In the

United States Court of Appeals

For the Seventh Circuit ____________

Nos. 01-2230, 01-2360, 01-3600

CSC HOLDINGS, INC.,

Plaintiff-Appellee,

v.

FRANK P. REDISI, SR.,

and FRANK P. REDISI, JR.,

Defendants-Appellants.

____________

Appeals from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 99 C 3516—Ruben Castillo, Judge.

____________

ARGUED FEBRUARY 11, 2002—DECIDED OCTOBER 29, 2002

____________

Before RIPPLE, DIANE P. WOOD, and WILLIAMS, Circuit

Judges.

DIANE P. WOOD, Circuit Judge. For over a decade,

Frank Redisi, Sr. and his son, Frank Redisi, Jr., operated a

variety of business entities in the Chicago suburbs that

manufactured cable television decoders, which allow one

to view all of a cable provider’s scrambled premium or payper-view programming free of charge. From 1992 to 1999,

the Redisis sold thousands of decoders to customers of

the plaintiff CSC Holdings, Inc., which refers to itself as

Cablevision here. In May 1999, Cablevision brought suit

for violations of the Cable Communications Policy Act of

1984, 47 U.S.C. § 553, and secured a temporary restraining
2 Nos. 01-2230, 01-2360, 01-3600

order and asset freeze against the Redisis and their businesses. The district court found against the Redisis on

summary judgment and after a damages trial awarded

Cablevision over $29 million. On appeal, the Redisis assert a statute of limitations defense and also contest numerous discovery rulings and the district court’s damages determination. We reverse and remand for further

proceedings.

I

The Redisis began selling their illegal wares sometime

before 1990, initially operating under the name of Teleview Distributors, Inc. By January 1991, FBI agents were

investigating the Redisis’ activities and meeting with

leaders of the cable television industry, including Robert

Astarita, Cablevision’s Senior Vice-President of Corporate

Security, to discuss the problem of cable theft. At one

point in 1991, Astarita sent Teleview Distributors a letter

indicating that he had evidence that some of the products

Teleview Distributors was selling might be capable of

descrambling Cablevision’s signal and that, if so, it

should cease and desist immediately. The Redisis failed

to respond to the letter.

On November 4, 1992, the FBI served a search warrant

on Teleview Distributors, obtaining substantial evidence of

wrongdoing and shutting down the business. As a direct

result, Redisi, Jr. pleaded guilty to one count of violating

47 U.S.C. § 553. The FBI kept Astarita apprised of its

progress in fighting cable theft through at least 1995; in

particular, it gave him updates on the investigation and

the criminal charging of Redisi, Jr.

Cablevision claims that after November 1992, it believed that the Redisis had turned from their life of crime,

but this proved not to be the case. They very quickly resumed operations and later incorporated as Omega Hold-
Nos. 01-2230, 01-2360, 01-3600 3

ings (owned by the Redisis) and Omega of Elgin (owned by

Redisi, Sr.) and shared facilities, equipment, and inventory

with various other companies selling decoders (owned by

defendants who have settled out of the case). Between

November 1992 and May 1999, the Redisis through various

corporate identities and affiliates sold 2,756 decoders to

probable Cablevision customers.

Cablevision began a serious investigation of the Redisis

in March 1998, in the course of which it made six undercover purchases of decoders that descrambled all of its

programming over the course of the next year. On May 26,

1999, Cablevision filed a motion for a temporary restraining order and asset freeze and sought monetary and

injunctive relief. The district court enjoined the Redisis

from selling any decoders, froze the Redisis’ personal and

corporate assets, and directed the U.S. Marshal to seize

business records and computers.

When the Redisis appeared in court, they moved unsuccessfully to have the action dismissed. The district court

instead granted a preliminary injunction on June 24

and set a briefing schedule under which discovery was

to close on September 10. The defendants served written

discovery requests on the plaintiffs in July but did not

notice any depositions at that time. Cablevision moved

for summary judgment on July 29.

On Friday, August 27, the Redisis’ attorney noticed

depositions for five Cablevision employees to be conducted on the first three days of September. Astarita was

scheduled to be deposed on the morning of September 2,

six days after the notice was sent. Cablevision informed

the Redisis that it would produce four of the employees

but would not produce Astarita, representing that he had

no knowledge of events relating to the case that could

not be gained from the other four witnesses. The district

court then denied the Redisis’ motion to compel Astarita’s
4 Nos. 01-2230, 01-2360, 01-3600

deposition, finding that the Redisis had produced no evidence of relevance and that the expedited discovery request would be unduly burdensome to Astarita.

