DIRECTV, LLC v. Yuen et al

Filing 38

MEMORANDUM Opinion and Order Signed by the Honorable John J. Tharp, Jr on 6/29/2017: For the reasons explained in the attached Memorandum Opinion and Order, Plaintiff's motion for summary judgment 22 is denied. A status hearing is set for 7/11/17 at 9 a.m. Mailed notice(air, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DIRECTV, LLC,
Plaintiff,
v.
WALTER YUEN, et al.
Defendants.

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No. 15-CV-07699
Judge John J. Tharp, Jr.

MEMORANDUM OPINION AND ORDER
Defendants Walter and Mandy Yuen run a Chinese restaurant called Great Wall of China
(“Great Wall”) in Plainfield, Illinois. On November 19, 2013, an auditor employed by Plaintiff
DirecTV entered Great Wall and requested that Mandy turn on a television in the dining room so
he could watch a specific channel. The auditor then took photographs of the television displaying
that channel and sent a report to DirecTV, which then sued the Yuens and Great Wall for
displaying DirecTV programming without authorization. DirecTV has filed a motion for
summary judgment as to liability.1 There is a dispute of material fact as to whether or not the
defendants were authorized to display the programming, so the motion for summary judgment is
denied.

1

DirecTV’s motion makes no mention of the fact that it is only moving for summary
judgment with regard to liability, and only its memorandum in support states that it is moving
only for summary judgment as to the 47 U.S.C. § 605 claim (the complaint includes other claims,
which are not referenced anywhere in the parties’ briefs). In its reply brief, however, DirecTV
clarifies that “[a]t this juncture, DIRECTV is moving for Summary Judgment on liability only.”
Pl.’s Reply at 7. Therefore, the Court takes the motion for summary judgment to be limited to the
question of liability under § 605.

BACKGROUND
On a motion for summary judgment, all fact disputes are resolved in the nonmovant’s
favor and reasonable inferences from the facts must be construed in the light most favorable to
the non-moving party (here, the defendants). Ripberger v. Corizon, Inc., 773 F.3d 871, 876 (7th
Cir. 2014). DirecTV provides satellite television programming to its subscribers. Pl.’s Statement
of Facts (“PSOF”) ¶ 4, ECF No. 23. Walter and Mandy Yuen are the owners and managers of
Plainfield China Garden, Inc., which does business as a Chinese restaurant called Great Wall of
China. Id. at ¶ 5-6. For simplicity, the Court will refer to Walter, Mandy, and Great Wall as “the
Yuens” wherever possible.
The Yuens subscribed to DirecTV’s service through an account in Walter’s name. Id. at
¶ 24. The account address was not the address of Great Wall. Id. At some point, the Yuens
moved a DirecTV receiver into Great Wall. Id. at ¶ 26-27. DirecTV offers both residential and
commercial accounts; the Yuens’ account was classified by DirecTV as residential. PSOF ¶ 24;
Mader Aff. ¶ 6, ECF No. 22-5.
Walter, however, maintains that he did not know his account was classified as
“residential.” Supp. Walter Yuen Aff. ¶ 6-8, ECF No. 37. In fact, when Walter bought the
DirecTV service, he explained to the representative that he would like to watch a Hong Kong
television channel while working in his restaurant. Walter Yuen Aff. ¶ 4, ECF No. 32-1. Walter
asked whether he could bring the DirecTV receiver to the restaurant and the representative said
he could.2 Id. DirecTV disputes this claim, which is central to DirecTV’s cause of action under
2

DirecTV objects to Walter’s testimony about what the DirecTV representative said as
hearsay. See Pl.’s Reply at 8, ECF No. 33. However, Walter’s testimony about what DirecTV’s
representative told him is plainly a non-hearsay statement of a party-opponent. See United States
v. Dish Network, LLC, 75 F. Supp. 3d 942, 966 (C.D. Ill. 2014); Fed. R. Evid. 801(d)(2)(A).
Further, the representative’s alleged authorization is not a statement offered for its truth; rather,
its import lies in the (alleged) fact that it was said.
2

