J&J Sports Productions Inc v. El Molcajete Inc et al

Filing 17

ORDER FOR JUDGMENT BY DEFAULT that Defendants be found liable for willful violation of 47 U.S.C. § 605 and that a judgment in favor of Plaintiff be entered against Defendants, El Molcajete, Inc. d/b/a El Molcajete Mexican Restaurant and Miguel G. Garcia, jointly and severally, in the amount of $21,000.00 in statutory and enhanced damages plus $3,436.28 in attorney's fees and costs. Total judgment is $24,436.28.IT IS SO ORDERED. Signed by Honorable Timothy M Cain on 1/18/12. (gpre, )

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION
J & J Sports Productions, Inc.,

)
)
Plaintiff,
)
)
-vs)
)
El Molcajete, Inc. d/b/a El Molcajete Mexican )
Restaurant and Miguel G. Garcia,
)
)
Defendants.
)
_____________________________________ )

C/A No.: 7:11-cv-2435-TMC
ORDER FOR JUDGMENT
BY DEFAULT

Plaintiff, J & J Sports Productions, Inc. ("Plaintiff"), which had exclusive, nationwide
commercial television distribution rights to “Number One”: Floyd Mayweather, Jr. v. Juan Manuel
Marquez Championship Fight Program, ("the Program"), sued El Molcajete, Inc. d/b/a El Molcajete
Mexican Restaurant ("El Molcajete"), and its principal, Miguel G. Garcia ("Garcia") (collectively
"Defendants") for exhibiting the September 19, 2009, commercial broadcast of the Program, which
included under-card bouts and commentary, without paying the required licensing fee to Plaintiff.
Plaintiff's Complaint included causes of action brought pursuant to 47 U.S.C. § 605
("Communications Act") and 47 U.S.C. § 553 ("Cable & Television Consumer Protection and
Competition Act"), as well as a state law claim for conversion. Although Defendants were properly
served with the Complaint, they have not answered or filed any responsive pleading. Pursuant to
Plaintiff's request, the Clerk of Court entered a default against Defendants, and Plaintiff then moved
for a default judgment and award of attorneys' fees and other costs.
I.

Introduction
Plaintiff filed this action against Defendants on September 12, 2011, seeking an award of

statutory damages, enhanced damages, attorneys' fees and costs, as well as compensatory and
1

punitive damages based on the unlicensed broadcast of the Program.
A.

Jurisdiction and Venue

The court has subject matter jurisdiction over Plaintiff's claims pursuant to 28 U.S.C. §§ 1331
and 1367. The court has personal jurisdiction over Defendants, and venue in this District is proper
pursuant to 28 U.S.C. § 1391 because Garcia is a South Carolina resident and El Molcajete is a
South Carolina corporation, which conducts, or conducted, business in this District, and because the
alleged wrongful acts occurred in this District.
B.

Process and Service

On September 12, 2011, Plaintiff's private process server served El Molcajete, by personally
serving Plaintiff's registered agent, and served Garcia personally.
C.

Grounds for Entry of Default

Neither El Molcajete nor Garcia timely filed an answer or other pleading, as reflected by the
Affidavit of Default and the Affidavit of Plaintiff's Counsel in Support of Request for Entry of
Default filed on October 12, 2011. The Clerk of Court properly entered default as to Defendants on
October 12, 2011. On October 24, 2011, Plaintiff filed a Notice of Motion and Motion for Default
Judgment, a copy of which it also served upon Defendants by mail on said date.
II.

