United States District Court, N.D. Illinois
January 23, 2004.
DIRECTV, INC., Plaintiff, JOE ALLEN, et al., Defendants
The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Directv, Inc. ("Directv"), a direct broadcast satellite
television system, has filed a five-count complaint against defendants
for allegedly purchasing by mail and possessing and/or using equipment
capable of receiving and decrypting Directv's satellite broadcast signal
without permission from or payment to Directv. Count III of the complaint
alleges that defendants violated provisions of 18 U.S.C. § 2512 and
is brought under 18 U.S.C. § 2520. Count V of the complaint alleges
common-law conversion. Defendant Gilbert Ariaz (hereinafter "defendant")
now moves to dismiss Counts III and V. For the reasons stated below, the
court grants the motion.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
challenges the sufficiency of the complaint for failure to state a claim
upon which relief may be granted. General Elec. Capital Corp. v.
Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997).
Dismissal is appropriate only if it appears beyond a doubt that the
plaintiff can prove no set of facts in support of his claim that would
entitle him to relief. Conley v. Gibson, 355 U.S. 41,
45-46(1957); Kennedy v. Nat'l Juvenile Det. Ass'n, 187 F.3d 690,
695 (7th Cir. 1999). In ruling on the motion, the court accepts as true
all well pleaded facts alleged in the complaint, and it draws all
reasonable inferences from those facts in favor of the plaintiff.
Jackson v. E.J. Brach Corp., 176 F.3d 971, 977 (7th
Cir. 1999); Zemke v. City of Chicago, 100 F.3d 511, 513 (7th
1. Private Right of Action under 18 U.S.C. § 2512
Count III seeks to recover damages for alleged violations of
18 U.S.C. § 2512(1)(b). This section provides that a person commits a federal
crime if he intentionally
manufactures, assembles, possesses, or sells any
electronic, mechanical, or other device, knowing
or having reasons to know that the design of such
device renders it primarily useful for the purpose
of the surreptitious interception of wire, oral,
or electronic communications. . . ."
Directv also alleges in Count II that the defendants actually
intercepted Directv's communications in violation of
18 U.S.C. § 2511. Accordingly, Count III constitutes an independent cause of
action only if Directv can recover for the defendant's mere possession (or
manufacture, possession or sale) of a prohibited device, without proof
that the defendant participated in actual interception, disclosure, or
use of an electronic communication. See Directv v.
Beecher, F. Supp.2d , 2003 WL 23094715, at *1
(S.D. Ind. Nov. 7, 2003).
Section 2512 is a criminal statute and by itself does not allow a
private party to recover damages for behavior that violates its terms. To
support its claim for civil remedies on both
Count II and Count III, Directv relies on 18 U.S.C. § 2520(a),
which provides, in pertinent part, that
[A]ny person whose . . . electronic
communication is intercepted, disclosed, or
intentionally, or intentionally used in violation
of this chapter may in a civil action recover from
the person or entity, other than the United
States, which engaged in that violation such
relief as may be appropriate.
In his motion to dismiss Count III, defendant contends that §
2520(a) does not provide a private right of action for violations of
§ 2512. Defendant relies primarily on Flowers v. Tandy
Corp., 773 F.2d 585
(4th Cir. 1985). In Flowers, the Fourth
Circuit held that § 2520(a) "expressly limits those against whom
private action lies to the person who `intercepts, discloses, or
uses . . . such communication.'" Id. at 588. The court reasoned
that a broad construction of § 2520(a) would support a civil action
against those who violate § 2512 (manufacture, assembly, possession,
or sale of a prohibited device) but who do not actually intercept
electronic communications in violation of § 2511. Id. at
589. The court held that the plain language of the § 2520(a) did not
support such an outcome and, thus, held that § 2520(a) does not
provide a private cause of action for violations of § 2512.
Directv argues that § 2520 provides a private cause of action for
any "violation of this chapter," which includes § 2512. Directv seeks
support for this view in Oceanic Cablevision, Inc. v. M.D.
Elec., 771 F. Supp. 1019 (D. Neb. 1991). In Oceanic, the
court was faced with a 12(b)(6) challenge to two counts of a complaint
against a distributor of cable descramblers: one premised on § 2511
and another premised on § 2512. In its analysis of the viability of
the § 2511 count, the court concluded that the plaintiff had not
stated a cognizable claim because the distributor was not alleged to have
engaged in any of the activities listed in § 2520-interception,
disclosure, or use. Id. at 1027-28.
The Oceanic court questioned the continued vitality of
Flowers, noting that it was decided at a time when § 2520
contained language that directly mirrored the activities listed in §
2511, including procurement of another to intercept, disclose, or use
another's communication. Id. at 1027. Subsequent to the decision
in Flowers, Congress amended § 2520 to eliminate any mention
of civil liability based on procuring interception, disclosure, or use.
The Oceanic court attempted to capture the different situations
by stating, "Clearly, § 2520 only confers a private cause of action
upon persons when the action is brought against parties that have
violated the provisions of §§ 2510-2521." Id. The court
ignored the fact that this statement is not accurate even in the limited
context of § 2511 actions. The removal of the reference to procuring
another person to intercept, disclose, or use another's communication
from § 2520 was not accompanied by a removal of analogous language
from § 2511; a person who procures another to perform the acts
prohibited by § 2511 still faces criminal liability, even though the
possibility of civil liability has clearly been eliminated. Directv,
Inc. v. Delaney, No. 03 C 3444, at 6 (N.D. Ill. Nov. 20, 2003).
