Opinion
Civil Action 4:21-cv-1856-SAL-TER
07-13-2022
JOE HAND PROMOTIONS, INC, Plaintiff, v. KEVIN SHAW d/b/a SUGAR SHACK, Defendant.
REPORT AND RECOMMENDATION
THOMAS E. ROGERS, III UNITED STATES MAGISTRATE JUDGE
I. INTRODUCTION
Plaintiff brings this action pursuant to 47 U.S.C. § 553 for the unauthorized reception of cable service and 47 U.S.C. § 605 for the unauthorized publication or use of communications. Presently before the Court is Plaintiff's Motion for Default Judgment (ECF No. 10). All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(e),DSC. Because Plaintiff's Motion is dispositive, this Report and Recommendation is entered for review by the district judge.
II. PROCEDURAL HISTORY
Plaintiff filed this action on June 18, 2021. Compl. (ECF No. 1). On Ocotber 11, 2021, Plaintiff filed an Affidavit of Service (ECF No. 7) indicating Defendant was personally served on August 1, 2021. Defendant failed to timely file an Answer or otherwise respond to Plaintiff's Complaint. Thus, upon Plaintiff's request, the Clerk of Court made an Entry of Default (ECF No. 9) on October 12, 2021. The present Motion for Default Judgment followed.
III. FACTS
A review of Plaintiff's Complaint, Request for Entry of Default, Motion for Default Judgment, and all supporting Affidavits and other information provided reveals the following facts, which are accepted as true in light of Defendant's default. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.1 (4th Cir. 2009) (accepting plaintiff's allegations against defaulting defendant as true, noting a defaulting defendant “admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established”) (quoting Ryan v. Homecomings Fin. Network, 253 F.3D 778, 780 (4th Cir. 2001)).
Plaintiff is a closed circuit distributor of sports and entertainment programming. Plaintiff purchased and retained the commercial exhibition rights to the Manny Pacquiao vs. Adrien Broner broadcast, including all undercard bouts and commentary, broadcast on January 19, 2019 (the Event). Hand Aff. ¶ 3 (ECF No. 10-2). Plaintiff thereafter marketed the sub-licensing (commercial exhibition) rights for the Event to its commercial customers (i.e., bars, restaurants, lounges, clubs, etc .). Hand Aff. ¶ 3. The sublicense fee for the Event was based on the capacity of the establishment and varies for each event. Hand Aff. ¶ 7; Rate Card (ECF No. 10-3). At no time did Defendant lawfully license the Event from Plaintiff to broadcast to its customers. Hand Aff. ¶ 8. Defendant advertised on the Sugar Shack Facebook page that it would be broadcasting the Event. Hand Aff ¶ 15; Facebook Screenshot (ECF No. 10-6).
On January 19, 2019, auditor Gordan Mooneyhan entered a commercial establishment known as Sugar Shack, located at 4321 Highway 9, Gresham, South Carolina at approximately 11:37 pm. Mooneyhan Aff. (ECF No. 10-4). Mooneyhan paid the $5.00 cover charge to enter the establishment and purchased a Coke. Mooneyhan Aff. Mooneyhan observed the Event being broadcast on two televisions within the establishment to sixteen patrons. Mooneyhan Aff. He estimated the approximate capacity of the facility to be 35-40 people. Mooneyhan Aff. Based upon this estimation and the Rate Card, the charge for the license fee for this establishment was $1,500.
IV. DISCUSSION
Plaintiff asserts that Defendant's actions have violated both 47 U.S.C. § 553 and 47 U.S.C. § 605. These two statutory schemes provide relief for the alternate means of reception-cable and satellite, respectively-of the Program. In its Motion for Default Judgment, Plaintiff submits that it has established liability pursuant to 47 U.S.C. § 605 and 47 U.S.C. § 553, and because the two statutory schemes provide relief for the alternate means by which the Program might have been received (satellite or cable), Plaintiff elects to proceed under 47 U.S.C. § 605.
Section 605 provides, in pertinent part, that
no person receiving, assisting in receiving, transmitting, or assisting in transmitting, any interstate or foreign communication by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or meaning thereof [ ] to [ ] any person other than the addressee, his agent or attorney[.]47 U.S.C. § 605(a). By way of Mooneyhan's affidavit, in which he avers that he viewed the Event on two televisions in the Sugar Shack, Plaintiff has presented evidence sufficient to establish that Defendant “divulged” the Programs to its patrons.
