United States District Court, M.D. Pennsylvania
November 18, 2005.
DIRECTV, INC. Plaintiff
JACKIE CHORBA, et al. Defendants.
The opinion of the court was delivered by: THOMAS VANASKIE, Chief Judge
At issue in this satellite television piracy case is whether
plaintiff DIRECTV, Inc. ("DTV") may procure the Clerk's entry of
default judgment against non-appearing defendants pursuant to
Rule 55(b)(1) of the Federal Rules of Civil Procedure simply by
specifying an amount of statutory damages that DTV will accept as
adequate. Stated otherwise, the question presented here is
whether DTV must instead move for default judgment pursuant to
Fed.R.Civ.P. 55(b)(2) inasmuch as the statutes in question
accord to the court discretion as to the award of statutory
Chief Magistrate Judge Thomas M. Blewitt, to whom this matter
had been referred, proposed in a Report and Recommendation (Dkt.
Entry 356) that entry of judgment by the Clerk of Court was
unavailable under the circumstances presented here. He further
recommended that judgment be entered in favor of DTV in the
amount of $1,000 per defaulting defendant, that amount
purportedly being the minimum statutory damages that could be
awarded on any of the claims asserted in this action. DTV objected to the Report and Recommendation, asserting that
it had the right to have the Clerk of Court enter judgment in its
favor in the amount of $10,000 for each defaulting defendant,
this amount being the minimum statutory damages awarded for a
violation of 47 U.S.C. § 605(e)(4), one of its statutory claims.
Contending that the defendants' failure to answer the allegations
of the Complaint established liability for a violation of §
605(e)(4), DTV asserts that it has the right to have the Clerk of
Court enter judgment in the amount of the minimum statutory
damages authorized by law for that alleged violation.
Having carefully considered the matter, I have concluded that
DTV's statutory damage claim is not for a sum certain because, at
a minimum, the legislation in question commits to the Court
discretion with respect to the amount of statutory damages to be
awarded. Accordingly, default judgment may not be entered by the
Clerk. I have also concluded that it is inappropriate to
determine the amount of damages to be awarded by way of default
judgment on the present record. Instead, DTV's motions for
default judgment, presented under Fed.R.Civ.P. 55(b)(1), will
be denied, without prejudice to its right to move for default
judgment under Rule 55(b)(2).
On May 23, 2003, DTV filed 19 separate actions in this Court,
naming as defendants 71 individuals who had purportedly acquired
and utilized devices that enabled the unlawful interception of
DTV's encrypted satellite television programming. The separate
actions were consolidated under the above docket number.
Defendants in this consolidated case include Savuth You (named as a defendant in the matter docketed to No.
3:03-CV-845); Neal Haslam (named as a defendant in the matter
docketed to No. 3:03-CV-855); David Kocher (named as a defendant
in the matter docketed to No. 3:03-CV-857); Gerald Kuchwara
(named as a defendant in the matter docketed to No. 3:03-CV-858);
and Martin O'Malley, Philip L. Rouse, and Mark Williams (named as
defendants in the matter docketed to the above number,
3:03-CV-843). As to each defendant, DTV alleged the acquisition
of specific pirate access devices. For example, defendant You is
alleged to have acquired a "Next Gen & UL Pro X Combo."
(Complaint filed under Docket No. 3:03-CV-845 at ¶ 22.) DTV avers
that this combination package would enable the illegal
programming of a valid DTV access card, and that the "unlooper"
repairs DTV access cards that had been rendered unusable by prior
illegitimate use.*fn1 Defendant Kocher purchased a
combination package invoiced as a "Viper Reader/Writer and Wild
Thing 2 Clone Unlooper," which also allegedly enabled the illegal
re-programming of DTV access cards and repair of disabled DTV access cards that had
been disabled by illegitimate use. (Complaint Docketed to No.
3:03-CV-857 at ¶ 15.) Similar allegations of specifically
identified pirate access devices were made as to defendants
O'Malley, Rouse, Williams, Kuchwara, and Haslam.
