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holding that Virginia law does not recognize a cause of action for conversion of intangible property that is unconnected to a tangible document
Summary of this case from Directv, Inc. v. BorichOpinion
Civil Action No. 5:03cv00079.
April 30, 2004
Report and Recommendation
I. OVERVIEW
Plaintiff DIRECTV has sued defendant Benjamin Swisher seeking damages and injunctive relief for pirating DIRECTV's subscription satellite television signal. While parroting violations of the Cable Communications Policy Act of 1984, the Electronic Communications Policy Act of 1986 and conversion under the common law of Virginia, the only actual facts alleged in the complaint are that Swisher purchased one device which, when used in connection with other hardware, is capable of decrypting DIRECTV's proprietary signal. Because DIRECTV alleges no facts other than the mere purchase of a decryption device, there is no factual basis in the complaint sufficient to support the bald assertion that Swisher intercepted or used any DIRECTV signal in violation of federal or state law. DIRECTV's pleading charges Swisher with unlawful use of a decryption device to intercept a DIRECTV signal merely from the fact that Swisher purchased such a device. Other than by invoking the rote "upon information and belief" litany for each count, DIRECTV's complaint lacks any factual allegation that Swisher actually used the device or intercepted DIRECTV's signal. A pleading lacking a factual basis for the essential elements of the violation fails to state a claim. In short, DIRECTV's complaint requires a leap of faith from the mere purchase of a device to the alleged violation itself — the interception of a DIRECTV signal. Proper pleading ought not require such a leap, and a well-pleaded complaint should contain facts sufficient to plainly state each of the material elements of the claimed violation of law. As a result, it is recommended that DIRECTV's complaint against Swisher be dismissed for failure to state a claim upon which relief may be granted and further recommended that DIRECTV be granted leave to amend its complaint within twenty (20) days.
II. BACKGROUND
On February 12, 2004, Chief United States District Judge Samuel G. Wilson referred this matter to the undersigned United States Magistrate Judge Michael F. Urbanski, for pretrial management and, pursuant to 28 U.S.C. § 636(b)(1)(B) and Federal Rule of Civil Procedure 72(b), the undersigned submits this Report and Recommendation.
In this action, DIRECTV seeks damages and injunctive relief against Swisher for the alleged "assembly, distribution, possession and use of decryption devices" (specifically at issue, the "Whiteviper" brand unlooper and access card) alleged to have the primary purpose of unscrambling DIRECTV's satellite signals to gain access to its programming (referred to by DIRECTV as "pirate access devices"). (Pl.'s Compl. ¶ 1.) Swisher filed a motion to dismiss DIRECTV's complaint in its entirety for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). DIRECTV filed a response to Swisher's Rule 12 motion to dismiss contending that its complaint meets the notice pleading requirements necessary to survive dismissal. A pretrial conference was held before the United States Magistrate Judge on March 22, 2004.
Plaintiff DIRECTV, Inc. ("DIRECTV") is a California-based company that distributes television and audio programming throughout the United States to its subscribers for a monthly fee and on a pay-per-view or pay-per-package basis via satellite communication signals. Defendant Swisher is, and has been, a resident of the Western District of Virginia during the period of the allegations set forth in DIRECTV's complaint.
DIRECTV encrypts its satellite communication signals to prevent free access to its services by unauthorized viewers and listeners. Legitimate viewers of DIRECTV's programs are provided access upon payment for its services through an access card, a card with a computer chip that is inserted into a satellite receiver and stores and applies information necessary to unscramble satellite signals that are received through a satellite dish. In order to receive the broadcasts, a DIRECTV subscriber must possess a satellite dish, an integrated receiver/decoder, and an access card to unscramble the signals. The satellite dish, satellite receiver and television are linked via cables to transmit satellite information to viewers. Upon payment, DIRECTV electronically directs the access card to digitally unscramble, or unblock, certain programs and channels for its customers.
In spite of DIRECTV's efforts to prevent unauthorized reception and use of its programming, individuals have sought to illegally decrypt and intercept DIRECTV's signals without authorization by use of various pirate access devices. Although pirate access devices vary in type, they essentially allow the user to modify the access card to circumvent DIRECTV's security measures and decode its satellite signals. DIRECTV asserts in its complaint that the programmable nature of these access cards is the primary basis for this dispute. (Pl.'s Compl. ¶ 3.)
