United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
August 9, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-20751
DIRECTV INC,
Plaintiff-Appellee,
versus
JEFF BUDDEN,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Texas
Before HIGGINBOTHAM, BARKSDALE, and CLEMENT, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
Jeff Budden purchased and distributed over 100 devices that
are primarily used to illegally gain access to satellite services.
Budden appeals the district court’s grant of summary judgment
against him on a civil claim for violations of 47 U.S.C.
§ 605(e)(4), which prohibits distributing devices “knowing or
having reason to know” that they are primarily of assistance in the
unauthorized decryption of satellite services. We affirm.1
I
1
We heard oral argument in this case on May 11, 2005, with two related
cases, which are also issued today. See DIRECTV, Inc. v. Robson, No. 04-30861,
--- F.3d ---- (5th Cir. Aug. 9, 2005); DIRECTV, Inc. v. Minor, No. 04-50793, ---
F.3d ---- (5th Cir. Aug. 9, 2005).
DIRECTV, Inc. (“DTV”) is a nationwide provider of direct-to-
home satellite programming, including movie channels, sports, major
cable networks, and local channels. DTV offers products on both a
subscription and pay-per-view basis, and it encrypts--that is,
digitally scrambles--its satellite broadcasts to guard against
unauthorized access. A typical system consists of a small DTV-
compatible satellite dish, a DTV receiver (also known as an
“integrated receiver/decoder” or “IRD”), and a DTV access card.
The dish connects to the receiver, which in turn connects to the
user’s television. A DTV access card, when inserted into the
receiver, allows the receiver to decrypt the various channels or
services that the user has purchased. A DTV access card is a smart
card, similar in size and shape to a credit card, and also contains
an embedded computer and memory.
Numerous “pirate access devices”2 have been developed to
circumvent the necessity of a valid access card, thereby allowing
users to illegally decrypt the DTV satellite signal and thus obtain
DTV programming without purchasing it. Such piracy can take
various forms, including modifying a valid access card or using a
device to take the place of a valid access card.
In order to combat the proliferation of illegally modified
2
See DIRECTV, Inc. v. Nicholas, 403 F.3d 223, 224 (4th Cir. 2005) (“pirate
access devices” are those devices “that can surreptitiously steal DIRECTV’s
transmissions”); DIRECTV, Inc. v. Brown, 371 F.3d 814, 816 (11th Cir. 2004)
(“pirate access devices” are those used “to circumvent this conditional access
technology and allow users to receive the satellite transmissions provided by DTV
without paying DTV any fees”); see also DIRECTV, Inc. v. Barnes, 302 F. Supp. 2d
774, 776 (W.D. Mich. 2004).
2
access cards, DTV periodically sends out electronic countermeasures
(“ECMs”) embedded within its satellite transmissions. ECMs detect
and disable modified access cards.3 However, as something of a
“counter-countermeasure,” a device called a “bootloader” is
specifically designed to overcome the effects of an ECM, allowing
individuals to continue using modified access cards to pirate DTV’s
transmissions. A bootloader is a printed circuit board that is
inserted in place of a valid access card, and is used in
conjunction with a modified access card. According to the
affidavit of Bill Gatliff, on behalf of DTV, a bootloader is
“solely designed for the purpose of circumventing DIRECTV’s
conditional access system, and thus is only of assistance in the
unauthorized decryption of DIRECTV’s satellite transmissions of
television programming.”
The late Hayden Black, a long-time acquaintance of Budden,
asked Budden to help him purchase several bootloader devices from
Mountain Electronics, an internet retailer. Budden agreed. Black
directed Budden to the Mountain Electronics website and told him
how to order the devices. Black gave Budden cash to pay for the
order and asked Budden to have the devices shipped to Budden’s
address rather than to Black’s home. Budden, using the alias Jeff
Brown, placed the order on August 4, 2001. The shipment arrived
COD. Budden paid for it with a money order--purchased with cash
3
One particularly effective ECM, sent out by DTV on January 21, 2001, is
known as “Black Sunday” in the pirate community.
