Charter Communications Entertainment I v. Burdulis

United States Court of Appeals
For the First Circuit

Nos. 05-1653
05-1726

CHARTER COMMUNICATIONS ENTERTAINMENT I, DST
D/B/A CHARTER COMMUNICATIONS,

Plaintiff, Appellant,

v.

THOMAS (A/K/A TOM) BURDULIS and
MIGUEL (A/K/A MIKE) SÁNCHEZ,

Defendants, Appellees.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. F. Dennis Saylor, IV, U.S. District Judge]

Before

Torruella and Lipez, Circuit Judges,
and Stafford,* Senior District Judge.

Robert J. Munnelly, Jr., with whom Burton B. Cohen and Murtha
Cullina LLP, were on brief, for appellant.

August 25, 2006

*
Of the Northern District of Florida, sitting by designation.
 TORRUELLA, Circuit Judge. Plaintiff-appellant Charter

Communications ("Charter"), a cable television operator, filed

separate suits against defendants-appellees Thomas Burdulis

("Burdulis") and Miguel Sánchez ("Sánchez") for unauthorized

reception of cable programming. After both Burdulis and Sánchez

defaulted in their respective cases, the district court entered

judgment in favor of Charter and awarded damages. In this

consolidated appeal, Charter contends that the district court erred

in determining the amount of damages to which it is entitled.

After careful consideration, we affirm.

I. Background

Charter is a cable operator that provides cable

television programming to its customers. Charter's customers pay

a monthly fee based on the level of service they desire. For

example, customers can choose to receive only the channels included

in Charter's basic service tier or expanded basic tier. However,

they can elect to pay additional money each month and receive

certain "premium" channels (e.g., HBO or Showtime) as part of their

cable package. Customers can also pay, on a per-event basis, for

individual pay-per-view movies or special event programming.

Charter itself receives most of its programming from

radio signals sent by satellite, and it retransmits these signals

to customers via cable or wire. Charter's cable signals for

premium channels and pay-per-view services are electronically coded

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or "scrambled," so they must be decoded by electronic decoding

equipment for the signals to be viewed clearly on a television. To

decode the signals, Charter provides subscribers of these services

with electronic decoding devices known as converters. Charter

programs each of its converters specifically to permit subscribers

to view only the level of service purchased. There also exist,

however, unauthorized converters, known as "descramblers" or "black

boxes" -- devices that have been designed or modified to defeat the

security functions of Charter's cable system.

The instant cases arose following court-ordered

productions of business records from manufacturers of illegal cable

descrambling devices in Time Warner Cable of New York City v.

Visual Communications & Elec., Inc., No. 98-3936 (E.D. Pa. July 29,

1998), and AT&T Broadband v. Modern Elec., Inc., No. 8:02-CV-00430

(D. Neb. Sept. 17, 2002). The business records revealed that in

August 2000, Burdulis had purchased one illegally modified cable

descrambler device. They also revealed that in February and July

1997, Sánchez had purchased twelve "quickboards"1 designed to

effect the unauthorized reception of Charter's premium and pay-per-

view programming. Sánchez also purchased a specialized type of

1
A quickboard is a device that, when inserted into the converter,
decodes or descrambles the scrambled cable programming. With a
quickboard, an individual can view all or virtually all of the
premium and pay-per-view services offered by a cable operator,
despite not having paid for that content.

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screwdriver that allowed him to insert the quickboards into the

converters.

Using this information, Charter filed separate suits

against Burdulis and Sánchez pursuant to 47 U.S.C. § 553 ("§ 553")

(unauthorized interception or reception of "any communications

service offered over a cable system") and 47 U.S.C. § 605 ("§ 605")

(unauthorized interceptions of "any . . . communication by

radio").2 Burdulis, however, did not respond at all to Charter's

complaint. Although Sánchez did respond to Charter's complaint and

the parties had subsequently agreed to settle the case, Sánchez

failed to sign the settlement agreement and disappeared. Charter

therefore moved in each case for an entry of default and an award

2
Although Charter's decision to use § 553 (unauthorized
interception or reception of "any communications service offered
over a cable system") in these actions makes sense on its face, the
cable operator's use of § 605 (unauthorized interceptions of "any
. . . communication by radio") requires some explanation. Charter
contended that § 605 applied in this instance because the cable
programming stolen by Burdulis and Sánchez involved, in essence,
theft of radio signals transmitted over the cable network.
Charter's decision to use § 605 was a strategic one, because
although the remedies under §§ 553 and 605 are similar, § 605
offers more effective remedies in many instances. For example,
§ 605 provides for enhanced damages of up to $100,000 (compared to
up to $50,000 under § 553) for theft activities undertaken for
commercial advantage or private financial gain (compare
§ 605(e)(3)(C)(ii) and § 553(c)(3)(B)) and authorizes additional
fines of up to $500,000 per violation for any person who
"manufactures, assembles, modifies, imports, exports, sells, or
distributes" satellite cable theft devices (§ 605(e)(4)).
Additionally, under § 605(e)(3)(B)(iii), an award of attorneys'
fees is mandatory for any violations of § 605(a), in contrast to
discretionary awards under § 553(c)(2)(C).

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of statutory damages, plus attorneys' fees and costs, under §§ 553

and 605.

