DIRECTV, LLC v. Valencia et al

Filing 22

MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 12/6/2013. (Attachments: # 1 Exhibit 1)(JLC)

FILED
2013 Dec-06 PM 05:10
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA

DIRECTV, LLC,
Plaintiff,
v.
TAQUERIA VALENCIA, LLC,
Defendant.

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) Case No.: 2:13-CV-960-VEH
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MEMORANDUM OPINION
The plaintiff (“DirecTV”) has filed a motion for default judgment that is
presently before the court. Doc. 21 (“the Motion”). DirecTV seeks judgment by
default against the defendant (“Taqueria Valencia”) with respect to the first count of
its Complaint. Doc. 21-3 at 14. Specifically, DirecTV asks this court to award it
damages, costs, and attorneys’ fees under various provisions of the Communications
Act of 1934, 47 U.S.C. §§ 151-621. For the following reasons, the court will GRANT
DirecTV’s Motion.
Statement of the Case
DirecTV commenced this action by filing its Complaint and Summons on or
about May 21, 2013. Doc. 1. The Complaint alleged, among other things, that Daniel

Valencia, as officer, director, shareholder, member and/or manager of Taqueria
Valencia, and Taqueria Valencia, both willfully violated 47 U.S.C. § 605(a) by
impermissibly showing DirecTV satellite programming in their commercial
establishment for direct commercial gain. DirecTV duly served Taqueria Valenica on
or about May 23, 2013, via certified mail. Doc. 7. DirecTV was unable, however, to
successfully serve process on Mr. Valencia. Doc. 16. On June 19, 2013, DirecTV
asked the Clerk of this court to enter default against Taqueria Valencia under Federal
Rule of Civil Procedure 55. Doc. 12. The Clerk entered default on June 24, 2013.
Doc. 13. On September 12, 2013, DirecTV filed a Status Report and a “notice” asking
this court to dismiss Mr. Valencia from the action without prejudice under Federal
Rule of Civil Procedure 41. Docs. 18, 19. The court granted this motion on September
17, 2013. Doc. 20. On September 25, 2013, DirecTV filed the present Motion. Doc.
21.
Discussion
I.

Introduction
Federal Rule of Civil Procedure 55 governs the entry of default and default

judgment. It provides, in pertinent part:
(a) Entering a Default. When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and
that failure is shown by affidavit or otherwise, the clerk must enter the
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party’s default.
(b) Entering a Default Judgment.
...
(2) By the Court. In all other cases, the party must apply to the court for
a default judgment. A default judgment may be entered against a minor
or incompetent person only if represented by a general guardian,
conservator, or other like fiduciary who has appeared. If the party
against whom a default judgment is sought has appeared personally or
by a representative, that party or its representative must be served with
written notice of the application at least 7 days before the hearing. The
court may conduct hearings or make referrals — preserving any federal
statutory right to a jury trial — when, to enter or effectuate judgment, it
needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
Fed. R. Civ. P. 55.
Because default has been entered against Taqueria Valencia, the court accepts
as true DirecTV’s Complaint allegations and considers Taqueria Valencia’s liability
established. See, e.g., AutoTec, L.L.C. v. Auction Access Auto, Inc., 2:12-cv-00896RDP, 2012 WL 2357951, at *2 (N.D. Ala. June 18, 2012) (“Upon default, the
well-pleaded allegations of a complaint are taken as true . . . Because Defendants
have previously been declared in default . . . their liability is established.”) (internal
citations omitted); 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
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Federal Practice and Procedure § 2688 (3d ed. 1998) (“If the court determines that
defendant is in default, the factual allegations of the complaint, except those relating
to the amount of damages, will be taken as true.”).
The court’s analysis of DirecTV’s Motion involves two steps. The court must:
•

establish it has personal and subject matter jurisdiction; and then

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ensure that DirecTV has satisfied Rule 55 requirements and is thus
entitled to the default judgment it seeks.

See Univ. of South Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir.1999)
(noting that “it is well settled that a federal court is obligated to inquire into subject
matter jurisdiction sua sponte whenever it may be lacking”); Nishimatsu Constr. Co,
Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)1 (explaining that “a
defendant’s default does not in itself warrant the court entering a default judgment”
and that “[t]here must be a sufficient basis in the pleadings for the judgment entered”)
(footnote omitted).
II.

The Court Has Jurisdiction over the Action
A.

Personal Jurisdiction

The court must establish personal jurisdiction in every case before it has power
to render any judgment. Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de

1

This decision constitutes binding precedent on this Circuit. See Bonner v. City of
Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981).
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Guinee, 456 U.S. 694, 702 (1982). A court obtains personal jurisdiction over the
parties when the plaintiff properly serves the Complaint and Summons upon the
defendant. Royal Lace Paper Works v. Pest-Guard Prods., 240 F.2d 814, 816 (5th
Cir. 1957)2 . The record shows that DirecTV served Taqueria Valencia with a
Summons and copy of the Complaint on or around May 23, 2013. Doc. 7.
Accordingly, the court has personal jurisdiction over the parties.
B.

