United States District Court, E.D. Tennessee
DISH NETWORK LLC, ECHOSTAR TECHNOLOGIES LLC, and NAGRASTAR LLC, Plaintiffs,
LESTER BARNABY, Defendant.
A. Varlan CHIEF UNITED STATES DISTRICT JUDGE.
civil action is before the Court on plaintiffs' Motion
for Default Judgment [Doc. 6]. Plaintiffs move for entry of a
judgment by default against defendant pursuant to Rule
55(b)(2) of the Federal Rules of Civil Procedure for failure
to answer the complaint or otherwise defend this action. The
Court has carefully considered the record as well as the
relevant law, and for the reasons discussed herein, the Court
will grant plaintiffs' motion.
DISH Network LLC ("DISH") is a multi-channel video
provider that delivers video, audio, and data services to
approximately fourteen-million subscribers throughout the
United States via a direct broadcast satellite system [Doc. 1
¶ 9]. DISH uses high-powered satellites to broadcast
entertainment services to consumers who have been authorized
to receive such services after payment of a fee [Id.
¶ 10]. It contracts for and purchases the distribution
rights for most of the programming available for broadcast
[Id. ¶ 11]- The programming DISH broadcasts are
copyrighted and DISH has the authority of the copyright
holders to protect these works from unauthorized reception
and viewing [Id. ¶ 12].
programming is digitized, compressed, and then scrambled
prior to being transmitted to multiple satellites
[Id. ¶ 13]. The satellites relay the encrypted
signal and DISH subscribers, who have the necessary
equipment, receive the signals [Id.]. Plaintiff
EchoStar Technologies LLC ("EchoStar") provides
receivers, dish antenna, and other digital equipment for the
DISH system [Id. ¶ 14]. Plaintiff NagraStar LLC
("NagraStar") provides security technologies
[Id.]. The security measures are encryption-based
technologies that descramble the satellite signal
[Id. ¶¶ 16-18]. These measures prevent
unauthorized users from viewing the programming
new form of piracy has emerged called "Internet key
sharing, " or "IKS, " that can circumvent this
system by use of passcodes [Id. ¶¶ 21-24].
NFusion Private Server ("NFPS") is a
subscription-based IKS service, whereby members purchase the
service to receive DISH's encrypted satellite broadcasts
of programing without authorization [Id. ¶ 25].
Plaintiffs received records showing that defendant purchased
at least 220 passcodes to the NFPS service [Docs. 8-1,
8-2].These passcode are primarily designed and
produced for circumventing the DISH system and have no
commercially significant purpose other than to do so [Doc. 1
¶ 32]. Plaintiffs assert that defendant re-sold certain
IKS passwords that he purchased [Id. ¶ 27].
They allege that defendant intended for his IKS passwords to
be used in the unauthorized decryption of plaintiffs'
satellite signal, and knew or at least should have known they
were used primarily in this unlawful manner [Id.
¶¶ 34, 38-39]. Defendant and his customers received
the benefit of viewing DISH programming without purchasing a
subscription [Id. ¶¶ 27-28].
filed this action on November 2, 2015, alleging violations of
the Digital Millennium Copyright Act ("DMCA"), 17
U.S.C. § 1201, et seq., and the Federal
Communications Act ("FCA"), 47 U.S.C. § 605,
et seq. [Doc. 1 ¶ 5]. Defendant failed to respond
to the complaint or otherwise defend this action despite
being properly served [Docs. 2, 3]. On February 9, 2016,
plaintiffs applied for the Clerk's entry of default [Doc.
4], and on March 3, 2016, the Clerk of Court entered default
of the Federal Rules of Civil Procedure contemplates a
two-step process for obtaining a default judgment against a
defendant who has failed to plead or otherwise defend. First,
pursuant to Rule 55(a), a plaintiff must request from the
Clerk of Court an entry of default, describing the
particulars of the defendant's failure to plead or
otherwise defend. If default is entered by the Clerk, the
plaintiff must then move the Court for entry of default
judgment pursuant to Rule 55(b). The determination of whether
a motion for default judgment should be granted is committed
to "the sound discretion of the court." In re
Irby, 337 B.R. 293, 294 (Bankr.N.D.Ohio 2005) (applying
Federal Rule of Bankruptcy Procedure 7055, which incorporates
Federal Rule of Civil Procedure 55).
default has been entered, "the complaint's factual
allegations regarding liability are taken as true."
Bogard v. Nat'l Credit Consultants, No. 1:12 CV
02509, 2013 WL 2209154, at *3 (N.D. Ohio May 20, 2013);
see also Nat'l Satellite Sports, Inc. v. Mosley
Entm't, Inc., No. 01-CV-74510-DT, 2002 WL 1303039,
at *3 (E.D. Mich. May 21, 2002) ("For a default
judgment, well-pleaded factual allegations are sufficient to
establish a defendant's liability."). The Court
must, however, determine whether the facts alleged in the
complaint "are sufficient to state a claim for relief as
to each cause of action for which [plaintiffs] seek default
judgment." J & J Sports Prods., Inc. v.
