G&G Closed-Circuit Events, LLC. v. Castillo et al
Filing
423
MEMORANDUM Opinion and Order signed by the Honorable Edmond E. Chang. For the reasons stated in the Opinion, the Court denies Plaintiffs' motions for judgment as a matter of law and a new trial 398 417 . The Court awards Plaintiff $800 in statutory damages under 47 U.S.C. § 605(e)(3)(C)(iii). Plaintiff's Rule 50(a) motion 402 is terminate as moot because Plaintiff prevailed on the jury verdict. The filing at R. 401 appears to be a mistaken filing by Plaintiff of a motio n filed by the defense, so R. 401 is terminated. A separate AO-450 final judgment shall be entered. The status hearing of 09/26/2019 is vacated. The parties shall follow Local Rule 54.3 in litigating attorneys' fees and costs, with a motion noticed for presentment when they reach the step at Local Rule 54.3(f). Civil case terminated.Emailed notice(slb, )
Case: 1:14-cv-02073 Document #: 423 Filed: 08/05/19 Page 1 of 21 PageID #:6415
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
G&G CLOSED CIRCUIT EVENTS, LLC
Plaintiff,
v.
JAIME F. CASTILLO, et al.,
Defendants.
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No. 14-CV-02073
Judge Edmond E. Chang
MEMORANDUM OPINION AND ORDER
G&G Closed Circuit Events, LLC, a distributor of pay-per-view events, sued
Jaime Castillo, Maria Castillo, and their company, El Bajio Enterprises (for
convenience’s sake, collectively referred to as the Castillos), for illegally broadcasting
a boxing match in violation of 47 U.S.C. § 605.1 The case went to trial, where the jury
found in favor of G&G, but also found that the Castillos were not aware, and had no
reason to know, that they were violating Section 605 when they broadcast the fight.
The Castillos now move for judgment as a matter of law or, in the alternative, a new
trial. Both parties have also submitted briefing on damages, which is determined by
the court in these types of cases. For the reasons discussed below, the Castillos’
motions are denied, and the Court awards G&G $800 in statutory damages.
1This
Court has subject matter jurisdiction over the case under 28 U.S.C. § 1331.
Citations to the record are noted as “R.” followed by the docket number and page or paragraph
number.
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I. Background
In setting forth the facts in this post-trial setting, the evidence is interpreted
in G&G’s favor on liability, because G&G prevailed on that issue. On willfulness and
commercial advantage, however, the Castillos won, so the evidence on those issues is
read in their favor.
A. G&G
G&G was a commercial distributor of pay-per-view events, including special
sporting events, concerts, and boxing matches. Trial Tr. at 159:19-22. Founded in
2009, it worked with networks like Showtime and HBO to advertise, sell, and
distribute pay-per-view events to commercial accounts like bars, restaurants, and
nightclubs. Id. at 160:1-14. G&G had “exclusive rights” to the events it distributed,
meaning any commercial establishment that wanted to play the event needed to go
through G&G and pay them a licensing fee. Id. at 160:15-24. The fee varied based on
the capacity of the commercial establishment. Id. at 162:12-21. G&G in turn either
split that fee with the network or paid the network an up-front fee for the right to
distribute the program. Id. at 160:23-161:4. All that was for distribution at
commercial establishments; G&G has never acquired or sold rights for residential
distribution. Id. at 169:1-8.
G&G alleges that it owned the commercial-distribution rights to a boxing
match between Austin Trout and Saul Alvarez televised on April 20, 2013 (call it the
Program, for convenience’s sake). Trial Tr. at 555:13-17. G&G’s president, Nicholas
Gagliardi, testified that G&G had a “split deal” with Showtime for the Program—
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G&G kept 30% of money generated from selling the Program to commercial accounts,
and would send the remaining 70% back to Showtime. Id. at 161:17-24. Gagliardi
explained that G&G’s deals with Showtime were often set up in this way and were
historically arranged by Gagliardi’s brother, who “had been working with Showtime
for several years in doing distribution.” Id. at 161:17-21. Gagliardi also testified about
a “rate card” that G&G gave to its sales representatives for the Program. The card
showed that an establishment with a capacity of 0-100 people would need to pay $800
to play the Program. Id. at 164:8-165:14, 166:21-167:3. Included in this fee was the
cost to activate an account through either DirecTV or DishNetwork, because access
to those providers was required to show the Program. Id. at 167:7-13.
