Directv, Inc. v. Benson

• Decision Date: 18 August 2004
• Docket Number: No. 1:03CV1132.,1:03CV1132.
• Citation: 333 F.Supp.2d 440
• Court: U.S. District Court — Middle District of North Carolina
• Parties: DIRECTV, INC., Plaintiff, v. James Gregory BENSON, Daniel O. Cabeen, Larry Freeze, Marvin Howell, Jason Long, and R. Glenn Snider, Jr., Defendants.

333 F.Supp.2d 440

DIRECTV, INC., Plaintiff, v. James Gregory BENSON, Daniel O. Cabeen, Larry Freeze, Marvin Howell, Jason Long, and R. Glenn Snider, Jr., Defendants.

No. 1:03CV1132.

United States District Court, M.D. North Carolina.

August 18, 2004.

Stephen C. Keadey, Ellis & Winters, LLP, Leslie C. O'Toole, Raleigh, NC, for Plaintiff.

Daniel O. Cabeen, Westfield, NC, Pro Se Defendant.

Michael W. Patrick, Chapel Hill, NC, Michael A. Kornbluth, Durham, NC, for Defendants.

ORDER

BEATY, District Judge.

On June 24, 2004, in accordance with 28 U.S.C. § 636(b), the Recommendation of the United States Magistrate Judge was filed and notice was served on the parties and a copy was given to the court.

Within the time limitation set forth in the statute, Plaintiff objected to the Recommendation.

The court has appropriately reviewed the portions of the Magistrate Judge's report to which objection was made and has made a de novo determination which is in accord with the Magistrate Judge's report. The court hereby adopts the Magistrate Judge's Recommendation.

IT IS THEREFORE ORDERED that Plaintiff's motion to amend the complaint to dismiss the section 2512 claim (docket no. 24) is GRANTED. This ruling necessarily moots so much of Defendants' motion to dismiss (docket no. 14) as addresses this section 2512 claim, and it is DENIED AS MOOT.

IT IS FURTHER ORDERED that so much of Defendants' motion to dismiss (docket no. 14) as addresses the section 2511 claim is DENIED and so much of Defendants' motion to dismiss (docket no. 14) as addresses the conversion claim is GRANTED. Defendants' motion to dismiss (docket no. 14), therefore, is DENIED IN PART and GRANTED IN PART.

RECOMMENDATION AND ORDER OF UNITED STATES MAGISTRATE JUDGE

DIXON, United States Magistrate Judge.

This matter is before the court on a motion to dismiss by Defendant Jason Long (docket no. 14-1) and on Plaintiff's motion for leave to amend the complaint (docket no. 24-1). Furthermore, Plaintiff has filed a notice of voluntary dismissal, dismissing its claims against Defendant Daniel Cabeen (docket no. 23-1). The parties have responded in opposition to the respective motions and the matter is ripe for disposition. Since there has been no consent, the court must deal with the motions by way of a recommended disposition.

FACTS

This is a civil action brought pursuant to (1) the Communications Act of 1934, 47 U.S.C. § 151 et seq., as amended by the Cable Communications Policy Act of 1984, (2) Title III of the Omnibus Crime Control and Safe Streets Act of 1968 ("the 1984"), (2) Title III of the Omnibus Crime Control and Safe Streets Act of 1968 ("the federal wiretap act"), 18 U.S.C. § 2510 et seq., as amended by the Electronic Communications Privacy Act of 1986, and (3) North Carolina law. In this lawsuit, DIRECTV alleges that each of the individual defendants purchased pirate access devices and then intercepted DIRECTV's satellite transmissions without paying DIRECTV.¹ The complaint seeks relief against the six individual defendants under 47 U.S.C. § 605(a) for unauthorized interception and receipt of satellite programming (Count I); under 18 U.S.C. § 2511(1)(a) for unauthorized interception of electronic communications (Count II); under 18 U.S.C. § 2512(1)(b) for possession of devices primarily useful for surreptitiously intercepting satellite transmissions (Count III); under 47 U.S.C. § 605(e)(4) for willful assembly or modification of a device or equipment used to intercept satellite cable programming (Count IV); and under North Carolina law for conversion based on Defendants' alleged unlawful interceptions of satellite transmissions for Defendants' own use (Count V). The Complaint requests injunctive relief and damages. Jurisdiction is invoked pursuant to 28 U.S.C. § 1331 based on federal question jurisdiction, and the court has supplemental jurisdiction over the state law claim pursuant to 28 U.S.C. § 1367.