Findings of Fact
Having reviewed Plaintiff's Complaint, Answers to Local Rule 26.01 Interrogatories, Request

for Entry of Default, Motion for Default Judgment, as well as all supporting and supplemental
information provided, the court accepts Plaintiff's well-pleaded factual allegations as true and makes
the following factual findings. See DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.1 (4th Cir. 2009)
(accepting plaintiff's allegations against defaulting defendant as true, noting a defaulting defendant
"admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment,
2

and is barred from contesting on appeal the facts thus established.") (quoting Ryan v. Homecomings
Fin. Network, 253 F.3D 778, 780 (4th Cir. 2001)).
Plaintiff is a California corporation with its principal place of business in Campbell,
California. El Molcajete is a South Carolina corporation that does (or did) conduct business as El
Molcajete Mexican Restaurant at 1212 East Main Street, Duncan, South Carolina. Garcia resides in
Duncan, South Carolina.
Relevant to this litigation, Plaintiff paid for, and was granted the exclusive nationwide
commercial television distribution rights to the Program. Plaintiff contracted with and granted certain
businesses the rights to exhibit publicly the Program to its customers within their commercial
establishments. Plaintiff expended substantial money in marketing, advertising, administering and
transmitting the Program to such businesses.
III.

Analysis
Having found the facts set forth in Plaintiff's Complaint as deemed admitted by default, the

court must ensure the Complaint sets forth a proper claim before entering default judgment. See
GlobalSanta Fe Corp. v. Globalsantafe.com, 250 F.Supp.2d 610, 612 n.3 (E.D. Va. 2003)
(considering facts and evaluating Plaintiff's claims prior to entry of default judgment in copyright
action). The court considers whether Plaintiff has set forth claims for which relief can be granted
pursuant to the standard of Fed.R.Civ.P. 12(b)(6).
A.

Election of Remedies

In its Motion for Default Judgment and accompanying Memorandum, Plaintiff submits that
it has established liability pursuant to 47 U.S.C. § 605 and 47 U.S.C. § 553; and because the two
statutory schemes provide relief for the alternate means by which the Program might have been
received (satellite or cable), Plaintiff has elected to proceed under 47 U.S.C. § 605.
3

In electing to pursue damages pursuant to 47 U.S.C. § 605, Plaintiff has conceded the split
in authority as to the applicability of this section to pirated programming involving cable services--as
opposed to satellite services--at the delivery point, and it has submitted that, without the benefit of
discovery or an admission by Defendants, it is impossible to determine whether the Program was
broadcast by cable or satellite signal. The court recognizes that 47 U.S.C. § 605 would be
inapplicable if the delivery were by cable; however, given the default, Plaintiff cannot conduct
discovery to determine the mode of transmission.
A higher range of damages is available in 47 U.S.C. § 605 than in 47 U.S.C. § 553. Statutory
damages under 47 U.S.C. § 605 range from $1,000 to $10,000 for each violation with a $100,000
maximum enhancement for willfulness, while statutory damages under 47 U.S.C. § 553 range from
$250 to $10,000 for all violations with a $50,000 maximum enhancement for willfulness. 47 U.S.C.
§§ 605(e)(3)(C)(i)(II) and 605(e)(3)(C)(ii); 47 U.S.C. §§ 553(c)(3)(A)(ii) and 553(c)(3)(B). In
any event, in light of the damages awarded herein, the distinction is without a difference in this case.
See Columbia Cable TV Co., Inc. v. McCrary, 954 F.Supp. 124, 128 (D.S.C. 1996) (noting that, even
if 47 U.S.C. § 605 were applicable to cable theft, under facts of case, court would award damages
"as close as permissible to the amount awarded under § 553").
In its Motion for Default Judgment, Plaintiff seeks damages under both 47 U.S.C. § 605 and
its common law claim for conversion. Upon its being required to elect between the two remedies,
the Plaintiff subsequently elected to pursue damages permitted under 47 U.S.C. § 605 and not to
pursue its conversion claim. As such, the remainder of this Order focuses only on Plaintiff's claim
and damages pursued under 47 U.S.C. § 605.
B.

