Directv, Inc., Plaintiff-appellant, v. Marc Robson, Defendant-appellee, 420 F.3d 532 (5th Cir. 2005)

DIRECTV, Inc. ("DTV") appeals the district court's grant of summary judgment on its claims for illegal interception of its satellite transmissions in violation of 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1) (a), and for modification and assembly of pirate access devices in violation of 47 U.S.C. § 605(e) (4). We affirm as to the interception claims and vacate as to the device claims.¹ 

* DTV is a nationwide provider of direct-to-home satellite programming, including movie channels, sports, major cable networks, and local channels. DTV offers products on both a subscription and payper-view basis, and it encrypts—that is, digitally scrambles—its satellite broadcasts to guard against unauthorized access. A typical system consists of a small DTV-compatible satellite dish, a DTV receiver (also known as an "integrated receiver/decoder" or "IRD"), and a DTV access card. The dish connects to the receiver, which in turn connects to the user's television. A DTV access card, when inserted into the receiver, allows the receiver to decrypt the various channels or services that the user has purchased. A DTV access card is a smart card, similar in size and shape to a credit card, and also contains an embedded computer and memory.

Numerous "pirate access devices"²  have been developed to circumvent the necessity of a valid access card, thereby allowing users to illegally decrypt the DTV satellite signal and thus obtain DTV programming without purchasing it. Such piracy can take various forms, including modifying a valid access card or using a device to take the place of a valid access card.

Defendant Marc Robson is a self-employed computer consultant who has, in the past, taken numerous technical education classes related to computers, taught classes on how to use vàrious software packages, and done work for IBM. DTV has presented evidence indicating that Robson possessed an emulator, which is a printed circuit board that is inserted into the receiver in place of an access card. An emulator—used in conjunction with a personal computer, special software, a smart card reader/writer, a DTV access card, and a DTV receiver—allows an individual to intercept DTV's satellite programming without paying for it.³ 

According to DTV, on February 27, 2001, Robson posted a message at an internet website that acts as a clearinghouse of information regarding, among other things, pirate access devices and the pirating of satellite transmissions. The post read: "Just got my mc1489 chip and putting together an emulator. But haven't done anything like this before. When placing the chip into the pcb does the copper side go up or down?" The post was made under the username "dobson"— a username that had been registered utilizing the e-mail address of Robson's wife. Robson denies having an emulator, making the web post or even visiting the website. Robson also denies that emulators are primarily used for pirate activities.

DTV first became aware of Robson following its execution of a writ of seizure at a mail shipping facility used by a device merchant named Card Unlooping. Records seized indicated that Robson purchased a PS2 Plus SU2 Unlooper ("the unlooper"), worth $249.00, on March 5, 2001. According to DTV, the unlooper can be used to alter or restore functionality to DTV access cards that have been disabled by misuse or by an ECM;⁴  it acts as a smart card reader/writer, but with additional capabilities. DTV maintains that the unlooper has no commercially significant purpose other than piracy.

Robson admits to purchasing the unlooper, but claims he did so to program smart cards for security purposes.⁵  Robson invokes his position as a consultant and his desire to anticipate prospective clients' needs to justify his interest in learning smart card technology. He maintains that he threw the unlooper away after being unable to make it work.

Before us are DTV's claims against Robson for violations of the Communications Act of 1934,⁶  as well as for violations of Title III of the Omnibus Crime Control and Safe Streets Act of 1968 (Wiretap Act).⁷  Specifically, DTV alleged illegal interception of DTV's satellite transmission per 47 U.S.C. § 605(a) and 18 U.S.C. § 2511(1) (a), and illegal modification and assembly of pirate access devices in violation of 47 U.S.C. § 605(e) (4).⁸ 

The district court granted summary judgment to Robson on these claims.⁹  As to § 605(a) and § 2511(1) (a), the district court held that " [m]ere possession of unloopers and emulators is insufficient to raise an inference of illicit use of these devices."¹⁰  The district court held that § 605(e) (4) does not apply to "individual users."¹¹  DTV timely appeals.

