Directv, LLC v. Dunaway et al
Filing
15
ORDER granting 9 Motion for Default Judgment Signed by Honorable David C. Bramlette, III on 9/25/2015 (ECW)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
DIRECTV, LLC, a California
Limited Liability Company
VS.
PLAINTIFF
CIVIL ACTION NO. 5:14-cv-46(DCB)(MTP)
ROOSEVELT B. DUNAWAY, a/k/a
BILLY DUNAWAY, Individually
and d/b/a 98 TAVERN & SEAFOOD
BAR; and MARGARET ROGERS,
Individually and d/b/a
98 TAVERN & SEAFOOD BAR
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the plaintiff’s Motion for
Default Judgment (docket entry 9). Having carefully considered the
motion, to which the defendants have not responded, and the record
in this case, the Court finds as follows:
The plaintiff DIRECTV, LLC (“DIRECTV”)commenced this action by
filing
its
Complaint
against
defendants
(“Dunaway”) and Margaret Rogers (“Rogers”).
the
Summons
and
Complaint
on
both
Roosevelt
B.
Dunaway
Proofs of service of
defendants
were
filed.
Subsequently, an entry of default as to both defendants was made
and the plaintiff filed its motion for default judgment. Copies of
the motion were mailed by the plaintiff to the defendants, as were
copies of the plaintiff’s memorandum brief in support of the
motion.
To date, neither defendant has entered an appearance and
neither has responded to the Complaint or to the motion for default
judgment.
Following the Clerk’s entry of default (docket entry 8), the
allegations in the plaintiff’s Complaint concerning the defendants’
liability are admitted and deemed true.
Fed.R.Civ.P. 8(b)(6)
(allegations other than those relating to damages are admitted if
a responsive pleading is required and the allegations are not
denied).
DIRECTV is a limited liability company established under the
laws of the State of California.
Complaint, ¶ 5.
It is a major
distributor of satellite programming doing business throughout the
United States.
Id.
It provides interstate direct broadcast
satellite programming to subscribers with specialized satellite
receiving equipment who pay for programming via a subscription fee
and who obtain a programming license from DIRECTV in return for the
subscription.
their
Users with a subscription can watch programs on
television
electronically
communicated
satellite (“satellite programming”).
by
DIRECTV
via
DIRECTV holds proprietary
rights to the satellite programming it transmits, and DIRECTV is
the owner and/or lawfully designated distribution agent for such
satellite programming.
DIRECTV’s
Id.
satellite
programming
residential and commercial customers.
Motion for Default Judgment, p. 3.
is
available
to
both
Memorandum in Support of
In order to receive and view
DIRECTV satellite programming, each customer is required to obtain
DIRECTV satellite hardware (including a small satellite dish and
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DIRECTV integrated receiver/decoder (?IRD”) with DIRECTV Access
Card) and is required to establish an account with DIRECTV.
DIRECTV sells and distributes DIRECTV satellite equipment necessary
to receive DIRECTV programming. Upon activation of the Access Card
by DIRECTV, the customer can receive and view in a decrypted format
(i.e., unscrambled) those channels to which the customer has
subscribed or otherwise made arrangement to purchase.
Id.
Customers wishing to receive DIRECTV’s programming pay a
monthly subscription fee; however, commercial accounts are charged
a higher amount since in business establishments the programming is
displayed to the public.
Residential and commercial accounts
receive the same satellite equipment used to receive the DIRECTV
programming signals; therefore, it would not be difficult for a
residential subscriber to move the residential equipment to a
commercial
establishment.
It
would
also
be
possible
for
a
commercial establishment to establish an account at or near its
place of business and/or create a residential account at its
business
address,
programming
and/or
accessible
display
via
the
or
use
internet
DIRECTV
satellite
without
proper
authorization, thereby fraudulently receiving DIRECTV’s satellite
programming at a reduced rate.
Id.
On June 23, 2011, at approximately 2:30 pm, Brian D. Fox, an
auditor for DIRECTV, observed a single television set in the
defendants’ establishment, 98 Tavern & Seafood Bar, which was
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exhibiting
DIRECTV
satellite
authorization from DIRECTV.
programming
Id.
without
proper
The plaintiff has filed an
Affidavit of DIRECTV’s Vice President of Risk Management, Kent P.
