DIRECTV, LLC v. Wright et al
Filing
54
DECISION AND ORDER: For the reasons set forth in the Decision and Order, Paul Wright's request for vacatur of the clerk's default against him is DENIED, but Theresa Wright's request for vacatur of the clerk's default against her i s GRANTED. Further, DIRECTV's renewed request for a default judgment is GRANTED as to Paul Wright but DENIED as to Theresa Wright. Accordingly, within 30 days from the date of this order, DIRECTV shall submit: -an application for attorneys 039; fees and costs with supporting documentation and analysis that sufficiently sets forth, for each attorney, the date, the hours expended, and the nature of the work done, as well as the reasonableness of the fee in light of the attorney's ex perience and skill and the prevailing fees in this district. See, e.g., Wells Fargo Bank v. LLHC Realty, LLC, No. 6:15-cv-06680-FPG-MWP, ECF Nos. 94, 99; -a proposed default judgment against Paul Wright incorporating the requested attorneys' fees award and DIRECTV's proposed injunction, which must comply with Federal Rule of Civil Procedure 65(d); and -notice as to whether DIRECTV intends to pursue its claims against Theresa Wright or dismiss her, and as to whether it intends to dismiss its fifth and sixth claims. SO ORDERED. Copies of the Decision and Order and this NEF have been mailed to the pro se defendants. Signed by Hon. Frank P. Geraci, Jr. on 12/16/19. (GMS)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
DIRECTV, LLC, a California limited liability
company,
Plaintiff,
Case # 15-CV-474-FPG
DECISION AND ORDER
v.
PAUL WRIGHT and THERESA WRIGHT,
d/b/a ANAMETRICS CABLE,
Defendants.
INTRODUCTION
Plaintiff DIRECTV, LLC, brings this action against Defendants Paul and Theresa Wright,
alleging that they unauthorizedly transmitted DIRECTV’s satellite television programming to
subscribers of their cable company, Anametrics Cable, in violation of 47 U.S.C. § 605(a). ECF
No. 1 ¶ 1. This case has been pending for over four years and has not moved past the pleadings
stage. Now before the Court is DIRECTV’s request for entry of a default judgment against the
Wrights (ECF No. 53) and the Wrights’ opposing request for vacatur of the clerk’s defaults that
have already been entered against them (ECF No. 52). For the reasons stated below, DIRECTV’s
request for a default judgment is GRANTED as to Paul Wright but DENIED as to Theresa Wright.
FACTUAL ALLEGATIONS
DIRECTV alleges that between 1996 and 2014, the Wrights, doing business as Anametrics
Cable, engaged in a scheme whereby they unauthorizedly transmitted satellite television
programming signals they had purchased from DIRECTV to customers of their unlicensed cable
company, Anametrics. To do so, they created 12 DIRECTV residential subscriber accounts and
one commercial account—sometimes using fake names and contact information—and obtained
between six and 16 receivers per account. ECF No. 1 ¶¶ 20-32.
At the time they created each
account, they misrepresented to DIRECTV the location where the receivers would be installed and
the manner in which they would be used: they gave DIRECTV certain purported residential or
commercial service addresses but actually installed the receivers in “headends”—master systems
of multiple receivers through which satellite programming is consolidated and then redistributed
through a cable network. Id. ¶ 36; see also ECF No. 40-1 at 23; United States v. Harmelech, 927
F.3d 990, 992 (7th Cir. 2019) (describing headends in the context of a similar scheme involving
DIRECTV).
Although the Wrights paid DIRECTV for the programming, they did not pay as much as
they should have: by creating residential or commercial service accounts as if they were merely
buying television content for their own home or office, they avoided paying DIRECTV on a persubscriber basis—as cable companies typically do—and were thus able to obtain and supply
programming for the Anametrics Cable system at a fraction of the normal cost. ECF No. 1 ¶¶ 3339, 42-47; ECF No. 40-2 ¶ 54-55.
In 2012, DIRECTV received a report of possible theft of its services and began an
investigation through which it learned that the Wrights were fraudulently obtaining its satellite
television programming and distributing it over the Anametrics Cable system. ECF No. 40-1 at
10. Consequently, DIRECTV brought this suit against the Wrights.
PROCEDURAL HISTORY
DIRECTV filed its complaint against the Wrights on May 29, 2015. ECF No. 1. They
were served on September 1, 2015, making their answers due by September 22, 2015. ECF Nos.
10, 11.
On September 18, 2015, the Wrights each filed a motion to dismiss the complaint. ECF
Nos. 12, 13. On June 3, 2016, the Court denied Theresa’s motion in full, denied Paul’s motion in
-2-
part, and ordered supplemental briefing as to some of DIRECTV’s claims. ECF No. 19. On July
5, 2016, DIRECTV voluntarily dismissed the claims on which supplemental briefing had been
ordered. ECF No. 20. Thus, the Court denied the remainder of Paul’s motion to dismiss as moot
and ordered both Wrights to answer or otherwise respond to the complaint by August 3, 2016.
