DirecTV, Inc. v. Ferguson

328 F. Supp. 2d 904, 2004 U.S. Dist. LEXIS 14484, 2004 WL 1737465
District Court, N.D. Indiana·Decided June 23, 2004·No. 1:03CV164·Published·Cited by 1 cases

Opinion

MEMORANDUM AND ORDER

ALLEN SHARP, District Judge.

Plaintiff, DIRECTV, Inc. (‘DIRECTV”) brought this action against Defendants Kevin Hinz (“Hinz”), Les Smith (“Smith”), Cynthia Stockrahm (“Stockrahm”), or collectively (“Defendants”) and others for claims arising out of their alleged trafficking of various devices enabling their customers to pirate DIRECTV’S satellite television signal. Defendants Hinz, Smith, and Stockrahm have each admitted that they purchased the devices at issue, and resold those same devices to others. These Defendants assert that they are entitled to summary judgment based on their assertion that they never personally intercepted DIRECTV’s signal. They also claim that they are entitled to summary judgment based on the fact that the pirate access devices they sold were not exclusively designed for pirating of satellite signals. Defendants also make three purely legal arguments for dismissal with regard to certain federal claims. First, Defendants assert that DIRECTV has no standing to sue under 17 U.S.C. § 1201(a)(2), because it is not a “person injured” under 17 U.S.C. § 1203(a). Second, Defendants assert that DIRECTV has no standing under 47 U.S.C. § 605(e)(4), because this provision does not apply to direet-to-home satellite services, but only to satellite cable programming. Third, Defendants assert that there is no private cause of action under 18 U.S.C. § 2512. Finally, Defendants raise a series of challenges to DIRECTV’s state law claims.

Before beginning the analysis of the pending motions for summary judgment now before this Court, there are a few other pending motions that need to be addressed. On or about March 8, 2004, DIRECTV filed a motion to strike portions of the affidavits of Hinz, Smith and Stock-rahm. The affidavits submitted by the *907 Defendants appear to be based upon their personal knowledge of the relevant facts as known to them. DIRECTV has presented its own evidence to attempt to refute such statements. Therefore, this Court sees no reason to strike portions of the Defendants’ affidavits. Therefore DIRECTV’s motion to strike (Doc. # 66) is DENIED.

On or about April 22, 2004, the Defendants filed their own motion to strike. Specifically, the Defendants objected to the opinions contained in the declarations and reports of Michael Barr, Larry Ris-sler, and Lacey Walker, DIRECTV’s designated experts. The Defendants argue that the experts designated by DIRECTV are not qualified to testify as such. However, in reading the affidavits of Barr, Rissler, and Walker, this Court cannot agree. This Court will allow the testimony in the affidavits to remain to the extent that such testimony is relevant and substantiated and in accord with Rule 702 of the Federal Rules of Evidence. The Defendants’ motion (Doc. # 80) is therefore DENIED.

It should also be noted that the stipulation and order of dismissal regarding Defendant Tom Nastovski (Doc. # 85) is no longer pending due to the Order issued on or about May 17, 2004 (Doc. # 88). Likewise, the motion to stay filed by Defendant Robert Welch Jr. (Doc. # 91) is no longer pending due to the Order issued on or about May 25, 2004 (Doc. # 92) granting such motion to stay.

I. Background

DIRECTV is the nation’s leading direct broadcast satellite system. See Declaration of Larry Rissler (“Rissler Decl.”), ¶ 2. DIRECTV delivers hundreds of channels of satellite television programming to more than 12 million subscribing households nationwide. Id. DIRECTV’s satellite television signal is encrypted — electronically scrambled — to prevent unauthorized reception. In order to receive and view DIRECTV signals, a person needs certain hardware, including a DIRECTV satellite dish, a DIRECTV receiver (also known as an integrated receiver/decoder or IRD), and a DIRECTV Access Card. Id. at ¶ 3; see Declaration of Michael Barr, dated March 8, 2004 (“Barr Decl.”) at ¶ 2. Paying customers of DIRECTV obtain this equipment, and the connecting cables and cords, at highly subsidized prices or for free. Rissler Decl. at ¶ 3.

The DIRECTV Access Card, which contains information unique to that card, is a credit-card shaped device containing a small microprocessor chip that is inserted into a DIRECTV receiver. Id. Every DIRECTV Access Card contains a reprogrammable microprocessor developed exclusively for the DIRECTV satellite system. Id. at ¶ 4. The Access Card enables the subscriber’s IRD to decrypt DIRECTV’S satellite signals and permit program viewing in accordance with the subscriber’s authorized subscription package and pay-perview purchases. See id.; Barr Decl. at ¶ 3. The Access Card uses “sma# card” technology (1) to control which DIRECTV programming a subscriber receives based upon the programming specifically purchased by the subscriber, and (2) to capture and transmit to DIRECTV’s broadcast centers the subscriber’s pay-per-view purchases. Rissler Decl. at ¶ 4.

As such, the Access Card is a key component in DIRECTV’s security and accounting system. Rissler Decl. at ¶ 4. DIRECTV sells its programming in subscription packages. Id. at ¶ 5. By choosing a subscription package, a customer agrees to pay a monthly subscription fee, and DIRECTV authorizes the customer’s DIRECTV Access Card to decrypt DIRECTV’s satellite transmissions to allow the channels in the requested subscription package to be viewed by the customer. *908 Id. In addition, customers have the option of ordering pay-per-view programming, for which DIRECTV charges an additional per-program fee. Id.; see Barr Decl. at ¶ 4.

Defendant Hinz

Defendant Hinz previously operated a computer business which sold programmers. (Hinz Dep. p. L). The programmers Defendant purchased were ISO 7816 programmers. (Hinz Dep. p. L). Defendant Hinz claims that none of the smart card programmers he sold were designed to intercept DIRECTV signals. In fact, Hinz claims smart card programmers are incapable of decrypting DIRECTV signals. (Hinz Aff. ¶ 11).

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DirecTV, Inc. v. Ferguson, 328 F. Supp. 2d 904, 2004 U.S. Dist. LEXIS 14484, 2004 WL 1737465 (N.D. Ind. 2004).

328 F. Supp. 2d 904 (DirecTV, Inc. v. Ferguson) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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