DIRECTV, LLC v. Wright et al
Filing
19
ORDER. Theresa Wright's motion to dismiss 12 is DENIED. Paul Wright's motion to dismiss 13 is DENIED in part. The Court requests further briefing on the 18 U.S.C. § 2511 claim and the tort claims in accordance with the discussion in Part II.D and Part II.F. DirecTV's brief is due within 30 days of the date of this Order, and Paul Wright may submit a response within 30 days of the day in which DirecTV submits its brief. The supplemental briefs shall not exceed 25 pages. For now, the Court reserves judgment on whether to dismiss the § 2511 claim and the tort claims. SO ORDERED. Signed by Hon. Frank P. Geraci, Jr. on 6/3/16. (BD)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
DIRECTV, LLC,
Plaintiff,
DECISION AND ORDER
v.
Case# 15-CV-474-FPG
PAUL WRIGHT and THERESA WRIGHT,
d/b/a ANAMETRICS CABLE,
Defendants.
Before the Court are two motions to dismiss, one from each of the two defendants in this
case. ECF Nos. 12, 13.
BACKGROUND
The following facts are drawn from the complaint and are assumed to be true for
purposes of the motions to dismiss.
ECF No. 1. Plaintiff DirecTV, LLC ("DirecTV") is a
company that provides television programming to its subscribers via satellite signals.
The
technology is essentially as follows: DirecTV sends a digital signal containing television
programming to a satellite orbiting thousands of miles above the Earth. This signal is encrypted
by DirecTV, i.e., it is electronically scrambled. The satellite then relays the encrypted signal
back to Earth, where the signal is received by a subscriber's individual satellite dish. The dish
, transmits the signal by cable wire to a subscriber's "receiver," which decrypts the signal
according to the subscriber's chosen subscription package. The subscriber is then able to watch
DirecTV programming.
DirecTV allows subscribers to purchase "Residential Accounts" or "Commercial
Accounts." Residential Accounts are essentially for those who live in single family residences.
These subscribers enter into a contract with DirecTV, called a "Customer Agreement," where
they pay a monthly fee in exchange for DirecTV programming.
Importantly, the Customer
Agreement "strictly prohibits any re-broadcasting or retransmitting of DIRECTV programming,
or viewing or use of that programming at a location other than at the subscriber's residence."
ECF No. 1 at~ 16.
Notably, DirecTV offers an additional service if subscribers want to be able to watch
programming on multiple televisions in the house.
For a small monthly charge per extra
television, residential subscribers can connect their primary receiver to secondary receivers
throughout the house so that DirecTV programming is "mirrored" to other televisions. In line
with the provision of the Customer Agreement referenced above, DirecTV requires that each
secondary receiver be physically located in the subscriber's house. Id.
at~
17.
DirecTV also allows subscribers to purchase Commercial Accounts.
Commercial
Accounts are for businesses such as bars, stores, gyms, and employee break rooms.
These
businesses enter into a contract with DirecTV, called a "Commercial Viewing Agreement,"
where again they pay a monthly fee in exchange for programming. Importantly, the business is
required to truthfully identify its service address, the nature of its business, and the type of
programming to be viewed. Id.
at~
18.
With this context in mind, the Court turns to the alleged wrongful conduct by the
defendants, who represent themselves pro se.
Defendants Paul Wright and Theresa Wright
allegedly own a business called Anametrics Cable ("Anametrics").
Anametrics supplies
television programming to subscribers in the Buffalo, New York area. DirecTV alleges that
2
from 1996 to 2007, the Wrights or relatives of the Wrights created twelve Residential Accounts
with DirecTV using various addresses, possibly using fake names to set up some of the accounts.
For each Residential Account, they activated between six and sixteen receivers. Notably, many
of these Residential Accounts used the same address. The Wrights also created one Commercial
Account with one receiver activated. DirecTV's essential allegation is that the Wrights, doing
business as Anametrics, created these various accounts as part of a scheme to rebroadcast
DirecTV programming to Anametrics subscribers. The Wrights are alleged to have wrongfully
collected subscription fees for Anametrics in connection with this rebroadcasting scheme.
Accordingly, DirecTV has filed a complaint containing a variety of claims against the
Wrights, allegedly doing business as Anametrics. Specifically, DirecTV alleges that the Wrights
violated two federal statutes, the Federal Communications Act of 1934 (the "Communications
Act"), 47 U.S.C. § 605, and the Electronic Communications Privacy Act of 1986 (the "Wiretap
Act"), 18 U.S.C. § 2511. DirecTV also makes state law claims against the Wrights for fraud,
negligent misrepresentation, breach of contract, unjust enrichment, and conversion. Moreover,
DirecTV requests injunctive relief restraining the Wrights from, generally speaking, continuing
their alleged rebroadcasting scheme in the future.
