Joe Hand Promotions, Inc. v. Mooneys Pub Inc. d/b/a Mooney's Pub et al
Filing
8
ORDER & OPINION entered by Judge Joe Billy McDade on 09/24/2014. For the forgoing reasons, Defendants Mooney's Pub Inc. and Michelle Bruce's Motion to Dismiss 4 is DENIED. This case is REFERRED to Magistrate Judge Hawley for further pretrial proceedings. IT IS SO ORDERED. See Full Written Order.(JS, ilcd)
E-FILED
Wednesday, 24 September, 2014 11:40:24 AM
Clerk, U.S. District Court, ILCD
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
JOE HAND PROMOTIONS, INC.,
)
)
Plaintiff,
)
)
v.
)
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MOONEY’S PUB INC., D/B/A
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MOONEY’S PUB AND MICHELLE
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BRUCE INDIVIDUALLY AND AS AN
)
OFFICER, DIRECTOR, SHAREHOLDER )
AND/OR PRINCIPAL OF MOONEY’S
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PUB INC., D/B/A MOONEY’S PUB,
)
)
Defendant.
)
Case No. 14-cv-1223
ORDER & OPINION
This matter is before the Court on Defendants’ Motion to Dismiss and Strike
Complaint. (Doc. 4). For the reasons stated below, the Motion is denied.
PROCEDURAL HISTORY
Plaintiff filed its Complaint on June 9, 2014, alleging that Defendants
violated 47 U.S.C. §§ 553 and 605 (“the Cable Act”) by exhibiting an Ultimate
Fighting Championship match on April 21, 2012. Defendants filed a Motion to
Dismiss and Strike Complaint on July 11, 2014. (Doc. 4). In their Motion,
Defendants argue that Plaintiff has failed to state a claim against individual
Defendant Michelle Bruce pursuant to Federal Rule of Civil Procedure 12(b)(6).
Defendants also raise two affirmative defenses. (Doc. 7).
LEGAL STANDARDS
In ruling on a motion to dismiss for failure to state a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6), “the court must treat all well-pleaded
allegations as true and draw all inferences in favor of the non-moving party.” In re
marchFIRST Inc., 589 F.3d 901, 904 (7th Cir. 2009). The complaint must contain “a
short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2).
To survive a motion to dismiss, a plaintiff’s complaint must contain sufficient
detail to give notice of the claim, and the allegations must “plausibly suggest that
the plaintiff has a right to relief, raising that possibility above a ‘speculative level.’”
EEOC v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The plausibility standard
requires enough facts “to present a story that holds together,” but does not require a
determination of probability. Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir.
2010). Though detailed factual allegations are not needed, a “formulaic recitation of
the elements of a cause of action will not do.” Bell Atl. Corp., 550 U.S. at 555.
Ordinarily it is premature for courts to consider unpleaded affirmative
defenses at the motion to dismiss stage, because “complaints do not have to
anticipate affirmative defenses to survive a motion to dismiss.” United States v.
Lewis, 411 F.3d 838, 842 (2005)(citation omitted). However, there is an exception
when a complaint’s allegations “set forth everything necessary to satisfy the
affirmative defense.” Id. In such circumstances, the Seventh Circuit characterizes
these motions as Rule 12(c) motions for judgment on the pleadings, in spite of the
2
fact that they are filed before the pleadings are closed. See Brownmark Films, LLC
v. Comedy Partners, 682 F.3d 687, 690 (7th Cir. 2012).
A motion for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c) is analyzed under the same standard as a motion to dismiss under
Rule 12(b)(6). United States v. Wood, 925 F.2d 1580, 1581 (7th Cir. 1991); see also
Brooks v. Ross, 578 F.3d 574, 579 (2009) (noting that the practical effect of
addressing a statute of limitations defense in a Rule 12(c) motion is the same as
addressing it in a Rule 12(b)(6) motion). Thus, all well-pleaded facts in the operative
complaint are taken as true and all reasonable inferences drawn in the plaintiff’s
favor. See Thomas v. Guardsmark, Inc., 381 F.3d 701, 704 (7th Cir. 2004).
