PREMIUM SPORTS INC. v. PEREIRA et al

Filing 14

OPINION. Signed by Judge Katharine S. Hayden on 9/30/15. (rg, )

Not for Publication
United States District Court
for the District of New Jersey

PREMIUM SPORTS, INC.,
Plaintiff,

Civil No: 14-6240 (KSH)

v.
CANDIDO PEREIRA and CARLOS LOPES,
individually and as officers, directors, shareholders,
and/or principals of UNIAO DESPORTIVA
FERREIRENSE, INC., d/b/a UNIAO DESPORTIVA
FERREIRENSE,
Opinion
and
UNIAO DESPORTIVA FERREIRENSE, INC., d/b/a
UNIAO DESPORTIVA FERREIRENSE,
Defendants.

Katharine S. Hayden, U.S.D.J.
The plaintiff, Premium Sports, Inc. (“Premium Sports”), seeks statutory damages, costs, and
attorneys’ fees for violations of 47 U.S.C. § 605(a) and 17 U.S.C. § 501 allegedly committed by Candido
Pereira and Carlos Lopes, individually and as officers, directors, shareholders, and/or principals of a bar
in Newark, Uniao Desportiva Ferreirense Inc., d/b/a Uniao Desportiva Ferreirense (“the Bar”), and by
Uniao Desportiva Ferreirense, d/b/a Uniao Desportiva Ferreirense (collectively, “defendants”), pursuant
to a default granted on January 14, 2015. (D. E. 11.) Premium Sports requests $68,197.95 per defendant
in statutory damages, enhanced damages, costs and fees, which if granted would amount to $204,593.85.

I.

Factual and Procedural Background

Premium Sports, through a closed circuit feed, provides bars and restaurants with live, pay per view
sports. It initiated this action on October 8, 2014, alleging that the defendants unlawfully intercepted and
exhibited a Portuguese league soccer match (“the Program”) played on March 2, 2014 in northern
Portugal between Victoria Guimaraes SC and FC Proto. (D.E. 1, “Compl.” ¶ 30.) The full copyright to
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the soccer match and post-game interviews was held in the United States by Premium Sports. (D.E. 122.) The defendants broadcast the Program in the Bar without entering into the requisite licensing
agreement with Premium Sports, the exclusive owner of the right to distribute the Program. (Compl. ¶¶¶
10, 20, 31.)
To ferret out establishments broadcasting copyright materials without the proper licenses, Premium
Sports hires auditors who pose as patrons and collect evidence of piracy. One of them, Tracy Baugh,
went to the Bar, located at 113 Main St., Newark, NJ 07105, on the day of the soccer match and
videotaped the Program playing on two wall mounted televisions. (D.E. 12-3, “Plaintiff’s AffidavitAuditor’s Report” and D.E. 12-4, “Plaintiff’s Affidavit- Video Disc.”) In Baugh’s written report she
estimated the fire code occupancy within a wide range of 1- 50 patrons, but only 12 clients were present.
(Plaintiff’s Affidavit-Auditor’s Report.)
On October 18, 2014 Premium Sports filed a federal complaint alleging the defendants violated 47
U.S.C. § 605(a), which prohibits the unauthorized reception and publication or use of wire or radio
communications, and 17 U.S.C. § 501, which enforces the exclusive rights of copyright owners. Despite
proper service, defendants failed to answer or otherwise respond to the lawsuit, and the Clerk of Court
timely entered default as to all defendants. (D.E. 11.) Premium Sports now seeks default judgment and
statutory damages, costs and attorney fees aggregating $68,197.95 per defendant, $204,593.85 total,
based on violations of 47 U.S.C. § 605(a) and 17 U.S.C. § 501. Premium Sports’s damages requests
break down as follows:

47 U.S.C. § 605(e)(3)(C)(i)(II)
Statutory damages
47 U.S.C. § 605(e)(3)(C)(ii)
Enhanced damages
17 § 504(c)(1)
Statutory damages
17 § 504(c)(2)
Enhanced damages
Costs and attorney fees
Total

Candido Pereira
(Bar owner)
$10,000

Carlos Lopes
(Bar owner)
$10,000

Uniao Desportiva
Ferreirense (the Bar)
$10,000

$15,000

$15,000

$15,000

$10,000

$10,000

$10,000

$30,000

$30,000

$30,000

$3,197.95
$68,197.95

$3,197.95
$68,197.95

$3,197.95
$68,197.95

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II.

