Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-02057/USCOURTS-caed-2_04-cv-02057-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

DIRECTV, INC., a California No. CIV.S-04-2057 GEB DAD

corporation,

 

Plaintiff,

v. FINDINGS AND RECOMMENDATIONS

ALLEN VIGGERS,

Defendant.

__________________________/

This matter is before the court on plaintiff’s motion for

default judgment against defendant Allen Viggers. Sandeep J. Shah

appeared on behalf of plaintiff at the hearing on the motion. There

was no appearance on behalf of defendant. Having considered all

written materials submitted with respect to the motion, and after

hearing oral argument, for the reasons set forth below the court

recommends that plaintiff’s motion be granted in part.

PROCEDURAL BACKGROUND

Plaintiff DirecTV, Inc. initiated this action for damages

and injunctive relief pursuant to various federal statutes

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prohibiting the interception of satellite communications. Despite

being served with process, defendant Allen Viggers failed to appear

in this action. On February 10, 2005, the Clerk of the Court entered

default against defendant Viggers pursuant to plaintiff’s request. 

On March 8, 2005, plaintiff filed the instant motion along with

declarations by counsel and one of plaintiff’s employees addressing

damages. Despite being served with all papers filed in connection

with the motion for entry of default judgment, defendant Viggers has

not responded to it. 

LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) governs

applications to the court for entry of default judgment. Upon entry

of default, the complaint’s factual allegations regarding liability

are taken as true, while allegations regarding the amount of damages

must be proven. Dundee Cement Co. v. Howard Pipe & Concrete

Products, 722 F.2d 1319, 1323 (7th Cir. 1983)(citing Geddes v. United

Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also TeleVideo Sys.,

Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). Where damages

are liquidated (i.e., capable of ascertainment from definite figures

contained in the documentary evidence or in detailed affidavits),

judgment by default may be entered without a damages hearing. See

Dundee, 722 F.2d at 1323. Unliquidated and punitive damages,

however, require “proving up” at an evidentiary hearing or through

other means. Dundee, 722 F.2d at 1323-24; see also James v. Frame, 

6 F.3d 307, 310 (5th Cir. 1993).

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Granting or denying default judgment is within the court’s

sound discretion, see Draper v. Coombs, 792 F.2d 915, 924-25 (9th

Cir. 1986) (citations omitted), and the court is free to consider a

variety of factors in exercising that discretion, see Eitel v.

McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The court may

consider such factors as:

(1) the possibility of prejudice to the

plaintiff, (2) the merits of plaintiff’s

substantive claim, (3) the sufficiency of the

complaint, (4) the sum of money at stake in the

action, (5) the possibility of a dispute

concerning material facts, (6) whether the

default was due to excusable neglect, and (7) the

strong policy underlying the Federal Rules of

Civil Procedure favoring decisions on the merits.

Eitel, 782 F.2d at 1471-72 (citing 6 Moore’s Federal Practice, ¶ 55-

05[2], at 55-24 to 55-26). 

ANALYSIS

The detailed allegations of the complaint indicate that

plaintiff has developed a satellite system capable of transmitting

digitized video and audio signals to homes and businesses nationwide

to be used for entertainment purposes. In addition to other

hardware, such as a satellite dish and receiver, each DirecTV

customer is required to have a removable access card that manages the

receipt of satellite signals and the opening and closing of

television channels offered by DirecTV. DirecTV scrambles its

signals using encryption technology to prevent their unauthorized

reception. The complaint generally alleges that defendant purchased

and used an illegally programmed access card and/or a device designed

to permit viewing of DirecTV’s programming without authorization by

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or payment to DirecTV. More specifically, the complaint alleges that

on or about May 3, 2002, defendant Viggers “purchased two (2) multipurpose Pirate Access Devices called a ‘Combo,’ consisting of, inter

alia, a printed circuit board device from [an Internet seller of

pirate access devices known as] Stinky Dave.” (Compl. ¶ 11(a).) The

complaint also alleges that defendant placed his order using

interstate or foreign wire facilities and received his order via the

United States Postal Service or commercial mail carriers. (Compl. ¶

11.) The complaint alleges that as a result of this illegal activity

defendant is liable to DirecTV under federal and state

telecommunication and wiretapping laws. Although plaintiff’s

complaint prays for injunctive relief and damages, in the instant

motion plaintiff seeks a statutory damages award of $20,000 ($10,000

X 2) for the two devices purchased and used by defendant.

Weighing the factors outlined in Eitel v. McCool, 782 F.2d

at 1471-72, the undersigned has determined that default judgment

against defendant is appropriate. Defendant has made no showing that

his failure to defend was due to excusable neglect. The complaint is

sufficient, and the amount of money at stake is relatively small,

particularly because plaintiff seeks only statutory damages, not the

recovery of lost profits or actual damages. There also is no

apparent possibility of a dispute concerning the material facts

underlying the action.

