Summary
awarding $1,000 in statutory damages based on plaintiff's actual losses and $5,000 in enhanced damages under Section 605 when 40 patrons were present and a $10 cover charge was imposed
Summary of this case from J&J Sports Producions, Inc. v. CoriaOpinion
No. C 00-2270 CRB
December 11, 2000
ORDER GRANTING DEFAULT JUDGMENT
Now before the Court is the plaintiffs motion for a default judgment. Having carefully reviewed the papers submitted by the plaintiff, the Court concludes pursuant to Local Rule 7-1(b) that oral argument is unnecessary. The plaintiffs motion for default judgment is hereby GRANTED.
BACKGROUND
The plaintiff Kingvision Pay-Per-View, Ltd. ("Kingvision") is an international distributor of sports and entertainment programming. Kingvision regularly purchases the territorial rights to broadcast boxing matches and then grants limited public exhibition rights to various commercial entities such as hotels, casinos, bars, and restaurants. The defendants Uriel Chavez and Maria De Jesus Chavez operate a business known as La Plaza Night Club ("La Plaza") in Hayward, California (collectively, "the defendants"). Kingvision alleges that the defendants unlawfully intercepted and intentionally broadcast two different boxing matches at La Plaza.
On November 20, 2000, the plaintiff provided a notice of voluntary dismissal as to Maria De Jesus Chavez, apparently due to difficulties with effecting service on Ms. Chavez. This Court entered an order dismissing Ms. Chavez on November 21, 2000. Thus, Uriel Chavez and La Plaza are the only defendants remaining in this action.
The plaintiff filed an initial complaint on June 27, 2000, and filed a first amended complaint on July 14, 2000. A summons was issued on July 17, 2000, and the defendants were served with the first amended complaint by substituted service on August 3, 2000 and through the mail on August 4, 2000. The defendants did not answer the complaint, and default was entered on September 22, 2000. The plaintiff filed a motion for default judgment on October 26, 2000. As of the date of this order, the defendants have not answered the complaint or responded to the motion for default judgment.
The plaintiffs first amended complaint includes fourteen causes of action and alleges violations of the Federal Communications Act of 1934, 47 U.S.C. § 605, the Cable Television Consumer Protection and Competition Act of 1992, 47 U.S.C. § 553, the general penalty copyright provision in 47 U.S.C. § 501, and California Business and Professions Code §§ 17040 and 17200. The plaintiff has also sued for conversion and breach of implied contract. The plaintiff requests $100,000 in damages for the violations of section 605, $100,000 for the violations of section 553, $20,000 for the violations of section 501, $6,000 for the violations of California Business and Professions section 17040, $6,000 for the violations of California Business and Professions section 17200, $4,000 for conversion, $4,000 for breach of implied contract, $2,500 for attorney's fees, and $475 for costs, for a total demand of $242,975.
I. PERSONAL AND SUBJECT MATTER JURISDICTION
When a court is considering whether to enter a default judgment, it has "an affirmative duty to look into its jurisdiction over both the subject matter and the parties." In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) ("To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place."). Here, the defendants are residents of California, so the Court may exercise personal jurisdiction. Moreover, the Court has subject matter jurisdiction because the plaintiff's claim arises under the Federal Communications Act of 1934, 47 U.S.C. § 605, and the Cable Television Consumer Protection and Competition Act of 1992, 47 U.S.C. § 553.
II. DAMAGES
Whether to grant a motion for the entry of a default judgment is within the discretion of the trial court. See Lau Ah Yew v. Dulles, 236 F.2d 415, 416 (9th Cir. 1956). Generally, upon an entry of default, the factual allegations of the plaintiffs complaint will be taken as true, except those relating to the amount of damages. See Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977).