Over the last few years, DIRECTV has conducted several raids on businesses marketing and selling pirate access devices designed to assist in the interception of its satellite programming. From these raids, DIRECTV alleges that it obtained sales and shipping records that listed numerous individuals as purchasers and users of pirate access devices. (Pl.'s Compl. ¶ 6.) This is one of thousands of law suits DIRECTV has filed throughout the country against individuals for alleged use of pirate access devices to intercept its satellite signals.
According to DIRECTV's complaint, it executed writs of seizure on May 25, 2001 at a mail shipping facility used by several distributors of pirate access devices in an effort to counteract unauthorized decryption and viewing of its satellite programs. DIRECTV alleges further that on or about September 2001, it obtained shipping records, email communications, and other records from "Whiteviper Technologies" listed Swisher as having purchased a combination package invoiced as "Viper Reader/Writer Wildthing 2 Clone Unlooper" that consisted of a smart card programmer and an unlooper.
On September 9, 2003, DIRECTV filed this law suit against Swisher for four counts of alleged violations of federal and state laws that prohibit the interception of satellite communications pursuant to the Cable Communications Policy Act of 1984, 47 U.S.C. § 521, et seq. (the "Communications Act"), the Electronic Communications Policy Act of 1986, 18 U.S.C. § 2510, et seq., (the "Wiretap Act"), and unlawful conversion of DIRECTV's property under Virginia common law.
In Count 1, DIRECTV alleges "upon information and belief" that Swisher violated the Communications Act, 47 U.S.C. § 605(e)(3)(C), by illegally intercepting, receiving and exhibiting, or otherwise assisting in the interception, reception or exhibition of DIRECTV's satellite programming through the use of illegal decryption devices or the manipulation of legitimate satellite equipment, or by other means known only to Swisher and unknown to DIRECTV. Also, "upon information and belief," DIRECTV alleges in Court 3 an additional Communications Act violation, 47 U.S.C. § 605(e)(4), of knowingly manufacturing, assembling, or modifying an electronic, mechanical or other device or equipment, knowing or having reason to know that the device or equipment is used primarily to facilitate the unauthorized decryption of satellite programming, or direct-to-home satellite services, or is intended for other prohibited activity.
In Count 2, DIRECTV alleges, again only "upon information and belief," that Swisher violated the Electronic Communications Policy Act, 18 U.S.C. § 2511, by intentionally intercepting, endeavoring to intercept, or procuring other persons to intercept electronic communications from DIRECTV, and then disclosing, or endeavoring to disclose to others the contents of the electronic communications, and intentionally used or endeavored to use the contents of the electronic communications knowingly, or having reason to know that such activity was in violation of 18 U.S.C. § 2511.
Finally, Count 4 alleges that the foregoing allegations establish that Swisher unlawfully converted DIRECTV's property intentionally and wrongfully to his use, benefit and advantage in violation of Virginia common law.
Swisher filed a motion under Rule 12(b)(6) of the Federal Rule of Civil Procedure contending that there are insufficient factual allegations to support the claimed use or interception of DIRECTV's signal. For the following reasons, it is recommended that Swisher's motion to dismiss be GRANTED.
III. RULE 12(b)(6) STANDARD OF REVIEW
The standard of review for deciding a motion to dismiss for failure to state a claim upon which relief may be granted under Federal Rule of Civil Procedure 12(b)(6) requires that the court assess the legal sufficiency of a claim by accepting as true the factual allegations set forth in the complaint in the light most favorable to the plaintiff. See e.g., Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Dismissal of claims should be granted only where the court is able to clearly determine that no combination of facts alleged in a complaint in support of a claim would entitle the plaintiff to relief. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957) ("In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.")In order to state a claim, DIRECTV's complaint "must 'colorably state facts which, if proven, would entitle [the plaintiff] to relief.'" Dickson v. Microsoft Corp., 309 F.3d 193, 212 (4th Cir. 2002) citing Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910 F.2d 139, 145 n. 8 (4th Cir. 1990) (internal quotation marks omitted). When reviewing alleged facts in the light most favorable to the plaintiff, "it is not, however, proper [for the court] to assume that the [plaintiff] can prove facts that it has not alleged [in the complaint.]" Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). Furthermore, in assuming the truth of all facts alleged, "the court does not consider conclusory recitations of law." Pennsylvania v. Pepsico, Inc., 836 F.2d 173, 179 (3rd Cir. 1988). Therefore, dismissal is suitable for claims in which the court cannot "identify each of the material elements necessary to sustain a recovery under some viable legal theory." DIRECTV, Inc. v. Cardona, 275 F. Supp.2d 1357, 1361 (M.D. Fla. 2003), quoting Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 684 (11th Cir. 2001) (2002).
