Opinion
03-CV-6241 CJS(F).
January 6, 2004.
DECISION AND ORDER
I. INTRODUCTION
Plaintiff DirecTV, Inc. ("DirecTV") alleges in a complaint filed on May 22, 2003, that each of the defendants has purchased and used Pirate Access Devices that are designed to permit viewing of DirecTV's scrambled television programming without authorization by or payment to DirecTV. The complaint seeks compensatory, statutory and other damages as well as injunctive relief pursuant to: the Federal Communications Act of 1934, as amended, 47 U.S.C. § 605; the Electronic Communications Privacy Act ("Federal Wiretap Laws"); and 18 U.S.C. § 2510-2521. The case is before the Court to decide applications to dismiss and sever by three of the defendants as follows:
(1) Jeffrey Lewis ("Lewis") moves (# 23) to dismiss the complaint for lack of jurisdiction, failure to state a cause of action and improper joinder;
Stephanie A. Cole, Esq., Lewis's attorney, filed what she titled, "Defendant Lewis' Memorandum in Support of Motion to Dismiss the Complaint." However, no Notice of Motion specifying the particular relief was filed. See Fed.R.Civ.P. 7(b)(1). The Court has, therefore, interpreted the Memorandum as a Notice of Motion.
(2) John M. Militello ("Militello"), in papers that echo Lewis's motion, moves (# 25) to dismiss the complaint for lack of jurisdiction, failure to state a cause of action and improper joinder;
(3) Anna Lavada Yancy ("Yancy"), in two separate motions, first moved (# 15) to sever the claims brought against her from the claims brought against all other defendants, and subsequently moved (# 45) to dismiss Count III.
Yancy's motion to sever (# 15), filed on June 26, 2003, was referred to Magistrate Judge Feldman for decision. In light of her motion (# 45) to dismiss Count III, subsequently filed on September 15, 2003, and the nearly identical motions filed by the other two defendants mentioned above, the Court, in consultation with Magistrate Judge Feldman and pursuant to 28 U.S.C. § 636(c)(4), hereby vacates the reference of Yancy's motion to sever in the interest of judicial economy and uniformity of decisions.
For the reasons stated below, the applications are granted in part, and denied in part.
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 offers its television programming to residential and business customers either by a subscription, or on a pay-per-view basis only. 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. 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 arrangement to purchase. Complaint ¶¶ 1-2.
On or about May 25, 2001, DirecTV executed several writs of seizure, with the assistance of local law enforcement, upon a mail shipping facility used by several major sources of pirate technologies, including Vector Technologies, DSS-Stuff, DSSPro, DSS-Hangout, Whiteviper Technologies, Meadco, PCEase, Intertek Technologies, Shutt, Inc., and Canadian Security and Technology. During and subsequent to the raids, DirecTV came into possession of a substantial body of sales and shipping records, e-mailed communications, credit card receipts, and other materials. Those records evidence defendants' purchases of illegally modified DirecTV Access Cards and other Pirate Access Devices. Complaint ¶ 3.
With regard to each of the three defendants in the pending motions, DirecTV alleges that he or she placed an order using interstate or foreign wire facilities, and received his or her order via the Postal Service or commercial mail carriers. More specifically, DirecTV claims the following: that on or about November 20, 2000, Lewis purchased a Pirate Access Device consisting of a printed circuit board device, called an Unlooper, from Vector Technologies, which was shipped to his home in Savannah, New York (Complaint ¶ 7); that on or about April 10, 2001, Militello purchased a Unlooper, from Canadian Security, which was shipped to his home address in East Rochester, New York (Complaint ¶ 11); and that on or about March 5, 2001, Yancy purchased a Unlooper from Vector Technologies, which was shipped to her current address in North Rose, New York (Complaint ¶ 13).
