Quincy Cablesystems, Inc. v. Sully's Bar, Inc.

• Citation: 650 F. Supp. 838
• Decision Date: 31 December 1986
• Docket Number: Civ. A. No. 86-2183-C.
• Parties: QUINCY CABLESYSTEMS, INC., and New England Sports Network, Plaintiffs, v. SULLY'S BAR, INC., d/b/a Sully's Bar, Darcy's Village Pub, Inc., d/b/a Darcy's Village Pub, and C.M. Kane Corp., d/b/a Kane's Place, Defendants.
• Court: U.S. District Court — District of Massachusetts

650 F. Supp. 838

QUINCY CABLESYSTEMS, INC., and New England Sports Network, Plaintiffs, v. SULLY'S BAR, INC., d/b/a Sully's Bar, Darcy's Village Pub, Inc., d/b/a Darcy's Village Pub, and C.M. Kane Corp., d/b/a Kane's Place, Defendants.

Civ. A. No. 86-2183-C.

United States District Court, D. Massachusetts.

December 31, 1986.

Philip X. Murray, Maurice T. Cunningham, Dwyer & Murray, Boston, Mass., for plaintiffs.

Carol S. Ball, Frank W. Kilburn & Associates, Boston, Mass., for Cafe Viking, Inc.

Arnold S. Solod, Solod and Rovner, P.A., Boston, Mass., for C.M. Kane Corp.

Nancy Gertner, Gail S. Strassfeld, Silverglate, Gertner, Baker, Fine, Good & Mizner, Boston, Mass., for Sully's Bar & Darcy's Pub.

MEMORANDUM

CAFFREY, Senior District Judge.

This is a civil action in which plaintiffs New England Sports Network ("NESN") and Quincy Cablesystems, Inc. ("Quincy") seek injunctive and compensatory relief from defendants. The defendants in the case are three taverns located in Quincy, Massachusetts: Sully's Bar, Inc., d/b/a Sully's Bar ("Sully's"), Darcy's Village Pub, Inc., d/b/a Darcy's Village Pub ("Darcy's") and C.M. Kane Corp., d/b/a Kane's Place ("Kane's Place"). The matter is now before the Court on joint motions of defendants to dismiss.

Plaintiffs' complaint raises seven causes of action against defendants. Defendants move to dismiss the following counts for failure to state a claim upon which relief can be granted: Count One (Federal Communications Act, 47 U.S.C. § 605,¹ as to plaintiff Quincy; Count Two (Lanham Act) as to plaintiff NESN; and Count Five (Tortious Interference with Contract); Count Six (Interference with Advantageous Business Relationships); and Count Seven (Conversion) as to both plaintiffs Quincy and NESN. In addition, defendants move to dismiss Count Three (Copyright) for lack of subject matter jurisdiction.

Plaintiff Quincy owns and operates the cable television system in Quincy, Massachusetts. Plaintiff NESN is a program provider which has acquired contractual rights to broadcast various sports programs, including Boston Red Sox and Boston Bruins games. Quincy has contracted with NESN to receive NESN's programs for transmittal to Quincy's cable customers for a fee. NESN transmits programs to Quincy via satellite signals. Both plaintiffs intend that their programming reach only members of the general public who pay a fee for receiving those programs.

Each of the defendant taverns owns and operates a satellite dish antenna. Using these satellite dishes, the defendants have been intercepting NESN signals intended for direct receipt only by Quincy and exhibiting NESN programs to their customers without the permission of, or payment of fees to, either of the plaintiffs. The plaintiffs allege that the defendants thereby are violating both federal and state law.

I. Federal Communications Act

In Count One of their complaint, plaintiffs NESN and Quincy allege that defendants have violated the Federal Communications Act, 47 U.S.C. § 605(a), by intercepting and receiving communications to which they are not entitled. Section 605(a) provides in pertinent part:

No person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication ... for his own benefit or for the benefit of another not entitled thereto. No person having received any intercepted radio communication or having become acquainted with the contents ... of such communication ... knowing that such communication was intercepted, shall divulge or publish the existence, contents ... of such communication ... or use such communication ... for his own benefit or for the benefit of another not entitled thereto.

Prior to 1984, several courts ruled that there was an implied private right of action under § 605. E.g., Chartwell Communications Group v. Westbrook, 637 F.2d 459, 466 (6th Cir.1980). The 1984 Cable Act amended substantially the Federal Communications Act. The new Act explicitly provides for a private right of action in section 605, subsection (d). The pertinent part of this subsection, § 605(d)(3)(A), states that

any person aggrieved by any violation of subsection (a) of this section may bring a civil action in a United States district court or in any other court of competent jurisdiction.