Rodriguez, No. 1:08-CV-1350, 2008 WL 5083149, at *1
(N.D. Ohio Nov. 25, 2008); see also Harrison v.
Bailey, 107 F.3d 870, 1997 WL 49955, at *1 (6th Cir.
Feb. 6, 1997) ("Default judgments would not have been
proper due to the failure to state a claim against these
defendants."); Vinton v. CG's Prep Kitchen &
Cafe, No. L09-CV-707, 2010 WL 748221, at *1 (W.D. Mich.
Mar. 2, 2010) ("A default judgment therefore cannot
stand on a complaint that fails to state a claim.").
Furthermore, although the allegations in the complaint
pertaining to liability are taken as true, "the amount
of damages must be proven." Bogard, 2013 WL
2209154, at *3.
move for default judgment as to their claims under the DMCA
and the FCA. The Court will first address the sufficiently of
the complaint as to the claims arising out of each statute.
Then, the Court will address damages.
Sufficiency of the Complaint as to the DCMA Claims
DCMA addresses the circumvention of copyright protection
systems. 17 U.S.C. § 1201. It prohibits trafficking in
any technology, service, or part thereof that: (1) is
primarily designed or produced for circumventing a
technological measure that effectively controls access to a
copyrighted work; (2) has only limited commercial purpose or
use other than circumventing a technological measure that
effectively controls access to a copyrighted work; or (3) is
marketed for use in circumventing a technological measure
that effectively controls access to a copyrighted work.
Id. § 1201(a)(2). Circumventing technological
measures, as defined in the DCMA, "means to descramble a
scrambled work, to decrypt an encrypted work, or to otherwise
avoid, bypass, remove, deactivate, or impair a technological
measure." Id. § 1201(a)(3)(A).
have previously held that encryption-based security systems,
such as plaintiffs' system, constitute an effective
access control measure for purposes of the DMCA. See DISH
Network L.L.C. v. Sonicview USA, Inc., No.
09-CV-1553-L(WVG), 2012 WL 1965279, at *8 (S.D. Cal. May 31,
2012); Universal City Studios, Inc. v. Reimerdes,
111 F.Supp.2d 294, 318 (S.D.N.Y. 2000) (holding that security
measures based on "encryption or scrambling" are
effective for purposes of the DMCA). In addition, courts have
held that the DCMA applies to various piracy instruments
including passcodes. DISH Network LLC v. DiMarco,
No. 2:11-CV-01962, 2012 WL 917812, at *5 (D. Nev. Mar. 14,
2012) (finding the DMCA applicable to the distribution of
passwords used to access IKS servers); DISH Network LLC
v. Dillion, No. 12-CV-157 BTM(NLS), 2012 WL 368214, at
*3-4 (S.D. Cal. Feb. 3, 2012) (finding that the DMCA and the
FCA apply to piracy-enabling software files); see also
Actuate Corp. v. IBM Corp., No. C-09- 05892 JCS, 2010 WL
1340519, at *9 (N.D. Cal. Apr. 5, 2010) (holding the
"unauthorized distribution of passwords and usernames
avoids and bypasses a technological measure in violation of
have adequately plead a claim for relief under §
1201(a)(2) of the DMCA. In their complaint, they state that
defendant purchased and sold the IKS passcodes, that these
passcodes are primarily designed to circumvent the
plaintiffs' security system, and that they have no
commercially significant purpose other than to do so.
Altogether, the allegations in plaintiffs' complaint,
which are accepted as true, establish that defendant
trafficked in IKS passcodes in violation of the DMCA. As
such, plaintiffs are entitled to default judgment as to their
Sufficiency of the Complaint as to the FCA Claims
605(e)(4) of the FCA is similar to § 1201(a)(2) of the
DCMA. That section of the FCA by makes it unlawful for any
person to import or distribute any device or equipment while
"knowing or having reason to know" that the device
or equipment "is primarily of assistance in the
unauthorized decryption of . . . direct-to-home satellite
services, or is intended for any other activity prohibited by
subsection (a)." 47 U.S.C. § 605(e)(4).
Furthermore, subsection (a) provides that, "[n]o person
not being entitled thereto shall receive or assist in
receiving any interstate or foreign communication by radio
and use such communication ... for his own benefit or for the
benefit of another not entitled thereto." Id.
have held that plaintiffs' satellite television
broadcasts are direct-to-home satellite services for purposes
of § 605(e)(4), and protected radio communications under
§ 605(a). See DirecTV, Inc. v. Webb, 545 F.3d
837, 844 (9th Cir. 2008); DirecTV, Inc. v. Huynh,503 F.3d 847, 852-53 (9th Cir. 2007); Sonicview USA,
2012 WL 1965279, at *10. The FCA also applies to various
piracy instruments including passcodes. D ...