3
from Black--and accepted the package. Budden then passed the
devices along to Black.
Over the course of the next several months, the process was
repeated, as Black requested Budden’s assistance in placing several
additional orders. As to these subsequent orders, however, Budden
insisted that Black himself obtain the money order. Between August
2001 and November 2001 Budden placed five orders with Mountain
Electronics for a total of 115 bootloaders. Eventually, Budden
became uncomfortable with the situation and told Black that he did
not wish to place any additional orders. According to Budden, at
the time of these events he had no knowledge of the nature of
bootloaders; he did not read any description of a bootloader on the
Mountain Electronics website and was concerned only with placing
the orders; and Black had only indicated to him that the devices
were “parts for satellites.”
DTV brought several claims against Budden for piracy, only one
of which is directly at issue here: a claim for violation of
47 U.S.C. § 605(e)(4).4 The district court held that the actions
Budden admitted to constituted distribution of devices that Budden
had reason to know were primarily for piracy, in violation of
§ 605(e)(4).5 Accordingly, the district court granted summary
4
Counts 1 and 2 alleged violations of 47 U.S.C. §§ 605(e)(4) and 605(a).
Counts 3-6 implicated 18 U.S.C. § 2511, 18 U.S.C. § 2512, conversion, and TEX.
CIV. PRAC. & REM. CODE § 123.002.
5
See DIRECTV, Inc. v. Budden, No. 4:03-CV-5666 (S.D. Tex. Aug. 11, 2004)
(unpublished).
4
judgment to DTV on this claim, but did not explicitly address DTV’s
other claims. Budden timely appeals.
II
A
We first examine our jurisdiction. DTV argues that, because
the district court only disposed of DTV’s § 605(e)(4) claim, the
decision below was not final, and thus, in turn, we lack
jurisdiction under 28 U.S.C. § 1291. We disagree.
It is true that the district court only explicitly addressed
the § 605(e)(4) claim. It is also true that, in general, when a
district court only addresses one claim or party in a multi-claim
or multi-party situation, the judgment is not final unless the
court abides by the provisions of Rule 54.6 Here, the district
court did not, per Rule 54, “(1) expressly determine[] that there
6
Hardin v. M/V Ben Candies, 549 F.2d 395, 396 (5th Cir. 1977) (“When more
than one claim for relief is involved in an action, the resolution of a single
claim is not appealable unless the district court expressly determines that there
is no just reason for delay and expressly directs the entry of judgment.” (citing
FED. R. CIV. P. 54(b))).
Rule 54 provides in part:
When more than one claim for relief is presented in an
action . . . the court may direct the entry of a final
judgment as to one or more but fewer than all of the
claims or parties only upon an express determination
that there is no just reason for delay and upon an
express direction for the entry of judgment. In the
absence of such determination and direction, any order
or other form of decision, however designated, which
adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties shall not
terminate the action as to any of the claims or parties,
and the order or other form of decision is subject to
revision at any time before the entry of judgment
adjudicating all the claims and the rights and
liabilities of all the parties.
FED. R. CIV. P. 54(b) (emphasis added).
5
is no just reason for delay, and (2) expressly direct[] entry of a
judgment.”7
However, these facts fall by the wayside where all of the
remaining claims have already been abandoned and the district court
intended to dispose of all claims before it.8 In determining
finality, we have “advocated a practical interpretation that looked
to the intention of the district court” and held that “if the
judgment reflects an intent to dispose of all issues before the
district court, we will characterize that judgment as final.”9 In
National Association of Government Employees v. City Public Service
Board we found that, to the extent the district court had not
explicitly addressed certain claims, those claims had been
abandoned.10 Specifically, “[i]n disposing of all Plaintiffs’ other
claims, therefore, the district court undoubtedly believed that it
was disposing of the entire case before it,” and it was “clear that
no one associated with this case believed there to be a live
7
Huckeby v. Frozen Food Express, 555 F.2d 542, 545 (5th Cir. 1977); see
id. at 545-46 (“In the absence of a certification by the district court that
meets these two requirements, a partial disposition of a multi-claim or
multi-party action does not qualify as a final decision under Section 1291 and
is ordinarily an unappealable interlocutory order.” (footnote omitted)).
