J & J Sports Productions, Inc. v. Greene, No. 8:2010cv00105 - Document 12 (D. Md. 2010)

Court Description: MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 07/06/2010. (km, Chambers)

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J & J Sports Productions, Inc. v. Greene Doc. 12 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : J & J SPORTS PRODUCTIONS, INC. : v. : Civil Action No. 10-0105 : DARRYL B. GREENE : MEMORANDUM OPINION Presently pending and ready for resolution in this case involving alleged violations of the Communications Act of 1934 is a motion filed by Plaintiff J & J Sports Productions, Inc., for entry of default judgment. (Paper 11). The issues have been briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Plaintiff s motion will be granted. I. Background On January 15, 2010, Plaintiff J & J Sports Productions, Inc., commenced this action against Defendant Darryl B. Greene, individually principal and of as Greater officer, director, Washington Area shareholder Wow, LLC, and/or alleging violations of the Communications Act of 1934, as amended, 47 U.S.C. §§ 553 (unauthorized reception of cable service) and 605 (unauthorized publication or use of communications). Pursuant to a licensing agreement, Plaintiff (Paper 1). obtained the Dockets.Justia.com distribution rights to the broadcast of the December 6, 2008, professional boxing match between Oscar De La Hoya and Manny Pacquaio via closed circuit television and encrypted satellite signal ( the Broadcast ). Plaintiff then entered into sublicensing agreements with commercial establishments, such as bars and restaurants, that purchased the rights to exhibit the Broadcast for their patrons. Plaintiff claimed that Defendant, with full knowledge that the Broadcast was not to be received and exhibited unlawfully by entities intercepted, unauthorized received to and/or do so, . de-scrambled . . [the] satellite signal and exhibited the Broadcast to the patrons of the Wow Café and Wingery in Largo, Maryland. (Paper 1, ¶ 19).1 The complaint did not specify a damages amount, but requested statutory penalties in an amount . . . of up to the maximum amount of $110,000 for Defendant s violation of § 605, as well as damages under § 553, and an award of attorney s fees and costs. (Paper 1, at 7-8). The record reflects that complaint on March 23, 2010. Defendant (Paper 5). was served with the When Defendant failed to respond within the requisite time period, Plaintiff moved for entry of default on April 16, 2010. 1 (Paper 7). Shortly after The claims against Greater Washington Area Wow, LLC, d/b/a Wow Café and Wingery, a second defendant named in the complaint, were voluntarily dismissed by Plaintiff. (Papers 8, 9). 2 the clerk s entry of default (paper 10), Plaintiff filed the instant motion for default judgment (paper 11). Defendant has failed to respond to any of Plaintiff s filings. II. Analysis Pursuant to Fed.R.Civ.P. 55(b)(1), [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise affidavit or default. defend, otherwise, and the that clerk failure must is enter shown the by party s Where a default has been previously entered by the clerk and the complaint does not specify a certain amount of damages, the plaintiff s court may application enter default notice and a to pursuant to Fed.R.Civ.P. 55(b)(2). judgment, the upon defaulting the party, A defendant s default does not automatically entitle the plaintiff to entry of a default judgment; rather, that decision is left to the discretion of the court. See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002). The Fourth Circuit has a strong policy that cases be decided on their merits, Dow, 232 F.Supp.2d at 494 (citing United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993)), but default unresponsive. judgment may be appropriate where a party is See S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D.Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). 3 Upon entry of default, the well-pled allegations in a complaint as to liability are taken as true, but the allegations as to damages are not. Lawbaugh, 359 F.Supp.2d at 422. Federal Rule of Civil Procedure 54(c) limits the type of judgment that may be entered based on a party s default: A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings. Thus, where a complaint specifies the amount of damages sought, the plaintiff is limited to entry of a default judgment in that amount. [C]ourts have generally held that a default judgment cannot award additional damages . . . because the defendant could not reasonably have expected that his damages would exceed that amount. In re Genesys Technologies, Inc., 204 F.3d 124, 132 (4th Cir. 2000). Data Where a complaint does not specify an amount, the court is required to make an independent determination of the sum to be awarded. Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (citing S.E.C. v. Management Dynamics, Inc., 515 F.2d 801, 814 (2nd Cir. 1975); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2nd Cir. 1981)). While the court may hold a hearing to prove damages, it is not required to do so; it may rely instead on detailed affidavits or documentary evidence to determine the appropriate sum. Adkins, 180 F.Supp.2d at 17 (citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)); see also Laborers District Council Pension, et al. v. E.G.S., Inc., 4 Civ. No. WDQ-09-3174, at *3 (D.Md. Apr. 16, 2010) ( on default judgment, the Court may only award damages without a hearing if the record supports the damages requested ). Although Plaintiff s complaint sought statutory penalties . . . of up to the maximum amount of $110,000 for Defendant s violation of § 605, as well as the maximum of $60,000 for violation of §553, its motion for default judgment limits the damages request to the amount permissible under § 605. See J & J Sports Prods., Inc. v. Quattrocche, No. , 2010 WL 2302353, at *1 (D.Md. June 7, 2010) ( plaintiffs cannot recover under both [§§ 513 and 605] for the same conduct and courts allow for recovery under only § 605 as it provides for greater recovery ) (citing J & J Sports Prods., Inc. v. 291 Bar & Lounge, LLC, 648 F.Supp.2d 469 (E.D.N.Y. 2009); Kingvision Pay-Per-View, Ltd. v. Las Reynas Restaurant, Inc., Civ. No. 4:07-67, 2007 WL 2700008, at *1 (E.D.N.C. Sept. 11, 2007)). Plaintiff consists of a The $110,000 amount sought by request for $10,000 in statutory damages, the maximum allowable under § 605(e)(3)(C)(i)(II), and $100,000 in enhanced 605(e)(3)(C)(ii).2 2 damages, Plaintiff the maximum additionally amount seeks an under award § of While both provisions under § 605(e)(3)(C) are prescribed by statute, for ease of exposition the court refers to the damages amount under § 605(e)(3)(C)(i)(II) as statutory damages and those under § 605(e)(3)(C)(ii) as enhanced damages. 5 attorney s fees and costs in the amount of $1,507.13, and thus requests a total award of $111,507.13. Each of these requests will be considered, in turn. A. Statutory Damages In Quattrocche, 2010 WL 2302353, at *2, Judge Nickerson set forth the relevant considerations in the damages analysis under § 605(e)(3)(C)(i)(II): Here, Plaintiff has elected an award of statutory damages, which under 47 U.S.C. § 605(e)(3)(C)(i)(II) entitles Plaintiff to an award as the court considers just, between a range of $1000 to $10,000 for each unauthorized reception and publication of a radio communication by the defendants in violation of section 605(a). Courts in this Circuit have used two different approaches to exercising [] discretion in awarding damages under § 605(e)(3)(C)(i)(II). The first approach has two variations. This approach involves multiplying a certain amount by either the number of patrons observed in the defendant s establishment at the time the program was shown or by the maximum occupancy of the establishment. Joe Hand Promotions, Inc. v. Bougie, Inc., Civ. No. 109-00590, 2010 WL 1790973, at * 5 (E.D.Va. April 12, 2010) (patrons present); [Kingvision Pay-Per-View, Ltd. v.] Admiral's Anchor, 172 F.Supp.2d [810,] 812 [S.D.W.Va. 2001] (maximum occupancy); Entertainment by J & J, Inc. v. Gridiron, Inc., 232 F.Supp.2d 679, 681 (S.D.W.Va.2001) (maximum occupancy). The first variation seeks to approximate the defendant s profits or the plaintiff s lost earnings assuming each patron would have ordered the event for residential viewing. [J & J Sports Prods., Inc. v.] 291 Bar & Lounge, 648 F.Supp.2d [469,] 474 [E.D.N.Y. 2009]. The second variation seeks to award the license fee the 6 defendant would have paid if it had legally purchased the event for exhibition. Id. The other approach to calculating damages is to award a flat sum per violation. [J & J Sports Prods., Inc. v.] J.R.'Z Neighborhood Sports Grille, 2010 WL 1838432, at *1 [D.S.C. Apr. 5, 2010] ($5000); [Joe Hand Promotions, Inc. v.] Angry Ales, 2007 WL 3226451, at *5 [W.D.N.C. Oct. 29, 2007] ($1000); Kingvision Pay-Per-View Ltd. v. Gadson, Civ. No. 1:04-678, 2007 WL 2746780, at * 2 (M.D.N.C. Sept. 18, 2007) ($10,000); Las Reynas Restaurant, 2007 WL 2700008, at * 3 ($2000). In support statutory attaches of damages the its argument should affidavit (Paper 11, Attach. 