J&J Sports Productions, Inc v. Ladish
Filing
9
ORDER granting 7 Motion for Default Judgment. Signed by Senior Judge Graham Mullen on 6/25/2013. (eef)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
3:11CV533-MU
J & J SPORTS PRODUCTIONS, INC.,
Plaintiff,
vs.
DAVID RAINES LADISH,
INDIVIDUALLY AND d/b/a PREVUE
LOUNGE,
Defendant.
________________________________
)
)
)
)
)
)
)
)
)
)
)
)
ORDER
This matter is before the court upon the Plaintiff’s Motion for Default Judgment against
Defendant David Raines Ladish, individually and d/b/a Prevue Lounge, pursuant to Rule
55(b)(2) of the Federal Rules of Civil Procedure. Default was entered against Defendant on
August 1, 2012.
FACTUAL BACKGROUND
Plaintiff is a closed-circuit distributor of sports and entertainment programming. Plaintiff
purchased the exclusive nationwide commercial distribution rights to Floyd Mayweather, Jr. v.
Shane Mosley, Welterweight Championship Fight Program (“Program”) which was broadcast
on May 1, 2010. Plaintiff entered into sublicensing agreements with various commercial entities,
such as bars and restaurants, by which it granted limited public exhibition rights for the benefit
and entertainment of their patrons. The interstate transmission of Plaintiff’s Program was
encrypted and made available only to Plaintiff’s customers. Plaintiff did not license the
Defendant to use the Program. Plaintiff alleges in its Complaint that Defendant unlawfully
intercepted and intentionally broadcast the Program in his establishment, Prevue Lounge, for the
1
purpose of direct or indirect commercial advantage, thereby violating Section 605 of the Federal
Communications Act of 1934, as amended, and Title 47 U.S.C. § 553 and accompanying
telecommunications statutes. Plaintiff’s Complaint also includes a pendant common-law cause
of action of Conversion. Plaintiff seeks $100,000 in statutory and enhanced damages, $4,200 in
conversion damages, and attorneys’ fees in the amount of $1,012.50, and costs.
DEFAULT JUDGMENT STANDARD
The entry of default judgment is governed by Rule 55 of the Federal Rules of Civil
Procedure which provides in relevant part that “[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). Upon
entry of default, the defaulted party is deemed to have admitted all well-pleaded allegations of
fact contained in the complaint. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th
Cir. 2001); see also FED. R. CIV. P. 8(b)(6) (“An allegation…other than one relating to the
amount of damages…is admitted if a responsive pleading is required and the allegation is not
denied.”). Thus, for a default judgment, well-pleaded factual allegations are sufficient to
establish a defendant’s liability. Fed. R. Civ. P. 55(a). However, the court cannot accept as true
factual allegations of damages and must therefore make an independent determination regarding
damages. Joe Hand Promotions, Inc. v. Coaches Sports Bar et al., 2011 WL4381048, at *1
(E.D.N.C. Sept. 19, 2011). The court may rely on affidavits or documentary evidence in the
record to determine the appropriate sum for damages. See EEOC v. CDG Mgmt.. LLC, No.
RBD-08-2562, 2010 WL 4904440, at *2 (D. Md. Nov. 24, 2010) (citations omitted); EEOC v.
North Am. Land Corp., No. 1:08CV501, 2010 WL 2723727, at *2 (W.D.N.C. Jul. 8, 2010).
2
DISCUSSION
In its motion for default judgment, Plaintiff seeks $4,200 in conversion damages,
$100,000.00 in statutory and enhanced damages, as well as costs and recovery of its attorneys’
fees in the amount of $1,012.50. However, Plaintiff may not recover under both Sections 553
and 605. Integrated Sports Media, Inc. v. Buruca Brother’s Va., Inc., No. 1:1-cv-839, 2011 WL
5873078, at *5 (E.D.V.A. Nov. 1, 2011) (citing Kingvision Pay-Per-View, Ltd. v.Gutierrez, 544
F. Supp. 2d 1179, 1184 (D. Co. 2008); Time Warner Cable of New York City v. Sanchez, No. 02
Civ.5855, 2003 WL 21744089, at *3 (S.D.N.Y. July 8, 2003)). When plaintiffs seek damages
under both statutes, courts evaluate the claims under Section 605 because it provides for a higher
potential recovery. Buruca Brother’s, 2011 WL 5873078, at *5; see also 47 U.S.C. §§ 553(3)(B)
& 605(e)(3)(C)(ii). Furthermore, Plaintiff may not recover conversion damages in addition to
actual or statutory damages under Section 605. See Joe Hand Promotions, Inc. v. Dock Street
Enters., Inc., No. 11-1973, 2011 WL 6141058, at *5 n.5 (D.Md. Dec. 8, 2011). Therefore,
Plaintiff’s potential recovery is capped at $100,000.00 in statutory and enhanced damages, plus
attorneys’ fees in the amount of $1,012.50 and costs.