Gagliardi also testified that, in lieu of a formal written contract, G&G’s deals
with Showtime were typically discussed via email and phone. Trial Tr. at 170:19171:3. Despite the history of email communications, Gagliardi was unable to find
emails with Showtime negotiating the rights to the Program because his computer
had been corrupted, and he was not able to restore it. Id. at 171:4-10. But G&G was
able to present, at trial, the check it sent to Showtime after the Program was
broadcast, representing 70% of the total distribution sales, or $220,331. Id. at 172:7173:17. The check referenced the date of the Program on the memo line, and Gagliardi
testified that G&G sent the check to Showtime and that the company cashed it. Id.
at 173:18-174:4.
On top of its agreement with Showtime, G&G had a separate written
agreement with DirecTV, the satellite provider for the Program. Trial Tr. at 174:23-
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175:18. Gagliardi explained that the agreement required any commercial account
ordering the fight through DirecTV to purchase it through G&G. Id. at 178:22-179:4.
G&G presented the agreement—entitled Program Exhibition Agreement—at trial,
although the copy shown to the jury was signed only by Gagliardi on behalf of G&G.
Id. at 177:2-5, 181:14-24. Gagliardi explained that DirecTV would prepare and send
the agreements to him, and that the copy of the Program agreement he was able to
track down was the version he signed and returned to DirecTV, rather than the fully
executed version. Id. at 181:20-24, 183:2-9. Gagliardi clarified, though, that the two
parties had an executed agreement pursuant to which he paid DirecTV money to
broadcast the program. Id. at 182:3-9.
G&G also presented a document referred to as the domestic distribution rights
agreement. Trial Tr. at 182:10-12. Gagliardi explained that he likely provided this
document to G&G’s attorney and sales representatives because it explained that
Showtime had granted G&G “exclusive domestic closed-circuit distribution and
licensing rights” to the Program. Id. at 182:13-18, 183:19-184:17. Gagliardi testified
that G&G had commercial licensing agreements for the Program with Buffalo Wild
Wings, Hooters, Dave & Buster’s, and several other national chain restaurants, along
with other smaller businesses. Id. at 192:18-22.
Gagliardi also discussed the ways commercial customers are able to “steal” a
program, meaning broadcast the program without paying for it. He explained that
technology and streaming had made it much easier for businesses to broadcast payper-view programs without paying the requisite fee, and that this “has a great impact
4
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on [his] business.” Trial Tr. at 186:12-20. According to Gagliardi, every time a
commercial location pirates a broadcast, it has a ripple effect beyond that one
establishment—it discourages other establishments from purchasing because they
feel that it is not worth it if other nearby businesses are showing the same program
for free. Id. at 187:2-8. As a result, G&G hires investigators to locate businesses that
illegally broadcast their programs. Id. at 191:4-15.
B. La Peña
La Peña was a Chicago restaurant owned and operated by Jaime and Maria
Castillo. Trial Tr. at 345:23-346:1; 347:16-24. The Castillos opened the restaurant in
2001 after they bought the building in which La Peña is located. Id. at 346:2-12. In
addition to the restaurant on the first floor, the building has four apartments
upstairs, including the apartment where the Castillos live. Id. at 346:15-24. In 2013,
the Castillos had accounts with multiple cable providers. They had accounts for their
apartment with Comcast and Dish Network, as well as an account with DirecTV for
the restaurant. Id. at 350:24-351:23. Jaime testified that he was the one to set up all
of the accounts, including the DirecTV account for La Peña, which he opened in
November 2011. Id. at 351:9-352:3. Jaime testified that he believed (in his own mind)
that the DirecTV account was set up in La Peña’s name as a business account, but it
is undisputed that it was actually set up as a residential account in Jaime’s name. Id.
at 352:20-355:25.