1). be of that awarded its the in maximum this President, amount case, Joseph of Plaintiff Gagliardi. Mr. Gagliardi avers that in order to safeguard its rights under the licensing agreement, Plaintiff hired independent locations for the auditors purpose who of were identifying unlawfully exhibited the Broadcast. affidavit is the affidavit of deployed to various establishments that Attached to Mr. Gagliardi s Ta mi Clark, the auditor who observed the Broadcast on six television sets in the bar area of the Wow Café and Wingery on the evening of the event. 11, Attach. 1, Ex. C). (Paper She was not charged an entrance fee, remained in the restaurant for approximately thirty minutes, and counted approximately sixty-five patrons inside. Gagliardi s affidavit further states that (Id.). Defendant was Mr. not authorized to exhibit the Broadcast, that it could not have been 7 mistakenly or innocently intercepted, and that Plaintiff has lost millions of dollars in recent years as a result of similar acts of signal piracy (paper 11, attach. 1, at ¶ 11). Plaintiff points to two cases decided by the United States District Court for the Southern District of West Virginia in which, according to 605(e)(3)(C)(i)(II) capacity [of Plaintiff, have the been damages determined establishment pursuant based exhibiting on the to § estimated broadcast] multiplied by a set amount and that total multiplied by a factor of five, citing Admiral s Anchor, Inc., 172 F.Supp.2d 810, and Gridiron, Inc., 232 F.Supp.2d 679. methodology Anchor, employed Inc., 232 in those F.Supp.2d Plaintiff misinterprets the cases, at 812, however. the In Admiral s plaintiff submitted evidence that if the defendant had paid to exhibit the boxing match at issue, the licensing fee would have been determined by multiplying the maximum occupancy of the establishment, which was estimated to be between 100 and 115 people, by $17.50. The court and accepted multiplied the that maximum number by damages award of $1,750. occupancy $17.50 Id. to estimate arrive at of an 100 actual Similarly, in Gridiron, Inc., 232 F.Supp.2d at 681, the court multiplied the estimated maximum occupancy of the establishment in question, $17.50 to arrive at a damages award of $2,800. 160 people, by In both cases, the courts then multiplied the statutory damages awards under § 8 605(e)(3)(C)(i)(II) by five to determine the enhanced damages awards under § 605(e)(3)(C)(ii). Plaintiff s suggested calculus appears to conflate statutory and enhanced damages: In the current case, the capacity of the establishment is unknown, however, an eyewitness establishes that approximately sixty-five (65) patrons witnessed the [Broadcast]. Multiplying this by $50.00 per patron and then multiplying that total by 5[,] one arrives at $16,250.00. (Paper 11, Attach. 3, at 8). As noted, Admiral s Anchor, Inc., 232 F.Supp.2d at 812, and Gridiron, Inc., 232 F.Supp.2d at 681, multiplied the statutory damages figure by five to determine the enhanced damages award. Plaintiff, however, appears to request that the court multiply by five to arrive at a statutory damages amount of allowable $16,250, of enhanced which $10,000, damages. recovery. would in be addition Thus, reduced to Plaintiff the to the maximum improperly maximum award seeks of double Moreover, while there is support in this circuit for using the number of patrons present as one of the factors in the equation, see Joe Hand Promotions, Inc., 2010 WL 1790973, at *5, Plaintiff has provided no explanation as to why that number should be 2302353, seeks at to assuming multiplied *2, the by court approximate each $50.00. patron . . In explained . would the have 9 Quattrocche, that one line plaintiff s lost ordered the 2010 of WL cases earnings event for residential viewing, citing J & J Sports Productions, Inc. v. 291 Bar & Lounge, LLC, 648 F.Supp.2d 469, 474 (E.D.N.Y. 2009). To the extent that the $50.00 figure suggested by Plaintiff might represent the cost for a residential viewer to watch the event, this plausible.3 part of Plaintiff, Plaintiff s computation however, pointed has is to no at least evidence suggesting that the residential fee was $50.00; thus, there is insufficient proof to calculate damages in this manner. In determining statutory damages in Admiral s Anchor, Inc., and Gridiron, Inc., the courts sought to approximate the amounts the offending establishments would have been required to pay in order to exhibit the boxing matches lawfully. Plaintiff has attached to its memorandum a rate card (paper 11, attach. 3, ex. c), demonstrating that [t]he cost for Defendant to legally purchase the December 6, 2008 [Broadcast] was $2,200.00 based on an occupancy of 0-100 patrons (paper 11, attach. 