DISCUSSION
Defendants Theresa Wright and Paul Wright now separately move to dismiss the
complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. ECF Nos. 12, 13. In
reviewing a motion to dismiss under Rule l 2(b )( 6), the Court must accept the factual allegations
in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Ne chis v.
Ox.ford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005). It need not accept as true, however,
allegations that are conclusory, that is, bare, unadorned allegations that lack specificity. Ashcroft
3
v. Iqbal, 556 U.S. 662, 680 (2009). To survive a motion to dismiss, "a complaint must contain
sufficient factual matter ... 'to state a claim to relief that is plausible on its face.'" Iqbal, 556
U.S. at 678 (quoting Bell At!. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In other words, the
factual allegations must permit the court "to infer more than the mere possibility of misconduct."
Iqbal, 556 U.S. at 679.
Because the Wrights are proceeding pro se, their submissions "must be construed
liberally and interpreted to raise the strongest arguments that they suggest." Triestman v. Fed.
Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (alterations, citations, and internal
quotations omitted); see also Ruotolo v. IR.S., 28 F.3d 6, 8 (2d Cir. 1994) (observing that district
courts should afford pro se litigants "special solitude").
Below, the Court first addresses Theresa Wright's motion to dismiss (ECF No. 12) before
turning to Paul Wright's motion to dismiss (ECF No. 13).
I. Theresa Wright's Motion to Dismiss
Theresa Wright's essential argument in her motion to dismiss is that she was not involved
in the Anarnetrics business. ECF No. 12. She details how she was married to Paul Wright in the
1990s and 2000s. During this period, she knew that Paul Wright was operating Anametrics, yet
her involvement in the business "consisted of answering a phone on a few dozen occasions."
She asserts that her name was not on any of the legal documents for Anametrics, she was not a
signatory to any Anametrics accounts, and she did not have access to any Anametrics bank
accounts. In essence, she contends that she did not at all participate in the Anametrics business,
and thus DirecTV has not stated a claim against her. In support of these arguments, Theresa
Wright has attached to her motion to dismiss a business certificate for Anametrics that contains
Paul Wright's name, but not Theresa Wright's name.
4
Stated simply, these arguments are not appropriate at the motion-to-dismiss stage. At this
stage, the Court simply takes the plaintiff's well-pleaded allegations as true.
See Nechis v.
Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005). Here, DirecTV has alleged that both
Paul Wright and Theresa Wright were operating Anametrics. ECF No. 1 at 4if4il 5-6. DirecTV
further alleges that Anametrics, under the operation of both Paul and Theresa Wright,
rebroadcasted DirecTV programming to Anametrics subscribers, thereby deriving a financial
benefit. Because the Comi must accept these allegations as true, Theresa Wright's argument that
they are false-namely, that she did not actually operate or participate in Anametrics-is not a
fruitful argument. In basic terms, the Court's job at this early stage is simply to examine whether
the allegations, taken as true, qualify as a legal claim and thus plausibly entitle DirecTV to relief.
Anderson v. Buie, No. 12-CV-6039-FPG, 2015 WL 9460146, at *17 (W.D.N.Y. Dec. 23, 2015).
The Court notes that at a later stage in the litigation, Theresa Wright will have the
opportunity to argue that DirecTV's allegations are false. For instance, in a motion for summary
judgment or at trial, Theresa Wright could argue that she had nothing to do with Anametrics, and
she could potentially use the Anametrics business certificate as evidence in support of this
argument. But again, at the motion-to-dismiss stage, arguments about the facts of the case are
unavailing. Theresa Wright makes no other arguments in support of her motion to dismiss.
Accordingly, Theresa Wright's motion to dismiss (ECF No. 12) is DENIED.
II. Paul Wright's Motion to Dismiss
Paul Wright makes a few arguments in support of his motion to dismiss.
They are
construed liberally and discussed below.
A. Argument Regarding Paul Wright's Status as a DirecTV Installer
Paul Wright first makes an argument about the facts similar to those in Theresa Wright's
5
motion.
In short, Paul Wright asserts that he was not a "dealer, distributor or installer" of
DirecTV equipment.
ECF No. 13 at 3.
This assertion is an attempt to refute DirecTV's
allegation, made throughout the complaint, that Paul Wright installed and maintained DirecTV
receiving equipment at locations not authorized by DirecTV. ECF No. 1 at ifil 36, 44, 49, 72, 81.