8
See Nat’l Ass’n of Gov’t Employees v. City Pub. Serv. Bd., 40 F.3d 698,
705-06 (5th Cir. 1994); Vaughn v. Mobil Oil Exploration & Producing S.E., Inc.,
891 F.2d 1195, 1198 (5th Cir. 1990).
9
Nat’l Ass’n of Gov’t Employees, 40 F.3d at 705; see also Vaughn, 891 F.2d
at 1197 (“The intention of the judge is crucial in determining finality.”).
10
40 F.3d at 705-06.
6
[remaining] claim when judgment was entered.”11 Similarly, in
Vaughn v. Mobil Oil Exploration & Producing Southeast, Inc., we
found a summary judgment to be final, holding that “[w]e can only
construe appellee’s failure to urge its claims before the district
court as an intention to abandon that part of its case” and that
the abandonment, therefore, left a final and appealable judgment
without the aid of Rule 54(b).12
There are several indications here that DTV had abandoned all
claims except for the § 605(e) claim upon which the district court
ruled in its summary judgment motion, and that the district court
intended to treat them as such. First, the district court had
directed DTV to file a motion for summary judgment by July 16,
2004, if the parties did not settle. When DTV finally filed its
summary judgment motion on July 21, 2004, it only addressed claims
under § 605(e)(4), which suggests that the other claims were
abandoned. Budden pointed this out in his response to DTV’s motion
for summary judgment and argued that all other claims had been
abandoned.13 Second, although the district court’s summary judgment
opinion only addressed the “claims that Budden unlawfully
distributed devices used to pirate its signal” as per § 605(e)(4),
11
Id. at 706.
12
891 F.2d at 1198.
13
Budden, in the alternative, made a cross-motion for summary judgment on
Counts 3 to 6. Budden reiterates the abandonment point in his brief on appeal,
arguing that “[i]n its [summary judgment] motion [DTV] abandoned all of its
claims other than alleged violations of 47 U.S.C. § 605(e)(4) and made no attempt
to demonstrate unlawful interception of communications by Budden.”
7
it entered a “Final Judgment” and closed the case.14 While Rule 54
indicates that the label “Final Judgment” would not necessarily
make the judgment final when other live claims were present, such
labeling does illuminate the district court’s intent and, combined
with the other indications, bolsters our conclusion that the
district court treated the claims it disposed of as the only live
claims. Third, in its brief, DTV acknowledges that “it was
DIRECTV’s intention to abandon all claims other than the claims
brought under 47 U.S.C. § 605, on which the district court granted
summary judgment.”
In sum, it is clear that DTV abandoned all other claims, that
the district court treated the § 605(e)(4) claim as the only
remaining live claim, and that the judgment is final. Accordingly,
we have jurisdiction.
B
Budden argues that DTV lacks standing because it is not a
“person aggrieved” for purposes of bringing a § 605(e)(4) claim.15
We disagree.
Section 605(e)(4) provides in relevant part:
Any person who manufactures, assembles,
modifies, imports, exports, sells, or
distributes any electronic, mechanical, or
14
See Vaughn, 891 F.2d at 1197-98; cf. McLaughlin v. Miss. Power Co., 376
F.3d 344, 350-51 (5th Cir. 2004) (per curiam) (no abandonment by party and no
intent by district court to end litigation).
15
See 47 U.S.C. § 605(e)(3)(A). Budden raised this argument in the
district court, and that court implicitly rejected it.