On January 11, 2005, the district court issued a Joint

Memorandum and Order ("Joint Order") in cases involving Burdulis

and two other Charter defendants, holding that § 605 did not apply

to theft of radio signals transmitted over a cable network.3 The

district court also ruled that the amount of statutory damages

awarded should be limited to the estimated value of the cable

services stolen, without consideration of other theft-related harms

to Charter or of the role of damages in deterring cable theft.4

Following Charter's request for reconsideration, the court issued

an Amended Memorandum and Order, discussing only the case of

Burdulis, in which it reaffirmed its earlier conclusions ("the

Burdulis Order").5

Shortly after the release of the Amended Memorandum and

Order, the district court issued an additional Memorandum and Order

pertaining to the Sánchez case ("the Sánchez Order"). In the

Sánchez Order, the district court adopted the reasoning of the

3
The Joint Order is reported sub nom. Charter Communications
Entm't. I, LLC v. Cintrón, No. 04-40064, 2005 U.S. Dist. LEXIS
11678 (D. Mass. Jan. 11, 2005).
4
The district court also granted attorneys' fees, costs,
injunctive relief, and a small award of enhanced damages ($1,000)
pursuant to § 553(c)(3)(B).
5
Charter settled with the other two defendants prior to issuance
of the Amended Memorandum and Order.

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Burdulis Order and held that § 605 remedies did not apply to theft

of radio signals over a cable network. The court also issued a

separate ruling that, under § 553, not more than one award of

statutory damages of up to $10,000 would be allowed for all twelve

of Sánchez's established statutory violations.6

In this consolidated appeal, Charter contends that the

district court, in handing down its rulings in both the Burdulis

and Sánchez cases, erred in three ways in determining the amount of

damages to which Charter is entitled. First, Charter contends

that the district court was incorrect in holding that § 605 does

not apply to theft of radio signals transmitted over a cable

network. Second, the cable operator argues that the district court

was wrong to hold that under § 553 only one award of statutory

damages of up to $10,000 is allowed, even when multiple statutory

violations are established. Finally, Charter contests the district

court's ruling that statutory damages should be limited to the

value of the cable services used, without consideration of other

theft-related harms to Charter or of the value of damages in

deterring cable theft.

6
The district court also granted attorneys' fees, costs,
injunctive relief, and $36,000 in enhanced damages pursuant to
§ 553(c)(3)(B).

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 II. Discussion

A. Standard of review

The three issues in this case are purely legal questions

reviewed de novo. See United States v. Leja, 448 F.3d 86, 92 (1st

Cir. 2006) (stating that "[t]he district court's resolution of

legal questions . . . is reviewed de novo"); Gen. Motors Corp. v.

Darling's, 444 F.3d 98, 107 (1st Cir. 2006) (noting that

"[s]tatutory interpretation typically raises questions of law

engendering de novo review").

B. The applicability of remedies under § 605

The first issue in this appeal is whether the remedies

provided for under § 605, which applies to the theft of radio

communications, are available to Charter in these cases.7 Section

605 provides a plaintiff with enhanced damages of up to $100,000,

additional fines, and mandatory awards of attorneys' fees.8 The

district court, however, held that § 605 was inapplicable in this

case and that Charter could only benefit from the remedies set

forth in § 553. The district court noted that § 605 applied only

in cases involving unauthorized radio communications, and not in

cases involving wire or cable communications. Since Burdulis and

Sánchez were involved in theft of cable communications (i.e.,

7
As the district court correctly noted, there is no question that
Charter can take advantage of the remedies provided for under
§ 553, which applies to the theft of cable service.
8
See supra note 2.

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communications offered over a wire or cable system), § 605 remedies

were unavailable. Charter contends that the district court's

ruling was erroneous and provides a number of arguments designed to

demonstrate that the district court should have applied § 605

remedies in this case. We address Charter's arguments in turn.

1. Statutory text and the regulatory framework

Charter begins by focusing on the statutory text. It

asserts that nowhere in the relevant statutes does Congress

expressly state, or by clear implication provide, that § 605 cannot

apply to services delivered over a cable network. As a result,

Charter contends that it should be allowed to recover from Burdulis

and Sánchez under § 605.

We, however, believe that the statutory text does make

clear that § 605 is not to apply to signals delivered by wire over

a cable network. And if there is any doubt, we think that the

structure of the regulatory regime provides the necessary clarity.

Regarding the statutory text itself, the district court

correctly points out that § 605 is noteworthy for its general

exclusion of communications by wire or cable. As we discuss below,

§ 605 does make reference to communications by wire or cable in a

few, very limited instances. Most of these instances, however,

have no relevance to the instant case. The vast majority of § 605

is devoted to communications by radio. Moreover, Congress clearly

understood the difference between "communication by radio" and

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"communication by wire," as it defined separately the two methods

of communication. See, e.g., 47 U.S.C. § 153(33) (defining

"communication by radio"); id. § 153(52) (defining "communication

by wire"). We presume that had Congress meant for "communication

by wire" to be a pivotal part of the § 605 regulatory regime, it

would have stated as much. "[I]t is a general principle of

statutory construction that when Congress includes particular

language in one section of a statute but omits it in another

section of the same Act, it is generally presumed that Congress

acts intentionally and purposely in the disparate inclusion or

exclusion." Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 452

(2002) (internal quotation marks and citations omitted). The fact

that § 605 deals almost exclusively with "communication by radio"

speaks volumes, and we think there was no need for Congress to make

specific reference to its general desire to exclude

"communication[s] by wire" from the § 605 regulatory framework.

