Directv, Inc. v. Dunagan et al

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
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06/10/06
Directv, Inc. v. Danny Dunagan, et al.
05-01028
Memorandum Opinion re: [6-1] Motion For Summary Judgment by Danny Dunagan a
Debra Dyan Dunagan.
Received on: 2005-08-18 13:39:09.000
2005-08-18 00:00:00.000
2005-08-22 00:00:00.000
Ellen Snyder
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
DANNY DUNAGAN,
Debtor. No. 7-04-17402 MR
DIRECTV, INC.,
Plaintiff,
v. Adv. No. 05-1028 M
DANNY DUNAGAN and
DEDRA DYAN DUNAGAN,
Defendants.
MEMORANDUM OPINION
THIS MATTER is before the Court on Defendants’ Motion for Summary Judgment as to All
Counts (the “Motion”) filed on April 18, 2005. Plaintiff, DIRECTV, Inc. (“Plaintiff”) filed a response
(the “Response”) on May 9, 2005. Defendants filed a Reply Memorandum. The bankruptcy
proceeding was filed on October 12, 2004. This dischargeability proceeding is based on causes of
action for violations of federal statutory law and on a state common law cause of action for conversion.
Plaintiffs assert that Danny Dunagan (“Defendant” or “Danny Dunagan”) and his non-filing spouse,
Dedra Dyan Dunagan (“Dedra Dunagan”) are liable for damages for unauthorized interception of
Plaintiff’s satellite television programming. Specifically, Plaintiff seeks damages and injunctive relief for
violations of the Cable Communications Policy Act (47 U.S.C. § 605) (CCPA), violations of the
Electronic Communications Privacy Act (18 U.S.C. § 2511 et seq.) (the “Wiretap Act”), and civil
conversion under state law. Plaintiff seeks to have any damage award declared non-dischargeable in
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1 See 11 U.S.C. § 524(a)(3)(discharge of community debt precludes action against after-
acquired community property unless debt is non-dischargeable as to non-filing spouse under § 523).
2 Dedra and Danny Dunagan were married on May 19, 2004. Motion Ex. 2 Affidavit of Dedra
Dyan Dunagan (“Dedra Dunagan Affidavit”) at ¶ 2. Dedra Dunagan was not married to or living with
Defendant during the period of May 1, 2001 and December 4, 2001, when the devices were
purchased. Dedra Dunagan Affidavit at ¶ 3. Danny Dunagan discarded the devices in the summer of
2002, before he was married to Dedra Dunagan. Dunagan’s Affidavit ¶¶ 5, 9, 11, and 12.
2
this bankruptcy or in a hypothetical bankruptcy filed by Dedra Dunagan.1
In the Motion, Defendants ask this Court to grant summary judgment on all counts of the
Complaint. First, Dedra Dunagan argues that she could not have intercepted the satellite transmissions
because she was not married to or living with Danny Dunagan when he purchased and allegedly used
the devices. Moreover, Danny Dunagan stated in his affidavit that he disposed of the devices before he
married Dedra Dunagan.2 The Court finds that summary judgment in favor of Dedra Dunagan is
appropriate on all counts because no evidence was presented to counter the affidavit statements that
Danny Dunagan disposed of the devices before he married Dedra Dunagan and that Dedra Dunagan
was not married to or living with Danny Dunagan when he allegedly used the devices to intercept
satellite television. Because the Court will grant summary judgment dismissing the counts against Dedra
Dunagan, the remainder of this opinion will focus on the claims against Danny Dunagan. The Court will
refer to him as Defendant.
Defendant asserts that Plaintiff has failed to show that he actually intercepted Plaintiff’s satellite
transmissions, an essential element of liability under the federal statutory and state common law causes
of actions. Defendant admits he purchased certain devices that can be used to intercept satellite
television signals, but he argues that Plaintiff has failed to rebut his evidence that he used the devices for
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legitimate purposes in his computer business. The Court finds that genuine fact issues exist regarding
whether Defendant used the devices to intercept satellite television signals in violation of the applicable
federal statutes, and whether he converted Plaintiff’s property.