Each defendant was duly served with the pertinent complaint and
summons. Each defendant failed to respond to the complaint or
otherwise appear in this action. In accordance with Rule 55(a) of
the Federal Rules of Civil Procedure, DTV caused the Clerk of
Court to enter each defendant's default.*fn2
DTV asserted a common law cause of action for civil conversion
against each defendant.*fn3 It also asserted against each
defendant the following federal statutory claims:
(1) Unlawful interception of DTV satellite programming, in
violation of 47 U.S.C. § 605(a), with monetary relief provided
under 47 U.S.C. § 605(e)(3)(C).
(2) Unlawful interception of electronic communications from DTV
in violation of 18 U.S.C. § 2511, for which monetary damages may
be awarded under 18 U.S.C. § 2520(c). (3) Unlawful possession of a device with knowledge that the
device is used for the purpose of the surreptitious interception
of electronic communications, in violation of 18 U.S.C. § 2512,
with recovery of damages sought under 18 U.S.C. § 2520.*fn4
(4) Unlawful assembly or modification of a device with
knowledge that the device is used primarily in the unauthorized
decryption of satellite programming or direct-to-home satellite
services, in violation of 47 U.S.C. § 605(e)(4), for which
damages may be awarded under 47 U.S.C. § 605(e)(3)(C).
With respect to the viable statutory claims presented in this
matter, Congress has specified that the court may award
damages. See 18 U.S.C. § 2520(c)(2);
47 U.S.C. § 605(e)(3)(B)(ii). Congress has also provided that an aggrieved
party may elect to recover either actual damages or specifically
prescribed statutory damages. The statutory award for a violation
of 18 U.S.C. § 2511 "is the greater of $100 a day for each day of
violation or $10,000." 18 U.S.C. § 2520(c)(2)(B). For a violation
of 47 U.S.C. § 605(a), the statutory damages for each violation
are "not less than $1,000 or more than $10,000, as the court
considers just." 47 U.S.C. § 605(e)(3)(C)(i)(II). If, however, a
violation of § 605(a) is willful "and for purposes of direct or
indirect commercial advantage or private financial gain," the
court may award up to $100,000. 47 U.S.C. § 605(e)(3)(C)(ii). For
a violation of § 605(e)(4), the statutory damages are prescribed to be "not less than $10,000, or more than
$100,000, as the court considers just."
47 U.S.C. § 605(e)(3)(C)(i)(II). The statute also provides that "[i]n any
case where the court finds that the violator was not aware and
had no reason to believe that his acts constituted a violation of
[§ 605], the court in its discretion may reduce the award of
damages to a sum of not less than $250."
47 U.S.C. § 605(e)(3)(C)(iii).
Following the Clerk's entry of default for each defendant, DTV
requested the Clerk of Court to enter judgment by default in
accordance with Rule 55(b)(1) of the Federal Rules of Civil
Procedure.*fn5 DTV's Requests for Default Judgment did not
specify the counts on which judgment was to be entered against a
defendant. Instead, accompanying each request for default
judgment was an affidavit of DTV's attorney, asserting that "the
amount due to Plaintiff DIRECTV, Inc. from Defendant . . . is
$10,000, pursuant to 47 U.S.C. § 605(e)(4) and
18 U.S.C. § 2520(c)(2)(B), plus costs." (Affidavit for Default Judgment
accompanying the request for Default Judgment against Defendant Rouse, Dkt. Entry
The Clerk of Court entered judgment against each defendant as
requested by DTV. Each judgment was essentially identical and
Defendant . . ., having failed to plead or otherwise
defend in this action, and default having been
NOW, upon application of the Plaintiff and upon
affidavit that Defendant . . . is indebted to the
Plaintiff in the sum of $10,000, that Defendant is
not an infant or incompetent person and not in the
military of the United States, it is hereby
ORDERED, ADJUDGED, and DECREED, that Plaintiff
DIRECTV, Inc. recover from Defendant the sum of
$10,000, plus costs of this suit.*fn7
Concerned that entry of judgment by the Clerk of Court pursuant
to Rule 55(b)(1) may have been inappropriate, I issued an Order
on December 22, 2003, directing DTV to show cause why the default
judgments entered by the Clerk of Court should not be
The Order, filed three (3) days after the
judgments were entered, stayed execution on any default judgment pending resolution of the Show Cause Order. Moreover,
the matter was referred to United States Magistrate Judge Blewitt
for preparation of an appropriate Report and Recommendation.
