## Facts

- Party City Corporation operated “Party City” stores selling discount party goods; plaintiffs were affiliated franchisees and a management company overseeing franchise operations.
- Defendants Andrew Bailen and Andrew Hack were former high-level Party City employees; after leaving, they formed Celebrations and opened competing retail party goods stores near existing Party City locations.
- Plaintiffs alleged Hack accessed plaintiffs’ computer systems without authorization or beyond authorized access while consulting or after termination, and that defendants used confidential information to choose store locations, allocate inventory, and compete.
- Plaintiffs sought a preliminary injunction to bar defendants’ store operations, prevent use of trade secrets/confidential information, and require return of such information.
- The district court denied preliminary relief, finding plaintiffs failed to show a likelihood of success and an adequate evidentiary basis for an injunction.

## Issues

1. Whether the civil action provision of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(g), authorizes private plaintiffs to seek injunctive or other equitable relief.
2. Whether the district court abused its discretion in denying a preliminary injunction where plaintiffs’ proof of unauthorized access, improper use, and resulting CFAA “damage” or “loss” (and comparable state-law harm) was minimal.

## Decision

- The Third Circuit held that § 1030(g) authorizes injunctive and other equitable relief for persons suffering “damage or loss” by reason of a CFAA violation.
- The court affirmed the denial of a preliminary injunction because plaintiffs did not provide sufficient evidence showing what information was accessed or taken, that access was unauthorized, or that any access caused cognizable harm supporting preliminary relief under the CFAA or state law.

## Legal Principles

- CFAA § 1030(g) permits private civil actions for “compensatory damages and injunctive or other equitable relief,” so equitable remedies are available when statutory prerequisites are met.
- A preliminary injunction requires, at minimum, a persuasive showing of likelihood of success on the merits supported by concrete evidence; speculative allegations about unauthorized access or competitive use of data are insufficient.
- When the record does not reliably establish misappropriation or use of confidential information, preliminary injunctive relief is properly denied under both federal statutory claims and parallel state-law theories.

## Conclusion

The Third Circuit clarified that the CFAA’s civil remedy provision authorizes private injunctive relief, but it affirmed denial of a preliminary injunction because plaintiffs’ proof of unauthorized access, misuse of information, and resulting statutory or equitable harm was too speculative to justify extraordinary interim relief.


P.C. Yonkers, Inc. v. Celebrations the Party & Seasonal Superstore, L.L.C., 428 F.3d 504 (3d Cir. 2005)