The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Satellite Bahamas and its principals, the Garraways, are urging the Florida courts to dismiss a lawsuit alleging that they ‘pirated’ DIRECTV’s signals on legal technicalities, Tribune Business can reveal.

Peter and Michael Garraway, and their various Bahamian and US business interests, in a September 27 motion to dismiss DIRECTV’s lawsuit, argued that the south Florida district court - and US federal laws - had no standing in the Bahamas.

“DIRECTV’s complaint in this proceeding, in very simple terms, requests that this court extend its jurisdictional reach to foreign entities and individuals, whose alleged improper conduct (which is identified only in general terms in the complaint) relates to the purported violation of various federal laws in the foreign jurisdiction of the Bahamas,” Satellite Bahamas and the Garraways argued.

They alleged that, apart from failing to provide specifics that met US federal law requirements, DIRECTV’s action also “improperly seeks to invoke federal statutes that do not apply to extraterritorial acts”.

And the Garraways argued that they and their businesses, two of which - Satellite Bahamas and Garraway Enterprises - are domiciled in the Bahamas, did not have enough contact with the US and Florida to give the court jurisdiction over them.

In its original lawsuit, previously revealed by Tribune Business, DIRECTV had alleged there was “overwhelming evidence” that Satellite Bahamas and the Garraways had defrauded it by pirating its programming and equipment to service over 5,800 local accounts.

The largest US satellite broadcaster, in documents filed in the south Florida district in July, alleged that they had used an elaborate scheme to “illegally obtain” its TV signal.

The complaint alleged that the Garraways and their business, which is based at Top-of-the-Hill on Mackey Street, employed false customer and billing addresses to conceal the fact they were offering Bahamas-based clients DIRECTV’s programming.

The US satellite TV distributor, which supplies programming to more than 20 million US residential and business customers, alleged that Satellite Bahamas’ use of its signal - which is supposed to be confined to the US only - was “unauthorised”.

However, in their riposte, the Garraways argued that the US Electronic Communications Privacy Act did not apply to them because the alleged interception of DIRECTV’s signal took place in the Bahamas - outside the US.

And, for similar reasons, the Bahamian defendants argued that US trademark and copyright laws did not apply to them.

Prisca Rolle, Satellite Bahamas’ manager since 1998, testified in an affidavit that the company’s website was “not directed to any market outside of the Bahamas”, and that the company’s sales and business activities were confined to this nation.

She alleged that the Satellite Bahamas’ website, which became active in 2004, was hosted in the Bahamas by DC Technology/DSL Bahamas (there is nothing to suggest these businesses did anything wrong), but was “voluntarily shut down” in April 2010 after a request from DIRECTV.

“Neither the Bahamas website nor any of Satellite Bahamas’ business activities are directed to the United States, as, among other things, the Bahamas website is inactive and all of the company’s business operations and sales are exclusively within the Bahama,” the Garraways alleged in their motion to dismiss.

“Defendants respectfully submit that Satellite Bahamas and Garraway Enterprises are not subject to personal jurisdiction in this forum

“The complaint in this case does not allege that either Michael A. Garraway or Peter A. Garraway - both of whom are residents and citizens of the Bahamas - have systematic and pervasive contacts with the state of Florida sufficient to make either defendant subject to general jurisdiction within the state.

“Rather, the allegations in the complaint - even if accepted as true, as they must be at this stage - merely suggest that Michael A. Garraway and Peter A. Garraway had limited contacts within the state of Florida relating to the purported improper procurement of certain subscription accounts with DIRECTV.”

DIRECTV had previously alleged that the Garraways and their companies knew from 2001 that it did not authorise the sale of its programming outside the US, after they signed an agreement to act as its authorised agent.

This agreement stipulated that they could only sign-up US-based subscribers, but DIRECTV terminated the deal a year later on the grounds that the Garraways and their Florida company, GEL Electronics, were setting up “fraudulent subscription accounts”.

But DIRECTV alleged that the Garraway’s “evaded the effect of their termination” by continuing to set up accounts via other Florida-based dealers, through which they ultimately serviced their Bahamian clients

The scheme, DIRECTV alleged, employed false US-based subscriber and billing addresses to conceal the identities of Satellite Bahamas’ Bahamian customers. The accounts were paid by 52 credit cards, most of which belonged to the Garraways.

It claimed that subscriber addressed were falsified, while invoices and billings were sent to private mail forwarding addresses in Florida.

The US satellite broadcaster also claimed that the Garraways had been assisted in obtaining DIRECTV’s satellite receiving equipment, and activating it, by Florida companies they paid commissions to.