On February 19, 2004, Magistrate Judge Blewitt issued his
Report and Recommendation. Citing DIRECTV, Inc. v. Kaas,
294 F. Supp. 2d 1044 (N.D. Iowa 2003), Magistrate Judge Blewitt
concluded that DTV's decision to elect $10,000 in statutory
damages under legislative provisions that vested in the court
discretion to determine the amount of statutory damages did not
transform DTV's claim into one for a sum certain. Magistrate
Judge Blewitt thus recommended that the default judgments be
vacated. Magistrate Judge Blewitt also recommended, however, that
the Court proceed to award statutory damages of $1,000,
ostensibly the minimum amount that may be awarded for unlawful
interception of radio communications in violation of
47 U.S.C. § 605(a).
DTV filed objections to the Report and Recommendation,
asserting that a minimum award of $10,000 for a violation of
47 U.S.C. § 605(e)(4) was mandatory, and DTV could therefore request
the Clerk of Court to enter judgment in that amount. DTV also
complained that Magistrate Judge Blewitt erred in recommending an
award of statutory damages of $1,000 for a violation of
47 U.S.C. § 605(a) because DTV had not made an election for an award of
such damages for the alleged violation of § 605(a). DTV claimed
that it had the prerogative of determining the statutory damages
it elects to recover, and the court has no authority to alter its election. DTV has filed a brief, supplemental brief, and second
supplemental brief in support of its objections to the Report and
DTV has sued scores of individuals in this District Court, and,
undoubtedly, thousands of persons nationwide. Many individual
defendants have failed to respond to the complaint. There is a
plethora of case law addressing the question of the amount of
damages to be awarded DTV in a default judgment setting.
Significantly, DTV has not cited one case that has sustained a
clerk's entry of judgment in an amount of statutory damages
elected by DTV.
There is, however, authority holding that entry of judgment
under Rule 55(b)(1) is inappropriate under circumstances similar
to those presented here. See e.g., DIRECTV, Inc. v.
Sheffield, No. Civ. 03-5738, 2005 WL 563108, at *2 n. 3 (D.
Minn. March 8, 2005); Kaas, 294 F. Supp. 2d at 1047-48. Those
courts have held that the discretionary nature of an award of
statutory damages undermines DTV's assertion that its claim is
for a sum certain. In this regard, although
47 U.S.C. § 605(e)(3)(C) and 18 U.S.C. § 2520(c) may allow the aggrieved
party to elect whether to seek actual or statutory damages,
neither legislative provision allows the aggrieved party to
specify the amount of damages that may be awarded. In addition, §
605(e)(3)(C)(iii) allows a defendant an opportunity to limit
damages to $250 by showing that he or she was not aware and had
no reason to know that the conduct in question violated
47 U.S.C. § 605. Even a defaulting party has the opportunity to minimize
the damages awarded. See, e.g., DIRECTV, Inc. v. Griffin, 290 F. Supp. 2d 1340,
1344 (M.D. Fla. 2003).
Moreover, case law recognizes that a defendant's default does
not perforce entitle DTV to judgment in the minimum amount
specified by the applicable statute. "`There must be a sufficient
basis in the pleadings for the judgment entered. . . .'"
DIRECTV, Inc. v. Huynh, 318 F.Supp. 2d 1122, 1127 (M.D. Ala.
2004). In this regard, although the well-pleaded allegations of
the complaint are generally accepted as true, averments relating
to the amount of damages are not accepted as established. See
DIRECTV, Inc. v. Albright, No. Civ. A. 03-4603, 2003 WL
22956416, at *1 (E.D. Pa. Dec. 9, 2003). Furthermore,
"`plaintiff's conclusions of law are not deemed admitted or
established, and the court may grant only the relief for which a
sufficient basis is asserted in the complaint.'" Patray v.
Northwest Pub., Inc., 931 F.Supp. 865, 869 (S.D. Ga. 1996).
Thus, "`[j]udgment by default may be granted only for such relief
as may lawfully be granted upon the well-pleaded facts alleged in
the complaint.'" Id.