Based on the factual assertions in its complaint, DirecTV raises three claims against all defendants. As a First Claim, DirecTV alleges that each defendant has received and/or assisted others in receiving DirecTV's satellite transmissions of total programming without authorization, in violation of 47 U.S.C. § 605(a). As a Second Claim, DirecTV contends that by using Pirate Access Devices to decrypt and view DirecTV's satellite television transmissions, defendants intentionally intercepted, endeavored to intercept, or procured other persons to interceptor endeavor to intercept, DirecTV's satellite transmission of television programming in violation of 18 U.S.C. § 2511(1)(a). Finally, as a Third Claim, DirecTV maintains that defendants possessed and used Pirate Access Devices knowing or having reason to know that the design of such devices rendered them primarily useful for the purpose of surreptitious interception of DirecTV's satellite transmissions of television programming, and that such devices, or any components thereof, have been or will be sent through the mail or transported in interstate or foreign commerce, in violation of 18 U.S.C. § 2512(1)(b).
III. LEGAL STANDARDS
A. Motion to Dismiss
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).
B. Motion to Sever
Federal Rule of Civil Procedure 20 permits joinder of defendants where two requirements are met: first "there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences," and second, "if any question of law or fact common to all of them will arise in the action." FED. R. CIV. P. 20(a). The rule also provides that neither a plaintiff nor a defendant need be interested in obtaining or defending against all the relief demanded, that judgment may be given for or against individual parties according to their respective rights and duties, and that the court may order separate trials or otherwise protect the parties and prevent delay or prejudice. Fed.R.Civ.P. 20(b). "Originating in modern English procedure, it came to this country by way of the New York Civil Practice Act of 1921 and has been widely adopted, as in the codes of such states as California, Connecticut, Illinois, and Pennsylvania, as well as in the fifteen jurisdictions which have adopted the federal rules in toto. It substitutes principles of trial convenience and efficiency for rigid rules of interrelationship of parties." Nagler v. Admiral Corporation, 248 F.2d 319, 327 (2d Cir. 1957).
Of the two requirements, transactional relatedness and common question of law or fact, the former is the more difficult to show. "There is no bright-line definition of 'transaction,' 'occurrence,' or 'series.' Instead, courts evaluate the facts of each case individually to determine whether joinder is sensible in light of the underlying policies of permissive party joinder. In making this assessment, courts recognize that the focus on transactional relatedness is not unique to Rule 20." 4 MOORE'S FEDERAL PRACTICE, § 20.05[1] (Matthew Bender 3d ed.) (internal citations omitted).
The courts' flexible approach to transactional relatedness assesses whether, in view of the theories asserted and the facts alleged, joinder is fair. In other words, although there might be different occurrences, the claims involve enough related operative facts to make joinder in a single case fair. On the other hand, courts properly refuse joinder when claims, while legally similar, are factually distinct.Id. at § 20.05[3] (internal citations omitted). See also United States ex rel. Saunders Concrete Co. v. Tri-State Design Constr. Co., 899 F. Supp. 916, 918 (N.D.N.Y. 1995) (transactional relatedness satisfied in suit joining supplier and inspector alleging breach of contract for defective concrete); United States v. Yonkers Bd. of Educ., 518 F. Supp. 191, 195 (S.D.N.Y. 1981) (no rigid rule; allegations must be logically related); Vulcan Soc'y of Westchester County v. Fire Dep't of White, 82 F.R.D. 379, 387 (S.D.N.Y. 1979) (no rigid rule); Hall v. E.I. Du Pont De Nemours Co., 345 F. Supp. 353, 381 (E.D.N.Y. 1972) (no rigid rule about transactional relatedness; court looks for enough ultimate factual occurrences so that joinder is fair).
IV. ANALYSIS
Defendants Militello and Lewis are moving to dismiss DirecTV's complaint entirely for lack of jurisdiction, for failure to state a cause of action, and for improper joinder. Defendant Yancy is moving to dismiss the Third Claim for failure to state a cause of action, and to sever the claims against her from the other claims against the remaining defendants. The Court will first address defendants' motions to dismiss for failure to state a cause of action pursuant to Fed.R.Civ.P. 12(b)(6).
A. First Claim — 47 U.S.C. § 605(a)
DirecTV's first claim is that defendants violated 47 U.S.C. § 605 (a). That section prohibits, inter alia, the unauthorized receipt and publication of any radio communication. Militello and Lewis admit that DirecTV's complaint evokes the language of § 605(a) with regard to unauthorized publication or use of communications, but claim the complaint is deficient because it does not allege a time, place, instance or duration of reception. DirecTV responds that pursuant to Federal Rule of Civil Procedure 8(a), it has pleaded a "short and concise statement of the claim showing that the pleader is entitled to relief." The Court agrees with DirecTV. The complaint alleges that each defendant purchased and used a Pirate Access Device and that each received or assisted others in receiving DirecTV's satellite transmissions of television programming without authorization.