ECF No. 21.
On August 3, 2016, the Wrights both filed motions for extension of time to respond to the
complaint. ECF Nos. 22, 23. The Court granted their motions on August 8, 2016, giving them
until September 6, 2016 to respond. ECF Nos. 22-23.
On September 8, 2016, two days after the deadline, Paul moved to dismiss the complaint,
and on October 3, 2016, he filed another motion to dismiss. ECF Nos. 25, 30. Theresa did not
respond to the complaint at all.
On September 26, 2016, DIRECTV moved for a clerk’s entry of default against Theresa,
and the clerk entered the default the next day. ECF Nos. 27, 28
On June 29, 2017, the Court denied Paul’s two pending motions to dismiss and ordered
him to answer the complaint by July 31, 2017. ECF No. 32.
On July 28, 2017, Theresa—despite having been defaulted—moved for an extension of
time to hire an attorney, which the Court denied. ECF Nos. 34, 39.
Paul failed to answer the complaint by July 31, 2017. Consequently, on August 10, 2017,
DIRECTV moved for a clerk’s entry of default against him, and the clerk entered the default the
next day. ECF Nos. 36, 37.
Two weeks later, on October 19, 2017, DIRECTV moved for default judgment as to both
Paul and Theresa. ECF No. 40. The Court ordered the Wrights to respond to the motion by
November 17, 2017. ECF No. 41. Instead of doing so, on November 17, 2017, the Wrights filed
-3-
another motion to dismiss. ECF No. 42. On February 9, 2018, Theresa moved the Court to appoint
counsel for her. ECF No. 44.
The Court set a hearing on the pending motions for September 7, 2018. At the hearing, the
Court denied the Wrights’ motion to dismiss (ECF No. 42) and told them that they had repeatedly
failed to timely respond to the complaint. The Court denied Theresa’s motion to appoint counsel
(ECF No. 44) and reserved on DIRECTV’s motion for default judgment (ECF No. 40). The Court
expressed concern about the age of the case and the expense DIRECTV had to incur to litigate the
Wrights’ successive motions to dismiss. The Court told the Wrights that if it denied the motion
for default judgment, then they would have to file an answer within a short period of time.
Following the hearing, on September 19, 2018, the Court issued a Decision and Order
denying DIRECTV’s motion for default judgment. ECF No. 46. The Court analyzed the three
factors that are to be considered upon a motion a default judgment: “(1) the willfulness of default,
(2) the existence of any meritorious defenses, and (3) prejudice to the non-defaulting party.”
Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 454 (2d Cir. 2013). As to the first factor,
the Court concluded that, while the Wrights had acted more than negligently, they had not acted
egregiously or deliberately; although they had failed to comply with Court orders, they had not
totally ignored the litigation. As to the second factor, the Court found that the Wrights had
proffered potentially meritorious defenses in their motions to dismiss. As to the third factor, the
Court found no prejudice to DIRECTV other than delay. Thus, the Court denied DIRECTV’s
motion for default judgment and ordered the Wrights to answer the complaint by October 26, 2018.
The Court explicitly warned the Wrights that failure to answer the complaint could result in
sanctions, including the entry of a default judgment against them.
-4-
Nevertheless, on October 26, 2018, the Wrights filed yet another motion to dismiss—the
sixth in this case. ECF No. 47. The Court denied the motion to dismiss on December 21, 2018
and ordered the Wrights to show cause by January 25, 2019 why it should not enter a default
judgment against them. ECF No. 50.
On January 25, 2019, the Wrights filed a response to the Court’s Order to Show Cause and
finally filed an answer. ECF No. 52.
On February 11, 2019, DIRECTV filed a reply to the Wrights’ response to the Order to
Show Cause in which it challenged the sufficiency of the Wrights’ response and renewed its
request for a default judgment. ECF No. 53. This renewed request is now before the Court.
Also before the Court is the Wrights’ response to the Order to Show Cause and their
untimely answer, which the Court treats as a motion to vacate the clerk’s defaults against them.1
See Guangxi Nanning Baiyang Food Co. v. Long River Int’l, Inc., No. 09 Civ. 3059 (TPG), 2010
U.S. Dist. LEXIS 31217, at *7 (S.D.N.Y. March 30, 2010) (“The filing of a late answer is
tantamount to a motion to vacate a default.”).
DISCUSSION
I.
Whether the Wrights’ Litigation Conduct Warrants a Default Judgment
DIRECTV’s motion for default judgment and the Wrights’ request to vacate the clerk’s
defaults are governed by the same three factors: “(1) whether the default was willful, (2) whether
the defendant demonstrates the existence of a meritorious defense, and (3) whether, and to what
extent, vacating the default will cause the nondefaulting party prejudice.” De Curtis v. Ferrandina,
529 F. App’x 85, 86 (2d Cir. 2013) (summary order); see also Pecarsky v. Galaxiworld.com, Ltd.,
1
The clerk’s defaults against the Wrights have not been vacated. See ECF Nos. 28, 37. Although the Court permitted
the Wrights to answer the complaint after they had already been defaulted, see ECF No. 46, they failed to timely do
so, and thus the defaults were never vacated.
