J&J SPORTS PRODUCTIONS, INC. v. HACKETT et al

Filing 37

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE EDUARDO C. ROBRENO ON 09/06/2017. 09/07/2017 ENTERED AND COPIES E-MAILED.(nds)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
J & J SPORTS PRODUCTIONS, INC.,
Plaintiff,
v.
CHARLES A. HACKETT, et al.,
Defendants.

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CIVIL ACTION
NO. 16-2725

M E M O R A N D U M
EDUARDO C. ROBRENO, J.

September 6, 2017

Plaintiff J & J Sports Productions, Inc. (“Plaintiff”
or “J & J”) brings this action against Defendants All Star
Sports Bar & Grille, Inc. (“All Star Sports Bar”) and individual
Charles A. Hackett (“Hackett”), alleging commercial piracy of a
certain boxing match between Miguel Cotto and Sergio Martinez,
in violation of the Communications Act of 1934. Plaintiff has
moved for summary judgment, and Defendants have responded in
partial opposition. For the reasons that follow, the Court will
grant Plaintiff’s motion and enter judgment in favor of
Plaintiff and against both Defendants.
I.

BACKGROUND
Plaintiff is a California corporation that paid for

exclusive nationwide commercial distribution rights to a boxing

match between Miguel Cotto and Sergio Martinez that took place
on June 7, 2014 (the “Program”). Compl. ¶ 16. Plaintiff then
sublicensed these rights to various commercial entities across
North America. Id. ¶ 17.
Plaintiff alleges that it did not sublicense rights to
the Program to the Hotel Sports Bar & Grille (“Hotel Sports
Bar”), which is located at 541 West Lancaster Avenue in
Downingtown, Pennsylvania, and owned and operated by Defendant
All Star Sports Bar. Id. ¶¶ 7, 19. According to Plaintiff,
Defendants unlawfully intercepted the Program and showed the
live broadcast to patrons at Hotel Sports Bar without having
obtained the proper license to do so. Id. ¶ 19.
Plaintiff filed its complaint in this case on June 3,
2016. ECF No. 1. Following the Court’s denial of Defendant
Hackett’s motion to dismiss, see ECF No. 26, the parties engaged
in discovery, and Plaintiff moved for summary judgment against
both Defendants on May 10, 2017, ECF No. 28. Attached to the
motion is, among other items, an affidavit signed by Daniel
Szlezak, the private investigator who visited Hotel Sports Bar
during the Program broadcast on June 7, 2014. ECF No. 28-5.
Defendants responded together in partial opposition to
Plaintiff’s motion for summary judgment, ECF No. 29, and
Plaintiff replied, ECF No. 36. The motion is now ripe for
disposition.
2

II.

LEGAL STANDARD
Summary judgment is appropriate if there is no genuine

dispute as to any material fact and the moving party is entitled
to judgment as a matter of law. Fed. R. Civ. P. 56(a). “A motion
for summary judgment will not be defeated by ‘the mere
existence’ of some disputed facts, but will be denied when there
is a genuine issue of material fact.” Am. Eagle Outfitters v.
Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)). A
fact is “material” if proof of its existence or nonexistence
might affect the outcome of the litigation, and a dispute is
“genuine” if “the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson, 477 U.S. at
248.
In considering a motion for summary judgment, the
Court views the facts in the light most favorable to the
nonmoving party. “After making all reasonable inferences in the
nonmoving party’s favor, there is a genuine issue of material
fact if a reasonable jury could find for the nonmoving party.”
Pignataro v. Port Auth. of N.Y. & N.J., 593 F.3d 265, 268 (3d
Cir. 2010). The moving party bears the initial burden of showing
the absence of a genuine issue of material fact, but meeting
this obligation shifts the burden to the nonmoving party, who

3

then must “set forth specific facts showing that there is a
genuine issue for trial.” Anderson, 477 U.S. at 250 (quoting
Fed. R. Civ. P. 56(e)).
III. DISCUSSION
Section 605 of the Communications Act of 1934
“provides a civil remedy for the unauthorized use or publication
of various wire or radio communications, including encrypted
satellite broadcasts.” DIRECTV, Inc. v. Seijas, 508 F.3d 123,
125 (3d Cir. 2007) (quoting DIRECTV, Inc. v. Pepe, 431 F.3d 162,
164 (3d Cir. 2005)). Specifically, this statutory provision
prohibits the unauthorized reception of “any interstate or
foreign communication by radio” and the use of any such
communication “for his own benefit or the benefit of another not
entitled thereto.” 47 U.S.C. § 605(a).1

