Joe Hand Promotions, Inc. v. Krazy Chicken International, LLC et al (TV2)

Filing 23

MEMORANDUM OPINION: the Court finds plaintiff is entitled to a default judgment as to its § 605 claim against defendants. Accordingly, plaintiff's motion [Doc. 19] will be GRANTED. The Court will ORDER that plaintiff recov er from defendants a total sum of $9,127 and post-judgment interest according to law from the date of the contemporaneously-filed judgment order until the amount is paid in full as detailed herein. The Clerk of Court will be DIRECTED to CLOSE t his case. A separate order will enter. Signed by District Judge Thomas A Varlan on July 29, 2022. (copy mailed to Ms. Alice Cupp a/k/a Alice Minnick, Mr. Jeremy Chance Minnick, and to Krazy Chicken International, LLC, c/o Alice Cupp, 2301 Fort Henry Drive, Kingsport, Tennessee 37664) (AYB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
JOE HAND PROMOTIONS, INC.,

)
)
Plaintiff,
)
)
v.
)
)
KRAZY CHICKEN
)
INTERNATIONAL LLC d/b/a
)
KRAZY CHICKEN INTERNATIONAL, )
ALICE CUPP a/k/a ALICE MINNICK, and )
JEREMY CHANCE MINNICK,
)
)
Defendants.
)

No.:

3:22-CV-59-TAV-DCP

MEMORANDUM OPINION
This civil action is before the Court on plaintiff’s Motion for Default Judgment
[Doc. 19]. Plaintiff seeks to hold defendants liable for a violation of the Communications
Act of 1934 (the “Act”). For the reasons stated infra, plaintiff’s motion [Doc. 19] will be
GRANTED.
I.

Background
The Court takes as true the factual allegations in the complaint. Bogard v. Nat’l

Credit Consultants, No. 1:12-CV-2509, 2013 WL 2209154, at *3 (N.D. Ohio May 20,
2013). Plaintiff distributes and licenses broadcasts of sporting events to commercial
establishments [Doc. 1 ¶ 8]. At all relevant times, Alice Cupp and Jeremy Chance Minnick
were “officer[s], director[s], shareholder[s], member[s] and/or principal[s] of” and “had a
right and ability to supervise” and “an obvious and direct financial interest in the activities
of” Krazy Chicken International, LLC (the “Establishment”) [Id. ¶¶ 2–4].

Plaintiff had the exclusive right to distribute to commercial establishments
broadcasts of “Deontay Wilder v. Tyson Fury II” (the “Fight”) [Id. ¶¶ 1, 9]. Accordingly,
defendants could have legally broadcasted the Fight at the Establishment only by
contracting with plaintiff and paying plaintiff’s licensing fee of $1,450 [Id. ¶¶ 9, 11;
Doc. 20-2]. However, rather than paying the licensing fee, defendants and/or their agents
obtained the Fight and displayed it to their patrons by interfering with cable and satellite
signals [Doc. 1 ¶¶ 12–13, 15]. To verify these actions, plaintiff’s auditor visited the
Establishment on the night of the Fight and observed that: (1) the Establishment
broadcasted the Fight on a 65-inch television screen; (2) approximately 30 patrons were
present; and (3) the Establishment served food and drinks [Doc. 20-3 p. 1].
Defendants allegedly intercepted the Fight “willfully and with the purpose and
intent to secure a commercial advantage and private financial gain” [Doc. 1 ¶ 14]. Plaintiff
avers defendants’ actions caused plaintiff to suffer financial harm via a lost licensing fee,
incalculable lost profits, diminished goodwill, and other financial harm, and plaintiff
provides evidence in support of its losses [Doc. 20 pp. 6–11; Docs. 20-2, 20-3, 21, 22].
Plaintiff also provides news articles and screenshots from Facebook to demonstrate the
individual defendants’ ownership of the Establishment and that the Establishment
advertised that it would broadcast the Fight [Docs. 21-1, 21-2, 21-3, 21-4, 21-5].
On February 15, 2022, plaintiff filed its complaint against defendants asserting
claims under the Act [Doc. 1]. On May 9, 2022, plaintiff applied to the Clerk of Court for
an entry of default as to defendants because they failed to respond or otherwise defend in
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this action [Docs. 12, 13, 14, 15], and the Clerk entered default on May 31, 2022 [Docs. 16,
17, 18]. Plaintiff now seeks a default judgment against defendants [Doc. 19].
II.