The structure of the regulatory regime in this area also

provides convincing evidence that Congress did not intend for § 605

to regulate communications by wire. As the district court relates,

Congress devised the regulatory regime in such a way that

regulation was to depend on the method of transmission -- by radio

or by wire. Section 605 deals with communications traveling

through the air (via radio), whereas § 553 covers communications

traveling over cable wire. The legislative history to § 553

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demonstrates conclusively that Congress distinguished between

"communication[s] by radio" and "communication[s] by wire" in

establishing this bifurcated regulatory framework:

The Committee intends the phrase "service
offered over a cable system" [in § 553] to
limit the applicability of [§ 553] to theft of
a service from the point at which it is
actually being distributed over a cable
system. Thus, situations arising with respect
to the reception of services which are
transmitted over-the-air (or through another
technology), but which are also distributed
over a cable system, continue to be subject to
resolution under section 605 to the extent
reception or interception occurs prior to or
not in connection with, distribution of the
service over a cable system.

H.R. Rep. No. 98-934, at 83 (1984), as reprinted in 1984

U.S.C.C.A.N. 4655, 4720.

In this case, the fact that the transmissions were

intercepted as they were transmitted via cable, not radio, is

dispositive. As the district court relates in the Sánchez Order,

"[t]he change in form of transmission of the communication, from an

airborne signal to a signal traveling over a cable wire, changes

the applicability of the statute; when the communication is stolen

as it is being transmitted over a cable wire, § 553, not § 605,

applies." Given this clear demarcation between the two forms of

regulation, there was no need for Congress to state specifically in

the statutory text that § 605 does not apply to services delivered

over cable.

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 In three different ways, however, Charter contests such

a characterization of the statutory text and the regulatory

framework -- i.e., the notion that § 605 was designed to deal only

with radio transmissions and § 553 only with cable transmissions.

First, it notes that § 605 contains language referring to wire

transmissions -- namely, the standing rules in § 605 defining who

is entitled to sue for a violation of the statute. Section

605(d)(6) states that "the term 'any person aggrieved' [referenced

in § 605(e)(3)(A)] shall include any person with proprietary rights

in the intercepted communication by wire or radio. . . ." 47

U.S.C. § 605(d)(6) (emphasis added). Charter asserts that this

reference to "communication by wire" in § 605(d)(6) demonstrates

that Congress did indeed intend for § 605 to regulate at least some

"communication by wire."

We reject this argument. Although we can find no

definitive guidance regarding Congress's intent in including the

reference to "communication by wire" in § 605(d)(6), we note that

the report accompanying the 1988 amendment that added § 605(d)(6)

indicated that the purpose of the section was, in part, "expanding

standing to sue." H.R. Rep. No. 100-887(II), at 28 (1988), as

reprinted in 1988 U.S.C.C.A.N. 5577, 5657. The relevant portion of

the legislative history reads as follows:

Section 5 of the [Satellite Home Viewer Act of
1988] amends [§ 605] of the Communications Act
pertaining to the piracy of satellite cable
programming. The Committee's amendment is

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 intended to deter piracy practices by (1)
stiffening applicable civil and criminal
penalties, (2) expanding standing to sue, and
(3) making the manufacture, sale, modification
. . . of devices or equipment with knowledge
that its primary purpose is to assist in
unauthorized decryption of satellite cable
programming expressly actionable as a criminal
act.

Id. (emphasis added).

The resulting legislation "expand[ed] standing to sue"

because it affirmed the right of cable operators who transmitted

communications to consumers via wire or cable to sue for

unauthorized interceptions of radio or satellite communications.

What drove the legislation was the understanding that a

transmission emanating from a satellite potentially made several

intermediate stops before reaching the ultimate consumer. We see

Congressional recognition of this fact, for example, in § 605(d)

(1), where Congress defined "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."9 See also id. at 11,

1988 U.S.C.C.A.N. at 5639-40 ("Cable systems pay satellite carriers

a per subscriber fee for delivering to the system a broadcast

9
This is to be distinguished from direct-to-home satellite
services, which sends programming directly to consumers rather than
to cable operators who retransmit it to their subscribers. See
DirecTV, Inc. v. Tasche, 316 F. Supp. 2d 783, 786 (E.D. Wis. 2004).

-12-
signal; the systems then send out the signal over the wire to their

subscribers.").

Under such a conception of the telecommunications

process, the cable operator stands to lose just as the satellite

owner does if the satellite transmission is stolen. The cable

operator, after all, loses out on a potential customer if the

transmission is intercepted. Had the cable "pirate" not stolen the

transmission, he or she may very well have doled out the money to

purchase cable from the cable operator.

What Charter fails to grasp is that if the cable operator

does decide to sue by taking advantage of the standing rules

articulated in § 605(d)(6), the substantive law that is applied is

§ 605, not § 553. In other words, § 605(d)(6) does "expand[]

standing to sue" and allows cable operators to sue regarding a

theft of communications that occurred before the communications

ever reached them. However, this does not mean that Congress is

regulating, via § 605, communications by wire. What is being

regulated is the theft of radio or satellite signals. As such,

Charter's argument that § 605 regulates the theft of cable signals

is incorrect.

