Fink v. Time Warner Cable

Citation
Fink v. Time Warner Cable, 2011 WL 3962607 (S.D.N.Y. Sept. 6, 2011) (full-text).

Factual Background
Plaintiffs Jessica Fink and Brett Noia bring this putative nationwide class action against Time Warner Cable asserting claims for violations of the Computer Fraud and Abuse Act (“CFAA”) as well as a number of state law claims relating to alleged misrepresentations by Defendant concerning the nature of and quality of its internet service. Specifically, Plaintiffs were customers of Time Warner’s “Road Runner” internet service, which is advertised as “up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up.”

Less than pleased with the actual speed of service, Plaintiff’s complaint alleges that Time Warner not only misrepresented the speed and nature of its service, but also that Time Warner was engaged in the practice of “throttling.” While most of Plaintiffs’ claims were dismissed pursuant to Defendant’s motion for judgment on the pleadings, Plaintiffs were allowed to proceed on some of their CFAA claims.

According to the Plaintiffs, they were induced to sign up with Defendant for their internet connection because of the numerous representations regarding the Road Runner service connection speed. Plaintiffs further allege that Defendant’s services are priced at a premium for this increased quality and speed and that had Defendant disclosed that certain restrictions would apply they would not have signed up for the Road Runner service. The practice of “throttling,” as outlined in Plaintiffs’ complaint, is a method of interfering with an internet user’s connection to limit their bandwidth consumption based on certain activities. Computers exchange information on the internet by using Transmission Control Protocol (“TCP”), which delivers a stream of bytes from one program on one computer to another. TCP is commonly used in peer-to-peer (P2P) transmissions and can be blocked by sending “reset packets” that cause inbound internet conections to close down and abort the transmission of P2P content. Plaintiffs allege that Defendant engaged in the practice of sending forged reset packets to computers in order to abort file transfers and reduce bandwidth usage. In particular, Plaintiffs allege that Defendant used this practice to frustrate the use of BitTorrent, as well as sharing and communications software such as Gnutella and Skype.

Appellate Court Proceedings
Under the CFAA, an individual commits computer fraud when she:


 * (A) knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer;
 * (B) intentionally accesses a protected computer without authorization and as a result of such conduct, recklessly causes damage; or
 * (C) intentionally accesses a protected computer without authorization, and as a result of such conduct, causes damage and loss.

According to the complaint, Plaintiff Noia relied on the Road Runner service to upload and download large files for his work as a freelance designer, and to watch licensed media. Due to the consistently low connections speeds he experienced he was regularly forced to rent a computer at Kinkos for work. As a result, Noia claims to have lost job opportunities due to his failure to respond timely to client request and to meet deadlines. Plaintiff Noia estimates these losses for one year to be between $5,500 and $7,000. Plaintiff Noia also tried subscribing to Verizon’s cellular data service to transfer large files, which was priced at $59.99/month. Both named plaintiffs also alleged that Defendant’s service prevented them from using Skype to make and receive free internet phone calls.

Loss
The CFAA defines “loss” as “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue loss, cost incurred or other consequential damages incurred because of interruption of service.” 18 U.S.C.A. § 1030(e)(11). The nature of damages plead by the Plaintiffs are the cost of high-speed internet services allegedly not received, costs to prevent the Defendant’s throttling practice, and the costs of obtaining information elsewhere when they were unable to use their computers for this purpose. The Plaintiffs also plead losses relating to time and effort in assessing “damage” to each computer whose transmissions were interrupted. These alleged damages, however, are outside the scope of those contemplated by the CFAA. The Plaintiffs did not allege that they needed to restore any data or programs or that any information or content was lost as a result of Defendant’s alleged conduct. A “loss” under the CFAA must relate to damaged “data” or “information,” or to a damaged “program” or “system.”

Damage
The CFAA defines damage as “any impairment to the integrity or availability of data, a system, or information.” 18 U.S.C.A. § 1030(e)(8). The complaint alleges that the Plaintiffs were impaired from accessing data to the Defendant’s throttling and that they were similarly impaired from using their computer systems when that use related to transmission online. The Defendant, however, argues that “damage” under the CFAA is limited to damage actually done on the plaintiff’s computer. The district court rejected Defendant’s restrictive reading of the CFAA and determined that no courts in the Second Circuit had adopted such an interpretation of “damage” in this context.