II

We review a grant of summary judgment de novo, applying the same standard as the district court.¹²  "Summary judgment is proper when the pleadings and evidence demonstrate that no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law."¹³  "An issue is material if its resolution could affect the outcome of the action."¹⁴  A dispute as to a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.¹⁵ 

The district court was obligated to "consider the evidence in the light most favorable"¹⁶  to DTV as the nonmovant, and to "indulge every reasonable inference from the facts" in favor of DTV.¹⁷  If a movant alleges an absence of specific facts necessary for a nonmovant to establish an essential element of its case, then the nonmovant "must respond by setting forth `specific facts showing that there is a genuine issue for trial.'"¹⁸  "After the nonmovant has been given an opportunity to raise a genuine factual issue, if no reasonable juror could find for the nonmovant, summary judgment will be granted."¹⁹ 

III

DTV challenges the district court's grant of summary judgment on its interception claims under § 605(a) and § 2511(1) (a). Robson counters that DTV cannot succeed on these claims because there is insufficient evidence to support a finding that Robson actually intercepted or otherwise unlawfully appropriated DTV's transmissions. We are persuaded that DTV's relatively weak circumstantial evidence fails to forestall summary judgment in this case.

* DTV's interception claims implicate the criminal provisions in § 605(a) and § 2511(1) (a), in conjunction with their respective civil remedies.

Section 605(a) provides, in part, that

no person receiving [or] assisting in receiving ... any interstate or foreign communication by wire or radio shall divulge or publish the ... contents . . ., except [in authorized circumstances.] No person not being authorized by the sender shall intercept any radio communication and divulge or publish the ... contents... of such intercepted communication to any person. No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication ... for his own benefit or for the benefit of another not entitled thereto.²⁰ 

Section 605(e) (3) (A), in turn, provides a civil remedy for " [a]ny person aggrieved by any violation of [§ 605(a)] or [§ 605(e) (4)]."²¹ 

Similarly, § 2511(1) (a) imposes criminal liability upon any person who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication."²²  A civil action is provided in § 2520(a): " [A]ny 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."²³ 

To prevail on its claims for violations of § 605(a) and § 2511(1) (a), DTV must demonstrate that Robson intercepted or otherwise unlawfully appropriated DTV's transmission.²⁴  DTV has not presented any direct evidence that Robson engaged in illegal interception, or that Robson even had the DTV equipment necessary for interception—specifically, a DTV access card, DTV receiver, and DTV satellite dish.

Circumstantial evidence can support a finding that a communication was intercepted, even absent direct evidence.²⁵  In some contexts we have indicated that circumstantial evidence must be relatively strong to successfully avert summary judgment.²⁶  Today we address whether the circumstantial evidence presented is sufficient to allow an inference of actual interception. One court recently noted that to the best of its knowledge,

no court has expressly addressed the sufficiency of circumstantial proof required for DIRECTV to establish actual interception of its satellite signals when a defendant admits that he purchased a device to receive free DIRECTV but denies that he was [able] to use the Pirate Access Device to actually receive or intercept DIRECTV's signal.²⁷ 

Although the defendant here never admitted to illicit intentions in purchasing the pirate access device, we echo this sentiment in the face of a similar paucity of guiding caselaw.

DTV put forth the following circumstantial evidence as bearing upon its interception claims: (1) Robson posted a message on an internet website devoted to piracy indicating that he possessed an emulator and that he needed help in assembling it; (2) roughly six days later Robson purchased an unlooper for $249.00; and (3) both of these devices—emulators and unloopers—are designed for the purpose of pirating DTV's satellite transmission, and neither of these devices can be used for other legitimate, commercial purposes.²⁸ 

This circumstantial evidence of interception is confined largely to demonstrating the purchase and possession of the devices at issue, rather than the use of those devices to intercept DTV's transmissions. Even indulging all reasonable inferences, we are persuaded that the evidence here falls short of the quantum necessary on the key element of interception.

B

Along this line, we note that there is conspicuously no civil action for merely possessing or purchasing a pirate access device. Neither § 605(a) nor § 2511(1) (a) is violated by such conduct.²⁹  By comparison, § 2512(1) (b) does makes it a crime to "intentionally. . . possess [ ] . . . 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 [.]"³⁰  Tellingly, however, the civil cause of action embodied in § 2520 does not cover such possessory violations.³¹  Had Congress wanted to provide a civil action for possessing or purchasing pirate access devices, it could have done so, subject of course to constitutional constraints.³²  The impulse to conclude from the possession or purchase of pirate access devices that the defendant must have used them—why else would he buy them?—is a powerful one. However, the danger lurking therein is in effectively creating a de facto civil action for possession or purchase. Allowing the claims for interception to proceed in the present case would indicate that little more than mere possession or purchase is needed to give rise to civil liability under these statutes.

C

The evidence here is largely confined to the possession and purchase of the pirate access devices themselves, as opposed to the use thereof to actually intercept DTV's signals. DTV has been unable to produce evidence that defendant had the DTV equipment necessary to intercept a signal—specifically, a DTV dish, receiver and access card. This is not to suggest that there always must be direct evidence as to each and every piece of necessary equipment. After all, the components—perhaps with the exception of a dish on the outside of a house—are capable of being kept and used in stealth.³³  However, the additional circumstantial evidence beyond purchase and possession here is slim.

