General Instrument Corp. of Deleware v. Nu-Tek Electronics & Mfg Inc., NU-TEK

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtScirica
Parties(3rd Cir. 1999) GENERAL INSTRUMENT CORPORATION OF DELAWARE APPELLANT AT NO. 98-1502 v.ELECTRONICS & MANUFACTURING, INC., APPELLANT AT NO. 98-1424 & 98-1502
Decision Date17 November 1999
Docket NumberNU-TEK,Nos. 98-1424

Page 83

197 F.3d 83 (3rd Cir. 1999)
GENERAL INSTRUMENT CORPORATION OF DELAWARE APPELLANT AT NO. 98-1502
v.
NU-TEK ELECTRONICS & MANUFACTURING, INC., APPELLANT AT NO. 98-1424
Nos. 98-1424 & 98-1502
U.S. Court of Appeals, Third Circuit
Argued June 3, 1999
Filed November 17, 1999

On Appeal from the United States District Court for the Eastern District of Pennsylvania D.C. Civil Action No. 93-cv-03854 (Honorable Robert S. Gawthrop, III)

Page 84

Copyrighted Material Omitted

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Stephen W. Armstrong, Esquire (argued) Montgomery, McCracken, Walker & Rhoads 123 South Broad Street Philadelphia, Pennsylvania 19109 Attorney for Appellant/Cross-Appellee, Nu-Tek Electronics & Manufacturing, Inc.

Geoffrey L. Beauchamp, Esquire (argued) Michael D. Kristofco, Esquire Wisler, Pearlstine, Talone, Craig, Garrity & Potash 484 Norristown Road Blue Bell, Pennsylvania 19422 Attorneys for Appellee/Cross-Appellant, General Instrument Corporation of Delaware

Before: Scirica and Rendell, Circuit Judges, and Schwarzer, District Judge*

OPINION OF THE COURT

Scirica, Circuit Judge.

The issues raised here on appeal require us to address the remedial provisions of the Cable Communications Policy Act of 1984 which prohibits unauthorized interception or reception of cable communication services. See 47 U.S.C.A. § 553 (West 1991 & Supp. 1999).

Following a jury trial, Nu-Tek Electronics & Manufacturing, Inc. was ordered to pay $60,000 in damages and $412,178.92 in attorney's fees and costs to General Instrument Corporation for violating the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779 (codified as amended in scattered sections of 47 U.S.C.A.), specifically 47 U.S.C.A. § 553 which prohibits assisting in unauthorized cable service reception. The District Court also entered a permanent injunction barring Nu-Tek from continuing its unlawful activities. The key issues raised in this case are whether General Instrument Corporation had standing to bring a suit under the Cable Act (Nu-Tek's appeal) and whether statutory civil damages under the Act are limited to $60,000 regardless of the number of violations (General Instrument's cross-appeal). The scope of the injunction and the calculation of the amount of attorney's fees are also at issue.

We will affirm the judgment of the District Court on all issues.

I.

General Instrument Corporation manufactures cable descrambler boxes and sells them to programmers such as Comcast and Cablevision, who in turn rent them to their customers for a monthly fee. Nu-Tek Electronics & Manufacturing, Inc. engaged in the business of obtaining boxes manufactured by General Instrument and converting them to receive all signals sent by the cable programmer, whether or not the box owner had paid for the programming. Nu-Tek's converted boxes allowed cable subscribers to receive premium channels, even if they paid only for basic cable service. In industry terminology, the converted boxes were "nonaddressable" and "bulletproof," meaning that the cable programmer was not aware of their use and could not disable the descramblers nor control which channels were accessible. Between 1992 and 1995, Nu-Tek sold over 5,000 such devices.

General Instrument sued Nu-Tek in the Eastern District of Pennsylvania, alleging violations of (1) the Cable Communications Policy Act of 1984, 47 U.S.C.A. §§ 553 and 605; (2) the Lanham Act; and (3) federal copyright law. Prior to trial, the parties voluntarily stipulated to a dismissal of the copyright claim. The District Court also dismissed General Instrument's claim brought under 47 U.S.C.A. § 605, leaving only the § 553 and Lanham Act claims. A jury rendered a verdict for General Instrument on the § 553 claim, and for Nu-Tek on the Lanham Act claim.