Analysis
Federal Rule of Civil Procedure 55 “contemplates a two-step process for obtaining

a default judgment against a defendant who has failed to plead or otherwise defend.”
Banner Life Ins. Co. v. Columbia State Bank, No. 3:19-CV-119-TAV-HBG, 2020 WL
3977635, at *1 (E.D. Tenn. July 14, 2020). “First, pursuant to Rule 55(a), a plaintiff must
request from the Clerk of Court an entry of default, describing the particulars of the
defendant’s failure to plead or otherwise defend.” Id. If the clerk enters default, “the
plaintiff must then move the Court for entry of default judgment pursuant to Rule 55(b).”
Id.
After the clerk has entered default, the court must take the complaint’s factual
allegations as true. Bogard, 2013 WL 2209154, at *3. However, the court must determine
whether the factual allegations “are sufficient to state a claim for relief as to [the] cause of
action for which the plaintiff seeks default judgment.” J & J Sports Prods., Inc. v.
Rodriguez, No. 1:08-CV-1350, 2008 WL 5083149, at *1 (N.D. Ohio Nov. 25, 2008)
(citation omitted). Although the court takes factual allegations regarding liability as true,
the plaintiff must prove the amount of damages. Bogard, 2013 WL 2209154, at *3.
A.

Sufficiency of the Complaint

Plaintiff alleges defendants are liable under §§ 553 and 605 of the Act [Doc. 1
¶¶ 16–19]. However, when a defendant is liable under both of these sections, the plaintiff
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may elect to recover only under either section. See J & J Sports Prods., Inc. v. Burgess,
No. 3:15-CV-721-JHM, 2017 WL 1788686, at *2 (W.D. Ky. Apr. 10, 2017) (stating that
the majority of courts permit recovery under § 605 because it “allows for greater
recovery”). Here, plaintiff elects to recover under § 605 [Doc. 20 p. 5]. Thus, the Court
need only consider whether the complaint sufficiently alleges a § 605 claim.
Section 605(a) provides, “[n]o person not being authorized by the sender shall
intercept any radio communication and divulge or publish the existence, contents,
substance, purport, effect, or meaning of such intercepted communication to any
person. . . .”

47 U.S.C. § 605(a).

This “provision applies to encrypted satellite

transmissions.” Joe Hand Promotions, Inc. v. Rizzi, No. 12-2526, 2013 WL 6243824, at
*3 (W.D. Tenn. Dec. 3, 2013) (citation omitted). The Sixth Circuit courts apply a three-part
test to determine whether a defendant has violated § 605(a); namely, courts consider
whether: “(1) the plaintiff had a propriety interest in the communication; (2) the defendant
intercepted that communication; and (3) the defendant unlawfully divulged the
communication to its patrons.” Joe Hand Promotions, Inc. v. Turner, No. 3:19-CV-12,
2021 WL 1383267, at *3 (S.D. Ohio Apr. 13, 2021) (citing Nat’l Satellite Sports, Inc. v.
Eliadis, Inc., 253 F.3d 900, 914–17 (6th Cir. 2001)). Section 605 provides for strict
liability; therefore, a plaintiff need not prove a defendant’s intent to violate the statute.
J & J Sports Prods., Inc. v. Sutton, No. 3:17-CV-264-TBR, 2018 WL 297597, at *2 (W.D.
Ky. Jan. 4, 2018) (citation omitted).