With respect to the merits of plaintiff’s substantive

claims, plaintiff seeks default judgment against defendant Viggers

for alleged violations of 18 U.S.C. § 2511(1)(a), which concerns any

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person who “intentionally intercepts, endeavors to intercept, or

procures any other person to intercept or endeavor to intercept, any

wire, oral, or electronic communication[,]” and 47 U.S.C. §

605(e)(4), concerning “[a]ny person who manufactures, assembles,

modifies, imports, exports, sells, or distributes any electronic,

mechanical, or other device or equipment, knowing or having reason to

know that the device or equipment is primarily of assistance in the

unauthorized decryption of satellite cable programming ....” In the

alternative, plaintiff seeks default judgment on the alleged

violation of 47 U.S.C. § 605(a), which prohibits receiving or

assisting others in receiving unauthorized satellite signals.

With respect to 18 U.S.C. § 2511(1)(a), the undersigned is

aware of one published opinion in which a district court found no

private right. See DirecTV v. DeCroce, 332 F. Supp. 2d 715, 720 (D.

N.J. 2004). However, the weight of authority is to the contrary,

recognizing a private right of action under that statute. See, e.g.,

DirecTV, Inc. v. Treworgy, 373 F.3d 1124, 1127 (11th Cir. 2004);

Flowers v. Tandy Corp., 773 F.2d 585, 589 (4th Cir. 1985); DirecTV,

Inc. v. Baye, 2005 WL 3088451, *1, No. 04-C-1104 (E.D. Wis. Nov. 17,

2005); DirecTV, Inc. v. Benson, 333 F. Supp. 2d 440, 447 (M.D. N.C.

2004); DirecTV, Inc. v. Huynh, 318 F. Supp. 2d 1122, 1128-29 (M.D.

Ala. 2004). Therefore, there is no reason to doubt the merits of

plaintiff’s claim under 18 U.S.C. § 2511(1)(a).

The same cannot be said, however, regarding plaintiff’s

claim under 47 U.S.C. § 605(e)(4). As a general matter, there is a

private cause of action to enforce 47 U.S.C. § 605(e)(4). 

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1 The undersigned’s finding in this regard is not impacted by

the complaint’s conclusory allegations which simply mimic the

language of § 605(e)(4). See Oliver, 2005 WL 1126786, *4 n.1

(“merely mimicking the language of the statute is not a factual

6

International Cablevision, Inc. v. Sykes, 997 F.2d 998, 1007 (2d Cir.

1993); Benson, 333 F. Supp. 2d at 448 n.7; Huynh, 318 F. Supp. 2d at

1128; DirecTV, Inc. v. Tasche, 316 F. Supp. 2d 783, 785-86 (E.D. Wis.

2004). Nonetheless, that private right of action is not available to

plaintiff in this case based on the specific conduct alleged in the

complaint. More specifically, plaintiff’s complaint contains no

factual allegation that defendant Viggers was involved in the sale

and/or distribution of pirate access devices. Only defendant’s

purchase and use of such devices is alleged. The alleged conduct is

insufficient to establish liability under 47 U.S.C. § 605(e)(4)

which, as a number of district courts have recognized, targets

upstream manufacturers and/or distributors of pirate access devices,

not mere purchasers and users such as defendant Viggers. See

DirecTV, Inc. v. Oliver, 2005 WL 1126786, *3, No. 04-3454 SBA (N.D.

Cal. May 12, 2005); DirecTV, Inc. v. Neznak, 371 F. Supp. 2d 130, 133

(D. Conn. 2005); DirecTV, Inc. v. Borich, 2004 WL 2359414, at *3, No.

1:03-2146 (S.D. W.Va. Sept. 17, 2004); DirecTV, Inc. v. Albright,

2003 WL 22956416, at *2, No. 03-4603 (E.D. Pa. Dec. 9, 2003); but see

DirecTV, Inc. v. Robson, 420 F.3d 532, 543-44 (5th Cir. 2005). 

Because the complaint does not contain factual allegations that

defendant Viggers was involved in the sale or distribution of pirate

access devices, plaintiff has failed to demonstrate the merits of its

claim under 47 U.S.C. § 604(e)(4).1

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allegation”). Nor is it affected by plaintiff’s allegation that “by

removing and inserting Pirate Access Devices and/or inserting

illegally programmed Access Cards into valid DirecTV Receivers,

Defendant engaged in the unlawful assembly and/or modification of

devices ....” (Compl. at 21.) Such actions do not convert defendant

into a manufacturer or distributor contemplated by 47 U.S.C. §

605(e)(4). See Oliver, 2005 WL 1126786, *4 (rejecting similar

allegations); Borich, 2004 WL 2359414, at *3 (same). 

