Joe Hand Promotions Inc v. Minchow

Filing 15

DEFAULT JUDGMENT that Defendants be found liable for willful violation of4 7 U.S.c. §605 and that a judgment in favor of Plaintiff be entered against Defendants,jointly and severally, in the amount of $28,000.00 in statutory and enhanced damages plus $3,521.19 in attorney's fees and costs. Thus, the total judgment is $31,521.19 (gpre, )

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\, UNITED STATES DISTRICT COURT DISTRICT OF SOUTH CAROLINA SPARTANBURG DIVISION Joe Hand Promotions, Inc., ) ) Plaintiff, CIA No.: 7:12-cv-00818-TMC ) ) -vs­ ) ) Michael Lee Minchow d/b/a Ground Zero, Defendant. ORDER FOR JUDGMENT BY DEFAULT ) ) ) ',. " I' Plaintiff, Joe Hand Promotions,II:i1c. ("Plaintiff'), which had exclusive, nationwide I commercial television l:distribution rights to Ultimate Fighting Championship 111: Georges St. i ,I " Pierre v. Dan Hardy, ("the Program!!), sued:Michael Lee Minchow d/b/a Ground Zero ("Defendant!!) for exhibiting the March 27,2010, commercial broadcast ofthe Program, which included under-card bouts and commentary, without paying therequirecl licensing fee to Plaintiff. Plaintiffs Complaint included causes of action brough! 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. Alihough Defendant was properly served with the Complaint, he has not answered or filed any responsive pleading. Pursuant to Plaintiffs request, the Clerk ofCourt entered - --~adefauliagain~t D~f~~d~t, a~d Plaintiffthi:m moved for a default judgment inda;~d ~fattorn;ys' fees and other costs. I. Introduction, Plaintiff filedthis action against Defendant on 'March 21 , 2012, seeking an award ofstatutory damages, enhanced damages, attorneys' fees and costs, as well as compensatory and pUnitive damages based on the ~nlicensed broadcast of the Program. 1 . ­ A. Jurisdiction and Venue The court has subject matter juris~iction over Plaintiffs Claims pursuant to 28 U. S. C. §§ 1331 and 1367. The court has personal jurisdiction over Defendant, and venue in this District is proper , pursuantto 28 U.S.CO § 1391 because Defendant is a South Carolina resident and who conducts, or conducted, business in this District, and because the alleged wrongful act~ occurred in this District. B. Process and Service On March 24, 2012, Plaintiffs private process server served Defendant personally. _~ Co _ _ _ ., """" _ .~_"...p_ __~ b _ 'j Grounds for Entry of Default Defendant did not timely file an answer or other pleading, as reflected by the Affidavit of Default and the Affidavit of Plaintiffs Counsel in Support ofRequest for Entry of Default filed on April 18, 2012. The Clerk of Court properly entered default as to pefendant on April 19, 2012. On May 8,2012, Plaintifffiled a Notice of Motion and Motion for Default Judgment, a copy of which it also served upon Defendant by mail on said date . Findings of Fact . II. Having reviewed Plaintiffs 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 Plaintiffs well-pleaded factual allegations as true and makes . . . . . . . . . . . . . . . . . ~L-,.. •• ~ ~ ____ ~ -~ .... _ _ _ ~-~ """"'_,,' ~ --~ , • "',; "'" /0- __ ~,, ____ ._~' ____ , .. the following factual findings. SeeDIREGTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.l·(4th Cir. 2009) (a~cepting plaintiffs allegations against defaulting defendant as true, noting a defaulting defendant "admits the plaintiffs well-pleaded allegations offact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.") (quotirigRyan v. Homecomings Fin. Network, 253'F.3D 778, 780 (4thCir. 2001)). Plaintiff is a Pennsylvania corporation with its principal place ofbusiness in Feasterville, 2 __ • Pennsylvania. Defendant is a South Carolina resident that does (or did) conduct business as Ground Zero at 3059 Howard Street, Spartan~urg, South Carolina 29303. Relevant to this litigation, Plaintiff paid for, and was granted the exclusive nationwide commercialtelevision distribution rights to the Program. Plaintiffcontracted 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. In. Analysis , Having found the facts set forth in Plaintiffs 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., 250 F.Supp.2d 610, 612 .n.3 (E.D. Va. 2003) (considering facts and evaluating Plaintiffs claims priorto 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 , __________ _ w_ .. ___ ',",,_' __.. _ _ _ _....... _ ........, ,,'>-.'