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The Court finds that the complaint sufficiently alleges defendants violated § 605(a).
First, plaintiff alleges it had a propriety interest in the Fight as it alleges it had “the
exclusive right to license and distribute” it to commercial establishments and that plaintiff
distributed it to licensees only after receiving a licensing fee [Doc. 1 ¶¶ 9–10]. Second,
plaintiff alleges that defendants illegally obtained the Fight by “unauthorized satellite
transmission or, alternatively, by unauthorized receipt over a cable system [where
defendants] willfully intercepted or received . . . communications of the” Fight [Id. ¶ 12].
Finally, the complaint alleges defendants unlawfully divulged the Fight as it alleges they
“transmitted, divulged and published” it to their patrons for commercial purposes without
contracting with plaintiff, paying the licensing fee, or otherwise having authority to receive
or broadcast it [Id. ¶¶ 11–14]. Thus, the complaint sufficiently alleges a § 605(a) violation.
See Turner, 2021 WL 1383267, at *3 (applying this three-part test and finding § 605
liability in a similar case); Joe Hand Promotions, Inc. v. Dewberry, No. 19-CV-12218,
2020 WL 2764604, at *3 (E.D. Mich. May 28, 2020) (same).
Furthermore, even if the individual defendants had not personally intercepted the
Fight, the complaint adequately alleges their vicarious liability. “To establish vicarious
liability for a violation of § 605(a) . . . a plaintiff must show that the defendant had ‘a right
and ability to supervise the violations, and that she had a strong financial interest in such
activities.’” Rizzi, 2013 WL 6243824, at *5 (citation omitted). Here, plaintiff alleges that
the individual defendants owned, were “officer[s], director[s], shareholder[s], member[s]
and/or principal[s] of” and “had a right and ability to supervise” and “an obvious and direct
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financial interest in the activities of the Establishment” [Doc. 1 ¶¶ 3–4]. Moreover, plaintiff
alleges the individual defendants or their agents intercepted the Fight for commercial
purposes [Id. ¶¶ 14–15]. See Dewberry, 2020 WL 2764604, at *3 (holding that because of
the defendant owner’s default, he admitted that he had the right and ability to supervise
and a financial interest in the violation); Rizzi, 2013 WL 6243824, at *5 (holding the
defendant owner vicariously liable when he owned the premises and therefore per se had
the “right and ability to supervise the violations and the requisite financial interest” even
though he was not present during the violation). Consequently, the Court finds that the
complaint sufficiently alleges that defendants violated § 605. Therefore, the Court will
turn to the proper remedy.
B.

Damages, Attorneys’ Fees, and Costs

Plaintiff seeks statutory and enhanced damages, attorneys’ fees, and costs.
Although the Court must take as true the factual allegations regarding liability in the
complaint, plaintiff must prove the appropriate amount of damages. Bogard, 2013 WL
2209154, at *3. In determining damages, “[t]he Court may rely on affidavits [and other
materials] . . . without the need for a hearing.” Dirs. of the Ohio Conf. of Plasterers &
Cement Masons Combined Funds, Inc. v. Akron Insulation & Supply, Inc.,
No. 5:16-CV-1674, 2018 WL 2129613, at *5 (N.D. Ohio May 8, 2018).
1.

Statutory Damages

Plaintiff seeks $2,000 in statutory damages under § 605(e)(3)(C)(i)(II) [Doc. 20
pp. 6–8]. Section 605(e)(3)(C)(i)(II) provides, “the party aggrieved may recover an award
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of statutory damages for [a § 605(a) violation] in a sum of not less than $1,000 or more
than $10,000, as the court considers just . . . .” 47 U.S.C. § 605(e)(3)(C)(i)(II). In
calculating damages, the Sixth Circuit courts “typically consider the price the defendant(s)
would have had to have paid to obtain the right to receive and display a broadcast, as well
as the plaintiff’s cost to police its broadcasting rights in the area.” Dewberry, 2020 WL
2764604, at *3 (collecting cases). These courts also consider other factors, “including the
number of patrons at the time of the violation, the seating capacity of the establishment,
the rate charged by the plaintiff for the broadcast, [and] whether the defendant charged a
cover to patrons or was likely to have obtained significant profits in another manner.” Joe
Hand Promotions, Inc. v. Truong, No. 3:19-CV-701, 2020 WL 7014303, at *4 (M.D. Tenn.
May 20, 2020) (citation omitted).
The Court finds that $2,000 is a reasonable and just award of statutory damages.
Plaintiff substantiates that if defendants had legally licensed the Fight, they would have
had to have paid plaintiff a $1,450 fee “to obtain the right to receive and display” the Fight
[Doc. 20-2; Doc. 22 ¶ 7]. See Dewberry, 2020 WL 2764604, at *3. Moreover, the Court
considers that plaintiff’s actual losses are likely substantially greater than this amount. For
example, plaintiff has suffered lost profits in an incalculable sum due to lost fees from
commercial establishments that choose not to license broadcasts because they cannot
compete with pirates [Doc. 22 ¶¶ 4, 18–19]. Additionally, plaintiff substantiates that it has
suffered harm to its reputation and goodwill [Id.]. Finally, the Court notes that courts have
issued similar awards in similar cases. See, e.g., Truong, 2020 WL 7014303, at *4–5
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(collecting cases). Therefore, the Court finds $2,000 is an appropriate statutory damages
award.
2.

