CBS Inc. v. Primetime 24 Joint Venture

• Decision Date: 26 March 2001
• Docket Number: 98-5082,99-10177,Nos. 98-4945,99-14039,99-14040 and 00-10386,98-5582,s. 98-4945
• Parties: (11th Cir. 2001) CBS INC., Fox Broadcasting Co., et al., Plaintiffs-Appellees, v. PRIMETIME 24 JOINT VENTURE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1217

245 F.3d 1217 (11th Cir. 2001)

CBS INC., Fox Broadcasting Co., et al., Plaintiffs-Appellees, v. PRIMETIME 24 JOINT VENTURE, Defendant-Appellant.

Nos. 98-4945, 98-5082, 98-5582, 99-10177, 99-14039, 99-14040 and 00-10386.

United States Court of Appeals, Eleventh Circuit.

March 26, 2001.

April 5, 2001.

[Copyrighted Material Omitted] Appeals from the United States District Court for the Southern District of Florida. (No. 96-03650-CV-LCN), Lenore C. Nesbitt, Judge.

Before ANDERSON, Chief Judge, and CARNES and OAKES^*, Circuit Judges.

CARNES, Circuit Judge:

This copyright infringement action was brought against PrimeTime 24 Joint Venture ("PrimeTime"), a satellite television carrier, by four major television networks, four associations representing the networks' local affiliates, and four corporations owning affiliates. After the plaintiffs proved at trial that PrimeTime had unlawfully distributed copyrighted network programming to satellite dish subscribers who were not authorized to receive such programming by virtue of the statutory, compulsory license under which PrimeTime was operating, the district court entered a permanent injunction against PrimeTime requiring it to terminate the transmission of such programming to unauthorized subscribers.

Thereafter, Congress passed the Satellite Home Viewer Improvement Act of 1999 ("Improvement Act"), Pub.L. No. 106-113, 1001, et seq., 113 Stat. 1537, 515 (1999) which contained a "grandfather" clause permitting PrimeTime and other satellite carriers to continue transmitting network broadcasting to satellite dish owners who had received a particular type of transmissions before "any termination" of such transmissions occurring prior to October 31, 1999. Id. 1005(a)(2)(B)(iii). Because of this clause, which was codified as 17 U.S.C. 119(a)(2)(B)(iii), the district court entered an order modifying the permanent injunction. PrimeTime brought this appeal because it contends that the modifications to the injunction did not go far enough.

The specific issue this appeal presents is whether the Improvement Act's "any termination" language includes voluntary as well as involuntary terminations of transmissions. The more general and fundamentally important issue is whether the plain meaning of statutory language trumps contrary legislative history. We answer both questions in the affirmative. As a result, we vacate the district court's December 16, 1999 order modifying the injunction against PrimeTime and remand for further modification of the injunction.

I. BACKGROUND

The plaintiffs in this case are four television networks (CBS Broadcasting, Inc.; Fox Broadcasting Co.; ABC, Inc.; and the National Broadcasting Company), four trade associations comprised of stations affiliated with the networks, and four corporations which own local broadcast stations affiliated with CBS. (We will refer to the plaintiffs collectively, as "the Networks.") PrimeTime is a satellite television carrier which transmits programming to subscribers who own or rent satellite dishes. As a result of the Satellite Home Viewer Act ("SHVA"), 17 U.S.C. 119, PrimeTime received a compulsory, statutory copyright license to transmit network programming to viewers who are "unserved" by over-the-air network broadcasters. The SHVA defined the meaning of "unserved households" by reference to an objective level (Grade B) of signal intensity.

The Networks brought this action against PrimeTime in 1996, asserting that it had infringed the Networks' copyrights by transmitting network material to individuals who did not fit within the SHVA's definition of "unserved." They alleged that PrimeTime had improperly relied on individual subscribers' subjective representations concerning their picture quality and signed up large numbers of subscribers who were not eligible to receive network programming from a satellite carrier. In March 1997, the Networks moved for a preliminary injunction, and after finding that PrimeTime had ignored the objective standard set out in the statute for determining unserved households, the district court entered a preliminary injunction against it in July 1998. That injunction prohibited PrimeTime from signing up any new "illegal" customers and ordered it to terminate transmissions to existing illegal customers within 90 days. Thereafter, the parties agreed to a number of extensions of the deadline for terminating illegal subscribers, and those extensions were embodied in court orders modifying the preliminary injunction.

