Shaw v. Toshiba America Information Systems, Inc.

• Decision Date: 26 August 1999
• Docket Number: No. 1:99-CV-0120(TH).,1:99-CV-0120(TH).
• Citation: 91 F.Supp.2d 926
• Parties: Ethan SHAW, and Clive D. Moon, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. TOSHIBA AMERICA INFORMATION SYSTEMS, INC., NEC Electronics, Inc., Toshiba Corporation, Toshiba America, Inc., and Toshiba America Electronic, Components, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Texas

Page 926

91 F.Supp.2d 926

Ethan SHAW, and Clive D. Moon, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. TOSHIBA AMERICA INFORMATION SYSTEMS, INC., NEC Electronics, Inc., Toshiba Corporation, Toshiba America, Inc., and Toshiba America Electronic, Components, Inc., Defendants.

No. 1:99-CV-0120(TH).

United States District Court, E.D. Texas, Beaumont Division.

August 26, 1999.

Hubert Oxford, III, Benckenstein & Oxford, Beaumont, TX, Gilbert Irvine Low, Orgain Bell & Tucker, Beaumont, TX, Charles Silver, Austin, TX, L. DeWayne Layfield, Beaumont, TX, for Ethan Shaw, Clive D. Moon.

Walter Joshua Crawford, Jr., Crawford & Olesen LLP, Beaumont, TX, Reagan Mark Brown, Frank G. Jones, David Jack Levy, Fulbright & Jaworski, Houston, TX, for Toshiba American Information Systems Inc., Toshiba Corp., Toshiba America Inc., Toshiba America Electronics Components Inc.

Walter B. Stuart, IV, Allan VanFleet, Erica L. Krennerich, Jason M. Powers, Vinson & Elkins, Houston, TX, Lawrence Louis Germer, Germer & Gertz, Beaumont, TX, for NEC Electronics Inc.

Jeffrey L. Simpton, Office of Atty. Gen., Sacramento, CA, for State of California.

Michael Rosenblat, Office of Ill. Atty. Gen., Chicago, IL, for State of Illinois.

John Mark Kraus, Asst. Atty. Gen., Dept. of Legal Affairs, Tallahassee, FL, for State of Florida.

Mike Bradford, U.S. Atty., Beaumont, TX, for U.S.

Joseph Charles Blanks, Doucette, TX, for Laura Bates.

Benjamin E. Baker, Jr., John P. Willis, IV, M Clay Alspaugh, Hogan Smith & Alspaugh, Birmingham, AL, for Biehl & Co., Inc.

Lawrence Smith, Joliet, IL, pro se.

Dawn L. Phillips-Hertz, Troy, MI, pro se.

Daniel R Castro, Watt Castro & Houser, Austin, TX, for Maxtor Corp.

Charles M. Thompson, Kearney Dee Hutsler, Thompson Hutsler Law Firm, Birmingham, AL, for J T Karney, Southern Network Services Inc.

Mark Allen Lindow, Lindow & Treat, San Antonio, TX, for Lindow & Treat LLP.

W. Wilson Randall, Susman Godfrey LLP, Houston, TX, for Dana Timaeus, Robert Rose.

Craig Randal Lively, Harris Lively & Duesler, Beaumont, TX, Frank H. Tomlinson, Pritchard McCall & Jones, Birmingham, AL, for Lindsey F. Tomlinson.

Craig Randal Lively, Harris Lively & Duesler, Beaumont, TX, Edward Cochran, Cochran & Cochran, Shaker Heights, OH, for Dan Gray, John Glase, Evan Morse, Betsy Melziner.

Brent M. Langdon, Holman & Langdon LLP, Texarkana, TX, Thomas C. Cronin, Robert P. Cummins, Cummins & Cronin, Chicago, IL, for Deborah Cummins, Frank Pedote.

R Stephen Griffis, Hooper & Griffis, Birmingham, AL, for David Skinner.

Laurence W. Schonbrun, Office of Laurence Schonbrun, Berkeley, CA, for Robert Demyanovich.

William H. Yoes, Law Offices of William H. Yoes, Beaumont, TX, Robert W. Bishop, Pamela G. Wilson, Bishop & Wilson, Louisville, KY, for Peyton T. Talbott, III.

ORDER DENYING MOTIONS FOR PARTIAL SUMMARY JUDGMENT

HEARTFIELD, District Judge.

Before this Court are the Motion by NEC Electronics, Inc. for Summary Judgment on Plaintiffs' Claims Under 18 U.S.C. § 1030 [56] and Defendant Toshiba America Information Systems, Inc.'s Motion for Partial Summary Judgment on 18 U.S.C. § 1030 and Brief in Support [58]. Having considered the motions, the responses, the replies to the responses, and the arguments of counsel, this Court DENIES the Motion by NEC Electronics, Inc. for Summary Judgment on Plaintiffs' Claims Under 18 U.S.C. § 1030 [56] and Defendant Toshiba America Information Systems, Inc.'s Motion for Partial Summary Judgment on 18 U.S.C. § 1030 and Brief in Support [58].