In connection with this ruling, the Court finds the following:
Undisputed Facts
1. Plaintiff is in the business of broadcasting satellite television programming. Plaintiff relays
digital signals to satellites, and those signals are then broadcast to Plaintiff’s customers.
2. Plaintiff provides access to television channels only by subscription agreement and on a pay-
per-view basis. To receive the satellite programming, customers must set up an account with Plaintiff
and must obtain an outdoor satellite dish and other system hardware. The satellite dish is connected to
an indoor receiver, known as an integrated receiver/decoder (“IRD”) (a unit approximately the size of a
VCR), which is then connected to the customer’s television monitor. See Response Exhibit B, Affidavit
of James F. Whalen, Senior Director, DIRECTV Office of Signal Integrity ¶¶ 1, 5-7 (“Whalen
Affidavit”).
3. To prevent unauthorized reception and use of Plaintiff’s transmissions, Plaintiff encrypts
(digitally scrambles) its satellite transmission. Each customer is issued a removable access card, about
the size of a credit card, containing a small microprocessor (“Access Card”), which when plugged into
the customer’s IRD, unscrambles the signal to provide access only the television programming
purchased by the customer. The Access Card also captures and transmits the customer’s pay-per-
view information to Plaintiff for billing purposes via a telephone modem in the IRD. This is
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3 These devices may be purchased via the Internet, but some are available at retail stores such
as Radio Shack.
4 In January 2001, Plaintiff released an ECM that rendered certain unauthorized Access Cards
inoperable. This ECM has become known as the “Black Sunday ECM.”
4
accomplished through a “call back” in which Plaintiff contacts the modem each month and the modem
reports any additional programming viewed by the customer. The customer is then billed for the
additional programming. Whalen Affidavit ¶¶ 5-7.
4. Defendant purchased Plaintiff’s satellite equipment on or about July 12, 1995 and opened
an account with Plaintiff. Response Ex. C. Defendant subscribed to satellite television channels until
June 21, 2003, when the Defendant’s subscription was cancelled. Whalen Affidavit ¶ 33.
5. Certain devices can be used to reprogram the Access Card to illegally obtain additional
programming, particularly pay-per-view programming, not included in the customer’s subscription
agreement.3 Plaintiff circumvents the use of these illegally programmed Access Cards by replacement
of older, compromised Access Cards with new, secure cards and by periodically transmitting electronic
countermeasures (“ECMs”). ECMs are electronic signals sent through the data stream to disable
reprogrammed Access Cards.4
6. On or about January 24, 2002, Plaintiff executed a Temporary Restraining Order on a
company known as, EQ Stuff, Inc. Pursuant to the Order, Plaintiff obtained business records from EQ
Stuff, which indicated that Defendant purchased the following devices on the following dates:
a) one EQ Zapulator and ten EQ Bootloaders on May 1, 2001;
b) three EQ Zapulators on May 21, 2001;
c) two EQ Bootloaders on June 4, 2001;
d) three EQ Zapulators and four EQ Bootloaders on June 20, 2001;
e) four EQ Bootloaders on September 14, 2001; and
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5 Documents seized at EQ Stuff offices showing these purchases were presented by Plaintiff in
Response Exhibit A and numbered DTV 04440 through DTV 04445. Defendant argues in the Reply
that these business documents from EQ Stuff should be stricken because they are unauthenticated, but
in Defendant’s recitation of the undisputed facts in his Motion, he admits purchasing 40 Access Devices
from EQ Stuff. Therefore, the Court will deny the request to strike Exhibit A to the Response.
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f) six EQ Bootloaders on December 4, 2001.5
7. The EQ Zapulator is a device known as an “emulator.” This device connects to a serial port
of a personal computer and to the slot where an Access Card usually is located in an IRD. The
personal computer is then able to run software that duplicates or “emulates” certain functions of an
Access Card, which allows the user to access Plaintiff’s programming services without payment.