FACTUAL BACKGROUND1
Plaintiff, Joe Hand Promotions, Inc. (“Joe Hand”), is a Pennsylvania
corporation that owns the distribution rights to the UFC 145: Jones v. Evans
broadcast and all of its undercard bouts, which was scheduled for April 21, 2012.
The broadcast originated via satellite uplink, and was retransmitted to both closedcircuit cable systems and satellite companies.
Joe Hand limited public exhibition of the broadcast by entering into contracts
with various entities in Illinois that granted them the right to exhibit it. Defendant
Mooney’s Pub is a Peoria, Illinois entity that did not have authorization to exhibit
the broadcast, but it did so anyway on April 21, 2012. Defendant Michelle Bruce
The Court draws the facts in this section from Plaintiff’s Complaint (Doc. 1),
treating its allegations as true and drawing all reasonable inference in its favor, in
accordance with the motion to dismiss standard described above.
1
3
had supervisory capacity and control over the activities occurring within Mooney’s
on that day, and she received financial benefit from Mooney’s operations.
Joe Hand alleges two alternative causes of action because it is unsure of the
manner in which Defendants obtained the broadcast at this point. If Defendants
intercepted the signal via a cable system, Joe Hand alleges they violated 47 U.S.C. §
553. But if Defendants intercepted the signal via satellite transmission, Joe Hand
alleges they violated 47 U.S.C. § 605.
Defendants raise three separate arguments in their Motion to Dismiss and
Strike the Complaint. First, they argue that Plaintiff has failed to state a claim
against Michelle Bruce because the allegations that she is “an Officer, Director,
Shareholder, and/or Principal” and that she had “supervisory capacity and control
over the activities occurring within the Establishment on April 21, 2012” are
insufficient to establish liability under §§ 553 and 605. Second, they argue that
Plaintiff does not have capacity to sue in this Court because it is not registered to do
business in the State of Illinois. Third, they argue that the action is barred by the
statute of limitations. For reasons addressed below, these arguments are
unpersuasive and Defendants’ Motion to Dismiss and Strike the Complaint is
denied.
Plaintiff’s Complaint against Michelle Bruce
Defendants seek to dismiss Plaintiff’s Complaint against Michelle Bruce,
putting forth the abbreviated argument that the allegations that she is “an Officer,
Director, Shareholder, and/or Principal” and that she was the individual “with
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supervisory capacity and control over the activities occurring within the
Establishment on April 21, 2013” are insufficient to establish individual liability.
Plaintiff responds by arguing that its complaint contains sufficient facts to prove
liability because it also pleaded that Bruce had a financial interest in Mooney’s on
the evening in question.
To hold individuals vicariously liable for violations of §§ 553 and 605, a
plaintiff must show that the individual had “a right and ability to supervise the
violations, and that she had a strong financial interest in such activities.” J&J
Sports Prods., Inc. v. Ribeiro, 562 F. Supp. 2d 498, 501 (S.D.N.Y. 2008).2 In Ribeiro,
the district court denied a motion to dismiss the individual defendant when the
plaintiff’s pleading was identical to Joe Hand’s pleading in this case.
Courts have dismissed complaints against individual defendants when
plaintiffs have failed to make allegations that the individuals were present during
the unauthorized broadcast, that they authorized or controlled it, or that they
reaped financial benefits from it. See J&J Sports Prods., Inc. v. 291 Bar & Lounge,
LLC, 648 F. Supp. 2d 469, 473 (E.D.N.Y. 2009); J&J Sports Prods., Inc. v.
MayrealII, LLC, 849 F. Supp. 2d 586, 591-592 (D. Md. 2012) (dismissing individual
defendants when “the only specific factual allegations” linking them to complaint
Some district courts have suggested that vicarious liability might be unavailable
under the statute. See, e.g., J&J Sports Prods., Inc. v. Resendiz, No. 08 C 4121, 2009
WL 1953154, at *2, n.1 (N.D. Ill. July 2, 2009) (“[W]e are skeptical that the doctrine
of vicarious liability should be extended to broadcast piracy actions.”). However,
Defendants do not seem to challenge the validity of vicarious liability. The theory of
vicarious liability under the Cable Act finds its roots in the copyright context. See
Softel, Inc. v. Dragon Medical & Scientific Communications, Inc., 118 F.3d 955, 97172 (2d Cir. 1997). Rather than challenging the application of vicarious liability in
this context, Defendants seem to have embraced it by arguing that Plaintiff did not
plead the elements that Softel requires. (Doc. 4 at 1).
