Opinion
3:03-CV-00658-P, 3:03-CV-00661-P, 3:03-CV-01101-P, 3:03-CV-01107-P, 3:03-CV-01134-P, 3:03-CV-01938-P, 3:03-CV-02065-P, 3:03-CV-02066-P.
July 1, 2004
FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Defendants Raquel Alvarez, Curtis George, Morgan McReynolds, Tam Troung, Samuel Laffel, Fred Free, William S. Palmer, and Paul Beauregard have filed a joint motion to dismiss this cable piracy case for failure to state a claim upon which relief can be granted. For the reasons set forth herein, the motion should be denied.
Paul Bramlett, Steve Kennedy, Victor Palmer, Phillip Elkins, Jennifer Adams, Keith Dreyer, Alton Parker, and John Ervin also joined in defendants' motion to dismiss. As a result of subsequent developments, these defendants are no longer affected by the court's resolution of the motion. Bramlett, Kennedy, Adams, Parker, and Ervin have settled with plaintiff and were dismissed from their respective lawsuits. The court entered final default judgments against Victor Palmer and Elkins as a result of their failure to participate in mediation and attend a status conference. All proceedings against Dreyer were stayed when he filed for bankruptcy. Therefore, the only defendants who still seek dismissal are Raquel Alvarez, Curtis George, Morgan McReynolds, Tam Troung, Samuel Laffel, Fred Free, William S. Parker, and Paul Beauregard.
I.
These cases are among more than 50 lawsuits brought by plaintiff against purchasers and users of devices and equipment designed to gain unauthorized access to satellite television programming. Plaintiff DirecTV, Inc. distributes television broadcasts to subscribers throughout the United States by transmitting digital signals to satellites, which then relay the signals to fixed outdoor satellite dishes located at the subscribers' homes or businesses. (Plf. Compl. at 2, ¶ 2). In order to prevent unauthorized access to its programming, plaintiff uses encryption technology to digitally scramble the satellite signals. ( Id. at 2, ¶ 3). The signals can be unscrambled only by a programmable access card contained within the satellite dish. ( Id.). Plaintiff programs the access card based on the level of service paid for by the subscriber in a given month. Channels and programming that have not been paid for remain blocked. ( Id. at 3, ¶ 4).
Despite the encryption technology used by plaintiff to protect its satellite signals, the market has been flooded with devices and equipment that can be used to surreptitiously pirate satellite signals. ( Id. at 3, ¶ 5). The use of such devices provides the user with access to all of plaintiff's programming without paying a fee. ( Id.). The defendants named in these lawsuits allegedly purchased and used one or more of these pirate access devices to receive, unscramble, and exhibit encrypted satellite programming transmissions without authorization. In this litigation, plaintiff seeks damages and injunctive relief against defendants under the federal and Texas wiretap statutes. Defendants now move to dismiss plaintiff's claims under the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq., and the Texas Wiretap Act, TEX. CIV. PRAC. REM. CODE ANN. § 123.001, et seq. The issues have been briefed by the parties and the motion is ripe for determination.
II.
A motion to dismiss under Fed.R.Civ.P. 12(b)(6) "is viewed with disfavor and is rarely granted." Lowrey v. Texas AM University System, 117 F.3d 242, 247 (5th Cir. 1997), quoting Kaiser Aluminum Chemical Sales, Inc. v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir. 1982), cert. denied, 103 S.Ct. 729 (1983). A district court may dismiss a complaint "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984). The complaint must be liberally construed in favor of the plaintiff and the allegations contained therein must be taken as true. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
The exacting standards governing Rule 12(b)(6) motions must be considered in light of the liberal pleading requirements of Fed.R.Civ.P. 8(a). In what has been characterized as a "seminal pleading case," the Supreme Court has reminded lower courts that, in order to survive a motion to dismiss, a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 922, 998, 152 L.Ed.2d 1 (2002), quoting FED. R. CIV. P. 8(a)(2). This simplified pleading standard applies to all civil actions. Id., 122 S.Ct. at 998. Except in a limited set of cases, a plaintiff is not required to plead facts supporting each and every element of his claim or legal theory. Id. Rather, a complaint is sufficient if it "give[s] the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id., quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957). See also Higgs v. Carver, 286 F.3d 437, 439 (7th Cir. 2002) (interpreting Swierkiewicz to mean that "[a] complaint that complies with the federal rules of civil procedure cannot be dismissed on the ground that it is conclusory or fails to allege facts"). Liberal discovery rules and summary judgment motions, not motions to dismiss, should be used to define disputed facts and issues and to dispose of unmeritorious claims. See Swierkiewicz, 122 S.Ct. at 998.
These exceptions are found in Rule 9(b), which provides:
In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.
FED. R. CIV. P. 9(b).
A.