In its second attempt to break down the wall Congress

created between radio and cable communications, Charter notes how

federal courts in the early 1980s, when confronting the sale and

use of illegal cable descramblers, held "apparently unanimously"

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that § 605 applied to radio signals transmitted over a cable

network. Charter may be correct that federal courts in the early

1980s did apply § 605 to radio signals transmitted over a cable

network. This, however, was a function of the fact that at the

time, there existed a gap in the regulation of theft of cable

services. As the district court correctly points out, the adoption

of the Omnibus Crime Control and Safe Streets Act of 1968 ("Crime

Control Act"), Pub. L. No. 90-351, 82 Stat. 197, removed most

references to wire (cable) transmissions in § 605, leaving § 605 to

apply only to radio transmissions. Moreover, § 553 had not yet

been enacted. Thus, courts in the early 1980s, in the absence of

any explicit and tailored regulatory framework, were in essence

compelled to use § 605 as a means of preventing the theft of cable

services. With, however, the adoption of § 553 in 1984 in the

Cable Communications Policy Act, Congress provided a new regulatory

framework that courts could use to combat the theft of cable

services, and courts were no longer bound to rely on § 605 to deal

with the problem. Thus, Charter's reliance on certain federal

court decisions from the early 1980s -- all of which, incidentally,

predate the passage of § 553 -- is misplaced.10

10
The effective date of § 553 was October 30, 1984. The cases
cited by Charter are: Ciminelli v. Cablevision, 583 F. Supp. 158
(E.D.N.Y. March 28, 1984); Cablevision Sys. Dev. Co. v. Annasonic
Elec. Supply, No. CV-83-5159, 1984 U.S. Dist. LEXIS 19592 (E.D.N.Y.
Feb. 10, 1984); Cox Cable Cleveland Area, Inc. v. King, 582 F.
Supp. 376 (N.D. Ohio October 18, 1983); and Porter County Cable
Co., Inc. v. Moyer, 624 F. Supp. 1 (N.D. Ind. Jan. 13, 1983).

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 In Charter's final attempt to show that § 605 does apply

to certain aspects of "communication[s] by wire," it contests the

district court's conclusion that the anti-theft protections in

§ 553 for wire communications would be largely unnecessary if § 605

applied to radio signals over a cable network. Charter states that

even with § 605 applying to radio signals over a cable network, the

anti-theft protections in § 553 would play a specific and important

role. According to Charter, § 605, with its standing rules, only

allows cable operators to sue for interceptions of "satellite cable

programming," including radio-based signals over a cable television

network.11 Section 605, however, provides no protection against

theft of non-video services that can travel over cable -- for

example, services such as private line data transmission and at-

home shopping and banking. To Charter, Congress enacted § 553

specifically to deal with the theft of these non-video services.

We disagree with this characterization of the regulatory

framework. We believe that § 553 was intended to play a much more

significant role in the regulatory scheme than in the mere

11
We note that the opening assumption of Charter's argument --
namely, that cable operators can sue only for interceptions of
"satellite cable programming" -- is not necessarily correct.
Although "satellite cable programming" is the only explicit subject
area mentioned in § 605(d)(6), numerous courts have held that § 605
(d)(6) is to be read expansively and that the provision does not
provide an exhaustive list of those who have standing. See, e.g.,
DIRECTV Inc. v. Budden, 420 F.3d 521, 527 (5th Cir. 2005); Nat'l
Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 911 (6th
Cir. 2001). However, we assume, arguendo, that Charter's
assumption is correct.

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protection of non-video services. Although non-video services such

as private line data transmission and at-home shopping and banking

are commonplace today, in 1984, when Congress passed the Cable

Communications Policy Act and enacted § 553 and reenacted § 605,

such non-video services were restricted to a tiny subset of the

population. See H.R. Rep. No. 98-934, at 28 (1984), as reprinted

in 1984 U.S.C.C.A.N. at 4665 (noting, for example, that "private

line data services are in their infancy" and that "private line

data services are only a small fraction of the current data

transmission market"). What was more in the forefront of

Congress's collective mind was the threat posed by the theft of

traditional video cable services. See id. at 83, 1984 U.S.C.C.A.N.

at 4720 (stating that the House Energy and Commerce Committee was

"extremely concerned" about the theft of cable services and noting

that "the theft of cable services poses a major threat to the

economic viability of cable operators and cable programmers"). It

makes no sense that Congress would go out of its way to come up

with an entirely new regulatory regime (in the form of § 553) to

combat what at the time was only a limited threat. In fact, the

legislative history indicates clearly that this was not Congress's

intention. See id. at 60, 1984 U.S.C.C.A.N. at 4697 (noting that

at the time of the enactment of the Cable Communications Policy Act

in 1984, several proceedings were then underway to determine the

regulatory treatment of non-cable services provided over cable

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systems, such as data transmission and private-line voice

services). Rather, we believe that Congress, in enacting § 553,

was attempting to create a comprehensive regulatory regime covering

the theft of all communications transmitted over a wire or cable --

something that had largely been unregulated since the enactment of

the Crime Control Act in 1968 and the removal of most references to

"communications by wire" from § 605. In TKR Cable Co. v. Cable

City Corp., 267 F.3d 196 (3d Cir. 2001), and United States v.

Norris, 88 F.3d 462 (7th Cir. 1996), the Third and Seventh

Circuits, respectively, supported such an interpretation. As the

district court correctly noted, "the evidence is overwhelming that

Congress intended § 553 to address the serious, widespread problem

of cable piracy, not a microscopically small range of conduct."

Since § 553 was enacted to combat the theft of all

"communication[s] by wire," and not merely non-video services that

can travel over cable, we think that the provisions of § 553 were

intended by Congress to be the primary protections for cable

communications. We agree with the district court that such

protections would be superfluous if § 605 also provided protection

to certain "communication[s] by wire."

2. Statutory interpretation

Charter next attempts to utilize two established

principles of statutory interpretation to support its view that

§ 605 encompasses radio-based signals over a cable network. First,

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Charter notes that because Congress in 1984 reenacted the existing

version of § 605, the presumption is that Congress also intended to

adopt the reasoning of the existing case law interpreting the

statute -- including the pre-1984 precedents, discussed above, that

interpreted § 605 as applying to theft of cable. See Lorillard v.