2
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was “that both are named on [the defendant’s] liquor license” and one is the
defendant’s resident agent).
In this case, Plaintiff did not simply plead that Michelle Bruce is “an officer,
director, shareholder and/or principal of Mooney’s Pub, Inc.” Instead, Plaintiff has
put Defendants on notice that its theory of Michelle Bruce’s liability rests on the
factual predicates that she had supervisory capacity and control over the bar and
also stood to financially benefit from its operations. Although these allegations
might appear to formulaically track the required elements for legal liability, they
“present a story that holds together” if one draws all inferences in favor of Plaintiff.
See Swanson, 614 F.3d at 404. At this stage, it is reasonable to infer that Michelle
Bruce had a financial interest in Mooney’s Pub based on her alleged ownership
interest in the venture. When coupled with the allegation that she exercised
supervision or control over the premises at that time, Joe Hand’s allegations are
sufficient to state a claim for vicarious liability. Defendants’ motion to dismiss the
complaint against Michelle Bruce for failure to state a claim is denied.
Plaintiff’s Capacity to Sue
The second argument that Defendants raise is that Plaintiff does not have
capacity to sue in Illinois Court. The Illinois Business Corporation Act of 1983
includes a door closing provision that prohibits foreign corporations that transact
business in Illinois without a Certificate of Authority from maintaining “a civil
action in any Court of this State” until they have obtained the certificate. 805 Ill.
Comp. Stat. 5/13.70. Defendants argue that because Joe Hand is not registered to
do business in the state, the statute bars it from filing a law suit. Joe Hand
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concedes that it lacks a Certificate of Authority, but argues the bar does not apply
because (1) Defendants have not met their burden of proving that it transacts
business in the state, (2) it does not transact business in the state as defined by the
statute, and (3) even if it did transact business, its business concerns interstate
commerce, which is exempt from the statute.
The Court does not need to address these arguments on the merits to decide
the issue. The statute is simply inapplicable in this case, where the Court has
federal question jurisdiction. If the Court had subject matter jurisdiction over this
case pursuant to 28 U.S.C. § 1332, there would be a real possibility that the statute
would apply and the Court would need to address the merits. When a federal court
sits in diversity, it applies substantive state law and federal procedural law. See
Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427 (1996). For example, in
Woods v. Interstate Realty Co., the Supreme Court held that state door-closing
statutes that bar recovery in state court, like Illinois’ statute, must similarly bar
recovery in federal court when the plaintiff invokes diversity jurisdiction. 337 U.S.
535, 538 (1949).
Although the Supreme Court has not overruled Woods, its holding is called
into question by Hanna v. Plumer, 380 U.S. 460 (1965). Under Hanna, “if a duly
promulgated federal rule of procedure conflicts with state law, the Rules Enabling
Act, 28 U.S.C. § 2072, commands a federal court to apply [the federal] rule of
procedure unless to do so would abridge a substantive right under state law.” Lux v.
McDonnell Douglas Corp. (In re Air Crash Disaster), 803 F.2d 304, 313-14 (7th Cir.
1986). In this case, Federal Rule of Civil Procedure 17(b)(2) provides that a
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corporation’s capacity to sue is “determined . . . by the law under which it was
organized.” That said, federal courts sitting in diversity in Illinois have generally
not questioned the applicability of the statute. See, e.g., Wagner Furniture Interiors,
Inc. v. Kemner’s Georgetown Manor, Inc., 929 F.2d 343, 345-46 (1991) (holding that
defendant waived its capacity argument by failing to raise it at the earliest
opportunity); RehabCare Group East, Inc. v. Camelot Terrace, Inc., No. 10 CV
02350, 2010 WL 5174369, at *5 (N.D. Ill. Dec. 15, 2010) (holding that the Illinois
statute applies rather than Rule 17(b), and dismissing corporation’s complaint).