Enhanced Damages

Plaintiff seeks $10,000 in enhanced damages under § 605(e)(3)(C)(ii) [Doc. 20
pp. 8–11]. Section 605(e)(3)(C)(ii) provides a court with discretion to provide enhanced
damages in an amount up to $100,000 when the violation was “willful[] and for purposes
of direct or indirect commercial advantage or private financial gain.”

47 U.S.C.

§ 605(e)(3)(C)(ii).
The Court first finds that defendants’ conduct was willful. Conduct is “willful”
when it demonstrates “disregard for the governing statute and an indifference for its
requirements.” Dewberry, 2020 WL 2764604, at *5 (citation omitted). By virtue of
default, defendants have admitted their violation was willful [See Doc. 1 ¶¶ 12, 14]. See
Joe Hand Promotions, Inc. v. M & J Ballpark Inc., No. 15-CV-14484, 2016 WL 4750087,
at *3 (E.D. Mich. Sept. 13, 2016) (citation omitted). Moreover, in this type of case, the
Court can imply defendants’ willfulness because “[s]ignals do not descramble
spontaneously, nor do television sets connect themselves to cable distribution systems.”
See J & J Sports Prods., Inc. v. Ramirez, No. 3:16-CV-142-DJH, 2017 WL 4570310, at *3
(W.D. Ky. Apr. 10, 2017) (citation omitted). Additionally, the fact that defendants
advertised that they would broadcast the Fight on Facebook suggests their violation was
willful. See J & J Sports Prods., Inc. v. SJV Invs., No. 16-CV-12271, 2017 WL 218079,
at *3 (E.D. Mich. Jan. 19, 2017).
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The Court further finds that defendants’ actions were for a commercial advantage
and/or private financial gain.

Defendants have admitted their violation was for a

commercial advantage and private financial gain by virtue of default [Doc. 1 ¶ 14]. See
M & J Ballpark Inc., 2016 WL 4750087, at *3 (citation omitted). Furthermore, the
evidence demonstrates defendants’ actions were in fact for a commercial advantage and
private financial gain as they advertised that the Establishment would broadcast the Fight
on Facebook and exhibited the Fight on a 65-inch television screen when 30 patrons were
present. See Joe Hand Promotions, Inc. v. Sports Page Bar, LLLP, No. 3:19-CV-161-CRS,
2021 WL 3754551, at *3 (W.D. Ky. Aug. 24, 2021) (finding a purpose of private financial
gain when the defendant advertised on Facebook); M & J Ballpark Inc., 2016 WL 4750087,
at *3 (finding a commercial purpose when the defendant exhibited a program to 14
customers on 48-inch screens).
Because defendants’ conduct was willful and for a commercial purpose and/or
private financial gain, enhanced damages are appropriate. Courts take various approaches
to determine the appropriate amount of enhanced damages. See J & J Sports Prods., Inc.
v. Cruisin1, Inc., No. 4:17-CV-11155-TGB-DRG, 2019 WL 1584538, at *3 (E.D. Mich.
Apr. 12, 2019) (collecting cases and contrasting approaches). But courts generally consider
factors similar to those considered in determining the appropriate statutory damages award.
See Joe Hand Promotions, Inc. v. Granada Lounge, Inc., No. 11-13062, 2012 WL 447272,
at *2 (E.D. Mich. Feb. 13, 2012).