This sort of argument is not appropriate on a motion to dismiss as, again, the Court accepts
DirecTV's allegations as true at this stage.
Paul Wright also attaches various exhibits to his motion to dismiss, including a business
certificate for Anametrics, a certificate indicating that Anametrics is no longer in business, and
print-outs from DirecTV's website supporting his assertion that he did not or could not install
DirecTV equipment. ECF No. 13 at 6-11. The Court does not consider materials outside the
complaint on a motion to dismiss as, again, its job at this stage is not to weigh the facts. See
Anderson, 2015 WL 9460146 at * 17. For now, it simply accepts DirecTV' s allegations as true.
In sum, Paul Wright's argument regarding his status, or non-status, as a DirecTV installer
is not appropriate at this stage of the litigation.
B. Breach of Contract Claim
Paul Wright also challenges DirecTV's claim for breach of contract. He first appears to
call into question the existence of the contracts he allegedly entered into by asserting that the
complaint "does not contain any allegations of any executed agreements" between him and
DirecTV. ECF No. 13 at 4. Similarly, he asserts that the complaint does not specifically identify
the terms of the contracts that he allegedly breached. Id. Moreover, he notes that DirecTV does
not "direct the comi[s] attention to any documentation that would support [its] claims" that Paul
Wright contracted with DirecTV or that Paul Wright rebroadcasted DirecTV programming.
Some of these arguments are again necessarily unsuccessful because the Court is not yet
6
concerned with factual disputes or evidence; for this reason, DirecTV does not need to direct the
Court's attention to documentation that would support its claims. However, construed liberally,
Paul Wright is also arguing that DirecTV's breach of contract allegations are not specific
enough-with regard to both the existence of a contract and the terms of the contracts Paul
Wright allegedly breached-to pass scrutiny under Twombly and Iqbal. The Court addresses this
argument below.
To survive a motion to dismiss for breach of contract under New York law, 1 a plaintiff
must allege the following: "(1) the existence of an agreement, (2) adequate performance of the
contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages." Ellington
Credit Fund, Ltd. v. Select Portfolio Servicing, Inc., 837 F. Supp. 2d 162, 188-89 (S.D.N.Y.
2011) (citations and internal quotations omitted).
Here, DirecTV has specifically and thus sufficiently alleged each one of these elements.
First, contrary to Paul Wright's assertion that the complaint "does not contain any allegations of
any executed agreements," DirecTV specifically alleges that the Wrights created Residential
Accounts and Commercial Accounts (ECF No. 1 at
iii!
20-32, 72), thereby entering into
agreements with DirecTV called Customer Agreements and Commercial Viewing Agreements
(ECF No. 1 at
ifif 16, 18, 70-71). Second, DirecTV alleges that it adequately perfmmed under
the contract by providing television programming to the Wrights.
Id. at
iii!
39, 73.
Third,
contrary to Paul Wright's assertion that the complaint does not contain any specific reference to
the terms of the contracts that he actually breached, DirecTV specifically alleges that the Wrights
As a federal comi in the state of New York, the Court applies the substantive law of New
York to state-law claims. Erie R. Co. v. Tompkins, 304 U.S. 64, 79 (1938) (state law applies to
claims over which the Court has diversity jurisdiction); Valencia ex rel. Franco v. Lee, 316 F.3d
299, 304-07 (2d Cir. 2003) (state law applies to claims over which the Court has supplemental
jurisdiction).
7
breached the terms prohibiting them from, most notably, rebroadcasting DirecTV programming
and using satellite receiving equipment at unauthorized locations. Id. at
iii! 16-18, 35-38, 72.
Fomih, DirecTV alleges that it suffered harm from the beach in the form of, among other things,
lost subscription revenues. Id. at ii 42.
These allegations are specific enough to state a breach of contract claim. Thus, Paul
Wright's motion to dismiss this claim is denied.
