J&J Sports Productions, Inc. v. AAA Blue Iguana Bar Lounge Inc. et al
REPORT AND RECOMMENDATION: I respectfully recommend that this Court grant the 9 motion for default judgement and award plaintiff judgment against defendants Arvind P. Mangal and AAA Blue Iguana Bar Lounge, Inc. d/b/a Blue Iguana Lounge in the amount of $2,200 in statutory damages, $6,600 in enhanced damages and $520 in costs, for a total judgment of $9,320. Objections to R&R due by 9/29/2014. Ordered by Magistrate Judge Marilyn D. Go on 9/10/2014. (Moo-Young, Jillian)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - -- - X
J & J SPORTS PRODUCTION, INC.,
- against -
CV 13-02738 (SJ)(MDG)
AAA BLUE IGUANA BAR LOUNGE, INC.
d/b/a BLUE IGUANA LOUNGE,
and ARVIND P. MANGAL
- - - - - - - - - - - - - - - - - - -X
GO, United States Magistrate Judge:
Plaintiff brings this action under Title 47 of the United
States Code alleging that defendants AAA Blue Iguana Bar Lounge,
Inc. d/b/a Blue Iguana Lounge and Arvind P. Mangal violated
sections 605 and 553 by intercepting and displaying to their
customers, without plaintiff's authorization, a pay-per-view
After defendants failed to file an answer
or any other responsive pleading, plaintiff filed a motion for
default judgment, which the Honorable Sterling Johnson, Jr. has
referred to me for report and recommendation.
The facts pertinent to the determination of this motion are
undisputed and are set forth in the Complaint, ct. doc. 1
("Compl."); the November 1, 2013 affidavit of Joseph M.
Gagliardi, President of plaintiffct. doc. 11, Ex. 2
Aff."); and the May 11, 2011 affidavit of investigator Earl L.
Covington, ct. doc. 11, Ex. 1 ("Covington Aff.").
Plaintiff is a corporation organized and existing under the
laws of the State of California, with its principal office and
place of business located in San Jose, California.
Defendant AAA Blue Iguana Bar Lounge, Inc. is a corporation
authorized to transact business as "Blue Iguana Lounge" from its
principal place of business located at 3219 Fulton Street,
Brooklyn, New York.
Id. at ¶ 5.
Defendant Arvind P. Mangal is
an officer, director, shareholder and/or principal of Blue Iguana
Plaintiff owns the rights to distribute via closed-circuit
television and encrypted satellite signal the May 7, 2011 boxing
match between Manny Pacquiao and Shane Mosley.
Id. at ¶ 7.
Plaintiff entered into license agreements with various entities
to broadcast the boxing match to their patrons.
Id. at ¶ 10.
The defendants were not authorized to receive or broadcast
the boxing match.
Id. at ¶ 12.
However, on May 7, 2011,
defendant intercepted the Pacquiao/Mosley telecast and broadcast
it to patrons within Blue Iguana Lounge.
Aff. at 1.
Id. at ¶ 14; Covington
As set forth in his affidavit, investigator Earl L.
Covington entered the establishment at approximately 11:17 p.m.
on May 7, 2011 and observed the unauthorized public showing of
the boxing match at Blue Iguana Lounge to approximately 25
Covington Aff. at 1-2.
I. Legal Standards Governing Default
A default constitutes an admission of all well-pleaded
factual allegations in the complaint, except for those relating
Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 158 (2d Cir. 1992); Au Bon Pain Corp. v.
Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981).
A default also
effectively constitutes an admission that damages were
proximately caused by the defaulting party's conduct; that is,
the acts pleaded in a complaint violated the laws upon which a
claim is based and caused injuries as alleged.
F.2d at 159.
The movant need prove "only that the compensation
sought relates to the damages that naturally flow from the
The court must ensure that there is a reasonable basis for
the damages specified in a default judgment.
statutory damages may be assessed.
Actual damages or
In determining damages not
susceptible to simple mathematical calculation, Fed. R. Civ. P.
55(b)(2) gives a court the discretion to determine whether an
evidentiary hearing is necessary or whether to rely on detailed
affidavits or documentary evidence.
Action S.A. v. Marc Rich &
Co., Inc., 951 F.2d 504, 508 (2d Cir. 1991) (quoting Fustok v.
ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)).
The moving party is entitled to all reasonable inferences from
the evidence it offers.
Finkel v. Romanowicz, 577 F.3d 79, 84
(2d Cir. 2009); Au Bon Pain, 653 F.2d at 65; Directv, Inc. v.
