J & J Sports Productions, Inc. v. Smith, Jr. et al

Filing 15

OPINION AND ORDER granting 10 Motion for Default Judgment. Signed by Judge James L Graham on 2/13/2014. (ds)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
J & J Sports Productions, Inc.,
Plaintiff,
v.

Case No. 2:13-cv-915

Donald T. Smith, Jr.,
et al.,
Defendants.
OPINION AND ORDER
This

is

an

action

brought

by

plaintiff

J

&

J

Sports

Productions, Inc., against defendant Donald T. Smith, Jr., and
Strike City, LLC, individually and as the alter ego of Rule (3),
650 Windmiller Drive, Pickerington, Ohio, a business consisting of
a bar and dining room with an attached bowling alley.

Defendant

Smith is alleged to be an officer of Strike City, which owns and
operates Rule (3).

Plaintiff is a closed-circuit distributor of

sports and entertainment programming.

Plaintiff alleges that it

purchased the rights to broadcast a sports even entitled “MANNY
PACQUIAO v. SHANE MOSLEY: WBO Welterweight Championship Fight
Program”

(“the

Program”)

shown

on

Saturday,

May

7,

2011.

Defendants allegedly broadcast the program at Rule (3) without
purchasing the rights to do so.
In Count 1 of its complaint filed on September 16, 2013,
plaintiff asserts a claim under the Communications Act of 1934, as
amended, 47 U.S.C. §605, et seq.

In Count 2, plaintiff alleges a

violation of the Cable and Television Consumer Protection and
Competition Act of 1992, as amended, 47 U.S.C. §553, et seq. Count
3 of the complaint asserts a claim for conversion.

The record indicates that defendants and the statutory agent
for Strike City were served with summonses, which were returned
executed.

After defendants failed to file an answer, plaintiff

filed an application for entry of default.
default on November 12, 2013.

The clerk entered

On December 12, 2013, plaintiff

filed a motion for default judgment. On January 28, 2014,, this
court entered an order directing the clerk to mail a copy of
plaintiff’s motion for default judgment to the defendants via
certified mail, and directing the defendants to respond to the
motion no later than February 10, 2014.

The certified mail

receipts indicate that defendants received this order. No response
to the motion has been filed.
This matter is now before the court on plaintiff’s motion for
default judgment. Fed.R.Civ.P. 55(b) governs default judgment.
Once a default is entered, the defendants are considered to have
admitted all of the well-pleaded allegations in the complaint.
Ford

Motor

Co.

v.

Cross,

441

F.Supp.2d

837,

845

(E.D.Mich.

2006)(citing Matter of Visioneering Construction, 661 F.2d 119, 124
(6th

Cir.

1981)).

However,

while

the

well-pleaded

factual

allegations in the complaint are taken as true when a defendant is
in default, damages are not. Ford Motor Co., 441 F.Supp.2d at 848.
Where damages are unliquidated, a default admits only defendant’s
liability and the amount of damages must be proved.

Antoine v.

Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995). Although the
court may conduct an evidentiary hearing to determine damages, an
evidentiary hearing is not a prerequisite to the entry of default
judgment if damages are contained in documentary evidence or
detailed affidavits and can be ascertained on the record before the

2

court.

J&J Sports Production, Inc. v. Lukes, No. 1:10 CV 00535,

2010 WL 4105663 at *1 (N.D.Ohio Oct. 18, 2010).
Title 47, §605(a) prohibits the unauthorized interception of
radio

communications.

That

section

outlawing satellite signal piracy.

has

been

interpreted

as

Cablevision of Michigan, Inc.

v. Sports Palace, Inc., 27 F.3d 566 (table), 1994 WL 245584 at *3
(6th Cir. June 6, 1994).

Section 605 permits the aggrieved party

to recover actual damages or statutory damages of not less than
$1,000

or

more

than

$10,000

§605(e)(3)(C)(i)(I) and (II).

for

each

violation.

47

U.S.C.

There are no mens rea or scienter

elements for a non-willful violation of that section; rather, it is
a strict liability offense, and intent is immaterial to liability.
Joe Hand Promotions, Inc. v. Easterling, No. 4:08 CV 1259, 2009 WL
1767579 at *4 (N.D.Ohio June 22, 2009)(citing Int’l Cablevision,
Inc. v. Sykes, 997 F.2d 998, 1004 (2d Cir. 1993) and Kingvision Pay
Per View Ltd. v. Williams, 1 F.Supp.2d 1481, 1484 (S.D.Ga. 1998)).
Where

the

court

finds

that

the

violation

was

committed

willfully and for purpose of commercial advantage or private
financial gain, the court, in its discretion, may increase the
award of actual or statutory damages by an amount not to exceed
$50,000. 47 U.S.C. §605(e)(3)(C)(ii). Section 605 also permits an
award

of

costs

and

reasonable

attorney’s

fees.

