Directv, Inc. v. Haupert

• Decision Date: 04 August 2004
• Docket Number: No. 04-C-93.,04-C-93.
• Citation: 327 F.Supp.2d 990
• Parties: DIRECTV, INC., Plaintiff, v. Chris HAUPERT, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

327 F.Supp.2d 990

DIRECTV, INC., Plaintiff, v. Chris HAUPERT, Defendant.

No. 04-C-93.

United States District Court, E.D. Wisconsin.

August 4, 2004.

James A. Friedman, LaFollette Godfrey & Kahn, Jennifer R. Cotner, LaFollette Godfrey & Kahn, Madison, WI, John Jamnback, Yarmuth Wilsdon Calfo PLLC, Stacie Foster, Yarmuth Wilsdon Calfo PLLC, Seattle, WA, Steven A. Heinzen, LaFollette Godfrey & Kahn, Madison, WI, for Plaintiff.

Charles S. Blumenfield, Dowling & Blumenfield LLP, Milwaukee, WI, for Defendant.

DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

GOODSTEIN, United States Magistrate Judge.

INTRODUCTION

DIRECTV, Incorporated ("DIRECTV") operates a satellite broadcast system to deliver digital television programming to customers throughout the United States. (Compl.¶ 2.). To prevent the unauthorized interception of its signals, DIRECTV has employed various encryption measures at a substantial cost. (Compl.¶¶ 2-3, 12-22.). DIRECTV claims that Haupert purchased nine satellite signal theft devices from EQ Stuff, an internet based company, and has used or sold a number of those devices. (Compl.¶¶ 26-28.). The devices are allegedly designed to circumvent DIRECTV's security measures, which would allow a user to receive DIRECTV's signals without paying for them. (Compl.¶ 4.). DIRECTV was alerted to Haupert's alleged purchases when United States Marshals seized the business records of EQ Stuff. (Compl.¶ 24.). These assertions were the basis for DIRECTV's six-claim complaint, which was filed against Haupert on January 27, 2004, and which cites the Federal Communications Act, the Digital Millennium Copyright Act, and federal wiretap laws. 47 U.S.C. § 605(a), (e)(4); 17 U.S.C. § 1201(a)(2), (b)(1); 18 U.S.C. §§ 2511(1)(a), 2512(1)(b).

MOTION TO DISMISS

Haupert's motion to dismiss is aimed at DIRECTV's sixth claim. Defendant argues that plaintiff is not entitled to relief on this claim because there is no private civil cause of action for a violation of § 2512 of the Wiretap Act. DIRECTV concedes that no civil remedy is authorized by § 2512 alone. In response to Haupert's motion, DIRECTV claims that § 2520 and § 2512 should be read in conjunction with one another, and that § 2520(a) provides the basis for its sixth claim. Haupert disagrees, citing the plain language of §§ 2512(1)(b) and 2520(a) and arguing that no civil cause of action exists. DIRECTV also relies on a plain language analysis.

DIRECTV has filed suit against hundreds, if not thousands, of defendants based on the same claims asserted against Haupert, and a substantial number of DIRECTV defendants have filed motions similar to the pending motion. A considerable split amongst the circuits has developed. See DIRECTV, Inc. v. Cardona, 275 F.Supp.2d 1357, 1364-66 (M.D.Fl.2003)(collecting cases); DirecTV, Inc. v. Dillon, 2004 WL 906104, *2 (N.D.Ill.2004)(same). In the Eastern District of Wisconsin alone, two judges have reached opposite conclusions. See DirecTV, Inc. v. Tasche, 316 F.Supp.2d 783 (E.D.Wis.2004)(recognizing a private cause of action based on § 2512(1)(b)) and DIRECTV v. Floryance, No. 03-1103 (E.D.Wis., July 8, 2004)(order on motion to dismiss)(refusing a § 2512 private cause of action).

For reasons set forth herein, this court is of the opinion that the plaintiff is unable to sustain a private cause of action based on § 2512.

STANDARD OF REVIEW

The court may grant a motion to dismiss when "it appears beyond a doubt that the [non-moving party] cannot prove any facts to support a claim for relief and the moving party demonstrates that there are no material issues of fact to be resolved." See Brunt v. Serv. Employees Int'l Union, 284 F.3d 715, 718-19 (7th Cir.2002); Frey v. Bank One, 91 F.3d 45, 46 (7th Cir.1996). In addition, the court's determination is limited to the pleadings presented, and the court must accept the facts stated in the complaint as true. See Thompson v. Ill. Dep't of Prof'l Reg., 300 F.3d 750, 753 (7th Cir.2002). However, the court "is not required to accept legal conclusions that may be alleged or that may be drawn from the pleaded facts." City of Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir.1976).