The standard of review for a Rule 12(b)(6) analysis is inextricably linked to the pleading standards pursuant to Federal Rule of Civil Procedure 8, General Rules of Pleading, and Federal Rule of Civil Procedure 11, Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions. Fed.R.Civ.P. 8(a), (e)(1) and (2), and (f); Fed.R.Civ.P. 11(b)(3) and Advisory Committee Notes 1983 Amendments, and 1993 Amendments (b) and (c); See Swierkiewicz v. Sorema, 534 U.S. 506, 512-515 (2002) (holding that in order to survive a motion to dismiss under the liberal pleading rules for construction of a notice pleading, a plaintiff need not plead more facts than needed to succeed on the merits in a prima facie case if direct evidence of employment discrimination is produced). Rule 8(a) and (e) serve as starting points for assessing the sufficiency of claims, setting forth that pleading requirements are to be construed in a liberal fashion, claims are to be short and plain, and statements are to be concise and direct showing the grounds for the claims and rights to requested relief. Id. at 514. Thus, one of the first pleading obligations of a plaintiff is to state a claim that sets forth sufficient facts comprising the factual and legal elements necessary for recovery, beyond mere allegations or recitations of violations of statutory language, that will additionally serve to give the defendant "fair notice of the plaintiff's claim and the grounds upon which it rests."Id., at 512 citing Conley, 355 U.S. at 47. See also e.g., Pepsico, Inc., 836 F.2d at 179 citing 355 U.S. at 47-48;Klebanow v. New York Produce Exchange, 344 F.2d 294, 299 (2nd Cir. 1965).
Additionally, Rule 8(e)(2) requires that "[a]ll statements shall be made subject to the obligations set forth in Rule 11." Fed.R.Civ.P. 8(e)(2). Pursuant to Rule 11(b)(3), a plaintiff's pleading obligations additionally include the need to set forth only "allegations and other factual contentions [that] have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery." Fed.R.Civ.P. 11(b)(3) (emphasis added). The Advisory Committee Notes on the 1983 Amendment of Rule 11 provides further insight into pleading requirements for statements of claims:
The new language stresses the need for some prefiling inquiry into both the facts and the law to satisfy the affirmative duty imposed by the rule. The standard is one of reasonableness under the circumstances. This standard is more stringent than the original good-faith formula and thus it is expected that a greater range of circumstances will trigger its violation.
Fed.R.Civ.P. 11, Advisory Committee Notes, 1983 Amendment.See also, Fed.R.Civ.P. 11, Advisory Committee Notes, 1993 Amendments, Subdivisions (b) and (c) ("revision in part expands the responsibilities of litigants to the court . . . [and] require[s] litigants to 'stop-and-think' before initially making legal or factual contentions"); Cooper v. Sedgwick County, Kansas, et al., 206 F. Supp.2d 1126, 1143 (D. Kan. 2002) (granting motion to dismiss in tort claims action and directing plaintiff's counsel to Rule 11(b) and (c) where counsel had cut and pasted vague allegations into the complaint absent sufficient detail and factual and legal prefiling research).
