Joe Hand Promotions, Inc. v. Buckman et al

Filing 12

REPORT AND RECOMMENDATIONS that 10 MOTION for Default Judgment against Jessica Buckman and Michael Hutton, dba MVP Sports Bar & Billiards be granted and that judgment be entered against the defendants in the amount of $3,750.00 in statutory damages and $1,775.00 for attorneys' fees and costs. Objections to R&R due within fourteen (14) days. Signed by Magistrate Judge Terence P Kemp on 3/27/2015. (agm1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Joe Hand Promotions, Inc.,

:

Plaintiff,

:

v.

:
:

Jessica Buckman, et al.,
Defendants.

Case No. 2:14-cv-1178
JUDGE ALGENON L. MARBLEY
Magistrate Judge Kemp

:

REPORT AND RECOMMENDATION
This matter is before the Court on a motion for default
judgment filed by plaintiff Joe Hand Promotions, Inc. against
defendants Jessica Buckman and Michael Hutton.

The Clerk entered

default against these defendants on September 9, 2014.

For the

following reasons, the Court will recommend that the motion for
default judgment be granted.
I.

Background

JHP is an international distributor of sports and
entertainment programming.

According to the complaint, JHP was

granted the exclusive nationwide commercial distribution (closedcircuit) rights to broadcast the Ultimate Fighting Championship
160, Cain Velasquez v. Antonio Silva Fight Program shown on
Saturday May 25, 2013.

Defendants allegedly broadcast the

program at MVP Sports Bar & Billiards in Zanesville, Ohio without
pruchasing a sublicense from JHP to do so.
JHP asserts claims under the Communications Act of 1934, as
amended, 47 U.S.C. 605, et seq., and the Cable and Television
Consumer Protection and Competition Act of 1992, as amended, 47
U.S.C. 553, et seq.

JHP also asserts a claim for conversion.

Ms. Buckman and Mr. Hutton were served with a summons, which
was returned executed.

After they failed to file an answer, JHP

filed an application for entry of default.

The Clerk entered

default on September 9, 2014.
II.

Legal Standard

Federal Rule of Civil Procedure 55(b) authorizes a court to
enter default judgment against a party whose default has been
entered by the clerk.

Once default has been entered, a

defaulting defendant is considered to have admitted all the wellpleaded allegations relating to liability.

See Antoine v. Atlas

Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995).
The mere determination of defendant’s liability does not,
however, automatically entitle plaintiff to default judgment.
The decision to grant default judgment falls within a court’s
discretion.

10A Charles Alan Wright & Arthur R. Miller, Fed.

Prac. & Proc. Civ. § 2685 (3d ed.).

In determining whether to

enter judgment by default, courts often consider such factors as
the amount of money potentially involved; whether
material facts or issues of substantial public
importance are at issue; whether the default is largely
technical; whether plaintiff has been substantially
prejudiced by the delay involved; and whether the
grounds for default are clearly established or are in
doubt. Furthermore, the court may consider how harsh
an effect a default judgment might have; or whether the
default was caused by a good-faith mistake or by
excusable or inexcusable neglect on the part of the
defendant.
Id.

(footnotes omitted).
While the well-pleaded factual allegations of the complaint

are taken as true when a defendant is in default, damages are
not.

Where damages are unliquidated, a default admits only

defendant’s liability and the amount of damages must be proved.
Id.

The court may conduct an evidentiary hearing to determine

damages but such a hearing is not a prerequisite to the entry of
default if damages are contained in documentary evidence or
detailed affidavits allowing

a decision on the record.
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Joe Hand

Promotions, Inc. v.

RPM Management Co. , LLC, 2011 WL 5389425

(S.D. Ohio Nov. 7, 2011), *1.
III.

The Motion for Default

JHP has brought claims under both 47 U.S.C. §605 and 47
U.S.C. §553. In support of its motion, JHP has submitted the
affidavit of its company president, Joe Hand, Jr.

According to

Mr. Hand, JHP is a closed-circuit distributor of sports and
entertainment programming.

JHP purchased the rights to the

Ultimate Fighting Championship 160, which was broadcast on May
25, 2013.

JHP also submitted the affidavit of investigator

Laurence McDonald who was present at the MVP Sports Bar from
10:50 p.m. on May 25, 2013 to 12:30 a.m. on May 26, 2013.
According to Mr. McDonald, he witnessed a portion of the program,
including the under-card bout between Junior dos Santos and Mark
Hunt being broadcast on one of the bar’s 100' plus flat screen
televisions.
program.

MVP Sports Bar was not licensed by JHP to show the

According to the rate card for the program, the

commercial fee which would have been charged for MVP to broadcast
the program was $1,250.00.

This rate is based on MVP’s having a

capacity of 150 people.
JHP also argues that it is entitled to an increased damages
award because the defendants acted willfully.

To support its

claim of willful conduct, Mr. Hand states in his affidavit that
it would be impossible to mistakenly or accidentally intercept
the program.