For the entertainment of La Peña’s customers, the Castillos play different
types of music and also show sports and other programming on a number of
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televisions in the restaurant. Trial Tr. at 380:8-381:18. It is undisputed that on April
20, 2013, some La Peña employee played the Program on the televisions around the
bar in the restaurant. Id. at 384:2-10. Jaime testified that this happened only because
a customer came into La Peña and asked to watch the Program. Id. At trial, Jaime
could not remember what the customer looked like. Id. at 386:15-24. But at her
deposition, Maria testified that Jaime told her that the customer who asked to watch
the Program looked “Hispanic.” Id. at 487:22-489:12. In any event, as far as Gagliardi
knows, G&G never authorized La Peña to show the Program. Id. at 185:20-22.
On the night of the Program, a private investigator working for G&G’s
attorney—Aaron Lockner—was driving around Chicago looking for businesses that
were illegally broadcasting the Program. Trial Tr. at 261:19-262:12. Lockner received
a list of businesses that paid for the Program ahead of time, so he was “basically
hunt[ing] around and search[ing] around for places that were not on that list.” Id. at
262:15-18. Lockner was paid for his work based on the number of commercial
establishments he found in violation and reported on, meaning he was incentivized
to find as many violators as possible. Id. at 263:8-19. If he found violators, then his
job was not to ask them to turn off the Program, but rather to discreetly take pictures
and video of the broadcast as evidence of the violation. Id. at 265:15-266:17.
Lockner testified at trial that he noticed La Peña on the night of the Program,
because he could see, as he was driving by, a boxing match on the televisions inside.
Trial Tr. at 269:11-15. He then walked inside the restaurant where he saw four wallmounted televisions playing the Program. Id. at 278:14-19, 280:19-281:18. Lockner
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was able to catch some of the Program on his camcorder from inside the restaurant;
the video was played at trial. Id. at 289:5-290:15. He also read from the affidavit that
he wrote and executed; the affidavit’s content was based on the notes he took that
night. Id. at 278:14-19, 300:13-22. In the affidavit, Lockner explained that he watched
Rounds 4 and 5 of the fight; he estimated that the capacity of the restaurant was 120
people; and that he counted between 60 and 65 patrons in the restaurant. Id. at
282:18-283:12. After recording the video inside La Peña, Lockner walked out and took
additional video of the outside of the restaurant (that video too was played at trial).
Id. at 294:22-295:6; 298:5-15. In the video, it is possible to see a boxing match playing
on the TVs through the front window. Id. at 295:7-296:7.
At trial, Lockner testified that he did not ask anyone in La Peña to turn on the
Program because it was not “honest.” Trial Tr. at 296:13-24. Lockner also stated that
he does not speak Spanish, he is not of Spanish descent, and that he had long hair,
past his shoulders, in 2013. Id. at 279:20-23, 296:25-297:10. According to his affidavit,
Lockner was in La Peña for 10 minutes and then took the film outside on the sidewalk
for just another minute or two. Id. at 299:8-17, 300:10-12. He also testified that he
did not speak to anyone inside of La Peña, either customer or staff. Id. at 311:8-23.
C. Procedural History
Lockner’s affidavit eventually made its way to G&G’s attorney, Thomas Riley,
prompting Riley to send a letter to the Castillos outlining their alleged violations and
requesting a settlement. R. 178.1, Riley Ltrs. at 2. Riley sent three more letters
offering to settle with the Castillos, but they refused. Id. at 3-6. Finally, in March
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2014, G&G filed suit against the Castillos and their holding corporation, El Bajio
Enterprises, alleging violations of the Communications Act of 1934 (as amended), 47
U.S.C. § 605, and the Cable and Television Consumer Protection and Competition Act
of 1992, 47 U.S.C. § 553. R. 1, Compl. ¶ 1. The Castillos eventually filed counterclaims
against G&G, as well as DirecTV and Riley, alleging violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act and the federal Racketeer
Influenced and Corrupt Organizations Act. R. 178, Third. Am. Counterclaim.
In June 2018, the Court granted summary judgment to the Castillos on G&G’s
Section 553 claim but dismissed all of the Castillos’ counterclaims. R. 350, 6/20/18
Memo. Opinion and Order. The parties began trial on G&G’s remaining Section 605
claim in January 2019. After hearing four days of testimony and evidence, the jury
returned a liability verdict in favor of G&G, finding that G&G had the exclusive
commercial distribution rights to the Program and that the Castillos were not
entitled to show it in La Peña. R. 403, 1/10/19 Minute Entry. The jury also found that
(1) the Castillos did not act willfully or for the purposes of direct or indirect
commercial advantage or private financial gain; and (2) the Castillos were not aware
and had no reason to believe that their acts violated the law. Id.