However, the Oceanic court, in its subsequent discussion of a
private right of action under § 2512, took its preceding statement at
face value. The court's examination is limited solely to the issue of
whether the sale of cable descramblers, as opposed to some other device
more directly associated with wiretapping, constituted a violation of
§ 2512. The court concluded that because a cable descrambler could be
a device whose design "renders it primarily useful for the purpose of
surreptitious interception of wire, oral, or electronic communications,"
there must be a private right of action under § 2520 for violations
of § 2512. Id. at 1028-29. The
court reached this conclusion without any further analysis of
whether such a sale was equivalent to an interception, disclosure, or
intentional use of a communication in violation of the statute.
Delaney, No. 03 C 3444, at 6-7.
Later courts have followed in Oceanic's footsteps, relying on
the erroneous statement in that opinion that a violation of any of the
provisions of the Wiretap Act allow for the potential of civil recovery
under § 2520. See Directv v. EQ Stuff, Inc., 207 F. Supp. 1077,
1084 (C.D. Cal. 2002); Directv, Inc. v.
Gatsiolis, No. 03 C 3534, 2003 WL 22111097, at *4 (Sept. 10,
2003)(Coar, J.). This conclusion is contrary to the plain language of the
statute. Section 2520(a) authorizes relief only for a person "whose wire,
oral or electronic communication is intercepted, disclosed, or
intentionally used in violation of this chapter." Thus, the private right
of action attaches only after the fact of interception, disclosure or use
in violation of the Wiretap Act. Delaney, No. 03 C 3444, at 7.
After this initial act is complete, the aggrieved party may pursue civil
remedies against the person who "engaged in that violation." As a matter
of grammar and sentence structure, the phrase "that violation" must refer
to the interception, disclosure, or intentional use of a communication in
violation of this chapter referred to earlier in the sentence.
Directv v. Beecher, F. Supp.2d , 2003
WL 23094715 (S.D. Ind. Nov. 7. 2003). Section 2512 criminalizes only the
production, sale, or possession of devices whose primary purpose is to
perform the interception. These acts occur separate and apart from any
actual interception, and persons who engage in them may not engage in
violations cited in § 2520 interception, disclosure, or use
prohibited by the Wiretap Act. Delaney, No. 03 C 3444, at 7-8.
Thus, this court finds that § 2520 does not confer a private right of
action for violations of § 2512.
2. Common-Law Conversion
Defendant also moves to dismiss Count V, which purports to state a
claim for common-law conversion of its property. To state a claim for
conversion, Directv must allege that it has a right to the property, it
has an absolute and unconditional right to the immediate possession of
the property, it has made a demand for possession, and defendant has
wrongfully and without authorization assumed control, dominion, or
ownership over the property. Cirrincione v. Johnson,
184 Ill.2d 109, 114, 703 N.E.2d 67, 70 (Ill. 1998). Defendant argues
that the property at issue in this case-"digitized video and audio
signals"-are not a proper subject for a conversion claim. Defendant
relies on a statement of the Illinois Supreme Court in In re
Thebus that "an action for conversion lies only for personal
property which is tangible, or at least represented by or connected with
something tangible." 483 N.E.2d 1258, 1260 (Ill. 1985). In a more recent
case relating to alleged conversion of academic research, the Illinois
Appellate Court reaffirmed the principle that "conversion lies only for
personal property that is tangible or at least represented by something
tangible." Blut v. Northwestern University,
296 Ill. App.3d 42, 52, 692 N.E.2d 1327, 1334 (Ill.App. 1st Dist. 1998).
However, in at least one case, an Illinois court has stated explicitly
that "parties may recover for conversion of intangible assets."
Stathis v. Geldermann, Inc., 295 Ill. App.3d 844, 856,
692 N.E.2d 798, 807 (Ill.App. 1st Dist. 1998). The plaintiff in
Stathis alleged that the defendant deprived him of his ownership
and control of a corporation in a corporate merger/takeover transaction.
See id. After the alleged conversion, the plaintiff was unable
to control or benefit from the object of the conversion (the corporation)
and the defendant had full control over the object of the conversion. In
Conant v. Karris, the case from which Stathis drew
the principle that intangible property can be converted under
Illinois law, the object of the alleged conversion was certain
confidential information that the plaintiff obtained relating to a
specific property. 165 Ill. App.3d 783, 791-92, 520 N.E.2d 757, 763
(Ill.App. 1st Dist. 1987). The plaintiff relied on this confidential
information to offer a purchase price of $1,500,000 for the property, but
the plaintiff's agent disclosed the confidential information to the
agent's brother, who then purchased the property for $1,600,000.
Id. at 791, 520 N.E.2d at 762.
While both Stathis and Conant clearly demonstrate
that intangible property may sometimes be the object of conversion under
Illinois law, these cases are distinguishable on the facts from the
instant case. In Stathis and Conant, the plaintiffs
were deprived of the ability to benefit from the objects of the alleged
conversions because the defendants had assumed full control over the
objects. Here, however, Directv has not been deprived of the ability to
benefit from its satellite signals, nor has the defendant assumed
control, dominion, or ownership over those signals. Thus, the court holds
that Directv has failed to state a claim for conversion under Illinois
For the reasons stated above, the court grants defendant Gilbert
Ariaz's Motion to Dismiss Counts III and V (Motion No. 25).
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