DirecTV, Inc. v. Perez, 279 F. Supp. 2d 962 (N.D. Ill. 2003); Oceanic Cablevision, Inc. v. M.D.
Electronics, 771 F. Supp. 1019 (D. Neb. 1991); DirecTV, Inc. v. Calamanco, No. 02 C 4102,
2003 U.S. Dist. LEXIS 21730 at *8 (N.D. Iowa Jan. 20, 2003); DirecTV, Inc. v. Griffin, 290 F.
Supp. 2d 1340 (M.D. Fla. 2003).'

Other courts, however, have read the plain language of § 2520 as precluding a civil cause
of action under § 2512. See, DirecTV, Inc. v. Maraffino, No. 03 C 3441, 2004 U.S. Dist. LEXIS
799 at *3 (N.D. Ill. Jan. 23, 2004) (asserting that rulings by prior courts that § 2520(a) creates a
civil cause of action for violations of § 2512 are “contrary to the plain language of the statute”);
DirecTV, Inc. v. Cardona, 275 F. Supp. 2d 1357, 1367 (M.D. Fla. 2003) (“To recognize a cause
of action [for violations of § 2512] would be tantamount to denying the language of § 2520(a) its
ordinary meaning.”); see also Westendorf, 2003 U.S. Dist. LEXIS 16236. (finding that § 2520
does not create a cause of action for violations of § 2512); DirecTV, Inc. v. Childers, 274 F.
Supp. 2d 1287 (M.D. Ala. 2003). I have found no guidance for resolving this particular matter
among Seventh Circuit decisions or the decisions of any other circuit for that matter.

The very existence of a split in authority among the districts, and within this district,

countervails assertions that language in the statute plainly describes the nature of the cause of

' DirecTV primarily relies upon Oceanic Cablevision, Inc., and DirecTV, Inc. v. EQ Stuff Inc., 207 F.

Supp. 2d 1077 (C.D. Cal. 2002) to support its assertion that § 2520(a) does provide a cause of action for violations
of § 2512. However, as I read these cases neither Oceanic nor EQ Stuff provides any insight into the question of
whether § 2520(a) creates a private cause of action for violations of § 2512. Maraffino, 2004 U.S. Dist. LEXIS 799.
2 The defendant relies upon Flowers v. Tandy Corp., 773 F.2d 585 (4th Cir. 1985), which addressed the
question of whether a § 2520(a) creates a cause of action against a defendant who has violated § 2512 but not
§ 2511. The court correctly found that if there has been no interception, disclosure or use in violation of § 2511,
then there can be no cause of action against the defendant. See Flowers, 773 F.2d at 589. (“The express language of
§ 2520 is therefore not susceptible to a construction which would provide a cause of action against one who
manufactures or sells a device in violation of § 2512 but does not engage in conduct violative of § 2511.”) Unlike
the plaintiff in Flowers, however, DirecTV has alleged that the defendant intercepted, disclosed or intentionally used
its electronic communications in violation of § 2511. The issue here is whether § 2520(a) creates a cause of action
for violations of § 2512 if the defendant has also committed § 2511 violations.

4



For the foregoing reasons, I GRANT the defendant’s motion to dismiss Count III and
Count V of the complaint.

ENTER:

\ CAs

ames\B. me
United States Distril
DATE: |‘ Opn Coos



While this reading is consistent with a number of cases that have read § 2520(a) simply as
a standing provision, I disagree that this implies the court should or must allow a cause of action
for violations of § 2512. Section 2520(a) provides the court with the discretion to determine
what relief “may be appropriate.” Given the absence of an explicitly defined cause of action, I
find that § 2520(a) implicitly grants courts the discretion to determine what cause of action “may
be appropriate,” since the cause of action necessarily circumscribes the appropriate relief.
Coincidentally, appropriate relief for a plaintiff bringing a cause of action under § 2520(a) is
entirely circumscribed by the activities prohibited in § 2511.

