G&G Closed Circuit Events, LLC v. Aguirre et al
Filing
24
OPINION AND ORDER DISMISSING WITHOUT PREJUDICE, all claims against Defendant Beatriz Zarate; GRANTING 22 Plaintiff's Motion for Default Judgment; The clerk is directed to enter final judgment in favor of Plaintiff G & G Closed Circuit Events, LLC and against defendants Juan C. Aguirre, Graciela Valles, and Taqueria Los Gallos, Inc. jointly and severally in the amount of $6,287. Signed by Judge Philip P Simon on 6/8/17. (mlc)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
G & G CLOSED CIRCUIT EVENTS, LLC
Plaintiff,
v.
JUAN C. AGUIRRE, INDIVIDUALLY
AND D/B/A TAQUERIA LOS GALLOS;
BEATRIZ ZARATE, INDIVIDUALLY
AND D/B/A TAQUERIA LOS GALLOS;
GRACIELA VALLES, INDIVIDUALLY )
AND D/B/A TAQUERIA LOS GALLOS;
AND TAQUERIA LOS GALLOS, INC.,
AN UNKNOWN BUSINESS ENTITY,
D/B/A TAQUERIA LOS GALLOS,
Defendants.
)
)
)
)
) CAUSE NO. 3:14-CV-1884-PPS-MGG
)
)
)
)
)
)
)
)
)
)
)
OPINION AND ORDER
Plaintiff G & G Closed Circuit Events, LLC seeks a judgment by default against
defendants Juan C. Aguirre, Graciela Valles, and Taqueria Los Gallos, Inc. [DE 22.] G
& G was the exclusive nationwide distributor of a pay-per-view broadcast of “Knockout
Kings: Canelo Alvarez v. Josesito Lopez Championship Fight Program,” televised on
Saturday, September 15, 2012. [DE 1 at ¶9.] G & G filed a complaint with this court on
September 11, 2014 alleging that the defendants pirated the telecast of the fight. [Id. at
¶12.] The Defendants failed to serve an answer or otherwise defend this lawsuit, so G
& G moved for an entry of default, DE 18, and the clerk entered default pursuant to
Federal Rule of Civil Procedure 55(a), DE 19. G & G now moves for default judgment
and provides affidavits to support its claims for damages, costs, and attorney’s fees.
[DE 22.]
Background
According the complaint, on Saturday, September 15, 2012, the Defendants or
their employees unlawfully exhibited “Knockout Kings: Canelo Alvarez v. Josesito
Lopez Championship Fight Program” at Taqueria Los Gallos operating at 800 West
Market Street, Logansport, Indiana. [DE 1 at ¶¶7, 9, 12.] According to the liquor license
for Taqueria Los Gallos, attached as an exhibit to the motion for default judgment,
Aguirre and Valles are the President and Secretary of Taqueria Los Gallos, Inc.,
respectively, which is an owner and/or operator of Taqueria Los Gallos. [DE 22-1 at
¶¶7, 10.] G & G had exclusive commercial nationwide television distribution rights to
the program and spent money promoting and transmitting it to establishments in
Indiana. [DE 1 at ¶¶9-10.] Taqueria Los Gallos did not pay for this right, showing the
program for the purpose of commercial advantage or private financial gain with full
knowledge that the program wasn’t to be intercepted, received, or exhibited without G
& G’s authorization. [Id. ¶12.] Consequently, G & G contends that the Defendants are
liable under the Federal Communications Act of 1934 (47 U.S.C. § 605), the Cable &
Television Consumer Protection and Competition Act of 1992 (47 U.S.C. § 553), and a
state-law claim of conversion.
Discussion
Because the clerk entered default against the Defendants, I take G & G’s factual
allegations relating to liability as true. FMC Corp. v. Varonos, 892 F.2d 1308, 1310 (7th
2
Cir. 1990) (citing Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323
(7th Cir. 1983)). If those factual allegations are sufficient to establish G & G’s claims,
then I may enter default judgment against the defendants. See Black v. Lane, 22 F.3d
1395, 1407 (7th Cir. 1994).
