Breaking ranks with jurists who've conservatively interpreted the penalty provisions in national cable-piracy law, a U.S. judge in Illinois has ordered a distributor of altered set-top boxes to pay $29 million to Cablevision Systems Corp.
Judge Ruben Castillo of U.S. District Court for the Northern District of Illinois, Eastern Division, also tacked attorneys' fees onto that penalty.
"We were pleasantly surprised," said Cablevision senior vice president of corporate security Bob Astarita. "The judge was very inquisitive and asked a lot of questions."
Federal judges in other antipiracy lawsuits have capped damages at $50,000 per lawsuit, rejecting arguments that lawmakers intended the penalty to be assessed for each set-top. But Castillo accepted the cable industry's theory of escalating loss.
An appeal is likely. Attorneys for the plaintiffs — Frank Redisi Sr. of Elgin, Ill.; his son, Frank Redisi Jr.; James, Frank, Joann and Elisa Recchia; and Nora Villalobos — argued that the multiplied damages were excessive.
Their venture has done business as Teleview Inc.; Teleview Distributors Inc.; Omega Holdings LLC; Omega of Elgin Inc.; J.C.R. Products Inc.; C&G Electronics Inc. and Rec-Tec Electronics Inc.
Investigators identified the illicit business in 1998 and began an investigation, Astarita said. Using information supplied by Cablevision, authorities raided the business and seized assets in late 1998.
At that time, Cablevision obtained an injunction that ordered defendants to distance themselves from any cable-related businesses.
Injunctions are typically key to a civil suit. Without them, cable pirates often move and restructure their business under new a name.
Indeed, Astarita said the Redisis were known pirate operators in Las Vegas a decade ago, but moved after their associates were arrested.
The senior Redisi helped found the National Consumer's Cable Association, a short-lived lobbying group hardware distributors tried to foster in the early 1990s to position themselves as legal businessmen exploiting federal-law provisions that allow consumers to own hardware. The group soon folded, concerned that cable investigators would use the membership list to launch prosecutions.
Cablevision executives emphasized the Redisis' history in their civil suit.
"I think the judge saw we were damaged here," Astarita said.
Cablevision could document that at least 2,756 set-tops had been sold to its customers, and argued the damage was multiplied by the volume of cable service that would have been stolen using those set-tops.
National Cable Television Association CEO Robert Sachs lauded the outcome of the case. In a statement, he noted that cable theft leads to higher costs for honest consumers. Cablevision will try to tap the defendants' assets both in the U.S. and in offshore accounts.