
particularity, tracking the language of the statute. Subsection
(a)5(A) states that it is unlawful to cause damage to a protected
computer, but does not specify what that damage is. Subsection
(e)(8) defines "damage" in four ways. The indictment charges that
the damage was a loss aggregating at least $5,000 during a
one-year period. That is clearly invoking the damage defined in
The motion to dismiss the indictment on the ground of the
insufficiency of the charge is therefore denied.
A more serious argument is that because of the requirement of
the statute that the damage be to an "individual," it is not
applicable to the facts of this case. Defendant argues that the
term "to one or more individuals" includes only natural persons
and not businesses. The government argues that "individuals" can
include businesses as well as natural persons.
The indictment itself does not state whether the harm was to a
natural person or not. The victim is identified only as an
"Internet Service Provider." However, in the briefing on this
motion the parties agree that the victim was a business entity
known as Slip. net, which is not a natural person. Therefore,
both sides ask this court to resolve the question of whether the
"damage" defined by the statute must be to a natural person or
can also be to other types of entities. There is no case decision
on that issue under this statute. This court believes that the
issue must be resolved based upon the intent of Congress.
A recent decision of the United States Supreme Court, Clinton
v. City of New York, 524 U.S. 417, 118 S.Ct. 2091, 141 L.Ed.2d
393 (1998), discussed the use of the term "individual" in a
statute, in the context of the Line Item Veto Act. That act
provides that an "individual" adversely affected by the act can
bring an action challenging its constitutionality. The Court
interpreted the term "individual" to include not only natural
persons, but also business and governmental entities. The court
based its decision on interpreting the intent of Congress; 524
U.S. at ___, 118 S.Ct. at 2098.
The United States Code states generally that "[i]n determining
the meaning of any Act of Congress, unless the context indicates
otherwise . . . the words "person" and "whoever" include
corporations, companies, associations, firms, partnerships,
societies, and joint stock companies, as well as individuals."
1 U.S.C. § 1 (emphasis added). Title 18 states that "[a]s used in
this title, the term "organization" means a person other than an
individual." 18 U.S.C. § 18 (emphasis added). Section 1030 uses
the term "person" in addition to the term "individual." See
18 U.S.C. § 1030(g) (providing that "[a]ny person who suffers damage
or loss by reason of a violation of this section may maintain a
civil action against the violator"), discussed below. Middleton
contends that these definitions show that Congress distinguishes
between individuals and corporations. He contends while the term
"person" encompasses both "corporations" and "individuals," the
words "corporations" and "individuals" have different meanings.
Middleton argues that Slip. net is an "organization" and a
"person," but is not an "individual." Under Middleton's view, the
government must show damage of $5,000 to a natural person, and
not to a business entity such as Slip.net.
In interpreting the term "individual" broadly in the context of
the Line Item Veto Act, the United States Supreme Court in
Clinton v. New York stated that,
[t]here is no plausible reason why Congress would
have intended to provide for such special treatment
of actions filed by natural persons and to have
precluded entirely jurisdiction over comparable cases
brought by corporate persons. Acceptance of [that]
reading of [the provision]
would produce an absurd and unjust result which
Congress could not have intended.
Id. at 2098 (internal quotation omitted).
This court believes that the same reasoning applies to the
statute at issue here. The obvious purpose of Section 1030 is to
protect the use of computers. Most of the use of computers, and
particularly the use that could result in monetary damage, is in
a business setting. It does not make sense that Congress would
seek to protect the integrity of computers and their information,
but would limit that protection to natural persons and not
include business entities who are more likely to use computers.
A Congressional intention to encompass business entities also
appears in the statute's definition of a "protected computer."
That is defined in Section 1030(e)(2)(B) as including one "which
is used in interstate or foreign commerce or communication." That
is of course far more likely to incur when a computer is used by
a business entity than by a natural person.
The court also believes that this intention is apparent from
Subsection 1030(g), which creates a private right of action. That
private right of action expressly applies to Subsection
(e)(8)(A)'s definition of damage with which we are concerned in
this indictment. That subsection grants a cause of action to "any
person." As quoted above, the term "person" in the United States
Code includes business entities as well as individuals. It would
be inconsistent to grant a private right of action to a business
entity, expressly including Subsection (e)(8)(A) damage, and then
to say that (e)(8)(A) can apply only to natural persons.
