Opinion
Civil Action No. 03-2475
November 3, 2003
ORDER
Defendants Walter H. Shaffer, III and Michael Travis bring this matter before the Court on two motions to dismiss pursuant to Federal Rules of Civil Procedure Rule 12(b)(6) and a motion to sever pursuant to Rule 21. For the reasons set forth below, Defendants' motions to dismiss and motion to sever will be denied.
BACKGROUND
Plaintiff DIRECTV, Inc. distributes satellite television broadcasts throughout the United States. DIRECTV electronically scrambles the programming, which is then transmitted from satellites to DIRECTV subscribers. A subscriber receives the signals through a DIRECTV-provided satellite dish, integrated receiver, DIRECTV access card, and cabling. The access card unscrambles the signals for television programs for which the subscriber has paid.
On May 23, 2003, DIRECTV filed a three-count Complaint against the six Defendants. Specifically concerning Defendant Walter H. Shaffer, III ("Shaffer"), DIRECTV alleges that on March 27, 2001, Shaffer purchased a "Pirate Access Device, consisting of a printed circuit board device called an 'Unlooper,' from Vector Technologies," which DIRECTV alleges was a major source of pirate technologies. (Compl. ¶¶ 3, 8.) Concerning Defendant Michael Travis ("Travis"), DIRECTV alleges that Travis purchased two pirate access devices from Vector Technologies. DIRECTV alleges that on February 27, 2001, Travis purchased the first device, which was a printed circuit board device called an "Emulator," and on April 9, 2001, Travis purchased the second device, which was a printed circuit board device called a "Boot Loader Board." (Id. ¶ 11.) For both Shaffer and Travis, DIRECTV alleges that the devices were mailed to their New Jersey homes. (Id. ¶¶ 8, 11.)
The first count of the Complaint claims that Shaffer and Travis received or assisted others in receiving DIRECTV satellite transmissions of television programming without authorization in violation of 47 U.S.C. § 605(a). (Id. ¶ 17.) The second count claims that Shaffer and Travis, "by using the Pirate Access Devices to decrypt and view DIRECTV's satellite transmissions of television programming, . . . intentionally intercepted, endeavored to intercept, or procured other persons to intercept or endeavor to intercept, DIRECTV's satellite transmission of television programming, in violation of 18 U.S.C. § 2511(1)(a)." (Id. ¶ 21.) The third count claims that Shaffer and Travis "possessed and used Pirate Access Devices, knowing or having reason to know that the design of such devices render them primarily useful for the purpose of surreptitious interception of DIRECTV's satellite transmissions . . . in violation of 18 U.S.C. § 2512(1)(b)." (Id. ¶ 25.)
Defendants Shaffer and Travis have each filed a motion to dismiss DIRECTV's Complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). Shaffer and Travis have also filed a motion to sever pursuant to Fed.R.Civ.P. 21.
DISCUSSION
I. DEFENDANTS' MOTIONS TO DISMISS
A. Standard on Motion to Dismiss
When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6), the court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Schrob v. Catterson, 948 F.2d 1402 (3d Cir. 1991);Rogin v. Bensalem Twp., 616 F.2d 680, 685 (3d Cir. 1980). A court may not dismiss the complaint for failure to state a claim "unless it appears beyond 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) (citations omitted); P.P. Enters., Inc. v. Bucks County Cmty. Coll., 725 F.2d 943, 944 (3d Cir. 1984).
It is well settled that a pleading is sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Under the liberal federal pleading rules, a complaint need not spell out the theory of liability under which the plaintiff hopes to recover. See Evans Prods. Co. v. West Am. Ins. Co., 736 F.2d 920, 923 (3d Cir. 1984). It is not necessary to plead evidence, and it is not necessary to plead all the facts that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977). However, "[a]lthough the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they do require that the pleadings 'give defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'"Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 149-50 n. 3 (1984) (quoting Conley, 355 U.S. at 47).
Finally, the Court in reviewing a Rule 12(b)(6) motion must only consider the facts alleged in the pleadings, the documents attached thereto as exhibits and matters of judicial notice. Southern Cross Overseas Agencies, Inc. v. Kwong Shipping Group Ltd., 181 F.3d 410, 426 (3d Cir. 1999); Jordan v. Fox, Rothschild, O'Brien Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).
B. DIRECTV's Complaint is Sufficient
Defendants contend that 1) 47 U.S.C. § 605(a) does not provide DIRECTV a right of recovery, and DIRECTV has failed to properly plead a claim for violation of § 605(a); and, 2) a private civil cause of action does not exist under 18 U.S.C. § 2511 and 2512.