He explains in detail various methods of piracy

which would have to be used.
In further support of its request for such damages, JHP
argues that the circumstances demonstrate that the violation was
committed for commercial advantage or private financial gain.
For example, Mr. Hand notes that Mr. McDonald made three separate
head counts of 48, 50 and 47 while there and reported that the
program was being shown on 4 of the 11 televisions.
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Recognizing

that some courts have held that this element requires evidence of
a cover charge, advertisement, or an increase in food and drink
prices, he explains that, to avoid detection, it would be
extremely unlikely for a pirate establishment to take such steps
to promote the programming.
JHP seeks $50,000 in statutory and enhanced damages under 47
U.S.C. §605 and $25,000 in statutory and enhanced damages under
47 U.S.C. §553.

JHP also seeks $1375.00 in attorneys’ fees and

costs of $400.00.
IV.

Analysis

As noted above, JHP has brought claims under both 47 U.S.C.
§605 and 47 U.S.C. §553. Section 605 prohibits the unauthorized
interception of radio communications and has been interpreted as
outlawing satellite signal piracy.

This section permits recovery

of actual or statutory damages of between $1,000 and $10,000 for
each violation.

47 U.S.C. §605(e)(3)(C)(i)(I) and (II).

Section

553 makes it illegal to intercept or receive without
authorization any communication service offered over a cable
system, including the theft of programming directly from a cable
system.

Under this section, a party may recover actual damages

or, in the alternative, an award of statutory damages ranging
from $250 to $10,000 for all violations involved.
§553(c)(3)(A)(I) and (ii).
statutes.

47 U.S.C.

Both sections are strict liability

Also, under both sections, where a court finds a

willful violation committed for commercial advantage or private
financial gain, a court may, in its discretion, increase the
award of actual or statutory damages by an amount not to exceed
$50,000 for violations of §553 or $100,000 for violations of
§605.

47 U.S.C. §553(c)(3)(B); 47 U.S.C. §605(e)(3)(C)(ii)

Both

sections also permit an award of costs and reasonable attorneys’
fees.

47 U.S.C. 605(e)(3)(B)(iii); 47 U.S.C. 553(c)(2)(C).
Accepting as true all the well-pleaded allegations of JHP’s
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complaint, it has established the elements required to state a
claim under these statutes.

Specifically, JHP had the exclusive

nationwide television distribution rights to the program.
Further, defendants unlawfully intercepted and exhibited the
program willfully and for purposes of direct or indirect
commercial advantage or financial gain.

Consequently, the Court

finds that JHP has established that defendants violated §§605 and
553 and will recommend that the motion for default judgment be
granted.
When a defendant is liable under both statues, however, a
plaintiff may recover under only one section.

International

Cablevision, Inc. v. Sykes, 75 F.3d 123, 129 (2nd Cir. 1996).
Generally, §605 is applied because it allows for a higher
recovery.

RPM Managament, 2011 WL 5389425, at *2, citing Int’l

Cablevision, Inc. v. Sykes, 997 F.2d 998, 1004 (2nd Cir. 1993).
Consequently, the Court recommends that JHP be limited to
recovery under only §605.
Under that provision, JHP seeks to recover statutory damages
in the amount of $50,000.

When determining an award of statutory

damages, courts typically consider the cost of the right to
broadcast the program and the plaintiff’s cost to monitor and
investigate its broadcasting rights.

Joe Hand Promotions v.

Fazio, 2012 WL 1036134, *3 (N.D. Ohio Jan. 31, 2012), citing
Nat’l Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 918
(6th Cir. 2001).

The amount of damages awarded under this

statute is within the Court’s discretion.

Id. at *3.

According

to Mr. Hand’s affidavit, based on the maximum capacity of 150
people, JHP would have charged defendants $1,250 for a license to
broadcast the program.

JHP has not provided any evidence of the

cost of monitoring and investigating its broadcast rights
specific to this case, although Mr. Hand does state generally in
his affidavit that JHP retains auditors and law enforcement
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personnel at great expense.

Given the state of the record, the

Court can conclude only that JHP lost $1,250.00 as a result of
defendants’ conduct.

Consequently, the Court will recommend an

award of statutory damages in that amount for defendants’
violation of §605.
This brings the Court to the issue of enhanced damages
based on defendants’ alleged willful conduct.

“Conduct is

‘willful’ if it shows ‘disregard for the governing statute and an
indifference to its requirements.’”

RPM Management, 2011 WL

5389425, at *3, quoting Transworld Airlines, Inc. v. Thurston,
469 U.S. 111, 127 (1985).

On this issue, courts look to evidence

of a cover charge, advertisement of the program, an increase in
food or drink prices, and the size of the crowd in determining
whether a violation was committed for commercial advantage or
private financial gain.

Id. at *3, citing J & J Sports

Production, Inc. v. Lukes, 2010 WL 4105663 (N.D. Ohio Oct. 18,
2010).

Courts have also drawn an inference from a defendant’s

failure to appear and defend an action in which the plaintiff
demands increased statutory damages based on allegations of
willful conduct.

