Guava LLC v. Spencer Merkel – Minnesota Litigation

Guava LLC v. Spencer Merkel

By Mark Santi –

Guava LLC has filed suit against Spencer Merkel alleging “interception of electronic communications and civil conspiracy, arising from unlawful computer breaches” in Minnesota’s District Court for the Fourth Judicial District, Hennepin County. The case number is 27-cv-12-20976 and the presiding judge is Tanya M. Bransford. Subpoenas have been issued to internet service providers requesting the personal information associated with numerous IP addresses.

Our Minneapolis law firm is experienced representing clients whose personal information has been subpoenaed from internet service providers in the Merkel case and many others. You may have a number of defenses that would prevent the dissemination of your private information into the public records of the court in which this case is pending. Please contact us at the email address above to discuss your rights.

Guava v. Merkel Update

A hearing on Motions to Quash filed by John Does and Internet Service Providers has been scheduled for January 25, 2013

Guava LLC Complaint

The following is a complaint filed in Minnesota’s Fourth Judicial District Court by Guava LLC. The complaint and exhibits can be found in PDF format here.


Filed in Fourth Judicial District Court 10/17120123:07:20 PM Hennepin County Civil, MN



GUAVA LLC, Plaintiff, vs. SPENCER MERKEL, Defendant.



Plaintiff Guava LLC, by and through its undersigned counsel, hereby files this Complaint requesting damages and injunctive relief, and alleges as follows:


  1. Plaintiff files this action for interception of electronic communications and civil conspiracy, arising from unlawful computer breaches. By this action, Guava seeks compensatory damages, injunctive relief and attorney’s fees and costs.


  1. Plaintiff is a limited liability company that owns and operates protected computer systems. including computer systems accessible throughout Minnesota.
  2. Defendant Spencer Merkel breached Plaintiff’s protected computer systems and intercepted Plaintiffs electronic communications.


  1. Hacking has become a serious threat to anyone maintaining private or protected computer systems. See Kevin Parrish, Hackers Have Access to 1 in 5 Microsoft Logins, TOM’S GUIDE, July 16,2012, attached hereto as Exhibit A (finding that “20-percent of Microsoft Account logins are found on lists of compromised credentials stemming from hack attacks on other services like Yahoo and Facebook.”); Michael Mimoso, Cybercrime Gang Recruiting Botmasters for Large-Scale MiTM Attacks on American Banks, THE THREAT POST, Oct. 4, 2012, attached hereto as Exhibit B (explaining that “as many as 30 banks have been targeted” recently by cyber hackers.); Bryon Acohido, No Slowdown in Sight for Cyber attacks, USA TODAY, July 30, 2012, attached hereto as Exhibit C (Eddie Schwartz, chief security officer of security firm RSA stating that “[it’s easier and safer for a criminal to steal money from an online bank account, rather than have to walk into a bank – or to steal intellectual property in an online setting, rather than have to send in a human spy.”).
  2. Even large corporations and governmental agencies are not immune from hacking attacks. See Kim Zetter, Hackers Release 1 Million Apple Device IDs Allegedly Stolen From FBI Laptop, WIRED, Sept. 4, 2012, attached hereto as Exhibit D (explaining that a hacker group obtained “I million Apple device IDs that” were “obtained from an FBI computer they hacked.”).
  3. Companies harmed by hacking are encouraged to seek relief in the courts. See Glenn Chapman, Cyber Defenders Urges to go on the Offense, AMERICAN FREE PRESS, July 26,2012, attached hereto as Exhibit E (former FBI cyber crime unit chief Shawn Henry explaining that “1 believe the threat from computer network attack is the most significant threat we face as a civilized world, other than a weapon of mass destruction.” and Black Hat founder Jeff Moss proposing that “cyber attackers also be fought on legal fronts, with companies taking suspected culprits to court.”).


  1. Plaintiff operates computer systems that distribute third-party content. By way of analogy, Plaintiff is like a satellite radio station in that it distributes content owned by others. Plaintiff generates revenue by requiring third-parties to pay a fee for accessing its distributions systems. Members are assigned a username and password in order to access the distribution system.
  2. Defendant used a username and password that did not belong to him to gain unauthorized access to Plaintiffs protected computer systems. Once he gained unauthorized access to Plaintiffs protected computer systems he intercepted electronic communications between Plaintiff and its legitimate members.
  3. Defendant obtained the usemame and password he used to gain unauthorized access to Plaintiffs protected computer systems from a website that allows its members to trade stolen usemames and passwords amongst one another.


  1. Plaintiff hereby incorporates by reference each and every allegation contained in the preceding paragraphs as if set forth fully herein.
  2. Defendant used hacked usernames and passwords to gain access to Plaintiffs protected computer systems and intentionally intercepted numerous electronic communications between Plaintiff and its paying members.
  3. The intercepted electronic communications included information regarding the identities of Plaintiffs customers, account information, financial information, computer programming and security information, and other information that Plaintiff protects and does not even give access to third parties, even those who pay for and obtain legitimate passwords to access Plaintiffs websites.
  4. Plaintiff has suffered actual damages as a result of Defendant’s actions.
  5. Defendant profited by the unauthorized interceptions of Plaintiffs electronic communications.
  6. Those actions on the part of Defendant constitute violations of Minn. Stat. § 626A.02Interception and Disclosure of Wire, Electronic, or Oral Communications Prohibited. A private right of action exists under Minn. Stat. § 626A.32.


  1. Plaintiff hereby incorporates by reference each and every allegation contained in thepreceding paragraphs as ifset forth fully herein.
  2. Defendant colluded with multiple members of a hacking community to interceptelectronic communications taking place on Plaintiffs protected computer systems. The hacking community’s members share hacked usemames and passwords among other members to ensure that they had access to Plaintiffs protected computer systems.
  3. Defendant reached an agreement with his fellow co-conspirators to gain unlawful access to Plaintiffs computer systems and intercept electronic communications. Defendant was aware that the hacked usemame and password he used did not belong to him and that he did not have Plaintiffs permission to access its computer systems and electronic communications.
  4. Defendant committed overt tortious and unlawful acts by using hacked usemames and passwords to impermissibly obtain access to Plaintiffs protected computer systems and electronic communications.

As a proximate result of this conspiracy, Plaintiff has been damaged, as is more fully alleged above.


  1. Plaintiff hereby demands a jury trial in this case.


WHEREFORE, Plaintiff respectfully prays judgment and relief against Defendant as follo ws:

  1. Judgment against Defendant that he or she has committed prohibited interception of Plaintiffs electronic communications pursuant to Minn. Stat. § 626A.02;
  2. Judgment in favor of the Plaintiff against the Defendant for actual damages or statutory damages pursuant to Minn. Stat. § 626A.02 and common law, at the election of Plaintiff, in an amount in excess of$IOO,OOO to be ascertained at trial;
  3. On Count II, an order that Defendant is jointly and severally liable to the Plaintiff in the full amount of Judgment on the basis of a common law claim of civil conspiracy;
  4. Judgment in favor of Plaintiff against the Defendant awarding the Plaintiff attorneys’ fees, litigation expenses (including fees and costs of expert witnesses), and other costs of this action; and
  5. Judgment in favor of the Plaintiff against Defendant, awarding Plaintiff declaratory and injunctive or other equitable relief as may be just and warranted.

Respectfully submitted,

Guava LLC

DATED: October 5, 2012


Michael K. Dugas
Bar No. 0392158
Alpha Law Firm LLC
900 IDS Center
80 South 8th Street Minneapolis, MN 55402
Telephone: (415) 325 – 5900
Attorney for Plaintiff