Pons, 434 U.S. 575, 580-81 (1978) ("Congress is presumed to be

aware of an administrative or judicial interpretation of a statute

and to adopt that interpretation when it re-enacts a statute

without change") (internal citations omitted).

Under normal circumstances, we would indeed presume that

Congress adopted all of the existing case law associated with § 605

when it reenacted that section without change. In this instance,

however, we believe that the Congressional adoption of § 605's

associated case law is limited. Because Congress reenacted § 605

at the same time it enacted § 553, we think that Congress adopted

only the case law applicable to communication by radio. As

suggested above, if Congress were to adopt all of the case law

traditionally associated with § 605 -- including the pre-1984

precedents applying § 605 to incidents of cable theft -- there

would have been no need at all for it to enact § 553.

Second, Charter notes that because both § 553 and § 605

are remedial statutes, each statute's provisions are to be

construed expansively to assist the party seeking restitution -- in

this instance, Charter. See Tcherepnin v. Knight, 389 U.S. 332,

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336 (1967) (recognizing the "familiar canon of statutory

construction that remedial legislation should be construed broadly

to effectuate its purposes"). Charter is correct to recognize the

existence of such a canon. However, for us to read these statutes

as Charter desires would require that we not only read the statutes

broadly, but indeed beyond what Congress intended. We decline to

do so.

3. Legislative history

Charter also argues that the legislative history to both

§ 553 and § 605 indicates that Congress intended for § 605 to be

applicable to the theft of cable services.

We have already cited to certain aspects of the

applicable legislative history to support our view of the relevant

law in this case. Charter, however, cites to additional

legislative history to support its arguments. We think that this

additional legislative history does little to support Charter's

position. For example, Charter cites to several paragraphs in a

report issued by the House of Representatives regarding what

eventually became § 553. H.R. Rep. No. 98-934, at 83 (1984), as

reprinted in 1984 U.S.C.C.A.N. at 4720. Charter points in

particular to a sentence stating that "[n]othing in [§ 553] is

intended to affect the applicability of existing Section 605 to the

theft of cable service." Id. This statement, however, must be

read in light of Congress's own perceptions of the regulatory

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scheme. It is clear that Congress viewed § 605 as a means of

combating the theft of cable service where the cable service took

the form of radio/satellite communications, not "communication[s]

by wire." See 1984 U.S.C.C.A.N. at 4746 ("[S]ection 605 [has]

provided broad protection against the unauthorized interception of

various forms of radio communications. It is the Committee's

intention that the amendment preserve these broad protections.")

(emphasis added). That Congress would declare that § 605 remained

applicable to the theft of radio communications, while intending

for § 553 to provide a new protection against the theft of

communications provided over wire or cable, is not at all

surprising. Thus, Charter's attempts to use legislative history to

support its arguments fail.

4. Policy argument

Charter's final argument is based on policy. It argues

that Congress has repeatedly identified theft of cable services as

a national problem and that it defies belief that Congress would

have singled out cable (i.e., wire-based) operators for

substantially worse treatment compared to their wireless video

competitors.

We, however, think that Charter fails to appreciate the

Congressional prerogative in setting up the regulatory framework

and in setting the applicable penalty amounts. As discussed above,

Congress, at the time of enacting § 553 in 1984, noted the major

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threat posed by the theft of cable services. The anti-theft

provisions enacted as part of § 553 were intended to combat this

threat. Just four years later, however, Congress realized that

problems persisted, particularly with regard to the piracy of

wireless video. See, e.g., H.R. Rep. No. 100-887(II), at 14

(1988), as reprinted in 1988 U.S.C.C.A.N. 5577, 5642 (noting that

"piracy has become an increasingly distressing problem to the

satellite industry and seriously threatens to undermine the

industry's survival"). As a result, it made a legislative judgment

to increase the penalties applicable to theft of wireless services

under § 605. See Pub. L. 100-667, § 205(10) (1988).

Thus, it is not that Congress is singling out cable

(wire-based) operators "for substantially worse treatment" vis-à-

vis wireless video competitors. It is merely that Congress has

made a decision to stiffen the applicable penalties for piracy of

wireless services. We decline to disturb this legislative

judgment. If Congress finds that theft of wire-based cable

continues to be a major problem, it certainly possesses the power

to raise the penalty amounts for wire-based cable theft, so that

such penalties are on a par with the amounts for wireless theft.

Until that time, however, Charter will have to remain content with

the penalty amounts available under § 553.

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 C. Limits on § 553 recovery

Having determined that Charter can pursue remedies only

under § 553, we now turn to the second issue in this case --

whether there are any limits to Charter's recovery under § 553.

The district court held that § 553 allows only one statutory

damages award of not more than $10,000 even when there are multiple

violations of § 553(a) (which prohibits the unauthorized reception

of communications services offered over a cable system). Charter

contests this holding, arguing that it should be permitted to

recover up to $10,000 for each violation committed.

We, however, believe that the district court was correct.

The district court described the relevant statutory framework, and

its application to this case, as follows:

Section 553 creates both civil and criminal
penalties for the unauthorized reception of
cable service. The statute is organized into
three sections: § 553(a) defines the violation
and relevant terms, § 553(b) provides criminal
penalties, and § 553(c) provides civil
penalties. Section 553(a) allows the
plaintiff to seek either actual or statutory
damages. Here, Charter elected to pursue
statutory damages under § 553(c)(3)(A)(ii).