1. Facts and Procedural History

On March 5, 1999 Ethan Shaw and Clive D. Moon (collectively referred to as "Plaintiffs") filed this class-action complaint on behalf of themselves and all others similarly situated against Toshiba America Information Systems, Inc. ("Toshiba") and NEC Electronics, Inc. ("NECEL"). Why? Plaintiffs allege Toshiba and NECEL designed, manufactured, created, distributed, sold, transmitted, and marketed faulty, floppy-diskette controllers ("FDC's"). How are they faulty? "An FDC designed and manufactured pursuant to relevant specifications will detect data errors and allow the control program to rewrite the affected data correctly. The FDC's at issue in this case, instead, fail to detect the error, resulting in the storage of corrupt data or the destruction of data without the user's knowledge." Plaintiffs' Second Amended Class Complaint [97] 8. Plaintiffs dub this a "boundary error." Still a bit vague?

A properly designed and manufactured FDC that meets manufacturer specifications, however, will detect the boundary error conditions and assert an error status, which triggers the control program to rewrite the affected data correctly. Because of the defective microcode, Defendants' defective FDC's instead verify the erroneous data as correct without an error status, resulting in the storage of corrupt data or the destruction of data without notice to the control program or operating system and without the operator's knowledge.

Local are network interface cards and sound cards are two examples of common DMA devices.

If a defective FDC is made to wait for data a few microseconds too long, because of competition for DMA, the defective FDC can cause corruption of data written to the attached device. If the wait for data is longer, a defective FDC can write the delayed data as the first byte¹ of the next physically adjacent data sector of a floppy diskette and destroy or "zero out" the remainder of data in that sector—all without reporting any error or notifying the control program or computer operator that data has been corrupted or destroyed.²

Id. at 9-10. Indeed, the possibility of this boundary-error problem occurring increased when computers became capable of "multi-tasking"—that is, capable of performing several computer tasks at the same time. So Plaintiffs allege that if a computer is doing a bunch of stuff at the same time the faulty FDC might stick the data in the wrong place; and it might stick it on top of other data which, consequently, gets messed up by the misplaced, overwritten data. Finally, all of this data garbling goes undetected by the allegedly faulty FDC's; this, in turn, means it goes undetected by the person sitting in front of the computer. "Therefore, Defendants' FDC's are not capable of notifying the control program of data corruption. Worse yet, defective FDC's write corrupted data to the disk or other storage device and report to the computer operator that the data transfer was performed successfully." Id. at 10.

On July 15, 1999 NECEL filed its Motion by NEC Electronics, Inc. for Summary Judgment on Plaintiffs' Claims Under 18 U.S.C. § 1030 ("NECEL's Motion for Summary Judgment") [56] and Toshiba filed Defendant Toshiba America Information Systems, Inc.'s Motion for Partial Summary Judgment on 18 U.S.C. § 1030 and Brief in Support ("Toshiba's Motion for Summary Judgment") [58].³ In these motions, NECEL and Toshiba urge this Court to grant partial summary judgment as to Plaintiffs' claims under 18 U.S.C. § 1030 since there is no "transmission" of code. In the alternative, Toshiba urges this Court to grant partial summary judgment as to Plaintiffs' claims under 18 U.S.C. § 1030 since Plaintiffs—as current owners of Toshiba's computers—are not entitled to injunctive relief that would theoretically benefit future buyers of Toshiba's computers. Toshiba's Motion for Summary Judgment [58] 1-2. Finally, NECEL also urges it is entitled to summary judgment since "[t]here simply is no connection between Plaintiffs and NECEL on which to base liability."⁴ Toshiba's Motion for Summary Judgment [56] 2 (emphasis in original). NECEL's and Toshiba's motions endorse an overly restrictive view of 18 U.S.C. § 1030 and a misunderstanding of the standing requirement for the facts presented;⁵ and NECEL's argument that there is "no connection" between it and the Plaintiffs is not entirely correct. So, the motions are denied.

2. Summary Judgment Standard

Rule 56(b) of the Federal Rules of Civil Procedure says: "A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part thereof." Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Furthermore, Rule 56(c) says, in part: "The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Thus, summary judgment is proper when, after a reasonable period for discovery, one party is unable to show a genuine issue as to a material fact on which he will bear the burden of proof at trial, provided that judgment against him is appropriate as a matter of law. Nebraska v. Wyoming, 507 U.S. 584, 589, 113 S.Ct. 1689, 1694, 123 L.Ed.2d 317 (1993); Celotex, 477 U.S. at 322, 106 S.Ct. 2548. The moving party need not negate the elements of the nonmoving party's case. Id. at 323, 106 S.Ct. 2548; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc) (citing Celotex, 477 U.S. at 323, 106 S.Ct. 2548, and Lujan v. National Wildlife Fed'n., 497 U.S. 871, 888, 110 S.Ct. 3177, 3188-89, 111 L.Ed.2d 695 (1990)). Rather, the moving party need only "demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

The non-moving party does not overcome the absence of a genuine issue of material fact by simply "creating some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986), by making "conclusory allegations," Lujan, 497 U.S. at 871-73, 110 S.Ct. 3177, by presenting ...