In the

United States Court of Appeals

For the Seventh Circuit

Nos. 06-2219 & 06-2221

DIRECTV, INC.,

Plaintiff-Appellee,

v.

DAVID BARCZEWSKI and JONATHAN WISLER,

Defendants-Appellants.

Appeals from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

Nos. 1:03-cv-1879 & -1930—David F. Hamilton, Judge.

ARGUED FEBRUARY 21, 2007—DECIDED MAY 13, 2010

Before EASTERBROOK, Chief Judge, and FLAUM and

SYKES, Circuit Judges.

EASTERBROOK, Chief Judge. A jury concluded that

Jonathan Wisler intercepted encrypted signals from the

DirecTV satellite system without authorization and that

David Barczewski furnished devices to assist others to

steal the signals. See 18 U.S.C. §2511; 47 U.S.C. §605.

Ample evidence supports this verdict: both defendants

bought electronic gear from a merchant that advertised
2 Nos. 06-2219 & 06-2221

its products as designed to facilitate theft of DirecTV

signals, and both participated in an online discussion

group, called the “Pirate’s Den,” whose members exchanged advice about how to decrypt DirecTV signals

without paying. Both defendants insisted that the “smart

cards” and associated gear they purchased had legal

uses. That much is uncontested, but the jury did not

have to believe defendants’ claim that the gear had been

put to a legal rather than an illegal use. Nor did the

jury have to believe Wisler’s assertion that, as a DirecTV

subscriber, he had no reason to steal signals. After buying

a smart card and joining the Pirate’s Den, Wisler cut

back to the lowest tier of service; a jury could conclude

that he descrambled other programs, such as sports and

movies, without paying.

Most of defendants’ legal arguments are feeble. They

contend, for example, that DIRECTV, Inc., the provider of

DirecTV service, is not aggrieved by signal theft and

therefore cannot sue under 18 U.S.C. §2520, which provides a private right of action for some violations of

18 U.S.C. §2511, an anti-interception statute. Every court

of appeals that has considered this subject has held

that DIRECTV is entitled to sue under §2520. See

DIRECTV, Inc. v. Webb, 545 F.3d 837 (9th Cir. 2008);

DIRECTV, Inc. v. Bennett, 470 F.3d 565 (5th Cir. 2006);

DIRECTV, Inc. v. Pepe, 431 F.3d 162 (3d Cir. 2005);

DIRECTV, Inc. v. Nicholas, 403 F.3d 223 (4th Cir. 2005). We

agree with that conclusion, as well as the related point

that DIRECTV is a “person aggrieved” entitled to sue

under §605. See DIRECTV, Inc. v. Seijas, 508 F.3d 123 (3d

Cir. 2007); DIRECTV, Inc. v. Budden, 420 F.3d 521, 526–28
Nos. 06-2219 & 06-2221 3

(5th Cir. 2005); see also United States v. Norris, 88 F.3d 462,

468–69 (7th Cir. 1996).

Nonetheless, defendants insist, an exception to §2511

makes the private right of action useless to DIRECTV.

The exception reads:

It shall not be unlawful under this chapter . . . for

any person—

(i) to intercept or access an electronic communication made through an electronic

communication system that is configured

so that such electronic communication is

readily accessible to the general public;

(ii) to intercept any radio communication

which is transmitted—(I) by any station

for the use of the general public, or that

relates to ships, aircraft, vehicles, or persons in distress; (II) by any governmental,

law enforcement, civil defense, private

land mobile, or public safety communications system, including police and fire,

readily accessible to the general public;

(III) by a station operating on an authorized frequency within the bands allocated

to the amateur, citizens band, or general

mobile radio services; or (IV) by any marine or aeronautical communications system[.]

18 U.S.C. §2511(2)(g). Subsection (ii)(IV), which exempts

“any marine or aeronautical communications system”, is
4 Nos. 06-2219 & 06-2221

the one on which defendants rely. During trial defendants’

lawyer asked one of DIRECTV’s witnesses whether it

operated an “aeronautical communications system”;

the witness answered “yes” and in so doing scuttled the

case, defendants maintain.

