Opinion
Case No. 8:03CV199.
August 30, 2004
MEMORANDUM AND ORDER
This matter is before the Court on the Defendant Bach Ngo's Motion to Dismiss Counts II and III of the Amended Complaint (Filing No. 94). Ngo, appearing pro se, filed a brief in support of his motion (Filing No. 95), and DirecTV, Inc., filed a brief in opposition (Filing No. 96).
In the Amended Complaint (Filing No. 8), DirecTV alleges that the Defendants have received and/or assisted others in receiving satellite transmissions without authorization in violation of 47 U.S.C. § 605(a) (Count I); intentionally intercepted or procured other persons to intercept, or endeavor to intercept, DirecTV's satellite transmission in violation of 18 U.S.C. § 2511(1)(a) (Count II); and possessed and used pirate access devices in violation of 18 U.S.C. § 2512(1)(b) (Count III). DirecTV asks for injunctive relief and statutory, compensatory and punitive damages.
For the reasons stated below, the Defendant's Motion to Dismiss is denied with respect to Count II and granted with respect to Count III.
STANDARD OF REVIEW
When considering a motion to dismiss, the court must view the factual allegations in the light most favorable to the plaintiff. Parnes v. Gateway 2000, Inc., 122 F.3d 539, 546 (8th Cir. 1997). Thus, this Court will, as it must, accept all factual allegations as true and draw all reasonable inferences in favor of the non-moving party. MMS Fin., Inc. v. NASD, Inc., 364 F.3d 908, 909 (8th Cir. 2004). 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. Iowa Network Servs. V. Qwest Corp., 363 F.3d 683, 694 (8th Cir. 2004).
FACTS
The Plaintiff, DirecTV, is a California corporation with a direct broadcast satellite system. (Filing No. 8 ¶ 1.) DirecTV offers television programming to residential and business customers on a subscription and pay-per-view basis. ( Id. ¶ 2.) To secure and prevent unauthorized viewing of its programming, DirecTV encrypts, or scrambles, its transmissions. With the appropriate access card and hardware, DirecTV customers view purchased programming in an unscrambled, decrypted format. ( Id.)
In May of 2001, with the assistance of local law enforcement, DirecTV executed several writs of seizure upon a mail shipping facility and seized sales records, shipping records, and other documentation providing evidence of the purchase of illegally modified DirecTV access cards and pirate access devices. ( Id. ¶ 3.)
The Defendants are all residents of Nebraska. Based upon the seized documentation, DirecTV alleges that the Defendants have purchased and used pirate access devices that are designed to permit the viewing of DirecTV's television programming without authorization from or payment to DirecTV. ( Id. ¶ 4.)
Specifically, DirecTV alleges that beginning in approximately April of 2001, Ngo purchased five pirate access devices that were shipped to Ngo at his address in Lincoln, Nebraska. ( Id. ¶ 10.)
DISCUSSION
Ngo asserts that both Count II, alleging a violation of 18 U.S.C. § 2511(1)(a), and Count III, alleging a violation of 18 U.S.C. § 2512(1)(b), state claims based on criminal violations for which there is no parallel civil cause of action. DirecTV argues that 18 U.S.C. § 2520(a) provides for a civil cause of action under both statutes where a plaintiff's communications have been intercepted in violation of the statute. (Filing No. 96 at 1.)
It is well-established that both Sections 2511and 2512 are criminal in nature. Oceanic Cablevision, Inc., v. M.D. Elec., 771 F. Supp 1019, 1026 (D. Neb. 1991); see also United States v. Davis, 978 F.2d 415 (8th Cir. 1992). Although the imposition of a criminal penalty does not preclude a private cause of action, the private cause of action must arise from a statute clearly indicating that the plaintiff is one of a class for whose benefit the statute was enacted. See Touche Ross Co. v. Redington, 442 U.S. 560, 575 (1979). "[C]ourts may not create [a private cause of action], no matter how desirable that might be as a policy matter, or how compatible with the statute," because that is a determination Congress alone can make. Alexander v. Sandoval, 532 U.S. 275, 286-87 (2001).
