The Center for Intellectual Property, Information & Privacy Law

Record on Appeal

U.S. Apparel is an American clothing designer, manufacturer and retailer. Its clothing is targeted to the pre-teen and teen population. It has a reputation in the industry as a responsible and wholesome producer of age-appropriate clothing for pre-teens and teens.

Jane Shapiro, who founded U.S. Apparel and served as the chief executive officer (CEO) for 10 years, was responsible for developing the company’s business strategy, operations, marketing, promotion, and policy.

As the CEO, Shapiro often worked remotely while traveling and attending meetings on behalf of U.S. Apparel, using her personal tablet and personal cell phone, which were both automatically synced to her desktop computer at U.S. Apparel. This enabled her to access all of U.S. Apparel’s detailed business plans, written policies, and contact information from any of those three devices.

Sharon Bennett, who was Jane Shapiro’s administrative assistant, created a Twitter account with the handle @U.S.Apparel_Shapiro and a LinkedIn account under the name Jane Shapiro, for Shapiro’s use in promoting and communicating with the public for U.S. Apparel. Contrary to U.S. Apparel’s policy, Shapiro gave Bennett the passwords for these accounts. Shapiro instructed Bennett that she could not access the accounts without Shapiro’s authorization.

LinkedIn is a professional network on the Internet. LinkedIn users can connect to one another and are referred to other users’ “connections” based on their similar interests or common “connections.” A user's profile page contains sections for associations, honors, and awards. Shapiro used her LinkedIn account to promote U.S. Apparel’s products, to build her reputation, to connect with her family, friends, and colleagues, and to maintain social and professional relationships.

Twitter is a social network and a blogging site that allows users to send and read short messages called “tweets.” Users create their network by “following” individuals and allowing others to follow them. Shapiro used her Twitter account to share U.S. Apparel news, interact with customers, and communicate with groups and individuals at one time.

In the past two years, U.S. Apparel had been losing some of its business to competitors. In an attempt to reinvent its image and change its marketing strategy, U.S. Apparel’s board of directors voted for a change in leadership, which led to Shapiro’s forced termination. The board replaced her with one of the industry’s most promising stars, Victor Valentini. When Shapiro left U.S. Apparel, she took her personal tablet and her personal cell phone with her.

At the direction of Valentini, Bennett accessed the files in Shapiro’s desktop computer and found a folder labeled, “Personal.” She then opened the folder and found a file labeled, “Threads Business Plan.” This was Shapiro’s private business plan for a new start-up company whose business plans included the manufacture of clothing for U.S. teens. Bennett opened another document called “Hanoi Labor, Co.” This file contained a private business plan and Jane Shapiro’s personal agreement with Hanoi Labor, Co. to manufacture clothing for Threads.

Bennett immediately disclosed the information that she had obtained from Shapiro’s personal files to Valentini who in turn reported it to U.S. Apparel’s Chairman of the Board, Thomas Stephan. Although U.S. Apparel did not do business with Hanoi Labor, Co., Stephan was interested in learning more about Hanoi Labor, Co. At his direction, Valentini conducted a month-long investigation and learned about the dire working conditions at Hanoi Labor, Co.’s plants where young children worked 14-hour days, in poorly lit, crowded, and unsanitary warehouses for less than $25 a month.

With Valentini’s report in hand, Stephan called a press conference and disclosed Shapiro’s plans to start a new clothing company and that her business plan included the manufacturing of clothing by Hanoi Labor, Co. He further disclosed the results of Valentini’s investigation that revealed the dire working conditions and the use of child labor in the manufacture of clothing by Hanoi Labor, Co.

At the direction of Valentini, Bennett accessed Shapiro’s LinkedIn and Twitter accounts, deleted her name and photo and other personal information, and substituted them with Valentini’s. Bennett changed the Twitter handle from @U.S.Apparel_Shapiro to @U.S.Apparel_Valentini. Bennett also changed the passwords, denying Shapiro further access to the LinkedIn and Twitter accounts; however, all other information contained in these accounts, including any posts, connections, and followers, remained the same.

Shapiro brought action against U.S. Apparel by filing a three-count complaint in the Nashville County Circuit Court, in the State of Marshall. In the first count, she alleged that U.S. Apparel had intentionally intruded upon her seclusion by accessing her desktop computer files and disclosing private information about her business dealings with Hanoi Labor, Co., and that this disclosure damaged her business and personal reputation.

The Supreme Court of the State of Marshall had previously adopted Restatement (Second) of Torts § 652B (1977) and recognized the tort action for the violation of intrusion upon seclusion.

§ 652B, provides:
One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the intrusion would be highly offensive to a reasonable person.

In her second count, she alleged that Bennett, as an agent of U.S. Apparel, committed computer fraud when she knowingly accessed Shapiro’s desktop computer and her personal files on that computer without her authorization, and that she knowingly accessed her LinkedIn and Twitter accounts, deleting her name, photo and other personal information and substituting them with Valentini’s, changing the Twitter handle from @U.S.Apparel_Shapiro to @U.S.Apparel_Valentini, and changing her account passwords, without her authorization, in violation of the State of Marshall Computer Fraud and Abuse Act, ¶ 1030(a) (2008).

¶ 1030(a), provides in part:

  1. Whoever knowingly accesses a computer without authorization or exceeding authorized access and by means of such conduct obtains personal information commits the offense of a fraud and related activity in connection with computers.
  2. Any person who suffers damage or loss by reason of a violation of this section may maintain a civil action against the violator to obtain compensatory damages or injunctive relief or other equitable relief.

In her third count, Shapiro brought a common law conversion claim, alleging that Bennett, as an agent of U.S. Apparel, intentionally converted the LinkedIn and Twitter accounts, the information contained in these accounts, and the contacts and followers associated with them, thereby interfering with Shapiro’s right to control them.

In a previous decision, the Supreme Court of the State of Marshall adopted the Restatement’s definition of conversion. RESTATEMENT (SECOND) OF TORTS § 222A (1965).

§ 222A, provides:

  1. Conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.
  2. In determining the seriousness of the interference and the justice of requiring the actor to pay the full value, the following factors are important:
    1. the extent and duration of the actor’s exercise of dominion or control;
    2. the actor’s intent to assert a right in fact inconsistent with the other’s right of control;
    3. the actor’s good faith;
    4. the extent and duration of the resulting interference with the other’s right of control;
    5. the harm done to the chattel;
    6. the inconvenience and expense caused to the other.

The Circuit Court of Nashville County granted U.S. Apparel’s motion to dismiss the three counts, finding that Shapiro had failed to state a claim upon which relief can be granted, pursuant to State of Marshall Rules of Civil Procedure, § 12(b)(6).

Shapiro appealed to the Third District of the Appellate Court of the State of Marshall. That court determined that the three questions raised by Shapiro were of such importance that they should be decided by the Supreme Court, and therefore, it certified them to the Supreme Court.

The Supreme Court of the State of Marshall accepted the case for review and designated Jane Shapiro as the Petitioner and U.S. Apparel as the Respondent.

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