The Court need not get entangled in that question. Joe Hand’s complaint
alleges two causes of action that are based in federal law, and invokes jurisdiction
pursuant to 28 U.S.C. § 1331. In such a case, there is no need for the Court to apply
state law. Instead, the Court turns to the Federal Rules of Civil Procedure. Joe
Hand is a Pennsylvania corporation, so its capacity to sue is determined by
Pennsylvania corporate law. See Fed. R. Civ. P. 17(b)(2). Therefore, Defendants’
motion is denied on this ground.
The Cable Act’s Statute of Limitations
The final argument Defendants make is that the Complaint is barred by the
Cable Act’s statute of limitations. This is an affirmative defense, so the Court will
treat it as a motion for judgment on the pleadings under Rule 12(c). See Brownmark
Films, LLC, 682 F.3d at 690.
As both parties acknowledge, the Cable Act is silent on the statute of
limitations that attach to private rights of action brought under it. Ordinarily, a
federal court could adopt the catch-all statute of limitations of four years codified in
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28 U.S.C. § 1658(a), which is available for all causes of action “made possible by a
post-1990 [statutory enactment].” Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369,
382 (2004).
Here, the parties agree that § 1658(a) does not apply because the
relevant substantive statutory provisions were passed before 1990. See Kingvision
Pay Per View, Ltd. v. Boom Town Saloon, Inc., 98 F. Supp. 2d 958, 960 n.2 (N.D. Ill.
2000). In such a case, the Court must determine the statute of limitations through
analogy to other statutes.
Defendants argue that the Court should apply the two-year statute of
limitations found in the Federal Electronic Communications Privacy Act (FECPA).
If it did, Plaintiff’s action would be untimely, as the statute would have run in April
of 2014 and Plaintiff did not file its complaint until June 9, 2014. Plaintiff argues
against applying the statute of limitations in the FECPA, and instead suggests that
the Court apply the three-year statute of limitations found in the Copyright Act, 17
U.S.C. § 507(b). As a fallback, Plaintiff urges the Court to apply the statute of
limitations in the Illinois Cable Piracy Act (ICPA). For the reasons explained below,
the Court will apply the statute of limitations for the ICPA, which it determines is
five years. Therefore, the Court denies Defendants’ motion on this issue.
Federal Common Law
When, as here, “Congress fails to provide a statute of limitations for a federal
claim and § 1658(a) is not applicable, federal courts must borrow the most
analogous statute of limitations from state law.” Berger v. AXA Network LLC, 459
F.3d 804, 808 (7th Cir. 2006). Although courts are not required to choose a state
statute of limitations period, they follow this judicially-created rule as a matter of
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federal common law and choose state limitations periods to fill in “the interstices of
federal enactments.” DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 159 (1983).
In this situation, state law is a “lender of first resort.” N. Star Steel Co. v.
Thomas, 515 U.S. 29, 34 (1995). Courts will apply analogous federal statutes rather
than state statutes only in rare circumstances, when “a rule from elsewhere in
federal law clearly provides a closer analogy than available state statutes, and
when the federal policies at stake and the practicalities of litigation make that rule
a significantly more appropriate vehicle for interstitial lawmaking.” Reed v. United
Transp. Union, 488 U.S. 319, 324 (1989). The Supreme Court, for example, adopted
the Clayton Act’s statute of limitations for federal civil RICO. RICO actions present
a unique need for interstate uniformity because plaintiffs must prove both a nexus
to interstate or foreign commerce and a pattern of racketeering that often involves
activity in multiple geographic areas. See Agency Holding Corp. v. Malley-Duff &
Assocs., Inc.,483 U.S. 143, 153-54 (1987).