._ statutory schemes .. _ • .., ~ ,~_. j~ .... '". • _ ~ ~ ~, pro~ide 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. The Plaintiffs election ofremedies also extends to its cause of action for conversion, which is also withdrawn provided that it prevails under 47 U.S.C. § 605. In electing to pursue damages pursuant to 47 U.S.C. § 605, Plaintiff has conceded the split in authorityas to the applicability ofthis section to pirated programming involving cable services--as 3 opposed to satellite services--at the delivery point, and it has submitted that, without the benefit of discovery or an admission by Defendant, 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 ofdamages is available in 47U.S.C. § 605 than in47 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 TVCo., 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 lawdaim'f()r- conversion. Upon its being required to elect between the two remedies, . -. . ~ - --- - -- --- the Plaintiff subsequently elected to pursue -"'" . ......--.~ . . _", damage~ ,.- ,. permitted under 47 U.S.C. § 605 .and not _.... to ,. ..... -. "'- pursue its conversion claim. As such, the 'remainder of this Order focuses only on Plaintiffs claim and damag~s 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 divulgence of interstate Tadio or wire communications. See 47 U.S.C. § 605(a). Specifically, it provides, in pertinent part, that: 4 "'---' -'­ · . . no person receIvmg, 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 Ground Zero. This affidavit provides evidence that the Program was displayed on 5 televisions at Ground Zero and provides details of the portion ofthe Program he watched. Plaintiff having established that Defendant violated 47 U.S.C. § 605(a), the court finds and concludes that judgment should be entered in Plaintiffs favor against Defendant. C. Damages under 47 U.RC. § 605 The available penalties and remedies for violation of47 U.S.C. § 605(a) include a private civil action, as follows: (8) 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; Sii).may award damages as described,in subparagraph (C); and 'f".-~-"'- 11 " . , (iii) s~all direct the recovery of full costs, including awarding reasonable attorneys' fees to an aggrieved party who prevails~ . 47 U.S.C. § 605(e)(3)(8). Plaintiff seeks damages,attorneys' fees and costs. 1. Statutory Damages under 47 U.S.C. § 605 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 5 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 (U) th~, party aggrieved may recover an< .award"of statutory'damages for each violation ofsubsection (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 ofparagraph (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 will£ully 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)(Ci Plaintiff has elected to recover statutory damages available under 47 U.S.c. § ~. -"..- ".-, r - _., ..... : 605(e)(3)(C)(i)(U), 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 abl~ to conduct discovery concerning, among other things, Defendants' profits from the broadcast ofthe Program. Plaintiff seeks $10,000.00 in statutory damages, which is the maximum available pursuant to 47 U.S.c. § 605(e)(3)(C)(i)(U), and it argues for the maximum recoverable statutory damages to compensate Plaintiff for its damages and for the 6 deterrent effect it may have in minimizing such future conduct. According to the private investigator's affidavit, Ground Zero has the capacity for approximately 500 people, find there were 110 patrons present during the Program. According to Plaintiffs Affidavit in Support of Motion for Default Judgment, the licensing fee for Defendants to have legally shown the Program would have been $3,500.00 (rate card showing "cost of licensing as $3,500.00 for establishments with capacity from 451 to 500). The court may award statutory damages between $1 ,000 to $10,000 in an amount "the court 1 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 ofpatrons 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$7,000.00 should be granted. Under the facts and circumstan~es here, the court concludes