Class-action suit fires back at DirecTV

[Chris Blount]

Challenge focuses on satellite-TV provider's use of demand letters

By John Accola, Rocky Mountain News
March 12, 2004

DirecTV is using its national anti- piracy campaign to extort millions of dollars from innocent consumers, according to a racketeering lawsuit filed in Denver federal court.

Duplicating complaints brought in California against the leading satellite-TV provider, the class-action suit centers on so-called demand letters to suspected hackers whose names have showed up on credit- card receipts and store records.

It alleges DirecTV and its former parent, Hughes Electronics, have used the letters to intimidate people into paying $3,500 each and more to avoid being sued for piracy or signal theft.

The suit states at least 10,000 of 150,000 people targeted in DirecTV's letter campaign since mid-2002 have paid pre-litigation settlements, and that many did so under duress.

DirecTV spokesman Robert Mercer said Thursday the lawsuit is without merit, and that the company has no intention of discontinuing the demand letters.

The complaint alleges the defendants violated the Racketeer Influenced and Corrupt Organizations Act by engaging in mail and wire fraud.

The lawsuit, filed Wednesday, is spearheaded by California attorney Jeffrey Wilens on behalf of lead plaintiff Jon F. McClelland of Golden and potentially thousands of consumers.

Wilens said DirecTV doesn't have the technology to determine if someone is stealing its satellite signals, yet is indiscriminately accusing people of theft after finding their names in customer records of companies that specialize in piracy equipment.

In piracy lawsuits brought against Coloradans, DirecTV has cited customer lists of several firms in Arizona, California and Florida that have been turned over or had their records seized by law enforcement officials.

Mercer declined to say how much DirecTV, headquartered in El Segundo, Calif., has received in pre- litigation settlements. But he said a "substantial number" of the people who have contacted DirecTV after receiving the demand letters have agreed to payments.

"Once they realize they have broken a federal law and we are serious, more often than not they will settle with us," Mercer said. "No one wants to go to court on these things, including us."

In California, judges have dismissed before trial two similar complaints initiated by Wilens in state and federal courts. Wilens has filed appeals in both cases.

"This is the third case he has filed alleging the same thing, and so far he is batting zero," Mercer said. "The courts have said (we) have a legally valid process for pursuing people who are stealing our signal."

Full Story (http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_2722987,00.html)

[WanMan]

I'm confused. D* went after some people under the anti-piracy campaign. Exactly what and how did D* demonstrate these individuals did that was identified as pirating content?

[SamC]

Anybody with $80 and a crayon can file suit against anybody for anything.

No extortion is going on here. Criminals who purchased equipment to steal TV, thus pushing costs up for honest people like you and me, received letters asking to pay for what they had stolen.

The whole issue is the idiotic idea that these people COULD HAVE THEORETICALLY used used the devices they purchased for some other purpose. Which is THEORETICALLY true. Unfortunatly none of these theives can show any of these complex tasks, nor can they produce a receipt for their TV service, nor explain why they have unsubscribed boxes (many of which have never been subscribed).

Most theives paid up. This ambulance chaser has found at least one who is so bold that he feels "extorted" that he was asked to live by the rules of society.

He will lose.

[Mark Holtz]

DirecTV, along with law enforcement authorities, raided the suppliers who provided the equipment for hacking DBS signal and snagged all of the customer records and invoices.

Slight problem. There are legitimate experimenters and engineers who are developing applications utilizing smart cards who picked up the card readers/writers cheap from these sites who don't even subscribe to DirecTV or Dish Network. Guilt by possession, I suppose. And usually, the costs of settling is cheaper than filing suit or demonstrating the application.

When I went to Kinkos near American River College about two weeks ago, all of the self-service copy machnes were set to use a smart card. You added a balance to the card, then ran off your copies. Also, American Express has the Blue card which has smart card technology.

DirecTV was supposed to be replacing all of the access cards with P4 or later cards and shutting off the Hu datastream. I wonder what happened to that program.

[RichW]

Interesting analogy:

We own a store which sells hobby tools for a certain craft. A lady came in one day when one of my daughters was running the store. She looked around then left. The next day she tried to get a "refund" from my wife for a tool accessory she had "bought" the day before. She did not have a receipt, nor did we have a record of the sale the previous day. We only had one of that item in our inventory and it was missing from the shelf. She obviously stole the item so we didn't give her a refund but took her name and phone number and toold her we would contact her. We then called the police who said unless we had her on camera or witnessed her shoplifting the item, we could not even accuse her of the crime without putting ourselves in jeopardy for a civil suit from her. Thus I cannot figure how DirecTV can do what they are doing without better evidence. It is not illegal to have these devices. Certainly in a civil suit you need not prove your case beyond a reasonable doubt, but tehy would be hard pressed to prove their case simply upon the evidence that a person bought a smart-card programmer.

[nuke]

There are cases where stolen credit card information was used to purchase smart card equipment, and the innocent victim of the CC fraud has been served with papers since their name and info was used to buy the equipment.

The card equipment from the hacker sites was a LOT cheaper than less capable development systems purchased from the manufacturers of smart cards, and smart card was a promising place to be a developer for a while. So some people bought them for legal purposes (which they were advertised as being for in the first place) and got served papers.

This kind of intimidation is wrong, clearly not everyone who's name was associated with a pirate equipment supplier is guilty of signal theft, but the extortion method is meant to extract $3500 based on the expense of defense.