Directv, Inc. v. Pepe

• Decision Date: 15 December 2005
• Docket Number: No. 04-4333.,04-4333.
• Citation: 431 F.3d 162
• Parties: DIRECTV INC, a California Corporation, Appellant v. Robert F. PEPE; Huey Pham; Anthony Porpora; Ronald Powell; Gary Pranzo; Sean Pryce; Chris Reuter; Robin L. Richard; William Roach; Mike Romanek. DIRECTV INC, a California Corporation, Appellant v. Anthony De CROCE; Nick L. Keal; Bernard Khuang; Leonard Korman; Tom Teague.
• Court: U.S. Court of Appeals — Third Circuit

431 F.3d 162

DIRECTV INC, a California Corporation, Appellant v. Robert F. PEPE; Huey Pham; Anthony Porpora; Ronald Powell; Gary Pranzo; Sean Pryce; Chris Reuter; Robin L. Richard; William Roach; Mike Romanek.

DIRECTV INC, a California Corporation, Appellant v. Anthony De CROCE; Nick L. Keal; Bernard Khuang; Leonard Korman; Tom Teague.

No. 04-4333.

United States Court of Appeals, Third Circuit.

Submitted pursuant to Third Circuit L.A.R. 34.1(a) December 6, 2005.

Decided December 15, 2005.

Marc J. Zwillinger, Howard R. Rubin, Shane M. McGee, Sonnenschein Nath & Rosenthal LLP, Washington, D.C., for Appellant.

John W. Gibson, Pittsburgh, PA, for Amici Curiae Edward Semulka, Joseph Rodkey, Frank Pienkosky, Mark Livesky, Bennie Leto, Joseph S. Jarvis, Daniel Galbraith, Bruce Figler and Michael Gignarella.

Before RENDELL, FISHER, and VAN ANTWERPEN, Circuit Judges.

OPINION OF THE COURT

VAN ANTWERPEN, Circuit Judge.

In this consolidated appeal, we are asked to determine whether a private right of action under 18 U.S.C. § 2520 exists for violations of 18 U.S.C. § 2511(1)(a), which, as a joint civil-criminal provision of the Electronic Communications Privacy Act of 1986 ("ECPA"), 18 U.S.C. §§ 2510-2521, imposes sanctions against anyone who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any ... electronic communication." Section 2520(a) provides for civil actions by "any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of" the ECPA. 18 U.S.C. § 2520(a). Specifically at issue are default judgments entered by the United States District Court for the District of New Jersey against the Appellees, who are alleged by Appellant DIRECTV, Inc. to have pirated its encrypted satellite television broadcasts. In those cases, the District Court concluded that §§ 2511(1)(a) and 2520(a) of the ECPA did not allow DIRECTV a cause of action. It did allow claims under § 705 of the Communications Act, 47 U.S.C. § 605, which proscribes the unauthorized reception of radio or wire signals.

On January 20, 2005, DIRECTV moved to consolidate its appeals in DeCroce and Pepe, and this Court granted the motion on February 2, 2005. In both cases, we have jurisdiction to review the final orders of the District Court under 28 U.S.C. § 1291.¹ For the following reasons, we will reverse the judgment of the District Court that no private right of action exists under 18 U.S.C. § 2520(a) for violations of 18 U.S.C. § 2511(1)(a) where the defendant has, without authorization, intercepted a plaintiff's encrypted satellite television broadcast.

I.

These cases arise as part of a program of litigation undertaken by DIRECTV to deter the illegal interception of the company's encrypted satellite broadcasts. Because the cases arise from default judgments, we draw the relevant facts from the two Complaints that initiated each case presently before us.² See Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.1990). The first Complaint named ten defendants, Robert F. Pepe, Huey Pham, Anthony Porpora, Ronald Powell, Gary Pranzo, Sean Pryce, Chris Reuter, Robin L. Richard, Winston Roach, and Mike Romanek; DIRECTV filed it on May 23, 2003 ("Pepe"). The second Complaint, filed on October 31, 2003, named five: Anthony DeCroce, Nick L. Keal, Bernard Khuang, Len Korman, and Tom Teague ("DeCroce"). Both complaints allege that the defendants separately purchased devices which could enable them to intercept and decode DIRECTV's satellite transmissions. While DIRECTV refers to these items as "Pirate Access Devices," they consist of different designs and functions, and are variously known as unloopers, bootloaders, emulators, and access card "programmers."

