Kingvision v. 898 Belmont Inc

• Court: Court of Appeals for the Third Circuit
• Decided: April 27, 2004
• Docket: 02-1770
• Status: Published

Opinion

Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit

4-27-2004

Kingvision v. 898 Belmont Inc Precedential or Non-Precedential: Precedential

Docket No. 02-1770

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Recommended Citation "Kingvision v. 898 Belmont Inc" (2004). 2004 Decisions. Paper 739. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/739

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. PRECEDENTIAL Marcus W. Corwin, P.A. UNITED STATES COURT OF 7777 Glades Road, Suite 208 APPEALS Boca Raton, FL 33424 FOR THE THIRD CIRCUIT Counsel for Appellants

No: 02-1770 ____ Donald M. Moser, Esquire (Argued) Washington West Building KINGVISION PAY-PER-VIEW, 235 South 8th Street CORP., LTD., Philadelphia, PA 19106-3519

Appellant Counsel for Appellees v.

898 BELMONT, INC., d/b/a EL TORO BAR; OPINION BERHANU DEGIFE ___________________ ROTH, Circuit Judge: Appeal from the United States District Court for the Eastern District of Pennsylvania Once again, we must determine (D.C. Civil Action No. 01-cv-02970) what statute of limitations to apply when a District Judge: Honorable Berle M. federal statute does not specify a Schiller limitations period. In this case, involving _______________ the Federal Communications Act (FCA), KingVision claims that defendants Argued on March 4, 2003 exhibited a closed circuit telecast through the use of an illegal decoding device. The Before: ROTH, BARRYand FUENTES District Court applied the two year CIRCUIT JUDGES limitations period of the Pennsylvania cable piracy statute instead of the three (Filed: April 27, 2004) year limitations period of the Copyright Act. We hold that the two year state Francine R. Strauss, Esquire (Argued) limitations period does apply to 11917 Gainsborough Road KingVision’s FCA claims because the Potomac, MD 20854 Pennsylvania piracy statute is directly analogous to § 553 of the FCA and neither Bradley H. Trushin, Esquire

1 the “practicalities of litigation” nor federal for Judgment on the Pleadings on the policy or law are frustrated by such ground that the Complaint was filed after application. See North Star Steel Co. v. the expiration of the two year state Thomas, 515 U.S. 29, 34-35 (1995); Reed limitations period applicable to the v. Transp. Union, 488 U.S. 319, 327 Pennsylvania cable piracy statute, 18 Pa. (1989). Accordingly, we will affirm the Con. Stat. § 910, as specified in 42 Pa. decision of the District Court granting Cons. Stat. § 5524(7) for actions not defendants’ Motion for Judgment on the otherwise subject to a specific limitations Pleadings and dismissing all claims against period. defendants. The District Court applied the two I. Facts and Procedural History year statute of limitations of § 5524(7) and dismissed KingVision’s claims as time- Plaintiff KingVision, a licensee of barred. KingVision Pay-Per-View, Ltd. v. sports programming, sued defendants 898 898 Belmont, Inc., No. 01-2970, 2002 U.S. Belmont, Inc., d/b/a the El Toro Bar, and Dist. LEXIS 2275, at *8 (E.D. Pa. Feb. 13, Berhanu Degife, its owner and operator, in 2002). On February 24, 2002, KingVision the District Court for the Eastern District filed a timely Motion for Reconsideration, of Pennsylvania under 47 U.S.C. §§ 553 arguing that the Copyright Act more (unauthorized reception of cable service) closely parallels the piracy sections of the and 605 (unauthorized publication or use FCA, so that the limitations period of the of communications), the “piracy statutes” Copyright Act should be applied instead of of the FCA, as amended by the Cable the state limitations period. KingVision’s Communications Policy Act of 1984. It is motion was denied on March 8, 2002, and uncontested that on March 13, 1999, this appeal followed. without KingVision’s authorization, the El Toro Bar intercepted and broadcast the III. Jurisdiction and Standard of E v a n d e r H o l y f ie l d / L e n no x Le w is Review cham pion ship boxing match and The District Court had jurisdiction “associated undercard bouts” to its to hear this case pursuant to 28 U.S.C. §§ patrons. It is also uncontested that 1331, as it is a civil action arising under KingVision did not provide defendants the laws of the United States. We have with the decoding equipment or the jurisdiction pursuant to 28 U.S.C. § 1291, satellite coordinates necessary to receive because the District Court’s February 14, the signal, nor did KingVision receive a 2002, order is final and appealable. sublicense fee or revenue from El Toro Bar for patron admissions to the broadcast. We review de novo the District KingVision wrote to the El Toro Bar about Court’s dismissal of the case on statute of the unauthorized broadcast in April 1999 limitations grounds. See Lake v. Arnold, but failed to bring suit until June 2001. 233 F.3d 360, 365 (3d Cir. 2000) Defendants filed an Answer and a Motion

