United States District Court, D. New Jersey
February 14, 2005.
DIRECTV, INC., a California corporation, Plaintiff,
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
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.
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.
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 §
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
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.
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.
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.
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.