On Friday, September 3, one week before the close of discovery, the Redisis again noticed a deposition for Astarita.

Cablevision refused to comply with this notice, and the

Redisis then sought reconsideration of their original motion to compel. They produced affidavits from FBI agents

indicating that Astarita, and thus Cablevision, knew of

the Redisis’ actions as early as 1991 and had engaged in

extensive discussions with the FBI between 1993 and

1995. They further represented that this fact was important to their statute of limitations defense. The district

court denied this motion as well on the ground that the

deposition was “not relevant.” In December 1999, it granted

Cablevision’s motion for summary judgment as to liability in its entirety, rejecting the Redisis’ statute of limitations defense.

Damages discovery led to a repeat of many of the disputes from the liability phase. After deposing Joseph

Flaim, Cablevision’s principal damages witness, the Redisis

moved to bar Flaim’s damages analysis (on the ground

that it was based on undisclosed materials) and requested

an extension of discovery. The district court denied both

motions but did order Cablevision to provide the Redisis

with a summary of its damages calculations and supporting materials other than its customer lists. Flaim testified as to his damages analysis at trial, which the district court in large part accepted. The court then awarded

Cablevision almost $29.8 million in damages, plus $300,000

in costs and attorneys’ fees.

II

The parties agree that the relevant statute of limitations is found at 47 U.S.C. § 415(a), which provides, “All
Nos. 01-2230, 01-2360, 01-3600 5

actions at law by carriers for recovery of their lawful

charges, or any part thereof, shall be begun, within two

years from the time the cause of action accrues, and not

after.” The Redisis do not seriously dispute that they

have violated the law, but they argue that the statute of

limitations bars Cablevision’s suit because Cablevision

knew of its injuries more than two years before it filed

suit in May 1999.

In the first place, it should be noted that the Redisis

made a number of decoder sales to Cablevision customers

during the two years preceding the commencement of this

action. Under any theory of the case, Cablevision filed a

timely claim as to those sales, as the Redisis’ counsel

conceded at oral argument. But at least on the face of

the statute, Cablevision’s claims as to 90% or so of the

decoders sold would be barred if the Redisis’ statute of

limitations argument is correct. Cablevision offers two

reasons why it should still be permitted to prosecute its

claim in its entirety: (1) the Redisis’ actions amounted to

a continuing violation; and (2) the statute of limitations

was tolled because Cablevision did not know or have reason to know of the Redisis’ violations.

“[T]he statute of limitations does not begin to run on a

continuing wrong till the wrong is over and done with. . . .”

Taylor v. Meirick, 712 F.2d 1112, 1118 (7th Cir. 1983). This

is a general legal principle, just as applicable to Title VII

and Section 1983 cases as it is to copyright violations

or business torts. Heard v. Sheahan, 253 F.3d 316, 319-20

(7th Cir. 2001). A continuing violation exists “where it

would be unreasonable to require or even permit [a plaintiff] to sue separately over every incident of the defendant’s unlawful conduct.” Id. at 319.

The Supreme Court recently clarified the nature of continuing violations in National R.R. Passenger Corp. v.

Morgan, 122 S. Ct. 2061 (2002). In Morgan, the Court ruled
6 Nos. 01-2230, 01-2360, 01-3600

that a Title VII plaintiff could not recover for “discrete

discriminatory acts” that occurred outside the relevant

EEOC filing deadlines but could recover for such actions

on a hostile work environment theory. Id. at 2071-73. We

too have noted the contrast between a continuing wrong,

such as deliberate indifference to a prisoner’s medical

treatment, and discrete acts, such as consistently underpaying an employee because of her sex. Heard, 253 F.3d

at 320.

The wrong alleged here is the Redisis’ “distribution of

equipment intended . . . for unauthorized reception of any

communications service offered over a cable system. . . .” 47

U.S.C. § 553(a)(2). While Cablevision contends that the

Redisis’ action was continuing because of their continued

sales made over a seven-year span, this belies the actual

nature of the claim. The Redisis sold over 2,700 decoders.

Each of those sales was a separate and discrete statutory violation for which Cablevision could recover. The

mere fact that the Redisis made a regular habit of violating the statute is not enough to convert multiple individual violations into one long continuing wrong. For criminal penalties, the statute expressly declares that the

distribution of each individual device “shall be deemed

a separate violation.” 47 U.S.C. § 553(b)(3). Because each

of the Redisis’ decoder sales is a separate violation, the

continuing violation doctrine has no application here.

