In re Sling Media Slingbox Advertising Litigation
202 F. Supp. 3d 352
S.D.N.Y.2016Background
- Plaintiffs (New York residents) sued Sling Media in a putative class action alleging Slingbox purchasers were not told Sling would later insert its own ads into the Slingbox viewing experience; claims asserted under California UCL/FAL/CLRA and consumer-protection laws of other states, including NY GBL § 349.
- Slingbox is hardware paired with licensed software (EULA). Plaintiffs purchased the hardware in New York and licensed the software; the EULA states California law governs but does not mention advertising.
- Beginning in late 2014 / by March 17, 2015 Sling began delivering two types of ads through the Sling system: short skippable startup video ads and non-intrusive banner ads during viewing; an "ad-free" paid app option existed.
- Plaintiffs allege omission-based deceptive practice: Sling knew it would add ads but failed to disclose that to purchasers, injuring consumers and diminishing product value; they seek injunction and damages.
- Sling moved to dismiss under Rule 12(b)(6). The court applied New York choice-of-law rules, held New York law governs the named plaintiffs’ consumer claims, and dismissed the complaint for failure to state a claim, with leave to seek amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law | EULA choice-of-law (California) should govern consumer claims | New York choice-of-law governs purchasers who bought in NY; EULA language only governs contract interpretation | NY law applies to plaintiffs’ consumer-protection claims; EULA clause doesn’t reach tort/consumer claims |
| Whether plaintiffs pleaded a deceptive act (affirmative misrepresentation) | Sling’s website/promotional language misled consumers that product delivers the home TV experience | Complaint fails to identify any specific misleading affirmative statements about advertising | No plausible allegation of actionable affirmative misrepresentation; claim dismissed |
| Whether omission claim pleaded knowledge/materiality | Sling knew it would add ads and withheld that material fact, affecting purchase decisions | Complaint lacks facts showing Sling had a plan at purchase, or that omission was material to reasonable consumers | Plaintiffs failed to plausibly allege Sling knew of ad plan at purchase or that omission was material; claim dismissed |
| Whether plaintiffs alleged actual injury under NY GBL § 349 | Exposure to unwanted ads impaired product value and caused injury | Plaintiffs still can use Slingbox; allegations do not show cognizable actual injury or pecuniary harm | No adequate allegation of actual injury; § 349 claim fails |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleadings)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard and pleading requirements)
- Terwilliger v. Terwilliger, 206 F.3d 240 (2d Cir. 2000) (contractual choice-of-law provisions generally enforceable)
- Krock v. Lipsay, 97 F.3d 640 (2d Cir. 1996) (scope of choice-of-law clause must be broad to cover tort claims)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (N.Y. 1995) (omission actionable where defendant possessed material information and failed to disclose)
- Stutman v. Chemical Bank, 95 N.Y.2d 24 (N.Y. 2000) (§ 349 requires proof of actual injury)