Directv, Inc. v. Budden

• Decision Date: 06 September 2005
• Docket Number: No. 04-20751.,04-20751.
• Citation: 420 F.3d 521
• Parties: DIRECTV, INC., Plaintiff-Appellee, v. Jeff BUDDEN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

420 F.3d 521

DIRECTV, INC., Plaintiff-Appellee, v. Jeff BUDDEN, Defendant-Appellant.

No. 04-20751.

United States Court of Appeals, Fifth Circuit.

August 9, 2005.

Rehearing Denied September 6, 2005.

Marc Jay Zwillinger, Howard Robert Rubin (argued), Christian S. Genetski, Jacqueline Sadker, Shahrzad Poormosleh, Sonnenschein, Nath & Rosenthal, Washington, DC, for Plaintiff-Appellee.

Daniel Matthew Burns, Law Offices of Daniel M. Burns, Buda, TX, for Defendant-Appellant.

Appeal from the United States District Court for the Southern District of Texas.

Before HIGGINBOTHAM, BARKSDALE and CLEMENT, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Jeff Budden purchased and distributed over 100 devices that are primarily used to illegally gain access to satellite services. Budden appeals the district court's grant of summary judgment against him on a civil claim for violations of 47 U.S.C. § 605(e)(4), which prohibits distributing devices "knowing or having reason to know" that they are primarily of assistance in the unauthorized decryption of satellite services. We affirm.¹

I

DIRECTV, Inc. ("DTV") is a nationwide provider of direct-to-home satellite programming, including movie channels, sports, major cable networks, and local channels. DTV offers products on both a subscription and pay-per-view basis, and it encrypts—that is, digitally scrambles—its satellite broadcasts to guard against unauthorized access. A typical system consists of a small DTV-compatible satellite dish, a DTV receiver (also known as an "integrated receiver/decoder" or "IRD"), and a DTV access card. The dish connects to the receiver, which in turn connects to the user's television. A DTV access card, when inserted into the receiver, allows the receiver to decrypt the various channels or services that the user has purchased. A DTV access card is a smart card, similar in size and shape to a credit card, and also contains an embedded computer and memory.

Numerous "pirate access devices"² have been developed to circumvent the necessity of a valid access card, thereby allowing users to illegally decrypt the DTV satellite signal and thus obtain DTV programming without purchasing it. Such piracy can take various forms, including modifying a valid access card or using a device to take the place of a valid access card.

In order to combat the proliferation of illegally modified access cards, DTV periodically sends out electronic countermeasures ("ECMs") embedded within its satellite transmissions. ECMs detect and disable modified access cards.³ However, as something of a "counter-countermeasure," a device called a "bootloader" is specifically designed to overcome the effects of an ECM, allowing individuals to continue using modified access cards to pirate DTV's transmissions. A bootloader is a printed circuit board that is inserted in place of a valid access card, and is used in conjunction with a modified access card. According to the affidavit of Bill Gatliff, on behalf of DTV, a bootloader is "solely designed for the purpose of circumventing DIRECTV's conditional access system, and thus is only of assistance in the unauthorized decryption of DIRECTV's satellite transmissions of television programming."

The late Hayden Black, a long-time acquaintance of Budden, asked Budden to help him purchase several bootloader devices from Mountain Electronics, an internet retailer. Budden agreed. Black directed Budden to the Mountain Electronics website and told him how to order the devices. Black gave Budden cash to pay for the order and asked Budden to have the devices shipped to Budden's address rather than to Black's home. Budden, using the alias Jeff Brown, placed the order on August 4, 2001. The shipment arrived COD. Budden paid for it with a money order—purchased with cash from Black—and accepted the package. Budden then passed the devices along to Black.

Over the course of the next several months, the process was repeated, as Black requested Budden's assistance in placing several additional orders. As to these subsequent orders, however, Budden insisted that Black himself obtain the money order. Between August 2001 and November 2001 Budden placed five orders with Mountain Electronics for a total of 115 bootloaders. Eventually, Budden became uncomfortable with the situation and told Black that he did not wish to place any additional orders. According to Budden, at the time of these events he had no knowledge of the nature of bootloaders; he did not read any description of a bootloader on the Mountain Electronics website and was concerned only with placing the orders; and Black had only indicated to him that the devices were "parts for satellites."

