Directv Inc v. Barczewski

• Decision Date: 13 May 2010
• Docket Number: No. 06-2219,06-2221.,06-2219
• Citation: 604 F.3d 1004
• Parties: DIRECTV, INC., Plaintiff-Appellee,v.David BARCZEWSKI and Jonathan Wisler, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

604 F.3d 1004

DIRECTV, INC., Plaintiff-Appellee,v.David BARCZEWSKI and Jonathan Wisler, Defendants-Appellants.

Nos. 06-2219, 06-2221.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 21, 2007.

Decided May 13, 2010.

Marc Zwillinger (argued), Sonnenschein, Nath & Rosenthal, Washington, DC, for Plaintiff-Appellee.

Paul B. Overhauser (argued), Overhauser Law Offices, Greenfield, IN, for Defendants-Appellants.

Before EASTERBROOK, Chief Judge, and FLAUM and SYKES, Circuit Judges.

EASTERBROOK, Chief Judge.

A jury concluded that Jonathan Wisler intercepted encrypted signals from the DirecTV satellite system without authorization and that David Barczewski furnished devices to assist others to steal the signals. See 18 U.S.C. § 2511; 47 U.S.C. § 605. Ample evidence supports this verdict: both defendants bought electronic gear from a merchant that advertised its products as designed to facilitate theft of DirecTV signals, and both participated in an online discussion group, called the “Pirate's Den,” whose members exchanged advice about how to decrypt DirecTV signals without paying. Both defendants insisted that the “smart cards” and associated gear they purchased had legal uses. That much is uncontested, but the jury did not have to believe defendants' claim that the gear had been put to a legal rather than an illegal use. Nor did the jury have to believe Wisler's assertion that, as a DirecTV subscriber, he had no reason to steal signals. After buying a smart card and joining the Pirate's Den, Wisler cut back to the lowest tier of service; a jury could conclude that he descrambled other programs, such as sports and movies, without paying.

Most of defendants' legal arguments are feeble. They contend, for example, that DIRECTV, Inc., the provider of DirecTV service, is not aggrieved by signal theft and therefore cannot sue under 18 U.S.C. § 2520, which provides a private right of action for some violations of 18 U.S.C. § 2511, an anti-interception statute. Every court of appeals that has considered this subject has held that DIRECTV is entitled to sue under § 2520. See DirecTV, Inc. v. Webb, 545 F.3d 837 (9th Cir.2008); DIRECTV, Inc. v. Bennett, 470 F.3d 565 (5th Cir.2006); DIRECTV, Inc. v. Pepe, 431 F.3d 162 (3d Cir.2005); DIRECTV, Inc. v. Nicholas, 403 F.3d 223 (4th Cir.2005). We agree with that conclusion, as well as the related point that DIRECTV is a “person aggrieved” entitled to sue under § 605. See DIRECTV, Inc. v. Seijas, 508 F.3d 123 (3d Cir.2007); DIRECTV, Inc. v. Budden, 420 F.3d 521, 526-28 (5th Cir.2005); see also United States v. Norris, 88 F.3d 462, 468-69 (7th Cir.1996).

Nonetheless, defendants insist, an exception to § 2511 makes the private right of action useless to DIRECTV. The exception reads:

It shall not be unlawful under this chapter ... for any person-

(i) to intercept or access an electronic communication made through an electronic communication system that is configured so that such electronic communication is readily accessible to the general public;

(ii) to intercept any radio communication which is transmitted-(I) by any station for the use of the general public, or that relates to ships, aircraft, vehicles, or persons in distress; (II) by any governmental, law enforcement, civil defense, private land mobile, or public safety communications system, including police and fire, readily accessible to the general public; (III) by a station operating on an authorized frequency within the bands allocated to the amateur, citizens band, or general mobile radio services; or (IV) by any marine or aeronautical communications system[.]

18 U.S.C. § 2511(2)(g). Subsection (ii)(IV), which exempts “any marine or aeronautical communications system”, is the one on which defendants rely. During trial defendants' lawyer asked one of DIRECTV's witnesses whether it operated an “aeronautical communications system”; the witness answered “yes” and in so doing scuttled the case, defendants maintain.

Like the district court, we doubt that the witness was thinking about § 2511(2)(g)(ii)(IV). No matter. Whether or not the witness had this statute in mind, the answer is not dispositive. Judges, not witnesses, are responsible for interpreting statutes. See Bammerlin v. Navistar International Transportation Corp., 30 F.3d 898, 900-01 (7th Cir.1994). Section 2511(2)(g) as a whole deals with unencrypted communications, broadcast in the clear to promote public safety or open discourse. The phrase “aeronautical communications system” is not defined in § 2511 or anywhere else in the United States Code; this is its sole appearance. Only one appellate opinion uses the phrase, and following the lead of the Federal Communications Commission-not to mention the dictionary-it understands this language to mean a system of communications to and from airplanes. See Aeronautical Radio, Inc. v. FCC, 928 F.2d 428, 434 (D.C.Cir.1991). Whatever else it may be, DirecTV is not a system for issuing navigation instructions to aircraft or receiving their distress calls. DirecTV therefore is not an “aeronautical communications system” under § 2511(2)(g)(ii)(IV).