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Considering these factors, the Court finds that plaintiff’s requested $10,000 award
is excessive. This award equals five times plaintiff’s statutory damages award amount.
True, in a few cases, courts have issued enhanced damages awards with comparable
multipliers [See Doc. 20 p. 11 (citing two cases)]. See, e.g., Rizzi, 2013 WL 6243824, at
*3 (awarding enhanced damages in an amount equal to six times the statutory damages
award where the defendant was a repeat offender and knew yet disregarded the “correct
process of obtaining authorization”). But the Court finds these cases to be anomalous;
most courts in similar circumstances have issued a lesser award of enhanced damages. See,
e.g., Turner, 2021 WL 1383267, at *5 (enhanced damages award equal to statutory
damages award); Sports Page Bar, LLLP, 2021 WL 3754551, at *3 (enhanced damages
award less than statutory damages award); J & J Sports Prods., Inc. v. Club Le’Elegant
Corp., No. 14-12233, 2015 WL 13050011, at *2 (E.D. Mich. Mar. 31, 2015) (enhanced
damages award equal to three times the statutory damages award).
The Eastern District of Michigan’s decision in Dewberry, 2020 WL 2764604, is
instructive. In that case, plaintiff sued the defendants for intercepting a fight, and the court
held that $3,700 was an appropriate statutory damages award for many of the same reasons
the Court has done so. See id. at *1, *3–4. On the issue of enhanced damages, inter alia,
the court noted the defendants advertised the event on Facebook and Instagram. Id. at *5.
However, the court rejected the defendants’ request for an enhanced damages award equal
to five times the statutory damages award amount and instead issued an award equal to
two-and-one-half times the statutory damages award. Id. at *6. The court in part reasoned
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that the defendants were not repeat offenders and that such an award was consistent with
awards in similar cases. Id. (citations omitted).
Like in Dewberry, defendants advertised on Facebook that they would broadcast the
Fight, and plaintiff has not alleged defendants have previously violated the Act.
Consequently, in light of the factors discussed, the Court finds that an enhanced damages
award equal to two-and-one-half times the statutory damages award is appropriate in this
case and will adequately deter future violations of the Act. See J & J Prods., Inc. v. Strange
Clouds Hookah Lounge, Inc., No. 17-11300, 2018 WL 783248, at *3 (E.D. Mich. Feb. 8,
2018) (citation omitted) (noting that § 605 damages should deter violations of the Act).
Therefore, the Court finds that $5,000 is an appropriate enhanced damages award.
3.

Attorneys’ Fees and Costs

Plaintiff requests $1,500 in attorneys’ fees and $627 in costs under
§ 605(e)(3)(B)(iii) [Doc. 20 pp. 12–13].

Section 605(e)(3)(B)(iii) provides, “[t]he

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).

Plaintiff

substantiates its request with an affidavit from plaintiff’s attorney [Doc. 21 p. 2].
First, plaintiff seeks $1,500 in attorneys’ fees, and this sum is derived from six hours
of effort preparing the instant motion at a rate of $250 per hour [Id.]. Courts have found
comparable and indeed identical attorneys’ fees reasonable in similar cases. See, e.g.,
Dewberry, 2020 WL 2764604, at *6–7; J & J Sports Prods., Inc. v. Happy Tavern, LLC,

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No. 15-13042, 2016 WL 1399255, at *3 (E.D. Mich. Apr. 11, 2016). The Court finds
plaintiff’s requested attorneys’ fees award is reasonable and substantiated [Doc. 21 p. 2].
Second, plaintiff seeks to recover $627 in costs that plaintiff incurred to effectuate
service in this action [Id.]. The Court finds that these costs are also reasonable and
substantiated [See id.]. Therefore, the Court will award $1,500 in attorneys’ fees and $627
in costs.
III.

Conclusion
For the foregoing reasons, the Court finds plaintiff is entitled to a default judgment

as to its § 605 claim against defendants. Accordingly, plaintiff’s motion [Doc. 19] will be
GRANTED. The Court will ORDER that plaintiff recover from defendants a total sum
of $9,127 and post-judgment interest according to law from the date of the
contemporaneously-filed judgment order until the amount is paid in full as detailed:
Statutory Damages Enhanced Damages Attorneys’ Fees
$2,000.00

$5,000.00

$1,500.00

Costs

TOTAL

$627.00

$9,127.00

The Clerk of Court will be DIRECTED to CLOSE this case. A separate order will enter.
ENTER:
s/ Thomas A. Varlan
UNITED STATES DISTRICT JUDGE

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