Joe Hand Promotions Inc v. Collective Minds LLC et al

Filing 11

ORDER AND OPINION granting 10 Motion for Default Judgment. Signed by Honorable Margaret B Seymour on 10/19/2017.(mdea )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Joe Hand Promotions, Inc.,

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Plaintiff,
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vs.
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Collective Minds LLC, et al.,
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Defendants.
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____________________________________)

Civil Action No.: 3:17-cv-01319-MBS

ORDER AND OPINION

On May 22, 2017, Plaintiff Joe Hand Productions, Inc. (“Plaintiff”) filed an action in this
court against Defendants Collective Minds, LLC, d/b/a/ Mynt Lounge & Bistro (the
“Establishment”), and Benjamin Rogers (collectively “Defendants”). Plaintiff alleges that it
owned the exclusive television distribution rights for the Ultimate Fighting Championship® 201:
Lawler v. Woodley broadcast (the “Program”) and that Defendants exhibited the Program at a
commercial establishment without paying a licensing fee to Plaintiff. Plaintiff has asserted claims
under the Communications Act, 47 U.S.C. § 605, and the Cable Communications Policy Act, 47
U.S.C. § 553. Neither Defendant filed an answer or otherwise responded to Plaintiff’s Complaint.
On July 7, 2017, in response to Plaintiff’s request, the clerk entered default as to both Defendants.
On August 16, 2017, Plaintiff filed a Motion for Default Judgment.
FACTS
The following facts are alleged in Plaintiff’s Complaint (ECF No. 1), and due to
Defendants’ default, are accepted as true: Defendant Collective Minds, LLC is a South Carolina
business that operates, maintains and controls the establishment known as Mynt Lounge & Bistro
located at 2732 Decker Boulevard, Columbia, SC 29206. Id. at 1–2. Defendant Benjamin Rogers
is a South Carolina resident and an officer, director, shareholder, member and/or principal of the

entity owning and operating the Establishment. Id. at 2. Plaintiff, a Pennsylvania corporation,
held the exclusive commercial distribution rights to the broadcast of the Program, including all
undercard bouts and the entire television broadcast, which took place on July 30, 2016. Id. at 1.
Since 2001, Plaintiff has been the exclusive domestic distributor for the world’s premier mixed
martial arts company, the Ultimate Fighting Championship®. Id. at 3. By contract, Plaintiff was
granted the exclusive right to license and distribute the Program to commercial establishments
throughout the United States. Id. Prior to the broadcast of the Program, Defendants chose not to
contract with Plaintiff nor pay a fee to Plaintiff to obtain the proper license or authorization. Id.
At no time did Plaintiff give Defendants license, permission, or authority to receive and exhibit
the Program in their Establishment. Id. By unauthorized satellite transmission or, alternatively,
by unauthorized receipt over a cable system, Defendants willfully intercepted or received the
interstate communication of the Program or assisted in such action. Id.

Defendants then

unlawfully transmitted, divulged, and published said communication, or assisted in unlawfully
transmitting, divulging and publishing said communication to patrons in the Establishment. Id.
At the time of the wrongful conduct, Defendants’ agents, servants and employees were acting
within the scope of their employment and authority. Id.
According to a sworn affidavit, Carolyn D. Harding, an auditor for Plaintiff, went to Mynt
Lounge & Bistro on July 30, 2016. ECF No. 10-5. Upon arriving, Harding paid a cover charge of
$10 to enter the Establishment. Id. Inside, she observed eight televisions, all of which eventually
displayed the Program. Id. She stated that the approximate capacity of the establishment was two
hundred and fifty people. Id. Harding avers that on three separate occasions that night she counted
eighty-five (85), one hundred and ten (110), and one hundred and twenty (120) patrons in the
Establishment, respectively. Id. In his sworn Affidavit in Support of Plaintiff’s Motion for Default

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Judgment, Plaintiff’s President, Joe Hand, Jr., stated that the commercial sublicense fee for a
commercial establishment with a maximum capacity of two hundred and twenty-six (226) to two
hundred and fifty (250) persons would have been $2,100. ECF No. 10-2. Plaintiff also noted that
the Establishment advertised the program on its Facebook page. ECF No.10-1 at 6.
DISCUSSION
A.

