Continental Cablevision, Inc. v. Poll
| Decision Date | 02 September 1997 |
| Docket Number | No. 96-55308,96-55308 |
| Citation | 124 F.3d 1044 |
| Parties | 97 Cal. Daily Op. Serv. 7071, 97 Daily Journal D.A.R. 11,408, 9 Communications Reg. (P&F) 402 CONTINENTAL CABLEVISION, INC., Plaintiff-Appellee, v. Alvin I. POLL; Cabletronics; Darryl S. Poll; Pacific Cable Company, Inc.; Republic Cable Products, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Robert M. Levy, Woodland Hills, CA, for defendants-appellants.
Daniel J. Lefkowitz, William Jung, Daniel J. Lefkowitz, P.C., Jericho, NY, and Michael R. Weinstein, Ferris, Britton & Proctor, San Diego, CA, for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California; David V. Kenyon, District Judge, Presiding. D.C. No. CV-93-02310-KN.
Before: SCHROEDER and O'SCANNLAIN, Circuit Judges, and BURNS, * District Judge.
We must decide whether there was sufficient evidence of intent to hold manufacturers and distributors of cable converter-decoders civilly liable for assisting customers in the unauthorized reception of cable television programming.
Continental Cablevision, Inc. ("Continental") is a multiple system cable television operator which constructs, operates, and maintains cable systems throughout the United States. Continental operates pursuant to franchise agreements awarded by various municipalities and political subdivisions, and it provides cable services to homes and businesses within its franchise areas. Continental's cable television services are private communication signals, not intended for public use, and are offered and made available only to authorized, paying subscribers. The programming Continental offers comes in various packages, which include broadcast television channels, premium channels such as Home Box Office or Cinemax, and pay-per-view services. Subscribers are billed on a monthly basis for each service they select.
To prevent subscribers from receiving and viewing programming services for which they have not paid, Continental encrypts or "scrambles" its premium and pay-per-view channels. A converter-decoder or "black box" is required to view any scrambled programming. The boxes are specifically programmed so as to allow subscribers to access only the amount of cable programming they have purchased. Subscribers generally rent the converter-decoders from Continental, but others sometimes purchase their own equipment from independent manufacturers and distributors.
The converter-decoders which Continental provides to its subscribers incorporate a feature known as "addressability." A converter-decoder is "addressable" if the cable operator may, by remote control, change an individual subscriber's level of service or authorize the viewing of a pay-per-view program without having to send a technician to the viewer's home to make physical adjustments. A central computer sends a signal to the converter-decoder instructing it to descramble the programs requested (and paid for) by customers.
There is a nationwide black market of "pirate" converter-decoders which descramble cable programming and enable some to receive premium and pay-per-view services without paying the cable operator. To protect against this unauthorized reception of cable programming, Continental sends out electronic "bullets" or impulses which disable converter-decoders that are stealing cable signals. In addition, in response to the pirating of cable services, the Federal Communications Commission ("FCC") has promulgated regulations regarding the manufacture, distribution, and use of converter-decoders. These regulations require that any person manufacturing, distributing, or marketing converter-decoders for a cable system have prior FCC approval.
Alvin Poll, Cabletronics, Darryl Poll, West Coast Electronics, Pacific Cable Company, Inc., Cable Equipment Brokerage Co., and Republic Cable Products, Inc. (collectively, "Poll") are manufacturers, distributors, and vendors of cable converter-decoders. The equipment that Poll distributed was modified to be both non-addressable and "bullet-proof," and Poll advertised these converter-decoders as such. On October 19, 1992, the Los Angeles Police Department executed a search and seizure warrant for the premises of Pacific Cable Company and Cable Equipment Brokerage. That same day, the Las Vegas Police Department executed a search and seizure warrant for the premises of Republic Cable Products. Thousands of converter-decoders and business documents were seized at both locations. Among the documents seized were sales invoices and correspondence from purchasers who had returned Poll's converter-decoders, complaining that the devices did not descramble all the pay channels offered on the purchasers' local cable television systems.
On April 21, 1993, Continental brought this action pursuant to sections 553 and 605 1 of the Communications Act of 1934 (the "Communications Act"), as amended, 47 U.S.C. §§ 553 and 605, 2 alleging that Poll manufactured, sold, and distributed converter-decoders while knowing and intending that these devices be used for the unauthorized reception of cable television programming. Section 553(c)(1) grants a private right of action to an aggrieved person for a violation of § 553(a)(1). Section 553 contains both criminal and civil provisions: subsection (b) establishes criminal sanctions and subsection (c) provides for civil remedies. Only civil remedies are involved in this appeal.