DIRECTV made the same substantive legal claims in both Complaints. It asserted first that the "[d]efendants have received and/or assisted others in receiving DIRECTV's satellite transmissions of television programming without authorization, in violation of 47 U.S.C. § 605(a) [§ 705 of the Communications Act]." App. 70 & 83. Section 605 provides a civil remedy for the unauthorized use or publication of various wire or radio communications, including encrypted satellite broadcasts. See 47 U.S.C. § 605. Second, DIRECTV claimed that "[b]y using Pirate Access Devices to decrypt and view DIRECTV's satellite transmissions of television programming,³ defendants 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)." App. 71. As discussed, § 2511(1)(a) prohibits the intentional and unauthorized interception of "electronic communication[s]." Third, DIRECTV alleged that "[d]efendants possessed and used Pirate Access Devices, knowing or having reason to know that the design of such devices render then primarily useful for the purpose of surreptitious interception⁴ of DIRECTV's satellite transmissions of television programming, and that such devices, or any component thereof, have been or will be sent through the mail or transported via interstate or foreign commerce, in violation of 18 U.S.C. § 2512(1)(b)." App. 72 & 85. Section 2512(1)(b) criminalizes the manufacture, assembly, possession, or sale of so-called "Pirate Access Devices" in interstate or foreign commerce. With each claim, DIRECTV alleged that it suffered lost revenue, breach of its security and accounting systems, infringement of its proprietary information and trade secrets, and interference with business relations. On these bases, it sought damages, attorneys fees, costs, and injunctive relief.

When defendant Keal made no response to its October 31, 2003 Complaint in DeCroce, DIRECTV moved for a default judgment against him on all three counts.⁵ On August 19, 2004, the District Court granted default judgment as to the first claim, brought under 47 U.S.C. § 605(a). DirecTV v. DeCroce, 332 F.Supp.2d 715, 718 (D.N.J.2004). Based on that claim, it permanently enjoined Keal from unauthorized interception of DIRECTV's satellite television programming and entered a judgment against him for damages in the amount of $1,755.97, reflecting statutory damages, costs and attorney's fees. Id. The Court dismissed with prejudice the claims under §§ 2511 and 2512 of the ECPA. Id. at 722. It noted that while the factual allegations in a complaint, other than those as to damages, are treated as conceded by the defendant for purposes of a default judgment, legal issues remain subject to its adjudication.⁶ Id. at 717. It concluded that neither § 2511 nor § 2512 provided DIRECTV with a basis for recovery. Id. at 722. DIRECTV then appealed the denial of its § 2511 claim to this Court, docket number 04-4471.

The earlier May 23, 2003 Complaint in Pepe followed a similar course, though the District Court ultimately issued its final order in that case after its final disposition of DeCroce. DIRECTV moved for default judgment against Pham and Richard, two defendants in that case. The record does not reveal the fate of the other defendants, except to the extent that the District Court docket shows that they were dismissed from the case. Recapitulating its reasoning in DeCroce, the District Court entered an Order on October 29, 2004, granting DIRECTV's motion for default judgment with respect to its claims under 47 U.S.C. § 605, but denying its claims under 18 U.S.C. §§ 2511 & 2512.⁷ DIRECTV timely appealed.

The Appellees in these cases have not filed briefs with this Court, apparently a continuation of their silence in the District Court. A group of individuals who are defendants in other cases brought by DIRECTV in other district courts of this Circuit have filed a brief as amici curiae, observing that our decision in this case will affect their interests in their own cases.

II.

The sole issue for review is whether the District Court erred by determining that no private cause of action exists under 18 U.S.C. §§ 2511 and 2520.⁸ We exercise plenary review over questions of statutory interpretation. Fraser v. Nationwide Mut. Ins. Co., 352 F.3d 107, 113 (3d Cir.2003); Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 103 (3d Cir.1981). DIRECTV argues that it should be allowed to assert a claim for unauthorized interception of satellite television broadcasts against Appellees under these sections. We agree.

The District Court concluded that the legislative history of the ECPA, case law, and a comparison of the damages provisions of 47 U.S.C. § 605 and 18 U.S.C. § 2520, which admittedly overlap, all indicate that private claims cannot arise under § 2511(1)(a). In the view of the District Court, 47 U.S.C. § 605, provided DIRECTV's sole remedy. We find that the plain language of § 2511 compels the opposite result, a conclusion that is supported-not contradicted, as the District Court found-by the legislative history. Accordingly, we are constrained to reverse.

A.

As a threshold matter, we must decide whether DIRECTV's satellite television transmissions are "electronic communications" within the meaning of the ECPA. We hold that they are. The ECPA defines "electronic communication" as "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system that affects interstate or foreign commerce." 18 U.S.C. § 2510(12). A television broadcast is self-evidently a "transfer of ... signals," including, at the very least, images and sounds. The means of transmission is by radio wave from the satellite to a ground-based antenna. We conclude, therefore, that DIRECTV's satellite broadcasts are "electronic communications" as defined by the ECPA. Where our sister courts of appeals have considered the issue, they have reached the same conclusion. See DIRECTV Inc. v....