I will start out by noting that the complaint contains allegations against Beatriz
Zarate, individually and doing business as Taqueria Los Gallos. [DE 1.] G & G,
however, has failed to serve Zarate. A failure to have process issued and service made
within 90 days from the filing of the lawsuit may result in dismissal of the action,
without prejudice, for failure to complete process pursuant to Federal Rule of Civil
Procedure 4(m). On September 30, 2015, the Clerk of Court warned G & G of the
potential dismissal. [DE 12.] A year and a half later, Zarate still has not been served
and has not been voluntarily dismissed. For these reasons, I now dismiss all claims
against Zarate without prejudice.
Turning to Counts I and II of the complaint, 47 U.S.C. § 605, et seq. and 47 U.S.C.
§ 553, et seq. both provide G & G with a private right of action in a United States District
Court against the Defendants for their interception of G & G’s program without
authorization. Whether the Defendants violated Section 605 or Section 553 depends on
whether the Defendants intercepted the program from a satellite or a cable
transmission. See 47 U.S.C. § 553(a)(1); 47 U.S.C. § 605(b). There are sufficient factual
allegations in G & G’s complaint, taken as true, to establish that the Defendants
intercepted the program without authorization—Aguirre, Valles, and Taqueria Los
3
Gallos willfully showed the program on September 15, 2012, its broadcasting date,
without G & G’s authorization, DE 1 ¶12, but there is no way of knowing how the
Defendants intercepted the program.
Where a defendant’s default prohibits discovery on whether the broadcast was
intercepted over cable or satellite, courts allow recovery under Section 605. See Joe Hand
Promotions, Inc. v. Chapman, No. 2:15_CV-460-PPS, 2016 WL 3881121, at *1 (N.D. Ind.,
Jul. 18, 2016); Joe Hand Promotions, Inc. v. L.A. Moon LLC, No. 12-CV-446-WMC, 2013 WL
633572, at *1 (W.D. Wis. Feb. 20, 2013) (allowing recovery under Section 605 in the
absence of evidence that defendant in default intercepted plaintiff’s broadcast over
satellite); Time Warner Cable v. Googies Luncheonette, Inc., 77 F. Supp. 2d 485, 489
(S.D.N.Y. 1999) (“Where a defendant is liable under both § 553 and § 605, a plaintiff is
entitled to have damages awarded under 605 which provides greater recovery.”) In the
end, the Defendants’ failure to show up to court to defend the lawsuit, which has
prevented discovery on this issue, won’t cause G & G to suffer any prejudice. See J & J
Sports Prods., Inc. v. Estrada, No. 14 C 2518, 2014 WL 2609751, at *2 (N.D. Ill. June 11,
2014). In fact, G & G acknowledges in its motion for default judgment that it may only
recover damages under one of these statutes. [DE 22 at 6.] I will base the Defendants’
liability in default on Count I under Section 605, and dismiss Count II without
prejudice.
Additionally, Aguirre and Valles are only liable in their individual capacity if
they “had a right and ability to supervise” the violations and if they “had a direct
4
financial interest” in such activities. See J & J Sports Prods., Inc. v. Ziggy’s Bar & Grill,
Inc., No. 15-11585, 2015 WL 7567505, at *4 (E.D. Mich. Nov. 25, 2015); J & J Sports Prods.,
Inc. v. Ribeiro, 562 F. Supp. 2d 498, 501 (S.D.N.Y. 2008). Aguirre and Valles are listed as
officers of Taqueria Los Gallos, Inc. in Taqueria Los Gallos’ liquor license. This is
enough to plausibly suggest that, as officers of the entity that owns and/or operates
Taqueria Los Gallos, Aguirre and Valles both had a right and ability to supervise the
violations and had a direct financial interest in those violations. Thus, I find all the
Defendants liable under Count I of complaint.