Like the district court, we doubt that the witness was

thinking about §2511(2)(g)(ii)(IV). No matter. Whether

or not the witness had this statute in mind, the answer

is not dispositive. Judges, not witnesses, are responsible for interpreting statutes. See Bammerlin v. Navistar

International Transportation Corp., 30 F.3d 898, 900–01 (7th

Cir. 1994). Section 2511(2)(g) as a whole deals with

unencrypted communications, broadcast in the clear to

promote public safety or open discourse. The phrase

“aeronautical communications system” is not defined in

§2511 or anywhere else in the United States Code; this is

its sole appearance. Only one appellate opinion uses the

phrase, and following the lead of the Federal Communications Commission—not to mention the dictionary—it

understands this language to mean a system of communications to and from airplanes. See Aeronautical Radio, Inc. v.

FCC, 928 F.2d 428, 434 (D.C. Cir. 1991). Whatever else it

may be, DirecTV is not a system for issuing navigation instructions to aircraft or receiving their distress calls.

DirecTV therefore is not an “aeronautical communications system” under §2511(2)(g)(ii)(IV).

Answering special interrogatories, the jury concluded

that Barczewski had distributed four unauthorized decryption devices and that Wisler had intercepted

DirecTV’s signal for 435 days without authorization. The
Nos. 06-2219 & 06-2221 5

judge used these answers to calculate damages. The

penalty of $44,000 against Barczewski depended on

§605(e)(3)(C)(i)(II): the judge awarded DIRECTV $10,000

for each device, see §605(e)(4), and $1,000 for each (vicarious) interception, see §605(a). Subsection (II) allows the

court to award “for each violation of subsection (a) of this

section . . . a sum of not less than $1,000 or more than

$10,000, as the court considers just, and for each violation

of paragraph (4) of this subsection . . . an aggrieved party

may recover statutory damages in a sum not less than

$10,000, or more than $100,000, as the court considers just.”

DIRECTV requested, and the district judge used, the low

point of these ranges for each of Barczewski’s violations.

Wisler’s penalty of $43,500 ($100 per day of interception) was calculated under 18 U.S.C. §2520(c)(2), which

says that “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.” The judge rejected Wisler’s argument for a lower figure, because Rodgers v. Wood, 910

F.2d 444, 448 (7th Cir. 1990), holds that the highest

penalty calculated under §2520(c)(2) is mandatory.

Rodgers leaves district judges with no discretion to

exercise—as a result the court need not (indeed, must

not) consider defendants’ circumstances, and the jury’s

only role is to specify the inputs to the formula (the

number of days or devices). See BMG Music v. Gonzalez,

430 F.3d 888, 891–93 (7th Cir. 2005).
6 Nos. 06-2219 & 06-2221

Section 2520 was overhauled in 1986, and Rodgers was

the nation’s initial appellate decision on the question

whether the statutory penalties are mandatory or permissive. More recently four other circuits have addressed

the question—and all four have disagreed with Rodgers

and held that §2520(c)(2) allows district judges not to

award damages. See Nalley v. Nalley, 53 F.3d 649, 651–53

(4th Cir. 1995); Dorris v. Absher, 179 F.3d 420, 429–30 (6th

Cir. 1999); Reynolds v. Spears, 93 F.3d 428, 433–35 (8th Cir.

1996); DIRECTV, Inc. v. Brown, 371 F.3d 814, 817–18 (11th

Cir. 2004). Developments that leave this circuit all by

its lonesome may justify reexamination of our precedents,

the better to reflect arguments that may not previously

have been given full weight and to spare the Supreme

Court the need to intervene. See United States v. Corner,

598 F.3d 411 (7th Cir. 2010) (en banc); United States v.

Carlos–Colmenares, 253 F.3d 276 (7th Cir. 2001).

Section 2520(c)(2) says that the judge “may” award

certain damages. “May” is permissive. DIRECTV contends

that the permissive quality of “may” is overridden by

the phrase “the greater of”, but that’s not sound: “the

greater of” tells the judge to compute the ceiling

separately under subsections (A) and (B) and then use

the higher of the two (a process repeated in subsection (B), which offers two ways to set statutory damages).

