CoxCom, Inc. v. ChaffeeCoxCom, Inc. v. Chaffee
Appellants Jon Chaffee, Amy Chaffee, and Ramalda Bou appeal from the district court’s decision granting summary judgment and damages to appellee CoxCom, Inc., after finding that appellants violated the Cable Communications Policy Act of 1984,
I.
A. Background Facts
CoxCom offers cable television services to subscribers in Rhode Island, Massachusetts, and Connecticut. CoxCom leases set-top electronic decoding equipment (commonly known as “cable boxes”) to its subscribers to descramble incoming signals for viewing. The cable box also transmits certain information from subscribers back to CoxCom, including billing information associated with the purchase of pay-per-view programming. 1
At issue here is a digital cable filter, a device that can affect those return transmissions. These filters block low-frequency signals, typically those below 50mhz. Normally, after a subscriber purchases and views pay-per-view programming, the subscriber’s cable box sends a transmission to the cable company with data on the purchase. This transmission is emitted at a low frequency, 8.096mhz. With the filter installed, pay-per-view purchases of up to $300 would not register on the cable company’s central computer. After accumulating $300 of unbilled charges, the cable box would “lock out” additional pay-per-view purchases. The filters are not illegal, and they also have innocuous uses, such as allowing cable television subscribers to enhance viewing quality by filtering out interference from FM radio broadcast towers, shortwave radios, and home appliances.
Appellants, 2 residents of Rhode Island at the relevant time, sold the filters at computer trade shows, including in Rhode Island and Connecticut. Appellants sold the filters with an instruction sheet stating that the filter was designed to “test” the performance of pay-per-view billing systems and further providing:
By having this filter connected to your digital cable box any and all programming that can be received by pressing the ‘Buy,’ ‘Order’ or ‘Purchase’ button on your remote will be viewed without the billing information reaching the cable company. We ARE NOT suggesting or implying that anyone who purchases this tool participate in any theft of cable programming [and] therefore, it is imperative that you notify your cable company of any programs that you view while using this filter so they will know to bill you accordingly.
A digital cable filter will ... block out pay per view and movie order charges from your cable company, giving you free pay per view. Therefore, it is mandatory that you notify your cable company of the extra orders. 3
Appellants made statements to their customers in the course of selling the filters that were recorded by CoxCom’s investigators. Amy Chaffee stated that the filters actually worked, and that they worked specifically on CoxCom’s equipment. She also warned a prospective customer that the cable box would only hold a certain amount of unbilled pay-per-view charges, which she estimated at $500.
Appellants also provided their contact information to filter purchasers for customer support and service. Jon Chaffee made the following statements in email correspondence with filter purchasers: “It is only for pay per view, not HBO and Showtime. Here is [sic] the directions;” “The filter only works for pay for views ... It doesn’t work for HBO, Showtime and other premium channels. You must reset the box before removing or you will be charged;” “Here is [sic] the instructions for the cable filter. Sorry it only works for pay per view.”
CoxCom’s undercover investigators purchased eighteen digital cable filters from appellants at computer trade shows in Connecticut and Rhode Island and in a separate sale arranged over the telephone and consummated in a parking lot in Rhode Island. CoxCom subsequently commenced this action in district court, alleging that the filter sales violated
B. Procedural History
Immediately after filing its complaint, CoxCom moved ex parte for a temporary restraining order (“TRO”) seeking to seize appellants’ business records and computers and to enjoin appellants from selling, transferring, storing or distributing digital cable filters pending the resolution of the matter. The court granted both requests, and the parties then entered into a preliminary injunction on consent, under the terms of the TRO.
Appellants’ answer requested a jury trial. 4
After the close of discovery, CoxCom moved for summary judgment. Appellants motion objected and cross-moved for summary judgment. The magistrate judge recommended that CoxCom’s motion be granted and that appellants’ be denied. After de novo review, the district court adopted the Report and Recommendation in full over several objections by appellants.
