J & J Sports Productions, Incorporated v. Strange Clouds Hookah Lounge, Incorporated et al

Filing 14

ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT [#12] AND CANCELING HEARING. Signed by District Judge Gershwin A. Drain. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
J & J PRODUCTIONS, INC.,
Plaintiffs,
Case No.: 17-11300
Honorable Gershwin A. Drain

v.

STRANGE CLOUDS HOOKAH
LOUNGE, INC., et al.,
Defendants.
___________________________/
ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT
JUDGMENT [#12] AND CANCELING HEARING
I. INTRODUCTION
Plaintiff, J & J Sports Productions, Inc., filed the instant lawsuit on April 25,
2017 alleging that Defendants, Strange Clouds Hookah Lounge and Michael
Kassab, have violated the Communications Act of 1934, as amended, 47 U.S.C. §
605 et seq. and the Cable and Television Consumer Protection and Competition Act
of 1992, as amended 47 U.S.C. § 553 et seq., for illegally broadcasting a boxing
match on May 3, 2014. Defendants have failed to appear and otherwise defend the
instant action.
Presently before the Court is the Plaintiff’s Motion for Default Judgment,
filed on December 11, 2017. Plaintiff seeks $110,000.00 in statutory damages, as

well as reasonable attorney fees and costs. For the reasons that follow, the Court
will enter a default judgment in the amount of $5,441.86.

II.

FACTUAL BACKGROUND
Plaintiff alleges that, pursuant to contract, it has the exclusive nationwide

television distribution rights to the Floyd Mayweather, Jr. v. Marcos Reina Maidana
WBC Welterweight Championship Fight Program (hereinafter the “Program”)
broadcast on May 3, 2014. Plaintiff entered into several sublicensing agreements
with various commercial entities granting said entities limited rights to publicly
exhibit the Program to the patrons of their respective establishments. The Program
originated via a satellite uplink and was subsequently retransmitted to cable
systems and satellite companies via satellite signal.
Plaintiff further asserts that Defendants had full knowledge that the Program
was not to be intercepted; however they intercepted and displayed the Program to
the patrons of Defendant Strange Clouds Hookah Lounge. The cost of the Program
if the Defendants had legally purchased the rights to display it totals $3,000.00.
On August 7, 2017, Plaintiff served Defendants with the Summons and copy
of the Complaint in this matter. Defendants have failed to file an Answer to the
Complaint or otherwise defend this action.

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On November 4, 2017, Plaintiff

requested that the clerk enter a default against Michael Kassab and Strange Clouds
Hookah Lounge, Inc. and the clerk entered a default against these Defendants on
November 6, 2017.
III.
A.

LAW & ANALYSIS
Standard of Review for Default Judgment

Rule 55(b) of the Federal Rules of Civil Procedure permit the entry of
judgment by default against a defendant who has failed to plead or otherwise
defend against an action. Fed. R. Civ. P. 55(b). To obtain judgment by default, the
plaintiff must first request a default from the clerk pursuant to Rule 55(a). Shepard
Claims Servs., Inc. v. William Darrah & Assocs., 796 F.2d 190, 193 (6th Cir. 1986).
“[E]ntry of a default against a defendant establishes the defendant’s liability.”
Thomas v. Miller, 489 F.3d 293, 299 (6th Cir. 2007) (citing Goldman, Antonetti,
Ferraiuoli, Axtmayer & Hertell v. Medfit Int’l, Inc., 982 F.2d 686, 693 (1st Cir.
1993)). “There is no question that, default having been entered, each of [plaintiff’s]
allegations of fact must be taken as true and each of its [ ] claims must be
considered established as a matter of law.” Id.
However, a clerk’s entry of default “on well-pleaded allegations establishes
only defendant’s liability; plaintiff must still establish the extent of damages.”
Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995) (quoting Kelley v.
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Carr, 567 F.Supp. 831, 841 (W.D. Mich. 1983)). “Where damages are unliquidated
a default admits only defendant’s liability and the amount of damages must be
proved.” Antoine, 66 F.3d at 110.
B.

Violations of 47 U.S.C. § 553 and § 605

Plaintiff’s Complaint, Motion and Exhibits demonstrate that Defendants have
violated § 553 and § 605. The Cable and Television Consumer Protection and
Competition Act of 1992 prohibits intercepting, receiving or assisting in the
interception or receipt of communications services offered over a cable system,
unless authorized to do so by a cable operator. See 47 U.S.C. § 553(a)(1). The
Communication Act of 1934 applies to satellite transmissions and prohibits
receiving, transmitting, or assisting in the transmission of any communication by
wire or radio and from divulging or publishing said communication. See 47 U.S.C.
§ 605(a); see J & J Prods., Inc. v. Matti, No. 14-12981, 2015 U.S. Dist. LEXIS
25588, *6 (E.D. Mich. Jan. 12, 2015)).
Plaintiff alleges in the Complaint that (1) Defendants could have but did not
purchase the rights to display the Program by contracting with Plaintiff or an
authorized distributor such as DirecTV; (2) Defendant Kassab is the owner and
person with control over Strange Clouds Hookah Lounge; (3) the commercial rate
charged to a business with seating of 101-150 is $3,000.00; (4) Plaintiff’s auditor,
Richard Papcun, visited Strange Clouds Hookah Lounge on May 3, 2014 without
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paying a cover charge and observed that between 37 and 42 patrons were at the
lounge, which had fourteen televisions displaying the Program.
When a defendant is liable under both § 553 and § 605, a plaintiff may
recover under only one section. See J & J Sports Prods. v. B O B Lounge, No. 1711350, 2018 U.S. Dist. LEXIS 2085, *10 (E.D. Mich. Jan. 5, 2018). Here, Plaintiff
has elected to an award of damages under § 605, which permits an “aggrieved
party” to choose between actual or statutory damages.

