Injunction Denied in Rental Computer 'Spyware' Case

     ERIE, Pa. (CN) - A federal judge denied a preliminary injunction sought by a Wyoming couple who claim Aaron's, one of the nation's largest rental chains, surveiled customers through spyware on rent-to-own computers.
     Crystal and Brian Byrd, on behalf of a proposed class of consumers who rented or bought computers from Atlanta-based Aaron's, asked that the company be ordered to stop using certain features on the software at issue, PC Rental Agent, while the dispute plays out in court.
     The Byrds say the spyware is part of the software's Detective Mode, which Aaron's uses surreptitiously and illegally to take screenshots, capture keystrokes and other information from consumers, presumably to deal with customers who are delinquent on rental payments.
     In mid-June, a magistrate said the request should be denied, finding that the Byrds failed to prove that the class faces irreparable future harm in the absence of an injunction.
     Any harm the Byrds may have suffered can be redressed at trial, U.S. Magistrate Susan Baxter found.
     "Evidence in support of the irreparable harm prong is scant, at best. The evidentiary record before this Court reflects that plaintiffs' [rented] laptop computer is no longer in their possession. Hence, plaintiffs are not presently suffering any harm necessary to support the requested relief of the suspension of the Detective Mode of the PC Rental Agent," Baxter wrote.
     "It is purely conjecture that the other members of the putative class will be subjected to remote access of personal information," she added.
     While the proposed class members, unlike the Byrds, may still have their rented computers, testimony from the co-owner of the company that developed PC Rental Agent, defendant DesignerWare, indicates that use of the software's Detective Mode is more limited than the plaintiffs contend, Baxter found.
     U.S. District Judge Sean McLaughlin agreed with that finding, and on July 8 denied the Byrds' request for an injunction.
     That decision was music to DesignerWare's ears, as it had said that such an injunction "would be catastrophic to this small, Erie-based business that has already lost approximately 30 percent of its revenue since plaintiffs' complaint was filed."
     In an interview with Courthouse News, DesignerWare's attorney David White of Pittsburgh-based Burns White, said: "We had customers who were canceling their use of PC Rental because of the misinformation that was being spread by the plaintiff and we were fearful ... [that it] could have completely put our client out of business."
     He added: "Once Judge Baxter was able to hear the whole story and understood the true facts she reached the conclusion ... essentially validating the legality of our software. ...
     "Very implicit in her opinion is that the DesignerWare software does not violate any of the wiretap laws."
     White noted that his client is not privy to any information allegedly captured by PC Rental Agent.
     "DesignerWare doesn't get it at all. It goes to the franchisee stores."
     DesignerWare employees "don't see it, look at it, or access it at all," he said.
     "I think the fact that there were no objections or appeals [to Baxter's analysis] speaks volumes," he said.
     At an evidentiary hearing on May 25, an attorney for the Byrds claimed that the existence of irreparable harm was virtually undisputed: "I can't imagine anything more obvious than this prong. You have literally thousands of people who are sitting at their computers right now who have this program on it where Detective Mode may be enabled today, tomorrow, at any time, and this information, private information, can flow from their kitchen table through the server in Erie and back to people who they don't know in these local [Aaron's] stores. I don't know when a trial will be set in this case, but I do know that ... there will be irreparable harm if this information, private information will be distributed," the attorney said, according to Baxter.
In their May 9 request for an injunction, the Byrds accused the defendants of destroying evidence by "systematically removing Web postings, deactivating and removing the PC Rental Agent, and perhaps deactivating and wiping clean the PC Rental Agent server itself ... without notice to plaintiffs or their counsel."
     They asked the court to enjoin spoliation of evidence, and prohibit the defendants from contacting proposed class members about the lawsuit. They claimed they had "become aware that Aaron's has been contacting customers through 'robo calls' to tell them that plaintiffs' allegations regarding Aaron's have no merit."
     They said the court should enter an order similar to one entered in another high-profile case involving allegations of illegal online surveillance.
     In Robbins v. Lower Merion School District, an order was entered barring the school district from capturing screenshots and taking Webcam photos of students from school-issued laptops while the case proceeded.
     As in Robbins, where the school district was prohibited from contacting proposed class members and from destroying evidence, the defendants in this case should be subject to a similar order, the Byrds said.
     The parties in Robbins stipulated to that order, the couple's attorneys said.
     "In the absence of such a stipulation, which would have been reasonable for defendants to have agreed to, it must now be ordered," the attorneys said.
     Before the release of Magistrate Baxter's analysis, however, the parties resolved their dispute over preservation of evidence and contact with the proposed class. DesignerWare agreed to refrain from contacting those people, Baxter said.
     The company has called the lawsuit "completely and unequivocally without merit," adding that "the plaintiffs' continued use of the terms 'spy,' 'spyware,' or 'tracking' is patently misleading."
     It's quite simple, the company's attorneys said: "There is no software, program, or device installed on the rental ... computer designed to allow any defendants to 'spy on' or 'track'" Aaron's customers.
     They claim the Byrds "have continuously misconstrued and misrepresented the facts of this case to the court" and "have recklessly made allegations without being in possession of the facts."
     They added that without "even a basic understanding of all the facts" and in what is nothing more than a "scare tactic," the Byrds have disseminated their misportrayal among the media.
     Nonsense, attorneys for the Byrds responded.
     "If this were truly the case ... DesignerWare would have ... [produced] an affidavit from someone who had personal knowledge to refute plaintiffs' claims."
     "Although bellicose in its prose and belligerent in its denials, DesignerWare conspicuously fails to dispute or even acknowledge the central facts alleged by plaintiffs: PC Rental Agent software surreptitiously collects private and protected data and communications from Aaron's RTO [rent-to-own] customers" by capturing keystrokes and screenshots, and by taking Webcam photos.
     "Indeed, DesignerWare provides not a shred of evidence - not an affidavit, not an owner's manual, not a text file, not anything - that controverts plaintiffs' evidence."
     DesignerWare said the PC Rental Agent is designed to protect renters' privacy through a single-button function, a "kill-switch," that purges personal information from the computer after it's returned to an Aaron's franchise.
     A Monday filing by defendant Aspen Way Enterprises, a Montana-based Aaron's franchisee that operates businesses in Wyoming, accuses the Byrds of "forum shopping" and asks the court to dismiss Aspen Way from the case.
     "The Byrds are Wyoming residents suing a Montana corporation for acts and damages occurring in Wyoming. It is as simple as that," Aspen Way said.
     An attorney for the Byrds did not immediately respond to a request for comment.