Summary
awarding investigator's fee as part of costs without discussion
Summary of this case from Kingvision Pay-Per-View Ltd. v. CazaresOpinion
03 Civ. 8776 (DC) (JCF).
April 26, 2005
REPORT AND RECOMMENDATION
TO THE HONORABLE DENNY CHIN, U.S.D.J.:
This is an action brought by Garden City Boxing Club, Inc. ("Garden City") pursuant to the Cable Communications Policy Act of 1984 (the "Cable Act"), 47 U.S.C. §§ 553 and 605, seeking relief for the unauthorized interception and commercial exhibition of closed-circuit television programming. The defendant, Los Potrillos Restaurant Corp., failed to answer or move with respect to the complaint. After a default judgement was entered, the case was referred to me for an inquest on damages. A hearing was held on February 24, 2005, and although notice was sent to the defaulting defendant, no one appeared on its behalf. Accordingly, the following findings are based on the submissions of the plaintiff. Background
The plaintiff previously dismissed without prejudice its claims against the individual defendant, Mauro Guzman.
On May 3, 2003, Oscar De La Hoya and Yory Boy Campas were contestants in a prizefight. Garden City owned the exclusive right to exhibit the closed-circuit telecast of the fight in commercial establishments in New York. (Complaint ("Compl."), ¶ 12; Affidavit of Joseph Gagliardi dated March 3, 2004 ("Gagliardi Aff."), attached to Plaintiff's Proposed Findings of Fact and Conclusions of Law Regarding Damages ("Proposed Findings"), ¶ 3). It sublicensed these rights to a variety of closed-circuit locations such as theaters, bars, lounges, and restaurants. (Gagliardi Aff., ¶ 3).
In order to ensure limited access to the programming, transmission of the event was scrambled or coded. (Compl., ¶ 12). The telecast was transmitted via satellite and then distributed to the various commercial entities that had paid Garden City the appropriate fee. (Gagliardi Aff., ¶ 3).
In this case, however, the defendant received and exhibited the fight without paying the fee. (Compl., ¶¶ 16, 23, 29). On the night of the event, Garden City sent out investigators to do random checks on establishments suspected of showing the fight illegally. One of these investigators, Richard Rodriguez, entered Los Potrillos in Manhattan at approximately 9:12 p.m. and observed that the telecast was being displayed. (Affidavit of Richard Rodriguez dated May 9, 2003 ("Rodriguez Aff."), attached to Proposed Findings). A preliminary bout was being shown on the television, and there were approximately twenty people in the restaurant. (Rodriguez Aff.). Upon learning of the unauthorized use of the telecast, Garden City filed the instant action.
Discussion
A. Statutory Framework
The plaintiff alleges that the defendants violated sections 553 and 605 of the Cable Act. (Compl., ¶¶ 1, 18, 25, 32). Section 553(a) provides, in pertinent part: "[n]o person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or as may otherwise be specifically authorized by law." 47 U.S.C. § 553(a)(1). Subsection (c)(1) creates a civil cause of action for "[a]ny person aggrieved by any violation of subsection (a)(1)." Civil remedies include injunctive relief, damages, costs, and attorneys' fees. 47 U.S.C. § 553(c)(2). As to damages, the party aggrieved may prove "actual damages" as specified in subsection (c)(3)(A)(i), or may elect to receive, under subsection (c)(3)(A)(ii), "statutory damages for all violations involved in the action, in a sum of not less than $250 or more than $10,000 as the court considers just." Whichever method of computation of damages is chosen, the amount awarded may be increased up to $50,000.00 if the plaintiff proves willfulness. 47 U.S.C. § 553(c)(3)(B). Alternatively, if the defendant proves the interception to be committed inadvertently, the court may award damages of not less than $100.00. 47 U.S.C. § 553(c)(3)(C).
Section 605(a) of the Cable Act provides, in part: "[n]o person not being authorized by the sender shall intercept any radio communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of [such intercepted communication] to any person[.]" 47 U.S.C. § 605(a). Subsection (e)(3) creates a right of action for any person aggrieved, and remedies may include injunctive relief, statutory damages, and costs and attorney fees. 47 U.S.C. § 605(e)(3)(B). The party aggrieved may prove actual damages or may seek statutory damages between $1,000 and $10,000. 47 U.S.C. § 605(e)(3)(C)(i). If the violation is willful, statutory damages may be enhanced by as much as $100,000. 47 U.S.C. § 605(e)(3)(C)(ii). If the defendant proves the interception to have been committed inadvertently, the court may award damages of not less than $250.00. 47 U.S.C. § 605(e)(3)(C)(iii).
A. Jurisdiction and Venue
As this case arises under federal law, this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331. In addition, the Cable Act itself provides for jurisdiction. 47 U.S.C. §§ 553(c)(1), 605(e)(3)(A). There is personal jurisdiction over the defendant in this forum both because it was doing business in New York and because the plaintiff's claims arise from the defendant's transaction of business here. N.Y.C.P.L.R. §§ 301 and 302. The Southern District of New York is the proper venue because the unlawful interception took place in Manhattan.