DISCUSSION

A. Legal Standard
A default judgment may be ordered where the party “against whom relief is sought has failed to plead
or otherwise defend” against the complaint. Fed.R.Civ.P. 55(b)(2). In entering default judgment the
court considers the factual allegations in the complaint as conceded by the defendants. Direct TV, Inc. v.
Pepe, 431 F.3d 162, 165 (3rd Cir. 2005). However, “[c]ourts do not accept as true allegations about the
amount of damages, and may take steps to discover the appropriate amount.” Broadcase Music, Inc. v.
Publick House Partners, 2015 WL 3396804, at *2 (D.N.J. May 26, 2015)(Walls, J.); see also Condyne I,
Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990)(stating “the factual allegations of the complaint,
except those relating to the amount of damages, will be taken as true”).
The court may hold a hearing as to damages, but this is unnecessary where the court has sufficient
basis for determining the damages. Fed.R.Civ.P. 55(b)(2)(B); Super 8 Worldwide, Inc. v. Urmita, Inc.,
2011 WL 2909316, at *2 (D.N.J. July 18, 2011)(Martini, J.)(quoting Transatlantic Marine Claims
Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997)). Here, Premium Sports does not
seek a hearing, and the complaint and its submissions provide the Court with sufficient information to
grant its claims under 47 U.S.C. § 605(a) and 17 U.S.C. § 501 and award appropriate damages. (D.E. 121, “Support of Motion”; D.E. 12-7, “Memo of Law.”)

B. Statutory Damages and Enhanced Damages Under 47 U.S.C. § 605(a)
Through its well-pled complaint, Premium Sports satisfied the elements necessary to state a claim
under § 605. 47 U.S.C. §605(a)(providing that “no person not being authorized by the sender shall
intercept any radio communication and divulge or publish”); Joe Hand Promotions, Inc. v. Waldron, 2013
WL 1007398, at *6 (D.N.J. Mar. 13, 2013)(Kugler, J.)(requiring the plaintiff show (1) an intercepted
broadcast, (2) lack of authorization to intercept the broadcast, and (3) that the defendant showed the
broadcast to others). Where a violation of § 605 occurs, the aggrieved party may elect to pursue statutory
or actual damages under 47 U.S.C. § 605(e)(3)(C)(i). Against each defendant, Premium Sports has
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elected to seek the maximum, $10,000, in statutory damages, pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II)
plus $15,000 in enhanced statutory damages pursuant to 47 U.S.C. § 605(e)(3)(C)(ii).
The court may award from $1,000 to $10,000 in statutory damages for § 605 violations. See 47
U.S.C. § 605(e)(3)(C)(i)(II). Enhanced damages may be awarded where the defendant acted “willfully
and for purposes of direct or indirect commercial advantage or private financial gain.” 47 U.S.C. §
605(e)(3)(C)(ii). Upon a showing of willful conduct, “the court in its discretion may increase the award of
damages, whether actual or statutory, by an amount of not more than $100,000, as the court considers
just.” 47 U.S.C. § 605(e)(3)(C)(ii)(emphasis added).
Courts take a variety of approaches to determine what constitutes a just award. To begin with, the
court has not found any persuasive authority for awarding statutory damages per defendant where the
essence of the harm was an illegal broadcast out of a bar. Refusing to award damages on a per defendant
basis is particularly appropriate here, where Premium Sports has named three defendants while factually
establishing no more than one bar and one broadcast event. The broadcast happened. Premium Sports
sued.
On the issue of amounts, recent cases in this district have held that statutory damages should
approximate actual damages. See, e.g., Joe Hand Promotions, Inc. v. Cerreto, 2014 WL 4612101, at *4
(D.N.J. Sept. 15, 2014)(Martini, J.); Waldron, 2013 WL 1007398, at *6; J & J Sports Prods., Inc. v.
Edrington, 2012 WL 525970, at *3 (D.N.J. Feb. 16, 2012)(Checci, J.). Running through these decisions
is the principle that the sum of the statutory damages and enhanced damages should compensate the
aggrieved party for its financial losses, deter future violations, and be just in light of the circumstances.
To determine actual damages, an appropriate starting point is to assess the cost of the licensing fee the
defendants ought to have paid in order to broadcast legally. See, e.g., J & J Sports Prods., Inc. v. Castro,
2015 WL 389381, at *4 (D.N.J. Jan. 28, 2015)(Martini, J.)(finding statutory damages in the amount of the
lost sublicense fee for an establishment of relative size to the defendant’s). Premium Sports does not give