3, at 11). Thus, Plaintiff appears to accept this figure as the amount that it was out-of-pocket due to Defendant s violation. Although Plaintiff further argues that it should be entitled to the 3 In J & J Sports Productions, Inc. v. Guzman, 553 F.Supp.2d 195, 199 (E.D.N.Y. 2008), a case involving the same plaintiff, the court multiplied the number of patrons present by $54.95 where Mr. Gagliardi s affidavit attested that a private residence would have been able to purchase the event at the residential price of $54.95. Here, Mr. Gagliardi s affidavit is silent as to the residential price. 10 maximum statutory damages as Defendant willfully pirated this event, Defendant s willfulness is a factor only in the enhanced damages analysis. Accordingly, Plaintiff will be awarded statutory damages under § 605(e)(3)(C)(i)(II) in the amount of $2,200. B. Enhanced Damages Pursuant to § 605(e)(3)(C)(ii), where the court finds that a violation was committed willfully and for purposes of direct or indirect commercial advantage or private financial gain, the court in its discretion may increase the award of damages . . . by an amount of not more than $100,000. maximum award of $100,000 in enhanced Plaintiff seeks the damages, citing the significant sums it has spent to combat rampant piracy and the goal of deterrence. In Quattrocche, (Paper 11, Attach. 3, at 10). 2010 WL 2302353, at *2, the explained: In determining whether enhanced damages are warranted, other courts in this Circuit have looked to several factors: 1) evidence of willfulness; 2) repeated violations over an extended period of time; 3) substantial unlawful monetary gains; 4) advertising the broadcast; and 5) charging an admission fee or charging premiums for food and drinks. Bougie, 2010 WL 1790973, at *6; J.R. Z Neighborhood Sports Grille, Inc., 2010 WL 1838432, at *2; Las Reynas Restaurant, 2007 WL 2700008, at *3; Gadson, 2007 WL 2746780, at *3). 11 court The fact Broadcast that willfully Defendant intercepted and direct for advantage cannot be doubted. descramble spontaneously, themselves to cable or and exhibited indirect the commercial After all, [s]ignals do not nor do televisions distribution sets systems. connect Joe Hand Promotions, Inc., 2010 WL 1790973, at *6 (quoting Time Warner Cable v. Googies (S.D.N.Y. 1999)). Luncheonette, Inc., 77 F.Supp.2d 485, 490 Plaintiff has presented no evidence, however, that Defendant is a repeat violator, that he advertised that the Wow Café and Wingery would be exhibiting the Broadcast, or that he enjoyed any increased business as a result of the exhibition. In fact, Ms. Clark s affidavit strongly suggests that an admission fee was not charged. Still, if only statutory damages were awarded, there would be little businesses to from deter Defendant risking or future other similarly violations. damages will be awarded in this case. Thus, situated enhanced Courts have generally awarded anywhere from three to six times the statutory damages award for enhanced damages[.] J.R. Z Neighborhood Sports Grille, Inc., 2010 WL 1838432, at *2 (quoting J & J Sports Productions, Inc. v. Ribiero, 562 F.Supp.2d 498, 502 (S.D.N.Y. 2008)). In Quattrocche, 2010 WL 2302353, at *3, where the defendant charged an admission fee for its unlawful exhibition of a boxing match, Judge Nickerson calculated enhanced damages 12 by multiplying the [minimum] statutory damages by a factor of 5. Here, where the evidence suggests that no admission fee was charged and more than twice the minimum amount of statutory damages will be awarded, the court will multiply the statutory damages amount by a factor of three. Thus, Plaintiff will be awarded enhanced damages under § 605(e)(3)(C)(ii) in an amount of $6,600 and a total damages award of $8,800. C. Attorney s Fees and Costs Pursuant to 47 U.S.C. §605(e)(3)(B)(iii), the aggrieved party is entitled to recover full costs, including reasonable attorney s fees. Plaintiff has submitted the affidavit of Wayne D. Lonstein, Esq., providing a detailed breakdown of the attorney s fees and costs incurred in this matter. Attach. 2). (Paper 11, Mr. Lonstein avers that $1,507.13 is an accurate representation of Plaintiff s fees and costs, and the court finds that amount is reasonable. The hours expended are modest and within the hourly rates are well the acceptable range. Accordingly, Plaintiff will be awarded attorney s fees and costs of $1,507.13. 13 III. Conclusion For the foregoing reasons, Plaintiff s motion for default judgment will Plaintiff s be favor, granted in the and judgment total amount will of be entered, $10,307.13. in A separate order will follow. ___________/s/____________________ DEBORAH K. CHASANOW United States District Judge 14

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