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Southwest Airlines Co. v. Boardfirst LLC

Civ. Act. No. 3:06-CV-0891-B (N.D. Texas, September 12, 2007)

Commercial Use Of Website Violates Enforceable Browsewrap Agreement

Finding defendant Boardfirst violated the terms of a browsewrap agreement entered into by its use of plaintiff Southwest Airlines’ website, the Court issued a permanent injunction, enjoining Boardfirst from accessing Southwest Airlines’ website on behalf of its customers to obtain boarding passes.  Southwest Airlines’ passengers engaged Boardfirst to obtain such boarding passes in the hopes of getting better seat assignments on Southwest Airlines flights.  Southwest Airlines has no assigned seating.  Those passengers who are the first to seek boarding passes within the designated time period are awarded “A” boarding passes, which, in turn, allow them to board the plane, and select their seat, first.  In reaching this result, the Court held that Boardfirst had the requisite knowledge that its use of plaintiff’s site would form a valid browsewrap contract by virtue, inter alia, of its receipt of cease and desist letters from Southwest Airlines apprising it of that fact.

The Court denied so much of Southwest Airline’s motion for summary judgment which sought to hold Boardfirst liable for violating of the Computer Fraud and Abuse Act, 18 U.S.C. Section 1030.  The Court held that issues of fact as to whether Southwest Airlines sustained the injury needed to sustain such a claim precluded an award of summary judgment.  The Court further held that it could not, at this time, determine whether Boardfirst accessed Southwest Airline’s site “without authorization” or in excess of authorization, an additional prerequisite to a CFAA claim.

Finally, the Court found that Boardfirst’s conduct violated Section 33.02 of the Texas Penal code, which makes it an offense to “knowingly access a computer network, or computer system without the effective consent of the owner.”  The Court reserved for trial the issue of whether such violation caused Southwest Airlines recoverable damages.

Defendant Accesses Southwest’s Site To Obtain Better Boarding Passes For Passengers

Plaintiff Southwest Airlines does not provide assigned seats to its passengers.  Nor does it offer fee-differentiated service class options.  Rather, it maintains an “open seating” policy, pursuant to which passengers who receive “A” boarding passes are permitted to board the plane first, passengers who receive a “B” boarding pass board second, and those who receive a “C” boarding pass board last.  Passengers can obtain a boarding pass by checking in with Southwest Airlines within 24 hours of departure.  The first 45 passengers who check-in during this time period receive an “A” boarding pass.  The remainder receive “B” or “C” passes on a first-come, first serve basis.  No additional charge is imposed for an “A” boarding pass.

Sensing a business opportunity, defendant Boardfirst sought to assist Southwest Airlines’ passengers in securing “A” Boarding passes.  Boardfirst offered to act as the agent for a Southwest Airlines passenger, and apply for his or her boarding pass via Southwest Airline’s website.  If Boardfirst, by its efforts on behalf of a passenger, obtained an “A” boarding pass, it charged the passenger a $5 fee.  No charge was imposed if an “A” boarding pass was not secured.

Southwest Airlines objected to this practice, and advised Boardfirst that its conduct breached the Terms and Conditions governing the use of Southwest Airlines website.  These Terms and Conditions, available via a link at the bottom of the site’s homepage in small black print, provided that “use of the Southwest websites … constitutes acceptance of our Terms and Conditions.”  The Terms initially went on to provide that, apart from approved Southwest Airline travel agents, a user “may use the Southwest web sites and any Company information only for personal, non-commercial purposes …”.  Subsequently, the Terms were amended to expressly prohibit defendant’s activities.  Thus, the Terms provided that “third parties may not use the Southwest websites for the purpose of checking Customers in online or attempting to obtain for them a boarding pass in any certain boarding group.” 

Southwest Airlines sent two cease and desist letters, advising Boardfirst that its conducted violated the website’s Terms and Conditions.  When Boardfirst continued its business use of plaintiff’s site, Southwest Airlines commenced this suit.