C. Communications Act Claim
DirecTV further alleges that the Wrights violated two federal statutes. First, DirecTV
alleges that the Wright's alleged rebroadcasting scheme violated the Communications Act, 47
U.S.C. § 605. Specifically, DirecTV asse1is that the Wrights violated the third sentence of 47
U.S.C. 605(a) (ECF No. 15 at 6), which provides as follows: "No 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." 47 U.S.C. § 605(a). Courts have repeatedly interpreted
this sentence to prohibit the "unauthorized divulgence or use of [satellite] communications,"
even if the communications have been "received legally." Dish Network L.L. C. v. World Cable
Inc., 893 F. Supp. 2d 452, 472 (E.D.N.Y. 2012) (internal quotations omitted) (quoting Joe Hand
Promotions, Inc. v. That Place, LLC, No. ll-CV-931, 2012 WL 2525653, at *3 (E.D. Wis. June
29, 2012)); J & J Sports Prods., Inc. v. 4326 Kurz, Ltd., No. CIV.A.07-3850, 2009 WL 1886124,
at *7 (E.D. Pa. June 30, 2009) (holding that a defendant violates § 605(a) by "divulging
transmission of a satellite communication to unauthorized persons, even after lawfully receiving
the communication); That's Entertainment v. Old Bridge Tavern, No. 94-CV-2612, 1996 WL
148045, at *2 (N.D. Ill. March 28, 1996) (holding that "direct evidence that defendant
8
broadcast[ ed] the [satellite] transmission" without authorization to its patrons was "enough to
violate the statute").
Here, DirecTV has plainly alleged that the Wright's rebroadcasting scheme was an
"unauthorized divulgence" of satellite signals. See Dish Network, 893 F. Supp. 2d at 472. Most
notably, DirecTV has alleged that the Wrights were residential subscribers who were only
authorized to watch DirecTV programming in their house. ECF No. 1 at
iii!
16, 44 They were
not authorized to rebroadcast DirecTV programming to Anametrics subscribers.
Id.
Those
simple allegations are enough to allow DirecTV to survive a motion to dismiss on the § 605(a)
claim.
Paul Wright does not set forth an argument in his motion to dismiss that controverts this
basic analysis. With regard to the § 605 claim, he first argues that he did not actually breach a
contract. ECF No. 13 at 4. He goes on to reason that "[a]bsent any clear contractual violations,"
the "violations as contained in the complaint can not by their nature be willful or deceptive,'' and
thus there was no violation of § 605. Id. This is a difficult line of argument to follow, but the
Court first notes that a violation of§ 605 does not necessarily require a breach of contract; it only
requires an unauthorized divulgence of satellite signals. DirecTV has plainly alleged such a
divulgence here. Second, the statute does not require that a defendant's actions be willful or
deceptive. See Joe Hand Promotions, Inc. v. Elmore, No. 11-CV-3761 KAM SMG, 2013 WL
2352855, at *6-8 (E.D.N.Y. May 29, 2013) (observing that damages are available under § 605
for willful and non-willful violations, though such damages are enhanced for willful violations).
For the reasons above, DirecTV's has adequately stated a claim under 47 U.S.C. § 605,
and Paul Wright's motion to dismiss this claim is denied.
9
D. Wiretap Act Claim
DirecTV also alleges that the Wrights violated the Wiretap Act, 18 U.S.C. § 2511. This
statute makes it an offense to "intentionally intercept[], endeavor[] to intercept, or procure[] any
other person to intercept or endeavor to intercept, any wire, oral, or electronic communication ..
. ." 18 U.S.C. § 2511(1). Stated simply, the provision is concerned with the interception of
electronic communications, which includes satellite signals. See DirecTV, Inc. v. Webb, 545
F.3d 837, 844-45 (9th Cir. 2008) (assuming without discussion that § 2511 applies to the
interception of satellite signals).
Paul Wright makes the same argument for the § 2511 claim that he made for the § 605
claim discussed above. He first asserts that he did not actually breach a contract. ECF No. 13 at
4.
He goes on to reason that "[a]bsent any clear contractual violations," the "violations as
contained in the complaint can not by their nature be willful or deceptive," and thus there was no
violation of§ 2511. Id. ECF No. 13 at 4. Here, again, the Court notes that a violation of§ 2511
does not necessarily require a breach of contract; it only requires an interception of satellite
signals.
Second, while § 2511 does indeed require a willful or "intentional[]" interception,
DirecTV has certainly alleged in the complaint that the Wrights acted intentionally. In short,
DirecTV has alleged that the Wrights engaged in a pattern of conduct over many years
specifically designed to rebroadcast DirecTV for their own financial benefit. ECF No. 1 at ,,
19-42. The clear inference is that the Wrights' alleged rebroadcasting scheme was by no means
accidental or otherwise unintentional. Accordingly, Paul Wright's argument with respect to the
§ 2511 claim is not persuasive.
The Court observes, however, that there appears to be a separate problem with the § 2511
claim. As explained above, the statute is concerned with the interception of signals. There is a
10
question here about whether DirecTV has alleged that the Wrights actually intercepted a
DirecTV satellite signal within the meaning of§ 2511.
