J & J Sports Productions, Inc. v. Chacko

Filing 7

ORDER granting 6 Plaintiff's Application for Default Judgment as to Varughese N. Chacko and AWARDS damages in favor of Plaintiff and against Defendant in the amount of $16,800.00, which consists of $4,200.00 in statutory damages und er 47 U.S.C. § 605(e)(3)(c)(i)(II) and $12,600.00 in enhanced damages under 47 U.S.C. § 605(e)(3)(C)(ii). The Court INSTRUCTS Plaintiff to submit an application and affidavit in support of attorneys fees and costs within 14 days from the date of this Order. Once the Court addresses the issue of attorneys' fees and costs, Clerk shall enter a default judgment in favor of Plaintiff and against Defendant. Signed by Judge Clarence Cooper on 11/25/2013. (bdb)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
J & J SPORTS PRODUCTIONS, INC., :
:
Plaintiff,
:
:
vs.
:
:
VARUGHESE N. CHACKO D/B/A :
NEIGHBORHOOD BAR & GRILL,
:
:
Defendant.
:

CIVIL ACTION NO.
1:13-CV-1977-CC

OPINION AND ORDER
This matter is before the Court on Plaintiff’s Application for Default Judgment
Against Defendant Varughese N. Chacko [Doc. No. 6] (the “Motion for Default
Judgment”). For the reasons stated below, the Court grants the Motion for Default
Judgment.
I.

BACKGROUND
A.

Procedural History

On June 6, 2013, Plaintiff J & J Sports Productions, Inc. (“Plaintiff”)
commenced this action against Defendant Varughese N. Chacko d/b/a
Neighborhood Bar & Grill (“Defendant”). Plaintiff alleges Defendant violated The
Communications Act of 1934, 47 U.S.C. § 605, and The Cable & Television Consumer
Protection and Competition Act of 1992, 47 U.S.C. § 533, by unlawfully intercepting,
receiving, and exhibiting the telecast of Manny Pacquiao v. Shane Mosley - WBO World
Welterweight Championship Fight Program (the “Program”).1 On June 18, 2013,
Plaintiff served its Complaint upon Defendant. As of the date of this Order,
Defendant has not answered or otherwise responded to Plaintiff’s Complaint.
On July 11, 2013, Plaintiff moved for the Clerk of Court to enter default

The Program included all under-card bouts and fight commentary
encompassed in the television broadcast of the event.
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against Defendant pursuant to Federal Rule of Civil Procedure 55(a). On July 12,
2013, the Clerk of Court issued an entry of default. On July 19, 2013, Plaintiff filed
the instant Motion for Default Judgment.
B.

Factual History

According to the Complaint, Plaintiff owned the exclusive nationwide
television distribution rights to the Program. Plaintiff entered into sublicensing
agreements with various commercial entities throughout the United States,
including entities within the State of Georgia, pursuant to which Plaintiff granted
these entities the rights to exhibit the Program publicly to the patrons within their
respective establishments. Plaintiff did not enter into such a sublicensing agreement
with Defendant, and Defendant did not pay Plaintiff the necessary sublicensing fee
required to obtain the Program for exhibition at Defendant’s commercial
establishment, Neighborhood Bar & Grill.
Plaintiff explains in evidentiary submissions that it has experienced a serious
erosion in the sales of its proprietary programming to its commercial customers
throughout the United States due to the rampant piracy of its broadcasts by
unauthorized and unlicensed establishments. Accordingly, Plaintiff has embarked
upon a nationwide program to police its signals for the purpose of identifying and
prosecuting commercial establishments that pirate its programming. As part of this
effort, Plaintiff has hired auditors and law enforcement personnel to detect and
identify signal pirates.
On May 7, 2011, David Harmsen, an investigator hired by Plaintiff, visited
Neighborhood Bar & Grill, which is located at 532 Grayson Highway, Suite B,
Lawrenceville, Georgia 30346, and observed the unlawful exhibition of the Program
inside the establishment. Plaintiff has not specified the capacity of Neighborhood
Bar & Grill, but the investigator observed approximately 55 patrons during the time
he was there. For an establishment with a maximum fire code occupancy of 55
persons, the rate for obtaining a commercial sublicense to exhibit the Program
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publicly would have been $4,200.00. Defendant advertised the telecast on a
handwritten note in the front window of the establishment and also charged a cover
charge of $5.00.
Plaintiff’s president, Joseph M. Gagliardi, attests that he is aware of no means
by which Plaintiff’s programming can be mistakenly, innocently, or accidentally
intercepted. There are, however, several methods that a signal pirate can employ
to unlawfully intercept and broadcast Plaintiff’s programming. Plaintiff has not
established the specific method by which Defendant intercepted Plaintiff’s
programming, but such piracy has resulted in Plaintiff’s loss of revenue and also has
raised the cost of service for lawful residential and commercial customers of cable
and satellite broadcasting.
II.

