Summary
In DirecTV, the plaintiff, a direct broadcast satellite service provider, alleged that the defendant purchased and used satellite-signal-theft equipment to gain unauthorized access to its signal.
Summary of this case from McCrobie v. Palisades Acquisition Xvi, LLCOpinion
04-CV-297S.
January 22, 2005
DECISION AND ORDER
I. INTRODUCTION
On September 2, 2003, Plaintiff DirecTV, Inc. filed a Complaint alleging that Defendant Timothy Rowland purchased and used an "unlooper" and a "programmer," which are devices that allegedly may be used to illegally intercept and view DirecTV's satellite television programming. Presently before this Court is DirecTV's Motion for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. DirecTV seeks dismissal of Defendant's counterclaim on the grounds that it fails to state a claim upon which relief may be granted. For the reasons discussed below, DirecTV's motion is granted.
In support of its Motion for Judgment on the Pleadings, DirecTV filed a memorandum of law, the Affidavit of Paul I. Perlman, Esq., and a reply memorandum of law. In opposition to DirecTV's motion, Defendant filed a memorandum of law.
II. BACKGROUND
A. Facts
The following facts are assumed true for purposes of the instant motion. DirecTV sent Defendant a letter dated August 7, 2002, accusing him of having purchased and used satellite signal theft equipment to gain unauthorized access to DirecTV's programming. (Answer and Counterclaim, ¶ 13.) Therein, DirecTV demanded payment of an unidentified monetary sum in return for foregoing litigation against Defendant. (Answer and Counterclaim, ¶ 14.) On or about August 21, 2002, DirecTV sent Defendant a second letter threatening litigation, this one containing a copy of a draft federal court Complaint. (Answer and Counterclaim, ¶ 18.)
DirecTV knew or should have known that it had no knowledge that Defendant had intercepted any of DirecTV's programming. (Answer and Counterclaim, ¶¶ 15, 19.) Moreover, DirecTV knew or should have known that it had no evidence from which a reasonable person could conclude that Defendant had intercepted any of DirecTV's programming. (Answer and Counterclaim, ¶¶ 16, 20.) Instead, DirecTV knew or should have known that the devices it alleged Defendant purchased had numerous legitimate business and personal applications not related to the interception of its programming and therefore, could not be considered to have been primarily designed for surreptitious interception of programming. (Answer and Counterclaim, ¶¶ 17, 21.) Further, DirecTV sent similar letters and draft federal court Complaints to other persons in an attempt to extort money from those persons in the same manner as it attempted to extort money from Defendant. (Answer and Counterclaim, ¶ 22.)
In his counterclaim, Defendant contends that DirecTV's actions, as described above, violate New York General Business Law § 349(a).
B. Procedural History
Plaintiff commenced this action on September 2, 2003, by filing a Complaint in the United States District Court for the Western District of New York. On May 18, 2004, DirecTV filed the present Motion for Judgment on the Pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. This Court heard oral argument on September 13, 2004, and reserved decision at that time.
III. DISCUSSION
A. Legal Standard
Rule 12(c) of the Federal Rules of Civil Procedure provides that "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." FED. R. CIV. P. 12 (c). Courts faced with motions under Rule 12(c) apply the same standard used to decide motions brought under Rule 12(b). Patel v. Contemporary Classics of Beverly Hills, 259 F.3d 123, 126 (2d Cir. 2001). The court "must accept all allegations in the complaint as true and draw all inferences in the non-moving party's favor." Id. The case cannot be dismissed unless the court "is satisfied that the complaint cannot state any set of facts that would entitle [plaintiff] to relief." Id.
B. DirecTV's Motion for Judgment on the Pleadings
DirecTV seeks dismissal of Defendant's counterclaim on the basis that (1) he has failed to state a claim, and (2) the counterclaim is barred by the Noerr-Pennington doctrine. In opposition to DirecTV's motion, Defendant argues that he has stated a claim under N.Y. Gen. Bus. L. § 349(a). In addition, while Defendant concedes that the Noerr-Pennington doctrine applies, he maintains that the "sham exception" to the doctrine saves his counterclaim.
C. Defendant's Counterclaim
1. N.Y. Gen. Bus. L. § 349
Defendant's counterclaim is based on DirecTV's pre-litigation activities. In sum, Defendant charges that DirecTV engaged in an unfair and deceptive business practice whereby it attempted to extort money from individuals who it believed purchased certain types of electronic equipment without determining whether the purchases were related to the interception of satellite transmissions. (Answer and Counterclaim, ¶ 7.)
Under N.Y. Gen. Bus. L. § 349, a private party may file suit seeking recovery for injuries to consumers caused by a business's unfair or deceptive practices. N.Y. GEN. BUS. L. § 349(h). Section 349(a) provides that "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." N.Y. GEN. BUS. L. § 349(a). To state a claim under § 349, a plaintiff must allege that (1) the alleged deceptive acts are directed at consumers, (2) the alleged acts misled consumers in a material way, and (3) injury resulted from the deceptive acts. Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 647 N.E.2d 741, 744 (N.Y. 1995).