The word "intercept" is defined in the Wiretap Act as "the aural or other acquisition of
the contents of any wire, electronic, or oral communication through the use of any electronic,
mechanical, or other device." 18 U.S.C. § 2510(4). In other words, the Wiretap Act broadly
defines "intercept" to mean the acquisition of a communication with some sort of a device.
Courts have understandably narrowed this definition in the context of electronic
communications so that "intercept" includes only "acquisitions of communication[s]
contemporaneous with transmission." See, e.g., Hoyle v. Dimond, No. 08-CV-347C, 2013 WL
1152037, at *10 (W.D.N.Y. Mar. 19, 2013) (emphasis added) (collecting cases). So, in short, an
interception requires a capture of the communication while it is in transit. As the Ninth Circuit
has observed, this meaning "is consistent with the ordinary meaning of 'intercept,' which is 'to
stop, seize, or interrupt in progress or course before arrival."' Konop v. Hawaiian Airlines, Inc.,
302 F.3d 868, 878 (9th Cir. 2002) (defining the word "intercept" in the context of the Wiretap
Act) (citations omitted).
With this definition of the word "intercept" in mind, it is unclear to the Court how, based
on the allegations in the complaint, the Wrights intercepted DirecTV satellite signals. DirecTV
does not appear to be alleging that the Wrights "seize[d]" satellite signals "before arrival" to
DirecTV receivers; rather, DirecTV appears to be alleging that the Wrights legitimately received
the signals before then rebroadcasting them to Anametrics subscribers. The critical distinction
here is between an unauthorized seizure or receipt of signals, which is covered by § 2511, and an
unauthorized redistribution of signals, which is not covered by § 2511.
11
To illuminate this distinction, it is useful to briefly examme the typical case that
DirecTV brings under § 2511. DirecTV has filed a large number cases under § 2511 to combat
the theft of its satellite signals. See, e.g., DirecTV, Inc. v. Schulien, 401 F. Supp. 2d 906, 910
(N.D. Ill. 2005); DIRECTV Inc. v. Robson, 420 F.3d 532, 535 (5th Cir. 2005); In re Cases Filed
by DIRECTV, Inc., 344 F. Supp. 2d 647, 649 (D. Ariz. 2004); DIRECTV, Inc. v. Walsh, 540 F.
Supp. 2d 553, 554 (M.D. Pa. 2008); Directv, Inc. v. Thomas, 329 F. Supp. 2d 949, 950 (E.D.
Mich. 2004). These cases target individuals who have used illegal devices, generally termed
"pirate access devices," that allow them to steal DirecTV signals with phony receiving
equipment. See id.
In other words, these piracy cases target individuals who have illegally
seized DirecTV's satellite signals.
The piracy cases are different from the case at hand in that, as should be apparent, they
concern unauthorized seizures or receipts of satellite signals as opposed to unauthorized
redistributions. Numerous courts have focused on this distinction in finding that § 2511 requires
the unauthorized receipt, not simply the unauthorized redistribution, of a signal. See United
States v. Bond, No. 2:13-CR-00006-MR, 2015 WL 1737052, at *4 n.6 (W.D.N.C. Apr. 16, 2015)
("Notably, however, this case does not involve the illegal interception of a satellite cable
transmission in violation of 18 U.S.C. § 2511. The Defendant received the signals legitimately
and paid for them. It was his re-transmission that was improper.") (emphasis in original);
DIRECTV, LLC v. Perugini, 28 F. Supp. 3d 351, 356 (M.D. Pa. 2014) ("Defendant Ton-e was
authorized to receive the signal with his DIRECTV receiver, and did not utilize a pirate access
device or something similar, which is commonly seen in suits for violations of Section 2511. ");
see also Conte v. Newsday, Inc., 703 F. Supp. 2d 126, 139--41 (E.D.N.Y. 2010) ("[A]bsent an
interception, neither the disclosure nor use of the contents of the communication violates the
12
Wiretap Act. . . . Plaintiff has not alleged that Newsday defendants intercepted plaintiffs
[communications] through a device, but that they received the [communications] as sent to them
by the distributor defendants. As discussed above, the distributors did not intercept the
[communications] themselves-they were the intended recipients. The mere forwarding of
[communications] by the intended recipients of those [communications] does not violate the
ECPA.") (citations omitted); Crowley v. CyberSource Corp., 166 F. Supp. 2d 1263, 1269 (N.D.
Cal. 2001) (holding that defendant "did not . . . 'intercept' the communication within the
meaning of the Wiretap Act, because [it] did not acquire it using a device other than" the device
to which it was supposed to be sent); United States v. Meriwether, 917 F.2d 955, 960 (6th Cir.
1990).