The available penalties and remedies for violation of 47 U.S.C. § 605(a) include a private civil action, as follows:
(B) The court--
(i) may grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain violations of subsection (a) of this section;
(ii) may award damages as described in subparagraph (C); and
(iii) shall direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails.47 U.S.C. § 605(e)(3)(B). Plaintiff seeks damages, attorneys' fees and costs.
The statute sets out the following available damages:
(C)(i) Damages awarded by any court under this section shall be computed, at the election of the aggrieved party, in accordance with either of the following subclauses:
(I) the party aggrieved may recover the actual damages suffered by him as a result of the violation and any profits of the violator that are attributable to the violation which are not taken into account in computing the actual damages; in determining the violator's profits, the party aggrieved shall be required to prove only the violator's gross revenue, and the violator shall be required to prove his deductible expenses and the elements of profit attributable to factors other than the violation; or
(II) the party aggrieved may recover an award of statutory damages for each violation of subsection (a) of this section involved in the action in a sum of not less than $1,000 or more than $10,000, as the court considers just, and for each violation of paragraph (4) of this subsection involved in the action an aggrieved party may recover statutory damages in a sum not less than $10,000, or more than $100,000, as the court considers just.
(ii) In any case in which the court finds that the 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, whether actual or statutory, by an amount of not more than $100,000 for each violation of subsection (a) of this section....47 U.S.C. § 605(e)(3)(C).
An individual defendant may be held personally liable for a violation of § 605 if he had the right and ability to supervise the infringing activity and to receive a direct financial benefit from the infringing activities. Joe Hand Promotions, Inc. v. Double Down Entertainment, LLC, No. 0:11-cv-2438-MBS, 2014 WL 994382, *6 (D.S.C. Mar. 13, 2014); Joe Hand Promotions, Inc. v. Maryland Food & Entertainment, LLC, 2012 WL 5879127, at *2 (D.Md. Nov. 19, 2012). See also, e.g., J & J Sports Productions, Inc. v. L & J Group, LLC, 2010 WL 816719, at *2 (D.Md. Mar. 4, 2010) (stating that a Cable Act plaintiff must show that the defendant “ ‘had a right and ability to supervise the violations, and that she had a strong financial interest in such activities' ”) (citation omitted). Defendant Keven Shaw is individually liable as he was the sole owner and operator of the establishment on the night of the Event and thus had the right and ability to supervise the infringing activity and a direct financial benefit from the infringing activities. Further by virtue of default, Defendant has admitted he had both the right and ability to supervise the infringing activities and a direct financial benefit from the infringing activities at the establishment on the night of the Event. See Compl. ¶ 2.
Plaintiff seeks to recover statutory damages available under 47 U.S.C. § 605(e)(3)(C)(i)(II), rather than actual damages available under 47 U.S.C. § 605(e)(3)(C)(i)(I). Plaintiff seeks $5,000 in statutory damages. Courts have used various methods of determining an appropriate amount of statutory damages. Some courts fashion an award by considering the number of patrons who viewed the programming, often multiplying that number by the cost if each had paid the residential fee for watching such programming. Some courts base the statutory damages amount on an iteration of the licensing fee the violating establishment should have paid the plaintiff. Other courts award a flat amount for a violation. See J & J Sports Prods., Inc. v. JR'z Neighborhood Sports Grille, Inc., 2:09-3141-DCN, 2010 WL 1838432 (D.S.C. April 5, 2010) (noting various methods of calculating statutory damages); Joe Hand Promotions, Inc. v. Precint Bar-Daxlam, Ltd., 3:10-199-CMC, 2010 WL 3420189 (D.S.C. Aug.23, 2010) (noting consideration of licensing fee “and the multiple and net amount necessary to ensure a deterrent effect”). In line with the awards recommended and/or awarded by this court for similar violations, the undersigned recommends a statutory damages award of $1,590, which is the amount of the license fee plus the approximate amount of gross profit for sixteen people with a $5.00 cover charge. See, e.g., J&J Sports Prods., Inc. v. Ultimate Jet-A-Way Sportsbar & Lounge, Inc., No. 4:17-CV-1038-RBH, 2018 WL 1709920, at *4 (D.S.C. Apr. 9, 2018); J & J Sports Prods., Inc. v. El-Corona, No. 3:16-1118-MBS, 2016 WL 3912744, at *2 (D.S.C. July 19, 2016). This amount, when combined with the enhanced damages and attorneys' fees discussed below, is a sufficient deterrent of future conduct.