In December 1998, following a full trial, the district court issued a final judgment and permanent injunction in favor of the Networks. The permanent injunction required that the transmission of network broadcasting to illegal subscribers signed up during the pendency of the motion for an injunction to be terminated by February 28, 1999, and that the transmission to subscribers signed up before the motion was filed to be terminated by April 30, 1999. PrimeTime carried out the February 1999 terminations. Before the next deadline, however, the parties agreed to postpone the remaining terminations until June 30 and December 31, 1999.

The statutory license provided by the SHVA was scheduled to expire at the end of 1999. Throughout that year Congress considered an extension of, and changes to, the statutory license. After both houses of Congress passed differing bills amending the SHVA, a conference committee negotiated what became the Improvement Act. Congress passed the Improvement Act in November 1999, and the President signed the bill into law on November 29, 1999.

One of the provisions of the Improvement Act "grandfathered" in the transmission of network broadcasting by satellite carriers to C-band subscribers,¹ even if those subscribers did not fit within the statutory license's definition of "unserved households." Improvement Act 1005(a)(2)(B)(iii), 113 Stat. 1537, 520 (codified at 17 U.S.C. 119(a)(2)(B)(iii)). This provision, which is the subject of this appeal, states that:

The limitations of clause [17 U.S.C. 119(a)(2)(B)(i), which limits the compulsory license to "unserved households" as defined by the statute,] shall not apply to any secondary transmissions by C-band services of network stations that a subscriber to C-band service received before any termination of such secondary transmissions before October 31, 1999.

Id. (emphasis added). Congress also provided that C-band subscribers who were receiving network broadcasting as of October 31, 1999 could continue to receive such broadcasting.

In light of the grandfather clause, PrimeTime moved the district court to modify the permanent injunction in order to permit PrimeTime to transmit network broadcasting to C-band subscribers falling within the scope of the clause. PrimeTime argued that in light of the grandfather clause, it should be permitted to transmit network broadcasting to any C-band dish owner whose service had previously been terminated, regardless of whether the service had been terminated voluntarily (service was canceled at the subscriber's request or as a result of the subscriber's failure to pay) or involuntarily (service was canceled pursuant to court order or as a result of a network's challenge to the eligibility of a subscriber). In support of its position PrimeTime focused on the fact that the grandfather clause refers to "any termination."

The Networks countered by arguing that the grandfather clause was only intended to permit transmission to C-band subscribers whose service had been terminated involuntarily, either as a result of court orders or as a result of previous challenges to eligibility. They argued that the phrase "any termination" in the grandfather provision was intended to refer to, and was "shorthand" for, the transmission cutoffs prompted by the district court's injunction. In support of their argument, the Networks quoted several statements from members of Congress, from the district court, and from others in which the word termination was used in reference to the court-ordered cutoffs. The Networks noted that the statute was passed in the context of a so-called "cutoff crisis" resulting from the public backlash (partly as a result of PrimeTime's efforts) against the court-ordered terminations. The Networks relied heavily on the Conference Report's description of this section of the Improvement Act which stated that:

Section 1005(a)(2) of this Act creates a new section 119(a)(2)(B)(iii) of the Copyright Act to permit continued delivery by means of C-band transmissions of network stations to C-band owners who received signals of the pertinent network on October 31, 1999, or were recently required to have such service terminated pursuant to court orders or settlements under section 119.

Conference Report to the Improvement Act, 145 Congressional. Rec. H11792, H11794 (daily ed. Nov. 9, 1999).

After considering the parties' arguments concerning the scope of the grandfather clause, the district court noted that:

Now, I've read and reread this statute and I don't think I understand it too well insofar as it's written. It's not a model of clarity. However, I have received some comfort from reading the conference report, which I think is clearer.

The court then stated that "[t]he statute could have said very easily any subscriber who received network programming at any time, and they didn't say it." The court held that the 1005(a)(2)(B)(iii) grandfather clause was only applicable to those subscribers whose service had been involuntarily terminated as a result of court orders. Consequently, the court amended its permanent injunction to state that:

PrimeTime 24 shall not be prohibited by this Order from delivering, through C-band services, any network station ... to:

(a) a C-band dish at a household that received any ABC, CBS, Fox, or NBC station ... from PrimeTime 24 by C-band services as of October 30, 1999, or

(b) a C-band dish at a household that received...