Dish Network, LLC et al v. Jeffrey Parsons

Filing 10

ORDER granting 8 Plfs' Motion for Default Judgment. Partial default judgment as to Count III is warranted. Upon Plfs' dismissal of Counts I and II, the Clerk is directed to enter default judgment against dft. T hat dft be permanently enjoined from circumventing or assisting others in circumventing DISH Network's security system or extracting codes or other technological information. Plfs are awarded $10,000 in statutory damages. Final judgment will be entered following Plfs dismissal of Counts I and II and to enforce the permanent injunction. Signed by District Judge Richard Voorhees on 5/30/12. (smj)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
STATESVILLE DIVISION
CASE NO. 5:11-CV-00140-RLV-DSC
DISH NETWORK LLC,
ECHOSTAR TECHNOLOGIES
LLC, NAGRASTAR LLC,
Plaintiffs,
v.
JEFFREY PARSONS,
Defendant.

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ORDER

THIS MATTER is before the Court on Plaintiffs’ unopposed Motion for Default
Judgment, filed March 9, 2012. (Doc. 8.)
On January 13, 2012, Defendant was served with the Summons and Plaintiffs’
Complaint. (Doc. 4.) Defendant’s responsive pleading was due twenty-one days later on
February 3, 2012. Fed. R. Civ. P. 12(a)(1). To date, Defendant has neither filed a responsive
pleading nor requested an extension of time to do so. Accordingly, upon Plaintiffs’ prior motion
(Doc. 6), the Clerk of Court entered default against Defendant (Doc. 7). Plaintiffs now request
entry of default judgment, an award of $10,000 in statutory damages, and injunctive relief. For
the reasons stated below, Plaintiffs’ application is granted in full.
Plaintiffs have alleged violations of the Digital Millennium Copyright Act, 17 U.S.C. §
1201 et seq. (Count I), the Communications Act of 1934, 47 U.S.C. § 605 et seq. (Count II), and
the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. § 2511 et seq. (Count III).1

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Upon default, the well-pleaded allegations of the Complaint relating to liability are
taken as true. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (“The
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(Doc. 1.) They claim that Defendant “unlawfully circumvented the DISH Network security
system and received copyrighted, subscription-based DISH Network satellite television
programming without authorization and without payment to DISH Network.” (Doc. 1 at 2.)
Defendant did so through a subscription to a service operated by www.dark-angel.ca (“Dark
Angel”). Defendant utilized the Dark Angel service to obtain DISH Network’s descrambling
“control words,” which he in turn used illegally to decrypt DISH Network’s satellite signal.2
According to the Complaint, Plaintiffs have the authority of the copyright holders to
protect the television programming from unauthorized reception and viewing. (Doc. 1 at 3.)
Here, Plaintiffs specifically request entry of a default judgment against Defendant on Count III
of the Complaint for violations of sections 2511(1)(a) and 2520 of the ECPA. (Doc. 8 at 3.) If
granted, Plaintiff DISH Network will dismiss Counts I and II in order to expedite a final
judgment. (Doc. 8 at 10.) Therefore, the Court will address only the sufficiency of Count III.
Under 18 U.S.C. § 2511(1)(a), except as otherwise specifically provided, any person who
“intentionally intercepts, endeavors to intercept, or procures any other person to intercept or

