DIRECTV, LLC v. Herrera et al
Filing
23
ORDER granting 18 Motion for Summary Judgment. Within 20 days Plaintiff will a motion and affidavit for reasonable fees and costs. Defendants have 10 days to respond.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DIRECTV, LLC, A California
limited liability company,
§
§
§
Plaintiff,
§
§
VS.
§
§
DAVID HERRERA, Individually and §
as officer, director, share§
holder and/or principal of
§
DARIO’S RESTAURANT, INC. d/b/a §
DARIO’S AMERICAN CUISINE, and
§
DARIO’S RESTAURANT, INC. d/b/a §
DARIO’S AMERICAN CUISINE,
§
§
Defendants.
§
C.A. NO. H-13-1138
OPINION AND ORDER
Pending before the Court in the above referenced cause,
seeking declaratory and injunctive relief and damages under the
Cable Communications Policy Act of 1984, 47 U.S.C. § 605(e)(3)(C),
and the Federal “Wiretap Act,” as amended by the Electronic
Communications Privacy Act (Title III of the Omnibus Crime Control
and Safe Streets Act), 18 U.S.C. §§ 2511 (providing a civil cause
of
action)
and
2512,
for
improper
interception,
receipt,
transmission, and exhibition of satellite programing signals, in
addition to civil conversion, is Plaintiff DIRECTV, LLC’s (“DTV’s”)
motion for summary judgment (instrument #18).
-1-
Defendants David
Herrera and Dario’s Restaurant d/b/a Dario’s American Cuisine have
failed to file a response.
Standard of Review
Summary judgment under Federal Rule of Civil Procedure 56(c)
is appropriate when, viewing the evidence in the light most
favorable
to
the
nonmovant,
the
court
determines
that
“the
pleadings, depositions, answers to interrogatories and admissions
on file, together with the affidavits, show that there is no
genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.”
A dispute of material
fact is “genuine” if the evidence would allow a reasonable jury to
find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).
Initially the movant bears the burden of identifying those
portions of the pleadings and discovery in the record that it finds
demonstrate the absence of a genuine issue of material fact on
which the nonmovant bears the burden of proof at trial; a “complete
failure of proof concerning an essential element of the nonmoving
party’s case necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lujan v.
National Wildlife Federation, 497 U.S. 871, 885 (1990); Edwards v.
Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998).
-2-
If the movant meets its burden and points out an absence of
evidence to prove an essential element of the nonmovant’s case on
which the nonmovant bears the burden of proof at trial, the
nonmovant must then present competent summary judgment evidence to
support the essential elements of its claim and to demonstrate that
there is a genuine issue of material fact for trial.
National
Ass’n of Gov’t Employees v. City Pub. Serv. Board, 40 F.3d 698, 712
(5th Cir. 1994).
“[A] complete failure of proof concerning an
essential element of the nonmoving party’s case renders all other
facts immaterial.”
not
rely
merely
Celotex, 477 U.S. at 323.
on
allegations,
denials
The nonmovant may
in
a
pleading
or
unsubstantiated assertions that a fact issue exists, but must set
forth specific facts showing the existence of a genuine issue of
material fact concerning every element of its cause(s) of action.
Morris v. Covan World Wide Moving, Inc,, 144 F.3d 377, 380 (5th Cir.
1998).
Conclusory
allegations
preclude summary judgment.
unsupported
by
evidence
will
not
National Ass’n of Gov’t Employees v.
City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d
1322, 1325 (5th Cir. 1996).
“‘[T]he mere existence of some alleged
factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment . . . .’”
State
Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990),
quoting Anderson v. Liberty Lobby, Inc.. 477 U.S. 242, 247-48
-3-
(1986).
“Nor is the ‘mere scintilla of evidence’ sufficient;
‘there must be evidence on which the jury could reasonably find for
the plaintiff.’”
Fifth
Circuit
Id., quoting Liberty Lobby, 477 U.S. at 252. The
requires
probative evidence.’”
the
nonmovant
to
submit
“‘significant
Id., quoting In re Municipal Bond Reporting
Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1978), and citing
Fischbach & Moore, Inc. v. Cajun Electric Power Co-Op., 799 F.2d
194, 197 (5th Cir. 1986).