1

Although Plaintiff initially sought relief under both
47 U.S.C. § 553 and 47 U.S.C. § 605, it has moved for summary
judgment only on its § 605 claim. Both of these statutory
sections prohibit the unauthorized interception and exhibition
of communications, and within the Third Circuit, plaintiffs may
seek summary judgment on only one of the two. See TKR Cable Co.
v. Cable City Corp., 267 F.3d 196, 207 (3d Cir. 2001)
(explaining that Ҥ 605 encompasses the interception of
satellite transmissions ‘to the extent reception or interception
occurs prior to or not in connection with, distribution of the
service over a cable system,’ and no more. . . . Once a
satellite transmission reaches a cable system’s wire
distribution phase, it is subject to § 553 and is no longer
within the purview of § 605.” (citations omitted)).

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Under certain circumstances, an individual may be held
vicariously liable for a § 605 violation committed by his or her
co-defendant corporation. Courts within this district have
articulated the following requirements for imposing this type of
vicarious liability:
An individual may be liable if he “(1) has the right
and ability to supervise the violative activity,
although he need not actually be supervising, because
he need not know of the violative activity, and (2)
has a direct financial interest in the violation,
i.e., financial benefits, even if not proportional or
precisely calculable, that directly flow from the
violative activity.”
J & J Sports Prods., Inc. v. Cruz, No. 14-2496, 2015 WL 2376290,
at *4 (E.D. Pa. May 18, 2015) (quoting Joe Hands Promotions,
Inc. v. Yakubets, 3 F. Supp. 3d 261, 296 (E.D. Pa. 2014)).
Once liability has been found, Section 605 provides
that an aggrieved party may, at its discretion, recover either
actual or statutory damages. See 47 U.S.C. § 605(e)(3)(C).
“Because ‘[t]here are no mens rea or scienter elements for a
non-willful violation of 47 U.S.C. § 605(a),’ Defendants are
strictly liable for actual or statutory damages.” Cruz, 2015 WL
2376290, at *5 (quoting J & J Sports Prods., Inc. v. De La
Cerda, No. 11–1896, 2013 WL 5670877, at *5 (E.D. Cal. Oct. 16,
2013)).
Neither the Supreme Court nor the Third Circuit has
established a formula for calculating damages under 47 U.S.C.

5

§ 605. Following a comprehensive analysis of the goals served by
the statutory damages provision, Judge Pratter explained in
Yakubets that “the aim of statutory damages is to estimate
actual damages” and recommended that this estimate be “a
conservative figure that does not simply allow circumvention of
the actual damages provision’s proof requirement.” Yakubets, 3.
F. Supp. 3d at 280. Judge Pratter outlined the following factors
for consideration in reaching this estimate:
(1) the size of the establishment; (2) the number of
patrons at the establishment, taken, to the extent
possible, as the number of patrons present because of
the interception (to which evidence of advertising to
attract customers may be relevant); (3) the number,
size, and position of screens displaying the broadcast
(a factor to be considered in conjunction with (1) and
(2)
as
an
indication
of
who
might
be
there
specifically to watch); (4) any cover charge levied
because of the interception; (5) what additional money
patrons spent because of the interception (i.e., the
amounts spent by those who otherwise would not have
come, plus any other premiums or greater spending by
those who would have come anyway); and (6) any such
other factors as may appear relevant in the case
before the court.
Id. Other courts within this district have subsequently endorsed
this analysis. See, e.g., J & J Sports Prods., Inc. v. Cruz, No.
14-2496, 2015 WL 2376051, at *4 (E.D. Pa. May 18, 2015) (citing
Yakubets to support the conclusion that “it appears Congress did
not intend that a deterrence factor be part of the calculation
for statutory damages. . . . [A]ccording to the plain language
of the statute, statutory damages are merely an alternative to