With appellants’ liability established, the district court referred the matter to the magistrate judge for a Report and Recom
The magistrate judge recommended that CoxCom be awarded statutory and enhanced damages under
On appeal, appellants argue first that the district court had no jurisdiction over the matter because CoxCom lacked standing to sue. They next argue that summary judgment was improperly granted to CoxCom on the questions of liability under
II.
A. Article III Standing
“The requisite elements of Article III standing are well established: A plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief.’ ”
Hein v. Freedom From Religion Found., Inc.,
— U.S. -,
To establish constitutional standing at the summary judgment stage, “a plaintiff cannot rest on mere allegations, but must set forth by affidavit or other evidence specific facts which for purposes of the summary judgment motion will be taken to be true.”
Libertad v. Welch,
The Supreme Court in
Lujan v. Defenders of Wildlife,
A particularized injury is one that “affect[s] the plaintiff in a personal and individual way.”
Lujan,
The “actual or imminent” requirement means “not conjectural or hypothetical.”
Lujan,
Appellants argue that CoxCom lacks constitutional standing because it was not injured.
7
They point to
DirecTV, Inc. v. Treworgy,
From this evidence, we conclude that CoxCom has met both the “concrete and particularized” and “actual or imminent” requirements for constitutional standing. CoxCom can show a concrete injury in that it is personally affected by the sale of cable filters. Like the allegations of water reduction in the aggregate plead by petitioners in
Bennett,
CoxCom has introduced sufficient evidence of harm to cable service providers like itself with a
B. Summary Judgment Ruling
We review the district court’s summary judgment rulings de novo, viewing the facts in the light most favorable to appellants.
Perry v. Wolaver,
1.
(a) Unauthorized interception or receipt or assistance in intercepting or receiving service; “assist in intercepting or receiving” defined
(1) No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law.
(2) For the purpose of this section, the term “assist in intercepting or receiving” shall include the manufacture or distribution of equipment intended by the manufacturer or distributor (as the case may be) for unauthorized reception of any communications service offered over a cable system in violation of subpara-graph (1).
Appellants specifically challenge two aspects of the district court’s determination that they violated
Appellants’ first argument focuses on the word “reception,” contending that because filters affect only the outgoing (and not the incoming) transmissions between a subscriber’s cable box and the cable company, filters therefore do not affect “reception” and their distribution or use is not prohibited by
Appellants’ transparent attempt at wordplay fails. A subscriber using a filter to view pay-per-view “receives” programming. That programming is unauthorized, because the subscriber has interfered with the cable company’s billing mechanism in contravention of the subscriber’s contract with the cable company. The filter itself may not act upon the reception of cable programming, but the record is clear that a filter is “equipment” that “assists” a subscriber in “unauthorized reception” of pay-per-view programming, in violation of
Appellants’ next argument is that they did not intend the filters to be used in contravention of
For
Second, the filters here actually did what appellants advertised: they blocked pay-per-view billing data.
See Time Warner,
Appellants next argue that the district court improperly granted summary judgment to CoxCom on the DMCA claims. The DMCA provides in relevant part:
No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—
(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or
(C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.
We have a dearth of case law on this statute, so we turn outside of our circuit for guidance. To establish liability under the DMCA, a plaintiff must establish two elements: “(1) defendant trafficked in a technology; and (2) the technology was primarily designed or produced to circumvent conditional access controls to protected works, or has limited commercially significant use other than such circumvention.”
Directv Inc. v. Little,
C. Jury Trial Waiver
Appellants argue that because they requested a jury trial in their answer, they were entitled under the Seventh Amendment to a jury trial on damages.
The case law suggests that a party’s participation in a bench trial without objection constitutes a waiver of a jury trial right.
See United States v.1966 Beechcraft Aircraft Model King Air,
Here, despite their original request, appellants did not specifically object to the lack of a jury, and their conduct indicates active participation both leading up to and during the bench trial. In an unsuccessful attempt to disqualify the magistrate judge in favor of allowing the district court to decide the damages issue, the appellants’ moving papers said nothing about a jury trial. They argued only that not all parties had agreed to having a magistrate judge decide the issue. Jon Chaffee, proceeding pro se, and counsel for Amy Chaffee and Ramalda Bou each cross-examined CoxCom’s witnesses at the bench trial (although they did not present any evidence). Appellants’ conduct constitutes waiver.
