Kingvision v. 898 Belmont Inc ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
4-27-2004
Kingvision v. 898 Belmont Inc
Precedential or Non-Precedential: Precedential
Docket No. 02-1770
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PRECEDENTIAL Marcus W. Corwin, P.A.
UNITED STATES COURT OF 7777 Glades Road, Suite 208
APPEALS Boca Raton, FL 33424
FOR THE THIRD CIRCUIT
Counsel for Appellants
No: 02-1770
____ Donald M. Moser, Esquire (Argued)
Washington West Building
KINGVISION PAY-PER-VIEW, 235 South 8th Street
CORP., LTD., Philadelphia, PA 19106-3519
Appellant Counsel for Appellees
v.
898 BELMONT, INC.,
d/b/a EL TORO BAR; OPINION
BERHANU DEGIFE
___________________
ROTH, Circuit Judge:
Appeal from the United States District
Court
for the Eastern District of Pennsylvania
Once again, we must determine
(D.C. Civil Action No. 01-cv-02970)
what statute of limitations to apply when a
District Judge: Honorable Berle M.
federal statute does not specify a
Schiller
limitations period. In this case, involving
_______________
the Federal Communications Act (FCA),
KingVision claims that defendants
Argued on March 4, 2003
exhibited a closed circuit telecast through
the use of an illegal decoding device. The
Before: ROTH, BARRYand FUENTES
District Court applied the two year
CIRCUIT JUDGES
limitations period of the Pennsylvania
cable piracy statute instead of the three
(Filed: April 27, 2004)
year limitations period of the Copyright
Act. We hold that the two year state
Francine R. Strauss, Esquire (Argued)
limitations period does apply to
11917 Gainsborough Road
KingVision’s FCA claims because the
Potomac, MD 20854
Pennsylvania piracy statute is directly
analogous to § 553 of the FCA and neither
Bradley H. Trushin, Esquire
1
the “practicalities of litigation” nor federal for Judgment on the Pleadings on the
policy or law are frustrated by such ground that the Complaint was filed after
application. See North Star Steel Co. v. the expiration of the two year state
Thomas, 515 U.S. 29, 34-35 (1995); Reed limitations period applicable to the
v. Transp. Union, 488 U.S. 319, 327 Pennsylvania cable piracy statute, 18 Pa.
(1989). Accordingly, we will affirm the Con. Stat. § 910, as specified in 42 Pa.
decision of the District Court granting Cons. Stat. § 5524(7) for actions not
defendants’ Motion for Judgment on the otherwise subject to a specific limitations
Pleadings and dismissing all claims against period.
defendants.
The District Court applied the two
I. Facts and Procedural History year statute of limitations of § 5524(7) and
dismissed KingVision’s claims as time-
Plaintiff KingVision, a licensee of
barred. KingVision Pay-Per-View, Ltd. v.
sports programming, sued defendants 898
898 Belmont, Inc., No. 01-2970, 2002 U.S.
Belmont, Inc., d/b/a the El Toro Bar, and
Dist. LEXIS 2275, at *8 (E.D. Pa. Feb. 13,
Berhanu Degife, its owner and operator, in
2002). On February 24, 2002, KingVision
the District Court for the Eastern District
filed a timely Motion for Reconsideration,
of Pennsylvania under 47 U.S.C. §§ 553arguing that the Copyright Act more
(unauthorized reception of cable service)
closely parallels the piracy sections of the
and 605 (unauthorized publication or use
FCA, so that the limitations period of the
of communications), the “piracy statutes”
Copyright Act should be applied instead of
of the FCA, as amended by the Cable
the state limitations period. KingVision’s
Communications Policy Act of 1984. It is
motion was denied on March 8, 2002, and
uncontested that on March 13, 1999,
this appeal followed.