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actual damages.”); J & J Sports Prods., Inc. v. Chauca, No. 146891, 2015 WL 7568389, at *7 (E.D. Pa. Nov. 25, 2015) (agreeing
that “deterrence is not a proper consideration for calculating
statutory damages”).
Additionally, “enhanced” actual or statutory damages
may be available under 47 U.S.C. § 605(e)(3)(C)(ii), which
provides in full as follows:
In any case in which the court finds that the
violation was committed willfully and for purposes of
direct or indirect commercial advantage of private
financial gain, the court in its discretion may
increase the award of damages, whether actual or
statutory, by any amount of not more than $100,000 for
each violation of [§ 605(a)].
47 U.S.C. § 605(e)(3)(C)(ii). Though neither the Supreme Court
nor the Third Circuit has interpreted the term “willfully” as
used in this provision, Judge Pratter concluded persuasively in
Yakubets that “willfulness for purposes of § 553(c)(3)(B)’s
enhanced damages requires both the defendant’s intentional
signal interception as well as knowledge of or reckless
disregard as to the unlawfulness of its signal interception.”
Yakubets, 3 F. Supp. 3d at 284. In accord with this standard,
“courts have repeatedly found that the mere act of piracy itself
evidences intent because in order for a closed circuit broadcast
to be intercepted, the interceptor has to engage in some
deliberate act; it is virtually impossible to do so
accidentally.” J & J Sports Prods., Inc. v. Martinez, No. 137

6885, 2014 WL 5410199, at *8 (E.D. Pa. Oct. 23, 2014).
Similarly, the act of showing the broadcast in a bar “allows for
an inference that the piracy was done for commercial or
financial gain.” Id. at *9.
To measure enhanced damages, courts often employ
multifactor tests that “balance ‘[t]he need for deterrence . . .
against the harm to the defendant’s business if significant
damages are assessed.’” Yakubets, 3. F. Supp. 3d at 289 (quoting
J & J Sports Prods., Inc. v. Guzman, No. 12-525, 2012 WL
3108831, at *1 (D. Ariz. July 31, 2012)); see also, e.g.,
Martinez, 2014 WL 5410199, at *8 (recognizing that “the
willfulness of [the] [d]efendants’ violation . . . strongly
favors an award of at least some enhanced damages,” but also
that too large a damages award would “cause extreme hardship to
a small business and would result in a gross overcompensation of
[the] [p]laintiff despite its failure to produce any evidence of
[the] [d]efendants’ commercial advantage or gain”); J & J Sports
Prods., Inc. v. Wing Bistro LLC, No. 13-31, 2013 WL 6834645, at
*9 (E.D. Va. Dec. 19, 2013) (imposing “a milder fine” under
§ 605(e)(3)(C)(ii) because the illegal broadcast, though
willful, was exhibited to only fourteen patrons, and the amount
of actual damages that could be calculated was only the unpaid
license fee of $1,200).