2 IV. Discussion analogous state statutes of limitations for federal laws that do not provide them. Determining the statute of North Star, 515 U.S. at 34, 37 (Scalia, J., limitations period for activity governed by concurring). Thus, while courts are not a federal statute is a question of federal required to choose a state statute of law. Nevertheless, as recognized by the limitations period, they generally choose a Supreme Court in North Star Steel Co. v. state limitations period “as a matter of Thomas, 515 U.S. 29 (1995), when a interstitial fashioning of remedial details federal statute fails to provide a statute of under the respective substantive federal limitations, a court should look to statutes.” DelCostello, 462 U.S. at 160. analogous state statutes. The Court stated, “our practice has left no doubt about the In North Star, the Supreme Court lender of first resort. Since 1830, ‘state notes two exceptions to this rule. First, 28 statutes have repeatedly supplied the U.S.C. § 1658 provides a general, four- periods of limitations for federal causes of year limitations period for federal statutes action’ when the federal legislation made passed after December 1, 1990, that do not no provision.” Id. at 34 (citing Automobile contain their own limitations period. Id. at Workers v. Hoosier Cardinal Corp., 383 34 n.*. Section 1658 is not at issue here, U.S. 696, 703-704 (1966)). The rule is however, since the FCA was passed in that “courts look to the state statute ‘most 1934, and the Cable Communications closely analogous’ to the federal Act in Policy Act amendments were passed in need.” Id.; Reed v. Transp. Union, 488 1984. U.S. 319, 323 (1989); DelCostello v. Second, a court may turn to a Teamsters, 462 U.S. 151, 158 (1983). 1 limitations period provided within an The reason for this judicially-created rule analogous federal statute when the state is that Congress has an “appropriate” and limitations periods would “‘frustrate or “realistic” expectation that, given long- interfere with the implementation of standing practice, courts will look to national policies’. . . or be ‘at odds with the purpose or operation of federal 1 substantive law.’” Northstar, 515 U.S. at Lampf v. Gilbertson, 501 U.S. 34 (internal citations omitted). This 350 (1991) articulates a slightly different second exception is very narrow; version of the rule for choosing “reference to federal law is the exception, limitations periods when federal statutes and we decline to follow a state limitations fail to specify them. In Lampf, the Court period only when a rule from elsewhere in considered the need for uniformity, the federal law clearly provides a closer “geographic character” of the claim, and analogy than available state statutes, and the “closest fit,” provided statutory when the federal policies at stake and the purpose and elements. Id. at 357-58. practicalities of litigation make that rule a This expression of the rule is not significantly more appropriate vehicle for followed by the Court in North Star.

3 interstitial lawmaking.” Id. at 35 (internal As we see then, under North Star, quotations omitted). Reed, and DelCostello, if there is an analogous state limitations period, absent In other words, if there is a parallel any impediment of implementation of state statute, there is no reason to explore national policies if that state period is federal law, unless the state limitations applied, courts are not required to examine period impedes the implementation of federal limitations periods. national policies, is at odds with the purpose or operation of federal substantive Following the standard established law, or is demanded by the practicalities of in DelCostello, the Supreme Court has litigation. See, e.g., Reed, 488 U.S. at 327 applied state limitations periods to a (“In light of the analogy between § variety of claims, including claims under 101(a)(2) and personal injury actions, and the Worker Adjustment and Retraining of the lack of any conflict between the Notification Act (WARN), see North Star, practicalities of § 101(a)(2) litigation and 515 U.S. at 33-37; the Labor-Management state personal injury limitations periods, and Reporting and Disclosure Act we are bound to borrow state personal (LM RDA), see Reed, 488 U.S. at 323-34; injury statutes absent some compelling and § 1983, see Wilson v. Garcia, 471 U.S. demonstration that ‘the federal policies at 261, 266-80 (1985). DelCostello itself, stake’ in § 101(a)(2) actions make a however, is an example of the type of federal limitations period ‘a significantly action in which a federal limitations period more appropriate vehicle for interstitial is called for. There, the Court applied a lawmaking.’”) (quoting DelCostello, 462 federal limitations period to a hybrid § U.S. at 172). However, as the Court 301/fair representation claim arising under explained in DelCostello: the National Labor Relations Act (NLRA), 462 U.S. at 151, 158-72. Again, in a In some circumstances . . . Racketeer Influenced and Corrupt state statutes of limitations Organizations Act (RICO) claim, the c a n b e unsatisfacto ry Court applied a federal limitations period vehicles for the enforcement in Agency Holding Corp. v. Malley-Duff & of federal law. In those Assocs., Inc., 483 U.S. 143 (1987). instances, it m ay b e inappropriate to conclude Our review of DelCostello and that Congress would choose Malley-Du ff demonstrates that the to adopt state rules at odds Supreme Court examines statute of w ith the p u r p o s e or limitations queries based on the type of o p e r a t io n o f f e d e r a l claim presented rather than on a case-by- substantive law. case basis. NLRA and RICO cases are two categories of the types of federal statutes excepted from the general 462 U.S. at 161 (emphasis added). application of state limitations periods.