without KingVision’s authorization, the El
Toro Bar intercepted and broadcast the III. Jurisdiction and Standard of
E v a n d e r H o l y f ie l d / L e n no x Le w is Review
cham pion ship boxing match and
The District Court had jurisdiction
“associated undercard bouts” to its
to hear this case pursuant to 28 U.S.C. §§
patrons. It is also uncontested that
1331, as it is a civil action arising under
KingVision did not provide defendants
the laws of the United States. We have
with the decoding equipment or the
jurisdiction pursuant to 28 U.S.C. § 1291,
satellite coordinates necessary to receive
because the District Court’s February 14,
the signal, nor did KingVision receive a
2002, order is final and appealable.
sublicense fee or revenue from El Toro
Bar for patron admissions to the broadcast. We review de novo the District
KingVision wrote to the El Toro Bar about Court’s dismissal of the case on statute of
the unauthorized broadcast in April 1999 limitations grounds. See Lake v. Arnold,
but failed to bring suit until June 2001. 233 F.3d 360, 365 (3d Cir. 2000)
Defendants filed an Answer and a Motion
2
IV. Discussion analogous state statutes of limitations for
federal laws that do not provide them.
Determining the statute of
North Star, 515 U.S. at 34, 37 (Scalia, J.,
limitations period for activity governed by
concurring). Thus, while courts are not
a federal statute is a question of federal
required to choose a state statute of
law. Nevertheless, as recognized by the
limitations period, they generally choose a
Supreme Court in North Star Steel Co. v.
state limitations period “as a matter of
Thomas, 515 U.S. 29 (1995), when a
interstitial fashioning of remedial details
federal statute fails to provide a statute of
under the respective substantive federal
limitations, a court should look to
statutes.” DelCostello, 462 U.S. at 160.
analogous state statutes. The Court stated,
“our practice has left no doubt about the In North Star, the Supreme Court
lender of first resort. Since 1830, ‘state notes two exceptions to this rule. First, 28
statutes have repeatedly supplied the U.S.C. § 1658 provides a general, four-
periods of limitations for federal causes of year limitations period for federal statutes
action’ when the federal legislation made passed after December 1, 1990, that do not
no provision.” Id. at 34 (citing Automobile contain their own limitations period. Id. at
Workers v. Hoosier Cardinal Corp., 383 34 n.*. Section 1658 is not at issue here,
U.S. 696, 703-704 (1966)). The rule is however, since the FCA was passed in
that “courts look to the state statute ‘most 1934, and the Cable Communications
closely analogous’ to the federal Act in Policy Act amendments were passed in
need.” Id.; Reed v. Transp. Union, 488 1984.
U.S. 319, 323 (1989); DelCostello v.
Second, a court may turn to a
Teamsters, 462 U.S. 151, 158 (1983). 1
limitations period provided within an
The reason for this judicially-created rule
analogous federal statute when the state
is that Congress has an “appropriate” and
limitations periods would “‘frustrate or
“realistic” expectation that, given long-
interfere with the implementation of
standing practice, courts will look to
national policies’. . . or be ‘at odds with
the purpose or operation of federal
1 substantive law.’” Northstar, 515 U.S. at
Lampf v. Gilbertson, 501 U.S.
34 (internal citations omitted). This
350 (1991) articulates a slightly different
second exception is very narrow;
version of the rule for choosing
“reference to federal law is the exception,
limitations periods when federal statutes
and we decline to follow a state limitations
fail to specify them. In Lampf, the Court
period only when a rule from elsewhere in
considered the need for uniformity, the
federal law clearly provides a closer
“geographic character” of the claim, and
analogy than available state statutes, and
the “closest fit,” provided statutory
when the federal policies at stake and the
purpose and elements. Id. at 357-58.
practicalities of litigation make that rule a
This expression of the rule is not
significantly more appropriate vehicle for
followed by the Court in North Star.
