In the
United States Court of Appeals
For the Seventh Circuit
Nos. 06-2219 & 06-2221
DIRECTV, INC.,
Plaintiff-Appellee,
v.
D AVID B ARCZEWSKI and JONATHAN W ISLER,
Defendants-Appellants.
Appeals from the United States District Court for the
Southern District of Indiana, Indianapolis Division.
Nos. 1:03-cv-1879 & -1930—David F. Hamilton, Judge.
A RGUED F EBRUARY 21, 2007—D ECIDED M AY 13, 2010
Before E ASTERBROOK, Chief Judge, and FLAUM and
S YKES, Circuit Judges.
E ASTERBROOK, Chief Judge. A jury concluded that
Jonathan Wisler intercepted encrypted signals from the
DirecTV satellite system without authorization and that
David Barczewski furnished devices to assist others to
steal the signals. See 18 U.S.C. §2511; 47 U.S.C. §605.
Ample evidence supports this verdict: both defendants
bought electronic gear from a merchant that advertised
2 Nos. 06-2219 & 06-2221
its products as designed to facilitate theft of DirecTV
signals, and both participated in an online discussion
group, called the “Pirate’s Den,” whose members ex-
changed advice about how to decrypt DirecTV signals
without paying. Both defendants insisted that the “smart
cards” and associated gear they purchased had legal
uses. That much is uncontested, but the jury did not
have to believe defendants’ claim that the gear had been
put to a legal rather than an illegal use. Nor did the
jury have to believe Wisler’s assertion that, as a DirecTV
subscriber, he had no reason to steal signals. After buying
a smart card and joining the Pirate’s Den, Wisler cut
back to the lowest tier of service; a jury could conclude
that he descrambled other programs, such as sports and
movies, without paying.
Most of defendants’ legal arguments are feeble. They
contend, for example, that DIRECTV, Inc., the provider of
DirecTV service, is not aggrieved by signal theft and
therefore cannot sue under 18 U.S.C. §2520, which pro-
vides a private right of action for some violations of
18 U.S.C. §2511, an anti-interception statute. Every court
of appeals that has considered this subject has held
that DIRECTV is entitled to sue under §2520. See
DIRECTV, Inc. v. Webb, 545 F.3d 837 (9th Cir. 2008);
DIRECTV, Inc. v. Bennett, 470 F.3d 565 (5th Cir. 2006);
DIRECTV, Inc. v. Pepe, 431 F.3d 162 (3d Cir. 2005);
DIRECTV, Inc. v. Nicholas, 403 F.3d 223 (4th Cir. 2005). We
agree with that conclusion, as well as the related point
that DIRECTV is a “person aggrieved” entitled to sue
under §605. See DIRECTV, Inc. v. Seijas, 508 F.3d 123 (3d
Cir. 2007); DIRECTV, Inc. v. Budden, 420 F.3d 521, 526–28
Nos. 06-2219 & 06-2221 3
(5th Cir. 2005); see also United States v. Norris, 88 F.3d 462,
468–69 (7th Cir. 1996).
Nonetheless, defendants insist, an exception to §2511
makes the private right of action useless to DIRECTV.
The exception reads:
It shall not be unlawful under this chapter . . . for
any person—
(i) to intercept or access an electronic com-
munication made through an electronic
communication system that is configured
so that such electronic communication is
readily accessible to the general public;
(ii) to intercept any radio communication
which is transmitted—(I) by any station
for the use of the general public, or that
relates to ships, aircraft, vehicles, or per-
sons in distress; (II) by any governmental,
law enforcement, civil defense, private
land mobile, or public safety communica-
tions system, including police and fire,
readily accessible to the general public;
(III) by a station operating on an autho-
rized frequency within the bands allocated
to the amateur, citizens band, or general
mobile radio services; or (IV) by any ma-
rine or aeronautical communications sys-
tem[.]
18 U.S.C. §2511(2)(g). Subsection (ii)(IV), which exempts
“any marine or aeronautical communications system”, is
4 Nos. 06-2219 & 06-2221
the one on which defendants rely. During trial defendants’
lawyer asked one of DIRECTV’s witnesses whether it
operated an “aeronautical communications system”;
the witness answered “yes” and in so doing scuttled the
case, defendants maintain.