Mader (docket entry 10), as well as Fox’s Affidavit (docket entry
10-1), and additional exhibits in the form of still photographs
(docket entry 10-2), video (docket entry 10-3), and account records
(docket entry 10-4).
In limited circumstances, not present here, Federal Rule of
Civil Procedure 55(b)(1) permits the Clerk of Court to enter a
default judgment against a defendant party.
In all other cases,
the claimant must apply to the Court for a default judgment.
Fed.R.Civ.P. 55(b)(2). A claimant is not entitled to a judgment by
default as a matter of right.
“The dispositions of motions for
entries of defaults and default judgments ... are left to the sound
discretion of a district court because it is in the best position
to assess the individual circumstances of a given case and to
evaluate the credibility and good faith of the parties.” Enron Oil
Corp. v. Diakuhara, 10 F.3d 90, 95 (2nd Cir. 1993).
As
a
preliminary
matter,
the
jurisdiction over the controversy.
action
pursuant
to
Title
47
Court
must
address
its
The plaintiff brings this
U.S.C.
§
605(a)
of
the
Cable
Communications Policy Act, as amended by the Satellite Home Viewer
Act of 1988, Pub.L. 100-667, 102 Stat. 3959-60 (hereafter, “the
Communications Act”).
Section 605(a) imposes liability upon a
4
person who, without authorization, receives any interstate or
foreign communication transmitted by wire or radio and uses such
communication for his own benefit or for the benefit of another not
entitled thereto. 47 U.S.C. § 605(a). Section 605(e)(3)(A) of the
Communications Act entitles “any person aggrieved” to file a civil
action in federal district court to address an alleged violation of
47 U.S.C. § 605(a).
The term “any person aggrieved” includes “any
person with proprietary rights in the intercepted communication by
wire or radio, including wholesale or retail distributors of
satellite cable programing.”
47 U.S.C. § 605(d)(6).
Thus, this
Court's jurisdiction is properly invoked.
The Court turns now to the consideration of whether a default
judgment in favor of the plaintiff is appropriate in this case.
The Fifth Circuit Court of Appeals has observed that
[r]eview of a default judgment puts competing policy
interests at play.
On one hand, “we have adopted a
policy in favor of resolving cases on their merits and
against the use of default judgments.” On the other,
this policy is “counterbalanced by considerations of
social goals, justice and expediency, a weighing process
[that] lies largely within the domain of the trial
judge’s discretion.”
Wooten v. McDonald Transit Assoc. Inc., 775 F.3D 689, 693 (5th Cir.
2015)(quoting In re Chinese-Manufactured Drywall Prods. Liab.
Litig., 742 F.3d 576, 594 (5th Cir. 2014))(internal citations and
additional citations omitted).
“A default judgment is unassailable on the merits but only so
far as it is supported by well-pleaded allegations, assumed to be
5
true.”
Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d
1200, 1206 (5th Cir. 1975)(citing Thomson v. Wooster, 114 U.S. 104,
113 (1885)).
In other words, “a defendant’s default does not in
itself warrant the court in entering a default judgment.
There
must be a sufficient basis in the pleadings for the judgment
entered.”
Id.
“The defendant is not held to admit facts that are
not well-pleaded or to admit conclusions of law.”
Id.
Since the defaulting parties are absent, the Court logically
should consider the matter from the reverse angle, i.e., “‘consider
whether factors are present that would later oblige the court to
set that default judgment aside.’”
DIRECTV, LLC v. Meadows, 2014
WL 3894851, *3 (W.D. N.C. Aug. 8, 2014)(quoting 10 Moore’s Federal
Practice,
§
55.31[2]
(Matthew
Bender
3d
Ed.
2013)(footnote
omitted)).