47

U.S.C.

§605(e)(3)(B)(iii).
It is illegal under 47 U.S.C. §553(a)(1) to intercept or
receive without authorization any communications service offered
over a cable system.

Section 553 bans the theft of programming

directly from a cable system.

Id.

Under §553, a party may recover

actual damages, or, in the alternative, an award of statutory

3

damages for all violations involved in the action in an amount not
less

than

$250

but

not

§553(c)(3)(A)(i) and (ii).

greater

than

$10,000.

47

U.S.C.

This is likewise a strict liability

statute. Easterling, 2009 WL 1767579 at *4. Where the court finds
that the violation was committed willfully and for purpose of
commercial advantage or private financial gain, the court, in its
discretion, may increase the award of damages, either actual or
statutory,

by

an

amount

not

more

than

$50,000.

47

U.S.C.

§553(c)(3)(B). Section 553 also provides for an award of costs and
reasonable attorney’s fees.

47 U.S.C. §553(c)(2)(C).

Courts have held that when a defendant is liable under both
§553 and §605, a plaintiff may recover under only one section. See
J & J Sports Productions, Inc. v. Palumbo, , No. 4:12CV2091, 2012
6861507 at *3 (N.D.Ohio Dec. 12, 2012); Joe Hand Promotions, Inc.
v. RPM Management Co. LLC, No. 2:11-cv-377, 2011 WL 5389425 at *2
(S.D.Ohio

Nov.

7,

2011);

Joe

Hand

Promotions,

Inc.

v.

RPM

Management Co. LLC, No. 2:09-cv-862, 2011 W 1043574 (S.D.Ohio Mar.
18, 2011). In that situation, typically §605 is applied because it
allows for a higher recovery.
In awarding statutory damages for non-willful infractions,
courts may consider the price a defendant would have had to pay to
obtain the right to receive and display a broadcast, and the
plaintiff’s
rights.

cost

to

monitor

and

investigate

its

broadcasting

Joe Hand Promotions, Inc. v. Potopsky, No. 1:10-cv-1474,

2011 WL 2648620 at *4 (N.D.Ohio July 6, 2011).
plaintiff

has

submitted

the

affidavit

of

In this case,

Joseph

Gagliardi,

president of J & J Sports Productions. Mr. Gagliardi stated in his
affidavit that plaintiff is a closed-circuit distributor of sports

4

and entertainment programming.

Gagliardi Aff., ¶ 3.

Plaintiff

purchased the rights to the Program, which was broadcast on May 7,
2011.

Gagliardi Aff., ¶ 3.

Rule (3) did not obtain a license from

plaintiff to exhibit the Program.

Gagliardi Aff., ¶ 7.

sublicense fee is based on the capacity of the establishment.
this

event,

the

fee

would

have

been

$12,200

for

The
For

commercial

establishment with a maximum fire code occupancy of five hundred
persons.

Gagliardi Aff., ¶ 8.

Plaintiff retains law enforcement

personnel and auditors “at considerable expense” to detect and
identify signal pirates.

Gagliardi Aff., ¶ 6.

Plaintiff has also presented the affidavit of Investigator
Paul Jason Hall, who was present at Rule (3) from 11:00 p.m. on May
7, 2011, to 1:15 a.m. on May 8, 2011.

Mr. Hall stated that he did

not pay a cover charge to enter the premises.

Mr. Hall stated that

he observed the Pacquiao v. Mosley pay-per-view boxing event being
broadcast on twenty-two television screens on the premises.

Mr.

Hall observed that the premises included a bar with dining room, a
game room and a bowling alley, and has the capacity to accommodate
approximately five hundred people.

He counted the patrons three

times while he was there; the head counts were 220, 209 and 170.
Plaintiff has submitted no information concerning what expenses, if
any, it incurred in investigating this particular infraction.
Thus, the statutory damages payable under §605(e)(3)(C)(i)(I) and
(II) would be $1,150.00.
However, plaintiff argues that it is entitled to enhanced
damages under §605(e)(3)(C)(ii) for a willful violation.

Conduct

is “willful” if it shows “disregard for the governing statute and
an indifference to its requirements.” Transworld Airlines, Inc. v.

5

Thurston, 469 U.S. 111, 127 (1985).

For purposes of §605, conduct

is “willful” where there were repeated violations over time.
Easterling,

2009

WL

1767579

at

*6,

n.

2

(citing

Cable/Home

Communication Corp. v. Network Prod. Inc., 902 F.2d 829, 851 (11th
Cir. 1990)).

The court may also draw an inference of willfulness

from a defendant’s failure to appear and defend an action in which
the

plaintiff

demands

increased

allegations of willful conduct.

statutory

damages

based

on

Id.

In this case, plaintiff has submitted evidence that it would
be impossible to mistakenly or accidently intercept the Program.
See Gagliardi Aff., ¶ 9.

