Shaw v. Toshiba America Information Systems, Inc.
91 F.Supp.2d 926
In the United States District Court for the Eastern District of Texas
Case Number 1:99-CV-0120(TH)
Before District Judge Heartfield
Decided on August 26, 1999

Relevancy of the Case: “Transmission” under Section 1030(a)(5) includes knowingly selling faulty floppy diskette controllers with defective microcodes

Statutes and Provisions Involved

• The Computer Fraud and Abuse Act, 18 U.S.C. § 1030
• The Federal Rules of Civil Procedure, 1938 (Rule 56)

Relevant Facts of the Case

• On March 05, 1999, the plaintiff and C.D. Moon filed this class-action suit against Toshiba and NEC Electronics, Inc (NECEL).
• The plaintiffs allege that the defendants’ floppy diskette controllers (FDCs) are faulty. Their FDCs fail to detect the error, resulting in the storage of corrupt data or the destruction of data without the user’s knowledge. In the case of multi-tasking computers, faulty FDCs might write data in the wrong place. Moreover, it can add data on top of other data which gets overwritten.
• The defendants individually filed their motions for summary judgment in July. They submitted that there is no transmission of code. Toshiba stated that the plaintiff cannot seek injunctive relief for a benefit that can only be utilised by future Toshita buyers.

Prominent Arguments by the Counsels

• The plaintiff’s counsel emphasised that the defendants were still transmitting microcodes or instructions contained in FDCs. The defendants knew this would cause the loss and corruption of data on computers used in interstate commerce. Each sale of a Toshita computer is an example of knowing the transmission of this defective FDC to another consumer.
• The defendant’s counsel, appearing for Toshiba, submitted that the plaintiffs did not specify which of the seven subsections of Section 1030 the defendants allegedly violated. Moreover, Congress never intended to reach manufacturers; CFAA mainly focuses on criminalising computer hacking.

Opinion of the Bench

• A review of Section 1030 and the plaintiff’s class complaint indicates a violation of Section 1030(a)(5)(A).
• There are three possibilities concerning interpreting the word transmission under Section 1030. These are inter-computer transfer of code, intra-computer transfer of code, and marketplace transfer of code.
• The court relied on the judgments in North Texas Preventing Imaging v. Eisenberg (1996 WL 1359212) and Gomar Manufacturing Company v. Novelli (C.A. Number 96-4000) to construe the interpretation of the word transmission.
• The defendants’ motions endorse an overly restrictive view of Section 1030. Toshiba’s dominance in the computer market ensures the plaintiff’s exposure to the effects of faulty data generated by FDCs.

Final Decision

• The court denied NECEL’s motion for summary judgment and Toshita’s motion for partial summary judgment.