The court went on to note that § 553(c)(3)(A)(ii) provides that a

plaintiff "may recover an award of statutory damages for all

violations involved in the action, in a sum of not less than $250

or more than $10,000 as the court considers just" (emphasis added).

By contrast, the text of § 553(b)(3), the criminal remedies

section, states that "[f]or purposes of all penalties and remedies

-22-
established for violations of subsection(a)(1) of this section, the

prohibited activity established herein as it applies to each such

device shall be deemed a separate violation." This language in

§ 553(b)(3) was added by Congress through a 1992 amendment.

We think that the plain text of § 553 demonstrates

conclusively that Charter, in these civil actions, can recover only

one statutory damages award of not more than $10,000, irrespective

of the number of violations committed by Burdulis or Sánchez. The

statutory text of § 553(c)(3)(A)(ii) clearly states that a

plaintiff "may recover an award of statutory damages for all

violations involved in the action, in a sum of not less than $250

or more than $10,000 as the court considers just" (emphasis added).

Thus, as was noted by the Third Circuit in Gen. Instrument Corp. of

Del. v. Nu-Tek Elec. & Mfg., Inc., 197 F.3d 83 (3d Cir. 1999),

§ 553(c)(3)(A)(ii) "anticipates multiple violations and a single

award of damages," the latter of which is limited to $10,000. Id.

at 95. Thus, it is clear from a simple reading of the statutory

text that a plaintiff can only recover a maximum of $10,000 in

statutory damages under § 553(c)(3)(A)(ii), regardless of the

number of violations.

That this is the case is all the more certain after

comparing § 553(c)(3)(A)(ii) with the criminal remedies section in

§ 553(b). As mentioned above, Congress amended § 553(b) in 1992.

The Ninth Circuit noted in Cont'l Cablevision, Inc. v. Poll, 124

-23-
F.3d 1044 (9th Cir. 1997), that one cannot "overlook the fact that

Congress changed the statute on the criminal side . . . yet left

unchanged the word 'all' on the civil side of the statutory

remedies." Id. at 1049. We again cite the important canon of

statutory construction that "when Congress includes particular

language in one section of a statute but omits it in another

section of the same Act, it is generally presumed that Congress

acts intentionally and purposely in the disparate inclusion or

exclusion." Barnhart, 534 U.S. at 452 (internal quotation marks

and citations omitted). Because Congress acted to alter the

criminal section of the statute, yet decided to leave the civil

section unchanged, we believe that Congress was clear in its desire

to have violations of § 553(a) be considered collectively, rather

than individually, when such violations form the basis of a civil

action.

In prior cases, we have held that "[i]f the plain

language of the statute points unerringly in a single direction, an

inquiring court ordinarily should look no further." Herman v.

Héctor I. Nieves Transp., Inc., 244 F.3d 32, 35 (1st Cir. 2001).

Charter, however, argues that the plain meaning of the statutory

text is deceptive and that there are other indications that

Congress wanted to allow plaintiffs to recover up to $10,000 for

each violation of § 553(a).

-24-
 Charter makes three arguments to support its position.

First, it points to the language included by Congress in its 1992

amendment of § 553(b). Section 553(b) states, in relevant part,

that "[f]or purposes of all penalties and remedies established for

violations of subsection (a)(1) of this section, the prohibited

activity established herein as it applies to each such device shall

be deemed a separate violation." Charter focuses on the phrase

"[f]or purposes of all . . . remedies" and claims that the

inclusion of this phrase is proof that Congress intended for the

per-violation rule to apply to civil remedies, as well as criminal

ones. What Charter fails to grasp, however, is the Congressional

placement of the quoted phrase. "For purposes of all . . .

remedies" is included only in the criminal section of § 553, § 553

(b). We think it is significant that Congress chose to include the

phrase here, rather than at the beginning of § 553 -- a placement

that would have made it applicable to both the criminal and civil

provisions of § 553. By placing the relevant phrase only within

the limited confines of § 553(b), Congress, it seems to us,

intended for the per-violation rule to apply only to criminal

penalties.

Charter's second argument is policy-based. It argues

that Congress, for pragmatic reasons, could only have intended to

enable a plaintiff to recover up to $10,000 for each violation of

§ 553(a). If a plaintiff could only recover a maximum of $10,000

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no matter how many violations occurred, contends Charter, it would

lead to the "absurd" situation in which the plaintiff would simply

bring separate § 553(c) civil actions with respect to each

individual violation and secure multiple awards, at an

unnecessarily increased cost in party and judicial resources.

It is true that the statutory scheme does, in many cases,

permit a cable operator to bring separate § 553(c) civil actions

with respect to each individual violation and secure multiple

awards, at an increased cost in party and judicial resources.12

However, we decline to label this result "absurd," since, instead

of limiting the options available to the plaintiff, it actually

increases them. The statutory scheme operates in such a way that,

in cases where a plaintiff cannot show actual damages, the

12
We note that res judicata would not necessarily bar such
multiple claims. We have held that res judicata applies when the
following exist: "(1) a final judgment on the merits in an earlier
proceeding, (2) sufficient identicality between the causes of
action asserted in the earlier and later suits, and (3) sufficient
identicality between the parties in the two actions." Breneman v.
United States ex rel. FAA, 381 F.3d 33, 38 (1st Cir. 2004)
(internal quotation marks and citation omitted). The difficulty
typically relates to the second prong of this test -- namely,
whether there is "sufficient identicality between the causes of
action asserted in the earlier and later suits." However, in
González-Piña v. Rodríguez, 407 F.3d 425 (1st Cir. 2005), we noted
that "[s]ubsequent conduct, . . . even if it is of the same nature
as the conduct complained of in a prior lawsuit, may give rise to
an entirely separate cause of action." Id. at 430 (quoting Kilgoar
v. Colbert County Bd. of Educ., 578 F.2d 1033, 1035 (5th Cir.
1978)). Therefore, if Burdulis or Sánchez had been previously sued
by Charter for one particular violation of § 553(a), Charter would
still be able to sue the defendants for subsequently committed
violations if the later violations took the same form as the
earlier violation.

