United States District Court, W.D. North Carolina, Statesville Division
DISH NETWORK L.L.C., ECHOSTAR TECHNOLOGIES L.L.C., and NAGRASTAR LLC, Plaintiffs,
LONNIE HATLEY, Defendant.
Richard L. Voorhees United States District Judge
THE COURT is Plaintiffs' Motion for Default
Judgment (the “Motion”) (Doc. 7) against
Defendant, which was filed on August 2, 2016. Defendant did
not respond to the Motion.
was personally served (Doc. 6) with Plaintiffs' Complaint
(Doc. 1) on June 17, 2016, but did not file an Answer or
respond otherwise. Plaintiffs filed a Motion for Entry of
Default on July 12, 2016 (Doc. 7), and the Clerk filed Entry
of Default the same day. (Doc. 8) Accordingly, the
allegations of Plaintiffs' Complaint (Doc. 1), excluding
those pertaining to damages, are deemed admitted by
filed this action on May 25, 2016, alleging that Defendant
circumvented Plaintiffs' security technology and
intercepted the copyrighted satellite television programming
broadcast by Plaintiff DISH Network L.L.C. (“DISH
Network”) without paying the required subscription fee.
(Doc. 1, at 2). DISH Network is a multi-channel video
provider that delivers video, audio, and data services to
approximately 14 million customers throughout the United
States, Puerto Rico, and the U.S. Virgin Islands via a direct
broadcast satellite system. (Doc. 1, at 3). DISH Network uses
high-powered satellites to broadcast, among other things,
movies, sports, and general entertainment services to
consumers who have been authorized to receive such services
after payment of a subscription fee or, in the case of a
pay-per-view movie or event, the purchase price. Id.
works broadcast by DISH Network are copyrighted, and DISH
Network has the authority of the copyright holders to protect
the works from unauthorized reception and viewing.
Id. DISH Network programming is digitized,
compressed, and scrambled prior to being transmitted to
multiple satellites located in geo-synchronous orbit above
Earth. Id. The satellites, which have relatively
fixed footprints covering the United States and parts of
Canada, Mexico, and the Caribbean, relay the encrypted signal
back to Earth where it can be received by DISH Network
subscribers who have the necessary equipment. Id.
The necessary equipment consists of receivers, dish antennae,
and other digital equipment supplied by Plaintiff EchoStar
Technologies, L.L.C., as well as smart cards and other
proprietary security technology systems supplied by Plaintiff
Nagrastar LLC. (Doc. 1, at 3-4).
received the records of a confidential informant who oversaw
and managed the sale of subscriptions to a pirate television
service called NFusion Private Server (“NFPS”).
(Doc. 1, at 2); see also (Doc 10-2, at 2)
(explaining agreement between Plaintiff Nagrastar LLC and
confidential informant). Each subscription consists of a
passcode that enables access to the NFPS servers, which
transmit DISH Network's proprietary control word- or
“keys”-over the Internet to the subscriber's
receiver, allowing a subscriber to decrypt DISH Network's
satellite signal and view DISH Network programming without
permission. (Doc. 1, at 2). This form of piracy is referred
to as “control word sharing, ” “Internet
key sharing, ” or more simply “IKS.” (Doc.
1, at 5).
records obtained by Plaintiffs demonstrated that, on or about
January 1, 2012, Defendant purchased at least two
subscriptions for IKS services provided by NFPS, each
believed to be valid for a one-year period of time. (Doc. 1,
at 6). These services allowed Defendant to decrypt DISH
Network's satellite signal and view DISH Network
programming without a subscription. Id. On August 2,
2016, Plaintiffs submitted further evidence with their
Memorandum in Support of Motion for Default Judgment (Doc.
10) showing that Defendant utilized online forums to gain
technical assistance needed to maintain access to IKS
services in October and November of 2014. (Doc. 10-3, at
Complaint asserts three independent causes of action. (Doc.
1, at 7-9). Count I asserts that Defendant willfully, and for
the purpose of commercial advantage or private financial
gain, circumvented an access control measure in violation of
the Digital Millennium Copyright Act, 17 U.S.C. §
1201(a)(1). (Doc. 1, at 7-8). Count II asserts that Defendant
willfully, and for the purpose of commercial advantage or
private financial gain, received satellite signals without
authorization in violation of the Federal Communications Act,
47 U.S.C. § 605(a). (Doc. 1, at 8). Count III asserts
that Defendant intentionally, and for tortious and illegal
purposes or for commercial advantage or private financial
gain, was intercepting satellite signals in violation of the
Electronic Communications Privacy Act, 18 U.S.C. §§
2511(1)(a) and 2520. (Doc. 1, at 8-9).
Plaintiff's Motion for Default Judgment, Plaintiffs seek
default judgment against Defendant for Count III alleged in
the Complaint. (Doc. 9, at 1). Plaintiffs seek relief in the
form of an award of statutory damages in the amount of $10,
000 and a permanent injunction enjoining Defendant's
activities regarding the piracy of DISH Network programming.
Id. Provided that this Court awards the requested
relief, Plaintiffs then request that Count I and Count II be
dismissed with prejudice so final judgment may be entered.
(Doc. 10, at 13). On August 2, 2016, Defendant was served by
first-class mail at the address where he received personal
service of Plaintiffs' pleadings with both
Plaintiffs' Motion for Default Judgment (Doc. 9, at 2)
and Plaintiffs' Memorandum in Support of Motion for
Default Judgment (Doc. 10, at 14).
STANDARD OF REVIEW
motion for default judgment is governed by Rule 55 of the
Federal Rules of Civil Procedure. Fed.R.Civ.P. 55. Upon a
showing that a party against whom judgment is sought has
failed to plead or otherwise defend, the clerk must enter the
party's default. Fed.R.Civ.P. 55(a). On July 12, 2016,
the Clerk did file an Entry of Default in this case as to
Defendant. (Doc. 8). After the clerk has entered a default,
the plaintiff may seek a default judgment. See Fed.
R. Civ. P. 55(b). The entry of a default judgment is left to
the sound discretion of the court, and no party is entitled
to a favorable entry of default judgment as a matter of
right. See Black v. F & S, LLC, 2008 U.S. Dist.
LEXIS 100577, at *6 n.6 (W.D. N.C. 2008) (Voorhees, J.)
(citing United States v. Ragin, 113 F.3d 1233, 1997
U.S. App. LEXIS 11827, at *5 (4th Cir.1997)); Draper v.
Coombs, 792 F.2d 915, 924 (9th Cir.1986)). See also
Advantage Media Group v. Debnam, 2011 U.S. Dist. LEXIS
62678, at *3 (M.D. N.C. 2011); EMI April Music, Inc. v.
White, 618 F.Supp.2d 497, 505 (E.D. Va. 2009);
S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md.
Court is authorized by Fed.R.Civ.P. 55(b)(2) to enter default
judgment against Defendant, who was personally served (Doc.
6) and has otherwise not participated at any step in this
litigation. A consequence of the clerk's entry of a
default is that “the factual allegations of the
complaint, except those relating to the amount of damages,
will be taken as ...