IV. ANALYSIS
DIRECTV contends that the facts as originally set forth are sufficient to state a claim under the Communications Act, the Wiretap Act, and Virginia common law for conversion. DIRECTV alleges that the fact that Swisher's name appears in purchase and/or shipping records of a Viper Reader/Writer Wildthing 2 Clone Unlooper provided to it by Whiteviper Technologies is sufficient grounds and notice to Swisher of its basis under all the elements of law of the four counts as set forth in its complaint for suit against him; in sum, that he surreptitiously possessed and used equipment designed to wrongfully intercept DIRECTV's encrypted satellite programming. (Pl.'s Resp. Def.'s R. 12 Mot. Dismiss at 3-4.) Although DIRECTV alleges that Swisher illegally used the devices he purchased and successfully intercepted its satellite signals to avoid paying for its programming, it fails to identify sufficient any facts in its complaint or in its response to Swisher's motion to dismiss that could later be established by admissible evidence as the factual basis for its claims of illegal use of pirate access devices and interception of its signals, such as prior subscriber history of its programming, possession of the other equipment necessary to interception as a satellite dish and receiver, facts supporting actual use or interception of DIRECTV's signals, delivery confirmation of receipt by Swisher of the decryption access devices at issue, or an admission by Swisher that he attempted to, or was successful in intercepting its programming. DIRECTV has successfully identified such facts in other cases as grounds for the same claims against other defendants as it claims in this case against Swisher. See e.g., DIRECTV v. DeVries, ___ F. Supp.2d ___, 2004 WL 303111 (W.D. Mich. Feb 6, 2004) (granting motion for summary judgment where DIRECTV failed to identify specific facts as it had done in other cases before that court, such as defendant's subscriber history after defendant presented affidavit that he was never able to get an unlooper to work); DIRECTV, Inc. v. Murray, 2004 U.S. Dist. LEXIS 3782, No. 5:03-0045-18 (D.S.C. Mar. 2, 2004) (holding that evidence that defendant purchased devices only useful for pirating satellite signals and evidence that defendant had all of the other means necessary to pirate DIRECTV's signals constitutes circumstantial evidence to survive summary judgment in part);DIRECTV, Inc. v. Beauchamp, 2004 U.S. Dist. LEXIS 2236, No.: 2:02-CV-200 (W.D. Mich. Feb. 2, 2004) (denying both parties' motions for summary judgment and dismissing DIRECTV's claims in part where grounds for violations were identified through specific facts that defendant admitted that he attempted to use reprogrammed access card to intercept its signals and inserted it into receiver after his wife admitted to reprogramming access card via third party with intent to intercept DIRECTV's signals prior to purchasing pirate access device). See also, United States v. Harrell, 983 F.2d 36 (5th Cir. 1993) (affirming defendant's criminal convictions where FBI agent witnessed modification and sales of pirate access devices and software designed to intercept satellite programming, and noting the potential issue of double jeopardy for convictions under both 47 U.S.C. § 605(e)(4) and 18 U.S.C. § 2512).
In its response to Swisher's motion to dismiss, DIRECTV stated that it had "acquired knowledge concerning Swisher's purchase history" in its complaint. However, the complaint reveals that "purchase history" refers only to Swisher's alleged purchase of the access device at issue. (Pl.'s Resp. Def.'s R. 12 Mot. Dismiss at 3, citing Pl.'s Compl. ¶¶ 7-8.) There is no allegation in the complaint of any prior subscriber history of DIRECTV programming by Swisher.
The only factual allegations specific to defendant Swisher are set forth in ¶ 17 of the Complaint. There it is alleged only that:
(1) "On or about June 10, 2000, Swisher purchased a combination package from Whiteviper invoiced as a "Viper Reader/Writer Wildthing 2 Clone Unlooper," and
(2) "The package was sold as a combo and consisted of a smart card programmer and an unlooper. The programmer is primarily designed to permit the illegal programming of valid DIRECTV Access Cards for the sole purpose of obtaining access to DIRECTV Satellite Programming without paying DIRECTV. The unlooper is designed to repair Access Cards that have been rendered unusable by illegitimate use and is specifically designed for use with certain software further permitting the illegal programming of valid DIRECTV access devices."
All of the allegations of interception or use of a DIRECTV signal are conclusions parroting the statutory language. There is no factual direct allegation of use or interception of a DIRECTV signal in the complaint. Rather, such allegations flow "upon information and belief" exclusively from Swisher's alleged purchase of the combination package of the programmer and unlooper. While there is sufficient factual basis to allege possession of such a device, there are insufficient facts set forth in the complaint as framed to provide a sufficient factual basis for the conclusory assertion that Swisher has used the combination package he allegedly purchased to unlawfully intercept or use a DIRECTV signal.