Need for Uniformity
Circuits have split over the question of whether the federal policies
underlying the Cable Act require a nationally uniform statute of limitations, and
the Seventh Circuit has not addressed the question. In Prostar v. Massachi, the
Fifth Circuit applied the statute of limitations in the Copyright Act. 239 F.3d 669
(5th Cir. 2001). It reasoned that the cable industry needed a national standard
because it is a national industry and actions brought under the Cable Act are often
of a multi-state nature. Id. at 676. Both the Third and Ninth Circuit reached
opposite conclusions, and employed the same reasoning as each other. First, a
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uniformity concern does not implicate a need for a uniform statute of limitations,
but instead concerns the way in which a court should characterize a federal cause of
action before borrowing statutes of limitations from state law. See DirecTV v. Webb,
545 F.3d 837, 851 (9th Cir. 2008); Kingvision Pay-Per-View, Corp., Ltd. v. 898
Belmont, Inc., 366 F.3d 217, 224 (3d Cir. 2004). Second, the interstate identity of
litigants in Cable Act cases does not change the fact that claims brought under the
Cable Act are based upon localized violations in a single place rather than multiple
acts occurring in disparate jurisdictions. DirecTV, 545 F.3d at 851; Kingvision, 366
F.3d at 224. The Cable Act, therefore, raises different interstate concerns than
RICO civil actions. See Kingvision, 366 F.3d at 223.
The Court finds the reasoning of the Third and Ninth Circuits more
persuasive than the reasoning of the Fifth Circuit. Although the Fifth Circuit’s
concern with national uniformity is relevant, the existence of fractured statutes of
limitations is just a consequence of the well-entrenched rule that federal courts will
borrow statutes of limitations from analogous state statutes. Therefore, there is no
reason to resort to federal law for an applicable statute of limitations unless there is
no appropriate state law analogue.
Analogous Federal and State Statutes
The trend in federal courts has been to apply the Copyright Act’s statute of
limitations when the closest analogue is the state tort of conversion. See, e.g.,
Kingvision Pay Per View, Ltd. v. Boom Town Saloon, Inc., 98 F. Supp. 2d 958 (N.D.
Ill. 2000). In Kingvision, the court concluded that the Copyright Act served as a
“closer fit” to the Cable Act than Illinois’ conversion cause of action because “the
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same conduct can violate both laws” and “the remedial structure” of the Copyright
Act – which goes beyond ordinary tort remedies and includes criminal sanctions,
injunctive relief, actual damages, statutory damages, and attorney’s fees –“closely
parallels those set forth under the Cable Act.” Id. at 964. See also Prostar, 239 F.3d
669 (5th Cir. 2001)(selecting Copyright Act’s statute of limitations rather than
Louisiana’s statute of limitations on conversion claims).
However, when state law provides a private right of action for cable piracy,
the trend is for courts to apply the statute of limitations from state law.3 The Third
Circuit concluded that the Pennsylvania state piracy statute “mirror[s] . . . the
[Cable Act].” Kingvision, 366 F.3d at 224. It analyzed the remedial structures and
scope of each statute in order to conclude that it “is the closer fit the Supreme Court
contemplated as the appropriate source from which to borrow a statute of
limitations.” Id. at 225 (quotations omitted). See also DirecTV, 545 F.3d at 848-49.
The Illinois Cable Piracy Act’s Coverage and Remedies
Like the Pennsylvania Cable Piracy Act, the Illinois Cable Piracy Act
parallels the federal Cable Act. First, the ICPA covers the same subject matter as
the Cable Act.
Under the ICPA, “[a] person commits theft of communication
services when he or she knowingly . . . obtains or uses a communication service
without the authorization of, or compensation paid, to the communication service
provider.” 720 Ill. Comp. Stat. 5/16-18(b). Communications services include
When a court in the Northern District of Illinois concluded that the Copyright
Act’s statute of limitations applied to the Cable Act, it did not have the benefit of
considering the Illinois Cable Piracy Act, which was passed three years later, in
2003. See Kingvision, 98 F. Supp. 2d at 964; 720 Ill. Comp. Stat. 5/16-19 (repealed
2012).
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transmitions, signals, and services that are “lawfully provided by any . . . cable
television [or] satellite . . . network, system, facility, or technology.” 720 Ill. Comp.
Stat. 5/16-0.1. Therefore, it covers similar ground to 47 U.S.C. § 553(a), which
prohibits a person from intercepting or receiving “any communications service
offered over a cable system,” and 47 U.S.C. § 605(a), which prohibits a person from
“receiving [or] assisting in receiving” unauthorized satellite signals.
