J & J Sports Productions, Inc. v. Bullard

Filing 13

JUDGMENT - The court awards $2,200.00 in statutory damages, pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II), which figure represents the commercial sublicense fee plaintiff would have charged a commercial establishment, like defendants establi shment, and an additional $6,400.00 in enhanced damages, pursuant to § 605(e)(3)(C)(ii), which figure was reached by trebling the statutory damages of $2,200.00, for a total damages award of $8,600.00. Plaintiff is awarded attorne ys' fees of $1,012.50, together with the costs of this action. Also for the reasons given, plaintiff's claim for recovery for the tort of conversion is denied. The court dispenses with hearing. Signed by District Judge Louise Wood Flanagan on 11/19/2012. (Baker, C.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
NO. 7:12-CV-111-FL

J & J SPORTS PRODUCTIONS, INC.,
Plaintiff,
v.
JAMIE LEE BULLARD,
INDIVIDUALLY and d/b/a
BULLARD’S SPORTS CLUB &
BILLARDS,
Defendant.

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ORDER

This matter is before the court on plaintiff’s motion for default judgment (DE # 10) set for
hearing tomorrow. Upon further review, the court determines hearing unnecessary. For reasons
given, said motion is granted in large part, including a damages award, albeit less than the amount
sought, attorneys’ fees, and costs, and denied only as to plaintiff’s claim for recovery also for the
tort of conversion.
BACKGROUND
Plaintiff is a California corporation and commercial distributor of sporting events. Plaintiff
contracted to obtain the exclusive nationwide commercial distribution rights to “The Floyd
Mayweather, Jr. v. Shane Mosley, Welterweight Championship Fight Program” telecast nationwide
on May 1, 2010 (“the program”). After obtaining the distribution rights, plaintiff entered into sublicensing agreements with various entities throughout North America, including in North Carolina,
through which it granted these entities limited sub-licensing rights – namely, the rights to publicly

show the program within their respective establishments (e.g., hotels, racetracks, casinos, bars, etc.).

Plaintiff names as defendant Jamie Lee Bullard (“Bullard”), individually and doing business
as Bullard’s Sports Club & Billiards, an establishment located in Burgaw, North Carolina. Plaintiff
asserts that defendant did unlawfully intercept, receive, and thereafter exhibit the program at the
time of its transmission at his establishment. Plaintiff further alleges that this exhibition was done
willfully and for purposes of commercial advantage or financial gain.1
Plaintiff filed complaint for damages on April 30, 2012, raising claims in counts one and two
for violations of 47 U.S.C. §§ 605 and 553, and in count three for common law conversion.
Defendant was served with summons, as confirmed at docket entry number six, yet defendant did
not file answer or otherwise appear. On August 2, 2012, plaintiff filed request for entry of default,
which request the clerk granted by order entered August 29, 2012. On September 4, 2012, plaintiff
filed the instant motion for default judgment. The court scheduled hearing on the matter for
Tuesday, November 20, 2012, in Raleigh, which it now dispenses with.
DISCUSSION
A.

Plaintiff’s Motion for Default Judgment
As noted above, the clerk has entered default against defendant. A defendant, by default,

admits a plaintiff’s well-pleaded allegations of fact, is concluded on those facts by the judgment, and
is barred from contesting on appeal the facts thus established. Ryan v. Homecomings Financial

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See Compl. ¶ 11 (“With full knowledge that the Program was not to be intercepted, received and exhibited by entities
unauthorized to do so, each and every of the above named defendants and/or their agents, servants, workmen or
employees did unlawfully publish, divulge and exhibit the Program at the time of its transmission at their Burgaw, North
Carolina location . . . Said unauthorized interception, publication, exhibition and divulgence by the defendant were done
willfully and for purposes of direct or indirect commercial advantage or private financial gain.”).

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Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co., Ltd. v. Houston Nat’l
Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). The defaulting defendant is not, however, held to admit
conclusions of law. Id. Further, “the allegations of the complaint regarding the amount of damages
suffered are not controlling.” Joe Hand Promotions, Inc. v. Coaches Sports Bar, 812 F. Supp. 2d
702, 703 (E.D.N.C. 2011). Thus, the court must first determine whether the well-pleaded allegations
of the complaint establish defendant’s liability, and second, whether and to what extent plaintiff is
entitled to recover damages.
1.

Alleged Violations of 42 U.S.C. §§ 553 and 605
a.