Defendant Subject To Binding Browsewrap Contract Based On Use Of Site With Knowledge Of Site’s Terms

The Court, on plaintiff’s motion for summary judgment, held that Boardfirst was subject to a binding browsewrap contract with Southwest Airlines by virtue of its use of the site with knowledge that such use constituted assent to be bound by the site’s Terms.  Browsewrap agreements, noted the Court, “may take various forms but typically … involve a situation where a notice on a website conditions use of the site upon compliance with certain terms or conditions, which may be included on the same page as the notice or accessible via a hyperlink. … A defining feature of a browsewrap license is that it does not require the user to manifest assent to the terms and conditions expressly – the user need not sign a document or click on an “accept” or “I agree” button.  A party instead gives his assent simply by using the website.”

The Court held that “the validity of a browsewrap license turns on whether a website user has actual or constructive knowledge of a site’s terms and conditions prior to using the site. … Where a website fails to provide adequate notice of the terms, and there is no showing of actual or constructive knowledge, browsewraps have been found unenforceable.” 

The Court held that Boardfirst’s continued use of the site with knowledge of the site’s terms and conditions, obtained by virtue of its receipt of the cease and desist letter, constituted assent to be bound thereby, and thus lead to the formation of a binding contract.  Said the Court:

There is no dispute that Boardfirst has had actual knowledge of Southwest’s Terms at least since Kate Bell received from Southwest the December 20, 2005 cease and desist letter in which Southwest informed Bell that the Terms forbid the use of the Southwest website for commercial purposes.  Despite having actual knowledge of the Terms, Boardfirst has continued to use the Southwest site in connection with its business.  In so doing, Boardfirst bound itself to the contractual obligations imposed by the Terms.

The Court held that Boardfirst’s use of the site for commercial purposes, and to obtain boarding passes for Southwest Airline’s passengers, constituted a breach of the site’s Terms and Conditions.  In reaching this result, the Court rejected Boardfirst’s argument that such use was permissible because it was authorized by the passengers.

The Court found that Southwest Airlines adequately demonstrated that it sustained injury as a result of Boardfirst’s activities, which were likely to reduce the number of times Southwest Airlines passengers visited its website.  Such was the case because Boardfirst was visiting Southwest’s website to check-in the passengers in place of the passengers themselves.  This, in turn, was likely to reduce both their purchase of additional products and services from Southwest, and the number of times they viewed the advertisements therefore found on Southwest’s website.  However, because these damages were impossible to quantify, the Court issued a permanent injunction, enjoining Boardfirst from further commercial use of Southwest Airline’s site.

Computer Fraud And Abuse Act

The Court denied so much of plaintiff’s motion for summary judgment that alleged that Boardfirst’s activities constituted a violation of the Computer Fraud and Abuse Act, 18 U.S.C. Section 1030.  To state a violation of Section 1030(a)(2)(c), a plaintiff must show that the defendant “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains [] information from any protected computer if the conduct involved an interstate or foreign communication.”  The Court, at this time, was unwilling to determine whether Boardfirst had accessed the site without authorization, or, instead, had, after legitimately accessing the site, used the information thereon for an improper purpose.  The Court requested further briefing on this issue, and declined to rule on plaintiff’s motion at this time.

The Court also held that issues of fact precluded it from determining whether Southwest Airlines sustained the requisite loss necessary to establish a CFAA claim.  While “investigative and responsive costs fit within the concept of loss as used in the CFAA” the record before the Court did not permit it to determine whether the costs Southwest Airlines claimed to have incurred in those activities were “reasonable.”

Defendant Violates Texas Penal Code Section 33.02(a)

The Court held that Boardfirst’s activities did run afoul of Texas Penal Code Section 33.02(a), which prohibits a person from “knowingly accessing a computer, computer network or computer system without the effective consent of the owner.”  As stated above, the Court determined that Boardfirst used the site for commercial purposes in violation of the site’s terms and conditions.   Because “Boardfirst uses Southwest’s computer ‘for a purpose other than that for which the consent was given’ Boardfirst lacks Southwest’s effect consent in using the site” and thus violated Texas Penal Code Section 33.02(a). 

However, the Court left for trial the determination of the damages Southwest Airlines could recover for such a violation, and whether they included costs incurred in investigating and responding to Boardfirst’s activities.

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