1. § 605(a)
Section § 605(a) provides in relevant part:
No person not being authorized by the sender shall intercept any radio communication. . . . No person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.47 U.S.C. § 605(a).
Any party aggrieved by a violation of § 605(a) may bring an action to recover damages. Id. § 605(e)(3). The Third Circuit has held that § 605(a) "encompasses the interception of satellite transmissions." TKR Cable Co. v. Cable City Corp., 267 F.3d 196, 207 (3d Cir. 2001).
It is clear that DIRECTV has a right to bring an action for an alleged violation of § 605(a). Furthermore, DIRECTV has sufficiently pleaded claims against Shaffer and Travis for their alleged violations of § 605(a). Section 605(a) states that no person "shall receive or assist in receiving" any unauthorized satellite transmissions. DIRECTV's Complaint claims that Shaffer and Travis have "received and/or assisted others in receiving DIRECTV's satellite transmissions" without authorization in violation of § 605(a). Thus, DIRECTV has provided Defendants with fair notice of its claim and the grounds upon which it rests, and taking all the allegations in the Complaint as true and viewing them in the light most favorable to DIRECTV, it is evident that DIRECTV's first count states a claim upon which relief may be granted.
2. §§ 2511 and 2512
Although the Electronic Communications Privacy Act ("EPCA"), 18 U.S.C. § 2510 et seq., is a criminal statute, § 2520 of EPCA permits the recovery of civil damages:
Except as provided in section 2511(2)(a)(ii), any person whose wire, oral, or electronic communication is intercepted, disclosed, 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.18 U.S.C. § 2520.
Enabled by § 2520 to assert a civil cause of action under any chapter of EPCA (except § 2511(2)(a)(ii))., DIRECTV alleges that Defendants violated both § 2511(1)(a) and § 2512(1)(b). Section 2511 of EPCA applies to a person who
intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication; [and] such person knows, or has reason to know, that such device or any component thereof has been sent through the mail or transported in interstate or foreign commerce.Id. §§ 2511(1)(a), (1)(a)(iii).
Section 2512 of EPCA prohibits the possession of any device by a person
knowing or having reason 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, and that such device or any component thereof has been or will be sent through the mail or transported in interstate or foreign commerce.Id. § 2512(1)(b).
Defendants contend that § 2520 only permits a civil recovery for the unauthorized interception and use of electronic communications, not for the mere possession of a device. Consequently, Defendants contend that because DIRECTV only alleges that Defendants possessed a device rather than used the device to intercept DIRECTV's satellite transmissions, DIRECTV has failed to state a claim.
First, Defendants' argument fails because DIRECTV has alleged that Shaffer and Travis used the devices to intercept DIRECTV's satellite transmissions: "By using Pirate Access Devices to decrypt and view DIRECTV's satellite transmissions of television programming, defendants intentionally intercepted, endeavored to intercept, or procured other persons to intercept or endeavor to intercept, DIRECTV's satellite transmission. . . ." (Compl. ¶ 21.)
Second, even if DIRECTV only alleged that Defendants possessed the devices, DIRECTV's Complaint would be sufficient. Although Defendants cite Flowers v. Tandy Corp., 773 F.2d 585 (4th Cir. 1985) to support their argument that EPCA does not permit a civil cause of action for violations of §§ 2511 and 2512, numerous recent district court decisions throughout the country have rejected Flowers, including courts in the Third Circuit. See, e.g., DirecTV, Inc. v. Dougherty, Case No. 02-CV-5576 (FLW) (D.NJ. Order, Oct. 8, 2003) (citing numerous cases). Thus, even if DIRECTV simply alleged possession, rather than use, of the pirate access devices, DIRECTV's Complaint would be sufficient to survive Defendants' 12(b)(6) motion to dismiss.
Taking all the allegations in the Complaint as true and viewing them in the light most favorable to DIRECTV, it is evident that DIRECTV's second and third counts state a claim upon which relief may be granted.
II. DEFENDANTS' MOTION TO DROP/SEVER
Rule 20(a) of the Federal Rules of Civil Procedure permits all persons to be joined "in one action as defendants if there is asserted against them . . . [1] any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and [2] if any question of law or fact common to all defendants will arise in the action." Fed.R.Civ.P. 20(a). Rule 21 cures misjoinder of any defendant by allowing a court to drop a party at any stage of the litigation, or sever any claim against a party to be proceeded with separately. Fed.R.Civ.P. 21.