A. Federal Causes of Action
The Federal Communications Act, 47 U.S.C. § 605 et seq., prohibits commercial establishments from intercepting and broadcasting to its patrons satellite cable programming. See That's Entertainment. Inc. v. J.P.T., Inc., 843 F. Supp. 995, 998 (D. Md. 1993). The Act allows an aggrieved party to bring a civil action in federal district court and permits that party to elect an award of either statutory or actual damages. See 47 U.S.C. § 605 (e)(3)(C)(i). The statute allows the court to award between $1,000 and $10,000 for each violation of section 605 as it considers just. See 47 U.S.C. § 605 (e)(3)(C)(i)(II). The statute allows the court to increase its award by not more than $100,000 when the violation has been "committed willfully and for purposes of direct or indirect commercial advantage or private financial gain." 47 U.S.C. § 605 (e)(3)(C)(ii).
The Federal Cable Communications Policy Act, amended by the Cable Television Consumer Protection and Competition Act of 1992, 47 U.S.C. § 553, prohibits the unauthorized reception or interception of communications offered over a cable system. Like section 605, section 553 creates a civil cause of action for an aggrieved party, and permits the plaintiff to choose between actual and statutory damages. See 47 U.S.C. § 553 (c)(3)(A). The Court may award between $250 and $10,000 as it considers just. See 47 U.S.C. § 553 (c)(3)(A)(ii). The statute also gives the Court discretion to increase the damages award by not more than $50,000 when the violation has been "committed willfully and for purposes of direct or indirect commercial advantage or private financial gain." 47 U.S.C. § 553 (c)(3)(B).
In this case, Kingvision's broadcast transmissions are communications protected by sections 553 and 605. The defendants' alleged receipt and broadcast of those transmissions to their customers without authorization constituted a violation of sections 553 and 605, giving rise to Kingvision's current action.
When a court finds that a defendant has violated both sections 553 and 605, it is unclear whether it should impose cumulative damages under the two sections. The Second Circuit addressed this question in International Cablevision v. Sykes 997 F.2d 998 (2d Cir. 1993), Aff'd, 75 F.3d 123 (1996). In Sykes. the court concluded that where liability exists under both sections 553 and 605, the district court should impose damages pursuant to section 605 instead of imposing the lesser damages available under section 553. See Sykes, 997 F.2d at 1009. While other courts have not universally followed the Second Circuit's reasoning, it is the most persuasive due to its extensive review of the legislative history. Other courts in this district have reached the same conclusion. See e.g., Joe Hand Promotions, Inc. v. Pete, 1999 WL 638215 (N.D. Cal.) (Walker, Dist. J.); Don King Prods. v. Maldonado, 1996 WL 682006 (N.D. Cal.) (Henderson., Dist. J.). Therefore, the Court will not assess damages under section 553.
Kingvision urges the Court to assess statutory damages at $100,000 in order to deter the defendants and others like him from intercepting broadcasts in the future. However, "[i]n he absence of unusual or particularly egregious circumstances under which a defendant broadcast the fight," the Court will not award the statutory maximum in damages. Don King Prods. v. Maldonado. 1998 WL 879683 (N.D. Cal.) (citing Joe Hand Promotions v. Burg's Lounge, 955 F. Supp. 42, 44 (E.D. Pa. 1997)). Kingvision has made no showing here that the circumstances were either egregious or unusual.
Rather, this case appears to be similar to several other cases in this district. In Joe Hand Promotions, Inc. v. Pete, 1999 WL 638215 (N.D. Cal.), a similar plaintiff requested default judgment against a bar owner for intercepting and broadcasting a fight. The Honorable U.S. District Judge Vaughn Walker awarded $1,000 in statutory damages with a $5,000 enhancement. Very little in Pete serves to distinguish it from the present case. The plaintiff sued the owner of a bar for illegally broadcasting a fight to eight patrons, none of whom had paid a cover charge to watch the broadcast. After the defendant defaulted, the court found a section 605 violation and exercised its discretion under the statute to award $6,000 in damages. See also Don King Prods., 1998 WL 879683 (awarding $1,250 in statutory damages plus a $5,000 enhancement).