Access
Sections 1030(a)(5)(B) and (a)(5)(C) [above] require a defendant to have “accessed” a plaintiff’s computer. To satisfy this requirement, Plaintiffs allege that Defendant accessed their computers in violation of the statute when they knowingly transmitted the reset packets to their computers in order to terminate the exchange of information over the network. Unlike the terms “loss” and “damage,” the term “access” is not explicitly defined in the CFAA. The Second Circuit has not yet addressed the definition of “access” in the context of the CFAA, however, in light of sister courts’ interpretations, this court determined that a definition of “access” consistent with the term’s standard dictionary definition and common usage is also appropriate in the present case. Because the Plaintiffs had sufficiently plead access under a plain meaning interpretation of the term, and because they had properly plead damages under the CFAA, Defendant’s motion for judgment on the pleadings as to Counts I and II was denied. However, because the types of loss alleged by Plaintiffs fell outside the scope of the CFAA’s intent, Defendant’s motion as to Count III was granted.

New York General Business Law § 349
Plaintiffs assert that Defendant violated New York General Business Law Section 349 by misrepresenting the nature and quality of the Road Runner internet service, which caused injury to Plaintiffs and other consumers. Because the Defendant’s product was allegedly not an “always-on” connection, or “blazing fast,” the Plaintiffs were forced to incur additional costs to supplement the deficient internet connection they actually received. Defendant’s motion to dismiss this claim is based on its characterization of these “representations” as mere puffery.

In order to establish a violation of § 349, “(1) the defendant’s challenged acts or practices must have been directed at consumers, (2) the acts or practices must have been misleading in a material way, and (3) the plaintiff must have sustained injury as a result.” Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir. 2007). It is undisputed in this matter that the first and third elements are satisfied; Defendant’s claims about its service were directed at consumers and Plaintiffs suffered some injury. At issue, however, is whether the allegedly deceptive acts or practices were likely to mislead a reasonable consumer acting reasonably under the circumstances. Ultimately, the court agreed with Defendant’s classification of the advertising terms and phrases such as “always-on,” “blazing fast speed,” and “fastest, easiest way to get online,” as puffery. Statements that cannot reasonably be interpreted as factual claims upon which a reasonable consumer can rely are puffery and therefore not actionable under § 349. The only claim made by Defendant that appears capable of constituting more than puffery is that Road Runner is “up to 3 times the speed of most standard DSL packages and up to 100x faster than dial-up,” however the Plaintiffs did not make any claims that compared Defendant’s services to DSL or other providers; the complaint only alleges that the speed of Road Runner was slower than expected and that Defendant’s interfered with P2P transmissions. As such, Defendant’s motion for judgment on the pleadings as to Plaintiffs’ claim for violation of New York General Business Law § 349 is granted.

Breach of Contract
Plaintiffs allege that they entered into a contract with Defendant to pay monthly fees in exchange for high-speed internet service. They argue that this contract was breached when Defendant interfered with their access to and use of the service through the practice of throttling. While a plaintiff is not required to attached a copy of the alleged contract to their complaint, they must plead with particularly the specific provisions alleged to have been breached by a defendant. Because the Plaintiffs in the present case did not specify which portions of the contract between the parties was breached, the Defendant’s motion for judgment on the pleadings as to Plaintiff’s breach of contract claim was granted. The court similarly dismisses Plaintiff’s claims for unjust enrichment and unfair competition, holding that there could be no finding of deceptive practices where the advertising claims the Plaintiffs relied on for this claim were previously found to be general claims and unmeasurable promises.

The Voluntary Payment Doctrine
The voluntary payment doctrine is a common law doctrine that “bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law.” Dillon v. U-A Columbia Cablevision of Westchester, Inc., 100 N.Y.2d 525, 525, 760 N.Y.S.2d 726, 790 N.E.2d 1155 (1993). Defendant brought a motion for summary judgment based on this doctrine, arguing that Plaintiffs’ claims were barred because they continue to pay for service that was different than what they expected and continued to receive such service. The court rejected Defendant’s argument however, finding that the voluntary payment doctrine does not apply when a plaintiff’s claim is predicated on a lack of full disclosure by defendant.