DTV asserts that the default of each defendant establishes that
defendant's liability for a violation of 47 U.S.C. § 605(e)(4).
This assertion begs the question whether the facts alleged by
DTV are sufficient to support recovery under section 605(e)(4).
Such a determination is not a ministerial task to be made by a
clerk of court. In this regard, some courts have concluded that
the averments of a complaint are inadequate to support liability
under § 605(e)(4). See, e.g., Joe Hand Promotions, Inc. v.
New Third World, Inc., No. Civ. A. 97-3373, 1998 WL 306538, at
*1 (E.D. Pa. June 9, 1998). Other courts have found that §
605(e)(4) "targets upstream manufacturers and distributors, not the ultimate
consumers of pirating devices," Albright, 2003 WL 22956416, at
*2, and have thus declined to award any damages for an alleged
violation of § 605(e)(4) in a default setting. Id.; DIRECTV,
Inc. v. Oliver, No. 04-3454, 2005 WL 1126786, at *3-4 (N.D. Cal.
May 12, 2005). Still other courts have held that whether to award
any statutory damages authorized under 47 U.S.C. § 605(e)(3) is
committed to the court's discretion, thereby foreclosing the
position that the claim is for a sum certain. See, e.g.,
Sheffield, 2005 WL 563108, at *3 ("The award of statutory
damages under § 605(e)(3) is committed to the Court's
discretion."); DIRECTV, Inc. v. Montes, 338 F. Supp. 2d 352,
355 (D. Conn. 2004); DIRECTV, Inc. v. DeCroce,
332 F. Supp. 2d 715, 718 (D.N.J. 2004) ("[t]he Court in its discretion, also may
grant injunctive relief, and award actual or statutory
damages."); DIRECTV, Inc. v. Adkins, 320 F. Supp. 2d 474, 476
(W.D. Va. 2004) ("the grant of injunctive and monetary relief
[under § 605(e)(3)] lies within the court's discretion. . . .")
Huynh, 318 F.Supp. at 1130 ("the court has the discretion to
award damages"); Griffin, 290 F. Supp. 2d at 1344. In this
regard, § 605(e)(3)(A) provides that upon finding a violation of
the statutory provisions the court "may grant temporary and
final injunctions . . .; may award damages as described in
subparagraph (C); and . . . shall direct the recovery of full
costs, including awarding reasonable attorneys' fees."
47 U.S.C. § 605(e)(3)(B) (emphasis added). This statutory structure
certainly supports a rational conclusion that whether to award
damages is, in the first instance, a discretionary decision to be
made by the court. DTV cites authority it claims supports the conclusion that, at
the aggrieved party's election, the minimum statutory damages
specified by Congress for an established violation of § 605(e)(4)
are mandatory. (Brief in Support of Objections to Report and
Recommendation, Dkt. Entry 367, at 6-7.) A clerk of court,
however, is not in a position to make this determination. DTV
cannot circumvent a court's resolution of this difficult issue by
electing to recover the minimum statutory damages under the more
serious of the violations alleged in the unanswered complaints.
Indeed, even if an award of statutory damages is mandatory, the
amount of those damages remains committed to the court's
discretion. In this regard, Congress has provided that statutory
damages for any violation of any provision of § 605 may be as low
as $250 if the violator was not aware and had no reason to
believe that his or her acts constituted a violation of § 605.
47 U.S.C. § 605(e)(3)(C)(iii). As noted above, a defendant's failure
to answer a complaint does not admit averments relating to the
amount of damages. See Oliver, supra, 2005 WL 1126786, at
*2. Thus, it cannot be said that a defendant's failure to respond
to a DTV complaint is tantamount to a concession of liability for
the minimum amount of statutory damages available for the most
serious of the purported violations.
"Plaintiff cannot satisfy the certainty requirement [of Rule
55(b)(1)] simply by requesting a specific amount." 10A WRIGHT,
MILLER & KANE, Federal Practice and Procedure § 2683 (1998).
Thus, DTV's election of the minimum amount of statutory damages
for a violation of § 605(e)(4) does not entitle it to invoke the Rule 55(b)(1)
procedure. Instead, it must appeal to the Court's discretion for
entry of default judgment under Rule 55(b)(2).
