Opinion
Civ. No. 03-4242 (RHK/AJB).
August 16, 2004
Henry M. Helgen III, McGrann Shea Anderson Carnival Straughn Lamb, Chartered, Minneapolis, Minnesota, for Plaintiff.
John Marinac, pro se, for Defendant.
MEMORANDUM OPINION AND ORDER
Introduction
Plaintiff DirecTV, Inc. ("DirecTV") alleges that Defendant John Marinac has received and intercepted its satellite transmissions in violation of Federal law. Marinac has moved to dismiss two counts of DirecTV's three-count Complaint on the grounds that there is no private right of action for the alleged violations. For the reasons set forth below, the Court will grant Marinac's motion in part and deny it in part.
Background
DirecTV is a California corporation with its principal place of business in California. DirecTV provides television programming to millions of subscribers in the United States through a direct broadcast satellite system. To provide security and prevent unauthorized viewing of its programming, DirecTV encrypts, or scrambles, its satellite transmissions. Those authorized to view DirecTV programming are required to create an account, obtain a DirecTV Access Card, and purchase other system hardware, including a small satellite dish. Upon activation of the Access Card by DirecTV, the subscribing customer can de-encrypt DirecTV's satellite signal and view its television programming.Despite these security measures, several companies sell modified DirecTV Access Cards and other devices ("Pirate Access Devices") that permit the viewing of DirecTV's programming without authorization by, or payment to, DirecTV. In July 2001, DirecTV executed a Writ of Seizure at a mail shipping facility used by Canadian Security and Technology, which is a source of Pirate Access Devices, and it secured sales records, shipping records, email communications, credit card receipts, and other documents showing the sale and purchase of such devices. These records revealed that in July 2001 Marinac placed an order with Canadian Security and Technology through the interstate or foreign wire facilities and purchased one or more Pirate Access Devices. The device or devices were then delivered to Marinac's Duluth, Minnesota, address via the United States Postal Service or other commercial carriers.
Based on this information, DirecTV filed a three-count Complaint against Marinac. Count I alleges unauthorized reception of satellite signals, in violation of 47 U.S.C. § 605(a); Count II alleges unauthorized interception of electronic communications, in violation of 18 U.S.C. § 2511(1)(a); and Count III alleges possession of Pirate Access Devices, in violation of 18 U.S.C. § 2512(1)(b). Marinac has moved to dismiss Counts II and III under Rule 12(b)(6) of the Federal Rules of Civil Procedure on the grounds that there is no private right of action for violations of §§ 2511(1)(a) or 2512(1)(b).
DirecTV has agreed to dismiss its claim under Count III (violation of § 2512(1)(b)). (Pl.'s Mem. in Opp'n at 1.) This Court has previously determined that no private right of action for violations of § 2512(1)(b) exists and will dismiss Count III with prejudice. See DirecTV, Inc. v. Bertram, 296 F. Supp. 2d 1021 (D. Minn. 2003).
Standard of Review
Under Rule 12(b)(6), all factual allegations must be accepted as true and every reasonable inference must be made in favor of the complainant. Fed.R.Civ.P. 12(b)(6); see Midwestern Mach., Inc. v. Northwest Airlines, Inc., 167 F.3d 439, 441 (8th Cir. 1999); Carney v. Houston, 33 F.3d 893, 894 (8th Cir. 1994). "[D]ismissal under Rule 12(b)(6) serves to eliminate actions which are fatally flawed in their legal premises and destined to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City of St. Charles, Mo., 244 F.3d 623, 627 (8th Cir. 2001) (citation omitted). A cause of action "should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff cannot prove any set of facts in support of his claim that would entitle him to relief." Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, 740 (8th Cir. 2002) (citations omitted).Analysis
In Count II, DirecTV alleges that by using a Pirate Access Device to decrypt and view its satellite transmissions of television programming, Marinac "intentionally intercepted, endeavored to intercept, or procured other persons to intercept or endeavor to intercept, DIRECTV's satellite transmission of television programming, in violation of 18 U.S.C. § 2511(1)(a)." (Compl. ¶ 15.) Section 2511(1)(a) provides that a person commits a federal offense if he "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).
Although § 2511(1)(a) is a criminal statute, DirecTV argues that 18 U.S.C. § 2520 provides a private right of action. (Pl.'s Mem. in Opp'n at 3-4.) Section 2520(a) provides, in relevant part: "[A]ny 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 . . . engaged in that violation such relief as may be appropriate." 18 U.S.C. § 2520(a). Appropriate relief includes "(1) such preliminary and other equitable or declaratory relief as may be appropriate; (2) damages under subsection (c) and punitive damages in appropriate cases; and (3) a reasonable attorney's fee and other litigation costs reasonably incurred." Id. § 2520(b). Under subsection (c), damages are computed in two alternative ways, depending on whether the communication is encrypted or not. First, "if the conduct in violation of this chapter is the private viewing of a private satellite video communication that is not scrambled or encrypted," then the court assesses damages in one manner. See id. § 2520(c)(1) (emphasis added). Second,
[i]n any other action under this section, the court may assess as damages whichever is the greater of —
(A) the sum of the actual damages suffered by the plaintiff and any profits made by the violator as a result of the violation; or
(B) statutory damages of whichever is the greater of $100 a day for each day of violation or $10,000.Id. § 2520(c)(2) (emphasis added).