-5-
249 F.3d 167, 171 (2d Cir. 2001). “Of these factors, willfulness carries the most weight. Though
each factor is to be considered, a ‘default should not be set aside when it is found to be willful.’”
De Curtis, 529 F. App’x at 86 (quoting Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 507
(2d Cir. 1991)). Here, for the reasons stated below, the Court finds that the balance of factors
warrants the entry of a default judgment against Paul but not against Theresa.
A. Willfulness
When the Court considered DIRECTV’s first motion for default judgment in September
2018, it concluded that the Wrights had not willfully defaulted. Although they had disobeyed the
Court’s orders to answer the complaint (ECF Nos. 21, 24, 32, 46),2 they had consistently
participated in the case and did not appear to be purposefully delaying it. ECF No. 46 at 4. Mindful
of the Wrights’ pro se status, the Court denied DIRECTV’s motion for default judgment, ordered
the Wrights to answer the complaint, and explicitly warned them that failure to do so could result
in sanctions, including the entry of a default judgment. ECF No. 46 at 6.
Since then, things have changed. Despite the Court’s explicit instructions and warning, the
Wrights filed a sixth motion to dismiss. ECF No. 47. The Court could have defaulted the Wrights
immediately thereafter, but instead it offered the Wrights a chance to show cause why it should
not do so.
The Wrights fail to show good cause. They merely apologize to the Court “for not
responding properly” and indicate that they tried in vain to find an attorney and then sought help
from the Court’s Pro se Assistance Program. ECF No. 52 at 4. They provide no explanation for
2
The Court’s July 6, 2016 and August 8, 2016 orders directed the Wrights to answer or otherwise respond to the
complaint. ECF Nos. 21, 24. Theresa did neither. ECF No. 28. While Paul’s September 8, 2016 and October 3,
2016 motions to dismiss (ECF Nos. 25, 30) technically complied with the Court’s July 6, 2016 and August 8, 2016
orders since they “otherwise responded” to the complaint, on June 29, 2017, the Court specifically directed Paul to
file an answer, ECF No. 32, and on September 19, 2018, the Court repeated this directive to both Wrights and explicitly
warned them that failure to obey it could result in a default judgment. ECF No. 46.
-6-
why they waited for years to seek assistance or why they failed to answer the complaint after the
Court had repeatedly ordered them to do so.
As DIRECTV points out, the Wrights are not federal court novices. In 2011, they filed a
lawsuit in this district which they litigated pro se for over four years before it was ultimately
dismissed on summary judgment. Wright v. Szcuzur, No. 11-CV-140S, 2012 U.S. Dist. LEXIS
10872 (W.D.N.Y. Jan. 28, 2012). This multi-defendant case involved motions to dismiss and
answers, so it is clear that the Wrights have dealt with these types of court filings. And in that
case, like here, the Wrights filed several motions for extensions of time on the basis that they were
trying to retain an attorney. See ECF No. 53 at 5-6.
Moreover, in his November 20, 2017 motion to dismiss (ECF No. 42) and at the September
7, 2018 hearing, Paul argued that DIRECTV had failed to follow Local Rule of Civil Procedure
Rule 7, paragraph 8, which requires attorneys to serve pro se litigants with printed copies of any
unpublished legal decisions they cite. Paul’s reference to this specific Local Rule undermines his
affectations of ignorance as to the Federal Rules of Civil Procedure, or at least suggests that he
was capable of figuring out how to file an answer.
Thus, while the Court gave the Wrights the benefit of the doubt up through the September
7, 2018 hearing, the Court now finds that their subsequent conduct demonstrates willfulness.
B. Meritorious Defense
To justify the vacatur of a default, a defendant must demonstrate a meritorious defense.
“This requirement is subject to a low threshold that may be met where defendants deny all material
allegations and stand ready to assert several affirmative defenses.” Sheet Metal, Air, Rail &
Transp. Workers Local Union No. 137 v. Frank Torrone & Sons, Inc., No. 15-CV-2224 (KAM)
-7-
(PK), 2018 U.S. Dist. LEXIS 152240, at *18 (E.D.N.Y. Sep. 4, 2018) (citation and internal
quotation marks omitted).
In its September 19, 2018 Decision and Order, the Court found that the Wrights
demonstrated a meritorious defense because their various motions to dismiss had argued that Paul
never contracted with DIRECTV for the receivers, that DIRECTV is not entitled to damages
because Anametrics Cable ceased business operations in 2014, and that Theresa should not be held
liable because the complaint does not contain allegations that she was involved in the alleged
scheme. ECF No. 46 at 4-5.