See 47 U.S.C. §

605(e)(3)(C)(i). Plaintiff specifically seeks enhanced statutory damages pursuant to
§ 605.
Under 47 U.S.C. § 605(e)(3)(C) (i)(II), the Court may award damages for
each violation “in a sum not less than $1,000 or more than $10,000, as the court
considers just . . . .” This section also allows the Court, “in its discretion,” to
“increase the award of damages . . . by an amount of not more than $100,000” if it
concludes “the violation was committed willfully and for purposes of direct or
indirect commercial advantage or private financial gain.” 47 U.S.C. §
605(e)(3)(C)(ii).
In determining the appropriate damages award, the Court “should take into
account the proportionality between the loss suffered by the plaintiff and the profit
gained by the defendant.” See B O B Lounge, 2018 U.S. Dist. LEXIS 2085, at *12
(citing Joe Hand Promotions, Inc. v. Granada Lounge, Inc., No. 11-13062, 2012
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U.S. Dist. LEXIS 17718, *2 (E.D. Mich. Feb. 13, 2012). Courts in this district
consider certain facts relevant to this determination. See J & J Sports Prods., Inc.
v. Trier, No. 08-cv-11159, 2009 U.S. Dist. LEXIS 6415, *3 (E.D. Mich. Jan. 29,
2009). Specifically, the facts this Court should consider include the number of
patrons in the establishment at the time the violation occurred, the seating capacity,
the various rates, including the residential rate, charged by the plaintiff for the
viewing of the broadcast, and whether a cover was charged to enter the
establishment or whether it was likely the establishment obtained significant profits
in another manner. Id.
In the present case, there was no cover charge to enter the establishment,
there were between 37 and 42 patrons in the establishment during the display of the
Program, and Plaintiff’s commercial rate for an establishment with a capacity of
100 to 150 is $3,000.00. Here, the Court finds that an appropriate base amount is
$3,000, or the amount Defendants would have had to pay Plaintiff for the legal right
to display the Program to patrons of Strange Clouds Hookah Lounge.
This award is appropriate since there is no evidence that Defendants have
committed more than this single violation of the Act and there was no cover charge
at the door. Also, the establishment was nowhere near its capacity with no more
than 42 patrons at the time of the Program. See J & J Sports Prods., Inc. v. Ribeiro,
562 F. Supp.2d 498, 501 (S.D.N.Y. 2008) (noting that “although the amount of
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damages should be an adequate deterrent, a single violation is not so serious as to
warrant putting the restaurant out of business.”).
The Court declines to award enhanced damages because willfulness has not
been established. In order to impose enhanced damages, the Court must find that
the violation was committed “willfully and for purposes of direct or indirect
commercial advantage or private financial gain . . . .”

47 U.S.C. §

605(e)(3)(C)(i)(ii). Under the Act, a violation is “willful” where there are repeated
violations over time. See Joe Hand Promotions, Inc. v. Easterling, No. 4:08-cv12529, 2009 U.S. Dist. LEXIS 52517, *16-19 (N.D. Ohio Jun. 22,
2009)(“[E]vidence of willful exhibition for financial gain [is] insufficient when
there was no showing that a cover was charged, that the program was advertised or
that food or drink prices were increased, and that establishments were not filled to
capacity.”)
In the instant matter, there was no cover charge to enter Strange Clouds
Hookah Lounge, which was nowhere near capacity, nor is there evidence that the
fight was advertised or that food and drink prices were increased. As such, the
Court finds that Defendants did not willfully violate § 605. Plaintiff’s request for
enhanced damages is unwarranted. Thus, Plaintiff’s statutory damages are $3,000
pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II).
Under 47 U.S.C. § 605(e)(3)(B)(iii), the Court is required to award full costs,
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including reasonable attorney’s fees to the prevailing party. Plaintiff has submitted
an affidavit representing that it has incurred $1,911.00 in attorney fees and $530.86
in costs prosecuting the instant matter. Plaintiff’s hourly billing rate is $245.00 per
hour. He presents the State Bar of Michigan’s 2014 Economics of Law Practice
Attorney Income and Billing Rate Summary Report in support of his contention
that his hourly rate is reasonable. The Court concludes that counsel’s hourly rate is
reasonable because the median billing rate for an attorney in private practice in
Oakland County, Michigan is $250.00. Thus, the Court will award attorney fees
and costs in the amount of $2,441.86 and statutory damages in the amount
$3,000.00 for a total award of $5,441.86.
IV.

CONCLUSION

Accordingly, for the reasons articulated above, the Court GRANTS
Plaintiff’s Motion for Default Judgment [#12] and awards damages in the amount
of $5,441.86.
SO ORDERED.
Dated: February 8, 2018

/s/Gershwin A. Drain
GERSHWIN A. DRAIN
United States District Judge

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CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record and on Michael Kassab
at 48475 Red Oak Drive, Shelby Township, MI, 48315, on
February 8, 2018, by electronic and/or ordinary mail.
/s/ Tanya Bankston
Deputy Clerk

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