Joe Hand Promotions Inc v. Matijevich et al

Filing 29

OPINION AND ORDER: For the reasons set forth in the Order, the Court hereby GRANTS in part and DENIES in part Plaintiff's 24 Motion for Summary Judgment. The Court DIRECTS the Clerk of Court to enter judgment in Plaintiff's favor on its § 605 claim against Defendant UDL, LLC. The Court also GRANTS in part and DENIES in part Defendant's 26 Cross-Motion for Summary Judgment. The Court DIRECTS the Clerk of Court to enter judgment in Defendant Matijevich's favor on a ll Plaintiff's claims. The Court also DIRECTS the Clerk of Court to enter judgment on Defendant UDL, LLC's favor on Plaintiff's § 553 claim. The Court ORDERS counsel for Defendants to file a brief concerning the appropriate amou nt of damages in this case, including any attorney fees he or opposing counsel may be entitled to, on or before 4/5/2017. The Court also ORDERS counsel for Plaintiff to file a reply, if any, by 4/19/2017. Signed by Magistrate Judge John E Martin on 3/22/2017. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
JOE HAND PROMOTIONS, INC.,
Plaintiff,

)
)
)
v.
)
)
ROBERT J. MATIJEVICH, individually
)
and d/b/a L.F. NORTONS, and UDL, LLC, )
d/b/a L.F. NORTONS.
)
Defendants.
)

CAUSE NO. 2:15-CV-93-JEM

OPINION AND ORDER
This matter is before the Court on Plaintiff’s Motion for Summary Judgment [DE 24], filed
by Plaintiff on July 25, 2016, and on Defendants’ Cross Motion for Summary Judgment [DE 26],
filed on August 1, 2016.1 Plaintiff filed a response to Defendants’ Cross Motion for Summary
Judgment on August 17, 2016. The parties did not file any other responses or replies, and the time
to do so has passed.
I.

Procedural Background

Plaintiff filed its Complaint on March 11, 2015, alleging that Defendants unlawfully
published a TV program to which Plaintiff had exclusive commercial distribution rights. On July
8, 2016, by written consent of the parties, this case was reassigned to the undersigned United States
Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this
case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c).

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Defendants filed their Cross Motion for Summary Judgment 7 days after the dispositive motions deadline.
Consequently, Plaintiff encourages the Court to treat the Cross Motion as a response and to automatically deny any
request that judgment be entered in Defendants’ favor. However, Plaintiff had notice of the arguments raised in
Defendants’ Cross Motion and ample time to respond – and did, in fact, respond. See Fed. R. Civ. P. 56(f). Accordingly,
in the interests of justice and judicial economy, the Court considers whether judgment in Defendants’ favor is
appropriate.

II.
`

Summary Judgment Standard

The Federal Rules of Civil Procedure mandate that motions for summary judgment be

granted “if the movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Rule 56 further requires the entry
of summary judgment, after adequate time for discovery, against a party “who fails to make a
showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (citing Fed. R. Civ. P. 56(c)). “[S]ummary judgment is appropriate – in fact, is mandated –
where there are no disputed issues of material fact and the movant must prevail as a matter of law.
In other words, the record must reveal that no reasonable jury could find for the non-moving party.”
Dempsey v. Atchison, Topeka, & Santa Fe Ry. Co., 16 F.3d 832, 836 (7th Cir. 1994) (citations and
quotations omitted). To demonstrate a genuine issue of fact, the nonmoving party “must do more
than simply show that there is some metaphysical doubt as to the material facts,” but must “come
forward with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed. R. Civ. P. 56(e)).
In viewing the facts presented on a motion for summary judgment, a court must construe all
facts in a light most favorable to the non-moving party and draw all legitimate inferences in favor
of that party. See Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986); Srail v. Vill. of Lisle, 588
F.3d 940, 948 (7th Cir. 2009); NLFC, Inc. v. Devcom Mid-Am., Inc., 45 F.3d 231, 234 (7th Cir.
1995). A court’s role is not to evaluate the weight of the evidence, to judge the credibility of
witnesses, or to determine the truth of the matter, but instead to determine whether there is a genuine
issue of triable fact. See Liberty Lobby, 477 U.S. at 249-50.

