Don' Mess with Texas, unless you are the FBI...
The company, Liquid Motors, provides inventory management and marketing services to national automobile dealers, such as AutoNation. It was one of about 50 companies put out of business last week when the FBI seized the servers at Core IP Networks, one of two data centers and co-location facilities raided by the FBI's Dallas office in the last month in an investigation into VoIP fraud.
Although Liquid Motors was not a target of the investigation, the FBI took all of the company's servers and backup tapes in the raid.
"As a result, Liquid Motors, Inc. has been put out of business and is in breach of its contracts with automobile dealers throughout the country," the company wrote in its application for the restraining order (.pdf). "Those automobile dealerships ... may hold Liquid Motors responsible for all of their lost business, and may terminate their contracts with Liquid Motors, causing permanent and irreparable harm ... for which there is no adequate remedy at law."
The company noted that it maintained duplicate servers to prevent outages and housed those servers in a building "on a five power grid with a generator that can last for thirty days."
Only "a bomb to the building" or, as it happens, an FBI raid, could cause the servers to go down, the company stated.
The U.S. District Court for the Northern District of Texas denied the request (.pdf), however, after holding an ex parte discussion with FBI Special Agent Allyn Lynd, who led the raid. Lynd told the court that the owner of the co-location facility was being investigated for fraud and that even though Liquid Motors was not part of the investigation, its equipment might have been used to facilitate fraud by others.
The court found that the FBI had probable cause for seizing the equipment.
The FBI told the court it would work over the weekend to create mirror images of the data from Liquid Motors' servers and provide it to the company by Monday of this week. In order to do so, the FBI asked the company to provide the agency with blank hard drives for copying the data.
Mark Burack, executive vice president for Liquid Motors, said his company did get its data back after supplying the FBI with hard drives, but that the company had to buy all new servers to restore its business.
"We had to replace everything," he said, noting that they won't know how much the raid cost them financially for a while. He said the company has more than 750 customers who were affected by the raid, and that they're working on restoring service to those customers.
When asked if his company planned to pursue legal action further he replied, "I don't know. There are a lot of lawyers involved. We're backed by some very large investors so we just defer everything to them."
He added that he respects the job the FBI does.
"Catching bad guys is important," he said. "We support them and we know they have a tough job. And sometimes innocent people get hurt."