“If the evidence is merely colorable,
or
probative,
is
not
granted.”
significantly
summary
judgment
may
be
Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th
Cir. 1999), citing Celotex, 477 U.S.
at 322, and Liberty Lobby,
477 U.S. at 249-50.
Allegations in a plaintiff’s complaint are not evidence.
Wallace
v.
Texas
Tech
Univ.,
80
F.3d
1042,
1047
(5th
Cir.
1996)(“[P]leadings are not summary judgment evidence.”); Johnston
v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir. 1995)(for the
party opposing the motion for summary judgment, “only evidence-–not
argument, not facts in the complaint--will satisfy’ the burden.”),
citing Solo Serve Corp. v. Westown Assoc., 929 F.2d 160, 164 (5th
Cir. 1991).
The nonmovant must “go beyond the pleadings and by
[his] own affidavits, or by depositions, answers to interrogatories
and admissions on file, designate specific facts showing that there
is a genuine issue of material fact for trial.”
-4-
Giles v. General
Elec. Co., 245 F.3d 474, 493 (5th Cir. 2001), citing Celotex, 477
U.S. at 324.
The court must consider all evidence and draw all inferences
from
the
factual
nonmovant.
record
in
the
light
most
favorable
to
the
Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S.
574, 587 (1986); National Ass’n of Gov’t Employees v. City Pub.
Serv. Board, 40 F.3d at 712-13.
It is well established in the Fifth Circuit that “[a] federal
court may not grant a ‘default’ summary judgment where no response
has been filed.”
Bradley v. Chevron U.S.A., Inc., No. Civ. A.
204CV092J, 2004 WL 2847463, *1 (N.D. Tex. Dec. 10, 2004), citing
Eversley v. MBank of Dallas, 843 F.2d 172, 174 (5th Cir. 1988);
Hibernia Nat. Bank v. Administracion Cent. Sociedad Anonima, 776
F.2d 1277, 1279 (5th Cir. 1985).
Nevertheless, if no response to
the motion for summary judgment has been filed, the court may find
as undisputed the statement of facts in the motion for summary
judgment.
Eason,
258
Id. at *1 and n. 2, citing id.; see also Thompson v.
F.
Supp.
2d
508,
515
(N.D.
Tex.
2003)(where
no
opposition is filed, the nonmovant’s unsworn pleadings are not
competent summary judgment evidence and movant’s evidence may be
accepted as undisputed).
See also Unum Life Ins. Co. of America v.
Long, 227 F. Supp. 2d 609 (N.D. Tex. 2002)(“Although the court may
not enter a ‘default’ summary judgment, it may accept evidence
submitted by [movant] as undisputed.”); Bookman v. Shubzda, 945 F.
-5-
Supp. 999, 1002 (N.D. Tex. 1996)(“A summary judgment nonmovant who
does not respond to the motion is relegated to [his] unsworn
pleadings, which do not constitute summary judgment evidence.”).
In relevant parts, Federal Rule of Civil Procedure 36(a)
provides,
A party may serve on any other party a written request to
admit for purposes of the pending action only, the truth
of any matters within the scope of Rule 26(b)(1) relating
to: (A) facts, the application of the law to fact, or
opinions about either; and (B) the genuineness of any
described documents. . . . A matter is deemed admitted
unless, within 30 days after being served, the party to
whom the request is directed serves on the requesting
party a written answer or objection addressed to the
matter and signed by the party or its attorney. . . .
Under
Rule
36(b),
“A
matter
admitted
under
this
rule
is
conclusively established unless the court, on motion, permits the
admission to be withdrawn.”1
Applicable Law
Title 47 U.S.C. § 605(a) of the Cable Communications Policy
Act2 prohibits unauthorized interception of satellite TV signals
for one’s “own benefit or for the benefit of another not entitled
1
Plaintiff has filed two Notices of Facts Deemed Admitted (#16
and #17), without responses from Defendants to either the requests
for admission or the Notices.
Therefore those admissions are
deemed admitted and they fully support DTV’s claims in this action.
See also #18-6, Affirmation of DTV’s attorney, Julie Cohen Lonstein
at pp. 4-6 and Ex. A (#18-7).
2
As amended by The Satellite Home Viewer Act of 1988, Pub. L.
