United States District Court, N.D. Illinois
April 20, 2004.
DIRECTV, INC., Plaintiff,
PHIL HINTON, Defendant
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, DirecTv, Inc., filed suit against Defendant, Phil Hinton,
alleging that the Defendant purchased and used devices designed primarily
for the purpose of pirating DirecTv's satellite transmissions in
derogation of DirecTv's rights to receive compensation for receipt of its
signals. Plaintiff seeks civil damages in the form of actual or statutory
damages, as well as injunctive relief pursuant to 18 U.S.C. § 2512,
as set forth in Counts III of the Complaint. In addition, Plaintiff also
seeks damages for civil conversion in Count V of the Complaint.
Presently before the Court is Defendant's Motion to Dismiss Counts III
and V of Plaintiff s Complaint pursuant to Federal Rule of Civil
In reviewing a motion to dismiss, the court considers all facts alleged
in the complaint and any reasonable inferences drawn therefrom in the
light most favorable to the plaintiff. See Marshall-Mosby v. Corporate
Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000). A plaintiff is not
required to plead the facts or the elements of a claim, with the
exceptions found in Federal Rule of Civil Procedure 9. See Swierkiewicz
v. Sorema, 534 U.S. 506, 511 (2002); Walker v. Thompson, 288 F.3d 1005,
1007 (7th Cir. 2002) (Walker). Dismissal is warranted only if "it appears
beyond a doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The "suit should not be
dismissed if it is possible to hypothesize facts, consistent with the
complaint, that would make out a claim." Graehling v. Vill. of Lombard,
Ill., 58 F.3d 295, 297 (7th Cir. 1995).
A reading of the Complaint supports the following summary of the
alleged operative conduct of the parties.
DirecTv is a California-based company in the business of distributing
satellite television broadcasts throughout the United States. DirecTv
developed a satellite system capable of transmitting various digitized
video and audio signals to homes and businesses nationwide to be used for
entertainment purposes, also known as "satellite programming." DirecTv
relays digital signals from the United States to satellites orbiting many
miles above Earth. Those signals are then broadcast back to Earth where
fixed outdoor satellite dishes can receive DirecTv's satellite
programming. The satellite dish is connected by cable to an indoor
satellite receiver which is then connected by cable to a television
The signal beamed from space to various areas in the United States can
be received by installing a satellite dish and paying DirecTv a fee to
use its television broadcast services. DirecTv uses encryption technology
to digitally scramble the signal. The signal is unusable before it is
unscrambled. Each indoor satellite receiver contains a removable access
card that holds a computer-type chip that stores and applies the
information necessary to unscramble the satellite signals being received
through the satellite dish. DirecTv electronically programs these access
cards to close or open television channels based upon the particular
programming package a customer has purchased. The encryption technology used by DirecTv has not prevented the
development of devices and equipment (pirate access devices) which
provide the user with access to all of DirecTv's satellite programming
with no payment to the company.
On or about May 25, 2001, DirecTv, with the help of law enforcement,
obtained a substantial body of shipping records, email communications,
credit card receipts and other records confirming the existence of
distribution sources for the country-wide "transmission of devices
primarily designed for the unauthorized interception" of DirecTv's
satellite programming by use of private access devices.
Defendant is one of the purchasers of pirate access devices from a
member of the Fulfillment Pirate Group. The Defendant received the
satellite programming by means including but not limited to: (a)
maintaining satellite dishes capable of receiving satellite programming
on television monitors and further maintaining electronic devices which
enable the Defendant to unscramble, receive, and exhibit encrypted
satellite programming transmissions without authorization; and/or (b) by
such other means to effectuate the unauthorized reception of the
satellite programming which are unknown to DirecTv and known only to
Defendant contends that Count III of Plaintiff s Complaint should be
dismissed because, as a matter of law, 18 U.S.C. § 2520 does not
support a civil cause of action for violations of 18 U.S.C. § 2512.
In addition, Defendant contends that Count V of Plaintiff s Complaint
should be dismissed because the Plaintiff cannot state a cause of action
for the alleged conversion of satellite signals.
Count III alleges a private cause of action under Section 2512.
Specifically, the Defendant "possessed, manufactured, and/or assembled an
electronic, mechanical or other device," knowing, or having a reason to
know, that the design of such a device renders it primarily useful for
the interception of satellite television broadcasts in violation of Section
2512, and that DirecTv is entitled to damages under Section 2520, as a
result of defendant's violation of Section 2512.
Although it is a crime under Section 2512(1)(b) to manufacture,
assemble, possess or sell any device designed to intercept electronic
communications, such conduct does not subject a person to civil
liability, DirecTv, Inc. v. Cardona, 275 F. Supp.2d 1357, 1367 (M.D.
Fla. 2003). Only Section 2520(a) provides a private right of action for
"any person whose wire, oral, or electronic communication is
intercepted, disclosed, or intentionally used in violation of this
chapter" to seek damages from "the person or entity . . . which engaged
in that violation." 18 U.S.C. § 2520(a).
The plain and unambiguous language of Section 2520(a) limits those
against whom a private cause of action lies to persons who intercept,
disclose or use electronic communications. That class of persons does not
include manufacturers, assemblers, possessors, and sellers of satellite
decrypters. Flowers v. Tandy Corp., 773 F.2d 585, 588-89 (4th Cir.