Statutes of limitations are of course subject to equitable doctrines such as tolling, and the modern tendency is

to toll until the plaintiff knew or by reasonable diligence

should have known of both the injury and its governing

cause. Fries v. Chicago & Northwestern Transp. Co., 909

F.2d 1092, 1095 (7th Cir. 1990). An abstract fear of wrongdoing is not enough. Sokol Crystal Prods., Inc. v. DSC Communications Corp., 15 F.3d 1427, 1430 (7th Cir. 1994).

Nonetheless, the statute begins to run once a plaintiff

has knowledge which would lead a reasonable person to
Nos. 01-2230, 01-2360, 01-3600 7

investigate the possibility that her legal rights had been

infringed. LaSalle v. Medco Research, Inc., 54 F.3d 443, 446

(7th Cir. 1995). The Redisis argued below that Cablevision knew or should have known of their actions as early

as 1991 and certainly no later than 1995, but the district

court rejected this position, instead finding that nothing

in the record would have put Cablevision on notice of

the defendants’ actions until it began its investigation in

1998.

The Redisis point to a variety of information that

Cablevision had at its disposal prior to 1995, including

advertisements of their illegal wares placed in national

magazines, cease and desist letters sent to them by

Cablevision’s own Senior Vice-President Astarita, and

affidavits from FBI agents and another cable television

executive indicating that the FBI communicated several

times with Astarita about its “Operation Cable Trap”

investigation of decoder sellers including the Redisis. At

one such meeting in 1995, the agents specifically noted

that Redisi, Jr. and Teleview were advertising nationwide sales of decoders.

The briefs of both parties make abundantly clear that

the key issues in this case are how much Astarita knew

about the Redisis’ activities and when he knew it. When did

Astarita first see the Redisis’ advertisements? What did

Astarita learn from the FBI meetings? What caused him

to launch his investigation in March 1998?

Despite the critical importance of Astarita to the case,

the district court refused to allow the Redisis to depose

Astarita, finding that his testimony would not be relevant to any issue in the case. A party has a general right

to compel any person to appear at a deposition, through

issuance of a subpoena if necessary. FED. R. CIV. P. 30(a).

A district court may quash or modify a subpoena if it

fails to allow a reasonable time for compliance or subjects
8 Nos. 01-2230, 01-2360, 01-3600

the deponent to an undue burden. FED. R. CIV. P.

45(c)(3)(A). When a district court considers a motion to

compel, it must evaluate such factors as timeliness, good

cause, utility, and materiality. Farmer v. Brennan, 81 F.3d

1444, 1449 (7th Cir. 1996). We will overturn a decision

limiting discovery only if: “(1) the record contains no

evidence upon which the court could have rationally based

its decision; (2) the decision is based on an erroneous

conclusion of law; (3) the decision is based on clearly erroneous factual findings; or (4) the decision clearly appears arbitrary.” Stagman v. Ryan, 176 F.3d 986, 993-94

(7th Cir. 1999) (citing Gile v. United Airlines, Inc., 95 F.3d

492, 495 (7th Cir. 1996)).

The sole ground the district court offered for its denial of

the Redisis’ motion to depose Astarita was that his testimony would not be relevant. It is true that a district

court may deny motions to compel depositions that would

not aid in “the exploration of a material issue.” Israel

Travel Advisory Serv., Inc. v. Israel Identity Tours, Inc.,

61 F.3d 1250, 1254 (7th Cir. 1995). In this case, however, it

is plain that Astarita’s deposition would have assisted

in exploring the material issue of whether the Redisis

had a valid statute of limitations defense to the bulk

of Cablevision’s claim. The district court’s determination

that the motion to compel was “not relevant” was based,

as far as the record shows, only on Cablevision’s bare

representation that Astarita knew nothing about the

case and that four other deposed Cablevision employees

knew as much as he did. This is not enough to establish

an undue burden under Rule 45 or to show some other

exceptional circumstance that would justify prohibiting

the deposition altogether. See Kaier v. Mutual Life Ins.

Co., 161 F.R.D. 378, 380 (S.D. Ind. 1994). In any event, the

record proves that Astarita’s deposition was highly relevant. The Redisis presented in their motions evidence

that none of the individuals Cablevision produced had
Nos. 01-2230, 01-2360, 01-3600 9

been with the company for more than 14 months, while

Astarita had worked there for close to a decade. As director

of corporate security with responsibility for cable theft

investigations, he alone could provide the answer to the

relevant question of whether Cablevision had knowledge

sufficient to trigger a duty to investigate more than 24

months before it brought suit. Although discovery rulings are subject to the usual harmless error analysis, see

FED. R. CIV. P. 61, we cannot find this ruling to be harmless. To the contrary, it went to the heart of the Redisis’

defense. Therefore, we must reverse the judgment of the

district court and remand with instructions to grant the

motion to compel Astarita’s deposition.

