U.S. v. Harrell

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 91-7373
UNITED STATES of AMERICA,
Plaintiff-Appellee,
VERSUS
CHARLES LESLIE HARRELL,
Defendant-Appellant.
Appeal from the United States District Court
For the Southern District of Mississippi
(January 29, 1993)
Before REYNALDO G. GARZA, HIGGINBOTHAM and EMILIO M. GARZA, Circuit
Judges.
REYNALDO G.GARZA, Circuit Judge:
Appellant, Charles Leslie Harrell, appeals his convictions of
modifying and selling descramblers modules for the purpose of
decrypting satellite transmissions in violation of 18 U.S.C. §
2512(1)(b) and 47 U.S.C. § 605(e)(4). Upon review, we find both
statutes were correctly applied and we therefore AFFIRM.
FACTS
The FBI and the Motion Picture Association of America
conducted an investigation involving the illegal modification of
Video-Cipher II (VCII) systems used to descramble satellite
transmissions. Talley, an undercover agent for the MPA, brought 4
modules to Harrell for modification to illegally intercept
satellite programming signals. Harrell was arrested and charged
with modifying and selling descramblers on 2 occasions, November 29
and December 6, 1990. He was indicted on 4 counts, counts 1 and 2
for the manufacture and sale of devices for the interception of
electronic communication in violation of 18 U.S.C. § 2512(1)(b) and
counts 3 and 4 for the manufacture and sale of devices used for the
unauthorized decryption of satellite cable programming in violation
of 47 U.S.C. § 605(e)(4). Appellant was convicted on all counts
and he then filed motions for a judgment of acquittal and for a new
trial, which were denied. Harrell was sentenced to 3 years
probation on each count to run concurrently and ordered to reside
in a halfway house for 4 months. He was also fined $3000 and
charged a special assessment of $200.
ANALYSIS
I. Appellant argues that 18 U.S.C. § 2512(1)(b)1 does not apply to
1
18 U.S.C. § 2512 states in relevant part:
Manufacture, distribution, possession, and
advertising of wire, oral, or electronic communication
intercepting devices prohibited
(1) Except as otherwise specifically provided in this
chapter, any person who intentionally-
. . .
(b) manufactures, assembles, possesses, or sells any
electronic, mechanical, or other device, knowing or
having reason to know that the design of such device
renders it primarily useful for the purpose of the
surreptitious interception of wire, oral, or electronic
communication, and that such device or any component
2
the interception of satellite transmissions and specifically to
modified decryption modules. He states that the statute's phrase
"design of such device renders it primarily useful for the purpose
of the surreptitious interception of wire, oral, or electronic
communications" does not encompass modified decoders. Harrell
contends that the modules were only slightly modified and therefore
were not primarily designed for surreptitious listening. The
modules had been implanted with a chip with the address of a paying
customer in order that non-paying usurpers could unscramble
encrypted satellite transmissions.
It is obvious from the exceptions adopted by the statute that
the descrambling of encrypted messages constitutes piracy. §
2511(2)(g)(iii)(II) adopts the exception stated in 47 U.S.C. §
605(b)(1)2, formerly § 705 of the Communications Act of 1934. That
exception states the interception of unencrypted transmissions is
not unlawful. The statute clearly does not exempt the
surreptitious interception of encrypted and scrambled signals. §
2512 plainly states the proscription of eavesdropping of electronic
communications, such as satellite transmissions.
Since it has been determined that the statute applies to the
thereof has been sent through the mail or transported
in interstate or foreign commerce;. . .
2
47 U.S.C.§ 605(b) provides in pertinent part:
(b) The provisions of subsection (a) of this section
shall not apply to the interception or receipt by any
individual, or the assisting (including the manufacture
or sale) of such interception or receipt, of any
satellite cable programming for private viewing if-
(1) the programming involved is not encrypted;
3
piracy of satellite cable programming, we must now ask if the
modified module has become primarily useful for this surreptitious
interception. We now join several other circuits who have
previously found that the modified VCII modules are primarily
designed for electronic eavesdropping proscribed by § 2512(1)(b).
The primary purpose of the legal unscrambling of subscribed
programs has been permanently changed by the new computer chip
which enables unlimited viewing of unpaid signals. We find it
unreasonable to believe that an individual, having illegally spent
about $300 for the modified chip, will still primarily limit
himself to his originally paid programming. These air
communication pirates consciously transgress the law because they
want to watch specific scrambled programs such as newly released
movies or timely sporting events. The modified modules are
rendered incapable of any service because the observed tampered
seal would subject the users to the risk of being reported to the
proper authorities. The modules, also, cannot have there official
programming changed because their assigned address computer chips
have been replaced. Therefore, the modules cannot be serviced,
changed, sold or even given away in fear that the user's piracy be
found out. The broken seal has delegated the modules to secrecy,
unable to reenter the legal mainstream.
We agree with the Eighth Circuit's recent opinion, United
States v. Dwayne, 978 F.2d 415 (8th Cir. 1992) (en banc), which
overruled their earlier interpretation in United States v. Hux, 940
F.2d 314 (8th Cir. 1991). The panel found that the surreptitious
4
interception of satellite transmissions was prohibited by §
2512(1)(b). The court stated in Dwayne:
Receiving and decrypting or unscrambling a
satellite signal, however, takes significant
effort and is not an act of inadvertence.
Furthermore, the act of encrypting or
scrambling a satellite signal evinces the
originator's intent to prevent unauthorized
persons from viewing the transmission . . . .
Davis [defendant] altered the operation of the
VCII devices by making major modifications.
He opened the devices, thereby breaking a
security seal, removed an epoxy-protected
microprocessor chip by melting away the epoxy,
added a connector and replaced the removed
microprocessor chip with a new one containing
modified software. . . .[A]ny direct
examination of a device in order to discover
its address or to repair it would have led to
the discovery of the illegal modifications.
