Zuffa, LLC v. Pryce

Filing 11

MEMORANDUM-DECISION & ORDER that pltfs' 10 Motion for Default Judgment is GRANTED; and that deft is awarded the sum of $11,948.70, representing $2,000.00 in statutory damages, plus $4,000.00 in enhanced damages, plus $5,948.70 in attorneys' fees and costs. Signed by Senior Judge Norman A. Mordue on 9/20/2013. (see)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
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ZUFFA, L.L.C. d/b/a THE ULTIMATE FIGHTING
CHAMPIONSHIP (“UFC”),
Plaintiff,
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Civ. No. 8: 12-CV-1584
(NAM/RFT)

KARL PRYCE,
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Defendant.
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APPEARANCES:

OF COUNSEL:

LONSTEIN LAW OFFICE, P.C.
80 North Main Street, P.O. Box 351
Ellenville, New York 12428
Attorney for Plaintiff

Julie Cohen Lonstein, Esq.

NORMAN A. MORDUE, Senior United States District Judge:
MEMORANDUM-DECISION and ORDER
I.

INTRODUCTION
Plaintiff moves for default judgment against defendant pursuant to Rule 55(b) (2) of the

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Fed. R. Civ. P.. Plaintiff seeks statutory money damages for defendant's willful violation in
obtaining the unauthorized viewing of a pay-per-view proprietary broadcast pursuant to Title 47
of the United States Code §§ 553 and 605 for copyright infringement and under the copyright
laws of the United States..
II.

DISCUSSION

A.

Applicable Legal Standard
A default constitutes an admission of all well-pleaded factual allegations in the complaint,

except for those relating to damages. Greyhound Exhibitgroup. Inc. v. E.L.U.L. Reality Corp., 973
F.2d 155, 158 (2d Cir.), cert. denied., 113 S.Ct. 1049 (1993); 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. See Au Bon Pain,
653 F.2d at 69-70. The movant need prove “only that the compensation sought relate to the
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damages that naturally flow from the injuries pleaded.” Greyhound, 973 F.2d at 159.
A court must ensure that there is a reasonable basis for the damages specified in a default
judgment. Actual damages or statutory damages may be assessed. 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

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affidavits or documentary evidence. Action S.A. v. Marc Rich and Co., Inc., 951 F.2d 504, 508
(2d Cir.), cert. denied, 503 U.S. 1006 (1992) (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. See Au Bon Pain, 653 F.2d at 65 (citing Trans World Airlines, Inc. v. Hughes,
308 F.Supp. 679, 683 (2d Cir. 1969)).
B.

Liability

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Defendant has failed to answer plaintiff’s complaint and plaintiff has obtained a Clerk's
Entry of Default (Dkt. #7). Thus, the Court deems true all relevant and well-pleaded factual
allegations in plaintiff's complaint. See H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 107 (2d
Cir. 2006). The complaint sets forth well-pleaded facts supporting plaintiff’s claim that defendant
knowingly, willfully and unlawfully received, viewed and illegally accessed UFC broadcasts

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#130 and #131, the subject copyrighted broadcasts, on May 28, 2011, and June 11, 2011, without
paying plaintiff the appropriate pay-per-view fees. Defendant's default constitutes an admission
of these factual allegations. See Au Bon Pain Corp., 653 F.2d at 65. Accordingly, plaintiff has
demonstrated that it is entitled to the relief requested, that is, judgment against defendant, for any
and all such damages recovered by the plaintiff herein, together with all costs and disbursements
and attorney's fees in connection with this action.
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C.

Damages
After establishing liability, a court must conduct an inquiry to ascertain the amount of

damages with reasonable certainty. Transatlantic Marine Claims Agency, Inc. v. Ace Shipping
Corp., 109 F.3d 105, 111 (2d Cir. 1997). To determine the amount of damages in the context of a
default judgment, “the court may conduct such hearings or order such references as it deems
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necessary and proper.” Fed. R. Civ. P. 55(b)(2). “It [is] not necessary for the District Court to
hold a hearing, as long as it ensured that there [is] a basis for the damages specified in the default
judgment.” Fustok v. ContiCommodity Serv., Inc., 873 F.2d 38, 40 (2d Cir. 1989).
Plaintiff seeks damages, as well as attorney's fees and costs, for defendants' violation of 47
U.S.C. §§ 553(a)(1) and 605(a). Section 553 prohibits persons from intercepting or receiving
“any communications service offered over a cable system, unless specifically authorized to do so

