Joe Hand Promotions, Inc. v. Musser et al

Filing 11

ORDER granting 10 Motion for Default Judgment against Defendant Redeye Partners, LLC, individually and as the alter ego of Charlenes Lounge, and in favor of Joe Hand Promotions, Inc., for statutory damages of $20,000, together with reasonable attorneys fees of $1,375.00 and costs of $400.00, for a total judgment of $21,775.00. Signed by Judge Sandra S Beckwith on 9/15/15. (mb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
Joe Hand Promotions, Inc.,
Plaintiff,
vs.
Jon Musser and Redeye Partners, LLC,
Defendants.

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Case No. 1:15-cv-272

ORDER GRANTING DEFAULT JUDGMENT
Plaintiff, Joe Hand Promotions, Inc., has moved for entry of a default judgment
against Defendant Redeye Partners, LLC. (Doc. 10) The Clerk entered a default as to
Redeye Partners on June 1, 2015; defendant Musser has not been properly served with
the complaint. Plaintiff’s complaint alleges that Redeye Partners, LLC, individually and
as the alter ego of Charlene’s Lounge, 5912 Vine Street, Elmwood Place, Ohio, illegally
broadcast a program titled the “Ultimate Fighting Championship 172” on April 26, 2014.
Plaintiff owns the rights to that program, and sublicenses broadcast rights to commercial
establishments throughout the country. The transmission of Plaintiff’s programs is
encrypted to protect against unlicensed broadcast. Plaintiff’s complaint seeks recovery
of statutory damages against Defendant under 47 U.S.C.§605, which generally prohibits
the unauthorized publication or broadcast use of satellite communications such as
Plaintiff’s programs.
Plaintiff’s motion is supported by the affidavit of Joe Hand, Jr., the President of
Joe Hand Promotions, Inc. (Doc. 10-1) Mr. Hand describes the difficulties his company
faces in detecting and identifying individuals and businesses that pirate his company’s

programs for illegal broadcast. These difficulties were further explained by Plaintiff’s
counsel during the telephone hearing held on September 14, 2015 concerning Plaintiff’s
motion. Counsel for Plaintiff stressed that any unlicensed broadcast of its programs is
by definition a willful violation of the statute, because some type of unauthorized
equipment (such as a blackbox or programming card, or using an illegal encryption
code) is required in order to access the programs without a license from Plaintiff.
Counsel also stated that the company estimates that it is able to detect only 5-10% of
incidents of piracy, due to limitations on resources and to the fact that the programs are
of rather short duration (2 hours). An investigator must be physically present at an
establishment while the program is broadcast in order to document that fact. Moreover,
Plaintiff’s legal customers - those who enter into sublicense agreements and pay the
required license fees - are pressuring Plaintiff to aggressively police unlicensed
broadcasts, requiring the company to expend increasing amounts of time and resources
in order to detect and prosecute illegal broadcasters.
Many cases addressing the question of damages in cases like this one attempt to
measure the benefit to the defendant from the illegal broadcast, such as the cost of a
license fee from Plaintiff, or the profits reaped from the broadcast (cover charges, or
increased prices for food and drink), and award those costs as default damages,
together with a statutory premium. Plaintiff argues that the “piracy business model”
followed by establishments like Charlene’s Lounge does not typically involve a cover
charge, or a premium price for drinks or food served during the broadcast. And these
establishments do not advertise their broadcast (for obvious reasons). Imposing upon a
defaulting defendant some rough measure of disgorgement of profits, with some
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additional premium, therefore does nothing to deter this conduct by others, or to deter
any establishment from repeating the conduct in the future.
The statute, 47 U.S.C. §605(e)(3)(B)(iii), requires the Court to award “full costs”
and attorneys’ fees to a prevailing party. Those damages may be awarded (at Plaintiff’s
election) either by a measure of actual damages, including a violator’s profits, or by
awarding statutory damages, pursuant to Section 605(e)(3)(C)(i)(II). In the latter case,
the Court may award from $1,000 to $10,000 for each violation, as the Court considers
to be just. In addition, if the violation was willful for the purpose of direct or indirect
commercial advantage, the Court may award increased damages of not more than
$100,000 for each violation. Plaintiff urges the Court to award the maximum amount,
while Plaintiff’s counsel has reduced the request to $50,000.
The Court finds that an award of the statutory maximum of $10,000 is
appropriate in this case. The affidavit of Plaintiff’s investigator, Mark Caddo, states that
he entered Charlene’s Lounge at 9:30 p.m. on April 26, 2014 (which was a Saturday
night), and saw the Plaintiff’s program being played on four television screens behind
the bar starting at 10 p.m. There was no cover charge, and the bar’s maximum
occupancy was 250; Mr. Caddo counted between 10 and 18 patrons in the bar during
the approximately 90 minutes that he remained at the bar. (Doc. 10-3) These facts do
not suggest that the establishment reaped any significant profit from the illegal
broadcast. But they do mesh with what Plaintiff describes as the “piracy model” of
illegally broadcasting events such as Plaintiff’s UFC program. An award of a minimum
amount of statutory damages would not address the necessity of deterring the conduct
that is apparently quite common yet quite difficult for Plaintiff to detect and document.
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Moreover, based on Plaintiff’s arguments and Mr. Caddo’s observation of a
satellite dish on the roof of Charlene’s Lounge that evening, the Court agrees that the
Defendant’s violation was willful within the meaning of the statute, as being done for the
purpose of an indirect commercial advantage. Plaintiff cites cases defining “willful”
conduct as conduct exhibiting a careless disregard for the governing statute and
indifference towards the requirements of the law. See, e.g., TWA v. Thurston, 469 U.S.
111, 126-127 (1985). Whether or not Charlene’s Lounge actually reaped a commercial
or economic advantage from the illegal broadcast is not controlling for purposes of
determining willfulness; and it is difficult to imagine any other motive for such conduct.
The Court finds that an award of $10,000 enhanced damages for the willful violation is
appropriate based on the evidence and the arguments presented.
For all of these reasons, the Court orders that a default judgment be entered
against Defendant Redeye Partners, LLC, individually and as the alter ego of Charlene’s
Lounge, and in favor of Joe Hand Promotions, Inc., for statutory damages of $20,000
pursuant to 47 U.S.C. §§605(e)(3)(B)(iii) and (C)(I) and (ii), together with reasonable
attorneys’ fees of $1,375.00 and costs of $400.00, for a total judgment of $21,775.00.
SO ORDERED.
THIS CASE IS CLOSED.
DATED: September 15, 2015

s/Sandra S. Beckwith
Sandra S. Beckwith, Senior Judge
United States District Court

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