J & J Sports Productions, Incorporated v. B O B Lounge, LLC et al

Filing 14

OPINION AND ORDER granting 10 Motion for Default Judgment. Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
J & J SPORTS PRODUCTIONS, INC.,
Case No. 17-11350
Plaintiff,
Paul D. Borman
United States District Judge

v.
B O B LOUNGE, LLC, d/b/a B.O.B.’Z
LOUNGE, and SHARON O’NEAL,

David R. Grand
United States Magistrate Judge

Defendants.
______________________________/
OPINION AND ORDER GRANTING PLAINTIFF’S MOTION FOR
DEFAULT JUDGMENT AND AWARDING DAMAGES
In this action, Plaintiff J & J Sports Productions, Inc. alleges that Defendants
B O B Lounge, LLC (“B O B Lounge”) and Sharon O’Neal violated federal law by
illegally broadcasting a boxing match on May 3, 2014. Defendants have failed to
defend or otherwise appear in this action. Plaintiff now moves for default judgment
pursuant to Federal Rule of Civil Procedure 55(b)(2) and seeks statutory damages in
addition to attorney's fees and costs against the Defendants jointly and severally.
A hearing on this matter was held on December 6, 2017. For the reasons stated
on the record and those set forth below, the Court will grant Plaintiff’s motion for
default judgment and award damages, fees, and costs in the amount of $7,733.47.
BACKGROUND
Plaintiff filed its Complaint on April 27, 2017. (ECF No. 1, Compl.) The

lawsuit was brought against B O B Lounge (d/b/a B.O.B.’z Lounge), a commercial
establishment in Detroit, Michigan, as well as Sharon O’Neal, whom Plaintiff
alleges on information and belief to be the owner, operator, or in some other fashion
the person in charge of or possessing control over B O B Lounge. (Compl. ¶¶ 7-10.)
In a 2015 Opinion and Order issued in a very similar case filed by the same
Plaintiff, this Court described Plaintiff’s business model as follows:
Plaintiff, in an attempt to combat piracy of its programs, hires
investigative agencies who retain auditors who visit various
commercial locations that have no record of paying the required fee.
For a “commercial fee”, a commercial establishment can receive an
unscrambled signal enabling the business to view the program either
through Plaintiff or an authorized distributor. The fee is determined by
the number a “Rate Card” that ties the fee to the seating capacity of the
business.
J & J Sports Prods., Inc. v. Matti, No. 14-12981, 2015 WL 900478, at *1 (E.D.
Mich. Mar. 3, 2015) (Borman, J.).
In this case, Plaintiff alleges that it paid for and was contractually granted the
exclusive nationwide television distribution rights to the Floyd Mayweather, Jr. v.
Marcos Rene Maidana WBC Welterweight Championship Fight (referred to herein
as the “Program”), including all under-card bouts and fight commentary in the
television broadcast of the event. (Compl. ¶¶ 10, 12.) Plaintiff claims that Defendants
illegally broadcast the program on May 3, 2014 in violation of the Communications
Act of 1934, as amended, 47 U.S.C. § 605, et seq., and the Cable Television
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Consumer Protection and Competition Act of 1992, as amended, 47 U.S.C. § 553,
et seq. (Compl. ¶¶ 10-26; see also ECF No. 10, Pl.’s Mot. Ex. 6, Affidavit of Andre