Consequently, individuals possessing these
modified devices were required to use them in
a most surreptitious manner. Also, "[a]
device will not escape the prohibition merely
because it may have innocent uses. The
crucial test is whether the design of the
device renders it primarily useful for
surreptitious listening.". . . Accordingly,
the devices Davis modified violated section
2512(1)(b).
Id. at 419, 420, (quoting S.Rep. No. 1097, 90th Cong.2d Sess.
(1968), reprinted in 1968 U.S.C.C.A.N. 2112, 2183 (emphasis in
original).
The modification renders the modules illegal without any
chance that they could become legal again. The design has been
forever changed so that the module can conduct surreptitious
interception and it follows that the user of such a modified
decoder will risk breaking the law only because he primarily wants
to use this module to view nonsubscribed programming. Other
circuits also share our interpretation. The 9th Circuit recently
5
stated in United States v. Lande, 968 F.2d 907 (9th Cir. 1992):
We also agree that the "design" of these
modified descramblers renders them "primarily
useful for the purpose of . . . surreptitious
interception." It is difficult to imagine any
purpose for these modified descramblers other
than the unauthorized interception of
satellite television signals.
Id. at 910. The 10th Circuit also found that modified television
modules that surreptitiously intercept encrypted messages is
prohibited by § 2512. United States v. McNutt, 908 F.2d 561, 565
(10th Cir.) cert denied, 111 S. Ct. 955 (1991). We distinguish our
own circuit's holding in United States v. Schweihs, 569 F.2d 965
(5th Cir. 1978) on its facts. We found that § 2512 did not apply
to an amplifier being used during a burglary. The amplifier had
alligator clamps connected to it and was being used to determine
which telephone wire was transmitting a silent alarm. The device
was not modified as the module was in the instant case. The
amplifier was found to be the same as any other when the temporary
clamps were removed. The actual instrument had not been modified
and therefore retained its primary legal use. The module in our
case was internally and permanently changed to accommodate the
surreptitious interception of actual satellite programs, not just
silent alarm signals. The appellant's reliance on Schweihs is
misplaced.
II. The appellant also argues that § 605(e)(4)3 is vague and that
3
47 U.S.C. § 605(e)(4) states:
(4) Any person who manufactures, assembles, modifies,
imports, exports, sells, or distributes any electronic,
6
the statute solely prohibits commercial cable transmissions as
opposed to individual television signals as delineated in the
definitions, § 605(d)(1).4 We find that the statute specifically
proscribes the surreptitious interception of satellite
transmissions and it is not vague or ambiguous at all. We reject
the argument that the word "cable" signifies only commercial usage
and that the statute distinguishes between the direct transmission
of satellite signals directly to individuals or its retransmission
via a cable operator. The statute prohibits the surreptitious
interception of any encrypted satellite signal intended for private
use, either directly to the individual or indirectly through a
cable operator. The statute's purpose is to proscribe the piracy
of programming signals, whether they be for commercial or personal
use. The 9th Circuit stated in On/TV of Chicago v. Julien, 763
F.2d 839 (9th Cir. 1985):
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 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.
4
47 U.S.C. § 605(d)(1) states:
(d) Definitions
For the purposes of this section-
(1) the term "satellite cable programming" means
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;
7
Thus, courts have concluded that although the
content of subscription television programming
may be of interest to the general public, the
scrambled transmissions are intended only for
the benefit of the paid-up subscribers.
Because subscription television programming is
intended for the benefit of paying subscribers
only, it does not fall within the
"broadcasting for the use of the general
public" exception to § 605. Section 605,
therefore, prohibits unauthorized interception
of the scrambled signal.
Id. at 843. The legislative history of the 1988 amendment for §
605 is clear. The district court quoted some of this history in
United States v. Scott, 783 F. Supp. 280 (N.D.Miss. 1992):
Section 5 of the Act amends Section 705 of the
Communications Act pertaining to the piracy of
satellite cable programming. The Committee's
amendment is 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, importation, exportation, sale
or distribution 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. The Committee believes these
changes are essential to preserve the longterm
viability of the TVRO industry. . . . The
piracy problem is rampant both among
commercial users of the VideoCipher II
(hotels, lounges, and other establishments)
and among private home users.
Id. at 282, (quoting from 1988 U.S.Code Cong. & Admin.News 5657-
58). It is unambiguous that the interception of encrypted
satellite transmissions for television programming for commercial
or private use is also prohibited by § 605(e)(4).5 United States
5
There seems to be a significant overlap between § 2512 and
§ 605. Since a possible double jeopardy question is not
before us, we do not address this issue today. Ball v.
United States, 470 U.S. 856, 84 L. Ed. 2d 740, 105 S. Ct.
8
v. Shriver, 980 F.2d 456 (9th Cir. 1992). It challenges reason
that the statute would not include the prohibition of the
surreptitious interception of subscribed individual television
programming.
III. The appellant also argues that the court erred in responding
affirmatively to the jury that § 605(e)(4) applied to home
satellite dishes. For the aforementioned reasons, it is clear that
the statute pertains to commercial as well as individual users,
including those with their own satellite dishes.
CONCLUSION
§ 2512(1)(b) and § 605(e)(4) clearly prohibit the surreptitous
interception of satellite transmissions, for commercial and private
use. The modified module becomes primarily useful for this
purpose. For all of the above reasons, we
AFFIRM.
1168 (1985); Illinois v. Vitale, 447 U.S. 410, 65 L. Ed. 2d
228, 100 S. Ct. 2260 (1980). We note, that at least the
sentences for the 4 convictions, 2 violations under each
statute, are to run concurrently.
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