Defendant’s Liability

Plaintiff alleges that defendant violated 47 U.S.C. §§ 553 and 605. Section 553 was enacted
as part of the Cable Communications Policy Act of 1984 and prohibits unauthorized interception or
reception of cable communication services. 47 U.S.C. § 553(a).2 In turn, Section 605, originally
enacted as part of the Communications Act of 1934, prohibits unauthorized individuals from
intercepting “radio communication” and divulging or publishing the “existence, contents, substance,
purport, effect, or meaning of such intercepted communication to any person.” 47 U.S.C. § 605(a).3

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Section 553(a)(1) provides: “No 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 law.”

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Section 605(a) provides in relevant part: “ . . . No person not being authorized by the sender shall intercept any radio
communication and divulge or publish the existence, contents, substance, purport, effect, or meaning of such intercepted
communication to any person. No 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. No person having received any intercepted radio communication or
having become acquainted with the contents, substance, purport, effect, or meaning of such communication (or any part
thereof) knowing that such communication was intercepted, shall divulge or publish the existence, contents, substance,
purport, effect, or meaning of such communication (or any part thereof) or use such communication (or any information
therein contained) for his own benefit or for the benefit of another not entitled thereto . . .”
47 U.S.C. § 605.

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Among other things, “Section 605(a) prohibits the unauthorized interception and broadcast of
satellite transmissions.” J & J Sports Productions, Inc. v. Centro Celvesera La Zaona, LLC, 5:11CV-00069-BR, 2011 WL 5191576, at *1 (E.D.N.C. Nov. 1, 2011). Finally, sections 553 and 605
permit a “person aggrieved” by a violation of the respective section to bring a civil action in federal
district court. 47 U.S.C. §§ 553(c)(1) and 605(e)(3).
The well-pleaded factual allegations of the complaint, which defendant admits by his default,
establish defendant’s violation of section 553 and/or section 605. Plaintiff obtained the exclusive
rights to nationwide commercial distribution of the program. Compl. ¶ 8. Defendant did not enter
into a sublicensing agreement with plaintiff to exhibit the program at Bullard’s Sports Club &
Billiards. Gagliardi Aff. ¶ 7. Plaintiff, without the benefit of discovery due to defendant’s default,
cannot determine whether the program was intercepted through cable transmission, satellite
transmission, or both. However, plaintiff’s owner, Matthew Gagliardi, affirms in affidavit that the
company’s programming could not be accidentally intercepted, and he postulates several means of
interception, including but not limited to: use of a “blackbox” installed on a cable line, use of a
“smartcard” installed on a DSS satellite receiver line, or use of an illegal unencryption device. Id.
at ¶ 9.
Where plaintiff’s private investigator informs that he was at defendant’s establishment on
the date the program aired, and where plaintiff’s owner affirms in affidavit that defendant did not
contract with plaintiff to display the program and that such program could not be “innocently”
intercepted, the well-pleaded facts establish that defendant violated section 553, section 605, or both.

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See Centro Celvesera, 2011 WL 5191576, at fn. 1 (E.D.N.C. Nov. 1, 2011).4 Further, defendant’s
statutory violation was willful and for commercial advantage. See Gagliardi Aff. ¶ 9 (insisting that
defendant could not have mistakenly, innocently, or accidentally intercepted the program).
b.

Statutory and Enhanced Damages

At plaintiff’s election, and because calculation of actual damages is not possible, the court
will award statutory damages. Section 605 allows an aggrieved party to “recover an award of
statutory damages for each violation . . . in a sum of not less than $1,000 or more than $10,000, as
the court considers just . . .” 47 U.S.C. § 605(e)(3)(C)(i)(II). If the court finds that the violation
“was committed willfully and for purposes of direct or indirect commercial advantage or private
financial gain, the court may increase the award of damages . . . by an amount of not more than
$100,000 for each violation . . .” Id. § 605(e)(3)(C)(ii). Section 553, though similar, provides for
a range of “not less than $250 or more than $10,000, as the court considers just” and a willfulness
increase “by an amount of not more than $50,000.” Id. §§ 553(c)(3)(A)(ii), (B).
Although plaintiff has demonstrated defendant’s violation of section 553 or 605, or both,
recovery under both sections is improper. See Coaches Sports Bar, 812 F. Supp. 2d at 704 (“Even
if a proper claim were made under section 553, where defendants have defaulted and courts have
found liability under both section 605 and section 553, damages are usually awarded only under
section 605”); J & J Sports Productions, Inc. v. Great Latin Restaurants, L.C., 1:11-CV-459, 2011
WL 5873071 (E.D. Va. Sept. 15, 2011) report and recommendation adopted, 1:11-CV-459, 2011
WL 5873093 (E.D. Va. Nov. 22, 2011) (“Although plaintiff has set forth the elements of liability

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("While plaintiff's signal was apparently transmitted via satellite . . . it is not evident how the signal was intercepted
and the Program in turn broadcasted because there are multiple methods for illegally doing so . . . Section 553 and 605
contain common elements in so far as liability is concerned, and therefore, it is not fatal that plaintiff does not have
evidence of exactly how its signal was intercepted").

