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Yoder & Frey Auctioneers, Inc. v. EquipmentFacts, LLC

United States Court of Appeals, Sixth Circuit

December 22, 2014

EQUIPMENTFACTS, LLC, Defendant-Appellant

Argued September 30, 2014.

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Northern District of Ohio at Toledo. Nos. 3:10-cv-01590; 3:11-cv-02290-David A. Katz, District Judge.


Joseph A. Martin, ARCHER & GREINER, P.C., Haddonfield, New Jersey, for Appellant.

David W. Stuckey, ROBISON, CURPHEY & O'CONNELL, LLC, Toledo, Ohio, for Appellees.


Joseph A. Martin, Darth M. Newman, ARCHER & GREINER, P.C., Haddonfield, New Jersey, Anthony J. LaCerva, COLLINS & SCANLON LLP, Cleveland, Ohio, for Appellant.

David W. Stuckey, Thomas A. Gibson, Robert C. Tucker, ROBISON, CURPHEY & O'CONNELL, LLC, Toledo, Ohio, for Appellees.

Before: GUY, CLAY, and WHITE, Circuit Judges.


Page 1068

CLAY, Circuit Judge.

Defendant, EquipmentFacts, LLC (" Efacts" ), appeals from the judgment entered by the United States District Court for the Northern District of Ohio imposing liability and damages in a civil suit brought by Plaintiffs, Yoder & Frey Auctioneers, Inc. (Yoder & Frey) and, LLC (" RTB" ). Specifically, Efacts appeals from the district court's denial of spoliation sanctions; denial of hearsay objections to various documents produced by internet service providers; denial of summary judgment and judgment as a matter of law on Plaintiffs' Computer Fraud and Abuse Act (" CFAA" ) claim; and imposition of sanctions under Federal Rule of Civil Procedure 37. For the reasons set forth below, we AFFIRM the district court's decisions.


Yoder & Frey is an Ohio company that hosts auctions for used construction equipment. Its largest and most profitable auction is held annually in Florida. Efacts is a New Jersey company owned by Lawrence Garafola that provides auctioneers with online bidding platforms. In 2003, Yoder & Frey began offering the opportunity for buyers to submit live bids over the Internet during the Florida auction, and it contracted with Efacts to provide online bidding services for that purpose. As part of this relationship, Efacts received, stored, and maintained confidential customer information relating to Yoder & Frey's auctions. In early 2008, however, the companies had an acrimonious falling out and Yoder & Frey terminated the contract.

At this point, Yoder & Frey hired RTB, another online bidding services company. RTB created a custom online auction platform

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and used that software during Yoder & Frey's Florida auction in 2010, which took place from February 8 through February 16, 2010. As part of its services, RTB accepted online bidder applications and, in conjunction with Yoder & Frey, reviewed and approved prospective bidders who wished to participate in the auction.

At trial, Plaintiffs presented evidence that on February 7, 8, and 9, 2010, Efacts accessed the RTB bidding platform without authorization by utilizing an RTB administrative username (" test" ) and password (" test" ). The platform recognized this administrative login as bidder number 100051. Specifically, it was Efacts' owner Garafola who improperly accessed the auction. He was aware of the username and password combination from Efacts' prior relationship with Yoder & Frey. Bidder number 100051 submitted two winning bids with a combined price of $41,000 for which it did not pay.

Plaintiffs also pet forth evidence that on February 10 and 11, 2010, an Efacts employee gained unauthorized access to the RTB auction platform by posing as one of Yoder & Frey's customers, Allied Erecting.[1] During the auction, " Allied Erecting" was assigned bidder number 102703. In that two-day span, the employee placed eighteen winning online bids with a combined purchase price of $1,212,074 for which neither she nor Efacts paid.

Plaintiffs only learned of Efacts' unauthorized access after contacting Allied Erecting for payment of the eighteen items. Allied Erecting informed Yoder & Frey that it had not registered for the 2010 auction and had not placed any bids. After an exhaustive probe by Plaintiffs, it was confirmed that Allied Erecting had not registered and did not bid on the items, but that someone using Allied Erecting's information had gained access to and participated in the auction.

Knowing only that bidder numbers 102703 and 100051 had placed winning bids, Plaintiffs first had to determine the IP addresses from which the bids had been placed. To obtain this information, Justin Clark, who worked for both Yoder & Frey and RTB, contacted Rich Mavrogeanes, the owner of the server hosting the auction. Clark requested, and Mavrogeanes supplied, all the data from the server regarding the auction from February 6 through February 13, 2010, a total of over 35 million lines of information. The parties refer to this information as the IIS log or the digital log. It contained a record of all activity that took place on the online bidding system during the relevant time period.

Clark searched the digital log using various key words, including the two bidder numbers, the usernames and passwords for the two bidder numbers, and " Allied ER." During this investigation, Clark identified ten IP addresses that were associated with winning bids and other auction activity. Having identified ten suspicious IP addresses, subpoenas were issued to internet service providers (" ISPs" ) Covad, Century Link, and two Verizon companies, based on the dates and times that each bidding session started for each IP address. All ten IP addresses, including those utilized during the sessions when winning bids were placed, were traced to Efacts.

Upon learning this information, Yoder & Frey and RTB filed suit against Efacts. Following a jury ...

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