J&J Sports Productions, Inc. v. Castro Corp. et al

Filing 17

MEMORANDUM OPINION (c/m to Defendant Castro Corporation 5/21/12 sat). Signed by Chief Judge Deborah K. Chasanow on 5/21/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
J & J SPORTS PRODUCTIONS, INC.
:
v.

:

Civil Action No. DKC 11-1599

:
CASTRO CORPORATION, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this case
involving alleged violations of the Communications Act of 1934
is a motion filed by Plaintiff J & J Sports Productions, Inc.,
for entry of default judgment.

(ECF No. 14).

The relevant

issues have been briefed and the court now rules pursuant to
Local Rule 105.6, no hearing being deemed necessary.

For the

reasons that follow, Plaintiff’s motion will be granted in part
and denied in part.
I.

Background
On June 10, 2011, Plaintiff J & J Sports Productions, Inc.,

commenced this action against Defendants Castro Corporation, t/a
El Puento de Oro Restaurant, and two of its principals, Ciro
Castro

and

Communications

Juan
Act

Castro,
of

1934,

alleging
as

violations

amended,

47

U.S.C.

of
§§

the
553

(unauthorized reception of cable service) and 605 (unauthorized
publication or use of communications), and the common law tort

of conversion.

The complaint recites that Plaintiff “paid for

and was thereafter granted the exclusive nationwide television
distribution rights to [] ‘The Battle of East and West’: Manny
Pacquiao v. Ricky Hatton, IBO Light Welterweight Championship
Fight Program[,] which telecast nationwide on Saturday, May 2,
2009”

(“the

original)).

Broadcast”).

(ECF

No.

1

¶

9

(emphasis

in

Plaintiff then entered into sublicensing agreements

with commercial establishments, such as bars and restaurants,
which purchased the rights to exhibit the Broadcast for their
patrons.
[the

Plaintiff alleges that, “[w]ith full knowledge that

Broadcast]

was

not

to

be

intercepted,

received

and

exhibited by entities unauthorized to do so, . . . [Defendants]
did unlawfully publish, divulge and exhibit [the Broadcast] . .
.

willfully

and

for

the

purposes

of

direct

commercial advantage or private financial gain.”

or

indirect

(Id. at ¶ 12).

Defendant Juan Castro was served with the complaint on July
12, 2011, and Defendants Ciro Castro and Castro Corporation were
served on July 28.

Suggestions of bankruptcy were subsequently

filed

individual

as

to

the

defendants

administratively closed as to them.

and

the

case

(ECF Nos. 12, 16).

was
The

corporate defendant, Castro Corporation, failed to respond to
the complaint within the requisite time period, and Plaintiff
moved for entry of default.

Shortly after the clerk entered

2

default (ECF No. 13), Plaintiff filed the pending motion for
entry of default judgment (ECF No. 14).1
II.

Analysis
Pursuant

to

Fed.R.Civ.P.

55(a),

“[w]hen

a

party

against

whom a judgment for affirmative relief is sought has failed to
plead

or

otherwise

affidavit

or

default.”

defend,

otherwise,

and

the

that

clerk

failure

must

enter

is

shown

the

by

party’s

Where a default has been previously entered by the

clerk and the complaint does not specify a certain amount of
damages,

the

plaintiff’s

court

may

application

enter
and

a

default

notice

to

pursuant to Fed.R.Civ.P. 55(b)(2).

judgment,

the

upon

defaulting

the

party,

A defendant’s default does

not automatically entitle the plaintiff to entry of a default
judgment; rather, that decision is left to the discretion of the
court.

See Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001).

The Fourth Circuit has a “strong policy” that “cases be decided
on their merits,” Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md.
2002) (citing United States v. Shaffer Equip. Co., 11 F.3d 450,
453 (4th Cir. 1993)), but default judgment may be appropriate
where a party is unresponsive.

