Jensen v. Cablevision Sys. Corp.
| Decision Date | 27 September 2017 |
| Docket Number | 2:17-cv-00100 (ADS)(AKT) |
| Parties | PAUL JENSEN, individually and on behalf of all others similarly situated, Plaintiff, v. CABLEVISION SYSTEMS CORPORATION, a Delaware Corporation; ALTICE N.V., and DOES 1 through 100, Inclusive, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
APPEARANCES:
CARNEY BATES & PULLIAM, PLLC
Co-Counsel for the Plaintiff
Little Rock, Arkansas 72201
By: Joseph H. Bates, Esq., Of Counsel
FAIRCHILD & WADE LLP
Co-Counsel for the Plaintiff
Sara D. Avila, Esq., Of Counsel
KU & MUSSMAN, P.A.
Co-Counsel for the Plaintiff
Louis I. Mussman, Esq., Of Counsel
1221 Avenue of the Americas
New York, New York 10020
By: Matthew D. Ingber, Esq., Of Counsel
1999 K Street, N.W.
Washington, DC 20006
By: Archis A. Parasharami, Esq., Of Counsel
The Plaintiff Paul Jensen ("Jensen" or the "Plaintiff") commenced this action individually and on behalf of others similarly situated against the Defendants, Cablevision Systems Corporation ("Cablevision"), and Altice N.V. ("Altice") (collectively the "Defendants") for damages stemming from violations of the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030 and N.Y. Gen. Bus. Law § 349. This case arises from allegations by the Plaintiff that the Defendants have used the Plaintiff's wireless router, which was leased from the Defendants, to broadcast a public Wi-Fi network, without the Plaintiff's authorization. The Plaintiff asserts two bases for this Court's jurisdiction: federal question jurisdiction pursuant to 28 U.S.C. § 1331 and jurisdiction over the state law claim under 28 U.S.C. § 1332(d).
Presently before the Court is a motion by the Defendants, pursuant to Federal Rule of Civil Procedure ("FED. R. CIV. P." or "Rule") 12(b)(1), Rule 12(b)(2) and Rule 12(b)(6) to dismiss the Plaintiff's entire complaint. The Court pauses here to note that the Plaintiff's complaint uses footnotes, which is contrary to this Court's Individual Rule II.A. Notwithstanding this infraction, the Court will consider the Plaintiff's papers in rendering its decision. However, the Court advises the Plaintiff's counsel that any future filings that contain footnotes will not be considered by this Court.
For the following reasons, the Defendants' motion to dismiss pursuant to Rule 12(b)(6) is granted with respect to the Plaintiff's CFAA claims for failure to state a claim. The motion is denied in all other respects.
The following facts are drawn from the Plaintiff's complaint, and for the purposes of the instant motion, are accepted as true.
The Plaintiff is a resident of Brooklyn, New York and a subscriber to Cablevision's private Wi-Fi service, Optimum Online Wi-Fi ("Optimum Online Wi-Fi"). Cablevision provided Jensen a router in conjunction with his purchase of Optimum Online Wi-Fi.
Cablevision is an American corporation, which is incorporated under the laws of the state of Delaware. Cablevision provides Optimum Online Wi-Fi, along with other cable and internet services, to customers in New York, New Jersey, Connecticut and Pennsylvania and is registered with the New York Department of State. Its principle place of business is located at 1111 Stewart Avenue, Bethpage, New York 11714. In June, 2016, Cablevision was acquired by Altice and has since done business in the United States as "Altice USA." Amended Class Action Complaint ¶ 12.
Altice is a Dutch telecommunications company with an international footprint. Its principal place of business is in Amsterdam. Altice "provides and/or oversees" Optimum Online Wi-Fi. Id. ¶ 13.
On June 5, 2015, Cablevision entered into a contract with the Plaintiff to provide Optimum Online Wi-Fi for his residence. As part of that agreement, the Plaintiff leased a wireless routerfrom Cablevision. The Plaintiff had the option to purchase his own wireless router, but chose instead to lease Cablevision's device.
Cablevision's wireless router was used to broadcast Optimum Online Wi-Fi, his personal Wi-Fi network, as provided in his agreement with Cablevision.