§ 605. In reliance on those statements, Walter purchased the service and brought a receiver to the
restaurant. Id. at ¶ 5. There were two televisions, located in the dining room of the restaurant, in
locations plainly visible to patrons; it is unclear whether both, or just one, was connected to the
DirecTV service. The restaurant did not advertise that it showed DirecTV and the service was
primarily for Walter and Mandy’s personal use. Id.
On November 19, 2013, a DirecTV auditor named Kevin Karlak went to Great Wall.
Mader Aff. ¶ 10. The televisions were off when Karlak entered. Mandy Yuen Aff. ¶ 7.3 Karlak
asked Mandy to turn on a television and change it to channel 212, which she did. Id.; Karlak Aff.
at 1, ECF No. 22-6. When she changed the channel, Karlak observed a DirecTV on screen guide
and channel information bar on the television screen. Karlak Aff. at 2. He took photographs of
television screen with the DirecTV bar on it. See Mader Aff. Ex. C, ECF No. 22-8. Both Walter
and Mandy state they did not know they were doing anything wrong and stopped immediately
when DirecTV notified them that they were not authorized to use DirecTV in the restaurant. Id.
at ¶ 6, Mandy Yuen Aff. ¶ 8, ECF No. 32-2. DirecTV filed this suit against the Yuens on
September 1, 2015, claiming violations of 47 U.S.C. § 605, 18 U.S.C. § 2511, and common law
civil conversion.

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DirecTV appears to dispute this fact, contending that the restaurant “was exhibiting
DIRECTV Satellite Programming for public viewing, specifically NFL Reply [sic; should be
“Replay”] on DIRECTV channel 212,” Defendants’ Resp. to SOF 22, ECF 32. Karlak’s
affidavit, however, states that he asked that the channel be changed to 212; if that was the NFL
Replay channel, as DirecTV now argues, then Karlak’s affidavit is inconsistent with any
argument that the NFL Replay content was being shown in the restaurant when Karlak entered.
Furthermore, the audit video demonstrates that both of the televisions in the restaurant were off
when Karlak entered. See Pl.’s Ex. B. Thus, so far as the record establishes, the only time NFL
Replay was divulged was at Karlak’s request.

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DISCUSSION
A motion for summary judgment may be granted only if “the movant shows that there is
no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). DirecTV bears the burden of proving that there is no dispute of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
DirecTV sued the Yuens under 47 U.S.C. § 605(a). As relevant here, the statute prohibits
a communications recipient (such as a satellite television subscriber) “not being authorized by
the sender” from “divulg[ing]” a communication “for his own benefit or for the benefit of
another not entitled thereto.”4 There is no question that the Yuens did show a DirecTV program
to the auditor at his request, which at least one court has found constitutes a divulgence even if
no other patrons are present. Compare DIRECTV, LLC v. Perugini, 28 F. Supp. 3d 351, 355
(M.D. Pa. 2014) (auditor alone sufficient) with See DirecTV, LLC v. Spina, No.
115CV00104JMSTAB, 2016 WL 4528458, at *19 (S.D. Ind. Aug. 30, 2016), reconsideration
denied, No. 115CV00104JMSTAB, 2017 WL 36296 (S.D. Ind. Jan. 4, 2017) (one patron in
addition to auditor during business hours sufficient). In the video of the audit, other patrons are
present in the restaurant (although so far as the video shows, no one other than the auditor
appears to be viewing the program once it is turned on). See Pl.’s Ex. B (on file with the Court).
The question of authorization, however, presents a material fact dispute. DirecTV argues
that authorization is only relevant to questions of intent and willfulness, not liability, but that is
wrong. If the Yuens were authorized by DirecTV to display transmissions at the restaurant, then

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The statute is more commonly used against those who pirate satellite television without
any sort of account or authorization. See David V. Lampman II, The Unusual Suspects:
Unscrambling Satellite Piracy, 22 CARDOZO ARTS & ENT. L. J. 553, 580-582 (2004). In this case,
the parties appear to agree that the Yuens were authorized to receive the programing; the
question is whether they were authorized to display it to the public in their restaurant.

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they are not liable. Cf. J&J Sports Productions v. Mandell Family Ventures, LLC, 751 F.3d 346,
351 (5th Cir. 2014) (“The relevant portions of § 605(a) address only the unauthorized
interception or receipt of radio communications”) (emphasis added). If they were not authorized
but believed in good faith that they were, then they are liable but not for enhanced damages of up
to $100,000; if they were not authorized and did not have a good faith basis to believe that they
were authorized, then their violation may be found to have been willful. See 47 U.S.C. §
605(e)(2) (allowing damages of up to $100,000 for willful violation); J & J Sports Prods., Inc. v.
Tu, No. 08 C 4119, 2008 WL 4833116, at *2 (N.D. Ill. Oct. 29, 2008) (considering “(1) the
number of violations; (2) defendant's unlawful monetary gains; (3) plaintiff's significant actual
damages; (4) whether defendant advertised for the event; and (5) whether defendant collected a
cover charge on the night of the event” to determine enhanced damages award).
DirecTV’s evidence fails to establish as a matter of law that the Yuens were not
authorized to display DirecTV transmissions at the restaurant.5 The only evidence DirecTV has
presented that the Yuens were not authorized are a few brief statements in the affidavit of Kent
Mader, the Vice President of Risk Management for DirecTV. In his affidavit, Mader states that
“commercial programming subscriptions are generally more expensive since the programming
will be displayed for public viewing” and that “Defendants named above did not have the right to
exhibit DirecTV Satellite Programming in their commercial establishment on November 19,

