Directv, Inc. v. Webb, 04-56847.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Citation545 F.3d 837
Docket NumberNo. 04-56913.,No. 04-56847.,04-56847.,04-56913.
PartiesDIRECTV, INC., Plaintiff-Appellee/Cross-Appellant, v. Scott WEBB, Defendant-Appellant/Cross-Appellee.
Decision Date25 September 2008

Appeal from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding. D.C. No. CV-03-03399-SVW.

Before: PROCTER HUG, JR., HARRY PREGERSON, and RICHARD R. CLIFTON, Circuit Judges.

CLIFTON, Circuit Judge:

Scott Webb appeals the district court's civil bench trial judgment against him for piracy of satellite television signals and modification of equipment used for unauthorized interception and decryption of satellite television signals. Based on evidence of Webb's purchase of satellite television hardware and so-called "pirate access devices" used to enable the unauthorized reception of television programming, the district court held that Webb intercepted the broadcast signal of DirecTV, Inc. ("DTV") in violation of 18 U.S.C. § 2511(1)(a) and 47 U.S.C. § 605(a). In addition, the district court held that Webb's use of a pirate access device called an "emulator" to modify legitimate DTV access cards for the purpose of unauthorized decryption constituted a violation of 47 U.S.C. § 605(e)(4).

Regarding the violation of 47 U.S.C. § 605(e)(4), our court's recent decision in DirecTV, Inc. v. Huynh, 503 F.3d 847 (9th Cir.2007), resolved some of the issues raised in this case. Huynh held that § 605(e)(4) does not apply to personal use. Since Webb was held liable under that statute for modification of equipment which he used himself, the portion of the judgment holding him responsible for one violation of § 605(e)(4) must be reversed. Other violations of that statute alleged by DTV were held by the district court to be barred by the application of a one-year limitations period borrowed from California law. DTV challenges the district court's selection and application of that one-year limitations period, but we agree with the district court that the limitations period is appropriately drawn from California law, such that other potential claims against Webb for violation of § 605(e)(4) are barred as untimely.

That leaves the violations of 18 U.S.C. § 2511(1)(a) and 47 U.S.C. § 605(a), which Webb challenges with several arguments. We hold, among other things, that circumstantial evidence of signal interception can be sufficient, and was sufficient in this case, to sustain the claims, but that possession of multiple pirate devices does not in itself constitute multiple violations of these statutes.

Applying those conclusions to this judgment, we affirm in part and reverse in part, and we remand the action to the district court.

I. Background

DTV is a provider of direct-to-home satellite broadcast programming. Unlike cable television providers, which transmit signals through fixed optical fibers or coaxial cables, DTV delivers its signals via satellite directly into its customers' homes. Customers pay for this service on a subscription or pay-per-view basis. Like conventional radio and television broadcasting, DTV's signals are broadcast through the air and can be received—or intercepted— by anyone with the proper hardware. Thus, DTV encrypts its signals to protect against signal theft.

To receive DTV's signals in unscrambled form, an individual must have a hardware system consisting of a satellite dish, a signal processor known as an "integrated receiver/decoder," and an "access card." The access card is a "smart card" that contains an embedded computer chip and memory, which, when authorized, allows the integrated receiver/decoder to process DTV's signals for television viewing. The access card is therefore critical to receiving usable signals from DTV. In theory, the other hardware is of little use without an authorized access card because that hardware cannot unscramble DTV's encrypted signals. In reality, so-called "pirate access devices" exist that will simulate authorization. By using such a device, a signal pirate can circumvent DTV's encryption technology and obtain unpaid access to DTV programming.

In December 1999, Scott Webb purchased a DTV television hardware system. Webb received a "pending" account at that time, which was legally incapable of decrypting DTV's transmissions because its access card was unauthorized pending account activation. Webb never activated this account and did not pay DTV for its service. Instead, he bought fifty-seven pirate access devices between August 31, 2000, and December 31, 2001.