The Fifth Circuit has
noted:
Rule 60(b) provides several statutory bases for vacating
a default judgment, including mistake, inadvertence,
surprise, or excusable neglect. Fed.R.Civ.P. 60(b). As
we have previously explained, Rules 55(c) and 60(b) allow
a district court to set aside an entry of default or
default judgment for “good cause.” [Lacy v. Sitel Corp.,
227 F.3d 290, 291-92 (5th Cir. 2000)].
To determine
whether or not good cause is present, we consider three
factors: (1) whether the default was willful; (2) whether
setting aside the default judgment would prejudice
Plaintiffs; and (3) whether [the defendant] presented a
meritorious defense. Id. at 292. We may also consider
other factors, including whether [the defendant] acted
expeditiously to correct the default. Id.
Chinese-Manufactured Drywall, 742 F.3d at 594.
The Fifth Circuit
has also held that “[a] finding of willful default ends the
6
inquiry, for when the court finds an intentional failure of
responsive pleadings there need be no other finding.”
Lacy, 227
F.3d at 292.
Based
on
defendants’
the
lack
record
before
any
activity
of
this
Court,
following
including
service
of
the
the
Complaint, the Court finds that the defendants have taken no action
in response to any of the plaintiff's initiatives.
The Court
concludes that the history of this case suggests a conscious
decision on the part of defendants to ignore the plaintiff’s
allegations and to ignore their duty to respond thereto.
The
defendants’ failure to respond was therefore willful, and not
merely “dilatory action” on the part of defendants.
The Court
therefore does not reach the remaining two factors, prejudice and
a meritorious defense.
In this matter, the plaintiff has pleaded facts consistent
with the statute’s requirements.
In short, the plaintiff has
alleged that defendants removed from a residence one of DIRECTV’s
specialized receivers leased solely for residential purposes, and
installed the receiver in their restaurant to provide patrons with
DIRECTV’s television programming entertainment.
The plaintiff’s
documentation establishes that Margaret Rogers was a residential
subscriber of DIRECTV’s programming and therefore had no permission
to
use
the
plaintiff’s
specialized
communications for commercial purposes.
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equipment
or
satellite
See Affidavit of Kent P.
Mader (docket entry 10).
The plaintiff’s Complaint alleges that
the defendants “received, assisted in receiving, transmitted,
assisted in transmitting, divulged, published and displayed the
content and substance of DIRECTV Satellite Programming” at their
place of business “without entitlement, without prior permission or
authorization from DIRECTV, and without having paid DIRECTV for the
right to receive, broadcast, use or display DIRECTV’s Satellite
Programming” in their commercial establishment.
Complaint (docket
entry 1), pp. 4-5.
The plaintiff also alleges, upon information and belief, that
Dunaway is the owner of the business 98 Tavern & Seafood Bar, that
Rogers is the owner of the property on which the business is
located, and that both Dunaway and Rogers were the individuals with
supervisory
capacity
and
control
over
business during the relevant time period.
the
activities
of
Complaint, p. 3.
the
These
allegations, though alleged upon information and belief, are deemed
admitted.
See Fong v. United States, 300 F.2d 400, 409 (9th Cir.
1962)(finding allegations on information and belief sufficient to
hold defendant individually liable on default judgment because they
stated facts primarily within defendant’s knowledge). Based on the
foregoing, the Court finds a sufficient basis in the pleadings for
a default judgment in favor of the plaintiff.
The Court now turns to the consideration of damages.
Section
605 allows plaintiffs to elect to recover either actual damages and
8
lost profits, or statutory damages.
47 U.S.C. § 605(e)(3)(C)(I).
Section 605(e)(3)(C)(i)(II) authorizes statutory damages of no less
than $1,000 and no more than $10,000 for each violation of section
605(a).
Furthermore, section 605(e)(3)(C)(i)(II) vests the court
with the discretion to determine the amount of statutory damages,
authorizing the court to award an amount “as the court considers
just.”
See Home Box Office v. Champs of New Haven, Inc., 837
F.Supp. 480, 484 (D. Conn. 1993); Joe Hand Promotions, Inc. v.
Nekos, 18 F.Supp.2d 214, 217 (N.D. N.Y. 1998)(the court has
“discretion to adjust the amount awarded to the plaintiff”).
addition,
section
605(e)(3)(C)(ii)
vests
the
court
with
In
the
discretion to increase the award of damages 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 is authorized to award enhanced damages of up to $100,000
for each willful violation.