In essence, while DIRECTV has dressed up this complaint in conclusory language seeking damages and alleging receipt by interception, transmission and use of its signals in violation of 18 U.S.C. § 2511, 47 U.S.C. § 605, and common law conversion, it has done so on the basis of grounds that only constitute a violation of 18 U.S.C. § 2512. (Pl.'s Compl. ¶¶ 8-9, 11, 17.) Section 2512 prohibits the possession of descrambling devices, but provides no basis for a private right to sue for damages in accordance with 18 U.S.C. § 2520(a). See e.g., DIRECTV v. Amato, 269 F. Supp.2d 688 (E.D. Va. 2003) (concluding that there is no private right to a cause of action for violations of possession of decrypting devices in violation of § 2512);Flowers v. Tandy Corp., 773 F.2d 588 (4th Cir. 1985) (holding statutory language and congressional intent are clear that no right exists to private cause of action for violations of § 2512); DIRECTV, Inc. v. Boggess, ___ F. Supp.2d ___, 2004 WL 285931 (S.D.W. Va. Feb. 13, 2004) (concluding that no private cause of action exists for violations of § 2512); DIRECTV, Inc. v. Nichols, No. 7:03CV00344 (W.D. Va. Mar. 9, 2004) (no private cause of action for violation of § 2512).
In short, DIRECTV provides nothing more than conclusory allegations that Swisher intercepted its signals and successfully modified an access device based on the sole alleged fact that Swisher purchased pirate access devices. Absent allegations of facts supporting the elements of the claims it avers, the court is not bound by DIRECTV's legal conclusions and may dismiss its complaint under Rule 12. Buckingham v. Gailor, 2001 U.S. Dist. LEXIS 24779, at * 5, No. CCB-00-1568 (D. Md. March 27, 2001) ("because the court is testing the legal sufficiency of the claims, the court is not bound by the plaintiff's legal conclusions [of facts alleged]") citing Randall v. United States, 30 F.3d 518, 522 (4th Cir. 1994); Schatz v. Rosenberg, 943 F.2d 485, 489 (4th Cir. 1991); Labram v. Havel, 43 F.3d 918, 921 (4th Cir. 1995) (affirming Rule 12(b)(6) dismissal with prejudice because the plaintiff had not alleged sufficient facts to support her conclusion that the defendant owed her a fiduciary duty at common law). DIRECTV's bare allegation of Swisher's alleged purchase and possession of a pirate access device is insufficient to set forth the elements necessary for the relief it seeks, and mere invocation of statutory language "upon information and belief" does not absolve DIRECTV from meeting its obligation to provide "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). See Estate Constr. Co. v. Miller Smith Holding Co., 14 F.3d 213, 220 (4th Cir. 1994) (holding that reviewing a 12(b)(6) dismissal requires determining whether a notice pleading sets forth all elements necessary under theory of relief).
In its response to Swisher's motion to dismiss, DIRECTV citesSwierkiewicz and Iodice v. United States, 289 F.3d 270 (4th Cir. 2002), to support its assertion that it need not allege specific facts under the liberal notice pleading standard. (Pl.'s Resp. Def.'s Mot. Dismiss at 3-4.) Given the paucity of the facts alleged in this case, Swierkiewicz and Iodice do not support DIRECTV's position. The Court in Swierkiewicz held that a heightened pleading standard was not required to survive a motion to dismiss in an employment suit for alleged age discrimination where the plaintiff had 1) stated claims upon which relief could be granted under the proper statute, 2) "detailed the events leading to his termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with his termination" and 3) therefore given the "respondent fair notice of what petitioner's claims [were] and the grounds upon which they rest[ed]." 534 U.S. at 999 (internal citations omitted). Consistently, in Iodice, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court's decision granting defendants' motion to dismiss in a tort action " not because the [appellants] failed to forecast evidence sufficient to prove an element of an ordinary negligence claim, but because the [appellants] failed to allege facts sufficient to state elements of such a claim." Iodice, 289 F.3d at 281 (emphasis added). The court in Iodice citedSwierkiewicz as support for its reasoning to emphasize the requirement that modern day pleadings "must disclose" facts sufficient under each element necessary for relief in order to survive a Rule 12 dismissal for failure to state a claim. Id. (internal citations omitted). While DIRECTV has correctly citedSwierkiewicz for the proposition that a plaintiff need not provide evidentiary support for claims at the pleading stage, the Fourth Circuit "has not interpreted Swierkiewicz as removing the burden of a plaintiff to allege facts sufficient to state all the elements of [a] claim." Bass v. E.I. Dupont De Nemours Co., 324 F.3d 716, 765 (4th Cir. 2003) cert. denied 157 L.Ed.2d 253, 124 S.Ct. 301, 2003 U.S. LEXIS 7334 (Oct. 6, 2003) (affirming motion to dismiss in Title VII employment discrimination case for failure to allege facts sufficient to state plaintiff's claim for relief), citing Dickson, 309 F.3d at 213; 289 F.3d at 281. As a result of Fourth Circuit case law, Swierkiewicz is to be interpreted as consistent with the general pleading requirements set forth in the Federal Rules of Civil Procedure. Bass, 324 F.3d at 765 ("While a plaintiff is not charged with pleading facts sufficient to prove her case, as an evidentiary matter, in her complaint, a plaintiff is required to allege facts that support a claim for relief.").