Wallace.) Plaintiff also alleges that the broadcast constituted conversion under
Michigan common law. (Compl. ¶¶ 27-30.) Andre Wallace, an investigator hired by
Plaintiff, avers in a signed affidavit dated September 23, 2015 that there were
approximately 80 patrons in the establishment on the date of the broadcast. (Wallace
Aff. ¶ 3.)
In the Motion for Default Judgment, Plaintiff asserts that it served both
Defendants with the Summons and Complaint at the same address on May 5, 2017.
(Pl.’s Mot. at 2, Pg ID 23; Ex. 2, Return of Service; Ex. 3, Return of Service.) After
Defendants failed to answer the Complaint or otherwise plead or defend in the
action, Plaintiff filed a Request for a Clerk’s Entry of Default on June 6, 2017, and
it was granted the same day. (ECF Nos. 8, 9.)
A hearing on Plaintiff’s Motion for Default Judgment, as well as an analogous
motion for default judgment in a separate action involving the same parties and
similar facts, see J & J Sports Productions v. B O B LOUNGE, LLC, et al., No. 1710775, was scheduled to be held on October 26, 2017. The hearing was postponed
after Plaintiff’s counsel represented that the parties were likely to settle the matter
out of court, but Plaintiff’s counsel informed the Court several weeks later that
attempts to finalize the settlement had been unsuccessful. The Court held a
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rescheduled hearing on the two motions for default judgment on December 6, 2017.
Defendants did not attend the hearing.
LEGAL STANDARDS
Pursuant to Federal Rule of Civil Procedure 55(b), a judgment by default may
be entered against a defendant who has failed to plead or otherwise defend against
an action. In order to obtain judgment by default, the proponent must first request
the clerk's entry of default pursuant to Rule 55(a). See Hanner v. City of Dearborn
Heights, No. 07-15251, 2008 WL 2744860, at *1 (E.D. Mich. July 14, 2008). Once
a default has been entered by the clerk's office, all of a plaintiff’s well-pleaded
allegations, except those relating to damages, are deemed admitted. Antoine v. Atlas
Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995); see also Ford Motor Co. v. Cross,
441 F. Supp. 2d 837, 846 (E.D. Mich. 2006) (citation omitted).
Once a default is obtained, the party may then file for a default judgment by
the clerk or by the court. Fed. R. Civ. P. 55(b). If the plaintiff’s well-pleaded
allegations are sufficient to support a finding of liability as to the defendant on the
asserted claims, then the Court should enter a judgment in favor of the plaintiff. See
Cross, 441 F. Supp. 2d at 848. Although Rule 55(b)(2) does not provide a standard
to determine when a party is entitled to a judgment by default, the case law
establishes that the court must exercise “sound judicial discretion” when determining
whether to enter the judgment. Wright & Miller, 10A Federal Practice & Procedure,
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§ 2685 (3d ed. 1998) (collecting cases). After a court determines that a default
judgment should be entered, it will determine the amount and character of the
recovery awarded. See id. § 2688 (collecting cases).
DISCUSSION
1.