In this case, the plaintiff has opted for statutory damages.
An award of statutory damages must be between $1,000 and $10,000,
as the Court considers just.
47 U.S.C. § 605(e)(3)(C)(i)(II).
Here, there are no allegations that the defendants have previously
engaged in similar conduct.
Where the defendants are first-time
offenders, courts have found grounds for awarding the statutory
minimum.
See, e.g., J&J Sports Productions, Inc. v. Gamino, 2012
WL 913743 *3 (E.D. Cal. March 16, 2012)(awarding statutory minimum
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“[i]n light of the size of the establishment, the audience that
viewed the program [twelve], and the lack of evidence of financial
gain”); G & G Closed Circuit Events, LLC v. Nguyen, 2012 WL 2339699
*3 (N.D. Cal. May 30, 2012)(awarding statutory minimum where
plaintiff “does not allege that Defendant promoted the Program or
increased prices for food or drinks ... [n]or does Plaintiff allege
that there was a cover charge to enter the establishment”).
In J&J Sports Productions, Inc. v. Cotorra Cocina Mexicana &
Bar LLC, 2012 WL 1098446 (S.D. Miss. March 30, 2012)(Reeves, J.),
decided on a motion for default judgment, the Court found evidence
that the defendant unlawfully broadcasted a championship fight on
one large screen television and two smaller televisions, and that
“the total number of patrons varied at 2, 6, and 8 throughout the
evening.”
Id. at *2.
Judge Reeves found:
With respect to damages pursuant to 47 U.S.C. §
605(e)(3)(C)(i)(II), there is nothing about the facts of
this case that supports an award beyond the statutory
minimum. There is no evidence that Cotorra Cocina either
advertised or promoted the broadcast in an attempt to
increase its patronage.
It did not charge a cover
charge.
There is no evidence that the restaurant
intended to directly profit from the violation or that it
made any profit from the violation. The fact that no
more than eight patrons were in the restaurant suggests
strongly that there was no profit to be made. Moreover,
there is no evidence that Cotorra Cocina was a repeat
offender. Consequently, pursuant to 47 U.S.C. § 605(e)
(3)(C)(i)(II), $1,000.00 is just.
Id. at *3.
In the case sub judice, the plaintiff’s investigator describes
the 98 Tavern & Seafood Bar as a “small establishment with one end
10
being the bar area with a very short bar for about a dozen people,
and the other end being the seafood market area with freezers /
refrigerators and bins / sinks.”
(Affidavit of Brain D. Fox).
He
observed an unidentified woman behind the bar (the only occupant of
the establishment) watching a Wimbledon tennis match.
No patrons
were observed at the tavern during the investigator’s visit of June
23, 2011.
(Id.).
The investigator does not state that he was
charged a cover charge. (Id.). The only advertising, as indicated
by the investigator’s photographs, was for boiled peanuts, jumbo
shrimp, crawfish and cracklins, not for any television programming.
(Plaintiff’s Exhibit C).
There is no evidence of defendants’
financial gain, and it is not alleged that defendants are repeat
offenders. The Court therefore finds that the statutory minimum of
$1,000 in damages is appropriate.
The plaintiff also seeks an enhancement of damages up to the
statutory
maximum
605(e)(3)(C)(ii).
of
$100,000
pursuant
to
47
U.S.C.
§
To receive enhanced damages, the plaintiff must
establish that the violation was willful and that the defendants’
display of the programming was for “purposes of direct or indirect
commercial advantage or private financial gain.”
Id.
Courts
typically consider the following factors in determining whether a
defendant’s willful conduct justifies enhanced damages: “repeated
violations over an extended period of time; substantial unlawful
monetary
gains;
significant
actual
11
damages
to
plaintiff;
defendant’s advertising for the intended broadcast of the event;
defendant’s charging a cover charge or charging premiums for food
and drinks.”