However, at this point, the Wrights’ motions to dismiss have all been denied, and the
Wrights’ untimely answer consists only of general denials and no affirmative defenses. ECF No.
52 at 2-3. “Although in an answer general denials normally are enough to raise a meritorious
defense, the moving party on a motion to reopen a default must support its general denials with
some underlying facts.” Sony Corp. v. ELM State Elecs., Inc., 800 F.2d 317, 320-21 (2d Cir. 1986)
(affirming district court’s denial of motion to vacate default). The Wrights have not done so here.
Further, even the defenses that the Court previously accepted as potentially meritorious are
dubious and fail to establish a “complete” defense. See Guangxi, 2010 U.S. Dist. LEXIS 31217, at
*10 (“A defendant seeking to prevent entry of a default judgment must present some evidence
beyond conclusory denials to support his defense. The test of such defense is measured not by
whether there is a likelihood that it will carry the day, but whether the evidence submitted, if
proven at trial, would constitute a complete defense.”) (internal citation omitted)).
For example, Paul’s argument that he never contracted with DIRECTV for the receivers is
contradicted by other portions of his motions. Compare ECF No. 25 at 3 and 42 at 2, ¶ 2 (both
denying contracting with DIRECTV) with ECF No. 42 at 2, ¶ 3 (asserting that “Paul Wright
-8-
contracted with DIRECTV to install receivers and activate them over a number of years between
approximately 1996 and 2007). Moreover, even if Paul did contract with DIRECTV for the
receivers, DIRECTV alleges that Paul obtained the receivers by giving DIRECTV false
information and used the receivers in a contractually unauthorized manner. And at the September
7, 2018 hearing, Paul never denied having the 85 receivers. Instead, he suggested that he paid for
them and that somebody from DIRECTV set them up for him. He said that he had limited technical
knowledge, but he also explained that he ran a voice-over-IP and high speed internet business, and
that he now works doing basic network repair and installing TV antennas.
Additionally, Paul’s argument that Anametrics Cable ceased business operations in 2014
does not absolve it of any alleged misconduct prior to 2014. Accordingly, none of his defenses
are sufficient to prevent the entry of a default judgment.
Theresa’s defenses, however, are somewhat different. Although her joint answer with Paul
consists only of general denials and thus fails to establish a meritorious defense, the Wrights have
both consistently asserted that Theresa was not involved with Anametrics or the alleged DIRECTV
scheme. Specifically, in their various motions to dismiss, the Wrights argued that Theresa did not
control or direct, or have the right to control or direct, Anametrics’ business; that she was not a
contact person for Anametrics; that she did not take any actions on behalf of Anametrics; that she
was a school teacher and church employee rather than an owner of Anametrics; that her name is
not on any of Anametrics’ legal or financial documents, and that the extent of her involvement in
Anametrics was to occasionally answer the phone in the Wrights’ home office. ECF Nos. 12 at 34; 42 at 2, ¶ 4.
At the September 7, 2018 hearing, Theresa repeatedly denied knowledge of anything to do
with DIRECTV or Anametrics. DIRECTV indicated that it had named Theresa in the complaint
-9-
because her maiden name and contact information had been used to establish some of the
fraudulent accounts, but these allegations are consistent with DIRECTV’s other allegations that
Paul used fake information to establish the DIRECTV accounts. Additionally, the Wrights
submitted a business certificate demonstrating that Anametrics is a “d/b/a” of Paul’s only, which
DIRECTV has not rebutted. Accordingly, the Court finds that Theresa has demonstrated the
existence of a meritorious defense.
C. Prejudice to DIRECTV
DIRECTV argues that the Wrights prejudiced it by forcing it to litigate successive,
meritless motions to dismiss at its considerable expense for years. ECF Nos. 53 at 4, 6. Generally,
“[t]he delay caused in vacating a default judgment does not itself constitute prejudice. Rather, it
must be shown that delay will result in the loss of evidence, create increased difficulties of
discovery, or provide greater opportunity for fraud and collusion.” Sales v. Republic of Uganda,
No. 90 Civ. 3972 (CSH), 1992 U.S. Dist. LEXIS 19932, at *12 (S.D.N.Y. Dec. 28, 1992).
Here, DIRECTV argues that the Wrights’ default and refusal to participate in discovery
has hampered its ability to collect evidence and determine its actual damages. For example,
DIRECTV has been unable to determine the total number of unauthorized subscribers on
Anametrics’ cable system. See ECF No. 40-1 at 22 n. 9.
Additionally, delay can be prejudicial for Rule 55 purposes where it will diminish a
plaintiff’s ability to collect on a judgment. See, e.g., Chudomel v. Dynamic Recovery Servs., No.