II. Standard of Review and Standard on Damages
Under Rule 50(a) of the Federal Rules of Civil Procedure, a district court may
enter judgment against a party who has been fully heard on an issue during a jury
trial if “a reasonable jury would not have a legally sufficient evidentiary basis to find
for the party on that issue.” Fed. R. Civ. P. 50(a). The Court “must construe the facts
strictly in favor of the party that prevailed at trial.” Schandelmeier–Bartels v. Chi.
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Park Dist., 634 F.3d 372, 376 (7th Cir. 2011). “Although the court examines the
evidence to determine whether the jury's verdict was based on that evidence, the
court does not make credibility determinations or weigh the evidence.” Id. And the
Court “can strike a piece of evidence from its weighing process only if reasonable
persons could not believe it because it contradicts indisputable physical facts or laws.”
Mejia v. Cook County, Ill., 650 F.3d 631, 633 (7th Cir. 2011) (cleaned up).2 Put another
way, “discrepancies arising from impeachment, inconsistent prior statements, or the
existence of a motive” will not render testimony excludable. Whitehead v. Bond, 680
F.3d 919, 926 (7th Cir. 2012) (cleaned up).
A court may grant a motion for a new trial under Rule 59 if the verdict is
against the clear weight of the evidence or the trial was unfair to the moving party.
Fed. R. Civ. P. 59. “In passing on a motion for a new trial, the district court has the
power to get a general sense of the weight of the evidence, assessing the credibility of
the witnesses and the comparative strength of the facts put forth at trial.” Mejia, 650
F.3d at 633 (cleaned up). The district court, however, may not simply substitute its
judgment for the jury’s. “Since the credibility of witnesses is peculiarly for the jury,
it is an invasion of the jury's province to grant a new trial merely because the evidence
was sharply in conflict.” Whitehead, 680 F.3d at 928. The standard for granting a new
trial is, thus, relatively high and a motion requesting as much will only be granted
“when the record shows that the jury's verdict resulted in a miscarriage of justice or
2This
Opinion uses (cleaned up) to indicate that internal quotation marks, alterations,
and citaions have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations,
18 Journal of Appellate Practice and Process 143 (2017).
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where the verdict, on the record, cries out to be overturned or shocks our conscience.”
Id. at 927-28.
Finally, under Section 605(e)(3)(C)(i), an aggrieved party is entitled to either
actual damages suffered as a result of the violation and any profits of the violator
that are attributable to the violation, or statutory damages for each violation in a
sum not less than $1,000 or more than $10,000. 47 U.S.C. 605(e)(3)(C)(i). If statutory
damages are awarded, then district courts have discretion to decide the amount. 47
U.S.C. 605(e)(3)(C)(i)(II). In addition, Section 605(e)(3)(C)(iii) allows courts to reduce
damages awards where “the violator was not aware and had no reason to believe that
his acts constituted a violation of this section.” 47 U.S.C. § 605(e)(3)(C)(iii).
III. Analysis
A. Defendants’ Rule 50(b) Motion
The Castillos now move for judgment as a matter of law on the question of
whether G&G had the exclusive commercial rights to the Alvarez-Trout fight. R. 417,
Defs.’ Post-Trial Mots. at 2-9.3 As an initial matter, G&G argues that the Castillos
forfeited some of the arguments in their Rule 50(b) motion, because they failed to
make them in their pre-verdict Rule 50(a) motion. R. 419, Pl.’s Opp. at 5-6. G&G is
3Technically
speaking, the Castillos also have a Rule 50(a) motion pending before the
Court. R. 398, Def.s’ Rule 50(a) Mot. Typically, the issues addressed in a party’s post-verdict
motion mirror those addressed in its pre-verdict motion, because a post-verdict Rule 50(b)
motion “can be granted only on grounds advanced in the preverdict motion.” Fed. R. Civ. P.
50, Advisory Comm. Notes 2006 Am. The Castillos have abandoned one of their pre-verdict
arguments—that G&G failed to show the Castillos acted willfully—in their post-verdict
briefing, presumably because the jury ruled in their favor on that issue. Because the only
argument unique to the Rule 50(a) motion is moot, the Court will refer solely to the Rule
50(b) motion in this opinion, although the decision resolves both motions.