There is also a substantial body of case law interpreting the word "intercept" in the
context of the Communications Act, which in portions other than the one at issue in Part II.C,
requires the interception, not simply the unauthorized divulgence, of a signal. This case law is
not favorable to DirecTV. See, e.g., Cablevision of Michigan, Inc. v. Sports Palace, Inc., 27 F.3d
566, at *4 (6th Cir. 1994) ("As the statute speaks of transmission, and the legislative history
indicates that Congress was concerned with the piracy of satellite signals, any rebroadcast of
cable programming ... is not an interception") (internal citations omitted); Conte v. Newsday,
Inc., 703 F. Supp. 2d 126, 141 (E.D.N.Y. 2010) ("[T]he distributors did not intercept the
[communications] themselves-they were the intended recipients. The mere forwarding of
[communications] by the intended recipients of those [communications] does not violate the [§
605]").
Stated simply, DirecTV has alleged that the Wrights unlawfully rebroadcasted satellite
signals. They do not appear to have alleged, however, that the Wrights intercepted such signals.
13
Notably, DirecTV's allegation that the Wrights installed the receiving equipment in unauthorized
locations-which is made throughout the complaint and specifically in the context of the alleged
§ 2511 violation-does not appear to alter the basic idea that an interception requires an
unauthorized seizure at the very first step of the scheme. See Perugini, 28 F. Supp. 3d at 356
("Plaintiff does not cite any case law supporting its position that moving an authorized receiver
to a different location constitutes an interception, and we find that it does not. Defendant Torre
was authorized to receive the signal with his DIRECTV receiver, and did not utilize a pirate
access device or something similar, which is commonly seen in suits for violations of Section
2511."); Dish Network L.L.C. v. World Cable Inc., 893 F. Supp. 2d 452, 471-72 (E.D.N.Y.
2012) ("In this case, the Court fails to see how it matters whether the [receivers] were located at
their intended addresses or some other location when they allegedly re-transmitted the signal to
the [defendant's] server. ... [T]he fact that the Defendants may have removed the ... receivers
associated with the individual accounts from the locations associated with those accounts does
not constitute an "interception" under the Communications Act.").
In light of this apparent problem with the § 2511 claim, and especially in light of the fact
that Paul Wright is a pro se litigant who moved to dismiss the § 2511 claim, the Court seeks
further briefing on this issue from both parties. DirecTV is directed to submit a brief on why the
Court should not dismiss§ 2511 claim given that the Wrights do not appear to have intercepted a
satellite signal. DirecTV's submission is due within 30 days of the date of this Order. Paul
Wright may file a response within 30 days of the day in which DirecTV submits its brief.
DirecTV is also, of course, free to withdraw the § 2511 claim if it finds the claim untenable.
Until it receives this briefing, the Court reserves judgment on whether to dismiss the §
2511 claim.
14
E. Injunctive Relief
Based on the complaint, DirecTV. seeks both money damages and injunctive relief. ECF
No. 1 at p. 1, 24. The injunction would restrain the Wrights from, generally speaking, continuing
their alleged rebroadcasting scheme in the future. ECF No. 1 at p. 24. The Court notes that
injunctive relief is available under the two statutes at issue. See 47 U.S.C. § 605(e)(3)(B)(i); 18
U.S.C. § 2520(b)(l). It may also be available for some or all of the state law claims.
Paul Wright contends that he has not been doing business as Anametrics since 2014, and
thus any request for injunctive relief is moot. ECF No. 13 at 4. DirecTV responds to this
argument by asserting that "an action for an injunction does not become moot merely because the
conduct complained of has terminated, if there is a possibility of recurrence, since otherwise the
defendants would be free to return to (their) old ways." ECF No. 15 at 9 (quoting Fresh Del Monte
Produce Inc. v. Del Monte Foods Co., 933 F. Supp. 2d 655, 661 (S.D.N.Y. 2013)). Additionally,
DirecTV argues that based on its allegations in the complaint-which the Court must accept as
true-the Wrights continue to operate Anametrics to this day.
The Court finds DirecTV's arguments persuasive, and, more generally, is not inclined to
rule out injunctive relief at this early stage in the litigation. In short, whether injunctive relief is
an appropriate remedy cannot be determined unless or until the claims in the complaint are
decided in favor of DirecTV. Accordingly, regardless of whether the Court ultimately agrees
that injunctive relief is inappropriate in this case, Paul Wright's motion to dismiss DirecTV's
request for an injunction is at this point premature.
