US v. Hochman, 91-CR-419 (TCP).

• Decision Date: 29 December 1992
• Docket Number: No. 91-CR-419 (TCP).,91-CR-419 (TCP).
• Parties: UNITED STATES of America, v. Stephen HOCHMAN, Defendant.
• Court: U.S. District Court — Eastern District of New York

809 F. Supp. 202

UNITED STATES of America, v. Stephen HOCHMAN, Defendant.

No. 91-CR-419 (TCP).

United States District Court, E.D. New York.

December 29, 1992.

Douglas T. Burns, Asst. U.S. Atty., Christopher A. Nicolino, Special Asst. U.S. Atty. (Of Counsel), Brooklyn, NY, for U.S.

Richard P. Broder, P.C., for defendant Stephen Hochman.

MEMORANDUM AND ORDER

PLATT, Chief Judge.

In a three-count superseding indictment filed April 23, 1992, the Government charged Stephen Hochman with various offenses arising from his business of supplying electronic components. Specifically, that indictment charges Hochman with violating and conspiring with others to violate 18 U.S.C. § 2512(1)(b) ("surreptitious interception of ... electronic communications") and 47 U.S.C. § 605(e)(4) ("unauthorized decryption of satellite cable programming"). Hochman now moves this Court for an Order dismissing Count III of the indictment (charging him with violating 18 U.S.C. § 2512(1)(b)) and part of Count I (charging him with conspiring to violate 18 U.S.C. § 2512(1)(b)).

This case apparently raises a novel question of statutory interpretation in the Second Circuit. The question presented is whether 18 U.S.C. § 2512(1)(b) reaches Hochman's alleged conduct, to wit, knowingly and intentionally conspiring "to manufacture, assemble, possess and sell ... altered circuit boards, knowing ... that the design rendered said boards primarily useful for the purpose of the surreptitious interception of ... satellite transmissions of television programs, and that such devices and components thereof had been and would be transported in interstate commerce." Superseding Indictment at 1.

For the reasons that follow, the Court holds that the statute does not apply to Hochman's conduct, and therefore, Hochman's motion to dismiss Count III and part of Count I must be granted.

I.

Defendant Stephen Hochman is the owner and president of Testron, Inc. ("Testron"), an electronic components supplier. The Government alleges that between May 1, 1987 and December 31, 1989 Testron participated in the business of modifying General Instrument VideoCipher II satellite television receivers to enable home satellite dish owners to view encrypted pay-television programming without payment. In particular, the Government alleges that Hochman solicited customers by advertising in various electronic trade journals and satellite television user publications, directed the customers to send the VideoCipher II units to his business in Floral Park, New York, and then for a fee of approximately $300 per unit, sent the units to a company called Linear Electronics in California where the units were modified.

On April 30, 1991, a grand jury sitting in this district returned a one-count indictment charging Hochman with violating 18 U.S.C. § 2512(1)(b). On April 23, 1992, the grand jury returned a three-count superseding indictment charging Hochman with conspiring to violate 18 U.S.C. § 2512(1)(b) and 47 U.S.C. § 605(e)(4) (Count One), as well as substantive violations of each section (Counts Two and Three).

Hochman submits that 18 U.S.C. § 2512(1)(b) does not apply to the conduct charged in the superseding indictment and thus he cannot be convicted of the substantive crime alleged in Count III or of conspiracy to commit the same in Count I.

II.

Although the Second Circuit has not ruled on this question, other Circuits have, and until recently, they were evenly divided. In United States v. McNutt, 908 F.2d 561 (10th Cir.1990), and United States v. Lande, 968 F.2d 907 (9th Cir.1992), the Tenth and Ninth Circuits, respectively, held that § 2512(1)(b) prohibits the modification of descrambler units to enable unauthorized viewing of scrambled satellite pay-television. In contrast, the Eleventh Circuit in United States v. Herring, 933 F.2d 932 (11th Cir.1991), and the Eighth Circuit in United States v. Hux, 940 F.2d 314 (8th Cir.1991), held that § 2512(1)(b) does not prohibit such activity. The Eleventh Circuit, however, has since vacated its Herring opinion in United States v. Herring, 977 F.2d 1435 (11th Cir.1992) (ordering that the cause shall be reheard en banc), and the Eighth Circuit has overruled Hux in United States v. Davis, 978 F.2d 415 (8th Cir. 1992) (en banc). Notwithstanding these recent developments, for the following reasons, this Court is not persuaded that § 2512(1)(b) clearly prohibits Hochman's alleged activity.

III.