III.

Facts

The parties do not dispute the following facts. Plaintiff owned the exclusive commercial
distribution rights to a TV broadcast of Ultimate Fighting Championship 158: Georges St. Pierre
v. Nick Diaz, a series of mixed-martial-arts fights on March 16, 2013. Plaintiff sold licenses to
various commercial establishments, such as bars and restaurants, so that they could show UFC 158
publically.
Defendant UDL, LLC, and its officer, Defendant Robert J. Matijevich, own and operate L.F.
Nortons, a bar in Lake Station, Indiana. On March 16, 2013, Peter Skoubas, an L.F. Nortons patron,
brought his personal DIRECTV satellite box into the bar and asked that it be hooked up to the bar’s
TVs. Mr. Skoubas had paid to watch UFC 158 on pay-per-view through his DIRECTV box. Bar
staff plugged the box into the LF Nortons TV system, and at least one TV displayed UFC 158 while
several people were in the bar. None of Defendants nor Mr. Skoubas purchased a license from
Plaintiff to show UFC 158 in a commercial setting.
IV.

Analysis

For Defendants’ showing of UFC 158, Plaintiff asserts three claims: violation of 47 U.S.C.
§ 605 (unauthorized publication or use of communications), violation of § 47 U.S.C. 553
(unauthorized reception of cable service), and conversion. Plaintiff did not move for summary
judgment on the conversion claim, so the Court likewise does not address that claim.
A.

Sections 605 & 553

Sections 605 and 553 independently criminalize unlawful interceptions of cable
programming. Both sections provide a civil right of action to any “person aggrieved by” the
unlawful interceptions. 47 U.S.C. §§ 605(e)(3), 553(c).