Like the district court, we doubt that the witness was
thinking about §2511(2)(g)(ii)(IV). No matter. Whether
or not the witness had this statute in mind, the answer
is not dispositive. Judges, not witnesses, are respon-
sible for interpreting statutes. See Bammerlin v. Navistar
International Transportation Corp., 30 F.3d 898, 900–01 (7th
Cir. 1994). Section 2511(2)(g) as a whole deals with
unencrypted communications, broadcast in the clear to
promote public safety or open discourse. The phrase
“aeronautical communications system” is not defined in
§2511 or anywhere else in the United States Code; this is
its sole appearance. Only one appellate opinion uses the
phrase, and following the lead of the Federal Communica-
tions Commission—not to mention the dictionary—it
understands this language to mean a system of communi-
cations to and from airplanes. See Aeronautical Radio, Inc. v.
FCC, 928 F.2d 428, 434 (D.C. Cir. 1991). Whatever else it
may be, DirecTV is not a system for issuing navigation in-
structions to aircraft or receiving their distress calls.
DirecTV therefore is not an “aeronautical communica-
tions system” under §2511(2)(g)(ii)(IV).
Answering special interrogatories, the jury concluded
that Barczewski had distributed four unauthorized de-
cryption devices and that Wisler had intercepted
DirecTV’s signal for 435 days without authorization. The
Nos. 06-2219 & 06-2221 5
judge used these answers to calculate damages. The
penalty of $44,000 against Barczewski depended on
§605(e)(3)(C)(i)(II): the judge awarded DIRECTV $10,000
for each device, see §605(e)(4), and $1,000 for each (vicari-
ous) interception, see §605(a). Subsection (II) allows the
court to award “for each violation of subsection (a) of this
section . . . a sum of not less than $1,000 or more than
$10,000, as the court considers just, and for each violation
of paragraph (4) of this subsection . . . an aggrieved party
may recover statutory damages in a sum not less than
$10,000, or more than $100,000, as the court considers just.”
DIRECTV requested, and the district judge used, the low
point of these ranges for each of Barczewski’s violations.
Wisler’s penalty of $43,500 ($100 per day of intercep-
tion) was calculated under 18 U.S.C. §2520(c)(2), which
says that “the court may assess as damages whichever is
the greater of—(A) the sum of the actual damages suffered
by the plaintiff and any profits made by the violator as
a result of the violation; or (B) statutory damages of
whichever is the greater of $100 a day for each day of
violation or $10,000.” The judge rejected Wisler’s argu-
ment for a lower figure, because Rodgers v. Wood, 910
F.2d 444, 448 (7th Cir. 1990), holds that the highest
penalty calculated under §2520(c)(2) is mandatory.
Rodgers leaves district judges with no discretion to
exercise—as a result the court need not (indeed, must
not) consider defendants’ circumstances, and the jury’s
only role is to specify the inputs to the formula (the
number of days or devices). See BMG Music v. Gonzalez,
430 F.3d 888, 891–93 (7th Cir. 2005).
6 Nos. 06-2219 & 06-2221
Section 2520 was overhauled in 1986, and Rodgers was
the nation’s initial appellate decision on the question
whether the statutory penalties are mandatory or permis-
sive. More recently four other circuits have addressed
the question—and all four have disagreed with Rodgers
and held that §2520(c)(2) allows district judges not to
award damages. See Nalley v. Nalley, 53 F.3d 649, 651–53
(4th Cir. 1995); Dorris v. Absher, 179 F.3d 420, 429–30 (6th
Cir. 1999); Reynolds v. Spears, 93 F.3d 428, 433–35 (8th Cir.
1996); DIRECTV, Inc. v. Brown, 371 F.3d 814, 817–18 (11th
Cir. 2004). Developments that leave this circuit all by
its lonesome may justify reexamination of our precedents,
the better to reflect arguments that may not previously
have been given full weight and to spare the Supreme
Court the need to intervene. See United States v. Corner,
598 F.3d 411 (7th Cir. 2010) (en banc); United States v.
Carlos–Colmenares, 253 F.3d 276 (7th Cir. 2001).