The two violations at issue here are similar but not identical. During the first violation, which occurred on March 16, 1996, the investigator reported that there were approximately forty people present at La Plaza. The defendants had imposed a ten dollar cover charge for its patrons on that day. During the second violation on June 28, 1997, La Plaza did not establish a cover charge, and only thirteen patrons were present. The plaintiff has not established that the defendants advertised either of the fights or used them to attract customers, although one of the affidavits in the record loosely suggests that there was a fight poster at La Plaza.
In accordance with other default judgments involving similar facts, this Court hereby imposes $1,000 in damages for the second violation. For the first violation, however, in which the defendants appear to have enjoyed a greater and more direct financial gain (because of both the cover charge and the greater number of patrons), the Court will assess $1,000 in damages and a $5,000 enhancement. In total, then, for the defendants' two section 605 violations, the Court will assess $2,000 in damages and $5,000 in enhancements, for a total award of $7,000.
As for the plaintiffs request for damages under section 501, the plaintiff has not established that such damages are legally appropriate. Indeed, the plaintiffs memorandum contains no analysis of the copyright claim at all. Because the Court has exercised its discretion to award damages under section 605, the Court will decline to award the plaintiff damages under section 501.
B. California Business and Professions Code Violations
Similarly, the plaintiff has not established why damages are legally appropriate under the California Business and Professions Code, especially where a court has already provided damages under federal law. Accordingly, the Court will not award damages under those state statutes.
C. Conversion
Kingvision also requests default judgment on its state law claim of conversion. Under California law, conversion has three elements: (1) ownership or right to possession of property; (2) wrongful disposition of the property right of another; and (3) damages. See G.S. Rasmussen Assoc. v. Kalitta Flying Serv., 958 F.2d 896, 906 (9th Cir. 1992). Accepting the allegations in the complaint as admitted, Kingvision has established conversion in this case.
Kingvision requests $4,000 in actual damages for the conversion. Damages for conversion must be based on the value of the property at the time of the conversion. See Krueger v. Bank of America, 145 Cal.App.3d 204, 215 (1983). According to the plaintiff, Kingvision normally sells its programming to establishments like the defendant's for "an optional and often variable technical transmission fee" plus $10 to $20 per seat, based on the maximum capacity of the establishment. The defendants' establishment has an approximate capacity of 100 people. Had La Plaza paid for the right to broadcast the fight, the charges would have totaled $1,000 to $2,000 per fight, depending on the technical transmission fee. Thus, for the two programs combined, La Plaza would have paid at least $2,000 and as much as $4,000 or more depending on the fee. In the interests of justice, the Court will award the average of this range, or $3,000.
D. Breach of Implied Contract Damages
As with the California Business and Professions Code, the plaintiff has not demonstrated that breach of implied contract damages are legally appropriate in this instance, especially where there is no evidence of an implied contract and where the Court has already imposed damages under federal law.
E. Fees and Costs
Finally, Kingvision requests costs and attorney's fees. Section 605 provides that the court "shall direct recovery of full costs, including the award of reasonable attorney's fees to an aggrieved party who prevails." 47 U.S.C. 605(e)(3)(B)(iii). In a supplemental declaration filed with the Court on November 2, 2000, counsel for the plaintiff indicated that his fees for his action total $2,518.75. See Riley Decl., Nov. 2, 2000, § 6. In that same declaration, counsel indicated that the plaintiffs costs total $475.00, including $150 for the filing of the suit, $50 for service of process, and $275 for the cost of investigating the signal piracy for the two programs. See id.§§ 3-5.
CONCLUSION
As the defendants have not answered the complaint, and as the recovery sought is readily ascertainable and certain, the motion for default judgment is hereby GRANTED in the total amount of $12,993.75. This amount consists of $7,000 for violations of 47 U.S.C. § 605, $3,000 for conversion, $2,518.75 for attorney's fees, and $475 for costs.
IT IS SO ORDERED.