The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Satellite Bahamas and its principals have accused DIRECTV of “improperly lumping” them all together in its Florida legal action, while also failing to identify a single act of wrongdoing committed by the company on US soil.

The Top-of-the-Hill, Mackey Street-based company and its principals, Peter and Michael Garraway, said the largest US-based satellite programme had failed to separate their alleged “conduct or liability” in the lawsuit filed against them.

Responding to DIRECTV’s arguments as to why the case against them should be dismissed, Satellite Bahamas and the Garraways alleged: “DIRECTV’s allegations improperly lump all defendants together.

“DIRECTV’s complaint, which lists six separate causes of action, all of which are attributed to all five named defendants without any effort to distinguish among their factual conduct or liability, is clearly improper......

“This failure of pleading, though improper generally, is most notable with respect to Bahamian defendants, Satellite Bahamas and Garraway Enterprises, as the complaint provides no information regarding the purported actions taken by either of these entities, including with respect to the various activities that DIRECTV claims create a basis for jurisdiction in the United States.”

Tribune Business revealed last week 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”.

However, in their filing with the US south Florida district court last week, the Garraways and Satellite Bahamas said the affidavit evidence by DIRECTV investigators was merely an attempt to “rehabilitate” allegations that several acts critical to the so-called scheme’s success were committed in the US ‘Sunshine State’.

“Even if one improperly considers DIRECTV’s recent affidavits in connection with the Motion to Dismiss, DIRECTV’s allegations fail to identify a single US act committed by either defendant Satellite Bahamas or Garraway Enterprises,” the filing alleged.

“Because the only allegations of US contacts can be found in blanket references to all ‘defendants’, and because the acts of third parties cannot be attributed to these entities under applicable law, the claims against these Bahamian entities must fail for DIRECTV’s failure to establish a prima facie case of personal jurisdiction.”

And the Garraways also argued that DIRECTV’s action involved “purported extraterritorial violations of United States law in the Bahamas” that were not attributed to either of them.

As for the US provider’s allegation that they committed copyright infringements by using DIRECTV’s trademarks and logos on Satellite Bahamas’ website, the Garraways countered by insisting that this was not a sales channel, and nor was it marketed to customers outside the Bahamas.

“Based on all of the foregoing, including the limited factual allegations contained in DIRECTV’s complaint, the lack of any allegation of an impact on US commerce, and the numerous cases cited in the Motion to Dismiss stating that maintenance of a website alone does not support subject matter jurisdiction”, the Garraways alleged that DIRECTV could not mount a copyright lawsuit against them.

But, responding to the Garraways’ efforts to dismiss the lawsuit against them on technical grounds, DIRECTV had earlier 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.”