8
other device or equipment, knowing or having
reason to know that the device or equipment is
primarily of assistance in the unauthorized
decryption of satellite cable programming, or
direct-to-home satellite services, or is
intended for any other activity prohibited by
[§ 605(a)] shall be fined not more than
$500,000 for each violation, or imprisoned for
not more than 5 years for each violation, or
both.16
A civil action for violation of this section arises under
§ 605(e)(3)(A), which provides that “[a]ny person aggrieved by any
violation of [§ 605(a)] or [§ 605(e)(4)] may bring a civil action
in a United States district court or in any other court of
competent jurisdiction.”17 Looking solely to this provision, there
is no contention that DTV would not have standing, given that it
claims to be “aggrieved” by a distribution of pirate access devices
in violation of § 605(e)(4).18
16
47 U.S.C. § 605(e)(4) (emphasis added). With the Cable Communications
Policy Act of 1984 (CCPA), Pub. L. No. 98-549, 98 Stat. 2779, Congress amended
the Communications Act of 1934, ch. 652, 48 Stat. 1064. Prior to the CCPA, § 605
only contained the prohibitions currently found in § 605(a) (unauthorized
interception, reception, transmission, and publication); however, with the CCPA,
Congress expanded the statute to include, inter alia, the predecessor of
§ 605(e)(4) (then codified at § 605(d)(4)). See CCPA § 5(a), 98 Stat. at 2802-
03. In 1988, Congress again amended the statute--altering § 605(e)(4) to read
substantially as it does today; altering § 605(e)(3)(A) to refer to § 605(e)(4);
and adding § 605(d)(6). See Satellite Home Viewer Act of 1988 (SHVA), Pub. L.
No. 100-667, tit. II, § 205, 102 Stat. 3949, 3959-60; see also Public
Telecommunications Act of 1988, Pub. L. No. 100-626, § 11, 102 Stat. 3207, 3211-
12 (redesignating subsections). For further historical context, see TKR Cable
Co. v. Cable City Corp., 267 F.3d 196, 200-06 (3d Cir. 2001); Edwards v. State
Farm Ins. Co., 833 F.2d 535, 537-38 & nn.3-4 (5th Cir. 1987).
17
47 U.S.C. § 605(e)(3)(A).
18
There would similarly be no barrier posed by constitutional standing
requirements. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992);
cf. DIRECTV, Inc. v. Treworgy, 373 F.3d 1124, 1127 (11th Cir. 2004) (noting
possible constitutional difficulties were 18 U.S.C. § 2520 to be read as giving
civil cause of action against a defendant for mere possession of pirate access
device).
9
However, there is a twist. Section 605(d)(6) provides
instruction with respect to the phrase “any person aggrieved” as
follows:
[T]he term “any person aggrieved” shall
include any person with proprietary rights in
the intercepted communication by wire or
radio, including wholesale or retail
distributors of satellite cable programming,
and, in the case of a violation of
[§ 605(e)(4)], shall also include any person
engaged in the lawful manufacture,
distribution, or sale of equipment necessary
to authorize or receive satellite cable
programming.19
Budden contends that § 605(d)(6) is an exhaustive list of
those who have standing--that is, that this provision serves a
limiting function. Budden then argues that neither clause of
§ 605(d)(6) applies because there is no showing here that there was
an “intercepted communication” and because “satellite cable
programming” does not include “direct-to-home satellite services”
such as that of DTV.20 However, we are persuaded that the plain
language of § 605(d)(6), in particular the phrase “shall include,”
does not limit the broad scope of § 605(e)(3)(A).
First, in the past, we have held that “[t]he word ‘includes’
19
47 U.S.C. § 605(d)(6). Congress added this language in 1988. See SHVA
§ 205, 102 Stat. at 3959; discussion supra note 16.
20
See 47 U.S.C. § 605(d)(6); 47 U.S.C. § 605(d)(1) (defining “satellite
cable programming” as “video programming which is transmitted via satellite and
which is primarily intended for the direct receipt by cable operators for their
retransmission to cable subscribers”); see also 47 U.S.C. § 605(e)(4) (listing
both “satellite cable programming” and “direct-to-home satellite services”).
