Case3:14-cv-02323-WHA Document78 Filed01/14/15 Page1 of 5

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Judith B. Jennison, Bar No. 165929

JJennison@perkinscoie.com
PERKINS COIE LLP
1201 Third Avenue, Suite 4900
Seattle, WA 98101-3099
Telephone: 206.359.8000
Facsimile: 206.359.9000
Attorneys for Plaintiff
FACEBOOK, INC.

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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FACEBOOK, INC.,
Plaintiff,

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PLAINTIFF FACEBOOK, INC.S BRIEF

IN SUPPORT OF DAMAGES

v.

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Case No. 2014-CV-02323

MARTIN GRUNIN,
Defendant.

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I.

The Court has entered default judgment against defendant Martin Grunin per an order

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Introduction

issued on January 8, 2014 (Order). (Dkt. No. 76.) Pursuant to the Order, plaintiff Facebook,
Inc. now submits this brief and the accompanying sworn declarations of Mat Henley and Judith
B. Jennison identifying the claimed damages and fees sought in its Complaint and Motion for
Default Judgment.
II.

Compensatory Damages

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A.

Breach of Contract

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Facebook seeks damages for Grunins breach of contract. See Order at 5 (finding Grunin

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liable for breach of contract). For the breach of an obligation arising from contract, the measure

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of damages . . . is the amount which will compensate the party aggrieved for all the detriment

proximately caused thereby, or which, in the ordinary course of things, would be likely to result

therefrom. Cal. Civ. Proc. Code 3300. Damages for breach of contract must be certain. Cal.

Civ. Proc. Code 3301 (No damages can be recovered for a breach of contract which are not

clearly ascertainable in both their nature and origin.).

Facebook seeks $88,816.51 in breach of contract damages related to the advertisements

Grunin purchased but for which he has not paid. (Compl. 53, 63); Henley Decl. 10 and

Exhibit C. (This sum does not include the costs for ads purchased under the Thinkmodo and

Imprezzio Marketing accounts referenced in the Complaint. (Compl. 10.) These amounts are

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included in connection with the Fraud claim addressed below.)

Facebook has suffered additional damage as a result of Grunins breach of contract, such

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as its internal costs of identifying and terminating his fake and compromised accounts, and of

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documenting his breaches for preparation of the Complaint. Facebook also suffered damage to its

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relationships with users and business partners as a result of Grunins ads that violated the

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Advertising Guidelines. However, to avoid a lengthy submission to the Court, Facebook has

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chosen to forego these damages in this instance.

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B.

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Facebook seeks damages for Grunins fraud. See Order at 6 (finding Grunin liable for

Fraud

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fraud against Facebook). Facebook may recover the actual, out-of-pocket damages it suffered

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as a result of Grunins fraudulent behavior. Auble v. Pac. Gas & Elec. Co., 55 F. Supp. 2d 1019,

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1022 (N.D. Cal. 1999). These damages are measured as the amount which will compensate for

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all the detriment proximately caused [by the defendants fraud], whether it could have been

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anticipated or not. Therefore, damages are measured as the actual losses suffered because of

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the misrepresentation. Auble, 55 F. Supp. 2d at 1022. Facebook has identified the following

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damages associated with Grunins fraud:

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$116,067.41 associated with Grunins use of Thinkmodo advertising accounts and

Marketing Drives credit line. (Henley Decl. 46.)

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accounts and credit line. Id. 79.

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C.

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18 U.S.C. 1030 et seq. (CFAA), and the California Comprehensive Computer Data Access
and Fraud Act, Cal. Penal Code 502. See Order at 9 (finding Grunin liable for claims under
both statutes). Under the CFAA, Facebook is entitled to recover any loss it has incurred as a
result of Grunins violating behavior. See, e.g., AtPac, Inc. v. Aptitude Solutions, Inc., 730 F.
Supp. 2d 1174, 1185 (E.D. Cal. 2010). These losses include impairment of or damage to the
computer system that was accessed without authorization, and the costs associated with
assessing a hacked system for damage [and] upgrading a systems defenses to prevent future
unauthorized access. Id.; see also Multiven, Inc. v. Cisco Sys., Inc., 725 F. Supp. 2d 887, 89495
(N.D. Cal. 2010) (Costs associated with investigating intrusions into a computer network and
taking subsequent remedial measures are losses within the meaning of the statute.); PNC Mortg.
v. Superior Mortg. Corp., No. CIV.A. 09-5084, 2012 WL 627995, at *4 (E.D. Pa. Feb. 27, 2012).
Under Cal. Penal Code 502, Facebook is similarly entitled to damages resulting from loss
associated with Grunins unlawful behavior. See Cal. Penal Code 502(e)(1).
Facebook seeks $8,516.50 in pre-litigation attorneys fees associated with investigating