Service

“[B]ecause a party has no duty to plead until properly served, sufficient
service of process is a prerequisite to entry of default.” Am. Auto. Ass'n v. Dickerson,
995 F. Supp. 2d 753, 756 (E.D. Mich. 2014) (quoting Russell v. Tribley, No. 10–
14824, 2011 WL 4387589, at *8 (E.D. Mich. Aug. 10, 2011) (collecting cases)).
Under the Federal Rules of Civil Procedure, a party may serve a competent
individual of suitable age and who has not waived service in a judicial district of the
United States by:
(1) following state law for serving a summons in an action brought in
courts of general jurisdiction in the state where the district court is
located or where service is made; or
(2) doing any of the following:
(A) delivering a copy of the summons and of the complaint to the
individual personally;
(B) leaving a copy of each at the individual's dwelling or usual
place of abode with someone of suitable age and discretion who
resides there; or
(C) delivering a copy of each to an agent authorized by
appointment or by law to receive service of process.
Fed. R. Civ. P. 4(e).

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Here, service was effected on May 5, 2017 by in-person delivery to Defendant
O’Neal. (Pl.’s Mot. Ex. 3, Pg ID 60; ECF No. 8, Aff. Attached to Request for Clerk's
Entry of Default.) This method of service comports with Fed. R. Civ. P. 4(e)(2)(A).
This method of service also comports with Michigan Court Rule 2.105, which
provides that process may be served on a resident or nonresident individual by either
“delivering a summons and a copy of the complaint to the defendant personally” or
by sending a copy “by registered or certified mail, return receipt requested, and
delivery restricted to the addressee.” Thus, under either Fed. R. Civ. P. 4(e)(1) or
Fed. R. Civ. P. 4(e)(2)(A), Plaintiff properly effected service on Defendant O’Neal.
Defendant B O B Lounge is a limited liability company. The Federal Rules of
Civil Procedure provide that “a domestic or foreign corporation, or a partnership or
other unincorporated association that is subject to suit under a common name” may
be served
by delivering a copy of the summons and of the complaint to an officer,
a managing or general agent, or any other agent authorized by
appointment or by law to receive service of process and--if the agent is
one authorized by statute and the statute so requires--by also mailing a
copy of each to the defendant.
Fed. R. Civ. P. 4(h). Records from Michigan’s Department of Licensing and
Regulatory Affairs identify Defendant O’Neal as the “Resident Agent” of Defendant

