UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
December 15, 2003
DIRECTV, INC., PLAINTIFF,
JOHN MORENO, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Joseph E. Irenas, S.U.S.D.J.
Before the Court is Defendants' Motion to Dismiss for failure to state a claim upon which relief can be granted, pursuant to Fed. R. Civ. Pro. 12(b)(6). The Court has original jurisdiction pursuant to 28 U.S.C. § 1331. This motion comes out of a dispute between DirecTV and the Defendants, including John Moreno, and their alleged purchase and use of devices designed to illegally intercept DirecTV's satellite broadcasts. *fn1 The Defendants here move to dismiss DirecTV's three claims: (1) unauthorized reception of satellite signals in violation of 47 U.S.C. § 605(a); (2) unauthorized interception of electronic communications in violation of 18 U.S.C. § 2511(1)(a); and (3) possession of pirate access devices in violation of 18 U.S.C. § 2512(1)(b). We deny Defendants' motion as to all three claims.
DirecTV distributes satellite television broadcasts throughout the United States. These television broadcasts are electronically scrambled by DirecTV and are transmitted from satellites to subscribers who receive the signals through the use of DirecTV hardware, which includes a small satellite dish, an integrated reciever, a DirecTV access card, and cabling. The DirecTV access card unscrambles the signals only for the programming paid for by the subscriber.
"Pirate access devices" are illegal devices designed to modify or circumvent DirecTV's signal-scrambling technology. A number of companies, including Canadian Security and Technology ("CST") have engaged in the internet sale of pirate access devices (Compl., ¶ 3). DirecTV, with the cooperation of local law enforcement, executed a writ of seizure upon a shipping facility used by CST. *fn2 Pursuant to this and other raids, DirecTV obtained sales records listing purchasers of illegal equipment, including many DirecTV subscribers.
According to the seized records, John Moreno ("Moreno") purchased nine or more pirate access devices in or about March, 2001. DirecTV filed a lawsuit against Moreno and a number of other individual defendants, alleging that they purchased, possessed and used illegal equipment designed for the purpose of stealing DirecTV's satellite television programming, in violation of 47 U.S.C. § 605(a), 18 U.S.C. § 2511(1)(a), and 18 U.S.C. § 2512(1)(b).
Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In considering a Rule 12(b)(6) motion, the court will accept the allegations of the complaint as true. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Dismissal of claims under Rule 12(b)(6) should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Although the court must assume as true all facts alleged, "[i]t is not . . . proper to assume that the [plaintiff] can prove any facts it has not alleged." Associated Gen. Contractors of Cal., Inc., v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Finally, when "[c]onfronted with [a 12(b)(6)] motion, the court must review the allegations of fact contained in the complaint; for this purpose the court does not consider conclusory recitations of law." Pennsylvania v. Pepsico, Inc., 836 F.2d 173, 179 (3d Cir. 1988).
Defendants first move to dismiss DirecTV's initial claim that they violated 47 U.S.C. § 605(a), which reads, in relevant part: No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and such use (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.
Accordingly, DirecTV must prove that Defendants received, assisted in receiving, or intercepted DirecTV satellite transmissions to prevail on this claim.
Defendants argue that: (1) DirecTV's complaint does not allege any violation of § 605; and (2) relevant case law does not permit DirecTV recovery under § 605. *fn3 We reject both arguments.
Defendants contend that DirecTV's complaint does not allege any violation of 47 U.S.C. § 605, and, therefore, does not state a claim upon which relief can be granted. Violation of § 605 requires that an individual receive, intercept or assist another's receipt of radio communications. Defendants argue that DirecTV merely alleges that they "possessed" pirate access devices (Def. Br., 5). Although these devices would ostensibly allow Defendants to receive satellite transmissions, mere possession itself is insufficient to support a finding of liability under § 605.
Defendants, however, simply misread DirecTV's complaint. DirecTV alleges more than possession. In fact, DirecTV alleges that Defendants purchased and used pirate access devices to illegally intercept, attempt to intercept, or assist others to intercept DirecTV satellite transmissions (Compl. ¶ 4, 8, 25).
Defendants also argue that recovery for DirecTV under § 605 is banned by the Third Circuit opinion in TKR Cable Company v. Cable City Corporation, 267 F.3d 196 (3d Cir. 2001).