Following a court trial on August 1-2, 1995, the district court found Poll jointly and severally liable for 2,244 violations of § 553. The district court assessed damages at the rate of $500 for each converter-decoder sold to Continental's subscribers, for a total damage award of $1,122,000. The district court also entered a permanent injunction, and subsequently entered an order awarding Continental $259,917.80 for attorney fees and $2,393.42 for costs. Poll brought this appeal on February 22, 1996, contesting the court's finding of liability under § 553, and the award of damages and attorney fees.
The language of 47 U.S.C. § 553 clearly states that manufacturers and distributors of converter-decoders are liable only if they intend to assist customers in unauthorized reception. The statute reads in material part:
(1) No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.
(2) For the purpose of this section, the term "assist in intercepting or receiving" shall include the manufacture or distribution of equipment intended by the manufacturer or distributor (as the case may be) for unauthorized reception of any communications service offered over a cable system in violation of subparagraph (1).
Because converter-decoders indeed have lawful uses, the statute requires a showing that defendants have the intent to assist in the unauthorized interception or reception to establish liability under § 553. Poll contends that Continental offered no evidence that it intended any of the 2,244 converter-decoder sales to facilitate the viewing of unpurchased programming.
Contrary to Poll's bare assertion, there is evidence in the record to demonstrate that it had the intent or knowledge that its devices would be used to receive unauthorized programming. For instance, (1) Poll was not registered with the FCC to sell cable boxes; 3 (2) Poll's boxes had been modified to descramble all TV channels including premium channels and pay-per-view; (3) Poll's boxes were non-addressable; (4) Poll advertised its boxes as alternatives to the cable companies' boxes--not as second boxes to be used legally by current cable subscribers; (5) Poll advertised its boxes as being "bullet proof"--that is, as being capable of defeating cable companies' anti-cable theft security measures; 4 (6) Poll received letters from customers which indicate that its converter-decoders were used as primary, not as secondary, boxes; and (7) Continental Investigator Dennis Debbaudt's declaration revealed that Poll's boxes were capable of descrambling all of Continental's scrambled channels, including all the premium channels and pay-per-view.
By removing addressability from its converter-decoder devices and modifying them to descramble constant pay-per-view programming, Poll effectively defeated all of Continental's security measures, thereby allowing the user to receive unlimited premium and pay-per-view programming free of charge. 5
The only other circuit court which has squarely addressed § 553 liability is the Seventh Circuit which considered an appeal from the criminal provision of the same statute. 6 See United States v. Gardner, 860 F.2d 1391, 1399 (7th Cir.1988), cert. denied, 490 U.S. 1023, 109 S.Ct. 1751, 104 L.Ed.2d 187 (1989). In Gardner, the defendant was convicted of violating § 553 for willfully and knowingly assisting in the unauthorized interception and reception of cable services. He appealed on the ground that "the government failed to establish, and the trial court failed to instruct, that the sole and specific purpose of Gardner's black box was the unlawful interception of cable programming, and that [the customer] actually used the boxes." Id. at 1394. The Seventh Circuit rejected this argument and applied reasoning that we now adopt. Id. at 1397-99.
After reviewing the language and legislative history of the statute, the court concluded that:
To convict under § 553, the jury was not required to find that the black boxes were sold for the sole and specific purpose of cable piracy, nor that the boxes were actually used illegally. Rather, the jury only needed to find that Gardner intended the black boxes to be used for the unauthorized reception of cable service when he sold the boxes....
Id. at 1399. The fact...
To continue reading
Request your trial
-
U.S. v. Racich
...unambiguous language of the rule dictates that Rule 11(h) applies to violations of Rule 11(e)(1). See Continental Cablevision, Inc. v. Poll, 124 F.3d 1044, 1049 (9th Cir.1997) (holding that clear statutory "language must ordinarily be regarded as conclusive"). Moreover, Courts must give mea......
-
Molski v. Evergreen Dynasty Corp.
...could claim statutory minimum damages in an amount far greater than any actual injury he suffered, see Continental Cablevision, Inc. v. Poll, 124 F.3d 1044, 1049 (9th Cir.1997) (suggesting that statutory damages do not require proof of injury); Six (6) Mexican Workers v. Ariz. Citrus Grower......
-
Comcast of Illinois, X v. Platinum Electronics
...1454, 1459 (S.D.Fla.1995); Storer Communications, Inc. v. Mogel, 625 F.Supp. 1194, 1198 (S.D.Fla.1985); Continental Cablevision, Inc. v. Poll, 124 F.3d 1044, 1047 (9th Cir.1997); United States v. Norris, 88 F.3d 462, 466 (7th Cir.1996); International Cablevision, Inc. v. Sykes, 997 F.2d 998......
-
In re Yassai
...of the statute itself.'" O'Hara v. Teamsters Union Local, 151 F.3d 1152, 1160 (9th Cir.1998) (quoting Continental Cablevision, Inc. v. Poll, 124 F.3d 1044, 1048 (9th Cir.1997) (citations omitted)). When a court looks to the language of a statute to interpret its meaning, the court "`derives......