Illegal methods of interception include:

(1) a black box, hotbox or pancake box installed on a cable
television line to allow for the descrambled reception of a payper-view broadcast; (2) the use of a smart card, test card or
programming card installed on a DSS satellite receiver line to
allow for the descrambled reception of a pay-per-view broadcast;
(3) a purposeful misrepresentation by a commercial establishment
that it was a residence for purposes of purchasing a pay-per-view
program at the residential rate; (4) the use of an illegal cable
drop or splice to divert the broadcast from an apartment or home to
a nearby commercial establishment; or (5) the purchase of other
illegal decryption devices or satellite authorization codes.
Gagliardi Aff., ¶ 9.
Defendants failed to appear and defend this action, which
alleged willful violations of §605 and §553.

Plaintiff also notes

that

at

defendants

have

allegedly

violation in the past.
Smith,

Jr.,

Case

No.

committed

least

one

other

See Joe Hand Promotions, Inc. v. Donald T.
2:12-cv-559

6

(S.D.Ohio)(dismissed

upon

settlement on Feb. 2, 2013).

Thus, the court finds that there is

sufficient evidence that the violations in this case were willful.
Plaintiff must also show that the violation was committed for
purpose of commercial advantage or private financial gain.

Other

courts have held that this requirement is not satisfied where there
was no evidence of a cover charge, no evidence that the program was
advertised or that food or drink prices were increased, and where
the establishments were not filled to capacity. See Lukes, 2010 WL
4105663 at *3; Easterling, 2009 WL 1767579 at *6 (evidence of
willful exhibition for financial gain insufficient where there were
at most seventy-two patrons present in bar which held up to one
hundred and twenty customers, there was no cover charge, and there
was no evidence that the event was advertised or that food prices
were increased). However, in Joe Hand Promotions, Inc. v. McBroom,
No. 5:09-cv-276(CAR), 2009 WL 5031580 at *6 (M.D.Ga. Dec. 15,
2009), the court awarded enhanced damages of $3,300 (three times
the amount of the licensing fee of $1,100) even though there was no
evidence of repeated violations, that a cover fee was charged, or
that the event was advertised, and where the restaurant, which had
a capacity of two hundred persons, had eight customers on the night
of the broadcast.

In Joe Hand Promotions, Inc. v. RPM Management

Co. LLC, this court awarded enhanced statutory damages in the
amount of $25,000 even though there was no cover charge and the
facility was not filled to capacity.

See 2011 WL 5389425 at *3-4.

Plaintiff argues that the fact that a pirated event is not
advertised does not indicate the lack of a purpose to profit from
the event, since pirates do not generally advertise the fact that
they intend to unlawfully exhibit programming because they wish to

7

escape detection.

See Gagliardi Aff., ¶ 15.

Mr. Gagliardi also

stated that it is uncommon for pirate locations and licensees who
legally broadcast programs to increase food or beverage prices to
recover the cost of the license.

Gagliardi Aff., ¶ 16.

He also

indicated that most pirate establishments do not charge a cover
because

to

do

so

would

defeat

their

purpose

of

obtaining

a

competitive advantage by not charging a cover fee for the event,
thereby attracting customers away from licensed establishments.
Gagliardi Aff., ¶ 17.
In this case, the evidence includes three separate head counts
of

220,

209

and

170

patrons

investigator was there.

present

at

See Hall Aff.

Rule

(3)

while

the

This was a sizable

audience, considering the bar’s capacity of 500 persons and the
fact that Mr. Hall witnessed the Program being shown on Rule (3)’s
televisions after 11:00 p.m.

The establishment had twenty-two

television screens, all of which were showing the Program.

The

court concludes that there is sufficient evidence that the willful
violation in this case was committed for the purpose of commercial
advantage or private financial gain. The court finds that enhanced
statutory damages in the amount of $25,000.00 is an appropriate
award in this case.
Plaintiff is also entitled to an award of attorney’s fees and
costs.

In this case, plaintiff has submitted an affidavit from

counsel claiming $1,350.00 in attorney’s fees and $400.00 in costs.
The court finds that an award in these amounts is reasonable.
Therefore,

the

court

also

awards

the

plaintiff

$1,350.00

in

attorney’s fees and $400.00 in costs.
In accordance with the foregoing, plaintiff’s motion for

8

default judgment (Doc. 10) is granted.

The clerk shall enter

judgment in favor of plaintiff and against the defendants, jointly
and severally, in the total amount of $26,750.00, consisting of
$25,000.00 in statutory damages for a willful violation of §605,
committed with the purpose of commercial advantage or financial
gain, $1,350.00 in attorney’s fees, and $400.00 in costs.

It is so ordered.

Date: February 13, 2014

s/James L. Graham
James L. Graham
United States District Judge

9