Summary
declining to award statutory damages under 18 U.S.C. § 2520 absent evidence that the defendant profited from his violations of the statute or induced others to engage in similar misconduct, and because damages were awarded under 47 U.S.C. § 605
Summary of this case from Directv, Inc. v. AgeeOpinion
03-CV-400S.
March 15, 2004
DECISION AND ORDER
I. INTRODUCTION
Presently before this Court is Plaintiff DirecTV's Application for Default Judgment against Defendant Kenneth Young. For the reasons discussed below, this Court will grant Plaintiff's Application for Default Judgment, and award Plaintiff statutory damages in the amount of $2,000, and attorneys' fees and costs in the amount of $850, for a total judgment of $2,850.
In support of its application, Plaintiff filed the following submissions: Application for Default Judgment with attached exhibits, a memorandum of law, the Affidavit of Paul I. Perlman, Esq. and the Declaration of Bill Gatliff. Defendant has not appeared in this action. This Court filed an Order on August 27, 2003, directing Defendant to appear on September 22, 2003, and show cause why default judgment should not be entered against him. He failed to appear as directed, and this Court took the matter under advisement at that time.
II. BACKGROUND
On May 22, 2003, Plaintiff filed its Complaint in this action alleging that the named defendants purchased and used Pirate Access Devices that are designed to permit the viewing of Plaintiff's television programming without authorization by or payment to Plaintiff. Plaintiff alleges that by doing so, each defendant violated the Federal Communications Act of 1934, as amended, 47 U.S.C. § 605, and the Electronic Communications Privacy Act, 18 U.S.C. § 2510-2521. Drawn from the Complaint, the factual allegations are as follows:
Plaintiff, a California corporation, is the nation's leading provider of direct broadcast satellite programming, delivering more than 225 television channels to more than ten million homes and businesses in the United States. Plaintiff offers its television programming to residential and business customers on a subscription and pay-per-view basis only. To prevent unauthorized receipt and viewing of its programming, Plaintiff electronically scrambles its satellite transmissions. Therefore, each authorized customer is required to maintain an account with Plaintiff and to obtain the proper system hardware to receive the satellite transmissions, including a DirecTV Access Card and a small satellite dish. Upon activation of the DirecTV Access Card, the customer is able to receive and view those channels to which the customer has subscribed or otherwise arranged to purchase (e.g., pay-per-view).
On or about May 25, 2001, Plaintiff executed several writs of seizure upon a mail shipping facility used by major sources of pirate technologies including Vector Technologies, DSS-Stuff, Iso7816devices.com, and PCEase. As a result of these raids, Plaintiff came into possession of a substantial number of sales records, shipping records, email communications, credit card receipts and other records evidencing purchases of illegally modified DirecTV Access Cards and other Pirate Access Devices by the named defendants.
Plaintiff alleges that Defendant purchased two Pirate Access Devices from DSS-Stuff on or about August 19, 2000: an Unlooper and a Programmer. Defendant placed his orders using interstate or foreign wire facilities, and received his orders via the Postal Service or commercial mail carriers.
Defendant failed to Answer the Complaint or otherwise defend this action. Consequently, Plaintiff filed a Request for Clerk's Entry of Default on August 6, 2003. The Clerk of the Court granted Plaintiff's request and entered default on August 7, 2003. Thereafter, on August 19, 2003, Plaintiff filed the instant Application for Default Judgment against Defendant.
III. DISCUSSION
A. Plaintiff's Application for Default Judgment
The exact basis for Plaintiff's Application for Default Judgment is unclear. In its moving papers, Plaintiff indicates that the application is made "pursuant to . . . 47 U.S.C. § 605, and . . . 18 U.S.C. § 2510-2521." (Memorandum in Support, at p. 3.) However, in its third prayer for relief, Plaintiff requests $10,000 in statutory damages and $850 in attorneys' fees in the event of default based only on its second cause of action, which alleges violations of 18 U.S.C. § 2511(1)(a). Finally, at a status conference before this Court on September 22, 2003, Plaintiff's counsel indicated that Plaintiff was not seeking default judgment premised on its third cause of action, which alleges violations of 18 U.S.C. § 2512(1)(b).
Affording Plaintiff the benefit of the doubt, this Court will construe its Application for Default Judgment as being based on violations of both its first and second causes of action.