BACKGROUND

Plaintiff DIRECTV, Inc. ("DIRECTV") is an electronic communications company that provides television programming to millions of subscribers through a direct broadcast satellite system.² The satellite transmissions are electronically scrambled to prevent unauthorized use by persons not paying for a subscription or on a pay-per-view basis. Persons authorized to view DIRECTV programming are required to create an account, obtain a DIRECTV Access Card, and purchase other system hardware, including a satellite dish. Upon activation of the Access Card by DIRECTV, the subscribing customer can de-encrypt DIRECTV's satellite signal and view its television programming. Despite DIRECTV's security measures, several companies sell modified DIRECTV Access Cards and other so-called "pirate access devices," which permit the viewing of DIRECTV's programming without authorization by, or payment to, DIRECTV.

Plaintiff alleges that each of the six defendants purchased and used illegal pirate access devices designed to permit viewing of DIRECTV's television programming without authorization by, or payment to, DIRECTV. Compl. ¶¶ 6, 20-27. Plaintiff alleges that it executed writs of seizure with the assistance of the U.S. Marshals Service on a business named the Computer Shanty in El Paso, Texas. Through the Computer Shanty raid, DIRECTV confiscated records that "confirmed the existence of a distribution source for the country-wide transmission of devices primarily designed for the unauthorized interception of DIRECTV's Satellite Programming." Compl. ¶ 8. According to Plaintiff, the records show that the Computer Shanty "provided its services to actively program and reprogram DIRECTV Access Cards at the request of customers eager to continue illegal access to DIRECTV's television programming without payment to DIRECTV" and that each of the six defendants purchased pirate access devices from the Computer Shanty. Compl. ¶¶ 8, 9.

DISCUSSION

Before addressing the motions to amend and for dismissal, the court first addresses the effect of Plaintiff's Notice of Voluntary Dismissal as to Defendant Cabeen. On April 23, 2004, DIRECTV filed a notice, pursuant to Rule 41 of the Federal Rules of Civil Procedure, indicating that Plaintiff was dismissing without prejudice all claims against Cabeen "that are based on assisting third-parties to obtain Plaintiff's communications without authorization or commercial use, resale, distribution or manufacture of devices designed for surreptitious interception of communications" and to dismiss with prejudice "all other claims" against Cabeen. As long as an adverse party has not responded to a complaint with an answer or a motion for summary judgment, Rule 41(a)(1)(i) allows a plaintiff to dismiss an action solely by filing a notice of dismissal with the court.³ Rule 41(a)(1)(i) further provides that "unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice...." Fed. R. CIV. P. 41(a)(1)(i) (emphasis added). Here, Plaintiff filed its dismissal notice before Defendant Cabeen filed an answer or a motion for summary judgment. Therefore, pursuant to the voluntary dismissal notice, all claims against Defendant Cabeen "based on assisting third-parties to obtain Plaintiff's communications without authorization or commercial use, resale, distribution, or manufacture of devices designed for surreptitious interception of communications" are dismissed without prejudice and all other claims against Cabeen are dismissed with prejudice.

The court next considers Plaintiff's motion to amend the complaint to delete its claim under 18 U.S.C. § 2512 and to add claims under North Carolina statutory law, more specifically, to allege claims under sections 14-113.5, 15A-287, and 75-1.1 of the North Carolina General Statutes against Defendants Benson, Freeze, Howell and Long.⁴ Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend a complaint "shall be freely given when justice so requires." FED. R. CIV. P. 15(a). Amendments that cannot withstand a motion to dismiss are futile and, as a result, the court may deny the motion to amend. It is often a better exercise of the court's discretion, however, and a conservation of judicial resources, to leave decisions on the merits with respect to motions to amend until the matter has been fully briefed in a motion to dismiss. In ruling on a motion to amend, a court should only delve into the merits when it is absolutely clear that the amendment is frivolous. See generally 6 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE, § 1487, at 635-43 (2d ed.1990). Furthermore, the court must wait for summary judgment briefing if there are any disputed facts that could affect the court's decision.

First, as to Plaintiff's motion to amend the complaint to dismiss the claim brought under 18 U.S.C. § 2512, the motion should be granted. This court recently held in a similar DIRECTV case that a plaintiff may not bring a private cause of action through section 2520 for an alleged violation of section 2512 based on a defendant's mere possession of pirate access devices. DIRECTV, Inc. v. George Ingram et al., 1:03CV455 (M.D.N.C. Feb. 2, 2004), adopted, April 27, 2004 (unpublished). Thus, it appears that the claim is subject to dismissal for the reasons stated in Ingram. Indeed, here Defendant Long has moved to dismiss the section 2512 claim. It is therefore recommended that the court grant DIRECTV's motion to amend its complaint to dismiss the section 2512 claim. Alternatively, it is recommended that the court grant Defendant's motion to dismiss the section 2512 claim for the reasons stated in Ingram.

The court next considers Plaintiff's motion to amend the complaint to add three claims under North Carolina statutory law. First, Plaintiff wishes to amend the complaint to allege a claim under section 14-113.5 of the North Carolina General Statutes, which, among other things, makes it unlawful for any person knowingly...