STANDARD OF REVIEW
Once a default has been entered, a party may seek a default judgment against

the non-responsive party under Federal Rule of Civil Procedure 55(b)(2). The mere
entry of a default by the Clerk of Court does not in itself warrant the entry of a
default judgment by the Court. Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515
F.2d 1200, 1206 (5th Cir. 1975).2 A default judgment is appropriate only if the factual
allegations in the complaint provide an adequate legal basis to find that the
defendant is liable. See Cotton v. Massachusetts Mut. Life Ins. Co., 402 F.3d 1267,
1278 (11th Cir. 2005). “[A] defaulted defendant is deemed to admit the plaintiff’s
well-pleaded allegations of fact.” Id. (citation and internal marks omitted).
If a default judgment is warranted, the Court may hold a hearing for the
purpose of assessing damages. S.E.C. v. Smyth, 420 F.3d 1225, 1231, 1232 & n.13
(11th Cir. 2005) (citing Fed. R. Civ. P. 55(b)(2)). Alternatively, damages may be
determined based on affidavits setting forth the necessary facts. Adolph Coors Co.
Fifth Circuit decisions rendered prior to September 30, 1981, are binding
precedent in the Eleventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.
1981) (en banc).
2

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v. Movement Against Racism and the Klan, 777 F.2d 1538, 1544 (11th Cir. 1985). “A
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). However, discretion as to the judgment or the need for a hearing on damages
is vested with the district court. Pope v. United States, 323 U.S. 1, 12, 65 S. Ct. 16, 89
L. Ed. 3 (1944) (“It is a familiar practice and an exercise of judicial power for a court
upon default, by taking evidence when necessary or by computation from facts of
record, to fix the amount which the plaintiff is lawfully entitled to recover and to
give judgment accordingly.”).
III.

DISCUSSION
A.