Emulators can also be used to bypass the effects of ECMs. Whalen Affidavit 27.
8. A “bootloader” is a device that can be inserted into the customer’s IRD and connected to a
disabled Access Card. Access Cards check the write-once memory during their boot cycle and are
rendered inoperable if they detect new values from an ECM. Bootloaders provide a “glitch” that
causes the Access Card to skip this check, thereby circumventing the effect of the ECM and
reactivating disabled Access Cards. Whalen Affidavit ¶ 28.
9. On May 25, 2001, Plaintiff executed Writs of Seizure at the mail shipping facility used by
Canadian Security and Technology (“Canadian”). Plaintiff obtained sales records, shipping records, e-
mail communications, credit card receipts and other records, which indicated that on or about May 10,
2001, Defendant purchased two “MK1 Programmer/MK2 Unlooper-WTX Combos” from Canadian.
Whalen Affidavit ¶ 26 and Response Ex. A DTV 02496. These devices can be used to clone Access
Cards, enabling an inactivated Access Card to unscramble the same programming as a legitimate
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Access Card. These devices can also be used to program legitimate Access Cards to receive extra
programming, including pay-per-view programs, without payment. Whalen Affidavit ¶ 30. The
unlooper portion of the device can be used to restore illegally modified Access Cards that have been
disabled by ECMs. The WTX Code is software that can be used to restore disabled Access Cards.
Whalen Affidavit ¶ 31.
10. Plaintiff’s business records show that Defendant possessed three Access Cards during his
subscription period. None of the Access Cards reported additional programming on “call backs”
during the time between the middle of 2000 and the date of cancellation in June 2003. This lack of call
backs can indicate that a subscriber possesses an illegally modified Access Card and has unplugged his
IRD from the phone line to avoid detection. Whalen Affidavit ¶ 34.
11. In March of 2001 just before he began purchasing the devices, Defendant changed his
subscription agreement to a lower programming level. Account Records at DTV 03519.
12. Defendant is employed in Muleshoe, Texas as an internet technician, providing technical
support for his employer’s customers and working on his employer’s computer systems. Defendant
used to have a computer consulting business and computer sales business. Motion Ex. 1, Second
Affidavit of Defendant Danny Dunagan (“Dunagan’s Affidavit”) ¶ 2-3.
13. Defendant was hired as a computer consultant by the Muleshoe Public Library to design
access control cards for the library’s public access terminals. Dunagan’s Affidavit ¶ 4-5. Defendant
states that he purchased an unlooper along with an ISO card programmer in connection with this
project. Defendant states that the EQ Bootloaders and the other devices were purchased for use in his
business. ISO card programmers and unloopers are used to program “smart cards” used by banks,
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credit card companies, and by companies that use security access doors. Dunagan’s Affidavit ¶¶ 5-13.
Discussion
Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact
and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Lack of a
genuine issue of material fact means that the evidence is such that no reasonable fact finder could find in
favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986). The moving party bears the initial burden of demonstrating the absence of a
genuine issue of material fact. This burden may be met by showing that there is a lack of evidence to
support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548,
91 L.Ed.2d 265 (1986). Once the moving party has properly supported its motion for summary
judgment, the burden shifts to the nonmoving party to show that there is a genuine issue of material fact
left for trial. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. “[A] party opposing a properly supported
motion for summary judgment may not rest on mere allegations or denials of his pleading, but must set
forth specific facts showing that there is a genuine issue for trial.” Id. The court must consider the
record in the light most favorable to the nonmoving party. Bee v. Greaves, 744 F.2d 1387, 1396 (10th
Cir.1984), cited in DIRECTV v. Hosey, 333 F.Supp.2d 1102, 1105-06 (D. Kan. 2004).