Liability under 47 U.S.C. § 605

The Communications Act prohibits the unauthorized reception, interception, publication, or
4

divulgence of interstate radio or wire communications. See 47 U.S.C. § 605(a). Specifically, it
provides, in pertinent part, that:
. . . no person receiving, assisting in receiving, transmitting, or assisting in
transmitting, 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, (1) to any person
other than the addressee, his agent or attorney. . . .
47 U.S.C. § 605(a). In short, Plaintiff must demonstrate that Defendants intercepted the Program's
signals and "divulged" or aired it to commercial patrons.
Plaintiff submitted proof, through an affidavit of a private investigator, who viewed the
Program at El Molcajete. This affidavit provides evidence that the Program was displayed on 3
televisions at El Molcajete and provides details of the portion of the Program he watched. Plaintiff
having established that Defendants violated 47 U.S.C. § 605(a), the court finds and concludes that
judgment should be entered in Plaintiff's favor against Defendants.
C.

Damages under 47 U.S.C. § 605

The available penalties and remedies for violation of 47 U.S.C. § 605(a) include a private
civil action, as follows:
(B) The court-(i) may grant temporary and final injunctions on such terms as it may
deem reasonable to prevent or restrain violations of subsection (a) of
this section;
(ii) may award damages as described in subparagraph (C); and
(iii) 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). Plaintiff seeks damages, attorneys' fees and costs.
1.

Statutory Damages under 47 U.S.C. § 605

5

The statute sets out the following available damages:
(C)(i) Damages awarded by any court under this section shall be
computed, at the election of the aggrieved party, in accordance with
either of the following subclauses:
(I) the party aggrieved may recover the actual damages
suffered by him as a result of the violation and any
profits of the violator that are attributable to the
violation which are not taken into account in computing
the actual damages; in determining the violator's profits,
the party aggrieved shall be required to prove only the
violator's gross revenue, and the violator shall be
required to prove his deductible expenses and the
elements of profit attributable to factors other than the
violation; or
(II) the party aggrieved may recover an award of
statutory damages for each violation of subsection (a) of
this section involved in the action in a sum of not less
than $1,000 or more than $10,000, as the court
considers just, and for each violation of paragraph (4) of
this subsection involved in the action an aggrieved party
may recover statutory damages in a sum not less than
$10,000, or more than $100,000, as the court considers
just.
(ii) In any case in which the court finds that the violation was
committed willfully and for purposes of direct or indirect
commercial advantage or private financial gain, the court in its
discretion may increase the award of damages, whether actual or
statutory, by an amount of not more than $100,000 for each
violation of subsection (a) of this section. . . .
47 U.S.C. § 605(e)(3)(C).
Plaintiff has elected to recover statutory damages available under 47 U.S.C. §
605(e)(3)(C)(i)(II), rather than actual damages available under 47 U.S.C. § 605(e)(3)(C)(i)(I). As
Plaintiff points out, statutory damages are difficult to prove. Because of Defendants' default,
Plaintiff has not been able to conduct discovery concerning, among other things, the Defendants'
profits from the broadcast of the Program. Plaintiff seeks $10,000.00 in statutory damages, which
6

is the maximum available pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II), and it argues for the
maximum recoverable statutory damages to compensate Plaintiff for its damages and for the
deterrent effect it may have in minimizing such future conduct.
According to the private investigator's affidavit, El Molcajete has the capacity for
approximately 60 people, and there were 29 patrons present during the Program. According to
Plaintiff's Affidavit in Support of Motion for Default Judgment, the licensing fee for Defendants
to have legally shown the Program would have been $2,200.00 (rate card showing cost of
licensing as $2,200.00 for establishments with capacity from 0 to 100).
The court may award statutory damages between $1,000 to $10,000 in an amount "the court
considers just." 47 U.S.C. § 605(e)(3)(C)(i)(II). Nationwide, courts have used various methods
of determining an appropriate amount of statutory damages. Some courts fashion an award by
considering the number of patrons who viewed the programming, often multiplying that number
by the cost of the residential fee for watching such programming. Some courts base the statutory
damages amount on an iteration of the licensing fee the violating establishment should have paid
the plaintiff. Other courts award a flat amount for a violation. The Fourth Circuit has not
addressed any of these methods.
The court concludes that statutory damages in the amount of $6,000.00 should be granted.
Under the facts and circumstances here, the court concludes that a flat fee award of $6,000.00,
when combined with enhanced damages and attorneys' fees, discussed below, is a fair reflection
of actual damages.
2.