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correct that a post-verdict Rule 50(b) motion “can be granted only on grounds
advanced in the preverdict motion.” Fed. R. Civ. P. 50, Advisory Comm. Notes 2006
Am. In other words, “if a party raises a new argument in its Rule 50(b) motion that
was not presented in the Rule 50(a) motion, the non-moving party can properly
object.” Andy Mohr Truck Center, Inc. v. Volvo Trucks N. America, 869 F.3d 598, 605
(7th Cir, 2017).
Recently, though, the Seventh Circuit has drawn a distinction between
“grounds” for relief—which must be first articulated in a Rule 50(a) motion—and
“arguments in support” of those grounds—which can differ between the pre-verdict
and post-verdict motions. Andy Mohr Truck Center, Inc., 869 F.3d at 604-05 (“The
district court, however, understood Volvo as merely advancing a new argument in
support of a ground that appeared in its original 50(a) motion: that the evidence was
insufficient.”). Applying that distinction here, some of the Castillos’ “new” arguments
in their Rule 50(b) motion are not procedurally barred, because they amount to the
same thing as was argued in the pre-verdict motion—G&G presented insufficient
evidence that it had the exclusive commercial rights to the Program. This applies to
the Castillos’ arguments that there was insufficient evidence of an agreement with
Showtime and that the evidence presented on this topic was conflicting and
inconsistent. Defs.’ Post-Trial Mots. at 6-9.
But the other arguments advanced post-verdict—(1) G&G failed to establish
that they were an aggrieved party with proprietary rights (as opposed to establishing
an agreement with Showtime); (2) the jury needed specific instructions defining the
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terms “aggrieved party” and “proprietary rights;” and (3) the Court should have
looked to copyright law for those definitions—are all procedurally barred. Id. at 3-6.
These arguments fall outside of ground advanced in the Castillos’ Rule 50(a)
argument, that is, G&G presented “no evidence that Showtime acted in any way to
express a mutual and common purpose with G&G with a view of altering its rights
and obligations.” Defs.’ Rule 50(a) Mot. at 3. So these three arguments are forfeited.
On the preserved argument, the Castillos’ contention fails on the merits.
Although it is a close call, the jury here had a “legally sufficient evidentiary basis” to
find in favor of G&G on the question of whether G&G had exclusive rights to
distribute the Program. Whitehead, 680 F.3d at 925. The jury was free to credit
Gagliardi’s testimony that G&G had an agreement with Showtime that was specific
to the Program, even considering some of the modestly conflicting statements about
the relationship between the two entities. Id. (“[T]he court does not make credibility
determinations or weigh the evidence.”) (cleaned up). It was also free to consider the
additional evidence presented corroborating Gagliardi’s story—the G&G check made
out to Showtime, G&G’s agreement with DirecTV, and G&G’s rate card for the
Program. In particular, it would be odd for DirecTV, a sophisticated business, to enter
into the agreement with G&G unless G&G had exclusive commercial distribution
rights. Taken together, this evidence is enough for a reasonable juror to find that
G&G had the exclusive commercial distribution rights to broadcast the Program. The
Castillos’ motion for judgment as a matter of law is denied.
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B. Defendants’ Rule 59 Motion
The Castillos also move for a new trial under Rule 59, advancing several
arguments.4 Defs.’ Post-Trial Mots. at 9-15. The Court addresses them in turn.
1. “Aggrieved party” and “proprietary rights”
First, the Castillos argue that the Court erred when it failed to include and
define the terms “aggrieved party” and “proprietary rights” in its statement of the
case, jury instructions, or verdict form. Defs.’ Post-Trial Mots. at 10. This argument
fails. To begin, the Castillos never argued before or during trial that the case
statement (as distinct from the jury instructions) should include either the term
“aggrieved party” or “proprietary rights.” R. 365, Defs.’ Proposed PTO at 2; R. 390,
Defs.’ Mot. to Reconsider at 3. So that argument is procedurally barred. See
Christmas v. City of Chicago, 682 F.3d 632, 640 (7th Cir. 2012); Prod. Specialties Grp.,
Inc. v. Minsor Sys., Inc., 513 F.3d 695, 699 (7th Cir. 2008) (“A motion for a new trial
is not the appropriate place to raise for the first time arguments that could have been
brought earlier in the proceedings.”).