Liability

Plaintiff maintains that Defendant has violated 47 U.S.C. §§ 553 and 605.
Section 553 prohibits “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.” Id. § 553(a)(1). Section 605
provides, in pertinent part, as follows:
No 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. 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).
There is disagreement among the circuit courts as to whether § 605 covers the
interception of cables services carried over a cable network. The Second Circuit has
held that § 605 applies to satellite transmissions and cable programming transmitted
over a cable network. See Int’l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir.
1996) (holding that both §§ 605 and 553 cover interception of cable programming
transmitted over a cable network). In contrast, the Third and Seventh Circuits have
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taken the position that only § 553 covers the interception of cable programming
transmitted over a cable network and that § 605 covers the interception of cable
transmissions as they travel through the air. See TRK Cable Co. v. Cable City Corp.,
267 F.3d 196 (3d Cir. 2001) (finding that Congress removed coverage of wire
communications from § 605 and concluding that § 605 thus was inapplicable to theft
of cable service via a cable descrambler); United States v. Norris, 88 F.3d 462, 466
(7th Cir. 1996) (affirming district court’s finding that “where cable programming is
broadcast through the air and then retransmitted by a local cable company over a
cable network, § 605 should govern the interception of the satellite or radio
transmission through the air, while § 553(a) should govern the interception of the
retransmission over a cable network”). The Eleventh Circuit has not yet addressed
the issue.
Consistent with many district courts within the Eleventh Circuit, the Court
finds the interpretation of § 605 by the Third and Seventh Circuits persuasive. Joe
Hand Promotions, Inc. v. ADJ Entity, LLC, No. 3:11–CV–90 (CAR), 2011 WL
4102314, at *3 n.3 (M.D. Ga. Sept. 14, 2011); J & J Sports Prods., Inc. v. Allen, No.
1:10-CV-4258-WSD, 2011 WL 941502, at *2 (N.D. Ga. Mar. 14, 2011); CSC Holdings,
Inc. v. Kimtron, Inc., 47 F. Supp. 2d 1361, 1364 (S.D. Fla. 1999). That is, § 605
prohibits commercial establishments from intercepting and broadcasting satellite
transmissions, while § 553 applies exclusively to broadcasts over a cable network.
Notably, even Plaintiff acknowledges that “[t]he majority of the [c]ourts have found
that Section 605 applies to cases where the end-user offender obtained a proprietary
broadcast by way of a satellite (rather than cable) television programming system.”
(Mem. of Law Supp. Pl.’s Appl. for Default J. at 4.)
Plaintiff pleads in this case that Defendant violated §§ 553 and 605. Plaintiff
does not specify in either its Complaint or motion papers the manner in which
Defendant intercepted the programming. However, the Court recognizes, as other
courts have, that the manner of interception may be exclusively in Defendant’s
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knowledge. Zuffa, LLC v. Al-Shaikh, No. 10-00085-KD-C, 2011 WL 1539878, at *5
(S.D. Ala. Apr. 21, 2011); Allen, 2011 WL 941502, at *3; Joe Hand Promotions, Inc. v.
Blanchard, No. 409CV100, 2010 WL 1838067, at *2 (S.D. Ga. May 3, 2010); Joe Hand
Promotions, Inc. v. McBroom, No. 5:09-CV-276(CAR), 2009 WL 5031580, at *2 (M.D.
Ga. Dec. 15, 2009). Accordingly, the Court gives Plaintiff the benefit of the doubt
and finds that Defendant’s conduct, as set forth in the Complaint, violates both §§
553 and 605. See ADJ Entity, 2011 WL 4102314, at *4 (finding that “the facts
established by the default are sufficient to show liability under both § 503 and §
605”); Zuffa, 2011 WL 1539878, at *5 (finding that the plaintiff has “sufficiently
pleaded its case so as to establish [d]efendants’ liability under both Section 553 and
605”); Allen, 2011 WL 941502, at *3 (finding that the plaintiff had “alleged and
presented sufficient evidence that [d]efendant violated the common elements of both
§ 605 and § 553”).
B.

Damages

Plaintiff seeks $10,000.00 in statutory damages under 47 U.S.C. §
605(e)(3)(C)(i)(II) for Defendant’s violation of § 605(a) or $10,000.00 in statutory
damages under 47 U.S.C. § 553(c)(3)(A)(ii) for Defendant’s violation of § 553(a).
Additionally, Plaintiff seeks $100,000.00 in enhanced damages pursuant to 47 U.S.C.
§ 605(e)(3)(C)(ii). Plaintiff also requests attorneys’ fees and costs in an amount to be
determined.
Pursuant to § 553, the Court may award statutory damages between $250.00
and $10,000.00 per violation. 47 U.S.C. § 553(c)(3)(A)(ii). Moreover, the Court may
award up to $50,000.00 in enhanced damages if the Court finds that the conduct was
committed willfully and for the purpose of obtaining commercial advantage or
private financial gain. Id. at § 553(c)(3)(B). Statutory damages under § 605 range
from $1000.00 up to $10,000.00 for each violation. 47 U.S.C. § 605(e)(3)(C)(i)(II).
Additionally, where the conduct was committed willfully and for the purpose of
obtaining commercial advantage or private financial gain, § 605(e)(3)(C)(ii) allows
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for enhanced damages of up to an additional $100,000.00. The amount of damages
assessed pursuant to § 605 rests within the sound discretion of the court. See 47
U.S.C. § 605(e)(3)(C)(i)(II). Finally, § 605 provides that the Court “shall direct the
recovery of full costs, including reasonable attorneys’ fees” to the prevailing party,
whereas § 553 states that the Court may award these costs.