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Here, Defendant All Star Sports admits that “it did,
unintentionally, display the Program using a residential, as
opposed to a commercial license.” Defs.’ Resp. Mot. Summ. J. at
3, ECF No. 29. Further, Defendant All Star Sports Bar concedes
that “a nominal judgment should be entered against it on the
Section 605 claim that [Plaintiff] is pursuing.” Id. Given this
admission, and seeing no evidence on the record to the contrary,
the Court finds Defendant All Star Sports liable for a single
violation of 47 U.S.C. § 605(a).
Despite his corporate co-defendant’s admission of
liability, Defendant Hackett denies liability on the basis that
he is “an individual that was not present on the night of the
violation, had no ability to prevent the violation, and has
received no benefit as a result of the violation.” Id. at 6-7.
Defendant Hackett maintains that he has paid for commercial
licenses to access Plaintiff’s programming in the past, and,
“[h]ad Hackett actually exercised control on the day of the
violation, he would have known to use his account with
[Plaintiff] to purchase a commercial license, and this dispute
would have been avoided.” Id. at 8; see also Defs.’
Counterstatement of Material Facts ¶ 9, ECF No. 29 (“It is
admitted that All Star’s manager, who was not aware of the
distinction between personal and commercial licensing, used All
Star’s staff account to purchase access to the Program and
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broadcast it to the bar. Hackett, however, was not present at
the time, and did not authorize the purchase, or, indeed, know
of it, until long afterward.”). In other words, Defendant
Hackett argues, “it is precisely [his] lack of control over All
Star that is the genesis of this case.” Id.
His minimal personal involvement notwithstanding, the
Court finds Defendant Hackett vicariously liable for Defendant
All Star Sports Bar’s § 605 violation. Defendant Hackett admits
that he is one of three owners and shareholders of All Star
Sports Bar. See Defs.’ Resp. Mot. Summ. J. at 7. He further
admits that, “together with his partners, [he] has purchased an
account with [Plaintiff] and has paid for commercial licenses to
access [Plaintiff]’s programming in the past.” Id. at 7-8.
Although he denies exercising control on the specific night in
question, “he need not actually be supervising” nor “know of the
violative activity” in order to be held liable. See Cruz, 2015
WL 2376290 at *4. Moreover, because Defendant Hackett, by virtue
of his undisputed role in the company, “had a direct financial
interest in the conduct that violated § 605,” he may be held
vicariously liable for the acts of the manager on duty at the
bar that evening. See id.; see also Yakubets, 3 F. Supp. 3d at
296 (“If . . . [an officer’s] compensation increases with the
establishment’s profits--i.e., from greater profits the night
the [program in question] was illegally intercepted and
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exhibited at [the establishment in question]--the [‘direct
financial benefit’] requirement could be met.”).
Having found both Defendants liable to Plaintiff for
the June 7, 2014, broadcast of the Program at Hotel Sports Bar,
the Court now turns to the calculation of damages. Plaintiff in
this case “elects to receive statutory damages.” Mem. Supporting
Mot. Summ. J. at 9, ECF No. 28-1. In Plaintiff’s view, awards of
$5,000 in statutory damages and $20,000 in enhanced statutory
damages would be “appropriate to satisfy the dual purposes of
compensating Plaintiff and acting as a deterrent against future
acts of piracy by both these Defendants and others.” Id.
Defendants respond that, “under Section
605(e)(3)(C)(i), [Plaintiff] should recover $800 in actual
damages or $1,000 in statutory damages.” Defs.’ Resp. Mot. Summ.
J. at 5.

Based on an argument that “[t]he ‘violation’ here

[was] not an intentional attempt to avoid payment but, rather,
an unintentional error by a novice manager,” Defendants argue
that “the Court should award not the statutory minimum of $1,000
but, instead, J&J’s actual damages of $800 pursuant to
subsection § 605(e)(3)(C)(1).” Id. at 6.
Defendants contend that the price of a commercial
license for the Program was $800. See Defs.’ Resp. Mot. Summ. J.
at 5. Further, they claim that they “did not charge for access
to the Program by cover charge, and made substantially no
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profits on the night of the Program.” Id. Plaintiff does not
dispute these assertions.
By way of its private investigator’s signed affidavit,
Plaintiff informs the Court that the capacity of Hotel Sports
Bar is “approximately 90 people.” ECF No. 28-5. The
investigator’s affidavit also indicates that separate
headcounts, conducted over a period of about twenty minutes,
“were 12, 11 and 16.”2 Id. The investigator “didn’t pay a cover
charge” to enter the establishment, and he observed the Program
playing on seven of nine visible televisions. Id.
Given these facts, the Court will impose the minimum
statutory damages award of $1,000. This amount is greater than
the $800 price of the commercial license for the Program that
Defendants rightfully should have purchased. Aside from this
figure, Plaintiff has offered no evidence as to what, if any,
profits Defendants earned on the night of the Program. The Court
therefore declines to add anything further to the estimate of
actual damages guiding this “conservative” award of statutory
damages. See Yakubets, 3. F. Supp. 3d at 280.

2

The investigator claims in his affidavit that he
“counted the number of patrons two separate times,” but also
that “[t]he headed counts were 12, 11 and 16.” ECF No. 28-5.
This discrepancy, though curious, is immaterial to the Court’s
resolution of this case.
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Regarding enhanced damages, the Court finds that
Defendant All Star Sports Bar’s violation was “willful” within
the meaning of § 605(e)(3)(C)(ii) because the evidence supports
both “intentional signal interception as well as knowledge of or
reckless disregard as to the unlawfulness of its signal
interception.” Yakubets, 3 F. Supp. 3d at 284; see also
Martinez, 2014 WL 5410199, at *9 (“Defendants’ showing of the
Program in a bar allows for an inference that the piracy was
done for commercial or financial gain.”).