Answering special interrogatories, the jury concluded that Barczewski had distributed four unauthorized decryption devices and that Wisler had intercepted DirecTV's signal for 435 days without authorization. The judge used these answers to calculate damages. The penalty of $44,000 against Barczewski depended on § 605(e)(3)(C)(i)(II): the judge awarded DIRECTV $10,000 for each device, see § 605(e)(4), and $1,000 for each (vicarious) interception, see § 605(a). Subsection (II) allows the court to award “for each violation of subsection (a) of this section ... a sum of not less than $1,000 or more than $10,000, as the court considers just, and for each violation of paragraph (4) of this subsection ... an aggrieved party may recover statutory damages in a sum not less than $10,000, or more than $100,000, as the court considers just.” DIRECTV requested, and the district judge used, the low point of these ranges for each of Barczewski's violations.

Wisler's penalty of $43,500 ($100 per day of interception) was calculated under 18 U.S.C. § 2520(c)(2), which says that “the court may assess as damages whichever is the greater of-(A) the sum of the 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.” The judge rejected Wisler's argument for a lower figure, because Rodgers v. Wood, 910 F.2d 444, 448 (7th Cir.1990), holds that the highest penalty calculated under § 2520(c)(2) is mandatory. Rodgers leaves district judges with no discretion to exercise-as a result the court need not (indeed, must not) consider defendants' circumstances, and the jury's only role is to specify the inputs to the formula (the number of days or devices). See BMG Music v. Gonzalez, 430 F.3d 888, 891-93 (7th Cir.2005).

Section 2520 was overhauled in 1986, and Rodgers was the nation's initial appellate decision on the question whether the statutory penalties are mandatory or permissive. More recently four other circuits have addressed the question-and all four have disagreed with Rodgers and held that § 2520(c)(2) allows district judges not to award damages. See Nalley v. Nalley, 53 F.3d 649, 651-53 (4th Cir.1995); Dorris v. Absher, 179 F.3d 420, 429-30 (6th Cir.1999); Reynolds v. Spears, 93 F.3d 428, 433-35 (8th Cir.1996); DIRECTV, Inc. v. Brown, 371 F.3d 814, 817-18 (11th Cir.2004). Developments that leave this circuit all by its lonesome may justify reexamination of our precedents, the better to reflect arguments that may not previously have been given full weight and to spare the Supreme Court the need to intervene. See United States v. Corner, 598 F.3d 411 (7th Cir.2010) (en banc); United States v. Carlos-Colmenares, 253 F.3d 276 (7th Cir.2001).

Section 2520(c)(2) says that the judge “may” award certain damages. “May” is permissive. DIRECTV contends that the permissive quality of “may” is overridden by the phrase “the greater of”, but that's not sound: “the greater of” tells the judge to compute the ceiling separately under subsections (A) and (B) and then use the higher of the two (a process repeated in subsection (B), which offers two ways to set statutory damages). Telling the judge to work through all of the possibilities to see which number is highest does not compel the court to award that maximum. A phrase such as “the district court may award X or Y” would oblige the judge to use either X or Y, not some lower or intermediate number, but § 2520(c)(2) does not read this way. It says that the judge “may” award damages, then gives a formula. This is the language of discretion, not command.

Rodgers did not see any significance in “the greater of”. Instead it looked to the language of § 2520 before the 1986 amendment. The original language of § 2520(c) was: “Any person whose wire or oral communication is intercepted, disclosed, or used in violation of this chapter shall (1) have a civil cause of action against any person who intercepts, discloses, or uses ... such communications, and (2) be entitled to recover from any such person-(a) actual damages but not less than liquidated damages computed at the rate of $100 a day for each day of violation or $1,000, whichever is higher”. Pub.L. 90-351, Title III, § 802, 82 Stat. 223 (June 19, 1968). The panel in Rodgers treated the word “shall” as making the maximum award mandatory and then observed that the legislative history in 1986 did not explain why “shall” had been changed to “may”. The panel continued: “In the absence of any such statement, we are hesitant to read a grant of discretion to the district courts where none had been permitted in the past.” 910 F.2d at 448.

As our colleagues in other circuits have remarked, this unwillingness to give effect to a change in statutory language unless the...