Title III of the Omnibus Crime Control and Safe Streets Act of 1968, as amended by the Electronic Communications Privacy Act of 1986, 18 U.S.C. § 2510, et seq., imposes criminal liability on any person who, inter alia, "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). The statute also authorizes a private right of action on behalf of "any person whose wire, oral, or electronic communication is intercepted . . . in violation of this chapter." Id., § 2520(a); see also DirecTV, Inc. v. Amato, 269 F. Supp.2d 688, 689 (E.D. Va. 2003). The remedies available to a private litigant under section 2520 include equitable and declaratory relief, actual and punitive damages, reasonable attorney's fees, and litigation costs. 18 U.S.C. § 2520(b).Defendants contend that plaintiff cannot recover damages under this statute because a private right of action exists only if the intercepted video communication is not scrambled or encrypted. This argument ignores the plain language of section 2520(c). Where the alleged violation of the statute involves the private viewing of a private satellite video communication that is not scrambled or encrypted and is not for a tortious or illegal purpose or for purposes of direct or indirect commercial advantage or private commercial gain, recovery is limited to the greater of actual damages or statutory damages of not more than $500 for a first offense or $1,000 for a subsequent offense. Id., § 2520(c)(1). The statute further provides:
In any other action under this section, the court may assess as damages whichever is the greater of —
(A) the sum of 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). "Any other action" clearly encompasses the interception of a scrambled or encrypted signal. See DirecTV, Inc. v. Barnes, 302 F. Supp.2d 774, 781 n. 5 (W.D. Mich. 2004). See also United States v. Shriver, 989 F.2d 898, 903 (7th Cir. 1993) (explaining that 1986 amendments to federal wiretap law did not alter punishment scheme for intentional interception of scrambled or encrypted signals). Plaintiff is entitled to sue for statutory or actual damages under 18 U.S.C. § 2520(c)(2).
B.
Defendants also seek dismissal of plaintiff claims under the Texas Wiretap Act, TEX. CIV. PRAC. REM. CODE ANN. § 123.001, et seq. (Vernon 1997). This statute authorizes a private cause of action against a person who, inter alia, "intercepts, attempts to intercept, or employs or obtains another to intercept or attempt to intercept a communication." Id. § 123.002(a). "'Communication' means speech uttered by a person or information including speech that is transmitted in whole or in part with the aid of a wire or cable." Id., § 123.001(1). "'Interception' means the aural acquisition of the contents of a communication through the use of an electronic, mechanical, or other device that is made without the consent of a party to the communication, . . ." Id., § 123.001(2).
Defendants first contend that plaintiff's satellite broadcasts do not constitute "speech uttered by a person." Assuming that this is true, the statute also protects " information . . . that is transmitted in whole or in part with the aid of a wire or cable." Id., § 123.001(1) (emphasis added). Plaintiff's satellite broadcasts conceivably fall within this broad category.
In a related argument, defendants maintain that the Texas wiretap statute protects only private communications, not satellite broadcasts. The court disagrees. The elements of a wiretap claim are: (1) that defendants intercepted or attempted to intercept, (2) by using an electronic, mechanical, or other device, (3) the contents of speech uttered by plaintiff, (4) without the consent of at least one party to the communication. Stephens v. Dolcefino, 126 S.W.3d 120, 133 (Tex.App.-Houston [1st Dist.] 2003, pet. denied). Privacy is not an element of a cause of action under the statute. Even if it were, it does not appear beyond doubt that the plaintiff could prove no set of facts to satisfy that element. By scrambling its signals, plaintiff clearly did not intend for its programming to be made available to the general public. Defendant is not entitled to dismissal on this ground.
Defendants also argue that plaintiff's satellite broadcasts do not constitute "aural" communications and that the Texas wiretap statute is preempted by federal copyright law. Neither argument is adequately briefed by defendants to permit review by the court. See In re Nary, 253 F.R. 752, 762 n. 23 (N.D. Tex. 2000) (court will not consider an argument that is inadequately briefed).
C.
The complaints filed by plaintiff in these cases contain "short and plain statement[s]" of the claims against defendants. More particularly, plaintiff alleges that defendants "intentionally intercepted, endeavored to intercept, or procured other persons to intercept electronic communications from DirecTV" by purchasing and using pirate access devices to receive, unscramble, and exhibit encrypted satellite programming transmissions without authorization. ( See Plf. Compl. at 4-5, ¶¶ 8-10; at 11, ¶ 34; at 14, ¶ 51). Such conduct, if proved, may violate the Electronic Communications Privacy Act, 18 U.S.C. § 2510, et seq., and the Texas Wiretap Act, TEX. CIV. PRAC. REM. CODE ANN. § 123.001, et seq. Without suggesting a view as to whether plaintiff will ultimately prevail on these claims, the court concludes that dismissal at this stage of the litigation would be improper.RECOMMENDATION
Defendants' joint motion to dismiss should be denied.A copy of this report and recommendation shall be sent to all counsel and any unrepresented parties. Any party may file written objections to this recommendation by July 15, 2004. The failure to file written objections shall bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error or manifest injustice. See Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1417 (5th Cir. 1996).