B. Default Judgment Standard
Before obtaining default judgment, a party must secure a Clerk's Entry of Default by demonstrating, through affidavit or otherwise, that the opposing party is in default. FED. R. CIV. P. 55(a). Once default has been entered, the allegations of the Complaint that establish the defendant's liability are accepted as true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); FED. R. CIV. P. 8(d). Damages, however, must be established by proof, unless the damages are liquidated or "susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974). All reasonable inferences from the evidence presented are drawn in the moving party's favor. See Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981).
Prior to entering default judgment, the court must determine whether the facts alleged in the Complaint are sufficient to state a claim for relief as to each cause of action for which the plaintiff seeks default judgment. Further, where the damages sought are not for a sum certain, the court must determine the propriety and amount of default judgment. FED. R. CIV. P. 55(b)(2). "In determining damages not susceptible to simple mathematical calculation, a court has the discretion to rely on detailed affidavits or documentary evidence in lieu of an evidentiary hearing." DirecTV, Inc. v. Hamilton, 215 F.R.D. 460, 462 (S.D.N.Y. 2003) (citing Action S.A. v. Marc Rich Co., Inc., 951 F.2d 504, 508 (2d Cir. 1992)). A hearing is not required as long as the court ensures that there is a basis for the damages awarded. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting Fustok v. Conticom modity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).
This Court notes that Plaintiff did not request a hearing or oral argument on its Application for Default Judgment.
C. Statutory Violations: 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1)(a)
Forty-seven U.S.C. § 605(a) prohibits the unauthorized interception, receipt, publication or use of interstate or foreign wire or radio communications. It provides, in pertinent part, that:
No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect or meaning of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.47 U.S.C. § 605(a).
Similarly, 18 U.S.C. § 2511(1)(a) imposes liability upon 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." This criminal statute is civilly enforced pursuant to the provisions of 18 U.S.C. § 2520(a), which creates a civil cause of action for "any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of [Chapter 119 of Title 18 of the United States Code]."
Here, by operation of default, Defendant is deemed to admit Plaintiff's allegations against him. Thus, this Court finds that Defendant purchased, received and used an Unlooper and a Programmer — two Pirate Access Devices that are designed to permit viewing of Plaintiff's television programming without authorization or payment. Indeed, as far as the Unlooper is concerned, its primary function is to circumvent the security measures taken by Plaintiff to protect its encrypted signal. (Gatliff Decl., ¶ 3.) There is no other significant purpose for which an Unlooper could be used. (Gatliff Decl., ¶ 4.)
In his declaration, Gatliff explains that:
The primary function of an unlooper device is to circumvent the conditional access controls that DIRECTV uses to encrypt its satellite signals. Once the device circumvents these controls, a user can watch encrypted DIRECTV television programming without authorization from DIRECTV.
. . .
An unlooper modifies DIRECTV Access Cards, which are a type of ISO-7816 Smart Card that is inserted into a DIRECTV receiver to allow a customer to view programming. The unlooper alters Access Cards that have been disabled by DIRECTV's electronic countermeasures.
(Gatliff Decl., ¶¶ 3, 5.) Gatliff's declaration does not reference or explain a Programmer.
Further, drawing all reasonable inferences in Plaintiff's favor, this Court finds that by using these devices for their intended purposes, Defendant intentionally intercepted and used Plaintiff's electronic communications. Accordingly, this Court finds that Defendant violated 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1)(a). This Court will therefore grant Plaintiff's Application for Default Judgment on its first and second causes of action.
D. Damages
1. First Cause of Action: 47 U.S.C. § 605(a) Violation
Plaintiff seeks recovery of only statutory damages on its first cause of action. Pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II), a statutory award of "not less than $1,000 or more than $10,000" can be awarded for each violation of 47 U.S.C. § 605(a) "as the court considers just." 47 U.S.C. § 605(e)(3)(C)(i)(II). Thus, the exact dollar amount awarded within this range is committed to the court's discretion.
Plaintiff has provided no information whatsoever pertaining to any actual damages.