Background and Interpretation of 18 U.S.C. § 2520(a)
DirecTV asserts that 18 U.S.C. § 2520(a) authorizes a private civil cause of action for violations of Sections 2511(1)(a) and 2512(1)(b). To determine the congressional intent of Section 2520(a), this Court will review the language of the statute itself, its legislative history, and the underlying purpose and focus of the statute. See Northwest Airlines v. Transp. Workers Union, 451 U.S. 77, 91 (1981).
Section 2520(a) of the Federal Wiretap Act was amended by Section 103 of the Electronic Communications Privacy Act of 1986 ("ECPA"). Prior to the amendments, Section 2520 provided, in relevant part, that:
Any person whose wire or oral communication is intercepted, disclosed or used in violation of this chapter shall (1) have a civil cause of action against any person who intercepts, discloses, or uses, or procures any other person to intercept, disclose, or use such communications, and (2) be entitled to recover from any such person.18 U.S.C. § 2520, amended by Pub.L. 99-508, § 103, 100 Stat. 1848 (1986). The current, amended version of Section 2520(a) provides, in relevant part, that:
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 . . . which engaged in that violation such relief as may be appropriate.18 U.S.C. § 2520(a) (emphasis added).
In the amended version of Section 2520(a), Congress removed the phrase "procures any other person to intercept, disclose, or use such communications." This exclusion indicates that a private plaintiff no longer has a cause of action against a party who procures another person, but only against that party who intercepts, discloses, or intentionally uses a communication in violation of the Federal Wiretap Act.
District courts have construed Section 2520(a) in two different ways, concluding either that Section 2520(a) provides a private cause of action against any person or entity who violates the Federal Wiretap Act, or, adopting a more narrow construction, that Section 2520(a) authorizes a private cause of action only against any person or entity who intercepts, discloses, or intentionally uses a communication in violation of the Federal Wiretap Act.
For cases that support the first interpretation, see DirecTV v. Calamanco, 2003 U.S. Dist. LEXIS 21730 (N.D. Iowa 2003); DirecTV, Inc. v. Tasche, 316 F. Supp.2d 783 (E.D. Wis. 2004); DirecTV, Inc. v. Moreno, 2003 U.S. Dist. LEXIS 22219, No. 03-2478 (JEI) at *4 (D.N.F. Dec. 11, 2003); DirecTV, Inc. v. Gatsiolis, 2003 U.S. Dist. LEXIS 15801, No. 03 C 3534, at *2 (N.D. Ill. Sept. 10, 2003); DirecTV, Inc. v. Drury, 282 F. Supp.2d 1321 (M.D. Fla. 2003) (overruled by DirectTV, Inc. v. Treworgy, 373 F.3d 1124 (11th Cir. 2004). For cases that support the second interpretation, see DirecTV, Inc. v. Treworgy, 373 F.3d 1124 (11th Cir. 2004); DirecTV, Inc. v. Bertram, 296 F. Supp.2d 1021, 1023-26 (D. Minn. 2003); Peavy v. WFAA-TV, 221 F.3d 158, 169 (5th Cir. 2000); DirecTV, Inc. v. Floryance, 2004 U.S. Dist. LEXIS 15391, No 03-1103 (E.D. Wis., July 8, 2004); DirecTV, Inc. v. Roush, 2004 U.S. Dist. LEXIS 14590, No. 03-C-9047 (N.D. Ill. July 28, 2004); DirecTV, Inc. v. Barker, 2004 U.S. Dist. LEXIS 14743, No. 04-1938 (E.D. Penn. July 27, 2004).
DirecTV relies on Oceanic Cablevision, Inc. v. M.D. Electronics, 771 F. Supp. 1019, 1028-29 (D. Neb. 1991), and argues that the phrase "that violation" in Section 2520(a) refers to any violation of the Federal Wiretap Act. (Filing No. 96 at 11.) In Oceanic Cablevision, a cable television provider ("Oceanic") alleged that the defendants sold equipment capable of decoding or unscrambling the signals transmitted by Oceanic without payment or consent. Oceanic Cablevision, 771 F. Supp. at 1022. The court held that Section 2520(a) conferred a private cause of action upon the plaintiff when the action is brought against "parties that have violated the provisions of Sections 2510-2520 [the Federal Wiretap Act]." Id. at 1027.