Since the Court must view the complaint, and draw all reasonable inferences, in the light most favorable to the non-moving party, the Court determines that under Rule 8(a), DirecTV's allegations are sufficient to defeat a motion to dismiss under Rule 12(b)(6). Further, defendants' reliance on Entertainment by JJ v. Friends II, Inc., No. 02 Civ. 585 (JES) (RLE), 2003 U.S. Dist. LEXIS 7229 (S.D.N.Y. Apr. 25, 2003), and Cable Vision Systems New York City Corp. v. Marcus Brown and Beauty Salon Supply, No. 00 Civ. 8260 (GEL)(KNF), 2003 U.S. Dist. LEXIS 6038 (S.D.N.Y. Apr. 2, 2003), is misplaced. Neither case concerned a rule 12(b)(6) issue. Defendants also cited to DirecTV, Inc. vs. Karpinski, 269 F. Supp.2d 918 (E.D. Mich. 2003), but that case concerned a motion for summary judgment and not a 12(b)(6) ruling. Thus, Militello's and Lewis's motions to dismiss theFirst Claim are denied.
B. Second Claim — 18 U.S.C. § 2511
Lewis and Militello also argue that DirecTV has failed to state a cause of action under 18 U.S.C. § 2511(1)(a). They claim that because DirecTV has failed to allege that Lewis and Militello intercepted, disclosed, or intentionally used DirecTV's electronic communication, the Second Claim should be dismissed under Rule 12(b)(6). As stated above, the Court determines that DirecTV has sufficiently alleged that defendants intentionally intercepted, endeavored to intercept, or procured other persons to interceptor endeavor to intercept, DirecTV's satellite transmission of television programming in violation of 18 U.S.C. § 2511(1)(a). Thus, Lewis's and Militello's motions to dismiss the Second Claim are denied.
As discussed more fully below, 18 U.S.C. § 2520 creates a private right to sue for violations of 18 U.S.C. § 2511.
C. Third Claim — 18 U.S.C. § 2512
Title 18, § 2520 creates a private right of action for damages and provides in pertinent part as follows:
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). "This chapter" refers to Chapter 119, Wire and Electronic Communications Interception and Interception of Oral Communications. Also in Chapter 119 is § 2512, which prohibits the manufacture, distribution, possession, and advertising of wire, oral, or electronic communication. That section reads in pertinent part as follows:
(1) Except as otherwise specifically provided in this chapter, any person who intentionally — . . .
(b) manufactures, assembles, possesses, or sells any electronic, mechanical, or other 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, and that such device or any component thereof has been or will be sent through the mail or transported in interstate or foreign commerce; or . . .
shall be fined under this title or imprisoned not more than five years, or both.18 U.S.C. § 2512(1)(b). DirecTV argues that if a defendant meets the requirements of § 2520, that is, if he or she is an individual who has intercepted, disclosed, or intentionally used a wire, oral or electronic communication, then a private plaintiff can sue for damages for any other violation of Chapter 119 that defendant has committed.
Prior to its amendment by Section 103 of Public Law 99-508, Title 18 U.S. Code § 2520 read in pertinent part as follows:
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 —
(a) actual damages but not less than liquidated damages computed at the rate of $100 a day for each day of violation or $1,000, whichever is higher;
(b) punitive damages; and
(c) a reasonable attorney's fee and other litigation costs reasonably incurred.
Historical and Statutory Notes, 1986 Amendments, 18 U.S.C. § 2520 (West 2000) at 284.