The plaintiff cites to Perez which reasoned that allowing a cause of action for violations
of § 2512 would give potential plaintiffs additional incentives to initiate litigation to protect their
interests, which in turn would reduce the burden on prosecutors to pursue criminal convictions.
297 F. Supp. 2d at 964. While I agree that § 2520(a) may assist law enforcement by providing an
incentive to private entities to police the manufacture and use of these devices, its ostensible
purpose is not to penalize the defendant but rather to provide the plaintiff relief, whether in
compensation for actual damages or in restitution for unjust enrichment in the form of statutory
damages. One need not go so far as to allow a § 2520(a) cause of action for violations of § 2512
in order for the plaintiff to attain relief. Such relief is already provided for in § 2511, invoked in
Count II of DirecTV’s complaint.

Moreover, it cannot be assumed that such a result was desired or intended by Congress
simply because it furthers the primary objectives of the legislation. See Rodriguez v. United

States, 480 U.S. 522, 525-26 (1987) ("[N]o legislation pursues its purposes at all costs. Deciding

under § 2520(a).


action provided for in § 2520(a). In fact, I find that the plain language of the statute fails to
mention what cause of action the plaintiff may bring against the defendant. This is made clear by
analysis of the two clauses in the provision. The first clause provides a standing requirement for
plaintiffs, as several courts have recognized. See, Perez, 279 F. Supp. 2d at 964. (“If the plaintiff
can meet that standing threshold, it can then pursue relief from the appropriate defendant.”) Only
those plaintiffs “whose . .. communication is intercepted, disclosed, or intentionally used in
violation of this chapter may in a civil action recover” under this provision. 18 U.S.C. § 2520(a).
The second clause defines that subset of defendants against whom a plaintiff with standing may
recover, namely, those persons who “engaged in that violation.” See Flowers, 773 F.2d at 587.
(“The statute expressly limits those against whom the private action lies to the person who
‘intercepts, discloses, or uses . . . such communications.’”). Thus, § 2520(a) as a whole is both a
limiting provision with regard to the liability of potential defendants, DirectTV, Inc. v. Moreno,
No. 03 C 2478, 2003 U.S. Dist. LEXIS 22219 at *12 (D.N.J. Dec. 11, 2003) (noting that “some
courts read § 2520(a) as a limiting provision”),’ and a standing provision with regard to
eligibility of plaintiffs. Neither clause, however, defines the civil action under which a plaintiff

with standing may recover against a qualified defendant.

3 Moreno notes that “Congress already lists an exemption from civil liability in § 2520(a), by excluding
those assisting law enforcement pursuant to § 251 1(2)(a)(ii).” 2003 U.S. Dist LEXIS 22219 at *15. The court
reasoned that “[i]f Congress also intended to exempt those who violated . . . § 2512(1)(b) it would have done so.”
Jd. at *15. I respectfully disagree that the exclusion of one provision, which protects activity that would necessarily
give rise to a cause of action, implies inclusion of other provisions which are not implicated in the language of
§ 2520(a). Persons acting in violation with § 2511(2)(a)(ii) necessarily engage in or assist in activities within the
scope of § 2520(a), such as interception of satellite communications. Such is not the case with violators of § 2512,
who may not have committed the criminal offenses of interception, disclosure, or intentional use necessary for
liability under § 2520(a).

* For example, if the second part had provided for plaintiffs with standing to recover “from [a] person or
entity for engaging in that violation,” this would clearly define the cause of action for which relief might be granted

5



and unconditional right to the immediate possession of the property, it has made a demand for
possession, and defendants have wrongfully and without authorization assumed control,
dominion, or ownership over the property. Cirrincione v. Johnson, 703 N.E.2d 67, 70 (Ill. 1998).
The issue before me is whether or not interception and use of satellite communications may be
characterized as unlawful conversion of property under Illinois common law. Research has
tured up no Illinois decisions addressing this particular question.