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B O B Lounge.1 On that basis, the Court finds that Defendant B O B Lounge was
properly served under Fed. R. Civ. P. 4(h).
The Court therefore deems Defendants “to have admitted all of the well
pleaded allegations in the Complaint, including jurisdictional averments.” Cross,
441 F. Supp. 2d at 846. The relevant inquiries, then, are whether Plaintiff’s
allegations are sufficient to support a finding of liability under the asserted causes of
action, and if so, whether an award of damages is appropriate.
2.

Liability

Pursuant to 47 U.S.C. § 553(a)(1), “no person shall intercept or receive or
assist in intercepting or receiving any communications service offered over a cable
system, unless specifically authorized to do so by a cable operator or as may
otherwise be specifically authorized by law.” 47 U.S.C. § 605(a), on the other hand,
applies to satellite transmissions and provides in relevant part that a person who
receives, transmits, or assists in transmitting any communication by wire or radio
may not divulge or publish that communication. See Nat'l Satellite Sports, Inc. v.
Eliadis, Inc., 253 F.3d 900, 911 (6th Cir. 2001) (noting the Cable Communications
Policy Act of 1984 was enacted to “address a problem which is increasingly plaguing

1

See
https://cofs.lara.state.mi.us/CorpWeb/CorpSearch/CorpSummary.aspx?ID=801708
732&SEARCH_TYPE=1 (visited Dec. 28, 2017).
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the cable industry-the theft of cable service.”); see also Joe Hand Promotions, Inc.
v. KSD, Inc., No. 3:13CV951, 2014 WL 4675264, *6–7 n. 1 (N.D. Ohio, Sept.18,
2014) (examining the legislative histories of both statutes and noting in a footnote
that there is some struggle regarding the interplay between the two statutes).
“Despite their facial similarity, Sections 553 and 605(a) reach different conduct. . . .
Section 605(a) may be read as outlawing satellite signal piracy, while Section 553
bans only the theft of programming directly from a cable system.” Cablevision of
Michigan, Inc. v. Sports Palace, Inc., 27 F.3d 566 (6th Cir. 1994) (unpublished).
In this case, where Plaintiff does not know how the Defendant pirated the
signal (via satellite or through over a cable system) it is pro forma to plead both
statutes. Plaintiff cannot collect damages under both statutes, however. See J & J
Sports Prods., Inc. v. Bader Matti, No. 14-12981, 2015 WL 900478, at *2 (E.D.
Mich. Mar. 3, 2015); Joe Hand Promotions, Inc. v. Granada Lounge, Inc., 11–
13062, 2012 WL 447272, *2 (E.D. Mich. Feb.13, 2012).
The Complaint and the Motion for Default Judgment (including its exhibits)
establish that Defendants violated both § 605 and § 553 by intercepting and
displaying the Program on Saturday, May 3, 2014 at their establishment, B.O.B.'z
Lounge, operating at 17456 Harper Ave. Detroit, Michigan (“the bar”) for the
purpose of direct or indirect commercial advantage and private financial gain.
Specifically, Plaintiff has established: (1) that Defendants did not pay to receive or
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publish the Program (Compl. ¶ 14); (2) that Defendant O’Neal is the “the owner(s),
and/or officer(s), shareholder(s), and/or operator(s), and/or licensee(s), and/or
permitee(s), and/or person(s) in charge, and/or an individual(s) with dominion,
control, oversight and management” over the bar (Compl. ¶ 10); (3) that the price
Defendants would have paid had their purchased the rights to show the program
legally would have been $2,200 (Pl.'s Mot. Ex. 7, Rate Card); and (4) that Andre
Wallace, Plaintiff’s investigator, visited the bar on May 3, 2014 at around 11:57 PM
and observed that approximately 80 people were in the bar, which had five
televisions displaying the Program (Pl.'s Mot. Ex. 5, Wallace Aff.).
Courts in this District and elsewhere have held that to state a claim against an
individual under § 605 or § 553, a plaintiff must allege facts establishing that the
individual had a right and ability to supervise the infringing activities and that the
individual had a direct financial interest in those same activities. See Joe Hand
Prod., Inc. v. Cain, No. 06–12213, 2006 WL 2466266, at *2 (E.D. Mich. Aug. 24,
2006); J & J Sports Productions, Inc. v. Stanley, 2014 WL 2763635 (E.D. Mich.
June 18, 2014) (granting motion for default judgment against individual defendants
where the plaintiff had pled the individual defendant had supervisory control over
the activities and received a financial benefit); J & J Sports Prods., Inc. v.
Walia, 2011 WL 902245 *3 (N.D. Cal. Mar. 14, 2011) (collecting cases and
observing that “it appears that all courts addressing the issue have applied the
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copyright standard for individual liability to violations of § 553 and § 605.”); J & J
Sports Prods., Inc. v. Ribeiro, 562 F. Supp. 2d 498, 501 (S.D.N.Y. 2008).
Here, Plaintiff has alleged that Defendant O’Neal was an owner, operator,
officer and/or person in charge with “dominion, control, oversight and management
of the commercial establishment” and that she was either aware of and approved the
unauthorized display of the Program or was physically present at the time the
Program was displayed. (Compl. ¶ 10.) Because Defendant O’Neal is alleged to be
an owner of Defendant B O B Lounge, it is logical to conclude that she received a
financial benefit from displaying the Program. Taking these well pled allegations as
true, the Court finds that Plaintiff has established individual liability as to Defendant
O’Neal as well as Defendant B O B Lounge under § 605 and § 553.2
3.