As for Count III, even if G & G sufficiently alleged conversion under Indiana law,
any damages for conversion would just be duplicative of those under Sections 605 or
553 and should, therefore, be precluded. See E.E.O.C. v. Waffle House, Inc., 534 U.S.279,
297 (2002) (“[T]he courts can and should preclude double recovery.” (quotation
omitted)). Other courts confronting this exact situation have declined to award
damages for conversion. See J & J Sports Prods., Inc. v. McCausland, No. 1:10-CV-01564TWP, 2012 WL 113786, at *4 (S.D. Ind. Jan. 13, 2012); Time Warner Cable v. Googies
Luncheonette, Inc., 77 F. Supp. 2d 485, 491 (S.D.N.Y. 1999) (“[A]n award under [common
law] claims would be duplicative of that under 47 U.S.C. § 605 [and] would violate the
general principle that precludes double recovery.” (quotation omitted)). In its
complaint, G & G requests compensatory damages for conversion in addition to costs
5
and reasonable attorney’s fees.1 [DE 1 at 7.] As I will discuss below, an award of
damages under Section 605 covers these bases, so a finding of liability on Count III is
unnecessary.
Damages
While G & G can plead in the alternative, it can’t simultaneously pursue relief
under Sections 605 and 553 in this circumstance. See J & J Sports Prods., Inc. v.
McCausland, No. 1:10-CV-01564-TWP, 2012 WL 113786, at *2 (S.D. Ind. Jan. 13, 2012).
But as I mentioned before, no matter which federal statute prohibiting signal piracy
applies in this case, the damages I will award to G & G comport with both statutes.
Because the process for awarding damages is nearly identical under both statutes,
compare 47 U.S.C. § 605(e) with 47 U.S.C. § 553(c), and because Section 605 allows for
greater recovery, I will award G & G reasonable and just damages under Section 605.
The statute permits a minimum of $1,000 to a maximum of $10,000 in statutory damages
within the court’s discretion. 47 U.S.C. § 605(e)(3)(C)(i)(II). It also allows for enhanced
damages for willful violations under Section 605(e)(3)(C)(ii) and for costs and
reasonable attorney’s fees under Section 605(e)(3)(B)(iii).
In assessing statutory damages, courts in the Seventh Circuit diverge. Some
courts calculate damages based on the plaintiff’s “rate card,” or what the plaintiff
would have charged the defendant based on the establishment’s occupancy capacity.
G & G has not requested any damages for conversion in its Proposed Default
Judgment. [DE 22-6.]
1
6
See, e.g., J & J Sports Prods., Inc. v. Estrada, No. 14 C 2518, 2014 WL 2609751, at *3 (N.D.
Ill. June 11, 2014). Other courts award damages based on the number of patrons present
during the violation multiplied by a set sum, typically when the plaintiff doesn’t
provide a rate card. See, e.g., That’s Entertainment, Inc. v. Old Bridge Tavern, No. 94 C
02612, 1996 WL 148045 (N.D. Ill. Mar. 28, 1996) (awarding $55 per patron where plaintiff
didn’t provide a rate card); see also J & J Sports Prods., Inc. v. Homestyle Restaurant Group,
LLC, No. 13-CV-506, 2014 WL 4072132, at *3–4 (E.D. Wis. Aug. 15, 2014) (awarding $80
per patron to account for inflation since 1996 where plaintiff didn’t provide rate card).
G & G provided the court with the affidavit of an investigator, Michael
Anderson, that it hired to discover the Defendants’ violation. [DE 22-1.] Anderson says
that he entered Taqueria Los Gallos at 11:20 pm on September 15, 2012 and observed
that Taqueria Los Gallos was displaying the program. [Id. at 1.] He was not charged a
cover. [Id. at 2.] Anderson says that he counted approximately 70 patrons inside the
establishment and noticed that there were 6 televisions or monitors for viewing by
patrons and 5 were displaying the program. [Id. at 1, 3.] One of the televisions was a
big screen in front of which there were approximately 40 chairs which appeared to be
placed for viewing the program. [Id. at 3-4.] Anderson says that there were two
promotional posters in the bar promoting the program. [Id. at 2.] G & G also provided
its rate chart, which lists a price of $1,200 for establishments with minimum seating of 0100. [DE 22-2 at 10.]