Whether DIRECTV may bring a civil cause of action based on § 2512(1)(b) presents an issue of statutory interpretation, which must begin with the plain language of the statute. Old Ben Coal Co. v. Dir. Office of Workers' Comp. Programs, 292 F.3d 533, 539 (7th Cir.2002). As mentioned earlier, the statutes relevant to the present case are §§ 2512(b)(1) and 2520(a). Both parties recognize that § 2512(1)(b) creates criminal liability only. That section reads as follows:

§ 2512 Manufacture, distribution, possession, and advertising of wire, oral, or electronic communication intercepting devices prohibited

(1) Except as otherwise specifically provided in this chapter, any person who intentionally —

(b) manufactures, assembles, possesses, or sells any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications, and that such device or any component thereof has been or will be sent through the mail or transported in interstate or foreign commerce;

(emphasis added).

Because a civil cause of action is not recognized in § 2512(1)(b), DIRECTV attempts to link § 2512 with § 2520 to establish authority for its claim. Section 2520(a) reads:

§ 2520. Recovery of civil damages authorized

(a) In general. — Except as provided in section 2511(2)(a)(ii), any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter may in a civil action recover from the person or entity, other than the United States, which engaged in that violation such relief as may be appropriate.

(emphasis added).

THE SPLIT: BROAD AND NARROW INTERPRETATIONS OF § 2520(A)

In general, courts interpret § 2520 as identifying (1) a category of defendants that might be sued and (2) a category of plaintiffs that have the ability to bring suit. The category of plaintiffs that have standing to bring suit are those whose "wire, oral, or electronic communication" has been "intercepted, disclosed, or intentionally used." See, e.g., Tasche, 316 F.Supp.2d at 788; DirecTV, Inc. v. Dillon, 2004 WL 906104, *2; Directv, Inc. v. Maraffino, 2004 WL 170306, *3 (N.D.Ill.2004). As a large satellite television provider whose signals have undoubtedly been misused at some point, this category includes DIRECTV. In regard to the plaintiff class only, the broad and narrow approach are in agreement.

Under what will be referred to as the broad approach, a proper plaintiff's ability to bring suit is not limited to a category of defendants who have allegedly committed one of the three actions specified in § 2520(a) — interception, disclosure, or intentional use. Rather, the category of defendants encompasses any individual that has violated chapter 119, regardless of the method of violation. The broad defendant category is a result of the fact that "in that violation" refers back to the phrase "in violation of this chapter" and is unrelated to the phrase "intercepted, disclosed, or intentionally used." See, e.g., Tasche, 316 F.Supp.2d at 789; Directv, Inc. v. Perez, 279 F.Supp.2d 962, 964 (N.D.Ill.2003); DirecTV, Inc. v. Dillon, 2004 WL 906104, *3; DIRECTV, Inc. v. EQ Stuff, 207 F.Supp.2d 1077, 1084 (C.D.Cal.2002); see Oceanic Cablevision, Inc. v. M.D. Electronics, 771 F.Supp. 1019 (D.Neb.1991). In other words, the phrase "intercepted, disclosed or intentionally used" does not apply to putative defendants, but only limits the plaintiff class to those who have been the victims of such violations.

Thus, under the broad approach, as far as potential defendants, it is of no consequence that § 2512 speaks in terms of manufacturing, assembly, possession, and sale. Because § 2512 is part of chapter 119, no further analysis is required, and "the plain language of Section 2520(a) directly refutes the contention that civil liability may not stem from § 2512." Tasche, 316 F.Supp.2d at 788.

Courts that do not recognize a civil cause of action based on § 2512, pursuant to what will be referred to as the narrow approach, also rely on a plain language analysis of § 2520(a). In addition, those courts also define a plaintiff and defendant class. The crucial difference between the two interpretations is that, under the narrow interpretation, the defendant class is more limited. This is a result of the fact that the phrase "that violation" refers back to "intercepted, disclosed, or intentionally used in violation of this chapter" and not the shorter and less specific phrase "in violation of this chapter." See e.g., Floryance, No. 03-CV-1103; DIRECTV, Inc. v. O'Neill, No. 03-270 (W.D.Wis., Sept. 8, 2003)(memorandum and order on motion to dismiss)(refusing a § 2512 private cause of action); DIRECTV, Inc. v. Treworgy, 373 F.3d 1124, 1127 (11th Cir.2004); DirecTV, Inc. v. Bertram, 296 F.Supp.2d 1021, 1024-25 (D.Minn.2003).

Thus, courts following the narrow approach require that the defendant be accused of a violation of Chapter 119 involving one of three actions enumerated in § 2520(a)-interception, disclosure, or intentional use. Manufacture, possession, assembly or sale of a device, which are the basis of DIRECTV's § 2512(1)(b) claim against Haupert, are not one of those three enumerated actions. Thus, under a plain language analysis, § 2520(a) does not authorize a civil cause of action for DIRECTV against Haupert based on a violation of § 2512.

Opposing decisions from the Eastern District of Wisconsin illustrate both interpretations. In DIRECTV v. Floryance, an unpublished decision dated July 8, 2004, the court rejected DIRECTV's claim that § 2520(a) authorizes a civil cause of action. In reaching its holding, the court stated that "it is an unnatural use of...