The Redisis ask us to go further and hold that on the

record before us it was objectively unreasonable for

Cablevision not to have investigated their activities

sooner than it did. We decline to take this step. After

reviewing Astarita’s deposition and any other additional

facts the parties can adduce on remand, the district

court will be in the best position to determine whether

Astarita or anyone else at Cablevision reasonably should

have investigated sooner or whether the information at

his disposal was so limited as to toll the statute of limitations.

III

Even in a best-case scenario for the Redisis, we agree

with the district court that they are liable for sales within the two-year period of limitations. That means at a

minimum that they must account for their post-May

1997 sales of illegal decoders. We therefore find it appropriate to address some of the damages issues the Redisis

have raised on this appeal, since some money will be due

no matter what. The Redisis bring two distinct challenges
10 Nos. 01-2230, 01-2360, 01-3600

to the district court’s calculation of damages totaling

over $29 million. First, they argue that there was no basis

in evidence for the damages award. Second, they allege

that the district court wrongfully denied them the discovery they needed to present their case properly.

Cablevision had the option of recovering either statutory

damages or “the actual damages suffered . . . as a result

of the violation and any profits of the violator that are

attributable to the violation which are not taken into

account in computing the actual damages. . . .” 47 U.S.C.

§ 553(c)(3)(A)(i). Cablevision selected the latter option

and computed its damages by making a number of assumptions. First, its damages expert, Flaim, compared

Cablevision’s subscription list with the names in the

Redisis’ “Gross Purchases” database accessed from its

seized computers (the Redisis having destroyed all paper

records) to create a list of 2,756 customers. He then assumed a useful life of seven years for each decoder and also

assumed that each customer purchased only Cablevision’s

most basic cable services but had access to Cablevision’s

entire “Optimum Gold” package (including channels like

HBO, Cinemax, and The Movie Channel). In 1999, the

difference between these services was $40.25 per month.

Flaim also theorized that the average cable thief viewed

15 pay-per-view cable programs per month at a total

estimated cost of $114.50. This led to a total loss of

$154.75 per month or $1,857 per decoder per year of service and a total loss of $29,767,710. Flaim’s analysis was

accepted in its entirety by the district court.

Damages based on lost revenues are by their very nature incapable of mathematical precision. Thus we will

uphold a district court’s damages determination under

the clear error standard as long as the award was based

on reasonable estimates. Bob Willow Motors, Inc. v. General Motors Corp., 872 F.2d 788, 798-99 (7th Cir. 1989). The

real question, however, is how one should determine a
Nos. 01-2230, 01-2360, 01-3600 11

cable company’s “actual damages.” Cablevision seems to

believe that its damages are equivalent to the cost it

would have charged a cable thief for the services she

obtained through the use of the Redisis’ decoders. Thus, if

a viewer spent a few seconds scanning through twenty

or so pay-per-view movies with his remote control, and

each movie costs $5, Cablevision would assess its damages at $100.

We have difficulty with this method of calculation. Few

rational viewers would pay $100 for the privilege of viewing a few seconds of twenty different movies; the action

is only taken because through use of the decoder the service becomes free. Another way of stating this fact is that

absent the decoder, a viewer would not use the same cost

of services. And the marginal costs of providing “Optimum Gold” or a pay-per-view movie to one additional

subscriber are surely minimal. Thus, the “actual damages”

suffered by Cablevision, i.e., the value of what has been

taken from it, is the amount it would have received for

the services that its viewers would have demanded absent the decoders, less the cost of providing those services (which may or may not be negligible). One could even

assume that viewers willing to accept the risk of discovery and prosecution for cable theft are users who consume large amounts of cable services and would watch

more pay-per-view features than the average cable customer. Even so, however, there must be some evidentiary

basis for determining what that figure would be.

In this case, however, Flaim made no effort to tie his

damages calculation to any actual viewer habits. As best

we can determine, his finding that the average cable

thief would watch “ten low-priced movies and five higherpriced events such as concerts, boxing matches and wrestling events” is based on nothing more than guesswork

and Flaim’s own viewing habits. While we have no problem with the basic premise that uncertainties as to dam-
12 Nos. 01-2230, 01-2360, 01-3600

ages should be resolved against the wrongdoer, BE&K

Constr. Co. v. Will & Grundy Counties Building Trades

Council, 156 F.3d 756, 770 (7th Cir. 1998), this does not

give an injured party carte blanche to provide wild guesses

at its damages. A reasonable estimate as to pay-per-view

usage must be grounded in some record evidence, not

numbers pulled from thin air. MindGames, Inc. v. Western

Publ’g Co., 218 F.3d 652, 658 (7th Cir. 2000) (“Damages

must be proved, not just dreamed. . . .”). Indeed, the very

calculations Flaim made were rejected as “rank speculation” in a similar case in another court. CSC Holdings, Inc.

v. New Info. Tech., Inc., 148 F. Supp. 2d 755, 759 (N.D.