Hamilton, 215 F.R.D. 460, 462 (S.D.N.Y. 2003).
Determination of Damages
Both sections 553 and 605 of Title 47 prohibit the
unauthorized reception of cable programming.
specifically applies only to cable transmissions and provides
that, "[n]o 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
Section 605(a) generally provides that, "[n]o person not
being authorized by the sender shall intercept any radio
communication . . . or assist in receiving . . . and use such
communication . . . for his own benefit or the benefit of another
not entitled thereto."
When television programming is
transmitted or intercepted over both cable and satellite mediums,
both sections 553 and 605 apply.
See Int'l Cablevision, Inc. v.
Sykes, 75 F.3d 123, 130 (2nd Cir. 1996) (noting that section 605
applies to "the interception of cable-borne, as well as
over-the-air, pay television" where cable-borne transmissions
originate as satellite transmissions); see also Cmty. Television
Sys., Inc. v. Caruso, 284 F.3d 430, 435 (2d Cir. 2002).
Plaintiff establishes in its submissions that it had the
right to distribute the program and that the program was
displayed in violation of sections 553 and 605 of Title 47.
Compl. at ¶¶ 7, 14; Covington Aff. at 1-2.
Covington observed the boxing match between Pacquiao and Mosley
being displayed at Blue Iguana Lounge, a business alleged to be
operated by defendant, even though defendant had not contracted
with plaintiff to do so.
Compl. at ¶¶ 7, 14; Covington Aff. at
Consequently, this Court finds that there was unlicensed
reception and exhibition of the transmissions at Blue Iguana
Lounge in violation of sections 553 and 605 of Title 47.
However, the liability of defendant Arvind P. Mangal,
individually involves different and additional considerations
from the liability of the corporate defendant.
A party may be
vicariously liable for infringement if he has "the right and
ability to supervise" the infringing activities and had "an
obvious and direct financial interest in the exploitation of
[the] copyrighted materials" or contributorily liable if he
"authorized" the infringing conduct.
See Softel, Inc. v. Dragon
Med. & Sci. Comm., Inc., 118 F.3d 955, 971 (2d Cir. 1997);
Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d
1159, 1162 (2d Cir. 1971); Shapiro, Bernstein & Co. v. H.L. Green
Co., 316 F.2d 304, 307 (2d Cir. 1963).
Plaintiff alleges in the complaint that defendant Arvind P.
Mangal was an officer, director, shareholder and/or principle of
AAA Blue Iguana Lounge and had supervisory capacity and control
over the infringing activities occurring within the bar on May 7,
Compl. at ¶ 5.
Plaintiff also alleges defendant Arvind P.
Mangal received a financial benefit from its operations.
These allegations, even 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); 71 C.J.S. Pleading § 82; see also Garden
City Boxing Club, Inc. v. Extasis Corp., No. 07-CV-3853, 2008 WL
3049905, at *8 n.9 (E.D.N.Y. Aug. 1, 2008)(accepting plaintiff's
allegations as true due to plaintiff's difficulty in producing
evidence in default cases where defendants refuse to cooperate in
the discovery process); Premium Sports, Inc. v. Alzate, No. 10CV-1982, 2011 WL 1240558 at *4 (E.D.N.Y. Feb. 25, 2011)("once a
defendant is found to be in default, it is deemed to have
admitted all of the well-pleaded allegations in the complaint as
In addition, defendant Mangal is named as the
principal of AAA Blue Iguana Bar Lounge, Inc. in the records of
the New York State Liquor Authority, Division of Alcoholic
Beverage Control (see
Accordingly, I infer from such allegations that
defendant Arvind P. Mangal had supervisory control over its
activities and received a financial benefit from its operations
on May 7, 2011.
Thus, I recommend that defendant Arvind P.
Mangal be held vicariously liable for violating Title 47.
Plaintiff requests damages pursuant to sections 553 and 605.
Compl. at ¶ 63.
Where defendant is liable under both sections
553 and 605, the plaintiff is entitled to the greater damages
available under section 605.
Sykes, 75 F.3d at 127; Entm't by J
& J, Inc. v. Mama Zee Rest. & Catering Servs., Inc., No. 01CV–3945, 2002 WL 2022522, at *3 (E.D.N.Y. May 21, 2002) (recovery
under both sections 553 and 605 is impermissible).
this report and recommendation addresses damages under section
Section 605 allows plaintiff to elect to recover either
actual damages and lost profits or statutory damages.
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).
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); see also 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").
section 605(e)(3)(C)(ii) vests the court with 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."
court is authorized to award enhanced damages of up to $100,000
for each willful violation.