10
is usually a term of enlargement, and not of limitation.”21 This
largely tracks earlier Supreme Court expressions that “the term
‘including’ is not one of all-embracing definition, but connotes
simply an illustrative application of the general principle.”22
Second, this interpretation fits with common dictionary
definitions and examples. One version defines “include” as meaning
“[t]o have as a part or member; be made up of, at least in part;
contain” or “[t]o contain as a minor or secondary element.”23 That
dictionary provides a telling contrast between “include” and
“comprise”:
Include and comprise both take as their
objects things or persons that are constituent
parts. Comprise usually implies that all of
the components are stated: The track meet
comprises 15 events . . . . Include can be so
used, but . . . more often implies an
incomplete listing: The meet includes among
its high points a return match between leading
sprinters.24
A similar example in another dictionary indicates the non-exclusive
nature of “include,” as in the phrase “included a sum for tips in
his estimate of expenses.”25
21
Argosy Ltd. v. Hennigan, 404 F.2d 14, 20 (5th Cir. 1968) (internal
quotation marks and citation omitted).
22
Fed. Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 100
(1941).
23
THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 665 (1976).
24
Id. (underline emphasis added).
25
WEBSTER’S THIRD NEW WORLD DICTIONARY 1143 (1961). We are comfortable applying
the common meaning here given the expectation that, having created a normative
standard of conduct and a civil enforcement mechanism for any persons aggrieved,
11
Third, the Sixth Circuit has spoken to this issue and reasoned
that “the plain language of the word ‘include’ in § 605(d)(6) does
not render the definition of a ‘person aggrieved’ an exclusive
one.”26 A number of district courts have agreed.27 In DIRECTV, Inc.
v. Hoverson, for example, the court held that § 605(d)(6) is not an
exclusive list: Ҥ 605(d)(6) is not a true definition but, instead,
merely is a description of two categories of persons who come
within the broad term ‘any person aggrieved.’”28 In support of its
position, the court contrasted the usage of the word “includes” in
§ 605(d)(6) with the word “means,” which was used in describing
had Congress intended to limit that universe to less than what is
constitutionally permissible, it could have clearly done so, rather than using
the typically non-limiting word “include” in this context.
26
Nat’l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 914 (6th
Cir. 2001); see id. at 911-14; cf. Int’l Cablevision, Inc. v. Sykes, 75 F.3d 123,
129 (2d Cir. 1996) (mentioning in passing that § 605(e)(3)(A) “provides a civil
action to ‘[a]ny person aggrieved by any violation of [§ 605(a)] or
[§ 605(e)(4)]’” without indicating that this broad provision was limited and
without making reference to § 605(d)(6)); In re Cases Filed by DIRECTV, Inc., 344
F. Supp. 2d 647, 657 (D. Ariz. 2004) (similar).
27
See, e.g., DIRECTV, Inc. v. Hoverson, 319 F. Supp. 2d 735, 738-39 (N.D.
Tex. 2004); DIRECTV, Inc. v. Boonstra, 302 F. Supp. 2d 822, 829 n.4 (W.D. Mich.
2004). On the other hand, at least one court has indicated that § 605(d)(6) is
a restrictive definition. See DIRECTV, Inc. v. Morris, 357 F. Supp. 2d 966, 972
(E.D. Tex. 2004) (“47 U.S.C. § 605(e)(3)(A) . . . permits an aggrieved party, as
defined in 605(d)(6), to obtain civil relief . . . .” (emphasis added)); id. (“An
aggrieved party must have an interest in a communication which is intercepted.”).
Of course, finding standing where a plaintiff meets the terms of
§ 605(d)(6), even were it to be read as an exhaustive list, is not difficult.
See e.g., DIRECTV, Inc. v. Deskin, 363 F. Supp. 2d 254, 258 & n.1 (D. Conn. 2005)
(DTV “is a person aggrieved within the meaning of section 605(d)(6)” as to
§ 605(a) claim for actual interception). In the present case, we need not
determine whether DTV falls within § 605(d)(6).
28
Hoverson, 319 F. Supp. 2d at 739.