1

See S.E.C. v. Lawbaugh, 359

Ciro Castro did not file his suggestion of bankruptcy
until after default was entered and Plaintiff had moved for
default
judgment
against
him.
Because
the
case
is
administratively closed as to him, Plaintiff’s motion will be
denied without prejudice as to this defendant.
3

F.Supp.2d 418, 421 (D.Md. 2005) (citing Jackson v. Beech, 636
F.2d 831, 836 (D.C. Cir. 1980)).
“Upon [entry of] default, the well-pled allegations in a
complaint as to liability are taken as true, but the allegations
as

to

damages

Fed.R.Civ.P.

are

54(c)

not.”
limits

Lawbaugh,
the

type

359

of

F.Supp.2d

judgment

at

that

422.

may

be

entered based on a party’s default: “A default judgment must not
differ in kind from, or exceed in amount, what is demanded in
the pleadings.”

Thus, where a complaint specifies the amount of

damages sought, the plaintiff is limited to entry of a default
judgment in that amount.

“[C]ourts have generally held that a

default judgment cannot award additional damages . . . because
the

defendant

damages

would

could
exceed

not

reasonably

that

amount.”

have

expected

In

re

that

Genesys

Technologies, Inc., 204 F.3d 124, 132 (4th Cir. 2000).

his
Data

Where a

complaint does not specify an amount, “the court is required to
make an independent determination of the sum to be awarded.”
Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (citing
S.E.C. v. Management Dynamics, Inc., 515 F.2d 801, 814 (2nd Cir.
1975); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2nd
Cir.

1981)).

While

the

court

may

hold

a

hearing

to

hear

evidence as to damages, it is not required to do so; it may rely
instead

on

“detailed

affidavits

determine the appropriate sum.”
4

or

documentary

evidence

to

Adkins, 180 F.Supp.2d at 17

(citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th
Cir. 1979)); see also Laborers’ District Council Pension, et al.
v. E.G.S., Inc., Civ. No. WDQ-09-3174, 2010 WL 1568595, at *3
(D.Md. Apr. 16, 2010) (“on default judgment, the Court may only
award

damages

without

a

hearing

if

the

record

supports

the

damages requested”).
In both the complaint and the motion for default judgment,
Plaintiff requests statutory damages of $100,000 for Defendant’s
violation of § 605 and $50,000 for the violation of § 553.
“Generally,

however,

plaintiffs

cannot

recover

under

both

statutes for the same conduct and courts allow for recovery
under § 605 as it provides for the greater recovery.”

J & J

Sports Productions, Inc. v. Quattrocche, Civil Action No. WMN09-CV-3420, 2010 WL 2302353, at *1 (D.Md. June 7, 2010) (citing
J & J Sports Productions, Inc. v. 291 Bar & Lounge, LLC, 648
F.Supp.2d 469 (E.D.N.Y. 2009); Kingvision Pay-Per-View, Ltd. v.
Las Reynas Restaurant, Inc., Civ. No. 4:07-67, 2007 WL 2700008,
at *1 (E.D.N.C. Sept. 11, 2007); Kingvision Pay-Per-View, Ltd.
v. Backman, 102 F.Supp.2d 1196, 1197 (N.D.Cal. 2000)).

“Courts

have similarly not allowed recovery for claims of conversion, as
they would not exceed those under §§ 553 or 605 and would result
in double-recovery.”

J & J Sports Productions, Inc. v. Castro

Corp., Civil Action No. 11-cv-00188-AW, 2011 WL 5244440, at *3
(D.Md. Nov. 1, 2011) (citing J & J Sports Productions, Inc. v.
5

J.R.’Z Neighborhood Sports Grille, Inc., Civ. No. 2:09-03141,
2010 WL 1838432, at *2 (D.S.C. 2010)).

Thus, Plaintiff may

recover, at most, $110,000, consisting of $10,000 in statutory
damages, the maximum allowable under § 605(e)(3)(C)(i)(II), and
$100,000