In exercising such discretion, courts should be mindful of
the difficulty in detecting such violations and the widespread
problem of piracy.
See Cablevision Sys. N.Y. City Corp. v.
Faschitti, No. 94-CV-6830, 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7,
1996); see also Sykes, 75 F.3d at 132 (quoting legislative
Courts should therefore grant damages in an amount
which achieves the deterrent purposes of the statute.
Cablevision Sys. N.Y. City Corp. v. Lokshin, 980 F. Supp. 107,
113 (E.D.N.Y. 1997).
Although seeking statutory damages for defendants' willful
violation of section 605, plaintiff also attempts to prove actual
damages for lost profits which it claims amount to $5,573.75, and
enhanced damages in the amount of $11,147.50, plus interest.
ct. doc. 11 (Pl.'s Mem.) at 9, 17.
requests $2,200 for the licensing fee the plaintiff would have
charged the establishment, $1,373.25 for residential fees that
would have been charged based on a per patron basis and $2,000
for loss of goodwill.
See Pl.'s Mem. at 10-13.
actual damages and lost profits, plaintiff seeks recovery based
on the number of patrons multiplied by the residential charge for
the pay-per-view event.
This is a method typically used to
calculate statutory damages, as discussed below, and, critically,
overlaps with damages for lost license fees, since plaintiff
would not be able to recover from individuals viewing the match
at an establishment paying a licence to plaintiff.
Sports USA v. Modelos Restaurante, Inc., No. 11-CV–1454, 2012 WL
3637585, at *4 (E.D.N.Y. Aug. 1, 2012) (plaintiff incorrectly
used a method to determine actual damages that courts have used
to determine statutory damages).
Further, in claiming damages of
$2,000 for loss of goodwill, plaintiff provides only general
information about the theft of cable services and the conclusory
statement that it would be forced to curtail distribution of its
programming if the theft continued unabated.
Pl.'s Mem. at 13.
However, plaintiff provides no information on actual damages that
it suffered to its goodwill or reputation.
Since the degree of
harm caused by defendants' conduct on the commercial pay-per-view
market can be a factor in determining enhanced damages and
enhanced damages serve to deter such future violations, I
recommend that loss of goodwill not be awarded as a part of
See Innovation Sports Mktg. v. Aquarius Fuente
De Soda, Inc., No. 07–CV–2561, 2009 WL 3173968, at *8 (E.D.N.Y.
Sept. 30, 2009).
On this record, I find that the plaintiff has
shown actual damages of only $2,200 and next consider plaintiff's
request for statutory damages under section 605.
When determining statutory damages, some courts have simply
assessed a flat damages amount per violation.
Pay-Per-View, Ltd. v. Jasper Grocery, 152 F. Supp. 2d 438, 442
(S.D.N.Y. 2001) (awarding $5,000 statutory damages for a one-time
boxing match exhibited to 30 customers); Kingvision Pay–Per–View
Ltd. v. Brito, No. 05–CV–1042, 2006 WL 728408, at *2 (S.D.N.Y.
Mar. 20, 2006) (awarding $5000 in statutory damages); Joe Hand
Promotions, Inc. v. Hernandez, No. 03-CV-6132, 2004 WL 1488110 at
*3 (S.D.N.Y. June 30, 2004) (awarding $1,000 statutory damages
and $1,500 enhanced damages for a one-time boxing match exhibited
to about 20 customers).
As plaintiff recognizes, when presented with sufficient
evidence indicating the number of patrons present at the time of
the unauthorized programming, other courts have employed a
formula that multiplies that number by a dollar amount, usually
based on the customary charge for the event in question, as an
useful "starting point" for calculating damages.
Time Warner Cable of N.Y. City v. Googies Luncheonette, Inc., 77
F. Supp. 2d 485, 489 (S.D.N.Y. 1999) (awarding $50 per patron);
Time Warner Cable of N.Y. City v. Taco Rapido Rest., 988 F. Supp.
107, 111 (E.D.N.Y. 1997) (same); J&J Sports Prods., Inc. v. LDG
Williams, LLC, No. 11–CV–2145, 2011 WL 5402031, at *4 (E.D.N.Y.
Nov. 7, 2011) (awarding $54.95 per patron); Mama Zee, 2002 WL
2022522, at *3 (awarding $50 per patron).
A number of judges in
this district have awarded damages based on the number of patrons
or the capacity of an establishment multiplied by the residential
fee for a pay-per-view broadcast.