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...” 47 U.S.C. § 553(a)(1). Section 605 proscribes the unauthorized interception and publication
of any “radio communication.” See id. § 605(a). Defendants' default is deemed an admission of
the use of an unauthorized device to intercept coded and scrambled internet transmissions.
Greyhound, 973 F.2d at 158; Au Bon Pain Corp., 653 F.2d at 65; see also Transatlantic Marine
Claims Agency, Inc., 109 F.3d at 108 (recognizing that the factual allegations in the complaint,

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except those relating to damages, are deemed true after default). Defendant has thus admitted to
violating both sections 553 and 605.
Where a defendant admits to violating both sections, a plaintiff may elect to recover
damages under section 605. See Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 131 n. 5 (2d Cir.),
cert. denied sub nom. Noel v. Int'l Cablevision, 519 U.S. 929 (1996). Section 605 states that
where plaintiff is unable to provide evidence of the extent of any violations, the plaintiff may
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elect to recover statutory damages, instead of actual damages. 47 U.S.C. § 605 (e) (3) (C) (i) (II).
The range of statutory damages for a violation of section 605(a) is $1,000 to $10,000. A court
has discretion to determine the number of violations and assess damages for each violation. See
id. The statute does not clearly define “violation;” rather, a court decides which acts of a
defendant constitute a violation.

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A court has two options when assessing damages under section 605. First, it can multiply
the number of patrons present at the unauthorized broadcasting by a specific dollar amount,
typically the customary charge for the pay-per-view event being shown. See, e.g., Time Warner
Cable of New York City v. Taco Rapido Rest., 988 F.Supp. 107, 111 (E.D.N.Y. 1997) (awarding
statutory damages of $50 per patron); Cablevision Systems Corp. v. 45 Midland Enterprises, 858
F.Supp. 42, 45 (S.D.N.Y.1994) (awarding statutory damages of $50 per patron). Alternatively,

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where the exact number of patrons is unknown, the court can impose damages based on what it
“considers just.” Kingvision Pay-Per-View, Ltd. v. Scott E's Pub, Inc., 146 F.Supp.2d 955
(E.D.Wis.2001) (awarding $5,250 in statutory damages); Home Box Office v. Champs of New
Haven, Inc., 837 F.Supp. 480, 484 (D.Conn.1993) (awarding $10,000.00 in statutory damages).
An additional amount of up to $100,000 in enhanced damages is available where the

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violation was willful and was committed for commercial advantage or financial gain. See id. §
605(e)(3)(C) (ii). Plaintiff in this case seeks an award of statutory damages, including an
enhanced damages award based on defendants' willfulness. In exercising discretion in awarding
damages, courts should be mindful of the difficulty in detecting such violations and the
widespread problem of piracy. See Cablevision Sys. New York City Corp. v. Faschitti, No. 94
Civ. 6830 (DC), 1996 WL 48689, at *2 (S.D.N.Y. Feb. 7, 1996). A court should therefore grant
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damages in an amount which achieves the deterrent purposes of the statute. See Cablevision Sys.
New York City Corp. v. Lokshin, 980 F.Supp. 107, 113 (E.D.N.Y.1997).
In this case, unlike those cited by plaintiff, there is no evidence that defendant is a
commercial entity who accessed the subject copyrighted broadcasts for proprietary or financial
gain. Indeed, plaintiff concedes that defendant viewed the subject broadcasts over the internet on

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his computer in his residence. The Court thus concludes that the appropriate award of statutory
damages in this case is the minimum amount, that is, $1,000.00 for each violation or a total of
$2,000.00.
D.

Enhanced Damages
Plaintiff also seeks an increased award pursuant to 47 U.S.C. § 605(e)(3)(C)(ii), which

provides in relevant part:
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In any case in which the court finds that the violation was committed
willfully and for purposes of direct or indirect commercial advantage
or private financial gain, the court in its discretion may increase the
award of damages, ... by an amount of not more than $100,000 for
each violation of subsection (a) of this section.
Willfulness is defined as “disregard for the governing statute and an indifference for its
requirements,” Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 127 (1985), and is

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established by the fact that an event is broadcast without authorization. See Time Warner Cable
of New York City v. Googies Luncheonette, Inc., 77 F.Supp.2d 485, 490 (S.D.N.Y. 1999)
(“Signals do not descramble spontaneously, nor do television sets connect themselves to cable
distribution systems.”). Courts use a variety of factors in determining whether a defendant's
willful conduct justifies enhanced damages. These factors include (1) repeated violations over an
extended period of time; (2) substantial unlawful monetary gains; (3) advertising the broadcast;
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and (4) charging an admission fee or charging premiums for food and drinks. Kingvision
Pay–Per–View Ltd. v. El Rey Del Bistec y Caridad, Inc., No. 01–CV–6562, 2001 WL 1586667, at
*3 (S.D.N.Y. Dec.12, 2001).
In this case, defendant never paid the required fees to receive or watch the copyrighted
broadcasts and, accordingly, was not authorized to intercept, receive or transmit communication