Several courts in this Circuit have held that a plaintiff cannot state a § 349 claim based solely upon the blanket assertion that the defendant's conduct was "consumer-oriented" or "directed at the general public." See, e.g., MaGee v. Paul Revere Life Ins. Co., 954 F.Supp. 582, 586-87 (E.D.N.Y. 1997);Daniels v. Provident Life Cas. Ins. Co., 00-CV-668E, 2001 WL 877329, at *8 (W.D.N.Y. July 25, 2001); Barroso v. Polymer Research Corp. of Am., 80 F.Supp. 2d 39, 43 (E.D.N.Y. 1999);Allahabi v. New York Life Ins. Co., No. 98-CIV-4334, 1999 WL 126442, at *2-*3 (S.D.N.Y. Mar. 10, 1999).
Moreover, conclusory allegations made on the basis of "information and belief" have been found to "fall far short" of the standard necessary to state a claim under § 349. Tinlee Enters, Inc. v. Aetna Cas. Sur. Co., 834 F.Supp. 605, 610 (E.D.N.Y. 1993) (dismissing § 349 claim while drawing "particular attention to the fact that the most significant contentions made by [the plaintiff] are alleged on the basis of `information and belief'"). To defeat a motion to dismiss, a plaintiff advancing a § 349 claim "must allege facts showing injury or potential injury to the public." Greenspan v. Allstate Ins. Co., 937 F.Supp. 288, 294 (S.D.N.Y. 1996) (emphasis added).
This Court finds that Defendant's counterclaim allegations fall short of the standard required to state a claim under N.Y. Gen. Bus. L. § 349. First, there is no allegation that DirecTV's conduct is directed at consumers. While this Court recognizes that paragraph 22 of the Answer and Counterclaim alleges that DirecTV sent similar letters to "other persons," that allegation is made upon information and belief, which, as stated above, is insufficient. Moreover, Defendant alleges that the letters DirecTV sent to these "other persons" were similar to the ones sent to Defendant. (Answer and Counterclaim, ¶ 22.) That being the case, it is clear that these "other persons" were individuals who were allegedly obtaining DirecTV's product illegally, not consumers legitimately looking to do business with DirecTV.
Second, Defendant has not alleged that DirecTV engaged in its allegedly deceptive activity in the conduct of business trade or commerce. That is, DirecTV's litigation letters were not sent in the course of conducting business. Rather, DirecTV contacted Defendant (and the "other persons") by letter with the goal of enforcing its legal rights against an individual that it believed was illegally intercepting its television programming. As such, this Court finds that Defendant has failed to alleged conduct by DirecTV that is consumeroriented. See Oswego Laborers', 647 N.E.2d at 744.
Third, Defendant has failed to allege that he was misled in a material way. The letters advise Defendant that DirecTV would pursue litigation related to its belief that Defendant purchased and used interception devices in violation of the Federal Communications Act if a settlement could not be reached. DirecTV in fact pursued the litigation it warned Defendant it would initiate.
Finally, Defendant's counterclaim does not contain sufficient allegations of injury. For example, Defendant does not allege that he was induced to actually pay money to DirecTV. Defendant alleges only that he is entitled to the maximum statutory penalty and reasonable attorney fees. (Answer and Counterclaim, ¶ 24.) This is insufficient to fulfill the requirement that an injury be alleged. See Greenspan, 937 F.Supp. at 294.
For the reasons stated above, this Court finds that Defendant has failed to state a claim under N.Y. Gen. Bus. L. § 349.
2. The Noerr-Pennington Doctrine
In addition to not stating a claim, this Court finds that Defendant's counterclaim must be dismissed because it is barred by the Noerr-Pennington doctrine, which derives from two United States Supreme Court cases — E.R.R.s Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) and United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965). The Noerr-Pennington doctrine arises out of antitrust law, but has been expanded to cover other activities based on First Amendment principles. See Primetime 24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 99-100 (2d Cir. 2000). It is a judicially-created doctrine that shields from liability individuals who exercise their First Amendment right to petition the government for redress. Most pertinent here, the doctrine has been extended to prelitigation activities, such as threats to sue and demand letters. Primetime 24, 219 F.3d at 100 (collecting cases).
The Noerr-Pennington doctrine, however, is not absolute. It is effectively limited by the "sham" exception, "which covers cases where the defendant intended to use the petition process merely to harass." Eaton v. Newport Bd. of Educ., 975 F.2d 292, 298 (6th Cir. 1992) (quoting City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 111 S.Ct. 1344, 113 L.Ed.2d 382 (1991)). To establish the "sham" exception, the Second Circuit requires the litigant to show that the litigation in question is "(1) objectively baseless, and (2) an attempt to interfere directly with the business relationships of a competitor through the use of the governmental process — as opposed to the outcome of that process — as an anticompetitive weapon." Primetime 24, 219 F.3d at 101 (citing Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49, 51, 113 S.Ct. 1920, 1923, 123 L.Ed.2d 611, 618 (1993)).
While the second factor appears inapplicable outside of the antitrust context, this Court finds that Defendant's invocation of the sham exception is nonetheless unfounded. It is uncontested that prior to filing suit, DirecTV had obtained information from a third-party that Defendant purchased equipment that could be used to illegally obtain DirecTV's satellite television programming. This litigation is therefore not objectively baseless. Accordingly, this Court finds that Defendant's counterclaim fails for the additional reason that it is barred by the Noerr-Pennington doctrine.
IV. CONCLUSION
For the foregoing reasons, DirecTV's Motion for Judgment on the Pleadings seeking dismissal of Defendant's counterclaim is granted.
V. ORDERS
IT HEREBY IS ORDERED, that DirecTV's Motion for Judgment on the Pleadings (Docket No. 3) is GRANTED.
SO ORDERED.