However, this identical issue was dealt with in Maraffino. 2004 U.S. Dist. LEXIS 799.
After addressing relevant Illinois cases, Judge Lefkow determined that even if “intangible
property may sometimes be the object of conversion under Illinois law,” the plaintiff still must be
“deprived of the ability to benefit from the objects of the alleged conversions because the
defendant ha[s] assumed full control over the objects.” Maraffino, 2004 U.S. Dist. LEXIS 799 at
*4; see Stathis v. Geldermann, Inc., 692 N.E.2d 798 (Ill. App. Ct. 1998) (conversion of a
corporation); Conant v. Karris, 520 N.E.2d 757 (Ill. App. Ct. 1987) (conversion of plaintiff's
confidential information which was in tun used to outbid plaintiff and assume control of real
property). I find this reasoning to be both consonant with Illinois common law and persuasive
and therefore adopt Judge Lefkow’s analysis here. In this case, as in Maraffino, “DirecTV has
not been deprived of the ability to benefit from its satellite signals, nor have the defendants
assumed control, dominion, or ownership over those signals.” 2004 U.S. Dist. LEXIS 799 at

*11.


Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge James B. Zagel Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 03 C 3476 DATE 4/14/2004
CASE DIRECTV vs. TOM FREY
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented. ]

MOTION:

DOCKET ENTRY:

(1) o Filed motion of [ use listing in “Motion” box above.]

2 Oo Brief in support of motion due

(3) Oo Answer brief to motion due___. Reply to answer brief due.

(4) o Ruling/Hearing on set for at

(5) oO Status hearing[held/continued to] [set for/re-set for]on___——s set for_—_at

(6) oO Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor_— at.
(7) Oo Trial[set for/re-set for]on_____at

(8) im [Bench/Jury trial] [Hearing] held/continued to___at

(9) Qo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) =O Local Rule 41.1. CFRCP41(a)(1) C1 FRCP41(a)(2).

qo) of [Other docket entry] Motion (11-1) to dismiss Counts III and V is granted. Counts III and V
of the complaint are dismissed with prejudice. Enter Memorandum Opinion and Order.
di) ff [For further detail see order attached to the original minute order.]
No notices required, advised in open court Document : :
No notices required univer of notices N
Notices mailed by judge's staff APR 2004
Notified counsel by telephone. date docketed
Y | Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

date mailed notice
courtroom

Dw deputy’s
initials

Date/time received in
central Clerk's Office railing deputy initials



what competing values will or will not be sacrificed to the achievement of a particular objective
is the very essence of legislative choice-and it frustrates rather than effectuates legislative intent
simplistically to assume that whatever furthers the statute's primary objective must be the law.")
quoted in DirecTV v. Beecher, 296 F. Supp. 2d 937 (S.D. Ind. 2003). If Congress truly desired
greater incentives for plaintiffs than those provided by a cause of action for violation of § 2511, it
could do so through less subtle means than those suggested above, such as increasing the
statutory damages afforded under the statute.

I find it to be inappropriate for the plaintiff to recover against the defendant for violation
of § 2512. Manufacture, assembly or possession of the device, in violation of § 2512, does not
injure the plaintiff. It is actual use of the device for specific purposes, i.e. interception,
disclosure, or intentional use of the plaintiff's communications, which causes the actual injury.
The only way in which possession of a Pirate Access Device might be viewed as injuring the
plaintiff is in the sense that it promotes and enables interception, disclosure or intentional use of
the plaintiff's communications. If the plaintiff can already recover for the actual use of the
device in violation of § 2511, which it must in order to bring any action under § 2520(a),
allowing the plaintiff to also recover under § 2512 would essentially grant the plaintiff double

recovery for the same injury.

Count V: Conversion of Satellite Programming

Count V alleges that the defendant intentionally and wrongfully converted DirecTV’s

property for his own use and benefit, depriving DirecTV of its proprietary interests. To state a

claim for conversion, DirecTV must allege that it has a right to the property, it has an absolute



Despite the criminal nature of this provision, DirecTV contends that 18 U.S.C. § 2520(a) creates
a private cause of action for violations of § 2512. Section 2520(a) states,

any person whose wire, oral, or electronic communication is intercepted,

disclosed, or intentionally used in violation of this chapter may in a civil action

recover from the person or entity, other than the United States, which engaged in

that violation such relief as may be appropriate.

