Cullen, who is deaf, signed up for Netflix in May 2009, initially for the unlimited 3 DVD plan but later downgraded. In February 2011, Netflix’s Chief Product Officer, Neil Hunt, posted a blog entry on Netflix’s site stating that “more than 3,500 TV episodes and movies have subtitles available, representing about 30% of viewing.” He added, “More subtitles are being added every week and we expect to get to 80% viewing coverage by the end of 2011....”
In February 2012, Hunt posted another entry stating, “In mid December we reached our captioning goal for 2011, when more than 80% of the hours streamed in the U.S. were of content with captions or subtitles available.” Moreover, he stated, “Our goal is to provide more and more content with captions; however, viewers should expect the gap on the last 20% to narrow more slowly than in 2011, since it includes a large number of titles that are rarely watched, so each hour of captioning added adds less and less to the overall metric.” In the comments, Hunt engaged with Mike Chapman, who said: “NETFLIX LIES! I just re-crunched my Netflix Captioning Stats page and as of today, if you count Number of Movies + Number of TV Episodes, the count is only 51.73% of titles with added captions. If you count MINUTES of programming, that number DROPS to 46.37%. BOTH stats are no where near the 80% number. Where is the data that this *0% number comes from?” Hunt wrote, “The 80% is based on the content that people actually watch, and my specific language is precise and correct: ‘more than 80% of the hours streamed in the U.S. were of content with captions or subtitles available’ because we have focused our effort on the content that gets a lot of viewing.” Chapman didn’t like his math and argued that if a very popular movie was captioned and a relatively unpopular movie was uncaptioned, together they should count as 50% captioned even if the percentage of hours of captioned content watched was large.
Cullen brought the usual California claims, alleging that Netflix’s statements were false/misleading to deaf people. First, the court found that he hadn’t plausibly alleged standing in the form of lost money or property. He alleged that he maintained his subscription rather than terminating it in reliance on Hunt’s representations. But, because his claims sounded in fraud, he needed to plead actual reliance with particularity (whatever that means). His complaint alleged only that Hunt’s statement was “an important and substantial factor” in convincing him to stick with Netflix and that he “considered” terminating his subscription. Unsubstantiated assertions (I didn’t realize that statements about the plaintiff’s intent had to be substantiated for purposes of a motion to dismiss!) that he would have quit absent Hunt’s statements along with more equivocal statements of reliance led the court to find that Cullen lacked standing.
Moreover, the court thought that the timeline made Cullen’s claims implausible. Cullen alleged that he was aware of Netflix’s initial paucity of captioned content, and he sued in March 2011, not three weeks after the February 2011 blog post. That just wasn’t enough time for him to plausibly have relied.
In addition, he failed to state a claim under Rule 9(b). He calculated the percentage of online streaming content by the number of works with closed captioning. Netflix calculated it by percentage of content actually streamed. Cullen argued that this was deceptive, but the court disagreed as a matter of law. The language in the blog posts discussed “viewing” and “viewing coverage.” This wasn’t alleged to be false. And no reasonable consumer could be deceived. The standard, likely deception, requires more than a mere possibility that an ad might conceivably be misunderstood by a few consumers. The complaint didn’t plead more than conclusory assertions of misleadingness and Cullen’s own interpretations.
The court was equally unimpressed with Cullen’s argument that Netflix’s conduct was “unfair” to deaf consumers because the DVD-by-mail plans are more expensive than the streaming plans. But he didn’t allege that the harm outweighed the utility of the charges such that the different price was immoral or unscrupulous, as required to state a claim.