Upon these facts, this Court finds that the minimum statutory award of $2,000 against Defendant is appropriate. This award is based on two violations of the statute calculated at $1,000 each. There is no indication that Defendant profited in any way from his misconduct beyond receiving Plaintiff's television programming free of charge. Nor is there any evidence that Defendant induced or assisted others in committing similar unlawful activity. Other than general deterrence, Plaintiff offers no justification for a higher award. This Court further notes that its damage award is in line with other damage awards entered in cases presenting like circumstances. See, e.g., DirecTV, Inc. v. Kaas, No. C03-4047-PAZ, 2003 WL 22965078 (N.D. Iowa Dec. 17, 2003) (awarding statutory minimum of $1,000 per violation); DirecTV, Inc. v. Albright, No. Civ. A. 03-4603, 2003 WL 22956416, at *3 (E.D.Pa. Dec. 9, 2003) (awarding $1,000 statutory dam ages and citing similar cases); Hamilton, 215 F.R.D. at 462 (awarding $1,000 per violation).
In addition, this Court will award Plaintiff $850 in attorneys' fees and costs as requested, a sum that this Court finds reasonable. See 47 U.S.C. § 605(e)(3)(B)(iii) (providing that the court "shall direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails"); see Kaas, 2003 WL 22965078 (awarding $850 in attorneys' fees and costs).
2. Second Cause of Action: 18 U.S.C. § 2511(1)(a) Violation
Plaintiff seeks statutory dam ages pursuant to 18 U.S.C. § 2520(c)(2)(B) on its second cause of action. That section authorizes statutory damages to any person whose electronic communication is intercepted, disclosed or intentionally used in the amount of the greater of $100 a day for each day of violation or $10,000. 18 U.S.C. § 2520(c)(2)(B). An award of statutory damages under this section is discretionary. See Schmidt v. Devino, 206 F. Supp.2d 301, 306 (D.Conn. 2001) (citing cases);Romano v. Terdik, 939 F. Supp. 144, 146 (D.Conn. 1996). However, the court's discretion extends only to granting dam ages strictly as provided in the statute or not granting damages at all; the court has no discretion to award damages in an amount between the two statutory choices. See Schmidt, 206 F. Supp.2d at 306;see also Kaas, 2003 WL 22965078 (citing cases); Goodspeed v. Harman, 39 F. Supp.2d 787, 791 (N.D. Tex. 1999).
Plaintiff has not provided any information regarding Defendant's violation of the statute on a daily basis. Instead, Plaintiff requests an award of $10,000 per violation. This Court finds that on these facts, such an award is excessive. See Kaas, 2003 WL 22965078 (finding $10,000 award excessive based on similar facts); cf. Reynolds v. Spears, 93 F.3d 428, 435 (8th Cir. 1996) ("We think it logical that Congress chose to make the award of [statutory] damages discretionary, given the potential of the law to bring financial ruin to persons of modest means, even in cases of trivial transgressions."); but see DirecTV v. Braun, No. CIV 3:03CV937, 2004 WL 288805, at *2 (D.Conn. Feb. 9, 2004) (awarding $10,000 pursuant to 18 U.S.C. § 2520(c)(2)(B) based on Defendant's illegal interception of Plaintiff's broadcast signal). Accordingly, this Court exercises its discretion to award no statutory dam ages on Plaintiff's second cause of action.
As noted, there is no evidence that Defendant significantly profited from his violations of the statute or induced or assisted others in engaging in similar misconduct. Moreover, this Court is awarding Plaintiff damages on its first cause of action, an award that in this Court's view appropriately punishes Defendant for his illegal actions, adequately compensates Plaintiff for any damage it suffered, and sufficiently deters others from engaging in similar unlawful conduct. See Albright, 2003 WL 22956416, at *3 (finding a statutory minimum award of $1,000 per violation sufficient to deter similar wrongdoing).
IV. CONCLUSION
For the foregoing reasons, this Court will grant Plaintiff's Application for Default Judgment. Plaintiff will be awarded statutory damages against Defendant in the amount of $2,000, and attorneys' fees and costs in the amount of $850, for a total judgment of $2,850.
V. ORDERS
IT HEREBY IS ORDERED, that Plaintiff's Application for Default Judgment (Docket No. 16) is GRANTED.FURTHER, that Plaintiff is awarded a total of $2,850 in statutory damages and attorneys' fees and costs against Defendant Kenneth Young on its first cause of action.
FURTHER, that Plaintiff is awarded no statutory damages against Defendant Kenneth Young on its second cause of action.
FURTHER, that the Clerk of the Court is directed to send a copy of this Decision and Order to Defendant Kenneth Young at the following address:
33 Victoria Blvd. Kenmore, N.Y. 14217
FURTHER, that the Clerk of the Court is directed to enter judgment against Defendant Kenneth Young in accordance with this Decision and Order.
SO ORDERED.