DirecTV asserts that because § 2520(a) refers to a “violation of this

chapter,” any violation under “this chapter” is grounds for a civil cause of action.

Ireject such an interpretation because it would require me to divorce the phrase

from its proper context. The phrase “in violation of this chapter” necessarily

qualifies how the plaintiff’ s “wire, oral, or electronic communication [must be]

intercepted, disclosed, or intentionally used” in order for the plaintiff to bring an

action under § 2520(a). DirecTV, Inc. v. Westendorf, No. 03 C 50210, 2003 U.S.

Dist. LEXIS 16236, at *1 (N.D. Ill. Sept. 15, 2003). Since violations of § 2512 do

not involve interception, disclosure, or intentional use, § 2520 cannot be

construed as referring to violations of § 2512.

DirecTV also argues, more circumspectly, that § 2520 is merely a standing provision,
which, once satisfied, allows the plaintiff to obtain relief from the defendant for any violation of
18 U.S.C. § 2510-2522. By this reasoning, DirecTV’s allegations that the defendant
“intercepted, disclosed, [or] intentionally used” in violation of § 2511 in Count II qualifies the
plaintiff to bring any cause of action for violations of the statute. This interpretation is more

plausible, and a number of courts have interpreted § 2520(a) to allow for a cause of action for

violations of § 2512 even though the language of § 2520(a) does not expressly provide for it. e.g.,



The defendant now asks me to dismiss Counts III and V of the complaint for “failure to
state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In Count III, DirecTV
seeks damages for possession, manufacture or assembly of an electronic, mechanical or other
device or equipment in violation of the Electronic Communications Privacy Act of 1986, 18
U.S.C. § 2512. In Count V, DirecTV seeks damages for intentional and wrongful conversion of
its satellite programming.

The purpose of a motion to dismiss under Rule 12(b)(6) is to "test the sufficiency of the
complaint.” Triad Assoc., Inc. v. Chicago Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989). In
reviewing a motion to dismiss, I must construe all allegations in the complaint in the light most
favorable to the plaintiff and accept all well-pleaded facts and allegations as true. Bontkowski v.
First Nat'l Bank, 998 F.2d 459, 461 (7th Cir. 1993). A complaint should only be dismissed
when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

Count I: Civil Action Under 18.U.S.C. § 2520 for Acts in Violation of 18 U.S.C. § 2512

DirecTV claims that it is entitled to actual or statutory damages for the defendant’s
manufacture, assembly, or possession of an electronic communication interception device in
violation of 18 U.S.C. § 2512. This provision of the statute penalizes any person who

manufactures, assembles, possesses, or sells any electronic, mechanical, or other
device, knowing or having reason to know that the design of such device renders
it primarily useful for the purpose of the surreptitious interception of wire, oral, or
electronic communications, and that such device or any component thereof has
been or will be sent through the mail or transported in interstate or foreign
commerce...



UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DIRECTV,
Plaintiff,

v. No. 03 C 3476
Judge James B. Zagel

TOM FREY, DOCKETED

Defendant. APR 1 9 2006

MEMORANDUM OPINION AND ORDER

DirecTV, a California-based company, has filed with this court one of numerous civil
actions against individuals for their activities in connection with electronic devices designed to
intercept satellite signals for the purpose of, among other things, obtaining free viewing of
television programming. DirecTV’s primary source of revenue is subscriptions paid for access to
the television programming it distributes throughout the country. To prevent the unauthorized
reception and use of its broadcasts, DirecTV scrambles the signal with encryption technology.
Yet, devices and equipment have been developed (which DirecTV refers to as “Pirate Access
Devices”) to decode DirecTV’s signal and gain unauthorized access to DirecTV’s satellite
programming.

On May 25, 2001, DirecTV executed writs of seizure at the mail shipping facility used by
several major distributors of Pirate Access Devices. DirecTV claims that records obtained
during this raid provide evidence of the defendant’s purchase of Pirate Access Devices. DirecTV
has brought a five-count complaint against the defendant for violation of federal
telecommunication and wiretapping laws and for unlawful conversion of DirecTV’s property

under state common law.

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