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The Court must to some extent construct DirecTV’s argument for it, as its brief and
submitted record are often conclusory and unsupported. For example, its initial discussion of
authorization contains just three sentences and no citations for how this Court should determine
authorization. See Pl.’s Mem. at 10. Similarly, DirecTV accords one sentence and no factual or
legal citation for the proposition that the Yuen’s use was “intentional and done for commercial
gain, and required scheming and overt acts, justifying the imposition of the maximum statutory
damages under the Communications Act.” Id. at 11. Given the limited evidence presented by
DirecTV, however, these aspersions are far from self-evident and a jury could reasonably, and
easily, reject them.

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2013.”6 Mader Aff. ¶ 6, 9. DirecTV attached a printout from its computer system showing that
the Yuens had a “residential” account. Mader Aff. Ex. D, ECF No. 22-9. That document does not
set forth any restrictions on the use of the DirecTV service, however, and DirecTV did not
introduce any other evidence (such as a contract between the parties) suggesting what the terms
and conditions of a “residential” DirecTV account are.
The Yuens have contradicted DirecTV’s evidence of its general practice with their
affidavits, which show they asked for permission from a DirecTV representative—indeed, the
representative who sold them the DirecTV service—and were told they could use the service in
their restaurant. See Walter Yuen Aff. ¶ 4-5. In response, DirecTV attempted to introduce a
“Customer Agreement.” See Pl.’s Reply Ex. 1, ECF No. 33-1. Both Yuens, however, testified in
response that they had never received or seen such a document. See Supp. Walter Yuen Aff. ¶ 14; Supp. Mandy Yuen Aff. ¶ 1-4, ECF No. 37. The Customer Agreement is not signed and does
not bear the Yuens’ account number or any other information that would link it to the Yuens. It
is not even clear that the agreement, dated April 24, 2009 and valid “until replaced” would
govern the 2013 interaction at the Yuens’ restaurant. At summary judgment, the Court may only
(with a few exceptions not relevant here) consider evidence that “would be admissible or usable
at trial, including properly authenticated and admissible documents or evidence.” Smith v. City of
Chicago, 242 F.3d 737, 741 (7th Cir. 2001); see also Giant Screen Sports v. Canadian Imperial
Bank of Commerce, 553 F.3d 527, 537 (7th Cir. 2009) (dispute about authenticity of signature is
a dispute of material fact). And even if genuine, DirecTV’s evidence still falls short because it

6

The Court notes Mader’s statement about whether the defendants had the right to
exhibit the programming is a conclusion of law not appropriate in an affidavit. See Miller v. Am.
Nat. Bank & Trust Co. of Chicago, No. 88 C 10909, 1992 WL 168813, at *4 (N.D. Ill. July 10,
1992), aff'd, 4 F.3d 518 (7th Cir. 1993).

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has failed to show as a matter of law that the Customer Agreement was provided to the Yuens or
otherwise bound them.
DirecTV argues that the Yuens do not “claim they had an account with DIRECTV to
display or divulge DIRECTV Satellite Programming, or that the Customer Service agent told
them they could do same.” Pl.’s Reply at 6. This contention is simply wrong. The Yuens assert
that a DirecTV agent told them that they could watch DirecTV at their commercial establishment
and thus their conduct was authorized. To the extent that DirecTV means to argue that its
representative’s statement that the Yuens could watch at their restaurant did not extend to doing
so when other customers were around, the Court finds it is a reasonable inference from Walter’s
testimony that his representations that he wanted to bring the receiver to the restaurant and watch
there might include doing so when patrons are present.7
For these reasons, the Court cannot conclude that DirecTV has met its burden on
summary judgment. A reasonable factfinder, presented with the admissible evidence, might
credit the Yuens’ testimony and believe that they did in fact have an oral modification to the
typical terms of DirecTV service which allowed the Yuens to use DirecTV’s services in their
restaurant. The Court cannot make such credibility determinations at summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). As such, the motion for summary
judgment is denied.
*

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*

This is not the only inference that could be made from Walter’s testimony. The Yuens,
however, are entitled to have all reasonable inferences drawn in their favor at this stage of the
litigation. See Ripberger v. Corizon, Inc., 773 F.3d 871, 876 (7th Cir. 2014).

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Dated: June 29, 2017

John J. Tharp, Jr.
United States District Judge

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