12-cv-5365 (NGG) (RLM), 2013 U.S. Dist. LEXIS 160226, at *14 (E.D.N.Y. Sept. 11, 2013)
(“[T]the potential prejudice to plaintiff if the entry of default were vacated consists of her
diminished ability to collect on a judgment against defendant: defendant’s attorney
acknowledged . . . that defendant is suffering from financial troubles.”). Here, at the September 7,
- 10 -
2018 hearing, both Paul and Theresa Wright indicated that they were poor and had no funds from
which DIRECTV could collect on a judgment. “The longer the Court delays in adjudicating
plaintiff’s motion, the greater the chance that plaintiff will be unable to recover against
defendant[s].” Id. at 14-15.
D. Balance of Factors
Considering all of the factors, the Court concludes that default judgment is warranted
against Paul, but not Theresa. The Court is well aware that “[d]efault judgments are disfavored,
as there is a clear preference for cases to be adjudicated on the merits. Nonetheless, default
judgment is an appropriate sanction for ‘defaults that arise from egregious or deliberate conduct.’”
1st Bridge LLC v. 682 Jam. Ave., LLC, No. 08-CV-3401 (NGG)(MDG), 2009 U.S. Dist. LEXIS
8859, at *2 (E.D.N.Y. Feb. 4, 2009) (quoting Am. Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57,
61 (2d Cir. 1996)) (internal citation omitted).
Here, the Wrights filed several successive motions to dismiss, failed to answer the
complaint for over three years, and failed to show good cause for their conduct. For over three
years, the Court gave the Wrights the benefit of the doubt and offered them numerous chances to
answer the complaint, but after ignoring the Court’s clear directives and its explicit warning of the
consequences for failure to file an answer, second chances are no longer warranted.
Mindful of the fact that the Wrights are pro se litigants who have participated in this case,
and although courts are not required to exhaust possible lesser sanctions before entering a default
judgment, the Court has considered whether lesser sanctions are available. See Park v. Sancia
Healthcare, Inc., 2019 U.S. Dist. LEXIS 122721, at *7 (S.D.N.Y. July 22, 2019). The Court
concludes that they are not. Because the Wrights have no funds, monetary sanctions would not be
effective, and striking the Wrights’ untimely answer would put them in the same position they are
- 11 -
in now. Accordingly, the Court finds that a default judgment is appropriate against Paul and
declines to vacate the clerk’s default against him.
In light of Theresa’s meritorious defense, however, the Court declines to enter a default
judgment against her. In exercising their discretion to enter a default judgment or not, courts may
consider other factors, such as the amount of money potentially involved and whether the default
judgment would bring about a harsh or unfair result. See United States v. Foo Yuan Food Prods.
Co., No. 18 CV 4689 (ENV)(CLP), 2019 U.S. Dist. LEXIS 189462, at *7 (E.D.N.Y. Oct. 30,
2019). Here, DIRECTV seeks $85,000 to $850,000 in statutory damages—a large sum which
would bring about a harsh result against an individual uninvolved in the wrongdoing. Therefore,
the Court vacates the clerk’s default against Theresa and denies DIRECTV’s motion for a default
judgment against her.
II.
Whether the Allegations of the Complaint Establish Paul’s Liability
“A court’s decision to enter a default against defendants does not by definition entitle
plaintiffs to an entry of a default judgment. Rather, the court may, on plaintiffs’ motion, enter a
default judgment if liability is established as a matter of law when the factual allegations of the
complaint are taken as true.” Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension
Fund v. Moulton Masonry & Constr., LLC, 779 F.3d 182, 187 (2d Cir. 2015).
Here, DIRECTV seeks a default judgment on Claim 1 of its complaint for receiving and
assisting others in receiving satellite transmissions in violation of 47 U.S.C. § 605(a). Section
605(a) provides in relevant part that “[n]o person not being entitled thereto shall receive or assist
in receiving any interstate or foreign communication by radio and use such communication (or any
information therein contained) for his own benefit or for the benefit of another not entitled thereto.”
- 12 -
The Court has already determined that DIRECTV states a cause of action for violation of
§ 605(a). See DIRECTV, LLC v. Wright, No. 15-CV-474-FPG, 2016 U.S. Dist. LEXIS 72769, at
*1-4, 12-13 (W.D.N.Y. June 3, 2016) (describing allegations of complaint in detail and denying
the Wrights’ motions to dismiss); see also Dish Network L.L.C. v. World Cable Inc., 893 F. Supp.
2d 452, 472 (E.D.N.Y. 2012) (holding that § 605(a) prohibits the “unauthorized divulgence or use
of [satellite] communications,” even if the communications have been “received legally”);
DIRECTV, LLC v. Borbon, No. 14-CV-3468 (KAM)(LB), 2015 U.S. Dist. LEXIS 98828, at *7
(E.D.N.Y. July 29, 2015) (“Section 605 applies to radio communications, which includes
television programming transmitted or intercepted by satellite, as in the instant case.”).