The Supreme Court has stated that "[u]nder the Rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 (1966). Thus, the purpose of Rule 20 is to "promote trial convenience and expedite the final determination of disputes, thereby preventing multiple lawsuits." Mosley v. General Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974) (citation omitted). "Single trials generally tend to lessen the delay, expense and inconvenience to all concerned." Id.
To determine whether joinder is proper, a court must find that the two prongs of Rule 20(a) are met. The first prong "requires an inquiry identical to the 'logical relation' inquiry under Rule 13(a)."Waterlooy Gutter Protection Sys. Co., Inc. v. Absolute Gutter Protection. L.L.C., 64 F. Supp.2d 398, 407 (D.N.J. 1999) (citations omitted). The second prong "does not require precise congruence of all factual and legal issues; indeed, joinder may be permissible if there is but one question of law or fact common to the parties." Morris v. Paul Revere Ins. Group, 986 F. Supp. 872, 885 (D.N.J. 1997) (citations omitted).
Here, DIRECTV readily meets the second prong of Rule 20(a). DIRECTV has asserted identical claims against all Defendants based on the same alleged violations of § 605, § 2511, and § 2512. Thus, DIRECTV asserts questions of law common to all Defendants, including Shaffer and Travis.
Whether DIRECTV meets the first prong of Rule 20(a) is not as clear. DIRECTV argues that it has asserted claims against Defendants that arise out of the same transaction or series of transactions., DIRECTV contends that each Defendant purchased his pirate access device(s) from one of two distributers, which shipped the devices through a single distribution center in California. DIRECTV also alleges that the purpose of these devices was the same for each Defendant, and that all of the devices were purchased within a six month time period. Additionally, DIRECTV states that the presentation of evidence against each Defendant "is anticipated to be substantially and substantively the same." (PL Opp. at 7.; Wolin Decl. ¶¶ 2-4.)
Defendants Shaffer and Travis argue that their alleged conduct did not arise out of the same transaction or series of transactions and that there is no logical relationship between any Defendant's alleged purchase and use of the pirate access devices. To support their argument, Defendants contend that 1) the six Defendants have no relation to each other; 2) there were different devices purchased by each Defendant, 3) one Defendant allegedly purchased a device from a different distributor than the others; and 4) Shaffer "expects to prove that the devices that he is alleged to have purchased were either never received, not operable [,] or never used." (Def. Mot. to Drop/Sever at 4.)
To support their position, Defendants cite a Third Circuit case concerning compulsory counterclaims, which present similar concerns as joinder issues. In Xerox Corp. v. SCM Corp., the court stated,
A counterclaim is logically related to the opposing party's claim where separate trials on each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts. Where multiple claims involve many of the same factual issues, or the same factual and legal issues, or where they are offshoots of the same basic controversy between the parties, fairness and considerations of convenience and of economy require that the counterclaimant be permitted to maintain his cause of action. Thus, a detailed analysis must be made to determine whether the claims involve: (1) many of the same factual issues; (2) the same factual and legal issues; or (3) offshoots of the same basic controversy between the parties.Xerox Corp. v. SCM Corp., 576 F.2d 1057, 1059 (3d Cir. 1978) (citation omitted).
Although a detailed analysis is advisable to determine whether the claims against Defendants involve the same factual issues or arise out of the same transactions or series of transactions, it is difficult to conduct such an analysis at this early stage in the litigation. Consequently, without some discovery and the development of a more substantive factual record, Defendants cannot yet demonstrate the propriety of severing the claims and instituting separate actions against each of them.
There are questions of law common to each Defendant, as well as a logical relation between Defendants' alleged conduct, and, according to DIRECTV, the presentation of evidence will be substantively and substantially the same for each Defendant. Thus, because a court has broad discretion to decide whether to sever a claim, see Walsh v. Miehle-Goss-Dexter, Inc, 378 F.2d 409, 412 (3d Cir. 1967), at this point in the litigation it appears that the purposes of Rule 20(a) are met by maintaining a single action against all Defendants. If, however, Defendants determine, during the course of discovery, that a single action for all six Defendants would not promote the purposes of Rule 20(a), they are permitted to re-file their motion, as a party may be dropped or severed at any stage of the litigation.
Accordingly,
IT IS HEREBY ORDERED on this 12th day of November 2003 that Defendant Shaffer's motion to dismiss [22] is DENIED.
IT IS FURTHER ORDERED that Defendant Travis' motion to dismiss [24] isDENIED.
IT IS FURTHER ORDERED that Defendants Shaffer and Travis' motion to drop or sever [14] is DENIED WITHOUT PREJUDICE