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A threshold question, though, is whether Plaintiff may pursue relief under both sections.
Plaintiff argues that there is a “split of authority among the district courts as to whether an
interception may violate both 47 U.S.C. § 605 and 47 U.S.C. § 553.” Def. Mot. at 5 [DE 25].
However, “Congress intended for § 605 to apply to the unlawful interception of cable programming
transmitted through the air, while it intended for § 553 to apply to the unlawful interception of cable
programming while it is actually being transmitted over a cable system.” United States v. Norris,
88 F.3d 462, 469 (7th Cir. 1996).
Whether Defendants are liable under either § 605 or § 553, then, depends on how UFC 158
was transmitted – through the air or by cable. Although the parties provide no argument one way
or the other, Mr. Skoubas’s affidavit says that he purchased the pay-per-view rights to UFC 158
“through [his] satellite provider Direct TV” and that he took his “satellite box with [him] to LF
Nortons” on March 16 to watch the fights. Defendants do not dispute these facts. Accordingly, § 605
(protecting “over-the-air” communications) governs this case, not § 553 (protecting cable
communications). Miller, 88 F.3d at 468-69.
Section 605(a) provides, in relevant part:
No person receiving, assisting in receiving, transmitting, or assisting
in transmitting, any interstate or foreign communication by wire or
radio shall divulge or publish the existence, contents, substance,
purport, effect, or meaning thereof, except through authorized
channels of transmission or reception . . . . 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 the benefit of another not entitled thereto. No person
having received any intercepted radio communication or having
become acquainted with the contents, substance, purport, effect, or
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meaning of such communication (or any part thereof) knowing that
such communication was intercepted, shall divulge or publish the
existence, contents, substance, purport, effect, or meaning of such
communication (or any part thereof) or use such communication (or
any information contained therein) for his own benefit or for the
benefit of another not entitled thereto.
For this case’s purposes, then, § 605 is “generally interpreted to prohibit commercial establishments
from intercepting and broadcasting satellite and cable television programming.” J & J Sports Prods.,
Inc. v. Perez, No. 12-C-8256, 2014 WL 3805818, at *2 (N.D. Ill. Aug. 1, 2014) (citing United States
v. Norris, 88 F.3d 462 (7th Cir. 1996)).
Defendants raise two related arguments against § 605 liability. Defendants argue that
showing UFC 158 in the bar was an “authorized” publishing and outside § 605’s scope because Mr.
Skoubas paid to legally watch the fights on his DIRECTV box. Defendants also argue that they did
not unlawfully “intercept” the UFC 158 broadcast as that term is used in § 605. This argument, too,
relies on Mr. Skoubas’s payment to watch UFC 158 on his personal DIRECTV box.
The first sentence of § 605 prohibits “receiving” or “assisting in receiving” a protected
communication, and prohibits publishing the communication “except through authorized channels
of transmission of reception.” See also Nat’l Satellite Sports, Inc. v. Eliadis, Inc., 235 F.3d 900, 91517 (6th Cir. 2001). As several other courts have found, “where a programming was obtained through
a residential account and then divulged in a commercial setting . . . a violation of § 605 occurred
regardless of the defendant’s intent or knowledge.” DirectTV v. Spina, No. 1:15-CV-104, 2016 U.S.
Dist. LEXIS 116235, at *58-59 (S.D. Ind. Aug. 30, 2016) (collecting cases).
At the very least, Defendants assisted Mr. Skoubas in receiving UFC 158 and published it
through their TV system, and Plaintiff did not authorize that use. See id. That Mr. Skoubas
contracted with DIRECTV for personal use of the UFC 158 broadcast does not mean he was
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authorized to publish UFC 158 in a commercial setting – only Plaintiff could license out that right,
and it did not in this case. See id. at *46 (“Under sentence one of § 605, a plaintiff need not show
that the defendant was not authorized to receive the transmission, but need only show that the
divulgence of the transmission was unauthorized.”) (citations omitted).
Accordingly, summary judgment in Plaintiff’s favor on its § 605 claim is appropriate. See
47 U.S.C. § 605(a); Spina, 2016 U.S. Dist. LEXIS 116235, at *59. Furthermore, because Plaintiff
cannot simultaneously pursue its claims under § 553, as discussed above, summary judgment in
Defendants’ favor on that claim is appropriate.
B.

Individual Liability

Defendants contend that Defendant Matijevich cannot be held individually liable in this case.
Defendant Matijevich was the registered agent for Defendant UDL, LLC, and was the “president
of UDL as the owner of LF Nortons” when UFC 158 was shown in the bar. Matijevich Affidavit at
4-5 [DE 6].
The United States Court of Appeals for the Seventh Circuit “has not adopted a specific test”
for determining individual liability under § 605. J&J Sports Prods. v. La Pica #3 LLC, No. 15-CV590-JPS, 2016 U.S. Dist. LEXIS 47274, at *7 (E.D. Wis. April 7, 2016). However, to assess
individual liability under § 605, many courts follow – and the parties urge this Court to follow – a
copyright test for vicarious liability as approved by the United States Court of Appeals for the
Second Circuit in Softel, Inc. v. Dragon Medical & Scientific Communications, 118 F.3d 955, 971
(2d Cir. 1997). See La Pica #3, 2016 U.S. Dist. LEXIS 47274, at *7 (collecting cases). Under the
Softel test, an individual may be liable where the individual “(1) has a right and ability to supervise
violations; and (2) possesses an obvious and direct financial interest in the misconduct.” La Pica #3,