7

Finally, courts have consistently recognized a private

cause of action to enforce 47 U.S.C. § 605(a) for the type of conduct

alleged in the complaint. See, e.g., Prostar v. Massachi, 239 F.3d

669, 673 (5th Cir. 2001); International Cablevision, Inc., 997 F.2d

at 1007; Sioux Falls Cable Television v. State of S.D., 838 F.2d 249,

251 (8th Cir. 1988); Huynh, 318 F. Supp. 2d at 1128; Tasche, 316 F.

Supp. 2d at 785-86. Therefore, there is no reason to doubt the

merits of plaintiff’s claim under 47 U.S.C. § 605(a). 

In sum, because the relevant factors weigh in plaintiff’s

favor, the court, while recognizing the public policy favoring

decisions on the merits, will recommend that default judgment be

granted against defendant on DirecTV’s claims pursuant to 18 U.S.C. §

2511(1)(a) and 47 U.S.C. § 605(a), but not on the claim brought

pursuant to 47 U.S.C. § 605(e)(4). 

Upon determining that entry of default judgment is

warranted, the court must next determine the terms of the judgment.

Pursuant to 18 U.S.C. § 2520(c)(2), a violation of 18 U.S.C. §

2511(1)(a) exposes a defendant to a civil penalty of $10,000. 18

U.S.C. § 2520(c)(2) specifically provides as follows:

In any other action under this section, the court

may assess as damages whichever is the greater

of–

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(A) the sum of the actual damages suffered by the

plaintiff and any profits made by the violator as

a result of the violation; or

(B) statutory damages of whichever is the greater

of $100 a day for each day of violation or

$10,000.

18 U.S.C. § 2520(c)(2).

Plaintiff suggests that an award of damages under §

2520(c)(2) is mandatory, relying primarily on the decision in Rodgers

v. Wood, 910 F.2d 444 (7th Cir. 1990). However, the weight of

authority recognizes that both the plain language of § 2520(c)(2) and

the fact that Congress changed the operative verb from "shall" to

"may" clearly indicate that Congress intended district courts to have

discretion in awarding damages under § 2520(c)(2). See DirecTV, Inc.

v. Brown, 371 F.3d 814, 818 (11th Cir. 2004); Dorris v. Absher, 179

F.3d 420, 429-30 (6th Cir. 1999); Reynolds v. Spears, 93 F.3d 428,

434 (8th Cir. 1996); Nalley v. Nalley, 53 F.3d 649, 651-53 (4th Cir.

1995). Therefore, the undersigned finds that whether to award

damages under § 2520(c)(2) is discretionary. 

In determining whether to award damages under § 2520(c)(2),

the court is free to consider a variety of factors which one district

court summarized as follows:

In exercising its discretion in deciding whether

to award damages under 18 U.S.C. § 2520(c)(2), a

district court should make an individualized

assessment of each defendant. Factors that may

be considered include whether the plaintiff

suffered financial harm, the extent to which a

violation occurred and unlawfully intercepted

signals were disclosed, whether the defendant had

a legitimate reason for his or her actions,

whether the defendant profited from his or her

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acts, and whether an award of damages would serve

a legitimate purpose.

DirecTV, Inc. v. Guzzi, 308 F. Supp. 2d 788, 790 (E.D. Mich.

2004)(citations omitted).

Considering the cited factors in this case, the court finds

that there is simply no evidence indicating the extent to which the

violations occurred or unlawfully intercepted signals were disclosed

by defendant Viggers. There is a similar dearth of evidence as to

whether defendant Viggers had a legitimate reason for his actions or

profited from his acts. Further, while DirecTV expends substantial

business, technical, legal and financial resources combating the

presence of pirate access devices in the marketplace in general (see

Decl. of Jaime Sichler filed March 8, 2005), there is scant evidence

of the financial harm suffered by DirecTV as result of defendant

Viggers’ conduct in particular. Finally, the court appreciates

plaintiff’s desire to deter future conduct similar to that alleged in

the complaint. An award of statutory damages likely would serve that

legitimate purpose. However, an award of $10,000 is beyond the range

of what might be considered reasonable in this regard. For all of

these reasons, the undersigned will recommend that the assigned

district judge decline to award damages under 18 U.S.C. § 2520(c)(2).

On the other hand, the court will not recommend that

DirecTV go uncompensated. As addressed above, plaintiff seeks

alternative relief for defendant’s violation of 47 U.S.C. § 605(a)

and default judgment on that claim is appropriate. Further,

plaintiff accurately indicates that a court has discretion to direct

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a party aggrieved by a violation of § 605(a) be awarded statutory

damages of not less than $1,000 or more than $10,000 for each

violation, as the court considers just. 47 U.S.C. §

605(e)(3)(B)(ii); 47 U.S.C. § 605(e)(3)(C)(i)(II). Under the same

statutory scheme, recovery of full costs, including reasonable

attorneys’ fees, is mandatory. 47 U.S.C. § 605(e)(3)(B)(iii). See

DirecTV, Inc. v. Adkins, 320 F. Supp. 2d 474, 476 (W.D. Va.