Originally enacted in 1968 as the "Wiretap Law," 18 U.S.C. § 2510 et seq. was amended in 1986 by the "Electronic Communications Privacy Act" ("ECPA"). This Court must decide whether the 1986 amendments to § 2512(1)(b) of the Wiretap Law made Hochman's conduct sanctionable under its terms.¹

When interpreting a criminal statute, the Court "must pay close heed to language, legislative history, and purpose in order strictly to determine the scope of the conduct the enactment forbids." Dowling v. United States, 473 U.S. 207, 213, 105 S.Ct. 3127, 3131, 87 L.Ed.2d 152 (1985). The Supreme Court has emphasized that "`"when choice has to be made between two readings of what conduct Congress has made a crime, it is appropriate, before we choose the harsher alternative, to require that Congress should have spoken in language that is clear and definite."'" Williams v. United States, 458 U.S. 279, 290, 102 S.Ct. 3088, 3094, 73 L.Ed.2d 767 (1982), quoting United States v. Bass, 404 U.S. 336, 347, 92 S.Ct. 515, 522, 30 L.Ed.2d 488 (1971), which in turn quotes United States v. Universal C.I.T. Credit Corp., 344 U.S. 218, 221-222, 73 S.Ct. 227, 229-230, 97 L.Ed. 260 (1952).

A.

Applying that rule of construction, "we examine at the outset the statutory language." Dowling, 473 U.S. at 214, 105 S.Ct. at 3131. Section 2512(1)(b) requires, first, that defendant have intentionally manufactured, assembled, possessed, or sold "any electronic, mechanical, or other device"; second, that defendant know or have 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 third, that defendant have transported such device or any component thereof in interstate or foreign commerce.

For two reasons, this language does not apply to the acts Hochman is alleged to have committed. First, the Court finds troublesome the language in the statute requiring the devices to be "primarily useful for the purpose of surreptitious interception." Admittedly, this is an element of the offense the Government must prove at trial, and therefore, it would be improper for the Court to make a determination at this point as to whether Hochman rendered the VideoCipher units "primarily useful for ... surreptitious interception." However, as Judge Gibson noted in his dissent in Davis, the appropriate inquiry under § 2512(1)(b) is not whether the descramblers can be used for surreptitious listening, but rather whether they are primarily useful for surreptitious listening. 978 F.2d at 421 (Gibson, J., dissenting) (emphasis added). The modified VideoCipher II units are similar (if not identical) to the units that are legitimately authorized to descramble particular satellite signals, see Id. at 416-417, and therefore, the modified units would not be "primarily useful for ... surreptitious listening."

The second and more compelling reason why this Court finds that the language of the statute does not apply to Hochman's alleged conduct is because when Congress amended the Wiretap Law in 1986, it made § 2512(1)(b) ambiguous by adding the term "electronic communications" without spelling out the devices to which the term refers. "Electronic communications" is defined in § 2510(12) as "any transfer of signs, signals, writing, images, sounds, data, or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectronic or photooptical system ..." The Government argues that because satellite television signals are carried by radio waves making up part of the electromagnetic spectrum, the statute applies to the interception of satellite television signals. However, the statute does not identify specifically satellite cable programming as a protected communication, and therefore, the statute "does not `plainly and unmistakably' cover Hochman's alleged conduct." Dowling, 473 U.S. at 228, 105 S.Ct. at 3139, quoting United States v. Lacher, 134 U.S. 624, 628, 10 S.Ct. 625, 626, 33 L.Ed. 1080 (1890). In contrast, 47 U.S.C. § 605(e)(4) explicitly names satellite cable programming as an activity protected by the statute.

The Government refers to the fact that § 2511(4)(c) exempts "the interception of a satellite transmission that is not encrypted or scrambled" and argues that this indicates that it would have been unnecessary to include this exception if Congress had intended to exempt all satellite programming from the reach of the Wiretap Law and that the inclusion of this "narrow" exception establishes that satellite transmissions are contemplated by § 2512(1)(b). However, as Judge Gibson notes in his Davis dissent, this exception applies only to § 2511 (not § 2512), and § 2511 concerns the acts of intentionally intercepting, using, or disclosing wire, oral, or electronic communications, and not the acts of manufacturing or selling listening devices. Moreover, § 2511 does not require that the interception be "surreptitious." Thus, § 2511 is much broader than § 2512, making it necessary for Congress to limit its coverage by including the exception in § 2511(4)(c).

B.

In light of the ambiguous language, the Court must now turn to the historical purpose of § 2512(1)(b). See Dowling, 473 U.S. at 218, 105 S.Ct. at 3134. An examination of the widely-accepted interpretation of the types of devices prohibited by the Wiretap Law before 1986 makes the Court even more reluctant to read "electronic communications" to include satellite pay-television.

Congress enacted...