In Count 1 Plaintiff claims that Defendant violated the CCPA, which provides in relevant part
as follows:
(a) Practices prohibited
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6"Radio communication" includes television transmissions. Allen B. DuMont Laboratories v.
Carroll, 184 F.2d 153 (3d Cir.1950), cert. denied, 340 U.S. 929, 71 S.Ct. 490, 95 L.Ed. 670
(1951).
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. . . No person not being authorized by the sender shall intercept any radio6 communication and
divulge or publish the existence, contents, substance, purport, effect, or meaning of such
intercepted communication to any person. No person not being entitled thereto shall receive or
assist in receiving any interstate or foreign communication by radio and use such communication
(or any information therein contained) for his own benefit or for the benefit of another not
entitled thereto.
47 U.S.C. § 605(a). See DIRECTV, Inc. v. Barnes, 302 F.Supp.2d 774, 780 (W.D.Mich. 2004) (“.
. . to prevail on its claim under this section, DIRECTV must prove that [defendant] received, assisted in
receiving, or intercepted DIRECTV satellite transmission.”).
In Count 2, Plaintiff claims that Defendant violated the following provisions of the Wiretap Act,
18 U.S.C. §§ 2510, et. seq.:
Interception and disclosure of wire, oral, or electronic communications prohibited
(1) Except as otherwise specifically provided in this chapter any person who--
(a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or
endeavor to intercept, any wire, oral, or electronic communication;
(b) intentionally uses, endeavors to use, or procures any other person to use or endeavor to use
any electronic, mechanical, or other device to intercept any oral communication when–
. . .
(ii) such device transmits communications by radio, or interferes with the transmission of such
communication;
. . .
(c) intentionally discloses, or endeavors to disclose, to any other person the contents of any
wire, oral, or electronic communication, knowing or having reason to know that the information
was obtained through the interception of a wire, oral, or electronic communication in violation
of this subsection; [or]
(d) intentionally uses, or endeavors to use, the contents of any wire, oral, or electronic
communication, knowing or having reason to know that the information was obtained through
the interception of a wire, oral, or electronic communication in violation of this subsection; . . .
shall be punished as provided in subsection (4) or shall be subject to suit as provided in
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7 Plaintiff requests an award of statutory damages, which are available for violations of the
CCPA. 47 U.S.C. § 605(e)(C)(i)(II).
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subsection (5). 18 U.S.C. § 2511.
Section 2511 imposes criminal liability on one who intentionally intercepts, endeavors to
intercept, or procures any other person to intercept any electronic communication; however, Section §
2520(a) creates a private cause of action for violations of § 2511. Barnes, 302 F.Supp.2d at 778.
Actual damages or statutory damages are available in civil suits. 18 U.S.C. §§ 2511, 2520.
In Count 3 Plaintiff claims that Defendant violated another provision of the CCPA, which states
as follows:
(4) Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes
any electronic, mechanical, or 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 subsection (a) of this section, shall be fined not more than $500,000 for each
violation, or imprisoned for not more than 5 years for each violation, or both. For purposes of
all penalties and remedies established for violations of this paragraph, the prohibited activity
established herein as it applies to each such device shall be deemed a separate violation.7
47 U.S.C. § 605(e)(4).
With respect to Counts 1 and 2, Plaintiff argues that the Court can infer that Defendant
intercepted its satellite transmissions because he purchased devices which are primarily used to
intercept Plaintiff’s satellite transmissions and because his account history shows a lack of “call backs”
from his Access Card and a change in his subscription level just before he began purchasing the
devices. With respect to Count 3, Plaintiff asserts that the Court can also infer that Defendant used the
devices to reprogram Access Cards and to design electronic systems for use in unauthorized
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interception of Plaintiff’s satellite signal. Plaintiff argues that by removing Access Cards and inserting
altered Access Cards into IRD’s, Defendant engaged in the unlawful assembly and/or modification of
devices primarily used in unauthorized decryption of satellite programming in violation of 47 U.S.C. §
605(e)(4). Moreover, Plaintiff alleges that the number of devices purchased by Defendant indicates
that he was distributing to others devices to aid in the interception of satellite transmissions, which is
also prohibited by § 605(e)(4).