Telling the judge to work through all of the possibilities

to see which number is highest does not compel the

court to award that maximum. A phrase such as “the

district court may award X or Y” would oblige the judge

to use either X or Y, not some lower or intermediate

number, but §2520(c)(2) does not read this way. It says
Nos. 06-2219 & 06-2221 7

that the judge “may” award damages, then gives a formula. This is the language of discretion, not command.

Rodgers did not see any significance in “the greater of”.

Instead it looked to the language of §2520 before the

1986 amendment. The original language of §2520(c) was:

“Any person whose wire or oral communication is intercepted, disclosed, or used in violation of this chapter

shall (1) have a civil cause of action against any person

who intercepts, discloses, or uses . . . such communications,

and (2) be entitled to recover from any such person—

(a) actual damages but not less than liquidated damages

computed at the rate of $100 a day for each day of violation or $1,000, whichever is higher”. Pub. L. 90–351,

Title III, §802, 82 Stat. 223 (June 19, 1968). The panel in

Rodgers treated the word “shall” as making the maximum award mandatory and then observed that the

legislative history in 1986 did not explain why “shall” had

been changed to “may”. The panel continued: “In the

absence of any such statement, we are hesitant to read a

grant of discretion to the district courts where none had

been permitted in the past.” 910 F.2d at 448.

As our colleagues in other circuits have remarked, this

unwillingness to give effect to a change in statutory

language unless the legislative history contains a reassuring “We really mean it!” is incompatible with decisions of the Supreme Court. See, e.g., Swain v. Pressley,

430 U.S. 372, 378–79 (1977); Harrison v. PPG Industries, Inc.,

446 U.S. 578, 592 (1980) (“it would be a strange canon

of statutory construction that would require Congress to

state in committee reports or elsewhere in its delibera-
8 Nos. 06-2219 & 06-2221

tions that which is obvious on the face of a statute”).

Legislative history comes into play only when necessary

to decode an ambiguous enactment; it is not a sine qua

non for enforcing a straightforward text.

The 1968 version was itself unclear: the placement of

“shall” before the clause creating a private right of action

sounded permissive rather than mandatory—certainly it

does not command all injured parties to sue! Or it may

have meant that the prevailing party “shall” receive

some compensation, while leaving the amount open.

“Shall” sometimes means “may” in legal texts, which is

why good drafters use “must” for mandates. See Gutierrez

de Martinez v. Lamagno, 515 U.S. 417, 432–33 n.9 (1995);

Bryan A. Garner, A Dictionary of Modern Legal Usage 939–42

(2d ed. 1995). The change from “shall” to “may” could

have been designed to make explicit a permissive

meaning that had been there all along. Whether or not

“may” in the 1986 revision was designed as a change,

however, does not matter; all we need to do is acknowledge that “may” is permissive.

Rodgers gave a second reason:

in amending the damages section, Congress recognized that the new penalty structure would be too

severe for some violations of the Act and addressed that concern by creating an exception to

the penalty structure for the interception of

certain private satellite video communications. 18

U.S.C. §2520(c)(1). This exception originated in

concerns expressed by Senators Laxalt, Grassley,

DeConcini and Simpson during subcommittee
Nos. 06-2219 & 06-2221 9

consideration “about the bill’s penalty structure

for the interception of certain satellite transmissions by home viewers,” and it culminated in an

amendment to the bill offered by Senator Grassley.

S. Rep. No. 99–541, 99th Cong. 2d Sess. 6–7, reprinted in 1986 U.S. Code Cong. & Admin. News

3555, 3560–61. The fact that Congress chose to

address concerns about the severity of the new

penalty structure by creating a specific exception for certain actions suggests that Congress

intended to limit the types of violations for

which the penalties could be avoided. This conflicts with and ultimately defeats an inference

that Congress intended to grant district courts

the discretion to decide the cases in which the

more severe penalties should attach.