Joe Hand Promotions v. Easterling, 2009 WL

1767579, *6 fn. 2 (N.D. Ohio June 22, 2009).
JHP has not identified the specific amount of damages it
seeks for defendants’ alleged willful conduct, having simply
requested a total of $50,000 in damages under §605.

Based on Mr.

McDonald’s affidavit, approximately 50 people, or one-third of
MVP’s capacity crowd, were present on the evening of the
broadcast at issue.

Further, the program was being shown on only

four of MVP’s eleven televisions.

Additionally, there is no

evidence that defendants charged admission, increased prices, or
openly advertised the broadcast.

In short, there is minimal

evidence directed to the issue of defendants’ commercial
advantage or financial gain.

Under such circumstances, some
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courts have declined to award damages for alleged willful
misconduct at all.

Joe Hand v. Orim, 2010 WL 3931108 (N.D. Ohio

October 5, 2010); Joe Hand v. Willis, 2009 WL 369511 (N.D. Ohio
February 11, 2009).
On the other hand, some courts, recognizing the deterrent
intent of the statute, have found an award of enhanced damages
appropriate under facts similar to this case.

These awards,

however, typically bear some connection to the principal
statutory award.

For example, in Fazio, 2012 WL 1036134, the

Court found an enhanced damages award of twice the principal
amount warranted, bringing the entire damages award to three
times the amount defendants would have paid for the broadcast
rights.
The Court finds the reasoning of Fazio persuasive and will
recommend that it be applied here.

As the court stated in that

case,
... the deterrence of future violations is one of
the objectives of the statute. Merely requiring
defendants to pay the price they originally would have
been charged to obtain legal authorization to display
the Program does nothing to accomplish this objective
of the statute. In other words “[t]here would be no
incentive to cease the violation if the penalty were
merely the amount that should have been paid.”
Entertainmnet by J & J, Inc. v. Nina’s Restaurant and
Catering, 2002 WL 1000286, at *3 (S.D.N.Y. May 9, 2002)
....
Plaintiff has not adduced sufficient evidence to
support its request of enhanced statutory damages
beyond this amount. While Plaintiff argues that
Defendants’ violation of Section 605(a) was willful and
for commercial or financial gain, the evidence provided
by Plaintiff fails to support a conclusion that an
award of this magnitude is justified in this case....
While plaintiff is entitled to some enhanced damages
given the allegations in the Complaint and the low
probability that a commercial establishment could
intercept the Program merely by chance, see Al-Waha,
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219 F.Supp.2d 769, Plaintiff has not presented any
allegations or evidence showing that Defendants’
conduct was egregious enough to justify a more
significant damages award, let alone an award of
damages at or near the maximum allowed for a violation
of Section 605.
Fazio, 2012 WL 1036134, at *3, *4.
the case here.

The above scenario describes

Consequently, the Court concludes that an

enhanced award of $2,500 would address the concerns raised by JHP
while recognizing the limited evidence it provided as to
defendants’ willful conduct.
Further, the Court finds the circumstances of this case
easily distinguishable from those in RPM Management, 2011 WL
5389425, which resulted in another Judge from this Court awarding
JHP $25,000 in damages based on the defendant’s alleged willful
conduct.

The defendants in that case were found to have

committed multiple violations.
presented in this case.

No similar evidence has been

Consequently, the Court will recommend a

total damages award of $3,750, or three times the amount
defendants would have paid for the right to broadcast the
program.
JHP also seeks attorneys’ fees and costs. 47 U.S.C.
§605(e)(3)(B)(iii) provides that the court shall direct the
recovery of full costs, including awarding reasonable attorneys’
fees to an aggrieved party who prevails.”

JHP has submitted an

affidavit of counsel claiming $1,375.00 in attorneys’ fees and
$400 in costs.

The Court has reviewed this information and finds

that the requested costs and fees are reasonable.

Consequently,

the Court will recommend an award of attorneys’ fees and costs in
the amount of $1,775.00.
V.

Recommendation

For the reasons stated above, it is recommended that the
motion for default judgment (Doc. 10) be granted and that

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judgment be entered against defendants in the amount of $3,750.00
in statutory damages and $1,775.00 for attorneys’ fees and costs.
VI.

PROCEDURE ON OBJECTIONS

If any party objects to this Report and Recommendation, that
party may, within fourteen days of the date of this Report, file
and serve on all parties written objections to those specific
proposed findings or recommendations to which objection is made,
together with supporting authority for the objection(s).

A judge

of this Court shall make a de novo determination of those
portions of the report or specified proposed findings or
recommendations to which objection is made.

Upon proper

objections, a judge of this Court may accept, reject, or modify,
in whole or in part, the findings or recommendations made herein,
may receive further evidence or may recommit this matter to the
magistrate judge with instructions.

28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to object
to the Report and Recommendation will result in a waiver of the
right to have the district judge review the Report and
Recommendation de novo, and also operates as a waiver of the
right to appeal the decision of the District Court adopting the
Report and Recommendation.

See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir.1981).

/s/ Terence P. Kemp
United States Magistrate Judge

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