100-667, 102 Stat. 3959-60.
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thereto.” DIRECTV, Inc. v. Webb, 545 F.3d 837, 844 (9th Cir. 2006).
Section 605(e)(4) provides,
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 fined not more than
$500,000 for each violation, or imprisoned for not more
than 5 years for each violation, or both.
Section 605(e)(3)(A) provides a civil action for violation of §
605(a) or § 605(e)(4):
“Any person aggrieved by any violation of
[§ 605(a) or § 605(e)(4)] may bring a civil action in a United
States
district
court
or
in
any
other
court
of
competent
jurisdiction.” Under § 605(d)(6), “the term ‘any person aggrieved’
shall include any person with proprietary rights in the intercepted
communication by wire or radio, including wholesale or retail
distributors of satellite cable programming . . . .”
Thus DTV has
standing to sue as a person aggrieved by piracy of its Satellite
Programming by an unauthorized, non-licensed establishment.
As for damages, 47 U.S.C. § 605(e)(3)(B) provides, “The court–
(I) may grant temporary and final injunctions on such
terms as it may deem reasonable to prevent or restrain
violations of subsection (a) of this section;
(ii) may award damages as described in subparagraph (C);
and
(iii) shall direct the recovery of full costs, including
awarding reasonable attorneys’ fees to an aggrieved party
who prevails.
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Under § 605(e)(3)(C)(I) “Damages awarded by any court under this
section shall be computed, at the election of the aggrieved party,
in accordance with either of the following subclauses”:
(I) the party aggrieved may recover the actual
damages suffered by him as a result of the
violation and any profits of the violator that are
attributable to the violation which are not taken
into account in computing actual damages; in
determining the violator’s profits, the party
aggrieved shall be required to prove only the
violator’s gross revenue, and the violator shall be
required to prove his deductible expenses and the
elements of profit attributable to factors other
than the violation; or
(II) the party aggrieved may recover an award of
statutory damages for each violation of subsection
(a) of this section involved in the action in a sum
of not less that $1,000 or more than $10,000, as
the court considers just, and for each violation of
paragraph (4) of this subsection involved in the
action an aggrieved party may recover statutory
damages in a sum of not less than $10,000, or more
that $100,000, as the court considers just.
(ii) In any case in which the court finds that the
violation was committed willfully and for the purposes of
direct or indirect commercial advantage or private
financial gain, the court in its discretion may increase
the award of damages, whether actual or statutory, by an
amount of not more than $100,000 for each violation of
subsection (a) of this section.
(iii) In any case where the court finds that the violator
was not aware and had no reason to believe that his acts
constituted a violation of this section, the court in its
discretion may reduce the award of damages to a sum of
not less than $250.
The
Federal
Wiretap
Act,
18
U.S.C.
§
2511(1)(a),
also
proscribes signal piracy, making it unlawful for “any person” to
intercept “any wire, oral, or electronic communications,” including
-8-
satellite television signals.
direct
evidence
“[c]ircumstantial
of
The Fifth Circuit has ruled that
signal
evidence
piracy
can
support
is
not
a
required:
finding
that
a
communication was intercepted, even absent direct evidence.”
DIRECTV, Inc. v. Robson, 420 F.3d 532, 537 (5th Cir. 2005).
Although the Federal Wiretap Act is primarily a criminal
statute, civil damages may be recovered by “any person whose wire,
oral, or electronic communication is intercepted, disclosed, or
intentionally used in violation of this chapter” from “the person
or entity . . . which engaged in that violation” under 18 U.S.C. §
2520(a)
and
(b),
“as
may
be
appropriate.”
Section
2520(b)
provides,
In an action under this section, appropriate relief
includes-—
(1) such preliminary and other equitable
declaratory relief as may be appropriate;
(2) damages under subsection (c)
damages in appropriate cases; and
(3) a reasonable attorney’s fee
litigation costs reasonably incurred.
and
or
punitive
and
other
Damages are computed as set out in § 2520(c)(2) where the
wrongful conduct is of a viewing of a scrambled or encrypted
satellite video transmission:
“the 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
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(B) statutory damages of whichever is the greater of $100
a day for each day of violation or $10,000.