Damages

As Plaintiff correctly notes, when a defendant is liable under
both § 553 and § 605, the plaintiff may only recover under one of those
section. See Stanley, 2014 WL 2763635, at *2 (citing J & J Sports Productions, Inc.

2

Although the Complaint asserts a third claim for common-law conversion (Compl.
¶¶ 27-30), Plaintiff makes no reference to that claim in the Motion for Default
Judgment, and has not otherwise pursued it. The Court will therefore treat that claim
as abandoned. See J & J Sports Prods., Inc. v. Matti, No. 13-13963, 2015 WL
143932, at *1 (E.D. Mich. Jan. 12, 2015) (Borman, J.) (noting, in granting default
judgment in another action filed by Plaintiff, that “Plaintiff does not pursue its state
law claim of conversion and therefore this Court will treat that claim as abandoned”).
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v. Trier, 2009 U.S. Dist. LEXIS 6415 (E.D. Mich. Jan. 29, 2009)). In the present
case, Plaintiff elects to recover under 47 U.S.C. § 605. (Pl.’s Mot. at 7, Pg ID 32.)
Under § 605, the “aggrieved party” may choose between actual and statutory
damages. 47 U.S.C. § 605(e)(3)(C)(i). Here, Plaintiff requests statutory damages.
(Pl.’s Mot. at 7, Pg ID 32.) Per the statute, Plaintiff can recover statutory damages
for each violation of not less than $1,000 or more than $10,000 as determined by the
Court. 47 U.S.C. § 605(e)(3)(C)(i)(II). But where the court finds that the violation
was committed “willfully and for the purposes of direct or indirect commercial
advantage or private financial gain” the court can increase the award by the amount
of $100,000 per violation. 47 U.S.C. § 605(e)(3)(C)(ii).
Courts in this District look to certain facts to calculate damages in actions like
the instant case, including the number of patrons in the establishment at the time of
the violation, the seating capacity of the establishment, the rate charged by the
plaintiff for the broadcast, and whether the defendant charged a cover to patrons or
“was likely to have obtained significant profits in another manner.” Stanley, 2014
WL 2763635, at *2 (quoting Trier, 2009 U.S. Dist. LEXIS 6415, at *3). “The
damages awarded by the Court ‘should take into account the proportionality between
the loss suffered by the plaintiff and the profit gained by the defendant.’” Granada
Lounge, 2012 WL 447272, at *2 (quoting Ribeiro, 562 F. Supp. 2d at 501). In Trier,
the court explained that
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[w]hen the exact number of patrons is unknown, courts will award a
flat sum based on considerations of justice. When the exact number of
patrons is known, the court will based the award on the number of
patrons in the establishment who viewed the unauthorized showing
multiplied by a number set by the court. This number varies widely
from $20 to $300, although most courts set a number around $50.
Trier, 2009 U.S. Dist. LEXIS 6415, at *3 (quoting Ribeiro, 562 F. Supp. 2d at 50102) (internal citation and quotation marks omitted).
In this case, Plaintiff has evidenced that there were approximately 80 patrons
at the bar. There is no allegation of a cover charge. Per the Rate Card, a commercial
establishment with seating of 0-100 would have been charged a rate of $2,200.00 to
display the Program. (Pl.’s Mot. Ex. 7, Rate Card.)
Where the number of patrons is known, that fact may serve as a benchmark
for the calculation of damages. Because that was the case in Matti, a similar lawsuit
brought by Plaintiff before this Court in 2015, the Court was
inclined to follow the direction of other courts in this district who have
found Trier and Ribeiro instructive and have taken the number of
patrons in the bar and then multiplied that number by dollar amount
somewhere between $20 and $300. See Ribeiro, 562 F.Supp.2d at 501–
02 (ultimately multiplying the number of patrons by the pay-per-view
residential rate of $54.95 and then doubling that amount to $1,500 to
meet the statutory minimum, and then multiplying that amount by three
because the violation was wilful); see also Granada Lounge, 2012 WL
447272, at *2–3 (finding that the commercial rate defendant would
have been charged (rounded up to the statutory minimum) was
appropriate while the higher base award of $10,000 was not justified
because a cover was not charged and there were only 68 to 79 people
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in attendance, but then multiplying the $1,000 base award by three for
wilfulness.); Trier, 2009 U.S. Dist. LEXIS 6415 at *3 (finding that
where there were only 21 people at the establishment, where no cover
was charged, and the commercial rate would have been $1600, the court
found that $1600 was an appropriate base award and multiplied by three
based on the wilfulness of the violation.).
Matti, 2015 WL 900478, at *4. The Court went on to note that in Trier, Ribeiro, and
Granada Lounge, the Defendants had not imposed a cover charge on their patrons
and had not displayed any other unauthorized programs. Both of those factors were
present in Matti, however, and so this Court considered a $50 flat per-patron fee to
be warranted, which, multiplied by the 120 patrons present at the broadcast at issue
in Matti, made for a base award of $6,000. See id. Then, again because of the cover
charge and the additional violation, the Court multiplied the base award by a factor
of 4, resulting in total damages of $24,000. (The other violation was the subject of a
separate lawsuit by Plaintiffs, in which this Court used a similar calculus to set
damages at $22,000. See J & J Sports Prods., Inc. v. Matti, No. 13-13963, 2015 WL
143932, at *5 (E.D. Mich. Jan. 12, 2015).)
Like Matti, this case is distinguishable from Ribeiro, Granada Lounge, and
Trier, because unlike in those cases, Defendants here did commit another, similar
violation of the statutes.3 But importantly, this case is also distinguishable from Matti