that an award oftwice the license fee Defendants should have paid to legally broadcast the Program, 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 Defendants willfully violated 47U.S.C. § 605(a) for financial gain and seeks enhanced damages of $100,000, asserting that Defendant intentionally intercepted and showed the Program.for financial gain or commercial advantage. and that Defendant directly or indirectly committed wrongful acts and cannot hide behind a corporate shield. The statute permits 7 the cqurt, iJiits discretio;", to increase damages by up to $100;000 per 'fiotation when the violation is '"cOlnmitted 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 Defendant's intentional acts, Plaintiff, by the Plaintiffs Affidavit in Support of Plaintiffs Motion for Default Judgment, asserted that the Program could not have been "mistakenly, innocently or accidentally· intercepted.".··· Although the court finds that Defendant's violations were intentional and willful and agrees .. ""( . . . . ..... ,'" " .. ' '. . that more than n?minaldamages should be awarded to deter future violations, the court does not ~. ~ ~ '.,,. approve the maximum of statutory enhanced damages, and it concludes that e~anced damages in the (;J.mountof$21,000.OO (in addition to the $7,000.00 award discussed~boveandthe awarq of attorneys; fees and costs discussed below) should be granted. Th\ls, thestatut~ry and enhanced damages pursuantto 47 U.S.C.§ 605(e)(3)(C) should be awarded in the aggregate amount 0[$28,000.00 ($7,000.00 plus $21,000.00). IV; Attorneys' Fees and Costs'under 47 U.S.c. § 605 The Communications Act requires that the court award "full c~sts, 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. Requ~st, for Costs ~---- ~""- 1i ; Prior to the m~tion he~ing, Plaintiff submitted affidavits ofits South C~rolinacounsel . ' . " , and its California cOunsel in support of its request for costs. The court gnints'to Plaintiff costs .. . . . in the amount of $1,074.94 (filing fee, investigative services and process service costs). 2. Req~est for Attorneys' Fees . The "ful1costs" ' to be awarded to a prevailing party pursuant to 47 U.S.C. § 605(e) 8 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 (Le., in calculating the lodestar fee), the court· must consider the following "factors: (1) the time an~ 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 exp.ectations 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 ofthe attorney; (10) the undesirability of the case within the legal community in which the suit arose; (l1}thenature and length of the professional relationship between attorney and client; and (12) attorney~' fees awarded in similar cases. Barber v. Kimbrell's, Tnc., 577 F.2d 216,226 (4thCir. '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. U[T]hese factors should be considered in determining the reasonable rate and the reasonable hours, which. are then mul,tiplied to determine the lodestar figure which will normally reflect a reasonable fee. II E. E. 0. 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)(quotingBlum v. Stenson, 465 U.S. 886, 895 (1984)). Further, this court's Local Rule 54.02(A) provides that attorneys' fee 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.). 9 The information Plaintiff provided, coupled with the court's knowledge ofrates in work of this type in this District, supports an attorneys' fee in the amount of $1,74625. Based on the . ' , . information and supporting documents before the court at this time, the court concludes that the judgment against Deferidants should include an award 'ofcosts and attorneys' fees in the amount of $3.,521.19 ($1,074.94 costs plus $2,446.25 attorneys' fees). WHEREFORE, it is ORDERED that Defendants be found liable for willful violation of4 7 U.S.c. § 605 and that ajudgment in favor ofPlaintiff be entered against Defendants,jointly and severally, in the amount of$28,000.00 in statutory and enhanced damages plus $3,521.19 in attorney's fees and costs. Thus, the total judgment is $31,521.19 .. IT IS SO ORDERED. Anderson, South Carolina July 6 ,2012 s/Timothy M. Cain Timothy M. Cain Judge United States District Court --...,..-----~ 10

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