910 F.3d at 448. Like the four other circuits that have

considered this subject since Rodgers, we find it hard to

infer from graduated awards that the higher maximum

must be a minimum.

To show the context, here is the current version of

§2520(c) in full:

(1) In an action under this section, if the conduct

in violation of this chapter is the private viewing

of a private satellite video communication that is

not scrambled or encrypted or if the communication is a radio communication that is transmitted

on frequencies allocated under subpart D of part 74

of the rules of the Federal Communications Commission that is not scrambled or encrypted and the
10 Nos. 06-2219 & 06-2221

conduct is not for a tortious or illegal purpose or

for purposes of direct or indirect commercial

advantage or private commercial gain, then the

court shall assess damages as follows:

(A) If the person who engaged in that conduct

has not previously been enjoined under section

2511(5) and has not been found liable in a

prior civil action under this section, the court

shall assess the greater of the sum of actual

damages suffered by the plaintiff, or statutory

damages of not less than $50 and not more

than $500.

(B) If, on one prior occasion, the person who

engaged in that conduct has been enjoined

under section 2511(5) or has been found liable

in a civil action under this section, the court

shall assess the greater of the sum of actual

damages suffered by the plaintiff, or statutory

damages of not less than $100 and not

more than $1000.

(2) 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.
Nos. 06-2219 & 06-2221 11

Section 2520(c)(1) deals with signals sent in the clear and

not intercepted for a commercial or illegal purpose;

§2520(c)(2) addresses other situations, such as the interception of DirecTV’s encrypted signals. Subsection (c)(1)

sets lower damages, doubtless because Members of

Congress thought the wrongdoing less serious. To say

that the penalty for the non-commercial interception of

unscrambled signals cannot exceed $1,000 (or actual

loss) does not imply that the penalty for intercepting

scrambled signals must be at least $10,000. The difference

in perceived seriousness is reflected in the different

maximum penalties, not in a mandate to impose the

highest possible penalty.

One more context is worth considering: the relation

between 18 U.S.C. §2520(c) and 47 U.S.C. §605(e). Both

address aspects of signal piracy. Section 605(e)(4) covers

Barczewski (who distributed devices that others could

use to decrypt signals), while Wisler (who watched

pirated programs on his own TV) comes within both

§605(a), (e)(3)(C)(i)(II) and §2520(c)(2). Section 605(e)

affords discretion within ranges (we set out the language

above). Section 2520(c)(2) gives caps rather than ranges.

It is difficult to see why district judges would have discretion when a penalty is determined under §605(e) but

not when it depends on §2520(c). Section 605(e) took its

current form in 1988, two years after the amendment

that gave §2520(c) its current text. Although it is hazardous to assume that one Congress “knows” what

another did, the discretionary ranges established for

§605(e) in 1988 do make more sense if they exemplify

a belief that statutory damages under §2520(c) have a

discretionary component; otherwise there is a jarring
12 Nos. 06-2219 & 06-2221

This opinion has been circulated to all active judges under †

Circuit Rule 40(e). No judge favored a hearing en banc. Circuit

Judge Hamilton did not participate in the consideration or

decision of this appeal.

clash between two statutes covering overlapping subject

matter.

We overrule the portion of Rodgers holding that award

of the maximum damages specified in §2520(c)(2) is

mandatory. We conclude that the district court has †

discretion not to award statutory damages under the

statutory formula.

Having said this, we add a few words about one question

we are not deciding: Whether a judge has discretion to

award damages under §2520(c), but less than the maximum. Some of the four other circuits that have given

“may” its natural reading might have assumed that the

only choice is between $0 and the statutory maximum,

but none actually holds that. Depriving the judge of

discretion to choose an intermediate outcome could

disserve both side’s interests. A judge who thinks that

some damages are appropriate, but that the maximum is

too high for the defendant’s financial or other circumstances, would be driven either to award $0 (sacrificing

deterrence and compensation) or the maximum (which

may impose an unwarranted burden on the defendant’s

family).

