DirecTV Scandal

The Kernel · Post by **The Kernel** » 2004-04-17 10:45pm

Perhaps some of you have heard about DirecTV suing consumers who purchase smart card programmers on the grounds that they are intending to use them to pirate DirecTV service. Well, a whistleblower of sorts has come forward with some very interesting comments about this aspect of DirecTV's business.

Security Focus wrote:A one-time enforcer in DirecTV's anti-piracy campaign is suing his ex-employer for wrongful discharge, after he allegedly resigned rather than continue to prosecute the company's controversial war against buyers of hacker-friendly smart card equipment.

John Fisher, a former police officer, alleges in a complaint filed in Los Angeles County Court late last month that he joined DirecTV as a senior investigator in July, 2002, expecting to serve a legitimate investigative role tracking signal pirates. He wound up instead "as little better than a 'bag man for the mob,'" the lawsuit claims. He's seeking unspecified damages, and an end to DirecTV's tactics.

At issue is DirecTV's end-user campaign, aimed at shutting down and collecting money from TV watchers who use smart card programmers and other equipment to get free or expanded satellite TV service. Because there's no way to trace people who are passively receiving DirecTV's signal, the company turned to a strategy of physically raiding equipment sellers that cater to pirates, using the authority of the Digital Millennium Copyright Act. The company then sends out threatening letters to everyone on the seized customer lists.

The letters accuse the recipients of violating anti-piracy laws by purchasing equipment like customizable smart card programmers, and demand a cash settlement beginning at $3,500, or face litigation and possible damages of $100,000 or more. Since last year the company has sent out tens of thousands of such letters and filed lawsuits against over 9,000 people who've ignored them or refused to settle. None of those lawsuits have yet gone to trial.

DirecTV began facing criticism over the campaign after it targeted some innocent techies who had perfectly legal uses for the equipment they purchased. The company says the number of non-pirates swept into its dragnet is minuscule, but advocacy groups and lawyers have received enough consumer complaints to prompt the Electronic Frontier Foundation and the Stanford Center for Internet and Society to launch an informational website apprising crackdown targets of their legal rights. EFF says innocent people are settling with DirecTV for no other purpose than to avoid costly litigation.

Fisher's lawsuit provides a rare glimpse at the inner workings of the end user campaign, which, from his description, resembles nothing so much as a high-stakes boiler room operation. Fisher and his colleagues spent their days fielding calls from worried recipients of the threatening letters, confronting the targets with evidence of their "illegal" purchases, and persuading them -- with tough talk and black-and-white assertions about what is, in reality, a largely unsettled area of law -- to surrender the equipment and cough up the settlement money.

Fisher "a Good Cop"
The office culture rewarded workers who made collections in marginal cases -- one investigator allegedly tried to win a settlement from someone who had purchased nothing but a leather case. "It was a very competitive environment and the investigator who generated the most revenue was not only praised but also given a nice dinner or similar gift," wrote Fisher. A tote board on the wall charted the total amount brought in by the office, and when it logged its first million of the year, a congratulatory e-mail went out.

The lawsuit claims the company knew that between five and ten percent of their targets were innocent. After a time, Fisher "fully realized the end user campaign was an elaborate extortion racket," the lawsuit alleges. "The letters were full of lies or misrepresentations and the investigators were required to coerce people into paying money for stealing services when we had no proof whether they had done so or not." Fisher resigned in October.

Though Fisher quit the job, the lawsuit argues that DirecTV effectively fired him by instructing him to behave unethically. "Mr. Fisher was forced to resign because of intolerable working conditions," says his attorney, Jeffrey Wilens. "Normally a lawsuit of that nature is based upon harassment, racial or sexual harassment, but sometime it's based on working conditions that require an employee to break the law or engage in unethical practices."

DirecTV confirmed that Fisher worked for the company on its end user campaign, but would not comment on the circumstances of his departure. The company denies asking Fisher to do anything unethical or illegal. "We certainly can say that Mr. Fisher's allegations are baseless," says company spokesman Robert Mercer.

The Maywood, California police department confirmed that Fisher worked there as a patrol officer and detective until 1998, when a shoulder injury sustained in the line of duty forced his retirement. "I worked with him myself, and I can tell you he was regarded as a good cop, and somebody who could be counted on to help out, and he was a very moral and ethical person," said Sergeant Robert Leach.

