J&J Sports Productions, Inc. v. Plaza Del Alamo, Inc.

Filing 9

MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 1/12/2016. (bus, Deputy Clerk)

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

J & J SPORTS PRODUCTIONS, INC.,
Plaintiff,
v.

Civil Action No. TDC-15-0173

PLAZA DEL ALAMO, INC., trading as
Plaza Alamo Inc., trading as Alamo Mexican
Restaurant,
Defendant.

MEMORANDUM OPINION

This case is before the Court on a Motion for Default Judgment filed by Plaintiff J & J
Sports Productions, Inc. ("J & J"). Having reviewed the Motion and supporting documents, the
Court finds no hearing necessary. See D. Md. Local R. 105.6. For the following reasons, the
Motion for Default Judgment is GRANTED.
BACKGROUND

J & J, a company that distributes sports programming, purchased the exclusive
nationwide television distribution rights to a boxing match between Manny Pacquiao and Juan
Manuel Marquez, IV (the "Pacquiao-Marquez fight"), which was broadcast as a pay-per-view
program on the evening of December 8, 2012.

J & J subsequently entered sublicensing

agreements with various commercial establishments, including some located in Maryland,
authorizing those entities to show the program to their patrons. The Pacquiao-Marquez fight was
then transmitted via encrypted, closed-circuit television to establishments that had paid for.a
sublicense.

The Alamo Mexican Restaurant, operated by Defendant Plaza Del Alamo, Inc.
(collectively, "the Alamo"), did not purchase a sublicense from J & J to show the PacquiaoMarquez fight. However, at 12:17 a.m. on December 9, 2012, a private investigator entered the
Alamo and saw that the restaurant was showing the Pacquiao-Marquez fight on five televisions.
There was no cover charge to enter the restaurant. The investigator estimated that it had a
capacity of approximately 200 people and counted between 167 and 183 customers at various
times. According to J & J's sublicensing rate card, an establishment that could accomrriodate
100-200 people would be required to pay $4,200 for a sublicense; an establishment that could
accommodate 200-300 people would be required to pay $6,200.
On January 21, 2015, J & J filed a Complaint against Alamo alleging violations of the
Communications Act of 1934, 47 U.S.C. ~ 605 (2012); the Cable and Television Consumer
Protection and Competition Act of 1992,47 U.S.c. ~ 553 (2012); and common law conversion.
Alamo was properly served on February 18, 2015 but failed to file a responsive pleading or
otherwise defend by the applicable deadline. On April 25, 2015, J & J filed a Motion for Clerk's
Entry of Default, and that default was entered the same day. On June 15, 2015, J & J filed a
Motion for Default Judgment seeking $151,500 in damages: the maximum of $100,000 for a
violation of ~ 605, the maximum of $50,000 for a violation of ~ 553, and $1,500 for conversion.
To date, Alamo has not responded to the entry of default or to J & J's Motion for Default
Judgment.
DISCUSSION
I.

Legal Standard

Pursuant to Federal Rule of Civil Procedure 55(a), "(w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure

2

is shown by affidavit or otherwise, the clerk must enter the party's default."

Under Rule

55(b)(2), after a default has been entered by the clerk, the court may, upon the plaintiff's
application and notice to the defaulting party, enter a default judgment. Fed R. Civ. P. 55(b)(2).
A defendant's default does not, however, automatically entitle the plaintiff to entry of a default
judgment; rather, that decision is left to the discretion of the court. United States v. Moradi, 673
F.2d 725, 727 (4th Cir. 1982) ("[T]rial judges are vested with discretion which must be liberally
exercised, in entering [default] judgments and in providing relief therefrom."); Dow v. Jones,
232 F. Supp. 2d 491, 494 (D. Md. 2002). The United States Court of Appeals for the Fourth
Circuit has a "strong policy that cases be decided on their merits," United States v. Shaffer
Equip. Co., 11 F.3d 450,453 (4th Cir. 1993), but default judgment may be appropriate "when the

adversary process has been halted because of an essentially unresponsive party."
Lawbaugh,

359 F. Supp. 2d 418, 421 (D. Md. 2005); see H F. Livermore

Aktiengesellschaft

s.E.c.

v.

Corp. v.

Gebruder Loepje, 432 F.2d 689, 691 (D.C. Cir. 1970) ("[T]he default

judgment must normally be viewed as available only when the adversary process has been halted
because of an essentially unresponsive party.

In that instance, the diligent party must be

protected lest he be faced with interminable delay and continued uncertainty as to his rights.").
In reviewing a Motion for Default Judgment, the court accepts as true the well-pleaded
factual allegations in the complaint relating to liability. Ryan v. Homecomings Fin. Network, 253
F.3d 778,780-81 (4th Cir. 2001). However, it remains for the court to determine whether these
unchallenged factual allegations constitute a legitimate cause of action. Id.; see also 10A C.
Wright & A. Miller, Fed. Prac. & Proc. Civ. S 2688 (3d ed. Supp. 2010) ("[L]iability is not
deemed established simply because of the default ... and the court, in its discretion, may require
some proof of the facts that must be established in order to determine liability."). If liability is

3

established, the court must then determine the appropriate amount of damages.
F.3d at 780-81.