This wireless router was also configured to broadcast a "separate, publically accessible" Wi-Fi network ("Optimum Public Wi-Fi"), which became a component, along with other Cablevision wireless routers leased to other customers, of a large-scale, public Wi-Fi network. Amended Class Action Complaint ¶¶ 16, 46. Optimum Public Wi-Fi is accessible to anyone within range of the wireless router and is not password protected. Allegedly, this large-scale, public network is part of a concerted effort by the Defendants to utilize their customer base to compete with cellular networks. The Plaintiff claims that the Defendants are "externaliz[ing] much of the capital and operating costs" of such a network, in order to compensate for the lack of their own network infrastructure. Id. ¶ 16.
According to Jensen, he did not authorize Cablevision to use the wireless router to broadcast Optimum Public Wi-Fi. During installation, Jensen was provided with a sales order which contained a document entitled, "General Terms and Conditions of Service." While this document did not contain any reference to Optimum Public Wi-Fi, it did state:
In addition to these General Terms and Conditions of Service, Subscriber agrees to be bound by the terms of service for the applicable Optimum service as set forth at www.optimum.net, such as Optimum TV, Optimum Online and Optimum Voice, as well as the Cablevision Customer Privacy Notice, as such may be updated from time to time (collectively, the "Terms of Service"), which are incorporated herein by this reference. In the event of any conflict between these Terms and Conditions below and the Terms of Service, the Terms of Service shall control.
Id. ¶ 40 (internal citations omitted).
The "Service Terms & Info," a link of which can be found on the Optimum homepage (www.optimum.net), contains the "Agreement for Optimum Online." The "Agreement for Optimum Online," states, Id. ¶ 43. Cablevision's promotional materials are silent on the topic and its website states that Optimum Public Wi-Fi is broadcast from "shopping centers, major streets, train platforms, parks, marinas, sports fields and more." Id. ¶ 19.
When the Plaintiff learned of the existence of the Optimum Public Wi-Fi, he contacted Cablevision to ask that the feature be disconnected. The Plaintiff was told that the feature could not be turned off, and that he was free to purchase and use his own wireless router if he continued to harbor such concerns. A replacement wireless router would cost the Plaintiff between $50 and $200.
The Plaintiff alleges that the Defendants' actions (1) endanger customers' privacy; (2) transfer costs onto customers, including electricity costs; (3) reduce the speed of customer internet access; and (4) expose customers to increased security risks. Id. ¶ 21.
A study conducted on wireless routers provided by Comcast, a competitor of Cablevision has determined that wireless routers that broadcast a second Wi-Fi network use more electricity than wireless routers that only broadcast a single Wi-Fi network. Id. ¶¶ 26-27. This study used a business wireless router, and concluded that hosting a second Wi-Fi network could cost a customer up to $1.90 per month, based on the average cost of power in the Mid-Atlantic. Alex Gizis, "Is Your Comcast Public Hotspot Costing You Real Money?" Speedify (June 26, 2014) (available at http://speedify.com/blog/featured/comcast-public-hotspot-cost/).
Jensen claims that he has been forced to incur a higher electricity bill as a result of the Defendants' wireless router. He further alleges that his Optimum Online Wi-Fi network has experienced decreased speeds and that the wireless router leased from the Defendants have been exposed to "possible, additional use by unknown third parties" without his knowledge or authorization. Amended Class Action Complaint ¶ 51.
On January 6, 2017, the Plaintiff commenced this action by filing a class action complaint in this Court. The complaint set forth two causes of action: violations of the CFAA, 18 U.S.C. § 1030, and violations of N .Y. General Business Law § 349.
On January 12, 2017, the Plaintiff filed the Amended Class Action Complaint.
On March 27, 2017, the Defendants filed the instant motion to dismiss all of the Plaintiff's claims pursuant to Rule 12(b)(1), Rule 12(b)(2) and Rule 12(b)(6).
On July 6, 2017, the Defendants submitted a Notice of Supplemental Authority regarding the U.S. Supreme Court's decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773, 198 L. Ed. 2d 395 (2017). On July 14, 2017, the Plaintiff filed a response. The Court reviewed both letters.
When a defendant brings a motion to dismiss for lack of subject-matter jurisdiction, it is the plaintiff's burden to establish the existence of subject-matter jurisdiction by a preponderance of the evidence. Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd, 561 U.S. 247, 130 S. Ct. 2869, 177 L. Ed. 2d 535 (2010) (citing Makarova v. United States, 201F.3d 110, 113 (2d Cir. 2000)); Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005) (citing ...
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