As previously stated, the present statute reads in pertinent part as follows:
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). Some courts have found that the 1986 amendment effectively created a private right of action to enforce all of Chapter 119. See, e.g., DirecTV v. Drury, No. 8:03-CIV-850T17-TGW, 2003 WL 22245388 (M.D. Fla. Jun. 26, 2003). Moreover, various courts have concurred with this reasoning. See DirecTV v. Gatsiolis, No. 03 C 3534, 2003 WL 22111097 (N.D. Ill. Sep. 10, 2003); DirecTV v. Perez, 279 F. Supp.2d 962 (N.D. Ill. 2003); DirecTV v. Calamanco, No. 5:02-CV-4102-MWB, 2003 WL 21956187 (N.D. Iowa Jan. 21, 2003); DirecTV v. EQ Stuff, 207 F. Supp.2d 1077 (C.D. Calif. 2002); Oceanic Cablevision, Inc. v. M.D. Elecs., 771 F. Supp. 1019 (D. Neb. 1991).
However, other courts have reasoned that § 2520's language only created a private right of action for enforcement of § 2511. See, e.g., Flowers v. Tandy Corp., 773 F.2d 585 (4th Cir. 1985); DirecTV v. Westendorf, No. 03 C 50210, 2003 U.S. Dist. LEXIS 16236, 2003 WL 22139786 (N.D. Ill. Sep. 16, 2003); DirecTV v. Hosey, No. CIV.A.03-2278-GTV, 2003 WL 22463055 (D. Kan. Sep. 11, 2003); DirecTV v. Childers, 274 F. Supp.2d 1287 (M.D. Ala. 2003); DirecTV v. Cardona, 275 F. Supp.2d 1357 (M.D. Fla. 2003); DirecTV v. Amato, 269 F. Supp.2d 688 (E.D. Va. 2003).
When interpreting a statute, the Court's starting point is the plain language of the statute. United States v. Reynoso, 239 F.3d 143, 146 (2d Cir. 2000). "If the words of a statute are unambiguous, judicial inquiry should end, and the law interpreted according to the plain meaning of its words." Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1073 (2d Cir. 1993).
The Court's reading of the plain language of § 2520 indicates that a private right of action exists against all who intercept, disclose, or intentionally use another's electronic communication in violation of Title 18, Chapter 119, or, more specifically, 18 U.S.C. § 2511 (making it illegal to intentionally intercept an electronic communication). The Court is unpersuaded by plaintiff's argument that the present § 2520 merely relates to the standing of a private party to enforce every section of Chapter 119 against anyone who has at least intercepted an electronic communication, as urged by the reasoning in DirecTV, Inc. vs. Perez, 279 F. Supp.2d 962. The Court finds more persuasive the decision in Westendorf, where the district court wrote,
[t]he words "in violation of this chapter" clearly qualify any interception, disclosure or intentional use. The court does not read such words so broadly as to give rise to a cause of action for any violation of the chapter generally.DirecTV v. Westerdorf, 2003 U.S. Dist. LEXIS 16236, *3. The Court agrees that the plain language of the statute requires a plaintiff to prove that the individual sued has intercepted, disclosed, or intentionally used the plaintiff's wire, oral, or electronic communication and then, if that condition is met, the plaintiff may 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).
Therefore, DirecTV's Third Claim must be dismissed with regard to each of the three moving defendants, Lewis, Militello and Yancy.
D. Motion to Dismiss for Lack of Jurisdiction
Jurisdiction in this case is predicated on 28 U.S.C. § 1331, federal question jurisdiction. Lewis and Militello both argue that the Court should dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) since DirecTV has failed to sufficiently state a cause of action under either 47 U.S.C. § 605(a), or 18 U.S.C. § 2520. As discussed above, the Court has determined that DirecTV has sufficiently plead claims under both § 605 and § 2520; therefore, Lewis's and Militello's motions to dismiss for lack of jurisdiction are denied.
E. Improper Joinder
Finally, Lewis, Militello and Yancy argue that DirecTV has improperly joined all the defendants pursuant to Federal Rule of Civil Procedure 20. Lewis and Militello, relying on Nassau County Ass'n of Ins. Agents, Inc. v. Aetna Life Casualty Co., 497 F.2d 1151 (2d Cir. 1974), argue that the entire case should be dismissed, whereas Yancy argues that the claims against her should be severed from the remaining defendants.