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Mr. Grunins activities and sending him cease and desist letters. (Jennison Decl. 68.) 1
In sum, Facebook requests a total of $513,432.91 in compensatory damages for breach of

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Computer Fraud and Abuse Act & California Comprehensive Computer

Data Access and Fraud Act

Facebook seeks damages for Grunins violations of the Computer Fraud and Abuse Act,

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$300,032.49 associated with Grunins use of Imprezzio Marketing advertising

contract, fraud, and CFAA/502 violations.

III.

Punitive Damages
Facebook is also entitled to punitive damages for Grunins fraud. See Cal Code Civ. Proc.

3294(a) (for claim of fraud, in addition to the actual damages, [a plaintiff] may recover

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Facebook would also be entitled to recover the $116,067.41 for the Thinkmodo ads and
$300,032.49 for the Imprezzio Marketing ads as damages for the CFAA/ 502 claims, but does not include
them here because they are already included as damages for Grunins fraud.

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damages for the sake of example and by way of punishing the defendant.). Facebook is also

entitled to punitive and exemplary damages under Cal. Penal Code 502(e)(4) because Grunins

violation included fraudulent behavior. Cal. Penal Code 502(e)(4) (citing Cal Code Civ. Proc.

3294).

Facebook does not know how much money Grunin made as a result of his unlawful

activities (though it was likely significant given the civil and criminal risks Grunin took to get it).

We do know that before this lawsuit was filed, Grunin routinely bragged on the Internet about his

wealth. As set forth in detail in Facebooks Opposition to Motion to Set Aside Default, Dkt. No.

47, Grunin has publicly stated that money drives [him] completely. Opp. to Mot. to Set Aside

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Default at 4. Grunin boasted about purchasing a luxury automobile with cash, keeping a BMW as

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an everyday car, and has posted photos of his Rolex watch, boat, and high-end vacations. Id. at

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45.
Without knowing how much money Grunin made from his illegal activities, it is hard to

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know how much will deter him from doing it again. But we know Grunin does not yet appreciate

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the gravity of what he has done because of the way he has participated in this case. His attempts

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to disavow the authority of the Court and hamper the effective prosecution of this case

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demonstrate he is not taking his actions seriously. For these reasons Facebook requests punitive

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damages of $500,000, an amount roughly equivalent to the compensatory damages Facebook

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seeks.

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IV.

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Attorneys Fees
Cal. Penal Code 502(e)(1) expressly provides for recovery of reasonable attorneys

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fees for claims brought under Cal. Penal Code 502(c). Cal. Penal Code 502(e)(2) (In any

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action brought pursuant to this subdivision the court may award reasonable attorneys fees.).

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Facebook seeks its attorneys fees for work done prior to preparing and litigating the Complaint

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as costs under the CFAA and Cal. Penal Code 502. (See Section II.B above.) This section

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focuses on Attorneys fees sought in connection with the litigation, which includes preparing and

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filing the Complaint, and all subsequent case administration and motion practice. Facebooks

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attorneys fees are more than one would expect in a typical default judgment case because this

case isnt typical: Grunins early representation by non-lawyer Robert Costello, his filing of

bogus, nonsensical documents, his attempt to set aside his default, and ultimately the entry of his

default judgment, all required much more work than if he had not appeared at all.
Facebook has incurred the following attorneys fees and costs:

$317,841.50: Perkins Coies attorneys fees associated with preparing, filing, and

litigating the Complaint and associated settlement negotiations. (Jennison Decl.

918.)

$8,287.61: Litigation costs, including hiring a private investigator to track

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Grunins activities and whereabouts, a messenger, and service of process costs.

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(Jennison Decl. 30.)

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V.

Conclusion
For the foregoing reasons, as well as those stated in the Henley Declaration, the Jennison

Declaration and in Facebooks Motion for Default Judgment and the Courts Order, Facebook
seeks $513,432.91 in compensatory damages, $500,000 in punitive damages and $326,129.11 in
attorneys fees and costs.

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DATED: January 14, 2015

PERKINS COIE LLP

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By:

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/s/ Judith B. Jennison

Judith B. Jennison, Bar No. 165929
JJennison@perkinscoie.com

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Attorneys for Plaintiff
FACEBOOK, INC.

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