U.S. v. One Macom Video Cipher II, SN A6J050073

• Decision Date: 03 February 1993
• Docket Number: No. 91-4146,91-4146
• Citation: 985 F.2d 258
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. ONE MACOM VIDEO CIPHER II, SN A6J050073, et al., Defendants-Appellees, Anthony E. Goldberg, Claimant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 258

985 F.2d 258

UNITED STATES of America, Plaintiff-Appellant, v. ONE MACOM VIDEO CIPHER II, SN A6J050073, et al., Defendants-Appellees Anthony E. Goldberg, Claimant-Appellee.

No. 91-4146.

United States Court of Appeals Sixth Circuit.

Argued Oct. 2, 1992.

Decided Feb. 3, 1993.

Kevin R. Conners (argued and briefed), Office of the U.S. Atty., Columbus, OH, for plaintiff-appellant.

Max Kravitz (briefed), Janet E. Kravitz (argued), Columbus, OH, for defendants-appellees.

Before: NELSON and SILER, Circuit Judges; and MILES, Senior District Judge. ^*

SILER, Circuit Judge.

The United States of America ("government") filed a forfeiture action under 18 U.S.C. § 2513 (1988) against certain electronic devices which were used, sent, carried, manufactured, assembled, possessed, sold, or advertised in violation of the Electronic Communications Privacy Act of 1986 ("ECPA"), specifically 18 U.S.C. §§ 2511 and 2512. The district court granted claimant-appellee's, Anthony E. Goldberg's, motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). For the following reasons, the district court's order is REVERSED.

FACTS

On August 31, 1990, the Federal Bureau of Investigation executed a search warrant at claimant's premises and seized the subject res (the defendant electronic equipment). The seizure resulted from information received that claimant was cloning General Instruments Video Cipher II Satellite Descrambler Modules, and modifying otherwise legal descramblers by inserting the cloned modules. The modified descramblers enabled a purchaser to receive premium pay satellite television channels without paying a fee to the programmers.

On March 18, 1991, the government filed a § 2513 forfeiture complaint alleging that the electronic devices were unlawfully modified satellite decoders, manufactured and sold for the purpose of illegally intercepting encrypted signals of premium pay television programming networks such as HBO, ESPN, and others. The district court granted claimant's motion to dismiss, holding that the statutory language, legislative history, and case law interpreting the ECPA did not bring satellite descramblers within the scope of §§ 2511 and 2512.

ANALYSIS

The Electronic Communications Privacy Act was amended in 1986 for the purposes of "updat[ing] and clarif[ing] the Federal privacy protection and standards in light of dramatic changes in new computer and telecommunications technology." 1986 U.S.C.C.A.N. 2112, 2183. As a result, the issue of the ECPA's scope regarding the illegal use of modified descramblers is before this court for the first time.

ECPA SECTION 2111 ¹

Section 2511 of the ECPA prohibits the intentional interception of electronic communications.

                18 U.S.C. § 2511(1).   The statute does except the unauthorized receipt of satellite television transmissions from its coverage.   Likewise, § 2511 imposes no "surreptitiousness" requirement.   Thus, as claimant manufactured and used modified descramblers for the purpose of intentionally intercepting satellite television programming, he violated § 2511
                

ECPA SECTION 2512

Section 2512 of the ECPA imposes criminal sanctions on anyone who intentionally "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." See United States v. Hux, 940 F.2d 314, 316 (8th Cir.1991), overruled by United States v. Davis, 978 F.2d 415 (8th Cir.1992); 1986 U.S.C.C.A.N. 3555. Electronic communication is "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio...." 18 U.S.C. § 2510(12). Arguably, this definition includes the transmission of satellite television signals, thereby giving the ECPA a broad application.

Claimant argues that the applicable statute in this action is 47 U.S.C. § 605. ² Enacted prior to the ECPA, § 605 prohibits the unauthorized interception of traditional radio communications and communications transmitted by means of new technologies, including satellite communications. See United States v. Herring, 933 F.2d 932, 934, 937 (11th Cir.1991), vacated, 977 F.2d 1435 (11th Cir.1992). The legislative history of the 1986 ECPA amendments contains several statements that "satellite cable programming," as defined in § 605, is excluded from the coverage of the ECPA. However, some circuits have interpreted these statements as referring only to § 605(b), which exempts unencrypted satellite transmissions of television programming from the prohibition of § 605(a). See United States v. Lande, 968 F.2d 907 (9th Cir.1992); United States v. McNutt, 908 F.2d 561 (10th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 955, 112 L.Ed.2d 1043 (1991). As unencrypted satellite transmissions are expressly excluded from the amendments by § 2511(2)(g)(iii)(II), these courts have inferred that Congress would have included in the amendments a broader exclusion than that provided by § 2511(2)(g)(iii)(II) if it had "intended to exempt all satellite pay television transmissions from the coverage of the ECPA." Lande, 968 F.2d at 912. It is unlikely that Congress intended to except all satellite television transmissions, as that would render the § 2511 exclusion as surplusage.

The circuits are split on the issue of whether the ECPA prohibits modification of descramblers to allow unauthorized viewing of scrambled satellite television. Compare Lande, 968 F.2d 907; United States v. Splawn, 963 F.2d 295 (10th Cir.1992); Although the ECPA's legislative history contains statements referring to an exception for "satellite cable programming," several statements were made by sponsors of the act indicating that "the sanctions contained in this legislation would be imposed in addition to, and not instead of, those contained in section 605." See Lande, 968 F.2d at 912 (quoting 132 Cong.Rec. S14452-53 (Oct. 1, 1986)). Moreover, the ECPA's language does not indicate any intent to exempt satellite programming from its scope. In fact, the statute's plain language "encompasses satellite television signals ... [as] it is undisputed that satellite television transmissions contain sounds and images and are carried via radio waves ... therefore ... constitut[ing] electronic communications under § 2510(12)." McNutt, 908 F.2d at 564.

                and McNutt, 908 F.2d 561 (§ 2512 prohibits modification of descramblers), with Herring, 933 F.2d 932;  and Hux, 940 F.2d 314 (reaching the opposite conclusion);  see also United States v. Shriver, 980 F.2d 456 (7th Cir.1992), rev'g 782 F.Supp. 408 (C.D.Ill.1992) (evidentiary hearing required to determine the characteristics of the modified descramblers).   In McNutt, the court concluded that satellite television transmissions carry "both images and sounds by radio waves and that the defendant's cloned descramblers were electronic devices which intercepted electronic communications."  McNutt, 908 F.2d at 564-565.   As the receipt of the programming was surreptitious, defendant was properly charged under § 2512.   See Lande, 968 F.2d at 910 (modified descramblers are "primarily useful for the purpose of ... surreptitious interception" of satellite transmissions).   On the other hand,

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