F. Tort Claims
Finally, the Court turns to the state law claims against the Wrights sounding in tort. As
was set forth in the background section, in addition to the two statutory claims and the breach of
contract claim, DirecTV has asserted claims against the Wrights for fraud, negligent
15
misrepresentation, and conversion.
DirecTV has also asserted a claim in quasi-contract for
unjust enrichment.
Paul Wright has referenced the fraud and misrepresentation claims in his motion to
dismiss. ECF No. 13 at 4 ("Plaintiffs complaint contains a long list ofreferences to Commercial
and/or Residential Viewing Agreements being made through fraud or misrepresentation but it
does not contain any allegations of any executed agreements .... ")(internal quotations omitted).
In light of this reference, and in light of the fact that Paul Wright is proceeding pro se against
highly experienced counsel, the Comi observes that there appear to be deficiencies in the tort
claims. It raises the specter of these deficiencies below. See Traguth v. Zuck, 710 F.2d 90, 95
(2d Cir. 1983) ("Implicit in the right to self-representation is an obligation on the part of the
court to make reasonable allowances to protect pro se litigants from inadvertent forfeiture of
important rights because of their lack of legal training."); Triestman, 470 F.3d at 475 ("In this
time of ever increasing legal costs and complexity of litigation, the pro se litigant is at an
insurmountable disadvantage.") (citation and internal quotations omitted).
In short, the claims for fraud, negligent misrepresentation, and convers10n may be
duplicative of the breach of contract claim. 2 In the complaint, DirecTV alleges that the Wrights
breached contracts by creating accounts with false information, installing and maintaining
equipment at unauthorized locations, and rebroadcasting DirecTV programming. ECF No. 1 at if
72.
DirecTV then appears to allege that the Wrights committed fraud, negligent
2
The unjust enrichment claim also may be duplicative of the breach of contract claim.
However, because Paul Wright appears to dispute the existence of the contracts between him and
DirecTV in his motion to dismiss (ECF No. 13 at 4), the Court does not yet contemplate
dismissal of the unjust enrichment claim. Speedfit LLC v. Woodway USA, Inc., 53 F. Supp. 3d
561, 580 (E.D.N.Y. 2014) ("While plaintiffs' unjust enrichment claim is derived from the same
set of facts as plaintiffs' breach of contract claim, plaintiffs may plead alternative theories of
liability at (the motion-to-dismiss] stage because (the defendant] disputes the existence of an
agreement.").
16
misrepresentation, and convers10n by, likewise, creating accounts with false information,
installing and maintaining equipment at unauthorized locations, and rebroadcasting DirecTV
programming. Id.
at~~
55, 62, 81. Under New York law, a plaintiff may not simply repackage a
breach of contract claim into a tort claim. See Waverly Properties, LLC v. KMG Waverly, LLC,
824 F. Supp. 2d 547, 564-65 (S.D.N.Y. 2011) ("It is a well-established principle of New York
law that a tort claim that merely restates a breach of contract claim cannot stand.").
There are a few circumstances, however, in which a plaintiff may bring parallel contract
and tort claims. As for parallel fraud claims, a plaintiff may bring such a claim if the plaintiff
"(i) demonstrate[s] a legal duty separate from the duty to perform under the contract; or (ii)
demonstrate[s] a fraudulent misrepresentation collateral or extraneous to the contract; or (iii)
seek[ s] special damages that are caused by the misrepresentation and unrecoverable as contract
damages." Solutia Inc. v. FMC Corp., 385 F. Supp. 2d 324, 342 (S.D.N.Y. 2005) (citations and
internal quotations omitted).
It is not apparent that DirecTV's fraud allegations fall into any one of these categories.
Accordingly, the Court also requests further briefing from the paiiies as to why the fraud claim is
not duplicative of the contract claim. In submitting this briefing, the parties should be mindful of
a few principles. First, though the case law in New York is somewhat muddled on this issue, it is
not enough to allege that the Wrights entered the contracts with an undisclosed intent not to
perform. See Safi Classic SA. de C. V v. Hurowitz, 444 F. Supp. 2d 231, 244 (S.D.N.Y. 2006)
("[A ]llegations of false statements of intent to perform contractual obligations are not sufficient
to support a fraud claim."); B & M Linen, Corp. v. Kannegiesser, USA, Corp., 679 F. Supp. 2d
474, 480 (S.D.N.Y. 2010) ("Even a deliberately false statement that the defendant intends to
perform on a contract, when he does not, will not suffice" to suppmi a parallel fraud claim).