See, e.g., Circuito Cerrado,
Inc., 804 F. Supp. 2d at 115 (recommending statutory damages
based on $54.95 per patron); Joe Hand Promotions, Inc. v. La
Nortena Rest. Inc., No. 10–CV–4965, 2011 WL 1594827, at *4
(E.D.N.Y. Mar. 28, 2011) (recommending statutory damages award
based on $50 for each patron); Garden City Boxing Club, Inc. v.
Bello, No. 05-CV-1300, 2005 WL 2496062, at *3 (E.D.N.Y. Sept. 20,
2005) (recommending statutory damages based on $54.95 residential
rate for each of the 40 patrons who could have viewed the prize
fight based on the establishment's capacity).
Courts using the
residential fee reason that this is the amount each patron would
have paid to view the boxing match from home had he or she not
had access to a broadcast at the establishment at issue.
Bello, 2005 WL 2496062, at *3.
Although plaintiff has not
submitted any evidence as to the residential rate for this
broadcast, the typical purchase price for a pay-per-view
broadcast of this nature is $54.95.
See, e.g., Circuito Cerrado,
Inc., 804 F. Supp. 2d at 115; Joe Hand Prods., Inc. v.
Zafaranloo, 12-CV-3828, 2014 WL 1330842, at *3 n.5 (E.D.N.Y. Apr.
1, 2014); LDG Williams, LLC, 2011 WL 5402031, at *4.
Plaintiff has submitted evidence that 25 customers were
present at Blue Iguana Lounge when investigator Covington
observed the program being illegally displayed.
Plaintiff alleges it is entitled to receive defendant's
profits in the amount of 25 patrons multiplied by the residential
rate $54.95, or $1,373.75.
However, the courts use this
residential fee formula to determine plaintiff's statutory
damages, but not defendants' profits.
In addition, plaintiff is
not entitled to receive defendants’ profits as damages since it
is not a loss borne by plaintiff.
See Joe Hand Promotions, Inc.
v. Algesk, Inc., No. 12–CV–05356, 2014 WL 1028947, at *5
(E.D.N.Y. Mar. 14, 2014).
Besides the $1,373.75 residential fee, plaintiff also seeks
damages for the $2,200 licensing fee that the defendants would
have has to pay to acquire the rights to display the program.
Pl.'s Mem. at 10.
However, courts typically award damages based
only on a per-patron basis or commercial licensing fee, not both.
See J & J Sports Prods., Inc. v. Meson De Columbia, Inc., No. 10CV-1142, 2010 WL 4791771, at *3 (E.D.N.Y. Oct. 7, 2010)(awarding
the higher licensing fee over a per-patron calculation); cf.
Garden City Boxing Club, Inc. v. Morales, No. 05-CV-0064, 2005 WL
2476264, at *7 (E.D.N.Y. Oct. 7, 2005) (awarding a higher perpatron amount rather than the commercial licensing fee because of
increased damages from stealing broadcasts).
statutory damage based on a per-patron basis would result in
damages that would be lower than plaintiff's actual lost revenues
of the $2,200 licensing fee, I respectfully recommend that
damages be awarded based on the lost licensing fee, or $2,200.
Further, I recommend that the Court grant plaintiff's
request for enhanced damages against defendants.
intercept signals and broadcast programming without authorization
"in a place of business where certain events are shown to the
public" are generally held to have acted willfully and for
purposes of commercial advantage.
Am. Cablevision of Queens v.
McGinn, 817 F. Supp. 317, 320 (E.D.N.Y. 1993) (citing Cablevision
Sys. Corp. v. Maxie's N. Shore Deli Corp., No. 88-CV-2834, 1991
WL 58350 (E.D.N.Y. Mar. 20, 1991)); Zafaranloo, 2014 WL 1330842,
Since knowledge of infringement may be "actual" or
"constructive," it needs not be proven directly and can be
inferred from the defendant's conduct.
See Knitwaves, Inc. v.
Lollytogs, Ltd., 71 F.3d 996, 1010 (2d Cir. 1995); N.A.S. Import
Corp. v. Chenson Enters., Inc., 968 F.2d 250, 252 (2d Cir. 1992).
A defendant's default may also be considered as evidence of
See Tiffany (NJ) Inc. v. Luban, 282 F.
Supp. 2d 123, 124 (S.D.N.Y. 2003); Kenneth J. Lane, Inc. v.
Heavenly Apparel, Inc., No. 03-CV-2132, 2006 WL 728407, at *6
(S.D.N.Y. Mar. 21, 2006); Peer Int'l Corp. v. Max Music & Entm't,
No. 03-CV-0996, 2004 WL 1542253, at *3 (S.D.N.Y. Jul. 9, 2004).
