Opinion
03-CV-6590-CJS.
March 29, 2005.
Paul I. Perlman, Esq., Hodgson Russ, LLP, Buffalo, NY, John Jamnback, Esq., Yarmuth Wilsdon Calfo PLLC, Seattle, WA, for plaintiff.
Stephanie A. Cole, Esq., Bloom, Cole, Neubeck Shonn, LLP, Buffalo, NY, for defendant Adam Mandelaro.
DECISION AND ORDER
I. INTRODUCTION
Plaintiff DirecTV, Inc. ("DirecTV") alleges in a four-count complaint filed on November 24, 2003, that defendant Adam Mandelaro ("Mandelaro") has violated, inter alia 47 U.S.C. § 605(e)(4) (second cause of action), and 18 U.S.C. § 2512(1)(b) (fourth cause of action) by purchasing and using Pirate Access Devices that are designed to permit viewing of DirecTV's scrambled television programming without authorization by or payment to DirecTV. Subsequent to the filing of the motion, the parties stipulated to dismiss the fourth cause of action. The case is therefore before the Court on Mandelaro's motion to dismiss the second cause of action pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, the application is denied.
II. FACTUAL BACKGROUND
DirecTV alleges that it is the nation's leading direct broadcast satellite system, delivering more than 225 channels of television and other programming to more than ten million homes and businesses in the United States. DirecTV encrypts — electronically scrambles — its satellite transmissions to provide security for and prevent unauthorized viewing of its satellite television programming. DirecTV states in its complaint that it offers its television programming to residential and business customers either by a subscription, or on a pay-per-view basis only, and that each customer is required to obtain a DirecTV Access Card and other system hardware (including a small satellite dish) and create an account with DirecTV. DirecTV further alleges that upon activation of the Access Card by DirecTV, the customer can receive and view in a decrypted format ( i.e., unscrambled) those channels to which the customer has subscribed or otherwise made arrangements to purchase. (Complaint ¶¶ 1-2.)
DirecTV states in the complaint that, on or about November 29, 2001, it executed, with the assistance of the U.S. Marshal Service, writs of seizure in an unrelated case pending in the Central District of California. During and subsequent to the raids, DirecTV states it came into possession of a substantial body of sales and shipping records, email communications, credit card receipts, and other records. DirecTV alleges that those records evidence Mandelaro's purchases of illegally modified DirecTV Access Cards and other pirate access devices. (Complaint ¶ 3.) DirecTV further alleges that Mandelaro purchased and used pirate access devices designed to permit viewing of DirecTV's television programming without authorization by or payment to DirecTV. (Complaint ¶ 4.) DirecTV's second cause of action, which is the subject of plaintiff's motion to dismiss, complaint raises four claims, states in relevant part,
Defendants have imported, or caused to be imported to the United States, manufactured, assembled, modified, sold or distributed signal theft devices, knowing or having reason to know that the design of such devices render them primarily for the unauthorized decryption of DirecTV's satellite transmissions of television programming, or intended to assist other persons in the unauthorized reception of DirecTV's satellite transmission of television programming, in violation of 47 U.S.C. § 605(e)(4).
(Complaint ¶ 17.)
III. LEGAL STANDARD
To prevail on a motion to dismiss under Federal Rule of Civil Procedure 12, a defendant must show that the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. See H.J. Inc. v. Northwest Bell Telephone Co., 492 U.S. 229, 249 (1989); see also 2 MOORE'S FEDERAL PRACTICE, § 12.34[1][a] (Matthew Bender 3d ed.). The Court must view the complaint, and draw all reasonable inferences, in the light most favorable to the non-moving party. Id.; see also 2 MOORE'S FEDERAL PRACTICE, § 12.34[1][b] (Matthew Bender 3d ed.) (court must accept plaintiff's factual allegations as true).
Federal Rule of Civil Procedure 8 applies to all civil actions, with certain specified exceptions not applicable here, and "provides that a complaint must include only 'a short and plain statement of the claim showing that the pleader is entitled to relief.' Such a statement must simply 'give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'" Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-13 (2002) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). As the Supreme Court stated in Swierkiewicz, "[t]his simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Id. (internal quotations and citations omitted).