17
Second, though DirecTV seeks punitive damages for the fraud claim (ECF No. 1 at~ 60), such
damages are not available for a fraud claim that "arises from" a contract claim unless the conduct
"was aimed at the public generally." Safi, 444 F. Supp. 2d at 247-48. Here, DirecTV does not
appear to be alleging that the Wrights' scheme was aimed at the public. Third, as a general
matter, a party pleading fraud is subject to a heightened pleading standard under Federal Rule of
Civil Procedure 9(b ).
The same deficiency appears to blight DirecTV's negligent misrepresentation claim.
Accordingly, the Court also seeks further briefing at to why the negligent misrepresentation
claim is not duplicative of the contract claim. In submitting this briefing, the parties should
again be mindful of a few principles. First, even if the negligent misrepresentation claim is not
duplicative of the contract claim, a negligent misrepresentation claim requires a "special or
privity-like relationship between defendants and plaintiffs." Jeffers v. Am. Univ. ofAntigua, 125
A.D.3d 440, 443 (N.Y. App. Div. 2015). Typically, this means that the defendant must have
"unique or specialized expertise," or "a special position of confidence and trust with the injured
party such that reliance on the negligent misrepresentation is justified." Kimmell v. Schaefer, 89
N.Y.2d 257, 263 (1996). It is not apparent, based on the complaint, that such a relationship
exists between DirecTV and the Wrights. Second, regardless of whether the misrepresentation
claim is duplicative and regardless of whether DirecTV has alleged the requisite relationship,
under New York's economic loss rule, "a plaintiff asserting a claim of negligent
misrepresentation who has not suffered any personal or property damage is limited to an action
in contract." Cherny v. Emigrant Bank, 604 F.Supp.2d 605, 609 (S.D.N.Y. 2009). The purpose
of this rule is to, unsurprisingly, prevent "contract law from drowning in a sea of tort." BNP
Paribas Mortg. Corp. v. Bank of America, NA., 949 F. Supp. 2d 486, 505 (S.D.N.Y. 2013)
18
(alterations, citations, and internal quotations omitted). Third, since negligent misrepresentation
is a type of fraud, a party pleading negligent misrepresentation is once again subject to a
heightened pleading standard under Federal Rule of Civil Procedure 9(b). See Naughright v.
Weiss, 826 F. Supp. 2d 676, 689 (S.D.N.Y. 2011).
Finally, the Court observes that the conversion claim is also based on the same facts as
the contract claim. Thus, the Court seeks further briefing as to why DirecTV's conversion claim
is not duplicative of the breach of contract claim. See AD Rendon Commc 'ns, Inc. v. Lumina
Americas, Inc., No. 04-CV-8832 (KMK), 2007 WL 2962591, at *7 (S.D.N.Y. Oct. 10, 2007).
As a fmiher potential deficiency with the conversion claim, other courts have found that
plaintiffs cannot recover for both conversion and a 47 U.S.C. § 605 violation for the same
conduct. See Joe Hand Promotions, Inc. v. Flamingo's Food & Spirits, L.L.C., No. CIV.A. 0:112431-MBS, 2012 WL 2048192, at *2 (D.S.C. June 5, 2012) ("[R]ecovery under both§ 605 and
the tort of conversion would result in an impermissible double recovery for the same loss.").
In sum, the Court requests further briefing from the parties on why the tort claims are not
duplicative of the contract claims. In other words, it requests briefing on why the tort damages
are not recoverable under the breach of contract theory or, alternatively, the quasi-contract theory
of unjust enrichment. In submitting this briefing, the parties are urged to keep in mind the
principles above, which, especially for the negligent misrepresentation and conversion claims,
call attention to problems beyond just the contract duplication issue. Once again, DirecTV has
30 days from the date of this Order to submit its brief. Paul Wright may file a response within
30 days of the day in which DirecTV submits its brief. DirecTV remains, of course, free to
withdraw its tort claims if it finds that they are untenable.
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Until it receives this briefing, the Court reserves judgment on whether to dismiss the tort
claims.
CONCLUSION
For the reasons above, Theresa Wright's motion to dismiss
(E~F
No. 12) is DENIED.
Paul Wright's motion to dismiss (ECF No. 13) is DENIED in part. The Court requests further
briefing on the 18 U.S.C. § 2511 claim and the tort claims in accordance with the discussion in
Part II.D and Part II.F. To reiterate, DirecTV's brief is due within 30 days of the date of this
Order, and Paul Wright may submit a response within 30 days of the day in which DirecTV
submits its brief.
The supplemental briefs shall not exceed 25 pages.
For now, the Court
reserves judgment on whether to dismiss the § 2511 claim and the tort claims.
IT IS SO ORDERED.
DATED:
June 3, 2016
Rochester, New York
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