Court: District Court, W.D. North Carolina; October 17, 2012; Federal District Court
Defendants’ Partial Motion to Dismiss was presented to the Court, alongside Plaintiffs' response and the Magistrate Judge’s Memorandum and Recommendation (M.R.), which advised granting the motion. The deadline for filing objections to the M.R. was September 17, 2012, and no objections were submitted by either party. The Court has reviewed the M.R. and found no clear error in the Magistrate Judge's thorough evaluation, thereby accepting the M.R. as the Court's final decision. Consequently, the Court has granted the Defendants’ motion to dismiss counts one, two, and seven of the Plaintiffs' Complaint.
The procedural background notes that Ark Promotions, Inc. filed a complaint on February 27, 2012, against YouTube and Justin.tv, alleging unauthorized broadcast of a pay-per-view boxing match. The Defendants filed their Joint Motion to Dismiss on April 20, 2012, which was followed by Plaintiffs' opposition and Defendants’ reply. The matter is now ripe for review and recommendation for disposition.
A motion to dismiss under Fed. R. Civ. P. 12(b)(6) evaluates the legal sufficiency of a complaint without delving into factual disputes or the merits of a claim. A complaint survives this motion if it presents sufficient facts to establish a plausible claim for relief, as outlined in Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly. The court must accept factual allegations as true and view the complaint favorably towards the plaintiff, but it need not accept legal conclusions presented as factual claims.
In the case at hand, the plaintiff, a promoter of a boxing match featuring Holyfield and Williams on January 22, 2011, at the Greenbrier Resort, sold tickets and licensed broadcast rights to distribute the match via pay-per-view. The plaintiff invested substantially in promotion and production, expecting to recover costs through these sales. The plaintiff holds copyright for the live broadcast, which was reportedly retransmitted without authorization on www.justin.tv by users who accessed the signal from licensed providers. Despite notifying Justin.tv of the unauthorized transmissions before and during the event, the platform failed to take action, resulting in significant unauthorized viewership of the broadcast.
On January 22-23, 2011, YouTube allegedly received, transmitted, published, reproduced, distributed, and/or displayed a Live Broadcast, allowing thousands to view it without payment to the Plaintiff. The Complaint asserts nine causes of action, with Defendants' Joint Motion to Dismiss targeting the first, second, and seventh claims under Federal Rule of Civil Procedure 12(b)(6). The first cause alleges unauthorized reception of cable service, violating 47 U.S.C. 553, while the second claims unauthorized publication of communications under 47 U.S.C. 605, and the seventh involves inducement of copyright infringement.
Defendants argue for dismissal on the grounds that: 1) the Communications Act does not apply to the alleged conduct; 2) even if applicable, claims are barred by Section 230(c) of the Communications Decency Act; and 3) the inducement claim lacks allegations that Defendants took affirmative steps to encourage copyright infringement.
In the first cause, Plaintiff asserts that Defendants intercepted or assisted in receiving the Live Broadcast, constituting a violation of 47 U.S.C. 553, which prohibits unauthorized interception of cable communications. The second cause claims that Defendants received and published the Live Broadcast's content without authorization, benefiting themselves or others, thus violating 47 U.S.C. 605.
Under 47 U.S.C. § 605 of the Communications Act, unauthorized individuals are prohibited from intercepting radio communications or disclosing their content. This statute specifically prohibits receiving or utilizing interstate or foreign communications without entitlement, as well as divulging information from intercepted communications. Defendants argue for the dismissal of Communications Act claims, asserting that the alleged actions do not constitute violations of the Act. They claim that § 605 pertains to the interception of cable television signals before they are transmitted through cable, while § 553 addresses interception at the transmission point within a cable system. The legislative history indicates that § 605 is aimed at satellite signal piracy, whereas § 553 targets theft from cable systems. Defendants assert that these provisions do not apply to the operation of a website where users upload pre-transmitted video clips. They reference the case Zuffa, LLC v. Justin.tv, which involved similar allegations against the same defendant, claiming that the Communications Act claims in the current case are indistinguishable from those in Zuffa and should thus be dismissed for the same reasons.
Defendants highlight key language from the Zuffa decision indicating that Zuffa does not claim Justin.tv intercepted or received a cable or satellite broadcast. Instead, Zuffa alleges that users of Justin.tv received a broadcast and subsequently streamed a digital copy online. The court concludes that this behavior is more appropriately dealt with under copyright and potential trademark law, as Justin.tv had no direct relationship with the original broadcast. Therefore, the Communications Act does not apply to this situation, leading to the dismissal of Zuffa’s eleventh and twelfth claims.
The Cablevision Of Michigan case is also referenced, where a bar illegally broadcast a pay-per-view boxing match. The court noted that Section 605(a) prohibits satellite signal piracy, while Section 553 addresses cable signal theft. The court ruled that the bar's actions did not constitute an interception of cable programming, resulting in a summary judgment in favor of the defendant.
Plaintiff contends that the cited cases are distinguishable, asserting that the Kingvision decision did not address Sections 553 and 605's applicability. Plaintiff further points out that a precedent from Kingvision indicated that programming cannot be intercepted once it reaches its destination. However, the Plaintiff argues that their case involves a near-simultaneous retransmission of a live broadcast, unlike the delayed rebroadcasts in the Cablevision case.