ANALYSIS
Mandelaro moves to dismiss DirecTV's second claim for failure to state a cause of action. Applying the standards of Rule 8, the Court finds that the Second Cause of Action is sufficient to give Mandelaro fair notice of the claim and the grounds upon which it rests.
DirecTV's Second Claim pleads a cause of action under 47 U.S.C. § 605(e)(3)(A) and (e)(4) (2004), which state in pertinent parts as follows:
§ 605. Unauthorized publication or use of communications
(e) Penalties; civil actions; remedies; attorney's fees and costs; computation of damages; regulation by State and local authorities.
* * *
(3) (A) Any person aggrieved by any violation of subsection (a) or paragraph (4) of this subsection may bring a civil action in a United States district court or in any other court of competent jurisdiction.
* * *
(4) 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. For purposes of all penalties and remedies established for violations of this paragraph, the prohibited activity established herein as it applies to each such device shall be deemed a separate violation.47 U.S.C. § 605(e) (2004).
Mandelaro argues that DirecTV has failed to allege in its complaint that he sold illegal access devices in a geographic area served by DirecTV. (Pl.'s Mem. in Supp't of Mot. to Dism. at 3-4.) Relying on V Cable, Inc. v. Guercio, 148 F. Supp. 2d 236 (E.D.N.Y. 2001), Mandelaro argues this is a fatal defect of pleading since, "nowhere in the Complaint does the Plaintiff describe the specific area it serves." (Pl.'s Mem. in Supp't of Mot. to Dism. at 4.)
In V Cable, Inc., the Eastern District, following a bench trial in a case brought under the statute at issue here, made findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52. The court determined that, unless the plaintiff proved that sales by the defendant were to customers within its market area, it was not a "person aggrieved" under the applicable statutes, particularly 47 U.S.C. § 605(e)(3)(A). Id. at 243.
DirecTV correctly points out that Mandelaro fails to cite any authority for its proposition that, under the pleading standard in Rule 8, DirecTV must allege the factual basis required under 47 U.S.C. § 605(e)(3)(A). (Def.'s Mem. of Law in Response to Def.'s Mot. to Dism. at 2.) In the alternative, DirecTV responds that it has alleged that its market is the United States, of which the Western District of New York is a part.
Congress has provided that "any person aggrieved" by any violation of § 605(a) may bring a civil action in a United States district court. 47 U.S.C. § 605(e)(3)(A) (1991 Supp. 1997). The statute defines the phrase "any person aggrieved" to "include any person with proprietary rights in the intercepted communication by wire or radio, including wholesale or retail distributors of satellite cable programming. . . ." 47 U.S.C. § 605(d)(6) (1991 Supp. 1997). This is further supported by the legislative history of the 1984 amendments to Section 605:
[T]he term "any person aggrieved" shall be broadly interpreted by the courts in such cases and shall include those with any rights in the intercepted radio communications. Such persons would include but are not limited to, owners of the programming being transmitted as well as senders of the signal embodying the programming transmitted. Thus, the Committee amendment provides an explicit right of action for any person aggrieved by the violations of Section [605(a)].
H.R. Rep. No. 934, 98th Cong., 2d Sess., 83, reprinted in 1984 U.S.C.C.A.N. 4750, quoted in Joe Hand Promotions, Inc. v. Rennard Street Enterprises, Inc., 975 F. Supp. 746, 753 (E.D.Pa. 1997).
Considering the broad interpretation envisioned by Congress, along with DirecTV's allegations that Mandelaro's actions were specifically tied to decrypting DirecTV's satellite transmissions and that it markets its services to the entire country, the Court finds that the Second Claim is sufficiently pled under Rule 8.
V. CONCLUSION
Mandelaro's motion to dismiss the Second Claim is denied and his motion to dismiss the Fourth Claim is moot, since that claim has previously been dismissed by stipulation of the parties.
IT IS SO ORDERED.