4 The justification for applying the uniformity purposes, a court should adopt exception in the DelCostello 301/fair a federal, rather than a state, limitations representation hybrid claim is evident. period. First, a general preference for While the § 301 component of the claim is uniformity, even if to avoid forum a straight contract claim for which there shopping, is an insufficient reason to apply were close state analogs, the fair the limitations period of the closest federal representation claim, which is a challenge analog. See, e.g., North Star, 515 U.S. at to private settlements under the collective 36. The Court noted, in North Star, that bargaining agreement, was without close “the practice of adopting state statutes of analog in state law. 462 U.S. at 165. It limitations for federal causes of action can was possible to apply the state arbitration result in different limitations periods in limitations periods to the hybrid claim, but different States for the same federal action they are extremely short – only 10 to 90 . . . . But these are just the costs of the rule days – and would allow insufficient time itself . . ..” Id. for plaintiffs to complete necessary tasks Second, the desire to unify the relating to the fair representation claim, limitations periods of federal laws with i.e., evaluating the adequacy of union similar purposes is not a sufficient reason counsel, obtaining private counsel, and to adopt federal limitations periods. For framing the suit. Id. at 166. In addition, instance, in Reed, the Court commented: the state arbitration statutes assume the vacation of an award, but the arbitration in Respondents argue that the DelCostello did not resolve the employee’s same federal labor policies claim against the union because the union that led us in DelCostello to w a s a c t in g a s t h e e m p l o y e e ’s borrow the NLRA § 10(b) representative (and union counsel as statute of limitations for employee’s counsel). Id. at 167. In the hybrid § 301/fair alternative, applying the longer six year r e p r e se n t a ti o n c l a i m s state contract limitations period to the likewise require that we hybrid claim would have interfered with borrow § 10(b) for LMRDA the “rapid final resolution of labor disputes § 101(a)(2) actions. This favored by federal law.” Id. at 168. The argument lacks merit. It practicalities of litigating a hybrid claim, fails to take seriously our as in DelCostello, distinguish that type of admonition that analogous case from the present one. state statutes of limitations are to be used unless they The RICO civil enforcement action frustrate or significantly in Malley-Duff is a broader exception to interfere with federa l the state limitations rule. The Supreme policies. Court has articulated three points to consider in determining whether, for

5 488 U.S. at 327 We see then this process taking place in Malley-Duff, the RICO case in Third, there is a difference between which the Court held that a four year uniformity in construing the substantive limitations period for Clayton Act civil elements of a statute in order to enforcement actions applies to RICO characterize a claim for statute of actions and rejected the state “catch-all” limitations purposes and the next step of statute of limitations choice. 483 U.S. at determining what limitations periods to 155-56. The Court is very careful in adopt for a particular type of claim. For Malley-Duff to distinguish its narrow example, in Wilson, the Supreme Court holding with regard to these RICO actions held that § 1983 claims should be from other limitations period cases. The characterized uniformly as state tort Court explained that uniformity is a greater actions. The Court then determined, concern for RICO civil actions, since by however, that the length of the limitations statute such actions require both a nexus to period is to be governed by state tort law. interstate or foreign commerce and a 471 U.S. at 268-271, 275-280. The Court pattern of racketeering. Id. at 153; 18 stressed that uniformity was an issue only U.S.C. § 1962(b), (c). Racketeering itself in the characterization of the claim, stating often involves interstate transactions, since “the statute [§ 1983] is fairly construed [as it may include any of nine state law a tort claim] as a directive to select, in felonies and over 25 federal statutes. Id. at each State, the one most appropriate 149 (citing A.J. Cunningham Packing statute of limitations for all § 1983 claims. Corp. v. Congress Fin. Corp., 792 F.2d The federal interests in uniformity, 330, 337 (3d Cir. 1986) (Sloviter, J., certainty, and the minimization of concurring)); 18 U.S.C. § 1961. unnecessary litigation all support the conclusion that Congress favored this The Court’s desire to limit its simple approach.” Id. at 275. Thus, while holding in Malley-Duff is made clear in the Court embraced uniformity in North Star. The North Star court recognizing § 1983 claims as tort claims distinguished Malley-Duff on the ground for statute of limitations purposes, it did that the event in North Star was a single not find that the limitations periods incident, “a plant closing,” a “mass layoff themselves needed to be uniform. It is at a single site of employment,” and it was only after this characterization of the type “relatively simple and narrow in its of claim has been completed that the scope,” 515 U.S. at 37 (internal quotations DelCostello/North Star/Reed examination omitted). The RICO claim in Malley-Duff, is to be done to determine if there are no on the other hand, is acknowledged as analogous state statutes or if the state requiring a nexus to interstate or foreign li m i ta t i o n s p eriods frustra te th e commerce as a jurisdictional element as practicalities of litigation or are at odds well as an allegation of a pattern of with federal purpose or law. racketeering, which is likely to include