The court in Oceanic Cablevision reasoned that the ECPA amended Section 2520 by "incorporating violations involving the interception, disclosure, or intentional use of electronic communications." Id. at 1027 (citation omitted). The Court also found that "the legislative history of the [Electronic] Communications Act of 1986 indicates that Congress intended to address the malicious interference with satellite transmissions and home viewing of private satellite transmissions." Id. at 1029 (citing S. Rep. No. 541, 99th Cong. 2d Sess. 6-7, reprinted in 1986 U.S.C.C.A.N. 3555, 3560-61).
Ngo relies on the position that Section 2520(a) does not provide a private cause of action for violations of the criminal proscriptions of Section 2512. Flowers v. Tandy Corp., 773 F.2d 585 (4th Cir. 1985). DirecTV argues that the Flowers statutory interpretation is inapposite because the amendments provided in the Electronic Communications Act of 1986 broadened Section 2520, which was the conclusion reached in Oceanic Cablevision, Inc. v. M.D. Electronics, 771 F. Supp. 1019, 1022 (D. Neb. 1991).
Although this Court agrees the legislative history corresponding with the ECPA indicates that Congress intended to include electronic communications in the Federal Wiretap Act, this does not establish that Section 2520(a) should apply to any violation of the Federal Wiretap Act. Upon further review of the text of Section 2520(a), this Court finds that the plain meaning of the statute defines the class of plaintiffs for whom the remedy exists as "any person whose wire, oral, or electronic communication is intercepted, disclosed or intentionally used in violation of this chapter." 18 U.S.C. § 2520(a). The defendant is anyone who "engaged in that violation." Id. (emphasis added). The phrase "in violation of this chapter" serves to modify the preceding verbs "is intercepted, disclosed, or intentionally used." 18 U.S.C. § 2520(a). It does not have an independent meaning from the verb it modifies. In addition, it is unreasonable to read "in violation of this chapter" without reading this in conjunction with the preceding phrase. Therefore, the 1986 amendments did not broaden Section 2520(a)'s scope to include all violations of the Federal Wiretap Act.
For a complete analysis of the sentence structure of Section 2520(a), see DirecTV, Inc. v. Floryance, 2004 U.S. Dist. LEXIS 15391.
Congress specifically used the phrase "except as provided in Section 2511(2)(a)(ii)." This exclusion, however, does not indicate that this is the only section of Chapter 119 not included under Section 2520(a), but rather supports the interpretation that Section 2520(a) refers only to illegal interceptions, disclosures, and uses of electronic communications. Section 2511(2)(a)(ii) provides that it shall not be unlawful for a person or agency to assist law enforcement officers in the interception, disclosure, and use of electronic communication under a lawful order. A careful parsing of Section 2520(a) leads this Court to conclude that Congress intended to authorize a civil cause of action only to those who have been the victims of an intentional interception, disclosure, or use, but not against those who have violated Section 2512.
Count II — 18 U.S.C. 2511(1)(a)
Section 2511(1)(a) provides that any person who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any . . . electronic communication" is subject to liability. 18 U.S.C. § 2511(1)(a). Section 2511(1)(b) and (c) similarly create liability for those who intentionally use a device to intercept an electronic communication or disclose the contents of an electronic communication. 18 U.S.C. § 2511(b-c). Simply stated, the violations described in Section 2520(a) are the same violations provided in Section 2511(1) (a-c). A federal civil cause of action arises when a person intentionally intercepts an electronic communication. Deal v. Spears, 980 F.2d 1153, 1156 (8th Cir. 1992). DirecTV alleges that Ngo intentionally intercepted, endeavored to intercept, or procured other persons to intercept or endeavor to intercept, DirecTV's satellite transmission of television programming. (Filing No. 8 at 9). Therefore, the Court concludes that DirecTV has a cause of action against Ngo for a violation of Section 2511(1)(a) in conjunction with 2520(a), and the Motion to Dismiss Count II of the Amended Complaint is denied.