3
interstitial lawmaking.” Id. at 35 (internal As we see then, under North Star,
quotations omitted). Reed, and DelCostello, if there is an
analogous state limitations period, absent
In other words, if there is a parallel
any impediment of implementation of
state statute, there is no reason to explore
national policies if that state period is
federal law, unless the state limitations
applied, courts are not required to examine
period impedes the implementation of
federal limitations periods.
national policies, is at odds with the
purpose or operation of federal substantive Following the standard established
law, or is demanded by the practicalities of in DelCostello, the Supreme Court has
litigation. See, e.g., Reed, 488 U.S. at 327 applied state limitations periods to a
(“In light of the analogy between § variety of claims, including claims under
101(a)(2) and personal injury actions, and the Worker Adjustment and Retraining
of the lack of any conflict between the Notification Act (WARN), see North Star,
practicalities of § 101(a)(2) litigation and 515 U.S. at 33-37; the Labor-Management
state personal injury limitations periods, and Reporting and Disclosure Act
we are bound to borrow state personal (LM RDA), see Reed, 488 U.S. at 323-34;
injury statutes absent some compelling and § 1983, see Wilson v. Garcia, 471 U.S.
demonstration that ‘the federal policies at 261, 266-80 (1985). DelCostello itself,
stake’ in § 101(a)(2) actions make a however, is an example of the type of
federal limitations period ‘a significantly action in which a federal limitations period
more appropriate vehicle for interstitial is called for. There, the Court applied a
lawmaking.’”) (quoting DelCostello, 462 federal limitations period to a hybrid §
U.S. at 172). However, as the Court 301/fair representation claim arising under
explained in DelCostello: the National Labor Relations Act (NLRA),
462 U.S. at 151, 158-72. Again, in a
In some circumstances . . .
Racketeer Influenced and Corrupt
state statutes of limitations
Organizations Act (RICO) claim, the
c a n b e unsatisfacto ry
Court applied a federal limitations period
vehicles for the enforcement
in Agency Holding Corp. v. Malley-Duff &
of federal law. In those
Assocs., Inc., 483 U.S. 143 (1987).
instances, it m ay b e
inappropriate to conclude Our review of DelCostello and
that Congress would choose Malley-Du ff demonstrates that the
to adopt state rules at odds Supreme Court examines statute of
w ith the p u r p o s e or limitations queries based on the type of
o p e r a t io n o f f e d e r a l claim presented rather than on a case-by-
substantive law. case basis. NLRA and RICO cases are
two categories of the types of federal
statutes excepted from the general
462 U.S. at 161 (emphasis added). application of state limitations periods.
4
The justification for applying the uniformity purposes, a court should adopt
exception in the DelCostello 301/fair a federal, rather than a state, limitations
representation hybrid claim is evident. period. First, a general preference for
While the § 301 component of the claim is uniformity, even if to avoid forum
a straight contract claim for which there shopping, is an insufficient reason to apply
were close state analogs, the fair the limitations period of the closest federal
representation claim, which is a challenge analog. See, e.g., North Star, 515 U.S. at
to private settlements under the collective 36. The Court noted, in North Star, that
bargaining agreement, was without close “the practice of adopting state statutes of
analog in state law. 462 U.S. at 165. It limitations for federal causes of action can
was possible to apply the state arbitration result in different limitations periods in
limitations periods to the hybrid claim, but different States for the same federal action
they are extremely short – only 10 to 90 . . . . But these are just the costs of the rule
days – and would allow insufficient time itself . . ..” Id.for plaintiffs to complete necessary tasks
Second, the desire to unify the
relating to the fair representation claim,
limitations periods of federal laws with
i.e., evaluating the adequacy of union
similar purposes is not a sufficient reason
counsel, obtaining private counsel, and
to adopt federal limitations periods. For
framing the suit. Id. at 166. In addition,
instance, in Reed, the Court commented:
the state arbitration statutes assume the
vacation of an award, but the arbitration in Respondents argue that the
DelCostello did not resolve the employee’s same federal labor policies
claim against the union because the union that led us in DelCostello to
w a s a c t in g a s t h e e m p l o y e e ’s borrow the NLRA § 10(b)
representative (and union counsel as statute of limitations for
employee’s counsel). Id. at 167. In the hybrid § 301/fair
alternative, applying the longer six year r e p r e se n t a ti o n c l a i m s
state contract limitations period to the likewise require that we
hybrid claim would have interfered with borrow § 10(b) for LMRDA
the “rapid final resolution of labor disputes § 101(a)(2) actions. This
favored by federal law.” Id. at 168. The argument lacks merit. It
practicalities of litigating a hybrid claim, fails to take seriously our
as in DelCostello, distinguish that type of admonition that analogous
case from the present one. state statutes of limitations
are to be used unless they
The RICO civil enforcement action
frustrate or significantly
in Malley-Duff is a broader exception to
interfere with federa l
the state limitations rule. The Supreme
policies.