See Ryan, 253

As to damages, the court cannot accept as true the factual allegations of the

plaintiff, but must instead make an independent determination.

See Dundee Cement Co. v.

Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); Lawbaugh, 359 F.
Supp. 2d at 422. To do so, the court may conduct an evidentiary hearing, see Fed. R. Civ.P.
55(b )(2), or may dispense with a hearing if there is an adequate evidentiary basis in the record
from which to calculate an award. See Pope v. United States, 323 U.S. 1, 12 (1944) ("It is a
familiar practice and an exercise of judicial power for a court upon default, by taking evidence
when necessary or by computation from facts of record, to fix the amount which the plaintiff is
lawfully entitled to recover and to give judgment accordingly.").

II.

Liability
47 U.S.C. ~ 605 and 47 U.S.C. ~ 553 address "different modalities of so-called 'cable

theft.'"
Section

J & J Sports Prods., Inc. v. MayrealIl, LLC, 849 F. Supp. 2d 586, 588 (D. Md. 2012).
605(a)

communications,

prohibits

the

unauthorized

interception

or receipt

of

certain

"radio"

47 U.S.C. ~ 605(a), and has been interpreted to include the unauthorized

interception of "digital satellite television transmissions." MayrealIl, 849 F. Supp. 2d at 588 n. 3.
Section

553(a)

communications.

prohibits

the

unauthorized

47 U.S.C. ~ 553(a).

intercepted the Pacquiao-Marquez

interception

receipt

of

certain

cable

Thus, ~ 605(a) likely would apply if the Alamo

fight and showed it over satellite television, while ~ 553(a)

likely would apply if the Alamo used cable television.
telecommunication

or

J & J has not alleged which form of

the Alamo used, but asserts that both statutes apply to the Alamo's conduct

regardless of the precise means of transmission.

It is not clear, however, whether the statutes

overlap sufficiently for both to apply regardless of whether the Alamo used satellite television or

4

cable television.

See, e.g.,

United States v. Norris, 88 F.3d 462, 468-69 (7th Cir. 1996)

(rejecting the argument that "all conduct governed by

S

553 also falls within the ambit of

S

605"); Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996) (noting that although the

provisions overlap in some ways, there is not a "complete overlap between the coverage of SS
605 and 553"). Nevertheless, the Court need not precisely define the relationship between

S 605

and S 553 to resolve this case. Because, as a general principle, "courts can and should preclude
double recovery," Gen. Tel. Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 333 (1980), and
because as discussed below, the damages to which J & J are entitled based on the facts alleged in
the Complaint would be the same under either statute, it is not necessary to determine exactly
which statute was violated. Instead, it is sufficient to conclude that J & 1's allegation that Alamo
intercepted and showed the Pacquiao-Marquez fight without J & J's authorization establishes
that Alamo violated either S 605 or S 553, or both. See J & J Sports Productions, Inc. v. Rumors
Inc., No. CCB-14-2046, 2014 WL 6675646, at *2 (D. Md. Nov. 21, 2014) (noting that although

J & J did not specify how the program was unlawfully intercepted, that omission was "not fatal"
because the factual allegations established a violation of either S 553 or S 605).
As for J & J's conversion claim, historically, an action for conversion lies only for
tangible property. Allied Inv. Corp. v. Jasen, 731 A.2d 957, 963-65 (Md. 1999). Maryland
courts have expanded conversion to include intangible rights, but only in a very specific
circumstance:

when tangible documents evidence those intangible rights, and the tangible

documents themselves have then been improperly taken. Id. at 965. J & J makes no allegations
that Alamo has unlawfully taken any of J & J's tangible property or tangible documents that
evidence J & 1's intangible rights. J & J has therefore not established that Alamo is liable for

5

conversion.

Furthermore, even if J & J stated a proper claim for conversion, it could not recover

for that tort, because such a result would amount to a double recovery.

III.

Damages
J & J seeks damages for the Alamo's violation of both

9

because J & J can recover only once for Alamo's unauthorized

605 and

9

553.

However,

showing of the Pacquiao-

Marquez fight, the Court awards damages under only one of these statutes. See Gen. Tel. Co. of

the Northwest, Inc. 446 U.S. at 333; Rumors, Inc., 2014 WL 6675646, at *2 (holding that
awarding damages under both

9

605 and

9

553 would be an impermissible double recovery).

Following the approach in other cases in this District, the Court will calculate damages under
605, on the ground that it authorizes a greater award than

9

9

553. See, e.g., Rumors, 2014 WL

6675646, at *2. The Court notes, however, that although the potential award under

9

605 is

greater, the award to which J & J is entitled would be the same under either statutory provision.
Under 47 U.S.C.

9

605, a plaintiff may elect to seek recovery of either actual damages

incurred, or statutory damages of between $1,000 and $10,000, "as the court considers just," for
each unauthorized reception of a radio communication."