Page 86

The District Court entered judgment in favor of General Instrument for $60,000 in damages, which it found to be the maximum amount allowed under the Cable Act, plus reasonable attorney's fees. See General Instrument Corp. v. Nu-Tek Elec. & Mfg., Inc., No. 93-3854, 1997 WL 325804 (E.D. Pa. June 4, 1997) (General Instrument II). A week later, the court issued an order permanently enjoining Nu-Tek from manufacturing or distributing General Instrument descrambler boxes modified to descramble cable signals without authorization, and forbidding Nu-Tek from transforming itself into a new entity to continue its cable theft business or contributing to other cable theft businesses. See Order of 6/11/97.

Subsequently, the District Court resolved several post-trial motions, some of which form the basis for this appeal -- namely, denying Nu-Tek's motion to amend the injunction and granting General Instrument's motion for attorney's fees on the Cable Act claim, fixing fees at $412,178.92. See General Instrument Corp. v. Nu-Tek Elec. & Mfg., Inc., 3 F. Supp. 2d 602 (E.D. Pa. 1998) (General Instrument III). The remaining issues raised by Nu-Tek on this appeal -- namely, whether General Instrument had constitutional, prudential, and statutory standing to sue Nu-Tek -- were decided in a 1996 pretrial order denying Nu-Tek's motion for judgment on the pleadings. See General Instrument Corp. v. Nu-Tek Elec. & Mfg., Inc., No. 93-3854, 1996 WL 442790 (E.D. Pa. Jul. 30, 1996) (General Instrument I). In its cross-appeal, General Instrument contends the District Court erred in holding the Cable Act provided for an award of no more than $60,000 in statutory civil damages for "all" of Nu-Tek's § 533 violations. See General Instrument II, 1997 WL 325804, at *4.

The District Court had subject matter jurisdiction under 28 U.S.C.A. § 1331. We have jurisdiction under 28 U.S.C.A. § 1291.

II.

A. Standing

Nu-Tek contends that General Instrument lacked constitutional, statutory, and prudential standing. We exercise plenary review of standing and statutory construction issues, but review for clear error the factual elements underlying the District Court's determination of standing. See Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 224 (3d Cir. 1998); United States v. Contents of Accounts Nos. 3034504504 and 144-07143 at Merrill, Lynch, Pierce, Fenner and Smith, Inc., 971 F.2d 974, 984 (3d Cir. 1992).

1. Constitutional Standing

Constitutional standing is grounded in Article III's provision limiting the jurisdiction of federal courts to "cases" and "controversies." U.S. Const. art. III § 2. The Supreme Court has established a three-part test for determining constitutional standing:

First, the plaintiff must have suffered an injury in fact -- an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of -- the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks omitted) (citations omitted); accord Conte, 165 F.3d at 225 (constitutional standing has three elements: an injury in fact, traceable to defendant, and likely to be redressed by a favorable decision).

Page 87

Contending General Instrument failed to prove "injury in fact," Nu-Tek asserts "[t]he testimony at trial in this case unequivocally showed that General Instrument never lost a single sale of its products" because, as evidenced by General Instrument's backlog, it could not satisfy existing customer demand.

We disagree. In determining whether a plaintiff satisfies the requirements of constitutional standing, the extent of the injury plaintiff suffered is generally immaterial to the question of injury in fact; "an `identifiable trifle' will suffice." Public Interest Research Group of N.J., Inc. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 71 (3d Cir. 1990) (quoting United States v. Students Challenging Regulatory Agency Procedures, 412 U.S. 669, 689 n.14 (1973)). There is considerably more here. General Instrument's Director of Security, Stan Durey, testified at trial that General Instrument incurs significant ongoing costs in policing cable theft of its devices, and that General Instrument's customers (cable operators) hold General Instrument accountable for cable theft devices found on their systems. Durey recounted a specific instance in which General Instrument lost an account with Scripps Howard Cable because of the rate of piracy in General Instrument cable boxes and the cost of remedying the problem. Durey's testimony was supported by testimony of executives from Comcast and Suburban Cable, who stated that security problems in General Instrument's systems would make them less likely to do business with General Instrument. These concrete, direct harms to General Instrument were more than sufficient to meet the injury-in-fact requirement. Furthermore, there is no doubt Nu-Tek was at least in part the cause of these harms, and a decision favorable to General Instrument would provide some redress. Consequently, we will uphold the District Court's determination that General Instrument satisfied constitutional standing requirements.