-26-
plaintiff is given the choice of whether to expend the resources to

sue for each individual violation or whether to simply combine all

of the violations together in a single suit. The former requires

additional litigation, yet potentially provides the plaintiff with

a greater recovery. The latter option limits the amount of

litigation required but also limits the potential recovery. What

course a particular plaintiff decides to pursue depends on the

nature of the particular violation(s) committed, as well as the

resources available to the plaintiff. We think that this expansion

of options available to the plaintiff -- even given the possibility

that it results in increased litigation -- is in accord with

Congress's desire to provide cable companies and other potential

plaintiffs with the tools they need to combat cable piracy.

We also wish to point out here a related policy reason

militating strongly in favor of capping statutory damages at

$10,000 for all violations combined. As the Ninth Circuit

correctly noted in Poll, "if an award of $10,000 for each violation

is allowed, then few if any plaintiffs would ever avail themselves

of actual damages, because recovery of statutory damages, which

requires no proof of loss, will likely be as high or higher than

actual damages." Poll, 124 F.3d at 1049. Actual and statutory

damages, however, can serve very different purposes, and to think

that Congress meant to completely obliterate the regime developed

to support actual damages is unthinkable.

-27-
 Charter's final argument is that the district court

ignored the fact that in several of the cases the court cited from

other jurisdictions, notably the Ninth Circuit decision in Poll,

the courts supported their conclusions as to the capped statutory

damages for "all violations" under § 553 by relying on the

assumption that cable operators retained access to the more potent

§ 605 statutory remedies. However, in this case, notes Charter,

cable operators do not have access to the more potent § 605

statutory remedies (as a result of the district court's decision).

Thus, there is no easily discernible reason for capped statutory

damages under § 553.

Charter, however, misreads the precedents it cites in

support of its position. Although the Ninth Circuit in Poll does

refer to Congress's desire to bring certain sanctions for

violations of § 553 "into conformity with" certain sanctions for

violations of § 605, the court in that case does not state that the

rationale for capped damages under § 553 is the ready availability

of § 605 remedies. In other words, the fact that civil remedies

under § 553 are capped is independent of the availability of § 605

remedies. Accordingly, we reject Charter's argument.

D. Permissible factors to consider under § 553(c)(3)(A)(ii)

Having determined that Charter, under § 553(c)(3)(A)(ii),

may only receive, at most, one award totaling $10,000 for all

violations, we now turn to the final issue in this case -- namely,

-28-
what factors the district court may consider in deciding what

amount to award under § 553(c)(3)(A)(ii). In this case, the

district court calculated statutory damages based solely on the

estimated value of the services stolen, without consideration of

other harms to Charter or of other policies favoring deterrence.

Charter contests such a method of calculating damages, arguing

vehemently that statutory damages should include amounts for, among

other things, injury to its goodwill, injury to its future growth

and profitability, and injury to the quality of cable services

received by Charter's paying subscribers. Charter also contends

that any statutory damages award should include an amount that

would "further the policies of deterrence" with respect to cable

piracy.

In arriving at its decision to base damages solely on the

estimated value of the services stolen, the district court, in the

absence of any guidance from us on the matter, relied heavily on

the reasoning of a prior district court case, Comcast of Mass. I,

Inc. v. Naranjo, 303 F. Supp. 2d 43 (D. Mass. 2004). In that case,

the cable operator had argued, as Charter does here, that the court

should consider a number of factors in calculating damages,

including actual damages, the willfulness of a defendant's

violation, the importance of deterrence, and defendant's

cooperation with the plaintiff. The court, however, rejected such

a proposal, holding that statutory damages should be "as reasonable

-29-
an estimate of actual damages as the facts . . . allow," not

greater. Id. at 48.

The court in Naranjo noted that according to the plain

language of the statute, statutory damages are merely an

alternative to actual damages. The statute creates no difference

between the two. Thus, although it is possible to conclude that

the statutory damages provision is intended to allow a court to

impose greater damages than available under the actual damages

provision, "the plain language offers no identified reason to reach

that conclusion." Id. The court also noted that the award for

deterrence that the plaintiff sought to build into the statutory

damages award was actually served by other subsections of § 553,

which provided enhanced damages for willfulness and an injunction

to prevent future violations. Id. at 48-49 (referring to 47 U.S.C.

§§ 553(c)(2)(A), 553(c)(3)(B)). Finally, the court stated that the

position articulated by the plaintiff in that case would lead to

"absurd results." The court wrote:

Under plaintiff's theory, an aggrieved party
may receive as statutory damages premiums to
deter future conduct in addition to actual or
estimated actual damages. Statutory damages,
however, may not exceed $10,000. As a result,
parties that have suffered large actual
damages (greater than $10,000) cannot receive
any deterrence premiums. But if any violators
require an additional deterrence premium, it
is those who have caused the largest amounts
of harm.

-30-
Id. at 49. Accordingly, the court in Naranjo held that statutory

damages should be calculated based solely on an estimate of actual

damages.

The district court in the instant case agreed with the

approach taken in Naranjo and applied its rule, noting that that

approach "best satisfies the command of the statute and the

judicial interest in promoting predictability and transparency."