Subject Matter Jurisdiction

Federal district courts have original jurisdiction over all civil actions arising
under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331.
DirecTV alleges on information and belief that Taqueria Valencia violated the
Communications Act by illicitly showing DirecTV satellite programming in its
commercial establishment for direct commercial gain. Doc. 1 ¶ 24. This statute
provides "aggrieved" persons with a civil right of action to pursue against
transgressors. 47 U.S.C. § 605(e)(3)(A). Because this action properly "arises under"
a federal law, the court has subject matter jurisdiction to entertain DirecTV's Motion.
III.

DirecTV Is Entitled to a Default Judgment against Taqueria Valencia
Rule 55(b)(2) allows the court to enter a default judgment when the Clerk has

entered default and the party seeking judgment has applied to the court for a default
2

This decision constitutes binding precedent on this Circuit. See note 1, supra.
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judgment. To determine whether the moving party is actually entitled to a default
judgment, the court must review the sufficiency of the complaint and its underlying
merits. See Stegeman v. Georgia, 290 F. App’x 320, 323 (11th Cir. 2008)
(unpublished) (citing Nishimatsu, 515 F.2d at 1206). "[A] defaulted defendant is
deemed to admit the plaintiff’s well-pleaded allegations of fact.” Tyco Fire & Sec.,
LLC v. Alcocer, 218 F. App’x 860, 863 (11th Cir. 2003) (unpublished). However, the
court has “an obligation to assure that there is a legitimate basis for any damage
award it enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir.
2003).
DirecTV is entitled to a default judgment against Taqueria Valencia. The
relevant statutory provision reads, “No person not being entitled thereto shall receive
or assist in receiving any interstate or foreign communication by radio and use such
communication (or any information therein contained) for his own benefit or for the
benefit of another not entitled thereto.” 47 U.S.C. § 605(a). In support of the instant
Motion, DirecTV offers an affidavit made by Kent P. Mader, its Vice President of
Risk Management. Doc. 21-1. In the affidavit, Mr. Mader vouches for the following
facts:
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DirecTV offers television programming to residential and business
customers only on a subscription and pay-per-view basis.

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In order to receive and view DirecTV, customers must obtain DirecTV
satellite hardware and establish an account with DirecTV.

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DirecTV charges subscription fees for both residential and commercial
programming.

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Commercial programming subscriptions are generally more expensive,
since the programming will be displayed for public viewing.

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DirecTV’s residential and commercial subscribers use the same satellite
equipment to receive DirecTV programming signals. Consequently,
commercial establishments interested in receiving commercial
programming at residential pricing may surreptitiously move satellite
hardware listed on a residential account to their commercial
establishment without DirecTV’s knowledge. It is also possible for a
commercial establishment to intentionally and fraudulently establish a
residential DirecTV account and then use that account to receive
residential programming for use in a commercial establishment in
violation of their agreement with DirecTV. Misappropriating residential
DirecTV programming for use in a commercial establishment allows
commercial establishment owners to publicly exhibit DirecTV
programming at substantially lower cost.

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In order to combat commercial misuse of its programming signals,
DirecTV engages investigators and auditors who assist with identifying
establishments that unlawfully exhibit DirecTV residential programming
in a commercial setting.

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On August 24, 2012, at approximately 3:55 PM, auditor Thomas
Johnson observed six television sets in the defendant’s establishment.
Three of these sets were exhibiting DirecTV satellite programming for
public viewing.

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Taqueria Valencia has an estimated fire code occupancy of 51-100.

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After receiving the auditor’s report, DirecTV conducted a search of its
records and determined that there was no DirecTV commercial account
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for Taqueria Valencia located at 3305 Lorna Road, Suite 7, Hoover, AL
35216, which would have authorized it to receive DirecTV’s
commercial programming.
Id. ¶¶ 4-11. Mr. Mader thus concludes, “The defendant did not have the right to
exhibit DirecTV satellite programming in its commercial establishment on August 24,
2012.” Id. ¶ 9. DirecTV also attaches Mr. Johnson’s affidavit as Exhibit A to Mr.
Mader’s affidavit. Id. at 6-8. Mr. Johnson’s affidavit substantiates the relevant
assertions offered by Mr. Mader. Accepting these facts as true, the court finds that
Taqueria Valencia illicitly derived benefit from intercepted communications to which
it was not entitled, in violation of 47 U.S.C. § 605(a). DirecTV therefore merits
default judgment against Taqueria Valencia.
IV.

