Prostar, As Broadcast Licensee of the December 6, 1997, De La Hoya/rivera Program, Plaintiff-appellant, v. James Allen Massachi, Jr., and Toby is Dead, Inc., Defendants-appellees, 239 F.3d 669 (5th Cir. 2001)

This case presents us with the task of determining the appropriate statute of limitations for an action brought under 47 U.S.C. §§ 553 and 605. As these provisions contain no express limitations period, the district court adopted the one-year prescriptive period for delictual actions under Louisiana law.¹  Appellant Prostar argues that the court should have applied the three-year limitations period articulated in the federal Copyright Act.²  Alternatively, Prostar requests the application of either the ten-year limitations period for personal actions under Louisiana law³  or the three-year period applicable to actions under Article 3494 of the Louisiana Civil Code. We find that the limitations period governing actions under the Copyright Act is applicable and now reverse.

* Prostar filed suit against Appellees Massachi and Toby Is Dead, Inc. on April 29, 1999, alleging violations of the Federal Communications Act (FCA).⁴  Prostar, a Texas corporation, had purchased the commercial sales rights to various territories, including Louisiana, for transmission of the December 6, 1997, De La Hoya/Rivera boxing broadcast. Investigation by Prostar allegedly revealed that an establishment known as "Jimani Lounge and Restaurant" had improperly intercepted and exhibited the broadcast on December 6, 1997. Appellees contended that Prostar's suit was time-barred, as it was filed after the one-year limitations period set forth under Article 3492 of the Louisiana Civil Code, which governs delictual actions. The district court granted Appellees' Motion for Judgment on the Pleadings requesting dismissal.

II

Reviewing the district court's decision de novo,⁵  we note that the FCA does not specify a statute of limitations for actions by licensees such as Prostar under 47 U.S.C. §§ 553 and 605⁶  - "a void which is commonplace in federal statutory law."⁷  As a matter of interstitial lawmaking, this Court must adopt the appropriate statute of limitations from either state or federal sources. The Supreme Court has affirmed that state law is the "lender of first resort," and that courts generally are to adopt the closest state-law analogue.⁸  However, in limited circumstances, the Court has countenanced the application of an analogous federal law where application of state law would "frustrate or interfere with the implementation of national policies . . . or be at odds with the purpose or operation of federal substantive law."⁹  Under such circumstances, a court must decide whether "a federal statute of limitations for another cause of action better reflect [s] the balance that Congress would have preferred between the substantive policies underlying the federal claim and the policies of repose."¹⁰  The Supreme Court has emphasized the limited nature of this exception, stating that a federal limitations period should apply only where it "clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking."¹¹ 

Our inquiry therefore entails the following successive levels of analysis. First, courts must "characterize the essence" of the statute in question to determine which state cause of action is most analogous.¹²  Second, courts must determine whether application of the state limitations period would frustrate the policies underlying the federal law or impede its practical implementation.¹³  If a state limitations period would not generate such adverse consequences, then the state limitations period applies and our inquiry is concluded.¹⁴  However, if a conflict is apparent, then courts must examine whether the federal interest in uniformity mandates the application of an analogous federal standard. This third level of analysis requires courts to examine whether federal law affords a closer analogy than state law.¹⁵  We now proceed to examine the relevance of the preceding steps to the instant case.

* First, we must "characterize the essence" of an action under sections 553 and 605 of the FCA.¹⁶  The legislative history associated with section 553 and the amendments to section 605 reveals that one of Congress's principal objectives was to discourage theft of cable services.¹⁷  To that end, Congress articulated a variety of penalties and remedies to "protect the revenue of television cable companies from unauthorized reception of their transmissions."¹⁸ 

Section 553(a) (1) provides that " [n]o person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so."¹⁹  Section 605 similarly states that " [n]o person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto."²⁰  In addition, section 605 prohibits anyone unlawfully receiving such communications from divulging or publishing the information or transmission.²¹  Both sections contemplate civil (and criminal) enforcement measures.²² 

We recognize that courts are divided as to whether and to what extent section 605 even applies to actions by cable companies.²³  In amending the FCA, Congress in 1984 inserted language referring to "satellite cable programming" in section 605(b), which discusses exceptions to the prohibitions articulated in section 605(a).²⁴  However, Congress did not change the language in section 605(a) to expressly include cable transmissions. In contrast, Congress expressly prohibited the unlawful interception of cable communications in section 553(a). We need not resolve this dispute today, as the limitations period articulated in the Copyright Act applies to actions brought under either provision.