The ICPA also has a similar remedial scheme to 47 U.S.C. §§ 553 and 605, in
that it provides for criminal penalties, injunctive relief, actual damages, statutory
damages, punitive damages, and attorney’s fees. Under the ICPA, a violator may be
charged with a misdemeanor, and in some cases a felony. 720 Ill. Comp. Stat. 5/1618(c)(2). Additionally, “any person aggrieved” may bring a civil action and obtain
injunctive relief or damages. Id. at 5/16-18(h). Plaintiffs may elect to recover either
actual damages or statutory damages that range from $250 to $10,000 “for each
unlawful communication or access device involved.” Id. at 5/16-18(h)(3). Statutory
damages are determined by the court, as it considers just. Id. Finally, courts may
award punitive damages and attorney’s fees. Id. at 5/16-18(h)(2)(D),(E). Meanwhile,
§ 553 imposes criminal penalties that range from six months to five years and carry
fines of up to $100,000. 47 U.S.C. § 553(b)(1)-(3). Injunctive relief, actual damages,
and statutory damages are available in civil actions. Id. at § 553(c). The court may
award attorney’s fees to a prevailing aggrieved party, id. at § 553(c)(2)(C), and it
may “increase the award of damages . . . by an amount of not more than $50,000”
when it finds “that the violation was committed willfully and for purposes of
commercial advantage or private financial gain.” Id. at § 553(c)(3)(B). Finally, § 605
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imposes criminal penalties, 47 U.S.C. § 605(e)(1), (2). It also has a provision for a
private right of action that provides for injunctive relief, actual damages, statutory
damages, and punitive damages. Id. § 605(e)(3). Unlike the other two provisions, it
instructs that courts must provide prevailing aggrieved parties with attorney’s fees.
Id. § 605(e)(3)(B)(iii).
Based upon these similarities in coverage and remedies, the Court holds that
the ICPA is the most analogous law to the Cable Act.
The Illinois Cable Piracy Act’s Statute of Limitations
Like the Cable Act, the ICPA is also silent as to its statute of limitations, and
there is a paucity of Illinois’ case law on the subject. For that reason, Plaintiff urges
the court to simply stick with the Copyright Act’s statute of limitations and avoid
making the unwieldy determination of the ICPA’s actual limitation period. The
Court declines this invitation, as it must seek to apply the statute of limitations
from an analogous state statute before it looks to federal law. See Berger, 459 F.3d
at 808.4 It therefore must determine the ICPA’s statute of limitations.
To determine the ICPA’s statute of limitations, the Court must assume the
perspective of the Illinois Supreme Court and “attempt to ascertain the governing
substantive law.” Allstate Ins. Co. v. Menards, Inc., 285 F.3d 630, 637 (7th Cir.
2002). Here, the Court could not locate any Illinois’ decisions analyzing the ICPA.
The Ninth Circuit was presented with a similar problem in DirecTV, when it
borrowed the limitations period from the California Piracy Act. There, the
California Piracy Act did not have a statute of limitations of its own. See 545 F.3d at
849. The court concluded that it was “irrelevant” that the California Piracy Act
derived its statute of limitations from California’s catch-all provision. Id.
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However, the text of Illinois’ various catch-all statutes of limitations makes the
determination relatively straightforward.
There are three potential statutes of limitations that could apply to the ICPA.
The first provides a five-year limitation for, among others, “all civil actions not
otherwise provided for.” 735 Ill. Comp. Stat. 5/13-205. The second provides a two
year limitation for, among others, “a statutory penalty.” 735 Ill. Comp. Stat. 5/13202. And the third provides for a shorter statute of limitations for criminal
penalties. 720 Ill. Comp. Stat. 5/3-5.
Here, where the ICPA expressly provides for a cause of action in civil court
that is separate and distinct from its provision establishing criminal penalties, it
would be baffling to apply a statute of limitations for criminal prosecutions. See 720
Ill. Comp. Stat. 5/16-18(c), (h); see also Russian Media Group, LLC v. Cable
America, Inc., No. 06 C 3578, 2008 WL 360692, at *2 (N.D. Ill. Feb. 7, 2008).