TKR Cable concerned the sale of cable television descramblers - pirate access devices similar to those at issue here - and the theft of cable television programming. Id. at 197. The plaintiff, TKR Cable, brought claims against the Cable City Corporation under 47 U.S.C. § 553 and 47 U.S.C. § 605. Id. at 197. The court found that the § 605 claims failed because § 605 governs radio (satellite) communications, while § 553 governs cable or wire communications:
We therefore conclude that § 605 encompasses the interception of satellite transmissions "to the extent reception or interception occurs prior to or not in connection with, distribution of the service over a cable system," and no more. H.R. Rep. No. 98-934, at 83, reprinted in 1984 U.S.C.C.A.N. at 4720. Once a satellite transmission reaches a cable system's wire distribution phase, it is subject to § 553 and is no longer within the purview of § 605.
Id. at 207. Defendants are accused of receiving DirecTV satellite transmissions, so § 605 clearly applies.
Defendants, however, seize upon the "reaches a cable system's wire distribution phase" language and argue that a DirecTV satellite signal legally becomes a wire communication as it travels through the coaxial cable system to a television set. This construction is incorrect for two reasons. First, it removes all meaning from § 605. A satellite transmission will inevitably travel a short span of wires as the signal travels from a subscriber's dish to the television set. Second, the TKR Cable court implicitly rejected Defendants' argument when it characterized "[t]he wires that connect a home satellite dish to the living room television" as arguably "incidental to the transmission," under the definition of "radio transmission" set forth in 47 U.S.C. § 153(33). *fn4 Id. at 202.
Defendants also move to dismiss DirecTV's second and third claims, violations of 18 U.S.C. § 2511(1)(a) *fn5 and § 2512(1)(b) *fn6 . Specifically, Defendants argue that neither § 2511 nor § 2512 allow for a private cause of action. *fn7 We disagree with this conclusion.
Sections 2510-21 of Title 18 of the United States Code comprise the Electronic Communications Privacy Act ("ECPA"). Although Title 18 and the ECPA are generally held to be criminal provisions, the ECPA does confer a private cause of action in limited situations, pursuant to § 2520. *fn8 Courts have disagreed, however, on the appropriate interpretation of § 2520(a).
Some courts read § 2520(a) as a limiting provision. *fn9 Courts adopting this view hold that, in order to bring a private cause of action under any section of the ECPA, a plaintiff must first satisfy the requirements of § 2520(a); namely, that "wire, oral, or electronic communication [be] intercepted, disclosed or intentionally used." 18 U.S.C. § 2520 (2000). This is the essential holding of Flowers v. Tandy Corp., which concluded that the plain language of § 2520(a) did not authorize a private cause of action for mere possession of an illegal intercepting device. 773 F.2d 585 (4th Cir. 1985).
A second, more recent interpretation of § 2520(a) was offered by Judge Freda Wolfson in DirecTV, Inc. v. Dougherty. Civ. No. 02-5576, slip op. at 3-4 (D.N.J. Oct. 8, 2003)(Wolfson, J.). Rather than view § 2520(a) as a statute limiting the potential field of ECPA civil defendants to those that have "intercepted, disclosed or intentionally used" wire, oral or electronic communications, Judge Wolfson found that § 2520(a) instead confers standing on plaintiffs. See also DirecTV, Inc. v. Russomano, Civ. No. 03-2475 (D.N.J. November 12, 2003)(Rodriguez, J.); DirecTV, Inc. v. Needleman, Civ. No. 03-2476, (D.N.J. November 7, 2003)(Simandle, J.); DirecTV, Inc. v. Gatsiolis, Civ. No. 03-3534, 2003 U.S. Dist. LEXIS 20275 (N.D. Ill. August 27, 2003).
Defendants would obviously have this Court subscribe to the prior Flowers interpretation, as they contend that DirecTV alleges mere possession of illegal devices, no more - and an allegation of mere possession is insufficient to support liability under § 2520(a), thereby foreclosing DirecTV's claims under § 2511 and § 2512. This argument fails most obviously because, as discussed earlier, DirecTV has alleged more than mere possession in its complaint, and will therefore satisfy § 2520(a). *fn10
However, we also reject the Defendants' interpretation of § 2520(a) and agree with Judge Wolfson's interpretation of the provision. Congress already lists an exemption from civil liability in § 2520(a), by excluding those assisting law enforcement pursuant to § 2511(2)(a)(ii). If Congress also intended to exempt those who violated § 2511(1)(a) or § 2512(1)(b), it would have done so. Where Congress passes a remedial statute such as the ECPA and creates a private cause of action therein, the purposes of the statute are served by private civil enforcement of the type sought here.
After viewing the allegations in the light most favorable to the plaintiff, we find that DirecTV has alleged more than possession of an illegal device. Because we also reject the limiting interpretation of 18 U.S.C. § 2520, we deny Defendants' motion to dismiss DirecTV's second and third claims.
An appropriate order will be entered on the date herewith.