Section 553(a) (1) provides an array of civil and criminal remedies for unauthorized interception of cable signals. Section 553(c) (1) provides " [a]ny person aggrieved by any violation of subsection (a) (1)" a private right of action.²⁵  Prevailing parties may obtain injunctive relief, damages, and attorney's fees and costs.²⁶  Moreover, section 553 contemplates the award of either (1) actual damages suffered by the plaintiff, as well as recovery of profits gained by the person violating the Act; or (2) statutory damages of an amount not less than $250 and not more than $10,000, "as the court considers just."²⁷  The statute also gives courts the discretion to increase the actual or statutory damages to up to $50,000 where willful violations are present.²⁸  Conversely, the court may reduce damages to not less than $100 where "the violator was not aware and had no reason to believe that his acts constituted a violation of this section."²⁹ 

Section 605 also articulates criminal and civil penalties for violations of its prohibition against the unauthorized interception and subsequent publication of transmissions. Like section 553, section 605(e) (3) provides aggrieved parties with the right to obtain injunctive relief, damages, and attorney's fees and costs.³⁰  The statute allows for both kinds of actual damages noted above, as well as statutory damages.³¹  However, an aggrieved party can recover slightly higher statutory damages (between $1,000 and $10,000) than under section 553.³²  Finally, courts have the same discretion as under section 553 to raise or lower the damage award according to the intent and knowledge of the violator.³³  Sections 553 and 605 ultimately implicate similar policy objectives and provide similar standards and remedies.

B

In assessing the appropriate state-law analogue to the FCA provisions at issue, we note that the parties have offered three potential candidates from Louisiana law: (1) Article 3492 of the Louisiana Civil Code, which governs delictual actions; (2) Article 3499, outlining the standards applicable to personal actions; and (3) Article 3494, providing for "recovery of compensation." Appellees contend that the one-year limitations period governing delictual actions is the most appropriate analogue. Relying on Joe Hand Promotions, Inc. v. Lott,³⁴  Appellees assert that cable theft is analogous to the tort of conversion, which is prohibited under Article 3492.³⁵  Louisiana law defines conversion as "an act in derogation of the plaintiff's possessory rights, and any wrongful exercise or assumption of authority over another's goods, depriving him of the possession, permanently or for an indefinite time."³⁶  Some district courts have found cable theft to be analogous to conversion, as the defendants in such cases unlawfully "appropriate" the plaintiff's property (i.e., the cable transmission).³⁷  Indeed, Prostar's own complaint described Appellees' conduct as the "interception or tortious conversion" of Prostar's property.³⁸ 

Conversion is a closer analogy to the relevant provisions of the FCA than Louisiana law governing "personal actions." Article 3499 of the Louisiana Civil Code provides a ten-year statute of limitations for personal actions, which are defined as "those that seek to enforce personal rights."³⁹  Personal actions include, inter alia, actions grounded on a lease; actions for the "recovery of future things;" revocatory actions; and actions sounding in quasi-contract.⁴⁰  However, Article 3499 does not apply to tort actions.⁴¹  Prostar can not find refuge in quasi-contract, as quasi-contractual obligation is based on the principles of unjust enrichment.⁴²  Unjust enrichment requires, inter alia, a showing that the plaintiff has no other remedy at law. Where a conversion action is available, as in the instant case, a claim of unjust enrichment is not viable.⁴³ 

The claims contemplated by Article 3494 are also less analogous to the instant action than the tort of conversion. Article 3494 provides a three-year prescriptive period for actions for the "recovery of compensation for services rendered, including payment of salaries, wages, commissions, tuition fees, professional fees, fees and emoluments of public officials, freight, passage, money, lodging, and board."⁴⁴  However, as the Louisiana Supreme Court has observed, Article 3494 "merely provides exceptions to the general rule stated in Article 3499 that a personal action prescribes in ten years."⁴⁵  We have already noted that Prostar's claim is not analogous to a personal action. A fortiori, Prostar's claim does not qualify as an exception to the statute governing personal actions. Perusal of the kinds of actions listed in Article 3494 confirms our conclusion that its provisions are inapposite to the case at bar.