Therefore the Court declines to apply the shorter statute of limitations in 720 Ill.
Comp. Stat. 5/3-5.
Similarly, the Court declines to apply the two year limitation for a “statutory
penalty.” The Illinois Supreme Court has defined a statutory penalty as “(1)
impos[ing] automatic liability for a violation of its terms; (2) se[ting] forth a
predetermined amount of damages; and (3) impos[ing] damages without regard to
the actual damages suffered by the plaintiff.” Landis v. Marc Realty, LLC, 919
N.E.2d 300, 307 (Ill. 2009)(internal citations omitted).
In this case, the structure of the ICPA counsels against characterizing
statutory
damages
as
statutory
penalties.
15
Although
statutory
damages
contemplated by the ICPA do share some characteristics in common with statutory
penalties, the fact that the statute grants the judge discretion in awarding them
and the fact that they exist as an alternative to actual damages convinces the Court
that they are not statutory penalties.
Statutory damages are similar to statutory penalties in two ways. First,
statutory damages are automatic. See Landis, 919 N.E.2d at 307. The statute
instructs that a party “may recover . . . an award of statutory damages of not less
than $250.” 720 Ill. Comp. Stat. 5/16-18(h)(3)(B). Second, by the statute’s terms,
statutory damages may be imposed without regard to actual damages because they
are an alternative to actual damages. See Landis, 919 N.E. 2d at 307, 720 Ill. Comp.
Stat. 5/16-18(h)(3)(A), (B).
However, in spite of the fact that the statute sets a range of available
statutory damages, the Court does not find that it sets forth “a predetermined
amount of damages.” See Landis, 919 N.E.2d at 307. The statute allows the court to
determine statutory damages as it considers just. 720 Ill. Comp. Stat. 5/1618(h)(3)(B). Therefore the amount of statutory damages is hardly predetermined or
based on a formula. Rather, it is dependent on the facts and equities of a case as
determined by a judge. See id.
Both as part of the statute’s structure and in practical application, statutory
damages are meant to stand in for remedial actual damages. Plaintiffs may elect to
pursue statutory damages rather than actual damages when it is difficult to prove
or quantify actual damages, but the statute gives the judge the power to
approximate what they may be. See id. See also Boom Town Saloon, Inc., 98 F.
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Supp. 2d 958 at 967 (observing that courts “routinely attempt to tailor [statutory
damages] to provide some rough approximation of the plaintiff’s actual or
threatened losses.”). In fact, the First Circuit – the only appellate court to evaluate
the Cable Act’s statutory damages provision – held that statutory damages are
“merely an alternative to actual damages” and should be “based solely on the
estimated value of the services stolen, without consideration of other harms . . . or of
other policies favoring deterrence.” Charter Commc’ns Entm’t I, DST v. Burdulis,
460 F.3d 168, 181 (1st Cir. 2006). Because the ICPA is so similar to the Cable Act in
both coverage and remedial structure, the Court can comfortably analogize the First
Circuit’s holding to the ICPA and conclude that statutory damages are not statutory
penalties. See id.
This leaves the Court with the five year statute of limitations for “all civil
actions not otherwise provided for.” 735 Ill. Comp. Stat. 5/13-205. The ICPA
provides a civil cause of action, and it does not provide for damages. See 720 Ill.
Comp. Stat. 5/16-18(h)(3). Therefore, the Court holds that ICPA’s statute of
limitations is five years.
Because Plaintiff’s Complaint was filed well within a five-year window of
April 21, 2012, it is timely, and Defendants’ motion to dismiss on the basis of its
statute of limitations affirmative defense is denied.
CONCLUSION
For the forgoing reasons, Defendants Mooney’s Pub Inc. and Michelle Bruce’s
Motion to Dismiss (Doc. 4) is DENIED. This case is REFERRED to Magistrate
Judge Hawley for further pretrial proceedings. IT IS SO ORDERED.
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Entered this 24th day of September, 2014.
s/Joe B. McDade
JOE BILLY McDADE
United States Senior District Judge
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