defendant, by his default, admits the plaintiff's well-pleaded allegations of fact, is concluded on
those facts by the judgment, and is barred from contesting on appeal the facts thus established.”).
However, Defendant, by his default, does not admit conclusions of law or that the movants are
entitled to the relief they seek. See Thomson v. Wooster, 114 U.S. 104, 113 (1885) (stating that a
default judgment may be lawfully entered only “according to what is proper to be decreed upon
the statements of the bill, assumed to be true,” and not “as of course according to the prayer of
the bill”). The Court “must, therefore, determine whether the well-pleaded allegations in [the]
complaint support the relief sought . . . .” Ryan, 253 F.3d at 780.
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In a separate lawsuit, Plaintiff DISH Network seized Dark Angel’s business records and
control-word-sharing server, and was able to identify Dark Angel subscribers. (Doc. 1 at 6.)
These records indicate that Defendant Parsons purchased a one-year subscription to Dark
Angel’s service, which essentially allowed Defendant to receive unlimited access to DISH
Network programming. (Doc. 8 at 6.) Defendant accessed Dark Angel’s server and intercepted
DISH Network programming on at least eight separate occasions.
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endeavor to intercept, any . . . electronic communication . . . shall be subject to suit as provided
in subsection (5).” Subsection (5)(a)(ii) refers to section 2520, which provides a private right of
action for section 2511 violations.
To state a claim under section 2520(a) for a violation of section 2511, a plaintiff must
plead facts adequately showing that the defendant intentionally intercepted plaintiff’s satellite
television programming without proper authorization. See, e.g., DIRECTV, Inc. v. Webb, 545
F.3d 837, 844 (9th Cir. 2008) (deeming satellite television signals to be among the “electronic
communications” protected by ECPA). In DISH Network, L.L.C. v. DelVecchio, No. 11–6297,
2011 WL 4747848, at *3–4 (W.D.N.Y. Oct. 7, 2011), the court deemed sufficient the complaint,
which similarly alleged that a consumer used the control-word-sharing television service and
server here at issue to obtain DISH Network’s descrambling control words in order to illegally
receive and decrypt copyrighted television programming. Here, Plaintiffs’ allegations are
likewise sufficient. Plaintiffs have asserted the authority to protect the television programming
from unauthorized reception and viewing (Doc. 1 at 3) as well as Defendant’s unlawful
interception of DISH Network satellite television programming via the Dark Angel service (Doc.
1 at 6; Doc. 9-2 at 31).
As to whether Plaintiffs’ allegations support the relief sought, section 2520(c)(2)
provides a damage remedy for a violation involving interception of scrambled or encrypted
electronic communications: “[T]he court may assess as damages whichever is the greater of (A)
the sum of the actual damages suffered by the plaintiff and any profits made by the violator as a
result of the violation; or (B) statutory damages of whichever is the greater of $100 a day for
each day of violation or $10,000.” The Court thus has discretion under section 2520 to award

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either the statutory sum or no damages at all.3 See Nalley v. Nalley, 53 F.3d 649, 652–54 (4th
Cir. 1995) (holding that an award of damages under section 2520(c)(2) is discretionary in light
of the fact that Congress had changed the verb from “shall” to “may” when it amended the
federal statute in 1986).
Here, Plaintiffs’ actual damages appear to fall significantly short of the $10,000 statutory
amount. Aside from Defendant’s incremental enablement of others to engage in similar conduct,
Defendant’s incremental damage to Plaintiffs’ business reputations, and the proportionate cost of
security technologies incurred by Plaintiffs as a result of piracy-related activities, Plaintiffs were
primarily harmed in the form of lost revenues. Equipment costs aside, Defendant’s one-year
subscription to Dark Angel equates to roughly $840 in total lost programming revenue.4 While
several of the harms to Plaintiffs are difficult to quantify, the Court concludes that provable
actual damages do not exceed $10,000.
The Court next turns to the per-day calculation of damages. Section 2520(c)(2)(B)
provides for the assessment of statutory damages in the amount of $100 for each day of
violation, or $10,000, whichever is greater. Plaintiffs have indicated that Defendant accessed the
Dark Angel server on eight separate occasions.5 Presuming these occurrences to have been on
separate days, the per-day damages amount to $800.