The language providing a civil cause of action in § 2520(a) — "any person whose wire, oral, or electronic communications is intercepted" — tracks § 2511(1)(a), which makes it a criminal offense for 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." It is therefore clear from the plain language of § 2520(a) that it provides a private right of action to enforce § 2511(1)(a). "The courts that have considered the issue have reached the same conclusion." DirecTV, Inc. v. Baker, 318 F. Supp. 2d 1113, 1116 (M.D. Ala. 2004) (citation omitted); see DirecTV, Inc. v. Treworgy, 373 F.3d 1124, 1127 (11th Cir. 2004) ("Because it creates a civil remedy, section 2520(a) properly defines both the victims for whose benefit the remedy exists and the offenders for whom liability is owed. The plaintiff is `any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter.' . . . The defendant is `the person or entity which engaged in that violation.'" (citations omitted)); Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) ("In order to recover under § 2520, plaintiff must show that defendants violated § 2511."); Flowers v. Tandy Corp., 773 F.2d 585, 589 (4th Cir. 1985) ("Congress . . . expressly provid[ed] in § 2520 a private cause of action for victims of actions made criminal in § 2511."); DirecTV, Inc. v. Rosario, No. 03 C 8515, 2004 WL 1510015, at *2 (N.D. Ill. July 6, 2004) (" 18 U.S.C. § 2520 expressly provides for a private cause of action for violations of § 2511."); DirecTV, Inc. v. Childers, 274 F. Supp. 2d 1287, 1288 (M.D. Ala. 2003) (denying motion to dismiss claim for violation of § 2511(1)); DirecTV, Inc. v. Beecher, 296 F. Supp. 2d 937, 940-43 (S.D. Ind. 2003) (same).
Despite the plain language of § 2520 and the contrary case law, Marinac argues that DirecTV has no private right of action to enforce § 2511(1)(a). He asserts that "[s]ection 2520(c) clearly identifies two worlds of satellite communication; one encrypted and the other not and applies damages only to violations of communications that are not scrambled or encrypted." (Def.'s Mot. to Dismiss Count II at 3.) Because DirecTV encrypts its communications, he continues, DirecTV cannot sue him for damages. (See id.) For this reading of the law he relies on In re DirecTV, Inc., 5:03-CV-692 (E.D.N.C. Jan. 20, 2004). In that case, the court dismissed DirecTV's claims for violations of § 2511 by determining that it "may not allege a violation of § 2511 by asserting a private cause of action under § 2520, as § 2520 applies only to private satellite video communication that is not scrambled or encrypted." Id. at 7 (relying upon 18 U.S.C. § 2520(c)(1)).
While DirecTV was a party to this Eastern District of North Carolina case, it was Marinac (a pro se defendant) who brought this decision to the Court's attention.
This Court respectfully declines to follow In re DirecTV because it focused solely upon § 2520(c)(1), which authorizes damages for the interception of unencrypted video communications, and in so doing did not reference § 2520(c)(2), which authorizes damages "[i]n any other action." This Court reads § 2520(c)(2) as providing courts with the discretion to award damages for the interception of encrypted communications. Compare 18 U.S.C. § 2520(c)(1), with 18 U.S.C. § 2520(c)(2); see DirecTV, Inc. v. Brown, 371 F.3d 814, 816-18 (11th Cir. 2004) (discussing the differing damage regimes under § 2520(c)(1) and (c)(2)); Reynolds v. Spears, 93 F.3d 428, 435 (8th Cir. 1996) (same).
The Court may assess damages whichever is the greater of (A) DirecTV's actual damages and any profits made by Marinac as a result of the violation, or (B) statutory damages of the greater of $100 a day for each day of violation or $10,000. 18 U.S.C. § 2520(c)(2). The Court has "broad discretion to award damages as authorized by the statute, or to award no damages at all."Reynolds v. Spears, 93 F.3d 428, 435 (8th Cir. 1996); see DirecTV, Inc. v. Brown, 371 F.3d 814, 816-18 (11th Cir. 2004). Under similar facts as alleged in this case, but in a default context, this Court denied DirecTV's request for statutory damages upon determining that $10,000 per violation of § 2520(1)(a) was excessive. See DirecTV, Inc. v. La, Civ. No. 03-5630 (D. Minn. May 19, 2004).
Conclusion
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS ORDERED that Defendant John Marinac's Motions to Dismiss (Doc. Nos. 6, 10) are GRANTED IN PART and DENIED IN PART so that:
1. Count II (unauthorized interception of electronic communications, in violation of 18 U.S.C. § 2511(1)(a)) of Plaintiff DirecTV's Complaint (Doc. No. 1) remains; and
2. Count III (possession of Pirate Access Devices, in violation of 18 U.S.C. § 2512(1)(b)) is DISMISSED WITH PREJUDICE.