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Brett Perloff v. David Stein

February 23, 2011


The opinion of the court was delivered by: Rufe, J.

Memorandum Opinion and Order

The claims in this case arise from a business dispute between Plaintiff Brett Perloff and defendants David Stein, Sean Stein, *fn1 and Scott Stein. The four men together invested in a new venture, 1904 Chestnut Enterprises, Inc., and opened a restaurant and lounge called Pearl in Philadelphia, Pennsylvania. Mr. Perloff had a twenty-five percent interest in the restaurant. On August 22, 2008, Plaintiff received letters terminating his active involvement in Pearl and prohibiting him from entering the premises. Plaintiff filed a Complaint in this Court, alleging violations of state and federal law, and later amended that Complaint. Currently before the Court are Defendants' Motions to Dismiss the First Amended Complaint.

Jurisdiction in this case is based upon Plaintiff's claim that Defendants violated the Federal Stored Communications Act (18 U.S.C. § 2701 et seq.) (Count II). The other counts in Perloff's Amended Complaint are state law claims for: Defamation and Slander (Count I), Invasion of Privacy (Count III), Breach of Contract (Count IV), Conversion (Count V), Unjust Enrichment (Count VI), Fraud (Count VII), Violation of the Pennsylvania Wage and Payment Collection Law (Count VIII), Violation of the Business Corporation Law (Count IX), Alter Ego Liability (Count X), and Malicious Prosecution (Count XI). Because the state law claims predominate over the federal claim, and because the facts needed to prove the federal claim are narrow and unique to that claim and the invasion of privacy claim (Count III), the Court will retain jurisdiction over the federal claim and the related invasion of privacy claim, and decline to exercise supplemental jurisdiction over the remaining state law claims, as permitted under 28 U.S.C. § 1367(c)(2). Accordingly, the remainder of this opinion will address the Parties' motions to dismiss Counts II and III only. The remaining counts will be dismissed without prejudice so that Plaintiff may re-file them in state court.

Factual Background Relevant to Counts II and III

Plaintiff alleges that he invested significant personal capital ($250,000) in Pearl and had a twenty-five percent interest in the business. Plaintiff also exercised active roles in the business, one of which was to manage Pearl's website and the four business partners' e-mail addresses, through an account at registered in Perloff's name. *fn2 Between June 2008 and September 2008, Plaintiff alleges that David Stein, Sean Stein, and Scott Stein intentionally went into his email account ( and the account, reset his passwords, and locked him out of his digital property.*fn3 He also alleges that David Stein's and Scott Stein's wives, Defendants Beth Stein and Mindi Stein, respectively, were privy to his e-mail account and account through marital confidential communications. He further alleges that the Defendants made "incorrect assumptions based on reviewing personal email information without consent." *fn4

Standard of Review

Dismissal of a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted is appropriate where a plaintiff's "plain statement" does not possess enough substance to show that plaintiff is entitled to relief. *fn5 In determining whether a motion to dismiss is appropriate the court must consider those facts alleged in the complaint, accepting the allegations as true and drawing all logical inferences in favor of the non-moving party. *fn6 Courts are not bound to accept as true legal conclusions couched as factual allegations. *fn7 Something more than a mere possibility of a claim must be alleged; the plaintiff must allege "enough facts to state a claim for relief that is plausible on its face." *fn8 The Complaint must set forth direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory. *fn9 The court has no duty to "conjure up unpleaded facts that might turn a frivolous action. . . into a substantial one." *fn10


Federal Stored Communications Act

The Federal Stored Communications Act creates civil liability for one who "1) intentionally accesses without authorization a facility through which an electronic communication service is provided, or 2) intentionally exceeds an authorization to access that facility; and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such a system." *fn11

In this case, the Amended Complaint alleges that Defendants David, Scott and Sean Stein, intentionally and without authorization or consent, accessed Plaintiff's email and account. It is further alleged that they altered the accounts to prevent Plaintiff's authorized access to these accounts. Defendants allegedly prevented Plaintiff's authorized access to his e-mail account by resetting his password approximately ten times between June and September 2008, and also "converted" his personal account and permanently locked him out of it. As noted above, Plaintiff alleges that he personally "owned" the domain name and URL for the restaurant's website (, as well as the e-mail addresses for himself and each of the co-owners of Pearl (,, etc.). For the purpose of this Motion, the Court infers Plaintiff's ongoing authorization to control and access the accounts at issue from the allegation that Plaintiff personally owned these accounts. In light of the facts alleged, the Court finds that Count II is adequately pled and states a claim on which relief can be granted. Therefore, Count II survives the motion to dismiss as to David and Scott Stein. *fn12

His Federal Stored Communications Act claims against Defendants Beth and Mindi Stein, however, are not adequately pled. He does not allege that either woman intentionally accessed his stored electronic communications; he alleges only that the contents were disclosed to them by their husbands "through marital confidential communications." The Act prohibits only unauthorized accessing of stored electronic communications. Section 2701 does not proscribe unauthorized use or disclosure of that communication, even if obtained by unauthorized access. *fn13 Even assuming that Scott and David Stein passed any information obtained from his electronic files along to their wives (and there are no facts alleged to support this assumption), neither the disclosure nor the receipt of that information is illegal under the Act.

Invasion of Privacy

To state a claim for unreasonable intrusion upon the seclusion of another (the only invasion of privacy tort applicable to the facts alleged in the Amended Complaint), one must allege: 1) an intentional intrusion; 2) upon private concerns; 3) which was substantial and would be highly offensive to a reasonable person; and 4) which caused mental suffering, shame, or humiliation. *fn14 Plaintiff's complaint does allege an intentional intrusion upon his electronic accounts, supported by his allegations that his access to those accounts was blocked. However, his complaint does not allege sufficient facts to support a claim that Defendants intruded upon his "private concerns" by accessing the content of his email or other accounts. He only asserts, without supporting facts, that Defendants made "incorrect assumptions based on reviewing personal email information without consent." As to the third element, he merely restates the standard and adds the conclusion that "email and web accounts are a highly private item and are always kept private from others." And finally, he ...

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