C

Having determined that the tort of conversion provides the closest state-law analogue to Prostar's claim, we must examine whether or not Article 3492 of the Louisiana Civil Code is "at odds with" the FCA's "purpose or operation, or frustrate [s] or interfere [s] with the intent behind it."⁴⁶  Prostar contends, first, that application of a one-year statute of limitations would not provide victims of cable theft with enough time to investigate, uncover, and file claims against violators. Prostar refers to the "ever evolving technological developments which enable signal pirates to 'cloak' their theft or misuse such transmissions." Prostar argues that adoption of the "relatively short" period of one year would actually encourage piracy by making it easier for malefactors to evade detection. While we are sympathetic to the cable industry's concerns in this regard, we are not prepared to say that one year is too short as a matter of law for investigation and detection of violations. Prostar presents no evidence or references to support its assertions that one year is insufficient. Indeed, it concedes that a "plaintiff can readily identify that an establishment exhibited a broadcast without paying the appropriate license fee." Prostar states that the more difficult task is identifying the entity or individuals involved. Again, we can not say that one year is insufficient.⁴⁷ 

Prostar argues that the need for national uniformity in enforcing the FCA requires the application of a single standard. As Prostar observes, the cable industry is a distinctly national (and international) enterprise. In the 1984 House Report accompanying passage of amendments to the FCA, the House committee noted that the issues facing the cable industry were national in scope and underscored the need for a correspondingly national enforcement regime.⁴⁸ 

The posture of the instant case affirms the "multistate nature" of actions brought under the FCA.⁴⁹  Prostar is a Texas corporation suing for alleged signal piracy conducted in a Louisiana establishment. More generally, cable broadcasts are routinely conducted on a national and international scale. Cable piracy consequently differs from many of the cases where courts have applied state-law limitations periods, as these typically involved isolated events, such as a plant closing or "mass layoff" at a single site of employment;⁵⁰  the termination of an employee;⁵¹  or a wrongful arrest.⁵² 

We find that application of Louisiana conversion law to cable piracy claims brought under 47 U.S.C. § 553 and 605 would undermine the implementation of the FCA.⁵³  The application of state conversion law in each of the fifty states would result in widely varying limitations periods.⁵⁴  As Prostar notes, cable companies engage in multistate activities and would consequently be required to "make fifty separate decisions" in their efforts to investigate and pursue cable piracy. A single federal standard would eliminate these practical difficulties, facilitating resolution of the national problems addressed by the FCA.

D

We conclude that the Copyright Act provides the appropriate federal-law analogue to Prostar's FCA claims. Indeed, the Copyright Act provides a "closer fit" than conversion.⁵⁵  The Copyright Act and the FCA both protect proprietary rights in the context of cable transmissions. The Copyright Act prohibits infringement by " [a]nyone who violates any of the exclusive rights of the copyright owner."⁵⁶  Infringement encompasses the unauthorized performance or display of motion pictures and other audiovisual works.⁵⁷  Moreover, the statute explicitly prohibits infringement in the context of secondary transmissions by cable systems.⁵⁸  The unauthorized access and retransmission of cable broadcasting, which the FCA prohibits, does not actually deprive the licensee of its license. Whereas conversion requires the wrongful deprivation of one's possession of property,⁵⁹  the Copyright Act provides for liability when mere copying occurs, rendering it a more appropriate analogue to the FCA.⁶⁰ 

In addition, both statutes have similar remedial structures. For instance, the FCA and the Copyright Act allow for statutory and actual damages.⁶¹  Both acts give the court discretion to increase the statutory damage award for willful violations.⁶²  Finally, both acts also provide for the award of costs and attorney's fees.⁶³  We refuse to interpret Congress's failure to articulate a statute of limitations for 47 U.S.C. §§ 553 and 605 as an inexorable command that courts apply state law. Although courts are frequently justified in assuming that Congress "intend [ed] by its silence that we borrow state law,"⁶⁴  silence may also indicate that Congress did not give "any express consideration to the problem of limitations periods."⁶⁵  Furthermore, Congress's failure to subsequently amend the statute to include a limitations period may only "betoken [] unawareness, preoccupation, or paralysis."⁶⁶  Inertia is endemic to the legislative process, rendering congressional inaction a problematic interpretive guide.⁶⁷  More fundamentally, if this Court were to always find dispositive Congress's failure to include a statute of limitations, we would apply a state statute of limitations in every case. Such an outcome would run counter to the Supreme Court's clear mandate that courts apply federal law in limited circumstances.⁶⁸  Because we find that such circumstances are present in the instant case, we reject the reasoning adopted in Joe Hand Promotions, Inc. v. Lott⁶⁹  and hold that the three-year limitations period articulated in the Copyright Act governs Prostar's FCA claims.⁷⁰  As Prostar's claims were not time-barred, we hereby REVERSE the district court's judgment and REMAND for further proceedings.

REVERSED.