Because courts decide liability on motions for default judgment using the same standards
applicable to motions to dismiss, see Astoria Energy II LLC v. HH Valves Ltd., No. 17-CV-5724
(ENV) (RER), 2019 U.S. Dist. LEXIS 130728, at *5 (E.D.N.Y. Aug. 2, 2019), the Court concludes
that DIRECTV has established Paul Wright’s liability under § 605(a) here.
III.
Damages
Once liability is established, the court assesses whether the plaintiff has established its
damages to a reasonable certainty. Credit Lyonnais Sec., Inc. v. Alcanture, 183 F.3d 151, 155 (2d
Cir. 1999). Unlike allegations related to liability, allegations related to damages are not accepted
as true. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Rather, a court must
conduct an inquiry and a plaintiff must submit evidence to prove the amount of damages. Belizaire
v. Rav Investigative & Sec. Servs., 61 F. Supp. 3d 336, 345 (S.D.N.Y. 2014). A damages inquest
may proceed by hearing, but a court need not conduct a hearing “as long as it ensure[s] that there
[is] a basis for the damages specified in the default judgment.” Transatlantic Marine Claims
Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 111 (2d Cir. 1997).
- 13 -
A “plaintiff who has established liability under Section 605(a) may elect between actual
damages . . . or statutory damages.” J & J Sports Prods. v. El Sonador Café Rest., Inc., No. 15 Civ.
6934 (NG) (VMS), 2017 U.S. Dist. LEXIS 1117, at *19 (E.D.N.Y. Jan. 3, 2017) (citing 47 U.S.C.
§605(e)(3)(C)(i)(II)). DIRECTV seeks statutory damages. ECF No. 40-1 at 15-16.
A. Amount of Statutory Damages
An aggrieved party may recover statutory damages in an amount between $1,000 and
$10,000 for each violation of § 605(a) as the court considers just. Borbon, 2015 U.S. Dist. LEXIS
98828, at *9 (citing § 605(e)(3)(C)(i)(II)). “A court has discretion to determine the number of
violations and assess damages for each violation. The statute does not clearly define ‘violation;’
rather, a court decides which acts of a defendant constitute a violation.” Zuffa, L.L.C. v. Pryce,
No. 8: 12-CV-1584 (NAM/RFT), 2013 U.S. Dist. LEXIS 134687, at *5 (N.D.N.Y. Sep. 20, 2013)
(internal citation omitted).
1. Number of Violations
In cases where, as here, the defendant violated the statute by unauthorizedly distributing
the plaintiff’s programming to third-party subscribers, courts have keyed the number of violations
to the number of subscribers. For example, in Sky Cable, LLC v. Coley, No. 5:11-cv-00048, 2013
U.S. Dist. LEXIS 160571 (W.D. Va. Nov. 7, 2013), the defendants provided DIRECTV
programming to 2,561 subscriber units at a resort but only reported and paid DIRECTV for 168
subscriber units. Id. at *21. The court rejected the defendants’ argument that they only committed
a single violation because they used a single headend and cable system to receive and transmit the
programming to all the subscriber units at the resort, and instead found that each of the 2,393
unpaid units were discrete violations. Id. at *21-25; see also DIRECTV, LLC v. OLCR, Inc., No.
13-3358, 2016 U.S. Dist. LEXIS 120421 (E.D. Pa. Sep. 6, 2016) (where the defendants
- 14 -
fraudulently brokered television service contracts between the plaintiff and numerous government
facilities around the country, the court found 6,081 violations—one for each subscribing
government facility).
Here, during the course of its investigation, DIRECTV was able to confirm the existence
of at least 19 Anametrics Cable subscribers who received the unauthorized programming.
However, DIRECTV argues that because of the Wrights’ default, it has been unable to determine
the total number of subscribers, which it asserts is likely far greater. ECF Nos. 40-1 at 22-23; 402 at 12. Accordingly, DIRECTV suggests basing the number of violations on the number of
receivers the Wrights used as part of their scheme. ECF No. 40-1 at 22-23. DIRECTV determined
that the Wrights had activated a total of 126 receivers between the 13 accounts it opened, and at
the time DIRECTV learned of the scheme and began its investigation, 85 of the receivers were
still active. ECF No. 40-1 at 15. Thus, DIRECTV asks the court to find 85 violations, which it
claims is “undoubtedly a significantly more conservative” number than the total number of
Anametrics subscribers. ECF No. 40-1 at 22.
It is not clear to the Court why this is so. DIRECTV has not presented evidence regarding
the number of receivers that would generally service a given number of subscribers or otherwise
explained why there are likely to be far more than 85 subscribers. The Court is cognizant of
DIRECTV’s assertion that the Wrights’ default has hampered its ability to obtain evidence and
determine its damages, but even on a default, the plaintiff must still establish its damages to a
reasonable certainty. Credit Lyonnais, 183 F.3d at 155; see also DIRECTV, LLC v. Borbon, No.
