Georgia Supreme Court Limits Damages Under Georgia Computer Systems Protection Act

On January 27, 2017, the Supreme Court of Georgia issued a decision determining whether the Georgia Computer Systems Protection Act (“GCSPA”) provides for punitive damages.  While not directly related to construction, the GCSPA can be a potential mechanism for asserting claims against former employees that use company information stored in computers.

A company brought suit against two former employees that left to work for a competitor.  The complaint included claims of computer theft and computer trespass under the GCSPA, breach of fiduciary duty, and tortious interference with business relations.  The trial court ruled in favor of the company on all claims, and awarded it compensatory damages, attorney fees, and punitive damages of $5.1 million.  The Court of Appeals reversed the decision as to the tortious interference claim.  On remand, the trial court was to conduct a new trial on punitive damages because the verdict form did not identify which claims the punitive damages were assigned to or in what portion.  As a result of the Court of Appeals reversal, a new determination was to be made as to whether and what portion of punitive damages were attributable to the other claims.

Before the new trial on punitive damages took place, the former employees filed a petition for writ of certiorari, arguing that the Court of Appeals erred in holding that punitive damages were authorized under the GCSPA.  The Supreme Court of Georgia agreed and reversed the Court of Appeals decision with respect to punitive damages under the GCSPA.

In rendering its decision, the Court focused on textual and legislative history analysis of the GCSPA.  First, the Court examined the plain meaning of the statute authorizing a civil remedy for violations of the GCSPA.  O.C.G.A. § 16-9-93(g)(1) states is part that any person whose property or person is injured by a violation of the GCSPA may sue to recover “any damages sustained and the cost of the suit.”  The statute goes on to list two examples of damages, “loss of profits and victim expenditure.”

The Court noted that the statute does not mention punitive damages and that punitive damages are not compensatory in nature, but meant to penalize and deter certain conduct.  Moreover, punitive damages, the Court stated, are not usually “sustained” by the plaintiff, but are imposed by the court upon the defendant.  The language providing that the plaintiff may recover damages that are “sustained” convinced the Court of the legislature’s intent to not include punitive damages as recoverable damages under the GCSPA.

Second, the Court explained that legislatures will evidence their intent to include punitive damages as a remedy through express language in the statute.  The Court provided examples of other statues that expressly provided for punitive damages.  If the legislature intended to allow for punitive damages in the GCSPA, the Court stated, it would have expressly stated so.

Furthermore, the Court reviewed other parts of the GCSPA to support its holding.  Under the criminal section of the statute, those convicted cannot be fined more than $50,000.  The Court reasoned that this cap evidenced the legislature’s intent to leave penal sanctions to the government.  Allowing punitive damages, which could easily exceed $50,000, would, according to the Court, be incongruent with the GCSPA as a whole.

Lastly, the Court overruled a previous decision[1] that the Court of Appeals relied on to reach the conclusion that punitive damages are permitted under the GCSPA.

[1] Automated Drawing Systems, Inc. v. Integrated Network Svcs., Inc., 214 Ga. App. 122 (1994).