The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Satellite Bahamas and its principals, the Garraway brothers, are seeking US court “protection” to stay DIRECTV’s discovery demands, which are seeking a list of all clients it allegedly provided ‘pirated’ services to.

The Mackey Street-based business, and its owners, are asking the south Florida district court to effectively ‘freeze’ DIRECTV’s document hand over demands on the grounds that this will become irrelevant if their attempts to have the case dismissed are successful.

They argued that as Bahamian citizens and companies, responding to DIRECTV’s demands would force them to incur “considerable expense” that would be entirely unnecessary if the case dismissal was granted.

In their November 8, 2013, filing with the south Florida district court, Satellite Bahamas and its principal argued: “All of the defendants, other than GEL Electronics, are foreign corporations, with their principal place of business in the Bahamas.

“As such, the relevant documents that are responsive to the document requests are primarily located in the Bahamas. Proceeding with discovery will therefore result in considerable expense to the defendants.

“It would be unfair to require the defendants to incur such expense before the court rules on the Motion to Dismiss, particularly due to the fact that the Motion to Dismiss may dispose of the entire case.”

As a result, the Garraways and their US attorneys are urging the court to stay DIRECTV’s demands, and their obligation to provide the sought-after documents, until 30 days after it rules in their motion to dismiss the case.

They and Satellite Bahamas are urging that the case, in which DIRECTV is alleging they earned millions of dollars through the unauthorised downloading of its signal, then reselling it to their Bahamas-based customers, be dismissed because the US courts lack jurisdiction over Bahamian defendants.

Suggesting this might mean the Florida court cannot order them to respond to the discovery request, Satellite Bahamas and its principals alleged: “Should the court grant the Motion to Dismiss, the need for discovery could be eliminated completely or the scope of discovery could be narrowed significantly.

“Defendants are foreign companies with their principal places of business in the Bahamas. Therefore, the potential burden and expense of discovery is higher here than in many other cases.

“Because the burden and expense of discovery outweigh its potential benefits, given that defendants’ pending motion could result in the dismissal of the case, the plaintiff will not be prejudiced by a brief delay in discovery as to the defendants.”

DIRECTV is demanding that Satellite Bahamas “produce all lists of persons to whom you have sold or distributed” its satellite equipment and programming to, a move that might unnerve Bahamians and residents that were once its customers.

The US satellite broadcaster also wants documents detailing Satellite Bahamas’ subscribers’ names and addresses, plus copies of customer contracts.

Import permits, and tariff rates, relating to the importation of DIRECTV’s satellite equipment to the Bahamas are also included among the 28 different document requests submitted to Satellite Bahamas and its advisers.

Tribune Business revealed previously how DIRECTV is alleging that Satellite Bahamas received almost $8.8 million in revenues through its allegedly fraudulent scheme to ‘pirate’ the US provider’s signal.

And it claimed that efforts by the Bahamian satellite TV programming distributor, and the Garraways, to dismiss its lawsuit would merely “delay the day of reckoning”.

Providing arguments as to why Satellite Bahamas’ bid to dismiss its lawsuit should be rejected, DIRECTV described the size of its scheme as “nothing short of staggering”.

Its investigators alleged that “the volume of mail was so great”, in relation to account billings and the like, that one Florida mail facility ended up storing Michael Garraway’s mailings “in mail bins used by the US Postal Service”.

Responding to the Garraways’ efforts to dismiss the lawsuit against them on technical grounds, DIRECTV had alleged: “Defendants’ motion to dismiss can, at best, delay the day of reckoning for their lucrative scheme to acquire DIRECTV satellite television programming by elaborate fraudulent means, so [they] could sell that programming to their customers in the Bahamas where DIRECTV does not allow its services to be sold. “

The satellite programmer alleged that Satellite Bahamas created hundreds of fraudulent subscription accounts to mask the unauthorised use of its signal outside the Bahamas.

“The scope of defendants’ fraudulent scheme is nothing short of staggering,” DIRECTV alleged.

“The Garraway brothers and their companies created at least 621 fraudulent DIRECTV subscription accounts – each listing a false subscriber name and false service addresses in the United States.

“Each account listed a service address in Florida or New York; 581 of the accounts also listed a billing address in Florida. Taking advantage of special rules that allow multiple satellite receivers to be activated on a single account, defendants obtained 5,803 satellite Receivers - including 539 High Definition Receivers and 2,010 Standard Receivers that were available only by lease from DIRECTV – and activated those receivers for programming service on the fraudulent accounts they created,” it added.

“The Garraway Brothers made use of their knowledge as former authorised dealers for DIRECTV to continue their fraudulent scheme to obtain DIRECTV equipment and programming services for illicit use in the Bahamas. In doing so, the Garraway Brothers took elaborate steps to conceal their scheme from DIRECTV.”