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any information about this cost. Another measurement courts have used is to assess a per patron rate of
$50. See, e.g., Top Rank Inc. v. Tacos Mexicanos, 2003 WL 21143072, at *4-5 (E.D.N.Y. Mar. 28,
2003)(calculating the statutory award based on $50 per patron); Entm't by J&J, Inc. v. Mama Zee Rest. &
Catering Servs., Inc., 2002 WL 2022522, at *3 (E.D.N.Y. May 21, 2002)(same). Using this metric,
damages here would be $600, which falls below the statutory $1,000 minimum. 47 U.S.C. §
605(e)(3)(C)(i)(II). Where calculated damages fall below $1,000 courts have found defendants liable for
the statutory minimum. See, e.g., Kingvision Pay-Per-View Ltd. v. Autar, 426 F.Supp.2d 59, 63-64
(E.D.N.Y. 2006)(holding the defendants jointly and severally liable for $1,000 where the award would
otherwise be $850). Finding this to be a reasonable approach, the Court will do likewise.
Premium Sports was unable to discover how defendants were able to broadcast the Program, but it
nonetheless asserts their conduct was willful and seeks $15,000 in enhanced damages. (Compl. ¶22;
Memo of Law.) As factual assertions from the Complaint must be considered true for default judgments,
this Court credits that the defendants used illicit means to show the Program, especially since they did not
hold the proper license. (Id.) In Kingvision Pay-Per-View Ltd. v. Rodriguez, 2003 WL 54889, at
*2(S.D.N.Y. Feb. 24, 2003), the district court enumerated factors bearing on the issue of purposeful,
willful conduct: (1) whether the defendants intercepted unauthorized broadcasts repeatedly and over an
extended period of time; (2) whether the defendants reaped substantial profits from the unauthorized
exhibition; (3) whether the plaintiff suffered significant actual damages; (4) whether the defendants
advertised the broadcast; and (5) whether the defendants charged cover fee or premiums on food and
drink because of the broadcast. Rodriguez, 2003 WL 54889, at *2; see Castro, 2015 WL 389381, at *4;
Waldron, 2013 WL 1007398, at *7; Edrington, 2012 WL 525970, at *3.
In this case there is no evidence that defendants charged a cover fee or placed a premium on any food
or drink items that were sold to any of the 12 patrons in the Bar; indeed, Premium Sports’s auditor
indicated in her report that she did not have to pay a cover or fee to enter the Bar. And while Premium
Sports alleges that the event was advertised, it provides no factual information to establish the extent of
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the advertisements. Nor has Premium alleged that the defendants illegally broadcast copyright materials
in the past. Despite general claims that it suffered significant damages, Premium Sports produced no
evidence of actual damages beyond the lost license fee nor any assertion backed up by pleaded facts that
the defendant realized financial gain. Considering these factors, a total enhanced damage award of
$1,000 is appropriate. See Castro, 2015 WL 389381, at *4 (finding $2,000 of total enhanced damages
where patrons were charged $20 cover charge and the capacity of the establishment was 100 people); see
also J & J Sports Prods. v. Munguti, 2007 WL 928479, at *3 (D.N.J. Mar. 26, 2007)(Linares,
J.)(awarding enhanced damages of $800 where defendants showed the event to approximately 80 patrons,
but did not charge a cover or advertise the event); Cerreto, 2014 WL 4612101, at *4 (assessing $900 total
enhanced damages for a bar filled almost to capacity, but without cover charge); Rodriguez, 2003 WL
548891, at *2 (assessing $1,000 enhanced damages for willfulness where there was no proof that the
defendants broadcast other events, advertised the event, charged a cover fee or placed a premium on food
or drinks).
Accordingly, the Court awards Premium Sports a total of $2,000 statutory and enhanced damages for
violations of 47 U.S.C. § 605(a).
C. Statutory and Enhanced Damages Under 17 U.S.C. § 504(c)
Premium Sports additionally seeks statutory damages of $10,000 per defendant and enhanced
damages of $30,000 per defendant for violations of the Copyright Act. 17 U.S.C. §504(c). This Court
finds that there is adequate information in the complaint to show a violation of the Copyright Act insofar
as Premium has pled (1) ownership of the allegedly infringed material and (2) that the infringer violated
at least one exclusive right of the copyright holder. 17 U.S.C. § 501.
Under § 504 (c)(1), courts have wide discretion in determining the amount of damages within the
statutory range of $750 to $30,000. Broadcase Music, Inc., 2015 WL 3396804, at *3 (quoting F.W.
Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228 (1952)). On a finding of willful infringement, a
court may increase the award of statutory damages up to $150,000. 17 U.S.C. §504(c)(2).
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Premium Sports seeks statutory and enhanced damages totaling $40,000 per defendant pursuant to §
504(c). Under these facts, the Court awards minimum statutory damages of $750, enhanced by the same
amount, for a total of $1,500 under 17 U.S.C. §504(c). Top Rank, Inc. v. Ortiz, 2003 WL 1960211 at *4
(S.D.N.Y Mar. 27, 2003)(providing twice the statutory minimum of $750 under § 504(c)(1) when the
court awarded twice the statutory minimum for a violation of § 605 and the actual damages were less than
the statutory minimum).

