Zuffa, LLC v. Cathcart et al

Filing 20

ORDER AND FINAL JUDGMENT granting 18 Motion for Default Judgment. (Ordered by Judge Barbara M.G. Lynn on 4/25/2011) (anf)

IN THE UNITED STATES DISTRICT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ZUFFA, LLC, d/b/a The Ultimate Fighting
Championship (UFC),
Plaintiff,
v.
MANUEL P. OLIVAREZ, individually,
and as officer, director, shareholder,
and/or principal of OLICAT GROUP LLC,
d/b/a Hooley’s Tavern and Grill, a/k/a
Hooley’s Tavern,
and
OLICAT GROUP LLC, d/b/a Hooley’s
Tavern and Grill, a/k/a Hooley’s Tavern,
Defendants.

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§ CIVIL ACTION NO. 3:10-CV-2278-M
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ORDER AND FINAL JUDGMENT
Before the Court is Plaintiff’s Motion for Default Judgment against Olicat Group LLC
and Manual P. Olivarez [Docket Entry #18]. For the reasons stated below, the Motion is
GRANTED.
I.

BACKGROUND AND PROCEDURAL HISTORY

Where, as here, a default has been entered pursuant to Federal Rule of Civil Procedure
55(a), the factual allegations of the Complaint are taken as true.1 Plaintiff Zuffa, LLC (“UFC”)
is the owner of the distribution rights to a UFC program (the “Event”), broadcast on May 29,
2010 via satellite uplink and retransmitted to cable systems and satellite companies via satellite
signal. For a fee, UFC licensed the broadcast of the Event to commercial customers throughout
1

10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2688 (3d ed.
1998).

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Texas. UFC retained independent auditors to identify commercial establishments that were
exhibiting the broadcast without a license. On May 29, 2010, one of those auditors visited
Defendants’ bar and grill, was not charged a cover fee, and observed Defendants broadcasting
the Event, unlicensed, on ten televisions to 110 people.2 With a capacity of 201 people,3
Defendants would have had to pay a minimum license fee of $1,600 to Plaintiff to lawfully
broadcast the Event.4 The Court takes as true the factual allegation that Defendants pirated the
Event via satellite.
On November 10, 2010, UFC filed an action against Defendants, pursuant to 47 U.S.C.
§§ 553 & 605, seeking statutory damages, attorney’s fees and costs, and interest. On December
29, 2010, service was properly made on both Defendants, but they have failed to answer or
otherwise respond to UFC’s Complaint. On February 25, 2011, the clerk issued an entry of
default.
II.

ANALYSIS

A. Statutory Damages
For a violation of § 605(a), which prohibits the unauthorized interception of interstate
wire communications, 5 Plaintiff may recover statutory damages of not less than $1,000.00, but
no more than $10,000.00.6 As a result of Defendants’ default, the Court concludes that
Defendants unlawfully intercepted and broadcast the Event. Courts have employed several
2

Mot. for Default J., App. Exh. C.
Id.
4
Memo. Law in Supp. of Default J., Exh. A.
5
Courts are split as to whether 47 U.S.C. § 553 or § 605 applies to the unauthorized interception and broadcast of
cable communications. Compare International Cablevision, Inc. v. Sykes, 75 F.3d 123 (2d Cir. 1996) (applying §
605 to interception of satellite signals even after the signals had been picked up by coaxial cables) with United
States v. Norris, 88 F.3d 462, 468–69 (7th Cir. 1996) (applying § 605 to unauthorized interception transmitted by
satellite and § 553 to unauthorized interception of programming transmitted through cable network). The Fifth
Circuit recognizes this split in authority, but has yet to address the issue. See Prostar v. Massachi, 239 F.3d 669,
673–74 (5th Cir. 2001). Plaintiff urges the Court to follow the Second Circuit in Sykes, and the Court agrees to do
so. See Joe Hand Promotions, Inc. v. Garcia, 546 F. Supp. 2d 383, 385 (W.D. Tex. 2008) (applying § 605) (citing
Sykes, 75 F.3d 123 (2d Cir. 1996).
6
47 U.S.C. § 605(e)(3)(C)(i)(ll).
3

