## Facts

- Yoder & Frey Auctioneers, Inc., an Ohio auctioneer, ran a major annual Florida construction-equipment auction and offered live internet bidding.
- Yoder & Frey contracted with EquipmentFacts, LLC (Efacts) to provide online bidding services; Efacts obtained confidential customer information during the relationship.
- After a dispute, Yoder & Frey terminated Efacts and retained RealtimeBid.com, LLC (RTB) to provide online bidding services.
- During Yoder & Frey’s February 2010 auction hosted on RTB’s platform, Efacts repeatedly accessed RTB’s system without authorization.
- From February 7–9, Efacts used an RTB administrative username and password (known to Efacts from the prior relationship) to submit winning bids totaling $41,000 that were not paid.
- From February 10–11, an Efacts employee again accessed the platform without authorization, impersonated a Yoder customer, and placed 18 winning bids totaling $1,212,074 that were not paid.
- Plaintiffs asserted the activity occupied limited bidding capacity, blocked legitimate bidders, and required time and expense to investigate and unwind unpaid, sham winning bids.
- A jury found for Yoder & Frey and RTB on a Computer Fraud and Abuse Act (CFAA) claim and awarded damages; the district court also imposed discovery sanctions under Federal Rule of Civil Procedure 37.

## Issues

1. Whether the district court abused its discretion by denying Efacts’s request for spoliation sanctions for alleged destruction or loss of electronic evidence.
2. Whether ISP-produced documents linking IP addresses to Efacts were inadmissible hearsay.
3. Whether the evidence was sufficient to establish CFAA “loss” or “damage,” including a denial-of-service type interruption, and to support denial of summary judgment and judgment as a matter of law.
4. Whether the district court abused its discretion by imposing Rule 37 sanctions for discovery misconduct.

## Decision

- The Sixth Circuit affirmed the judgment for Yoder & Frey and RTB in all respects.
- The court upheld the denial of spoliation sanctions, finding no abuse of discretion given the showing of culpability and prejudice.
- The court upheld admission of ISP records, concluding they were properly authenticated and fit within hearsay exceptions such as business records.
- The court held the jury had sufficient evidence of unauthorized access and cognizable CFAA loss, including costs of responding to and investigating the incident and evidence of denial-of-service effects on legitimate bidders.
- The court upheld the Rule 37 sanctions as within the district court’s discretion.

## Legal Principles

- Unauthorized access under the CFAA can be shown where a party uses retained or misused credentials from a prior business relationship to access another’s computer system without permission.
- CFAA “loss” may include reasonable costs of responding to an offense, including investigation and remediation efforts undertaken to address fraudulent or disruptive activity.
- Conduct that functionally blocks legitimate users from accessing limited system capacity can support CFAA loss/damage theories akin to denial-of-service interference.
- ISP account and IP-assignment records may be admitted when properly authenticated and qualifying under recognized hearsay exceptions, including the business-records exception.
- Spoliation rulings and Rule 37 discovery sanctions are reviewed deferentially and will be affirmed absent an abuse of discretion.

## Conclusion

The Sixth Circuit sustained a CFAA verdict based on an auction-platform intrusion using misused credentials and impersonation, holding that investigation/response costs and denial-of-service type interference constituted compensable loss, and it affirmed the district court’s evidentiary rulings and discovery-related sanctions.


Yoder & Frey Auctioneers, Inc. v. Equip. Facts, LLC, 774 F.3d 1065 (6th Cir. 2014)