On the other hand, the Castillos did argue that the jury instructions should
define the terms “aggrieved party” and “proprietary rights,” while also proposing a
verdict form that at least asked the jurors to determine if G&G had “proprietary
4The
Castillos raised two arguments in a footnote: (1) “the Court improperly prevented
Plaintiff from effectively cross-examining Plaintiff’s only witness by sustaining objections
with no basis;” and (2) G&G made statements “without evidentiary support” during their
opening statement and closing argument. Defs.’ Post-Trial Mots. at 9. Because G&G
presented these arguments only in a cursory way and failed to substantively develop them,
they are forfeited. Evergreen Square of Cudahy v. Wisconsin Housing & Econ. Development
Authority, 848 F.3d 822, 829 (7th Cir. 2017).
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rights”—in those words—to the Program. See R. 365.6, Defs.’ Proposed Jury
Instructions at 6; R. 365.7, Defs.’ Proposed Verdict Form at 1. These proposals were
rejected, because the jury instructions as given accurately stated the law and did not
mislead the jury. U.S. v. Funds in the Amount of $100,12, 901 F.3d 758, 767 (7th Cir.
2018) (explaining that a movant must prove jury instructions failed to fairly and
accurately summarize the law and misled or confused the jury to warrant a new trial).
The jurors were asked to determine if G&G entered into an agreement with Showtime
for the exclusive rights to distribute the Program to commercial establishments. That
is just a non-legalese way of asking them to determine if G&G was an aggrieved party
with proprietary rights to the Program. By taking the question out of legalese, the
Court adhered to the Seventh’s Circuit guidance that, when “instructing laypersons
on the law, the judge should extract from the relevant legal sources the essential rules
or principles that the jury is to apply … and should state those rules and principles
in simple, everyday, nonlegalistic language.” Native American Arts, Inc. v. Waldron
Corp., 399 F.3d 871, 875 (7th Cir. 2005).
Even if it was error to remove the exact terms “aggrieved party” and
“proprietary rights,” though, there is nothing to suggest that the instructions as given
misled or confused the jury. To determine whether the instructions were “potentially
confusing or misleading,” the Court “examin[es] the instructions as a whole” to see “if
the correct message was conveyed to the jury reasonably well.” Lewis v. City of
Chicago Police Dep’t, 590 F.3d 427, 433 (7th Cir. 2009) (cleaned up). The jury was
instructed that G&G needed to prove it had “the exclusive commercial distribution
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right” to the Program, meaning it had to show that Showtime agreed to make G&G
the lone distributor of the Program to commercial establishments. There is no risk
that the jurors were misled into thinking that all G&G had to show was any type of
contract with Showtime, or some generalized, nebulous agreement between the
parties. Rather, the instructions clearly and accurately stated G&G’s burden of proof.
Likewise, the Court did not err when it decided against including the term
“proprietary rights” on the verdict form. The Seventh Circuit requires only that the
verdict form not be confusing or misleading to the jury. E.E.O.C. v. Mgmt. Hosp. of
Racine, Inc., 666 F.3d 422, 440 (7th Cir. 2012). “In evaluating whether a verdict form
is confusing or misleading, we consider the verdict form in light of the instructions
given to determine whether the jury had an understanding of the issues and its duty
to determine those issues.” Id. (cleaned up). The jury had that understanding here. It
was asked to determine if G&G had the exclusive commercial distribution rights to
the Program. R. 386, Verdict Form at 1. This is just another way of asking if G&G
had proprietary rights to the fight, with the added benefit of aligning the verdict form
with the instructions and the elements of the claim. So, a new trial is not warranted
based on the decision not to use the terms “proprietary rights” or “aggrieved party.”
