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DIRECTV, INC. v. GENDRACHI

United States District Court, D. New Jersey


February 14, 2005.

DIRECTV, INC., a California corporation, Plaintiff,
v.
RON GENDRACHI, GERSHON JOHNS, ANTHONY PANICHELLI, FRANK SISCO, RODNEY STOKES, JOHN WALSH, and SERGEY YEZRIL, Defendants.

The opinion of the court was delivered by: JEROME SIMANDLE, District Judge

OPINION

This matter comes before the Court upon Plaintiff DirecTV Inc.'s motion for entry of final default judgment against Defendant Gershon Johns, pursuant to Fed.R.Civ.P. 55(b)(2), for Defendant's failure to answer, appear or otherwise reply in this matter. For the reasons discussed herein, Plaintiff's motion will be granted.

  BACKGROUND

  DirecTV, Inc. ("DirecTV") is a California-based company in the business of distributing satellite television broadcasts throughout the United States. (Compl. at ¶ 1.) Programming is electronically scrambled by DirecTV and is transmitted from satellites to DirecTV subscribers who receive the signals through the use of DirecTV hardware, including a small satellite dish, an integrated receiver, a DirecTV access card, and cabling. (Id. at ¶ 2.) The DirecTV access card unscrambles the signals for those programs paid for by the subscriber. (Id.)

  A number of companies have engaged in the internet sale of illegal equipment designed to modify or circumvent DirecTV's signal-scrambling technology, including devices known as "unloopers" and "bootloaders." With the assistance of law enforcement authorities, DirecTV executed Writs of Seizure in the matter of DirecTV v. Derek Trone, et al., No. SA CV 01-370 DOC (Anx), in the United States District Court for the Central District of California and obtained a substantial body of sales records, shipping records, email communications, credit card receipts and other records. (Compl. at ¶ 3.) According to those records, Defendant Gershon Johns purchased two printed circuit board devices called "Terminator Bootloaders," from DSS-Pro, on two separate occasions. (Id. at ¶ 8(a) and (b).) DirecTV previously has proven that bootloaders, like the ones Defendant purchased, are specifically designed to facilitate the illegal interception of DirecTV signals. See e.g., DirecTV v. Disalvatore, 2003 U.S. Dist. LEXIS 23822, *11 n. 2 (N.D. Ohio May 21, 2003) ("the Court finds as an undisputed fact that [bootloaders] are primarily useful for purposes of allowing free unauthorized access to satellite programming"); DirecTV v. Trone, 2003 U.S. Dist. LEXIS 23835, *5 (C.D. Cal. Feb. 10, 2003) (bootloaders "can modify an Access Card to view DirecTV channels without authorization or payment"). DirecTV also alleged in its Complaint that: (1) Defendant possessed and used this device knowing or having reason to know that its design rendered it primarily useful for surreptitiously intercepting DirecTV's satellite transmissions of television programming and (2) Defendant received or assisted others in receiving DirecTV satellite transmissions of television programming without authorization. (Compl. at ¶¶ 18, 24.)

  DirecTV filed a complaint against Defendant in this Court on April 30, 2003, which alleges violations of the Cable Communications Policy Act of 1984, as amended, 47 U.S.C. § 605 ("Communications Act"), and the Electronic Communications Privacy Act, 18 U.S.C. §§ 2511 and 2512 ("Electronic Communications Privacy Act"), with respect to the purchase, possession, and use of illegal equipment designed for the purpose of stealing DirecTV's satellite television programming. The Complaint further alleges unauthorized interception of electronic communications in violation of N.J.S.A. § 2A:156A-3, possession of pirate access devices in violation of N.J.S.A. § 2A:156A-5 and a claim for conversion against Defendant Johns.

  Defendant Johns was served with a summons and complaint on June 1, 2003. Pursuant to Rule 12(a)(1)(A), Fed.R.Civ.P., Defendant Johns had twenty (20) days from the date he was served with the summons and complaint to file an answer. Defendant Johns was required to file an answer on or before June 23, 2003. Johns did not answer by that date, and on or about July 11, 2003, DirecTV requested that the Clerk of Court enter default against Johns pursuant to Fed.R.Civ.P. 55(a). The Clerk entered default against Defendant Johns on July 18, 2003.