12
other terms.29 Similarly, in DIRECTV, Inc. v. Boonstra, the court
noted that “the statute does not limit the definition of
‘aggrieved’ persons only to those expressly identified in the
definition. Rather, the use of the word ‘include’ is non-limiting
and indicates that it is a non-exclusive description of potential
plaintiffs.”30
In sum, § 605(d)(6) does not serve the limiting function that
Budden ascribes to it--that is, it is not an exhaustive list.31 DTV
has standing to bring the § 605(e)(4) claim as a “person
aggrieved.”32
III
A
We review a grant of summary judgment de novo, applying the
same standard as the district court.33 “Summary judgment is proper
when the pleadings and evidence demonstrate that no genuine issue
29
Id.; compare 47 U.S.C. § 605(d)(6) with 47 U.S.C. § 605(d)(1), (3) &
(4).
30
302 F. Supp. 2d at 829 n.4.
31
As such, Budden’s additional argument regarding the failure of Congress
to add the clause “or direct-to-home satellite services” to § 605(d)(6) is
unavailing. See Telecommunications Act of 1996, Pub. L. No. 104-104, § 205, 110
Stat. 56, 114 (adding “or direct-to-home satellite services” to § 605(e)(4), but
not to § 605(d)(6)).
32
We note that the report accompanying the 1988 amendment that added
§ 605(d)(6), see discussion supra note 16, indicated that its purpose was, in
part, “expanding standing to sue.” H.R. REP. NO. 100-877(II) (1988), at 28,
reprinted in 1988 U.S.C.C.A.N. 5638, 5657; see United States v. Harrell, 983 F.2d
36, 39-40 (5th Cir. 1993); see also Nat’l Satellite Sports, Inc., 253 F.3d at
912. This sentiment comports with our interpretation of § 605(d)(6).
33
See Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir.
2005); FED. R. CIV. P. 56.
13
of material fact exists and the movant is entitled to judgment as
a matter of law.”34 “An issue is material if its resolution could
affect the outcome of the action.”35 A dispute as to a material
fact is genuine if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.36 When considering
summary judgment evidence, we view all facts, and the inferences to
be drawn from them, in the light most favorable to the nonmovant.37
B
Budden argues that the affidavit of James Whalen was not
competent summary judgment evidence.38 According to his affidavit,
Whalen, a Senior Director for DTV’s Office of Signal Integrity, is
“familiar with the usual and customary business practices involved
in all aspects of DIRECTV’s investigations of individuals and
businesses suspected of illegally obtaining access to DIRECTV
programming.” He describes how, on December 11, 2001, and April
18, 2002, law enforcement officials, with the assistance of DTV
34
Pluet v. Frasier, 355 F.3d 381, 383 (5th Cir. 2004) (citing FED. R. CIV.
P. 56(c)).
35
Weeks Marine, Inc. v. Fireman’s Fund Ins. Co., 340 F.3d 233, 235 (5th
Cir. 2003) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
36
Boudreaux, 402 F.3d at 540 (citing Anderson, 477 U.S. at 251-52).
37
Id.; Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994).
38
Budden makes this argument in the context of asserting that summary
judgment should have been granted to him, rather than to DTV, on the § 605(e)(4)
claim. However, Budden made no cross-motion for summary judgment in the district
court on this claim; his cross-motion only addressed claims 3 to 6. We
nonetheless consider the viability of the Whalen affidavit because it impacts the
propriety of the district court’s grant of summary judgment in favor of DTV.
14
personnel, executed search warrants upon the owners of Mountain
Electronics. Whalen explains that Mountain Electronics was a
“business enterprise focused on distributing electronic devices
primarily designed for the surreptitious interception of satellite
communications broadcast by DIRECTV,” and that Mountain Electronics
marketed its bootloaders as such. DTV uses this evidence to
bolster its case that Budden knew or had reason to know that the
devices were primarily for piracy, asserting that in affirmatively
going to the Mountain Electronics website, Budden would have likely
seen a description of the bootloader devices.
Budden attacks Whalen’s statement by pointing out that, while
it is a sworn affidavit, it does not state that his testimony is
based on personal knowledge, nor does it aver that the statements
therein are true and correct. These arguments are unavailing.
1
First, it is true that Rule 56 requires that summary judgment
affidavits be based on personal knowledge: “Supporting and opposing
affidavits shall be made on personal knowledge, shall set forth
such facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the
matters stated therein.”39 Nonetheless, while an affidavit
certainly can explicitly state that it is based on “personal
39
FED. R. CIV. P. 56(e).