14-CV-3468 (KAM)(LB), 2015 U.S. Dist. LEXIS 98828, at *11 (E.D.N.Y. July 29, 2015)
(awarding the statutory minimum amount of damages where plaintiff failed to submit sufficient
damages evidence).
- 15 -
Moreover, while the determination of the number of violations is within the Court’s
discretion, DIRECTV has not provided any authority supporting the use the receivers to measure
the number of violations, and the only comparable case the Court has found declined to adopt a
similar measure. See DIRECTV, Inc. v. Grady, No. 5:06-CV-163-FL, 2007 U.S. Dist. LEXIS
103668, at *11 (E.D.N.C. Apr. 6, 2007) (declining to base the number of violations on the total
number of access cards activated and instead electing to base the number of violations on the
number of fraudulent accounts created because the access cards—like receivers here—would not
have functioned but for the fraudulent accounts).
Here, the Wrights created 13 fraudulent accounts, which is less than the 19 confirmed
subscribers. Accordingly, the Court will use the number of confirmed subscribers, and finds 19
violations. See generally Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC, No. 16CV-1318 (GBD) (BCM), 2019 U.S. Dist. LEXIS 186582, at *38-39 (S.D.N.Y. Oct. 25, 2019)
(holding that, while “using each subscriber as the unit of measurement in calculating statutory
damages is appropriate and consistent with Second Circuit practice,” a court may not presume the
existence of a certain number of subscribers without evidence).
2. Amount of Damages Per Violation
Under Section 605(e)(3)(C)(i)(II), the Court may award damages in an amount between
$1,000.00 and $10,000.00 per violation as it considers just. In determining the amount, “[t]he
court may consider such factors as the pecuniary loss sustained by the victim as a result of the
offense, the financial resources of the defendant, the financial needs and earning ability of the
defendant, as well as the burden that a damage award would impose on the defendant relative to
the burden alternative relief would impose.” J & J Sports Prods. v. Lopez, No. 05-CV-5799 (JG)
- 16 -
(RER), 2006 U.S. Dist. LEXIS 60105, at *8 (E.D.N.Y. June 8, 2006) (quotation and alterations
omitted). Courts may also consider
(1) whether the defendant profited as a result of his violation, (2) whether the
defendant assisted or induced others in violating the statute; (3) whether the
defendant’s violation was willful or flagrant; (4) whether the damage award will be
sufficient to deter similar conduct; and (5) whether the damage award is comparable
to awards in similar cases.
DIRECTV, Inc. v. Huynh, 318 F. Supp. 2d 1122, 1131 (M.D. Ala. 2004) (citing DIRECTV, Inc. v.
Perrier, No. 03-CV-400S, 2004 U.S. Dist. LEXIS 9258, *11 (W.D.N.Y. March 15, 2004) for the
first, second, and fifth factors) (internal citations omitted).
Here, DIRECTV has not been able to determine its actual pecuniary loss, and Paul Wright
has indicated that he lacks any financial resources. However, Paul presumably profited as a result
of his violation: his company used DIRECTV’s receivers and programming for several years
before being discovered. His violation also appears to have been willful, as evidenced by his use
of inaccurate names and addresses to create DIRECTV accounts. As DIRECTV describes it,
Anametrics “was specifically established in order to profit on the price differential realized by
obtaining programming by paying for a few customer accounts, and illegally rebroadcasting and
selling that programming to an unknown number of subscribers who made monthly account
payments to Defendants instead of DIRECTV.” ECF No. 40-1 at 23.
Taking all these factors into consideration, the Court finds that a sum of $7,500 per
violation is just. Paul’s violations were willful, profit-driven, and ongoing. A significant damages
award is thus warranted. However, the Court declines to impose maximum damages in the absence
of additional evidence as to the scope of DIRECTV’s actual damages.
This award is consistent with cases that award minimal damages for isolated or profitless
violations on the one hand, and cases that award greater damages for continuing or profit-driven
violations on the other hand. Compare Perrier, 2004 U.S. Dist. LEXIS 9258, *11 (awarding
- 17 -
$1,000 per violation where the defendant committed only two violations by obtaining DIRECTV
programming for his own home without paying for it), with Cablevision Sys. N.Y.C. Corp. v.
Faschitti, No. 94 Civ. 6830 (DC), 1996 U.S. Dist. LEXIS 1212, at *8 (S.D.N.Y. Feb. 6, 1996)
(awarding $10,000 for a violation where the court found defendant’s actions to be willful and
profit-driven); see also Grady, 2007 U.S. Dist. LEXIS 103668, at *12-13 (awarding only $2,000
per violation where the defendant conducted a scheme similar to the one here, but finding 411
violations resulting in a total award of $822,000).