47 U.S.C. §

605(e)(3)(B)(iii) and § 553(c)(2)(C).
Recovery under both §§ 553 and 605 is not permissible. Allen, 2011 WL
941502, at *2; J & J Sports Prods., Inc. v. Fitzgerald, No. 1:09-CV-1684-WSD, 2009 WL
3681834, *2 n.1 (N.D. Ga. 2009). “When a defendant has violated both §§ 553 and
605, most courts choose to award damages under § 605 because that provision
‘allows for greater recovery by plaintiffs.’” J & J Sports Prods., Inc. v. Just Fam, LLC,
No. 1:09-CV-3072-JOF, 2010 WL 2640078, at *2 n.3 (N.D. Ga. June 28, 2010) (quoting
Enter. by J & J, Inc. v. Al-Waha Enters., 219 F. Supp. 2d 769, 775 (S.D. Tex. 2002)).
Here, the difference in the minimum and maximum amount of damages allowed by
§§ 553 and 605 is immaterial, as the statutory damages and enhanced damages that
this Court will award do not fall below or exceed the permissible ranges of the two
statutes. Nevertheless, insofar as Plaintiff specifically requests in the declaration of
its attorney an award of statutory and enhanced damages pursuant to § 605,3 (see
Declartion [sic] of Ronald D. Reemsnyder in Supp. of Pl.’s Appl. for Default J. [Doc.
No. 6-1] ¶ 7), the Court will award damages under the requested section.
The Court finds that an award to Plaintiff of $4,200.00 in statutory damages
is warranted and sufficient because that is the fee Defendant would have paid to
obtain a commercial sublicense to exhibit the Program publicly. See ADJ Entity,
LLC, 2011 WL 4102314, at *4 (awarding statutory damages in the amount of the
license fee that the defendant, based on its maximum capacity, would have paid the

Plaintiff alternatively requests statutory damages under § 553. In the
declaration, Plaintiff makes no request for enhanced damages under § 553.
3

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plaintiff if it had legally purchased the right to exhibit the program); McBroom, 2009
WL 5031580, at *4 (same); J & J Sports Prods., Inc. v. Arboleda, No. 6:09-CV-467ORL-18DAB, 2009 WL 3490859, at *7 (M.D. Fla. Oct. 27, 2009) (same); Kingvision
Pay–Per–View Corp. v. El Torito Supermarket, Inc., No. 6:06–CV–657–ORL–18KRS,
2007 WL 174158, at *3 (M.D. Fla. June 19, 2007) (same).
The Court further finds, for multiple reasons, that an award of enhanced
damages is justified. First, the Court is convinced that Defendant must have
engaged in some deliberate act, such as using an unencryption device or another
device that would allow for descrambled reception of the Program, to have received
the closed-circuit broadcast of the Program. Second, Defendant advertised the
showing of the Program on a handwritten sign in the front window of the
establishment. Third, Defendant charged patrons a cover charge of $5.00. Fourth,
Defendant publicly broadcasted the Program purposely and not by happenstance,
as Defendant showed the Program on two televisions. Accordingly, the Court finds
that Defendant’s conduct was willful and committed for the purpose of obtaining
private financial gain. The Court awards Plaintiff enhanced damages in the amount
of $12,600.00, which is three times the amount of the sublicensing fee and sufficient
to deter Defendant and others from committing future violations. See ADJ Entity,
LLC, 2011 WL 4102314, at *5 (awarding enhanced damages under § 605(e)(3)(C)(ii)
in an amount triple the statutory damages awarded); Just Fam, LLC, 2010 WL
2640078, at *3 (same); Blanchard, 2010 WL 1838067, at *4-5 (same); McBroom, 2009
WL 5031580, at *5-6 (same); Arboleda, 2009 WL 3490859, at *7 (same). This results
in a total award of $16,800.00 to Plaintiff.
Finally, as the prevailing party, Plaintiff is entitled to an award of costs and
reasonable attorneys’ fees. 47 U.S.C. § 605(e)(3)(B)(iii). The Court instructs Plaintiff
to submit an application and affidavit in support of attorneys’ fees and costs within
fourteen (14) days from the date of this Order.

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IV.

CONCLUSION
Based on the foregoing, the Court GRANTS Plaintiff’s Motion for Default

Judgment [Doc. No. 6] and AWARDS damages in favor of Plaintiff and against
Defendant in the amount of $16,800.00, which consists of $4,200.00 in statutory
damages under 47 U.S.C. § 605(e)(3)(c)(i)(II) and $12,600.00 in enhanced damages
under 47 U.S.C. § 605(e)(3)(C)(ii). The Court INSTRUCTS Plaintiff to submit an
application and affidavit in support of attorneys’ fees and costs within fourteen (14)
days from the date of this Order. Once the Court addresses the issue of attorneys’
fees and costs, the Clerk of Court shall enter a default judgment in favor of Plaintiff
and against Defendant.
SO ORDERED this 25th day of November, 2013.

s/ CLARENCE COOPER
CLARENCE COOPER
SENIOR UNITED STATES DISTRICT JUDGE

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