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The statutory language does not permit the Court to grant some intermediate award.
See, e.g., DelVecchio, 2011 WL 4747848, at *5–6 (noting that Congress provided no damages
range under section 2520(c)(2)).
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Plaintiffs represent that DISH Network’s average monthly revenue per authorized
subscriber is around seventy dollars. (Doc. 8 at 8.)
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Plaintiffs note that the seized Dark Angel business records are not complete, and the full
measure of Defendant’s access to Dark Angel services therefore remains unknown. (Doc. 8 at 6.)
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Accordingly, there is a basis for the $10,000 statutory damages Plaintiffs seek. While
some courts have found the statutory $10,000 damage amount to be excessive, see, e.g.,
DIRECTV, Inc. v. Kaas, 294 F. Supp. 2d 1044 (N.D. Iowa 2003) (finding the $10,000 award
excessive on similar facts), in a similar case, the Fourth Circuit has deemed a district court’s
refusal to award any damages without giving serious consideration to the adverse effects of
allowing the misconduct to go unsanctioned to be an abuse of discretion. DIRECTV, Inc. v.
Rawlins, 523 F.3d 318, 326–27 (4th Cir. 2008). A refusal to award any damages would
exenterate the deterrence value of this lawsuit, leaving the yet-unresponsive Defendant and
others largely undiscouraged from similar acts of piracy. Thus, even if the provable actual
damages to Plaintiffs in this case are somewhat de minimus, that factor is outweighed by the
need for deterrence and the punitive purpose that the statute serves in this matter. Id. at 327–28
(noting that whether a useful purpose would be served by awarding the statutory amount is a
relevant factor for a district court to consider).
Additionally, the Court finds that Plaintiffs’ request for a permanent injunction is
appropriate. The ECPA authorizes courts to grant appropriate relief including preliminary and
other equitable or declaratory relief as may be appropriate. 18 U.S.C. § 2520(b)(2). The criteria
for the issuance of a permanent injunction requires that a plaintiff demonstrate “(1) that it has
suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that, considering the balance of hardships between
the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest
would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, L.L.C., 547
U.S. 388, 391 (2006).
In granting a permanent injunction under highly similar factual circumstances, the district
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court in DelVecchio reasoned:
The Court finds that based on the Defendant’s conduct, Plaintiffs have suffered irreparable
injury based on the piracy of their service. In addition, the damages provided for above,
while significant, are inadequate to prevent future piracy without injunctive relief. The only
hardship to Defendant from this injunction would be to prevent him from engaging in further
illegal activity, so the balance clearly weighs in Plaintiffs’ favor. The public interest is not
disserved by an injunction as it will protect copyrights and help enforce federal law. The
Court finds the criteria for a permanent injunction have been met and therefore orders
Defendant be permanently enjoined from intercepting Plaintiffs’ encrypted satellite
communications or assisting anyone else in doing so.
DelVecchio, 2011 WL 4747848, at *6. The Court reaches the same conclusion here and grants
Plaintiffs’ request for a permanent injunction.
IT IS, THEREFORE, ORDERED that Plaintiffs’ Motion for Default Judgment be
GRANTED. (Doc. 8.) Partial default judgment with regard to Plaintiffs’ claims under 18 U.S.C.
§§ 2511(1)(a) and 2520 (Count III) is warranted, and upon Plaintiffs’ dismissal of Counts I and
II, the Clerk of Court is directed to enter default judgment against Defendant Parsons.
IT IS FURTHER ORDERED that Defendant be immediately and permanently enjoined
from (1) circumventing or assisting others in circumventing DISH Network’s security system, or
otherwise intercepting or assisting others in intercepting DISH Network’s satellite signal, or
(2) testing, analyzing, reverse engineering, manipulating or otherwise extracting codes or other
technological information or data from Plaintiffs’ satellite receivers, smart cards, satellite data
stream, or any other part or component of the DISH Network security system.

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IT IS FURTHER ORDERED that Plaintiffs be awarded $10,000.00 in statutory
damages pursuant to 18 U.S.C. § 2520(c)(2)(B).
The Court retains jurisdiction in this matter to enter final judgment following Plaintiffs’
dismissal of Counts I and II, and to enforce the permanent injunction.
Signed: May 30, 2012

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