The Court Will Award DirecTV $ 2,000.00 in Damages and $2,629.50 in
Costs and Attorneys’ Fees
The court must still determine what specific amount to award DirecTV under

the judgment. “Although the allegations of a complaint pertaining to liability are
deemed admitted upon entry of a default judgment, allegations relating to damages
are not.” U2 Home Entm't, Inc. v. Fu Shun Wang, 482 F. Supp. 2d 314, 318 (E.D.N.Y.
2007) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155,
158 (2d Cir. 1992)). Where a plaintiff’s claim is not “for a sum certain or a sum that
can be made certain by computation,” Rule 55 authorizes federal district courts to

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conduct hearings to determine the appropriate amount of damages to award a plaintiff
who has secured a default judgment. Fed. R. Civ. P. 55(b).3 Such hearings are
particularly necessary where the plaintiff is not claiming liquidated damages or does
not otherwise provide detailed evidence corroborating its damages request. See Adolf
Coors Co. v. Movement Against Racism & the Klan, 777 F.2d 1538, 1544 (11th Cir.
1985) (holding that “a judgment of default awarding cash damages could not properly
be entered without a hearing, unless the amount claimed is a liquidated sum or one
capable of mathematical calculation”). “Therefore, when a default judgment seeks an
uncertain or speculative damage amount, a court ‘has an obligation to assure that
there is a legitimate basis for any damage award it enters . . .’” Beringer v. Hearshe,
Kemp, LLC, 1:10-CV-1399-WSD-ECS, 2011 WL 3444347, at *2 (N.D. Ga. Aug. 8,
2011) (quoting Anheuser Busch, 317 F.3d at 1266).
In its Motion, DirecTV asks the court to award it the following amounts against
Taqueria Valencia:
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Under 47 U.S.C. § 605(e)(3)(C)(i)(II), an amount of $10,000.00;

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Under 47 U.S.C. § 605(e)(3)(C)(ii), an amount of up to $100,000.00;
and

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Under 47 U.S.C. § 605(e)(3)(B)(iii), in the discretion of the court, costs
and attorneys’ fees of $4657.00.

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DirecTV did not demand a jury in this case.
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Doc. 21 at 1-2. 47 U.S.C.605 (e)(3)(C)(i)(II) reads, in relevant part, “[T]he 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 . . .” Id. The section thus gives this court
discretion to award DirecTV an amount between $1,000 and $10,000. In urging this
court to award it the statutory maximum, DirecTV cites various federal district court
decisions emphasizing the need to deter even one-time violators of 47 U.S.C. § 605.
Doc. 21-3 at 10 (citations omitted). DirecTV suggests that awarding it anything less
than the maximum would not satisfy the statute’s deterrent objective.
DirecTV also asks for enhanced damages under 47 U.S.C. § 605(e)(3)(C)(ii).
This provision reads:
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.
Id. Again, this provision clearly gives the court discretion to award any amount, so
long as it is not more than $100,000. DirecTV argues that it deserves some
unidentified amount “up to” $100,000. Doc. 21-3 at 9. In support, it cites various
decisions implying that this court may infer Taqueria Valencia’s willful statutory

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violation from the restaurant’s mere unwillingness to defend itself in this action. Id.
at 10-13 (citations omitted). DirecTV further claims that requiring it to substantiate
its damages claims would unfairly penalize it for Taqueria Valenica’s transgression.
Id.
The court finds that DirecTV deserves statutory and enhanced damages under
the aforementioned provisions. It also finds that DirecTV deserves costs and
attorneys’ fees under the statute. However, the court disagrees that DirecTV deserves
the maximum amount of damages under either 47 U.S.C. § 605 (e)(3)(C)(i)(II) or 47
U.S.C. § 605(e)(3)(C)(ii). The court also disagrees with DirecTV’s calculation of its
attorneys’ fees. The court finds that the attorneys’ fee rates exceed reasonable rates
charged, in the court’s experience, for comparable work. Further, the court finds that
the time entries for certain discrete time entries (e.g. [electronic] filing with court;
mailing) were excessive. The court has attached as Exhibit 1 to this Memorandum
Opinion DirecTV’s fee request, manually annotated to reflect amounts resulting from
an application of what the court finds to be reasonable rates and time entries.
Accordingly, in its discretion, the court awards DirecTV the following amounts:
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Under 47 U.S.C. § 605(e)(3)(C)(i)(II), an amount of $1,000.00;

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Under 47 U.S.C. § 605(e)(3)(C)(ii), an amount of $1,000.00; and

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Under 47 U.S.C. § 605(e)(3)(B)(iii), costs and attorneys’ fees of
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$2,629.50.4
The court will enter a default judgment order contemporaneously with this opinion
reflecting these awards.
DONE this the 6th day of December, 2013.

VIRGINIA EMERSON HOPKINS
United States District Judge

4

This number reflects the $400 spent by the plaintiff in filing fees, see Doc. 21-2 at 4, and
the $2,229.50 in costs and fees reasonably incurred by DirecTV in this case.
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