DTV brought several claims against Budden for piracy, only one of which is directly at issue here: a claim for violation of 47 U.S.C. § 605(e)(4).⁴ The district court held that the actions Budden admitted to constituted distribution of devices that Budden had reason to know were primarily for piracy, in violation of § 605(e)(4).⁵ Accordingly, the district court granted summary judgment to DTV on this claim, but did not explicitly address DTV's other claims. Budden timely appeals.

II

A

We first examine our jurisdiction. DTV argues that, because the district court only disposed of DTV's § 605(e)(4) claim, the decision below was not final, and thus, in turn, we lack jurisdiction under 28 U.S.C. § 1291. We disagree.

It is true that the district court only explicitly addressed the § 605(e)(4) claim. It is also true that, in general, when a district court only addresses one claim or party in a multi-claim or multi-party situation, the judgment is not final unless the court abides by the provisions of Rule 54.⁶ Here, the district court did not, per Rule 54, "(1) expressly determine[] that there is no just reason for delay, and (2) expressly direct[] entry of a judgment."⁷

However, these facts fall by the wayside where all of the remaining claims have already been abandoned and the district court intended to dispose of all claims before it.⁸ In determining finality, we have "advocated a practical interpretation that looked to the intention of the district court" and held that "if the judgment reflects an intent to dispose of all issues before the district court, we will characterize that judgment as final."⁹ In National Association of Government Employees v. City Public Service Board we found that, to the extent the district court had not explicitly addressed certain claims, those claims had been abandoned.¹⁰ Specifically, "[i]n disposing of all Plaintiffs' other claims, therefore, the district court undoubtedly believed that it was disposing of the entire case before it," and it was "clear that no one associated with this case believed there to be a live [remaining] claim when judgment was entered."¹¹ Similarly, in Vaughn v. Mobil Oil Exploration & Producing Southeast, Inc., we found a summary judgment to be final, holding that "[w]e can only construe appellee's failure to urge its claims before the district court as an intention to abandon that part of its case" and that the abandonment, therefore, left a final and appealable judgment without the aid of Rule 54(b).¹²

There are several indications here that DTV had abandoned all claims except for the § 605(e) claim upon which the district court ruled in its summary judgment motion, and that the district court intended to treat them as such. First, the district court had directed DTV to file a motion for summary judgment by July 16, 2004, if the parties did not settle. When DTV finally filed its summary judgment motion on July 21, 2004, it only addressed claims under § 605(e)(4), which suggests that the other claims were abandoned. Budden pointed this out in his response to DTV's motion for summary judgment and argued that all other claims had been abandoned.¹³ Second, although the district court's summary judgment opinion only addressed the "claims that Budden unlawfully distributed devices used to pirate its signal" as per § 605(e)(4), it entered a "Final Judgment" and closed the case.¹⁴ While Rule 54 indicates that the label "Final Judgment" would not necessarily make the judgment final when other live claims were present, such labeling does illuminate the district court's intent and, combined with the other indications, bolsters our conclusion that the district court treated the claims it disposed of as the only live claims. Third, in its brief, DTV acknowledges that "it was DIRECTV's intention to abandon all claims other than the claims brought under 47 U.S.C. § 605, on which the district court granted summary judgment."

In sum, it is clear that DTV abandoned all other claims, that the district court treated the § 605(e)(4) claim as the only remaining live claim, and that the judgment is final. Accordingly, we have jurisdiction.

B

Budden argues that DTV lacks standing because it is not a "person aggrieved" for purposes of bringing a § 605(e)(4) claim.¹⁵ We disagree.

Section 605(e)(4) provides in relevant part:

Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or direct-to-home satellite services, or is intended for any other activity prohibited by [§ 605(a)] shall be fined not more than $500,000 for each violation, or imprisoned for not more than 5 years for each violation, or both.¹⁶

A civil action for violation of this section arises under § 605(e)(3)(A), which provides that "[a]ny person aggrieved by any violation of [§ 605(a)] or [§ 605(e)(4)] may bring a civil action in a United States district court or in any other court of competent jurisdiction."¹⁷ Looking solely to this provision, there is no contention that DTV would not have standing, given that it claims to be "aggrieved" by a...