Opinion ID: 77316
Heading Depth: 3
Heading Rank: 1

Heading: Requirements for Pattern or Practice Liability

Text: According to the Act: 52 If a satellite carrier engages in a willful or repeated pattern or practice of delivering a primary transmission made by a network station ... to subscribers who are not eligible to receive the transmission..., then ... if the pattern or practice has been carried out on a substantially nationwide basis, the court shall order a permanent injunction barring the secondary transmission by the satellite carrier, for private home viewing, of the primary transmissions of any primary network station affiliated with the same network .... 53 17 U.S.C. § 119(a)(7)(B)(i). The Act itself provides no further explanation as to what constitutes a pattern or practice, except to indicate that it can occur on a nationwide, regional, or local scale. See id. at §§ 119(a)(7)(B)(i), (ii). We find some guidance, however, in the legislative history of the Act: 54 It is not the intent of this statute to subject a satellite carrier to pattern or practice liability as a result of good faith mistakes, provided that the carrier is reasonably diligent in avoiding and correcting violations through an internal compliance program that includes methods of confirmation of household eligibility.... 55 In view of the possibilities for error which would occur despite reasonably diligent efforts to avoid them . . ., it is the intent of this statute that no pattern or practice be found if . . . less than 20% of the subscribers to a particular network station (on either local, regional, or national bases) are found ineligible. 56 H.R.Rep. No. 100-887(I), at 19 (1988), reprinted in 1988 U.S.C.C.A.N. 5577, 5622; see also CBS Broad. v. PrimeTime 24 Joint Venture, 48 F.Supp.2d 1342, 1357 (S.D.Fla.1998). Thus, while the statute itself does not automatically impose pattern or practice liability where the 20% threshold is met, nor does it preclude a finding of pattern or practice where the threshold is not reached, we believe the 20% ineligibility proportion to be a relevant marker for pattern or practice analysis. 57 EchoStar would have us forgo even this preliminary inquiry of whether a pattern or practice ever existed because the district court found that no . . . pattern or practice currently exists, CBS Broad. Inc., 276 F.Supp.2d at 1254, and EchoStar reads the Act to impose a requirement of an ongoing pattern or practice before section 119(a)(7)(B)(i) is triggered. It reads the statutory language, [i]f a satellite carrier engages in a willful or repeated pattern or practice, 17 U.S.C. § 119(a)(7)(B) (emphasis added), as foreclosing application of the section so long as a satellite carrier ceases (most of) its illegal activity, presumably anytime before the close of trial. We do not believe this is the best reading of the statute. Rather than imposing an obligation on the networks to identify violations, bring suit, conduct discovery, and complete a full trial, all before the satellite carrier decides to become SHVA compliant—we read the statute as imposing liability [i]f a satellite carrier [ ever ] engages in a willful or repeated pattern or practice of statutory violations. Id. The moment a satellite carrier engages in what can be said to be a pattern or practice of violations, it makes itself eligible for the specified remedy, regardless of when it is found to have been doing so. Cf., e.g., 18 U.S.C. § 1621 (indicating that the crime for perjury occurs where a duly sworn individual states or subscribes any material matter which he does not believe to be true but not requiring a defendant to be stat[ing] or subscrib[ing] at the time of his perjury trial). 58 We also note that there is no requirement that a court find that the satellite carrier engage in a pattern or practice of actually providing distant network service to served households. This is again a function of the statutory burden of proof. While we do not find it particularly intuitive to think of a satellite carrier as engaging in pattern or practice of failing to prove that its subscribers are unserved, we have but little choice. The statute specifically mandates that [i]n any action brought under this paragraph, the satellite carrier has the burden of proof. Id. § 119(a)(7)(D) (emphasis added). A requirement that a satellite carrier actually engaged in a pattern or practice of serving served households is inconsistent with that burden allocation. Accordingly, we presume, for the purpose of evaluating pattern or practice liability, that a finding that a satellite carrier failed to carry its burden of establishing eligibility is tantamount to a finding of ineligibility. Section 119(a)(7)(B) liability is triggered whenever a satellite carrier fails to carry its burden of proving eligibility on a sufficient scale, and to a sufficient degree, such that we can presume that the satellite carrier is engaging in a pattern or practice of serving ineligible subscribers.