The fourth circuit, which read “may” in Nalley to allow

judges to omit damages, recently reversed a district

judge who exercised that discretion in a signal pirate’s
Nos. 06-2219 & 06-2221 13

favor without giving serious consideration to the adverse

effects of letting misconduct go unsanctioned. See

DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 326–28 (4th

Cir. 2008). And the fact that subsection (c)(1), which

deals with less serious violations, requires some penalty

(recall that (c)(1) uses “shall” while (c)(2) uses “may”),

implies that it would often be an abuse of discretion to

give the more serious violators subject to (c)(2) a free pass.

Yet if the need to impose some penalty leaves no alternative to the statutory maximum, we are back to Rodgers

in practical effect, though through a different interpretive route.

Section 605(e), which covers not only persons who

pirate signals for their own use but also persons who

help others steal encrypted signals (a more serious transgression), allows district judges discretion over the

amount of the penalty. Perhaps §2520(c)(2) should be

read the same way by treating “may” as applicable to all

of the ensuing language, so that the greater power to

pretermit any penalty entails the lesser power to pretermit

some of the potential penalty. Or perhaps a district

judge should first make any appropriate award under

§605(e) and turn to §2520(c) only if §605(e) is unavailable

or does not authorize an adequate penalty. By treating

§605(e) and §2520(c) together, a judge may be able to

achieve appropriate damages even if §2520(c) imposes

an all-or-none choice. That is not a question we need

address today. The district court should have the first

crack at determining the appropriate penalty for Wisler’s

conduct.
14 Nos. 06-2219 & 06-2221

Defendants maintain that, because they are persons

of ordinary means, high penalties necessarily are an

abuse of discretion. Yet the statute does not require

judges to set penalties according to wealth, and we held

in BMG Music that serious penalties for the theft of intellectual property are not confined to the wealthy. One

economically sound way to determine a penalty is to

divide the harm done by the probability of apprehension.

See Gary S. Becker, Crime and Punishment: An Economic

Approach, 76 J. Pol. Econ. 169 (1968), a theory of sanctions

that played a role in his receipt of a Nobel Prize in

1992. The approach has been widely used, including

(for example) the construction of tables in the Sentencing Guidelines. See United States v. Turner, 998 F.2d 534

(7th Cir. 1993). Thus if signal theft enables a person to

avoid paying $200 in fees to DirecTV, and only 1 in 50

signal thieves is caught, the appropriate penalty would

be $10,000. If the loss is lower, or the probability of being

caught greater, the appropriate penalty goes down; if the

loss is greater, or the probability of detection lower, the

appropriate penalty goes up. Statutory damages of $100

per day could well be apt, if the probability of detection

is low enough. The wrongdoer’s wealth plays no role

in such an approach.

District judges have discretion to consider other

reasoned approaches too; there is latitude in the word

“may.” The district judge used that latitude to give

Barczewski the lowest available penalty. But judges

need not go easy on hourly wage-earners who decide to

steal TV signals, any more than they need go easy on

people who choose other forms of theft to supplement
Nos. 06-2219 & 06-2221 15

the family budget. People who do not want to pay the

market price for goods or services must refrain from

theft and cannot complain if the price of crime is steep.

Defendants make a number of other arguments, only

one of which requires even brief comment. Contending

that DIRECTV had made a frivolous post-trial motion

for a protective order, defendants asked a magistrate

judge to award sanctions. The magistrate judge declined.

Because this subject was never presented to or passed on

by the district judge, it is not included in the final judgment and cannot be reviewed in this court. Magistrate

judges neither grant nor deny motions such as the

one defendants made; all they can do is recommend a

disposition to the district judge. See Alpern v. Lieb, 38

F.3d 933 (7th Cir. 1994). In the absence of a consent

under 28 U.S.C. §636(c)(1), only the decisions of district

judges are open to review in a court of appeals, and defendants’ failure to follow through with a request to the

district judge means that there is no decision to be reviewed.

The judgment is affirmed except with respect to the

award of statutory damages against Wisler, which is

vacated. His case is remanded for further proceedings

consistent with this opinion.

5-13-10