Kingvision Pay-Per-View, Ltd. v. Recio, 2003 WL
21383826 *5 (S.D. N.Y. June 11, 2003)(citations omitted).
Finding
none of the factors to be present, the Court declines to award
enhanced damages.
The plaintiff, in its Complaint, sought pre-judgment interest,
but omitted pre-judgment interest from its Motion for Default
Judgment.
The Court considers the issue waived.
See Herrera v.
Tri-State Kitchen and Bath, Inc., 2015 WL 1529653, *13 (E.D. N.Y.
March 31, 2015)(failure to seek pre-judgment interest in motion for
default judgment constituted waiver); Mays v. JP & Sons, Inc., 178
Fed.Appx. 378, 382 (5th Cir. 2006)(failure to seek pre-judgment
interest in pre-trial order constituted waiver); Innovations,
Designs & Interiors, Inc. v. Southern Guaranty Insurance Co., 2002
WL 1611498, *1 (N.D. Miss. June 13, 2002)(same).
Even if pre-judgment interest were not waived, the Court finds
that it should be denied. Section 605 does not provide a statutory
basis for pre-judgment interest.
J&J Sports Productions, Inc. v.
Morley’s Tavern, 2014 WL 4065096, *11 (E.D. N.Y. May 9, 2014). Such
an award is discretionary and is usually reserved for “exceptional”
cases. J&J Sports Productions, Inc. v. Lovell, 2014 WL 4905351, *6
(E.D. N.Y. Sept. 11, 2014). The plaintiff adduces no evidence that
this case is “exceptional” and warrants the award of pre-judgment
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interest.
The Court therefore alternatively denies pre-judgment
interest.
The
plaintiff
also
sought
post-judgment
interest
in
its
Complaint, and omitted it from its Motion for Default Judgment.
Unlike pre-judgment interest, however, post-judgment interest is
not discretionary.
Title 28 U.S.C. § 1961 states that post-
judgment interest “shall be allowed” on any money judgment in a
civil
case
recovered
in
a
district
court.
The
Court
shall
therefore award the plaintiff post-judgment interest.
The plaintiff also seeks attorneys fees and costs.
As the
prevailing party, DIRECTV is entitled to an award of its costs,
including reasonable attorneys fees.
(iii).
47 U.S.C. § 605(e)(3)(B)
The Court has reviewed the plaintiff’s submissions, and
finds that the costs and attorneys fees, totaling $3,703.65, are
reasonable
as
to
the
amount
of
attorneys, and the hours expended.
costs,
the
billing
rate
of
The Court further finds that
the costs and attorneys fees are in line with similar cases in this
district.
See, e.g., Cotorra Cocina Mexicana & Bar LLC, 2012 WL
1098446, at *4 (awarding $3,295.00 in costs and attorneys fees).
Accordingly,
IT IS HEREBY ORDERED that the plaintiff’s Motion for Default
Judgment (docket entry 9) is GRANTED;
FURTHER ORDERED that the defendants, Roosevelt B. Dunaway and
Margaret Rogers, Individually and d/b/a 98 TAVERN & SEAFOOD BAR,
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are
jointly
and
severally
liable
to
the
plaintiff
for
the
following:
(1) Statutory damages in the amount of $1,000.00, pursuant to
47 U.S.C. § 605(e)(3)(C)(i)(II);
(2) Costs and attorneys fees in the amount of $3,703.65,
pursuant to 47 U.S.C. § 605(e)(3)(B)(iii);
(3) Post-judgment interest on the total award of $4,703.65,
pursuant to 28 U.S.C. § 1961, commencing upon entry of the Final
Default Judgment in this case until the date of payment.
Such
interest shall be calculated from the date of entry of judgment, at
a rate equal to the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding the date of
judgment. Interest shall be computed daily to the date of payment,
and shall be compounded annually.
For the week preceding the date
of this Memorandum Opinion and Order, and the Court’s Final Default
Judgment, the weekly average 1-year constant maturity Treasury
yield was 0.41%.
A Final Default Judgment shall issue this day.
SO ORDERED, this the 25th day of September, 2015.
/s/ David Bramlette
UNITED STATES DISTRICT JUDGE
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