D. Attorney Fees and Court Costs
Finally, Premium Sports seeks to recover $3,197.95 per defendant for costs and attorney’s fees
pursuant to 47 U.S.C. § 605(e)(3)(B)(iii) and 17 U.S.C. §505.) Under 47 U.S.C. § 605(e)(3)(B)(iii) the
court shall award “recovery of full costs, including awarding reasonable attorneys’ fees to an aggrieved
party who prevails.” Premium Sports has submitted an attorney affidavit (D.E. 12-5), adequately detailing
its request for $2,322.95 in legal fees and $875 in costs for a total of $3,197.95. The Court denies without
hesitation the contention, which it assumes was made in error, that Premium Sports could get triple this
amount by assessing legal fees and costs against each defendant, which would be a windfall.
Accordingly, the Court deems the fees and costs to be reasonable as against all defendants and awards
them.

III.

CONCLUSION

For the foregoing reasons, the Court enters judgment in favor of Premium Sports, Inc. pursuant to 47
U.S.C. §605(e) and 17 U.S.C. §504(c). The defendants are jointly and severally liable to Premium Sports
for a total amount of $6,697.95, consisting of $2,000 in statutory damages under §605, $1,500 in statutory
damages under §504, and $3,197.95 in costs and fees. An appropriate order shall be entered.

/s/ Katharine S. Hayden
Katharine S. Hayden, U.S.D.J.

Date: September 30, 2015

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