1985); Cardona, 275 F. Supp.2d at 1367. Section 2520(a) does not, by its
express terms, incorporate Section 2512(1)(b) into its private cause of
action language. Flowers, 773 F.2d at 588-89; Cardona, 275 F. Supp.2d at
1362-70; DirecTv v. Amato, 269 F. Supp.2d 688, 689-91 (E.D. Va. 2003).
It is apparent that Congress expressly intended to create a private
cause of action by Section 2520(a). DirecTv, Inc. v. Westendorf, 2003 WL
22139786, *2. When Congress does so, an implied right of action may not
be inferred "without powerful support in the legislative history."
Comty. and Econ. Dev. Assoc. of Cook County v. Suburban Cook County Area
Agency on Aging, 770 F.2d 662, 666 (7th Cir. 1985). "Implied causes of
action are disfavored and should be found only where a statute clearly
indicates that the plaintiff is one of a class for whose benefit the
statute was enacted and there is some indication that Congress intended
such a cause of action to lie." Flowers, 773 F.2d at 589. Section 2520(a) includes the same particular language of the
criminal offenses set forth in Section 2511(1)(a) but specifically
excludes the language of Section 2512(1)(b) (i.e., "manufactures,"
"assembles," "possesses," and "sells"). Therefore, Section 2520(a), in
creating a private cause of action, must be construed to exclude that
type of conduct proscribed only in Section 2512(a)(b). Where "Congress
includes particular language in one section of a statute but omits it in
another section of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion or
exclusion." MBH Commodity Advisors, Inc. v. Commodity Futures Trading
Comm., 250 F.3d 1052, 1062 (7th Cir. 2001).
Moreover, nothing in the legislative history of Section 2520(a) or
Section 2512 indicates Congress intended to create an implied cause of
action beyond that expressly provided for in Section 2520(a).
Westendorf, 2003 WL 22139786 at 2. In light of the foregoing, there is
not a private cause of action, express or implied, under Section 2512, as
alleged in Count III. See Westendorf, 2003 WL 22139786 at 2; Cardona, 275
F. Supp.2d at 1368.
Count V for civil conversion alleges that Defendant has unlawfully
converted Plaintiff's property for the Defendant's use and benefit and
that such conversion was done intentionally and wrongfully by the
Defendant to deprive the Plaintiff of its proprietary interests and for
Defendant's direct benefit and advantage.
In Illinois, to state a claim for conversion, a plaintiff must allege:
(1) the defendant's unauthorized and wrongful assumption of control,
dominion or ownership over the plaintiff's personal property; (2) the
plaintiff's right in the property; (3) the plaintiff's right to immediate
possession of the property, absolutely and unconditionally; and (4) the
plaintiff's demand for possession of the property. General Motors
Corp. v. Douglass, 206 Ill. App.3d 881, 886 (1990). "Generally, a conversion action lies only for personal property which is
tangible, or at least represented by or connected with something
tangible." In re Thebus, 108 Ill.2d 255, 261 (1985) (Thebus). The subject
of a conversion action must be an identifiable object of property of
which the plaintiff has been wrongfully deprived, permanently or for an
indefinite period of time. Thebus, 108 Ill.2d at 261. The Illinois
Appellate Court has recently re-stated the tangible property principle set
out in Thebus in Bilut v. Northwestern University, 296 Ill. App.3d 42, 52
(1998) (Bilut). "Our Supreme Court has stated that an action for
conversion lies only for personal property that is tangible, or at least
represented by or connected with something tangible." Bilut, 296 Ill.
App.3d at 52.
In 1998, the Illinois Appellate Court recognized an action for
conversion of intangible assets as legally cognizable. Stathis v.
Geldermann, Inc., 295 Ill. App.3d 844, 856 (1998) (Stathis). The court in
Stathis held that the plaintiff could state a claim for conversion of
ownership and control of a corporation in a corporate merger/takeover
transaction. Stathis, 295 Ill. App.3d at 856. Stathis relied upon Conant
v. Karris, 165 Ill. App.3d 783 (1987), where confidential information was
the subject of the conversion, to extract the principle that intangible
property could be an object of conversion under Illinois law. While these
two cases do not settle whether intangible property can be the object of
conversion under Illinois law, the plaintiff's in both cases were clearly
deprived of the ability to obtain any benefit from the objects of the
In this case, the Plaintiff continued to benefit from its encrypted
satellite signals during the entirety of the Defendant's alleged wrongful
misappropriation. Plaintiff was not deprived of its encrypted satellite
signal permanently or for an indefinite period of time. Accordingly,
Count V is dismissed. See DirecTv, Inc. v. Maraffino, 2004 WL 170306
(N.D. Ill. Jan. 23, 2004);DirecTv, Inc. v. Alien, 2004 WL170328 (N.D. Ill. Jan. 23 2004); DirecTv, Inc. v.
Patel, 2003 WL 22682443 (N.D. Ill. Nov. 12, 2003); DirecTv, Inc. v.
Geenen, 2003 WL 22669029 (N.D. Ill. Nov. 10, 2003) (collectively finding
no cause of action for conversion under Illinois law for intercepted
For the foregoing reasons, Defendant's Motion to Dismiss Counts III and
V is granted. Counts III and V of Plaintiff's Complaint are dismissed
© 1992-2004 VersusLaw Inc.