in

enhanced

damages,

the

maximum

amount

under

§

605(e)(3)(C)(ii).2
A. Statutory Damages
In Quattrocche, 2010 WL 2302353, at *2, Judge Nickerson set
forth the relevant considerations in the damages analysis under
§ 605(e)(3)(C)(i)(II):
Here, Plaintiff has elected an award of
statutory damages, which under 47 U.S.C. §
605(e)(3)(C)(i)(II) entitles Plaintiff to an
award “as the court considers just,” between
a range of $1000 to $10,000 for each
unauthorized reception and publication of a
radio communication by the defendants in
violation of section 605(a). Courts in this
Circuit have used two different approaches
to exercising [] discretion in awarding
damages under § 605(e)(3)(C)(i)(II).
The
first approach has two variations.
This
approach involves multiplying a certain
amount by either the number of patrons
observed in the defendant’s establishment at
the time the program was shown or by the
maximum occupancy of the establishment. Joe
Hand Promotions, Inc. v. Bougie, Inc., Civ.
No. 109-00590, 2010 WL 1790973, at *5
(E.D.Va. April 12, 2010) (patrons present);
[Kingvision Pay-Per-View, Ltd. v.] Admiral’s
2

While both provisions under § 605(e)(3)(C) are prescribed
by statute, for ease of exposition the court refers to the
damages amount under § 605(e)(3)(C)(i)(II) as “statutory
damages” and those under § 605(e)(3)(C)(ii) as “enhanced
damages.”
6

Anchor, 172 F.Supp.2d [810,] 812 [S.D.W.Va.
2001] (maximum occupancy); Entertainment by
J & J, Inc. v. Gridiron, Inc., 232 F.Supp.2d
679,
681
(S.D.W.Va.
2001)
(maximum
occupancy).
The first variation seeks to
approximate the defendant’s profits or the
plaintiff’s lost earnings assuming each
patron would have ordered the event for
residential viewing.
[J & J Sports Prods.,
Inc. v.] 291 Bar & Lounge, 648 F.Supp.2d
[469,] 474 [E.D.N.Y. 2009].
The second
variation seeks to award the license fee the
defendant would have paid if it had legally
purchased the event for exhibition.
Id.
The other approach to calculating damages is
to award a flat sum per violation.
[J & J
Sports Prods., Inc. v.] J.R.’Z Neighborhood
Sports Grille, 2010 WL 1838432, at *1
[D.S.C. Apr. 5, 2010] ($5000); [Joe Hand
Promotions, Inc. v.] Angry Ales, 2007 WL
3226451, at *5 [W.D.N.C. Oct. 29, 2007]
($1000); Kingvision Pay-Per-View Ltd. v.
Gadson, Civ. No. 1:04-678, 2007 WL 2746780,
at * 2 (M.D.N.C. Sept.18, 2007) ($10,000);
Las Reynas Restaurant, 2007 WL 2700008, at
*3 ($2000).
In support of its claim for statutory damages in this case,
Plaintiff
private

attaches

the

investigator

affidavit

who

of

observed

Shenae

the

Outerbridge,

Broadcast

on

a

three

televisions in the bar and restaurant areas of El Puente de Oro
on the evening of the event.
charged

an

entrance

approximately
patrons inside.
factors

courts

eight

fee,

(ECF No. 14-3).

remained

minutes,

and

in

the

counted

She was not

restaurant
approximately

for
54

In its memorandum, Plaintiff cites a number of
have

considered

in

determining

an

appropriate

award of statutory damages, but offers no explanation as to how

7

those

factors

provided

any

should

be

evidence

applied

of

Defendant’s violations.

the

in

lost

this

case,

profits

nor

has

associated

it

with

Cf. J & J Sports Productions, Inc. v.

Greene, Civil Action No. DKC 10-0105, 2010 WL 2696672, at *5
(D.Md. July 6, 2010) (where the same plaintiff attached to its
motion

a

“rate

card,”

demonstrating

that

“[t]he

costs

for

Defendant to legally purchase the December 6, 2008 [Broadcast]
was $2,200.00 based on an occupancy of 0-100 patrons”).
faced

with

a

similar

dearth

statutory minimum of $1,000.

of

evidence

have

Courts

awarded

the

See Quattrocche, 2010 WL 2302353,

at *3 (citing 291 Bar & Lounge, 648 F.Supp.2d at 474; Angry
Ales, 2007 WL 3226451, at *5).

This court will do the same.

Accordingly, Plaintiff will be awarded statutory damages under §
605(e)(3)(C)(i)(II) in the amount of $1,000.
B.

