Months after commercial real estate data company Reis sued ATCO Properties & Management for stealing hundreds of reports from the company’s website without paying, a judge has rejected ATCO’s motion to dismiss the suit.
In March of this year, Reis filed a complaint in New York Supreme Court alleging that ATCO had accessed and downloaded at least 359 reports from the Reis website, using login usernames and passwords that were not their own.
Reis alleged common law fraud, breach of contract, and unjust enrichment/quantum meruit in its suit against ATCO. Last week, Judge Andrew Borrok denied a motion to dismiss the suit brought by ATCO Properties.
The complaint alleged that beginning in 2010, ATCO used login credentials that belonged to accounting giant Ernst & Young, a paying customer of Reis, to access the company’s database and download 359 Reis reports. Reis alleged that 117 of those reports were downloaded within the six year period prior to filing the complaint, and had a retail value of $49,868. The other 242 reports were downloaded between 2010 and 2012 and had a retail value of $75,510, according to the complaint.
ATCO Properties is being represented by real estate attorney Adam Leitman Bailey, who put the blame on a “renegade” former intern at the company.
“If an intern stole anything, ATCO had no idea of it,” said Bailey. “The decision is just the very beginning of the case. We believe we will prevail, or at least get to the bottom of exactly what this intern did or did not do.”
In its motion to dismiss the case, ATCO cited the statute of limitations on the claims, which allegedly took place between 2010 and 2012. Under the Copyright Act, the statute of limitations for a copyright infringement claim is three years, while the statute of limitations for fraud, breach of contract and quantum meruit is six years.
“I want to be very clear that ATCO did nothing wrong,” said Bailey. “The judge made a mistake in the decision by extending the statute of limitations for this part of the case from six years to eight years.”
However, in his decision denying the motion to dismiss, Judge Borrok wrote that the balance of Reis’ claim, which occurred between 2010 and 2012, is based on fraud.
“The statute of limitations for fraud is the greater of six years from the date the cause of action accrued and two years from the time that plaintiff discovered or could have discovered the fraud with reasonable diligence,” wrote Borrok in the decision.
Reis claimed that because ATCO allegedly used a legitimate username and password issued to a different company, Ernst & Young, that Reis did not suspect fraudulent conduct until a later date, which fell under the statute of limitations.
“If there was a renegade intern, ATCO will do the right thing,” said Bailey. “But because the plaintiff missed the statute of limitations the most they would win at trial is a few dollars.”
Reis is represented by Patterson Belknap Webb & Tyler LLP. In statements to Real Estate Weekly, partner and chair of the anti-counterfeiting practice Geoffrey Potter said Reis “aggressively pursues anyone it believes steals its data.”
“The court denied ATCO’s attempt to dismiss the case, ruling against ATCO entirely, and allowing all three of Reis’s claims to proceed, including claims based on contract, unjust enrichment, and fraud,” said Potter. “The court agreed with Reis’s assertion that ATCO’s alleged conduct amounts to ‘egregious conduct necessary to sustain a claim for punitive damages at this stage of the pleadings’ and Reis intends to seek compensatory and punitive damages from ATCO.”
“Reis hopes that this ruling will discourage people from using Reis’s database illegally and encourage those that have been wrongfully accessing the database to come forward and purchase a mutually beneficial license.”