Jon Chaffee’s pro se status does not compel a different result. We have not specifically addressed a situation where a jury trial was demanded but a pro se party’s later conduct was held to waive that demand.
12
The Seventh Circuit has held that in “exceptional circumstances,” a pro se litigant will not be subject to jury waiver.
See Lovelace v. Dall,
D. Permanent Injunction
We review a district court’s issuance of a permanent injunction for an abuse of discretion.
eBay Inc. v. MercExchange, L.L.C.,
Appellants argue that the court abused its discretion in granting the permanent injunction forbidding appellants’ future possession, sale, or distribution of digital cable filters, challenging the magistrate
A plaintiff seeking a permanent injunction is traditionally required to satisfy a four-factor test: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”
eBay Inc.,
We are satisfied that the findings of the magistrate judge and the district court are sufficient to support the permanent injunction. The first two of the four factors are satisfied on a showing of “substantial injury that is not accurately measurable or adequately compensable by money damages.”
Ross-Simons of Warwick, Inc.,
Moreover, appellants’ argument about the brevity of the magistrate judge’s statement is misleading. The district court’s earlier findings in support of the TRO and preliminary injunction, combined with CoxCom’s success on the merits, supports the permanent injunction.
13
See Largess v. Sup. Jud. Ct. for State of Mass.,
III.
For the reasons explained above, we affirm the district court in all respects.
Notes
. Other cable services providers also operate in this fashion.
. Jon and Amy Chaffee, a married couple, did business as "Electronic Imports” and "Chaf-fee International.” Jon Chaffee engaged in correspondence and technical support, sometimes under a pseudonym, in addition to selling some of the cable filters. Amy Chaffee sold cable filters. Ramalda Bou, employed by the Chaffees, also sold cable filters. Appellants have filed two sets of briefs on appeal: Amy Chaffee and Bou together, as they are represented jointly, and Jon Chaffee, as he has his own representation. The nature of the questions on appeal do not require us to address the claims separately.
. The instructions to operate the cable filters are not specific to a particular cable company’s technology or equipment.
. Appellants counterclaimed for intentional infliction of emotional distress, but that claim was dismissed and is not at issue on appeal.
. Jon Chaffee apparently tried to submit certain exhibits but failed to introduce them into evidence at the bench trial. Both CoxCom and Jon Chaffee submitted post-hearing briefs, but both briefs were rejected as untimely.
. The table of contents of Jon Chaffee’s appellate brief refers to an argument that the district court erred in allowing his home to be searched, items to be seized, and his assets to be frozen. The brief itself contains no actual argument and we will treat this issue as waived. "[Tissues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived.”
United States v. Zannino,
. The question of constitutional standing is not the same as establishing CoxCom’s standing to sue as an "aggrieved person” under
. Appellants attack the magistrate judge's statement that he had "performed independent research,” contending that this was error given the summary judgment posture of the litigation. We interpret this statement to indicate only that the magistrate judge performed further legal research, as it does not appear that he went beyond the scope of the summary judgment record.
. Appellants do not challenge the determination that CoxCom broadcasts "communication services” within the meaning of the statute.
. Appellants are prevented by waiver from pressing any further arguments as to the granting of summary judgment on the
. Appellants make several other DMCA-re-lated arguments; they are waived as not argued below.
Iverson,
. In
Rowlett v. Anheuser-Busch, Inc.,
. In granting the preliminary injunction, the court specifically found that CoxCom had demonstrated a likelihood of success on the merits, and that absent the court’s grant of relief, CoxCom would suffer "substantial and ongoing irreparable harm in the form of, inter alia, lost profits, lost opportunities, and a diminishment in the value of its goodwill, as well as other irreparable harm, resulting from defendants' digital filter sales.” The court went on to say that "the resulting harm to plaintiff in not granting this relief is far greater than any injury this relief will cause to the defendant; and, [] the relief sought would promote the public interest.”
. While we do not reach the question here, we note that where Congress has specifically authorized injunctive relief, as is the case with