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under both Sections 553 and 605, courts have held that recovery under both sections is improper.”).
Plaintiff, in motion for default judgment, requests damages under only section 605. Pl.’s
Mot. ¶ 5. Other courts in this district have proceeded under section 605 when it is not possible to
conclude whether section 605 or section 553 has been violated. See, e.g., Centro Celvesera, 2011
WL 5191576, at *2. As in Centro Celvesera, the court finds here that the distinction between the
two sections as to damages is ultimately immaterial, where the court will award plaintiff an amount
falling within the ranges encompassed by both section 553's and section 605's damages provisions.
See id.
Plaintiff seeks damages under section 605 in the amount of $100,000.00. This figure is
nearly the maximum amount allowable under section 605, which allows for $10,000.00 in statutory
damages pursuant to § 605(e)(3)(C)(i)(II), plus $100,000.00 additional damages for willfulness
pursuant to § 605(e)(3)(C)(ii). The amount plaintiff seeks is grossly disproportionate under
circumstances presented. See Centro Celvesera, 2011 WL 5191576, at *3 (awarding $11,000.00 in
damages); Coaches Sports Bar, 812 F. Supp. 2d at 705 (awarding $6,000.00); Kingvision Pay-PerView, Ltd. v. Las Reynas Rest., Inc., 4:07-CV-67-D, 2007 WL 2700008, at *3 (E.D.N.C. Sept. 11,
2007) (awarding $6,000.00). Where plaintiff’s request is disproportionate to its damages suffered
here and in relation to awards in other, similar cases in this district, and where the allegations of the
complaint regarding damages are not controlling, Coaches Sports Bar, 812 F. Supp. 2d at 703, the
court declines to award plaintiff the full amount of damages sought.
Section 605 affords the court substantial discretion in determining the amount of statutory
damages, instructing only that “the party aggrieved may recover an award of statutory damages for
each violation . . . in a sum of not less than $1,000 or more than $10,000, as the court considers

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just.” 47 U.S.C. § 605(e)(3)(C)(i)(II)(emphasis added). The undersigned notes that other courts in
this district, in determining a “just” amount of statutory damages, have looked to the maximum
occupancy of the establishment, Coaches Sports Bar, 812 F. Supp. 2d. at 704, the actual number of
patrons present at the time of exhibition, see Las Reynas, 2007 WL 2700008, at *2 (considering, but
ultimately rejecting this approach), and the amount the plaintiff would have charged the defendant
establishment to sub-license the program, Centro Celvesara, 2011 WL 5191576, at *2.
Here, defendant’s establishment had an occupancy of approximately nine people. See Davis
Aff. 2. Plaintiff’s owner stated in affidavit that the commercial sublicense fee for an establishment
of this size would have been $2,200.00. Gagliardi Aff. ¶ 8. This amount, $2,200.00, is a just award
of statutory damages under § 605(e)(3)(C)(i)(II).
Next, the court must determine whether plaintiff is entitled to enhanced damages under
§ 605(e)(3)(C)(ii), which provides for additional damages “of not more than $100,000” for each
violation that was committed willfully. Plaintiff’s owner testifies in affidavit that defendant could
not have mistakenly, innocently, or accidentally intercepted the program. Gagliardi Aff. ¶ 9. Thus,
enhanced damages due to defendant’s willful violation are appropriate.
Again, section 605 affords the court considerable discretion in determining the amount of
additional damages to be awarded due to defendant’s willful violation. 47 U.S.C. § 605(e)(3)(C)(ii)
(“. . . the court in its discretion may increase the award of damages . . .”) (emphasis added). District
courts in the Fourth Circuit consider several factors in determining an appropriate amount of
enhanced damages:
With respect to additional damages, “[c]ourts have evaluated the appropriate amount
of enhanced damages by assessing factors such as ‘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;
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and defendant’s charging a cover charge or charging premiums for food and drinks.’”
J & J Sports Prods., Inc. v. Lara Sport House Corp., No. 1:10–cv–01369, 2011 WL
4345114, *6 (E.D.Va. Aug. 26, 2011) (citation omitted) (report and
recommendation), adopted, 2011 WL 4345098 (E.D.Va. Sept. 14, 2011).
Centro Celvesera, 2011 WL 5191576 at *2.
Plaintiff has not presented evidence that defendant advertised the intended broadcast of the
event, nor has it asserted defendant charged any cover on the night of the event. See Davis Aff. 1.
Further, there is no allegation defendant is a repeat offender. However, in an effort to deter future
piracy, the court awards enhanced damages, adhering to an approach found appropriate in other,
similar cases in this district. By multiplying in this case the § 605(e)(3)(C)(i)(II) statutory damages
figure by a willfulness factor of three (in effect applying treble damages), the court reaches under
the circumstances presented an appropriate final amount. See Coaches Sports Bar, 812 F. Supp. 2d
at 705; Las Reynas, 2007 WL 2700008, at *3; G&G Closed-Circuit Events, LLC v. Patel, et al., No.
5:11-CV-633, (E.D.N.C. July 6, 2012) (order granting in part motion for default judgment).
c.