Allegations of Plaintiff’s Original Complaint (#1)
Plaintiff DTV is a major distributor of satellite programming
in the United States and provides interstate direct broadcast
satellite programming to subscribers with specialized receiving
equipment, who pay a subscription fee for programming and obtain a
programming license from DTV in return.
DTV holds the proprietary
rights to the Satellite Programming that it transmits, and is the
owner of and/or lawfully designated distribution agent for that
Satellite Programming.
DVT contends that David Herrera (“Herrera”) is an officer,
director,
registered
shareholder,
agent
and/or
for,
principal
Dario’s
of,
Restaurant,
as
Inc.
well
d/b/a
as
the
Dario’s
American Cuisine, located at 14315 Cypress Rosehill Road, Cypress,
Texas
77429,
a
commercial
establishment,
and
had
supervisory
control over internal operating procedures, employment practices,
and activities occurring in the restaurant on October 4, 2012.
Herrera lives at 14302 Floret Estates Court, Cypress, Texas 77429.
DTV
encrypts
unauthorized
its
entities
and
satellite
persons
transmissions
from
viewing
to
its
prevent
Satellite
Programming. For a payment of a subscription or licensing fee, DTV
authorizes and enables a subscriber to unscramble and receive its
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Satellite Programming in both homes and commercial establishments,
which are charged different rates. Because the reception equipment
can be moved from a residence, which has a cheaper rate, to a
commercial
establishment
without
commercial
establishments
who
DTV’s
want
to
knowledge,
use
owners
DTV’s
of
Satellite
Programming for their own financial benefit can secretly obtain
access
to
subscribing
that
programming
under
a
without
residential
proper
account
and
authorization
then
moving
by
the
equipment to their businesses.
The complaint charges that on or about October 4, 2012,
Defendants,
without
without
paying
for
permission
their
or
authorization
commercial
from
establishment’s
DTV
right
and
to
receive, broadcast, use or display DRV’s Satellite Programming,
willfully received and displayed DTV’s Satellite Programming to the
public for commercial benefit or financial gain at Dario’s American
Cuisine in violation of 18 U.S.C. §§ 2511 and 2512, 47 U.S.C. §
605, and Texas law.
The complaint further asserts that Plaintiff
has been damaged in being denied subscription fees for commercial
use of DTV’s Satellite Programming, in reduced sales revenues
because of Defendants’ unfair competition, and in the impairment of
DTV’s proprietary rights in the Satellite Programming, good will,
and
reputation,
while
Defendants
have
profited
and
gained
commercial advantage for the unauthorized and willful use of the
Satellite Programming.
-11-
In addition to injunctive relief for willful violations with
the purpose of direct or indirect commercial advantage and private
financial gain under 18 U.S.C. § 2520(b)(1) and 47 U.S.C. §
605(e)(3)(B)(1), Plaintiff prays for the following damages:
(1)
statutory damages in an amount of the greater of $10,000 or $100
per day for each day Defendants violated 18 U.S.C. § 2511, or,
alternatively, actual damages equal to any profits attributable to
Defendants’ violations of 18 U.S.C. § 2511; (2) statutory damages
in
an
amount
of$
10,000
for
each
violation
of
47
U.S.C.
§
605(e)(3)(C)(ii), or alternatively, actual damages plus damages
equal to any profits attributable to the Defendants’ violations of
47 U.S.C. § 605; (3) punitive damages for wrongful conversion of
DTV’s Satellite Programming.
Plaintiff also seeks an award of
reasonable attorney’s fees and expenses for the prosecution of this
suit, and pre- and post-judgment interest.
Plaintiff’s Motion for Summary Judgment (#18)
An affidavit (#18-1) from Kent Madder, Vice President of Risk
Management for DTV,3 explains that DTV’s residential and commercial
subscribers use the same receiving equipment to receive DTV’s
programming signals.
As a result, if a commercial establishment
seeks to surreptitiously pirate the signals, it can intentionally
and fraudulently move satellite hardware issued on a residential
3
See also #18-6, Affirmation of Julie Cohen Lonstein, attorney
for DTV.
-12-
account to its commercial establishment without DTV’s knowledge and
then
use
that
substantially
residential
lower
account
residential
agreement with DTV.
to
prices
receive
in
programming
violation
of
at
its
DVT alleges that Defendants did so here,
moving the receiving equipment from David Herrera’s home to Dario’s
American Cuisine, where it received DTV’s programming signals ast
the
much
lower
residential
rate
in
violation
of
Herrera’s
residential agreement with DTV.