Court has articulated three points to
consider in determining whether, for
5
488 U.S. at 327 We see then this process taking
place in Malley-Duff, the RICO case in
Third, there is a difference between
which the Court held that a four year
uniformity in construing the substantive
limitations period for Clayton Act civil
elements of a statute in order to
enforcement actions applies to RICO
characterize a claim for statute of
actions and rejected the state “catch-all”
limitations purposes and the next step of
statute of limitations choice. 483 U.S. at
determining what limitations periods to
155-56. The Court is very careful in
adopt for a particular type of claim. For
Malley-Duff to distinguish its narrow
example, in Wilson, the Supreme Court
holding with regard to these RICO actions
held that § 1983 claims should be
from other limitations period cases. The
characterized uniformly as state tort
Court explained that uniformity is a greater
actions. The Court then determined,
concern for RICO civil actions, since by
however, that the length of the limitations
statute such actions require both a nexus to
period is to be governed by state tort law.
interstate or foreign commerce and a
471 U.S. at 268-271, 275-280. The Court
pattern of racketeering. Id. at 153; 18
stressed that uniformity was an issue only
U.S.C. § 1962(b), (c). Racketeering itself
in the characterization of the claim, stating
often involves interstate transactions, since
“the statute [§ 1983] is fairly construed [as
it may include any of nine state law
a tort claim] as a directive to select, in
felonies and over 25 federal statutes. Id. at
each State, the one most appropriate
149 (citing A.J. Cunningham Packing
statute of limitations for all § 1983 claims.
Corp. v. Congress Fin. Corp., 792 F.2d
The federal interests in uniformity,
330, 337 (3d Cir. 1986) (Sloviter, J.,
certainty, and the minimization of
concurring)); 18 U.S.C. § 1961.
unnecessary litigation all support the
conclusion that Congress favored this The Court’s desire to limit its
simple approach.” Id. at 275. Thus, while holding in Malley-Duff is made clear in
the Court embraced uniformity in North Star. The North Star court
recognizing § 1983 claims as tort claims distinguished Malley-Duff on the ground
for statute of limitations purposes, it did that the event in North Star was a single
not find that the limitations periods incident, “a plant closing,” a “mass layoff
themselves needed to be uniform. It is at a single site of employment,” and it was
only after this characterization of the type “relatively simple and narrow in its
of claim has been completed that the scope,” 515 U.S. at 37 (internal quotations
DelCostello/North Star/Reed examination omitted). The RICO claim in Malley-Duff,
is to be done to determine if there are no on the other hand, is acknowledged as
analogous state statutes or if the state requiring a nexus to interstate or foreign
li m i ta t i o n s p eriods frustra te th e commerce as a jurisdictional element as
practicalities of litigation or are at odds well as an allegation of a pattern of
with federal purpose or law. racketeering, which is likely to include
6
interstate transactions. Malley-Duff, 483 KingVision, however, relies on the
U.S. at 153-54. KingVision is correct that Fifth Circuit Court of Appeals’ decision in
cable piracy, like RICO claims, may Prostar v. Massachi, 239 F.3d 669 (5th
involve wide-spread and multiple Cir. 2001) to argue for the application of
wrongful actions such as theft, tortious the federal limitations period of the
interference with prospective advantage, Copyright Act. We decline, however, to
misrepresentation, civil conspiracy, and follow the holding in Prostar. Although
unjust enrichment, but multiple, interstate the facts parallel those of the present case,
claims are not required as an element of Prostar is distinguishable on the ground
the cause of action under §§ 553 or 605 of that the applicable state law at issue, one
the Cable Act, nor are they at stake in this of general conversion, is not as close an
case. analog to the FCA as the Pennsylvania
piracy statutes.3 Further, the Prostar court
Although the Supreme Court has
appears to conflate, or at least fails to