47 U.S.c.

9

605(e)(3)(C)(i)(I)-(II).

Enhanced damages of up to an additional $100,000 are also available, at the court's discretion, if
"the violation was committed willfully and for purposes of direct or indirect commercial gain."
47 U.S.C.

9

605(e)(3)(C)(iii).

In the Complaint, J & J elected to seek statutory damages in the

amount of $10,000, and enhanced damages of $100,000 for Alamo's violation of
Motion, J & J seeks a default judgment in the amount of $100,000 pursuant to
considers each category of damages separately.

6

9

9

605. In its

605. The Court

A.

Statutory Damages

Under

9 605(e), "the party aggrieved may recover an award of statutory damages for each

violation of [the FCA] involved in the action in a sum of not less than $1,000 or more than
$10,000, as the court considers just." 47 U.S.C.

9

605(e)(3)(C)(i)(II). In determining a just

amount of statutory damages, courts may calculate either the approximate amount of profits that
the defendant received from the unauthorized broadcast or the amount of the plaintiff s lost
earnings, as measured by the unpaid license fee, or may award a flat sum per violation. See J &
J Sports Prods., Inc. v. Waters, No. FDW-12-779, 2013 WL 2948318, at *4 (W.D.N.C. June 14,
2014); J & J Sports Prods., Inc. v. Quattrocche, No. WMN-09-3420, 2010 WL 2302353, at *2

(D. Md. June 7, 2010).
Here, J & J has not provided any information regarding the Alamo's profits from
showing the Pacquiao-Marquez fight. It has, however, established the amount of the unpaid
license fee. According to J & 1's rate table, an establishment that can accommodate 100-200
people would have to pay a license fee of $4,200, and one that can accommodate 200-300 people
would have to pay a license fee of $6,200. Although J & 1's investigator estimated that the
Alamo had a capacity of 200, the headcount of patrons actually in attendance ranged from 167183, so there is not sufficient evidence to establish that the higher license fee would have applied
to the Alamo. Finding that the unpaid license fee was $4,200, the Court awards statutory
damages in the amount of $4,200. See J & J Sports Productions, Inc. v. El Rodeo Restaurant,
LLC, No. PJM-15-0172, 2015 WL 3441995 at *3 (D. Md. May 26, 2015) (awarding $4,200 in

statutory damages to J & J in a similar case).

~
i

B.

Enhanced Damages

J&J Sports also seeks enhanced damages to provide a total award of $100,000. Under ~
605(e), if "the court finds that the 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."

47 U.S.c. ~

605(e)(3)(C)(ii). In detemlining whether enhanced damages are warranted, courts consider
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." Quattrocche, 2010 WL 2302353, at
*2; El Rodeo Restaurant, LLC, 2015 WL 3441995 at *3.

Here, the Alamo clearly acted for commercial advantage, and there is evidence of
willfulness in that Alamo exhibited the broadcast, which required that Alamo affirmatively take
steps to descramble J & J's encrypted signal. See J & J Sports Prods., Inc. v. Castro Corp., No.
11-CV-00188-AW, 2011 WL 5244440, at *4 (D. Md. Nov. 1, 2011) ("(S]ignals do not
descramble spontaneously, nor do television sets connect themselves to cable distribution
systems.") (quoting Time Warner Cable v. Googies Luncheonette, Inc., 77 F. Supp. 2d 485,490
(S.D.N.Y. 1999)). But no evidence has been presented regarding repeated violations, substantial
monetary gains, advertising of the broadcast, or cover charges.
A willful violation for commercial gain warrants some enhanced damages to deter the
Alamo and other commercial entities from future violations, but there is no basis to support J &
J's request for the statutory maximum of $100,000. Where none of the other factors provide a
basis for enhanced damages, the amount is necessarily limited. See Castro Corp., 2011 WL
5244440, at *5 (referencing awards ranging from two to six times the statutory damages in the

8

absence of repeat behavior or egregious willfulness).

The Court therefore awards total damages

of two times the statutory damages, for a total award of $8,400 ($4,200 in statutory damages and
$4,200 in enhanced damages). In order to achieve higher multiples, J & J must offer more casespecific evidence relating to the enhanced damages factors, rather than reflexively seeking the
maximum amount, and explain how those factors justify a specific enhanced damages award. See
El Rodeo Restaurant, LLC, 2015 WL 3441995 at *4 (declining to award any enhanced damages
because J & J has "repeatedly filed motions seeking excessive damages" despite the fact it has
"been on notice, at least since Quattrocche, that in a case of non-egregious willfulness, it was not
eligible to recover the maximum damages authorized by statute" and was not entitled to recover
under ~ 553 and ~ 605 "for the same conduct"); Rumors, Inc., 2014 WL 6675646 at *4 (same).
CONCLUSION
For the foregoing reasons, the Motion for Default Judgment is GRANTED.
awarded $8,400 in damages.

A separate Order shall issue.

Date: January 12,2016

9

J & J is