2004)(“Whereas the grant of injunctive and monetary relief lies

within the court's discretion, an award of costs, including

reasonable attorneys' fees, is mandatory.”).

Again, there is a lack of evidence here showing the extent

defendant Viggers violated the statutes at issue and there is no

indication that he is an egregious violator. On the other hand,

factual allegations of the complaint do establish that defendant

purchased and used two pirate access devices. Such conduct cannot be

ignored and likely resulted in some commercial loss to DirecTV,

however uncertain. Further, some award of statutory damages will

likely serve to deter others from purchasing and using pirate access

devices. While an award of $10,000 would be exorbitant, the court

finds that a statutory award of $1,000 as allowed by the provisions

of 47 U.S.C. § 605(e)(3) would be just, particularly when combined

with the mandatory attorneys’ fees and costs. Such an award also is

commensurate with awards imposed in other jurisdictions under similar

circumstances. See, e.g., DirecTV, Inc. v. Trawick, 359 F. Supp. 2d

1204, 1208 (M.D. Ala. 2005)(granting default judgment and awarding

statutory damages of $1,000 for violation of § 605(a) where by

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default defendant admitted to using one or more devices but DirecTV

failed to allege or show how many unauthorized interceptions were

made); DeCroce, 332 F. Supp. 2d at 718-19 (awarding statutory damages

of $1,000 where the complaint alleged defendant purchased one pirate

device and intercepted DirecTV's programming); Huynh, 318 F. Supp. 2d

at 1131-32 (awarding statutory damages of $1,000 where the complaint

alleged defendant purchased three devices amounting to one violation

of § 605(a)); See DirecTV, Inc. v. Kaas, 294 F. Supp. 2d 1044, 1049

(N.D. Iowa 2003)(awarding $1,000 where there was no evidence that

defendant profited from the device and, although it was a reasonable

assumption, there was no evidence defendant even used the device);

Kingvision Pay-Per-View, Ltd. v. Backman, 102 F. Supp. 2d 1196, 1199

(N.D. Cal. 2000)(“But there are no allegations of such repeat

behavior, and no evidence of otherwise egregious willfulness that

would warrant harsh punitive damages in this case. Accordingly, the

Court will award the statutory minimum of $1,000 ....”); DirecTV,

Inc. v. Christomos, 2004 WL 2110700, *2-3, No. 03-1622-HO (D. Or.

Sept. 20, 2004) (entering default judgment but declining to award any

statutory damages due to the paucity of evidence and awarding

$2,134.15 in attorneys’ fees and costs); DirecTV, Inc. v. Taylor,

2004 WL 1878337, *2-3, No. 03-6126-HO (D. Or. Aug. 19, 2004)

(entering default judgment but declining to award any statutory

damages due to the paucity of evidence and awarding $3,727.94 in

attorneys’ fees and costs).

/////

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2 The expenses incurred by plaintiff are set forth in the

Declaration of Sandeep J. Shah filed on March 8, 2005. The

undersigned finds those expenses to be reasonable.

12

Therefore, the undersigned will recommend that the assigned

district judge award plaintiff the minimum statutory damages of

$1,000 for defendant’s violation of 47 U.S.C. § 605(a).

CONCLUSION

Accordingly, for the reasons stated above, the court HEREBY

RECOMMENDS that:

1. Plaintiff’s motion for default judgment be granted in

part and denied in part;

2. The district court enter default judgment against

defendant Viggers on DirecTV’s claims pursuant to 18 U.S.C. §

2511(1)(a) and 47 U.S.C. § 605(a), but not on the claim pursuant to

47 U.S.C. § 605(e)(4); and

3. The district court award no damages for defendant

Viggers’ violation of 18 U.S.C. § 2511(1)(a) but award $ 1,000 in

damages, plus plaintiff’s reasonable attorneys’ fees and costs in

the amount of $2,118,2 for defendant’s violation of 47 U.S.C. §

605(a).

These findings and recommendations are submitted to the

United States District Judge assigned to the case pursuant to the

provisions of 28 U.S.C. § 636(b)(l). Within ten (10) days after

being served with these findings and recommendations, any party may

file written objections with the court and serve a copy on all

parties. Such a document should be captioned “Objections to Findings

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and Recommendations.” The parties are advised that failure to file

objections within the specified time may waive the right to appeal

the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th

Cir. 1991).

DATED: November 30, 2005.

DAD:th

Ddad1\orders.civil\directv2057.default.judg.f&r

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