B. Enhanced Damages
The statute also provides that “[i]n any case in which 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 in its discretion may increase the award of damages, whether actual or
statutory, by an amount of not more than $100,000 for each violation of subsection (a) of this
section.” 47 U.S.C. § 605(e)(3)(C)(ii). Courts have found willfulness where the defendant
committed repeated violations or demonstrated a “sophisticated understanding of the satellite
programming industry.” Joe Hand Promotions, Inc. v. Young, No. 5:09-CV-157, 2010 U.S. Dist.
LEXIS 87301, at *8 (W.D. Ky. Aug. 23, 2010).
Here, although Court finds that Paul’s violations were committed willfully and for the
purposes of commercial advantage or private financial gain such that enhanced damages would be
appropriate, the Court declines to award them. The Court has already taken these factors into
account in fixing a $7,500 per violation sum. Moreover, DIRECTV seeks a total award between
$85,000 and $850,000, and the Court’s award of $7,500 for each of Paul’s 19 violations puts the
total award of $142,500 within that range. In light of Paul’s pro se status and financial limitations,
the Court finds that enhanced damages would not be just for Paul or helpful for DIRECTV.
- 18 -
C. Attorneys’ Fees and Costs
DIRECTV also seeks an award of its attorney’s fees and costs. “An award of fees and
costs is mandatory pursuant to 47 U.S.C. § 605(e)(3)(B)(iii). In this Circuit, all claims for
attorney’s fees must be supported by contemporaneous time records that show, ‘for each attorney,
the date, the hours expended, and the nature of the work done.’” KingVision Pay-Per-View, Ltd.
v. Echeverria, No. 06-CV-1266 (CBA), 2007 U.S. Dist. LEXIS 103168, at *12-13 (E.D.N.Y. Feb.
5, 2007) (quoting N.Y. State Ass’n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d
Cir. 1983)). Additionally, the claimant must show that the rates requested are reasonable and in
line with those in the subject community where the Court sits for lawyers with similar skills and
experience. Joe Hand Promotions, Inc. v. Terranova, No. CV 12-3830 (FB)(VVP), 2014 U.S.
Dist. LEXIS 34624, at *22 (E.D.N.Y. Feb. 5, 2014).
Because an award of attorneys’ fees and costs is mandatory, the Court finds that DIRECTV
is entitled to them. As to the amount, DIRECTV has indicated that it will submit an application
for attorneys’ fees and costs pursuant to Federal Rule of Civil Procedure 54(d)(2). Thus, the Court
will consider the amount of attorneys’ fees and costs upon receiving the application.
D. Injunctive Relief
Finally, DIRECTV seeks an injunction.
Section 605(e)(3)(B)(i) authorizes final or
temporary injunctions to prevent further violations of Section 605(a). “Since [DIRECTV] has
shown that [Paul Wright] violated the federal statute at issue, permanent injunctive relief is
appropriate.” Int’l Cablevision v. Cancari, 960 F. Supp. 28, 31 (W.D.N.Y. 1997); see also J&J
Sports Prod. v. Garcia, No. 06 Civ. 4297 (GBD)(HBP), 2011 U.S. Dist. LEXIS 29283, at *3
(S.D.N.Y. Mar. 20, 2011) (granting injunction upon defendant’s default).
DIRECTV’s request for an injunction is granted.
- 19 -
Accordingly,
I.
CONCLUSION
For the foregoing reasons, Paul Wright’s request for a vacatur of the clerk’s default against
him is DENIED, but Theresa Wright’s request for vacatur of the clerk’s default against her is
GRANTED. Further, DIRECTV’s renewed request for a default judgment is GRANTED as to
Paul Wright but DENIED as to Theresa Wright. Accordingly, within 30 days from the date of this
order, DIRECTV shall submit:
•
an application for attorneys’ fees and costs with supporting documentation and analysis
that sufficiently sets forth, for each attorney, the date, the hours expended, and the
nature of the work done, as well as the reasonableness of the fee in light of the
attorney’s experience and skill and the prevailing fees in this district. See, e.g., Wells
Fargo Bank v. LLHC Realty, LLC, No. 6:15-cv-06680-FPG-MWP, ECF Nos. 94, 99;
•
a proposed default judgment against Paul Wright incorporating the requested attorneys’
fees award and DIRECTV’s proposed injunction, which must comply with Federal
Rule of Civil Procedure 65(d); and
•
notice as to whether DIRECTV intends to pursue its claims against Theresa Wright or
dismiss her, and as to whether it intends to dismiss its fifth and sixth claims.3
IT IS SO ORDERED.
Dated: December 16, 2019
Rochester, New York
______________________________________
HON. FRANK P. GERACI, JR.
Chief Judge
United States District Court
DIRECTV’s complaint asserted seven claims against the Wrights. DIRECTV voluntarily dismissed its second, third,
fourth, and seventh claims. See ECF Nos. 20, 21. DIRECTV presently only seeks judgment on its first claim.
3
- 20 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?