Therefore, the court must follow the Fourth Circuit's interpretation of Swierkiewicz to determine whether DIRECTV's complaint alleges sufficient facts as to each of the necessary elements for its claims against Swisher in response to his filing a motion to dismiss. Cockerham v. Stokes County Brd. of Educ., 2004 U.S. Dist. LEXIS 1539, at *16, No. 1:03CV00227 (M.D.N.C. Feb. 3, 2004) (granting defendant's motion to dismiss without prejudice where defendant failed to allege facts to support all prima facie elements under Title IX).
A. DIRECTV's Causes of Action for Violations of the Cable Communications Policy Act.
1. Counts 1 and 3 — Damages under 47 U.S.C. § 605(e)(3)(C) and (e)(4).
In order to allege a right to recovery and seek damages pursuant to 47 U.S.C. § 605(e)(3)(C), DIRECTV must first state facts in its complaint sufficient for each of the elements required as a basis to allege violations pursuant to 47 U.S.C. § 605(a). DIRECTV alleges that Swisher illegally intercepted and received its satellite programming, and assisted others in receiving DIRECTV's satellite transmissions in violation of 47 U.S.C. § 605(a). That statutory provision states, in pertinent part:
[N]o person receiving, assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof, except through authorized channels of transmission or reception, (1) to any person other than the addressee, his agent, or attorney, (2) to a person employed or authorized to forward such communication to its destination, (3) to proper accounting or distributing officers of the various communicating centers over which the communication may be passed, (4) to the master of a ship under whom he is serving, (5) in response to a subpoena [sic] issued by a court of competent jurisdiction, or (6) on demand of other lawful authority. 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 use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto. No person having received any intercepted radio communication or having become acquainted with the contents, substance, purport, effect, or meaning of such communication (or any part thereof) knowing that such communication was intercepted, shall divulge or publish the existence, contents, substance, purport, effect, or meaning of such communication (or any part thereof) or use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto. This section shall not apply to the receiving, divulging, publishing, or utilizing the contents of any radio communication which is transmitted by any station for the use of the general public, which relates to ships, aircraft, vehicles, or persons in distress, or which is transmitted by an amateur radio station operator or by a citizens band radio operator.47 U.S.C. § 605(a). Any person aggrieved by a violation of subsection (a) may bring a civil action in federal court and seek damages. 47 U.S.C. § 605(e)(3)(A) and (C). In order to prevail on its claim under this section, DIRECTV must allege a sufficient factual basis to support the claim that Swisher received, assisted in receiving, or intercepted DIRECTV satellite transmissions. See DIRECTV, Inc. v. Moreno, No. 03-2478 (JEI), 2003 WL 22927883, at *2 (D.N.J. Dec. 11, 2003); DIRECTV, Inc. v. Karpinsky, 269 F. Supp.2d 918, 926 (E.D. Mich. 2003), vacated in part upon reconsideration, 274 F. Supp.2d 918 (E.D. Mich. 2003); Joe Hand Promotions, Inc. v. Rennard Street Enters., Inc., 975 F. Supp. 746, 753 (E.D. Pa. 1997).