Section 2520(c)(2) says that the judge “may” award
certain damages. “May” is permissive. DIRECTV contends
that the permissive quality of “may” is overridden by
the phrase “the greater of”, but that’s not sound: “the
greater of” tells the judge to compute the ceiling
separately under subsections (A) and (B) and then use
the higher of the two (a process repeated in subsec-
tion (B), which offers two ways to set statutory damages).
Telling the judge to work through all of the possibilities
to see which number is highest does not compel the
court to award that maximum. A phrase such as “the
district court may award X or Y” would oblige the judge
to use either X or Y, not some lower or intermediate
number, but §2520(c)(2) does not read this way. It says
Nos. 06-2219 & 06-2221 7
that the judge “may” award damages, then gives a for-
mula. This is the language of discretion, not command.
Rodgers did not see any significance in “the greater of”.
Instead it looked to the language of §2520 before the
1986 amendment. The original language of §2520(c) was:
“Any person whose wire or oral communication is inter-
cepted, disclosed, or used in violation of this chapter
shall (1) have a civil cause of action against any person
who intercepts, discloses, or uses . . . such communications,
and (2) be entitled to recover from any such person—
(a) actual damages but not less than liquidated damages
computed at the rate of $100 a day for each day of viola-
tion or $1,000, whichever is higher”. Pub. L. 90–351,
Title III, §802, 82 Stat. 223 (June 19, 1968). The panel in
Rodgers treated the word “shall” as making the maxi-
mum award mandatory and then observed that the
legislative history in 1986 did not explain why “shall” had
been changed to “may”. The panel continued: “In the
absence of any such statement, we are hesitant to read a
grant of discretion to the district courts where none had
been permitted in the past.” 910 F.2d at 448.
As our colleagues in other circuits have remarked, this
unwillingness to give effect to a change in statutory
language unless the legislative history contains a reas-
suring “We really mean it!” is incompatible with deci-
sions of the Supreme Court. See, e.g., Swain v. Pressley,
430 U.S. 372, 378–79 (1977); Harrison v. PPG Industries, Inc.,
446 U.S. 578, 592 (1980) (“it would be a strange canon
of statutory construction that would require Congress to
state in committee reports or elsewhere in its delibera-
8 Nos. 06-2219 & 06-2221
tions that which is obvious on the face of a statute”).
Legislative history comes into play only when necessary
to decode an ambiguous enactment; it is not a sine qua
non for enforcing a straightforward text.
The 1968 version was itself unclear: the placement of
“shall” before the clause creating a private right of action
sounded permissive rather than mandatory—certainly it
does not command all injured parties to sue! Or it may
have meant that the prevailing party “shall” receive
some compensation, while leaving the amount open.
“Shall” sometimes means “may” in legal texts, which is
why good drafters use “must” for mandates. See Gutierrez
de Martinez v. Lamagno, 515 U.S. 417, 432–33 n.9 (1995);
Bryan A. Garner, A Dictionary of Modern Legal Usage 939–42
(2d ed. 1995). The change from “shall” to “may” could
have been designed to make explicit a permissive
meaning that had been there all along. Whether or not
“may” in the 1986 revision was designed as a change,
however, does not matter; all we need to do is acknowl-
edge that “may” is permissive.
Rodgers gave a second reason:
in amending the damages section, Congress recog-
nized that the new penalty structure would be too
severe for some violations of the Act and ad-
dressed that concern by creating an exception to
the penalty structure for the interception of
certain private satellite video communications. 18
U.S.C. §2520(c)(1). This exception originated in
concerns expressed by Senators Laxalt, Grassley,
DeConcini and Simpson during subcommittee
Nos. 06-2219 & 06-2221 9
consideration “about the bill’s penalty structure
for the interception of certain satellite transmis-
sions by home viewers,” and it culminated in an
amendment to the bill offered by Senator Grassley.
S. Rep. No. 99–541, 99th Cong. 2d Sess. 6–7, re-
printed in 1986 U.S. Code Cong. & Admin. News
3555, 3560–61. The fact that Congress chose to
address concerns about the severity of the new
penalty structure by creating a specific excep-
tion for certain actions suggests that Congress
intended to limit the types of violations for
which the penalties could be avoided. This con-
flicts with and ultimately defeats an inference
that Congress intended to grant district courts
the discretion to decide the cases in which the
more severe penalties should attach.