In Count 4 Plaintiff claims that Defendant converted Plaintiff’s property for his own use or
benefit. Under New Mexico law, conversion is the unlawful exercise of dominion and control over
personal property belonging to another in exclusion or defiance of the owner's rights, or acts
constituting an unauthorized and injurious use of another's property, or a wrongful detention after
demand has been made. Nosker v. Trinity Land. Co., 107 N.M. 333, 337-38, 757 P.2d 803, 807-
08 (N.M.App. 1988). Using devices for unauthorized interception of satellite programming can
constitute a conversion of property. See DIRECTV, INC. v. Karpinsky, 274 F.Supp.2d 918, 921
(E.D.Mich. 2003)(denying summary judgment to defendant on conversion claim where evidence
showed purchase of interception devices).
Counts 5-7 allege that any damage award is non-dischargeable in bankruptcy under 11 U.S.C.
§ 523(a)(2), (a)(4) and (a)(6).
Regarding Counts 1 and 3 alleging violations of the CCPA, Defendant argues that only an
aggrieved person can pursue a civil claim under the CCPA, and Plaintiff is not an “aggrieved person” as
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8 Pursuant to the CCPA any person aggrieved by any violation of § 605(a) may bring a civil
action in a U.S. District Court or any other court of competent jurisdiction. 47 U.S.C. § 605(e)(3)(A).
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defined by 47 U.S.C. § 605(d)(6).8 According to § 605(d)(6), the 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 paragraph (4) of subsection (e) of this section,
shall also include any person engaged in the lawful manufacture, distribution, or sale of
equipment necessary to authorize or receive satellite cable programming.”
Plaintiff is a retail distributor of satellite programming and satellite receiving equipment; therefore,
Plaintiff is a person aggrieved for purposes of the CCPA. See also, DIRECTV v. Boonstra, 302
F.Supp.2d 822, 829 (W.D.Mich. 2004)(finding that DIRECTV had standing as person aggrieved
under § 605).
With respect to Counts 1-3, Plaintiff claims that a fact issue exists regarding whether Defendant
used the devices to intercept its satellite transmissions and that Defendant’s explanation of how he used
the devices calls for a credibility determination. Defendant does not dispute that he purchased the
devices listed above. However, Defendant asserts that he only used the devices for legitimate purposes
in his computer sales and consulting business. Defendant asserts that some of the devices are available
at retail stores, including Radio Shack, and that these devices have legitimate uses. Dunagan’s Affidavit
¶ 12. Defendant described one project in which he was hired by a public library to design access cards
for the library’s access terminals. Dunagan’s Affidavit ¶ 4. Defendant asserts that one of the devices,
the MK1 Programmer/MK2 Unlooper-WTX Combo, allowed him to program the library access cards
and then make changes to the programming when errors were made. Dunagan’s Affidavit ¶ 5.
Defendant states that the same devices are used to program “smart cards” that are used by banks and
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9 Defendant asserts that this evidence also supports summary judgment on the claim for
injunctive relief.
10 In his Reply to the Response, Defendant argues that Whalen’s Affidavit does not properly
state the basis upon which he is familiar with the devices at issue. Defendant argues that familiarity with
such devices requires specialized knowledge of an expert, and Whalen’s Affidavit does not indicate
how he qualifies as an expert on these devices. According to Defendant, Whalen may not render an
opinion on an ultimate fact issue, i.e. whether Defendant intercepted satellite transmissions. See Rules
702 and 704(a), Fed. R. Evid.
Whalen states that he is the Senior Director in DIRECTV’s Office of Signal Integrity,
principally responsible for investigating piracy of DIRECTV’s satellite transmissions. Whalen further
states that he has overseen several hundred investigations of individuals and businesses engaged in the
design, manufacture, distribution and sale of pirate Access Cards and other pirating devices. Whalen’s
affidavit otherwise meets the standards of Rule 7056(e), Fed. R. Bankr. P.