2. Affirmative Defenses
Second, the Castillos make a series of arguments related to their alleged
affirmative defenses. The first argument is that the verdict form failed to account for
the possibility that Lockner asked Jaime to turn on the Program. Defs.’ Post-Trial
Mots. at 11. As already stated, the verdict form is evaluated along with the jury
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instructions to determine if the jury properly understood its responsibilities. The jury
instructions here clearly articulated the Castillos’ affirmative defense and its
potential effect on the verdict: “If Plaintiff’s investigator asked the Defendants to turn
on the Program, then the Defendants were entitled to show the Program.” R. 400,
Jury Instructions at 18. In other words, the instructions informed the jury that in
evaluating whether the Defendants were liable, they were to consider whether
Lockner asked a La Peña employee to turn on the fight. Contrary to the Castillos’
assertion that the absence of the affirmative defense from the verdict form calls the
entire verdict into question, Defs.’ Post-Trial Mot. at 11, the jury’s finding in favor of
G&G on liability means that the jury rejected this affirmative defense.
The Castillos make several additional arguments related to the jury
instructions and verdict form, but they are all meritless. The Castillos argue that the
jury was confused when the Court asked it if G&G proved that the Castillos were not
entitled to show the program. Defs.’ Post-Trial Mot. at 11. Contrary to the Castillos’
motion, there is nothing inherently wrong with asking the jury if plaintiff proved a
negative. Id. But, more importantly, the question was not confusing or misleading.
The pertinent question was whether the Castillos were entitled to show the program
or not. For G&G to win, it had to prove that the Castillos were not entitled to do so
by a preponderance of the evidence. The instruction clearly asks the jury whether
G&G proved that element. Nothing more is required of the verdict form.
The Castillos also assert that the verdict form failed to account for their
argument that they mistakenly believed they had a residential DirecTV account in
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La Peña. Defs.’ Post-Trial Mot. at 11-12. But the Castillos’ subjective belief about the
type of account used in La Peña has no bearing on the jury’s liability finding (as
distinct from damages), because Section 605 is a strict liability statute. See, e.g., J&J
Sports Productions, Inc. v. Dabrowski, 2015 WL 9304347, at *3 (N.D. Ill. 2015); Joe
Hand Promotions, Inc. v. Zani, 2013 WL 5526524, at *2 (N.D. Ill. Oct. 7, 2013).
Indeed, this subjective mistaken belief was relevant to the jury’s special finding that
the Castillos “were not aware and had no reason to believe” they were violating
Section 605. Because the jury found in favor of the Castillos on that issue, it is clear
that the jury was not confused by the absence of an explicit mention of DirecTV or
“residential account” on the verdict form.5
The Castillos make the similar argument that neither the jury instructions nor
the verdict form considered the possibility that a customer—other than Lockner—
may have asked Jaime to turn on the Program. Defs.’ Post-Trial Mot. at 12. This
argument is a nonstarter. As explained in the opinions and orders issued before the
trial, the Castillos escape liability only if Lockner asked them to turn on the Program,
because he was acting as G&G’s agent. R. 350, Summary Judgment Order; R. 377,
PTC Order at 3. If a random customer asked to turn the fight on, then strict liability
still applies. This alleged “affirmative defense” is no defense at all, and thus had no
place in the jury instructions or verdict form.
5The
Castillos mention that this affirmative defense is relevant to the damages
calculation. Defs.’ Post-Trial Mots. at 12. The Castillos are not wrong, but that does not mean
the Court was required to turn this defense into a special finding on the verdict form. Indeed,
because damages are determined by the Court, not the jury, there is no reason why the jurors
needed to address this argument in a special finding.
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3. Motions in Limine
The Castillos next argue that the Court abused its discretion when it granted
some of G&G’s motions in limine and denied some brought by the Castillos. Defs.’
Post-Trial Mots. at 13-14. The Castillos fail to reference specific motions in limine by
number or cite to the Court’s pre-trial conference orders in support of this argument.
R. 377, PTC Order; R. 380, Post-PTC Order. As far as one can tell, the Castillos take
issue with the decision to admit some evidence of their billing records from other
vendors, while excluding evidence of (1) G&G’s alleged racial profiling; (2)
Defendants’ dismissed counterclaims against G&G, Riley, and DirecTV; and (3) other
lawsuits brought against G&G by other commercial establishments. Defs.’ Post-Trial
Mots. at 13-14. The bases for these decisions are laid out in the orders issued before
the trial, but a brief summary is repeated here.
