Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-00948/USCOURTS-caed-2_03-cv-00948-5/pdf.json

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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

DIRECTV INC., 

 Plaintiff, No. CIV S-03-0948 GEB GGH PS

 vs. 

Peter Cao, et al.,

 Defendants. FINDINGS AND RECOMMENDATIONS 

 

___________________________/

By order filed December 20, 2005, the Honorable Garland E. Burrell, Jr., United

States District Judge, ordered the striking of defendant’s answer as an appropriate sanction to

defendant’s repeated failure to show cause or otherwise respond to this court’s order to

participate in a Joint Status Conference in accordance with Rule 16 of the Federal Rules of Civil

Procedure (Fed. R. Civ. P.). Judge Burrell did not enter judgment for plaintiff as the proposed

Findings and Recommendations did not specify the judgment sum. 

BACKGROUND

On December 2, 2002, plaintiff filed the underlying complaint in this action

against, inter alia, defendant Peter Cao, alleging defendant purchased and used a pirate access

device to permit viewing of plaintiff’s direct broadcast satellite system programming, in violation

of, inter alia, the Communications Act, 47 U.S.C. § 605 and the Federal Wiretap Laws, §§

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2

2511(1)(a) and 2512(1)(b). The complaint alleges defendant Cao purchased a Pirate Access

Devices from Shutt, consisting of a printed circuit board device called an “unlooper” that

defendant used to steal satellite television from plaintiff. The summons and complaint were

served on defendant on December 12, 2002. Fed. R. Civ. P. 4(e)(2). Pacific Atlantic Trading

Co. v. M/V Main Express, 758 F.2d 1325, 1331 (9th Cir. 1985) (default judgment void without

personal jurisdiction). Defendant failed to file an answer or otherwise appear in this action and

on January 16, 2003, plaintiff requested entry of default judgment. The clerk entered default

against defendant on January 17, 2003.

On January 29, 2003, defendant filed a motion requesting relief from the default

judgment under Fed. R. Civ. P. 60. In an affidavit attached to the motion, defendant claimed that

he was unaware of the complaint and the need to file an answer because he does not speak

English and he inadvertently passed the complaint and summons to his employer when it was

received by him at his workplace. As a result of settlement communications and a stipulation

between the parties, Judge Burrell set aside and vacated the default judgment on February 18,

2003, permitting defendant to file a responsive pleading to the complaint. Defendant was to file

this answer no later than March 8, 2003. 

On April 2, 2003, 25 days after defendant’s answer was due, plaintiff filed a

second request for default judgment.

On April 9, 2003, defendant filed an answer denying all but paragraphs 15, 19, 23,

and 28 of plaintiff’s complaint. Defendant made no mention of paragraph 15, 19, 23, and 28.

This court issued a scheduling order on April 20, 2005. The parties were ordered

to submit a joint status report no later than May 13, 2005. On that day, plaintiff filed an

individual status report stating that all efforts to establish contact with defendant through mail

and telephone in order to complete the required report had failed. Plaintiff received confirmation

that the report had been delivered to defendant’s address. In addition, several unsuccessful

attempts were made by plaintiff’s representatives to contact defendant on the telephone.

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

3

On June 20, 2005, this court ordered defendant to show cause, within ten days,

why his answer should not be stricken and judgment entered for plaintiff. The ten day period

expired without any response and defendant was provided a second opportunity to show cause on

August 18, 2005. Once again, defendant did not respond to this show cause order.

On October 20, 2005, this court filed proposed Findings and Recommendations,

which recommended striking defendant’s answer and entering judgment for plaintiff. These

proposed Findings and Recommendations were based upon defendant’s persistent failure to

participate in the filing of a Joint Status Report in accordance with Fed. R. Civ. P. 16. Defendant

was given 20 days from the date of the filing of the proposed Findings and Recommendations to

raise objections with the District Court. No objections were filed.

The District Court accepted the recommendation for dismissal of the answer on

December 20, 2005. However, the court did not enter judgment for plaintiff because the

Findings and Recommendation did not specify a sum certain. 

DISCUSSION

Despite the fact that defendant has denied all of the allegations against him, the

facts in this case are as alleged by plaintiff in their complaint. The dismissal of the answer and

entry of default effects an admission of all well-pleaded allegations of the complaint by the

defaulted party. Geddes v. United Financial Group, 559 F.2d 557 (9th Cir. 1977). The court

finds the well pleaded allegations of the complaint state claims for which relief can be granted. 

Anderson v. Air West, 542 F.2d 1090, 1093 (9th Cir. 1976).

Defendant acquired his pirate device on or about July 7, 2000. Plaintiff learned of

defendant’s activities on or about May 25, 2001 and filed this action in December 2, 2002. 