15
knowledge,”40 there is no requirement for a set of magic words. As
to competency, for example, we have held that in the summary
judgment context, even when a party’s response is a verified
pleading that “does not affirmatively state in the document itself
that the [persons] are competent to testify as to the facts to
which they swore,” it “does not necessarily doom their testimony.”41
Similarly, the Fourth Circuit squarely rejected the argument
that the “affidavits in the record are defective because they do
not state that they are based on personal knowledge and do not
affirmatively state that the affiants are competent to testify to
the matters stated therein.”42 The Ninth Circuit has also found it
proper in the summary judgment context for district courts to rely
on affidavits where the affiants’ “personal knowledge and
competence to testify are reasonably inferred from their positions
and the nature of their participation in the matters to which they
40
See, e.g., Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 544
n.13 (5th Cir. 2002) (holding that, “based on [affiant’s] personal knowledge and
his position with [the company], it was not an abuse of discretion for the
district court to consider the information contained in the affidavits,” where
affiant stated that he was Director of Claims, that he had personal knowledge of
the facts, and that he had access to and had reviewed the company’s records as
they pertain to information contained in the affidavits).
In contrast, an affidavit cannot affirmatively state that it is only based
on “information and belief.” Bolen v. Dengel, 340 F.3d 300, 313 (5th Cir. 2003)
(“Because Dengel’s affidavit is expressly based merely on information and belief,
it is struck as not based on personal knowledge and therefore fails the
requirements of summary judgment evidence.”).
41
Lodge Hall Music, Inc. v. Waco Wrangler Club, Inc., 831 F.2d 77, 80 (5th
Cir. 1987); see id. (“We have previously held that verified pleadings may in some
circumstances be treated as affidavits in support of a motion for summary
judgment.” (internal quotation marks and citation omitted)).
42
Bryant v. Bell Atl. Md., Inc., 288 F.3d 124, 135 n.9 (4th Cir. 2002).
16
swore.”43
Here, it is reasonably within Whalen’s position--what one
court has called his “sphere of responsibility”--as a Senior
Director of Signal Integrity for DTV to be familiar with the
Mountain Electronics investigation as described in his affidavit.44
We decline to find Whalen’s affidavit deficient for lack of
personal knowledge, as it is reasonably inferred.
2
Second, there is no requirement that sworn affidavits have a
statement that the contents are “true and correct.” That
incantation is required for unsworn declarations. When confronted
with an unsworn declaration, we have held that because the
“affidavit is neither sworn nor its contents stated to be true and
correct nor stated under penalty of perjury,” it was not proper
summary judgment evidence.45 We explained:
It is a settled rule in this circuit that an
unsworn affidavit is incompetent to raise a
fact issue precluding summary judgment. A
statutory exception to this rule exists under
28 U.S.C. § 1746, which permits unsworn
declarations to substitute for an affiant’s
oath if the statement contained therein is
made “under penalty of perjury” and verified
43
Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1018 (9th Cir.
1990).
44
Hodges v. Exxon Corp., 563 F. Supp. 667, 669-70 (M.D. La. 1983); see
also Ondis v. Barrows, 538 F.2d 904, 907 n.3 (1st Cir. 1976) (finding personal
knowledge requirement met based on the affiant’s position in the company).
45
Nissho-Iwai Am. Corp. v. Kline, 845 F.2d 1300, 1305-06 (5th Cir. 1988).
17
as “true and correct.”46
Here, the lack of a recitation that the statement is “true and
correct” poses no barrier for the Whalen affidavit. Budden’s
attack on the affidavit is without merit.
C
According to Budden, a reasonable finder of fact could
conclude that DTV’s evidence did not show that Budden distributed
the bootloaders “knowing or having reason to know” the illicit
nature thereof, in violation of § 605(e)(4). We again disagree.