First, evidence of G&G’s alleged racial profiling was excluded because it was
not a valid defense to Section 605 liability and the Castillos failed to proffer evidence
sufficient to push the theory beyond speculation. PTC Order at 1-2. Second, exhibits
related to the Castillos’ counterclaims and suits brought against G&G by other
establishments were excluded as either inadmissible propensity evidence (the letters
from Riley, the twelve investigator affidavits, and the other lawsuits) or inadmissible
hearsay (the affidavit from Gabriela Padilla Rivera).6 Id. at 3-6. Finally, G&G’s
proffered evidence about La Peña’s other vendors was allowed because there was
6Some
evidence related to the Castillos’ suit against DirecTV was allowed at trial. PrePretrial Conference Order at 5-6. The Court excluded the only evidence related to the
Castillos’ assertion that DirecTV installed residential accounts in other commercial
establishments—the Rivera affidavit—as inadmissible hearsay. Id. at 6.
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some relevance to the invoices sent to the Castillos in light of the need for a special
finding on willfulness. Id. at 8-9. The invoices made it more likely that the Castillos
could discern between residential and commercial accounts. Id. It also is not clear
why the Castillos now seek to rehash this evidence. They convinced the jury that they
did not act willfully and were not aware they were violating Section 605. So excluding
this evidence would not have impacted the verdict—they won on this issue. In any
event, none of the decisions on the motions in limine led to an unfair trial, so there is
no need to retry the case.
4. Evidence of Agreement with Showtime
The Castillos’ final argument in support of their motion for a new trial is that
the jury’s finding that G&G had the exclusive commercial distribution rights to the
Program was against the manifest weight of the evidence. Defs.’ Post-Trial Mots. at
15. This argument is underdeveloped in the brief and, in any event, is meritless. As
explained earlier, there was sufficient evidence of an agreement between G&G and
Showtime, and the jury credited it against the defense cross-examinations and
arguments. The evidence—although not overwhelming—was not against the
manifest weight of the evidence. It is true that Gagliardi’s direct testimony standing
alone would have been a thin reed on which to rely. But the circumstantial evidence
buttressed the direct testimony. It is not likely that G&G would have put the effort
into marketing the Program and creating a rate card for its sales representatives
without exclusive commercial distribution rights. Nor would it cut a check for over
$200,000 to Showtime for no good reason. And the fact that DirecTV—a disinterested
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non-party and a sophisticated one at that—was willing to enter into an agreement
with G&G premised on the distribution rights is telling too. The jury finding for G&G
on liability was not against the manifest weight of the evidence.
C. Damages
With liability intact, the Court’s final duty in this case is to decide the amount
of statutory damages to award G&G. The parties disagree on the proper baseline
measure for the damages calculation. The Castillos argue that damages should be
calculated based on the licensing fee of $800. Defs.’ Post-Trial Mots. at 1. G&G argues
that damages should be calculated based on the number of patrons in La Peña the
night of the Program. R. 416, Pl.’s Damages Mot. at 6. The Castillos have the better
argument. “[C]ourts in this district have utilized the baseline method when that
information is available from a rate card.” J&J Sports Prods., Inc. v. Dabrowski, 2015
WL 9304347, at *6 (N.D. Ill. Dec. 22, 2015) (listing cases). That is true even when the
per-patron valuation is also attainable. Id.
G&G argues that the rate card approach is not applicable here, because
awarding the licensing fee does not fully divest the Castillos of any profits they may
have derived from unlawfully showing the Program. And, because enhanced damages
are not in play, there is no other way to do so. Pl.’s Damages Mot. at 5. But G&G
overlooks the impact of the jury’s finding under Section 605(e)(3)(C)(iii). The jury
determined that the Castillos were not aware, and had no reason to believe, that they
were violating Section 605 when the turned on the Program, so it is not appropriate
to divest them of all their potential profits. Here, on balance and absent misconduct
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that amounted to willfulness, the proper award is what it would have cost the
Castillos to lawfully show the Program. The Court thus awards $800 to G&G under
Section 605(e)(3)(C)(i)(II). Because the Court already factored in the jury’s special
finding under Section 605(e)(3)(C)(iii), the damages will not be reduced any further.
III. Conclusion
The Court denies the Castillos’ motions for judgment as a matter of law and a
new trial. The Court awards G&G $800 in statutory damages under 47 U.S.C.
§ 605(e)(3)(C)(iii). Final judgment shall be entered. The status hearing of September
26, 2019 is vacated.
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: August 5, 2019
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