DIRECTV sets forth no facts in its complaint as grounds for receiving, assisting others in receiving, or intercepting its satellite transmissions beyond the sole allegation that Swisher purchased and, therefore ostensibly possesses, a pirate access device. Nor does it provide facts in support of such allegations as rebuttal facts in its response to Swisher's motion to dismiss. Thus, facts in support of Swisher's mere purchase and possession of pirate access devices, even upon appearance of intent to receive, intercept, assist others in interception, or to distribute do not support all the necessary elements required for relief pursuant to 47 U.S.C. § 605(e)(3)(C). See generally, Beauchamp, 2004 U.S. Dist. LEXIS 2236 citing V Cable, Inc. v. Guercio, 148 F. Supp.2d 236, 242-243 (E.D.N.Y. 2001) (holding that plaintiff failed to show standing pursuant to § 605(a) for lack of evidence that defendant distributed or used pirate access devices, and that it is not a crime nor a basis for civil action to purchase or possess pirate descrambling devices);Walker v. Darby, 911 F.2d 1573, 1578 (11th Cir. 1990) (reversing and remanding grant of summary judgment where appellant alleged facts of actual interception, personally witnessed interception devices, and provided evidence of witness testimony of use of intercepted information); Ages Group L.P. v. Raytheon Aircraft Co., Inc., 22 F. Supp.2d 1310 (M.D. Ala. 1998) (holding that plaintiff presented sufficient evidence beyond proof of possession of interception devices by evidence of eyewitness testimony to actual use of devices); Gross v. Taylor, No. Civ. A. 96-6514, 1997 WL 535872 (E.D. Pa. Aug. 5, 1997) (holding that mere possession of interception equipment fails to show that defendant actually received or intercepted plaintiff's communication). Therefore, it is recommended that DIRECTV's claims seeking damages for violations of § 605(a) be dismissed for failure to allege facts that Swisher did anything more than purchase a pirate access device.
Similarly, DIRECTV seeks damages pursuant to 47 U.S.C. § 605(e)(4) for the willful assembly or modification of devices or equipment to illegally intercept satellite cable programming. That provision states, in pertinent part:
Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or direct-to-home satellite services, or is intended for any other activity prohibited by subsection (a), shall be fined not more than $500,000 for each violation, or imprisoned for not more than 5 years for each violation, or both.47 U.S.C. § 605(e)(4). In order for DIRECTV to prevail on Swisher's motion to dismiss, it must allege facts as grounds to support its claims that Swisher willfully modified or reprogrammed interception devices to be capable of illegal decryption of its satellite transmissions. As noted above, DIRECTV fails to allege any such facts in support of its allegation pursuant to § 605(e)(4) in its complaint beyond Swisher's alleged purchase and possession of pirate access devices. Nor does it provide additional sufficient facts as rebuttal in its response to Swisher's motion to dismiss. See Harrell, 983 F.2d 36. Therefore, it is recommended that DIRECTV's claim seeking damages for the willful assembly or modification of pirate access devices be dismissed for failure to allege sufficient facts to support the essential elements of such a claim.
B. DIRECTV's Cause of Action for Violations of the Wiretap Act.
1. Count 2 — Damages pursuant to 18 U.S.C. § 2520 for violations of § 2511.
DIRECTV contends that it has a right to damages on its claims that Swisher intentionally intercepted, disclosed and/or intentionally used its communication signals in violation of 18 U.S.C. § 2511. Section 2511(1)(a) imposes criminal liability upon any person who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication." 18 U.S.C. § 2511(1)(a). 18 U.S.C. § 2520(a) creates a right to a private cause of action for victims of violations of § 2511.DIRECTV, Inc. v. Hosey, 289 F. Supp.2d 1259, 1264 (D. Kan. 2003); DIRECTV, Inc. v. Childers, 274 F. Supp.2d 1287, 1288 (M.D. Ala. 2003); DIRECTV. Inc. v. Jerolleman, No. Civ. A. 03-1465, 2003 WL 22697177, at *2 (E.D. La. Nov. 12, 2003). That section provides:
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).
DIRECTV argues in its complaint and response to Swisher's motion to dismiss that it is entitled to damages for intentional interception and disclosure of its signals because Swisher allegedly purchased and possesses a pirate access device even in the absence of any facts that he actually intercepted or disclosed its signals, or that he was even a prior subscriber with a purchase history and/or in possession of other necessary equipment such as a DIRECTV access card, satellite dish or receiver to intercept its signals. DIRECTV theorizes that all purchasers of pirate access devices are attempting, or are successfully using decryption devices to "intercept" DIRECTV's satellite signals in violation of §§ 2511(a)(1) and 2520(a) merely by evidence of purchase of a pirate access device.