Attorneys’ Fees and Costs

Section 605 provides that the court “shall direct the recovery of full costs, including
awarding reasonable attorneys’ fees to an aggrieved party who prevails.”

47 U.S.C. §

605(e)(3)(B)(iii) (emphasis added). Plaintiff is therefore entitled to collect attorneys’ fees and costs.
Plaintiff’s counsel, Jeremy Todd Browner, submits declaration in which he states he worked 4.5
hours on this case and charges $225.00 per hour, yielding total fees of $1,012.50. Browner Decl.
¶¶ 8-10. Having considered the necessary factors, the court determines this amount is reasonable,
and grants plaintiff’s request for recovery of these fees, together with costs.
2.

Plaintiff’s Pendent State Law Conversion Claim

Plaintiff, in Count Three of its complaint, asserts a common law cause of action for
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conversion and seeks compensatory damages “in an amount according to proof against defendant.”
Compl. 7. In its proposed judgment, appended as exhibit four to its motion for default judgment,
plaintiff specifically requests compensatory damages for defendant’s conversion in the amount of
$2,200.
Other courts in this circuit “have considered the request for an award of damages for the tort
of conversion, in addition to statutory and enhanced damages under Section 605 or Section 553 of
Title 47, as a double recovery. Under such circumstances, these courts have denied the request for
damages.” Joe Hand Promotions, Inc. v. Hanaro Bethesda, Inc., CIV.A. WGC-11-191, 2012 WL
2366378, at *7 (D. Md. June 20, 2012). See also J & J Sports Productions, Inc. v. Romenski, 845
F.Supp.2d 703, 707 (W.D.N.C. 2012); J & J Sports Productions, Inc. v. J.R.’Z Neighborhood Sports
Grille, Inc., No. 2:09-03141-DCN-RSC, 2010 WL 1838432, at *2 (D.S.C. Apr. 5, 2010). Consistent
with these opinions, and where the court’s award of damages pursuant to 47 U.S.C. § 605 serves
both to compensate plaintiff and to deter defendant’s future violations, the court denies in this
instance plaintiff’s request for conversion damages.5
CONCLUSION
Consistent with the foregoing, the court awards $2,200.00 in statutory damages, pursuant to
47 U.S.C. § 605(e)(3)(C)(i)(II), which figure represents the commercial sublicense fee plaintiff
would have charged a commercial establishment, like defendant’s establishment, and an additional
$6,400.00 in enhanced damages, pursuant to § 605(e)(3)(C)(ii), which figure was reached by trebling
the statutory damages of $2,200.00, for a total damages award of $8,600.00. Plaintiff is awarded
attorneys’ fees of $1,012.50, together with the costs of this action. Also for the reasons given,
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Similarly, the undersigned did not award damages for conversion in G&G Closed-Circuit Events, LLC v. Patel, et al.,
No. 5:11-CV-633, (E.D.N.C. July 6, 2012) (order granting in part motion for default judgment).

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plaintiff’s claim for recovery for the tort of conversion is denied. The court dispenses with hearing.
SO ORDERED, this the 19th day of November, 2012.

_____________________________
LOUISE W. FLANAGAN
United States District Judge

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