DTV first learned of Webb in May 2001 as part of an investigation into Internet purveyors of pirate access devices.1 The company filed suit against him on May 15, 2003, alleging numerous acts of signal piracy and pirate access device modification and distribution in violation of 47 U.S.C. § 605(a), 47 U.S.C. § 605(e)(4), and 18 U.S.C. §§ 2511-2512.2 Following a bench trial, the district court found that Webb was liable for committing one act of unlawful signal reception in violation of 47 U.S.C. § 605(a), fifty-seven acts of signal interception in violation of 28 U.S.C. § 2511(1)(a), and one act of access card modification in violation of 47 U.S.C. § 605(e)(4). The court awarded DTV statutory damages of $1,000 for Webb's § 605(a) violation, $10,000 for his § 605(e)(4) violation, and $123,700 for 1,237 days (at $100 per day) of signal interception in violation of § 2511(1)(a). The court also held that a one-year statute of limitations barred other § 605 claims by DTV against Webb. The court ordered equitable relief in the form of an injunction prohibiting Webb from further violations, and awarded costs and attorneys' fees in the amount of $69,681.20. Webb moved to amend the findings and the award of damages, or alternatively to receive a new trial, but the court denied this motion. Both parties appealed.

II. Discussion

We review the district court's conclusions of law de novo and its factual findings for clear error. Idaho Potato Comm'n v. G & T Terminal Packaging, Inc., 425 F.3d 708, 718 (9th Cir.2005). Under the clearly erroneous standard, the district court's findings must be upheld unless on review of all the evidence we are "left with the definite and firm conviction that a mistake has been committed." Twentieth Century Fox Film Corp. v. Entm't Distrib., 429 F.3d 869, 879 (9th Cir.2005) (internal quotations and citation omitted).

A. The Statutory Framework

Two federal statutes govern television signal piracy: the Federal Communications Act of 1934 ("Communications Act"), 47 U.S.C. § 605 (2000), and the Wiretap Act, 18 U.S.C. §§ 2511-2521 (2003). Neither Act originally addressed television signal piracy, but amendments made to both statutes in the 1980's extended their reach to the unauthorized reception or interception of television programming. Concerned with "the theft of cable service," Congress in 1984 amended and supplemented the Communications Act with the Cable Communications Policy Act. See H.R.Rep. No. 98-934, at 83 (1984), reprinted in 1984 U.S.C.C.A.N. 4655, 4720. The 1984 legislation retained § 605's original prohibitions without amendment in what became § 605(a). Congress then added §§ 605(b)-(e) to curb "the growing practice of individuals taking down satellite delivered programming for private, home viewing by means of privately owned backyard earth stations."3 1984 U.S.C.C.A.N. at 4745. In 1988, Congress again amended the Communications Act in order "to deter piracy practices." See The Satellite Home Viewer Act of 1988, Pub.L. No. 100-667, § 205, 102 Stat. 3959-60. These amendments stiffened applicable civil and criminal penalties, expanded civil standing to sue, and added the provision now identified as § 605(e)(4), which prohibits the manufacture, sale, modification, and distribution of pirate access devices. H.R.Rep. No. 100-887(II) (1998), at 28, reprinted in 1988 U.S.C.C.A.N. 5638, 5657.

The Wiretap Act underwent a similar evolution. While the statute originally covered just "wire and oral communications," Congress passed the Electronic Communications Privacy Act ("ECPA") in 1986 to extend the Wiretap Act's protections to "electronic communications." See Konop v. Hawaiian Airlines, Inc., 302 F.3d 868, 874 (9th Cir.2002) (citing Pub.L. No. 99-508, 100 Stat. 1848). Unlike the Communications Act, it appears that Congress did not amend the Wiretap Act with signal piracy specifically in mind. See United States v. Lande, 968 F.2d 907, 913 (9th Cir. 1992) (noting that "nothing in the legislative history of the ECPA indicates particular concern about satellite pay television piracy"). Nevertheless, since the passage of the ECPA amendments courts have generally held that satellite television transmissions are "electronic communications" within the meaning of the Wiretap Act. See id.; DIRECTV, Inc. v. Pepe, 431 F.3d 162, 166 (3d Cir.2005); United States v. Herring, 993 F.2d 784, 786-87 (11th Cir.1993) (en banc); United States v. One Macom Video Cipher II, 985 F.2d 258, 261 (6th Cir.1993); United States v. Splawn, 982 F.2d 414, 414-15 (10th Cir.1992); United States v. Shriver, 989 F.2d 898, 904 (7th Cir.1993); United States v. Davis, 978 F.2d 415, 417-20 (8th Cir.1992).

B. 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1)(a)

The first two statutory sections under which the district court found Webb liable were 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1)(a). These sections of the Communications Act and Wiretap Act both address satellite television signal piracy. Such piracy is illegal. We conclude that the district court did not clearly err in finding that Webb violated these sections.

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