not yet been faced with the issue of the
distinguish between, the need for
limitations period to apply in FCA/Cable
uniformity in construing the type of statute
Act piracy cases, the issue has arisen in
for limitations purposes and uniformity in
federal district courts and has been
the length of the limitations periods
addressed by the Fifth Circuit Court of
adopted. See Wilson, 471 U.S. at 268-271,
Appeals. As the District Court noted in
275-280. The Prostar court states that the
this case, federal district courts have
FCA requires uniform enforcement via the
applied the federal limitations period under
application of a federal limitations period
the Copyright Act to FCA claims when the
because “issues facing the cable industry
only state law from which to borrow a
[are] national in scope.” 239 F.3d at 676
limitations period was a general
(citing H.R. Rep. No. 98-934, at 22 (1984),
conversion law. We agree with the
reprinted in 1984 U.S.C.C.A.N. 4659,
District Court that “these cases do not
predict the proper outcome of the case at
bar involving a state statute narrowly analogy” rule first announced in
crafted to deter cable piracy.” 2002 U.S. DelCostello is “not only erroneous but
Dist. LEXIS 2275 at *8. It is not, unworkable” because it can result in state
moreover, a requirement that a district limitations applying in some states and
court, in picking an analogous state the federal statute in others. 515 U.S. at
limitations period, determine that every 37. We, however, will leave the
state has such an analogous statutory resolution of this dilemma to the
scheme – but only that the state whose law Supreme Court.
is being applied has such a one.2
3
We take judicial notice that
KingVision identifies New York and
2
In his concurrence in North Star, Mississippi as other states without state
Justice Scalia notes that the “closer piracy analogs.
7
4720-22). This conclusion, however, disputes the applicability of § 910, as it
simply does not follow. The national deals with theft via a “device,” and it is not
concerns of the cable industry are relevant clear that a “device” was used in the
only insofar as they are embodied in the present case to intercept the telecast.
FCA. As a threshold matter, they are used Nevertheless, even though we do not know
to characterize the claim for which a the method of interception used at the El
statute of limitations period is then to be Toro Bar, we can assume reception of the
applied. The violations of the Cable Act, Holyfield-Lewis fight was not the product
however, are particular acts which are of mere serendipity. Further, while
pursued in the locations where they occur KingVision is correct that § 910 speaks
– as was done in the present case. The a b o u t m a n u f a c t u r e o f i l le g a l
localized violations – even if multiple – telecommunications devices and § 553
are very different from the interstate about improper interception of a
activity involved in RICO claims. communication, § 910(e) defines
“manufacture of an unlawful
Following North Star, we turn our
telecommunication device” as using a
attention then to the Pennsylvania piracy
device to receive, transmit, or decrypt a
statutes. Their provisions mirror those of
telecommunications service.
the FCA. Section 3926 of the
Pennsylvania statute, like 47 U.S.C. § 605, The District Court is correct that §
makes punishable by fine or imprisonment 910 provides “a remarkably close analog
the theft of certain wire services.4 It to the Cable Act [§ 553].” 2002 U.S.
allows an aggrieved service provider LEXIS 2275 at *6. As the court described,
“ e q uitable or declaratory re l i ef , § 910, like 47 U.S.C. § 553:
compensatory and punitive damages . . .
(1)specifically prohibits use
costs . . . and attorney fees.” 18 Pa. Cons.
of an unlawful
Stat. § 3926(g). Section 910 is the state
telecommunications device
companion statute to § 3926 and is the
to decode “transmissions,
state statute addressed by the District
signals or services over any
Court. It focuses upon the use of devices
cable television . . . .” 18 Pa.
for theft of telecommunications services,
mirroring 47 U.S.C. § 553.5 KingVision
the present case. See TKR Cable Co. v.