G & G requests damages in the amount of $42,687, representing $10,000 in
7
statutory damages, $30,000 in enhanced damages (statutory damages multiplied by a
factor of three to reflect enhanced damages available under Sections 605 and 553), and
$580 in costs and $2,107 in attorney’s fees. [DE 22 at 10-11.] G & G requests $10,000
because it is the maximum statutory damages award under Section 605, but provides no
reason at arriving at this number other than asserting that it is impossible to calculate
the full extent of its lost profits and damages sustained by it. [DE 22 at 8.] Because G &
G has provided its rate chart for the program and an affidavit approximating Taqueria
Los Gallos’ seating, I will award G & G statutory damages in the amount of $1,200.
Turning to consideration of enhanced damages, Section 605(e)(3)(C)(ii) allows me
to increase the statutory damages “by an amount of not more than $100,000 for each
violation” if I find that “the violation was committed willfully and for purposes of
direct or indirect commercial advantage or private financial gain.” The Defendants, in
failing to answer G & G’s complaint, admitted to willfully intercepting the program for
commercial advantage or private financial gain. [See DE 1 ¶12.] Furthermore, G & G
also provided an affidavit from its President indicating that G & G’s programming
“cannot be mistakenly, innocently, or accidentally intercepted,”DE 22-2 at 3, in addition
to the Anderson affidavit establishing that 70 patrons were present during the violation,
DE 22-1 at 1. Based on the record, I find that the Defendants willfully committed the
violation for the purpose of direct commercial advantage or private financial gain.
Awarding statutory damages according to G & G’s rate chart without any
enhancement would only compensate G & G for its subscription loss, “not fully
8
divest the defendants of any profits derived from unlawfully exhibiting the program.”
Estrada, 2014 WL 2609751, at *3. Courts consider a range of factors in setting enhanced
damages, including: “(1) the number of violations; (2) defendant’s unlawful monetary
gains; (3) plaintiff’s actual damages; (4) whether defendant advertised for the event; and
(5) whether defendant collected a cover charge on the night of the event.” J & J Sports
Prods., Inc. v. McCausland, No. 1:10-CV-01564-TWP, 2012 WL 113786, at *4 (S.D. Ind. Jan.
13, 2012) (citing Kingvision Pay-Per-View, Ltd. v. Rodriguez, 2003 WL 548891, at *2
(S.D.N.Y. Feb. 25, 2003)). Courts also consider the proximity of the establishment to an
urban area, the number of screens displaying the program, and “the deterrent effect of
the award, with an eye toward imposing an award that is substantial enough to
discourage future lawless conduct, but not so severe that it seriously impairs the
viability of the defendant’s business.” Id.
While the Defendants didn’t charge a cover on the night of the event, there is
evidence that Defendants advertised the program and displayed the program on five
screens and served approximately 70 patrons. I am most concerned with the need to
send a strong deterrent signal. I will not reward the Defendants’ failure to show up to
court. Their failure to appear means that they gave up the opportunity to explain how
an award of enhanced damages might impair the viability of their business. Thus I will
triple the statutory damages. See Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630,
639 (1981) (“The very idea of treble damages reveals an intent to punish past, and to
deter future, unlawful conduct.”). Tripling $1,200 results in a total of $3,600 in
9
enhanced damages.
G & G also requests costs and reasonable attorney’s fees, to which it is entitled
under 47 U.S.C. § 605(e)(3)(B)(iii). G & G has provided an affidavit from its attorney
and supporting documentation that sets costs at $580 and attorney’s fees at $2,107. [DE
22-4; DE 22-5.] After reviewing these materials, I find the costs and fees reasonable and
will add them to the enhanced statutory damages of $3,600, resulting in a total award of
$6,287.
Conclusion
For the reasons above, all claims against Defendant Beatriz Zarate are
DISMISSED WITHOUT PREJUDICE. In addition, Plaintiff G & G Closed Circuit
Events, LLC’s Renewed Motion for Default Judgment, DE 22, is GRANTED, and the
clerk is directed to enter final judgment in favor of Plaintiff G & G Closed Circuit
Events, LLC and against defendants Juan C. Aguirre, Graciela Valles, and Taqueria Los
Gallos, Inc. jointly and severally in the amount of $6,287.
SO ORDERED.
ENTERED: June 8, 2017.
_s/ Philip P. Simon________________
PHILIP P. SIMON, JUDGE
UNITED STATES DISTRICT COURT
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?