Tex. 2001). On remand, Cablevision must tie its estimates

to real-world figures of customer usage if it wishes any

such damages award to be upheld.

One other problem with Cablevision’s damages calculation is also evident on the record before us. Flaim set

damages for illegal access to “Optimum Gold” based only

on Cablevision’s 1999 cable rates, even though much of

the damages stemmed from asserted violations in other

years. Surely Cablevision must have access to its own

rates in earlier years. These rates must provide the basis

for calculations of damages for the years in question. One

cannot rely on estimates when the actual data is readily

available.

The Redisis also allege that the district court erred in

denying them discovery of certain records. Most notably,

the district court denied the defendants access to Cablevision’s subscriber lists on the ground that they were

“cable pirates.” This unqualified ruling went too far.

“Parties may obtain discovery regarding any matter, not

privileged, that is relevant to the claim or defense of any

party.” FED. R. CIV. P. 26(b)(1). As the Redisis point out,

these subscriber lists were relevant to their efforts to

present an alternative and lower calculation of damages

than the $29 million figure submitted by Cablevision. Flaim
Nos. 01-2230, 01-2360, 01-3600 13

accidentally may have included customers who subscribed not to Cablevision but to a competing service

provider. Beyond this, some of the customers may have

purchased “Optimum Gold” or pay-per-view movies even

when they did own a decoder, and, if so, their damages

for those sales should be reduced. But the Redisis had

no way of raising these points or challenging Flaim’s

figures without access to the same customer databases

that Flaim had. There is no privilege or restriction on

releasing customer records to a non-governmental entity

pursuant to a court order. 47 U.S.C. § 551(c)(2)(B). Therefore, the district court should have granted the Redisis

some form of access to the subscription lists.

The district court appears to have feared that turning

over customer databases to “cable thieves” would allow the

Redisis to return again to their illegal ways. This concern may have been realistic, but there are mechanisms

short of an outright denial of discovery to deal with it. The

court could have crafted a protective order under FED. R.

CIV. P. 26(c). In such an order, the court could have permitted Cablevision to redact unnecessary information

from the records, required that all review be conducted in

camera, or permitted only the Redisis’ attorneys to be

present to view the documents. Each of these solutions

would have made it possible for the Redisis to mount a

defense; the outright denial of access to customer lists

did not.

We encourage the district court to explore these and

other options in crafting a solution that will enable both

parties to provide reasoned estimates of Cablevision’s

damages. Since we are already reversing the judgment

for further proceedings on the statute of limitations issue,

we need not address each of the parties’ other damages

discovery disputes point-by-point. Instead, we are confident that such discretionary decisions can be better resolved by the district court in the first instance.
14 Nos. 01-2230, 01-2360, 01-3600

IV

As a final matter, the Redisis contend that the district

court’s order freezing their business and personal assets

was unlawful under Grupo Mexicano de Desarrollo, S.A.

v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999). That

decision held that a district court may not issue an injunction freezing assets in an action for money damages where no equitable interest is claimed. Id. at 333.

However, the court specifically noted that a restraint

on assets was still proper if a suit sought equitable relief. Id.; see also Deckert v. Independence Shares Corp., 311

U.S. 282, 288 (1940). Here Cablevision had the option of

seeking either statutory damages, actual damages, or an

accounting and profits remedy. 47 U.S.C. § 553(c)(3)(a)(1).

This last remedy, sought by Cablevision in the alternative in its initial complaint, is equitable in nature and

imposes a constructive trust on the defendant. An asset

freeze is thus proper to stop cable piracy that violates

the Communications Act. TKR Cable Co. v. Cable City

Corp., 267 F.3d 196, 208 n.4 (3d Cir. 2001). Since the assets in question here were profits the Redisis made by

unlawfully stealing Cablevision’s services, the freeze

was appropriate and may remain in place pending final

disposition of the case.

V

The judgment of the district court is REVERSED and

the case is REMANDED for further proceedings consistent

with this opinion. Circuit Rule 36 shall apply on remand.
Nos. 01-2230, 01-2360, 01-3600 15

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—10-29-02