Plaintiff claims that the Sixth Circuit's ruling in Cablevision is flawed due to its reliance on House Report 98-934, asserting that it incorrectly interprets Section 553 as only applicable to signals actively distributed over a cable system. The Plaintiff argues that Section 553 prohibits unauthorized interception of any video programming over a cable network, regardless of the method of interception. The Cablevision court concluded that Sports Forum did not intercept or receive a one-way transmission of video programming, thus no violation of Section 553 occurred. It also noted that Sports Forum did not ‘receive or assist in receiving’ any interstate or foreign communication by radio, as required under Section 605(a). The Sixth Circuit's interpretation aligns with the Seventh Circuit's view, as articulated in TCI Cablevision of New England v. Pier House Inn, which found that Section 605 applies to unlawful interceptions of cable programming transmitted through the air, while Section 553 applies to those occurring over a cable system. The court finds the interpretations of the Sixth and Seventh Circuits more persuasive than the Plaintiff's.
The Plaintiff also argues that the Zuffa decision differs from the current case, despite acknowledging their similarities. The Zuffa case involved users rebroadcasting a cable or satellite broadcast via internet stream, which the Plaintiff contends is comparable to the actions in the present case. However, the court notes that in Zuffa, it was determined that the Communications Act did not apply because Justin.tv had no relationship with the original signal and did not intercept any actual cable or satellite broadcast. The court finds the reasoning in Zuffa persuasive for the current case.
The undersigned finds Plaintiffs' attempts to differentiate the Cablevision and That’s Entertainment cases unconvincing, as well as their argument for the applicability of the Communications Act to the current case. Both referenced cases involved delays in rebroadcasting similar to the present case but also included an intermediary party that received and retransmitted the communication. The Plaintiffs did not provide any supporting case law to substantiate their position against these precedents. The undersigned is hesitant to declare the Communications Act inapplicable to delayed retransmissions, arguing that Congress did not intend for the Act to impose liability on parties who retransmit signals received from cable or satellite providers.
The case of Premium Sports, Inc. v. Connell further supports the Defendants' argument, where the court ruled on a violation claim under 605(a) involving an unauthorized broadcast reception. In Premium Sports, the defendants received a signal through a friend in Dublin, who initially received the broadcast via RTE and then transmitted it to the defendants. The court emphasized the necessity of an "interception" of signal transmission for a violation under 605(a), defining "intercept" as stopping or seizing a signal before it reaches its destination. In both Premium Sports and the current case, there are no allegations of unauthorized initial receipt of the broadcast. Thus, the court concluded that the claims against the defendants failed as a matter of law, indicating that even if interception were not required for a 605 violation, the Plaintiff has not established a viable claim for relief.
Plaintiff claims violations of 47 U.S.C. § 605, which prohibits unauthorized receipt of interstate or foreign communications by radio. The complaint asserts that Defendants received and used a live satellite broadcast without authorization. However, the analysis reveals that Plaintiff does not allege Defendants or their users were unauthorized to receive the broadcast nor that they received it via radio. Instead, the complaint indicates that Justin.tv received the broadcast through live video streams on its website. Furthermore, it does not specify how YouTube received the communication, suggesting it was also via internet usage rather than through satellite or cable.
Relevant case law indicates that without evidence of direct interception of a cable or satellite transmission, Plaintiff fails to state a valid claim under §§ 553 or 605. While expressing dissatisfaction with the retransmission of its broadcast, Plaintiff has not established any legal basis for liability under the Communications Act.
Defendants further argue that if the Communications Act applies, Plaintiff’s claims are barred by Section 230(c) of the Communications Decency Act (CDA), which protects interactive computer services from being treated as publishers of third-party content. This argument parallels a previous case (Zuffa), where the court did not address the applicability of CDA immunity after finding no claims under the Cable Communications Act. The recommendation is to dismiss the claims against Defendants based on the aforementioned analyses.
Defendants assert that no case has applied Section 230 in the context of the Communications Act, arguing it is inapplicable to website content hosting. Plaintiffs counter that their claims under Sections 553 and 605 relate to intellectual property, thus CDA immunity does not apply, as stated in 47 U.S.C. 230(e)(2), which does not limit intellectual property laws. The undersigned suggests that, following the reasoning in the Zuffa decision, the question of CDA applicability need not be addressed if the Communications Act claims are not sufficiently stated.
On the seventh cause of action regarding inducement of copyright infringement, Defendants argue for dismissal due to the lack of plausible allegations specifying actions taken to induce infringement. They claim the Plaintiff provides no factual basis for this claim, failing to meet the standards established by Rule 8, Iqbal, or Twombly. In contrast, Plaintiff argues that their complaint sufficiently alleges that Defendant Justin.tv provides instructions for streaming video, which could be interpreted as an invitation to infringe copyrights. However, Plaintiff does not contest the dismissal of the inducement claim against YouTube and prefers dismissal without prejudice.
Reference to Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. clarifies that inducement requires evidence of active encouragement of infringement, such as advertising or instructing on infringing uses, and mere knowledge of infringement is insufficient for liability. The undersigned concludes that the single allegation regarding Justin.tv's instructions does not sufficiently support a plausible claim for inducement of copyright infringement against either Defendant.
Plaintiff's allegations against Justin.tv assert that the platform provides instructions for lawful use of its services, specifically for streaming live video. However, the court finds that the Plaintiff fails to demonstrate any intent by Justin.tv to induce copyright infringement. The Plaintiff does not present factual evidence that Justin.tv’s instructions aim to facilitate infringement, nor does the Plaintiff cite any specific content from Justin.tv that could imply such intent. As a result, the claim of inducement is deemed insufficient as a matter of law, leading to the recommendation for dismissal of the Plaintiff's Seventh Cause of Action under Rule 12(b)(6). Additionally, parties are notified about their rights to object to the findings and the implications of failing to file timely objections, which could affect their ability to raise issues on appeal. The Clerk is instructed to distribute the memorandum to the parties involved, and inconsistencies in Plaintiff's allegations regarding intercepted broadcasts are noted.