While Budden contests whether he knew or had reason to know,
he does not contest the actual nature of the bootloaders. On this
latter point, the affidavits on behalf of DTV provide the only
evidence, indicating that bootloaders are primarily used for
piracy.47 In other words, while Budden’s knowledge of bootloaders
is contested, Budden does not dispute that bootloaders are devices
that are “primarily of assistance in the unauthorized decryption of
satellite cable programming, or direct-to-home satellite
46
Id. at 1306 (footnote omitted).
47
Bill Gatliff’s affidavit reads:
A bootloader is solely designed for the purpose of
circumventing DIRECTV’s conditional access system, and
thus is only of assistance in the unauthorized
decryption of DIRECTV’s satellite transmissions of
television programming. A bootloader has no purpose or
use other than to modify the behaviors of P2/H access
cards that were previously modified and subsequently
disabled by the Black Sunday ECM. Bootloaders thereby
circumvent DIRECTV’s conditional access system.
18
services.”48 Budden also does not contest that his actions
constitute “distribut[ion]” within the meaning of § 605(e)(4).
As to the knowledge requirement, Budden denies knowing the
nature of the bootloaders prior to this suit. According to Budden,
he did not read a description of the devices on the Mountain
Electronics website, and his friend Black kept him in the dark.
Budden’s attempt to create a fact issue as to his knowledge by
relying on a conclusory and self-serving affidavit is on unsteady
ground.49 However, even crediting Budden’s testimony, as did the
district court below, summary judgment in favor of DTV was still
proper because a reasonable person had reason to know in the
circumstances of this case that the bootloaders being purchased are
devices primarily for piracy. That is, § 605(e)(4) does not demand
actual knowledge; constructive knowledge will suffice.
Budden admitted that Black asked him to order a number of
bootloader devices from the website of Mountain Electronics, and
that Budden did so. DTV has also presented uncontroverted evidence
that Mountain Electronics markets the bootloaders as pirate access
devices. In total, Budden ordered (over the course of five
48
47 U.S.C. § 605(e)(4).
49
See BMG Music v. Martinez, 74 F.3d 87, 91 (5th Cir. 1996) (affirming
summary judgment for plaintiffs where “the only evidence in support of the
defendants’ theory is a conclusory, self-serving statement by the defendant”);
see also United States v. Lawrence, 276 F.3d 193, 197 (5th Cir. 2001) (affirming
summary judgment for plaintiff where defendant’s only evidence consisted of
“self-serving allegations,” which “are not the type of significant probative
evidence required to defeat summary judgment” (internal quotation marks and
citation omitted)).
19
separate orders), payed for (using Black’s money), accepted
shipment of, and distributed 115 bootloader devices. Budden’s
protestations of ignorance notwithstanding, whether or not he had
actual knowledge, a person who undertakes such concerted and
repeated efforts to secure and distribute these devices “ha[s]
reason to know” what they are.50 Remaining willfully blind does not
absolve Budden of the knowledge that a reasonable person would have
acquired in these circumstances. In a different context the
Supreme Court long ago remarked: “It should be remembered that a
purchaser will have notice whenever he has the means of knowledge,
although he may choose not to know; or, in other words, whenever it
may fairly be presumed that he either knew or remained wilfully
ignorant.”51 Such sentiments echo true today.
The fact that Budden used an alias in placing the orders and
eventually, after placing and distributing five orders of
bootloaders, refused to place any more only strengthens our
conclusion that he had reason to know the nature of the devices.
In the present case, given the volume of devices ordered by Budden
and the number of orders placed--even though relatively little time
was expended--in combination with the other evidence mentioned, we
are persuaded that a rational trier of fact could not find for
Budden. Accordingly, the district court did not err in granting
50
47 U.S.C. § 605(e)(4).
51
Robbins v. Chicago City, 71 U.S. (4 Wall.) 657, 668 (1867) (internal
quotation marks and citation omitted).
20
summary judgment in favor of DTV.
IV
To summarize, we have jurisdiction to consider this appeal;
DTV has standing as a “person aggrieved” to bring a claim for
violation of § 605(e)(4); the Whalen affidavit is competent summary
judgment evidence; and summary judgment in favor of DTV was proper.
AFFIRMED.
21
Directv Inc v. Budden
Combined Opinion