  DirecTV now moves for a judgment by default against Defendant Johns, as authorized by Rule 55(b)(2), Fed.R.Civ.P., for violations of § 605, § 2511, § 2512, as well as violations of N.J.S.A. § 2A:156A-3, N.J.S.A. § 2A: 156-5 and unlawful conversion. Plaintiff requests damages in the amount of $10,000 pursuant to 18 U.S.C. § 2520 for Defendant's violations of either § 2511 or § 2512 and is not requesting that the Court enter independent monetary damages against Defendant for each count in the Complaint.*fn1 In addition, pursuant to the above-referenced statutes, DirecTV seeks costs and attorneys' fees. This motion is unopposed.

  DISCUSSION

  Violation of 47 U.S.C. § 605

  Under the Communications Act, any person aggrieved by violations of § 605(a) may bring a cause of action against such violators. See 47 U.S.C. § 605(e)(2). Violations of § 605(a) include, inter alia, receiving and/or assisting others in receiving satellite transmissions of television programming without authorization. See generally, TKR Cable Co. V. Cable City Corp., 267 F.3d 196, 200 (3d Cir. 2001). The Third Circuit's decision in TKR Cable Co. supports DirecTV's claims against Defendant arising from his interception of satellite signals because in TKR, the Third Circuit expressly stated that liability under § 605 applies to "pirates who directly intercept airborne transmissions." Id. At 200. DirecTV has alleged such facts in the Complaint, (see Compl. at ¶ 24), those facts are deemed admitted and DirecTV has therefore proven a violation of § 605.

  The Communications Act provides that the Court "may grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain violations of subsection (a) of [the Communications Act]." See 47 U.S.C. § 605(e)(3)(B)(i). This Court will therefore grant DirecTV default judgment for its claims under the Federal Communications Act and an injunction prohibiting Defendant from committing further violations.

  Judgment Pursuant to 18 U.S.C. § 2520

  DirecTV argues that it has a civil remedy for violations of 18 U.S.C. § 2511(1)(a), which addresses one who "intentionally intercepts, endeavors to intercept, or procures another person" to do so, and 18 U.S.C. § 2512(1)(b), which addresses anyone who "possesses" a device "knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications."*fn2 Civil claims for relief based on violations of these provisions of the United States Code are authorized by 18 U.S.C. § 2520(a), which states:

Except as provided in section 2511(2)(a)(ii), any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter may in a civil action recover from the person or entity, other than the United States, which engaged in that violation such relief as may be appropriate.
18 U.S.C. § 2520(a). Plaintiff thus relies upon Section 2520(a) to assess statutory damages against Defendant Gershon Johns, as the facts alleged in the Complaint regarding the Defendant's liability are deemed admitted and it is therefore established the Defendant both purchased and used illegal access devices to intercept DirecTV satellite transmissions with the intent to avoid payment to DirecTV for the pirated programming in direct violation of § 2511(1)(a).

  The overwhelming authority in this District makes clear that an entity, such as DirecTV, may bring a private cause of action for violations of § 2511.*fn3 With respect to a private cause of action under § 2512, however, the law is not as clear. On June 15, 2004, the United States Court of Appeals for the Eleventh Circuit held that 18 U.S.C. § 2520(a) does not create a private right of action against persons in possession of pirate access devices in DirecTV, Inc. v. Treworgy, 373 F.3d 1124 (11th Cir. 2004). The Eleventh Circuit determined that civil recovery under § 2520(a) may be had for violations of the chapter, but only when there is a violation of 18 U.S.C. § 2511. Relying on the plain language of § 2520(a), the Eleventh Circuit held that § 2520(a) does not create a private right of action against a person who possesses a device in violation of § 2512(1)(b). Treworgy thus holds that one may recover damages only where there are "interceptions, disclosures, and uses of electronic communications," all of which are within the ambit of § 2511. Treworgy, 373 F.3d at 1127. At present, the Eleventh Circuit is the first and only court of appeals to have addressed this issue;*fn4 the Third Circuit has not yet spoken.

  In this default judgment case, however, Plaintiff has established a prima facie case for Defendant's actual interception of its satellite signal, as alleged in ¶¶ 22-24 of the Complaint, in violation of § 2511(a). Since Plaintiff seeks default judgment damages for a single violation of either § 2511 or § 2512, this Court need not consider the more difficult issue presented by a case of mere possession of an interception device within § 2512, which Treworgy found was not actionable under § 2520. Because Plaintiff has demonstrated its entitlement to recover for the § 2511 interception, which is arguably more serious misconduct than the private possession of a device under § 2512, Plaintiff's quest for a statutory remedy will be served by the imposition of statutory damages redressing the § 2511 violation.