6 interstate transactions. Malley-Duff, 483 KingVision, however, relies on the U.S. at 153-54. KingVision is correct that Fifth Circuit Court of Appeals’ decision in cable piracy, like RICO claims, may Prostar v. Massachi, 239 F.3d 669 (5th involve wide-spread and multiple Cir. 2001) to argue for the application of wrongful actions such as theft, tortious the federal limitations period of the interference with prospective advantage, Copyright Act. We decline, however, to misrepresentation, civil conspiracy, and follow the holding in Prostar. Although unjust enrichment, but multiple, interstate the facts parallel those of the present case, claims are not required as an element of Prostar is distinguishable on the ground the cause of action under §§ 553 or 605 of that the applicable state law at issue, one the Cable Act, nor are they at stake in this of general conversion, is not as close an case. analog to the FCA as the Pennsylvania piracy statutes.3 Further, the Prostar court Although the Supreme Court has appears to conflate, or at least fails to not yet been faced with the issue of the distinguish between, the need for limitations period to apply in FCA/Cable uniformity in construing the type of statute Act piracy cases, the issue has arisen in for limitations purposes and uniformity in federal district courts and has been the length of the limitations periods addressed by the Fifth Circuit Court of adopted. See Wilson, 471 U.S. at 268-271, Appeals. As the District Court noted in 275-280. The Prostar court states that the this case, federal district courts have FCA requires uniform enforcement via the applied the federal limitations period under application of a federal limitations period the Copyright Act to FCA claims when the because “issues facing the cable industry only state law from which to borrow a [are] national in scope.” 239 F.3d at 676 limitations period was a general (citing H.R. Rep. No. 98-934, at 22 (1984), conversion law. We agree with the reprinted in 1984 U.S.C.C.A.N. 4659, District Court that “these cases do not predict the proper outcome of the case at bar involving a state statute narrowly analogy” rule first announced in crafted to deter cable piracy.” 2002 U.S. DelCostello is “not only erroneous but Dist. LEXIS 2275 at *8. It is not, unworkable” because it can result in state moreover, a requirement that a district limitations applying in some states and court, in picking an analogous state the federal statute in others. 515 U.S. at limitations period, determine that every 37. We, however, will leave the state has such an analogous statutory resolution of this dilemma to the scheme – but only that the state whose law Supreme Court. is being applied has such a one.2 3 We take judicial notice that KingVision identifies New York and 2 In his concurrence in North Star, Mississippi as other states without state Justice Scalia notes that the “closer piracy analogs.

7 4720-22). This conclusion, however, disputes the applicability of § 910, as it simply does not follow. The national deals with theft via a “device,” and it is not concerns of the cable industry are relevant clear that a “device” was used in the only insofar as they are embodied in the present case to intercept the telecast. FCA. As a threshold matter, they are used Nevertheless, even though we do not know to characterize the claim for which a the method of interception used at the El statute of limitations period is then to be Toro Bar, we can assume reception of the applied. The violations of the Cable Act, Holyfield-Lewis fight was not the product however, are particular acts which are of mere serendipity. Further, while pursued in the locations where they occur KingVision is correct that § 910 speaks – as was done in the present case. The a b o u t m a n u f a c t u r e o f i l le g a l localized violations – even if multiple – telecommunications devices and § 553 are very different from the interstate about improper interception of a activity involved in RICO claims. communication, § 910(e) defines “manufacture of an unlawful Following North Star, we turn our telecommunication device” as using a attention then to the Pennsylvania piracy device to receive, transmit, or decrypt a statutes. Their provisions mirror those of telecommunications service. the FCA. Section 3926 of the Pennsylvania statute, like 47 U.S.C. § 605, The District Court is correct that § makes punishable by fine or imprisonment 910 provides “a remarkably close analog the theft of certain wire services.4 It to the Cable Act [§ 553].” 2002 U.S. allows an aggrieved service provider LEXIS 2275 at *6. As the court described, “ e q uitable or declaratory re l i ef , § 910, like 47 U.S.C. § 553: compensatory and punitive damages . . . (1)specifically prohibits use costs . . . and attorney fees.” 18 Pa. Cons. of an unlawful Stat. § 3926(g). Section 910 is the state telecommunications device companion statute to § 3926 and is the to decode “transmissions, state statute addressed by the District signals or services over any Court. It focuses upon the use of devices cable television . . . .” 18 Pa. for theft of telecommunications services, mirroring 47 U.S.C. § 553.5 KingVision