The evidence that Robson was "putting together" the emulator does not get us much further than to conclude that he eventually possessed a functional emulator.³⁴  It is true that the possession of two purported pirate devices (the unlooper and the emulator) strengthens the circumstantial evidence somewhat. From the timeline associated with these two devices, it would perhaps not be unreasonable to infer that the unlooper was acquired to restore functionality to a damaged access card. Even so, at root, the evidence of these two devices—as opposed to one — gets us little closer to actual interception and is still confined largely to possession of pirate access devices.

D

Although caselaw addressing the quantum of evidence necessary to survive summary judgment on interception claims is less than robust at the circuit level,³⁵  our conclusion finds additional support in recent district court cases. On one hand, contrary to our holding today, some district courts have found possession of pirate devices sufficient to give rise to an inference of interception for summary judgment purposes.³⁶  On the other hand, we are persuaded by the many courts that have indicated explicitly or implicitly that some additional evidence beyond mere possession is necessary for the plaintiff to survive summary judgment on an interception claim.³⁷ 

For example, the court in DIRECTV, Inc. v. Barnes, in ultimately denying summary judgment, acknowledged that it is not enough for a plaintiff merely to show that a defendant possessed equipment capable of intercepting a communication in order to show that the defendant actually received or intercepted the plaintiff's communication. Rather, the plaintiff must produce circumstantial evidence sufficient to support the conclusion that there was an actual interception.³⁸ 

In Barnes the court was faced with evidence not only that the defendant purchased and possessed a pirate access device (an unlooper), but that he was a DTV subscriber who possessed all the necessary DTV equipment; admitted that he purchased the device "for the purpose of attempting to obtain free DIRECTV programming and that he actually attempted to use the device"; and had a suspicious subscriber history—a record of "frequent suspending and reactivating of his DIRECTV services [, which] is consistent with unauthorized interception of DIRECTV's satellite signals."³⁹  The present case is devoid of such additional evidence.

In DIRECTV, Inc. v. Morris,,⁴⁰  the court granted summary judgment to a defendant who had purchased a smart card reader/writer and later an unlooper, despite the defendant's having been a DTV subscriber and thus, presumably, possessed of the necessary equipment for interception.⁴¹  The defendant attempted to modify his access card with the smart card reader/writer; apparently "messed up his system"; sought advice from a "pirate" website; and, on that advice, purchased an unlooper to fix the card. Nonetheless, the court granted summary judgment to the defendant on the § 605(a) and § 2511 claims, holding no actual interception could be shown: "There is no evidence that Morris ever intercepted any satellite transmissions. The fact that he had the opportunity is wholly deficient to sustain an award for statutory damages."⁴² 

Whether or not the cases cited above strike precisely the correct pose in assessing the necessary quantum of evidence in addition to purchase and possession, we are persuaded that the present case falls short. Where, as here, the evidence demonstrates little more than mere purchase and possession of the two pirate access devices—particularly where there is no evidence as to other DTV components required for interception—such evidence is insufficient to withstand summary judgment on DTV's claims of actual interception.

IV

DTV also argues that summary judgment should not have been granted as to its claims under § 605(e) (4), per the corresponding civil action provided for in § 605(e) (3) (A), for assembly or modification of a pirate access device. We agree.

* Section 605(e) (4) reads:

Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or direct-to-home satellite services, or is intended for any other activity prohibited by [§ 605(a)], shall be [criminally liable].⁴³ 

In its brief on appeal, DTV describes its claim for violation of this provision as follows:

DIRECTV alleges that Robson violated 47 U.S.C. § 605(e) (4) by assembling a device called an "emulator" which, when used in conjunction with a computer and certain software, will allow an individual to decrypt DIRECTV's satellite transmissions and receive DIRECTV programming without paying for it. DIRECTV also alleges that Robson violated 47 U.S.C. § 605(e) (4) by using a different device called an "unlooper" to modify a DIRECTV access card to enable it to illegally decrypt DIRECTV's satellite transmissions.