3

As noted above, that violation is the subject of a separate lawsuit filed by Plaintiff
against Defendants. See J & J Sports Productions v. B O B LOUNGE, LLC, et al.,
No. 17-10775.
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itself, because there is no evidence or allegation that Defendants collected a cover
charge from the patrons. A more useful comparison can be drawn between this case
and another of this Court’s recent cases involving an unauthorized broadcast action
brought by Plaintiff: J & J Sports Prods., Inc. v. Ziggy's Bar & Grill, Inc, No. 1511585, 2015 WL 7567505 (E.D. Mich. Nov. 25, 2015) (Borman, J.). In Ziggy’s Bar
& Grill, the defendants had 45 patrons in the bar at the time of the unauthorized
broadcast and charged a ten dollar cover, though there were no allegations of any
other unauthorized broadcasts. This Court used the same per-patron flat figure of
$50, resulting in a base award of $2,250. Noting then that the violation was willful
based on the cover charge, and pointing out that the base award was only $50 more
than the defendants would have paid legally (and thus “[did] not create much of a
deterrent”), this Court multiplied the base award by three for a total damages award
of $6,750. See id. at *6.
Ziggy’s Bar & Grill is a close analogue to this case: the only material
differences are that this case involves more patrons, and allegations of a separate
violation one year later but not of a cover charge. The number of patrons already
influences the base award as a multiplier, and so the relevant question is how the
calculus here should differ from that in Ziggy’s Bar & Grill given that the
exacerbating factor is a separate violation rather than a cover charge. The Court finds
that a separate violation is a less egregious exacerbating factor than a cover charge
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for two reasons. First, at least in this case, the separate violation is itself legally
actionable and can justify additional liability for Defendants in an independent
proceeding. Second, to the extent that damages in a case like this are meant to
penalize a defendant’s intention to illegally profit from the broadcast, the imposition
of a cover charge more directly reflects that intention than the existence of a separate
violation—at least without some evidence or allegation that the defendant advertised
the broadcast to its patrons beforehand, which there is not here.
Still, a separate violation is sufficient to justify a finding of willfulness. See G
& G Closed Circuit Events, LLC v. Port Bar, Inc., No. 14-12984, 2015 WL 144588,
at *2 (E.D. Mich. Jan. 11, 2015) (“For purposes of § 605, conduct is ‘willful’ where
there were repeated violations over time.”) (quoting Joe Hand Promotions, Inc. v.
Easterling, 08–1259, 2009 WL 1767579, *4 (N.D. Ohio June 22, 2009)). The Court
concludes that Defendants’ conduct was willful based on the separate violation, but
that it justifies a less harsh sanction than the cover charge in Ziggy’s Bar & Grill did.
In that case, the base rate was $50 and the “willfulness multiplier” was a factor of
three; here, the Court will award damages based on a per-patron rate of $35 and a
multiplying factor of two. With 80 patrons, this results in a base award of $2,800
and a final award of $5,600.
4.

Attorney fees and costs

Pursuant to 47 U.S.C. § 605(e)(3)(B)(iii), the court “shall direct the recovery
15

of full costs, including awarding reasonable attorneys' fees to an aggrieved party
who prevails.” In the present case, Plaintiff's counsel has submitted an affidavit
stating that Plaintiff incurred a total of $2,133.47 in fees and costs, representing
$1,641.50 in attorney fees based on an hourly rate of $245.00, and $491.97 in costs.
(Pl.’s Mot. at Pg ID 41-44.)
Plaintiff’s counsel supports his contention that a $245.00 billable rate is
reasonable by submitting the Michigan State Bar’s “2014 Economics of Law
Practice Attorney Income and Billing Rate Summary Report.” (Pl.’s Mot. Ex. 9.)
The Court concludes that $245 is a reasonable hourly rate, as the 2013 median hourly
rate for both Oakland County (where Plaintiff’s counsel’s firm is located) and
Wayne County (where B O B Lounge is located) is $250. Thus, the Court will award
Plaintiff a total award, including attorney fees and costs, of $7,733.47.
CONCLUSION
For these reasons and those stated on the record, the Court hereby GRANTS
Plaintiff’s Motion for Default Judgment and AWARDS damages in the amount of
$7,733.47.
IT IS SO ORDERED.
s/Paul D. Borman
Paul D. Borman
United States District Judge
Dated: January 5, 2018
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon
each attorney or party of record herein by electronic means or first class U.S. mail
on January 5, 2018.
s/D. Tofil
Deborah Tofil, Case Manager

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