To prevent such misappropriation, DTV employs investigators
and auditors to identify such violators.
DTV’s broadcast center
inserts a graphic, known as a “watermark” or “bug” (Ex. A),
authorized
solely
for
use
with
a
DTV
broadcast,
during
the
broadcast of certain programming and periodically inserts the
watermark on a particular programming event at scheduled times
during the broadcast.
If an investigator and/or auditor sees the
watermark, he knows he is watching a DTV program.
Thus when a on-
site audit reveals the showing of DTV programming in a commercial
establishment that is not authorized for it on a DTV commercial
account, it is proof that the establishment is receiving the
programing without authorization.
Such was the case when on
October 4, 2012, DTV auditor Keith Howse visited Dario’s American
Cuisine at 8:40 p.m. and observed a single television set in the
restaurant exhibiting DTV programming for public viewing, which
exhibited the watermark.
Dario’s Cuisine has an estimated fire
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code occupancy of 50-100 people.
See Exhibit B, Howse Affidavit;
and Exhibit C (#119), video disc with video of the auditor’s
observations, including the watermark, and photographs taken by
Howse.
After receiving the auditor’s report, DTV searched its records
and determined there was no commercial account for Dario’s American
Cuisine, located at 14315 Cypress Rosehill Road, Cypress, Texas
77429,.
There was a residential account, number 016895570, in the
name of David Herrera at his home address, 14307 Floret Estates
Court, Cypress, Texas 77429-458507, activated on February 20, 2004,
purchased at a residential rate.
The affiant states he has
personal knowledge that the account records for Herrera and
Dario’s American Cuisine (Ex. D) are authentic and accurate. After
reviewing the report, DTV’s Risk Management Department disconnected
programming service for residential account number 016895570 on
October 24, 2012.
Court’s Decision
The elements of a claim for conversion under Texas law are
“‘(1) plaintiff owned, had legal possession of, or was entitled to
possession of the property; (2) defendant assumed and exercised
dominion
and
control
over
the
property
in
an
unlawful
and
unauthorized manner, to the exclusion of and inconsistent with
plaintiff’s rights; (3) plaintiff made a demand for the property;
and (4) defendant refused to return the property.’”
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Alan Reuber
Chevrolet, Inc. v. Grady Chevrolet, Ltd., 287 S.W. 3d 877, 888
(Tex. App.-Dallas 2009, no pet.), citing Ojeda v. Wal-Mart Sores,
Inc., 956 S.W. 2d 704, 707 (Tex. App.-San Antonio 1997, pet.
denied).
Because DTV does not directly address this claim in its
motion, especially the last two elements, the Court does not grant
summary judgment on it.
After reviewing the record and the applicable law, the Court
concludes
the
evidence
that
officer,
director,
Restaurant,
Restaurant
DTV
has
shown
Defendants
Inc.
d/b/a
with
David
Herrera,
shareholder,
d/b/
Dario’s
Dario’s
uncontroverted
and/or
American
American
documentary
individually
and
as
principal
of
Dario’s
Cuisine,
and
Dario’s
Cuisine
have
willfully
and
knowingly violated the Federal Communications Act, 47 U.S.C. § 605,
and the Federal Wiretap Act,, 18 U.S.C. §§ 2511.
Defendants have
failed to respond and thus failed to meet their burden to raise a
genuine issue of material fact for trial.
Moreover they have
admitted through their failure to respond to requests for admission
that they willfully, knowingly, and without authorization from DTV
exhibited Plaintiff’s Satellite Programming at Dario’s American
Cuisine on October 4, 2012 for their direct financial benefit.
Accordingly, the Court
ORDERS that DVT’s motion for summary judgment is GRANTED as to
the statutory causes of action.
The Court further
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ORDERS that DVD shall submit within twenty days an appropriate
motion and affidavit for reasonable fees and costs with supporting
documentary evidence and a proposed final judgment.
Defendants
shall then have ten days to respond to both.
SIGNED at Houston, Texas, this
5th
day of
November , 2014.
___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE
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