  Damages and Fees/Costs

  For actions in violation of the Electronic Communications Privacy Act, § 2520 authorizes either actual damages suffered by the plaintiff or "statutory damages of whichever is greater of $100 a day for each day of violation or $10,000." 18 U.S.C. § 2520(c)(2). The purpose of statutory damages is to do more than make the victim whole; statutory damages also serve to penalize the wrongdoer and deter future misdeeds. See Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952) ("[t]he statutory rule, formulated after long experience, not merely compels restitution of profit and reparation for injury but also is designed to discourage wrongful conduct").

  The Third Circuit has stated, moreover, that even in the absence of any economic harm, imposition of statutory damages remains an available alternative because it serves as a deterrent to the wrongdoer. See Schnall v. Amboy Nat'l Bank, 279 F.3d 205, 216-17. The rationale for such a decision, especially in the context of satellite signal piracy, is clear. A "broad ability to bring the private right of action . . . decreases the burden on already overextended federal prosecutors . . . [and] help[s] to guarantee the collapse of the manufacture, distribution, and use network for devices to intercept electronic communications." DirecTV, Inc. v. Gatsiolis, 2003 U.S. Dist. LEXIS 23403 (N.D. Ill. Aug. 27, 2003). If no damages are awarded for violation of the Electronic Communications Privacy Act, no deterrent will exist to those who have engaged or may seek to engage in similar conduct in the future.

  DirecTV submits that it has been actually damaged by Defendant's interception of its satellite transmissions because every time its signal is improperly intercepted, it loses revenue. However, without Defendant's appearances, DirecTV's actual damages are difficult to quantify. Therefore, as noted above, DirecTV has requested an award of statutory damages pursuant to § 2520 and requests statutory relief for a single violation of either § 2511 or § 2512. Here, DirecTV is entitled to a statutory award of $10,000 for the devices Defendant purchased and used to intercept DirecTV's satellite transmissions. See Community Television Sys., Inc. v. Caruso, 284 F.3d 430, 435-36 (2d Cir. 2002) (a proper plaintiff is entitled to a minimum statutory award of $10,000 "each time a device is purchased and installed").

  Moreover, DirecTV is entitled to its reasonable attorneys' fees and costs in pursuing this action. The Wiretap Act provides that an aggrieved party may recover "reasonable attorneys' fees and other litigation costs reasonably incurred" as a result of the unauthorized reception of satellite programming. 18 U.S.C. § 2520(b)(3). This Court thus awards the fees and costs requested by Plaintiff's counsel as well.

  Injunctive Relief

  Finally, DirecTV requests injunctive relief under the Communications Act and the Electronics Communications Privacy Act. As previously discussed above, the Communications Act provides that courts "may grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain violations of subsection (a) of [the Communications Act]." 47 U.S.C. § 605(e)(3)(B)(i). In addition, the Electronic Communications Privacy Act provides that a court may award "such preliminary and other equitable or declaratory relief as may be appropriate." 18 U.S.C. § 2520(b)(1). Based on these provisions, this Court will grant Plaintiff's request and permanently enjoin Defendant from committing or assisting in the commission of any violation of 47 U.S.C. § 605, or violation of 18 U.S.C. § 2511.

  CONCLUSION

  For the reasons expressed above, Plaintiff DirecTV, Inc.'s motion for entry of default judgment against Defendant Gershon Johns, pursuant to Fed.R.Civ.P. 55(b)(2) is granted. The accompanying Judgment is entered.

  JUDGMENT

  This matter having come before the Court on Plaintiff DirecTV, Inc.'s motion for entry of default judgment against Defendant Gershon Johns, pursuant to Fed.R.Civ.P. 55(b)(2); and the Court having considered the submissions of Plaintiff in support thereof and noting no opposition having been filed by Defendant; and for the reasons expressed in the Opinion of today's date; and for good cause shown;

  IT IS this 14th day of February, 2005 hereby

  ORDERED that Plaintiff DirecTV, Inc.'s motion for entry of default judgment against Defendant Gershon Johns [Docket Item No. 32-1] shall be, and hereby is, GRANTED; and

  IT IS FURTHER ORDERED that judgment be entered in favor of Plaintiff DirecTV, Inc. and against Gershon Johns in the sum of $10,000.00 plus costs and disbursements in the amount of $225.00 plus attorneys' fees in the amount of $988.21, plus post judgment interest at the legal rate in effect to accrue thereon from the date of this judgment forward until paid; and

  IT IS FURTHER ORDERED that Defendant Gershon Johns is permanently enjoined from committing or assisting in the commission of any violation of the Cable Communications Policy Act of 1984, as amended, 47 U.S.C. § 605 as well as from committing or assisting in committing any violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2511.


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