Defendants move that the Federal Communications Act claim be dismissed as to plaintiff Quincy on the grounds that Quincy is not an "aggrieved person" within the meaning of § 605(d)(3)(A) and thus lacks standing to sue for alleged violations of § 605(a). Defendants argue that persons entitled to sue for violations of § 605(a) must be the senders or originators of the intercepted communications. The defendants emphasize that they did not intercept any transmission sent by plaintiff Quincy.

Authority is divided on the question of whether a party in Quincy's position has standing to sue under § 605(d) for alleged violations of § 605(a). Defendants principally rely on Air Capital Cablevision, Inc. v. Starlink Communications Group, Inc., 601 F.Supp. 1568 (D. Kansas 1985), and the legislative history of § 605(d) contained therein. Plaintiffs, on the other hand, argue that Quincy is an "aggrieved person" within the meaning of § 605(d), and principally rely on American Television and Communications Corporation v. Floken, Ltd., 629 F.Supp. 1462 (M.D.Fla.1986) and the legislative history of § 605(d) contained therein.

In Starlink, supra, two cablevision companies sued a distributor of satellite dish antannae, claiming violations of 47 U.S.C. § 605(a). The defendant's satellite dish antannae were used to receive satellite signals, but not the plaintiff's transmissions. In Starlink, as in this case, the plaintiff cable company received the satellite transmissions and then rebroadcast them to paying subscribers. The court in Starlink held that the plaintiff lacked standing under § 605(d). Starlink, 601 F.Supp. at 1571. The court explained that,

the cable company may have an exclusive right to retransmit ... the specialty programming to multiple users for profit, but the cable company can have only a collateral right to receive television signals directly from the satellite. The cable company simply has no standing to claim violations ... because the users of the earth station satellite dishes were not intercepting a transmission orginated by or retransmitted by the cable company.

Id. at 1572.

The main basis for the court's ruling in Starlink was the congressional intent of the new Act. The court quoted the remarks of Senator Goldwater during floor discussion of the 1984 Cable Act. Senator Goldwater stated that an "aggrieved party" who may bring a suit under this statute

does not include those entities which possess limited rights of reception and retransmission to the programming, such as cable systems and other purchasers of the right to receive it after satellite transmission.

Starlink, 601 F.Supp. at 1572 (quoting 98 Cong.Rec. S 14284 (daily ed. October 11, 1984) (comments of Sen. Goldwater)).

The court in Starlink also relied on its discernment of the congressional intent in the 1984 Cable Act which exempted, in 47 U.S.C. § 605(b), the manufacture, distribution, and sale of earth station satellite dish antannae from the proscription of the Act, unless programming is encrypted or there is an established marketing system. See Starlink, 601 F.Supp. at 1569-1570. The court in Starlink reviewed the legislative history of this exemption, and concluded that "It is crystal clear to this Court that the 1984 amendments to the Communications Act of 1934 were enacted specifically to protect enterprises such as that in which Starlink Communications Group is engaged." Id. at 1570.

The court reconsidered its ruling on the standing issue in the Starlink case in an unpublished memorandum. Air Capital Cablevision, Inc. v. Starlink Communications Group, Inc., No. 83-1997-K (D.Kan. May 23, 1985). The court, noting that it had "given great thought" to the standing issue, id. at 3, reaffirmed its ruling that a cable company which does not have its own transmission intercepted lacks standing under § 605. Id. The court explained that § 605 should not be interpreted to "prohibit the manufacture, distribution, sale, or use of earth station satellite dish antannae to receive programming transmitted via satellites." Id. at 5.

The reading of the 1984 amendments by the court in its original decision in Starlink, supra, and upon reconsideration, Memorandum, supra, is slightly askew, because the court read the explicit exemption of § 605(b) as a broader general policy that carried over into the definition of "any person aggrieved" in § 605(d). The great weight given by the court in Starlink to the protectionist policy in the § 605(b) exemption was noted in National Football League v. McBee & Bruno's, 621 F.Supp. 880 (E.D.Missouri, 1985). In McBee & Bruno's the court, summarizing the rationale of the Starlink decision, stated that

The main basis for the court's ruling was the Congressional intent set out in the new act, § 705(b) § 605(b), effective December 30, 1984. The new Act provides that prohibited practices of communication interception shall not apply "to the interception or receipt by any individual ... of any satellite programming for private viewing" if the programming involved is not encrypted and a marketing program is not established. Id. § 705(b) § 605(b).

Id. at 890. Section 605(b), however, is a specific exception to the general prohibition of § 605(a). As this Court ruled in granting a temporary restraining order in this case, Quincy Cablesystems, Inc. v. Sully's Bar, Inc., 640 F.Supp. 1159, 1161 (D.Mass. 1986),

The § 605(b) exception applies only to the interception of unscrambled satellite

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