We agree. We find the reasoning of Naranjo to be persuasive and

believe it represents the correct view of the law. Charter,

however, makes several arguments designed to show that the Naranjo

approach is incorrect and that statutory damages should include

more than merely the estimated amount of actual damages.

First, Charter contends that "nothing in the statutory

text or legislative history indicates a court should limit

statutory damages only to the cost of video services stolen." This

may be true, but the statutory text and legislative history also do

not state that a court should look at all harms to the cable

operator, as Charter desires. In actual fact, the only guidance

we receive from Congress on this matter is that the issue of

damages is at the discretion of the judge. See 47 U.S.C. § 553(c)

(3)(A)(ii) (noting that "the party aggrieved may recover an award

of statutory damages . . . as the court considers just") (emphasis

added). Given that there are convincing reasons, as discussed in

Naranjo, for limiting the damage award to a reasonable estimate of

-31-
actual damages, we believe that the district court was correct in

the exercise of its discretion and refusing to follow the approach

advocated by Charter.

Second, Charter argues that the remedies provisions in

§ 553 contain a "statutory goal of restitution" to the cable

operator. It contends that the non-service-related damages it

cited -- e.g., injury to its goodwill, injury to its future growth

and profitability -- should have been taken into account in any

determination of damages, so as to ensure that it received

restitution for its "damages" from the "violations." Charter does

not tell us exactly what "remedies provisions" in § 553 it is

referring to, so we are unable to assess whether these provisions

do contain an explicit "statutory goal of restitution."

Similarly, Charter does not explain with specificity what

it means by "restitution" in this context. At times, "restitution"

is understood as a substitute for damages. See Gilpin v. Am. Fed.

of State, County, and Mun. Employees, 875 F.2d 1310, 1314 (7th Cir.

1989) (noting that "restitution . . is ordinarily (although not

invariably) a substitute for rather than a form of damages"). In

such instances, it is, needless to say, essential to distinguish

between "restitution" and "damages." As one authority describes

the difference, "[t]he damages recovery is to compensate the

plaintiff, and it pays him, theoretically, for his losses. The

restitution claim, on the other hand, is not aimed at compensating

-32-
the plaintiff, but at forcing the defendant to disgorge benefits

that it would be unjust for him to keep." Dan B. Dobbs, Handbook

on the Law of Remedies 224 (1973) (cited in Gilpin, 875 F.2d at

1314).

Applying such definitions to the instant case, we simply

do not see how the remedy sought here by Charter can be considered

"restitution." If a court was to provide Charter with compensation

for, say, injury to Charter's growth and profitability, the court

would be addressing the plaintiff's losses -- traditionally the

realm of "damages" -- rather than an ill-gotten gain of the

defendants (for the defendants in this case did not wrongly

appropriate Charter's future growth and profitability for their own

gain).

Charter, however, may instead be using "restitution" in

a more colloquial sense, such that it desires to recover from the

defendants for all the damage they caused as a result of their

piracy. Such a usage of the term "restitution" would mean both

that the defendants would disgorge any ill-gotten gains, and that

the plaintiff would be able to recover for any other losses it

incurred as a result of the defendants' misconduct. With this

definition, Charter would indeed be able to recover fully for

injury to its goodwill, injury to its future growth and

profitability, and injury to the public, not to mention actual

damages.

-33-
 We, however, are unclear which definition of

"restitution" Charter is utilizing in its brief. Without any

additional guidance from Charter on this matter, we find ourselves

unable to evaluate the merits of its claim. See United States v.

Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("It is not enough merely

to mention a possible argument in the most skeletal way, leaving

the court to do counsel's work, create the ossature for the

argument, and put flesh on its bones. As we recently said in a

closely analogous context: 'Judges are not expected to be

mindreaders. Consequently, a litigant has an obligation to spell

out its arguments squarely and distinctly, or forever hold its

peace.'") (citations and some internal quotation marks omitted).

Charter's final argument is that the district court's

exclusive focus on the estimated value of the services stolen in

awarding statutory damages fails to account for the need to deter

cable pirates. Deterrence, Charter claims, "is an implicit

consideration in deciding the discretionary amount of statutory

damages under § 553(c)(3)(A)(ii)." We disagree. Although Charter

cites to a passage in the legislative history demonstrating that

deterrence was indeed on the minds of Congressional drafters as

they prepared what became the Cable Communications Policy Act, the

passage cited has nothing to do with the determination of statutory

damages. In other words, although Congress did express a desire to

-34-
deter cable pirates, nowhere did it key this desire for deterrence

to the determination of statutory damages.

This makes sense, for, as the district court in Naranjo

pointed out, Congress addressed the need for deterrence in other

statutory provisions. Section 553(c)(2)(A), for example, allows a

court to impose an injunction on defendants, thus preventing future

violations. Congress similarly focused on deterrence in enacting

§ 553(c)(3)(B), which authorizes enhanced damages for certain

willful conduct. With the existence of these separate provisions

addressing deterrence, there was no need for Congress to ask courts

to address the issue when determining statutory damages. Moreover,

asking courts to consider deterrent effect as a factor in

calculating statutory damages would have led to "absurd results,"

as the Naranjo court demonstrated. See Naranjo, 303 F. Supp. 2d at

49. Accordingly, we find incorrect Charter's contention that

deterrence is an "implicit consideration" in deciding the amount of

statutory damages under § 553(c)(3)(A)(ii).

III. Conclusion

For the foregoing reasons, the decision of the district

court is affirmed.

Affirmed.

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