As indicated above, Rule 20 requires that two conditions be met for permissive joinder: first, there must be asserted against those sought to be joined, jointly, severally, or in the alternative, some right to relief arising out of the same transaction, occurrence, or series of transactions or occurrences, and, two, a common question of law or fact. FED. R. CIV. P. 20(a); See Ginett v. Computer Task Group, Inc., 962 F.2d 1085, 1095 (2d Cir. 1992); 4 MOORE'S FEDERAL PRACTICE, § 20.02[1][a] (Matthew Bender 3d ed.). "[T]he permissive party joinder rule emphasizes pragmatism; joinder is based not on arcane historic formulations of legal relationships, but on common sense, fact-based considerations." 4 MOORE'S, § 20.02[1][a]. Notwithstanding joinder under Rule 20, the Court may hold separate trials and enter separate judgments. Id. at § 20.02[1][d]; Fed.R.Civ.P. 20(b). "Misjoinder of parties is not ground for dismissal of an action." Fed.R.Civ.P. 21. Instead, the proper remedy is severance. See 4 MOORE'S, § 20.02[6][c]. The requirement for commonality can be satisfied even if there is only one common question of either law or fact. See A.M. Alexander v. Fulton County, Ga., 207 F.3d 1303, 1323 (11th Cir. 2000); Blesedell v. Mobile Oil Co., 708 F. Supp. 1408, 1422 (S.D.N.Y. 1989).
DirecTV has alleged that its claims arose from a common transaction or occurrence. The Court finds that Lewis and Militello, who have moved to dismiss for improper joinder, and Yancy, who has moved to sever, are all alleged to have purchased a Pirate Access Device called an Unlooper from Vector Technologies, and in each defendant's case, the device was allegedly sent to the defendant's home. Defendant Timothy A. Bonney, who is not before the Court on this motion, is alleged to have purchased an Unlooper from Canadian Security on or about April 17, 2001 and another on or about May 15, 2001. Defendant Dan Poormon, also not a participant in this motion, is alleged to have purchased an Unlooper from Vector Technologies on or about November 27, 2000. Defendant Joseph Badamo, not a party to this motion, is alleged to have purchased two Pirate Access Devices called Emulators from Vector Technologies on or about March 5 and 12, 2001. Other defendants share some common facts, but the Court notes that the only commonality among all the defendants in this case is the allegation that they received their Pirate Access Devices (Unlooper, Emulator or Programmer) through the same mail shipping facility: Fulfillment Plus in California. Foster decl. (# 49) at 3. In some cases, the purchases are alleged to have been made primarily from Vector Technologies, but in the cases of defendants Bonney and Militello, DirecTV alleges they made their purchases from Canadian Security. The Pirate Access Devices were either Unloopers, Emulators, or in one case, a Programmer. None of the purchasers is alleged to have acted in concert with another, and the dates of the alleged purchases are dissimilar. With regard to the portion of Rule 20 requiring the claims to "aris[e] out of the same transaction, occurrence, or series of transactions or occurrences," the Court finds that DirecTV has not satisfied the test for permissive joinder under Rule 20. See Pergo, Inc. v. Alloc, Inc., 262 F. Supp.2d 122, 128 (S.D.N.Y. 2003) (plaintiff bears the burden to satisfy either of the tests for permissive joinder on a motion to sever). Therefore, the Court grants Yancy's motion to sever, pursuant to Federal Rule of Civil Procedure 21, and denies Lewis's and Militello's motions to dismiss. Even though Lewis and Militello did not ask for alternative relief in their severance motions, Federal Rule of Civil Procedure 21 grants the Court authority to order severance on its own motion. Thus, the Court severs their cases as well. All three actions will proceed separately before this Court.
V. CONCLUSION
In light of the above analysis, the Court grants the application of Lewis (# 23), Militello (# 25) and Yancy (# 45) to dismiss, but only to the extent of dismissing DirecTV's Third Claim alleging violations of 18 U.S.C. § 2512(1)(b) for possession of Pirate Access Devices. Complaint ¶¶ 29-31. Militello's (# 25) and Lewis's (# 23) motions to dismiss the entire complaint are denied. Further, the Court denies Lewis's (# 23) and Militello's (# 25) motions to dismiss the complaint for improper joinder. Yancy's motion (# 15) to sever the claims against her from the claims against all other defendants is granted. Finally, the Court orders that the allegations against Lewis be severed from the claims against all other defendants, and that the allegations against Militello also be severed from the claims against all other defendants.
IT IS SO ORDERED.