910 F.3d at 448. Like the four other circuits that have
considered this subject since Rodgers, we find it hard to
infer from graduated awards that the higher maximum
must be a minimum.
To show the context, here is the current version of
§2520(c) in full:
(1) In an action under this section, if the conduct
in violation of this chapter is the private viewing
of a private satellite video communication that is
not scrambled or encrypted or if the communica-
tion is a radio communication that is transmitted
on frequencies allocated under subpart D of part 74
of the rules of the Federal Communications Com-
mission that is not scrambled or encrypted and the
10 Nos. 06-2219 & 06-2221
conduct is not for a tortious or illegal purpose or
for purposes of direct or indirect commercial
advantage or private commercial gain, then the
court shall assess damages as follows:
(A) If the person who engaged in that conduct
has not previously been enjoined under section
2511(5) and has not been found liable in a
prior civil action under this section, the court
shall assess the greater of the sum of actual
damages suffered by the plaintiff, or statutory
damages of not less than $50 and not more
than $500.
(B) If, on one prior occasion, the person who
engaged in that conduct has been enjoined
under section 2511(5) or has been found liable
in a civil action under this section, the court
shall assess the greater of the sum of actual
damages suffered by the plaintiff, or statutory
damages of not less than $100 and not
more than $1000.
(2) In any other action under this section, the court
may assess as damages whichever is the greater
of—
(A) the sum of the actual damages suffered by
the plaintiff and any profits made by the viola-
tor as a result of the violation; or
(B) statutory damages of whichever is the
greater of $100 a day for each day of violation
or $10,000.
Nos. 06-2219 & 06-2221 11
Section 2520(c)(1) deals with signals sent in the clear and
not intercepted for a commercial or illegal purpose;
§2520(c)(2) addresses other situations, such as the inter-
ception of DirecTV’s encrypted signals. Subsection (c)(1)
sets lower damages, doubtless because Members of
Congress thought the wrongdoing less serious. To say
that the penalty for the non-commercial interception of
unscrambled signals cannot exceed $1,000 (or actual
loss) does not imply that the penalty for intercepting
scrambled signals must be at least $10,000. The difference
in perceived seriousness is reflected in the different
maximum penalties, not in a mandate to impose the
highest possible penalty.
One more context is worth considering: the relation
between 18 U.S.C. §2520(c) and 47 U.S.C. §605(e). Both
address aspects of signal piracy. Section 605(e)(4) covers
Barczewski (who distributed devices that others could
use to decrypt signals), while Wisler (who watched
pirated programs on his own TV) comes within both
§605(a), (e)(3)(C)(i)(II) and §2520(c)(2). Section 605(e)
affords discretion within ranges (we set out the language
above). Section 2520(c)(2) gives caps rather than ranges.
It is difficult to see why district judges would have dis-
cretion when a penalty is determined under §605(e) but
not when it depends on §2520(c). Section 605(e) took its
current form in 1988, two years after the amendment
that gave §2520(c) its current text. Although it is haz-
ardous to assume that one Congress “knows” what
another did, the discretionary ranges established for
§605(e) in 1988 do make more sense if they exemplify
a belief that statutory damages under §2520(c) have a
discretionary component; otherwise there is a jarring
12 Nos. 06-2219 & 06-2221
clash between two statutes covering overlapping subject
matter.
We overrule the portion of Rodgers holding that award
of the maximum damages specified in §2520(c)(2) is
mandatory.† We conclude that the district court has
discretion not to award statutory damages under the
statutory formula.
Having said this, we add a few words about one question
we are not deciding: Whether a judge has discretion to
award damages under §2520(c), but less than the maxi-
mum. Some of the four other circuits that have given
“may” its natural reading might have assumed that the
only choice is between $0 and the statutory maximum,
but none actually holds that. Depriving the judge of
discretion to choose an intermediate outcome could
disserve both side’s interests. A judge who thinks that
some damages are appropriate, but that the maximum is
too high for the defendant’s financial or other circum-
stances, would be driven either to award $0 (sacrificing
deterrence and compensation) or the maximum (which
may impose an unwarranted burden on the defendant’s
family).