Plaintiff also seeks enhanced damages of $20,000 pursuant to 47 U.S.C. § 605(e)(3)(C)(ii). Section 605 allows for enhanced damages in addition to statutory damages when the violation is committed wilfully and for purposes of direct or indirect commercial advantage or private financial gain. 47 U.S.C. § 605(e)(3)(C)(ii). Plaintiff's president, Joe Hand, avers, and it is undisputed, that the Program could not have been “mistakenly, innocently or accidentally intercepted.” Hand Aff. ¶ 9. In addition, Defendant advertised that it would be broadcasting the Event and charged a cover to enter the establishment on the night of the event. See generally Kingvision Pay-Per-View, Ltd. v. Guiterrez, 544 F.Supp.2d 1179, 1185 (D.Colo.2008) (listing factors that courts consider in awarding enhanced damages); see also J&J Sports Prods., Inc. v. Ultimate Jet-A-Way Sportsbar & Lounge, Inc., No. 4:17-CV-1038-RBH, 2018 WL 1709920, at *4 (D.S.C. Apr. 9, 2018) (awarding $1,000 in enhanced damages). Accordingly, it is recommended that Plaintiff be awarded enhanced damages in the amount of $2,500.
Finally, Plaintiff seeks attorney's fees in the amount of $1,500 and costs in the amount of $542 pursuant to § 605(e)(3)(B)(iii), which states that the court “shall” award attorney's fees and costs. Plaintiff submits the Affidavit of its counsel, Eric C. Hale, in support of its request for fees and costs.
In determining what constitutes a reasonable number of hours and the appropriate hourly rates (i.e., in calculating the lodestar figure), the court must consider the following factors: (1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases. Barber v. Kimbrell's, Inc., 577 F.2d 216, 226 (4th Cir.1978); Jackson v. Estelle's Place, LLC, No. 09-1700, 2010 WL 3190697, *4 (4th Cir. Aug.12, 2010). A number of the factors may not be applicable in a particular case and, thus, need not be strictly applied. See E.E.O.C. v. Service News Co., 898 F.2d 958, 965 (4th Cir.1990)
Mr. Hale, counsel for Plaintiff, asserts that a reasonable hourly amount for anti-piracy litigation given his firm's experience and other courts' regular approval of such sum is $250 per hour and he has spent approximately 6 hours in representing Plaintiff in this matter for total attorney's fees of $1,500. Hale Aff. ¶ 8 (ECF No. 10-5). The undersigned finds Jordan's rate and the time spent on this file to be reasonable. See, e.g., Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th Cir.1994) (quoting Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984)) (noting that, to determine whether a rate is reasonable, the court is to consider “prevailing market rates in the relevant community”); Joe Hand Promotions, Inc. v. Precint Bar-DAXLAM, Ltd., No. 3:10-CV-00199-CMC, 2010 WL 3420189, at *4 (D.S.C. Aug. 23, 2010) (noting that, in the absence of any challenge to the hourly rates, “[t]he court's own knowledge of rates charged in litigation in this court is, however, sufficient to conclude that the rates sought are within the normal range for similar work in this geographic area”). Mr. Hale also avers that Plaintiff has incurred litigation costs of $542, including the $402 filing fee and a $140 service of process fee. Hale Aff. ¶ 9. In light of the foregoing discussion, it is recommended that Plaintiff be awarded attorneys' fees and costs in the amount of $2,042.
In sum, on Plaintiff's claim under 47 U.S.C. § 605, it is recommended that Plaintiff be awarded $1,590 in statutory damages, $2,500 in enhanced damages, and $2,042 in attorneys' fees and costs for a total award of $6,132.
VI. CONCLUSION
In light of the above discussion, it is recommended that Plaintiff's Motion for Default Judgment (ECF No. 10) be granted and that Plaintiff be awarded $1,590 in statutory damages, $2,500 in enhanced damages, and $2,042. in attorneys' fees and costs for a total award of $6,132.