Liability
Under 47 U.S.C. § 605(a), “no person receiving . . . any interstate or foreign communication

by wire or radio shall divulge or publish the existence, contents, substance, purport, effect, or
meaning thereof, except through authorized channels of transmission or reception . . . to any person
other than the addressee, his agent, or attorney.” Any person aggrieved by such a violation may
bring a civil action to obtain an injunction and to recover damages, costs, and attorney fees. 47
U.S.C. § 605(e)(3). The aggrieved party may recover actual damages or statutory damages
between $1,000 and $10,000 for each violation. 47 U.S.C. § 605(e)(3)(C)(i). Furthermore, if the
court finds that “the violation was committed willfully and for purposes of direct or indirect
commercial advantage or private financial gain,” the court may increase the damages by an amount
not more than $100,000 for each violation. 47 U.S.C. § 605(e)(3)(C)(ii).
Under 47 U.S.C. § 553(a)(1), “[n]o 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). Any person aggrieved by such a violation may bring a civil action to obtain
an injunction and to recover damages, costs, and attorney fees. 47 U.S.C. § 553(c). The aggrieved
party may recover actual damages or statutory damages between $250 and $10,000 for all
violations involved in the action. 47 U.S.C. § 553(c)(3)(A). Furthermore, if the court finds that

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“the violation was committed willfully and for purposes of commercial advantage or private
financial gain,” the court may increase the damages by an amount not more than $50,000. 47
U.S.C. § 553(c)(3)(B).
The Seventh Circuit has held that § 605 and § 553 employ mutually exclusive categories,
specifically that a “communications service offered over a cable system” is not a “radio
communication.” United States v. Norris, 88 F.3d 462, 469 (7th Cir. 1996). In other words, a
person who steals cable services at the point of delivery is liable only under § 553, even if the
signals were transmitted by radio at some earlier point. On the other hand, the Second Circuit has
disagreed and held that some cable transmissions may also constitute “radio communications”
under § 605. International Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (2d Cir. 1996). The Fourth
Circuit has not considered the question. Consistent with other courts in the District of South
Carolina, this court finds that the reasoning of Norris is more persuasive. See Columbia Cable TV
Co., Inc. v. McCary, 954 F. Supp. 124, 128 (D.S.C. 1996).
As a result, Defendants are liable under § 605 only if they exhibited radio communications
without authorization and liable under § 553 only if they received cable communications without
authorization.

Plaintiff has alleged that the Program was received and exhibited without

authorization. ECF No. 10-1 at 5. However, Plaintiff notes that the Program could have been
received through various media, including radio, satellite, or cable. See ECF No. 1 at 3; ECF No.
10-2 at 3–4. Having been denied the benefit of discovery, Plaintiff requests to proceed under §
605. ECF No. 10-1 at 5. The court finds this to be a reasonable solution. The court finds that
Defendants violated 47 U.S.C. § 605 by exhibiting interstate radio communications without
authorization to customers at a commercial establishment. Furthermore, based on Plaintiff’s well-

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pleaded allegations, the court finds that the violation was committed willfully and for the purposes
of commercial advantage or financial gain.
B.

Damages
Plaintiff elects to recover statutory damages under 47 U.S.C. § 605(e)(3)(C)(i)(II). Plaintiff

seeks an award of $5,000. South Carolina district courts have often used an iteration of the license
fee to calculate appropriate damages. Joe Hand Promotions, Inc. v. Double Down Entm't, LLC,
No. 0:11-CV-02438-MBS, 2014 WL 994382, at *7 (D.S.C. Mar. 13, 2014) (citing Joe Hand
Promotions, Inc. v. Precint Bar-DAXLAM, Ltd., No. 3:10–CV–00199–CMC, 2010 WL 3420189,
at *3 (D.S.C. Aug.23, 2010) (determining that an award of $5,000 was appropriate, which equaled
five to six times the license fee of $875, as such award “is a sufficient deterrent”); Joe Hand
Promotions, Inc. v. Sheedy, No. 4:08-CV-1797-TLW-TER, 2011 WL 4089534, at *4 (D.S.C. July
29, 2011) (determining that an award of $5,000 was appropriate, which equaled approximately 5
times the license fee of $975)). As explained above, it would have cost $2,100 for Defendants to
purchase the rights to exhibit the Program at the Establishment. The court finds that an award
totaling approximately three times the applicable license fee effectively promotes deterrence in
this instance. Accordingly, the court finds that an award of $5,000 fairly approximates the actual
harm to Plaintiff resulting from Defendants’ unauthorized exhibition of the Program.
Plaintiff also seeks enhanced damages under 47 U.S.C. § 605(e)(3)(C)(ii) because
Defendants’ violation was committed willfully and for the purposes of commercial advantage or
financial gain. ECF No. 10-1 at 11. Plaintiff requests $25,000. Id. Plaintiff explains that their
primary source of revenue is the sublicense fee charged to authorized commercial establishments
for the right to broadcast closed circuit sports and entertainment programming, such as the
Program. ECF No. 10-1 at 8. Plaintiff argues that much of its revenue is lost due to unauthorized