The fourth circuit, which read “may” in Nalley to allow
judges to omit damages, recently reversed a district
judge who exercised that discretion in a signal pirate’s
†
This opinion has been circulated to all active judges under
Circuit Rule 40(e). No judge favored a hearing en banc. Circuit
Judge Hamilton did not participate in the consideration or
decision of this appeal.
Nos. 06-2219 & 06-2221 13
favor without giving serious consideration to the adverse
effects of letting misconduct go unsanctioned. See
DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 326–28 (4th
Cir. 2008). And the fact that subsection (c)(1), which
deals with less serious violations, requires some penalty
(recall that (c)(1) uses “shall” while (c)(2) uses “may”),
implies that it would often be an abuse of discretion to
give the more serious violators subject to (c)(2) a free pass.
Yet if the need to impose some penalty leaves no alterna-
tive to the statutory maximum, we are back to Rodgers
in practical effect, though through a different interpre-
tive route.
Section 605(e), which covers not only persons who
pirate signals for their own use but also persons who
help others steal encrypted signals (a more serious trans-
gression), allows district judges discretion over the
amount of the penalty. Perhaps §2520(c)(2) should be
read the same way by treating “may” as applicable to all
of the ensuing language, so that the greater power to
pretermit any penalty entails the lesser power to pretermit
some of the potential penalty. Or perhaps a district
judge should first make any appropriate award under
§605(e) and turn to §2520(c) only if §605(e) is unavailable
or does not authorize an adequate penalty. By treating
§605(e) and §2520(c) together, a judge may be able to
achieve appropriate damages even if §2520(c) imposes
an all-or-none choice. That is not a question we need
address today. The district court should have the first
crack at determining the appropriate penalty for Wisler’s
conduct.
14 Nos. 06-2219 & 06-2221
Defendants maintain that, because they are persons
of ordinary means, high penalties necessarily are an
abuse of discretion. Yet the statute does not require
judges to set penalties according to wealth, and we held
in BMG Music that serious penalties for the theft of intel-
lectual property are not confined to the wealthy. One
economically sound way to determine a penalty is to
divide the harm done by the probability of apprehension.
See Gary S. Becker, Crime and Punishment: An Economic
Approach, 76 J. Pol. Econ. 169 (1968), a theory of sanctions
that played a role in his receipt of a Nobel Prize in
1992. The approach has been widely used, including
(for example) the construction of tables in the Sen-
tencing Guidelines. See United States v. Turner, 998 F.2d 534
(7th Cir. 1993). Thus if signal theft enables a person to
avoid paying $200 in fees to DirecTV, and only 1 in 50
signal thieves is caught, the appropriate penalty would
be $10,000. If the loss is lower, or the probability of being
caught greater, the appropriate penalty goes down; if the
loss is greater, or the probability of detection lower, the
appropriate penalty goes up. Statutory damages of $100
per day could well be apt, if the probability of detection
is low enough. The wrongdoer’s wealth plays no role
in such an approach.
District judges have discretion to consider other
reasoned approaches too; there is latitude in the word
“may.” The district judge used that latitude to give
Barczewski the lowest available penalty. But judges
need not go easy on hourly wage-earners who decide to
steal TV signals, any more than they need go easy on
people who choose other forms of theft to supplement
Nos. 06-2219 & 06-2221 15
the family budget. People who do not want to pay the
market price for goods or services must refrain from
theft and cannot complain if the price of crime is steep.
Defendants make a number of other arguments, only
one of which requires even brief comment. Contending
that DIRECTV had made a frivolous post-trial motion
for a protective order, defendants asked a magistrate
judge to award sanctions. The magistrate judge declined.
Because this subject was never presented to or passed on
by the district judge, it is not included in the final judg-
ment and cannot be reviewed in this court. Magistrate
judges neither grant nor deny motions such as the
one defendants made; all they can do is recommend a
disposition to the district judge. See Alpern v. Lieb, 38
F.3d 933 (7th Cir. 1994). In the absence of a consent
under 28 U.S.C. §636(c)(1), only the decisions of district
judges are open to review in a court of appeals, and defen-
dants’ failure to follow through with a request to the
district judge means that there is no decision to be re-
viewed.
The judgment is affirmed except with respect to the
award of statutory damages against Wisler, which is
vacated. His case is remanded for further proceedings
consistent with this opinion.
5-13-10