J&J Sports Productions, Inc v. Jimenez et al

Filing 19

DEFAULT JUDGMENT in favor of Plaintiff against Nelson Jimenez in the total sum of $11,012.50. Signed by District Judge Richard Voorhees on 2/26/2014. (cbb)

IN THE UNITED STATES DISTRICT FOR
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
STATESVILLE DIVISION
DOCKET NO.: 5:11-cv-130
J & J Sports Productions, Inc.,
Plaintiff,
v.
Nelson Jimenez and Narendra
Bhanubhai Patel, Individually,
d/b/a La Libertad,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

ORDER & JUDGMENT

THIS MATTER is before the Court on Plaintiff’s Motion for Default Judgment (Doc.
17) and Memorandum in Support (Doc. 18), both filed on July 3, 2013.
I.

DISCUSSION

Plaintiff J & J Sports Productions, Inc. (“J & J”) is an international distributor of sports
and entertainment programming. J & J purchases licensing rights for the commercial exhibition
of sports and entertainment programming. J & J then enters into sub-licensing agreements with
commercial entities, thereby granting the entity the right to exhibit the program legitimately
pursuant to written agreement.
The essence of J & J’s cause of action is that Defendants unlawfully intercepted and
intentionally broadcast a sporting event in violation of federal law, namely, 47 U.S.C. §§ 605 and
553.1 J & J also requests damages for the tort of conversion.
J & J possessed the exclusive territorial rights to broadcast this event. The sporting event
allegedly intercepted (or “pirated”) is the “Number One”: Floyd Mayweather, Jr. v. Juan Manuel
1

Section 605 targets commercial establishments and prohibits the interception and broadcast of satellite
cable programming without a license for gain. Section 553 generally prohibits the unauthorized
interception or reception of communications over a cable system.

Marquez Championship Fight Program (hereinafter, the “Program”), which was telecast
nationwide on September 19, 2009, including undercard or preliminary bouts.2
J & J offers an affidavit from Mr. Kim Duncan (“Duncan”), a hired investigator.
According to Duncan, he visited La Libertad Bar (“La Libertad”) on September 19, 2009, at
approximately 9:27 p.m. (Doc. 17-2 at 1.) Duncan was able to watch the Program, namely, an
undercard bout between fighters “Katsidis wearing black trunks and Escobedo wearing black
trunks with a green and red stripe on sides.” (Id.)
J & J also offers an affidavit from its President, Joseph M. Gagliardi (“Gagliardi”).
Gagliardi avers that J & J’s programming “is not and cannot be mistakenly, innocently or
accidentally intercepted.” (Doc. 17-3 at 3, ¶9.) Rather, Gagliardi claims that the use of various
mechanisms (e.g., a “blackbox,” “hotbox,” “pancake box” for cable TV lines; “smartcard,”
“testcard” or “programming card” for satellite receiver lines; or other illegal unencryption
devices like the purchase of illegal satellite authorization codes found on the internet or trade
publications) is necessarily or “per se intentional” in that these devices are designed to
descramble the reception of a pay-per-view broadcast. (Id. at 3-4.) By way of default, J & J
seeks to recover the maximum amount of statutory damages, including attorneys’ fees,
investigative costs, and interest and those damages appropriate for the tort of conversion.
The record reveals that J & J was successful in serving Nelson Jimenez, d/b/a La Libertad
(Doc. 10), but failed to serve Narenda Bhanubhai Patel. The Clerk’s;s Entry of Default as to
Nelson Jimenez, d/b/a La Libertad, was entered on April 4, 2011. (Doc. 12.) Accordingly, J and
J’s Motion for Default Judgment is limited to Nelson Jimenez, d/b/a La Libertad. (Doc. 17 at 1.)