DIRECTV's claim for damages for intentionally intercepting and disclosing its communications must be dismissed for failing to set forth facts in support of all the elements of the pertinent statutory provisions, specifically, the definition of "intercept," which "means the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4). See Sanders v. Robert Bosch Corp., 38 F.3d 736, 742-43 (4th Cir. 1994) (concluding that no interception occurred because there was no evidence that any of the defendant's employees "ever listened to, recorded, or otherwise acquired any conversations"); Thomas v. Ohio Dept. of Rehab. Con., 36 F. Supp.2d 997, 999 (S.D. Ohio 1998) ("There is no interception by a person or entity that never acquires the contents of any conversation."). Furthermore, DIRECTV fails to allege facts to support claims that Swisher assisted others in intercepting its communication or used its transmissions in any manner. DIRECTV has failed to allege any facts that could later be the subject of evidentiary proof of Swisher's interception of its satellite programming. Therefore, it is recommended that DIRECTV's claims for damages for violations of § 2511 are dismissed for failure to allege the essential elements of such a claim.
In so ruling, the court is mindful that other district courts have ruled the other way and allowed other DIRECTV cases to survive a similar motion to dismiss. See, e.g., DIRECTV v. Cardona, 275 F. Supp.2d 1357, 1362 (M.D. Fla. 2003). There the court ruled that an allegation of a purchase of a pirate access device gives rise to an inference of unlawful interception. Given that DIRECTV ought to have other facts at its disposal through diligent prefiling investigation, such as whether Swisher had been and is not now a DIRECTV subscriber or whether he possesses other equipment necessary to intercept DIRECTV's proprietary signal, such as a satellite dish, the court disagrees with the ruling in Cardona and holds that mere factual allegation of purchase of a pirate access device and rote invocation of statutory language "upon information and belief" is insufficient to satisfy the pleading requirements of Rule 8. Therefore, it is recommended that DIRECTV's claim for violation of § 2511 be dismissed for failure to allege sufficient facts to state the essential elements of such a claim.
C. DIRECTV's Cause of Action for Violations of Virginia Common Law.
1. Count 4 — Civil Conversion.
DIRECTV claims that Swisher intentionally and unlawfully converted its satellite programming for his direct use, benefit and advantage, thereby depriving it of its proprietary interest. Virginia law defines the tort of conversion as "any wrongful exercise or assumption of authority . . . over another's goods, depriving him of their possession; [and any] act of dominion wrongfully exerted over property in denial of the owner's right, or inconsistent with it." Universal C.I.T. Credit Corp. v. Kaplan, 198 Va. 67, 75, 92 S.E.2d 359, 365 (1956) (internal citations omitted). See also, Federal Ins. Co. v. Smith, 63 Fed. Appx. 630, 632, 2003 WL 465569, at **2 (4th Cir. 2003). DIRECTV fails to set forth facts beyond the alleged purchase and possession of pirate access devices, for which there is no right to a private cause of action, as grounds for depriving it of its satellite programming through interception or other means. Furthermore, Virginia common law does not recognize a cause of action for conversion of intangible property absent connection to a tangible document such as a stock certificate or promissory note. E.g., United Leasing Corp., et al. v. Thrift Insurance Corp., et al., 247 Va. 299, 306, 440 S.E.2d 902, 906 (1994) (internal citations omitted). Therefore, DIRECTV's allegations fail to adequately plead a claim for damages for conversion under the common law of Virginia. It is recommended that DIRECTV's common law conversion claim be dismissed.
IV. CONCLUSION
For the foregoing reasons, the undersigned RECOMMENDS that Swisher's motion to dismiss be GRANTED and DIRECTV's complaint be DISMISSED in its entirety without prejudice. It is further RECOMMENDED that plaintiff be granted leave to amend its complaint within 20 days of an Order by the district judge accepting this recommendation.
The Clerk is directed immediately to transmit the record in this case to the Hon. Samuel G. Wilson, Chief United States District Judge. Both sides are reminded that pursuant to Rule 72(b) they are entitled to note any objections to this Report and Recommendation within ten (10) days hereof. Any adjudication of fact or conclusion of law rendered herein by the undersigned not specifically objected to within the period prescribed by law may become conclusive upon the parties. Failure to file specific objections pursuant to 28 U.S.C. § 636(b)(1)(C) as to factual recitations or findings as well as to the conclusions reached by the undersigned may be construed by any reviewing court as a waiver of such objection.
The Clerk of the Court hereby is directed to send a certified copy of this Report and Recommendation to all counsel of record.