Multiple Lawsuits
Jeffrey Wilens, Fisher's lawyer, is a tenacious opponent of DirecTV's ongoing crackdown. In 2002, he sued the company for extortion on behalf of seven clients who claimed to have ordered smart card programmers and other equipment for legitimate purposes, and subsequently received DirecTV's threatening letter. But last year a county judge ruled that DirecTV's mailings were connected with litigation, and were therefore privileged; he dismissed the case and awarded DirecTV nearly $100,000 in attorney's fees.

Undeterred, Wilens filed a federal lawsuit in Los Angeles under the mob-busting Racketeer Influenced and Corrupt Organizations (RICO) organized crime statute, again claiming extortion. A federal judge dismissed that case as well, using similar reasoning as the county judge. Both cases are under appeal.

In March, Wilens filed another, nearly-identical RICO suit in Colorado, where he says case law is more favorable. He followed that up with the Fisher suit, and a separate lawsuit accusing the company of violating the Electronic Communications Privacy Act by coercing the Canadian operator of the Pirates Den online forum into handing over users' private communications. (The forum operator, also a defendant, has claimed the messages were seized and given to DirecTV by a Canadian court). All three cases are now pending.

"He seems to keep trying to shoehorn some of these legal theories into another kind of case," says DirecTV's Mercer. "What did Albert Einstein say about doing the same thing over and over again and expecting different results?"

"I don't hate DirecTV," says Wilens. "You don't hate the sinner, you hate the sin. I regard their conduct to be outrageous. I wouldn't be spending my time in these cases if money were the primary focus."

I don't know about the rest of you, but using the DMCA for this kind of conduct makes me sick. DirecTV should be prosecuted under the RICO act for racketeering which is precicely what this sort of behavior is. They are basically saying "Yes, we might be wrong, but you can't afford to find out so you better pay up". Fucking bastards.

Stark · Post by **Stark** » 2004-04-17 10:51pm

Buying a smartcard coder is illegal now? WTF? I *NEED* my smartcard coder; and even if I didn't, I'd buy one anyway. They can't make hacksaws illegal cos you can steal a car with one

The Kernel · Post by **The Kernel** » 2004-04-17 10:55pm

Stark wrote:Buying a smartcard coder is illegal now? WTF? I *NEED* my smartcard coder; and even if I didn't, I'd buy one anyway. They can't make hacksaws illegal cos you can steal a car with one

They HAVEN'T made smart card readers illegal, but if you want to argue the matter before a court you are going to spend ten of thousands in legal fees and DirecTV won't be required to reimburse the cost, even if you win. They are using the fact that most people can't afford to spend $50,000 on a moral victory as a club to extort a few thousand out of the large group of people who have bought smart card programmers.

This testimony fits extremely well with some of the rest of what I've heard about DirecTV's extortion attitudes. Aparently, one of the people who fought back against DirecTV actually WAS a DirecTV customer and after he informed them of that, they told him that they would sue him anyways and let the courts decide.

Glocksman · Post by **Glocksman** » 2004-04-17 11:05pm

Interesting.

My CPAP machine has a smart card and the medical supply store has a card reader/programmer that is used to both retrieve the data and program the machine's settings.

At work, some of the industrial trucks we use in the storage racks are programmed via a smart card and maintenance has a couple of card readers.

Eventually, DirectTV is going to wind up inadvertently suing a major coroporation for perfectly legitimate card reader ownership.

Then watch the fun begin.

EmperorMing · Post by **EmperorMing** » 2004-04-19 02:12am

What ever happened to proving guilt?

I don't know what to say to this other than don't use direct TV.

Tsyroc · Post by **Tsyroc** » 2004-04-19 05:15am

EmperorMing wrote:What ever happened to proving guilt?

I don't know what to say to this other than don't use direct TV.

Yeah, you'd think that if these people were really doing something wrong they could be charged under criminal law. Instead it's funny that DirectTV instead decides to take them to court in such a way where the majority of the people will panic about the cast and just pay them off.

Crayz9000 · Post by **Crayz9000** » 2004-04-19 05:36am

Well, at least we know where the RIAA got their tactics from. Or is it the other way around...?

The Kernel · Post by **The Kernel** » 2004-04-19 05:45am

Crayz9000 wrote:Well, at least we know where the RIAA got their tactics from. Or is it the other way around...?

DirecTV has been doing this longer. Actually, if anything DirecTV makes the RIAA look like a bunch of saints. At least the RIAA isn't trying to bust innocent people, and they've been trying their hardest to make sure that the people they bust actually are the people who offered the files for download.

The problem with the RIAA is that they refuse to look at the real problem (their business model) rather than the symptom (file sharing). DirecTV's problem is that they are a bunch of greedy, immoral scumbags who seem to delight in the fact that their prey can't do shit to stop them.