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2016 U.S. Dist. LEXIS 47274, at * 7.
Plaintiff cites multiple district court cases for the proposition that any company owner or
officer – by the simple fact that they are an owner or officer – has the quality of control and the
financial interest necessary for individual liability. See, e.g., Zuffa v. Trappey, No. 11-0006, 2012
U.S. Dist. LEXIS 39375, at *13-14 (W.D. La. March 22, 2012) (“By admitting that they are
‘officers, directors, shareholders, and/or principals’ of the Fieldhouse, Trappey and Babineaux
concede the requisite control and financial interest necessary to establish their vicarious liability for
the Fieldhouse’s showing of the Broadcast.”); see also Joe Hand Promotions, Inc. v. Rizzi, No. 122526, 2013 U.S. Dist. LEXIS 170163, *12 (W.D. Tenn. Dec. 3, 2013); DIRECTV, Inc. v. Cibulka,
No. 1:11-CV-231, 2011 U.S. Dist. LEXIS 83437, at *4 (M.D. Pa. July 29, 2011).
These check-a-box holdings, though, are inconsistent with the Softel test. In fact, the Softel
court came to the opposite conclusion about individual liability on similar facts, holding that an
individual defendant’s status as president of a company and a shareholder of that company at the
time of the infringing conduct was insufficient to warrant individual liability. Softel, 118 F.3d at
971-72. The Softel court wrote:
The only evidence that Softel adduced prior to the [lower] court’s
ruling relating to the issue of Hodge’s supervisory capacities and
financial interests was that Hodge was the president of Dragon and
a shareholder. The evidence is too attenuated to establish a
sufficiently “direct” financial interest in the exploitation of the
copyrighted materials.
Id.
The agreed facts in this case similarly do not establish a “direct” financial connection
between Defendant Matijevich’s ownership interest and showing UFC 158 in LF Nortons.
Furthermore, Defendant Matijevich was not present when Mr. Skoubas brought his DIRECTV box
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into LF Nortons, and he did not know that Mr. Skoubas was doing so. More importantly, Plaintiff
does not contest Defendant Matijevich’s affidavit that says he was “not directly involved in the day
to day activities of LF Nortons.” Affidavit of Def. at 1 [DE 26-6].
Plaintiff argues, “Since Matijevich possessed the ownership interest in the Defendant
establishment, he had the right and ability to supervise and a financial interest and individual
liability is appropriate.” Def. Resp. at 8 [DE 28]. While an “individual defendant who has the right
and ability to supervise the violations and a strong financial interest in the activity may be liable
under” § 605, “in order to show individual liability, allegations of ownership of the establishment,
without more, are insufficient.” Joe Hand Promotions, Inc. v. Sharp, 885 F. Supp. 2d 953, 957 (D.
Minn. 2012) (quoting J&J Sports Prods., Inc. v. Santillan, No. 1:11-cv-1141, 2012 WL 2861378,
at *2 (M.D.N.C. July 11, 2012)).
The undisputed facts show that Defendant Matijevich did not have a sufficiently direct
financial interest in the showing of UFC 158 or the supervisory capacity necessary to warrant
individual liability. Accordingly, Defendant Matijevich cannot be held individually liable for
Plaintiff’s § 605 claim and summary judgment in his favor is appropriate. See Celotex, 477 U.S. at
322 (1986) (citing Fed. R. Civ. P. 56(c)).
C.

Damages

Because Defendants did not address the issue of damages in their brief, the Court orders
them to brief that issue, as discussed below, and grants time for Plaintiff to reply.

V.

Conclusion

Consistent with the foregoing discussion, the Court hereby GRANTS in part and DENIES

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in part Plaintiff’s Motion for Summary Judgment [DE 24]. The Court DIRECTS the Clerk of Court
to enter judgment in Plaintiff’s favor on its § 605 claim against Defendant UDL, LLC.
The Court also GRANTS in part and DENIES in part Defendants’ Cross-Motion for
Summary Judgment [DE 26]. The Court DIRECTS the Clerk of Court to enter judgment in
Defendant Matijevich’s favor on all Plaintiff’s claims. The Court also DIRECTS the Clerk of Court
to enter judgment in Defendant UDL, LLC’s favor on Plaintiff’s § 553 claim.
The Court ORDERS counsel for Defendants to file a brief concerning the appropriate
amount of damages in this case, including any attorney fees he or opposing counsel may be entitled
to, on or before April 5, 2017. The Court also ORDERS counsel for Plaintiff to file a reply, if any,
by April 19, 2017.
SO ORDERED this 22nd day of March, 2017.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc:

All counsel of record

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