2

For convenience, the Court will refer to the boxing match itself, as well as all related bouts, as the
“Program.”
Page 2 of 8

A. Violation of The Cable Act, 47 U.S.C. § 605(a)
J & J has established a claim under Section 605(a).3 Section 605(a) provides in pertinent
part as follows:
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)
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(a). Any person aggrieved by a violation of Section 605(a) may bring a private
civil action against the violator and seek damages under Section 605(e)(3)(c). See 47 U.S.C. §
605(e)(3)(c). Having reviewed the record, the Court finds Plaintiff has proven that Defendant
engaged in the unauthorized and knowing interception of its satellite broadcast, which Defendant
published in their bar for their own benefit and the benefit of their patrons. Thus, Plaintiff has
proven violation under 47 U.S.C. § 605(a).
B. Statutory Damages Pursuant to The Cable Act, 47 U.S.C. § 605(e)
J & J seeks to hold Defendant liable for statutory damages pursuant to 47 U.S.C. § 605.
Damages for a violation of Section 605(a) are permitted as follows:
The Court – (i) may grant temporary and final injunction on such terms as it may deem
reasonable to prevent or restrain violations of subsection (a) of this section; (ii) may
award damages as described in subparagraph (C); and (iii) shall direct the recovery of
full costs, including reasonable attorneys’ fees to an aggrieved party who prevails.
Upon entry of default, the Court accepted as true Plaintiff’s allegations. See 49 C.J.S. Judgments §
273(2011) (“The effect of a default in answering is to deem admitted all the well-pleaded facts in the
complaint . . .”); Pentech Fin. Servs. V. Old Dominion Saw Works, Inc., 2009 U.S. Dist. LEXIS 55786
(W.D.Va. June 30, 2009).
3

Page 3 of 8

47 U.S.C. § 605(e)(3)(B) (emphasis added). Subparagraph (C) provides as follows:
Damages awarded by any court under this section shall be computed, at the election of
the aggrieved party, in accordance with either of the following subclauses . . . (II) the
party aggrieved may recover an award of statutory damages for each violation of
subsection (a) of this section involved in the action 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) (emphasis provided). The Court may grant enhanced damages up
to a maximum of $100,000 pursuant to 47 U.S.C. § 605(e)(3)(C)(ii) where the defendant has
engaged in willful violation of the statute or where the defendant has committed the violation for
“purposes of direct or indirect commercial advantage or private financial gain.”
The award of statutory damages under Section 605(e)(3) is committed to the Court’s
discretion. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 330 n.8 (4th Cir. 2008) (adopting
factors invoked in Nalley for purposes of discretionary decisions regarding imposing statutory
damages); Nalley v. Nalley, 52 F.3d 649, 652 (4th Cir. 1995). The Fourth Circuit has deemed the
following factors (“the Nalley factors”) relevant: 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. Id. at 330. In addition, the Nalley factors “should be considered
against the backdrop of the seriousness with which Congress has treated the underlying conduct
at issue.” Id. at 328 (noting that Congress intended “that violators who intercept encrypted
transmission, requiring greater technical savvy and efforts, are to face greater punishments than
those who take fewer measures in order to intercept nonencrypted transmission.”) (internal
citations omitted).

Page 4 of 8

In the instant case, J & J asks for an enhanced statutory damages award in the amount of
$110,000.00, the maximum amount of statutory damages allowed. For the reasons set forth
herein, the Court will award the maximum allowed for unenhanced statutory damages.
The starting point for analysis is $2,200.00. This is the price Defendant would have had
to pay to legally display the Program at La Libertad. (Doc. 17-2 at 2) (La Libertad seating
capacity); (Doc. 17-3 at 10) (pricing schedule based on seating capacity). The damages in this
case must at least exceed $2,200, because the generally accepted primary purpose to be served in
imposing statutory damages is to deter future violations. The damages have no deterrent effect if
the award does not exceed the actual price of the Program.
As to the severity of the violation, there is no evidence in the record showing an outright
attempt by the Defendant to expose the Program to the public or display the program for
commercial gain. However, as stressed in Gagliardi’s affidavit, the very nature of this violation
does not lend itself to blatant promotion and display to the public for commercial gain. (Doc. 173 at 5-6.) To do so, such as advertising the availability of the Program at La Libertad on social
media, would make the policing of this illegal conduct much easier. Defendants have failed to
respond to the Complaint, so the exact nature of their conduct in communicating to their patrons
the availability of the Program at La Libertad is unknown. However, Defendant should not be
permitted to benefit for failing to respond and it can be assumed those involved with the illegal
intercept and display of the Program communicated as much to other individuals.
Next, the degree of harm and financial burden to J & J’s are also factors to be considered.
Other than the obvious harm of Defendant obtaining the Program without making the required
payment, J & J asserts that it dedicates a significant amount of money to the identification and
detection of signal pirates and that its overall monetary loss for these types of violations are in

