Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-01905/USCOURTS-caed-2_03-cv-01905-0/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-03-1905 MCE DAD

corporation,

 

Plaintiff,

v. FINDINGS AND RECOMMENDATIONS

TERRY SAUNTRY, et al.,

Defendants.

__________________________/

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

default judgment against defendants Terry Sauntry and Harold Cardona.

Sandeep J. Shah appeared on behalf of plaintiff at the hearing on the

motion. There was no appearance on behalf of either 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.

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PROCEDURAL BACKGROUND

Plaintiff DirecTV, Inc. initiated this action for damages

and injunctive relief pursuant to various federal statutes

prohibiting the interception of satellite communications. Despite

being served with process, defendants Terry Sauntry and Harold

Cardona failed to appear in this action. The Clerk of the Court

entered default against defendants Sauntry and Cardona pursuant to

plaintiff’s request. Plaintiff then 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, neither

defendant Sauntry nor defendant Cardona has 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

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

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

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.

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The complaint generally alleges that each defendant

purchased and used an illegally programmed access card and/or a

device designed to permit viewing of DirecTV’s programming without

authorization by or payment to DirecTV. More specifically, the

complaint alleges that on or about February 6, 2001, defendant

Sauntry “purchased three (3) Pirate Access Devices consisting of a

printed circuit board device called a ‘Viper Unlooper,” a programmer

primarily designed to illegally modify DirecTV Access Cards called a

‘Viper Reader/Writer,’ and a preprogrammed chip primarily designed to

illegally modify DirecTV Access Cards called a ‘WTX Chip Upgrade’”

from a internet business entity known as White Viper Technologies.

(Compl. ¶ 13(a).) With respect to defendant Cardona, the complaint

alleges that on or about July 17, 2000, defendant “purchased a Pirate

Access Device, consisting of a printed circuit board device called a

‘Wildthing 2 Unlooper’” from White Viper Technologies. (Compl. ¶

17(a).) The complaint also alleges that on or about February 28,

2001, defendant Cardona “purchased a Pirate Access Device called an

‘Amtel Programmer,’ consisting of a programmer primarily designed to

illegally modify DirecTV Access Cards” from White Viper Technologies. 

(Compl. ¶ 17(b).) The complaint alleges that defendants placed their

orders using interstate or foreign wire facilities and received the

orders via the United States Postal Service or commercial mail

carriers. (Compl. ¶¶ 13 & 17.)

According to the complaint, as a result of this illegal

activity each defendant is liable to DirecTV under federal and state

telecommunication and wiretapping laws. Although plaintiff’s

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1 Plaintiff’s memorandum of points and authorities in support

of its motion for default judgment as to defendant Cardona actually

asserts that defendant Cardona purchased a total of five (5) devices

and that defendant therefore is liable for a total of $50,000. This

position appears to be based on the declaration of the DirecTV

employee indicating that records seized from White Viper show a total

of five devices purchased by defendant. However, as set forth above,

the complaint clearly alleges that defendant Cardona purchased only

two (2) devices. (Compl. ¶¶ 17(a) & (b).) Under the applicable

legal standards the allegations of the complaint are controlling. 

For these reasons, the undersigned has construed plaintiff’s motion

as seeking an award of $20,000 as to defendant Cardona.

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complaint prays for injunctive relief and damages, in the instant

motion plaintiff seeks a statutory damages award of $30,000 ($10,000

X 3) for the three devices purchased and used by defendant Sauntry

and an award of $20,000 ($10,000 X 2) for the two devices purchased

and used by defendant Cardona.1

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

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

against each defendant is appropriate. Defendants have made no

showing that their 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 Sauntry

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

person who “intentionally intercepts, endeavors to intercept, or

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

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wire, oral, or electronic communication[,]” or in the alternative 47

U.S.C. § 605(a), which prohibits receiving or assisting others in

receiving unauthorized satellite signals. As to defendant Cardona,

plaintiff seeks default judgment for alleged violations of 18 U.S.C.

§ 2511(1)(a) and 47 U.S.C. § 605(e)(4), which concerns “[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 as to defendant Cardona on the alleged violation of 47

U.S.C. § 605(a).

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 of action. 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 compelling 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), which is brought against defendant

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Cardona only. (Compl. at 9.) As a general matter, there is a

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

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 Cardona 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 Cardona. 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 Cardona was involved in the sale or distribution of pirate

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2 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

allegation”). 

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

claim under 47 U.S.C. § 604(e)(4).2

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 defendants 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:

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In any other action under this section, the court

may assess as damages whichever is the greater

of–

(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).

There is some authority for the proposition that an award

of damages under § 2520(c)(2) is mandatory. See 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

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signals were disclosed, whether the defendant had

a legitimate reason for his or her actions,

whether the defendant profited from his or her

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 the context of 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 defendants. There is a similar dearth of

evidence as to whether defendants had a legitimate reason for their

actions or profited from their 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 Decls. of Jaime Sichler filed April 14 & 19, 2005),

there is scant evidence of the financial harm suffered by DirecTV as

result of defendant Sauntry’s and defendant Cardona’s conduct in

particular. 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 defendants’ violation of 47 U.S.C. § 605(a)

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3 As to defendant Cardona, the undersigned is not persuaded

that he is a particularly egregious offender by the evidence of his

participation in internet chat groups discussing the use of pirate

access devices to intercept plaintiff’s signal and programming. (See

Decl. of Jaime Sichler ¶ 42.) 

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and default judgment on that claim is appropriate. Further,

plaintiff accurately indicates that a court has discretion to direct

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

defendants violated the statutes at issue and there is no indication

that they are particularly egregious violators, such as distributors

of pirate access devices and software.3 On the other hand, factual

allegations of the complaint do establish that defendants purchased

and used two or three 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

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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

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

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$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 statutory damages

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

fees and costs).

Therefore, the undersigned will recommend that the assigned

district judge award plaintiff the minimum statutory damages of

$1,000 as to each defendant for the 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 (Doc. nos. 63 &

68) be granted in part and denied in part;

2. The district court enter default judgment against

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

2511(1)(a) and 47 U.S.C. § 605(a);

3. The district court enter default judgment against

defendant Cardona 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);

4. The district court award no damages for defendants’

violations of 18 U.S.C. § 2511(1)(a) but award $ 1,000 in damages as

to each defendant for the violation of 47 U.S.C. § 605(a); and

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4 The expenses incurred by plaintiff are set forth in the

declarations of Sandeep J. Shah filed on April 14 & 19, 2005. The

undersigned finds those expenses to be reasonable.

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5. The district court award plaintiff’s reasonable

attorneys’ fees and costs in the amount of $2,436.90 as to defendant

Sauntry and $2,731.60 as to defendant Cardona.4

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

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: January 18, 2006.

DAD:th

Ddad1\orders.civil\directv1905.default.judg.f&r

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