Courts consider a variety of factors to determine whether a
defendant's willful conduct warrants enhanced damages.
factors include: "repeated violations over an extended period of
time; substantial unlawful monetary gains; significant actual
damages to plaintiff; defendant's advertising for the intended
broadcast of the event; [and] defendant's charging a cover charge
or charging premiums for food and drinks."
Pay-Per-View, Ltd. v. Recio, No. 02-CV-6583, 2003 WL 21383826, at
*5 (S.D.N.Y. June 11, 2003) (internal citations omitted).
of goodwill is also a factor for courts to consider when awarding
Aquarius Fuente De Soda, Inc., 2009 WL
3173968, at *8 (damages to goodwill and reputation was a factor
considered in awarding enhanced damages).
The undisputed facts presented by the plaintiff in its
complaint and the supporting affidavits clearly establish that
Blue Iguana Lounge is a commercial establishment that publicly
displayed the Pacquiao/Mosley match to customers without
Plaintiff's submissions and defendants' default
suffice to support the inference that defendants displayed the
boxing match for commercial gain in order to attract customers to
patronize their establishment.
Thus, I recommend that enhanced
damages in the amount of $6,600, three times the statutory
damages recommended, be awarded against the defendants.
Plaintiff seeks pre-judgment interest from the May 7, 2011
Pl.'s Mem. at 18.
Although there is no statute authorizing an award of prejudgment interest for violations of sections 553 and 605 of Title
47, the district court nonetheless has the discretion to impose a
pre-judgment interest award.
See Williams v. Trader Publ'g Co.,
218 F.3d 481, 488 (5th Cir. 2000); J&J Sports Prod., Inc. v. Sin
Fronteras Rest., No. 09-CV-1873, 2010 WL 1565441, at *9 (E.D.N.Y.
Feb. 23, 2010).
The Second Circuit has recognized that pre-
judgment interest may be permitted in the absence of express
statutory authorization "where the awards were fair, equitable
and necessary to compensate the wronged party fully."
Contracting Co., Inc. v. Local Union No. 3, Int'l Bhd. of Elec.
Workers, AFL-CIO, 955 F.2d 831, 835 (2nd Cir. 1992).
discretionary award is normally reserves for "exceptional" cases.
Since the award of statutory damages and enhanced damages
recommended here are not only sufficient to make plaintiff whole,
but are in part punitive, I recommend that pre-judgment interest
not be awarded.
See Wickham Contracting Co., Inc., 955 F.2d at
834 (pre-judgment interest should not be awarded "if the
statutory obligation on which interest is sought, is punitive in
nature"); see also Sin Fronteras Rest., 2010 WL 1565441, at *9.
Attorneys' Fees and Costs
Title 47 U.S.C. § 605(e)(3)(b)(iii) mandates that
"reasonable costs and attorney's fees be awarded to a prevailing
Sykes, 997 F.2d 998 at 1009.
does not request attorneys' fees but seeks costs of $400 for the
Clerk's fee and $120 for process server fees.
("Pl.'s Mot.") at 5.
See ct. doc. 9
Although no other evidence other than
plaintiff's statement of damages was submitted to substantiate
the costs for service of process, affidavits of service were
filed reflecting service on both the individual and corporate
defendants by licensed process server, and the reimbursement
requested is well within the norm.
See J & J Sports Prod., Inc.
v. La Ruleta, Inc., No. 11–CV-4422, 2012 WL 3764062, at *5
(E.D.N.Y. Aug. 7, 2012).
I therefore recommend that the
plaintiff be awarded $520 in total costs.
For the foregoing reasons, I respectfully recommend that
this Court award plaintiff judgment against defendants Arvind P.
Mangal and AAA Blue Iguana Bar Lounge, Inc. d/b/a Blue Iguana
Lounge in the amount of $2,200 in statutory damages, $6,600 in
enhanced damages and $520 in costs, for a total judgment of
This report and recommendation will be filed electronically
and a copy sent by mail to the defendants on this date.
objections must be filed with the Clerk of the Court, with a copy
to the Honorable Sterling Johnson and plaintiff, on or before
September 29, 2014.
Failure to file timely objections may waive
the right to appeal the District Court's Order.
See 28 U.S.C. §
636(b)(1); Fed. R. Civ. P. 72.
Dated: Brooklyn, New York
September 10, 2014
MARILYN D. GO
UNITED STATES MAGISTRATE JUDGE
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