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methods to determine an appropriate amount of statutory damages pursuant to § 605: (1)
factoring in the number of patrons, (2) factoring the cost to purchase the viewing license for the
number of patrons, or (3) assessing a flat sum.7 Here, the Court finds it reasonable to award
$5,000, approximately treble what would have been the cost had Defendants acquired the
viewing license,8 to be recovered jointly and severally from Defendants.9
B. Willfulness
Under § 605(e)(3)(C)(ii), a court may award further damages, up to $100,000, if the
violation under § 605 was willful and for the purpose of commercial advantage. Although there
is no direct evidence that Defendants acted willfully, there is circumstantial evidence of same.
“Signals do not descramble spontaneously, nor do television sets connect themselves to cable
distribution systems.”10 The Event was broadcast, without a license, to Defendants’ 110
customers on ten televisions, for commercial advantage.11 Thus, the act was willful under the
statute, and an increase in the damage award is appropriate.
In determining the appropriate size of the increase in damages, courts have generally
multiplied the original damages amount by some factor to determine the additional amount.12
Courts have used factors ranging anywhere from three to seven times the damages amount.13
This Court finds that a factor of three times the damages amount is appropriate, given the
number of patrons and Plaintiff’s requested amount, but lack of evidence of repeated violations.
Thus, the damages award will be increased by $15,000.
7

See Joe Hand Promotions, Inc. v. Garcia, 546 F. Supp. 2d 383, 386 (W.D. Tex. 2008). See also Time Warner
Cable v. Taco Rapido Restaurant, 988 F. Supp. 107, 111 (E.D.N.Y. 1997) (collecting cases).
8
Joe Hand Promotions, Inc., 546 F. Supp. 2d at 386.
9
See Top Rank v. Tacos Mexicanos, No. 01-cv-5977, 2003 WL 21143072, at *6 (E.D.N.Y. Mar. 28, 2003).
10
Kingvision Pay-Per-View, Ltd. v. Scott E’s Pub, Inc., 146 F. Supp. 2d 955, 959 (E.D. Wisc. 2001) (quoting Time
Warner Cable v. Googies Luncheonette, Inc., 77 F. Supp. 2d 485, 490 (S.D.N.Y. 1999)).
11
Entertainment by J & J, Inc. v. Al-Waha Enterprises, Inc., 219 F. Supp. 2d 769, 776–77 (S.D. Tex. 2002).
12
See, e.g., Al- Waha Enters., Inc., 219 F. Supp. 2d at 777 (tripling the damages award).
13
See, e.g., id.; Lauratex Textile Corp. v. Allton Knitting Mills Inc., 519 F. Supp. 730, 733 (S.D.N.Y. 1981)
(awarding seven times the statutory damage amount).

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C. Attorney’s Fees
Under § 605(e)(3)(B)(iii), a prevailing plaintiff is entitled to an award of full costs,
including reasonable attorney’s fees. Plaintiff requests $2,710.00, which the Court finds
reasonable.
III.

CONCLUSION

For the reasons stated above, Plaintiff’s Motion for Default Judgment is GRANTED.
It is therefore ORDERED, ADJUDGED AND DECREED that:
(1) Plaintiff have and recover of and from Defendants the principal sum of FIVE
THOUSAND DOLLARS ($5,000.00), pursuant to 47 U.S.C. § 605(e)(3)(C)(i)(II);
(2) Plaintiff have and recover of and from Defendants the principal sum of FIFTEEN
THOUSAND DOLLARS ($15,000.00), pursuant to 47 U.S.C. § 605(e)(3)(C)(ii), for
Defendants’ willful violation of 47 U.S.C. § 605(a);
(3) Plaintiff have and recover of and from Defendants its reasonable costs and attorney’s
fees, in the amount of TWO THOUSAND SEVEN HUNDRED TEN DOLLARS
($2,710.00), pursuant to 47 U.S.C. § 605(e)(3)(B)(iii); and
(4) All sums awarded above shall bear post-judgment interest at the rate of .24% per
annum until paid.
All relief not expressly granted herein is denied.

SO ORDERED.
April 25, 2011.
_________________________________
BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS

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