2. Prudential Standing

Nu-Tek argues that even if General Instrument has satisfied constitutional standing requirements, prudential limitations on standing preclude General Instrument from bringing a claim under § 553. Prudential standing consists of "a set of Judge-made rules forming an integral part of `judicial self-government.' " Conte, 165 F.3d at 225 (quoting Lujan, 504 U.S. at 560). These requirements are designed to "limit access to the federal courts to those litigants best suited to assert a particular claim." Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804 (1985).

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73 practice notes
  • Interfaith Community Organ. v. Honeywell Intern., No. 03-2760.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • February 18, 2005
    ...(3d Cir.1997), and the underlying factual determinations for clear error. See Gen. Instrument Corp. v. Nu-Tek Electronics & Mfg., Inc., 197 F.3d 83, 86 (3d Cir.1999). The injunction is reviewed for an abuse of discretion, which requires a showing that the District Court's ruling "rests upon......
  • Pennsylvania Psychiatric v. Green Spring Health, No. 00-3403.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • February 6, 2002
    ...is plenary. ACLU-NJ v. Township of Wall, Page 283 246 F.3d 258, 261 (3d Cir.2001); Gen. Instrument Corp. v. Nu-Tek Elecs. & Mfg., Inc., 197 F.3d 83, 86 (3d Cir.1999). On appeal, we must accept as true all material allegations of the complaint and draw all reasonable inferences in a light mo......
  • Pichler v. Unite, No. 06-4522.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • September 9, 2008
    ...from calling attention to his or her criminal conduct by using it. See Gen. Instrument Corp. of Delaware v. Nu-Tek Elecs. & Mfg., Inc., 197 F.3d 83, 95 (3d Cir.1999). Moreover, plaintiffs are free to elect actual, rather than liquidated damages, and will certainly do so in appropriate cases......
  • Hollis v. Cortes, Nos. 09-3017, 09-3018.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • October 1, 2010
    ...error the factual elements underlying the District Court's determination of standing.” General Instrument Corp. v. Nu-Tek Elecs. & Mfg., 197 F.3d 83, 86 (3d Cir.1999). [T]o satisfy Article III's standing requirements, a plaintiff must show (1) it has suffered an “injury in fact” that is (a)......
  • Request a trial to view additional results
73 cases
  • Interfaith Community Organ. v. Honeywell Intern., No. 03-2760.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • February 18, 2005
    ...(3d Cir.1997), and the underlying factual determinations for clear error. See Gen. Instrument Corp. v. Nu-Tek Electronics & Mfg., Inc., 197 F.3d 83, 86 (3d Cir.1999). The injunction is reviewed for an abuse of discretion, which requires a showing that the District Court's ruling "rests upon......
  • Pennsylvania Psychiatric v. Green Spring Health, No. 00-3403.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • February 6, 2002
    ...is plenary. ACLU-NJ v. Township of Wall, Page 283 246 F.3d 258, 261 (3d Cir.2001); Gen. Instrument Corp. v. Nu-Tek Elecs. & Mfg., Inc., 197 F.3d 83, 86 (3d Cir.1999). On appeal, we must accept as true all material allegations of the complaint and draw all reasonable inferences in a light mo......
  • Pichler v. Unite, No. 06-4522.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • September 9, 2008
    ...from calling attention to his or her criminal conduct by using it. See Gen. Instrument Corp. of Delaware v. Nu-Tek Elecs. & Mfg., Inc., 197 F.3d 83, 95 (3d Cir.1999). Moreover, plaintiffs are free to elect actual, rather than liquidated damages, and will certainly do so in appropriate cases......
  • Hollis v. Cortes, Nos. 09-3017, 09-3018.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • October 1, 2010
    ...error the factual elements underlying the District Court's determination of standing.” General Instrument Corp. v. Nu-Tek Elecs. & Mfg., 197 F.3d 83, 86 (3d Cir.1999). [T]o satisfy Article III's standing requirements, a plaintiff must show (1) it has suffered an “injury in fact” that is (a)......
  • Request a trial to view additional results

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