Page 5 of 8

the millions. (Doc. 17-3 at 2, 4.) In addition, Defendant’s illegal interception and display of the
Program damages the reputation and legitimacy that J & J has accrued with existing customers. J
& J Sports Prods., Inc. v. Las Chivas, Inc., 5:10CV187-V, 2012 WL 71819 (W.D.N.C. Jan. 10,
2012). From the perspective of existing customers, they have paid a price to display a program
for the benefit of their patrons based on the assumption that the only other establishments that
can offer the same experience have also paid the appropriate price. Defendant’s actions directly
undercut this assumption which causes existing customers to at least second guess spending their
money with J & J.
Having now considered the Nalley factors, and the evidence before the undersigned with
respect to Defendant, the Court, in its discretion, will award statutory damages for Defendant’s
violation of Section 605(a) in the amount of $10,000. See 47 U.S.C. § 605(e)(3)(c)(i)(II). This
award should cover any actual damages or losses to J & J as well as pose a sufficient deterrent. J
& J is also entitled to its attorney’s fees and costs under 47 U.S.C. § 605(e)(3)(B)(iii). J & J
requests $1,012.50 in attorney fees, which is reasonable.
C. The Unauthorized Reception of Cable Service, Violation of 47 U.S.C. § 553
In Count II of the Complaint, based on identical allegations, J & J also asserts a cause of
action under 47 U.S.C. § 553. Title 47, United States Code, Section 553 provides in pertinent
part:
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.

47 U.S.C. § 553(a)(1). The term "assist in intercepting or receiving" includes "the manufacture or
distribution of equipment intended by the manufacturer or distributor (as the case may be) for

Page 6 of 8

unauthorized reception of any communications service offered over a cable system . . . .” 47
U.S.C. § 553(b).
Like Section 605, Section 553 contemplates actual or statutory damages as well as
enhanced damages awards for willful violations aimed at commercial advantage or private
financial gain. 47 U.S.C. § 553(b)(3)(A) and (B). Statutory damages are authorized “in sum not
less than $250 or more than $10,000.” 47 U.S.C. § 553(b)(3)(A)(ii). “In any case in which the
court finds that the violation was committed willfully and for purposes of commercial advantage
or private financial gain, the court in its discretion may increase award of damages, whether
actual or statutory . . . by an amount of not more than $50,000.” 47 U.S.C. § 553(b)(3)(B). Thus,
in the event of a willful violation, an enhanced award is left to the discretion of the Court.
In light of damages being awarded pursuant to Section 605, the Court declines to award
damages under Section 553. See Kingvision Pay-Per-View, Ltd. V. Ortega, 2002 US Dist. Lexis
24305, *6 (N.D. Cal. 2002) (declining to award statutory damages under both Sections 605 and
553, finding that to do so would be cumulative.)
D. Conversion
In Count III of the Complaint, based upon identical allegations, J & J also asserts a cause
of action for the tort of conversion. J & J requests compensatory and punitive damages on the
basis that Defendant’s acts were willful, malicious, and intentionally designed to harm J & J.
(Doc. 1 at 5, ¶24.)
In North Carolina, the tort of conversion is defined as “an unauthorized assumption and
exercise of the right of ownership over goods or personal chattels belonging to another, to the
alteration of their condition or the exclusion of an owner's rights.” Peed v. Burleson's, Inc., 244
N.C. 437, 439, 94 S.E.2d 351, 353 (1956) (citing 89 C.J.S., Trover and Conversion § 1.)

Page 7 of 8

Here, Defendant committed the tort of conversion because Defendant illegally obtained
possession of the Program and converted it to its own use and benefit. However, the Court
declines to award compensatory damages for the same reasons the Court declined to award
damages for Defendant’s Section 553 violation. Additionally, any punitive or deterrent effect
sought to be achieved by the request for punitive damages has already been addressed by the
Court’s award of statutory damages for Defendant’s violation of Section 605.
II.

CONCLUSION

NOW, THEREFORE, the Court concludes that judgment by default should be hereby
entered against Defendant Nelson Jimenez, individually, d/b/a La Libertad, in accordance with
the prayer of said Complaint, Motion for Default Judgment, Memorandum in Support, and
accompanying exhibits, for the sum set forth below; and
NOW, THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED that the
Plaintiff have and recover of the Defendant the total sum of $11,012.50.

Signed: February 26, 2014

Page 8 of 8