With respect to this claim, the district court held that Robson's "assembly of the emulator is not actionable under § 605(e) (4)" because " [§] 605(e) (4) is a provision relating to manufacturers and sellers, rather than to individual users as Defendant is alleged to be."⁴⁴ 

B

We are persuaded that the district court erred by categorically removing all "individual users" from the reach of § 605(e) (4). A number of courts have adopted a similar construction, holding that § 605(e) (4) exempts individual users—that is, the provision "targets upstream manufacturers and distributors, not the ultimate consumer of pirating devices."⁴⁵  We reject this view. Nothing on the face of § 605(e) (4) suggests such a limitation. Indeed, it provides that " [a]ny person" who engages in the prohibited activities is liable.⁴⁶  Section 605(e) (4), in its disjunctive list of prohibited activities, clearly covers the modification or assembly of pirate devices as separate and self-contained offenses by whoever commits them. While such activities are, no doubt, commonly within the purview of a "manufacturer" or "seller," there is no indication that the statute is intended to condone it when the actor is instead an "individual user." Lending weight to our interpretation, we have previously noted in a different context that "it is clear that [§ 605(e) (4)] pertains to commercial as well as individual users."⁴⁷ 

While the statute is clear on its face, it bears mention that prior to 1988 the provision read:

The importation, manufacture, sale, or distribution of equipment by any person with the intent of its use to assist in any activity prohibited by subsection (a) shall be subject to penalties and remedies under this subsection to the same extent and in the same manner as a person who has engaged in such prohibited activity.⁴⁸ 

Among other changes, the 1988 amendments to this section introduced three new terms: "assembles," "modifies," and "exports."⁴⁹  The district court's reading effectively nullifies these additions and, indeed, all of the terms listed in § 605(e) (4) other than "manufactures" and "sells."

The district court's reliance on a footnote from the Second Circuit's decision in Community Television Systems, Inc. v. Caruso is misplaced.⁵⁰  Caruso is focused on determining how to assess the number of § 605(a) violations and only mentions § 605(e) (4) in passing as an example of a provision that bases the number of violations on the number of devices.⁵¹  Caruso notes that § 605(e) (4) is "the provision relating to manufacturers and sellers, rather than users, of cable descramblers, which states that `each such device shall be deemed a separate violation.'"⁵²  At best, this comment is dictum. In any case, it appears that the Second Circuit is speaking in broad strokes in this footnote and a sensible reading of the court's comment is simply that § 605(e) (4) does not apply to mere users—i.e. tautologically anyone who does not perform one of the activities mentioned: manufacturing, assembly, modification, etc. There is no indication in the context of Caruso that the court intended by its remarks to limit the clear reach of § 605(e) (4) or to introduce a distinction not found in the statute.

In short, we hold that § 605(e) (4) prohibits each of the activities listed therein, and provides no exception for "individual users."

C

Robson did not defend the district court's ruling with regard to "individual users." Instead, Robson asserts on appeal that, in order to demonstrate that DTV is a "person aggrieved" who can bring a device claim for violation of § 605(e) (4), DTV "must demonstrate actual interception." Robson argues that " [a]ctual interception of DIRECTV's programming is required in order for DIRECTV to be a `person aggrieved' under 47 U.S.C. § 605(d) (6) as is required to recover damages."⁵³  While it is not clear that Robson raised this argument below,⁵⁴  even assuming that such an argument is properly before us,⁵⁵  it is equally unavailing.

Plainly, nothing on the face of § 605(e) (4) indicates that interception is a required element for a violation. Further, no interception is required for DTV to qualify as a "person aggrieved" under the terms of § 605(e) (3) (A).⁵⁶  Robson's argument to the contrary essentially amounts to an assertion that § 605(d) (6) is an exhaustive list of those who fit within the scope of "any person aggrieved." We rejected such a contention today in a related case and need not retrace the same path here.⁵⁷ 

Having rejected both the district court's stated reasons for granting summary judgment on DTV's § 605(e) (4) claim and Robson's proffered alternate grounds, we decline to go further. That is, we offer no opinion at this time on whether Robson's alleged actions in inserting a chip into an emulator qualify as "assembl [y]"⁵⁸  or whether the alleged use of an unlooper to alter a DTV access card qualifies as "modifi [cation]"⁵⁹  within the meaning of § 605(e) (4). We leave that to the district court to consider again in the first instance.

V

To summarize, the inferences from the facts in this case cannot stretch to "interception," per § 605(a) and § 2511(1) (a); summary judgment on these claims in favor of Robson was proper. However, the district court erred in categorically excluding "individual users" from claims under § 605(e) (4); summary judgment on this claim is vacated, affording the district court the opportunity to consider in the first instance whether the evidence is sufficient to demonstrate assembly or modification within the meaning of § 605(e) (4).⁶⁰ 

AFFIRMED IN PART, VACATED IN PART, and REMANDED; SANCTIONS DENIED.