Enhancement of Statutory Damages under 47 U.S.C. § 605

Plaintiff claims that the Defendants willfully violated 47 U.S.C. § 605(a) for financial gain
and seeks enhanced damages of $100,000, asserting that El Molcajete and Garcia intentionally
7

intercepted and showed the Program for financial gain or commercial advantage and that Garcia
directly or indirectly committed wrongful acts and cannot hide behind a corporate shield. The
statute permits the court, in its discretion, to increase damages by up to $100,000 per violation
when the violation is "committed willfully and for purposes of direct or indirect commercial
advantage or private financial gain[.]" 47 U.S.C. § 605(e)(3)(C)(ii). In addition to Plaintiff's
pleadings regarding Defendants' intentional acts, Plaintiff, by the Plaintiff's Affidavit in Support
of Plaintiff's Motion for Default Judgment, asserted that the Program could not have been
"mistakenly, innocently or accidentally intercepted."
Although the court finds that Defendants' violations were intentional and willful and agrees
that more than nominal damages should be awarded to deter future violations, the court does not
approve the maximum of statutory enhanced damages, and it concludes that enhanced damages
in the amount of $15,000.00 (in addition to the $6,000.00 award discussed above and the award
of attorneys' fees and costs discussed below) should be granted.
Thus, the statutory and enhanced damages pursuant to 47 U.S.C. § 605(e)(3)(C) should be
awarded in the aggregate amount of $21,000.00 ($6,000.00 plus $15,000.00).
IV.

Attorneys' Fees and Costs under 47 U.S.C. § 605
The Communications Act requires that the court award "full costs, including reasonable

attorneys' fees to an aggrieved party who prevails." 47 U.S.C. § 605(e)(3)(B)(iii). As the rightful
owner of the Program broadcast rights, Plaintiff is an aggrieved party which has prevailed.
1.

Request for Costs

Prior to the motion hearing, Plaintiff submitted affidavits of its South Carolina counsel
and its California counsel in support of its request for costs. The court grants to Plaintiff costs
in the amount of $911.28 (filing fee, investigative services and process service costs).
8

2.

Request for Attorneys' Fees

The "full costs" to be awarded to a prevailing party pursuant to 47 U.S.C. § 605(e)
includes "reasonable attorneys' fees." In support of its request for attorneys' fees, Plaintiff
submitted the Declarations of its South Carolina counsel and its California counsel.
In this default matter, no one has appeared to challenge the attorneys' fees Plaintiff seeks.
Nonetheless, in determining what constitutes a reasonable number of hours and the appropriate
hourly rates (i.e., in calculating the lodestar fee), 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) 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)
attorneys' 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)). Further, this court's Local Rule 54.02(A) provides that attorneys' fee
9

petitions must comply with Barber "and shall state any exceptional circumstances and the ability
of the party to pay the fee." Local Rule 54.02(A) (D.S.C.).
The information Plaintiff provided, coupled with the court's knowledge of rates in work of
this type in this District, supports an attorneys' fee in the amount of $2,525.00. 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 attorneys' fees in the amount of
$3,436.28 ($911.28 costs plus $2,525.00 attorneys' fees).
WHEREFORE, it is
ORDERED that Defendants be found liable for willful violation of 47 U.S.C. § 605 and that
a judgment in favor of Plaintiff be entered against Defendants, El Molcajete, Inc. d/b/a El Molcajete
Mexican Restaurant and Miguel G. Garcia, jointly and severally, in the amount of $21,000.00 in
statutory and enhanced damages plus $3,436.28 in attorney's fees and costs. Thus, the total
judgment is $24,436.28.
IT IS SO ORDERED.

s/Timothy M. Cain
Timothy M. Cain
Judge, United States District Court
January 18, 2012
Greenville, SC

10