Plaintiff served the complaint on defendant on December 12, 2002. While there are no facts on

the matter, the court gives plaintiff the benefit of a doubt and assumes he ceased use of the pirate

device on that day. As a result, defendant used the pirate device to receive satellite television

signals from defendant for up to 888 days (July 7, 2000 through December 12, 2002). 

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

4

In the event of trial, the complaint prays for statutory damages in accordance with 

47 U.S.C.§ 605(e)(3)(C)(i)(II) and 18 U.S.C. § 2520(c)(2) (the Wiretap Law), or compensatory

and punitive damaged in accordance with 47 U.S.C.§ 605(e)(3)(C)(i)(I) and 18 U.S.C. §

2520(c)(2), and California common law, and reasonable attorneys fees in accordance with 47

U.S.C.§ 605(e)(3)(B)(iii) and 18 U.S.C. § 2520(b)(3). Complaint at 8:14-18. In the event of

default, the complaint requests an award of damages pursuant to 47 U.S.C. § 605(e)(4) (The

Communications Act.) Complaint at 8:12. However, § 605(e)(4), prohibits manufacture,

assembly, modification, import, export, sale or distribution of pirate access devices. It does not

apply to possessors or users of pirate devices, such as defendant. Regardless, 18 U.S.C. §

2520(a) does permit a private cause of action against users of pirate devices. Compare Directv,

Inc., v. EQ Stuff, Inc., 207 F. Supp. 2d 1077 (C.D. Cal. 2002) (private cause of action against

users of pirate devices); with Directv v. Amato, 269 F. Supp. 2d 688 (E.D. Va. 2003) (no private

cause of action for possessor of pirate devices). 

A reasonable, fair inference to be drawn from the fact of possession of the

“unlooper” for over two years, and especially since defendant’s persistent failure to defend has

denied discovery on the precise point, is that defendant used the pirate device to receive satellite

signals from plaintiff. The undersigned so finds. According, 18 U.S.C. § 2520 is an appropriate

source of law for the court to use to guide the judgment. In a private action against a user of a

pirate device, § 2520(c)(2)(B) provides an award of damages in the greater amount of $100 per

day or $10,000. The language of 18 U.S.C. § 2520(c)(2) provides two alternatives for damages. 

Specifically, the statute provides:

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.

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

5

18 U.S.C. § 2520(c)(2) (emphasis added). Whether to award damages under the wiretap law may

be discretionary and violations of both subsections (A) and (B) likely do not require imposition

of the greater penalty. Compare Nalley v. Nalley, 53 F.3d 649 (4th Cir. 1995); Dorris v. Absher,

179 F.3d 420, 429 (6th Cir. 1999); Reynolds v. Spear, 93 F.3d 428, 434 (8th Cir. 1996);

DIRECTV, Inc. v. Brown, 371 F.3d 814, 818 (11th Cir. 2004); with Rodgers v. Wood, 910 F.2d

444, 448 (7th Cir. 1990) (no discretion). Because of the use of the permissive “may” in the

statute, the undersigned follows the “discretion” jurisdiction. However, the court sees no factors

which would cause it not to make some award under the statute, especially because defendant has

seen fit not to proffer any.

Defendant may be liable under § 2520(c)(2)(B) for up to $88,800 based on his

apparent use of the pirate device for 888 days. The court deems this punishment to be excessive

in light of the offense committed. Instead, the court turns instead to § 2520(c)(2)(A) for guidance

and imposition of an appropriate judgment. 

The complaint makes no representation regarding the actual damages suffered by

plaintiff and the facts do not indicate that defendant profited from his pirating of a satellite

signal. However, on multiple occasions, plaintiff requested default judgment in the amount of

$10,000. The court finds this amount to be an approximation of plaintiff’s actual damages under

§ 2520(c)(2)(A). The plaintiff has not stated the amount of attorney’s fees in their complaint or

requests for default judgment. 

The court deems defaulting defendant, by his failure to show cause on multiple

occasions, to have waived any objections to the statutory source of the damages prayed for in the

instant motion. There are no policy considerations which preclude the entry of default judgment

of the type requested. See Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986). 

In view of the foregoing findings, IT IS RECOMMENDED that judgment be

entered for plaintiff in the amount of $10,000.

\\\\\

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

6

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 twenty

days after being served with these findings and recommendations, either party may file written

objections with the court. The document should be captioned “Objections to Magistrate Judge's

Findings and Recommendations.” 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: 1/24/06

/s/ Gregory G. Hollows

___________________________________

 GREGORY G. HOLLOWS

UNITED STATES MAGISTRATE JUDGE

GGH:kr

directv948.defjud.wpd

Case 2:03-cv-00948-GEB-GGH Document 51 Filed 01/24/06 Page 6 of 6