Although Whalen does not claim to be an expert, the Court finds that he is qualified to give an
opinion on the devices at issue because of his experience in similar investigations. Therefore, the Court
will consider the evidence in Whalen’s affidavit concerning the use of these devices.
Plaintiff also argues that many of Whalen’s statements are inadmissible hearsay. The Court has
not considered any hearsay statements in this decision. See Casas Office Machines, Inc. v. Mita
Copystar, 42 F.3d 668, 682 (1st Cir. 1994), citing 10B Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 2738 (3d ed. 1998)(“. . . [A] court will disregard only those portions
of an affidavit that are inadmissible and consider the rest of it.”).
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financial services companies. Dunagan’s Affidavit ¶ 5. Defendant denies using any of the devices to
intercept satellite television programming. Dunagan’s Affidavit ¶¶ 5, 11-12. Defendant also claims he
discarded all of the devices in 2002 when they became obsolete. Defendant’s Affidavit ¶¶ 9-12.9
Additionally, Defendant argues that Plaintiff lacks direct evidence that Defendant used the devices to
intercept Plaintiff’s satellite signal. Defendant argues that a crucial element of Plaintiff’s case,
unauthorized interception of satellite signal, is not supported by any evidence.10
Plaintiff argues that the Court should deny summary judgment because it has presented
circumstantial evidence to raise a genuine factual dispute regarding whether Defendant intercepted its
satellite signal without authorization. First, Defendant was a DIRECTV subscriber with the appropriate
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satellite receiving equipment and is familiar with computer and technical equipment. Second, the
devices purchased by Defendant can be used to intercept satellite television signals. According to
Whalen, the sole purpose for some of the devices is interception of satellite signals. In addition, Whalen
testified that there is no reason to purchase a bootloader device unless a purchaser is in possession of a
DIRECTV Access Card that has been disabled by an ECM. Whalen Affidavit ¶¶ 28-29. Moreover,
ECM’s only disable unauthorized or altered Access Cards, supporting the inference that Defendant
possessed an unauthorized Access Card. Whalen Affidavit ¶ 11. According to Whalen, the MK1
Programmer is designed and marketed to permit illegal programming of valid Access Cards. This
device can be used to clone a disabled Access Card enabling it to receive the same programming as an
authorized Access Card or it may be used to program a valid Access Card to receive more DIRECTV
programming than the Access Card is authorized to receive. Whalen Affidavit ¶ 30. The MK1
Programmer was purchased with an MK2 Unlooper. Whalen states that there is no legitimate purpose
for MK2 Unlooper device. This device was shipped with WTX Code, which Whalen states is a type
of software designed to restore disabled DIRECTV Access Cards. Whalen Affidavit ¶ 31. Third,
Defendant’s account history supports an inference that he was intercepting satellite programming.
According to Whalen, lack of call backs from Defendant’s IRD for three years during his subscription
period, can indicate that Defendant used an altered Access Card. Whalen Affidavit ¶ 34. Also,
Defendant changed his subscription to a lower level two months before his first purchase of devices
from EQ Stuff. Response Ex. 1, DTV 03514.
This type of circumstantial evidence has been found sufficient to deny summary judgment on
similar claims. See e.g. DIRECTV, Inc. v. Hosey, 333 F.Supp.2d 1102, 1107 (D. Kan.
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2004)(denying summary judgment with evidence that defendant was subscriber who abruptly stopped
purchasing pay-per-view movies prior to receipt of unlooper and unplugged DIRECTV equipment
from phone line); Barnes, 302 F.Supp.2d at 784 (finding material fact issues on evidence that
defendant was subscriber who purchased an unlooper, whose account history supported use of device
and who admitted he purchased an unlooper to obtain free DIRECTV but was unable to get device to
work); Karpinsky, 274 F.Supp2d 918, (E.D. Mich. 2003)(denying summary judgment on
reconsideration when presented with evidence that showed that the defendant was DIRECTV
subscriber and purchased pirate access devices from a retail store); and Community Television
Systems, Inc. v. Caruso, 134 F.Supp.2d 455, 461 (D.Conn. 2000), aff’d 284 F.3d 340 (2nd Cir.
