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.
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