B. Liability
All of a plaintiff's factual allegations, except those relating to damages, must be accepted as true where, as here, the defendants default. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997);Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Time Warner Cable of New York City v. Barnes, 13 F. Supp. 2d 543, 547 (S.D.N.Y. 1998). In this case, the allegations of the Complaint establish a violation of the Cable Act by Los Potrillos Restaurant Corp.
Section 553 of the Cable Act deals with interceptions of broadcasts transmitted via co-axial cable, whereas section 605 deals with interceptions of radio transmissions. However, because Garden City has elected damages under § 605 (Proposed Findings at 1, 3), only liability under that provision need be determined. The broadcast at issue here originated as a radio transmission, (Compl., ¶ 12), and, when the transmission involves a radio or satellite signal, section 605 is appropriately applied, whether the defendant intercepts that signal directly or indirectly.Community Television Systems, Inc. v. Caruso, 284 F.3d 430, 435 (2d Cir. 2002); Kingvision Pay-Per-View, Ltd. v. Jasper Grocery, 152 F. Supp. 2d 438, 440-41 (S.D.N.Y. 2001); Kingvision Pay-Per-View, Ltd. v. New Paradise Restaurant, No. 99 Civ. 10020, 2000 WL 378053, at *2 (S.D.N.Y. April 11, 2000). Since the defendant's conduct included the unauthorized interception of radio signals, liability under section 605 of the Cable Act has been established.
C. Damages
The plaintiff is seeking damages pursuant to section 605(e)(3)(C)(i), amounting to $10,000.00, and for an enhancement of $100,000 under section 605(e)(3)(C)(ii) because the violation was willful. (Proposed Findings at 3). While there should be some proportionality between the loss suffered and the amount of statutory damages, the calculation should be generous enough to ensure that the plaintiff is fully compensated. In some cases, courts have tried to estimate the profits obtained by the defendants or the amount of the licensing fee that the plaintiff was deprived of. See Time Warner Cable of New York City v. Googies Luncheonette, Inc., 77 F. Supp. 2d 485, 490 (S.D.N.Y. 1999) (awarding damages of $50 per patron); Time Warner Cable of New York City v. Taco Rapido Restaurant, 988 F. Supp. 107, 111 (E.D.N.Y. 1997) (same); Cablevision Systems Corp. v. 45 Midland Enterprises, Inc., 858 F. Supp. 42, 45 (S.D.N.Y. 1994) (same). Other courts have awarded a flat sum for each violation. See, e.g., Kingvision Pay-Per-View Limited Corp. v. New Paradise Restaurant, No. 99 Civ. 10020, 2000 WL 378053, at *2 (S.D.N.Y. April 11, 2000) (awarding total of $20,000); Kingvision Pay-Per-View Limited Corp. v. Las Cazuelas Mexican Restaurant, No. 99 Civ. 10041, 2000 WL 264004, at *3 (S.D.N.Y. March 9, 2000) (awarding $12,500).
Here, the plaintiff has provided little guidance on which to base a damage calculation. It submitted no data from which the profits of Los Potrillos might be inferred, such as whether the establishment imposed a cover charge on the night of the telecast. Nor did Garden City even identify the licensing fee that it charged its legitimate commercial customers. Nevertheless, the availability of unauthorized access to programming reduces demand and depresses the prices that the plaintiff can charge. See Cablevision Systems New York City Corp. v. Faschitti, No. 94 Civ. 6830, 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7, 1996).
In this case, a basic award of $5,000 is warranted. This figure well exceeds the probable licensing fee, and it is far more than the minimal amount of added revenues that the defendant likely received by exhibiting the fight. On the other hand, it represents a recognition that maximum statutory damages should be reserved for cases where there is evidence of more substantial injury to the plaintiff or profit by the defendant.
The plaintiff is also entitled to a further enhancement of the damage award because the violation was willful and carried out with the purpose of reaping commercial profits. In order for the defendant to access the transmission, it would have been necessary to use an unauthorized decoder, to make misrepresentations identifying Los Potrillos Restaurant Corp. as a residential customer, or to illegally divert cable service or satellite signals into the restaurant. The illegality of any of these actions would have been apparent to the perpetrator. Moreover, the exhibition of the fight undoubtedly generated commercial profits for the defendant. Under these circumstances, enhanced damages of $5,000 are appropriate. See Home Box Office v. Champs of New Haven, Inc., 837 F. Supp. 480, 484 (D. Conn. 1993).
E. Attorneys' Fees and Costs
An award of costs, including attorneys' fees, is mandatory under § 605. 47 U.S.C. § 605(e)(3)(B)(iii); see also International Cablevision, Inc. v. Sykes, 997 F.2d 998, 1009 (2d Cir. 1993). Garden City has not sought attorneys' fees. It has, however, presented evidence that it incurred $302.50 in costs, consisting of the filing fee, investigative expenses, and the cost of serving process. (Affidavit of Julie Cohen Lonstein dated Sept. 23, 2004, ¶ 22). It is entitled to an award of costs in that amount.
Conclusion
For the reasons set forth above, I recommend that judgement be entered in favor of the plaintiff, Garden City Boxing Club, Inc., and against the defendant, Los Potrillos Restaurant Corp., for $10,000.00 in statutory damages and $302.50 in costs, for a total of $10,302.50. Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(e) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from this date to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Denny Chin, Room 1020, and to the chambers of the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will preclude appellate review.