2002)(holding that circumstantial evidence of defendants’ purchase of descrambler devices and
defendants’ assertion of 5th amendment privilege against self incrimination was sufficient to show
violation of CCPA). Therefore, the Court finds that the circumstantial evidence presented here is
sufficient to raise genuine fact issues as to whether Defendant intercepted satellite signals and/or assisted
others in intercepting satellite signals precluding summary judgment in favor of Defendant on Counts 1,
2 and 3.
Conversion under New Mexico Law
Defendant argues that he could not be liable for conversion of Plaintiff’s satellite signal because
he did not deprive Plaintiff of its signal, a required element of a conversion claim. Defendant cites
DIRECTV v. Lockwood, 311 F.Supp.2d 1147, 1150 (D.Kan. 2004), in which the court rejected
Plaintiff’s claims for conversion of its signal because the defendant was not in exclusive possession of
Plaintiff’s property as required by Kansas conversion law. See id. at 1149 (stating that conversion
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under Kansas law is the “unauthorized assumption or exercise of the right of ownership over goods or
personal chattels belonging to another to the exclusion of the other's rights.”)(citations omitted). Under
New Mexico law, however, a conversion can be the exercise of control over personal property
belonging to another in exclusion or defiance of the owner's rights, or the unauthorized and injurious use
of another's property. Nosker, 107 N.M. at 337-38, 757 P.2d at 807-08. Courts in other states have
allowed claims for conversion of satellite signals, and based on the New Mexico definition of
conversion, the Court finds that Defendant can be liable for conversion of Plaintiff’s signal under New
Mexico law. See e.g., DIRECTV, Inc. v. McCool, 339 F.Supp.2d 1025 (M.D.Tenn. 2004)(allowing
claim under Tennessee conversion law); DIRECTV v. Alter, 2004 W.L. 1427108 at * 3 (N.D.Ill.
2004)(noting difference in opinion within Northern District of Illinois and concluding that a satellite
signal can be converted); DIRECTV, Inc. v. DiSalvatore, 2003 WL 24051575 at * 6 (N.D.Ohio
2003)(allowing claim under Ohio conversion law); Don King Productions/Kingvision v. Lovato, 911
F.Supp. 419, 423 (N.D.Cal.1995) (allowing claim for conversion of television signal under California
law). The Court finds that interception of a satellite signal can constitute conversion under New Mexico
law; and therefore, summary judgment on the conversion claim is inappropriate.
Conclusion
The evidence that Defendant was a DIRECTV subscriber with equipment necessary to receive
DIRECTV’s satellite transmission, that he purchased devices that can be used for unauthorized
interception of satellite television signals and evidence of Defendant’s account activity, which was
changed just before he purchased the devices, is sufficient to create genuine issues of fact precluding
summary judgment on Plaintiff’s claims under the CCPA, the Wiretap Act and for conversion.
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For the foregoing reasons, the Court will grant the Motion as to Dedra Dunagan, and will deny
the Motion as to Defendant, Danny Dunagan. An appropriate order will be entered.
MARK B. McFEELEY
UNITED STATES BANKRUPTCY JUDGE
I certify that on the date shown on the attached document verification, a true and correct copy of
the foregoing was either electronically transmitted, faxed, delivered or mailed to the listed counsel
and/or parties.
Douglas R. Vadnais
Attorney for Plaintiff
P.O. Box 2168
Albuquerque, NM 87103-2168
Eric D. Dixon
Attorney for Defendants
309 South Avenue A
Portales, NM 88130
Ellen C. Snyder
Law Clerk
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