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commercial exhibition of its programs because legitimate bars and restaurants cannot afford to
compete with “pirate” bars and restaurants. See ECF No. 10-2 at 4. Plaintiff further asserts that
authorized commercial establishments suffer financial loss from such illegal activities as well.
ECF 10-1 at 10; ECF No. 10 at 4. As a result, Plaintiff contends, authorized commercial
establishments are forced to either cease the legitimate purchase of programming from Plaintiff
and other such rights holders, or begin to pirate programs like Defendants. Id.
The court agrees that an enhanced award is necessary to deter the willful piracy of
Plaintiff’s programs. In light of the fact that the Defendants imposed a cover charge and advertised
the Program on social media, the court finds that enhanced damages in the amount of $25,000
provides just and adequate deterrence for such willful violations. Accordingly, the court awards
total damages in the amount of $30,000.
C.

Costs and Attorney Fees
The court “shall direct the recovery of full costs, including awarding reasonable attorneys’

fees to an aggrieved party who prevails.” 47 U.S.C. § 605(e)(3)(B)(iii). Because Plaintiff is an
aggrieved party that has prevailed, it is entitled to recover costs and attorney fees. Plaintiff
submitted an affidavit of its South Carolina counsel in support of its request for costs and attorney
fees. ECF No. 10-7. The court grants costs to Plaintiff in the amount of $450.00, including filing
fees and process service costs.
In this default matter, no one has appeared to challenge the attorney fees Plaintiff seeks.
Nonetheless, in determining what constitutes a reasonable number of hours and the appropriate
hourly rates, the court must consider the following factors: (1) the time and labor expended; (2)
the novelty and difficulty of the questions raised; (3) the skill required to properly perform the
legal services rendered; (4) the attorney’s opportunity costs in pressing the instant litigation; (5)

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the customary fee for like work; (6) the attorney’s expectations at the outset of the litigation; (7)
the time limitations imposed by the client or circumstances; (8) the amount in controversy and the
results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability
of the case within the legal community in which the suit arose; (11) the nature and length of the
professional relationship between attorney and client; and (12) attorney fees awarded in similar
cases. Barber v. Kimbrell’s, Inc., 577 F.2d 216, 226 (4th Cir. 1978). Although the court must
consider all twelve of the factors, the court is not required to rigidly apply these factors, as not all
may affect the fee in a given case. “[T]hese factors should be considered in determining the
reasonable rate and the reasonable hours, which are then multiplied to determine the lodestar figure
which will normally reflect a reasonable fee.” E.E.O.C. v. Servo News Co., 898 F.2d 958, 965 (4th
Cir. 1990). In determining whether a rate is reasonable, the court is to consider “prevailing market
rates in the relevant community.” Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th
Cir. 1994) (quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)).
The information Plaintiff provided, coupled with the court’s knowledge of rates in work of
this type in this district, supports attorney fees in the amount of $1,500. Based on the information
and supporting documents before the court at this time, the court concludes that the judgment
against Defendants should include an award of costs and attorney fees in the amount of $1,950
($450 costs plus $1,500 attorney fees).
CONCLUSION
Plaintiff’s Motion for Default Judgment is granted. The court finds that Defendants
willfully violated 47 U.S.C. § 605. Judgment in favor of Plaintiff is entered against Defendants,
jointly and severally, in the amount of $31,950 comprising $30,000 in damages and $1,950 in costs
and attorney fees.

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IT IS SO ORDERED.

s/ Margaret B. Seymour
The Honorable Margaret B. Seymour
Senior United States District Judge

Columbia, South Carolina
October 19, 2017

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