Defendant All Star

Sports Bar has admitted that it did not pay a commercial
licensing fee to Plaintiff before broadcasting the program, and
further that it was aware that it needed to have paid a
commercial licensing fee to Plaintiff before broadcasting the
Program. See Defs.’ Resp. Mot. Summ. J. at 3. Defendant All Star
Sports Bar has also admitted that information was advertised on
Hotel Sports Bar’s public Facebook page regarding the broadcast
of the Program. See Defs.’ Counterstatement of Material Facts
¶ 17, ECF No. 29.
Considering the circumstances establishing Defendant
All Star Sports Bar’s willful violation of § 605, the Court
concludes that a total enhanced damages amount of $500 awarded
in favor of Plaintiff and against Defendant All Star Sports Bar
appropriately balances the need for deterrence against potential
harm to Defendant All Star Sports Bar’s business from the
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imposition of significant damages. Plaintiff’s own investigator
reported that there was no cover charge to view the Program
broadcast at Hotel Sports Bar, and his highest headcount
numbered only sixteen. Though several courts within this
district have utilized a three-times multiplier of statutory or
actual damages to calculate enhanced damages,3 this Court finds,
like the court in Martinez, that a treble damages award “would
cause extreme hardship to a small business and would result in a
gross overcompensation of Plaintiff despite its failure to
produce any evidence of Defendants’ commercial advantage or
gain.” 2014 WL 5410199, at *9.
The Court declines to impose joint liability on
Defendant Hackett for any enhanced damages. Enhanced damages
“are not true damages, but rather penalties aimed to deter and

3

These courts generally have held that “a simple
multiplier best achieves the dual goals of general and specific
deterrence” by “vindicat[ing] Congress’s interest in generally
deterring theft of [satellite] services . . . as well as
address[ing] [the statutory] ‘commercial advantage of private
financial gain’ prerequisite by forcing the defendant to
disgorge a multiple of its profits (and thus also specifically
deters).” Chauca, 2015 WL 7568389, at *9 (quoting Cruz, 2015 WL
2376051, at *7)). “Courts applying multipliers have generally
awarded anywhere from three to six times the award for enhanced
damages,” Cruz, 2015 WL 2376051, at *7 (citing Yakubets, 3 F.
Supp. 3d at 290-91), and the primary factor to consider in
choosing the appropriate multiplier is “whether, and to what
extent, the defendant is a repeat violator,” Yakubets, 3 F.
Supp. 3d at 291. Though perhaps warranted in other cases, the
Court finds that even the baseline triple multiplier would yield
too high an enhanced damages award in this case.
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which depend on willfulness, whereas the ‘right and ability to
supervise’ standard does not even require knowledge.” Cruz, 2015
WL 2376290, at *5 (quoting Yakubets, 3. F. Supp. at 302). Here,
Plaintiff has offered no evidence countering Defendant Hackett’s
assertions that he did not personally intercept the Program,
direct his employees to intercept the Program, or have any
knowledge that the Program was intercepted and broadcast on the
date and time in question. Accepting as true Defendant Hackett’s
uncontested contention that he was not aware that the Program
had been purchased or broadcast, the Court finds no basis upon
which a jury could conclude that Defendant Hackett’s conduct was
“willful” under the enhanced damages provision.
IV.

CONCLUSION
For the foregoing reasons, the Court will impose a

judgment of $1,000.00 against Defendant All Star Sports Bar and
Defendant Hackett, jointly and severally, pursuant to 47 U.S.C.
§ 605(e)(3)(C)(i)(II). The Court will additionally impose a
judgment of $500.00 against Defendant All Star Sports Bar,
pursuant to 47 U.S.C. § 605(e)(3)(C)(ii). Appropriate orders
follow.4

4

The Court will allow Plaintiff fourteen days from the
date of the orders entering judgment to submit evidence and
costs of attorneys’ fees pursuant to 47 U.S.C.
§ 605(e)(3)(B)(iii).
15