Enhanced Damages

Pursuant to § 605(e)(3)(C)(ii), where the court finds that
a violation was “committed willfully and for purposes of direct
or indirect commercial advantage or private financial gain, the
court in its discretion may increase the award of damages . . .
by an amount of not more than $100,000.”
Plaintiff

appears

enhanced damages.

to

conflate

the

concepts

In its memorandum,
of

statutory

and

(See ECF No. 14-2, at 6 (“an award of the

enhanced statutory damage minimum ($10,000.00) is a necessary
baseline amount this Court should consider adopting” (emphasis
8

in

original)).3

Nevertheless,

it

clearly

seeks

the

maximum

amount of enhanced damages ($100,000), in addition to statutory
damages, without presenting specific argument in support.
In

Quattrocche,

2010

WL

2302353,

at

*2,

the

court

explained:
In determining whether enhanced damages are
warranted, other courts in this Circuit have
looked to several factors:
1) evidence of
willfulness; 2) repeated violations over an
extended period of time; 3) substantial
unlawful monetary gains; 4) advertising the
broadcast; and 5) charging an admission fee
or charging premiums for food and drinks.
Bougie, 2010 WL 1790973, at *6; J.R.’Z
Neighborhood Sports Grille, Inc., 2010 WL
1838432, at *2; Las Reynas Restaurant, 2007
WL 2700008, at *3; Gadson, 2007 WL 2746780,
at *3.
The

fact

Broadcast

that

willfully

Defendant

intercepted

and

direct

for

advantage cannot be doubted.
descramble

spontaneously,

or

and

indirect

at

Luncheonette,

*6

nor

(quoting

Inc.,

77

do

television

2011

WL

5244440

commercial

Time

F.Supp.2d

Warner
485,

490

sets

(similar

December 6, 2008, boxing event).
3

connect

Bougie, 2010 WL
Cable

v.

(S.D.N.Y.

Moreover, Castro Corporation is a repeat offender.
Corp.,

the

“After all, ‘[s]ignals do not

themselves to cable distribution systems.’”
1790973,

exhibited

violations

Googies
1999)).

See Castro

relating

to

a

On the other hand, both of the

Because Plaintiff failed to number the pages of its
memorandum, numerical references are to those assigned by the
court’s electronic case filing system.
9

individual

defendants

are

now

in

bankruptcy;

Plaintiff

has

presented no evidence of any advertising associated with the
restaurant’s broadcast of the event; and the record reflects
that no admission fee was charged.
If

only

statutory

damages

were

awarded,

there

would

be

little to deter Defendant or other similarly situated businesses
from risking future violations.
awarded in this case.

Thus, enhanced damages will be

Courts have generally awarded “‘anywhere

from three to six times the statutory damages award for enhanced
damages[.]’”
1838432,
Ribiero,

at
562

J.R.’Z Neighborhood Sports Grille, Inc., 2010 WL
*2

(quoting
F.Supp.2d

J

&

J

498,

Sports
502

Productions,

(S.D.N.Y.

Inc.

2008)).

v.
In

Quattrocche, 2010 WL 2302353, at *3, where the defendant charged
an admission fee for its unlawful exhibition of a boxing match,
Judge Nickerson calculated enhanced damages by “multiplying the
[minimum] statutory damages by a factor of 5.”

Where, as here,

the evidence suggests that no admission fee was charged, courts
in this district have typically multiplied the statutory damages
amount by a factor of three to calculate enhanced damages.

See

Castro Corp., 2011 WL 5244440, at *5; Greene, 2010 WL 2696672,
at

*5.

As

there

is

no

evidence

suggesting

that

a

higher

multiplier is warranted here, this court will also multiply the
statutory damages by a factor of three.

10

Accordingly, Plaintiff

will be awarded enhanced damages under § 605(e)(3)(C)(ii) in an
amount of $3,000 and a total damages award of $4,000.
III. Conclusion
For the foregoing reasons, Plaintiff’s motion for default
judgment will be granted in part and denied in part.

A separate

order will follow.

________/s/_________________
DEBORAH K. CHASANOW
United States District Judge

11