When calculating statutory damages courts have employed two general approaches:
basing the damages calculation on the number of patrons in an establishment during the
unauthorized broadcast or utilizing a flat damage amount. Buruca Brother’s, 2011 WL 5873078,
at *5. A flat damage amount is appropriate where, as here, there is no per-person rate for the
program. See Joe Hand Promotions, Inc. v. Angry Ales, Inc., No. 3:06-cv-73, 2007 WL
3226451, at *5 (W.D.N.C. Oct. 29, 2007). In calculating a flat damage amount, the court takes
into account factors such as whether the defendants are repeat violators, whether they
substantially gained from their piracy, and significant actual damages the plaintiff has suffered.
3
Id. Courts have recognized the importance of awarding a plaintiff sufficient damages to ensure
true deterrence, “[a]t a minimum, it should not cost less to violate the statute than to comply with
it.” EMI April Music, Inc. v. Rodriguez, 691 F.Supp.2d 632, 636 (M.D.N.C. 2010) (citing EMI
April Music, Inc. v. White, 618 F.Supp.2d 497, 508 (E.D.Va 2009)). Statutory damages may be
awarded up to $10,000.00 for each violation. 47 U.S.C. § 605(e)(3)(c)(ii).
At the time Plaintiff’s investigator visited, there were between thirty-five to seventy
people in the establishment at any given time. In addition, Plaintiff’s investigator was required
to pay a cover charge of $10.00 in order to enter the establishment. Defendant clearly gained
from his piracy, though the exact amount cannot be established due to Defendant’s failure to
respond. However, some speculation is permitted when Defendant’s failure to respond has
thwarted the process by which a more accurate computation of damages could be achieved. Joe
Hand Promotions, Inc. v. Coaches Sports Bar, 2011 WL 4381048, at *2 (E.D.N.C. Sept. 19,
2011). Aside from costs and attorneys’ fees, Plaintiff’s actual damages claims are the $4,200.00
Program fee Plaintiff charged establishments of Defendant’s size and an undenominated amount
that Plaintiff expended on “investigation.” Plaintiff has sufficiently shown that it is entitled to
$4,200.00 in actual damages.
In addition to statutory damages, if the court determines that the violations were
committed “willfully and for purposes of direct or indirect commercial advantage or private
financial gain,” the court may award enhanced damages of up to $100,000.00 for each violation
under §605(e)(3)(c)(ii). Integrated Sports Media, Inc. v. Buruca Brother’s Va., Inc., No. 1:11cv-839, 2011 WL 5873078, at *6 (E.D.V.A. Nov. 1, 2011). The primary purpose behind this
provision is to deter future violations. See J&J Sports Prods., Inc. v. Las Chivas, No. 5:10-cv187, 2012 WL 71819, at *3 (W.D.N.C. Jan. 10, 2012). The level of damages awarded should be
4
sufficiently substantial to ensure the statute’s purpose is fulfilled. EMI April Music, Inc. v.
Rodriguez, 691 F.Supp.2d 632, 636 (M.D.N.C. 2010) (quoting F.W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 228, 233 (1952). In determining the amount of appropriate
damages, the Fourth Circuit has looked to the following “Nalley” factors: the severity of the
violation, the degree of harm to the plaintiff, the relative financial burdens of the parties, and the
purpose to be served by imposing statutory damages. J&J Sports Prods., Inc. v. Olmos, No.
5:08-cv-33, 2010 WL 625283, at *2 (W.D.N.C. Feb. 19, 2010) (citing DirecTV, Inc. v. Rawlins,
523 F.3d 318, 330 n.8 (4th Cir. 2008); Nalley v. Nalley, 53 F.3d 649, 652 (4th Cir. 1995)).
Plaintiff sufficiently established the violation was committed “willfully and for the
purposes of direct or indirect commercial advantage” and thus enhanced damages are
appropriate. After a careful analysis of the Nalley factors, the Court finds that an additional
$5,000.00 in enhanced damages is appropriate for a total of $9,200.00. See Las Chivas, 2012
WL 71819, at *3 (awarding $5,000.00 in enhanced statutory damages where it was the
defendants’ second violation); J & J Sports Productions, Inc. v. Olmos, 2010 WL 625283
(W.D.N.C. Feb. 19, 2010) (awarding $5,000.00 in statutory damages where the establishment
had ten to twelve patrons and subject programming was not displayed until the investigator
affirmatively asked to see it); Angry Ales, 2007 WL 3226451, at *5 (awarding $1,000.00 in
statutory damages where the bar had only one patron present and the investigator had to
specifically request the encrypted program).
Plaintiff requests $1,012.50 in attorneys’ fees. This sum represents 4.5 hours of work at
$225.00 per hour. This amount of fees is reasonable. Plaintiff is also entitled to the costs of this
action, but has yet to submit these costs to the Court. See 47 U.S.C. § 605(e)(3)(A)(iii); Fed. R.
Civ. P. 54(d)(1).
5
IT IS THEREFORE ORDERED that Plaintiff’s Motion for Default Judgment is
GRANTED; and Judgment is hereby entered against David Raines Ladish in the amount of
$9,200.00, plus $1,012.50 in attorneys’ fees and costs.
Signed: June 25, 2013
6
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?