the present case. See TKR Cable Co. v. 4 Section 3926 pertains to wire Cable City Corp., 267 F.3d 196 (3d Cir. and radio services, and § 605 to 2001) (holding that “a cable television telecommunication and cable services. descrambler does not facilitate the interception of ‘communications by 5 KingVision alleged violation of radio’ and therefore the statutory both §§ 605 and 553 of the Cable Act. damages available under § 605 do not Section 605, however, does not apply in apply here.”)

8 Cons. Stat. § 910(e) (c)(3)(B)). (compare with 47 U.S.C. § 553(a)). Consequently, we conclude that the District Court did not err in holding that, (2) provides for criminal “because Section 910 is parallel in sanctions; prior convictions substance and form to the Cable Act, it is under the Cable Act are the ‘closer fit’ the Supreme Court considered in grading an contemplated as the appropriate source offense. 18 Pa. Cons. Stat. from which to borrow a statute of § 910(b)(5) (compare with limitations, precluding KingVision’s 47 U.S.C. § 553(b)). proposed adoption of the Copyright Act’s three-year period.” 2002 U.S. LEXIS 2275 at *8 (internal citations omitted). (3) provides for civil Furthermore, this case does not statutory sanctions of $250 warrant the exception of applying a federal to $10,000 per violation limitations period where a state limitations absent evidence that the acts period “frustrates the practicalities of were willful and for litigation” or otherwise interferes with p u r p o s e s o f p e r s o n al federal policy or law. KingVision knew of financial gain or commercial the alleged violation over two years prior advantage, in which case the to commencing suit. In such a court may increase the straightforward and relatively simple suit, award of statutory damages it is difficult to imagine why a two year by no more than $50,000 per limitations period would be inadequate. violation. 18 Pa. Cons. Stat. See, e.g., North Star, 515 U.S. at 36 § 910(d.1)(2)-(3) (compare (holding that a two year limitations period with 47 U.S.C. § 553(c), in a fairly straightforward WARN claim especially part (c)(3)(A)(ii), was insufficient to “frustrate the (c)(3)(B)). practicalities of litigation”). The Supreme Court has turned to federal law for limitations periods when a state limitations (4) provides for injunctive period was too short to accommodate the relief, statutory or actual special circumstances of litigation, such as damages, attorney’s fees, investigation. See DelCostello, 462 U.S. and costs in almost identical at 166 (holding that a state limitations language as the FCA. 18 period of generally between 10 and 90 Pa. Cons. Stat. § 910(d.1)(1- days was insufficient to bring a LMRA § 3), (d)(2)(iv) (compare with 301/fair representation hybrid action). 47 U.S.C. § 553 (c)(2)-

9 There are no such special considerations relevant to bringing CFA claims that would be frustrated by a two-year limitations period. Cf. Reed, 488 U.S. at 327-328n.4 (finding in the LMRDA context that there was no indication that it should take more than two years to identify an injury and hire an attorney). Additionally, the two year state limitations period does not frustrate the purpose or implementation of the FCA or its Cable Act amendments. The overall purpose of the FCA is to “regulat[e] interstate and foreign commerce in communication by wire and radio so as to make available . . . to all the people of the United States . . . a rapid efficient . . . communication service with adequate facilities at reasonable charges . . .. ” 47 U.S.C. § 151. More specifically, Congress passed §§ 553 and 605 to prevent unauthorized interception of cable transm issions, including interception through unauthorized use of decoding devices. These policies and laws are not impeded in the present case where KingVision has had up to two years to bring suit in order to deter theft and keep the costs of services down. There is no evidence that the practicalities of litigation require more time. Conclusion For the foregoing reasons, we will affirm the judgment of the District Court, dismissing KingVision’s Complaint.