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of these broadcasts. In order for him to have received the broadcast via the internet on his home
computer, he must have engaged in some deliberate act. It is undisputed that defendant used the
website known as www.greenfeedz.com which offered technology that allowed defendant to
avoid payment of the required license fee to view plaintiff’s programs. Therefore, defendant’s
conduct was willful. In addition, the court may draw an inference of willfulness from a
defendant's failure to appear and defend an action in which the plaintiff demands increased

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statutory damages based on allegations of willful conduct. See Fallaci v. The New Gazette
Literary Corp., 568 F.Supp. 1172, 1173 (S.D.N.Y. 1983).
In this case, the factors supporting enhanced damages are not especially compelling. There
is no evidence of previous violations. The most readily identifiable loss sustained by the plaintiff
are the licensing fees it would have received had defendant legitimately obtained rights to view

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the broadcasts which the Court presumes are minimal but undisclosed on this record. As
referenced above, there is no evidence that defendant obtained any financial gain from his illegal
receipt of the copyrighted broadcasts since he viewed them on his home computer. Nevertheless,
although plaintiff does not present a strong case for enhanced damages, it is entitled to some
enhanced damages because the complaint establishes the defendant’s willfulness in intercepting
the broadcasts. Taking into account the relevant factors, as well as the fact that the statutory
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damages discussed previously are well above the presumed amount defendant would have paid to
view the broadcasts legally, the Court finds that enhanced damages of two times the amount of
statutory damages is appropriate. See Circuito Cerrado, Inc. v. Pizzeria y Pupuseria Santa
Rosita, 2011 WL 923515, at *7 (E.D.N.Y. 2011) (finding that three times the statutory damages
would be an inappropriate calculation of enhanced damages given that the statutory damages

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were already much greater than license fee cost); J & J Sports Productions, Inc. v. Welch, 2010
WL 4683744, at * 5 (E.D.N.Y. 2010) (awarding two times the statutory damage amount as
enhanced damages where none of the enhanced damages factors was evident). Therefore,
enhanced damages are awarded in the amount of $4,000.00.
E.

Attorneys Fees and Costs
The Federal Communications Act provides that full costs, including attorneys fees, shall

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be awarded to aggrieved party who prevails in an action under 47 U.S.C.§ 605 (a). Plaintiff has
submitted the affidavit of its counsel, Julie Cohen Lonstein, who avers that plaintiff is entitled to
an award of costs and attorneys fees of $7,005.10 (seven thousand five dollars and ten cents).
Plaintiffs request reimbursement of attorney hours at $250 per hour and paralegal hours at $100
per hour. With respect to hourly fees, the Second Circuit has recently held that courts are to

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award the presumptively reasonable fee, that is, the fee that would be paid by a reasonable,
paying client in the relevant community. See Arbor Hill Concerned Citizens Neighborhood Ass'n
v. County of Albany, 522 F.3d 182, 191-93 (2d Cir. 2008). The Court notes that plaintiffs' counsel
Ms. Lonstein, Esq. has extensive experience and expertise in this field of litigation. Due to the
nature of the claims, a substantial amount of expertise, time, and labor is required to pursue the
claims successfully, even though in some cases recoveries may be relatively small. Here, counsel
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has succeeded in obtaining judgment recovering statutory as well as enhanced damages. The
Court is aware of attorneys' fee awards in similar cases in this community; it has been determined
that the prevailing rate in this community in a similar case is $210 per hour for experienced
attorneys and $80 per hour for paralegals. See Directv v. Cruz, 2006 WL 3386774 , *3 (N.D.N.Y.
2006). In light of these factors and the Court's own knowledge of the rates prevailing in the legal

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community, the Court finds that the rate in Cruz is the reasonable fee in the case at bar.
Accordingly, the award of attorneys' fees and costs is $5229.00 (24.90 x $210) for
Attorney Lonstein's services, plus $241.60 (3.02 x $80) for the work by paralegals, in addition to
litigation costs of $478.10 for a total of $5,948.70 in attorneys' fees and costs. Adding statutory
damages of $2,000.00 and enhanced damages of $4,000.00, plaintiff’s total recovery of
$11,948.70.

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III.

CONCLUSION
It is therefore
ORDERED that plaintiffs' motion for default judgment (Dkt. No. 10) is GRANTED; and

it is further
ORDERED that as an for damages on its complaint against defendant, plaintiff is awarded

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the sum of $11,948.70, representing $2,000.00 in statutory damages, plus $4,000.00 in enhanced
damages, plus $5,948.70 in attorneys' fees and costs.
IT IS SO ORDERED.
Date: September 20, 2013

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