The Congressional intent is also supported by some of the
legislative history of the section. The 1996 Senate report makes
no mention of any limitation on who the victims must be under the
newly enacted Section 1030(e)(8). Instead, the report states:
"The term `damage' in new subsection 1030(e)(8), as used in the
proposed amendment of subsection 1030(a)(5), would mean any
impairment to the integrity or availability of data, information,
program or system which (A) causes loss of more than $5,000
during any 1-year period. . . ." S.Rep. No. 357, 104th Cong., 2nd
Sess. 1996 (1996 WL 492169).
The court therefore concludes that the statute encompasses
damage sustained by a business entity as well as by a natural
person. Defendant's motion to dismiss on this ground is therefore
Defendant makes two motions regarding the government's theory
of damage. Middleton asks the court to order the government to
provide a bill of particulars on its claim of damage. Middleton
also requests comprehensive discovery on the government's theory
The United States has provided to defendant in discovery a
summary of damage that was allegedly sustained by Slip.net; see
defendant's motion, Exhibit D. Defendant claims that the damage
summary includes numerous hours of tasks that are not in fact
related to repairing the damage allegedly caused by defendant.
Defendant further argues that the $200 per hour hourly rate that
is claimed for the repairs makes little sense because the people
making the repairs were salaried employees. Those are really
arguments about whether the government's evidence will be
adequate to convince the trier of fact, not about the adequacy of
the pretrial disclosure of the evidence. Defendant also questions
whether the damage summary that the government has provided is a
complete description of the damage that the government alleges
A. Motion for a bill of particulars
Federal Rule of Criminal Procedure 7(f) provides that a court
may direct the filing of a bill of particulars. The Ninth Circuit
The purposes of a bill of particulars are threefold:
To inform the defendant of the nature of the charge
against him with sufficient precision to enable him
to prepare for trial, to avoid or minimize the danger
of surprise at the time of trial, and to enable him
to plead his acquittal or conviction in bar of
another prosecution for the same offense when the
indictment itself is too vague, and indefinite for
United States v. Ayers, 924 F.2d 1468
, 1483 (9th Cir. 1991)
(internal quotations omitted). As Ayers indicates, a bill of
particulars is not meant to provide the defendant with all of the
evidence that the government will introduce
at trial. Instead, the goal of a bill of particulars is satisfied
if the defendant is aware of "the theory of the government's
case." United States v. Ryland, 806 F.2d 941
, 942 (9th Cir.
Even if an indictment is vague, a bill of particulars is not
necessary if the government's disclosures and discovery
adequately advise the defendant of the charges against him. See
United States v. Long, 706 F.2d 1044, 1054 (9th Cir. 1983)
("Full disclosure will obviate the need for a bill of
particulars."); United States v. Mitchell, 744 F.2d 701, 705
(9th Cir. 1984).
Here, the indictment and the discovery provided by the
government have adequately advised the defendant of the charges
against him. The discovery from the government details the damage
that the government alleges defendant caused. The government has
also provided defendant with two e-mails from the system operator
to the president of Slip.net, which states the damage that the
system operator identified upon his first review of the damage.
Further, in its brief in opposition to the bill of particulars,
the government further outlines its theory of damage. The
government confirms defendant's understanding that the victim
Internet Service Provider to which the indictment refers is
Slip.net of San Francisco. The government also states that its
theory of loss will be that the damage caused by defendant to the
Slip.net computers caused Slip.net employees to expend time to
investigate, identify, and correct the damage caused by
Middleton, and take other security related steps. The government
further details the time Slip.net employees expended. The
government also explains that it believes that the time the
employees expended can be fairly valued at a figure of at least
their hourly wage or salary, plus the value of benefits and
The indictment, the discovery provided, and the government's
disclosures in connection with this motion adequately advise
defendant of the theory of the government's case. Defendant's
motion for a bill of particulars is therefore denied.
B. Defendant's motion for further discovery.
Defendant moves for the production by the government of four
classes of documents, and other evidence related to proof of the
damage to Slip.net. In its opposition, the government states that
it has disclosed all documents in its possession that are covered
by those requests. The government further represents that if and
when it receives additional documents from Slip.net or elsewhere
that fall under Rule 16 or its constitutional Brady
obligations, the government will disclose them promptly.
Defendant's motion is therefore denied.
A trial setting conference will be held on January 29, 1999 at
1:30 p.m. to set dates for the trial, the pretrial conference,
any additional motions, and any other necessary procedures.
IT IS SO ORDERED.
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