into the subscriber's converter. (Second Amended Complaint P14). The descrambler decodes the scrambled service so that the programming selected and purchased can be viewed clearly on a subscriber's television set. Programming services not purchased will continue to be scrambled and therefore will be unviewable on the subscriber's television set. (Second Amended Complaint P14).
SIC alleges that the Defendants have engaged in an ongoing scheme to sell and/or illegally modify cable television decoders for profit. SIC contends that the Defendants have sold the illegal equipment with the specific intent that the devices be used to decode scrambled programming transmitted through the network of cable wiring from SIC's reception facilities to subscribers homes, thus allowing dishonest customers of Defendants to receive SIC's scrambled programming services without payment. Defendants' "pirate" decoders cannot readily be detected by SIC once connected. (Second Amended Complaint P23).
On June 12, 1995, SIC filed its initial complaint against Defendants, Cableworks, Inc., James Hamada and Irving Yellen, for violations of the Federal Communications Act, as amended by the Cable Communications Policy Act of 1984, and conversion. SIC filed an amended complaint on December 7, 1995, correcting the spelling of one defendant's name. On April 30, 1997, SIC filed a second amended complaint, adding Andrew Christopher ("Christopher") as an additional defendant. Defendant, Christopher, has now moved to dismiss SIC's claims against him contained in the second amended complaint.
II. Standard for Dismissal Pursuant to Rule 12(b)(6)
When considering a defendant's motion to dismiss the complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6), the Court must accept all well pleaded allegations in the complaint as true and view them in a light most favorable to the plaintiff. Schrob v. Catterson, 948 F.2d 1402 (3d Cir. 1991). A motion to dismiss pursuant to Rule 12(b)(6) requires that the court consider all factual allegations in the complaint, as well as all reasonable inferences to be drawn from the facts alleged, in the light most favorable to the plaintiff. Gomez v. Toledo, 446 U.S. 635, 636, 64 L. Ed. 2d 572, 100 S. Ct. 1920 (1980); Piecknick v. Pennsylvania, 36 F.3d 1250, 1255 (3d Cir. 1994). Likewise, all pleadings must be liberally construed so "as to do substantial justice." Fed. R. Civ. P. 8(f).
Nevertheless, legal conclusions made in the guise of factual allegations will not be given the presumption of truthfulness and will not preclude the dismissal of a complaint. See Papasan v. Allain, 478 U.S. 265, 286, 92 L. Ed. 2d 209, 106 S. Ct. 2932 (1986). When it appears beyond doubt that no relief could be granted under any set of facts which could be proved consistent with the allegations of the complaint, a dismissal pursuant to Rule 12(b)(6) is proper. Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).
A. Plaintiff's Claims for Violations of the § 605 and § 553 of Title 47
Plaintiff alleges in its second amended complaint that the actions of Defendant, Andrew Christopher, violated sections 705 and 633 of the Federal Communications Act, as amended by Cable Communications Policy Act of 1984. See 47 U.S.C. §§ 605, 553. In his motion to dismiss, Christopher contends that, because the decoding devices which Plaintiff alleges the Defendants sold cannot directly intercept over-the-air satellite transmissions, but can only interfere with the distribution of those transmissions over a cable system, his actions are not subject to regulation under § 605(a)
or 605(e)(4) of Title 47.
While Plaintiff concedes in its brief in opposition to the motion to dismiss that "the devices sold by the defendants . . . cannot directly intercept over-the-air satellite transmissions," (Plaintiff's brief at 4), the Plaintiff continues to argue that § 605 applies to the interference with the distribution of signals over the cable system.
While the Third Circuit has not ruled on the applicability of § 605 to the unauthorized decryption of cable programming, the two Circuits which have addressed the issue have reached different conclusions as to whether § 605 regulates interference with the transmission of signals over the cable system. Compare United States v. Norris, 88 F.3d 462 (7th Cir. 1996)(finding that § 605 does not apply to programming transmitted over cable network), with International Cablevision, Inc. v. Sykes, 75 F.3d 123 (2d Cir. 1996)(concluding that § 605 applies to programming transmitted over cable network).
In Norris, the Seventh Circuit concluded that the unlawful interception of cable television programming transmitted over a cable network is not regulated by § 605, but instead, covered by § 553 of Title 47. In so holding, the court noted that in 1984, as part of an amendment to the Federal Communications Act, 47 U.S.C. §§ 151, et seq., Congress enacted § 553 of Title 47, entitled, "Unauthorized reception of cable service," as part of the Cable Communications Policy Act of 1984, which provides in relevant part that:
(1) No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.