Other circuits have acknowledged a similar interpretation of Sections 2511(1)(a) and 2520(a). See DirecTV v. Treworgy, 373 F.3d 1124 (11th Cir. 2004); United States of America v. Robert W. Lee, 359 F.3d 194, 202 (3d Cir. 2004); Company v. United States (In re United States), 349 F.3d 1132 (9th Cir. 2004); Doe v. GTE Corp., 347 F.3d 655, 658 (7th Cir. 2003); Quigley v. Rosenthal, 327 F.3d 1044, 1062-63 (10th Cir. 2003); Abraham v. County of Greenville, 237 F.3d 386, 389 (4th Cir. 2001); Peavy v. WFAA-TV, 221 F.3d 158, 168 (5th Cir. 2000) (finding civil liability for those who `intercept' but not for those who `procure' in violation of Section 2511(1)(a)); Arias v. Mutual Cent. Alarm Serv., 202 F.3d 553, 556-57 (2d Cir. 2000); Willisms v. Poulos, 11 F.3d 271, 274 (1st Cir. 1993).
Count III — 18 U.S.C. § 2512(1)(b)
Section 2512(1)(b) provides that a person commits a federal offense if he intentionally "manufactures, assembles, possesses or sells any . . . device, knowing or having reason to know that the design of such a device renders it primarily useful for the purpose of the surreptitious interception of . . . electronic communications. 18 U.S.C. § 2512(1)(b).
By specifically limiting the private cause of action authorized in Section 2520 to violations involving the intercepting, disclosing, or intentional use of electronic communications, Congress specifically excluded conduct mentioned in Section 2512, namely violations involving the manufacturing, assembling, possessing, or selling of devices. 18 U.S.C. § 2512. "[W]hen legislation expressly provides a particular remedy or remedies, courts should not expand the coverage of the statute to subsume other remedies." Nat'l R.R. Passenger Corp. v. Nat'l Ass'n of R.R. Passengers, 414 U.S. 453, 458 (1974); (quoted in Universities Research Ass'n, Inc. v. Coutu, 450 U.S. 754, 773 n. 24 (1981)). A statute limiting a thing to be done in a particular mode also includes the negative of any other mode. Transamerica Mortg. Advisors (TAMA) v. Lewis, 444 U.S. 11, 20 (citing Botany Mills v. United States, 278 U.S. 282, 289 (1929)).
DirecTV also argues that Ngo possessed or used a device in violation of Section 2512(1)(b), making DirectTV a party whose electronic communication had been "intercepted" or "intentionally used" in violation of Section 2511. The problem with this reasoning is that Section 2512(1)(b) prohibits the trafficking of access devices, and it is not the statue that prohibits interception or intentional use of an electronic communication. Section 2511(1)(a) and (b) clearly describe the violations of intercepting or intentionally using an electronic communication. "The fact that a defendant is alleged to have violated Section 2511 by using a device prohibited by Section 2512 does not transform a Section 2512 violation into an independent claim." DirecTV, Inc. v. Adrian, 2004 U.S. Dist. LEXIS 14101, at *8 (N.D. Ill., July 19, 2004).
Black's Law Dictionary defines use as "to make use of, to convert to one's service, to avail one's self of, to employ," and possess as "to have in one's actual and physical control; to have the exclusive detention and control of; to have and hold as property; to have a just right to; to be master of; to own or be entitled to." The terms use and possession have distinct meanings and will not be interpreted by this Court as being synonymous. The actual use of a device, rather than the mere possession of such a device, is required to trigger a private right of action under Section 2511(1)(a)-(c).
Because I conclude that violations of Section 2512(1)(b) do not create a private civil cause of action authorized by Section 2520(a), Count III of the Amended Complaint is dismissed.
IT IS ORDERED:
1. The Defendant Bach Ngo's Motion to Dismiss (Filing No. 94) is denied with respect to Count II and granted with respect to Count III of the Amended Complaint; and
2. The Court will consider Defendant Bach Ngo's Motion for Summary Judgment on all remaining counts after it has been briefed by the Plaintiff.