Reinforcing the conclusion that DTV cannot seek a entry of
judgment by the clerk is the fact that it also sought an award of
damages pursuant to 18 U.S.C. § 2520(c)(2). As noted above, this
section provides that a court "may assess" either actual damages
for the unlawful interception of an electronic communication, or
"statutory damages of whichever is the greater of $100 a day for
each day of violation or $10,000." 18 U.S.C. § 2520(c)(2)(B). A
clear majority of the appellate courts that have addressed the
issue have concluded that whether to award damages under §
2520(c)(2) is a matter committed to the trial judge's discretion.
See DIRECTV, Inc. v. Brown, 371 F.3d 814, 818 (11th Cir.
2004); Dorris v. Absher, 179 F.3d 420, 429 (6th Cir. 1999);
Reynolds v. Spears, 93 F.3d 428, 435 (8th Cir. 1996); Nalley
v. Nalley, 53 F.3d 649, 652 (4th Cir. 1995); but see
Rodgers v. Wood, 910 F.2d 444, 448 (7th Cir. 1990).
Significantly, DTV, although originally requesting entry of
judgment by the Clerk of Court under § 2520(c)(2), does not
object to the Report and Recommendation on the ground that an
award of $10,000 under that statutory provision is mandatory.
The point of this discussion is to illustrate that there are
significant questions concerning any award to DTV on a
defendant's default. When DTV elects statutory damages, it should
be prepared to provide information pertinent to the court's
exercise of discretion. Such information may include the
defaulting party's subscription history, communications with DTV,
length of time the defendant possessed the device in question before
hearing from DTV, number of devices allegedly owned by the
defendant, the defendant's communications with others involved in
the pirate access device field, etc. It is inappropriate for DTV
to circumvent consideration of these matters by claiming, as it
did in this case, that each defaulting defendant is indebted to
DTV in the sum of $10,000.
For this reason, it is also inappropriate to determine that
judgment should be in the amount of $1,000, as recommended by
Magistrate Judge Blewitt. DTV observes that it made no specific
election of statutory damages for an alleged violation of
47 U.S.C. § 605(a). Moreover, no determination of any amount of
damages to be awarded on a default judgment should be made until
DTV has followed the appropriate procedural avenue. As noted
above, the amount of damages, if any, is to be set by the court
after taking into account the pertinent facts. DTV has not
presented the relevant facts by way of affidavit or otherwise.
Under these circumstances, it is appropriate to vacate the
judgments entered by the Clerk of Court and deny DTV's requests
for entry of default judgment pursuant to Rule 55(b)(1), without
prejudice to DTV's right to move for default judgment under Rule
55(b)(2).*fn9 III. CONCLUSION
For the reasons set forth above, the Report and Recommendation
of Magistrate Judge Blewitt (Dkt. Entry 356), will be adopted in
part. The judgments previously entered by the Clerk of Court at
the instance of DTV will be vacated, and DTV's requests for entry
of default judgment by the Clerk of Court will be denied, without
prejudice. An appropriate Order follows. ORDER
NOW, THIS 18th DAY OF NOVEMBER, 2005, IT IS HEREBY ORDERED
1. The Report and Recommendation of Magistrate Judge Blewitt
(Dkt. Entry 356) is ADOPTED IN PART.
2. The judgments of default entered by the Clerk of Court
against Defendants You (Dkt. Entry 260), Haslam (Dkt. Entry 261),
Kocher (Dkt. Entry 262), O'Malley (Dkt. Entry 264), Williams
(Dkt. Entry 265), Rouse (Dkt. Entry 267), and Kuchwara (Dkt.
Entry 268) are VACATED.
3. Plaintiff's Requests for Default Judgment as to Defendants
Kocher (Dkt. Entry 242), Haslam (Dkt. Entry 248), O'Malley (Dkt.
Entry 249), Williams (Dkt. Entry 250), You (Dkt. Entry 252),
Rouse (Dkt. Entry 255), and Kuchwara (Dkt. Entry 258) are
DENIED, WITHOUT PREJUDICE.
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