4
Section 3926 pertains to wire Cable City Corp., 267 F.3d 196 (3d Cir.
and radio services, and § 605 to 2001) (holding that “a cable television
telecommunication and cable services. descrambler does not facilitate the
interception of ‘communications by
5
KingVision alleged violation of radio’ and therefore the statutory
both §§ 605 and 553 of the Cable Act. damages available under § 605 do not
Section 605, however, does not apply in apply here.”)
8
Cons. Stat. § 910(e) (c)(3)(B)).
(compare with 47
U.S.C. § 553(a)).
Consequently, we conclude that the
District Court did not err in holding that,
(2) provides for criminal “because Section 910 is parallel in
sanctions; prior convictions substance and form to the Cable Act, it is
under the Cable Act are the ‘closer fit’ the Supreme Court
considered in grading an contemplated as the appropriate source
offense. 18 Pa. Cons. Stat. from which to borrow a statute of
§ 910(b)(5) (compare with limitations, precluding KingVision’s
47 U.S.C. § 553(b)). proposed adoption of the Copyright Act’s
three-year period.” 2002 U.S. LEXIS
2275 at *8 (internal citations omitted).
(3) provides for civil
Furthermore, this case does not
statutory sanctions of $250
warrant the exception of applying a federal
to $10,000 per violation
limitations period where a state limitations
absent evidence that the acts
period “frustrates the practicalities of
were willful and for
litigation” or otherwise interferes with
p u r p o s e s o f p e r s o n al
federal policy or law. KingVision knew of
financial gain or commercial
the alleged violation over two years prior
advantage, in which case the
to commencing suit. In such a
court may increase the
straightforward and relatively simple suit,
award of statutory damages
it is difficult to imagine why a two year
by no more than $50,000 per
limitations period would be inadequate.
violation. 18 Pa. Cons. Stat.
See, e.g., North Star, 515 U.S. at 36
§ 910(d.1)(2)-(3) (compare
(holding that a two year limitations period
with 47 U.S.C. § 553(c),
in a fairly straightforward WARN claim
especially part (c)(3)(A)(ii),
was insufficient to “frustrate the
(c)(3)(B)).
practicalities of litigation”). The Supreme
Court has turned to federal law for
limitations periods when a state limitations
(4) provides for injunctive
period was too short to accommodate the
relief, statutory or actual
special circumstances of litigation, such as
damages, attorney’s fees,
investigation. See DelCostello, 462 U.S.
and costs in almost identical
at 166 (holding that a state limitations
language as the FCA. 18
period of generally between 10 and 90
Pa. Cons. Stat. § 910(d.1)(1-
days was insufficient to bring a LMRA §
3), (d)(2)(iv) (compare with
301/fair representation hybrid action).
47 U.S.C. § 553 (c)(2)-
9
There are no such special considerations
relevant to bringing CFA claims that
would be frustrated by a two-year
limitations period. Cf. Reed, 488 U.S. at327-328n.4 (finding in the LMRDA
context that there was no indication that it
should take more than two years to identify
an injury and hire an attorney).
Additionally, the two year state
limitations period does not frustrate the
purpose or implementation of the FCA or
its Cable Act amendments. The overall
purpose of the FCA is to “regulat[e]
interstate and foreign commerce in
communication by wire and radio so as to
make available . . . to all the people of the
United States . . . a rapid efficient . . .
communication service with adequate
facilities at reasonable charges . . .. ” 47
U.S.C. § 151. More specifically, Congress
passed §§ 553 and 605 to prevent
unauthorized interception of cable
transm issions, including interception
through unauthorized use of decoding
devices. These policies and laws are not
impeded in the present case where
KingVision has had up to two years to
bring suit in order to deter theft and keep
the costs of services down. There is no
evidence that the practicalities of litigation
require more time.
Conclusion
For the foregoing reasons, we will
affirm the judgment of the District Court,
dismissing KingVision’s Complaint.
10